1-1 By: Swinford, Kubiak (Senate Sponsor - Madla) H.B. No. 381
1-2 (In the Senate - Received from the House April 16, 1997;
1-3 April 18, 1997, read first time and referred to Committee on
1-4 Economic Development; May 16, 1997, reported adversely, with
1-5 favorable Committee Substitute by the following vote: Yeas 8, Nays
1-6 0; May 16, 1997, sent to printer.)
1-7 COMMITTEE SUBSTITUTE FOR H.B. No. 381 By: Sibley
1-8 A BILL TO BE ENTITLED
1-9 AN ACT
1-10 relating to farm, industrial, off-road construction, or outdoor
1-11 power equipment.
1-12 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-13 SECTION 1. The heading of Chapter 19, Business & Commerce
1-14 Code, is amended to read as follows:
1-15 CHAPTER 19. FARM, INDUSTRIAL, OFF-ROAD CONSTRUCTION,
1-16 AND OUTDOOR POWER EQUIPMENT DEALER AGREEMENTS
1-17 SECTION 2. Sections 19.01(5) and (8), Business & Commerce
1-18 Code, are amended to read as follows:
1-19 (5) "Dealer" means a person in the business of the
1-20 retail sale of equipment. [The term does not include a person
1-21 whose principal business is the sale of off-road construction
1-22 equipment.]
1-23 (8) "Equipment" means farm tractors, farm implements,
1-24 utility tractors, industrial tractors, off-road construction
1-25 equipment, and outdoor power equipment and the attachments to or
1-26 repair parts for those items.
1-27 SECTION 3. Subchapter B, Chapter 19, Business & Commerce
1-28 Code, is amended by adding Section 19.28 to read as follows:
1-29 Sec. 19.28. WARRANTY CLAIM. (a) This section applies to a
1-30 warranty claim submitted by a dealer:
1-31 (1) while the dealer agreement is in effect; or
1-32 (2) after the termination of the dealer agreement, if
1-33 the claim is for work performed before the effective date of the
1-34 termination.
1-35 (b) Not later than the 30th day after the date a supplier
1-36 receives a warranty claim from a dealer, the supplier shall accept
1-37 or reject the claim. A claim not rejected before that deadline is
1-38 deemed accepted.
1-39 (c) Not later than the 30th day after the date the claim is
1-40 accepted or rejected, the supplier shall:
1-41 (1) pay an accepted claim; or
1-42 (2) send the dealer written notice of the grounds for
1-43 rejection of a rejected claim.
1-44 (d) A supplier that pays a claim, including a supplier of an
1-45 electric engine or motor, may not pay less than the hourly labor
1-46 rate and other expenses involved in the work that the dealer
1-47 regularly charges to a retail customer who does not assert a
1-48 warranty and the dealer's net price plus 15 percent for parts. The
1-49 number of hours of labor claimed may not exceed 1-1/2 times the
1-50 supplier's recommended hours for the repair involved.
1-51 (e) After payment of a claim, a supplier may not charge
1-52 back, set off, or otherwise attempt to recover all or part of the
1-53 amount of the claim unless:
1-54 (1) the claim was fraudulent;
1-55 (2) the work for which the claim was made was not
1-56 properly performed or was unnecessary to comply with the warranty;
1-57 or
1-58 (3) the dealer did not substantiate the claim
1-59 according to the written requirements of the supplier in effect
1-60 when the claim arose.
1-61 (f) A dealer or supplier authorized to sell new farm,
1-62 industrial, or outdoor power equipment shall give the purchaser a
1-63 written warranty agreement including replacement or cash refund.
1-64 If the dealer determines the equipment cannot be made usable, the
2-1 manufacturer is liable to the purchaser for the replacement or cash
2-2 refund.
2-3 SECTION 4. Section 19.43(a), Business & Commerce Code, is
2-4 amended to read as follows:
2-5 (a) If on termination of a dealer agreement the dealer
2-6 delivers to the supplier or a person designated by the supplier the
2-7 inventory that was purchased from the supplier and that is held by
2-8 the dealer on the date of the termination, the supplier shall pay
2-9 to the dealer:
2-10 (1) the dealer cost of new, unsold, undamaged, and
2-11 complete farm tractors, farm implements, utility tractors,
2-12 industrial tractors, forklifts, material-handling equipment,
2-13 outdoor power equipment, off-road construction equipment, and
2-14 attachments returned by the dealer;
2-15 (2) an amount equal to 85 percent of the current price
2-16 of new, undamaged repair parts returned by the dealer; and
2-17 (3) an amount equal to an additional five percent of
2-18 the current price of new, undamaged repair parts returned by the
2-19 dealer, unless the supplier performs the handling, packing, and
2-20 loading of the parts, in which case no additional amount is
2-21 required under this subdivision.
2-22 SECTION 5. Section 19.46, Business & Commerce Code, is
2-23 repealed.
2-24 SECTION 6. The change in law made by this Act applies only
2-25 to a warranty claim received by a supplier on or after the
2-26 effective date of this Act. A warranty claim received before the
2-27 effective date of this Act is governed by the law in effect when
2-28 the claim was received, and the former law is continued in effect
2-29 for that purpose.
2-30 SECTION 7. This Act takes effect September 1, 1997.
2-31 SECTION 8. The importance of this legislation and the
2-32 crowded condition of the calendars in both houses create an
2-33 emergency and an imperative public necessity that the
2-34 constitutional rule requiring bills to be read on three several
2-35 days in each house be suspended, and this rule is hereby suspended.
2-36 * * * * *