BILL SUMMARY for SB09-091
SENATE COMMITTEE ON BUSINESS, LABOR AND TECHNOLOGY
|Votes: View--> ||Action Taken: |
01:41 PM -- Senate Bill 09-091
Senator Romer presented Senate Bill 09-091. The bill makes several changes to the relationship between motor vehicle manufacturers, distributors, or manufacturer representatives and motor vehicle dealers. Senator Romer explained the issues addressed by the bill and stated that he would explain the amendments after testimony. He spoke about his family's business relationships, and Senator Heath added additional comments.
The following individuals testified:
01:48 PM -- Amy Brink, representing the Alliance of Automobile Manufacturers, spoke about the bill. She described the nationwide problems facing car dealers and manufacturers and discussed negotiations on the bill. She explained which portions of the bill the alliance has concerns about, and discussed laws in other states.
Senator Romer added that it would be helpful for the committee to dialogue about each of the major issues Ms. Brink had addressed. He described negotiations on the bill. Responding to a question from Senator Heath, Ms. Brink described compromises that the manufacturers had made during negotiations.
Senator Harvey asked whether it was possible to leave the issue up to the Department of Revenue, and Senator Romer indicated that representatives of the Colorado Automobile Dealers Association (CADA) would address Senator Harvey's question. He described the unequal power relationship between car dealers and car manufacturers. Senator Foster asked if it was in the consumer's best interest for a dealer to offer more than one type of car. Ms. Brink responded that in certain instances it is best for the consumer, but that the manufacturer has an investment in the integrity and history of the car and would like a say in the question of whether or not dealers should be permitted to "duel,"or carry lines from different manufacturers. Senator Foster asked follow-up questions concerning a consumer's desire to compare different cars, and Ms. Brink stated that manufacturers are not trying to extinguish the right to duel, but that they are not comfortable with having no say in the matter.
Responding to a question from Senator Heath, Ms. Brink discussed whether or not manufacturers would be able to sell their own cars themselves in the current system. Senator Veiga asked for clarification of what the manufacturers' role would be in the decision to duel, and Ms. Brink addressed specific language in the bill that the alliance would like removed. Discussion continued between Ms. Brink and members of the committee, and Senator Romer indicated that he wanted the committee to hear witnesses from both sides.
Ms. Brink continued her testimony. She spoke about language in the bill that pertains to incentives and sales programs offered to dealers in other states. She stated that the bill's language was a gross invasion on interstate commerce. She responded to questions from Senator Veiga and Senator Heath on the issue. Ms. Brink discussed portions of the bill in which agreement between dealers and manufactures was possible.
02:22 PM -- Tim Jackson, representing CADA and the Colorado Auto Retailers, testified in support of the bill. He described the importance of the car dealer industry to Colorado and discussed the issue of dueling. He spoke about negotiations between proponents and opponents of the bill.
Senator Mitchell stated his concern that the bill protects car dealers from manufacturers rather than protecting the consumer. Mr. Jackson responded that the bill does not affect consumers, and described smaller communities that are not often well-served by dealerships. He said that the bill would help dealers be more viable. Mr. Jackson responded to follow-up questions from Senator Mitchell regarding the current turmoil in the car industry.
Mr. Jackson responded to questions from Senator Harvey concerning requests to duel. He stated that current law puts the obligation on the dealer to justify a request to duel. He responded to further questions from Senator Harvey.
Senator Heath spoke about his experience as a businessman. Senator Heath suggested that the issue could be solved with more time, and requested that the proponents and opponents return with language that sorted out some of the points of disagreement. Senator Veiga noted that deadlines required the bill to be heard that week. Senator Romer asked for further witnesses to be allowed to testify, and discussion continued concerning whether or not the bill could be laid over.
02:46 PM -- John Medved, representing Medved Autoplex and CADA, testified in support of the bill. He distributed two documents to members of the committee that provided information about and reasons to support the bill (Attachments B and C). Mr. Medved discussed the current relationship between dealers and manufacturers and described the effect of the economy on his business.
Senator Romer added that it is necessary to shift the contract negotiations away from a reliance on litigation. Senator Harvey said that no one wants to see more people lose their jobs, but it is difficult to say that public policy makers should get involved in contracts between private businesses. Mr. Medved stated that attitudes are changing and that it is necessary to address the problems of today. He added that dealers want manufacturers to stay in business, but said that the manufacturers have too much power in the current system.
Senator Mitchell expressed his admiration for Mr. Medved and for his company and described the difficulties presented by the bill. He indicated that he did not believe the legislature could prevent economic upheavals. Senator Foster made additional comments.
Senator Scheffel described the difficulties presented by the bill and the problem of interfering in private contracts. Senator Scheffel expressed his concern that the bill would not fix the problem, but would instead further conflict between dealers and manufacturers. Senator Romer noted that the two groups are close to agreements on certain issues. Mr. Medved added that no one is asking for manufacturers to give up their protections, but that proponents are seeking a more balanced relationship.
03:13 PM -- Hank Held, representing the Burt Automotive Group, testified in support of the bill. Mr. Held described his business and past negotiations with manufacturers. Senator Harvey and Senator Mitchell asked follow-up questions.
03:20 PM -- Don Hicks, representing CADA, testified in support of the bill with Lee Payne, a representative of Planet Honda/Planet Hyundai and CADA. Mr. Hicks discussed nationwide incentives and stated that CADA is seeking to stop manufacturers from offering incentives in other parts of the country that are not available in Colorado. Mr. Hicks described the effect of the internet and discussed other business practices of manufacturers.
Mr. Hicks responded to a question from Senator Heath regarding how the economic downturn had affected the business practices of manufacturers. Discussion continued between Senator Heath, Senator Harvey, and Mr. Hicks concerning how the internet had impacted the car industry.
Mr. Payne said that the bill concerns the balance of power between dealers and manufacturers. Mr. Payne described his business and the problems he faces due to the current balance of power between dealers and manufacturers. Senator Heath stated that dealers knew how the contracts worked when they went into business, so it is difficult to ask the legislature to rewrite the contracts now. Mr. Payne discussed how the contracts have changed over time and noted that dealers were asking for an opportunity to negotiate the contracts.
03:34 PM -- Jerry Abboud, representing the Colorado Powersports Dealers Association, testified in support of the bill. Mr. Abboud provided background information and discussed the changes made by the bill. He stated that the legislature has already created a structure for the contracts, and it would not be fair for the legislature to decide now that the issue is not worth its action. Senator Mitchell stated that the legislature may decide its jurisdiction is not appropriate to the issue, but that such a decision is not an indication that the issue is not "worthy." Discussion continued between Senator Mitchell and Mr. Abboud.
03:41 PM -- Bill Vickery, representing the Colorado Powersports Dealers Association, testified in support of the bill. He described his business and discussed how its contracts had changed over time. He added that his company does not have the lawyer power or the money to go against the manufacturers.
03:44 PM -- Donavon Facey, representing the Colorado Powersports Dealers Association, testified in support of the bill. He spoke about his business and past legislation. He discussed the balance of power between manufacturers and dealers.
03:48 PM -- Richard Sox, representing CADA, stated that he was available to answer questions if needed.
03:48 PM -- Randall Biles, representing Pikes Peak Travel Land and the Colorado Recreational Vehicle (RV) Dealers Association, testified in support of the bill. He stated that because RV dealers operate under the same laws as car dealers, the bill would help them as well. Senator Romer noted that it is the rule rather than the exception for RV dealers to duel. Mr. Biles described the dueling process for RV dealers and responded to questions from Senator Mitchell.
Senator Heath asked if there was anything in the legislation that RV dealers needed. Mr. Biles responded that the important portion of the bill was that it leveled the playing field. He added that RV dealers may eventually be exposed to the same issues as car dealers.
03:53 PM -- George Eidsness and Carl Larson, representing Transwest Trucks, testified in support of the bill. Mr. Eidsness described his business and discussed the problems that can occur without protective laws in place. He addressed the effect of international businesses and asked the committee to consider whether it would be fair to grandfather people into the bill. Mr. Larson provided background information on the bill and discussed past legislation.
03:58 PM -- Lynn Fanning, representing Navistar and International Truck and Engine Corporation, testified in support of the bill. He spoke about specific sections of the bill that he would prefer remain unamended.
03:59 PM -- Micki Hackenberger, representing Navistar and International Truck and Engine Corporation, testified in support of the bill. She stated that the bill would be a codification of a Colorado Court of Appeals Decision.
Senator Romer provided closing remarks on the bill.
Jery Payne, Senior Staff Attorney for the Office of Legislative Legal Services, came to the table to discuss prepared amendments.
Senator Tochtrop moved to refer Senate Bill 09-091 to the Committee of the Whole. After discussion, the bill was laid over to allow Senator Romer to continue to work on amendments. No vote was taken, and Senator Tochtrop withdrew her motion. The committee recessed briefly.