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SENATE DOCKET, NO. 1136 FILED ON: 1/18/2023
SENATE . . . . . . . . . . . . . . No. 639
The Commonwealth of Massachusetts
_________________
PRESENTED BY:
Paul R. Feeney
_________________
To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
Court assembled:
The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:
An Act relative to motor vehicle service contracts.
_______________
PETITION OF:
NAME:DISTRICT/ADDRESS :Paul R. FeeneyBristol and Norfolk 1 of 5
SENATE DOCKET, NO. 1136 FILED ON: 1/18/2023
SENATE . . . . . . . . . . . . . . No. 639
By Mr. Feeney, a petition (accompanied by bill, Senate, No. 639) of Paul R. Feeney for
legislation relative to motor vehicle service contracts. Financial Services.
[SIMILAR MATTER FILED IN PREVIOUS SESSION
SEE SENATE, NO. 657 OF 2021-2022.]
The Commonwealth of Massachusetts
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In the One Hundred and Ninety-Third General Court
(2023-2024)
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An Act relative to motor vehicle service contracts.
Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority
of the same, as follows:
1 SECTION 1. Section 149M of chapter 175 of the General Laws, as appearing in the 2012
2Official Edition, is hereby amended by inserting after the definition of “consumer” the following
35 definitions:-
4 “Consumer product”, any tangible personal property that is distributed in commerce and
5is normally used for personal, family or household purposes, including tangible personal
6property intended to be attached to or installed in any real property without regard to whether it
7is so attached or installed.
8 “Maintenance agreement”, a contract for regular maintenance.
9 “Motor vehicle distributor”, any person who is not a motor vehicle manufacturer or a
10motor vehicle dealer and who sells or distributes new and unused motor vehicles to motor 2 of 5
11vehicle dealers within the commonwealth or to a wholesaler who in turn sells or distributes such
12vehicles to motor vehicle dealers within the commonwealth; provided, however, that “motor
13vehicle distributor” shall include any branch office or division maintained by any corporation,
14association, partnership or other legal entity for directing and supervising their franchisor
15representatives.
16 “Motor vehicle franchisor representative”, a person employed by a motor vehicle
17manufacturer or distributor to promote the sale of new motor vehicles or for supervising,
18servicing, instructing or contracting motor vehicle dealers or prospective motor vehicle dealers
19and any officer, agent or other authorized representative of a manufacturer or distributor.
20 “Motor vehicle manufacturer”, a person who: (i) manufactures or produces motor
21vehicles under the person’s own name or label; (ii) is a subsidiary of the person who
22manufactures or produces motor vehicles; (iii) is a corporation which owns 100 per cent of the
23corporation, association, partnership or other legal entity who manufactures or produces motor
24vehicles; or (iv) does not manufacture or produce motor vehicles but, pursuant to a written
25contract, licenses the use of its trade name or label to another person who manufactures or
26produces motor vehicles.
27 SECTION 2. Said section 149M of said chapter 175, as so appearing, is hereby further
28amended by striking out the definition of “service contract” and inserting in place thereof the
29following definition:-
30 “Service contract”, a contract for a separately stated consideration and for a specific
31duration to perform the service, repair, replacement or maintenance of a consumer product,
32including a motor vehicle, or indemnification for service, repair, replacement or maintenance for 3 of 5
33the operational or structural failure due to a defect in materials or workmanship or normal wear
34and tear, with or without additional provision for incidental payment or indemnity under limited
35circumstances, for related expenses, including, but not limited to, rental and food spoilage;
36provided, however, that a service contract shall also include a contract or agreement sold for a
37separately stated consideration for a specific duration that provides for any of the following: (i)
38the repair or replacement of tires or wheels on a motor vehicle damaged as a result of coming
39into contact with road hazards including, but not limited to, potholes, rocks, wood debris, metal
40parts, glass, plastic, curbs or composite scraps; (ii) the removal of dents, dings or creases on a
41motor vehicle that can be repaired using the process of paintless dent removal without affecting
42the existing paint finish and without replacing vehicle body panels, sanding, bonding or painting;
43(iii) the repair of small motor vehicle windshield chips or cracks which may include the
44replacement of the windshield for chips or cracks that cannot be repaired; or (iv) the repair of
45damage to the interior components of a motor vehicle caused by wear and tear but which shall
46expressly exclude the replacement of any part or component of a motor vehicle’s interior.
47 SECTION 3. Section 149N of said chapter 175, as so appearing, is hereby amended by
48striking out, in line 100, the words “tangible personal property” and inserting in place thereof the
49following words:- consumer products.
50 SECTION 4. Section 149U of said chapter 175, as so appearing, is hereby amended by
51adding the following subsection:-
52 (c) It shall be an unfair or deceptive act or practice for a motor vehicle manufacturer,
53distributor or franchisor representative to require, attempt to require, coerce or attempt to coerce
54a motor vehicle dealer to sell, offer to sell or sell exclusively an extended service contract, 4 of 5
55extended maintenance plan or similar products, including, but not limited to, guaranteed
56automobile protection or guaranteed asset protection products, offered, endorsed or sponsored by
57the motor vehicle manufacturer, distributor or franchisor representative by any of the following
58means: (i) a statement made by the motor vehicle manufacturer, distributor or franchisor
59representative that failure to sell, offer to sell or sell exclusively an extended service contract,
60extended maintenance plan or similar products will substantially and adversely impact the dealer;
61(ii) a provision in a franchise agreement that the dealer sell or sell exclusively an extended
62service contract, extended maintenance plan or similar product offered, endorsed or sponsored by
63the motor vehicle manufacturer, distributor or franchisor representative; (iii) measuring the
64dealer’s performance under the franchise based on the sale of extended service contracts,
65extended maintenance plans or similar products offered, endorsed or sponsored by the motor
66vehicle manufacturer, distributor or franchisor representative; or (iv) requiring the dealer to
67exclusively promote the sale of extended service contracts, extended maintenance plans or
68similar products offered, endorsed or sponsored by the motor vehicle manufacturer, distributor or
69franchisor representative.
70 Nothing in this subsection shall prohibit a motor vehicle manufacturer, distributor or
71franchisor representative from providing incentives to a dealer that encourages a voluntary
72decision to sell or sell exclusively an extended service contract, extended maintenance plan or
73similar product, including, but not limited to, guaranteed automobile protection or guaranteed
74asset protection products offered, endorsed or sponsored by the manufacturer, distributor or
75franchisor.
76 SECTION 5. Said chapter 175 is hereby amended by striking out section 149V, as so
77appearing, and inserting in place thereof the following section:- 5 of 5
78 Section 149V. (a) The following shall be exempt from sections 149M to 149W, inclusive:
79(i) warranties, service contracts or maintenance agreements provided by public utilities that are
80regulated by the department of telecommunications and cable or the Federal Communications
81Commission, or by an affiliate of such entity, covering customer wiring, transmission devices
82serviced by such public utility or warranting services provided by such public utility or its
83affiliate; (ii) mechanical breakdown insurance policies offered by insurers otherwise licensed and
84regulated pursuant to the laws and regulations of the commonwealth; (iii) warranties, service
85contracts or other agreements regarding automobiles under which a licensed motor vehicle dealer
86is obligated to perform; (iv) warranties offered by builders as part of a conveyance of real estate;
87(v) warranties on a product made by the manufacturer, importer or seller of the product; and (vi)
88maintenance agreements.
89 (b) Motor vehicle manufacturer’s service contracts on the motor vehicle manufacturer’s
90products shall comply with sections 149M to 149W, inclusive, as applicable to be determined by
91the commissioner of insurance; provided, however, that motor vehicle manufacturer’s service
92contracts on the motor vehicle manufacturer’s products shall be exempt from licensure
93requirements under subsection (d) of section 149N.