HB 393

Relating to motor vehicle dealer licensing; to amend Sections 40-12-264, 40-12-390, 40-12-391, 40-12-392, 40-12-393, 40-12-395, and 40-12-398, to create a master regulatory dealer license and provide for an adjustment to the license fee; to increase the civil penalty authorized for a violation; to add Article 10, commencing with Section 40-12-445, to Chapter 12 of Title 40, Code of Alabama 1975, to create a wholesale motor vehicle auction license; to provide a criminal penalty for a violation; and in connection therewith would have as its purpose or effect the requirement of a new or increased expenditure of local funds within the meaning of Amendment 621 of the Constitution of Alabama of 1901, now appearing as Section 111.05 of the Official Recompilation of the Constitution of Alabama of 1901, as amended.

Section 1

Sections 40-12-264, 40-12-390, 40-12-391, 40-12-392, 40-12-393, 40-12-395, and 40-12-398, Code of Alabama 1975, are amended to read as follows:

§40-12-264.

(a) Any person, including a motor vehicle dealer, acquiring a new or used motor vehicle may be granted a grace period of 20 calendar days from date of acquisition to procure a license tag or plate.

(b) A Notwithstanding Section 32-6-65, a new or used motor vehicle dealer who has a current regulatory license required under this article and a dealer license as required by Section 40-12-51 or Section 40-12-169 and Section 40-12-391 may purchase dealer license plates from the county license plate issuing official of the county in which the business is located department upon presentation of the current licenses required under Section 40-12-391 and either Section 40-12-51 or Section 40-12-169 from this state and payment of the fee for a private passenger automobile as provided in subdivision (1) of Section 40-12-242 and subsection (a) of Section 40-12-273 per dealer plate. An additional $1.75 two dollar ($2) issuance fee shall also be collected, which shall be deposited into the county general fund to be used exclusively for the operation of the issuing official's office by the department. A new or used motor vehicle dealer that has a current regulatory license required under this article and a dealer license as required by Sections Section 40-12-62 and 40-12-391 may purchase motorcycle dealers' license plates from the county in which the business is located department upon presentation of current licenses as provided in both Sections 40-12-62 and 40-12-391 from this state and payment of the motorcycle registration fee as provided by subdivision (2) of Section 40-12-242 and subsection (c) of Section 40-12-273 per license plate. The additional $1.75 An additional two dollar ($2) issuance fee shall also be collected, which shall be deposited into the county general fund to be used exclusively for the operation of the issuing official's office by the department. Dealer license plates and motorcycle dealer license plates may only be used on motor vehicles owned by the dealership and being held in the inventory of the dealer. The number of dealer license plates is limited as follows:

(1) A licensed new motor vehicle dealer may purchase a maximum combined total of 25 35 dealer and motorcycle dealer license plates unless the dealer qualifies for additional dealer license plates as provided for in subdivision (3).

(2) A licensed used motor vehicle dealer may purchase a maximum combined total of 10 five dealer and motorcycle dealer license plates unless the dealer qualifies for additional dealer license plates as provided for in subdivision (3).

(3) Any licensed new or used motor vehicle dealer who completes applications for certificates of title involving title transfers for 1,500 300 or more motor vehicles in this state during the previous dealer regulatory license year may purchase a combined total of not more than 25 additional dealer and motorcycle dealer license plates.

(c) Dealer license plates may be used by prospective purchasers, owners, partners, corporate officers, and employees of the dealership and only on vehicles owned by the dealership and being held in the inventory of the dealer. Dealer license plates shall not be used on vehicles that are utilized by the dealership as rental or lease vehicles, tow trucks, service trucks or vans, and other service vehicles or for other commercial purposes. A prospective purchaser shall be limited to 72 hours of use of dealer license plates. All vehicles on temporary loan from a motor vehicle dealer to a customer whose vehicle is being serviced or repaired by the dealer or to a high school for the purpose of student driver education shall be considered dealer demonstrator vehicles and dealer license plates may be used on these vehicles provided a fee is not charged by the dealer for the use.

(d) Licensed new and used motor vehicle dealers selling trucks or truck tractors with more than two axles on the power unit or a gross weight exceeding 26,000 pounds shall allow prospective purchasers to use dealer license plates for one payload trip only, and that use shall not exceed 72 hours. The dealer shall provide the prospective purchaser a permit fully describing the vehicle by make, model, year, and vehicle identification number. The permit shall contain the complete name and address of the dealership and of the prospective customer and shall clearly indicate the date and time the permit was issued. The permit and dealer license plate shall be issued only for demonstration purposes, and shall not be issued by the dealer when a vehicle is loaned or rented to an operator for any other purpose.

(e) A licensed new or used motor vehicle dealer, or wholesaler may purchase a maximum of 10 upon proper application, may be issued a temporary seven-day dealer transit license plates plate to be used on motor vehicles being offered for sale to licensed motor vehicle dealers. The temporary dealer transit license plate shall be issued in a manner as prescribed by the department. Dealer Temporary seven-day dealer transit license plates may be used by the new or used motor vehicle dealer or a wholesaler to transport vehicles within the inventory of the dealer or wholesaler. Dealer The temporary seven-day dealer transit license plates shall not be used on service vehicles, including which include tow trucks, and rental, or and lease vehicles, or used for other commercial purposes. The fees for the seven-day dealer transit license plates shall be the same as the fees provided in subsection (b) for dealer license plates five dollars ($5).

(f) A motor vehicle wholesale auction, licensed under Section 40-12-446, upon proper application, may be issued a seven-day auction transit license plate to be used to transport vehicles to and from the auction. The seven-day auction transit license plate shall be issued in a manner as prescribed by the department. The seven-day auction transit license plate may not be used on service vehicles, which include tow trucks and rental and lease vehicles, or used for other commercial purposes. The fee for a seven-day auction transit license plate shall be five dollars ($5).

(f) (g) A licensed motor vehicle rebuilder dealer may purchase a maximum of 10 temporary seven-day dealer transit license plates to be used in accordance with subsection (a) of Section 32-8-87.

(g) (h) Any Notwithstanding Section 32-6-65, any manufacturer of private passenger automobiles, motorcycles, trucks, truck tractors, or trailers who has manufacturing facilities located in this state and has a current manufacturer's license as required by Section 40-12-87, may procure manufacturer license plates from the county license plate issuing official of the county in which the business is located department upon payment of the private passenger automobile or motorcycle fees per plate, as provided in subdivision (1) or (2) of Section 40-12-242 and subsection (a) or (c) of Section 40-12-273. The additional one dollar seventy-five cents ($1.75) An additional two dollar ($2) issuance fee shall also be collected, which shall be deposited into the county general fund to be used exclusively for the operation of the issuing official's office by the department. The word "manufacturer" shall appear on the license plates. The license plates may be used for transporting and testing new motor vehicles owned by the manufacturer.

(h) (i) The proceeds of the fees levied in this section shall not be subject to proration. The registration fees collected pursuant to this section for dealer license plates and manufacturer license plates shall be distributed by the county license plate issuing officials department in the same manner as fees for private passenger automobiles and motorcycles pursuant to Sections 40-12-269, 40-12-270, and 40-12-274. The five dollar ($5) fee for the issuance of the seven-day dealer transit plates and the seven-day auction transit plates and the additional two dollar ($2) issuance fee for dealer license plates and manufacturer license plates shall be retained by the department to offset the cost of administering this article. The five dollar ($5) fee and the two dollar ($2) issuance fee, in addition to all other appropriations, shall be continuously appropriated to the department. No fees provided in this section may be refunded.

(i) (j) No motor vehicle ad valorem taxes, registration fees imposed by local law, or issuance fees imposed by local law shall be collected by the county official who issues department when issuing license plates pursuant to this section. In addition, motor vehicle delinquency penalties and interest fees shall not be applicable when issuing license plates pursuant to this section.

(k) No motor vehicle ad valorem taxes or sales tax shall be collected by the local issuing official when a standard plate is issued for a motor vehicle held in inventory by a licensed new or used motor vehicle dealer.

(j) (l) Any person to whom license plates are issued under this section, upon forfeiture or revocation of his or her license under Section 40-12-390, et seq., or upon discontinuing business, shall surrender to the issuing official department all license plates issued within 10 calendar days from the date of forfeiture or revocation of license or discontinuing business.

(k) (m) Motor vehicle dealer, motorcycle dealer, manufacturer, auction transit, or dealer transit license plates may not be used in lieu of regular issued license plates as a means of avoiding the registration and ad valorem tax requirements of this chapter. Any person who willfully violates this section of law shall be subject to a Department of Revenue penalty misuses or unlawfully acquires a license plate issued under this section in a manner not authorized by this section and rules adopted pursuant to this section shall be subject to a penalty assessed by the department in the amount of one hundred dollars ($100) two hundred dollars ($200) for the first violation and five hundred dollars ($500) for each subsequent violation.

(l) (n) A licensed new or used motor vehicle dealer shall register any motor vehicle and purchase an Alabama license plate of the proper classification for any motor vehicle withdrawn from the inventory of the dealer.

(m) (o) A motor vehicle dealer, motorcycle dealer, dealer transit, or manufacturer license plate may be replaced in accordance with Section 40-12-265.

(n) (p) Any person who makes willful misstatements or files documents with erroneous information in order to obtain motor vehicle dealer, motorcycle dealer, dealer transit, auction transit, or manufacturer license plates shall be guilty of a Class A misdemeanor subject to criminal penalties as provided by law, and may be assessed a civil penalty of one thousand dollars ($1,000) by the department.

(o) (q) A new or used motor vehicle dealer, motor vehicle rebuilder, or motor vehicle wholesaler, licensed pursuant to Section 40-12-51, 40-12-62, or 40-12-169 and Section 40-12-391, or a manufacturer of private passenger automobiles, motorcycles, trucks, truck tractors, or trailers, licensed pursuant to this section, that is licensed pursuant to Section 40-12-87, is prohibited from renewing his or her licenses if the new or used motor vehicle dealer, motor vehicle rebuilder, motor vehicle wholesaler, or manufacturer fails to pay any outstanding liabilities resulting from the assessment of penalties provided in this section.

§40-12-390. The following words and phrases, when used in this article, shall have the following meanings:

(1) COMMISSIONER. The state Commissioner of Revenue.

(2) DEPARTMENT. The Department of Revenue.

(2) (3) DISTRIBUTOR. Any person, firm, or corporation engaged in the business of selling or distributing new motor vehicles to new motor vehicle dealers.

(4) FACILITATOR. Any person or his or her designee who facilitates an off-site sale licensed under Section 40-12-395. The term may include the owner of the property where the off-site sale is being conducted.

(3) (5) MANUFACTURER. Any person, firm, or corporation engaged in the business of manufacturing or assembling new and unused motor vehicles.

(6) MASTER DEALER LICENSE. The license issued by the department pursuant to this article.

(4) (7) MOTOR VEHICLE. Any motor vehicle as defined in Section 40-12-240, but the term shall not include any trailer not required to have a certificate of title.

(5) (8) MOTOR VEHICLE REBUILDER. Any person, firm, or corporation engaged in the business of making or causing to be made extensive repairs, replacements, or combination of different motor vehicles to the extent of extinguishing the identity of the original vehicle to the extent that the finished motor vehicle may be assigned a new identification to be issued by the Department of Revenue department under the provisions of Chapter 8 of Title 32. The term also includes any person, firm, or corporation engaged in the business of refurbishing, repairing, or replacing damaged parts of motor vehicles for the purpose of preparing the vehicle for resale under the same identification and identity as the vehicle had before the refurbishing.

(6) (9) MOTOR VEHICLE WHOLESALER. Any person, firm, or corporation engaged in the business of buying, selling, or exchanging motor vehicles at wholesale to motor vehicle dealers, as defined in this article, and not to the public.

(7) (10) NEW MOTOR VEHICLE. A motor vehicle, other than a used motor vehicle, the legal title of which has never been transferred by a manufacturer, distributor, or new motor vehicle dealer to an ultimate purchaser.

(8) (11) NEW MOTOR VEHICLE DEALER. Any person, firm, or corporation which holds a bona fide contract or franchise in this state in effect with a manufacturer or distributor of new motor vehicles and is engaged in the business of selling, advertising, or negotiating the sale of new motor vehicles or new and used motor vehicles, and the duly licensed new motor vehicle dealers shall be the sole and only persons, firms, or corporations entitled, other than in connection with the rental or leasing of new motor vehicles by persons engaged in the business of motor vehicle rental and leasing, to sell and publicly or otherwise solicit and advertise for sale new motor vehicles. The term also includes a motor vehicle rebuilder and motor vehicle wholesaler as defined in this article.

(9) (12) PERMANENT LOCATION. A building or structure from which sales of motor vehicles are conducted. A house used as a residence by the business owner, a partner, or a corporate officer from which sales of motor vehicles are conducted may also be a permanent location. The building or structure must be owned, rented, or leased and must be used as an office and a place to receive mail, keep records, and conduct routine business, to include an operable telephone listed with the telephone company utilities under the name of the licensed business.

(13) PERSON. As defined in Section 40-12-240.

(10) (14) USED MOTOR VEHICLE. A motor vehicle, the legal title of which has been transferred by a manufacturer, distributor, or new motor vehicle dealer to an ultimate purchaser.

(11) (15) USED MOTOR VEHICLE DEALER. Any person, firm, or corporation engaged in the business of buying, selling, exchanging, advertising, or negotiating the sale of five or more motor vehicles, not previously titled or registered in the person's name, at retail during a calendar year, whether or not the motor vehicles are owned by such person, firm, or corporation, or in offering or displaying motor vehicles for sale at retail to the public. The term

selling" or "sale" shall include lease-purchase transactions. The term "used motor vehicle dealer" does not include banks, credit unions, licensees of the State Banking Department, and finance companies which acquire motor vehicles as an incident to their regular business and does not include motor vehicle rental and leasing companies. The term also includes a motor vehicle rebuilder and motor vehicle wholesaler as defined in this article.

(12) (16) ULTIMATE PURCHASER. With respect to a new motor vehicle, the first person, firm, or corporation, other than a new motor vehicle dealer purchasing in his or her capacity as a new motor vehicle dealer, who in good faith purchases the new motor vehicle for purposes other than resale. Ultimate purchaser shall The term does not include a person, firm, or corporation who purchases a vehicle for purposes of altering or remanufacturing the motor vehicle for future resale.

§40-12-391.

(a) No person shall be licensed as an automobile a motor vehicle dealer under the provisions of Section 40-12-51, 40-12-62, or 40-12-169, nor shall any person engage in business as, serve in the capacity of, or act as a new motor vehicle dealer, used motor vehicle dealer, motor vehicle rebuilder, or motor vehicle wholesaler in this state, without first obtaining a master dealer license as provided in this article and, if a new motor vehicle dealer, or a used motor vehicle dealer, a state sales tax number.

(b) No person, firm, or corporation shall engage in the business of buying, selling, exchanging, advertising, or negotiating the sale of new motor vehicles unless he or she holds a valid master dealer license as a new motor vehicle dealer in this state for the make or makes of new motor vehicles being bought, sold, exchanged, advertised, or negotiated or unless a bona fide employee or agent of the licensee.

(c) No person, other than a motor vehicle dealer licensed under this article, may sell a motor vehicle without being currently recorded as the owner on the certificate of title or designated as the attorney-in-fact acting on behalf of the titled owner. If a person is not in compliance with this subsection, any state or local licensing official or law enforcement officer may impound the motor vehicle until the person provides proper proof of ownership as the currently recorded owner on the certificate of title or as the attorney-in-fact acting on behalf of the titled owner, or as otherwise prescribed by law. This subsection does not apply to abandoned motor vehicles sold under Chapter 13 of Title 32.

(c) (d) Notwithstanding any law of this state providing otherwise, neither a new motor vehicle dealer nor a used motor vehicle dealer nor any person engaged in the business of motor vehicle rental and leasing:

(1) With respect to a credit sale transaction, is required to be licensed under Chapter 19 of Title 5 in order to pay any amount necessary to satisfy a lease on, security interest in, or lien on any motor vehicle either returned to that dealer or to the lessor or traded in by the purchaser in connection with the credit sale transaction, and to include that amount as part of the amount to be paid by the purchaser under the credit sale transaction; or

(2) With respect to a lease transaction, is subject to Chapter 19 of Title 5 or otherwise deemed to have made a loan or credit sale by virtue of paying any amount necessary to satisfy a lease on, security interest in, or lien on any motor vehicle either returned to that dealer or to the original lessor or traded in by the lessee in connection with the lease transaction, and including that amount as part of the amount to be paid by the lessee under the lease transaction.

§40-12-392.

(a) The application for a master dealer license shall be in such form and shall be subject to such rules and regulations as may be prescribed by the commissioner. An application shall be verified by the oath or affirmation of the applicant. If the applicant is a sole proprietorship, the application shall contain the name and residence of the applicant. If the applicant is a partnership, the application shall contain the names and residences of each partner. If the applicant is a corporation, the application shall contain the names and residences of the officers and directors. If the applicant is a new motor vehicle dealer, or used motor vehicle dealer in this state, the application shall contain the state sales tax number assigned to the applicant. The application shall enumerate the number of new and used vehicles sold during the previous calendar year; describe the exact location of the place of business, and shall state: That the location is a permanent one; that the location affords sufficient space upon and within which to adequately display one or more motor vehicles offered for sale and that an appropriate sign designates the location as being the place of business of a motor vehicle dealer; that it is a suitable place from which the applicant can in good faith carry on such business and keep and maintain books and records necessary to conduct business, which shall be available at all reasonable hours for inspection by the commissioner. The application shall state that the applicant is either (i) franchised by a manufacturer of motor vehicles, and, if so, the name of the manufacturer and line make that the applicant is authorized to represent, or (ii) a used motor vehicle dealer, rebuilder, or wholesaler. Upon making application, the person applying shall pay an application fee of as prescribed by the commissioner of twenty-five dollars ($25) through September 30, 2020. Effective October 1, 2020, the application fee shall be calculated pursuant to Section 3 of this act to the commissioner and shall be in addition to other fees required by law. The commissioner may cause an investigation to be made and upon being satisfied that the facts set forth in the application are true, shall issue a master dealer license certificate to the applicant, which shall entitle the licensee to operate as a motor vehicle dealer, rebuilder, or and wholesaler for one year from the first day of October of each year. If the commissioner, upon investigation, determines that a master dealer license should not be issued, the commissioner may deny the license and the applicant may appeal the denial to the Alabama Tax Tribunal as allowed in Chapter 2A of this title.

(b) Every master dealer license issued under this article shall be valid for one year from the first day of October of each year and shall be renewed on October 1 each year. Thirty days of grace for obtaining the license shall be allowed without penalty. Thereafter, penalties prescribed under this article for delinquent licenses shall be imposed.

(b) A motor vehicle rebuilder or a motor vehicle wholesaler who is not a new or used motor vehicle dealer shall not be required to maintain a sign designating the location, and may maintain books, records, and files of his or her business at his or her home; provided, that books, records, and files shall be accessible and available for inspection by the commissioner, inspectors, or employees during normal business hours on usual business days. The location may be adjacent to his or her residence.

(c) A motor vehicle rebuilder or motor vehicle wholesaler may not sell any motor vehicles or component parts to anyone other than a licensed motor vehicle dealer, motor vehicle wholesaler, or motor vehicle rebuilder, or as salvage.

(d) (c) New and used motor vehicle dealers, motor vehicle rebuilders, and motor vehicle wholesalers shall be required to maintain blanket motor vehicle liability insurance coverage on vehicles operated on the public streets and highways of this state, including vehicles in dealership inventory. Evidence of liability insurance for business and inventory vehicles shall be filed with the application for license, and the application for license shall be denied if proof of liability insurance satisfactory to the commissioner is not provided. A licensee who fails to maintain a blanket motor vehicle liability insurance policy during the licensing period may be assessed a civil penalty of up to five thousand dollars ($5,000). The penalty may be assessed against the bond as provided for in Section 40-12-398.

(d) A person who is subject to the licensing requirements of this article, but willfully fails to acquire the license, shall be subject to a penalty of five hundred dollars ($500) for the first violation and one thousand dollars ($1,000) for the second or subsequent violation.

§40-12-393.

The commissioner shall deposit the application fees collected under the provisions of this article in into the State Treasury, which shall be appropriated as follows:

(1) A minimum of twenty-five dollars ($25) or 10 percent, whichever is greater, of the application fee shall be appropriated to the General Fund of the state.

(2) The remaining amount shall be continuously appropriated to the department for the inspection, issuance, and enforcement of the licensing requirements under this article.

§40-12-395.

(a) A person licensed under this article shall obtain a supplemental license for each additional place of business, in a manner as prescribed by the commissioner and upon payment of an additional application fee of five dollars ($5) for each additional location. The signage and other requirements of Section 40-12-392 shall apply to each additional place of business. Only one licensed dealer shall operate at the same place of business.

(b) Notwithstanding the requirement that sales of new and used motor vehicles shall be made only from the permanent location of the new or used motor vehicle dealer, such dealers may conduct sales of new and used motor vehicles from locations off-site of their permanent locations on the following conditions:

(1) The off-site sales events shall not exceed three per dealer per license year with each sale not to exceed onsecutive calendar days in duration. Off-site sales of new motor vehicles by new motor vehicle dealers shall be conducted only at a location within the new motor vehicle dealer's area of responsibility as defined in the contract or franchise agreement between the new motor vehicle dealer and its manufacturer or distributor. Off-site sales of used motor vehicles shall be conducted only at a location in the county or city where the new or used motor vehicle dealer maintains a permanent location.

(2) The off-site sale need not be conducted in a building or permanent structure, but the motor vehicle dealer facilitator shall display a temporary sign at the location where the off-site sale is conducted identifying the name of the motor vehicle dealer facilitator who is conducting the sale as stated on the license required by this section subdivision (3) and the name of the motor vehicle dealers who are participating in the sale as stated on the license required by subdivision (4). All advertisements and other notices of the sale must be conducted in the name of the licensee facilitator.

(3)a. At least 10 calendar days before conducting each off-site sale, the facilitator of the off-site sale shall obtain a master off-site sale license by making a license application to the commissioner and paying an application fee of twenty-five dollars ($25) for each off-site sale. On the application, the facilitator shall list each participating motor vehicle dealer and the participating motor vehicle dealer's off-site sale license number, as required in subdivision (4). The off-site sale license required in subdivision (4) is not required if the facilitator and motor vehicle dealer are the same entity. Each motor vehicle dealer participating in the off-site sale shall obtain an off-site license required by subdivision (4) and provide the license to the facilitator prior to the facilitator making the application.

b. The failure of a facilitator to disclose participating motor vehicle dealers shall subject the facilitator to the following penalties:

1. A facilitator that is a bonded agent of the state and in violation of this section shall be subject to a statutory notice of non-compliance. Subsequent violations may result in the suspension or revocation of designated agent status pursuant to Section 32-8-3 and rules adopted under that section.

2. A facilitator that is not a bonded agent of the state that is in violation of this section shall be subject to the penalty provisions as provided in subsection (d) of Section 40-12-392.

(3)(4) At least one calendar day 10 calendar days before conducting each off-site sale, the motor vehicle dealer shall obtain an off-site sale license by making license application to the commissioner and paying an application fee of twenty-five dollars ($25) for each off-site sale to be conducted. If more than one motor vehicle dealer participates in the same off-site sale, each motor vehicle dealer participating in the sale shall obtain an off-site sale license from the commissioner.

(c) In addition to the foregoing, the motor vehicle dealer shall obtain from the judge of probate or other county licensing official a county license for the off-site location by paying the county license tax imposed pursuant to Section Sections 40-12-51, 40-12-62, and 40-12-169, and shall provide to the commissioner proof of payment of the license upon application for each off-site sale. If more than one motor vehicle dealer participates in the same off-site sale, each motor vehicle dealer participating in the sale shall obtain from the judge of probate or other county licensing official a county license for the off-site location by paying the county license tax imposed pursuant to Section Sections 40-12-51, 40-12-62, and 40-12-169.

(d) For purposes of this section, a new motor vehicle dealer temporarily displaying new vehicles at a shopping mall, auto show, or other location solely for advertising or display purposes and from which location sales are not conducted, shall not be deemed to be conducting an off-site sale and no off-site sales license shall be required.

(e) For purposes of this section, an off-site sales license shall not be required for wholesale sales between licensed motor vehicle dealers or for retail sales by new or used motor vehicle dealers conducted at the permanent location of an auction company which is licensed as a used motor vehicle dealer or motor vehicle wholesale auction.

§40-12-398.

Before any master dealer license shall may be issued to a new motor vehicle dealer, used motor vehicle dealer, motor vehicle rebuilder, or motor vehicle wholesaler, the applicant shall deliver to the commissioner a good and sufficient surety bond, executed by the applicant as principal and by a corporate surety company qualified to do business in the state as surety, in the sum of twenty-five thousand dollars ($25,000) not less than fifty thousand dollars ($50,000) or an amount as prescribed by the department. Such bond shall be in a form to be approved by the commissioner, and shall be conditioned that the motor vehicle dealer, motor vehicle rebuilder, or motor vehicle wholesaler shall comply with the conditions of any contract made by such dealer in connection with the sale or exchange of any motor vehicle and shall not violate any of the provisions of law relating to the conduct of the business for which he is licensed. Such bond shall be payable to the commissioner and to his successors in office, and shall be in favor of any person who shall recover any judgment for any loss as a result of any violation of the conditions hereinabove contained. The bond shall serve in lieu of the bond provided for in subsection (b) of Section 32-8-34 and, in addition to all other conditions, shall also be conditioned upon their performance of their duties as a designated agent under Chapter 8 of Title 32. The penalty provisions provided under this article, in addition to the tax liability incurred under Chapter 23 of this title on the sale of a motor vehicle, may be assessed against the bond."

Section 2

(a) Beginning October 1, 2020, the application fee prescribed in Section 40-12-392, Code of Alabama 1975, shall be equal to the average of the annual dealer license fees, as of January 1, 2020, of the contiguous states to Alabama and shall be rounded to the nearest twenty-five dollars ($25). The Department of Revenue may adjust these fees once every five years thereafter using the same calculation; provided, the adjusted fee may not exceed the application fee provided under Section 40-12-413, Code of Alabama 1975. (b) On or after October 1, 2022, the Department of Revenue, by rule, may establish a bi-annual license in lieu of the annual license provided under Section 40-12-391, Code of Alabama 1975. The application fee for the bi-annual license may not exceed double the amount charged for the application fee or for the annual license.

Section 3

Article 10, commencing with Section 40-12-445, is added to Chapter 12 of Title 40, Code of Alabama 1975, to read as follows: §40-12-445. As used in this article, the following words shall have the following meanings: (1) AUTOMOTIVE DISMANTLER AND PARTS RECYCLER. As defined in Section 40-12-410. (2) COMMISSIONER. The Commissioner of Revenue. (3) DEPARTMENT. The Department of Revenue. (4) MOTOR VEHICLE. As defined in Section 40-12-390. (5) MOTOR VEHICLE REBUILDER. As defined in Section 40-12-390. (6) NEW MOTOR VEHICLE DEALER. As defined in Section 40-12-390. (7) PERSON. As defined in Section 40-12-240. (8) PLACE OF BUSINESS. The place owned or leased and regularly occupied by a person for the principal purpose of engaging in the business of a wholesale motor vehicle auction from which the wholesale of motor vehicles is conducted and where the books and records required for the conduct of business are maintained and kept. (9) USED MOTOR VEHICLE DEALER. As defined in Section 40-12-390. (10) MOTOR VEHICLE WHOLESALE AUCTION. Any person engaged in the business of buying, selling, exchanging, or facilitating the sale of motor vehicles at wholesale to new or used motor vehicle dealers and automotive dismantler and parts recyclers and not to the public. §40-12-446. (a) A person may not engage in the business of a motor vehicle wholesale auction unless the person is licensed under this article by the department. (b) A person desiring to engage in the business of a motor vehicle wholesale auction shall apply to the department on a form prescribed by the department. The form shall contain all of the following: (1) The legal name of the applicant. (2) The street address of the applicant's principal place of business. (3) The street address of the applicant's headquarters, if different from the applicant's principal place of business. (4) Any additional information as may be required by the department. (c) A motor vehicle wholesale auction shall be required to maintain books, records, and files that shall be accessible and available for inspection by the department during normal business hours on usual business days. The department, by rule, shall establish electronic reporting requirements regarding the sale of motor vehicles at the motor vehicle wholesale auction. (d) Every licensee under this article shall keep books and records in a form prescribed by the department. The books and records shall include purchases, sales or exchanges, and receipts of every motor vehicle purchased or sold or held for sale at the location of the licensee. In addition, the books and records shall include a description of each motor vehicle, which shall include the vehicle identification number of each motor vehicle, together with the name and address of any seller or purchaser of the motor vehicle. (e) A motor vehicle wholesale auction may not sell a motor vehicle or component parts to anyone other than a licensed new or used motor vehicle dealer, motor vehicle wholesaler, or motor vehicle rebuilder. §40-12-447. (a) An application for a license as a motor vehicle wholesale auction shall be accompanied by a state privilege license fee equal to the fee levied under Section 40-12-392 and any additional fee for issuing licenses as may be otherwise prescribed by law. (b) A privilege license issued to a motor vehicle wholesale auction under this article shall be valid for one year from the first day of October and shall be renewed on October 1 of each year. Thirty days of grace for obtaining the license shall be allowed without penalty. Thereafter, penalties prescribed under this article for delinquent licenses shall be imposed. §40-12-448. (a) Except as provided in subsection (b), before being licensed under this article, a person shall demonstrate proof of responsibility by depositing with the commissioner a continuing surety bond in the amount prescribed under Section 40-12-398 from a company authorized to do business in the state. The bond must be approved by the commissioner, payable to the state, and conditioned upon the faithful observance of all the provisions of this article. The bond must also indemnify any person who suffers a loss by reason of failure to observe the provisions of this article. (b) The department, by rule, may permit a surety bond obtained under Section 40-12-398 to serve in lieu of the surety bond prescribed in subsection (a). §40-12-449. (a) Subject to the appeal provisions allowed under Chapter 2A of this title, the commissioner may suspend or revoke a license issued for the willful and intentional failure of the licensee to comply with this article. (b) A license may be revoked or a license application may be denied by the department for any of the following reasons: (1) Fraud practiced or any material misstatement in the license application. (2) Change of condition after a license is granted or the failure to maintain qualification for the license. (3) Skipping title assignment: Accepting open assignment of title or bill of sale for a motor vehicle which is not completed by identifying the licensee as the purchaser or assignee of the motor vehicle. (4) Having no established place of business. (5) Failing to properly keep and maintain records. (6) Knowingly dealing in stolen motor vehicles, parts, or accessories. (7) Willful failure to comply with this article or any rule adopted under this article. (8) Disconnecting, turning back, or resetting the odometer of a motor vehicle in violation of state or federal law. (9) Filing a materially erroneous or fraudulent tax return with the department. (10) Revocation as a designated agent, as provided in Section 32-8-34, for failing to faithfully perform his or her duties as a designated agent. (c) Subject to the notice and appeal provisions under Chapter 2A of this title, the commissioner may do any of the following: (1) Refuse to license a person who does not meet the requirements of this article. (2) Cancel the license of a licensee for willful failure to continue to meet the requirements of this article. (3) Refuse, cancel, or revoke a license for a state or federal felony conviction involving theft or for a violation of Chapter 8 of Title 32, relating to the Uniform Certificate of Title and Antitheft Act, or a similar law of another state by an applicant; a licensee; a partner of an applicant; or, in the case of a corporate applicant or licensee, a director or manager of the licensee. §40-12-450. A person who violates this article is guilty of a Class A misdemeanor. In addition, the department may assess against the person a civil penalty of up to five thousand dollars ($5,000). The penalty may be assessed against the bond as provided for in Section 40-12-398.

Section 4

Although this bill would have as its purpose or effect the requirement of a new or increased expenditure of local funds, the bill is excluded from further requirements and application under Amendment 621, now appearing as Section 111.05 of the Official Recompilation of the Constitution of Alabama of 1901, as amended, because the bill defines a new crime or amends the definition of an existing crime.

Section 5

Section 2 of this act shall become effective on the first day of the third month following its passage and approval by the Governor, or its otherwise becoming law. The remaining sections of this act shall become effective October 1, 2020, following its passage and approval by the Governor, or its otherwise becoming law.