Legislature(1997 - 1998)
03/09/1998 03:22 PM House L&C
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
SSHB 142 - BUSINESS PRACTICE REGULATIONS Number 1917 CHAIRMAN ROKEBERG indicated the committee's next order of business was SSHB 142, "An Act relating to the sale or transfer of new or used motor vehicles; relating to the confidentiality of certain information related to attorney general investigations of unlawful trade practices and antitrust activities; establishing additional unlawful trade practices; relating to the exemptions from telephonic solicitation regulation; regulating the sale of business opportunities; amending Rules 4 and 73, Alaska Rules of Civil Procedure; and providing for an effective date." Number 1918 REPRESENTATIVE COWDERY moved Version H of SSHB 142, labeled 0- LS0418\H, Bannister, dated 3/9/98, for discussion purposes. There being no objections, it was so ordered. Number 1944 CHAIRMAN ROKEBERG called a brief at ease at 3:58 p.m. The committee came back to order at 3:59 p.m. Number 1955 SHIRLEY ARMSTRONG, Legislative Assistant to Representative Norman Rokeberg, came forward to explain the proposed committee substitute. She stated Version H includes a number of changes discussed at the last hearing. The sponsor had recommended deleting "new" (relating to new motor vehicles) from the title. She said this was accomplished as other sections were deleted. A second change was suggested by Michael Stepp of the Alaska Auto Dealers Association allowing the buyer to waive the right to the emissions certification (I/M) inspection. This new language is on page 2, line 8, of the proposed CS, and reads: * Sec.2. AS 45.45.400 is amended by adding a new subsection to read: (c) The requirements of (a) of this section do not apply if, before entering into the contract, the person who is engaged in the business of selling used motor vehicles obtains from the prospective buyer, transferee, or assignee, or from the agent of the prospective buyer, transferee, or assignee, a signed written statement that the prospective buyer, transferee, or assignee, or the agent of the prospective buyer, transferee, or assignee, waives the requirements of (a) of this section. MS. ARMSTRONG indicated Daveed Schwartz, Assistant Attorney General, Commercial Section, Civil Division, Department of Law, said that this right cannot be waived under the consumer products statute if there is no statute to the contrary. She stated, "So for purposes of this section, for this purpose, you can waive it." Ms. Armstrong commented Sections 2, 3, 4, 5, and 6 of SSHB 142 have been deleted. She noted there were no problems associated with the information about mail-order and this was left intact in the new version [Section 7 on page 6, beginning on line 7, of SSHB 142 becomes Section 4, beginning on page 2, line 17, of Version H]. Ms. Armstrong said Chapter 66 had been reduced from 13 pages to 3 pages in the new version. She commented this was the smallest she could reduce it without eliminating it altogether, indicating it had been reduced to the items that would not make it an extra burden but still provide some information about business opportunity sellers coming from outside Alaska. She commented the registration and language about names and addresses of not only the seller but also the seller's agents has be retained, but there is no bonding requirement or similar requirements that were mentioned in the previous version. Number 2121 REPRESENTATIVE COWDERY asked if Version F was available yet to the automobile dealers in the Anchorage and Fairbanks areas. MS. ARMSTRONG indicated the committee had just received the bill and it was not yet available to those groups. CHAIRMAN ROKEBERG noted this version adopts the language Mr. Stepp brought to the committee. REPRESENTATIVE COWDERY noted he understood, but said he would feel more comfortable if the association had an opportunity to look at it. CHAIRMAN ROKEBERG stated he was not touching this bill again. MS. ARMSTRONG said this is the fourth hearing on this bill. REPRESENTATIVE RYAN suggested the committee hold it for a while more. CHAIRMAN ROKEBERG suggested the committee vote on the bill. Number 2160 REPRESENTATIVE HUDSON asked if the bill's title met the single subject requirement. MS. ARMSTRONG said it all falls under Title 45, the consumer products portion of the statutes. REPRESENTATIVE HUDSON confirmed that although the bill mixes used motor vehicles with telephonic solicitations and sales of business opportunities it still fit within the purviews of the statutes. He noted it seemed broad-based. Number 2192 MS. ARMSTRONG noted Section 45.66.050 of the proposed CS, on page 4, concerning the seller's records and files, had been retained from SSHB 142 but had been changed slightly [Section 45.66.170 of SSHB 142, page 15]. The original version required records to be kept for four years and this requires three, which is the same as for tax records. She commented Section 45.66.060, coordination with other laws, had also been in the original bill [Section 45.66.220 of SSHB 142, page 18]. Referring to Section 45.66.070 of the proposed CS, the exemptions, she noted Chairman Rokeberg had mentioned those individuals currently registered with the Division of Occupational Licensing for these kinds of activities should not have to register again. Ms. Armstrong stated Section 45.66.080, regulations, had been taken from the original bill [Section 45.66.230 of SSHB 142, page 18]. She said the definitions section had been reduced in the proposed CS and indicated that hopefully the definition of business opportunity is clearer. She commented that some of the definitions on page 5 of Version H had been taken from the previous version. Ms. Armstrong noted the bill had been reduced from 22 to 5 pages. Number 2251 REPRESENTATIVE JERRY SANDERS referred to sales of business opportunities, asking if he would have to go through all this if he had a small business and wanted to sell it. MS. ARMSTRONG replied he would not if he used a real estate agent and she also did not think so if he was selling it on his own, for sale by owner (FISBO). REPRESENTATIVE SANDERS asked who would be affected by this. REPRESENTATIVE RYAN said he would be affected by it if he wanted to franchise his business. Number 2274 CHAIRMAN ROKEBERG asked Ms. Armstrong for clarification. MS. ARMSTRONG replied she did not know, commenting that there was someone from the department who could answer that question. CHAIRMAN ROKEBERG indicated Ms. Armstrong was very knowledgeable about the bill. He said he didn't know if there was a FISBO exception in the bill except for real estate licensees. Number 2284 MS. ARMSTRONG said the only reason she mentioned it is that under "0888" the new exemptions would cover that. CHAIRMAN ROKEBERG noted that was just for real estate licenses and did not cover these, stating Representative Sanders' question is well-taken. Number 2295 REPRESENTATIVE HUDSON referred to page 4, lines 27 and 28, under definition of business opportunities, which to him seems to include the seller or person recommended by the seller, "... the seller or person recommended will provide to the buyer services, ...". CHAIRMAN ROKEBERG stated that's not clear. Number 2321 REPRESENTATIVE RYAN said he thinks this would apply to legitimate multi-level marketing companies which Amway Corporation set the standard for. He commented he didn't feel anything was broken here so nothing needed to be fixed. He thought it would provide a lot of employment for the consumer protection division of the attorney general's office but other than that he didn't know how they were furthering the public interest with passage of this bill. Number 2348 MS. ARMSTRONG referred to page 4, line 11, which speaks about coordination with other laws. She noted the previous bill used an entire page to list all the exemptions, and this version simply reads: (a) This chapter does not apply to a sale or offer to sell if regulation of the sale or offer is preempted by federal law. (b) Except as provided in (a) of this section, if this chapter conflicts with another provision of state law, the other provision of law governs to the extent of the conflict. Number 2371 CHAIRMAN ROKEBERG reminded the committee that he believes the attorney general's objective in this section is to try to obtain some control and regulation over what is called the "ballroom sales pitch." Chairman Rokeberg said, however, he thinks the attorney general took the absolutely wrong approach, writing 16 pages of licensing law which this committee hates. He noted he appreciated Ms. Armstrong's efforts to winnow this down but thinks it creates as many problems as it tries to fix. MS. ARMSTRONG commented that was her best effort to reduce 22 pages without deleting every section. Number 2423 REPRESENTATIVE RYAN referred to a 10,000 year old Persian saying found in the writings of Herodotus (ph), "A buyer needs a hundred eyes, a seller needs but one." Commenting on the role of personal responsibility he said it is impossible to protect everybody from everything, and he does not know that it is their job. Number 2445 DEB DAVIDSON, Legislative Administrative Assistant to Representative Gary Davis, came forward to testify as the sponsor's representative. She said she has had time to briefly review the proposed CS and appreciates the amount of hard work that went into it. She stated, "The question that came up regarding the type of businesses ... that might or not be covered, and the chairman was right in - in that the intent of that section is to cover those type ..." [TESTIMONY INTERRUPTED BY TAPE CHANGE] TAPE 98-28, SIDE B Number 0001 MS. DAVIDSON continued, "... just a slight suggestion is that in the original bill, there was a section of exemptions and although it may very well be covered ... in this phrasing that says federal law supersedes this and that if it's in conflict with another state statute the other state statute takes precedence, but what we could consider doing would be to just to put the section of exemptions back in to make it very clear, because those exemptions did cover the franchise." She noted it covered legitimate businesses such as Amway Corporation and Avon, and this might be a way to clarify that. She said the other changes still probably cover the sponsor's intent, noting he recognizes there are some difficult sections, and there are also a lot of sections in the bill he felt were important. Commenting that the bill has two more committees of referral and the sponsor's interest is in having the bill move forward, she said she believes he wouldn't have any major objections to what has been done. Referring to the deletion of the sections relating to confidentiality, Ms. Davidson said she didn't know if the sponsor had any strong feelings about that, noting it simply put current policy into statute. Number 0077 CHAIRMAN ROKEBERG indicated that the exemptions section in the original bill appear to be longer than bill version currently before the committee. REPRESENTATIVE RYAN commented it was similar to HB 33. Number 0097 MS. DAVIDSON said the exemptions section was actually about a page long, beginning on page 17 of the original bill and perhaps not all those exemptions are required. Number 0133 CHAIRMAN ROKEBERG moved a conceptual amendment to adopt the provisions of Section 45.66.210 of the original sponsor substitute ; lines 8-31 on page 17 and lines 1-11 on page 18 ["lines 1 through 11 on line 18" stated on tape] of SSHB 142; going to the exemption section on page 4 of the proposed CS. There being no objections, the amendment was so adopted. Number 0177 REPRESENTATIVE BRICE indicated he would make a motion to move the bill if the chairman was ready. Number 0183 REPRESENTATIVE COWDERY indicated he would like to support Representative Davis's bill but would prefer to have more time to study this version although he was not happy at the thought of another hearing. He commented he would like to at least put a "do not rec" on it. REPRESENTATIVE RYAN indicated he would like to hold the bill. Number 0215 CHAIRMAN ROKEBERG said he wanted to follow the will of the committee. Number 0219 REPRESENTATIVE RYAN referred Mr. Schwartz's comment that a person, in giving a waiver, could not sign away that right under whatever federal provision and said he would like to hear some testimony from those in the automobile industry. He referred to extensive testimony the previous summer from the automobile dealers who, he said, seemed willing to go along to make those provisions palatable with their business. He indicated it would only be fair to give this group a chance to comment if the committee was going to change the bill so dramatically. Number 0257 REPRESENTATIVE BRICE said he would rather see the bill move, continuing its journey through the process, if it was not the chair's intention to bring it back up. He asked whether the chair would consider one more hearing. Number 0286 REPRESENTATIVE HUDSON asked if the bill went to another committee. CHAIRMAN ROKEBERG replied it has two more House referrals. REPRESENTATIVE HUDSON commented he thought it would probably receive plenty of hearings in the next two committees, stating he did not think they could get much more out of this. Number 0297 REPRESENTATIVE BRICE made a motion to move the proposed CS for SSHB 142, as amended, with individual recommendations and zero fiscal note. REPRESENTATIVE COWDERY objected to the motion. A roll call vote was taken. Representatives Rokeberg, Hudson, and Brice voted in favor of the motion. Representatives Cowdery, Sanders and Ryan voted against. Representative Kubina was absent. Therefore, CSSSHB 142(L&C) failed to move out of the House Labor and Commerce Standing Committee with a vote of 3-3.
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