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NO. 104. AN ACT RELATING TO ASSISTIVE TECHNOLOGY DEVICE WARRANTIES.

(H.474)

It is hereby enacted by the General Assembly of the State of Vermont:

Sec. 1. 9 V.S.A. chapter 63, subchapter 1A is added to read:

Subchapter 1A. Assistive Technology

§ 2465. DEFINITIONS

These definitions are for use in this subchapter only:

(1) “Assistive device” means an item, piece of equipment, or product system, whether acquired commercially off-the-shelf, modified, or customized, that is used or designed to be used to increase, maintain, or improve any functional capability of an individual with disabilities. An assistive device system, that as a whole is within the definition of this term, is itself an assistive device, and, in such cases, this term also applies to each component product of the assistive device system that is itself ordinarily an assistive device. For this section only and no other purposes, this term is limited to:

(A) wheelchairs and scooters of any kind, including all their assistive devices and components that enhance the mobility or positioning of an individual, such as motorization, motorized positioning features, and the switches and controls for any motorized features; and

(B) computer equipment with voice output, artificial larynges, voice amplification devices, and other alternative and augmentative communication devices or any devices used for the purpose of communication.

(2) “Assistive device dealer” means a person who is in the business of selling assistive devices to consumers.

(3) “Assistive device lessor” means a person who leases an assistive device to a consumer, or who holds the lessor’s rights, under a written lease.

(4) “Collateral costs” means expenses incurred by a consumer in connection with the repair of a nonconformity, including the costs of obtaining an alternative assistive device.

(5) “Consumer” means any of the following:

(A) the purchaser of an assistive device, if the assistive device was purchased from an assistive device dealer or manufacturer for purposes other than resale;

(B) a person to whom the assistive device is transferred for purposes other than resale, if the transfer occurs before the expiration of an express warranty applicable to the assistive device;

(C) a person who may enforce the warranty; and

(D) a person who leases an assistive device from an assistive device lessor under a written lease.

(6) “Demonstrator” means an assistive device used primarily for the purpose of demonstration and tryout to the public.

(7) “Early termination cost” means any expense or obligation that an assistive device lessor incurs as a result of both the termination of a written lease before the termination date set forth in that lease and the return of an assistive device to a manufacturer pursuant to this section. Early termination cost includes a penalty for prepayment under a finance arrangement.

(8) “Early termination saving” means any expense or obligation that an assistive device lessor avoids as a result of both the termination of a written lease before that termination date set forth in that lease and the return of an assistive device to a manufacturer pursuant to this section. Early termination saving includes an interest charge that the assistive device lessor would have paid to finance the assistive device or, if the assistive device lessor does not finance the assistive device, the difference between the total amount for which the lease obligates the consumer during the period of the lease term remaining after the early termination and the present value of that amount at the date of the early termination.

(9) “Loaner” means an assistive technology device that is loaned to the user without charge while repairs are made to the user’s assistive technology device.

(10) “Manufacturer” means a person who manufactures or assembles assistive devices and agents of that person, including an importer, a

distributor, factory branch, distributor branch and any warrantors of the manufacturer’s assistive device, but does not include an assistive device dealer.

(11) “Nonconformity” means a condition or defect that substantially impairs the use, value or safety of an assistive device, and that is covered by an express warranty applicable to the assistive device or to a component of the assistive device, but does not include a condition or defect that is the result of abuse, use which exceeds the manufacturer’s recommendations, neglect or unauthorized modification or alteration of the assistive device by a consumer.

(12) “Reasonable attempt to repair” means, within the terms of an express warranty applicable to a new assistive device:

(A) any nonconformity within the warranty that is either subject to repair by the manufacturer, assistive device lessor or any of the manufacturer’s authorized assistive device dealers, for at least three times and a nonconformity continues; or

(B) the assistive device is out of service for an aggregate of at least 30 cumulative days because of warranty nonconformity.

§ 2466. WARRANTY

(a) A manufacturer who sells or leases an assistive device, only of the types listed in subdivisions 2465(1)(A) and (B) of this title, to a consumer, either directly or through an assistive device dealer, shall furnish the consumer with an express warranty for the assistive device. By the terms of or in the absence of an express warranty from the manufacturer, the manufacturer shall be deemed to have expressly warranted to the consumer of an assistive device, only as defined in subdivisions 2465(1)(A) and (B) of this title, that, for a period of at least one year from the date of first delivery to the consumer, the assistive device:

(1) has no defects in parts or performance; and

(2) is free from any condition and defect that would substantially impair the device’s use, value or safety to the consumer.

(b) The manufacturer through the assistive device lessor or assistive device dealer shall provide the consumer with a loaner if the assistive device, listed in subdivisions 2465(1)(A) and (B) of this title, has any condition or defect that would substantially impair the device’s use, value or safety to the consumer and that can not be remedied within one business day.

(c) If a new assistive device listed in subdivisions 2465(1)(A) and (B) of this title does not conform to an applicable express warranty and the consumer reports the nonconformity to the manufacturer, the assistive device lessor or any of the manufacturer’s authorized assistive device dealers, and makes the assistive device available for repair before one year after return delivery of the assistive device to the consumer, the nonconformity shall be repaired at no charge to the consumer, including parts, labor, shipping, delivery and all other costs.

(d) If, after a reasonable attempt to repair, the nonconformity is not repaired, then at the direction of a consumer described in subdivisions 2465(5)(A), (B) or (C) of this title, the manufacturer shall do one of the following:

(1) Accept return of the assistive device and replace the assistive device with a comparable new assistive device and refund any collateral costs.

(2) Accept return of the assistive device and refund to the consumer and to any holder of a perfected security interest in the consumer’s assistive device, as their interest may appear, the full purchase price plus any finance charge amount paid by the consumer at the point of sale and collateral costs, less a reasonable allowance for use. A reasonable allowance for use may not exceed the amount obtained by multiplying the full purchase price of the assistive device by a fraction, the denominator of which is 1,825 and the numerator of which is the number of days that the assistive device was used before the consumer first reported the nonconformity to the assistive device dealer.

(3) With respect to a consumer described in subdivision 2465(5)(D) of this title, accept return of the assistive device, refund to the assistive device lessor and to any holder of a perfected security interest in the assistive device, as their interest may appear, the current value of the written lease and refund to the consumer the amount that the consumer paid under the written lease, plus any collateral costs, less a reasonable allowance for use.

(e) The current value of the written lease equals the total amount for which that lease obligates the consumer during the period of the lease remaining after its early termination, plus the assistive device dealer’s early termination costs and the value of the assistive device at the lease expiration date if the lease sets forth that value, less the assistive device lessor’s early termination savings.

(f) A reasonable allowance for use may not exceed the amount obtained by multiplying the total amount for which the written lease obligates the consumer by a fraction, the denominator of which is 1,825 and the numerator of which is a number of days that the consumer used the assistive device before first reporting the nonconformity to the manufacturer, assistive device lessor or assistive device dealer.

(g) None of the requirements of this subchapter shall be construed to diminish existing assistive device warranties.

§ 2467. LOANERS

A loaner must:

(1) Be in good working order;

(2) Perform the essential functions of the assistive technology device that is being repaired, considering the needs of the user;

(3) Not create a threat to the safety of the user; and

(4) Be provided to the consumer by the manufacturer through the assistive device dealer within two business days after notice from the consumer of the nonconformity, except in the case of an assistive device that requires extensive custom retrofit in order to perform the essential functions. Such a custom device shall be provided as soon as reasonably possible, but in no case later than ten business days after notice.

§ 2468. REMEDIES

(a) To receive a comparable new assistive device or a refund due under subsection 2466(d) of this title, a consumer shall offer to the manufacturer of the assistive device having the nonconformity to transfer possession of that assistive device to that manufacturer. No later than 30 days after that offer, the manufacturer shall provide the consumer with the comparable assistive device or refund. When the manufacturer provides the new assistive device or refund, the consumer shall return the assistive device having the nonconformity to the manufacturer, along with any endorsements necessary to transfer real possession to the manufacturer.

(b) To receive a refund due under subsection 2466(d) of this title, a consumer described in subdivision 2465(5)(D) of this title shall offer to return the assistive device having the nonconformity to its manufacturer. No later than 30 days after that offer, the manufacturer shall provide the refund to the consumer. When the manufacturer provides the refund, the consumer shall return to the manufacturer the assistive device having the nonconformity.

(c) To receive a refund due under subsection 2466(d) of this title, an assistive device lessor shall offer to transfer possession of the assistive device having the nonconformity to its manufacturer. No later than 30 days after that offer, the manufacturer shall provide the refund to the assistive device lessor. When the manufacturer provides the refund, the assistive device lessor shall provide to the manufacturer any endorsements necessary to transfer legal possession to the manufacturer.

(d) If the assistive device was a covered benefit under a health insurance policy or health benefit plan, then the health insurer or other entity providing the benefit shall be subrogated to the consumer’s right of recovery to the extent of the benefit provided.

(e) No person shall enforce the lease against the consumer after the consumer offers to return the assistive device having the non-conformity pursuant to this section or returns the assistive device to the vendor pursuant to this section.

(f) No assistive device returned by a consumer or assistive device lessor in this state, or by a consumer or assistive device lessor in another state under a similar law of that state, may be sold or leased again in this state, unless full written disclosure of the reasons for return is made to any prospective buyer or lessee.

(g) This subchapter shall not be construed to limit rights or remedies available to a consumer under any other law.

(h) Any waiver by a consumer of rights under this subchapter is void.

(i) A violation of this subchapter or rules adopted under this subchapter is deemed to be an unfair or deceptive practice in commerce and a violation of section 2453 of this title. The attorney general has the same authority to make rules, conduct civil investigations and enter into assurances of discontinuance as provided under subchapter 1 of this chapter.

(j) A consumer aggrieved by a violation of this subchapter or a violation of rules adopted under this subchapter may bring an action in superior court for appropriate equitable relief, the amount of the consumer’s damages, punitive damages in the case of a willful violation, the consideration or the value of the consideration given by the consumer and reasonable costs and attorney’s fees.

Sec. 2. 9 V.S.A. § 41c is added to read:

§ 41c. RENT-TO-OWN; ASSISTIVE DEVICES

(a) As used in this section:

(1) “Assistive device” means any item, piece of equipment, or product system, whether acquired commercially off-the-shelf, modified, or customized, that is used or designed to be used to increase, maintain, or improve any functional capability of an individual with disabilities. An assistive device system, that as a whole is within the definition of this term, is itself an assistive device, and, in such cases, this term also applies to each component product of the assistive device system that is itself ordinarily an assistive device. This term includes, but is not limited to:

(A) wheelchairs and scooters of any kind, and other aids that enhance the mobility or positioning of an individual, such as motorization, motorized positioning features, and the switches and controls for any motorized features;

(B) computer equipment with voice output, artificial larynges, voice amplification devices, and other alternative and augmentative communication devices or any devices used for the purpose of communication;

(C) computer equipment and reading devices with voice output, optical scanners, talking software, braille printers, and other aids and devices that provide access to text;

(D) hearing aids, telephone communication devices for the deaf, and other assistive listening devices;

(E) voice recognition computer equipment, software and hardware accommodations, switches, and other forms of alternative access to computers;

(F) environmental control units;

(G) simple mechanical aids that enhance the functional capabilities of an individual with disabilities; and

(H) durable medical equipment.

(2) “Assistive devise lessee” means an individual with a disability or a person renting or leasing on behalf of an individual with a disability who is renting or leasing an assistive device for the purpose of increasing, maintaining or improving any functional capability related to the individual’s disability.

(b) A person in the business of renting, or renting to own an assistive device to assistive device lessees, who rents an assistive device for more than 60 days or who rents an assistive device to own shall offer such assistive device lessees a purchase option with reasonable terms and conditions. Such a purchase option may be exercised at any time by the assistive device lessees, the reasonable terms and conditions of which shall be included with the consumer’s periodic billing.

(1) A person in the business of renting products that may be assistive devices may include the following question in its rental application:

ARE YOU RENTING THIS PRODUCT AS AN ACCOMMODATION FOR A DISABILITY OR AS AN ASSISTIVE DEVICE?

Yes No        

(A) If an assistive device lessee answers “yes” to the question or requests additional information, the business entity shall provide the following statement:

ASSISTIVE DEVICE PURCHASE OPTION RIGHTS

IF YOU ARE RENTING THIS PRODUCT AS AN ACCOMMODATION FOR A DISABILITY OR AS AN ASSISTIVE DEVICE, THE DEALER IS REQUIRED TO OFFER YOU A RENTAL TRANSACTION THAT INCLUDES A PURCHASE OPTION. UNDER THE PURCHASE OPTION YOU MAY ACQUIRE OWNERSHIP OF THE PRODUCT AT ANYTIME BY TENDERING AN AMOUNT EQUAL TO THE CASH PRICE OF THE PRODUCT LESS 50% OF ALL PREVIOUS RENTAL PAYMENTS YOU HAVE MADE. OR, ONCE YOU HAVE MADE RENTAL PAYMENTS EQUAL TO 200% OF THE CASH PRICE YOU MAY ACQUIRE OWNERSHIP OF THE PRODUCT BY PAYING $1.00.

BEFORE YOU DETERMINE WHETHER TO ELECT A TRANSACTION WITH OR WITHOUT A PURCHASE OPTION, THE PERSON IN THE BUSINESS OF RENTING OR RENTING TO OWN THE ASSISTIVE DEVICE MUST FULLY DISCLOSE THE TERMS OF BOTH TRANSACTIONS.

THE VALUE OF A PURCHASE OPTION DEPENDS ON MANY FACTORS, WHICH MAY INCLUDE: (1) HOW LONG YOU INTEND TO USE THE PRODUCT; (2) THE CASH PRICE OF THE PRODUCT; AND (3) THE COST OF MAINTAINING THE PRODUCT.

ASSISTIVE DEVICE PURCHASE OPTION RIGHTS: IF YOU ELECT A RENTAL TRANSACTION WITHOUT A PURCHASE OPTION AND YOU CHANGE YOUR MIND AT A LATER DATE AND DECIDE TO ENTER INTO A PURCHASE OPTION TRANSACTION, PAYMENTS THAT YOU HAVE MADE WILL NOT BE APPLIED TO THE NEW TRANSACTIONS.

(B) The rental dealer may add additional information or explanations to the information required by subdivision (A) of this subsection, as long as the additional information is not stated, utilized, or placed in a manner that will confuse the assistive device lessee or that will contradict, obscure or distract attention from the required information. The additional information or explanation shall not have the effect of circumventing, evading, or complicating the information required by subdivision (A) of this subsection.

(2) Failure to comply with this section is not a violation if the assistive device lessee fails to inform the rental dealer that the product is being rented as an assistive device after the rental dealer makes the written inquiry in subdivision (b)(1) of this section.

(c) When periodic payments made by an assistive device lessee, exclusive of payments for service, total 200 percent of the bona fide cash price, the person in the business of renting or renting to own the assistive device shall notify the individual with a disability and the assistive device lessee that the individual with a disability and the assistive device lessee have the option of acquiring ownership of the assistive device upon payment of $1.00, at which time the rental or rent-to-own agreement shall terminate.

(1) The term “bona fide cash price” means the price at which a merchant, in the ordinary course of business, and taking into account the value of the merchandise and its retail price in the trade area, would offer to sell the merchandise to consumers for cash.

(d) Under a rent to own program, at any time after the initial payment, the assistive device lessee may acquire ownership of the property by tendering an amount equal to the cash price of the merchandise minus 50 percent of all previous rental-purchase payments made.

(e) When an assistive device lessee has acquired ownership of an assistive device under this section, the person in the business of renting or renting to own shall offer, for a reasonable price and term, a contract to maintain and service the device.

(f) This section shall not apply to assistive devices provided pursuant to a Medicare or Medicaid contract that either includes provisions for the acquisition of ownership or prohibits purchase or the acquisition of ownership by an assistive device lessee.

(g) A violation of this section is deemed to be an unfair or deceptive act or practice in commerce and a violation of chapter 63 of this title and all remedies and penalties available to a consumer or the attorney general under that chapter shall apply, and the attorney general shall have the same authority to make rules, conduct civil investigations and enter into assurances of discontinuance as provided under subchapter 1 of chapter 63 of this title.

Sec. 3. EFFECTIVE DATE

This act shall apply to assistive technology devices purchased by, or leased or transferred to a consumer after July 1, 2000.

Approved: May 4, 2000