05/04/2004 01:55 PM Senate L&C

       CSHB 272(STA) AM -MOTOR VEHICLE DEALERS/SALES/ADS                                                                    
                                                                                                                                
CHAIR  CON  BUNDE  announced  CSHB  272(STA)  AM  to  be  up  for                                                               
consideration.                                                                                                                  
                                                                                                                                
SENATOR  RALPH  SEEKINS moved  to  adopt  the proposed  SCS  CSHB
(L&C),  version \S,  as the  working document.  There were  no                                                               
objections and it was so ordered.                                                                                               
                                                                                                                                
SENATOR SEEKINS noted that he is an automobile dealer.                                                                          
                                                                                                                                
CHAIR BUNDE said it was noted.                                                                                                  
                                                                                                                                
MS.  LINDA SYLVESTER,  staff to  Representative Bruce  Weyhrauch,                                                               
sponsor,  briefed  the committee  that  HB  272 addresses  a  few                                                               
technical changes to the automobile  omnibus bill that was passed                                                               
in 2002.                                                                                                                        
                                                                                                                                
SENATOR  GARY  STEVENS asked  what  problems  removing section  1                                                               
corrects.                                                                                                                       
                                                                                                                                
SENATOR SEEKINS  related that current law  prohibits someone from                                                               
selling  a  vehicle  as  a  new vehicle  if  he  doesn't  have  a                                                               
franchise to sell that vehicle.  Problems arise with the date and                                                               
duration  of  warranties,  who   it  applies  to  and  associated                                                               
problems with service  contracts. An attempt was  made to clarify                                                               
this  issue with  a  new vehicle  definition.  However, used  car                                                               
dealers who sell new cars  without having a franchise have caused                                                               
a hubbub about it. So,  the Alaska Automobile Dealers Association                                                               
(AADA) said it would forego trying  to redefine a new vehicle for                                                               
now  and  just  asks  the   Department  of  Law  to  monitor  and                                                               
investigate  consumer and  enforcement  problems associated  with                                                               
the  current  law and  report  back  to  the next  legislature  -                                                               
providing better documentation of the concerns.                                                                                 
                                                                                                                                
MR.  ED SNIFFEN,  Department  of  Law (DOL),  said  the issue  is                                                               
whether or not  Alaska wants to allow used car  dealers to import                                                               
current year,  low mileage vehicles  and sell them as  used cars,                                                               
but at  the same time  compete with franchised new  cars dealers.                                                               
Alaska has  a law that  prevents any  dealer from selling  a used                                                               
car as  a new car unless  it has the manufacturer's  statement of                                                               
origin (MSO)  on it. In  effect, this  means that a  dealer could                                                               
not sell a new 2004 car until the  2005 models come out. So, if a                                                               
service man buys  a 2004 Dodge Ram,  has it for a  few months and                                                               
then  gets deployed  to  Iraq and  needs  to sell  it,  he has  a                                                               
difficult time  selling it  to a dealer  because no  dealer could                                                               
sell that car  until the 2005 model year  was available. However,                                                               
he was confident that he could  work with the AADA to resolve the                                                               
issue.                                                                                                                          
                                                                                                                                
The other part  of the bill cleans up language  that didn't sound                                                               
right and  removes provisions that  don't apply in  Alaska. There                                                               
has been no opposition to those sections.                                                                                       
                                                                                                                                
MR.   STEVE  ALLWINE,   Secretary,   Alaska  Automobile   Dealers                                                               
Association, supported  the previous comments and  felt that more                                                               
data was needed before a resolution was adopted.                                                                                
                                                                                                                                
SENATOR  SEEKINS moved  to pass  SCS CSHB  272(L&C), version  \S,                                                               
from committee with  individual recommendations. Senators French,                                                               
Gary Stevens, Davis,  Seekins and Chair Bunde voted  yea; and SCS                                                               
CSHB 272(L&C) moved from committee.