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Minutes for SB423 - Committee on Transportation
Short Title
Modifying how reasonable allowance for use is calculated for nonconforming vehicle warranty refunds.
Minutes Content for Tue, Mar 1, 2022
Chairperson Petersen called the meeting to order and opened the hearing on SB423.
Assistant Revisor Adam Siebers reviewed the provisions of the bill, which amends how the value of a motor vehicle under warranty is calculated when the manufacturer plans to refund the purchase or lease of the vehicle (Attachment 1). He explained that the refund is calculated as the price including all collateral charges less a reasonable allowance for the consumer's use of the vehicle. Noting that previously the reasonable allowance was based on the most recent edition of Your Driving Costs by the American Automobile Association, he said that basis was stricken and substituted by the following formula: the purchase price of the vehicle multiplied by the miles driven by the consumer over 15,000 miles divided by 120,000 miles.
Via Web-Ex John Ragan, a citizen from Pittsburg, testified as a proponent for the bill (Attachment 2). He recounted his purchase of a new vehicle which developed a recurring electrical problem the dealer was unable to resolve, a failure that qualified the vehicle for Kansas' lemon law. However, Mr. Ragan questioned the equitable basis for calculating the "reasonable allowance," and he recommended a calculation based on reimbursement for actual expenses.
Mr. Ragan responded to members' questions:
- The original purchase price of the car was about $24,000; the reimbursement was about $21,000.
- The AAA calculation does not account for ancillary expenses.
Speaking in opposition to the bill via Web-Ex, Leighton Yates, Director of State Affairs, Alliance for Automotive Innovation, commented that the bill would depart from traditional lemon-law practice in the nation (Attachment3). He explained that the bill, by changing the definition of two concepts ("collateral charges" and "reasonable allowance"), makes it inconsistent with most other states' lemon laws.
Jeff Perry, Director of Public Policy, General Motors Company, testified via Web-Ex as an opponent (Attachment 4). He acknowledged that he was not familiar with Mr. Ragan's specific case and assured the Committee that he would assist in helping make Mr. Ragan whole; however, he stated that the bill adds new requirements to compensate for collateral charges and causes Kansas to be out of alignment with all other states regarding vehicle lemon laws. He offered to work with the Committee to edit the language to make the intention of the bill consistent with other states' statutes.
The Chair closed the hearing on SB423.
