PROPOSED REGULATION:  12-6-104(4)  ESTABLISHMENT OF ENFORCEMENT AND COMPLIANCE STANDARDS RELATED TO ADMINISTRATIVE PENALTIES.

LEGAL BASIS FOR THIS REGULATION:  The statutory basis for this regulation is C.R.S. sec. 12-6-104(4) and Senate Bill 07-221

PURPOSE OF THIS REGULATION:  The purpose of this new regulation is to ensure that administrative penalties are equitably assessed and are commensurate with the seriousness of the violation.  
   
12-6-104(4) The Motor Vehicle Dealer Board shall apply administrative penalties in the cases it considers based upon the following compliance and enforcement standards:

1.  All matters brought to the board for hearing shall be presented either electronically or in written hard copy by sworn affidavit asserting probable cause to believe that the events set forth in the affidavit constitute a violation of regulation or law which the board is empowered to enforce.

2.  The investigation section of the Auto Industry Division in accordance with guidelines established in cooperation with the board will determine whether or not the results of an investigation shall be referred to the board by affidavit.

3.  Except as otherwise provided for in this regulation, no complaint shall be referred to the board by the division until such time as the division has considered the licensee’s response to the complaint, if any, and has substantially completed its investigation into the matters alleged.
 
4.  A matter shall be referred to the board whenever the following conditions are met:

	(a)  When the licensee has engaged in a pattern of violations.  A pattern for this purpose is defined as 2 or more founded complaints occurring within the preceding 12 months.  No matter resolved by a licensee based upon the 10 day letter program of the division shall be considered for the purpose of establishing a pattern pursuant to this provision.

	(b)  When a licensee’s conduct appears to the division to be willful and deliberate or the licensee’s continued conduct presents a clear and present danger to the public health, safety or welfare.

	(c)   When the licensee and the complainant are unable to reach an acceptable resolution of an actionable complaint or when a licensee fails to present a reasonable offer to resolve a complaint.  

	(d)     When the division determines that the conduct of any licensee is such that it cannot properly be corrected without the intervention of the board.

5.  Upon presentation to the board of a matter by the division the board shall dispose of all such matters upon its review and evaluation of the affidavit of probable cause by:

	(a)  The board may accept the case for hearing and appoint itself upon unanimous vote, an administrative law judge or a hearings officer to hear the matter, as is appropriate.  In all such cases the board shall refer the case to the attorney general for the commencement of formal disciplinary proceedings, drafting of notice of hearing and notice of charges and prosecution of the case.

	(b)  The board may direct the executive secretary to propose a resolution of the matter to the licensee, to attempt to enter into a stipulated disposition of the matter or to otherwise resolve the matter without a formal hearing.

	(c) The board may refer the matter to another agency if appropriate.

	(d) The board may refer the matter back to the division for further investigation without taking any further action at that time.

	(e) The board may determine not to exercise any authority over the matter and advise the division that it declines to take any action and defers to the civil remedies provisions found in section 12-6-122 C.R.S.

6.  The board shall, from time to time and as is appropriate and necessary agree with the division to create and update compliance and investigation guidelines to be used by the division for evaluating matters prior to referring them to the board.  

7.  The board shall impose administrative penalties based upon its discretion except that it may not exercise any discretion with regard to mandatory disqualifying terms and conditions established by statute.  Upon exercising its discretion the board shall consider the licensee’s history with the board and the impact of any monetary fine on the licensee’s ability to restore any victim to the status quo.

8.  Fines imposed by the board shall be punitive and not compensatory.

9.  The board may reduce any fine it imposes upon a licensee by any amount said licensee pays to victims in order to restore the financial loss suffered by victims subjected to the conduct of the licensee which conduct is the subject matter giving rise to the fine imposed by the board.

10.  Any licensee appearing before the board for imposition of an administrative penalty for the first time shall be subject to 50% of the fining authority of the board (or its designee) as provided for in article 6, of title 12, CRS. In addition, the board shall also consider mitigating and aggravating factors when imposing administrative penalties. 

11.  Any licensee appearing before the board for imposition of an administrative penalty for a second time on the same or similar offense within a 24 month period shall be subject to at least 75% of the fining authority of the board (or its designee) as provided for in article 6, of title 12, CRS. In addition, the board shall also consider mitigating and aggravating factors when imposing administrative penalties. 

12.  Any licensee appearing before the board for imposition of an administrative penalty for a third or more occurrence of any fineable offense within a 24 month period shall be subject to the full fining authority of the board (or its designee) as provided for in article 6, of title 12, CRS.  In addition, the board shall also consider mitigating and aggravating factors when imposing administrative penalties. 

Proposed Amended Regulation: 12-6-104(3)(k).  Disclosure Form.

Basis:  The statutory basis for this regulation is 12-6-104(3)(k) C.R.S. and SB07-221. 

Purpose: The purpose of this amended regulation is that the board shall prescribe a form used as part of a motor vehicle contract.

Proposed Amended Regulation: 12-6-118(3)(d).  Define written notice to the Board of a conviction.

Basis:  The statutory basis for this regulation is 12-6-118(3)(d), C.R.S. and  SB07-221
 
Purpose: The purpose of this amended regulation is to give the board written notice within 30 days of a conviction.

REGULATION 12-6-118(3)(d). Dealers, wholesalers, wholesale auction dealers, officers, directors or stockholders of corporations owning five per-cent or more, licensed as such, who are convicted of or pled nolo contendere or a plea in a deferred judgment and sentence to any felony or any crime pursuant to Article 3, 4, or 5 of Title 18, C.R.S., or like crime pursuant to federal law or the law of any other state, shall provide to the board written notice of such conviction within thirty days after receiving such conviction. The licensee shall provide complete information including copies of such conviction and pre-sentence reports within thirty days of the conviction. 

Proposed Amended Regulation: 12-6-118(5)(b). Define material misstatement in a salesperson application.

Basis:  The statutory basis for this regulation is 12-6-118(5)(b), C.R.S. and SB07-221.

Purpose: The purpose of this amended regulation is to define material misstatement in a salesperson application.

REGULATION 12-6-118(5)(b). “Material misstatement” in an application for a salesperson license means any relevant false or misleading statement, omission, or misrepresentation regarding personal identification information, employment history, prior occupational licensing history, whether regarding a license issued by the board or any other state licensing/regulatory agency, criminal background and history including arrests, criminal information filings, indictments, municipal, misdemeanor, and/or felony convictions, plea of nolo contendere or a plea in a  deferred judgment and sentence.

Proposed Amended Regulation: 12-6-118(5)(j).  Define written notice to the board of a conviction.

Basis:  The statutory basis for this regulation is 12-6-118(5)(j), C.R.S. and SB07-221.
 
Purpose: The purpose of this amended regulation is to define written notice to the board of a conviction.

REGULATION 12-6-118(5)(j). A  salesperson who is convicted of or pled nolo contendere or a plea in a deferred judgment and sentenced to any felony or any crime pursuant to article 3, 4, or 5 of title 18, C.R.S., or like crime pursuant to federal law or the law of any other state, must give the board written notice of such conviction within thirty days after such conviction. The licensee shall provide complete information including copies of the conviction and pre-sentence reports within thirty days of the conviction.