HF 2485 (LSB 5648HV (2) 91)

HOUSE FILE 2485

BY  COMMITTEE ON TRANSPORTATION

(SUCCESSOR TO HSB 656)

A BILL FOR

An Act relating to remote sales of motor vehicles.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 321.45, subsection 2, Code 2026, is amended by adding the following new paragraph:
   NEW PARAGRAPH.  c.  For purposes of this subsection, a motor vehicle dealer licensed under chapter 322 shall be deemed to have acquired and to possess the right, title, claim, and interest in a vehicle if the vehicle’s certificate of title is issued or properly assigned to an entity with direct ownership or control over the dealer.
    Sec. 2.  Section 321.63, Code 2026, is amended by adding the following new subsection:
   NEW SUBSECTION.  3.  A dealer shall do all of the following:
   a.  Store all records at a place of business of the dealer or at a place of business within the United States of an entity that has direct ownership or control over the dealer. 
   b.  Provide electronic records to the department within twenty-four hours after receiving a request.
   c.  Provide physical records to the department within a reasonable time considering postal delivery.
    Sec. 3.  Section 322.3, subsection 12, paragraphs a and c, Code 2026, are amended to read as follows:
   a.  The dealer or an entity with direct ownership or control over the dealer shall possess, at the time of the sale, the certificate of title to any motor vehicle offered for remote sale by the dealer.  The certificate of title may be in an electronic format that is created, stored, or transferred only through a secure electronic system approved by the department and shall not be in a portable document format, a scanned copy, evidenced by an electronic mail message, or in another format created by the dealer. 
   c.  The dealer shall not sign a proposed purchase agreement until the dealer receives an executed purchase agreement from the buyer. A signed purchase agreement must be delivered to the dealer’s place of business, as listed on the dealer’s license.
    Sec. 4.  Section 322.3, subsection 12, Code 2026, is amended by adding the following new paragraphs:
   NEW PARAGRAPH.  f.  The dealer shall disclose to a prospective buyer all of the following regarding the vehicle offered for sale:
   (1)  That the vehicle is not located in this state, if applicable.
   (2)  That the certificate of title is in an electronic format, if applicable.
   NEW PARAGRAPH.  g.  If requested, the dealer shall produce proof, including in an electronic format, to the department that the dealer has the certificate of title for a vehicle offered for sale. The dealer shall also retain records showing where a vehicle is stored, the status of the vehicle’s title, and documents relating to the remote sale of a vehicle. The dealer shall store and provide records in accordance with section 321.63, subsection 3.
   NEW PARAGRAPH.  h.  Pursuant to section 554D.108 and consistent with 49 C.F.R. pt. 580 and the federal Electronic Signatures in Global and National Commerce Act, 15 U.S.C. §7001 et seq., an electronic signature captured and applied to an image of a physical certificate of title that was originally printed by a secure printing process as defined in 49 C.F.R. §580.3, which complies with all applicable requirements under 49 C.F.R. pt. 580, shall be accepted for purposes of odometer disclosure. A dealer using an electronic signature on a digital image of a physical title shall mark the original title as “void” or “surrendered” and submit an application for certificate of title and registration electronically via an authorized service provider pursuant to section 321.20, subsection 2.
   NEW PARAGRAPH.  i.  A remote sale of a motor vehicle is not a door-to-door sale as defined in section 555A.1, and is not subject to chapter 555A.
EXPLANATION
The inclusion of this explanation does not constitute agreement with

the explanation’s substance by the members of the general assembly.
   Under current law, a retail seller licensed under Code chapter 322 (motor vehicle manufacturers, distributors, wholesalers, and dealers) is authorized to sell, offer, barter, negotiate, exchange, and communicate regarding the sale of a motor vehicle via mail, either electronically or by courier, and to deliver a vehicle to the residence of the buyer or another agreed-to location (remote sale). This bill relates to remote sales. 
   Under current law, a person does not acquire any right, title, claim, or interest in or to any vehicle subject to registration except by virtue of a certificate of title or manufacturer’s or importer’s certificate for such vehicle, with certain exceptions. The bill provides that a licensed motor vehicle dealer is deemed to have acquired and to possess the right, title, claim, and interest in a vehicle if the vehicle’s certificate of title is issued or properly assigned to an entity with direct ownership or control over the dealer. 
   Under current law, if a dealer has more than one established place of business, the dealer may designate one such location in this state for purposes of keeping all the dealer’s books and records, regardless of the line-make of motor vehicles to which such books and records pertain, by submitting a written certification to the department of transportation (DOT) in a manner approved by the DOT. The bill requires a dealer to store all records at a place of business of the dealer or at a place of business within the United States of an entity that has direct ownership or control over the dealer, provide electronic records to the DOT within 24 hours after receiving a request, and provide physical records to the DOT within a reasonable time considering postal delivery.
   The bill expands the requirement for a dealer to possess the certificate of title to any motor vehicle offered for remote sale by authorizing an entity with direct ownership or control over a dealer to possess the title at the time of the sale. Under the bill, the certificate of title may be in an electronic format as described in the bill.
   The bill strikes a provision prohibiting a dealer, during a remote sale, from signing a proposed purchase agreement until the dealer receives an executed purchase agreement from a buyer.
   The bill requires a dealer engaging in a remote sale to disclose to a prospective buyer certain facts about the location and title status of a vehicle. A dealer is required to produce proof that the dealer has the certificate of title for a vehicle offered for sale if requested by the DOT. The dealer is required to retain records showing where a vehicle is stored, the status of the vehicle’s title, and documents relating to the remote sale of the vehicle, in accordance with the bill. 
   For purposes of remote sales, the bill requires an electronic signature captured and applied to an image of a physical certificate of title that was originally printed by a secure printing process in compliance with all applicable requirements under federal regulations to be accepted for purposes of odometer disclosure. A dealer using an electronic signature on a digital image of a physical title is required to mark the original title as “void” or “surrendered” and submit an application for certificate of title and registration electronically in accordance with current law.
   The bill specifies that a remote sale of a motor vehicle is not a “door-to-door sale” and is not subject to Code chapter 555A (door-to-door sales). 
   Under current law and the bill, remote sales are subject to Code chapter 554D (electronic transactions —— computer agreements).