An Act To Protect Maine Citizens and Franchised New Car and Truck Dealers
Maine Legislature, Session 124, LD 1491
Committee: Transportation
Sponsors: MITCHELL, PINGREE
Amends: 10 MRSA §1174

MAINE STATE LEGISLATURE 
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124th MAl E LEGISLATURE 
Legislative Document 
No. 1491 
S.P.57 
Senate, June 10, 2009 
. An Act To Protect Maine Citizens and Franchised New Car and 
Truck Dealers 
(EMERGENCY) 
Reference to the Committee on Transportation suggested and ordered plinted. 
9tf)(J~ 
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JOY J. O'BRIEN 
Secretary of the Senate 
Presented by President MITCHELL of Kennebec. (GOVERNOR'S BILL) 
Cosponsored by Speaker PINGREE of North Haven ... 
Pnwl.:d 1111 rl.'l.::L:k·d p.lpl'l 
Emergency preamble. Whereas, acts and resolves of the Legislature do not 
b~come effective until 90 days after adjournment unless en'acted as emergencies; and 
Whereas, the State· has regulated the terms of franchise agreements between 
franchised new motor vehicle dealers and their manufacturers for decades; and 
Whereas, the manufacture, distribution and sale of motor ,(ehicles in this State and 
the ability of franchised new motor vehicle dealers to provide for the distribution, sale 
and repair of v~h icles vitally affcct the general economy of the State, the transpOIiation 
system and the public interestand public welfare; and 
Whereas, recent economic circumstances have created a crisis in the automobile 
industry; and 
Whereas, manufacturers are attempting to use these economic circumstances to 
circumvent the laws of the State; and 
Whereas,manufacturer effOIis to circumvent the laws of the State will result in the 
loss of franchise rights and,protecti( .1S currently provided to Maine motor vehicle dealers 
under state law; and 
Whereas, the circumvention of these laws will be to the detriment of Maine 
consumers, citizens and municipalities and towns; and 
Whereas, Maine's franchise laws now balance the rights and obligations of motor 
vehicle dealers and manufacturers, and the interests of the State and its citizens in a fair 
and reasonable manner; and 
Whereas, the solvency and economic vitality of Maine motor vehicle. dealerships 
are jeopardized by current economic conditions and the decision making of 
manufacturers; and 
Whereas, new niotor vehicle dealerships provide thousands of high-paying jobs in 
the State; and 
Whereas, revenues crucial to the operation of state and local government, including 
property, excise and income taxes, in excess of 20% of ~Il sales taxes, are collected as a 
result of the sale of motor vehicles; and 
Whereas, it is crucial that Maine's motor vehicle dealership network around the. 
State remain intact to provide for the distribution, sale and repair of motor vehicles in all 
areas of the State; and 
Whereas, in the judgment of the Legislature, these facts create an emergency within 
the meaning of the Constitution of Maine and require' the following legislation as /. 
immediately necessary for the preservation of the public peace, health and safety; now, 
therefore, 
Be it enacted by the People of the State of Maine as follows: 
I'ag\: 1 - 124LR2015(OI)-1 
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Sec. 1. 10 MRS A §1l71, sub-§16 is enacted to read: 
16. 
Successor 
manufacturel'; 
predecessor manufacturer. 
"Successor 
manufacturer" means any manufacturer that succeeds, or assumes any pari: of the business 
of, another manufacturer, referred to as the "predecessor manufacturer," as the result of: 
A. A change in ownership, operation or control of the predecessor manufacturer by 
sale or transfer of assets, corporate stock or other equity interest, assignment, merger, 
consolidation, combination, joint venture, redemption, couli-approved sale, operation 
of law or otherwise; 
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B. The termination, suspension or cessation of a pali or all of the business operations 
of the predecessor manufacturer; 
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C The noncontinuation of the sale of the product line; or 
D.· A change in distribution system by the predecessor manufacturer, whether 
throllgh a change in distributor or the predecessor manufacturer's decision to cease 
conducting business through a distributor altogether. 
Sec. 2. 10 MRSA §1174, sub-§3-A is enacted to read: 
3-A. Successor manufacturer. Successor manufacturer, for a period of 5 years 
from the date of acquisition of control by that successor manufacturer, to offer a franchise 
to any person for a line make of a predecessor manufacturer in any franchise market area 
in which the predecessor manufacturer previously cancelled, terminated, nOllcontinued, 
failed to renew or otherwise ended a franchise agreement with a franchisee who had a " 
franchise facility in that franchise market area without first offering the franchise to the 
former franchisee at no cost, unless: 
A. 
Within. 30 days of the" former franchisee's cancellation, termination, 
noncontinuance or nonrenewal, the predecessor manufacturer had consolidated" the 
line make with another of its line makes for which the predecessor manufacturer had 
a franchisee with a then-existing franchise facility in that franchise market area; 
B. The successor manufacturer has paid the former franchisee the fair market value 
of the former franchisee's motor vehicle dealership in accordance with this 
subsection; or 
C" The successor manufacturer proves that the fonner franchisee is not competent to 
be a franchisee. 
For purposes of this subsection, "franchise market area" means the area located within 15 
miles of the territorial limits of the. municipality in which the former franchisee's 
franchise facility was located. 
For purposes of this subsection, the fair market value of a former franchisee's motor 
vehicle dealership must be calculated as of the date of the following that yields the 
highest fair market value: the date the predecessor manufacturer announced the action 
that resulted in the cancellation, termination, noncontinuan"ce or nonrenewal; the date the 
action that resulted in cancellation, termination, noncontinuance or nonrenewal became 
final the date 12 months prior to the date that the predecessor manufacturer announced 
the action that resulted in the cancellation, termination, noncontinuance or nonrenewal. 
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Emergency cBau.se. 
In view of the emergency cited in the preamble, this 
legislation takes effect when approved. 
SUMMARY 
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The purpose of this bill is to protect motor vehicle dealer rights, preserve local 
businesses and protect public access to essential dealers' services throughout the State. 
This bill limits the ability of a successor manufacturer to offer a franchise to any 
person for a line make of a predecessor manufacturer without first offering the franch ise 
to the former franchisee. 
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