Bill Text: NJ S4206 | 2018-2019 | Regular Session | Introduced
Bill Title: Requires extensive background checks for certain motor vehicle dealers; expands criminal offenses disqualifying license holder and key employees of certain motor vehicle dealers; establishes wholesale license for sale of motor vehicles.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2019-11-14 - Introduced in the Senate, Referred to Senate Transportation Committee [S4206 Detail]
Download: New_Jersey-2018-S4206-Introduced.html
Sponsored by:
Senator JOSEPH P. CRYAN
District 20 (Union)
SYNOPSIS
Requires extensive background checks for certain motor vehicle dealers; expands criminal offenses disqualifying license holder and key employees of certain motor vehicle dealers; establishes wholesale license for sale of motor vehicles.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning the sale of motor vehicles, amending R.S.39:10-19 and R.S.39:10-20, and supplementing Title 39 of the Revised Statutes.
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] A person shall not engage in the business of buying, selling or dealing in motor vehicles in this State, [nor] and shall [a person] not 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), except for persons engaged in the wholesale dealing of used motor vehicles as provided for by section 3 of P.L. , c. (C. ) (pending before the Legislature as this bill) 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. Prior to and following licensure, the chief administrator shall implement a program to prevent the abuse of licenses which shall include, but not be limited to, background checks in addition to the criminal history record background check performed pursuant to this section and continuing oversight over the license holders. 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] A person who has been convicted of [a crime, arising out of fraud or misrepresentation in the sale, leasing or financing of a motor vehicle,] any of the following offenses under the "New Jersey Code of Criminal Justice," Title 2C of the New Jersey Statutes, as amended and supplemented, shall not be eligible to receive a license or to serve as a key employee of a licensee:
any crime of the first degree;
N.J.S.2C:5-1;
N.J.S.2C:5-2;
Subsection b. of N.J.S.2C:11-4;
N.J.S.2C:11-5;
Subsection b. of N.J.S.2C:12-1;
N.J.S.2C:13-1;
N.J.S.2C:14-1 et seq.;
N.J.S.2C:15-1;
Subsections a. and b. of N.J.S.2C:17-1;
Subsections a. and b. of N.J.S.2C:17-2;
N.J.S.2C:18-2;
N.J.S.2C:20-1 et seq.;
N.J.S.2C:21-1 et seq.;
N.J.S.2C:24-4;
N.J.S.2C:27-1 et seq.;
N.J.S.2C:28-1 et seq.;
N.J.S.2C:30-2;
N.J.S.2C:30-3;
N.J.S.2C:35-5;
N.J.S.2C:35-6;
Section 1 of P.L.1987, c.101 (C.2C:35-7);
Section 1 of P.L.1997, c.327 (C.2C:35-7.1);
N.J.S.2C:35-11;
N.J.S.2C:35-13;
any second degree racketeering crime under chapter 41 of Title 2C of the New Jersey Statutes; or
any other offense under present New Jersey or federal law which indicates that licensure of the applicant would be inimical to the public interest and the purposes of P.L. , c. (C. ) (pending before the Legislature as this bill); provided, however, that the automatic disqualification provisions of this section shall not apply with regard to any conviction which did not occur within the 10-year period immediately preceding application for licensure and which the applicant demonstrates by clear and convincing evidence does not justify automatic disqualification pursuant to this section and any conviction which has been the subject of a judicial order of expungement or sealing. 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.
For the purposes of this section, "key employee" means any natural person employed by a licensee or by a holding or intermediary company of a licensee, and involved in the operation of a licensed dealer in a supervisory capacity or empowered to make discretionary decisions which regulate dealer operations.
(cf: P.L.2015, c.24, s.1)
2. R.S.39:10-20 is amended to read as follows:
39:10-20. The chief administrator may impose a fine not to exceed $500 and suspend the license of any license holder for a first offense and may impose a fine not to exceed $1,000 and revoke the license of any license holder for any subsequent offense upon the holder of a license for a violation of any provision of this chapter. The board is authorized to adopt rules and regulations, in accordance with the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), implementing the provisions of this chapter and authorizing the chief administrator to impose fines and the suspension or revocation of a license for the violation of these rules and regulations, including the establishment of disciplinary standards to address abuse-of-license violations. The chief administrator may suspend for a period less than the unexpired term of a license or revoke a license, after hearing, for a violation of any provision of this chapter, or for a violation of the rules and regulations promulgated pursuant thereto, or upon the final conviction of the licensee of a disqualifying crime, [arising out of fraud or misrepresentation in the sale, leasing or financing of a motor vehicle,] or upon proof of the failure of a licensee to make payment of the amount of any final judgment, rendered by a court of competent jurisdiction against such licensee and founded upon a claim arising out of fraud or misrepresentation in the sale or leasing of a motor vehicle, within 90 days after the same is finally entered, or for final conviction of the licensee for violating [any provision of chapter 171 of Title 2A or of any supplement thereof (Observance of Sabbath Days)] section 4 of P.L.1999, c.90 (C.2C:33-26), provided, however, that the chief administrator may immediately suspend the license of any license holder who is found to have given an unlicensed person improper access to motor vehicle dealer credentials and may permanently revoke the license of any such license holder who is subsequently found to have given an unlicensed person improper access to motor vehicle dealer credentials. The clerk of the court in which any conviction is rendered, or the court where it has no clerk, shall forward to the chief administrator, immediately upon the entry thereof, a certified copy of the conviction or a transcript thereof. The clerk of the court in which any judgment founded upon fraud or misrepresentation is rendered, or the court where it has no clerk, shall forward to the chief administrator, immediately after the expiration of the 90 days, a certified copy of the judgment, or a transcript thereof, showing it to have been unsatisfied more than 90 days after it became final. The chief administrator shall, before suspending or revoking the license, and at least 10 days prior to the date set for the hearing, notify the holder of the license, in writing, of any charges made, and shall afford him an opportunity to be heard in person or by counsel. The written notice may be served either personally or by registered mail addressed to the last-known address of the licensee. The chief administrator may subpoena and bring before the chief administrator any person in this State, or take testimony by deposition, in the same manner as prescribed by law in judicial proceedings in the courts of this State, and shall also issue and deliver to the dealer such subpoenas as are requested by the chief administrator. The Appellate Division of the Superior Court shall have power to review, by an appeal in lieu of prerogative writ taken by an aggrieved person, a final determination of the chief administrator.
Any fine imposed and collected pursuant to this section shall be remitted to the commission and used to defray the costs of the commission.
(cf: P.L.2007, c.335, s.26)
3. (New section) A person shall not engage in the business of wholesale dealing of used motor vehicles in this State unless the person is authorized to do so under the provisions of this section. The chief administrator may, upon application in such form as the chief administrator prescribes, license any proper person as such a dealer.
A person who has been convicted of any of the following offenses under the "New Jersey Code of Criminal Justice," Title 2C of the New Jersey Statutes, as amended and supplemented, shall not be eligible to receive a license or to serve as a key employee of a licensee:
any crime of the first degree;
N.J.S.2C:5-1;
N.J.S.2C:5-2;
Subsection b. of N.J.S.2C:11-4;
N.J.S.2C:11-5;
Subsection b. of N.J.S.2C:12-1;
N.J.S.2C:13-1;
N.J.S.2C:14-1 et seq.;
N.J.S.2C:15-1;
Subsections a. and b. of N.J.S.2C:17-1;
Subsections a. and b. of N.J.S.2C:17-2;
N.J.S.2C:18-2;
N.J.S.2C:20-1 et seq.;
N.J.S.2C:21-1 et seq.;
N.J.S.2C:24-4;
N.J.S.2C:27-1 et seq.;
N.J.S.2C:28-1 et seq.;
N.J.S.2C:30-2;
N.J.S.2C:30-3;
N.J.S.2C:35-5;
N.J.S.2C:35-6;
Section 1 of P.L.1987, c.101 (C.2C:35-7);
Section 1 of P.L.1997, c.327 (C.2C:35-7.1);
N.J.S.2C:35-11;
N.J.S.2C:35-13;
any second degree racketeering crime under chapter 41 of Title 2C of the New Jersey Statutes; or
any other offense under present New Jersey or federal law which indicates that licensure of the applicant would be inimical to the public interest and the purposes of P.L. , c. (C. ) (pending before the Legislature as this bill); provided, however, that the automatic disqualification provisions of this section shall not apply with regard to any conviction which did not occur within the 10-year period immediately preceding application for licensure and which the applicant demonstrates by clear and convincing evidence does not justify automatic disqualification pursuant to this section and any conviction which has been the subject of a judicial order of expungement or sealing. 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 pursuant to this section shall at the time such license is issued possess a valid New Jersey driver's license and 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.
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.
Any person engaged in the business of wholesale dealing of used motor vehicles and engaged in any conduct licensed pursuant to R.S.39:10-19 shall be required to be licensed pursuant to this section and pursuant to R.S.39:10-19.
For the purposes of this section, "key employee" means any natural person employed by a licensee or by a holding or intermediary company of a licensee, and involved in the operation of a licensed dealer in a supervisory capacity or empowered to make discretionary decisions which regulate dealer operations.
4. This act shall take effect immediately.
STATEMENT
This bill prohibits a person from receiving a motor vehicle dealer license pursuant to N.J.S.A.39:10-19 or from working as a key employee of a motor vehicle dealer licensee if the person has been convicted of any first degree crime, any of the crimes enumerated in the bill, or any other offense under present New Jersey or federal law which indicates that licensure of the applicant would be inimical to the public interest and the purposes of the bill; provided, however, that the automatic disqualification provisions of the bill do not apply with regard to any conviction which did not occur within the 10-year period immediately preceding application for licensure and which the applicant demonstrates by clear and convincing evidence does not justify automatic disqualification and any conviction which has been the subject of a judicial order of expungement or sealing. Under current law, the only criminal convictions that prohibit licensure are crimes arising out of fraud or misrepresentation in the sale, leasing, or financing of a motor vehicle.
The bill requires the chief administrator to implement a program to prevent the abuse of licenses which is required to include, but is not limited to, background checks in addition to the criminal history record background check performed pursuant to law and continuing oversight over the license holders. The bill authorizes the chief administrator to suspend the license of any license holder for a first violation of State law concerning dealer licenses and to revoke the license for a subsequent violation. The bill authorizes the chief administrator to immediately suspend the license of any license holder who is found to have given an unlicensed person improper access to motor vehicle dealer credentials, without certain procedural requirements for other suspensions, and to permanently revoke the license of any such license holder who is subsequently found to have given an unlicensed person improper access to motor vehicle dealer credentials.
The bill also establishes a separate wholesale license for persons who do business in the wholesale dealing of used motor vehicles in the State. Wholesale licensees are required to possess a valid New Jersey driver's license, to maintain a place of business in the State, and to undergo a criminal history record background check identical to that required for motor vehicle dealer licenses under N.J.S.A.39:10-19. The annual fee for the wholesale license is $200.
This bill is based upon a recommendation provided by the New Jersey State Commission of Investigation in a follow up report concerning abuses in the used car industry.
