RULES REVIEW COMMITTEE MINUTES

A quorum was determined with the following members answering the roll call: Senators Eric Bogue, H. Paul Dennert, and Royal "Mac" McCracken; and Representatives Gerald Lange, Matthew Michels, and Orville Smidt.

Staff members present included Doug Decker, Code Counsel, and Phyllis Petersen, Senior Legislative Secretary.

All material distributed at the meeting is attached to the original minutes on file in the Legislative Research Council. For the purpose of continuity, these minutes are not necessarily in chronological order.

Department of Revenue ? Set minimum number of hours for licensed automotive dealer to be open; refunds for small power production facilities; use of direct payment permits; definition of owner for classification of property as owner-occupied; set rules for timely appeals; statewide sales tax permit to businesses with different SIC numbers; maintenance items not exempted as repair parts; assessing contractors working on fuel storage and dispensing projects; pilot project for notation of liens on the state's computer system; repeal definition of "State logo die stamp"; increase fee for assignment of VIN; attachment of VIN anywhere on motorcycle frame; repeal rules on assignment of VIN to motorcycle with unnumbered frame or engine; certain trailers do not need VIN; assign VIN to 1970 or newer rebuilt motorcycle; method of defining year of car, pickup, truck, or van; assign ID number when dash is removed; assign ID number for motorcycle built with after-market parts.

Ms. Jody Bartels summarized the rules that adopt procedures to handle the refunds for small power production facilities and implement a system to administer the use of direct payment permits.

Mr. Paul Kinsman explained rules concerning definition of owner for classification of property as owner-occupied.

Mr. Michael Kenyon reviewed the changes in rules concerning statewide sales tax permits and contractors excise tax.

Ms. Debra Hillmer explained the rules concerning notations and cancellation of liens online and vehicle identification number (VIN) fees and assignment.

Ms. Hilmer continued with ARSD 61:24:03:01 ? Maintenance of principal place of business. An additional hearing on this rule was held on September 5, 2001, with two people testifying. She said the rule is an attempt to define "normal business hours" and is a consumer protection issue. The 20-hour rule would make it easier for inspectors to find dealers. Ms. Hillmer said the department has not received a deluge of complaints but that people assume the Revenue Department protects consumers because the dealer is licensed. In response to committee questions, she said the penalty for selling cars without a license is a Class 2 misdemeanor but that it is very difficult to revoke a license.

Mr. Bill Caldwell, Rapid City, agrees with the 20-hour rule because it gives inspectors guidelines and would afford some consumer protection.

Mr. Jerry Vogeler, Ft. Pierre, representing the South Dakota Used Car Dealers Association, said that when used car dealers were polled, a majority support this rule change. It is important that all dealer inspections are done on an equal basis.

Mr. Myron Rau, Executive Vice President of the South Dakota Auto Dealers Association, supports the rule change.

Senator Jerry Apa opposes the rule change, saying that it violates the free enterprise system.

Representative Bill Napoli, Rapid City, expressed his opposition to this rule. He buys and sells antique cars and does most of his business on the Internet and by telephone; a majority of his customers never visit his business. He distributed copies of the statutes on regulation of car dealers (Document 1). He also read a letter from Dale Davis, owner of Davis Auto in Rapid City, who said the 20-hour rule would hamper his business (Document 2). Representative Napoli said this rule is an expansion of government into private business and asked the committee to suspend this rule.

Mr. Lyle Venhuisen, Rapid City, testified that as a licensed car dealer and buyer for 18 new-car dealers, he does most of his business by telephone. He said there is no need for this type of regulation.

Mr. Scott McGinly, Rapid City, does not support the 20-hour rule, saying it would drive small dealers out of business. There should be no minimum hour requirements (Document 3).

The committee adjourned at 9:00 a.m.