ALABAMA DEPARTMENT OF REVENUE

ADMINISTRATIVE CODE

CHAPTER 810-8-5 NATURAL RESOURCES AND LICENSE TAX DIVISION

TABLE OF CONTENTS

810-8-5-.01 Specification Relating To Sign Requirements Of New And Used Motor Vehicle Dealers

810-8-5-.02 Requirement Relating To A Camera Photograph Accompanying Applications Of New And Used Motor Vehicle Dealers Regulatory License

810-8-5-.03 Fee For Costs Incurred In Providing Copies Of Privilege/Regulatory License Records

810-8-5-.04 Investigation Procedures For Open Assignment Of Title

810-8-5-.05 Clarification Of Definitions And Exemptions For Lumber And Timber Dealers

810-8-5-.06 Evidence Of Liability Insurance For Motor Vehicle Dealers, Motor Vehicle Reconditioners, Motor Vehicles Rebuilders, Or Motor Vehicle Wholesalers, Licensed Under Act Number 539

810-8-5-.07 Bond For New Motor Vehicle Dealers, Used Motor Vehicle Dealers, Motor Vehicle Reconditioners, Motor Vehicle Rebuilders Or Motor Vehicle Wholesalers

810-8-5-.08 Bond Continuation Certificate For New Motor Vehicle Dealers, Used Motor Vehicle Dealers, Motor Vehicle Reconditioners, Motor Vehicle Rebuilders Or Motor Vehicle Wholesalers

810-8-5-.09 Bond Claim For New Motor Vehicle Dealers, Used Motor Vehicle Dealers, Motor Vehicle Reconditioners, Motor Vehicle Rebuilders Or Motor Vehicle Wholesalers

810-8-5-.01 Specification Relating To Sign Requirements Of New And Used Motor Vehicle Dealers. The purpose of this rule is to set forth specifications for the sign requirements for new and/or used motor vehicle dealers. An appropriate sign of sufficient size should be legible from the street fronting the display area, or from a distance to fifty yards, whichever is greater, so as to apprise a reasonable consumer that a retail motor vehicle sales business is being conducted at said location. This sign may be free standing or attached to the face of a building, and shall be erected at the location stated on the regulatory license application. The sign shall use the name under which the applicant is licensed, and should this name not clearly identify the applicant as a seller of new and/or used motor vehicles, then a supplement sign shall be attached, and state, in letters not less than six inches high, "used motor vehicle dealer" and/or "new motor vehicle dealer" as appropriate.

Author: Dwight W. Pridgen

Statutory Authority: Code of Ala. 1975, §§40-12-30; 40-12-392.

History: Filed April 20, 1992; certification filed August 14, 1992; effective September 18, 1992.

810-8-5-.02 Requirement Relating To A Camera Photograph Accompanying Applications Of New And Used Motor Vehicle Dealers Regulatory License. The purpose of this rule is to set forth the requirement that an applicant for a new and/or used motor vehicle dealer regulatory license shall submit with the required application a camera photograph. This photograph shall be an image of the principal sign displayed and situated on the dealer's permanent location or locations apprising the public that a retail motor sales business is being conducted at said location. In addition, the photograph shall contain any supplemental sign required to be attached to the principal sign. Any new and/or used motor vehicle dealer having more than one location shall submit a photograph for each location. The photograph shall be of such visual quality and size that a reasonable viewer of the photograph could discern all lettering appearing on the sign or signs. Failure to submit necessary photograph or photographs with said application will result in rejection of the application.

Author: Dwight W. Pridgen

Statutory Authority: Code of Ala. 1975, §§40-12-392; 40-12-30.

History: Filed April 20, 1992; certification filed August 14, 1992; effective September 18, 1992.

810-8-5-.03 Fee For Costs Incurred In Providing Copies Of Privilege/Regulatory License Records.

(1) A fee of fifty dollars ($50.00) per request plus $.03 per printed page shall be charged for requests for privilege license information and a fee of twenty-five dollars ($25.00) shall be charged for requests for regulatory license information. Law enforcement agencies and other federal, state, county, and municipal agencies of all jurisdictions who reciprocate with information and/or assistance to the Alabama Department of Revenue shall be exempt from the payment of this fee.

(2) All persons who request privilege/regulatory license information from the License Section of the Natural Resources and License Tax Division, Alabama Department of Revenue, shall apply in writing. Payment of fifty dollars ($50.00) by certified funds per request should be submitted with the request for privilege license information. The $.03 per printed page fee will be paid after printing but prior to mailing. Payment of twenty-five dollars ($25.00) by certified funds should be submitted with the request for regulatory license information.

Author: Paul Bozeman

Statutory Authority: Code of Ala. 1975, §40-2A-7(a)(5).

History: New Rule: Filed January 30, 1996; effective March 5, 1996.

810-8-5-.04 Investigation Procedures For Open Assignment Of Title.

(1) An open title is defined in Section 40-12-396(b)(3), Code of Ala. 1975, as "accepting open assignment of title and/or bill of sale for a motor vehicle which is not completed by identifying said licensee as the purchaser or assignee of the motor vehicle." The following procedures will be utilized when it is determined a licensed motor vehicle dealer is accepting open titles in violation of the code.

(2) A Notice of Statutory Non-Compliance will be issued giving the taxpayer ten calendar days from the date of the notice to comply.

(a) A list of all open title(s) will be made reflecting the issuing state, title number, vehicle identification number, make and model of the vehicle, and other information as deemed necessary.

(b) A copy of the front and back of each open title will be obtained.

(3) Revisit the licensed motor vehicle dealer after the expiration of the ten calendar day period. If the dealer is then in compliance, no further action will be pursued. However, if the dealer is found to still be in possession of open title(s), an investigation report will be delivered to the Manager of the License Section for evaluation. Based upon the findings, the dealer may be assessed a $1,000 penalty for willful failure to comply under Section 40-12-29, Code of Ala. 1975. An action to revoke the licensed motor vehicle dealer's license may be initiated.

(4) Should a dealer previously given a Notice of Statutory Non-Compliance be in possession of open title(s) in the future, a Notice of Statutory Non-Compliance will be issued to the licensed motor vehicle dealer to take effect upon date of the notice. This offense shall be considered willful failure to comply and a $1,000 penalty will be assessed under Section 40-12-29. An action to revoke the licensed motor vehicle dealer's license may also be initiated.

(5) The motor vehicle dealer will be provided a copy of his appeal rights under Section 40-2A-8, Code of Ala. 1975, when action to revoke his license is taken.

Author: Raymond F. Atkins

Authority: Code of Ala. 1975, §§40-2A-7(a)(5), 40-12-396.

History: New Rule: Filed October 15, 1998; effective date November 19, 1998.

810-8-5-.05 Clarification Of Definitions And Exemptions For Lumber And Timber Dealers.

(1) Scope: A wholesale lumber and timber dealer is one who buys and resells lumber and timber at wholesale in substantially the same condition as when purchased. This regulation provides definitions and clarifications for the enforcement of Section 40-12-121, Code of Ala. 1975.

(2) Definitions: The following terms shall have the meaning ascribed to them for purposes of this regulation:

(a) Lumber - Timber, esp. that sawed or spilt into boards, planks, staves, etc., and of comparatively small dimensions.

(b) Timber - Land covered by trees from which timber is produced; forest; wood; trees collectively; also a tree or its bole. Wood suitable for building houses, bridges, ships, etc. whether on the tree or cut and seasoned; wood used in carpentry or joinery. A squared or dressed piece of wood, esp. one of comparatively large width and thickness (in United States, four inches or more), ready for use or already forming part of a structure; as the timbers of a roof; bridge or floor timbers. Lumber.

(c) Wholesale Dealer/Jobber - Any persons, firms, or corporations who sell at wholesale only.

(d) Wholesale - a sale to one who intends to, and does, resell to the ultimate consumer.

(3) The following shall be exempt for purchasing this license:

(a) A sawmill, pole mill, veneer mill, planning mill, box factories, etc., regularly licensed under Section 40-12-154 or 40-12-177, shall not become liable for the license tax imposed by this section by reason of his purchasing partially manufactured lumber from other mills, if the processing of said partially manufactured lumber is completed at the plant of the mill operator so purchasing the same and the lumber is thereafter shipped or sold in the same manner as lumber manufactured at the plant of such operator; provided, that such purchases do not exceed in volume the lumber manufactured by such operator at his own plant or plants.

(b) A property owner selling timber from his own property.

Author: Raymond F. Atkins

Statutory Authority: Code Of Ala. 1975, §§40-2A-7(a)(5), 40-12-121, 40-12-154, 40-12-177.

History: New Rule: Filed May 13, 1999; effective June 17, 1999.

810-8-5-.06 Evidence Of Liability Insurance For Motor Vehicle Dealers, Motor Vehicle Reconditioners, Motor Vehicles Rebuilders, Or Motor Vehicle Wholesalers, Licensed Under Act Number 539.

(1) PURPOSE: Section 40-12-392(e), Code of Ala. 1975, requires licensed motor vehicle dealers, motor vehicle reconditioners, motor vehicle rebuilders and motor vehicle wholesalers to maintain blanket motor vehicle liability insurance coverage, and to file evidence of such insurance with the application for license. This rule establishes guidelines for the required coverage, and specifies the proof of liability insurance which shall be filed with the application for license.

(2) PROOF OF INSURANCE: Each applicant must file an original or facsimile certificate of liability insurance with the license application. The certificate must contain the following information:

(a) The name of the insurance company providing the coverage.

(b) The name of the agent of the insurance company who produced the certificate.

(c) The original or facsimile signature of an authorized representative of the insurance company, and his State of Alabama license number.

(d) The insured party, which must be the true legal name of the party for whom a license is being sought, as follows:

(i) If an individual, the applicant's name as well as the business name.

(ii) If a partnership, the names of all partners and the name of the partnership.

(iii) If a limited liability company, the names of all members and the name of the company.

(iv) If a corporation, the corporate name.

(e) The physical address of each location for which insurance coverage is provided. Coverage must be provided for each location for which a license is sought.

(f) A description of the vehicles covered by the insurance. (See section 4.)

(g) The effective date and the expiration date of the insurance coverage. (See section 5.)

(h) The dollar amount of insurance coverage provided. (See section 6.)

(i) A statement that the insurance company will provide 30 days written notice to the certificate holder in the event the coverage is canceled before the policy expiration date.

(j) The certificate holder must be listed as:

Alabama Department of Revenue

Sales, Use, & Business Tax Division

P.O. Box 327550

Montgomery, AL 36132-7550.

(3) CERTIFICATE DATE: The insurance certificate must be dated as follows:

(a) For a license holder in good standing on the last day of a license year whose renewal application is received before the end of the normal renewal month for the new year, the certificate must be dated no earlier than the first day of the last month of the expiring license year. For example, renewal applications for licenses expiring September 30, which are received before the end of October, must be accompanied by an insurance certificate dated no earlier than September 1.

(b) For all new applicants, for applicants not in good standing on the last day of the expiring license year, and for any applications received after the normal renewal month for a license year, the certificate must be dated no earlier than 15 days prior to the date the application is received.

(4) COVERED VEHICLES: Blanket coverage must be provided whether in the form of a garage liability insurance policy or other policy, to include the following:

(a) Any vehicle owned by the dealer, regardless of the party in possession of the vehicle, whether located at a licensed location of the dealer, or operated on any public street or highway within the State of Alabama.

(b) Any non-owned vehicle in the possession of the dealer, its partners, directors, agents, or employees, whether located at a licensed location of the dealer, or operated on any public street or highway within the State of Alabama.

(5) COVERAGE PERIOD: The coverage may not be for a period less than one year. It must not expire prior to the end of 75 days after the certificate date, or the expiration date of the license period.

(6) MINIMUM COVERAGE AMOUNTS: The coverage amounts shown must be no less than the minimum amounts set for bodily injury or death and for destruction of property under Section 32-7-6(c), Code of Ala. 1975.

(7) PENALTY AND REVOCATION FOR MISREPRESENTATION OF INSURANCE COVERAGE AT THE TIME OF APPLICATION: In any case where an applicant knowingly furnishes an insurance certificate purporting insurance coverage which is false or nonexistent, or which he knows has lapsed prior to the application date, a penalty of $1,000.00 shall be assessed in accordance with Section 40-12-29, Code of Ala. 1975. Any license issued to said applicant shall be revoked in accordance with Section 40-12-396(b)(1), Code of Ala. 1975 , and the applicant will not be considered for another license for a period of two years after the revocation. After the expiration of two years and the payment of all applicable penalties, the applicant may be considered for a license after an investigation as authorized by Section 40-12-392(a), Code of Ala. 1975.

(8) REVOCATION FOR FAILURE TO MAINTAIN INSURANCE COVERAGE: The license of any dealer who fails to maintain insurance coverage as required shall be revoked in accordance with Section 40-12-396(b)(2), Code of Ala. 1975. If more than three notices of intent to cancel insurance for nonpayment of a premium, are received from the insurance carrier in a 12-month period, the license shall be revoked unless the dealer furnishes proof of payment, in full, of the premium remaining for the coverage year.

Author: Curtis E. Stewart

Statutory Authority: Code of Ala. 1975, §§40-2A-7(a)(5), 40-12-392(a).

History: New Rule: Filed August 30, 2000, effective October 4, 2000.

810-8-5-.07 Bond For New Motor Vehicle Dealers, Used Motor Vehicle Dealers, Motor Vehicle Reconditioners, Motor Vehicle Rebuilders, Or Motor Vehicle Wholesalers.

(1) PURPOSE: Section 40-12-398, Code of Ala. 1975, requires motor vehicle dealers, motor vehicle reconditioners, motor vehicle rebuilders, and motor vehicle wholesalers to deliver to the Commissioner a good and sufficient surety bond in the sum of $25,000 for a new motor vehicle dealer and $10,000 for all other dealers. This rule amends the existing bond forms and establishes the new forms of the bonds to be received from each license applicant.

(2) BOND FORM: The bond form must be in a form as prescribed in the attached appendices and the surety company shall provide the following information:

(a) The true legal name of the party for whom a bond is being sought, as follows:

(i) If an individual, the applicant’s name as well as well as the business name.

(ii) If a partnership, the names of all partners and the name of the partnership.

(iii) If a limited liability company, the names of all members and the name of the company.

(iv) If a corporation, the corporate name.

(b) The city, county and state in which the business is located.

(c) The name and address of the surety company providing the coverage.

(d) The effective date and the expiration date of the bond coverage. (See Section 4)

(e) The issue date of the bond.

(f) The original signature of an agent of the surety company.

(g) The original signature of an Alabama resident agent.

(h) The signature of the applicant (individual), all partners, all members of the LLC or a corporate officer.

(i) The telephone number of the Alabama resident agent.

(3) BOND REQUIREMENTS:

(a) The bond must be accompanied by an original power of attorney form, indicating that the agent is authorized to execute the bond on behalf of the surety company.

(b) The bond form and power of attorney must have the same issue date.

(c) The bond form shall be an original with original signatures. No facsimiles, photocopies, letters or phone calls are acceptable substitutes for the original bond.

(4) COVERAGE PERIOD: The coverage may not be for a period of more than one year. It must not begin prior to October 1 and must expire on September 30 of the same license year.

(5) Beginning with the license year 2002/2003, the forms in the appendices must be used. All prior versions are obsolete.

Author: Ella Stubbs Jones

Statutory Authority: Code of Ala. 1975, §§40-2A-7(a)5, 40-12-398.

History: New Rule: Filed January 17, 2003; effective February 21, 2003.

810-8-5-.08 Bond Continuation Certificate For New Motor Vehicle Dealers, Used Motor Vehicle Dealers, Motor Vehicle Reconditioners, Motor Vehicle Rebuilders, Or Motor Vehicle Wholesalers.

(1) PURPOSE: Section 40-12-398, Code of Ala 1975, requires new motor vehicle dealers, used motor vehicle dealers, motor vehicle reconditioners, motor vehicle rebuilders, and motor vehicle wholesalers to provide a new bond or proper continuation certificate at the beginning of each license year. This rule establishes the form of a proper continuation certificate to be filed in lieu of a new bond with the application for license.

(2) ACCEPTANCE OF CONTINUATION CERTIFICATE: A proper

continuation certificate will be accepted, provided:

(a) Applicant was licensed and in good standing in the previous license year.

(b) Applicant has previously provided an original bond form in accordance with Rule 810-8-5-.07 and a proper continuation certificate for each intervening license year. There can be no lapse in bond coverage since the original bond was presented to the Department.

(c) The continuation certificate is in the form as prescribed in the Appendix.

(3) PRESCRIBED FORM: The continuation form shall be in the form as prescribed in the appendix and the surety company shall provide the following information:

(a) The name of the surety company providing coverage.

(b) The bond number as assigned on the original bond form.

(c) The dollar amount of the extended bond coverage.

(d) The true legal name of the party for whom a continuation certificate is being furnished, as follows:

(i) If an individual, the applicant’s name as well as well as the business name.

(ii) If a partnership, the names of all partners and the name of the partnership.

(iii) If a limited liability company, the names of all members and the name of the company.

(iv) If a corporation, the corporate name.

(e) The effective date and the expiration date of the extended coverage. (See Section 4)

(f) The issue date of the continuation certificate.

(4) COVERAGE PERIOD: The extended coverage may not be for a period of more than one year. It must not begin prior to October 1 and must expire on September 30 of the same license year.

(5) ORIGINAL CONTINUATION CERTIFICATE REQUIREMENTS: The continuation certificate must contain the original signature of an authorized agent of the surety company, or the original seal of the surety company. The agent’s copy will not be accepted.

(6) SURETY COMPANY’S FORM: A Surety Company may use its own form, provided:

(a) The Surety does not alter or change any terms or conditions of the original bond. An example of an unacceptable alteration would be changing the amount of bond coverage for each license year.

(b) The surety company provides all required information.

Author: Ella Stubbs Jones

Statutory Authority: Code of Ala. 1975, §§40-2A-7(a)(5), 40-12-398.

History: New Rule: Filed January 17, 2003; effective February 21, 2003.

810-8-5-.09 Bond Claim For New Motor Vehicle Dealers, Used Motor Vehicle Dealer, Motor Vehicle Reconditioner, Motor Vehicle Rebuilders, Or Motor Vehicle Wholesalers.

(1) PURPOSE: Section 40-12-398, Code of Ala. 1975, states that the bond shall be in favor of any person who shall recover any judgment for any loss as a result of any violation of the conditions of the license of a motor vehicle dealer, motor vehicle reconditioner, motor vehicle rebuilder, and motor vehicle wholesaler. This rule establishes the procedures to be followed for making a bond claim with the commissioner.

(2) JUDGMENT REQUIRED: In order to make a bond claim, a claimant must first secure a final judgment from a court of competent jurisdiction.

(3) COLLECTION EFFORT: A person wishing to make a bond claim must exhaust all available remedies in attempting to collect the judgment, prior to making a bond claim with the commissioner.

(4) REQUIRED DOCUMENTS: The following items must be submitted to the commissioner in order for a bond claim to be processed.

(a) A complaint relating to the violation of the conditions of a contract made in connection with the sale or exchange of a motor vehicle; or the violation of any provision of law relating to the conduct of the business of a motor vehicle dealer, motor vehicle reconditioner, motor vehicle rebuilder, or motor vehicle wholesaler.

(b) A final judgment relating to the complaint in item (a) above. The judge rendering such must sign the judgment. No certificate or any other document that is not signed by the judge will be accepted.

(c) A description of efforts made to enforce the judgment; along with a statement of all amounts recovered, or a statement that no amount has been recovered.

Author: Ella Stubbs Jones

Statutory Authority: Code of Ala. 1975, §§40-2A-7(a)5, 40-12-398.

History: New Rule: Filed January 17, 2003; effective February 21, 2003.

APPENDIX A - CHAPTER 810-8-5

Attachment 810-8-5-.07

Bond of Used Motor Vehicle Dealer, Motor Vehicle Reconditioner, Rebuilder, or Wholesaler

See Master Code for form

Statutory Authority: Code of Ala. 1975, §§40-2A-7(a)(5), 40-12-398.

History: New Form (Lic: 539-4A Rev 7/02): Filed January 17, 2003; effective February 21, 2003.

APPENDIX A – CHAPTER 810-8-5

Attachment – 810-8-5-.08

Continuation Certificate of New Motor Vehicle Dealer, Used Motor Vehicle Dealer, Motor Vehicle Reconditioner, Rebuilder, or Wholesaler

See Master Code for copy of form

Statutory Authority: Code of Ala. 1975, §§40-2A-7(a)(5), 40-12-398.

History: New Form (Lic: 538-5 7/02): Filed January 17, 2003; effective February 21, 2003.

APPENDIX B - CHAPTER 810-8-5

Attachment 810-8-5-.07

Bond of New Motor Vehicle Dealer

See Master Code for copy of form

Statutory Authority: Code of Ala. 1975, §§40-2A-7(a)(5), 40-12-398.

History: New Form (Lic: 539-4B Rev 7/02): Filed January 17, 2003; effective February 21, 2003.