FINAL BILL REPORT

SSB 5502

                                  C 344 L 87

BYSenate Committee on Commerce & Labor (originally sponsored by Senators Rinehart, Warnke, Halsan, Lee, Wojahn, Talmadge, Tanner, Bottiger, Bailey, Smitherman, Vognild, Williams, Garrett, Stratton and Moore)

Creating enforcement provisions for new motor vehicle warranties.

Senate Committee on Commerce & Labor

House Committe on Commerce & Labor

Rereferred House Committee on Ways & Means/Appropriations

SYNOPSIS AS ENACTED

BACKGROUND:

In 1983 the Legislature established standards regarding express warranties of new motor vehicles.  An express warranty is a written statement arising out of the sale of the motor vehicle.  If a manufacturer provides an express warranty, then it must adhere to the current law.

After a reasonable number of attempts to conform the vehicle to the express warranty, the manufacturer must repurchase the vehicle from the buyer at the original purchase price, minus the amount based on the buyer's use.  A reasonable number of attempts is defined as four or more repair attempts of the same defect.

If the buyers do not choose repurchasing, they may choose the assistance of an informal dispute resolution process established by the manufacturer.  Manufacturers are not required to establish such a process, but if they do, then their processes must substantially comply with federal standards.

SUMMARY:

Any self-propelled motor vehicle for which a warranty is provided is covered, except motorcycles, trucks with 19,000 pounds or more gross vehicle weight rating, and a fleet of ten or more vehicles.  The self-propelled vehicle and chassis of motor homes are covered, but not the housing structure.  Vehicles must be purchased and registered in Washington.

Express warranty is redefined to include written or oral affirmations of fact by the manufacturer that become the basis of the bargain for a new motor vehicle.  Implied warranties are included.  The maximum warranty coverage of the law is 24 months or 24,000 miles, whichever occurs first.

If a nonconformity remains uncorrected after a reasonable number of attempts to repair, the manufacturer must replace the new motor vehicle with a comparable replacement or repurchase from the buyer.  The repurchase price is the original price paid, minus a reasonable offset for buyer use, plus collateral charges and incidental costs.  A nonconformity is a defect or condition that substantially impairs the use, value or safety of a new motor vehicle.

Reasonable number of attempts to repair is four times for the same nonconformity and two times for a serious safety defect.  If the defect is covered by a written warranty, at least one repair must occur during the warranty period, which must be not less than 12 months or 12,000 miles.

The Attorney General (AG) must contract with private entities to establish new motor vehicle arbitration boards to settle disputes between consumers and manufacturers.  The Attorney General develops standards for the private boards which include the right to present testimony, to cross-examine witnesses, to be represented by an attorney and arbitration procedures.  Applications for arbitration are screened by the AG, who will provide information to consumers on their rights and remedies and may make determinations on the dispute's eligibility for arbitration. 

A consumer may choose to first submit a dispute to an arbitration board established by a manufacturer that substantially complies with federal law.  This option is available only until December 31, 1988.

If the AG is unable to contract with private entities that comply with applicable state standards by January 1, 1988, the AG shall establish one or more new motor vehicle arbitration boards that are staffed by the AG.

Both the consumer and manufacturer may appeal and request a new trial on the arbitration board decision.  If the manufacturer appeals, the court may require the manufacturer to post security for the consumer's financial loss due to the passage of time for review.  If the manufacturer brought the appeal without good cause, the court must double the damage award and may treble it.

A fee of $5 will be collected from buyers of new motor vehicles beginning on June 1, 1987 to establish the funding for the arbitration boards.

By January 1, 1990, the appropriate Senate and House committees shall review the effectiveness of the remedies for consumers and the role of the Attorney General.  By January 1, 1992, the Legislative Budget Committee shall conduct a sunset review and report to the Legislature.  The law terminates in June 1992 if not extended.

VOTES ON FINAL PASSAGE:

      Senate    45     2

      House 88   7 (House amended)

      Senate    47     2 (Senate concurred)

EFFECTIVE:June 1, 1987 (Section 9)

            July 26, 1987

            January 1, 1988 (Sections 2-8, 10-12, 14-16)