SUBCHAPTER 4 APPLICATION
§16-86-10 Application for license. Applications for licenses shall be filed on forms prescribed by the board, accompanied by the application fee which shall be nonrefundable. [Eff and comp 9/1/88; comp 4/29/93] (Auth: HRS §437-6) (Imp: HRS §§437-7, 437-11)
§16-86-11 Exhibits required.
(a) Applicants for the issuance of a dealer’s or auction’s license shall file:
(1) Floor plans showing measurements for all facilities, including boundaries of the proposed premises and sanitary facilities;
(2) Tenancy or lease agreement with landlord which shall include certification of landlord stating whether the property is being rented or leased and whether the property is located in a business zone;
(3) Confirmation letter signed by an official of a federally insured financial institution certifying that an inventory or flooring line of credit has been secured in the required amount indicated in section 437-7, HRS;
(4) Photocopy of the financing statement filed at the bureau of conveyances of the department of land and natural resources, securing the inventory or flooring line of credit;
(5) Financial statement that is current and prepared by a registered certified public accountant or public accountant which need not be audited;
(6) Franchise agreement for new vehicle dealers only, attesting that applicant is authorized to sell or distribute new motor vehicles in the respective county; and
(7) Proof from the business registration division (BREG) of the department of commerce and consumer affairs that the partnership or corporation is properly registered with the State.
(b) Motor vehicle salespersons shall submit a separate application form which includes an affidavit by the dealer certifying that the salesperson is employed by and under the supervision of the dealer. [Eff and comp 9/1/88; am and comp 4/29/93] (Auth: HRS §437-6) (Imp: HRS §§437-7, 437-11)
§16-86-12 Alternative form of security. (a) Where an inventory or flooring line of credit cannot reasonably be obtained by a dealer, the board may provide that a bond, for one of the following amounts, be obtained as an alternative form of security:
(1) $200,000 for new vehicle dealers selling ten or more new motor vehicle units a month on an annual basis;
(2) $50,000 for new vehicle dealers selling less than ten new motor vehicle units per month on an annual basis;
(3) $100,000 for used motor vehicle dealers selling sixty or more motor vehicle units per month on an annual basis;
(4) $25,000 for a used motor vehicle dealer selling less than sixty units a month on an annual basis; and
(5) $10,000 for motorcycle and motor scooter dealers.
(b) More than one bond may be furnished by the same applicant, provided they aggregate the full amount prescribed by this section. (c) The bond must be:
(1) Executed by a surety company authorized to do business in the State; or
(2) Secured by a deposit of cash with the board in lieu of surety. Interest earned on a cash deposit while in the possession of the director shall belong to the licensee or trustee.
(d) The bond shall be conditioned:
(1) That the dealer will faithfully and truly comply with chapter 437, HRS, as the same now is or may be amended, and with any rules as may be promulgated by the board pursuant to chapter 437, HRS;
(2) That the dealer will not be guilty of fraud, misrepresentation, or other improper business conduct in connection with the selling, purchasing, negotiating for purchase, or otherwise dealing with motor vehicles or any other property related thereto, and that the dealer will satisfy all judgments rendered against the dealer based in whole or in part upon representations or warranties made in connection with any retail sale or negotiation for the purchase of a motor vehicle; and
(3) That the dealer will protect any purchaser of any vehicle or any person acquiring any lien thereon or successor in interest of any such person against any loss on account of any defect in or undisclosed encumbrances upon the title of any motor vehicle, registered in reliance upon any certificate, affidavit, or other representation of the dealer, or registration or transfer of registration procured by the dealer.
(e) Suit on bond. The board, director of commerce and consumer affairs, or any person who has been or claims to have been injured by the conduct of the dealer shall have the right of action to recover on any such bond, plus a reasonable attorney’s fee (to be allowed by the court, no other attorney’s fees shall be permitted from the bond proceeds) incurred to procure the recovery under the bond, but the aggregate liability of the surety or sureties to all such persons shall in no event exceed the amount of the bond. Nothing in chapter 437, HRS, or the rules promulgated pursuant thereto, shall be deemed to prohibit or prevent an independent action against the dealer and any other person from being joined or consolidated with an action on the bond, and the recovery of a larger amount than the amount of the bond founded upon any other cause or causes of action so joined or consolidated. [Eff and comp 4/29/93] (Auth: HRS §437-6) (Imp: HRS §§437-7, 26-9(j), 26-9(q))
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