S 0277 General Bill, By Ford
 A BILL TO AMEND TITLE 56 OF THE CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING
 TO MOTOR VEHICLES, SO AS TO CREATE THE MOTOR VEHICLE INDUSTRY LICENSING BOARD,
 TO REGULATE MOTOR VEHICLE AND MOTORCYCLE DEALERS AND SALES PERSONS ENGAGED IN
 BUSINESS IN SOUTH CAROLINA, INCLUDING PROVISIONS RELATING TO ADVERTISING AND
 SALES PRACTICES; TO DEVOLVE THE POWERS AND DUTIES OF THE DEPARTMENT OF PUBLIC
 SAFETY AND THE OFFICE OF ADMINISTRATOR RELATING TO MOTOR VEHICLE AND
 MOTORCYCLE DEALERS AND WHOLESALERS UPON THE BOARD; AND TO AMEND SECTION
 40-29-240, RELATING TO PROHIBITED ACTS RELATING TO THE SALE OF MANUFACTURED
 HOUSING, SO AS TO PROHIBIT CERTAIN ADVERTISING AND SALES PRACTICES.

   11/14/94  Senate Prefiled
   11/14/94  Senate Referred to Committee on Labor, Commerce and Industry
   01/10/95  Senate Introduced and read first time SJ-118
   01/10/95  Senate Referred to Committee on Labor, Commerce and
                     Industry SJ-118

A BILL

TO AMEND TITLE 56 OF THE CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO MOTOR VEHICLES, SO AS TO CREATE THE MOTOR VEHICLE INDUSTRY LICENSING BOARD, TO REGULATE MOTOR VEHICLE AND MOTORCYCLE DEALERS AND SALES PERSONS ENGAGED IN BUSINESS IN SOUTH CAROLINA, INCLUDING PROVISIONS RELATING TO ADVERTISING AND SALES PRACTICES; TO DEVOLVE THE POWERS AND DUTIES OF THE DEPARTMENT OF PUBLIC SAFETY AND THE OFFICE OF ADMINISTRATOR RELATING TO MOTOR VEHICLE AND MOTORCYCLE DEALERS AND WHOLESALERS UPON THE BOARD; AND TO AMEND SECTION 40-29-240, RELATING TO PROHIBITED ACTS RELATING TO THE SALE OF MANUFACTURED HOUSING, SO AS TO PROHIBIT CERTAIN ADVERTISING AND SALES PRACTICES.

Be it enacted by the General Assembly of the State of South Carolina:

SECTION 1. The General Assembly finds and declares that the distribution and sales of motor vehicles, motorcycles, and manufactured home in the State of South Carolina vitally affects the general economy of the state, the public interest, the public welfare, and public safety and that in order to promote the public interest and the public welfare and in the exercise of its police power, it is necessary to regulate motor vehicle, motorcycle, and manufactured home wholesalers, dealers, and their representatives doing business in this State. The purpose of this act is to protect the consumer from false, misleading or deceptive practices by those individuals or entities.

SECTION 2. Title 56 of the 1976 Code is amended by adding:

Section 56-13-10. (1) There is hereby established the South Carolina Motor Vehicle Industry Licensing Board which shall consist of six members, one elected from each congressional district by the General Assembly, and a chairman, appointed from the state at-large by the Governor with the advice and consent of the Senate. The members of the board shall serve for terms of four years and until their successors are appointed and qualify. In the event of a vacancy on the board, the Governor shall fill such vacancy by appointing a member to serve during the unexpired term of the member whose office has become vacant. If the General Assembly is not in session all appointments including appointments to fill a vacancy shall be temporary appointments until the next meeting of the General Assembly when the Governor shall nominate some person to fill the office. Any person so nominated who is confirmed by the General Assembly shall hold his office during the remainder of the term. No appointed person may act as a member of the board while holding any other elective or appointive state or federal office. No member appointed shall serve more than two consecutive terms. The action of the majority of the members of the board shall be deemed the action of the board. No member of the board shall participate in any manner in a proceeding before the board involving his licensed business.

Section 56-13-20. (A) The board shall have full power to:

(1) exercise all those powers and duties with regards to Chapters 15 and 16 of Title 56 previously exercised by the Department of Public Safety and the Office of Administrator within the Office of the Attorney General;

(2) regulate the issuance and revocation of licenses in accordance with and subject to sections 56-15-310, 56-15-350, 56-16-140 and 56-16-180;

(3) perform all acts and duties provided for in this chapter and in Chapters 15 and 16, Title 56 necessary to the administration and enforcement of such chapters; and

(4) promulgate and enforce rules and regulations relating to the administration of this chapter and Chapters 15 and 16 of Title 56.

(B) The board shall adopt a seal, which may be either an engraved or ink stamp seal, with the words South Carolina Motor Vehicle Industry Licensing Board and such other devices as the board may desire included thereon by which it shall authenticate the acts of its office. Copies of all records and papers in the office of the board, under the hand and seal of its office, shall be received in evidence in all cases equally and with like effect as the original.

(C) Investigators employed by the board are hereby given authority to inspect any vehicles or motorcycles found in any licensed motor vehicle or motorcycle dealer's established place or places of business.

Section 56-13-30. No person shall engage in the business as or serve in the capacity of, or act as a motor vehicle or motorcycle dealer, wholesaler, or salesperson in this state without being licensed by the board under the provisions of this chapter and of Chapters 15 and 16 of Title 56. No salesperson's license shall be issued to any person under the age of sixteen, and no dealer's license shall be issued to any minor. A license issued by the board shall authorize the holder thereof to engage in the business or activities permitted by the license.

Section 56-13-40. (A) The board shall have the authority to employ an executive director who shall direct and administer the affairs of the board and who shall keep a record of all proceedings, transactions, communications, and official acts of the board. The executive director shall be custodian of all records of the board and perform such other duties as the board may require. The executive director shall call a meeting of the board at the direction of the chairperson thereof or upon a written request of two or more members thereof. The executive director may employ an attorney and such other employees as may be necessary to properly carry out functions under this chapter and may make such other expenditures as are necessary to properly carry out this chapter. The executive director shall be the board's representative in the administration of this chapter and he or she shall insure that the policies and directives of the board are carried out.

(B) The Attorney General shall render to the board opinions on all questions of law, relating to the interpretation of the provisions of this act or arising in the administration thereof. He shall act as attorney for the board in all actions and proceedings brought by or against it under or pursuant to any of the provisions of this act; provided, all fees and expenses of the Attorney General shall be paid out of the South Carolina Motor Vehicle Dealers Licensing Fund.

Section 56-13-50. Licenses issued by the board under this chapter shall be of the classes hereinafter set out and shall permit the following described business activities:

(A) motor vehicle dealer's license as provided in Section 56-15-310;

(B) motor vehicle wholesaler's license as provided in Section 56-15-310;

(C) motorcycle dealer's license as provided in Section 56-16-140;

(D) motorcycle wholesaler's license as provided in Section 56-16-140;

(E) motor vehicle or motorcycle salesperson license, which shall permit the licensee to engage in the activities of a motor vehicle or motorcycle salesperson as defined in Sections 56-15-10 and 56-16-10. This license shall permit the one person named thereon to act as a salesperson.

Section 56-13-60. All fees collected under this act shall be paid by the board, as collected, into the State Treasury. The State Treasurer shall enter and carry on his records all such collections in a separate fund to be designated as the South Carolina Motor Vehicle Industry Licensing Fund. Such fund shall be appropriated by the General Assembly for the operations of the South Carolina Motor Vehicle Industry Licensing Board and shall be paid out from time to time by warrants of the Comptroller General for authorized expenditures upon duly itemized vouchers executed as provided by law and approved by the chairman of the board or the executive secretary. Any money in the South Carolina Motor Vehicle Industry Licensing Fund available for investment shall be invested by the State Treasurer as provided by law.

Section 56-13-70. The board shall prescribe the form of the license and each license shall have printed thereon the seal of its office. All licenses shall be mailed to each licensee except the license of each motor vehicle or motorcycle salesperson which shall be delivered or mailed to the motor vehicle or motorcycle dealer by whom the motor vehicle or motorcycle salesperson is employed and be kept in the custody and control of such dealer. It shall be the duty of each dealer to conspicuously display his own license or licenses in his place or places of business. The board shall prepare and deliver a pocket card for salespersons. Such card shall certify that the person whose name appears thereon is a licensed motor vehicle or motorcycle salesperson. Such motor vehicle or motorcycle salesperson's card shall also contain the name and address of the dealer employing him.

Section 56-13-80. To pay the expenses of the administration, operation, maintenance, and enforcement of this act, the board shall collect with each application for each class of license fees not exceeding the following amounts: (1) motor vehicle dealer's license, two hundred dollars; (2) motor vehicle wholesaler's license, two hundred dollars; (3) motorcycle dealer's license, two hundred dollars; (4) motorcycle wholesaler's license, two hundred dollars; and (5) motor vehicle or motorcycle salesperson's license, ten dollars; which fees shall be fixed by the board and shall not exceed the amount actually necessary to sustain the administration, operation, maintenance, and enforcement of this act. Such licenses, if issued, shall expire on December thirty-first next following the date of the issuance thereof.

Section 56-13-90. (A) The board may, upon its own motion, and shall, upon a sworn complaint in writing of any person, investigate the actions of any person registered or licensed under this chapter or under Chapters 15 or 16 of Title 56 as a motor vehicle or motorcycle dealer, wholesaler, or salesperson or operating without a registration or license when such registration or license is required. The board shall have the power to deny any application for a license, to revoke or suspend a license, to place the licensee or registrant on probation, to assess an administrative fine in an amount not to exceed one thousand dollars per violation, or to take any combination of such actions if the applicant, registrant, or licensee including any officer, stockholder, partner, or limited liability company member or any person having any financial interest in the applicant, registrant, or licensee:

(1) has had any license issued under this chapter or under chapters 15 or 16 of Title 56 revoked or suspended and, if the license has been suspended, has not complied with the terms of suspension;

(2) has knowingly purchased, sold, or done business in stolen motor vehicles or motorcycles, or parts thereof;

(3) has failed to provide and maintain an established place of business as defined in Sections 56-15-330 and 56-16-160;

(4) has been found guilty of any felony which has not been pardoned, has been found guilty of any misdemeanor concerning fraud or conversion, or has suffered any judgment in any civil action involving fraud, misrepresentation, or conversion. In the event felony charges are pending against an applicant, the board may refuse to issue a license to the applicant until there has been a final determination of the charges;

(5) has made a false material statement in his or her application or any data attached thereto;

(6) has willfully failed to perform any written agreement with any consumer or retail buyer;

(7) has made a fraudulent sale, transaction, or repossession, or created a fraudulent security interest, as defined in the Uniform Commercial Code, in a motor vehicle or motorcycle;

(8) has failed to notify the board of a change in the location of his or her established place or places of business and in the case of a salesperson has failed to notify the board of any change in his or her employment;

(9) has willfully failed to deliver to a purchaser a proper certificate of ownership for a motor vehicle or motorcycle sold by the licensee or to refund the full purchase price if the purchaser cannot legally obtain proper certification of ownership within thirty days;

(10) has forged the signature of the registered or legal owner on a certificate of title;

(11) has failed to comply with this chapter and with Chapters 15 and 16 of Title 56, and any orders, rules, or regulations of the board;

(12) has failed to comply with the advertising and selling standards established in Section 56-13-100;

(13) has failed to comply with the provisions of Article 25 of Chapter 3 of this title, this chapter, or Chapters 15 and 16 of this title, or the rules or regulations adopted and promulgated by the board pursuant to this chapter and Chapters 15 and 16 of this title;

(14) has willfully defrauded any retail buyer or other person in the conduct of the licensee's business;

(15) has employed any unlicensed salesperson or salespersons;

(16) has failed to comply with the provisions of Section 56-19-240(1)(d);

(18) has engaged in any unfair methods of competition or unfair or deceptive acts or practices prohibited under Section 56-15-30; or

(19) has conspired with other persons to process titles in violation of the provisions of Title 56.

(B) If the applicant, registrant, or licensee is a publicly held corporation, the board's authority shall extend only to the corporation and its managing officers and directors.

(C) The board's authority under this section shall be in addition to authority conferred under Chapters 15 and 16 of this title.

Section 56-13-100. (A) It shall be unlawful for any licensee or motor vehicle dealer to engage, directly or indirectly, in the following acts:

(1) to advertise and offer any year, make, engine size, model, type, equipment, price, trade-in allowance, terms, or make other claims or conditions pertaining to the sale, leasing, or rental of motor vehicles and motorcycles which are not truthful and clearly set forth;

(2) to advertise for sale, lease, or rental a specific motor vehicle or motorcycle which is not in possession of the dealer, owner, or advertiser and willingly shown and sold, as advertised, illustrated, or described, at the advertised price and terms, at the advertised address. Unless otherwise specified, a motor vehicle or motorcycle advertised for sale shall be in operable condition and, on request, the advertiser thereof shall show records to substantiate an advertised offer;

(3) to advertise a new motor vehicle or motorcycle at a price which does not include standard equipment with which it is fitted or is ordinarily fitted, without disclosing such fact, or eliminating any such equipment for the purpose of advertising a low price;

(4) to advertise (a) that the advertiser's prices are always or generally lower than competitive prices and not met or equalled by others or that the advertiser always or generally undersells competitors, (b) that the advertiser's prices are always or generally the lowest or that no other dealer has lower prices, (c) that the advertiser is never undersold, or (d) that no other advertiser or dealer will have a lower price;

(5)to advertise and make statements such as, Write Your Own Deal, Name Your Own Price, or Name Your Own Monthly Payments and other statements of a similar nature;

(6) to advertise by making disparaging comparisons with competitors' services, quality, price, products, or business methods;

(7) to advertise by making the layout, headlines, illustrations, and type size of an advertisement so as to convey or permit an erroneous impression as to which motor vehicle or motorcycle or motor vehicles or motorcycles are offered at featured prices. No advertised offer, expression, or display of price, terms, downpayment, trade-in allowance, cash difference, or savings shall be misleading by itself, and any qualification to such offer, expression, or display shall be clearly and conspicuously set forth in comparative type size and style, location, and layout to prevent deception;

(8) to advertise the price of a motor vehicle or motorcycle without including all charges which the customer must pay for the motor vehicle or motorcycle, excepting state and local tax and license and title fees. It shall be unlawful to advertise prices described as unpaid balance, unless they are the full cash selling price and to advertise price which is not the full selling price even though qualified with expressions such as with trade, with acceptable trade, or other similar words;

(9) to advertise as at cost, below cost, below invoice, or wholesale, unless the term used shall be strictly construed that the word cost as used above or in a similar meaning shall be the actual price paid by the advertiser to the manufacturer for the motor vehicle or motorcycle so advertised;

(10) to advertise claims that Everybody Financed, No Credit Rejected, or We Finance Anyone and other similar affirmative statements;

(11) to advertise a specific trade-in amount or range of amounts;

(12) to advertise the words Finance, Loan, or Discounts or others of similar import in the firm name or trade style of a person offering motor vehicles or motorcycles for sale, unless such person is actually engaged in the finance business and offering only bona fide repossessed motor vehicles or motorcycles. It shall be unlawful to use the word Repossessed in the name or trade style of a firm in the advertising of motor vehicles or motorcycles sold by such a company unless they are bona fide repossessions sold for unpaid balances due only. Advertisers offering repossessed automobiles for sale shall be able to offer proof of repossession;

(13) to advertise the term Authorized Dealer in any way as to mislead as to the make or makes of motor vehicles or motorcycles for which a dealer is franchised to sell at retail;

(14) to advertise or sell new motor vehicles or motorcycles by any person not enfranchised by the manufacturer of the motor vehicle or motorcycle offered without disclosing the fact that the licensee or motor vehicle dealer is not enfranchised by the manufacturer for service under factory warranty provisions;

(15) to advertise used motor vehicles or motorcycles so as to create the impression that they are new. Used motor vehicles and motorcycles of the current and preceding model year shall be clearly identified as Used, Executive Driven, Demonstrator, or Driver Training, and lease cars, taxicabs, fleet vehicles, police motor vehicles, or motorcycles as may be the case and descriptions such as Low Mileage or Slightly Driven may also be applied only when correct. The terms demonstrator's, executive's, and official's motor vehicles or motorcycles shall not be used unless they have never been sold to a member of the public and unless such terms describe motor vehicles or motorcycles used by new motor vehicle or motorcycle dealers or their employees for demonstrating performance ability and unless such vehicles are advertised for sale as such only by an authorized dealer in the same make of motor vehicle or motorcycle. Phrases such as Last of the Remaining, Closeout or Final Clearance and others of similar import shall not be used in advertising used motor vehicles or motorcycles so as to convey the impression that the motor vehicles and motorcycles offered are holdover new motor vehicles and motorcycles. When new and used motor vehicles and motorcycles of the current and preceding model year are offered in the same advertisement, such offers shall be clearly separated by description, layout, and art treatment;

(16) to advertise executives' or officials' motor vehicles or motorcycles unless they have been used exclusively by the personnel or executive of the motor vehicle or motorcycle manufacturer or by an executive of any authorized dealer of the same make thereof and such motor vehicles or motorcycles have not been sold to a member of the public prior to the appearance of the advertisement;

(17) to advertise motor vehicles and motorcycles owned by or in the possession of dealers without the name of the dealership or in any other manner so as to convey the impression that they are being offered by private parties;

(18) to advertise the term wholesale in connection with the retail offering of used motor vehicles or motorcycles;

(19) to advertise terms auction or auction special and other terms of similar import unless such terms shall be used in connection with motor vehicles and motorcycles offered or sold at a bona fide auction to the highest bidder;

(20) to advertise free driving trial, unless it means a trial without obligation of any kind and that the motor vehicle or motorcycle may be returned in the period specified, without obligation or cost. A driving trial advertised on a money back basis or with privilege of exchange or applying money paid on another motor vehicle or motorcycle shall be so explained. Terms and conditions of driving trials, free or otherwise, shall be set forth in writing for the customer;

(21) to advertise (a) the term Manufacturer's Warranty, unless it is used in advertising only in reference to cars covered by a bona fide factory warranty for that particular make of motor vehicle or motorcycle. In the event only a portion of such warranty is remaining, then reference to a warranty may be used only if stated that unused portion of the warranty is still in effect, (b) the term New Car Guarantee, except in connection with new motor vehicles and motorcycles, and (c) the terms Ninety-day Warranty, Fifty-fifty Guarantee, Three-hundred-mile Guarantee, and Six-month Warranty, unless the major terms and exclusions are sufficiently described in the advertisement;

(22) to advertise representations inconsistent with or contrary to the fact that a motor vehicle or motorcycle is sold as is and without a guarantee. The customer contract shall clearly indicate when a car will be sold with a guarantee and what that guarantee is and similarly shall clearly indicate when a car is sold as is and without a guarantee;

(23) to advertise or to make any statement, declaration, or representation in any advertisement that cannot be substantiated in fact, and the burden of proof of the factual basis for such statement, declaration, or representation shall be on the licensee or motor vehicle dealer and not on the board; and

(24) to charge a purchaser fees for applicable taxes, certificate of title, and vehicle registration that exceed the fees provided by law. (B) The acts prohibited by subsection (A) are in addition to those acts prohibited in Chapters 15 and 16 of this title and any other provision of law.

Section 56-13-110. The use, employment, or publication of advertising by any licensee or motor vehicle dealer which does not comply with Section 56-13-100 is hereby declared to be an unlawful act, and any person violating such section shall be guilty of a Class C misdemeanor, in addition to the penalties provided by Section 56-13-90.

Section 56-13-120. (A) Every motor vehicle or motorcycle sale between a dealer and a consumer shall be evidenced by an instrument in writing upon a form that may be promulgated by the board and approved by the Attorney General which shall contain all the agreements of the parties and shall be signed by the buyer and seller or a duly acknowledged agent of the seller. Prior to or concurrent with any such motor vehicle or motorcycle sale, the seller shall deliver to the buyer one instrument which shall contain the following information:

(1) name of seller;

(2) name of buyer;

(3) year of model and identification number;

(4) cash sale price;

(5) the amount of buyer's downpayment and whether made in money or goods or partly in money and partly in goods, including a brief description of any goods traded in;

(6) the difference between subdivisions (4) and (6) of this section;

(7) the amount included for insurance if a separate charge is made therefor, specifying the types of coverage;

(8) the finance charge or interest rate, as applicable;

(9) the number, amount, and due date or period of each installment payment;

(10) whether the sale is as is or subject to warranty and, if subject to warranty, specifying the warranty; and

(11) if repairs or inspections arising out of the conduct of a dealer's business cannot be provided by the dealer in any representations or warranties that may arise, the instrument shall so state that fact and shall provide the purchaser with the location of a facility where such repairs or inspections, as provided for in the service contract, can be accomplished.

(B) A copy of all such instruments shall be retained in the file of the dealer for five years from the date of sale. The dealer shall keep a copy of the odometer statement required by Section 56-19-240(1)(d) which is furnished to him or her for each motor vehicle the dealer purchases or sells. The dealer shall keep such statements for five years from the date of the transaction as shown on the odometer statement.

Section 56-13-130. (A) Every dealer selling used motor vehicles in this State shall, prior to the sale of any used motor vehicle to any ultimate purchaser, securely affix to the windshield, or side window of such automobile a label on which such dealer shall endorse clearly, distinctly and legibly true and correct entries disclosing the following information concerning such automobile:

(1) the make, model, and serial or identification number or numbers;

(2) the name, and the location of the place of business, of the dealer by whom it is sold;

(3) the name of the city or town of the dealer by whom it is sold;

(4) the fair market value of such vehicle, as determined in accordance with National Automobile Dealers Association (NADA) guidelines; and

(5) whether the vehicle was bought by the dealer at auction or was a trade-in.

(B) Any dealer who wilfully fails to affix to any used automobile sold by him the label required by subsection (A) shall be fined not

more than one thousand dollars. Such failure with respect to each

automobile shall constitute a separate offense.

Section 56-13-140. Any party to a hearing before the board may appeal any final order entered in such hearing, and the appeal shall be made to the Administrative Law Division.

Section 56-13-150. Any conflicts which arise as to matters of interpretation between the provisions of this chapter and Chapters 15 and 16 of this title shall be construed to give this chapter liberal application."

SECTION 3. Section 56-15-10(r) of the 1976 Code is amended to read:

"(r) `Department' means Department of Public Safety `Board' means the South Carolina Motor Vehicle Industry Licensing Board."

SECTION 4. Section 56-15-10 of the 1976 Code is amended by adding an appropriately numbered item to read:

"( ) `Motor vehicle salesperson' means mean any person who, for a salary, commission, or compensation of any kind, is employed directly by only one specified licensed South Carolina motor vehicle dealer, except when the salesperson is working for two or more dealerships with common ownership, to sell, purchase, or exchange or to negotiate for the sale, purchase, or exchange of motor vehicles. A person owning any part of more than one dealership may be a salesperson for each of such dealerships. Common ownership is defined for the purpose of this section to mean that there is at least an eighty percent interest in each dealership by one or more persons having ownership in such dealership."

SECTION 5. Section 56-15-40 of the 1976 Code is amended by deleting:

"(5) There is hereby created the Office of Administrator, within the Attorney General's office, and he shall appoint such personnel within his office for the purpose of regulating this chapter. The Administrator shall have the power to investigate, issue cease and desist orders and injunctive relief on any valid abuse connected with the sale, rental or leasing of a new or used motor vehicle; provided, however, this power shall only apply after reasonable attempts by the consumer have been made with the seller, dealer, manufacturer or lessor of the motor vehicle to alleviate the complaint."

SECTION 6. Section 56-15-50 of the 1976 Code is amended to read:

"Section 56-15-50. Every manufacturer shall specify to the dealer the delivery and preparation obligations of its motor vehicle dealers prior to delivery of new motor vehicles to retail buyers. A copy of the delivery and preparation obligations of its motor vehicle dealers and a schedule or statement of the compensation to be paid or credited to its motor vehicle dealers for the work and services they shall be required to perform in connection with such delivery and preparation obligations shall be filed with the department board by every motor vehicle manufacturer and shall constitute any such dealer's only responsibility for product liability as between such dealer and such manufacturer. The compensation as set forth on such schedule or statement shall be reasonable and paid or credited as set out in Section 56-15-60."

SECTION 7. Section 56-15-310 of the 1976 Code is amended to read:

"Section 56-15-310. (1) Before engaging in business as a dealer or , wholesaler, or salesperson in this State, a person first must make application to the department board for a license. Each license issued expires on December thirty-first next following the date of issuance and must be displayed prominently at the established place of business. The fee for the license is fifty dollars for a dealer or wholesaler shall not exceed two hundred dollars. The for the license for a salesperson shall not exceed ten dollars. The license applies to only one place of business of the applicant and is not transferable to another person or place of business except that a licensed dealer may exhibit and sell motor homes, as defined by Section 56-15-10, at fairs, recreational or sports shows, vacation shows, and other similar events or shows upon obtaining a temporary dealer's license in the manner required by this section. Before exhibiting and selling motor homes at temporary locations as permitted above, the dealer shall first make application to the department board for a license. To be eligible for a temporary license, a dealer shall hold a valid dealer's license issued pursuant to this chapter. Every temporary dealer's license issued is valid for a period not to exceed ten consecutive days and must be prominently displayed at the temporary place of business. No dealer may purchase more than six temporary licenses in any one calendar year. The fee for each temporary license issued is twenty dollars. A temporary license applies to only one dealer operating in a temporary location and is not transferable to any other dealer or location.

Any person failing to secure a temporary license as required by this section is guilty of a misdemeanor and, upon conviction, must be punished in the same manner as he would be punished for failure to secure his regular dealer's license.

The provisions of this section may not be construed as allowing the sale of any type of motor vehicles other than motor homes at authorized temporary locations.

(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 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 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 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 8. Section 56-15-320 of the 1976 Code, as last amended b y Act 497 of 1994, is further amended to read:

"Section 56-15-320. (1)(A) Before any license as a `wholesaler' or `dealer' is issued to an applicant, he must file an application with the department board and furnish the information the Department board may require including, but not limited to, information adequately identifying by name and address individuals who own or control ten percent or more of the interest in the business. The policy of this section is full disclosure.

(B) Before any license as a `salesperson' is issued to an applicant, he must file an application with the board and furnish the information the board may require. The policy of this section is full disclosure. No salesperson may be issued a license for the first time until he has passed with a satisfactory score, an examination prepared, graded, and administered by the board. The examination, where applicable, must determine the applicant's:

(a) general business knowledge;

(b) technical knowledge and familiarity with the prescribed standards;

(c) general knowledge of the statutes and regulations of this State relating to the advertising, sale, and financing of motor vehicles.

(C) Fees for examinations required by item (B) must be established by regulations promulgated by the board.

(2) Each applicant for licensure as a dealer or wholesaler shall furnish a surety bond in the penal amount of fifteen thousand dollars on a form to be prescribed by the director of the department board. The bond must be given to the department board 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 statutes applicable to the license and as indemnification for 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 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. 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 may terminate its liability under the bond by giving the department board thirty days' written notice of its intent to cancel the bond. The cancellation does not affect any liability incurred or accrued before the cancellation.

(3) If, during any license year, there is any change in the information that a dealer, or wholesaler, or salesperson gave the department board in obtaining or retaining a license under this section, the licensee shall report the change to the department board within thirty days after the change occurs on the form the department board requires.

(4) If a licensee ceases being a dealer or wholesaler within ten days of that time, he shall notify the department board of this fact and return to the department board a license issued pursuant to this chapter and all current dealer license plates issued to the dealer or wholesaler."

SECTION 9. Sections 56-15-340, 56-15-350, and 56-15-360 of the 1976 Code are amended to read:

"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 board 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 board'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 board 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 board 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 board to have:

(a) Made made material misstatement in the application for the license;

(b) Violated violated any provision of this chapter;

(c) Been 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 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 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 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 refused or failed to comply with the Department's board'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 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 board 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 board 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 Board the license and all dealer license plates.

Section 56-15-360. The Department board is authorized to promulgate regulations necessary for the enforcement of the provisions of this chapter."

SECTION 10. Section 56-16-10(r) of the 1976 Code is amended to read:

"(r) `Department' means Department of Public Safety `Board' means the South Carolina Motor Vehicle Industry Licensing Board.

SECTION 11. Section 56-16-20 of the 1976 Code is amended to read:

"Section 56-16-20. Every manufacturer shall specify to the dealer the delivery and preparation obligations of its motorcycle dealers prior to delivery of new motorcycles to retail buyers. A copy of the delivery and preparation obligations of its motorcycle dealers and a schedule or statement of the compensation to be paid or credited to its motorcycle dealers for the work and services they are required to perform in connection with the delivery and preparation obligations must be filed with the department board by every motorcycle manufacturer and is a dealer's only responsibility for product liability as between dealer and manufacturer. The compensation as set forth on such schedule or statement must be reasonable and paid or credited as set out in Section 56-16-30."

SECTION 12. Section 56-16-100 of the 1976 Code is amended by deleting:

"(5) There is created the Office of Administrator, within the Attorney General's office, and he shall appoint such personnel within his office for the purpose of regulating this chapter. The Administrator has the power to investigate, issue cease and desist orders and injunctive relief on any valid abuse connected with the sale, rental, or leasing of a new or used motorcycle. This power only applies after reasonable attempts by the consumer have been made with the seller, dealer, manufacturer, or lessor of the motorcycle to alleviate the complaint."

SECTION 13. Section 56-16-110 of the 1976 Code is amended to read:

"Section 56-16-110. Every manufacturer shall specify to the dealer the delivery and preparation obligations of its motorcycle dealers prior to delivery of new motorcycles to retail buyers. A copy of the delivery and preparation obligations of its motorcycle dealers and a schedule or statement of the compensation to be paid or credited to its motorcycle dealers for the work and services they are required to perform in connection with such delivery and preparation obligations must be filed with the department board by every motorcycle manufacturer and shall constitute any such dealer's only responsibility for product liability as between the dealer and the manufacturer. The compensation as set forth on the schedule or statement is reasonable and paid or credited as set out in Section 56-16-30."

SECTION 14. Sections 56-16-140 and 56-16-150 of the 1976 Code are amended to read:

" Section 56-16-140. (1) Before engaging in business as a motorcycle dealer, or wholesaler, or salesperson in this State, every person must first make application to the Department board 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 for a dealer or wholesaler shall not exceed two hundred dollars. The fee for the license for a salesperson shall not exceed ten 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 motorcycle constitutes a separate offense.

Section 56-16-150. (1)(A) Before any license as a `wholesaler' or `dealer' is issued to an applicant, he must file an application with the Department board and furnish the information the Department board 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.

(B) Before any license as a `salesperson' is issued to an applicant, he must file an application with the board and furnish the information the board may require. The policy of this section is full disclosure. No salesperson may be issued a license for the first time until he has passed with a satisfactory score, an examination prepared, graded, and administered by the board. The examination, where applicable, must determine the applicant's:

(a) general business knowledge;

(b) technical knowledge and familiarity with the prescribed standards;

(c) general knowledge of the statutes and regulations of this State relating to the advertising, sale, and financing of motorcycles.

(C) Fees for examinations required by item (B) must be established by regulations promulgated by the board.

(2) Each applicant for licensure as a motorcycle 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 department board. The bond must be given to the Department board 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 motorcycle, or his legal representative, by reason of any fraud practiced or fraudulent representation made in connection with the sale or transfer of a motorcycle 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 board 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 board 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, or salesperson gave the Department board in obtaining or retaining a license under this section, the licensee shall report the change to the Department board within thirty days after the change occurs on the form the Department board requires.

(4) In the event a licensee ceases being a dealer or wholesaler, he shall, within ten days thereafter, notify the Department board of this fact and return to the Department board any license issued pursuant to this chapter and all current dealer license plates issued to the dealer or wholesaler."

SECTION 15. Sections 56-16-170, 56-16-180, and 56-16-190 of the 1976 Code are amended to read:

" Section 56-16-170. (1) Every dealer or wholesaler shall keep complete records of each transaction under which a motorcycle 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 motorcycle was acquired and the date of the transaction; a correct description of the motorcycle, when transferred; the true name and correct address of the person to whom the motorcycle was transferred; and the date of the transaction. The description of the motorcycle must include the motorcycle identification number, make, model, type of body, and the odometer readings at the time the motorcycle 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 board 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 board'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 board 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 board or its duly authorized agents complete records on each separate motorcycle constitutes a separate offense.

Section 56-16-180. 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 board to have:

(a) Made made a material misstatement in the application for the license;

(b) Violated violated any provision of this chapter;

(c) Been been found by a court or competent jurisdiction to have committed any fraud connected with the sale or transfer of a motorcycle;

(d) Employed 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 been convicted of any violation of law involving the acquisition or transfer of a title to a motorcycle or of any violation of law involving tampering with, altering, or removing motorcycle identification numbers or markings;

(f) Been 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 motorcycle odometer, including the provisions of 15 U.S.C. Sections 1981-1991;

(g) Refused refused or failed to comply with the Department's board's reasonable requests to inspect or copy the records, books, and files of the dealer or wholesaler or failed to maintain records of each motorcycle transaction as required by this chapter or by state and federal law pertaining to odometer records; or

(h) Given 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 board to be improperly displayed on any motorcycle 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 Board 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 board the license and all dealer license plates.

Section 56-16-190. The Department board is authorized to promulgate regulations necessary for the enforcement of the provisions of this chapter."

SECTION 16. Section 40-29-240 of the 1976 Code is amended by adding:

"(D) In addition to the acts prohibited by subsection (A), the following acts a person who violates any of the following provisions is liable for a civil penalty not to exceed one thousand dollars for each violation. Each violation constitutes a separate violation with respect to each manufactured home. It shall be unlawful for any licensee or motor vehicle dealer to engage, directly or indirectly, in the following acts:

(1) to advertise (a) that the advertiser's prices are always or generally lower than competitive prices and not met or equalled by others or that the advertiser always or generally undersells competitors, (b) that the advertiser's prices are always or generally the lowest or that no other dealer has lower prices, (c) that the advertiser is never undersold, or (d) that no other advertiser or dealer will have a lower price;

(2)to advertise and make statements such as, Write Your Own Deal, Name Your Own Price, or Name Your Own Monthly Payments and other statements of a similar nature;

(3) to advertise by making disparaging comparisons with competitors' services, quality, price, products, or business methods;

(4) to advertise by making the layout, headlines, illustrations, and type size of an advertisement so as to convey or permit an erroneous impression as to which manufactured home or homes are offered at featured prices. No advertised offer, expression, or display of price, terms, downpayment, trade-in allowance, cash difference, or savings shall be misleading by itself, and any qualification to such offer, expression, or display shall be clearly and conspicuously set forth in comparative type size and style, location, and layout to prevent deception;

(5) to advertise the price of a manufactured home without including all charges which the customer must pay for the manufactured home, excepting state and local tax and license and title fees. It shall be unlawful to advertise prices described as unpaid balance, unless they are the full cash selling price and to advertise price which is not the full selling price even though qualified with expressions such as with trade, with acceptable trade, or other similar words;

(6) to advertise as at cost, below cost, below invoice, or wholesale, unless the term used shall be strictly construed that the word cost as used above or in a similar meaning shall be the actual price paid by the advertiser to the manufacturer for the manufactured home so advertised;

(7) to advertise claims that Everybody Financed, No Credit Rejected, or We Finance Anyone and other similar affirmative statements;

(8) to advertise a specific trade-in amount or range of amounts;

(9) to advertise or to make any statement, declaration, or representation in any advertisement that cannot be substantiated in fact, and the burden of proof of the factual basis for such statement, declaration, or representation shall be on the licensee or motor vehicle dealer and not on the board.

(10) to charge a purchaser fees for applicable taxes, certificate of title, and registration that exceed the fees provided by law.

SECTION 17. This act takes effect upon approval by the Governor.