Bill Text: MI HB5391 | 2015-2016 | 98th Legislature | Introduced

---

Bill Title: Occupations; vehicles, dealers and repair facilities; issuance of vehicle dealer licenses; prohibit for residential locations. Amends sec. 248 of 1949 PA 300 (MCL 257.248).

Spectrum: Partisan Bill (Democrat 7-0)

Status: (Introduced - Dead) 2016-02-23 - Bill Electronically Reproduced 02/18/2016 [HB5391 Detail]

Download: Michigan-2015-HB5391-Introduced.html

---

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

HOUSE BILL No. 5391

February 18, 2016, Introduced by Reps. Darany, Plawecki, Yanez, Rutledge, Schor, Sarah Roberts and Chirkun and referred to the Committee on Regulatory Reform.

 

     A bill to amend 1949 PA 300, entitled

 

"Michigan vehicle code,"

 

by amending section 248 (MCL 257.248), as amended by 2004 PA 495.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 248. (1) The secretary of state shall not grant a dealer

 

license under this section until the secretary of state completes

 

an investigation is made of the applicant's qualifications under

 

this act, except that this subsection does not apply to license

 

renewals. a license renewal. The secretary of state shall make

 

conduct the investigation within 15 days after receiving the

 

application and make shall prepare a report on the investigation.

 

     (2) An applicant for a new vehicle dealer or a used or

 

secondhand vehicle dealer or broker license shall include a

properly executed bond or renewal certificate with the application.

 

If a renewal certificate is used, the bond is considered renewed

 

for each succeeding year in the same amount and with the same

 

effect as an original bond. The bond shall be in the sum amount of

 

$10,000.00 with good and sufficient surety to be approved by the

 

secretary of state. The bond shall indemnify or reimburse a

 

purchaser, seller, lessee, financing agency, or governmental agency

 

for monetary loss caused through fraud, cheating, or

 

misrepresentation in the conduct of the vehicle business whether

 

the fraud, cheating, or misrepresentation was made by the dealer or

 

by an employee, agent, or salesperson of the dealer. The surety

 

shall make indemnification or reimbursement for a monetary loss

 

only after a judgment based on fraud, cheating, or

 

misrepresentation has been is entered in a court of record against

 

the licensee. The bond shall also indemnify or reimburse the state

 

for any sales tax deficiency as provided in the general sales tax

 

act, 1933 PA 167, MCL 205.51 to 205.78, or use tax deficiency as

 

provided in the use tax act, 1937 PA 94, MCL 205.91 to 205.111, for

 

the year in which the bond is in force. The surety shall make

 

indemnification or reimbursement only after a final judgment has

 

been is entered in a court of record against the licensee. A dealer

 

or applicant who has furnished satisfactory proof that provides

 

proof that is satisfactory to the secretary of state that a bond

 

similar to the bond required by this subsection is executed and in

 

force is exempt from the bond provisions set forth in requirements

 

described in this subsection. The aggregate liability of the surety

 

shall not exceed the sum of the bond. The surety on the bond may

cancel the bond upon by giving 30 days' notice in writing to the

 

secretary of state of the cancellation at least 30 days before the

 

effective date of the cancellation and thereafter is not liable for

 

a breach of condition occurring after the effective date of the

 

cancellation.

 

     (3) An applicant for a new vehicle dealer or a used or

 

secondhand vehicle dealer license shall apply for not less than 2

 

dealer plates as provided by under section 245 and shall include

 

with the application the proper fee as provided by for those plates

 

under section 803.

 

     (4) As a condition precedent to the granting of a license, a

 

dealer shall file with the secretary of state an irrevocable

 

written stipulation, authenticated by the applicant, stipulating

 

and agreeing that legal process affecting the dealer, served on the

 

secretary of state or a deputy of the secretary of state, has the

 

same effect as if personally served on the dealer. This appointment

 

remains in force as long as the dealer has any outstanding

 

liability within this state.

 

     (5) A person shall not carry on or conduct the business of

 

buying, selling, brokering, leasing, negotiating a lease, or

 

dealing in 5 or more vehicles of a type required to be titled under

 

this act in a 12-month period unless the person obtains a dealer

 

license from the secretary of state authorizing the carrying on or

 

conducting of that business. A person shall not carry on or conduct

 

the business of buying, selling, brokering, leasing, negotiating a

 

lease, or dealing in 5 or more distressed, late model vehicles or

 

salvageable parts to 5 or more of those vehicles in a 12-month

period unless the person obtains a used or secondhand vehicle parts

 

dealer, an automotive recycler, or a salvage pool license from the

 

secretary of state or is an insurance company admitted to conduct

 

business in this state. A person shall not carry on or conduct the

 

business of buying 5 or more vehicles in a 12-month period to

 

process into scrap metal or store or display 5 or more vehicles in

 

a 12-month period as an agent or escrow agent of an insurance

 

company unless the person obtains a dealer license from the

 

secretary of state. A vehicle scrap metal processor who that does

 

not purchase vehicles or salvageable parts from unlicensed persons

 

is not required to obtain a dealer license. A person from another

 

state shall not purchase, sell, or otherwise deal in distressed,

 

late model vehicles or salvageable parts unless the person obtains

 

a foreign salvage vehicle dealer license from the secretary of

 

state as prescribed under section 248b. A person, including a

 

dealer, shall not purchase or acquire a distressed, late model

 

vehicle or a salvageable part through a salvage pool, auction, or

 

broker without a license as a salvage vehicle agent. The secretary

 

of state shall investigate and seek prosecution, if necessary, of

 

persons allegedly conducting a business without a license.

 

     (6) The application for a dealer license shall be in the form

 

prescribed by the secretary of state and shall be signed by the

 

applicant. In addition to other information as may be required by

 

the secretary of state, the application shall include all of the

 

following:

 

     (a) Name of The name of the applicant.

 

     (b) Location of The location of the applicant's established

place of business in this state, together with written verification

 

from the appropriate governing or zoning authority that the

 

established place of business meets all applicable municipal and

 

zoning requirements and is not a residential dwelling.

 

     (c) The name under which the dealer will conduct business. is

 

to be conducted.

 

     (d) If the business is a corporation, the state of

 

incorporation.

 

     (e) Name, If the business is a sole proprietorship or

 

partnership, the name, address, date of birth, and social security

 

number of each owner or partner; and, if the business is a

 

corporation, the name, address, date of birth, and social security

 

number of each of the principal officers.

 

     (f) The county in which the applicant will conduct business,

 

is to be conducted and the address of each place of business in

 

that county, and the applicant's certification for each place of

 

business in that county that the place of business is not a

 

residential dwelling. The secretary of state shall not grant a

 

dealer license under this section if any of the applicant's places

 

of business are residential dwellings.

 

     (g) If the dealer's business is the sale of new vehicles, are

 

to be sold, the make to be handled. or makes of those vehicles.

 

Each new vehicle dealer shall send with the application for license

 

a certification that the dealer holds a bona fide contract to act

 

as factory representative, factory distributor, or distributor

 

representative to sell at retail ......... (the make of vehicle to

 

be sold).

     (h) A statement of the previous history, record, and

 

associations of the applicant and of each owner, partner, officer,

 

and or director of the applicant. The statement shall be sufficient

 

to establish to the satisfaction of the secretary of state the

 

business reputation and character of the applicant.

 

     (i) A statement showing whether the applicant has previously

 

applied for a license, the result of the application, and whether

 

the applicant has ever been the holder of a dealer license that was

 

revoked or suspended.

 

     (j) If the applicant is a corporation or partnership, a

 

statement showing whether a partner, employee, officer, or director

 

has been refused a license or has been the holder of a license that

 

was revoked or suspended.

 

     (k) If the application is for a used or secondhand vehicle

 

parts dealer or an automotive recycler, it shall include all of the

 

following:

 

     (i) Evidence that the applicant maintains or will maintain an

 

established place of business.

 

     (ii) Evidence that the applicant maintains or will maintain a

 

police book and vehicle parts purchase and sales and lease records

 

as required under this act.

 

     (iii) Evidence of worker's compensation insurance coverage for

 

employees classified under the North American industrial Industry

 

classification system number 42114, entitled "motor vehicle parts

 

(used) merchant wholesalers" or under the national council on

 

compensation insurance National Council on Compensation Insurance

 

classification code number 3821, entitled "automobile dismantling",

and drivers", if applicable.

 

     (l) Certification A certification that neither the applicant

 

nor another person named on the application is acting as the alter

 

ego of any other person or persons in seeking the license. For the

 

purpose of As used in this subdivision, "alter ego" means a person

 

who that acts for and on behalf of, or in the place of, another

 

person for purposes of obtaining a vehicle dealer license.

 

     (7) A person shall apply separately for a dealer license for

 

each county in which business is to be conducted. Before moving 1

 

or more of his or her places of business or opening an additional

 

place of business, a dealer shall apply to the secretary of state

 

for and obtain a supplemental dealer license. , for which a fee

 

shall not be charged. A The secretary of state shall not charge a

 

fee for a supplemental dealer license and shall be issued issue a

 

supplemental dealer license only for a location, including a tent,

 

temporary stand, or any temporary quarters, that does not meet the

 

definition of an established place of business, within the county

 

in which the dealer's established place of business is located. A

 

dealer license entitles the dealer to conduct the business of

 

buying, selling, leasing, and dealing in vehicles or salvageable

 

parts in the county covered by the license. The dealer license

 

shall also entitle the dealer to conduct at any other licensed

 

dealer's established place of business in this state only the

 

business of buying, selling, leasing, or dealing in vehicles at

 

wholesale.

 

     (8) The secretary of state shall classify and differentiate

 

vehicle dealers according to the type of activity they perform. A

dealer shall not engage in activities of a particular

 

classification as provided in this act unless the dealer is

 

licensed in that classification. An applicant may apply for a

 

dealer license in 1 or more of the following classifications:

 

     (a) New vehicle dealer.

 

     (b) Used or secondhand vehicle dealer.

 

     (c) Used or secondhand vehicle parts dealer.

 

     (d) Vehicle scrap metal processor.

 

     (e) Vehicle salvage pool operator.

 

     (f) Distressed vehicle transporter.

 

     (g) Broker.

 

     (h) Foreign salvage vehicle dealer.

 

     (i) Automotive recycler.

 

     (j) Beginning April 1, 2005, wholesaler. Wholesaler.

 

     (9) A dealer license expires on December 31 of the last year

 

for which the license is issued. The secretary of state may renew a

 

dealer license for a period of not more than 4 years upon if the

 

secretary receives a renewal application and payment of the fee

 

required by under section 807.

 

     (10) A dealer may conduct the business of buying, selling, or

 

dealing in motor homes, trailer coaches, trailers, or pickup

 

campers at a recreational vehicle show conducted at a location in

 

this state without obtaining a separate or supplemental license

 

under subsection (7) if all of the following apply:

 

     (a) The dealer is licensed as a new vehicle dealer or used or

 

secondhand vehicle dealer.

 

     (b) The duration of the recreational vehicle show is not more

than 14 days.

 

     (c) Not less than 14 days before the beginning date of the

 

recreational vehicle show, the show producer notifies the secretary

 

of state, in a manner and form prescribed by the secretary of

 

state, that the recreational vehicle show is scheduled, the

 

location, dates, and times of the recreational vehicle show, and

 

the name, address, and dealer license number of each dealer

 

participating in the recreational vehicle show.

 

     Enacting section 1. This amendatory act takes effect 90 days

 

after the date it is enacted into law.