Senate Study Bill 3124 - Introduced SENATE FILE _____ BY (PROPOSED COMMITTEE ON TRANSPORTATION BILL BY CHAIRPERSON BOWMAN) A BILL FOR An Act relating to the use of licenses and advertisements 1 by motor vehicle dealers and wholesalers, and providing 2 penalties. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 5585XC (2) 86 ns/nh

S.F. _____ Section 1. Section 322.2, subsection 7, Code 2016, is 1 amended to read as follows: 2 7. “Engaged in the business” means doing any of the 3 following acts for the purpose of the sale of motor vehicles 4 at retail: acquiring, selling, exchanging, holding, offering, 5 displaying, brokering, accepting on consignment, conducting a 6 retail auction, advertising as being engaged in any of those 7 acts, or acting as an agent for the purpose of doing any of 8 those acts. A person selling at retail more than six motor 9 vehicles during a twelve-month period may be presumed to be 10 engaged in the business. 11 Sec. 2. Section 322.3, subsection 3, Code 2016, is amended 12 to read as follows: 13 3. Subsections 1 , and 2 , and 16 shall not be construed 14 to require the separate licensing of persons employed as 15 salespersons of motor vehicles by a retail motor vehicle 16 dealer. However, the department may promulgate reasonable 17 rules as necessary for the proper identification of persons 18 employed as salespersons. 19 Sec. 3. Section 322.3, Code 2016, is amended by adding the 20 following new subsection: 21 NEW SUBSECTION . 16. A motor vehicle dealer or wholesaler 22 licensed under this chapter shall not sell, loan, rent, lease, 23 or charge a fee for the use of the license to another person for 24 the purpose of allowing the person to engage in the business 25 of selling motor vehicles. A violation of this subsection may 26 result in the revocation of the dealer’s license pursuant to 27 section 322.9 or the revocation of the wholesaler’s license 28 pursuant to section 322.31, in addition to any other penalty 29 provided by law. 30 Sec. 4. NEW SECTION . 322.7C Motor vehicle dealer 31 advertising. 32 A print or digital media advertisement by a motor vehicle 33 dealer licensed under this chapter, other than an advertisement 34 located on the premises of the dealer’s place of business, 35 -1- LSB 5585XC (2) 86 ns/nh 1/ 3

S.F. _____ shall include the name under which the dealer engages in the 1 business, the dealer’s general distinguishing number assigned 2 by the department pursuant to section 321.59, and a landline 3 telephone number of the dealer. An advertisement may also 4 contain a cellular telephone number of the dealer. 5 Sec. 5. Section 322.14, subsection 1, Code 2016, is amended 6 to read as follows: 7 1. A person who violates any of the provisions of this 8 chapter for which a penalty is not specifically provided is 9 guilty of the following offenses: 10 a. For the first violation, a simple misdemeanor punishable 11 by a fine of not less than two hundred fifty dollars nor more 12 than one thousand five hundred dollars or by imprisonment not 13 to exceed thirty days. 14 b. For the second violation, a serious misdemeanor. 15 c. For the third violation, an aggravated misdemeanor. 16 d. For the fourth or a subsequent violation, a class “D” 17 felony. 18 EXPLANATION 19 The inclusion of this explanation does not constitute agreement with 20 the explanation’s substance by the members of the general assembly. 21 This bill expands the definition of “engaged in the 22 business” as the term relates to motor vehicle manufacturers, 23 distributors, wholesalers, and dealers to include advertising 24 as being engaged in acquiring, selling, exchanging, holding, 25 offering, displaying, brokering, accepting on consignment, or 26 conducting a retail auction of motor vehicles. 27 The bill prohibits a licensed motor vehicle dealer or 28 wholesaler from selling, loaning, renting, leasing, or charging 29 a fee for the use of the license to another person for the 30 purpose of allowing the person to engage in the business of 31 selling motor vehicles. A violation of the provision may 32 result in the revocation of the dealer’s or wholesaler’s 33 license. The provision does not require the separate licensing 34 of persons employed as salespersons by a dealer. 35 -2- LSB 5585XC (2) 86 ns/nh 2/ 3

S.F. _____ The bill requires a print or digital media advertisement by 1 a motor vehicle dealer, other than an advertisement located 2 on the premises of the dealer’s place of business, to include 3 the name under which the dealer engages in the business, 4 the dealer’s general distinguishing number assigned by the 5 department of transportation, and a landline telephone number 6 of the dealer. An advertisement may also contain a cell phone 7 number of the dealer. 8 Under current law, a violation of a provision of Code chapter 9 322 (motor vehicle manufacturers, distributors, wholesalers, 10 and dealers) is a simple misdemeanor punishable by a fine of 11 not less than $250 nor more than $1,500 or by imprisonment not 12 to exceed 30 days. The bill provides that a second violation 13 is a serious misdemeanor punishable by a fine of at least 14 $315 but not to exceed $1,875 and imprisonment not to exceed 15 one year, a third violation is an aggravated misdemeanor 16 punishable by a fine of at least $625 but not to exceed $6,250 17 and imprisonment not to exceed two years, and a fourth or 18 subsequent violation is a class “D” felony punishable by a fine 19 of at least $750 but not to exceed $7,500 and imprisonment not 20 to exceed five years. 21 -3- LSB 5585XC (2) 86 ns/nh 3/ 3