By Combs H.B. No. 1905
74R4774 DWS-D
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 (b), (c), and (h) and adding Subsection (l) to
1-7 read as follows:
1-8 (b) If a <new> motor vehicle does not conform to all
1-9 applicable manufacturer's, converter's, or distributor's express
1-10 warranties, the manufacturer, converter, or distributor shall make
1-11 the repairs necessary to conform the vehicle to the applicable
1-12 express warranties, notwithstanding that the repairs are made after
1-13 the expiration of the warranties, if: (1) the owner or the owner's
1-14 designated agent reported the nonconformity to the manufacturer,
1-15 converter, or distributor, its agent, or its authorized dealer
1-16 during the term of such express warranties; or (2) a rebuttable
1-17 presumption relating to the vehicle was created under Subsection
1-18 (d) of this section. This section does not in any way limit the
1-19 remedies available to an owner under a new motor vehicle warranty
1-20 that extends beyond the provisions of this section.
1-21 (c) If the manufacturer, converter, or distributor is unable
1-22 to conform the motor vehicle to an applicable express warranty by
1-23 repairing or correcting any defect or condition which creates a
1-24 serious safety hazard or substantially impairs the use or market
2-1 value of the motor vehicle after a reasonable number of attempts,
2-2 the manufacturer, converter, or distributor shall, at the owner's
2-3 option (1) replace the motor vehicle with a comparable motor
2-4 vehicle of the current model year or the same model year as the
2-5 motor vehicle covered by the warranty, on payment of a reasonable
2-6 allowance for the owner's use of the vehicle; or (2) accept return
2-7 of the vehicle from the owner and refund to the owner the full
2-8 purchase price less a reasonable allowance for the owner's use of
2-9 the vehicle and any other allowances or refunds payable to the
2-10 owner. In this section, "impairment of market value" means a
2-11 substantial loss in market value caused by a defect specific to the
2-12 vehicle. In addition to replacing the vehicle or refunding the
2-13 purchase price, the manufacturer, converter, or distributor shall
2-14 reimburse the owner for reasonable incidental costs resulting from
2-15 loss of use of the motor vehicle because of the nonconformity or
2-16 defect. As necessary to promote the public interest, the
2-17 Commission by rule shall define the incidental costs that are
2-18 eligible for reimbursement, shall specify other requirements
2-19 necessary to determine an eligible cost, and may set a maximum
2-20 amount that is eligible for reimbursement, either by type of
2-21 eligible cost or a total for all costs. Refunds shall be made to
2-22 the owner and lienholder, if any, as their interests may appear. A
2-23 reasonable allowance for use shall be that amount directly
2-24 attributable to use of the motor vehicle when the vehicle is not
2-25 out of service for repair. An order to refund or to replace may
2-26 not be issued by the Executive Director against a manufacturer,
2-27 converter, or distributor unless the manufacturer, converter, or
3-1 distributor has been mailed prior written notification of the
3-2 alleged nonconformity or defect from or on behalf of the owner and
3-3 has been given an opportunity to cure the alleged defect or
3-4 nonconformity. In any hearing before the Executive Director under
3-5 this section, a manufacturer, converter, or distributor may plead
3-6 and prove as an affirmative defense to the remedies provided
3-7 hereunder that (1) the nonconformity is the result of abuse,
3-8 neglect, or unauthorized modifications or alterations of the motor
3-9 vehicle; or (2) the nonconformity does not substantially impair the
3-10 use or market value of the motor vehicle. In this section, "serious
3-11 safety hazard" means a life-threatening malfunction or
3-12 nonconformity that substantially impedes a person's ability to
3-13 control or operate a motor vehicle for ordinary use or intended
3-14 purposes or that creates a substantial risk of fire or explosion.
3-15 (h) Except as provided by Subsection (l) of this section, a
3-16 <A> proceeding brought to obtain a remedy under Subsection (c) of
3-17 <under> this section shall be commenced within six months following
3-18 the earlier of (1) expiration of the express warranty term or (2)
3-19 36 <24> months or 36,000 <24,000> miles following the date of
3-20 original delivery of the motor vehicle to an owner.
3-21 (l) Regardless of when a proceeding is commenced, the
3-22 Commission may order the manufacturer, converter, or distributor to
3-23 replace the motor vehicle or refund the purchase price as provided
3-24 by Subsection (c) of this section if:
3-25 (1) the Commission has ordered the manufacturer,
3-26 converter, or distributor to conform a motor vehicle to a warranty;
3-27 and
4-1 (2) the manufacturer, converter, or distributor has
4-2 not conformed the motor vehicle to the warranty before the earlier
4-3 of:
4-4 (A) the date of completion of the fourth attempt
4-5 to conform the motor vehicle to the warranty occurring on or after
4-6 the date of the Commission's order; or
4-7 (B) the 31st day after the date of the
4-8 Commission's order.
4-9 SECTION 2. Section 3.08(i), Texas Motor Vehicle Commission
4-10 Code (Article 4413(36), Vernon's Texas Civil Statutes), is
4-11 repealed.
4-12 SECTION 3. The change in law made by this Act applies only
4-13 to a proceeding brought under Section 6.07, Texas Motor Vehicle
4-14 Commission Code (Article 4413(36), Vernon's Texas Civil Statutes),
4-15 on or after the effective date of this Act. A proceeding brought
4-16 before the effective date of this Act is covered by the law in
4-17 effect when the proceeding was brought, and the former law is
4-18 continued in effect for that purpose.
4-19 SECTION 4. This Act takes effect September 1, 1995.
4-20 SECTION 5. The importance of this legislation and the
4-21 crowded condition of the calendars in both houses create an
4-22 emergency and an imperative public necessity that the
4-23 constitutional rule requiring bills to be read on three several
4-24 days in each house be suspended, and this rule is hereby suspended.