Session of 1997
HOUSE BILL No. 2365
By Committee on Transportation
9 AN ACT relating to motor vehicles; providing for nonrepairable only cer-
10 tificate of title; regulations; amending K.S.A. 8-1,136 and 8-2406 and
11 K.S.A. 1996 Supp. 8-1,137, 8-2401, 8-2404, 8-2408, 8-2412 and 8-2434
12 and repealing the existing sections.
14 Be it enacted by the Legislature of the State of Kansas:
15 New Section 1. (a) As used in this section:
16 (1) ``Nonrepairable only vehicle'' means any motor vehicle which has
17 been damaged, destroyed, wrecked or submerged in water to the extent
18 that the total estimated or actual cost of parts and labor to rebuild or
19 reconstruct the vehicle to its preaccident condition and for legal operation
20 on the roads or highways exceeds 75% of the retail value of such motor
21 vehicle prior to such damage, as set forth in a current edition of any
22 nationally recognized compilation, including automated data bases, of re-
23 tail values, as approved by the division. The value of repair parts for
24 purposes of this subsection shall be determined by using the current
25 published retail cost of the original equipment manufacturer parts or the
26 actual retail cost of the repair parts to be used in the repair. The labor
27 cost of repairs for purposes of this subsection shall be computed by using
28 the hourly labor rate and time allocations that are reasonable and custom-
29 ary in the automobile repair industry in the community where the repairs
30 are performed;
31 (2) ``nonrepairable only certificate of title'' means a motor vehicle
32 certificate of title issued by the division designating that a motor vehicle
33 is a nonrepairable only vehicle. A nonrepairable only certificate of title
34 shall indicate clearly and distinctly on its face that it is issued for a non-
35 repairable only vehicle. A nonrepairable only certificate of title shall con-
36 tain substantially the same information as required on a certificate of title
37 issued under K.S.A. 8-135, and amendments thereto, and other infor-
38 mation as the director deems necessary;
39 (3) ``division'' means the division of vehicles of the department of
41 (b) Every insurance company, which pursuant to a damage settle-
42 ment, acquires ownership of a motor vehicle that has incurred damage
43 requiring the vehicle to be designated a nonrepairable only vehicle, shall
1 apply to the division for a recycle only certificate of title within 30 days
2 after the original certificate of title is assigned and delivered by the owner
3 to the insurance company, with all liens released.
4 (c) No motor vehicle for which a nonrepairable only certificate of title
5 has been issued shall be titled or registered by the division for use on the
6 roads or highways of this state.
7 (d) Ownership of the motor vehicle for which a nonrepairable only
8 certificate of title has been issued may only be transferred once.
9 (e) Any motor vehicle transferred through the use of a nonrepairable
10 only certificate of title shall be dismantled, disassembled or recycled and
11 may not be sold as a unit at retail. Such unit may be sold as a unit by an
12 automotive recycler, as defined in K.S.A. 8-2401, and amendments
13 thereto, to a scrap processor for recycling after the salvageable parts have
14 been removed by such automotive recycler.
15 The automotive recycler shall surrender the nonrepairable only certif-
16 icate of title to the division with the word recycled written or stamped
17 across its face and no certificate of title of any type shall be issued nor
18 any registration allowed again for such vehicle.
19 (f) Each application for a nonrepairable only certificate of title shall
20 be accompanied by a fee of $7 until July 1, 1999, and $3.50 thereafter,
21 and if the application is not made to the county treasurer within the time
22 prescribed by subsection (b), an additional fee of $2.
23 (g) The secretary of the department of revenue may adopt such rules
24 and regulations as the secretary deems necessary to carry out the provi-
25 sions of this section.
26 Sec. 2. K.S.A. 8-1,136 is hereby amended to read as follows: 8-1,136.
27 (a) A transfer certificate, which shall be of similar qualities as a certificate
28 of title and, notwithstanding any provision of article 1 of chapter 8 of the
29 Kansas Statutes Annotated, shall only be used to transfer ownership of a
30 motor vehicle 10 or more model years of age to any licensed
31 vehicle dealer automotive recycler, as defined in K.S.A. 8-2401, and
32 amendments thereto, when the owner thereof does not have a certificate
33 of title in the owner's possession. Any such transfer of ownership through
34 a transfer certificate shall have the same affect as surrendering of a title
35 as salvage or junk and no subsequent title shall be issued.
36 (b) Any such vehicle transferred through the use of a transfer certif-
37 icate shall be dismantled, disassembled or recycled and may not be sold
38 as a unit at retail. Such unit may be sold as a unit by the dealer automotive
39 recycler to a scrap processor for recycling after the salvageable parts have
40 been removed.
41 (c) The application for a transfer certificate shall be in three parts.
42 The licensed salvage vehicle dealer automotive recycler shall complete
43 the blank application provided by the division by completing all the in-
1 formation on the form. The
dealer automotive recycler, after verification
2 of the identification of the owner or transferor, shall obtain the owner's
3 or transferor's signature on the application for a transfer certificate. The
4 original of the form shall be forwarded to the director. The second copy
5 shall be retained by the dealer automotive recycler. The third copy shall
6 be given to the owner or transferor.
7 (d) The division, upon receipt of the application for a transfer certif-
8 icate, shall verify ownership of the vehicle and, thereafter, shall issue a
9 transfer certificate, as prescribed by the director of vehicles, or a certifi-
10 cate of title. If the owner of the vehicle is other than the transferor, or in
11 the event that the vehicle has never been titled in the state of Kansas,
12 the salvage vehicle dealer automotive recycler shall be granted a posses-
13 sory lien to the extent of any money, service, storage costs and actual
14 expenses incurred by the dealer automotive recycler for such vehicle. The
15 lien shall be foreclosed in the manner provided by article 11 of chapter
16 8 of the Kansas Statutes Annotated, and amendments thereto, within 60
17 days of the date of notification by the division.
18 (e) Any current registration for the vehicle may be transferred to an
19 after-acquired vehicle by the owner or transferor in accordance with the
20 provisions of article 1 of chapter 8 of the Kansas Statutes Annotated.
21 (f) The director of vehicles may charge a fee not to exceed that of an
22 original title fee for each such form issued to a licensed salvage vehicle
23 dealer automotive recycler.
24 Sec. 3. K.S.A. 1996 Supp. 8-1,137 is hereby amended to read as fol-
25 lows: 8-1,137. (a) If any vehicle for which a certificate of title has been
26 issued shall be dismantled, disassembled or recycled by selling such ve-
27 hicle to a scrap processor for recycling after the salvageable parts have
28 been removed by a licensed salvage vehicle dealer automotive recycler as
29 defined in K.S.A. 8-2401, and amendments thereto, such dealer auto-
30 motive recycler shall surrender the original or duplicate title to the divi-
31 sion with the word salvage or junk written or stamped across its face and
32 no certificate of title of any type shall be issued nor any registration al-
33 lowed again for such vehicle.
34 (b) When any major component part, as defined in K.S.A. 8-2401,
35 and amendments thereto, is sold by a licensed salvage vehicle dealer au-
36 tomotive recycler to a licensed vehicle dealer, a sales receipt and a copy
37 of the vehicle title must accompany such major component part as proof
38 of legal possession. Any major component part, as defined in K.S.A. 8-
39 2401, and amendments thereto, sold by a licensed salvage dealer auto-
40 motive recycler to any other person shall be accompanied by a bill of sale
41 and a copy of the vehicle title as proof of legal possession of such major
42 component part.
43 Sec. 4. K.S.A. 1996 Supp. 8-2401 is hereby amended to read as fol-
1 lows: 8-2401. As used in this act, the following words and phrases shall
2 have the meanings:
3 (a) ``Vehicle dealer'' means any person who: (1) For commission,
4 money or other thing of value is engaged in the business of buying, selling
5 or offering or attempting to negotiate a sale of an interest in vehicles; or
6 (2) for commission, money or other thing of value is engaged in the busi-
7 ness of buying, selling or offering or attempting to negotiate a sale of an
8 interest in motor vehicles as an auction motor vehicle dealer as defined
9 in (bb); but does not include: (A) Receivers, trustees, administrators, ex-
10 ecutors, guardians, or other persons appointed by or acting under the
11 judgment or order of any court, or any bank, trustee or lending company
12 or institution which is subject to state or federal regulations as such, with
13 regard to its disposition of repossessed vehicles; (B) public officers while
14 performing their official duties; (C) employees of persons enumerated in
15 provisions (A) and (B), when engaged in the specific performance of their
16 duties as such employees; (D) auctioneers conducting auctions for per-
17 sons enumerated in provisions (A), (B) or (C); or (E) auctioneers who,
18 while engaged in conducting an auction of tangible personal property for
19 others, offer for sale: (i) Vehicles which have been used primarily in a
20 farm or business operation by the owner offering the vehicle for sale,
21 including all vehicles which qualified for a farm vehicle tag at the time of
22 sale except vehicles owned by a business engaged primarily in the business
23 of leasing or renting passenger cars; (ii) vehicles which meet the statutory
24 definition of antique vehicles; or (iii) vehicles for no more than four prin-
25 cipals or households per auction. All sales of vehicles exempted pursuant
26 to provision (E), except truck, truck tractors, pole trailers, trailers and
27 semitrailers as defined by K.S.A. 8-126, and amendments thereto, shall
28 be registered in Kansas prior to the sale.
29 (b) ``New vehicle dealer'' means any vehicle dealer who is a party to
30 an agreement, with a first or second stage manufacturer or distributor,
31 which agreement authorizes the vehicle dealer to sell, exchange or trans-
32 fer new motor vehicles, trucks, motorcycles, or trailers or parts and ac-
33 cessories made or sold by such first or second stage manufacturer or
34 distributor and obligates the vehicle dealer to fulfill the warranty com-
35 mitments of such first or second stage manufacturer or distributor.
36 (c) ``Used vehicle dealer'' means any person actively engaged in the
37 business of buying, selling or exchanging used vehicles.
38 (d) ``Vehicle salesperson'' means any person who is employed as a
39 salesperson by a vehicle dealer to sell vehicles.
40 (e) ``Board'' means the vehicle dealer review board created by this
42 (f) ``Director'' means the director of vehicles, or a designee of the
1 (g) ``Division'' means the division of vehicles of the department of
3 (h) ``Vehicle'' means every device in, upon or by which any person or
4 property is or may be transported or drawn upon a public highway, and
5 is required to be registered under the provisions of article 1 of chapter 8
6 of Kansas Statutes Annotated except that such term shall not include
7 motorized bicycles, and such term shall not include manufactured homes
8 or mobile homes. As used herein, the terms ``manufactured home'' and
9 ``mobile home'' shall have the meanings ascribed to them by K.S.A. 58-
10 4202, and amendments thereto.
11 (i) ``Motor vehicle'' means any vehicle other than a motorized bicycle,
12 which is self-propelled and is required to be registered under the provi-
13 sions of article 1 of chapter 8 of Kansas Statutes Annotated.
14 (j) ``Licensor'' means the director or division or both.
15 (k) ``First stage manufacturer'' means any person who manufactures,
16 assembles and sells new vehicles to new vehicle dealers for resale in this
18 (l) ``Second stage manufacturer'' means any person who assembles,
19 installs or permanently affixes body, cab or special unit equipment to a
20 chassis supplied by a first stage manufacturer, distributor or other sup-
21 plier and sells the resulting new vehicles to new vehicle dealers for resale
22 in this state.
23 (m) ``First stage converter'' means any person who is engaged in the
24 business of affixing to a chassis supplied by a first stage manufacturer,
25 distributor or other supplier, specially constructed body units to result in
26 motor vehicles used as, but not limited to, buses, wreckers, cement trucks
27 and trash compactors.
28 (n) ``Second stage converter'' means any person who is engaged in
29 the business of adding to, subtracting from or modifying previously as-
30 sembled or manufactured vehicles and sells the resulting converted ve-
31 hicles at retail or wholesale.
32 (o) ``Distributor'' means any person who sells or distributes for resale
33 new vehicles to new vehicle dealers in this state or who maintains dis-
34 tributor representatives in this state.
35 (p) ``Wholesaler'' means any person who purchases vehicles for the
36 purpose of resale to a vehicle dealer.
37 (q) ``Factory branch'' means any branch office maintained in this state
38 by a first or second stage manufacturer for the sale of new vehicles to
39 distributors, or for the sale of new vehicles to new vehicle dealers, or for
40 directing or supervising, in whole or in part, its representatives in this
42 (r) ``Distributor branch'' means any branch office similar to subsec-
43 tion (q) maintained by a distributor for the same purposes as a factory
2 (s) ``Factory representative'' means a representative employed by a
3 first or second stage manufacturer or factory branch for the purpose of
4 making or promoting the sale of its new vehicles to new vehicle dealers,
5 or for supervising or contacting its new vehicle dealers or prospective new
6 vehicle dealers with respect to the promotion and sale of such vehicles
7 and parts or accessories for the same.
8 (t) ``Distributor representative'' means any representative similar to
9 subsection (s) employed by a distributor or distributor branch for the
10 same purpose as a factory representative.
11 (u) ``Person'' means any natural person, partnership, firm, corpora-
12 tion or association.
13 (v) ``New motor vehicle'' means any motor vehicle which has never
14 been titled or registered and has not been substantially driven or oper-
16 (w) ``Franchise agreement'' means any contract or franchise or any
17 other terminology used to describe the contractual relationship between
18 first or second stage manufacturers, distributors and vehicle dealers, by
20 (1) A right is granted one party to engage in the business of offering,
21 selling or otherwise distributing goods or services under a marketing plan
22 or system prescribed in substantial part by the other party, and in which
23 there is a community of interest in the marketing of goods or services at
24 wholesale or retail, by lease, agreement or otherwise; and
25 (2) the operation of the grantee's business pursuant to such agree-
26 ment is substantially associated with the grantor's trademark, service
27 mark, trade name, logotype, advertising or other commercial symbol des-
28 ignating the grantor or an affiliate of the grantor.
29 (x) ``Broker'' means any person who, for a fee, commission, money,
30 other thing of value, valuable consideration or benefit, either directly or
31 indirectly, arranges or offers to arrange a transaction involving the sale of
32 a vehicle, or is engaged in the business of: (1) Selling or buying vehicles
33 for other persons as an agent, middleman or negotiator; or (2) bringing
34 buyers and sellers of vehicles together, but such term shall not include
35 any person registered as a salvage vehicle pool or any person engaged in
36 a business in which the acts described in this subsection are only inci-
37 dentally performed or which are performed or authorized within the
38 requirements or scope of any other category of license, or not prohibited,
39 in the manner authorized by the vehicle dealers' and manufacturers' li-
40 censing act.
``Salvage vehicle dealer'' ``Automotive recycler'' means any person
42 engaged in the business of buying, selling or exchanging used vehicles
43 and primarily engaged in the business of the distribution at wholesale or
1 retail of used motor vehicle parts and includes establishments primarily
2 engaged in dismantling motor vehicles for the purpose of selling parts.
3 (z) ``Lending agency'' means any person, desiring to be licensed un-
4 der this act and engaged in the business of financing or lending money
5 to any person to be used in the purchase or financing of a vehicle.
6 (aa) ``Established place of business'' means a building or structure,
7 other than a building or structure all or part of which is occupied or used
8 as a residence, owned either in fee or leased and designated as an office
9 or place to receive mail and keep records and conduct the routine of
10 business. To qualify as an established place of business, there shall be
11 located therein an operable telephone which shall be listed with the tel-
12 ephone company under the name of the licensed business, except that a
13 vehicle dealer who derives at least 50% of such person's income from
14 operating a farm as a resident thereof, the established place of business
15 may be the farm residence of such vehicle dealer and the operable tele-
16 phone may be located in such residence when such dealer engages only
17 in vehicles and equipment not required to have vehicle registration to
18 travel on a highway.
19 (bb) ``Auction motor vehicle dealer'' means any person who for com-
20 mission, money or other thing of value is engaged in an auction of motor
21 vehicles except that the sales of such motor vehicles shall involve only
22 motor vehicles owned by licensed motor vehicle dealers and sold to li-
23 censed motor vehicle dealers, except that any auction motor vehicle
24 dealer, registered as such and lawfully operating prior to June 30, 1980,
25 shall be deemed to be and have been properly licensed under this act
26 from and after July 1, 1980. For the purposes of this subsection, an auc-
27 tion is a private sale of motor vehicles where any and all licensed motor
28 vehicle dealers who choose to do so are permitted to attend and offer
29 bids and the private sale of such motor vehicles is to the highest bidder.
30 (cc) ``Licensee'' means any person issued a valid license pursuant to
31 this act.
32 (dd) ``Dealer'' means a vehicle dealer as defined by this act, unless
33 the context otherwise requires.
34 (ee) ``Insurance company'' means any person desiring to be licensed
35 under this act and engaged in the business of writing or servicing insur-
36 ance related to vehicles.
37 (ff) ``Supplemental place of business'' means a business location other
38 than that of the established place of business of the dealer which may be
39 operated by the dealer on a continuous year-round basis and, for new
40 vehicle dealers, is within the defined area of responsibility in their fran-
41 chise agreement, and for all other dealers is within the same city or county
42 where the established place of business of the dealer is operated.
``Salvage yard'' ``Recycling center'' means the place owned or
1 leased and regularly occupied by a person, firm or corporation licensed
2 under the provisions of this act for the principal purpose of engaging in
3 the business of
a salvage vehicle dealer an automotive recycler. Salvage
4 yard Recycling center shall include the location where the:
5 (1) Products for sale are displayed and offered for sale;
6 (2) books and records required for the conduct of the business are
8 (3) records are kept in the normal daily business activity; and
9 (4) records are made available for inspection.
10 (hh) ``Salvage vehicle pool'' means any person who as an agent for a
11 third party is primarily engaged in the business of storing, displaying and
12 offering for sale salvage vehicles.
13 (ii) ``Major component part'' means any vehicle part including the
14 front clip, rear clip, doors, frame, chassis, engine, transmission, transaxle,
15 cab, bed and box bearing the public vehicle identification number or
16 engine number, if manufactured prior to 1981; or any vehicle part bearing
17 a derivative of such number.
18 (jj) ``Recreational motor vehicle'' means a recreational vehicle as de-
19 fined by subsection (f) of K.S.A. 75-1212, and amendments thereto.
20 Sec. 5. K.S.A. 1996 Supp. 8-2404 is hereby amended to read as fol-
21 lows: 8-2404. (a) No vehicle dealer shall engage in business in this state
22 without obtaining a license as required by this act. Any vehicle dealer
23 holding a valid license and acting as a vehicle salesperson shall not be
24 required to secure a salesperson's license.
25 (b) No first stage manufacturer, second stage manufacturer, factory
26 branch, factory representative, distributor branch or distributor represen-
27 tative shall engage in business in this state without a license as required
28 by this act, regardless of whether or not an office or other place of busi-
29 ness is maintained in this state for the purpose of conducting such busi-
31 (c) An application for a license shall be made to the director and shall
32 contain the information provided for by this section, together with such
33 other information as may be deemed reasonable and pertinent, and shall
34 be accompanied by the required fee. The director may require in the
35 application, or otherwise, information relating to the applicant's solvency,
36 financial standing, or other pertinent matter commensurate with the safe-
37 guarding of the public interest in the locality in which the applicant pro-
38 poses to engage in business, all of which may be considered by the di-
39 rector in determining the fitness of the applicant to engage in business
40 as set forth in this section. The director may require the applicant for
41 licensing to appear at such time and place as may be designated by the
42 director for examination to enable the director to determine the accuracy
43 of the facts contained in the written application, either for initial licensure
1 or renewal thereof. Every application under this section shall be verified
2 by the applicant.
3 (d) All licenses shall be granted or refused within 30 days after ap-
4 plication is received by the director. All licenses, except licenses issued
5 to salespersons, shall expire, unless previously suspended or revoked, on
6 December 31 of the calendar year for which they are granted, except that
7 where a complaint respecting the cancellation, termination or nonrenewal
8 of a sales agreement is in the process of being heard, no replacement
9 application shall be considered until a final order is issued by the director.
10 Applications for renewals, except for renewals of licenses issued to sales-
11 persons, received by the director after February 15 shall be considered
12 as new applications. All salespersons' licenses issued on or after January
13 1, 1987, shall expire on June 30, 1988, and thereafter shall expire, unless
14 previously suspended or revoked, on June 30 of the calendar year for
15 which they are granted. Applications for renewals of salespersons' licenses
16 received by the director after July 15 shall be considered as new appli-
17 cations. All licenses for supplemental places of business existing or issued
18 on or after January 1, 1994, shall expire on December 31, 1994, unless
19 previously expired, suspended or revoked, and shall thereafter expire on
20 December 31 of the calendar year for which they are granted, unless
21 previously suspended or revoked.
22 (e) License fees for each calendar year, or any part thereof shall be
23 as follows:
24 (1) For new vehicle dealers, $50;
25 (2) for distributors, $50;
26 (3) for wholesalers, $50;
27 (4) for distributor branches, $50;
28 (5) for used vehicle dealers, $50;
29 (6) for first and second stage manufacturers, $200 plus $50 for each
30 factory branch in this state;
31 (7) for factory representatives, $25;
32 (8) for distributor representatives, $25;
33 (9) for brokers, $50;
34 (10) for lending agencies, $25;
35 (11) for first and second stage converters, $25;
36 (12) for
salvage vehicle dealers automotive recyclers, $50;
37 (13) for auction motor vehicle dealers, $50;
38 (14) for vehicle salesperson, $15; and
39 (15) for insurance companies, $50.
40 Any salvage vehicle dealer automotive recycler who is also licensed as
41 a used vehicle dealer shall be required to pay only one $50 fee for both
42 licenses. Any new vehicle dealer who is also licensed as a used vehicle
43 dealer shall be required to pay only one $50 fee for both licenses.
1 (f) Dealers may establish approved supplemental places of business
2 within the same county of their licensure or, with respect to new vehicle
3 dealers, within their area of responsibility as defined in their franchise
4 agreement. Those doing so shall be required to pay a supplemental license
5 fee of $10. In addition to any other requirements, new vehicle dealers
6 seeking to establish supplemental places of business shall also comply with
7 the provisions of K.S.A. 8-2430 through 8-2432, and amendments thereto.
8 A new vehicle dealer establishing a supplemental place of business in a
9 county other than such dealer's county of licensure but within such de-
10 aler's area of responsibility as defined in such dealer's franchise agree-
11 ment shall be licensed only to do business as a new motor vehicle dealer
12 in new motor vehicles at such supplemental place of business. Original
13 inspections by the division of a proposed established place of business
14 shall be made at no charge except that a $5 fee shall be charged by the
15 division for each additional inspection the division must make of such
16 premises in order to approve the same.
17 (g) The license of all persons licensed under the provisions of this act
18 shall state the address of the established place of business, office, branch
19 or supplemental place of business and must be conspicuously displayed
20 therein. The director shall endorse a change of address on a license with-
21 out charge if: (1) The change of address of an established place of busi-
22 ness, office, branch or supplemental place of business is within the same
23 county; or (2) the change of address of a supplemental place of business,
24 with respect to a new vehicle dealer, is within such dealer's area of re-
25 sponsibility as defined in their franchise agreement. A change of address
26 of the established place of business, office or branch to a different county
27 shall require a new license and payment of the required fees but such
28 new license and fees shall not be required for a change of address of a
29 supplemental place of business, with respect to a new vehicle dealer, to
30 a different county but within the dealer's area of responsibility as defined
31 in their franchise agreement.
32 (h) Every salesperson, factory representative or distributor represen-
33 tative shall carry on their person a certification that the person holds a
34 valid state license. The certification shall name the person's employer and
35 shall be displayed upon request. An original copy of the state license for
36 a vehicle salesperson shall be mailed or otherwise delivered by the divi-
37 sion to the employer of the salesperson for public display in the employ-
38 er's established place of business. When a salesperson ceases to be em-
39 ployed as such, the former employer shall mail or otherwise return the
40 original copy of the employee's state license to the division. A salesperson,
41 factory representative or distributor representative who terminates em-
42 ployment with one employer may file an application with the director to
43 transfer the person's state license in the name of another employer. The
1 application shall be accompanied by a $2 transfer fee. A salesperson,
2 factory representative or distributor representative who terminates em-
3 ployment, and does not transfer the state license, shall mail or otherwise
4 return the certification that the person holds a valid state license to the
6 (i) If the director has reasonable cause to doubt the financial respon-
7 sibility or the compliance by the applicant or licensee with the provisions
8 of this act, the director may require the applicant or licensee to furnish
9 and maintain a bond in such form, amount and with such sureties as the
10 director approves, but such amount shall be not less than $5,000 nor more
11 than $20,000, conditioned upon the applicant or licensee complying with
12 the provisions of the statutes applicable to the licensee and as indemnity
13 for any loss sustained by any person by reason of any act by the licensee
14 constituting grounds for suspension or revocation of the license. Every
15 applicant or licensee who is or applies to be a used vehicle dealer or a
16 new vehicle dealer shall furnish and maintain a bond in such form,
17 amount and with such sureties as the director approves, in the amount
18 of $15,000, conditioned upon the applicant or licensee complying with
19 the provisions of the statutes applicable to the licensee and as indemnity
20 for any loss sustained by any person by reason of any act by the licensee
21 in violation of any act which constitutes grounds for suspension or revo-
22 cation of the license. To comply with this subsection, every bond shall be
23 a corporate surety bond issued by a company authorized to do business
24 in the state of Kansas and shall be executed in the name of the state of
25 Kansas for the benefit of any aggrieved party. The aggregate liability of
26 the surety for all breaches of the conditions of the bond in no event shall
27 exceed the amount of such bond. The surety on the bond shall have the
28 right to cancel the bond by giving 30 days' notice to the director, and
29 thereafter the surety shall be relieved of liability for any breach of con-
30 dition occurring after the effective date of cancellation. Bonding require-
31 ments shall not apply to first or second stage manufacturers, factory
32 branches, factory representatives or salespersons. Upon determination by
33 the director that a judgment from a Kansas court of competent jurisdic-
34 tion is a final judgment and that the judgment resulted from an act in
35 violation of this act or would constitute grounds for suspension, revoca-
36 tion, refusal to renew a license or administrative fine pursuant to K.S.A.
37 8-2411, and amendments thereto, the proceeds of the bond on deposit
38 or in lieu of bond provided by subsection (j), shall be paid. The deter-
39 mination by the director under this subsection is hereby specifically ex-
40 empted from the Kansas administrative procedure act (K.S.A. 77-501
41 through 77-549, and amendments thereto,) and the act for judicial review
42 and civil enforcement of agency actions (K.S.A. 77-601 through 77-627,
43 and amendments thereto). Any proceeding to enforce payment against a
1 surety following a determination by the director shall be prosecuted by
2 the judgment creditor named in the final judgment sought to be enforced.
3 Upon a finding by the court in such enforcement proceeding that a surety
4 has wrongfully failed or refused to pay, the court shall award reasonable
5 attorney fees to the judgment creditor.
6 (j) An applicant or licensee may elect to satisfy the bonding require-
7 ments of subsection (i) by depositing with the state treasurer cash, ne-
8 gotiable bonds of the United States or of the state of Kansas or negotiable
9 certificates of deposit of any bank organized under the laws of the United
10 States or of the state of Kansas. When negotiable bonds or negotiable
11 certificates of deposit have been deposited with the state treasurer to
12 satisfy the bonding requirements of subsection (i), such negotiable bonds
13 or negotiable certificates of deposit shall remain on deposit with the state
14 treasurer for a period of not less than two years after the date of delivery
15 of the certificate of title to the motor vehicle which was the subject of
16 the last motor vehicle sales transaction in which the licensee engaged
17 prior to termination of the licensee's license. In the event a licensee elects
18 to deposit a surety bond in lieu of the negotiable bonds or negotiable
19 certificates of deposit previously deposited with the state treasurer, the
20 state treasurer shall not release the negotiable bonds or negotiable cer-
21 tificates of deposits until at least two years after the date of delivery of
22 the certificate of title to the motor vehicle which was the subject of the
23 last motor vehicle sales transaction in which the licensee engaged prior
24 to the date of the deposit of the surety bond. The cash deposit or market
25 value of any such securities shall be equal to or greater than the amount
26 of the bond required for the bonded area and any interest on those funds
27 shall accrue to the benefit of the depositor.
28 (k) No license shall be issued by the director to any person to act as
29 a new or used dealer, wholesaler, broker,
salvage vehicle dealer auto-
30 motive recycler, auction motor vehicle dealer, second stage manufacturer,
31 first stage converter, second stage converter or distributor unless the ap-
32 plicant for the vehicle dealer's license maintains an established place of
33 business which has been inspected and approved by the division. First
34 stage manufacturers, factory branches, factory representatives, distributor
35 branches, distributor representatives and lending agencies are not re-
36 quired to maintain an established place of business to be issued a license.
37 (l) Dealers required under the provisions of this act to maintain an
38 established place of business shall own or have leased and use sufficient
39 lot space to display vehicles at least equal in number to the number of
40 dealer license plates the dealer has had assigned.
41 (m) A sign with durable lettering at least 10 inches in height and easily
42 visible from the street identifying the established place of business shall
43 be displayed by every vehicle dealer. Notwithstanding the other provi-
1 sions of this subsection, the height of lettering of the required sign may
2 be less than 10 inches as necessary to comply with local zoning regula-
4 (n) If the established or supplemental place of business or lot is
5 zoned, approval must be secured from the proper zoning authority and
6 proof that the use complies with the applicable zoning law, ordinance or
7 resolution must be furnished to the director by the applicant for licensing.
8 (o) An established or supplemental place of business, otherwise
9 meeting the requirements of this act may be used by a dealer to conduct
10 more than one business, provided that suitable space and facilities exist
11 therein to properly conduct the business of a vehicle dealer.
12 (p) If a supplemental place of business is not operated on a contin-
13 uous, year-round basis, the dealer shall give the department 15 days' no-
14 tice as to the dates on which the dealer will be engaged in business at the
15 supplemental place of business.
16 (q) Any vehicle dealer selling, exchanging or transferring or causing
17 to be sold, exchanged or transferred new vehicles in this state must sat-
18 isfactorily demonstrate to the director that such vehicle dealer has a bona
19 fide franchise agreement with the first or second stage manufacturer or
20 distributor of the vehicle, to sell, exchange or transfer the same or to
21 cause to be sold, exchanged or transferred.
22 No person may engage in the business of buying, selling or exchanging
23 new motor vehicles, either directly or indirectly, unless such person holds
24 a license issued by the director for the make or makes of new motor
25 vehicles being bought, sold or exchanged, or unless a person engaged in
26 such activities is not required to be licensed or acts as an employee of a
27 licensee and such acts are only incidentally performed. For the purposes
28 of this section, engaged in the business of buying, selling or exchanging
29 new motor vehicles, either directly or indirectly, includes: (1) Displaying
30 new motor vehicles on a lot or showroom; (2) advertising new motor
31 vehicles, unless the person's business primarily includes the business of
32 broadcasting, printing, publishing or advertising for others in their own
33 names; or (3) regularly or actively soliciting or referring buyers for new
34 motor vehicles.
35 (r) No person may engage in the business of buying, selling or ex-
36 changing used motor vehicles, either directly or indirectly, unless such
37 person holds a license issued by the director for used motor vehicles being
38 bought, sold or exchanged, or unless a person engaged in such activities
39 is not required to be licensed or acts as an employee of a licensee and
40 such acts are only incidentally performed. For the purposes of this sec-
41 tion, engaged in the business of buying, selling or exchanging used motor
42 vehicles, either directly or indirectly, includes: (1) Displaying used motor
43 vehicles on a lot or showroom; (2) advertising used motor vehicles, unless
1 the person's business primarily includes the business of broadcasting,
2 printing, publishing or advertising for others in their own names; or (3)
3 regularly or actively soliciting buyers for used motor vehicles.
4 (s) The director of vehicles shall publish a suitable Kansas vehicle
5 salesperson's manual. Before a vehicle salesperson's license is issued, the
6 applicant for an original license or renewal thereof shall be required to
7 pass a written examination based upon information in the manual.
8 (t) No new license shall be issued nor any license renewed to any
9 person to act as
a salvage vehicle dealer an automotive recycler until the
10 division has received evidence of compliance with the junkyard and sal-
11 vage control act as set forth in K.S.A. 68-2201 et seq., and amendments
13 (u) On and after the effective date of this act, no person shall act as
14 a broker in the advertising, buying or selling of any new or used motor
15 vehicle. Nothing herein shall be construed to prohibit a person duly li-
16 censed under the requirements of this act from acting as a broker in
17 buying or selling a recreational vehicle as defined by subsection (f) of
18 K.S.A. 75-1212, and amendments thereto, when the recreational vehicle
19 subject to sale or purchase is a used recreational vehicle which has been
20 previously titled and independently owned by another person for a period
21 of 45 days or more, or is a new or used recreational vehicle repossessed
22 by a creditor holding security in such vehicle.
23 (v) Nothing herein shall be construed to prohibit a person not oth-
24 erwise required to be licensed under this act from selling such person's
25 own vehicle as an isolated and occasional sale.
26 Sec. 6. K.S.A. 8-2406 is hereby amended to read as follows: 8-2406.
27 (a) The annual fee for the first dealer license plate is $275, and the annual
28 fee for additional dealer license plates shall be an amount equal to the
29 amount required to register a passenger vehicle having a gross weight of
30 less than 4,500 pounds, except that the annual fee for dealer license plates
31 used by trailer dealers on trailers which they have purchased or own and
32 are holding for resale shall be $25 for each plate. To determine the num-
33 ber of dealer license plates the dealer needs, the director may base the
34 decision on the dealer's past sales, inventory and any other pertinent
35 factors as the director may determine. After the end of the first year of
36 licensure as a dealer, not more than one dealer license plate shall be
37 issued to any dealer who has not reported to the division the sale of at
38 least five motor vehicles in the preceding year. There shall be no refund
39 of fees for dealer license plates in the event of suspension, revocation or
40 voluntary cancellation of a license. The director is hereby authorized to
41 designate by identifying symbols on a dealer's license plate the type of
42 dealer's license that the person has been issued. If a dealer has an estab-
43 lished place of business in more than one county, such dealer shall secure
1 a separate and distinct dealer's license and dealer license plates for each
2 established place of business.
3 (b) New motor vehicle dealers and used motor vehicle dealers may
4 authorize use of dealer license plates assigned to such motor vehicle deal-
5 ers as follows:
6 (1) The licensed motor vehicle dealer and such dealer's spouse;
7 (2) the sales manager and all other sales personnel when such man-
8 ager and sales personnel are properly licensed in Kansas, except that no
9 dealer license plate shall be assigned to sales personnel who are working
10 at the established place of business of the dealer less than 20 hours per
12 (3) any employee of such motor vehicle dealer when the use thereof
13 is directly connected to a particular business transaction of such motor
14 vehicle dealer;
15 (4) the customer when operating a motor vehicle in connection with
16 negotiations to purchase such motor vehicle or during a demonstration
17 of such motor vehicle;
18 (5) any school district and any accredited nonpublic school which has
19 entered into an agreement with a dealer to use a motor vehicle as a driver
20 training motor vehicle, as defined in K.S.A. 72-5015, and amendments
21 thereto, in an approved driver training course.
22 (c) A wholesaler dealer may authorize the use of dealer license plates
23 on vehicles purchased by the wholesaler for resale to a retail vehicle dealer
24 as follows:
25 (1) To transport or operate a vehicle to or from a licensed retail or
26 wholesale vehicle dealer for the purpose of buying, selling, or offering or
27 attempting to negotiate a sale of the vehicle to a licensed vehicle dealer;
28 (2) to deliver a vehicle purchased from the wholesale vehicle dealer
29 to a purchasing vehicle dealer.
Salvage vehicle dealers Automotive recyclers may use dealer li-
31 cense plates only on vehicles which they have purchased for salvage, in-
32 cluding dismantling, disassembling or recycling.
33 (e) Insurance companies may use dealer license plates only on vehi-
34 cles purchased or acquired for salvage in the course of business of the
35 insurance company.
36 (f) Lending agencies may use dealer license plates only on vehicles
37 which they have repossessed or are holding for disposition due to repos-
39 (g) Trailer dealers may use dealer license plates only on trailers which
40 they have purchased or own and are holding for resale.
41 (h) Brokers are not entitled to be assigned or to use any dealer license
43 (i) Except as provided above, dealer license plates shall be used only
1 in accordance with the provisions of K.S.A. 8-136, and amendments
2 thereto. This subsection (i) does not apply to K.S.A. 8-2425, and amend-
3 ments thereto, or full-privilege license plates issued thereunder.
4 Sec. 7. K.S.A. 1996 Supp. 8-2408 is hereby amended to read as fol-
5 lows: 8-2408. Except as hereinafter provided, every person licensed as a
6 dealer under provisions of this act shall:
7 (a) On or before the 20th day of each month, file a monthly report,
8 on a form prescribed and furnished by the division of vehicles, listing all
9 sales or transfers, except sales or transfers by a first or second stage man-
10 ufacturer to a vehicle dealer of new or used vehicles, including the name
11 and address of the purchaser or transferee, date of sale, the serial or
12 identification number of the vehicle, and such other information as the
13 division may require.
Salvage vehicle dealers Automotive recyclers shall, in addition to
15 their monthly sales report for used vehicles, if applicable, file a quarterly
16 report on a form prescribed and furnished by the division, listing all ve-
17 hicles for which the major component part containing the vehicle iden-
18 tification number or engine number if manufactured prior to 1981, has
19 been disposed of or sold. The certificate of title or transfer certificate for
20 all vehicles listed must accompany the quarterly report.
21 (c) Make available during regular business hours to any employee of
22 the division or any member of the highway patrol for the purpose of
23 investigation or inspection, all records concerning vehicles purchased,
24 sold or exchanged during the preceding 12 months, including certificates
25 of title on all vehicles owned by the dealership, except those titles sur-
26 rendered pursuant to subsection (b).
27 (d) Whenever a dealer sells or otherwise disposes of such dealer's
28 business, or for any reason suspends or goes out of business as a dealer,
29 such dealer shall notify the division and return the dealer's license and
30 dealer plates, and the division upon receipt of such notice and plates shall
31 cancel the dealer's license, except that such dealer may, upon payment
32 of 50% of the annual fee to the division, have the license and dealer plates
33 assigned to the purchaser of the business.
34 (e) In addition to the requirements of subsection (a), any dealer pay-
35 ing a commission or fee to a broker shall report to the division, on the
36 monthly sales report, the name of the broker and the broker's license
38 (f) Dealers, licensed as brokers must in addition to the requirements
39 of subsection (a) include on the monthly sales reports, the name of the
40 seller, the transferor or dealer that owns the vehicle and whether the
41 seller or the purchaser paid the broker's fee or commission.
42 (g) Lending agencies licensed under this act, which sell two or less
43 repossessed vehicles a month, shall not be required to file the monthly
1 reports under subsection (a), except that such lending agencies shall re-
2 port annually, on a form prescribed and furnished by the division, the
3 total number of sales or transfers of such vehicles.
4 Sec. 8. K.S.A. 1996 Supp. 8-2412 is hereby amended to read as fol-
5 lows: 8-2412. (a) The governor shall appoint eight members to serve on
6 the dealer review board with the individual terms of office for each ap-
7 pointee to run as follows: One new vehicle dealer, one used vehicle dealer
8 and one
salvage vehicle dealer automotive recycler, each to serve for three
9 consecutive years; one new vehicle dealer, one used vehicle dealer, and
10 two additional members both of whom shall be appointed from the public
11 at large, each to serve for two consecutive years; and one representative
12 of a first or second stage manufacturer to serve for a period of one year.
13 Upon the expiration of their respective terms, board members shall be
14 appointed by the governor to serve for three consecutive years.
15 (b) The board shall elect a chairperson from among its members. The
16 chairperson shall serve for a period of one year. The board shall elect
17 successors each subsequent year.
18 (c) Any proceeding conducted by the board shall be construed to be
19 a meeting of the board under this section for each day the proceeding is
20 conducted. To constitute a meeting of the board within the meaning of
21 this section, a quorum of the board must be present and participating.
22 Four members of the board shall constitute a quorum. All final orders
23 shall be in writing and shall be signed by the chairperson and approved
24 by the board.
25 (d) Members of the board attending meetings of such board shall be
26 paid compensation, subsistence allowances, mileage and other expenses
27 as provided in K.S.A. 75-3223, and amendments thereto. In no event shall
28 any member be paid compensation or allowances for more than 15 days
29 in any calendar year.
30 (e) Meetings of the board may be called by the director, the chair-
31 person of the board or any three members of the board, after first giving
32 notice, in writing, at least 10 days prior to such meeting. The notice of
33 any meeting of the board shall state the time and place of such meeting
34 which special meeting may be held at any place within the state of Kansas.
35 Additionally, such notice of the meeting shall state the purpose thereof.
36 (f) The director of vehicles may either appoint or designate a secre-
37 tary for the board. The secretary shall perform, among other things, the
38 following duties: Prepare the agenda for the meetings of the board; pre-
39 pare notice of all meetings and cause the same to be mailed to all board
40 members; take minutes of all meetings of the board and thereafter cause
41 copies thereof to be distributed to all board members; arrange for meet-
42 ing places within the state of Kansas at the direction of the chairperson;
43 prepare vouchers for each board member to submit for expense of atten-
1 dance at meetings; and, such other duties as requested by the board.
2 (g) The board shall be attached to the department of revenue and
3 shall be within the department of revenue as a part thereof. All budgeting,
4 purchasing and related management functions of the board shall be ad-
5 ministered under the direction and supervision of the secretary of reve-
6 nue. The division shall serve as the administrative and enforcement
7 agency of the board in all respects and shall perform such services and
8 duties as it may be legally called upon to perform. In the event the board
9 fails to perform any of its official duties within the time prescribed herein,
10 the division may perform such duties and certify its action to the board
11 for review.
12 Sec. 9. K.S.A. 1996 Supp. 8-2434 is hereby amended to read as fol-
13 lows: 8-2434. It shall be unlawful and constitute a misdemeanor, punish-
14 able by a fine not to exceed $2,500, for any person to do business as a
15 motor vehicle dealer,
salvage vehicle dealer automotive recycler, motor
16 vehicle manufacturer, motor vehicle converter, auction motor vehicle
17 dealer, or salesperson without a license issued by the director. The iso-
18 lated or occasional sale of a vehicle by a person who owned such vehicle
19 shall not constitute the doing of business as a vehicle dealer.
20 Sec. 10. K.S.A. 8-1,136 and 8-2406 and K.S.A. 1996 Supp. 8-1,137,
21 8-2401, 8-2404, 8-2408, 8-2412 and 8-2434 are hereby repealed.
22 Sec. 11. This act shall take effect and be in force from and after
23 January 1, 1998, and its publication in the statute book.