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RULE PROPOSALS
VOLUME 41, ISSUE 22
ISSUE DATE: NOVEMBER 16, 2009
LAW AND PUBLIC SAFETY
DIVISION OF CONSUMER AFFAIRS
OFFICE OF THE DIRECTOR
AUTOMOTIVE DISPUTE RESOLUTION

Proposed Amendments: N.J.A.C. 13:45A-26.1, 26.2, 26.3 and 26.5

Purpose and Scope; Definitions; Statements to Consumer; Other Notices; Preliminary Steps to Initiate a Lemon Law Action within the Division of Consumer Affairs Lemon Law Unit

Authorized By: David Szuchman, Director, Division of Consumer Affairs.

Authority: N.J.S.A. 56:12-49.

Calendar Reference: See Summary below for explanation of exception to calendar requirement.

Proposal Number: PRN 2009-343 .

Submit written comments by January 15, 2010 to:

David Szuchman, Director

State of New Jersey

Division of Consumer Affairs

Office of the Director

P.O. Box 45027

Newark , New Jersey 07101

The agency proposal follows:

Summary

P.L. 2009, c. 128 amended N.J.S.A. 56:12-29 et seq., the Lemon Law Act (Act). The Division of Consumer Affairs (Division) proposes amendments to N.J.A.C. 13:45A-26 to carry out P.L. 2009, c. 128.

The Division proposes to amend N.J.A.C. 13:45A-26.1 to clarify that the rules in Subchapter 26 apply to motor homes, as well as passenger cars. Amendments are proposed to N.J.A.C. 13:45A-26.2 to amend the definition of "motor vehicle" to clarify that it does not include the living facilities of motor homes, and to add a new definition for "examination," which is one performed by a service technician on behalf of a manufacturer or dealer. The Division also proposes to amend the definition of "term of protection" to reflect that P.L. 2009, c. 128 increases the miles of operation covered under the Act from 18,000 to 24,000.

Prior to the enactment of P.L. 2009, c. 128, N.J.S.A. 56:12-34 specified the wording of the statement that manufacturers are required to provide to consumers advising of their rights and remedies under the Act. P.L. 2009, c. 128 deletes the current statutory wording of the notification, which must be in English and Spanish, in favor of wording prescribed by the Director of the Division. N.J.A.C. 13:45A-26.3 is proposed for amendment to provide wording for this new statement. A provision in subsection (a) that required manufacturers to maintain records has been relocated to proposed new subsection (b) to clarify that this requirement is not part of the notification that manufacturers must provide consumers.

The Division proposes to amend N.J.A.C. 13:45A-26.5 to reflect that P.L. 2009, c. 128 increases the term of protection under the Act from 18,000 to 24,000 miles.

N.J.S.A. 56:12-29 et seq., provides relief for a consumer who has purchased or leased a new motor vehicle if there is a nonconformity in the new motor vehicle that the manufacturer or its dealer is unable to repair or correct within a reasonable time. Prior to the enactment of P.L. 2009, c. 128, under N.J.S.A. 56:12-33 there were two circumstances that create a presumption that a manufacturer cannot repair or correct a nonconformity in a motor vehicle: if substantially the same nonconformity has been subject to repair three or more times and the nonconformity continues to exist, or the motor vehicle has been out of service because of repairs for nonconformities for a cumulative total of 20 or more calendar days after delivery and a nonconformity continues to exist. The presumption applies only if the manufacturer is given written notice, by certified mail, return receipt requested, by the consumer of a potential lemon law claim and the manufacturer is given one additional opportunity to repair the nonconformity.

P.L. 2009, c. 128 establishes a third circumstance that creates the presumption. If a nonconformity is likely to cause death or serious injury, it is presumed that a manufacturer or dealer cannot repair or correct the nonconformity if the motor vehicle has been subject to one repair or examination and the nonconformity continues to exist. In this circumstance too, the consumer is required to provide written notice to the manufacturer and to give the manufacturer one additional opportunity to repair the nonconformity. The Division proposes to amend N.J.A.C. 13:45A-26.5 to include this new basis for the presumption. The rule is also proposed for recodification to clarify the bases for the presumption.

P.L. 2009, c. 128 contains three provisions affecting motor homes. The first provides that, when a motor home has been constructed by more than one manufacturer, to be considered an examination or repair attempt under the Act, the repair facility that performs the examination or repair attempt must be authorized by the manufacturer who constructed the non-conforming portion of the motor home. The second provides that when an examination or repair attempt is not completed because the owner of a motor home decides to continue his or her travels, it will not be considered an examination or repair attempt under the Act. The third provision increases from 20 or more to 45 or more, the number of calendar days that a motor home is out of service in order to create a presumption that a manufacturer cannot repair or correct a nonconformity under the Act. The Division proposes to amend N.J.A.C. 13:45A-26.5 to include these three motor home provisions in the rule.

As the Division has provided a 60-day comment period on this notice of proposal, this notice is excepted from the rulemaking calendar requirement pursuant to N.J.A.C. 1:30-3.3(a)5.

Social Impact

The proposed amendments will benefit consumers who purchase or lease motor vehicles containing a nonconformity by expanding the term of protection. The proposed amendments also provide that if the nonconformity is likely to cause death or serious bodily injury, the presumption that a manufacturer or dealer cannot repair or correct the nonconformity can be established if, after one attempt to repair, the manufacturer has received written notice of the defect by certified mail, return receipt requested, and has had a final opportunity to correct the defect or condition within 10 calendar days after receipt of the notice and the nonconformity continues to exist. The proposed amendments also protect consumers by requiring that the notification that must be provided to consumers in English and Spanish when they purchase or lease new motor vehicles summarize the rights and remedies afforded by the Act.

Economic Impact

The proposed amendments may impose costs on manufacturers and dealers in that the extension of the term of protection and new circumstances that afford protections under the Act could result in more claims being brought to the Division's Lemon Law Unit. Manufacturers and dealers may also incur costs in producing the new statement to consumers that is required by the proposed amendments. The proposed amendments may have a beneficial economic impact on consumers by enabling them to pursue lemon law claims during an expanded term of protection. The Division has received calls from many consumers with new car problems who had already driven their cars more than 18,000 miles in less than two years.

Federal Standard Statement

A Federal standards analysis is not required because there are no Federal laws or standards applicable to the proposed amendments.

Jobs Impact

The Division does not believe that the proposed amendments will either increase or decrease the number of jobs in New Jersey .

Agriculture Industry Impact

The Division does not expect the amendments to have any impact on the agriculture industry in the State.

Regulatory Flexibility Analysis

The Regulatory Flexibility Act (Act), N.J.S.A. 52:14B-16 et seq., requires the Division to estimate the impact of rules on small businesses to which the rules will apply. If, for purposes of the Act, manufacturers [page=4188] and dealers are "small businesses" within the meaning of the statute, the following analysis applies.

The economic impact of the proposed amendments on small businesses is the same as that for all businesses as detailed in the Economic Impact above. The Director does not believe that manufacturers and dealers will need to employ professional services in order to comply with the proposed amendments. The proposed amendments impose no reporting or recordkeeping requirements, but do impose compliance requirements as detailed in the Summary above.

In order to ensure that the protections afforded by the proposed amendments benefit all consumers, no differing compliance requirements have been established for small businesses and the rules will be applied uniformly to all manufacturers and dealers.

Smart Growth Impact

The proposed amendments will have no impact on the achievement of smart growth and implementation of the State Development and Redevelopment Plan.

Housing Affordability Impact

The proposed amendments will have an insignificant impact on affordable housing in New Jersey and there is an extreme unlikelihood that the regulation would evoke a change in the average costs associated with housing because the proposed amendments concern protections provided to purchasers of motor vehicles.

Smart Growth Development Impact

The proposed amendments will have an insignificant impact on smart growth and there is an extreme unlikelihood that the regulation would evoke a change in housing production in Planning Areas 1 or 2 or within designated centers under the State Development and Redevelopment Plan in New Jersey because the proposed amendments concern protections provided to purchasers of motor vehicles.

Full text of the proposal follows (additions indicated in boldface thus ; deletions indicated in brackets [thus]):

SUBCHAPTER 26. AUTOMOTIVE DISPUTE RESOLUTION

13:45A-26.1 Purpose and scope

(a) (No change.)

(b) This subchapter is applicable to:

1. All manufacturers of passenger [cars] automobiles and motorcycles registered, sold or leased in the State of New Jersey ;

2.-3. (No change.)

13:45A-26.2 Definitions

As used in this subchapter, the following words shall have the following meanings:

. . .

"Examination" means an examination of the motor vehicle by a service technician performed by or on the behalf of a manufacturer or its dealer.

. . .

"Motor vehicle" means a passenger automobile or motorcycle as defined in N.J.S.A. 39:1-1, that is registered, sold or leased in the State of New Jersey, whether purchased, leased[,] or repaired in the State or outside the State , except the living facilities of motor homes .

. . .

"Term of protection" means within the first [18,000] 24,000 miles of operation or the two years following the original date of delivery of the motor vehicle to the consumer, whichever is the earlier date.

. . .

13:45A-26.3 Statements to consumer; other notices

(a) At the time of purchase or lease of a motor vehicle in the State of New Jersey , the manufacturer, through its dealer or lessor, shall provide the following written statement in English and Spanish directly to the consumer on a separate piece of paper, in at least 10-point bold-face type:

["]IMPORTANT: IF THIS VEHICLE [IS DEFECTIVE] HAS A DEFECT THAT SUBSTANTIALLY IMPAIRS ITS USE, VALUE OR SAFETY OR THAT IS LIKELY TO CAUSE DEATH OR SERIOUS BODILY INJURY IF DRIVEN, AND WAS PURCHASED, LEASED OR REGISTERED IN NEW JERSEY , YOU MAY BE ENTITLED UNDER NEW [JERSEY] JERSEY'S LEMON LAW TO A REFUND OF THE PURCHASE PRICE OR YOUR LEASE PAYMENTS.

Here is a summary of your rights:

1. To qualify for relief under the New Jersey Lemon Law, you must give the manufacturer or its dealer the opportunity to repair or correct the defect in the vehicle within the Lemon Law's term of protection, which is the first 24,000 miles of operation or two years after the vehicle's original date of delivery, whichever is earlier.

2. If the manufacturer or its dealer is unable to repair or correct a defect within a reasonable time, you may be entitled to return the vehicle and receive a full refund, minus a reasonable allowance for vehicle use.

3. It is presumed that the manufacturer or its dealer is unable to repair or correct the defect if substantially the same defect continues to exist after the manufacturer has received written notice of the defect by certified mail, return receipt requested, and has had a final opportunity to correct the defect or condition within 10 calendar days after receipt of the notice. This notice must be received by the manufacturer within the term of protection and may be given only after (i) the manufacturer or its dealer has had two or more attempts to correct the defect; (ii) the manufacturer or its dealer has had at least one attempt to correct the defect if the defect is one that is likely to cause death or serious bodily injury if the vehicle is driven; or (iii) the vehicle has been out of service for repair for a cumulative total of 20 or more calendar days, or in the case of a motor home, 45 or more days.

4. If substantially the same defect continues to exist after the manufacturer has had the final opportunity to repair or correct the defect, you may file an application for relief under New Jersey 's Lemon Law.

FOR COMPLETE INFORMATION REGARDING YOUR RIGHTS AND REMEDIES UNDER THE RELEVANT LAW, INCLUDING THE MANUFACTURER'S ADDRESS TO GIVE NOTICE OF THE DEFECT, CONTACT THE NEW JERSEY DEPARTMENT OF LAW AND PUBLIC SAFETY, DIVISION OF CONSUMER AFFAIRS, LEMON LAW UNIT, AT POST OFFICE BOX 45026, NEWARK, NEW JERSEY 07101, TEL. NO. (973) 504-6226.["]

IMPORTANTE: SI ESTE VEHICULO TIENE UN DEFECTO QUE SUBSTANCIALMENTE AFECTA SU USO, VALOR O SEGURIDAD, O QUE PUEDE CAUSAR MUERTE O SERIO DANO CORPORAL SI SE MANEJA, Y FUE COMPRADO, ARRENDADO O REGISTRADO EN NUEVA JERSEY, USTED PUEDE TENER EL DERECHO BAJO LA LEY DE LIMON DEL ESTADO DE NUEVA JERSEY A UN REEMBOLSO DEL PRECIO DE COMPRA O A LOS PAGOS DE SU ARRENDAMIENTO.

Aqui le damos un sumario de sus derechos:

1. Para calificar por compensacion bajo la Ley de Limon de Nueva Jersey, usted debe darle al fabricante o a su concesionario la oportunidad de reparar o corregir el defecto del vehiculo dentro del termino de proteccion bajo la Ley de Limon, que son las 24,000 millas primeras de operacion o dos anos despues de la fecha original de la entrega del vehiculo o lo que suceda primero.

2. Si el fabricante o su concesionario no puede arreglar o corregir el defecto dentro de un tiempo razonable, usted puede tener el derecho de devolver el vehiculo y recibir un reembolso completo, menos un descuento por el uso del vehiculo.

3. Si se supone que el fabricante o su concesionario no puede reparar o corregir el defecto y si substancialmente el mismo defecto continua existiendo despues que el fabricante ha recibido un aviso del defecto, mandado por correo certificado con recibo de retorno, y ha tenido una oportunidad final para corregir el defecto o condicion dentro de los 10 dias naturales despues de recibir el aviso. Este aviso tiene que ser recibido por el fabricante dentro del termino de proteccion y solo se puede dar despues que (i) el fabricante o su concesionario ha intentado dos o mas veces de corregir el defecto; (ii) el fabricante o su concesionario ha intentado por lo menos una vez de [page=4189] corregir el defecto si el defecto es uno que puede causar la muerte o serio dano corporal si el vehiculo se maneja; o (iii) el vehiculo ha estado fuera de servicio por reparos por una acumulacion total de 20 dias naturales o mas, o en el caso de una casa rodante motorizada ( motorhome ) de 45 dias o mas.

4. Si substancialmente el mismo defecto continua existiendo despues que el fabricante ha tenido la ultima oportunidad de reparar o corregir el defecto, usted puede presentar una solicitud para compensacion bajo la Ley de Limon de Nueva Jersey.

PARA INFORMACION COMPLETA ACERCA DE SUS DERECHOS Y RECURSOS BAJO ESTA LEY, INCLUYENDO LA DIRECCION DEL FABRICANTE PARA NOTIFICARLE EL DEFECTO, PONGASE EN CONTACTO CON: NEW JERSEY DEPARTAMENT OF LAW AND PUBLIC SAFETY, DIVISION OF CONSUMER AFFAIRS, LEMON LAW UNIT, POST OFFICE BOX 45026, NEWARK, NEW JERSEY 07101, NUMERO DE TELEFONO: 973-504-6226

(b) The manufacturer, through its dealer or lessor, shall maintain a record substantiating compliance with [this section] (a) above and shall make the record available to the Division upon request.

Recodify existing (b)-(d) as (c)-(e) (No change in text.)

13:45A-26.5 Preliminary steps to initiate a Lemon Law action within the Division of Consumer Affairs Lemon Law Unit

(a) To initiate a claim within the Division of Consumer Affairs Lemon Law Unit under the Lemon Law[, written] :

1. Written notification of the potential claim shall be sent certified mail, return receipt requested, by or on behalf of a consumer, to the manufacturer of a nonconforming motor vehicle if [either] and only after one of the following occurs during the first [18,000] 24,000 miles of operation or within 24 months after the date of original delivery, whichever is earlier:

[1.] i. [Substantially] Except as set forth in (a)1iii below, substantially the same nonconformity has been subject to examination or repair two or more times by the manufacturer or its dealer and the nonconformity continues to exist; [or]

[2.] ii. The motor vehicle has been out of service by reason of repair for one or more nonconformities for a minimum of 20 days , or in the case of a motor home, for a minimum of 45 days, since the original delivery of the motor vehicle, and a nonconformity continues to exist[.] ; or

iii. In the case of nonconformity that is likely to cause death or serious bodily injury if the vehicle is driven, the nonconformity has been subject to examination or repair at least once by the manufacturer or its dealer and the nonconformity continues to exist; and

[(b)] 2. The manufacturer has one more opportunity to examine, repair or correct the nonconformity within 10 days following receipt of the written notification from the consumer of a potential claim provided for in (a)1 above . If the nonconformity continues to exist after expiration of the 10-day time period and the manufacturer refuses to replace or refund the price of the vehicle, the consumer may pursue a Lemon Law claim with the Lemon Law Unit.

[(c)] (b) (No change in text.)

(c) When a motor home has been constructed by more than one manufacturer, an examination or repair attempt will not count towards the examination or repair attempts referred to in (a)1 above, if the repair facility is not authorized to provide services by the manufacturer who constructed the nonconforming portion of the motor home.

(d) If a nonconformity in a motor home is addressed more than once due to a consumer's decision to continue travelling and to seek examination or repair of the same nonconformity at another authorized repair facility rather than waiting for the examination or repair to be completed at the initial repair facility, it shall constitute one examination or repair for the purpose of the examination or repair attempts referred to in (a)1 above.


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