Legislature(2025 - 2026)GRUENBERG 120
02/26/2025 01:00 PM House JUDICIARY
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| Audio | Topic |
|---|---|
| Start | |
| HB97 | |
| HB74 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 74 | TELECONFERENCED | |
| *+ | HB 97 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
HB 74-CRIME COUNTERFEIT/NONFUNCTIONING AIRBAG
1:55:21 PM
CHAIR GRAY announced that the final order of business would be
HOUSE BILL NO. 74, "An Act establishing the crime of airbag
fraud."
1:55:41 PM
The committee took an at-ease from 1:55 p.m. to 1:56 p.m.
1:56:47 PM
REPRESENTATIVE FRANK TOMASZEWSKI, Alaska State Legislature, as
prime sponsor, presented HB 74. He paraphrased the sponsor
statement [included in the committee packet], which read as
follows [original punctuation provided]:
House Bill 74 establishes the crime of airbag fraud
for knowingly selling, installing, or manufacturing a
counterfeit or nonfunctioning airbag. Currently in
Alaska, there is no law to prohibit the installation
or reinstallation of airbags that do not meet federal
safety standards. By establishing airbag fraud, House
Bill 74 prohibits bad actors from knowingly selling,
installing, or manufacturing these dangerous and
improper devices.
Similar legislation already exists in over 30 states.
House Bill 74 establishes airbag fraud as a Class A
misdemeanor or a Class C felony if death or serious
injury to another person results.
House Bill 74 protects owners and employees of motor
vehicle dealerships if they are unaware of counterfeit
parts in a vehicle. It does not create a duty for
owners and employees to inspect a vehicle for
counterfeit parts before selling it. It does not
inhibit the sale of vehicles for parts or salvage, or
as a transfer to or from an insurance company to
fulfil an insurance claim.
1:59:39 PM
DAVID GOFF, Staff, Representative Frank Tomaszewski, Alaska
State Legislature, on behalf of Representative Tomaszewski,
prime sponsor, presented sectional analysis for HB 74 [included
in the committee packet], which read as follows [original
punctuation provided]:
Section 1
Amends the airbag fraud statute (AS 28.35.248) by
establishing and defining airbag fraud as knowingly
selling, offering for sale, installing, reinstalling,
or manufacturing a counterfeit or nonfunctioning
airbag or device that is intended to conceal a
counterfeit or nonfunctioning airbag, or intentionally
selling, leasing or trading a vehicle that the person
knows has a counterfeit or nonfunctioning airbag.
Establishes airbag fraud as a class A misdemeanor or a
class C felony if death or serious physical injury to
another person occurs as a result of the counterfeit
or nonfunctioning airbag.
Establishes that the liability of any party in a civil
action is not precluded. Provides that this
legislation does not create a duty to inspect a
vehicle for a counterfeit or nonfunctioning airbag
before its sale.
This section excludes a person installing,
reinstalling, or replacing an airbag on a vehicle used
solely for police work; an owner or employee of a
motor vehicle dealership or the owner of a vehicle who
does not have knowledge that the vehicle's airbag is
counterfeit or nonfunctioning; a person who transfers
a vehicle title to an insurance company to satisfy an
insurance claim; or an insurance company that sells or
otherwise disposes of a vehicle as authorized by law
or regulation.
2:01:34 PM
CHAIR GRAY asked why insurance companies would be exempt from
selling a vehicle with nonfunctioning or counterfeit parts.
REPRESENTATIVE TOMASZEWSKI said generally, insurance companies
are selling a vehicle that's been totaled with airbags deployed,
thereby selling it as a "parts vehicle." He said the bill would
acknowledge that and prevent the insurance company from being
held liable.
CHAIR GRAY questioned the intent of the language on page 2, line
19, which stated that the bill would not create a duty for the
owner or employee of a motor vehicle dealership or the owner of
the vehicle to determine whether the airbag is counterfeit or
nonfunctioning.
MR. GOFF deferred the question to the invited testifiers.
2:04:55 PM
CHAIR GRAY opened invited testimony.
2:05:07 PM
CRAIG ORLAN, Director of Local and State Government Retailers,
American Honda Motor Company, stated that this problem has been
plaguing the industry for over a decade. However, he assured
the committee that it's not a problem with the legitimate
automotive supply chain. When customers are involved in an
accident, they sometimes replace their airbags at an independent
repair facility, of which there are a handful of bad actors who
knowingly replace those airbags with products that are not
intended to provide protection, such as newspaper, rags,
sawdust, or t-shirts. He shared examples to highlight the
magnitude of the issue, reporting that the Wall Street Journal
underwent an extensive investigation of the problem and
identified several deaths and injuries all over the country that
were directly related to these knockoffs. He said the primary
goal is to prevent these counterfeits from being installed,
adding that the vast majority of the products originate
overseas. While there has been great support from federal law
enforcement agencies, they have limited authority to act. By
supplementing federal law with state law, state and federal
cooperation would help prevent these airbags from entering the
country and help address e-commerce retailers - who sell these
products in a timely manner. He concluded that similar
legislation had been enacted in 38 states with broad bipartisan
support and no public opposition.
2:07:59 PM
CHAIR GRAY,[referencing page 2, line 19], asked why the state
would not want dealerships to determine whether an airbag is
counterfeit or nonfunctioning.
MR. ORLAN opined that it would be an undue burden to require
vehicle owners or dealerships to physically remove the airbag to
confirm that it is legitimate every time the vehicle diagnostic
system reports an issue.
CHAIR GRAY sought to confirm that it's impossible to check the
functionality of an airbag without physically removing it.
MR. ORLAN answered, "Correct."
CHAIR GRAY asked for verification that this issue does not apply
to a brand-new vehicle purchased from a dealership.
MR. ORLAN confirmed that this is not a problem with the
legitimate automotive manufacturing process; however, it could
apply to a used vehicle from a dealership if it had repairs made
in the aftermarket.
CHAIR GRAY announced HB 74 would be held over.