Bill Text: NJ A3041 | 2014-2015 | Regular Session | Introduced
Bill Title: Permits manufacturer to temporarily sell motor vehicles to consumers under certain conditions.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Introduced - Dead) 2014-03-24 - Introduced, Referred to Assembly Consumer Affairs Committee [A3041 Detail]
Download: New_Jersey-2014-A3041-Introduced.html
Sponsored by:
Assemblyman JOHN S. WISNIEWSKI
District 19 (Middlesex)
Assemblywoman LINDA STENDER
District 22 (Middlesex, Somerset and Union)
SYNOPSIS
Permits manufacturer to temporarily sell motor vehicles to consumers under certain conditions.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning the sale of motor vehicles, amending R.S.39:10-19, and amending and supplementing P.L.1985, c.361.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. R.S.39:10-19 is amended to read as follows:
39:10-19. No person shall engage in the business of buying, selling or dealing in motor vehicles in this State, nor shall a person engage in activity that would qualify the person as a leasing dealer, as defined in section 2 of P.L.1994, c.190 (C.56:12-61), unless: a. the person is a licensed real estate broker acting as an agent or broker in the sale of mobile homes without their own motor power other than recreation vehicles as defined in section 3 of P.L.1990, c.103 (C.39:3-10.11), or manufactured homes as defined in section 3 of P.L.1983, c.400 (C.54:4-1.4); or b. the person is authorized to do so under the provisions of this chapter and P.L.1985, c.361 (C.56:10-26 et seq.).
The chief administrator may, upon application in such form as the chief administrator prescribes, license any proper person as such dealer or leasing dealer. A licensed real estate broker shall be entitled to act as an agent or broker in the sale of a mobile or manufactured home as defined in subsection a. of this section without obtaining a license from the chief administrator. For the purposes of this chapter, a "licensed real estate broker" means a real estate broker licensed by the New Jersey Real Estate Commission pursuant to the provisions of chapter 15 of Title 45 of the Revised Statutes. Any sale or transfer of a mobile or manufactured home, in which a licensed real estate broker acts as a broker or agent pursuant to this section, which sale or transfer is subject to any other requirements of R.S.39:10-1 et seq., shall comply with all of those requirements.
No person who has been
convicted of a crime, arising out of fraud or misrepresentation in the sale,
leasing or financing of a motor vehicle, shall be eligible to receive a
license. For the purposes of this section, each applicant for a license shall
submit to the chief administrator the applicant's name, address, fingerprints,
and written consent for a criminal history record background check to be
performed. The chief administrator is hereby authorized to exchange
fingerprint data with and receive criminal history record information from the
State Bureau of Identification in the Division of State Police and the Federal
Bureau of Investigation consistent with applicable State and federal laws,
rules, and regulations, for purposes of facilitating determinations concerning
licensure eligibility. The applicant shall bear the cost for the criminal
history
record background check, including all costs of administering and processing
the check. The Division of State Police shall promptly notify the chief
administrator in the event a current holder of a license or prospective
applicant, who was the subject of a criminal history record background check
pursuant to this section, is arrested for a crime or offense in this State
after the date the background check was performed.
Each applicant for a license shall at the time such license is issued have established and maintained, or by that application shall agree to establish and maintain, within 90 days after the issuance thereof, a place of business consisting of a permanent building not less than 1,000 square feet in floor space located in the State of New Jersey to be used principally for the servicing and display of motor vehicles with such equipment installed therein as shall be requisite for the servicing of motor vehicles in such manner as to make them comply with the laws of this State and with any rules and regulations made by the board governing the equipment, use, and operation of motor vehicles within the State. However, a leasing dealer, who is not engaged in the business of buying, selling, or dealing in motor vehicles in the State, shall not be required to maintain a place of business with floor space available for the servicing or display of motor vehicles or to have an exterior sign at the lessor's place of business.
A license fee of $200 shall be paid by an applicant upon the applicant's initial application for a license. The chief administrator may renew an applicant's license upon application for renewal on a form prescribed by the chief administrator and accompanied by a renewal fee of $200. Every license shall expire 24 months from the date on which it is issued. The chief administrator may, at the chief administrator's discretion and for good cause shown, extend an applicant's license for an additional period not to exceed 12 months from the date on which it is scheduled to expire. The chief administrator may, at the chief administrator's discretion and for good cause shown, issue a license which shall expire on a date fixed by the chief administrator. The fee for licenses with an expiration date fixed by the chief administrator shall be fixed by the chief administrator in an amount proportionately less or greater than the fee established herein.
For the purposes of this section, a leasing dealer or an assignee of a leasing dealer whose leasing activities are limited to buying motor vehicles for the purpose of leasing them and selling motor vehicles at the termination of a lease shall not be deemed to be engaged in the business of buying, selling, or dealing in motor vehicles in this State.
(cf: P.L.2007, c.335, s.24)
2. Section 2 of P.L.1985, c.361 (C.56:10-27) is amended to read as follows:
2. [It] Except as provided pursuant to section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill), it shall be a violation of this act for any motor vehicle franchisor, directly or indirectly, through any officer, agent, employee, broker or any shareholder of the franchisor, except a shareholder of 1% or less of the outstanding shares of any class of securities of a franchisor which is a publicly traded corporation, or other person, to offer to sell or sell motor vehicles, to a consumer, other than an employee of the franchisor, except through a motor vehicle franchisee.
(cf: P.L.1985, c. 361, s. 2)
3. Section 3 of P.L.1985, c.361 (C.56:10-28) is amended to read as follows:
3. [It] Except as provided pursuant to section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill), it shall be a violation of this act for a motor vehicle franchisor, directly or indirectly, through any officer, agent, employee, broker or any shareholder of the franchisor, except a shareholder of 1% or less of the outstanding shares of any class of securities of a franchisor which is a publicly traded corporation, or other person, to own or operate a place of business as a motor vehicle franchisee, except that this section shall not prohibit the ownership or operation of a place of business by a motor vehicle franchisor for a period, not to exceed 24 consecutive months, during the transition from one motor vehicle franchisee to another; or the investment in a motor vehicle franchisee by a motor vehicle franchisor if the investment is for the sole purpose of enabling a partner or shareholder in that motor vehicle franchisee to acquire an interest in that motor vehicle franchisee and that partner or shareholder is not otherwise employed by or associated with the motor vehicle franchisor and would not otherwise have the requisite capital investment funds to invest in the motor vehicle franchisee, and has the right to purchase the entire equity interest of the motor vehicle franchisor in the motor vehicle franchisee within a reasonable period of time not to exceed 10 years.
(cf: P.L.1993, c.189, s.4)
4. (New section) Notwithstanding the provisions of any law, rule or regulation to the contrary, a motor vehicle franchisor who is a manufacturer may directly buy from and directly sell, offer to sell, or deal to a consumer a motor vehicle if the franchisor:
a. is licensed pursuant to R.S.39:10-19; and
b. sells no more than 500 motor vehicles in each calendar year. The Chief Administrator of the New Jersey Motor Vehicle Commission shall not license a franchisor as a dealer, pursuant to R.S.39:10-19, for more than five consecutive years in total.
5. This act shall take effect immediately.
STATEMENT
This bill would allow a franchisor (manufacturer) to directly buy or sell motor vehicles to consumers for up to five years, namely if that manufacturer sells a limited number of vehicles in New Jersey each year.
This bill amends current law to allow any motor vehicle manufacturer to directly buy from, and directly sell, offer to sell, or deal to, a consumer a motor vehicle if the manufacturer is licensed by the New Jersey Motor Vehicle Commission (MVC) and meets the sales requirements specified in the bill.
Current law, at R.S.39:10-19, requires a person engaged in the business of buying, selling or dealing motor vehicles to be licensed by the MVC. However, P.L.1985, c.361 (C.56:10-26 et seq.) provides that automobiles may be sold only through franchises, which precludes manufacturer Tesla Motors from also being a dealer of its motor vehicles.
Specifically, this bill allows a manufacturer to directly sell motor vehicles to a consumer if the manufacturer sells no more than 500 motor vehicles in each calendar year. In addition, the manufacturer would only be eligible to be licensed as a dealer, pursuant to R.S.39:10-19, for a maximum of five years in total. At the end of that five year period, the manufacturer would be required to operate within the State's existing motor vehicle sales framework, as a franchisor with a franchised dealership.
