Bill
HB 8213
The bill expands dealer protections by extending succession rights, adds strict notice, hearings, and compensation rules for warranties, recalls, and dealership locations.
Title: AN ACT RELATING TO MOTOR AND OTHER VEHICLES -- REGULATION OF BUSINESS PRACTICES AMONG MOTOR VEHICLE MANUFACTURERS, DISTRIBUTORS, AND DEALERS
Introduced: February 27, 2026
Sponsors: Representatives Serpa, Fellela, Read (Co-sponsors: Fellela, Serpa, Read)
Committee: House Corporations
Status: As of April 28, 2026, Committee recommends passage
Effective Date: Upon passage
Purpose and overall intent
- The bill expands and clarifies Rhode Island’s regulatory framework governing business practices among motor vehicle manufacturers, distributors, factory branches, and motor vehicle dealers.
- It extends certain protections and process requirements that currently apply to manufacturers to also apply to distributors and factory branches.
- It updates warranty reimbursement, recall obligations, dealership succession, and dealership establishment/relocation procedures to enhance dealer protections and ensure more transparent, timely processes.
Key provisions and changes
1) Dealership succession and survivorship (31-5.1-4.1)
- Allows designated family members to succeed to ownership in a new motor vehicle dealership through a will or written instrument.
- Conditions for succession:
- Family member must notify manufacturer/distributor/factory branch within 120 days of the owner’s death or incapacity.
- Designated successor must agree to be bound by the franchise terms and meet current qualification criteria.
- Manufacturer may request and family member must provide necessary personal/financial data.
- Manufacturer may refuse to honor succession for good cause, with notice to the designated family member and the Rhode Island Department of Revenue within 60 days of intent to succeed.
- A 90-day discontinuance window is triggered for the transition if the succession is not honored.
2) Establishing and relocating dealerships (31-5.1-4.2)
- Requires written, certified-mail notice to the department and other dealers in the same line/make in the market prior to adding a new dealership, relocating, or adding a location, except in limited circumstances.
- Dealer protests may be filed within 30 days of notice or after any appeal procedure.
- Department hearings determine whether “good cause” exists to permit the new dealership/activity.
- Burden of proof on the manufacturer/distributor/factory branch to show good cause.
- Right of appeal to a court of competent jurisdiction.
3) Delivery obligations (31-5.1-5)
- Manufacturers must provide dealers with delivery and preparation obligations and a compensation schedule.
- The schedule governs dealer responsibilities for delivery/preparation and sets the baseline for product liability between dealer and manufacturer.
4) Warranty and recall compensation (31-5.1-6; 31-5.1-6.1)
- Warranty fulfillment: Manufacturers must adequately compensate dealers for labor and parts, including diagnostic work, with a minimum of 180 days to submit claims; recall/maintenance-related work compensated at dealer retail rate; fair pricing standards apply for parts and labor.
- Method for determining dealer parts and labor rates: Dealers submit data to establish a “retail rate” and “average markup” for parts and labor, with presumption of fairness that can be rebutted by the manufacturer via substantiation.
- Claims processing: Timelines for approval (30 days) and payment (30 days) with de facto approval if no decision within 30 days; chargebacks allowed under specified conditions within 12 months (warranty-related, with limits on incidental clerical issues).
- Recalls (31-5.1-6.1): Dealers must be compensated for recall labor and parts at recall rates; if parts/remedies unavailable and a stop-sale/do-not-drive is in effect, additional compensation at 1.5% of vehicle value per month (or portion) applies for used vehicles in inventory; certain limitations apply to total compensation and exclusive remedy status.
5) Agreements (31-5.1-8)
- Broad coverage: Applies to all agreements between manufacturers/distributors/factory branches and dealers, including franchise terms, sales, leases, service contracts, advertising, and other related arrangements.
6) Sales to the state (31-5.1-11)
- Ensures uniform treatment of discounts or inducements: offers to dealers must be extended to all dealers in the market area, with simultaneous notice to dealers when the state or its subdivisions are involved.
7) Transportation damages; risk of loss; promotional activities (31-5.1-18, 31-5.1-19, 31-5.1-21)
- Clarifies who bears risk of loss before/after acceptance and during transportation to dealers.
- Sets disclosure thresholds on unrepaired damages (6% of vehicle value) before delivery for certain categories.
- Outlines limits on promotional/inducement chargebacks and timelines for promotional claims.
Who is affected
- New motor vehicle dealers and their designated successors (family members eligible to succeed ownership).
- Manufacturers, distributors, factory branches, and their franchise agreements with dealers.
- Department of Revenue (for succession matters) and the Rhode Island Department (as applicable) for protests and hearings.
- Used-vehicle inventories held by dealers under recalls and stop-sale orders.
Procedural/timeline aspects
- Succession notice: 120-day window; 60-day notice for refusal; 90-day discontinuance window.
- New dealership protests: 30-day filing window after notice or after appeal.
- Warranty/recall claims: 30-day decision window; 30-day payment window; deeming approvals if no decision within 30 days; recall-related claims follow similar timelines with additional 1.5% monthly compensation if parts are unavailable.
- Rate determinations for parts/labor: dealer submissions with rebuttal periods; department involvement if protests arise.
Overall impact
- Strengthens dealer protections in succession, warranty reconciliation, and recall compensation.
- Expands similar protections and procedural requirements to distributors and factory branches.
- Promotes transparency in pricing, claims processing, and dealership placement decisions.
- Aims to balance the bargaining dynamics between dealers and manufacturers/distributors while preserving flexibility for market growth and public welfare considerations.
Compiled from official sources — confirm details with the bill’s official record.
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