LEGISLATIVE FISCAL ESTIMATE

[First Reprint]

ASSEMBLY, No. 5854

STATE OF NEW JERSEY

221st LEGISLATURE

 

DATED: JULY 3, 2025

 

 

SUMMARY

 

Synopsis:

Allows certain motor vehicle franchisors to sell, lease, or assign vehicles to employees.

Type of Impact:

Increase in annual State expenditures and revenues. 

Agencies Affected:

New Jersey Motor Vehicle Commission. 

 

 

Office of Legislative Services Estimate

Fiscal Impact

Annual

 

State Expenditure Increase

Indeterminate

 

State Revenue Increase

Indeterminate

 

 

 

 

·       The Office of Legislative Services (OLS) anticipates that this bill will result in an indeterminate increase in State expenditures for the New Jersey Motor Vehicle Commission associated with the establishment of a new licensing category, designated with the letter “M”, for motor vehicle franchisors.  The OLS estimates that there will be annual revenue increases of indeterminate magnitude associated with the collection of license application and renewal fees. 

·       The commission will experience expenditure increases to upgrade the computer system to create a new license designation and to create a database to store motor vehicle franchisor employee information as outlined in the bill.  The OLS anticipates that the commission will experience additional administrative expenditures to monitor and maintain the database. 

·       The OLS is unable to quantify the annual revenue increases because it is unknown how many new licenses will be issued; however, the bill limits the number of “M” designations for each franchisor to 50 for promotional, testing, marketing or product familiarity purposes. The application fee for a new license is $200, and each license designation issued will have to be renewed every two years for a fee of $200. 

 

BILL DESCRIPTION

 

      This bill authorizes the commission to issue a license designated with the letter “M” to a motor vehicle franchisor who operates a primary place of business in the State and who is authorized to sell, lease, or assign a vehicle to its employees or to employees of its affiliate or subsidiary. 

      The license allows motor vehicle franchisors to sell, lease, assign, title, register, lend for use and operation, service, and maintain motor vehicles owned or controlled by the motor vehicle franchisor to its employees, or provided to individuals or entities for promotional, testing, marketing or product familiarity purposes.  The bill requires each sale or lease to an employee to be accompanied by proof of employment with the motor vehicle franchisor and such proof of employment is to be kept on file for four years.  The license does not authorize the retail sale of motor vehicle to the general public. 

      Additionally, the bill provides that all motor vehicles sold or leased to a motor vehicle franchisor’s employees or provided to individuals or entities for promotional, testing, marketing, or product familiarity purposes not to exceed an aggregate total of 50, are eligible to receive a regular license plate and authorizes a motor vehicle franchisor to use such license plates in the operation of the franchisor’s business and are to be authorized to use the manufacturer’s license plates in the operation of its business.  The bill provides that a motor vehicle franchisor who does not engage in the business of buying, selling, or dealing in motor vehicles in New Jersey is not required to maintain a place of business with floor space available for servicing or displaying motor vehicles or have an exterior sign.

 

FISCAL ANALYSIS

 

EXECUTIVE BRANCH

 

      None received. 

 

OFFICE OF LEGISLATIVE SERVICES

 

      The OLS anticipates that this bill will result in an indeterminate increase in State expenditures for the New Jersey Motor Vehicle Commission associated with the establishment of a new licensing category, designated with the letter “M”, for motor vehicle franchisors.  The OLS estimates that there will be annual revenue increases of indeterminate magnitude associated with the collection of license application and renewal fees. 

      The commission will experience expenditure increases to upgrade the computer system to create a new license designation and to create a database to store motor vehicle franchisor employee information as outlined in the bill.  The OLS anticipates that the commission will experience additional administrative expenditures to monitor and maintain the database. 

      The OLS is unable to quantify the annual revenue increases because it is unknown how many new licenses will be issued; however, the bill limits the number of “M” designations for each franchisor to 50 for promotional, testing, marketing or product familiarity purposes. The application fee for a new license is $200, and each license designation issued will have to be renewed every two years for a fee of $200. 

 

Section:

Authorities, Utilities, Transportation and Communications

Analyst:

Michael D. Walker

Associate Fiscal Analyst

Approved:

Thomas Koenig

Legislative Budget and Finance Officer

 

This legislative fiscal estimate has been produced by the Office of Legislative Services due to the failure of the Executive Branch to respond to our request for a fiscal note.

 

This fiscal estimate has been prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).