Insurance & Commerce - Senate

If Who is that? Is that messy? Me see your dogs barking. So if it's all right with the members, I'm just going to have the presenter just passed us because it's a long ways down there. Is there anybody you want to bring to the table with you? Unless I've got. OK. All right. It's Senate Bill 48, uh, just introduce yourself and you're welcome to begin. Senator Justin Boyd, Senate Bill 48. This law is just a good consumer friendly bill. All it does is it clarifies the need to put policy deductibles on the declaration page, which is usually the first page of an insurance policy. It's kind of the insurance summary, and it clarifies that it's for owner occupied residential property. So This is not for, uh, you know, people who have investments in properties per se. That's insured in a different way, but if it's Justin Boyd and I own a house and I'm living in that house, then it requires those deductibles to be on the declaration page, all of them not hidden somewhere else in the policy that Some people might not so readily see. So it's, it's good, good for the consumer and this is good consumer friendly legislation I know of no opposition to it, Senator Flowers. Thank you. Thank you, Senator Boyd, for bringing the bill. I don't oppose the bill, but you did amend it. And the other day, did you not, and you took out, you put in owner occupied and my concern is, and I appreciate that because as an owner of a residential property that I live in, I do want to know what my deductibles are. I think the insurance company I deal with lists those anyway, but you had some uh I have concern. About those persons who lease properties for residential purposes. And it seems like they always get the short end of the stick. And I think they should have a right to know what deductibles are for properties that they insure. Uh, that they leased as as residential spaces. I'm not sure if that. Is done obviously it's not, I don't think, I don't know, maybe somebody in the insurance. Uh, department kit. could say, but it just seems That the people that Don't own. Well, it seems like you've got to own something or you got to be a corporation to get the benefits of disclosure. And know this and I just, you know, I'm going to support your bill. But at some point we ought to consider those people that can't afford. To own and one thing I guess this this is covering people that are purchasing a property owner occupied, yes, so that if they got a mortgage on it, it's still covers them, right? It's not covering people who have made investments in properties. Its owner occupied, so to address this, this is specific to residential property. What I would say is if you and I want to have a conversation with the insurance commission. about rental property like renter's insurance. I say we have that conversation, but that's not the intent of this legislation. This is intended to fix a specific problem that happened in Arkansas that there's no need to get into details about, but we just want to make sure that owner occupied people have the ability to see right front and center of what it is. Thank you. Thank you. Is there any other questions? Seeing none, there's nobody written down to speak. For against the bill, is there motion by Senator Irvin, seconded by Senator Johnson, all in favor. Say aye. I'll oppose like sign. Thank you, Senator. So we'll pass over Senator Johnson's he's got a House amendment. It should be over here pretty, pretty quick so we can put him at down the calendar a bit. Next is Senate Bill 94. Senator You want to come up here? I can't, I can't handle that. That's the question. Can I ask a question? Yes, and Senate Bill 77, are we going to I'd like to have a physical impact from Medicaid. Will that be provided to us? Um It has not been identified by Siegel. They usually pull those ones that, but that's, but that's not for Medicaid. I'm Seagull is different. That's on employee benefit division and state health plan. I'm, I'm speaking about Medicaid. Senator. Do you know, have they given you a fiscal that I, can address. As a sponsor of that time, it should actually be, you know. positive. I think because I can reduce cost. Yeah Too, but I, I don't have any outside. OK. OK, well, I just I just thought it would be good for us to have Medicaid, look at it and get a fiscal impact if they could do that maybe we can, maybe we can hear it and you can, you can check on that if the amendment gets here we'll check on it with. I just good information to have. Thanks, thank you for your indulgence, Senator Dotson, if you can introduce yourself. Is there anybody you need to bring to the table with you. Not at this time. All right, you're ready to go. Thank you, Mr. Chairman. Senator Dodson. Presenting Senate Bill 94 here which regards ATV vehicles and the requirement that's currently in law that requires any new ATV dealer to have a service center on premises or at their location. What this would do would add an exception to the motor vehicle statute as it currently is that says that an ITV dealer or new low speed vehicle dealer. is not required to have a dedicated service center and parts area inside their building or structure where the dealers established businesses conducted or perform repairs and warranty services on a motor vehicle at the licensed location, so it expands the ability for dealers to to have More options and give consumers more choices in where they buy their vehicles and, and it's a good free market piece of legislation currently Arkansas's only one of two states that has this restriction on our ATV vehicles and when this was presented to me, I thought this would be a great addition to give more consumer choice to the marketplace. Give availability of businesses to have more options to sell to consumers and customers in their locations, so we weren't happy to try to answer any questions. It's not a long bill, but I think there's going to be some opposition to it, so, so Senator, this This pretty much lifts the ATV and slow motor vehicles from the motor vehicle code and treats all Dealers of new products the same, right? Correct, yeah. Go ahead, Senator Flowers. So Uh I heard what you said about, you know, the marketplace and all that, but you know, I'm concerned about whether There are Sufficient Businesses that do repairs. To these ATVs or uh I think that's what you're talking about. I saw something. This is not the UTV, said EVs, but you know, I'm just concerned because the workforce is not producing a lot of mechanics. And personally when I buy things and I haven't bought ATV, but you buy things uh and they break down. And you have a warranty and you don't know where to To get the warranty, uh, Activated or you repairs done under the warranty. It costs the consumer so much to go out and find a place, and it seems to me the ATVs, I haven't seen a lot, but we have some in my district. And I don't know that they don't do their repairs at those at that dealership that I see all the time, but I just think it's, you know, the consumer, you talk about the consumer spending money. Uh, for one of these vehicles. Seems to me like they ought to be able to know where their uh warranty is going to be satisfied if the thing breaks down. I just think that's fair, uh talk about free market. But I mean how much dumping are we going to do on the consumer in terms of the approach of a product. They have a warranty. Sometimes you have to buy the warranty, and you still at a loss and then you might find out that It could be that it be cheaper. For you to buy another one than to try to figure out how to get the warranty, uh, service, so what's your response to that? Do you, do you concern yourself with people that have spent big bucks. On these vehicles. And they can't find a place to get them service. Well, with, with any type of out. Purchase that you make, whether it's for a car, truck, ATV, lawnmower, whatever type of purchase that you make there is an entirely an option for a dealer to do the servicing on it, or I don't know, I generally take my car to a friend of mine that knows how to fix cars, and is significantly cheaper than some other places, but I shop around when I do my vehicle maintenance same thing is true with all trained vehicles, I would imagine if, if you are able to buy a new one for cheaper than what you can get it. service, that's probably not going to be the case on most of these things. They're designed to be repairable, but there are going to be Uh, anything from actual dealers that have the service center for warranty repair work to mom and pop shops that do repair work on any of these types of vehicles in some cases, if you buy your your lawn mower say it. Walmart, like I generally do, it's oftentimes cheaper to go buy a new one than it is to deal with warranty and service after after a couple years or a couple seasons using it so I think the consumer has that choice, and that's kind of the design of the free market, and that's why I'm bringing this in front of you as, you know, if you want to go to a dealership that has a service center in their location. You have the freedom and the flexibility to do that. If you want to go somewhere else that doesn't have one. You, that's, that's your consumer's choice there, but the state government should not stand in the way of the free market and the ability for businesses to invest in products that consumers want to buy, and if they're not selling them, they won't be carrying them for very long, and they'll move on, but that's, that's kind of the free market is allowing the consumers to make those choices themselves, allowing businesses to offer the products and if they can make money off of it. They stay in business if they they can't, then they, you know, they go do something else, so That's what the purpose of this bill is for. Uh, yeah, just, just a second. Senate Senator Boyd, and then I'll come back. Is there anything, Senator Dodson, that would limit one of the repair shops, say it was associated, you know, to start. repairing other other brands is is there something that just says they have have to. Is there something in their contract? I don't know enough about the market and it's a legit question. I'm just there's nothing in the statute or anything that would prohibit a dealer service center from, say, say entity A over here sold it a ATV that they did not have a service center in their location under this new change and They wanted to go to entity B to provide warranty and service repair work and everything like that, then absolutely they could they could certainly do that and if they wanted to charge an extra fee because it wasn't sold there or something. Is there anything in statute that you're aware of that would not that I'm aware of from charging an extra fee if if the market wanted to work that way. That that is, that is in essence the free market. Thank you. Thank you. So Guys, if it's OK with y'all, y'all don't have to stand up. We got all these seats. Come on, come on up, feel from the back to the front if you would, or Y'all want to stand up. OK. The back Um Senator Flowers I just wanted to follow up. I mean, When you look at the uh Geography of the state of Arkansas and where You have more places that are selling these vehicles, you know, it might be fine in your area to find your special mechanic and all. Senator Flowers, we can't hear you can't hear me. I'm sorry. Normally I speak too loud. But I'm just saying in different parts of the state. It may not be. A lot of access and availability of mechanics. And if a place is going to sell, especially in rural areas, because a lot of these ATVs approaches and used in rural areas. And A lot of people are not mechanics. You don't know. This has been under the motor. Vehicle Part of the code. And I don't understand why if it was placed there. Why are you trying to make an exception. To its placement and to the requirements that when you buy something new, Uh, from a dealer. They can't honor their own warranty. That that just, that just doesn't seem fair. And it doesn't take into consideration. All the hoops The money That a person that has purchased one of these things has to go through to get a new vehicle. Repair. It just I, I just I don't see that as favoring. Uh, you know, I can think of. Like, and there's so many things with with these new vehicles. That The mechanics That I grew up with. I'm not familiar with all the little Nuances in the Specs that have developed with these These new products. And so that makes it even harder for a consumer that's purchased something to find somebody. To fix it. I just, I just think. That I'd like to know. Why? If it's the case for HEVs that you want accepted. From having a repair place at the dealer. Why not for every car. What's next, you know. Are we going to be buying these cars and And they're defective or dysfunctional and And I know we're not putting all new cars in here, but I'm just saying what's next if you can't depend on a dealer that sold you something new. To honor the warranty. For a vehicle that's going to be on the road, so I'm just saying you go ahead and respond. It wasn't finished with my question, but you go ahead. So I just want to be clear when we're talking about all trained vehicles we're talking about things like 3 wheelers, 4 wheelers, that sort of thing, not SUVs. Like, like, OK, so I mean you were talking about new cars, cars, and so this is, this is changing the section of code under motor vehicles. It didn't specifically mention all terrain vehicles prior to this. This particular piece of legislation and it's, it's making a distinction that a new car like a Ford truck or Ford dealership, Chevy, things like that that are motor vehicles. There's a distinction between that and all terrain vehicles that are, you know, 4 wheelers and things like that. So it's not a motor vehicle, is that what you're saying? It's a motor vehicle, but it's I think probably, and I can't speak to how long this has been on the books in Arkansas versus other states that have this distinction because, you know, we're only one of two states that do. This has been lumped in under motor vehicles as kind of a catch-all, and this is simply separating it saying that a car dealership service center, new car dealership, things like that. That's, that's different. That's a motor vehicle, but And ATV or all train vehicle, your four wheelers side by side, things like that. That's where the distinction is that you're not going to go down to the to a You know, Lowe's and Baa new F-150 off the off the off the floor, and we wouldn't expect I think you missed my point. It's a motor vehicle. You acknowledge it's a motor vehicle that Senator McKee. Thank you, Mr. Chairman. Senator Dodson, is it possible that this legislation would open this altering vehicle market up to people at a lower price point who would not normally have had access to that market. I think it's entirely possible more competition typically allows for a fuller range of services to be offered and generally at a cheaper price and increasing quality because people have to Have to be more competitive with the offerings that they have, so yes, I think it would. It would definitely open up the range of products available to consumers and if we create, if we open up that market to those individuals who wouldn't have previously had access to that market, and they need vehicles fixed. Is it possible that a market will develop to fix those vehicles. I would say yes, whether it's, it's other local dealers that are doing that or mom and pop shops that are that are popping up to be able to service the fuller range of products that are out on the marketplace locally. Senator Mark Johnson. Thank you, Mr. Chairman. Senator Dodson, I think that Senator Flowers kind of brought up a point that I think maybe needs some future clarification. It appears, and I don't know this, it just appears that when this these things came into existence, and I can remember when they didn't come into exist. They just, they started popping up. First they were 3 wheels and then they weren't people didn't like those. They had some safety issues, and then the 4 wheels, but they were stuck in the motor vehicle code, and I'm not sure that that's the same thing as what we think of. Cars and trucks and and and that's when you say motor vehicle, that's what I think of, uh, do you know of examples where we force someone that sells a product to actually service it. I mean, we, I think of things that I buy computer, for example, I buy a laptop computer. Well, you know, I can buy it from a place that has a service department, you know, like Best Buy. They have the Geek Squad or whatever like that, or I can buy it from someone that will sell it to me and Someone else up to and including a entity identified or authorized by the manufacturer to provide that kind of off-premises service. The fact that the language in this bill talks about maintains adequate space in the building or adequate facilities to perform repair and service work. I mean, I, that's what I think of a definition of a car truck dealer, not a basically a toy, and I know you do work with them and I know our chairman probably has one on his farm that certainly does work, but The point is that this is more of a fun thing and not what gets you to work and back and get your kids where they need to be delivered. So without Trying to pigeonhole you into what you need to totally over rewrite this section. I think, would you agree that it's this is more akin to a consumer product as opposed to what we've traditionally stated as motor vehicles and again, as you mentioned, opening up opportunities and Senator McKee also that for maybe someone that would provide this kind of service independently. Is that a possibility? Yeah, I think. to your point, there are various uses for for different types of products, and I think probably the thing that's most closely related would be something like lawnmowers. You can go to to, you know, Walmart, Lowe's, Home Depot, wherever you want to go, and you can get a push lawn mower or you can get a at various times I've seen a John Deere rider in there and they don't necessarily have the service center right there inside their facility where you, you switch over and if you're going to use it on the farm, you probably don't want to get a John Deere tractor from. From Lowe's or Home Depot, you're going to have a service center and go to the dealer and all that kind of thing. So but that is the consumer's decision. I, I definitely participate in the lawn mower thing. I have a very big diesel 60 inch. Zero turn lawn mower and I do, I have had it gotten parts and had things done from the it's a grasshopper from a grasshopper dealer, but I also have an excellent independent shop just a few miles from my house that that can can maintain it as well, so this probably more analogous to those, you know, larger lawnmowers than it is to a car, would you think? All right, thank you, sir. Thank you, Mr. Chair. Senator Ervin. Do it, we don't, do we require used car dealers to have dedicated service and parks area. You know, I don't believe so according to this section in code. If you look on page 126. It talks about a license for a new motor vehicle dealer, and so this is, I believe, only a requirement for facilities within new New motor vehicle dealerships. OK, thank you for the cur. Senator Flowers Since you mentioned line 26. This is ATV, and ATV have to be licensed to the. BSNA I couldn't answer that. I don't know for sure. I don't believe they do, but Well if they don't, why are you even bringing this? Because right now the motor vehicle commission Um, I believe is the one who regulates this and Under their Current practice, they are saying that That the uh I mean they're they're regulating this industry as as related to new motor vehicle dealers, so This is a clarification in the law that says basically all trained new all train vehicle dealers are not. Um, I guess. They must somebody must license the new all train vehicle dealers themselves, dealerships. I don't know if it's DFA or I think that's the juxta of line 26 if this bill passes, I don't think new ATV and the slow power sports will have to be licensed through that, I mean, you're not talking about the revenue office where you license it. No, no, I mean do you do since you've been identified as having a HEB. So, so did you have to purchase a license to get it covered under your insurance, you, you go there and you give them your certificate of origin and you pay your sales tax or the alternative is if it gets stolen or something, it, it, your insurance won't cover it, will not, will not cover it, but I think this is talking about licensing through the motor vehicle. Uh, on that, on this license part of it. For like for license tag. No, no, this is for license to be able to to be able to sell those vehicles. So your ATV doesn't have a tag. No, no, no, no, what I was telling you is the process that you've got to go through to get it covered under insurance. Uh, there is no license, license tag because it don't have the safety options on it to be able to be on the, on the highway. Uh, there are a few that have the blinkers and the seatbelts and and and the mirror, but I don't even know if those are available. There's going to be some folks that can speak to that later on, but I was just telling you about the process of the revenue Office. That's really just for for you being able to get it, you know, the insurance coverage, and I think this is talking about being able to be licensed as a new vehicle, new, new vehicle dealer, so I think this would exempt exempt from that process. Those new ATB dealers. It would be, would be exempt from that process being licensed under the motor vehicle division. There may be somebody here that can speak to that. But and I, Mr. Chairman, if I may, I don't think this exempts them from having the requirement to be licensed dealers just licensed dealers requiring them to have a service center inside their facility. Where they're licensed at so they can still sell them in order to sell new ATVs, they would still have to have the dealer's license, but They wouldn't have to have the service center at that location. OK. I get what you're saying. So, uh, there was Senator Irvin, you already got yours. All right. Any, any other questions? Seeing none, I'm going to go down the list of uh people who want to speak on the bill. I'm just going to go straight down the list and if you would, uh, the folks on the on the list speak, uh, just make your, your statement concise and not repetitive, you know, tell your own story, not, you know, you know, multiple times the same story and the senators can ask questions of you and those responses, so. Uh, we'll start with Mike Johnson, Power Sports. And whenever you get there, introduce yourself and you're welcome. Now sit down and and you got to push the button. He is against. My name is Mike Johnson. I've got a power sports store in Russellville in Hot Springs. Been in business in Rustville 46 years. My opposition to this is Being unfair as a manufacturer that I represent. On service. We have the special tools to do it. Mom and pop store is not going to invest in that. We have the ability to talk with the manufacturer if there's an issue that is a gremlin that is, so to speak, hard to find. We've got the ability to do that. We have parts service, sales. If you come into a power sports dealership, you can walk to the parts department, get the parts if you want to repair it, you can also get advice on how to do that. It's one stop. If you want service, you can walk into the service department at any of our dealerships, the Power Sports dealers here. You can speak with a service representative. You can get an estimate to get it done. You can even get some guidance as to what's wrong with it. Some people choose to try to do it themselves. That is fine. We're not there to make an enemy. We're there to keep a customer. To sell the things we're required to have the facility to educate the people when they buy the machine, the hazards of it, the safety operation, the consumer safety Product Commission monitors us on all these machines. The manufacturer also pays the people to take a safety course which is offered in the area. The consumer is protected by coming through our dealership with a parts sales service, the pre-delivery of the thing, the safety guidance, and the incentive to take a course to operate it safely. I do not understand why the big box stores want to get into this and not follow the rules that we're under when they have so much under roof they cannot dedicate one person to do this. Go into a big box store, try to get somebody to help you. an issue you've bought, it's usually a replacement. They're not going to walk you to the parts counter. They're not going to walk you to a service center and try to resolve the issue that you have competition, we've got competition because there are major lines all in the state of Arkansas and People can shop where they want. But that's about what I've got to say. If anybody's got any questions, I'll be happy to answer them. Thank you, Mr. Johnson, Senator Ervin. Mr. Johnson, could you describe to me um with new vehicles, or I mean new, not just vehicles, but new ATVs or whatever, the warranty process and and is the warranty then just only upheld if it's from, if it's serviced with you as a dealer or just could you just Describe to me the warranty just so that we have it on record and we can talk about that. Just push your button again. I'm sorry. Yes, ma'am. The warranty on the vehicle, if I sell one, they can take it to any manufactured vehicle in the state. If I sell one in Russellville, they can take it to the competitor fellow dealer in Jacksonville. They can take it to Cersei. They can take it to Northwest Arkansas. Any of those dealers, the warranty is valid. Now warranty on the machines, some of the manufacturers offer up to 3 years. They've run a promotion. It's good anywhere, parts and Service A lot of times the, you know, we're we're one stop. You bring it to us, a dealer, we can do everything right there. You don't have to go around. You don't have to search. If you had an ATV of any size, whether you've got in the back of your truck on a trailer, we all have someone that will step outside, help you unload that. Take The issue that you've got with it, contact you later on the repair. You come back to get it, we're going to load it, give it to you. We are one stop. We provide all that services. The big box stores that are wanting to do this, they want to sell it and pretty much be done with it. You don't want to run all over town looking for where's my service facility at. Can you do this? Do you have the part? All the machines that we have, there are special tools to work on those for disassembly if it requires something so simple as replacing a seal. It may be an internal seal. That something's got to come apart, takes pullers to get it apart. We've got that. The manufacturers automatically send that to us. We have training seminars in person and online that we have to take, we have to do that in order to maintain our franchise, OK, sorry, just specifically though about the warranty. So if, but, but the warranty is only with service dealers. The warranty doesn't work if you take it somewhere else to get it serviced. Is that correct? Yes, ma'am, you cannot get the warranty. Keep your, keep your button. Thank you. Yes, ma'am, you cannot get it does not apply to a mom and pop shop, as it's called. It has to go to a franchise dealer. Senator Flowers. So, Mr. Johnson, what I think I'm hearing you say this is a matter of public safety. In terms of the training and and even the upkeep and maintenance of the vehicle. Yes, ma'am. And would you be Could you offer any kind of you mentioned mom and pop. And special tools, and that's what I'm concerned with because what I'm seeing is a lot of vehicles now are different. You just don't change the oil and go or you don't have a straight 6 engine, then you got electrical stuff in there that can lock up on you and all kinds of stuff that a lot of places don't know about, don't know how to repair those things. That's been my experience. Yes, ma'am. Would you agree with that? Yes, ma'am, I would because technology today has sent them all of my technicians have a laptop. We're all the time getting something in that the manufacturer, if there is a recall, they want it reflashed. You've probably had that done if you've got a late model vehicle. There is all the time some update coming out that makes it work better, perform better, operate better that we do. That is all provided by the manufacturer for free. Senator Penzo. Thank you, Mr. Chair. Um, help me work through something. You mentioned, uh, Warranty work, um, I know a lot of the dealerships I don't know how many brands are out there, but Honda, Kawasaki, Polaris come to mind. If you have a franchise dealership. Um, which is assuming how this works, you, you probably have an area where nobody else could sell your brand within that area. Is that right? That's correct. So, so if, if one of these box stores is selling. Uh An ATV would It's going to have to be a different brand than what your mainstream. Is that, is that correct? OK, so Trying to trying to think how to ask this, so if there's different brands being sold. Who's gonna You wouldn't have the right equipment maybe to do the repair work on those anyway. OK, so there Would there be anywhere to fix? These other brand equipments because I mean, if it's a if it's one of these major brands that has a dealership. Um You're going to, they're going to have a place in the state to get their repair work done. If, if it's one of these box stores, is there, they'd have to be a mom and pop shop, right or wrong that it would have to be a mom and pop. I assume that it would have to be a mom and pop store, franchise dealer. I've got no specifications on it. I've got no way to get parts for it, to service it, uh, we're looking out for the consumer. This is where I'm coming from, from my investment, looking out for the consumer. If you have a unit and you bring it to me, if you just want to get the oil and filter changed, do it yourself. I can sell you this stuff. I can give you guidance as to how to do that, where it is located, the capacities, it's in. It's going to be in an owner's manual that you get. People don't normally do that. They, they don't read the owner's manual anymore. OK, so, so the The scenario might be, um, The consumer may be able to get a a discount on a different brand. ATV, but there may not be warranties. There may or may not be a warranty, and there may or may not be a place. A repair shop convenient. I mean, is that the, is that kind of what the scenario looks like. That's what it looks like to me because it, I go back, you've got a big store. They've got no one dedicated for the one thing that they are servicing and selling. We do Any need that you have with your machine, we can take care of it. We have the accessibility, ability to do it under that same roof. You don't have to go somewhere else. We can do it. OK. So it's, it's one of those buyer beware situations where very much so you can, you can. Pay the higher price. So this is kind of a A situation where I'm struggling with it because I'm, I love free markets and, you know, the ability to go by. A different piece of equipment. You know You have the ability to buy a four-wheeler side by side that you may not be able to buy One of the big name brands, so it increases people's access to ownership. But then they might have a situation where they can't get it repaired. And that's, that's kind of a possible trade-off of You know, somebody buying in the market, so I understand the concerns and Um, I just appreciate your time to clarify that for me. Thank you. Another thing to add to that a consumer comes in. We've got multiple finance sources we've got we've got the people who are challenged. We have programs for them to obtain a machine. The people with the top tier credit, uh, A lower credit rate, there's, there's, they can choose a rebate, they can choose a lower interest. Our manufacturers offer a variety of options to get into a machine, uh, an import machine that a big box store sells, yes, it could be cheaper. More than likely it's going to be Chinese, but the consumer is not protected when the consumer has an issue, if they've spent several $1000 on the machine, they can't get it fixed. Who do they go to? Who are they gonna go to? You know, you make it sound in theory that, well, we're gonna have some mom and pop store that's gonna do our service work and provide parts. They've got to go chase someone down to get that done. A mom and pop store, I don't know who knows where you're leaving it. They've got insurance to cover it for theft or fire. All of us do. We have, we have to carry that. The machine is protected while it is there. Thank you. Thank you. Senator Murdoch. Thank you, Chair. Let me ask you this question. So, Will your service department service any ATV that comes to you. are only the ones that you sell. The ones that I sell. If it's a Any repair that I sell the brand that I sell. Let me clarify that. If someone come in with a brand that I don't sell, let's say they want a tire. Let's say they want brakes, and it's a good customer that has one of my units. Yes, we're able to do that. That is not technical to change a tire or to put brake pads on. That is simple. If they want an oil or filter change, I can do that, but I only do it. If it is normally a customer of That has one of my machines already in service with himself. So let me ask that question again and see if you answer it. Will you serve any ATV that comes into your store, whether it's for tires or change or whatever you have the capacity to do with your service team. Will you service any this comes because service is a revenue stream for many, um, I don't know a mechanics that kind of I mean, there are some specialties, but most, there's a lot of mechanics. They're going to service everything that they, they can fix just because there's a revenue stream. Are you saying that you all will not or do not. We will service anything that we have the ability to do. I do not have the programs. If it requires reflashing, readjusting something that is electronic in the computer system. I will not have that manufacturer's program to complete that task. So to do major surgery, you don't have that, but do the the the common task of keeping vehicles moving, you seem to say that you have that ability to do that. I have that ability and we'll do that. I can do that, will do that. Thank you. that Is there any other questions? Thank you, Mr. Johnson. Uh, we have 6 more. Uh, sandy stroke. Against Thank you very much, sir, for allowing us to come and speak. I speak against this bill. It, yeah, Mike's home, OK, uh. Everything that Michael Johnson said that's I'm with, but there's a couple of 3 things that, uh, questions were sort of ask and maybe kind of answered. One thing has to do with titles. In the state of Arkansas, we say DFA says that every vehicle has to be titled. You have to pay sales tax on it at the dealership. And then you have to take all that paperwork down to revenue Office, and you do get a title. You turn that MSO manufacturer statement of origin into a title. Uh, and it was said earlier, a lot of times it's for insurance purposes for sure, but you all are supposed to title them. Doesn't matter. You may never take it off your farm. You may take it and put it on your farm, but by a law in the state of Arkansas, you're supposed to tie them and pay sales tax on them, and the dealers are required by law in Arkansas to, to collect that sales tax. It's a little different from automobiles or even motorcycles are different. And then when we talk about warranty. Uh, there's a little bit of confusion on, I'm, I'm an ex-power sports dealer, by the way, 30 years power sports dealer, and then retired and and worked as the director of the motor Vehicle commission for 5.5 years. Uh, as a dealer, Dealers are required by their sales and service agreement. Dealers don't have a franchise. They have a sales and service agreement with their manufacturer, and they were required by those manufacturers to do warranty work on those machines. So if you're a Honda dealer and you're selling Honda, then you're required to do warranty on that. And would we do service on other machines? Absolutely. It's the warranty issue that's the real problem, because if you're not licensed or don't have a sales and service agreement with the manufacturers to do warranty work on those machines. You cannot, as Mike said, yes, he'd work on them, but if somebody brought in a brand that he didn't sell, he can't do warranty work, and that's the real big issue right there is the warranty, because once they get out of warranty, yeah, there's a lot of little mom and pop. chops around, they can work on those machines, but while they're still under the manufacturer's warranty, it has to be a dealer that has the sales and service agreement with that manufacturer in order to be able to do that work. Uh, and then the other thing that I wanted to just touch on is the price. I, I do understand that is a true issue to some people and there are licensed sales and service signed agreements with certain dealers. With these manufacturers. So there are some dealers around that are legitimate, licensed with the state of Arkansas and have sales and service agreements with manufacturers that sell the lower priced machines. So I, I don't want that misconception that if you're a licensed with the state of Arkansas dealer today that you're only selling the high-end stuff. There are people out there that are legitimate dealers and can do the warranty that are selling machines that are much lower. Chris. Any questions? I'll be glad to answer. Thank you. Go ahead, Senator Flowers. I appreciate your comments and the fact that you used to be over motor vehicle, ma'am. Well, you're the right person to be here about, about this because I know very little. I don't have an ATV. I did buy one of those riding lawn mowers once from loans that every year. After the season was Not such that I needed it. I couldn't. I had to take it somewhere to get it fixed to run again. And that was not uh cheap. But It did have a warranty, just couldn't find anybody to to service it, but you know, I appreciate what you said and, and you helped to make Kind of make me understand about the licensing process of the dealership. are the dealer. Can you go into more detail about that. These things are considered motor vehicles. Yes, ma'am. And so, What does the state require in terms of licensing. As it, I don't know if you see the bill, but This, uh, line 26. On page one. Not to underline. But The applicant for a license as a new motor vehicle dealer. What, what, what is when we If we accept the exception. That the sponsor is is suggesting what, what would happen then in terms of the requirement. Of a license for that new motor vehicle dealer for ATVs. Yes, ma'am, there's a lot more to this law, obviously, than just what's on these two pages, and there are several requirements to be a motor vehicle dealer in the state of Arkansas. One, you have to have a place of business. I mean, you have to have a bricks and mortar place of business. And then you have to have a sales and service agreement with a manufacturer that is licensed by the state. The Motor Vehicle Commission also licensed the dealers, so if you're a General Motors dealer, you're a Chevrolet dealer. You have to have a sales and service agreement with General Motors, with Chevrolet Division of General Motors, and then They have to be licensed with the state of Arkansas, which obviously they are, but some of these smaller Chinese manufacturers, and that's what we're really talking about because these are, are smaller manufacturing concerns that come ship just very few units into this country, but They also have to be licensed with the state of Arkansas. And then you have to have certain other things within your facilities and it has to do with a showroom minimum 120 square feet. Uh, it says you have to have offer warranty and it says you have to offer a place to do that warranty and have parts and a repair facility available. So just to follow up, Mr. Chair. It's OK, I think. But Um, so, It sounds like there's some revenue that the state receives. Plus It seems like the overriding factor of this whole part of the code is for the protection of the consumer. Is that right, I understand that to be the case? Yes, ma'am. So about how much in revenue? Are we talking about here? Do you have any idea? Uh, no, ma'am, I honestly don't. I know, um, I've worked with the Revenue Department with Wayne Hamrick. quite a bit when I was in my position with the state. I know it's a substantial amount of money, but no, ma'am, I really can't tell you exactly how much it is, but I will say this, see that with automobiles, you go to the revenue office and you pay your sales tax. In Power sports industry, if you're selling off-road vehicles and the manufacturer's statement of origin will say specifically for off-road use only. And if it does say that, then the dealer has to collect that sales tax. And they then submit it to the state of Arkansas to DFA. So it is a substantial amount of money. Yes, ma'am. But, and, and I just go back to the point for me, the overriding fact Is protection of the consumer. Now I heard somebody speak of it as if it was a toy or something because it's not on the highway or the regular public roads, but when you've got your teenager out on a rough terrain riding on these things seems to me like the state of Arkansas would. Use extra caution in eliminating uh where these things are are repaired and and getting some kind of uh Warranty or licensure requirement to make sure that the public is protected. Do you agree with that? Does that make sense to you? Yes, ma'am, it does. Thank you. Is there any other questions? So I have, well, I think I know the answer to it, but my mother bought one out of Missouri, and they don't have the same process. And was and bought it from an individual has still had a certificate of origin. So in that case, uh, she gave it to my son, and he had to go to the revenue office and pay the sales tax. It wasn't a dealer. sales tax situation, so I mean that that happens, you know, in those border areas like where I'm from in Missouri's different than Arkansas. So I think we got that cleared up, but is there other states like that around us? Yes, sir. It's, it's different in pretty much every state, it, it happens on not just ATVs and side by sides. Missouri is a great example because my business was in Harrison, so I, I crossed the border quite a bit. I'd have people come in trading with me and They have one rule for UTVs, and then they have another rule for ATVs, UTVs or the side by sides that you sit in ATVs you straddle, and they have two different rules. And so, uh, and then they don't really Make the dealers collect the sales tax, so a lot of times sales tax doesn't even get paid on them in Missouri. Uh, so Missouri is a little different in every state is, every state has a different rule that they go under. I was also a marine dealer for a long time, and boy, it really gets confusing when you start talking about boats and trailers and outboard motors. So yes, every, every state is a little bit different. Thank you, sir. You've been very helpful. Yes, every, every state is a little bit different. Thank you, sir. You've been very helpful. Uh, you know, no other questions. We're going to the next one who is against and I I think it's Brian or Ryan. Carson. Hi, I'm Brian Carson from Cercy, Arkansas with Sunrise Motorsports. We have another location in Rogers, Arkansas. A lot of the things I wanted to touch on have already been covered, but there are a couple of that came up, um, these machines are very expensive, you know, I don't know if anyone has shopped an ATV or side by side or anything that they're looking at sell at big box stores, but they are not cheap. Uh, probably 80 to 85% of these at the end of the day are financed by our consumers. And, um, not having warranty in place, a shop in place to take care of these customers. We see, you know, from my experience, I have 20 years in the business, and these people, whenever they can't get their machine fixed. The first thing they quit paying on is their ATV or their side by side, and they're defaulting on loans because they can't use it. They don't use it. They don't pay for it and they turn these machines back in. It's, it's a common occurrence. Um The second thing I want to touch on, which hasn't been talked about a lot, is the regulations that we have in age requirements. Everyone in our dealership is required to take training on age requirements, and if you walk into my parts department or my service department or you walk up to the receptionist and you say, I need a four wheeler for my 4 year old. Our automatic response has to be we don't oper 4 wheelers for 4 year olds. Can these big box stores Put that in place. Will they have every employee In the business trained on this matter. You know there are major concerns about public safety in this, and, and having your staff trained is very important. So we take it very, very seriously, and this is something that everyone should think about. That's, that's all I have to say. Thank you. Is there any other, any questions? Saying no, thank you for coming today. Next is Seth Maxwell against Thank you. um, real quickly, um, my concern, Seth Maxwell from Doug Reynolds Suzuki and Le Rock have a Power Sports dealership, um, the biggest concern that I've got is, is, um, leading the consumer out to hang. You know, we've seen with the, the, the Chinese manufacturers, um, a lot of us have have been in that business and we've we've had some different products come through. Uh, the one consistent is the manufacturers behind those brands typically do not care about the customer at all. The consumer is kind of the least. It's a push it fast, I get it everywhere we can, and, and go from there and that's kind of the same um Same process here we've seen these machines come in and then you sell it and then the customer is left high and dry with nowhere to have warranty done. Warranty and service to keep your machine operating safely as we'll all agree is probably the number one concern when they come into our store. We're concerned that that machine leaves with the correct repair again, we've trained our our individuals and if you throw that to a simple mom and pop store, so to speak, um. who doesn't have the equipment and they can't perform these tasks, you know, the way they should be. They haven't properly been trained, etc. you're, you're really laying the customer out there for, you know, for, for potential hazards, so that would be one of the bigger concerns for us, so that's all I've seen. Thank you. Is there any questions, Senator Johnson? Thank you, Mr. Chairman. Sir, you're a Suzuki dealer. Suzuki Kawasaki, CF Moto, and SSR. OK, CFOto is a European brand, is it not? Chinese manufacturers it's Chinese, OK, um, is it a poor quality product. That's one of the very few Chinese that are actually a good product. We've been to the Chinese now you're a young man, but I'm an old guy. I can remember when someone, if you remember the line in Back to the Future, where the said, Doc, these parts are no good. They're made in Japan. He said, Well, now that's where all the good stuff comes from, right? And I I'm not going to, I'm not gonna defend China. That's not why I'm a Republican senator. I don't defend China, but the fact is that uh I buy power tools at harbor freight, where 5 years ago I knew that it was going to get me through the job I'm working on and then it's probably going to be pitched. Well, now they're selling some pretty good stuff made in China, and I'm just, I don't know that we should dump everything that comes from a particular thing, and you mentioned this CF moto is maybe. One of the exceptions that you know they can build a quality product and I'm, I guess. I'm, I'm a little careful to extend the nanny state within the state of Arkansas to protect everybody from their own stupidity and I, and I appreciate the fact that as in your position as trying to run a business, you've got to weed out the idiot that would put their 4 year old on an ATV and the people that are clearly after they get tired of this thing and those pavement books start coming in the mail, aren't going to make their payment. Which I empathize with you and know exactly what you're dealing with, but I'm just trying to find a happy medium where, yes, we, we protect the consumer, but I can't help but come back to what I had asked Senator Dodson about is why in the world is this in the motor vehicle code because these are consumer products, not like a car or a truck, which I think is a totally different situation, but you know, again, the world changes and the way people buy things, I mean, I presume a A lot of these things you're talking about, you might could buy on Amazon.com now. I mean, I don't know if I would, but I guess Theoretically, you know, you could, so I'm, I'm just trying to find some kind of a way to not, well, we've always done it this way. Well, I think we always did it this way because when they first hit the market, we just said, well, we'll stick them under Mr. Stroop's agency over there in motor vehicle and Sandy, you had to regulate them whether you asked for it or not, so I'm I know what we're getting a little bit off the main subject here, but, but I empathize with you, but I'm just wondering, do you have a response to though that say that we just need to have a little bit more of being educated consumer, and if you're not sure about your ability to tighten that, that chain adjustment and all that, you know, maybe you need to buy one from a a franchise dealer that has the shop in the back to do all that for you. Is that, is that fair to basically have a two-tiered way of looking at it. Yes, sir, and the impulse buyer that goes in and and purchases a machine from one of these facilities, and it's shiny and no one's going to come up front and say, oh well, you can't get service here and, and we're not going to warranty. You'll have to find someplace else to do it unless that customer asks. Well, now that consumer, and there will be a lot of those, they come to all of our stores quite a bit. We have the Amazon machine that comes to us, and that's part of the problem. We don't have the ability to repair that particular machine, we're not trained in it, and there are nowhere to find parts, so we we can't take care of those customers and they are left high and dry, and that's, that's my concern with the box store, you know, they'll go in and make a purchase and then before they can find out there's no one to repair it. There's no one to repair it, so um it's it's a consumer issue for us. That's, you know, they end up coming to our doorstep looking for repair that we can't even send them anywhere because You know, the box stores already pushed them out and there's, there's no one else to repair that machine, so correct. Thank you, sir. Thank you, Mr. Chair. Senator Penzo. Thank you, Mr. Chair, and this, I don't know if this is a question you can answer if you can't, we'll, we'll leave it up to the bill sponsor to answer at the appropriate time, but You mentioned there, they may not warranty it. That's, that's probably my biggest concern, because I know that when I go to a big box store, they always offer the warranty. Um, I don't ever, uh, I don't know that I've ever bought an extended warranty through a big box store because the reality is the burden's on me to figure out how to get it where, um, you know, I just If Do we know if the big box stores will offer warranties, and if so, is there going to be any kind of arrangements made locally with any kind of dealership or mom and shop pop to uh fulfill that warranty if if the if the buyer needs to uh exercise a warranty if there's any kind of issues. That's, that's probably my biggest concern is selling a warranty or providing a warranty, and then the consumer can't exercise it. Now if I buy something without a warranty, I mean, that's That's the, the free market, you know, because if, if I make that choice myself, and there isn't a warranty, I just would hate for somebody to buy a warranty, and then they're like, you have to pay for shipping to get it to this location to do it, so that that's something I'd like to kind of work through whether you can answer that or the bill sponsor may have an answer, so. We can start with you. Excuse me, manufacturers are required to have a warranty on their, their, their power sports machines, so I'm sure those machines out of, out of a box store we'll, we'll have some sort of warranty and, and that's, I guess that's the clarification or the issue that I have is where are they going to go, you know, that that's the whole point of of what this bill, uh, you know, has that's being struck is we're required to have those facilities so that that customer's not left out with with Nowhere to warranty a new machine, you know, 20 miles in and this machine breaks down again, let's be honest, we're looking at inexpensive machines, and we've all been through it. There there's usually multiple issues with these, and so now you have this vast array of customers who might have issues with brand new machines they've paid for and nowhere to go to have a good licensed technician work on the machine, keep it up to par safe. OK, yeah, so that that's probably one of biggest concerns, so I don't know if we need to look at maybe um if, if you do offer a warranty, there has to be, I, I don't know about mandating somebody to have an on-site facility, but at least have a contract with somebody within a so many mile radius or something of a of a box store that they have a contract with to do warranty work, something like that would alleviate a lot of my consumer protection concerns, but, but uh I don't know that I would, I think anybody should have to have the, you know, that, that might be a good idea to add. I mean That's, that's my concern is having a warranty and then the only place you can fix it is a dealership in California. Well, how am I going to get my product there to get repaired, so that's, you know, we might, we might want to consider something like that. That's just my two cents. Thank you. Thank you, Senator. Thank you for your testimony. Uh, we're going down the list. Next is uh Steve Good. For Good morning, Mr. Chair and members of the committee, thank you very much. My name is Steve Good and I represent the Arkansas retailers. Um, I, I appreciate all the questions so far and I'll certainly try to get to all of those. Uh, I want to just start off by saying that You know, we represent pretty much all the retailers throughout the state, grocery, you know, a big box supercenter throughout the state, we represent them. Uh, the reason this bill was was even brought to my attention was that there was a retailer that made a substantial investment in Arkansas a few years ago, uh, almost $200 million they created 500 new jobs and, and when they came in for their ribbon cutting to announce the new jobs to open up their new distribution facility. Some of their management team went out and did store tours, and when they were out doing store tours. One of their management members noticed that, you know, they, some of the items that were going to be actually distributed through this warehouse in Mael weren't being able to be sold in their Arkansas stores. And, and so they ask, you know, why, why are our UTVs, our ATVs not in our stores today, and the answer was, well, because there's a law that says you must have a service center. And so, you know, here's a company that's made a substantial investment in Arkansas. The they're employing 500 people. They've got retail locations throughout the state. And yet because of this service center requirement, they're not allowed to sell in Arkansas brands that they sell throughout the nation in other in the other states that they're in. So that's the first point I'd like to make. The second point I'd like to make, Senator Penzo, you had a question on warranties and, and throughout the nation where they're in other states, yes, they do have authorized dealers that that are in those states that perform those warranty works for them throughout just a cursory search here in Arkansas, even though they're not able to sell the brands in Arkansas already, uh, just a cursory search in Arkansas, there are locations located throughout the state, you know, from as far north. Northwest is Fort Smith to as far southeast as McGee from as far north as Harrison to as far south again, there's several in Hot Springs, but located throughout the state, there are already service centers that are authorized service centers today to perform warranty works on these different brands that these retailers sell. So to answer your question, yes sir, they're already here and and our thought process would be that as more brand or more units are sold, there will be more authorized dealers that will come online. Um, Uh, there's been some mention that, you know, and again, I appreciate Senator Johnson's, uh, comment on China. You know, I'm certainly not here to defend China either. Some of the brands that our stores sell are made in China. Some of the brands that our stores sell are not. Massimo was made in, and I think Garland, Texas. I mean, it's a, it's a, you know, a Texas made uh brand and in Arkansas that may be being from Texas may be about as bad as being from China, but uh anyway, uh, you know, it it that's American produced product as well. I think that again to talk for it, you know, as you go throughout and you shop and, and you shop at, you know, if you shop at a mom and pop and listen, most all of you know I'm a small independent grocery retailer, as well as we represent clients here in Little Rock, so I, I have set in their shoes, I am the little guy, uh, and so I'm, I'm not here to defend the big guy, but what I am here to do is defend consumer choice. You know, my consumers in Clinton have the ability to come shop with me and my grocery store. They have the ability to go shop at Walmart, or they can drive to Conway and shop at Aldi, you know, the consumers need and have choices when consumers have choices, better services are provided, better prices are provided, better selection is provided. And so that's what our retailers want to do here. Um, Again, I would take you back to, uh, let's use the side, let's use a zero turn lawn mower, which is very popular today. Many people have zero turn lawn mowers. Some dealers, uh, some big box retailers sell. Zero turn lawn mowers. The service and warranty work is not done at those locations. They have authorized dealers, the manufacturers have authorized and signed with dealers, and those warranty services are done at those authorized dealers throughout the state. The same thing will happen here with these side by sides and UTVs. Um I think that that's all I have. Again, I, I would just like to say we, while we appreciate the investment that these retailers have made in their communities, you know, our retailers have certainly made sizable investments throughout the state. We employ countless Arkansans throughout the state. And again, our retailers are located almost from north to south, from east to west throughout the state and that want to sell these brands. So I think that's all, Mr. Chair, and listen, somebody has some questions for me. Senator Penzo. Thank you for kind of clearing clarifying the warranty work, um. Now in other states where this is taking place, is that by choice or by statute? Senator Penzo, I couldn't answer that. I just know that, that the restrictions in other states are not as restrict as what we have here in Arkansas on that. So, uh, you know, one of the, one of the points was I think, uh, uh, uh, a governmental relations person ran into Senator Hester at a leadership conference somewhere, and he pointed out to Senator Hester that, you know, our restrictions on our in Arkansas are not are more restrictive than even California, uh, when it comes to selling side by sides. And so, you know, I I can't speak to other states, but I do know that the, that when we've asked that question to these retailers, they've told us that there are authorized dealers throughout the throughout the states. OK, well, like I said before, I'm a big fan of free markets, but also I can't speak to other states, but I do know that the, that when we've asked that question to these retailers, they've told us that there are authorized dealers throughout the throughout the states. OK, well, like I said before, I'm a big fan of free markets, but I also to have a truly free market has to be a fair market. can't give a big box store an advantage over a small dealership. So I want to make sure that if, if I, I would like to see something stating that there has to be some sort of service agreement contract in place. Now this is just me personally. I'm not telling Bill sponsor you this is how it's got to be. It's just this is what I would like to see in order to be more comfortable with it and I don't know if that if that same Courtesy shouldn't be extended to the dealerships because like I said, I have a hard time giving up a chain of huge corporation and advantage over a small corporation on anything. It doesn't matter if it's alcohol. I mean, all these bills come up that always try to push for the corporation to have an advantage over mom and pop, whether it's pharmacies and the little guy gets crushed, so I, I don't think I can get comfortable with this unless there's a little bit more in place. that this warranty work has to be Similar to whether it's a contract with a dealership within so many mile radius, um. That's just personally what I would like to see, so I don't know you can do some thinking on that, find out what you're comfortable with and kind of let me know, but oh yeah, sorry, again today there there are locations located throughout the state and they're not even, you know, selling them here, but certainly that's something that, you know, if Senator Dodson is open to us, you know, pulling that back and having me have my clients take a look at it. I don't think I have any issue, but I would, I would want to leave that up to the bill sponsor and make sure and and he have the votes. I don't know, but I don't think I can get comfortable with it without that. Senator Johnson. Thank you, Mr. Chairman. Mr. Good, let's don't beat around the bush. You're talking about tractor supply. I went to the groundbreaking of their mail distribution center, so I, I, I know we're talking about tractor supply. I go to Tractor Supply. I like Tractor Supply. I also like my neighborhood hardware stores are locally owned. I buy stuff from them too. Tractors plow here off 4:30, uh, I pulled up. I'm looking. They have brand new bad boy mowers. Uh, we're a bad boy mowers made right here in Arkansas. Yes sir, that's right. And there's another manufacturer, Spartan up there in Batesville as well, sir. OK. Do those companies make Oh Products that fall under the category of this bill as well. Yes, sir, they do. OK, but they can sell their tractors fly can sell you 60-inch, $5000 bad boy lawnmower, but they can't sell you this another product made with that same company right here in Arkansas, not under current law today. Yes sir, that's, if you go there and you you buy that lawnmower, then there's somebody that, that bad boy has a contract with that CEO of a warranty problem, you say go to, you know. Joe's over here is our authorized service center. Is that kind of how it works? OK, um, I, I guess this is why I'm having a problem now warranties, and again, I don't know about this product. I do know that there's a thing called a Magnusson Moss Warranty Act. That's federal law. It it has to do with anything, I guess that's sold in interstate commerce and I have to presume all these products fall under interstate commerce. So there's federal law. requiring these warranties to be Honored in. Thank the Lord, the state of Arkansas doesn't have to get in the middle of that and and and enforce that, but these warranties from the manufacturer, uh, the manufacturer has to comply with that, and I I, I, I come back to the whole thing of we've taken this consumer product and we've stuck it in the motor vehicle code, and I don't think it belongs there. The fact that that business can sell a bad boy lawnmower, but they can't sell a bad boy side by side, probably made on an adjacent assembly line with some common parts. I just, I think it's rather, it really begs several questions, but I just want to get those facts and see if I was understanding this. correctly. Did I pretty well get that right? Yes sir, yes sir. OK, well, I don't want to beat this horse and it's up to the sponsor whether they want to change it. I agree with Senator Penzo that consumers ought to be able to get their warranty honored, but what this bill talks about is a facility. It in effects uses the the the car dealer model is you've got a showroom up front, and you've got a shop in the back, and if you don't have a shop in the back, you can't sell these things and I think as long as the consumer can get there what they and the manufacturer must under the law honor that warranty, then it's really not necessary for it to be in a specific location on the same premises as where, where they bought it, and I'm just I'm for the consumer. I think Senator Flowers made some great points on protecting people from from predatory salespeople, but this is, I think we maybe are sticking our nose in where it just kind of violates free enterprise and innovation. on how, how consumer products are are are presented to the public. Thank you, Mr. Chairman. Thank you, Mr. Good. Yes, sir. And Senator Penzo, to your, to your question there, you know, I think if I go back to what Sandy said earlier, the former director of motor vehicles. That, you know, the dealers have to be licensed as well and so, you know, it may be that we don't put it in this code, but it's part of rule that when, you know, after if the bill is passed and we put in rules rules that will be adopted that dealers have to provide, you know, to be able to sell. They have to provide warranty work within a certain mile radius, and I don't know what you would want that to be, you know, again, and again, this was just us doing a quick search, but we found locations, you know, throughout the state, like I said, McGee, Fort Smith, Cersei Benton, Mountain Home. Harrison Hot Springs, Hot Springs, hot springs, Higden Cabot, and so that was just a real cursory search, just real quick. I'm not, we didn't do a deep dive. We just, you know, we punch in the different ones and, and, and find out where they're authorized service center was here. So I think that, you know, um to to Senator Flowers's point, if you look at that, you know, really anything other than probably the Delta is covered the east Delta, you know, McGee would be covered, you know, as far as the Southeast Delta, but that's today and then, you know, obviously, you know, for that part of the world, you'd want to pick up a win or a four city or Brinkley or West Memphis or something in that part of the world as well, but, but, and there may be there already. We just didn't find them as we did a real quick search, knowing that that question may be asked. We're not buying that junk. I'm from over there. Senator Irvin. Just, you know, I think an altering vehicle, I think I just want to say, I mean, from somebody who's a farmer, I mean, we, we utilize this on the farm and it's um it's an important farm vehicle, but um I think about Mahendndran and some of the ATVs that are being manufactured right now that really reflect and resemble the old Willis Jeeps, and they are actually driven on many roads because we do have the law. Well, maybe not legally. Well, they do legally actually we did pass a law that says that you can drive from trail hail to trailhead if it's on a county road or on a road, so we do have that in place and so they are, they are traveling our roads, uh, both legally and illegally. Um, but I mean, you know, when you go to rural Arkansas and my neck of the woods, people are dropping them on the streets. I mean, they really are, and so, um, And that's somewhat enforced and maybe not enforced in some areas, but um it is a little bit of a different uh it's, it's not a, it's it's a different type of a of a vehicle. So I just, I think for clarification, I just wanted to say that we do have in the law that you can, you can drive them on roads from trailhead to trailhead, and so we did make that change. I think it was Fran Kavanaugh's bill, um, that we passed, um, and so I just, I do hear the, the small business owners and their testimony, and I'm, you know, Came into this saying, yes, I'm for the spill, and I, I like the free market approach, but I'm similar to Senator Pino, and I think it's the work of the committee and hearing the testimony today. I worry about the warranty part of it. I really do. And I think that Senator Pino outlined it really, really well, and send her flowers brought up some really good concerns. So did Senator Johnson. And so I just, I, I kind of think that you might want to just Try to work together on figuring out what would be a smart approach because we want to make sure it works for everybody as best we can, and I think Senator Pino has a good point, and I just wanted to state that, um, I think I just wanted to state that, so I think he has maybe I would just urge Senator Dodson just to work with Senator Penzo maybe and and some of the small dealers and some of the dealers in the room and see if you could figure out some sort of an approach together. Yes, ma'am. Senator Flowers. Thank you, Mr. Chair. um, Mr. Good ma'am. Uh You, you mentioned That there are all these repair places throughout the state of Arkansas. Are those Independent repair places or these dealers. Repair that they are, you know, the term mom and mom and pop has been used several times. My, my Google search has probably gone away real quick. Senator Flowers. Give me just a moment and I'll see if I can pull that back up. Um, Right. That's a good. So just a real quick, um, But just Google search. Oh Make sure it's not AI. Yes, ma'am. Yes ma'am. So I'm, I'm gonna, I live in Faulkner County Center flowers, so I've been using a Conway zip code 72032, and, and when I put in for for Massimo Motors, it gives me 5 different locations that, that would be authorized service centers for them in Arkansas. Benton outdoor equipment, bad bad Boy Superstore, Horns Outdoors, Damon's Outdoors and B&B off-road. And those are within 36, 39, 59, 64, and 87 miles of Conway. And so that's just I said what we've done is just done some real quick searches uh for the different brands that that we know that our dealers that our retailers are going to sell, and so that's what comes back to me when, when we punch that one in. So those are prospective if this bill passes dealers. I think they're already servicing that their according to to the official Massimo website, they're already servicing the vehicles here in Arkansas, because again, frankly they have a license to sell those new vehicles here in Arkans. I'm not sure if they're service center centered flowers or if they're selling and I, I know our retailers would get the license here in Arkansas to sell, you know, the just like these, yes ma'am, same thing, yes ma'am, we don't want to change any, any of the, anything other than the service center requirement. You know, we, we, we will still have to get the authorized license that that the dealers have to get, we will still offer the same sales, you know, again to Senator Johnson's point, you know, the warranty work will still be offered at the store. to Senator Penzo, you know, when you go in and buy that John Deere lawn mower at one of the big box retailers today, you're given the option at checkout, do you want to purchase a warranty. And so you, you certainly have that option, no different from if it was bought at a John Deere dealer, you know, you have the option to to buy the warranty there or not. And so, yes, ma'am, we We, these are just the ones that are known today. Well, like I said, I'm, I'm concerned about consumer safety and we're talking about, you know, I don't hate on China, uh, but I do hate a lot of those products that I bought from China that break and then they take them to a repair place and they say, well, it would be cheaper for you to buy another one, you know, I've got video cameras that I can't even look at my videos that I took because nobody can fix it. Ma'am, and but what I'm saying is in asking So Under the law now and what's proposed It seems like The people that are in business that offered the repair at their location under their agreement with the Franchi They're at a disadvantage because there's still going to be required to have that service location. Is that not right? It might not, I think the law would allow them to not have the the service location or not, and I certainly don't know their business model centered flowers, but they said they had an agreement with the franchise, so I mean unless they get out of the franchise and they think they got a good product that they're offering the public and they're concerned about the public and obviously the state of Arkansas at some point when they put this in in law. was concerned, I think we better be careful because when we're talking about these things, I can see children, teenagers. trying to fix something or riding on something and defective product and stuff. I wouldn't want my a child of mine or any of my neighbors' children or anybody in my district's children. On these things that are not protected. Yes, ma'am. It just makes sense to me. Yes, ma'am. We have to be more concerned about people as opposed to a business to me, you know. So That's what I that's my concern, and then we're talking about people's uh the the the state of Arkansas. Fiscally Being impacted. And, and I'm not sure that this would not In some kind of way affect the state of Arkansas. In that regard. We think it would, Senator Flowers, in a positive way, because right now we think that there are consumers that are going out of state to buy some of these brands because they're more economical. And so we think there will be more sales tax collected by by more units being sold. And quite frankly, you know, you talked about the service aspect of it, uh, you know, I, I will speak highly of, of, of, you know, the gentlemen and ladies that are here representing these, you know, I, I buy a brand and come to your, come to your hometown. I come to Pine Bluff. I, I use uh a dealer down there. I bought a brand from them. They provide great service. I come there every year and so that that's the top that I've chosen to buy. That doesn't mean that I won't, if these are available in Arkansas doesn't mean that I won't buy from one of the retailers that we represent, but, but certainly that service work is important and, and you ask the question, will they be required to by the franchise. I don't know their franchise agreements, and I don't know their business models, but I would almost venture to say that they probably net out as much on service work as they do on sales work, and that's just being responsible to me. It's just a matter of being Responsible And caring about people's lives. Yes ma'am. To me, and I'm glad you mentioned and because I knew we had one of those dealerships down there and they do do service. It's a good one, yeah, but you didn't mention them, so I guess that wasn't that other brand that's trying to come in without a repair. It's not. How many, how many, just one, just one second, Senator Dodson, would you like to be recognized. Yes, thank you, Mr. Chair. After listening back and forth and listening to the committee and everything, I think this bill may need a little bit more massaging or at least a little more discussion if with your permission, I'd like to pull it down today, take a look at it a little bit longer and and then we can, we can. Bring it back With if we can come to some, some agreement Senator Dodson, there's two others that would like to speak Greg Donahoe and Rob Gregory. I, uh, you have any objection for for this bill to be pulled down for today and come back to a later day with possible changes. I know, Senator Johnson. Any, any of those two that are still. All right I would, I would think that if it is going to be pulled down and brought back, I'd like to see a fiscal impact. From DFNA on this. It's already been testimony that it's it's going to be. Impacted, so I think it's only proven on our part to get that testified by DNA, but it would be, you know, if the, if the sponsor of the bill would like to see if they have any comment that would be, that would be good. But, uh, Mr. Greg Donahoe. The song. Thank you. I'll be brief. The only thing I'm Greg Donahoe with Heartland Hond up in Springdale. Be a dealer 28 years. Honda only in our case. I want to speak on the warranty because I've dealt with this on the power equipment side, directly with like Home Depot selling Honda lawnmowers, and you go check out, you buy your lawnmower, you think you have a warranty, that's all great. The way dealers do it is we warranty register stuff. We do it on a daily basis. our dealership. It's a requirement by our OEMs. That way, if a recall comes out, consumer information is there and they can be communicated and contacted accordingly. You take a side by side that gets rung up at a at a cash register at a big box, no consumer information, no way to let them know there's a recall on this. What kind that is injustice to the Arkansas consumer. I could go on and on about that, and we've seen it happen, but like I said, I'll be brief. Thank you for your service, the great state of Arkansas, thank you for allowing me to speak. Thank you, uh, Rob Gregory. Thank you for allowing me to talk even after you've decided to possibly amend the bill. Let me start from the beginning. Uh, our company, Gregory Polaris. is actually GAG Inc. That stands for Gregory Law and Garden Inc. At the age of 7, I grew up in a lawnmower store. I knew that industry was being destroyed. Once the big box stores were allowed to have lawn equipment. And it did. So, if you study that industry, it destroyed. That industry a prominent dealers and service for the consumer. And so much of what The big box stores sell is what we refer to as tongue depressors. Use it, throw it away. That's doing no justice to the consumer. When we talk about the brand that TSC is trying to bring in. He mentioned Texas. It's only a symbol in Texas. All the products come from all over the rest of the world. Vietnam, China, things of that nature. They avoid the terrorists by not sending it in as a whole unit, as similar in Texas. They do offer, it does come with the manufacturer's warranty. But if it was that great of a product. Every dealer here would sell it. It's a very inferior product. We talk about the safety not only do our dealers know the safety laws that we're under federally. By a product safety commission. We are also sell Safety equipment, helmets, all of this stuff. For the young children. That'll be So you're not going to regulate, there's there's no way they're gonna be able to regulate the age of the people that are going to be riding on this and the safety aspects of someone being injured on this. Uh, when we talk about The warranty Polaris. So let's go with another federal mandate that we're going EFI fuel injection. We're getting away from carburation. And you're gonna have 26, 28, 32 mandates where all of this smaller equipment, whether it be lawn equipment or not, it's gonna go feel injected. And a lot of that stuff, 25 horse and above, so far has already been mandated to be fuel injected. In order to work on a fuel injected machine, you got to have a laptop. How much, how much does that cost? How many texts do you? have And then let's talk about the program. Polaris's program is $2000 annually. Your mom and pops can't afford that. The mom and pops, the 5 or 6 that are in the state are mom and pops that are trying to find something that they can sell, that they can afford to sell, so Massimo has come to them because of this. Agreement with TSCs all over the nation. Um, and Those dealers, once we go EFI, they will, they will not be able to just be a warranty center with the expense of the required tools. And the electronics that are needed. And this is a huge consumer issue that if you do this, you're allowing them to buy and pay good money for tongue depressors. I'm talking about the uh uh title process. The titling process, uh, with us is going to do the recall information. There's many times, 567 years later, there's a recall on the unit that is a safety recall. It's not a recall because it's not working. It's a safety recall. TSC no longer handles that brand, that brand is gone. Because it's inferior. If it was that great of a product, they wouldn't be trying to sell it at a big box store. The tiling process is you buy the unit, we provide a certificate of origin, you're supposed to go to the state of Arkansas and get it. Um entitled On the day that you buy it, Most people are going to insure it because of the expense of it. But they're not insured. Liability wise or theft-wise until the titling is done. Is TSC going to tell them that? No, they don't have a clue. So, One of these units is gonna get somebody hurt. They're gonna have purchased the Insurance because of the expense of it, but it's not gonna be covered in any way, shape, or form, because they don't know that they've got to go get their uh registration done with the state of Arkansas and and the state of Arkansas is also going to provide a sticker for the game and fish commission that shows when it's on public lands that that unit has been Registered properly with the state of Arkansas. Any questions? Thank you, sir. Senator Dodson. You recognize? With permission of the chair, like I said, I'd like to try to pull it down. I said with the permission of the chair, I'd like to pull the bill down for today without objection. Thank you, Senator Dodson. We're going to go to Senator John Johnson, uh, Go back to Senate Bill 77. Should I stay here, Mr. Chairman? OK. Thank you, Mr. Chairman. I have an on just a minute. There is, they're gonna pass out the amendment. The amendment is just adding a house sponsor. Thank you very much. We're going to adopt it. Getting gross. Well, we won't. Tomorrow, have it on the no. I'll bring it back next week after we. Right, you won't, OK. We just need to do it as That a Whatever the recommendation of staff is. You can, you can do it. Yeah, this is just adding Representative Mayberry as, as a, as a House sponsor. Yeah, we can do that on members whatever your preference is if you want to check on the possible impacts and that that's, I don't think that's gonna be that may be necessary, Mr. Chairman, but not to get this amendment out. Yeah, if you want to, if you want to get the, sorry, it's OK, then we'll just, I'll just do it members. Thank you, Senator John. Thank you, Mr. Chairman. Uh, we have one other bill, Senate bill 133, Senator Boyd, do you want to I'm gonna be fast. All right. We, we will do what we can do. If we have to, yeah. You reckon? Thank you, Mr. Chair. So, uh, last week I presented Senate Bill 47. This is a rewrite of that. It's the same language minus the amendment that we adopted last time I had a miscommunication with someone we did not need the amendment, so I just withdrew that bill and Senate Bill 133 is the original bill. So my testimony is not changing from last time. It all does the same thing it did before. It's all about clarifying and putting a speed bump in place. with the state of Arkansas to say we don't want to participate with central bank digital currency. The Trump White House has come out and said we're not going to do this right now, but that doesn't preclude somebody else from another federal administration down the road from saying we want to invade people's privacy. So that's really my my testimony, the banking association people are here if you have concerns or you have need some kind of clarification. Uh, they provided a nice handout to talk about. exactly what central bank digital currency is and why it matters to your community and your community bank. Members, this has been debated the Maker's Association would come to the table. Yeah. For the, that's you. Come to the table. Just right there where you're at is fine. This recognize yourself and we'll see if there's any questions. Laurie Trogden, president and CEO of the Arkansas Bankers Association. Is there any questions, Senator Flowers, and then Senator Murdoch. Good morning again. You know, I'm trying to understand all of this stuff, this phrase digital currency, crypto, and I did. Do some research since we were in here last, you weren't here. And I came across the title of a of an act, the Emmer. At E M M E R. That precluded digital currency from something I forgot now because this has been several days ago, so a whole bunch of things run through your brain and you kind of. But I don't understand what digital currency is. In Senator Boyd's bill, it's quite clear to me. That It should not be labeled money. But what is it? And what is it used for now if it's used for. I asked him also about the Federal Reserve and the mention of the central. Uh Banks central bank. Um, central bank digital currency, which I saw a blurb on my phone. Yesterday about the Federal Reserve authorizing some I think it was crypto. I'm not sure, but they authorized something to be used. And I don't, I don't, I'm just not understanding digital currency. Is it something we use? To pay a credit card, does any government agency recognize it as payment or something now. Can you help me? I think I will try my best, um, so I think it's in the background that I gave you the Biden administration asked the Federal Reserve, which is also the central bank, they are one and the same. People use that name interchangeably, central bank, Federal Reserve, um, ask them to do a study on possibly creating a digital currency, so instead it would be backed by the US dollar, but instead of you, I think Senator Roy did a good job instead of you walking into the bank with a $1 bill, you would have, it would be just a digital dollar, um, crypto is not backed by the US dollar, so that's set aside over here. It's, it's entirely different thing, and I think what you were referring to with the Fed announcement yesterday was they held interest rates and Jerome Powell remarked that he thought banks could deal with crypto if they can do it safely and soundly. It was kind of a remark. They didn't authorize anything necessarily, but cryptos over here are completely aside. So right now, Money moves electronically, so your dollars, if you go into the bank, Senator Boyd gave you a check off his bank account, you bank at a different bank. You go deposit that check. They moved the mono, the money electronically across a payment rail. So That exist a digital currency would be an electronic dollar that is backed by the US dollar that would move or I'm sorry, a digital dollar that is backed by the US dollar, that would also move electronically. So that's why you'll see in the paper that I gave you, the banking system doesn't think the industry doesn't think we need a CBD CBDC being central bank digital currency. We don't believe that we need a CBDC as the Fed was looking at it because money already moves electronically, so in essence, this is a digital dollar instead of holding a dollar bill in your hand, you have a digital dollar that lives online in the Federal Reserve Bank the fit, well, it, it's not here right now, the Federal Reserve did a study, and that's all they stopped right there and said we can't do anything else until Congress authorizes us to create a digital currency. So right now there is no digital currency being used anywhere. For anything. China has talked about creating one, but that's outside of us, so right now there is no digital currency in use. As far as a central bank digital currency goes. And, and Well, can I follow up? As Senator Boyd has related to us he considers this piece of legislation, a speed bump to prevent Arkansas from Uh Being a part of it if Congress or the Federal Reserve or if Congress allows, I don't know how that works if Congress has to allow the Federal Reserve to recognize digital currency or does the Federal Reserve on its own have the power. To authorize digital. When the Federal Reserve did their study at the end of the study, they said they felt that Congress had to be the body to create a digital currency, and of course then Congress would mandate that they actually do the work to create the digital currency, but Congress has to authorize it, and Congress has not authorized anything, so that's why there is no digital currency in existence right now. No central bank digital currency in existence. Uh, last question, Mr. Chair. If Congress does authorize this. And the Federal Reserve as this bill indicates. Allows creatine this digital currency. And we have this legislation. In law in Arkansas. How are we gonna be left out of the loop or something, or I mean, what's Am I going to be at a disadvantage of the people of Arkansas going to be at a disadvantage because we cannot And I don't know how that would work because If the central bank, if the Federal Reserve, and that's the question I asked the other day too. Are our local banks mostly under the uh part of the Federal Reserve system. The Federal Reserve is a regulatory body that regulates all banks, yes. So how would that impact consumers in Arkansas. If you have an opinion on that, sure, I would think since since it hasn't been created, we don't know exactly what it would look like based on the study that the Fed did, our as an industry, our opinion is that it is not needed because money already moves electronically. This would, I think Senator Boyd pointed this out. This would take The money, the deposits the money out of the banks and hold them at the Federal Reserve. And so we then couldn't take those deposits and loan them back into the community as credit and so we, we don't think it's necessary if that helps with that question at all, because it doesn't do anything different that can't be that cannot be done with money right now. It's just not a federal, you know, it's not held at the Federal Reserve tracked and monitored and moved around by the Federal Reserve, but money is electronic right now and can move anywhere. at any time for any reason. So we, we don't think there is a need for it, so would we be disadvantaged as Arkansas if it passed, in our opinion, if it passed the way that the Fed outlined it in their study. I don't think we would, we don't think we would be at a disadvantage because we don't find it necessary. Even with this Even with his leg even with it, we don't think it's necessary to create it at all. But if it is, if they did create it, since I don't know exactly what it would look like, I couldn't tell you if we'd be at a disadvantage or not because we don't know what they would create, what the rules would be, how they would use it, that's just not a question I think I can answer. Thank you, Senator Murdoch. Or even if we would have the ability to opt out if you will, with the central bank being what it is and the authority that it has us even doing this, I don't even know that this is necessary because of so much of the unknowns, so the speed bump, I think I know the intent, but I don't know that with the regulatory oversight as it is, that's I understand it from you that this speed bump would really effectively be anything if They so determined to use this as a method of of of moving money or whatever that we would really be able to opt out and be. valuable in the Banking community still as the world changes. I don't know without you knowing what it looked like, what it would do that we would be really preventing something that we don't need to prevent. It seemed like to me. From what I'm hearing is that It's not nothing that's needed right now. I'm talking about the the bill or help me if I'm missing. I think I know the intent, but I don't know that we know enough to do to need to do this. I don't think that if they create a digital currency. I don't think it will supplant the dollar bill. We are going to have hard cash money regardless. So you as a consumer could make the choice if it's created that way, as they indicated in their study, if you, the consumer would make a choice. I either want to use central bank digital currency. I want to use the dollar, I want to use some of both. Um, but I don't, it's not intended to replace our regular dollar. You don't think it will. I don't think it will. Now, since it doesn't exist, I don't know, but I don't think it will legislation as proposed. In your opinion, would be good for us to act as a precautionary measure. I think a central bank digital currency is not necessary and not necessary to use if it is created. That's that's about as far as I can go is that we do not deem it necessary and have asked Congress not to create it. We, we actively advocated for the last several years that it's not necessary and we do not want Congress to create it. Thank you, Senator Boyd, closed Senator McKee, motion at the appropriate time. Motion accepted 2nd, all in favor say aye. I