An Act To Protect Maine Citizens and Franchised New Car and Truck Dealers
Emergency preamble. Whereas, acts and resolves of the Legislature do not become effective until 90 days after adjournment unless enacted 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 vehicles in this State and the ability of franchised new motor vehicle dealers to provide for the distribution, sale and repair of vehicles vitally affect the general economy of the State, the transportation system and the public interest and 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 efforts to circumvent the laws of the State will result in the loss of franchise rights and protections 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 motor 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 all 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,
Sec. 1. 10 MRSA §1171, sub-§16 is enacted to read:
Sec. 2. 10 MRSA §1174, sub-§3-A is enacted to read:
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, noncontinuance 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.
Emergency clause. In view of the emergency cited in the preamble, this legislation takes effect when approved.
SUMMARY
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 franchise to the former franchisee.