The proposed bill amends various sections of the General Laws in Chapter 31-5.1, which regulates the relationships between motor vehicle manufacturers, distributors, factory branches, and dealers. Key insertions include the definitions of "common entity," "distributor," and "factory branch," which clarify the roles and responsibilities of these entities in enforcing compliance with franchise agreements. The bill also specifies that a "new motor vehicle" must not have been sold outside of dealer transactions and expands the definition of "new motor vehicle dealer" to include those performing warranty repairs. Additionally, it introduces provisions to protect dealers from unfair practices, such as requiring separate franchises for different vehicle models and prohibiting discrimination in pricing or terms.

Moreover, the bill outlines specific protections for dealers regarding franchise termination, requiring good cause and proper notice before any cancellation or nonrenewal. It mandates fair compensation for dealers upon termination, including reimbursement for unsold vehicles and associated costs. The bill also prohibits manufacturers and distributors from engaging in coercive practices and emphasizes the importance of fair dealings in the industry. Overall, these amendments aim to create a more equitable and transparent framework for motor vehicle dealerships in Rhode Island, ensuring that both dealers and consumers are protected from unfair practices.