Reference is to the bill as introduced.
Amend the bill, as and if amended, by adding after the title and before the enacting words:
/ Whereas, the South Carolina Supreme Court
interpreted Section 37-2-307 in the matter of Freeman v. J.L.H.
Investments, L.P., a/k/a Hendrick Honda of Easley issued on
November 4, 2015; and
Whereas, the majority expressly invited the General Assembly to
address and correct this interpretation if it disagreed with the
aforementioned opinion; and
Whereas, the General Assembly finds that the court's dissenting
opinion accurately reflects the intent of the General Assembly;
and
Whereas, the General Assembly finds it necessary to clarify any
ambiguity in the General Assembly's intent in enacting Section
37-2-307; and
Whereas, the General Assembly enacted Section 37-2-307 of the
South Carolina Code in 2000 and placed the closing fee statute
in the South Carolina Consumer Protection Code as a disclosure
provision if a motor vehicle dealer intends to collect or charge
a closing fee; and
Whereas, the General Assembly wishes to clarify that it is the intent of the General Assembly to authorize a motor vehicle dealer to charge a closing fee and to provide protection from civil liability for the charging of a closing fee if the fee is charged in compliance with Title 37 and any Department of Consumer Affairs regulations or administrative interpretations. Now, therefore, /
Amend the bill further, as and if amended, by striking all after the enacting words and inserting:
/ SECTION 1. Section 37-2-307 of the 1976 Code is amended to read:
"Section 37-2-307.
(A) (1) Every motor vehicle
dealer charging closing fees on a motor vehicle sales contract
shall pay a one-time registration fee
of ten dollars during each state fiscal
before January 31st of each year to the Department of
Consumer Affairs. The department shall set the fee annually
in an amount not to exceed twenty-five dollars.
(2)
The closing fee must be included in the advertised
price of the motor vehicle, disclosed on the sales contract, and
displayed in a conspicuous location in the motor vehicle
dealership.
(B) A closing
fee is defined as a fee charged for all administrative and
financial work needed to transfer the motor vehicle to the
consumer including, but not limited to, compliance with all
state, federal, and lender requirements, preparation and
retrieval of documents, protection of the private personal
information of the consumer, records retention and storage
costs, and the preparation, reconditioning, and cleaning of the
motor vehicle.
(C)(1)
Prior to charging a closing fee, a motor vehicle dealer
shall provide written notice to the Department of Consumer
Affairs of the maximum amount of a closing fee the dealer
intends to charge on an annual basis. The department may review
the amount of the closing fee for reasonableness using the
criteria in item (2). If the department intends to conduct a
formal review of a proposed closing fee, the department shall
provide written notice to the motor vehicle dealer of the
department's intention to review the proposed closing fee within
thirty days of receiving the proposed closing fee. If the
department does not provide a motor vehicle dealer with written
notice of the department's intention to review the proposed
closing fee within thirty days, the motor vehicle dealer is
authorized to charge the proposed closing fee. If the department
determines that a proposed closing fee is not reasonable, the
department shall issue a written order detailing the
department's findings. The department may require the fee to be
reduced or require the motor vehicle dealer to submit a new fee
for review. During the pendency of the review period, a motor
vehicle dealer is authorized to charge a closing fee at an
amount not to exceed the amount most recently on file and
permitted to be charged by the department. If the department
finds that a closing fee is not reasonable, the motor vehicle
dealer may request a hearing in accordance with the
Administrative Procedures Act.
(2)
In determining the reasonableness of a closing
fee, the department shall allow the following items to be
included in a reasonable closing fee:
(a)
all administrative expenses, costs, staff,
supplies, materials, and financial work needed to transfer the
motor vehicle to the consumer and to procure the closing of the
motor vehicle transaction;
(b)
all costs for administrative expenses, costs,
staff, supplies, and materials necessary by dealer to comply
with all state, federal, and lender requirements;
(c)
all costs for administrative costs, staff, and
materials needed for the preparation and retrieval of
documents;
(d)
all costs for administrative costs, staff,
supplies, and materials necessary for the protection of the
private personal information of the consumer; and
(e)
all costs for administrative costs, staff,
supplies and materials necessary for records retention and
storage costs.
(D)
Whether the vehicle transaction is a credit sale or
cash transaction:
(1)
notwithstanding another provision of law, a
motor vehicle dealer who complies with this section and any
regulation promulgated under it and who charges a closing fee is
not engaging in any action which is arbitrary, in bad faith, or
unconscionable for purposes of Section 56-15-40 with regard to
the charging of a closing fee and may lawfully charge a closing
fee;
(2)
a motor vehicle dealer may assert any defenses
provided to a creditor pursuant to the provisions of this title;
and
(3)
a purchaser injured or damaged by an action of a
motor vehicle dealer in violation of this section or any
regulation promulgated thereunder, may assert the remedies
available pursuant to the provisions of this title.
(E)(1)
The Department of Consumer Affairs shall administer and
enforce the subject of motor vehicle dealer closing fees
including, but not limited to, this section. The department
shall make and promulgate such rules and regulations relating to
motor vehicle dealer closing fees to administer and enforce this
section. The department shall have access to a motor vehicle
dealer's books, accounts and records to determine if the dealer
is complying with the provisions of this section, and this
financial information must be kept confidential and privileged
from disclosure, except as provided by law.
(2)
If the department determines that a closing fee is not
reasonable, the department shall issue a written order detailing
the department's findings. The department may require the fee to
be reduced or require the motor vehicle dealer to submit a new
fee for review. If the department finds that a closing fee is
not reasonable, the motor vehicle dealer may request a hearing
in accordance with the Administrative Procedures Act.
(F) It is
the intent of the General Assembly to authorize a motor vehicle
dealer to charge a closing fee in compliance with this section
and to protect a motor vehicle dealer from civil liability for
charging a closing fee if the fee is charged in compliance with
this title and any Department of Consumer Affairs regulation or
administrative interpretation. It is further the intent to
protect consumers by the disclosure and notice provisions
established in this section and with the remedies provided by
this Title."
SECTION 2. This act takes effect upon approval by the Governor; provided, however, a motor vehicle dealer must be allowed an additional period of thirty days from the effective date to comply with Section 37-2-307(C). /
Renumber sections to conform.
Amend title to conform.