Okay. So you've essentially taken the State law and used their definitions and language and put it in here.
But the State law is really more of an Attorney General enforcement rather than permitting a person to return the car. 85 5/19/08 - L&I COMMITTEE - BILL 080085
So the difference here is that in Philadelphia, people have the right to return the car.
Or give the dealership the right to make the repairs; the dealership would have the choice.
Did you consider taking any dollar-value sort of limits on it? If the car is sold for less than $2,000 or $1,000, then this law would not apply? Or, alternatively, define major sort of -- I think your language is "undisclosed major structural defect" as something that is 10 percent of the value of the car or 5 percent of the value of the car but not less than $500, say, for a car that's very inexpensive.
We have given the dealership the opportunity to sell the car and clearly say it's not 86 5/19/08 - L&I COMMITTEE - BILL 080085 roadworthy. So if there's a sophisticated consumer who is buying a car for parts, they're collectors, they like cars and they're buying a '64 Camaro that they understand is not going to run, they're just buying it to get the parts, that would be a different category. The problem that comes up is that many people when they buy cars at these lots are people who are struggling economically and are believing that the car will pass inspection. So what we're saying is, if a dealership wants to sell a car to a sophisticated buyer, all they have to do is clearly state that it's not roadworthy, it's not a car, it's not for transportation. If they are selling it as a car for transportation, then it has to pass inspection. It should, when it leaves the lot, be drivable.
Well, 87 5/19/08 - L&I COMMITTEE - BILL 080085 obviously, they were able to drive it off the lot.
-- but some cars that were driven off the lot shouldn't have been and they wouldn't pass inspection, and if they're pulled over by a police officer, they're going to end up with a number of tickets on a car they just purchased. The car may be drivable off the lot; it doesn't mean the frame's intact, it doesn't mean that it's safe to drive.
Oh, I see. You've changed the definition of -- you've limited the definition of "major structural defect" in your amendment to be far more specific.
Okay, that's fine. 88 5/19/08 - L&I COMMITTEE - BILL 080085 My problem was, it was so out there that I just envisioned people with buyer's remorse or not quite happy, you know, causing a lot more activity in this area than what would otherwise be --
I don't think you were the only one with that criticism of me, so we changed it.
Thank you, Madam Chair. You just mentioned, Mr. Haver, that when you find problems with any of these car dealerships or whatever, you pass it off onto L&I for the appropriate action. Could you tell me, Commissioner Verdi, what would be the appropriate 89 5/19/08 - L&I COMMITTEE - BILL 080085 action? COMMISSIONER VERDI: It's similar again, Councilman, to any other license issue that we have where you have an outside agency that does somewhat the enforcement. To give you an example, it would be similar to the Health Department referring either a restaurant to us that has been investigated to have bad health issues or an issue with their license, and then we take the enforcement action. Again, such as an administrative hearing, an intent to cease a revocation of their sales license for cars, things of that nature. Again, it would be based upon the recommendations of, in this case, Consumer Affairs.
But what relief would a person receive that purchased one of these cars? Would they still be stuck with this car or... COMMISSIONER VERDI: In some 90 5/19/08 - L&I COMMITTEE - BILL 080085 cases, we can go to a court issue where we would bring this before a judge who can order that that person be given some relief. The only thing that we could do is, our department would do -- we'd be able to attach that person's license and revoke it so as to the person not being able to sell any further cars until this problem was resolved.
So it would go to a court proceeding more or less. COMMISSIONER VERDI: It can, yes.
Thank you. Commissioner, are you going to give your testimony? COMMISSIONER VERDI: Good morning, Chairwoman Sanchez and members of the committee. I'm Dominic Verdi, 91 5/19/08 - L&I COMMITTEE - BILL 080085 Deputy Commissioner of the Department of Licenses and Inspections. Today I'm here to provide testimony on Bill No. 5 080085, which, if enacted, will add a new 9-630 to the Philadelphia Code to establish requirements relating to the sale of used vehicles to the public. As a result of meetings and discussions that we've had with Councilman Clarke regarding amendments he will be proposing to the bill, we offer no objections to the bill as amended, as this bill will be in the interest of the public and will make this bill manageable for L&I to address issues related to auto sales lot and showroom licenses, as required under 9-601(4) and (5) of the Philadelphia Code. Thank you for the opportunity to provide testimony on Bill No. 080085.
Any other questions for the Administration? Councilman Green? 92 5/19/08 - L&I COMMITTEE - BILL 080085
Just looking at "undisclosed major structural defect" definitions, I still think this is a bit vague. For example, I can't imagine that my frame is not cracked a little bit. I mean, there are non-structural things that happen to a car after it's been used and on the road for a long period of time, and to say that it's -- or even if it's bent somewhere, because it's perfectly safe, I don't -- I'm not sure I'm comfortable not saying -- you know, having "unsafe" in some of these definitions. I'll give you another example: engine block. You know, an engine -- if a car is sold for 700 bucks and the engine is cracked and the engine block is cracked, it could be slightly cracked and could go for two years, and that could be perfectly fine and there's no 24 way for the dealer to sell that car now unless he tells them that it's not 93 5/19/08 - L&I COMMITTEE - BILL 080085 roadworthy. Let me give you another example: transmission defective as to require replacement. Well, you know, is that -- it just requires replacement when, within what kind of time period? Immediate? Would the word "immediate" there be objectionable to you?
Not at all. The word "immediate" would not be objectionable. There is no promise that that car is going to last. It's a problem when it's sold that it functions as a car. And, Councilman, if you look, you'll see that the decision as to whether the structural damage is severe and whether it makes a car not roadworthy, it's going to be done by the same person who puts the safety inspection on your car. A certified inspection mechanic. So it's not -- you can't go up to the street to your friend who may or 94 5/19/08 - L&I COMMITTEE - BILL 080085 may not say there's something wrong with the car. This is a licensed, certified inspections mechanic who is empowered by the Commonwealth to decide whether a car is safe to drive or not.
Well, we tried that originally, and there were complaints on the other side that it was, again, not specific enough.
Again, I can only put forward my argument, which was: This is specific, it tells people what to expect and puts a certified mechanic, an inspection mechanic, in as the person who is going to say this car is safe, it's okay, or no, this car doesn't qualify as a car.
"Flood damage," what does that mean? 95 5/19/08 - L&I COMMITTEE - BILL 080085
Cars that are salvaged, if the car is flooded and the insurance company has decided the car has no value because of the flood damage and it's sold as a reclaimed car. That would be what "flood damage" means.
If what you're talking about is, like, cars from New Orleans that are salvaged and have been reclaimed and then are being retitled and sold as used cars, don't you think that -- I mean, my car has, you know, been in high water and that may have caused some rust in the -- you know, somewhere that's not necessarily visible to the naked eye. Is that flood-damaged? 96 5/19/08 - L&I COMMITTEE - BILL 080085 This just doesn't seem specific enough to me to be --
You know, it would not be for me to suggest that Council should write in more specific language if that's what you thought was necessary. I would not argue that I'm the final arbitrator of exactly what the language should be; I think that's the role of Council. What I'm here to say is that there is no lemon-law protection now in the Commonwealth.
And whether I've done a great job or not, it's not a perfect job of perfecting the language. I would certainly say we can always improve, and another set of eyes is always helpful.
Would you have any objection to changing "flood damage" to be as specific as you just 97 5/19/08 - L&I COMMITTEE - BILL 080085 mentioned?
We have one more testifier. Any more questions? I have a question for Commissioner Verdi, who has to enforce this: Should we want to get more specific, or do we want to give ourselves room? COMMISSIONER VERDI: That's entirely up to the Consumer Affairs people. We're going to get recommendations from their office as to what happened prior to them turning it into enforcement. Enforcement is going to be the last line of defense when they can't work out some type of agreement with the car dealer.
Okay, thank you. Thank you, panel. 98 5/19/08 - L&I COMMITTEE - BILL 080085 We have one more person to testify. Kevin Mazzacola, if you could come forward, please. (Witness comes forward.)
This is our last witness. We're going to take a five-minute recess before we go into our public meeting.
Thank you, Madam Chairwoman. I want to thank all of the members -- the City Council members for allowing me to testify today. My name is Kevin Mazzacola, and I'm the Executive Director of the Auto Dealers Association of Greater Philadelphia. I'm here today on behalf of my members to testify regarding Councilman Clarke's legislation, Bill No. 080085, that would attempt to protect consumers from unknowingly purchasing damaged used 99 5/19/08 - L&I COMMITTEE - BILL 080085 vehicles. The Automobile Dealers Association and its state affiliate, the Pennsylvania Automotive Association, in the past has supported various versions of statewide used-cars lemon laws. We appreciate Councilman Clarke's interest in these issues and the automotive concerns in general. It is certainly in the industry's best interest that consumers have every confidence in their purchases from the dealers. While the auto dealers want to be helpful in addressing the Councilman's concerns, we don't want to see dealers in Philadelphia held to a different standard in the City than outside the City limits. Pennsylvania already has a tough lemon law that is working regarding used cars from the AG's office with notification requirements and punishments. The Automobile Dealers Association of Greater Philadelphia is a 100 5/19/08 - L&I COMMITTEE - BILL 080085 regional organization of 220 new-car franchise dealers, and we have 27 franchised dealers in Philadelphia who sold over 40,000 new and used vehicles in 2007. These dealers employ over 2200, most of whom live in Philadelphia as well. And these dealers represent significant tax revenues through City government, especially wage taxes, close to 5 million, and in gross receipts, over 1.5. Several decades ago, most of our dealerships were located within the City, but today, the vast majority of these dealerships have closed or moved to the suburbs. Various City policies over these decades helped accelerate that exodus, and I ask not to increase the burden on dealers who have chosen to stay in Philadelphia. Councilman Clarke and the Mayor's consumer advocate have graciously reached out to us as an industry in an effort to determine if a 101 5/19/08 - L&I COMMITTEE - BILL 080085 compromised bill could be worked out. We've had several productive meetings, and it's our hope that we can come up with an agreement on language that can protect Philadelphia consumers without overburdening the Philadelphia dealerships. Hopefully, these negotiations will be resolved soon, and we ask Council to allow the Dealer Association an opportunity to provide input again after these negotiations are completed, before the legislation is given a final vote. Thank you for your time and consideration. And if I could be permitted a couple of comments outside the written testimony. Some of the testimony was written prior to understanding that they would agree to those amendments, those amendments mirroring the AG's office, which was what was important to us. 102 5/19/08 - L&I COMMITTEE - BILL 080085 What you see in front of you in regards to the six areas defining "major structural damage" is what dealers throughout the Commonwealth live with today and (indiscernible) protection to the consumers when they purchase the vehicle. We're fine with those areas. It's our understanding and our support that it's more about enforcement and having the ability locally to be able to enforce and protect these consumers. In that way, we are supportive of what the legislation does. With the expedited meetings in negotiating these languages, I'm speaking somewhat from "I" instead of "we," meaning all our members, so I will go back to them. I perceive us being very supportive of the direction of the bill and a couple of other areas that we need to solidify. But overall, we appreciate the Councilman's efforts to absorb important language for us. 103 5/19/08 - L&I COMMITTEE - BILL 080085
Thank you, Madam Chair. Sir, just so I'm clear for the record, so you're association supports these amendments as they're put in there? You feel that's the proper language; is that it?
Yeah. I mean, we didn't want different stipulations in Philadelphia than there is in other areas of the State. And so, although I have not asked all of the members yet, I've asked several. We've haven't had an opportunity to voice all of their concerns or whatever concerns, but I foresee being supportive in what's being amended.
So you are okay with us reporting this out of Council Committee today as amended?
With the amendments, although there's one section that we just saw this morning that I really am not able to make comment, but considering how the Councilman and the staff has worked with us on the previous amendments, I'm confident that we will come up with something that is viable in that area.
Do you know, of the State regs for what is flood- damaged, is there a further definition in the State regulations for flood- damaged? In other words, is this 105 5/19/08 - L&I COMMITTEE - BILL 080085 referencing one section that doesn't have the full definition of what "flood-damaged" means under the State?
There is definitions, and we can get back to you on that. It also depends on the state in which the flood occurs.
In other words, in the State regulations regarding this, is there a definition of "flood-damaged"?
From my understanding, there is. Let me check. But it is poignant in the sense of, if a vehicle's in New Orleans and flooded, these vehicles can go all over the country. So it's also pertinent on 106 5/19/08 - L&I COMMITTEE - BILL 080085 wherever they have been flooded in regards of whether their title is notified that it has been a flood vehicle. So there's some dependent -- depending on whatever state it occurred.
Okay. So what I would like to do is just -- I'm going to support this bill out of committee based on what you're saying, but also, I'd like to consider amending this bill prior to final passage to include specific references to the definitions in the State regs rather than just having undefined, quote/ unquote, flood-damaged without a reference to State regs.
And we would be supportive. I'll make sure that you have the information, whatever's in the State regs, so you know where you are and what you would like to change.
Thank you. Councilman Clarke, did you want 107 5/19/08 - L&I COMMITTEE - BILL 080085 to add something since this is your bill?
Yes. Thank you, Madam Chair. First, I would just like to thank all of the participants in the discussion. The auto dealers association has been very good in working with us and along with the staff and L&I and the Office of Consumer Affairs. One of the issues, I'm sure you heard during the course of the testimony, was our ability to enforce in a meaningful way. We crafted a process. It's probably going to cost a little money so people know we will probably come back for a transfer ordinance at some point or moving some staff around to help Mr. Haver implement the program. But I think that based on our conversations with the industry, this will be a bill that is much needed. We have actually had some 108 5/19/08 - L&I COMMITTEE - BILL 080085 instances where individuals came into our office, and that's what precipitated us into getting involved in this process. And once we found out that people really had no ability beyond trying to get someone at the State level -- and that was -- and my understanding is that the State is -- that's really not their primary focus. It predominantly deals with new vehicles. We needed a local entity to ensure that people had the appropriate opportunity to go to an agency that would make sure that they're not subject to some of the irresponsible car dealers. Fortunately, the overwhelming -- and I want to emphasize the overwhelming -- majority of car dealers in the City and surrounding areas are, in fact, extremely responsible, have been very helpful in crafting language to support this bill. So I would ask for the members 109 5/19/08 - L&I COMMITTEE - BILL 080085 of committee to support the amendment and move the bill out of committee. If there needs to be any further discussion of all the pertinent parties, including the committee, we would be more than willing to entertain any further amendments.
With that, that concludes the public hearing portion of our hearing. We're going to take a five-minute recess and then we'll come to our public meeting to vote the bills out. Thank you. (Committee stands in recess.) * * * (Committee reconvenes.)
The Committee on Licenses and Inspections will go into public meeting, having obtained a quorum with Councilwoman 110 5/19/08 L&I COMMITTEE - PUBLIC MEETING Blondell Reynolds-Brown, Councilman Bill Greenlee, Councilman Bill Green, Councilwoman Krajewski, and Councilman Jack Kelly. We'll start off with a motion. I will recognize Councilman Bill 8 Greenlee.
Thank you, Madam Chair. Regarding Bill No. 11 080004, I move the amendment which was proposed by the sponsor, Councilman Kenney. (Motion duly seconded.)
All in favor? Any opposed? Abstentions? Okay, so we're accepting the amendment for Bill No. 080004. A motion to move the bill?
Thank you, Madam Chair. I move that Bill No. 080004, as amended, be reported out of this 111 5/19/08 L&I COMMITTEE - PUBLIC MEETING committee with a favorable recommendation, and further, that the rules of Council be suspended to allow for first reading at our next session of Council. (Motion duly seconded.)
All in favor? Any abstentions or against? Thank you. I recognize Councilman Bill 13 Greenlee for a motion on Bill No. 14 080373.
Thank you, Madam Chair. I move that Bill No. 080373 be reported out of committee with a favorable recommendation, and further, that the rules of Council be suspended to allow for first reading at our next session of Council. (Motion duly seconded.)
Thank you. 112 5/19/08 L&I COMMITTEE - PUBLIC MEETING All in favor? Any abstention or opposed? Thank you. I'll recognize Councilwoman Blondell Reynolds-Brown for a motion for Bill No. 080165.
Madam Chair, I move that Bill No. 080165 be reported out of committee with a favorable recommendation and further move that the rules of Council be suspended so as to permit first reading. (Motion duly seconded.)
All in favor? Any abstentions or against? Thank you. I recognize Councilman Bill 21 Greenlee for Bill No. 080301.
Thank you, Madam Chair. I move that Bill 080301 be reported out this committee with a 113 5/19/08 L&I COMMITTEE - PUBLIC MEETING favorable recommendation, and further, that the rules of Council be suspended to allow first reading at our next session of Council. (Motion duly seconded.)
All in favor? Any abstentions or opposition? Thank you. The Chair recognizes Bill 12 Greenlee for an amendment to Bill No. 13 080085.
Thank you, Madam Chair. I move the approval amendment to Bill 080085 as proposed by the sponsor. (Motion duly seconded.)
All in favor? Any abstentions or opposed? Okay, I recognize Councilman Greenlee for a motion for Bill No. 25 080085. 114 5/19/08 L&I COMMITTEE - PUBLIC MEETING
Thank you, Madam Chair. I move that Bill No. 080085, as amended, by reported out of this committee with a favorable recommendation and that the rules of Council be suspended to allow for first reading at our next session of Council. (Motion duly seconded.)
All in favor? Any abstentions or opposition? Thank you. That concludes business of the Committee on Licenses and Inspections. I want to thank all of our witnesses and my Council colleagues. Thank you. (Proceedings end at 11:40 a.m.) * * * 115 C E R T I F I C A T E I HEREBY CERTIFY that the proceedings of the City of Philadelphia Council Committee on Licenses and Inspections are contained fully and accurately in the stenographic notes taken by me on Monday, May 19, 2008, and that this is a true and correct statement of same. __________________________________ JOSEPHINE CARDILLO Registered Professional Reporter (The foregoing certification of this transcript does not apply to any reproduction of the same by any means, unless under the direct control and/or supervision of the certifying reporter.)