03/13/2020 03:15 PM House LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| HB91 | |
| HB27 | |
| HB146 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 91 | TELECONFERENCED | |
| += | HB 301 | TELECONFERENCED | |
| + | HB 27 | TELECONFERENCED | |
| + | HB 146 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
March 13, 2020
3:18 p.m.
MEMBERS PRESENT
Representative Ivy Spohnholz, Chair
Representative Louise Stutes
Representative Sara Hannan
Representative Andi Story
Representative Mel Gillis
MEMBERS ABSENT
Representative Zack Fields
Representative Sara Rasmussen
COMMITTEE CALENDAR
HOUSE BILL NO. 91
"An Act relating to the practice of naturopathy; relating to the
licensure of naturopaths; relating to the Department of
Commerce, Community, and Economic Development; and providing for
an effective date."
- MOVED CSHB 91(L&C) OUT OF COMMITTEE
HOUSE BILL NO. 27
"An Act relating to the manufacture, sale, distribution, and
labeling of child-related products containing certain flame
retardant chemicals; relating to an interstate chemicals
clearinghouse; adding unlawful acts to the Alaska Unfair Trade
Practices and Consumer Protection Act; and providing for an
effective date."
- HEARD & HELD
SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 146
"An Act relating to an application for a license to operate as a
dealer in motor vehicles; and requiring a dealer in motor
vehicles to maintain liability and property insurance."
- HEARD & HELD
HOUSE BILL NO. 301
"An Act relating to certificates of fitness for plumbers and
electricians."
- BILL HEARING CANCELED
PREVIOUS COMMITTEE ACTION
BILL: HB 91
SHORT TITLE: NATUROPATHS: LICENSING; PRACTICE
SPONSOR(s): REPRESENTATIVE(s) JOHNSTON
03/13/19 (H) READ THE FIRST TIME - REFERRALS
03/13/19 (H) L&C, FIN
04/03/19 (H) L&C AT 3:15 PM BARNES 124
04/03/19 (H) Heard & Held
04/03/19 (H) MINUTE(L&C)
04/08/19 (H) L&C AT 3:15 PM BARNES 124
04/08/19 (H) Heard & Held
04/08/19 (H) MINUTE(L&C)
05/03/19 (H) L&C AT 3:15 PM BARNES 124
05/03/19 (H) Heard & Held
05/03/19 (H) MINUTE(L&C)
02/12/20 (H) L&C AT 3:15 PM BARNES 124
02/12/20 (H) Heard & Held
02/12/20 (H) MINUTE(L&C)
02/19/20 (H) L&C AT 3:15 PM BARNES 124
02/19/20 (H) Heard & Held
02/19/20 (H) MINUTE(L&C)
02/28/20 (H) L&C AT 3:15 PM BARNES 124
02/28/20 (H) Heard & Held
02/28/20 (H) MINUTE(L&C)
03/13/20 (H) L&C AT 3:15 PM BARNES 124
BILL: HB 27
SHORT TITLE: REGULATION OF FLAME RETARDANT CHEMICALS
SPONSOR(s): REPRESENTATIVE(s) TARR
02/20/19 (H) PREFILE RELEASED 1/11/19
02/20/19 (H) READ THE FIRST TIME - REFERRALS
02/20/19 (H) RES, L&C
04/03/19 (H) RES AT 1:00 PM BARNES 124
04/03/19 (H) Heard & Held
04/03/19 (H) MINUTE(RES)
04/05/19 (H) RES AT 1:00 PM BARNES 124
04/05/19 (H) Heard & Held
04/05/19 (H) MINUTE(RES)
01/24/20 (H) RES AT 1:00 PM BARNES 124
01/24/20 (H) Scheduled but Not Heard
01/27/20 (H) RES AT 1:00 PM BARNES 124
01/27/20 (H) Heard & Held
01/27/20 (H) MINUTE(RES)
01/29/20 (H) RES AT 1:00 PM BARNES 124
01/29/20 (H) Scheduled but Not Heard
01/31/20 (H) RES AT 1:00 PM BARNES 124
01/31/20 (H) Scheduled but Not Heard
02/03/20 (H) RES AT 1:00 PM BARNES 124
02/03/20 (H) -- MEETING CANCELED --
02/05/20 (H) RES AT 1:00 PM BARNES 124
02/05/20 (H) Moved CSHB 27(RES) Out of Committee
02/05/20 (H) MINUTE(RES)
02/07/20 (H) RES RPT CS(RES) NT 5DP 2NR
02/07/20 (H) DP: TUCK, HANNAN, HOPKINS, TARR,
LINCOLN
02/07/20 (H) NR: TALERICO, RAUSCHER
02/26/20 (H) L&C AT 3:15 PM BARNES 124
02/26/20 (H) <Bill Hearing Canceled>
03/04/20 (H) L&C AT 3:15 PM BARNES 124
03/04/20 (H) -- MEETING CANCELED --
03/06/20 (H) L&C AT 3:15 PM BARNES 124
03/06/20 (H) Heard & Held
03/06/20 (H) MINUTE(L&C)
03/13/20 (H) L&C AT 3:15 PM BARNES 124
BILL: HB 146
SHORT TITLE: MOTOR VEHICLE DEALERS: APPLIC.; INSURANCE
SPONSOR(s): REPRESENTATIVE(s) CLAMAN
04/24/19 (H) READ THE FIRST TIME - REFERRALS
04/24/19 (H) JUD, L&C
05/06/19 (H) SPONSOR SUBSTITUTE INTRODUCED
05/06/19 (H) READ THE FIRST TIME - REFERRALS
05/06/19 (H) JUD, L&C
01/29/20 (H) JUD AT 1:30 PM GRUENBERG 120
01/29/20 (H) <Bill Hearing Canceled>
02/26/20 (H) JUD AT 1:00 PM GRUENBERG 120
02/26/20 (H) Heard & Held
02/26/20 (H) MINUTE(JUD)
02/28/20 (H) JUD AT 1:00 PM GRUENBERG 120
02/28/20 (H) Moved CSSSHB 146(JUD) Out of Committee
02/28/20 (H) MINUTE(JUD)
03/02/20 (H) JUD RPT CS(JUD) 4DP
03/02/20 (H) DP: STUTES, DRUMMOND, KOPP, CLAMAN
03/13/20 (H) L&C AT 3:15 PM BARNES 124
WITNESS REGISTER
ERIN SHINE, Staff
Representative Jennifer Johnston
Juneau, Alaska
POSITION STATEMENT: Provided the opening statement for HB 91,
on behalf of Representative Johnston, prime sponsor.
KARLA HART, Staff
Representative Geran Tarr
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Provided the opening statement for HB 27,
on behalf of Representative Tarr, prime sponsor.
BEN GANN, Director
American Chemistry Council
Washington, D.C
POSITION STATEMENT: Testified during the hearing on HB 27.
LAUREN AGUILAR
Juvenile Product Manufacturers Association
Sacramento, California
POSITION STATEMENT: Testified during the hearing on HB 27.
PAMELA MILLER, Executive Director
Alaska Community Action on Toxics
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 27.
GRANT JOHNSON, Policy & Government Affairs Coordinator
International Sleep Products Association
Washington, D.C.
POSITION STATEMENT: Testified in opposition to HB 27.
SUSAN INGLIS, Executive Director
Sustainable Furnishings Council
Chapel Hill, North Carolina
POSITION STATEMENT: Testified in support of HB 27.
REPRESENTATIVE GERAN TARR
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Provided closing comments on HB 27, as
prime sponsor.
REPRESENTATIVE MATT CLAMAN
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: As prime sponsor, introduced HB 146.
DAVID CLARK, Staff
Representative Matt Claman
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented the sectional analysis for HB
146, on behalf of Representative Claman, prime sponsor.
STEVE ALWINE, President
Mendenhall Auto Center
Juneau, Alaska
POSITION STATEMENT: Provided testimony in support of HB 146.
TROY JARVIS, President
Alaska Automobile Dealers Association
Anchorage, Alaska
POSITION STATEMENT: Provided testimony in support of HB 146.
MARCUS WAEHLER
Alaska Automobile Dealers Association
Anchorage, Alaska
POSITION STATEMENT: Provided testimony during the hearing on HB
146.
JOANNE OLSEN, Director
Division of Motor Vehicles
Department of Administration
Anchorage, Alaska
POSITION STATEMENT: Answered questions during the hearing on HB
146.
ACTION NARRATIVE
3:18:46 PM
CHAIR IVY SPOHNHOLZ called the House Labor and Commerce Standing
Committee meeting to order at 3:18 p.m. Representatives Gillis,
Hannan, Story, Stutes, and Spohnholz were present at the call to
order.
HB 91-NATUROPATHS: LICENSING; PRACTICE
3:19:30 PM
CHAIR SPOHNHOLZ announced that the first order of business would
be CS FOR HOUSE BILL NO. 91(L&C), "An Act relating to the
practice of naturopathy; establishing the Naturopathy Advisory
Board; relating to the licensure of naturopaths; relating to
disciplinary sanctions for naturopaths; relating to the
Department of Commerce, Community, and Economic Development; and
providing for an effective date."
3:19:40 PM
ERIN SHINE, Staff, Representative Jennifer Johnston, provided an
overview of HB 91, on behalf of Representative Johnston, prime
sponsor. She stated that the bill is a modernization of scope
of practice for naturopathic doctors (NDs) in Alaska. She added
that the current CS, Version K, also modernizes the statutes for
the powers and duties of the Division of Corporations, Business
and Professional Licensing, Department of Commerce, Community &
Economic Development (DCCED).
3:20:11 PM
REPRESENTATIVE STORY questioned whether other states that
expanded the scope of practice for NDs found any evidence that
its a risk to public safety.
MS. SHINE said in her conversations with the regulatory bodies
for the states of Oregon and Washington, she found that their
rates of investigation were minimal.
REPRESENTATIVE STORY suggested that to mean there werent any
spikes in malpractice noticed in [Oregon and Washington].
MS. SHINE confirmed that. She further noted that both Oregon
and Washington have limited prescriptive authority of controlled
substances, which HB 91 does not allow.
REPRESENTATIVE STORY expressed her interest in ensuring that NDs
clarify that they are naturopathic doctors not medical doctors
in their title. She stated that according to Legislative
Legal, Alaska statutes already require that.
CHAIR SPOHNHOLZ pointed out that there is no such thing as a
"regular doctor. She explained that a regular doctor is
often called an allopathic doctor or a medical doctor; however,
many types of doctors exist.
3:23:08 PM
REPRESENTATIVE HANNAN opined that although there is valid
concern that citizens are not put at risk when medical services
in Alaska are addressed, the current committee substitute (CS)
for HB 91 has enough protections and provisions to help serve
Alaskans and the diversity of medical approaches and needs that
they want in their communities. She said she will be supporting
the bill in its current form.
3:25:11 PM
REPRESENTATIVE STUTES moved to report CSHB 91, Version LS0608\K,
Fisher, 2/8/20, out of committee with individual recommendations
and the accompanying fiscal notes. Without objection, CSHB
91(L&C) was moved from the House Labor and Commerce Standing
Committee.
3:25:37 PM
The committee took an at-ease from 3:25 to 3:27 p.m.
HB 27-REGULATION OF FLAME RETARDANT CHEMICALS
3:27:43 PM
CHAIR SPOHNHOLZ announced that the next order of business would
be HOUSE BILL NO. 27, "An Act relating to the manufacture, sale,
distribution, and labeling of child-related products containing
certain flame retardant chemicals; relating to an interstate
chemicals clearinghouse; adding unlawful acts to the Alaska
Unfair Trade Practices and Consumer Protection Act; and
providing for an effective date."
3:28:05 PM
KARLA HART, Staff, Representative Geran Tarr, Alaska State
Legislature, provided an overview of HB 27, on behalf of
Representative Tarr, prime sponsor. She stated that the bill
regulates flame retardants. She noted that its similar to an
Anchorage law that was passed last year provided there are
several differences. She said that Anchorage bans all flame
retardants above 1000 parts per million, while HB 27 bans all
levels of flame retardants. HB 27 bans a class of
organohalogenated chemicals and antimony, whereas Anchorage goes
further by linking with laws in Washington and California.
Furthermore, HB 27 bans toys and electronic products that are
primarily used in the home and removes child seats from the
definition of covered items; however, the industry is
interpreting the bill as if child restraint systems are covered.
She stated that the civil penalties are also slightly different.
HB 27 has no enforcement provisions, which makes the penalties
fairly cosmetic, she said. The bill still allows the
Department of Environmental Conservation (DEC) to participate in
the Interstate Chemicals Clearinghouse if they desire; however,
there are no appropriated funds for that. She said if DEC would
like to participate, dues for the clearinghouse are $2000 for
the state population at this time. She further noted that HB 27
has no labeling requirement and does not require the retention
of records to prove that products do not contain the prohibited
flame retardants.
CHAIR SPOHNHOLZ asked for Ms. Hart to email a comparison between
the Anchorage ordinance and HB 27.
MS. HART directed attention to several documents on the members
desks.
3:32:16 PM
REPRESENTATIVE GILLIS questioned whether HB 27 would conflict
with federal laws pertaining to flame retardants.
MS. HART answered no. She explained that currently, there are
no federal laws pertaining to flame retardants, which is why the
states and municipalities are acting.
3:32:59 PM
CHAIR SPOHNHOLZ opened public testimony.
3:33:17 PM
BEN GANN, Director, American Chemistry Council, informed the
committee that he is representing the American Chemistry
Councils North American Flame Retardant Alliance (NAFRA). He
addressed three issues with the legislation. First, he said, a
class-based approach to regulating flame retardants is not
consistent with the current state of the science because not all
flame retardants are the same. He explained that a variety of
flame retardants are necessary because the materials that need
to be made fire resistant are different in their physical nature
and chemical composition, as are the end use performance
requirements of the final product. Second, HB 27 would remove
the possibility for manufacturers and product designers to use
new innovative and sustainable products in the research and
development pipeline that have not yet come to market and could
be essential to helping these fire standards in the future. He
said Alaska should not permanently eliminate the possibility of
using new flame retardant technologies that could help save
lives and property from fire. Third, he stated that flame
retardants are reviewed for their safety by regulators around
the world. He said this legislation would ban substances that
government regulators have already determined do not present a
risk. HB 27 falls short of the scientific standard by presuming
that these flame retardant chemicals cannot, under any
circumstances, be safely used in consumer products. To
conclude, he said the approach outlined in HB 27 runs contrary
to sound science, is overly broad, discourages development of
innovative new flame retardants to meet product safety
standards, ignores safety determinations made by regulatory
authorities, and may increase fire safety risk.
3:36:40 PM
LAUREN AGUILAR, Juvenile Product Manufacturers Association,
stated that her critical concern with HB 27 is its deviation
from the Anchorage city ordinance. She said the approach in HB
27 would have negative impacts with internal and inaccessible
electronic and electrical components of products, as well as car
seats. She opined that the Anchorage ordinance is a reasonable
approach for juvenile products. She expressed her interest in
amending HB 27 to be consistent with that approach. She added
that if HB 27 is passed in its current form there will be a
broad ban on lifesaving juvenile products that require flame
retardants to meet safety and performance standards. She
requested that the committee contemplate the negative
consequences of HB 27 in its current form and consider
amendments to make it fully consistent with the Anchorage
ordinance if it is to move forward.
3:39:56 PM
PAMELA MILLER, Executive Director, Alaska Community Action on
Toxics, conveyed three key messages in support of HB 27. She
said that toxic flame retardants do not provide proven fire
safety benefits and fire safety standards can be met without
them. She noted that the bill has the support of diverse
organizations, including those representing firefighters, such
as the Fire Chiefs Association. She offered her belief that
Alaska has an opportunity to build on the foundation of the
landmark Anchorage ordinance and to protect the health of all
Alaskans.
3:42:32 PM
CHAIR SPOHNHOLZ asked if electronic products and child restraint
systems should be included or excluded.
MS. MILLER shared her belief that both product categories
present a hazard to children. Nonetheless, said noted that
there are car seats that meet fire safety standards without the
use of flame retardant chemicals. She reiterated her interest
in passing a bill that is substantively similar to the Anchorage
ordinance. She suggested the inclusion of three product
categories: toys, electronics, and car restraint systems.
3:44:22 PM
GRANT JOHNSON, Policy & Government Affairs Coordinator,
International Sleep Products Association, urged the committee to
vote no on HB 27 or to amend the legislation to address existing
flaws. He explained that the bill would prohibit the use of
antimony trioxide, which is an important ingredient in some
materials used in mattresses to help manufacturers meet federal
mattress flammability standards. He provided a detailed
explanation of federal flammability standards administered by
the CPSC [Consumer Product Safety Commission]. He urged the
committee to vote no on HB 27 or amend the bill to strike the
reference to antimony trioxide and exclude products that must
meet the open flame mattress standard set by the CPSC from its
scope.
3:49:06 PM
SUSAN INGLIS, Executive Director, Sustainable Furnishings
Council, explained that the Sustainable Furnishings Council is
an organization of companies involved in residential furnishings
and committed to sustainability. She reported findings from
consumer research and urged the passage of HB 27. She
reiterated that chemicals leech out of products exposing people
to harmful toxins that are directly related to a range of health
problems including various cancers, endocrine system disruption,
and more.
3:53:29 PM
CHAIR SPOHNHOLZ closed public testimony.
3:53:37 PM
REPRESENTATIVE GERAN TARR, Alaska State Legislature, prime
sponsor of HB 27, directed attention to a document on members
desks addressing workplace safety issues for first responders
and potential health impacts for people inside their homes. She
reported that currently, 75 percent of mattresses do not use
antimony. She added that the removal [of antimony] is
consistent with the Anchorage ordinance.
CHAIR SPOHNHOLZ expressed her concern about firefighters facing
a higher risk of some cancers compared to the general public.
3:55:34 PM
REPRESENTATIVE STORY asked how this legislation differs from the
Anchorage ordinance.
REPRESENTATIVE TARR acknowledged that there are reasons to be
concerned about the flame retardants used in electronics as well
as car seats; however, in considering safe alternatives and
pushing policy, those products were included to encourage a
conversation and to educate people on the health risks
associated with exposure to them.
3:57:31 PM
CHAIR SPOHNHOLZ announced that HB 27 was held over.
HB 146-MOTOR VEHICLE DEALERS: APPLIC.; INSURANCE
3:57:42 PM
CHAIR SPOHNHOLZ announced that the final order of business would
be SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 146, "An Act relating
to an application for a license to operate as a dealer in motor
vehicles; and requiring a dealer in motor vehicles to maintain
liability and property insurance."
3:58:04 PM
REPRESENTATIVE MATT CLAMAN, Alaska State Legislature, prime
sponsor, introduced HB 146. He paraphrased the sponsor
statement [included in the committee packet], which read in its
entirety as follows [original punctuation provided]:
The purpose of House Bill 146 is to improve consumer
protections for those purchasing motor vehicles by
strengthening the requirements for motor vehicle
dealers. Under current law, a motor vehicle dealer in
Alaska must register biennially by filling out an
application that requires an address, but not a valid
telephone number. The application must be accompanied
by a $50 registration fee and a surety bond of
$50,000. There is no current requirement that dealers
carry liability insurance even though we require
drivers to have liability insurance for their vehicles
and dealers may allow uninsured drivers to take
dealer-owned cards for a test drive.
Alaska's current statutory requirements for motor
vehicle dealers are some of the least stringent in the
country. By way of comparison, for an automobile
dealership application to be valid in other states:
? Oregon Chapter 822 of Oregon State Statutes
provides for civil penalties for acting as a vehicle
dealer without a certificate (.005-.009), the
processes of applying for, and maintaining, an
automobile dealer license and related exemptions,
requirements, and privileges (.025-.042), grounds for
revocation, suspension, or cancellation of the
dealership certificate (.050), and further definition
of illegal practices and associated penalties (.055-
.080).
? Delaware Title 21, Chapter 63 of the Delaware
State Statutes provides for proof-of-location
requirements and recordkeeping (? 6303), license
expiration and renewal procedures (? 6304), retainment
of bill of sale records for a period of at least five
years (? 6305), in addition to grounds for revocation
of dealer licenses (? 6313);
? Texas Title 14, Subtitle A, Chapter 2301 of the
state's Occupations Code provides for public interest
information and complaint procedures (Subchapter E),
licensing requirements (Subchapter F), license
expiration and renewal (Subchapter G), dealer
operations (Subchapter H), grounds for license
revocation (Subchapter N), as well as procedures for
complaint hearings, judicial review, and penalties
(Subchapters O, P, and Q).
Comparatively speaking, Alaska Statutes Title 8,
Chapter 66 addresses the application form (.040) and
registration renewal (.050); sets the minimum bond
amount (.060), defines allowable action on bonds and
defines failure to file a bond as a class A
misdemeanor (.070, .080); and holds the dealer
responsible for maintaining a record of each motor
vehicle transaction (.320). Unlike Texas, Oregon, and
Delaware, there are no statutes explicitly providing
for a grievance process nor grounds for revocation of
the license in question.
HB 146 aims to strengthen consumer protection by
addressing two scenarios that may create problems for
both consumers and dealers:
HB 146 seeks to provide better protection when one
selling dealer sells multiple vehicles to a buying
dealer and receives payment without providing titles
(the titles are being held by the bank that provides a
credit line for purchasing vehicles). The selling
dealer plans to pay for the vehicles and get the
titles but runs into financial difficulties and is
unable to continue making payments. When this happens,
the bank repossesses the vehicles from the buying
dealer. The buying dealer has now lost the money and
decides to seek recompense from the selling dealer's
bond. At present, the bond requirement under state law
is $50,000, which, depending on the type and quantity
of vehicles, may be only a fraction of what is owed.
Raising the bond amount will help protect the buying
dealer in the event that the bank repossesses their
new stock.
Another scenario that this bill addresses is
"curbstoning," which is the act of selling used
vehicles under the false pretense of being the car's
owner in order to evade regulations that are imposed
on state-licensed automobile dealers. When a dealer
obtains a license, they are qualified to purchase cars
at "dealer only" auctions at steep discounts. In these
scenarios, the dealer is not required to disclose the
fact that they are a licensed car dealer or that the
vehicle has a reconstructed title or has known
defects. If deemed a personal vehicle, the vehicle is
not subject to a routine safety inspection. Often, the
title is not placed in the dealer's name, the contact
information provided is not the dealer's information,
or the transaction takes place in cash, leaving little
paper trail for the consumer to follow if issues
arise. Requiring a verified working telephone number
increases the consumer's ability to locate the dealer.
HB 146 would help protect against these two scenarios
by requiring that those registering as motor vehicle
dealers include more detailed information about their
business in the application, register a bond for
$100,000 instead of $50,000, and maintain liability
insurance that covers collisions with dealer-owned
cars.
4:01:34 PM
DAVID CLARK, Staff, Representative Matt Claman, Alaska State
Legislature, on behalf of Representative Claman, prime sponsor,
presented the sectional analysis for HB 146 [included in the
committee packet], which read as follows [original punctuation
provided]:
Section 1
Amends AS 08.66.030:
Adds the following requirements to dealer registration
applications:
? a valid telephone number for the business;
? a statement that no person holding a five percent or
greater interest in the business has been convicted of
a felony involving fraud, embezzlement, or
misappropriation of property within five years
preceding the date of application;
? A statement acknowledging that the applicant has
reviewed the requirements for workers' compensation
insurance and will maintain workers' compensation
insurance under AS 23.30, if applicable; and
? a copy of the liability insurance policy in
compliance with section 3 of this bill.
Section 2
Amends AS 08.66.060(a):
Raises the amount of the bond required for dealer
registration applicants from $50,000 to $100,000.
Section 3
Adds a new section to AS 08.66:
Sec. 08.66.085 Insurance requirements: Requires that
dealers maintain public liability and property damage
insurance of not less than $50,000 for property
damage, $100,000 for injury to a single person, and
$200,000 for injury, including death, to more than one
person.
4:03:17 PM
REPRESENTATIVE STORY sought clarification on the cost of
insurance.
4:04:11 PM
STEVE ALWINE, President, Mendenhall Auto Center, stated that the
need for further regulation is because its easier to obtain a
dealers license in the state of Alaska than in any other state.
He explained that a dealer's license grants access to dealer
only auctions wherein inventory swaps occur. He addressed the
expense of a bond, reporting that his bond for $50,000 costs
$700 and renews every two years. He noted that the premium is
linear if the bond rises from $50,000 to $100,000 the price
increases from $700 to $1500. He added that its not a barrier
to entry, nor is it supposed to be - however, he emphasized that
he expects those entering the industry to act in a responsible
matter.
4:07:28 PM
CHAIR SPOHNHOLZ sought to clarify that the bond expense is $700
every two years.
MR. ALWINE answered yes.
4:07:42 PM
TROY JARVIS, President, Alaska Automobile Dealers Association,
expressed his support for HB 146. He informed the committee
that he has been in the car business in Alaska for the last 40
years and recently, the amount of deception in the dealers
industry has increased. He shared an anecdotal example. He
reiterated that as dealers, they are not trying to make it more
difficult to get licensed, but they do want to regulate and
monitor peoples actions to ensure that car dealers have a good
reputation in Alaska. He added that the leniency of the current
law allows individuals to obtain a license at little cost. Some
of those individuals then compound the problem by selling
vehicles under false pretenses. He said he wants to make [the
industry] legitimate and safe and to protect consumers. To
conclude, he reiterated his support for the bill.
CHAIR SPOHNHOLZ sought to clarify the problem being presented.
She summarized that there are people registered as dealers who
are potentially buying defective cars through auctions and
selling them on Craigslist to people without transparently
revealing that they could be held responsible for the known
defects. She asked if that is correct.
MR. JARVIS confirmed that.
4:11:24 PM
MARCUS WAEHLER, Alaska Automobile Dealers Association, shared a
personal anecdote to exemplify the problem at hand. He
expressed his hope that HB 146 will benefit the consumers, as
well as the reputation of [car] dealers in Alaska.
4:14:38 PM
REPRESENTATIVE HANNAN asked if the Division of Motor Vehicles
(DMV) has seen an increase in fraudulent behavior by dealers
acting as private parties to sell used vehicles with
reconstructed titles.
4:15:17 PM
JOANNE OLSEN, Director, Division of Motor Vehicles, Department
of Administration, stated that she has worked for over 31 years
and during that time has experienced that behavior. She noted
that another problem is when dealers do not provide a valid
phone number. She offered her belief that increasing the bond
might help because the cost of vehicles has increased.
4:16:11 PM
CHAIR SPOHNHOLZ asked if the requirements in HB 146 would
adequately prevent this problem from continuing to happen.
MR. WAEHLER said hopefully it would deter some people and curb
their behaviors; however, it will not eradicate the problem
completely. He offered his belief that the bill will have an
impact.
CHAIR SPOHNHOLZ asked if there is a requirement for registered
dealers to post their information whenever they make a sales
transaction.
MR. WAEHLER offered his understanding that disclosure is
required but it's not being followed through on or enforced.
CHAIR SPOHNHOLZ asked if Mr. Waehler filed a report when he
witnessed this deceptive behavior.
MR. WAEHLER said, its a little difficult to track down because
[the dealers] title had already been transferred into [the
buyers] name." He added that the buyer didnt remember the
dealers name only that she had found the car on Craigslist.
He said he connected the dots based on that information.
CHAIR SPOHNHOLZ asked if the buyer was acting in good faith.
MR. WAEHLER shared his belief that she was.
4:20:24 PM
CHAIR SPOHNHOLZ asked what protections could be put in place to
ensure that unscrupulous dealers arent misrepresenting
themselves. She asked for additional recommendations in terms
of offering more transparency or enforcement to help solve the
problem.
MS. OLSEN stated that HB 146 should help deter dishonest people
from applying for a license. She said currently, theres not
much the DMV can do to protect the public from these situations.
CHAIR SPOHNHOLZ asked what the DMV does when they identify that
someone has been a victim of this kind of fraud or deception.
MS. OLSEN said theres not much they can do when the title has
already been transferred to [the buyers] name. She shared an
anecdotal example.
4:23:26 PM
REPRESENTATIVE CLAMAN added that in terms of consumer remedies,
the automobile dealers are subject the Alaska Unfair Trade
Practices and Consumer Protection Act [AS 45.50.471]. He
explained that if they are found liable in a civil claim, they
are subject to treble damages. He noted that a key feature of
HB 146 is adding required liability insurance, which would
provide a source of money if someone brings a claim against a
dealer. He said the liability insurance would also provide
coverage for potential buyers that [test] drive a car on the
dealers lot.
CHAIR SPOHNHOLZ said that is helpful; however, it doesnt
address the problem of individuals who deceptively misrepresent
themselves. She observed that there doesnt appear to be a
meaningful accountability mechanism, which is problematic from a
consumer protection standpoint.
REPRESENTATIVE CLAMAN agreed. Nonetheless, he stated that the
DMV does not have adequate resources to take on that kind of
investigative capacity given the current budget environment.
CHAIR SPOHNHOLZ said they may not have the investigators or the
personnel; however, the DMV is one of the few state agencies in
Alaska that generates a profit. She suggested equipping the DMV
with FTE [full time equivalent] to invest in consumer
protection.
4:27:30 PM
CHAIR SPOHNHOLZ announced HB 146 was held over.
4:30:13 PM
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
4:30 p.m.