HB2056 - 451R

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          House Engrossed
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  State of Arizona
  House of Representatives
  Forty-fifth Legislature
  First Regular Session
  2001
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     HOUSE BILL 2056
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AN ACT

AMENDING SECTIONS 28-4362, 28-4401, 28-4404, 28-4405, 28-4406, 28-4498, 28-4499, 28-4500, 28-4538, 28-4554, 28-5002, 28-5010, 28-5105, 28-5106 AND 28-8382, ARIZONA REVISED STATUTES; RELATING TO LICENSED VEHICLE DEALERS.

(TEXT OF BILL BEGINS ON NEXT PAGE)

Be it enacted by the Legislature of the State of Arizona:

Section 1. Section 28-4362, Arizona Revised Statutes, is amended to read:

28-4362. Application; fee; bond

Applications shall be accompanied by:

1. The filing fees prescribed in section 28-4302, and each licensee shall pay the annual license fee prescribed in section 28-4302.

2. A bond that:

(a) Is in a form to be approved by the director.

(b) Is in an amount prescribed by the director of at least twenty thousand dollars for an automotive recycler's license and not more than ~~fifty~~ ONE HUNDRED thousand dollars for all other licenses.

(c) Is executed by a surety company authorized to transact business in this state as surety on the bond with the applicant as principal obligor on the bond and the state as obligee.

(d) Is cancellable only on at least sixty days' prior notice to the director.

(e) Inures to the benefit of a person who suffers loss because of either:

(i) Nonpayment by the dealer of customer prepaid title, registration or other related fees or taxes.

(ii) The automotive recycler's or the dealer's failure to deliver in conjunction with the sale of a vehicle a valid vehicle title certificate free and clear of any prior owner's interests and all liens except a lien created by or expressly assumed in writing by the buyer of the vehicle.

Sec. 2. Section 28-4401, Arizona Revised Statutes, is amended to read:

28-4401. Off-premises exhibition, off-premises display and sales and special event permits

A. A licensed motor vehicle dealer may conduct an off-premises exhibition, an off- premises display and sales or a special event by permit.

B. An Arizona franchised new car dealer association may conduct a motor vehicle show by permit.

C. An exhibitor that does not have a licensed franchised dealer in this state may conduct a special event by permit. An exhibitor that has a licensed franchised dealer in this state is limited to participating in a special event through the exhibitor's licensed dealer. A licensed motor vehicle dealer or an exhibitor shall not make a solicitation or sale at a special event.

D. AN APPLICANT FOR A PERMIT PURSUANT TO THIS SECTION SHALL SUBMIT THE PERMIT APPLICATION TO THE DEPARTMENT AT LEAST TEN BUSINESS DAYS BEFORE THE DATE OF THE PROPOSED EVENT.

D. E. An applicant for an off-premises exhibition, an off- premises display and sales or a special event permit shall submit proof to the department that the proposed site is in compliance with local zoning ordinances.

E. F. An off-premises exhibition permit, display and sales permit or special event permit is not assignable.

F. G. A special event shall not be held at the same location at which an off-premises exhibition or an off-premises display and sale ~~are~~ IS held.

Sec. 3. Section 28-4404, Arizona Revised Statutes, is amended to read:

28-4404. Record requirements; vehicles and parts; classification

A. Each licensee shall keep and maintain at the licensee's place of business, or at each of the licensee's places of business if the licensee has more than one, a permanent record in a form prescribed by the director as follows:

1. Recording and describing each of the following:

(a) Each vehicle that is wrecked, dismantled, disassembled or substantially altered by the licensee.

(b) Each major component part that is acquired by the licensee together with a bill of sale signed by a seller whose identity has been verified and the name and address of the person, firm or corporation from which the licensee purchased the vehicle or part.

(i) If previously titled in this or any other state, the certificate of title number.

(ii) The name of the state where last registered.

(iii) The number of the last license plate issued.

(iv) The make and model of the vehicle.

(v) The identification number and serial number of the vehicle.

(vi) The date purchased.

(vii) The disposition of the chassis.

(viii) The name and address of the person from whom a motor vehicle, motor vehicle body or motor vehicle chassis was purchased or otherwise acquired and the date of the purchase.

(ix) The name and address of the person to whom the motor vehicle, motor vehicle body or motor vehicle chassis was sold or otherwise disposed of, the date of the sale and a description of the vehicle, body or chassis by make and model or identification number.

2. Including a bill of sale signed by the seller for any motor vehicle parts other than major component parts acquired by the licensee, identifying the seller by name, address and date of sale.

B. The licensee shall maintain the record at the licensee's established place of business or principal place of business if the licensee is a broker or a wholesale motor vehicle dealer for a period of three years from the date of acquiring each item recorded.

C. ~~Members of a police department, a sheriff's office,~~ AUTHORIZED REPRESENTATIVES OF the department of transportation ~~and the department of public safety~~ OR ANY LAW ENFORCEMENT AGENCY may inspect the record kept by the licensee at any time during regular business hours.

D. An automotive recycler shall maintain a similar record of all disabled vehicles that have been towed or transported to the automotive recycler's place of business or to other places designated by the owner of the vehicle or the owner's representative. This record shall specify the make, model and description of the vehicle, name of the owner, number of the license plate, condition of the vehicle and place to which it was towed or transported.

E. Each licensee shall allow any person described in subsection C, during business hours and after reasonable demand, to physically compare the records required to be maintained with the vehicles or major component parts that are located at the licensee's place of business.

F. After reasonable demand by a person under subsection C or E, a person who fails to display the records required to be maintained is guilty of a class 1 misdemeanor.

Sec. 4. Section 28-4405, Arizona Revised Statutes, is amended to read:

28-4405. Display of license; continuation date; late penalty

A. A license issued under this chapter:

1. Shall be conspicuously displayed in either:

(a) The established place of business for which it was obtained.

(b) The place of business if the licensee is ~~a motor vehicle dealer in mobile medical clinics,~~ a broker or a wholesale vehicle dealer.

2. Is not ~~assignable~~ TRANSFERABLE OR SUBJECT TO SALE OR REASSIGNMENT.

B. The director may issue licenses with staggered continuation dates to distribute the continuation workload as uniformly as practicable throughout the twelve months of the calendar year. In order to initiate a staggered license continuation system, the director may issue a license for more or less than a twelve month period, but not more than eighteen months, and may prorate the license fee.

C. If a licensee fails, neglects or refuses to pay the required fee for the ensuing year on or before the license continuation date, the fee is delinquent and a penalty equal to the fee shall be added to the fee and collected.

Sec. 5. Section 28-4406, Arizona Revised Statutes, is amended to read:

28-4406. Sign requirements

A. Each motor vehicle dealer and automotive recycler shall erect and maintain at the entrance to the motor vehicle dealer's or automotive recycler's established place of business a permanent sign indicating that the business of a motor vehicle dealer or automotive recycler is conducted at or from the premises. The sign shall be legible at a distance of at least three hundred feet during daylight.

B. A wholesale motor vehicle dealer OR BROKER shall erect and maintain at the entrance of the WHOLESALE MOTOR VEHICLE dealer's OR BROKER'S principal place of business a permanent sign indicating that the business of a wholesale motor vehicle dealer OR BROKER is conducted at or from the premises.

Sec. 6. Section 28-4498, Arizona Revised Statutes, is amended to read:

28-4498. Licensed dealer and automotive recycler; cease and desist order; request for hearing

A. If the director has reasonable cause to believe from an investigation made by the director that a licensed motor vehicle dealer or automotive recycler has violated or is violating a law of this state or rule adopted by the department, the director may immediately issue and serve on the ~~person~~ LICENSEE by personal delivery or certified mail at the business address of record a cease and desist order requiring the ~~person~~ LICENSEE to immediately cease and desist from further engaging in the business OR THE PROHIBITED ACTIVITY, OR BOTH, on the receipt of the notice. A LICENSEE WHO RECEIVES A CEASE AND DESIST ORDER MAY SUBMIT A WRITTEN REQUEST FOR A HEARING TO THE DIRECTOR. THE LICENSEE SHALL SUBMIT THE REQUEST FOR A HEARING WITHIN THIRTY DAYS AFTER THE LICENSEE RECEIVES THE CEASE AND DESIST ORDER. On failure of a licensee to comply with the order OR AFTER A REQUESTED HEARING, the director~~, after a hearing,~~ may suspend or cancel the licensee's license or permit pursuant to section 28-4493 and section 28-4494 or 28-4495 or may take action pursuant to section 28-4496.

B. The director of the department of transportation shall provide a copy of the cease and desist order to the director of the department of revenue.

Sec. 7. Section 28-4499, Arizona Revised Statutes, is amended to read:

28-4499. Unlicensed dealer and automotive recycler; cease and desist order; request for hearing

A. If the director has reasonable cause to believe from information furnished to the director or from an investigation made by the director that a person is engaged in a business regulated by this chapter without being licensed as required by law, the director shall immediately issue and serve on the person by personal delivery or certified mail at the person's last known address a cease and desist order requiring the person to immediately cease and desist from further engaging in the business. ~~On failure of the person to comply with the order, the director may conduct a hearing pursuant to section 28-4500.~~ A PERSON WHO RECEIVES A CEASE AND DESIST ORDER MAY SUBMIT A WRITTEN REQUEST FOR A HEARING TO THE DIRECTOR. THE PERSON SHALL SUBMIT THE REQUEST FOR A HEARING WITHIN THIRTY DAYS AFTER THE PERSON RECEIVES THE CEASE AND DESIST ORDER.

B. The director of the department of transportation shall provide a copy of the cease and desist order to the director of the department of revenue.

Sec. 8. Section 28-4500, Arizona Revised Statutes, is amended to read:

28-4500. Unlicensed dealer and automotive recycler; hearing; civil penalty; suspension of motor vehicle registrations; reinstatement fee

A. The director may conduct a hearing pursuant to section 28-4491 if an officer authorized to enforce this chapter alleges that a person refuses or fails to comply with a cease and desist order issued pursuant to section 28-4499.

B. The director shall hold the hearing at least fifteen but not more than thirty days after ~~service of a written notice~~ RECEIPT OF A WRITTEN REQUEST FOR A HEARING. ~~The director shall send the notice by personal delivery or by certified mail to the address provided to the department in the report alleging the noncompliance.~~

C. A finding that a person is in violation of the dealer or automotive recycler licensing requirements of this chapter requires that both of the following conditions exist, and the scope of the hearing is limited to the following:

1. A determination that the person refuses or fails to comply with a cease and desist order issued pursuant to section 28-4499.

2. A determination that the person ~~ordered to appear~~ APPEARING at the hearing is responsible for the violation.

D. If, after reviewing the allegations and results of the hearing, the director determines that the person is in violation of the dealer or automotive recycler licensing provisions of this chapter, the director may ~~prescribe~~ IMPOSE a civil penalty pursuant to section 28-4501.

E. After consideration of the evidence presented at the hearing, the director shall serve notice of the director's finding and order within five days after the hearing.

F. Unless a continuance is granted, if a person who is alleged to be in violation of the dealer or automotive recycler licensing provisions of this chapter ~~and who has been notified by personal delivery or certified mail~~ fails to appear for a hearing, the director may suspend the registrations of all motor vehicles owned and leased by the person. The director shall not remove the suspension until the person appears for the hearing and pays a fee of fifty dollars to the department for the reinstatement of each motor vehicle registration and license plate.

Sec. 9. Section 28-4538, Arizona Revised Statutes, is amended to read:

28-4538. Suspension of dealer and manufacturer license plates

A. The department shall suspend the use of any or all of the dealer license plates issued to a dealer for not more than three months if a dealer violates section 28-4532, 28-4533, 28-4534, 28-4535 or 28-4536 or the rules adopted under section 28-4537.

B. If the director finds that a manufacturer or licensed dealer displays a manufacturer or dealer license plate that is provided pursuant to section 28-4533, 28- 4540 or 28-4544 on a work or service vehicle, a vehicle used for private use or a vehicle for hire, the director may suspend~~, after a hearing,~~ the right of the dealer or manufacturer to use the plate.

C. A MANUFACTURER OR LICENSED DEALER WHO RECEIVES A NOTICE OF SUSPENSION PURSUANT TO SUBSECTION B OF THIS SECTION MAY SUBMIT A WRITTEN REQUEST FOR A HEARING TO THE DIRECTOR. THE MANUFACTURER OR LICENSED DEALER SHALL SUBMIT THE REQUEST FOR A HEARING WITHIN THIRTY DAYS AFTER THE MANUFACTURER OR LICENSED DEALER RECEIVES THE NOTICE OF SUSPENSION.

Sec. 10. Section 28-4554, Arizona Revised Statutes, is amended to read:

28-4554. Suspension of issuance of temporary registration plates

A. If the director finds that a dealer has not complied with sections 28-4546 through 28-4553 or the directions of the director, the director may suspend~~, after a hearing,~~ the right of the dealer to issue temporary registration plates.

B. A DEALER WHO RECEIVES A NOTICE OF SUSPENSION MAY SUBMIT A WRITTEN REQUEST FOR A HEARING TO THE DIRECTOR. THE DEALER SHALL SUBMIT THE REQUEST FOR A HEARING WITHIN THIRTY DAYS AFTER THE DEALER RECEIVES THE NOTICE OF SUSPENSION.

Sec. 11. Section 28-5002, Arizona Revised Statutes, is amended to read:

28-5002. Requirements; violation; classification

A. A title service company shall not engage in business in this state unless the company is licensed pursuant to this chapter. A title service company that violates this subsection is guilty of a class 1 misdemeanor.

B. A person shall not engage in any business pursuant to this chapter unless both:

1. It is from an established place of business.

2. The person has obtained a license from the director authorizing the person to engage in the business.

C. A LICENSE ISSUED UNDER THIS CHAPTER:

1. SHALL BE CONSPICUOUSLY DISPLAYED IN THE ESTABLISHED PLACE OF BUSINESS FOR WHICH IT WAS OBTAINED.

2. IS NOT TRANSFERABLE OR SUBJECT TO SALE OR REASSIGNMENT BY ANY VOLUNTARY OR INVOLUNTARY PROCESS.

Sec. 12. Section 28-5010, Arizona Revised Statutes, is amended to read:

28-5010. Record requirements

A. A title service company to which temporary registration plates are issued shall maintain in permanent form a record of:

1. All temporary registration plates delivered to the company.

2. All temporary registration plates issued by the company.

3. All titles and registrations accepted for processing.

4. Any other information that the director requires.

B. The title service company shall:

1. Keep each record for at least three years from the date of its entry.

2. Allow ~~full and free~~ access to the records during regular business hours to authorized representatives of the director OR ANY LAW ENFORCEMENT AGENCY.

Sec. 13. Section 28-5105, Arizona Revised Statutes, is amended to read:

28-5105. Criminal records check; provisional authorization or certification

A. An applicant, and each partner, officer, director or agent or each stockholder owning twenty per cent or more of a corporation, seeking authorization or certification, or both, pursuant to this article shall provide:

1. A full set of fingerprints to the department of transportation for the purpose of obtaining a state and federal criminal records check pursuant to section 41-1750 and Public Law 92-544. The department of public safety may exchange this fingerprint data with the federal bureau of investigation.

2. A nonrefundable fee to be paid to the department of public safety for the criminal records check.

B. The director may deny an application for authorization or certification, or both, if any individual included in the application has either:

1. Made a misrepresentation or misstatement in the application to conceal a matter that would cause the application to be denied.

2. Been convicted of fraud or an auto related felony in any state, territory or possession of the United States or any foreign country within the ten years immediately preceding the date the criminal records check is complete.

3. Been convicted of a felony, other than a felony described in paragraph 2 of this subsection, in a state, territory or possession of the United States or a foreign country within the five years immediately preceding the date the criminal records check is complete.

4. Violated a rule or policy of the department.

5. Been involved in any activity that the director determines to be inappropriate in relation to the authority granted.

C. The director may approve an application for provisional authorization or certification, or both, pending completion of the criminal records check if the applicant meets all other requirements of this article. The director may revoke a provisional authorization or certification, or both, for a violation of this title. A provisional authorization or certification, or both, is valid unless revoked by the director or until the applicant receives approval or denial of the application for authorization or certification, or both.

D. Within twenty days of completion of the criminal records check, the director shall approve or deny the application. If the application is denied, the director shall advise the applicant in writing of the denial and the grounds for denial. The department or its employees are not liable for any costs incurred by an applicant seeking authorization or certification, or both, under this article.

E. Within thirty days after receipt of the notice of denial, the applicant may petition the director in writing for a hearing on the application pursuant to section 28-5107.

F. If the authorized third party adds a partner, officer, director or agent, or a stockholder who owns twenty per cent or more of the corporation, who was not included in the criminal records check on a prior application, the authorized third party shall notify the department within thirty days of the change.

G. At the time of notification pursuant to subsection F of this section, the third party shall submit to the department of transportation an application and, if applicable, a full set of fingerprints and the fee to be paid to the department of public safety for a criminal records check. On completion of the investigation if the individual added or changed by the authorized third party is found to be ineligible pursuant to subsection B of this section, the director of the department of transportation shall advise the authorized third party and the individual in writing of the grounds for the action and that the authorization will be revoked unless the individual is removed from the position.

H. The requirement for a criminal records check does not apply to an applicant who is seeking third party authorization and who is:

1. A department, agency or political subdivision of this state.

2. An Arizona court.

3. An Arizona law enforcement agency or department.

4. A financial institution or enterprise under the jurisdiction of the state banking department or a federal monetary authority.

5. The federal government or any of its agencies.

6. A motor vehicle dealer that is licensed and bonded by the department of transportation or a state organization of licensed and bonded motor vehicle dealers.

7. A manufacturer, importer, factory branch or distributor licensed by the department of transportation.

8. An insurer under the jurisdiction of the department of insurance.

9. An owner or registrant of a fleet ~~as defined in section 28-2201~~ OF ONE HUNDRED OR MORE VEHICLES.

10. A public utility.

11. A tribal government.

12. A title service company that is bonded by the department of transportation.

13. An employer or association that has at least five hundred employees or members.

Sec. 14. Section 28-5106, Arizona Revised Statutes, is amended to read:

28-5106. Records

A third party who is authorized pursuant to this article shall:

1. Maintain records in a form and manner prescribed by the director.

2. ~~Provide the director with~~ ALLOW access to the records during regular business hours TO AUTHORIZED REPRESENTATIVES OF THE DIRECTOR OR ANY LAW ENFORCEMENT AGENCY to ensure compliance with all applicable statutes and rules.

Sec. 15. Section 28-8382, Arizona Revised Statutes, is amended to read:

28-8382. License requirement; application; renewal; license tax; liability

A. A person shall not act as an aircraft dealer without first obtaining a license from the director that authorizes the person to engage in the business of an aircraft dealer.

B. A person shall apply for a license on forms prescribed ~~and furnished~~ OR AUTHORIZED by the director. The person shall submit with the application any required documents and the bond or cash deposit prescribed by section 28-8384. On approval of the application the director shall issue the license.

C. A license issued to an aircraft dealer is valid for one year and only for the person in whose name it is issued. The aircraft dealer:

1. Shall display the license conspicuously in the principal place of business of the aircraft dealer.

2. Shall annually renew the license.

3. May not assign the license.

D. If an aircraft dealer changes the dealer's place of business, the dealer shall notify the director in writing within ten days after the change.

E. In addition to any other penalties provided by statute, a person who acts as an aircraft dealer without first obtaining a license is liable for both:

1. The license tax imposed by section 28-8335 on aircraft owned by the person or held by the person on consignment for sale or exchange.

2. Any transaction privilege tax or similar excise tax on the sale of any aircraft sold, exchanged or brokered by the person that is not reported and paid as required by law.