Researcher: JP Page 1 4/11/22
OLR Bill Analysis
sSB 214
AN ACT CONCERNING THE SALE OF ELECTRIC VEHICLES IN THE
STATE.
SUMMARY
This bill expands the ability of certain licensed motor vehicle
manufacturers to sell their vehicles directly to consumers in Connecticut
under specific conditions. It does this by authorizing the Department of
Motor Vehicles (DMV) commissioner to issue a new or used car dealer’s
license to a manufacturer meeting certain requirements.
Current law bars motor vehicle manufacturers from holding a new
or used car dealer’s license except that:
1. the DMV commissioner may issue a used car dealer’s license to a
person, firm, or corporation owned or controlled by a
manufacturer, primarily in the business of renting motor vehicles
and industrial and construction equipment under certain
conditions, and
2. a manufacturer may operate a dealership for up to one year (or
two years if the commissioner makes certain determinations).
The bill also makes technical and conforming changes.
EFFECTIVE DATE: October 1, 2022
MOTOR VEHICLE MANUFACTURER DIRECT SALE CRITERIA
To qualify for a new or used car dealer’s license under the bill, a
licensed manufacturer:
1. cannot have a franchise agreement with a new car dealer in
Connecticut;
2. must manufacture only “battery electric vehicles;” 2022SB-00214-R000397-BA.DOCX
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3. must sell at retail only vehicles it makes; and
4. cannot hold a controlling interest in, or be owned or controlled
by, (a) another manufacturer or (b) a subsidiary, affiliate, or
entity owned or controlled by another manufacturer and licensed
as a dealer under the bill.
By law and under the bill, a “battery electric vehicle” operates solely
by use of a battery or battery pack or is primarily powered by an electric
battery or battery pack and uses a flywheel or capacitor that stores
energy produced by an electric motor or through regenerative braking
to assist in its operation (CGS § 16-19eee). The bill exempts a
manufacturer who meets these qualifications from motor vehicle
franchise laws (see BACKGROUND).
Under the bill, a “manufacturer” is any person, firm, or corporation
licensed as a motor vehicle manufacturer under state law and any
subsidiary, affiliate, or entity it owns or controls. The bill expands the
statutory definitions of “new car dealer” and “used car dealer” to
include such a manufacturer and generally subjects the manufacturer to
the rules governing these dealers. Under the bill, if a manufacturer is
licensed as a new car dealer, it may also repair vehicles and sell used
vehicles; if licensed as a used car dealer, it may also repair vehicles.
BACKGROUND
Motor Vehicle Franchises and Dealerships
Under the laws governing motor vehicle franchises, a motor vehicle
“manufacturer” makes or assembles new motor vehicles or imports
them for distribution to dealers or through distributors or factory
branches. A “dealer” sells motor vehicles and holds a valid sales and
service agreement, franchise, or contract with a manufacturer or
distributor for retail sale of the manufacturer’s or distributor’s new
motor vehicles (CGS § 42-133r).
The motor vehicle franchise laws set out, among other things, the
respective obligations of manufacturers and dealerships (CGS §§ 42-
133r to 42-133ee). They generally prohibit a manufacturer from unfairly 2022SB-00214-R000397-BA.DOCX
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competing with a dealer who sells the manufacturer’s “line make” of
vehicles (e.g., Toyota or Ford) and is operating under an agreement or
franchise with the manufacturer in the relevant market area (CGS § 42-
133cc(8)).
Motor Vehicle Dealer Laws and Regulations
Motor vehicle dealers are subject to laws governing vehicle sales,
registration, and recordkeeping, among other things.
DMV requires new and used car dealers to pay a biennial license fee
of $700 and $560, respectively. These dealers also must post a $50,000
surety bond and comply with applicable state and federal laws, such as
submitting to national and state criminal history record checks (but see
BACKGROUND, for related bill). The commissioner may refuse to grant
or renew a license if the dealer, or an officer or major stockholder of the
dealer, has been convicted of violating any laws pertaining to the
business or certain other crimes, such as fraud. She may also consider
certain civil judgments against dealer and repairer license applicants
when deciding whether to grant or renew those licenses (CGS §§ 14-52
& 14-52a).
Dealers must follow motor vehicle laws and regulations in such areas
as use of dealer plates, record-keeping, sales agreements, vehicle
registration, and customer complaints (Conn. Agencies Regs. § 14-63-1
et seq.).
Related Bill
sSB 333, §§ 2 & 3, favorably reported by the Transportation
Committee, increases the surety bond amounts for applicants of new or
used car dealer’s licenses from $50,000 to $60,000 and requires
applicants to be fingerprinted.
COMMITTEE ACTION
Transportation Committee
Joint Favorable Substitute
Yea 21 Nay 14 (03/24/2022)