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ARIZONA STATE SENATE
Fifty-Seventh Legislature, First Regular Session
used motor vehicle dealers; appropriation
Purpose
An emergency measure that that establishes a mandatory education requirement for used and wholesale motor vehicle dealers, adds a requirement for the application of a motor vehicle dealer (dealer) license and appropriates $250,000 in FY 2025 from the Motor Vehicle Dealer Enforcement Fund (Fund), as modified, to the Arizona Department of Transportation (ADOT) for investigation activities of unlicensed dealers.
Background
A person that applies for a motor vehicle dealer license must include all required documents and bonds and prescribed annual license fees with a verified application that contains outlined information. The Director of ADOT may establish education and training for a person applying for an initial or a renewal of a used or wholesale dealer license and may contract with a private entity to provide education and training and may charge a fee for the education and training (A.R.S. § 28-4361).
The Fund is administered by ADOT and consists of civil penalties that result from licensed and unlicensed dealer violations. Fund monies are subject to legislative appropriations. The Director of ADOT must deposit all unexpended and unencumbered Fund monies exceeding $250,000 at the end of each fiscal year in the State Highway Fund (A.R.S. § 28-4504).
S.B. 1433 appropriates $250,000 from the Fund in FY 2025 to ADOT for investigation activities of unlicensed used motor vehicle dealers.
Provisions
a) is administered by a dealer-specific association with an established presence in the state of at least five years;
b) covers federal, state and local regulations regarding motor vehicle sales, including consumer protections, financing laws, tax requirements and licensing standards; and
c) includes at least six hours of instruction.
2. Exempts the following from the mandatory education course requirement:
a) a new franchise dealer, manufacturer or recycler; and
b) a dealer that was licensed on or before December 31, 2023, unless the dealer applies to obtain a new license type or to change business locations.
3. Requires a verified application for a dealer license to contain a form signed by the applicant that:
a) defines curbstoning as the illegal sale of vehicles without being properly licensed; and
b) describes the penalties for engaging in business as an unlicensed dealer, used dealer or automotive recycler.
4. Appropriates $250,000 from the Fund in FY 2025 to ADOT for investigation activities related to unlicensed used dealers.
5. Requires the Fund to be used for:
a) operation expenses to enhance enforcement activity related to investigating unlicensed dealers.; and
b) expanding resources and scaling operations related to enforcing licensing requirements for dealers.
6. Immunizes Fund monies from being subject to legislative appropriations.
7. Makes technical and conforming changes.
8. Becomes effective on signature of the Governor, if the emergency clause is enacted.
Prepared by Senate Research
February 17, 2025
KJA/NRG/slp