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General Assembly Raised Bill No. 7142
January Session, 2019
LCO No. 3735
Referred to Committee on TRANSPORTATION
Introduced by:
(TRA)
AN ACT CONCERNING TH E LICENSING OF NEW AND USED CAR
DEALERS.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:
Section 1. Section 14-52b of the general statutes is repealed and the 1
following is substituted in lieu thereof (Effective July 1, 2019): 2
(a) In the event a manufacturer licensed in accordance with the 3
provisions of section 14-67a, as amended by this act, cancels, 4
terminates or fails to renew any franchise, as defined in section 42-5
133r, as amended by this act, with a new car dealer, as defined in 6
section 14-51, as amended by this act, the Commissioner of Motor 7
Vehicles, upon receipt of written notice of such action by the 8
manufacturer, shall, unless the dealer holds one or more additional 9
franchises, demand that such new car dealer surrender such license to 10
the commissioner. If such action is contested by such dealer in 11
accordance with the provisions of sections 42-133r to 42-133ee, 12
inclusive, as amended by this act, the commissioner shall not demand 13
surrender of such license, and no replacement motor vehicle dealer 14
shall be named for the dealer's point or location, except in accordance 15 Raised Bill No. 7142
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with subdivision (10) of section 42-133cc, until the proceedings to 16
contest such action by the manufacturer are finally determined after all 17
means of administrative, judicial and appellate review have been 18
exhausted and the decision is adverse to the dealer. 19
(b) Except as provided in subsections (c) [and (d)] to (e), inclusive, of 20
this section, no person, firm or corporation licensed as a manufacturer 21
in accordance with the provisions of section 14-67a, as amended by 22
this act, may be the holder of a new or used car dealer's license issued 23
in accordance with the provisions of section 14-52, except a 24
manufacturer may operate as a dealer on a temporary basis in 25
accordance with the provisions of subdivision (8) of section 42-133cc. 26
The provisions of this subsection shall apply to any firm or corporation 27
that is owned or controlled by a manufacturer, as determined by the 28
commissioner. Any applicant for a new or used car dealer license that 29
is denied a license under the provisions of this subsection shall be 30
entitled to a hearing in accordance with the provisions of chapter 54. 31
(c) [Notwithstanding the provisions of subsection (b) of this section, 32
the] The commissioner may issue a used car dealer's license to a 33
person, firm or corporation, owned or controlled by a manufacturer, 34
engaged primarily in the business of rental of motor vehicles and 35
industrial and construction equipment, provided: (1) Motor vehicles 36
offered for sale by any such person, firm or corporation are limited to 37
motor vehicles that have been previously used exclusively and 38
regularly in the conduct of the business or motor vehicles traded in by 39
purchasers of such previously used motor vehicles, (2) any warranty 40
repairs performed by such person, firm or corporation are limited to 41
motor vehicles that such person, firm or corporation owns, has 42
previously owned, or has taken in trade, and (3) any retail financing 43
provided or arranged by such person, firm or corporation is limited to 44
vehicles sold by such person, firm or corporation. 45
(d) The commissioner may extend the period of a license issued to a 46
manufacturer to operate a dealership on a temporary basis, in 47
accordance with the provisions of subsection (b) of this section and 48 Raised Bill No. 7142
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subdivision (8) of section 42-133cc, for not more than one additional 49
year, up to a maximum period of two years, if the commissioner is 50
satisfied that such manufacturer has made and is continuing to make 51
bona fide efforts to sell and transfer the dealership to a person, firm or 52
corporation that is qualified to hold a new or used dealer's license. 53
(e) (1) For the purposes of this subsection, "manufacturer" means a 54
person, firm or corporation licensed as a manufacturer in accordance 55
with the provisions of section 14-67a, as amended by this act, and any 56
subsidiary, affiliate or entity owned or controlled by such 57
manufacturer. 58
(2) The commissioner may issue a new or used car dealer's license to 59
a manufacturer, provided such manufacturer: (A) Does not have a 60
franchise agreement with any new car dealer in the state; (B) 61
manufactures only electric vehicles; (C) was licensed as a manufacturer 62
in accordance with the provisions of section 14-67a, as amended by 63
this act, on or before January 1, 2019; (D) sells at retail only motor 64
vehicles manufactured by such manufacturer; (E) does not hold a 65
controlling interest in another manufacturer, or a subsidiary, affiliate 66
or entity owned or controlled by such other manufacturer, that is 67
licensed as a dealer under this subsection; and (F) is not owned or 68
controlled by another manufacturer, or a subsidiary, affiliate or entity 69
owned or controlled by such other manufacturer, that is licensed as a 70
dealer under this subsection. 71
Sec. 2. Subdivisions (1) and (2) of subsection (a) of section 14-51 of 72
the general statutes are repealed and the following is substituted in 73
lieu thereof (Effective July 1, 2019): 74
(1) "New car dealer" includes (A) any person, firm or corporation 75
engaged in the business of merchandising new motor vehicles under a 76
manufacturer's or importer's contract for each such make of vehicle, 77
[who may] and (B) any person, firm or corporation licensed as a 78
manufacturer, as defined in subsection (e) of section 14-52b, as 79
amended by this act, that is engaged in the business of merchandising 80 Raised Bill No. 7142
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new motor vehicles and licensed as a new car dealer as provided in 81
said subsection. Such person, firm or corporation may, incidental to 82
such business, sell used motor vehicles and repair motor vehicles, [. 83
Such person] and shall be qualified to conduct such business in 84
accordance with the requirements of section 14-52a. 85
(2) "Used car dealer" includes (A) any person, firm or corporation 86
engaged in the business of merchandising motor vehicles other than 87
new, [who] and (B) any person, firm or corporation licensed as a 88
manufacturer, as defined in subsection (e) of section 14-52b, as 89
amended by this act, that is engaged in the business of merchandising 90
motor vehicles other than new and licensed as a used car dealer as 91
provided in said subsection. Such person, firm or corporation may, 92
incidental to such business, repair motor vehicles. A used car dealer 93
does not include any person, firm or corporation engaged in the 94
business of leasing or renting motor vehicles that offers for sale or sells 95
used motor vehicles incidental to its primary business, if [(A)] such 96
person, firm or corporation is licensed in accordance with the 97
provisions of section 14-15, and [(B)] the motor vehicles that it offers 98
for sale were formerly the subject of one or more lease agreements to 99
which it was a party and the actual or prospective purchaser is the 100
original lessee pursuant to a purchase option specified in a lease 101
agreement. Such person, firm or corporation shall be qualified to 102
conduct such business in accordance with the requirements of section 103
14-52a. 104
Sec. 3. Section 14-67a of the general statutes is repealed and the 105
following is substituted in lieu thereof (Effective July 1, 2019): 106
(a) No person, firm or corporation shall engage in the business of 107
manufacturing motor vehicles for sale in this state without having 108
been issued a manufacturer's license, which license shall expire 109
biennially on the last day of June. Application for such license or 110
renewal thereof may be made to the Commissioner of Motor Vehicles 111
in such form as the commissioner shall require. The commissioner may 112
require with such application all of the following, which [he] the 113 Raised Bill No. 7142
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commissioner may consider in determining the fitness of such 114
applicant to engage in business as a manufacturer of motor vehicles for 115
sale in this state: 116
(1) Information relating to the applicant's solvency and [his] 117
financial standing; 118
(2) A certified copy of any warranty made by the manufacturer or 119
any other party in whom title to such motor vehicle may have been 120
vested prior to possession of such motor vehicle being transferred to a 121
person licensed under the provisions of this section; 122
(3) A copy of the applicant's standard franchise agreement and all 123
supplements thereto, together with a list of the applicant's authorized 124
dealers or distributors in this state and their [address] addresses. Such 125
applicant shall notify the commissioner immedia tely of the 126
appointment of any additional dealers or distributors or any revisions 127
of or additions to the basic franchise agreement on file with [him] the 128
commissioner, or of any individual dealer or distributor supplements 129
to such agreement. The provisions of this subdivision shall not apply 130
to any manufacturer licensed as a new or used car dealer pursuant to 131
subsection (e) of section 14-52b, as amended by this act; 132
(4) A certified copy of the delivery and preparation obligations of 133
the applicant's new car dealers, which obligations shall constitute such 134
new car dealers' only responsibility for product liability between the 135
dealer and the manufacturer; 136
(5) An affidavit stating the rates such applicant pays or agrees to 137
pay any authorized new car dealer for parts and labor used and 138
expended by such authorized new car dealer for the manufacturer 139
under delivery and preparation obligations under the new car 140
warranty; 141
(6) A biennial license fee of two thousand three hundred dollars, 142
which fee shall not be subject to refund or proration; and 143 Raised Bill No. 7142
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(7) Any other pertinent matter commensurate with the safeguarding 144
of the public interest. 145
(b) An application for renewal of such license filed with the 146
commissioner after the expiration date of such license shall be 147
accompanied by a late fee of two hundred fifty dollars. The 148
commissioner shall not renew any license under this section which has 149
expired for more than forty-five days. 150
Sec. 4. Section 42-133r of the general statutes is repealed and the 151
following is substituted in lieu thereof (Effective July 1, 2019): 152
As used in [sections 42-133r] this section and sections 42-133s to 42-153
133ee, inclusive, unless the context indicates a different meaning: 154
(1) "Manufacturer" means any person who manufactures or 155
assembles new motor vehicles, or imports motor vehicles for 156
distribution to dealers or through distributors, or factory branches, but 157
does not include any manufacturer licensed as a new or used car 158
dealer pursuant to subsection (e) of section 14-52b, as amended by this 159
act. 160
(2) "Distributor" means any person who offers for sale, sells or 161
distributes any new motor vehicle to dealers or who maintains factory 162
representatives or who controls any person, firm, association, joint 163
venture corporation or trust, who offers for sale, sells or distributes 164
any new motor vehicle to dealers. 165
(3) "Factory branch" means a branch office maintained by a 166
manufacturer for the purpose of selling, or offering for sale, motor 167
vehicles to a distributor or dealer, or for directing or supervising 168
factory or distributor representatives. 169
(4) "Owner" means any person holding an ownership interest in a 170
business entity operating as a dealer or under a franchise as defined in 171
this section either as a corporation, partnership or sole proprietorship. 172
To the extent that the rights of any owner under [sections 42-133r] this 173 Raised Bill No. 7142
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section and sections 42-133s to 42-133ee, inclusive, conflict with the 174
rights of any other owner, such rights shall accrue in priority order 175
based on the percentage of ownership interest held by each owner 176
with the owner having the greatest ownership interest having first 177
priority and succeeding priority accruing to other owners in the 178
descending order of their percentage of ownership interest. 179
(5) "Dealership facilities" means real estate, buildings, fixtures and 180
improvements which are used in the course of business under a 181
franchise by a new motor vehicle dealer. 182
(6) "Dealer" means any person engaged in the business of selling, 183
offering to sell, soliciting or advertising the sale of new motor vehicles 184
and who holds a valid sales and service agreement, franchise or 185
contract, granted by a manufacturer or distributor for the retail sale of 186
the manufacturer's or distributor's new motor vehicles. 187
(7) "Motor vehicle" means a self-propelled vehicle intended 188
primarily for use and operation on the public highways, other than a 189
farm tractor or other machinery or tools used in the production, 190
harvesting and care of farm products. 191
(8) "New motor vehicle" means a motor vehicle which has been sold 192
to a new motor vehicle dealer and which has not been used for other 193
than demonstration purposes and on which the original title has not 194
been issued from the new motor vehicle dealer. 195
(9) "Established place of business" means a permanent, commercial 196
building easily accessible and open to the public at reasonable times 197
and at which the business of a new motor vehicle dealer, including the 198
display and repair of vehicles, may be lawfully carried on. 199
(10) "Franchise" means a written agreement or contract between a 200
manufacturer or distributor and a dealer which purports to fix the 201
legal rights and liabilities of the parties to such agreement or contract, 202
and pursuant to which the dealer purchases and resells the franchise 203
product or leases or rents the dealership premises. 204 Raised Bill No. 7142
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(11) "Good faith" means honesty in fact and the observance of 205
reasonable commercial standards of fair dealing in the trade. 206
(12) "Designated family member" means the spouse, child, 207
grandchild, parent, brother or sister of an owner who, in the case of the 208
owner's death, is entitled to inherit the ownership interest in the dealer 209
under the terms of the owner's will, or who has been nominated in any 210
other written instrument, or who, in the case of an incapacitated owner 211
of a dealer, has been appointed by a court as the legal representative of 212
the dealer's property. 213
(13) "Person" means a natural person, partnership, corporation, 214
limited liability company, association, trust, estate or any other legal 215
entity. 216
(14) "Relevant market area" means the area within a radius of 217
fourteen miles around an existing dealer or the area of responsibility 218
defined in a franchise, whichever is greater. 219
(15) "Commissioner" means the Commissioner of Motor Vehicles. 220
This act shall take effect as follows and shall amend the following
sections:
Section 1 July 1, 2019 14-52b
Sec. 2 July 1, 2019 14-51(a)(1) and (2)
Sec. 3 July 1, 2019 14-67a
Sec. 4 July 1, 2019 42-133r
Statement of Purpose:
To authorize the Commissioner of Motor Vehicles to issue a new or
used car dealer's license to an electric vehicle manufacturer.
[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline,
except that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is
not underlined.]