PAYMENT FOR USED TIRES S.B. 331:
ANALYSIS AS REPORTED FROM COMMITTEE
Senate Bill 331 (as reported without amendment)
RATIONALE
Reportedly, Michigan has a large problem with the theft of car tires. This includes tires stolen from private vehicles, rental vehicles, and vehicles located at dealerships. To address this issue, it has been suggested that Public Act 119 of 1986, which regulates the business of buying or receiving used motor vehicle parts, should limit the acceptable forms of payment by those who purchase used tires, in order to improve record-keeping procedures.
CONTENT
The bill would amend Public Act 119 of 1986 to allow a dealer to purchase used motor vehicle tires, tire wheels or rims, or continuous tread from a customer only with specific methods of payment.
The Act imposes certain record-keeping requirements on a dealer that buys or receives used motor vehicle parts from a customer. A "used motor vehicle part" is any major component part, dashboard, stereo, radio, or seat of a late model motor vehicle for which a certificate of title and registration plate have been issued to a consumer or dealer. The bill would include a motor vehicle tire, tire wheel or rim, or continuous tire tread in the definition of "used motor vehicle part", and exclude a motor vehicle tire, tire wheel or rim, or continuous tire tread from the definition of "major component part".
Under the bill, in a transaction concerning the purchase or receipt of any used motor vehicle tires, tire wheels or rims, or continuous tire tread, the only methods a dealer could use to pay a customer would be a check, money order, bank draft, or direct deposit or electronic transfer to the customer's account at a financial institution.
Currently, when documenting a transaction concerning the purchase or receipt of any used motor vehicle part from a person other than a licensee under the Michigan Vehicle Code, a dealer must record the form of payment and indicate the number of the check, money order, or bank draft used to pay the customer. The bill would require that the dealer also indicate the transaction number of any direct deposit or electronic transfer to the customer's account at a financial institution.
Currently, a dealer that knowingly violates certain requirements of the Act is guilty of a misdemeanor, punishable by imprisonment for up to one year, a maximum fine of $1,000, or both. A second or subsequent violation is a felony, punishable by up to two years' imprisonment, a maximum fine of $5,000, or both. The bill would extend these penalties to a dealer that knowingly violated the provision limiting the methods of payment for used tires, tire wheels or rims, or continuous tire tread.
The bill would take effect 90 days after it was enacted.
ARGUMENTS
(Please note: The arguments contained in this analysis originate from sources outside the Senate Fiscal Agency. The Senate Fiscal Agency neither supports nor opposes legislation.)
Supporting Argument
Tires are an easy target for criminals because they are difficult to secure, have high resale value, and have no distinguishable markings, and buyers are easy to find. The conditions of the roads in Michigan keep tire demand high. According to Help Eliminate Auto Thefts (H.E.A.T.), an organization that coordinates citizen action with law enforcement agencies through a confidential tip line for reporting information on stolen vehicles and other automotive crimes, while the overall number of vehicle thefts has decreased over time, tire theft is still very prevalent. The organization also states that the Detroit Police Department has reported 1,664 cases of larceny of motor vehicle accessories during the 2015 year, and that an estimated 70% of those cases involved tires.
Furthermore, vehicle rental agencies report many instances of tire theft. According to Committee testimony by H.E.A.T., one rental company has tracked 700 cases of vehicles stolen and subsequently recovered without their tires since 2013. Enterprise Holdings, a large car rental company, also reports that its Detroit company had almost $1.2 million in damage caused by tire theft in more than 300 incidents during the company's 2014 fiscal year. The experience of individuals who rent a car and have its tires stolen is an undesirable situation for the Detroit region and the rest of Michigan.
The proposed requirements regarding payment methods for used tires would lead to better record-keeping of used tire sales, which would enable police to track criminals more effectively.
Legislative Analyst: Drew Krogulecki
FISCAL IMPACT
The bill would expand the regulations applicable to used motor vehicle part transactions involving used motor vehicle tires, tire wheels or rims, and continuous tire tread, and could increase the felonies and misdemeanors associated with violations of these regulations. There are no data to indicate how many additional offenders would be convicted of violating the Act (or indirectly, how many would be convicted of selling stolen vehicle parts), but to the extent that additional convictions occurred, costs of incarceration and community supervision would increase accordingly. Penal fine revenue would benefit public libraries.
This analysis was prepared by nonpartisan Senate staff for use by the Senate in its deliberations and does not constitute an official statement of legislative intent.