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 30th 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 a supplier of an
1-23 electric engine or motor, may not pay less than the hourly labor
1-24 rate and other expenses involved in the work that the dealer
2-1 regularly charges to a retail customer who does not assert a
2-2 warranty and the dealer's net price plus 15 percent for parts. The
2-3 number of hours of labor claimed may not exceed 1-1/2 times the
2-4 supplier's recommended hours for the repair involved.
2-5 (e) After payment of a claim, a supplier may not charge
2-6 back, set off, or otherwise attempt to recover all or part of the
2-7 amount of the claim unless:
2-8 (1) the claim was fraudulent;
2-9 (2) the work for which the claim was made was not
2-10 properly performed or was unnecessary to comply with the warranty;
2-11 or
2-12 (3) the dealer did not substantiate the claim
2-13 according to the written requirements of the supplier in effect
2-14 when the claim arose.
2-15 (f) A dealer or supplier authorized to sell new farm,
2-16 industrial, or outdoor power equipment shall give the purchaser a
2-17 written warranty agreement including replacement or cash refund.
2-18 If the dealer determines the equipment cannot be made usable, the
2-19 manufacturer is liable to the purchaser for the replacement or cash
2-20 refund.
2-21 SECTION 2. Section 19.46, Business & Commerce Code, is
2-22 repealed.
2-23 SECTION 3. The change in law made by this Act applies only
2-24 to a warranty claim received by a supplier on or after the
2-25 effective date of this Act. A warranty claim received before the
2-26 effective date of this Act is governed by the law in effect when
2-27 the claim was received, and the former law is continued in effect
3-1 for that purpose.
3-2 SECTION 4. This Act takes effect September 1, 1997.
3-3 SECTION 5. The importance of this legislation and the
3-4 crowded condition of the calendars in both houses create an
3-5 emergency and an imperative public necessity that the
3-6 constitutional rule requiring bills to be read on three several
3-7 days in each house be suspended, and this rule is hereby suspended.
_______________________________ _______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 381 was passed by the House on April
15, 1997, by a non-record vote; that the House refused to concur in
Senate amendments to H.B. No. 381 on May 22, 1997, and requested
the appointment of a conference committee to consider the
differences between the two houses; and that the House adopted the
conference committee report on H.B. No. 381 on May 29, 1997, by a
non-record vote.
_______________________________
Chief Clerk of the House
I certify that H.B. No. 381 was passed by the Senate, with
amendments, on May 20, 1997, by a viva-voce vote; at the request of
the House, the Senate appointed a conference committee to consider
the differences between the two houses; and that the Senate adopted
the conference committee report on H.B. No. 381 on May 29, 1997, by
a viva-voce vote.
_______________________________
Secretary of the Senate
APPROVED: _____________________
Date
_____________________
Governor