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Rhode IslandS23472026 Regular SessionSenate

AN ACT RELATING TO MOTOR AND OTHER VEHICLES -- REGULATION OF BUSINESS PRACTICES AMONG MOTOR VEHICLE MANUFACTURERS, DISTRIBUTORS, AND DEALERS .

Sponsored By: Robert Britto (Democratic)

Signed by Governor

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Bill Overview

Analyzed Economic Effects

8 provisions identified: 5 benefits, 0 costs, 3 mixed.

Pay for recall and stop-sale delays

Manufacturers must pay dealers for recall parts and labor at the dealer’s retail rate in effect when the work is done. If parts or a fix are not reasonably available and a Stop‑Sale or Do‑Not‑Drive order is in place, the manufacturer must pay at least 1.5% of the vehicle’s value per month, including partial months, until the order ends. Value is the average trade‑in from an independent guide for that year, make, model, and mileage measured on the later of the order date or when the vehicle entered inventory.

Fair warranty parts and labor pay

Dealers set parts markup from either 100 straight non‑warranty repair orders or 60 straight days of such orders (repairs within 180 days). Labor pay is the prior month’s non‑warranty labor sales divided by labor hours; warranty labor uses that rate times the time guide, or actual time if no guide, not less than retail time. Exclusions apply, including promotions, wholesale parts, engine or transmission assemblies, routine maintenance not under retail warranty, small fasteners without part numbers, tires, and reconditioning. If the manufacturer supplies a part at no cost, it must still pay the dealer the average markup on the list price minus the listed cost. Rates take effect in 30 days unless rebutted, dealers can declare no more than twice a year, and manufacturers cannot demand burdensome rate‑setting methods or recoup these costs with dealer‑only surcharges or targeted wholesale price hikes.

Faster claim payments and fewer chargebacks

Dealers have at least 180 days to file warranty, recall, campaign, goodwill, maintenance‑plan, certified pre‑owned, parts‑exchange, or manufacturer service‑contract claims. Manufacturers must approve or deny claims within 30 days; no action in 30 days means approval. Payment or credit is due within 30 days of approval. Chargebacks for warranty, recall, or incentive claims are limited to 12 months after payment (or one year after a program ends if it lasts under a year). Minor clerical errors alone cannot trigger a chargeback, and dealers get at least 60 days after certified notice to fix paperwork. Fraudulent claims can still be charged back.

Stronger family succession for dealers

Dealers can name any successor by filing a written paper with the manufacturer. That paper controls who takes ownership if it conflicts with default rules. A family member can take over if they give written notice within 120 days of the owner’s death or incapacity, agree to franchise terms, and meet current operator standards. If the manufacturer wants to refuse, it must send written reasons to the successor and the Department within 60 days. It cannot end the franchise sooner than 90 days after that notice. If it misses the 60 days, the franchise continues unless other termination rules apply.

Clear rules for shipping damage and prep

If the dealer picks the transport method, risk of loss passes to the dealer when the vehicle is delivered to the carrier. Otherwise, risk stays with the manufacturer until the dealer accepts the vehicle from the carrier. Manufacturers are liable for damage before carrier delivery; dealers are liable after they accept the vehicle, with the same carrier‑choice rule. Dealers must disclose in writing any uncorrected damage and any repaired damage over 6% of MSRP; identical OEM glass, tires, and bumpers do not count toward the 6%. Manufacturers must spell out dealer delivery and prep duties and file those duties and a pay schedule with the Department; that schedule is the dealer’s sole product‑liability responsibility to the manufacturer.

Dealers can protest new or moved stores

Before opening, adding, or moving a same‑make store into a market, the manufacturer must notify the Department and local dealers by certified mail. Dealers have 30 days to file a protest, and the move cannot happen until a hearing finds good cause. The Department must weigh many factors, like dealer investment, customer care, market size, distance, trends, manufacturer motives, and past deliveries. People who convert or modify vehicles before retail sale must follow these establishment rules too.

Equal offers on state vehicle sales

When selling vehicles to the state or local governments, a manufacturer cannot give discounts or refunds to only one dealer. It must offer the same deal to all of its dealers in the market area and notify them at the same time.

More automaker-dealer contracts now covered

This chapter now covers all written or oral agreements between manufacturers, distributors, or factory branches and dealers. It includes franchise agreements; sales of goods, services, or ads; leases or mortgages; security interests; insurance; advertising; construction or installation; servicing; and any other contracts where the manufacturer or distributor has an interest.

Sponsors & Cosponsors

Sponsor

  • Robert Britto

    Democratic • Senate

Cosponsors

  • Jacob Bissaillon

    Democratic • Senate

  • John P. Burke

    Democratic • Senate

  • Louis P. DiPalma

    Democratic • Senate

  • Walter S. Felag Jr.

    Democratic • Senate

  • Mark P. McKenney

    Democratic • Senate

Roll Call Votes

All Roll Calls

Yes: 96 • No: 11

House vote • 6/11/2026

REGULATION OF PRACTICES VEHICLE PASSAGE IN CONCURRENCE

Yes: 62 • No: 7

Senate vote • 6/10/2026

MOTOR/OTHER VEHICLES--REGULATION BUSINESS PRACTICES MANUFACTURER Passage

Yes: 34 • No: 4

Actions Timeline

  1. Signed by Governor — Chapter 180

    6/22/2026Governor

  2. Transmitted to Governor

    6/18/2026Governor

  3. House passed Sub A in concurrence

    6/11/2026House

  4. Placed on House Calendar (06/11/2026)

    6/10/2026House

  5. Senate passed Sub A

    6/10/2026Senate

  6. Placed on Senate Calendar (06/10/2026)

    6/9/2026Senate

  7. Committee recommends passage of Sub A

    6/9/2026

  8. Proposed Substitute

    6/8/2026

  9. Scheduled for consideration (06/09/2026)

    6/5/2026

  10. Meeting postponed (04/28/2026)

    4/27/2026

  11. Scheduled for consideration

    4/24/2026

  12. Committee recommended measure be held for further study

    4/14/2026

  13. Scheduled for hearing and/or consideration (04/14/2026)

    4/10/2026

  14. Introduced, referred to Senate Commerce

    1/30/2026Senate

Bill Text

  • S2347 - As Introduced

    1/30/2026

    HTMLPDF

  • S2347 - Substitute

    1/30/2026

    HTMLPDF

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