Bill Text: MI SB0735 | 2009-2010 | 95th Legislature | Introduced

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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

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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.