Assembly Bill No. 221–Assemblymen Chowning, Buckley, Collins, Gibbons, McCleary, Anderson, Andonov, Angle, Arberry, Christensen, Claborn, Conklin, Giunchigliani, Goicoechea, Grady, Griffin, Gustavson, Hettrick, Horne, Knecht, Koivisto, Manendo, McClain, Mortenson, Oceguera, Parks, Perkins, Pierce, Sherer, Weber and Williams

 

CHAPTER..........

 

AN ACT relating to motor vehicles; requiring the consignee of a vehicle to obtain a signed disclosure statement from the consignor of a vehicle; requiring the consignee 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:

 

    Section 1. NRS 482.31776 is hereby amended to read as

follows:

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

into a consignment contract or other form of agreement to sell a

vehicle owned by another person [open] :

    (a) Open and maintain a separate trust account in a federally

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

state, into which the consignee shall deposit all money received

from a prospective buyer as a deposit, or as partial or full payment

of the purchase price agreed upon, toward the purchase or transfer

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

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

other money that is not on deposit or otherwise maintained toward

the purchase of the vehicle subject to the consignment contract or

agreement; or

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

operational expenses for any purpose that is not related to the

consignment contract or agreement.

    (b) Obtain from the consignor, before receiving delivery of the

vehicle, a signed and dated disclosure statement that is included in

the consignment contract and provides in at least 10-point bold

type or font:

IMPORTANT NOTICE TO VEHICLE OWNERS

State law (NRS 482.31776) requires that the operator of this

business file a Uniform Commercial Code 1 (UCC1) form with the

Office of the Secretary of State on your behalf to protect your

interest in your vehicle. The form is required to protect your

vehicle from forfeiture in the event that the operator of this

business fails to meet his financial obligations to a third party

holding a security interest in his inventory. The form must be filed

by the operator of this business before he may take possession of

your vehicle. If the form is not filed as required, YOU MAY LOSE

YOUR VEHICLE THROUGH NO FAULT OF YOUR OWN. For

a copy of the UCC1 form filed on your behalf or for more

information, please contact:

The Office of the Secretary of State of Nevada

Uniform Commercial Code Division

775.684.5708

I understand and acknowledge the above disclosure.

_________________                  _____

Consignee Signature  Date

    (c) Assist the consignor in completing, with respect to the

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

financial statement of the type described in subsection 5 of NRS

104.9317 and shall file the financial statement with the Secretary

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

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

property clause in the consignee’s inventory, the consignee

additionally shall assist the consignor in sending an authenticated

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

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

consignee must not receive delivery of the vehicle until the

consignee has:

        (1) Filed the financing statement with the Secretary of

State; and

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

authenticated notification to each holder of a conflicting security

interest.

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

consignee shall forthwith:

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

interests in the vehicle; and

    (b) Satisfy the financial obligations due the consignor pursuant

to the consignment contract.

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

or draft, or any other form of legal monetary exchange, or after any

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

the consignor that the money has been received or that a transfer of

interest in the vehicle has occurred. Notification by the consignee to

the consignor must be given in person or, in the absence of the

consignor, by registered or certified mail addressed to the last

address or residence of the consignor known to the consignee. The

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

which the money is received or the transfer of interest in the vehicle

is made.

    4.  The provisions of this section do not apply to [an executor,

an administrator, a sheriff or any] :

    (a) An executor;

    (b) An administrator;

    (c) A sheriff;

    (d) A salvage pool subject to the provisions of NRS 487.400 to

487.510, inclusive; or

    (e) Any other person who sells a vehicle pursuant to the powers

or duties granted to or imposed on him by specific statute.

    5.  Notwithstanding any provision of NRS 482.423 to 482.4247,

inclusive, to the contrary, a vehicle subject to a consignment

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

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

NRS 482.423 to 482.4247, inclusive, by displaying a temporary

placard to operate the vehicle unless the operation of the vehicle is

authorized by the express written consent of the consignor.

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

operated by the consignee, an employee or agent of the consignee,

or a prospective buyer in accordance with NRS 482.320 by

displaying a special plate unless the operation of the vehicle is

authorized by the express written consent of the consignor.

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

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

must include:

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

consignor;

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

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

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

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

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

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

other person known to have an interest in the vehicle;

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

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

was paid;

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

savings and loan association in which the consignee opened the trust

account required pursuant to subsection 1; and

    (j) The signature of the consignor acknowledging that the terms

of the consignment contract were fulfilled or terminated, as

appropriate.

    8.  A person who:

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

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

subsection 1 or otherwise subject to a consignment contract or

agreement is guilty of embezzlement and shall be punished in

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

other penalty, order the person to pay restitution.

    (b) Violates paragraphs (b) or (c) of subsection 1 is guilty of a

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

order the person to pay restitution.

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

misdemeanor.

 

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