Legislature(2003 - 2004)

05/13/2003 08:09 AM STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
HB 272-MOTOR VEHICLE DEALERS                                                                                                  
                                                                                                                                
Number 0750                                                                                                                     
                                                                                                                                
CHAIR WEYHRAUCH  announced that  the last  order of  business was                                                               
HOUSE BILL NO.  272, "An Act relating to  motor vehicle dealers."                                                               
[Before the committee was CSHB 272(L&C).]                                                                                       
                                                                                                                                
Number 0730                                                                                                                     
                                                                                                                                
LINDA SYLVESTER, Staff to  Representative Bruce Weyhrauch, Alaska                                                               
State Legislature, sponsor of HB  272, explained that Sections 2-                                                               
8 of CSHB  272(L&C) include technical and  grammatical changes to                                                               
an  omnibus bill  that passed  the legislature  last year,  which                                                               
dealt  with automobile  dealers and  manufacturers and  contained                                                               
some consumer protection benefits, as well.                                                                                     
                                                                                                                                
MS. SYLVESTER said  that Section 1 is  the "primary controversial                                                               
issue involved in  the bill."  She noted  that, currently, Alaska                                                               
statute  prohibits the  sale of  any  current-model used  vehicle                                                               
being sold.   She  said, "Whatever  you do, Section  1 has  to be                                                               
altered,  because  every  used-car  ...  and  new-car  dealer  is                                                               
operating  outside of  the law,  currently ...."   Ms.  Sylvester                                                               
read  highlights  of  the  changes  made to  Section  1  for  the                                                               
committee.                                                                                                                      
                                                                                                                                
MS. SYLVESTER said  that used car fleets, such  as Avis, purchase                                                               
used vehicles, rent  them, and often "turn them  over within nine                                                               
months."   She indicated that although  current statute disallows                                                               
that, the  proposed legislation  would allow it.   She  said that                                                               
the  focus  [of  this  legislation]   is  on  the  "grey-market";                                                               
"vehicles that are  bound for the Canadian market  that are being                                                               
picked up in  Canada through fraudulent means and  turned over to                                                               
auctions, or  are acquired in  other ways in the  United States."                                                               
She explained  that these  grey-market vehicles  are for  sale in                                                               
Alaska  and  have  "different impediments."    She  revealed  the                                                               
following examples:                                                                                                             
                                                                                                                                
     Many  manufacturers don't  honor the  vehicle warranty.                                                                    
     The   vehicles   also   have  been   modified.      The                                                                    
     modifications  have been  standardized over  the years.                                                                    
     For  example, running  lights are  now  dealt with  and                                                                    
     these vehicles  ... are  almost interchangeable  in the                                                                    
     U.S.  and Canadian  markets; however,  the odometer  is                                                                    
     changed.     And  that  is  a   very  serious  consumer                                                                    
     protection  issue.   And the  other thing  is ...  that                                                                    
     they ... come into the  American market in violation of                                                                    
     the  franchise  agreement  ... that  the  manufacturers                                                                    
     have with the franchised dealers of the new vehicles.                                                                      
                                                                                                                                
Number 0421                                                                                                                     
                                                                                                                                
CHAIR  WEYHRAUCH   announced  that  he  would   now  hear  public                                                               
testimony.                                                                                                                      
                                                                                                                                
Number 0400                                                                                                                     
                                                                                                                                
JIM  ARPINO, testifying  on  behalf of  Affordable  Used Cars,  a                                                               
company  in  both  Fairbanks  and  Anchorage,  Alaska,  told  the                                                               
committee that  he caught  the last plane  out of  Fairbanks last                                                               
night  with  essentially only  the  clothes  on  his back.    His                                                               
impetus for  such action, he  explained, was to "shed  some light                                                               
on  this  bill  -  [HB]  272  -  specifically  Section  1."    He                                                               
reiterated  Ms. Sylvester's  notation that  there is  currently a                                                               
statute that states that no  dealer can sell a current-model used                                                               
vehicle.  He  said that everybody understands that  this makes no                                                               
sense.   He said that  the AG's  office has publicly  stated that                                                               
this [law]  is not enforceable.   He  said the question  is, "How                                                               
can it  be enforced?"   Section  1, he  remarked, was  drafted to                                                               
"help, or  amend the  currant law."   If [HB  272] is  passed, he                                                               
opined, the new law will actually be worse.                                                                                     
                                                                                                                                
MR.   ARPINO  explained   that   the  current   law  is   equally                                                               
unenforceable  to everyone.   Conversely,  he  said, the  changes                                                               
proposed in Section 1 would  definitely [negatively] impact used-                                                               
car dealers  in the state  of Alaska.   Mr. Arpino  described the                                                               
difference between  new and  used vehicles as  follows:   "If you                                                               
want a new  vehicle, you go to  a new car store.   If your budget                                                               
or preference wants a used vehicle,  you go to a used-car dealer,                                                               
or seek it in the newspaper  from a private individual, or you go                                                               
to a used-car department in a new  car store."  But the one thing                                                               
that everybody knows,  he said, is that the used  vehicle is most                                                               
likely cheaper.  The  choice of whether to buy new  or used - and                                                               
there is  nothing really in between  - is up to  the customer, he                                                               
said.   He told the  committee that he  has never had  a customer                                                               
come to a  Affordable Used Cars lot thinking he/she  was buying a                                                               
new vehicle.   He said  the company  has zero complaints  in that                                                               
department,  a  fact to  which  he  said  the AG's  office  could                                                               
probably attest.                                                                                                                
                                                                                                                                
Number 0169                                                                                                                     
                                                                                                                                
MR. ARPINO  listed the following  sources from  which [Affordable                                                               
Used Cars]  purchases used vehicles  for resale:   auto auctions;                                                               
trade-ins  from  individuals;  other dealers,  including  new-car                                                               
dealers; and  banks and credit  unions.   Of those, he  said, the                                                               
most frequent source  is the auto auction, which he  noted is for                                                               
dealers only.   At the auctions, he said, "no  matter who you are                                                               
or who  we buy from,  the vehicles  at these auctions  are used."                                                               
He  added, "We  don't  even  have new  vehicles  available to  us                                                               
through the course  of doing business, because  we're not new-car                                                               
dealers."   To  illustrate his  point, Mr.  Arpino said,  "If I'm                                                               
looking at  a 2003  vehicle to  purchase it, it's  going to  be a                                                               
used one."                                                                                                                      
                                                                                                                                
MR.  ARPINO  said that  Affordable  Used  Cars in  Fairbanks  and                                                               
Anchorage currently  has approximately  over 800 vehicles  on the                                                               
lot  for sale.   Out  of those,  as of  yesterday, only  five are                                                               
current-year, or  "2003-used vehicles."   He said a  person could                                                               
question  why  he  is  before  the  committee  if  such  a  small                                                               
percentage of the  business [would be affected].   The answer, he                                                               
offered, is  that as the year  goes on, those 2003  vehicles will                                                               
become  available to  his company  in large  numbers.   He stated                                                               
that he wants  to buy those vehicles, resell them  to the public,                                                               
and attempt to make a profit, because "that's what we do."                                                                      
                                                                                                                                
TAPE 03-62, SIDE A                                                                                                            
Number 0001                                                                                                                     
                                                                                                                                
MR. ARPINO [noted that the  amended Section 1 would allow dealers                                                               
to buy used vehicles from individuals].   He said that that helps                                                               
a  little,  but  suggested  that  it's just  common  sense.    He                                                               
reiterated, "That's what  we do."  He pointed out  that Section 1                                                               
also states  that dealers can buy  rental cars that have  been in                                                               
service  for  six months,  which  sounds  generous, but  in  most                                                               
cases, the rental cars  in Alaska show up in May  and are sold in                                                               
September after the tourists leave.   Some of those vehicles will                                                               
be sold  directly to dealers,  but most of  them will be  sold at                                                               
auto auctions.  He asked, "At  that point, how are we supposed to                                                               
know how long they've been in service?"                                                                                         
                                                                                                                                
MR. ARPINO posited  that an auto auction is a  great place to buy                                                               
a  vehicle for  resale, and  is "a  great place  to see  American                                                               
capitalism at work."  He continued as follows:                                                                                  
                                                                                                                                
     When you  purchase a vehicle at  these dealer-only auto                                                                    
     auctions, you  get a  title for  that vehicle  when you                                                                    
     pay  for  it.    It's  that simple.    You  ship  these                                                                    
     vehicles to Alaska  for resale on our lots  in hopes of                                                                    
     a profit.                                                                                                                  
                                                                                                                                
MR. ARPINO  stated that he doesn't  want to be an  Alaskan dealer                                                               
at these auctions and see good  used vehicles go by that could be                                                               
sold  due  to an  "Alaskan-only  law"  forbidding [dealers]  from                                                               
buying and selling these vehicles.                                                                                              
                                                                                                                                
Number 0158                                                                                                                     
                                                                                                                                
MR.  ARPINO  remarked that  Section  1  is really  about  selling                                                               
imported  vehicles in  Alaska.   He  noted that  it is  currently                                                               
legal  to buy  a  vehicle  that has  been  imported from  another                                                               
country, as  long as it's  done properly.   He said  that dealers                                                               
have  nothing  to do  with  the  actual process  of  importation.                                                               
Dealers receive the  U.S. titles from the  auction companies, and                                                               
at that  point, the vehicles  have already been imported  and are                                                               
already "American vehicles with U.S.  clean titles."  He told the                                                               
committee that the registered import  agents handle the paperwork                                                               
and the "speedo" (ph) changeover.   Those agents are regulated by                                                               
[U.S.]  Customs   and  the   [National  Highway   Traffic  Safety                                                               
Administration (NHTSA)].   Mr. Arpino  indicated that  [NHTSA] is                                                               
part of  the [U.S.] Department of  Transportation, in Washington,                                                               
D.C.  He said, "They seem  to have no problem with this activity.                                                               
Any questions pertaining to imported  vehicles should be directed                                                               
to them, for I am not an  authority on this matter, nor is anyone                                                               
who is not a registered  import agent or working or administering                                                               
the process."                                                                                                                   
                                                                                                                                
MR. ARPINO asked the committee  members for their help in keeping                                                               
the  free trade  of used  vehicles, "regardless  of (indisc.)  in                                                               
Alaska,"  by deleting  Section 1,  or at  least holding  the bill                                                               
until all  the facts are before  the committee.  He  continued as                                                               
follows:                                                                                                                        
                                                                                                                                
     This bill says nothing about  Canadian vehicles - not a                                                                    
     peep.  It's  only about restriction, and this  is not a                                                                    
     state  issue.   This is  a  federal trade  issue.   ...                                                                    
     Dealers are not importers, and  I think that might have                                                                    
     a lot to do with the complications.                                                                                        
                                                                                                                                
MR.  ARPINO   distributed  a  handout  [labeled,   "The  Detailed                                                               
Registered  Importer  Process"  and available  in  the  committee                                                               
packet],  which   shows  the  lengthy   process  involved.     He                                                               
emphasized that the chance of  odometer fraud "appears very, very                                                               
unlikely."    He  indicated  that  questions  in  regard  to  the                                                               
importer process  should be  directed to  those involved  in that                                                               
process.   He  concluded,  "So, the  vehicles  that we're  buying                                                               
currently are good used vehicles for the Alaskan public."                                                                       
                                                                                                                                
Number 0447                                                                                                                     
                                                                                                                                
REPRESENTATIVE  HOLM  asked Mr.  Arpino  how  he relates  to  the                                                               
dealers  in  "our  area,"  with  regard  to  "the  accusation  of                                                               
predatory pricing, et cetera."                                                                                                  
                                                                                                                                
Number 0490                                                                                                                     
                                                                                                                                
MR. ARPINO  replied that the  accusation of predatory  pricing is                                                               
not accurate,  because the vehicles  are not "apples  to apples,"                                                               
but are  instead "apples to  oranges."  He reiterated  that there                                                               
is  no misunderstanding  between dealers  and consumers  that the                                                               
vehicles  are used.    He  noted that  people  don't get  certain                                                               
things  when  buying  a  used  vehicle  from  a  dealership,  for                                                               
example,  a nice  show room,  a parts  department, and  a service                                                               
department.   He  said that  that  is the  risk that  [consumers]                                                               
take.                                                                                                                           
                                                                                                                                
MR.  ARPINO  said  that  if   those  consumers  were  to  have  a                                                               
legitimate problem, they would contact  the AG's office, which he                                                               
said  has "no  bones  about straightening  businesses  out."   He                                                               
praised the  Anchorage attorney  general's office,  in particular                                                               
noting that Ed Sniffen has  been helpful in "getting everybody on                                                               
the  same sheet  of paper,  with the  exception of  this Canadian                                                               
issue."  He reiterated that that  issue is not a state issue, but                                                               
a federal  one.  He  noted that, at  this point, the  bill states                                                               
that "this  particular vehicle" cannot be  imported, because it's                                                               
coming  from Canada.    He  asked, "Are  we  going  to then  stop                                                               
importing  vehicles  from   Germany?    Are  we   going  to  stop                                                               
motorcycles, refrigerators?  Where does it stop?"                                                                               
                                                                                                                                
MR. ARPINO  revealed that his  current relationship  with dealers                                                               
is a  good one.   He noted  that he is  currently on  "the board"                                                               
with Mr.  Allwine, and he  sees many things  eye-to-eye; however,                                                               
on  this particular  issue, he  said  his view  differs from  Mr.                                                               
Allwine's.  Overall, he said,  the relationship between used- and                                                               
new- [car] dealers is a good one.                                                                                               
                                                                                                                                
Number 0677                                                                                                                     
                                                                                                                                
REPRESENTATIVE CRAWFORD asked if  the bill, as currently written,                                                               
makes  it illegal  for everybody  to sell  current-model Canadian                                                               
cars.                                                                                                                           
                                                                                                                                
MR. ARPINO stated his belief that  there are not a lot of new-car                                                               
franchises  buying  previously  imported  vehicles,  although  he                                                               
noted that there used  to be a lot in the  past, but now "they're                                                               
staying  away from  it, because  it  helps this  bill process,  I                                                               
believe, pass."   He said his interpretation of the  bill is that                                                               
"it would limit the ability for  us to go to auctions, because it                                                               
doesn't  specifically say  in  there."   He  noted that  imported                                                               
vehicles from Canada  are "running through" auctions.   He added,                                                               
"We are not  involved in the importation of  those vehicles; they                                                               
are  just  available for  us  to  purchase."    The only  way  to                                                               
determine if  a vehicle has  been imported,  he said, is  to look                                                               
for an authorized import sticker on  the door.  He explained that                                                               
it is  important to make  certain that sticker is  there, because                                                               
that  shows that  the vehicle  was imported  properly [into]  the                                                               
U.S.,  and it  provides  information regarding  who imported  the                                                               
vehicle,  when it  was imported,  and  whether it  meets all  the                                                               
requirements.   At that point,  he said, the seller  provides the                                                               
free-and-clear title.                                                                                                           
                                                                                                                                
Number 0876                                                                                                                     
                                                                                                                                
TERI  PETRAM, testifying  on  behalf of  Lyberger's  Car &  Truck                                                               
Sales, LLC, paraphrased her written testimony as follows:                                                                       
                                                                                                                                
     In testimony heard by those  supporting HB 272, Section                                                                    
     1,  several concerns  were mentioned  in regard  to the                                                                    
     importation  of Canadian  vehicles  for  resale.   It's                                                                    
     odd,  though, that  the  word Canadian  is  not in  the                                                                    
     bill,  except  debate  from supporting  parties  always                                                                    
     leads  there.    So, while  Lyberger's  isn't  actually                                                                    
     importing  the vehicles  themselves,  I'm  going to  go                                                                    
     ahead and address a few of those issues for you:                                                                           
                                                                                                                                
     One   was  odometer   discrepancies;  two   was  voided                                                                    
     manufacturers  warranties; three  was the  availability                                                                    
     of  independent  mechanics  and  technology  to  repair                                                                    
     newer vehicles;  four was recall notifications  sent to                                                                    
     subsequent  owners;   and  five  was  the   selling  of                                                                    
     [vehicles damaged by flood, for example] ....                                                                              
                                                                                                                                
     Let me point  out that these are  all legitimate issues                                                                    
     facing  consumers  today,  on both  U.S.  and  Canadian                                                                    
     vehicles   -  they're   not  characteristics   of  only                                                                    
     Canadian imports  - and we  agree that  the enforcement                                                                    
     of the existing laws - that  are already on the books -                                                                    
     that address them should be made.                                                                                          
                                                                                                                                
     None of  these "Canadian  vehicle issues"  - and  I say                                                                    
     that  in  quotes  because  they're  not  just  Canadian                                                                    
     vehicle issues - are being  addressed or put to rest by                                                                    
     allowing section  one to pass as  written.  Importation                                                                    
     of Canadian  vehicles will continue.   Used-car dealers                                                                    
     will  still buy  2001  and 2002  Canadian vehicles  and                                                                    
     resell them in Alaska.   Why?, because it is legal, and                                                                    
     it  makes  good  business  sense, and  the  supply  and                                                                    
     demand is  there to support  it.  New car  dealers will                                                                    
     still  buy current-model  Canadian  vehicles when  they                                                                    
     can't  get  a particular  type  of  vehicle from  their                                                                    
     manufacturer,  and  they'll  still sell  them  here  in                                                                    
     Alaska.                                                                                                                    
                                                                                                                                
     So,  the  fact  is,  each of  those  issues  that  were                                                                    
     brought up  are already addressed in  Alaska Statutes -                                                                    
     it's Section  3, [AS] 45.50.147,  I believe -  and [in]                                                                    
     business   advisories  from   the  Attorney   General's                                                                    
     office, and  they're already regulated by  the National                                                                    
     Highway Transportation Safety  Administration, the U.S.                                                                    
     Department  of Transportation,  the U.S.  Environmental                                                                    
     Protection Agency,  [and] U.S.  Customs, and  they must                                                                    
     comply  with federal  motor  vehicle safety  standards.                                                                    
     The issues are already handled in other areas.                                                                             
                                                                                                                                
     Apparently, there  seems to  be a  sympathetic attitude                                                                    
     towards  local franchised  dealers  and the  investment                                                                    
     they have  made with their respective  franchises.  The                                                                    
     picture  being  painted  is  that  there's  no  way  of                                                                    
     competing with  the prices of Canadian  vehicles, aside                                                                    
     from having  a showroom, ... [a]  parts department, ...                                                                    
     and  other   convenient  factors  that   customers  can                                                                    
     appreciate.   The exchange rate  from Canada to  the US                                                                    
     is favorable,  but franchised  dealers have  access to:                                                                    
     factory  subsidized  interest  rates  -  you  see  zero                                                                    
     percent  advertised  all  the  time,  [and]  it's  very                                                                    
     difficult for us to compete  with that, because we have                                                                    
     local  lenders;  factory rebates  -  in  excess of  ...                                                                    
     $3000-$4,000  on  some  vehicles; holdback  and  dealer                                                                    
     only incentives  for moving specific vehicles;  and ...                                                                    
     factory-backed    advertising   -    you   see    Ford,                                                                    
     [Chevrolet], [or]  Dodge commercials on  television all                                                                    
     the time that your  local dealer didn't necessarily pay                                                                    
     for.  Once you compare  the facts, new-car dealers have                                                                    
     as good  a bottom-line  price as used-car  dealers, but                                                                    
     are  unwilling  to  accept   the  same  smaller  profit                                                                    
     margin.                                                                                                                    
                                                                                                                                
     The  only   objective  Section  1  will   meet  is  the                                                                    
     elimination of  competition from used-car  dealers with                                                                    
     new-car dealers.  We, used-car  dealers, will no longer                                                                    
     be able to bid against  our fellow dealers for current-                                                                    
     model  vehicles   at  various   auctions,  or   in  any                                                                    
     situation  that's   not  a  private  owner   or  rental                                                                    
     vehicle, because we won't be able to sell them.                                                                            
                                                                                                                                
     In the  last four  to five  years, used-car  dealers in                                                                    
     Alaska have evolved  from the dirt lot  with 20-30 cars                                                                    
     for under $10,000, to paved,  well-lit lots with 100 or                                                                    
     200 high-quality  vehicles.   We've sliced out  a chunk                                                                    
     of  the  new-car  dealers' pie,  and  that's  why  they                                                                    
     support ... Section  [1].  If their  past customers had                                                                    
     been  treated  well  the last  few  decades,  maybe  we                                                                    
     wouldn't be so successful.                                                                                                 
                                                                                                                                
     So  you might  wonder why  ... [we  aren't] happy  with                                                                    
     cars from  rental fleets,  also.   Well, let's  look at                                                                    
     the  type of  inventory  that a  rental fleet  carries:                                                                    
     ...  sedans,   minivans,  and  a  few   sport  [utility                                                                    
     vehicles].   When was  the last time  you saw  a rental                                                                    
     fleet  of  Eddie  Bauer  Ford  Expeditions,  or  three-                                                                    
     quarter-ton crew cab diesels?                                                                                              
                                                                                                                                
CHAIR WEYHRAUCH informed Ms. Petram that the bells calling the                                                                  
representatives onto the House floor had just rung.  He stated                                                                  
his desire to hear Mr. Lyberger's testimony, as well.                                                                           
                                                                                                                                
MS. PETRAM continued paraphrasing her written testimony, as                                                                     
follows:                                                                                                                        
                                                                                                                                
     Those are  the vehicles Alaskan buyers  are looking for                                                                    
     - they  want the trucks  and the bigger  sport [utility                                                                    
     vehicles], not the sedans and minivans.                                                                                    
                                                                                                                                
     [Used-car]  dealers also  use  local  lenders.   Ninety                                                                    
     percent of the  time we use Alaska  USA [Federal Credit                                                                    
     Union], Denali  [Alaskan Federal Credit  Union], Credit                                                                    
     Union 1,  [or] Alaska  State Employees  [Federal Credit                                                                    
     Union].    New-car  dealers,  when   they  sell  a  new                                                                    
     vehicle,  ... primarily  use ...  out-of-state factory-                                                                    
     lending institutions -  like [General Motors Acceptance                                                                    
     Corporation],   Ford  Motor   [Company]  Credit,   [or]                                                                    
     Chrysler  Credit  -  with subsidized  rates  [of]  zero                                                                    
     percent [or] 2.9 percent, [for example].                                                                                   
                                                                                                                                
     Again, a  "2003" is obviously a  more expensive vehicle                                                                    
     than a "2001."  When  you limit the used-car dealers to                                                                    
     just a  few current-model  vehicles that they  can sell                                                                    
     and arrange financing for,  you're also hurting Alaskan                                                                    
     banks and  credit unions' portfolios.   They're missing                                                                    
     out  on  the  high-dollar   2003  loans.    Right  now,                                                                    
     Alaska's credit  unions have some  of the  lowest rates                                                                    
     in  the  country, like  4.99  percent  with Alaska  USA                                                                    
     [Federal Credit  Union], and  support from  their local                                                                    
     dealers is a big factor in keeping the rates low.                                                                          
                                                                                                                                
     Just this  year - January  ... [through] ...  [part of]                                                                    
     May  -  our  dealership  alone  sent  the  local  banks                                                                    
     $12,925,991  in high-quality  loans.   And  I say  high                                                                    
     quality, because  usually you have to  have good credit                                                                    
     to buy  a $30,000 truck.   Since the "2003s"  cost more                                                                    
     than  the older  models, it  is  safe to  say ...  that                                                                    
     about 50 percent  of that money was  on current models.                                                                    
     So, that's  [$6,500,000] of lending money  that went to                                                                    
     local institutions that won't be there.                                                                                    
                                                                                                                                
CHAIR WEYHRAUCH ascertained that Mr. Lyberger was able to come                                                                  
back later in the day to give his testimony.  He then asked Ms.                                                                 
Petram to wrap up her testimony.                                                                                                
                                                                                                                                
MS. PETRAM continued paraphrasing her written testimony as                                                                      
follows:                                                                                                                        
                                                                                                                                
     It's  not  just  us.     There's  also  other  dealers:                                                                    
     Affordable, Quality, Budget,  Phil Hawes, [and] Variety                                                                    
     - that's  just to name a  few.  So, there's  that chunk                                                                    
     of money that [is] coming from those dealers, also.                                                                        
                                                                                                                                
     Also,  when   an  Alaskan  bank  has   a  current-model                                                                    
     repossession  that they  want to  recoup some  of their                                                                    
     losses  on -  like a  first-payment default  ... -  how                                                                    
     many dealers  will they be able  to ask to bid  on that                                                                    
     vehicle?   Say, for  example, a Cadillac  or a  Mazda -                                                                    
     there's  only one  in Anchorage.   So,  basically, they                                                                    
     have  to  take what  that  dealer  gives them  for  the                                                                    
     vehicle;  they can't  send it  out to  bid and  get the                                                                    
     most money back on their loss.                                                                                             
                                                                                                                                
     Used dealers also spend millions  of dollars with local                                                                    
     independent  mechanics and  parts suppliers.   New  car                                                                    
     dealers get  all their parts  from the factory,  or ...                                                                    
     [a] large portion of ... [them].                                                                                           
                                                                                                                                
     So,  how  exactly does  Section  1  help the  State  of                                                                    
     Alaska or its  people?  Aside from taking  a huge chunk                                                                    
     of  money  away  from local  Alaskan  businesses  [and]                                                                    
     lending  institutions, it  ensures the  $1,995 and  the                                                                    
     $2,995  additional  dealer   mark-up  ...  or  addendum                                                                    
     sticker ... on new vehicles  will stay.  It also forces                                                                    
     any intelligent car buyer looking  for a good deal on a                                                                    
     late-model vehicle  to spend  their money out  of state                                                                    
     and have the vehicle  shipped from Washington or Idaho,                                                                    
     or   any  other   state  without   a  law   prohibiting                                                                    
     competition.  Every  $1,000 that a customer  saves on a                                                                    
     vehicle  is $20  disposable  income -  every month,  in                                                                    
     their pocket  - to spend  on whatever else  they choose                                                                    
     ....   So, I  thought we were  trying to  stimulate the                                                                    
     economy and  increase consumer spending in  Alaska, not                                                                    
     stifle it.                                                                                                                 
                                                                                                                                
     So, in  conclusion, after browsing through  the already                                                                    
     existing Alaska  Statutes in the handout  that Jim gave                                                                    
     you, you have  to ask yourself what the  real intent of                                                                    
     Section  1  is, and  [if  it's]  fair  and just.    And                                                                    
     wouldn't  your constituents  appreciate  the chance  to                                                                    
     make  their  own  decision  on   where  they'll  buy  a                                                                    
     current-model vehicle?                                                                                                     
                                                                                                                                
     I would submit that Section  1 needs to be removed from                                                                    
     HB 272 or rewritten without the words "current model".                                                                     
                                                                                                                                
[HB 272 was held over.]                                                                                                         

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