14-050 Code Vt. R. 14-050-050-X - VERMONT DEALER LICENSING AND SCHEDULE OF PENALTIES AND SUSPENSION

DEFINITIONS

Administrative Penalty shall mean a predetermined monetary penalty, suspension or written warning imposed from the Schedule of Administrative Penalties and Suspensions contained in Part B of this rule. The schedule does not supersede any penalties or sanctions established by statute.

Applicant shall mean a corporation, corporate officer, association, association officer, copartnership including silent partners, company, company officers, firm, officers of a firm, individual, or aggregation of individuals.

Application shall be a form prescribed and furnished by the Commissioner used for initial approval and renewal of dealer licenses and registrations.

Buyers Guide shall mean the vehicle disclosure form required by Federal Regulation.

Commissioner means the Commissioner of Motor Vehicles.

Date of Sale or Time of Sale or Transfer means the date when physical delivery of the vehicle to the purchaser occurs. Dealer shall be the same as defined in 23 V.S.A. § 4(8) and shall include:

* New and Used Car Dealer

* Motorcycle/Moped Dealer

* Farm Equipment Dealer

* Trailer Dealer

* Motorized Highway Building Equipment Dealer

* Finance Dealer

* Auction Dealer

Dealer Business shall include, but not be limited to, the buying, selling, leasing, exchanging, storage or repair of vehicles, selling vehicle accessories or parts, detailing of vehicles or painting of vehicles.

Dealer Records shall be those records required by the Commissioner under 23 V.S.A. Subchapter 4 of Chapter 7 and shall also include bills of sale, odometer disclosure statements, vehicle lease agreements, motor vehicle retail installment contracts, Buyer's Guides, temporary plate logs and in-transit plate logs.

Department shall be the Department of Motor Vehicles.

Engaged in the Business shall be the same meaning as in 23 V.S.A. § 473, except there are no minimum sales standards for other than new and used car dealers.

License Certificate shall be the certificate of designation issued by the Department to the dealer to verify the dealership is properly licensed as a dealer in this state.

Reinstate means to restore any license, certification, registration or privilege issued by the Department to a dealer following the suspension of such designation.

Revoke means to withdraw permanently by formal action of the Commissioner any license, certification, registration or privilege issued or granted by the Commissioner.

Primarily shall mean more than 90% of the gross receipts of the dealer business.

Serious Violation means three or more violations of Category 1, Category 2 or any combination thereof listed in Part B of this rule occurring during any twelve month period.

Suspend means to withdraw temporarily by formal action of the Commissioner any license, certificate, registration or privilege issued or granted by the Commissioner.

Supplemental Documents means information or certifications required by the Commissioner to make a determination of approval/disapproval of an initial application or renewal of a dealer registration and license.

Transporter shall be the same as defined in 23 V.S.A. § 4(42).

Violation shall be those listed in Part B of this rule in Category 1, Category 2, Category 3, and Category 4.

Dealer Licnese Requirements

Part A. DEALER LICNESING

Dealer Licnese Requirements

I Application

A. The application must contain accurate information. All declarations made on the application shall be made under oath. The application must be signed and dated by the applicant. Providing false or inaccurate information can result in denial, refusal, cancellation, suspension and/or prosecution under penalty of 23 V.S.A. § 202.

B. Initial dealer registration shall be for one year, and may be renewed for two (2) years.

C. Supplemental Documents

1. Proof of Zoning Compliance (or signed statement from municipal government agent stating no zoning exists), required for INITIAL application.

2. Proof of compliance with 23 V.S.A. § 800 Maintenance of Financial Responsibility in the minimum amounts of $ 25,000.00 for one person and $ 50,000.00 for two or more persons killed or injured and $ 10,000.00 for damages to property in any one accident. Must be submitted with application.

3. A Bond, Letter of Credit or Certificate of Deposit as required by the rule on Motor Vehicle Dealer Bonds. Must be submitted at time of approval of the dealer/applicant by the Commissioner.

4. Proof of Ownership/Lease of Property for which registration is being applied.

a. a statement that the deed is recorded in the land records of the town including the book and page, or

b. copy of along term lease to cover the period during which the dealer registration will be valid. Leases for a term greater than one year are to be accomplished by a deed that is recorded; 27 V.S.A. § 304.

5. Copy of Vermont Tax Number Certificate. If exempt, the dealer applicant must submit proof of exemption.

6. Applicant shall attest at time of initial and renewal application that he/she is in good standing with the Vermont Tax Department. If not in good standing, applicant will be required to come into good standing before approval will be given by the Commissioner.

7. Applicant shall attest at time of initial and renewal application that he/she is in good standing with the Vermont Office of Child Support. If not in good standing, applicant will be required to come into good standing before approval will be given by the Commissioner.

8. Except for Finance and Auction dealer, a report from a licensed Credit Bureau will be submitted by the dealer applicant with each initial application in addition to a bond, letter of credit or certificate of deposit. Report from a licensed Credit Bureau will not be required for renewal.

9. Initial applications shall be accompanied by both a completed Vermont Dealer's License Background Information form and Authority to Release Information form for each applicant.

10. For New Car Dealers only, a copy of the Franchise Agreement shall accompany the initial application. Renewal application shall require the dealer applicant to attest the Franchise Agreement is still in effect.

D. Conditions for application.

To obtain or retain a dealer license all applicants listed on the application must meet the following requirements:

1. For initial applicants only, has had no previous record of criminal convictions for extortion, forgery, fraud related crimes, larceny or embezzlement in this or any other jurisdiction.

2. Applicant has had no previous record of willful violations of dealer laws or regulations in this or any other jurisdiction.

3. Applicant has had no civil judgments that are the result of willful intent to commit fraud or misrepresentation.

4. Applicant has no history of violations of issuing nonnegotiable, insufficient funds, account closed, or counterfeit checks within the past 5 years.

5. The dealer shall be required to maintain records as defined by this rule.

6. Renewal applicants shall pass a dealer records audit completed by the Commissioner or a representative thereof. The Commissioner may permit dealer applicants to conduct a selfaudit.

7. Renewal applicants for "New" and "Used" car dealers shall sell a minimum of twelve pleasure cars or motor trucks owned but not registered by the applicant during the previous registration year or twenty-four such vehicles within the previous two registration years. Vehicles that are to be scrapped, dismantled or destroyed cannot be included as qualifying vehicles.

8. The dealer shall notify the Commissioner in writing at the time of the change if any changes to any of the individuals listed on the application are made.

9. Finance and Auction Dealer are exempt from the requirements of 1, 2, 3, 4, and 7 above.

II Place of Business

NEW/USED CAR DEALER; FARM EQUIPMENT DEALER; MOTORIZED HIGHWAY BUILDING EQUIPMENT DEALER; MOTORCYCLE/MOPED DEALER; TRAILER DEALER

A. Building Requirements.

1. The building shall be at least 1200 square feet in size. Measurement of the building shall be around the exterior of the building if single level. A multi-level or multi-use building shall be measured on the inside perimeter of all space to be used by the dealership.

2. The space occupied by a dealer within a building shall be used primarily for the dealer business.

3. The building shall contain a heated dealer office area, which shall be separate from any unrelated business quarters and must contain reasonable accommodations to conduct business with the public. Dealer records must be housed and maintained in the dealer office area. The Commissioner may grant written approval for records to be housed and maintained in a building other than the dealer's office if located on the dealer's premises. The dealer license certificate must be displayed in the office area and be visible to the public.

4. If the building is multilevel or multiuse, the dealership must have an entrance that is easily recognizable by the public.

B. Outside Display Area Requirements.

The outside display area must be located in the immediate proximity of the approved building and maintained for display purposes. Dealers owning property on both sides of a public highway located opposite the approved building may use the property for display purposes.

C. Sign Requirements.

A sign, visible to the public, displaying the business or trade name of the dealership must be in place prior to the first anniversary of the licensed dealership.

D. Hours of Operation Requirements.

The dealership shall be open for business a minimum of one-hundred and forty-six (146) six (6) hour days during each registration year. The days and hours of business, some portion of which shall contain a minimum of four (4) consecutive hours between 6 AM and 6 PM, shall be posted in a place visible to the consumer. Finance and Auction Dealer are exempt.

TRANSPORTER

A. Building requirement.

Applicant shall either own or lease a permanent place of business located in this state which is enclosed and heated and shall contain reasonable accommodations to conduct business with the public. Records required by the Department of Motor Vehicles shall be housed and maintained at this location.

B. Hours of Operation requirements.

A Transporter shall post the days and hours of business, some portion of which shall be between the hours of 8 AM and 4 PM, in a place visible to the consumer.

Part B SCHEDULE OF ADMINISTRATIVE PENALTIES AND SUSPENSIONS VIOLATIONS OF STATE DEALER REGULATIONS

I General Information

Administrative Penalty - When such penalty is imposed, it shall be paid by check or certified check at the discretion of the Department, made payable to the Department of Motor Vehicles, and shall be due within 15 calendar days of the date the penalty is imposed. Failure to pay a penalty imposed within the allowed time period shall result in the immediate suspension of the dealer's license(s) and full privileges to act as, or represent oneself as, a licensed dealer until such fine is paid in full.

A person who misrepresents himself or herself as a dealer as defined in this rule or is engaged in the business of the purchasing, selling or exchanging of motor vehicles without having been licensed and registered as a dealer by the Commissioner will be considered in violation of these rules and will be subject to an administrative penalty as provided in this section of the rule.

If a dealer or individual refuses or neglects to pay to the Commissioner the penalty imposed by formal action of the Commissioner, the Commissioner may collect the unpaid administrative penalty by filing a civil action in superior court. If a penalty is not paid to the Commissioner within sixty (60) days after it is imposed, the Commissioner may suspend any license, certificate, registration or permit issued under 23. V.S.A. Subchapter 4 of Chapter 7.

Hearing - If a dealer chooses to contest the imposition and payment of an administrative penalty or order of suspension, he or she shall have a right to a hearing before a hearings examiner of the Agency of Transportation, Transportation Policy and Hearing Section. The dealer must submit a written request to the Agency of Transportation, Transportation Policy and Hearing Section for such hearing postmarked within fifteen (15) days of the date on the department administrative order imposing the penalty. When a hearing is requested, the administrative penalty and any suspension for the violation shall be held in abeyance until the decision of the hearing examiner has been rendered. If the Commissioner has cause to believe the dealer will continue to act in such a manner as to be detrimental to the state or any existing or potential customers, the administrative penalty or suspension shall become effective as indicated in the original order or sooner if warranted.

Inspection of vehicles with dealer plates attached -- A motor vehicle owned by a registered motor vehicle dealer in this state may be operated under such dealer registration without being currently inspected in Vermont for a period not to exceed 15 days from the date of its acquisition or possession by such dealer. An uninspected motor vehicle shall not be used under dealer registration for demonstration purposes nor for the temporary accommodation of a customer of the dealer.

Multiple violations - In the case of multiple violations considered at one time, the Department may impose separate penalties for each violation as required by the schedule. In the case of multiple violations considered at one time, the Department may, at its discretion, direct that any suspensions be served concurrently.

Reinstatement - A dealer suspended for more than six (6) months shall submit a new completed application, required documentation, proof of compliance and the reinstatement fee, before the reinstatement will be considered. A dealer suspended for six (6) months or less time must submit proof of compliance and the reinstatement fee before the reinstatement will be considered; a new application will not be required. Registration fees and an application will be required if the existing dealer registration has expired during the period of suspension.

Revoke - On the effective date of the revocation, an inspector or representative of the Department shall pick up the following items from the dealership: license certificate, all temporary registration plates, all in-transit plates, all metal registration plates and temporary stickers, all dealer registration certificates and plates and any customer registrations in process and accompanying fees due to the state.

Sale of Business following Suspension or Revocation - If a suspended, revoked, or canceled dealership is sold or leased to a new owner, an application from the new owner/applicant will be considered, provided the suspended parties have no vested interest whatsoever in the new dealership. Such person shall not be employed by the new applicant without the permission of the Commissioner.

Second or subsequent violation - Shall be determined on the basis of the date of a previous violation of the same statute or rule within a two-year period.

Suspend - On the effective date of the suspension, an inspector or representative of the Department shall pick up the following items from the dealership: license certificate, all temporary registration plates, all in-transit plates, all metal registration plates and temporary stickers, all dealer registration certificates and plates and any customer registrations in process and accompanying fees due to the state.

Written Warning - Written warnings will be considered in determination of second or subsequent violations. Signature of the dealer or dealer representative on the written warning form acknowledging receipt of same will be required. Refusal by the dealer or dealer representative to sign the form will not set aside the fact the written warning was issued and is in effect.

II INDEX

ADMINISTRATIVE PENALTY AND DURATION OF SUSPENSION

CATEGORY 1
First Viol.	Second Viol.	Third & Subsequent Viol.
$ 500.00	$ 500.00 &	$ 500.00 &
3 days dealer plates	4 day suspension
surrendered to DMV
CATEGORY 2
First Viol.	Second Viol.	Third & Subsequent Viol.
$ 250.00	$ 500.00	$ 500.00 &
4 days suspension
CATEGORY 3
First Viol	Second Viol.	Third & Subsequent Viol.
$ 100.00	$ 150.00	$ 250.00
CATEGORY 4
First Viol.	Second Viol.	Third & Subsequent Viol.
Written Warning	$ 50.00	$ 150.00

III CATEGORY 1

Administrative Penalty and Duration of Suspension:

First Viol.	Second Viol.	Third & Subsequent Viol.
$ 500.00	$ 500.00 &	$ 500.00 &
3 days dealer plates	4 day suspension
surrendered to DMV

Dealer must serve the prescribed suspension before reinstatement.

* a) Misrepresentation of known vehicle defects to purchaser prior to sale;

b) Failure to accurately represent conditions or terms of loan or lease in writing;

c) Fraudulent recording of information or signatures on dealer records or other Department of Motor Vehicle documents;

d) Willfully submitting fraudulent information or documentation on registration, transfer, tax or title documents or other documents submitted for filing;

e) Willful failure to produce dealer records on demand by an inspector, law enforcement officer or other agent of the Commissioner during posted business hours;

* Violation may be referred to the Attorney General's office for action.

IV CATEGORY 2

Administrative penalty and Duration of Suspension:

First Viol.	Second Viol.	Third & Subsequent Viol.
$ 250.00	$ 500.00	$ 500.00 &
4 days suspension

Dealer must serve the prescribed suspension before reinstatement. In addition, for those violations marked with an asterisk (*) the dealer must show proof of compliance before reinstatement will be considered.

a) Failure to accurately represent ownership of a vehicle as indicated in bills of sale, title or similar documents to purchaser;

b) Signing customer's or other person's name without authorization;

c) Failure by dealer to retain records for the required six years;

d) Intentionally charging improper fees or misrepresenting "document" or other similar fees as Department required fees;

e) Charging for the use of dealer vehicle displaying a dealer plate;

f) Failure to immediately notify the Department in writing of a change in name, location, ownership or other required condition of the dealership;

g) Failure to return all Department materials to the Department immediately upon revocation, suspension, cancellation or discontinuance of business;

h) Altering expiration date on any plate or permit;

i) Providing false/inaccurate information or failing to disclose pertinent information on the dealer's application or accompanying paperwork;

* j) For any violation of 32 V.S.A. Chapter 219;

* (All taxes and penalties must be paid prior to reinstatement).

k) Failure to pay off existing lien on vehicle taken in trade as required by the contract with the customer.

V CATEGORY 3

Administrative Penalty and Duration of Suspension:

First Viol.	Second Viol.	Third & Subsequent Viol.
$ 100.00	$ 150.00	$ 250.00

a) Failure to be or remain in compliance with any portion of 23 V.S.A. § 4(8)(42) or any of the conditions as defined in Part A of this rule;

b) For any violation of § 800 - Maintenance of financial responsibility;

c) Issuing the Department a nonnegotiable (bad, insufficient funds, account closed or counterfeit) check;

d) Issuing temporary plate or in-transit permit at other than date of sale;

e) Use of a recovered dealer's registration plate after being reported lost or stolen;

f) Permitting or using customer's returned plates;

g) For any violation of 23 V.S.A. § 453 - Fees and number plates;

h) Failure to maintain dealer records including failure to maintain temporary and in-transit plate logs.

VI CATEGORY 4

Administrative Penalty and Duration of Suspension:

First Viol.	Second Viol.	Third & Subsequent Viol.
Written Warning	$ 50.00	$ 150.00

a) Failure to display "Buyer's Guide" as required by Federal Regulation;

b) Inaccurate, illegible or incomplete recording of information on records retained by the dealer;

c) Improper dealer plate, temporary plate or in-transit permit security;

d) Failure to conspicuously display license certificate;

e) Failure to issue proper type of plate or permit (upon receipt of fees);

f) Failure to assign correct expiration date to plate or permit;

g) Failure to account for voided temporary plate or in-transit permit;

h) Failure to immediately report dealer's registration plate as lost or stolen to the Department;

i) Failure to immediately return recovered lost or stolen dealer's registration plate to the Department;

j) Failure to display proper validation sticker on dealer's registration plate;

k) Failure to provide registration and insurance certificate with the dealer vehicle being used on the public highway;

l) Failure to properly update Dealer's Guide;

m) Use of dealer plate on an unauthorized type of vehicle.

Notes

14-050 Code Vt. R. 14-050-050-X

Effective Date: October 15, 2000 (Secretary of State Rule Log #00-59)

Statutory Authority: 23 V.S.A. §§ 475 and 497