Bill Text: MI SB1023 | 2017-2018 | 99th Legislature | Engrossed
Bill Title: Occupations; vehicles, dealers and repair facilities; dealer training; provide for. Amends sec. 248 of 1949 PA 300 (MCL 257.248) & adds sec. 248l.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Passed) 2018-12-21 - Assigned Pa 0420'18 With Immediate Effect [SB1023 Detail]
Download: Michigan-2017-SB1023-Engrossed.html
SB-1023, As Passed Senate, September 26, 2018
SENATE BILL No. 1023
May 22, 2018, Introduced by Senators MACGREGOR and SCHMIDT and referred to the Committee on Commerce.
A bill to amend 1949 PA 300, entitled
"Michigan vehicle code,"
by amending section 248 (MCL 257.248), as amended by 2016 PA 425,
and by adding section 248l.
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 conducts an
investigation of the applicant's qualifications under this act,
except that this subsection does not apply to a license renewal.
The secretary of state shall conduct the investigation within 15
days after receiving the application and 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 a bond renewal certificate, approved by
the secretary of state, with the license 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 amount of $10,000.00. 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 is entered in a court of record against the
licensee or a final order that the licensee has engaged in fraud,
cheating, or misrepresentation is issued by the secretary of state
after an administrative hearing. 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 is entered in a court of record against the licensee
or a final order is issued by the secretary of state after an
administrative hearing. A dealer or applicant 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 requirements of 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 by giving notice in writing
to the secretary of state of the cancellation at least 30 days
before the effective date of the cancellation and 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 under section 245 and shall include with the
application the proper fee 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 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 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) The name of the applicant.
(b) 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.
(c) The name under which the dealer will conduct business.
(d) If the business is a corporation, the state of
incorporation.
(e) If the business is a sole proprietorship or partnership,
the name, address, and date of birth of each owner or partner; if
the business is a corporation, the name, address, and date of birth
of each of the principal officers.
(f) The county in which the applicant will conduct business
and the address of each place of business in that county.
(g) If the dealer's business is the sale of new vehicles, the
make 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) and that the
contract meets the requirements for a dealer agreement under 1981
PA 118, MCL 445.1561 to 445.1583.
(h) A statement of the previous history, record, and
associations of the applicant and of each owner, partner, officer,
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, 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 industry
classification system number 42114, entitled "motor vehicle parts
(used) merchant wholesalers" or under the National Council on
Compensation Insurance classification code number 3821, entitled
"automobile dismantling", if applicable.
(l) 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
this subdivision, "alter ego" means a person that acts for and on
behalf of, or in the place of, another person for purposes of
obtaining a vehicle dealer license.
(m) A certification that the applicant if the applicant is an
individual or sole proprietorship, the partners of the applicant if
the applicant is a partnership, the principal officers of the
applicant if the applicant is a corporation, or any other
individual who is responsible for the daily operations of the
dealership, as applicable, has reviewed and understands the
requirements of this act, the rules promulgated under this act, the
dealer manual published by the secretary of state, and any other
applicable material provided by the department.
(n) For an application submitted by or on behalf of an
eligible used vehicle dealer for an original license, a
certification that within the 6-month period preceding the date of
the application, the applicant, the partners of the applicant, or
the principal officers of the applicant, as applicable, completed
the dealer training program described in section 248l(2). This
subdivision does not apply to an application to renew the license
of an eligible used vehicle dealer and does not apply to any
original license that was granted to an eligible used vehicle
dealer before, and that is valid on, the effective date of section
248l. As used in this subdivision and subdivision (o), "eligible
used vehicle dealer" means that term as defined in section 248l.
(o) For an application submitted by or on behalf of an
eligible used vehicle dealer for an original or renewal license, a
certification that each retail sales location of that dealer has an
employee that has completed the dealer training program required
under section 248l(3) or (5), as applicable.
(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 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. The secretary of state shall
not charge a fee for a supplemental dealer license and shall 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. A used or secondhand
vehicle dealer may be eligible for a mobility dealer endorsement
under section 248k.
(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) All of the following apply to the issuance, renewal, and
expiration of a dealer license under this section:
(a)
A dealer license that is issued before the effective date
of
the amendatory act that added section 248k expires on December
31
of the last year for which the license is issued.valid.
(b) A dealer shall renew its dealer license annually. The
secretary of state may renew a dealer license for a period of not
more than 4 years if the secretary receives a renewal application
and payment of the fee required under section 807.
(c)
An initial dealer license issued on or after the effective
date
of the amendatory act that added this subdivision expires 1
year
after the date the license is issued.
(c) (d)
To renew a dealer license, the
dealer shall file an
application for renewal with the secretary of state at least 30
days before the expiration of its current license.
(d) (e)
If a dealer has not renewed its
dealer license on or
before the expiration date of its current license, the secretary of
state within 10 business days after that expiration date must
notify the dealer that the secretary of state has not received its
renewal application. The notice shall include the amount of the
late renewal fee.
(e) (f)
A dealer may continue to operate
its dealer business
after the expiration of its dealer license, pending approval of the
renewal application, if the renewal application is delivered in
person or mailed to the secretary of state on or before the
expiration date of the license. If requested by the department, a
dealer that mails an application under this subdivision must
provide proof of mailing of the renewal application that is
satisfactory to the department.
(f) (g)
If an application to renew a dealer
license is filed
with the secretary of state after the expiration of that license,
the dealer may operate its dealer business beginning on the date on
which the application is delivered or mailed to the secretary of
state, pending approval of the renewal application. If requested by
the department, a dealer that mails an application under this
subdivision must provide proof of mailing of the renewal
application that is satisfactory to the department. A dealer shall
pay a renewal fee equal to 150% of the normal renewal fee for a
renewal described in this subdivision.
(g) (h)
If a dealer files an application to
renew a dealer
license more than 30 days after the expiration of that license, the
dealer is considered a new applicant for a dealer license under
this section.
(h) (i)
The secretary of state shall
deposit the late renewal
fees
collected under subdivisions (e) (d) and (g) (f) in
the
transportation administration collection fund created in section
810b.
(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.
Sec. 248l. (1) The secretary of state shall establish each of
the following dealer training programs for eligible used vehicle
dealers:
(a) A prelicensure dealer training program that meets all of
the following:
(i) Is conducted by the department, or a qualified trade
organization approved by the department, and is offered at least 2
times each calendar quarter. If approved by the department, the
training program may be conducted online or by other electronic
means.
(ii) Is available to any individual who is an eligible used
vehicle dealer who is applying for an original dealer license or is
a partner or officer of an eligible used vehicle dealer that is
applying for an origianl dealer license.
(iii) Includes training related to this act and any other
subject matter approved by the secretary of state, such as consumer
protection and sales and use tax collection. The department may
consult with any other departments to evaluate and approve course
content it considers appropriate.
(b) A training program for designated individuals that meets
all of the following:
(i) Is conducted by the department or another person
designated by the secretary of state and is offered at least 2
times each calendar quarter. If approved by the department, the
training program may be conducted online or by other electronic
means.
(ii) Is available to any designated individual.
(iii) Includes training in transferring vehicle titles,
documentation of title transfers, record keeping, and any other
subject matter approved by the secretary of state, such as consumer
protection and sales and use tax collection.
(c) A continuing education training program that meets all of
the following:
(i) Is conducted at least 2 times in each calendar quarter.
(ii) Includes at least 2 hours of training.
(iii) Includes subject matter approved by the secretary of
state such as transferring vehicle titles, documentation of title
transfers, record keeping, consumer protection, and sales and use
tax collection. The department may consult with any other
departments it considers appropriate to evaluate and approve course
content.
(iv) Is conducted by 1 of the following:
(A) The department.
(B) A qualified trade organization that is approved by the
department. The department may evaluate a qualified trade
organization approved under this sub-subparagraph to determine
whether it meets the requirements of this subdivision. The
department may, after a hearing, suspend or revoke a qualified
trade organization's approval to offer the training described in
this subdivision for failure to comply with those requirements.
(2) In the 6-month period preceding the date of the
application for an original eligible used vehicle dealer license,
each individual who is the applicant, each partner of the
applicant, or each officer of the applicant, as applicable, for the
original eligible used vehicle dealer license must complete the
dealer training program described in subsection (1)(a). This
subsection does not apply to either of the following:
(a) An applicant or application for the renewal of an eligible
used vehicle dealer license.
(b) The holder of an original eligible used vehicle dealer
license that was granted before, and is valid on, the effective
date of this section.
(3) In the 90-day period following the issuance of an original
dealer license to an eligible used vehicle dealer, the licensed
dealer shall select a designated individual and ensure that he or
she completes the dealer training program described in subsection
(1)(b). However, this subsection does not apply if the designated
individual has completed the training program described in
subsection (1)(c). An eligible used vehicle dealer must select a
designated individual for each of its retail sales locations. An
eligible used vehicle dealer must not select the same individual as
the designated individual for more than 1 retail sales location.
(4) Subsection (3) does not apply to the holder of an original
or renewal eligible used vehicle dealer license that was granted
before, and is valid on, the effective date of this section until
that license is next renewed.
(5) In addition to the training program described in
subsection (1)(b), an eligible used vehicle dealer shall ensure
that a designated individual completes the training program
described in subsection (1)(c) 1 time in each 12-month period after
the date of issuance of its original license.
(6) The department shall not renew the license of an eligible
used vehicle dealer unless the application for renewal includes a
certification from the dealer that it is in compliance with the
training requirements applicable under this section.
(7) As used in this section:
(a) "Designated individual" means any of the following
individuals, if he or she is selected by an eligible used vehicle
dealer to complete a training program described in this section:
(i) An individual who is a licensed eligible used vehicle
dealer or a partner or officer of a licensed eligible used vehicle
dealer.
(ii) Is an employee of a licensed eligible used vehicle
dealer, such as a general manager, a sales manager, or an employee
who is responsible for preparing title documents for the dealer.
(b) "Eligible used vehicle dealer" means a person that is
licensed as a used or secondhand vehicle dealer, or is applying for
licensure as a used or secondhand vehicle dealer, and is not
licensed or seeking licensure as a new vehicle dealer.
(c) "Qualified trade organization" means a bona fide nonprofit
membership organization that is based in this state, that has been
in existence for at least 5 years, and whose members are primarily
eligible used vehicle dealers.
Enacting section 1. This amendatory act takes effect 90 days
after the date it is enacted into law.
