HOUSE BILL REPORT
HB 703
BYRepresentatives Sayan, Wang, Patrick, R. King, O'Brien, Fisch, Fisher, Walker, Cole, Belcher, Brekke, Hine, Grimm, Rayburn, Sprenkle, Leonard, Gallagher, Braddock, Armstrong, Vekich, Bristow, Madsen, Dellwo, Day, Wineberry, S. Wilson, Brough, Basich, May and Winsley
Creating enforcement provisions for new motor vehicle warranties.
House Committe on Commerce & Labor
Majority Report: The substitute bill be substituted therefor and the substitute bill do pass. (9)
Signed by Representatives Wang, Chair; Cole, Vice Chair; Fisch, Fisher, R. King, O'Brien, Patrick, Sayan and C. Smith.
House Staff:Joan Elgee (786-7166)
AS REPORTED BY COMMITTEE ON COMMERCE & LABOR MARCH 5, 1987
BACKGROUND:
In 1983, the legislature established procedures for enforcement of express warranties on new motor vehicles. An express warranty is a written statement arising out of the sale of a motor vehicle.
If the vehicle fails to conform to the warranty during its term or within a year from delivery, the manufacturer or dealer shall begin repairs. After a reasonable number of attempts to repair the nonconformity, the manufacturer must repurchase the vehicle from the buyer at the original purchase price, minus an amount based on the buyer's use. A reasonable number of attempts is defined as four or more repair attempts of the same nonconformity or if the vehicle has been out of service more than 30 days since delivery.
If the buyer does not choose repurchasing, he or she may choose the assistance of an informal dispute resolution procedure established by the manufacturer. Manufacturers are not required to establish such procedures, but if they do, the procedures must substantially comply with federal standards.
SUMMARY:
SUBSTITUTE BILL: Rights and procedures relating to motor vehicle warranties are modified. "New motor vehicle" is redefined to exclude motorcycles and trucks with 19,000 pounds or more gross weight. "Warranty" is expanded to include any affirmation of fact or promise, including implied warranties, made by the manufacturer.
The manufacturer or dealer shall attempt repairs of any nonconformity to the warranty during the warranty period. "Nonconformity" is defined as a defect, serious safety defect, or condition that substantially impairs the use, value, or safety of a new motor vehicle. The "warranty period" is two years or 24,000 miles, whichever occurs first.
If a nonconformity remains uncorrected after a reasonable number of attempts to repair, the manufacturer shall replace or repurchase the vehicle. The repurchase price is the original price less an amount determined by formula for the consumer's use. A reasonable number of attempts shall be deemed to have occurred if four repair attempts have been made for the same nonconformity, two attempts have been made for a serious safety defect, or the vehicle has been out-of-service for 30 calendar days.
The attorney general shall establish one or more new motor vehicle arbitration boards to settle disputes under the chapter. Each board shall consist of three members appointed by the attorney general, only one of whom may be directly involved in the manufacture, distribution, sale or service of any motor vehicle. The arbitration boards have the authority to conduct hearings, and may require replacement or repurchase of the vehicle. The consumer or the manufacturer may appeal the board's decision to superior court on limited grounds. Additional procedures are set forth, including penalties on the manufacturer for failure to comply with the board's decision.
Resales of vehicles returned must be accompanied by an identification of the nonconformity.
The attorney general is directed to compile statistics and report to the legislature. The manufacturer or dealer shall provide specified information to the consumer.
A $5.00 fee shall be collected upon the sale of a new motor vehicle, to be used for purposes of the act. The fee begins June 1, 1987. Other provisions go into effect on January 1, 1988.
A violation of the chapter constitutes a consumer protection act violation.
SUBSTITUTE BILL COMPARED TO ORIGINAL: Motorcycles and trucks 19,000 pounds or more are excluded from the definition of new motor vehicle. Provisions stating that a dealer is an "authorized agent" of the manufacturer and requiring the dealer to contact the manufacturer after the second same repair are deleted. The formula for compensation for the consumer's use is modified.
A provision is added allowing the arbitration board to reject a dispute filed in bad faith. Penalties are added for a manufacturer's failure to comply with a board decisions. The fee upon sale of a new motor vehicle is raised from $2.00 to $5.00.
Fiscal Note: Requested March 6, 1987.
Effective Date:Section 9 of the bill contains an emergency clause and takes effect immediately; Sections 2 through 8 and 10 through 12 take effect January 1, 1988.
House Committee ‑ Testified For: Phillip Nowicki, Syracuse University; John Lea, consumer; Milt Harnden, Autoclub of Washington (with concerns).
House Committee - Testified Against: Jim Austin, Motor Vehicles Manufacturers Association; Lee Ridgeway, General Motors; Janet Cunningham and others, Washington State Auto Dealers Association.
House Committee - Testimony For: Current arbitration procedures established by the manufacturers are ineffective. States with state-run arbitration show a much higher rate of consumer satisfaction. The bill will encourage better communication between manufacturers/dealers and consumers.
House Committee - Testimony Against: Consumers are being treated fairly under the present procedures. An examination of current shortcomings should be undertaken before an entirely new bureaucracy is established. The warranty requirements will make vehicles more expensive in Washington.