HB 393: "An Act relating to unfair and deceptive trade practices and to the sale of business opportunities; amending Rules 4 and 73, Alaska Rules of Civil Procedure; and providing for an effective date."
00 HOUSE BILL NO. 393 01 "An Act relating to unfair and deceptive trade practices and to the sale of business 02 opportunities; amending Rules 4 and 73, Alaska Rules of Civil Procedure; and 03 providing for an effective date." 04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 05 * Section 1. AS 37.05.146(b)(4) is amended by adding a new subparagraph to read: 06 (AAA) receipts of fees for registration and renewal of 07 registration for the sale of business opportunities under AS 45.66.040. 08 * Sec. 2. AS 45.50.471(b) is amended by adding a new paragraph to read: 09 (43) violating AS 45.66 (sale of business opportunities). 10 * Sec. 3. AS 45 is amended by adding a new chapter to read: 11 Chapter 66. Sale of Business Opportunities. 12 Sec. 45.66.010. Registration required. A person may not sell or offer to sell 13 a business opportunity unless the person is registered as a seller with the department at 14 least 30 days before the sale or offer to sell begins and has paid the fee required by
01 AS 45.66.040. 02 Sec. 45.66.020. Registration procedure. (a) To register under 03 AS 45.66.010, a person shall file with the department 04 (1) the disclosure statement required by AS 45.66.080 and any 05 advertising, pamphlets, brochures, or other materials to be used in the offering or 06 promoting of the business opportunity; 07 (2) the bond required by AS 45.66.060; 08 (3) an irrevocable consent appointing the department as the person's 09 agent for the receipt of service of process in a court action or other proceeding against 10 the person, or the successor in interest of the person, for a violation of this chapter; 11 (4) a completed application form that satisfies (b) of this section; 12 (5) a signed statement that the person has read and will comply with 13 this chapter and the regulations adopted under it; 14 (6) the fee required by AS 45.66.040; and 15 (7) other information requested by the department to evaluate whether 16 the person meets the requirements of this chapter. 17 (b) The department shall establish by regulation, the application forms for 18 registrations under this chapter. The application forms must require the submission of 19 the following information: 20 (1) the nature of the business opportunity and the method by which it 21 will be offered, advertised, or promoted; 22 (2) the identity and business practices of the person who will be the 23 seller, including information on the owners, employees, agents, officers, and others 24 affiliated with that person; and 25 (3) disclosures of criminal convictions, civil judgments, orders, 26 consent decrees, and administrative determinations involving allegations of fraud, 27 theft, embezzlement, fraudulent conversion, misappropriation of property, the use of 28 untrue or misleading representations in an attempt to sell or dispose of real or personal 29 property, violations of this chapter, violations of AS 45.63 (telephonic solicitations), 30 violations of AS 45.68 (charitable solicitations), or unfair or deceptive business 31 practices under AS 45.50.471 - 45.50.561, or a substantially similar statute in another
01 jurisdiction, by the person who will be the seller, and the owners, employees, agents, 02 officers, and others affiliated with that person. 03 (c) Registration under AS 45.66.010 or renewal under AS 45.66.030 is not 04 complete until the person or seller receives an acknowledgment from the department 05 that the person or seller has complied with (a) of this section or AS 45.66.030, as 06 applicable. 07 Sec. 45.66.030. Renewal of registration. If a seller continues to sell or offer 08 to sell a business opportunity for more than one year from the date of the department's 09 acknowledgment of the initial registration under this chapter, the seller shall renew the 10 registration each year that the sale or offer to sell continues by filing, before or on the 11 anniversary date of the department's acknowledgment under AS 45.66.020(c), a 12 renewal application, on a form established by the department by regulation, requiring 13 information that is similar to the information required under AS 45.66.020. 14 Sec. 45.66.040. Registration and renewal fees. (a) As part of the 15 registration procedure set out in AS 45.66.020(a), a person shall pay a nonrefundable 16 registration fee to the department. With a renewal application, the seller shall pay a 17 nonrefundable renewal fee. The department shall establish the amount of the 18 registration fee and the renewal fee by regulation. 19 (b) Under AS 37.05.146(b), registration and renewal fees collected under this 20 chapter shall be accounted for separately, and appropriations from the account are not 21 made from the unrestricted general fund. 22 Sec. 45.66.050. Material changes in registration information. If there is a 23 material change in the information provided under AS 45.66.020 or 45.66.030, the 24 seller shall, within 10 days after the change, file with the department a statement 25 describing the change on a form established by the department by regulation. 26 Sec. 45.66.060. Surety bond required. (a) A person registering as a seller 27 shall obtain a surety bond in the amount of $75,000 issued by a surety company 28 authorized to do business in the state. The bond must be in favor of the state for the 29 benefit of a buyer and must satisfy the conditions established by the department by 30 regulation. 31 (b) If the department finds that the amount of the bond set by (a) of this
01 section is insufficient to protect the public interest, the department may by regulation 02 increase the amount of the bond. 03 Sec. 45.66.070. Location of offer and sale. This chapter applies to a sale of, 04 or an offer to sell, a business opportunity if 05 (1) the offer, regardless of whether either party is then present in this 06 state, originates in this state, or is directed by the offeror to this state and received at 07 the place to which the offer is directed, including a post office box; this paragraph 08 does not include an offer that 09 (A) appears in a bona fide newspaper or other publication of 10 general circulation that is not published in this state or that is published in this 11 state but more than two-thirds of its circulation was outside this state during 12 the 12 months preceding the offer; or 13 (B) is made on a radio or television program that originates 14 outside this state and is received in this state; 15 (2) the acceptance 16 (A) has not been previously communicated, orally or in 17 writing, to the offeror outside this state; 18 (B) is communicated to the offeror in this state, regardless of 19 whether the seller or buyer is then present in this state, and the offeree 20 reasonably believes that the offeror is located in this state; and 21 (C) is received at the place to which it was directed, including a 22 post office box; or 23 (3) the buyer is domiciled in this state and the business opportunity is 24 or will be operated in this state. 25 Sec. 45.66.080. Disclosure requirements. (a) At least 10 days before a 26 buyer signs the contract required by AS 45.66.090, or at least 10 days before receipt of 27 any consideration by the seller, whichever event occurs first, the seller shall give the 28 buyer the written disclosure statement described in (b) of this section, require the 29 buyer to sign a receipt containing the buyer's name and the date on which the buyer 30 received the disclosure statement, and give the buyer the original receipt with the 31 buyer's original signature. The seller shall retain a copy of the receipt.
01 (b) The department shall specify by regulation the form and content of the 02 disclosure statement required by (a) of this section, including 03 (1) the seller's name, type of business organization, address, and name 04 of any parent or affiliated company related to the transaction; 05 (2) the names, addresses, and other relevant information regarding the 06 owners, officers, directors, and other persons responsible for the seller's business 07 activities related to the contract; 08 (3) the business history of the seller and the seller's representatives and 09 the background of the seller and the seller's representatives that relates to business 10 opportunities; 11 (4) the total contract amount to be paid by the buyer and the schedule 12 of payments; 13 (5) the financial condition of the seller, including audits and recent 14 income statements; 15 (6) a complete description of the services that the seller will perform 16 for the buyer, including training; 17 (7) the history of the seller's registration or attempted registration in 18 this or another state as a seller of business opportunities; 19 (8) a history of civil actions, criminal actions, and consumer protection 20 complaints as described in AS 45.66.020(b)(3) brought against the seller or the seller's 21 representatives related to the sale of business opportunities and the resolution of the 22 actions and complaints in this state or another jurisdiction; 23 (9) identification of any bankruptcy actions filed in court by the seller 24 and the resolution of the actions; 25 (10) if the seller makes a statement about potential earnings that can be 26 made through a business opportunity, the basis for the statement and the economic 27 risks associated with the business opportunity; 28 (11) the rights and obligations of the seller and buyer regarding 29 termination of the contract, including the rights arising out of the bond required by 30 AS 45.66.060; and 31 (12) any additional information that the department determines by
01 regulation is reasonable and in the public interest for the seller to provide in order to 02 make a complete disclosure concerning the contract. 03 Sec. 45.66.090. Written contract required. (a) In addition to the other 04 requirements of this chapter, a person may not contract to sell a business opportunity 05 unless the contract is in writing and the seller gives a copy of the contract to the buyer 06 when the buyer signs the contract. 07 (b) The department shall establish by regulation the content and format of the 08 information that must be contained in the contract. At a minimum, the contract must 09 contain 10 (1) the payment terms, including any escrow account required under 11 AS 45.66.100; 12 (2) the name, address, and telephone number of the seller, the seller's 13 agent, and each supplier of products, equipment, or supplies that the seller is to deliver 14 to the buyer; 15 (3) a statement of the form of the seller's business organization; 16 (4) a description of services, including any training services, that the 17 seller is to provide to the buyer; 18 (5) the delivery date of the product, equipment, or supplies being sold 19 or leased; 20 (6) if the seller has represented that there is a buy-back agreement for 21 the business opportunity or that payments are protected or secured, a complete 22 description of those provisions; 23 (7) a statement of the buyer's right to cancel, the circumstances under 24 which cancellation is authorized, and the procedure for cancellation and refunds; and 25 (8) any other terms that the department determines are necessary to 26 protect the public interest. 27 Sec. 45.66.100. Restrictions on down payments. (a) A seller may not 28 require a buyer to pay as a down payment more than 20 percent of the initial payment 29 unless the excess above the 20 percent is placed in an escrow account that meets the 30 requirements of AS 45.66.110. 31 (b) In this section,
01 (1) "down payment" means that portion of the initial payment that the 02 buyer is obligated to pay to the seller before or at the time the products, equipment, 03 supplies, or services are delivered, but does not include any amount that is financed by 04 or for which financing is to be obtained by the seller or that results from financing that 05 the seller assists the buyer to obtain; 06 (2) "initial payment" means 07 (A) the total amount that a buyer is obligated to pay under the 08 terms of the contract before or at the time the equipment, supplies, products, or 09 services are delivered or within six months after the buyer commences 10 operation of the business opportunity; or 11 (B) the entire sale price if the contract sets out a specific total 12 sale price for the purchase of the business opportunity and the total price is to 13 be paid partially as a down payment and then in specific monthly payments or 14 a subsequent lump sum payment. 15 Sec. 45.66.110. Escrow account requirements. (a) The holder of an escrow 16 account required by AS 45.66.100 must be a person who is independent from the 17 seller, and the seller may not make direct disbursements from the escrow account 18 except as provided in (c) of this section. 19 (b) A seller who establishes an escrow account required by AS 45.66.100 shall 20 promptly report to the department the following information: 21 (1) the name and address of the escrow account holder; 22 (2) the name and address of the financial institution, including the 23 branch, where the escrow account is located; and 24 (3) the escrow account number. 25 (c) Except as provided under AS 45.66.120, money placed in an escrow 26 account required by AS 45.66.100 may not be released until the buyer notifies the 27 escrow holder in writing that the products, equipment, supplies, or services required 28 by the contract have been delivered within the time set in the contract between the 29 buyer and seller. The buyer shall notify the escrow holder of a timely delivery within 30 10 business days after delivery. 31 Sec. 45.66.120. Actions for claims against escrow account. (a) A buyer
01 who has a claim against an escrow account required by AS 45.66.100 may bring a 02 civil action against the seller or escrow account holder to recover money from the 03 escrow account. 04 (b) Upon the filing of an action brought under this section, the clerk of the 05 court shall mail a copy of the complaint to the attorney general and, upon entry of an 06 order or judgment in the action, shall mail a copy of the order or judgment to the 07 attorney general. 08 (c) A person may not begin an action under this section more than two years 09 after the person discovers or reasonably should have discovered the basis for the 10 claim. 11 (d) The escrow holder is not liable for the amount by which claims or damages 12 caused by the seller exceed the amount of the escrow account. 13 Sec. 45.66.130. Cancellation of contract. (a) A buyer may cancel a contract 14 for any reason if the buyer gives notice of the cancellation to the seller within 30 days 15 after signing the contract. 16 (b) In addition to the right to cancel under (a) of this section, a buyer may 17 cancel the contract at any time if the seller 18 (1) failed to comply with AS 45.66.080 or 45.66.090; 19 (2) used untrue, misleading, incomplete, or deceptive statements in any 20 aspect of advertising, promoting, selling, or offering to sell a business opportunity; 21 (3) fails, within 30 days after the delivery date specified in the 22 contract, to deliver the products, equipment, supplies, or services required under the 23 contract to begin substantial operation of the business to be started under the contract; 24 or 25 (4) fails to provide a location for the business to be started under the 26 contract if the contract requires the seller to provide a location. 27 (c) If provided by mail, the buyer's notice of cancellation is effective when it 28 is deposited in the mail properly addressed to the seller with postage prepaid. 29 (d) The notice of cancellation is not required to have a particular form. The 30 notice is sufficient if it indicates in writing the intention of the buyer not to be bound 31 by the contract.
01 (e) Within 15 days after the date the buyer gives a notice of cancellation under 02 this section, the seller shall refund to the buyer any payments, including payments for 03 shipping costs, made by the buyer and terminate all financial obligations of the buyer 04 under the contract. Within five days after receiving the refund, the buyer shall make 05 available to the seller, at a reasonable time and place, any products, equipment, or 06 supplies delivered by the seller. 07 Sec. 45.66.140. Prohibited representations. (a) A person may not state that 08 the person is registered as a seller under this chapter unless the person has complied 09 with the registration or renewal requirements, as applicable, of this chapter. 10 (b) Unless the seller is asked for the information by the buyer, a seller may not 11 state or imply that the seller has a license, consent, or other form of permission from 12 the state to sell business opportunities in this state. 13 (c) A seller may not make, or cause to be made, a representation that is 14 inconsistent with AS 45.66.160. 15 (d) A seller may not state or imply that the seller's compliance with the laws of 16 this state or a municipality constitutes approval or endorsement of the seller by the 17 state or municipality. 18 Sec. 45.66.150. Untrue statements or omissions. A person may not, in 19 connection with a sale of or an offer to sell a business opportunity subject to 20 registration under this chapter, directly or indirectly make an untrue statement of 21 material fact in the registration information required in or under AS 45.66.020 - 22 45.66.050 or in other written or oral communications, including the disclosure 23 required by AS 45.66.080 and in advertising related to the sale or offer, or omit to 24 state a material fact necessary, in light of the circumstances under which it is made, to 25 avoid a statement being misleading. 26 Sec. 45.66.160. Unwarranted conclusions. (a) Acknowledgment of 27 registration by the department under AS 45.66.020(c) does not constitute a finding by 28 the department that a document filed with the department under this chapter is true, 29 complete, or not misleading. 30 (b) Acknowledgment of registration by the department under AS 45.66.020(c) 31 does not mean that the department has evaluated the merits or qualifications of the
01 seller or business opportunity, or that the department recommends or approves a seller 02 or the business opportunity. 03 (c) Availability of an exemption under AS 45.66.220 for a seller does not 04 mean that the department recommends or approves the seller or the business 05 opportunity. 06 Sec. 45.66.170. Waiver prohibited and void. A seller may not request or 07 obtain from a buyer a waiver of the rights or defenses of the buyer under this chapter. 08 A waiver of the rights or defenses of the buyer under this chapter is void. 09 Sec. 45.66.180. Seller's records and files. (a) A seller shall maintain a 10 complete set of records relating to the advertising and promotion of the seller's 11 business opportunity for five years and allow the department to inspect and copy them 12 during reasonable business hours. 13 (b) A seller shall keep all documents relating to a contract entered into by the 14 seller for five years after the date the contract is entered into. 15 Sec. 45.66.190. Public records. Except for testimony and records related to 16 an investigation by the department under this chapter, the registration application 17 form, registration renewal form, disclosure statement, bond, contract, and other 18 documents required to be prepared or filed with the department under this chapter, 19 including a document created or obtained by the department under AS 45.66.200, are 20 public records available for public inspection and copying under AS 40.25.110 - 21 40.25.220. 22 Sec. 45.66.200. Denial, suspension, or revocation of registration. (a) 23 Subject to the other requirements of this section and after reviewing a response 24 submitted by the person under (b) of this section, the department may issue an order 25 denying, suspending, or revoking a registration or renewal of a registration made by a 26 person under AS 45.66.010 - 45.66.030, or prohibiting a person from selling or 27 offering to sell business opportunities, if the department finds that 28 (1) the person failed to comply with this chapter or the regulations 29 adopted under this chapter; 30 (2) the sale of or offer to sell would constitute, or has constituted, a 31 misrepresentation of, deceit of, or fraud on the buyer;
01 (3) the nature of the person's business enterprise or method of 02 business, or the nature or method of the business opportunity, includes activities that 03 are illegal where performed; 04 (4) the person failed to file a document, information, fee, or bond 05 required by AS 45.66.010 - 45.66.060; 06 (5) the literature or advertising of the person, or of another person 07 recommended by the person, is misleading, incorrect, materially incomplete, or 08 deceptive; 09 (6) a person identified in the registration represents an unreasonable 10 risk to the public interest and 11 (A) has been convicted of 12 (i) a felony or misdemeanor involving fraud, theft, 13 embezzlement, fraudulent conversion, misappropriation of property, or 14 the use of untrue or misleading representations in the sale of or offer to 15 sell or otherwise dispose of real or personal property; or 16 (ii) violations under this chapter, violations of AS 45.63 17 (telephonic solicitations), violations of AS 45.68 (charitable 18 solicitations), or an unfair trade practice prohibited by AS 45.50.471 - 19 45.50.561, or a substantially similar statute in another jurisdiction; 20 (B) is subject to a final order or judgment against the person in 21 a civil or administrative action, including a stipulated order or judgment, if the 22 complaint or petition in the action alleged acts constituting 23 (i) a violation of this chapter; 24 (ii) fraud, theft, embezzlement, fraudulent conversion, 25 or misappropriation of real or personal property; 26 (iii) the use of untrue or misleading representations in 27 an offer to sell or dispose of real or personal property; 28 (iv) the use of unfair trade practices under 29 AS 45.50.471 - 45.50.561; or 30 (v) a violation of AS 45.63 or AS 45.68; or 31 (C) is subject to an injunction relating to business activity if the
01 injunction resulted from an action brought by a federal, state, or local public 02 agency, including an action related to an occupational license under AS 08. 03 (b) Before issuing an order to a person under (a) of this section, the 04 department shall send by certified mail to the address set out in the person's 05 registration or renewal of registration a notice of intent to issue the order. In the 06 notice, the department shall provide the facts supporting the denial, suspension, or 07 revocation of the registration or renewal of the registration. The person may respond 08 to the notice by submitting a statement signed under penalty of perjury by the person 09 or by an owner or officer of the person. 10 Sec. 45.66.210. Criminal penalties. (a) A seller who recklessly violates 11 AS 45.66.010 - 45.66.060, 45.66.080 - 45.66.110, or 45.66.150 is guilty of a class C 12 felony. 13 (b) A seller who recklessly violates AS 45.66.130(e), 45.66.140, or 45.66.170 14 is guilty of a class A misdemeanor. 15 (c) Each violation is a separate offense and a prosecution or conviction for one 16 of the offenses does not bar prosecution or conviction of another offense. 17 (d) In this section, "recklessly" has the meaning given in AS 11.81.900. 18 Sec. 45.66.220. Exemptions. This chapter does not apply to a sale of or an 19 offer to sell 20 (1) a business opportunity if the total amount of the payments to be 21 made by the buyer under the contract is less than $200; 22 (2) a franchise under 16 C.F.R. 436; 23 (3) an ongoing business operated by the seller that is to be sold in its 24 entirety; 25 (4) a business opportunity to an ongoing business if the seller will 26 provide products, equipment, supplies, or services that are to be sold by the buyer in 27 connection with the buyer's ongoing business; 28 (5) sales demonstration equipment, materials, or samples for use in 29 sales demonstrations and not for resale, or product inventory sold to the buyer at a 30 bona fide wholesale price; 31 (6) a business opportunity by an executor, an administrator, a marshal,
01 a receiver, a trustee in bankruptcy, or a guardian or conservator, or under a judicial 02 sale; 03 (7) a security regulated under AS 45.55 or a security that is exempted 04 by AS 45.55.900 from regulation under AS 45.55; 05 (8) a business opportunity if the sale or offer is made by a person 06 registered with the United States Securities and Exchange Commission when acting 07 within the scope of the person's Securities and Exchange Commission license or by a 08 person registered by the state under AS 45.55 when acting within the scope of 09 registration; 10 (9) a business opportunity by an issuer, or a subsidiary of an issuer, of 11 a class of securities that is 12 (A) subject to 15 U.S.C. 78a - 78lll (Securities Exchange Act of 13 1934); and 14 (B) registered under 15 U.S.C. 78a - 78lll (Securities Exchange 15 Act of 1934) unless exempt from registration under 15 U.S.C. 78l(g)(2)(A) - 16 (C) or (E) - (H); 17 (10) a business opportunity in which the buyer is 18 (A) a bank, savings and loan association, trust company, 19 insurance company, credit union, or investment company under 15 U.S.C. 80a- 20 1 - 80a-64 (Investment Company Act of 1940), pension or profit sharing trust, 21 or other financial institution or institutional buyer; or 22 (B) a broker-dealer registered under AS 45.55 ; 23 (11) a business opportunity that involves a marketing plan made in 24 conjunction with the registration of a trademark or service mark under 15 U.S.C. 1051 25 - 1127 (Trademark Act of 1946) if the seller has a minimum net worth of $1,000,000 26 as determined on the basis of the seller's most recent audited financial statement 27 prepared within 13 months of the first offer to sell in this state; net worth may be 28 determined on a consolidated basis if one person owns at least 80 percent of the seller 29 and that one person expressly guarantees the obligations of the seller that arise under 30 the sale or offer claimed to be exempt under this paragraph; or 31 (12) a business opportunity in which either the seller or the buyer is
01 licensed as a real estate broker, associate real estate broker, or real estate salesperson 02 under AS 08.88 and the sale or offer is regulated by AS 08.88. 03 Sec. 45.66.230. Coordination with other laws. (a) The rights and remedies 04 in this chapter are in addition to other legal rights and remedies available to a buyer or 05 the department. 06 (b) To the extent of the conflict, the provisions of this chapter govern if a sale 07 or an offer to sell a business opportunity is regulated by this chapter and by AS 45.63 08 (telephonic solicitations), by AS 45.01 - AS 45.08, AS 45.12, AS 45.14, and AS 45.29 09 (Uniform Commercial Code), or by another law, and it is not possible to comply with 10 or to apply both this chapter and the other law. 11 Sec. 45.66.240. Regulations. The department may adopt regulations under 12 AS 44.62 (Administrative Procedure Act) to carry out the purposes of this chapter. 13 Sec. 45.66.900. Definitions. In this chapter, unless the context indicates 14 otherwise, 15 (1) "advertising" means a circular, a prospectus, an advertisement, or 16 other material or a communication by radio, television, pictures, or similar means used 17 in connection with a sale of or an offer to sell a business opportunity; 18 (2) "business opportunity" means an arrangement under which the 19 seller or a person recommended by the seller will provide to the buyer products, 20 equipment, supplies, or services enabling the buyer to start a business and under which 21 one or more of the following occurs or is to occur: 22 (A) the seller or a person recommended by the seller will 23 provide or assist the buyer in finding locations for the use or operation of 24 vending machines, racks, display cases, or other similar devices on premises 25 that are not owned or leased by the buyer or seller; 26 (B) the seller or a person recommended by the seller will 27 provide or assist the buyer in finding outlets or accounts for the buyer's 28 products or services; 29 (C) the seller or a person specified by the seller will purchase 30 any or all products made, produced, fabricated, grown, bred, or modified by 31 the buyer;
01 (D) the seller or a person specified by the seller will buy back 02 or is likely to buy back any products made, produced, fabricated, grown, bred, 03 or modified by the buyer using, in whole or in part, the product, supplies, 04 equipment, or services that were initially sold or offered for sale to the buyer 05 by the seller; 06 (E) the seller makes an oral or written representation that the 07 buyer will derive income from the business that will exceed the price paid to 08 the seller, and the representation would cause a reasonable person in the 09 buyer's position to believe the income is assured; 10 (F) the seller will refund all or part of the price paid to the 11 seller, or repurchase some or all of the products, equipment, or supplies 12 provided by the seller or a person recommended by the seller if the buyer is 13 dissatisfied with the business; or 14 (G) the seller will provide the buyer with a marketing plan; 15 (3) "buyer" means a person who is solicited to become obligated or 16 does become obligated on a contract; 17 (4) "contract" means an agreement relating to a business opportunity; 18 (5) "department" means the Department of Law; 19 (6) "equipment" includes machines, electrical devices, video or audio 20 devices, computer devices, molds, display racks, vending machines, coin-operated 21 game machines, machines that dispense products, and display units of all kinds; 22 (7) "marketing plan" means advice or training provided to the buyer by 23 the seller or a person recommended by the seller pertaining to the sale of products, 24 equipment, supplies, or services; 25 (8) "offer" or "offer to sell" means an attempt to sell a business 26 opportunity; 27 (9) "product" includes a tangible chattel, including food or living 28 animals, that the buyer intends to 29 (A) sell or lease; 30 (B) use to perform a service; 31 (C) resell or offer to resell to the seller; or
01 (D) provide or offer to provide to the seller, or to another 02 person whom the seller suggests the buyer contact, so that the seller or the 03 other person may assist the buyer, either directly or indirectly, to distribute, 04 sell, lease, or otherwise dispose of a product; 05 (10) "sale," regarding the sale of a business opportunity, means a 06 contract to sell, lease, or otherwise dispose of the business opportunity or an interest in 07 the business opportunity for value; 08 (11) "sell," regarding the selling of a business opportunity, means to 09 sell, lease, or otherwise dispose of the business opportunity or an interest in the 10 business opportunity for value; 11 (12) "seller" means a person, or the person's agent, who sells or offers 12 to sell a business opportunity; 13 (13) "services" includes assistance, guidance, direction, work, labor, or 14 other act that may be provided by the seller in the initiation or maintenance of a 15 business; 16 (14) "supplies" includes materials used to produce, grow, breed, 17 fabricate, modify, develop, or make a product or other item. 18 * Sec. 4. The uncodified law of the State of Alaska is amended by adding a new section to 19 read: 20 INDIRECT COURT RULE AMENDMENTS. The provisions of AS 45.66.120(b), 21 enacted by sec. 3 of this Act, have the effect of changing 22 (1) Rule 4, Alaska Rules of Civil Procedure, by requiring the clerk of the court 23 to mail a copy of the complaint to the attorney general when an action is filed under 24 AS 45.66.120, enacted by sec. 3 of this Act; and 25 (2) Rule 73, Alaska Rules of Civil Procedure, by requiring the clerk of the 26 court to mail a copy of an order or judgment in an action under AS 45.66.120, enacted by sec. 27 3 of this Act, to the attorney general. 28 * Sec. 5. The uncodified law of the State of Alaska is amended by adding a new section to 29 read: 30 TRANSITION: REGISTRATION REGARDING EXISTING ACTIVITIES. (a) 31 Notwithstanding the registration requirements of AS 45.66.010 - 45.66.900, enacted by sec. 3
01 of this Act, a person who, on the day before the effective date of sec. 3 of this Act, is selling 02 or offering to sell a business opportunity may continue to sell or offer to sell a business 03 opportunity until the 45th day after the effective date of sec. 3 of this Act without being 04 registered as a seller under AS 45.66.010, enacted by sec. 3 of this Act. Beginning on the 05 46th day after the effective date of sec. 3 of this Act, a person described in this subsection 06 shall be registered as a seller under AS 45.66.010 in order to continue selling or offering to 07 sell a business opportunity. 08 (b) In this section, 09 (1) "business opportunity" has the meaning given in AS 45.66.900, enacted by 10 sec. 3 of this Act; 11 (2) "offer to sell" has the meaning given in AS 45.66.900, enacted by sec. 3 of 12 this Act; 13 (3) "sell" has the meaning given in AS 45.66.900, enacted by sec. 3 of this 14 Act; 15 (4) "seller" has the meaning given in AS 45.66.900, enacted by sec. 3 of this 16 Act. 17 * Sec. 6. The uncodified law of the State of Alaska is amended by adding a new section to 18 read: 19 TRANSITION: REGULATIONS. The Department of Law may proceed to adopt 20 regulations to implement AS 45.66.010 - 45.66.900, enacted by sec. 3 of this Act. The 21 regulations take effect under AS 44.62 (Administrative Procedure Act), but not before the 22 effective date of sec. 3 of this Act. 23 * Sec. 7. The uncodified law of the State of Alaska is amended by adding a new section to 24 read: 25 CONDITIONAL EFFECT. AS 45.66.120(b), enacted by sec. 3 of this Act, takes 26 effect only if sec. 4 of this Act receives the two-thirds majority vote of each house required by 27 art. IV, sec. 15, Constitution of the State of Alaska. 28 * Sec. 8. Section 6 of this Act takes effect immediately under AS 01.10.070(c). 29 * Sec. 9. Except as provided in sec. 8 of this Act, this Act takes effect July 1, 2002.