02/26/2024 01:30 PM Senate LABOR & COMMERCE

           SB 144-RATES: MOTOR VEHICLE WARRANTY WORK                                                                        
                                                                                                                                
1:34:09 PM                                                                                                                    
CHAIR  BJORKMAN announced  the consideration  of SENATE  BILL NO.                                                               
144,  "An Act  relating to  rates and  time allowances  for motor                                                               
vehicle warranty work."                                                                                                         
                                                                                                                                
1:34:42 PM                                                                                                                    
SENATOR  MATT  CLAMAN,  District  H,  Alaska  State  Legislature,                                                               
Juneau, Alaska,  sponsor of SB 144,  gave an overview of  SB 144.                                                               
He stated that  SB 144 would allow auto dealers  to bill the same                                                               
time allowance for  warranty service as is  used for non-warranty                                                               
service.   This  would   help  auto   dealers  combat   workplace                                                               
challenges  when  recruiting  -  and  retaining  -  employees  to                                                               
perform this  essential work. He noted  that SB 144 is  an effort                                                               
to  equalize  the  marketplace  and  keep  mechanics  working  in                                                               
Alaska.                                                                                                                         
                                                                                                                                
1:36:14 PM                                                                                                                    
CHAIR BJORKMAN opened public testimony on SB 144.                                                                               
                                                                                                                                
1:37:16 PM                                                                                                                    
JEFF PERRY,  Director of Public Policy,  General Motors, Detroit,                                                               
Michigan,  testified in  opposition  to SB  144.  He stated  that                                                               
prior  to the  hearing, they  were  asked to  randomly sample  25                                                               
labor  operations  to  compare  Original  Equipment  Manufacturer                                                               
(OEM)  times  to  after-market  times.  They  evaluated  warranty                                                               
repair orders  submitted by dealers  and found that in  more than                                                               
50 percent  of the cases,  the mechanics recorded  completing the                                                               
work in the OEM published time.  He added that over 50 percent of                                                               
the cases were completed within  after-market times. He suggested                                                               
that SB 144 is not about  needing more time to complete the work;                                                               
rather, it  is about wanting more  for the sake of  getting more.                                                               
He  stated that  when technicians  are not  able to  complete the                                                               
work within  the time allotted, OEM  alone has a process  for the                                                               
dealer to submit a request for additional time.                                                                                 
                                                                                                                                
MR.  PERRY said  that in  2023  General Motors  (GM) approved  97                                                               
percent  of  additional time  requests  from  Alaska dealers.  He                                                               
stated that  GM makes  a great effort  to accurately  measure the                                                               
time needed  for each  labor operation  and contrasted  this with                                                               
after market time guides. He  commented that an after-market time                                                               
guide is a product, and the  customer is the dealer or the repair                                                               
shop. He  explained that these after-market  guides compete based                                                               
on  who publishes  the highest  prices.  It is  not uncommon  for                                                               
repair shops to  have multiple after-market time  guides in order                                                               
to  "cherry-pick" the  highest time  for a  repair when  charging                                                               
their customers - even though  these guides come with disclaimers                                                               
stating that they  are estimates only - and are  not intended for                                                               
use when billing. He pointed out  that the Alaska Auto Repair Act                                                               
requires  repair  shops to  provide  detailed  receipts to  avoid                                                               
misrepresentation  of  the  work  performed.  He  suggested  that                                                               
charging for  two hours of  work when only  one hour of  work was                                                               
done  is a  misrepresentation  -  and opined  that  the state  of                                                               
Alaska should not be endorsing this practice.                                                                                   
                                                                                                                                
1:40:19 PM                                                                                                                    
CHAIR BJORKMAN closed public testimony on SB 144.                                                                               
                                                                                                                                
1:40:34 PM                                                                                                                    
CHAIR BJORKMAN solicited a motion.                                                                                              
                                                                                                                                
1:40:36 PM                                                                                                                    
SENATOR BISHOP  moved to report  SB 144, work  order 33-LS0736\A,                                                               
from  committee  with  individual  recommendations  and  attached                                                               
fiscal note(s).                                                                                                                 
                                                                                                                                
1:40:55 PM                                                                                                                    
CHAIR BJORKMAN  found no objection  and SB 144 was  reported from                                                               
the Senate Labor and Commerce Standing Committee.