By Combs H.B. No. 1905
Substitute the following for H.B. No. 1905:
By Alexander C.S.H.B. No. 1905
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to enforcement of a motor vehicle warranty.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Section 6.07, Texas Motor Vehicle Commission Code
1-5 (Article 4413(36), Vernon's Texas Civil Statutes), is amended by
1-6 amending Subsections (c), (d) and (h) and adding Subsection (l) to
1-7 read as follows:
1-8 (c)(1) If the manufacturer, converter, or distributor is
1-9 unable to conform the motor vehicle to an applicable express
1-10 warranty by repairing or correcting any defect or <condition>
1-11 nonconformity which creates a serious safety hazard or
1-12 substantially impairs the use or market value of the motor vehicle
1-13 after a reasonable number of attempts, the manufacturer, converter,
1-14 or distributor shall, at the owner's option (1) replace the motor
1-15 vehicle with a comparable motor vehicle on payment of a reasonable
1-16 allowance for the owner's use of the vehicle; or (2) accept return
1-17 of the vehicle from the owner and refund to the owner the full
1-18 purchase price less a reasonable allowance for the owner's use of
1-19 the vehicle and any other allowances or refunds payable to the
1-20 owner. <In this section, "impairment of market value" means a
1-21 substantial loss in market value caused by a defect specific to the
1-22 vehicle. In addition to replacing the vehicle or refunding the
1-23 purchase price, the manufacturer, converter, or distributor shall
1-24 reimburse the owner for reasonable incidental costs resulting from
2-1 loss of use of the motor vehicle because of the nonconformity or
2-2 defect. As necessary to promote the public interest, the
2-3 Commission by rule shall define the incidental costs that are
2-4 eligible for reimbursement, shall specify other requirements
2-5 necessary to determine an eligible cost, and may set a maximum
2-6 amount that is eligible for reimbursement, either by type of
2-7 eligible cost or a total for all costs. Refunds shall be made to
2-8 the owner and lienholder, if any, as their interests may appear. A
2-9 reasonable allowance for use shall be that amount directly
2-10 attributable to use of the motor vehicle when the vehicle is not
2-11 out of service for repair. An order to refund or to replace may
2-12 not be issued by the Executive Director against a manufacturer,
2-13 converter, or distributor unless the manufacturer, converter, or
2-14 distributor has been mailed prior written notification of the
2-15 alleged nonconformity or defect from or on behalf of the owner and
2-16 has been given an opportunity to cure the alleged defect or
2-17 nonconformity. In any hearing before the Executive Director under
2-18 this section, a manufacturer, converter, or distributor may plead
2-19 and prove as an affirmative defense to the remedies provided
2-20 hereunder that (1) the nonconformity is the result of abuse,
2-21 neglect, or unauthorized modifications or alterations of the motor
2-22 vehicle; or (2) the nonconformity does not substantially impair the
2-23 use or market value of the motor vehicle. In this section, "serious
2-24 safety hazard" means a life-threatening malfunction or
2-25 nonconformity that substantially impedes a person's ability to
2-26 control or operate a motor vehicle for ordinary use or intended
2-27 purposes or that creates a substantial risk of fire or explosion.>
3-1 (2) A reasonable allowance for use shall be that
3-2 amount directly attributable to use of the motor vehicle when the
3-3 vehicle is not out of service for repair.
3-4 (3) In this section, "impairment of market value"
3-5 means a substantial loss in market value caused by a defect
3-6 specific to the vehicle.
3-7 (4) In addition to replacing the vehicle or refunding
3-8 the purchase price, the manufacturer, converter, or distributor
3-9 shall reimburse the owner for reasonable incidental costs resulting
3-10 from loss of use of the motor vehicle because of the nonconformity
3-11 or defect. As necessary to promote the public interest, the
3-12 Commission by rule shall define the incidental costs that are
3-13 eligible for reimbursement, shall specify other requirements
3-14 necessary to determine an eligible cost, and may set a maximum
3-15 amount that is eligible for reimbursement, either by type of
3-16 eligible cost or a total for all costs. Refunds shall be made to
3-17 the owner and lienholder, if any, as their interests may appear.
3-18 (5) An order to refund or to replace may not be issued
3-19 by the Executive Director against a manufacturer, converter, or
3-20 distributor unless the manufacturer, converter, or distributor has
3-21 been mailed prior written notification of the alleged nonconformity
3-22 or defect from or on behalf of the owner and has been given an
3-23 opportunity to cure the alleged defect or nonconformity after
3-24 receipt of the written notice.
3-25 (6) In any hearing before the Executive Director under
3-26 this section, a manufacturer, converter, or distributor may plead
3-27 and prove as an affirmative defense to the remedies provided
4-1 hereunder that (A) the nonconformity is the result of abuse,
4-2 neglect, or unauthorized modifications or alterations of the motor
4-3 vehicle; or (B) the nonconformity does not substantially impair the
4-4 use or market value of the motor vehicle.
4-5 (d)(1) <There is a rebuttable presumption that> For purposes
4-6 of this section a reasonable number of attempts have been
4-7 undertaken to conform a motor vehicle to the applicable express
4-8 warranties if <(1)> (A) the same nonconformity has been subject to
4-9 repair four or more times by the manufacturer, converter, or
4-10 distributor, its agent, or its authorized dealer and two of the
4-11 repair attempts have been made within a period of 12 months
4-12 following the date of original delivery to an owner, or 12,000
4-13 miles, whichever occurs first, and the other two repair attempts
4-14 occur within the 12 months or 12,000 miles immediately following
4-15 the date of the second repair attempt, whichever occurs first, but
4-16 such nonconformity continues to exist; <(2)> (B) the same
4-17 nonconformity creates a serious safety hazard and has caused the
4-18 vehicle to have been subject to repair two or more times by the
4-19 manufacturer, converter, or distributor, or an authorized agent or
4-20 dealer, and at least one attempt to repair the nonconformity was
4-21 made in the period of 12 months or 12,000 miles, whichever occurs
4-22 first, and at least one other attempt made in the period of 12
4-23 months or 12,000 miles after the first repair attempt, whichever
4-24 occurs first, but the nonconformity continues to exist; or <(3)> (C)
4-25 the vehicle is out of service for repair for a cumulative total of
4-26 30 or more days in the 24 months or 24,000 miles, whichever occurs
4-27 first, and at least two repair attempts were made in the first 12
5-1 months or 12,000 miles immediately following the date of original
5-2 delivery to an owner and a nonconformity still exists that
5-3 substantially impairs the vehicle's use or market value. <The
5-4 initial 12-month period or 12,000 mile limit, the subsequent
5-5 12-month period or 12,000 mile limit, and the 30-day period shall
5-6 be extended by any period of time during which repair services are
5-7 not available to the owner because of a war, invasion, strike or
5-8 fire, flood, or other natural disaster. During any period of time
5-9 that the manufacturer or distributor lends a comparable motor
5-10 vehicle to the owner during the time the vehicle is being repaired
5-11 by an authorized dealer, the 30-day period provided for in this
5-12 subsection is tolled.>
5-13 (2) In this section, "serious safety hazard" means a
5-14 life-threatening malfunction or nonconformity that substantially
5-15 impedes a person's ability to control or operate a motor vehicle
5-16 for ordinary use or intended purposes or that creates a substantial
5-17 risk of fire or explosion.
5-18 (3) The initial 12-month period or 12,000 mile limit,
5-19 the subsequent 12-month period or 12,000 mile limit, and the 30-day
5-20 period shall be extended by any period of time during which repair
5-21 services are not available to the owner because of a war, invasion,
5-22 strike or fire, flood, or other natural disaster.
5-23 (4) During any period of time that the manufacturer or
5-24 distributor lends a comparable motor vehicle to the owner during
5-25 the time the vehicle is being repaired by an authorized dealer, the
5-26 30-day period provided for in this Subsection (d) is tolled.
5-27 (h) A proceeding brought under this section shall be
6-1 commenced within six months following the earlier of (1) expiration
6-2 of the express warranty term, <or> (2) 24 months following the date
6-3 of original delivery of the motor vehicle to an owner, or (3)
6-4 24,000 miles following the date of original delivery of the motor
6-5 vehicle to an owner. An order by the Commission to replace or
6-6 repurchase a new motor vehicle under Subsection (c) may only be
6-7 made on or before the earlier of 24 months following the date of
6-8 original delivery of the motor vehicle to an owner, or 24,000 miles
6-9 following the date of original delivery of the motor vehicle to an
6-10 owner.
6-11 (l) The Commission may order the manufacturer, converter, or
6-12 distributor to replace the motor vehicle or refund the purchase
6-13 price as provided by Subsection (c) of this section if:
6-14 (1) the Commission has ordered the manufacturer,
6-15 converter, or distributor to conform a motor vehicle to a warranty;
6-16 and
6-17 (2) the manufacturer, converter, or distributor has
6-18 not conformed the motor vehicle to the warranty before the earlier
6-19 of:
6-20 (A) the date of completion of the fourth attempt
6-21 to conform the motor vehicle to the warranty occurring on or after
6-22 the date of the Commission's order; or
6-23 (B) the 31st day after the date of the
6-24 Commission's order.
6-25 SECTION 2. Section 3.08(i), Texas Motor Vehicle Commission
6-26 Code (Article 4413(36), Vernon's Texas Civil Statutes), is
6-27 repealed.
7-1 SECTION 3. The change in law made by this Act applies only
7-2 to a proceeding brought under Section 6.07, Texas Motor Vehicle
7-3 Commission Code (Article 4413(36), Vernon's Texas Civil Statutes),
7-4 on or after the effective date of this Act. A proceeding brought
7-5 before the effective date of this Act is covered by the law in
7-6 effect when the proceeding was brought, and the former law is
7-7 continued in effect for that purpose.
7-8 SECTION 4. This Act takes effect September 1, 1995.
7-9 SECTION 5. The importance of this legislation and the
7-10 crowded condition of the calendars in both houses create an
7-11 emergency and an imperative public necessity that the
7-12 constitutional rule requiring bills to be read on three several
7-13 days in each house be suspended, and this rule is hereby suspended.