Location:
TOWING;
Scope:
Connecticut laws/regulations;

OLR Research Report


October 1, 2010

 

2010-R-0385

Revised

NEW REQUIREMENTS FOR VEHICLE TOWERS

By: Kevin E. McCarthy, Principal Analyst

You asked for a description of the new requirements that apply to organizations that tow vehicles on behalf of organizations that accept vehicles under donation programs.

SUMMARY

PA 101-110 expands the scope of Department of Motor Vehicles (DMV) licensure requirements for such organizations. Under prior law, persons, firms, or corporations who operated a wrecker to tow or transport disabled, inoperative, or wrecked vehicles or vehicles being removed according to law had to be licensed as a motor vehicle dealer or repairer only if they were compensated for such tows. The act requires all people, firms, and corporations who operate wreckers to be licensed regardless of whether they receive compensation.

In most cases, before an entity can apply for the license, the local land use agency and the local police chief or state police commander must approve the business's location.

License applicants must post a bond with DMV. Applicants for new car dealer licenses must have a franchise and applicants for other licenses must demonstrate financial capacity. DMV regulations additionally (1) require that the dealer or repairer have at least one mechanic and (2) impose record-keeping requirements, among other things. In practice, DMV subjects applicants for dealers and repairers licenses to an examination of their knowledge of applicable laws.

Each violation of the dealers and repairers' law is subject to a civil penalty of up to $1,000 and up to $2,000 for operating a dealership or repair business without a license (CGS 14-51a).

A DMV website, http://www.dmvct.state.ct.us/K36.HTM, provides additional information regarding the requirements for a dealer or repairer's license. There are several discrepancies between the website and the statutes, for example, which land use agency issues the approval of the business's location. The licensure and related requirements do not apply to (1) dealers towing vehicles for salvage purposes, (2) automobile clubs and associations, (3) vehicle recyclers and repossessions, and (4) individuals and businesses towing their own vehicles.

new requirements

Approval by Local Land Use Agency and Police

Under CGS 14-54, anyone who seeks to obtain a dealers or repairers license must first obtain and present to the DMV commissioner a certificate of approval of the business's proposed location from the board or authority designated by local charter, regulation, or ordinance of the municipality where the business is located or proposed to be located. If the municipality has a zoning commission or combined planning and zoning commission and a board of appeals, the certificate must be obtained from the commission. In addition, if the municipality has fewer than 20,000 residents, the location must also be approved by the local police chief or, if there is no police department, the commander of the state police barracks located nearest to the proposed location. Conn. Agencies Regs. 14-63-7 extends the latter requirement to new car dealer license applicants in all municipalities.

The local approval requirements do not apply to (1) a transfer of ownership to a spouse, child, brother, sister, or parent of a licensee; (2) a transfer of ownership to or from a corporation in which a spouse, child, brother, sister, or parent of a licensee has a controlling interest; or (3) a change in ownership involving the withdrawal of one or more partners from a partnership.

Anyone aggrieved by the performance of any act by the local authority may appeal to the superior court for the judicial district where the municipality is located, or under the Uniform Administrative Procedure Act. The appeal is privileged.

Conn. Agencies. Regs. 14-63-2 through 14-63-4a additionally require that the commissioner approve the location of the dealership or repair business. If the location has not been previously approved by the municipality or DMV, the applicant must have an A-2 survey map of the proposed location prepared and pay an application fee of $280.

DMV Licensure

Application. CGS 14-58 requires dealers and to make sworn application before engaging in their business. The application fee is $140 for each place of business. Licenses are non-transferable.

Conn. Agencies Regs. 14-63-2 through 14-63-4a require all license applicants to provide (1) two credit statements from reputable businesses and (2) two recommendations from former employees or business associates. This information must be provided for each member of a firm applying for a license. Applicants must also have specified experience or, in the case of a limited repairer (one that does minor repairs), training. New dealers must also have a franchise.

Under CGS 14-52, the commissioner may request information from any applicant for a repairer's license or used car dealer's license concerning its financial status and ability to comply with the requirements of relevant state law. The commissioner must review this information to determine if the applicant has sufficient financial resources to conduct the business in a manner consistent with the reasonable security and protection of its customers regarding its legal duties and responsibilities. The commissioner may refuse to issue a license if the applicant fails to provide any requested information or he is not satisfied as to the applicant's financial status. The commissioner may grant a license on condition that the applicant posts a surety bond for more than the $5,000 or $20,000 that is usually required. Any applicant aggrieved by the commissioner's decision is entitled to a hearing.

Under CGS 14-52a, the commissioner may, after notice and hearing, refuse to grant or renew a dealer or repairer license if the applicant or licensee, or its officer or major stockholder in the case of a firm or corporation, has been convicted of a violation of any laws relevant to dealers or repairers or of any violation involving fraud, larceny or deprivation or misappropriation of property, in federal courts or the court of any state. The applicant or licensee must make full disclosure of any such conviction within the previous five years when applying for the license or its renewal.

License Fees and Bonding. The biennial license fee is (1) $700 for a new motor vehicle dealer, (2) $560 for a used vehicle dealer, and (3) $345 for a repairer or limited repairer. The commissioner must mail the licensee a renewal application at least 45 days before his or her license expires. Any licensee who has not filed the renewal application and paid the fee before the license expires must cease engaging in business. A late renewal application is subject to an additional fee of $100. DMV may not renew a license that has been expired for more than 45 days.

Dealers must post a $20,000 surety bond and repairers a $5,000 bond. The bond must be conditioned on the applicant or licensee complying with the provisions of any state or federal law or regulation relating to the conduct of its business and cover any loss sustained by any person because of any acts of the licensee constituting grounds for suspending or revoking its license or the licensee going out of business. The bond may not be called until after a DMV hearing.

Additional Regulatory Requirements. DMV regulations (Conn. Agencies Regs. 14-63-1 through 14-63-27) impose additional requirements for licensees. These include the types of facilities, the personnel, and equipment the licensee must have. All dealers must have a repair department capable of taking care of at least two vehicles, not counting a grease pit or rack; all repairers must be able to take care of at least one vehicle. All dealers and repairers must have a mechanic. In practice, DMV requires that mechanics who are employees rather than owners be available at least 35 hours per week. All licensees other than limited repairers must have sufficient tools for proper servicing of vehicles.

Conn. Agencies Regs. 14-63-22 through 14-63-27 generally requires license and renewal applicants to demonstrate that they have a tank with a capacity of at least 250 gallons for oil and other waste liquid petroleum products. A licensee cannot dispose of the tank's contents unless he or she provides adequate evidence to the commissioner that the collector has a valid permit issued by the Department of Environmental Protection. The DMV commissioner can waive these requirements if he determines that the nature of the licensee's business does not require such facilities.

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