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Minnesota Legislature

Office of the Revisor of Statutes

Key: (1) language to be deleted (2) new language

  

                         Laws of Minnesota 1988 

                        CHAPTER 496-S.F.No. 1121 
           An act relating to motor vehicles; establishing a 
          titling system for salvage and rebuilt motor vehicles; 
          requiring licenses for scrap metal processors, used 
          vehicle parts dealers, and salvage pool operators; 
          amending Minnesota Statutes 1986, sections 168.27, 
          subdivisions 1, 2, 3, 8, 10, 24, and by adding 
          subdivisions; 168.33, subdivision 7; 168A.01, 
          subdivision 2, and by adding subdivisions; and 168A.15;
          Minnesota Statutes 1987 Supplement, section 168.27, 
          subdivision 16; 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 1986, section 168.27, 
subdivision 1, is amended to read:  
    Subdivision 1.  [DEFINITIONS.] For the purposes of this 
section, the following terms have the meanings given them: 
    (1) "Leasing motor vehicles" means furnishing a motor 
vehicle for a fee under a bailor-bailee relationship where no 
incidences of ownership are intended to be transferred other 
than the right to use the vehicle for a stated period of time. 
    (2) "Brokering motor vehicles" means arranging sales 
between willing buyers and sellers of motor vehicles and 
receiving a fee for said service. 
    (3) "Wholesaling motor vehicles" means selling new or used 
motor vehicles to dealers for resale to the public. 
    (4) "Auctioning motor vehicles" means arranging for and 
handling the sale of motor vehicles, not the property of the 
auctioneer, to the highest bidder. 
    (5) "Dealer" includes new motor vehicle dealers, used motor 
vehicle dealers, brokers, wholesalers, auctioneers and, lessors 
of new or used motor vehicles, scrap metal processors, used 
vehicle parts dealers, and salvage pools. 
    (6) "Commercial building" means a building adapted to 
commercial use and located in an area zoned for commercial or 
other less restrictive nonresidential use by the governmental 
unit in which it is located. 
    (7) "Horse trailer" is a trailer designed and used to carry 
horses and other livestock, which has not more than three axles 
and a maximum gross weight capacity of not more than 24,000 
pounds. 
    (8)  "Junked vehicle" means a vehicle that is graded and 
stamped as a "class D" total loss vehicle under section 19. 
    Sec. 2.  Minnesota Statutes 1986, section 168.27, 
subdivision 2, is amended to read:  
    Subd. 2.  [NEW MOTOR VEHICLE DEALER.] (a) No person shall 
engage in the business of selling or arranging the sale of new 
motor vehicles or shall offer to sell, solicit, arrange, or 
advertise the sale of new motor vehicles without first acquiring 
a new motor vehicle dealer license.  A new motor vehicle dealer 
licensee shall be entitled thereunder to sell, broker, 
wholesale, or auction and to solicit and advertise the sale, 
broker, wholesale, or auction of new motor vehicles covered by 
the franchise and any used motor vehicles or to lease and to 
solicit and advertise the lease of new motor vehicles and any 
used motor vehicles and such sales or leases may be either for 
consumer use at retail or for resale to a dealer.  A new motor 
vehicle dealer may engage in the business of buying or otherwise 
acquiring vehicles for dismantling the vehicles and selling used 
parts and remaining scrap materials under chapter 168A, except 
that a new motor vehicle dealer may not purchase a junked 
vehicle from a salvage pool, insurance company, or its agent 
unless the dealer is also licensed as a used vehicle parts 
dealer.  Nothing herein shall be construed to require an 
applicant for a dealer license who proposes to deal in:  (1) new 
and unused motor vehicle bodies; or (2) type A, B, or C motor 
homes as defined in section 168.011, subdivision 25, to have a 
bona fide contract or franchise in effect with either the 
first-stage manufacturer of the motor home or the manufacturer 
or distributor of any motor vehicle chassis upon which the new 
and unused motor vehicle body is mounted.  The modification or 
conversion of a new van-type vehicle into a multipurpose 
passenger vehicle which is not a motor home does not constitute 
dealing in new or unused motor vehicle bodies, and a person 
engaged in the business of selling these van-type vehicles must 
have a bona fide contract or franchise with the appropriate 
manufacturer under subdivision 10.  A van converter or modifier 
who owns these modified or converted van-type vehicles may sell 
them at wholesale to new motor vehicle dealers having a bona 
fide contract or franchise with the first-stage manufacturer of 
the vehicles. 
    (b) The requirements pertaining to franchises do not apply 
to persons who remodel or convert motor vehicles for medical 
purposes.  For purposes of this subdivision, "medical purpose" 
means certification by a licensed physician that remodeling or 
conversion of a motor vehicle is necessary to enable a 
handicapped person to use the vehicle. 
    Sec. 3.  Minnesota Statutes 1986, section 168.27, 
subdivision 3, is amended to read: 
    Subd. 3.  [USED MOTOR VEHICLE DEALER.] No person shall 
engage in the business of selling or arranging the sale of used 
motor vehicles or shall offer to sell, solicit, arrange, or 
advertise the sale of used motor vehicles without first 
acquiring a used motor vehicle dealer license.  A used motor 
vehicle dealer licensee shall be entitled thereunder to sell, 
lease, broker, wholesale or auction and to solicit and advertise 
the sale, lease, broker, wholesale or auction of any used motor 
vehicles for consumer use at retail or for resale to a dealer.  
A used motor vehicle dealer may engage in the business of buying 
or otherwise acquiring vehicles for dismantling the vehicles and 
selling used parts and remaining scrap materials under chapter 
168A, except that a used motor vehicle dealer may not acquire a 
junked vehicle from a salvage pool, insurance company, or its 
agent, unless the dealer is also licensed as a used vehicle 
parts dealer. 
    Sec. 4.  Minnesota Statutes 1986, section 168.27, is 
amended by adding a subdivision to read: 
    Subd. 3a.  [SCRAP METAL PROCESSOR.] (a) A person must have 
a scrap metal processor license to engage in the business of: 
    (1) buying or otherwise acquiring vehicles other than 
hulks; or 
    (2) offering to buy or otherwise acquire, or soliciting or 
advertising the buying or acquiring of, vehicles other than 
hulks for processing and selling the metal for remelting.  For 
purposes of this subdivision, 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 any valuable used 
parts removed.  Its sole value is its metallic content. 
    (b) A scrap metal processor licensee is entitled to buy or 
otherwise acquire vehicles and to solicit and advertise the 
buying or acquiring of vehicles for processing and selling the 
metal for remelting.  A scrap metal processor licensee may not 
acquire a junked vehicle for the purpose of dismantling and 
selling used vehicle parts and remaining scrap materials unless 
the scrap metal processor is also licensed as a used vehicle 
parts dealer. 
    Sec. 5.  Minnesota Statutes 1986, section 168.27, is 
amended by adding a subdivision to read: 
    Subd. 3b.  [USED VEHICLE PARTS DEALER.] A person must have 
a used vehicle parts dealer's license to 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. 
    Sec. 6.  Minnesota Statutes 1986, section 168.27, is 
amended by adding a subdivision to read: 
    Subd. 3c.  [VEHICLE SALVAGE POOL.] A person must have a 
vehicle salvage pool license to 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.  A vehicle salvage pool licensee is entitled 
to store and display and to solicit and advertise the storing 
and displaying, for sale, of damaged or junked vehicles as an 
agent or escrow agent of an insurance company.  A vehicle 
salvage pool licensee shall not sell junked vehicles to any 
party other than a licensed used parts dealer. 
    Sec. 7.  Minnesota Statutes 1986, section 168.27, 
subdivision 8, is amended to read:  
    Subd. 8.  [EXEMPTIONS.] (1) Salespeople and other employees 
of licensed dealers under this section shall not be required to 
obtain individual licenses. 
    (2) Isolated or occasional sales or leases of new or used 
motor vehicles shall be exempt from the provisions of this 
section.  A person who makes only isolated or occasional sales 
or leases is not required to be licensed under this section and 
does not qualify to receive dealer plates under subdivision 16.  
"Isolated or occasional sales or leases" means the sale, 
purchase, or lease of not more than five motor vehicles in a 
12-month period. 
    Sec. 8.  Minnesota Statutes 1986, section 168.27, 
subdivision 10, is amended to read: 
    Subd. 10.  [PLACE OF DOING BUSINESS.] All licensees under 
this section shall have an established place of business which 
shall include as a minimum,: 
    (1) For a new motor vehicle dealer, the following: 
    (a) a permanent enclosed commercial building on a permanent 
foundation, owned or under lease by the licensee.  The lease 
shall be for a minimum term of one year.  The building shall 
contain office space where the books, records, and files 
necessary to conduct the business are kept and maintained with 
personnel available during normal business hours; 
    (b) a bona fide contract or franchise (1) in effect with a 
manufacturer or distributor of the new motor vehicles the dealer 
proposes to sell, broker, wholesale, or auction, or (2) in 
effect with the first-stage manufacturer or distributor of new 
motor vehicles purchased from a van converter or modifier which 
the dealer proposes to sell, broker, wholesale, or auction, or 
(3) in effect with the final stage manufacturer of the new type 
A, B, or C motor homes which the dealer proposes to sell, 
broker, wholesale, or auction; 
    (c) a facility for the repair and servicing of motor 
vehicles and the storage of parts and accessories, not to exceed 
ten miles distance from the principal place of business.  Such 
service may be provided through contract with bona fide 
operators actually engaged in such services; 
    (d) an area to display motor vehicles, which is owned or 
under lease by the licensee. 
    (2) For a used motor vehicle dealer or vehicle salvage 
pool, the following:  a permanent enclosed commercial building 
on a permanent foundation and an area to display motor vehicles, 
owned or under lease by the licensee.  The lease shall be for a 
minimum term of one year.  The building shall contain office 
space for where the books, records, and files necessary to 
conduct the business are kept and maintained with personnel 
available during normal business hours or automatic telephone 
answering service during normal working business hours.  
    (3) For a motor vehicle lessor or wholesaler, the following:
a commercial office space where the books, records, and files 
necessary to conduct the business are kept and maintained with 
personnel available during normal business hours or an automatic 
telephone answering service during normal business hours. 
    (4) For a motor vehicle broker used parts dealer or scrap 
metal processor, the following:  a commercial office 
space street address where the books, records, and files 
necessary to conduct the business are kept and maintained with 
personnel available during normal business hours or an automatic 
telephone answering service during normal business hours. 
    (5) For a motor vehicle wholesaler, the following:  a 
commercial office space where the books, records and files 
necessary to conduct the business are kept and maintained with 
personnel available during normal business hours or an automatic 
telephone answering service during normal business hours. 
    (6) For a motor vehicle auctioneer, the following:  a 
permanent enclosed commercial building, within or without the 
state, on a permanent foundation, owned or under lease by the 
licensee.  The lease shall be for a minimum term of one year.  
The building shall contain office space where the books, 
records, and files necessary to conduct the business are kept 
and maintained with personnel available during normal business 
hours or an automatic telephone answering service during normal 
business hours. 
    (7) (6) If a new or used motor vehicle dealer or salvage 
pool maintains more than one place of doing business in a 
county, the separate places shall be listed on the application.  
If additional places of business are maintained outside of one 
county, separate licenses shall be obtained for each county. 
    (8) (7) If a motor vehicle lessor, broker wholesaler, used 
parts dealer, scrap metal processor, or auctioneer maintains 
more than one permanent place of doing business, either in one 
or more counties, the separate places shall be listed in the 
application, but only one license shall be required. 
    Sec. 9.  Minnesota Statutes 1987 Supplement, section 
168.27, subdivision 16, is amended to read: 
    Subd. 16.  [PLATES, DISTINGUISHING NUMBERS.] (a) The 
registrar shall issue to every motor vehicle dealer, upon a 
request from the motor vehicle dealer licensed as provided in 
subdivision 2 or 3, one or more plates displaying a general 
distinguishing number upon the payment of $10 to the registrar.  
This subdivision does not apply to a scrap metal processor, a 
used vehicle parts dealer, or a vehicle salvage pool.  In 
addition the dealer shall pay a motor vehicle excise tax of $15 
annually for each dealer plate purchased as required by section 
297B.035.  The registrar shall deposit the tax in the state 
treasury and it shall be credited as provided in section 
297B.09.  Motor vehicles, new or used, owned by the motor 
vehicle dealer and bearing the number plate, except vehicles 
leased to the user who is not an employee of the dealer during 
the term of the lease, held for hire, or customarily used by the 
dealer as a tow truck, service truck, or parts pickup truck, may 
be driven upon the streets and highways of this state as follows:
    (1) by the motor vehicle dealer, or any employee of the 
motor vehicle dealer or by any member of the immediate family of 
the dealer or employee for either private or business purposes; 
    (2) for demonstration purposes by any prospective buyer 
thereof for a period of 48 hours or in the case of a truck, 
truck-tractor, or semitrailer, for a period of seven days; or 
    (3) in a promotional event that lasts no longer than four 
days in which at least three motor vehicles are involved. 
    (b) A new or used motor vehicle sold by the motor vehicle 
dealer and bearing the motor vehicle dealer's number plate may 
be driven upon the public streets and highways for a period of 
72 hours by the buyer for either of the following purposes:  (1) 
Removing the vehicle from this state for registration in another 
state, or (2) permitting the buyer to use the motor vehicle 
before the buyer receives number plates pursuant to 
registration.  Use of a motor vehicle by the buyer under the 
provisions of clause (2) of the preceding sentence before the 
buyer receives number plates pursuant to registration 
constitutes a use of the public streets or highways for the 
purpose of the time requirements for registration of motor 
vehicles. 
    Sec. 10.  Minnesota Statutes 1986, section 168.27, 
subdivision 24, is amended to read:  
    Subd. 24.  [BONDS.] All persons licensed hereunder shall 
keep in full force and effect a bond with a corporate surety to 
be approved by the registrar of motor vehicles in amounts as 
herein provided; in the case of boat trailer, snowmobile 
trailer, horse trailer or motorized bicycle dealers in the 
amount of $5,000; and as to all other persons in the amount of 
$25,000.  The bond shall be conditioned on the faithful 
performance by the licensee of the obligations imposed by the 
laws of this state, including the conduct required of a licensee 
by this section and other sections governing the sale or 
transfer of motor vehicles, and the payment of all taxes, 
license fees, and penalties.  The bond shall be for the benefit 
of the state of Minnesota and any transferor, seller, or 
purchaser 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 shall 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 or a 
scrap metal processor.  
    Sec. 11.  Minnesota Statutes 1986, section 168.33, 
subdivision 7, is amended to read: 
    Subd. 7.  [FEES.] In addition to all other statutory fees 
and taxes, a filing fee of $3.25 is imposed on every 
application; except that a filing fee may not be charged for a 
document returned for a refund or for a correction of an error 
made by the department or a deputy registrar.  The filing fee 
shall be shown as a separate item on all registration renewal 
notices sent out by the department of public safety.  No filing 
fee or other fee may be charged for the permanent surrender of a 
certificate of title and license plates for a motor vehicle. 
    Sec. 12.  Minnesota Statutes 1986, section 168A.01, 
subdivision 2, is amended to read: 
    Subd. 2.  "Dealer" means a person who is licensed to engage 
in the business of buying, selling, or exchanging vehicles, and 
has an established place of business, in this state has the 
meaning given it in section 168.27, subdivision 1. 
    Sec. 13.  Minnesota Statutes 1986, section 168A.01, is 
amended by adding a subdivision to read: 
    Subd. 6a.  "High value vehicle" means a vehicle 
manufactured six or more years before the start of the current 
model year that had an actual cash value in excess of $5,000 
before being damaged, or a vehicle with a manufacturer's rating 
of over 26,000 pounds gross vehicle weight. 
    Sec. 14.  Minnesota Statutes 1986, section 168A.01, is 
amended by adding a subdivision to read: 
    Subd. 8a.  "Late model vehicle" means a vehicle 
manufactured in the current model year or the five model years 
immediately preceding the current model year. 
    Sec. 15.  Minnesota Statutes 1986, section 168A.01, is 
amended by adding a subdivision to read: 
    Subd. 12a.  "Older model vehicle" means a vehicle 
manufactured in the sixth model year immediately preceding the 
current model year or earlier that is not a high value vehicle. 
    Sec. 16.  Minnesota Statutes 1986, section 168A.01, is 
amended by adding a subdivision to read: 
    Subd. 17a.  "Salvage title" means a certificate of title 
that is issued to a vehicle graded and stamped as a "class C" 
total loss vehicle under section 19. 
    Sec. 17.  Minnesota Statutes 1986, section 168A.01, is 
amended by adding a subdivision to read: 
    Subd. 17b.  "Salvage vehicle" means a vehicle that has been 
graded and stamped under section 19. 
    Sec. 18.  Minnesota Statutes 1986, section 168A.15, is 
amended to read:  
    168A.15 [SCRAPPED, DISMANTLED, DESTROYED OR RECONSTRUCTED 
VEHICLES.] 
    Subdivision 1.  An owner who scraps, dismantles, or 
destroys a vehicle and a person who purchases a vehicle as scrap 
or to be dismantled or destroyed shall immediately cause the 
certificate of title to be mailed or delivered to the department 
for cancellation.  A certificate of title of the vehicle shall 
not again be issued except upon application containing the 
information the department requires, accompanied by a 
certificate of inspection in the form and content specified in 
section 168A.04, subdivision 4, clause (3).  
    Subd. 2.  If a vehicle is altered so as to become a 
reconstructed vehicle, the owner shall apply for a certificate 
of title to the reconstructed vehicle in the manner provided in 
section 168A.04, and any existing certificate of title to the 
vehicle shall be surrendered for cancellation.  
    Sec. 19.  [168A.151] [GRADING OF LATE MODEL AND HIGH VALUE 
VEHICLES.] 
    Subdivision 1.  [INSURERS.] When an insurer, licensed to 
conduct business in Minnesota, acquires ownership of a late 
model or high value vehicle through payment of damages, the 
insurer shall stamp and grade the assigned certificate of title 
as required under subdivision 3 and comply with all requirements 
of this chapter. 
    Subd. 2.  [DEALERS.] When a dealer acquires ownership of a 
late model or high value vehicle that is a "class C" or "class D"
total loss vehicle, and receives an assigned certificate of 
title, the dealer shall stamp and grade the certificate of title 
as required by subdivision 3, and comply with all requirements 
of this chapter. 
    Subd. 3.  [GRADING.] An insurer or dealer who acquires 
ownership of a late model or high value vehicle as described in 
subdivision 1 or 2 must grade and stamp the certificate of title 
as follows: 
    (a) A "class A" total loss vehicle means a vehicle with 
damage of less than ten percent of the actual cash value, as 
approved by an insurer. 
    (b) A "class B" total loss vehicle means a vehicle with 
damage of at least ten percent but less than 70 percent of the 
vehicle's actual cash value, as approved by an insurer. 
    (c) A "class C" total loss vehicle means a vehicle with 
damage of at least 70 percent of the vehicle's actual cash value 
that is repairable. 
    (d) A "class D" total loss vehicle means a vehicle with 
damage of at least 70 percent of the vehicle's actual cash value 
that is unrepairable, such as a total fire loss or a vehicle 
that cannot be restored for public use.  A "class D" total loss 
vehicle may not be retitled, and the certificate of title must 
be surrendered to the department even if the vehicle is an 
out-of-state vehicle.  A salvage pool, insurance company, or its 
agent may sell a "class D" total loss vehicle only to a licensed 
used parts dealer.  
    Subd. 4.  [OTHER OWNERS.] When a person other than a dealer 
or insurer acquires ownership of a late model or high value 
vehicle that is a "class C" total loss vehicle, the person shall 
surrender the assigned certificate of title to the department 
and apply for a salvage certificate of title. 
    Sec. 20.  [168A.152] [USE AND CERTIFICATION OF TITLE.] 
    A salvage certificate of title authorizes the holder to 
possess, transport, register, and transfer ownership in a 
vehicle.  A certificate of title must not be issued for a 
vehicle for which a salvage certificate of title has been issued 
unless a certification of inspection in the form and content 
specified by the department accompanies the application for a 
certificate of title.  
    Sec. 21.  [168A.153] [REPORT OF VEHICLE RECEIPT; SURRENDER 
OF CERTIFICATE.] 
    Subdivision 1.  [OLDER MODEL VEHICLES.] A dealer who buys 
an older model 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. 
    Subd. 2.  [LATE MODEL OR HIGH VALUE VEHICLES.] A dealer who 
buys a late model or high value vehicle to be dismantled or 
destroyed shall surrender the certificate of title and a 
properly completed application for a salvage certificate of 
title to the department within ten days. 
    Sec. 22.  [168A.154] [SALVAGE VEHICLES TAKEN OUT OF STATE.] 
    A dealer who sells a salvage vehicle to a buyer who intends 
to remove the vehicle from the state shall report the sale 
within ten days to the department on a form prescribed by the 
department. 
    Sec. 23.  [EFFECTIVE DATE.] 
    Sections 1 to 22 are effective January 1, 1989. 
    Approved April 12, 1988