By Swinford, Kubiak                                    H.B. No. 381

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to warranties and warranty claims concerning farm,

 1-3     industrial, or outdoor power equipment.

 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-5           SECTION 1.  Subchapter B, Chapter 19, Business & Commerce

 1-6     Code, is amended by adding Section 19.28 to read as follows:

 1-7           Sec. 19.28.  WARRANTY CLAIM.  (a)  This section applies to a

 1-8     warranty claim submitted by a dealer:

 1-9                 (1)  while the dealer agreement is in effect; or

1-10                 (2)  after the termination of the dealer agreement, if

1-11     the claim is for work performed before the effective date of the

1-12     termination.

1-13           (b)  Not later than the 45th day after the date a supplier

1-14     receives a warranty claim from a dealer, the supplier shall accept

1-15     or reject the claim.  A claim not rejected before that deadline is

1-16     deemed accepted.

1-17           (c)  Not later than the 30th day after the date the claim is

1-18     accepted or rejected, the supplier shall:

1-19                 (1)  pay an accepted claim; or

1-20                 (2)  send the dealer written notice of the grounds for

1-21     rejection of a rejected claim.

1-22           (d)  A supplier that pays a claim, including suppliers of

1-23     electric engines or motors, may not pay less than the agreed hourly

1-24     labor rate the dealer regularly charges for labor and the list

 2-1     price the dealer pays for parts, and other expenses involved in the

 2-2     work to a retail customer who does not assert a warranty.

 2-3           (e)  After payment of a claim, a supplier may not charge

 2-4     back, set off, or otherwise attempt to recover all or part of the

 2-5     amount of the claim unless:

 2-6                 (1)  the claim was fraudulent;

 2-7                 (2)  the work for which the claim was made was not

 2-8     properly performed or was unnecessary to comply with the warranty;

 2-9     or

2-10                 (3)  the dealer did not substantiate the claim

2-11     according to the written requirements of the supplier in effect

2-12     when the claim arose.

2-13           (f)  A dealer or supplier authorized to sell new farm,

2-14     industrial, or outdoor power equipment shall give the purchaser a

2-15     written warranty agreement including replacement or cash refund.

2-16     If the dealer determines the equipment cannot be made usable, the

2-17     manufacturer is liable to the purchaser for the replacement or cash

2-18     refund.

2-19           SECTION 2.  Section 19.46, Business & Commerce Code, is

2-20     repealed.

2-21           SECTION 3.  The change in law made by this Act applies only

2-22     to  a warranty claim received by a supplier on or after the

2-23     effective date of this Act.  A  warranty claim received before the

2-24     effective date of this Act is governed by the law in effect when

2-25     the claim was received, and the former law is continued in effect

2-26     for that purpose.

2-27           SECTION 4.  This Act takes effect September 1, 1997.

 3-1           SECTION 5.  The importance of this legislation and the

 3-2     crowded condition of the calendars in both houses create an

 3-3     emergency and an imperative public necessity that the

 3-4     constitutional rule requiring bills to be read on three several

 3-5     days in each house be suspended, and this rule is hereby suspended.