SF 3553

as introduced - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to commerce; regulating motor vehicle service contracts; regulating
contracts and coverages; defining a term; amending Minnesota Statutes 2006,
sections 59B.01; 59B.02, subdivision 11, by adding a subdivision; 59B.05,
subdivision 5; repealing Minnesota Statutes 2006, section 65B.29.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2006, section 59B.01, is amended to read:

59B.01 SCOPE AND PURPOSE.

(a) The purpose of this chapter is to create a legal framework within which service
contracts may be sold in this state.

(b) The following are exempt from this chapter:

(1) warranties;

(2) maintenance agreements;

(3) warranties, service contracts, or maintenance agreements offered by public
utilities, as defined in section 216B.02, subdivision 4, or an entity or operating unit owned
by or under common control with a public utility;

(4) service contracts sold or offered for sale to persons other than consumers;

(5) service contracts on tangible property where the tangible property for which the
service contract is sold has a purchase price of $250 or less, exclusive of sales tax;

deleted text begin (6) motor vehicle service contracts as defined in section 65B.29, subdivision 1,
paragraph (1);
deleted text end

deleted text begin (7) deleted text end new text begin (6) new text end service contracts for home security equipment installed by a licensed
technology systems contractor; and

deleted text begin (8) deleted text end new text begin (7) new text end motor club membership contracts that typically provide roadside assistance
services to motorists stranded for reasons that include, but are not limited to, mechanical
breakdown or adverse road conditions.

(c) The types of agreements referred to in paragraph (b) are not subject to chapters
60A to 79A, except as otherwise specifically provided by law.

new text begin (d) Service contracts issued by motor vehicle manufacturers covering private
passenger automobiles are only subject to sections 59B.03, subdivision 5, 59B.05, and
59B.07.
new text end

Sec. 2.

Minnesota Statutes 2006, section 59B.02, is amended by adding a subdivision
to read:

new text begin Subd. 5a. new text end

new text begin Motor vehicle manufacturer. new text end

new text begin "Motor vehicle manufacturer" means
a person that:
new text end

new text begin (1) manufactures or produces motor vehicles and sells motor vehicles under its
own name or label;
new text end

new text begin (2) is a wholly owned subsidiary of the person that manufactures or produces motor
vehicles;
new text end

new text begin (3) is a corporation which owns 100 percent of the person that manufactures or
produces motor vehicles;
new text end

new text begin (4) does not manufacture or produce motor vehicles, but sells motor vehicles under
the trade name or label of another person that manufactures or produces motor vehicles;
new text end

new text begin (5) manufactures or produces motor vehicles and sells such motor vehicles under the
trade name or label of another person that manufactures or produces motor vehicles; or
new text end

new text begin (6) does not manufacture or produce motor vehicles but, pursuant to a written
contract, licenses the use of its trade name or label to another person that manufactures
or produces motor vehicles and that sells motor vehicles under the licensor's trade name
or label.
new text end

Sec. 3.

Minnesota Statutes 2006, section 59B.02, subdivision 11, is amended to read:

Subd. 11.

Service contract.

"Service contract" means a contract or agreement for a
separately stated consideration for a specific duration to perform the repair, replacement,
or maintenance of property or indemnification for repair, replacement, or maintenance, for
the operational or structural failure due to a defect in materials, workmanship, or normal
wear and tear, with or without additional provisions for incidental payment of indemnity
under limited circumstances new text begin , including without limitation, towing, rental, emergency
road service, and road hazard protection new text end . Service contracts may provide for the repair,
replacement, or maintenance of property for damage resulting from power surges and
accidental damage from handling.

Sec. 4.

Minnesota Statutes 2006, section 59B.05, subdivision 5, is amended to read:

Subd. 5.

Coverages, limitations, and exclusions.

No particular causes of loss or
property are required to be covered, but service contracts must specify the merchandise
and services to be provided and, with equal prominence, any limitations, exceptions, or
exclusions including, but not limited to, any damage or breakdown not covered by the
service contract. new text begin Service contracts may cover damage resulting from rust, corrosion, or
damage caused by a noncovered part or system.
new text end

Sec. 5. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2006, section 65B.29, new text end new text begin is repealed.
new text end