SB 693 — AN ACT CONCERNING CHANGES TO STATUTES CONCERNING HEALTH CLUB CONTRACTS AND THE AUTOMOBILE LEMON LAW.

(b) If any motor vehicle purchased at any time on or after October 1, 1984, or leased at any time on or after June 17, 1987, fails to conform to suchapplicablewarrantiesasdefinedinsaidsection42-179,asamended sSB693by /this Fileact, a consumer may bring a grievance to an arbitrator if the manufacturer of the vehicle has not established an informal dispute LCO {\\PRDFS1\SCOUSERS\FORZANOF\WS\2021SB-0069 of 16 R02-SB.docx } Substitute Bill No.

355693 9settlement sSB693procedure Filewhich No.the Attorney General has certified as complying in all respects with the requirements of said section 42-179, as amended by this act.

355 by this act, a consumer may bring a grievance to an arbitrator if the manufacturer of the vehicle has not established an informal dispute settlement procedure which the Attorney General has certified as complying in all respects with the requirements of said section 42-179, as amended by this act.

Initial determinations to reject a complaint for arbitration shall be submitted to an arbitrator for a final decision upon receipt of a written request from the consumer for a review of the initial eligibility determination and a filing fee of fifty sSB693dollars. / File No.

355If 10a sSB693complaint Fileis accepted for arbitration, an arbitrator may determine that a complaint does not allege that the manufacturer has LCO {\\PRDFS1\SCOUSERS\FORZANOF\WS\2021SB-0010 of 16 R02-SB.docx } Substitute Bill No.

355693 dollars.failed to comply with section 42-179, as amended by this act at any time before such arbitrator renders its decision on the merits of the dispute.

If a complaint is accepted for arbitration, an arbitrator may determine that a complaint does not allege that the manufacturer has failed to comply with section 42-179, as amended by this act at any time before such arbitrator renders its decision on the merits of the dispute.

An arbitratorshall,asexpeditiouslyaspossible,butnotlaterthansixtydays sSB693after /the Filetime the consumer files the complaint form together with the LCO {\\PRDFS1\SCOUSERS\FORZANOF\WS\2021SB-0011 of 16 R02-SB.docx } Substitute Bill No.

355693 11filing sSB693fee, Filerender No.a fair decision based on the information gathered and disclose his or her findings and the reasons therefor to the parties involved.

355 after the time the consumer files the complaint form together with the filing fee, render a fair decision based on the information gathered and disclose his or her findings and the reasons therefor to the parties involved.

The manufacturer shall act in good sSB693LCO /{\\PRDFS1\SCOUSERS\FORZANOF\WS\2021SB-0012 Fileof 16 R02-SB.docx } Substitute Bill No.

355693 12faith sSB693in Fileabiding No.by any arbitration decision.

355 faith in abiding by any arbitration decision.

Any such fines shall be deposited sSB693LCO /{\\PRDFS1\SCOUSERS\FORZANOF\WS\2021SB-00613 Fileof 16 R02-SB.docx } Substitute Bill No.

355693 13into sSB693the Filenew No.automobile warranties account established pursuant to section 42-190, as amended by this act.

355 into the new automobile warranties account established pursuant to section 42-190, as amended by this act.

[(f)] (h) Any consumer injured by the operation of any procedure which does not conform with procedures established by a manufacturer sSB693LCO /{\\PRDFS1\SCOUSERS\FORZANOF\WS\2021SB-0014 Fileof 16 R02-SB.docx } Substitute Bill No.

355693 14pursuant sSB693to Filesubsection No.(b) of section 42-182 and the provisions of Title 16 Code of Federal Regulations Part 703, as in effect on October 1, 1982, may appeal any decision rendered as the result of such a procedure by requesting arbitration de novo of the dispute by an arbitrator.

355 pursuant to subsection (b) of section 42-182 and the provisions of Title 16 Code of Federal Regulations Part 703, as in effect on October 1, 1982, may appeal any decision rendered as the result of such a procedure by requesting arbitration de novo of the dispute by an arbitrator.

(b) The surcharge assessed pursuant to this section shall be at a rate of three dollars per motor vehicle, as defined in section 42-179, as amendedLCO by{\\PRDFS1\SCOUSERS\FORZANOF\WS\2021SB-0015 thisof act.16 R02-SB.docx } Substitute Bill No.

Such693 surchargeamended shall be collected by eachthis licenseeact. sSB693 / File No.

355Such 15surcharge sSB693shall Filebe No.collected by each licensee under section 14-52 engaged in the sale or lease of motor vehicles, as defined in section 42-179, as amended by this act, in this state.

355 under section 14-52 engaged in the sale or lease of motor vehicles, as defined in section 42-179, as amended by this act, in this state.

Section 1 October 1, 2021 Section 1 21a-218(a) Sec.

sSB693JUD /Joint FileFavorable No.LCO {\\PRDFS1\SCOUSERS\FORZANOF\WS\2021SB-00693-16 of 16 R02-SB.docx }

355 16 sSB693 File No.

355 The following Fiscal Impact Statement and Bill Analysis are prepared for the benefit of the members of the General Assembly, solely for purposes of information, summarization and explanation and do not represent the intent of the General Assembly or either chamber thereof for any purpose.

In general, fiscal impacts are based upon a variety of informational sources, including the analyst’s professional knowledge.

Whenever applicable, agency data is consulted as part of the analysis, however final products do not necessarily reflect an assessment from any specific department.

OFA Fiscal Note State Impact:

Agency Affected Fund-Effect FY 22 $ FY 23 $ Consumer Protection, Dept.

New Automobile See Below See Below Warranties Account - Potential Revenue Gain Note:

GF=General Fund Municipal Impact:

None Explanation The bill makes various changes to the automobile lemon law resulting in a potential revenue gain to the new automobile warranties account described below.

• Section 3 allows the Department of Consumer Protection (DCP) to impose a fine of up to $10,000 per day for a manufacturer who fails to stamp a title as required by law resulting in a potential revenue gain to the extent violations occur.

• Section 4 allows DCP to fine a manufacturer up to $1,000 per day if the manufacturer fails to perform repairs by the applicable date set by the arbitrator resulting in a potential revenue gain to the extent violations occur.

• Section 5 allows DCP to assess a late fee of $2 per vehicle for new automobile warranties account surcharges that are late resulting in a potential revenue gain to the extent surcharges are late.

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355 The Out Years The annualized ongoing fiscal impact identified above would continue into the future subject to the number of violations.

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355 OLR Bill Analysis sSB 693 AN ACT CONCERNING CHANGES TO STATUTES CONCERNING HEALTH CLUB CONTRACTS AND THE AUTOMOBILE LEMON LAW.

SUMMARY This bill makes various changes to the new motor vehicle lemon law (hereinafter“lemonlaw”).Amongotherthings,it(1)requiresadditional manufacturers to stamp their vehicles indicating they are lemon law buybacks, (2) requires consumers in arbitration to provide notice about the arbitration before selling their motor vehicle, and (3) fines manufacturers that fail to stamp within the specified time period or fail to perform arbitration awards.

The bill also requires dealers to remit payments to the new automobile warranties account in an annual lump sum.

(Generally, the lemon law gives a consumer the right to arefund or replacement vehicle if, after a reasonable number of repair attempts (see BACKGROUND), a manufacturer cannot make the consumer’s vehicle conform to its warranty, including through an arbitration process administered by the Department of Consumer Protection (DCP).) Additionally, the bill requires health clubs to (1) allow members to cancel their memberships by email and, (2) for contracts subject to automatic renewal, provide written notice about the renewal at the beginning of the contract.

Lastly, the bill makes technical and conforming changes.

EFFECTIVE DATE:

October 1, 2021 §§ 3-5 ─ NEW MOTOR VEHICLE LEMON LAW Incidental Damages (§ 3) sSB693 / File No.

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355 The lemon law establishes a consumer’s right to a refund or replacement vehicle if, after a reasonable number of repair attempts, a manufacturer cannot make the consumer’s vehicle conform to applicable express warranties.

Under the law’s provisions, a “motor vehicle” means passenger motor vehicles, certain commercial motor vehicles, or a motorcycle, which is sold or leased in this state (CGS § 42- 179).

By law, a refund must include, among other things, all incidental damages,lessareasonableamountfortheconsumer’suseofthevehicle.

The bill expands what is considered incidental damages to include any commercially reasonable charges or expenses for (1) covering, returning, or disposing of the vehicle;

(2) making reasonable efforts to minimize or avoid the consequences of financial default related to the vehicle;

and (3) effectuating other remedies after a defect or condition that substantially impaired the vehicle has been reported to a dealership or manufacturer.

As under current law, incidental damages also include expenses for the vehicle’s inspection, receipt, transportation, care, and custody.

Stamp (§ 3) The bill requires manufacturers that buy back a vehicle under the lemon law to stamp the vehicle with “MANUFACTURER BUYBACK- LEMON” instead of “MANUFACTURER BUYBACK” as current law requires.

It requires that this stamp be added to all lemon law returns, including (1) vehicles returned through arbitration and (2) returns accepted by the manufacturer due to a nonconformity or defect, in exchange for a refund or a replacement vehicle, whether by an administrative or judicial determination.

Current law requires the stamp only for settlements.

The bill increases, from 10 to 30 days after receiving the title, the deadline by which a manufacturer must stamp the title and submit a copy to the Department of Motor Vehicles.

As under current law, the manufacturer must make this stamp clearly and conspicuously on the face of the original title in letters at least ¼ inch high.

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355 The bill allows DCP to fine manufacturers up to $10,000 if they fail to stamp a title within 30 days after receiving the vehicle.

The fine must be deposited in the new automobile warranties account.

A manufacturer aggrieved by a fine may, within 10 days after receiving written notice of the fine from DCP, make a written request for a hearing.

Under the bill, DCP must, upon receiving all documentation needed to evaluate the request, determine whether circumstances beyond the manufacturer’s control prevented performance.

The department may also conduct a hearing under the Uniform Administrative Procedure Act, if appropriate.

The bill allows the DCP commissioner to adopt regulations to implement these provisions.

Arbitration Notice (§ 4) The lemon law allows consumers to apply for arbitration through DCP by submitting applicable forms and a $50 filing fee to the department.

Under the bill, if a consumer files for arbitration but sells the vehicle before a decision or settlement, then he or she must notify theindividualorentitybuying thevehiclethatanactionispending with DCP under the lemon law program.

The consumer must give this notice before the buyer executes a bill of sale and must include any DCP- provided case number or reference number.

The consumer must also (1) notify DCP about the sale within five days after the buyer executes the bill of sale, (2) provide DCP with the buyer’s name and contact information, and (3) attest that notice of the pending action was given to the buyer before the sale.

Failure to Perform (§ 4) The bill allows DCP to fine a manufacturer up to $1,000 per day if it fails to perform all remedies awarded by the arbitrator by the applicable performance date the arbitrator specified.

This authority applies if the award’s enforcement has not been stayed by a court or otherwise modified by the arbitrator.

DCP may impose the fine each day until the manufacturer fully performs as specified under the award.

Any fine must be deposited in the new automobile warranties account.

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355 manufacturer aggrieved by a fine may appeal in the same manner as under the failure to stamp fine (see above).

New Automobile Warranties Account (§ 5) By law, DCP may use the new automobile warranties account to implement the lemon law.

The account is funded by a $3 surcharge on each sale or lease of a new vehicle in the state and is collected by licensees (i.e., dealers).

The bill requires dealers to pay the surcharges they collect in a calendaryearinalumpsumtoDCPbythefollowingMarch31.Itallows DCP to assess a $2 per-vehicle late fee.

§§ 1 & 2 ─ HEALTH CLUB CONTRACTS Cancellation by Email Current law requires consumers seeking to cancel a health club contract to do so by certified or registered mail.

The bill (1) allows them to also cancel the contract by email by providing written notice to the health club’s email address and (2) eliminates the requirement that a mailed cancellation be sent by certified or registered mail.

It makes conforming changestothecontract’sstatement oftheconsumer’srights, which by law must include a conspicuous caption:

“BUYER’S RIGHT TO CANCEL” and a statement regarding how to cancel the contract.

The bill additionally requires that each contract renewed on or after October 1, 2021, revise the BUYER’S RIGHT TO CANCEL language to provide for e-mail cancellations.

Notice of Automatic Renewal The bill requires health clubs, for contracts subject to automatic renewal, to provide written notice of the renewal to consumers when they enter into the contract.

The notice must be conspicuously printed on the contract’s first page and be in bold, 14-point print.

By law, contracts may not automatically renew for more than one month at a time.

BACKGROUND sSB693 / File No.

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355 Lemon Law Applicability The lemon law offers protections for a new vehicle when it has a defect that substantially impairs its use, safety, or value, and the vehicle has been:

1.

repaired four or more times during the first 24,000 miles or two years of service;

2.

out of service for a total of 30 days during the same period and the defect remains;

or 3.

repaired at least twice during the first year or the warranty term, whichever is shorter, and the defect is likely to cause death or serious bodily injury if the vehicle is driven (CGS § 42-179).

COMMITTEE ACTION General Law Committee Joint Favorable Substitute Yea 18 Nay 0 (03/23/2021) sSB693 / File No.

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