Assemblyman LOUIS D. GREENWALD
District 6 (Burlington and Camden)
Assemblyman TIMOTHY J. EUSTACE
District 38 (Bergen and Passaic)
Assemblyman JOHN F. MCKEON
District 27 (Essex and Morris)
Assemblywoman PAMELA R. LAMPITT
District 6 (Burlington and Camden)
Permits zero emission vehicle manufacturer to directly sell motor vehicles to consumers based on vehicle market.
CURRENT VERSION OF TEXT
An Act concerning the sale of zero emission motor vehicles, amending R.S.39:10-19, and amending and supplementing P.L.1985, c.361.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. R.S.39:10-19 is amended to read as follows:
39:10-19. No person shall engage in the business of buying, selling or dealing in motor vehicles in this State, nor shall a person engage in activity that would qualify the person as a leasing dealer, as defined in section 2 of P.L.1994, c.190 (C.56:12-61), unless: a. the person is a licensed real estate broker acting as an agent or broker in the sale of mobile homes without their own motor power other than recreation vehicles as defined in section 3 of P.L.1990, c.103 (C.39:3-10.11), or manufactured homes as defined in section 3 of P.L.1983, c.400 (C.54:4-1.4); or b. the person is authorized to do so under the provisions of this chapter and P.L.1985, c.361 (C.56:10-26 et seq.) .
The chief administrator may, upon application in such form as the chief administrator prescribes, license any proper person as such dealer or leasing dealer. A licensed real estate broker shall be entitled to act as an agent or broker in the sale of a mobile or manufactured home as defined in subsection a. of this section without obtaining a license from the chief administrator. For the purposes of this chapter, a "licensed real estate broker" means a real estate broker licensed by the New Jersey Real Estate Commission pursuant to the provisions of chapter 15 of Title 45 of the Revised Statutes. Any sale or transfer of a mobile or manufactured home, in which a licensed real estate broker acts as a broker or agent pursuant to this section, which sale or transfer is subject to any other requirements of R.S.39:10-1 et seq., shall comply with all of those requirements.
No person who has been convicted of a crime, arising out of fraud or misrepresentation in the sale, leasing or financing of a motor vehicle, shall be eligible to receive a license. For the purposes of this section, each applicant for a license shall submit to the chief administrator the applicant's name, address, fingerprints, and written consent for a criminal history record background check to be performed. The chief administrator is hereby authorized to exchange fingerprint data with and receive criminal history record information from the State Bureau of Identification in the Division of State Police and the Federal Bureau of Investigation consistent with applicable State and federal laws, rules, and regulations, for purposes of facilitating determinations concerning licensure eligibility. The applicant shall bear the cost for the criminal history record background check, including all costs of administering and processing the check. The Division of State Police shall promptly notify the chief administrator in the event a current holder of a license or prospective applicant, who was the subject of a criminal history record background check pursuant to this section, is arrested for a crime or offense in this State after the date the background check was performed.
Each applicant for a license shall at the time such license is issued have established and maintained, or by that application shall agree to establish and maintain, within 90 days after the issuance thereof, a place of business consisting of a permanent building not less than 1,000 square feet in floor space located in the State of New Jersey to be used principally for the servicing and display of motor vehicles with such equipment installed therein as shall be requisite for the servicing of motor vehicles in such manner as to make them comply with the laws of this State and with any rules and regulations made by the board governing the equipment, use, and operation of motor vehicles within the State. However, a leasing dealer, who is not engaged in the business of buying, selling, or dealing in motor vehicles in the State, shall not be required to maintain a place of business with floor space available for the servicing or display of motor vehicles or to have an exterior sign at the lessor's place of business.
A license fee of $200 shall be paid by an applicant upon the applicant's initial application for a license. The chief administrator may renew an applicant's license upon application for renewal on a form prescribed by the chief administrator and accompanied by a renewal fee of $200. Every license shall expire 24 months from the date on which it is issued. The chief administrator may, at the chief administrator's discretion and for good cause shown, extend an applicant's license for an additional period not to exceed 12 months from the date on which it is scheduled to expire. The chief administrator may, at the chief administrator's discretion and for good cause shown, issue a license which shall expire on a date fixed by the chief administrator. The fee for licenses with an expiration date fixed by the chief administrator shall be fixed by the chief administrator in an amount proportionately less or greater than the fee established herein.
For the purposes of this section, a leasing dealer or an assignee of a leasing dealer whose leasing activities are limited to buying motor vehicles for the purpose of leasing them and selling motor vehicles at the termination of a lease shall not be deemed to be engaged in the business of buying, selling, or dealing in motor vehicles in this State.
(cf: P.L.2007, c.335, s.24)
2. Section 1 of P.L.1985, c.361 (C.56:10-26) is amended to read as follows:
1. As used in this act:
[a.] "Consumer" means the purchaser, other than for resale, of a motor vehicle [;] .
[b.] "Franchise" means a written arrangement for a definite or indefinite period in which a motor vehicle franchisor grants a right or license to use a trade name, trademark, service mark or related characteristics and in which there is a community of interest in the marketing of new motor vehicles at retail, by lease, agreement or otherwise [;] .
[c.] "Motor vehicle" means and includes all vehicles propelled otherwise than by muscular power, and motorcycles, trailers and tractors, excepting: (1) those vehicles as run only upon rails or tracks, motorized bicycles, and buses, including school buses; and (2) those motor vehicles not designed or used primarily for the transportation of persons or property and only incidentally operated or moved over a highway [;] .
[d.] "Motor vehicle franchisee" means a person to whom a franchise is granted by a motor vehicle franchisor and who or which holds a current valid motor vehicle dealer's license issued pursuant to R.S.39:10-19 and has an established place of business [;] .
[e.] “Motor vehicle franchisor" means a person engaged in the business of manufacturing, assembling or distributing new motor vehicles, or importing into the United States new motor vehicles manufactured or assembled in a foreign country, who will under normal business conditions during the year, manufacture, assemble, distribute or import at least 10 new motor vehicles [;] .
[f. "Place of business" means a fixed geographical location at which the motor vehicle franchisor's motor vehicles are offered for sale and sold, but shall not include an office, a warehouse, a place of storage, a residence or a vehicle;
g.] "New motor vehicle" means a newly manufactured motor vehicle [;] .
[h.] "Person" means a natural person, corporation, partnership, trust, or other entity and, in the case of an entity, it shall include any other entity which has a majority interest in that entity or effectively controls that other entity as well as the individual officers, directors, and other persons in active control of the activities of each such entity.
“Place of business” means a fixed geographical location at which the motor vehicle franchisor's motor vehicles are offered for sale and sold, but shall not include an office, a warehouse, a place of storage, a residence or a vehicle.
“Zero emission vehicle” means a motor vehicle certified as a zero emission vehicle pursuant to the California Air Resources Board zero emission vehicle standards for the applicable model year, but shall not include an advanced technology partial zero emission vehicle, a partial zero emission vehicle, or a hybrid electric vehicle.
(cf: P.L.1991, c.409, s.1)
3. Section 2 of P.L.1985, c.361 (C.56:10-27) is amended to read as follows:
2. [It] Except as provided pursuant to section 5 of P.L. , c. (C. ) (pending before the Legislature as this bill), it shall be a violation of this act for any motor vehicle franchisor, directly or indirectly, through any officer, agent, employee, broker or any shareholder of the franchisor, except a shareholder of 1% or less of the outstanding shares of any class of securities of a franchisor which is a publicly traded corporation, or other person, to offer to sell or sell motor vehicles, to a consumer, other than an employee of the franchisor, except through a motor vehicle franchisee.
(cf: P.L.1985, c. 361, s. 2)
4. Section 3 of P.L.1985, c.361 (C.56:10-28) is amended to read as follows:
3. [It] Except as provided pursuant to section 5 of P.L. , c. (C. ) (pending before the Legislature as this bill), it shall be a violation of this act for a motor vehicle franchisor, directly or indirectly, through any officer, agent, employee, broker or any shareholder of the franchisor, except a shareholder of 1% or less of the outstanding shares of any class of securities of a franchisor which is a publicly traded corporation, or other person, to own or operate a place of business as a motor vehicle franchisee, except that this section shall not prohibit the ownership or operation of a place of business by a motor vehicle franchisor for a period, not to exceed 24 consecutive months, during the transition from one motor vehicle franchisee to another; or the investment in a motor vehicle franchisee by a motor vehicle franchisor if the investment is for the sole purpose of enabling a partner or shareholder in that motor vehicle franchisee to acquire an interest in that motor vehicle franchisee and that partner or shareholder is not otherwise employed by or associated with the motor vehicle franchisor and would not otherwise have the requisite capital investment funds to invest in the motor vehicle franchisee, and has the right to purchase the entire equity interest of the motor vehicle franchisor in the motor vehicle franchisee within a reasonable period of time not to exceed 10 years.
(cf: P.L.1993, c.189, s.4)
5. (New section) a. Notwithstanding the provisions of any law, rule or regulation to the contrary, a motor vehicle franchisor who exclusively manufactures zero emission vehicles may directly buy from and directly sell, offer to sell, or deal to a consumer a zero emission vehicle if the franchisor is licensed pursuant to R.S.39:10-19 and the total number of zero emission vehicles sold is less than four percent of all vehicles sold Statewide in each calendar year.
b. Within 365 days after the number of zero emission vehicles sold in this State in any calendar year equals four percent or more of all the motor vehicles sold, all manufacturers of zero emission vehicles in the State shall comply with the provisions of P.L.1985, c.361 (C.56:10-26 et seq.), and any rules and regulations adopted pursuant thereto.
6. This act shall take effect immediately.
This bill would allow a franchisor (manufacturer) to directly buy or sell zero emission vehicles (ZEVs) to consumers if all ZEV manufacturers sell less than four percent of the total vehicles sold in New Jersey each year.
Specifically, the bill allows a motor vehicle franchisor licensed with the MVC and exclusively manufacturing ZEVs to directly buy and sell ZEVs if the total share of ZEVs sold is less than four percent of all vehicles sold Statewide in each calendar year. Whenever the share of ZEVs sold in the State equals four percent or more of the total number of motor vehicles sold in one calendar year, all manufacturers of ZEVs, within one year, would be required to comply with P.L.1985, c.361 and operate within the State’s existing motor vehicle sales framework, as a franchisor with a franchised dealership.
This bill also amends current law to allow any motor vehicle manufacturer to directly buy from and directly sell, offer to sell, or deal to a consumer a motor vehicle if the manufacturer is licensed by the New Jersey Motor Vehicle Commission (MVC) and meets the market share sales requirements specified in the bill.
Current law (R.S.39:10-19) requires a person engaged in the business of buying, selling or dealing motor vehicles to be licensed by the MVC. However, P.L.1985, c.361 (C.56:10-26 et seq.) provides that automobiles may be sold only through franchises, which precludes manufacturer Tesla Motors from also being a dealer of its motor vehicles.