Massachusetts 2025-2026 Regular Session

Massachusetts Senate Bill S201 Compare Versions

Only one version of the bill is available at this time.

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1	1	1 of 1
2	2	SENATE DOCKET, NO. 1295 FILED ON: 1/16/2025
3	3	SENATE . . . . . . . . . . . . . . No. 201
4	4	The Commonwealth of Massachusetts
5	5	_________________
6	6	PRESENTED BY:
7	7	Brendan P. Crighton
8	8	_________________
9	9	To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
10	10	Court assembled:
11	11	The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:
12	12	An Act further regulating business practices between motor vehicle dealers, manufacturers, and
13	13	distributors.
14	14	_______________
15	15	PETITION OF:
16	16	NAME:DISTRICT/ADDRESS :Brendan P. CrightonThird Essex 1 of 10
17	17	SENATE DOCKET, NO. 1295 FILED ON: 1/16/2025
18	18	SENATE . . . . . . . . . . . . . . No. 201
19	19	By Mr. Crighton, a petition (accompanied by bill, Senate, No. 201) of Brendan P. Crighton for
20	20	legislation to further regulate business practices between motor vehicle dealers, manufacturers,
21	21	and distributors. Consumer Protection and Professional Licensure.
22	22	[SIMILAR MATTER FILED IN PREVIOUS SESSION
23	23	SEE SENATE, NO. 151 OF 2023-2024.]
24	24	The Commonwealth of Massachusetts
25	25	_______________
26	26	In the One Hundred and Ninety-Fourth General Court
27	27	(2025-2026)
28	28	_______________
29	29	An Act further regulating business practices between motor vehicle dealers, manufacturers, and
30	30	distributors.
31	31	Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority
32	32	of the same, as follows:
33	33	1 SECTION 1. Subsection (c) of said section 4 of said chapter 93B, as appearing in the
34	34	22022 Official Edition, is hereby amended by inserting after paragraph (12) the following six
35	35	3paragraphs:-
36	36	4 (13) to require, coerce, or attempt to coerce any dealer by program, policy, standard, or
37	37	5otherwise to: (a) change location of the dealership; (b) construct, renovate, or make any
38	38	6substantial changes, alterations, or remodeling to a dealer’s sales or services facilities; or (c) add
39	39	7to or replace a dealer’s sales or services facilities; provided, however, that nothing herein shall
40	40	8prohibit a manufacturer or distributor from continuing a facility improvement program that is in
41	41	9effect as of the effective date of this paragraph with more than one dealer in the commonwealth 2 of 10
42	42	10or to renewing or modifying such program, or providing lump sum or regularly-scheduled
43	43	11payments to assist a dealer in making a facility improvement, including construction, alteration
44	44	12or remodeling, or installing signage or an image element of the manufacturer or distributor;
45	45	13provided further, that the provisions of the facility improvement program in which such dealer
46	46	14participates be contained in a written agreement voluntarily entered into by the dealer and must
47	47	15be made available, on substantially similar terms, to any of the manufacturer’s or distributor’s
48	48	16other same line-make dealers in the commonwealth with whom the manufacturer or distributor
49	49	17offers to enter into such an agreement; provided further, that, except as necessary to comply with
50	50	18a health or safety law or to comply with a technology requirement which is necessary to sell or
51	51	19service a motor vehicle that the motor vehicle dealer is authorized or licensed by the
52	52	20manufacturer or distributor to sell or service, a manufacturer, distributor, or franchisor
53	53	21representative shall not require, coerce, or attempt to coerce a motor vehicle dealer, by program,
54	54	22policy, facility guide, standard or otherwise, to change the location of the dealership, replace, or
55	55	23construct a new dealer facility or substantially alter or remodel an existing dealer facility before
56	56	24the date that is ten years after the date the construction of the new dealer facility or substantial
57	57	25alteration or remodeling at that location was completed regardless of whether a successor dealer
58	58	26has been appointed; provided further, that such construction, alteration or remodeling
59	59	27substantially complied with the manufacturer’s or distributor’s brand image standards or plans
60	60	28that the manufacturer or distributor provided at the time the construction, alteration, or
61	61	29remodeling was completed.
62	62	30 (14) to require a dealer to provide to the franchisor representative, manufacturer or
63	63	31distributor its customer lists, service files, or information about a retail customer unless
64	64	32necessary: (a) for the sale and delivery of a new motor vehicle to a retail buyer; (b) to validate 3 of 10
65	65	33and pay customer or dealer incentives; (c) for reasonable marketing purposes; (d) for warranty
66	66	34reimbursement substantiation under this chapter; or (e) to enable the manufacturer to fulfill
67	67	35safety, recall, or other legal obligations imposed by state or federal law. A manufacturer or
68	68	36distributor shall not share, sell, or transfer to other dealers or third parties customer information
69	69	37obtained from a dealer and not otherwise publicly available unless otherwise agreed to by the
70	70	38originating dealer or unless the franchise has been terminated. Notwithstanding any consent,
71	71	39authorization, release, franchise agreement or other agreement or contract, a manufacturer or
72	72	40distributor, or any third party acting on behalf or through a manufacturer or distributor, having
73	73	41electronic access to consumer or customer data or other information in a computer system
74	74	42utilized by a dealer, or who has otherwise been provided consumer or customer data or
75	75	43information by the dealer, shall fully indemnify and hold harmless the dealer from whom it has
76	76	44acquired the consumer or customer data or other information from all claims, demands, damages,
77	77	45liabilities, costs, and expenses incurred by the dealer, arising out of any alleged or actual data
78	78	46security breaches or other unlawful use of said customer or consumer data or other information
79	79	47by said manufacturer, distributor or third party acting on behalf of same, including, but not
80	80	48limited to, judgments, settlements, fines, penalties, expenses related to the disclosure of security
81	81	49breaches to customers and consumers, and attorneys’ fees and expenses arising out of
82	82	50complaints, claims, demands, security breaches, civil or administrative actions, and, to the fullest
83	83	51extent allowable under the law, attorneys’ fees and expenses arising from governmental
84	84	52investigations and prosecutions relating to the access, storage, maintenance, use, sharing,
85	85	53disclosure, or retention of the dealer’s consumer or customer data or other information, or
86	86	54maintenance or services provided to any computer system utilized by the dealer, by the 4 of 10
87	87	55manufacturer, distributor or third party acting on behalf of or through the manufacturer or
88	88	56distributor.
89	89	57 (15) to arbitrarily or unreasonably alter the geographic area of responsibility within which
90	90	58it measures the dealer’s performance. A manufacturer or distributor shall give advance notice of
91	91	59any proposed alteration of a dealer’s so-called area of responsibility at least 60 days before the
92	92	60effective date of a proposed alteration. Notice shall include an explanation of the basis for the
93	93	61change, and, upon request by such motor vehicle dealer within 30 days of the manufacturer’s or
94	94	62distributor’s notice, the manufacturer or distributor immediately shall provide sufficient
95	95	63supporting documentation. At any time prior to the effective date of such alteration, and after
96	96	64completion of any internal appeal process provided by a manufacturer or distributor, a dealer
97	97	65may protest the proposed alteration pursuant to section 15. Filing of a protest shall mean no
98	98	66alteration is effective until an agreement is reached by the parties or a court makes a final
99	99	67determination. The court may affirm, deny, or modify the proposed alteration of the dealer’s area
100	100	68of responsibility, may enter any other orders necessary to ensure that an alteration of the dealer’s
101	101	69area of responsibility is reasonable in light of all the relevant circumstances, and may assess the
102	102	70attorneys’ fees and expenses among the parties to the protest as appropriate. A manufacturer or
103	103	71distributor shall not take any adverse action against a dealer as a result of a change to the dealer’s
104	104	72area of responsibility for at least 18 months after the effective date of the change.
105	105	73 (16) to require a dealer to purchase goods or services from a vendor selected, identified,
106	106	74or designated by a manufacturer or distributor by agreement, program, incentive provision, or
107	107	75otherwise in connection with a dealer expanding, constructing, or significantly modifying its
108	108	76dealership facility without allowing the dealer the option to obtain a good or service of
109	109	77substantially similar quality from a vendor chosen by the dealer and approved by the 5 of 10
110	110	78manufacturer, which approval may not be unreasonably withheld. For purposes of this
111	111	79subdivision, the term "goods" does not include moveable displays, brochures, and promotional
112	112	80materials containing material subject to intellectual property rights of, or parts to be used in
113	113	81repairs under warranty obligations of, a manufacturer or a distributor, or special tools and
114	114	82training as required by the manufacturer or distributor. Nothing under this paragraph shall be
115	115	83construed to (i) allow a dealer or vendor to eliminate or impair a manufacturer’s or distributor’s
116	116	84intellectual property rights, including trademarks, or (ii) permit a dealer to erect or maintain signs
117	117	85that do not conform to the intellectual property usage guidelines of the manufacturer.
118	118	86 (17) to offer, directly or indirectly, vehicles for lease or subscription in the
119	119	87commonwealth of the same line make as any of the vehicles manufactured, assembled or
120	120	88distributed by the manufacturer, distributor or franchise representative in the commonwealth and
121	121	89sold or leased in the commonwealth by a dealer affiliated with such manufacturer, distributor or
122	122	90franchisor representative, unless such lease or subscription is offered through, or in partnership
123	123	91with, a dealer of the same line make affiliated with said manufacturer, distributor or franchisor
124	124	92representative. For purposes of this paragraph, “subscription” means a contract or arrangement
125	125	93whereby a person, for a recurring fee, secures the exclusive use of a specific vehicle of the same
126	126	94line make for a term exceeding thirty days. This paragraph shall not apply to a rental company or
127	127	95rental agreement regulated pursuant to Section 32E ½ of chapter 90 of the General Laws.
128	128	96 (18) to require, attempt to require, coerce, or attempt to coerce a motor vehicle dealer to
129	129	97sell exclusively an extended service contract, extended maintenance plan or similar products,
130	130	98including, but not limited to, guaranteed automobile protection or guaranteed asset protection
131	131	99products, offered, endorsed or sponsored by the motor vehicle manufacturer, distributor or
132	132	100franchisor representative by any of the following means: (i) a statement made by the motor 6 of 10
133	133	101vehicle manufacturer, distributor or franchisor representative that failure to sell exclusively an
134	134	102extended service contract, extended maintenance plan or similar products will substantially and
135	135	103adversely impact the dealer; (ii) a provision in a franchise agreement that the dealer sell
136	136	104exclusively an extended service contract, extended maintenance plan or similar product offered,
137	137	105endorsed or sponsored by the motor vehicle manufacturer, distributor or franchisor
138	138	106representative; (iii) measuring the dealer’s performance under the franchise based on the sale of
139	139	107extended service contracts, extended maintenance plans or similar products offered, endorsed or
140	140	108sponsored by the motor vehicle manufacturer, distributor or franchisor representative; or (iv)
141	141	109requiring the dealer to exclusively promote the sale of extended service contracts, extended
142	142	110maintenance plans or similar products offered, endorsed or sponsored by the motor vehicle
143	143	111manufacturer, distributor or franchisor representative; provided, however, that nothing in this
144	144	112paragraph shall prohibit a motor vehicle manufacturer, distributor or franchisor representative
145	145	113from providing incentives to a dealer that encourages a voluntary decision to sell exclusively an
146	146	114extended service contract, extended maintenance plan or similar product, including, but not
147	147	115limited to, guaranteed automobile protection or guaranteed asset protection products offered,
148	148	116endorsed or sponsored by the manufacturer, distributor or franchisor; provided, further, that
149	149	117nothing in this paragraph shall require or prohibit a motor vehicle manufacturer, distributor, or
150	150	118franchisor representative from enforcing a requirement that a dealer provide the following notice
151	151	119prior to the sale of the service contract if the service contract is not provided or backed by the
152	152	120motor vehicle manufacturer and the vehicle is of the franchised line-make: “The service contract
153	153	121you are purchasing is not provided or backed by the manufacturer of the vehicle you are
154	154	122purchasing. The manufacturer of this vehicle is not responsible for claims or repairs under this
155	155	123service contract.” 7 of 10
156	156	124 SECTION 2. Subsection (b) of section 9 of said chapter 93B, as so appearing, is hereby
157	157	125amended by striking paragraph (3) and inserting in place thereof the following:-
158	158	126 (3) A manufacturer or distributor shall compensate a dealer for labor, including diagnoses
159	159	127and reasonable administrative and clerical costs, provided in performing warranty work in an
160	160	128amount equal to the dealer's labor rate multiplied by the applicable time allowance prescribed in
161	161	129the time guide, at the dealer’s election, either (a) predominantly used by the dealer for labor
162	162	130furnished for repairs other than warranty work, or (b) used by the manufacturer or distributor for
163	163	131labor furnished for warranty work, multiplied by 1.5. The time allowances in such time guide
164	164	132used by the manufacturer or distributor shall be reasonable and adequate for warranty work to be
165	165	133performed by a qualified dealer technician. If neither time guide contains an allowance for a
166	166	134repair, compensation for labor time shall be the actual time spent to complete the repair. As used
167	167	135in this paragraph, the following words shall have the following meanings: "Warranty" means and
168	168	136includes a new motor vehicle warranty, certified pre-owned warranty, or any other obligation of
169	169	137a franchisor to repair or replace defects in a motor vehicle or part, including initialization or
170	170	138updates, and obligations which are the subject of a technical service bulletin, a customer service
171	171	139campaign, and a recall conducted pursuant to Sections 30118 through 30120 of Title 49 of the
172	172	140United States Code. "Warranty work" means work, including, but not limited to, diagnostic
173	173	141labor, performed or arranged to be performed by a dealer (i) in fulfilling the obligations of a
174	174	142franchisor's warranty, (ii) which is required, requested, or approved by a franchisor, (iii) for
175	175	143which a franchisor has agreed to pay, or (iv) in fulfilling the transportation, delivery, and
176	176	144preparation obligations imposed on the dealer by a franchisor.
177	177	145 SECTION 3. Said subsection (b) of said section 9 of said chapter 93B, as so appearing, is
178	178	146hereby amended by inserting after paragraph (4) the following paragraph:- 8 of 10
179	179	147 (5)(i) A manufacturer or distributor shall not require, influence, or attempt to influence a
180	180	148motor vehicle dealer to implement or change the prices for which it sells parts or labor in retail
181	181	149customer repairs. A manufacturer or distributor shall not implement or continue a policy,
182	182	150procedure, or program with any of its dealers in this state for compensation under this section
183	183	151which is inconsistent with this section.
184	184	152 (ii) A manufacturer or distributor shall not, pursuant to a surcharge or other assessment
185	185	153stated on the vehicle invoice provided to the dealer or through such other charge or means,
186	186	154otherwise recover its costs for reimbursing a dealer for parts and labor pursuant to this section;
187	187	155provided, however, that a manufacturer or distributor shall not be prohibited from increasing
188	188	156prices for vehicles or parts in the normal course of business.
189	189	157 SECTION 4. Said section 9 of said chapter 93B, as so appearing, is hereby further
190	190	158amended by inserting after subsection (j) the following subsections (k) and (l):-
191	191	159 (k) (1) Notwithstanding any provision of a franchise agreement, it shall be a violation of
192	192	160this chapter for a manufacturer, distributor, or franchisor representative, when providing a new
193	193	161motor vehicle to a dealer for offer or sale to the public, to fail to provide to such dealer a written
194	194	162disclosure that may be provided to a potential buyer of the new motor vehicle of each accessory
195	195	163or function of the vehicle that may be initiated, updated, changed, or maintained by the
196	196	164manufacturer, distributor, or franchisor representative through over the air or remote means, and
197	197	165the charge to the customer at the time of sale for such initiation, update, change or maintenance;
198	198	166provided, however, that the manufacturer, distributor, or franchisor representative may comply
199	199	167with this subsection by notifying the dealer that any such information is available on a website or
200	200	168by other digital means. 9 of 10
201	201	169 (2) Notwithstanding any provision of a franchise agreement, it shall be a violation of this
202	202	170chapter for a manufacturer, distributor, or franchisor representative to fail to provide reasonable
203	203	171compensation to a dealer for assistance requested by a customer whose vehicle was subjected to
204	204	172an over the air or remote change, repair, or update to any part, system, accessory, or function by
205	205	173the manufacturer, distributor, or franchisor representative and performed at the dealer’s
206	206	174dealership in order to satisfy the customer.
207	207	175 (l) Notwithstanding any provision of a franchise agreement, it shall be a violation of this
208	208	176chapter for a manufacturer, distributor, or franchisor representative to charge back or otherwise
209	209	177hold liable a franchised motor vehicle dealer for sales incentives or charges, deny vehicle
210	210	178allocation, withhold payments or other things of value for which the dealer is eligible, or take or
211	211	179threaten to take any other adverse action against the dealer, in connection with or as a result of
212	212	180any new motor vehicle sold by the dealer and subsequently exported from the United States;
213	213	181provided, however, that such dealer can demonstrate that after exercising due diligence and
214	214	182acting in good faith such dealer did not know nor reasonably should have known of the
215	215	183purchaser’s intention to export the motor vehicle. A franchised motor vehicle dealer which
216	216	184causes a new motor vehicle to be registered in the commonwealth or in a foreign state and causes
217	217	185to be collected the appropriate sales and use tax, or that reasonably relied on a franchisor to
218	218	186complete a sale shall be presumed to have exercised due diligence and acted in good faith. Prior
219	219	187to taking an adverse action against a dealer, including, but not limited to, a chargeback, as a
220	220	188result of an export, a manufacturer or distributor shall provide written notice to the franchised
221	221	189motor vehicle dealer of the adverse action, and, if a chargeback, the specific amount of the
222	222	190chargeback, and the vehicle or vehicles at issue. A dealer shall not be liable under this subsection
223	223	191for the delivery of any vehicle sold through a franchisor’s fleet program where the sale or lease 10 of 10
224	224	192was not initiated or negotiated by the dealer and dealer’s function was solely to provide delivery
225	225	193on behalf of the manufacturer or distributor.