Senate Study Bill 3136 - Introduced SENATE FILE _____ BY (PROPOSED COMMITTEE ON TRANSPORTATION BILL BY CHAIRPERSON BOWMAN) A BILL FOR An Act providing an exemption from registration fees for 1 certain new completed motor vehicles purchased by an 2 equipment dealer for modification and resale. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 5660XC (5) 85 dea/tm

S.F. _____ Section 1. Section 321.48, Code 2014, is amended by adding 1 the following new subsection: 2 NEW SUBSECTION . 3A. A transferee of a new completed motor 3 vehicle shall obtain a certificate of title for the vehicle 4 but is not required to pay the annual registration fee for the 5 vehicle, provided all of the following apply: 6 a. The transferee is an equipment dealer licensed as a motor 7 vehicle dealer under chapter 322. 8 b. The transferee purchases the vehicle at retail for 9 the purpose of modifying the vehicle as provided in section 10 321.105A, subsection 2, paragraph “c” , subparagraph (31), prior 11 to selling it as a used vehicle to a business or government 12 entity. 13 c. The transferee operates the vehicle only for purposes 14 incidental to a resale. 15 d. The transferee displays a dealer plate on the vehicle or 16 does not drive the vehicle or permit it to be driven upon the 17 highways. 18 Sec. 2. Section 321.105A, subsection 2, paragraph c, Code 19 2014, is amended by adding the following new subparagraph: 20 NEW SUBPARAGRAPH . (31) (a) A new completed motor vehicle 21 purchased at retail by an equipment dealer who is licensed as a 22 motor vehicle dealer under chapter 322, provided that all of 23 the following apply: 24 (i) The equipment dealer modifies the vehicle as provided 25 in subparagraph division (b), subparagraph subdivision (i) or 26 (ii). 27 (ii) The total value of the work performed and the equipment 28 installed on the vehicle equals or exceeds eighty percent of 29 the purchase price paid for the new vehicle. 30 (iii) Notwithstanding section 322.3, the equipment dealer 31 sells the modified vehicle as a used vehicle to a purchaser 32 that is a business or government entity, and not an individual 33 consumer. 34 (b) For purposes of this subparagraph, “equipment dealer” 35 -1- LSB 5660XC (5) 85 dea/tm 1/ 3

S.F. _____ means a person who does at least one of the following: 1 (i) Rebuilds new completed motor vehicles by fabricating, 2 altering, adding, or replacing essential parts, components, 3 or equipment for the purpose of building an ambulance, rescue 4 vehicle, fire vehicle, or towing or recovery vehicle. 5 (ii) Installs cranes, hook loaders, buckets, aerial 6 ladders, tanks, or special equipment on new completed motor 7 trucks with a gross vehicle weight rating of fourteen thousand 8 five hundred pounds or more. 9 EXPLANATION 10 The inclusion of this explanation does not constitute agreement with 11 the explanation’s substance by the members of the general assembly. 12 Under current law, an equipment dealer who rebuilds or 13 installs equipment on new vehicles can be licensed as a 14 wholesaler in order to acquire new vehicles without having 15 to title and register the vehicles or pay the fee for new 16 registration. However, after such a vehicle has been modified, 17 the retail sale of the modified vehicle must be completed 18 through a franchised dealer of the vehicle’s line make. 19 This bill establishes an alternative process for an 20 equipment dealer with a motor vehicle dealer’s license to 21 acquire a new completed motor vehicle without owing the fee 22 for new registration and, after modifying the vehicle, sell it 23 directly to a business or government entity as a used vehicle. 24 Under the bill, a new completed motor vehicle purchased at 25 retail by an equipment dealer licensed to sell motor vehicles 26 is exempt from the fee for new registration, provided that 27 three requirements are met: 28 1. The equipment dealer either rebuilds the new completed 29 motor vehicle by fabricating, altering, adding, or replacing 30 essential parts, components, or equipment for the purpose 31 of building an ambulance, rescue vehicle, fire vehicle, or 32 towing or recovery vehicle; or installs cranes, hook loaders, 33 buckets, aerial ladders, tanks, or special equipment on the new 34 completed motor truck having a gross vehicle weight rating of 35 -2- LSB 5660XC (5) 85 dea/tm 2/ 3

S.F. _____ fourteen thousand five hundred pounds or more. 1 2. The total value of the work performed and the equipment 2 installed on the vehicle equals or exceeds 80 percent of the 3 purchase price paid for the new vehicle. 4 3. The equipment dealer sells the modified vehicle as a used 5 vehicle to a purchaser that is a business or government entity, 6 and not an individual consumer. 7 Because the equipment dealer’s acquisition of a new 8 completed motor vehicle would be through a retail sale, the 9 equipment dealer would be required to obtain a certificate 10 of title and registration for the vehicle under the bill. 11 However, the bill exempts the equipment dealer from annual 12 registration fees, provided that the equipment dealer operates 13 the vehicle only for purposes incidental to a resale and 14 displays a dealer plate on the vehicle or does not drive the 15 vehicle or permit it to be driven upon the highways. 16 -3- LSB 5660XC (5) 85 dea/tm 3/ 3