A.R.S. tit. 28 ch. 10 — Arizona Revised Statutes Title 28 Chapter 10 — Vehicle Dealers, Automotive Recyclers And Transporters

28-4301. Definitions In this chapter, unless the context otherwise requires: 1. "Area of responsibility" means the area surrounding an individual dealer that the factory designates as that dealer's individual primary geographic territory for the purpose of marketing, promoting, selling and leasing new motor vehicles. In the absence of the factory designated area, the area of responsibility is that geographical area surrounding a dealer that lies closer to that dealer than to other dealers of the same line-make. 2. "Branch license" means a license that is issued by the director to a licensed motor vehicle dealer and that permits the licensee to sell motor vehicles from an established place of business within the same county but other than the original or principal place of business for which the license was issued. 3. "Broker" means a person who for any fee, commission or other valuable consideration offers to provide, provides or represents that the person will provide a service of arranging or assisting in effecting the purchase of a motor vehicle and who is not: (a) A new motor vehicle dealer or an employee or agent of a new motor vehicle dealer. (b) A used motor vehicle dealer or an employee or agent of a used motor vehicle dealer. (c) A manufacturer or employee or agent of a manufacturer. (d) An auctioneer or engaged in the auto auction business. (e) A wholesale motor vehicle dealer. 4. "Community" means the relevant market area. For the purposes of this paragraph, "relevant market area" means the incorporated city or town in which the franchise is located. 5. "Distributor" means a person who either: (a) Sells or distributes new motor vehicles to new motor vehicle dealers in this state. (b) Maintains distributor representatives in this state. 6. "Distributor branch" means a branch office maintained or availed of by a distributor for either: (a) The sale of new motor vehicles to new motor vehicle dealers in this state. (b) Directing or supervising its representatives in this state. 7. "Established place of business": (a) Means a permanent enclosed building or structure that is owned either in fee or leased with sufficient space to display two or more motor vehicles of a kind and type that the dealer is licensed to sell and that is devoted principally to the use of a motor vehicle dealer in the conduct of the business of the dealer. (b) In the case of a used motor vehicle dealer, trailer dealer or semitrailer dealer: (i) Need not be a permanent building or structure or part of a permanent building or structure. (ii) May be a vacant lot or part of a vacant lot. (iii) Does not mean or include a residence, tent, temporary stand or temporary quarters or permanent quarters occupied pursuant to a temporary arrangement. (c) In the case of an automotive recycler, means a permanent site or location at which the business of an automotive recycler is or will be conducted. 8. "Exhibitor" means a manufacturer of new motor homes that exhibits new motor homes at a special event. 9. "Factory branch" means a branch office maintained or availed of by a manufacturer for either: (a) The sale of new motor vehicles to distributors or the sale of new motor vehicles to new motor vehicle dealers in this state. (b) Directing or supervising its representatives in this state. 10. "Financial institution" means a bank, trust company, savings and loan association, credit union, consumer lender, international banking facility or holding company that is licensed, regulated or insured by the department of insurance and financial institutions, the federal deposit insurance corporation, the office of thrift supervision, the comptroller of the currency, the national credit union share insurance fund or the national credit union administration. 11. "Franchise" means a contract between two or more persons if all of the following conditions are included: (a) A commercial relationship of definite duration or continuing indefinite duration is involved. (b) The franchisee is granted the right to offer, sell and service in this state new motor vehicles manufactured or distributed by the franchisor. (c) The franchisee, as a separate business, constitutes a component of the franchisor's distribution system. (d) The operation of the franchisee's business is substantially associated with the franchisor's trademark, service mark, trade name, advertising or other commercial symbol designating the franchisor. (e) The operation of the franchisee's business is substantially reliant on the franchisor for the continued supply of new motor vehicles, parts and accessories. 12. "Franchisee" means a person who both: (a) Receives new motor vehicles from the franchisor under a franchise. (b) Offers and sells to and services new motor vehicles for the general public. 13. "Franchisor" means a person who both: (a) Manufactures or distributes new motor vehicles. (b) May enter into a franchise. 14. "Importer" means a person who transports or arranges for the transportation of a foreign manufactured new motor vehicle into the United States for sale in this state. 15. "Lead" means any retail consumer who satisfies all of the following: (a) Responds to a factory-directed program that obtains consumer contact information and that provides such information to one or more dealers. (b) Expresses an interest to the factory in purchasing, leasing or acquiring any vehicle or product, service or financing available from the dealers of that factory. (c) Does not qualify for any reasonable factory sponsored employee, retiree or vendor new vehicle purchase program or any other reasonable similar factory new vehicle purchase program. 16. "Line-make" means those motor vehicles that are offered for sale, lease or distribution under a common name, trademark, service mark or brand name of the manufacturer of those same motor vehicles. 17. "Major component part" includes a motor vehicle or vehicle part that the manufacturer has assigned any factory, motor, serial or other identification number or mark. 18. "Manufacturer" means any person who either: (a) Manufactures or assembles new motor vehicles. (b) Manufactures or installs on previously assembled truck chassis special bodies or equipment that when installed forms an integral part of the new motor vehicle and that constitutes a major manufacturing alteration, excluding the installation of a camper on a pickup truck. 19. "Motor home" means a motor vehicle that is primarily designed as temporary living quarters and that: (a) Is built onto as an integral part of, or is permanently attached to, a motor vehicle chassis. (b) Contains at least four of the following independent life support systems if each is permanently installed and designed to be removed only for purposes of repair or replacement: (i) A cooking facility with an onboard fuel source. (ii) A gas or electric refrigerator. (iii) A toilet with exterior evacuation. (iv) A heating or air conditioning system with an onboard power or fuel source separate from the vehicle engine. (v) A potable water supply system that includes at least a sink, a faucet and a water tank with an exterior service supply connection. (vi) A 110-125 volt electric power supply. 20. "Motor vehicle" means an automobile, motor bus, motorcycle, truck or truck tractor or any other self-propelled vehicle, trailer or semitrailer. 21. "Motor vehicle dealer" means a new motor vehicle dealer, a used motor vehicle dealer, a public consignment auction dealer, a broker or a wholesale motor vehicle auction dealer, excluding a person who comes into possession of a motor vehicle as an incident to the person's regular business and who sells, auctions or exchanges the motor vehicle. 22. "New house trailer dealer" means a person who buys, sells, exchanges or offers or attempts to negotiate a sale or exchange of an interest in, or who is engaged in the business of selling, new house trailers or used house trailers taken in trade on new house trailers. For the purposes of this paragraph, "house trailer" means a vehicle, other than a motor vehicle, that is built on a chassis designed for being drawn on the highways by a motor vehicle and that is designed for human habitation. 23. "New motor vehicle" means a motor vehicle, other than a used motor vehicle, that is held either for: (a) Sale by the franchisee who first acquired the vehicle from the manufacturer or distributor of the vehicle. (b) Sale by another franchisee of the same line-make. 24. "New motor vehicle dealer" means a person who buys, sells, exchanges or offers or attempts to negotiate a sale or exchange of an interest in, or who is engaged in the business of selling, new motor vehicles or used motor vehicles taken in trade on new motor vehicles or used vehicles purchased for resale. 25. "Off-premises display and sales" means a promotion or sale of motor vehicles for a period of time as specified by the director that both: (a) Is sponsored by a licensed motor vehicle dealer, the licensed motor vehicle dealer's agents or the manufacturer. (b) Takes place at a location within the same county but not at the licensee's established place of business. 26. "Off-premises exhibition" means the exhibition of a motor vehicle for a period of time as specified by the director at a location within the same county but not at the established place of business of a licensed motor vehicle dealer and at which a solicitation or sale does not occur. 27. "Provisional automotive recycler's license" means a license that both: (a) Is issued by the department only in conjunction with an application for an automotive recycler's license. (b) Permits the applicant or applicants to conduct the business of an automotive recycler regulated by this chapter pending completion of the criminal records check pursuant to section 28-4361. 28. "Provisional dealer's license" means a license that both: (a) Is issued by the department only in conjunction with an application for a dealer's license. (b) Permits the applicant or applicants to conduct the business of a motor vehicle dealer regulated by this chapter pending completion of the criminal records check pursuant to section 28-4361. 29. "Public consignment auction dealer" means a person who at the public consignment auction dealer's established place of business or at an authorized off-premises location pursuant to the requirements of section 28-4401 is in the business of both of the following: (a) Conducting live auctions with a licensed auctioneer verbally calling for and accepting bids. (b) Providing live auction services to the public on a consignment contract basis. 30. "Retail consumer" means any person purchasing, leasing or acquiring or possibly purchasing, leasing or acquiring a vehicle or product, service or financing not for resale. 31. "Service" means any service that is sold, leased or provided to retail consumers and that directly relates to the ownership or leasing of a new or used motor vehicle, including extended service contracts or motor vehicle warranty and nonwarranty repairs or maintenance, including both parts and labor. 32. "Special event" means an exhibition of new motor homes by a motor vehicle dealer licensed to sell new motor homes or an exhibitor for a period of time specified by the director at a location in this state other than the licensee's or exhibitor's established place of business. 33. "Used motor vehicle" means a motor vehicle that has been sold, bargained, exchanged or given away or the title to the motor vehicle has been transferred from the person who first acquired the vehicle from the manufacturer, or importer, dealer or agent of the manufacturer or importer, and that has been placed in bona fide consumer use. For the purposes of this paragraph, "bona fide consumer use" means actual operation by an owner who acquired a new motor vehicle both: (a) For use in the owner's business or for pleasure or otherwise. (b) For which a certificate of title has been issued or that has been registered as provided by law. 34. "Used motor vehicle dealer" means a person, other than a new motor vehicle dealer, who buys, sells, auctions, exchanges or offers or attempts to negotiate a sale or exchange of an interest in, or who is engaged in the business of selling, seven or more used motor vehicles in a continuous twelve month period. Used motor vehicle dealer does not include a wholesale motor vehicle auction dealer or a public consignment auction dealer. 35. "Wholesale motor vehicle auction dealer" means a person who both: (a) Is in the business of providing auction services solely in wholesale transactions to motor vehicle dealers licensed by this state or any other jurisdiction. (b) Does not buy, sell or own the motor vehicles the auction dealer auctions in the ordinary course of business. 36. "Wholesale motor vehicle dealer" means a person who sells used motor vehicles only to licensed motor vehicle dealers. 28-4302. Fees; disposition A. The following fees are required: 1. For filing each application for a dealer's, manufacturer's, importer's, distributor's, factory branch's, distributor branch's, automotive recycler's or wholesale motor vehicle dealer's license, fifteen dollars. 2. For filing each application for a provisional dealer's, automotive recycler's or wholesale motor vehicle dealer's license filed in conjunction with an application for a dealer's or automotive recycler's license, ten dollars. 3. For each filing of a dealer's, manufacturer's, distributor's, importer's, factory branch's, distributor branch's, automotive recycler's or wholesale motor vehicle dealer's license if issued annually, one hundred dollars, except that if a dealer has a contractual relationship with a third-party lender, the fee is four hundred dollars, of which three hundred dollars shall be deposited, pursuant to sections 35-146 and 35-147, in the state general fund and one hundred dollars in the state highway fund. 4. For each continuation of a dealer's license if issued annually, one hundred dollars, except that if a dealer has a contractual relationship with a third-party lender, the fee is two hundred fifty dollars, of which one hundred fifty dollars shall be deposited, pursuant to sections 35-146 and 35-147, in the state general fund and one hundred dollars in the state highway fund. 5. For filing or continuing a dealer's branch license if issued annually, fifty dollars. 6. For filing each application for a permit for the off-premises exhibition of motor vehicles, for a motor vehicle show or for a special event to exhibit new motor homes, twenty-five dollars. 7. For filing each application for a permit for the off-premises display and sale of motor vehicles, twenty-five dollars. B. Except as otherwise provided by statute, the director shall immediately deposit, pursuant to sections 35-146 and 35-147, fees collected under this section in the Arizona highway user revenue fund. 28-4303. Administration The director shall supervise and regulate all persons required by this chapter to be licensed. In the supervision and regulation required by this section, the director may: 1. Investigate as the director deems necessary and for that purpose the director may require the aid and assistance of the highway patrol division. 2. Conduct hearings. 3. Compel the attendance of witnesses at the hearings. 28-4304. Dealer and registration monies; deposit Monies collected by the director for the following shall be deposited in the state highway fund established by section 28-6991: 1. Civil penalties and vehicle registration reinstatements pursuant to this chapter. 2. Each filing or continuation of a dealer's, manufacturer's, distributor's, importer's, factory branch's, distributor branch's, automotive recycler's or dealer's branch license pursuant to section 28-4302. 3. Each filing for an application for an off-premises exhibition permit or an off-premises display and sales permit. 28-4306. Jurisdiction; service of process; arbitration; venue A. A court of this state may exercise jurisdiction over a manufacturer, corporation, importer or distributor that has been granted a license under this chapter with respect to any conduct of the manufacturer, corporation, importer or distributor in this state. In addition to any other method provided by rule or statute, personal jurisdiction over a manufacturer, corporation, importer or distributor may be acquired in a civil action or proceeding instituted in a court by service of process in the manner provided in this section. B. If a manufacturer, corporation, importer or distributor is not a resident of this state and engages in any business in this state, the manufacturer, corporation, importer or distributor shall designate an agent or the director on whom service of process may be made in this state. The agent shall be a resident of this state or a corporation authorized to do business in this state. The manufacturer, corporation, importer or distributor shall make the designation in writing and file it with the director. If process cannot be served in this state on the designated agent, process may be served on the director, but the plaintiff or petitioner shall immediately mail a copy of the process and pleading by certified mail to the defendant or respondent. Service of process is complete with service on the director. C. The defendant or respondent shall appear and answer within thirty days after completion of service on the director in the manner and under the same penalty as if the defendant or respondent had been personally served with the summons or other process. D. The plaintiff or petitioner shall file an affidavit of compliance with this section with the clerk of the court within the time the court allows if process was served to the director. E. Notwithstanding any provision of a franchise, if a manufacturer or distributor requires a new motor vehicle dealer to submit a dispute covered by this chapter or any other law to arbitration or mediation, the time for the dealer to file a complaint, action, petition or protest is stayed until the mediation or arbitration proceeding is complete. F. If an arbitration proceeding is required pursuant to a provision in a franchise, venue for the arbitration proceeding shall be in this state and the arbitration proceeding shall be governed by the laws of this state. The venue prescribed by this subsection shall not be modified by contract. 28-4307. Civil damages A dealer who suffers a pecuniary loss or who is otherwise adversely affected because of a violation of this chapter by a manufacturer or distributor has a cause of action against the manufacturer or distributor for damages and may recover those damages in any court of competent jurisdiction. 28-4308. Prohibition; applicability A. A manufacturer, distributor, factory branch, distributor branch, motor vehicle dealer or automotive recycler shall not engage in business except in accordance with the requirements of law. B. This chapter does not apply to: 1. A public officer engaged in the discharge of the officer's official duties. 2. Any trustee, receiver or other officer acting under the jurisdiction of a court. 3. A financial institution disposing of a repossessed vehicle. 4. A person disposing of the person's personal vehicles. 5. A self-service storage facility disposing of a vehicle pursuant to section 33-1704. 6. An owner of a classic car, as defined in section 28-2483, or a historic vehicle, as defined in section 28-2484, if both of the following apply: (a) The owner sells the classic car or historic vehicle. (b) The classic car or historic vehicle is titled in the owner's name in this state before December 31, 2005. C. The provisions of this chapter regulating and licensing manufacturers, distributors, factory branches, distributor branches and franchisors only apply to those manufacturers, distributors, factory branches, distributor branches and franchisors of passenger cars, trucks, buses, motorcycles, trailers and semitrailers. D. Sections of this chapter that: 1. Refer to a motor vehicle dealer apply to a new house trailer dealer. 2. Refer to a motor vehicle dealer apply to a used house trailer dealer as defined in section 28-4332. 28-4332. Limited exemption; definitions A. The director shall grant an exemption from the new or used house trailer dealer licensing requirements of this chapter if the person claiming the exemption furnishes satisfactory proof to the director of licensure as a dealer under title 41, chapter 37, article 4. B. The cash deposit or bond posted by the person pursuant to section 41-4029 is subject to the same conditions and inures to the benefit of the same persons as prescribed in sections 28-4362, 28-4405, 28-4406 and 28-4408. C. A new or used house trailer dealer who claims an exemption pursuant to subsection A of this section shall comply with all other requirements applicable to a new or used house trailer dealer licensed under this chapter. The director of the department of transportation may suspend or cancel the license issued pursuant to title 41, chapter 37, article 4 pursuant to this chapter. On issuing a final order cancelling or suspending a license issued pursuant to section 41-4026, the director of the department of transportation shall notify the director of the Arizona department of housing who shall require the surrender of the license. D. An exemption granted pursuant to subsection A of this section expires on suspension, revocation or nonrenewal of the license issued pursuant to title 41, chapter 37, article 4. The director of the Arizona department of housing shall notify the director of the department of transportation of any such suspension, revocation or nonrenewal. E. For the purposes of this section: 1. "House trailer" means a vehicle, other than a motor vehicle, that is built on a chassis designed for being drawn on the highways by a motor vehicle and that is designed for human habitation. 2. "Used house trailer dealer" means a person, other than a new house trailer dealer, who buys, sells, exchanges or offers or attempts to negotiate a sale or exchange of an interest in used house trailers or who is engaged in the business of selling used house trailers. 28-4333. Licensing requirement; exemptions A. A new motor vehicle shall not be sold in this state unless either the manufacturer on direct dealerships of domestic vehicles, the importer of foreign manufactured vehicles on direct dealerships or the distributor on indirect dealerships of either domestic or foreign vehicles is licensed as provided in this chapter. Obtaining the license conclusively establishes that the manufacturer, distributor or importer is subject to the laws of this state regulating manufacturers, importers and distributors. B. An organization that has qualified for an exemption from taxation of income under section 501 of the internal revenue code may sell a donated used motor vehicle without obtaining a license under this chapter, subject to the following: 1. The nonprofit organization shall maintain the tax-exempt status until any monies received from the sale of the used motor vehicle have been expended and a member, director, officer, employee or agent of the nonprofit organization shall not receive any direct or indirect pecuniary benefit from the sale of the used motor vehicle. 2. The nonprofit organization shall sell the used motor vehicle by assignment using a licensed motor vehicle dealer. 3. Notwithstanding section 28-2058, the nonprofit organization is not required to obtain a new certificate of title or registration for the donated motor vehicle but shall assign the certificate of title to the licensed motor vehicle dealer for ultimate assignment to the retail purchaser of the motor vehicle. 4. The nonprofit organization shall maintain the motor vehicle financial responsibility requirements prescribed by chapter 9, article 4 of this title if operating the motor vehicle including operating the motor vehicle to the place of assignment. 5. The nonprofit organization may operate the donated motor vehicle to the place of assignment without purchasing the one trip registration permit required by section 28-2155. C. Notwithstanding any other provision of this chapter, a person who receives or does not receive consideration for providing a purchaser the opportunity to purchase a motor vehicle from a licensed new motor vehicle dealer at a price that does not exceed a certain amount is not required to be licensed as a motor vehicle dealer or broker under this chapter if the person does not participate in the negotiation of the actual price paid, the delivery terms or any other terms related to the purchase of the vehicle. 28-4334. License requirement; established place of business; unimproved lots and premises; violation; classification A. Except as provided in sections 28-4335, 28-4401 and 28-4402, a person shall not engage in any business regulated by this chapter except from an established place of business and unless the person has obtained from the director a license authorizing the person to engage in the business. B. A licensee may use unimproved lots and premises or parts of unimproved lots and premises for the storage of motor vehicles or for the storage of motor vehicle parts or accessories if the lots or premises are located in the county in which the licensee has an established place of business. C. A person who violates subsection A of this section is guilty of a class 1 misdemeanor. 28-4335. Wholesale motor vehicle dealer or broker A. A wholesale motor vehicle dealer or a broker: 1. Is required to be licensed pursuant to this chapter and pay fees pursuant to section 28-4302. 2. Is required to be a legal resident of this state. 3. Is not required to operate from an established place of business. 4. Shall maintain a place of business in which records of the business are kept. B. If the licensee is a broker, the principal place of business shall not be a location that is zoned for residential use. 28-4336. Separate licenses and permits A. A branch licensee shall obtain a separate branch license for each place of business at which a licensee transacts business other than the original or principal place of business. B. A motor vehicle dealer licensee shall obtain a separate permit for and display the separate permit at each location other than the licensee's established place of business at which the licensee conducts an off-premises exhibition, an off-premises display and sales or a special event. C. An exhibitor shall obtain a separate permit for and display the separate permit at each location at which the exhibitor conducts a special event. 28-4361. License application; criminal records check; education and training A. A person shall apply for a license to the director in writing on forms prescribed by the director. The person shall include with the application all documents and bonds required and the annual license fees prescribed by section 28-4302. B. The application shall be verified and shall contain: 1. The name and residence of either: (a) The applicant. (b) If the applicant is a partnership, each partner. (c) If the applicant is a corporation, each principal officer, director, agent or stockholder who owns twenty percent or more of the corporation and the name of the state in which the corporation was organized. 2. The principal place of business of the applicant. 3. The established place of business or the place of business at or from which the applicant will conduct the business. 4. The make or makes of new motor vehicles, if any, that the applicant will sell or offer for sale in this state. 5. The business hours of the applicant. 6. Other information that the director requires. C. Each applicant who owns twenty percent or more of an entity, and each partner or stockholder who owns twenty percent or more of an entity, and who seeks a new license shall provide: 1. A full set of fingerprints to the department of transportation for the purpose of obtaining a state and federal criminal records check pursuant to section 41-1750 and Public Law 92-544. The department of public safety may exchange this fingerprint data with the federal bureau of investigation. 2. A nonrefundable fee to be paid to the department of public safety for the criminal records check. D. If a licensee adds or changes a partner or stockholder who owns twenty percent or more of the entity and who was not included in the criminal records check on a prior application, the licensee shall notify the department within thirty days of the change. At the time of notification, an application and, if applicable, a full set of fingerprints and the fee for a criminal records check shall be submitted to the department. If any individual who is added or changed by the licensee is found to be ineligible pursuant to section 28-4365, the director, on completion of the criminal records check, shall advise the licensee and the individual in writing that the license will be revoked, unless the individual is removed from the position, and of the grounds for the action. E. The requirement for a criminal records check: 1. Does not apply to a manufacturer, importer, factory branch or distributor or a person who is under eighteen years of age on the date the application is filed with the department. 2. May not apply if the application is for a subsequent license and each applicant who owns twenty percent or more of an entity, and each partner or stockholder who owns twenty percent or more of an entity, either: (a) Have submitted to a criminal records check during the past five years. (b) Are currently licensed under this section. 3. Does not apply to a new motor vehicle dealer who has paid fees pursuant to section 28-4302. F. The director may establish education and training for a person applying for an initial or a renewal of a used motor vehicle dealer or wholesale motor vehicle dealer license pursuant to this section. The director may contract with a private entity to provide the education and training established under this subsection. The private entity that contracts with the director pursuant to this subsection may charge a fee for the education and training. 28-4362. Application; fee; bond Applications shall be accompanied by: 1. The filing fees prescribed in section 28-4302, and each licensee shall pay the annual license fee prescribed in section 28-4302. 2. A bond that: (a) Is in a form to be approved by the director. (b) Is in an amount prescribed by the director of at least twenty thousand dollars for an automotive recycler's license and not more than one hundred thousand dollars for all other licenses. (c) Is executed by a surety company authorized to transact business in this state as surety on the bond with the applicant as principal obligor on the bond and the state as obligee. (d) Is cancellable only on at least sixty days' prior notice to the director. (e) Inures to the benefit of a person who suffers loss because of either: (i) Nonpayment by the dealer of customer prepaid title, registration or other related fees or taxes. (ii) The automotive recycler's or the dealer's failure to deliver in conjunction with the sale of a vehicle a valid vehicle title certificate free and clear of any prior owner's interests and all liens except a lien created by or expressly assumed in writing by the buyer of the vehicle. 3. A copy of the dealer's current transaction privilege tax license. 28-4363. Franchises; filing agreement; violation; classification A. At the time a franchisee applies for a license, the franchisee shall file with the director a certified copy of the franchisee's written agreement with the manufacturer and a certificate of appointment as dealer or distributor. B. The certificate of appointment shall be signed as follows: 1. By an authorized agent of the manufacturer of domestic vehicles on direct manufacturer-dealer agreements. 2. If the manufacturer is wholesaling through an appointed distributorship, by an authorized agent of the distributor on indirect distributor-dealer agreements. 3. By an authorized agent of the importer on direct importer-dealer agreements of foreign made vehicles. 4. By an authorized agent of the distributor on indirect distributor-dealer agreements. 5. For a distributor's certificate of appointment, by an authorized agent of the manufacturer of domestically manufactured vehicles or by an authorized agent of the manufacturer or importer of foreign made vehicles. C. A franchisee is not required to file a written agreement or certificate of appointment if the manufacturer on direct dealerships, the distributor on indirect dealerships or the importer on direct dealerships meets all of the following conditions: 1. Utilizes the identical basic agreement for all of its franchised dealers or distributors in this state. 2. Certifies in the certificate of appointment that this blanket agreement is on file and the written agreement with the dealer or distributor, respectively, is identical with the filed blanket agreement. 3. Has filed with the director one such agreement together with a list of franchised dealers or distributors. D. The manufacturer, distributor or importer shall notify the director at least forty-five days before any proposed revisions of or additions to the basic agreement on file or of any franchisee supplements to the agreement. E. A manufacturer, other than a manufacturer of a recreational vehicle as defined in section 41-4001, shall not modify a franchise during the term of the franchise or on the renewal of a franchise if the modification substantially and adversely affects the new motor vehicle dealer's rights, obligations, investment or return on the investment without giving at least forty-five days' notice of the proposed modification to the new motor vehicle dealer unless the change is required by law. Within the forty-five day period, the new motor vehicle dealer may file with the director and serve notice on the manufacturer of an objection requesting a determination pursuant to article 5 of this chapter of whether there is good cause for permitting the proposed modification. F. Annual renewal of certificates filed as provided in this section is not required. G. A manufacturer on direct dealerships, a distributor on indirect dealerships or an importer on direct dealerships who has filed with the director an agreement used by all of its franchisees in this state together with a list of all such franchisees and who knowingly fails to notify the director at least forty-five days before any proposed revisions, changes or additions to the materials filed is guilty of a class 2 misdemeanor. 28-4364. Investigations; inspections A. On the filing of the application for a license, the director shall: 1. Investigate the matters set forth in the license application. 2. Inspect, physically or through an alternate method established by the director, the place from which the applicant proposes to transact business. 3. Investigate other matters as the director deems necessary. B. The director shall select a date and time to conduct the investigation and inspection as the director determines is reasonable and necessary. C. The director may approve an application for a provisional dealer's or automotive recycler's license pending completion of the criminal records check pursuant to section 28-4361 if the applicant meets all other licensing requirements of this chapter. D. A provisional motor vehicle dealer's or automotive recycler's license is valid unless revoked by the director or until the applicant receives approval or denial of the application for a motor vehicle dealer's or automotive recycler's license. E. The director may revoke a provisional motor vehicle dealer's or automotive recycler's license for a violation of this chapter. 28-4365. Action on application; denial; immunity from costs A. Within twenty days after completion of the criminal records check, the director shall approve or deny the application for the issuance of a license. If the application is denied, the director shall advise the applicant in writing of the denial and the grounds for the denial. B. The director may deny an application for a license if: 1. An individual included in the application made a misrepresentation, omission or misstatement in the application to conceal a matter that may cause the application to be denied. 2. An individual included in the application has been convicted of fraud or an auto related felony in a state, territory or possession of the United States or a foreign country within the ten years immediately preceding the date the criminal records check is complete. 3. An individual included in the application has been convicted of a felony, other than a felony described in paragraph 2 of this subsection, in a state, territory or possession of the United States or a foreign country within the five years immediately preceding the date the criminal records check is complete. 4. An individual in the application does not meet the requirements of law or the requirements of a rule adopted by the director pursuant to law. 5. Within five years preceding the application, an individual included in the application has had a similar license suspended, revoked or cancelled in this or any other state. C. The individual whose information is found to be a misrepresentation, omission or misstatement is not eligible to reapply for a license for twelve months from the date of denial. D. The department or its employees are not liable for any costs incurred by an applicant seeking licensure under this chapter. 28-4366. Hearing on application; appeal A. Within thirty days after receipt of the notice of denial, the applicant may petition the director in writing for a hearing on the application. On filing the petition, the director shall fix a date for the hearing. B. The applicant has the right to be present at the hearing, to testify in the applicant's own behalf and to have other persons as the applicant desires be present and testify at the hearing. C. The director shall issue subpoenas to the persons the applicant requests, requiring them to be present and to testify at the hearing. D. A transcript of the testimony of all witnesses taken at the hearing shall be made and preserved. E. Within ten days after the hearing, the director shall make written findings of fact and conclusions and shall either grant or finally deny the application. F. If the application is finally denied, the applicant, within thirty days from the date of final denial, may appeal to the superior court in Maricopa county. The action shall be tried as other civil actions and shall be conducted as a trial de novo. 28-4401. Off-premises exhibition, off-premises display and sales and special event permits; parking motor vehicle for sale on public property; prohibition; defaced vehicle identification number; mandatory immobilization or impoundment A. A licensed motor vehicle dealer may conduct an off-premises exhibition, an off-premises display and sales or a special event by permit. B. An Arizona franchised new car dealer association may conduct a motor vehicle show by permit. C. An exhibitor that does not have a licensed franchised dealer in this state may conduct a special event by permit. An exhibitor that has a licensed franchised dealer in this state is limited to participating in a special event through the exhibitor's licensed dealer. A licensed motor vehicle dealer or an exhibitor shall not make a solicitation or sale at a special event. D. An applicant for an off-premises exhibition, an off-premises display and sales or a special event permit shall submit proof to the department that the proposed site is in compliance with local zoning ordinances. E. An off-premises exhibition permit, display and sales permit or special event permit is not assignable. F. A special event shall not be held at the same location at which an off-premises exhibition or an off-premises display and sale are held. G. Except as otherwise provided in this section, a motor vehicle dealer or person acting as a motor vehicle dealer shall not park a motor vehicle for the primary purpose of displaying the vehicle for sale or for transfer of ownership on any of the following: 1. A public street or highway. 2. A public parking lot. 3. Any other public property. 4. Any private property if the public may lawfully drive a motor vehicle on the property. This paragraph does not apply if the property is a motor vehicle dealer's lot and the motor vehicle that is parked on the property is in the motor vehicle dealer's inventory. H. A vehicle that is displayed for sale with a vehicle identification number that has been destroyed, removed, covered, altered or defaced is subject to mandatory vehicle immobilization or impoundment pursuant to section 28-3511. 28-4402. Recreational vehicles; public events; permits A. A motor vehicle dealer who is licensed to sell only recreational vehicles as defined in section 28-3102 and who is the only franchisee for that line-make in the county in which the motor vehicle dealer is licensed may exhibit and sell those recreational vehicles at a fair or similar public event in an adjacent county by permit if a franchisee for that line-make is not licensed in the adjacent county. B. A licensed motor vehicle dealer may display and sell motor vehicles during a public event for a limited period of time, not to exceed ten days in any one calendar year, outside of the county in which the licensed motor vehicle dealer has an established place of business if the display and sales take place in an incorporated city or town whose boundaries include territory within two counties and the licensed motor vehicle dealer's established place of business is in one of the two counties. Before any display or sales, the licensed motor vehicle dealer shall obtain a permit from the department and shall submit proof to the department that the proposed site is in compliance with local zoning ordinances. 28-4403. Record requirements; motor vehicle information; inspection; liability; electronic submission A. A licensee shall keep and maintain at the licensee's established place of business, or place of business if the licensee is a broker or a wholesale motor vehicle dealer, a permanent record in the form prescribed by the director. The permanent record may be in an electronic format and shall contain: 1. A particular description of each motor vehicle of a type subject to registration under the laws of this state that is bought, sold, brokered or exchanged by the licensee or received or accepted by the licensee for sale, brokering or exchange. 2. A particular description of each used motor vehicle body or chassis that is sold or otherwise disposed of. 3. A particular description of each motor vehicle that is bought or otherwise acquired and wrecked by the licensee. 4. The name and address of the person from whom a motor vehicle, motor vehicle body or motor vehicle chassis was purchased or otherwise acquired and the date it was purchased or acquired. 5. The name and address of the person to whom the motor vehicle, motor vehicle body or motor vehicle chassis was sold or otherwise disposed of, the date it was sold or disposed of and a sufficient description of the vehicle, body or chassis by name or identifying number or otherwise to identify it. B. A licensed automotive recycler that has a vehicle in the automotive recycler's inventory shall: 1. At the same time have possession of a duly and regularly assigned salvage certificate of title, nonrepairable vehicle certificate of title or dismantle certificate of title to the vehicle. 2. Not offer for sale or sell a vehicle unless a salvage certificate of title, nonrepairable vehicle certificate of title or dismantle certificate of title to the vehicle has been obtained. C. Each motor vehicle dealer shall give the customer a written or electronic contract and shall maintain a copy of the contract for three years at the dealer's established place of business. D. Each record required by this section and all inventories relating to the records of a licensee shall be available at all times for physical inspection by agents of the department or members of the highway patrol division. The agents or members may enter on premises where the records or inventories are located during normal business hours for purposes of the inspection. The licensee or any designated employee or agent may accompany any person making the inspection while the person is on the licensee's premises. E. The licensee is only liable to a person making an inspection under this section for an injury arising out of the condition of the premises that occurs while the person is on the licensee's premises if the licensee knowingly allows the person to encounter a hidden peril or wantonly or wilfully causes the person harm. F. A wholesale motor vehicle dealer shall submit electronically to the department any documents that are requested by the department during the wholesale motor vehicle dealer's reported business hours and that are prescribed in this section. The wholesale motor vehicle dealer shall submit the requested documents within forty-eight hours after the request is transmitted. 28-4404. Record requirements; vehicles and parts; electronic submission; violation; classification A. Each licensee shall keep and maintain at the licensee's place of business, or at each of the licensee's places of business if the licensee has more than one, a permanent record in a form prescribed by the director as follows: 1. Recording and describing each of the following: (a) Each vehicle that is wrecked, dismantled, disassembled or substantially altered by the licensee. (b) Each major component part that is acquired by the licensee together with a bill of sale signed by a seller whose identity has been verified and the name and address of the person, firm or corporation from which the licensee purchased the vehicle or part. (c) The following information regarding the wrecked or acquired vehicle that is the source of a major component part: (i) If previously titled in this or any other state, the certificate of title number. (ii) The name of the state where last registered. (iii) The number of the last license plate issued. (iv) The make and model of the vehicle. (v) The identification number and serial number of the vehicle. (vi) The date purchased. (vii) The disposition of the chassis. (viii) The name and address of the person from whom a motor vehicle, motor vehicle body or motor vehicle chassis was purchased or otherwise acquired and the date of the purchase. (ix) The name and address of the person to whom the motor vehicle, motor vehicle body or motor vehicle chassis was sold or otherwise disposed of, the date of the sale and a description of the vehicle, body or chassis by make and model or identification number. 2. Including a bill of sale signed by the seller for any motor vehicle parts other than major component parts acquired by the licensee, identifying the seller by name, address and date of sale. B. The licensee shall maintain the record at the licensee's established place of business or principal place of business if the licensee is a broker or a wholesale motor vehicle dealer for a period of three years from the date of acquiring each item recorded. C. Authorized representatives of the department of transportation or any law enforcement agency may inspect the record kept by the licensee at any time during regular business hours. D. An automotive recycler shall maintain a similar record of all disabled vehicles that have been towed or transported to the automotive recycler's place of business or to other places designated by the owner of the vehicle or the owner's representative. This record shall specify the make, model and description of the vehicle, name of the owner, number of the license plate, condition of the vehicle and place to which it was towed or transported. E. Each licensee shall allow any person described in subsection C, during business hours and after reasonable demand, to physically compare the records required to be maintained with the vehicles or major component parts that are located at the licensee's place of business. F. Beginning January 1, 2014, a wholesale motor vehicle dealer shall submit electronically to the department any documents that are requested by the department during the wholesale motor vehicle dealer's reported business hours and that are prescribed in this section. The wholesale motor vehicle dealer shall submit the requested documents within forty-eight hours after the request is transmitted. G. After reasonable demand by a person under subsection C or E, a person who fails to display the records required to be maintained is guilty of a class 1 misdemeanor. 28-4405. Display of license; continuation date; late penalty A. A license issued under this chapter: 1. Shall be conspicuously displayed in either: (a) The established place of business for which it was obtained. (b) The place of business if the licensee is a broker or a wholesale vehicle dealer. 2. Is not transferable or subject to sale or reassignment. B. The director may issue licenses with staggered continuation dates to distribute the continuation workload as uniformly as practicable throughout the twelve months of the calendar year. In order to initiate a staggered license continuation system, the director may issue a license for more or less than a twelve-month period, but not more than eighteen months, and may prorate the license fee. C. A motor vehicle dealer licensee shall submit its renewal application, evidence of its current transaction privilege tax license and applicable renewal fees to the department of transportation on or before the license continuation date. For the purposes of renewal, the license continuation date is as follows: 1. If the motor vehicle dealer is also a licensed dealer pursuant to title 44, chapter 2.1, the date prescribed by the initial licensing department, either the department of transportation or the department of insurance and financial institutions. 2. If the motor vehicle dealer is not also a licensed dealer pursuant to title 44, chapter 2.1, the date prescribed by the department of transportation. D. If a licensee fails, neglects or refuses to pay the required fee for the ensuing year on or before the license continuation date, the fee is delinquent and a penalty equal to the fee shall be added to the fee and collected. 28-4406. Sign requirements A. Each motor vehicle dealer and automotive recycler shall erect and maintain at the entrance to the motor vehicle dealer's or automotive recycler's established place of business a permanent sign indicating that the business of a motor vehicle dealer or automotive recycler is conducted at or from the premises. The sign shall be legible at a distance of at least three hundred feet during daylight. B. A wholesale motor vehicle dealer or broker shall erect and maintain at the entrance of the wholesale motor vehicle dealer's or broker's principal place of business a permanent sign indicating that the business of a wholesale motor vehicle dealer or broker is conducted at or from the premises. 28-4407. Business hours; notice of change Each person issued a license pursuant to this chapter shall: 1. Include business hours on each renewal application. 2. Provide written notice of any change in business hours to the director at least ten days before the change to the hours. 28-4408. Change in place of business Before a licensee moves from one established place of business to another, or from one place of business to another if the licensee is a broker or a wholesale motor vehicle dealer, the licensee shall apply to and obtain consent to the removal from the director. 28-4409. Evidence of ownership requirement; exception A. Except as provided in section 28-4410: 1. Each dealer in motor vehicles, trailers and semitrailers, including manufacturers who sell to other than dealers, having possession of or offering for sale a motor vehicle, trailer or semitrailer shall have at the same time either: (a) Possession of a duly and regularly assigned certificate of title to the vehicle. (b) Reasonable indicia of ownership or right of possession as approved by the director. 2. A dealer or manufacturer shall not offer for sale or sell a motor vehicle, trailer or semitrailer until the dealer or manufacturer has obtained a certificate of title to the motor vehicle, trailer or semitrailer, except that a certificate of title is not required for a new motor vehicle sold by manufacturers to dealers. B. A wholesale motor vehicle auction dealer is exempt from the requirement of having to possess a duly and regularly assigned certificate of title and from other requirements relating to the reassignment of certificate of title documents and disclosures to buyers. A wholesale motor vehicle auction dealer may buy or sell a motor vehicle at wholesale in the wholesale motor vehicle auction dealer's own name if the wholesale motor vehicle auction dealer complies with the provisions of this title relating to certificates of title, reassignments of certificate of title documents and disclosures to buyers. C. A wholesale motor vehicle dealer must apply for a certificate of title in the name of the wholesale motor vehicle dealer any vehicle that the wholesale motor vehicle dealer acquires before the wholesale motor vehicle dealer transfers the vehicle to another licensed motor vehicle dealer. 28-4410. Consignment contracts; definitions A. A dealer in motor vehicles, trailers and semitrailers may possess and offer for sale a motor vehicle, trailer or semitrailer without having a duly or regularly assigned certificate of title or title transfer form in the dealer's possession if the dealer possesses all of the following: 1. A consignment contract or dealer acquisition contract. 2. The most recent registration card for the vehicle. 3. A statement by the lienholder disclosing all unsatisfied liens, if applicable. B. A dealer may complete the sale of a motor vehicle, trailer or semitrailer offered for sale under subsection A of this section when the dealer possesses verification that all liens on the motor vehicle, trailer or semitrailer have been satisfied by the dealer or assumed by the purchaser. C. A dealer who offers a vehicle for sale on consignment shall inform a prospective customer that the vehicle is on consignment to the dealer. D. The director shall adopt rules on the minimum form and content of consignment contracts and dealer acquisition contracts. E. This chapter does not allow the consignment of motor vehicles from one licensee to another licensee. F. A dealer in motor vehicles, trailers or semitrailers may offer for sale or sell a motor vehicle, trailer or semitrailer without having a duly or regularly assigned certificate of title in the dealer's possession if the dealer possesses a complete photocopy of the duly or regularly assigned certificate of title, the original of which has been delivered to a financial institution or a subsidiary of the financial institution pursuant to an inventory financing arrangement. G. For the purposes of this section: 1. "Consignment contract" means an agreement executed by both the owner of a vehicle and a licensed motor vehicle dealer pursuant to which the vehicle is delivered to the dealer to sell for the owner. 2. "Dealer acquisition contract" means an agreement that both: (a) Is executed by both the owner of a vehicle, the certificate of title for which is in possession of a lienholder in accordance with the laws of this state or another state, and a licensed motor vehicle dealer. (b) Transfers ownership of the vehicle described in subdivision (a) of this paragraph to a licensed dealer from a person other than a manufacturer, distributor, franchisor or dealer. 3. "Inventory financing arrangement" means an agreement under which a dealer grants a security interest to a financial institution under the provisions of title 47, chapter 9. 28-4410.01. Public consignment auction dealers; exemptions; notices; requirements; penalties; payment of taxes; wholesale motor vehicle dealer prohibition A. A public consignment auction dealer is exempt from the following: 1. An implied warranty of merchantability described in section 28-4412, subsection B and section 44-1267. 2. An emissions inspection pursuant to section 49-542, subsection D. B. A public consignment auction dealer shall post at the public consignment auction dealer's established place of business a sign indicating that the public consignment auction dealer is exempt from the provisions described in subsection A of this section. C. A public consignment auction dealer, on transferring a motor vehicle by sale, shall provide written notice to the department of transportation and the department of revenue within fifteen days after the transfer on a form jointly prescribed by the directors of the departments that includes: 1. The date of the transfer. 2. The name and address of the seller. 3. The name and address of the purchaser. 4. The vehicle identification number of the motor vehicle. 5. The make and model of the motor vehicle. 6. The successful bid price and any premiums or commissions paid associated with the auction of the motor vehicle. 7. Notice as to whether the vehicle is a salvage vehicle. D. A public consignment auction dealer who fails to provide written notice to the department within fifteen days after transferring a motor vehicle, as prescribed by subsection C of this section, shall pay the department a penalty of eight dollars for the first month and four dollars for each additional month that the notice is not provided, not to exceed a total of one hundred dollars. E. A public consignment auction dealer, on transferring a motor vehicle by sale, shall give written notice to the purchaser at the time of delivery of the motor vehicle to the purchaser in the form of an invoice or on a form prescribed by the director that includes: 1. The date of the transfer. 2. The vehicle identification number of the motor vehicle. 3. The make and model of the motor vehicle. 4. The successful bid price and any premiums or commissions paid associated with the auction of the motor vehicle. 5. Notice as to whether the vehicle is a salvage vehicle. F. A public consignment auction dealer shall keep and maintain at the public consignment auction dealer's established place of business a permanent record in a form prescribed by the director. The permanent record shall include the information prescribed by subsection C of this section and contain a description of all motor vehicle transfers and sales. The public consignment auction dealer shall make the permanent record available for inspection by the department of transportation, the department of revenue or any peace officer. G. A public consignment auction dealer shall do all of the following: 1. Inform the purchaser of a motor vehicle that the purchaser is responsible for the emission inspection requirements described in section 49-542, subsection D. 2. Comply with the consignment contract requirements prescribed in section 28-4410 if the motor vehicle is acquired from a person other than a licensee, except that the public consignment auction dealer shall obtain documentation that shows that the seller of the vehicle is the legal owner of the vehicle. 3. Comply with the requirements of section 28-4409 relating to evidence of ownership