BILL ANALYSIS



C.S.H.B. 1905
By: Combs
03-22-95
Committee Report (Substituted)


BACKGROUND

Currently, the Texas Motor Vehicle Commission Code (Vernon's Texas
Civil Statutes, Article 4413(36) states that only new vehicles are
covered under the "Lemon Law."  The current law also does not
specify what type of vehicle will replace the non-repairable
vehicle. In addition, there is no set limit on how many times a
consumer must attempt to have their vehicle repaired.

PURPOSE

This bill broadens the "Lemon Law" to include all motor vehicles
still under an express warranty.  It will also specify what type of
vehicle will be used to replace the non-repairable one.  The bill
also allows the consumer to take action after the fourth repair
attempt.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly
grant any additional rulemaking authority to a state officer,
department, agency, or institution.  However in SECTION 1,
subsection (c)(4) the Commission by rule shall define the
incidental costs that are eligible for reimbursement, shall specify
other requirements necessary to determine and eligible cost, and
may set a maximum amount that is  eligible for reimbursement,
either by type of eligible cost or a total for all costs.

SECTION BY SECTION ANALYSIS

SECTION 1: Amends V.T.C.S., Article 4413(36), Section 6.07,
Subsections (c), (d) and (h) as follows:
(c)(1) Specifies that the owner has the option of replacement or
refunding the price of a defective or hazardous vehicle (replaces
"condition" with "nonconformity").  Subsection (1) would give the
owner the option of replacing the motor vehicle with a comparable
motor vehicle on payment of a reasonable allowance for the owner's
use of the vehicle; or (2) accept return of the vehicle from the
owner and refund to the owner the full purchase price less a
reasonable allowance for the owner's use of the vehicle and any
other allowances or refunds payable to the owner.  Strikes the
definition of "impairment of market value".  Strikes commission by
rule shall define the incidental costs.  

Adds new subsection (2) a reasonable allowance for use shall be
that amount directly attributable to use of the motor vehicle when
the vehicle is not out of service for repair.

Adds new subsection (3) definition of "impairment of market value".

Adds new subsection (4) reimbursement of incidental cost resulting
from loss of use of the motor vehicle because of nonconformity or
defect.  The Commission by rule shall define the incidental costs
that are eligible for reimbursement, shall specify other
requirements necessary to determine and eligible cost, and may set
a maximum amount that is  eligible for reimbursement, either by
type of eligible cost or a total for all costs.

Adds new subsection (5) written notice must be given to the
manufacturer, converter, or distributor stating the nonconformity
or defect and has been given an opportunity to cure the alleged
defect or nonconformity after receipt of the written notice.

Adds new subsection (6) a manufacturer, converter, or distributor
may plead and prove as an affirmative defense to the remedies
provided hereunder that (A) the nonconformity is the result of
abuse, neglect, or unauthorized modifications or alterations of the
motor vehicle; or (B) the nonconformity does not substantially
impair the use or market value of the motor vehicle.

(d)(1) For purposes of this section a reasonable number of attempts
have been undertaken to conform a motor vehicle to the applicable
express warranties if (A) the same nonconformity has been subject
to repair four or more times by the manufacturer, converter, or
distributor,its agent, or its authorized dealer and two of the
repair attempts have been made within a period of 12 months
following the date of original delivery to an owner, or 12,000
miles, whichever occurs first.

Renumbers subsection (d)(2) through (d)(3) with (d)(B) and (d)(C)
and adds new subsection sections (2) defining "serious safety
hazard"; (3) extension of time period due to uncontrollable
circumstances; (4) lending of comparable motor vehicle, 30-day
period is tolled.

(h) A proceeding brought under this section shall be commenced
within six months following the earlier of (1) expiration of the
express warranty term, (2) 24 months following the date of original
delivery of the motor vehicle to an owner, or (3) 24,000 miles
following the date of original delivery of the motor vehicle to an
owner.

SECTION 2: Repeals V.T.C.S. Article 4413(36) Section 3.08(i).

SECTION 3: Proceedings brought before the effective date of this
act are covered by the former law, which is continued in effect for
that purpose.

SECTION 4: EFFECTIVE DATE of September 1, 1995

SECTION 5: EMERGENCY CLAUSE.


COMPARISON OF ORIGINAL TO SUBSTITUTE

SECTION 1: Amends V.T.C.S., Article 4413(36), Section 6.07,
Subsections (b), (c) and (h).  Subsection (b) exists in the
introduced version of the bill and does not exist in the Committee
substitute.  Subsection (d) is addressed in the Committee
Substitute, and not in the introduced version of the bill.  In the
introduced version subsection (h) states that "except as provided
by Subsection (1) of this section, a proceeding brought to obtain
a remedy under Subsection (c) of this section shall be commenced
within six months following the earlier of (1) expiration of the
express warranty term or (2) 36 months or 36,000 miles following
the date of original delivery of the motor vehicle to an owner." 
In the Committee substitute the language reflects a 24 month time
period or 24,000 mile distance requirement.

SUMMARY OF COMMITTEE ACTION

Pursuant to a notice posted on March 9, 1995 at 6:16 p.m. the House
Committee on Transportation met in a public hearing on Wednesday
March 15, 1995 at 2:00 p.m. in Room E1.014 of the Capitol Extension
and was called to order at 2:20 p.m. by the Chair, Representative
Clyde Alexander.  The Chair laid out H.B. 1905 and recognized
Representative Combs to explain H.B. 1905.  Representative Uher
laid out the Committee Substitute to H.B. 1905 and without
objection, the Committee substitute was adopted.  The Chair
recognized the following persons who testified in support of H.B.
1905: Charles Rogers, Representing himself; Leigh Nichols, American
Automobile Manufacturing Association.  No persons testified in
opposition to H.B. 1905.  Representative Bosse made the motion to
withdraw the Committee Substitute to H.B. 1905 and without
objection, the Committee Substitute to H.B. 1905 was withdrawn. 
The Chair left H.B. 1905 pending before the Committee.  Pursuant to
a public notice posted on March 16, 1995, at 5:53 p.m., the House
Committee on Transportation met in a public hearing on Wednesday,
March 22, 1995 at 2:00 p.m. in Room E1.014 of the Capitol Extension
and was called to order at 6:54 p.m. after the rules were suspended
on the House floor to meet in public hearing after the posted time,
by the Chair, Representative Clyde Alexander.  The Chair laid out
H.B. 1905 by Combs which was pending before the Committee. 
Representative Alexander laid out the Committee Substitute to H.B.
1905, and without objection the substitute was adopted. 
Representative Bosse moved that the Committee report H.B. 1905, as
substituted, to the full House with the recommendation that it do
pass.  The motion prevailed by the following vote: Ayes (7), Nayes
(0), Absent (2), Present not voting (0).