ASSEMBLY BUDGET COMMITTEE

STATEMENT TO

ASSEMBLY, No. 5854

with committee amendments

STATE OF NEW JERSEY

DATED:  JUNE 26, 2025

      The Assembly Budget Committee reports favorably and with committee amendments Assembly Bill No. 5854.

      As amended and reported, this bill authorizes the Chief Administrator of the New Jersey Motor Vehicle Commission to issue a motor vehicle dealer license designated with the letter “M” (license) 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 to be kept on file for four years.  The license does not authorize the retail sale of motor vehicles 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.  The bill authorizes a motor vehicle franchisor to use such license plates as well as the manufacturer’s license plates in the operation of the franchisor’s business.

      The bill provides that leasing dealers and motor vehicle franchisors who are not engaged in the business of buying, selling, or dealing in motor vehicles in New Jersey are not required to maintain a place of business with floor space available for servicing or displaying motor vehicles or to have an exterior sign at the lessor’s or motor vehicle franchisor’s place of business.

COMMITTEE AMENDMENTS:

      The committee amended the bill to revise the definition of “new motor vehicle dealer” to remove reference to agent and distributor and to clarify that a new motor vehicle dealer is an authorized dealer of a motor vehicle franchisor, rather than an authorized dealer of a manufacturer.

FISCAL IMPACT:

      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.”