Article 24.--LICENSURE OF VEHICLE SALES AND MANUFACTURE
8-2404.License required; license fees;
bond required, when;
place of business required, when; supplemental place of business;
manual and examination for salesperson; prohibiting brokering of new and used
motor vehicles; exceptions.
(a) No vehicle dealer shall engage in business in this state without obtaining
a license as required by this act. Any vehicle dealer holding a valid license
and acting as a vehicle salesperson shall not be required to secure a
salesperson's license.
(b) No first stage manufacturer, second stage manufacturer, factory branch,
factory representative, distributor branch
or distributor representative shall engage in business in this state without a
license as required by this act, regardless of whether or not
an office or other place of business is maintained in this state for the
purpose of conducting such business.
(c) An application for a license shall be made to the director and shall
contain the information provided for by this section,
together with such other information as may be deemed reasonable and
pertinent, and shall be accompanied by the required fee. The director
may require in the application, or otherwise, information relating to
the applicant's solvency, financial standing, or other pertinent matter
commensurate with the safeguarding of the public interest in the
locality in which the applicant proposes to engage in business, all of
which may be considered by the director in determining the fitness of
the applicant to engage in business as set forth in this section. The
director may require the applicant for licensing to appear at such time
and place as may be designated by the director for examination to enable
the director to determine the accuracy of the facts contained in the
written application, either for initial licensure or renewal thereof.
Every application under this section shall be verified by the applicant.
(d) All licenses shall be granted or refused within 30 days
after application is received by the director. All licenses,
except licenses issued to salespersons, shall expire, unless
previously suspended or revoked, on December 31 of the calendar year for
which they are granted, except that where a complaint respecting the
cancellation, termination or nonrenewal of a sales agreement is in the
process of being heard, no replacement application
shall be considered until a final order is issued by the director.
Applications for renewals, except for renewals of licenses issued to
salespersons, received by the director after February 15 shall be considered as
new applications. All salespersons' licenses issued on or after January 1,
1987, shall expire
on June 30, 1988, and thereafter shall expire, unless previously suspended
or revoked, on June 30 of the calendar year for which they are granted.
Applications for renewals of salespersons' licenses received
by the director
after July 15 shall be considered as new applications. All licenses for
supplemental places of business existing or issued on or after January 1, 1994,
shall expire on December 31, 1994, unless previously expired, suspended or
revoked, and shall thereafter expire on December 31 of the calendar year for
which they are granted, unless previously suspended or revoked.
(e) License fees for each calendar year, or any part thereof shall
be as follows:
(1) For new vehicle dealers, $75;
(2) for distributors, $75;
(3) for wholesalers, $75;
(4) for distributor branches, $75;
(5) for used vehicle dealers, $75;
(6) for first and second stage manufacturers,
$225 plus $75 for each factory branch in
this state;
(7) for factory representatives, $50;
(8) for distributor representatives, $50;
(9) for brokers, $75;
(10) for lending agencies, $50;
(11) for first and second stage converters, $50;
(12) for salvage vehicle dealers, $75;
(13) for auction motor vehicle dealers, $75;
(14) for vehicle salesperson, $25;
(15) for insurance companies, $75;
(16) for vehicle crusher, $75;
(17) for vehicle recycler, $75;
(18) for scrap metal recycler, $75;
(19) for rebuilders, $75; and
(20) for salvage vehicle pool, $75.
Any new vehicle
dealer who is also licensed as a used vehicle dealer shall be required to pay
only one $75 fee for both licenses.
(f) Dealers may establish approved supplemental places
of business within the same
county of their licensure or, with respect to new vehicle dealers, within
their area of responsibility as defined in
their franchise agreement. Those doing so shall be required to pay a
supplemental license fee
of $35. In addition to any other requirements, new vehicle
dealers seeking
to establish supplemental places of business shall also comply with the
provisions of K.S.A. 8-2430 through 8-2432, and amendments thereto.
A new vehicle
dealer establishing a supplemental place of business in a county other than
such dealer's county of licensure but within such dealer's area of
responsibility as defined in such dealer's franchise agreement shall be
licensed only to do business as a new motor vehicle dealer in new motor
vehicles at such supplemental place of business.
Original inspections by the division of a proposed
established place
of business shall be made at no charge except that a $30 fee
shall be charged by
the division for each additional inspection the division must make of such
premises in order to approve the same.
(g) The license of all persons licensed under the provisions of this
act shall state the address of the established place of business, office,
branch or supplemental place of business and
must be conspicuously displayed therein. The director shall
endorse a change of address on a license without charge if: (1) The change of
address of an established place of business, office, branch or supplemental
place of business is within the same county; or (2) the change of address of a
supplemental place of business, with respect to a new vehicle dealer, is within
such dealer's area of responsibility as defined in their franchise agreement.
A change of
address of the established place of business, office or branch to a
different county shall require a new license and payment
of the required fees but such new license and fees shall not be required for
a change of address of a supplemental place of business, with respect to a new
vehicle dealer, to a different county but within the dealer's area of
responsibility as defined in their franchise agreement.
(h) Every salesperson, factory representative or distributor
representative shall carry on their person a certification that
the person
holds a valid state license. The certification shall name the person's
employer and shall be displayed upon request. An original copy of the
state license for a vehicle salesperson shall be
mailed or otherwise
delivered by the division to the employer of the salesperson for public
display in the employer's established place of business. When a salesperson
ceases to be employed as such, the former employer shall mail
or otherwise return the original copy of the employee's state license to
the division. A salesperson, factory representative or
distributor representative who terminates employment with one employer
may file an application with the director to transfer the person's state
license in the name of another employer. The application shall be
accompanied by a $12 transfer fee. A salesperson, factory
representative or
distributor representative who terminates
employment, and does not transfer the state license, shall mail
or otherwise return the certification that the person
holds a valid state license to the division.
(i) If the director has reasonable cause to doubt the financial
responsibility or the compliance by the applicant or licensee with the
provisions of this act, the director may require the applicant or
licensee to furnish and maintain a bond in such form, amount and with
such sureties as the director approves, but such amount shall be not
less than $5,000 nor more than $20,000, conditioned upon the applicant
or licensee complying
with the provisions of the statutes applicable to the licensee and as
indemnity for any loss sustained by a retail or wholesale
buyer or seller of a vehicle by
reason of any act by
the licensee constituting grounds for suspension or revocation of the
license.
Every applicant or licensee who is or applies to be a used vehicle
dealer or a new vehicle dealer shall furnish and maintain a bond in
such form, amount and with such sureties as the director approves, conditioned
upon the applicant or
licensee complying
with the provisions of the statutes applicable to the licensee and as
indemnity for any loss sustained by a retail or wholesale
buyer or seller of a vehicle by
reason of any act by the
licensee in violation of any act which constitutes
grounds for suspension or revocation of the license.
The amount of such bond shall be as follows: (1) For any
new applicant $30,000; or (2) for any current licensee, $15,000, until the
renewal date of the existing bond, then $30,000, except that on and
after January 1, 2003, the amount of such bond shall be $30,000.
To comply with this subsection, every
bond shall be a corporate surety bond issued by a
company authorized to do business in the state of Kansas and shall be
executed in the name of the state of Kansas for the benefit of any
aggrieved retail or wholesale buyer or seller of a vehicle.
The aggregate liability of the surety for all breaches
of the conditions of the bond in no event shall exceed the amount of
such bond. The surety on the bond shall have the right to cancel the
bond by giving 30 days' notice to the director, and thereafter
the surety shall be relieved of liability for any breach of condition
occurring after the effective date of cancellation. Bonding
requirements shall not apply to first or second stage manufacturers,
factory branches, factory representatives or salespersons.
Upon determination by the director that a judgment from a Kansas
court of competent jurisdiction is a final judgment and that the judgment
resulted from an act in violation of this act or would constitute grounds for
suspension, revocation, refusal to renew a license or administrative fine
pursuant to K.S.A. 8-2411, and amendments thereto, the
proceeds of the bond on deposit or in lieu of bond provided by
subsection (j), shall be paid.
The determination by the director
under this subsection is hereby specifically exempted from the Kansas
administrative procedure act (K.S.A. 77-501 through 77-549, and amendments
thereto,) and the act for judicial review and civil enforcement of agency
actions (K.S.A. 77-601 through 77-627, and amendments thereto). Any proceeding
to enforce payment against a surety following a determination by the director
shall be prosecuted by the judgment creditor named in the final judgment
sought to be enforced. Upon a finding by the court in such enforcement
proceeding that a surety has wrongfully failed or refused to pay, the court
shall award reasonable attorney fees to the judgment creditor.
(j) An applicant or licensee may elect to satisfy the bonding
requirements of subsection (i) by depositing with the state treasurer cash,
negotiable bonds of the United States or of the state of Kansas or negotiable
certificates of deposit of any bank organized under the laws of the United
States or of the state of Kansas.
On or after January 1, 2003, the
amount of cash, negotiable bonds of the United States or of the state of Kansas
or negotiable certificates of deposit of any bank organized under the laws of
the United States or of the state of Kansas deposited with the state treasurer
shall be in an amount of no less than $30,000.
When negotiable bonds or negotiable certificates of deposit
have been deposited with the state treasurer to satisfy the
bonding requirements of subsection (i), such negotiable bonds or negotiable
certificates of deposit shall remain on deposit
with the state treasurer for a period of not less than two years after the
date of delivery of the certificate of title to the motor vehicle which was the
subject of the last motor vehicle sales transaction in which the licensee
engaged prior to termination of the licensee's license. In the event a
licensee elects to deposit a surety bond in lieu of the negotiable bonds
or negotiable certificates of deposit previously deposited
with the state treasurer, the state treasurer shall not release the negotiable
bonds or negotiable certificates of deposits
until at least two years after the date of delivery of the certificate of
title to the motor vehicle which was the subject of the last motor vehicle
sales transaction in which the licensee engaged prior to the date of the
deposit of the surety bond.
The cash deposit or market value of any such securities shall be
equal to or greater than the amount of the bond required for the bonded
area and any interest on those funds shall accrue to the benefit of the
depositor.
(k) No license shall be issued by the director to any person to act
as a new or used dealer, wholesaler, broker, salvage vehicle
dealer, auction motor vehicle dealer, vehicle crusher, vehicle recycler,
rebuilder, scrap metal recycler, salvage vehicle pool, second stage
manufacturer,
first
stage converter, second stage converter or distributor unless the
applicant for the vehicle dealer's license maintains an established
place of business which has been inspected and approved by the division.
First stage manufacturers, factory branches, factory representatives,
distributor branches, distributor representatives and lending agencies
are not required to maintain an established place of business to be
issued a license.
(l) Dealers required under the provisions of this act to
maintain an established place of business shall own or have leased and
use sufficient lot space to display vehicles at least equal
in number to
the number of dealer license plates the dealer has had assigned.
(m) A sign with durable lettering at least 10 inches in height and easily
visible from the street identifying the
established place of business shall be displayed by
every vehicle dealer. Notwithstanding the other provisions of this
subsection, the height of lettering of the required sign may be less
than 10 inches as necessary to comply with local zoning regulations.
(n) If the established or supplemental place of business or
lot is zoned, approval
must be secured from the proper zoning authority and proof that the use
complies with the applicable zoning law, ordinance or resolution must be
furnished to the director by the applicant for licensing.
(o) An established or supplemental place of business, otherwise meeting the
requirements of this act may be used by a dealer to conduct more
than one business, provided that suitable space and facilities exist
therein to properly conduct the business of a vehicle dealer.
(p) If a supplemental place of business is not operated on a
continuous, year-round basis, the dealer shall give the department 15 days'
notice as to the dates on which the dealer will be engaged in business at
the supplemental place of business.
(q) Any vehicle dealer selling, exchanging or transferring or
causing to be sold, exchanged or transferred new vehicles in this state
must satisfactorily demonstrate to the director that such vehicle dealer
has a bona fide franchise agreement
with the first or second stage manufacturer or distributor of the vehicle, to
sell, exchange or transfer the same or to cause to be sold, exchanged or
transferred.
No person may engage in the business of buying, selling or exchanging
new motor vehicles, either directly or indirectly, unless such person holds
a license issued by the director for the make or makes of new motor
vehicles being bought, sold or exchanged, or unless a person engaged in
such activities is not required to be licensed or acts as an employee of a
licensee and such acts are only incidentally performed. For the purposes of
this section, engaged in the business of buying, selling or exchanging new
motor vehicles, either directly or indirectly, includes: (1) Displaying new
motor vehicles on a lot or showroom; (2) advertising new motor vehicles,
unless the person's business primarily includes the business of
broadcasting, printing, publishing or advertising for others in their own
names; or (3) regularly or actively soliciting or referring buyers for new
motor vehicles.
(r) No person may engage in the business of buying, selling or exchanging
used motor vehicles, either directly or indirectly, unless such person
holds a license issued by the director for used motor vehicles being
bought, sold or exchanged, or unless a person engaged in such activities is
not required to be licensed or acts as an employee of a licensee and such
acts are only incidentally performed. For the purposes of this section,
engaged in the business of buying, selling or exchanging used motor vehicles,
either directly or indirectly, includes: (1) Displaying used motor
vehicles on a lot or showroom; (2) advertising used motor vehicles, unless
the person's business primarily includes the business of broadcasting,
printing, publishing or advertising for others in their own names; or (3)
regularly or actively soliciting buyers for used motor vehicles.
(s) The director of vehicles shall publish a suitable Kansas
vehicle salesperson's manual. Before a vehicle salesperson's license is
issued, the applicant for an original license or
renewal thereof shall be required to pass a written examination based upon
information in the manual.
(t) No new license shall be issued nor any license renewed to any
person to act as a salvage vehicle dealer until the division has received
evidence of compliance with the junkyard and salvage control act as set
forth in K.S.A. 68-2201 et seq., and amendments thereto.
(u) On and after the effective date of this act, no person shall act
as a broker in the advertising, buying or selling of any new or used motor
vehicle. Nothing herein
shall be construed to prohibit a person duly licensed under the
requirements of this act from acting as a broker in buying or selling a
recreational
vehicle as defined by subsection (f) of K.S.A. 75-1212, and amendments
thereto, when the recreational vehicle subject to sale or purchase is a
used recreational vehicle which has been previously titled and
independently owned by another person for a period of 45 days or more, or
is a new or used recreational vehicle repossessed by a creditor holding
security in such vehicle.
(v) Nothing herein shall be construed to prohibit a person not
otherwise required to be licensed under this act from selling such person's
own vehicle as an isolated and occasional sale.
History: L. 1980, ch. 36, § 4;
L. 1980, ch. 28, § 1;
L. 1981, ch. 48, § 4;
L. 1982, ch. 49, § 1;
L. 1983, ch. 43, § 1;
L. 1984,ch. 46, § 1;
L. 1985, ch. 54, § 2;
L. 1986, ch. 50, § 1;
L. 1987, ch. 52, § 1;
L. 1988, ch. 52, § 2;
L. 1989, ch. 46, § 1;
L. 1990, ch. 52, § 3;
L. 1991, ch. 33, § 21;
L. 1992, ch. 44, § 2;
L. 1993, ch. 252, § 6;
L. 1994, ch. 302, § 4;
L. 2001, ch. 138, § 1;
L. 2002, ch. 102, § 1;
L. 2009, ch. 63, § 4; July 1.
Article 24.--LICENSURE OF VEHICLE SALES AND MANUFACTURE
8-2404.License required; license fees;
bond required, when;
place of business required, when; supplemental place of business;
manual and examination for salesperson; prohibiting brokering of new and used
motor vehicles; exceptions.
(a) No vehicle dealer shall engage in business in this state without obtaining
a license as required by this act. Any vehicle dealer holding a valid license
and acting as a vehicle salesperson shall not be required to secure a
salesperson's license.
(b) No first stage manufacturer, second stage manufacturer, factory branch,
factory representative, distributor branch
or distributor representative shall engage in business in this state without a
license as required by this act, regardless of whether or not
an office or other place of business is maintained in this state for the
purpose of conducting such business.
(c) An application for a license shall be made to the director and shall
contain the information provided for by this section,
together with such other information as may be deemed reasonable and
pertinent, and shall be accompanied by the required fee. The director
may require in the application, or otherwise, information relating to
the applicant's solvency, financial standing, or other pertinent matter
commensurate with the safeguarding of the public interest in the
locality in which the applicant proposes to engage in business, all of
which may be considered by the director in determining the fitness of
the applicant to engage in business as set forth in this section. The
director may require the applicant for licensing to appear at such time
and place as may be designated by the director for examination to enable
the director to determine the accuracy of the facts contained in the
written application, either for initial licensure or renewal thereof.
Every application under this section shall be verified by the applicant.
(d) All licenses shall be granted or refused within 30 days
after application is received by the director. All licenses,
except licenses issued to salespersons, shall expire, unless
previously suspended or revoked, on December 31 of the calendar year for
which they are granted, except that where a complaint respecting the
cancellation, termination or nonrenewal of a sales agreement is in the
process of being heard, no replacement application
shall be considered until a final order is issued by the director.
Applications for renewals, except for renewals of licenses issued to
salespersons, received by the director after February 15 shall be considered as
new applications. All salespersons' licenses issued on or after January 1,
1987, shall expire
on June 30, 1988, and thereafter shall expire, unless previously suspended
or revoked, on June 30 of the calendar year for which they are granted.
Applications for renewals of salespersons' licenses received
by the director
after July 15 shall be considered as new applications. All licenses for
supplemental places of business existing or issued on or after January 1, 1994,
shall expire on December 31, 1994, unless previously expired, suspended or
revoked, and shall thereafter expire on December 31 of the calendar year for
which they are granted, unless previously suspended or revoked.
(e) License fees for each calendar year, or any part thereof shall
be as follows:
(1) For new vehicle dealers, $75;
(2) for distributors, $75;
(3) for wholesalers, $75;
(4) for distributor branches, $75;
(5) for used vehicle dealers, $75;
(6) for first and second stage manufacturers,
$225 plus $75 for each factory branch in
this state;
(7) for factory representatives, $50;
(8) for distributor representatives, $50;
(9) for brokers, $75;
(10) for lending agencies, $50;
(11) for first and second stage converters, $50;
(12) for salvage vehicle dealers, $75;
(13) for auction motor vehicle dealers, $75;
(14) for vehicle salesperson, $25;
(15) for insurance companies, $75;
(16) for vehicle crusher, $75;
(17) for vehicle recycler, $75;
(18) for scrap metal recycler, $75;
(19) for rebuilders, $75; and
(20) for salvage vehicle pool, $75.
Any new vehicle
dealer who is also licensed as a used vehicle dealer shall be required to pay
only one $75 fee for both licenses.
(f) Dealers may establish approved supplemental places
of business within the same
county of their licensure or, with respect to new vehicle dealers, within
their area of responsibility as defined in
their franchise agreement. Those doing so shall be required to pay a
supplemental license fee
of $35. In addition to any other requirements, new vehicle
dealers seeking
to establish supplemental places of business shall also comply with the
provisions of K.S.A. 8-2430 through 8-2432, and amendments thereto.
A new vehicle
dealer establishing a supplemental place of business in a county other than
such dealer's county of licensure but within such dealer's area of
responsibility as defined in such dealer's franchise agreement shall be
licensed only to do business as a new motor vehicle dealer in new motor
vehicles at such supplemental place of business.
Original inspections by the division of a proposed
established place
of business shall be made at no charge except that a $30 fee
shall be charged by
the division for each additional inspection the division must make of such
premises in order to approve the same.
(g) The license of all persons licensed under the provisions of this
act shall state the address of the established place of business, office,
branch or supplemental place of business and
must be conspicuously displayed therein. The director shall
endorse a change of address on a license without charge if: (1) The change of
address of an established place of business, office, branch or supplemental
place of business is within the same county; or (2) the change of address of a
supplemental place of business, with respect to a new vehicle dealer, is within
such dealer's area of responsibility as defined in their franchise agreement.
A change of
address of the established place of business, office or branch to a
different county shall require a new license and payment
of the required fees but such new license and fees shall not be required for
a change of address of a supplemental place of business, with respect to a new
vehicle dealer, to a different county but within the dealer's area of
responsibility as defined in their franchise agreement.
(h) Every salesperson, factory representative or distributor
representative shall carry on their person a certification that
the person
holds a valid state license. The certification shall name the person's
employer and shall be displayed upon request. An original copy of the
state license for a vehicle salesperson shall be
mailed or otherwise
delivered by the division to the employer of the salesperson for public
display in the employer's established place of business. When a salesperson
ceases to be employed as such, the former employer shall mail
or otherwise return the original copy of the employee's state license to
the division. A salesperson, factory representative or
distributor representative who terminates employment with one employer
may file an application with the director to transfer the person's state
license in the name of another employer. The application shall be
accompanied by a $12 transfer fee. A salesperson, factory
representative or
distributor representative who terminates
employment, and does not transfer the state license, shall mail
or otherwise return the certification that the person
holds a valid state license to the division.
(i) If the director has reasonable cause to doubt the financial
responsibility or the compliance by the applicant or licensee with the
provisions of this act, the director may require the applicant or
licensee to furnish and maintain a bond in such form, amount and with
such sureties as the director approves, but such amount shall be not
less than $5,000 nor more than $20,000, conditioned upon the applicant
or licensee complying
with the provisions of the statutes applicable to the licensee and as
indemnity for any loss sustained by a retail or wholesale
buyer or seller of a vehicle by
reason of any act by
the licensee constituting grounds for suspension or revocation of the
license.
Every applicant or licensee who is or applies to be a used vehicle
dealer or a new vehicle dealer shall furnish and maintain a bond in
such form, amount and with such sureties as the director approves, conditioned
upon the applicant or
licensee complying
with the provisions of the statutes applicable to the licensee and as
indemnity for any loss sustained by a retail or wholesale
buyer or seller of a vehicle by
reason of any act by the
licensee in violation of any act which constitutes
grounds for suspension or revocation of the license.
The amount of such bond shall be as follows: (1) For any
new applicant $30,000; or (2) for any current licensee, $15,000, until the
renewal date of the existing bond, then $30,000, except that on and
after January 1, 2003, the amount of such bond shall be $30,000.
To comply with this subsection, every
bond shall be a corporate surety bond issued by a
company authorized to do business in the state of Kansas and shall be
executed in the name of the state of Kansas for the benefit of any
aggrieved retail or wholesale buyer or seller of a vehicle.
The aggregate liability of the surety for all breaches
of the conditions of the bond in no event shall exceed the amount of
such bond. The surety on the bond shall have the right to cancel the
bond by giving 30 days' notice to the director, and thereafter
the surety shall be relieved of liability for any breach of condition
occurring after the effective date of cancellation. Bonding
requirements shall not apply to first or second stage manufacturers,
factory branches, factory representatives or salespersons.
Upon determination by the director that a judgment from a Kansas
court of competent jurisdiction is a final judgment and that the judgment
resulted from an act in violation of this act or would constitute grounds for
suspension, revocation, refusal to renew a license or administrative fine
pursuant to K.S.A. 8-2411, and amendments thereto, the
proceeds of the bond on deposit or in lieu of bond provided by
subsection (j), shall be paid.
The determination by the director
under this subsection is hereby specifically exempted from the Kansas
administrative procedure act (K.S.A. 77-501 through 77-549, and amendments
thereto,) and the act for judicial review and civil enforcement of agency
actions (K.S.A. 77-601 through 77-627, and amendments thereto). Any proceeding
to enforce payment against a surety following a determination by the director
shall be prosecuted by the judgment creditor named in the final judgment
sought to be enforced. Upon a finding by the court in such enforcement
proceeding that a surety has wrongfully failed or refused to pay, the court
shall award reasonable attorney fees to the judgment creditor.
(j) An applicant or licensee may elect to satisfy the bonding
requirements of subsection (i) by depositing with the state treasurer cash,
negotiable bonds of the United States or of the state of Kansas or negotiable
certificates of deposit of any bank organized under the laws of the United
States or of the state of Kansas.
On or after January 1, 2003, the
amount of cash, negotiable bonds of the United States or of the state of Kansas
or negotiable certificates of deposit of any bank organized under the laws of
the United States or of the state of Kansas deposited with the state treasurer
shall be in an amount of no less than $30,000.
When negotiable bonds or negotiable certificates of deposit
have been deposited with the state treasurer to satisfy the
bonding requirements of subsection (i), such negotiable bonds or negotiable
certificates of deposit shall remain on deposit
with the state treasurer for a period of not less than two years after the
date of delivery of the certificate of title to the motor vehicle which was the
subject of the last motor vehicle sales transaction in which the licensee
engaged prior to termination of the licensee's license. In the event a
licensee elects to deposit a surety bond in lieu of the negotiable bonds
or negotiable certificates of deposit previously deposited
with the state treasurer, the state treasurer shall not release the negotiable
bonds or negotiable certificates of deposits
until at least two years after the date of delivery of the certificate of
title to the motor vehicle which was the subject of the last motor vehicle
sales transaction in which the licensee engaged prior to the date of the
deposit of the surety bond.
The cash deposit or market value of any such securities shall be
equal to or greater than the amount of the bond required for the bonded
area and any interest on those funds shall accrue to the benefit of the
depositor.
(k) No license shall be issued by the director to any person to act
as a new or used dealer, wholesaler, broker, salvage vehicle
dealer, auction motor vehicle dealer, vehicle crusher, vehicle recycler,
rebuilder, scrap metal recycler, salvage vehicle pool, second stage
manufacturer,
first
stage converter, second stage converter or distributor unless the
applicant for the vehicle dealer's license maintains an established
place of business which has been inspected and approved by the division.
First stage manufacturers, factory branches, factory representatives,
distributor branches, distributor representatives and lending agencies
are not required to maintain an established place of business to be
issued a license.
(l) Dealers required under the provisions of this act to
maintain an established place of business shall own or have leased and
use sufficient lot space to display vehicles at least equal
in number to
the number of dealer license plates the dealer has had assigned.
(m) A sign with durable lettering at least 10 inches in height and easily
visible from the street identifying the
established place of business shall be displayed by
every vehicle dealer. Notwithstanding the other provisions of this
subsection, the height of lettering of the required sign may be less
than 10 inches as necessary to comply with local zoning regulations.
(n) If the established or supplemental place of business or
lot is zoned, approval
must be secured from the proper zoning authority and proof that the use
complies with the applicable zoning law, ordinance or resolution must be
furnished to the director by the applicant for licensing.
(o) An established or supplemental place of business, otherwise meeting the
requirements of this act may be used by a dealer to conduct more
than one business, provided that suitable space and facilities exist
therein to properly conduct the business of a vehicle dealer.
(p) If a supplemental place of business is not operated on a
continuous, year-round basis, the dealer shall give the department 15 days'
notice as to the dates on which the dealer will be engaged in business at
the supplemental place of business.
(q) Any vehicle dealer selling, exchanging or transferring or
causing to be sold, exchanged or transferred new vehicles in this state
must satisfactorily demonstrate to the director that such vehicle dealer
has a bona fide franchise agreement
with the first or second stage manufacturer or distributor of the vehicle, to
sell, exchange or transfer the same or to cause to be sold, exchanged or
transferred.
No person may engage in the business of buying, selling or exchanging
new motor vehicles, either directly or indirectly, unless such person holds
a license issued by the director for the make or makes of new motor
vehicles being bought, sold or exchanged, or unless a person engaged in
such activities is not required to be licensed or acts as an employee of a
licensee and such acts are only incidentally performed. For the purposes of
this section, engaged in the business of buying, selling or exchanging new
motor vehicles, either directly or indirectly, includes: (1) Displaying new
motor vehicles on a lot or showroom; (2) advertising new motor vehicles,
unless the person's business primarily includes the business of
broadcasting, printing, publishing or advertising for others in their own
names; or (3) regularly or actively soliciting or referring buyers for new
motor vehicles.
(r) No person may engage in the business of buying, selling or exchanging
used motor vehicles, either directly or indirectly, unless such person
holds a license issued by the director for used motor vehicles being
bought, sold or exchanged, or unless a person engaged in such activities is
not required to be licensed or acts as an employee of a licensee and such
acts are only incidentally performed. For the purposes of this section,
engaged in the business of buying, selling or exchanging used motor vehicles,
either directly or indirectly, includes: (1) Displaying used motor
vehicles on a lot or showroom; (2) advertising used motor vehicles, unless
the person's business primarily includes the business of broadcasting,
printing, publishing or advertising for others in their own names; or (3)
regularly or actively soliciting buyers for used motor vehicles.
(s) The director of vehicles shall publish a suitable Kansas
vehicle salesperson's manual. Before a vehicle salesperson's license is
issued, the applicant for an original license or
renewal thereof shall be required to pass a written examination based upon
information in the manual.
(t) No new license shall be issued nor any license renewed to any
person to act as a salvage vehicle dealer until the division has received
evidence of compliance with the junkyard and salvage control act as set
forth in K.S.A. 68-2201 et seq., and amendments thereto.
(u) On and after the effective date of this act, no person shall act
as a broker in the advertising, buying or selling of any new or used motor
vehicle. Nothing herein
shall be construed to prohibit a person duly licensed under the
requirements of this act from acting as a broker in buying or selling a
recreational
vehicle as defined by subsection (f) of K.S.A. 75-1212, and amendments
thereto, when the recreational vehicle subject to sale or purchase is a
used recreational vehicle which has been previously titled and
independently owned by another person for a period of 45 days or more, or
is a new or used recreational vehicle repossessed by a creditor holding
security in such vehicle.
(v) Nothing herein shall be construed to prohibit a person not
otherwise required to be licensed under this act from selling such person's
own vehicle as an isolated and occasional sale.
History: L. 1980, ch. 36, § 4;
L. 1980, ch. 28, § 1;
L. 1981, ch. 48, § 4;
L. 1982, ch. 49, § 1;
L. 1983, ch. 43, § 1;
L. 1984,ch. 46, § 1;
L. 1985, ch. 54, § 2;
L. 1986, ch. 50, § 1;
L. 1987, ch. 52, § 1;
L. 1988, ch. 52, § 2;
L. 1989, ch. 46, § 1;
L. 1990, ch. 52, § 3;
L. 1991, ch. 33, § 21;
L. 1992, ch. 44, § 2;
L. 1993, ch. 252, § 6;
L. 1994, ch. 302, § 4;
L. 2001, ch. 138, § 1;
L. 2002, ch. 102, § 1;
L. 2009, ch. 63, § 4; July 1.
Article 24.--LICENSURE OF VEHICLE SALES AND MANUFACTURE
8-2404.License required; license fees;
bond required, when;
place of business required, when; supplemental place of business;
manual and examination for salesperson; prohibiting brokering of new and used
motor vehicles; exceptions.
(a) No vehicle dealer shall engage in business in this state without obtaining
a license as required by this act. Any vehicle dealer holding a valid license
and acting as a vehicle salesperson shall not be required to secure a
salesperson's license.
(b) No first stage manufacturer, second stage manufacturer, factory branch,
factory representative, distributor branch
or distributor representative shall engage in business in this state without a
license as required by this act, regardless of whether or not
an office or other place of business is maintained in this state for the
purpose of conducting such business.
(c) An application for a license shall be made to the director and shall
contain the information provided for by this section,
together with such other information as may be deemed reasonable and
pertinent, and shall be accompanied by the required fee. The director
may require in the application, or otherwise, information relating to
the applicant's solvency, financial standing, or other pertinent matter
commensurate with the safeguarding of the public interest in the
locality in which the applicant proposes to engage in business, all of
which may be considered by the director in determining the fitness of
the applicant to engage in business as set forth in this section. The
director may require the applicant for licensing to appear at such time
and place as may be designated by the director for examination to enable
the director to determine the accuracy of the facts contained in the
written application, either for initial licensure or renewal thereof.
Every application under this section shall be verified by the applicant.
(d) All licenses shall be granted or refused within 30 days
after application is received by the director. All licenses,
except licenses issued to salespersons, shall expire, unless
previously suspended or revoked, on December 31 of the calendar year for
which they are granted, except that where a complaint respecting the
cancellation, termination or nonrenewal of a sales agreement is in the
process of being heard, no replacement application
shall be considered until a final order is issued by the director.
Applications for renewals, except for renewals of licenses issued to
salespersons, received by the director after February 15 shall be considered as
new applications. All salespersons' licenses issued on or after January 1,
1987, shall expire
on June 30, 1988, and thereafter shall expire, unless previously suspended
or revoked, on June 30 of the calendar year for which they are granted.
Applications for renewals of salespersons' licenses received
by the director
after July 15 shall be considered as new applications. All licenses for
supplemental places of business existing or issued on or after January 1, 1994,
shall expire on December 31, 1994, unless previously expired, suspended or
revoked, and shall thereafter expire on December 31 of the calendar year for
which they are granted, unless previously suspended or revoked.
(e) License fees for each calendar year, or any part thereof shall
be as follows:
(1) For new vehicle dealers, $75;
(2) for distributors, $75;
(3) for wholesalers, $75;
(4) for distributor branches, $75;
(5) for used vehicle dealers, $75;
(6) for first and second stage manufacturers,
$225 plus $75 for each factory branch in
this state;
(7) for factory representatives, $50;
(8) for distributor representatives, $50;
(9) for brokers, $75;
(10) for lending agencies, $50;
(11) for first and second stage converters, $50;
(12) for salvage vehicle dealers, $75;
(13) for auction motor vehicle dealers, $75;
(14) for vehicle salesperson, $25;
(15) for insurance companies, $75;
(16) for vehicle crusher, $75;
(17) for vehicle recycler, $75;
(18) for scrap metal recycler, $75;
(19) for rebuilders, $75; and
(20) for salvage vehicle pool, $75.
Any new vehicle
dealer who is also licensed as a used vehicle dealer shall be required to pay
only one $75 fee for both licenses.
(f) Dealers may establish approved supplemental places
of business within the same
county of their licensure or, with respect to new vehicle dealers, within
their area of responsibility as defined in
their franchise agreement. Those doing so shall be required to pay a
supplemental license fee
of $35. In addition to any other requirements, new vehicle
dealers seeking
to establish supplemental places of business shall also comply with the
provisions of K.S.A. 8-2430 through 8-2432, and amendments thereto.
A new vehicle
dealer establishing a supplemental place of business in a county other than
such dealer's county of licensure but within such dealer's area of
responsibility as defined in such dealer's franchise agreement shall be
licensed only to do business as a new motor vehicle dealer in new motor
vehicles at such supplemental place of business.
Original inspections by the division of a proposed
established place
of business shall be made at no charge except that a $30 fee
shall be charged by
the division for each additional inspection the division must make of such
premises in order to approve the same.
(g) The license of all persons licensed under the provisions of this
act shall state the address of the established place of business, office,
branch or supplemental place of business and
must be conspicuously displayed therein. The director shall
endorse a change of address on a license without charge if: (1) The change of
address of an established place of business, office, branch or supplemental
place of business is within the same county; or (2) the change of address of a
supplemental place of business, with respect to a new vehicle dealer, is within
such dealer's area of responsibility as defined in their franchise agreement.
A change of
address of the established place of business, office or branch to a
different county shall require a new license and payment
of the required fees but such new license and fees shall not be required for
a change of address of a supplemental place of business, with respect to a new
vehicle dealer, to a different county but within the dealer's area of
responsibility as defined in their franchise agreement.
(h) Every salesperson, factory representative or distributor
representative shall carry on their person a certification that
the person
holds a valid state license. The certification shall name the person's
employer and shall be displayed upon request. An original copy of the
state license for a vehicle salesperson shall be
mailed or otherwise
delivered by the division to the employer of the salesperson for public
display in the employer's established place of business. When a salesperson
ceases to be employed as such, the former employer shall mail
or otherwise return the original copy of the employee's state license to
the division. A salesperson, factory representative or
distributor representative who terminates employment with one employer
may file an application with the director to transfer the person's state
license in the name of another employer. The application shall be
accompanied by a $12 transfer fee. A salesperson, factory
representative or
distributor representative who terminates
employment, and does not transfer the state license, shall mail
or otherwise return the certification that the person
holds a valid state license to the division.
(i) If the director has reasonable cause to doubt the financial
responsibility or the compliance by the applicant or licensee with the
provisions of this act, the director may require the applicant or
licensee to furnish and maintain a bond in such form, amount and with
such sureties as the director approves, but such amount shall be not
less than $5,000 nor more than $20,000, conditioned upon the applicant
or licensee complying
with the provisions of the statutes applicable to the licensee and as
indemnity for any loss sustained by a retail or wholesale
buyer or seller of a vehicle by
reason of any act by
the licensee constituting grounds for suspension or revocation of the
license.
Every applicant or licensee who is or applies to be a used vehicle
dealer or a new vehicle dealer shall furnish and maintain a bond in
such form, amount and with such sureties as the director approves, conditioned
upon the applicant or
licensee complying
with the provisions of the statutes applicable to the licensee and as
indemnity for any loss sustained by a retail or wholesale
buyer or seller of a vehicle by
reason of any act by the
licensee in violation of any act which constitutes
grounds for suspension or revocation of the license.
The amount of such bond shall be as follows: (1) For any
new applicant $30,000; or (2) for any current licensee, $15,000, until the
renewal date of the existing bond, then $30,000, except that on and
after January 1, 2003, the amount of such bond shall be $30,000.
To comply with this subsection, every
bond shall be a corporate surety bond issued by a
company authorized to do business in the state of Kansas and shall be
executed in the name of the state of Kansas for the benefit of any
aggrieved retail or wholesale buyer or seller of a vehicle.
The aggregate liability of the surety for all breaches
of the conditions of the bond in no event shall exceed the amount of
such bond. The surety on the bond shall have the right to cancel the
bond by giving 30 days' notice to the director, and thereafter
the surety shall be relieved of liability for any breach of condition
occurring after the effective date of cancellation. Bonding
requirements shall not apply to first or second stage manufacturers,
factory branches, factory representatives or salespersons.
Upon determination by the director that a judgment from a Kansas
court of competent jurisdiction is a final judgment and that the judgment
resulted from an act in violation of this act or would constitute grounds for
suspension, revocation, refusal to renew a license or administrative fine
pursuant to K.S.A. 8-2411, and amendments thereto, the
proceeds of the bond on deposit or in lieu of bond provided by
subsection (j), shall be paid.
The determination by the director
under this subsection is hereby specifically exempted from the Kansas
administrative procedure act (K.S.A. 77-501 through 77-549, and amendments
thereto,) and the act for judicial review and civil enforcement of agency
actions (K.S.A. 77-601 through 77-627, and amendments thereto). Any proceeding
to enforce payment against a surety following a determination by the director
shall be prosecuted by the judgment creditor named in the final judgment
sought to be enforced. Upon a finding by the court in such enforcement
proceeding that a surety has wrongfully failed or refused to pay, the court
shall award reasonable attorney fees to the judgment creditor.
(j) An applicant or licensee may elect to satisfy the bonding
requirements of subsection (i) by depositing with the state treasurer cash,
negotiable bonds of the United States or of the state of Kansas or negotiable
certificates of deposit of any bank organized under the laws of the United
States or of the state of Kansas.
On or after January 1, 2003, the
amount of cash, negotiable bonds of the United States or of the state of Kansas
or negotiable certificates of deposit of any bank organized under the laws of
the United States or of the state of Kansas deposited with the state treasurer
shall be in an amount of no less than $30,000.
When negotiable bonds or negotiable certificates of deposit
have been deposited with the state treasurer to satisfy the
bonding requirements of subsection (i), such negotiable bonds or negotiable
certificates of deposit shall remain on deposit
with the state treasurer for a period of not less than two years after the
date of delivery of the certificate of title to the motor vehicle which was the
subject of the last motor vehicle sales transaction in which the licensee
engaged prior to termination of the licensee's license. In the event a
licensee elects to deposit a surety bond in lieu of the negotiable bonds
or negotiable certificates of deposit previously deposited
with the state treasurer, the state treasurer shall not release the negotiable
bonds or negotiable certificates of deposits
until at least two years after the date of delivery of the certificate of
title to the motor vehicle which was the subject of the last motor vehicle
sales transaction in which the licensee engaged prior to the date of the
deposit of the surety bond.
The cash deposit or market value of any such securities shall be
equal to or greater than the amount of the bond required for the bonded
area and any interest on those funds shall accrue to the benefit of the
depositor.
(k) No license shall be issued by the director to any person to act
as a new or used dealer, wholesaler, broker, salvage vehicle
dealer, auction motor vehicle dealer, vehicle crusher, vehicle recycler,
rebuilder, scrap metal recycler, salvage vehicle pool, second stage
manufacturer,
first
stage converter, second stage converter or distributor unless the
applicant for the vehicle dealer's license maintains an established
place of business which has been inspected and approved by the division.
First stage manufacturers, factory branches, factory representatives,
distributor branches, distributor representatives and lending agencies
are not required to maintain an established place of business to be
issued a license.
(l) Dealers required under the provisions of this act to
maintain an established place of business shall own or have leased and
use sufficient lot space to display vehicles at least equal
in number to
the number of dealer license plates the dealer has had assigned.
(m) A sign with durable lettering at least 10 inches in height and easily
visible from the street identifying the
established place of business shall be displayed by
every vehicle dealer. Notwithstanding the other provisions of this
subsection, the height of lettering of the required sign may be less
than 10 inches as necessary to comply with local zoning regulations.
(n) If the established or supplemental place of business or
lot is zoned, approval
must be secured from the proper zoning authority and proof that the use
complies with the applicable zoning law, ordinance or resolution must be
furnished to the director by the applicant for licensing.
(o) An established or supplemental place of business, otherwise meeting the
requirements of this act may be used by a dealer to conduct more
than one business, provided that suitable space and facilities exist
therein to properly conduct the business of a vehicle dealer.
(p) If a supplemental place of business is not operated on a
continuous, year-round basis, the dealer shall give the department 15 days'
notice as to the dates on which the dealer will be engaged in business at
the supplemental place of business.
(q) Any vehicle dealer selling, exchanging or transferring or
causing to be sold, exchanged or transferred new vehicles in this state
must satisfactorily demonstrate to the director that such vehicle dealer
has a bona fide franchise agreement
with the first or second stage manufacturer or distributor of the vehicle, to
sell, exchange or transfer the same or to cause to be sold, exchanged or
transferred.
No person may engage in the business of buying, selling or exchanging
new motor vehicles, either directly or indirectly, unless such person holds
a license issued by the director for the make or makes of new motor
vehicles being bought, sold or exchanged, or unless a person engaged in
such activities is not required to be licensed or acts as an employee of a
licensee and such acts are only incidentally performed. For the purposes of
this section, engaged in the business of buying, selling or exchanging new
motor vehicles, either directly or indirectly, includes: (1) Displaying new
motor vehicles on a lot or showroom; (2) advertising new motor vehicles,
unless the person's business primarily includes the business of
broadcasting, printing, publishing or advertising for others in their own
names; or (3) regularly or actively soliciting or referring buyers for new
motor vehicles.
(r) No person may engage in the business of buying, selling or exchanging
used motor vehicles, either directly or indirectly, unless such person
holds a license issued by the director for used motor vehicles being
bought, sold or exchanged, or unless a person engaged in such activities is
not required to be licensed or acts as an employee of a licensee and such
acts are only incidentally performed. For the purposes of this section,
engaged in the business of buying, selling or exchanging used motor vehicles,
either directly or indirectly, includes: (1) Displaying used motor
vehicles on a lot or showroom; (2) advertising used motor vehicles, unless
the person's business primarily includes the business of broadcasting,
printing, publishing or advertising for others in their own names; or (3)
regularly or actively soliciting buyers for used motor vehicles.
(s) The director of vehicles shall publish a suitable Kansas
vehicle salesperson's manual. Before a vehicle salesperson's license is
issued, the applicant for an original license or
renewal thereof shall be required to pass a written examination based upon
information in the manual.
(t) No new license shall be issued nor any license renewed to any
person to act as a salvage vehicle dealer until the division has received
evidence of compliance with the junkyard and salvage control act as set
forth in K.S.A. 68-2201 et seq., and amendments thereto.
(u) On and after the effective date of this act, no person shall act
as a broker in the advertising, buying or selling of any new or used motor
vehicle. Nothing herein
shall be construed to prohibit a person duly licensed under the
requirements of this act from acting as a broker in buying or selling a
recreational
vehicle as defined by subsection (f) of K.S.A. 75-1212, and amendments
thereto, when the recreational vehicle subject to sale or purchase is a
used recreational vehicle which has been previously titled and
independently owned by another person for a period of 45 days or more, or
is a new or used recreational vehicle repossessed by a creditor holding
security in such vehicle.
(v) Nothing herein shall be construed to prohibit a person not
otherwise required to be licensed under this act from selling such person's
own vehicle as an isolated and occasional sale.
History: L. 1980, ch. 36, § 4;
L. 1980, ch. 28, § 1;
L. 1981, ch. 48, § 4;
L. 1982, ch. 49, § 1;
L. 1983, ch. 43, § 1;
L. 1984,ch. 46, § 1;
L. 1985, ch. 54, § 2;
L. 1986, ch. 50, § 1;
L. 1987, ch. 52, § 1;
L. 1988, ch. 52, § 2;
L. 1989, ch. 46, § 1;
L. 1990, ch. 52, § 3;
L. 1991, ch. 33, § 21;
L. 1992, ch. 44, § 2;
L. 1993, ch. 252, § 6;
L. 1994, ch. 302, § 4;
L. 2001, ch. 138, § 1;
L. 2002, ch. 102, § 1;
L. 2009, ch. 63, § 4; July 1.