SB 111-DIGITAL PRODUCT REPAIR  2:02:47 PM CHAIR MERRICK reconvened the meeting and announced the consideration of SENATE BILL NO. 111 "An Act relating to the diagnosis, maintenance, and repair of products that use digital electronics to operate; adding an unlawful act to the Alaska Unfair Trade Practices and Consumer Protection Act; and providing for an effective date." 2:03:05 PM SENATOR DUNBAR, speaking as sponsor, said SB 111 allows Alaskans to fix products that contain digital electronics. He noted feedback from various industries and said some of that feedback has been incorporated into amendments. 2:03:47 PM CHAIR MERRICK solicited a motion. 2:03:48 PM SENATOR DUNBAR moved to adopt Amendment 1, work order 34- LS0560\N.2. 34-LS0560\N.2 Bullard 3/26/25 A M E N D M E N T 1 OFFERED IN THE SENATE BY SENATOR DUNBAR TO: SB 111 Page 1, line 11: Delete "AS 45.45.800 - 45.45.890" Insert "AS 45.45.800 - 45.45.899" Page 2, line 14: Delete "AS 45.45.800 - 45.45.890" Insert "AS 45.45.800 - 45.45.899" Page 2, line 19: Delete "AS 45.45.800 - 45.45.890" Insert "AS 45.45.800 - 45.45.899" Page 2, line 23: Delete "AS 45.45.800 - 45.45.890" Insert "AS 45.45.800 - 45.45.899" Page 2, line 26: Delete "AS 45.45.800 - 45.45.890" Insert "AS 45.45.800 - 45.45.899" Page 3, line 12: Delete "AS 45.45.800 - 45.45.890" Insert "AS 45.45.800 - 45.45.899" Page 3, line 20: Delete "AS 45.45.800 - 45.45.890" Insert "AS 45.45.800 - 45.45.899" Page 3, line 29: Delete "AS 45.45.800 - 45.45.890" Insert "AS 45.45.800 - 45.45.899" Page 3, line 30: Delete "AS 45.45.800 - 45.45.890" Insert "AS 45.45.800 - 45.45.899" Page 4, line 2: Delete "AS 45.45.800 - 45.45.890" Insert "AS 45.45.800 - 45.45.899" Page 4, line 4: Delete "; exemption" Page 4, line 6: Delete "AS 45.45.800 - 45.45.890" Insert "AS 45.45.800 - 45.45.899" Page 4, lines 11 - 13: Delete all material. Page 4, line 14: Delete "AS 45.45.800 - 45.45.890" Insert "AS 45.45.800 - 45.45.899" Page 4, following line 19: Insert a new section to read: "Sec. 45.45.890. Exemptions. (a) The provisions of AS 45.45.800 - 45.45.899 do not apply to (1) a digital product that is a medical device intended for use in the diagnosis of disease or other conditions, or in the cure, mitigation, treatment, or prevention of disease, in humans or animals; (2) the diagnosis, maintenance, or repair of a digital product that is a motor vehicle or a part for a motor vehicle. (b) In this section, "medical device" has the meaning given to "device" in 21 U.S.C. 321(h)(1)." Page 4, line 20: Delete "Sec. 45.45.890" Insert "Sec. 45.45.899" Delete "AS 45.45.800 - 45.45.890" Insert "AS 45.45.800 - 45.45.899" Page 5, line 22: Delete "AS 45.45.800 - 45.45.890" Insert "AS 45.45.800 - 45.45.899" Page 5, line 28: Delete "AS 45.45.890" Insert "AS 45.45.899" 2:03:59 PM CHAIR MERRICK objected for purposes of discussion. 2:04:04 PM SENATOR DUBAR deferred to his staff to explain Amendment 1. 2:04:22 PM HAHLEN BEHNKEN, Intern, Senator Forrest Dunbar, Alaska State Legislature, Juneau, Alaska, said that [Amendment 1] creates an exemption for medical devices. This exemption was requested by the medical device industry. He explained that there is no demand for the general public and/or independent service providers to repair medical devices such as pacemakers and other complex medical devices. He noted their sensitive nature and the complex regulations around these devices and opined that there is no reason to provide a right to repair them. 2:05:12 PM CHAIR MERRICK removed her objection. She found no further objection and Amendment 1 was adopted. 2:05:18 PM CHAIR MERRICK solicited a motion. 2:05:21 PM SENATOR DUNBAR moved to adopt Amendment 2, work order 34- LS0560\N.5. 34-LS0560\N.5 Bullard 4/4/25 A M E N D M E N T 2 OFFERED IN THE SENATE BY SENATOR DUNBAR TO: SB 111 Page 1, line 11: Delete "AS 45.45.800 - 45.45.890" Insert "AS 45.45.800 - 45.45.899" Page 2, following line 12: Insert a new section to read: "Sec. 45.45.820. Parts pairing prohibited.  (a) A digital product manufacturer may not use parts pairing software or another technology that (1) prevents or inhibits an independent service provider or owner of a digital product from installing and enabling a functional replacement part or component that the digital product manufacturer has not approved; and (2) if a functional replacement part or component for a digital product that has not been approved by the digital product manufacturer is installed or otherwise enabled, (A) reduces the functionality or performance of the product; or (B) causes the product to display misleading alerts or warnings that the owner cannot immediately dismiss. (b) Nothing in this section requires a digital product manufacturer to make available to a person special documentation, tools, parts, electronic programs, or other devices that disable or override anti-theft or privacy security measures that are activated, installed, or otherwise enabled by an owner of a digital product." Page 2, line 13: Delete "Sec. 45.45.820" Insert "Sec. 45.45.830" Page 2, line 14: Delete "AS 45.45.800 - 45.45.890" Insert "AS 45.45.800 - 45.45.899" Page 2, line 16: Delete "Sec. 45.45.830" Insert "Sec. 45.45.840" Page 2, line 19: Delete "AS 45.45.800 - 45.45.890" Insert "AS 45.45.800 - 45.45.899" Page 2, line 23: Delete "AS 45.45.800 - 45.45.890" Insert "AS 45.45.800 - 45.45.899" Page 2, line 26: Delete "AS 45.45.800 - 45.45.890" Insert "AS 45.45.800 - 45.45.899" Page 3, line 11: Delete "Sec. 45.45.840" Insert "Sec. 45.45.850" Page 3, line 12: Delete "AS 45.45.800 - 45.45.890" Insert "AS 45.45.800 - 45.45.899" Page 3, line 16: Delete "AS 45.45.850(a)" Insert "AS 45.45.860(a)" Page 3, line 18: Delete "AS 45.45.850(a)" Insert "AS 45.45.860(a)" Page 3, line 19: Delete "Sec. 45.45.850" Insert "Sec. 45.45.860" Page 3, line 20: Delete "AS 45.45.800 - 45.45.890" Insert "AS 45.45.800 - 45.45.899" Page 3, line 29: Delete "AS 45.45.800 - 45.45.890" Insert "AS 45.45.800 - 45.45.899" Page 3, line 30: Delete "Sec. 45.45.860" Insert "Sec. 45.45.870" Delete "AS 45.45.800 - 45.45.890" Insert "AS 45.45.800 - 45.45.899" Page 4, line 2: Delete "AS 45.45.800 - 45.45.890" Insert "AS 45.45.800 - 45.45.899" Page 4, line 4: Delete "Sec. 45.45.870" Insert "Sec. 45.45.880" Page 4, line 6: Delete "AS 45.45.800 - 45.45.890" Insert "AS 45.45.800 - 45.45.899" Page 4, line 11: Delete "AS 45.45.800 - 45.45.890" Insert "AS 45.45.800 - 45.45.899" Page 4, line 14: Delete "Sec. 45.45.880" Insert "Sec. 45.45.890" Delete "AS 45.45.800 - 45.45.890" Insert "AS 45.45.800 - 45.45.899" Page 4, line 19: Delete "AS 45.45.850(a)" Insert "AS 45.45.860(a)" Page 4, line 20: Delete "Sec. 45.45.890" Insert "Sec. 45.45.899" Delete "AS 45.45.800 - 45.45.890" Insert "AS 45.45.800 - 45.45.899" Page 4, line 22: Delete "AS 45.45.850" Insert "AS 45.45.860" Page 5, line 9: Delete "AS 45.45.840" Insert "AS 45.45.850" Page 5, line 22: Delete "AS 45.45.800 - 45.45.890" Insert "AS 45.45.800 - 45.45.899" Page 5, line 28: Delete "AS 45.45.890" Insert "AS 45.45.899" 2:05:24 PM CHAIR MERRICK objected for purposes of discussion. 2:05:29 PM MR. BEHNKEN explained that Amendment 2 prohibits parts pairing - a practice in which digital product manufacturers will use software tools to bind certain parts together. Parts pairing requires the use of specific parts to ensure full functionality. He offered an example to illustrate this. He explained that this practice prevents anyone except the manufacturer from making repairs to the device. He stated that banning this practice creates more avenues for quality repair. 2:06:30 PM SENATOR DUNBAR added that SB 111 is complex and involved discussions with national advocacy organizations and manufacturers. He commented that Amendment 2 is the least controversial part of SB 111, as most of the manufacturers he spoke to were in support of this change. 2:07:06 PM MR. BEHNKEN replied that this is correct. 2:07:09 PM CHAIR MERRICK removed her objection. She found no further objection and Amendment 2 was adopted. 2:07:16 PM CHAIR MERRICK solicited a motion. 2:07:17 PM SENATOR DUNBAR moved to adopt Amendment 3, work order 34- LS0560\N.6. 34-LS0560\N.6 Bullard 4/8/25 A M E N D M E N T 3 OFFERED IN THE SENATE BY SENATOR DUNBAR TO: SB 111 Page 3, line 8, following "equipment": Insert "or powersports equipment" Page 5, following line 16: Insert a new paragraph to read: "(10) "powersports equipment" (A) includes an all-terrain vehicle, a personal watercraft, snowmobile, or similar vehicle or craft, and attachments and repair parts for powersports equipment; (B) does not include a motor vehicle required to be registered under AS 28.10;" Renumber the following paragraph accordingly. 2:07:23 PM CHAIR MERRICK objected for purposes of discussion. 2:07:25 PM MR. BEHNKEN said that [Amendment 3] adds a provision protecting dealers and authorized service providers of powersports equipment. He said SB 111 includes a provision protecting farm equipment dealers and authorized service providers. Amendment 3 extends the same provision to powersports equipment. He said there is a commonality between these industries, in both the products they provide and their business model. He explained that in these industries, nearly all business is conducted through a network of dealers (rather than manufacturer to consumer). He noted feedback from dealers (and the largest feedback from Alaskans) related to supplying parts to equipment owners and independent service providers at wholesale prices. This would require dealers to provide services and stock parts without making any profit. Amendment 3 allows dealers and authorized service providers to create terms and charge prices (above wholesale) that are reasonable. 2:08:44 PM CHAIR MERRICK removed her objection. 2:08:48 PM SENATOR DUNBAR expounded on why the provision in Amendment 3 was offered. He emphasized that residents in rural areas would still be able to fix their own equipment. He noted push back from all- terrain vehicle (ATV), personal watercraft, and snowmobile dealers regarding wholesale pricing. He clarified that this is not an exemption from SB 111; rather, Amendment 3 adds powersports equipment dealers to the existing farm equipment provision. He opined that this is a good balance that allows dealers to set a price above wholesale and does not artificially set prices for those products and services. He surmised that most individuals would continue to seek out an authorized dealer for repairs. 2:10:39 PM CHAIR MERRICK found no further objection and Amendment 3 was adopted. 2:10:54 PM SENATOR YUNDT asked the sponsor to restate the concerns addressed by Amendments 1-3. 2:11:17 PM SENATOR DUNBAR acknowledged that there are many manufacturing organizations that do not support SB 111. While those organizations are not based in Alaska, they have fought right to repair legislation across the country. He said that the central core of SB 111 is the same and would allow Alaskans to repair their own equipment. He indicated that the amendments were in response to feedback from various industries and manufacturers. He explained that the medical industry received a blanket exemption. He briefly discussed conversations he had with other manufacturers, stating that in some cases, manufacturers raised false points. In other instances, no amendment was necessary. He stated that the majority of feedback was related to the powersports industry and adding powersports to the existing farm equipment provision addressed those concerns. He indicated a willingness to work with the powersports industry on additional adjustments, if needed. He noted that additional amendments could be added in Senate Labor and Commerce Standing Committee, which is the next committee of referral. He explained that SB 111 is partially based on what other states have done. He noted that there is a blanket exemption for automobiles. He acknowledged that SB 111 does not go as far as some advocates would like; however, he opined that it is an important first step toward the right to repair. He pointed out that right to repair legislation is being considered nationwide. He commented that SB 111 is conservative in that it is a return to a more traditional way of fixing personal property that does not rely solely on manufacturers that are sometimes located in another state. He offered examples to illustrate this. He stated that the advent of software and digital devices has allowed for monopolistic and oligopolistic behaviors that are inherently anticompetitive. He opined that SB 111 is a good compromise. He added that he offered the amendments to address feedback from Alaskans. 2:14:41 PM CHAIR MERRICK commented that all Senate Community and Regional Affairs Standing Committee members are also members of the Senate Labor and Commerce Standing Committee. 2:14:47 PM SENATOR YUNDT indicated his understanding and thanked Senator Dunbar for his explanation. 2:14:53 PM CHAIR MERRICK solicited the will of the committee. 2:14:56 PM SENATOR DUNBAR moved to report SB 111, work order 34-LS0560\N, as amended, from committee with individual recommendations and attached fiscal note(s) and authorize Legislative Legal Services to make conforming changes. 2:15:14 PM CHAIR MERRICK found no objection and CSSB 111(CRA) was reported from the Senate Community and Regional Affairs Standing Committee.