Legislature(2023 - 2024)
2024-05-06 House Journal
Full Journal pdf2024-05-06 House Journal Page 2704 HB 233 The following was read the second time: 2024-05-06 House Journal Page 2705 HOUSE BILL NO. 233 "An Act relating to rates and time allowances for motor vehicle warranty work." with the: Journal Page L&C RPT 2DP 4NR 2396 FN1: ZERO(GOV/COMBINED) 2396 TRA RPT CS(TRA) NEW TITLE 2DP 4NR 1AM 2680 FN1: ZERO(GOV/COMBINED) 2680 Representative Saddler moved and asked unanimous consent that the following committee substitute be adopted in lieu of the original bill: CS FOR HOUSE BILL NO. 233(TRA) "An Act relating to rates and time allowances for motor vehicle warranty work; and relating to unfair practices by manufacturers." Representative Eastman objected. The question being: "Shall the House adopt CSHB 233(TRA)?" The roll was taken with the following result: HB 233 Second Reading Adopt Transportation CS YEAS: 37 NAYS: 1 EXCUSED: 0 ABSENT: 2 Yeas: Allard, Armstrong, Baker, Carpenter, Carrick, Coulombe, Cronk, Dibert, Edgmon, Fields, Foster, Galvin, Gray, Groh, Hannan, Himschoot, C.Johnson, Josephson, McCabe, McKay, Mears, Mina, Ortiz, Prax, Rauscher, Ruffridge, Saddler, Schrage, Shaw, Stapp, Story, Stutes, Sumner, Tilton, Tomaszewski, Vance, Wright Nays: Eastman Absent: D.Johnson, McCormick And so, CSHB 233(TRA) was adopted. 2024-05-06 House Journal Page 2706 Amendment No. 1 was offered by Representative Eastman: Page 2, line 7, following "hours": Insert "and fractions of an hour" Representative Eastman moved and asked unanimous consent that Amendment No. 1 be adopted. There was objection. The question being: "Shall Amendment No. 1 be adopted?" The roll was taken with the following result: CSHB 233(TRA) Second Reading Amendment No. 1 YEAS: 27 NAYS: 12 EXCUSED: 0 ABSENT: 1 Yeas: Armstrong, Coulombe, Dibert, Eastman, Edgmon, Fields, Foster, Galvin, Gray, Groh, Hannan, Himschoot, C.Johnson, McKay, Mears, Mina, Ortiz, Rauscher, Saddler, Schrage, Shaw, Stapp, Story, Stutes, Tilton, Tomaszewski, Wright Nays: Allard, Baker, Carpenter, Carrick, Cronk, Josephson, McCabe, McCormick, Prax, Ruffridge, Sumner, Vance Absent: D.Johnson And so, Amendment No. 1 was adopted. Amendment No. 2 was offered by Representative Sumner: Page 3, following line 26: Insert a new bill section to read: "* Sec. 6. AS 45.45.300 is amended by adding a new subsection to read: "(b) The Department of Commerce Community and Economic Development shall establish regulations for an independent shop to make necessary repairs to conform a new motor vehicle to the warranty."" Representative Sumner moved and asked unanimous consent that Amendment No. 2 be adopted. 2024-05-06 House Journal Page 2707 Representative Cronk objected. The question being: "Shall Amendment No. 2 be adopted?" The roll was taken with the following result: CSHB 233(TRA) am Second Reading Amendment No. 2 YEAS: 20 NAYS: 19 EXCUSED: 0 ABSENT: 1 Yeas: Armstrong, Dibert, Edgmon, Fields, Foster, Galvin, Gray, Groh, Hannan, Himschoot, C.Johnson, McCormick, Mears, Mina, Ortiz, Prax, Schrage, Story, Stutes, Sumner Nays: Allard, Baker, Carpenter, Carrick, Coulombe, Cronk, Eastman, Josephson, McCabe, McKay, Rauscher, Ruffridge, Saddler, Shaw, Stapp, Tilton, Tomaszewski, Vance, Wright Absent: D.Johnson And so, Amendment No. 2 was adopted. Representative Tomaszewski moved and asked unanimous consent to rescind previous action in adopting Amendment No. 2. There was objection. The question being: "Shall the House rescind previous action in adopting Amendment No. 2?" The roll was taken with the following result: CSHB 233(TRA) am Second Reading Rescind Previous Action in adopting Amendment No. 2 YEAS: 25 NAYS: 14 EXCUSED: 0 ABSENT: 1 Yeas: Allard, Baker, Carpenter, Carrick, Coulombe, Cronk, Eastman, C.Johnson, D.Johnson, Josephson, McCabe, McCormick, McKay, Prax, Rauscher, Ruffridge, Saddler, Shaw, Stapp, Story, Stutes, Tilton, Tomaszewski, Vance, Wright Nays: Armstrong, Dibert, Fields, Foster, Galvin, Gray, Groh, Hannan, Himschoot, Mears, Mina, Ortiz, Schrage, Sumner 2024-05-06 House Journal Page 2708 Absent: Edgmon And so, the motion passed. Amendment No. 2 was before the House (page 2706). The question being: "Shall Amendment No. 2 be adopted?" The roll was taken with the following result: CSHB 233(TRA) am Second Reading Amendment No. 2 YEAS: 18 NAYS: 22 EXCUSED: 0 ABSENT: 0 Yeas: Armstrong, Dibert, Edgmon, Fields, Foster, Galvin, Gray, Groh, Hannan, Himschoot, C.Johnson, McCormick, Mears, Mina, Ortiz, Schrage, Stutes, Sumner Nays: Allard, Baker, Carpenter, Carrick, Coulombe, Cronk, Eastman, D.Johnson, Josephson, McCabe, McKay, Prax, Rauscher, Ruffridge, Saddler, Shaw, Stapp, Story, Tilton, Tomaszewski, Vance, Wright And so, Amendment No. 2 was not adopted. Amendment No. 3 was offered by Representative Gray: Page 2, line 3: Delete "a new subsection" Insert "new subsections" Page 2, following line 3: Insert a new subsection to read: "(j) If a new motor vehicle dealer receives profits for performing warranty work as a result of the requirements of (c) of this section that are higher than the profits the new motor vehicle dealer receives for performing similar nonwarranty service work, the new motor vehicle dealer shall use those additional profits to increase the wages of the mechanics employed by the new motor vehicle dealer." Reletter the following subsection accordingly. 2024-05-06 House Journal Page 2709 Representative Gray moved and asked unanimous consent that Amendment No. 3 be adopted. Representative Saddler objected. The question being: "Shall Amendment No. 3 be adopted?" The roll was taken with the following result: CSHB 233(TRA) am Second Reading Amendment No. 3 YEAS: 9 NAYS: 31 EXCUSED: 0 ABSENT: 0 Yeas: Carrick, Dibert, Fields, Galvin, Gray, Groh, Hannan, Himschoot, Ortiz Nays: Allard, Armstrong, Baker, Carpenter, Coulombe, Cronk, Eastman, Edgmon, Foster, C.Johnson, D.Johnson, Josephson, McCabe, McCormick, McKay, Mears, Mina, Prax, Rauscher, Ruffridge, Saddler, Schrage, Shaw, Stapp, Story, Stutes, Sumner, Tilton, Tomaszewski, Vance, Wright And so, Amendment No. 3 was not adopted. Amendment No. 4 was offered by Representative Sumner: Page 1, line 1 (title amendment): Delete "and" Page 1, line 2, following "manufacturers": Insert "; and relating to repairs to new motor vehicles under warranty performed by shops" Page 3, following line 26: Insert new bill sections to read: "* Sec. 6. AS 45.45.300 is amended to read: Sec. 45.45.300. Repairs required. If a new motor vehicle does not conform to an express warranty that is applicable to it and the owner of the vehicle reports the defect or condition to the manufacturer of the vehicle or to the manufacturer's or distributor's dealer during the term of the warranty, the owner 2024-05-06 House Journal Page 2710 may choose to have the necessary repairs made to conform the vehicle to the warranty performed by (1) the manufacturer, distributor, or dealer [,] or a repairing agent; or (2) a shop that has received a schedule of compensation from the manufacturer or distributor [SHALL MAKE THE NECESSARY REPAIRS TO CONFORM THE VEHICLE TO THE EXPRESS WARRANTY]. * Sec. 7. AS 45.45.300 is amended by adding new subsections to read: (b) If a manufacturer receives a report from an owner under (a) of this section and the owner chooses to have repairs performed under (a)(1) of this section, the manufacturer, distributor, dealer, or repairing agent shall make the necessary repairs to conform the vehicle to the express warranty. (c) If a manufacturer is sent a report from an owner under (a) of this section and the owner chooses to have repairs performed under (a)(2) of this section, a shop may perform the necessary repairs to conform the vehicle to the express warranty. * Sec. 8. AS 45.45.305 is amended to read: Sec. 45.45.305. Replacement or refund. If, during the term of the express warranty or within one year from the date of delivery of the motor vehicle to the original owner, whichever period terminates first, the person performing repairs under AS 45.45.300 [MANUFACTURER, DISTRIBUTOR, DEALER, OR REPAIRING AGENT] is unable to conform the motor vehicle to an applicable express warranty after a reasonable number of attempts, the manufacturer or distributor shall accept the return of the nonconforming motor vehicle, and, at the owner's option, shall replace the nonconforming vehicle with a new, comparable vehicle or shall refund the full purchase price to the owner less a reasonable allowance for the use of the motor vehicle from the time it was delivered to the original owner. A refund under this section shall be made to a lienholder of record, if any, and the owner, as their interests may appear. * Sec. 9. AS 45.45.310 is amended to read: Sec. 45.45.310. Notice by owner. In order to claim a refund or replacement under AS 45.45.305, the owner shall give written notice by certified mail to the manufacturer and the person performing repairs under AS 45.45.300 [ITS DEALER OR 2024-05-06 House Journal Page 2711 REPAIRING AGENT] at any time before 60 days have elapsed after the expiration of the express warranty or the one-year period after the date of delivery of the motor vehicle to the original owner, whichever period terminates first, (1) stating that the vehicle has a nonconformity; (2) providing a reasonable description of the nonconformity; (3) stating that [THE MANUFACTURER, DISTRIBUTOR, DEALER, OR REPAIRING AGENT HAS MADE] a reasonable number of attempts to conform the vehicle have been made and identifying who made those attempts under AS 45.45.305(a); and (4) stating that the owner demands a refund or replacement vehicle to be delivered on the 60th day after the mailing of the written notice. Within 30 days after receiving the notice required by this section, the manufacturer may make a final attempt to conform the vehicle before a refund or replacement is made under AS 45.45.305. * Sec. 10. AS 45.45.315 is amended to read: Sec. 45.45.315. Exceptions. An owner may not receive a refund or replacement under AS 45.45.300 - 45.45.360 if the manufacturer or distributor shows that the nonconformity complained of (1) does not substantially impair either the use or the market value of the motor vehicle; or (2) is the result of (A) alteration of the motor vehicle by the owner or a person other than a person permitted to make the alteration under AS 45.45.300 [DEALER OR REPAIRING AGENT THAT IS NOT AUTHORIZED BY THE MANUFACTURER OR DISTRIBUTOR]; or (B) abuse or neglect by the owner or a person other than a person permitted to perform repairs on the motor vehicle under AS 45.45.300 [THE DEALER OR REPAIRING AGENT]. * Sec. 11. AS 45.45.320 is amended to read: Sec. 45.45.320. Presumption. A presumption that a reasonable number of attempts have been made to conform a motor vehicle under an applicable express warranty is established if [:] (1) the same nonconformity has been subject to repair three or more times under AS 45.45.300 [BY THE 2024-05-06 House Journal Page 2712 MANUFACTURER, DISTRIBUTOR, DEALER, OR REPAIRING AGENT] during the term of the express warranty or the one-year period after delivery of the motor vehicle to the original owner, whichever period terminates first, but the nonconformity continues to exist; or (2) the vehicle is out of service for repair for a total of 30 or more business days during the express warranty term or the one-year period referred to in (1) of this section, whichever period terminates first; any period of time that repairs are not performed for reasons that are beyond the control of the person performing repairs under AS 45.45.300 [MANUFACTURER, DISTRIBUTOR, DEALER, OR REPAIRING AGENT] is excluded from the 30-day time period referred to in this paragraph. * Sec. 12. AS 45.45.325 is amended to read: Sec. 45.45.325. Parts availability. A manufacturer whose vehicles are sold in the state through an authorized dealer shall provide a person performing repairs under AS 45.45.300 [ITS DEALER OR REPAIRING AGENT] with any part necessary to make a repair of a nonconformity covered under an express warranty, as soon as possible, without additional charge for freight or handling, if the part is not in the person's [DEALER'S OR AGENT'S] inventory when the nonconforming vehicle is brought to the person [DEALER OR REPAIRING AGENT] for repair. * Sec. 13. AS 45.45.340 is amended to read: Sec. 45.45.340. Other rights and remedies. The provisions of AS 45.45.300 - 45.45.360 do not limit other rights and remedies that may be available to the owner of a motor vehicle under other provisions of law. This section does not create a new cause of action against a dealer or repairing agent who sells or against a person who attempts to repair under AS 45.45.300 a motor vehicle found to be nonconforming under AS 45.45.300 - 45.45.360. * Sec. 14. AS 45.45 is amended by adding new sections to read: Sec. 45.45.356. Schedule of compensation for shops. (a) A shop may request a schedule of compensation from a manufacturer or distributor. Upon receiving a request that complies with this section, the manufacturer or distributor shall provide the shop with the schedule of compensation that the manufacturer or distributor will pay to the shop to perform 2024-05-06 House Journal Page 2713 necessary repairs under AS 45.45.300(a)(2). (b) The schedule of compensation must include compensation for parts and labor. The compensation for parts must include the average retail percentage markup that the shop charges. The compensation for labor must include the rates and time allowances for labor performed under AS 45.45.300(a)(2). (c) Unless otherwise agreed to by the manufacturer or distributor and the shop, the schedule of compensation may not contain (1) rates less than the rates that the shop charges retail customers for similar nonwarranty service work; and (2) time allowances less than time allowances provided in independent labor time guides. (d) To establish the retail percentage markup, the shop shall submit to the manufacturer or distributor 100 sequential chronologically issued retail service repair orders paid by customers for warranty-like repairs or 90 consecutive days of retail service repair orders paid by customers for warranty-like repairs, whichever number of retail service repair orders is fewer. The retail service repair orders that the shop submits must cover retail repairs that the shop made less than 180 days before the shop submits the orders to the manufacturer or distributor. (e) A manufacturer or distributor may not require a shop to establish the retail percentage markup by a method other than the method required by (d) of this section. When establishing the retail percentage markup, the manufacturer or distributor may not require the shop to provide information that is unduly burdensome or time consuming to provide, including part-by-part or transaction-by-transaction calculations. (f) A manufacturer or distributor may not include in the calculation of the rates in the schedule of compensation (1) repairs for manufacturer or distributor special events, specials, or promotional discounts; (2) parts sold at wholesale; (3) routine maintenance not covered under warranty, including the replacement of fluids, filters, and belts, unless the shop provides the routine maintenance in the course of making a repair; (4) nuts, bolts, fasteners, and similar items that do not have an individual part number; 2024-05-06 House Journal Page 2714 (5) tires, batteries, and light bulbs; (6) vehicle reconditioning; and (7) repair orders for motor vehicle body repairs if an insurer pays for the repairs. (g) The retail percentage markup calculated under (d) of this section may not take effect more than 30 days after the manufacturer or distributor approves the shop's proposed rate, or after the manufacturer or distributor is considered to have approved the shop's proposed rate under this section. If the manufacturer or distributor does not disapprove the shop's proposed rate within 30 days after the shop submits the rate application, then the shop's proposed rate shall be considered approved. (h) A manufacturer or distributor may disapprove a rate proposed by a shop under this section if the manufacturer or distributor demonstrates that the proposed rate is materially miscalculated or unreasonable compared to other similarly situated shops, dealers, or repairing agents in this state. (i) A shop may not receive more than one rate increase under this section in a calendar year. (j) In this section, (1) "rate" means the dollar amount that a manufacturer pays a shop for one hour of labor; (2) "time allowance" has the meaning given in AS 45.25.210(j). Sec. 45.45.358. Payment and approval of claims from shops. (a) A manufacturer or distributor shall pay a shop for approved repairs performed under AS 45.45.300(a)(2) in accordance with the schedule of compensation that applies to the repairs when the shop makes the repairs. (b) A shop shall submit a claim for a repair performed under AS 45.45.300(a)(2) to the manufacturer or distributor within 90 days after the shop completes the work on the new motor vehicle. The shop shall submit the claim in the manner that the manufacturer or distributor requires. (c) Within 30 days after the manufacturer or distributor receives a claim from a shop under (b) of this section, the manufacturer or distributor shall approve or disapprove the claim and notify the shop of the reasons for disapproving the claim in writing or electronically. The shop may correct and resubmit the 2024-05-06 House Journal Page 2715 claim within 30 days after the shop receives the written or electronic notice that the manufacturer or distributor disapproved the claim. If a manufacturer or distributor does not disapprove a claim as required by this subsection, the claim is considered approved. The manufacturer or distributor shall pay the claim within 30 days after the approval of the claim. (d) Notwithstanding the reporting requirement of AS 45.45.300, a manufacturer or distributor may not deny a claim for a repair performed under AS 45.45.300(a)(2) that was discovered and properly repaired by the shop during the course of a separate repair if the shop (1) has already received a schedule of compensation from the manufacturer or distributor; and (2) provides to the manufacturer or distributor the required documentation demonstrating the need for the repair. (e) A manufacturer or distributor may initiate or conduct an audit to determine the validity of paid claims for repairs performed under AS 45.45.300(a)(2) only if the manufacturer or distributor initiates the audit within one year after the payment of the claim. The manufacturer or distributor may audit a shop performing repairs under AS 45.45.300(a)(2) once in a calendar year to determine the validity of claims paid to the shop. (f) Notwithstanding the limitations under (e) of this section, if a manufacturer or distributor reasonably suspects fraud, the manufacturer or distributor may audit a shop for fraudulent claims during any period in which an action for fraud may be commenced under applicable state law. (g) In this section, "fraud" has the meaning given in AS 45.25.990. * Sec. 15. AS 45.45.360 is amended by adding new paragraphs to read: (13) "schedule of compensation" means a schedule established under AS 45.45.356 that includes parts, rates for labor, and time allowances for labor; (14) "shop" has the meaning given in AS 45.45.240, but does not include a dealer or repairing agent when performing warranty repairs in the state on a motor vehicle under a franchise agreement with or under the specific authority of a manufacturer or dealer. * Sec. 16. The uncodified law of the State of Alaska is amended by 2024-05-06 House Journal Page 2716 adding a new section to read: APPLICABILITY. This Act applies to an express warranty for a new motor vehicle provided on or after the effective date of this Act." Representative Sumner moved and asked unanimous consent that Amendment No. 4 be adopted. Representative Stapp objected. Representative Sumner moved and asked unanimous consent to withdraw Amendment No. 4. There being no objection, it was so ordered. Representative Saddler moved and asked unanimous consent that CSHB 233(TRA) am be considered engrossed, advanced to third reading, and placed on final passage. There being no objection, it was so ordered. CSHB 233(TRA) am was read the third time. The question being: "Shall CSHB 233(TRA) am pass the House?" The roll was taken with the following result: CSHB 233(TRA) am Third Reading Final Passage YEAS: 35 NAYS: 2 EXCUSED: 0 ABSENT: 3 Yeas: Allard, Armstrong, Baker, Carpenter, Carrick, Coulombe, Cronk, Dibert, Fields, Foster, Galvin, Gray, Groh, Hannan, Himschoot, C.Johnson, Josephson, McCabe, McCormick, McKay, Mears, Mina, Prax, Rauscher, Ruffridge, Saddler, Schrage, Shaw, Stapp, Story, Stutes, Tilton, Tomaszewski, Vance, Wright Nays: Eastman, Sumner Absent: Edgmon, D.Johnson, Ortiz And so, CSHB 233(TRA) am passed the House and was referred to the Chief Clerk for engrossment.