1.1 	A bill for an act
1.2 	relating to commerce; regulating motor vehicle service contracts; regulating 
1.3 	contracts and coverages; defining a term;amending Minnesota Statutes 2006, 
1.4 	sections 59B.01; 59B.02, subdivision 11, by adding a subdivision; 59B.05, 
1.5 	subdivision 5; repealing Minnesota Statutes 2006, section 65B.29.
1.6 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.7 	Section 1. Minnesota Statutes 2006, section 59B.01, is amended to read:
1.8 	59B.01 SCOPE AND PURPOSE.
1.9 	(a) The purpose of this chapter is to create a legal framework within which service 
1.10 	contracts may be sold in this state.
1.11 	(b) The following are exempt from this chapter:
1.12 	(1) warranties;
1.13 	(2) maintenance agreements;
1.14 	(3) warranties, service contracts, or maintenance agreements offered by public 
1.15 	utilities, as defined in section 216B.02, subdivision 4, or an entity or operating unit owned 
1.16 	by or under common control with a public utility;
1.17 	(4) service contracts sold or offered for sale to persons other than consumers;
1.18 	(5) service contracts on tangible property where the tangible property for which the 
1.19 	service contract is sold has a purchase price of $250 or less, exclusive of sales tax;
1.20 	(6) motor vehicle service contracts as defined in section 65B.29, subdivision 1, 
1.21 	paragraph (1);
1.22 	(7) (6) service contracts for home security equipment installed by a licensed 
1.23 	technology systems contractor; and
2.1 	(8) (7) motor club membership contracts that typically provide roadside assistance 
2.2 	services to motorists stranded for reasons that include, but are not limited to, mechanical 
2.3 	breakdown or adverse road conditions.
2.4 	(c) The types of agreements referred to in paragraph (b) are not subject to chapters 
2.5 	60A to 79A, except as otherwise specifically provided by law.
2.6 	(d) Service contracts issued by motor vehicle manufacturers covering private 
2.7 	passenger automobiles are only subject to sections 59B.03, subdivision 5, 59B.05, and 
2.8 	59B.07.

2.9 	Sec. 2. Minnesota Statutes 2006, section 59B.02, is amended by adding a subdivision 
2.10 	to read:
2.11 		Subd. 5a.Motor vehicle manufacturer. "Motor vehicle manufacturer" means 
2.12 	a person that:
2.13 	(1) manufactures or produces motor vehicles and sells motor vehicles under its 
2.14 	own name or label;
2.15 	(2) is a wholly owned subsidiary of the person that manufactures or produces motor 
2.16 	vehicles;
2.17 	(3) is a corporation which owns 100 percent of the person that manufactures or 
2.18 	produces motor vehicles;
2.19 	(4) does not manufacture or produce motor vehicles, but sells motor vehicles under 
2.20 	the trade name or label of another person that manufactures or produces motor vehicles;
2.21 	(5) manufactures or produces motor vehicles and sells such motor vehicles under the 
2.22 	trade name or label of another person that manufactures or produces motor vehicles; or
2.23 	(6) does not manufacture or produce motor vehicles but, pursuant to a written 
2.24 	contract, licenses the use of its trade name or label to another person that manufactures 
2.25 	or produces motor vehicles and that sells motor vehicles under the licensor's trade name 
2.26 	or label.

2.27 	Sec. 3. Minnesota Statutes 2006, section 59B.02, subdivision 11, is amended to read:
2.28 		Subd. 11.Service contract. "Service contract" means a contract or agreement for a 
2.29 	separately stated consideration for a specific duration to perform the repair, replacement, 
2.30 	or maintenance of property or indemnification for repair, replacement, or maintenance, for 
2.31 	the operational or structural failure due to a defect in materials, workmanship, or normal 
2.32 	wear and tear, with or without additional provisions for incidental payment of indemnity 
2.33 	under limited circumstances, including without limitation, towing, rental, emergency 
2.34 	road service, and road hazard protection. Service contracts may provide for the repair, 
3.1 	replacement, or maintenance of property for damage resulting from power surges and 
3.2 	accidental damage from handling.

3.3 	Sec. 4. Minnesota Statutes 2006, section 59B.05, subdivision 5, is amended to read:
3.4 		Subd. 5.Coverages, limitations, and exclusions. No particular causes of loss or 
3.5 	property are required to be covered, but service contracts must specify the merchandise 
3.6 	and services to be provided and, with equal prominence, any limitations, exceptions, or 
3.7 	exclusions including, but not limited to, any damage or breakdown not covered by the 
3.8 	service contract. Service contracts may cover damage resulting from rust, corrosion, or 
3.9 	damage caused by a noncovered part or system.

3.10 	Sec. 5.  REPEALER.
 3.11 	Minnesota Statutes 2006, section 65B.29, is repealed.