Senate File 2024 - Introduced SENATE FILE 2024 BY ZAUN A BILL FOR An Act relating to persons who are subject to motor vehicle 1 dealer licensing requirements. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 5033XS (6) 85 dea/nh

S.F. 2024 Section 1. Section 321.1, subsection 17, Code 2014, is 1 amended to read as follows: 2 17. “Dealer” means every person engaged in the business 3 of buying, selling, or exchanging vehicles of a type required 4 to be registered hereunder under this chapter and who has 5 an established place of business for such purpose in this 6 state. “Dealer” includes those persons required to be licensed 7 as dealers under chapters 322 and 322C . “Dealer” does not 8 include a person who acts as a broker or consignee of motor 9 vehicles for sale at retail or a person who conducts an auction 10 for the sale of motor vehicles at retail if the person is 11 not otherwise engaged in the business of buying, selling, or 12 exchanging vehicles of a type required to be registered under 13 this chapter. 14 Sec. 2. Section 321.24, subsection 7, Code 2014, is amended 15 to read as follows: 16 7. The certificate shall contain the name of the county 17 treasurer or of the department and, if the certificate of 18 title is printed, the signature of the county treasurer, the 19 deputy county treasurer, or the department director or deputy 20 designee. The certificate of title shall contain upon the 21 reverse side a form for assignment of title or interest and 22 warranty by the owner, for reassignments by a dealer licensed 23 in this state or in another state if the state in which the 24 dealer is licensed permits Iowa licensed dealers to similarly 25 reassign certificates of title. However, titles for mobile 26 homes or manufactured homes shall not be reassigned by licensed 27 dealers. Notwithstanding section 321.1, subsection 17 , as 28 used in this paragraph subsection, “dealer” means every person 29 engaged in the business of buying, selling, or exchanging 30 vehicles of a type required to be registered under this 31 chapter , other than a person who acts as a broker or consignee 32 of motor vehicles for sale at retail or a person who conducts 33 an auction for the sale of motor vehicles at retail if the 34 person is not otherwise engaged in the business of buying, 35 -1- LSB 5033XS (6) 85 dea/nh 1/ 4

S.F. 2024 selling, or exchanging vehicles of a type required to be 1 registered under this chapter . 2 Sec. 3. Section 321.45, subsection 3, Code 2014, is amended 3 to read as follows: 4 3. Upon the transfer of any registered vehicle, the owner, 5 except as otherwise provided in this chapter , shall endorse an 6 assignment and warranty of title upon the certificate of title 7 for such vehicle with a statement of all liens and encumbrances 8 thereon, and the owner shall deliver the certificate of title 9 to the purchaser or transferee at the time of delivering the 10 vehicle except as otherwise provided in this chapter . The 11 owner shall indicate to the transferee the name of the county 12 in which the vehicle was last registered and the registration 13 expiration date. If a motor vehicle is sold at retail through 14 a person, other than a licensed dealer, who is a broker, 15 consignee, or person conducting an auction, the owner of 16 the motor vehicle or the owner’s designee shall deliver the 17 certificate of title, duly assigned by the owner, to the 18 purchaser or transferee at conclusion of the sale. 19 Sec. 4. Section 322.2, subsection 7, Code 2014, is amended 20 to read as follows: 21 7. a. “Engaged in the business” means doing any of the 22 following acts for the purpose of the sale of motor vehicles at 23 retail: acquiring, selling, exchanging, holding, offering, or 24 displaying, brokering, accepting on consignment, conducting a 25 retail auction, or acting as an agent for the purpose of doing 26 any of those acts. A Except as provided in paragraph “b” , a 27 person selling at retail more than six twelve motor vehicles 28 during a twelve-month period may be presumed to be engaged in 29 the business. 30 b. “Engaged in the business” does not include acting as 31 a broker in the sale of motor vehicles at retail, offering 32 motor vehicles for sale at retail on a consignment basis, or 33 conducting an auction for the sale of motor vehicles at retail. 34 EXPLANATION 35 -2- LSB 5033XS (6) 85 dea/nh 2/ 4

S.F. 2024 The inclusion of this explanation does not constitute agreement with 1 the explanation’s substance by the members of the general assembly. 2 Under current law, a motor vehicle dealer who accepts a 3 vehicle for resale is not required to obtain a new certificate 4 of title for the vehicle, but the dealer is required to execute 5 and acknowledge an assignment and warranty of title upon the 6 certificate of title and deliver it to the subsequent purchaser 7 of the vehicle. This process, known as “reassignment”, is 8 required in all retail sales transactions involving a motor 9 vehicle dealer. Any person who sells more than six motor 10 vehicles during a 12-month period is considered to be engaged 11 in the business of selling motor vehicles at retail and 12 is subject to dealer licensing requirements and provisions 13 relating to the transfer of ownership of motor vehicles sold 14 at retail. 15 This bill amends the definition of “engaged in the business” 16 in Code chapter 322 to allow a person to sell up to 12 motor 17 vehicles in a 12-month period without a dealer’s license. 18 The definition is further amended to exclude brokering, 19 accepting on consignment, or conducting an auction for the sale 20 of motor vehicles at retail, thereby exempting persons who 21 engage exclusively in those activities from dealer licensing 22 requirements. In addition, the bill amends definitions of 23 “dealer” in Code chapter 321 to exclude brokers and consignees 24 of motor vehicles for sale at retail and persons who conduct 25 retail motor vehicle auctions if such persons are not otherwise 26 engaged in the business of buying, selling, or exchanging 27 vehicles of a type required to be registered. Under the bill, 28 such agents would not be required to accept assignment of a 29 certificate of title for a vehicle to be offered for sale at 30 retail. The bill specifies that the owner or the owner’s 31 designee shall deliver the certificate of title, duly assigned, 32 to the purchaser or transferee at conclusion of such a sale. 33 Because of the changes to the definitions of “dealer” and 34 “engaged in the business”, certain other provisions that apply 35 -3- LSB 5033XS (6) 85 dea/nh 3/ 4

S.F. 2024 to licensed motor vehicle dealers under Code chapter 321 would 1 not apply to brokers, consignees, persons who conduct retail 2 auctions, and persons who sell up to 12 motor vehicles in a 3 12-month period, including but not limited to requirements for 4 damage disclosure statement recordkeeping, odometer statements, 5 and “in-transit” permits. 6 -4- LSB 5033XS (6) 85 dea/nh 4/ 4