SB 125-MOTOR VEHICLE TRANSACTIONS  4:07:24 PM CHAIR OLSON announced that the final order of business would be SENATE BILL NO. 125, "An Act relating to certain vehicles, including trailers; and relating to motor vehicle dealer advertising, motor vehicle dealer sales of used motor vehicles, motor vehicle sales contracts, motor vehicle service contracts, and motor vehicle sales financing." 4:0802 PM BOB PAWLOWSKI, Staff, Senator Kevin Meyer, Alaska State Legislature, stated that SB 125 is a consumer protection bill to protect and assist consumers in finding and purchasing competitively priced motor vehicles which are offered in prices that are clearly stated by the dealers. He related that SB 125 would update the statutes referred to as the Alaska Auto Dealers Practices Act, clarifying several provisions concerning the advertising of new and used automobiles, The revisions assist consumers in understanding auto comparison pricing and eliminates ambiguities contained in the current statutes. The bill would assist dealers in following state law, a very key element in the bill. This bill was drafted in conjunction with the DOL to provide consumer protection in purchasing motor vehicles and to dealers in pricing and advertising the vehicles. He commended the auto dealers and Mr. Ed Sniffen, DOL, for the work on the bill. CHAIR OLSON mentioned the committee heard the companion bill several weeks ago. 4:09:45 PM CHAIR OLSON, after first determining no one else wished to testify, closed public testimony on SB 125. 4:10:22 PM REPRESENTATIVE JOHNSON inquired as to whether the bill versions are the same. MR. PAWLOWSKI agreed. 4:10:47 PM REPRESENTATIVE MILLER expressed concern, noting he held conversations with the Auto Dealers Association. He related a scenario in which in a consumer walks on car lot and the dealer has posted an advertised price on the vehicle's window. If he consumer wants to pay the price he or she is finished. CLYDE (ED) SNIFFEN, JR., Senior Assistant Attorney General, Commercial/Fair Business Section, Civil Division (Anchorage), Department of Law (DOL), answered that Representative Miller is correct. Consumers would be able to purchase vehicles on the lot with an advertised price posted, noting the advertised price must include everything except for fees paid to a governmental entity, such as title, registration, and taxes. He reiterated these fees would be in addition to the price. 4:12:20 PM REPRESENTATIVE MILLER asked whether this criterion is the same if the car is new or used or if there is a distinction between the two categories. MR. SNIFFEN answered that the bill would apply to auto dealers' advertised prices for new and used vehicles and would include all costs except for fees to a governmental entity or third party. In further response to Representative Miller, Mr. Sniffen agreed that the fees would typically relate to governmental entities, such as the Division of Motor Vehicles or an entity for title, licensing or registration. 4:13:20 PM REPRESENTATIVE MILLER related a scenario in which a consumer opted for items such as winterizing, a battery blanket, undercoating, or a specific credit union. He related his understanding these options would be up to the consumer. MR. SNIFFEN answered yes, the advertised price would be for the vehicle and if the buyer wanted things such as extended service contracts. 4:14:01 PM REPRESENTATIVE MILLER asked for a definition of DOC fees. MR. SNIFFEN answered that a DOC fee is a short hand acronym for document preparation fees. He explained that DOC fees represent the fees motor vehicle dealers add to the price of vehicle to compensate them for preparing paperwork for obtaining the title and licensing the vehicle. He pointed out that the DOC fee is not a government fee, but represents the overhead that the dealer absorbs in order to get the car ready to drive off the car lot. The dealers charge a DOC fee, which typically in Anchorage can range from $100-$200, but rarely would be as high as $300. 4:15:07 PM REPRESENTATIVE MILLER asked when the consumer would discover the DOC fee and if it would be on the sticker. MR. SNIFFEN answered that current statutes require that the DOC fee be included in any advertised price for the vehicle. He explained that the advertised price must include the fee. He suggested that adding on the fee later would be in violation of the statute; however, if a consumer negotiated a different price with the dealer, such as negotiating the price from the $29,000 listed to $25,000, the current statute does not restrict adding the DOC fee back into the price. He mentioned one caveat would be if the person negotiated a $100 discount and the dealer attempted to add on a $200 in the DOC fee so that the total price exceeded the advertised price, the Department of Law would have an issue with that practice. REPRESENTATIVE MILLER concluded that Mr. Sniffen's testimony reflects the information he was given by car dealers. 4:16:42 PM REPRESENTATIVE SADDLER asked whether any provision in law is required by used car sales to furnish the Kelley Blue Book price to allow the consumer to check the trade-in value of a vehicle. MR. SNIFFEN answered no. He suggested that many consumers research the Kelley Blue Book price ahead of time. He said this bill would require the book if a dealer was using the Kelley Blue Book price for comparison. REPRESENTATIVE SADDLER inquired as to whether this provision would apply to new or used vehicles. MR. SNIFFEN answered the current statutes relate to used cars. He pointed out dealers use comparisons to the manufacturer's suggested retail price (MSRP) for new vehicles, which is posted on the vehicle in sticker form. Thus the Kelley Blue Book is not normally needed for new vehicles. He reiterated that most of the pricing information is already available on the window sticker price. REPRESENTATIVE SADDLER commented that typically the library has copies of the Kelley Blue Books. He said he was just thinking out loud. 4:19:34 PM CHAIR OLSON, after first determining no one else wished to testify, closed public testimony on SB 125. 4:19:59 PM REPRESENTATIVE JOHNSON moved to report SB 125 out of committee with individual recommendations and the accompanying zero fiscal note. There being no objection, SB 125 was reported from the House Labor and Commerce Standing Committee.