Legislature(2007 - 2008)
03/18/2008 02:40 PM House TRA
| Audio | Topic |
|---|---|
| Start | |
| HB415 | |
| HB294 | |
| HB372 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 415-USED MOTOR VEHICLE SALES 2:40:26 PM CHAIR JOHANSEN announced that the first order of business would be HOUSE BILL NO. 415, "An Act relating to disclosures required for the sale of a used motor vehicle, including a trailer, by a motor vehicle dealer." 2:40:48 PM DAVID SCOTT, Staff to Representative Johansen, Alaska State Legislature, explained that HB 415 removes language governing the sale of used vehicles that is no longer of benefit to consumers, dealerships, or the state. This legislation repeals AS 45.25.465(c), which requires that all used vehicles for sale by a dealer are posted with a notice specifying that the vehicle isn't subject to Alaska's "lemon law;" isn't covered under a manufacturer's warranty; wasn't manufactured in a foreign country, including Canada. Mr. Scott pointed out that the consumer protection provided in AS 45.25.465(c) isn't applicable because used cars aren't subject to Alaska's lemon laws and aren't sold with a manufacturer's warranty. Furthermore, the dealer must also provide whether the vehicle was manufactured in a foreign country, as specified in AS 45.25.470. Mr. Scott opined that AS 45.25.465(c) leaves dealers subject to lawsuits and is a violation of unfair trade practices, which allows for lawsuits that demand treble damages and reimbursement of full legal costs, even when consumers haven't suffered any actual harm or damages. Although one may argue that there can never be too much consumer protection, when the state places undue burdens on Alaska's businesses while providing no additional consumer protection it's time to reevaluate. Mr. Scott then noted that the legislation includes retroactivity clauses on page 1, lines 11-14 and page 2, line 1, which allow any case to continue to its conclusion without affecting the rights of Alaskans that are now in court while precluding future court action. 2:43:30 PM REPRESENTATIVE FAIRCLOUGH moved to adopt CSHB 415, Version 25- LS1546\C, Bannister, 3/17/08, as the working draft. There being no objection, Version C was before the committee. 2:44:09 PM CLYDE "ED" SNIFFEN, Senior Assistant Attorney General, Commercial/Fair Business Section, Civil Division (Anchorage), Department of Law (DOL), referred to DOL's letter of support for SB 164, the companion to HB 415, dated February 19, 2008. The aforementioned letter indicates that when AS 45.25.465(c) was originally drafted it was intended to apply only to current model used vehicles and the expansion such that it was applied to all used vehicles was due to a drafting error. However, since that letter was drafted, DOL has learned that the expansion was an intentional act on behalf of U.S. Representative Gruenstein (ph). Even so, DOL supports this proposed change because it is fairly redundant. At the time the statute was passed, current model vehicles were particularly susceptible to misperceptions by consumers during the purchasing process because they looked new when in fact they were actually used vehicles. Furthermore, if those vehicles were manufactured for sale in Canada, the North American manufacturer's warranty and the lemon law didn't apply. Those were the main consumer harms that were originally trying to be addressed. The expansion of the statute to all used vehicles did impose other burdens on automobile dealers for the remaining inventory of used cars that were already protected under existing statutes. Because it's already required that dealers disclose to consumers, in writing, whether the vehicle is manufactured for sale in Canada and because the Federal Trade Commission (FTC) already requires a window sticker that clearly explains whether a vehicle is under warranty, those issues have been addressed for a number of years already. Therefore, expanding the requirements to the entire inventory of used cars of the dealer seems unnecessary. He noted that in 2006 there was an amendment to Title 8 that actually removes reference to current model vehicles from the Automobile Dealer Act. Furthermore, in the last couple of years most major auto manufacturers extended their warranties to vehicles sold in North America. Mr. Sniffen opined that there doesn't seem to be an issue of used current model vehicles coming into Alaska as was once the case. Taking all of the aforementioned into consideration, it seems that consumers are adequately protected, he said. 2:48:15 PM REPRESENTATIVE DOOGAN related his understanding then that this [statute] was originally intended to require a sticker specifying that current model used vehicles brought over from Canada were used. MR. SNIFFEN noted his agreement with that understanding. REPRESENTATIVE DOOGAN then inquired as to how folks would be able to determine if a vehicle being sold as new is actually a used vehicle from Canada, if this [statute] is eliminated. MR. SNIFFEN stated that a person will be able to tell because of the FTC's buyer's guide that's displayed in the window of the vehicle and the written disclosure in the paperwork that the vehicle was manufactured for sale in Canada. The latter should raise flags to the potential buyer that the vehicle is likely a used vehicle. 2:49:46 PM REPRESENTATIVE DOOGAN directed attention to the retroactivity section of HB 415, which specifies that "it" wouldn't apply to any suit filed prior to January 1, 2008. He asked if the aforementioned would disadvantage those "who might be trying to beat us on the finish line." MR. SNIFFEN acknowledged that there was concern in relation to SB 164, the companion to HB 415, regarding depriving the rights of those with existing cases. He noted that he, in fact, is involved in a couple of existing cases. He said there was no desire to have the retroactivity to unnecessarily interfere with the rights of people being represented to go forward and recover. The original retroactive language, to the extent allowed by law, makes this retroactive to 2004. Mr. Sniffen explained that the retroactivity language was changed such that those lawsuits pending prior to January 2008 could continue and the retroactivity would only apply to actions brought forward after January 1, 2008. Therefore, no lawsuits are being extinguished, he clarified. 2:51:49 PM JOHN COOK, Legislative Director, Alaska Auto Dealers Association, opined that this comes down to an issue of fairness and Alaska jobs. As previously testified, these requirements for stickers are redundant and unnecessary. Because it's an unfair trade practice, there doesn't need to be actual harm or damages suffered by the consumer. He recalled that in the 13 years he was in the automobile business he never received any comments related to the sticker that made a difference on someone's purchase. Mr. Cook remarked that it's troubling that since no actual harm or damages has to be proven, lawsuits could proceed which could close down what are largely family-owned small Alaska-based businesses. A class action lawsuit of the magnitude of one that's proceeding now would either bankrupt or close nearly any Alaska-based business. Mr. Cook related the Alaska Auto Dealers Association's support of HB 415 and strongly urged the committee to report it from committee today. 2:54:51 PM CHAIR JOHANSEN closed public testimony. 2:55:02 PM REPRESENTATIVE FAIRCLOUGH moved that the committee report CSHB 415, Version 25-LS1546\C, Bannister, 3/17/08, out of committee with individual recommendations and accompanying fiscal notes. There being no objection, CSHB 415(TRA) was reported from the House Transportation Standing Committee. The committee took an at-ease from 2:55 p.m. to 2:59 p.m.
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