Legislature(2009 - 2010)BARNES 124
04/06/2009 03:15 PM House LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| HB167 | |
| HB177 | |
| HB185 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 167 | TELECONFERENCED | |
| *+ | HB 177 | TELECONFERENCED | |
| *+ | HB 185 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 177-MARINE & MOTORIZED RECREATIONAL PRODUCTS 4:07:34 PM CHAIR OLSON announced that the next order of business would be HOUSE BILL NO. 177, "An Act relating to marine products and motorized recreational products; and providing for an effective date." 4:07:41 PM RYNNIEVA MOSS, Staff, Representative John Coghill, Alaska State Legislature, introduced herself. REPRESENTATIVE NEUMAN made a motion to adopt the committee substitute (CS) for HB 177 labeled 26-LS0477\P, Bannister, 4/2/09[Version P was before the committee.] CHAIR OLSON objected for purposes of discussion. 4:08:16 PM MS. MOSS explained that Version P represents three years of work to implement consumer protection provisions with respect to marine products and motorized recreational products, including four wheelers, three wheelers, and snowmachines. She reviewed the bill section-by-section. Section 1 amends AS 45.25 to eliminate all-terrain vehicles, recreational vehicles, and snowmachines from the "lemon laws" since those vehicles will be addressed under new provisions in the bill. 4:10:56 PM MS. MOSS referred to Section 2, titled "Chapter 27. Marine Products and Motorized Recreational Products" and related that AS 45.27 states that a manufacturer cannot withhold consent to a sale or transfer of a dealership so long as the transferee meets the criteria applied by the manufacturer and agrees to the terms and conditions of the existing dealership agreement. Proposed AS 45.27.020 would prevent a manufacturer from canceling or declining renewal of a dealership agreement unless the manufacturer has satisfied the notice requirements and has good cause to cancel or fail to renew an agreement. She explained that requirements for noticing are included such as a 60-day notice to the dealership, with some exceptions such as a 15-day requirement if the authorized dealer engages in fraud. The manufacturer cannot decline to renew in the event of a death of a partner/owner as long as the owner is not listed in the agreement as one whose expertise and abilities were the reason for the agreement. MS. MOSS referred to page 3, to a definition for "good cause" which includes infractions on material provisions. However, material provisions may be a change that is not in the agreement. In those instances, the item would need to be noticed to the dealership or owner in writing not less than six months prior to the effective date of the cancellation. 4:12:14 PM MS. MOSS referred to page 3, of proposed AS 45.27.030, which outlines the notice of cancellation or nonrenewal provisions. She reviewed the requirements include a 90 day notice provision must be given to a dealer for violations, and a 15 day notice must be given for bankruptcy, insolvency, or conviction of a felony involving moral turpitude, fraud, or a violation of a dealership agreement contractual agreement. MS. MOSS referred to page 4, of proposed AS 45.27, which establishes that a manufacturer cannot coerce an authorized dealer to enter into a dealership agreement with unfair stipulations such as requirements of dealers to overstock inventory. This proposed section creates a definition for "manufacturer's representative" that can include an employee or an agent who engages in the business, including distributors. 4:13:34 PM MS. MOSS referred to proposed AS 45.27.050, which is similar to motor vehicle statutes, she stated. She opined that these statutes help ensure a dealer is treated fairly. This provision requires that a manufacturer must repurchase a two-year inventory, including those products listed in the manufacturer's parts price books in the prior two years if the manufacturer cancels or fails to renew a contract without good cause. She recalled that in the motor vehicle provisions either party can cancel a dealership agreement and the manufacturer would be required to purchase the inventory. She related that the dealer has 90 days to return the property for compensation and the manufacturer has 60 days to reimburse the dealership or the financial institution that holds the security interest. 4:14:54 PM MS. MOSS referred to page 5, to Article 2 titled "Article 2. Product Warranties." She explained that this article covers what happens with respect to defects in products or parts. She further explained that during a warranty period the dealer will be paid to repair defective products. She related that this provision establishes a requirement to provide a schedule for reimbursement of defective products and the customary charges for warranty work, which may be a printed flat rate, or it may be a rate fee reviewed and agreed to by dealers and manufacturers. She referred to page 7 of proposed AS 45.27.160, which establishes a timely reimbursement of claims within 30 days. She noted that the manufacturer's failure to pay the claim or to provide notice is considered a default. However, manufacturers have 30 days to provide notice that manufacturers do not intend to pay the claim. 4:16:57 PM MS. MOSS referred to page 7, to Article 3, titled "Article 3. Miscellaneous Business Practices" which she related as the consumer protection provisions. She explained that this requires authorized dealers to post notices for retail labor rates, for notification that their technicians are factory certified. This provision requires dealers to post notice for customers who are having work done that does not fall under warranty provisions to provide written estimates to include, parts, labor, and costs, and any additional charges such as diagnostic or storage charges. She related a scenario in which a constituent took a car to a local shop for repair, discovered the charges were more than she could afford, and when she picked up her car she was assessed a $100 diagnostic charge. This provision would require authorized dealers to post notices for hidden charges. She referred to proposed AS 45.27.220, which requires a manufacturer to provide the date when parts and equipment will be available for factory recall notices. 4:18:23 PM MS. MOSS referred to proposed AS 45.27.230, which she characterized as the "lemon law." She stated that if a purchase is under warranty, but the product is less than a year old and at least one or two problems arise, the manufacturer must replace the product or refund the purchase price. First, if the dealer cannot fix a serious defect, after attempting to fix the defect four times, or if the defect prevents the user from using the product for 30 days or longer. She highlighted this provision in the bill is clearly a policy call. She related her understanding that the motor vehicle lemon law would apply to vehicles that have been taken into the shop three times for repairs, with the vehicle in the shop for up to 30 days without the defective vehicle being repaired. 4:19:32 PM MS. MOSS referred to page 8, titled "Article 4. Miscellaneous Provisions." She explained any provision in a dealership agreement that violates this chapter is unenforceable. Additionally, contract law and common law continue to apply. She referred to Article 6, titled "General Provisions" which provides definitions including definitions for "authorized dealers", "dealership agreements", and "landed cost." She related that this legislation is named the Alaska Marine Product and Motorized Recreational Product Act. She explained that proposed AS 45.50.471(b) exempts these products from existing law, AS 47.67, under the trade practices sections of the statutes. She highlighted that the bill applies to dealership agreements entered into after the effective date of the act. The bill has an immediate effective date. 4:20:51 PM REPRESENTATIVE HOLMES stated that she greatly appreciates the time sponsor has put into HB 177. REPRESENTATIVE NEUMAN pointed out he previously worked on this issue. He related his understanding that this bill would cover marine and motorized recreational products such as ATVs similar to the automobile consumer protection. He offered his belief that the bill is to help Alaskans. He highlighted that ATVs and snowmachines are primary modes of transportation for many Alaskans. MS. MOSS brought up section she previously missed. She referred to page 5, of proposed AS 45.27.110, with respect to defective parts. She offered that language was added to require the manufacturers to deliver the part to the authorized dealer nearest to the purchaser or to the dealer that sold the product to the consumer. She described a scenario in which a consumer purchases a snowmachine or ATV in Delta Junction, but lives in Fairbanks. Thus, in the instances of defects, the nearest dealer would be a dealer that the consumer had not purchased the product from or had not conducted business with. She related this bill provides an option for the consumer to select the dealer. She recalled early dealers operating out of their garages and compared that to opening a new dealership with the costs of inventory and specialized tools. She opined that this bill could well be an example of cutting edge legislation for this industry. 4:24:38 PM REPRESENTATIVE COGHILL thanked Ms. Moss for her staff work. He explained that he worked to strike a balance between the unique needs of dealers and consumers in Alaska, and manufacturers. He said, "I think we've found what I would consider a clean pathway for all three to have good rules to work by and still have it so the manufacturers just don't rule the distributors or refuse to get good service to the consumers, So it is consumer protection in that regard." He opined that the bill does not enter into the contract agreements but can assist dealers in working with manufacturers on issues. He further opined that the bill will assist all three groups. 4:26:31 PM CURTIS SPENCER stated he is a consumer who has had lots of experiences with items. He related an incident in which he purchased a jet boat for $125,000. He stated that he had to replace 18 fuel pumps over four months, without any help from the manufacturer. He opined this is a bill that needs to be passed. He highlighted that he has worked with dealers on ATVs and snowmachines so he has experienced the agony dealers have when assisting consumers. He recalled that one time the dealer purchased his snowmachine since he could not fix it. He offered his belief that this bill will be good for everyone, including the manufacturer. 4:28:41 PM DUDLEY BENESCH, Owner, Alaska Mining and Diving Supply (AMDS), stated his business has been in operation for 33 years and employs 44 Alaskans. He related that he has worked on this issue for many years. He offered his belief that this is legislation that is being enacted throughout the country. He pointed out numerous states such as Montana, New York, Louisiana, and Texas have all passed similar legislation with the same goal which is to create balance between manufacturers, dealers, and consumers. He opined HB 177 focuses on problems that have been experienced in the industry. He indicated that the bill will help produce a more reliable product for consumers. He said, "Our whole goal is to see warranty issues go away or go down." He offered that approximately 30 to 40 percent of his shop's time is spent fixing warranty issues and safety recall issues that the manufacturers have created. He said he did not know if it is due to rapidly changing technology and manufacturers can't keep up or if products are being rushed to market without adequate testing. 4:31:02 PM MR. BENESCH provided a sense of the expenses involved. He related that on one occasion the dealership had an issue in which 300 snowmachine units affected by a drive shaft recall. He applauded the manufacturers for their efforts. He said, "But the devil is in the details." Due to availability issues his dealership had to order and pay in advance for 300 drive shafts and kits with seals and gaskets for a total cost of over $60,000. Additionally, his shop provided labor for 20 percent reduction in the allowable time from last year, and this year the gap was higher. Furthermore, he was given 21 days to return the defective drive shaft to the factory at his expense. He pointed out that to return items to the East Coast on that type of timeframe required sending it by United Parcel Service (UPS) or by U.S. Post Office priority airmail. He related that his business has lost over $3,000 returning their defective drive shaft without any reimbursement. He opined that the safety recall cost his dealership over $35,000 in lost labor, administration costs, and freight costs. He offered his belief that the dealerships have been one sided with manufacturers, making decisions on cost and paperwork issues. He said, "I strongly support HB 177. I think it's a great, great opportunity for this state to get some consumer protection there for businesses and consumers." 4:34:17 PM WAYNE HULS, Co-owner, Marita Sea & Ski, Alaska Power Sports, stated that he is a board member of the Alaska Marine Dealers Association. He stated that he has battled with manufacturers for over 18 years on behalf of consumers. He opined that the one-sided warranty policies make it difficult for dealers to take care of their customers. He related his experiences are similar to Mr. Benesch's experiences in terms of costs incurred. He highlighted that many customers have missed out on an entire season of outdoor sports due to warranty issues. Furthermore, many of these people are dependent upon their ATVs or outboard motor for living and income. He said, "I've seen manufacturers grossly mismanage product recalls resulting in promises of replacement parts, but continually pushing the ship date out for the parts leaving the affected customer without use of the product for extended periods of time." 4:36:07 PM MR. HULS offered his belief that his product really is customer service, but that he has been in a stranglehold by the manufacturers which has made it very difficult to provide good service to Alaskans who want to enjoy the outdoors. He stated that the manufacturers dictate labor charges based on Lower 48 prices. Furthermore, the manufacturers discount parts, delay the arrival of parts, and require the broken parts to be returned to them which force the dealer to pay freight expenses. He related his understanding that providing warranty service to his customers costs Alaska's small businesses. He opined that the dealer either makes little profit, or loses money to care for customers. He pointed out the uniqueness of Anchorage, Alaska as a hub for sales in Western Alaska and elsewhere. Many small "bush" dealers must perform warranty work on products the business did not even sell. He mentioned that he is a dealer for a major brand and recognizes that many rural dealers "clean up" problems that a manufacturer has caused, even though the machines were purchased at his dealership. He offered his belief that these dealers must take a loss to accommodate the customer or the consumer must return the unit to him, at great expense. In short, the manufacturer sent defective products that were purchased by consumers. Meanwhile, the dealer must fix the problem that was the manufacturer's problem, but the dealer is not breaking even. This bill is a consumer protection measure, and if passed all dealers, including rural dealers, will be in a better situation to provide good customer service. He said, "I see this for all constituents will benefit if this bill is passed. It will be a win-win situation and will make the ground effort equal amongst the manufacturer, the dealer, and the consumer. Thank you for the opportunity to express my opinions." LARRY INNIS, Director, Marine Retailers Association of America (MRAA), stated that the MRAA strongly supports the bill. He also asked committee members to support HB 177. He explained that MRAA is a national trade association representing businesses in the retail side of recreational boating. He offered that MRAA consists of 3,000 members that sell and service boats and operate marinas and retail stores. He explained that since the early 1970s, the MRAA has worked to protect investments and promote small businesses. He related that boat dealers work hard to enhance the boating experience and make it safe and enjoyable. During this time boating consumers expect far better quality than they currently receive. As a result of increased expectations, boat dealers have worked to improve their relationships with manufacturers. Dealers have found that the informal practices of 30 to 40 years ago do not work in today's environment. He said, "Consumers want and expect more. Dealers want more safeguards to protect their business. Many of these safeguards can only be provided by their product manufacturers. Dealers would like to enhance warranty payment and claims procedures, and would like more assurances on future business relationships to correspond with the increased financial commitment that many are required to make in order to keep a certain product line. Additionally, dealers want to build a business that has value to sell or transfer. He opined that due to the frustrations with the arcane agreements and the unwillingness of manufacturers to revise or edit the agreements, dealers have turned to the MRAA for assistance. He recalled that MRAA promoted a model agreement in 1966 that more closely resembled the business model of the time and would have made a fair and level playing field between dealers and manufacturers to meet the expectations of buyers and consumers. 4:41:37 PM MR. INNIS related that after circulating the model agreement the manufacturers did not comment. Once more, changes were made and copies were distributed but dealer agreements did not change and manufacturers did not express any willingness to address the changing climate. Eventually dealers began to turn to state legislatures for relief. He related his understanding that currently seven or eight states have dealer manufacturing laws in place and four additional states are working to adopt changes this year. Presently the legislatures' approach more closely addresses the market place than agreements by boat manufacturers. Thus, the market is thriving in states that have passed similar consumer protection. He related that long-term agreements provide dealers increased security and business value, and more importantly, boating customers enjoy improved warranty service and enhanced boat buying experience. He concluded by stating MRAA believes that HB 177 is a good bill that addresses many of the issues expressed by dealers including fair and timely payment of warranty claims, product buyback due to manufacturer cancellations, long-term multiyear contracts and protection from unwarranted cancellations. He thanked the committee and offered strong support for HB 177. 4:43:10 PM RALPH SEEKINS, Owner, Seekins Ford Mercury, stated that he has been a Ford dealer in Fairbanks for over 32 years and has been in the auto business for 40 years. He further stated that he is the primary author of the automobile dealer franchise law as well as the Alaska Motor Vehicle Warranties Act, or "Lemon Law," prior to being a member of the Alaska State Legislature. He noted that he worked with Ms. Moss to review this bill. He offered several suggestions. First, he suggested that this bill takes the customer out of the middle between the dealer and the manufacturers. He recalled similar experiences in the automobile industry. At the time, car dealers were picking up expenses for the manufacturers in an attempt to keep customers happy with the products. He opined that the dealers had adhesion contracts, which are basically "take it or leave it contracts." He offered his belief that virtually every state has an Automobile Franchise law and some version of a Lemon Law. He opined that was the only way to require manufacturers to uphold their responsibilities. 4:45:11 PM MR. SEEKINS referred to the applicability section of HB 177 and related his understanding that this means the bill would not apply to current dealership agreements. Thus, a dealer could be covered, but one down the street might not be covered. He highlighted that in the Automobile Franchise Law, the law was crafted to apply to franchise contracts between the manufacturer and dealers. He applauded members for continuing to keep the term snowmachine and not snowmobile, which he stated is truly an Alaskan term. He recalled that several things were important to the automobile dealers. First, they wanted to ensure that the franchise agreements apply to all dealers. Secondly, dealers wanted the jurisdiction or venue to be within the state. Most contracts required that disputes be adjudicated under the laws of the state of Michigan, for example, with Ford Motor Company. However, the legislature changed the law so disputes were adjudicated in Alaska, more specifically to the location of the dealer's principal place of business. Additionally, the automobile law prohibited manufacturers from forming a corporate or subsidiary to accomplish what was prohibited by the bill. He recalled that the manufacturers came to the legislature to attempt to get the applicability changed to after the effective date. He opined that would have left him 20 plus years out of time. 4:47:19 PM MR. SEEKENS explained that some contracts may be renewable on regular cycles such as a five year cycle. He further explained that may be something the committee might want to consider. He said, "Otherwise, I look at this bill as pure consumer protection. I know what it meant to my consumers to be able to have the force of law to require manufacturers to be reasonable about what they paid for repairs." He opined that encourages dealers to perform a quality repair since he/she does not lose money in doing so. Additionally, he opined that most reputable manufacturers would prefer to have the quality service. He encouraged passage of the bill on behalf of consumers across the state. 4:48:30 PM CLINT KIRRY, Representative, Hewes Marine Company, stated that Hewes Marine Company has been creating high quality aluminum boats since 1944 and is currently the number one selling aluminum boat in Alaska. He expressed concern with any legislation that might affect the risk of doing business in Alaska. He related that Hewes Marine Company does not support HB 177. In general, he offered his belief the bill is one- sided, in that it protects marine dealers against cancellation by manufacturers, while leaving manufacturers at risk of cancellation by dealers. He related that even when a boat manufacturer meets all requirements for cancellation or non- renewal the boat manufacturer would be required to buy back large amounts of inventory. He opined that a dealer could under perform in selling products and the manufacturer would still have requirements to buy back perfectly fine products. He highlighted that manufacturers work with each dealer on a case by case basis and have dealer agreements in place. He stressed the importance of the need for freedom to put together dealer agreements. 4:50:23 PM MR. KIRRY offered his belief that HB 177 makes the playing field uneven and protects the dealers at the risk of manufacturers. He also expressed concern that warranty requirements seek to hold the manufacturers responsible for warranty coverage that is already being provided by the manufacturers is good faith to the dealers in Alaska. He opined that his company already commits to paying retail for labor costs, with respect to warranties. Further, warranty policies between Hewes Marine Company and dealers have already been determined in writing. He related his understanding that the proposed legislation is unnecessary. He maintained that his company has had few recalls, and every claim has been handled fairly and all parts and labor are handled by the manufacturer. He pointed out his company realizes that warranties are put in place for a reason. MR. KIRRY stated when the manufacturer has placed a defect in the product that manufacturers must take care of that through warranties. He emphasized that his company hopes to do business in Alaska for a long time and simply do this within the marketplace without this type of legislation. Additionally, the issues brought forward seem to be aimed at correcting a few isolated incidents of bad practices by one or two motor sports or marine manufacturers who do not handle their dealerships relationships in the right way. He objected to having the bill apply to all manufacturers since the industry has voluntarily established practices that have made doing business in Alaska agreeable for a long time. He concluded by stating the bill seems to attempt to rewrite and supplant dealer/manufacturer agreements and hinders the ability for manufacturers to enter into business freely. He urged members not to approve HB 177. 4:52:57 PM DAVID DICKERSON, Representative, National Marine Manufacturers Association (NMMA), stated that the NMMA represents about 1500 boat builders, engine manufacturers, and accessory manufacturers. He recalled earlier testimony today and had several comments to make. First, the bill does not recognize how cancellations by the dealer impacts manufacturers. For example, a cancellation at the end of a model year can leave a manufacturer with a tremendous amount inventory to store. Secondly, he related that he visited Alaska and learned more about the Alaska market. In particular, a cancellation by the dealer can be a crisis for the manufacturer due to the small number of dealers in Alaska and the ability to retain a market presence. He related his understanding of the intent, but opined that he is not sure the proposal provides balance. To illustrate he indicated a number of issues raised should not be addressed in this bill such as proper replacement of fuel pumps, the amount of money expended for a drive shaft recall, and the method by which recalls are handled. He agreed that recalls must be handled appropriately. He referenced other legislation in the Lower 48, stating that Minnesota and Iowa have chosen not to take any action. And Michigan has not taken any action for two full legislative terms. He acknowledged that contractual obligations between manufacturers and dealers are respected in the bill. 4:55:38 PM MR. DICKERSON questioned the need for the legislature to intrude when so much weight is placed on the contracts. He asserted that the contracts should be supreme and should oversee relationships between the manufacturers and their marine dealers. He recalled testimony suggesting consumers wanted to move to purchase their products other than the dealer closest to their home since the consumer preferred the service or a better deal. In fact, anything to encourages better service rather than allow the consumer to leave the area for better service creates a disservice to the consumer. Yet, that is what this bill does rather than protecting dealers that perform well. He recognized that testimony was given by what appears to be superb dealers. However, he offered his belief that the real protection this bill provides is to dealers who are not providing the level of service that the testifiers strive to give. 4:57:06 PM MR. DICKERSON referred to the warranty reimbursement. He explained that marine reimbursement provides "full reimbursement plus, plus." A large number of the brands sold in Alaska provide full warranty reimbursement. He offered his belief that this bill is well intended, but it over regulates and misses the mark. He said, "And overall, I think it is a real thumb on the scale of competition and in the end will not be good for consumers because it will protect those dealers that provide poor service rather than provide any real benefit to those dealers who are at the top of their game and doing the best they can." He concluded by asking Chair Olson to not report out this bill. 4:58:03 PM DAVID MCCORMICK stated that he has operated a marine business since 1999. He related that he has had the same manufacturer for five years. He mentioned he has raised his family in Bethel and loves the area. He pointed out that his customers come first. He stressed his experience that in the past five years his manufacturer has been an anchor that has been sinking him. He opined that there has not been a year except for this year that he has not had to take out loans. In particular, he pinpointed warranties as the reason. He offered his belief that the unfair reimbursement from the manufacturers makes it nearly impossible for him to do business. He said he is in business since he loves his business, the state, and the people in Bethel. He said, "I'd like to continue what I do. I do it. I do it well and I want to continue doing it. But, unfortunately, how long can I keep on taking loans out that keep mounting up to hundreds of thousands of dollars and keep in business." He emphasized that this bill is long overdue. In particular, he related that warranties have caused problems for dealers since the 1970s. He related his understanding that manufacturers worry about paying too much for unwarranted repairs. Typically, he finds warranty issues to be legitimate. He stressed manufacturers are often aware of issues at the factory level. He explained that he sells 50 machines per year, cannot afford to pay employees due to insurance costs. Thus, he must provide warranty work himself. He reiterated he would love to stay in this business. He said, "I find this to be a very good bill. I just hope you guys can pass it. I'd love to stay in this. I know my customers deserve a good product. The product should come out of the factory without these defects that they are coming here with." He thanked members for his opportunity to testify. 5:02:15 PM CRAIG COMPEAU, Vice President, Compeau Marine, stated his testimony would be brief. He said his testimony is similar to that of other dealers who have testified. He provided an incident in which one of the manufacturers had outboard motors that could not be fixed. The manufacturers refused to repurchase the outboard motors. After much pleading, the compromise offered was to have the dealer remove the power pack and serial number tag from the motor for a $2 thousand credit. He stated that the company paid $7 thousand per motor, which totaled over $100,000. More importantly, the outboard motors potentially could have affected his customer's safety. And to maintain credibility with his customers, Mr. Compeau further stated that he had to purchase back the motors from many of his customers. He implied this is not an isolated case, but one that is repeated. He said, "We think HB 177 truly benefits Alaska's consumers, who are the ones behind the steering wheel of that boat, behind the four-wheeler, you know, who are really operating this product that isn't just a toy. We really appreciate the opportunity to do testimony here and I thank the committee for their time and service." 5:04:09 PM PETER THOMPSON, President, River and Sea Marine, stated his deep appreciation for the opportunity to speak in support of HB 177. He related that the uniqueness of Alaska also poses many challenges including transportation. He offered his belief that HB 177 provides many safeguards for customers and consumers who use the products as daily tools. He opined that dealers invest large sums and pay Alaskan workers. He further opined that businesses have a ripple affect including transportation and aviation. Dealers can only satisfy customers if manufacturers initially produce a good product. He emphasized that dealers expend thousands of dollars to train with the new technology in order to be able to provide warranty service. If the dealer does not invest in adequate training, it could result in a breach of the manufacturer's contract. He related that consumers are often deprived of the use of products for weeks or months while the dealer attempts to remedy the situation. He said: This is not in any way, shape, or form, an acceptable scenario. We need to come into line with many Lower 48 states [that] have already passed legislation designed to mitigate this totally untenable situation and rectify to the fullest extent possible the need to have a cohesive support line from manufacturer to end user and to endeavor to have these past inequities minimized. To all the parties involved, and ultimately to better serve the needs of the customers in this state, to ultimately the future development and success of the state rests. In closing, I'd like to address the concerns of Mr. David Dickerson, NMMA, and Mr. Clint Kirry, from Hewes Craft, that if this bill is enacted it is not intended to polarize or antagonize any parties, but is in fact a chance to form a new and fair and beneficial chance for all parties to start afresh. 5:08:37 PM MARK HORDEMANN stated that his snowmachine came in during October, but the machine had a recall due to the gas tank. He waited several weeks for the remedy and picked up his snowmachine. Part way through the season the drive shaft snapped. He said: I was told, yes, they are having a problem with it. This was a new and improved drive shaft, in which fact it was nothing more than the same exact drive shaft that they'd put in from the manufacturer. The drive shaft was put in and this year I received a recall notice once again to have the same drive shaft replaced with a new and upgraded drive shaft. All this time put out basically was around three months of not being able to use my snowmachine. This is the type of thing I would like protection from. And I support the bill and thank you very much for listening to me. 5:10:03 PM CHAIR OLSON, after first determining no one else wished to testify, closed public testimony on HB 177. He removed his objection [Version P was before the committee]. 5:10:23 PM REPRESENTATIVE HOLMES asked if Mr. Sniffen had any overall thoughts on the proposed committee substitute. 5:10:47 PM CLYDE (ED) SNIFFEN, JR., Senior Assistant Attorney General, Commercial/Fair Business Section, Civil Division (Anchorage), Department of Law (DOL), stated that he has reviewed the bill. He related that he does not have too many comments. He further related he noticed that the Lemon Law section is a fairly short and streamlined process compared to the motor vehicle law. He pointed out that the motor vehicle statutes consist of three pages and include details such as for noticing, and under what circumstances a replacement is not authorized. He offered to discuss the details with the sponsor prior to the next committee hearing. Otherwise, he offered that the DOL has no other issues with the bill. 5:12:12 PM REPRESENTATIVE BUCH commented he first reviewed the bill several years ago and had reservations, particularly with some provisions that were very restrictive regarding manufacturer/dealership requirements. He recognized the major modifications made to the bill and suggested it may need some minor tweaking as mentioned by the assistant attorney general. Thus, he has chosen to cosponsor the bill and endorses HB 177. 5:12:54 PM REPRESENTATIVE NEUMAN offered that he worked on this issue several years ago in order to protect Alaskans, not only with respect to costs, but for the safety aspects. He stated that he wanted to ensure that Alaskans have good equipment since their lives are at stake. He recalled the testimony from the Bethel businessman who cannot afford the warranty problems. He stressed when businesses must pay for extra equipment and parts that the additional business costs reduce profits to the point the dealer will simply go out of business. He thanked the sponsor and his staff for their hard work. He opined that HB 177 is a good consumer protection bill. 5:13:54 PM MS. MOSS asked to point out that the only repurchase the bill requires is when a manufacturer terminates or fails to renew a contract without good cause. She said, "Very straightforward. I have before me a dealership agreement that does not even address warranty work and defects. She asked to read two sentences. She said she would not name the company. She read, "This company has the absolute right in its sole discretion to terminate this agreement on written notice of ten days prior to the effective date of termination. MS. MOSS stated under repurchases, it reads, "Upon termination or nonrenewal of this agreement the company has no obligation but shall have first option to repurchase any inventory." Thus, these dealership agreements do not provide much protection for a dealer. REPRESENTATIVE COGHILL commented that he will work on the replacement issue with respect to the Lemon Law. He offered to work to tighten up the language. He stated that he does not want to slow down the bill. 5:15:18 PM REPRESENTATIVE NEUMAN moved to report Version P, labeled 26- LS0477\P, Bannister, 4/2/09, out of committee with individual recommendations and the accompanying fiscal note. There being no objection, the CSHB 177(L&C) was reported from the House Labor and Commerce Standing Committee. 5:15:59 PM The committee took an at-ease from 5:15 p.m. to 5:18 p.m. 5:18:02 PM
| Document Name | Date/Time | Subjects |
|---|---|---|
| 01 HB167 ver R.pdf |
HL&C 4/6/2009 3:15:00 PM |
HB 167 |
| 01 HB177 ver E.pdf |
HL&C 4/6/2009 3:15:00 PM |
HB 177 |
| 02 CSHB167 ver E Sponsor Statement.pdf |
HL&C 4/6/2009 3:15:00 PM |
HB 167 |
| 03 CSHB167 ver E Sectional Analysis.pdf |
HL&C 4/6/2009 3:15:00 PM |
HB 167 |
| 04 HB167 Draft CS ver E.pdf |
HL&C 4/6/2009 3:15:00 PM |
HB 167 |
| 05 HB167 Fiscal Note DOR-TAX-04-03-09.pdf |
HL&C 4/6/2009 3:15:00 PM |
HB 167 |
| 06 HB167 PPT Presentation by ATIA.pdf |
HL&C 4/6/2009 3:15:00 PM |
HB 167 |
| 02 HB177 Sponsor Statement.pdf |
HL&C 4/6/2009 3:15:00 PM |
HB 177 |
| 03 HB177 Sectional Analysis.pdf |
HL&C 4/6/2009 3:15:00 PM |
HB 177 |
| 04 HB177 Draft CS ver P.pdf |
HL&C 4/6/2009 3:15:00 PM |
HB 177 |
| 04 HB185 Fiscal Note DOT-AD-CA-3-26-09.pdf |
HL&C 4/6/2009 3:15:00 PM |
HB 185 |
| 17 HB185 Multiple Letters of suppor-opposition.pdf |
HL&C 4/6/2009 3:15:00 PM |
HB 185 |
| 18 HB185 Multiple Letters of suppor-opposition_2.pdf |
HL&C 4/6/2009 3:15:00 PM |
HB 185 |
| April 6 Packet Information.pdf |
HL&C 4/6/2009 3:15:00 PM |
HB 167 HB 177 |