04/30/2021 01:30 PM Senate LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| SB17 | |
| SB76 | |
| HB36 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 76 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | SB 17 | TELECONFERENCED | |
| + | HB 36 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
SENATE LABOR AND COMMERCE STANDING COMMITTEE
April 30, 2021
1:29 p.m.
MEMBERS PRESENT
Senator Mia Costello, Chair
Senator Peter Micciche
Senator Gary Stevens
Senator Elvi Gray-Jackson
MEMBERS ABSENT
Senator Joshua Revak, Vice Chair
COMMITTEE CALENDAR
SENATE BILL NO. 17
"An Act relating to the retrofitting of certain public
facilities and community facilities; relating to the performance
of energy audits on schools and community facilities; relating
to the duties of the Alaska Energy Authority and the Alaska
Housing Finance Corporation; creating a rapid economic recovery
office in the Alaska Industrial Development and Export
Authority; and relating to the state energy policy and energy
source reporting by state agencies."
- MOVED CSSB 17(CRA) OUT OF COMMITTEE
SENATE BILL NO. 76
"An Act relating to vehicles abandoned on private property."
- MOVED SB 76 OUT OF COMMITTEE
HOUSE BILL NO. 36
"An Act relating to an application for a license to operate as a
dealer in motor vehicles; and requiring a dealer in motor
vehicles to maintain liability and property insurance."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: SB 17
SHORT TITLE: ENERGY EFFICIENCY & POLICY: PUB. BLDGS
SPONSOR(s): SENATOR(s) BEGICH
01/22/21 (S) PREFILE RELEASED 1/8/21
01/22/21 (S) READ THE FIRST TIME - REFERRALS
01/22/21 (S) CRA, L&C, FIN
02/25/21 (S) CRA AT 3:30 PM BELTZ 105 (TSBldg)
02/25/21 (S) Heard & Held
02/25/21 (S) MINUTE(CRA)
03/30/21 (S) CRA AT 3:30 PM BELTZ 105 (TSBldg)
03/30/21 (S) Heard & Held
03/30/21 (S) MINUTE(CRA)
04/08/21 (S) CRA AT 3:30 PM BELTZ 105 (TSBldg)
04/08/21 (S) Moved CSSB 17(CRA) Out of Committee
04/08/21 (S) MINUTE(CRA)
04/09/21 (S) CRA RPT CS 1DP 2NR SAME TITLE
04/09/21 (S) NR: HUGHES, MYERS
04/09/21 (S) DP: GRAY-JACKSON
04/23/21 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
04/23/21 (S) Heard & Held
04/23/21 (S) MINUTE(L&C)
04/28/21 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
04/28/21 (S) -- MEETING CANCELED --
04/30/21 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
BILL: SB 76
SHORT TITLE: ABANDONED VEHICLES; PRIVATE PROPERTY
SPONSOR(s): SENATOR(s) KIEHL
02/10/21 (S) READ THE FIRST TIME - REFERRALS
02/10/21 (S) STA, L&C
03/09/21 (S) STA AT 3:30 PM BUTROVICH 205
03/09/21 (S) Heard & Held
03/09/21 (S) MINUTE(STA)
04/22/21 (S) STA AT 3:30 PM BUTROVICH 205
04/22/21 (S) Moved SB 76 Out of Committee
04/22/21 (S) MINUTE(STA)
04/23/21 (S) STA RPT 4DP
04/23/21 (S) DP: SHOWER, HOLLAND, KAWASAKI, COSTELLO
04/30/21 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
BILL: HB 36
SHORT TITLE: MOTOR VEHICLE DEALERS: APPLIC.; INSURANCE
SPONSOR(s): REPRESENTATIVE(s) CLAMAN
02/18/21 (H) PREFILE RELEASED 1/8/21
02/18/21 (H) READ THE FIRST TIME - REFERRALS
02/18/21 (H) L&C, FIN
03/03/21 (H) FIN REFERRAL REMOVED
03/03/21 (H) L&C AT 5:45 PM BARNES 124
03/03/21 (H) Heard & Held
03/03/21 (H) MINUTE(L&C)
03/12/21 (H) L&C AT 3:15 PM BARNES 124
03/12/21 (H) Moved HB 36 Out of Committee
03/12/21 (H) MINUTE(L&C)
03/15/21 (H) L&C RPT 6DP
03/15/21 (H) DP: SNYDER, NELSON, MCCARTY, SCHRAGE,
KAUFMAN, SPOHNHOLZ
03/25/21 (H) BEFORE HOUSE IN THIRD READING
03/25/21 (H) TRANSMITTED TO (S)
03/25/21 (H) VERSION: HB 36
03/26/21 (S) READ THE FIRST TIME - REFERRALS
03/26/21 (S) TRA, L&C
04/09/21 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
04/09/21 (S) -- MEETING CANCELED --
04/13/21 (S) TRA AT 1:30 PM BELTZ 105 (TSBldg)
04/13/21 (S) Heard & Held
04/13/21 (S) MINUTE(TRA)
04/15/21 (S) TRA AT 1:30 PM BELTZ 105 (TSBldg)
04/15/21 (S) Moved SCS HB 36(TRA) Out of Committee
04/15/21 (S) MINUTE(TRA)
04/16/21 (S) TRA RPT SCS 3NR 1AM SAME TITLE
04/16/21 (S) NR: MYERS, SHOWER, MICCICHE
04/16/21 (S) AM: KIEHL
04/28/21 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
04/28/21 (S) -- MEETING CANCELED --
04/30/21 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
WITNESS REGISTER
SENATOR TOM BEGICH
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Sponsor of SB 17.
CHRISTOPHER HODGIN, Energy Program Manager
Statewide Public Facilities
Division of Facility Services
Department of Transportation & Public Facilities
Anchorage, Alaska
POSITION STATEMENT: Stated that the administration supports the
concepts in SB 17.
SENATOR JESSE KIEHL
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Sponsor of SB 76.
CATHY SCHLINGHEYDE, Staff
Senator Jesse Kiehl
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented the sectional analysis for SB 76.
ALEC MESDAG, Vice President and Director
Alaska Electric Light & Power Company
Juneau, Alaska
POSITION STATEMENT: Testified in support of SB 76.
KENNETH DARLING, Chief Credit Officer
Matanuska Valley Federal Credit Union
Palmer, Alaska
POSITION STATEMENT: Testified in support of SB 76.
DIL UHLIN, Maintenance Director
Kenai Peninsula Borough
Kenai, Alaska
POSITION STATEMENT: Testified in support of SB 76.
REPRESENTATIVE MATT CLAMAN
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Sponsor of HB 36.
SOPHIE JONAS, Staff
Representative Matt Claman
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented the sectional analysis for HB 36.
MARCUS WAEHLER, Board Member
Alaska Automotive Dealers Association; Owner
Red White & Blue Auto Sales
Anchorage, Alaska
POSITION STATEMENT: Testified on HB 36 by invitation.
STEVE ALLWINE, President and General Manager
Mendenhall Auto Center; Director
National Automotive Dealers Association; Board Member
Alaska Automotive Dealers Association
Juneau, Alaska
POSITION STATEMENT: Testified on HB 36 by invitation.
LORI WING-HEIER, Director
Division of Insurance
Department of Commerce, Community and Economic Development
Anchorage, Alaska
POSITION STATEMENT: Answered questions related to HB 36.
JEFFREY SCHMITZ, Director
Division of Motor (DMV)
Department of Administration (DOA)
Anchorage, Alaska
POSITION STATEMENT: Stated that the division does not have a
position on HB 36.
ACTION NARRATIVE
1:29:40 PM
CHAIR MIA COSTELLO called the Senate Labor and Commerce Standing
Committee meeting to order at 1:29 p.m. Present at the call to
order were Senators Gray-Jackson, Stevens, and Chair Costello.
Senator Micciche arrived thereafter.
SB 17-ENERGY EFFICIENCY & POLICY: PUB. BLDGS
1:30:12 PM
CHAIR COSTELLO announced the consideration of SENATE BILL NO. 17
"An Act relating to the retrofitting of certain public
facilities and community facilities; relating to the performance
of energy audits on schools and community facilities; relating
to the duties of the Alaska Energy Authority and the Alaska
Housing Finance Corporation; creating a rapid economic recovery
office in the Alaska Industrial Development and Export
Authority; and relating to the state energy policy and energy
source reporting by state agencies."
[CSSB 17(CRA) was before the committee.]
1:31:31 PM
SENATOR TOM BEGICH, Alaska State Legislature, Juneau, Alaska,
sponsor of SB 17 recapped that the bill has two primary
components. It expands an existing state program for
retrofitting public buildings 10,000 square feet and larger to
include 5,000 square feet and larger public school buildings and
community facilities that may be subject to power cost
equalization (PCE)). Second, the bill revises policies and
establishes goals to obtain 50 percent of the state's energy
needs from renewable energy by 2025. He noted that the committee
considered a Governor's bill that creates an energy independence
investment fund and expressed hope that elements of SB 17 would
be added to that bill. He advised that an expert was available
online to talk about the $40 million the existing program had
saved the state in the last decade.
CHAIR COSTELLO asked members if they had questions for
Christopher Hodgin from the Department of Transportation and
Public Facilities (DOTPF), which is the department that will
help facility owners pay for the audits. She asked the sponsor
if he was aware of any opposition to the legislation.
SENATOR BEGICH answered that he was not aware of any opposition.
CHAIR COSTELLO asked Mr. Hodgin whether the administration
supported or had comments on SB 17.
1:34:37 PM
CHRISTOPHER HODGIN, Energy Program Manager, Statewide Public
Facilities, Division of Facility Services, Department of
Transportation & Public Facilities, Anchorage, Alaska, offered
his understanding that the administration supported the concepts
in SB 17.
1:35:00 PM
At ease
1:35:41 PM
CHAIR COSTELLO reconvened the meeting and solicited the will of
the committee.
1:35:46 PM
SENATOR GRAY-JACKSON moved to report the committee substitute
(CS) for SB 17, work order 32-LS0187\B, from committee with
individual recommendations and attached fiscal note(s).
CHAIR COSTELLO found no objection and CSSB 17(CRA) was reported
from the Senate Labor and Commerce Standing Committee.
1:36:10 PM
At ease
SB 76-ABANDONED VEHICLES; PRIVATE PROPERTY
1:43:14 PM
CHAIR COSTELLO reconvened the meeting and announced the
consideration of SENATE BILL NO. 76 "An Act relating to vehicles
abandoned on private property."
1:43:56 PM
SENATOR KIEHL, Alaska State Legislature, Juneau, Alaska, sponsor
of SB 76, stated that this legislation shortens the time that
private property owners have to wait before they are able to
begin to deal with a vehicle abandoned on their property. "In
essence, someone disposing of a car they can't sell on land they
don't own." Today the private property owner must wait six
months before they are able to initiate the prescriptive process
to get title in order to pay for the disposal of the vehicle. SB
76 shortens the initial six months wait-time to one month, but
it does not deprive the last registered owner of their legal
notice that includes certified return mail receipt. He
acknowledged that this is not a cure-all because the private
property owner still must follow the process to dispose of the
vehicle. SB 76 simply provides the opportunity for the private
property owner to deal with an abandoned vehicle on their
property without waiting six months to begin the process.
1:46:18 PM
CHAIR COSTELLO informed the members that she heard the bill in
the previous committee of referral and had no questions.
1:46:37 PM
SENATOR STEVENS asked if there was a process for the registered
owner to sell their vehicle and go to the Division of Motor
Vehicles (DMV) to transfer the title. He acknowledged that this
did not affect the bill.
SENATOR KIEHL said yes; if he were to sell his vehicle, he could
sign and return the slip at the bottom of the title to notify
DMV that he was no longer the owner of the vehicle.
SENATOR STEVENS asked if the slip at the bottom of the title has
the address of the new owner.
SENATOR KIEHL replied there is no requirement for the seller to
file the name of the new owner with DMV.
1:47:32 PM
SENATOR GRAY-JACKSON offered her understanding that the property
owner has to wait six months before they are able to deal with
the abandoned vehicle.
SENATOR KIEHL clarified that the property owner must wait six
months before they can begin the legal process that ends with
being able to deal with the vehicle.
SENATOR GRAY-JACKSON recounted that the bill shortens the six
months to 30 days.
SENATOR KIEHL nodded.
1:48:15 PM
SENATOR MICCICHE asked if the bill applies only to private
property or if it also shortens the initial six months to 30
days for vehicles abandoned on municipal and state land.
SENATOR KIEHL replied state and local governments generally do
not use this process because they have additional authorities to
deal with vehicles abandoned in their rights-of-way.
SENATOR MICCICHE noted that not all state and municipal property
is designated right-of-way. He asked if there was a different
process for municipalities.
SENATOR KIEHL answered yes; sections of the statutes relate to
municipal rights and the state has significant rights to deal
with abandoned vehicles on state land. He restated that SB 76
only applies to vehicles abandoned on private property.
CHAIR COSTELLO requested the sectional analysis.
1:49:46 PM
CATHY SCHLINGHEYDE, Staff, Senator Jesse Kiehl, Alaska State
Legislature, Juneau, Alaska, presented the sectional analysis
for SB 76 that read as follows:
Section 1: A property owner with a vehicle abandoned
on his or her land can currently start the process to
claim title to the vehicle after six months. This
section reduces the period to 30 days.
Section 2: The change above only applies to vehicles
abandoned after the effective date of the bill.
1:50:28 PM
ALEC MESDAG, Vice President & Director, Alaska Electric Light &
Power Company, Juneau, Alaska, related that AEL&P and its land
holding company own a large amount of land around Juneau and
they have had to deal with a significant number of vehicles
abandoned on their property in recent years. The option under
current law is to leave the vehicles alone for six months or tow
them to a secure yard and hold them for six months before
starting the retitle process. Eventually the company tows the
vehicles for disposal. He said SB 76 provides relief by reducing
the holding time for these derelict and abandoned vehicles that
often are an environmental hazard. They leak fluids and often
contain used needles and other biohazards. He described the six
month holding period as too long and said SB 76 provides a
meaningful improvement. He thanked the sponsor and the committee
for its support for SB 76.
SENATOR STEVENS commented that the bill makes sense. He asked
how AEL&P disposes of the vehicles and if it is at the company's
expense.
MR. MESDAG confirmed that AEL&P pays for the disposal. He said
recyclers dispose of standard automobiles but not campers with
holding tanks. He recounted that he hauled one camper to the
dump and paid about $1,400 for disposal only to see it alongside
somebody's house several months later. He reiterated that
shortening the initial six-month wait to 30 days would be very
helpful.
1:54:09 PM
KENNETH DARLING, Chief Credit Officer, Matanuska Valley Federal
Credit Union, Palmer, Alaska, stated support for SB 76 and
offered his view that the environmental and biohazard discussion
was enlightening. These derelict vehicles present more than just
an eyesore. He advised that the credit union disposes of
abandoned vehicles through an auction because they have salvage
value. However, the value of the vehicle depreciates as it sits
for six months so it would be helpful to shorten the initial
wait time. It will help the environmental biohazard and help the
depreciating asset have more value when it goes to auction.
SENATOR STEVENS asked if the credit union is responsible for the
vehicle if the vehicle owner cannot be located.
MR. DARLING answered that is correct. As the lienholder, the
credit union is a partial owner of the vehicle.
1:56:06 PM
CHAIR COSTELLO opened public testimony on SB 76.
1:56:16 PM
DIL UHLIN, Maintenance Director, Kenai Peninsula Borough, Kenai,
Alaska, said reducing the time from six months to 30 days will
mirror the municipality's notification timeline. He said rights
of way are a little different but a vehicle in a school district
parking lot for example, would sit for 30 days before it is
presumed abandoned. The municipality would then move forward to
notification and eventual disposal. He agreed with previous
testimony that many of the vehicles left for six months become a
public safety and environmental biohazard problems.
He advised that the Kenai Peninsula Borough deals with abandoned
vehicles weekly and he has experienced instances where the
vehicle jeopardized public safety and others presented an
environmental biohazard. The cost of disposal for these types of
vehicles increases as they sit and deteriorate. He reported that
the cost to decontaminate and dispose of one vehicle and clean
up the surrounding property was over $30,000. He reiterated
support for SB 76.
SENATOR GRAY-JACKSON thanked him for the testimony.
CHAIR COSTELLO asked if the borough had contemplated holding the
owner of the abandoned vehicle liable for cleanup costs and
disposal.
MR. UHLIN replied that the borough has established procedures to
hold the last known owner liable but they generally do not
recover the costs. However, he can say that the 30-day timeline
is reasonable. The borough's experience is that anyone who
intends to move their vehicle will do so in the first week after
notification. He imagined that in the private sector a civil
suit would be the way to recover costs.
2:00:31 PM
CHAIR COSTELLO closed public testimony on SB 76.
2:00:37 PM
At ease
2:01:17 PM
CHAIR COSTELLO reconvened the meeting.
2:01:23 PM
SENATOR STEVENS asked the sponsor if the bill would apply to
borough property.
SENATOR KIEHL answered no. SB 76 more closely aligns the laws
for vehicles abandoned on private property to the laws for
vehicles abandoned on public property. He noted the letter of
support from the Alaska Municipal League and highlighted that
giving private property owners additional tools to deal with
these vehicles more quickly will benefit the entire community
from a public safety standpoint.
SENATOR MICCICHE related his experience with abandoned vehicles
when he was mayor of a small town to explain the municipalities'
interest in the bill. He thanked the sponsor.
2:03:25 PM
SENATOR MICCICHE moved to report SB 76, work order 32-LS0005\A,
from committee with individual recommendations and attached zero
fiscal note(s).
CHAIR COSTELLO found no objection so SB 76 was reported from the
Senate Labor and Commerce Standing Committee.
2:03:48 PM
At ease
HB 36-MOTOR VEHICLE DEALERS: APPLIC.; INSURANCE
2:06:06 PM
CHAIR COSTELLO reconvened the meeting and announced the
consideration of HOUSE BILL NO. 36 "An Act relating to an
application for a license to operate as a dealer in motor
vehicles; and requiring a dealer in motor vehicles to maintain
liability and property insurance."
[SCS HB 36(TRA) was before the committee.]
2:06:19 PM
REPRESENTATIVE MATT CLAMAN, Alaska State Legislature, Juneau,
Alaska, sponsor of HB 36, introduced HB 36 speaking to the
sponsor statement that read as follows:
House Bill 36 strengthens Alaska's motor vehicle
dealer license requirements by modernizing the statute
and incorporating reasonable standards for obtaining a
motor vehicle dealer's license without creating
barriers to entry into the field or restricting
competition.
2:06:41 PM
REPRESENTATIVE CLAMAN continued:
Alaska's current requirements for obtaining a motor
vehicle dealer's license are some of the least
stringent in the nation. Under current law, a motor
vehicle dealer in Alaska must register biennially by
filling out an application, pay a $50 registration
fee, and maintain a surety bond of $50,000. By way of
comparison, the requirements for a motor vehicle
dealer's license in other states are more stringent:
• Oregon Chapter 822 of Oregon State Statutes
provides for civil penalties for acting as a
vehicle dealer without a certificate, the
processes of applying for and maintaining an
automobile dealer license and related exemptions,
requirements and privileges, grounds for
revocation, suspension, or cancellation of the
dealership certificate, and further defines
illegal practices and associated penalties.
• Delaware Title 21, Chapter 63 of the Delaware
State Statutes provides for proof-of location
requirements and recordkeeping, license
expiration and renewal procedures, retainment of
bill of sale records for a period of at least
five years, and grounds for revocation of dealer
licenses.
• Texas Title 14, Subtitle A, Chapter 2301 of the
Occupations Code provides for public interest
information and complaint procedures, licensing
requirements, license expiration and renewal,
dealer operations, grounds for license revocation
as well as procedures for complaint hearings,
judicial review, and penalties.
Purchasing a car may be one of the largest investments
a consumer makes in their lifetime, so we need to
ensure that reasonable standards for becoming a dealer
are in place as well as financial protections should
the sale not work out.
House Bill 36 updates the surety bond requirement
which hasn't been changed in 20 years to $100,000 to
stay in line with the current economics of the
automobile industry. Furthermore, it requires that
dealers obtain liability insurance. There is currently
no requirement that dealers carry liability insurance
even though Alaska requires drivers to have liability
insurance for their vehiclesand dealers may allow
uninsured drivers to take cars for test drives. It
also limits ownership of persons who have been
convicted of felonies for fraud or embezzlement within
five years of the application date. Finally, it
requires dealers with employees to confirm that they
are aware of associated workers comp coverage
requirements.
2:09:01 PM
REPRESENTATIVE CLAMAN noted that his office also had questions
about the cost of the proposed changes for dealers. Currently, a
$50,000 performance bond costs from $500 to $1,000. A $100,000
auto dealer's bond costs from $1,000 to $2,500 for a year's
coverage. The estimated cost of insurance for a small dealer's
policy is approximately $2,500. This is comparable to the cost
for a new business owner to purchase general premises liability
for a restaurant, print shop, or retail store.
REPRESENTATIVE CLAMAN summarized that the purpose of HB 36 is to
establish reasonable standards for car dealer licensing and to
reduce the potential for harm through increased bond amounts,
mandatory insurance, and additional disclosures that hold auto
dealers more accountable under current statutes.
2:10:00 PM
SOPHIE JONAS, Staff, Representative Matt Claman, Alaska State
Legislature, Juneau, Alaska, presented the sectional analysis
for HB 36:
Section 1
AS 08.66.030. Form of application. Adds the following
requirements to dealer registration applications:
• a valid telephone number for the business;
• a statement that no person holding a five percent
or greater interest in the business has been
convicted of a felony involving fraud,
embezzlement, or misappropriation of property
within five years preceding the date of
application;
• a statement acknowledging that the applicant has
reviewed the requirements for workers'
compensation insurance and will maintain workers'
compensation insurance under AS 23.30, if
applicable; and
• a copy of the liability insurance policy in
compliance with section 3 of this bill.
Section 2
AS 08.66.060. Bond. Raises the amount of the bond
required for dealer registration applicants from
$50,000 to $100,000.
Section 3
AS 08.66.085. Insurance requirements. Adds a new
section to AS 08.66 that requires dealers to maintain
liability insurance for bodily injury and property
damage.
2:11:37 PM
SENATOR STEVENS asked for assurance that this would not make it
more difficult for small dealers to do business. He also asked
for the cost of a $50,000 to $100,000 bond.
REPRESENTATIVE CLAMAN answered that the current estimate for a
$50,000 bond is from $500 to $1,000 per year and the estimated
cost of a $100,000 bond is $1,000 to $2,500 per year. He noted
that the Division of Insurance regulates those bonds and Ms.
Wing-Heier was available online to answer further questions
about the bonding. Responding to the first question about the
effect on small dealers, he said he believes the proposed bond
is a reasonable cost of entry to this business. The bond
provides protection if there is some unforeseen problem with the
vehicle and it provides protection in the event that something
goes wrong after the sale.
CHAIR COSTELLO turned to invited testimony.
2:14:06 PM
MARCUS WAEHLER, Board Member, Alaska Automotive Dealers
Association; Owner, Red White & Blue Auto Sales, Anchorage,
Alaska, testified by invitation on HB 36. He advised that he
brought this concern to the board's attention six or seven years
ago when he noticed that many of the buyers attending used car
auctions did not have used car businesses. Rather, the autos
were being sold on Craigslist and were represented as being sold
by private parties, not dealers. Now when he goes to these
auctions the preponderance of buyers are private parties. He
recounted that he testified last week that he sold four cars "as
is" at auction that had not passed his safety inspections. That
afternoon he saw those same vehicles for sale online under the
guise of a private party.
MR. WAEHLER said his goal in bringing his concern forward was to
bring minimal standards to the used car sales industry. He noted
that his research of other states found many rules for becoming
a dealer. Alaska has none of those requirements. Somebody can
pay $500 for a bond and $75 for registration and be in business.
He emphasized that the bill is not intended to make it a
financial hardship to become a dealer, but rather to bring
minimal standards to the industry. HB 36 does that, he said.
2:17:06 PM
SENATOR STEVENS offered his understanding that the only used car
auction in Alaska is in Anchorage and said his concern is that
the bill may make it less likely that anybody that is not
connected to the road system would enter the used car business.
He asked if he knows of any other auctions in Alaska.
MR. WAEHLER said there are small auctions that pop up
sporadically in Fairbanks, Kenai, and Wasilla, but the main
auction is in Anchorage. Auctions have also moved online.
2:18:26 PM
STEVE ALLWINE, President and General Manager, Mendenhall Auto
Center; Director, National Automotive Dealers Association, Board
Member, Alaska Automotive Dealers Association, Juneau, Alaska,
testified in support of HB 36. Addressing Senator Steven's
concern, he said the board and membership in Alaska is a little
different in that it is comprised of large and small new and
used car dealers. When Mr. Waehler brought his concern forward,
the board wanted to make sure that adding standards would not be
burdensome. He said the board determined that the changes
reflected in HB 36 would not create a barrier to competition.
MR. ALLWINE confirmed that the issue is people who are licensed
as a dealer then hold themselves out as a consumer and sell to
other consumers. He said a consumer who works with a dealer who
properly represents himself as a dealer has built in protections
when they purchase a vehicle. However, those protections go away
on a consumer-to-consumer sale. The intent of the legislation is
to ensure those consumer protections. He added that everyone is
aware the bill will not eliminate the issue, but it may slow it
down. We're saying, "Do things right, take the necessary steps,
make a reasonable investment, and then come into our business."
SENATOR STEVENS said he was relying on his word that HB 36 will
not be a barrier to competition.
2:21:10 PM
CHAIR COSTELLO opened public testimony on HB 36; finding none,
she closed public testimony. She asked if there were questions
for Ms. Wing-Heier.
SENATOR STEVENS asked for an explanation of the change in
bonding and the cost to purchase the bond. He restated his
concern about not imposing a financial barrier on small
businesses in small communities.
2:22:08 PM
LORI WING-HEIER, Director, Division of Insurance, Department of
Commerce, Community and Economic Development (DCCED), Anchorage,
Alaska, said she does not see the bill as a barrier. It is an
increase in cost, but it provides more protections for consumers
who purchase these used cars. She explained that a bond
guarantees that the entity selling or repairing the car will
have the wherewithal to follow through and do the work. She
explained that insurance looks at three parts of a bond: the
character, the capacity, and the capital. A person in good
standing enjoys the lesser premium, and a new business will see
the premium decrease as it builds reputation and business.
2:23:47 PM
SENATOR STEVENS asked how much more a bond would cost a small
dealer if HB 36 were to pass.
MS. WING-HEIER answered that a $50,000 bond for a person in good
standing costs about $500 per year. That bond would cost closer
to $1,000 for a new person or business. The cost of a $100,000
bond ranges from $1,000 to $2,500 per year. The reason the bill
increases the bond is because of increases in the cost of the
car and parts and the capital a person should have to operate a
business.
SENATOR STEVENS asked if she believes HB 36 would present a
barrier to someone in a smaller community.
MS. WING-HEIER replied she didn't think so because the startup
costs for any new business will be in line with the numbers the
division gave to the sponsor for this bill.
CHAIR COSTELLO informed the members that the director of the
Division of Motor Vehicles was available to answer questions.
She asked Mr. Schmitz if he was aware of the administration's
position on HB 36.
2:26:13 PM
JEFFREY SCHMITZ, Director, Division of Motor (DMV), Department
of Administration (DOA), Anchorage, Alaska, stated that the
division does not have a position on HB 36.
SENATOR MICCICHE offered his perspective that the legislation
levels the playing field, sets expectations, and protects the
public.
2:27:28 PM
SENATOR GRAY-JACKSON echoed the previous comments and thanked
the sponsor for introducing the bill.
2:28:10 PM
CHAIR COSTELLO stated that she would hold HB 36 for further
consideration.
2:28:43 PM
There being no further business to come before the committee,
Chair Costello adjourned the Senate Labor and Commerce Standing
Committee meeting at 2:28 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 76 Letters of Support Received by 2021.04.20.pdf |
SL&C 4/30/2021 1:30:00 PM |
SB 76 |