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First Regular Session of the 121st

H.P. 664 - L.D. 887

An Act To Amend the Maine "Lemon Law"

Be it enacted by the People of the State of Maine as follows:

     Sec. 1. 10 MRSA c. 203-A is amended by repealing the chapter headnote and enacting the following in its place:


     Sec. 2. 10 MRSA §1161, sub-§3, as amended by PL 1987, c. 359, §2, is further amended to read:

     3. Motor vehicle. "Motor vehicle" means any motor driven vehicle, designed for the conveyance of passengers or property on the public highways, which that is sold or leased in this State, except that the term "motor vehicle" does not include any commercial vehicle used primarily for commercial purposes with a gross vehicle weight of 8,500 pounds or more.

     Sec. 3. 10 MRSA §1161, sub-§4, as amended by PL 1999, c. 212, §1, is further amended to read:

     4. Reasonable allowance for use. "Reasonable allowance for use" means an amount that can not exceed the lesser of 1/3 of that amount allowed per mile by the United States Internal Revenue Service as provided by regulation, revenue procedure or revenue ruling promulgated under the United States Internal Revenue Code, Title 26, Section 162 for the use of a personal vehicle for business purposes based upon the mileage reported for that motor vehicle on the application for state-certified arbitration accepted by the State plus all mileage directly attributable to use by a consumer beyond 20,000 miles or 10% of the purchase price of the vehicle.

     Sec. 4. 10 MRSA §1161-A is enacted to read:

§1161-A. Short title

     This chapter may be known and cited as "the Maine Lemon Law."

     Sec. 5. 10 MRSA §1163, as amended by PL 1999, c. 212, §2, is further amended to read:

§1163. Rights and duties

     1. Repair of nonconformities. If a new motor vehicle does not conform to all express warranties, the manufacturer, its agent or authorized dealer shall make those repairs necessary to conform the vehicle to the express warranties if the consumer reports the nonconformity to the manufacturer, its agent or authorized dealer during the term of the express warranties, within a period of 2 3 years following the date of original delivery of the motor vehicle to a consumer, or during the first 18,000 miles of operation of that motor vehicle, whichever is the earlier date occurs earliest. This obligation exists notwithstanding the fact that the repairs are made after the expiration of the appropriate time period.

     2. Failure to make effective repair. If the manufacturer or its agents or authorized dealers are unable to conform the motor vehicle to any applicable express warranty by repairing or correcting any defect or condition, or combination of defects or conditions, which that substantially impairs the use, safety or value of the motor vehicle after a reasonable number of attempts, the manufacturer shall either replace the motor vehicle with a comparable new motor vehicle or accept return of the vehicle from the consumer and make a refund to the consumer and lienholder, if any, as their interests may appear. The consumer may reject any offered replacement and receive instead a refund. The refund shall must consist of the following items, less a reasonable allowance for use of the vehicle:

The provisions of this section shall do not affect the obligations of a consumer under a loan or sales contract or the secured interest of any secured party. The secured party shall consent to the replacement of the security interest with a corresponding security interest on a replacement motor vehicle which that is accepted by the consumer in exchange for the motor vehicle, if the replacement motor vehicle is comparable in value to the original motor vehicle. If, for any reason, the security interest in the new motor vehicle having a defect or condition is not able to be replaced with a corresponding security interest on a new motor vehicle accepted by the consumer, the consumer shall accept is entitled to a refund. Refunds required under this section shall must be made to the consumer and the secured party, if any, as their interests exist at the time the refund is to be made. Similarly, refunds to a lessor and lessee shall must be made as their interests exist at the time the refund is to be made.

     3. Reasonable number of attempts; presumption. There is a presumption that a reasonable number of attempts have been undertaken to conform a motor vehicle to the applicable express warranties if:

     3-A. Final opportunity to repair. If the manufacturer or his its agents have been unable to make the repairs necessary to conform the vehicle to the express warranties, the consumer shall notify, in writing, the manufacturer or the authorized dealer of his the consumer's desire for a refund or replacement. This notice can be given after one repair attempt if the nonconformity has resulted in a serious failure of either the braking or steering systems in the vehicle. For the 7 business days following receipt by the dealer or the manufacturer of this notice, the manufacturer shall have has a final opportunity to correct or repair any nonconformities. This final repair effort shall must be at a repair facility that is reasonably accessible to the consumer. This repair effort shall does not stay the time period within which the manufacturer must provide an arbitration hearing pursuant to section 1165.

     4. Time limit; extension. The term of an express warranty, the one-year and 2-year periods the 18,000 mileage term, the 3-year period following delivery and the 15-day period provided in subsection 3, paragraph B, shall must be extended by any period of time during which repair services are not available to the consumer because of a war, invasion, or strike or fire, flood or other natural disaster.

     5. Dealer liability. Nothing in this chapter may be construed as imposing any liability on a dealer or creating a cause of action by a consumer against a dealer under this section, except regarding any written express warranties made by the dealer apart from the manufacturer's own warranties.

     6. Disclosure of notice requirement. No consumer may be required to notify the manufacturer of a claim under this section, unless the manufacturer has clearly and conspicuously disclosed to the consumer, in the warranty or owner's manual, that written notification of the nonconformity is required before the consumer may be eligible for a refund or replacement of the vehicle. The manufacturer shall include with the warranty or owner's manual the name and address to which the consumer shall send the written notification.

     6-A. Notification of dealer. Consumers may also satisfy a manufacturer's notice requirement by notifying in writing the authorized dealer of a claim under this section. The dealer shall act as the manufacturer's agent and immediately communicate to the manufacturer the consumer's claim.

     7. Disclosure at time of resale for failure to make effective repair. No A motor vehicle which that is returned to the manufacturer under subsection 2, may not be resold without clear and conspicuous written disclosure to any subsequent purchaser, whether that purchaser is a consumer or a dealer, of the following information:

     8. Disclosure at time of retail sale under settlement agreement. A motor vehicle that is surrendered to a manufacturer as a result of a settlement of a state-certified arbitration must, at the time that motor vehicle is first offered for retail sale to the public, be affixed with a clear and conspicuous written disclosure stating that the vehicle was the subject of a Maine Lemon Law settlement agreement.

     Sec. 6. 10 MRSA §1168, sub-§1, ¶¶A and B, as enacted by PL 1987, c. 359, §8, are amended to read:

     Sec. 7. 10 MRSA §1169, sub-§1, as amended by PL 1999, c. 212, §4, is further amended to read:

     1. Neutral motor vehicle arbitration. All manufacturers shall submit to state-certified, new car motor vehicle arbitration if arbitration is requested by the consumer within 2 3 years from the date of original delivery to the consumer of a new motor vehicle or within the term of the express warranties, whichever comes first, and the State has accepted the application as making proper Maine Lemon Law claims. State-certified arbitration must be performed by one or more neutral arbitrators selected by the Department of the Attorney General operating in accordance with the rules adopted pursuant to this chapter. The Attorney General may contract with an independent entity to provide arbitration or the Attorney General's office may appoint neutral arbitrators. Each party to an arbitration is entitled to one rejection of a proposed arbitrator.

Effective September 13, 2003, unless otherwise indicated.

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