Budget Amendment ID: FY2019-S4-746.1

Further ECO 746.1

Motor Vehicle Service Contracts  - Fair Trade Practices

Ms. L'Italien, Mr. O'Connor and Ms. O'Connor Ives moved that the amendment be amended in section _____ by inserting after the definition for "motor vehicle distributor" the following 2 definitions:

“Motor vehicle franchisor representative”, a person employed by a motor vehicle manufacturer or distributor to promote the sale of new motor vehicles or for supervising, servicing, instructing or contracting motor vehicle dealers or prospective motor vehicle dealers and any officer, agent or other authorized representative of a manufacturer or distributor."

“Motor vehicle manufacturer”, a person who: (i) manufactures or produces motor vehicles under the person’s own name or label; (ii) is a subsidiary of the person who manufactures or produces motor vehicles; (iii) is a corporation which owns 100 per cent of the corporation, association, partnership or other legal entity who manufactures or produces motor vehicles; or (iv) does not manufacture or produce motor vehicles but, pursuant to a written contract, licenses the use of its trade name or label to another person who manufactures or produces motor vehicles."; and

By inserting the following section:

"SECTION ________Section 149U of said chapter 175, as so appearing, is hereby amended by adding the following subsection:-

(c) It shall be an unfair or deceptive act or practice for a motor vehicle manufacturer, distributor or franchisor representative to require, attempt to require, coerce or attempt to coerce a motor vehicle dealer to sell, offer to sell or sell exclusively an extended service contract, extended maintenance plan or similar products, including, but not limited to, guaranteed automobile protection or guaranteed asset protection products, offered, endorsed or sponsored by the motor vehicle manufacturer, distributor or franchisor representative by any of the following means: (i) a statement made by the motor vehicle manufacturer, distributor or franchisor representative that failure to sell, offer to sell or sell exclusively an extended service contract, extended maintenance plan or similar products will substantially and adversely impact the dealer; (ii) a provision in a franchise agreement that the dealer sell or sell exclusively an extended service contract, extended maintenance plan or similar product offered, endorsed or sponsored by the motor vehicle manufacturer, distributor or franchisor representative; (iii) measuring the dealer’s performance under the franchise based on the sale of extended service contracts, extended maintenance plans or similar products offered, endorsed or sponsored by the motor vehicle manufacturer, distributor or franchisor representative; or (iv) requiring the dealer to exclusively promote the sale of extended service contracts, extended maintenance plans or similar products offered, endorsed or sponsored by the motor vehicle manufacturer, distributor or franchisor representative.

Nothing in this subsection shall prohibit a motor vehicle manufacturer, distributor or franchisor representative from providing incentives to a dealer that encourages a voluntary decision to sell or sell exclusively an extended service contract, extended maintenance plan or similar product, including, but not limited to, guaranteed automobile protection or guaranteed asset protection products offered, endorsed or sponsored by the manufacturer, distributor or franchisor."