May 20, 2010, Introduced by Rep. Knollenberg and referred to the Committee on Regulatory Reform.
A bill to amend 1981 PA 118, entitled
"An act to regulate motor vehicle manufacturers, distributors,
wholesalers, dealers, and their representatives; to regulate
dealings between manufacturers and distributors or wholesalers and
their dealers; to regulate dealings between manufacturers,
distributors, wholesalers, dealers, and consumers; to prohibit
unfair practices; to provide remedies and penalties; and to repeal
certain acts and parts of acts,"
by amending sections 3, 5, and 6 (MCL 445.1563, 445.1565, and
445.1566), sections 3 and 5 as amended by 1998 PA 456 and section 6
as amended by 1983 PA 188, and by adding section 14a.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec.
3. (1) "Distributor" means any person, including an
importer,
resident or nonresident, who that
is located in or
outside
of this state and is engaged in the
business pursuant to a
dealer
agreement, in whole or in part, of
offering for sale,
selling, or distributing new and unaltered motor vehicles to a new
motor
vehicle dealer , who under
a dealer agreement, that maintains
a
factory representative for such purposes, resident or
nonresident,
that is located in or outside
of this state for
purposes
of conducting that business, or who that controls
any a
person ,
resident or nonresident, who in whole or in part that is
located in or outside of this state and offers for sale, sells, or
distributes new and unaltered motor vehicles to a new motor vehicle
dealer.
Distributor does not include a person who that alters or
converts motor vehicles for sale to a new motor vehicle dealer.
(2) "Established place of business" means a permanent,
enclosed
commercial building located within in this state that is
easily accessible and open to the public at all reasonable times
and
at which the business of a new motor vehicle dealer may legally
conduct business, including the display and repair of motor
vehicles,
may be lawfully carried on in accordance compliance with
the terms of all applicable buildings codes, zoning, and other
land-use regulatory ordinances.
(3) "Factory branch" means an office maintained by a
manufacturer or distributor for the purpose of selling or offering
for
sale to sell vehicles to a distributor, wholesaler, or new
motor
vehicle dealer , or for
directing or supervising in whole or
in
part any factory or distributor representatives. The term
includes any sales promotion organization maintained by a
manufacturer
or distributor which that is engaged in promoting the
sale of a particular make of new motor vehicles in this state to
new motor vehicle dealers.
(4) "Factory representative" means an agent or employee of a
manufacturer, distributor, or factory branch retained or employed
for the purpose of making or promoting the sale of new motor
vehicles or for supervising or contracting with new motor vehicle
dealers or proposed motor vehicle dealers.
(5) "Former dealer" means a new motor vehicle dealer that
entered into a dealer agreement with a predecessor manufacturer and
1 of the following occurred:
(a) The dealer entered into a termination agreement or
deferred termination agreement with the predecessor manufacturer or
a successor manufacturer related to that dealer agreement.
(b) The dealer agreement was terminated, canceled, not
renewed, discontinued, rejected, not assumed, or otherwise ended.
Sec.
5. (1) "New motor vehicle" means a motor vehicle which
that is in the possession of the manufacturer, distributor, or
wholesaler, or has been sold only to a new motor vehicle dealer and
on
for which the new
motor vehicle dealer has not issued an
original
title. has not been issued from the new motor vehicle
dealer.
(2) "New motor vehicle dealer" means a person, including a
distributor,
who that holds a dealer agreement granted by a
manufacturer, distributor, or importer for the sale or distribution
of
its motor vehicles; , who is
engaged in the business of
purchasing, selling, exchanging, or dealing in new motor vehicles;
and
who has an established place of business in this state.
(3)
"Person" means a natural person an individual,
partnership, corporation, limited liability company, association,
trust, estate, or other legal entity.
(4) "Predecessor manufacturer" means a manufacturer that
sells, conveys, or otherwise transfers all or part of its business
to a successor manufacturer.
(5) (4)
"Proposed new motor vehicle
dealer" means a person who
has an application pending for a new dealer agreement with a
manufacturer or distributor. Proposed motor vehicle dealer does not
include a person whose dealer agreement is being renewed or
continued.
Sec. 6. (1) "Relevant market area" means 1 of the following:
(a)
For a proposed new motor vehicle dealer or a new motor
vehicle
dealer who plans to relocate his or her place of business
in
a county having a population which is greater than 25,000, the
area
within a radius of 6 miles of the intended site of the
proposed
or relocated dealer. The 6-mile distance shall be In a
county that has a population of more than 25,000, the area within a
radius of 6 miles of the site of the intended place of business of
a proposed new vehicle dealer or the intended place of business of
a new vehicle dealer that plans to relocate its place of business.
For purposes of this section, the 6-mile distance is determined by
measuring
the distance between the nearest surveyed boundary of the
an existing new motor vehicle dealer's principal place of business
and the nearest surveyed boundary line of the proposed or relocated
new motor vehicle dealer's principal place of business.
(b)
For a proposed new motor vehicle dealer or a new motor
vehicle
dealer who plans to relocate his or her place of business
in
a county having a population which is not greater than 25,000,
the
area within a radius of 10 miles of the intended site of the
proposed
or relocated dealer, or the county line, whichever is
closer
to the intended site. The 10-mile distance shall be In a
county that has a population of 25,000 or fewer, the area within a
radius of 10 miles of the site of the intended place of business of
a proposed new vehicle dealer or the intended place of business of
a new vehicle dealer that plans to relocate its place of business.
For purposes of this section, the 10-mile distance is determined by
measuring the distance between the nearest surveyed boundary line
of
the an existing new motor vehicle dealer's principal place
of
business and the nearest surveyed boundary line of the proposed or
relocated new motor vehicle dealer's principal place of business.
(2) "Successor manufacturer" means a manufacturer that
acquires, succeeds to, or assumes any part of the business of
another manufacturer on or after January 1, 2009, as the result of
any of the following:
(a) A change in ownership, operation, or control of a
predecessor manufacturer by sale or transfer of assets, corporate
stock, or other equity interest, assignment, merger, consolidation,
combination, joint venture, redemption, court-approved sale,
operation of law, or any other means.
(b) Termination, suspension, or cessation of a part or all of
the business operations of a predecessor manufacturer.
(c) Discontinuance of the sale of a product line.
(d) A change in distribution system by a predecessor
manufacturer, whether through a change in distributor or the
predecessor manufacturer's decision to cease conducting any
business through a particular distributor.
Sec. 14a. For a period of 10 years after the date that a
successor manufacturer acquires, succeeds to, or assumes any part
of the business of a predecessor manufacturer, the successor
manufacturer shall not enter into a dealer agreement in the
relevant market area of an established place of business of a
former dealer, or permit the relocation of any existing dealer into
that relevant market area, for the same line make as a line make of
the predecessor manufacturer that was included in the dealer
agreement of the former dealer, unless 1 of the following is met:
(a) The successor manufacturer first offers a dealer agreement
for that line make in the relevant market area to the former
dealer, or the designated family member described in section 15 if
the former dealer is deceased or incapacitated, without cost to the
former dealer.
(b) The successor manufacturer pays the former dealer, or the
designated family member described in section 15 if the former
dealer is deceased or incapacitated, fair and reasonable
compensation value of the dealership of the former dealer for that
line make, calculated in the same manner prescribed in section 11
for a termination, cancellation, nonrenewal, or discontinuance of a
dealer agreement.
(c) The successor manufacturer establishes, in the circuit
court for the county in which the relevant market area is located,
that the former dealer, or the designated family member described
in section 15 if the former dealer is deceased or incapacitated, is
unfit to own or manage a dealership for that line make in the
relevant market area because the former dealer or designated family
member lacks sufficient training, experience, or financial capital;
because the former dealer or designated family member is
incompetent or of poor character; or because of the former dealer's
poor performance under the dealer agreement with the predecessor
manufacturer.