SENATE BILL REPORT
SB 6606
This analysis was prepared by non-partisan legislative staff for the use of legislative members in their deliberations. This analysis is not a part of the legislation nor does it constitute a statement of legislative intent. |
As of February 4, 2016
Title: An act relating to wholesale vehicle dealers.
Brief Description: Concerning wholesale vehicle dealers.
Sponsors: Senator King.
Brief History:
Committee Activity: Transportation: 2/03/16.
SENATE COMMITTEE ON TRANSPORTATION |
Staff: Kellee Keegan (786-7429)
Background: The Department of Licensing (DOL) is responsible for licensing all motor vehicle dealers operating in Washington.
Wholesale motor vehicle dealers. Current law defines a wholesale motor vehicle dealer as a vehicle dealer who buys and sells other than at retail.
A wholesale vehicle dealer must have office facilities in a commercial building within Washington State, and all storage facilities for inventory shall be listed with the DOL, and must meet local zoning and land use ordinances. A wholesale vehicle dealer shall maintain a telecomunications system. An exterior sign visible from the nearest street must identify the business name and the nature of the business. When two or more vehicle dealer businesses share a location, all records, office facilities, and inventory most be clearly segregated and clearly identified.
Motor vehicle dealers. A motor vehicle dealer deals in new and used motor vehicles, or both. A license is needed for anyone who sells more than four vehicles in any 12 months, buys and sells vehicles for the purpose of making a profit, or sells vehicles that are not registered to the seller. A motor vehicle dealer must have an established place of business that includes a publicly available commercial space open at least five days a week, with signage, located in a commercially zoned area with a business telephone listing in the local directory. Required books and records must be kept at the place of business.
Before a motor vehicle dealer may be issued a license, they must have:
filed with the DOL a surety bond worth $30,000;
shown proof of either owning or renting a business site;
submitted an application of a business license to the Department of Revenue;
submitted a source of funds statement;
submitted a personal criminal history statement with a fingerprint card for each member of the business; and
submitted proof of required training, if selling only used vehicles.
Summary of Bill: The "wholesale vehicle dealer" subcategory of licensed vehicle dealers is removed from statute.
Accordingly, the following related to wholesale vehicle dealers is removed:
specific requirements for office facilities, storage facilities, telecommunications equipment, signage, and shared locations;
the authorization for vehicle dealers to recover damages from wholesale vehicle dealers because of a loss or damage; and
the requirement that a consignor not be a motor vehicle dealer in order to institute an action for recovery against another dealer and the other dealer's surety bond.
By removing the subcategory of these licenses, a wholesale vehicle dealer would need to submit an application to the DOL for another applicable dealer license, such as a motor vehicle dealer license.
Appropriation: None.
Fiscal Note: Not requested.
Committee/Commission/Task Force Created: No.
Effective Date: Ninety days after adjournment of session in which bill is passed.
Staff Summary of Public Testimony: PRO: This is an unusual issue. In a period of a week, over 100 motor vehicle dealers licenses were issued. The law as it is now allows for illegal dealings and fraud. This is a consumer protection issue. The FBI and DEA are interested in this. This permissibility essentially allows for the laundering of vehicles.
Persons Testifying: PRO: Rick Jensen, Dealers Auto Auctions NW; Anthony Sermonti, Department of Licensing.
Persons Signed In To Testify But Not Testifying: No one.