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).