GEC H.B. 381 75(R)    BILL ANALYSIS


BUSINESS & INDUSTRY
H.B. 381
By: Swinford
3-25-97
Committee Report (Amended)



BACKGROUND 


Currently, farm, industrial and outdoor power equipment is sold by a
dealer but the manufacturer warranties the product for a period of time.
After using the product for a period of time under the warranty, if the
buyer has a problem the manufacturer is contacted who in turn sends the
buyer to an authorized service center.  These service centers are often
right back to a dealer who offers the repairs.  These repair centers have
published hourly rates for repair usually posted within the store and is
included in the final cost to the customer for the repair as "labor plus
parts."  The repair center fixes the equipment under warranty and bills
the manufacturer for the repair.  The manufacturer, usually located in
another state, often times will not pay the published labor rate yet
requires the store to repair the product.   


PURPOSE
As proposed, H.B. 381 amends Subchapter B, Chapter 19, Business & Commerce
Code by requiring the manufacturer to pay the entire cost associated with
fixing a warranty claim. 

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. 

SECTION BY SECTION ANALYSIS
SECTION 1.  Amends Subchapter B, Chapter 19, Business & Commerce Code by
adding  
  Section 19.28  as follows:

 (a)  Requires that the dealer agreement must be in effect or the work was
performed  
  before termination of the agreement.

 (b)  Provides 30 days for the supplier to accept or reject a warranty
claim from a dealer. 

 (c)  Requires payment from the supplier to the dealer within 30 days of
the date of the  
 claim or written notice why the claim was rejected.

 (d)  Requires the supplier to pay no less than the amount the dealer
regularly charges for  
 labor, parts, and other expenses for the work done.
 
 (e)  Provides recourse for the supplier if the claim was fraudulent or
the work was done  
 improperly or unnecessarily.


SECTION 2.  Repeals Sec. 19.46, Business & Commerce Code.

SECTION 3.  The change in law made by this Act applies only to warranty
claims on or after the  
 effective date of this Act.  All other warranty claims are governed by
the law in effect at  
 the time the claim was received.

 SECTION 4.  Effective date of September 1, 1997.

SECTION 5.  Emergency clause.




EXPLANATION OF AMENDMENTS

COMMITTEE AMENDMENT #1 amends the new Section 19.28 of Subchapter B,
Chapter 19 of the Business and Commerce Code.  This amendment expands the
term or definition of suppliers, to include suppliers of electric engines
or motors.  It also sets the minimum warranty claim amount at the agreed
upon hourly labor rate that the dealer regularly charges and the costs the
dealer pays for parts.