HB2378 - 542R

Be it enacted by the Legislature of the State of Arizona:

Section 1. Section 28-2095, Arizona Revised Statutes, is amended to read:

START_STATUTE28-2095. Restored salvage certificate of title; inspections; definitions

A. If a salvage vehicle as defined in section 28‑2091 is rebuilt or restored to operation, the owner of the motor vehicle shall not transfer the motor vehicle until a restored salvage certificate of title has been issued pursuant to this section.

B. On application for a restored salvage certificate of title, the department shall conduct a level two or level three inspection of the vehicle that is the subject of the application to determine its proper identity pursuant to section 28‑2011. The inspection may include a review of bills of sale and invoices for component parts used in the reconstruction process. If the department is unable to conduct a level three inspection for a restored salvage certificate of title within twenty days after a request is made, the department shall conduct an inspection of the vehicle within forty‑eight hours after the twenty day period.

C. The seller or agent of a seller of a salvage vehicle as defined in section 28‑2091 shall inform the purchaser of a salvage vehicle that ownership documentation for certain replacement parts used in the repair of the salvage vehicle is required in connection with the inspection prescribed by this section.

D. A person who possesses a salvage vehicle as defined in section 28‑2091 and who submits it for inspection as prescribed by this section shall submit to the department paperwork that is satisfactory to the director. Satisfactory paperwork may include copies of invoices, notarized bills of sale or other acceptable proof of ownership for component parts.

E. If proper ownership documentation for a component part is not submitted as required by this section, the department may seize the component part.

F. If the department finds a stolen component part in a vehicle while conducting an inspection provided for under this section, the department shall seize the component part pursuant to section 28‑4594.

G. The department shall deposit, pursuant to sections 35‑146 and 35‑147, any proceeds resulting from the seizure and forfeiture of a component part pursuant to subsection E or F of this section in the vehicle inspection and certificate of title enforcement fund established by section 28‑2012.

H. Any person who sells a vehicle for which a restored salvage certificate of title has been issued and who knows a restored salvage certificate of title has been issued for the vehicle shall clearly and conspicuously disclose to the buyer in writing before completion of the sale that the vehicle is a restored salvage vehicle and has a restored salvage title.

I. For the purposes of this section:

1. For passenger vehicles, "component parts" includes the cowl or firewall, front end assembly, rear clip, including the roof panel, the roof panel if installed separately and the frame or any portion of the frame, or in the case of a unitized body, the supporting structure that serves as the frame, each door, the hood, each fender or quarter panel, the deck lid or hatchback, each bumper, transmissions or transaxles and an engine or motor. For the purposes of this paragraph:

(a) "Front end assembly" includes the hood, fenders, bumper, radiator and supporting members for these items. For vehicles with a unitized body, the front end assembly also includes the frame support members.

(b) "Rear clip" includes the roof, quarter panels, trunk lid, floor pan, rear bumper and support members for these items.

2. For trucks or truck‑type or bus‑type vehicles, "component parts" includes the cab, the frame or any portion of the frame, and in the case of a unitized body, the supporting structure that serves as a frame, the cargo compartment floor panel, the passenger compartment floor pan, the roof panel, transmissions or transaxles, engines or motors, each door, the hood, each fender or quarter panel, each bumper, the tailgate and all component parts that are included in paragraph 1 of this subsection and that are not listed in this paragraph if the part is replaced.

3. For motorcycles, "component parts" includes the engine or motor, transmission or transaxle, frame, front fork, crankcase and fairing and any other body molding.

4. "Restored salvage vehicle" means a vehicle that has been restored and for which a salvage certificate of title or a dismantle certificate of title has been issued. END_STATUTE

Sec. 2. Section 28-4362, Arizona Revised Statutes, is amended to read:

START_STATUTE28-4362. Application; fee; bond

Applications shall be accompanied by:

1. The filing fees prescribed in section 28‑4302, and each licensee shall pay the annual license fee prescribed in section 28‑4302.

2. A bond that:

(a) Is in a form to be approved by the director.

(b) Is in an amount prescribed by the director of at least twenty thousand dollars $20,000 for an automotive recycler's license and not more than one hundred thousand dollars $100,000 for all other licenses.

(c) Is executed by a surety company authorized to transact business in this state as surety on the bond with the applicant as principal obligor on the bond and the state as obligee.

(d) Is cancellable only on at least sixty days' prior notice to the director.

(e) Inures to the benefit of a person who suffers loss because of either any of the following:

(i) Nonpayment by the dealer of customer prepaid title, registration or other related fees or taxes.

(ii) The automotive recycler's or the dealer's failure to deliver in conjunction with the sale of a vehicle a valid vehicle title certificate free and clear of any prior owner's interests and all liens except a lien created by or expressly assumed in writing by the buyer of the vehicle.

(iii) The dealer's failure to comply with an agreement to pay off outstanding loans on trade-in vehicles.

(f) Covers nonpayment of trade‑in vehicles.

3. A copy of the dealer's current transaction privilege tax license. END_STATUTE

Sec. 3. Title 44, chapter 9, article 15, Arizona Revised Statutes, is amended by adding a new section 44-1371, to read:

START_STATUTE44-1371. Definition of motor vehicle dealer

In this article, unless the context otherwise requires, "motor vehicle dealer" has the same meaning prescribed in section 28‑4301. END_STATUTE

Sec. 4. Section 44-1371, Arizona Revised Statutes, is renumbered as section 44‑1371.01 and, as so renumbered, is amended to read:

START_STATUTE44-1371.01. Motor vehicle transactions; conditional financing; traded motor vehicle

If a sale or lease of a motor vehicle from a motor vehicle dealer or a lessor to a customer is conditioned on final approval of financing by a lender or lessor, the motor vehicle dealer or lessor shall retain title and possession of any motor vehicle traded by a customer as part of the transaction until financing is finally approved or the traded motor vehicle is returned to the customer. Any remedy for a violation of this section may not be waived, modified or limited by agreement or contract. For the purposes of this section the term "motor vehicle dealer" has the same meaning prescribed in section 28‑4301.

Sec. 5. Title 44, chapter 9, article 15, Arizona Revised Statutes, is amended by adding sections 44‑1371.02, 44‑1371.03, 44-1371.04 and 44‑1371.05, to read:

START_STATUTE44-1371.02. Trade-in vehicles

If a motor vehicle dealer agrees to pay off any outstanding loans on a trade-in vehicle, the motor vehicle dealer must pay the agreed on amount in full within twenty‑one days after receiving the trade‑in vehicle. END_STATUTE

START_STATUTE44-1371.03. Dealer-arranged financing or leasing of motor vehicle transactions; notice relating to third‑party financial institution approval

A. At the time a customer purchases or leases a motor vehicle through dealer‑arranged financing or leasing and before the customer receives approval from a third‑party financial institution, if the motor vehicle dealer allows the customer to take possession of the motor vehicle, the motor vehicle dealer must provide the customer with a separate document that contains the notice required by this section.

B. The notice shall be signed by the motor vehicle dealer and the customer and shall be in the following form:

"Car Purchase Subject to Approval of Financing"

This sale or lease is not final and must be approved by a third‑party financial institution. If the financing terms are approved, the sale or lease cannot be canceled. If the financing terms are not approved, the motor vehicle dealer must notify you in writing within ten days after delivering the motor vehicle to you, and you or the dealer may cancel this sale or lease. If the sale or lease is canceled, the motor vehicle delivered to you must be returned to the motor vehicle dealer in the same condition it was given to you, except for normal wear and tear, within two days after you receive written notice of the third‑party financial institution's rejection. If the sale or lease is canceled, the motor vehicle dealer must immediately return to you any down payment, title fee, excise tax, motor vehicle dealer processing charge or other fee, tax or charge associated with the transaction. In addition, if the sale or lease is canceled, the motor vehicle dealer must immediately return any trade‑in vehicle associated with the transaction, and the vehicle must be in the same condition in which the motor vehicle dealer received the vehicle. You will not be charged a fee for ordinary use of the motor vehicle that was the subject of the sale or lease. You cannot waive any of these rights.

C. If a third‑party financial institution does not approve the financing terms:

1. The motor vehicle dealer must notify the customer in writing within ten days after delivery of the motor vehicle to the customer.

2. The motor vehicle dealer or the customer may cancel the sale or lease if The motor vehicle dealer and the customer do not agree to new terms.

D. If the sale or lease is canceled pursuant to subsection C of this section, the motor vehicle dealer shall immediately return to the customer any trade‑in vehicle, which shall be in the same condition in which it was received and any amounts paid toward the sale or purchase of the motor vehicle, including any down payment, title fee, excise tax, motor vehicle dealer processing charge or other fee, tax or charge associated with the transaction. The motor vehicle dealer may not charge a fee for use of the motor vehicle that was the subject of the sale or lease.

E. A buyer may not waive the rights established under this section.

F. Within two days after receiving notice pursuant to subsection C of this section, the customer must return the motor vehicle to the motor vehicle dealer in the same condition in which the customer received the vehicle other than normal wear and tear. END_STATUTE

START_STATUTE44‑1371.04. Motor vehicle price disclosure

When advertising the price of a motor vehicle, a motor vehicle dealer must clearly and conspicuously disclose the price of the motor vehicle that is available to all customers. The motor vehicle dealer may not advertise a motor vehicle price that has been reduced to reflect potential rebates. Except for state and local taxes and fees, a motor vehicle dealer must include in its advertised price of a motor vehicle all costs or fees for goods or services that are not optional for the motor vehicle transaction. END_STATUTE

START_STATUTE44‑1371.05. Unlawful practices

An act or practice in violation of this article constitutes an unlawful practice under section 44‑1522. The attorney general may investigate and take appropriate action as prescribed by chapter 10, article 7 of this title. In addition to being subject to the enforcement and penalty provisions in chapter 10, article 7 of this title, a motor vehicle dealer that violates this article is subject to any other civil or criminal action, remedy and penalty provided by law. END_STATUTE