Legislature(1999 - 2000)
03/30/1999 04:05 PM House RLS
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE RULES STANDING COMMITTEE
March 30, 1999
4:05 p.m.
MEMBERS PRESENT
Representative John Cowdery, Chairman
Representative Brian Porter
Representative Joe Green
Representative Gail Phillips
Representative Pete Kott
Representative Ethan Berkowitz
Representative Reggie Joule
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
HOUSE BILL NO. 128
"An Act relating to lease-purchases of personal property."
- MOVED CSHB 128(RLS) OUT OF COMMITTEE
(* First public hearing)
PREVIOUS ACTION
BILL: HB 128
SHORT TITLE: LEASE-PURCHASE OF PERSONAL PROPERTY
SPONSOR(S): REPRESENTATIVES(S) MURKOWSKI
Jrn-Date Jrn-Page Action
3/05/99 368 (H) READ THE FIRST TIME - REFERRAL(S)
3/05/99 368 (H) L&C
3/15/99 (H) L&C AT 3:15 PM CAPITOL 17
3/15/99 (H) MOVED OUT OF COMMITTEE
3/15/99 (H) MINUTE(L&C)
3/16/99 473 (H) L&C RPT 6DP 1NR
3/16/99 473 (H) DP: ROKEBERG, MURKOWSKI, HARRIS,
CISSNA,
3/16/99 473 (H) SANDERS, HALCRO; NR: BRICE
3/16/99 473 (H) 2 ZERO FNS (LAW, COURT)
3/30/99 (H) RLS AT 4:00 PM CAPITOL 120
WITNESS REGISTER
REPRESENTATIVE LISA MURKOWSKI
Alaska State Legislature
Capitol Building, Room 406
Juneau, Alaska 99801
Telephone: (907) 465-3783
POSITION STATEMENT: As sponsor, presented the proposed CS
for HB 128.
ACTION NARRATIVE
TAPE 99-4, SIDE A
Number 0001
CHAIRMAN JOHN COWDERY called the House Rules Standing Committee
meeting to order at 4:05 p.m. Members present at the call to order
were Representatives Cowdery, Porter, Green, Phillips, Kott,
Berkowitz and Joule.
HB 128 - LEASE-PURCHASE OF PERSONAL PROPERTY
Number 0006
CHAIRMAN COWDERY announced that the committee would hear HOUSE BILL
NO. 128, "An Act relating to lease-purchases of personal property."
REPRESENTATIVE LISA MURKOWSKI, sponsor, explained that HB 128 was
heard in the House Labor and Commerce Standing Committee, the only
committee of referral. It was brought to Representative
Murkowski's attention that there would be amendments to HB 128,
quite possibly on the floor. Therefore, she had incorporated the
possible amendments into the proposed committee substitute (CS).
REPRESENTATIVE MURKOWSKI explained that basically there has been a
tightening up of warranty provisions. This bill, HB 128, is a
consumer-oriented piece of legislation. Representative Murkowski
pointed out that there is no reference to a lease-purchase
arrangement in which personal property is leased for a short period
of time, less than four months. She emphasized that HB 128
attempts to prevent possible problems in the rent-to-own industry.
Number 0281
REPRESENTATIVE KOTT moved to adopt the proposed CS for HB 128,
Version 1-LS0337\H, Bannister, 3/27/99, as the working document
before the committee. There being no objection, it was so ordered.
REPRESENTATIVE MURKOWSKI informed the committee of the changes
encompassed in the proposed CS. Under the disclosure, personal
property must be identified as new or used. With this market, the
turnover is approximately two and one-half times. Therefore, a
person could rent a piece of property that is technically used, in
the sense that the property has been rented out to another
individual. By deleting the excess verbiage in Section 2, the
language has been cleaned up.
REPRESENTATIVE MURKOWSKI noted that the language regarding who is
responsible for maintenance of the property is clarified in the
proposed CS in Section 45.35.020. The lessor is basically
responsible for any repairs to the merchandise while under lease,
unless there have been unauthorized repairs or damage from improper
use of the property.
REPRESENTATIVE MURKOWSKI pointed out that another change in the
proposed CS is the addition of the section on late fees. Within
the rental industry, late fees are not typically charged. This
language would allow late fees not in excess of $5. It also
clarifies that in the event that the property has been either
voluntarily surrendered or repossessed, the lessee is not
responsible for any late fees or late payments during that time
period. The last suggested change is to include, in those
provisions that the lessor and lessee cannot contract to do, any
agreement that would allow for attorneys' fees or costs, unless
they are allowed pursuant to court rules.
Number 0543
REPRESENTATIVE GREEN referred to page 3, lines 21 and 22, where it
states, "A lessor may not charge a consumer more than $5 for each
payment". He proposed that if he were buying a refrigerator, and
might be renting or paying a fair amount, it might behoove him to
not make payments on time because he can make more on his money
than the $5 fine. He asked whether that was considered, expressing
concern that a less-than scrupulous renter might take advantage of
this.
REPRESENTATIVE MURKOWSKI responded that in talking to those in the
industry in Alaska, they do not assess late fees now. As she
understands it, however, there has been language that allows for a
late fee. She noted that if they leave it as allowing for a late
fee, but without parameters, one could potentially be looking at a
$50 late fee, which is not reasonable. Representative Murkowski
pointed out that with these lease-purchase agreements, the payments
are minimal in the total scheme; for example, one might pay $20 per
month for 18 months. She suggested that the $5 late fee wouldn't
attract too much attention.
REPRESENTATIVE GREEN said he could see that for a toaster, for
example. However, if he were buying or renting enough to furnish
an apartment, there could be some money involved. He believes
there could be situations where, by specifying a number rather than
a percentage, it might actually encourage somebody to be late.
Number 0720
REPRESENTATIVE BERKOWITZ suggested, however, that if one were
furnishing an apartment, the fee might be assessed on each item.
He said the fees include a profit, as it were.
REPRESENTATIVE GREEN said he doesn't read it that way.
REPRESENTATIVE MURKOWSKI stated, "It's $5 for each payment that is
late under a lease-purchase agreement, so you could have a lease
purchase agreement that gives you your couch and your coffee table
and your lamps, and it would be one agreement. You would not be
paying a $5 fee per article; it would be per agreement, ...
according to the way this is drafted."
REPRESENTATIVE GREEN said he doesn't think it is all that unusual
to include more than one article, although it is probably not done
for the preponderance of agreements.
Number 0794
REPRESENTATIVE PHILLIPS asked what the repossession time frame is,
if the payment is late one month.
REPRESENTATIVE MURKOWSKI responded, "This lease-purchase agreement
allows for a reinstatement period. Suppose that you have gotten
behind in your payments. You've got a right to voluntarily
surrender the property, basically tell me, 'I can't pay for it
anymore; I'm here to surrender it,' or you can basically say, 'Come
and take it.'" She specified that one is allowed, under the terms
of the language, to a reinstatement period. For example, if a
person has paid less than two-thirds of the total payment for a
couch, that person has a right, if he or she has delivered up
possession voluntarily, to reinstate under the same terms, without
losing anything in terms of the payments already made towards
purchase. It must be done within the grace period allowed,
however. If one has gone beyond the grace period, which is either
two days or five days prior to the reinstatement, and that person
has not reinstated, the property could be repossessed at that
point.
Number 0927
CHAIRMAN COWDERY asked whether there were further comments or
questions. He expressed appreciation that the sponsor had worked
this out with other members.
Number 0946
REPRESENTATIVE BERKOWITZ made a motion to move CSHB 128, version
1-LS0337\H, Bannister, 3/27/99, from committee with individual
recommendations and attached fiscal note(s). There being no
objection, CSHB 128(RLS) moved from the House Rules Standing
Committee.
ADJOURNMENT
There being no further business before the committee, the House
Rules Standing Committee meeting was adjourned at 4:20 p.m.
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