It is enacted by the General Assembly as follows:
SECTION 1. Sections 31-5.2-2, 31-5.2-3, 31-5.2-4, 31-5.2-5, 31-5.2-6, 31-5.2-7, 31-5.2-7.1, 31-5.2-8, 31-5.2-9, 31-5.2-10, 31-5.2-11 and 31-5.2-12 of the General Laws in Chapter 31-5.2 entitled "Consumer Enforcement of Motor Vehicle Warranties" are hereby amended to read as follows:
{ADD 31-5.2-2. Manufacturers' obligation to fulfill warranties. -- ADD} If a motor vehicle does not conform to any applicable express or implied warranties, including, but not limited to, the implied warranty of merchantability as defined in section 6A-2-314 and the implied warranty of fitness for a particular purpose as defined in section 6A-2-315, and the consumer {ADD or lessee ADD} reports the nonconformity to the manufacturer of the vehicle, its agent, or its authorized dealer {ADD or lessor ADD} during the term of protection, the manufacturer, its agent, or its authorized dealer shall effect such repairs as are necessary to conform the vehicle to the warranty, notwithstanding the fact that those repairs are made after the expiration of the term.
{ADD 31-5.2-3. Replacement of nonconforming vehicle. -- ADD} (a) If the manufacturer, its agent, or its authorized dealer {ADD or lessor ADD} does not conform the motor vehicle to any applicable express or implied warranty by curing any nonconformity after a reasonable number of attempts, the manufacturer shall accept return of the vehicle from the consumer {ADD or lessee ADD} and, at the consumer's {ADD or lessee's ADD} option, refund the full contract price {ADD or lease price ADD} of the vehicle including all credits and allowances for any trade-in vehicle, less a reasonable allowance for use, or replace it with a comparable new motor vehicle in good working order. A manufacturer replacing a motor vehicle shall have thirty (30) calendar days from the date of return of the motor vehicle under the provisions of this chapter to deliver a comparable motor vehicle. If, within that thirty (30) days, no comparable motor vehicle has been delivered, the manufacturer shall refund the full contract price {ADD or lease price ADD} less a reasonable allowance for use. In instances in which a vehicle is replaced by a manufacturer under the provisions of this chapter, the manufacturer shall reimburse the consumer {ADD or lessee ADD} for any fees for the transfer of registration or any sales tax incurred by the consumer {ADD or lessee ADD} as a result of that replacement. In instances in which a vehicle which was financed by the manufacturer or its subsidiary or agent is replaced under the provisions of this chapter, the manufacturer, subsidiary or agent shall not require the consumer {ADD or lessee ADD} to enter into any refinancing agreement with an interest rate or other financial terms which are less favorable to the consumer {ADD or lessee ADD} than those stated in the original financing agreement. In instances in which a refund is tendered under the provisions of this chapter, the manufacturer shall also reimburse the consumer {ADD or lessee ADD} for incidental costs including sales tax, registration fee, finance charges, and any cost of non-removable options added by an authorized dealer {ADD or lessor ADD} . Whenever a vehicle is replaced or refunded under the provisions of this chapter, in instances in which towing services and rental vehicles of comparable year and size were not made available at no cost to the consumer {ADD or lessee ADD} , the manufacturer shall also reimburse the consumer {ADD or lessee ADD} for towing and reasonable rental costs that were a direct result of vehicle nonconformity. Refunds shall be made to the consumer {ADD or lessee ADD} and {ADD to the ADD} lienholder, if any, as their interests may appear. A reasonable allowance for use shall be obtained by multiplying the total contract price {ADD or lessee cost ADD} of the vehicle by a fraction having as its denominator one hundred thousand (100,000) and having as its numerator the number of miles that the vehicle travelled prior to the consumer's first report of the nonconformity to the manufacturer, its agent, or its dealer {ADD or lessor ADD} plus the number of miles that it travelled during any subsequent period when the vehicle was not out of service by reason of repair. A consumer {ADD or lessee ADD} shall have the option of retaining the use of any vehicle returned under the provisions of this chapter until such time as the consumer {ADD or lessee ADD} has been tendered a full refund or replacement vehicle acceptable to the consumer {ADD or lessee ADD} . The use of any vehicle retained by a consumer {ADD or lessee ADD} after its return to a manufacturer under the provisions of this chapter shall, in instances in which a refund is tendered, be reflected in the above mentioned reasonable allowance for use.
(b) If applicable, refunds shall be made to the lessor and lessee as their interests may appear on the records of ownership as follows: the lessee shall receive the lessee cost and the lessor shall receive the lease price less the aggregate deposit and rental payments previously paid to the lessor for the leased vehicle. If it is determined that the lessee is entitled to a refund pursuant to this chapter, the consumer's lease agreement with the lessor shall be terminated upon payment of the refund and no penalty for early termination shall be assessed.
{ADD 31-5.2-4. Affirmative defenses. -- ADD} It shall be an affirmative defense to any claim under this section: (1) that an alleged nonconformity does not substantially impair the use, market value, or safety of the vehicle, or (2) that a nonconformity is the result of abuse, neglect, or unauthorized substantial modification or alteration of the vehicle by the consumer {ADD or lessee ADD}.
{ADD 31-5.2-5. Time allowed for correction of nonconformity. -- ADD} (a) A reasonable number of attempts shall be presumed to have been undertaken to conform a motor vehicle to any applicable express or implied warranties if: (1) the same nonconformity has been subject to repair four (4) or more times by the manufacturer or its agents or authorized dealers {ADD or lessors ADD} within the term of protection, but the nonconformity continues to exist or the nonconformity has recurred within the term of protection, or (2) the vehicle is out of service by reason of the repair of any nonconformity for a cumulative total of thirty (30) or more calendar days during the term of protection; provided, however, that the manufacturer shall be afforded one additional opportunity, not to exceed seven (7) calendar days, to cure any nonconformity arising during the term of protection, notwithstanding the fact that the additional opportunity to cure commences after the term of protection.
(b) The additional opportunity to cure shall commence on the day the manufacturer first knows or should have known that the limits specified in subsection (a)(1) or (a)(2) have been met or exceeded. The term of protection, the thirty (30) calendar day period specified in subsection (a)(2) and the additional opportunity to cure shall be extended by any period of time during which repair services are not available to the consumer {ADD or lessee ADD} as a direct result of a war, invasion, fire, flood or other natural disaster. The term of protection, the thirty (30) calendar day period and the additional opportunity to cure shall also be extended by that period of time during which repair services are not available as a direct result of a strike; provided, however, that the manufacturer, its agent, or its authorized dealer {ADD or lessor ADD} makes provision for the free use of a vehicle of comparable year and size by any consumer {ADD or lessee ADD} whose vehicle is out of service by reason of repair during a strike. The burden shall be on the manufacturer to show that any event claimed as a reason for an extension under the provisions of this section was the direct cause for the failure of the manufacturer, its agent {ADD or lessor ADD} , or its authorized dealer to cure any nonconformity during the time of that event. Extensions for concurrent events shall not be cumulative.
{ADD 31-5.2-6. Rights and remedies cumulative. -- ADD} Nothing in this chapter shall be construed to limit the rights or remedies which are otherwise available to a consumer {ADD or lessee ADD} under law.
{ADD 31-5.2-7. Informal dispute settlement procedures. -- ADD} If a manufacturer has established an informal dispute settlement procedure which complies in all respects with the provisions of title 16, Code of Federal Regulations, Part 703, as from time to time amended, or which has been approved by the Federal Trade Commission or by the Attorney General of this state, the provisions of section 31-5.2-3 concerning refunds or replacement shall not apply to any consumer {ADD or lessee ADD} who has not first resorted to the procedure or the procedure set forth in section 31-5.2-7.1. This section shall not apply unless the manufacturer, its agents, or its authorized dealer {ADD or lessor ADD} shall have provided the consumer {ADD or lessee ADD} with clear and conspicuous written notice of the procedure at the time of delivery of the motor vehicle. A decision resulting from such an informal dispute settlement procedure shall be binding upon the manufacturer if the consumer {ADD or lessee ADD} elects to accept the decision. The manufacturer shall perform its obligations as set forth in said decision within a reasonable period of time not to exceed thirty (30) calendar days from the rendering of the decision. In no event shall a consumer {ADD or lessee ADD} who has resorted to an informal dispute settlement procedure be precluded from seeking the rights and/or remedies provided by this chapter. Any applicable statute of limitation including but not limited to that set forth in section 31-5.2-12 shall be tolled during the period from the initiation of a dispute settlement procedure until thirty (30) days following the rendering of a final decision in said process.
{ADD 31-5.2-7.1. Procedure. -- ADD} (a) In addition to any settlement procedure provided for in section 31-5.2-7, the consumers' council shall provide an independent arbitration procedure for the settlement of disputes between consumers {ADD or lessees ADD} and manufacturers concerning motor vehicles which do not conform to all applicable express or implied warranties. The director of the consumers' council shall establish one (1) or more automobile dispute settlement panels which shall consist of three (3) members appointed by the director, only one (1) of whom shall be directly involved in the manufacture, distribution, sale {ADD , lease ADD} or service of any automobile product. Members shall be persons interested in consumer disputes and shall serve without compensation at the discretion of the director.
(b) An owner {ADD or lessee ADD} of any motor vehicle purchased {ADD or leased ADD} at any time on and after January 1, 1991 which fails to conform to the applicable warranties, express or implied warranties may either initiate a request for arbitration by the consumers' council or take part in the settlement procedure set forth in section 31-5.2-7 if in existence. The consumer {ADD or lessee ADD} shall set forth, on a complaint form prescribed by the director, any information he or she deems relevant to the resolution of the dispute and shall file the complaint with a nonrefundable filing fee of twenty dollars ($20.00). The director shall decide if the complaint is eligible under chapter 5.2 of this title. Upon acceptance of the complaint, the director shall notify the manufacturer of the filing of a request for arbitration and shall obtain from the manufacturer, in writing on a form prescribed by the director, any information the manufacturer deems relevant to the resolution of the dispute. The manufacturer shall return the form, along with a non-refundable fifty dollar ($50.00) filing fee, within twenty (20) days of receipt. The director shall then refer the matter to a panel created pursuant to subsection 31-5.2-7.1(a) above.
(c) The panel shall investigate, gather and organize all information necessary for a fair and timely decision in each dispute. The director may issue subpoenas on behalf of any arbitration panel to compel the attendance of witnesses and the production of documents, papers and records relevant to the dispute.
(d) At all arbitration proceedings the parties may present oral or written testimony, present witnesses and evidence relevant to the dispute, cross examine witnesses and be represented by counsel.
(e) The consumers' council may forward a copy of all written testimony, including all documentary evidence, to an independent technical expert, who shall review such material and be able to advise and consult with, the arbitration panel. An expert shall sit as a nonvoting member of an arbitration panel whenever oral testimony is presented.
(f) The panel shall grant the relief specified in section 31-5.2-3 of this chapter and any other relief available under the applicable warranties or the Magnuson-Moss Warranty Federal Trade Commission Improvement Act, 88 Stat. 2183 (1975), 15 USC 2301 et seq. as in effect on October 1, 1982, to the consumer {ADD or lessee ADD} if a reasonable number of attempts have been undertaken to correct one (1) or more nonconformities that substantially impair the motor vehicle. The panel shall dismiss the dispute if the panel finds, after considering all the evidence presented, that the consumer {ADD or lessee ADD} is not entitled to relief under this chapter.
(g)(1) The panel shall, as expeditiously as possible, but not later than ninety (90) days from the date the director deems the dispute eligible for arbitration, render a fair decision based on the information gathered and disclose its findings and the reasons therefore to the parties involved, The consumer {ADD or lessee ADD} shall accept or reject the decision within five (5) days of its filing.
(2) If the decision is favorable to the consumer {ADD or lessee ADD} , the manufacturer must within thirty (30) days after the rendering of the decision, comply with the terms of the decision if the consumer {ADD or lessee ADD} elects to accept the decision. The consumers' council shall contact the consumer {ADD or lessee ADD} , within ten (10) working days after the date for performance, to determine whether performance has occurred.
(h) The director shall maintain such records of each dispute as deemed necessary, including an index of disputes by brand name and model. The director shall, at intervals of no more than six (6) months, compile and maintain statistics indicating the record of manufacturer compliance with arbitration decisions and the number of refunds or replacement awarded. The summary shall be a public record.
(i) The consumers' council automobile dispute settlement procedure shall be prominently posted in the place of business of each new car dealer {ADD or lessor ADD} licensed by the department of transportation to engage in the sale {ADD or lease ADD} of such manufacturer's new motor vehicles. The display of such public notice shall be a condition of licensure under the general laws. The director shall determine the size, type face, form and wording of the sign required by this section, which shall include the telephone number and the address to which requests for the consumers' council's arbitration services may be sent.
(j) The director shall adopt regulations, in accordance with the provisions of the general laws, within ninety (90) days after the effective date of this act, to carry out the purposes of this act. Written copies of the regulations and appropriate arbitration hearing procedures shall be provided to any person upon request.
{ADD 31-5.2-8. Waiver of rights prohibited. -- ADD} Any agreement entered into by a consumer {ADD or lessee ADD} for the purchase {ADD or lease ADD} of a new motor vehicle which waives, limits, or disclaims the rights set forth in this chapter shall be void as contrary to public policy. These rights shall inure to a subsequent transferee of the motor vehicle.
{ADD 31-5.2-9. Disclosure of nonconformity prior to resale. -- ADD} No motor vehicle that is returned to the manufacturer under the provisions of this chapter shall be resold {ADD or re-leased ADD} in the state without clear and conspicuous written disclosure to the prospective purchaser {ADD or lessee ADD} prior to resale of the fact that it was so returned due to a nonconformity. The attorney general shall prescribe the exact form and content of the disclosure statement.
{ADD 31-5.2-10. Cause of action. -- ADD} An aggrieved consumer {ADD or lessee ADD} may bring an action under the Rules of Civil Procedure in the superior court to enforce the provisions of this chapter.
{ADD 31-5.2-11. Attorney's fees. -- ADD} The court hearing a complaint brought by a consumer {ADD or lessee ADD} aggrieved by a violation of this chapter shall award reasonable attorney's fees to a prevailing plaintiff.
{ADD 31-5.2-12. Commencement of action. -- ADD} Any action brought pursuant to this chapter shall be commenced within three (3) years of the date of original delivery of the motor vehicle to the consumer {ADD or lessee ADD} or within two (2) years of the date on which the mileage on the motor vehicle reached fifteen thousand (15,000) miles, whichever is earlier.
SECTION 2. This act shall take effect on October 1, 1995.