CLARIFY/AUTO DEALERS REGULATORY REQ.

View NCGA Bill Details2019-2020 Session
Senate Bill 385 (Public) Filed Wednesday, March 27, 2019
AN ACT TO CLARIFY MOTOR VEHICLE DEALER REGULATORY REQUIREMENTS.
Intro. by B. Jackson.

Status: Ch. SL 2019-181 (Jul 26 2019)
S 385/S.L. 2019-181

Bill Summaries:

  • Summary date: Jul 29 2019 - More information

    AN ACT TO CLARIFY MOTOR VEHICLE DEALER REGULATORY REQUIREMENTS. SL 2019-181. Enacted July 26, 2019. Effective July 26, 2019.


  • Summary date: Jun 25 2019 - More information

    House committee substitute to the 2nd edition makes the following changes.

    Further amends GS 20-287 to no longer exempt licensed manufacturers, factory branches, distributors, or distributor branches from motor vehicle dealer licensing requirements and fees. Regarding the proposed authorization for sales representatives whose license is pending to engage in supervised activities, more specifically requires the applicant to be actively and directly supervised by a licensed motor vehicle dealer or a licensed sales representative designated by the dealer (previously, did not require a designated representative). Additionally requires the applicant to certify that the applicant has not been previously denied a sales representative license for any dealer or have a felony conviction. Establishes licenses issued to a motor vehicle dealer, manufacturer, factory branch, factory representative, distributor, distributor branch, distributor representative, or wholesaler is not transferable.

    Enacts GS 20-219.5 to establish immunity for motor vehicle dealers and their owners, shareholders, officers, employees, and agents who arrange to provide, provide, or make available to a vehicle purchaser, lessee, or other person any third party motor vehicle history report, so long as any error, omission, or inaccuracy is not based on information provided directly to the preparer of the third party report by that dealer. Defines third party motor vehicle history report to mean any information prepared by a party other than the dealer relating to vehicle ownership or titling history, liens on the vehicle, vehicle service, maintenance and repair history, vehicle condition, or vehicle accident or collision history. 

    Modifies the proposed changes to GS 20-306 to expand the scope of the statute to include sales representative licensure applicants engaged in supervised activities while the application is pending pursuant to GS 20-287, as amended (previously, specified supervised sales representatives who had submitted license applications). Adds to the statute, now allowing a motor vehicle dealer to offer valuable consideration to a person not licensed under the Article for the referral of a customer to the dealer. Limits consideration paid by the motor vehicle dealer to $250 in value per referral and limits the person receiving the consideration to five referral payments from the motor vehicle dealer in the same calendar year. 

    Enacts GS 20-298.1 to establish that a motor vehicle dealer that does not market or extend to a covered borrower a loan or credit transaction covered by specified federal law is not in violation of GS 127-11 (which prohibits private discrimination against military personnel) or otherwise with respect to all transactions entered into on or after October 3, 2016, regardless of whether the motor vehicle dealer markets or extends the loan or credit transaction to other persons who are not covered borrowers. Defines covered borrower by cross-reference to federal law. 

    Amends GS 20-52.1 and GS 20-72, concerning motor vehicle title transfers, to also allow a manager of a dealership to sign the certification to the Division of Motor Vehicles (DMV) regarding the payment of perfected liens on the vehicle and that the motor vehicle dealer was unable to obtain the vehicle's original or certificate of title (previously, limited to the dealer principal, general manager, general sales manager, controller, or owner). Amends GS 20-72.1 to eliminate the time periods specified for requesting duplicate titles for the sale of new and used vehicles. Regarding a purchaser's option to elect to receive liquidated damages due to a dealer's failure to deliver the manufacturer's statement of origin or certificate of title, clarifies that the provisions do not prohibit a motor vehicle dealer who pays liquidated damages or other consideration to a vehicle purchaser or lessee from obtaining a release from the purchaser or lessee for any other damages or liability arising out of or related to the sale or lease of the vehicle. Authorizes licensed motor vehicle dealers to sell or transfer a vehicle when the manufacturer's statement of origin or an existing certificate of title is unavailable and the sale or transfer is to a current lessee of the motor vehicle regardless of payment of any residual amount or payoff amount for the vehicle made to the lessor who holds legal title at the time of the sale or transfer. Makes the liquidated damages requirements and sworn certification requirements inapplicable to a motor vehicle sold or transferred to the current lessee of the motor vehicle. 

    Amends GS 20-79.1 to allow second 30-day temporary registration plates to be issued by a dealer upon  showing the vehicle has been sold or leased and the dealer is unable to obtain the vehicle's statement of origin or certificate of title using due diligence to perfect the lien (previously, required a temporary lien to be filed, and did not provide for showing the vehicle has been leased).

    Eliminates the proposed changes to GS 20-288, which added new requirements for applications for new motor vehicle dealer licenses. 

    Eliminates proposed GS 20-2, which established that any rule, change in law, or other action applicable to motor vehicles sold or leased by a motor vehicle dealer only applies to sales or leases made on or after the effective date of changes, regardless of the date of submission of a title and registration application for the motor vehicle to the DMV. 


  • Summary date: May 2 2019 - More information

    Senate committee substitute to the 1st edition makes the following changes.

    Modifies the proposed changes to GS 20-288(a) to remove the requirements for the Division of Motor Vehicles (DMV) to publish notice in the NC Register of any license renewal applications submitted by a manufacturer, factory branch, factory representative, distributor, distributor branch, distributor representative, or wholesaler. Makes conforming changes.

    Eliminates proposed GS 20-58.4(b1), which made a secured party who fails or refuses to release a security interest or mail or deliver the certificate of title and release in compliance with the statute liable for all costs, damages, and expenses incurred by the titled owner or person satisfying the lien in any suit brought in North Carolina for cancellation of the security interest, as well as made the secured party liable to the DMV for a $500 civil penalty.

    Makes conforming organizational changes.


  • Summary date: Mar 27 2019 - More information

    Amends GS 20-287, permitting an individual who has submitted an application to the Division of Motor Vehicles (DMV) for a sales representative license under GS 20-288(a) to engage in activities as a sales representative while the application is pending so long as the individual is actively and directly supervised by a licensed motor vehicle dealer or a licensed sales representative. Makes conforming changes to add any supervised sales representative who has submitted an application for licensure to the scope of the prohibitions set out in GS 20-306, regarding unlawful transactions, as specified. 

    Amends GS 20-288, adding new requirements for applications for new motor vehicle dealer licenses, including requiring the application to be accompanied by an application for a dealer license plate, and for the applicant to certify whether the applicant or any parent, subsidiary, affiliate, or any other entity related to the applicant is a manufacturer, factory branch, factory representative, distributor, distributor branch, distributor representative, or wholesaler, and if so, whether the applicant contends it qualifies for a motor vehicle dealer license under any exception to the prohibition on issuance of the license to any manufacturer and the like under GS 20-305.2(a).

    Adds a similar certification requirement for applications for used motor vehicle dealer licenses, requiring the applicant to certify whether the applicant or any entity having common ownership or affiliation with the applicant is a motor vehicle manufacturer, factory branch, factory representative, distributor, distributor branch, distributor representative, or wholesaler, and if so, whether the applicant contends it qualifies for a motor vehicle dealer license under any exception to the prohibition on issuance of the license to any manufacturer and the like under GS 20-305.2(a).

    Now requires the DMV to publish notice in the NC Register upon submission of any license application or renewal application by a manufacturer, factory branch, factory representative, distributor, distributor branch, distributor representative, or wholesaler. Details requirements of the notice, and prohibits the DMV from approving or issuing a license or renewal to such an entity earlier than 15 days from the date the notice of the license or renewal application was published.

    Amends GS 20-58.4, making a secured party who fails or refuses to release a security interest or mail or deliver the certificate of title and release in compliance with subsections (a), (a1), or (b) of the statute (which provides for release and delivery of certificate of title upon satisfaction or other discharge of the security interest) now liable for all costs, damages, and expenses, including reasonable attorneys' fees, lawfully incurred by the titled owner or person satisfying the lien in any suit brought in NC for cancellation of the security interest. Additionally makes the secured party liable to the DMV for a $500 civil penalty.

    Amends GS 20-2, establishing that any rule, change in law, or other action applicable to motor vehicles sold or leased by a motor vehicle dealer only applies to sales or leases made on or after the effective date of changes, regardless of the date of submission of a title and registration application for the motor vehicle to the DMV. Adds that no new or adjusted fee or tax levied, new or amended form prescribed by the DMV, or any other change under GS Chapter 20 applies to a motor vehicle sale or lease made prior to the effective date of the new or adjusted fee or tax, new or amended form prescribed by the DMV, or other change.


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