Senate Bill No. 69–Senator O’Connell

 

February 7, 2003

____________

 

Referred to Committee on Transportation

 

SUMMARY—Revises requirements concerning consignment of vehicles. (BDR 43‑86)

 

FISCAL NOTE:  Effect on Local Government: Yes.

                           Effect on the State: No.

 

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EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.

 

AN ACT relating to motor vehicles; requiring the consignee of a vehicle to assist the consignor in completing a financing statement to create a purchase-money security interest of the consignor in the vehicle; requiring the consignee to file the financing statement with the Secretary of State; providing a penalty; and providing other matters properly relating thereto.

 

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN

SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

 

1-1  Section 1. NRS 482.31776 is hereby amended to read as

1-2  follows:

1-3  482.31776  1.  A consignee of a vehicle shall, upon entering

1-4  into a consignment contract or other form of agreement to sell a

1-5  vehicle owned by another person[, open] :

1-6  (a) Open and maintain a separate trust account in a federally

1-7  insured bank or savings and loan association that is located in this

1-8  state, into which the consignee shall deposit all money received

1-9  from a prospective buyer as a deposit, or as partial or full payment

1-10  of the purchase price agreed upon, toward the purchase or transfer

1-11  of interest in the vehicle. A consignee of a vehicle shall not:

1-12      [(a)] (1) Commingle the money in the trust account with any

1-13  other money that is not on deposit or otherwise maintained toward

1-14  the purchase of the vehicle subject to the consignment contract or

1-15  agreement; or

2-1  [(b)] (2) Use any money in the trust account to pay his

2-2  operational expenses for any purpose that is not related to the

2-3  consignment contract or agreement.

2-4  (b) Assist the consignor in completing, with respect to the

2-5  consignor’s purchase-money security interest in the vehicle, a

2-6  financial statement of the type described in subsection 5 of NRS

2-7  104.9317 and shall file the financial statement with the Secretary

2-8  of State on behalf of the consignor. If a consignee has previously

2-9  granted to a third party a security interest with an after-acquired

2-10  property clause in the consignee’s inventory, the consignee

2-11  additionally shall assist the consignor in sending an authenticated

2-12  notification, as described in paragraph (b) of subsection 1 of NRS

2-13  104.9324, to each holder of a conflicting security interest. The

2-14  consignee must not receive delivery of the vehicle until the

2-15  consignee has:

2-16          (1) Filed the financing statement with the Secretary of

2-17  State; and

2-18          (2) If applicable, assisted the consignor in sending an

2-19  authenticated notification to each holder of a conflicting security

2-20  interest.

2-21      2.  Upon the sale or transfer of interest in the vehicle, the

2-22  consignee shall forthwith:

2-23      (a) Satisfy or cause to be satisfied all outstanding security

2-24  interests in the vehicle; and

2-25      (b) Satisfy the financial obligations due the consignor pursuant

2-26  to the consignment contract.

2-27      3.  Upon the receipt of money by delivery of cash, bank check

2-28  or draft, or any other form of legal monetary exchange, or after any

2-29  form of transfer of interest in a vehicle, the consignee shall notify

2-30  the consignor that the money has been received or that a transfer of

2-31  interest in the vehicle has occurred. Notification by the consignee to

2-32  the consignor must be given in person or, in the absence of the

2-33  consignor, by registered or certified mail addressed to the last

2-34  address or residence of the consignor known to the consignee. The

2-35  notification must be made within 3 business days after the date on

2-36  which the money is received or the transfer of interest in the vehicle

2-37  is made.

2-38      4.  The provisions of this section do not apply to an executor, an

2-39  administrator, a sheriff or any other person who sells a vehicle

2-40  pursuant to the powers or duties granted to or imposed on him by

2-41  specific statute.

2-42      5.  Notwithstanding any provision of NRS 482.423 to 482.4247,

2-43  inclusive, to the contrary, a vehicle subject to a consignment

2-44  contract may not be operated by the consignee, an employee or

2-45  agent of the consignee, or a prospective buyer in accordance with

3-1  NRS 482.423 to 482.4247, inclusive, by displaying a temporary

3-2  placard to operate the vehicle unless the operation of the vehicle is

3-3  authorized by the express written consent of the consignor.

3-4  6.  A vehicle subject to a consignment contract may not be

3-5  operated by the consignee, an employee or agent of the consignee,

3-6  or a prospective buyer in accordance with NRS 482.320 by

3-7  displaying a special plate unless the operation of the vehicle is

3-8  authorized by the express written consent of the consignor.

3-9  7.  A consignee shall maintain a written log for each vehicle for

3-10  which he has entered into a consignment contract. The written log

3-11  must include:

3-12      (a) The name and address, or place of residence, of the

3-13  consignor;

3-14      (b) A description of the vehicle consigned, including the year,

3-15  make, model and serial or identification number of the vehicle;

3-16      (c) The date on which the consignment contract is entered into;

3-17      (d) The period that the vehicle is to be consigned;

3-18      (e) The minimum agreed upon sales price for the vehicle;

3-19      (f) The approximate amount of money due any lienholder or

3-20  other person known to have an interest in the vehicle;

3-21      (g) If the vehicle is sold, the date on which the vehicle is sold;

3-22      (h) The date that the money due the consignor and the lienholder

3-23  was paid;

3-24      (i) The name and address of the federally insured bank or

3-25  savings and loan association in which the consignee opened the trust

3-26  account required pursuant to subsection 1; and

3-27      (j) The signature of the consignor acknowledging that the terms

3-28  of the consignment contract were fulfilled or terminated, as

3-29  appropriate.

3-30      8.  A person who:

3-31      (a) Appropriates, diverts or otherwise converts to his own use

3-32  money in a trust account opened pursuant to paragraph (a) of

3-33  subsection 1 or otherwise subject to a consignment contract or

3-34  agreement is guilty of embezzlement and shall be punished in

3-35  accordance with NRS 205.300. The court shall, in addition to any

3-36  other penalty, order the person to pay restitution.

3-37      (b) Violates paragraph (b) of subsection 1 is guilty of a

3-38  misdemeanor. The court shall, in addition to any other penalty,

3-39  order the person to pay restitution.

3-40      (c) Violates any other provision of this section is guilty of a

3-41  misdemeanor.

 

3-42  H