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ACT No. 987
Regular Session, 2010
HOUSE BILL NO. 1189
BY REPRESENTATIVE WADDELL AND SENATOR WALSWORTH
AN ACT1
To amend and reenact R.S. 32:781(7) and (13)(a)(i), 783(F)(3) and (6) and (G), 784(A)(4),2
791(A)(1), (B)(1) and (4)(a), (G)(1), and (J), 792(A)(introductory paragraph) and3
(B)(introductory paragraph), and 802(D), (F), and (G) and to enact R.S. 32:781(17)4
and (18), 784(A)(5), (D) and (E), and 794, relative to the Louisiana Used Motor5
Vehicle Commission; to define "used motor vehicle dealer"; to define "public or6
retail motor vehicle auction"; to define "wholesale motor vehicle auction"; to provide7
for the sale of a used motor vehicle "as is"; to provide for the commission's power8
to hold hearings; to establish a license for rental motor vehicle dealers; to authorize9
off-premises permits; to provide for the Louisiana Used Motor Vehicle Commission10
Fund; to provide for application procedures; to provide for expiration of licenses; to11
provide for a bond requirement; to provide for education requirements; to repeal12
expired provisions; to provide for denial of a license; to authorize revocation or13
suspension of a license, issuance of a civil fine or penalty, or injunction for certain14
acts; to provide for wholesale motor vehicle auction violations; to provide for15
suspension, revocation, or refusal of a license or permit for committing an unlawful16
action during a wholesale motor vehicle auction; to authorize an injunction or civil17
fines and penalties for committing an unlawful action during a wholesale motor18
vehicle auction; and to provide for related matters.19
Be it enacted by the Legislature of Louisiana:20
Section 1. R.S. 32:781(7) and (13)(a)(i), 783(F)(3) and (6) and (G), 784(A)(4),21
791(A)(1), (B)(1) and (4)(a), (G)(1), and (J), 792(A)(introductory paragraph) and22
(B)(introductory paragraph), and 802(D), (F), and (G) are hereby amended and reenacted and23 ENROLLEDHB NO. 1189
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R.S. 32:781(17) and (18), 784(A)(5), (D) and (E), and 794 are hereby enacted to read as1
follows: 2
§781. Definitions3
As used in this Chapter:4
* * *5
(7) "Place of business" means the place owned or leased and regularly6
occupied by a person, firm, or partnership, corporation, limited liability company,7
or other entity licensed under the provisions of this Chapter for the principal purpose8
of selling used motor vehicles, crushing, or compacting used motor vehicles and9
selling the crushed or compacted vehicle for scrap, or engaging in the business of a10
dismantler and parts recycler, where the products for sale are displayed and offered11
for sale, and where the books and records required for the conduct of the business are12
maintained and kept.13
* * *14
(13)(a)(i) "Used motor vehicle dealer" means any person , partnership,15
corporation, limited liability company, or other entity who, for a commission or with16
intent to make a profit or gain of money or other thing of value, buys, sells, brokers,17
exchanges, rents with option to purchase, auctions, offers, or attempts to negotiate18
a sale or exchange of an interest in used motor vehicles and who is engaged wholly19
or in part in the business of buying and selling used motor vehicles, whether such20
motor vehicles are owned by such person and whether the motor vehicles are sold21
from a dealership location or via any form of advertising, including but not limited22
to the Internet. A person shall be presumed to be engaged in the business of selling23
used motor vehicles if he sells five or more used motor vehicles in any twelve-month24
period which vehicles are not registered to and insured by members of the25
individual's household, immediate family members, or legal entities which the26
individual has an ownership interest in or is employed by. An entity shall be27
presumed to be engaged in the business of selling used motor vehicles if the entity28 ENROLLEDHB NO. 1189
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sells five or more used motor vehicles which are not registered to and insured by the1
entity or by an entity affiliated with the entity receiving anything of value.2
* * *3
(17) "Public or retail motor vehicle auction" means the act of any person,4
partnership, corporation, limited liability company, or other entity engaging in, for5
a commission, compensation, or other consideration, the business of providing6
vehicle auction services at an established place of business which is not open7
exclusively to motor vehicle dealers, dismantlers, and parts recyclers.8
(18) "Wholesale motor vehicle auction" means the act of any person,9
partnership, corporation, limited liability company, or other entity engaging in, for10
a commission, compensation, or other consideration, the business of providing11
wholesale vehicle auction services at an established place of business which is open12
exclusively to licensed motor vehicle dealers, dismantlers, and parts recyclers.13
* * *14
§783. Used Motor Vehicle Commission; appointment and qualification; terms of15
office; powers and duties16
* * *17
F. The commission's powers and duties shall include but are not limited to18
the following:19
* * *20
(3) Requiring all dealer sales to have a condition of sale, such as warranty21
disclaimer, implied or written warranty, or a service contract approved by the22
commission. If a sale of a used motor vehicle is "as-is" and with a waiver of all23
warranties, the bill of sale shall include a notice which clearly and unambiguously24
states that the terms of the sale are "as-is" and with a waiver of all warranties,25
including any claim for redhibition or reduction of or return of the purchase price.26
The customer shall acknowledge the terms of the sale. An acknowledgment of the27
terms of the sale via acceptance of an electronic notice at any time prior to or as part28
of the transaction shall constitute compliance with this Section. If a used motor29
vehicle dealer complies with the provisions of the Section, the purchaser shall not30 ENROLLEDHB NO. 1189
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be entitled to a return of the purchase price, a reduction in the purchase price, or a1
repair of the vehicle without payment of the cost of the repair.2
* * *3
(6) Holding and conducting hearings on violations of this Chapter, areas of4
responsibility disputes, mandatory repurchase disputes, imposing civil penalties,5
cease and desist orders, and revocation or suspension of licenses.6
* * *7
G. All fees and charges under the provisions of this Chapter shall be8
collected and received by the executive director of the commission and deposited by9
him in a special fund with the state treasury to be known as the Louisiana Used10
Motor Vehicle and Parts Commission Fund. The proceeds of the fund shall be11
disbursed by him at the direction of the commission in administering and enforcing12
the provisions of this Chapter.13
* * *14
§784. Dealers, manufacturers, dismantlers, and distributors auctions to be licensed;15
exception16
A. No person, firm, or corporation, unless licensed to do so by the17
commission under the provisions of this Chapter, shall carry on or conduct the18
business of:19
* * *20
(4) Used Public or retail motor vehicle auctions, wholesale motor vehicle21
auctions, or and salvage pools that deal in used motor vehicles.22
(5) Rental dealer as defined in R.S. 32:793(A)(5).23
* * *24
D. No person, partnership, corporation, limited liability company, or other25
entity licensed by the Louisiana Used Motor Vehicle Commission shall display any26
used motor vehicle at any place other than at a facility licensed by the commission,27
unless an off-premises permit authorizing the display of such used motor vehicle at28
the location has been issued by the commission. The commission may issue one off-29
premises permit to a dealer in any ninety- day period in accordance with rules and30 ENROLLEDHB NO. 1189
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regulations authorizing the display of up to five vehicles at an event within thirty-1
five miles of the dealer's place of business for a period of up to three days.2
* * *3
E. A public or retail motor vehicle auction shall not be required to obtain an4
off-premises permit to auction, via an Internet site, a used motor vehicle for a third5
party which is in the possession of the third party.6
§791. Application for license; fee; educational seminar; bond requirements; liability7
insurance; salesperson's license; location of business8
A.(1) It shall be unlawful and shall constitute a misdemeanor for any person,9
firm, association, corporation, limited liability company, or trust to engage in10
business as, or serve in the capacity of, or act as a used motor vehicle dealer, rental11
dealer, or used motor vehicle salesperson in this state without first obtaining a12
license therefor as provided in this Section.13
* * *14
B.(1) Applications for licenses required under the provisions of this Section15
licensure as a used motor vehicle dealer shall be verified signed by the oath or16
affirmation of the applicant, shall be on forms prescribed by the commission and17
furnished to such applicants, and shall contain such information as the commission18
deems necessary to enable it to fully determine the qualifications and eligibility of19
the several applicants to receive the license or licenses.20
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(4)(a) All bonds and licenses issued under the provisions of this Part shall22
expire on December thirty-first following the date of issue be for the license period23
and shall be nontransferable.24
* * *25
G.(1) Every person, firm, or corporation before being licensed hereunder26
applicant for licensure or renewal of a license as a used motor vehicle dealer shall27
show proof of responsibility by depositing with the commission a continuing bond28
in the amount required herein: 29 ENROLLEDHB NO. 1189
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(a) of twenty Twenty thousand dollars if the applicant sold less than one1
hundred and twenty vehicles during the twelve month period preceding the licensure2
period.3
(b) Thirty-five thousand dollars if the applicant sold one hundred and twenty4
or more vehicles during the twelve month period preceding the licensure period.5
(c) All bonds shall be with a commercial surety thereon of a company6
authorized to do business in the state, which bond shall be approved by the7
commission, payable to the state of Louisiana through the commission, and shall be8
conditioned upon faithful observance of all laws regulated by the commission,9
including but not limited to laws relating to penalties and hearing costs and to the10
proper disposition of licenses, tags, or titles, and shall also indemnify any person11
who suffers any loss by reason of a failure to observe the provisions of the law12
relating to sales tax, licenses, tags, or titles and shall also indemnify any person who13
suffers any loss, damages, and expenses by reason of a failure to deliver title and for14
the proper disposition of all taxes, licenses, and registration fees.15
* * *16
J.(1) Any new applicants Applicants for a license issued licensure pursuant17
to this Part, other than a used motor vehicle dealer's license, who have not been18
previously licensed prior to January 1, 2004, shall submit such evidence as the19
commission shall prescribe, documenting that either the applicant or his general20
manager, office manager, title clerk, or other responsible representative of the21
applicant has attended a four-hour educational seminar or has registered to attend22
such seminar within sixty days after issuance of the license.23
(2) Every person licensed pursuant to this Part prior to January 1, 2004, shall24
submit such evidence as the commission shall prescribe, documenting that either the25
person licensed or his general manager, office manager, title clerk, or other26
responsible representative of the person licensed has attended a four-hour27
educational seminar prior to August 15, 2004.28 ENROLLEDHB NO. 1189
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§792. Denial, revocation, or suspension of license; grounds; unauthorized acts1
A. Except as otherwise provided in this Section, the commission may deny2
an application for a license as a used motor vehicle dealer, dealer in used parts or3
used accessories of motor vehicles, used motor vehicle auctioneer, or salesperson for4
any of the following reasons:5
* * *6
B. The commission may revoke or suspend a license, issue a fine or penalty,7
or enjoin a used motor vehicle dealer, dealer in used parts or used accessories of8
motor vehicles, used motor vehicle auctioneer, or salesperson for any of the9
following conduct:10
* * *11
§794. Wholesale motor vehicle auctions; unlawful acts12
A. It shall be unlawful and constitute a violation of this Chapter for any13
wholesale motor vehicle auction to:14
(1) Fail to comply with the licensing requirements of this Chapter.15
(2) Fail to comply with any provision of this Chapter, any provision relating16
to the proper disposition of license tags or registrations, transfers of title, or payment17
of sales taxes in connection with the purchase or sale of any new or used motor18
vehicle, or with any rule or regulation adopted and promulgated by the commission19
pursuant to the authority vested in it by this Chapter.20
(3) Permit any person other than a licensed dealer or a salesperson who holds21
a current authorization to bid for a licensed dealer, to bid, offer to bid, participate in22
the bid process, purchase, or offer to purchase a used motor vehicle placed up for bid23
at the auction.24
(4) Accept cash for a sale from anyone other than a licensed dealer or his25
agent.26
(5) Permit any person other than a mechanic or technical expert to27
accompany a licensed dealer to inspect used motor vehicles prior to the vehicle being28
placed up for bid at the auction.29 ENROLLEDHB NO. 1189
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(6) Fail to disclose that a sale took place off the block or out of the auction1
ring by providing red-stamped verification on the auction bill of sale or invoice, with2
the lettering on the stamp to be no less than half-inch print size.3
(7) Fail to implement, within six months, following the effective date of this4
Section, an audio video recording system which will properly verify sales occurring5
in the lanes at the auction and fail to maintain those video recordings for at least6
thirty days following the sale.7
(8) Fail to use an industry-recognized damage classification system for all8
vehicles sold at auction.9
(9) Engage in fraudulent activity in the auction process.10
B. Any violation of this Section shall constitute grounds for suspension,11
revocation, or refusal to issue or renew any license or permit issued by the12
commission.13
C. Any licensee who violates any of the provisions of this Section may be14
subject to an injunction under R.S. 32:786 and fines and penalties provided in R.S.15
32:788.16
* * *17
§802. License required; application; fee; duration18
* * *19
D.(1) In addition to the items required to be submitted by applicants for20
licensure pursuant to Subsection C of this Section, such applicants who have not21
been licensed prior to January 1, 2004, shall also submit such evidence as the22
commission shall prescribe, documenting that either the applicant or his general23
manager, office manager, title clerk, or other responsible representative of the24
applicant has attended a four-hour educational seminar or has registered to attend25
such seminar within sixty days after issuance of the license.26
(2) Every person licensed pursuant to Subsection C of this Section prior to27
January 1, 2004, shall submit such evidence as the commission shall prescribe,28
documenting that either the person licensed or his general manager, office manager,29 ENROLLEDHB NO. 1189
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title clerk, or other responsible representative of the person licensed has attended a1
four-hour educational seminar prior to August 15, 2004.2
* * *3
F. All bonds and licenses issued under the provisions of this Part shall expire4
on December thirty-first of each year the date indicated on the license and shall be5
nontransferable.6
G. All applications for renewal of licenses hereunder shall be submitted on7
or before sixty days prior to December thirty-first of each year the expiration date8
indicated on the license. If application has not been made for renewal of licenses,9
such licenses shall expire on December thirty-first of the following year the10
expiration date indicated on the license, and it shall be a violation of this Part for any11
person to represent himself and act thereafter in the capacity and business for which12
he was formerly licensed hereunder.13
* * *14
SPEAKER OF THE HOUSE OF REPRESENTATI VES
PRESIDENT OF THE SENATE
GOVERNOR OF THE STATE OF LOUISIANA
APPROVED: