HOUSE BILL No. 5000 June 26, 1997, Introduced by Reps. Wallace, Baird, Gubow, Schauer, Basham, Martinez, Dobronski, DeHart, Hale, Anthony, Brater, Lowe, Whyman, Griffin, Leland, Gire, Callahan, Ciaramitaro, Willard, Hammerstrom and Cassis and referred to the Committee on Consumer Protection. A bill to amend 1986 PA 87, entitled "An act regarding warranties on new motor vehicles; to require certain repairs thereto; and to provide remedies for the failure to repair such vehicles," by amending sections 1, 3, 6, and 9 (MCL 257.1401, 257.1403, 257.1406, and 257.1409). THE PEOPLE OF THE STATE OF MICHIGAN ENACT: 1 Sec. 1. As used in this act: 2 (a) "Consumer" meansany1 OR MORE of the following:,3but does not include a lessee of a new motor vehicle:4 (i) A person who purchases OR LEASES a new motor vehicle for 5 personal, family, or household use and not for the purpose of 6 selling or leasing the new motor vehicle to another person. 7 (ii) A person who purchases OR LEASES less than 10 new motor 8 vehicles a year. 02505'97 JJG 2 1 (iii) A person who purchases OR LEASES 10 or more new motor 2 vehicles a year only if the vehicles are purchased OR LEASED for 3 personal, family, or household use. 4 (iv) Any other person entitled to enforce the provisions of 5 an express warranty pursuant to the terms of that warranty. 6 (b) "Manufacturer" meansanyA person who manufactures, 7 assembles, or is a distributor of new motor vehicles and includes 8 an agent of a manufacturer but does not include a new motor vehi- 9 cle dealer. 10 (c) "Manufacturer's express warranty" means an express war- 11 ranty as determined under the uniform commercial code,Act12No. 174 of the Public Acts of 1962, being sections 440.1101 to13440.11102 of the Michigan Compiled Laws1962 PA 174, 14 MCL 440.1101 TO 440.11102, offered by the manufacturer on a new 15 motor vehicle. 16 (d) "Motor vehicle" means a motor vehicle as defined in 17 section 33 of the Michigan vehicle code,Act No. 300 of the18Public Acts of 1949, being section 257.33 of the Michigan19Compiled Laws1949 PA 300, MCL 257.33, that is designed as a 20 passenger vehicle, but does not include a motor home, bus, truck 21 other than a pickup truck or van, oranyA vehicle designed to 22 travel on less than 4 wheels. 23 (e) "New motor vehicle" means a motor vehicle that is pur- 24 chased OR LEASED in this state or purchased OR LEASED by a resi- 25 dent of this state and is covered by a manufacturer's express 26 warranty at the time of purchase OR LEASE. 02505'97 3 1 (f) "New motor vehicle dealer" means a person OR THAT 2 PERSON'S AGENT who holds a dealer agreement for the sale OR LEASE 3 of new motor vehicles, who is engaged in the business of purchas- 4 ing, LEASING, selling, exchanging, or dealing in new motor vehi- 5 cles, and who has an established place of business in this state. 6; and an agent thereof.7 (g) "Person" means a natural person,ora sole proprietor- 8 ship, partnership, corporation, association, unit or agency of 9 government, trust, estate, or other legal entity. 10 (h) "Resident of this state" means as follows: 11 (i) For an individual,that theAN individual WHO is a 12 legal resident of this state. 13 (ii) For a sole proprietorship or partnership,that theA 14 sole proprietorship or partnershipwascreated pursuant to the 15 laws of this state and its main office is located in this state. 16 (iii) For a corporation,that theA corporation THAT is 17considered to bea domestic corporation and was created under 18 the laws of this state. 19 (iv) For an association,that theAN associationwas20 created pursuant to the laws of this state and its main office is 21 located in this state. 22 (v) For a unit or agency of government,that theA unit or 23 agencyisOF GOVERNMENT located in this state. 24 (vi) For a trust, estate, or other legal entity,that the25 A trust, estate, or other legal entitywascreated pursuant to 26 the laws of this state and THAT is located in this state. 02505'97 4 1 Sec. 3. (1) If a defect or conditionwhichTHAT was 2 reported to the manufacturer or new motor vehicle dealer pursuant 3 to section 2 continues to exist and the new motor vehicle has 4 beensubjectSUBJECTED to a reasonable number of repairs as 5 determined under subsection (3), the manufacturer shall within 30 6 dayshave the option toIF THE NEW MOTOR VEHICLE WAS PURCHASED 7 either replace the new motor vehicle with a comparable replace- 8 ment motor vehicle currently in production and acceptable to the 9 consumer or accept return of the vehicle and refund to the con- 10 sumer the full purchase price.includingIF THE NEW MOTOR VEHI- 11 CLE WAS LEASED, THE MANUFACTURER SHALL EITHER REPLACE THE NEW 12 MOTOR VEHICLE WITH A COMPARABLE REPLACEMENT MOTOR VEHICLE CUR- 13 RENTLY IN PRODUCTION ACCEPTABLE TO THE CONSUMER OR SHALL REFUND 14 THE FULL AMOUNT OF THE LEASE PRICE PAID BY THE CONSUMER. THE 15 FULL PURCHASE PRICE OR LEASE PRICE INCLUDES the cost of any 16 options or other modifications installed or made by or for the 17 manufacturer, and the amount of all other charges made by or for 18 the manufacturer, less a reasonable allowance for the consumer's 19 use of the vehicle not exceeding 10 centsperFOR EACH mile 20 drivenatUP TO the time of the initial report of the same 21 defect or conditions or 10% of the purchase OR LEASE price of the 22 vehicle, whichever is less, and less an amount equal to any 23 appraised damage that is not attributable to normal use or to the 24 defect or condition. A reasonable allowance for use is that 25 amount directly attributable to use by the consumer and any pre- 26 vious consumer prior to his or her first report of a defect or 27 condition that impairs the use or value of the new motor vehicle 02505'97 5 1 to the manufacturer, its agents, or the new motor vehicle 2 dealer.WheneverIF a vehicle is replaced or refunded under 3 the provisions of this section,in those instances in whichIF 4 towing services and rental vehicles were not made available with- 5 out cost to the consumer, the manufacturer shall also reimburse 6 the consumer for those towing costs and reasonable costs for a 7 comparable rental vehicle that were incurred as a direct result 8 of the defect or condition. 9 (2) The provisions of this actshallDO not affect the 10 obligations of a consumer under a loan or sales contract or the 11 secured interest ofanyA secured party. The secured party 12 shall consent to the replacement of the security interest with a 13 corresponding security interest on a replacement motor vehicle 14whichTHAT is accepted by the consumer in exchange for the 15 motor vehicle having a defect or condition pursuant to subsection 16 (1), if the replacement motor vehicle is comparable in value to 17 the original motor vehicle. If for any reason the security 18 interest in the new motor vehicle having a defect or condition 19 pursuant to subsection (1) is not able to be replaced with a cor- 20 responding security interest on a new motor vehicle accepted by 21 the consumer, the consumer shall accept a refund.RefundsA 22 REFUND required under this subsection or subsection (1) shall be 23 made to the consumer and the secured party, if any, as their 24 interests exist at the time the refund is to be made. 25 (3) It shall be presumed that a reasonable number of 26 attempts have been undertaken to repairanyA defect or 27 condition if 1 of the following occurs: 02505'97 6 1 (a) The same defect or condition that substantially impairs 2 the use or value of the new motor vehicle to the consumer has 3 been subject to repair a total of 4 or more times by the manufac- 4 turer or new motor vehicle dealer and the defect or condition 5 continues to exist. Any repair performed on the same defect made 6 pursuant to subsection (4) shall be included in calculating the 7 number of repairs under this section. The consumer or his or her 8 representative,prior toBEFORE availing himself or herself of 9 a remedy provided under subsection (1), and any time after the 10 third attempt to repair the same defect or condition, shall give 11 written notification, by return receipt service, to the manufac- 12 turer of the need for repair of the defect or condition in order 13 to allow the manufacturer an opportunity to cure the defect or 14 condition. The manufacturer shall notify the consumer as soon as 15 reasonably possible of a reasonably accessible repair facility. 16 After delivery of the vehicle to the designated repair facility, 17 the manufacturershall haveHAS 5 business days to repair the 18 defect or condition. 19 (b) The new motor vehicle is out of service because of 20 repairs for a total of 30 or more days or parts of days during 21 the term of the manufacturer's express warranty, or within 1 year 22 from the date of delivery to the original consumer, whichever is 23 earlier.It shall be the responsibility of theTHE consumer, 24 or his or her representative,prior toBEFORE availing himself 25 or herself of a remedy provided under subsection (1), and after 26 the vehicle has been out of service for at least 25 days in a 27 repair facility,toSHALL give written notification by return 02505'97 7 1 receipt service to the manufacturer of the need for repair of the 2 defect or condition in order to allow the manufacturer an oppor- 3 tunity to cure the defect or condition. The manufacturer shall 4 notify the consumer as soon as reasonably possible of a reason- 5 ably accessible repair facility. After delivery of the vehicle 6 to the designated repair facility, the manufacturershall have7 HAS 5 business days to repair the defect or condition. 8 (4)Any repairsA REPAIR required to be made under this 9 act shall be made even if therepairs cannot be performed until10after the expiration ofREPAIR IS CONTRARY TO the manufacturer's 11 express warranty. 12 (5) The term of an express warranty, and the 1-year, 30-day, 13 and 5-day periods of time provided for in this section shall be 14 extended because repair services were not available to the con- 15 sumer because of war,;invasion,;strike,; orfire, 16 flood, or other natural disaster. 17 Sec. 6. This act does not apply toanyA defect or condi- 18 tion that is the result of either of the following: 19 (a)AnyA modificationor modificationsnot installed or 20 made by or for the manufacturer. 21 (b) Abuse or neglect of the new motor vehicle or damage due 22 to an accidentwhichTHAT occurred after the new motor vehicle 23 was purchased OR LEASED by the consumer. 24 Sec. 9. (1) This actshall applyAPPLIES to all new motor 25 vehicles that are sold to the original consumer on or afterthe26effective date of this actJUNE 25, 1986. 02505'97 8 1 (2) THIS ACT APPLIES TO ALL NEW MOTOR VEHICLES THAT ARE 2 LEASED BY THE ORIGINAL CONSUMER ON OR AFTER THE EFFECTIVE DATE OF 3 THE AMENDATORY ACT THAT ADDED THIS SUBSECTION. 02505'97 Final page. JJG