SSB 3126 (LSB 5648XC (5) 91)

SENATE FILE _____ 

BY  (PROPOSED COMMITTEE ON TRANSPORTATION BILL BY CHAIRPERSON ZUMBACH)

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, paragraph a, Code 2026, is amended by adding the following new subparagraph:
   NEW SUBPARAGRAPH.  (7)  A person who purchases a vehicle via a remote sale in accordance with section 322.3, subsection 12.
    Sec. 2.  Section 321.67, subsection 1, Code 2026, is amended to read as follows:
   1.  No person, except Except as provided in sections 321.23 and 321.45, section 321.52, subsection 2, paragraph “b”, and section 321.52, subsection 4, paragraph “a”, and section 322.3, subsection 12, a person shall not sell or otherwise dispose of a registered vehicle or a vehicle subject to registration without delivering to the purchaser or transferee thereof a certificate of title with such assignment thereon as may be necessary to show title in the purchaser.
    Sec. 3.  Section 322.3, subsection 12, unnumbered paragraph 1, Code 2026, is amended to read as follows:
   A retail seller licensed under this chapter may engage in remote sales of motor vehicles located at a place of business of the retail seller, as listed on the license, under all of the following conditions:
    Sec. 4.  Section 322.3, subsection 12, paragraphs a and c, Code 2026, are amended to read as follows:
   a.  The dealer shall possess, at the time of the sale, the certificate of title to any motor vehicle offered for remote sale.  The certificate of title may be in an electronic format that is created, stored, and transferred only through a secure electronic system approved by the department.
   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 that is listed on the dealer’s license.
    Sec. 5.  Section 322.3, subsection 12, Code 2026, is amended by adding the following new paragraphs:
   NEW PARAGRAPH.  f.  A person who purchases a motor vehicle via a remote sale shall acquire right to, claim to, and interest in the motor vehicle at the time of delivery. The seller must otherwise deliver the certificate of title pursuant to section 321.45, but may do so within thirty days after delivery of the motor vehicle.
   NEW PARAGRAPH.  g.  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)  Whether the dealer has a certificate of title to the vehicle, including whether the certificate of title is in an electronic format, if applicable, or whether the dealer does not have the certificate of title to the vehicle, if applicable.
   (3)  The estimated delivery date of the vehicle.
   NEW PARAGRAPH.  h.  The dealer shall produce proof the dealer has the certificate of title for a vehicle offered for sale within twenty-four hours if requested by the department. 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 the vehicle.
   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). Motor vehicles sold in a remote sale must be located at the place of business as listed on the seller’s license. This bill strikes the phrase “as listed on the license”. The bill does not amend the requirement to list on a license application the location of each place of business within Iowa to be used by the applicant for the conduct of the applicant’s business (Code section 322.4(1)(c)) or the requirement to list on the license the seller’s principal place of business and location therein of each place wherein the licensee is licensed to carry on such business (Code section 322.7(1)(b)).
   The bill authorizes a dealer to possess a vehicle’s certificate of title in an electronic format, as described in the bill, when a motor vehicle is offered for remote sale.
   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 specifies that a signed purchase agreement must be delivered to the dealer’s place of business that is listed on the dealer’s license.
   Under current law, upon the transfer of any registered vehicle, the seller must, unless otherwise provided, endorse an assignment and warranty of title upon the certificate of title for such vehicle with a statement of all liens and encumbrances thereon. A person is prohibited from selling or otherwise disposing of a vehicle subject to registration without delivering to the purchaser or transferee thereof a certificate of title, with certain exceptions. In addition, a person does not acquire any right, title, claim, or interest in or to any vehicle subject to registration from the owner thereof except by virtue of a certificate of title or manufacturer’s or importer’s certificate for such vehicle, with certain exceptions. The bill provides an exception for remote sales, and specifies that a person acquires right to, claim to, and interest in the motor vehicle at the time of delivery. The seller must otherwise deliver the certificate of title pursuant to current law not more than 30 days after delivery of the motor vehicle. Pursuant to current law, a person has 30 days after purchasing a vehicle to apply for and obtain a new certificate of title.
   The bill requires a dealer engaging in a remote sale to disclose certain facts about the location and title status of a vehicle and the expected delivery date to a prospective buyer. A dealer is required to produce proof that the dealer has the certificate of title for a vehicle offered for sale within 24 hours if requested by the department of transportation. 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.
   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).