Office of the Revisor of Statutes
Minnesota Session Laws - 1997, Regular Session
Key: (1) language to be deleted (2) new language
CHAPTER 92-S.F.No. 890
An act relating to motor vehicles; providing for
regulation and licensing of motor vehicle brokers;
amending Minnesota Statutes 1996, section 168.27,
subdivisions 1, 2, 10, 11, 12, 19a, 24, and by adding
a subdivision.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1. Minnesota Statutes 1996, 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 or
leases between willing buyers and sellers, or lessees and
lessors, of motor vehicles and receiving a fee for said service
those services.
(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 licensed new motor vehicle dealers,
used motor vehicle dealers, motor vehicle brokers, wholesalers,
auctioneers, lessors of new or used motor vehicles, scrap metal
processors, used vehicle parts dealers, and salvage pools.
(6) "Commercial building" means a permanent, enclosed
building that is on a permanent foundation and connected to
local sewer and water facilities or otherwise complying with
local sanitary codes, is adapted to commercial use, and conforms
to local government zoning requirements. "Commercial building"
may include strip office malls or garages if a separate entrance
and a separate address are maintained and the dealership is
clearly identified as a separate business.
(7) "Commercial office space" means office space occupying
all or part of a commercial building.
(8) "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.
(9) "Isolated or occasional sales or leases" means the sale
or lease of not more than five motor vehicles in a 12-month
period, exclusive of pioneer or classic motor vehicles as
defined in section 168.10, subdivisions 1a and 1b, or sales by a
licensed auctioneer selling motor vehicles at an auction if, in
the ordinary course of the auctioneer's business, the sale of
motor vehicles is incidental to the sale of other real or
personal property.
(10) "Used motor vehicle" means a motor vehicle for which
title has been transferred from the person who first acquired it
from the manufacturer, distributor, or dealer. A new motor
vehicle will not be considered a used motor vehicle until it has
been placed in actual operation and not held for resale by an
owner who has been granted a certificate of title on the motor
vehicle and has registered the motor vehicle in accordance with
this chapter and chapters 168A and 297B, or the laws of the
residence of the owner.
(11) "New motor vehicle" means a motor vehicle other than
described in paragraph (10).
(12) "Junked vehicle" means a vehicle that is declared
unrepairable under section 168A.151.
(13) "Motor vehicle" has the meaning given it in section
168.011, subdivision 4, and also includes a park trailer as
defined in section 168.011, subdivision 8.
(14) "Motor vehicle broker" means a person who arranges the
sale of a motor vehicle between a buyer and a seller, or the
lease of a motor vehicle between a lessee and a lessor, for
which service the broker receives a fee.
Sec. 2. Minnesota Statutes 1996, 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 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. 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 disabled
person to use the vehicle.
(c) A new motor vehicle dealer shall not deliver a
manufacturer's or importer's certificate of origin for a
passenger automobile, pickup truck, or van requiring a
certificate of title pursuant to chapter 168A to any person in
conjunction with the sale of a vehicle except to the department,
another new motor vehicle dealer licensed to sell the same line
or make, or a person whose primary business is picking up and
delivering motor vehicle title documents.
(d) If a new motor vehicle dealer agrees to sell or lease a
new motor vehicle using the services of a motor vehicle broker,
the new motor vehicle dealer may not refuse to deliver
possession of the vehicle to the buyer or lessee. This
paragraph does not require delivery unless all arrangements have
been properly completed for payment, insurance required by law,
titling, transfer, and registration of the new vehicle and any
trade-in vehicle. Delivery may take place at or away from the
dealership.
Sec. 3. Minnesota Statutes 1996, section 168.27, is
amended by adding a subdivision to read:
Subd. 7a. [MOTOR VEHICLE BROKER.] (a) No person shall
engage in the business of brokering motor vehicles without first
acquiring a motor vehicle broker's license. A motor vehicle
broker shall provide each buyer or lessee with a written
disclosure stating whether the motor vehicle broker receives a
fee from the dealers with whom the broker does business. The
new or used motor vehicle dealer shall be the seller of record
in all such transactions. The motor vehicle dealer may pay the
motor vehicle broker a fee for brokering services rendered. A
motor vehicle broker may:
(1) advertise and solicit the brokering of new motor
vehicles. A motor vehicle broker shall not advertise or make
any representations which state, imply, or suggest that the
motor vehicle broker itself sells vehicles, is authorized to
sell vehicles, or obtains vehicles directly from the motor
vehicle manufacturer. All advertising or other solicitations by
a motor vehicle broker shall disclose that sales of new motor
vehicles are arranged through franchised motor vehicle dealers;
(2) negotiate or quote the sale price or lease terms of
motor vehicles;
(3) prepare and deliver documents necessary to the
transaction;
(4) accept a down payment not to exceed $500, but otherwise
may not accept payment in full or in part for a motor vehicle
unless the payment is in the form of a negotiable instrument
payable to the vehicle dealer;
(5) accompany a motor vehicle purchaser or lessee at the
time of delivery by the selling dealer of a new motor vehicle;
and
(6) be present when warranties and safety features are
described by the selling dealer in conjunction with the delivery
of a new motor vehicle.
(b) A motor vehicle broker shall not:
(1) engage in the business of selling new or used motor
vehicles as described in subdivisions 2 and 3;
(2) execute contracts or official documents for the sale or
lease of a new motor vehicle;
(3) describe a new vehicle's warranties or safety features
in conjunction with the delivery of a new motor vehicle;
(4) display motor vehicles available for sale or lease; or
(5) perform any dealer preparation of new motor vehicles.
All dealer preparation shall be performed only by a licensed new
motor vehicle dealer.
This subdivision does not apply to licensed motor vehicle
lessors and shall not be construed to restrict licensed motor
vehicle lessors from brokering motor vehicle leases or otherwise
engaging in the leasing of motor vehicles in accordance with
subdivisions 1 and 4.
Sec. 4. Minnesota Statutes 1996, section 168.27,
subdivision 10, is amended to read:
Subd. 10. [ESTABLISHED PLACE OF 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 commercial building 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. Dealership business hours must be conspicuously posted
on the place of doing business and readily viewable by the
public;
(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 either indoors or outdoors to display motor
vehicles which is owned or under lease by the licensee; and
(e) a sign clearly identifying the dealership by name which
is readily viewable by the public.
(2) For a used motor vehicle dealer, the following:
(a) a commercial building 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 automatic telephone answering service during normal
business hours. Dealership business hours must be conspicuously
posted on the place of doing business and readily viewable by
the public;
(b) an area either indoors or outdoors to display motor
vehicles which is owned or under lease by the licensee; and
(c) a sign clearly identifying the dealership by name which
is readily viewable by the public.
(3) For a motor vehicle lessor, 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.
Business hours must be conspicuously posted on the place of
doing business and readily viewable by the public. The office
space must be owned or under lease for a minimum term of one
year by the licensee.
(4) 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. The
office space must be owned or under lease for a minimum term of
one year by the licensee.
(5) 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.
(6) For a motor vehicle broker, the following: a
commercial office space where books, records, and files
necessary to conduct business are kept and maintained with
personnel available during normal business hours, or an
automatic telephone answering service available during normal
business hours. Business hours must be conspicuously posted on
the place of business and readily viewable by the public. A
sign, clearly identifying the motor vehicle broker by name and
viewable by the public, must be posted on the place of business.
The office space must be owned or under lease for a minimum term
of one year by the licensee.
(7) If a new or used motor vehicle dealer 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.
(7) (8) If a motor vehicle lessor, wholesaler, or
auctioneer, or motor vehicle broker 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. If a
lessor proposes to sell previously leased or rented vehicles or
if a broker proposes to establish an office at a location
outside the seven-county metropolitan area, as defined in
section 473.121, subdivision 2, other than cities of the first
class, the lessor or broker must obtain a license for each
nonmetropolitan area county in which the lessor's sales are to
take place or where the broker proposes to locate an office.
(8) (9) If a motor vehicle dealer, lessor, or wholesaler,
or motor vehicle broker does not have direct access to a public
road or street, any privately owned roadway providing access to
a public road or street must be clearly identified and
adequately maintained.
Sec. 5. Minnesota Statutes 1996, section 168.27,
subdivision 11, is amended to read:
Subd. 11. [LICENSES.] Application for license or
notification of a change of location of a license must include a
street address, not a post office box, and is subject to the
registrar's approval. Upon the filing of an application for a
license and the proper fee, the registrar is authorized, unless
the application on its face appears to be invalid, to grant a
90-day temporary license and during said 90-day period shall
investigate the fitness of the applicant, inspect the site and
make such other investigation as is necessary to insure
compliance with the licensing law. The registrar may extend the
temporary license 30 days. At the end of the period of
investigation the license shall either be granted or denied.
The license must be denied if within the previous five ten years
the applicant was enjoined due to a violation of section 325F.69
or convicted of violating section 325E.14, 325E.15, 325E.16, or
325F.69, or convicted under section 609.53 of receiving or
selling stolen vehicles, or convicted of violating United States
Code, title 15, sections 1981 to 1991, as amended through
December 31, 1984, or pleaded guilty, entered a plea of nolo
contendere or no contest, or has been found guilty in a court of
competent jurisdiction of any charge of failure to pay state or
federal income or sales taxes or felony charge of forgery,
embezzlement, obtaining money under false pretenses, theft by
swindle, extortion, conspiracy to defraud, or bribery. If the
application is approved, the registrar shall license the
applicant as a motor vehicle dealer for the remainder of the
calendar year, and issue a certificate of license therefor as
the registrar may provide upon which shall be placed a
distinguishing number of identification of such dealer. Each
initial application for a license shall be accompanied by a fee
of $50 in addition to the annual fee. The annual fee shall be
$100. All initial fees and annual fees shall be paid into the
state treasury and credited to the general fund. If the initial
application is received by the registrar after July 1 of any
year, the first annual fee shall be reduced by one-half.
Sec. 6. Minnesota Statutes 1996, section 168.27,
subdivision 12, is amended to read:
Subd. 12. [GROUNDS FOR SUSPENSION AND REVOCATION.] A
license may be suspended or revoked by the registrar of motor
vehicles upon proof satisfactory to the registrar of any of the
following:
(1) violations of any of the provisions of this chapter or
chapter 168A, 297B, 325E, or 325F;
(2) violation of or refusal to comply with the requests and
order of the registrar;
(3) failure to make or provide to the registrar all
listings, notices, and reports required by the registrar;
(4) failure to pay to the registrar all taxes, fees, and
arrears due from and by such dealer;
(5) failure to duly apply for renewal of license provided
for herein;
(6) revocation of previous license, of which the records of
the registrar relating thereto shall be prima facie evidence of
such previous revocation;
(7) failure of continued occupancy of an established place
of business;
(8) sale of a new and unused current model motor vehicle
other than the make of motor vehicle described in the franchise
or contract filed with the original application or renewal
thereof, without permission from the registrar;
(9) sale of a new and unused current model motor vehicle to
anyone except for consumer use, or to a dealer duly licensed to
sell the same make of motor vehicle;
(10) material misstatement or misrepresentation in
application for license or renewal thereof;
(11) having advertised, printed, displayed, published,
distributed, broadcast or televised or caused or permitted to be
advertised, printed, displayed, published, distributed,
broadcast or televised in any manner whatsoever, or having made
orally any statement or representation with regard to the sale,
lease or financing of motor vehicles which is false, deceptive
or misleading;
(12) having been convicted of violating section 325F.69, or
having been enjoined due to a violation of section 325F.69;
(13) having been convicted of violating the Minnesota
odometer law, section 325E.14, 325E.15, or 325E.16, or the
federal odometer law, United States Code, title 15, sections
1981 to 1991, as amended through December 31, 1984;
(14) having been convicted of violating the sale of motor
vehicles on Sunday law, section 168.275; or
(15) having been convicted under section 609.53 of
receiving or selling stolen vehicles; or
(16) having pleaded guilty, entered a plea of nolo
contendere or no contest, or having been found guilty in a court
of competent jurisdiction of any charge of failure to pay state
or federal income or sales taxes or felony charge of forgery,
embezzlement, obtaining money under false pretenses, theft by
swindle, extortion, conspiracy to defraud, or bribery.
With respect to clauses (12), (13), and (15), and (16), the
registrar may suspend or revoke a license immediately upon
receiving certification of conviction or permanent injunction.
A hearing is required under subdivision 13 within 30 days
following a summary suspension or revocation under this
paragraph, if a hearing is requested by the licensee.
Sec. 7. Minnesota Statutes 1996, 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 and for civil penalties not to exceed $1,000 for
each violation of subdivision 2, 3, 4, 5a, 6, 7, or 7a. The
court, upon proper proof that the defendant has engaged in a
practice prohibited by this section, may enjoin the future
commission of that practice and award civil penalties for
violations of subdivision 2, 3, 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.
Sec. 8. Minnesota Statutes 1996, 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 $50,000. 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.
Presented to the governor May 2, 1997
Signed by the governor May 6, 1997, 11:18 a.m.
Official Publication of the State of Minnesota
Revisor of Statutes