COLUMBIA, S.C. (AP) - The state Department of Motor Vehicles is inquiring about the decision by a Columbia car dealer to loan a car to Gov. Mark Sanford's spokesman last month.

The 2001 red Corvette convertible had dealer tags, which are strictly limited by state law.

"We're reviewing the issue and taking the appropriate action," DMV spokeswoman Beth Parks said Wednesday. "There's a case open" and it has been assigned to an agent to review, she said.

Inappropriate use of a dealer license plate can result in a $300 fine and the forfeiture of the plate.

Car dealer J.T. Gandolfo owns Dodgeland of Columbia and was appointed by Sanford in 2002 to lead a task force charged with overhauling the agency that licenses drivers and vehicles.

Gandolfo sold a car to Sanford's spokesman Will Folks in December. Folks said part of that deal included receiving new tires for the car at a later date.

Last month, when Folks took his car in for the new tires, Gandolfo loaned Folks the $36,000 Corvette. Folks drove the car from May 21-28.

State law says dealer plates "may be used exclusively on motor vehicles owned by, assigned or loaned for test driving purposes to the dealer when operated on the highways of this state by the dealer, its corporate officers, its employees or a prospective purchaser of the motor vehicle."

Gandolfo, known in the Midlands for his campy TV ads, did not immediately return a phone call Wednesday seeking comment on the DMV inquiry. He said Tuesday that Folks wasn't a prospective buyer.

Gandolfo told The Associated Press he was aware of the law limiting how dealer tags can be used and said that he generally doesn't allow customers to use cars with dealer tags while their personal vehicles are in for repairs.

Despite his involvement in revamping DMV last year, Gandolfo "is not involved in anything we're doing at DMV right now," Parks said. He is "not involved in our day-to-day operations or anything like that," she said.

Gandolfo said since the task force work was completed, he's had conversations with the Sanford administration only on plans to move DMV headquarters to Blythewood.

Folks, it appears, did nothing illegal by borrowing the car and did not violate any state ethics rules. Although, some legislators questioned the appearance of a governor's staff member driving a car provided by a dealer that advises the governor.

Sanford's office said the governor would not comment on the situation.

Legislators said it may be time to look at tougher laws governing public employees and the gifts or favors they receive.

"We need tighter legislation to prevent high-ranking staff officials from being given valuable property," said Rep. John Graham Altman, R-Charleston.

Those types of things may "at least require reporting," said House Judiciary Chairman Jim Harrison, R-Columbia.

A ban on gifts would create a tangle unless presents from family and friends for birthdays and holidays are excluded, Harrison said, but gifts tied to someone's role in state government could be limited.