1.1                          A bill for an act 
  1.2             relating to motor vehicles; new motor vehicle dealers; 
  1.3             requiring persons to obtain a license to engage in 
  1.4             certain business practices; providing civil penalties 
  1.5             for violations of licensing provisions; increasing the 
  1.6             amount of the surety bond required; amending Minnesota 
  1.7             Statutes 1996, section 168.27, subdivisions 2, 19a, 
  1.8             and 24. 
  1.9   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.10     Section 1.  Minnesota Statutes 1996, section 168.27, 
  1.11  subdivision 2, is amended to read: 
  1.12     Subd. 2.  [NEW MOTOR VEHICLE DEALER.] (a) No person shall 
  1.13  engage in the business of selling new motor vehicles or shall 
  1.14  offer to sell, solicit, deliver, or advertise the sale of new 
  1.15  motor vehicles without first acquiring a new motor vehicle 
  1.16  dealer license.  A new motor vehicle dealer licensee shall be 
  1.17  entitled thereunder to sell, broker, wholesale, or auction and 
  1.18  to solicit and advertise the sale, broker, wholesale, or auction 
  1.19  of new motor vehicles covered by the franchise and any used 
  1.20  motor vehicles or to lease and to solicit and advertise the 
  1.21  lease of new motor vehicles and any used motor vehicles and such 
  1.22  sales or leases may be either for consumer use at retail or for 
  1.23  resale to a dealer.  A new motor vehicle dealer may engage in 
  1.24  the business of buying or otherwise acquiring vehicles for 
  1.25  dismantling the vehicles and selling used parts and remaining 
  1.26  scrap materials under chapter 168A, except that a new motor 
  1.27  vehicle dealer may not purchase a junked vehicle from a salvage 
  2.1   pool, insurance company, or its agent unless the dealer is also 
  2.2   licensed as a used vehicle parts dealer.  Nothing herein shall 
  2.3   be construed to require an applicant for a dealer license who 
  2.4   proposes to deal in:  (1) new and unused motor vehicle bodies; 
  2.5   or (2) type A, B, or C motor homes as defined in section 
  2.6   168.011, subdivision 25, to have a bona fide contract or 
  2.7   franchise in effect with either the first-stage manufacturer of 
  2.8   the motor home or the manufacturer or distributor of any motor 
  2.9   vehicle chassis upon which the new and unused motor vehicle body 
  2.10  is mounted.  The modification or conversion of a new van-type 
  2.11  vehicle into a multipurpose passenger vehicle which is not a 
  2.12  motor home does not constitute dealing in new or unused motor 
  2.13  vehicle bodies, and a person engaged in the business of selling 
  2.14  these van-type vehicles must have a bona fide contract or 
  2.15  franchise with the appropriate manufacturer under subdivision 
  2.16  10.  A van converter or modifier who owns these modified or 
  2.17  converted van-type vehicles may sell them at wholesale to new 
  2.18  motor vehicle dealers having a bona fide contract or franchise 
  2.19  with the first-stage manufacturer of the vehicles. 
  2.20     (b) The requirements pertaining to franchises do not apply 
  2.21  to persons who remodel or convert motor vehicles for medical 
  2.22  purposes.  For purposes of this subdivision, "medical purpose" 
  2.23  means certification by a licensed physician that remodeling or 
  2.24  conversion of a motor vehicle is necessary to enable a disabled 
  2.25  person to use the vehicle. 
  2.26     (c) No person, other than a new motor vehicle dealer 
  2.27  licensed under this section, may in the course of business 
  2.28  accept payment in full or part for the purchase of a new motor 
  2.29  vehicle, unless the payment is in the form of a negotiable 
  2.30  instrument made payable to a licensed new motor vehicle dealer.  
  2.31  Nothing in this paragraph prohibits a financial institution from 
  2.32  engaging in activities related to financing new vehicle 
  2.33  purchases. 
  2.34     (d) No person, other than a new motor vehicle dealer 
  2.35  licensed under this section, may in the course of business 
  2.36  deliver a new motor vehicle to a purchaser or describe a new 
  3.1   vehicle's warranties or safety features in conjunction with the 
  3.2   delivery of a purchased new motor vehicle. 
  3.3      Sec. 2.  Minnesota Statutes 1996, section 168.27, 
  3.4   subdivision 19a, is amended to read: 
  3.5      Subd. 19a.  [INJUNCTION.] The commissioner or a county 
  3.6   attorney may institute a civil action in the name of the state 
  3.7   in district court for an injunction prohibiting a violation of 
  3.8   this section and for civil penalties in the amount of $1,000 for 
  3.9   each violation of subdivision 2, 3, 4, 5a, 6, or 7.  The court, 
  3.10  upon proper proof that the defendant has engaged in a practice 
  3.11  prohibited by this section, may enjoin the future commission of 
  3.12  that practice and award civil penalties for violations of 
  3.13  subdivision 2, 3, 4, 5a, 6, or 7.  It is not a defense to an 
  3.14  action that the state may have adequate remedies at law.  
  3.15  Service of process must be as in any other civil suit, except 
  3.16  that where a defendant in the action is a natural person or firm 
  3.17  residing outside the state, or is a foreign corporation, service 
  3.18  of process may also be made by personal service outside the 
  3.19  state; in the manner provided by section 5.25; or as the court 
  3.20  may direct.  Process is valid if it satisfies the requirements 
  3.21  of due process of law, whether or not the defendant is doing 
  3.22  business in Minnesota regularly or habitually.  Nothing in this 
  3.23  subdivision limits the rights or remedies otherwise available to 
  3.24  persons under common law or other statutes of this state. 
  3.25     Sec. 3.  Minnesota Statutes 1996, section 168.27, 
  3.26  subdivision 24, is amended to read: 
  3.27     Subd. 24.  [BONDS.] All persons licensed hereunder shall 
  3.28  keep in full force and effect a bond with a corporate surety to 
  3.29  be approved by the registrar of motor vehicles in amounts as 
  3.30  herein provided; in the case of boat trailer, snowmobile 
  3.31  trailer, horse trailer or motorized bicycle dealers in the 
  3.32  amount of $5,000; and as to all other persons in the amount 
  3.33  of $25,000 $50,000.  The bond shall be conditioned on the 
  3.34  faithful performance by the licensee of the obligations imposed 
  3.35  by the laws of this state, including the conduct required of a 
  3.36  licensee by this section and other sections governing the sale 
  4.1   or transfer of motor vehicles, and the payment of all taxes, 
  4.2   license fees, and penalties.  The bond shall be for the benefit 
  4.3   of the state of Minnesota and any transferor, seller, or 
  4.4   purchaser of a motor vehicle for any monetary loss caused by 
  4.5   failure of the licensee to meet the obligations enumerated 
  4.6   above.  Proceedings on the forfeiture of the bonds shall be 
  4.7   commenced in the district court of the county wherein the 
  4.8   business of the licensed person was carried on, or if in more 
  4.9   than one county, the county in which the offense occurred.  This 
  4.10  subdivision does not apply to a used vehicle parts dealer or a 
  4.11  scrap metal processor.