MINUTES OF THE

      SENATE COMMITTEE ON COMMERCE AND LABOR

 

      Sixty-seventh Session

      April 23, 1993

 

 

 

The Senate Committee on Commerce and Labor was called to order by Chairman Randolph J. Townsend, at 9:30 a.m., on April 23, 1993, in Room 227 of the Legislative Building, Carson City, Nevada.  Exhibit A is the Meeting Agenda.  Exhibit B is the Attendance Roster.

 

 

COMMITTEE MEMBERS PRESENT:

 

Senator Randolph J. Townsend, Chairman

Senator Sue Lowden, Vice Chairman

Senator Ann O'Connell

Senator Mike McGinness

Senator Raymond C. Shaffer

Senator Leonard V. Nevin

Senator Lori L. Brown

 

 

STAFF MEMBERS PRESENT:

 

Beverly Willis, Committee Secretary

Brian Davie, Senior Research Analyst

 

 

OTHERS PRESENT:

 

John P. Kuminecz, Commissioner, Consumer Affairs, Department of       Commerce

Raymond Rodriguez, Nevada Legal Services, Inc.

Daryl E. Capurro, Nevada Franchised Auto Dealers Association

Lewis A. Ewert, Owner, Reno Jeep Eagle and President, Nevada   Franchise New Car Dealers Association

Cindy Clampitt, Executive Assistant, Registration Division, Department of Motor Vehicles and Public Safety, State of    Nevada

Don Hellwinkel, C.O.D. Garage Company

Fred Fayeghi, President, G.M.F. Motor

Richard West, President, Jones-West Ford, Jones-West Mitsubishi

David L. White, Elko Automobile Dealers Association

C. L. Trahan, Sales Manager, Fletcher Jones, Inc.

Fredric W. Harrell, Nevada Motorcycle Dealers Association

Don Cralle, Better Business Bureau of Northern Nevada

Ben Scott, President, Scott Motor Company

Richard Saling, Diamond Motors & Pawn

 

 

The hearing on Senate Bill (S.B.) 383 was opened by Senator Townsend.

 

 

SENATE BILL 383:  Provides for creation and enforcement of warranties for certain used motor vehicles sold by dealers.

 

First to testify was Senator Lori Lipman Brown, District 7, Clark County.  She stated the bill stemmed from a growing problem of individuals attempting to purchase used cars and finding that the cars are only offered "as is."  Senator Brown went on to note this could pose a real problem because this would eliminate certain implied warranties.  Senator Brown then introduced Exhibit C, a letter from Melvin S. Lipman, Esq., who requested this bill.

 

She mentioned she felt the bill would need to go to a subcommittee, since it had been pointed out there were certain elements in the bill that would need fine tuning.  Some of the items were in order to save the cost of litigation and to provide for arbitration through the Better Business Bureau.  Another would be certain inspections that would be required with various time requirements specified.  Senator Brown went on to explain other issues required.

 

Senator O'Connell asked if there were any statistics available regarding cars sold versus existing problems.  Another concern mentioned by Senator O'Connell was the possibility of excessive cost to someone planning to buy a used car. 

 

At this time there was an involved discussion regarding advantages and disadvantages of the bill between Senator Shaffer, Senator Nevin and Senator Brown.

 

John P. Kuminecz, Commissioner, Consumer Affairs, Department of Commerce, in answer to a query from Senator O'Connell regarding the number of complaints received from consumers statewide, noted in fiscal year 1992 there were about 300.  Mr. Kuminecz stated the role of Consumer Affairs was usually as a mediator.  He noted if deceptive trade practices were involved his department would be involved.  Senator Lowden asked if Consumer Affairs endorsed this bill.  Mr. Kuminecz replied Consumer affairs would endorse any attempt to improve consumer protection. 

 

Senator McGinness asked if people coming to his department had called the department first or did they come as a last resort, perhaps after

having dealt with dealers a number of times.  Mr. Kuminecz replied he did not have those figures at this time.

 

Raymond Rodriguez, Nevada Legal Services, Inc., came forward to testify in favor of the bill.  Mr. Rodriguez noted that he was empowered to speak on behalf of Washoe Legal Services as well.  He went on to say he felt the bill did need fine tuning, but did think it was a step in the right direction. 

 

Next to testify was Daryl E. Capurro, Nevada Franchised Auto Dealers Association, who spoke against the bill.  Mr. Capurro stated a few years ago, he was a participant in the writing of the original new car lemon car bill.  He went on to state S.B. 383 was similar, but would have a vastly different impact on used car sales.  During a detailed discussion explaining why his organization would not favor this bill, Mr. Capurro presented Exhibit D an example of a Buyer Guide.  Mr. Capurro was emphatic in stating:

 

      The one thing I can guarantee you is the net result of this bill is to drive up the cost of used cars, substantially, and drive down your trade in value of a vehicle when you trade it in.

 

Mr. Capurro went on to note that a large number of used car sales were made by private individuals, who would be exempt from this bill.

 

Lewis A. Ewert, Owner, Reno Jeep Eagle and President, Nevada Franchise New Car Dealers Association, came forward to testify in order to clarify and answer several questions raised by Senator Brown, regarding the sale of cars with severe mechanical problems.  Mr. Capurro, and Senator Shaffer joined the discussion. 

 

At 10:35 a.m. the meeting was adjourned for 20 minutes to enable the committee to attend the senate session.

 

Senator Townsend reconvened the meeting at 10:55 a.m.

 

Mr. Ewert opened the meeting by reiterating his opposition to this bill.  He went on to state Mr. Capurro's testimony expressed his organization's feelings regarding S.B. 383.  He further stated he thought there was a good chance that most complaints, mentioned earlier, would have been resolved by now.

 

Senator Brown asked if Mr. Kuminecz if he had information involving resolution of complaints.  Mr. Kuminecz said he did not.  He did point out that the Better Business Bureau, or the Department of Motor Vehicles and Public Safety might be better able to have this information available.

 

Cindy Clampitt, Executive Assistant, Registration Division, Department of Motor Vehicles and Public Safety, State of Nevada was next to testify.  She stated she did not have any information concerning repairs, or complaints.

 

Don Hellwinkel, C.O.D. Garage Company, was next to testify against S.B. 383.  Mr. Hellwinkel then noted his reasons for this opinion.  A discussion ensued between Senator Brown and Mr. Hellwinkel regarding his method of handling problems with used cars that might be sold. 

 

Fred Fayeghi, President, G.M.F. Motor, testified in opposition to  S.B. 383.  Mr. Fayeghi gave numerous reasons why he opposed this bill. 

 

Richard West, President, Jones-West Ford, Jones-West Mitsubishi, was next to testify.  Mr. Jones addressed the problem of someone buying a used car who might be living out of the area.  The car has need of repairs, so it is taken to a mechanic, out of the area and a year later is brought back to the original seller of the car with receipts for these repairs and a request for reimbursement.  He went on to state he was definitely against this bill.

 

David L. White, Elko Automobile Dealers Association, who stated his organization was opposed to this bill was the next to testify.  Mr. White stated numerous reasons for his opposition.

 

C. L. Trahan, Sales Manager, Fletcher Jones, Inc. testified that according to his figures, if S.B. 383 would pass, an additional $600 dollars would have to be charged on each car sold as a used car.  He went on to say he was totally against the bill.

 

Ben Scott, President, Scott Motor Company, stated he did not feel that S.B. 383 would help the consumer.  Mr. Scott was opposed to this bill. 

 

Fredric W. Harrell, Nevada Motorcycle Dealers Association, spoke next, stating he felt motorcycle dealers would probably be included in S.B. 383, since there were no exemptions for motorcycles.  Mr. Harrell testified his organization was against this bill.

 

Don Cralle, Better Business Bureau (BBB) of Northern Nevada, testified his office had all kinds of information for prospective buyers that could help choose a reliable used car dealer.  He went on to note that many complaints were referred back to the dealerships, since in most cases, they were very cooperative and anxious to satisfy customers.  Mr. Cralle stated the BBB often would handle any disputes through arbitration.

 

Richard Saling, Diamond Motors & Pawn, testified his organization made every effort to have a satisfied customer.

 

Senator Townsend noted the subcommittee for S.B. 383 would be chaired by Senator Nevin.

 

There being no further business, the meeting was adjourned at

11:50 a.m.

 

 

 

 

 

 

 

 

                  RESPECTFULLY SUBMITTED:

 

 

 

                                          

                  Beverly Willis,

                  Committee Secretary

 

 

 

APPROVED BY:

 

 

 

 

                                     

Senator Randolph J. Townsend, Chairman

 

 

DATE:                                 

??

 

 

 

 

 

 

 

Senate Committee on Commerce and Labor

April 23, 1993

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