HB2934.DOC

SECTION 1. Section 481J-2, Hawaii Revised Statutes, is amended as follows:

1. By amending subsection (c) to read:

"(c) The written warranty shall require the dealer or its agent to repair or, at the election of the dealer, reimburse the consumer for the reasonable costs of repairing the failure of a covered part[.]; provided that where the used motor vehicle becomes mechanically unsound or inoperable within seventy-two hours of the purchase, the written warranty shall require the dealer to refund the purchase price of the vehicle; provided further that chapter 481C, on door-to-door sales, shall not apply to that refund. Covered parts shall at least include the following items:

(1) Engine, including all lubricated parts, water pump, fuel pump, manifolds, engine block, cylinder head, rotary engine housings, flywheel, gaskets, and seals;

(2) Transmission, including the transmission case, internal parts, torque converter, gaskets, and seals, except four-wheel drive vehicles shall be excluded from coverage as provided for in this paragraph;

(3) Drive axle, including front and rear drive axle housings and internal parts, axle shafts, propeller shafts, and universal joints, except four-wheel drive vehicles shall be excluded from coverage as provided in this paragraph;

(4) Brakes, including master cylinder, vacuum assist booster, wheel cylinders, hydraulic lines and fittings, and disc brake calipers;

(5) Radiator;

(6) Steering, including the steering gear housing and all internal parts, power steering pump, valve body, piston, and rack; and

(7) Alternator, generator, starter, and ignition system, excluding the battery."

2. By amending subsection (f) to read:

"(f) A consumer shall return a vehicle for repair or a refund under this section by presenting it to the dealer prior to the expiration of the applicable warranty period and providing written notice to the dealer of the defect. The dealer shall immediately accept return of a vehicle when it is so presented. The used motor vehicle shall be deemed out of service commencing the day it is presented, notwithstanding any dealer's failure to accept its return on that day.

During the applicable warranty period and the return period, the dealer shall pay the reasonable costs of towing from the point of breakdown up to fifteen miles to obtain the required repairs or to return the vehicle to the dealer."

SECTION 2. Section 481J-3, Hawaii Revised Statutes, is amended by amending subsection (d) to read as follows:

"(d) A used motor vehicle may be sold "as is" by a dealer only if it falls within the exemptions set out in this section[.]; provided that a used motor vehicle that is sold "as is" shall be subject to section 481J-2(a). No "as is" disclaimer by a dealer shall be enforceable unless all of the following conditions are met:

(1) A disclaimer shall appear on the front page of the contract of sale, which shall read as follows:

"AS IS"

THIS VEHICLE IS SOLD "AS IS". YOU WILL HAVE TO PAY FOR ANY REPAIRS NEEDED AFTER SALE. HOWEVER, IF THE VEHICLE BREAKS DOWN WITHIN 72 HOURS OF THE SALE, YOU HAVE A RIGHT TO RETURN THE VEHICLE TO US FOR A FULL REFUND. IF WE HAVE MADE ANY PROMISES TO YOU, THE LAW SAYS WE MUST KEEP OUR PROMISES, EVEN IF WE SELL "AS IS". TO PROTECT YOURSELF, ASK US TO PUT ALL PROMISES IN WRITING.

(2) The text of the disclaimer shall be printed in twelve-point boldface type, except the heading, which shall be in sixteen-point extra boldface type. The entire notice shall be boxed.

(3) The consumer shall sign the consumer's name and the date within the box containing the disclaimer prior to sale. A copy of the signed disclaimer shall be kept by the dealer for a two-year period from the date of the consumer's signature."

SECTION 3. Section 481J-6, Hawaii Revised Statutes, is amended by amending the title and subsection (a) to read as follows:

"§481J-6 Failure to honor warranty[.]; mechanical unsoundness or inoperability within seventy-two hours of purchase. (a) If the dealer or its agent fails to correct a defect or malfunction as required by the warranty specified in section 481J-2 after a reasonable period of time[,] or the used motor vehicle becomes mechanically unsound or inoperable within seventy-two hours of the purchase, the dealer shall accept return of the used motor vehicle from the consumer and refund the full purchase price, including general excise tax, less a reasonable allowance for any damage not attributable to normal wear or usage, and with an adjustment for any modifications which either increase or decrease the market value of the vehicle. A reasonable allowance for use shall be fifteen cents for each mile the used motor vehicle has been operated between its sale and its return."

SECTION 4. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 6. This Act shall take effect upon its approval.

INTRODUCED BY:	_____________________________

HOUSE OF REPRESENTATIVES	H.B. NO.	2934
TWENTY-FIFTH LEGISLATURE, 2010
STATE OF HAWAII