Senate File 2228 - Reprinted SENATE FILE 2228 BY COMMITTEE ON TRANSPORTATION (SUCCESSOR TO SSB 3078) (As Amended and Passed by the Senate March 2, 2016 ) A BILL FOR An Act relating to the activities of motor vehicle dealers, 1 including the electronic submission of applications for 2 motor vehicle registration and issuance of certificates of 3 title, the furnishing of surety bonds, and the assessment of 4 documentary fees, and making a penalty applicable. 5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 6 SF 2228 (5) 86 ns/nh/jh
S.F. 2228 Section 1. Section 321.20, subsections 2 and 3, Code 2016, 1 are amended to read as follows: 2 2. Notwithstanding contrary provisions of this chapter 3 or chapter 326 regarding titling and registration by means 4 other than electronic means, the department may shall, by 5 January 1, 2018, develop and implement a program to allow for 6 electronic applications, titling, registering, and electronic 7 funds transfer transfers for vehicles subject to registration 8 in order to improve the efficiency and timeliness of the 9 processes and to reduce costs for all parties involved. The 10 program shall also provide for the electronic submission of any 11 statement required by this section, except where prohibited by 12 federal law. 13 3. The department shall adopt rules on the method for 14 providing signatures for applications and statements required 15 by this section that are made by electronic means. 16 Sec. 2. Section 321.20, Code 2016, is amended by adding the 17 following new subsection: 18 NEW SUBSECTION . 4. Notwithstanding this section or any 19 other provision of law to the contrary, if the program required 20 by subsection 2 is not implemented by January 1, 2018, an owner 21 of a vehicle subject to registration may apply to the county 22 treasurer of a county contiguous to the county designated for 23 the owner under subsection 1 for registration and issuance of 24 a certificate of title. 25 Sec. 3. Section 322.4, subsection 1, paragraph g, Code 2016, 26 is amended to read as follows: 27 g. Before the issuance of a motor vehicle dealer’s license 28 to a dealer engaged in the sale of vehicles for which a 29 certificate of title is required under chapter 321 , or the 30 issuance of a temporary permit under section 322.5, subsection 31 6 , paragraph “b” , the applicant shall furnish a surety bond 32 executed by the applicant as principal and executed by a 33 corporate surety company, licensed and qualified to do business 34 within this state, which bond shall run to the state of Iowa, 35 -1- SF 2228 (5) 86 ns/nh/jh 1/ 3
S.F. 2228 be in the amount of fifty seventy-five thousand dollars and 1 be conditioned upon the faithful compliance by the applicant 2 as a dealer with all of the statutes of this state regulating 3 or applicable to the business of a dealer in motor vehicles, 4 and indemnifying any person who buys a motor vehicle from the 5 dealer from any loss or damage occasioned by the failure of the 6 dealer to comply with any of the provisions of chapter 321 and 7 this chapter , including but not limited to the furnishing of 8 a proper and valid certificate of title to the motor vehicle 9 involved in a transaction. The bond shall also indemnify any 10 motor vehicle purchaser from any loss or damage caused by the 11 failure of the dealer to comply with the odometer requirements 12 in section 321.71 , regardless of whether the motor vehicle was 13 purchased directly from the dealer. The bond shall be filed 14 with the department prior to the issuance of a license or 15 permit. The aggregate liability of the surety, however, shall 16 not exceed the amount of the bond. 17 Sec. 4. NEW SECTION . 322.19A Documentary fee. 18 1. For purposes of this section, “documentary fee” means a 19 fee that may be charged to a customer by a motor vehicle dealer 20 for the preparation of documents related to an application for 21 motor vehicle registration and an application for issuance of 22 a certificate of title, and the performance of other related 23 services for the customer. “Documentary fee” does not include 24 any costs or fees charged to a motor vehicle dealer or a 25 dealer’s customer by a third party. 26 2. A motor vehicle dealer may charge a documentary fee not 27 to exceed one hundred eighty dollars for each motor vehicle 28 sold in a transaction. 29 3. After the department has implemented a statewide 30 program pursuant to section 321.20, subsection 2, the maximum 31 documentary fee permitted by subsection 2 shall be reduced by 32 twenty-five dollars. 33 4. A motor vehicle dealer who charges a documentary fee 34 to a customer shall include the fee in the price of the motor 35 -2- SF 2228 (5) 86 ns/nh/jh 2/ 3
S.F. 2228 vehicle. The dealer shall disclose the full amount of the fee 1 in any price of a motor vehicle advertised by the dealer and 2 when making or accepting an offer to sell a motor vehicle. The 3 dealer shall provide the following notice to the customer, 4 which notice shall be included in any retail installment 5 contract with the customer: 6 DOCUMENTARY FEE. A DOCUMENTARY FEE IS NOT AN OFFICIAL FEE. 7 A DOCUMENTARY FEE IS NOT REQUIRED BY LAW, BUT MAY BE CHARGED TO 8 A BUYER FOR THE PREPARATION OF DOCUMENTS AND THE PERFORMANCE OF 9 RELATED SERVICES. THE MAXIMUM AMOUNT THAT MAY BE CHARGED FOR 10 A DOCUMENTARY FEE IS DETERMINED BY IOWA CODE SECTION 322.19A. 11 THIS NOTICE IS REQUIRED BY LAW. 12 5. A violation of this section is an unlawful practice under 13 section 714.16. 14 -3- SF 2228 (5) 86 ns/nh/jh 3/ 3