Legislature(2025 - 2026)BELTZ 105 (TSBldg)
02/10/2025 01:30 PM Senate LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| SB73 | |
| SB11 | |
| SB17 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 73 | TELECONFERENCED | |
| *+ | SB 11 | TELECONFERENCED | |
| *+ | SB 17 | TELECONFERENCED | |
SB 17-CRIME COUNTERFEIT/NONFUNCTIONING AIRBAG
2:41:31 PM
CHAIR BJORKMAN announced the consideration of SENATE BILL NO. 17
"An Act establishing the crime of airbag fraud."
2:41:36 PM
SENATOR MATT CLAMAN, District H, Alaska State Legislature,
Juneau, Alaska, as sponsor of SB 17 he delivered the following
sponsor statement:
[Original punctuation provided.]
Senate Bill 17 was brought by Honda Motor Company and
the automotive anti-counterfeiting council. In Alaska
today, there is no law to prohibit the installation or
reinstallation of airbags that do not meet federal
safety standards. While airbags are made to protect us
from serious injuries, counterfeit or nonfunctioning
airbags are known to improperly deploy or not deploy
at all, potentially resulting in serious injuries.
2:42:14 PM
REPRESENTATIVE CLAMAN continued:
By establishing airbag fraud as a crime, SB 17
prohibits dangerous actors from knowingly selling,
installing, or manufacturing these dangerous and
improper devices. The bill references both counterfeit
and nonfunctioning airbags. A counterfeit airbag is
defined as a replacement airbag displaying an
unauthorized mark that is similar to the mark of a
motor vehicle manufacturer. A nonfunctioning airbag is
an inoperable or damaged airbag, or an airbag that has
previously been deployed or that was removed from a
vehicle because it created an unreasonable safety
risk.
Similar legislation has passed in over 30 states. For
example, the Michigan penal code takes a more severe
approach to this crime and punishes airbag fraud as a
felony punishable by 4 years of imprisonment or a fine
of $10,000.00. In comparison, SB 17 defines airbag
fraud as a class a misdemeanor punishable by up to 1
year of imprisonment, a fine of up to $25,000 or both
and as a class c felony punishable by up to 5 years of
imprisonment, a fine of up to $50,000 or both if
serious injury or death is involved.
Passage of this legislation will support federal
efforts to stop the importation of counterfeit or
nonfunctioning airbags through the federal unfair
trade practices act. Passage of this law will allow
federal authorities to seize these products at
Alaska's border.
Senate Bill 17 is supported by the coalition against
insurance fraud, which believes in the protection of
consumers and the idea that consumers should be able
to trust their airbags.
The state has a responsibility to protect all Alaskans
from counterfeit and nonfunctioning airbags. This bill
acknowledges victims of airbag fraud and provides
consequences for those who knowingly install or
provide dangerous devices. This bill also provides a
protection for any party involved who might not be
aware of this fraud, such as owners and employees of
dealerships who unknowingly install or sell those
devices.
2:44:22 PM
CARLY DENNIS, Staff, Senator Matt Claman, Alaska State
Legislature, Juneau, Alaska, read the sectional analysis for SB
17 as follows:
[Original punctuation provided.]
Senate Bill 17
Sectional Analysis-Version A
Section 1
AS 28.35.248. Airbag fraud
Establishes and defines 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.
2:45:49 PM
SENATOR DUNBAR asked if SB 17 is different than last year's
bill.
2:46:01 PM
SENATOR CLAMAN answered that its identical to last year's bill.
SENATOR DUNBAR stated that there have been issues in several
industries, including automotive, where companies limit repairs
to happen only at the companies' shops. Since airbags fall under
federal safety rules he asked if manufacturers require their own
branded airbags and installers and if there are consumer
protections that allow independent shops or generic replacements
to help keep costs down.
2:47:12 PM
SENATOR CLAMAN responded he was not certain since that is market
question, like Ford selling an oil filter but a person can buy a
compatible one at an auto parts store with the same
specifications Ford claims its filter is better consumers but
most convenient and affordable. He stated that he's not sure how
that works with airbags, but SB 17 highlights the risk of
someone producing fake airbags that don't meet federal safety
standards. He said Mr. Orlan from Honda is on the line and could
possibly answer that question.
2:48:21 PM
SENATOR DUNBAR stated that the State of Alaska is using the
state's police power, ability, and criminal law to enforce
safety regulations. He asked if the state is sort of unwittingly
a monopoly power in the airbag market.
2:48:50 PM
CRAIG ORLAN, Director, American Honda Motor Company, Washington
D.C, answered questions and testified by invitation on SB 17. He
stated that the auto industry already shares tools and
diagnostics with independent parts makers and repair shops,
supporting aftermarket repairs. This model is often cited by
right-to-repair advocates. He said there's currently no generic
airbag market, not due to legal barriers, but because airbags
are costly, low-margin, high-liability products with low
replacement volume. SB 17 doesn't change the cost or legality.
Anyone can legally make airbags that meet federal safety
standards. He stated that SB 17 targets bad actors intentionally
selling fake airbags filled with debris like T-shirts, not real
safety equipment.
2:51:46 PM
CRAIG ORLAN stated that counterfeit, non-functional airbags are
a serious threat everywhere. This isn't an issue with the
legitimate auto supply chain, it's others installing fake
airbags after accidents. The fake airbags have included sawdust,
rags, and even explosive devices. He said there was a case in
L.A. where the airbags were so dangerous the airbags had to be
detonated by the bomb squad. A Wall Street Journal investigation
linked these counterfeits to injuries and deaths nationwide. He
said in Florida, a repair shop owner was charged for installing
over 350 fake airbags. He stated that most of these products
come from overseas, especially China. While federal agencies
like Customs and Border Patrol and the FBI are supportive,
they're limited in what the federal agencies can do since most
fakes don't violate federal laws. State laws fill the gap
allowing better enforcement, helping e-commerce platforms crack
down, and stopping dangerous products before the airbags reach
cars. He stated that SB 17 has support from automakers, repair
shops, law enforcement, insurers, and consumers. Similar laws
have passed in 38 states with bipartisan backing and no public
opposition.
2:54:52 PM
CHAIR BJORKMAN asked the reason why SB 17 excludes those who
work on vehicles solely for law enforcement purposes. He said SB
17 includes a clause that exempts people who didn't know the
airbag was counterfeit or defective and asked what stops someone
from claiming ignorance to avoid liability.
2:55:29 PM
SENATOR CLAMAN stated he will answer the second question. He
said the intent SB 17 is to avoid creating a duty to inspect for
fraudulent airbags. If someone unknowingly buys and drives a car
with a fake airbag, then later sells the airbag to a dealer who
also doesn't know, neither is criminally liable. It's about not
punishing those with no knowledge. He stated that criminal
liability requires knowledge though civil liability could still
apply, SB 17 doesn't address it.
2:56:59 PM
CRAIG ORLAN stated that the exemption for police vehicles was
added based on law enforcement feedback. Some modificationslike
removing airbags for barriers or performing PIT maneuversare
necessary for their operations. He said these vehicles don't
enter the consumer market, and the intent is to avoid
unintentionally affecting law enforcement while targeting
consumer safety.
2:58:25 PM
CHAIR BJORKMAN held SB 17 in committee.