HF 2912

as introduced - 87th Legislature (2011 - 2012) Posted on 03/15/2012 11:57am

A bill for an act
relating to commerce; motor vehicles; amending regulation of scrap metal
processing; requiring proof of ownership or hold period for vehicles purchased
for scrap; creating the automated property system; creating criminal penalties;
amending Minnesota Statutes 2010, sections 168.27, subdivisions 1a, 19a, 23,
24; 168A.153, subdivisions 1, 2; 325E.21, subdivisions 1, 1a, 3, 8, 9; proposing
coding for new law in Minnesota Statutes, chapter 168A.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2010, section 168.27, subdivision 1a, is amended to read:

Subd. 1a.

Dealer license categories.

(a) No person shall engage in the business of
selling new motor vehicles or shall offer to sell, solicit, deliver, or advertise the sale of
new motor vehicles without first acquiring a new motor vehicle dealer license.

(b) No person shall engage in the business of selling used motor vehicles or shall
offer to sell, solicit, deliver, or advertise the sale of used motor vehicles without first
acquiring a used motor vehicle dealer license.

(c) No person shall engage in the business of buying or otherwise acquiring deleted text begin vehicles
other than hulks; or deleted text end new text begin , new text end offering to buy or otherwise acquire, or soliciting or advertising the
buying or acquiring of deleted text begin , deleted text end vehicles deleted text begin other than hulks deleted text end for processing and selling the metal for
remelting without first acquiring a scrap metal processor license.

deleted text begin For purposes of this paragraph, a "hulk" is a motor vehicle that is incapable, under
its own power, of moving and is incapable of transporting persons or property and has had
valuable used parts removed. Its sole value is its metallic content.
deleted text end

(d) No person shall be primarily engaged in the business of buying or otherwise
acquiring vehicles for the purpose of dismantling the vehicles and selling used parts and
the remaining scrap metals without first acquiring a used vehicle parts dealer license.

(e) No person shall engage in the business of storing and displaying, offering to store
or display, or soliciting or advertising the storing or displaying, for sale, of damaged
or junked vehicles as an agent or escrow agent of an insurance company without first
acquiring a vehicle salvage pool license.

(f) No person shall engage in the business of leasing motor vehicles or shall offer to
lease, solicit or advertise to lease motor vehicles without first acquiring a motor vehicle
lessor license.

(g) No person shall engage in the business of wholesaling motor vehicles to dealers
for resale or shall offer to sell, solicit or advertise the sale of motor vehicles to dealers for
resale without first acquiring a motor vehicle wholesaler license.

(h) No person shall engage in the business of auctioning motor vehicles for more
than one owner at an auction or shall offer to sell, solicit or advertise the sale of motor
vehicles at auction without first acquiring a motor vehicle auctioneer license.

(i) No person shall engage in the business of brokering motor vehicles without first
acquiring a motor vehicle broker's license.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2012.
new text end

Sec. 2.

Minnesota Statutes 2010, section 168.27, subdivision 19a, is amended to read:

Subd. 19a.

Injunction.

The commissioner or a county attorney may institute a civil
action in the name of the state in district court for an injunction prohibiting a violation of
this section new text begin , section 168A.1525, or section 325E.21, new text end and for civil penalties not to exceed
$1,000 for each violation of subdivision 2, 3, new text begin 3a, new text end 4, 5a, 6, 7, or 7a. The court, upon proper
proof that the defendant has engaged in a practice prohibited by this section new text begin , section
168A.1525, or section 325E.21 new text end , may enjoin the future commission of that practice and
award civil penalties for violations of subdivision 2, 3, new text begin 3a, new text end 4, 5a, 6, 7, or 7a. It is not a
defense to an action that the state may have adequate remedies at law. Service of process
must be as in any other civil suit, except that where a defendant in the action is a natural
person or firm residing outside the state, or is a foreign corporation, service of process
may also be made by personal service outside the state; in the manner provided by section
5.25; or as the court may direct. Process is valid if it satisfies the requirements of due
process of law, whether or not the defendant is doing business in Minnesota regularly or
habitually. Nothing in this subdivision limits the rights or remedies otherwise available to
persons under common law or other statutes of this state.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2012.
new text end

Sec. 3.

Minnesota Statutes 2010, section 168.27, subdivision 23, is amended to read:

Subd. 23.

Registrar may file charges new text begin ; county attorney to prosecute new text end .

The
registrar or the registrar's appointed inspectors may file charges with the county attorney
against any licensee who violates any of the provisions of this section, including but
not limited to, the grounds for suspension or revocation set out in subdivision 12. new text begin The
county attorney may file criminal charges against any licensee who violates this section,
section 168A.1525, or section 325E.21.
new text end

Sec. 4.

Minnesota Statutes 2010, section 168.27, subdivision 24, is amended to read:

Subd. 24.

Bonds.

(a) Except as otherwise provided in this subdivision, all persons
licensed according to this section shall keep in full force and effect a bond with a corporate
surety to be approved by the registrar of motor vehicles in the following amounts; in the
case of boat trailer, snowmobile trailer, horse trailer or motorized bicycle dealers, or
dealers in trailers with a manufacturer's rated carrying capacity under 15,000 pounds
designed to transport small construction or farm equipment, in the amount of $5,000;
and as to all other persons in the amount of $50,000. The bond must be conditioned on
the faithful performance by the licensee of the obligations imposed on persons engaged
in motor vehicle transactions by the laws of this state, including the conduct required
of a licensee by this section new text begin , section 168A.1525, new text end and other sections governing the sale
or transfer of motor vehicles, and the payment of all taxes, license fees, and penalties.
The bond must be for the benefit of the state of Minnesota and any transferor, seller, deleted text begin or deleted text end
purchaser new text begin , or owner new text end of a motor vehicle for any monetary loss caused by failure of the
licensee to meet the obligations enumerated above. Proceedings on the forfeiture of the
bonds must be commenced in the district court of the county wherein the business of
the licensed person was carried on, or if in more than one county, the county in which
the offense occurred. This subdivision does not apply to a used vehicle parts dealer deleted text begin or
a scrap metal processor deleted text end .

(b) This subdivision does not apply to:

(1) a dealer in new trailers designed to transport small construction or farm
equipment in any year following a year in which the dealer had less than $500,000 in gross
receipts from the sale of such trailers; or

(2) a dealer in new trailers designed to transport small construction or farm
equipment who has been a dealer in such trailers for less than one year and who the
department reasonably determines will have gross receipts of less than $500,000 during
the first year of business.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2012.
new text end

Sec. 5.

new text begin [168A.1525] SCRAP METAL PROCESSORS; PROOF OF VEHICLE
OWNERSHIP; PENALTIES.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the following terms
have the meanings given them.
new text end

new text begin (b) "Identification" means a valid Minnesota driver's license, a valid Minnesota
identification card, or a valid driver's license or identification card issued by another
state or province of Canada.
new text end

new text begin (c) "Public impound lot" has the meaning given in section 168B.011.
new text end

new text begin (d) "Scrap metal processor" means a licensee under section 168.27, subdivision 3a.
new text end

new text begin Subd. 2. new text end

new text begin Vehicles with proof of ownership; no hold period. new text end

new text begin Except as provided in
subdivision 3, no scrap metal processor shall purchase a motor vehicle without receiving
the following from the seller:
new text end

new text begin (1) the vehicle title and lien releases, if the vehicle is subject to any liens, or an
official bill of sale issued by a public impound lot, each listing the vehicle identification
number;
new text end

new text begin (2) proof of seller's identification matching the name listed on the vehicle title or
official bill of sale issued by a public impound lot; and
new text end

new text begin (3) a statement signed by the seller, under penalty of perjury, attesting that the motor
vehicle is not stolen and is free of any liens or encumbrances and that the seller has the
right to sell the motor vehicle.
new text end

new text begin Subd. 3. new text end

new text begin Vehicle without proof of ownership; 15-day hold. new text end

new text begin (a) If the seller does
not provide the information required in subdivision 2, no scrap metal processor shall
purchase a motor vehicle unless the seller:
new text end

new text begin (1) agrees in writing to a conditional sale with a 15-day hold on completion of
the transaction, excluding Saturdays, Sundays, and holidays, pending verification that
the vehicle is not stolen;
new text end

new text begin (2) provides proof of seller's identification; and
new text end

new text begin (3) signs a statement, under penalty of perjury, attesting that the motor vehicle is
not stolen and is free of any liens or encumbrances and that the seller has the right to sell
the motor vehicle.
new text end

new text begin (b) At the end of the 15-day hold, the scrap metal processor shall check the vehicle
identification number with the registrar and the local law enforcement agency having
jurisdiction over the scrap metal processor's business to determine whether the vehicle has
been reported as stolen. If the vehicle is not reported as stolen, the scrap metal processor
may complete the purchase and disburse funds to the seller. If the vehicle is reported as
stolen, the scrap metal processor shall cancel the conditional sale of the vehicle and notify
law enforcement of the vehicle's location.
new text end

new text begin (c) A scrap metal processor shall not scrap, resell, dismantle, remove, or in any way
destroy a motor vehicle during the pendency of the 15-day hold period.
new text end

new text begin Subd. 4. new text end

new text begin Disbursement of funds. new text end

new text begin A scrap metal processor shall disburse funds for a
transaction under this section in accordance with section 325E.21, subdivision 3.
new text end

new text begin Subd. 5. new text end

new text begin Criminal penalties. new text end

new text begin (a) Except as provided in paragraphs (b) and (c),
a scrap metal processor, or an agent, employee, or representative of the scrap metal
processor, who intentionally violates this section, is guilty of a misdemeanor.
new text end

new text begin (b) A scrap metal processor, or an agent, employee, or representative of the scrap
metal processor, who is convicted of violating this section a second time within a period of
five years, is guilty of a gross misdemeanor.
new text end

new text begin (c) A scrap metal processor, or an agent, employee, or representative of the scrap
metal processor, who is convicted of violating this section a third or subsequent time
within a period of five years is guilty of a felony and may be sentenced to imprisonment
for not more than three years or to payment of a fine of not more than $5,000, or both.
new text end

new text begin Subd. 6. new text end

new text begin Remedy not exclusive. new text end

new text begin Criminal penalties under this section are in
addition to other remedies provided by law.
new text end

new text begin Subd. 7. new text end

new text begin Ordinances. new text end

new text begin A municipality may adopt by ordinance restrictions on
purchases of motor vehicles for scrap that are more stringent than the restrictions in this
section.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2012, and applies to crimes
committed on or after that date.
new text end

Sec. 6.

Minnesota Statutes 2010, section 168A.153, subdivision 1, is amended to read:

Subdivision 1.

deleted text begin Older model vehicle deleted text end new text begin Report to department new text end .

A dealer who buys deleted text begin an
older model deleted text end new text begin a motor new text end vehicle to be dismantled or destroyed shall report to the department
within 30 days including the vehicle's license plate number and identification number, and
the seller's name and driver's license number.

Sec. 7.

Minnesota Statutes 2010, section 168A.153, subdivision 2, is amended to read:

Subd. 2.

deleted text begin Late-model or high-value vehicle deleted text end new text begin Report to secured party new text end .

A dealer
who buys a deleted text begin late-model or high-value deleted text end new text begin motor new text end vehicle to be dismantled or destroyed shall
notify the secured party, if any, and the commissioner in the manner prescribed in
subdivision 3. The dealer must then properly destroy the certificate of title.

Sec. 8.

Minnesota Statutes 2010, section 325E.21, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

(a) For purposes of this section, the terms defined in
this subdivision have the meanings given.

(b) "Law enforcement agency" or "agency" means a duly authorized municipal,
county, state, or federal law enforcement agency.

(c) "Person" means an individual, partnership, limited partnership, limited liability
company, corporation, or other entity.

(d) "Scrap metal" means:

(1) wire and cable commonly and customarily used by communication and electric
utilities; and

(2) copper, aluminum, or any other metal purchased primarily for its reuse or
recycling value as raw metal, including metal that is combined with other materials
at the time of purchase.

(e) "Scrap metal dealer" or "dealer" means a new text begin scrap metal processor as defined in
section 168.27, subdivision 3a, a used vehicle parts dealer as defined in section 168.27,
subdivision 3, or a new text end person engaged in the business of buying or selling scrap metal, or
both, but does not include a person engaged exclusively in the business of buying or
selling deleted text begin new or used motor vehicles or motor vehicle parts, deleted text end paper or wood products, rags or
furniture, or secondhand machinery.

new text begin (f) "Interchange file specification format" means the current version of the
Minneapolis automated property system interchange file specification format.
new text end

new text begin (g) "Billable transaction fee" means the fee assessed by the Minneapolis automated
property system.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2012.
new text end

Sec. 9.

Minnesota Statutes 2010, section 325E.21, subdivision 1a, is amended to read:

Subd. 1a.

Purchase or acquisition record required.

(a) Every deleted text begin scrap metal deleted text end
dealer, including an agent, employee, or representative of the dealer, shall deleted text begin keep deleted text end new text begin create new text end a
new text begin permanent record, new text end written new text begin in English, using ink or an electronic new text end record new text begin program, new text end at the
time of each purchase or acquisition of scrap metal. The record must include:

(1) deleted text begin an deleted text end new text begin a complete and new text end accurate account or description, including the weight if
customarily purchased by weight, of the scrap metal purchased or acquired;

new text begin (2) if the scrap metal purchased or acquired is a motor vehicle, the vehicle
identification number, license plate number, state and year of issue, vehicle make, model,
and color, and any applicable hold period under section 168A.1525;
new text end

deleted text begin (2) deleted text end new text begin (3) new text end the date, time, and place of the receipt of the scrap metal purchased or
acquired new text begin , including a unique transaction identifier new text end ;

deleted text begin (3) deleted text end new text begin (4) new text end the new text begin full new text end name deleted text begin and deleted text end new text begin , residence new text end address new text begin , primary telephone number, and an
accurate description new text end of the person selling or delivering the scrap metal new text begin , including the
person's gender, height, weight, race if known, eye color, and hair color new text end ;

deleted text begin (4) deleted text end new text begin (5) the amount paid and new text end the number of the check deleted text begin or electronic transfer deleted text end used to
purchase the scrap metal;

deleted text begin (5) deleted text end new text begin (6) new text end the new text begin identification new text end number new text begin and state of issue new text end of the seller's or deliverer's
new text begin valid new text end driver's license, new text begin valid new text end Minnesota identification card number, or other identification
document number of deleted text begin an deleted text end new text begin a valid new text end identification document issued for identification purposes
by any state deleted text begin , federal, or foreign government deleted text end new text begin or province of Canada, new text end if the document
includes the person's photograph, full name, birth date, and signature; deleted text begin and
deleted text end

deleted text begin (6) deleted text end new text begin (7) new text end the license plate number and description of the vehicle used by the person
when delivering the scrap metal, new text begin including the vehicle make and model, new text end and any
identifying marks on the vehicle, such as a business name, decals, or markings, if
applicable new text begin ;
new text end

new text begin (8) a digital color photograph or single frame color image from a digital video
recording that clearly and accurately depicts the scrap metal offered for sale, including
the license plate if the scrap metal is a motor vehicle; and
new text end

new text begin (9) a statement signed by the seller, under penalty of perjury, attesting that the scrap
metal is not stolen and is free of any liens or encumbrances and the seller has the right
to sell it new text end .

(b) The record, as well as the scrap metal purchased or received, shall at all
reasonable times be open to the inspection of any law enforcement agency.

new text begin (c) Dealers must comply and accurately provide all the record information required
in paragraph (a), by electronically transferring it to the automated property system by the
close of business day using the interchange file specification format. If the dealer does
not have an electronic point-of-sale program, it may request to be provided software by
the automated property system, free of charge, to record the information required in this
section. If the dealer uses a commercially available electronic point-of-sale program
to record the information required in this section, it must submit the information using
the interchange file specification format. If requested, the automated property system
will assist the dealer's point-of-sale software company to develop an interchange file
specification compliant interface. Any record submitted by a dealer that does not conform
to the interchange file specification format must be corrected and resubmitted the next
business day. The licensee must display a sign of sufficient size, in a conspicuous
place in the premises, which informs all patrons that all transactions are reported to law
enforcement daily.
new text end

new text begin (d) If the scrap metal purchased or acquired is a motor vehicle, the dealer shall also
enter title information in the National Motor Vehicle Title Information System.
new text end

deleted text begin (c) deleted text end new text begin (e) new text end No record is required for property purchased from merchants, manufacturers
or wholesale dealers, having an established place of business, or of any goods purchased
at open sale from any bankrupt stock, but a bill of sale or other evidence of open or
legitimate purchase of the property shall be obtained and kept by the person, which must
be shown upon demand to any law enforcement agency.

new text begin (f) Law enforcement agencies where any dealer is located shall conduct regular and
routine inspections to ensure compliance and refer violations for criminal prosecution to
county attorney offices and notify the registrar.
new text end

new text begin (g) Local jurisdictions in which dealers who report purchases under paragraph (c)
are located are authorized to recover costs associated with ensuring compliance with
paragraphs (c) and (f), including billable transaction fees.
new text end

deleted text begin (d) deleted text end new text begin (h) new text end Except as otherwise provided in this section, a scrap metal dealer or the
dealer's agent, employee, or representative may not disclose personal information
concerning a customer without the customer's consent unless the disclosure is made
in response to a request from a law enforcement agency. A scrap metal dealer must
implement reasonable safeguards to protect the security of the personal information and
prevent unauthorized access to or disclosure of the information. For purposes of this
paragraph, "personal information" is any individually identifiable information gathered in
connection with a record under paragraph (a).

new text begin (i) The dealer must provide a receipt to the seller in every transaction and must
maintain a duplicate of each receipt for three years. The receipt must include the following
information: the name and address of the dealer, the date and time the scrap metal was
received by the dealer, an accurate description of the scrap metal, the signature of the
seller, and the amount paid for the scrap metal.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2012.
new text end

Sec. 10.

Minnesota Statutes 2010, section 325E.21, subdivision 3, is amended to read:

Subd. 3.

Payment by check or electronic transfer required.

new text begin (a) new text end A deleted text begin scrap metal deleted text end
dealer or the dealer's agent, employee, or representative shall pay for all scrap metal
purchases only by check deleted text begin or electronic transfer deleted text end . new text begin Checks shall be payable only to the
individual providing proof of identification at the time of purchase. The dealer or the
dealer's agent, employee, or representative must send a check by certified mail, return
receipt requested, to the seller's home or business address on the first business day
following the completion of the transaction.
new text end

new text begin (b) For purchases other than scrap metal, the dealer or the dealer's agent, employee,
or representative may pay for the item by check or electronic transfer.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2012.
new text end

Sec. 11.

Minnesota Statutes 2010, section 325E.21, subdivision 8, is amended to read:

Subd. 8.

deleted text begin Property held by law enforcement deleted text end new text begin Investigative holds; confiscation
of scrap metal new text end .

(a) Whenever a law enforcement official from any agency deleted text begin has probable
cause to believe that property in the possession of deleted text end new text begin notifies new text end a deleted text begin scrap metal deleted text end dealer deleted text begin is stolen or
is evidence of a crime and notifies the dealer deleted text end not to sell deleted text begin the deleted text end new text begin an new text end item, deleted text begin the item may not be
sold or removed deleted text end new text begin the dealer shall not process or sell the item or remove or allow its removal
new text end from the premises. This investigative hold deleted text begin remains deleted text end new text begin must be confirmed in writing by the
originating agency within 72 hours and will remain new text end in effect for deleted text begin 90 deleted text end new text begin 30 new text end days from the date
of initial notification, deleted text begin or deleted text end until deleted text begin it deleted text end new text begin the investigative hold new text end is canceled or deleted text begin a seizure order is
issued deleted text end new text begin renewed, or until an order to confiscate is issued new text end , whichever comes first.

(b) If an item is identified as stolen or evidence in a criminal case, deleted text begin the deleted text end new text begin a new text end law
enforcement official new text begin or their designee new text end may:

(1) physically deleted text begin seize deleted text end new text begin confiscate new text end and remove it from the dealer, pursuant to a written
order deleted text begin from the law enforcement official deleted text end ; or

(2) place the item on hold or extend the hold deleted text begin as provided in this section and leave it
in the shop deleted text end new text begin under paragraph (a) for up to 30 days and leave it in the licensed premise new text end .

deleted text begin (c) deleted text end When an item is deleted text begin seized deleted text end new text begin confiscated new text end , the person doing so shall provide
identification upon request of the dealer, and shall provide deleted text begin the dealer deleted text end the name and
telephone number of the deleted text begin seizing deleted text end new text begin confiscating new text end agency and investigator, and the case number
related to the deleted text begin seizure deleted text end new text begin confiscation new text end .

deleted text begin (d) A dealer may request seized property be returned in accordance with section
626.04.
deleted text end

deleted text begin (e) deleted text end new text begin (c) new text end When an new text begin investigative hold or new text end order to deleted text begin hold or seize deleted text end new text begin confiscate new text end is no longer
necessary, the law enforcement official new text begin or their designee new text end shall so notify the deleted text begin dealer deleted text end new text begin licensee new text end .

new text begin (d) If an order to confiscate is not issued during the investigative hold or a law
enforcement official does not physically remove the motor vehicle from the premises
within 15 calendar days from issuance of the order, a dealer may process or otherwise
dispose of the motor vehicle.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2012.
new text end

Sec. 12.

Minnesota Statutes 2010, section 325E.21, subdivision 9, is amended to read:

Subd. 9.

Video security cameras required.

(a) Each deleted text begin scrap metal deleted text end dealer shall install
and maintain at each location new text begin digital color new text end video surveillance cameras deleted text begin , deleted text end new text begin or digital color new text end
still deleted text begin digital deleted text end cameras deleted text begin , or similar devices deleted text end positioned to record or photograph a frontal view
showing new text begin a readily identifiable image of new text end the face of each seller or prospective seller of scrap
metal who enters the location. The deleted text begin scrap metal deleted text end dealer shall also photograph the seller's or
prospective seller's vehicle, including license plate, either by new text begin digital color new text end video camera
or new text begin digital color new text end still deleted text begin digital deleted text end camera, so that an accurate and complete description of it may
be obtained from the recordings made by the cameras. The new text begin digital color new text end video camera
or still deleted text begin digital deleted text end camera must be kept in operating condition new text begin and must be shown to a law
enforcement officer for inspection upon request new text end . The camera must record and display the
accurate date and time. The video camera must be turned on at all times when the location
is open for business and at any other time when scrap metal is purchased.

(b) If the deleted text begin scrap metal deleted text end dealer does not purchase some or any scrap metal at a specific
business location, the dealer need not comply with this subdivision with respect to those
purchases.

new text begin (c) Recordings and images required by paragraph (a) shall be retained by the dealer
for a minimum period of 90 days and shall at all reasonable times be open to the inspection
of any law enforcement agency.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2012.
new text end