Amendment ASA1-AB954

LRBs0534/4

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1995 - 1996 LEGISLATURE

ASSEMBLY SUBSTITUTE AMENDMENT 1, To 1995 ASSEMBLY BILL 954

March 12, 1996 - Offered by Committee on Financial Institutions.

AB954-ASA1,2,7 An Act to repeal 218.01 (6) (b) 1. to 8., 218.01 (6) (bm) and (bn), 218.01 (6) (j) and 422.201 (4); to renumber 218.01 (2) (bb); to renumber and amend 218.01 (3) (bf) 1. and 218.01 (6) (b) (intro.); to amend 138.05 (6), 218.01 (1) (n) 1. and 2., 218.01 (1) (p), 218.01 (1) (v), 218.01 (1a), 218.01 (2) (b), 218.01 (2) (d) 8. b., 218.01 (2) (dr), 218.01 (2) (h) 2., 218.01 (2) (k) 3., 218.01 (2) (k) 5., 218.01 (3) (a) 5., 218.01 (3) (a) 6., 218.01 (3) (a) 8., 218.01 (3) (a) 9., 218.01 (3) (a) 10., 218.01 (3) (a) 13., 218.01 (3) (a) 14., 218.01 (3) (a) 18., 218.01 (3) (a) 19., 218.01 (3) (a) 20., 218.01 (3) (a) 21., 218.01 (3) (a) 25., 218.01 (3) (a) 29., 218.01 (5) (a), 218.01 (6) (d), 218.01 (7b), 218.01 (9) (b), 218.04 (5) (a) 5., 344.51 (title), 344.51 (1), 344.51 (2), 409.201, 409.203 (5), 421.103 (2), 421.201 (5), 421.202 (6), 421.202 (7), 421.202 (8), 421.301 (20) (intro.), 421.301 (35), 422.201 (7) (intro.) and (a), 422.201 (8), (9) and (12), 422.202 (1) (b) (intro.), 422.207 (1), 422.208, 422.303 (3) (intro.), 422.413 (1), 422.417 (2), 424.201 (1) and (2), 424.301 (1) (intro.), 425.106 (1) (intro.), 425.107 (4), 426.104 (1), 426.104 (2) (intro.), 426.104 (2) (b) to (e), 426.104 (4) (a), 426.104 (4) (ab) 1., 426.104 (4) (b), 426.105, 426.107, 426.109, 426.110 (1), 426.110 (3), 426.110 (14), 426.111, 426.201 (2) (g), 426.202 (1m) (c) and 426.301; and to create 218.01 (1) (ar), 218.01 (1) (ct), 218.01 (1) (ji), 218.01 (1) (jj), 218.01 (1) (jk), 218.01 (1) (o) 5., 218.01 (1) (qm), 218.01 (1) (qr), 218.01 (1) (qt), 218.01 (2) (bb) 2., 218.01 (3) (bf) 1. b., 218.01 (6x), 421.202 (9), 421.301 (25m), 421.301 (43m), 422.202 (1) (e), 424.201 (3) and chapter 429 of the statutes; relating to: the leasing of motor vehicles, motor vehicle consumer leases, prelease agreements, financial responsibility for domestic rented or leased vehicles and providing a penalty.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

AB954-ASA1, s. 1 Section 1. 138.05 (6) of the statutes is amended to read:

AB954-ASA1,2,10 138.05 (6) This section does not apply to transactions governed by chs. 421 to 427 and 429 or to discounts described in s. 422.201 (8) or (10) (e).

AB954-ASA1, s. 2 Section 2. 218.01 (1) (ar) of the statutes is created to read:

AB954-ASA1,2,12 218.01 (1) (ar) "Capitalized cost" has the meaning given in s. 429.104 (5).

AB954-ASA1, s. 3 Section 3. 218.01 (1) (ct) of the statutes is created to read:

AB954-ASA1,2,14 218.01 (1) (ct) "Consumer lease" has the meaning given in s. 429.104 (9).

AB954-ASA1, s. 4 Section 4. 218.01 (1) (ji) of the statutes is created to read:

AB954-ASA1,2,17 218.01 (1) (ji) "Lease" or "leasing" means, with respect to a lessor, to enter into or offer to enter into a consumer lease with a lessee.

AB954-ASA1, s. 5 Section 5. 218.01 (1) (jj) of the statutes is created to read:

AB954-ASA1,2,19 218.01 (1) (jj) "Lessee" has the meaning given in s. 429.104 (17).

AB954-ASA1, s. 6 Section 6. 218.01 (1) (jk) of the statutes is created to read:

AB954-ASA1,2,22 218.01 (1) (jk) "Lessor" means a person who leases a motor vehicle to a lessee under a consumer lease, but does not include an assignee of a consumer lease.

AB954-ASA1, s. 7 Section 7. 218.01 (1) (n) 1. and 2. of the statutes are amended to read:

AB954-ASA1,3,3 218.01 (1) (n) 1. For commission, money or other thing of value, sells, leases, exchanges, buys, rents with the option of purchase, offers or attempts to negotiate a sale, consumer lease or exchange of an interest in motor vehicles; or,

AB954-ASA1,3,6 2. Is engaged wholly or in part in the business of selling or leasing motor vehicles, including motorcycles, whether or not such motor vehicles are owned by such person, firm or corporation.

AB954-ASA1, s. 8 Section 8. 218.01 (1) (o) 5. of the statutes is created to read:

AB954-ASA1,3,9 218.01 (1) (o) 5. Sales finance companies when engaged in purchasing or otherwise acquiring consumer leases from a motor vehicle dealer.

AB954-ASA1, s. 9 Section 9. 218.01 (1) (p) of the statutes is amended to read:

AB954-ASA1,3,15 218.01 (1) (p) "Motor vehicle salesperson" means sales representative, sales manager, general manager or other person who is employed by a motor vehicle dealer for the purpose of selling or approving retail sales, or leasing or approving consumer leases, of motor vehicles. Any motor vehicle salesperson licensed hereunder shall be licensed to sell or lease only for one dealer at a time.

AB954-ASA1, s. 10 Section 10. 218.01 (1) (qm) of the statutes is created to read:

AB954-ASA1,3,19 218.01 (1) (qm) "Prelease agreement" means an agreement to enter into a consumer lease whereby the motor vehicle will be available and ready to be delivered to the prospective lessee at a later time.

AB954-ASA1, s. 11 Section 11. 218.01 (1) (qr) of the statutes is created to read:

AB954-ASA1,3,21 218.01 (1) (qr) "Prospective lessee" has the meaning given in s. 429.104 (21).

AB954-ASA1, s. 12 Section 12. 218.01 (1) (qt) of the statutes is created to read:

AB954-ASA1,3,23 218.01 (1) (qt) "Prospective lessor" has the meaning given in s. 429.104 (21m).

AB954-ASA1, s. 13 Section 13. 218.01 (1) (v) of the statutes is amended to read:

AB954-ASA1,4,7 218.01 (1) (v) "Sales finance company" means and includes any person, firm or corporation engaging in the business, in whole or in part, of acquiring by purchase or by loan on the security thereof, or otherwise, retail instalment contracts or consumer leases from retail sellers or lessors in this state, including any motor vehicle dealer who sells or leases any motor vehicle on an instalment contract or consumer lease or acquires any retail instalment contracts in the dealer's retail sales or leases of motor vehicles.

AB954-ASA1, s. 14 Section 14. 218.01 (1a) of the statutes, as affected by 1995 Wisconsin Act 27, is amended to read:

AB954-ASA1,4,24 218.01 (1a) Authority of licensors. The department of transportation shall issue the licenses provided for in sub. (2) (d) 1. to 6. and have supervision over the licensees thereunder in respect to all the provisions of this section, except only as to such matters as relate to the sale of motor vehicles on retail instalment contracts and the financing and servicing of such contracts and as to such matters as relate to prelease agreements under sub. (6x) and consumer leases under chs. 421 to 427 and 429, over which matter the division of banking shall have jurisdiction and control, and the division of banking shall issue the licenses to sales finance companies. Either licensor hereunder shall, upon request, furnish the other licensor with any information it may have in respect to any licensee or applicant for license or any transaction in which such licensee or applicant may be a party or be interested. No license shall be issued under sub. (2) (d) 1. and 8. until both licensors have approved the application. The suspension or revocation of either of such licenses shall automatically likewise suspend or revoke the other license; and such suspension or revocation shall be certified by the licensor ordering it to the other licensor.

AB954-ASA1, s. 15 Section 15. 218.01 (2) (b) of the statutes, as affected by 1995 Wisconsin Act 27, section 5843, is amended to read:

AB954-ASA1,5,17 218.01 (2) (b) Application for license shall be made to the licensor, at such time, in such form and with such information as the licensor shall require and shall be accompanied by the required fees. An applicant for a sales finance company license, other than a motor vehicle dealer, shall pay to the division of banking a nonrefundable $300 investigation fee in addition to the license fee under par. (dr). If the cost of an investigation exceeds $300, the applicant shall, upon demand of the division of banking, pay the amount by which the cost of the investigation exceeds the nonrefundable fee. A licensee is not required to pay an investigation fee for the renewal of a license. The licensor may require the applicant to provide information relating to any pertinent matter that is commensurate with the safeguarding of the public interest in the locality in which the applicant proposes to engage in business, except that information relating to the applicant's solvency and financial standing may not be required for motor vehicle dealers except as provided in par. (h) 1. The information provided may be considered by the licensor in determining the fitness of the applicant to engage in business as set forth in this section.

AB954-ASA1, s. 16 Section 16. 218.01 (2) (bb) of the statutes, as affected by 1995 Wisconsin Act 27, is renumbered 218.01 (2) (bb) 1.

AB954-ASA1, s. 17 Section 17. 218.01 (2) (bb) 2. of the statutes is created to read:

AB954-ASA1,6,3 218.01 (2) (bb) 2. A sales finance company or an applicant for a sales finance company license shall provide and maintain in force a bond or irrevocable letter of credit of not less than $25,000 issued by a surety company licensed to do business in this state or a federally insured financial institution, as defined in s. 705.01 (3). The bond or letter of credit shall be payable to the state of Wisconsin for the use of the state and of any person who sustains a loss because of an act of a sales finance company that constitutes grounds for the suspension or revocation of a license under this section.

AB954-ASA1, s. 18 Section 18. 218.01 (2) (d) 8. b. of the statutes, as affected by 1995 Wisconsin Act 27, is amended to read:

AB954-ASA1,6,9 218.01 (2) (d) 8. b. For motor vehicle dealers that operate as a sales finance company or that carry or retain time sales retail instalment contracts or consumer leases for more than 30 days, to the division of banking, the same as for sales finance companies under par. (dr), except for gross volume of $100,000 or less, $50.

AB954-ASA1, s. 19 Section 19. 218.01 (2) (dr) of the statutes, as affected by 1995 Wisconsin Act 27, is amended to read:

AB954-ASA1,6,21 218.01 (2) (dr) The fee for licenses for sales finance companies, except as provided in par. (d) 8., for each calendar year, or part of a calendar year, is based on the gross volume of purchases of retail sales instalment contracts and consumer leases of motor vehicles sold or leased in this state for the 12 months immediately preceding October 31 of the year in which the application for license is made, as follows: On a gross volume of $100,000 or less, $50; and on each $100,000 or part thereof over $100,000, an additional $15. No extra charge shall be made for branch licenses for sales finance companies. Gross volume shall be based on the unpaid balance of the retail instalment contracts and the base lease payments, as defined in s. 429.104 (4), of the consumer leases.

AB954-ASA1, s. 20 Section 20. 218.01 (2) (h) 2. of the statutes, as affected by 1995 Wisconsin Act 27, is amended to read:

AB954-ASA1,7,12 218.01 (2) (h) 2. Provided the licensor has reasonable cause to doubt the financial responsibility of the applicant or licensee or the compliance by the applicant or licensee with this section, the licensor may require the applicant or licensee to furnish and maintain a bond in the form, amount and with the sureties it approves, but not less than $5,000, nor more than $100,000, conditioned upon the applicant or licensee complying with the statutes applicable to the licensee and as indemnity for any loss sustained by any person by reason of any acts of the licensee constituting grounds for suspension or revocation of the license under this section. The bonds shall be executed in the name of the department of transportation for the benefit of any aggrieved parties; provided that the aggregate liability of the surety to all such parties shall, in no event, exceed the amount of the bond. The bonding requirements in this subdivision shall not apply to manufacturers, factory branches, and their agents and is in addition to the bond or letter of credit required of a motor vehicle dealer under par. (bb) 1.

AB954-ASA1, s. 21 Section 21. 218.01 (2) (k) 3. of the statutes is amended to read:

AB954-ASA1,7,15 218.01 (2) (k) 3. Has had experience or training in, or is otherwise qualified for, selling or leasing motor vehicles.

AB954-ASA1, s. 22 Section 22. 218.01 (2) (k) 5. of the statutes is amended to read:

AB954-ASA1,7,18 218.01 (2) (k) 5. Is reasonably familiar with the motor vehicle sales or consumer lease laws or contracts that the applicant is proposing to solicit, negotiate or effect.