PROPOSED RULEMAKING
STATE BOARD OF VEHICLE MANUFACTURERS, DEALERS AND SALESPERSONS
[49 PA. CODE CH. 19]
Consignment Sales
[31 Pa.B. 822] The State Board of Vehicle Manufacturers, Dealers and Salespersons (Board ) proposes to amend its regulations by adding a new section in § 19.19 (relating to consignment sales) to read as set forth in Annex A.
The proposed regulation would establish requirements for licensed vehicle dealers who wish to sell vehicles on a consignment basis without holding a vehicle auction license.
Effective Date
The amendment will be effective upon final publication in the Pennsylvania Bulletin.
Statutory Authority
The amendment is authorized under section 4 of the Board of Vehicles Act (act) (63 P. S. § 818.4).
Background and Need for the Amendment
The proposed amendment effectuates the 1996 amendments to the act relevant to consignment sales and brokering. The 1996 amendments to the act changed the definition of vehicle brokering to permit licensed vehicle dealers to act as vehicle brokers, provided that vehicle dealers do not need to hold a vehicle auction license in order to sell a vehicle on a consignment basis. The proposed regulation would establish requirements for vehicle dealers who wish to sell vehicles on consignment.
The requirements to be established by the proposed regulation protect both vehicle dealers, consignors and buyers of vehicles on consignment. First, the proposed regulation requires a written agreement between the vehicle dealer and the consignor. The agreement must set forth crucial information including the identification of the vehicle, the terms of the sale and the terms of insurance coverage during the period of consignment. These requirements protect both the vehicle dealer and the consignor by assuring that both parties understand these important terms.
The agreement must also set forth any warranties extended by the consignor to the buyer, the names and addresses of any lien holders, and any material facts relative to the condition of the vehicle. These provisions protect the potential buyer, because, once aware of this information, the dealer is under an obligation to disclose the information to the buyer. In addition, the proposed regulation requires dealers to disclose to potential buyers that the vehicle is held on a consignment basis.
The agreement must contain a copy of the current registration card or title. This provision protects both the vehicle dealer and buyer by offering some assurance of legal ownership of the consignment vehicle. The proposed regulation establishes provisions relative to possession of the actual title to the consigned vehicle, assuring that the buyer can obtain title to the vehicle.
Finally, the proposed regulation directs vehicle dealers to assure their compliance with all applicable State and Federal law in the consignment sale of a vehicle.
Description of Proposed Amendments
The proposed regulation permits a licensed dealer to engage in consignment sales without being licensed as a vehicle auction, if the dealer meets certain requirements that insure consumers are protected from unscrupulous consignors and insures consignors are protected from unscrupulous dealers.
Compliance with Executive Order 1996-1, Regulatory Review and Promulgation
The Board sent this proposed regulation to dealer organizations as required under the directives of Executive Order 1996-1 ''Regulatory Review and Promulgation.'' In addition, the Board considered the impact the regulation would have on the regulated community and on public safety and welfare. The Board finds that the proposed regulation addresses a compelling public interest as described in this Preamble and otherwise complies with Executive Order 1996-1.
Fiscal Impact and Paperwork Requirements
The regulation will have no adverse fiscal impact on the Commonwealth or its political subdivisions. The fees will have a modest fiscal impact on those members of the private sector who apply for services from the Board. The regulation will impose no additional paperwork requirements upon the Commonwealth, political subdivisions or the private sector.
Sunset Date
The Board continuously monitors the cost effectiveness of its regulations. Therefore, no sunset date has been assigned.
Regulatory Review
Under section 5(a) of the Regulatory Review Act (71 P. S. § 745.5(a)), the Board submitted a copy of this proposed regulation on January 31, 2001, to the Independent Regulatory Review Commission (IRRC) and the Chairpersons of the House Professional Licensure Committee and Senate Consumer Protection and Professional Licensure Committee for review and comment. In addition to submitting the proposed regulation, the Board has provided IRRC and the Committees with a copy of a detailed Regulatory Analysis Form prepared by the Board in compliance with Executive Order 1996-1. A copy of this material is available to the public upon request.
If IRRC has any objections to any portion of the proposed regulation, it will notify the Board within 10 days after the expiration of the Committees' review period. The notification shall specify the regulatory review criteria which have not been met by that portion. The act specifies detailed procedures for review, prior to final publication of the regulation, by the Board, the General Assembly and the Governor of objections raised.
Public Comment
Interested persons are invited to submit written comments, suggestions or objections regarding this proposed rulemaking to Board Administrator, State Board of Vehicle Manufacturers, Dealers and Salespersons, P. O. Box 2649, Harrisburg, PA 17105-2649, within 30 days following publication of this proposed rulemaking in the Pennsylvania Bulletin.
ROBERT G. PICKERILL,
ChairpersonFiscal Note: 16A-601. No fiscal impact; (8) recommends adoption.
Annex A
TITLE 49. PROFESSIONAL AND VOCATIONAL STANDARDS
PART I. DEPARTMENT OF STATE
Subpart A. PROFESSIONAL AND OCCUPATIONAL AFFAIRS
CHAPTER 19. STATE BOARD OF VEHICLE MANUFACTURERS, DEALERS AND SALESPERSONS § 19.19. Consignment sales.
(a) A licensed dealer shall be permitted to engage in consignment sales without being licensed as a vehicle auction, subject to the following requirements:
(1) The dealer shall maintain at the lot where the vehicle is displayed a copy of a written consignment agreement with the consignor, including:
(i) The name and signature of the consignor.
(ii) The make, model, year, vehicle identification number and license plate number of the vehicle.
(iii) The terms of sale, including the minimum selling price (if any) and the amount of or formula for determining the dealer's commission.
(iv) The terms of insurance coverage during the period of consignment, including the name, address and telephone number of the consignor's insurance agent, if any.
(v) An express identification of any warranties extended by the consignor.
(vi) The name and address or telephone number of all current lien holders, together with the account number for each lien.
(vii) Any material facts relative to the vehicle, including accident history, vehicle condition and odometer disclosure.
(viii) A copy of the current registration card or title.
(2) The dealer need not possess the title while displaying the vehicle, but shall provide the executed title by the time of delivery of the vehicle to the buyer.
(3) The dealer shall have the title of the vehicle assigned from the consignor to the dealer prior to applying for title in the name of the buyer.
(4) Whenever a vehicle on consignment is shown to a potential buyer, the dealer shall disclose to that potential buyer that the vehicle is held on consignment and is not owned by the dealer.
(b) In all activities involving the consignment sale of a vehicle, the dealer shall comply with applicable Federal and State law.
[Pa.B. Doc. No. 01-223. Filed for public inspection February 9, 2001, 9:00 a.m.]
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