5123-S

AN ACT Relating to automobile manufacturers' adjustment programs; and adding a new chapter to Title 19 RCW.

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

NEW SECTION. Sec. 1. Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.

(1) "Adjustment program" means a program or policy that expands or extends the consumer's warranty beyond its stated limit or under which a manufacturer offers to pay for all or a part of the cost of repairing, or to reimburse consumers for all or a part of the cost of repairing, a condition that may substantially affect vehicle durability, reliability, performance, or resale value other than service provided under a safety or emission-related recall campaign. "Adjustment program" does not include an adjustment made by a manufacturer in an isolated instance based on unique circumstances.

(2) "Consumer" means the purchaser, other than for purposes of resale, of a motor vehicle, a lessee of a motor vehicle, a person to whom the motor vehicle is transferred during the duration of an express warranty applicable to the motor vehicle, and a person entitled by the terms of the warranty to enforce the obligations of the warranty.

(3) "Manufacturer" means a person engaged in the business of constructing or assembling new motor vehicles or engaged in the business of importing new motor vehicles into the United States for the purpose of selling or distributing new motor vehicles to new motor vehicle dealers.

(4) "New motor vehicle" means a new self-propelled vehicle, excluding a new motorcycle, primarily designed for the transportation of persons or property over the public highways that, after original retail purchase or lease in this state, was initially registered in this state or for which a temporary motor vehicle license was issued pursuant to RCW 46.16.460, but does not include vehicles purchased or leased by a business as part of a fleet of ten or more vehicles. If the motor vehicle is a motor home, this chapter shall apply to the self-propelled vehicle and chassis, but does not include those portions of the vehicle designated, used, or maintained primarily as a mobile dwelling, office, or commercial space. "New motor vehicle" does not include trucks with nineteen thousand pounds or more gross vehicle weight rating. "New motor vehicle" includes a demonstrator or lease-purchase vehicle as long as a manufacturer's warranty was issued as a condition of sale.

(5) "New motor vehicle dealer" means a person who holds a dealer agreement with a manufacturer for the sale of new motor vehicles, who is engaged in the business of purchasing, selling, servicing, exchanging, or dealing in new motor vehicles, and who is licensed as a dealer by the state of Washington.

(6) "Service bulletin" means a document or other communication issued by a manufacturer pertaining to: (a) An adjustment program; or (b) to a condition that may substantially affect vehicle durability, reliability, or performance.

NEW SECTION. Sec. 2. A manufacturer shall establish a procedure in this state whereby a consumer (1) is informed of an adjustment program applicable to the consumer's motor vehicle and (2) is entitled to receive a copy of a service bulletin or index thereof upon request.

NEW SECTION. Sec. 3. Within ninety days of the adoption of an adjustment program a manufacturer shall notify, by first class mail, all consumers eligible under the program of the condition in the motor vehicle which is covered by an adjustment program and the principal terms and conditions of the adjustment program.

NEW SECTION. Sec. 4. Each manufacturer either directly or through its authorized agent shall provide the original purchaser of a new motor vehicle, at the time of purchase, a notice outlining the provisions of this chapter and the rights and remedies provided under this chapter. The written notice shall be deemed sufficient if done in substantially the following form:

"Sometimes (insert manufacturer's name) offers a special adjustment program to pay all or part of the cost of certain repairs beyond the terms of the warranty. Check with your new motor vehicle dealer to determine whether an adjustment program is applicable to your new motor vehicle."

NEW SECTION. Sec. 5. A dealer shall disclose to a consumer seeking repairs for a particular condition at its repair shop, the principal terms and conditions of the manufacturer's adjustment program covering the condition if the dealer has received a service bulletin concerning the adjustment program or otherwise has knowledge of it.

NEW SECTION. Sec. 6. A new motor vehicle dealer shall post in a prominent place on the business premises one or more signs, readily visible to customers, in the following form:

"CUSTOMER NOTICE OF ADJUSTMENT PROGRAMS

MANUFACTURERS FROM TIME TO TIME ISSUE SERVICE BULLETINS FOR PARTICULAR VEHICLES. A SPECIAL ADJUSTMENT PROGRAM MAY PAY ALL OR PART OF THE COST OF CERTAIN REPAIRS BEYOND THE TERMS OF THE WARRANTY. CHECK WITH YOUR DEALER TO DETERMINE WHETHER AN ADJUSTMENT PROGRAM IS APPLICABLE TO YOUR VEHICLE."

NEW SECTION. Sec. 7. A manufacturer shall establish and maintain a toll-free telephone system. The system shall provide that after obtaining the consumer's name and address and the vehicle information as is deemed necessary by the manufacturer, the manufacturer's telephone representative shall: (1) Inform the consumer of the existence of any adjustment program which may be applicable to the consumer's motor vehicle; and (2) advise the consumer that upon payment of the specified fee, if any, the consumer may obtain, by mail, a copy of service bulletins or an index thereof. The telephone representative shall furnish the consumer with the manufacturer's address to which requests for the service bulletins or index may be made.

NEW SECTION. Sec. 8. Manufacturers shall implement and follow procedures necessary to assure reimbursement of each consumer who is eligible under a particular adjustment program and who incurred expenses for repair of the condition subject to the program prior to acquiring knowledge of the program. The reimbursement shall be consistent with the terms and conditions of the particular program. A properly documented and complete claim for reimbursement under this chapter shall be made in writing to the manufacturer within two years of the date of the consumer's payment of repairs for the condition. If a claim is submitted which is not properly documented and complete, the two-year period shall be extended for a reasonable length of time necessary to document and complete the claim, but in no case beyond an additional sixty days. The manufacturer shall notify the consumer in writing within twenty-one business days of receiving a claim for reimbursement whether the claim will be allowed or denied. If the claim is denied, the specific reasons for the denial shall be stated in writing.

NEW SECTION. Sec. 9. The legislature finds that the practices covered by this chapter are matters vitally affecting the public interest for the purpose of applying the consumer protection act, chapter 19.86 RCW. Violations of this chapter are not reasonable in relation to the development and preservation of business. A violation of this chapter is an unfair or deceptive act in trade or commerce and an unfair method of competition for the purpose of applying the consumer protection act, chapter 19.86 RCW.

NEW SECTION. Sec. 10. Sections 1 through 9 of this act shall constitute a new chapter in Title 19 RCW.