CHAPTER 32-6B
REGULATION OF VEHICLE DEALERS
32-6B-1 Definitions.
32-6B-1.1 Motor home defined.
32-6B-1.2 Recreational park trailer defined.
32-6B-1.3 Temporary special events lot defined.
32-6B-1.4 Temporary supplemental lot defined.
32-6B-2 Principal place of business defined.
32-6B-3 Sale on consignment--Contract required--Form.
32-6B-3.1 Sale on consignment prohibited for vehicle without statement of origin.
32-6B-3.2 Odometer reading required for consignment or auction--Violation a misdemeanor.
32-6B-3.3 Consignment or auction of vehicle with lien--Written consent and release by lien holder.
32-6B-3.4 Auction on consignment of older vehicle titled in another state.
32-6B-3.5 Auction on consignment of older motorcycle titled in another state.
32-6B-3.6 Sale of used motorcycles and off-road vehicles on consignment where dealer possesses state title or title from bordering state--Exception.
32-6B-4 License required--Violation as misdemeanor.
32-6B-4.1 Brokering prohibited--Violation as misdemeanor.
32-6B-5 Exemptions from licensing requirements.
32-6B-5.1 32-6B-5.1. Repealed by SL 2019, ch 130, § 20.
32-6B-5.2 Permit for dealer licensed in another state to sell motorcycles at event.
32-6B-5.3 Permit for dealer licensed in another state to sell trailers at event.
32-6B-5.4 Permit for dealer licensed in another state to sell older vehicles and motorcycles on consignment at public auction.
32-6B-5.5 Permit for manufacturer to display trailers at event.
32-6B-5.6 Permit for manufacturer to display or demonstrate customized motor vehicle at event.
32-6B-5.7 Permit for sponsor to display customized motorcycles at event.
32-6B-6 Application required--Contents.
32-6B-7 Bond required--Amount--Term--Continuation certificate--Notification of payment or cancellation--Additional bond.
32-6B-7.1 Pooling of assets to satisfy bond requirements--Right, title, and interest in state--Termination--Notice of payment of claim--Replenishment of pool.
32-6B-7.2 Increase in dealer bond amount--Implementation.
32-6B-8 Dealer in new vehicles to maintain repair shop.
32-6B-9 Dealer in new vehicles to give bond to cover warranty obligations--Amount--Exemption.
32-6B-10 Manufacturer's contract or franchise prerequisite to license for dealer in new vehicles.
32-6B-11 Verification of application by department--Refusal to issue license.
32-6B-12 Classification of licenses--Issuance of license certificate.
32-6B-12.1 Low-speed vehicle retail sales.
32-6B-13 Fees for dealer's licenses--Disposition of fees.
32-6B-14 Dealer license--Annual review--Renewal notice--Suspension or revocation--Promulgation of Rules.
32-6B-15 Renewal application--Fees.
32-6B-16 Modification of license certificate--Display of license.
32-6B-17 Separate licenses--Requirement.
32-6B-18 Permission to change principal place of business within county.
32-6B-19 Supplemental licenses for supplemental lots within county--Exemptions.
32-6B-20 Books, records, and files to be kept--Inspection.
32-6B-20.1 Certificate kept at another dealership or at lending institution--Requirements--Notice.
32-6B-20.2 Offer to sell, sale, or exchange of vehicle without certificate of title allowed under specified circumstances.
32-6B-20.3 Agreement that dealer will satisfy lien by paying lienholder--Trade of vehicle or consignment agreement--Theft.
32-6B-20.4 Time period to satisfy lien after receipt of funds--Offering vehicle for sale prior to tender to lienholder.
32-6B-21 Issuance of dealer plates--Numbering--Fees--Return of plates--Misdemeanor.
32-6B-21.1 Mailing fees.
32-6B-22 Use of dealer plates--Transfer of plates--Violation as misdemeanor.
32-6B-22.1 Commercial motor vehicles licensed to dealers--Dealer 88 license plates--Return of plates--Violation as misdemeanor.
32-6B-22.2 Use of dealer 88 license plates--Transfer of plates.
32-6B-23 Issuance of motorcycle dealer and trailer dealer plates--Numbering--Display and use--Fees.
32-6B-24 Repossession of dealer plates.
32-6B-25 Use of vehicles bearing dealer's demonstration or in-transit permits--Time limitation--Issuance of permits for unauthorized purposes prohibited--Violation as misdemeanor.
32-6B-26 Temporary license permit--Provision by dealer.
32-6B-27 Location of temporary license permit.
32-6B-28 Time for application for registration by owner--Inspection of documents by law enforcement officer.
32-6B-29 Restrictions on dealer use of temporary license permits--Renewal prohibited--Violation as misdemeanor.
32-6B-30 Design of dealers' demonstration, in-transit and temporary license permits--Information required--Source of permits.
32-6B-31 32-6B-31 to 32-6B-33. Repealed by SL 2013, ch 142, §§ 2 to 4.
32-6B-34 Dealer's car auction agency--Defined--Applicability of chapter--Additional provisions.
32-6B-35 Dealer's car auction agency--Bond requirements--Dealer's right of action--Liability of surety.
32-6B-35.1 Dealer's car auction agency--Announcement at sale when title denotes any brand or damage--Return of vehicle.
32-6B-36 Dealer's car auction agency--Vehicles acceptable for sale--Permitted purchasers--Unauthorized sale a misdemeanor.
32-6B-36.1 Dealer's car auction agency--Government-owned vehicles.
32-6B-36.2 32-6B-36.2. Repealed by SL 2002, ch 152, § 3.
32-6B-36.3 Issuance of auction agency plates--Numbering--Fees--Return of plates--Misdemeanor.
32-6B-36.4 Use of agency plates--Transfer of plates--Violation as misdemeanor.
32-6B-37 Dealer's car auction agency--Records required.
32-6B-37.1 Public auction to keep records--Inspection by dealer appointed inspectors.
32-6B-38 Appointment of inspectors--Entry authorized--Complaints.
32-6B-39 Investigation of dealers--Authorized.
32-6B-40 32-6B-40. Repealed by SL 2005, ch 162, § 8.
32-6B-41 Grounds for denial of license or application of provisions of §§ .1 to .6, inclusive.
32-6B-41.1 Cease and desist order for specified violations--Period of effectiveness.
32-6B-41.2 Cease and desist order--Request for hearing--Procedure.
32-6B-41.3 Finality of cease and desist order.
32-6B-41.4 Order to pay fine or suspend or revoke license upon failure to comply with cease and desist order--Deposit of monetary penalties.
32-6B-41.5 Contest of order--Procedure.
32-6B-41.6 Finality of order.
32-6B-41.7 Cease and desist order--Failure to comply--Penalty.
32-6B-42 Notification of surety of license denial, suspension or revocation.
32-6B-43 32-6B-43, 32-6B-44. Repealed by SL 2005, ch 162, §§ 9, 10.
32-6B-45 Good cause required for franchisor termination, cancellation, nonrenewal, or change in competitive circumstances.
32-6B-46 32-6B-46. Repealed by SL 2010, ch 156, § 6, eff. Mar. 9, 2010.
32-6B-47 When franchisor may establish additional vehicle dealership for same line-make--Hearing.
32-6B-48 Factors in determining cause for establishing additional franchise for same line-make.
32-6B-49 Factors which are not cause for termination or noncontinuance of franchise or for establishing additional franchise for same line-make.
32-6B-49.1 Terms or conditions not allowed in franchise agreement.
32-6B-50 Notice of intention to enter into additional franchise for same line-make.
32-6B-51 Copies of notice to be sent to franchisees and other interested persons.
32-6B-52 Objection to approval of notice--Time for filing written objection--Approval absent timely objection.
32-6B-53 Hearing on objection--Time and place--Notice--Continuance.
32-6B-54 Burden of proof at hearing.
32-6B-55 Hearing upon change of circumstances.
32-6B-56 Dealer's license not to be issued to franchisee absent compliance by franchisor.
32-6B-56.1 Trailer franchisees not subject to certain provisions.
32-6B-57 Sale by franchisor to franchisee at lower price than that charged to other franchisee prohibited--Exceptions--Violation as misdemeanor--Damages.
32-6B-58 Franchisor, component manufacturer or manufacturer--Warranty agreement fulfillment--Process--Right to audit.
32-6B-58.1 Franchisor, component manufacturer, or manufacturer--Separate warranty for an engine, transmission, or rear axle--Process--Right to audit.
32-6B-58.2 Manufacturer or component manufacturer--Charge back--Prohibited in certain circumstances.
32-6B-58.3 Manufacturer or component manufacturer--Charge back--Permitted in certain circumstances.
32-6B-59 Right of department to apply for injunction against violation of chapter.
32-6B-60 Adoption of rules.
32-6B-61 Schedule of compensation for warranty work.
32-6B-62 Trailer dealers exempt from certain liability insurance requirements.
32-6B-63 Regulation of advertising.
32-6B-64 Advertising defined.
32-6B-65 32-6B-65. Repealed by SL 2005, ch 153, § 3.
32-6B-66 In-transit permits for certain trailer manufacturer's trailers.
32-6B-67 Promulgation of rules for in-transit permits for trailer manufacturer's trailers.
32-6B-68 Repealed.
32-6B-69 Franchise agreement--Change of terms--Dealer rights.
32-6B-69.1 Audit by franchisor--Limitation--Exception.
32-6B-70 License required for certain activities--Violation as misdemeanor--Additional violations as felony.
32-6B-71 Vehicle dealership--Death of owner--Succession of interest.
32-6B-72 Succession--Refusal to honor.
32-6B-73 Notification of decision to transfer, assign, or sell franchise agreement or dealership--Notification as application for approval.
32-6B-74 Contents of notice.
32-6B-75 Manufacturer or franchisor to determine prospective transferee's qualification--Notice of decision--Statement of reasons for rejection.
32-6B-76 Approval may not be unreasonably withheld.
32-6B-77 Filing objection when application rejected.
32-6B-78 Transferee's qualification as sole issue in objection.
32-6B-79 Manufacturer defined.
32-6B-80 Manufacturer or franchisor may not own or operate dealership--Exceptions.
32-6B-81 Manufacturer or franchisor may own or operate for limited period--Conditions.
32-6B-82 Exceptions for the purpose of broadening diversity of dealer body.
32-6B-83 Extension of time period in 32-6B-81--Application--Limit.
32-6B-84 32-6B-84. Repealed by SL 2010, ch 156, § 17, eff. Mar. 9, 2010.
32-6B-85 Civil action for injunction and damages.
32-6B-86 Applicability of SL 2010, ch 156 amendments.
32-6B-87 Dealers permitted to lease space in common area of shopping mall for displaying new vehicles--Restrictions--Exception.
32-6B-88 Off-road vehicle dealers exempt from certain special event permit requirements, fees, and taxes.
32-6B-89 Licensed dealer permitted to take vehicle to adjoining county for demonstration.
32-6B-1. Definitions.
Terms used in this chapter mean:
(1) "Administrator," the administrator of the dealer licensing and inspection program of the Department of Revenue;
(2) "Auctioneer," a person who presides over a public auction where following an initial starting price, bids are taken from two or more people until a final bid or price is established for a motor vehicle;
(3) "Authorized emergency vehicle," any vehicle of a fire department and any ambulance and emergency vehicle of a municipal department or public service corporation that are designated or authorized by the Department of Public Safety or the Department of Health;
(4) "Broker," a person who, for a fee, commission, or other valuable consideration, arranges or offers to arrange a transaction involving the sale or exchange of vehicles, and who is not:
(a) A dealer or a bona fide agent or employee of a dealer;
(b) A representative or a bona fide agent or employee of a manufacturer; or
(c) At any point in the transaction the bona fide owner of the vehicle involved in the transactions;
(5) "Chassis cab," any incomplete motor vehicle, with a completed occupant compartment, that requires only the addition of cargo carrying, work performing, or load bearing components to perform the vehicle's intended function;
(6) "Community," the franchisee's area of responsibility as stipulated in the franchise or a minimum radius of ten miles around an existing dealership;
(7) "Component manufacturer," a person that manufactures or assembles parts, components, complete assemblies, or sub-assemblies for vehicles, which are separately warranted from the vehicles, and does not otherwise manufacture or assemble vehicles;
(8) "Converter," a person who modifies or installs on previously assembled chassis special bodies or equipment that, when completed, form an integral part of the vehicle and that constitutes a major manufacturing alteration and who may issue a supplemental or secondary statement of origin;
(9) "Demonstration," the noncommercial use of a dealer owned vehicle by any employee of the dealership for any purpose in the ordinary course of business relating to the sale of the vehicle within the trade or market area of the dealership or demonstration by any prospective buyer for a period of three days. The term includes vehicles donated by a dealership to a community or organization and used for a one-day parade or event;
(10) "Department," the Department of Revenue;
(11) "Emergency vehicle dealer," any person who converts or manufacturers authorized emergency vehicles and who, for commission or with intent to make a profit or gain, sells, exchanges, rents with option to purchase, offers, or attempts to negotiate a sale or exchange of new, or new and used authorized emergency vehicles, or who is engaged wholly or in part in the business of selling new, or new and used authorized emergency vehicles;
(12) "Event," a fair, exposition, vehicle show, vehicle rally, or fishing tournament that is held once each year and lasts at least three days including any setup time but does not exceed fifteen days;
(13) "Final stage manufacturer dealer," any person who assembles or installs on a previously assembled new motor vehicle chassis cab any special body or equipment that forms an integral part of the motor vehicle, constitutes a major manufacturing alteration, and completes the vehicle;
(14) "Franchise," a written or oral agreement or contract between a franchisor and franchisee that fixes the legal rights and liabilities of the parties to the agreement or contract;
(15) "Franchisee," person who receives vehicles from a franchisor under a franchise and who offers and sells the vehicles to the general public;
(16) "Franchisor," any person engaged in the manufacturing or distribution of vehicles including any person who acts for the franchisor;
(17) "Good faith," honesty in fact and the observance of reasonable, nondiscriminatory commercial standards of fair dealing in the trade;
(18) "In-transit," the noncommercial use of a dealer owned vehicle by any employee of the dealership for travel to and from any service facility, detail shop, repair shop, gas station, car wash, dealer auction, another lot owned by the dealer, a supplemental lot, temporary special events lot, temporary supplemental lot, or any other location to facilitate a dealer trade;
(19) "Manufacturer," a person who manufactures or assembles vehicles, including motor homes, and who issues the original or first manufacturer's statement of origin. The term includes a central or principal sales corporation through which it distributes its products to franchised dealers;
(20) "Off-road vehicle," any self-propelled, two or more wheeled vehicle designed primarily to be operated on land other than a highway and includes any all terrain vehicle, dune buggy, and vehicle whose manufacturer's statement of origin or manufacturer's certificate of origin states that the vehicle is not for highway use;
(21) "Public auction," a business that is open to the public where South Dakota titled motor vehicles are consigned, displayed, and auctioned to the highest bidder by an auctioneer;
(22) "Sell-it-yourself lot," any space provided to a person for a fee to display that person's boat or vehicle for sale;
(23) "Semitrailer," any vehicle of the trailer type, equipped with a kingpin assembly, designed and used in conjunction with a fifth wheel connecting device on a motor vehicle and constructed so that some part of its weight and that of its load rests upon or is carried by another vehicle;
(24) "Supplemental lot," a physically separate location owned and maintained by a licensed dealer within the same county as the principal place of business;
(25) "Trailer," any vehicle without motive power designed to be coupled to or drawn by a motor vehicle and constructed so that no part of its weight or that of its load rests upon the towing vehicle;
(26) "Trailer dealer," any person who, for commission or with intent to make a profit or gain, sells, exchanges, rents with option to purchase, offers or attempts to negotiate a sale or exchange of new or used trailers, semitrailers or travel trailers or who is engaged in the business of selling new or used trailers, semitrailers or travel trailers whether or not the vehicles are owned by the person;
(27) "Travel trailer," any trailer or semitrailer that provides as its primary purpose adequate, comfortable, temporary living quarters while on pleasure excursions or while touring for business, professional, educational or recreational purposes;
(28) "Used vehicle dealer," any person who, for commission or with intent to make a profit or gain sells, exchanges, rents with option to purchase, offers or attempts to negotiate a sale or exchange of used vehicles or who is engaged in the business of selling used vehicles;
(29) "Vehicle," any new or used automobile, truck, truck tractor, motorcycle, off-road vehicle, motor home, trailer, semitrailer or travel trailer of the type and kind required to be titled and registered under chapters 32-3 and 32-5, or required to be titled under chapter 32-20 except any manufactured home, used mobile home, moped, or snowmobile; and
(30) "Vehicle dealer," any person who, for commission or with intent to make a profit or gain, sells, exchanges, rents with option to purchase, offers or attempts to negotiate a sale or exchange of new, or new and used vehicles, or who is engaged wholly or in part in the business of selling new, or new and used vehicles.
Source: SL 1986, ch 250, § 1; SL 1989, ch 256, § 7; SL 1992, ch 212; SL 1997, ch 182, §§ 1, 16, 17; SL 1998, ch 175, § 1; SL 1998, ch 176, § 1; SL 1999, ch 156, § 1; SL 2004, ch 17, § 85; SL 2004, ch 206, § 1; SL 2006, ch 162, § 1; SL 2006, ch 163, § 1; SL 2008, ch 53, § 3; SL 2010, ch 156, § 1, eff. Mar. 9, 2010; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011; SL 2012, ch 165, § 1; SL 2013, ch 140, § 1; SL 2014, ch 137, § 2; SL 2015, ch 277 (Ex. Ord. 15-1), § 35, eff. Apr. 20, 2015; SL 2016, ch 159, § 2; SL 2019, ch 130, § 1; SL 2023, ch 100, § 1.
32-6B-1.1. Motor home defined.
For the purposes of this chapter, the term, motor home, means a motor vehicle that is designed as an integral unit to be used as a conveyance upon the public highways and for use as a temporary or recreational dwelling and that has at least four of the following permanently installed systems:
(1) Cooking facilities;
(2) Ice box or mechanical refrigerator;
(3) Potable water supply including plumbing and a sink with faucet either self-contained or with connections for an external source, or both;
(4) Self-contained toilet connected to a plumbing system with connection for external water disposal;
(5) Heating or air conditioning system, or both, separate from the vehicle engine or the vehicle electrical system; or
(6) A one hundred ten--one hundred fifteen volt alternating current electrical system separate from the vehicle engine electrical system either with its own power supply or with a connection for an external source, or both, or a liquified petroleum system and supply.
Source: SL 2019, ch 130, § 2.
32-6B-1.2. Recreational park trailer defined.
For the purposes of this chapter, the term, recreational park trailer, means a vehicle that is primarily designed to provide temporary living quarters for recreational, camping, or seasonal use and that:
(1) Is built on a single chassis mounted on wheels;
(2) Has a gross trailer area not exceeding four hundred square feet in the setup mode;
(3) Is certified by the manufacturer as complying with American National Standards Institute Standard No. A119.5 in effect on January 1, 2008; and
(4) Has at least a seventeen digit identification number and the manufacturer has designated the vehicle as a recreational park model on the manufacturer statement of origin.
Source: SL 2019, ch 130, § 3.
32-6B-1.3. Temporary special events lot defined.
For the purposes of this chapter, the term, temporary special events lot, means a location other than the principal place of business, supplemental lot, or temporary supplemental lot where a licensed trailer dealer, a licensed used car dealer, or a licensed vehicle dealer selling only truck tractors, trailers, or motor homes, or any combination thereof, may conduct business for a period of time not to exceed ten consecutive days for a specific purpose such as fairs, auctions, shopping center sales, or tent sales. A temporary special events lot shall meet all local zoning and building codes for the type of business being conducted.
Source: SL 2019, ch 130, § 4.
32-6B-1.4. Temporary supplemental lot defined.
For the purposes of this chapter, the term, temporary supplemental lot, means a location other than the principal place of business or supplemental lot that is:
(1) Within the same county as the principal place of business;
(2) Within the corporate limits of a municipality that overlaps boundaries of an adjoining county;
(3) Within an adjoining county, if the adjoining county has no licensed vehicle dealer selling automobiles, pick-ups, or passenger vans and the lot is within a ten-mile radius of the principal place of business; or
(4) Within an adjoining county that has no like franchised licensed dealer.
A licensed vehicle dealer or a licensed used vehicle dealer may conduct business at such a lot for a period of time not to exceed ten consecutive days for a specific purpose such as fairs, vehicle shows, auctions, shopping center promotions, or tent sales. A temporary supplemental lot shall meet all local zoning and building codes for the type of business being conducted. If a licensed vehicle dealer establishes a temporary supplemental lot in a county with a licensed used vehicle dealer, a licensed used vehicle dealer in that county may establish a temporary supplemental lot in the county of the licensed vehicle dealer.
Source: SL 2019, ch 130, § 5.
32-6B-2. Principal place of business defined.
For purposes of this chapter, the term, principal place of business, means an enclosed commercial structure located within this state, easily accessible and open to the public at least twenty hours per week between the hours of 8:00 a.m. to 8:00 p.m., inclusive, with an improved display area immediately adjoining the building that is large enough to display five or more vehicles of the type the dealer is licensed to sell. It is the location at which the business of a vehicle dealer may be lawfully carried on in accordance with all applicable building codes, zoning, and other land use ordinances. Each licensed dealer shall maintain an enclosed permanent office on the location. Each office shall be adequately heated and lighted. The hours of operation of the office and an operating phone number shall be clearly posted at or near the main entrance to the office. Each location shall display an exterior sign that contains the name of the business and that is permanently affixed to the land or building. The exterior sign shall be clearly legible from the public right-of-way serving the location. It is the location where the books, records, and files necessary to conduct the business of the dealer are kept and maintained. In no event may rooms in a hotel, motel, apartment house, or any part of any single or multiple unit dwelling house be considered a principal place of business unless the entire ground floor of the facility is devoted principally to and occupied for commercial purposes. Any dealer licensed under this chapter shall maintain and continuously occupy a principal place of business. However, an emergency vehicle dealer is exempt from the requirement of having its principal place of business in South Dakota.
Source: SL 1986, ch 250, § 2; SL 1990, ch 239, § 1; SL 1998, ch 175, § 2; SL 2019, ch 130, § 6.
32-6B-3. Sale on consignment--Contract required--Form.
Any dealer or public auction may sell, or offer to sell, new or used vehicles on consignment. For the purposes of this chapter, consignment means the delivery of a vehicle by the owner into the possession of another without transfer of title for the purpose of sale or where there is any condition that the purchaser does not have an absolute obligation to pay for the vehicle or has a right to return the vehicle to the seller. Any dealer or public auction who sells, or offers to sell, South Dakota titled vehicles on consignment shall enter into a contract with the consignor. The department shall prescribe the form of the contract.
Source: SL 1986, ch 250, § 3; SL 1989, ch 257, § 110; SL 1997, ch 182, § 11; SL 2005, ch 163, § 3.
32-6B-3.1. Sale on consignment prohibited for vehicle without statement of origin.
No person may sell or offer to sell a motor vehicle, to which a manufacturer's statement of origin has not been transferred, on consignment.
Source: SL 1997, ch 182, § 12.
32-6B-3.2. Odometer reading required for consignment or auction--Violation a misdemeanor.
Before a South Dakota titled vehicle may be sold by a consignee or at a public auction pursuant to § 32-6B-3, the consignee or auctioneer shall have in possession an odometer reading certified by the owner of the motor vehicle and a South Dakota title for the motor vehicle. A violation of this section is a Class 2 misdemeanor.
Source: SL 1997, ch 182, § 13; SL 2015, ch 157, § 20.
32-6B-3.3. Consignment or auction of vehicle with lien--Written consent and release by lien holder.
A consignee or an auctioneer may not sell a motor vehicle that has a certificate of title with a lien on it for less than the full amount of the lien, without the advance written consent of the lien holder. A consignee or an auctioneer may not release the proceeds from the sale of a motor vehicle with a lien on the title until the lien holder signs a release of the lien. A violation of this section is a Class 2 misdemeanor.
Source: SL 1997, ch 182, § 14.
32-6B-3.4. Auction on consignment of older vehicle titled in another state.
Notwithstanding the provisions of subdivision 32-6B-5(4), any titled vehicle, including a vehicle owned by a vehicle dealer who has obtained a permit under the provisions of § 32-6B-5.4 but who is licensed in another state, except a motorcycle, that is not titled in South Dakota and is at least twenty years old may be sold at a public auction on consignment if the title of the vehicle is issued in the name of the seller. All other provisions of this chapter pertaining to consignment sales or public auctions need to be met.
Source: SL 1998, ch 177, § 1; SL 2011, ch 140, § 1; SL 2014, ch 145, § 3; SL 2019, ch 130, § 17.
32-6B-3.5. Auction on consignment of older motorcycle titled in another state.
Notwithstanding the provisions of subdivision 32-6B-5(4), any motorcycle, including a motorcycle owned by a dealer who has obtained a permit under the provisions of § 32-6B-5.4 but who is licensed in another state, that is not titled in South Dakota, and that is at least thirty years old, may be sold at a public auction on consignment if the title of the vehicle is issued in the name of the seller. All other provisions of this chapter pertaining to consignment sales or public auction need to be met.
Source: SL 1998, ch 177, § 2; SL 2011, ch 140, § 2; SL 2014, ch 145, § 4; SL 2019, ch 130, § 18.
32-6B-3.6. Sale of used motorcycles and off-road vehicles on consignment where dealer possesses state title or title from bordering state--Exception.
In addition to the consignment sales requirements provided in this chapter, any dealer or public auction may sell, or offer to sell, used motorcycles and used off-road vehicles as defined in § 32-3-1 on consignment if the dealer has in possession a South Dakota title for the vehicle or a state title for the vehicle from a bordering state. If the motorcycle or off-road vehicle owner's state does not issue titles for the consigned motorcycle or off-road vehicle, the owner must provide a current state registration and accompanying affidavit stating that their home state does not issue titles for the vehicle being consigned. A bill of sale, the registration, and affidavit of statement must be in the possession of the consignment selling dealer or public auction along with the proper consignment contract. The department shall prescribe the form of the contract.
Source: SL 2018, ch 184, § 1.
32-6B-4. License required--Violation as misdemeanor.
No person may engage in the business, either exclusively or in addition to any other occupation, of selling, offering to sell, or displaying new or used vehicles, without a license as provided in § 32-6B-12. A violation of this section is a Class 2 misdemeanor. Any subsequent violation that occurs within two years from any violation of this section is a Class 1 misdemeanor.
The term, offering to sell, as used in this section, does not mean traditional advertising. However, the term includes the physical presence in this state of a new or used vehicle offered for sale by a person not exempt pursuant to the provisions of § 32-6B-5. For an emergency vehicle dealer, as defined by § 32-6B-1, the term includes the submission of a bid proposal for the sale of a vehicle if the bid proposal is offered in response to a bid request originating in this state.
Source: SL 1986, ch 250, § 4; SL 1990, ch 240, § 1; SL 2000, ch 147, § 1; SL 2011, ch 141, § 1; SL 2014, ch 137, § 5.
32-6B-4.1. Brokering prohibited--Violation as misdemeanor.
No person may act as, offer to act as, or hold himself or herself out to be a broker. A violation of this section is a Class 2 misdemeanor.
Source: SL 2000, ch 147, § 2.
32-6B-5. Exemptions from licensing requirements.
The following persons are exempt from the licensing requirements of this chapter:
(1) Any employee of any person licensed as a vehicle dealer if engaged in the specific performance of the employee's duties;
(2) Any financial institution chartered or licensed in any other jurisdiction that acquires vehicles as an incident to the financial institution's regular business and sells the vehicles to dealers licensed under this chapter;
(3) Any nonprofit automobile club if selling automobiles twenty years old or older under the provisions of chapter 32-3;
(4) Any person acting as an auctioneer if auctioning South Dakota titled vehicles for a licensed dealer or a person who is exempt from the provisions of this chapter;
(5) Any person engaged in the business of manufacturing or converting new vehicles if selling the vehicles to a licensed dealer holding a franchise from the original manufacturer of the vehicle;
(6) Any person not engaged in the sale of vehicles as a business and is disposing of vehicles used solely for personal use if the vehicles were acquired and used in good faith and not for the purpose of avoiding the provisions of this chapter;
(7) Any person not engaged in the sale of vehicles as a business who operates fleets of vehicles and is disposing of vehicles used in the person's business if the same were acquired and used in good faith and not for the purpose of avoiding the provisions of this chapter;
(8) Any person who sells less than five vehicles in a twelve-month period, unless the person is licensed as a dealer in another state or holds himself or herself out as being in the business of selling vehicles. However, if the vehicles are travel trailers, any person who sells less than three travel trailers in a twelve-month period;
(9) Any public officer while performing the officer's official duties;
(10) Any receiver, trustee, personal representative, guardian, or other person appointed by or acting under the judgment or order of any court;
(11) Any regulated lenders as that term is defined in § 54-3-14, any insurance company authorized to do business in this state, or any financing institution as defined in and licensed pursuant to chapter 54-4 that acquires vehicles as an incident to its regular business;
(12) Any towing agency that acquires and sells a vehicle which has been towed at the request of a private landowner under the provision of chapter 32-36 or at the request of a law enforcement officer, if no vehicle is sold for an amount over one thousand two hundred dollars;
(13) Any vehicle rental and leasing company that sells its used vehicles to dealers licensed under this chapter; and
(14) Any South Dakota nonprofit corporation which gives a donated motor vehicle to a needy family or individual.
Source: SL 1986, ch 250, § 6; SL 1989, ch 262; SL 1990, ch 240, § 2; SL 1990, ch 241, § 1; SL 1993, ch 226, § 1; SL 1994, ch 246; SL 1997, ch 182, § 3; SL 1997, ch 183, §§ 1-4; SL 1998, ch 178, § 1; SL 2000, ch 148, § 1; SL 2001, ch 168, § 2; SL 2002, ch 151, § 1; SL 2004, ch 17, § 86; SL 2006, ch 160, § 2; SL 2008, ch 154, § 1; SL 2009, ch 153, § 1; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011; SL 2011, ch 140, § 3; SL 2014, ch 145, § 1; SL 2015, ch 163, § 1.
32-6B-5.2. Permit for dealer licensed in another state to sell motorcycles at event.
A person who is a licensed dealer in another state may sell motorcycles at an event without a license issued under this chapter if the person meets the provisions of this section. Before selling any motorcycle, the person shall register and purchase a permit from the department. Before the department may issue a permit, the person shall provide proof the person is a licensed dealer in another state and has no outstanding dealer violations. The permit may be issued if any new motorcycle make being sold is not franchised in this state. The permit may be issued if any used motorcycle make being sold is franchised in this state, is at least two model years old, and has at least two thousand five hundred miles on the odometer. The fee for the permit is five hundred dollars. However, if the permit is purchased before the start of the event, the fee for the permit is two hundred fifty dollars. The permit is valid for fifteen consecutive days. Any person found to be in violation of the provisions of this section shall be denied a permit for a period of fifteen months from the date of the violation.
Source: SL 2019, ch 130, § 7.
32-6B-5.3. Permit for dealer licensed in another state to sell trailers at event.
A person who is a licensed dealer in another state may sell trailers at an event without a license issued under this chapter if the person meets the provisions of this section. Before selling any trailer, the person shall register and purchase a permit from the department. Before the department may issue a permit, the person shall provide proof the person is a licensed dealer in another state and has no outstanding dealer violations. The permit may only be issued if the trailer make being sold is not franchised in this state unless the person obtains a written waiver from any similar franchise dealer in this state. The person shall present the waiver to the department at the time the person applies for the permit. The fee for the permit is five hundred dollars. However, if the permit is purchased before the start of the event, the fee for the permit is two hundred fifty dollars. The permit is valid for fifteen consecutive days. Regardless of whether or not there is a franchise in this state, any person may display a trailer at an event. Any person found to be in violation of the provisions of this section shall be denied a permit for a period of fifteen months from the date of the violation.
Source: SL 2019, ch 130, § 8.
32-6B-5.4. Permit for dealer licensed in another state to sell older vehicles and motorcycles on consignment at public auction.
A person who is a licensed dealer in another state may sell a vehicle that is at least twenty years old or a motorcycle that is at least thirty years old at a public auction on consignment without a license issued under this chapter if the person meets the provisions of this section. The vehicle or motorcycle shall have a title issued in the name of the dealer by any state other than this state. Before selling any vehicle or motorcycle, the person shall register and purchase a permit from the department. Before the department may issue a permit, the person shall provide proof the person is a licensed dealer in another state and has no outstanding dealer violations. The fee for the permit is five hundred dollars. However, if the permit is purchased before the start of the auction, the fee is two hundred fifty dollars. The permit is valid for fifteen consecutive days. Any person found to be in violation of the provisions of this section shall be denied a permit for a period of fifteen months from the date of the violation.
Source: SL 2019, ch 130, § 9.
32-6B-5.5. Permit for manufacturer to display trailers at event.
A person who is engaged in the business of manufacturing trailers may display any trailer at an event without a license issued under this chapter if the person meets the provisions of this section. Before displaying any trailer, the person shall register and purchase a permit from the department. The permit does not allow the sale of any trailer. The fee for the permit is five hundred dollars. However, if the permit is purchased before the start of the event, the fee is two hundred fifty dollars. The permit is valid for fifteen consecutive days. Any person found to be in violation of the provisions of this section shall be denied a permit for a period of fifteen months from the date of the violation.
Source: SL 2019, ch 130, § 10.
32-6B-5.6. Permit for manufacturer to display or demonstrate customized motor vehicle at event.
A person who is engaged in the business of manufacturing or customizing motor vehicles may display and offer limited demonstration of a person's customized motor vehicle at an event without a license issued under this chapter if the person meets the provisions of this section. Before displaying or demonstrating any motor vehicle, the person shall register and purchase a permit from the department. The permit does not allow the sale of any motor vehicle. The fee for the permit is five hundred dollars. However, if the permit is purchased before the start of the event, the fee is two hundred fifty dollars. The permit is valid for fifteen consecutive days. Any person found to be in violation of the provisions of this section shall be denied a permit for a period of fifteen months from the date of the violation. For the purposes of this section, the term, customized motor vehicle, means any motor vehicle that has been altered from the manufacturer's original design or has a body constructed of nonoriginal materials.
Source: SL 2019, ch 130, § 11.
32-6B-5.7. Permit for sponsor to display customized motorcycles at event.
A person who is sponsoring an event for displaying customized motorcycles built for the event may do so without a license issued under this chapter if the person meets the provisions of this section. Before displaying any such motorcycle, the person sponsoring the event shall register and purchase a permit from the department. The fee for the permit is five hundred dollars. However, if the permit is purchased before the start of the event, the fee is two hundred fifty dollars. The permit is valid for fifteen consecutive days. Any person found to be in violation of the provisions of this section shall be denied a permit for a period of fifteen months from the date of the violation. If any person wishes to display any customized motorcycle outside the sponsored event, the person shall register and purchase a permit as provided under § 32-6B-5.6.
Source: SL 2019, ch 130, § 12.
32-6B-6. Application required--Contents.
Any person selling vehicles pursuant to the requirements of this chapter shall file with the department, upon forms provided by the department, an application including the following:
(1) The name and address of the applicant;
(2) The name of the firm or copartnership, with the names and addresses of all members, if the applicant is a firm or copartnership;
(3) The name of the corporation or limited liability company, with the names and addresses of the principal officers or members, if the applicant is a corporation or limited liability company;
(4) The exact location of the place of business and, if owned by the applicant, when acquired. If the place of business is leased, a true copy of the lease shall accompany the application;
(5) A certification that the location provides an adequately equipped office and is not the residence of the applicant;
(6) A certification that the location affords sufficient space to adequately store all vehicles offered for sale;
(7) A certification that the location is the place where the applicant keeps and maintains books, records, and files necessary to conduct business, which shall be available at all reasonable hours to inspection by the department;
(8) A consent to allow periodic inspections of the dealership by the department;
(9) A certification that the business of a vehicle dealer is the principal business conducted at the location;
(10) A description of the principal place of business and any supplemental lots;
(11) A statement that the applicant is either franchised by a manufacturer of vehicles, in which case the name of each vehicle that the applicant is franchised to sell shall be included or is a used vehicle dealer;
(12) A list of financial references;
(13) A certification that neither the applicant, nor any other partner, member, officer, or financial supporter, has been convicted of a crime involving vehicle theft or fraud in the last five years;
(14) Such other information as the department may require;
(15) Verification as to the accuracy of the information provided by the applicant;
(16) A certificate that the applicant has obtained a public liability insurance policy of not less than three hundred thousand dollars; and
(17) For any emergency vehicle dealer whose principal place of business is not located in South Dakota, proof the dealer is a licensed dealer in another state and has no outstanding dealer violations.
Source: SL 1986, ch 250, § 7; SL 1990, ch 242, § 1; SL 1998, ch 175, § 3; SL 2014, ch 139, § 5.
32-6B-7. Bond required--Amount--Term--Continuation certificate--Notification of payment or cancellation--Additional bond.
Before any license is issued, the applicant shall deliver to the department a good and sufficient surety bond, executed by the applicant as principal and by a surety company qualified to do business in the state as surety. The bond shall be for an amount based upon the type of license applied for, as follows:
(1) Vehicle dealer's license--$25,000;
(2) Used vehicle dealer's license--$25,000;
(3) Motorcycle and off-road vehicle dealer's license--$5,000;
(4) Trailer dealer's license--$10,000 for trailers weighing more than three thousand pounds; or
(5) Emergency vehicle dealer's license--$10,000.
The bond shall be to the department and in favor of any customer who suffers any loss that may be occasioned by reason of the failure of title or by reason of any fraudulent misrepresentation or breaches of warranty as to freedom from liens. The bond shall be for the license period. A new bond or a proper continuation certificate shall be delivered to the department at the beginning of each license period. Any surety company that pays a claim against the bond of a licensee shall notify the department, in writing, that it has paid such a claim. Any surety company that cancels the bond of a licensee shall notify the department, in writing, of the cancellation, giving the reason for that cancellation. If a claim is made to the department against the bond, which claim is based upon a final judgment of a court of record of this state, the dealer shall execute an additional bond for the amount necessary to maintain the security at the original level.
Source: SL 1986, ch 250, § 8; SL 1989, ch 256, § 3; SL 1998, ch 175, § 4; SL 2004, ch 207, § 1; SL 2010, ch 156, § 2, eff. Mar. 9, 2010; SL 2016, ch 159, § 3.
32-6B-7.1. Pooling of assets to satisfy bond requirements--Right, title, and interest in state--Termination--Notice of payment of claim--Replenishment of pool.
Members of any incorporated automobile dealers association may join together for the limited purpose of forming a pool of assets to satisfy the bond requirements of § 32-6B-7. Each pool shall be deposited in escrow or trust with a South Dakota financial institution approved of by the department.
All right, title, and interest in a pool shall be in the state for the benefit of any customer of a participating dealer who suffers any loss caused by the dealer's failure to deliver title, or by fraudulent misrepresentation or by a breach of warranty as to freedom from liens. A pool shall remain the property of the state until the department releases the pool. A pool is not the property of any participating dealer and may not be canceled, assigned, revoked, disbursed, replaced, or allowed to terminate except with department approval. Until a pool has been terminated as provided in this section, no portion of the pool may be assigned for the benefit of creditors, attached, garnished, levied, or executed on, or subject to process issued from any court, except as provided for payment of claims pursuant to this section.
A pool shall continue from year to year and cover for each license period those dealers participating in the pool. The department shall be notified by the escrow agent or trustee of the dealers participating or continuing to participate in a pool prior to the beginning of each license period.
The participating dealers may determine to terminate a pool. Notice of the intent to terminate shall be given to the department at least sixty days prior to the end of a license period. Termination shall be effective four years from the end of the license period notice was received. The escrow agent or trustee, in accordance with this section, shall continue to pay moneys prior to termination to any customer of a participating dealer whose claims arose during any license period prior to notice.
The escrow agent or trustee will notify the department in writing when a claim has been paid from the pool. All claims must be based upon a final judgment of a court of record in this state.
A pool will be established when one hundred thousand dollars of liquid assets are deposited with the escrow agent or trustee. Anytime a pool's balance falls below ninety thousand dollars it shall be replenished by the participating dealers within thirty days. If a pool is not replenished within thirty days, those dealers participating in the pool will be subject to the revocation of their dealer license unless the dealer provides a bond as set forth in § 32-6B-7 within fifteen days. After the notice of termination of a pool is received, notwithstanding any provision to the contrary, any dealer participating in the pool during the license period notice is given is subject to the revocation of their dealer license if the pool's balance falls below ninety thousand dollars and is not replenished within thirty days.
The escrow agent or trustee shall have those powers necessary to pay any claim upon the presentation of a final judgment and order of execution of any court record in this state.
The department may adopt rules pursuant to chapter 1-26 to implement this section.
Source: SL 1989, ch 263.
32-6B-7.2. Increase in dealer bond amount--Implementation.
To implement any increase in the amount of a dealer bond, a dealer, upon renewal of a bond or upon annual renewal of a dealer license, whichever comes first, shall deliver to the department an original bond or a bond rider that is issued by the surety company showing the new bond amount.
Source: SL 2004, ch 207, § 5.
32-6B-8. Dealer in new vehicles to maintain repair shop.
If an applicant sells or offers to sell new vehicles, the principal place of business shall include a suitable repair shop with space to repair, service, maintain, and recondition one or more vehicles and shall be equipped with ample tools, parts, and accessories.
Source: SL 1986, ch 250, § 9.
32-6B-9. Dealer in new vehicles to give bond to cover warranty obligations--Amount--Exemption.
No application may be granted nor a license issued to an applicant for the purpose of selling new vehicles under this chapter until the applicant executes a bond with a corporate surety which has been authorized to do business in this state. The surety shall be in the amount of fifty thousand dollars, payable to the Department of Revenue for the use and benefit of any new vehicle purchaser to pay all damages and expenses that may be occasioned from the applicant's failure to fulfill warranty obligations. In no event may the liability of the surety in the aggregate exceed the amount of the bond. However, an applicant is exempt from this bond requirement if he has within the county a repair facility and qualified personnel for the purpose of fulfilling new vehicle warranties.
Source: SL 1986, ch 250, § 10; SL 2004, ch 17, § 87; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011.
32-6B-10. Manufacturer's contract or franchise prerequisite to license for dealer in new vehicles.
No dealer's license may be issued to a person who desires to sell or offer for sale new vehicles until the applicant furnishes written proof, satisfactory to the department, that the person has a bona fide contract or franchise in effect in this state with the manufacturer of the vehicle the person proposes to deal in. For the purposes of this section, written proof which does not adequately capture the intent of both the applicant and the manufacturer to be bound by the subject franchise or bona fide contract may be deemed insufficient by the department.
Source: SL 1986, ch 250, § 11; SL 2010, ch 156, § 3, eff. Mar. 9, 2010.
32-6B-11. Verification of application by department--Refusal to issue license.
The department shall, in the case of every application for initial licensure, verify the facts set forth in the application. The department may not issue a license to the applicant until it is satisfied that the facts set forth in the application are true. The department may refuse to issue a license upon any of the grounds stated in § 32-6B-41.
Source: SL 1986, ch 250, § 12.
32-6B-12. Classification of licenses--Issuance of license certificate.
Any dealer's license issued under this chapter shall be of the following classes:
(1) "Vehicle dealer's license," a license that permits the licensee to engage in the business of selling or exchanging new, or new and used, vehicles;
(2) "Used vehicle dealer's license," a license that permits the licensee to engage in the business of selling or exchanging used vehicles only;
(3) "Motorcycle and off-road vehicle dealer's license," a license that permits the licensee to engage in the business of selling or exchanging new or used motorcycles and new or used off-road vehicles only;
(4) "Trailer dealer's license," a license that permits the licensee to engage in the business of selling or exchanging trailers, semitrailers, recreational park trailers, or travel trailers only, new or used;
(5) "Emergency vehicle dealer's license," a license that permits the licensee to engage in the business of selling or exchanging new or used authorized emergency vehicles; or
(6) "Final stage manufacturer dealer's license," a license that permits the licensee to engage in the business of selling or exchanging a previously assembled new motor vehicle chassis cab that has been completed by the final stage manufacturer and to engage in the business of selling or exchanging used motor vehicles.
A license certificate identifying the class of dealership and containing a distinguishing identification number of licensee shall be issued by the department if the application is in compliance with the provisions of this chapter.
Source: SL 1986, ch 250, § 13; SL 1998, ch 175, § 5; SL 2008, ch 53, § 4; SL 2012, ch 165, § 2; SL 2016, ch 159, § 4.
32-6B-12.1. Low-speed vehicle retail sales.
Any person engaged in the retail sale of low-speed vehicles shall be licensed as a vehicle dealer or used vehicle dealer.
Source: SL 2008, ch 147, § 7.
32-6B-13. Fees for dealer's licenses--Disposition of fees.
Upon making initial application for a dealer's license, the applicant shall pay a fee to the department. The initial fee required for each type of dealer's license is as follows:
(1) Vehicle dealer's license--$300;
(2) Used vehicle dealer's license--$300;
(3) Motorcycle and off-road vehicle dealer's license--$250;
(4) Trailer dealer's license--$125;
(5) Emergency vehicle dealer's license--$300; or
(6) Final stage manufacturer dealer's license--$300.
All money collected pursuant to this section shall be deposited in the state motor vehicle fund.
Source: SL 1986, ch 250, § 14; SL 1998, ch 175, § 6; SL 2008, ch 155, § 1; SL 2012, ch 165, § 3; SL 2016, ch 159, § 5.
32-6B-14. Dealer license--Annual review--Renewal notice--Suspension or revocation--Promulgation of Rules.
The application for license and all applicable fees are due prior to the issuance of the initial license. Each license renewal shall be reviewed annually by the department. The department shall mail to the licensee at the last known address a renewal notice. If the licensee is registered on the electronic dealer system, the licensee shall receive the renewal notice by electronic means. The department shall establish by rules promulgated pursuant to chapter 1-26 the review date, if other than October first to December thirty-first, inclusive. If the licensee fails to return the renewal notice or to pay the applicable fees the department shall suspend or revoke the license pursuant to the provisions of §§ 32-6B-41.1 to 32-6B-41.6, inclusive.
Source: SL 1986, ch 250, § 15; SL 1987, ch 215, § 13; SL 1997, ch 182, § 4; SL 2013, ch 141, § 3; SL 2019, ch 130, § 15; SL 2020, ch 137, § 1.
32-6B-15. Renewal application--Fees.
A renewal application shall be submitted to the department annually, prior to the expiration of the old license. The applicant shall pay a fee based on the following schedule to the department:
(1) Vehicle dealer's license--$175;
(2) Used vehicle dealer's license--$175;
(3) Motorcycle and off-road vehicle dealer's license--$150;
(4) Trailer dealer's license--$100; or
(5) Emergency vehicle dealer's license--$175.
The renewal application shall contain the same information as required for the initial application in § 32-6B-6. Any application for renewal made after the expiration date shall be accompanied by a fee in the amount of the initial license fee as established in § 32-6B-13.
Source: SL 1986, ch 250, § 16; SL 1998, ch 175, § 7; SL 2008, ch 155, § 2; SL 2016, ch 159, § 6.
32-6B-16. Modification of license certificate--Display of license.
Any license certificate issued by the department may be modified by indorsement to show a change in the name of the licensee, provided the majority ownership interest of the license has not changed or the name of the person appearing as franchisee on the sales and service agreement has not changed. Modification of a license certificate to show a change as provided does not require initial licensure or reissuance of dealer license plates. Every person licensed as a vehicle dealer shall display his license in a conspicuous place at his principal place of business.
Source: SL 1986, ch 250, § 17.
32-6B-17. Separate licenses--Requirement.
If the applicant sets up a principal place of business in more than one county of this state, the applicant shall secure a separate license for each county. However, a vehicle dealer or used vehicle dealer who sells or displays a vehicle that is twenty model years or older or an emergency vehicle dealer is not required to secure a separate license for each county if the licensee has otherwise complied with this chapter, has notified the department of the display, and the display does not exceed fifteen consecutive days. No license for any additional county may be issued until the department is furnished with proof that the applicant has a principal place of business in the county and has otherwise complied with this chapter.
Source: SL 1986, ch 250, § 18; SL 1998, ch 175, § 8; SL 2016, ch 162, § 1; SL 2020, ch 138, § 1.
32-6B-18. Permission to change principal place of business within county.
If the licensee desires to move from the principal place of business occupied at the time the license was granted to a new location within the county, he shall secure written permission from the department to do so. The licensee is required to furnish proof to the department that the new location constitutes a principal place of business as defined in § 32-6B-2.
Source: SL 1986, ch 250, § 19.
32-6B-19. Supplemental licenses for supplemental lots within county--Exemptions.
Any person licensed under this chapter, who sells vehicles at locations other than the principal place of business, shall obtain a supplemental license for each auxiliary or supplemental lot not contiguous to the location for which the original license is issued. If the license is granted, the licensee may be permitted to use unimproved lots and premises for sale, storage, and display of vehicles. Supplemental lots and premises shall be located within the county of the principal place of business of the applicant and shall meet local zoning codes or ordinances. No supplemental license is required for display of vehicles within the corporate limits of a municipality if the vehicle dealer is licensed or if one or more licensed vehicle dealers wish to display their vehicles on a temporary supplemental lot as defined in § 32-6B-1.4.
Source: SL 1986, ch 250, § 20; SL 2007, ch 176, § 1; SL 2019, ch 130, § 19.
32-6B-20. Books, records, and files to be kept--Inspection.
Each dealer licensed under the provisions of this chapter, shall keep books, records, or files, in such form as prescribed or approved by the department, including the following:
(1) A record of the purchase, sale, or exchange, of any vehicle;
(2) A description of each vehicle purchased, sold, or exchanged, together with the name and address of the owner or other person from whom the vehicle was purchased or received and to whom it was sold or delivered. The description shall include the vehicle identification number, manufacturer's make and model, and odometer mileage; and
(3) A certificate of title from the previous owner of any vehicle not purchased from the manufacturer, from the time the vehicle is delivered to the dealer until it has been disposed of by the dealer.
The books and records and other papers and documents shall, at all times during business hours of the day, be subject to inspection by the secretary of revenue.
Source: SL 1986, ch 250, § 21; SL 1996, ch 196; SL 2005, ch 159, § 1; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011.
32-6B-20.1. Certificate kept at another dealership or at lending institution--Requirements--Notice.
A dealer is not required to keep a certificate of title for any vehicle with a manufacturer's weight of sixteen thousand pounds or greater if a copy of the front and back of the certificate of title which has been assigned to the dealer is kept at the location where the vehicle is being offered for sale and the original certificate of title for the vehicle is kept at another South Dakota dealership owned by the same dealer or kept by a lending institution.
Prior to keeping any certificate of title at another dealership or at a lending institution, the dealer shall notify the department in writing where the certificate of title is to be kept.
Source: SL 2005, ch 159, § 2.
32-6B-20.2. Offer to sell, sale, or exchange of vehicle without certificate of title allowed under specified circumstances.
A dealer may offer for sale, sell, or exchange a vehicle without a certificate of title if the dealer complies with the following applicable provisions:
(1) The dealer has a record of purchase, sale, or exchange of a vehicle to include the satisfaction of any outstanding liens or encumbrances and a secured power of attorney;
(2) If the vehicle is encumbered by a lien noted on the title, the dealer shows that payment has been tendered to the lienholder for the amount of the lien, except a lien that is the result of dealer inventory financing; or
(3) If the dealer is required by law to obtain title prior to offering the vehicle for sale and the dealer has applied for title through the electronic on-line title system and has submitted the documents to the department.
This section does not relieve a dealer from the provisions of § 32-3-7.
Source: SL 2005, ch 159, § 3.
32-6B-20.3. Agreement that dealer will satisfy lien by paying lienholder--Trade of vehicle or consignment agreement--Theft.
If a person trades in a vehicle to a dealer or enters into a consignment agreement with a dealer whereby the dealer will sell the vehicle and the vehicle has a lien noted on the title, the dealer and person may agree that the dealer shall satisfy the lien amount by paying the lienholder who is noted on the title. Failure to satisfy a lien pursuant to this section constitutes theft pursuant to chapter 22-30A. The degree of theft is determined by the amount of the unsatisfied lien. Multiple violations of this section occurring within any thirty-day period may be aggregated in amount to determine the degree of theft.
Source: SL 2005, ch 159, § 4.
32-6B-20.4. Time period to satisfy lien after receipt of funds--Offering vehicle for sale prior to tender to lienholder.
If a dealer enters into an agreement pursuant to § 32-6B-20.3, the dealer shall satisfy the lien within ten business days after the receipt of funds. No dealer may offer the vehicle for sale until payment has been tendered to the lienholder, except on a consigned vehicle, whereby the dealer shall comply with the terms of the consignment agreement.
Source: SL 2005, ch 159, § 5.
32-6B-21. Issuance of dealer plates--Numbering--Fees--Return of plates--Misdemeanor.
The department shall issue metal numerical license plates to licensed dealers upon application and payment of a one hundred one dollar yearly fee to be paid at the time of the annual review date for each set desired. The fees shall be distributed in the manner specified in §§ 32-11-2 and 32-11-4.1 to 32-11-9, inclusive. The license plates shall be numbered consecutively and shall bear as a prefix the number 77. The plates may be issued for a multiple year period. If a dealer's license is revoked or canceled or the dealer goes out of business the 77 plates shall be returned to the department. If any person operates a motor vehicle with 77 plates after the dealer license is revoked or canceled or after the dealer goes out of business, or if the person refuses to return the plates, the person is guilty of a Class 2 misdemeanor.
Source: SL 1986, ch 250, § 22; SL 1997, ch 182, § 5; SL 1999, ch 59, § 9; SL 2011, ch 139, § 6; SL 2011, ch 139, § 16, eff. July 1, 2013; SL 2015, ch 165, § 17, eff. Apr. 1, 2015.
32-6B-21.1. Mailing fees.
In addition to the license plate and decal fees assessed in §§ 32-6B-21, 32-6B-22.1, 32-6B-23, and 32-6B-36.3, the department shall collect from the dealer one dollar and fifty cents per decal or set of decals or seven dollars and fifty cents per license plate or set of plates if a decal or plate is sent to the dealer through the mail. If the dealer requests that the decal or plate be express mailed, the dealer must pay the actual costs of postage and handling.
Source: SL 2010, ch 157, § 1; SL 2023, ch 98, § 3, eff. Mar. 14, 2023.
32-6B-22. Use of dealer plates--Transfer of plates--Violation as misdemeanor.
Any new vehicle or used vehicle owned by a licensed dealer, bearing a dealer's 77 license plate issued pursuant to § 32-6B-21, may be driven on the streets and highways of this state for any purpose. However, the dealer 77 license plate may not be used on any vehicle used for lease or hire or used as a wrecker or service truck. The dealer 77 license plate is transferable by the dealer from one vehicle owned by the dealer to another vehicle owned by the dealer. A violation of this section is a Class 1 misdemeanor.
Source: SL 1986, ch 250, § 23; SL 1995, ch 176; SL 2019, ch 130, § 14.
32-6B-22.1. Commercial motor vehicles licensed to dealers--Dealer 88 license plates--Return of plates--Violation as misdemeanor.
The department shall issue metal numerical license plates to licensed vehicle dealers upon application and payment of the gross weight tonnage fees pursuant to § 32-9-15 at the time of annual renewal for each set desired. The license plates shall be numbered consecutively and shall bear as a prefix the number 88. If a dealer's license is revoked or canceled or the dealer goes out of business, the 88 plates shall be returned to the department. If any motor vehicle is operated with 88 plates after the dealer license is revoked or canceled or after the dealer goes out of business, or if the dealer refuses to return the plates, the dealer is guilty of a Class 2 misdemeanor.
Source: SL 2004, ch 208, § 1.
32-6B-22.2. Use of dealer 88 license plates--Transfer of plates.
Any vehicle owned by a licensed new or used vehicle dealer that is being used to transport any inventory replacement vehicle bearing an 88 license plate issued pursuant to § 32-6B-22.1 may be operated on the streets and highways of this state as a motor carrier if the provisions of this section are met. The dealer 88 license plate is transferable by the dealer from one vehicle owned by the dealer to another vehicle owned by the dealer. However, no dealer 88 license plate may be used on a vehicle for lease or hire, or on a wrecker or service truck.
Source: SL 2004, ch 208, § 2.
32-6B-23. Issuance of motorcycle dealer and trailer dealer plates--Numbering--Display and use--Fees.
The department shall issue to any motorcycle dealer and trailer dealer licensed pursuant to this chapter metal number plates bearing a prefix of the letter "D" and containing a distinguishing identification number of the licensee. The dealer shall make application to the department for the plates and pay a fee of twenty-four dollars for each plate. One license plate shall be displayed on the rear of any motorcycle, or trailer, semitrailer, or travel trailer, owned by the dealer while traveling on a public highway. Any vehicle owned by the licensed dealer and bearing the dealers' metal plate may be operated on the streets and highways of this state for any purpose, including demonstration by a prospective buyer. All money collected pursuant to this section shall be distributed in the manner specified in § 32-11-2 and §§ 32-11-4.1 to 32-11-9, inclusive.
Source: SL 1986, ch 250, § 24; SL 1996, ch 197, § 1; SL 2011, ch 139, § 7; SL 2011, ch 139, § 17, eff. July 1, 2013; SL 2015, ch 165, § 18, eff. Apr. 1, 2015.
32-6B-24. Repossession of dealer plates.
Any dealers' metal plates issued pursuant to § 32-6B-21 or 32-6B-23, remain the property of the state and may be repossessed by the state in the event of a violation of any of the provisions of this chapter.
Source: SL 1986, ch 250, § 25.
32-6B-25. Use of vehicles bearing dealer's demonstration or in-transit permits--Time limitation--Issuance of permits for unauthorized purposes prohibited--Violation as misdemeanor.
Any new or used vehicle owned by a licensed dealer, bearing dealers' demonstration or in-transit permits, may be driven upon the streets and highways of this state for demonstration or in-transit purposes and for travel to and from a service facility, such as a repair shop, detail shop, gas station, or car wash. Such vehicles may be driven upon the streets and highways for demonstration purposes by any prospective buyer for a period of three days. No dealer nor any dealer's representative may issue a dealers' demonstration or in-transit permit to any vehicle for any other purpose. A violation of this section is a Class 2 misdemeanor.
Source: SL 1986, ch 250, § 26; SL 1990, ch 243; SL 2006, ch 163, § 2.
32-6B-26. Temporary license permit--Provision by dealer.
In the case of a vehicle which is sold by a licensed dealer, the dealer may provide a temporary forty-five day license permit. The permit authorizes the operation of the vehicle upon the highways of this state for a period of forty-five days after the date of sale or until the time the purchaser receives his regular license plates from the county treasurer, whichever comes first.
Source: SL 1986, ch 250, § 27; SL 1990, ch 228, § 4; SL 2015, ch 156, § 12.
32-6B-27. Location of temporary license permit.
A temporary forty-five day license permit shall be affixed to the inside windows, to the front at the lower right-hand corner of the windshield, and to the rear on the lower left-hand corner of the rear window or to the lower rear portion of the left rear window. In the case of motorcycles or trailers, the permit shall be affixed in the manner provided for metal number plates.
Source: SL 1986, ch 250, § 28; SL 1990, ch 228, § 5; SL 2015, ch 156, § 13.
32-6B-28. Time for application for registration by owner--Inspection of documents by law enforcement officer.
The owner of a vehicle described in § 32-6B-26, shall within forty-five days after the date of purchase, apply to the county treasurer of the owner's county of residence for registration and shall possess a bill of sale, or duplicate thereof, or a properly assigned registration card, which is subject at all times to inspection by a law enforcement officer.
Source: SL 1986, ch 250, § 29; SL 1990, ch 228, § 6; SL 2015, ch 156, § 14.
32-6B-29. Restrictions on dealer use of temporary license permits--Renewal prohibited--Violation as misdemeanor.
No dealer may use the temporary license permits provided for pursuant to the provisions of § 32-6B-26, upon any vehicle owned by the dealer or for any purpose other than for vehicles sold by the dealer. No person may renew the temporary license permit. A violation of this section is a Class 1 misdemeanor.
Source: SL 1986, ch 250, § 30; SL 1990, ch 228, § 7; SL 2015, ch 156, § 15; SL 2015, ch 159, § 2.
32-6B-30. Design of dealers' demonstration, in-transit and temporary license permits--Information required--Source of permits.
The department shall prescribe, by rule, the size, color, material, and design of dealers' demonstration, in-transit, and temporary forty-five day license permits to be used by dealers licensed under this chapter. Every temporary forty-five day license permit, or dealers' demonstration, or in-transit permit, authorized by this chapter shall show the dealer's license number, which shall be of the dimensions prescribed by the department and shall have a space in which the dealer shall enter in ink the date upon which the vehicle was delivered to the purchaser and other information as the department considers necessary. Any dealer may obtain his required supply of dealers' demonstration or in-transit permits from his own source, but the permit shall conform to the requirements of the department.
Source: SL 1986, ch 250, § 31; SL 1990, ch 228, § 8; SL 2015, ch 156, § 16.
32-6B-34. Dealer's car auction agency--Defined--Applicability of chapter--Additional provisions.
For the purposes of §§ 32-6B-35 to 32-6B-37, inclusive, a dealer's car auction agency includes any person, firm, limited liability company, corporation, or association engaged in an auction, as defined by chapter 59-8, of vehicles. The sales shall involve only vehicles owned by dealers and sold to dealers. The provisions of this chapter apply to dealers' car auction agencies and the license issued is subject to the additional provisions set forth in §§ 32-6B-35 to 32-6B-37, inclusive.
Source: SL 1986, ch 250, § 35; SL 1994, ch 351, § 54.
32-6B-35. Dealer's car auction agency--Bond requirements--Dealer's right of action--Liability of surety.
Each auction agency shall, before conducting any auction sale, file with the department, a bond in the amount of fifty thousand dollars to the State of South Dakota, with a corporate surety authorized to do business in this state, and conditioned to pay all losses, damages, and expenses of any dealer which may be experienced by the failure of the title to or by any fraud, misrepresentation, or breaches of warranty as to freedom from liens of any vehicle which is sold by such agency. Each auction agency shall keep the bond in effect at all times, and any dealer damaged by the breach thereof shall have a right of action in his own name. The aggregate liability of the surety for all breaches of the conditions of the bond may not exceed the amount of such bond.
Source: SL 1986, ch 250, § 36.
32-6B-35.1. Dealer's car auction agency--Announcement at sale when title denotes any brand or damage--Return of vehicle.
If any motor vehicle has a title that has been marked by this state or another state or jurisdiction denoting any brand or damage and that motor vehicle is offered for sale by a dealer's car auction agency, the auction agency shall announce at the time of the sale that such brand or damage notation is listed on the title. If the auction agency fails to comply with this section, the purchaser of the motor vehicle may return the motor vehicle to the auction agency within ten days after receiving the title, and the auction agency shall make a full refund to the purchaser.
Source: SL 2004, ch 209, § 1.
32-6B-36. Dealer's car auction agency--Vehicles acceptable for sale--Permitted purchasers--Unauthorized sale a misdemeanor.
Any auction agency operating under the provisions of this chapter may accept for sale at its option vehicles which are owned by vehicle dealers regularly licensed in either this or some other state, or by the following entities if the vehicle is owned and titled by the entity and acquired incident to its regular business:
(1) Any regulated lender as defined in § 54-3-14 or any financing institution licensed pursuant to chapter 54-4;
(2) Any financial institution chartered or licensed in any other jurisdiction. However, such entity is not required to have a title in its name if the entity provides a title in the name of the customer and documentation as required by the department to substantiate a repossession transaction; or
(3) Any insurance company authorized to do business in either this state or some other state.
An auction agency may also accept from any manufacturer any vehicle that is owned by the manufacturer and that has a manufacturer's certificate of origin or a valid title. Any vehicle with a manufacturer's certificate of origin sold for a manufacturer may only be offered to the manufacturer's franchised dealers with the same line vehicle make.
Any vehicle dealer, regularly licensed by this or some other state, may purchase any vehicle from an auction agency, except as otherwise prohibited by this section. Any auction agency that accepts for sale any vehicle not authorized by this section is guilty of a Class 1 misdemeanor.
Source: SL 1986, ch 250, § 37; SL 1997, ch 184, § 1; SL 2001, ch 168, § 1; SL 2007, ch 177, § 1; SL 2015, ch 157, § 21.
32-6B-36.1. Dealer's car auction agency--Government-owned vehicles.
Notwithstanding §§ 32-6B-34 and 32-6B-36, any auction agency may accept for sale at its option vehicles which are owned by any governmental entity. Any member of the public may purchase those vehicles. The auction agency shall ensure that vehicles held and sold pursuant to this section are marked as separate and are physically separated from vehicles held and sold pursuant to §§ 32-6B-34 and 32-6B-36. Vehicles to be sold pursuant to this section shall be easily identifiable as being separate from vehicles to be sold pursuant to §§ 32-6B-34 and 32-6B-36. Upon request, the auction agency shall provide the department a site plan that shows the separation of vehicles to be sold pursuant to this section from vehicles to be sold pursuant to §§ 32-6B-34 and 32-6B-36.
Source: SL 1997, ch 185, § 1; SL 2021, ch 133, § 1.
32-6B-36.3. Issuance of auction agency plates--Numbering--Fees--Return of plates--Misdemeanor.
The department shall issue metal numerical license plates to an auction agency upon application and payment of a one hundred one dollar yearly fee to be paid at the time of the annual review date for each set desired. Such fees shall be distributed in the manner specified in §§ 32-11-2 and 32-11-4.1 to 32-11-9, inclusive. The license plates shall be numbered consecutively and shall bear as a prefix the number "99." The plates may be issued for a multiple year period. If an auction agency's license is revoked or canceled or the auction agency goes out of business, the "99" plates shall be returned to the department. If any person operates a motor vehicle with "99" plates after the auction agency's license is revoked or canceled or after the auction agency goes out of business, or if the person refuses to return the plates, the person is guilty of a Class 2 misdemeanor.
Source: SL 2002, ch 152, § 1; SL 2003, ch 167, § 1; SL 2011, ch 139, § 8; SL 2011, ch 139, § 18, eff. July 1, 2013; SL 2015, ch 165, § 19, eff. Apr. 1, 2015.
32-6B-36.4. Use of agency plates--Transfer of plates--Violation as misdemeanor.
Any vehicle being transported to or from the auction agency's place of business bearing a "99" license plate issued pursuant to § 32-6B-36.3 may be driven on the streets and highways of this state for the purpose of transporting a vehicle that will be sold or has been sold by the auction agency. The "99" license plate is transferable by the auction agency from one vehicle to another vehicle for transporting purposes. A violation of this section is a Class 2 misdemeanor.
Source: SL 2002, ch 152, § 2.
32-6B-37. Dealer's car auction agency--Records required.
Every auction agency shall keep such books, records, and files as prescribed by the department. A record shall be kept of every vehicle offered for sale by or through the agency, including the serial or identification numbers, odometer information, and a description of the vehicle and the name, address, and license number of the vehicle dealer who owns the vehicle. If the vehicle is sold, the name, address, and license number of the vehicle dealer purchasing the vehicle and the price for which it is sold shall be recorded and maintained.
Source: SL 1986, ch 250, § 38; SL 1991, ch 244.
32-6B-37.1. Public auction to keep records--Inspection by dealer appointed inspectors.
Every public auction shall keep such books, records, and files as prescribed by the department. A record shall be kept of every vehicle offered for sale by or through the public auction, including the serial or vehicle identification number and a description of the vehicle and the name and address of the motor vehicle owner. If the vehicle is sold, the name and address of the person purchasing the motor vehicle and the price for which it is sold shall be recorded and maintained. Dealer inspectors appointed pursuant to § 32-6B-38 may inspect the books, records, or files required by the department or this section.
Source: SL 1997, ch 182, § 15.
32-6B-38. Appointment of inspectors--Entry authorized--Complaints.
The department may appoint dealer inspectors to enforce the provisions of this chapter. The inspectors may enter both publicly owned and privately owned property and sign complaints against persons found in violation of this chapter.
Source: SL 1986, ch 250, § 39.
32-6B-39. Investigation of dealers--Authorized.
The department may investigate any dealer licensed under this chapter for the purpose of ascertaining any violation of this chapter or chapters 32-3 to 32-5, inclusive. The investigation shall include an inspection of the principal place of business, supplemental lots, and any books, records, or files required by the department. An examination of titles and vehicles owned or offered for sale by the dealer shall also be conducted.
Source: SL 1986, ch 250, § 40; SL 2005, ch 160, § 1.
32-6B-41. Grounds for denial of license or application of provisions of §§ 32-6B-41.1 to 32-6B-41.6, inclusive.
The department may deny any application or apply the provisions of §§ 32-6B-41.1 to 32-6B-41.6, inclusive, on any license issued under the provisions of this chapter, for any of the following:
(1) Commission of fraud or willful misrepresentation in the application for or in obtaining a license;
(2) Conviction of a felony involving vehicle theft or odometer fraud in the last five years;
(3) A violation of any law of this state which relates to dealing in vehicles;
(4) Failure to comply with any administrative rule promulgated by the department;
(5) Perpetration of a fraud upon any person as a result of dealing in vehicles;
(6) Failure to apply for transfers of title as required in chapter 32-3;
(7) Failure to allow department inspections, including initial and annual inspections, complaint investigations, and necessary follow-up inspections;
(8) Misrepresentation through false, deceptive, or misleading statements with regard to the sale or financing of vehicles which a dealer has, or causes to have, advertised, printed, displayed, published, distributed, broadcast, televised, or made in any manner with regard to the sale or financing of vehicles;
(9) Refusal to comply with a licensee's responsibility under the terms of the new vehicle warranty issued by its respective manufacturer, unless such refusal is at the direction of the manufacturer;
(10) Failure to comply with the terms of any bona fide written, executed agreement pursuant to the sale of a vehicle;
(11) Inability to obtain or renew surety bond or to participate in a dealer asset pool;
(12) Failure to maintain and continuously occupy a principal place of business; or
(13) Failure to obtain or renew a public liability insurance policy of not less than three hundred thousand dollars, if the dealer has been given thirty days written notice to comply.
Source: SL 1986, ch 250, § 42; SL 1989, ch 256, § 5; SL 1990, ch 239, § 3; SL 1990, ch 242, § 2; SL 1991, ch 245; SL 2005, ch 162, § 7.
32-6B-41.1. Cease and desist order for specified violations--Period of effectiveness.
In addition to any other remedy provided by law, the secretary of revenue may issue an order directing a vehicle dealer or public auction to cease and desist from engaging in any act or practice enumerated in § 32-6B-41. A cease and desist order issued pursuant to this section is effective for a period of two years.
Source: SL 2005, ch 162, § 1; SL 2008, ch 156, § 1; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011; SL 2020, ch 139, § 1.
32-6B-41.2. Cease and desist order--Request for hearing--Procedure.
Within twenty days after service of the order to cease and desist, the vehicle dealer or public auction may request a hearing in writing on the question of whether acts or practices in violation of this title have occurred. Any hearing shall be conducted pursuant to, and judicial review shall be available as provided by, chapter 1-26.
Source: SL 2005, ch 162, § 2; SL 2020, ch 139, § 2.
32-6B-41.3. Finality of cease and desist order.
A cease and desist order pursuant to § 32-6B-41.1 becomes final upon expiration of the time allowed for appeals from the secretary's order if no appeal is taken, or, if an appeal is taken, upon final decision of the court if the court affirms the secretary's order or dismisses the appeal.
Source: SL 2005, ch 162, § 3.
32-6B-41.4. Order to pay fine or suspend or revoke license upon failure to comply with cease and desist order--Deposit of monetary penalties.
If a dealer fails to comply with a cease and desist order issued pursuant to § 32-6B-41.1, the secretary may issue an order which:
(1) Imposes a monetary penalty on the dealer of five hundred dollars for each violation of the cease and desist order;
(2) Suspends dealer's license for not more than thirty days; or
(3) Revokes the dealer's license.
All monetary penalties collected pursuant to this section shall be deposited into the state motor vehicle fund.
Source: SL 2005, ch 162, § 4.
32-6B-41.5. Contest of order--Procedure.
A dealer or public auction may request a hearing to contest an order issued pursuant to § 32-6B-41.4 or 32-6B-41.7. The request shall be submitted to the secretary in writing within twenty days after service of the order. Any hearing shall be conducted pursuant to, and judicial review shall be available as provided by, chapter 1-26.
Source: SL 2005, ch 162, § 5; SL 2020, ch 139, § 4.
32-6B-41.6. Finality of order.
An order issued pursuant to § 32-6B-41.4 or 32-6B-41.7 becomes final upon expiration of the time allowed for appeals from the secretary's order, if no appeal is taken, or, if an appeal is taken, upon final decision of the court if the court affirms the secretary's order or dismisses the appeal.
Source: SL 2005, ch 162, § 6; SL 2020, ch 139, § 5.
32-6B-41.7 . Cease and desist order--Failure to comply--Penalty.
If a public auction fails to comply with a cease and desist order issued pursuant to § 32-6B-41.1 , the secretary may issue an order imposing a monetary penalty on the public auction of five hundred dollars for each subsequent violation of the cease and desist order. All monetary penalties collected pursuant to this section shall be deposited in the state motor vehicle fund.
Source: SL 2020, ch 139, § 3.
32-6B-42. Notification of surety of license denial, suspension or revocation.
The department shall upon denial, suspension, or revocation of any license, notify the surety company of the licensee, in writing, that the license has been denied, suspended, or revoked and shall state the reason for such denial, suspension, or revocation.
Source: SL 1986, ch 250, § 43.
32-6B-45. Good cause required for franchisor termination, cancellation, nonrenewal, or change in competitive circumstances.
No franchisor may, directly or through an officer, agent, or employee, terminate, cancel, fail to renew, or substantially change the competitive circumstances of a vehicle dealership agreement without good cause. For the purposes of this section, good cause means failure by a vehicle dealer to substantially comply with essential and reasonable requirements imposed upon the vehicle dealer by the vehicle dealership agreement, if the requirements are not different from those requirements imposed on other similarly situated vehicle dealers by their terms. In addition, good cause exists if:
(1) Without the consent of the vehicle manufacturer, the vehicle dealer has transferred an interest in the vehicle dealership, there has been a withdrawal from the dealership of an individual proprietor, partner, major shareholder, or the manager of the dealership, or there has been a substantial reduction in interest of a partner or major stockholder;
(2) The vehicle dealer has filed a voluntary petition in bankruptcy or has had an involuntary petition in bankruptcy filed against it which has not been discharged within thirty days after the filing, there has been a closeout or sale of a substantial part of the dealer's assets related to the vehicle business, or there has been a commencement of dissolution or liquidation of the dealer;
(3) There has been a change, without the prior written approval of the manufacturer, in the location of the dealer's principal place of business under the dealership agreement;
(4) The vehicle dealer has defaulted under a security agreement between the dealer and the vehicle manufacturer or there has been a revocation or discontinuance of a guarantee of the dealer's present or future obligations to the vehicle manufacturer;
(5) The vehicle dealer has failed to operate in the normal course of business for seven consecutive days or has otherwise abandoned the business;
(6) The vehicle dealer has pleaded guilty to or has been convicted of a felony affecting the relationship between the dealer and the manufacturer;
(7) The dealer has engaged in conduct which is injurious or detrimental to the dealer's customers or to the public welfare; or
(8) The vehicle dealer, after receiving notice from the manufacturer of its requirements for reasonable market penetration based on the manufacturer's experience in other comparable marketing areas, consistently fails to meet the manufacturer's market penetration requirements.
A vehicle manufacturer shall provide a vehicle dealer at least ninety days prior written notice of termination, cancellation, or nonrenewal of the dealership agreement. The notice shall state all reasons constituting good cause for the action and shall provide that the dealer has sixty days in which to cure any claimed deficiency. If the deficiency is rectified within sixty days, the notice is void. The notice and right to cure provisions under this section do not apply if the reason for termination, cancellation, or nonrenewal is for any reason set forth in subdivisions (1) to (7), inclusive.
Source: SL 1986, ch 250, § 46; SL 2010, ch 156, § 5, eff. Mar. 9, 2010.
32-6B-47. When franchisor may establish additional vehicle dealership for same line-make--Hearing.
No franchisor may enter into a franchise for the purpose of establishing an additional vehicle dealership in any community in which the same line-make is currently represented, unless the franchisor has first established in a hearing held under the provisions of chapter 1-26 that an additional dealership under such franchise is in the public interest.
Source: SL 1986, ch 250, § 48.
32-6B-48. Factors in determining cause for establishing additional franchise for same line-make.
In determining whether cause is established for entering into an additional franchise for the same line-make, the department shall consider the existing circumstances, including, but not limited to:
(1) The amount of business transacted by existing franchisees of the same line-make in that community;
(2) Whether the franchisees of the same line-make in that community are making a good faith effort to sell the franchisor's product;
(3) Investment necessarily made and obligations incurred by existing franchisees of the same line-make in the community in the performance of their part of their franchises;
(4) The effect on the retail vehicle business as a whole in that community;
(5) The general quality and reputation of existing franchisees in the community and their ability to provide consumer care and service; and
(6) Whether it is injurious to the public interest for an additional franchise to be established.
Source: SL 1986, ch 250, § 49.
32-6B-49. Factors which are not cause for termination or noncontinuance of franchise or for establishing additional franchise for same line-make.
The following circumstances are not cause for the termination or noncontinuance of a franchise, nor for entering into a franchise for the establishment of an additional dealership in a community for the same line-make:
(1) The change of executive management or ownership by the franchisee, unless the franchisor can show that the change would be detrimental to the representation or reputation of the franchisor's product;
(2) Refusal by the franchisee to purchase or accept delivery of any motor vehicles or vehicles, parts, accessories, or any other commodity or service not ordered by said franchisee;
(3) The sole fact that franchisor desires further penetration of the market;
(4) The fact that the franchisee owns, has an investment in, participates in the management of, or holds a franchise for the sale of another line-make of vehicle, or that the franchisee has established another line-make of vehicle in the same dealership facilities as those of the franchisor, if the franchisee maintains a reasonable line of credit for each line-make of vehicle; or
(5) Refusal by the dealer to participate in any advertising campaign or contest or purchase any promotional materials, display devices, or display decoration or materials which are at the expense of the dealer.
Source: SL 1986, ch 250, § 50; SL 1990, ch 244, § 1.
32-6B-49.1. Terms or conditions not allowed in franchise agreement.
No franchise agreement may include any term or condition in a franchise that:
(1) Requires the franchisee to waive trial by jury involving the franchisor;
(2) Specifies the jurisdictions, venues or tribunals in which disputes arising with respect to the franchise, lease or agreement shall or may not be submitted for resolution or otherwise prevents a franchisee from bringing an action in a particular forum otherwise available under the law;
(3) Requires that disputes between the franchisor and franchisee be submitted to arbitration or to any other binding alternate dispute resolution procedure. However, any franchise, lease or agreement may authorize the submission of a dispute to arbitration or to binding alternate dispute resolution if the franchisor and franchisee voluntarily agree to submit the dispute to arbitration or binding alternate dispute resolution at the time the dispute arises;
(4) Requires a franchisee to pay the attorney fees of a franchisor;
(5) Prohibits the holder of an existing franchise from being dualed with another franchisor's line that does not substantially affect the current franchisor or community;
(6) Prohibits the holder of an existing franchise from moving to another facility within the franchisee's community that is equal to or superior to the franchisee's former facility;
(7) Prohibits the holder of an existing franchise from making improvements to the franchisee's current facility within the franchisee's community; or
(8) Permits a franchisor or the franchisor's assignee to exercise a right of first refusal to acquire a franchisee's franchise or a franchisee's assets in connection with the sale by a franchisee of that franchisee's franchise or assets.
An existing franchisee shall give the franchisor prior written notice of the proposed dual arrangement, relocation, or improvement described in subdivisions (5), (6), and (7). The notice shall contain sufficient information for the franchisor to evaluate the proposal. Within sixty days of receiving said notice, the franchisor shall send a letter to the franchisee either approving or disapproving the proposal. If the franchisor does not notify the franchisee of its approval or denial of the dual arrangement, relocation, or improvement within the sixty-day period, the franchisee's proposal shall be deemed to have been approved. No franchisor may unreasonably withhold its approval. Denial of a proposed dual arrangement or facility improvement shall be supported by credible evidence that it will substantially affect in an adverse way the current franchisor or community. Denial of a proposed relocation shall be supported by credible evidence that the new location is not at least equal to the franchisee's former facility.
This section does not apply to agreements pertaining to the lease or sale of real property.
Source: SL 1990, ch 244, § 2; SL 1998, ch 179, § 1; SL 2002, ch 153, § 1; SL 2010, ch 156, § 7, eff. Mar. 9, 2010.
32-6B-50. Notice of intention to enter into additional franchise for same line-make.
If a franchisor seeks to enter into an additional franchise of the same line-make, the franchisor shall file a notice with the department of the franchisor's intention to enter into a franchise for additional representation of the same line-make.
Source: SL 1986, ch 250, § 51; SL 2010, ch 156, § 8, eff. Mar. 9, 2010.
32-6B-51. Copies of notice to be sent to franchisees and other interested persons.
Upon receiving a notice of intention seeking to establish an additional franchise of the same line-make in a particular community, a copy of the notice shall be sent within five days of receipt to all franchisees in the community who are engaged in the business of offering to sell or selling the same line-make. The department may also give a copy of the franchisor's notice to any other party which it considers interested persons.
Source: SL 1986, ch 250, § 52; SL 2010, ch 156, § 9, eff. Mar. 9, 2010.
32-6B-52. Objection to approval of notice--Time for filing written objection--Approval absent timely objection.
Any person who receives or is entitled to receive a copy of any notice provided for in § 32-6B-50, may object to the approval of the notice by filing a written objection to the department within fifteen days from the date the notice was received by such person. If no objection is filed within fifteen days from the date the notice was received by such person, the notice shall be approved.
Source: SL 1986, ch 250, § 53.
32-6B-53. Hearing on objection--Time and place--Notice--Continuance.
If a timely objection is filed, the department shall enter an order fixing the time, which shall be within thirty days of the date of such order, and place of a hearing on the objection and shall send by first class mail a copy of the order to the franchisor, franchisee, and any other persons entitled to receive a copy of the notice provided for in § 32-6B-50 or 32-6B-73. The department may, upon request, continue the date of hearing for a period of thirty days.
Source: SL 1986, ch 250, § 54; SL 2000, ch 150, § 7.
32-6B-54. Burden of proof at hearing.
Upon a hearing conducted under the provisions of chapter 1-26, the franchisor has the burden of proof to establish that cause exists to enter into a franchise establishing an additional dealership.
Source: SL 1986, ch 250, § 55; SL 2010, ch 156, § 10, eff. Mar. 9, 2010.
32-6B-55. Hearing upon change of circumstances.
If a franchisor is not permitted to enter into a franchise for the line-make in the community, no such franchise may thereafter be entered into for the sale of such vehicles in the community unless the franchisor thereafter establishes, in a subsequent hearing held under the provisions of chapter 1-26, that there has been a change of circumstances so that the community at that time can be reasonably expected to support such a dealership.
Source: SL 1986, ch 250, § 56; SL 2010, ch 156, § 11, eff. Mar. 9, 2010.
32-6B-56. Dealer's license not to be issued to franchisee absent compliance by franchisor.
If a franchisor enters into or attempts to enter into a franchise for an additional new vehicle dealership in a community where the same line-make is already represented, without first complying with the provisions of this chapter, no dealer's license may be issued to that franchisee or proposed franchisee to engage in the business of selling new vehicles, manufactured or distributed by that franchisor.
Source: SL 1986, ch 250, § 57; SL 2010, ch 156, § 12, eff. Mar. 9, 2010.
32-6B-56.1. Trailer franchisees not subject to certain provisions.
The provisions of §§ 32-6B-45 to 32-6B-56, inclusive, do not apply to any trailer franchisee dealing in trailers with a weight of three thousand pounds or less. This section may not be construed to exclude such a franchisee from the licensing and other requirements contained in this chapter.
Source: SL 2010, ch 156, § 4, eff. Mar. 9, 2010.
32-6B-57. Sale by franchisor to franchisee at lower price than that charged to other franchisee prohibited--Exceptions--Violation as misdemeanor--Damages.
It shall be unlawful for a franchisor to offer to sell or to sell any new vehicle to any franchisee at a lower actual price therefor than the actual price charged to any other franchisee for the same model vehicle similarly equipped or to utilize any device including, but not limited to, sales promotion plans or programs which result in such lesser actual price; provided, however, the provisions of this section shall not apply to sales to a franchisee for resale to any unit of government, federal, state, or local. Provided, further, the provisions of this section shall not apply to sales to a franchisee of any vehicle ultimately sold, donated, or used by said franchisee in a driver's education program. Provided, further, that the provisions of this section shall not apply so long as the franchisor offers to sell or sells new vehicles to all franchisees at the same price. Each and every person who violates this section shall be guilty of a Class 1 misdemeanor, and each and every person violating this section shall be liable thereby for all damages caused by such violation.
Source: SL 1986, ch 250, § 58.
32-6B-58. Franchisor, component manufacturer or manufacturer--Warranty agreement fulfillment--Process--Right to audit.
Every franchisor, component manufacturer, or manufacturer shall properly fulfill any warranty agreement and compensate, as set forth in § 32-6B-61, each of its vehicle dealers for labor and parts. The franchisor, component manufacturer, or manufacturer shall pay all claims made by a vehicle dealer for the labor and parts within thirty days following their approval. The franchisor, component manufacturer, or manufacturer shall either approve or disapprove the claim within thirty days after its receipt. If a claim is disapproved, the vehicle dealer who submitted the claim shall be notified in writing of the claim's disapproval within the thirty-day period. Any claim rejected for technical reasons may be put into proper form by the vehicle dealer. Any claim resubmitted by the vehicle dealer within thirty days after the receipt of the claim shall be considered to be approved and payment shall be made within thirty days. The franchisor, component manufacturer, or manufacturer has the right to audit any vehicle dealer claim for a period of one year after the claim is paid to the dealer and to charge back to the new vehicle dealer the amount of any unsubstantiated claim. If there is evidence of fraud by the vehicle dealer, the audit period is two years from the actual or constructive notice of facts constituting the alleged fraud.
Source: SL 1986, ch 250, § 59; SL 1990, ch 245, § 1; SL 1995, ch 177; SL 2005, ch 161, § 1; SL 2010, ch 156, § 13, eff. Mar. 9, 2010; SL 2023, ch 100, § 4.
32-6B-58.1. Franchisor, component manufacturer, or manufacturer--Separate warranty for an engine, transmission, or rear axle--Process--Right to audit.
A franchisor, component manufacturer, or manufacturer that provides a separate warranty for an engine, transmission, or rear axle installed in a commercial medium- and heavy-duty on-highway vehicle, as defined in 49 U.S.C. § 32901(a)(7) as of January 1, 2021, shall compensate any authorized repair facility that performs warranty work to repair or replace the engine, transmission or rear axle upon the same terms and conditions as provided in § 32-6B-61 for compensation of warranty work performed by a vehicle dealer. The franchisor, component manufacturer, or manufacturer shall pay all claims made by the facility for the labor and parts within thirty days following approval. The franchisor, component manufacturer, or manufacturer shall either approve or disapprove the claim within thirty days after receiving the claim. If a claim is disapproved, the facility that submitted the claim shall be notified in writing of the claim's disapproval within the thirty-day period. Any claim rejected for technical reasons may be put into proper form by the facility. Any claim resubmitted by the facility within thirty days after the receipt of the claim shall be considered to be approved and payment shall be made within thirty days. The franchisor, component manufacturer, or manufacturer has the right to audit any facility’s claim for a period of one year after the claim is paid to the facility and to charge back to the facility the amount of any unsubstantiated claim. If there is evidence of fraud by the facility, the audit period is two years from the actual or constructive notice of facts constituting the alleged fraud.
Source: SL 2021, ch 134, § 1; SL 2023, ch 100, § 5.
32-6B-58.2. Manufacturer or component manufacturer--Charge back--Prohibited in certain circumstances.
Except as provided in § 32-6B-58.3, a manufacturer or component manufacturer may not charge back to a vehicle dealer any warranty claim that has been paid and approved for any vehicle or any part, component, complete assembly, or subassembly for a vehicle if:
(1) The repair work was covered under the manufacturer’s or component manufacturer's warranty;
(2) The repair work corrected the defective condition that needed to be repaired;
(3) The vehicle dealer provided documentation of the parts repaired and the process used to make the repairs; and
(4) The vehicle dealer performed the repair in accordance with reasonable written requirements of the manufacturer or component manufacturer, if the vehicle dealer was notified of the requirements before the claim arose and if the requirements were in effect when the claim arose.
Source: SL 2023, ch 100, § 2.
32-6B-58.3. Manufacturer or component manufacturer--Charge back--Permitted in certain circumstances.
A manufacturer or component manufacturer may charge back a warranty claim if:
(1) The claim was false or fraudulent; or
(2) The repairs were not necessary to correct the defective condition under accepted standards of workmanship.
Source: SL 2023, ch 100, § 3.
32-6B-59. Right of department to apply for injunction against violation of chapter.
In addition to the remedies provided in this chapter, the department may make application to any circuit court of this state to grant a temporary or permanent injunction, or both, restraining any person from acting as a vehicle dealer under the terms of this chapter without being properly licensed hereunder, from violating or continuing to violate any of the provisions of this chapter or chapters 32-3, 32-5, or for failing or refusing to comply with the requirements of this chapter or chapters 32-3, 32-5, or any rules adopted thereunder. Such injunction shall be issued without bond. A single act in violation of the provisions of this chapter or of chapter 32-3 or 32-5, is sufficient to authorize the issuance of an injunction.
Source: SL 1986, ch 250, § 60.
32-6B-60. Adoption of rules.
The secretary of revenue may adopt rules pursuant to chapter 1-26 as may be necessary to ensure and obtain uniformity in the administration of this chapter. All local officials charged with the administration of the provisions of this chapter are governed in their official acts by the rules promulgated by the secretary.
Source: SL 1986, ch 250, § 61; SL 2004, ch 17, § 89; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011.
32-6B-61. Schedule of compensation for warranty work.
The schedule of compensation for warranty work shall include reasonable compensation for diagnostic work, as well as repair service, parts, and labor. Time allowances for diagnosis and performance of warranty work and service shall be adequate for the work to be performed. The hourly labor rate paid to the dealer for warranty services may not be less than the rate charged by the dealer for like service to nonwarranty customers for nonwarranty service. Reimbursement for parts used in the performance of warranty repair may not be less than the current retail rate customarily charged by the vehicle dealer for such parts. Each manufacturer or component manufacturer, in establishing a schedule of compensation for warranty work, shall rely on the vehicle dealer's written schedule of hourly labor rates and parts and may not obligate any vehicle dealer to engage in unduly burdensome documentation thereof, including, without limitation, obligating vehicle dealers to engage in transaction by transaction calculations.
Source: SL 1990, ch 245, § 2; SL 2010, ch 156, § 14, eff. Mar. 9, 2010; SL 2023, ch 100, § 6.
32-6B-62. Trailer dealers exempt from certain liability insurance requirements.
The provisions of subdivision 32-6B-6(16) and subdivision 32-6B-41(13) do not apply to a trailer dealer's license.
Source: SL 1991, ch 246; SL 2019, ch 130, § 16.
32-6B-63. Regulation of advertising.
The Department of Revenue may promulgate rules, pursuant to chapter 1-26, to regulate the advertising of vehicles offered for sale by vehicle dealers. The department may promulgate rules concerning the following:
(1) Price advertising;
(2) Availability of vehicles; and
(3) General advertising practices.
Source: SL 1991, ch 247, § 1; SL 2004, ch 17, § 90; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011.
32-6B-64. Advertising defined.
For the purposes of § 32-6B-63 the term, advertising, means any oral, written, or graphic statement which offers for sale a particular vehicle or vehicle parts and services or which indicates the availability of a vehicle or vehicle goods or services. The term includes any statement or representation made in a newspaper, periodical, pamphlet, circular, other publication, or on a radio or television; contained in any notice, handbill, sign, billboard, poster, bill, catalog, or letter; or printed on or contained in any tag or label which is attached to a vehicle.
Source: SL 1991, ch 247, § 2.
32-6B-66. In-transit permits for certain trailer manufacturer's trailers.
Any manufacturer of trailers located in the state and who has registered with the department as a manufacturer of trailers may use an in-transit permit to operate any of the manufacturer's trailers upon the streets and highways of this state for in-transit purposes and for travel to and from a service facility. A manufacturer may not issue an in-transit permit for a trailer for any other purpose. A violation of this section is a Class 1 misdemeanor.
Source: SL 1994, ch 247, § 1.
32-6B-67. Promulgation of rules for in-transit permits for trailer manufacturer's trailers.
The department shall prescribe, by rules promulgated pursuant to chapter 1-26, the size, color, material, and design of the trailer manufacturer in-transit permits as provided by § 32-6B-66. The department shall also provide, by rule, the process for registering trailer manufacturers pursuant to § 32-6B-66 and a registration fee of not more than fifty dollars.
Source: SL 1994, ch 247, § 2.
32-6B-69. Franchise agreement--Change of terms--Dealer rights.
No franchisor may modify a franchise during the terms of the franchise or upon its renewal if the modification would substantially and adversely affect the vehicle dealer's rights, obligations, investment, or return on investment without giving at least sixty days notice of the proposed modification to the vehicle dealer unless the change is required by law. Within the sixty-day period, the vehicle dealer may file an objection requesting a determination of whether good cause exists for permitting the proposed modification with the Department of Revenue and serve notice on the franchisor. The department shall promptly schedule a hearing to be held under the provisions of chapter 1-26 and decide the matter within ninety days from the date the protest is filed. Multiple protests pertaining to the same proposed modification shall be consolidated for hearing. No proposed modification may take effect with respect to the protesting vehicle dealer's franchise pending the determination of the matter. The written notice shall contain on the first page thereof a conspicuous statement which reads substantially as follows: "NOTICE TO DEALER: YOU MAY BE ENTITLED TO FILE A PROTEST WITH THE SOUTH DAKOTA DEPARTMENT OF REVENUE IN PIERRE, SOUTH DAKOTA, AND HAVE A HEARING IN WHICH YOU MAY PROTEST THE PROPOSED MODIFICATION OR REPLACEMENT OF YOUR FRANCHISE WITH A SUCCEEDING FRANCHISE UNDER THE TERMS OF SOUTH DAKOTA LAW IF YOU OPPOSE THIS ACTION."
This section does not apply to franchise agreements involving travel trailers or motor homes.
Source: SL 1998, ch 180, § 1; SL 2004, ch 17, § 92; SL 2005, ch 161, § 2; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011.
32-6B-69.1. Audit by franchisor--Limitation--Exception.
A franchisor may reasonably and periodically audit a franchisee to determine the validity of paid claims or chargebacks for customer or dealer incentives. An audit of incentive payments may apply only for a period of one year after the claims are paid to the dealer. The limitations of this section do not apply if the franchisor can prove fraud.
Source: SL 2002, ch 153, § 5; SL 2010, ch 156, § 15, eff. Mar. 9, 2010.
32-6B-70. License required for certain activities--Violation as misdemeanor--Additional violations as felony.
No sell-it-yourself lot operator may engage in the following business activities concerning any vehicle on a sell-it-yourself lot premises, unless licensed in accordance with the provisions of this chapter:
(1) Sell, offer to sell, or negotiate the sale of any vehicle;
(2) Buy, offer to buy, or negotiate the purchase of any vehicle;
(3) Make any comments about the appearance, condition, or reputation of any vehicle;
(4) Communicate the name, address, or phone number of the owner of any vehicle to a potential customer. However, the vehicle and ownership information can be provided to a potential customer by means of a sign or information sheet placed in or on the vehicle by its owner;
(5) Advertise any of the following:
(a) The price, mileage, or the condition of a vehicle; or
(b) The name or the telephone number of a vehicle's owner;
(6) Authorize the test drive of any vehicle;
(7) Take possession of the keys of a vehicle for any purpose; or
(8) Sell, offer to sell, or facilitate the sale of any financing package or warranty package for any vehicle on the sell-it-yourself lot.
A sell-it-yourself lot operator who engages in a business activity prohibited by this section without being licensed in accordance with chapter 32-6B is guilty of a Class 1 misdemeanor. A second or subsequent conviction for a violation by a sell-it-yourself lot operator who engages in a business activity prohibited by this section without being licensed in accordance with chapter 32-6B is guilty of a Class 6 felony.
Source: SL 1998, ch 181, § 1.
32-6B-71. Vehicle dealership--Death of owner--Succession of interest.
The owner of a vehicle dealership may appoint by trust, will, or any other valid written instrument a successor to the owner's dealership interest upon the owner's death or incapacity. Unless the franchisor has good cause to refuse to honor the succession, the successor may succeed to the ownership of the dealership under the existing franchise if:
(1) Within ninety days of the owner's death or incapacity, the successor gives written notice of the successor's intent to succeed to ownership of the dealership; and
(2) The successor agrees to be bound by all the terms and conditions of the franchise agreement with the prior owner.
Upon request, the successor shall promptly provide the franchisor evidence of the successorship appointment, as well as personal and financial information reasonably necessary to determine whether the succession should be honored by the franchisor.
Source: SL 1998, ch 182, § 1.
32-6B-72. Succession--Refusal to honor.
If a franchisor believes that good cause exists to refuse to honor the intended succession under § 32-6B-71, the franchisor shall serve the named successor written notice of refusal to honor the intended succession within sixty days of its receipt of the notice of intended succession, or within sixty days of receiving the information requested pursuant to § 32-6B-71, whichever is later. The notice shall contain specific grounds for the refusal to honor the succession.
If the notice of refusal to honor the intended succession is not timely served upon the intended successor, the successor may continue the franchise subject only to termination as otherwise permitted in this chapter.
In determining whether good cause exists for the refusal to honor the intended succession, the franchisor has the burden of proving that the intended successor is not a person of good moral character or does not meet the franchisor's existing and reasonable standards. Good cause for refusal to honor succession does not include the owner's dealership being dualed with another franchisor's line.
Source: SL 1998, ch 182, § 2.
32-6B-73. Notification of decision to transfer, assign, or sell franchise agreement or dealership--Notification as application for approval.
In order to transfer, assign, or sell a franchise agreement or controlling interest in the dealership to another person, a dealer shall notify the manufacturer or franchisor whose vehicles the dealer is franchised to sell of the dealer's decision to transfer, assign, or sell the dealership. The notification shall be by certified mail, return receipt requested, and is the application by the dealer for approval by the manufacturer or franchisor of the transfer.
Source: SL 2000, ch 150, § 1.
32-6B-74. Contents of notice.
The notice shall be in writing and shall include:
(1) The prospective transferee's name, address, financial qualifications, and business experience;
(2) A copy of pertinent agreements regarding the proposed transfer, assignment, or sale;
(3) Completed application forms and related information generally utilized by the manufacturer or franchisor in reviewing prospective dealers; and
(4) The prospective transferee's written agreement to comply with the terms of the franchise agreement to the extent that the franchise agreement is not in conflict with this chapter.
Source: SL 2000, ch 150, § 2.
32-6B-75. Manufacturer or franchisor to determine prospective transferee's qualification--Notice of decision--Statement of reasons for rejection.
Not later than the sixty days after receiving notice and application as provided by §§ 32-6B-73 to 32-6B-78, inclusive, the manufacturer or franchisor shall determine whether or not the dealer's prospective transferee is qualified and shall send a letter by certified mail, return receipt requested, informing the dealer of the approval of the prospective transferee or the unacceptability of the prospective transferee. If the prospective transferee is not acceptable, the manufacturer or franchisor shall include a statement setting forth the material reasons for the rejection. An application filed by a dealer as provided in §§ 32-6B-73 to 32-6B-78, inclusive, is approved unless rejected by the manufacturer or franchisor in the manner provided by §§ 32-6B-73 to 32-6B-78, inclusive.
Source: SL 2000, ch 150, § 3.
32-6B-76. Approval may not be unreasonably withheld.
Approval by a manufacturer or franchisor of an application filed under §§ 32-6B-73 to 32-6B-78, inclusive, may not be unreasonably withheld. It is unreasonable for a manufacturer or franchisor to reject a prospective transferee who otherwise meets the manufacturer's or franchisor's written, reasonable, and uniformly applied standards or qualifications, if any, relating to the prospective transferee's business experience and financial qualifications.
Source: SL 2000, ch 150, § 4; SL 2002, ch 153, § 2.
32-6B-77. Filing objection when application rejected.
A dealer whose application to transfer is rejected may file an objection as provided for in § 32-6B-53, or the dealer may file a civil proceeding to challenge the denial of the transfer. In an action brought under §§ 32-6B-73 to 32-6B-78, inclusive, the burden is on the manufacturer or franchisor to prove that the prospective transferee is not qualified. An objection filed under §§ 32-6B-73 to 32-6B-78, inclusive, is a contested case.
Source: SL 2000, ch 150, § 5; SL 2010, ch 156, § 16, eff. Mar. 9, 2010.
32-6B-78. Transferee's qualification as sole issue in objection.
The issue in an objection filed under §§ 32-6B-73 to 32-6B-78, inclusive, either with the department or in a separate civil proceeding, is whether or not the prospective transferee is qualified. The department, or a court in a separate civil proceeding, shall enter an order holding that the prospective transferee either is qualified or is not qualified. If the department's or a court's order is that the prospective transferee is qualified, the dealer's franchise agreement is amended to reflect the change in franchisee and the manufacturer or franchisor shall accept the transfer for all purposes. If the department's or a court's order is that the prospective transferee is not qualified, the department or a court may include specific reasons why the prospective transferee is not qualified and may include specific conditions under which the prospective transferee would be qualified. If the department's or a court's order that a prospective transferee is not qualified includes specific conditions under which the prospective transferee would be qualified, the department or a court may retain jurisdiction of the dispute for a time certain to allow the dealer and prospective transferee to meet the conditions set forth.
Source: SL 2000, ch 150, § 6; SL 2010, ch 156, § 18, eff. Mar. 9, 2010.
32-6B-79. Manufacturer defined.
In §§ 32-6B-79 to 32-6B-83, inclusive, the term, manufacturer, includes a representative or a person or entity who is directly or indirectly controlled by, or is under common control with, the manufacturer. For purposes of this section, a person or entity is controlled by a manufacturer if the manufacturer has the authority directly or indirectly, by law or by agreement of the parties, to direct or influence the management and policies of the person or entity. However, the term, manufacturer, does not include any person or entity who manufactures or assembles less than two hundred fifty motorcycles a year or who manufactures or assembles trailers.
Source: SL 2000, ch 151, § 1; SL 2002, ch 153, § 3; SL 2006, ch 164, § 1.
32-6B-80. Manufacturer or franchisor may not own or operate dealership--Exceptions.
Except as otherwise provided by §§ 32-6B-79 to 32-6B-83, inclusive, no manufacturer or franchisor may directly or indirectly:
(1) Own an interest in a vehicle dealer or dealership;
(2) Operate or control a vehicle dealer or dealership; or
(3) Act in the capacity of a vehicle dealer.
This section does not apply to a final stage manufacturer dealer.
Source: SL 2000, ch 151, § 2; SL 2012, ch 165, § 4.
32-6B-81. Manufacturer or franchisor may own or operate for limited period--Conditions.
A manufacturer or franchisor may own an interest in a franchised vehicle dealer, or otherwise control a dealership, for a period not to exceed twelve months from the date the manufacturer or franchisor acquires the dealership if:
(1) The person from whom the manufacturer or franchisor acquired the dealership was a franchised dealer; and
(2) The dealership is for sale by the manufacturer or franchisor at a reasonable price and on reasonable terms and conditions.
Source: SL 2000, ch 151, § 3.
32-6B-82. Exceptions for the purpose of broadening diversity of dealer body.
For the purpose of broadening the diversity of its dealer body and enhancing opportunities for qualified persons who are part of a group who have historically been underrepresented in its dealer body, or other qualified persons who lack the resources to purchase a dealership outright, but for no other purpose, a manufacturer or franchisor may temporarily own an interest in a dealership if the manufacturer's or franchisor's participation in the dealership is in a bona fide relationship with a franchised vehicle dealer who:
(1) Has made a significant investment in the dealership, subject to loss;
(2) Has an ownership interest in the dealership; and
(3) Operates the dealership under a plan to acquire full ownership of the dealership within a reasonable time and under reasonable terms and conditions.
Source: SL 2000, ch 151, § 4.
32-6B-83. Extension of time period in 32-6B-81--Application--Limit.
On a showing by a manufacturer or franchisor of good cause, the department may extend the time limit set forth in § 32-6B-81. No extension under this section may exceed twelve months. An application for an extension after the first extension is granted is subject to protest by a vehicle dealer of the same line-make whose dealership is located in the same county as, or within fifteen miles of, the dealership owned or controlled by the manufacturer or franchisor. The department may not grant more than two extensions.
Source: SL 2000, ch 151, § 5.
32-6B-85. Civil action for injunction and damages.
Notwithstanding the terms of any vehicle dealer agreement or waiver to the contrary, any vehicle dealer whose business or property is injured, or is about to be injured, by any violation of §§ 32-6B-45 to 32-6B-83, inclusive, may bring a civil action to enjoin any such violation, without having to prove irreparable injury, and to recover actual damages sustained, together with costs, disbursements, and reasonable attorney fees.
Source: SL 2010, ch 156, § 20, eff. Mar. 9, 2010.
32-6B-86. Applicability of SL 2010, ch 156 amendments.
The provisions of this chapter as amended on March 9, 2010 apply to each vehicle dealer in any written or oral vehicle dealership agreement existing between a dealer and a manufacturer or distributor on March 9, 2010 which has no expiration date and to any subsequent written or oral vehicle dealership agreement entered into, amended, or renewed between a vehicle dealer and a manufacturer or distributor.
Source: SL 2010, ch 156, § 19, eff. Mar. 9, 2010.
32-6B-87. Dealers permitted to lease space in common area of shopping mall for displaying new vehicles--Restrictions--Exception.
A vehicle dealer licensed in this state may lease space in the common area of a shopping mall for the display of new vehicles without a supplemental license if the shopping mall is located within the corporate limits of the municipality where the dealer maintains its principal place of business. A dealer may not display more than four vehicles in a single shopping mall, contract for an exclusive right to lease all common areas of the shopping mall available for vehicle display, or negotiate the sale of any vehicle on the premises of the shopping mall. The lease shall be in writing. The dealer shall maintain a copy of the lease for a period of one year from the date of expiration of the lease and allow a representative of the department to examine the lease at the dealer's principle place of business during regular business hours. For purposes of this section, a shopping mall is any building or series of interconnected buildings containing a minimum of two hundred thousand square feet of leasable space for occupancy by a variety of retail stores and restaurants which is located in a municipality with a population that exceeds thirteen thousand. The provisions of this section do not apply to a licensed dealer with a principal place of business located on the premises of the shopping mall.
Source: SL 2018, ch 187, § 1.
32-6B-88. Off-road vehicle dealers exempt from certain special event permit requirements, fees, and taxes.
Notwithstanding any other provisions of this chapter, an off-road vehicle dealer is not required to purchase a permit or license to attend any two-day temporary special event location in the county or adjoining the county the dealer is located in. Any fees or taxes imposed by this title do not apply to any off-road vehicle dealer attending any two-day temporary special event location pursuant to this section.
Source: SL 2018, ch 188, § 1.
32-6B-89. Licensed dealer permitted to take vehicle to adjoining county for demonstration.
A licensed dealer may take a vehicle to an adjoining county for demonstration purposes. For the purpose of this section, a demonstration is for the purpose of showing the qualities and characteristics common to vehicles of the same or similar models or types in parades.
Source: SL 2019, ch 130, § 13.
