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Senate File 225

Partial Bill History

Bill Text

  1  1    Section 1.  NEW SECTION.  216E.1  DEFINITIONS.
  1  2    As used in this chapter, unless the context otherwise
  1  3 provides:
  1  4    1.  "Assistive device" means any item, piece of equipment,
  1  5 or product system which is purchased, or whose transfer is
  1  6 accepted in this state, and which is used to increase,
  1  7 maintain, or improve the functional capabilities of
  1  8 individuals with disabilities concerning a major life activity
  1  9 as defined in section 225C.46.
  1 10    2.  "Assistive device dealer" means a person who is in the
  1 11 business of selling assistive devices.
  1 12    3.  "Assistive device lessor" means a person who leases
  1 13 assistive devices to consumers, or who holds the lessor's
  1 14 rights, under a written lease.
  1 15    4.  "Collateral costs" means expenses incurred by a con-
  1 16 sumer in connection with the repair of a nonconformity,
  1 17 including the cost of shipping, sales tax, and of obtaining an
  1 18 alternative assistive device.
  1 19    5.  "Consumer" means any one of the following:
  1 20    a.  The purchaser of an assistive device, if the assistive
  1 21 device was purchased from an assistive device dealer or manu-
  1 22 facturer for purposes other than resale.
  1 23    b.  A person to whom the assistive device is transferred
  1 24 for purposes other than resale, if the transfer occurs before
  1 25 the expiration of an express warranty applicable to the
  1 26 assistive device.
  1 27    c.  A person who may enforce the warranty.
  1 28    d.  A person who leases an assistive device from an
  1 29 assistive device lessor under a written lease.
  1 30    6.  "Demonstrator" means an assistive device used primarily
  1 31 for the purpose of demonstration to the public.
  1 32    7.  "Early termination cost" means any expense or obliga-
  1 33 tion that an assistive device lessor incurs as a result of
  1 34 both the termination of a written lease before the termination
  1 35 date set forth in the lease and the return of an assistive
  2  1 device to the manufacturer.  "Early termination cost" includes
  2  2 a penalty for prepayment under a finance arrangement.
  2  3    8.  "Early termination savings" means any expense or
  2  4 obligation that an assistive device lessor avoids as a result
  2  5 of both the termination of a written lease before the termina-
  2  6 tion date set forth in the lease and the return of an
  2  7 assistive device to a manufacturer which shall include an
  2  8 interest charge that the assistive device lessor would have
  2  9 paid to finance the assistive device or, if the assistive
  2 10 device lessor does not finance the assistive device, the
  2 11 difference between the total payments remaining for the period
  2 12 of the lease term remaining after the early termination and
  2 13 the present value of those remaining payments at the date of
  2 14 the early termination.
  2 15    9.  "Loaner" means an assistive device, provided free of
  2 16 charge to the consumer, for use by the consumer, that need not
  2 17 be new or be identical to, or have functional capabilities
  2 18 equal to or greater than, those of the original assistive
  2 19 device, but that meets all of the following conditions:
  2 20    a.  The loaner is in good working order.
  2 21    b.  The loaner performs, at a minimum, the most essential
  2 22 functions of the original assistive device, in light of the
  2 23 disabilities of the consumer.
  2 24    c.  Any differences between the loaner and the original
  2 25 assistive device do not create a threat to the consumer's
  2 26 health or safety.
  2 27    10.  "Manufacturer" means a person who manufactures or
  2 28 assembles assistive devices and agents of that person,
  2 29 including an importer, a distributor, a factory branch,
  2 30 distributor branch, and any warrantors of the assistive
  2 31 device, but does not include an assistive device dealer or
  2 32 assistive device lessor.
  2 33    11.  "Nonconformity" means any defect, malfunction, or
  2 34 condition which substantially impairs the use, value, or
  2 35 safety of an assistive device or any of its component parts,
  3  1 but does not include a condition, defect, or malfunction that
  3  2 is the result of abuse, neglect, or unauthorized modification
  3  3 or alteration of the assistive device by the consumer.
  3  4    12.  "Reasonable attempt to repair" means any of the
  3  5 following occurring within the term of an express warranty
  3  6 applicable to a new assistive device or within one year after
  3  7 first delivery of the assistive device to a consumer,
  3  8 whichever is sooner:
  3  9    a.  The manufacturer, assistive device lessor, or any of
  3 10 the manufacturer's authorized assistive device dealers accept
  3 11 return of the new assistive device for repair at least two
  3 12 times.
  3 13    b.  The manufacturer, assistive device lessor, or any of
  3 14 the manufacturer's authorized assistive device dealers place
  3 15 the assistive device out of service for an aggregate of at
  3 16 least thirty cumulative days because of warranty non-
  3 17 conformities.
  3 18    Sec. 2.  NEW SECTION.  216E.2  EXPRESS WARRANTIES.
  3 19    1.  A manufacturer or assistive device lessor who sells or
  3 20 leases an assistive device to a consumer, either directly or
  3 21 through an assistive device dealer, shall furnish the consumer
  3 22 with an express warranty for the assistive device, warranting
  3 23 the assistive device to be free of any nonconformity.  The
  3 24 duration of the express warranty shall be not less than one
  3 25 year after first delivery of the assistive device to the
  3 26 consumer.  If a manufacturer fails to furnish an express
  3 27 warranty as required by this section, the assistive device
  3 28 shall be covered by an express warranty as if the manufacturer
  3 29 had furnished an express warranty to the consumer as required
  3 30 by this section.
  3 31    2.  An express warranty does not take effect until the
  3 32 consumer takes possession of the new assistive device.
  3 34 OR REFUND.
  3 35    1.  If an assistive device does not conform to an
  4  1 applicable express warranty and the consumer reports the
  4  2 nonconformity to the manufacturer, the assistive device
  4  3 lessor, or any of the manufacturer's authorized assistive
  4  4 device dealers, and makes the assistive device available for
  4  5 repair before one year after first delivery of the device to
  4  6 the consumer or within the period of the express warranty if
  4  7 the warranty is longer than one year, a reasonable attempt to
  4  8 repair the nonconformity shall be made.
  4  9    2.  If, after a reasonable attempt to repair, the
  4 10 nonconformity is not repaired, the manufacturer shall carry
  4 11 out the requirements of either paragraph "a" or "b" upon the
  4 12 request of a consumer.
  4 13    a.  The manufacturer shall provide for a refund by doing
  4 14 one of the following:
  4 15    (1)  If the assistive device was purchased by the consumer,
  4 16 accept return of the assistive device and refund to the
  4 17 consumer and to any holder of perfected security interest in
  4 18 the consumer's assistive device, as the holder's interest may
  4 19 appear, the full purchase price plus any finance charge paid
  4 20 by the consumer at the point of sale and collateral costs,
  4 21 less a reasonable allowance for use.
  4 22    (2)  If the assistive device was leased by the consumer,
  4 23 accept return of the assistive device, refund to the assistive
  4 24 device lessor and to any holder of a perfected security
  4 25 interest in the assistive device, as the holder's interest may
  4 26 appear, the current value of the written lease and refund to
  4 27 the consumer the amount that the consumer paid under the
  4 28 written lease plus any collateral costs, less a reasonable
  4 29 allowance for use.  The manufacturer shall have a cause of
  4 30 action against the dealer or lessor for reimbursement of any
  4 31 amount that the manufacturer pays to a consumer which exceeds
  4 32 the net price received by the manufacturer for the assistive
  4 33 device.
  4 34    b.  The manufacturer shall provide a comparable new
  4 35 assistive device or offer a refund to the consumer if the
  5  1 consumer does any one of the following:
  5  2    (1)  Offers to transfer possession of the assistive device
  5  3 to the manufacturer.  No later than thirty days after that
  5  4 offer, the manufacturer shall provide the consumer with the
  5  5 comparable new assistive device or a refund.  When the
  5  6 manufacturer provides the new assistive device or refund, the
  5  7 consumer shall return the assistive device having the
  5  8 nonconformity to the manufacturer, along with any endorsements
  5  9 necessary to transfer legal possession to the manufacturer.
  5 10    (2)  Offers to return the assistive device to the
  5 11 manufacturer.  No later than thirty days after the offer, the
  5 12 manufacturer shall provide a refund to the consumer.  When the
  5 13 manufacturer provides a refund, the consumer shall return the
  5 14 assistive device having the nonconformity to the manufacturer.
  5 15    (3)  Offers to transfer possession of a leased assistive
  5 16 device to the manufacturer.  No later than thirty days after
  5 17 the offer, the manufacturer shall provide a refund to the
  5 18 assistive device lessor.  When the manufacturer provides the
  5 19 refund, the assistive device lessor shall provide to the
  5 20 manufacturer any endorsements necessary to transfer legal
  5 21 possession to the manufacturer.
  5 22    3.  Under the provisions of this section, the current value
  5 23 of the written lease equals the total amount for which that
  5 24 lease obligates the consumer during the period of the lease
  5 25 remaining after its early termination, plus the assistive
  5 26 device lessor's early termination costs and the value of the
  5 27 assistive device at the lease expiration date if the lease
  5 28 sets forth that value, less the assistive device lessor's
  5 29 early termination savings.
  5 30    4.  Under the provisions of this section, a reasonable
  5 31 allowance for use shall not exceed the amount obtained by
  5 32 multiplying the total amount for which the written lease
  5 33 obligates the consumer by a fraction, the denominator of which
  5 34 is one thousand eight hundred twenty-five and the numerator of
  5 35 which is the number of days that the consumer used the
  6  1 assistive device before first reporting the nonconformity to
  6  2 the manufacturer, assistive device lessor, or assistive device
  6  3 dealer.
  6  4    5.  A person shall not enforce a lease against a consumer
  6  5 after the consumer receives a refund.
  6  6    Sec. 4.  NEW SECTION.  216E.4  MANUFACTURER'S DUTY TO
  6  9    1.  Whenever an assistive device covered by a
  6 10 manufacturer's express warranty is tendered by a consumer to
  6 11 the dealer from whom the assistive device was purchased or
  6 12 exchanged for the repair of any defect, malfunction, or
  6 13 nonconformity to which the warranty is applicable, the
  6 14 manufacturer shall provide the consumer, at the consumer's
  6 15 choice, for the duration of the repair period, either a rental
  6 16 assistive device reimbursement of up to twenty dollars per
  6 17 day, or a loaner, without cost to the consumer, if a loaner is
  6 18 reasonably available or obtainable by the manufacturer,
  6 19 assistive device lessor, or assistive device dealer, if any of
  6 20 the following applies:
  6 21    a.  The repair period exceeds ten working days, including
  6 22 the day on which the device is tendered to the manufacturer or
  6 23 an assistive device dealer designated by the manufacturer for
  6 24 repairs.  If the assistive device dealer does not tender the
  6 25 assistive device to the manufacturer in a timely enough manner
  6 26 for the manufacturer to make the repairs within ten days, the
  6 27 manufacturer shall have a cause of action against the
  6 28 assistive device dealer for reimbursement of any penalties
  6 29 that the manufacturer must pay.
  6 30    b.  The nonconformity is the same for which the assistive
  6 31 device has been tendered to the assistive device dealer for
  6 32 repair on at least two previous occasions.
  6 33    2.  The provisions of this section regarding a
  6 34 manufacturer's duty shall apply for the period of the
  6 35 manufacturer's express warranty or for two years from delivery
  7  1 of the assistive device to the customer, whichever period of
  7  2 time ends sooner.
  7  5    An assistive device returned by a consumer or assistive
  7  6 device lessor in this state or any other state for
  7  7 nonconformity shall not be sold or leased again in this state
  7  8 unless full written disclosure of the reason for return is
  7  9 made to any prospective buyer or lessee by the manufacturer,
  7 10 assistive device dealer, or assistive device lessor.
  7 11    Sec. 6.  NEW SECTION.  216E.6  REMEDIES.
  7 12    1.  This chapter shall not limit rights or remedies
  7 13 available to a consumer under any other law.
  7 14    2.  Any waiver of rights by a consumer under this chapter
  7 15 is void.
  7 16    3.  In addition to pursuing any other remedy, a consumer
  7 17 may bring an action to recover any damages caused by a
  7 18 violation of this chapter.  The court shall award a consumer
  7 19 who prevails in such an action no more than three times the
  7 20 amount of any pecuniary loss, together with costs and
  7 21 reasonable attorney fees, and any equitable relief that the
  7 22 court determines is appropriate.
  7 23    Sec. 7.  NEW SECTION.  216E.7  EXEMPTIONS.
  7 24    This chapter does not apply to a hearing aid sold, leased,
  7 25 or transferred to a consumer by an audiologist licensed under
  7 26 chapter 147, or a hearing aid dealer licensed under chapter
  7 27 154A, if the audiologist or dealer provides either an express
  7 28 warranty for the hearing aid or provides for service and
  7 29 replacement of the hearing aid.  
  7 30                           EXPLANATION
  7 31    This bill creates a new chapter regarding warranties for
  7 32 assistive devices.  The bill defines, for the purposes of this
  7 33 chapter, "assistive devices", "consumer", "loaner",
  7 34 "manufacturer", and other terms used in the chapter concerning
  7 35 repair and cost.
  8  1    The bill provides for a warranty on assistive devices of at
  8  2 least one year.  The bill further provides for the repair of a
  8  3 nonconforming assistive device and provides a consumer with
  8  4 the ability to obtain a refund or a replacement device if the
  8  5 nonconformity is not repaired.  The bill also provides that,
  8  6 if certain conditions are met, a manufacturer must provide to
  8  7 a consumer either at least partial reimbursement for inability
  8  8 to use an assistive device or a free loaner assistive device
  8  9 if the device is being repaired.
  8 10    The bill also provides that a resale of a device returned
  8 11 for a nonconformity must disclose the reason for the return to
  8 12 a new consumer of the device.
  8 13    The bill does not limit a consumer's right to pursue other
  8 14 remedies concerning an assistive device and provides for a
  8 15 civil action to obtain damages for a violation of this new
  8 16 chapter.
  8 17    The bill provides that hearing aids sold, leased, or
  8 18 transferred to a consumer from an audiologist or hearing aid
  8 19 dealer are exempt from this new chapter if the audiologist or
  8 20 dealer provides an express warranty or provides for service
  8 21 and replacement of the hearing aid.  
  8 22 LSB 1738SV 77
  8 23 ec/jw/5

Text: SF00224                           Text: SF00226
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