REDLINE
Proposed Revised Regulation 12-6-104(3)(a)
Statement of Authority, Basis and Purpose

Statutory Authority:  Colorado Revised Statutes, Sections 12-6-101, 12-6-102, 12-6-103, 12-6-104, and 12-6-105.

Basis and Purpose:  To delegate authority to the executive secretary with respect to the board’s rule-making activities under the State Administrative Procedure Act.

PROPOSED REVISED REGULATION:

Regulation 12-6-104(3)(a)

The executive director and his agents or employees shall have the authority to carry out ministerial acts involving the enforcement of rules and regulations as specifically delegated by the Motor Vehicle Dealer Board.

The board delegates to the board’s executive secretary and his or her agents the authority to assist the board in rule-making under the State Administrative Procedure Act, part 1 of article 4 of title 24, by performing all administrative acts.

REDLINE
Proposed Revised Regulation 12-6-104(3)(d)(II)
Statement of Authority, Basis and Purpose

Statutory Authority:  Colorado Revised Statutes, Sections 12-6-101, 12-6-102, 12-6-103, 12-6-104, 12-6-105, 12-6-108, 12-6-108.5, 12-6-109, and, 12-6-110,

Basis and Purpose:  In recognition of statutory changes in 2017, to set out clearly those persons whom the board authorizes to issue licensure documents for licenses approved by the board.

PROPOSED REVISED REGULATION:

Regulation 12-6-104(3)(d)(II)

The Board delegates to the Executive Secretary and the Auto Industry Division, the authority to approve and issue all licenses within the authority of the Board in accordance with guidelines established by the Board.

The board authorizes the director, the executive director, and the agents of the director or executive director, to issue, according to the board’s rules, any license within the board’s authority.

REDLINE
Proposed Deletion of Regulation 12-6-104(3)(f)(I)
Statement of Authority, Basis and Purpose

Statutory Authority:  Colorado Revised Statutes, Sections 12-6-101, 12-6-102, 12-6-103, 12-6-104, 12-6-105, 12-6-108, 12-6-118, and, 12-6-119.5, 12-6-121.5.

Basis and Purpose:  	Based upon statutory changes in 2017 as a result of the Sunset review of the agency, this rule is no longer needed.

PROPOSED DELETION OF REGULATION:

Delete Regulation 12-6-104(3)(f)(I), which currently reads:

The Board delegates to the Executive Director or the Executive Director's designee the authority to initiate investigations of complaints filed under the jurisdiction of the Board with the Auto Industry Division, or initiated by the Board, pursuant to and in accordance with guidelines approved by the Board.

REDLINE
Proposed Deletion of Regulation 12-6-104(3)(o)
Statement of Authority, Basis and Purpose

Statutory Authority:  Colorado Revised Statutes, Sections 12-6-101, 12-6-102, 12-6-103, 12-6-104, 12-6-105, 12-6-108, 12-6-118, and 12-6-119.5.

Basis and Purpose:  	Based upon the clear language of the relevant statutes, this rule is not needed.

PROPOSED DELETION OF REGULATION:

Delete Regulation 12-6-104(3)(o), which currently reads:

When considering whether to impose a fine and the amount of the fine, or other administrative penalty, the Board will consider aggravating and mitigating circumstances, the degree of harm to a motor vehicle purchaser, severity of offense, and whether there is a pattern of violations or repeat offenses.

REDLINE
Proposed Revised Regulation 12-6-104(4)
Statement of Authority, Basis and Purpose

Statutory Authority:  Colorado Revised Statutes, Sections 12-6-101, 12-6-102, 12-6-103, 12-6-104, 12-6-105, 12-6-108, 12-6-116, 12-6-118, and 12-6-119.

Basis and Purpose:  To clarify the board’s process to determine the appropriate sanctions to assess against a licensee that the board has determined violated provisions of law and regulation under the board’s jurisdiction.

PROPOSED REVISED REGULATION:

Regulation 12-6-104(4)

The Motor Vehicle Dealer Board shall apply administrative penalties in the cases it considers based upon the following compliance and enforcement standards: 

1.	All matters brought to the board for hearing shall be presented either electronically or in written hard copy by sworn affidavit asserting probable cause to believe that the events set forth in the affidavit constitute a violation of regulation or law which the board is empowered to enforce.
 
2. 	The investigation section of the Auto Industry Division in accordance with guidelines established in cooperation with the board will determine whether or not the results of an investigation shall be referred to the board by affidavit.
 
3. 	Except as otherwise provided for in this regulation, no complaint shall be referred to the board by the division until such time as the division has considered the licensee’s response to the complaint, if any, and has substantially completed its investigation into the matters alleged.
 
4. 	A matter shall be referred to the board whenever the following conditions are met:
 
(a) 	When the licensee has engaged in a pattern of violations. A pattern for this purpose is defined as 2 or more founded complaints occurring within the preceding 12 months. No matter resolved by a licensee based upon the 10 day letter program of the division shall be considered for the purpose of establishing a pattern pursuant to this provision.
 
(b) 	When a licensee’s conduct appears to the division to be willful and deliberate or the licensee’s continued conduct presents a clear and present danger to the public health, safety or welfare.
 
(c) 	When the licensee and the complainant are unable to reach an acceptable resolution of an actionable complaint or when a licensee fails to present a reasonable offer to resolve a complaint.
 
(d) 	When the division determines that the conduct of any licensee is such that it cannot properly be corrected without the intervention of the board.

5. 	Upon presentation to the board of a matter by the division the board shall dispose of all such matters upon its review and evaluation of the affidavit of probable cause by:

(a) 	The board may accept the case for hearing and appoint itself upon unanimous vote, an administrative law judge or a hearings officer to hear the matter, as is appropriate. In all such cases the board shall refer the case to the attorney general for the commencement of formal disciplinary proceedings, drafting of notice of hearing and notice of charges and prosecution of the case.
 
(b) 	The board may direct the executive secretary to propose a resolution of the matter to the licensee, to attempt to enter into a stipulated disposition of the matter or to otherwise resolve the matter without a formal hearing.
 
(c) 	The board may refer the matter to another agency if appropriate.
 
(d) 	The board may refer the matter back to the division for further investigation without taking any further action at that time.
 
(e) 	The board may determine not to exercise any authority over the matter and advise the division that it declines to take any action and defers to the civil remedies provisions found in section 12-6-122 C.R.S.
 
6. 	The board shall, from time to time and as is appropriate and necessary agree with the division to create and update compliance and investigation guidelines to be used by the division for evaluating matters prior to referring them to the board. 

7. 	The board shall impose administrative penalties based upon its discretion except that it may not exercise any discretion with regard to mandatory disqualifying terms and conditions established by statute. Upon exercising its discretion the board shall consider the licensee’s history with the board and the impact of any monetary fine on the licensee’s ability to restore any victim to the status quo. 

8. 	Fines imposed by the board shall be punitive and not compensatory.
 
9. 	The board may reduce any fine it imposes upon a licensee by any amount said licensee pays to victims in order to restore the financial loss suffered by victims subjected to the conduct of the licensee which conduct is the subject matter giving rise to the fine imposed by the board. 
10. 	Any licensee appearing before the board for imposition of an administrative penalty for the first time shall be subject to 50% of the fining authority of the board (or its designee) as provided for in article 6, of title 12, CRS. In addition, the board shall also consider mitigating and aggravating factors when imposing administrative penalties.
 
11. 	Any licensee appearing before the board for imposition of an administrative penalty for a second time on the same or similar offense within a 24 month period shall be subject to at least 75% of the fining authority of the board (or its designee) as provided for in article 6, of title 12, CRS. In addition, the board shall also consider mitigating and aggravating factors when imposing administrative penalties. 

12. 	Any licensee appearing before the board for imposition of an administrative penalty for a third or more occurrence of any fineable offense within a 24 month period shall be subject to the full fining authority of the board (or its designee) as provided for in article 6, of title 12, CRS. In addition, the board shall also consider mitigating and aggravating factors when imposing administrative penalties.

The board shall use the following criteria to determine the appropriate sanctions for a licensee in a disciplinary case:

(a)	Whenever a provision of part 1 of article 6 of title 12 mandates a specific sanction for either (1) a specific type of violation or (2) a specific circumstance related to a specific violation, the board shall apply the mandatory sanction when the findings of fact and conclusions of law establish the legal basis.

(b)	Whenever the legal basis for a mandatory sanction does not exist, the board shall exercise its discretion to determine the appropriate sanctions based not only upon the findings of fact and conclusions of law in the case but also upon a standardized approach that takes the following factors into account:

(1)	     the nature of the violation;
(2)	     the severity of the violation;
(3)	     the characteristics of the harm that the violation produced;
(4)	     the monetary harm that the violation produced;
(5)	     the licensee’s history of violations;
(6)	     the licensee’s compliance with prior board orders;
(7)	     any additional aggravating information; and,
(8)	any additional mitigating information, including, but not limited to the licensee’s voluntary, monetary remuneration to a victim.

(c)	Whenever the board considers a fine to be an appropriate sanction, it shall follow these restrictions:

(1)	the fine must be punitive, not compensatory; and,
(2)	the fine must not exceed any relevant limitations on the
                              amount of a fine as set out in part 1 of article 6 of title 12.

REDLINE
Proposed New Regulation 12-6-104(3)(f)(II)
Statement of Authority, Basis and Purpose

Statutory Authority:  Colorado Revised Statutes, Sections 12-6-101, 12-6-102, 12-6-103, 12-6-104, 12-6-105, 12-6-107, 12-6-108, 12-6-115, 12-6-116, 12-6-117, 12-6-118, and 12-6-119.

Basis and Purpose:  To clarify the board’s process when the division presents an affidavit of probable cause for disciplinary action to the board concerning a licensee’s activities that the division had investigated. 

PROPOSED NEW REGULATION:

Regulation 12-6-104(3)(f)(II)

Whenever the division refers evidence of a licensee’s alleged violations to the board in the form of an affidavit of probable cause, the board shall respond to the affidavit in the following manner:

(a) If the board does not find probable cause based upon its examination of the affidavit, the board shall do one of the following:
(1)	suspend its consideration of the matter with a request to the division to bring the matter back to the board with additional information; or,
(2)	inform the division that the board declines to prosecute the case.

(b)  If the board does find probable cause based upon its examination of the affidavit, it may:
(1)	decline to prosecute the case; or,
(2)	prosecute the case in the appropriate venue as follows:
(i) if the license class of the respondent is a salesperson, the board  shall assign the executive director or his or her appointee to hear the case; or,
(ii) if the license class of the respondent is other than a salesperson, the board shall assign the case for hearing either to the board, itself, or to the Office of Administrative Courts.

(c)   Whenever the board has decided to prosecute the case, it shall do the following:
(1)	turn the case over to the attorney general to begin prosecuting the case; or,
(2)	authorize the executive secretary to (i) attempt to negotiate a settlement of the case without a hearing and, (ii) if the settlement process is unsuccessful, turn the case over to the attorney general to begin prosecuting the case.

(d) Whether the board does or does not find probable cause based upon its examination of the affidavit, it may, if appropriate, refer the matter to another agency.