Legislature(2017 - 2018)BARNES 124
04/14/2017 03:15 PM House LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| HB209 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 209 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 83 | TELECONFERENCED | |
| += | HB 195 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
April 14, 2017
3:18 p.m.
MEMBERS PRESENT
Representative Sam Kito, Chair
Representative Adam Wool, Vice Chair
Representative Andy Josephson
Representative Louise Stutes
Representative Chris Birch
Representative Gary Knopp
Representative Colleen Sullivan-Leonard
MEMBERS ABSENT
Representative Mike Chenault (alternate)
Representative Bryce Edgmon (alternate)
COMMITTEE CALENDAR
HOUSE BILL NO. 209
"An Act relating to product warranties and services for certain
products; relating to certain dealers, distributors, and
manufacturers; and establishing an unfair trade practice under
the Alaska Unfair Trade Practices and Consumer Protection Act."
- HEARD & HELD
HOUSE BILL NO. 83
"An Act relating to new defined benefit tiers in the public
employees' retirement system and the teachers' retirement
system; providing certain employees an opportunity to choose
between the defined benefit and defined contribution plans of
the public employees' retirement system and the teachers'
retirement system; and providing for an effective date."
- SCHEDULED BUT NOT HEARD
HOUSE BILL NO. 195
"An Act relating to insurer actions based on credit history and
insurance scores at insurance policy renewal; and providing for
insurer consideration of consumer requests for exceptions of
credit history or insurance scores."
- SCHEDULED BUT NOT HEARD
PREVIOUS COMMITTEE ACTION
BILL: HB 209
SHORT TITLE: PRODUCT WARRANTIES & REQUIRED UPDATES
SPONSOR(s): REPRESENTATIVE(s) KITO
04/03/17 (H) READ THE FIRST TIME - REFERRALS
04/03/17 (H) L&C, JUD
04/14/17 (H) L&C AT 3:15 PM BARNES 124
WITNESS REGISTER
BIANCA CARPENETI, Staff
Representative Sam Kito
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: On behalf of Representative Kito, prime
sponsor, introduced HB 209.
KEN GERONDALE, Owner
Construction Machinery Industrial (CMI)
Anchorage, Alaska
POSITION STATEMENT: Testified that HB 209 supports the small
purchasers of heavy equipment within the state of Alaska.
JOHN MACKINNON, Executive Director
Associated General Contractors of Alaska (AGC)
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 209.
GEORGE WHITAKER, State Government Affairs
CNH Industrial America LLC
Racine, Wisconsin
POSITION STATEMENT: Testified about the concerns that his
company has with HB 209.
JIM HALLORAN
Caterpillar Inc.
N C Machinery
Sacramento, California
POSITION STATEMENT: Testified in opposition to HB 209.
DAVID BLOMMER
Bicknell Inc.
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 209.
WILL TONSGARD III, Vice President
Channel Construction
Juneau, Alaska
POSITION STATEMENT: Had his written testimony in support of HB
209 read by Chris Gerondale.
CHRIS GERONDALE, Contract Employee
Channel Construction
Juneau, Alaska
POSITION STATEMENT: Answered questions during the hearing on HB
209.
NICK YAKSICH, Senior Vice President
Government and Industry Affairs
Association of Equipment Manufacturers (AEM)
Clarksville, Maryland
POSITION STATEMENT: Testified in opposition to HB 209.
CURTIS THAYER, President & CEO
Alaska Chamber of Commerce
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 209.
ACTION NARRATIVE
3:18:59 PM
CHAIR SAM KITO called the House Labor and Commerce Standing
Committee meeting to order at 3:18 p.m. Representatives Kito,
Sullivan-Leonard, Stutes, Knopp, Birch, Josephson, and Wool were
present at the call to order.
HB 209-PRODUCT WARRANTIES & REQUIRED UPDATES
3:19:39 PM
CHAIR KITO announced that the first order of business would be
HOUSE BILL No. 209, "An Act relating to product warranties and
services for certain products; relating to certain dealers,
distributors, and manufacturers; and establishing an unfair
trade practice under the Alaska Unfair Trade Practices and
Consumer Protection Act."
3:20:38 PM
BIANCA CARPENETI, Staff, Representative Sam Kito, Alaska State
Legislature, on behalf of Representative Kito, prime sponsor of
HB 209, explained that the bill would provide protections for
businesses and consumers in Alaska's heavy equipment market.
She spoke as follows:
Our state's remote worksites and transportation
challenges, coupled with high shipping costs, often
result in high costs to local dealers and distributors
when delivering warranty and update services for a
manufacturer's defective or deficient product. Many
of these services are not reimbursed by the
manufacturers who require this work. This results in
our local businesses, or their customers, absorbing
expenses for shipping, transportation, and labor that
should be paid by the company that manufactures the
defective or deficient product, provides the warranty,
and requires the updates.
... Remote rural work sites where no approved warranty
providers are available present a challenge. This
issue arises when one party in a contract, in this
case the local vendor, lacks the ability to negotiate
effectively with the other party, in this case the
larger company, the manufacturer. Provisions should
exist in Alaska law that ensure Alaska's vendors and
consumers are truly protected by fair warranty
contracts and that the spirit of the warranty to fix
what is defective is honored. Government can support
an environment where businesses and commerce can
thrive. That's the goal of this bill. It is about
contractual rights between parties providing
protection for Alaska's vendors and consumers.
I'd also like to note that HB 209 closely tracks the
statute governing marine and motorized recreational
products, AS 45.27.100. That statute passed the
Alaska Legislature unanimously in 2009 as [Senate Bill
173]. To my knowledge, this statute has not generated
difficulties or unintended consequences in the
intervening eight years. And given that successful
track record it seemed prudent to take advantage of
legislation that was tried and true in Alaska.
HB 209 also includes what I will refer to as "the
lemon law provision." Lemon laws originated with
automotive vehicles. These are regulations meant to
protect consumers in the event that they purchase a
defective vehicle. Alaska's lemon law protecting
motor vehicles is AS 45.45.300, which is closely
analogous to the lemon law provision in [HB] 209 in
front of you.
MS. CARPENETI reviewed the specific provisions of HB 209. She
noted that Section 1 of HB 209 [would amend AS 45.45 by adding a
number of new sections to statute]. She stated that sections
772-776, in general, would protect the manufacturer's interest
by ensuring that dealers comply with standard warranty
practices. Section 777 would address required service
reimbursement and establish the minimum compensation for work
performed by a dealer on behalf of a manufacturer. For example,
she continued, it would specify the minimum rate, the
established customer hourly rate, and a time for labor costs.
In addition, it would require the manufacturer to pay for
transportation and lodging costs if the dealer has to send an
employee to the field to perform the work. Ms. Carpeneti stated
that sections 778-779 would deal with products and parts needed
for repairs or services, including how these are reimbursed and
where they are delivered. She said Sections 780-781 would
outline the timeline and process for a manufacturer to respond
to a claim either by paying or disapproving it. The intent is
to limit the dealer's obligation to carry the manufacturer's
costs of warranty repairs beyond a reasonable period.
MS. CARPENETI continued discussing the changes that would be
made in Section 1 of HB 209 under proposed new sections to AS
45.45. She said section 782 would outline the repairs required.
She pointed out that this subsection, similar to many of the
previous provisions, is based on the all-terrain vehicle (ATV)
and marine statute and the purpose is to ensure that the
warranty coverage will apply if a customer properly reports a
covered defect during the warranty period, even if the actual
warranty work takes place at a later time. She explained that
sections 783-784 are where the lemon law provisions can be found
in HB 209, both for how the provision would work and for how
consumers would make a claim under the provision.
MS. CARPENETI reiterated that marine products and ATVs are
protected, and motor vehicles have lemon law protections under
AS 45.45.300, while heavy equipment at this time does not have
the same protection in Alaska. In the absence of statutory
protections, she advised, dealers in Alaska can find themselves
in three-way negotiations with manufacturers and customers about
the return or replacement of defective equipment. In these
situations, a dealer may have to buy back failing equipment from
a customer or substitute other equipment. Section 785 would
outline the exemptions to this provision in that the
manufacturer would not be liable for user error. If a user
alters or abuses a piece of equipment, that piece of equipment
would not be under warranty. She explained that section 786
would work in conjunction with the lemon law provision by
creating a rebuttable presumption in order to define what is
considered reasonable attempts at repairing a defective or
deficient product. She stated that the last two sections, 787-
788, would establish which products apply here and what would
qualify as warranty service.
MS. CARPENETI addressed the remaining sections of the bill. She
stated that Sections 2 and 3 cover definitions. Section 4, she
pointed out, adds the violations of this provision to unfair
methods of competition and unfair or deceptive acts or practices
found in 45.50.471, Alaska's consumer protection statute. She
said Section 5 establishes the applicability of the act to after
its effective date and further noted that the act is not
retroactive and therefore it applies to new contracts.
3:27:15 PM
KEN GERONDALE, Owner, Construction Machinery Industrial (CMI),
testified that he has been involved in HB 209 since it was
introduced. He said he operated equipment prior to age 27 and
became involved in marketing heavy equipment after age 27. In
1985 he started his own business and today CMI is a fairly
significant supplier of heavy equipment into the oil patch, as
well as mining and general contracting.
MR. K. GERONDALE said he has been working on HB 209 because in
Alaska there is a big disparity between small and large
contractors. In his work distributing equipment in Alaska he
has found that large contractors and large mines have the
ability on their own to negotiate with both the dealer and the
manufacturer regarding warranties to repair defective equipment
and make it right or to force the dealer or manufacturer to buy
back that piece of equipment. The bill, he advised, mainly
supports the small users of heavy equipment in Alaska that
normally do not have a large voice.
MR. K. GERONDALE noted that Alaska has many reputable dealers
and he considers his company to be one of them. In the last 12
months, he related, CMI has purchased back five or six pieces of
equipment that did not operate properly, and, of those, half
were from small contractors. The strategy of his business is to
take care of the people to whom he sells. At the same time, he
continued, his experience over the past 30 years is that small
and sometimes large users of heavy equipment have not had the
protection to negotiate, force, or get a piece of equipment
repaired. Given Alaska is the size of the continental U.S. from
coast to coast and north to south, he said, it is very expensive
for dealers and manufacturers to take care of their equipment,
which is, from his standpoint, the background of HB 209.
MR. K. GERONDALE related an instance from about a year ago when
CMI sold three new pieces of equipment to Pogo Mine. The
equipment was manufactured by Skyjack, a Canadian company that
CMI had represented for years. At Pogo Mine the equipment
worked a very tough situation underground with explosives and
consumables. The three like pieces of equipment did not operate
per the design and were considered dangerous for the users of
the equipment underground. He said CMI negotiated with the
manufacturer for months and months to repair the machines and
CMI ended up having to buy back the three pieces and got the
manufacturer to reimburse the warranty cost under the
manufacturer's condition that it didn't want to ever do business
with CMI again as far as selling heavy equipment, which was fine
with CMI.
3:31:29 PM
MR. K. GERONDALE shared another instance in which a small mining
company, Goldorado, purchased a used excavator for doing mining
in the Talkeetna Mountains and support work for the Alaska
Railroad. The equipment had a number of failures, he said, and
CMI ended up buying back the excavator with no condition of
Goldorado buying another piece. Within six months, though,
Goldorado bought another piece of equipment from CMI that was a
different brand and is now a happy customer.
MR. K. GERONDALE said his point is that Alaska has no existing
protection for large or small users of heavy equipment. He
urged the committee to not let any manufacturer say it doesn't
have warranty problems because in his experience that is not the
case. The manufacturers that CMI represents have a hard time
from time to time, he noted, but CMI is a large enough dealer
that it can force the initiative and take care of a customer.
3:32:55 PM
REPRESENTATIVE JOSEPHSON said he has learned that opportunities
arise between contracting parties to renegotiate the contracts.
He asked whether Mr. K. Gerondale has utilized those
opportunities and bargained aggressively. He further asked
whether Mr. K. Gerondale's position is that the original
manufacturer is always going to be in a preferred economic
position.
MR. K. GERONDALE responded that when there are problems, CMI
aggressively pursues negotiating with the manufacturers that it
works with in supporting equipment. Problems are run into, they
are not all trouble-free. He said he doesn't feel that HB 209
will cause any lawsuits or an increase in price. Rather, the
bill is going to force the owner of the equipment and the dealer
that sold the equipment, or the manufacturer that sold it
direct, to negotiate and come up with a solution to the problem.
He pointed out that HB 209 is not retroactive. For example, CMI
has had signed contracts for many years with manufacturers, and
the bill would not help CMI as much as it would help a new
dealer that signs a contract. The bill, he opined, is going to
put a delta out there, a line in the sand, that CMI can go back
to a manufacturer and say that under state law the manufacturer
must live up to its commitment.
REPRESENTATIVE JOSEPHSON said it is an interesting bill in that
CMI is an Alaskan company and one might think CMI has the
sympathy of fellow Alaskans. But, CMI is a very significant
company and so it would seem that CMI would have a lot of
economic power relative to the out-of-state manufacturer. He
said he is also wondering about the role of the legislature and
whether it should be intervening in these sorts of contracts.
For example, virtually everything is shipped to Alaska so there
must be a thousand negotiations about who bears the shipment
costs on everything from heads of lettuce to bicycles. He
surmised that the legislature is not generally asked to
negotiate or intervene in those, and so he is wondering why the
legislature is necessary in this instance.
MR. K. GERONDALE responded that, from his experience, it would
be very helpful for the end user of heavy equipment in Alaska to
have a law like this because the end user can then go back to
that manufacturer or that dealer and make sure they do what they
said they were going to do provide a reasonably reliable piece
of equipment with a certain warranty that is written down. The
legislature is not being asked to have any decision on that
warranty, he said. It is being asked to put something on the
books, so end users can say they just want [the manufacturer or
dealer] to live by the rules and follow the law to give the end
users what they were told they would be given.
MR. K. GERONDALE continued and posed a scenario of a small
homebuilder in Sitka that purchases a Skyjack forklift for
$110,000 from a Seattle dealer and is making huge payments only
to have the forklift fall apart and the homebuilder cannot get
it fixed. What leverage does that small homebuilder have today
to deal with the dealer in Seattle, he asked, or a dealer in
Anchorage or even Juneau unless there is a financial wherewithal
for that dealer to want to solve that problem. That user is
going to demand that the Seattle dealer or the manufacturer in
Canada buy back that piece of equipment, but, he said, that will
not happen because there is no support for that.
3:38:39 PM
REPRESENTATIVE BIRCH stated he is uncomfortable because it
strikes him that the State of Alaska would be inserting itself
in a relationship between a dealer and a manufacturer. For
example, he said, the bill would require the manufacturer to pay
the transportation and lodging costs of a dealer's employee sent
to the field to perform the work. He posed a scenario in which
someone buys a Ford sport utility vehicle (SUV) and flies it to
Kotzebue, Alaska, and he questioned whether it is realistic that
that customer can expect Ford to fly someone to Kotzebue at
Ford's expense to fix the SUV. Construction equipment can get
into really remote locations in Alaska, he noted, and HB 209
would say unilaterally that the manufacturer must pick up the
tab for transportation and lodging. He requested Mr. K.
Gerondale to address the state intervening in what is a contract
between the dealer and the manufacturer.
MR. K. GERONDALE answered that CMI sells lots of equipment to
the State of Alaska and the State of Alaska contract calls for
the manufacturer or dealer to support that equipment wherever it
is, which can be Naknek or Kotzebue. When CMI sells equipment
directly to the City of Kotzebue, he pointed out, that warranty
includes flying to Kotzebue and working on and repairing the
equipment. That is part of CMI's existing warranty program for
the products it sells. Having said that, he continued, some
manufacturers don't provide that level of support and in that
case a large dealer like CMI can force the manufacturer to
reimburse CMI and help CMI fix that piece of equipment. The
problem is: for a small dealer that doesn't have the financial
wherewithal, or for that fellow in Kotzebue who buys a brand-new
piece of equipment in Seattle, Washington, and asks the Seattle
dealer to fly somebody up to fix it that is just not going to
happen.
MR. K. GERONDALE further explained that the normal course of
business with most of the dealers and the manufacturers that
have dealers in Alaska is that they have to fix it on site. In
those areas where [a dealer] doesn't get reimbursed the airfare
or [other expenses], that is normally not negotiated but rather
part of the purchase contract on the front end. He said he can
guarantee the committee that 90-95 percent of the equipment that
CMI sells out in the Bush, CMI fixes it, CMI has to fix it. The
end user does not have to pay for all the travel time or expense
of getting there.
REPRESENTATIVE BIRCH offered his understanding that HB 209
wouldn't change the aforementioned and that the bill is simply
looking out for smaller dealers and would not adversely impact
or directly impact a large operator like CMI.
MR. K. GERONDALE confirmed that the bill would not [cause
adverse impact] and that that is part of CMI doing business. He
stated that if Representative Birch were to talk to his
constituents who are contractors and buying new equipment, they
would tell him that that it is expected and should be part of
the purchase contract - if the equipment needs repair under the
warranty, the travel expense has to be paid because the consumer
cannot absorb that high expense.
3:43:18 PM
REPRESENTATIVE STUTES asked where and why the state would be
involved in this. She posed a scenario in which a bill is
passed that is more onerous on the manufacturer and asked
whether there is anything to Mr. K. Gerondale's knowledge that
would preclude the manufacturer from saying that any equipment
it sells to the state of Alaska will not have a warranty on it.
MR. K. GERONDALE replied he doesn't know of any bonafide quality
manufacturer doing business in Alaska that would quit doing
business in Alaska because it is being asked to uphold the
warranty that it provides. However, he said, a manufacturer
that builds poor product, doesn't have confidence in that
product, and knows that a product sent to the Bush will be
expensive to support, may choose not to sell it for that
specific reason. Just because Alaska stretches coast to coast
and north to south, he opined, doesn't mean Alaska shouldn't
have the same warranty coverage as the continental 48 states.
REPRESENTATIVE STUTES asked whether Mr. K. Gerondale thinks
there isn't any difference between working in rural Alaska as
opposed to one of the Lower 48 states.
MR. K. GERONDALE responded that he thinks there is a lot of
difference and that is exactly why it is so important to have
something on the books to provide protection. Regardless of
whether it is a small Bush community that buys crushers or
loaders, he continued, there should be the support to support
that equipment wherever it is.
3:45:36 PM
REPRESENTATIVE WOOL offered his understanding that Mr. K.
Gerondale is saying that some of the larger mines can
successfully negotiate with the manufacturers because of their
size and that CMI is at times in that same category. He
inquired whether CMI is big enough to get the same negotiating
power as the large mines, or whether that is what Mr. K.
Gerondale is striving for with HB 209.
MR. K. GERONDALE answered that that is not what he is striving
for. He said CMI has that now with the manufacturers that it
represents, and he doesn't think HB 209 will change the coverage
that CMI has from the manufacturers that it represents. The one
area that there is a possible difference, he noted, is the lemon
law portion of the bill when it comes to a piece of equipment
that just doesn't operate because of design. A good example, he
continued, is Tier 4 Interim mission control that has not proved
reliable and has been a big problem. Eighty percent of CMI's
buybacks have been because of the design of Tier 4 Interim and
CMI has been fully supported by its manufacturers when CMI has
come to solve that problem.
REPRESENTATIVE WOOL offered his understanding that CMI is large
enough to successfully negotiate with the manufacturers. He
noted that automobiles must be purchased from a dealer and
cannot be purchased directly from Ford. He asked whether
smaller companies or individuals in Alaska are able to buy
directly from the manufacturer and whether they are the ones the
bill is looking to protect.
MR. K. GERONDALE replied yes. A generator or any heavy piece of
equipment can be purchased directly from a manufacturer or a
dealer outside of Alaska and shipped direct to the purchaser's
location in, say, Western Alaska or the Aleutian Chain.
3:48:57 PM
REPRESENTATIVE JOSEPHSON stated he is not hearing that people
are in breach of contract because if that were the case then any
lawyer could be employed to sue for breach of contract. He
offered his understanding that Mr. K. Gerondale is not saying
that [a manufacturer such as] Kubota guaranteed in the fine
print that if somebody were in a remote mining site ?
CHAIR KITO, due to technical difficulties with Mr. K.
Gerondale's online connection, moved to the next invited
witness.
3:50:23 PM
JOHN MACKINNON, Executive Director, Associated General
Contractors of Alaska (AGC), testified in support of HB 209. He
noted that AGC is a construction trade association representing
around 640 Alaska businesses involved in the construction
industry. Of those 640 businesses, he continued, about half are
contractors and half are suppliers and associates to the
construction industry. For full disclosure, he noted that CMI
is an AGC member, as are four or five other major equipment
dealers in the state. He stated AGC's support of the bill.
MR. MACKINNON related that several instances have been brought
to his attention where smaller contractors were the recipients
of poor services as a result of warranty issues or equipment
that failed to perform as promised. He said that when he sent
last year's version of the bill to his membership, some
contractors responded that the bill would have alleviated many
of the issues and poor performance that they had experienced.
One small dealer has told him of its definite support for the
bill. He offered his understanding, however, that equipment
dealers are unwilling to support the bill because they fear
retribution from their suppliers. He noted that CMI is a big
dealer, selling equipment like Hitachi, and is, in order of
magnitude, larger. Even though CMI is big and exerts leverage,
he said, the big manufacturers are considerably larger. He
reiterated AGC's support for HB 209 and said it is good for the
industry as a whole.
3:52:42 PM
REPRESENTATIVE KNOPP asked Mr. MacKinnon whether he knows any
end users who are buying factory direct from such companies as
Caterpillar, Volvo, or Hitachi.
MR. MACKINNON replied no, big manufacturers are dealing through
distributors and licensed retailers. He said he doesn't know of
anyone who would be able to buy factory direct. They oftentimes
buy from dealers outside Alaska to save money or they buy
aftermarket products out of state. Big equipment is sold
through licensed dealers within the state, he added.
REPRESENTATIVE KNOPP surmised that when a piece of equipment
comes, regardless of which dealer it is purchased through,
Alaska dealers still have an obligation for the warranty work on
that because that is part of the contract.
MR. MACKINNON responded correct.
REPRESENTATIVE KNOPP further surmised that when dealers pick up
a new product line, they would be aware of the warranty and the
contract of that manufacturer at that time.
MR. MACKINNON answered correct and added that when a dealer
picks up a product line, they might be picking up some potential
liabilities.
REPRESENTATIVE KNOPP opined that, to him, HB 209 does not read
like a consumer protection bill, but rather a dealer protection
bill. He said he likes some things in the bill, but dislikes
others. For example, he continued, he has trouble with the
provision that the manufacturer would pay the transportation and
lodging costs because he thinks that is an unrealistic
expectation in a state of this size. He said another provision
he doesn't like is the requirement to pay a dealer full retail,
rather than cost, for a part off the shelf. He recalled Mr.
Gerondale talking about the Tier 4 Interim problem and asked
whether that problem is the bulk of the warranty work having to
be performed.
MR. MACKINNON replied he cannot answer the question because he
is not familiar with many of the details on these warranty
issues, although he does know of a number that have been failure
to perform as specified or promised in the literature. He added
that the Tier 4 Interim, at least for a period of time, was a
work in progress and had a lot of little kinks to be ironed out.
3:56:20 PM
GEORGE WHITAKER, State Government Affairs, CNH Industrial
America LLC, testified that CNH is the manufacturer of Case IH
and New Holland agricultural equipment and Case IH and New
Holland construction equipment. He said seven CNH dealers are
located in Alaska, their locations being in Fairbanks,
Anchorage, Wasilla, and Palmer. The concerns called out in HB
209 are best addressed between dealers and suppliers, he stated.
Product support for delivery warranty reimbursement is a fast-
changing environment for suppliers and dealers alike, especially
as new smart products are seen. As new technologies emerge, he
advised, there is no question that the world of warranty is
going to change dramatically over the next three to five years.
He said CNH working with its dealers is best suited to plot the
course forward without legislative intervention.
MR. WHITAKER drew attention to page 2, line 20, Sec. 45.45.775.
Restrictions not allowed." He said the proposed section for AS
45.45 caught CNH's eye because of the ambiguous language; should
a dispute arise between the dealer and a supplier, he said, the
result would be an extremely difficult and costly scenario for
the parties. He added that CNH questions the exact meaning of
the language [on line 23] that states "if the restriction
impairs the dealer's or distributor's ability to satisfy a
required service". He maintained that "restriction" could mean
anything to a plaintiff's attorney, such as the method in which
a part was ordered, the words in the service manual, or the form
and manner of training that a dealer technician received from a
supplier, to name a few. The intent of this paragraph appears
to be that the suppliers would have to follow the law, which he
said they currently do. He said the section needs clearer
language to reduce the potential to head down an unnecessarily
expensive and time-consuming path should a dispute arise.
MR. WHITAKER brought attention to page 2, line 25, Sec.
45.45.776. Payment for required services." Regarding the
language, "standard claim procedures", he said there is no real
industry standard form for warranty claims. For example, he
continued, CNH's process is different in form and function from
Caterpillar as is [Caterpillar's] from John Deere and different
other suppliers of chainsaws, ATVs, and other products that
would be covered under the proposed legislation. It seems
absent of an industry standard, he stated. It is ambiguous and
lends itself to an unnecessarily expensive and time-consuming
process should a dispute arise between dealers and suppliers.
4: 00:10 PM
MR. WHITAKER turned to page 2, [line 29], "Sec. 45.45.777.
Required service reimbursement. Regarding the language of
Required service reimbursement, beginning on page 2 and
continuing to page 3. He said it seems to be an apples and
oranges comparison, because the language states that the
manufacturer shall pay the dealer at a rate not less than the
highest of three choices that follow, [on page 3, lines 5-10,
paragraphs (1)-(3), which read as follows]:
(1) the rate the dealer or distributor
customarily charges a customer for work that is not a
required service;
(2) the manufacturer's printed flat rate; or
(3) the rate established by a flat rate
manual for dealers or distributors, if the manual is
produced for dealers or distributors by a nationally
recognized industry consultant.
MR. WHITAKER stated that private published labor rate manuals
may exist in the auto industry but if they exist in construction
equipment, they are very hard to find and if found they are
typically used for providing productivity analysis for dealer
technicians or job quotations, but certainly not for warranty
purposes. Mr. Whitaker pointed out that the dealer posted labor
rate varies from dealer to dealer, with the dealer deriving the
rate locally without input from the manufacturer and without
regard to the supplier. The rate is based on the market served
and the investment the dealer has made, the wages the dealer
pays, and the dealer's position in the marketplace. So, he
continued, two dealers representing the same brand will
invariably have different posted labor rates. Manufacturers
don't typically dictate labor rates to the dealers, he added.
MR. WHITAKER said the next proposed sections for AS 45.45 he
will be discussing are about how cost inevitably finds the
consumer and will speak to some of the earlier questions about
how manufacturers might change warranty and how cost could be
passed on to consumers through enhanced warranty reimbursement.
He first directed attention to language on page 3, line 11,
which states, "The payment under (b) of this section must
include payment for clean-up, preparation, diagnosis,
disassembly, repair, assembly, testing, and final cleaning". He
said the words clean-up, preparation, testing, and final
cleaning are unaccountable and unauditable activities by the
dealer. Some jobs will have a lot, some jobs will have a
little, he continued, but the incremental administrative costs
will be substantial.
MR. WHITAKER said the aforementioned leads to the discussion
about the so-called unreimbursed costs and how they get paid.
He stated that a high performing dealer like CMI captures these
costs and knows what they are and typically builds those costs
into the cost of the machine when establishing a selling price
to the consumer. So, those costs are recovered when the dealer
sells the machine and they are effectively not unreimbursed
costs, the customer pays the costs just like customers
ultimately pay for all costs for the dealership plus a profit
for the business. It is a cost of doing business. If the
supplier were to be handed these costs as proposed in the bill,
Mr. Whitaker continued, a similar thing would happen. The
supplier would see higher warranty costs and would offset that
cost by raising the cost of the equipment sold to dealers in
Alaska, or the supplier would put a surcharge on the products
shipped to Alaska to cover these costs. So, at the end of the
day, the customer would pay these costs through the price of the
equipment.
4:04:40 PM
MR. WHITAKER discussed language on page 3, lines 14-16,
[subsection] (d), which states, "In addition to the payment
under (b) of this section, the manufacturer shall pay a dealer
or distributor a minimum of one hour at the dealer's or
distributor's standard labor rate for the administration of each
required service claim." He advised that dealers have various
people in their business to keep things running direct folks
who produce the revenue and indirect folks who help things
happen in the business. All those people are there to help
technicians work effectively in generating income. The cost of
all those people, he said, is calculated into the dealer's shop
or labor rate and it should be treated just like the other
departments of the dealership that have administrative costs.
So, if the state says, "Mr. Dealer, transfer this cost to the
supplier," the suppliers will in turn transfer that cost back to
the dealer through price increase or through surcharge and
ultimately the customer will pay for that hour of administration
as the customer does today.
MR. WHITAKER spoke to language on page 3, lines 17-29,
[subsection (e)], which states, "The manufacturer shall
reimburse the dealer or distributor for the transportation and
lodging costs of the employees of the dealer or distributor when
it is necessary for the employees to travel to the location of a
product to perform a required service." He said that from
personal experience working in areas of large geography, Texas
being an example, if the dealer wants to sell a product to a
customer that will be taking the product beyond a certain radius
or to a remote area, then the dealer will have conversation with
the customer so that the customer understands that he/she will
have some financial responsibility for travel time to conduct
some warranty and service. So, Mr. Whitaker continued, the
customer/owner of a backhoe in Prudhoe Bay can't expect the same
type of cost structure for warranty that does a customer in
Anchorage or Fairbanks. In turn, that customer builds that cost
into his cost of doing business. There is some incremental cost
from being a long way from support infrastructure, he said, and
those customers understand that and build that into their cost
of doing business.
4:07:18 PM
MR. WHITAKER stated that there is a point regarding the lemon
law that doesn't seem to be included in the bill. There might
be cases, he continued, where a supplier says that a certain
application doesn't work for a machine; for example, it was
earlier mentioned about Skyjack lifts in a mining condition. He
said CNH has had excavators in salt conditions and in very tough
marble quarry mining conditions and CNH wasn't made aware of the
conditions that the machine was going into. In these
situations, he explained, rather than replace a product CNH
would simply want to provide a refund and walk away from the
deal, but it doesn't seem that the bill provides coverage for
that option for the manufacturer.
MR. WHITAKER addressed what he termed very broad definitions
related to equipment, tools, and motor vehicles. He pointed out
that regarding a repair, a dealer who sells a Kubota tractor to
be used for farming in the Matanuska-Susitna Valley and who
sells that same model tractor with a backhoe for light
construction in Anchorage would be treating customers,
suppliers, and the product differently between the two.
4:08:55 PM
REPRESENTATIVE JOSEPHSON offered his understanding that there is
opportunity for negotiation to occur between the manufacturers
that Mr. Whitaker broadly represents and the dealer/distributor.
He asked Mr. Whitaker to provide an example of something the
manufacturer has conceded in a previous negotiation.
MR. WHITAKER requested clarification on whether "opportunity for
negotiation" is in relation to a dealer agreement or in relation
to a failed machine warranty experience.
REPRESENTATIVE JOSEPHSON clarified he is talking about a dealer
agreement, so meaning the birth of the new set of negotiations
much like a union would negotiate with management, not that that
is a parallel. He offered his understanding that there are
actual meetings where there is an offer and an acceptance made.
MR. WHITAKER replied that CNH has a standard dealer agreement
because in many cases the law says that dealers must be treated
the same - the same terms, same pricing, no biases towards size.
There might be some ability to change price based on volume and
so forth, he noted, and below that a lot of operating items are
negotiated. In the case of a warranty, he continued, if there
is a major failure and it is a critical customer, or the dealer
feels that the customer warrants some cooperation, CNH will get
in and negotiate that with the customer and dealer in a three-
party fashion. Regarding the dealer agreement, there may be
some trade areas or other types of things that are unique to
Alaska that CNH would negotiate through amendments and addendums
to the contract. But by and large, he said, it is a standard
contract offered to all dealers and signed across all 50 states.
4:11:35 PM
REPRESENTATIVE JOSEPHSON noted the committee has heard a lot
about the manufacturer's side and the dealer/distributor's side.
He inquired as to what the customer thinks is going on. For
example, he presumed that if he bought some heavy equipment for
his farm in the Matanuska-Susitna Valley and it didn't work,
there would be something in writing that says either the
distributor that sold him the equipment is responsible and he
can rely on that because that is his contract with the
distributor or that there is a contract that says it would be
someone in Illinois working for John Deere that is responsible.
He said he isn't hearing that there is a dispute about contract
duty, as that is what contracts are about. He said HB 209 is
about moving duty from one side to the other and asked whether
that is Mr. Whitaker's understanding.
MR. WHITAKER answered in the affirmative. He added that in this
case he wouldn't say shift duty so much as shift cost of
execution. He said the first line is always the dealer that
sold the equipment or the dealer into whose area the equipment
was sold and is obliged to do the warranty work or do the
service work on that machine. If the dealer finally runs out of
rope and has done everything it can, then the company will step
in and bring in an expert, or make a swap, or do whatever is
necessary to get right with the customer.
4:13:50 PM
REPRESENTATIVE BIRCH noted that when a customer buys a car from
a dealer, the dealer charges the customer by the hour for
maintenance work. However, he continued, if the work is
warranty related the dealer has a contract with the supplier
that guarantees the dealer the work at a reduced rate. He asked
whether in the case of a bulldozer from a supplier to the
dealer, the dealer secures some guaranteed line of work and, if
so, whether doing warranty work for that equipment is typically
a pretty significant percentage of the work that that dealer
has.
MR. WHITAKER answered that many manufacturers are different, but
in CNH's case if warranty work comes back to the shop, CNH
reimburses the dealer at the dealer's retail/walk-in customer
rate for labor and reimburses the dealer at cost-plus for parts.
He said CNH does this because it also uses warranty as an
incentive to the dealer to make investments in tools and
training to give best-in-class service. As to how much of a
dealer's total revenue for shop work/service work is warranty,
he said there is a big variance. It depends on the machines
that the dealer has established and how well and effectively the
dealer markets its service department. There is no set
guarantee, he continued, but obviously the more machines a
dealer sells, the more warranty work it generates. On a
percentage basis, the shop is typically the most profitable area
of the dealership operation, whether it is automotive or
construction machinery.
REPRESENTATIVE BIRCH drew attention to page 3, lines 21-23,
which state, "A manufacturer shall reimburse a dealer or
distributor at the current manufacturer's full suggested retail
price for covered products in the dealer's or distributor's
inventory". He asked whether this provision seems reasonable to
Mr. Whitaker.
MR. WHITAKER replied that in his business there are "majors" and
"minors". For the majors that provision would not be out of
line, but for the minors it would be difficult. There would
also be the variations. For example, Caterpillar and John Deere
may each have a different situation, he said, as there is no
real standard. In terms of reimbursing a dealer at the dealer's
retail rate for labor, the provision is not out of line.
4:17:20 PM
REPRESENTATIVE WOOL inquired whether Mr. Whitaker was talking
about manufacturers or dealers when he mentioned "majors" and
"minors".
MR. WHITAKER responded that he was talking about manufacturers.
He said CNH might be considered a full-line manufacturer of
construction equipment, whereas there are other folks in a niche
market or with a shorter product line or that do attachments
only and they would be considered minors.
REPRESENTATIVE WOOL offered his understanding that regarding
warranty work, Mr. Whitaker is saying that CNH pays the shop
rate and pays for the parts. He asked whether, as a major, CNH
negotiates a different deal with different dealers or sellers of
CNH's products.
MR. WHITAKER answered that there is a baseline and the baseline
then improves as the dealer meets certain metrics in training,
schooling in electronic service tools that allow the dealer to
efficiently do diagnostics, investment in the special tools that
are required for the new models that have come in, and whether
the dealer has a parts fill rate that is of a certain strength.
The better the dealer does, he continued, the more the dealer is
invested, and the better service level the dealer gets, then the
more reimbursement the dealer receives from CNH. He prefaced
the aforementioned by noting that that is CNH's policy and he is
not talking for the industry in that regard.
REPRESENTATIVE WOOL surmised that CNH doesn't micro-negotiate
with independent dealers for special deals on warranty and
service work and that CNH has a pretty flat rate with the
various dealers based on the aforementioned metrics.
MR. WHITTAKER replied yes.
4:20:02 PM
REPRESENTATIVE KNOPP inquired whether CNH reimburses on a flat
rate basis and has flat rate manuals for certain repairs.
MR. WHITAKER responded that CNH has a flat rate manual for
warranty repairs. For instance, a job may take two hours and
then the dealer will multiply that times the dealer's personal
shop labor rate plus any additional incentive that CNH may have
given to the dealer.
REPRESENTATIVE KNOPP surmised CNH would not pay a dealer for
four hours on a job on which CNH had a flat rate of two hours.
MR. WHITAKER answered that if the dealer raised an objection
because of running into an unusual situation, the dealer would
have the ability to appeal and CNH will often make concessions
based on that appeal. If there is nothing special about the
operation, he added, then it is very likely that most of the
time the dealer would receive [payment for] two hours.
REPRESENTATIVE KNOPP related his personal experience regarding
warranty work. He said that when his skid loader breaks down
the first thing his local dealer tells him to do is bring in the
loader. If he cannot bring the loader in due to its location,
the dealer comes out to fix it and his experience has been that
he must pay for the mechanic's travel time and lodging. Even
when the equipment was under warranty, he pointed out, he has
had to pay for the travel but not the service that was covered
by the warranty. He asked whether his experience is the current
standard practice or whether it is CNH's practice to reimburse
those types of expenses.
MR. WHITAKER replied that as a general statement CNH doesn't
reimburse travel time or employee lodging and related costs. If
the dealer has a compelling reason that CNH should look at it,
then CNH will react to it. Also, he added, it is part of the
dealer's responsibility to understand where the product is
going. If it is going into a very difficult mining situation,
as was earlier described, he would suggest that Skyjack should
have been consulted about whether it was a place that Skyjack
was comfortable placing the product in. The dealer needs to
understand those costs and account for them as part of the sales
price that went into the product when it was purchased.
REPRESENTATIVE KNOPP asked whether, going into the purchase, it
wouldn't also be the consumer's responsibility to understand
that, especially if it was for a rural area. He said he would
think that the consumer and the dealer must have that
conversation.
MR. WHITAKER agreed that those conversations should happen and
added that it is incumbent upon the dealer to communicate
clearly to the customer that there are certain expectations the
customer should have that are different from when the customer
is located in close proximity to the dealer.
4:25:29 PM
CHAIR KITO noted it is said that things are different in Alaska
and in some circumstances, they really are different. He
pointed out that a lot of construction happens in remote parts
of Alaska where a contractor will load up a barge and ship it in
the springtime to a site and that equipment will not come back
until the fall or will stay there if it is a multi-year job. In
many cases, he further pointed out, the contractor won't know
which contract he is going to get by bidding, so when the
contractor gets a bid, he will go to whatever location is
identified and is therefore unable to tell the dealer which
community the equipment is going to be taken to. If the
equipment fails it affects the bottom-line of that contractor
and the contractor has purchased that piece of equipment in good
faith. He said the manufacturer needs to understand that some
of these smaller contractors don't have the ability to ship up
another piece of equipment or do some of the repairs on their
own and are reliant on the dealer or manufacturer to make sure
that they have equipment that works so they can do their jobs.
There is very little road for the geography of the state, he
noted, and a lot of places are only accessible by air or water.
He urged that Mr. Whitaker think about this regarding how the
manufacturers consider reimbursement for travel or lodging, or
how to support the pieces of equipment.
4:27:41 PM
JIM HALLORAN, Caterpillar Inc., Sacramento, California, stated
that Mr. Whitaker did a fine job of explaining the provisions in
the bill. He said Caterpillar and its dealer, N C Machinery,
are in opposition to HB 209. He noted that N C Machinery has
been Caterpillar's dealer since 1926 and said Caterpillar looks
at this more uniquely based on this life-long relationship with
the dealer and N C Machinery has a similar relationship with its
customers. Caterpillar sees this as a solution looking for a
problem, he added, because it is not experiencing the problems
that have been raised and, if Caterpillar is, it is handling it
in-house through its dealer agreements.
MR. HALLORAN addressed Representative Josephson's comment about
dealer agreements. He pointed out that Caterpillar has global
agreements and appreciates the challenges of Alaska and getting
into Alaska's remote areas. He said the global agreement that
Caterpillar has in place for Alaska is the same one that
Caterpillar has in Sub-Saharan Africa, which has the same amount
of challenges for getting parts and equipment service to
Caterpillar customers operating there.
MR. HALLORAN spoke to the earlier question about whether this
would change how warranties are handled and advised that, yes,
it very much would. Caterpillar's agreement is different than
CNH, Volvo, or others, he said, and HB 209 would impact how
Caterpillar handles its warranties. In terms of out-of-state
sales, he noted that the logical out-of-state sale for Alaska
would either be Canada or the state of Washington and for
Caterpillar, N C Machinery represents the state of Washington.
MR. HALLORAN, regarding the question about when dealer
agreements get looked at, said the last change that Caterpillar
had in its dealer agreements occurred in mid-1970s. These
agreements are working, he stated, and the legislature is
overstepping its bounds in getting involved in these types of
agreements. He added that Caterpillar shares the concerns
pointed by Mr. Whitaker.
4:31:40 PM
CHAIR KITO opened public testimony on HB 209.
4:32:03 PM
DAVID BLOMMER, Bicknell Inc., testified in support of HB 209.
He said the Bicknell's have been in Alaska for about 40 years
and have done paving for about 15 years. In about 2007, he
related, Bicknell Inc. purchased a factory rebuilt Ingersoll
Rand paver for about $225,000, one of the last rebuilt pavers
before Ingersoll Rand sold its paving division to Volvo
Construction Equipment. After receiving the machine in Juneau,
it was obvious there were some problems with it.
MR. BLOMMER stated that Bicknell Inc. had several meetings with
the local dealer and the manufacturer to try to address the
issues. The manufacturer told Bicknell to deal with the issues
through normal warranty procedures, he related, but those normal
warranty procedures didn't cover travel or labor when the
machine broke down on the job, airfreighting in the parts when
the machine was down and Bicknell needed to pave to avoid
liquidated damages, trucking the paver back to the dealer to get
it worked on, and renting another paver to complete the jobs.
Bicknell Inc. sold the paver in 2002 but was unable to get full
market value because Juneau is a small town and the paver was
already labeled a lemon.
MR. BLOMMER stated HB 209 would have helped reduce some of the
costs with the warranty work performed on the paver, although it
still would not have covered most of the costs incurred that
were associated with the down time. The bill would also have
given Bicknell Inc. the ability to return the paver under the
lemon law provision. For these reasons, he said, Bicknell Inc.
asks that the committee support HB 209.
4:33:57 PM
REPRESENTATIVE JOSEPHSON stated he is sympathetic but asked
whether Bicknell Inc. exercised sufficient due diligence in
reading the agreement. He said he could see a situation where
because of a compelling need one might speed through that. He
asked whether Bicknell Inc. found anything in the agreement that
was violated where the [dealer/manufacturer] said it would do
something but didn't.
MR. BLOMMER replied he is before the committee representing the
owner, Roscoe Bicknell, and he is unable to comment on that
because he doesn't know the specifics on the agreement.
4:34:57 PM
WILL TONSGARD III, Vice President, Channel Construction, had his
written testimony read by Chris Gerondale, a contract employee,
as follows:
I, Will Tonsgard, in Juneau, Alaska, ask you to
support HB 209. I am vice president of Channel
Construction, in Juneau, Alaska, and I'm speaking on
behalf of my father - William "Shorty" Tonsgard, Jr.,
who is president of Channel Construction - and myself.
We had not originally intended on getting involved in
this discussion because I was concerned about how this
may affect our support from Caterpillar going forward.
After I heard ... they testified in the Senate Labor
and Commerce Committee that they didn't have these
problems I became frustrated and angry, because we
have had many problems with getting Caterpillar, and
other manufacturers as well, to stand behind the
equipment they manufactured for many years.
While we have had problems with many manufacturers, I
will provide one example from our experience with
Caterpillar and can provide more examples if you feel
it would be helpful. Channel Construction purchased
two new Caterpillar excavators. Since they were new
the excavators would turn to the left when driven.
Numerous times we've had Caterpillar and their local
dealer try to fix these machines, but they could never
fix the problems. We paid N C Machinery, the local
Cat dealer, well over $10,000 to try to fix the
excavators but they still can't figure out the
problems to this day. We still own and use these
excavators every week even though they pull to the
left because we are a small company and can't afford
to replace these machines even though this issue
affects our operation. These are specialized pieces
of equipment that would cost us well over $1 million
to replace and we don't have that kind of money. We
do a lot of demolition and work on barges. Although
we have never had an accident due to this problem, it
is a potential safety issue and could cause problems
at some point.
It is my understanding that HB 209 would have helped
alleviate some of the costs associated with these work
orders and allowed us to get these machines replaced
under the lemon law feature ... of HB 209 when we
first purchased these machines. We are just a small,
family-owned construction company and don't have the
administrative staff to fight with big manufacturers
when things aren't going the way they should. This
bill will help small companies like ours have some
leverage in getting our equipment fixed when it
doesn't work as designed. I can give you other
examples where I feel manufacturers other than Cat
have not supported small companies like ours when it
comes to warranties and technical service bulletins.
4:37:54 PM
REPRESENTATIVE KNOPP asked whether the reason N C Machinery
couldn't fix the problem was because its maintenance support
staff was inadequate or because the manufacturer wasn't
providing what was needed. He further asked whether it was the
manufacturer or the dealer that was not fulfilling its
obligation.
CHRIS GERONDALE, Contract Employee, Channel Construction; part-
time worker, Kensington and Greens Creek mines and Construction
Machinery Industrial (CMI), responded that the manufacturer sold
a piece of equipment that is designed to drive forward in a
straight line when both pedals are pushed forward. However, he
explained, when both pedals are pushed forward, the machinery
turns to the left and this is a safety issue operating on a
barge. Why the machine does that is unknown, which is why
Channel Construction hired the experts to come out and fix it.
He noted that he has found at least five work orders from [N C
Machinery] coming out to fix this problem, but [N C] is not sure
what the problem is.
4:39:14 PM
REPRESENTATIVE WOOL asked why the gripe isn't with the dealer
given that the sales are not direct from the manufacturer. He
commented that obviously [N C Machinery and Caterpillar] have a
good relationship and that since Channel Construction bought two
machines, a big investment, it would seem that [N C Machinery]
would be on the hook for it.
MR. C. GERONDALE answered that N C Machinery is absolutely who
[Channel Construction] goes through to deal with these problems.
He offered his understanding that under Alaska's automobile,
boat, and ATV lemon law, replacement is typically handled
through the manufacturer, not the dealer.
REPRESENTATIVE WOOL asked whether it is a coincidence that Mr.
C. Gerondale has the same last name as ?
MR. C. GERONDALE replied it is not a coincidence because as he
stated earlier, he does work for CMI.
4:41:25 PM
NICK YAKSICH, Senior Vice President, Government and Industry
Affairs, Association of Equipment Manufacturers (AEM), testified
in opposition to HB 209. He noted that AEM is a North America
based international trade association representing over 950
companies in the off-highway machinery market. He stated that
AEM is opposed to HB 209, which [proposes to] alter the
treatment of heavy equipment warranties. He said AEM believes
it is an intrusion into the business relationship between the
manufacturer and the dealer. It is AEM's hope that these issues
are dealt with outside of the legal or legislative arena and
that between the customer, the dealer, and the manufacturer
these issues can be resolved. In regard to the contracts, he
stated that ultimately the manufacturer looks to protect its
brand and provide the best technology and best service to the
dealer and to the customer. He reiterated that AEM opposes this
bill and said it would have a significant impact on all
manufacturers.
4:43:00 PM
CHAIR KITO inquired whether AEM has dealt with other states that
have laws that provide some direction on warranty.
MR. YAKSICH replied AEM has not dealt with this issue recently
on the warranty. He said the contracts are expensed in terms of
buybacks, warranty, parts, and such, but in this case AEM has
not dealt with the warranty issues.
CHAIR KITO referenced his earlier comments about the unique
construction situation in Alaska where equipment is transported
to construction sites and not easily accessible to the road
system or dealers. Alaska has some transportation challenges
that other places don't, he noted, plus Alaska has a limited
construction season that makes it vitally important to be able
to have equipment functioning when it needs to be functioning.
He urged that manufacturers keep this in mind.
MR. YAKSICH offered his appreciation for the aforementioned. He
commented that the previously mentioned Tier 4 issue had to do
with an Environmental Protection Agency (EPA) mandate as part of
the Clean Air Act. He said manufacturers spent millions of
dollars in research and development to comply with that EPA
mandate, and it is an example of the kind of challenge that AEM
also faces working with the customer, dealer, and manufacturer
in complying with the law.
4:45:10 PM
CURTIS THAYER, President & CEO, Alaska Chamber of Commerce,
stated that the chamber supports the current version of HB 209.
He noted the chamber represents over 700 businesses,
manufacturers, and local chambers across the state. Alaska's
remoteness and high cost of shipping are some of the challenges
living here, he said, and looking out for the dealers in Alaska
needs to be done. This bill is modeled after other laws in
other states for warranties, he continued, and a bill is needed
that extends the same protection to heavy equipment. It will
keep Alaska's construction resource industry active and alive.
4:46:08 PM
REPRESENTATIVE JOSEPHSON asked whether the U.S. Chamber of
Commerce's position is the same on these sorts of bills as is
the state's chamber.
MR. THAYER replied that the Alaska Chamber of Commerce is
affiliated with the U.S. Chamber of Commerce through a
federation, but the state chamber is not a part of the U.S.
Chamber of Commerce.
4:46:32 PM
CHAIR KITO closed public testimony on HB 209 after ascertaining
that no one else wished to testify.
CHAIR KITO held over HB 209.
4:47:04 PM
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
4:47 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB083 Fiscal Note DOA-COM 3.18.17.pdf |
HL&C 4/14/2017 3:15:00 PM |
HB 83 |
| HB083 Fiscal Note DOA-DRB 4.7.17.pdf |
HL&C 4/14/2017 3:15:00 PM |
HB 83 |
| HB209 Sectional Analysis 4.13.17.pdf |
HL&C 4/14/2017 3:15:00 PM |
HB 209 |
| HB209 Sponsor Statement 4.4.17.pdf |
HL&C 4/14/2017 3:15:00 PM |
HB 209 |
| HB209 Fiscal Note LAW-CIV 4.7.17.pdf |
HL&C 4/14/2017 3:15:00 PM |
HB 209 |
| HB209 Supporting Documents - Letters of support 4.13.17.pdf |
HL&C 4/14/2017 3:15:00 PM |
HB 209 |
| HB209 Supporting Documents - Letters of Opposition 4.14.17.pdf |
HL&C 4/14/2017 3:15:00 PM |
HB 209 |