SSB 1233 (LSB 2374SC (3) 86)

SENATE FILE _____

BY  (PROPOSED COMMITTEE ON TRANSPORTATION BILL BY CHAIRPERSON BOWMAN)

A BILL FOR

An Act relating to the activities of motor vehicle dealers and wholesalers, and providing penalties.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 321.71, subsections 7 and 9, Code 2015, are amended to read as follows:
   7.  A certificate of title shall not be issued for a motor vehicle less than ten twenty-four model years old which is equipped with an odometer by the manufacturer, unless an odometer statement which is in compliance with federal law and regulations has been made by the transferor of the vehicle and is furnished with the application for certificate of title. The new certificate of title shall record on its face the odometer reading and the word “actual” if the true mileage is known. If the odometer reading is not the true mileage or the true mileage is unknown, the words “not actual” shall be recorded. If the odometer reading is greater than the odometer can mechanically count, the words “exceeds the mechanical limits” shall be recorded. However, a certificate of title may be issued for a motor vehicle to a person who moves into this state if the person acquired ownership of the motor vehicle prior to moving to this state. This subsection does not apply to motor vehicles having a gross vehicle weight rating of more than sixteen thousand pounds.
   9.  An Iowa licensed motor vehicle dealer shall not have in possession as inventory for sale a used motor vehicle acquired by the dealer after the tenth twenty-fourth model year prior to the current registration year, for which the dealer does not possess an odometer statement by the transferor which is in compliance with federal law and regulations unless a certificate of title has been issued for the vehicle in the name of the dealer. Transfer of a new motor vehicle with an ownership document which is a manufacturer’s statement of origin requires an odometer statement only when transferred at retail.
    Sec. 2.  Section 321.104, subsection 4, Code 2015, is amended to read as follows:
   4.  To sell, offer for sale, or transfer a motor vehicle, trailer, or semitrailer, except as provided in section 321.47 or 321.48, without obtaining a certificate of title in the name of the seller or transferor or without delivering to the purchaser or transferee a certificate of title or a manufacturer’s or importer’s certificate duly assigned to the purchaser or transferee as provided in this chapter.
    Sec. 3.  Section 321.104, Code 2015, is amended by adding the following new subsection:
   NEW SUBSECTION.  4A.  To sell, offer for sale, or transfer a motor vehicle, trailer, or semitrailer, except as provided in section 321.47 or 321.48, without delivering to the purchaser or transferee a certificate of title or a manufacturer’s or importer’s certificate duly assigned to the purchaser or transferee as provided in this chapter.
    Sec. 4.  Section 322.2, subsection 7, Code 2015, is amended to read as follows:
   7.  “Engaged in the business” means doing any of the following acts for the purpose of the sale of motor vehicles at retail:  acquiring, selling, exchanging, holding, offering, displaying, brokering, accepting on consignment, conducting a retail auction, or advertising as being engaged in or acting as an agent for the purpose of doing any of those acts. A person selling at retail more than six motor vehicles during a twelve-month period may be presumed to be engaged in the business.
    Sec. 5.  Section 322.2, Code 2015, is amended by adding the following new subsection:
   NEW SUBSECTION.  20A.  “Salesperson” means a person employed by a motor vehicle dealer for the purpose of selling motor vehicles.
    Sec. 6.  Section 322.3, Code 2015, is amended by adding the following new subsection:
   NEW SUBSECTION.  16.  A person licensed under this chapter as a motor vehicle dealer or wholesaler shall not sell, loan, rent, lease, or charge a fee for the use of such license to another person for the purpose of allowing that person to sell a motor vehicle for financial gain. A violation of this subsection shall result in the revocation of such license in addition to the penalties set forth in section 322.14.
    Sec. 7.  Section 322.4, subsection 1, paragraph a, subparagraphs (2) and (3), Code 2015, are amended to read as follows:
   (2)  If the applicant is a partnership, the name or style under which the partnership intends to engage in such business and the name and bona fide address of two partners each partner.
   (3)  If the applicant is a corporation, the state of incorporation and the name and bona fide address of two officers each officer of the corporation.
    Sec. 8.  Section 322.21, Code 2015, is amended to read as follows:
   322.21  Remaining balance on trade vehicle.
   1.  The extension of credit by a retail seller to a retail buyer, pursuant to a retail installment contract, of the amount actually paid or to be paid by the retail seller to discharge a purchase-money security interest, as provided in section 554.9103, on a motor vehicle traded in by the retail buyer shall not subject the retail seller to the provisions of chapter 536 or 536A.
   2.  A motor vehicle dealer who takes possession of a motor vehicle from a retail buyer for the purpose of resale upon which there is an outstanding lien or encumbrance shall tender full payment on the outstanding lien or encumbrance within ten business days after the motor vehicle dealer takes possession of the motor vehicle from the retail buyer, provided the retail installment contract has been executed by the retail buyer and the dealer.
    Sec. 9.  NEW SECTION.  322.34  Dealer advertising.

   Advertising by a motor vehicle dealer licensed under this chapter shall include the dealership’s name, address, and landline telephone number, and may include the dealership’s cellular telephone number, if applicable.
    Sec. 10.  Section 322C.2, Code 2015, is amended by adding the following new subsection:
   NEW SUBSECTION.  8A.  “Salesperson” means a person employed by a travel trailer dealer for the purpose of selling travel trailers.
EXPLANATION
The inclusion of this explanation does not constitute agreement with

the explanation’s substance by the members of the general assembly.
   This bill relates to the activities of motor vehicle dealers and wholesalers.
   Current law provides that a motor vehicle dealer shall not have in its possession as inventory for sale, and a certificate of title shall not be issued for, a motor vehicle less than 10 model years old which is equipped with an odometer by the manufacturer unless an odometer statement has been made by the transferor of the vehicle. The bill expands this provision to include motor vehicles less than 24 model years old. A violation of this provision is a fraudulent practice.
   Current law provides that it is a simple misdemeanor punishable by a $100 fine to sell, offer for sale, or transfer a motor vehicle without obtaining a certificate of title in the name of the seller or transferor. Current law also provides that it is a simple misdemeanor punishable by a $100 fine to sell, offer for sale, or transfer a motor vehicle without delivering to the purchaser or transferee a certificate of title or a manufacturer’s or importer’s certificate duly assigned to the purchaser or transferee. The bill separates these provisions into two subsections.
   The bill alters the definition of “engaged in the business” to include advertising as being engaged in acquiring, selling, exchanging, holding, offering, displaying, brokering, accepting on consignment, or conducting a retail auction of motor vehicles for the purpose of sale at retail. The bill also defines “salesperson” as a person employed by a motor vehicle dealer for the purpose of selling motor vehicles.
   The bill provides that a person licensed as a motor vehicle dealer or wholesaler shall not sell, loan, rent, lease, or charge a fee for the use of such license to another person for the purpose of allowing that person to sell a motor vehicle for financial gain. A violation of this provision shall result in the revocation of such license in addition to the penalties set forth in Code section 322.14.
   Current law requires two partners of a partnership and two officers of a corporation to be named on a motor vehicle dealer license application. The bill requires all partners of a partnership and all officers of corporation to be named on a motor vehicle dealer license application.
   The bill provides that a motor vehicle dealer who takes possession of a motor vehicle from a retail buyer for the purpose of resale upon which there is an outstanding lien or encumbrance shall tender full payment on the outstanding lien or encumbrance within 10 business days after the motor vehicle dealer takes possession of the motor vehicle from the retail buyer, provided the retail installment contract has been executed by the retail buyer and the dealer.
   The bill further provides that advertising by a motor vehicle dealer shall include the dealership’s name, address, and landline telephone number, and may include the dealership’s cellular telephone number, if applicable.
   Under Code section 322.14, a person who violates any of the provisions of Code chapter 322 for which a penalty is not specifically provided is guilty of a simple misdemeanor punishable by a fine of not less than $250 nor more than $1,500, or by imprisonment not to exceed 30 days.
   For purposes of Code chapter 322C relating to travel trailer dealers, manufacturers, and distributors, the bill defines “salesperson” as a person employed by a travel trailer dealer for the purpose of selling travel trailers.