HB 36-MOTOR VEHICLE DEALERS: APPLIC.; INSURANCE  2:33:08 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." She noted that this was the second hearing and there was an amendment for the committee to consider. She asked Ms. Wilterdink to summarize the bill and explain the amendment. 2:33:45 PM MELODIE WILTERDINK, Staff, Senator Mia Costello, Alaska State Legislature, Juneau, Alaska, explained that the bill creates stricter insurance requirements for licensed motor vehicle dealers and increases their bonding requirement. According to the sponsor, this better aligns Alaska with the insurance requirements in other states. Alaskans will be covered when they test drive a car and the bonding requirement will provide recourse for buyers who purchase used cars that were fraudulently represented. SENATOR MICCICHE joined the committee. 2:34:44 PM CHAIR COSTELLO moved Amendment [1], work order 32-LS0271\B.2. 32-LS0271\B.2 Fisher 5/14/21 AMENDMENT [1] OFFERED IN THE SENATE BY SENATOR COSTELLO TO: SCS HB 36(TRA) Page 1, line 1, following "vehicles;": Insert "relating to the duties of a motor vehicle  dealer;" Page 2, following line 17: Insert a new bill section to read:  "* Sec. 2. AS 08.66.040 is amended to read: Sec. 08.66.040. Filing application for  registration; identification of dealer. The application shall be filed with the department. Upon receipt of the application, the department shall examine it and may make an investigation of the information in it. If the department is satisfied that the dealer is entitled to registration, and the fees have been paid and a bond filed, the department shall assign a distinctive registration number to the dealer and file the dealer's application and index it alphabetically and numerically. A dealer is registered when the department assigns a registration number. A  dealer shall inform each person who purchases a  vehicle from the dealer that the dealer is registered  under this chapter and provide the dealer's  registration number."  Renumber the following bill sections accordingly. 2:34:54 PM SENATOR STEVENS objected for discussion purposes. 2:35:03 PM MS. WILTERDINK explained that the proposed amendment seeks to resolve the issue of registered vehicle dealers who go to closed auctions, which are only open to registered dealers, and they buy cars that are meant to be used for parts and sell them on sites like Craigslist, posing as an individual not a dealer. The buyers are unsuspecting and only later find out these cars are not meant to be on the road. Amendment [1] requires a dealer to identify to identify himself as a dealer whenever they sell a car. The buyer would know they purchased a vehicle from a dealer and that they have the avenues of recourse that HB 36 provides. 2:36:21 PM SENATOR STEVENS asked what stakeholders she had talked to. MS. WILTERDINK answered that she spoke to large and small motor vehicle dealers and some victims, most of whom are young and have just made the largest purchase in their life. 2:37:06 PM SENATOR STEVENS removed his objection. CHAIR COSTELLO found no further objection and Amendment [1] passed. She asked the bill sponsor's staff for the sponsor's position on the amendment. 2:37:46 PM SOPHIE JONAS, Staff, Representative Matt Claman, Alaska State Legislature, Juneau, Alaska, stated that the sponsor supports Amendment 1. CHAIR COSTELLO offered her belief that the amendment strengthens the consumer protection portion of the bill as well as the intent of the legislation. 2:38:19 PM SENATOR STEVENS offered his understanding that dealers currently are not required to identify themselves as a dealer when they sell a used car. HB 36 requires the dealer to inform the purchaser and guarantee the vehicle. MS JONAS answered yes and deferred further comment to the dealer who was available online to speak to the bill. 2:39:11 PM SENATOR MICCICHE asked the record to reflect that he heard the explanation of the amendment and he supports it. He asked how the bill proposes to differentiate between an individual who frequently buys and sells their personal vehicles and a dealer who buys vehicles at auction and poses as an individual when they sell the vehicle to an unsuspecting consumer. MS. JONAS answered that the existing statute has an annual five- vehicle threshold above which an individual is required to obtain a motor vehicle dealer license. However, her understanding is that the requirement is not enforced. 2:40:44 PM SENATOR STEVENS asked to hear from a dealer. CHAIR COSTELLO recognized that Martin Martensen with the Alaska Auto Dealers Association was available to provide comment and answer questions. 2:41:04 PM MARTEN MARTENSEN, owner, Continental Auto Group; board member, Alaska Auto Dealers Association, Anchorage, Alaska, stated support for the amendment the chair brought forward to require dealers to disclose that they are a dealer and that consumers have recourse. He highlighted that the bill also requires [the application for dealer registration] to include a phone number for the business so the consumer has recourse if the vehicle was misrepresented. SENATOR STEVENS asked if this is a large concern for legitimate dealers. MR. MARTENSEN answered yes; it has become a big issue in Anchorage and throughout Southcentral. He noted that dealer fraud on vehicles was one of the most frequent complaints to the Consumer Protection Unit when former Attorney General Ed Sniffen was head of the unit. CHAIR COSTELLO, finding no further questions, solicited a motion. 2:43:04 PM SENATOR REVAK moved to report SCS HB 36, work order 32-LS0271\B as amended, from committee with individual recommendations and attached fiscal note(s). CHAIR COSTELLO stated that without objection, SCS HB 36(L&C) passed from the Senate Labor and Commerce Standing Committee.