CHAPTER 162

(HB 1060)

Motor vehicle dealers subject to increased regulatory authority of the Department of Revenue and Regulation.


         ENTITLED, An Act to  authorize the secretary of Revenue and Regulation to issue a cease and desist order to vehicle, snowmobile, manufactured home, and boat dealers for certain violations, to authorize imposition of monetary penalties for failure to comply with a cease and desist order, and to modify the reasons for suspending or revoking a dealer's license.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF SOUTH DAKOTA:

     Section  1.  That chapter 32-6B be amended by adding thereto a NEW SECTION to read as follows:

     In addition to any other remedy provided by law, the secretary of revenue and regulation may issue an order directing a vehicle dealer to cease and desist from engaging in any act or practice enumerated in §  32-6B-41. A cease and desist order issued pursuant to this section shall be effective for a period of five years.

     Section  2.  That chapter 32-6B be amended by adding thereto a NEW SECTION to read as follows:

     Within twenty days after service of the order to cease and desist, the vehicle dealer may request a hearing in writing on the question of whether acts or practices in violation of this title have occurred. Any hearing shall be conducted pursuant to, and judicial review shall be available as provided by, chapter 1-26.

     Section  3.  That chapter 32-6B be amended by adding thereto a NEW SECTION to read as follows:

     A cease and desist order pursuant to section 1 of this Act becomes final upon expiration of the time allowed for appeals from the secretary's order if no appeal is taken, or, if an appeal is taken, upon final decision of the court if the court affirms the secretary's order or dismisses the appeal.

     Section  4.  That chapter 32-6B be amended by adding thereto a NEW SECTION to read as follows:


     If a dealer fails to comply with a cease and desist order issued pursuant to section 1 of this Act, the secretary may issue an order which:

             (1)    Imposes a monetary penalty on the dealer of five hundred dollars for each violation of the cease and desist order;

             (2)    Suspends dealer's license for not more than thirty days; or

             (3)    Revokes the dealer's license.

     All monetary penalties collected pursuant to this section shall be deposited into the state motor vehicle fund.

     Section  5.  That chapter 32-6B be amended by adding thereto a NEW SECTION to read as follows:

     A dealer may request a hearing to contest an order issued pursuant to section 4 of this Act. The request shall be submitted to the secretary in writing within twenty days after service of the order. Any hearing shall be conducted pursuant to, and judicial review shall be available as provided by, chapter 1-26.

     Section  6.  That chapter 32-6B be amended by adding thereto a NEW SECTION to read as follows:

     An order issued pursuant to section 4 of this Act becomes final upon expiration of the time allowed for appeals from the secretary's order, if no appeal is taken, or, if an appeal is taken, upon final decision of the court if the court affirms the secretary's order or dismisses the appeal.

     Section  7.  That § 32-6B-41 be amended to read as follows:

     32-6B-41.   The department may deny any application , or suspend or revoke or apply the provisions of sections 1 to 6, inclusive, of this Act on any license issued under the provisions of this chapter, for the violation of any of the following:

             (1)      Commission of fraud or willful misrepresentation in the application for or in obtaining a license;

             (2)      Conviction of a felony involving vehicle theft or odometer fraud in the last five years;

             (3)      Second or subsequent A violation of any law of this state which relates to dealing in vehicles;

             (4)      Repeated failure Failure to comply with any administrative rule promulgated by the department;

             (5)      Perpetration of a fraud upon any person as a result of dealing in vehicles;

             (6)      Repeated failure Failure to apply for transfers of title as required in chapter 32-3;

             (7)      Willful failure Failure to allow department inspections, including initial and annual inspections, complaint investigations, and necessary follow-up inspections;

             (8)      Willful misrepresentation Misrepresentation through false, deceptive, or misleading statements with regard to the sale or financing of vehicles which a dealer has, or causes to have, advertised, printed, displayed, published, distributed, broadcast, televised, or made in any manner with regard to the sale or financing of vehicles;

             (9)      Refusal to comply with a licensee's responsibility under the terms of the new vehicle warranty issued by its respective manufacturer, unless such refusal is at the direction of the manufacturer;

             (10)      Repeated failure to provide customers or purchasers with an odometer disclosure statement;

             (11)      Willful failure Failure to comply with the terms of any bona fide written, executed agreement pursuant to the sale of a vehicle;

             (12) (11)      Inability to obtain or renew surety bond or to participate in a dealer asset pool;

             (13) (12)      Failure to maintain and continuously occupy a principal place of business; or

             (14) (13)      Failure to obtain or renew a public liability insurance policy of not less than three hundred thousand dollars, if the dealer has been given thirty days written notice to comply.

     Section  8.  That § 32-6B-40 be repealed.

     Section  9.  That § 32-6B-43 be repealed.

     Section  10.  That § 32-6B-44 be repealed.

     Section  11.  That chapter 32-6C be amended by adding thereto a NEW SECTION to read as follows:

     In addition to any other remedy provided by law, the secretary of revenue and regulation may issue an order directing a snowmobile dealer to cease and desist from engaging in any act or practice enumerated in §  32-6C-14. A cease and desist order issued pursuant to this section is effective for a period of five years.

     Section  12.  That chapter 32-6C be amended by adding thereto a NEW SECTION to read as follows:

     Within twenty days after service of the order to cease and desist, the snowmobile dealer may request a hearing in writing on the question of whether acts or practices in violation of this title have occurred. Any hearing shall be conducted pursuant to, and judicial review shall be available as provided by, chapter 1-26.

     Section  13.  That chapter 32-6C be amended by adding thereto a NEW SECTION to read as follows:

     A cease and desist order pursuant to section 11 of this Act becomes final upon expiration of the time allowed for appeals from the secretary's order if no appeal is taken, or, if an appeal is taken, upon final decision of the court if the court affirms the secretary's order or dismisses the appeal.

     Section  14.  That chapter 32-6C be amended by adding thereto a NEW SECTION to read as follows:

     If a dealer fails to comply with a cease and desist order issued pursuant to section 11of this Act, the secretary may issue an order which:

             (1)    Imposes a monetary penalty on the dealer of five hundred dollars for each violation of the cease and desist order;

             (2)    Suspends dealer's license for not more than thirty days; or

             (3)    Revokes the dealer's license.

     All monetary penalties collected pursuant to this section shall be deposited into the state motor vehicle fund.

     Section  15.  That chapter 32-6C be amended by adding thereto a NEW SECTION to read as follows:

     A dealer may request a hearing to contest an order issued pursuant to section 14 of this Act. The request shall be submitted to the secretary in writing within twenty days after service of the order. Any hearing shall be conducted pursuant to, and judicial review shall be available as provided by, chapter 1-26.

     Section  16.  That chapter 32-6C be amended by adding thereto a NEW SECTION to read as follows:

     An order issued pursuant to section 14 of this Act becomes final upon expiration of the time allowed for appeals from the secretary's order, if no appeal is taken, or, if an appeal is taken, upon final decision of the court if the court affirms the secretary's order or dismisses the appeal.

     Section  17.  That § 32-6C-14 be amended to read as follows:

     32-6C-14.   The department may deny any application , or suspend or revoke or apply the provisions of sections 11 to 16, inclusive, of this Act on any license issued under the provisions of this chapter, for the violation of any of the following provisions :

             (1)      Commission of fraud or willful misrepresentation in the application for or in obtaining a license;

             (2)      Conviction of a felony involving the theft of snowmobiles or other motor vehicles in the last five years;

             (3)      Second or subsequent violations A violation of any law of this state which relates to dealing in snowmobiles;

             (4)      Repeated failure Failure to comply with any administrative rule promulgated by the department;

             (5)      Perpetration of a fraud upon any person as a result of dealing in snowmobiles;

             (6)      Repeated failure Failure to apply for transfers of title as required in chapters 32-3 and 32-20A;

             (7)      Willful failure Failure to allow department inspections, including initial and annual inspections, complaint investigations, and necessary follow-up inspections;

             (8)      Willful misrepresentation Misrepresentation through false, deceptive, or misleading statements with regard to the sale or financing of snowmobiles which a dealer has, or causes to have, advertised, printed, displayed, published, distributed, broadcast, televised, or made in any manner with regard to the sale or financing of snowmobiles;

             (9)      Refusal to comply with a licensee's responsibility under the terms of a snowmobile warranty issued by its respective manufacturer, unless such refusal is at the direction of the manufacturer;

             (10)      Willful failure Failure to comply with the terms of any bona fide written, executed agreement pursuant to the sale of a snowmobile;

             (11)      Willful failure Failure to disclose damage to a new snowmobile of which the dealer had knowledge if the dealer's actual cost to repair, exceeds five percent of the manufacturer's suggested retail price; or

             (12)      Inability to obtain or renew surety bond.

     Section  18.  That § 32-6C-13 be repealed.

     Section  19.  That § 32-6C-15 be repealed.

     Section  20.  That § 32-6C-16 be repealed.

     Section  21.  That chapter 32-7A be amended by adding thereto a NEW SECTION to read as follows:

     In addition to any other remedy provided by law, the secretary of revenue and regulation may issue an order directing a dealer to cease and desist from engaging in any act or practice enumerated in §  32-7A-4.2. A cease and desist order issued pursuant to this section is effective for a period of five years.

     Section  22.  That chapter 32-7A be amended by adding thereto a NEW SECTION to read as follows:

     Within twenty days after service of the order to cease and desist, the dealer may request a hearing in writing on the question of whether acts or practices in violation of this title have occurred. Any hearing shall be conducted pursuant to, and judicial review shall be available as provided by, chapter 1-26.

     Section  23.  That chapter 32-7A be amended by adding thereto a NEW SECTION to read as follows:

     A cease and desist order pursuant to section 21 of this Act becomes final upon expiration of the time allowed for appeals from the secretary's order if no appeal is taken, or, if an appeal is taken, upon final decision of the court if the court affirms the secretary's order or dismisses the appeal.

     Section  24.  That chapter 32-7A be amended by adding thereto a NEW SECTION to read as follows:

     If a dealer fails to comply with a cease and desist order issued pursuant to section 21 of this Act, the secretary may issue an order which:

             (1)    Imposes a monetary penalty on the dealer of five hundred dollars for each violation of the cease and desist order;

             (2)    Suspends dealer's license for not more than thirty days; or

             (3)    Revokes the dealer's license.

     All monetary penalties collected pursuant to this section shall be deposited into the state motor vehicle fund.

     Section  25.  That chapter 32-7A be amended by adding thereto a NEW SECTION to read as follows:

     A dealer may request a hearing to contest an order issued pursuant to section 24 of this Act. The request shall be submitted to the secretary in writing within twenty days after service of the order. Any hearing shall be conducted pursuant to, and judicial review shall be available as provided by, chapter 1-26.

     Section  26.  That chapter 32-7A be amended by adding thereto a NEW SECTION to read as follows:

     An order issued pursuant to section 24 of this Act becomes final upon expiration of the time allowed for appeals from the secretary's order, if no appeal is taken, or, if an appeal is taken, upon final decision of the court if the court affirms the secretary's order or dismisses the appeal.

     Section  27.  That § 32-7A-4.2 be amended to read as follows:

     32-7A-4.2.   The department may deny any application , or suspend or revoke or apply the provisions of sections 21 to 26, inclusive, of this Act on any license issued under the provisions of this chapter, for a violation of any of the following provisions :

             (1)      Commission of fraud or willful misrepresentation in the application for or in obtaining a license;

             (2)      A previous manufacturer or dealer license revocation in this or any other state;

             (3)      Willful violation, which leads to a conviction, A violation of any law of this state which relates to dealing in manufactured homes or mobile homes;

             (4)      Willful failure Failure to comply with any administrative rule promulgated by the department;

             (5)      Perpetration of a fraud upon any person as a result of dealing in manufactured homes or mobile homes;

             (6)      Failure to allow department inspections, including initial and annual inspections, complaint investigations and necessary follow-up inspections;

             (7)      Willful misrepresentation Misrepresentation through false, deceptive, or misleading statements with regard to the sale or financing of manufactured homes or mobile homes which a dealer has, or causes to have, advertised, printed, displayed, published, distributed, broadcast, televised, or made in any manner with regard to the sale or financing of manufactured homes or mobile homes;

             (8)      Refusal to comply with a licensee's responsibility under the terms of the new manufactured home or mobile home warranty issued by its respective manufacturer, unless such refusal is at the direction of the manufacturer;

             (9)      Willful failure Failure to comply with the terms of any bona fide written, executed agreement pursuant to the sale of a manufactured home or mobile home;

             (10)      Violation by the dealer of any applicable manufactured home building or safety code;

             (11)      Failure to continuously occupy a principal place of business licensed under § 32-7A-2;

             (12)      Willful failure Failure to deliver the manufacturer's statement of origin to the county treasurer or the certificate of title to a person entitled to it within thirty days after date of delivery;

             (13)      Conviction within the previous ten five years, of a crime that related directly to the business of the dealer or manufacturer involving fraud, misrepresentation or misuse of funds;

             (14)      Inability to obtain or renew a surety bond; or

             (15)      Misuse of the dealers' metal plates and lending for use on mobile homes or manufactured homes not owned by the manufacturer or dealer ;

             (16)      Transporting a used mobile home or manufactured home without an affidavit, four or more times within a one-year period, from the county treasurer of the county in which the mobile home or manufactured home is registered, stating that the current year's taxes are paid; or

             (17)      Having a used mobile home or manufactured home located on the licensed dealer's or manufacturer's lot without an affidavit, four or more times within a one-year period, from the county treasurer of the county in which the mobile home or manufactured home is registered, stating that the current year's taxes were paid when the licensed dealer acquired the home .

     Section  28.  That § 32-7A-20 be repealed.

     Section  29.  That § 32-7A-21 be repealed.

     Section  30.  That § 32-7A-22 be repealed.

     Section  31.  That chapter 32-7B be amended by adding thereto a NEW SECTION to read as follows:

     In addition to any other remedy provided by law, the secretary of revenue and regulation may issue an order directing a boat dealer to cease and desist from engaging in any act or practice enumerated in §  32-7B-17. A cease and desist order issued pursuant to this section is effective for a period of five years.

     Section  32.  That chapter 32-7B be amended by adding thereto a NEW SECTION to read as follows:

     Within twenty days after service of the order to cease and desist, the boat dealer may request a hearing in writing on the question of whether acts or practices in violation of this title have occurred. Any hearing shall be conducted pursuant to, and judicial review shall be available as provided by, chapter 1-26.

     Section  33.  That chapter 32-7B be amended by adding thereto a NEW SECTION to read as follows:

     A cease and desist order pursuant to section 31 of this Act becomes final upon expiration of the time allowed for appeals from the secretary's order if no appeal is taken, or, if an appeal is taken, upon final decision of the court if the court affirms the secretary's order or dismisses the appeal.

     Section  34.  That chapter 32-7B be amended by adding thereto a NEW SECTION to read as follows:



     If a dealer fails to comply with a cease and desist order issued pursuant to section 31 of this Act, the secretary may issue an order which:

             (1)    Imposes a monetary penalty on the dealer of five hundred dollars for each violation of the cease and desist order;

             (2)    Suspends dealer's license for not more than thirty days; or

             (3)    Revokes the dealer's license.

     All monetary penalties collected pursuant to this section shall be deposited into the state motor vehicle fund.

     Section  35.  That chapter 32-7B be amended by adding thereto a NEW SECTION to read as follows:

     A dealer may request a hearing to contest an order issued pursuant to section 34 of this Act. The request shall be submitted to the secretary in writing within twenty days after service of the order. Any hearing shall be conducted pursuant to, and judicial review shall be available as provided by, chapter 1-26.

     Section  36.  That chapter 32-7B be amended by adding thereto a NEW SECTION to read as follows:

     An order issued pursuant to section 34 of this Act becomes final upon expiration of the time allowed for appeals from the secretary's order, if no appeal is taken, or, if an appeal is taken, upon final decision of the court if the court affirms the secretary's order or dismisses the appeal.

     Section  37.  That § 32-7B-17 be amended to read as follows:

     32-7B-17.   The department may deny any application , or suspend or revoke or apply the provisions of sections 31 to 36, inclusive, of this Act on any license issued under the provisions of this chapter, for the violation of any of the following provisions :

             (1)      Commission of fraud of willful misrepresentation in the application for or in obtaining a license;

             (2)      Conviction of a felony involving the theft of boats or other motor vehicles in the last five years;

             (3)      Second or subsequent violations A violation of any law of this state that relates to dealing in boats;

             (4)      Repeated failure Failure to comply with any administrative rule promulgated by the department;

             (5)      Perpetration of a fraud upon any person as a result of dealing in boats;

             (6)      Repeated failure Failure to apply for transfers of title as required in chapters 32-3 and 42-8;

             (7)      Willful failure Failure to allow department inspections, including initial and annual inspections, complaint investigations and necessary follow-up inspections;

             (8)      Willful misrepresentation Misrepresentation through false, deceptive, or misleading statements with regard to the sale or financing of boats which a dealer has, or causes to have, advertised, printed, displayed, published, distributed, broadcasted, televised, or made in any manner with regard to the sale or financing of boats;

             (9)      Refusal to comply with a licensee's responsibility under the terms of a boat warranty issued by its respective manufacturer, unless such refusal is at the direction of the manufacturer;

             (10)      Willful failure Failure to comply with the terms of any bona fide written, executed agreement pursuant to the sale of a boat;

             (11)      Inability to obtain or renew surety bond; or

             (12)      Failure to maintain a principal place of business.

     Section  38.  That § 32-7B-16 be repealed.

     Section  39.  That § 32-7B-18 be repealed.

     Section  40.  That § 32-7B-19 be repealed.

     Signed February 18, 2005
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