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| 3 | 3 | | LCO No. 3735 1 of 8 |
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| 4 | 4 | | |
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| 5 | 5 | | General Assembly Raised Bill No. 7142 |
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| 6 | 6 | | January Session, 2019 |
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| 7 | 7 | | LCO No. 3735 |
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| 8 | 8 | | |
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| 9 | 9 | | |
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| 10 | 10 | | Referred to Committee on TRANSPORTATION |
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| 11 | 11 | | |
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| 12 | 12 | | |
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| 13 | 13 | | Introduced by: |
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| 14 | 14 | | (TRA) |
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| 15 | 15 | | |
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| 16 | 16 | | |
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| 17 | 17 | | |
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| 18 | 18 | | |
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| 19 | 19 | | AN ACT CONCERNING TH E LICENSING OF NEW AND USED CAR |
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| 20 | 20 | | DEALERS. |
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| 21 | 21 | | Be it enacted by the Senate and House of Representatives in General |
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| 22 | 22 | | Assembly convened: |
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| 23 | 23 | | |
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| 24 | 24 | | Section 1. Section 14-52b of the general statutes is repealed and the 1 |
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| 25 | 25 | | following is substituted in lieu thereof (Effective July 1, 2019): 2 |
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| 26 | 26 | | (a) In the event a manufacturer licensed in accordance with the 3 |
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| 27 | 27 | | provisions of section 14-67a, as amended by this act, cancels, 4 |
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| 28 | 28 | | terminates or fails to renew any franchise, as defined in section 42-5 |
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| 29 | 29 | | 133r, as amended by this act, with a new car dealer, as defined in 6 |
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| 30 | 30 | | section 14-51, as amended by this act, the Commissioner of Motor 7 |
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| 31 | 31 | | Vehicles, upon receipt of written notice of such action by the 8 |
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| 32 | 32 | | manufacturer, shall, unless the dealer holds one or more additional 9 |
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| 33 | 33 | | franchises, demand that such new car dealer surrender such license to 10 |
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| 34 | 34 | | the commissioner. If such action is contested by such dealer in 11 |
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| 35 | 35 | | accordance with the provisions of sections 42-133r to 42-133ee, 12 |
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| 36 | 36 | | inclusive, as amended by this act, the commissioner shall not demand 13 |
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| 37 | 37 | | surrender of such license, and no replacement motor vehicle dealer 14 |
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| 38 | 38 | | shall be named for the dealer's point or location, except in accordance 15 Raised Bill No. 7142 |
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| 39 | 39 | | |
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| 40 | 40 | | |
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| 41 | 41 | | |
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| 42 | 42 | | LCO No. 3735 2 of 8 |
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| 43 | 43 | | |
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| 44 | 44 | | with subdivision (10) of section 42-133cc, until the proceedings to 16 |
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| 45 | 45 | | contest such action by the manufacturer are finally determined after all 17 |
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| 46 | 46 | | means of administrative, judicial and appellate review have been 18 |
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| 47 | 47 | | exhausted and the decision is adverse to the dealer. 19 |
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| 48 | 48 | | (b) Except as provided in subsections (c) [and (d)] to (e), inclusive, of 20 |
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| 49 | 49 | | this section, no person, firm or corporation licensed as a manufacturer 21 |
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| 50 | 50 | | in accordance with the provisions of section 14-67a, as amended by 22 |
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| 51 | 51 | | this act, may be the holder of a new or used car dealer's license issued 23 |
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| 52 | 52 | | in accordance with the provisions of section 14-52, except a 24 |
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| 53 | 53 | | manufacturer may operate as a dealer on a temporary basis in 25 |
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| 54 | 54 | | accordance with the provisions of subdivision (8) of section 42-133cc. 26 |
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| 55 | 55 | | The provisions of this subsection shall apply to any firm or corporation 27 |
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| 56 | 56 | | that is owned or controlled by a manufacturer, as determined by the 28 |
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| 57 | 57 | | commissioner. Any applicant for a new or used car dealer license that 29 |
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| 58 | 58 | | is denied a license under the provisions of this subsection shall be 30 |
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| 59 | 59 | | entitled to a hearing in accordance with the provisions of chapter 54. 31 |
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| 60 | 60 | | (c) [Notwithstanding the provisions of subsection (b) of this section, 32 |
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| 61 | 61 | | the] The commissioner may issue a used car dealer's license to a 33 |
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| 62 | 62 | | person, firm or corporation, owned or controlled by a manufacturer, 34 |
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| 63 | 63 | | engaged primarily in the business of rental of motor vehicles and 35 |
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| 64 | 64 | | industrial and construction equipment, provided: (1) Motor vehicles 36 |
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| 65 | 65 | | offered for sale by any such person, firm or corporation are limited to 37 |
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| 66 | 66 | | motor vehicles that have been previously used exclusively and 38 |
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| 67 | 67 | | regularly in the conduct of the business or motor vehicles traded in by 39 |
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| 68 | 68 | | purchasers of such previously used motor vehicles, (2) any warranty 40 |
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| 69 | 69 | | repairs performed by such person, firm or corporation are limited to 41 |
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| 70 | 70 | | motor vehicles that such person, firm or corporation owns, has 42 |
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| 71 | 71 | | previously owned, or has taken in trade, and (3) any retail financing 43 |
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| 72 | 72 | | provided or arranged by such person, firm or corporation is limited to 44 |
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| 73 | 73 | | vehicles sold by such person, firm or corporation. 45 |
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| 74 | 74 | | (d) The commissioner may extend the period of a license issued to a 46 |
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| 75 | 75 | | manufacturer to operate a dealership on a temporary basis, in 47 |
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| 76 | 76 | | accordance with the provisions of subsection (b) of this section and 48 Raised Bill No. 7142 |
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| 77 | 77 | | |
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| 78 | 78 | | |
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| 79 | 79 | | |
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| 80 | 80 | | LCO No. 3735 3 of 8 |
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| 81 | 81 | | |
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| 82 | 82 | | subdivision (8) of section 42-133cc, for not more than one additional 49 |
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| 83 | 83 | | year, up to a maximum period of two years, if the commissioner is 50 |
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| 84 | 84 | | satisfied that such manufacturer has made and is continuing to make 51 |
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| 85 | 85 | | bona fide efforts to sell and transfer the dealership to a person, firm or 52 |
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| 86 | 86 | | corporation that is qualified to hold a new or used dealer's license. 53 |
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| 87 | 87 | | (e) (1) For the purposes of this subsection, "manufacturer" means a 54 |
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| 88 | 88 | | person, firm or corporation licensed as a manufacturer in accordance 55 |
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| 89 | 89 | | with the provisions of section 14-67a, as amended by this act, and any 56 |
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| 90 | 90 | | subsidiary, affiliate or entity owned or controlled by such 57 |
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| 91 | 91 | | manufacturer. 58 |
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| 92 | 92 | | (2) The commissioner may issue a new or used car dealer's license to 59 |
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| 93 | 93 | | a manufacturer, provided such manufacturer: (A) Does not have a 60 |
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| 94 | 94 | | franchise agreement with any new car dealer in the state; (B) 61 |
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| 95 | 95 | | manufactures only electric vehicles; (C) was licensed as a manufacturer 62 |
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| 96 | 96 | | in accordance with the provisions of section 14-67a, as amended by 63 |
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| 97 | 97 | | this act, on or before January 1, 2019; (D) sells at retail only motor 64 |
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| 98 | 98 | | vehicles manufactured by such manufacturer; (E) does not hold a 65 |
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| 99 | 99 | | controlling interest in another manufacturer, or a subsidiary, affiliate 66 |
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| 100 | 100 | | or entity owned or controlled by such other manufacturer, that is 67 |
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| 101 | 101 | | licensed as a dealer under this subsection; and (F) is not owned or 68 |
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| 102 | 102 | | controlled by another manufacturer, or a subsidiary, affiliate or entity 69 |
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| 103 | 103 | | owned or controlled by such other manufacturer, that is licensed as a 70 |
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| 104 | 104 | | dealer under this subsection. 71 |
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| 105 | 105 | | Sec. 2. Subdivisions (1) and (2) of subsection (a) of section 14-51 of 72 |
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| 106 | 106 | | the general statutes are repealed and the following is substituted in 73 |
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| 107 | 107 | | lieu thereof (Effective July 1, 2019): 74 |
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| 108 | 108 | | (1) "New car dealer" includes (A) any person, firm or corporation 75 |
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| 109 | 109 | | engaged in the business of merchandising new motor vehicles under a 76 |
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| 110 | 110 | | manufacturer's or importer's contract for each such make of vehicle, 77 |
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| 111 | 111 | | [who may] and (B) any person, firm or corporation licensed as a 78 |
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| 112 | 112 | | manufacturer, as defined in subsection (e) of section 14-52b, as 79 |
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| 113 | 113 | | amended by this act, that is engaged in the business of merchandising 80 Raised Bill No. 7142 |
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| 114 | 114 | | |
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| 115 | 115 | | |
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| 116 | 116 | | |
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| 117 | 117 | | LCO No. 3735 4 of 8 |
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| 118 | 118 | | |
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| 119 | 119 | | new motor vehicles and licensed as a new car dealer as provided in 81 |
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| 120 | 120 | | said subsection. Such person, firm or corporation may, incidental to 82 |
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| 121 | 121 | | such business, sell used motor vehicles and repair motor vehicles, [. 83 |
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| 122 | 122 | | Such person] and shall be qualified to conduct such business in 84 |
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| 123 | 123 | | accordance with the requirements of section 14-52a. 85 |
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| 124 | 124 | | (2) "Used car dealer" includes (A) any person, firm or corporation 86 |
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| 125 | 125 | | engaged in the business of merchandising motor vehicles other than 87 |
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| 126 | 126 | | new, [who] and (B) any person, firm or corporation licensed as a 88 |
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| 127 | 127 | | manufacturer, as defined in subsection (e) of section 14-52b, as 89 |
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| 128 | 128 | | amended by this act, that is engaged in the business of merchandising 90 |
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| 129 | 129 | | motor vehicles other than new and licensed as a used car dealer as 91 |
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| 130 | 130 | | provided in said subsection. Such person, firm or corporation may, 92 |
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| 131 | 131 | | incidental to such business, repair motor vehicles. A used car dealer 93 |
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| 132 | 132 | | does not include any person, firm or corporation engaged in the 94 |
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| 133 | 133 | | business of leasing or renting motor vehicles that offers for sale or sells 95 |
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| 134 | 134 | | used motor vehicles incidental to its primary business, if [(A)] such 96 |
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| 135 | 135 | | person, firm or corporation is licensed in accordance with the 97 |
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| 136 | 136 | | provisions of section 14-15, and [(B)] the motor vehicles that it offers 98 |
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| 137 | 137 | | for sale were formerly the subject of one or more lease agreements to 99 |
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| 138 | 138 | | which it was a party and the actual or prospective purchaser is the 100 |
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| 139 | 139 | | original lessee pursuant to a purchase option specified in a lease 101 |
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| 140 | 140 | | agreement. Such person, firm or corporation shall be qualified to 102 |
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| 141 | 141 | | conduct such business in accordance with the requirements of section 103 |
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| 142 | 142 | | 14-52a. 104 |
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| 143 | 143 | | Sec. 3. Section 14-67a of the general statutes is repealed and the 105 |
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| 144 | 144 | | following is substituted in lieu thereof (Effective July 1, 2019): 106 |
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| 145 | 145 | | (a) No person, firm or corporation shall engage in the business of 107 |
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| 146 | 146 | | manufacturing motor vehicles for sale in this state without having 108 |
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| 147 | 147 | | been issued a manufacturer's license, which license shall expire 109 |
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| 148 | 148 | | biennially on the last day of June. Application for such license or 110 |
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| 149 | 149 | | renewal thereof may be made to the Commissioner of Motor Vehicles 111 |
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| 150 | 150 | | in such form as the commissioner shall require. The commissioner may 112 |
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| 151 | 151 | | require with such application all of the following, which [he] the 113 Raised Bill No. 7142 |
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| 152 | 152 | | |
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| 153 | 153 | | |
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| 154 | 154 | | |
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| 155 | 155 | | LCO No. 3735 5 of 8 |
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| 156 | 156 | | |
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| 157 | 157 | | commissioner may consider in determining the fitness of such 114 |
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| 158 | 158 | | applicant to engage in business as a manufacturer of motor vehicles for 115 |
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| 159 | 159 | | sale in this state: 116 |
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| 160 | 160 | | (1) Information relating to the applicant's solvency and [his] 117 |
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| 161 | 161 | | financial standing; 118 |
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| 162 | 162 | | (2) A certified copy of any warranty made by the manufacturer or 119 |
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| 163 | 163 | | any other party in whom title to such motor vehicle may have been 120 |
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| 164 | 164 | | vested prior to possession of such motor vehicle being transferred to a 121 |
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| 165 | 165 | | person licensed under the provisions of this section; 122 |
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| 166 | 166 | | (3) A copy of the applicant's standard franchise agreement and all 123 |
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| 167 | 167 | | supplements thereto, together with a list of the applicant's authorized 124 |
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| 168 | 168 | | dealers or distributors in this state and their [address] addresses. Such 125 |
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| 169 | 169 | | applicant shall notify the commissioner immedia tely of the 126 |
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| 170 | 170 | | appointment of any additional dealers or distributors or any revisions 127 |
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| 171 | 171 | | of or additions to the basic franchise agreement on file with [him] the 128 |
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| 172 | 172 | | commissioner, or of any individual dealer or distributor supplements 129 |
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| 173 | 173 | | to such agreement. The provisions of this subdivision shall not apply 130 |
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| 174 | 174 | | to any manufacturer licensed as a new or used car dealer pursuant to 131 |
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| 175 | 175 | | subsection (e) of section 14-52b, as amended by this act; 132 |
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| 176 | 176 | | (4) A certified copy of the delivery and preparation obligations of 133 |
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| 177 | 177 | | the applicant's new car dealers, which obligations shall constitute such 134 |
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| 178 | 178 | | new car dealers' only responsibility for product liability between the 135 |
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| 179 | 179 | | dealer and the manufacturer; 136 |
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| 180 | 180 | | (5) An affidavit stating the rates such applicant pays or agrees to 137 |
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| 181 | 181 | | pay any authorized new car dealer for parts and labor used and 138 |
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| 182 | 182 | | expended by such authorized new car dealer for the manufacturer 139 |
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| 183 | 183 | | under delivery and preparation obligations under the new car 140 |
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| 184 | 184 | | warranty; 141 |
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| 185 | 185 | | (6) A biennial license fee of two thousand three hundred dollars, 142 |
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| 186 | 186 | | which fee shall not be subject to refund or proration; and 143 Raised Bill No. 7142 |
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| 187 | 187 | | |
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| 188 | 188 | | |
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| 189 | 189 | | |
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| 190 | 190 | | LCO No. 3735 6 of 8 |
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| 191 | 191 | | |
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| 192 | 192 | | (7) Any other pertinent matter commensurate with the safeguarding 144 |
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| 193 | 193 | | of the public interest. 145 |
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| 194 | 194 | | (b) An application for renewal of such license filed with the 146 |
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| 195 | 195 | | commissioner after the expiration date of such license shall be 147 |
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| 196 | 196 | | accompanied by a late fee of two hundred fifty dollars. The 148 |
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| 197 | 197 | | commissioner shall not renew any license under this section which has 149 |
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| 198 | 198 | | expired for more than forty-five days. 150 |
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| 199 | 199 | | Sec. 4. Section 42-133r of the general statutes is repealed and the 151 |
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| 200 | 200 | | following is substituted in lieu thereof (Effective July 1, 2019): 152 |
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| 201 | 201 | | As used in [sections 42-133r] this section and sections 42-133s to 42-153 |
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| 202 | 202 | | 133ee, inclusive, unless the context indicates a different meaning: 154 |
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| 203 | 203 | | (1) "Manufacturer" means any person who manufactures or 155 |
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| 204 | 204 | | assembles new motor vehicles, or imports motor vehicles for 156 |
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| 205 | 205 | | distribution to dealers or through distributors, or factory branches, but 157 |
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| 206 | 206 | | does not include any manufacturer licensed as a new or used car 158 |
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| 207 | 207 | | dealer pursuant to subsection (e) of section 14-52b, as amended by this 159 |
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| 208 | 208 | | act. 160 |
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| 209 | 209 | | (2) "Distributor" means any person who offers for sale, sells or 161 |
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| 210 | 210 | | distributes any new motor vehicle to dealers or who maintains factory 162 |
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| 211 | 211 | | representatives or who controls any person, firm, association, joint 163 |
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| 212 | 212 | | venture corporation or trust, who offers for sale, sells or distributes 164 |
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| 213 | 213 | | any new motor vehicle to dealers. 165 |
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| 214 | 214 | | (3) "Factory branch" means a branch office maintained by a 166 |
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| 215 | 215 | | manufacturer for the purpose of selling, or offering for sale, motor 167 |
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| 216 | 216 | | vehicles to a distributor or dealer, or for directing or supervising 168 |
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| 217 | 217 | | factory or distributor representatives. 169 |
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| 218 | 218 | | (4) "Owner" means any person holding an ownership interest in a 170 |
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| 219 | 219 | | business entity operating as a dealer or under a franchise as defined in 171 |
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| 220 | 220 | | this section either as a corporation, partnership or sole proprietorship. 172 |
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| 221 | 221 | | To the extent that the rights of any owner under [sections 42-133r] this 173 Raised Bill No. 7142 |
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| 222 | 222 | | |
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| 223 | 223 | | |
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| 224 | 224 | | |
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| 225 | 225 | | LCO No. 3735 7 of 8 |
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| 226 | 226 | | |
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| 227 | 227 | | section and sections 42-133s to 42-133ee, inclusive, conflict with the 174 |
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| 228 | 228 | | rights of any other owner, such rights shall accrue in priority order 175 |
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| 229 | 229 | | based on the percentage of ownership interest held by each owner 176 |
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| 230 | 230 | | with the owner having the greatest ownership interest having first 177 |
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| 231 | 231 | | priority and succeeding priority accruing to other owners in the 178 |
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| 232 | 232 | | descending order of their percentage of ownership interest. 179 |
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| 233 | 233 | | (5) "Dealership facilities" means real estate, buildings, fixtures and 180 |
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| 234 | 234 | | improvements which are used in the course of business under a 181 |
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| 235 | 235 | | franchise by a new motor vehicle dealer. 182 |
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| 236 | 236 | | (6) "Dealer" means any person engaged in the business of selling, 183 |
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| 237 | 237 | | offering to sell, soliciting or advertising the sale of new motor vehicles 184 |
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| 238 | 238 | | and who holds a valid sales and service agreement, franchise or 185 |
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| 239 | 239 | | contract, granted by a manufacturer or distributor for the retail sale of 186 |
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| 240 | 240 | | the manufacturer's or distributor's new motor vehicles. 187 |
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| 241 | 241 | | (7) "Motor vehicle" means a self-propelled vehicle intended 188 |
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| 242 | 242 | | primarily for use and operation on the public highways, other than a 189 |
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| 243 | 243 | | farm tractor or other machinery or tools used in the production, 190 |
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| 244 | 244 | | harvesting and care of farm products. 191 |
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| 245 | 245 | | (8) "New motor vehicle" means a motor vehicle which has been sold 192 |
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| 246 | 246 | | to a new motor vehicle dealer and which has not been used for other 193 |
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| 247 | 247 | | than demonstration purposes and on which the original title has not 194 |
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| 248 | 248 | | been issued from the new motor vehicle dealer. 195 |
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| 249 | 249 | | (9) "Established place of business" means a permanent, commercial 196 |
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| 250 | 250 | | building easily accessible and open to the public at reasonable times 197 |
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| 251 | 251 | | and at which the business of a new motor vehicle dealer, including the 198 |
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| 252 | 252 | | display and repair of vehicles, may be lawfully carried on. 199 |
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| 253 | 253 | | (10) "Franchise" means a written agreement or contract between a 200 |
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| 254 | 254 | | manufacturer or distributor and a dealer which purports to fix the 201 |
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| 255 | 255 | | legal rights and liabilities of the parties to such agreement or contract, 202 |
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| 256 | 256 | | and pursuant to which the dealer purchases and resells the franchise 203 |
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| 257 | 257 | | product or leases or rents the dealership premises. 204 Raised Bill No. 7142 |
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| 258 | 258 | | |
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| 259 | 259 | | |
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| 260 | 260 | | |
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| 261 | 261 | | LCO No. 3735 8 of 8 |
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| 262 | 262 | | |
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| 263 | 263 | | (11) "Good faith" means honesty in fact and the observance of 205 |
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| 264 | 264 | | reasonable commercial standards of fair dealing in the trade. 206 |
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| 265 | 265 | | (12) "Designated family member" means the spouse, child, 207 |
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| 266 | 266 | | grandchild, parent, brother or sister of an owner who, in the case of the 208 |
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| 267 | 267 | | owner's death, is entitled to inherit the ownership interest in the dealer 209 |
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| 268 | 268 | | under the terms of the owner's will, or who has been nominated in any 210 |
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| 269 | 269 | | other written instrument, or who, in the case of an incapacitated owner 211 |
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| 270 | 270 | | of a dealer, has been appointed by a court as the legal representative of 212 |
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| 271 | 271 | | the dealer's property. 213 |
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| 272 | 272 | | (13) "Person" means a natural person, partnership, corporation, 214 |
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| 273 | 273 | | limited liability company, association, trust, estate or any other legal 215 |
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| 274 | 274 | | entity. 216 |
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| 275 | 275 | | (14) "Relevant market area" means the area within a radius of 217 |
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| 276 | 276 | | fourteen miles around an existing dealer or the area of responsibility 218 |
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| 277 | 277 | | defined in a franchise, whichever is greater. 219 |
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| 278 | 278 | | (15) "Commissioner" means the Commissioner of Motor Vehicles. 220 |
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| 279 | 279 | | This act shall take effect as follows and shall amend the following |
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| 280 | 280 | | sections: |
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| 281 | 281 | | |
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| 282 | 282 | | Section 1 July 1, 2019 14-52b |
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| 283 | 283 | | Sec. 2 July 1, 2019 14-51(a)(1) and (2) |
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| 284 | 284 | | Sec. 3 July 1, 2019 14-67a |
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| 285 | 285 | | Sec. 4 July 1, 2019 42-133r |
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| 286 | 286 | | |
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| 287 | 287 | | Statement of Purpose: |
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| 288 | 288 | | To authorize the Commissioner of Motor Vehicles to issue a new or |
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| 289 | 289 | | used car dealer's license to an electric vehicle manufacturer. |
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| 290 | 290 | | [Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, |
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| 291 | 291 | | except that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is |
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| 292 | 292 | | not underlined.] |
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| 293 | 293 | | |
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