Bill Text: MI SB0735 | 2009-2010 | 95th Legislature | Introduced
Bill Title: Vehicles; other; definition of "established place of business" for vehicle sales; modify. Amends secs. 14 & 248 of 1949 PA 300 (MCL 257.14 & 257.248).
Spectrum: Partisan Bill (Republican 2-0)
Status: (Introduced - Dead) 2009-08-18 - Referred To Committee On Commerce And Tourism [SB0735 Detail]
Download: Michigan-2009-SB0735-Introduced.html
SENATE BILL No. 735
August 18, 2009, Introduced by Senators GARCIA and VAN WOERKOM and referred to the Committee on Commerce and Tourism.
A bill to amend 1949 PA 300, entitled
"Michigan vehicle code,"
by amending sections 14 and 248 (MCL 257.14 and 257.248), as
amended by 2004 PA 495.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 14. (1) Except as provided in subsection (2),
"established place of business" means the place actually occupied
either continuously or at regular periods by a dealer or
manufacturer where his or her books and records are kept and a
large share of his or her business transacted.
(2) Established place of business for a class (a) or class (b)
dealer means premises that meet all of the following requirements:
(a) The premises contain, except as otherwise provided in this
act,
a permanently enclosed building or structure either that is
owned,
leased, or rented by a dealer, which that is not a residence
unless it was lawfully used as a place of business under this
section before January 31, 2005, and that is not a tent, temporary
stand, or any temporary quarters; the building or structure is
continuously occupied in good faith for the purpose of selling,
buying, trading, leasing, or otherwise dealing in motor vehicles;
all books, records, and files necessary to conduct the business of
a class (a) or class (b) dealer are maintained in the building or
structure; and the building or structure houses an office of at
least 150 square feet in size, equipped with standard office
furniture, working utilities, a working restroom, and a working
telephone listed in the name of the business on the dealer's
license.
(b) The premises have land space of no less than 1,300 square
feet to accommodate the display of a minimum of 10 vehicles of the
kind and type that the dealer is licensed to sell and an additional
650 square feet for customer parking. The display and customer
parking areas shall be adequately surfaced and well-lit during
business hours. This subdivision does not apply if the premises are
a residence.
(c) The premises are identified by an exterior sign displaying
the name of the dealership that is permanently affixed to the
building or land with letters clearly visible from a highway.
(d) The premises contain a conspicuous posting of the dealer's
regular hours of operation. The posted hours shall be not less than
30
20 hours per week.
(e) The premises contain a registered repair facility on site
for the repair and servicing of motor vehicles of a type sold at
the established place of business, unless the dealer has entered
into a written servicing agreement with a registered repair
facility
at a location not to exceed 10 more
than 30 miles'
distance from the established place of business. If repairs are
conducted
pursuant to under a servicing agreement, the servicing
agreement shall be conspicuously posted in the office.
(f) The premises meet all applicable zoning requirements and
municipal requirements or was an allowable nonconforming use under
applicable zoning requirements and municipal requirements before
January 31, 2005.
Sec. 248. (1) The secretary of state shall not grant a dealer
license under this section until an investigation is made of the
applicant's qualifications under this act, except that this
subsection does not apply to license renewals. The secretary of
state
shall make the investigation within not more than 15 days
after receiving the application and make 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 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 judgment based on fraud, cheating, or misrepresentation
has been 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 final judgment has been entered in a court
of record against the licensee. A dealer or applicant who has
furnished satisfactory proof 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 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 giving 30 days' notice
in writing to the secretary of state 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 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 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 The name of the
applicant.
(b)
Location 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 or was an allowed nonconforming use under applicable
municipal and zoning requirements before January 31, 2005.
(c) The name under which business is to be conducted.
(d) If the business is a corporation, the state of
incorporation.
(e)
Name The name, address, date of birth, and social security
number of each owner or partner and, if a corporation, the name,
address, date of birth, and social security number of each of the
principal officers.
(f) The county in which the business is to be conducted and
the address of each place of business in that county.
(g) If new vehicles are to be sold, the make to be handled.
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 director. 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 the application 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
classification system number 42114, entitled "motor vehicle parts
(used) wholesalers" or under the national council on compensation
insurance classification code number 3821, entitled "automobile
dismantling and drivers", if applicable.
(l) 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 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 supplemental dealer license shall be issued 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.
(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
application and payment of the fee required by 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.