By Swinford                                            H.B. No. 381

         75R1639 DWS-D                           

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to a warranty claim by a farm, industrial, or outdoor

 1-3     power equipment dealer.

 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 may not pay less than the

1-23     amount the dealer regularly charges for the labor, parts, and other

1-24     expenses involved in the work to a retail customer who does not

 2-1     assert a warranty.

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

 2-3     back, set off, or otherwise attempt to recover all or part of the

 2-4     amount of the claim unless:

 2-5                 (1)  the claim was fraudulent;

 2-6                 (2)  the work for which the claim was made was not

 2-7     properly performed or was unnecessary to comply with the warranty;

 2-8     or

 2-9                 (3)  the dealer did not substantiate the claim

2-10     according to the written requirements of the supplier in effect

2-11     when the claim arose.

2-12           SECTION 2.  Section 19.46, Business & Commerce Code, is

2-13     repealed.

2-14           SECTION 3.  The change in law made by this Act applies only

2-15     to  a warranty claim received by a supplier on or after the

2-16     effective date of this Act.  A  warranty claim received before the

2-17     effective date of this Act is governed by the law in effect when

2-18     the claim was received, and the former law is continued in effect

2-19     for that purpose.

2-20           SECTION 4.  This Act takes effect September 1, 1997.

2-21           SECTION 5.  The importance of this legislation and the

2-22     crowded condition of the calendars in both houses create an

2-23     emergency and an imperative public necessity that the

2-24     constitutional rule requiring bills to be read on three several

2-25     days in each house be suspended, and this rule is hereby suspended.

2-26                          COMMITTEE AMENDMENT NO. 1

2-27     Amend House Bill 381 Section 1(d) is amended to read:

 3-1           (d)  A supplier that pays a claim, including suppliers of

 3-2     electric engines or motors, may not pay less than the agreed [amount]

 3-3     hourly labor rate the dealer regularly charges for [the] labor and

 3-4     the costs the dealer pays for parts, and other expenses involved in

 3-5     the work to a retail customer who does not assert a warranty.

 3-6                                                                   Dukes