HOUSE BILL No. 5803 March 14, 2002, Introduced by Reps. Howell, Phillips, Allen and Gilbert and referred to the Committee on Commerce. A bill to amend 1949 PA 300, entitled "Michigan vehicle code," by amending sections 217c, 248, and 251 (MCL 257.217c, 257.248, and 257.251), section 217c as amended by 1993 PA 300, section 248 as amended by 1999 PA 172, and section 251 as amended by 2000 PA 397. THE PEOPLE OF THE STATE OF MICHIGAN ENACT: 1 Sec. 217c.(1) An insurance company licensed to conduct2business in this state that determines that a late model vehicle3that the company insures has become a distressed vehicle shall4proceed under either of the following:5(a) If the insurance company acquires ownership of the vehi-6cle through payment of a claim, the owner of the vehicle shall7assign the certificate of title to the insurance company which8shall do all of the following:04523'01 DAM 2 1(i) Surrender a properly assigned certificate of title to2the secretary of state.3(ii) Apply for a salvage certificate of title. The insur-4ance company shall not sell the vehicle without first receiving a5salvage certificate of title which shall be assigned to the6buyer.7(b) If after payment of a claim the insurance company per-8mits the owner of the vehicle to retain ownership, the insurance9company shall do all of the following:10(i) Require each owner of the vehicle to sign an application11for a salvage certificate of title.12(ii) Attach the owner's certificate of title to the applica-13tion for a salvage certificate of title or have the owner certify14that the certificate of title is lost.15(iii) On behalf of the owner, apply to the secretary of16state for a salvage certificate of title in the name of the17owner. The owner shall not sell or otherwise dispose of the18vehicle without first receiving a salvage certificate of title,19which shall be assigned to the buyer.20(2) If an insurance company acquires ownership of a vehicle21other than a late model vehicle through payment of damages due to22an accident, the company shall surrender a properly assigned23title to the buyer upon delivery.24(3) If a dealer, other than a vehicle scrap metal processor,25acquires ownership of a late model vehicle that is a distressed26vehicle from an owner and receives an assigned certificate of27title, the dealer shall surrender the assigned certificate of04523'01 3 1title to the secretary of state and apply for a salvage2certificate of title within 5 days after the dealer receives the3assigned certificate of title. The dealer may sell the vehicle4to another dealer by assigning the salvage certificate of title5to the buyer. If the vehicle is sold to a buyer other than a6dealer, application shall be made for a salvage certificate in7the name of the buyer. A vehicle scrap metal processor shall8surrender an assigned certificate of title to the secretary of9state within 30 days after acquiring a vehicle for which a cer-10tificate of title was received. A vehicle scrap metal processor11shall surrender an assigned salvage certificate of title to the12secretary of state within 30 days after acquiring a vehicle for13which a salvage certificate of title was received and report that14the vehicle was destroyed or scrapped.15(4) If a person, other than a dealer or insurance company16that is subject to subsection (1) or (3), acquires ownership of a17late model vehicle that is a distressed vehicle, the person shall18surrender the title or assigned certificate of title to the sec-19retary of state and apply for a salvage certificate of title,20before the vehicle may be transported. If an owner retains21ownership of a late model vehicle that should be a distressed22vehicle, the owner shall surrender the title or assigned certifi-23cate of title to the owner's insurance company who, before pay-24ment of a claim, shall apply for a salvage certificate of title25in the name of the owner.26(5) An application for a salvage certificate of title shall27be made on a form prescribed by the secretary of state04523'01 4 1accompanied by a fee of $10.00. The application shall contain2all of the following:3(a) The complete name and current address of the owner.4(b) A description of the vehicle, including its make, style5of body, model year, weight, color, and vehicle identification6number.7(c) A description of the damage to the vehicle.8(d) Until July 1, 1994, a listing of each major component9part that was not salvageable.10(e) Further information as may reasonably be required by the11secretary of state.12(6) The secretary of state shall issue the salvage certifi-13cate within 5 business days after the time the application is14received at the secretary of state's office in Lansing. Until15July 1, 1994, each salvage certificate of title shall include a16listing of each major component part that was not salvageable.17(7) A salvage certificate of title shall authorize the18holder of the title to possess, transport, but not drive upon a19highway, and transfer ownership in, a vehicle. A certificate of20title or registration plates shall not be issued for a vehicle21for which a salvage certificate of title was issued unless a spe-22cially trained police officer certifies that the vehicle identi-23fication numbers and parts identification numbers have been24examined as to their accuracy, the applicant has proof of owner-25ship of repair parts used, the vehicle complies with the equip-26ment standards of this act, and that certification accompanies27the application for a certificate of title. Until January 1,04523'01 5 11994, an application for a certificate of title shall contain a2description of each salvageable part used to repair the vehicle3and any identification number affixed to or inscribed upon the4part as required by federal law. A fee of $25.00 through June530, 1994 shall be received by the police agency for inspection of6the vehicle. Upon the satisfactory completion of the examination7and other requirements for application, a certificate of title,8in the same form as the original, shall be issued for the9vehicle.10(8) If a dealer other than a vehicle scrap metal processor11acquires ownership of an older model vehicle from an owner and12receives an assigned certificate of title, the dealer shall13retain the assigned certificate of title as long as the dealer14retains the vehicle. A vehicle scrap metal processor shall sur-15render an assigned certificate of title to the secretary of state16within 30 days after the vehicle is destroyed or scrapped.17(9) A dealer other than a vehicle scrap metal processor18selling or assigning a vehicle to a vehicle scrap metal processor19shall make a record in triplicate on a form to be provided by the20secretary of state in substantially the following form:2104523'01 6 1Scrap Vehicle Inventory:2Dealer name ____________________________________________3Dealer address _________________________________________4Dealer license number __________________________________5Conveyed to:_______________________________Date_________6(Vehicle scrap metal processor)7Vehicles8Model Year Vehicle Make VIN91.________ ____________ ___102.________ ____________ ___113.________ ____________ ___12etc.13One copy shall be retained as a permanent record by the dealer, 114copy shall be forwarded with the vehicle to be retained by the15vehicle scrap metal processor, and 1 copy shall be forwarded to04523'01 7 1the secretary of state along with an assigned certificate of2title or a salvage certificate.3(10) A person, other than a used or secondhand vehicle parts4dealer or a foreign salvage dealer, or an insurance company5admitted to conduct business in this state, receiving a salvage6certificate of title shall not sell the vehicle to anyone other7than 1 of the following:8(a) The vehicle's former owner.9(b) A used or secondhand vehicle parts dealer.10(c) A vehicle scrap metal processor.11(d) A foreign salvage vehicle dealer licensed under this12act.13(e) A registered motor vehicle repair facility engaging in14body work.15(11) Subsections (1) through (10) shall apply until July 1,161994.17(12) The secretary of state may conduct periodic reviews of18the records of a dealer to determine whether adequate notice is19given to a transferee of a rebuilt salvage vehicle of that20vehicle's prior designation as a salvage vehicle. The secretary21of state may request an insurance company to provide copies of22salvage title documents and claims reports involving major compo-23nent parts to assist the secretary of state in monitoring compli-24ance with this act.25(13) Subsections (14) through (36) shall apply on and after26July 1, 1994.04523'01 8 1 (1)(14)Except for a late model vehicle that has been 2 stolen and recovered and that has no major component part 3 removed, missing, or destroyed, or damaged and not salvageable, 4 an insurance company licensed to conduct business in this state 5 that acquires ownership of a late model vehicle through the pay- 6 ment of a claim shall proceed under either of the following: 7 (a) If the insurance company acquires ownership of the vehi- 8 cle through payment of a claim, the owner of the vehicle shall 9 assign the certificate of title to the insurance company which 10 shall do all of the following: 11 (i) Surrender a properly assigned certificate of title to 12 the secretary of state. 13 (ii) If the estimated cost of repair, including parts and 14 labor, is equal to or more than 75% but less than 91% of the pre- 15 damaged actual cash value of the vehicle, apply for a salvage 16 certificate of title, and if the estimated cost of repair, 17 including parts and labor, is equal to or greater than 91% of the 18 predamaged actual cash value of the vehicle, apply for a scrap 19 certificate of title. The insurance company shall not sell the 20 vehicle without first receiving a salvage or scrap certificate of 21 title, whichshall be assignedTHE INSURANCE COMPANY SHALL 22 ASSIGN to the buyer. An insurance company may assign a salvage 23 or scrap certificate ofthetitle only to an automotive recycl- 24 er, used or secondhand vehicle parts dealer, foreign salvage 25 vehicle dealer, or vehicle scrap metal processor. 04523'01 9 1 (b) If after payment of a total loss claim the insurance 2 company permits the owner of the vehicle to retain ownership, the 3 insurance company shall do all of the following: 4 (i) If the estimated cost of repair, including parts and 5 labor, is equal to or greater than 75% but less than 91% of the 6 predamaged actual cash value of the vehicle, require each owner 7 of the vehicle to sign an application for a salvage certificate 8 of title, or if the estimated cost of repair, including parts and 9 labor, is equal to or greater than 91% of the predamaged actual 10 cash value of the vehicle, require each owner of the vehicle to 11 sign an application for a scrap vehicle certificate of title. 12 (ii) Attach the owner's certificate of title to the applica- 13 tion for a salvage or scrap certificate of title or have the 14 owner certify that the certificate of title is lost. 15 (iii) On behalf of the owner, apply to the secretary of 16 state for a salvage or scrap certificate of title in the name of 17 the owner. The owner shall not sell or otherwise dispose of the 18 vehicle without first receiving a salvage or scrap certificate of 19 title, whichshall be assignedTHE OWNER SHALL ASSIGN to the 20 buyer. An insurance company may assign a salvage or scrap cer- 21 tificate of title only to an automotive recycler, used or second- 22 hand vehicle parts dealer, foreign salvage vehicle dealer, or 23 vehicle scrap metal processor. 24 (2)(15)If an insurance company acquires ownership of a 25 vehicle other than a late model vehicle through payment of dam- 26 ages due to an accident, the company shall surrender a properly 27 assigned title to the buyer upon delivery. 04523'01 10 1 (3)(16)If a dealer acquires ownership of a late model 2 vehicle that is a distressed vehicle from an owner, the dealer 3 shall receive an assigned certificate of title. If the assigned 4 certificate of title is not a salvage or scrap certificate of 5 title, the dealer, other than a vehicle scrap metal processor, 6 shall surrender the assigned certificate of title to the secre- 7 tary of state, and if the estimated cost of repair, including 8 parts and labor, is equal to or greater than 75% but less than 9 91% of the predamaged actual cash value of the vehicle, apply for 10 a salvage certificate of title, or if the estimated cost of 11 repair, including parts and labor, is equal to or greater than 12 91% of the predamaged actual cash value of the vehicle, apply for 13 a scrap certificate of title within 5 days after the dealer 14 receives the assigned certificate of title. The dealer may sell 15 a salvage vehicle to another automotive recycler, used or second- 16 hand vehicle parts dealer, foreign salvage vehicle dealer, or 17 vehicle scrap metal processor by assigning the salvage certifi- 18 cate of title to the buyer. Unless the vehicle is rebuilt, 19 inspected, and recertified pursuant to this section, if the vehi- 20 cle is sold to a buyer other than a dealer, application shall be 21 made for a salvage certificate in the name of the buyer in the 22 manner provided in this act. The dealer may sell a scrap vehicle 23 only to a vehicle scrap metal processor. A vehicle scrap metal 24 processor shall surrender an assigned certificate of title to the 25 secretary of state within 30 days after acquiring a vehicle for 26 which a certificate of title was received. A vehicle scrap metal 27 processor shall surrender an assigned salvage or scrap 04523'01 11 1 certificate of title to the secretary of state within 30 days 2 after acquiring a vehicle for which a salvage or scrap certifi- 3 cate of title was received and report that the vehicle was 4 destroyed or scrapped. 5 (4)(17)An application for a scrap certificate of title 6 shall be made on a form prescribed by the secretary of state 7 accompanied by a fee of $15.00. The application shall contain 8 all of the following: 9 (a) The complete name and current address of the owner. 10 (b) A description of the vehicle, including its make, style 11 of body, model year, fee category or weight, color, and vehicle 12 identification number. 13 (c) If the vehicle is a late model vehicle, a listing of 14 each major component part that was not salvageable. 15 (d) Further informationas mayTHAT THE SECRETARY OF STATE 16 reasonablybe required by the secretary of stateREQUIRES. 17 (5)(18)The scrap certificate of title shall authorize 18 the holder of the document to transport but not drive upon a 19 highway the vehicle or parts of a vehicle, and assign ownership 20 to a vehicle scrap metal processor, automotive recycler, used or 21 secondhand vehicle parts dealer, or foreign salvage vehicle 22 dealer.AEXCEPT FOR A DUPLICATE SCRAP CERTIFICATE OF TITLE, 23 THE SECRETARY OF STATE SHALL NOT ISSUE ANOTHER certificate of 24 titleshall not again be issuedfor this vehicle WITH THE SAME 25 VEHICLE IDENTIFICATION NUMBER. A person shall not rebuild or 26 repair a scrap vehicle and allow it to retain the original 27 vehicle identification number. 04523'01 12 1 (6)(19)If a person, other than a dealer or insurance 2 company that is subject to subsection(14)(1) or(16)(3), 3 acquires ownership of a distressed, late model vehicle, the 4 person shall surrender the title or assigned certificate of title 5 to the secretary of state, and if the estimated cost of repair, 6 including parts and labor, is equal to or greater than 75% but 7 less than 91% of the predamaged actual cash value of the vehicle, 8 apply for a salvage certificate of title, or if the estimated 9 cost of repair, including parts and labor, is equal to or greater 10 than 91% of the predamaged actual cash value of the vehicle, 11 apply for a scrap certificate of title before the vehiclemay12beIS transported. 13 (7)(20)An owner of a vehicle may determine that A vehi- 14 cleto beIS a scrap vehicle or a salvage vehicle without 15 making any determinationas toOF the actual cash value of the 16 vehicle. 17 (8)(21)If a leasing company, vehicle manufacturer, 18 insurance company not licensed to do business in this state, 19 association, repossession company, self-insured owner, financial 20 institution, governmental entity, or other company, institution, 21 or entity, owns a distressed, late model vehicle,the22titleholderTHAT OWNER shall surrender the title or assigned 23 certificate of title to the secretary of state and apply for a 24 salvage certificate of title if the retail cost of repair, 25 including parts and labor, is equal to or greater than 75% but 26 less than 91% of the predamaged actual cash value of the vehicle, 27 or if the retail cost of repair, including parts and labor, is 04523'01 13 1 equal to or greater than 91% of the predamaged actual cash value 2 of the vehicle, apply for a scrap certificate of title, before 3 the vehiclemay beIS transported or sold. If ownership is 4 transferred, the owner shall sell the vehicle only to a dealer 5 who is eligible to buy a salvage or scrap vehicle in this state 6 unless the owner complies with subsection(24)(11). When a 7 leasing company, vehicle manufacturer, insurance company not 8 licensed to do business in this state, association, repossession 9 company, self-insured owner, financial institution, governmental 10 entity, or other company, institution, or entity, estimates the 11 repair of a distressed, late model vehicle for the purpose of 12 determining whether to apply for a salvage or scrap certificate 13 of title, a complete record of the estimate and, if the vehicle 14 is repaired before a transfer of ownership,a complete record of15the actual cost of the repairs performed and by whom shall be16maintained for a minimum of 5 years bythe leasing company, 17 vehicle manufacturer, insurance company not licensed to do busi- 18 ness in this state, association, repossession company, 19 self-insured owner, financial institution, governmental entity, 20 or other company, institution, or entity SHALL FOR A MINIMUM OF 5 21 YEARS MAINTAIN A COMPLETE RECORD OF THE ACTUAL COST OF THE 22 REPAIRS PERFORMED AND BY WHOM. The estimates and repair records 23 required by this subsection shall be available for unannounced 24 inspections by a law enforcement agency or a representative of 25 the secretary of state. The secretary of state may request THAT 26 a leasing company, vehicle manufacturer, insurance company not 27 licensed to do business in this state, association, repossession 04523'01 14 1 company, self-insured owner, financial institution, governmental 2 entity, or other company, institution, or entitytoprovide 3 copies of title documents, repair estimates, claims reports 4 involving major component parts, and actual cash value determina- 5 tion documents to assist the secretary of state in monitoring 6 compliance with this act. 7 (9)(22)An application for a salvage certificate of title 8 shall be made on a form prescribed by the secretary of state 9 accompanied by a fee of $10.00. The application shall contain 10 all of the following: 11 (a) The complete name and current address of the owner. 12 (b) A description of the vehicle, including its make, style 13 of body, model year, fee category or weight, color, and vehicle 14 identification number. 15 (c) An estimate of the cost repair, including parts and 16 labor, and an estimate of the predamaged actual cash value of the 17 vehicle. 18 (d) If the vehicle is a late model vehicle, a listing of 19 each major component part that was not salvageable. 20 (e) Further informationas mayTHAT THE SECRETARY OF STATE 21 reasonablybe required by the secretary of stateREQUIRES. 22 (10)(23)The secretary of state shall issue and mail the 23 salvage certificate within 5 business days after the time the 24 application is received at the secretary of state's office in 25 Lansing. Each salvage certificate of title shall include a list- 26 ing of each major component part that was not salvageable. 04523'01 15 1 (11)(24)A salvage certificate of title shall authorize 2 the holder of the title to possess, transport, but not drive upon 3 a highway, and transfer ownership in, a vehicle.ATHE SECRE- 4 TARY OF STATE SHALL NOT ISSUE A certificate of title or registra- 5 tion platesshall not be issuedfor a vehicle for which a sal- 6 vage certificate of title was issued unless a specially trained 7 officer described in subsection(25)(12) certifiesall of the8following: (a) ThatTHAT the vehicle identification numbers and 9 parts identification numbers have been examined as to their 10 accuracy,. (b) ThatTHAT the applicant has proof of ownership 11 of repair parts used,. (c) ThatAND THAT the vehicle complies 12 with the equipment standards of this act. The OFFICER SHALL MAKE 13 THE certification required by this subsectionshall be madeon 14 a form prescribed and furnished by the secretary of state in con- 15 junction with the department of state police.andTHE TITLE 16 APPLICANT shallaccompany the application that is submitted17 SUBMIT THE CERTIFICATION to the secretary of state WITH THE 18 APPLICATION for a certificate of title. An application for a 19 certificate of title shall contain a description of each salvage- 20 able part used to repair the vehicle and any identification 21 number affixed to or inscribed upon the part as required by state 22 or federal law.Through June 30, 1994, a fee of $25.00 shall be23received by the police agency for inspection of the vehicle and24shall be expended by that police agency as provided in this25subsection.Upon satisfactory completion of the inspectionas26 required by the secretary of state and other requirements for 27 application, THE SECRETARY OF STATE SHALL ISSUE a certificate of 04523'01 16 1 title bearing an indicator of its previous salvage statusshall2be issuedfor the vehicle.The salvage vehicle inspection fees3collected by a local police agency under this subsection shall be4credited to the budget of that police agency for law enforcement5purposes that affect stolen vehicles, stolen vehicle parts, and6salvage vehicle inspections. A local police agency shall compen-7sate an off-duty and limited enforcement police officer for a8salvage vehicle inspection.9 (12)(25)An officer specially trained as provided by the 10 secretary of state and authorized by the secretary of state to 11 conduct a salvage vehicle inspection is either of the following: 12 (a) An on-duty or off-duty police officer. 13 (b) A previously certified police officer who is appointed 14 by the local police agency as a limited enforcement officer to 15 conduct salvage vehicle inspections. The local police agency 16 shall give this officer access to the agency's law enforcement 17 information network system and the authority to confiscate any 18 stolen vehicle or vehicle parts discovered during an inspection. 19 The local police agency may give the officer the authority to 20 arrest a person suspected of having unlawful possession of a 21 stolen vehicle or vehicle parts. 22 (13)(26)The secretary of state shall issue a certificate 23 to an officer who is specially trained as provided by the secre- 24 tary of state to conduct salvage vehicle inspections. Only a 25 person who has a valid certification from the secretary of state 26 may perform salvage inspections. The secretary of state on his 27 or her own initiative or in response to complaints shall make 04523'01 17 1 reasonable and necessary public or private investigations within 2 or outside of this state and gather evidence against an officer 3 who was issued a certificate and who violated or is about to vio- 4 late this act or a rule promulgated under this act. The secre- 5 tary of state may suspend, revoke, or deny a certificate after an 6 investigation if the secretary of state determines that the offi- 7 cer committed 1 or more of the following: 8 (a) Violated this act or a rule promulgated under this act. 9 (b) Was found guilty of a fraudulent act in connection with 10 the inspection, purchase, sale, or transfer of a salvage 11 vehicle. 12 (c) Was found guilty of the theft, embezzlement, or misap- 13 propriation of salvage vehicle inspection fees. 14 (d) Performed improper, careless, or negligent salvage vehi- 15 cle inspections. 16 (e) Ceased to function as a police officer because of sus- 17 pension, retirement, dismissal, disability, or termination of 18 employment. 19 (f) Was convicted of a violation or attempted violation of 20Act No. 119 of the Public Acts of 1986, being sections 257.135121to 257.1355 of the Michigan Compiled Laws1986 PA 119, 22 MCL 257.1351 TO 257.1355. 23 (g) Made a false statement of a material fact in his or her 24 certification of a salvage vehicle inspection or any record con- 25 cerning a salvage vehicle inspection. Upon receipt of the appro- 26 priate abstract of conviction from a court and without any 27 investigation, the secretary of state shall immediately revoke 04523'01 18 1 the certificate of an officer who has been convicted of a 2 violation or attempted violation of section 413, 414, 415, 535, 3 535a, or 536a of the Michigan penal code,Act No. 328 of the4Public Acts of 1931, being sections 750.413, 750.414, 750.415,5750.535, 750.535a, and 750.536a of the Michigan Compiled Laws6 1931 PA 328, MCL 750.413, 750.414, 750.415, 750.535, 750.535A, 7 AND 750.536A, or has been convicted in federal court or in 8 another state of a violation or attempted violation of a law sub- 9 stantially corresponding to section 413, 414, 415, 535, 535a, or 10 536a of the Michigan penal code,Act No. 328 of the Public Acts11of 19311931 PA 328, MCL 750.413, 750.414, 750.415, 750.535, 12 750.535A, AND 750.536A. 13 (14)(27)If a dealer acquires ownership of an older model 14 vehicle from an owner, the dealer shall receive an assigned cer- 15 tificate of title and shall retain it as long as he or she 16 retains the vehicle. A vehicle scrap metal processor shall sur- 17 render an assigned certificate of title to the secretary of state 18 within 30 days after the vehicle is destroyed or scrapped. 19 (15)(28)A dealer selling or assigning a vehicle to a 20 vehicle scrap metal processor THAT IS FLATTENED, BALED, CUBED, OR 21 CRUSHED, OR SO DAMAGED THAT ITS IDENTITY CANNOT BE DETERMINED, 22 shall make a record in triplicate on a formto be provided23 PRESCRIBED by the secretary of state THAT PROVIDES ALL OF THE 24 FOLLOWING INFORMATION in substantially the following form: 25 04523'01 19 1 Scrap Vehicle Inventory: 2 SELLER: Dealer name _________________________________________ 3 Dealer address ______________________________________ 4 Dealer license number _______________________________ 5 PURCHASER: Conveyed to:__________________________Date___________ 6 (Vehicle scrap metal processor) 7 Dealer address ______________________________________ 8 Dealer license number _______________________________ 04523'01 20 1 Vehicles 2 Dealer's 3 Stock 4 Model Year Vehicle Make VIN Title Number Number Color 5 1.________ ____________ ___ ____________ ______ _____ 6 2.________ ____________ ___ ____________ ______ _____ 7 3.________ ____________ ___ ____________ ______ _____ 8 etc. 9 One copy shall be retained as a permanent record by the dealer, 1 10 copy shall be forwarded with the vehicle to be retained by the 11 vehicle scrap metal processor, and 1 copy shall be forwarded to 12 the secretary of state. 13 (16) A DEALER SELLING OR ASSIGNING A VEHICLE WHOSE IDENTITY 14 CAN BE DETERMINED SHALL ASSIGN THE VEHICLE'S CERTIFICATE OF TITLE 15 TO THE VEHICLE SCRAP METAL PROCESSOR. 16 (17)(29)A person, other than an automotive recycler, 17 used or secondhand vehicle parts dealer, or a foreign salvage 18 dealer, receiving a salvage certificate of title shall not sell 19 the vehicle to anyone other than 1 of the following: 20 (a) The vehicle's former owner. 21 (b) A used or secondhand vehicle parts dealer. 04523'01 21 1 (c) A vehicle scrap metal processor. 2 (d) A foreign salvage vehicle dealer licensed under this 3 act. 4 (e) An automotive recycler. 5 (18)(30)A person receiving a scrap certificate of title 6 shall not sell the vehicle to anyone other than 1 of the 7 following: 8 (a) An automotive recycler. 9 (b) A vehicle scrap metal processor. 10 (c) A foreign salvage vehicle dealer licensed under this 11 act. 12 (d) A used or secondhand vehicle parts dealer. 13 (19)(31)The secretary of state may conduct periodic 14 reviews of the records of a dealer to determine whether adequate 15 notice is given to a transferee of a rebuilt salvage vehicle of 16 that vehicle's prior designation as a salvage vehicle. The sec- 17 retary of state may request an insurance company to provide 18 copies of salvage title documents and claims reports involving 19 major component parts to assist the secretary of state in moni- 20 toring compliance with this act. 21 (20)(32)A licensed automotive recycler, used or second- 22 hand vehicle parts dealer, vehicle scrap metal processor, vehicle 23 salvage pool operator, distressed vehicle transporter, foreign 24 salvage vehicle dealer, or broker who has removed a scrap vehicle 25 from this state for the purpose of rebuilding the vehicle or 26 selling the vehicle to a person other than a vehicle scrap metal 27 processor, shall receive an automatic suspension oftheirITS 04523'01 22 1 dealer license and of any salvage vehicle agent's license 2 assigned to that dealer for a period of 30 days. Upon receipt by 3 the secretary of state of a written request from the dealer, the 4 dealer shall have the right to an immediate hearing on the matter 5 within that 30-day period. 6 (21)(33)For the purpose of this section, the estimated 7 costs of the repair parts shall be determined by using the cur- 8 rent published retail cost of original manufacturer equipment 9 parts or an estimate of the actual cost of the repair parts. The 10 estimated labor costs shall be computed by using the hourly rate 11 and time allocationswhichTHAT are reasonable and commonly 12 assessed in the repair industry in the community where the 13 repairs are performed. 14 (22)(34) Beginning July 1, 1994,A POLICE AGENCY SHALL 15 RECEIVE a fee of $50.00shall be received by a police agency16 for an inspection of a vehicle pursuant to subsection(24)17 (11). The POLICE AGENCY SHALL CREDIT THE feeshall be credited18to the budget of that police agency and usedTO ITS BUDGET AND 19 USE THE FEE for law enforcement purposes that affect stolen vehi- 20 cles, stolen vehicle parts, and salvage vehicle inspections. A 21 local police agency shall compensate an off-duty and limited 22 enforcement police officer for a salvage vehicle inspection. 23 (23)(35) For the purpose ofAS USED IN this section, 24 "actual cash value" means the retail dollar value of a vehicle as 25 determined by an objective vehicle evaluation, using local market 26 resources such as dealers or want ads,orby an independent 27 vehicle evaluation or vehicle appraisal service, or by REFERENCE 04523'01 23 1 TO a current issue of a nationally recognized used vehicle guide 2 for financial institution appraisal purposes in this state. 3(36) The secretary of state shall convene a task force in a4timely manner to develop standards for police to use in perform-5ing inspections. The task force shall include representatives of6the Michigan sheriffs association, the Chiefs of police associa-7tion, the Michigan state police, the insurance industry, a used8vehicle parts dealer, the automobile theft prevention authority,9and an automotive recycler. Inspections may continue to be per-10formed under existing standards until the task force approves new11standards. Inspections under this act must be according to these12standards and the standards shall be reported to the13legislature.14 Sec. 248. (1)A dealer license shall not be grantedTHE 15 SECRETARY OF STATE SHALL NOT GRANT A DEALER LICENSE, OTHER THAN A 16 LICENSE RENEWAL, under this section until an investigation is 17 made of the applicant's qualifications under this act., except18that this subsection does not apply to license renewals.The 19 secretary of state shall make the investigation within 15 days 20 after receiving the application andmakePREPARE a report on 21 the investigation. 22 (2) An applicant for a new vehicle dealer or a used or sec- 23 ondhand vehicle dealer or broker license shall include a properly 24 executed bond or renewal certificate with the application. If a 25 renewal certificate is used, the bond is considered renewed for 26 each succeeding year in the same amount and with the same effect 27 as an original bond. The bond shall be in thesumAMOUNT of 04523'01 24 1 $10,000.00with good and sufficient surety to beAND ISSUED BY 2 A SURETY approved by the secretary of state. The bond shall 3 indemnify or reimburse a purchaser, seller, financing agency, or 4 governmental agency for monetary loss caused through fraud, 5 cheating, or misrepresentation in the conduct of the vehicle 6 business whether the fraud, cheating, or misrepresentation was 7 made by the dealer or by an employee, agent, or salesperson of 8 the dealer. The surety shall make indemnification or reimburse- 9 ment for a monetary loss only after A judgment based on fraud, 10 cheating, or misrepresentation has been entered in a court of 11 record against the licensee. The bond shall also indemnify or 12 reimburse the state for any sales tax deficiency as provided in 13 the general sales tax act, 1933 PA 167, MCL 205.51 to 205.78, or 14 use tax deficiency as provided in the use tax act, 1937 PA 94, 15 MCL 205.91 to 205.111, for the year in which the bond is in 16 force. The surety shall make indemnification or reimbursement 17 only after final judgment has been entered in a court of record 18 against the licensee. A dealer or applicant who has furnished 19 satisfactory proof that a bond similar to the bond required by 20 this subsection is executed and in force is exempt from the bond 21 provisions set forth in this subsection. The aggregate liability 22 of the surety shall not exceed the sum of the bond. The surety 23 on the bond may cancel the bondupon givingIF THE SURETY GIVES 24 30 days' notice in writing to the secretary of state.and25thereafterTHE SURETY is not liable for a breach of condition 26 occurring after the effective date of the cancellation. 04523'01 25 1 (3) An applicant for a new vehicle dealer or a used or 2 secondhand vehicle dealer license shall apply for not less than 2 3 dealer platesas provided byDESCRIBED IN section 245 and shall 4 include with the application the proper fee as provided by sec- 5 tion 803. 6 (4) As a condition precedent to the granting of a license, a 7 dealer shall file with the secretary of state an irrevocable 8 written stipulation, authenticated by the applicant, stipulating 9 and agreeing that legal process affecting the dealer, served on 10 the secretary of state or a deputy of the secretary of state, has 11 the same effect as if personally served on the dealer. This 12 appointment remains in force as long as the dealer has any out- 13 standing liability within this state. 14 (5) A person shall not carry on or conduct the business of 15 buying, selling, brokering, or dealing in vehicles of a type 16 required to be titled under this act unless the person obtains a 17 dealer license from the secretary of state authorizing the carry- 18 ing on or conducting of that business. A person shall not carry 19 on or conduct the business of buying, selling, brokering, or 20 dealing in distressed, late model vehicles or salvageable parts 21 unless the person obtains a used or secondhand vehicle parts 22 dealer, an automotive recycler, or a salvage pool license from 23 the secretary of state or is an insurance company admitted to 24 conduct business in this state. A person shall not carry on or 25 conduct the business of buying vehicles to process into scrap 26 metal or store or display vehicles as an agent or escrow agent of 27 an insurance company unless the person obtains a dealer license 04523'01 26 1 from the secretary of state.A vehicle scrap metal processor2who does not purchase vehicles or salvageable parts from unli-3censed persons is not required to obtain a dealer license.A 4 person from another state shall not purchase, sell, or otherwise 5 deal in distressed, late model vehicles or salvageable parts 6 unless the person obtains a foreign salvage vehicle dealer 7 license from the secretary of state as prescribed under 8 section 248b. A person, including a dealer, shall not purchase 9 or acquire a distressed, late model vehicle or a salvageable part 10 through a salvage pool, auction, or broker without a license as a 11 salvage vehicle agent. The secretary of state shall investigate 12 and seek prosecution, if necessary, of persons allegedly conduct- 13 ing a business without a license. 14 (6) The application for a dealer license shall be in the 15 form prescribed by the secretary of state and shall be signed by 16 the applicant. In addition to other informationas may be17required byTHAT the secretary of state MAY REQUIRE, the appli- 18 cation shall include all of the following: 19 (a) Name of applicant. 20 (b) Location of applicant's established place of business in 21 this state. 22 (c) The name under which THE APPLICANT DOES OR WILL CONDUCT 23 business.is to be conducted.24 (d) If the business is a corporation, the state of 25 incorporation. 26 (e) Name, address, date of birth, and social security number 27 of each owner or partner and, if a corporation, the name, 04523'01 27 1 address, date of birth, and social security number of each of the 2 principal officers. 3 (f) The county in which the business is to be conducted and 4 the address of each place of business in that county. 5 (g) If new vehicles are to be sold, the maketo be handled6 OF THE VEHICLES. Each new vehicle dealer shall send with the 7 application for license a certification that the dealer holds a 8 bona fide contract to act as factory representative, factory dis- 9 tributor, or distributor representative to sell at retail 10 ......... (the make of vehicle to be sold). 11 (h) A statement of the previous history, record, and associ- 12 ations of the applicant and of each owner, partner, officer, and 13 director., whichTHE statement shall be sufficient to estab- 14 lish to the satisfaction of the secretary of state the business 15 reputation and character of the applicant. 16 (i) A statement showing whether the applicant has previously 17 applied for a license, the result of the application, and whether 18 the applicant has ever been the holder of a dealer license that 19 was revoked or suspended. 20 (j) If the applicant is a corporation or partnership, a 21 statement showing whether a partner, employee, officer, or direc- 22 tor has been refused a license or has been the holder of a 23 license that was revoked or suspended. 24 (k) If the application is for a used or secondhand vehicle 25 parts dealer or an automotive recycler, it shall include all of 26 the following: 04523'01 28 1 (i) Evidence that the applicant maintains or will maintain 2 an established place of business. 3 (ii) Evidence that the applicant maintains or will maintain 4 a police book and vehicle parts purchase and sales records as 5 required under this act. 6 (iii) Evidence of worker's compensation insurance coverage 7 for employees classified under the North American industrial 8 classification system number 42114, entitled "motor vehicle parts 9 (used) wholesalers" or under the national council on compensation 10 insurance classification code number 3821, entitled "automobile 11 dismantling and drivers", if applicable. 12 (l) Certification that neither the applicant nor another 13 person named on the application is acting as the alter ego of any 14 other person or persons in seeking the license. For the purpose 15 of this subdivision, "alter ego" means a person who acts for and 16 on behalf of, or in the place of, another person for purposes of 17 obtaining a vehicle dealer license. 18 (7) A person shall apply separately for a dealer license for 19 each county in which IT DOES OR WILL CONDUCT business.is to be20conducted.Before moving 1 or more of his or her places of busi- 21 ness or opening an additional place of business, a dealer shall 22 apply to the secretary of state for and obtain a supplemental 23 dealer license., for which a fee shall not be charged.THE 24 SECRETARY OF STATE SHALL NOT CHARGE A FEE FOR A SUPPLEMENTAL 25 DEALER LICENSE. A dealer license entitles the dealer to conduct 26 the business of buying, selling, and dealing in vehicles or 27 salvageable parts in the county covered by the license. The 04523'01 29 1 dealer licenseshallalsoentitleENTITLES the dealer to 2 conduct at any other licensed dealer's established place of busi- 3 ness in this state only the business of buying, selling, or deal- 4 ing in vehicles at wholesale. 5 (8) The secretary of state shall classify and differentiate 6 vehicle dealers according to the type of activity they perform. 7 A dealer shall not engage in activities of a particular classifi- 8 cationasprovided in this act unless the dealer is licensed in 9 that classification. An applicant may apply for a dealer license 10 in 1 or more of the following classifications: 11 (a) New vehicle dealer. 12 (b) Used or secondhand vehicle dealer. 13 (c) Used or secondhand vehicle parts dealer. 14 (d) Vehicle scrap metal processor. 15 (e) Vehicle salvage pool operator. 16 (f) Distressed vehicle transporter. 17 (g) Broker. 18 (h) Foreign salvage vehicle dealer. 19 (i) Automotive recycler. 20 (9) A dealer license expires on December 31 of the last year 21 for which the license is issued. The secretary of state may 22 renew a dealer license for a period of not more than 4 years upon 23 application and payment of the fee required by section 807. 24 (10) A dealer may conduct the business of buying, selling, 25 or dealing in motor homes, trailer coaches, trailers, or pickup 26 campers at a recreational vehicle show conducted at a location in 04523'01 30 1 this state without obtaining a separate or supplemental license 2 under subsection (7) if all of the following apply: 3 (a) The dealer is licensed as a new vehicle dealer or used 4 or secondhand vehicle dealer. 5 (b) The duration of the recreational vehicle show is not 6 more than 14 days. 7 (c) Not less than 14 days before the beginning date of the 8 recreational vehicle show, the show producer notifies the secre- 9 tary of state, in a manner and form prescribed by the secretary 10 of state, that the recreational vehicle show is scheduled, the 11 location, dates, and times of the recreational vehicle show, and 12 the name, address, and dealer license number of each dealer par- 13 ticipating in the recreational vehicle show. 14 Sec. 251. (1) Each new vehicle dealer, used vehicle dealer, 15 and broker shall maintain a record in a manner prescribed by the 16 secretary of state of each vehicle of a type subject to titling 17 under this act that is bought, sold, or exchanged by the dealer 18 or received or accepted by the dealer for sale or exchange. 19 (2) Each record shall contain the date of the purchase, 20 sale, or exchange or receipt for the purpose of sale, a descrip- 21 tion of the vehicle, together with the name and address of the 22 seller, the purchaser, and the alleged owner or other persons 23 from whom the vehicle was purchased or received, or to whom it 24 was sold or delivered. The record shall contain a copy of all 25 odometer mileage statements received by the dealer upon purchas- 26 ing or acquiring a vehicle and a copy of the odometer mileage 27 statement furnished by the dealer upon sale of a vehicle as 04523'01 31 1 prescribed in section 233a. If the vehicle is purchased, sold, 2 leased, or exchanged through a broker, the record shall include 3 the broker's name and dealer license number and the amount of the 4 broker's fee, commission, compensation, or other valuable consid- 5 eration paid by the purchaser or lessee or paid by the dealer, or 6 both. The records of all vehicles purchased, sold, leased, or 7 exchanged through a broker maintained by the secretary of state 8 shall be in an electronic format determined by the secretary of 9 state. A dealer shall retain for not less than 5 years each 10 odometer mileage statement the dealer receives and each odometer 11 mileage statement furnished by the dealer upon the sale of a 12 vehicle. The description of the vehicle, in the case of a motor 13 vehicle, shall also include the vehicle identification number and 14 other numbers or identification marks as may be on the vehicle, 15 and shall also include a statement that a number has been oblit- 16 erated, defaced, or changed, if that is the fact. For a trailer 17 or semitrailer, the record shall include the vehicle identifica- 18 tion number and other numbers or identification marks as may be 19 on the trailer or semitrailer. 20 (3) Not more than 20 days after the delivery of the vehicle, 21 the seller shall deliver to the buyer in person or by mail to the 22 buyer's last known address a duplicate of a written statement, on 23 a form prescribed by the secretary of state in conjunction with 24 the department of treasury, describing clearly the name and 25 address of the seller, the name and address of the buyer, the 26 vehicle sold to the buyer, the cash sale price of the vehicle, 27 the cash paid down by the buyer, the amount credited the buyer 04523'01 32 1 for a trade-in, a description of the trade-in, the amount charged 2 for vehicle insurance, stating the types of insurance covered by 3 the insurance policy, the amount charged for a temporary regis- 4 tration plate, the amount of any other charge and specifying its 5 purpose, the net balance due from the buyer, and a summary of 6 insurance coverage to be affected. If the vehicle sold is a new 7 motor home, the written statement shall contain a description, 8 including the year of manufacture, of every major component part 9 of the vehicle that has its own manufacturer's certificate of 10 origin. The written statement shall disclose if the vehicle sold 11 is a vehicle that the seller had loaned or leased to a political 12 subdivision of this state for use as a driver education vehicle. 13 The SELLER SHALL DATE THE written statement,shall be dated,14 but THE DATE SHALL not BE later than the actual date of delivery 15 of the vehicle to the buyer. The original and all copies of the 16 prescribed form shall contain identical information. The state- 17 ment shall be furnished by the seller, shall be signed by the 18 seller or the seller's agent and by the buyer, and shall be filed 19 with the application for new title or registration. Failure of 20 the seller to deliver this written statement to the buyer does 21 not invalidate the sale between the seller and the buyer. 22 (4) A retail vehicle sale is void unless both of the follow- 23 ing conditions are met: 24 (a) The sale is evidenced by a written memorandum that con- 25 tains the agreement of the parties and is signed by the buyer and 26 the seller or the seller's agent. 04523'01 33 1 (b) The agreement contains a place for acknowledgment by the 2 buyer of the receipt of a copy of the agreement or actual 3 delivery of the vehicle is made to the buyer. 4 (5)EachA DEALER SHALL MAKE EACH dealer record and inven- 5 tory, including the record and inventory of a vehicle scrap6metal processor not required to obtain a dealer license, shall be7open toAVAILABLE FOR inspection OR INVESTIGATION by apolice8 LAW ENFORCEMENT officer or an authorized officer or investigator 9 of the secretary of state during reasonable or established busi- 10 ness hours. 11 (6) A dealer licensed as a distressed vehicle transporter 12 shall maintain records in a form as prescribed by the secretary 13 of state. The records shall identify each distressed vehicle 14 that is bought, acquired, and sold by the dealer. The record 15 shall identify the person from whom a distressed vehicle was 16 bought or acquired and the dealer to whom the vehicle was sold. 17 The record shall indicate whether a certificate of title or sal- 18 vage certificate of title was obtained by the dealer for each 19 vehicle. 20 (7) A dealer licensed under this act shall maintain records 21 for a period of 5 years.The records shall be made available22for inspection by the secretary of state or other law enforcement23officials.The secretary of state shall inspect a dealer once 24 every 4 years and as determined necessary by the secretary of 25 state or a law enforcement officer. The secretary of state may 26 issue an order summarily suspending the license of a dealer 27 pursuant to section 92 of the administrative procedures act of 04523'01 34 1 1969, 1969 PA 306, MCL 24.292, based on an affidavit by a person 2 familiar with the facts set forth in the affidavit that the 3 dealer has failed to maintain the records required by this act or 4 failed to provide the records for inspection as requested by the 5 secretary of state, or has otherwise hindered, obstructed, or 6 prevented the inspection of records authorized under this 7 section. The dealer to whom the order is directed shall comply 8 immediately, but on application to the department shall be 9 afforded a hearing within 30 days pursuant to the administrative 10 procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328. On 11 the basis of the hearing, the summary order shall be continued, 12 modified, or held in abeyance not later than 30 days after the 13 hearing. 14 (8) A dealer licensed as a vehicle salvage pool operator or 15 broker shall maintain records in a form as prescribed by the sec- 16 retary of state. The records shall contain a description of each 17 vehicle or salvageable part stored by the dealer, the name and 18 address of the insurance company or person storing the vehicle or 19 salvageable part, the period of time the vehicle or salvageable 20 part was stored, and the person acquiring the vehicle or salvage- 21 able part. In the case of a late model vehicle, THE DEALER SHALL 22 MAINTAIN a record of the purchase or sale of a major component 23 part of the vehicleshall be maintained identifyingTHAT 24 IDENTIFIES the part purchased or sold, the name and address of 25 the seller or purchaser, the date of the purchase or sale, and 26 the identification number assigned to the part by the dealer. 27 The DEALER SHALL RETAIN THE record of the purchase or sale of a 04523'01 35 1 partshall be maintainedin or attached to the dealer's police 2 book or hard copy of computerized data entries and reference 3 codes.and shall be accessibleTHE DEALER SHALL MAKE THE RECORD 4 AVAILABLE at the dealer's location. In addition, a dealer 5 licensed as a broker shall maintain a record of the odometer 6 mileage reading of each vehicle sold pursuant to an agreement 7 between the broker and the buyer or the broker and the seller. 8 The DEALER SHALL MAINTAIN THE record of odometer mileageshall9be maintainedfor 5 years and shallcontainINCLUDE all of the 10 information required by section 233a IN THE RECORD. 11 (9) A dealer licensed as a used vehicle parts dealer or an 12 automotive recycler shall maintain records in a form prescribed 13 by the secretary of state. The records shall contain the date of 14 purchase or acquisition of the vehicle, a description of the 15 vehicle including the color, and the name and address of the 16 person from whom the vehicle was acquired. If the vehicle is 17 sold, the record shall contain the date of sale and the name and 18 address of the purchaser. The record shall indicate if the cer- 19 tificate of title or salvage or scrap certificate of title was 20 obtained by the dealer. In the case of a late model vehicle, a 21 record of the purchase or sale of a major component of the vehi- 22 cle shall be maintained identifying the part purchased or sold, 23 the name and address of the seller or purchaser, the date of the 24 purchase or sale, and the identification number assigned to the 25 part by the dealer, except that a bumper remanufacturer is not 26 required to maintain a record of the purchase of a bumper. 27 However, a bumper remanufacturer shall assign and attach an 04523'01 36 1 identification number to a remanufactured bumper and maintain a 2 record of the sale of the bumper. The DEALER SHALL MAINTAIN THE 3 record of the purchase or sale of a partshall be maintainedin 4 or attached to the dealer's police book or hard copy of computer- 5 ized data entries and reference codes.and shall be accessible6 THE DEALER SHALL MAKE THE RECORD AVAILABLE at the dealer's 7 location. 8 (10) A dealer licensed as a vehicle scrap metal processor 9 shall maintain THE recordsasIN THE MANNER prescribed by the 10 secretary of state.As providedFOR A VEHICLE DESCRIBED in 11 section217c217C(15), the records shall containfor a vehicle12purchased from a dealera copy of the scrap vehicle inventory,13including the name and address of the dealer, a description of14the vehicle acquired, and the date of acquisitionFORM DESCRIBED 15 IN SECTION 217C(15).IfFOR a vehicleispurchased or 16 acquired from a person other than a dealer, OR FOR A VEHICLE 17 DESCRIBED IN SECTION 217C(16), the record shall contain the date 18 of acquisition, a description of the vehicle,including the 19 YEAR, MAKE, MODEL, VEHICLE IDENTIFICATION NUMBER, AND color, the 20 name and address of the person from whom the vehicle was 21 acquired, and whether a certificate of title or salvage or scrap 22 certificate of title was obtained by the dealer. 23 (11) A dealer licensed as a foreign salvage vehicle dealer 24 shall maintain records in a form prescribed by the secretary of 25 state. The records shall contain the date of purchase or acqui- 26 sition of each distressed vehicle, a description of the vehicle 27 including the color, and the name and address of the person from 04523'01 37 1 whom the vehicle was acquired. If the vehicle is sold, the 2 record shall contain the date of sale and the name and address of 3 the purchaser. The record shall indicate if the certificate of 4 title or salvage or scrap certificate of title was obtained by 5 the dealer. In the case of a late model vehicle, a record of the 6 purchase or sale of each salvageable part purchased or acquired 7 in this state shall be maintained and the record shall contain 8 the date of purchase or acquisition of the part, a description of 9 the part, the identification number assigned to the part, and the 10 name and address of the person to or from whom the part was pur- 11 chased, acquired, or sold. The DEALER SHALL MAINTAIN THE record 12 of the sale, purchase, or acquisition of a partshall be13maintainedin the dealer's police book. The police book shall 14 only contain vehicles and salvageable parts purchased in this 15 state or used in the repair of a vehicle purchased in this 16 state. The DEALER SHALL MAKE THE police book and the records of 17 vehicle part sales, purchases, or acquisitionsshall be made18 available at a location within the state for inspection by the 19 secretary of state within 48 hours after a request by the secre- 20 tary of state. 21 (12) The secretary of state shall make periodic unannounced 22 inspections of the records, facilities, and inventories of auto- 23 motive recyclers and used or secondhand vehicle parts dealers. 24 (13) The secretary of state may promulgate rules to imple- 25 ment this section pursuant to the administrative procedures act 26 of 1969, 1969 PA 306, MCL 24.201 to 24.328. 04523'01 Final page. DAM