Legislature(2005 - 2006)CAPITOL 17
03/29/2006 03:15 PM House LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| SB273 | |
| HB240 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 240 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 350 | TELECONFERENCED | |
| += | SB 273 | TELECONFERENCED | |
SB 273-MOTOR VEHICLE SALES CHAIR ANDERSON announced that the first order of business would be SENATE BILL NO. 273, "An Act relating to a motor vehicle dealer's selling or offering to sell motor vehicles as new or current models or as new or current model motor vehicles having manufacturer's warranties." 4:08:31 PM CLYDE (ED) SNIFFEN, JR., Assistant Attorney General, Commercial/Fair Business Section, Civil Division (Anchorage), Department of Law, explained that one of his responsibilities is enforcing the Consumer Protection Act, which includes auto dealers. He noted that during the last hearing, there was concern about repealing [AS 08.66.015(b)], and the effect this would have on consumer protection. He said that he encourages this concern and said, "We'd like to give consumers as much protection against potential misrepresentation and fraud as we can." He stated that the intent of SB 273 is to remove the "current model" language in order to allow dealers to sell new or used vehicles. He said that this would "clean up" the language and enable the department to enforce the statute. In regard to requiring used car dealers to pay for the shipping of the vehicle with a current manufacturer's warranty to an authorized service center for repairs, he said that this language would be more appropriate in AS 45.25.400, which contains the auto dealer act. 4:11:10 PM MR. SNIFFEN, drawing upon his experience, said that finding an authorized service center has not been an issue. He noted that in the larger cities, there are authorized repair facilities for many manufacturers. He opined that in more remote areas of the state, the used car dealer may not inform the consumer that although the vehicle has a warranty, they cannot have repairs done locally. He said that requiring used car dealers to disclose the warranty requirements up front may be one way to deal with this issue. 4:12:44 PM CHAIR ANDERSON asked if [the department] endorses the bill as it is currently written. MR. SNIFFEN said: We have been working with the industry over the last several years to try and find a fix for this particular problem. ... The way the bill sponsors have drafted this current bill ... solves our problem. Deleting the requirement that used car dealers offer [a] rebate to cover warranty services that can't be obtained within a reasonable place of ... business ... was ... a side-effect of this "current model" language that crept into the bill, when they tried to rope in ... current model vehicles as new vehicles. MR. SNIFFEN went on to say that he would be in favor of requiring used car dealers to disclose the details of the manufacturer's warranty. He said, "As written, we certainly endorse the bill." 4:14:27 PM REPRESENTATIVE GUTTENBERG opined that there have not been problems in the past because AS 08.66.015(b) is current law, and he asked for further explanation as to the reasons for removing this section. 4:15:40 PM MR. SNIFFEN replied that if the language was left in statute, AS 08.66.015(b)(1) would need to be removed, as this is contained in SB 273. He explained that this section requires a current sales and service agreement with the manufacturer. He said that all [sales and service agreements] require that the dealer provide repair facilities. In regard to the remaining language, he said that franchise agreements currently contain this language. He agreed that consumers may not make complaints because they may not be aware that this law exists. He said that the bill is intended to separate used car dealers from new car dealers, and leaving this in would require "wordsmithing." He reiterated that this language would be more appropriate in the Auto Dealer Act. REPRESENTATIVE LEDOUX said that the franchise agreements may change in the future. She opined that it would offer more consumer protection to leave the language in, even if this requires "wordsmithing." 4:19:53 PM RYAN MAKINSTER, Staff to Senator John Cowdery, Alaska State Legislature, on behalf of Senator Cowdery, sponsor, stated that leaving AS 08.66.015(b) in statute would require the used car dealer to honor a franchise agreement that is between the manufacturer and the car owner. 4:21:44 PM REPRESENTATIVE GUTTENBERG asked if used car dealers can have an agreement with the manufacturer. MR. MAKINSTER replied that the aforementioned statute does not require the dealership to have a current sales and service agreement, but allows the dealer to sell a current model used vehicle. He said that, for example, if the manufacturer did not reimburse for services, this section of statute would make the used car dealer responsible for the repairs. REPRESENTATIVE GUTTENBERG said that he understands and asked who would be responsible for repairs to a vehicle that is under warranty but is not near a dealership. MR. MAKINSTER replied that in addition to dealers, manufacturers will sometimes go to private auto shops to cover repairs. He noted that not all communities have an approved dealer or auto shop. He stated that this issue occurs everywhere, and said that it is something that needs to be taken into consideration when purchasing a car. He added that if a consumer is informed that the community has a dealer available for repairs and it does not, this would fall under the unfair trade practices. REPRESENTATIVE LEDOUX said that it is not unreasonable to expect the dealer to sell a car that is "in working order." MR. MAKINSTER reiterated that the manufacturer's warranty is a contract with the dealer. 4:27:13 PM CHAIR ANDERSON informed the committee that the bill would be held until the next meeting to allow time for these concerns to be addressed. REPRESENTATIVE GUTTENBERG expressed support for the bill. He stated that he is concerned with consumer protection. He said "We don't want to put the onus on the used dealer, but we want to figure out the wordsmithing." MR. MAKINSTER concurred. CHAIR ANDERSON recommended that Mr. Makinster speak with the Alaska Auto Dealers Association to facilitate the answers to the committee's questions. [SB 273 was held over.] 4:29:04 PM
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