AN ACT Relating to home electronic and appliance consumer warranties; adding a new chapter to Title 19 RCW; providing an effective date; and declaring an emergency.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. The legislature finds that electronic equipment manufacturers, as a matter of practice, warrant their equipment against certain defects. The warranties may be honored by retailers of the manufacturers' products as part of their contractual obligation or by independent maintenance and service facilities. The legislature also finds that consumers do not always receive prompt, complete service that returns the product to its working condition at the time of purchase because manufacturers cannot always supply the necessary parts promptly or at a price that keeps the warranty service within the retailer's cost of doing business. Because of these problems, some of the service costs are transferred to customers seeking service without warranties. The legislature further finds that a strong competitive market requires manufacturers and sellers who fully stand behind their products by complying with the spirit of the warranty. The legislature declares that it is in the public interest to establish certain elements as characteristic of express electronic equipment warranties to protect the consumer from dilatory and unfair practices and from manufacturers discontinuing the manufacture of replacement parts within the time period that can be reasonably anticipated as necessary to effect repairs.

NEW SECTION. Sec. 2. For the purposes of this chapter the following definitions apply.

(1) "Buyer" or "retail buyer" means an individual who buys electronic equipment from a person engaged in the business of manufacturing, distributing, or selling such goods at retail.

(2) "Distributor" means a person that stands between the manufacturer and the retail seller in purchases, consignments, or contracts for sale of electronic equipment.

(3) "Independent repair or service facility" or "independent service dealer" means a person or business, not an employee or subsidiary of a manufacturer or distributor, that engages in the business of servicing and repairing consumer goods.

(4) "Retailer," "seller," or "retail seller" means a person who engages in the business of selling electronic goods to retail buyers. (5) "Person" means an individual, partnership, corporation, association, or other legal entity.

(6) "Home electronic equipment" means a television/monitor, radio, antenna rotator, audio or video recorder or playback equipment, video camera, video game, if it is normally used or sold for personal, family, or household purposes. The term includes any electronic accessory that is normally used or sold with a home electronic product for one of those purposes. The term excludes any single product with a wholesale price to the retail seller of less than one hundred twenty-five dollars.

(7) "Home appliance" means a refrigerator, freezer, range, microwave or convection oven, washer, dryer, dishwasher, garbage disposal, trash compactor, or room air conditioner normally used or sold for personal, family, or household purposes. The term excludes any single product with a wholesale price to the retail seller of less than one hundred twenty five dollars.

(8) "Parts" means individual components of assemblies or circuit boards.

(9) "Literature" means service literature only.

NEW SECTION. Sec. 3. In addition to the requirements of RCW 62A.2-313 every warranty shall state that the warranty period shall be extended for the number of days that the product has been in the repair facility for warranty repairs. If a defect exists within the warranty period and the buyer takes the product to a repair facility for servicing, the warranty shall not expire until the defect has been fixed. The warranty period shall also be extended if the repairs fail within ten days after they were completed. If, after four repair attempts, the defect has not been fixed, the buyer may return the product within sixty days of the completion of the fourth repair for a replacement or refund, subject to the deduction of a reasonable charge for use. This time extension does not affect the protections or remedies the buyer has under other laws.

NEW SECTION. Sec. 4. Every work order or repair invoice for warranty repairs or service shall clearly and conspicuously incorporate in ten-point boldface type the following statement either on the face or the reverse side of the work order or repair invoice, or on an attachment to the work order or repair invoice:

A buyer of this product in this state has the right to have this product serviced or repaired during the warranty period. The warranty period is extended for the number of whole days that the product has been out of the buyer's hands for warranty repairs if the buyer takes the product to the repair facility prior to the warranty expiration date. The warranty period is also extended if the warranty repairs have not been performed because parts are not available from the manufacturer, or if the warranty repairs fail within ten days after they were completed. If, after four repair attempts the defect has not been fixed, the buyer may return the product within sixty days of the completion of the fourth repair attempt for a replacement or a refund, subject to the deduction of a reasonable charge for use. This time extension does not affect the protections or remedies the buyer had under other laws.

NEW SECTION. Sec. 5. If a manufacturer of home electronic equipment and appliances sold in this state makes an express warranty on such equipment or appliance, the manufacturer shall maintain sufficient service and repair facilities in this state that are reasonably close to all areas in which its electronic equipment and appliances are sold, except for mail order businesses, or may designate and authorize independent repair or service facilities in this state that are reasonably close to all areas in which its electronic appliances are sold, to carry out the terms of the warranties. As a means of complying with this section, a manufacturer may enter into warranty service contracts with independent service and repair facilities.

NEW SECTION. Sec. 6. A manufacturer entering into a warranty service contract with an independent service and repair facility may include a fixed schedule of rates to be charged for warranty service or warranty repair work. However, the rates fixed by these contracts shall include the actual cost of service and repair, plus a twenty percent markup on part costs and shipping costs, and a reasonable profit on labor. The rates established between the manufacturer and the independent service and repair facility shall not preclude a good faith discount that is reasonably related to reduced credit and general overhead cost factors arising from the manufacturer's payment of warranty charges direct to the independent service and repair facility. The discount may consider all extra services the manufacturer provides to the independent authorized service dealer. The warranty service contracts authorized by this section may not cover more than one year, and may be renewed only by a separate, new contract or letter of agreement between the manufacturer and the independent service and repair facility. The manufacturer who is a party to a warranty service contract is only liable to the other party for repairs performed under warranty.

NEW SECTION. Sec. 7. Every manufacturer contracting with an independent facility for maintenance and repair of electronic or appliance products shall make service literature and replacement parts available to effect repairs within thirty days of the request from the service repair facility. However, the thirty-day requirement may be suspended during a period of a national emergency or natural disaster. If the manufacturer fails to supply the necessary part or literature within thirty days of the service repair facility's request, the manufacturer shall replace the nonworking equipment or appliance with new equipment or a new appliance upon the owner's request. Replacement parts and literature for products with a wholesale price to retailers of not less than one hundred twenty-five dollars and not more than one hundred seventy-five dollars and ninety-nine cents, shall be available at the service dealer's wholesale cost to all established independent service and repair facilities who service the products, whether or not under contract to provide warranty services, for three years after the date the product model or type was last manufactured, regardless of whether the three-year period exceeds the warranty period for the product. Replacement parts and literature for products with a wholesale price to retailers of not less than one hundred seventy-six dollars, shall be available, at the service dealer's wholesale cost, to all established independent service and repair facilities who service the products, whether or not under contract to provide warranty services, for seven years after the date the product model or type was last manufactured, regardless of whether the seven-year period exceeds the warranty period for the product.

NEW SECTION. Sec. 8. Every manufacturer making express warranties whose consumer goods are sold in this state shall be liable as prescribed in this section to any authorized independent service center that performs services or incurs obligations under the express warranties that accompany the manufacturer's consumer goods. The amount of the liability shall be an amount equal to the actual and reasonable costs of the service and repair, including cost plus twenty percent on parts and any reasonable cost of transporting the goods or parts, plus a reasonable profit on labor, which shall not preclude a good faith discount as described in section 6 of this act. There is a rebuttable presumption affecting the burden of producing evidence that the reasonable cost of service or repair is an amount equal to that which is charged by the independent serviceman for like services or repairs rendered to service or repair customers who are not entitled to warranty protection. Any waiver of the liability of a manufacturer shall be void and unenforceable.

NEW SECTION. Sec. 9. A dispute initiated by either party arising from cancellation of a warranty service center contract that cannot be resolved by the parties to the contract must be presented to the American arbitration association or a dispute resolution center operated under chapter 7.75 RCW for third-party committee mediation. Contracts cannot be canceled on the basis of an allegation of nonperformance of contractual obligations without a hearing by the committee. Only after a hearing and a showing of a good faith attempt at resolution may a disputant file a legal action. The statute of limitations controlling filing legal action to resolve a contract dispute shall be tolled for a period of six months or until the third-party mediator takes a final action, either resolving the dispute or declaring it unresolvable, whichever comes first.

NEW SECTION. Sec. 10. Any protections or remedies in this chapter do not preclude recovery under the consumer protection act, chapter 19.86 RCW.

NEW SECTION. Sec. 11. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION. Sec. 12. Sections 1 through 11 of this act shall constitute a new chapter in Title 19 RCW.

NEW SECTION. Sec. 13. This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and shall take effect July 1, 1991.