Revenue Chapter ALABAMA DEPARTMENT OF REVENUE ADMINISTRATIVE CODE CHAPTER DEALER LICENSE TABLE OF CONTENTS

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1 Revenue Chapter ALABAMA DEPARTMENT OF REVENUE ADMINISTRATIVE CODE CHAPTER DEALER LICENSE TABLE OF CONTENTS Application For New And Used Motor Vehicle Dealer, Motor Vehicle Wholesaler, And Motor Vehicle Rebuilder Licenses Application For Off-Site Sales Event Motor Vehicle Surety Bond Form Motor Vehicle Bond Claim Investigation Procedures For Open Assignment Of Title Evidence Of Blanket Liability Insurance Coverage For Licensed Motor Vehicle Dealers, Motor Vehicle Rebuilders, And Motor Vehicle Wholesalers Buyer s Identification Cards For Automotive Dismantlers And Parts Recyclers Application For New And Used Motor Vehicle Dealer, Motor Vehicle Wholesaler, And Motor Vehicle Rebuilder Licenses Application For Off-Site Sales Event. (1) All new and renewal regulatory license applications and regulatory license renewal applications for new motor vehicle dealers, used motor vehicle dealers, motor vehicle wholesalers, and motor vehicle rebuilders shall be filed electronically. (a) The applicant shall provide the following information on the application: 1. Legal name of business and trade name or DBA (if applicable) and mailing address 2. Physical address(es) of business and telephone number(s) Supp. 12/31/

2 Chapter Revenue 3. Form of organization (i) (ii) (iii) (iv) (v) Individual, Partnership, Limited Liability Company (LLC), Limited Liability Partnership (LLP), or Corporation 4. Federal Employer Identification Number (FEIN) not required for individual owners 5. Type of regulatory license(s) requested: (i) New motor vehicle dealer, as defined in , Code of Ala must provide name(s) of manufacturer(s) or distributor(s) and line(s) that applicant is authorized to represent (ii) Used motor vehicle dealer, as defined in , Code of Ala (iii) Motor vehicle wholesaler, as defined in , Code of Ala (iv) Motor vehicle rebuilder, as defined in , Code of Ala State sales tax number (new and used motor vehicle dealers only) 7. Number of motor vehicles sold during the previous calendar year 8. Name, resident home address, home telephone number, driver license number or non-driver identification card number and state of issuance and social security number for all owner(s), partners, members, officers and directors. 9. address of person completing application (notice of regulatory license issuance or notice or request for additional information will be sent to this address) Supp. 12/31/

3 Revenue Chapter (b) The applicant shall electronically submit the information required in section (1)(a) of this rule and pay the twenty-five dollar ($25) application fee(s) as required by , Code of Ala. 1975, and any applicable five dollar ($5) fee(s) for supplemental locations as provided for in , Code of Ala (c) The Department will provide an application receipt that must be printed and mailed to the Department along with the following documents in order to complete the application: 1. Properly executed surety bond in the sum of twenty-five thousand dollars ($25,000) as provided in , Code of Ala Note: There will be one bond for dealers and designated agents. The continuous bond shall be submitted with the initial application. The Department must be notified of any change in the status of the blood. 2. Evidence of blanket motor vehicle liability insurance coverage as provided in , Code of Ala. 1975, for business and inventory vehicles for the new license application or license renewal period if evidence of insurance cannot be verified electronically. 3. A copy of the driver license or non-driver identification card for all owner(s), partners, members, officers and directors. 4. A photograph of the motor vehicle dealership and principal sign displayed and situated on the dealer's permanent location or locations, as defined in , Code of Ala. 1975, apprising the public that a retail motor vehicle sales business is being conducted at said location. Any new and/or used motor vehicle dealer having more than one location shall submit a photograph for each location. The photograph shall be of such visual quality and size that a reasonable viewer of the photograph could discern all lettering appearing on the sign or signs. Note: A photograph shall only be required for the initial new motor vehicle dealer or used motor vehicle dealer regulatory license application and shall not be required for renewals unless the sign or location has been modified or changed. (d) The sign must meet the following requirements: (i) The sign shall use the name under which the applicant is licensed, and should this name not clearly identify Supp. 12/31/

4 Chapter Revenue the applicant as a seller of new and/or used motor vehicles, then a supplemental sign shall be attached, and state, in letters not less than six inches high, "used motor vehicle dealer" and/or "new motor vehicle dealer." (ii) The sign must be of sufficient size to be legible from the street fronting the display area, or from a distance to fifty yards, whichever is greater, so as to apprise a reasonable consumer that a retail motor vehicle sales business is being conducted at said location. (iii) This sign may be free standing or attached to the face of a building, and shall be erected at the location stated on the regulatory license application. (e) To establish a permanent location, an applicant must demonstrate to the department the satisfaction of at least three (3) of the following: 1. If the applicant is an individual, that his or her driver's license or non-driver identification card is issued by Alabama. 2. If the applicant is a corporation, partnership, LLC or LLP that it is incorporated in Alabama or registered to conduct business in Alabama as a foreign corporation. 3. If the applicant is a corporation, that the principal owner is a resident of Alabama. 4. The applicant has filed an Alabama income tax return for the previous tax year. 5. The applicant has paid real estate or personal property taxes to Alabama. 6. The applicant receives utility bills in Alabama in its name. 7. Other factors that clearly evidence the applicant's legal residence in Alabama. (f) following: A permanent location does not include the 1. A shared or common space with other tenants. Supp. 12/31/

5 Revenue Chapter Space rented by the hour or day. 3. Cubicles. 4. Temporary, virtual or rotating office spaces. 5. More than one (1) dealer under the same roof. (g) When retail sales are conducted from a residence, the location must be properly zoned for business. (h) Upon review of the information provided in the application and accompanying documents, the Department will issue the appropriate license(s) with a unique regulatory license number and notify the applicant by of the issuance and provide a method for the licensee to electronically print the license. The Department will notify the applicant by or first class mail if additional information is required and by first class or certified mail if the application is refused. Additional information may include any documentation deemed necessary by the Department to verify any of the information provided in the application and accompanying documents. (2) Off-Site Sales Event (a) A licensed motor vehicle dealer shall electronically apply for an off-site sales event license, as defined in , Code of Ala. 1975, at least one (1) calendar day prior to conducting the off-site sale. Dealers may not participate in more than 3 off-site sales events per license year. The motor vehicle dealer shall provide the following information on the application: 1. Legal name of business, trade name or DBA (if applicable) and mailing address, 2. Physical address(es) of business, 3. Regulatory license number, 4. Off-site sales event location address, and 5. Beginning and ending dates of off-site sales event. The sales event cannot exceed 10 consecutive calendar days in duration. Supp. 12/31/

6 Chapter Revenue (b) The applicant shall pay the twenty-five dollar ($25) application fee as required by , Code of Ala. 1975, electronically. (c) Upon review of the information provided and approval of the application, the Department will issue an off-site sales event license and notify the applicant by of the issuance and provide a method for the licensee to electronically print the license. The Department will notify the applicant by or first class mail if additional information is required and by first class or certified mail if the application is refused. Authors: Lisa Blankenship, Mike Gamble Statutory Authority: Code of Ala. 1975, 40-2A-7(a)(5), , , History: New Rule: Filed June 27, 2012; effective August 1, Amended: Filed October 27, 2014; effective December 1, Amended: Filed November 30, 2015; effective January 4, Motor Vehicle Surety Bond Form. (1) Sections and , Code of Ala. 1975, require new and used motor vehicle dealers, motor vehicle wholesalers, motor vehicle rebuilders, and automotive dismantler and parts recycler, to execute and deliver to the Department a continuing surety bond, before any license shall be issued. The surety bond shall be executed by a surety company authorized to do business in the State of Alabama. The bond shall be conditioned that the licensees shall comply with the conditions of any contract made by such licensee in connection with the sale or exchange of any motor vehicle and shall not violate any of the provisions of law relating to the conduct of the business for which he is licensed. Such bond shall be payable to the commissioner and to his/her successors in office, and shall be in favor of any person who shall recover any judgment for any loss as a result of any violation of the conditions previously described in this rule. The amount of the surety bond is twenty-five thousand dollars ($25,000). (2) The surety bond form, will be generated from the regulatory license application system upon receipt of the properly completed new or used motor vehicle dealer, motor vehicle wholesaler, motor vehicle rebuilder, or automotive Supp. 12/31/

7 Revenue Chapter dismantler and parts recycler regulatory application and required fee(s), and shall contain the following information: (a) Legal name of business and trade name or DBA (if applicable) and mailing address. (b) is located. The city, county and state in which the business (c) Name(s) and signature(s) of representative(s) of business authorized to execute surety bond on behalf of the business. (d) The name and address of the surety company providing the coverage. (e) (f) (g) company. (h) acceptable. (i) The effective date. The issue date of the bond. The original signature of an agent of the surety Altered or recreated surety bond forms are not A telephone number for the surety company. (3) The following requirements must be met in order for the bond form to be accepted by the Department: (a) The bond must be accompanied by a power of attorney form, indicating that the agent is authorized to execute the bond on behalf of the surety company. (b) The bond form and power of attorney must have the same issue date. (c) The bond form shall be signed. (d) The bond form shall be payable to the Alabama Department of Revenue. (4) The coverage period begins on the issuance date of the applicable. Authors: Don Clemons, Mike Gamble, Tammy Fuller Supp. 12/31/

8 Chapter Revenue Statutory Authority: Code of Ala. 1975, 40-2A-7(a)(5), , History: New Rule: Filed July 30, 2012; effective September 3, Amended: Filed October 27, 2014; effective December 1, Amended: Filed October 20, 2017; effective December 4, Motor Vehicle Bond Claim. (1) Sections and , Code of Ala. 1975, provide that the bond shall be approved by the Commissioner of Revenue, payable to the State of Alabama, in favor of any person who shall recover any judgment for any loss as a result of any violation of the conditions of the license of a motor vehicle dealer, motor vehicle rebuilder, and motor vehicle wholesaler, or automotive dismantler and parts recycler. This rule establishes the procedures to be followed for making a bond claim with the commissioner. (2) In order to make a bond claim, a claimant must first secure a final judgment from a court of competent jurisdiction. (3) A person wishing to make a bond claim must exhaust all available remedies in attempting to collect the judgment, prior to making a bond claim with the commissioner. (4) The following items must be submitted to the commissioner in order for a bond claim to be processed. (a) A complaint relating to the violation of the conditions of a contract made in connection with the sale or exchange of a motor vehicle; or the violation of any provision of law relating to the conduct of the business of a motor vehicle dealer, motor vehicle rebuilder, or motor vehicle wholesaler, or automotive dismantler and parts recycler. (b) A final judgment relating to the complaint in item (a) above. The judge rendering such must sign the judgment. No certificate or any other document that is not signed by the judge will be accepted. (c) A description of efforts made to enforce the judgment; along with a statement of all amounts recovered, or a statement that no amount has been recovered. Supp. 12/31/

9 Revenue Chapter (5) The following procedures will be followed when processing bond claims: (a) Upon receipt and review of the required documents, the Department will determine if the motor vehicle dealer, motor vehicle rebuilder, motor vehicle wholesaler or automotive dismantler and parts recycler has in fact violated the provisions of Title 40, Chapter 12, Article 8 or 9, as evidenced by the documents presented. (b) If additional information is required, the plaintiff will be contacted. (c) Upon receipt of the properly completed documentation and after determining that a violation has occurred, the Department shall file a claim with the surety company of record. The maximum amount of the claim filed cannot exceed the value of the bond. (d) Upon receipt of the claim, the surety company has 30 days to remit the payment or request an extension to further investigate the claim. (e) The surety company may request additional information from the plaintiff to substantiate the claim. (f) Upon determination that the claim is valid, the surety company shall remit payment to the Alabama Department of Revenue. (g) The Department shall endorse the check from the surety company and mail it to the plaintiff. (h) If the surety company fails to respond by the deadline, a claim shall be forwarded to the Department s Legal Division for further action. (6) The total amount of all bond claims made against a single bond shall not exceed $25,000. Once the bond claim limit of $25,000 has been reached, no further claims shall be allowed against the bond. Authors: Don Clemons, Mike Gamble, Tammy Fuller Statutory Authority: Code of Ala. 1975, 40-2A-7(a)(5), , History: New Rule: Filed July 30, 2012; effective September 3, Amended: Filed October 27, 2014; effective Supp. 12/31/

10 Chapter Revenue December 1, Amended: Filed October 20, 2017; effective December 4, Investigation Procedures For Open Assignment Of Title. (1) An open title is defined in Section (b)(3), Code of Ala. 1975, as "...accepting open assignment of title and/or bill of sale for a motor vehicle which is not completed by identifying said licensee as the purchaser or assignee of the motor vehicle." The following procedures will be utilized when it is determined a licensee (as licensed under , Code of Ala. 1975) is accepting open titles in violation of the code. (2) A Notice of Statutory Non-Compliance will be issued giving the taxpayer ten calendar days from the date of the notice to comply. (a) The Department will compile a list of all open title(s) reflecting the issuing state, title number, vehicle identification number, make and model of the vehicle, and other information as deemed necessary. (b) A copy of the front and back of each open title will be obtained. (3) Revisit the licensee after the expiration of the ten calendar day period. If the licensee is then in compliance, no further action will be pursued. However, if the licensee is found to still be in possession of open title(s), the licensee may be assessed a $1,000 penalty for willful failure to comply under Section , Code of Ala An action to revoke the license may also be initiated. In the event that the licensee is a designated agent and the license is revoked, the licensee s designated agent status will also be revoked. (4) Should a licensee previously given a Notice of Statutory Non-Compliance be in possession of open titles(s) in the future, a Notice of Statutory Non-Compliance will be issued to the licensed motor vehicle dealer to take effect upon date of the notice? This offense shall be considered willful failure to comply and a $1,000 penalty will be assessed under Section An action to revoke the license may also be initiated. In the event that the licensee is a designated agent Supp. 12/31/

11 Revenue Chapter and the license is revoked, the licensee s designated agent status will also be revoked. (5) A licensee who accepts an open title assignment and subsequently sells a motor vehicle and does not complete the assignment of title identifying said licensee as the purchaser or assignee of the motor vehicle shall be considered to have intentionally and willfully failed to comply with the provisions of Article 8 of Chapter 12 of Title 40 and a $1,000 penalty will be assessed under Section An action to revoke the license may also be initiated. In the event that the licensee is a designated agent and the license is revoked, the licensee s designated agent status will also be revoked. (6) The motor vehicle licensee will be provided a copy of his appeal rights under Section 40-2A-8, Code of Ala. 1975, when action to revoke his license is taken. Author: Mike Gamble Statutory Authority: Code of Ala. 1975, (b), 40-2A-7(a)(5), , History: New Rule: Filed September 7, 2012; effective October 12, Evidence Of Blanket Liability Insurance Coverage For Licensed Motor Vehicle Dealers, Motor Vehicle Rebuilders, And Motor Vehicle Wholesalers. (1) Section , Code of Ala. 1975, requires licensed motor vehicle dealers, motor vehicle rebuilders and motor vehicle wholesalers to maintain blanket motor vehicle liability insurance coverage, and to file evidence of such insurance with the application for license. This rule establishes guidelines for the required coverage, and specifies the methods of proof for liability insurance before the license is issued. (2) Each applicant for a motor vehicle dealer, motor vehicle wholesaler, or motor vehicle rebuilder license must provide and certify the following information: (a) The insurance policy is in the legal name of the business as provided on the license application. Supp. 12/31/

12 Chapter Revenue (b) The name, address and NAIC (National Association of Insurance Commissioners) number of the insurance company providing the coverage for the license year. (c) The policy number of the insurance company providing the coverage for the license year. (d) Certification that applicant s insurance will be in effect in the form of a blanket motor vehicle liability insurance policy or commercial automobile liability insurance policy, covering all vehicles held in inventory by the licensee, whether located at a licensed location of the licensee, or operated on any public street or highway within the State of Alabama. (e) The coverage amounts are no less than the minimum amounts set for bodily injury or death and for destruction of property under Section (c), Code of Ala (f) The certificate holder shall be listed as: Alabama Department of Revenue Motor Vehicle Division P.O. Box Montgomery, AL (3) The insurance company, or its licensed agent, as disclosed by the applicant in Section 2 of this rule, shall verify the insurance coverage electronically or by completion and submission of an insurance certification form, generated from the department s license application and renewal system prior to the issuance of a motor vehicle dealer, motor vehicle wholesaler, or motor vehicle rebuilder license. (4) The insurance company or insurance company s licensed agent that previously verified coverage, as required in section 3 of this rule, shall provide the Department with notice of cancellation, if the policy is cancelled. (5) In any case where an applicant knowingly furnishes an insurance certificate purporting insurance coverage which is false or nonexistent, or which he knows has lapsed prior to the application date, a penalty of $1, shall be assessed in accordance with Section , Code of Ala Any license issued to said applicant shall be revoked in accordance with Section , Code of Ala. 1975, and the applicant shall not be considered for another license. In the Supp. 12/31/

13 Revenue Chapter event that the licensee is a designated agent and the license is revoked, the licensee s designated agent status will also be revoked. (6) If a notice of cancellation of insurance is received from the insurance carrier during the license year and the licensee does not provide proof of insurance coverage prior to the date of cancellation, the license shall be revoked and the licensee must apply for a new license rather than re-instating the previous license. The application for a new license must be accompanied by new surety bond, evidence of insurance as provided for in this rule and the required license fee(s). Authors: Don Clemons, Mike Gamble Statutory Authority: Code of Ala. 1975, 40-2A-7(a)(5), (a), (e). History: New Rule: Filed July 30, 2012; effective September 3, Amended: Filed December 19, 2012; effective January 23, Amended: Filed December 5, 2014; effective January 9, Buyer s Identification Cards For Automotive Dismantlers And Parts Recyclers. (1) Section , Code of Ala. 1975, restricts sales at salvage pools or salvage disposal sales to persons holding a current automotive dismantler and parts recycler license or their agents or employees. It also provides that each such person must have a separate buyer s identification (BID) card to buy at a salvage pool or salvage disposal sale. Further, it provides that such cards are to be valid as long as the holder is a licensed automotive dismantler and parts recycler or an agent or employee of the same licensed automotive dismantler and parts recycler. (2) The BID card authorizing a holder to bid on or buy motor vehicles at a salvage pool or salvage disposal sale shall be available to any person, firm, or corporation that possesses a current Alabama automotive dismantler and parts recycler license under Section , Code of Ala Cards are also available to salvage dealers licensed in other states under a license equivalent to the Alabama automotive dismantler and parts recycler license. Supp. 12/31/

14 Chapter Revenue (3) Dismantlers wishing to obtain BID cards must submit an application to the Department on the prescribed form containing the following information: (a) Name, business and mailing address, and telephone number of the licensed automotive dismantler and parts recycler. (b) Name, home address and telephone number of an owner or officer of the dismantler. (c) Signature of the owner or officer listed in (2). (d) Name, home address, telephone number and physical description of each buyer date of birth, sex, race, height, weight, hair, and eye color. (e) sought. Signature of each buyer for whom a BID card is (4) The following must be submitted with the BID card application: (a) A copy of the buyer s state issued Identification card containing a valid picture of the buyer. (b) If the Dismantler is licensed in a state other than Alabama, a copy of the current equivalent license as described in paragraph (4) below. (c) The processing fee for each buyer for whom a (BID) card is sought. (5) A license issued by another state of the United States will be considered equivalent to the Alabama automotive dismantler and parts recycler license if the licensing laws of the other state provide for all of the following: (a) Authorization to engage in the business of purchasing and dismantling, disassembling or repairing, wrecked, abandoned, or repairable motor vehicles, and selling the usable parts thereof; or the business of selling such wrecked, abandoned, or repairable motor vehicles as a unit at wholesale, or selling the hulk of the vehicle after the salvageable parts have been removed. (b) licensure. A physical location within the state of Supp. 12/31/

15 Revenue Chapter (c) Maintenance of records of all purchases and sales of vehicles for a period of five years from the date of purchase or sale, including the name and address of each purchaser or seller. Such records must be made available for inspection by agents of the State of Alabama at the automotive dismantler and parts recycler's business location during reasonable business hours on business days. A license issued by a political subdivision of a state, or by a municipality will not be considered equivalent to the Alabama automotive dismantler and parts recycler license, nor will a license issued by a foreign country or by a state or province of a foreign country be considered equivalent. (6) BID cards will be issued by the Department on a form containing the following information: (a) Expiration Date. (b) Name, business address and license number of the licensed dismantler and parts recycler. (c) Name, home address, state-issued identification card number, which includes the date of birth, sex, race, height, weight, hair and eye color of the buyer. (d) Signature of the owner or officer of the dismantler, and signature of the buyer. BID cards will not be valid unless signed by the owner or officer of the dismantler and the buyer. (7) All BID cards will be valid from October 1 through September 30 of each year and will expire when the Alabama automotive dismantler and parts recycler licenses expire. Annually, holders of valid cards on September 30 may continue to bid on or buy motor vehicles at a salvage pool or salvage disposal sale for the thirty day grace period ending each October 30. Persons wishing to bid on or buy motor vehicles at a salvage pool or salvage disposal sale after October 30 must have a current BID card. (8) All BID cards become invalid if the holder is no longer a licensed automotive dismantler and parts recycler or an agent or employee of the same licensed automotive dismantler and parts recycler. BID cards issued to dismantlers licensed in other states may be revoked for failure to comply with the Supp. 12/31/

16 Chapter Revenue conditions of the Alabama automotive dismantler and parts recycler license or for failure to permit inspection of records of purchases and sales as required under Section (4) hereof. (9) A person, firm, or corporation who is a license holder under Section , Code of Ala. 1975, is limited to no more than three (3) BID cards. BID cards are not transferable. If a buyer is no longer an employee or agent of the dismantler, the dismantler may submit a new application for a new employee or agent. The new application must contain all required information and include the required attachments and processing fee. (10) If a BID card is lost or damaged, the dismantler may apply for a duplicate card, by completing a new application, furnishing all required information and paying the processing fee. (11) Any changes (i.e. business entity, eligible applicant, address, telephone number) shall be reported to the Department. Failure to report such changes may result in the revocation of the BID card(s). Author: Tammy Fuller Statutory Authority: Code of Ala. 1975, 40-2A-7(a)(5), and History: New Rule: Filed October 20, 2017; effective December 4, Supp. 12/31/

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