HF 1291

as introduced - 91st Legislature (2019 - 2020) Posted on 02/18/2019 02:18pm

A bill for an act
relating to commerce; modifying new motor vehicle warranties; amending
Minnesota Statutes 2018, section 325F.665, subdivisions 1, 3.

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

Section 1.

Minnesota Statutes 2018, section 325F.665, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

(a) For the purposes of this section, the terms in deleted text begin paragraphs
(b) to (i) deleted text end new text begin this subdivision new text end have the meanings given them.

(b) "Consumer" means the purchaser or lessee, other than for purposes of resale or
sublease, of a new motor vehicle used for personal, family, or household purposes at least
40 percent of the time, and a person to whom the new motor vehicle is transferred for the
same purposes during the duration of an express warranty applicable to the motor vehicle.
The term also includes an ambulance service licensed under chapter 144E that has purchased
or leased a new motor vehicle of the type specified in paragraph (f), and a person to whom
the ambulance is transferred for the same purpose during the duration of any applicable
express warranty.

(c) "Manufacturer" means a person engaged in the business of manufacturing, assembling
or distributing motor vehicles, who will, under normal business conditions during the year,
manufacture, assemble or distribute to dealers at least ten new motor vehicles.

(d) "Manufacturer's express warranty" and "warranty" mean the written warranty of the
manufacturer of a new motor vehicle of its condition and fitness for use, including any terms
or conditions precedent to the enforcement of obligations under that warranty.

(e) "Lease" means a contract in the form of a lease or bailment for the use of personal
property by a natural person for a period of time exceeding four months, used for personal,
family, or household purposes at least 40 percent of the time, whether or not the lessee has
the option to purchase or otherwise become the owner of the property at the expiration of
the lease.

(f) "Motor vehicle" means (1) a passenger automobile as defined in section 168.002,
subdivision 24, including pickup trucks and vans, (2) the self-propelled motor vehicle chassis
or van portion of a recreational vehicle as defined in section 168.002, subdivision 27, which
is sold or leased to a consumer in this state, and (3) the self-propelled motor vehicle chassis
or van portion of an ambulance as defined in section 144E.001, subdivision 2.

(g) "Informal dispute settlement mechanism" means an arbitration process or procedure
by which the manufacturer attempts to resolve disputes with consumers regarding motor
vehicle nonconformities and repairs that arise during the vehicle's warranty period.

(h) "Motor vehicle lessor" means a person who holds title to a motor vehicle leased to
a lessee under a written lease agreement or who holds the lessor's rights under such
agreement.

(i) "Early termination costs" means expenses and obligations incurred by a motor vehicle
lessor as a result of an early termination of a written lease agreement and surrender of a
motor vehicle to a manufacturer under subdivision 4, including penalties for prepayment
of finance arrangements.

new text begin (j) "Standard maintenance" means the change, adjustment, or replacement of a motor
vehicle's oils, fluids, tires, batteries, and filters.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2019, and applies to new motor
vehicles sold on or after that date.
new text end

Sec. 2.

Minnesota Statutes 2018, section 325F.665, subdivision 3, is amended to read:

Subd. 3.

Manufacturer's duty to refund or replace.

(a) If the manufacturer, its agents,
or its authorized dealers are unable to conform the new motor vehicle to any applicable
express warranty by repairing or correcting any defect or condition which substantially
impairs the use or market value of the motor vehicle to the consumer after a reasonable
number of attempts, the manufacturer shall either replace the new motor vehicle with a
comparable motor vehicle or accept return of the vehicle from the consumer and refund to
the consumer the full purchase price, including the cost of any options or other modifications
arranged, installed, or made by the manufacturer, its agent, or its authorized dealer within
30 days after the date of original delivery, and all other charges including, but not limited
to, sales or excise tax, license fees and registration fees, reimbursement for towing and
rental vehicle expenses incurred by the consumer as a result of the vehicle being out of
service for warranty repair, less a reasonable allowance for the consumer's use of the vehicle
not exceeding ten cents per mile driven or ten percent of the purchase price, whichever is
less. If the manufacturer offers a replacement vehicle under this section, the consumer has
the option of rejecting the replacement vehicle and requiring the manufacturer to provide
a refund. Refunds must be made to the consumer, and lienholder, if any, as their interests
appear on the records of the registrar of motor vehicles. Refunds shall include the amount
stated by the dealer as the trade-in value of a consumer's used motor vehicle, plus any
additional amount paid by the consumer for the new motor vehicle. A manufacturer must
give to the consumer an itemized statement listing each of the amounts refunded under this
section. If the amount of sales or excise tax refunded is not separately stated, or if the
manufacturer does not apply for a refund of the tax within one year of the return of the
motor vehicle, the Department of Public Safety may refund the tax, as determined under
paragraph (h), directly to the consumer and lienholder, if any, as their interests appear on
the records of the registrar of motor vehicles. A reasonable allowance for use is that amount
directly attributable to use by the consumer and any previous consumer during any period
in which the use and market value of the motor vehicle are not substantially impaired. It is
an affirmative defense to any claim under this section (1) that an alleged nonconformity
does not substantially impair the use or market value, or (2) that a nonconformity is the
result of abuse, neglect, or unauthorized modifications or alterations new text begin , not including standard
maintenance, new text end of a motor vehicle by anyone other than the manufacturer, its agent or its
authorized dealer.

(b) It is presumed that a reasonable number of attempts have been undertaken to conform
a new motor vehicle to the applicable express warranties, if (1) the same nonconformity
has been subject to repair four or more times by the manufacturer, its agents, or its authorized
dealers within the applicable express warranty term or during the period of two years
following the date of original delivery of the new motor vehicle to a consumer, whichever
is the earlier date, but the nonconformity continues to exist, or (2) the vehicle is out of
service by reason of repair for a cumulative total of 30 or more business days during the
term or during the period, whichever is the earlier date.

(c) If the nonconformity results in a complete failure of the braking or steering system
of the new motor vehicle and is likely to cause death or serious bodily injury if the vehicle
is driven, it is presumed that a reasonable number of attempts have been undertaken to
conform the vehicle to the applicable express warranties if the nonconformity has been
subject to repair at least once by the manufacturer, its agents, or its authorized dealers within
the applicable express warranty term or during the period of two years following the date
of original delivery of the new motor vehicle to a consumer, whichever is the earlier date,
and the nonconformity continues to exist.

(d) The term of an applicable express warranty, the two-year period and the 30-day
period shall be extended by any period of time during which repair services are not available
to the consumer because of a war, invasion, strike, or fire, flood, or other natural disaster.

(e) The presumption contained in paragraph (b) applies against a manufacturer only if
the manufacturer, its agent, or its authorized dealer has received prior written notification
from or on behalf of the consumer at least once and an opportunity to cure the defect alleged.
If the notification is received by the manufacturer's agent or authorized dealer, the agent or
dealer must forward it to the manufacturer by certified mail, return receipt requested.

(f) The expiration of the time periods set forth in paragraph (b) does not bar a consumer
from receiving a refund or replacement vehicle under paragraph (a) if the reasonable number
of attempts to correct the nonconformity causing the substantial impairment occur within
three years following the date of original delivery of the new motor vehicle to a consumer,
provided the consumer first reported the nonconformity to the manufacturer, its agent, or
its authorized dealer during the term of the applicable express warranty.

(g) At the time of purchase or lease, the manufacturer must provide directly to the
consumer a written statement on a separate piece of paper, in 10-point all capital type, in
substantially the following form: "IMPORTANT: IF THIS VEHICLE IS DEFECTIVE,
YOU MAY BE ENTITLED UNDER THE STATE'S LEMON LAW TO REPLACEMENT
OF IT OR A REFUND OF ITS PURCHASE PRICE OR YOUR LEASE PAYMENTS.
HOWEVER, TO BE ENTITLED TO REFUND OR REPLACEMENT, YOU MUST FIRST
NOTIFY THE MANUFACTURER, ITS AGENT, OR ITS AUTHORIZED DEALER OF
THE PROBLEM IN WRITING AND GIVE THEM AN OPPORTUNITY TO REPAIR
THE VEHICLE. YOU ALSO HAVE A RIGHT TO SUBMIT YOUR CASE TO THE
CONSUMER ARBITRATION PROGRAM WHICH THE MANUFACTURER MUST
OFFER IN MINNESOTA."

(h) The amount of the sales or excise tax to be paid by the manufacturer to the consumer
under paragraph (a) shall be the tax paid by the consumer when the vehicle was purchased
less an amount equal to the tax paid multiplied by a fraction, the denominator of which is
the purchase price of the vehicle and the numerator of which is the allowance deducted
from the refund for the consumer's use of the vehicle.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2019, and applies to new motor
vehicles sold on or after that date.
new text end