Article 1 - Issuance of Licenses and Certificates to Manufacturers, Transporters, and Dealers

California Vehicle Code — §§ 11700-11740

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Sections (82)

Amended by Stats. 1990, Ch. 1563, Sec. 38.

No person shall act as a dealer, remanufacturer, manufacturer, or transporter, or as a manufacturer branch, remanufacturer branch, distributor, or distributor branch, without having first been issued a license as required in Section 11701 or temporary permit issued by the department, except that, when the license or temporary permit has been canceled, suspended, or revoked or has expired, any vehicle in the dealer’s inventory and owned by the dealer when the dealer ceased to be licensed may be sold at wholesale to a licensed dealer. The former licensee shall give the purchasing dealer a statement of facts stating that the seller is not a licensed dealer.

Any vehicle on consignment with the dealer when the dealer ceased to be licensed shall be returned to the consignor. Any vehicle in the dealer’s possession, but not owned by the dealer and not on consignment when the dealer ceased to be licensed, shall be returned to the owner of the vehicle.

§ 11700.1

Added by Stats. 1979, Ch. 1088.

A dealer who does not have an established place of business in this state but who is currently authorized to do business as, and who has an established place of business as, a vehicle dealer in another state is not subject to licensure under this article if the business transacted in California is limited to the importation of vehicles for sale to, or the export of vehicles purchased from, persons licensed in California under this chapter.

§ 11700.2

Added by Stats. 1995, Ch. 211, Sec. 4. Effective January 1, 1996.

A dealer who obtains an autobroker’s endorsement to his or her dealer’s license is subject to all of the licensing, advertising, and other statutory and regulatory requirements and prohibitions applicable to a dealer, regardless of whether that dealer acts as the buyer of a vehicle, the seller of a vehicle, or provides brokering services on behalf of another or others for the purpose of arranging, negotiating, assisting, or effectuating the sale of a vehicle not owned by that dealer.

§ 11700.3

Added by Stats. 2002, Ch. 407, Sec. 1. Effective January 1, 2003.

No person may aid and abet a person in the performance of any act in violation of this chapter.

§ 11701

Amended by Stats. 2004, Ch. 836, Sec. 8. Effective January 1, 2005.

Every manufacturer, manufacturer branch, remanufacturer, remanufacturer branch, distributor, distributor branch, transporter, or dealer of vehicles of a type subject to registration, or snowmobiles, motorcycles, all-terrain vehicles, or trailers of a type subject to identification, shall make application to the department for a license containing a general distinguishing number. The applicant shall submit proof of his or her status as a bona fide manufacturer, manufacturer branch, remanufacturer, remanufacturer branch, distributor, distributor branch,

transporter, or dealer as may reasonably be required by the department.

§ 11702

Amended by Stats. 1983, Ch. 1286, Sec. 26.

The department may issue, or for reasonable cause shown, refuse to issue a license to any applicant applying for a manufacturer's, manufacturer’s branch, remanufacturer's, remanufacturer’s branch, distributor's, distributor’s branch, transporter's, or dealer’s license.

§ 11703

Amended by Stats. 2007, Ch. 437, Sec. 4. Effective January 1, 2008.

The department may refuse to issue a license to a manufacturer, manufacturer branch, remanufacturer, remanufacturer branch, distributor, distributor branch, transporter, or dealer, if it determines any of the following:

(a)The applicant was previously the holder, or a managerial employee of the holder, of a license issued under this chapter which was revoked for cause and never reissued by the department, or which was suspended for cause and the terms of suspension have not been fulfilled.

(b)The applicant was previously a business representative of a business whose license issued under this chapter was revoked for cause and never reissued or was suspended for cause and the terms of suspension have not been fulfilled.

(c)If the applicant is a business, a business representative of the business was previously the holder of a license, or was a business representative of a business whose license, issued under this chapter was revoked for cause and never reissued or was suspended for cause and the terms of suspension have not been fulfilled; or, by reason of the facts and circumstances related to the organization, control, and management of the business, the operation of that business will be directed, controlled, or managed by individuals who, by reason of their conviction of violations of the provisions of this code, would be ineligible for a license and, by licensing

the business, the purposes of this chapter would be defeated.

(d)The applicant, or a business representative if the applicant is a business, has been convicted of a crime or committed an act or engaged in conduct involving moral turpitude which is substantially related to the qualifications, functions, or duties of the licensed activity. A conviction after a plea of nolo contendere is a conviction within the meaning of this section.

(e)The applicant was previously the holder of an occupational license issued by another state, authorizing the same or similar activities of a license issued under this division; and that license was revoked or suspended for cause and was never reissued, or was suspended for cause, and the terms of suspension have not been fulfilled.

(f)The information contained in the application is

incorrect.

(g)Upon investigation, the business history required by Section 11704 contains incomplete or incorrect information, or reflects substantial business irregularities.

(h)A decision of the department to cancel, suspend, or revoke a license has been made and the applicant was a business representative of the business regulated under that license.

(i)The applicant has failed to repay the full amount of a claim paid by the Consumer Motor Vehicle Recovery Corporation, plus interest at the rate of 10 percent per annum. The dealer or lessor-retailer’s discharge in bankruptcy shall not relieve the dealer or lessor-retailer from the provisions of this subdivision, except to the extent, if any, mandated by bankruptcy law.

§ 11703.1

Amended by Stats. 1990, Ch. 1563, Sec. 40.

Any of the causes specified in this chapter as a cause to suspend or revoke the license issued to a dealer, manufacturer, manufacturer branch, remanufacturer, remanufacturer branch, distributor, distributor branch, or transporter, is cause to refuse to issue a license to a dealer, manufacturer, manufacturer branch, remanufacturer, remanufacturer branch, distributor, distributor branch, or transporter.

§ 11703.2

Amended by Stats. 2007, Ch. 93, Sec. 2. Effective January 1, 2008.

(a)An outstanding and unsatisfied final judgment rendered against the applicant exists in connection with the purchase, sale, or lease of any vehicle.

(b)An outstanding

and unsatisfied restitution order issued against the applicant under subdivision (a) of Section 11519.1 of the Government Code exists.

§ 11703.3

Amended by Stats. 1976, Ch. 934.

A person whose license has been revoked or whose application for a license has been denied may reapply for a license after a period of not less than one year has elapsed from the effective date of the decision revoking the license or denying the application; except that if the decision was entered under the authority of subdivision (a), (b), (c), or (g) of Section 11703, or 11703.2, or paragraph (6) of subdivision (a) of Section 11705, a reapplication accompanied by evidence satisfactory to the department that such grounds no longer exist may be made earlier than such one-year period.

§ 11703.4

Added by Stats. 1976, Ch. 1320.

The department may refuse to issue a license to a dealer when it determines that an applicant for a dealer’s license has failed to effectively endorse an authorization for disclosure of an account or accounts relating to the operation of the dealership as provided for in Section 7473 of the Government Code.

§ 11704

Repealed and added by Stats. 1977, Ch. 452.

(a)Every applicant who applies for a license pursuant to Section 11701 shall submit an application to the department on the forms prescribed by the department. Such applicant shall provide the department with information as to the applicant’s character, honesty, integrity, and reputation, as the department may consider necessary. The department, by regulation, shall prescribe what information is required of such an applicant for the purposes of this subdivision.

(b)Upon receipt of an application for a license which is accompanied by the appropriate fee, the department shall, within 120

days, make a thorough investigation of the information contained in the application.

(c)Every person holding a license issued pursuant to Section 11701 shall notify the department, within 10 days, of any change in the ownership or corporate structure of the licensee.

§ 11704.5

Amended by Stats. 2004, Ch. 836, Sec. 9. Effective January 1, 2005.

(a)Except as provided in subdivision (e), every person who applies for a dealer’s license pursuant to Section 11701 for the purpose of transacting sales of used vehicles on a retail or wholesale basis only shall be required to take and successfully complete a written examination prepared and administered by the department before a license may be issued. The examination shall include, but need not be limited to, all of the following laws and subjects:

(1)Division 12

(commencing with Section 24000), relating to equipment of vehicles.

(2)Advertising.

(3)Odometers.

(4)Vehicle licensing and registration.

(5)Branch locations.

(6)Offsite sales.

(7)Unlawful dealer activities.

(8)Handling, completion, and disposition of departmental forms.

(b)Prior to the first taking of an examination under subdivision (a), every applicant shall successfully complete a preliminary educational program of not less than four hours. The program shall address, but not be limited

to, all of the following topics:

(1)Chapter 2B (commencing with Section 2981) of Title 14 of Part 4 of Division 3 of the Civil Code, relating to motor vehicle sales finance.

(2)Motor vehicle financing.

(3)Truth in lending.

(4)Sales and use taxes.

(5)Division 12 (commencing with Section 24000), relating to equipment of vehicles.

(6)Advertising.

(7)Odometers.

(8)Vehicle licensing and registration.

(9)Branch locations.

(10)Offsite sales.

(11)Unlawful dealer activities.

(12)Air pollution control requirements.

(13)Regulations of the Bureau of Automotive Repair.

(14)Handling, completion, and disposition of departmental forms.

(c)(1) Except as provided in paragraph (2) or (3), every dealer who is required to complete a written examination and an educational program pursuant to subdivisions (a) and (b) and who is thereafter issued a dealer’s license shall successfully complete, every two years after issuance of that license, an educational program of not less than four hours that offers instruction in the subjects listed

under subdivision (a) and the topics listed under subdivision (b), in order to maintain or renew that license.

(2)A dealer is not required to complete the educational program set forth in paragraph (1) if the educational program is completed by a managerial employee employed by the dealer.

(3)Paragraph (1) does not apply to dealers who sell vehicles on a wholesale basis only and who, in a one-year period, deal with less than 50 vehicles that are subject to registration.

(d)Instruction described in subdivisions (b) and (c) may be provided by generally accredited educational institutions, private vocational schools, and educational programs and seminars offered by professional societies, organizations, trade associations, and other educational and technical programs that meet the requirements of this section or by

the department.

(e)This section does not apply to any of the following:

(1)An applicant for a new vehicle dealer’s license or any employee of that dealer.

(2)A person who holds a valid license as an automobile dismantler, an employee of that dismantler, or an applicant for an automobile dismantler’s license.

(3)An applicant for a motorcycle only dealer’s license or any employee of that dealer.

(4)An applicant for a trailer only dealer’s license or any employee of that dealer.

(5)An applicant for an all-terrain only dealer’s license or any employee of that dealer.

§ 11704.7

Added by Stats. 1996, Ch. 1008, Sec. 4. Effective January 1, 1997.

Every person who applies to the department to take or retake the examination required under Section 11704.5 shall pay to the department a fee of sixteen dollars ($16).

§ 11705

Amended by Stats. 2016, Ch. 682, Sec. 3. (AB 287) Effective January 1, 2017.

(a)The department, after notice and hearing, may suspend or revoke the license issued to a dealer, transporter, manufacturer, manufacturer branch, remanufacturer, remanufacturer branch, distributor, or distributor branch upon determining that the person to whom the license was issued is not lawfully entitled thereto, or has done any of the following:

(1)Filed an application for the license using a false or fictitious name not registered with the proper authorities, or knowingly made a false statement or knowingly concealed a material fact, in the application for the license.

(2)Made, or knowingly or negligently permitted, an illegal use of the special plates issued to the licensee.

(3)Used a false or fictitious name, knowingly made a false statement, or knowingly concealed a material fact, in an application for the registration of a vehicle, or otherwise committed a fraud in the application.

(4)Failed to deliver to a transferee lawfully entitled thereto a properly endorsed certificate of ownership.

(5)Knowingly purchased, sold, or otherwise acquired or disposed of a stolen motor

vehicle.

(6)Failed to provide and maintain a clear physical division between the type of business licensed pursuant to this chapter and any other type of business conducted at the established place of business.

(7)Willfully violated Section 3064, 3065, 3074, or 3075 or any rule or regulation adopted pursuant thereto.

(8)Violated any provision of Division 3 (commencing with Section 4000) or any rule or regulation adopted pursuant thereto, or subdivision (a) of Section 38200.

(9)Violated any provision of Division 4 (commencing with Section 10500) or any rule or regulation adopted pursuant thereto.

(10)Violated any provision of Article 1 (commencing with Section 11700) of, or Article 1.1

(commencing with Section 11750) of, Chapter 4 of Division 5 or any rule or regulation adopted pursuant thereto.

(11)Violated any provision of Part 5 (commencing with Section 10701) of Division 2 of the Revenue and Taxation Code or any rule or regulation adopted pursuant thereto.

(12)Violated any provision of Chapter 2b (commencing with Section 2981) of Title 14 of Part 4 of Division 3 of the Civil Code or any rule or regulation adopted pursuant thereto.

(13)Submitted a check, draft, or money order to the department for any obligation or fee due the state which was dishonored or refused payment upon presentation.

(14)(A) Has caused any person to suffer any loss or damage by reason of any fraud or deceit practiced on that person

or fraudulent representations made to that person in the course of the licensed activity.

(B)For purposes of this paragraph, “fraud” includes any act or omission which is included within the definition of either “actual fraud” or “constructive fraud” as defined in Sections 1572 and 1573 of the Civil Code, and “deceit” has the same meaning as defined in Section 1710 of the Civil Code. In addition, “fraud” and “deceit” include, but are not limited to, a misrepresentation in any manner, whether intentionally false or due to gross negligence, of a material fact; a promise or representation not made honestly and in good faith; an intentional failure to disclose a material fact; and any act within Section 484 of the Penal Code.

(C)For purposes of this paragraph, “person” also includes a governmental entity.

(15)Failed

to meet the terms and conditions of an agreement entered into pursuant to Section 11707.

(16)Violated Section 43151, 43152, or 43153 of, or subdivision (b) of Section 44072.10 of, the Health and Safety Code.

(17)Failed to repay a claim paid by the Consumer Motor Vehicle Recovery Corporation as provided in subdivision (i) of Section 11703.

(18)As a buy-here-pay-here dealer, violated any provision of Chapter 11 (commencing with Section 7500) of Division 3 of the Business and Professions Code or any rule or regulation adopted pursuant to those provisions.

(b)Any of the causes specified in this chapter as a cause for refusal to issue a license to a transporter, manufacturer, manufacturer branch, remanufacturer, remanufacturer branch, distributor,

distributor branch, or dealer applicant is cause to suspend or revoke a license issued to a transporter, manufacturer, manufacturer branch, remanufacturer, remanufacturer branch, distributor, distributor branch, or dealer.

(c)Except as provided in Section 11707, every hearing provided for in this section shall be conducted pursuant to Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code.

§ 11705.4

Amended by Stats. 1977, Ch. 873.

(a)The department, after notice and hearing, may suspend or revoke the license issued to a dealer, transporter, manufacturer, manufacturer branch, distributor, or distributor branch upon determining that the person to whom the license was issued is not lawfully entitled thereto or has willfully violated the terms and conditions of any warranty responsibilities as set forth in Title 1.7 (commencing with Section 1790) of Part 4 of Division 3 of the Civil Code.

(b)Every hearing as provided for in this section shall be pursuant to the provisions of Chapter 5 (commencing with Section

11500) of Part 1 of Division 3 of Title 2 of the Government Code.

§ 11706

Amended by Stats. 1983, Ch. 1286, Sec. 32.

The department may, pending a hearing, temporarily suspend the license and special plates issued to a manufacturer, manufacturer branch, remanufacturer, remanufacturer branch, distributor, distributor branch, transporter, or dealer, for a period not to exceed 30 days, if the director finds that such action is required in the public interest. In any such case, a hearing shall be held and a decision thereon issued within 30 days after notice of the temporary suspension.

Every hearing, as provided for in this section, shall be conducted pursuant to Chapter 5 (commencing with Section 11500) of Part 1 of Division 3

of Title 2 of the Government Code.

§ 11707

Amended by Stats. 1990, Ch. 90, Sec. 3. Effective May 9, 1990.

(a)After the filing of an accusation under this article, the director may enter into a stipulated compromise settlement agreement with the consent of the licensee on terms and conditions mutually agreeable to the director, the respondent licensee, and the accuser without further hearing or appeal. The agreement may include, but is not limited to, a period of probation or monetary penalties, or both. Except as provided in Section 11728, the monetary penalty shall not exceed one thousand dollars ($1,000) for each violation, and it shall be based on the nature of the violation and the effect of the violation on the purposes of this

article.

(b)A compromise settlement agreement may be entered before, during, or after the hearing, but is valid only if executed and filed pursuant to subdivision (d) before the proposed decision of the hearing officer, if any, is adopted or the case is decided.

(c)The department shall adopt, by regulation, a schedule of maximum and minimum amounts of monetary penalties, the payment of which may be included as a term or condition of a compromise settlement agreement entered under subdivision (a). Any monetary penalty included in a compromise settlement agreement shall be within the range of monetary penalties in that schedule.

(d)Any compromise settlement agreement entered under this section shall be signed by the director, the respondent licensee, and the accuser, or by their authorized representatives. The

director shall file, or cause to be filed, the agreement with the Office of Administrative Hearings, together with the department’s notice of withdrawal of the accusation or statement of issues upon which the action was initiated.

(e)If the respondent licensee fails to perform all of the terms and conditions of the compromise settlement agreement, the agreement is void and the department may take any action authorized by law, notwithstanding the agreement, including, but not limited to, refiling the accusation or imposing license sanctions.

§ 11708

Amended by Stats. 1983, Ch. 1286, Sec. 33.

(a)Upon refusal of the department to issue a license and special plates to a manufacturer, manufacturer branch, remanufacturer, remanufacturer branch, distributor, distributor branch, transporter, or dealer, the applicant shall be entitled to demand, in writing, a hearing before the director or his or her representative within 60 days after notice of refusal.

(b)The hearing shall be conducted pursuant to Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code.

§ 11709

Amended by Stats. 2010, Ch. 483, Sec. 1. (SB 1004) Effective January 1, 2011.

(a)A dealer’s established place of business, and other sites or locations as may be operated and maintained by the dealer in conjunction with his or her established place of business, shall have posted, in a place conspicuous to the public in each and every location, the license, or a true and exact copy of the license, issued by the department to the dealer and to each salesperson employed by the dealer

and shall have erected or posted thereon signs or devices providing information relating to the dealer’s name and the location and address of the dealer’s established place of business to enable any person doing business with the dealer to identify him or her properly. A sign erected or posted pursuant to this subdivision, on an established place of business, shall have an area of not less than two square feet per side displayed and shall contain lettering of sufficient size to enable the sign to be read from a distance of at least 50 feet. This section shall not apply to a dealer who is a wholesaler involved for profit only in the sale of vehicles between licensed dealers.

(b)Notwithstanding Section 11704 and this section, a dealer may display vehicles at a fair, exposition, or similar exhibit without securing a branch license, if no actual sales are made at those events and the display does not exceed 30 days.

(c)A vehicle displayed pursuant to subdivision (b) or (e) shall be identified by a sign or device providing information relating to the dealer’s name and the location and address of the dealer’s established place of business.

(d)This section shall not be applicable to a dealer who deals only in off-highway vehicles subject to identification, as defined in Section 38012.

(e)Notwithstanding Section 11704 and this section, a vessel dealer may display a trailer and may sell a trailer in conjunction with the sale of a vessel at a fair, exposition, or similar exhibit without securing a branch license if the display does not exceed 30 days.

§ 11709.1