H*3047(Rat #0203, Act #0118 of 1983)  General Bill, By D.L. Ogburn and W.R. Lee
 A Bill to amend Sections 56-3-20 and 56-19-10, both as amended, Code of Laws
 of South Carolina, 1976, relating to registrations and licensing of motor
 vehicles and to protection of titles to and interests in motor vehicles, so as
 to provide that "dealer" and "motor vehicles dealer" mean both "dealer" and
 "wholesaler" as defined in Chapter 15 of Title 56 and to strike the term and
 definition of "established place of business"; to amend Section 56-3-2320, as
 amended, relating to dealer demonstration license plates so as to provide for
 the provisions of the Section to apply to licensed motor vehicle dealers or
 wholesalers, to provide that dealer or wholesaler plates may not be used to
 operate wreckers in use by the dealer nor to operate vehicles owned by the
 dealer and wholesaler that are leased or rented by the public, to provide for
 the Department to make a distinction between dealer tags and wholesaler tags,
 to provide for a limitation on the number of plates which may be issued to a
 dealer or wholesaler, to provide for each dealer or wholesaler plate to cost
 twenty dollars, and to delete the provisions relating to dealer demonstration
 plates; to amend Section 56-15-10, relating to regulation of manufacturers,
 distributors, and dealers of motor vehicles, so as to delete any reference to
 "wholesaler" and "used motor vehicles" in the definitions of "distributor
 branch", "distributor representative", "distributor", and "motor vehicle
 dealer", to include the term "dealer" in the definition of "motor vehicle
 dealer" and to provide a separate definition of "wholesaler" and "motor
 vehicle wholesaler"; to amend Chapter 15 of Title 56 by designating Sections
 56-15-10 through 56-15-130 as Article 1; to amend Chapter 15 of Title 50 by
 adding Article 3 so as to establish requirements for issuing licenses to motor
 vehicle dealers and wholesalers, to establish the grounds for denying,
 suspending, or revoking the licenses and to authorize the Department of
 Highways and Public Transportation to promulgate necessary regulations; and to
 repeal Sections 56-3-800, relating to the fee for dealer demonstration license
 plates, 56-3-2310, relating to motor vehicle dealer's license, and 56-3-2330,
 relating to the required records of motor vehicle dealers.

   05/04/83  House  Introduced and read first time HJ-2551
   05/04/83  House  Referred to Committee on Education and Public
                     Works HJ-2552
   05/19/83  House  Committee report: Favorable Education and Public
                     Works HJ-2959
   05/25/83  House  Read second time HJ-3081
   05/26/83  House  Read third time and sent to Senate HJ-3139
   05/26/83  Senate Introduced, read first time, placed on calendar
                     without reference SJ-1509
   06/02/83  Senate Read second time SJ-1762
   06/03/83  Senate Read third time and enrolled SJ-1849
   06/09/83         Ratified R 203
   06/15/83         Signed By Governor
   06/15/83         Effective date 01/01/84
   06/15/83         Act No. 118
   06/24/83         Copies available

    AN ACT TO AMEND SECTIONS 56-3-20 AND 56-19-10, BOTH AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO REGISTRATION AND LICENSING OF MOTOR VEHICLES AND TO PROTECTION OF TITLES TO AND INTERESTS IN MOTOR VEHICLES, SO AS TO PROVIDE THAT "DEALER" AND "MOTOR VEHICLES DEALER" MEAN BOTH "DEALER" AND "WHOLESALER" AS DEFINED IN CHAPTER 15 OF TITLE 56 AND TO STRIKE THE TERM AND DEFINITION OF "ESTABLISHED PLACE OF BUSINESS"; TO AMEND SECTION 56-3-2320, AS AMENDED, RELATING TO DEALER DEMONSTRATION LICENSE PLATES SO AS TO PROVIDE FOR THE PROVISIONS OF THE SECTION TO APPLY TO LICENSED MOTOR VEHICLE DEALERS OR WHOLESALERS, TO PROVIDE THAT DEALER OR WHOLESALER PLATES MAY NOT BE USED TO OPERATE WRECKERS IN USE BY THE DEALER NOR TO OPERATE VEHICLES OWNED BY THE DEALER AND WHOLESALER THAT ARE LEASED OR RENTED BY THE PUBLIC, TO PROVIDE FOR THE DEPARTMENT TO MAKE A DISTINCTION BETWEEN DEALER TAGS AND WHOLESALER TAGS, TO PROVIDE FOR A LIMITATION ON THE NUMBER OF PLATES WHICH MAY BE ISSUED TO A DEALER OR WHOLESALER, TO PROVIDE FOR EACH DEALER OR WHOLESALER PLATE TO COST TWENTY DOLLARS, AND TO DELETE THE PROVISIONS RELATING TO DEALER DEMONSTRATION PLATES; TO AMEND SECTION 56-15-10, RELATING TO REGULATION OF MANUFACTURERS, DISTRIBUTORS, AND DEALERS OF MOTOR VEHICLES, SO AS TO DELETE ANY REFERENCE TO "WHOLESALER" AND "USED MOTOR VEHICLES" IN THE DEFINITIONS OF "DISTRIBUTOR BRANCH", "DISTRIBUTOR REPRESENTATIVE", "DISTRIBUTOR", AND "MOTOR VEHICLE DEALER", TO INCLUDE THE TERM "DEALER" IN THE DEFINITION OF "MOTOR VEHICLE DEALER" AND TO PROVIDE A SEPARATE DEFINITION OF "WHOLESALER" AND "MOTOR VEHICLE WHOLESALER"; TO AMEND CHAPTER 15 OF TITLE 56 BY DESIGNATING SECTIONS 56-15-10 THROUGH 56-15-130 AS ARTICLE 1; TO AMEND CHAPTER 15 OF TITLE 50 BY ADDING ARTICLE 3 SO AS TO ESTABLISH REQUIREMENTS FOR ISSUING LICENSES TO MOTOR VEHICLE DEALERS AND WHOLESALERS, TO ESTABLISH THE GROUNDS FOR DENYING, SUSPENDING, OR REVOKING THE LICENSES AND TO AUTHORIZE THE DEPARTMENT OF HIGHWAYS AND PUBLIC TRANSPORTATION TO PROMULGATE NECESSARY REGULATIONS; AND TO REPEAL SECTIONS 56-3-800, RELATING TO THE FEE FOR DEALER DEMONSTRATION LICENSE PLATES, 56-3-2310, RELATING TO MOTOR VEHICLE DEALER'S LICENSE, AND 56-3-2330, RELATING TO THE REQUIRED RECORDS OF MOTOR VEHICLE DEALERS.

Be it enacted by the General Assembly of the State of South Carolina:
    Definition
SECTION 1. Item (24) of Section 56-3-20 of the 1976 Code is amended to read:
"(24) 'Dealer' or 'motor vehicle dealer': Both 'dealer' and 'wholesaler' as defined in Chapter 15 of this title;"
    Item deleted
SECTION 2. Section 56-3-20 of the 1976 Code, as last amended by Act 385 of 1980, is further amended by deleting item (25).
    Department may issue plates - conditions
SECTION 3. Section 56-3-2320 of the 1976 Code, as last amended by Act 396 of 1980, is further amended to read:
"Section 56-3-2320. The Department may issue to a duly licensed motor vehicle dealer or wholesaler, upon application being made and the required fee being paid to the Department, dealer or wholesaler license plates. The license plates, notwithstanding any provision of this chapter to the contrary, may be used exclusively on motor vehicles owned by the dealer or wholesaler. Dealer or wholesaler plates may not be used to operate wreckers in use by the dealer or wholesaler, nor to operate vehicles owned by the dealer and wholesaler that are leased or rented by the public.
    The Department shall make a distinction between dealer tags and wholesaler tags. No dealer or wholesaler may be issued more than six plates or the number equal to the average number of employees of the dealership during the preceding year, whichever is greater. For good cause shown, the Department in its discretion may issue extra plates.
    The cost of each dealer or wholesaler plate issued is twenty dollars.
    For purposes of this section, the testing or demonstration of a truck as defined in Section 56-3-20(10) includes permitting a prospective buyer to use the truck for carrying merchandise or cargo for a period not to exceed three days upon the dealer providing the buyer with a special demonstration certificate for this purpose. The form and content of the demonstration certificate must be as prescribed by regulation of the Department which shall also provide certificates to dealers upon their request. The original certificate must be kept by the buyer in the cab of the truck during the three-day demonstration period, and the dealer shall retain a copy of the certificate and shall also mail a copy of the certificate to the Department within twenty-four hours after it is issued to the buyer."
    Definition
SECTION 4. Item (d) of Section 56-15-10 of the 1976 Code is amended to read:
"(d) 'Distributor branch', a branch office maintained by a distributor who or which sells or distributes new motor vehicles to motor vehicle dealers."
    Definition
SECTION 5. Item (f) of Section 56-15-10 of the 1976 Code is amended to read:
"(f) 'Distributor representative', a representative employed by a distributor branch or distributor ."
    Definition
SECTION 6. Item (g) of Section 56-15-10 of the 1976 Code is amended to read:
"(g) 'Distributor', any person who sells or distributes new motor vehicles to motor vehicle dealers or who maintains distributor representatives within the State."
    Definitions
SECTION 7. Item (h) of Section 56-15-10 of the 1976 Code is amended to read:
"(h) 'Dealer' or 'motor vehicle dealer', any person who sells or attempts to effect the sale of any motor vehicle. These terms do not include:
        (1) distributors or wholesalers.
        (2) receivers, trustees, administrators, executors, guardians or other persons appointed by or acting under the judgment or order of any court.
        (3) public officers while performing their official duties.
        (4) persons disposing of motor vehicles acquired for their own use and so used in good faith and not for the purpose of avoiding the provisions of law. Any person who effects or attempts to effect the sale of more than five motor vehicles in any one calendar year is considered a dealer or wholesaler, as appropriate, for purposes of this chapter.
    (5) finance companies or other financial institutions who sell repossessed motor vehicles and insurance companies who sell motor vehicles they own as an incident to payments made under policies of insurance."
    Definition
SECTION 8. Section 56-15-10 of the 1976 Code is amended by adding:
"(p) 'Wholesaler' or 'motor vehicle wholesaler', any person who sells or attempts to effect the sale of any used motor vehicle exclusively to motor vehicle dealers or to other wholesalers."
    Definitions
SECTION 9. Item (4) of Section 56-19-10 of the 1976 Code is amended to read:
"(4) 'Dealer' or 'motor vehicle dealer': Both 'dealer' and 'wholesaler', as defined in Chapter 15 of this title."
    Item deleted
SECTION 10. Section 56-19-10 of the 1976 Code, as last amended by Act 385 of 1980, is further amended by deleting item (8).
    Code sections designated
SECTION 11. Chapter 15 of Title 56 of the 1976 Code is amended by designating Sections 56-15-10 through 56-15-130 as Article 1, to be entitled "General Provisions".
    Dealer or wholesaler licenses
SECTION 12. Chapter 15 of Title 56 of the 1976 Code is amended by adding:
"ARTICLE 3
DEALER OR WHOLESALER LICENSES
Section 56-15-310. (1) Before engaging in business as a dealer or wholesaler in this State, every person must first make application to the Department for a license. Every license issued expires on December thirty-first next following the date of issuance and must be prominently displayed at the established place of business. The fee for the license is fifty dollars. The license applies to only one place of business of the applicant and is not transferable to any other person or place of business.
    (2) Any person failing to secure a license as required in this chapter is guilty of a misdemeanor and upon conviction must be punished:
        (a) By a fine of not less than fifty dollars nor more than two hundred dollars or imprisonment for not more than thirty days for the first offense.
        (b) By a fine of not less than two hundred dollars nor more than one thousand dollars or imprisonment for not more than six months, or both, for the second offense.
        (c) By a fine of not less than one thousand dollars nor more than ten thousand dollars or imprisonment for not more than two years, or both, for the third or any subsequent offense.
    For purposes of this section, the sale of each motor vehicle constitutes a separate offense.
Section 56-15-320. (1) Before any license as a 'wholesaler' or 'dealer' is issued to an applicant, he must file an application with the Department and furnish the information the Department may require, including, but not limited to, information adequately identifying by name and address any individual who owns or controls ten percent or more of the interest in the business. The policy of this section is full disclosure.
    (2) Each applicant for licensure as a dealer or wholesaler must furnish a surety bond in the penal amount of fifteen thousand dollars on a form to be prescribed by the director of the Motor Vehicle Division of the Department. The bond must be given to the Department and executed by the applicant, as principal, and by a corporate surety company authorized to do business in this State, as surety. The bond must be conditioned upon the applicant or licensee complying with the provisions of the statutes applicable to the license and as indemnification for any loss or damage suffered by an owner of a motor vehicle, or his legal representative, by reason of any fraud practiced or fraudulent representation made in connection with the sale or transfer of a motor vehicle by a licensed dealer or wholesaler or the dealer's or wholesaler's agent acting for the dealer or wholesaler or within the scope of employment of the agent or any loss or damage suffered by reason of the violation by the dealer or wholesaler or his agent, of any of the provisions of this chapter. An owner or his legal representative, who suffers the loss or damage has a right of action against the dealer or wholesaler and against the dealer's or wholesaler's surety upon the bond and may recover damages as provided in this chapter. A new bond or a proper continuation certificate must be delivered to the Department annually before the license is renewed. However, regardless of the number of years a bond remains in effect, the aggregate liability of the surety for any and all claims is limited to fifteen thousand dollars on each bond and to the amount of the actual loss incurred. The surety has the right to terminate its liability under the bond by giving the Department thirty days' written notice of its intent to cancel the bond. The cancellation does not affect any liability incurred or accrued prior to the cancellation.
    (3) If, during any license year, there is any change in the information that a dealer or wholesaler gave the Department in obtaining or retaining a license under this section, the licensee shall report the change to the Department within thirty days after the change occurs on the form the Department requires.
    (4) In the event a licensee ceases being a dealer or wholesaler, he shall, within ten days thereafter, notify the Department of this fact and return to the Department any license issued pursuant to this chapter and all current dealer license plates issued to the dealer or wholesaler.
Section 56-15-330. No dealer may be issued or allowed to maintain a motor vehicle dealer's license unless:
    (1) The dealer maintains a bona fide established place of business for conducting the business of selling or exchanging motor vehicles which must be the principal business conducted from the fixed location. The sale of motorcycles or motor driven cycles need not be the principal business conducted from the fixed location. A bona fide established place of business for any motor vehicle dealer includes a permanent, enclosed building or structure, not excluding a permanently installed mobile home containing at least ninety-six square feet of floor space, actually occupied by the applicant and easily accessible by the public, at which a permanent business of bartering, trading, or selling of motor vehicles or displaying vehicles for bartering, trading, or selling is carried on, wherein the public may contact the owner or operator at all reasonable times and in which must be kept and maintained the books, records, and files required by this chapter. A bona fide established place of business does not mean a residence, tent, temporary stand, or other temporary quarters.
    (2) The dealer's place of business must display a permanent sign with letters at least six inches in height, clearly readable from the nearest major avenue of traffic. The sign must clearly identify the licensed business.
    (3) The dealer's place of business must have a reasonable area or lot to properly display motor vehicles.
Section 56-15-340. (1) Every dealer or wholesaler shall keep complete records of each transaction under which a motor vehicle is transferred for a period of not less than four years from the date of the transaction. The records must show the true name and correct address of the person or persons from whom the motor vehicle was acquired and the date of the transaction; a correct description of the vehicle, when transferred; the true name and correct address of the person to whom the motor vehicle was transferred; and the date of the transaction. The description of the motor vehicle must include the vehicle identification number, make, model, type of body, and the odometer readings at the time the motor vehicle was transferred to and from the dealer or wholesaler. These records must be open at all reasonable times for inspection and copying by the Department or any of its duly authorized agents.
    (2) The records kept by the dealer or wholesaler must be maintained in a reasonably organized and orderly fashion with all entries being legible to the ordinary person upon inspection. Any records which are illegible or incapable of accurate interpretation by either the record keeper or the Department's inspector or agent are not in compliance with this section.
    (3) If any dealer or wholesaler fails to keep the required records or fails to make them available to the Department or its duly authorized agents immediately upon a reasonable request, the dealer or wholesaler is guilty of a misdemeanor and upon conviction must be fined not less than fifty dollars nor more than two hundred dollars or imprisoned for up to thirty days. The failure to keep or to make available to the Department or its duly authorized agents complete records on each separate motor vehicle constitutes a separate offense.
Section 56-15-350. Any license issued under this chapter may be denied, suspended, or revoked, if the applicant or licensee or an agency of the applicant or licensee acting for the applicant or licensee is determined by the Department to have:
    (a) Made a material misstatement in the application for the license;
    (b) Violated any provision of this chapter;
    (c) Been found by a court of competent jurisdiction to have committed any fraud connected with the sale or transfer of a motor vehicle;
    (d) Employed fraudulent devices, methods, or practices in connection with meeting the requirements placed on dealers and wholesalers by the laws of this State;
    (e) Been convicted of any violation of law involving the acquisition or transfer of a title to a motor vehicle or of any violation of law involving tampering with, altering, or removing motor vehicle identification numbers or markings;
    (f) Been found by a court of competent jurisdiction to have violated any federal or state law regarding the disconnecting, resetting, altering, or other unlawful tampering with a motor vehicle odometer, including the provisions of 15 U.S.C. Sections 1981-1991;
    (g) Refused or failed to comply with the Department's reasonable requests to inspect or copy the records, books, and files of the dealer or wholesaler or failed to maintain records of each motor vehicle transaction as required by this chapter or by state and federal law pertaining to odometer records; or
    (h) Given, loaned, or sold a dealer license plate to any person or otherwise to have allowed the use of any dealer license plate in any way not authorized by Section 56-3-2320. Any dealer license plate issued to a dealer or wholesaler pursuant to Section 56-3-2320 which is determined by the Department to be improperly displayed on any vehicle or in the possession of any unauthorized person is prima facie evidence of a violation of this section by the dealer or wholesaler to whom the license plate was originally issued.
    The Department shall notify the licensee or applicant in writing at the mailing address provided in his application of its intention to deny, suspend, or revoke his license at least twenty days in advance and shall provide the licensee an opportunity for a hearing pursuant to the Administrative Procedures Act of this State. A licensee desiring a hearing shall request it in writing within ten days of receiving notice of the proposed denial, suspension, or revocation of his dealer's or wholesaler's license.
    Upon the denial, suspension, or revocation of a license, the licensee shall immediately return to the Department the license and all dealer license plates.
Section 56-15-360. The Department is authorized to promulgate regulations necessary for the enforcement of the provisions of this chapter."
    Repeal
SECTION 13. Sections 56-3-800, 56-3-2310, and 56-3-2330 of the 1976 Code are repealed.
    Severability clause
SECTION 14. If any provision of this act is declared to be invalid or unconstitutional, the declaration does not invalidate the remaining provisions of this act.
    Time effective
SECTION 15. This act shall take effect January 1, 1984.