§437-7 Application for issuance or renewal of license. (a) Any person desiring the issuance of a license under this chapter shall file an application therefor with the motor vehicle industry licensing board. Prior to the expiration of the term of a license, the holder shall file an application for renewal of the license. The board shall prescribe the form, information required, manner, and time for presentation of applications for issuance or renewal of licenses issued under this chapter, except as otherwise provided in this chapter.

(b) A person applying for a salesperson's license under this section shall be granted a temporary license by the executive officer of the board; provided no patent disqualification of the applicant is disclosed or no valid objection to the granting of the temporary license is apparent and if all requirements relative to the filing of the application appear to have been met and the dealer files a statement that this person is employed by and under the supervision of the dealer. A fee shall be charged for the issuance of the temporary license, as provided in rules adopted by the director of commerce and consumer affairs pursuant to chapter 91, and the license shall remain in effect until the board approves or denies the application for a permanent license.

(c) Requirements for financial reviews or financial statements shall be as follows:

(1) Applicants for the issuance of a dealer's or auction's license shall furnish the following financial review or financial statement to the board:

(A) An applicant proposing to operate as a sole proprietorship shall furnish a personal financial review or financial statement and a financial review or financial statement of the proposed business;

(B) An applicant proposing to operate as a partnership shall furnish a personal financial review or financial statement for each general partner and a financial review or a financial statement of the partnership; and

(C) A corporate applicant shall submit a corporate financial review or financial statement;

(2) The board shall determine and prescribe the requirement of, form, and information required in financial reviews and financial statements for applicants for other licenses;

(3) All financial reviews and financial statements shall be certified as to accuracy by a public or certified public accountant; and

(4) The purpose of the financial review and the financial statement is to provide the board with information to assist it in determining the financial capability and integrity of the applicant.

(d) Requirement for lines of credit shall be as follows:

(1) Applicants for issuance of a dealer's license shall obtain an inventory or flooring line of credit from a federally insured financial institution or from a financing source having a net worth of at least $50,000,000. The line of credit shall be in the following amount:

(A) For new motor vehicle dealer applicants, $500,000 or the amount required in the applicant's dealer sales and service agreement, whichever is less;

(B) For used motor vehicle dealer applicants, $50,000; and

(C) For new and used motorcycle and motor scooter dealer applicants, $50,000;

(2) Applicants for issuance of a dealer's license shall provide the board with a photocopy of the financing statement filed at the bureau of conveyances of the department of land and natural resources, securing the line of credit;

(3) Applicants for the issuance of an auction license shall obtain a secured line of credit in the amount of $100,000 from a federally insured financial institution; and

(4) When an inventory or flooring line of credit cannot reasonably be obtained by a dealer, the board may provide that a bond, in an amount set forth in the board's rules, be obtained as an alternative form of security for the inventory or flooring line of credit.

(e) Applicants for issuance of an auction license shall provide a written statement from a federally insured financial institution verifying that the applicant has a customer trust account for the auction with that financial institution.

(f) All applicants for the issuance of a manufacturer's or distributor's license shall submit:

(1) If the manufacturer or distributor is publicly traded, a financial statement signed by a certified public accountant or an annual report;

(2) A copy of the executed agreement granting the distributor applicant the franchise to distribute motor vehicles in this State;

(3) If the applicant is the manufacturer of the motor vehicles to be distributed, a certified statement to this effect;

(4) Any other documents or information that may be provided for in rules adopted by the director of commerce and consumer affairs pursuant to chapter 91; and

(5) The following fees, which shall apply until fees are adopted by the director under this subsection in accordance with chapter 91:

(A) Nonrefundable application fee: $50;

(B) Original license fee: $500;

(C) Annual compliance resolution fund fee: $250 for each dealer franchised by the manufacturer or distributor;

(D) Biennial compliance resolution fund fee: $500 for each dealer franchised by the manufacturer or distributor; and

(E) Verification or duplicate fees as provided in title 16, Hawaii Administrative Rules, chapter 53.

The nonrefund provisions of section 16-53-4, Hawaii Administrative Rules, shall apply to fees under this subsection. Application fees for a new salesperson's license shall be a lesser amount than the fee for other licenses issued under this chapter.

(g) Upon the filing of any application, a staff member shall endorse on it the date of filing. If no patent disqualification of the applicant is disclosed or no valid objection to the granting of the application is apparent and if all requirements relative to the filing of the application appear to have been complied with, the chairperson of the board or executive officer shall review a self-inspection report completed by the applicant and made a part of the application. The report shall include:

(1) A statement that the applicant is not disqualified by this chapter from obtaining or exercising a license and has complied with all the requirements of this chapter relative to the making and filing of the licensee's application;

(2) Information relating to any and all other matters and things which pertain to or affect the matter of the application or the issuance or the exercise of the license applied for;

(3) In the case of an application for a dealer's or auction's license the applicant shall submit a report which shall include:

(A) A description of the premises intended to become the licensed premises, and the equipment and surrounding conditions; and

(B) If the applicant has held a prior dealer's or auction's license for the same or any other premises within two years past, a statement as to the manner in which the premises have been operated and the business conducted under the previous license; and

(4) In the case of an application for a dealer's license, if the applicant proposes to engage in the business of selling new motor vehicles, a copy of the dealer sales and service agreement from the applicable manufacturer or distributor.

(h) After the filing of the application, the board may interview the applicant and upon the interview and other information that is before the board, it may grant or deny the license.

(i) No dealer's or auction's license shall be issued under this chapter unless and until the applicant submits:

(1) A description of the premises intended to become the licensed premises, the office facilities, equipment, and surrounding conditions;

(2) A statement that the applicant has met the requirements under section 437-11;

(3) A copy of a minimum one-year lease or rental agreement for the site the applicant has entered into; and

(4) Photographs of the premises and facilities;

and the board is satisfied that the applicant has met all the requirements as provided in this chapter and that all other general conditions and proposed methods of operation under the license are such as are suitable for carrying on the business in a reputable manner.

(j) Limitations on licenses shall be as follows:

(1) A dealer's or auction's license issued under this chapter shall authorize the doing of the business at the licensed premises, the boundaries of which shall be determined by the map or plan submitted together with the application for license approved by the board; except in the case of an enlargement or reduction of the licensed premises with the approval of the board endorsed on an amended map or plan; and

(2) A license issued under this chapter shall authorize the doing of a business thereunder only for the county in which the license has been issued; and in the case of a salesperson, the license shall authorize the salesperson to be a salesperson only for the dealer named in the application for a license or an amended license.

(k) A used motor vehicle dealer's license shall authorize the holder to sell new motorcycles and motor scooters if the licensee is franchised therefor.

(l) The executive officer may grant preliminary approval of a dealer or auction license application if all licensing requirements have been met. The board shall ratify all preliminary approvals. [L 1939, c 258, §12; RL 1945, §7365; am L 1951, c 90, pt of §1; RL 1955, §160-164; am L 1957, c 302, §1(4), (5); am L 1963, c 199, §1f; HRS §437-7; am L 1969, c 263, §1(8); am L 1974, c 102, §1; am L 1977, c 134, §2; am L 1984, c 7, §§2, 3; gen ch 1985; am L 1992, c 153, §3 and c 202, §28; am L 1993, c 265, §1; am L 1996, c 264, §5; am L 1997, c 38, §§1, 2 and c 40, §2; am L 2003, c 126, §6]