Connecticut Seal

General Assembly

 

Raised Bill No. 6682

January Session, 2015

 

LCO No. 3075

 

*03075_______TRA*

Referred to Committee on TRANSPORTATION

 

Introduced by:

 

(TRA)

 

AN ACT CONCERNING THE 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 Section 14-52b of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2015):

(a) In the event a manufacturer licensed in accordance with the provisions of section 14-67a cancels, terminates or fails to renew any franchise, as defined in section 42-133r, with a new car dealer, as defined in section 14-51, the Commissioner of Motor Vehicles, upon receipt of written notice of such action by the manufacturer, shall, unless the dealer holds one or more additional franchises, demand that such new car dealer surrender such license to the commissioner. If such action is contested by such dealer in accordance with the provisions of sections 42-133r to 42-133ee, inclusive, the commissioner shall not demand surrender of such license, and no replacement motor vehicle dealer shall be named for the dealer's point or location, except in accordance with subdivision (10) of section 42-133cc, until the proceedings to contest such action by the manufacturer are finally determined after all means of administrative, judicial and appellate review have been exhausted and the decision is adverse to the dealer.

(b) Except as provided in subsections (c) [and (d)] to (e), inclusive, of this section, no person, firm or corporation licensed as a manufacturer in accordance with the provisions of section 14-67a may be the holder of a new or used car dealer's license issued in accordance with the provisions of section 14-52, as amended by this act, except a manufacturer may operate as a dealer on a temporary basis in accordance with the provisions of subdivision (8) of section 42-133cc. The provisions of this subsection shall apply to any firm or corporation that is owned or controlled by a manufacturer, as determined by the commissioner. Any applicant for a new or used car dealer license that is denied a license under the provisions of this subsection shall be entitled to a hearing in accordance with the provisions of chapter 54.

(c) Notwithstanding the provisions of subsection (b) of this section, the commissioner may issue a used car dealer's license to a person, firm or corporation, owned or controlled by a manufacturer, engaged primarily in the business of rental of motor vehicles and industrial and construction equipment, provided: (1) Motor vehicles offered for sale by any such person, firm or corporation are limited to motor vehicles that have been previously used exclusively and regularly in the conduct of the business or motor vehicles traded in by purchasers of such previously used motor vehicles, (2) any warranty repairs performed by such person, firm or corporation are limited to motor vehicles that such person, firm or corporation owns, has previously owned, or has taken in trade, and (3) any retail financing provided or arranged by such person, firm or corporation is limited to vehicles sold by such person, firm or corporation.

(d) The commissioner may extend the period of a license issued to a manufacturer to operate a dealership on a temporary basis, in accordance with the provisions of subsection (b) of this section and subdivision (8) of section 42-133cc, for not more than one additional year, up to a maximum period of two years, if the commissioner is satisfied that such manufacturer has made and is continuing to make bona fide efforts to sell and transfer the dealership to a person, firm or corporation that is qualified to hold a new or used dealer's license.

(e) Notwithstanding the provisions of subsection (b) of this section, the commissioner may issue a new or used car dealer's license to a person, firm or corporation licensed as a manufacturer in accordance with the provisions of section 14-67a, or owned or controlled by such manufacturer, provided such manufacturer (1) does not have any franchise agreement with any new car dealers in the state, and (2) sells only motor vehicles manufactured by such manufacturer.

Sec. 2. Subdivisions (1) and (2) of subsection (a) section 14-51 of the general statutes are repealed and the following is substituted in lieu thereof (Effective October 1, 2015):

(1) "New car dealer" includes (A) any person, firm or corporation engaged in the business of merchandising new motor vehicles under a manufacturer's or importer's contract for each such make of vehicle, [who may, incidental to such business, sell used motor vehicles and repair motor vehicles. Such person] and (B) any person, firm or corporation licensed as a manufacturer in accordance with the provisions of section 14-67a, or owned or controlled by such manufacturer, that is engaged in the business of merchandising new motor vehicles and licensed as a new car dealer as provided in subsection (e) of section 14-52b, as amended by this act. Such person, firm or corporation may, incidental to such business, sell used motor vehicles and repair motor vehicles, and shall be qualified to conduct such business in accordance with the requirements of section 14-52a.

(2) "Used car dealer" includes (A) any person, firm or corporation engaged in the business of merchandising motor vehicles other than new, [who] and (B) any person, firm or corporation licensed as a manufacturer in accordance with the provisions of section 14-67a, or owned or controlled by such manufacturer, that is engaged in the business of merchandising motor vehicles other than new and licensed as a used car dealer as provided in subsection (e) of section 14-52b, as amended by this act. Such person, firm or corporation may, incidental to such business, repair motor vehicles. A used car dealer does not include any person, firm or corporation engaged in the business of leasing or renting motor vehicles that offers for sale or sells used motor vehicles incidental to its primary business, if [(A)] such person, firm or corporation is licensed in accordance with the provisions of section 14-15, and [(B)] the motor vehicles that it offers for sale were formerly the subject of one or more lease agreements to which it was a party and the actual or prospective purchaser is the original lessee pursuant to a purchase option specified in a lease agreement. Such person shall be qualified to conduct such business in accordance with the requirements of section 14-52a.

This act shall take effect as follows and shall amend the following sections:

Section 1

October 1, 2015

14-52b

Sec. 2

October 1, 2015

(a) 14-51(1) and (2)

Statement of Purpose:

To allow manufacturers who do not have franchise agreements with any car dealers in the state to be licensed as new and used car dealers for the purpose of selling such manufacturer's products.

[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.]