(1) The holder of a provisional license shall be granted the same rights and privileges as are granted to the holder of an official inspection station license, except that the Commissioner may suspend a provisional license for the same reasons that an official inspection station license is subject to suspension for a violation or violations of this Part or of sections 303 or 306 of the vehicle and traffic law. If the provisional license is suspended pursuant to the provisions of this paragraph, the Commissioner shall provide the provisional licensee with actual notice of the suspension at least seven calendar days prior to the effective date. The holder of the provisional license shall not be entitled to an appeal or hearing if such provisional license is suspended. The holder of a provisional license shall be subject to the same rules and regulations that apply to the holder of an official inspection station license, except if such rules and regulations are inconsistent with the provisions of this subdivision.

(2) The holder of a provisional license who has purchased or acquired, or who plans to purchase or acquire, the place of business from a registered new motor vehicle dealer:

(i) shall not conduct inspections in the name of the selling or transferring new motor vehicle dealer;

(ii) shall not use any unused certificate of inspection that had been issued to the selling or transferring registered new motor vehicle dealer by the Department;

(iii) shall display the provisional license in a conspicuous manner.

(3) If a new motor vehicle dealer with a provisional license purchases or acquires a place of business from a registered new motor vehicle dealer, then within thirty business days of the issuance of the provisional license, the dealer must ensure that the official inspection station license and all unused certificates of inspection that had been issued to the selling or transferring inspection station are surrendered to the Department or are accounted for.

(4) If the Commissioner has suspended a provisional license, or if a provisional license has expired, and the dealer that held such provisional license has not obtained a valid official inspection station license, then all official inspection station operations at that location shall immediately cease, and the dealer shall surrender the provisional license, and all unused certificates of inspection to the Department.

(5) The holder of a provisional license must meet all of the remaining requirements for the issuance of an official inspection station license within thirty days of the issuance of the provisional license.

(6) The provisional license shall expire sixty days from the date of issuance of such license or when the Department completes its investigation related to the application for an inspection station license, whichever is later.

(7) The holder of a provisional license must notify the Department immediately if the opening of the dealership is cancelled and such holder must return all supplies within ten days.

1. Statutory authority: Section 215(a) of the Vehicle and Traffic Law (VTL) authorizes the Commissioner to promulgate regulations which regulate and control the exercise of the powers of the Department of Motor Vehicles (DMV). VTL Section 302(a) authorizes the Commissioner to administer the provisions of Article V, Periodic Inspection of Motor Vehicles. VTL Section 302(e) authorizes the Commissioner to make reasonable rules and regulations to administer Article V. VTL Section 303(a)(1) authorizes the Department of Motor Vehicles to collect evidence as may be required to ascertain the identity, qualifications, and character of the applicant for an inspection station license. VTL Section 303(a)(2) authorizes the Commissioner to issue a temporary permit to any applicant for an inspection station license pending final action on an application for such a license. VTL Section 415(3) authorizes the Commissioner to issue registrations to new motor vehicle dealers. VTL Section 415(5) authorizes the Commissioner to obtain all necessary information from an applicant for a new dealer registration.

2. Legislative objectives: The Legislature enacted Article 16 of the Vehicle and Traffic Law, Registration of Dealers and Transporters, to protect consumers from fraudulent business practices and to assist the dealers in the sale of motor vehicles. This proposed rule accords with the legislative objectives by assisting new motor vehicle dealers who purchase a place of business from another dealer to obtain a provisional registration from DMV and, therefore, immediately commence the sale of motor vehicles. In addition, since the holder of a provisional registration must comply with the Commissioner’s regulations, consumers who purchase vehicles from such dealer will be afforded the protections provided for in such regulations.

The Legislature enacted Article 5 of the Vehicle and Traffic Law, Periodic Inspection of Motor Vehicles, to protect consumers from fraudulent practices and to assist inspection stations in the inspection of motor vehicles. The proposed rule, in association with the amendments to Part 78, will permit a new motor dealer that has obtained a provisional registration to immediately sell and inspect motor vehicles to the public. This enhances the business opportunities for the dealers, while protecting the public that purchases vehicles from such dealers.

3. Needs and benefits: The proposed regulation provides that when a new motor vehicle dealer transfers a place of business to a new motor vehicle applicant, DMV may issue a provisional dealer registration and provisional inspection station license to such applicant pending a full investigation of the applications by the Department. In addition to meeting the Department’s requirements regarding an application for a new dealer’s license, such applicant must meet the automobile manufacturer’s stringent requirements for the sale and transfer of the business. The issuance of the provisional registration and license will permit the dealer-applicant to seamlessly commence business operations while DMV processes its application.

When a new motor vehicle dealer applies for a registration and license, DMV’s Office of Vehicle Safety must review extensive paperwork and make an on-site visit to the place of business before approving the application. This prevents the new business from selling vehicles, to its fiscal detriment. By granting the dealer–applicant a provisional registration, the applicant may sell vehicles while DMV conducts its investigation. By granting a provisional inspection station license, such dealer will be able to inspect the vehicles and consummate the sale. The public will be protected because the dealer/inspection station-applicant must comply with the Commissioner’s regulations and if such dealer/inspection station-applicant violates the regulations, its registration/license will be suspended.

In sum, these proposed regulations would benefit a vital business in the State by providing for the seamless transfer of a business from one dealer to another, while maintaining vigorous consumer protections.

4. Costs: a. to regulated parties: Applicants for an original dealer registration must pay the statutory fee of $37.50. (VTL Section 415(6)) This fee would be paid by applicants for the provisional registration. Applicants for a provisional inspection station license would pay the statutory fee of $25. (VTL Section 303(a)(1))

b. Costs to the agency/local governments: There shall be minimal costs to the DMV to produce a paper provisional registration/inspection document. Since this is not a DMV fee, there are no changes required to DMV forms or systems. There are no costs to local governments.

c. Source: DMV’s Office of Vehicle Safety.

5. Local government mandates: There are no local government mandates associated with this proposal.

6. Paperwork: An applicant shall file an application in such form and detail as the Commissioner shall prescribe, and will do so concurrently with the Original Facility/Inspection Station Application. The additional application will not duplicate information provided on the Original Facility/Inspection Station Application, unless absolutely necessary.

7. Duplication: This rule does not duplicate any State or Federal regulation.

8. Alternative: The Department weighed the pros and cons of issuing a provisional registration/license document and determined that the benefits to industry outweighed any additional work for the Department.

9. Federal standards: This rule does not exceed any minimum standards of the Federal government.

10. Compliance: Immediate.

1. Effect of rule: These proposed regulations would affect only new motor vehicle dealers. It has no impact on local governments. In calendar year 2011, DMV’s Office of Vehicle Safety approved 48 original facility applications for new motor vehicle dealers. Therefore, the amendment is expected to affect approximately 50 dealers per year.

2. Compliance requirements: New motor vehicle dealer applicants would be required to apply to the Commissioner for a provisional dealer registration and provisional inspection station license in accordance with the Commissioner’s procedures.

3. Professional services: This regulation would not require new professional services.

4. Compliance costs: Applicants for an original dealer registration must pay the statutory fee of $37.50. (VTL Section 415(6)) This fee would be paid by applicants for the provisional registration. Applicants for the provisional inspection station license would pay the statutory fee of $25. (VTL Section 303(a)(1))

5. Economic and technological feasibility: This proposal adds no new economic or technological requirements on new motor vehicle dealers.

6. Minimizing adverse impact: This proposal has no adverse impact on new motor vehicle dealers. In fact, it will help such dealers to seamlessly transfer business operations while continuing to sell motor vehicles.

7. Small business and local government participation: The Department canvassed the following associations for comment. They include: The Eastern New York Coalition of Automotive Retailers, Inc (ENYCAR), the Greater New York Automobile Dealers Association (GNYADA), the New York State Automobile Dealers Association, Inc (NYSADA, the Rochester Automobile Dealers Association (RADA), the Syracuse Automobile Dealers Association (SADA), Niagara Frontier Automobile Dealers Association (NFADA).

A Rural Area Flexibility Analysis is not attached because this rule will not impose any adverse economic impact or reporting, recordkeeping or other compliance requirements on public or private entities in rural areas.

A Job Impact Statement is not submitted with this proposed regulation because it has no negative impact on job creation or development in the State.