1.1                          A bill for an act 
  1.2             relating to commerce; requiring licensing of motor 
  1.3             vehicle brokers; permitting a new motor vehicle dealer 
  1.4             to contract for the services of a motor vehicle broker 
  1.5             and to pay a fee for those services; amending 
  1.6             Minnesota Statutes 1996, section 168.27, subdivisions 
  1.7             1, 10, and by adding a subdivision. 
  1.8   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.9      Section 1.  Minnesota Statutes 1996, section 168.27, 
  1.10  subdivision 1, is amended to read: 
  1.11     Subdivision 1.  [DEFINITIONS.] For the purposes of this 
  1.12  section, the following terms have the meanings given them: 
  1.13     (1) "Leasing motor vehicles" means furnishing a motor 
  1.14  vehicle for a fee under a bailor-bailee relationship where no 
  1.15  incidences of ownership are intended to be transferred other 
  1.16  than the right to use the vehicle for a stated period of time. 
  1.17     (2) "Brokering motor vehicles" means arranging sales or 
  1.18  leases between willing buyers and sellers, or lessees and 
  1.19  lessors, of motor vehicles and receiving a fee for said service 
  1.20  those services. 
  1.21     (3) "Wholesaling motor vehicles" means selling new or used 
  1.22  motor vehicles to dealers for resale to the public. 
  1.23     (4) "Auctioning motor vehicles" means arranging for and 
  1.24  handling the sale of motor vehicles, not the property of the 
  1.25  auctioneer, to the highest bidder. 
  1.26     (5) "Dealer" includes licensed new motor vehicle dealers, 
  2.1   used motor vehicle dealers, motor vehicle brokers, wholesalers, 
  2.2   auctioneers, lessors of new or used motor vehicles, scrap metal 
  2.3   processors, used vehicle parts dealers, and salvage pools. 
  2.4      (6) "Commercial building" means a permanent, enclosed 
  2.5   building that is on a permanent foundation and connected to 
  2.6   local sewer and water facilities or otherwise complying with 
  2.7   local sanitary codes, is adapted to commercial use, and conforms 
  2.8   to local government zoning requirements.  "Commercial building" 
  2.9   may include strip office malls or garages if a separate entrance 
  2.10  and a separate address are maintained and the dealership is 
  2.11  clearly identified as a separate business. 
  2.12     (7) "Commercial office space" means office space occupying 
  2.13  all or part of a commercial building. 
  2.14     (8) "Horse trailer" is a trailer designed and used to carry 
  2.15  horses and other livestock, which has not more than three axles 
  2.16  and a maximum gross weight capacity of not more than 24,000 
  2.17  pounds. 
  2.18     (9) "Isolated or occasional sales or leases" means the sale 
  2.19  or lease of not more than five motor vehicles in a 12-month 
  2.20  period, exclusive of pioneer or classic motor vehicles as 
  2.21  defined in section 168.10, subdivisions 1a and 1b, or sales by a 
  2.22  licensed auctioneer selling motor vehicles at an auction if, in 
  2.23  the ordinary course of the auctioneer's business, the sale of 
  2.24  motor vehicles is incidental to the sale of other real or 
  2.25  personal property. 
  2.26     (10) "Used motor vehicle" means a motor vehicle for which 
  2.27  title has been transferred from the person who first acquired it 
  2.28  from the manufacturer, distributor, or dealer.  A new motor 
  2.29  vehicle will not be considered a used motor vehicle until it has 
  2.30  been placed in actual operation and not held for resale by an 
  2.31  owner who has been granted a certificate of title on the motor 
  2.32  vehicle and has registered the motor vehicle in accordance with 
  2.33  this chapter and chapters 168A and 297B, or the laws of the 
  2.34  residence of the owner.  
  2.35     (11) "New motor vehicle" means a motor vehicle other than 
  2.36  described in paragraph (10).  
  3.1      (12) "Junked vehicle" means a vehicle that is declared 
  3.2   unrepairable under section 168A.151. 
  3.3      (13) "Motor vehicle" has the meaning given it in section 
  3.4   168.011, subdivision 4, and also includes a park trailer as 
  3.5   defined in section 168.011, subdivision 8. 
  3.6      (14) "Motor vehicle broker" means a person, other than a 
  3.7   new or used motor vehicle dealer, who arranges the sale of a 
  3.8   motor vehicle between a buyer and a seller, or the lease of a 
  3.9   motor vehicle between a lessee and a lessor, for which service 
  3.10  the seller or lessor pays a fee. 
  3.11     Sec. 2.  Minnesota Statutes 1996, section 168.27, is 
  3.12  amended by adding a subdivision to read: 
  3.13     Subd. 7a.  [MOTOR VEHICLE BROKER.] No person, other than a 
  3.14  new or used motor vehicle dealer, shall engage in the business 
  3.15  of arranging the sale of a motor vehicle between a buyer and a 
  3.16  seller, or the lease of a motor vehicle between a lessee and a 
  3.17  lessor, for which service the seller or lessor pays a fee, 
  3.18  without first acquiring a motor vehicle broker's license.  The 
  3.19  requirements relating to franchises do not apply to licensed 
  3.20  motor vehicle brokers.  A motor vehicle broker shall provide 
  3.21  each buyer or lessee with a written disclosure listing the motor 
  3.22  vehicle broker's new and used motor vehicle dealer affiliations 
  3.23  and stating that the motor vehicle broker receives a fee from 
  3.24  the dealer affiliates for brokering motor vehicles.  A new motor 
  3.25  vehicle dealer may contract for the services of a licensed motor 
  3.26  vehicle broker to arrange the sale or lease of new motor 
  3.27  vehicles covered by the new motor vehicle dealer's franchise 
  3.28  agreements on behalf of the new motor vehicle dealer, who shall 
  3.29  be the seller or lessor of record in all such transactions.  The 
  3.30  new motor vehicle dealer may pay the motor vehicle broker a fee 
  3.31  for brokering services rendered.  If provided for in the 
  3.32  contract between the new motor vehicle dealer and the motor 
  3.33  vehicle broker, the motor vehicle broker may: 
  3.34     (1) advertise and solicit the sale or lease of new motor 
  3.35  vehicles; the advertisements or solicitations shall not be 
  3.36  required to disclose the motor vehicle broker's dealer 
  4.1   affiliations; 
  4.2      (2) negotiate or quote the sale price or lease terms of new 
  4.3   motor vehicles; 
  4.4      (3) execute the sale or lease of new motor vehicles; 
  4.5      (4) execute the sale or lease of used motor vehicles taken 
  4.6   in trade on new motor vehicle sales, on behalf of the new motor 
  4.7   vehicle dealer who is the seller or lessor of record; 
  4.8      (5) prepare, pick up, deliver, and execute contracts or 
  4.9   official documents for the sale or lease of a new motor vehicle; 
  4.10     (6) prepare documents on either the new motor vehicle 
  4.11  dealer's or the motor vehicle broker's forms, except that if the 
  4.12  motor vehicle broker's forms are used, those forms must clearly 
  4.13  state in bold type the identity of the new motor vehicle dealer 
  4.14  and identify the new motor vehicle dealer as the seller or 
  4.15  lessor of record; 
  4.16     (7) accept payment in full or in part for a new motor 
  4.17  vehicle, with the funds payable to either the new vehicle dealer 
  4.18  or the motor vehicle broker, according to the terms of the 
  4.19  contract between them; 
  4.20     (8) execute or arrange for the delivery of a new motor 
  4.21  vehicle to any location, within or outside of the state of 
  4.22  Minnesota; 
  4.23     (9) explain safety or operating features of a new motor 
  4.24  vehicle in conjunction with the delivery of a new motor vehicle; 
  4.25  or 
  4.26     (10) explain warranty coverages in conjunction with the 
  4.27  delivery of a new motor vehicle. 
  4.28     Sec. 3.  Minnesota Statutes 1996, section 168.27, 
  4.29  subdivision 10, is amended to read: 
  4.30     Subd. 10.  [ESTABLISHED PLACE OF BUSINESS.] All licensees 
  4.31  under this section shall have an established place of business 
  4.32  which shall include as a minimum: 
  4.33     (1) For a new motor vehicle dealer, the following: 
  4.34     (a) a commercial building owned or under lease by the 
  4.35  licensee.  The lease shall be for a minimum term of one year.  
  4.36  The building shall contain office space where the books, 
  5.1   records, and files necessary to conduct the business are kept 
  5.2   and maintained with personnel available during normal business 
  5.3   hours.  Dealership business hours must be conspicuously posted 
  5.4   on the place of doing business and readily viewable by the 
  5.5   public; 
  5.6      (b) a bona fide contract or franchise (1) in effect with a 
  5.7   manufacturer or distributor of the new motor vehicles the dealer 
  5.8   proposes to sell, broker, wholesale, or auction, or (2) in 
  5.9   effect with the first-stage manufacturer or distributor of new 
  5.10  motor vehicles purchased from a van converter or modifier which 
  5.11  the dealer proposes to sell, broker, wholesale, or auction, or 
  5.12  (3) in effect with the final stage manufacturer of the new type 
  5.13  A, B, or C motor homes which the dealer proposes to sell, 
  5.14  broker, wholesale, or auction; 
  5.15     (c) a facility for the repair and servicing of motor 
  5.16  vehicles and the storage of parts and accessories, not to exceed 
  5.17  ten miles distance from the principal place of business.  Such 
  5.18  service may be provided through contract with bona fide 
  5.19  operators actually engaged in such services; 
  5.20     (d) an area either indoors or outdoors to display motor 
  5.21  vehicles which is owned or under lease by the licensee; and 
  5.22     (e) a sign clearly identifying the dealership by name which 
  5.23  is readily viewable by the public. 
  5.24     (2) For a used motor vehicle dealer, the following: 
  5.25     (a) a commercial building owned or under lease by the 
  5.26  licensee.  The lease shall be for a minimum term of one year.  
  5.27  The building shall contain office space where the books, 
  5.28  records, and files necessary to conduct the business are kept 
  5.29  and maintained with personnel available during normal business 
  5.30  hours or automatic telephone answering service during normal 
  5.31  business hours.  Dealership business hours must be conspicuously 
  5.32  posted on the place of doing business and readily viewable by 
  5.33  the public; 
  5.34     (b) an area either indoors or outdoors to display motor 
  5.35  vehicles which is owned or under lease by the licensee; and 
  5.36     (c) a sign clearly identifying the dealership by name which 
  6.1   is readily viewable by the public. 
  6.2      (3) For a motor vehicle lessor, the following:  a 
  6.3   commercial office space where the books, records, and files 
  6.4   necessary to conduct the business are kept and maintained with 
  6.5   personnel available during normal business hours or an automatic 
  6.6   telephone answering service during normal business hours.  
  6.7   Business hours must be conspicuously posted on the place of 
  6.8   doing business and readily viewable by the public.  The office 
  6.9   space must be owned or under lease for a minimum term of one 
  6.10  year by the licensee. 
  6.11     (4) For a motor vehicle wholesaler, the following:  a 
  6.12  commercial office space where the books, records, and files 
  6.13  necessary to conduct the business are kept and maintained with 
  6.14  personnel available during normal business hours or an automatic 
  6.15  telephone answering service during normal business hours.  The 
  6.16  office space must be owned or under lease for a minimum term of 
  6.17  one year by the licensee. 
  6.18     (5) For a motor vehicle auctioneer, the following:  a 
  6.19  permanent enclosed commercial building, within or without the 
  6.20  state, on a permanent foundation, owned or under lease by the 
  6.21  licensee.  The lease shall be for a minimum term of one year.  
  6.22  The building shall contain office space where the books, 
  6.23  records, and files necessary to conduct the business are kept 
  6.24  and maintained with personnel available during normal business 
  6.25  hours or an automatic telephone answering service during normal 
  6.26  business hours.  
  6.27     (6) For a motor vehicle broker, the following:  a 
  6.28  commercial office space where books, records, and files 
  6.29  necessary to conduct business are kept and maintained with 
  6.30  personnel available during normal business hours, or an 
  6.31  automatic telephone answering service available during normal 
  6.32  business hours.  Business hours must be conspicuously posted on 
  6.33  the place of business and readily viewable by the public.  A 
  6.34  sign, clearly identifying the motor vehicle broker by name and 
  6.35  viewable by the public must be posted on the place of business.  
  6.36  The office space must be owned or under lease for a minimum term 
  7.1   of one year by the licensee. 
  7.2      (7) If a new or used motor vehicle dealer maintains more 
  7.3   than one place of doing business in a county, the separate 
  7.4   places shall be listed on the application.  If additional places 
  7.5   of business are maintained outside of one county, separate 
  7.6   licenses shall be obtained for each county.  A new motor vehicle 
  7.7   dealer may, however, engage the services of a licensed motor 
  7.8   vehicle broker without listing the motor vehicle broker's place 
  7.9   of business as the dealer's own, and no additional licenses 
  7.10  shall be required regardless of the location of the motor 
  7.11  vehicle broker's place of business. 
  7.12     (7) (8) If a motor vehicle lessor, wholesaler, or 
  7.13  auctioneer, or motor vehicle broker maintains more than one 
  7.14  permanent place of doing business, either in one or more 
  7.15  counties, the separate places shall be listed in the 
  7.16  application, but only one license shall be required.  If a 
  7.17  lessor proposes to sell previously leased or rented vehicles at 
  7.18  a location outside the seven-county metropolitan area, as 
  7.19  defined in section 473.121, subdivision 2, other than cities of 
  7.20  the first class, the lessor must obtain a license for each 
  7.21  nonmetropolitan area county in which sales are to take place. 
  7.22     (8) (9) If a motor vehicle dealer, lessor, or wholesaler, 
  7.23  or motor vehicle broker does not have direct access to a public 
  7.24  road or street, any privately owned roadway providing access to 
  7.25  a public road or street must be clearly identified and 
  7.26  adequately maintained.