Michigan State Senate Passes Bill Regulating Auxiliary Repair Shop Facilities

The Michigan State Senate passed Senate Bill (SB) 867 on a 38-0 vote last week. It now awaits consideration in the State House.

State Senator John Cherry (D) originally introduced SB 867 earlier this year for the primary purpose of making it easier for auto repairers to operate auxiliary facilities. Under current law, repair shops that operate a secondary facility whose operations is dependent on the primary facility must register the two facilities separately. As a consequence, the repair business must pay redundant registration fees, display duplicative signage, and meet other unnecessary obligations. SB 867 would make it possible for repairers to register both facilities under a single registration number, which would help eliminate many avoidable administrative headaches.

The version of SB 867 passed by the state senate differs from the version introduced in substantive ways, including:

• New repair facility registration applications must include verification from a municipal governing body or zoning authority that the facility meets municipal and zoning requirements.
• Registration reports are required to list all owners with at least a 25% stake in the business. Currently, that threshold is 10%.
• Currently, shops don’t have to provide proof of their revenue for the purpose of determining their registration fee. Under this amended bill, proof of revenue is required for shops with less than $300,000 in gross revenue.
• The new version clarifies that a shop is only allowed to operate one auxiliary facility.
• The state may deny an auxiliary facility application if written verification from the municipality or applicable zoning authority that the auxiliary meets zoning requirements isn’t provided. It may also deny the application if the main facility has two or more unresolved customer parts retention violations, two or more unresolved records maintenance violations, OR an unresolved violation for hindering or obstructing a general compliance inspection or a consumer complaint inspection.
• The original bill version stated that the auxiliary had to be located within a “reasonable proximity” of the main facility. The amended version specifies that it must be within a 1-mile radius.
• The amended version adds a new requirement that the auxiliary facility’s hours of operation, types of vehicles serviced, and repairs performed mirror those of the main facility.
• The originally submitted bill would allow a facility to renew its registration for up to 4 years at a time. The amended version only allows facilities with over $300,000 in gross revenue to register for more than one year at a time.
• The amended version increases the annual mechanic certification exam fee from $6 to $18. Of every $18 collected, the state will take $12 and place it in a newly created mechanic certification examination fund. This is the first time this time the fee has changed in 40 years.
• The mechanic certification examination fund created in this amended version can only be used to develop and update the content of the mechanic certification exam or to administer the exam.