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Senate File 2124

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.  "Assistive device" does not
  1 10 mean any medical device, surgical device, or organ implanted
  1 11 or transplanted into or attached directly to an individual.
  1 12 "Assistive device" does not mean any device for which a
  1 13 certificate of title is issued by the state department of
  1 14 transportation but does mean any item, piece of equipment, or
  1 15 product system otherwise meeting the definition of "assistive
  1 16 device" that is incorporated, attached, or included as a
  1 17 modification in or to such a certificated device.
  1 18    2.  "Assistive device dealer" means a person who is in the
  1 19 business of selling assistive devices.
  1 20    3.  "Assistive device lessor" means a person who leases
  1 21 assistive devices to consumers, or who holds the lessor's
  1 22 rights, under a written lease.
  1 23    4.  "Collateral costs" means expenses incurred by a
  1 24 consumer in connection with the repair of a nonconformity,
  1 25 including the cost of shipping, sales tax, and of obtaining an
  1 26 alternative assistive device.
  1 27    5.  "Consumer" means any one of the following:
  1 28    a.  The purchaser of an assistive device, if the assistive
  1 29 device was purchased from an assistive device dealer or
  1 30 manufacturer for purposes other than resale.
  1 31    b.  A person to whom the assistive device is transferred
  1 32 for purposes other than resale, if the transfer occurs before
  1 33 the expiration of an express warranty applicable to the
  1 34 assistive device.
  1 35    c.  A person who may enforce the warranty.
  2  1    d.  A person who leases an assistive device from an
  2  2 assistive device lessor under a written lease.
  2  3    6.  "Demonstrator" means an assistive device used primarily
  2  4 for the purpose of demonstration to the public.
  2  5    7.  "Early termination cost" means any expense or
  2  6 obligation that an assistive device lessor incurs as a result
  2  7 of both the termination of a written lease before the
  2  8 termination date set forth in the lease and the return of an
  2  9 assistive device to the manufacturer.  "Early termination
  2 10 cost" includes a penalty for prepayment under a finance
  2 11 arrangement.
  2 12    8.  "Early termination savings" means any expense or
  2 13 obligation that an assistive device lessor avoids as a result
  2 14 of both the termination of a written lease before the
  2 15 termination date set forth in the lease and the return of an
  2 16 assistive device to a manufacturer which shall include an
  2 17 interest charge that the assistive device lessor would have
  2 18 paid to finance the assistive device or, if the assistive
  2 19 device lessor does not finance the assistive device, the
  2 20 difference between the total payments remaining for the period
  2 21 of the lease term remaining after the early termination and
  2 22 the present value of those remaining payments at the date of
  2 23 the early termination.
  2 24    9.  "Loaner" means an assistive device, provided free of
  2 25 charge to the consumer, for use by the consumer, that need not
  2 26 be new or be identical to, or have functional capabilities
  2 27 equal to or greater than, those of the original assistive
  2 28 device, but that meets all of the following conditions:
  2 29    a.  The loaner is in good working order.
  2 30    b.  The loaner performs, at a minimum, the most essential
  2 31 functions of the original assistive device, in light of the
  2 32 disabilities of the consumer.
  2 33    c.  Any differences between the loaner and the original
  2 34 assistive device do not create a threat to the consumer's
  2 35 health or safety.
  3  1    10.  "Manufacturer" means a person who manufactures or
  3  2 assembles assistive devices and agents of that person,
  3  3 including an importer, a distributor, a factory branch,
  3  4 distributor branch, and any warrantors of the assistive
  3  5 device, but does not include an assistive device dealer or
  3  6 assistive device lessor.
  3  7    11.  "Nonconformity" means any defect, malfunction, or
  3  8 condition which substantially impairs the use, value, or
  3  9 safety of an assistive device or any of its component parts,
  3 10 but does not include a condition, defect, or malfunction that
  3 11 is the result of abuse, neglect, or unauthorized modification
  3 12 or alteration of the assistive device by the consumer.
  3 13    12.  "Reasonable attempt to repair" means any of the
  3 14 following occurring within the term of an express warranty
  3 15 applicable to a new assistive device or within one year after
  3 16 first delivery of the assistive device to a consumer,
  3 17 whichever is sooner:
  3 18    a.  The manufacturer, assistive device lessor, or any of
  3 19 the manufacturer's authorized assistive device dealers accept
  3 20 return of the new assistive device for repair at least two
  3 21 times.
  3 22    b.  The manufacturer, assistive device lessor, or any of
  3 23 the manufacturer's authorized assistive device dealers place
  3 24 the assistive device out of service for an aggregate of at
  3 25 least thirty cumulative days because of warranty non-
  3 26 conformities.
  3 27    Sec. 2.  NEW SECTION.  216E.2  EXPRESS WARRANTIES.
  3 28    1.  A manufacturer or assistive device lessor who sells or
  3 29 leases an assistive device to a consumer, either directly or
  3 30 through an assistive device dealer, shall furnish the consumer
  3 31 with an express warranty for the assistive device, warranting
  3 32 the assistive device to be free of any nonconformity.  The
  3 33 duration of the express warranty shall be not less than one
  3 34 year after first delivery of the assistive device to the
  3 35 consumer.  If a manufacturer fails to furnish an express
  4  1 warranty as required by this section, the assistive device
  4  2 shall be covered by an express warranty as if the manufacturer
  4  3 had furnished an express warranty to the consumer as required
  4  4 by this section.
  4  5    2.  An express warranty does not take effect until the
  4  6 consumer takes possession of the new assistive device.
  4  8 OR REFUND.
  4  9    1.  If an assistive device does not conform to an
  4 10 applicable express warranty and the consumer reports the
  4 11 nonconformity to the manufacturer, the assistive device
  4 12 lessor, or any of the manufacturer's authorized assistive
  4 13 device dealers, and makes the assistive device available for
  4 14 repair before one year after first delivery of the device to
  4 15 the consumer or within the period of the express warranty if
  4 16 the warranty is longer than one year, a reasonable attempt to
  4 17 repair the nonconformity shall be made.
  4 18    2.  If, after a reasonable attempt to repair, the
  4 19 nonconformity is not repaired, the manufacturer shall carry
  4 20 out the requirements of either paragraph "a" or "b" upon the
  4 21 request of a consumer.
  4 22    a.  The manufacturer shall provide for a refund by doing
  4 23 one of the following:
  4 24    (1)  If the assistive device was purchased by the consumer,
  4 25 accept return of the assistive device and refund to the
  4 26 consumer and to any holder of perfected security interest in
  4 27 the consumer's assistive device, as the holder's interest may
  4 28 appear, the full purchase price plus any finance charge paid
  4 29 by the consumer at the point of sale and collateral costs,
  4 30 less a reasonable allowance for use.
  4 31    (2)  If the assistive device was leased by the consumer,
  4 32 accept return of the assistive device, refund to the assistive
  4 33 device lessor and to any holder of a perfected security
  4 34 interest in the assistive device, as the holder's interest may
  4 35 appear, the current value of the written lease and refund to
  5  1 the consumer the amount that the consumer paid under the
  5  2 written lease plus any collateral costs, less a reasonable
  5  3 allowance for use.  The manufacturer shall have a cause of
  5  4 action against the dealer or lessor for reimbursement of any
  5  5 amount that the manufacturer pays to a consumer which exceeds
  5  6 the net price received by the manufacturer for the assistive
  5  7 device.
  5  8    b.  The manufacturer shall provide a comparable new
  5  9 assistive device or offer a refund to the consumer if the
  5 10 consumer does any one of the following:
  5 11    (1)  Offers to transfer possession of the assistive device
  5 12 to the manufacturer.  No later than thirty days after that
  5 13 offer, the manufacturer shall provide the consumer with the
  5 14 comparable new assistive device or a refund.  When the
  5 15 manufacturer provides the new assistive device or refund, the
  5 16 consumer shall return the assistive device having the
  5 17 nonconformity to the manufacturer, along with any endorsements
  5 18 necessary to transfer legal possession to the manufacturer.
  5 19    (2)  Offers to return the assistive device to the
  5 20 manufacturer.  No later than thirty days after the offer, the
  5 21 manufacturer shall provide a refund to the consumer.  When the
  5 22 manufacturer provides a refund, the consumer shall return the
  5 23 assistive device having the nonconformity to the manufacturer.
  5 24    (3)  Offers to transfer possession of a leased assistive
  5 25 device to the manufacturer.  No later than thirty days after
  5 26 the offer, the manufacturer shall provide a refund to the
  5 27 assistive device lessor.  When the manufacturer provides the
  5 28 refund, the assistive device lessor shall provide to the
  5 29 manufacturer any endorsements necessary to transfer legal
  5 30 possession to the manufacturer.
  5 31    3.  Under the provisions of this section, the current value
  5 32 of the written lease equals the total amount for which that
  5 33 lease obligates the consumer during the period of the lease
  5 34 remaining after its early termination, plus the assistive
  5 35 device lessor's early termination costs and the value of the
  6  1 assistive device at the lease expiration date if the lease
  6  2 sets forth that value, less the assistive device lessor's
  6  3 early termination savings.
  6  4    4.  Under the provisions of this section, a reasonable
  6  5 allowance for use shall not exceed the amount obtained by
  6  6 multiplying the total amount for which the written lease
  6  7 obligates the consumer by a fraction, the denominator of which
  6  8 is one thousand eight hundred twenty-five and the numerator of
  6  9 which is the number of days that the consumer used the
  6 10 assistive device before first reporting the nonconformity to
  6 11 the manufacturer, assistive device lessor, or assistive device
  6 12 dealer.
  6 13    5.  A person shall not enforce a lease against a consumer
  6 14 after the consumer receives a refund.
  6 15    Sec. 4.  NEW SECTION.  216E.4  MANUFACTURER'S DUTY TO
  6 18    1.  Whenever an assistive device covered by a
  6 19 manufacturer's express warranty is tendered by a consumer to
  6 20 the dealer from whom the assistive device was purchased or
  6 21 exchanged for the repair of any defect, malfunction, or
  6 22 nonconformity to which the warranty is applicable, the
  6 23 manufacturer shall provide the consumer, at the consumer's
  6 24 choice, for the duration of the repair period, either a rental
  6 25 assistive device reimbursement of up to twenty dollars per
  6 26 day, or a loaner, without cost to the consumer, if a loaner is
  6 27 reasonably available or obtainable by the manufacturer,
  6 28 assistive device lessor, or assistive device dealer, if any of
  6 29 the following applies:
  6 30    a.  The repair period exceeds ten working days, including
  6 31 the day on which the device is tendered to the manufacturer or
  6 32 an assistive device dealer designated by the manufacturer for
  6 33 repairs.  If the assistive device dealer does not tender the
  6 34 assistive device to the manufacturer in a timely enough manner
  6 35 for the manufacturer to make the repairs within ten days, the
  7  1 manufacturer shall have a cause of action against the
  7  2 assistive device dealer for reimbursement of any penalties
  7  3 that the manufacturer must pay.
  7  4    b.  The nonconformity is the same for which the assistive
  7  5 device has been tendered to the assistive device dealer for
  7  6 repair on at least two previous occasions.
  7  7    2.  The provisions of this section regarding a
  7  8 manufacturer's duty shall apply for the period of the
  7  9 applicable express warranty, or until the date any repair
  7 10 required by the warranty is completed and the assistive device
  7 11 is returned to the consumer with the nonconformity eliminated,
  7 12 whichever is later, even if the assistive device is returned
  7 13 after the end of the warranty period.
  7 16    An assistive device returned by a consumer or assistive
  7 17 device lessor in this state or any other state for
  7 18 nonconformity shall not be sold or leased again in this state
  7 19 unless full written disclosure of the reason for return is
  7 20 made to any prospective buyer or lessee by the manufacturer,
  7 21 assistive device dealer, or assistive device lessor.
  7 22    Sec. 6.  NEW SECTION.  216E.6  REMEDIES.
  7 23    1.  This chapter shall not limit rights or remedies
  7 24 available to a consumer under any other law.
  7 25    2.  Any waiver of rights by a consumer under this chapter
  7 26 is void.
  7 27    3.  In addition to pursuing any other remedy, a consumer
  7 28 may bring an action to recover any damages caused by a
  7 29 violation of this chapter.  The court shall award a consumer
  7 30 who prevails in such an action no more than three times the
  7 31 amount of any pecuniary loss, together with costs and
  7 32 reasonable attorney fees, and any equitable relief that the
  7 33 court determines is appropriate.
  7 34    Sec. 7.  NEW SECTION.  216E.7  EXEMPTIONS.
  7 35    This chapter does not apply to a hearing aid sold, leased,
  8  1 or transferred to a consumer by an audiologist licensed under
  8  2 chapter 147, or a hearing aid dealer licensed under chapter
  8  3 154A, if the audiologist or dealer provides either an express
  8  4 warranty for the hearing aid or provides for service and
  8  5 replacement of the hearing aid.  
  8  6                           EXPLANATION
  8  7    This bill creates a new chapter regarding warranties for
  8  8 assistive devices.  The bill defines, for the purposes of this
  8  9 chapter, "assistive devices", "consumer", "loaner",
  8 10 "manufacturer", and other terms used in the chapter concerning
  8 11 repair and cost.
  8 12    The bill provides for an express warranty on assistive
  8 13 devices of at least one year.  The bill further provides for
  8 14 the repair of a nonconforming assistive device and provides a
  8 15 consumer with the ability to obtain a refund or a replacement
  8 16 device if the nonconformity is not repaired.  The bill also
  8 17 provides that, if certain conditions are met, a manufacturer
  8 18 must provide to a consumer either at least partial
  8 19 reimbursement for inability to use an assistive device or a
  8 20 free loaner assistive device if the device is being repaired.
  8 21    The bill also provides that a resale of a device returned
  8 22 for a nonconformity must disclose the reason for the return to
  8 23 a new consumer of the device.
  8 24    The bill does not limit a consumer's right to pursue other
  8 25 remedies concerning an assistive device and provides for a
  8 26 civil action to obtain damages for a violation of this new
  8 27 Code chapter.
  8 28    The bill provides that hearing aids sold, leased, or
  8 29 transferred to a consumer from an audiologist or hearing aid
  8 30 dealer are exempt from this new chapter if the audiologist or
  8 31 dealer provides an express warranty or provides for service
  8 32 and replacement of the hearing aid.  
  8 33 LSB 3898SS 77
  8 34 ec/jw/5

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