Alabama Administrative Code Chapter 810-5-12 — Dealer License

810 Alabama Department of Revenue

Ala. Admin. Code r. 810-5-12.-01 Application For Master Dealer License

(1) A master dealer license, as required pursuant to§40-12-391, Code of Ala. 1975, entitles a new motor vehicle dealer to operate as a new motor vehicle dealer, used motor vehicle dealer, motor vehicle wholesaler, and motor vehicle rebuilder. A master dealer license, as required pursuant to§40-12-391, Code of Ala. 1975, entitles a used motor vehicle dealer to operate as used motor vehicle dealer, motor vehicle wholesale, and motor vehicle rebuilder. All applications for a master dealer license must be filed electronically.

(a) The application must include, but not be limited to the following information:

1. Legal name of business and trade name or DBA (if applicable) and mailing address.

2. Physical address(es) of business and telephone number(s).

3. Form of organization.

(i) Individual

(ii) Partnership

(iii) Limited Liability Company (LLC)

(iv) Limited Liability Partnership (LLP)

(v) Corporation

4. Federal Employer Identification Number (FEIN) – not required for individual owners.

5. Type(s) of dealership(s) that will be operated pursuant to the master dealer license as follows:

(i) New motor vehicle dealer, as defined in §40-12-390, Code of Ala. 1975. Applicants who will be operating a new motor vehicle dealership must also provide the name(s) of manufacturer(s) or distributor(s), and line(s) that applicant is authorized to represent.

(ii) Used motor vehicle dealer, as defined in§40-12-390, Code of Ala. 1975.

6. State sales tax number.

7. Number of motor vehicles sold during the previous calendar year.

8. Name, resident home address, home telephone number, driver license number or non-driver identification card number, and state of issuance and social security number for allowner(s), partners, members, officers and directors.

9. Email address of the person completing the application. (The notice of license issuance or notice or request for additional information will be sent to this email address.)

10. Any supplemental locations as defined in§40-12-395, Code of Ala. 1975.

(b) The applicant must pay the one hundred and twenty-five-dollar ($125) application fee(s) as determined under§40-12-392, Code of Ala. 1975.

(c) A five-dollar ($5) fee must be remitted for each supplemental location as provided for in §40-12-395, Code of Ala. 1975.

(d) The applicant must provide the following documents in order to complete the application:

1. Properly executed surety bond explained in rule 810-5-12-.02 Motor Vehicle Surety Bond.

2. Evidence of blanket motor vehicle liability insurance coverage explained in rule 810-5-12-.05 Evidence ofBlanket Liability Insurance Coverage for Licensed Motor VehicleDealers.

3. A copy of the driver license or non-driver identification card for all owner(s), partners, members,officers and directors.

4. A photograph of the motor vehicle dealership and principal sign displayed and situated on the dealer's permanent location or locations, as defined in §40-12-392, Code of Ala.1975, apprising the public that a motor vehicle sales business is being conducted at the location. Any motor vehicle dealer having more than one (1) location shall submit a photograph foreach location. The photograph shall be of such visual quality and size that a reasonable viewer of the photograph could discern all lettering appearing on the sign or signs. Note: Photograph shall only be required for the initial license application and shall not be required for renewals unless the sign or location has been modified or changed.

(e) The sign must meet the following requirements:

(i) Include the name under which the applicant is licensed.

(ii) Clearly identifies the applicant's location as being the place of business of a motor vehicle dealer. For a new motor vehicle dealer, a sign containing the trade name of the product(s) it sells is sufficient.

Note: The letters identifying the type of seller cannot be less than six (6) inches high.

(iii) Be a sufficient size to be legible from the street fronting the display area, or from a distance to fifty yards, whichever is greater, so as to apprise a reasonable consumer that a retail motor vehicle sales business is being conducted at said location.

(iv) Be erected at the location stated on the license application.

Note: The sign may be either free standing, a permanent structure, or attached to the face of a building.

(f) To establish a permanent location as provided in§40-12-390, Code of Ala. 1975, an applicant must demonstrate to the department the satisfaction of at least three (3) of the following:

1. If the applicant is an individual, that his or her driver's license or non-driver identification card is issued by Alabama.

2. If the applicant is a corporation, partnership,LLC, or LLP that it is incorporated in Alabama or registered to conduct business in Alabama as a foreign corporation. Proof of incorporation or registration with the Alabama Secretary ofState must be provided.

3. If the applicant is a corporation, that the principal owner is a resident of Alabama.

4. The applicant has filed an Alabama income tax return for the previous tax year.

5. The applicant has paid real estate or personal property taxes to Alabama in its name.

6. The applicant receives utility bills in Alabama In its name.

7. The applicant has an Alabama certificate of title or motor vehicle registration.

8. The applicant has a lease agreement/mortgage statement for the address reflected on the application.

9. Other factors that clearly evidence the applicant's legal residence in Alabama.

(g) A permanent location does not include the following:

1. A shared or common space with other tenants.

2. Space rented by the hour or day.

3. Cubicles.

4. Temporary, virtual, or rotating office spaces.

5. More than one (1) dealer under the same roof.

(h) Each location must adhere to the following requirements:

1. Be properly zoned for business.

2. Have posted operating days/hours.

3. Have an area designated as display space for the dealer's inventory.

(i) Upon review of the information provided in theapplication and accompanying documents, the department will issue the appropriate license(s) with a unique license number and notify the applicant of the issuance and provide a method for the licensee to electronically print the license. The Department will also notify the applicant if additional information is required or if the application is refused.Additional information may include any documentation deemed necessary by the department to verify any of the information provided in the application and accompanying documents.

(j) Licenses must be renewed on October 1 each year and thirty (30) days of grace shall be allowed without penalty. After thirty 30 days, a penalty of fifteen percent (15%) of the license amount as provided in §40-12-392(b), Code of Ala. 1975, shall be applied.

History

• Author: Lisa Blankenship, Mike Gamble
• Authority: Code of Ala. 1975, §§40-2A-7(a)(5), 40-12-390, 40-12-391, 40-12-392, 40-12-395, 40-12-398. Rules 810-5-12-.05 and 810-5-12
• New Rule: Filed June 27, 2012; effective August 1, 2012. Amended: Filed October 27, 2014; effective December 1, 2014. Amended: Filed November 30, 2015; effective

Ala. Admin. Code r. 810-5-12.-02 Motor Vehicle Surety Bond

(1) Sections 40-12-398, 40-12-414, 40-12-448, and 32-8-34, Code of Ala. 1975, require motor vehicle dealers, automotive dismantler and parts recyclers, licensed wholesale auctions, designated agents, and title service providers to execute and deliver to the department a continuing surety bond. The surety bond must be executed by a surety company authorized to do business in Alabama. The amount of the surety bond is fifty thousand dollars ($50,000).

(2) The properly completed surety bond includes, but is not limited to the following information:

(a) Legal name of business and trade name or DBA (if applicable) and mailing address.

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

(c) Name(s) and signature(s) of representative(s) of business authorized to execute surety bond on behalf of the business.

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

(e) The effective date.

(f) The issue date of the bond.

(g) The signature of an agent of the surety company.

(h) A telephone number for the surety company.

(3) The following requirements must be met in order for the bond to be accepted by the department:

(a) The bond must be in its original form and not altered or recreated.

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

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

(d) The bond must be signed by the applicant.

(e) The bond must be payable to the Alabama Department of Revenue.

(f) In lieu of handprinted names and signatures, an electronic signature is acceptable if authorized by the department. An electronic signature is an electronic sound, symbol, or process attached to or logically associated with a document and executed or adopted by a person with the intent to sign the document.

(4) The coverage period begins on the issuance date of the applicable license. The department must be notified of any change in the status of the bond.

(5) If a notice of cancellation is received from the surety company and a new bond is not provided prior to the date of cancellation, the license and/or designated agent status will be revoked immediately, and the licensee or designated agent must submit a new surety bond to be reinstated.

(6) Claimant Procedures for Making a Bond Claim. The following procedures must be followed for making a bond claim with the department:

(a) A claimant must first secure a final judgment from a court of competent jurisdiction.

(b) A claimant must exhaust all available remedies in attempting to collect the judgment, prior to making a bond claim with the department.

(c) A claimant must submit the following items to the department:

1. A complaint relating to the violation of the conditions of a contract made in connection with the sale or exchange of a motor vehicle; or the violation of any provision of law relating to the conduct of the business of a motor vehicle dealer, automotive dismantler and parts recycler, wholesale auction, designated agent, or title service provider.

2. A final judgment relating to the complaint in subparagraph (a) above. The certificate or any documents must be signed by the judge.

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

(d) Upon receipt of the required documents, the department will determine if the motor vehicle dealer, automotive dismantler and parts recycler, wholesale auction, designated agent, or title service provider has violated the provisions of Title 40, Chapter 12, Article 8, 9, or 10 or Title 32, Chapter 8.

(e) If additional information is required, the claimant will be contacted.

(7) Filing of Bond Claim with Surety Company. If determined that a violation has occurred, the department shall file a claim with the surety company of record. The maximum amount of the claim filed cannot exceed the value of the bond.

(a) Upon receipt of the claim, the surety company has thirty (30) days to remit the payment or request an extension to further investigate the claim.

(b) The surety company may request additional information from the claimant to substantiate the claim.

(c) Upon determination that the claim is valid, the surety company must remit payment to the department.

(d) Upon receipt of payment from the surety company, the department will remit payment to the claimant.

(e) If the surety company fails to respond by the deadline, the claim will be forwarded to the department’s legal division for further action.

(8) The total amount of all bond claims made against a single bond must not exceed $50,000. Once the bond claim limit of $50,000 has been reached, no further claims will be allowed against the bond.

(9) Pursuant to §40-12-398, Code of Ala. 1975, a tax liability incurred under Chapter 23 of Title 40 for the sale of a motor vehicle may also be assessed against the bond. Such assessment must only be made when the tax liability under Chapter 23 of Title 40 is no longer subject to appeal.

History

• Author: Don Clemons, Mike Gamble, Tammy Fuller
• Authority: Code of Ala. 1975, §§40-2A-7(a)(5), 40-12-392, 40-12-398, 40-12-448.
• New Rule: Filed July 30, 2012; effective September 3, 2012. Amended: Filed October 27, 2014; effective December 1, 2014. Amended: Filed October 20, 2017; effective December 4, 2017. Amended: Published July 31, 2020; effective September 14, 2020.

Ala. Admin. Code r. 810-5-12.-03 Application For Off-Site Sales Event

(1) Off-Site Sales Event License

(a) A licensed motor vehicle dealer must electronically apply for an off-site sales event license, asdefined in §40-12-395, Code of Ala 1975, at least ten (10)calendar days prior to conducting the off-site sale. Dealers maynot participate in more than 3 off-site sales events per licenseyear. The following information must be included on theapplication:

1. Off-site sales event location address.

2. Beginning and ending dates of the off-site salesevent.

*Note: The duration of the event cannot exceed 10 consecutivedays.

(b) Pursuant to §40-12-395, Code of Ala. 1975, atwenty-five-dollar application fee is required to be paid by theapplicant.

(c) Upon reviewal of the application, the departmentwill either approve and issue an off-site sales event licenseand provide notification to applicant of the issuance or notifythe applicant of additional information required.

(2) Facilitator License

(a) In accordance with §40-12-390, Code of Ala. 1975,a facilitator is any person, or his or her designee, whofacilitates an off-site sale licensed under §40-12-395, Code of Ala.1975. The term may include the owner of the property wherethe off-site sale is being conducted.

(b) A facilitator of an off-site sale must electronically apply for a master off-site sales license, asdefined in §40-12-395, Code of Ala 1975, at least ten (10)calendar days prior to conducting the off-site sale. Each motorvehicle dealer participating in the off-site sale must obtain anoff-site license required in section (1) and provide the licenseto the facilitator prior to the facilitator making theapplication. If the dealer and facilitator are the same entity,only the master off-site sales event license is required. Thefollowing information must be included on the application:

1. Legal name of business, trade name, or DBA (ifapplicable).

2. Mailing and physical address(es) of business.

3. Off-site sales event location address.

4. Each participating dealer and their off-site salelicense number.

5. Beginning and ending dates of off-site salesevent.

*Note: The duration of the event cannot exceed 10 consecutivedays.

(c) Pursuant to §40-12-395, Code of Ala. 1975, atwenty-five-dollar application fee is required to be paid by theapplicant.

(d) Upon review of the application, the departmentwill either approve and issue an off-site sales event licenseand provide notification to applicant of the issuance or notifythe applicant of additional information required or if the application is refused.

(e) The facilitator must display a temporary sign atthe location where the off-site sale is conducted identifyingthe name of the facilitator, as stated on the license, conducting the sale and the name of the motor vehicle dealerswho are participating in the sale.

(3) A facilitator or motor vehicle dealer whowillfully fails to obtain an off-site license or failure of afacilitator to disclose participating motor vehicle dealers issubject to the penalty provisions provided in §§40-12-392 and40-12-395, Code of Ala. 1975.

History

• Author: Lisa Blankenship
• Authority: Code of Ala. 1975, §§40-2A-7(a)(5), 40-12-392, 40-12-395.
• New Rule: Filed July 30, 2012; effective September 3, 2012. Amended: Filed October 27, 2014; effective December 1, 2014. Amended: Filed October 20, 2017; effective December 4, 2017. Repealed and New Rule: Published July 31, 2020; effective September 14, 2020.

Ala. Admin. Code r. 810-5-12.-04 Revocation Of License

(1) The department may revoke the license of anymotor vehicle dealer, automotive dismantler and parts recycler,or motor vehicle wholesale auction for the willful andintentional failure of the licensee to comply with theapplicable provisions under §§40-12-396, 40-12-416 and40-12-449, Code of Ala. 1975.

(2) A Notice of Statutory Non-Compliance shall beprovided by the department to the licensee detailing the area orareas of alleged non-compliance. A response must be submitted tothe department within ten (10) calendar days from the date ofthe notice either refuting the alleged non-compliance ordetailing the action taken to correct the area or areas ofnon-compliance.

(3) Failure to satisfactorily respond to thedepartment will result in the issuance of a revocation noticeadvising that the license will be revoked. A licensee may beaccessed penalties for willful failure to comply as provided in§§40-12-29 and 40-12-450, Code of Ala. 1975. If the licensee isa designated agent and the license is revoked, the licensee’sdesignated agent status will also be revoked.

(4) The revocation notice will include the right toappeal the department's intended action pursuant to §40-2A-8,Code of Ala. 1975.

History

• Author: Lisa Blankenship
• Authority: Code of Ala. 1975, §§40-2A-7(a)(5), 40-2A-8, 40-12-29, 40-12-396, 40-12-416, 40-12-449, 40-12-450.
• New Rule: Filed September 7, 2012; effective October 12, 2012. Repealed New Rule: Published September 30, 2020; effective November 14, 2020.

Ala. Admin. Code r. 810-5-12.-05 Evidence Of Blanket Liability Insurance Coverage For Licensed Motor Vehicle Dealers

(1) Section 40-12-392, Code of Ala. 1975, requireslicensed motor vehicle dealers to maintain blanket motor vehicleliability insurance coverage The required insurance coveragemust be issued in the legal name of an applicant for a motorvehicle master dealer license and evidence of this insurancecoverage must be submitted with an application for a motorvehicle master dealer license.

(2) Each applicant for a motor vehicle master dealer license must provide the following information:

(a) Evidence that the insurance policy is in thelegal name of the business identified on the licenseapplication.

(b) The name, address and NAIC (National Associationof Insurance Commissioners) number of the insurance companyproviding the coverage for the license year.

(c) The policy number of the insurance companyproviding the coverage for the license year.

(d) Certification that applicant’s insurance will bein effect in the form of a blanket motor vehicle liabilityinsurance policy or commercial automobile liability insurancepolicy, covering all vehicles held in inventory by the licensee,whether located at a licensed location of the licensee, oroperated on any public street or highway within the State ofAlabama.

(e) Evidence that the coverage amounts are no lessthan the minimum amounts set for bodily injury or death and fordestruction of property under §32-7-6(c), Code of Ala. 1975.

(3)(a) Prior to the issuance of a motor vehicle master dealer license, the insurance coverage certified by theapplicant pursuant to paragraph 2 must be verified by theinsurance company providing coverage for the license year, orits licensed agent, either electronically or by completion andsubmission of an insurance certification form MVD-1, generatedfrom the department’s system.

(b) If the verified insurance coverage policy islater cancelled, the insurance company or its licensed agentmust provide the department with notice of the cancellation.

(4) If an applicant for a motor vehicle master dealerlicense knowingly furnishes an insurance certificate purportinginsurance coverage which is false or nonexistent, or which theapplicant knows has lapsed prior to the application date, apenalty of $1,000.00 shall be assessed in accordance with§40-12-29, Code of Ala. 1975. Further any license issuedpursuant to an application for which this penalty has beenassessed shall be revoked in accordance with §40-12-396, Code of Ala. 1975, and the licensee shall not be considered for anotherlicense. In the event that the licensee is a designated agentand the license is revoked pursuant to this paragraph, thelicensee’s designated agent status will also be revoked.

(5) If a notice of cancellation of insurance is received from the insurance company or its license agent duringthe license year and the licensee does not provide proof ofinsurance coverage prior to the date of cancellation, thelicense shall be revoked. To reinstate the license, the licenseemust submit evidence of insurance as provided in this rule and anew surety bond.

History

• Author: Don Clemons, Mike Gamble
• Authority: Code of Ala. 1975, §§40-2A-7(a)(5), 40-12-392(a).
• New Rule: Filed July 30, 2012; effective September 3, 2012. Amended: Filed December 19, 2012; effective January 23, 2013. Amended: Filed December 5, 2014; effective January 9, 2015. Amended: Published July 31, 2020; effective September 14, 2020.

Ala. Admin. Code r. 810-5-12.-06 Buyer’s Identification Cards Sales at Salvage Pools or Salvage Disposal Sales

(1)(a) Section 40-12-421, Code of Ala. 1975, restricts sales at salvage pools or salvage disposal sales to persons holding a current automotive dismantler and parts recycler license or their agents or employees. Each such person must have a separate buyer’s identification (BID) card to buy at a salvage pool or salvage disposal sale.

(b) A person, firm, or corporation who is a license holder under §40-12-421, Code of Ala. 1975, is limited to no more than three (3) BID cards for each licensed location. BID cards are not transferable. If a buyer is no longer an employee or agent of the automotive dismantler or parts recycler, the bid card is no longer valid and the dismantler may submit a new BID card application and payment for a new employee or agent.

(2)(a) License Required to Obtain a Bid Card. The BID card authorizing a holder to bid on or buy motor vehicles at a salvage pool or salvage disposal sale shall be available to any person, firm, or corporation that possesses a current Alabama automotive dismantler and parts recycler license under §40-12-411, Code of Ala. 1975. Cards are also available to salvage dealers licensed in other states under a license equivalent to the Alabama automotive dismantler and parts recycler license pursuant to subparagraph (2)(b).

(b) Acceptance of License Issued by Another State. A license issued by another state of the United States will be considered equivalent to the Alabama automotive dismantler and parts recycler license if the licensing laws of the other state provide for all the following:

1. Authorization to engage in the business of purchasing and dismantling, disassembling or repairing, wrecked, abandoned, or repairable motor vehicles, and selling the usable parts thereof; or the business of selling such wrecked, abandoned, or repairable motor vehicles as a unit at wholesale, or selling the hulk of the vehicle after the salvageable parts have been removed.

2. A permanent physical location within the state of licensure which is adequate to conduct business as provided above.

3. Maintenance of records of all purchases and sales of vehicles for a period of five years from the date of purchase or sale, including the name and address of each purchaser or seller. Such records must be made available for inspection by agents of the State of Alabama at the automotive dismantler and parts recycler's business location during reasonable business hours on business days. A license issued by a political subdivision of a state, or by a municipality will not be considered equivalent to the Alabama automotive dismantler and parts recycler license, nor will a license issued by a foreign country or by a state or province of a foreign country be considered equivalent.

(3) Required Information for BID Card Application. Dismantlers wishing to obtain BID cards must submit an application to the Department, which includes but is not limited to the following information:

(a) Name, business and mailing address, and telephone number of the licensed automotive dismantler and parts recycler.

(b) Name, address and telephone number of an owner or officer of the dismantler.

(c) Name, address, telephone number and state-issued identification card number.

(4) Additional Supporting Documentation. The following information must be submitted with the BID card application:

(a) A copy of the buyer’s state issued Identification card containing a valid picture of the buyer.

(b) If the Dismantler is licensed in a state other than Alabama, a copy of the current equivalent license as described in paragraph (5) below.

(c) Payment of fee for each buyer for whom a (BID) card is sought.

(5) Information Provided on BID Cards. BID cards issued by the Department will include but are not limited to the following information:

(a) Expiration Date.

(b) Name, business address and license number of the licensed dismantler and parts recycler.

(c) Name, address, state-issued identification card number of the buyer.

(6) BID Card Verification. Buyers must provide BID cards and state-issued identification cards to be eligible to bid on or buy motor vehicles at a salvage pool or salvage disposal sale. BID cards may be verified electronically through the department’s online portal.

(7) Expiration and Revocation of BID Cards.

(a) BID cards are valid from October 1 through September 30 of each year and expire when the Alabama automotive dismantler and parts recycler license expires.

(b) Annually, holders of valid cards on September 30 may continue to bid on or buy motor vehicles at a salvage pool or salvage disposal sale for the thirty-day grace period ending each October 30. Persons wishing to bid on or buy motor vehicles at a salvage pool or salvage disposal sale after October 30 must have a current BID card.

(c) All BID cards become invalid if the holder is no longer a licensed automotive dismantler and parts recycler or an agent or employee of the same licensed automotive dismantler and parts recycler. BID cards issued to dismantlers licensed in other states may be revoked for failure to comply with the conditions of the Alabama automotive dismantler and parts recycler license or for failure to permit inspection of records of purchases and sales as required under paragraph (2)(b) hereof. BID cards may also be denied issuance or revoked if the applicant or licensee fails or has failed to comply with federal and state salvage and junk vehicle reporting requirements.

(d) If a BID card is lost or damaged, the dismantler may apply for a duplicate card, by completing a new application and paying the fee.

(e) Any changes (i.e. business entity, eligible applicant, address, telephone number) must be reported to the Department. Failure to report such changes may result in the revocation of the BID card(s).

History

• Author: Tammy Fuller, Lisa Blankenship
• Authority: Code of Ala. 1975, §§40-2A-7(a)(5), 40-12-30, 40-12-421.
• New Rule: Filed October 20, 2017; effective December 4, 2017. Repealed and New Rule: Published August 31, 2021; effective October 15, 2021.

Ala. Admin. Code r. 810-5-12.-07 Application For Motor Vehicle Wholesale Auction License

(1) All motor vehicle wholesale auction license applications must be filed electronically. In addition to the application, the applicant must provide the following in order to complete the application:

(a) A payment of one hundred and twenty-five-dollar ($125) application fee as determined under §40-12-447, Code of Ala. 1975.

(b) A properly executed surety bond.

(c) A copy of the driver license or non-driver identification card for all owner(s), partners, members, officers, and directors.

(2) Licenses must be renewed on October 1 each year and thirty (30) days of grace shall be allowed without penalty. After thirty (30) days, a penalty of fifteen percent (15%) of the license amount as provided in §40-12-447, Code of Ala. 1975 shall be applied.

(3) The licensee must maintain records for every motor vehicle purchased, sold, exchanged, or held for sale at the location of the licensee for five (5) years, as provided by §40-12-446, Code of Ala. 1975. The department shall require monthly or other periodic electronic reporting of all sales of motor vehicles during the reporting period at the motor vehicle auction, as provided by §40-12-446, Code of Ala. 1975.

(a) The records and reporting information must include, but not be limited to the following:

1. Complete description of each motor vehicle, including the vehicle identification number, year, make and model of each motor vehicle.

2. Name and address of any seller and purchaser.

3. Dealer number of seller and purchaser.

4. Date of transaction.

5. Purchase and sales price of vehicle.

(b) These records are open to inspection by representatives of the department and law enforcement officers during reasonable business hours. A licensee may maintain a record in an electronic format if the licensee can print the record at the licensed location upon request.

History

• Author: Lisa Blankenship
• Authority: Code of Ala. 1975, §§40-2A-7(a)(5), 40-12-446, 40-12-447, 40-12-448.
• New Rule: Published July 31, 2020; effective September 14, 2020.