Bill Text: IA SSB3078 | 2015-2016 | 86th General Assembly | Introduced


Bill Title: A study bill for an act relating to the activities of motor vehicle dealers, including the electronic submission of applications for motor vehicle registration and issuance of certificates of title, the furnishing of surety bonds, and the assessment of documentary fees, and making a penalty applicable.

Spectrum: Unknown

Status: (Introduced - Dead) 2016-02-16 - Voted - Transportation. [SSB3078 Detail]

Download: Iowa-2015-SSB3078-Introduced.html
Senate Study Bill 3078 - Introduced SENATE FILE _____ BY (PROPOSED COMMITTEE ON TRANSPORTATION BILL BY CHAIRPERSON BOWMAN) A BILL FOR An Act relating to the activities of motor vehicle dealers, 1 including the electronic submission of applications for 2 motor vehicle registration and issuance of certificates of 3 title, the furnishing of surety bonds, and the assessment of 4 documentary fees, and making a penalty applicable. 5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 6 TLSB 5657SC (2) 86 ns/nh
S.F. _____ Section 1. Section 321.20, subsections 2 and 3, Code 2016, 1 are amended to read as follows: 2 2. Notwithstanding contrary provisions of this chapter 3 or chapter 326 regarding titling and registration by means 4 other than electronic means, the department may shall, by 5 July 1, 2017, develop and implement a program to allow for 6 electronic applications, titling, registering, and electronic 7 funds transfer transfers for vehicles subject to registration 8 in order to improve the efficiency and timeliness of the 9 processes and to reduce costs for all parties involved. The 10 program shall also provide for the electronic submission of any 11 statement required by this section, except where prohibited by 12 federal law. 13 3. The department shall adopt rules on the method for 14 providing signatures for applications and statements required 15 by this section that are made by electronic means. 16 Sec. 2. Section 321.20, Code 2016, is amended by adding the 17 following new subsection: 18 NEW SUBSECTION . 4. Notwithstanding this section or any 19 other provision of law to the contrary, if the program required 20 by subsection 2 is not implemented by July 1, 2017, an owner 21 of a vehicle subject to registration may apply to the county 22 treasurer of any county in the state for registration and 23 issuance of a certificate of title regardless of the owner’s 24 county of residence or the county where the primary users of 25 the vehicle are located. 26 Sec. 3. Section 322.4, subsection 1, paragraph g, Code 2016, 27 is amended to read as follows: 28 g. Before the issuance of a motor vehicle dealer’s license 29 to a dealer engaged in the sale of vehicles for which a 30 certificate of title is required under chapter 321 , or the 31 issuance of a temporary permit under section 322.5, subsection 32 6 , paragraph “b” , the applicant shall furnish a surety bond 33 executed by the applicant as principal and executed by a 34 corporate surety company, licensed and qualified to do business 35 -1- LSB 5657SC (2) 86 ns/nh 1/ 4
S.F. _____ within this state, which bond shall run to the state of Iowa, 1 be in the amount of fifty five hundred thousand dollars and 2 be conditioned upon the faithful compliance by the applicant 3 as a dealer with all of the statutes of this state regulating 4 or applicable to the business of a dealer in motor vehicles, 5 and indemnifying any person who buys a motor vehicle from the 6 dealer from any loss or damage occasioned by the failure of the 7 dealer to comply with any of the provisions of chapter 321 and 8 this chapter , including but not limited to the furnishing of 9 a proper and valid certificate of title to the motor vehicle 10 involved in a transaction. The bond shall also indemnify any 11 motor vehicle purchaser from any loss or damage caused by the 12 failure of the dealer to comply with the odometer requirements 13 in section 321.71 , regardless of whether the motor vehicle was 14 purchased directly from the dealer. The bond shall be filed 15 with the department prior to the issuance of a license or 16 permit. The aggregate liability of the surety, however, shall 17 not exceed the amount of the bond. 18 Sec. 4. NEW SECTION . 322.19A Documentary fee. 19 1. For purposes of this section, “documentary fee” means a 20 fee that may be charged to a customer by a motor vehicle dealer 21 for the preparation of documents related to an application for 22 motor vehicle registration and issuance of a certificate of 23 title, and the performance of other services for the customer 24 related to the sale of a motor vehicle. “Documentary fee” does 25 not include any costs or fees charged to a motor vehicle dealer 26 or a dealer’s customer by a third party. 27 2. A motor vehicle dealer may charge a documentary fee not 28 to exceed one hundred fifty dollars for each motor vehicle 29 sold in a transaction. Beginning January 1, 2017, and each 30 year thereafter, the maximum documentary fee permitted by 31 this section shall be subject to a rate adjustment equal to 32 the percentage change in the consumer price index for all 33 urban consumers for the most recent available twelve-month 34 period published in the federal register by the United States 35 -2- LSB 5657SC (2) 86 ns/nh 2/ 4
S.F. _____ department of labor, bureau of labor statistics. On or before 1 December 15 of each year, the department shall publish a notice 2 of the new maximum documentary fee permitted for the following 3 calendar year. 4 3. After the department has implemented a statewide 5 program pursuant to section 321.20, subsection 2, the maximum 6 documentary fee permitted by subsection 2 shall be reduced by 7 twenty-five dollars. The reduction shall be reflected in the 8 notice published by the department pursuant to subsection 2. 9 4. A motor vehicle dealer who charges a documentary fee to 10 a customer shall provide the following notice to the customer, 11 which notice shall be included in any retail installment 12 contract with the customer: 13 DOCUMENTARY FEE. A DOCUMENTARY FEE IS NOT AN OFFICIAL FEE. 14 A DOCUMENTARY FEE IS NOT REQUIRED BY LAW, BUT MAY BE CHARGED TO 15 A BUYER FOR THE PREPARATION OF DOCUMENTS AND THE PERFORMANCE OF 16 SERVICES RELATED TO THE SALE OF A MOTOR VEHICLE. THE MAXIMUM 17 AMOUNT THAT MAY BE CHARGED FOR A DOCUMENTARY FEE IS DETERMINED 18 BY IOWA CODE SECTION 322.19A. THIS NOTICE IS REQUIRED BY LAW. 19 EXPLANATION 20 The inclusion of this explanation does not constitute agreement with 21 the explanation’s substance by the members of the general assembly. 22 Current law permits, but does not require, the department 23 of transportation (DOT) to develop and implement a program 24 allowing for the electronic submission of applications and the 25 electronic transfer of funds for motor vehicle registration 26 and issuance of certificates of title. This bill requires 27 the DOT to develop and implement the program by July 1, 28 2017. The bill also requires the program to provide for the 29 electronic submission of related statements required by law. 30 If the program is not implemented by July 1, 2017, an owner 31 of a vehicle subject to registration may apply to the county 32 treasurer of any county in the state for registration and 33 issuance of a certificate of title regardless of the owner’s 34 county of residence or the county where the primary users of 35 -3- LSB 5657SC (2) 86 ns/nh 3/ 4
S.F. _____ the vehicle are located. 1 Code section 322.4 sets forth certain application 2 requirements for a motor vehicle dealer’s license. One such 3 requirement is that the applicant furnish a surety bond. This 4 bill increases the required amount of the surety bond from 5 $50,000 to $500,000. 6 The bill provides that a motor vehicle dealer may charge 7 a documentary fee not to exceed $150 for the preparation 8 of documents related to the application for motor vehicle 9 registration and issuance of a certificate of title, and the 10 performance of other services related to the sale of a motor 11 vehicle. Beginning January 1, 2017, the maximum permitted 12 documentary fee is subject to a rate adjustment equal to the 13 percentage change in the consumer price index. The bill 14 requires the DOT to publish, on or before December 15 of each 15 year, a notice of the new maximum documentary fee permitted 16 for the following calendar year. The bill provides that 17 the maximum documentary fee shall be reduced by $25 after 18 implementation of the program allowing for the electronic 19 submission of applications and the electronic transfer of funds 20 for motor vehicle registration and issuance of certificates of 21 title. The bill requires a motor vehicle dealer who charges a 22 documentary fee to a customer to provide the customer a legal 23 notification related to the fee, which notification shall be 24 included in any retail installment contract with the customer. 25 By operation of law, a violation of the documentary fee 26 requirements of the bill is a simple misdemeanor punishable 27 by a fine of not less than $250 nor more than $1,500, or by 28 imprisonment not to exceed 30 days. 29 -4- LSB 5657SC (2) 86 ns/nh 4/ 4
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