An Act to Amend the Motor Vehicle Franchise Laws
Maine Legislature, Session 121, LD 0075
Committee: Business and Economic Development
Sponsors: RINES, BERRY, GERZOFSKY, PERRY, RICHARDSON, HALL
Amends: 10 MRSA §1176

12lst MAINE LEGISLATURE 
Legislative Document 
No. 75 
H.P.83 
House of Representatives, January 16,2003 
An Act to Amend the Motor Vehicle Franchise Laws 
Reference to the Committee on Business and Economic Development suggested and 
ordered printed. 
Presented by Representative RINES of Wiscasset. 
'77/~/J7.~ 
MILLICENT M. MacFARLAND 
Clerk 
Cosponsored by Representatives: BERRY of Belmont, GERZOFSKY of Brunswick, PERRY 
of Bangor, RICHARDSON of Brunswick, Senator: HALL of Lincoln. 
Printed on recycled paper 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 10 MRSA §1176, as amended by PL 1997, c. 521, §25, is 
repealed and the following enacted in its place: 
§1176. 
Warranty 
1. 
Warranty reimbursement. 
If a motor vehicle franchisor 
requires or permits a motor vehicle franchisee to perform labor 
or provide parts in satisfaction of a warranty created by the 
franchisor, 
the franchisor shall properly and promptly fulfill 
its warranty obligations, 
in the case of motor vehicles over 
10,000 pounds gross vehicle weight rating, shall adequately and 
fairly compensate the franchisee for parts provided and, in the 
case of all other motor vehicles, shall reimburse the franchisee 
for parts provided at the retail rate customarily charged by that 
franchisee for the same parts when not provided in satisfaction 
of 
a 
warranty. 
Further, 
the 
franchisor 
shall 
reimburse 
the 
franchisee for labor performed at the retail rate customarily 
charged by that franchisee for the same labor when not performed 
in satisfaction of a warranty as long as the franchisee's rate 
for 
labor 
not 
performed 
in 
satisfaction of 
a 
warranty 
is 
routinely posted in a place conspicuous to its service customer. 
A franchisor is not required to pay the price charged by the 
motor vehicle dealer to retail customers for parts of systems, 
appliances, furnishings, accessories and fixtures of a motor home 
as defined in Title 29-A, section 101, subsection 40 that are 
designed, 
used 
and 
maintained 
primarily 
for 
nonvehicular 
residential 
purposes. 
A 
claim 
made 
by 
a 
franchisee 
for 
compensation for parts provided or for reimbursement for labor 
performed in satisfaction of a warranty must be paid wi thin 30 
days of its approval. All the claims must be either approved or 
disapproved within 30 days of their receipt. 
When 
a 
claim is 
disapproved, the franchisee that submitted it must be notified in 
writing of its disapproval within that period, together with the 
specific reasons for its disapproval. A franchisor may not, by 
agreement, 
by 
restriction 
upon 
reimbursement 
or 
otherwise, 
restrict 
the 
nature 
or 
extent of 
labor 
performed 
or 
parts 
provided so that the restriction impairs the franchisee's ability 
to satisfy a warranty created by the franchisor by performing 
labor in a professional manner or by providing parts required in 
accordance with generally accepted standards. 
2. 
Legal 
actions. 
If 
a 
claim is 
disapproved 
by 
the 
manufacturer and the motor vehicle dealer brings legal action to 
collect the disapproved claim and is successful in the action, 
the court shall award the motor vehicle dealer the cost of the 
action 
together 
with 
reasonable 
attorney's 
fees. 
Reasonable 
attorney's 
fees 
are 
determined 
by 
the 
value 
of 
the 
time 
Page l-LR0007(1) 
reasonably expended by the attorney and not by the amount of the 
recovery on behalf of the dealer. 
3. 
Service facility ownership by franchisor prohibited. 
It 
is 
unlawful 
for 
a 
franchisor, 
manufacturer, 
factory 
branch, 
distributor branch or subsidiary to own, 
operate or control, 
either directly or 
indirectly, 
a 
motor 
vehicle warranty 
or 
service facility located in the State except on an emergency or 
interim basis or when no qualified applicant has applied for 
appointment as 
a 
motor vehicle dealer in a market previously 
served by 
a 
new motor vehicle dealer of that manufacturer, 
factory branch, distributor branch or subsidiary's line make. 
4. 
Express written contracts permitted. 
An express written 
contract is permitted between a franchisor and a majority of its 
franchisees for performing warranty repairs. 
A. 
Notwithstanding 
subsection 
1, 
any 
motor 
vehicle 
franchisor and at least a majority of its state franchisees 
of the 
same line make 
may 
agree in an express written 
contract citing this subsection upon 
a 
uniform warranty 
reimbursement 
policy 
used 
by 
contracting franchisees 
to 
perform 
warranty 
repairs. 
The 
policy 
must 
involve 
reimbursement for parts used in warranty repairs or the use 
of a Uniform Time Standards Manual or both. 
Reimbursement 
for 
parts 
under 
the 
agreement 
is 
used 
instead of 
the 
franchisees' 
retail 
rate 
customarily 
charged 
by 
that 
franchisee 
as 
defined 
under 
subsection 
to 
calculate 
compensation due 
from 
the 
franchisor 
for parts 
used in 
warranty 
repairs. 
This 
paragraph 
does 
not 
authorize 
a 
franchisor and its state franchisees to establish a uniform 
hourly labor reimbursement. 
Each franchisor may only have one agreement for each line 
make of a franchisee. 
The agreement must: 
(1) 
Establish a uniform parts reimbursement rate. 
The 
uniform parts reimbursement rate must be greater than 
the 
franchisor's 
nationally 
established 
parts 
reimbursement rate in effect at the time the first 
agreement becomes effective. 
A subsequent agreement 
must result in a 
uniform reimbursement rate that is 
greater 
or 
equal 
to 
the 
rate 
set 
forth 
in 
the 
immediately prior agreement; 
(2) 
Apply to all warranty repair orders written during 
the period that the agreement is effective: 
(3) 
Be available, during the period it is effectiv~ 
to a franchisee of the same line make at any time and 
on the same terms; and 
(4) 
Be for a term not to exceed 3 years as long as a 
party to the agreement may terminate the agreement upon 
the anniversary of the agreement and with 
days' 
prior written notice. 
The agreement remains in effect 
for the term of the agreement regardless of the number 
of motor vehicle dealers of the same line make that may 
terminate the agreement. 
B. 
A franchisor that enters into an agreement with its 
franchisees pursuant to paragraph A may seek to recover its 
costs from only those franchisees that are receiving their 
retail rate customarily charged by those franchisees under 
subsection 1 subject to the following reguirements: 
(1) 
The costs of the franchisor may be recovered only 
by 
increasing 
the 
invoice 
price 
on 
new 
vehicles 
received by those franchisees. 
For purposes of this 
paragraph, 
"costs" means 
the difference between the 
uniform reimbursement rate set forth in an agreement 
entered into pursuant to paragraph A and the retail 
rate customarily charged by that franchisee received by 
those franchisees of the same line make; and 
(2) 
Invoice price increases imposed for the purpose of 
recovering costs may vary from time to time and from 
model 
to 
model 
but 
must 
apply 
uniformly 
to 
all 
franchisees of the same line make in the State that 
have reguested reimbursement for warranty repairs at 
their 
retail 
rate 
customarily 
charged 
by 
that 
franchisee, 
except 
that 
a 
franchisor 
may 
make 
an 
exception for vehicles that are titled in the name of 
the consumer in another state. 
C. 
If a franchisor contracts with its state motor vehicle 
dealers pursuant to this subsection, the franchisor shall 
certify under oath to the Secretary of State that a majority 
of the franchisees of that line make did agree to such an 
agreement and file a sample copy of the agreement. 
On an 
annual basis, each franchisor shall certify under oath to 
the Secretary of State that the 
reimbursement costs it 
recovers 
under 
paragraph 
B 
do 
not 
exceed 
the 
amounts 
authorized by paragraph B. 
The franchisor shall maintain 
for a period of 3 years a file that contains the information 
upon which its certification is based. 
D. 
If a franchisor and its franchisees do not enter into an 
agreement pursuant to paragraph A or if any matter arises 
that is not the subject of an agreement, this subsection has 
no effect. 
For purposes of this subsection, a Uniform Time Standards Manual 
is a document created by a franchisor that establishes the time 
allowances for the diagnosis and performance of warranty work and 
service. 
The allowances must be reasonable and adeguate for the 
work and service to be performed. 
Each franchisor must have a 
reasonable and fair process that allows a franchisee to request a 
modification or adjustment of a standard or standards included in 
such a manual. 
SUMMARY 
The bill permits a motor vehicle franchisor and a dealer to 
enter into an agreement for the reimbursement of warranty repairs 
if a 
majority of 
a 
motor vehicle franchisor's state dealers 
agree. 
Motor vehicle franchisors will certify to the Secretary 
of State that a majority of their dealers participate under the 
agreement and that costs recovered are only those permitted by 
the agreement.