2017-2018 Bill 3933: Dealer License Plates - South Carolina Legislature Online

1 South Carolina General Assembly 2 122nd Session, 2017-2018 3 4 H. 3933 5 6 STATUS INFORMATION 7 8 General Bill 9 Sponsors: Rep. Willis 10 Document Path: l:\council\bills\gt\5303cm17.docx 11 12 Introduced in the House on March 7, 2017 13 Introduced in the Senate on April 11, 2017 14 Currently residing in the Senate Committee on Transportation 15 16 Summary: Dealer license plates 17 18 19 HISTORY OF LEGISLATIVE ACTIONS 20 21 Date Body Action Description with journal page number 22 3/7/2017 House Introduced and read first time ( House Journalpage 80) 23 3/7/2017 House Referred to Committee on Education and Public Works ( House Journalpage 80) 24 3/30/2017 House Committee report: Favorable Education and Public Works ( House Journalpage 78) 25 4/6/2017 House Read second time ( House Journalpage 14) 26 4/6/2017 House Roll call Yeas100 Nays0 ( House Journalpage 14) 27 4/6/2017 House Unanimous consent for third reading on next legislative day ( House Journalpage 15) 28 4/7/2017 House Read third time and sent to Senate ( House Journalpage 5) 29 4/11/2017 Senate Introduced and read first time ( Senate Journalpage 7) 30 4/11/2017 Senate Referred to Committee on Transportation ( Senate Journalpage 7) 31 32 View the latest legislative information at the website 33 34 35 VERSIONS OF THIS BILL 36 37 3/7/2017 38 3/30/2017 39 1 COMMITTEE REPORT 2 March 30, 2017 3 4 H. 3933 5 6 Introduced by Rep. Willis 7 8 S. Printed 3/30/17--H. 9 Read the first time March 7, 2017. 10 11 12 THE COMMITTEE ON EDUCATION AND PUBLIC 13 WORKS 14 To whom was referred a Bill (H. 3933) to amend Section 15 5632320, as amended, Code of Laws of South Carolina, 1976, 16 relating to the Department of Motor Vehicles’ issuance of dealer 17 license plates, etc., respectfully 18 REPORT: 19 That they have duly and carefully considered the same and 20 recommend that the same do pass: 21 22 MERITA A. ALLISON for Committee. 23 24 25 STATEMENT OF ESTIMATED FISCAL IMPACT 26 Explanation of Fiscal Impact 27 Introduced on March 7, 2017 28 State Expenditure 29 This bill requires the Department of Motor Vehicles (DMV) to 30 issue an additional two dealer license plates to motor vehicle 31 dealers that have a full-service dealership of new or used vehicles. 32 The two additional plates are in addition to the number of plates 33 that a dealer currently receives pursuant to Section 56-3-2320. 34 The dealer must be able to demonstrate the presence of a service 35 garage at the dealership. 36 Department of Motor Vehicles. The agency indicates that the 37 issuance of additional dealer license plates can be managed within 38 existing appropriations. Therefore, this bill will have no 39 expenditure impact on the general fund, other funds, or federal 40 funds. 41 State Revenue

[3933-2] 1 This bill allows the Department of Motor Vehicles (DMV) to 2 provide an additional two dealer license plates to a dealer that has 3 a full-service dealership of new or used vehicles. The two 4 additional plates are in addition to the number of plates that a 5 dealer currently receives pursuant to Section 56-3-2320. The 6 dealer must be able to demonstrate the presence of a service garage 7 at the dealership in order to receive the additional two dealer 8 license plates. 9 Based upon data provided by DMV, there are currently 20,580 10 issued dealer license plates and 2,938 active motor vehicle dealers. 11 Pursuant to Section 56-3-2320, the fee for a dealer license plate is 12 $20. Of the $20 fee, $2 is credited to DMV to be used for the 13 production and issuance of new license plates, and the remaining 14 $18 is credited to the State Highway Fund of the State 15 Transportation Infrastructure Bank. 16 Based upon data from the U.S. Census Bureau, approximately 17 45 percent of motor vehicle dealers are full-service dealers and 18 have a service garage at their location. For this analysis, we 19 assume that each full-service dealer will claim the additional two 20 dealer plates pursuant to this bill, which will result in a total of 21 2,644 new dealer license plates. Therefore, this bill will generate 22 an additional $5,000 in other funds revenue for DMV and an 23 additional $48,000 for the State Highway Fund of the State 24 Transportation Infrastructure Bank. 25 The increased number of dealer license plates would allow 26 dealers to provide a vehicle with a dealer license plate to an 27 individual whose vehicle is being serviced or repaired by the 28 dealership. This would reduce the demand for rental cars by the 29 individuals whose vehicles are being serviced. This shift in who 30 provides an alternative vehicle to the individual whose vehicle is 31 being serviced reduces sales tax revenue that is generated from 32 rental vehicles. The sales tax on rental vehicles is 6 percent. Of 33 the 6 percent, 4 percent is allocated to the general fund, 1 percent 34 to EIA, and 1 percent to Homestead Exemption. Data are not 35 available to determine the reduction in sales tax revenue as a result 36 of fewer vehicle rentals. Therefore, the reduction in revenue to the 37 general fund, EIA, and Homestead Exemption is undetermined. 38 Local Revenue 39 The increased number of dealer license plates would allow 40 dealers to register fewer vehicles in the dealerships name. For this 41 analysis, we assume that motor vehicle dealers will provide 42 vehicles displaying dealer license plates to individuals whose 43 vehicles are being serviced or repaired by the dealership. Since

[3933-3] 1 motor vehicle dealers are not required to pay property taxes on 2 vehicles displaying dealer plates, this bill would cause a decline in 3 property tax revenue for county governments. 4 Based upon data obtained from DMV and the U.S. Census 5 Bureau, we estimate this bill will allow automobile dealers to 6 claim an additional 2,644 dealer license plates. Based upon data 7 from NADA, the average new vehicle retail price is $33,456, and 8 the average used vehicle retail price is $19,400. Additionally, 9 NADA data on the number of average vehicle sales indicates that 10 58 percent, or 1,534 of the 2,644 dealer plates represent new car 11 dealerships, and 42 percent, or 1,110 of dealer plates represent 12 used car dealerships. At an assessment ratio of 6 percent and a 13 statewide average millage rate of 343.5, this bill would reduce 14 property tax revenue on new cars by $1,058,000 and by $444,000 15 on used cars, for a total of $1,502,000. 16 17 Frank A. Rainwater, Executive Director 18 Revenue and Fiscal Affairs Office 19

[3933-4] 1 2 3 4 5 6 7 8 9 A BILL 10 11 TO AMEND SECTION 5632320, AS AMENDED, CODE OF 12 LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE 13 DEPARTMENT OF MOTOR VEHICLES’ ISSUANCE OF 14 DEALER LICENSE PLATES, SO AS TO PROVIDE THAT THE 15 DEPARTMENT SHALL SUPPLY AN ADDITIONAL TWO 16 LICENSE PLATES TO A FULLSERVICE DEALER WHO CAN 17 DEMONSTRATE THE PRESENCE OF A SERVICE GARAGE 18 AT HIS DEALERSHIP. 19 20 Be it enacted by the General Assembly of the State of South 21 Carolina: 22 23 SECTION 1. Section 5632320(A) of the 1976 Code, as last 24 amended by Act 253 of 2012, is further amended to read: 25 26 “(A) Upon application being made and the required fee being 27 paid to the Department of Motor Vehicles, the department may 28 issue dealer license plates to a licensed motor vehicle dealer. The 29 license plates, notwithstanding other provisions of this chapter to 30 the contrary, may be used exclusively on motor vehicles owned by, 31 assigned, or loaned for test driving purposes to the dealer when 32 operated on the highways of this State by the dealer, its corporate 33 officers, its employees, or a prospective purchaser of the motor 34 vehicle. The use by a prospective purchaser is limited to seven 35 days, and the dealer shall provide the prospective purchaser with a 36 dated demonstration certificate. The certificate must be approved 37 by the department. Dealer plates must not be used to operate 38 wreckers or service vehicles in use by the dealer nor to operate 39 vehicles owned by the dealer that are leased or rented by the 40 public. No dealer plates may be issued by the department unless 41 the dealer furnishes proof in a form acceptable to the department 42 that he has a retail business license as required by Chapter 36, Title

[3933] 5 1 12 and has made at least twenty sales of motor vehicles in the 2 twelve months preceding his application for a dealer plate. The 3 sales requirement may be waived by the department if the dealer 4 has been licensed for less than one year. For purposes of this 5 section, the transfer of ownership of a motor vehicle between the 6 same individual or corporation more than one time is considered as 7 only one sale. Multiple transfer of motor vehicles between licensed 8 dealers for the purpose of meeting eligibility requirements for 9 motor vehicle dealer plates is prohibited. 10 A dealer may be issued two plates for the first twenty vehicles 11 sold during the preceding year and one additional plate for each 12 fifteen vehicles sold beyond the initial twenty during the preceding 13 year. The department shall supply an additional two plates above 14 the number of plates that a dealer would otherwise be entitled 15 pursuant to this section if the dealer is a fullservice dealer, whether 16 of new or used vehicles, and can demonstrate the presence of a 17 service garage at the dealership. For good cause shown, the 18 department in its discretion may issue extra plates. If the dealer has 19 been licensed less than one year, the department shall issue a 20 number of license plates based on an estimated number of sales for 21 the coming year. The department may increase or decrease the 22 number of plates issued based on actual sales made. 23 The cost of each dealer plate issued is twenty dollars. 24 Upon application to the department, a public or private school, 25 college, or university, the United Service Organization South 26 Carolina, the American Red Cross, or an economic development 27 entity created or sanctioned by the county where the entity is 28 located, may be issued a license plate to be used on vehicles 29 loaned or rented to the school, college, university, the United 30 Service Organization South Carolina, the American Red Cross, or 31 economic development entity by a licensed motor vehicle dealer. 32 The plate must be a personalized plate designed by the department. 33 The cost of each plate issued is two hundred dollars, of which one 34 hundred sixty dollars must be remitted by the department to the 35 county in which the school, college, university, chapter of the 36 United Service Organization South Carolina, chapter of the 37 American Red Cross, or economic development entity is located. 38 Each plate is valid for two years, and there is no limit on the 39 number of plates which may be issued, except in the case of an 40 economic development entity where only one plate per entity is 41 allowed. 42 A dealer license plate is allowed on a motor vehicle which the 43 dealer lends to a public or private school for use in a driver

[3933] 6 1 education program. A plate used for this purpose may be obtained 2 without fee and without regard to the limit on plates issued 3 pursuant to this section. When the motor vehicle is no longer used 4 for driver education, the dealer shall surrender the plate to the 5 department. 6 Notwithstanding the provisions of this section, a dealer 7 exclusively selling heavy duty trucks at retail is eligible to obtain 8 license plates for exclusive use on the heavy duty trucks regardless 9 of the number of trucks sold by him during the preceding required 10 number of months. These license plates for trucks must be noted 11 with a distinct and separate identification and used only on heavy 12 duty trucks. For purposes of this section, heavy duty trucks include 13 trucks having a gross vehicle weight of sixteen thousand pounds or 14 greater.” 15 16 SECTION 2. This act takes effect upon approval by the 17 Governor. 18 XX 19

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