4. a. A motor vehicle subject to the provisions of this act may be impounded by any law enforcement officer if the registrant:
(1) knowingly permits an unlicensed driver to operate that motor vehicle;
(2) operates or permits the operation of that motor vehicle without a valid temporary registration or valid temporary registration plates as authorized under section 3 of P.L.1995, c.286 (C.39:3-40.2); or
(3) fails to surrender a registration certificate and registration plates in accordance with the provisions of subsection b. or c. of section 2 of P.L.1995, c.286 (C.39:3-40.1).
A motor vehicle impounded under the provisions of this subsection shall be removed to storage space or garage and its registration certificate and registration plates seized. The registrant shall be responsible for the cost of the removal and storage of the impounded motor vehicle.
b. (1) If the registrant fails to claim the motor vehicle and pay the reasonable costs of removal and storage by midnight of the 30th day following impoundment, along with a fine of $50 to cover the administrative costs of the municipality wherein the violation occurred, the municipality may sell the motor vehicle at public auction. The municipality shall give notice of the sale by certified mail to the registrant of the motor vehicle and to the holder of any security interest filed with the director, and by publication in a form to be prescribed by the director by one insertion, at least five days before the date of the sale, in one or more newspapers published in this State and circulating in the municipality in which the motor vehicle has been impounded.
(2) At any time prior to the sale, the registrant or other person entitled to the motor vehicle may reclaim possession of it upon payment of the reasonable costs of removal and storage of the motor vehicle and any outstanding fines or penalties; provided, however, if the other person entitled to the motor vehicle is a lessor or the holder of a lien on the motor vehicle, he may reclaim the motor vehicle without payment. In such cases, the violator shall be liable for all outstanding costs, fines and penalties, and the municipality shall have a lien against the property and income of that violator for the total amount of those outstanding costs, fines and penalties.
(3) Any proceeds obtained from the sale of a motor vehicle at public auction pursuant to paragraph (1) of this subsection in excess of the amount owed to the municipality for the reasonable costs of removal and storage of the motor vehicle and any outstanding fines or penalties shall be returned to the registrant of the vehicle.