Statement from Michigan Gov. Rick Snyder Offers Details of House Bill 5606

Gov. Rick Snyder today signed bipartisan legislation thatclarifies and strengthens an existing law about direct auto sales in Michigan.House Bill 5606, sponsored by state Rep. Aric Nesbitt, also prohibits automanufacturers from dictating fees franchised dealers can charge customers. Thelegislation allows individual auto dealers to make the business decisionwhether to charge the transaction fee.The bill was approved by 38-0 in the state Senate, and 106-1 in the state Houseof Representatives.Snyder said Tuesday there has been a misunderstanding about the legislation.“This bill does not, as some have claimed, prevent auto manufacturers fromselling automobiles directly to consumers at retail in Michigan – because thisis already prohibited under Michigan law,” Snyder said in a letter to lawmakersthat accompanies the signed bill.Language in the bill states plainly that a manufacturer can only sell newvehicles to consumers through its own network of franchised dealers. HB 5606deletes the word “its” from a sentence in existing law.This change would merely allow manufacturers who do not have their ownfranchised dealers to sell through another manufacturer's network of franchiseddealers. They will be required, just as they are now, to sell through afranchised dealer, and not directly to consumers. HB 5606 does nothing tochange this fact. At most, it clarifies the existing requirement in Michiganlaw.Snyder requested Attorney General Bill Schuette analyze the effect of the bill,and the Attorney General's Office also concluded that auto manufacturers couldsell only through franchised dealers, as is the case in existing law.Snyder said lawmakers can and should discuss the current business model soon todetermine if it is best for the state's consumers.“We should always be willing to re-examine our business and regulatorypractices with an eye toward improving the customer experience for our citizensand doing things in a more efficient and less costly fashion,” he said.The bill is now Public Act 354 of 2014.The governor also signed HB 5273, sponsored by state Rep. Nancy Jenkins whichconnects small businesses with funding opportunities by creating MichiganInvestment Markets, which operate as intrastate broker-dealers. The lawconnects Michigan businesses and residents, allowing for stock in localbusinesses to be bought, sold and traded.The legislation is an extension of the crowdfunding measure enacted in 2013,allowing companies to use crowdfunding to raise money for their business. It isnow PA 355.For more information, visit legislature.michigan.gov.