Revenue Chapter 810-5-12 ALABAMA DEPARTMENT OF REVENUE ADMINISTRATIVE CODE CHAPTER 810-5-12 DEALER LICENSE TABLE OF CONTENTS 810-5-12.01 Application For New And Used Motor Vehicle Dealer, Motor Vehicle Wholesaler, And Motor Vehicle Rebuilder Licenses Application For Off-Site Sales Event 810-5-12-.02 Surety Bond Form For New And Used Motor Vehicle Dealers, Motor Vehicle Wholesalers, And Motor Vehicle Rebuilders 810-5-12-.03 Bond Claim For New Motor Vehicle Dealers, Motor Vehicle Wholesalers, Used Motor Vehicle Dealers, And Motor Vehicle Rebuilders 810-5-12-.04 Investigation Procedures For Open Assignment Of Title 810-5-12-.05 Evidence Of Blanket Liability Insurance Coverage For Licensed Motor Vehicle Dealers, Motor Vehicle Rebuilders, And Motor Vehicle Wholesalers 810-5-12-.01 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 Supp. 3/31/16 5-12-1
Chapter 810-5-12 Revenue 2. Physical address(es) of business and telephone number(s) 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 40-12-390, Code of Ala. 1975 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 40-12-390, Code of Ala. 1975 (iii) Motor vehicle wholesaler, as defined in 40-12-390, Code of Ala. 1975 (iv) Motor vehicle rebuilder, as defined in 40-12-390, Code of Ala. 1975 6. 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. Supp. 3/31/16 5-12-2
Revenue Chapter 810-5-12 9. Email address of person completing application (notice of regulatory license issuance or notice or request for additional information will be sent to this email address) (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 40-12-392, Code of Ala. 1975, and any applicable five dollar ($5) fee(s) for supplemental locations as provided for in 40-12-395, Code of Ala. 1975. (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 40-12-398, Code of Ala. 1975. 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 40-12-392, 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 40-12-392, 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. Supp. 3/31/16 5-12-3
Chapter 810-5-12 Revenue (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 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. Supp. 3/31/16 5-12-4
Revenue Chapter 810-5-12 (f) following: A permanent location does not include the 1. A shared or common space with other tenants. 2. 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 email of the issuance and provide a method for the licensee to electronically print the license. The Department will notify the applicant by email 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 40-12-395, 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 Supp. 3/31/16 5-12-5
Chapter 810-5-12 Revenue 5. Beginning and ending dates of off-site sales event. The sales event cannot exceed 10 consecutive calendar days in duration. (b) The applicant shall pay the twenty-five dollar ($25) application fee as required by 40-12-395, 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 email of the issuance and provide a method for the licensee to electronically print the license. The Department will notify the applicant by email 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), 40-12-392, 40-12-305, 40-12-398. History: New Rule: Filed June 27, 2012; effective August 1, 2012. Amended: Filed October 27, 2014; effective December 1, 2014. Amended: Filed November 30, 2015; effective January 4, 2016. 810-5-12-.02 Surety Bond Form For New And Used Motor Vehicle Dealers, Motor Vehicle Wholesalers, And Motor Vehicle Rebuilders. (1) Section 40-12-398, Code of Ala. 1975, requires the following licensees, new and used motor vehicle dealers, motor vehicle wholesalers, and motor vehicle rebuilders, to execute and deliver to the Department a 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). Supp. 3/31/16 5-12-6
Revenue Chapter 810-5-12 (2) The surety bond form, will be generated from the regulatory license application system upon receipt of the properly completed motor vehicle used or new car dealer, motor vehicle wholesaler, or motor vehicle rebuilder 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) Name(s) and signature(s) of representative(s) of business authorized to execute surety bond on behalf of the business. (c) The name and address of the surety company providing the coverage. (d) (e) (f) company. (g) acceptable. 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 (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 an original 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 an original with original signatures. No facsimiles, photocopies, letters or phone calls are acceptable substitutes for the original bond. (4) The coverage period begins on the issuance date of the applicable Authors: Don Clemons, Mike Gamble Statutory Authority: Code of Ala. 1975, 40-2A-7(a)(5), 40-12-392, 40-12-398. Supp. 3/31/16 5-12-7
Chapter 810-5-12 Revenue History: New Rule: Filed July 30, 2012; effective September 3, 2012. Amended: Filed October 27, 2014; effective December 1, 2014. 810-5-12-.03 Bond Claim For New Motor Vehicle Dealers, Motor Vehicle Wholesalers, Used Motor Vehicle Dealers, And Motor Vehicle Rebuilders. (1) Section 40-12-398, Code of Ala. 1975, states that the bond shall be 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. 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. (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. (5) The total amount of all bond claims made against a single bond shall not exceed $25,000. Once the bond claim Supp. 3/31/16 5-12-8
Revenue Chapter 810-5-12 limit of $25,000 has been reached, no further claims shall be allowed against the bond. Authors: Don Clemons, Mike Gamble Statutory Authority: Code of Ala. 1975, 40-2A-7(a)(5), 40-12-392, 40-12-398. History: New Rule: Filed July 30, 2012; effective September 3, 2012. Amended: Filed October 27, 2014; effective December 1, 2014. 810-5-12-.04 Investigation Procedures For Open Assignment Of Title. (1) An open title is defined in Section 40-12-396(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 40-12-392, 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 40-12-29, Code of Ala. 1975. 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 Supp. 3/31/16 5-12-9
Chapter 810-5-12 Revenue 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 40-12-29. 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. (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 40-12-29. 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, 32-8-34(b), 40-2A-7(a)(5), 40-12-29, 40-12-396. History: New Rule: Filed September 7, 2012; effective October 12, 2012. 810-5-12-.05 Evidence Of Blanket Liability Insurance Coverage For Licensed Motor Vehicle Dealers, Motor Vehicle Rebuilders, And Motor Vehicle Wholesalers. (1) Section 40-12-392, 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: Supp. 3/31/16 5-12-10
Revenue Chapter 810-5-12 (a) The insurance policy is in the legal name of the business as provided on the license application. (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 32-7-6(c), Code of Ala. 1975. (f) The certificate holder shall be listed as: Alabama Department of Revenue Motor Vehicle Division P.O. Box 327643 Montgomery, AL 36132-7643 (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 $1,000.00 shall be Supp. 3/31/16 5-12-11
Chapter 810-5-12 Revenue assessed in accordance with Section 40-12-29, Code of Ala. 1975. Any license issued to said applicant shall be revoked in accordance with Section 40-12-396, Code of Ala. 1975, and the applicant shall not be considered for another license. 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) 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), 40-12-392(a), 40-12-392(e). History: New Rule: Filed July 30, 2012; effective September 3, 2012. Amended: Filed December 19, 2012; effective January 23, 2013. Amended: Filed December 5, 2014; effective January 9, 2015. Supp. 3/31/16 5-12-12