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Regular Session, 2010
HOUSE BILL NO. 1189
BY REPRESENTATIVE WADDELL
MOTOR VEHICLES: Provides relative to the La. Used Motor Vehicle Commission
AN ACT1
To amend and reenact R.S. 32:781(13)(a)(i), 783(F)(3) and (6) and (G), 791(B)(1) and2
(4)(a), (G)(1), and (J), 792(A)(introductory paragraph) and (B)(introductory3
paragraph), and 802(D), and to enact R.S. 32:794, relative to the La. Used Motor4
Vehicle Commission; to define "used motor vehicle dealer"; to provide for the sale5
of a used motor vehicle "as is"; to provide for the commission's power to hold6
hearings; to provide for the Louisiana Used Motor Vehicle Commission Fund; to7
provide for application procedures; to provide for expiration of licenses; to provide8
for a bond requirement; to provide for education requirements; to repeal expired9
provisions; to provide for denial of a license; to authorize revocation or suspension10
of a license, issuance of a civil fine or penalty, or injunction for certain acts; to11
provide for used motor vehicle auction violations; to provide for suspension,12
revocation, or refusal of a license or permit for committing an unlawful action during13
a used motor vehicle auction; to authorize an injunction or civil fines and penalties14
for committing an unlawful action during a used motor vehicle auction; and to15
provide for related matters.16
Be it enacted by the Legislature of Louisiana:17
Section 1. R.S. 32:781(13)(a)(i), 783(F)(3) and (6) and (G), 791(B)(1) and (4)(a),18
(G)(1), and (J), 792(A)(introductory paragraph) and (B)(introductory paragraph), and 802(D)19
are hereby amended and reenacted and R.S. 32:794 is hereby enacted to read as follows: 20 HLS 10RS-1503 ORIGINAL
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§781. Definitions1
As used in this Chapter:2
* * *3
(13)(a)(i) "Used motor vehicle dealer" means any person , partnership,4
corporation, limited liability company, or other entity who, for a commission or with5
intent to make a profit or gain of money or other thing of value, buys, sells, brokers,6
exchanges, rents with option to purchase, auctions, offers, or attempts to negotiate7
a sale or exchange of an interest in used motor vehicles and who is engaged wholly8
or in part in the business of buying and selling used motor vehicles, whether such9
motor vehicles are owned by such person and whether the motor vehicles are sold10
from a dealership location or via any form of advertising, including but not limited11
to the Internet. A person shall be presumed to be engaged in the business of selling12
used motor vehicles if he sells five or more used motor vehicles in any twelve-month13
period which vehicles are not registered to and insured by members of the14
individual's household, immediate family members, or legal entities which the15
individual has an ownership interest in or is employed by. An entity shall be16
presumed to be engaged in the business of selling used motor vehicles if the entity17
sells five or more used motor vehicles which are not registered to and insured by the18
entity or by an entity affiliated with the entity receiving anything of value.19
* * *20
§783. Used Motor Vehicle Commission; appointment and qualification; terms of21
office; powers and duties22
* * *23
F. The commission's powers and duties shall include but are not limited to24
the following:25
* * *26
(3) Requiring all dealer sales to have a condition of sale, such as warranty27
disclaimer, implied or written warranty, or a service contract approved by the28
commission. If a sale of a used motor vehicle is "as-is" and with a waiver of all29 HLS 10RS-1503 ORIGINAL
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warranties, the bill of sale shall include a notice which clearly and unambiguously1
states that the terms of the sale are "as-is" and with a waiver of all warranties,2
including any claim for redhibition or reduction of or return of the purchase price.3
The salesperson shall explain the terms of the sale and obtain the customer's written4
acknowledgment of the terms of the sale. If a used motor vehicle dealer complies5
with the provisions of the Section, the purchaser shall not be entitled to a return of6
the purchase price, a reduction in the purchase price, or a repair of the vehicle7
without payment of the cost of the repair.8
* * *9
(6) Holding and conducting hearings on violations of this Chapter, areas of10
responsibility disputes, mandatory repurchase disputes, imposing civil penalties,11
cease and desist orders, and revocation or suspension of licenses.12
* * *13
G. All fees and charges under the provisions of this Chapter shall be14
collected and received by the executive director of the commission and deposited by15
him in a special fund with the state treasury to be known as the Louisiana Used16
Motor Vehicle and Parts Commission Fund. The proceeds of the fund shall be17
disbursed by him at the direction of the commission in administering and enforcing18
the provisions of this Chapter.19
* * *20
§791. Application for license; fee; educational seminar; bond requirements; liability21
insurance; salesperson's license; location of business22
B.(1) Applications for licenses required under the provisions of this Section23
licensure as a used motor vehicle dealer shall be verified signed by the oath or24
affirmation of the applicant, shall be on forms prescribed by the commission and25
furnished to such applicants, and shall contain such information as the commission26
deems necessary to enable it to fully determine the qualifications and eligibility of27
the several applicants to receive the license or licenses.28
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(4)(a) All bonds and licenses issued under the provisions of this Part shall1
expire on December thirty-first following the date of issue be for the license period2
and shall be nontransferable.3
* * *4
G.(1) Every person, firm, or corporation before being licensed hereunder5
applicant for licensure or renewal of a license as a used motor vehicle dealer shall6
show proof of responsibility by depositing with the commission a continuing bond7
in the amount required herein: 8
(a) of twenty Twenty thousand dollars if the applicant sold less than one9
hundred and twenty vehicles during the twelve month period preceding the licensure10
period.11
(b) Thirty-five thousand dollars if the applicant sold one hundred and twenty12
or more vehicles during the twelve month period preceding the licensure period.13
(c) All bonds shall be with a commercial surety thereon of a company14
authorized to do business in the state, which bond shall be approved by the15
commission, payable to the state of Louisiana through the commission, and shall be16
conditioned upon faithful observance of all laws regulated by the commission,17
including but not limited to laws relating to penalties and hearing costs and to the18
proper disposition of licenses, tags, or titles, and shall also indemnify any person19
who suffers any loss by reason of a failure to observe the provisions of the law20
relating to sales tax, licenses, tags, or titles and shall also indemnify any person who21
suffers any loss, damages, and expenses by reason of a failure to deliver title and for22
the proper disposition of all taxes, licenses, and registration fees.23
* * *24
J.(1) Any new applicants Applicants for a license issued licensure pursuant25
to this Part, other than a used motor vehicle dealer's license, who have not been26
previously licensed prior to January 1, 2004, shall submit such evidence as the27
commission shall prescribe, documenting that either the applicant or his general28
manager, office manager, title clerk, or other responsible representative of the29 HLS 10RS-1503 ORIGINAL
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applicant has attended a four-hour educational seminar or has registered to attend1
such seminar within sixty days after issuance of the license.2
(2) Every person licensed pursuant to this Part prior to January 1, 2004, shall3
submit such evidence as the commission shall prescribe, documenting that either the4
person licensed or his general manager, office manager, title clerk, or other5
responsible representative of the person licensed has attended a four-hour6
educational seminar prior to August 15, 2004.7
§792. Denial, revocation, or suspension of license; grounds; unauthorized acts8
A. Except as otherwise provided in this Section, the commission may deny9
an application for a license as a used motor vehicle dealer, dealer in used parts or10
used accessories of motor vehicles, used motor vehicle auctioneer, or salesperson for11
any of the following reasons:12
* * *13
B. The commission may revoke or suspend a license, issue a fine or penalty,14
or enjoin a used motor vehicle dealer, dealer in used parts or used accessories of15
motor vehicles, used motor vehicle auctioneer, or salesperson for any of the16
following conduct:17
* * *18
§794. Used motor vehicle auctions; unlawful acts19
A. It shall be unlawful and constitute a violation of this Chapter for any used20
motor vehicle auction to:21
(1) Fail to comply with the licensing requirements of this Chapter.22
(2) Fail to comply with any provision of this Chapter, any provision relating23
to the proper disposition of license tags or registrations, transfers of title, or payment24
of sales taxes connection with the purchase or sale of any new or used motor vehicle,25
or with any rule or regulation adopted and promulgated by the commission pursuant26
to the authority vested in it by this Chapter.27
(3) Permit any person other than a licensed dealer or a salesperson who holds28
a current authorization to bid for a licensed dealer, to bid, offer to bid, participate in29 HLS 10RS-1503 ORIGINAL
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the bid process, purchase, or offer to purchase a used motor vehicle placed up for bid1
at the auction.2
(4) Accept cash for a sale from anyone other than a licensed dealer or his3
agent.4
(5) Permit any person other than a mechanic or technical expert to5
accompany a licensed dealer to inspect used motor vehicles prior to the vehicle being6
placed up for bid at the auction.7
(6) Fail to disclose that a sale took place off the block or out of the auction8
ring by providing red-stamped verification on the auction bill of sale or invoice, with9
the lettering on the stamp to be no less than half-inch print size.10
(7) Fail to implement, within six months, following the effective date of this11
Section, an audio video recording system which will properly verify sales occurring12
in the lanes at the auction and fail to maintain those video recordings for at least13
thirty days following the sale.14
(8) Fail to use an industry-recognized damage classification system for all15
vehicles sold at auction.16
(9) Engage in fraudulent activity in the auction process.17
B. Any violation of this Section shall constitute grounds for suspension,18
revocation, or refusal to issue or renew any license or permit issued by the19
commission.20
C. Any licensee who violates any of the provisions of this Section may be21
subject to an injunction under R.S. 32:786 and fines and penalties provided in R.S.22
32:788.23
* * *24
§802. License required; application; fee; duration25
* * *26
D.(1) In addition to the items required to be submitted by applicants for27
licensure pursuant to Subsection C of this Section, such applicants who have not28
been licensed prior to January 1, 2004, shall also submit such evidence as the29 HLS 10RS-1503 ORIGINAL
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commission shall prescribe, documenting that either the applicant or his general1
manager, office manager, title clerk, or other responsible representative of the2
applicant has attended a four-hour educational seminar or has registered to attend3
such seminar within sixty days after issuance of the license.4
(2) Every person licensed pursuant to Subsection C of this Section prior to5
January 1, 2004, shall submit such evidence as the commission shall prescribe,6
documenting that either the person licensed or his general manager, office manager,7
title clerk, or other responsible representative of the person licensed has attended a8
four-hour educational seminar prior to August 15, 2004.9
* * *10
DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
Waddell HB No. 1189
Abstract: Authorizes the sale of a used motor vehicle "as is". Amends the procedure and
requirements for licensure by the Used Motor Vehicle Commission. Provides for
unlawful actions during a used motor vehicle auction.
Present law defines "used motor vehicle dealer" as any person who, for a commission or
with intent to make a profit or gain of money or other thing of value, buys, sells, brokers,
exchanges, rents with option to purchase, auctions, offers, or attempts to negotiate a sale or
exchange of an interest in used motor vehicles and who is engaged wholly or in part in the
business of buying and selling used motor vehicles, whether such motor vehicles are owned
by such person and whether the motor vehicles are sold from a dealership location or via any
form of advertising, including but not limited to the Internet.
Proposed law defines "used motor vehicle dealer" as any person, partnership, corporation,
limited liability company, or other entity who, for a commission or with intent to make a
profit or gain of money or other thing of value, buys, sells, brokers, exchanges, rents with
option to purchase, auctions, offers, or attempts to negotiate a sale or exchange of an interest
in used motor vehicles and who is engaged wholly or in part in the business of buying and
selling used motor vehicles, whether such motor vehicles are owned by such person and
whether the motor vehicles are sold from a dealership location or via any form of
advertising, including but not limited to the Internet.
Present law provides that a person shall be presumed to be engaged in the business of selling
used motor vehicles if he sells 5 or more used motor vehicles in any 12-month period .
Proposed law provides that a person shall be presumed to be engaged in the business of
selling used motor vehicles if he sells 5 or more used motor vehicles in any 12-month period
which vehicles are not registered to and insured by members of the individual's household,
immediate family members or legal entities which the individual has an ownership interest
in or is employed by. An entity shall be presumed to be engaged in the business of selling HLS 10RS-1503 ORIGINAL
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used motor vehicles if the entity sells 5 or more used motor vehicles which are not registered
to and insured by the entity or by an entity affiliated with the entity receiving anything of
value.
Present law provides that the La. Used Motor Vehicle Commission's duties include requiring
all dealer sales to have a condition of sale, such as warranty disclaimer, implied or written
warranty, or a service contract approved by the commission.
Proposed law removes the requirement that the a condition of sale be approved by the
commission.
Proposed law provides that, if a sale of a used motor vehicle is "as-is" and with a waiver of
all warranties, the bill of sale shall include a notice which clearly and unambiguously states
that the terms of the sale are "as-is" and with a waiver of all warranties, including any claim
for redhibition or reduction of or return of the purchase price.
Proposed law requires the salesperson to explain the terms of the sale and obtain the
customer's written acknowledgment of the terms of the sale.
Proposed law provides that, if a used motor vehicle dealer complies with the provisions of
proposed law, the purchaser shall not be entitled to a return of the purchase price, a reduction
in the purchase price or a repair of the vehicle without payment of the cost of the repair.
Present law provides that the commission's powers include holding and conducting hearings
on violations of present law, areas of responsibility disputes, mandatory repurchase disputes,
imposing civil penalties, cease and desist orders, and revocation or suspension of licenses.
Proposed law removes the commission's power to hold and conduct hearings on areas of
responsibility disputes.
Present law requires all fees and charges under the provisions of present law shall be
collected and received by the executive director of the commission and deposited by him in
a special fund with the state treasury to be known as the La. Used Motor Vehicle and Parts
Commission Fund.
Proposed law removes the requirement that the special fund be with the state treasury and
changes the name of the special fund to the La. Used Motor Vehicle Commission Fund.
Present law provides that applications for licenses shall be verified by the oath or affirmation
of the applicant, shall be on forms prescribed by the commission and furnished to such
applicants, and shall contain such information as the commission deems necessary to enable
it to fully determine the qualifications and eligibility of the several applicants to receive the
license or licenses.
Proposed law provides that applications for licensure as a used motor vehicle dealer shall
be signed by the applicant, shall be on forms prescribed by the commission and furnished
to such applicants, and shall contain such information as the commission deems necessary
to enable it to fully determine the qualifications and eligibility of the several applicants to
receive the license or licenses.
Present law provides that all bonds and licenses issued under present law shall expire on
December 31 following the date of issue and shall be nontransferable.
Proposed law provides that all bonds shall be for the license period and shall be
nontransferable.
Present law provides that every person, firm, or corporation before being licensed as a used
motor vehicle dealer shall show proof of responsibility by depositing with the commission HLS 10RS-1503 ORIGINAL
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a continuing bond in the amount of $20,000 with a surety authorized to do business in the
state, which bond shall be approved by the commission, payable to the state of La. through
the commission, and shall be conditioned upon faithful observance of all laws regulated by
the commission, including but not limited to laws relating to penalties and hearing costs and
to the proper disposition of licenses, tags, or titles, and shall also indemnify any person who
suffers any loss by reason of a failure to observe the provisions of the law relating to sales
tax, licenses, tags, or titles and shall also indemnify any person who suffers any loss,
damages, and expenses by reason of a failure to deliver title and for the proper disposition
of all taxes, licenses, and registration fees.
Proposed law provides that every applicant for licensure or renewal of a license as a used
motor vehicle dealer shall show proof of responsibility by depositing with the commission
a continuing bond in the amount required as follows:
(1)$20,000 if the applicant sold less than 120 vehicles during the 12 month period
preceding the licensure period.
(2)$35,000 if the applicant sold 120 or more vehicles during the 12 month period
preceding the licensure period.
(3)All bonds shall be with a commercial surety authorized to do business in the state,
which bond shall be approved by the commission, payable to the state of La. through
the commission, and shall be conditioned upon faithful observance of all laws
regulated by the commission, including but not limited to laws relating to penalties
and hearing costs and to the proper disposition of licenses, tags, or titles, and shall
also indemnify any person who suffers any loss by reason of a failure to observe the
provisions of the law relating to sales tax, licenses, tags, or titles and shall also
indemnify any person who suffers any loss, damages, and expenses by reason of a
failure to deliver title and for the proper disposition of all taxes, licenses, and
registration fees.
Present law requires that any new applicants for a license, other than a used motor vehicle
dealer's license, who have not been previously licensed prior to Jan. 1, 2004, to submit such
evidence as the commission shall prescribe, documenting that either the applicant or his
general manager, office manager, title clerk, or other responsible representative of the
applicant has attended a four-hour educational seminar or has registered to attend such
seminar within 60 days after issuance of the license.
Proposed law removes the required condition that applicants have not been previously
licensed prior to Jan. 1, 2004.
Present law requires that every person licensed prior to Jan. 1, 2004, to submit such evidence
as the commission shall prescribe, documenting that either the person licensed or his general
manager, office manager, title clerk, or other responsible representative of the person
licensed has attended a four-hour educational seminar prior to Aug. 15, 2004.
Proposed law repeals present law.
Present law authorizes the commission to deny an application for a license as a used motor
vehicle dealer or salesperson for any of the following reasons:
(1)On satisfactory proof of unfitness of the applicant under the standards established
present law or in rules or regulations adopted and promulgated by the commission.
(2)Being convicted of a felony crime.
(3)Any material false statement made by the applicant on any application for licensure. HLS 10RS-1503 ORIGINAL
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(4)Where the applicant has, under a previous license, committed a violation of any law
or rule or regulation adopted and promulgated by the commission.
Proposed law adds dealer in used parts or used accessories of motor vehicles, used motor
vehicle auctioneer, or salesperson to the licenses that may be denied by the commission for
any of the enumerated reasons.
Present law authorizes the commission to revoke or suspend a license, issue a fine or
penalty, or enjoin a used motor vehicle dealer or salesperson for any of the following
conduct:
(1)A change of condition after the license has been granted resulting in failure to
maintain the qualifications for licensure, including but not limited to:
(a)Failure to keep an established place of business.
(b)Failure to furnish or keep in force garage liability insurance on any vehicle, except
for trailers, offered for sale and otherwise required under the financial responsibility
laws of this state.
(c)Failure to furnish or keep in force any bond required under present law.
(d)Use of false, misleading, or unsubstantiated advertising in connection with his
business.
(2)Committing a fraudulent act in selling, purchasing, or dealing in used motor vehicles
or misrepresenting the terms and conditions of a sale, purchase, or contract for sale
or purchase of a used motor vehicle or any interest including an option to purchase.
(3)Engaging in his business in such a manner as to cause injury to the public or those
with whom he is dealing.
(4)Knowingly engaging in tampering with, adjusting, altering, changing, setting back,
disconnecting, or failing to connect the odometer of any motor vehicle, or causing
any of the foregoing to occur to an odometer of a used motor vehicle, so as to reflect
a lower mileage than the true mileage driven by the used motor vehicle.
(5)Employing unlicensed salespersons or other unlicensed persons in connection with
the sale of used motor vehicles.
(6)Not operating from the address shown on his license if this change has not been
reported to the commission in either an application for an additional location, or not
restricting the location of the display of motor vehicles exclusively to the address
shown on his license, except pursuant to a permit for an approved off-site display.
(7)Parking vehicles on any public roadway or right-of-way for the purpose of displaying
vehicles for sale.
(8)Engaging in a practice of failing to deliver certificates of title to a consumer within
the time limitations prescribed present law.
(9)Engaging in a practice of failing to submit monthly sales reports to Motor Vehicle
Audit by the 20th day of the following month.
(10)Engaging in a practice of failing to remit sales tax where the tax has been collected
by the dealer. HLS 10RS-1503 ORIGINAL
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(11)Engaging in a practice of leaving the certificate of title open or unassigned to the
dealer.
(12)Engaging in a practice of issuing temporary license plates or temporary dealer's
plates in violation of the law.
(13)Failing to maintain records for a period of up to 3 years.
(14)Repossessing a vehicle in any manner other than what is allowed by law.
(15)Requiring consumers to sign and execute a voluntary surrender or other similar
document at the time of the sale of a used motor vehicle.
Proposed law adds dealer in used parts or used accessories of motor vehicles, used motor
vehicle auctioneer, or salesperson to the licenses that may be revoked or suspended, issued
a fine or penalty, or enjoined by the commission for any of the enumerated reasons.
Proposed law provides that it shall be unlawful and constitute a violation for any used motor
vehicle auction to:
(1)Fail to comply with the licensing requirements.
(2) Fail to comply with any provision relating to the proper disposition of license tags
or registrations, transfers of title, or payment of sales taxes connection with the
purchase or sale of any new or used motor vehicle, or with any rule or regulation
adopted and promulgated by the commission.
(3)Permit any person other than a licensed dealer or a salesperson who holds a current
authorization to bid for a licensed dealer, to bid, offer to bid, participate in the bid
process, purchase or offer to purchase a used motor vehicle placed up for bid at the
auction.
(4)Accept cash for a sale from anyone other than a licensed dealer or his agent.
(5)Permit any person other than a mechanic or technical expert to accompany a licensed
dealer to inspect used motor vehicles prior to the vehicle being placed up for bid at
the auction.
(6)Fail to disclose that a sale took place off the block or out of the auction ring by
providing red-stamped verification on the auction bill of sale or invoice, with the
lettering on the stamp to be no less than half-inch print size.
(7)Fail to implement, within 6 months, following the effective date of proposed law, an
audio video recording system which will properly verify sales occurring in the lanes
at the auction and fail to maintain those video recordings for at least 30 days
following the sale.
(8)Fail to use an industry-recognized damage classification system for all vehicles sold
at auction.
(9)Engage in fraudulent activity in the auction process.
Proposed law provides that any violation of this section shall constitute grounds for
suspension, revocation, or refusal to issue or renew any license or permit issued by the
commission.
Proposed law provides that any licensee who violates any of the provisions proposed law
may be subject to an injunction and civil penalties. HLS 10RS-1503 ORIGINAL
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Present law provides that applicants who have not been licensed as an automotive dismantler
and parts recycler, automotive dismantler and parts recycler salesperson, or motor vehicle
crusher prior to Jan. 1, 2004, shall also submit such evidence as the commission shall
prescribe, documenting that either the applicant or his general manager, office manager, title
clerk, or other responsible representative of the applicant has attended a four-hour
educational seminar or has registered to attend such seminar within 60 days after issuance
of the license.
Proposed law removes the required condition that applicants have not been previously
licensed prior to Jan. 1, 2004.
Present law requires very person licensed as an automotive dismantler and parts recycler,
automotive dismantler and parts recycler salesperson, or motor vehicle crusher prior to Jan.
1, 2004, shall submit such evidence as the commission shall prescribe, documenting that
either the person licensed or his general manager, office manager, title clerk, or other
responsible representative of the person licensed has attended a four-hour educational
seminar prior to Aug. 15, 2004.
Proposed law repeals present law.
(Amends R.S. 32:781(13)(a)(i), 783(F)(3) and (6) and (G), 791(B)(1) and (4)(a), (G)(1), and
(J), 792(A)(intro. para.) and (B)(intro. para.), and 802(D); Adds R.S. 32:794)