H. B. 4490
(By Delegate Boggs)
[Introduced February 10, 2006; referred to the
Committee on Government Organization then Finance.]
A BILL to amend and reenact §17A-6-6 and §17A-6-18 of the Code of
West Virginia, 1931, as amended; and to amend said code by
adding thereto a new article, designated §17A-6E-1, §17A-6E-2,
§17A-6E-3, §17A-6E-4, §17A-6E-5, §17A-6E-6, §17A-6E-7,
§17A-6E-8, §17A-6E-9, §17A-6E-10, §17A-6E-11, §17A-6E-12 and
§17A-6E-13, all relating generally to the regulation of
selling new or used vehicles; providing for the comprehensive
regulation and licensing of persons who sell new or used
vehicles by requiring these persons to obtain licenses as
salespersons; authorizing fees; authorizing the commissioner
to propose legislative rules; prohibiting the employment by
dealers of unlicensed salespersons; authorizing the
commissioner to conduct investigations and petition for
injunctions under certain circumstances.
Be it enacted by the Legislature of West Virginia:
That §17A-6-6 and §17A-6-18 of the Code of West Virginia,
1931, as amended, be amended and reenacted; and that said code be
amended by adding thereto a new article, designated §17A-6E-1,
§17A-6E-2, §17A-6E-3, §17A-6E-4, §17A-6E-5, §17A-6E-6, §17A-6E-7,
§17A-6E-8, §17A-6E-9, §17A-6E-10, §17A-6E-11, §17A-6E-12 and §17A-
6E-13, all to read as follows:
ARTICLE 6. LICENSING OF DEALERS AND WRECKERS OR DISMANTLERS;
SPECIAL PLATES; TEMPORARY PLATES OR MARKERS, ETC.
§17A-6-6. Refusal or issuance of license certificate; license
certificate not transferable.
(a) Upon the
basis review of the application and all other
information before him or her, the commissioner
shall may make and
enter an order denying
the an application for a license certificate
and
refusing refuse the license certificate sought.
which A denial
and refusal are final and conclusive unless an appeal is
taken made
in accordance with the provisions of
section twenty-one of this
article rules proposed for legislative approval in accordance with
the provisions of article three, chapter twenty-nine-a of this code.
The commissioner shall make and enter an order denying or refusing
a license, if the commissioner finds that the applicant
(individually, if an individual, or the partners, if a
copartnership, or the officers and directors, if a corporation):
(1) Has failed to furnish the required bond unless otherwise
exempt under the provisions of section two-a of this article;
(2) Has failed to furnish the required certificate of
insurance;
(3) Has knowingly made false statement of a material fact in
his or her application;
(4) Has habitually defaulted on financial obligations in this
state or any other state or jurisdiction;
(5) Has been convicted of a felony:
Provided, That upon
appeal, the Motor Vehicle Dealers Advisory Board established
pursuant to the provisions of section eighteen-a of this article may
grant
as an exemption of this restriction if the felony did not
involve financial matters, the motor vehicle industry or matters of
moral turpitude;
(6) So far as can be ascertained, has not complied with and
will not comply with the registration and title laws of this state
or any other state or jurisdiction;
(7) Does not or will not have or maintain at each place of
business, subject to the qualification contained in subdivision
(17), subsection (a), section one of this article with respect to
a new motor vehicle dealer (an established place of business as
defined for the business in question) in that section;
(8) Has been convicted of any fraudulent act in connection with
the business of new motor vehicle dealer, used motor vehicle dealer,
house trailer dealer, trailer dealer, recreational vehicle dealer,
motorcycle dealer, used parts dealer, or wrecker or dismantler in this state or any other state or jurisdiction;
(9) Has done any act or has failed or refused to perform any
duty for which the license certificate sought could be suspended or
revoked were it then issued and outstanding;
(10) Is not age eighteen years or older;
(11) Is delinquent in the payment of any taxes owed to the
United States, the State of West Virginia or any political
subdivision
thereof of the state;
(12) Has been denied a license in another state or has been the
subject of license revocation or suspension in another state;
(13) Has committed any action in another state which, if it had
been committed in this state, would be grounds for denial and
refusal of the application for a license certificate;
(14) Has failed to pay any civil penalty assessed by this state
or any other state;
or
(15) Has failed to reimburse when ordered, any claim against
the dealer recovery fund as prescribed in section two-a of this
article;
or
(16) Has failed to comply with the provisions of article six-e
of this chapter, pertaining to the employment of licensed
salespersons.
Otherwise, the commissioner shall issue to the applicant the
appropriate license certificate which entitles the licensee to
engage in the business of new motor vehicle dealer, used motor vehicle dealer, house trailer dealer, trailer dealer, recreational
vehicle dealer, motorcycle dealer, used parts dealer, or wrecker or
dismantler, as the case may be.
during the period, unless sooner
suspended or revoked, for which the license certificate is issued
(b) A license certificate issued in accordance with the
provisions of this article is not transferable.
§17A-6-18. Investigation; matters confidential; grounds for
suspending or revoking license or imposing fine;
suspension and revocation generally.
(a) The commissioner may conduct an investigation to determine
whether any provisions of this chapter have been or are about to be
violated by a licensee. Any investigation shall be kept
in
strictest confidence confidential by the commissioner
and the
division,
the licensee, any complainant and all other persons,
unless and until the commissioner suspends or revokes the license
certificate of the licensee involved or fines the licensee:
Provided, That the commissioner may advise the Motor Vehicle Dealers
Advisory Board of pending actions and may disclose to the Motor
Vehicle Dealers Advisory Board any information that enables it to
perform its advisory function in imposing penalties. The
commissioner may suspend or revoke a license certificate, suspend
a special dealer plate or plates, impose a fine or take any
combination of these actions if the commissioner finds that the
licensee:
(1) Has failed or refused to comply with the laws of this state
relating to the registration and titling of vehicles and the giving
of notices of transfers, the provisions and requirements of this
article, or any reasonable rules authorized in section nine, article
two of this chapter and promulgated to implement the provisions of
this article by the commissioner in accordance with the provisions
of article three, chapter twenty-nine-a of this code;
(2) Has given any check in the payment of any fee required
under the provisions of this chapter which is dishonored;
(3) In the case of a dealer, has knowingly made or permitted
any unlawful use of any dealer special plate or plates issued to him
or her;
(4) In the case of a dealer, has a dealer special plate or
plates to which he or she is not lawfully entitled;
(5) Has knowingly made false statement of a material fact in
his or her application for the license certificate then issued and
outstanding;
(6) Has habitually defaulted on financial obligations;
(7) Does not have and maintain at each place of business
(subject to the qualification contained in subdivision (17),
subsection (a), section one of this article with respect to a new
motor vehicle dealer) an established place of business as defined
for the business in question in section one of this article;
(8) Has been guilty of any fraudulent act in connection with the business of new motor vehicle dealer, used motor vehicle dealer,
house trailer dealer, trailer dealer, motorcycle dealer, used parts
dealer or wrecker or dismantler;
(9) Has defrauded or is attempting to defraud any buyer or any
other person, to the damage of the buyer or other person, in the
conduct of the licensee's business;
(10) Has defrauded or is attempting to defraud the state or any
political subdivision of the state of any taxes or fees in
connection with the sale or transfer of any vehicle;
(11) Has committed fraud in the registration of a vehicle;
(12) Has knowingly purchased, sold or otherwise dealt in a stolen
vehicle or vehicles;
(13) Has advertised by any means, with intent to defraud, any
material representation or statement of fact which is untrue,
misleading or deceptive in any particular relating to the conduct
of the licensed business;
(14) Has willfully failed or refused to perform any legally
binding written agreement with any buyer;
(15) Has made a fraudulent sale or purchase;
(16) Has failed or refused to assign, reassign or transfer a
proper certificate of title;
(17) Has a license certificate to which he or she is not
lawfully entitled;
(18) Has misrepresented a customer's credit or financial status to obtain financing;
or
(19) Has failed to reimburse, when ordered, any claim against
the dealer recovery fund as prescribed in section two-a of this
article;
or
(20) Has employed unlicensed salespersons in violation of
article six-e of this chapter on or after the first day of January,
two thousand seven.
The commissioner shall also suspend or revoke the license
certificate of a licensee if he or she finds the existence of any
ground upon which the license certificate could have been refused
or any ground which would be cause for refusing a license
certificate to the licensee were he or she then applying for the
license certificate.
(b) Whenever a licensee fails to keep the bond, unless exempt
from the requirement pursuant to section two-a of this article or
liability insurance required by section four of this article, in
full force and effect, or fails to provide evidence of the bond or
liability insurance, the commissioner shall automatically suspend
the license certificate of the licensee unless and until a bond or
certificate of insurance as required by section four of this article
is furnished to the commissioner. When the licensee furnishes the
bond or certificate of insurance to the commissioner and pays all
reinstatement fees, the commissioner shall vacate the suspension.
(c) Suspensions under this section shall continue until the cause for the suspension has been eliminated or corrected.
Revocation of a license certificate
shall does not preclude
application for a new license certificate. The commissioner shall
process the application for a new license certificate in the same
manner and issue or refuse to issue the license certificate on the
same grounds as any other application for a license certificate is
processed, considered and passed upon, except that the commissioner
may give any previous suspension and the revocation such weight in
deciding whether to issue or refuse the license certificate as is
correct and proper under all of the circumstances.
ARTICLE 6E. MOTOR VEHICLE SALESPERSON LICENSE.
§17A-6E-1. Findings and purpose.
It is the purpose of this article to protect retail motor
vehicle customers, motor vehicle dealers, banks and the state from
sustaining losses due to the fraudulent activity of persons engaged
in the business of selling vehicles. Some persons engaged in this
business lack the knowledge or aptitude to properly prepare
documents related to vehicle purchases, make false and deceptive
claims concerning motor vehicles to customers and have engaged in
fraud and other illegal conduct which has resulted in customers,
motor vehicle dealers, banks and the state sustaining financial
losses. This article establishes minimum competency and ethical
standards for persons engaged in the business of selling motor
vehicles to the general public.
§17A-6E-2. Definitions.
The following words as used in this article, unless the context
otherwise requires, have the following meanings:
(1) "Applicant" means any person making application for an
original or renewal of a salesperson license;
(2) "Dealer" means any motor vehicle or auction business
regulated under the provisions of article six or six-c of this
chapter;
(3) "Licensee" means any person holding a license issued under
the provisions of this article;
(4) "Motor vehicle salesperson" or "salesperson" means any
person employed by a dealer to sell, buy, display and offer for sale
or deal in motor vehicles, recreational vehicles or trailers for a
commission or other valuable consideration, but does not mean any
public officer performing his or her official duties or the dealer
licensee. A person employed by a dealer as a finance and insurance
representative is for the purposes of this article a salesperson.
§17A-6E-3. License required.
(a) Except as provided in section six of this article, no
person may engage in business in this state as a motor vehicle
salesperson on and after the first day of January, two thousand
seven, without first obtaining a license as provided in this
article.
(b) No class of vehicle dealer as defined in article six or six-c of this chapter may employ an unlicenced motor vehicle
salesperson on or after the first day of January, two thousand
seven. No person may sell vehicles for more than one vehicle dealer
unless the commissioner grants a written waiver.
(c) Any person employed by a licensed dealer as a salesperson
for at least a period of five years immediately preceding the
effective date of this section is exempt from the requirements of
the background investigation and the written test and payment of the
fee for the background investigation provided in section four of
this article.
§17A-6E-4. Eligibility and issuance of license.
(a) The division may not issue any person a motor vehicle
salesperson license unless the person:
(1) Is endorsed for employment by a West Virginia dealer; (2)
Completes the application for a license on the form prescribed by
the division, fully completed, signed and attested to by the
applicant, including, but not limited to, the applicant's:
(A) Full name;
(B) Social security number;
(C) Residence and mailing address;
(D) Name of employing dealership;
(E) Statement as to whether the applicant has ever had any
previous application for a dealer or salesperson license refused in
this or any other state or jurisdiction;
(F) Statement as to whether the applicant has been previously
licensed as a salesperson in this state or any other state or
jurisdiction;
(G) Statement as to whether the applicant has ever had his or
her salesperson license or a dealer license suspended or revoked in
this state or any other state or jurisdiction;
(H) Statement as to whether the applicant has ever held a
dealer license which has been suspended or revoked or has been
employed by a dealer which has had its license suspended or revoked;
(I) Statement as to whether the applicant has ever been
convicted of a felony or whether the applicant individually or as
an owner, partner, officer or director of a business entity has been
convicted of, or pleaded guilty or nolo contendere to a criminal
action, and if so, a written explanation of the conviction;
(J) Statement as to whether or not the applicant owes a child
support obligation, owes a child support obligation that is more
than six months in arrears, is the subject of a child support
related warrant, subpoena or court order; and
(K) Statement that the applicant has not been found to have
done any of the acts which would justify suspension or revocation
of a salesperson's license under section nine of this article;
(3) Submits an employing salesperson notification form
completed and endorsed by the employing dealer;
(4) Furnishes a full set of fingerprints to facilitate a background check and other investigation considered necessary by the
commissioner;
(5) Pays an initial nonrefundable application fee of five
dollars for each year the license is valid. Payment of the fee
entitles the applicant to one attempt at a written test prescribed
by the division. Successful completion of at least seventy percent
of the written test is a passing score;
(6) Pays a nonrefundable background investigation fee of
twenty-five dollars; and
(7) Successfully passes a background investigation conducted
by the division.
(b) The division may, upon successful completion of all the
requirements contained in subsection (a) of this section, with the
exception of the background investigation, issue the applicant a
temporary motor vehicle salesperson license. The temporary license
is valid for a maximum of ninety days pending issuance of the
permanent license endorsement or receipt of an unfavorable
background investigation, whichever occurs first.
(c) The division shall refuse to issue the license if the
applicant:
(1) Does not provide the necessary documents as determined by
the division to establish his or her identity or legal presence in
this country;
(2) Has made any false statements of material fact in the application;
(3) Has had his or her privilege to sell vehicles denied,
suspended or revoked by this state or any other state or
jurisdiction:
Provided, That upon the applicant's appeal, the
commissioner may grant an exemption of this restriction if the
applicant can show that he or she is eligible for reinstatement in
his or her previous jurisdiction of licensure;
(4) Has committed a fraudulent act or omission or repeatedly
defaulted in financial obligations in connection with the buying,
selling, leasing, rental or otherwise dealing in motor vehicles,
recreational vehicles or trailers;
(5) Has been convicted of a felony:
Provided, That upon the
applicant's appeal the commissioner may grant an exemption to this
restriction if the felony did not involve financial matters or the
motor vehicle industry;
(6) Has not been designated to act as a salesperson for a motor
vehicle dealer licensed in accordance with article six or six-c of
this chapter;
(7) Has acted as a salesperson for more than one motor vehicle
dealer at the same time unless granted a waiver by the commissioner;
or
(8) Has an unfavorable background investigation.
(d) Any dealer who employs a salesperson shall notify the
division within ten days of the employment.
(e) Willful misrepresentation of any fact in any application
or any document in support of the application is a violation of this
chapter.
§17A-6E-5. Expiration of license, renewal and expired license.
(a) An initial license issued under the provisions of this
article shall be valid for no less than three years nor more than
seven years as determined by the division to establish set license
expiration date on the applicant's birthday in a year in which the
applicant's age is evenly divisible by five.
(b) A salesperson may renew a salesperson license in the manner
prescribed by the division upon completion of the application for
renewal, endorsement by the employing dealer and payment of a
renewal fee of ten dollars. The license shall be valid for a period
of five years.
(1) Any licensee who fails to renew his or her salesperson
license before the date of expiration shall pay an additional fee
of five dollars.
(2) Any licensee who fails to renew his or her salesperson
license within six months of expiration is not eligible for renewal
and is required to complete the application process required of all
new applicants, including the payment of all initial fees,
completion of the written test and background investigation as if
he or she never held a license.
§17A-6E-6. Change of employer.
(a) The dealer shall notify the division in the manner
prescribed by the division within ten days upon the termination or
cessation of employment of a salesperson for any reason. Upon
termination or cessation of employment, the license of the
salesperson becomes inactive. The person shall cease the selling
of vehicles until the person becomes relicensed as a salesperson for
the same dealer or another dealer.
(b) The dealer shall notify the division in the manner
prescribed by the division within ten days upon hiring any person
who possesses a valid salesperson license. The dealer shall
complete an application for transfer of a salesperson license.
(c) The salesperson shall submit the completed transfer
application, a fee of five dollars and obtain a new salesperson
license in the name of the new employer within thirty days of
employment. No transfer application or fee is required if the
salesperson is reemployed by the previous employer, within six
months of cessation of employment. However, the dealer shall notify
the division of the reemployment.
§17A-6E-7. Change of address, lost or stolen license, duplicate
license.
A salesperson shall notify the division in the manner
prescribed by the division of the loss of any license and obtain a
new license within twenty days of loss. The division shall charge
a fee of five dollars for issuing any duplicate license.
§17A-6E-8. Display of license.
(a) Every salesperson licensee must have his or her salesperson
license in his or her possession at all times when engaged in the
business of selling vehicles, and shall display the license upon
demand of any customer, law-enforcement official or division
employee.
(b) Every dealer shall conspicuously display a list of all
employees currently licensed as salespersons.
§17A-6E-9. Revocation, suspension or refusal to renew license.
(a) The commissioner may revoke or suspend the license of any
salesperson if he or she determines that the licensee has:
(1) Violated any motor vehicle dealer law, any dealer rule or
order of the division;
(2) Improperly withheld, misappropriated or converted to his
or her own use any money received from customers;
(3) Misrepresented the terms of any existing or proposed
vehicle sale, purchase, lease, rental, finance, warranty or
insurance agreement;
(4) Engaged in any pattern of unfair competition or unfair or
deceptive acts or practices in the business of buying, selling,
renting or leasing vehicles;
(5) Forged another person's name to any application or form
required for the titling, leasing, rental, registration, financing
or insuring of a vehicle;
(6) Knowingly and willfully made or permitted a false or
fraudulent application or form required for the titling, leasing,
rental, registration, financing or insuring of a vehicle;
(7) Been convicted of or pleaded nolo contendere to any felony:
Provided, That upon the applicant's appeal the commissioner may
grant an exemption to this subdivision if the felony did not involve
financial matters or the motor vehicle industry;
(8) Been convicted of or pleaded nolo contendere to a
misdemeanor in connection with his or her activities in the business
of selling, renting or leasing vehicles;
(9) Been refused a dealer or salesperson license or had a
dealer or salesperson license suspended, revoked, restricted or
otherwise canceled in another state or jurisdiction:
Provided, That
upon the applicant's appeal, the commissioner may grant an exemption
of this restriction if the applicant can show that he or she is
eligible for reinstatement in his or her previous jurisdiction of
licensure; or
(10) Obtained the license through misrepresentation, fraud or
any other act for which the issuance of the license could have been
refused had it been known to the commissioner at the time of
issuance.
(b) For the purposes of this section:
(1) "Suspension" means the privilege to sell vehicles is
temporarily withdrawn for a fixed period and is reinstatable without retesting; and
(2) "Revocation" means the privilege to sell vehicles is
withdrawn permanently. However, the person retains the right to
reapply for an original license with an explanation as to why the
commissioner should consider the applicant for relicensing.
§17A-6E-10. Administrative due process.
(a) Any person may appeal an order of the commissioner
suspending, revoking, denying or otherwise canceling his or her
salesperson license in accordance with the prescribed procedures of
the division.
(b) The appeal serves to stay the suspension or revocation of
a salesperson license but does not serve to require the commissioner
to issue or renew a salesperson license.
(c) Any final order entered pursuant to this article is subject
to judicial review as provided in article five, chapter twenty-nine-
a of this code.
§17A-6E-11. Investigation, matters confidential.
The commissioner may conduct any investigation necessary to
determine whether any provision of this chapter has been violated
or is about to be violated by a licensee or applicant. Any
investigation shall be kept confidential by the commissioner and the
division unless and until the commissioner suspends, revokes or
otherwise denies a license. However, the commissioner may advise
the Motor Vehicle Dealers Advisory Board of information that may enable it to perform its advisory functions.
§17A-6E-12. Injunctive relief.
(a) Whenever it appears to the commissioner that any person or
licensee has violated any provision of this article or any final
order of the commissioner, the commissioner may petition, in the
name of the state, in the circuit court of Kanawha County or in the
circuit court of the county in which the violation occurred, for an
injunction against the person or licensee. A violation or
violations resulting in the prosecution or conviction under the
provisions of article eleven of this chapter do not prohibit
injunctive relief.
(b) The circuit court may, by mandatory or prohibitory
injunction, compel compliance with the provisions of this article
and all final orders of the commissioner. The court may also issue
temporary injunctions.
(c) The judgment by the circuit court is final unless reversed,
vacated or modified on appeal to the Supreme Court of Appeals of
West Virginia. An appeal shall be sought in the manner and within
the time provided by law for appeals from circuit courts in other
civil cases.
§17A-6E-13. Authority for rules.
The commissioner may propose rules for legislative approval in
accordance with the provisions of article three, chapter
twenty-nine-a of this code, in order to effectuate the provisions of this article.
NOTE: The purpose of this bill is to protect retail motor
vehicle customers, motor vehicle dealers, banks and the state from
sustaining financial losses due to the fraudulent activity of some
persons engaged in the business of selling vehicles. This bill
establishes a system of regulating and licensing the persons who
sell new or used vehicles by requiring these persons to obtain
licensing as a salesperson with the Division of Motor Vehicles. The
bill also adds authority for the division to do a background check.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.
§17A-6E is new; therefore, strike-throughs and underscoring
have been omitted.