S 1423 — Concerns facilities used by applicants for new motor vehicle dealer licenses.*

S1423 1R [First Reprint] SENATE, No.

LAGANA District 38 (Bergen)  Senator   ANTHONY  M.   SYNOPSIS      Concerns facilities used by new motor vehicle dealer licenses;

establishesBUCCO provisionalDistrict new25 motor(Morris vehicleand dealerPassaic) licenses.  Co-Sponsored by:

Senators Tiver and Corrado   CURRENT  VERSION  OF  TEXTSYNOPSIS      IntroducedConcerns Pendingfacilities Technicalused Review by Legislativeapplicants Counsel.for new motor vehicle dealer licenses.

  CURRENT VERSION OF TEXT      As reported by the Senate Budget and Appropriations Committee on June 28, 2026, with amendments.

     "Used motor vehicle" means every motor vehicle and motorized bicycle, except a nonconventional type motor vehicle, title to, or possession of, which has been transferred from the person who first acquired it from the manufacturer or dealer, and so used as to become what is commonly known as "secondhand" within the ordinary meaning thereof, and includes every motor vehicle and motorized bicycle other than a "new motor vehicle," a "nonconventional type motor vehicle"vehicle," or a manufactured home subject to real property taxation.

     "Any motor vehicle," "every motor vehicle," or similar term, means both new and used motor vehicles, except a "nonconventional type motor vehicle."      "Nonconventional type motor vehicle" means every vehicle not designed or used primarily for the transportation of persons or property and only incidentally operated or moved over a highway, including, but not limited to, ditch-digging apparatus, well-boring apparatus, road and general purpose construction and maintenance machinery, asphalt spreaders, bituminous mixers, bucket loaders, ditchers, leveling graders, finishing machines, motor graders, road rollers, scarifiers, earth-moving carryalls, scrapers, power shovels, drag lines, self-propelled cranes, earth-moving equipment, trailers and semitrailers which weigh less than 2,500 pounds, except that no mobile or manufactured home or travel trailer shall be classified as a nonconventional type motor vehicle, motorized wheelchairs, motorized lawn mowers, bogies, farm equipment having a factory shipping weight of less than 1,500 pounds, whether or not motorized, including farm tractors within said weight limitation, industrial tractors, scooters, go-carts, gas buggies and golf carts.  The Chief Administrator of the New Jersey Motor Vehicle Commission shall have power to make, amendamend, and repeal regulations, not inconsistent with the provisions of this paragraph, prescribing what further vehicles or types of vehicles, not specified in this paragraph, shall be included in the category of nonconventional type motor vehicles.

     "Contract" means conditional sale agreement, bailment, lease, chattel mortgage, trust receiptreceipt, or any other form of security or possession agreement executed prior to January 1, 1963, wherein and whereby possession of a motor vehicle is delivered to the buyer and title therein is to vest in the buyer at a subsequent time upon the payment of part or all of the price, or upon the performance of any other condition or happening of any contingency, or upon the payment of a sum substantially equivalent to the value of the motor vehicle, by which contract it is agreed that the buyer is bound to become, or has the option of becoming, the owner of the motor vehicle upon full compliance with the terms of the contract.

     "New motor vehicle dealer" means [the agent, distributor, or] 1the agent, distributor, or1 an authorized dealer of [the manufacturer] a1[a motor vehicle franchisor, as defined in this section,section,] the manufacturer1 of [the] a1[a] the1 new motor vehicle who has an established place of business.  A new motor vehicle dealer shall sell a minimum of four or more new motor vehicles within a 12-month timeframe and may engage in the business of buying, selling, or dealing in used motor vehicles in this State under the provisions of this chapter.

     “Motor1[“Motor vehicle franchisor” means a person engaged in the business of manufacturing, assembling, or distributing new motor vehicles, or importing new motor vehicles into the United States that were manufactured or assembled in a foreign country, who, under normal business conditions, manufactures, assembles, distributes, or imports at least 10 new motor vehicles during a calendar year.year.]1      "Used motor vehicle dealer" means a person engaged in the business of selling, buying, or dealing in four or more used motor vehicles per year at an established place of business, but who is not a licensed new motor vehicle dealer.  A used motor vehicle dealer shall engage only in the business of buying, selling, or dealing in used motor vehicles in this State under the provisions of this chapter and shall not engage in the business of buying, selling, or dealing in new motor vehicles in this State.

     "Used motor vehicle dealer" means a person engaged in the business of selling, buying or dealing in four or more used motor vehicles per year at an established place of business, but who is not a licensed new motor vehicle dealer.  A used motor vehicle dealer shall engage only in the business of buying, selling, or dealing in used motor vehicles in this State under the provisions of this chapter and shall not engage in the business of buying, selling, or dealing in new motor vehicles in this State.

     "Secured party" means a lender, sellerseller, or other person in whose favor there is a security interest.

(cf:(cf:  P.L.2021, c.462, s.1)        2.    R.S.39:10-19 is amended to read as follows:

P.L.2021,     c.462,39:10-19.  s.1)a.   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:       2.   [a.] R.S.39:10-19(1)       the person is amendeda tolicensed readreal estate broker acting as follows: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);

     39:10-19.  a.  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.][b.] (1)     (2)       the person is aauthorized licensedto realdo estateso brokerunder acting as an agent or broker in the saleprovisions of mobilethis homeschapter withoutand theirP.L.1985, ownc.361 motor(C.56:10-26 poweret otherseq.). 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.]b.    (2)     The chief administrator may, upon application in such form as the chief administrator prescribes, license any proper person isas authorizeda new motor vehicle dealer, used motor vehicle dealer, or [, a] leasing dealer.  A licensed real estate broker shall be entitled to doact soas underan agent or broker in the provisionssale of thisa chaptermobile andor P.L.1985,manufactured c.361home, (C.56:10-26as etdefined seq.).in paragraph (1) of subsection a.

     b.    The chief administrator may, upon application in such form as the chief administrator prescribes, license any proper person as a new motor vehicle dealer, used motor vehicle dealer, or[, a] 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 paragraph (1) of subsection a.

     c.   c.     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 pursuant to subsection b.

     d.    Each applicant for a new motor vehicle dealer 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] or display of motor vehicles [with such] .  For the purpose of servicing motor vehicles, the applicant’s place of business shall have equipment [installed] therein as shall be requisite for the servicing of motor vehicles in such manner as to make [them] the motor vehicles 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.  Each applicant shall have the choice to:       (1) (1)   utilize the space attached to the applicant’s place of business for the servicing of motor vehicles;

     (2) (2)   utilize a separate space on the same property as the applicant’s place of business for the servicing of motor vehicles;

or      (3) (3)   establish an off-site facility within the relevant market area of the applicant’s exiting1[exiting]1 place of business, as defined by section 1 of P.L.1982, c.156 (C.56:10-16).  The off-site facility shall be used solely for the servicing of motor vehicles 1, shall be located within the State,1 and shall be subject to the provisions of section1[section 1 ofof]1 P.L.1982, c.156 (C.56:10-16 et.

seq.). seq.).      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.       e.    The chief administrator shall issue a provisional license upon the substantial completion of the new motor vehicle dealer license application.

     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.

     e.     1[The chief administrator shall issue a provisional license upon the substantial completion of the new motor vehicle dealer license application.

     f. f.]1 (1) Any Any person who possesses a used motor vehicle dealer license at the time of enactment of P.L.2021, c.484 shall maintain an established place of business consisting of a minimum office space of 72 square feet within a permanent, enclosed building located in the State of New Jersey, in addition to complying with all other applicable regulations prescribed by the chief administrator.

     (2) (2)   Each applicant for a used motor vehicle dealer license, or any licensee who relocates its place of business on or after the effective date of P.L.2021, c.484, shall meet the requirements for an established place of business for a used motor vehicle dealer, which shall be established by the chief administrator by regulation adopted pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.).

     g.   1[g.] f.1     An established place of business of a new motor vehicle dealer or a used motor vehicle dealer shall display an exterior sign permanently affixed to the land or building, which sign is consistent with local ordinances and has letters easily readable from the major avenues of traffic.  The sign shall include the dealer name or trade name, provided such trade name has been previously disclosed to the chief administrator.

     h.   1[h.] g.1     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.

     i.    1[i.] h.1      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 to the lessee shall not be deemed to be engaged in the business of buying, selling, or dealing in motor vehicles in this State.  [Provided however, that] However, a leasing dealer who wishes to engage in the business of buying, selling, or dealing in motor vehicles in this State by selling any vehicle at the end of the lease term to a consumer other than the lessee, shall be required to obtain a used car dealer license pursuant to this section.

(cf:  P.L.2021, c.484, s.1)        3.    This act shall take effect immediately and shall apply to all initial and renewal new motor vehicle dealer license applications and to all initial and renewal new motor vehicle dealer license applications that are currently subject to a pending administrative proceeding pending before the chief administrator or the Office of Administrative Law or on appeal thereof.

    STATEMENT        This bill provides that an applicant of a new motor vehicle dealer license is required to establish a place of business to be used principally for the servicing or display of motor vehicles.  Under current law, applicants are required to establish a place of business to be used principally for both the servicing and display of motor vehicles.

     The bill permits each applicant for a new motor vehicle dealer license (applicant) to utilize space attached to the applicant’s established place of business, a separate space on the same property as the established place of business, or to establish an off-site facility within the relevant market area of the applicant’s established place of business for the servicing of motor vehicles.       Additionally, under the bill, the Chief Administrator of the New Jersey Motor Vehicle Commission (chief administrator) is permitted to issue a provisional new motor vehicle dealer license upon the applicant’s substantial completion of the application and is not to withhold the provisional license pending the receipt of a franchise agreement or the installation of a permanent sign that has been ordered, nor charge an additional fee for the provisional license.  The provisional license is to be valid for a period of 90 days, which period may be extended by an additional 90 days at the discretion of the chief administrator.       The bill amends current law to change the definition of “new motor vehicle dealer” to mean, in part, an authorized dealer of a motor vehicle franchisor of a new motor vehicle who has an established place of business.  Under current law, the term means, in part, the agent, distributor, or authorized dealer of the manufacturer of the new motor vehicle who has an established place of business.  The bill also amends current law to include a definition of “motor vehicle franchisor.”      Finally, the provisions of the bill are to take effect immediately and are to apply to all initial and renewal new motor vehicle dealer license applications and to all initial and renewal new motor vehicle dealer license applications that are currently subject to a pending administrative proceeding before the chief administrator or the Office of Administrative Law or on appeal thereof.