Wis. Admin. Code Trans § Trans 140.027

Current through November 25, 2024

Section Trans 140.027 - Criteria for supplemental security

(1) AMOUNT. The department may require supplemental bonds of motor vehicle dealers or wholesalers according to their annual vehicle sales and their total points in the current licensing period. The department shall provide a licensee or applicant written notice of the requirement for supplemental security. The department may require supplemental securities of applicants for such licenses according to the department's estimates of their annual retail vehicle sales and their total points for the licensing period for which the application is made. The department may determine or estimate points and annual vehicle sales according to subs. (2) and (3). Bonds shall be in the amounts described in the following table:

SUPPLEMENTAL BOND CALCULATION
Number of points	1	2	3	4	5	6 or more
Number of vehicles sold at retail per year
0-249	5,000	10,000	15,000	20,000	25,000	30,000 to 50,000
250-999	15,000	23,000	30,000	38,000	45,000	55,000 to 75,000
1,000 and above	25,000	35,000	45,000	55,000	65,000	75,000 to 100,000

(2) DETERMINING POINTS.

(a)General. The department may assess points against a licensed dealer or wholesaler, or an applicant for a license, who has violated any provisions in ss. 218.0101 to 218.0163, Stats., or rules interpreting ss. 218.0101 to 218.0163, Stats., that constitute grounds for the suspension or revocation of their license. The department may also assess points against a licensed dealer, wholesaler, or an applicant for a license when the department has reasonable cause to doubt the licensee or applicant's financial responsibility or solvency. The department shall provide a licensee or applicant written notice of a point assessment. Written notice of a point assessment shall specify the reasons for the point assessment, including the issuance of a complaint to revoke or suspend a license, a written stipulation to a conditional license, a civil forfeiture complaint or citation, notice of denial of a license, and a special order issued by the division of hearings and appeals. All points assessed by the department shall remain in effect for the duration of the current licensing period, and any new point assessments shall be added to the existing point total for that licensee throughout the current licensing period.

(b)Effect of point assessments from previous licensing period. The department may assess additional points or carry over points to a new licensing period under the following conditions:

1. The department may assess additional points for current violations when point assessments in previous licensing periods demonstrate a pattern of violations or repeat offenses.

2. The department may carry over point assessments from one licensing period to the next period for which a dealer or wholesaler makes application if a significant share of the licensee's or applicant's ownership or employees includes persons who were assessed points, or who were directly involved in violations causing points to be assessed, when they were last licensed by the department.

(c)Appeals to eliminate point accumulations. A licensee may, after 12 months of posting additional security, submit to the department evidence of eliminating the compliance or financial problems cited by the department when it assessed points, and ask that the department reduce or eliminate the licensee's current points. The licensee may submit only one request regarding the same point assessments during the licensing period. -

(d)Point assessments. The department may assess points according to the following table:

Grounds for assessing points	No. of points per violation
ss. 218.0114(1), (4), (5), and (20), 218.0116(1) (d) and (p), 342.06(2), 342.16(1m), 347.415, Stats.	4-6
s. 218.0116(1) (bm), (c), (cm), (dm) to (f), (gm), (im) 2., (j), and (m), Stats., where the department has estimated that the loss to the consumer was greater than $500	4-6
s. 218.0116(1) (bm), (c), (cm), (dm) to (f), (gm), (im) 2., (j), and (m), Stats., where the department has estimated that the loss to the consumer was less than or equal to $500	1-3
Other provisions of ss. 218.0101 to 218.0163, Stats., not specifically listed in this table	1-3
s. 218.0116(1) (a), Stats., where the department has found financial insolvency or irresponsibility as demonstrated by:
Ratio of current assets to current liabilities is less than 1.25 but greater than or equal to 1.00	1-3
Total assets exceed total liabilities, but by less than 35 percent	1-3
Ratio of current assets to current liabilities is less than 1.00; or negative net worth	6
Other indications of financial insolvency or irresponsibility not specifically listed in the table	1-3
s. 218.0116(1) (a), Stats., where the department has found financial insolvency or irresponsibility as demonstrated by:
Ratio of current assets to current liabilities is less than 1.25 but greater than or equal to 1.00	1-3
Total assets exceed total liabilities, but by less than 35 percent	1-3
Ratio of current assets to current liabilities is less than 1.00; or negative net worth	6
Other indications of financial insolvency or irresponsibility not specifically listed in the table	1-3

(3) DETERMINING ANNUAL VEHICLE SALES. For the purpose of using the table in sub. (1), the number of vehicles sold per year may be defined as any of the following:

(a) Total number of motor vehicles sold at retail during the previous 12 months from the date requested by the department, the most recent calendar year, the most recent fiscal year when the dealer had been licensed, or the most recent year represented on the licensee's application, at the discretion of the department.

(b) Projected number of motor vehicles to be sold at retail during the next 12 months, based on the business' most recent quarterly sales.

(c) Projected number of motor vehicles to be sold at retail during the next 12 months, based on the best information available to the department.

(4) APPEALS.

(a) A person adversely affected by any of the following actions may request an informal hearing from the department before the action becomes effective:

1. The issuance of written notice assessing points under this section.

2. The issuance of written notice requiring supplemental security under this section.

(b) A request for informal hearing on an action under par. (a) shall be made in writing and shall be filed with the department within 10 days after the licensee or applicant receives notice of the department's action.

(c) If the department receives a written request for an informal hearing, the department shall conduct a prompt informal hearing before a department employee or official who was not personally involved in the investigation or decision to take the action, and who has the authority to withdraw, modify or correct the action as necessary. The informal hearing shall be conducted within 10 business days after a request for informal hearing is received by the department, unless the person requesting the informal hearing agrees to a later date. An informal hearing may be conducted by telephone or at the department's offices.

(d) Within 5 business days after the conclusion of an informal hearing, the department shall issue a brief written memorandum which summarizes the informal hearing, and any decision or action resulting from the informal hearing. A copy of this memorandum shall be provided to the person requesting the informal hearing.

(e) The department's decision is final, and no further appeals may be submitted or considered.

Wis. Admin. Code Department of Transportation Trans 140.027

Cr. Register, February, 1996, No. 482, eff. 3-1-96; corrections in (2) (a), (d) made under s. 13.92(4) (b) 7, Stats., Register March 2012 No. 675.

If the department initiates an action to deny, suspend, or revoke a license because of failure to obtain supplemental security, the affected licensee or applicant is entitled to a full evidentiary hearing before the division of hearings and appeals, pursuant to subch. I of ch. 227, Stats.