As Introduced

131st General Assembly

Regular Session S. B. No. 334

2015-2016

Senator Eklund

A BILL

To amend sections 4517.02, 4738.01, 4738.02, and 4738.99 of the Revised Code to amend the law regulating motor vehicle salvage dealers.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

Section 1. That sections 4517.02, 4738.01, 4738.02, and 4738.99 of the Revised Code be amended to read as follows:

Sec. 4517.02. (A) Except as otherwise provided in this section, no person shall do any of the following:

(1) Engage in the business of displaying or selling at retail new motor vehicles or assume to engage in that business, unless the person is licensed as a new motor vehicle dealer under sections 4517.01 to 4517.45 of the Revised Code, or is a salesperson licensed under those sections and employed by a licensed new motor vehicle dealer;

(2) Engage in the business of offering for sale, displaying for sale, or selling at retail or wholesale used motor vehicles or assume to engage in that business, unless the person is licensed as a dealer under sections 4517.01 to 4517.45 of the Revised Code, is a salesperson licensed under those sections and employed by a licensed used motor vehicle dealer or licensed new motor vehicle dealer, or the person holds a construction equipment auction license issued under section 4517.17 of the Revised Code;

(3) Engage in the business of regularly making available, offering to make available, or arranging for another person to use a motor vehicle, in the manner described in division (M) of section 4517.01 of the Revised Code, unless the person is licensed as a motor vehicle leasing dealer under sections 4517.01 to 4517.45 of the Revised Code;

(4) Engage in the business of motor vehicle auctioning or assume to engage in that business, unless the person is licensed as a motor vehicle auction owner under sections 4517.01 to 4517.45 of the Revised Code and the person uses an auctioneer who is licensed under Chapter 4707. of the Revised Code to conduct the motor vehicle auctions or the person holds a construction equipment auction license issued under section 4517.17 of the Revised Code;

(5) Engage in the business of distributing motor vehicles or assume to engage in that business, unless the person is licensed as a distributor under sections 4517.01 to 4517.45 of the Revised Code;

(6) ~~Make~~ Knowingly make four or more ~~than five~~ casual sales of motor vehicles in a twelve-month period, commencing with the day of the month in which the first such sale is made, nor provide a location or space for the sale of motor vehicles at a flea market, without obtaining a license as a dealer under sections 4517.01 to 4517.45 of the Revised Code, provided that nothing in this section shall be construed to prohibit the disposition without a license of a motor vehicle originally acquired and held for purposes other than sale, rental, or lease to an employee, retiree, officer, or director of the person making the disposition, to a corporation affiliated with the person making the disposition, or to a person licensed under sections 4517.01 to 4517.45 of the Revised Code;

(7) Engage in the business of auctioning both large construction or transportation equipment and also motor vehicles incident thereto, unless the person is a construction equipment auctioneer or the person is licensed as a motor vehicle auction owner and the person uses an auctioneer who is licensed under Chapter 4707. of the Revised Code to conduct the auction.

(B) Nothing in this section shall be construed to require an auctioneer licensed under sections 4707.01 to 4707.19 of the Revised Code, to obtain a motor vehicle salesperson's license under sections 4517.01 to 4517.45 of the Revised Code when conducting an auction sale for a licensed motor vehicle dealer on the dealer's premises, or when conducting an auction sale for a licensed motor vehicle auction owner; nor shall such an auctioneer be required to obtain a motor vehicle auction owner's license under sections 4517.01 to 4517.45 of the Revised Code when engaged in auctioning for a licensed motor vehicle auction owner.

The establishment of a construction equipment auction license by Am. Sub. H.B. 114 of the 129th general assembly shall not in any way modify, limit, or restrict in any manner the conduct of auctions by persons licensed under Chapter 4707. of the Revised Code who are acting in compliance with that chapter.

(1) Persons engaging in the business of selling commercial tractors, trailers, or semitrailers incidentally to engaging primarily in business other than the selling or leasing of motor vehicles;

(2) Mortgagees selling at retail only those motor vehicles that have come into their possession by a default in the terms of a mortgage contract;

(3) The leasing, rental, and interchange of motor vehicles used directly in the rendition of a public utility service by regulated motor carriers.

(D) When a partnership licensed under sections 4517.01 to 4517.45 of the Revised Code is dissolved by death, the surviving partners may operate under the license for a period of sixty days, and the heirs or representatives of deceased persons and receivers or trustees in bankruptcy appointed by any competent authority may operate under the license of the person succeeded in possession by that heir, representative, receiver, or trustee in bankruptcy.

(E) No remanufacturer shall engage in the business of selling at retail any new motor vehicle without having written authority from the manufacturer or distributor of the vehicle to sell new motor vehicles and to perform repairs under the terms of the manufacturer's or distributor's new motor vehicle warranty, unless, at the time of the sale of the vehicle, each customer is furnished with a binding agreement ensuring that the customer has the right to have the vehicle serviced or repaired by a new motor vehicle dealer who is franchised to sell and service vehicles of the same line-make as the chassis of the remanufactured vehicle purchased by the customer and whose service or repair facility is located within either twenty miles of the remanufacturer's location and place of business or twenty miles of the customer's residence or place of business. If there is no such new motor vehicle dealer located within twenty miles of the remanufacturer's location and place of business or the customer's residence or place of business, the binding agreement furnished to the customer may be with the new motor vehicle dealer who is franchised to sell and service vehicles of the same line-make as the chassis of the remanufactured vehicle purchased by the customer and whose service or repair facility is located nearest to the remanufacturer's location and place of business or the customer's residence or place of business. Additionally, at the time of sale of any vehicle, each customer of the remanufacturer shall be furnished with a warranty issued by the remanufacturer for a term of at least one year.

(F)(1) Except as otherwise provided in this division, whoever violates this section is guilty of ~~a minor~~ an unclassified misdemeanor and shall be subject to a mandatory fine of one ~~hundred~~ thousand dollars. If the offender previously has been convicted of or pleaded guilty to a violation of this section, whoever violates this section is guilty of a ~~misdemeanor~~ felony of the ~~first~~ fifth degree and shall be subject to a mandatory fine of ~~one~~ two thousand dollars.

(2) For a violation of division (A)(6) of this section, the associated fine shall be the fine prescribed in division (F)(1) of this section multiplied by three less than the total number of vehicles sold.

Sec. 4738.01. As used in sections 4738.01 to 4738.16 of the Revised Code:

(A) "Motor vehicle salvage dealer" means any person who engages in business primarily for the purpose of selling salvage motor vehicle parts and secondarily for the purpose of selling at retail salvage motor vehicles or manufacturing or selling a product of gradable scrap metal.

(B) "Salvage motor vehicle" means any motor vehicle ~~which is in a wrecked, dismantled, or worn out condition, or~~ that has been determined to be unfit for operation as a motor vehicle, has been declared a total loss by an insurer or owner, has been wrecked, destroyed, or damaged by collision, flood, fire, water, or other occurrence to such an extent that the owner or, if the vehicle was insured, the insurer considers it uneconomical to repair.

(C) "Salvage motor vehicle auction" means any person who on the person's behalf or as an agent for a third party engages in business for the purpose of auctioning salvage motor vehicles.

(D) "Salvage motor vehicle pool" means any person who as an agent for a third party engages in business for the purpose of storing, displaying, and offering for sale salvage motor vehicles.

(E) "Engaging in business" means commencing, conducting, or continuing in business, or liquidating a business when the liquidator thereof holds the liquidator out to be conducting such business; making a casual sale or otherwise making transfers in the ordinary course of business when the transfers are made in connection with the disposition of all or substantially all of the transferor's assets is not engaging in business.

(F) "Retail sale" or "sale at retail" means the act or attempted act of selling, bartering, exchanging, or otherwise disposing of salvage motor vehicles or salvage motor vehicle parts to a person who purchases the salvage motor vehicle or salvage motor vehicle parts for use as a consumer.

(G) "Authorized purchaser" means a person who purchases a salvage motor vehicle from a salvage motor vehicle auction or salvage motor vehicle pool and who satisfies either of the following criteria:

(1) The person is a motor vehicle salvage dealer who is licensed pursuant to this chapter; a junk yard that is licensed pursuant to section 4737.07 of the Revised Code; a scrap metal processing facility that is licensed pursuant to section 4737.07 of the Revised Code; a used motor vehicle dealer who is licensed pursuant to section 4517.02 of the Revised Code; a salvage dismantler or automotive recycler; or a salvage dealer, junk yard, scrap metal processing facility, used motor vehicle dealer, salvage dismantler, or automotive recycler business authorized to purchase salvage motor vehicles by another state, country, or jurisdiction.

(2) The person does not satisfy the criteria described in division (G)(1) of this section but has purchased not more than a total of five salvage motor vehicles in the current calendar year from any salvage motor vehicle auction or salvage motor vehicle pool located in Ohio.

(H) "Business" includes any activities engaged in by any person for the object of gain, benefit, or advantage either direct or indirect.

(I) "Casual sale" means any transfer of a salvage motor vehicle by a person other than a motor vehicle salvage dealer, salvage motor vehicle auction, or salvage motor vehicle pool, to a person who purchases the salvage motor vehicle for use as a consumer.

Sec. 4738.02. (A) Except as provided in divisions (B) and (E) of this section, no person shall engage in the business of selling at retail salvage motor vehicle parts without first obtaining a motor vehicle salvage dealer's license pursuant to this chapter.

(B)(1) Except as provided in divisions (C) and (E) of this section, no person shall engage in the business of selling at retail salvage motor vehicles nor, other than as a lessor, provide a location or a space for the sale of salvage motor vehicles without first obtaining a motor vehicle salvage dealer's license, a salvage motor vehicle auction license, or a salvage motor vehicle pool license pursuant to this chapter.

(2) Notwithstanding division (B)(1) of this section, a person may sell salvage motor vehicles at retail to or through a salvage motor vehicle auction or salvage motor vehicle pool without obtaining any license pursuant to this chapter if both of the following apply:

(a) The acquisition of salvage motor vehicles is incidental to the primary business of the person.

(b) The disposal of those salvage motor vehicles is incidental to the primary business of the person.

(D) Except as provided in division (E) of this section, no person shall operate as a salvage motor vehicle auction or salvage motor vehicle pool without first obtaining the appropriate license pursuant to this chapter.

(E) In case of the dissolution of a partnership by death, the surviving partner may operate under any license obtained by the partnership pursuant to this chapter for a period of sixty days and the heirs or representatives of deceased persons and receivers or trustees in bankruptcy appointed by any competent authority may operate under the license of the person succeeded in possession by the heir, representative, receiver, or trustee in bankruptcy.

(F) Nothing in this chapter applies to any public officer performing his official duties.

Sec. 4738.99. (A) Whoever knowingly violates section 4738.02 or violates section 4738.03 of the Revised Code is guilty of a an unclassified misdemeanor ~~of the second degree~~ on a first offense and shall be subject to a mandatory fine of four hundred dollars; on each subsequent offense, such person is guilty of a ~~misdemeanor~~ felony of the ~~first~~ fifth degree.

(B) Whoever violates section 4738.01, sections 4738.04 to 4738.13, or division (B) of section 4738.16 of the Revised Code is guilty of a an unclassified misdemeanor ~~of the fourth degree~~and shall be subject to a mandatory fine of four hundred dollars.

Section 2. That existing sections 4517.02, 4738.01, 4738.02, and 4738.99 of the Revised Code are hereby repealed.