Senate Bill No. 380

(By Senator Miller)


[Introduced February 13, 1996; referred to the Committee on Transportation; and then to the Committee on Finance.]

A BILL to amend and reenact section eighteen, article six, chapter seventeen-a of the code of West Virginia, one thousand nine hundred thirty-one, as amended; and to further amend article six of said chapter by adding thereto two new sections, designated sections eighteen-a and twenty-five-a, all relating to motor vehicle dealers; license services and automobile auctions; creating a motor vehicle dealers advisory board; establishing powers and duties of the board, adding new offenses to the grounds for suspending or revoking a license certificate; and adding provisions for civil penalties for violations.

Be it enacted by the Legislature of West Virginia:
That section eighteen, article six, chapter seventeen-a of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended and reenacted; and that article six, chapter seventeen-a be further amended by adding thereto two new sections, designated sections eighteen-a and twenty-five-a, all to read as follows:
§17A-6-18. Investigation; matters confidential; grounds for

suspending or revoking license; 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 by the commissioner, the department, 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 such information as may enable it to perform its advisory function in imposing penalties. The commissioner may suspend or revoke a license certificate or suspend a special dealer plate or plates 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 and regulations 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; or
(4) In the case of a dealer, has a dealer special plate or plates to which he or she is not lawfully entitled.
The commissioner shall suspend or revoke a license certificate if the commissioner finds that the licensee:
(1) (5) Has knowingly made false statement of a material fact in his or her application for the license certificate then issued and outstanding;
(2) (6) Has habitually defaulted on financial obligations;
(3) (7) Does not have and/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 said section one;
(4) (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;
(5) (9) Has defrauded or is attempting to defraud any buyer or any other person, to the damage of the buyer or such other person, in the conduct of the licensee's business;
(6) (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;
(7) (11) Has committed fraud in the registration of a vehicle;
(8) (12) Has knowingly purchased, sold or otherwise dealt in a stolen vehicle or vehicles;
(9) (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;
(10) (14) Has willfully failed or refused to perform any legally binding written agreement with any buyer;
(11) (15) Has made a fraudulent sale or purchase;
(12) (16) Has failed or refused to assign, reassign or transfer a proper certificate of title; or
(13) (17) Has a license certificate to which he or she is not lawfully entitled; or
(18) Misrepresented a customer's credit or financial status to obtain financing.
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 such the licensee were he or she then applying for the same.
(b) Whenever a licensee fails or refuses to keep the bond or liability insurance required by section four of this article in full force and effect, the license certificate of such licensee shall automatically be suspended unless and until a bond or certificate of insurance as required by said section four is furnished to the commissioner, in which event the suspension shall be vacated.
(c) Suspensions hereunder shall continue until the cause therefor has been eliminated or corrected. Revocation of a license certificate shall may not preclude application for a new license certificate, which application shall be processed in the same manner and the license certificate issued or refused on the same grounds as any other application for a license certificate is processed, considered and passed upon, except that any previous suspension and the revocation may be given such weight in deciding whether to issue or refuse such license certificate as is meet and proper under all of the circumstances.
§17A-6-18a. Motor vehicle dealers advisory board.
(a) There is created a motor vehicle dealers advisory board to assist and to advise the commissioner on the administration of laws regulating the motor vehicle industry; to work with the commissioner in developing new laws, rules or policies regarding the motor vehicle industry; and to give the commissioner such further advice and assistance as he or she may from time to time require.
The board shall consist of nine members and the commissioner of motor vehicles, or his or her representative, who shall be an ex officio member. Three members shall represent new car dealers, two members shall represent used car dealers, one member shall represent wrecker dismantler rebuilders, one member shall represent automobile auctions, one member shall represent recreational dealers and one member shall be a representative of the West Virginia attorney general's office. All the representatives except the attorney general representative who shall be designated by the attorney general shall be appointed by the governor with no more than five being from the same political party.
The terms of the board members shall be for three years commencing the first day of July, one thousand nine hundred ninety-six. Two members shall be appointed to serve one year, two members shall be appointed to serve two years, and five members shall be appointed to serve three years. Successive appointments shall be for the full three years. The attorney general representative shall serve continuously.
The board shall meet at least four times annually and at the call of the commissioner.
Notwithstanding the provisions of article ten, chapter four of this code, the motor vehicle dealers advisory board shall continue until the first day of July, two thousand one.
(b) The commissioner shall consult with the board before he or she takes any disciplinary action against a dealer or an automobile auction or a license service to revoke, suspend, place on probation or levy a civil penalty.
(c) The commissioner may consult with the board by mail, by facsimile, by telephone or at a meeting of the board, but the commissioner is not bound by the recommendations of the board. The commissioner shall give members seven days from the date of a mailing or other notification to respond to proposed actions, except in those instances when the commissioner determines that the delay in acting creates a serious danger to the public's health or safety or would unduly compromise the effectiveness of the action.
(d) No action taken by the commissioner shall may be subject to challenge or rendered invalid on account of his or her failure to consult with the board.
§17A-6-25a. Civil penalties.
(a) In addition to any other remedy or penalty provided by law the commissioner may levy and collect a civil penalty, in an amount not to exceed one thousand dollars for each violation, against any person who violates the provisions of this article or article six-b of this chapter or article six-c of this chapter or any of the rules or policies implemented to enforce those articles or any lawful order of the commissioner pursuant to authority set forth in those articles. Every transaction which violates this article, article six-b or article six-c of this chapter shall be considered a separate violation. For a second violation the commissioner may levy and collect a civil penalty in an amount not to exceed twenty-five thousand dollars and for a third and subsequent violation the commissioner may levy and collect civil penalties in amounts not to exceed five thousand dollars.
(b) A civil penalty assessed hereunder shall may not take effect until the commissioner sends to the person against whom the penalty is assessed by certified mail, return receipt requested, a notice of violation finding that the person has committed an offense. The notice shall contain:
(1) A statement of the offense the person committed;
(2) A summary of the facts on which the finding of a violation was made;
(3) The amount of the civil penalty which is being levied; and
(4) An order that the person:
(A) Cease and desist from all future violations and pay the civil penalty; or
(B) Protest in writing the findings of the commissioner or the amount of the assessed penalty and request a hearing.
Any request for a hearing must be received by the commissioner within thirty days after the mailing date of the notice of violation. The notice of violation may be sent to any address which the person has used on any title or license application, or other filing or record which the commissioner believes is current. Failure of any person to receive a notice of violation will does not preclude the civil penalty from taking effect. However, the commissioner shall accept as timely a request for hearing from any person who, within one year of the date the notice of violation was sent, provides satisfactory proof that he or she did not receive the notice of violation and that good cause exists to excuse his failure to receive the notice of violation and that he or she wishes in good faith to assert a protest to the notice of violation. The pendency of the one-year period shall may not keep any penalty from taking effect, but the commissioner shall stay enforcement of the civil penalty upon his or her acceptance of any notice filed after the thirty- day period pending the outcome of the appeal.
(c) Upon receipt of a timely request the commissioner shall afford the person a hearing in accordance with the rules of the division of motor vehicles. The commissioner, in addition to considering the evidence relied upon to prove or defend against a finding of a violation, shall also evaluate the appropriateness of the amount of the civil penalty. In making such evaluation, the commissioner shall consider:
(1) The severity of the violation and its impact on the public;
(2) The number of similar or related violations;
(3) Whether the violations were willful or intentional; and
(4) Any other facts considered appropriate.
(d) In addition to any other findings of fact or conclusions of law, the commissioner may reduce the civil penalty to a stated amount. The appellant may, at any time during the pendency of the appeal, enter into a settlement agreement with the commissioner. The settlement agreement may provide for a reduction in the penalty and it may provide for assurances that future violations will not occur without an admission of guilt by the appellant. The payment of any civil penalty pursuant to a settlement agreement which clearly states that no finding of violation is made shall not amount to an admission of guilt for purposes of any criminal prosecution. But the settlement agreement shall operate as a violation for any additional penalty for a second or subsequent violations.
(e) Upon the expiration of all periods for protest or appeal of a notice of violation the notice of violation shall have the same force and effect and be enforceable as a judgment entered by any court of law of this state.
(f) Any officer of a corporation that is found to have committed a violation against which a penalty may be assessed hereunder and who is shown to have been substantially involved with the violation may be individually found to be a coviolator and assessed a civil penalty as provided by this rule.

NOTE: The purpose of this bill is to create a motor vehicle dealers advisory board and establish the duties of the board. The bill further adds new offenses to the grounds for suspending or revoking a license certificate.

Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added.

§§17A-6-18a and 25a are new; therefore, strike-throughs and underscoring have been omitted.