AB 581

This bill makes several changes to the statutes and administrative code

provisions governing motor vehicle dealers and wholesalers. In particular, the bill

does the following:

1. Under current law, a motor vehicle wholesaler or an applicant for a motor

vehicle wholesaler license must provide and maintain in force a bond or irrevocable

letter of credit of not less than $25,000. The bill increases that amount to $50,000.

2. Under current law, manufacturers, importers, distributors, and dealers of

motor vehicles must be licensed by the Department of Transportation. A licensee

may have its license revoked if the licensee takes certain actions that have been

enumerated as violations. Under current law, one such violation is the willful failure

to provide and maintain certain facilities and business records. DOT has

promulgated rules providing specific requirements related to what types of facilities

must be maintained and what and how records must be maintained.

The bill modifies some of these administrative rules related to facilities and

records and imposes additional requirements, including:

a. Requiring dealers to maintain a facility that is heated and electrified.

b. Specifying that dealers' vehicle display lots must be not less than 9 feet by

18 feet.

c. Prohibiting more than five dealers or wholesalers from sharing a single

building.

d. Requiring dealers to have an office of not less than 8 feet by 8 feet with a door,

walls, lighting, and certain furnishings.

e. For shared facilities, requiring dealers and wholesalers to have a designated

vehicle display lot of not less than 9 feet by 18 feet.

3. The bill creates a new license violation for a licensee's failure to have the

required facilities staffed and open to the public for a reasonable number of hours

each week. The bill also creates an administrative rule requiring dealers,

wholesalers, and auction dealers to establish weekly business hours and providing

minimum weekly hours.

4. Under current law, a dealer, distributor, manufacturer, or transporter of

certain vehicles (registrant) who registers with DOT may be issued registration

plates, in lieu of regular registration plates, for use on vehicles that are owned or

repossessed by a registrant and that are being offered for sale; are in transit from the

factory to a distributor or dealer or from the dealer to the purchaser; are being used

by a manufacturer primarily for trial tests; are being repossessed; are being

reconditioned for resale; or are being foreclosed or resold.

Under the bill, such a registration plate may also be used for a vehicle that is

being operated by a wholesaler from its point of purchase to its point of sale or to a

dealer's business facility.

5. Currently, upon registration, DOT provides two registration plates to a