SF 2047 (LSB 5069XS (3) 87)

SENATE FILE 2047

BY  CHELGREN

A BILL FOR

An Act allowing consignment sales of used motor homes and travel trailers, and providing penalties.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 321.48, subsection 3, Code 2018, is amended to read as follows:
   3.  Notwithstanding subsections 1 and 2, requirements in those subsections for obtaining title to a vehicle or acknowledging assignment and warranty of title do not apply to a dealer who sells a motor vehicle to a purchaser in a consignment transaction authorized under section 322.7B or 322.7C, or to a dealer who sells a travel trailer to a purchaser in a consignment transaction authorized under section 322C.13.
    Sec. 2.  NEW SECTION.  322.7C  Consignment sales of motor homes.
   A licensed motor vehicle dealer may sell a motor home as defined in section 321.1 that is a used motor vehicle on a consignment basis if all of the following conditions apply:
   1.  The dealer is licensed to sell used motor vehicles.
   2.  The dealer prominently displays the words “consignment vehicle” on the motor home and indicates clearly in the sales documentation that the motor home is a consignment vehicle. The dealer shall put customers on notice that the dealer does not have title to the motor home and does not warranty the title.
   3.  The dealer assumes no liability for damages resulting from a customer’s test drive of the motor home, and the consignor maintains financial liability coverage as required under section 321.20B for the motor home throughout the term of the consignment.
   4.  The consignor provides the dealer with a damage disclosure statement meeting the requirements of section 321.69 and an odometer statement meeting the requirements of section 321.71, which the dealer shall make available upon request to a customer. For purposes of section 321.69 and 321.71, the consignor, not the dealer, shall be deemed to be the transferor or seller of the motor home.
    Sec. 3.  Section 322.9, subsection 2, Code 2018, is amended to read as follows:
   2.  The department may revoke or suspend the license of a retail motor vehicle dealer if, after notice and hearing by the department of inspections and appeals, it finds that the licensee has been convicted or has forfeited bail on three charges of:
   a.  Failing upon the sale or transfer of a vehicle, except upon the sale of a vehicle under section 322.7B or 322.7C, to deliver to the purchaser or transferee of the vehicle sold or transferred, a manufacturer’s or importer’s certificate, or a certificate of title duly assigned, as provided in chapter 321.
   b.  Failing upon the purchasing or otherwise acquiring of a vehicle, except a vehicle acquired on consignment under section 322.7B or 322.7C, to obtain a manufacturer’s or importer’s certificate, or a certificate of title duly assigned as provided in chapter 321.
   c.  Failing upon the purchasing or otherwise acquiring of a vehicle, except a vehicle acquired on consignment under section 322.7B or 322.7C, to obtain a new certificate of title to such vehicle when and where required in chapter 321.
    Sec. 4.  NEW SECTION.  322C.13  Consignment sales of travel trailers.
   A licensed travel trailer dealer may sell a used travel trailer on a consignment basis if all of the following conditions apply:
   1.  The dealer is licensed to sell used travel trailers.
   2.  The dealer prominently displays the words “consignment vehicle” on the travel trailer and indicates clearly in the sales documentation that the travel trailer is a consignment vehicle. The dealer shall put customers on notice that the dealer does not have title to the travel trailer and does not warranty the title.
   3.  The dealer assumes no liability for damages resulting from a customer’s test drive of a motor vehicle towing the travel trailer.
   4.  The consignor provides the dealer with a damage disclosure statement for the travel trailer, which the dealer shall make available upon request to a customer. The damage disclosure statement shall, at a minimum, state whether the consignor knows if the travel trailer was titled as a salvage, rebuilt, or flood vehicle in this or any other state, as applicable, prior to the consignor’s ownership of the travel trailer and, if not, whether the consignor knows if the travel trailer was damaged to the extent that, were the travel trailer a motor vehicle, it would be a wrecked or salvage vehicle as defined in section 321.52, subsection 4, paragraph “e”, during or prior to the consignor’s ownership of the travel trailer. The damage disclosure statement forms shall be approved by the department. The consignor shall maintain a copy of the damage disclosure statement for five years following the date of the statement. The copy shall be made available to the department or the attorney general upon request. A consignor who knowingly makes a false damage disclosure statement or fails to make a damage disclosure statement required by this subsection commits a fraudulent practice. Failure of a consignor to comply with any duty imposed by this subsection constitutes a violation of section 714.16, subsection 2, paragraph “a”.
    Sec. 5.  Section 714H.3, subsection 2, paragraph a, Code 2018, is amended to read as follows:
   a.  Section 321.69 or section 322C.13, subsection 4.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill allows a licensed motor vehicle dealer to sell a used motor home on a consignment basis if the dealer is licensed to sell used motor vehicles, the dealer prominently displays the words “consignment vehicle” on the motor home and indicates clearly in the sales documentation that the motor home is a consignment vehicle, the dealer puts customers on notice that the dealer does not have title to the motor home and does not warranty the title, the dealer assumes no liability for damages resulting from a customer’s test drive of the motor home, the consignor maintains financial liability coverage for the motor home throughout the term of the consignment, and the consignor provides the dealer with a damage disclosure statement and an odometer statement for the motor home, which the dealer must make available upon request to a customer. The bill provides that for purposes of Code section 321.69 (damage disclosure statement) and Code section 321.71 (odometer requirements), the consignor, not the dealer, shall be deemed the transferor or seller of the motor home.
   The bill allows a licensed travel trailer dealer to sell a used travel trailer on a consignment basis if the dealer is licensed to sell used travel trailers, the dealer prominently displays the words “consignment vehicle” on the travel trailer and indicates clearly in the sales documentation that the travel trailer is a consignment vehicle, the dealer puts customers on notice that the dealer does not have title to the travel trailer and does not warranty the title, the dealer assumes no liability for damages resulting from a customer’s test drive of a motor vehicle towing the travel trailer, and the consignor provides the dealer with a damage disclosure statement for the travel trailer, which the dealer shall make available upon request to a customer. 
   The bill requires travel trailer damage disclosure statements to, at a minimum, state whether the consignor knows if the travel trailer was titled as a salvage, rebuilt, or flood vehicle in this or any other state, as applicable, prior to the consignor’s ownership of the vehicle and, if not, whether the consignor knows if the travel trailer was damaged to the extent that, were the travel trailer a motor vehicle, it would be a wrecked or salvage vehicle as defined in Code section 321.52 during or prior to the consignor’s ownership of the travel trailer. The bill provides that damage disclosure statement forms shall be approved by the department of transportation (DOT). The bill requires the consignor to maintain a copy of the damage disclosure statement for five years following the date of the statement, which copy must be made available to the DOT or the attorney general upon request.
   Under current law, Code section 321.69 provides that a person who knowingly makes a false motor vehicle damage disclosure statement or fails to make a required motor vehicle damage disclosure statement commits a fraudulent practice punishable by certain criminal penalties under Code sections 714.9 through 714.13. Failure of a person, vehicle recycler, or vehicle dealer to comply with any duty imposed by Code section 321.69 constitutes a violation of Code section 714.16(2)(a) (consumer frauds), which is subject to civil remedies and penalties. The bill provides that a consignor who knowingly makes a false travel trailer damage disclosure statement or fails to make a travel trailer damage disclosure statement required by the bill commits a fraudulent practice punishable by criminal penalties under Code sections 714.9 through 714.13. The bill also provides that failure of a consignor to comply with any duty imposed by new Code section 322C.13(4) constitutes a violation of Code section 714.16(2)(a), which is subject to civil remedies and penalties. In addition, the bill provides that a person who commits the violation may be subject to a private cause of action under Code chapter 714H (consumer fraud —— private actions).
   The bill excludes dealers selling motor homes or travel trailers on a consignment basis from various requirements for obtaining a title or a manufacturer’s or importer’s certificate, or acknowledging assignment and warranty of title.