HB 2292
Initials JB Page 1 Caucus & COW
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-sixth Legislature
First Regular Session
House: TI DPA 10-0-1-0
HB 2292: motor vehicle dealers; sales; cancellation
Sponsor: Representative Cook, LD 7
Caucus & COW
Overview
Permits a motor vehicle dealer, a purchaser and any lienholder to rescind or cancel the sale of
any motor vehicle if all parties agree and outlined requirements are followed. Allows a motor
vehicle dealer that is unable to obtain from the holder of a lien or encumbrance a certificate of title
for a motor vehicle acquired through payoff of the lien or encumbrance to apply to the Arizona
Department of Transportation (ADOT) for that certificate for resale. Makes changes to the
requirements of an application for motor vehicle registration.
History
When a holder of a lien or encumbrance receives a payment in full satisfying the lien or
encumbrance, the holder is required to release the lien or encumbrance and notify the owner of
the vehicle at the address shown on the certificate of title or, if the holder of the lien or
encumbrance has been previously notified of a sale or transfer of the vehicle, the person who is
legally entitled to possession that ADOT has issued a certificate of title for the vehicle to.
If a holder of a lien or encumbrance who possesses the certificate of title refuses or fails to provide
the certificate of title to the person who is legally entitled to possess the certificate on that person's
request and within 15 business days after the holder receives payment, ADOT may impose and
after the opportunity for an administrative hearing collect a civil penalty of:
1) $50 if the certificate of title is surrendered within three additional business days; or
2) an additional $50 for each day exceeding 18 business days that the certificate of title is
not surrendered up to a maximum of $500 for each certificate of title (A.R.S. § 28-2134).
A person may apply to ADOT for the registration of a motor vehicle, trailer or semitrailer on forms
prescribed by ADOT. The registration application is required to contain:
1) the name and complete residence of the owner;
2) a description of the vehicle, including the serial number;
3) the date of sale by the manufacturer or dealer to the person first operating the vehicle, if
it is a new vehicle;
4) a statement of whether the owner of the vehicle rents or intends to rent the vehicle without
a driver; and
5) other facts required by ADOT (A.R.S. § 28-2157).
Provisions
Motor Vehicle Dealer Certificate of Title Application
1. Enables a motor vehicle dealer that is unable to obtain from the holder of a lien or
encumbrance a certificate of title for a motor vehicle acquired through the payoff of a lien or
encumbrance 20 days after the full payment to apply to ADOT for a certificate of title in the
dealer's name for the purpose of resale. (Sec. 1)
☐ Prop 105 (45 votes) ☐ Prop 108 (40 votes) ☐ Emergency (40 votes) ☐ Fiscal Note HB 2292
Initials JB Page 2 Caucus & COW
2. Outlines what a motor vehicle dealer is required to include in an application to ADOT for a
certificate of title in the dealer's name. (Sec. 1)
3. Specifies that a motor vehicle dealer that is issued a certificate of title after applying to ADOT
assumes liability for any outstanding balance due to a holder of a lien or encumbrance and
that the holder of the lien or encumbrance is permitted to take any legal action to collect the
debt. (Sec. 1)
4. Describes that if the director of ADOT revokes the certificate of title issued to the motor vehicle
dealer, ADOT may reissue the previous certificate of title for the motor vehicle. (Sec. 1)
Motor Vehicle Sale Rescission or Cancellation
5. Allows a motor vehicle dealer, a purchaser and any lienholder to rescind or cancel the sale of
any motor vehicle if:
a) all parties agree to the rescission or cancellation;
b) all parties complete a return agreement;
c) the motor vehicle dealer returns all fees, taxes and other monies provided to the dealer
as part of the sale by the rightful parties; and
d) the motor vehicle dealer documents the rescission or cancellation with ADOT if the motor
vehicle dealer has already applied to ADOT for the certificate of title. (Sec. 6)
6. Directs a motor vehicle dealer to retain a return agreement with the motor vehicle sales
records. (Sec. 6)
7. States a canceled or rescinded sale invalidates any requirements for a motor vehicle dealer
to submit an application for a certificate of title or remit any fees or taxes if the application,
fees and taxes have not been remitted. (Sec. 6)
8. Requires a motor vehicle dealer to document the rescission or cancellation of a sale with
ADOT and return to the rightful parties all fees, taxes and other monies in a way prescribed
by ADOT if the motor vehicle dealer has already submitted to ADOT an application for a
certificate of title or has remitted taxes or fees. (Sec. 6)
9. Requires the documentation to ADOT to:
a) be completed and submitted to ADOT within 15 days after the date the parties agreed to
cancel or rescind the sale;
b) include a copy of the return agreement; and
c) include a certificate of title if it has been issued or an attestation that the certificate of title
has been lost or destroyed. (Sec. 6)
10. Requires ADOT within seven days of receiving the documentation to:
a) rescind, cancel or revoke any application for a certificate of title or any issued certificate
of title;
b) refund to the motor vehicle dealer any fees and taxes paid to ADOT, except for the $4
certificate of title fee and other exempted fees; and
c) issue a certificate of title to the motor vehicle dealer that shows the dealer as the owner
and the odometer mileage reading as recorded at the time of the canceled or rescinded
sale. (Sec. 6)
11. Specifies that a motor vehicle whose sale is canceled or rescinded may not be offered for
retail sale until the motor vehicle dealer has received the certificate of title from ADOT. (Sec.
6)
12. Specifies a rescission or cancellation of a motor vehicle sale does not negate that the motor
vehicle has been the subject of a previous retail sale. (Sec. 6)
HB 2292
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Miscellaneous
13. Permits an application for the registration of a motor vehicle, trailer or semitrailer to contain a
unique identifier such as a driver's license number instead of the owner's first and last name.
(Sec. 2)
14. States a registration application must contain the residence address of the owner, instead of
the complete residence address of the owner. (Sec. 2)
15. Asserts ADOT may only require additional facts in a registration application if ADOT has
reasonable suspicion that the application is connected to fraud. (Sec. 2)
16. Specifies that the permanent record a licensed wholesale motor vehicle dealer or broker is
required to keep may be in an electronic format. (Sec. 4)
17. Allows a motor vehicle dealer to give a customer an electronic contract, instead of a written
contract. (Sec. 4)
18. Directs that a motor vehicle dealer cannot advertise or offer for sale or exchange any specific
motor vehicle unless the motor vehicle is directly available to the dealer, instead of the vehicle
being available to the dealer directly from the manufacturer or distributor of the vehicle. (Sec.
5)
19. Makes technical changes. (Sec. 1-3)
Amendments
Committee on Transportation and Infrastructure
1. Removes the language that outlines the process of a motor vehicle dealer applying to ADOT
for a certificate of title in the dealer's name if the motor vehicle dealer is unable to obtain the
certificate of title from the holder of the lien or encumbrance.
2. Clarifies the driver's license number used on a registration application must be a valid United
States driver's license number.
3. Requires the recission or cancelation of a motor vehicle sale to take place within thirty days
after the purchase.