Legislature(2007 - 2008)BUTROVICH 205
02/12/2008 01:00 PM Senate TRANSPORTATION
| Audio | Topic |
|---|---|
| Start | |
| SB164 | |
| SB249 | |
| SB164 | |
| SB249 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| * | SB 164 | ||
| * | SB 249 | ||
SB 164-USED MOTOR VEHICLE SALES
CHAIR KOOKESH announced consideration of SB 164.
1:08:29M
TREVOR FULTON, staff to Senator McGuire, sponsor of SB 164, said
SB 164 rights a wrong in Alaska statutes removing language in
subsection (c) that governs used motor vehicle sales. He said
the language was obsolete and no longer of any benefit to
dealers, consumers or the state, because it required a notice on
all used vehicles for sale that it is not subject to Alaska's
lemon laws, is not covered under a manufacturer's warranty, and
is not manufactured for sale in Canada or another foreign
country.
All three of these conditions are unnecessary or redundant
because Alaska's lemon laws apply only to new vehicles, the
Federal Trade Commission already requires dealers to disclose
that the vehicle is not covered under a manufacturer's warranty
and AS 45.25.470 already mandates that dealers disclose in
writing whether a motor vehicle was originally manufactured for
sale in Canada or another country.
1:11:58 PM
SENATOR COWDERY asked if the warranty follows the vehicle or the
owner.
MR. FULTON replied that this bill doesn't specifically address
that but someone from the Alaska Automobile Owner's Association
could probably address that.
SENATOR COWDERY asked why it is necessary to have the bill
retroactive.
MR. FULTON replied that class-action lawsuits are being brought
against car dealerships in the State of Alaska for unfair trade
practices because for a couple of years they weren't stickering
their used vehicles; making it retroactive would address those
lawsuits.
CHAIR KOOKESH asked Mr. Sniffen to address the retroactivity
clause and how it relates to the present lawsuits.
ED SNIFFEN, Assistant Attorney General, Department of Law, said
the retroactivity provision was requested by the auto dealers.
He said there is some question whether the bill could be
retroactively applied to halt pending litigation. He didn't know
what the result of that will be, but this bill would not
interfere with those lawsuits if it was determined that the
retroactive provision couldn't stop the litigation.
Fundamentally, the reason the dealers are asking for
retroactivity is because when this law was passed in 2004, it
tried to address a problem with "current model used vehicles."
This is a used vehicle, but one that is still was within the
current model year of vehicles being produced and offered for
sale by a manufacturer. He offered an example where a Fort
Richardson soldier buys a new Chevy 1500 pickup truck and gets
deployed to Iraq three months later and tries to bring the
vehicle back to the dealer for sale or trade. That vehicle would
be considered a current model vehicle because it is still within
the current model year even though it already had one owner. Not
only were some dealers selling them with very low mileage,
others were buying them in Canada to take advantage of the
exchange rate and selling them in Alaska with sometimes less
than 20 miles. So they had the appearance of a new vehicle.
To address that, additional disclosure were required so
consumers would understand clearly these very low mileage
vehicles were not new and they wouldn't have some of the
protections they would have if they were. When the law passed,
for some reason, the disclosure requirement was extended to all
used vehicles not just the current model low-mileage ones. That
wasn't the intent and dealers did not sticker all used vehicles.
The retroactivity language was requested to make it clear it was
never the intent that these disclosures be posted on all used
cars, but rather just on current model used vehicles.
1:17:02 PM
CHAIR KOOKESH said he wanted to make sure that was on the record
because the committee does not want to interfere with current
lawsuits.
SENATOR OLSON questioned what will happen to the plaintiffs with
class action lawsuits.
MR. SNIFFEN replied it's hard to say. He said some dealers might
see what kind of mileage they can get out of the retroactive
provision. The law is very gray in this area regarding whether
the lawsuits will be dropped or limited to current model
vehicles. This will need to be an argument between plaintiffs'
lawyers and the defendant dealers.
SENATOR OLSON asked if something could be added to this bill to
avoid more litigation.
MR. SNIFFEN replied that current language will discourage
lawsuits and he didn't know what else could be done. It is clear
that legislators intend the law to apply retroactively to the
extent that it can be, to protect dealers who in good faith were
trying to comply with the law at the time.
1:18:58 PM
SENATOR OLSON asked what kind of consumer protection buyers will
have under this bill, since grievous action by used car dealers
is commonly known.
MR. SNIFFEN answered that currently a host of consumer
protections under the Automobile Dealers Act in AS.45.25
includes disclosures to consumers regarding vehicles
manufactured in another country so they can decide if the
warranty will follow the vehicle. Alaska also requires used car
dealers to obtain information about a vehicle's prior accident
or repair history for prospective purchasers.
In 2002 he along with legislators and industry came up with some
good consumer protection legislation against offensive used car
practices. The Federal Trade Commission (FTC) also requires
disclosures already on used vehicles concerning warranty
limitations and other rights a consumer may have. He said he
thinks sufficient protections are in place that don't overburden
dealers, but still provide good protection for Alaskan
consumers.
1:20:59 PM
MR. FULTON said the bill packet includes an "as is sticker" that
explicitly states what is or is not covered under warranty.
Alaska Statute 45.25.470 on sales of vehicles manufactured in a
foreign country says that before a sale, a motor vehicle dealer
shall disclose in writing whether a motor vehicle was originally
manufactured for sale in Canada or another foreign country.
SENATOR COWDERY asked how the dealer can comply with the
retroactive provision if he has already sold the vehicle.
1:22:37 PM
MR. SNIFFEN responded that if the vehicle has been sold without
the disclosure, the violation has already occurred or hasn't
occurred if this bill includes the retroactive provision, and
there's nothing the dealer can do. Potentially some of the
vehicle sales could be identified if the purchasers could be
located.
SENATOR COWDERY asked if owners can't be located means no other
options are available.
MR. SNIFFEN replied that is correct. He said that is a problem
with the large transient population in Alaska especially with
military bases.
1:24:02 PM
JON COOK, Legislative Director, Alaska Auto Dealers Association
(AADA), Anchorage, AK, said he supported SB 164. He said his
association has been working with Mr. Sniffen trying to deal
with the unintended consequences of the earlier legislation and
the only party to benefit from this provision is class-action
attorneys. Most dealerships in Alaska are small family-owned
operations and litigation could put them out of business. The
lemon law, the manufacturer's warranty, and where a vehicle was
manufactured are already covered under existing statute or don't
apply. He said the two sides, industry and the department, have
come together in agreement to create balanced legislation.
1:27:15 PM
HEIDI ANDERSON, owner of Quality Auto Sales, supported SB 164.
She confirmed that the sticker is redundant and was originally
designed for Canadian cars brought into the market. The language
of AS 45.25.465, subsection (c) repeats what is addressed
elsewhere or does not even deal with the used car market. She
said the deleted language doesn't benefit anyone and is only
being used to generate lawsuits against dealers.
1:29:19 PM
SENATOR OLSON asked if anyone opposes this bill.
MR. FULTON replied there has been no opposition.
CHAIR KOOKESH set SB 164 aside until Senator Wielechowski and
Senator Wilken could join the committee.
SB 164-USED MOTOR VEHICLE SALES
1:54:33 PM
CHAIR KOOKESH reconvened the meeting and announced the committee
would again take up SB 164. Public testimony had been taken and
there was no opposition. He thanked Senator Wielechowski and
Senator Wilken for leaving another meeting to join the
committee.
1:55:35 PM
SENATOR OLSON moved to report SB 164 from committee with
individual recommendations and attached fiscal note(s). There
being no objection, the motion carried.
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