Trans 140.027(2)(b)(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: Trans 140.027(2)(b)1.1. The department may assess additional points for current violations when point assessments in previous licensing periods demonstrate a pattern of violations or repeat offenses. Trans 140.027(2)(b)2.2. 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. Trans 140.027(2)(c)(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. Trans 140.027(2)(d)(d) Point assessments. The department may assess points according to the following table: Trans 140.027(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: Trans 140.027(3)(a)(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. Trans 140.027(3)(b)(b) Projected number of motor vehicles to be sold at retail during the next 12 months, based on the business’ most recent quarterly sales. Trans 140.027(3)(c)(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. Trans 140.027(4)(a)(a) A person adversely affected by any of the following actions may request an informal hearing from the department before the action becomes effective: Trans 140.027(4)(a)2.2. The issuance of written notice requiring supplemental security under this section. Trans 140.027(4)(b)(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. Trans 140.027(4)(c)(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. Trans 140.027(4)(d)(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. Trans 140.027(4)(e)(e) The department’s decision is final, and no further appeals may be submitted or considered. Trans 140.027 NoteNote: 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. Trans 140.027 HistoryHistory: 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. Trans 140.028Trans 140.028 When financial information is required. Trans 140.028(1)(1) The department may require a motor vehicle dealer or any other business licensed under ch. 218, Stats., or any applicant for such licenses, to submit information relating to its financial standing, solvency, or responsibility under any one of the following circumstances: Trans 140.028(1)(a)(a) The department has reasonable cause to doubt the financial responsibility of the applicant or licensee. Trans 140.028(1)(b)(b) The department has reasonable cause to doubt the applicant or licensee’s compliance with ch. 218, Stats., or its related rules, where the violation constitutes grounds for suspension or revocation of a license. “Reasonable cause” includes a situation in which the licensee, applicant or employees of the licensee or applicant have been found by the department to have violated ch. 218, Stats., or rules interpreting ch. 218, Stats., anytime during the current or the immediately previous licensing period. Trans 140.028(2)(2) Failure to provide the financial information required under sub. (1) shall be grounds for denial or revocation of the license. Trans 140.028 HistoryHistory: Cr. Register, February, 1996, No. 482, eff. 3-1-96; correction in (1) (c) made under s. 13.92 (4) (b) 7., Stats., Register March 2012 No. 675. Trans 140.03(1)(1) If required by the department, licensees or applicants shall submit a balance sheet dated not more than 90 days prior to the date of submission, that is prepared in accordance with generally accepted accounting principles. A small business as defined in s. 227.114, Stats., which does no interim financial reporting may submit a balance sheet from the close of the business’ most recent fiscal year. The balance sheet shall contain the following: Trans 140.03(1)(d)(d) The signature of one of the corporate officers, partners, or owners. Trans 140.03(1)(g)(g) A schedule of real property held, its fair market value, book value and the amount and terms of any indebtedness. Trans 140.03(3)(3) If the department determines that there has been a misstatement on a financial statement, the misstatement shall be grounds for denial or revocation of the license. Trans 140.03 NoteNote: Form MVD-2195 Financial Statement.
Trans 140.03 HistoryHistory: Cr. Register, March, 1985, No. 351, eff. 4-1-85; am. (1) (intro.), (e) and (g), Register, February, 1996, No. 482, eff. 3-1-96. Trans 140.04(1)(1) Valuation. The financial statement shall present assets in terms of historical cost or book value of assets. In lieu of a statement presented with historical cost of fixed assets or book value of assets, the department shall consider a statement presenting fair market value information of fixed assets if clearly labeled and accompanied by an appraisal report of a certified appraiser or tax appraisal. Trans 140.04(2)(2) Cash. Whenever a substantial portion of the assets of an entity is in the form of cash, confirmation of the amount is required from the financial institution holding the cash. Trans 140.04(3)(3) Receivables. When a substantial portion of the assets of an entity are in the form of receivables from another individual, partnership or corporation, all or part of the receivables shall be discounted in considering the net worth of the applicant. In order to evaluate the quality of a receivable, a financial statement from the individual, partnership or corporation may be required. In no case will the department discount factory receivables. Trans 140.04(4)(4) Inventory. The financial statement shall include the number of units in inventory and the number of units floor planned or used for loan collateral. A GAAP presentation of inventory values would not allow for the use of a reserve account for balance sheet information compiled for external purposes. As an exception to a GAAP presentation, the department will allow the use of a reserve account to accurately assess the value of inventory. Trans 140.04(5)(5) Certain assets not to be considered. The department shall not consider the following assets in evaluating the financial statement of an applicant: Trans 140.04(5)(e)(e) All other assets subject to prior liens, security agreements, or other pledges. Trans 140.04 HistoryHistory: Cr. Register, March, 1985, No. 351, eff. 4-1-85. Trans 140.05(1)(1) Reporting. All liabilities and contingent liabilities shall be reported. The terms, amount and conditions of any major liabilities shall be separately scheduled. This schedule should show the names of individuals or institutions who hold the debt, the amount of debt, and the terms of repayment. A list of customers and the amounts on deposit with the dealer should be attached to the financial statement. Trans 140.05(2)(2) Ratio analysis. A ratio analysis comparing current liabilities with current assets shall be used to evaluate a dealer’s financial potential. Current liabilities which exceed current assets may be grounds for the denial, suspension or revocation of a dealer’s license. Trans 140.05 HistoryHistory: Cr. Register, March, 1985, No. 351, eff. 4-1-85; am. (2), Register, February, 1996, No. 482, eff. 3-1-96. Trans 140.06(1)(1) Treasury stock. Treasury stock held by a corporation shall be reported separately on the balance sheet and clearly labeled as treasury stock. Trans 140.06(2)(2) Previous profit. Profit from the previous period of operations shall be reported separately in the net worth section of the balance sheet. Trans 140.06(3)(3) Negative net worth. A financial statement with a negative net worth is evidence of lack of financial ability to conduct business and the license shall be denied or revoked. Trans 140.06 HistoryHistory: Cr. Register, March, 1985, No. 351, eff. 4-1-85. Trans 140.07(1)(1) Sole proprietorships. A sole proprietorship may report the entire value of assets jointly owned by the sole proprietor and by one or more persons on its financial statement. The financial statement shall be signed by the sole proprietor. Trans 140.07 NoteNote: An example of a joint asset would be a home owned by the sole proprietor and the sole proprietor’s spouse.
Trans 140.07(2)(2) Partnerships. Partnerships shall submit a statement for the partnership as a whole and individual statements for each of the general partners. If the partnership agreement provides for anything other than an equal sharing by the partners, it shall be prominently noted on the statements. The provisions of sub. (1) relating to the listing of jointly owned assets also apply to this subsection. Trans 140.07(3)(3) Corporations. A financial statement is required for the corporation which will hold the license. A financial statement of a controlling corporation, parent corporation or an interlocking corporation may be submitted, but shall not be substituted for the financial statement of the applicant. Trans 140.07 HistoryHistory: Cr. Register, March, 1985, No. 351, eff. 4-1-85; 2013 Wis. Act 363: renum. (3) (a) to (3), r. (3) (b) Register May 2014 No. 701, eff. 6-1-14. Trans 140.08Trans 140.08 Copies required. Salvage dealers, motor vehicle wholesalers, and moped dealers shall file one copy of their financial statement with the department. All other dealers shall file their financial statements in duplicate. The department shall forward the duplicate copy to the co-licensor, the office of the commissioner of banking. Trans 140.08 HistoryHistory: Cr. Register, March, 1985, No. 351, eff. 4-1-85. Trans 140.09(1)(1) Operating statement. If required by the department, the applicant shall submit an income statement or other financial statement. The department may require a dealer to submit updated financial information during the license year if questions arise regarding the dealer’s financial condition. Trans 140.09(2)(a)(a) The following guidelines are used in determining the acceptable level of net worth of an applicant: Trans 140.09(2)(b)(b) The department may deny the license of an applicant who fails to meet the net worth criteria set out in par. (a). Trans 140.09 HistoryHistory: Cr. Register, March, 1985, No. 351, eff. 4-1-85; r. and recr. (2) (a), Register, February, 1996, No. 482, eff. 3-1-96; 2013 Wis. Act 363: am. (2) (a) Register May 2014 No. 701, eff. 6-1-14. Trans 140.20Trans 140.20 Definitions. The terms used in this subchapter shall have the same meanings as in ch. 218, Stats., except as specifically provided below: Trans 140.20(1)(1) “Claim arose against the bond or letter of credit of a licensee” means a situation in which a cause of action has accrued against the licensee. Unless otherwise provided by statute, a cause of action accrues where there exists a claim capable of present enforcement, a suable party against whom it may be enforced, and a party who has a present right to enforce it. A tort claim accrues when the injury is discovered or reasonably should have been discovered. Trans 140.20 NoteNote: See ch. 893, Stats., and cases thereunder, governing the applicable statutes of limitation, and determination of the date when a cause of action accrues. Trans 140.20(2)(2) “Commercial customer” means a private person who buys or agrees to buy one or more motor vehicles from the licensee for the person’s business or commercial use. A private person who sells, trades, or consigns to the licensee a motor vehicle used by the person primarily for business or commercial purposes is also a commercial customer. Trans 140.20(3)(3) “Financial institution” means any person or organization authorized to do business under any state or federal law relating to financial institutions, including, without limitation, banks and trust companies, savings banks, building and loan associations, savings and loan associations, credit unions and sales finance companies. A credit corporation or similar financing organization of a motor vehicle manufacturer, factory branch, distributor or dealer is a financial institution. Any person who floor plans motor vehicles is a financial institution. Trans 140.20(4)(4) “Floor plan” means to make a financing arrangement for the lending of money to a motor vehicle dealer so that he or she may purchase a motor vehicle to include in his or her inventory; the loan being secured by the motor vehicle while in the dealer’s possession and to be repaid when the motor vehicle is sold. Trans 140.20(5)(5) “Motor vehicle” shall have the same meaning as s. 218.0101 (22), Stats., and includes mobile homes as defined by s. 218.0114, Stats. For the purposes of this subchapter, a moped as defined by s. 218.40 (2), Stats., is also a motor vehicle.
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