SB 189: "An Act relating to motor vehicles; and providing for an effective date."
00 SENATE BILL NO. 189 01 "An Act relating to motor vehicles; and providing for an effective date." 02 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 03 * Section 1. The uncodified law of the State of Alaska is amended by adding a new section 04 to read: 05 LEGISLATIVE FINDINGS. The legislature finds that 06 (1) the manufacture, distribution, and sale of motor vehicles in the state vitally 07 affects the general economy of the state and the public interest and public welfare; 08 (2) motor vehicle distributors and the manufacturers of motor vehicles whose 09 physical manufacturing facilities are not located in the state are in fact doing business in the 10 state through their control over, relationships with, and transactions with their dealers in the 11 state; 12 (3) the geographical location of the state makes it necessary to ensure the 13 availability of motor vehicles and parts and dependable service for motor vehicles throughout 14 the state to protect and preserve the transportation system, the public safety and welfare, and 15 the investments of residents; and
01 (4) it is necessary to regulate and license motor vehicle manufacturers and 02 distributors and their branches and representatives, motor vehicle dealers, and other persons 03 engaged in the business of selling, repairing, or purchasing vehicles in the state in order to 04 prevent fraud and other abuses against residents and to protect and preserve the economy, the 05 transportation system, the public safety and welfare, and the investments of residents. 06 * Sec. 2. AS 45 is amended by adding a new chapter to read: 07 Chapter 25. Motor Vehicle Transactions. 08 Article 1. Applicability; Venue; Corporate Affiliates. 09 Sec. 45.25.010. Applicability. The provisions of this chapter are declared to 10 be remedial and apply to a contract, franchise, or other agreement between a 11 manufacturer and its respective dealers in this state. 12 Sec. 45.25.020. Jurisdiction; choice of law. The courts of this state have 13 jurisdiction over a legal dispute between a manufacturer located in or outside this state 14 and a dealer located in this state, and the dispute is governed by and interpreted and 15 adjudicated under the law of this state. 16 Sec. 45.25.030. Corporate affiliates. A manufacturer may not use a 17 subsidiary corporation, affiliated corporation, partnership, association, or other person 18 to accomplish what would otherwise be prohibited conduct under this chapter. This 19 section does not limit the right of an entity included within the scope of this section to 20 engage in reasonable and appropriate business practices consistent with an existing 21 trade practice that is not prohibited by this chapter. 22 Article 2. Licensing. 23 Sec. 45.25.100. Licenses required. A person may not act as a new or used 24 motor vehicle dealer or a motor vehicle salesperson or as a motor vehicle 25 manufacturer, factory branch, factory representative, distributor, distributor branch, 26 distributor representative, administrator, wholesaler, or subsidiary engaged in the 27 business of selling, leasing, brokering, or exchanging motor vehicles in this state 28 without first obtaining a license as provided in this chapter. 29 Sec. 45.25.110. Application and issuance of license. (a) An application for 30 a license required under this chapter shall be made on a form prescribed by the 31 commissioner and must contain the information that the commissioner reasonably
01 believes is necessary for the issuance of the license. 02 (b) An applicant for a license may apply for issuance of a license by 03 complying with the application process specified in this chapter and the regulations 04 adopted by the commissioner. 05 (c) The commissioner shall issue a license applied for in compliance with the 06 provisions of this chapter when the commissioner determines that the applicant meets 07 the requirements of this chapter and regulations adopted by the commissioner. A 08 license shall be timely issued and may not be unreasonably withheld. 09 Sec. 45.25.120. Manufacturer license. (a) The commissioner may issue a 10 manufacturer license that permits the licensee to engage in the business of 11 (1) constructing or assembling vehicles of the type subject to 12 registration under AS 28.10 at an established place within the state; 13 (2) selling and distributing the licensee's vehicles, parts, accessories, 14 and services to its franchised dealers; and 15 (3) contacting prospective authorized dealers for the purpose of 16 making or promoting the sale of the licensee's vehicles, parts, accessories, and 17 services. 18 (b) An application for a license for a manufacturer must contain the address of 19 the manufacturer's principal place of business, the address where notices may be sent, 20 and the address of the manufacturer's registered agent in this state and must be 21 accompanied by the manufacturer's annual report, a list of its franchised new motor 22 vehicle dealers in this state, and the annual fee. 23 (c) An applicant for licensing by the commissioner as a manufacturer that uses 24 an identical or substantially similar franchise form agreement for its dealers or 25 distributors in this state shall, as a condition for the issuance of a license, file with the 26 commissioner a copy of the franchise form agreement and all addenda and 27 supplements to the agreement. 28 (d) The annual fee for a fiscal year or part of a fiscal year for a manufacturer 29 license is $1,500. 30 Sec. 45.25.130. Manufacturer representative license. (a) The 31 commissioner may issue a manufacturer representative license that permits the
01 licensee to engage in the business of contacting the manufacturer's respective 02 franchised dealers for the purpose of making or promoting the sale of the 03 manufacturer's vehicles, parts, accessories, and services. 04 (b) An application for a manufacturer representative license must contain the 05 name and address of the manufacturer, the name of the manufacturer representative, a 06 list of the franchised new motor vehicle dealers the representative contacts in this 07 state, and the annual fee. 08 (c) The annual fee for each fiscal year or part of a fiscal year for a 09 manufacturer representative license is $50. 10 Sec. 45.25.140. Dealer license. (a) The commissioner may issue a motor 11 vehicle dealer license that permits the licensee to engage in the business of servicing, 12 selling, leasing, brokering, or exchanging new and used vehicles of any kind and to 13 engage in all other business pursuits that are reasonably associated with a new or used 14 vehicle sales and service business. 15 (b) A motor vehicle dealer license permits a licensee who is an owner or part 16 owner of the business of the licensee to act as a vehicle salesperson without obtaining 17 a motor vehicle salesperson license. 18 (c) A motor vehicle dealer license shall be issued for a period of two fiscal 19 years. The fee for all or part of the license period is $400. 20 Sec. 45.25.150. Dealer required to maintain principal place of business. 21 An applicant for a dealer license must have a principal place of business in this state. 22 If a dealer changes the site or location of a principal place of business, the dealer shall 23 immediately upon making the change notify the commissioner, and a new license shall 24 be granted for the unexpired portion of the term of the existing license if the new 25 location meets all the requirements for a principal place of business. If a dealer ceases 26 to be in possession of a principal place of business, the dealer shall immediately notify 27 the commissioner and, upon demand by the commissioner, shall deliver the dealer 28 license to the commissioner. A license delivered to the commissioner shall be retained 29 until the commissioner determines that the licensee has a principal place of business in 30 this state. An unexpired dealer license delivered to the commissioner and returned to 31 the dealer as required by this section shall be returned to the dealer without charge.
01 Sec. 45.25.160. Multiple dealer locations. This chapter may not be 02 construed to prevent a dealer from conducting the business for which the dealer is 03 licensed at one or more licensed supplemental lots or locations not contiguous to the 04 dealer's principal place of business but operated and maintained in conjunction with it. 05 Sec. 45.25.170. Salesperson license. (a) The commissioner may issue a 06 motor vehicle salesperson license to a person employed by a motor vehicle dealer. 07 (b) A motor vehicle salesperson license is valid for three years. The fee for a 08 motor vehicle salesperson license is $60. The fee for changing the name of the dealer 09 by whom the salesperson is employed is $40. 10 (c) An applicant for a motor vehicle salesperson license may be allowed to act 11 as a salesperson under a temporary license issued by the commissioner for a maximum 12 period of 60 days from the date of application. The fee for a temporary license is $20. 13 Sec. 45.25.180. Display and custody of dealer and salesperson licenses; 14 pocket cards. (a) A dealer shall conspicuously display the motor vehicle dealer 15 license in the dealer's principal place of business and a copy of the license at any other 16 lot or location of the dealer. 17 (b) The commissioner shall prepare and deliver a pocket card that will certify 18 that the person whose name appears on the card is a licensed dealer or licensed motor 19 vehicle salesperson, as the case may be. The pocket card of a licensed motor vehicle 20 salesperson must also contain the name and address of the salesperson's employing 21 dealer, a current photograph of the salesperson, and the expiration date of the 22 salesperson's license. A licensed motor vehicle salesperson shall, on request, display 23 the pocket card. 24 Sec. 45.25.190. Restrictions on salesperson licenses. A motor vehicle 25 salesperson license must conspicuously show the name of the motor vehicle dealer 26 that employs the salesperson. A salesperson may not be employed by more than one 27 dealer at a time. 28 Sec. 45.25.200. Duplicate license fee. The department may issue a duplicate 29 license, salesperson or dealer pocket card, or other licensing documents at a licensee's 30 request upon payment of a fee of $20. A fee may not be imposed if the license card or 31 document is required to be reissued as a result of an error by the department.
01 Sec. 45.25.210. Sanctions, denial, revocation, or suspension of license. (a) 02 The commissioner may deny an application for a license, revoke or suspend a license, 03 place on probation a person whose license has been suspended, or reprimand a 04 licensee for any of the following reasons: 05 (1) material misrepresentation on an application or in other 06 information filed under this chapter or regulations of the commissioner; 07 (2) conduct for which the person may be held responsible under 08 AS 45.25.700; or 09 (3) failure to maintain the qualifications of the license. 10 (b) An existing license may not be denied, revoked, or suspended and 11 disciplinary action may not be taken under this section except after a hearing 12 conducted by the department as provided by AS 44.62.330 - 44.62.630. 13 Article 3. Franchise Agreements. 14 Sec. 45.25.300. Content, filing, and review of franchise agreements and 15 amendments. (a) The terms and conditions in a motor vehicle franchise agreement 16 that are inconsistent with the law of this state do not have any force or effect. 17 (b) A manufacturer who is licensed by the commissioner under this chapter 18 and who uses an identical or substantially similar franchise form agreement for its 19 franchisees in this state shall file with the commissioner a copy of the franchise form 20 agreement and all addenda and supplements to the agreement. 21 (c) A manufacturer or the manufacturer's subsidiary licensed by the 22 commissioner under this chapter shall, not later than 60 days before the date of a 23 revision, modification, or addition to the franchise form agreement, file a copy of the 24 revision, modification, or addition with the commissioner and include with the 25 notification 26 (1) a copy of the franchise form agreement, which must include all of 27 the proposed revisions, modifications, and additions to the agreement and all addenda 28 and supplements to the agreement; and 29 (2) an affidavit from the manufacturer that confirms that a copy of the 30 proposed revisions, modifications, and additions have been delivered to the 31 manufacturer's or subsidiary's dealers and distributors in this state; and
01 (3) a separate statement that identifies all proposed substantive 02 revisions, modifications, and additions. 03 (d) A manufacturer or the manufacturer's subsidiary licensed under this 04 chapter may not offer a franchise agreement or an addendum or supplement to the 05 agreement to a dealer in the state until the manufacturer or the manufacturer's 06 subsidiary has complied with this section. 07 (e) The commissioner may investigate or prevent violations of this section. 08 Sec. 45.25.310. Petition by franchised dealer. (a) A franchised new motor 09 vehicle dealer who believes that a manufacturer with whom the dealer holds a 10 currently valid franchise has violated or is violating any provision of this chapter may 11 file a petition with the commissioner naming the manufacturer and setting out the 12 factual and legal basis for the petition. The commissioner shall promptly forward a 13 copy of the petition to the named manufacturer, requesting a reply to the petition 14 within 30 days. 15 (b) Allowing for sufficient time for the parties to conduct discovery, the 16 commissioner or a designee may hold an evidentiary hearing and render findings of 17 fact and conclusions of law based on the evidence presented. 18 Sec. 45.25.320. Granting additional franchises. (a) A manufacturer or 19 manufacturer representative may not enter into a franchise establishing an additional 20 new motor vehicle dealer or relocating an existing new motor vehicle dealer into a 21 market area where the same line-make is already represented by a dealer unless the 22 manufacturer or manufacturer representative first provides written notice to the 23 commissioner and each new motor vehicle dealer in that line-make in the market area 24 of the manufacturer's or manufacturer representative's intention to establish an 25 additional dealer or to relocate an existing dealer within or into that market area. 26 Within 30 days after receiving notice from the manufacturer or manufacturer 27 representative or within 30 days after the end of an appeal procedure provided by the 28 manufacturer, a new motor vehicle dealer in that market area may file a protest with 29 the commissioner to the establishment or relocation of the new motor vehicle dealer. 30 If a protest is timely filed, the commissioner shall promptly provide notice of the 31 protest to the manufacturer or the manufacturer representative and shall schedule a
01 hearing on the protest. A manufacturer may not establish or relocate the proposed new 02 motor vehicle dealer if the commissioner determines that there is good cause for not 03 permitting the addition or relocation of the new motor vehicle dealer. 04 (b) The fact that a manufacturer desires an additional share of the market does 05 not, by itself, constitute good cause to add a new motor vehicle dealer or relocate an 06 existing motor vehicle dealer in the market area. 07 (c) In determining whether good cause exists for not permitting the entrance 08 into or relocation of an additional new motor vehicle dealer for the same line-make, 09 the commissioner shall take into consideration the existing market circumstances, 10 including 11 (1) the lasting nature of the existing dealer's investment, the 12 commitments of the dealer to the dealership, the value of time and effort devoted to 13 building the business, and any real property of the dealer used by the dealership, 14 whether or not held in the name of the dealership; 15 (2) growth or decline in population, density of population, and new car 16 registrations in the market area; 17 (3) effect on the consumers in the market area; 18 (4) whether it is injurious or beneficial to the public welfare for an 19 additional new motor vehicle dealer to be established; 20 (5) whether the new motor vehicle dealers of the same line-make in 21 that market area are providing adequate competition and convenient customer care for 22 the motor vehicles of the same line-make in the market area, including the adequacy of 23 motor vehicle sales and service facilities, equipment, supply of motor vehicle parts, 24 and qualified service personnel; 25 (6) whether the establishment of an additional new motor vehicle 26 dealer or relocation of an existing new motor vehicle dealer in the market area would 27 increase competition in a manner that is in the long-term public interest; and 28 (7) the effect on the relocating dealer of a denial of its relocation into 29 the relevant market area. 30 (d) The department shall conduct a protest hearing and render a final 31 determination within 180 days after a protest is filed. Under this subsection,
01 (1) in a hearing involving a proposed additional new motor vehicle 02 dealer, the manufacturer or distributor has the burden of proof, and in a proceeding 03 involving the relocation of an existing new motor vehicle dealer, the dealer seeking to 04 relocate has the burden of proof; and 05 (2) if the commissioner determines, following a hearing, that good 06 cause does not exist for refusing to permit the proposed additional or relocated new 07 motor vehicle dealer, the dealer seeking the proposed additional or relocated motor 08 vehicle dealer shall, within two years after the commissioner's determination, obtain a 09 license from the commissioner for the sale of vehicles at the proposed site, and shall 10 actually commence selling at the proposed site new motor vehicles of all line-makes 11 for which the dealer has a franchise, as allowed by the commissioner; failure to obtain 12 a license and commence sales within two years after the commissioner's determination 13 constitutes waiver by the dealer of the dealer's right to operate the additional or 14 relocated new motor vehicle dealer and requires a new notification, a new hearing, and 15 a new determination as described in this paragraph. 16 (e) For purposes of this section, the addition, creation, or operation of a 17 facility that is not physically part of, contiguous to, or within the defined market area 18 of an existing licensed new motor vehicle dealer, whether or not owned or operated by 19 a person or other entity holding a franchise, at which warranty service work that is 20 authorized or reimbursed by a manufacturer is performed or at which new motor 21 vehicles are offered for sale to the public is considered an additional new motor 22 vehicle dealer requiring compliance with the provisions of this section. 23 Sec. 45.25.330. Termination, cancellation, or nonrenewal of franchises. 24 (a) A manufacturer may not terminate, cancel, or fail to renew a franchise with a new 25 motor vehicle dealer unless the manufacturer has 26 (1) satisfied the notice requirements of AS 45.25.340; 27 (2) shown that there is good cause for the termination, cancellation, or 28 nonrenewal of the franchise; and 29 (3) acted in good faith. 30 (b) A new motor vehicle dealer may petition the commissioner for a 31 determination as to the existence of good cause and good faith for the termination,
01 cancellation, or nonrenewal of a franchise. A petition must be filed within 10 days 02 after the dealer receives notice of the termination, cancellation, or nonrenewal from 03 the manufacturer as required under AS 45.25.340. The commissioner shall promptly 04 give notice to the manufacturer when a timely petition is filed. A franchise that is the 05 subject of the petition shall continue in effect pending the commissioner's decision. 06 The department shall conduct a hearing and render a final determination within 180 07 days after a petition has been filed. 08 (c) Good cause exists, for purposes of a termination, cancellation, or 09 nonrenewal of a franchise, if there is a failure by the new motor vehicle dealer 10 (1) to comply with a provision of the franchise that is both reasonable 11 and of material significance to the franchise relationship and the dealer received 12 written notice of the failure within 180 days after the manufacturer first learned of the 13 failure; 14 (2) relating to the performance of sales or service by the new motor 15 vehicle dealer and 16 (A) the new motor vehicle dealer received written notice from 17 the manufacturer of the failure; 18 (B) the notice stated that the notice of failure in performance 19 was provided as required by this section; 20 (C) the new motor vehicle dealer was afforded a reasonable 21 opportunity, for a period of not less than 180 days, to remedy the failure; and 22 (D) the new motor vehicle dealer failed to demonstrate 23 substantial progress towards compliance with the manufacturer's performance 24 criteria during the period and the new motor vehicle dealer's failure was not 25 primarily due to economic or market factors within the dealer's market area 26 that were beyond the dealer's control. 27 (d) The manufacturer has the burden of proof under this section to show that 28 good cause exists for a termination, cancellation, or nonrenewal. 29 Sec. 45.25.340. Notice of termination, cancellation, and nonrenewal. (a) 30 A manufacturer shall furnish notice of termination, cancellation, or nonrenewal to a 31 new motor vehicle dealer at least
01 (1) 90 days before the effective date of a termination, cancellation, or 02 nonrenewal, except as required under (2) or (3) of this subsection; 03 (2) 15 days before the effective date of a termination, cancellation, or 04 nonrenewal when the new motor vehicle dealer 05 (A) is insolvent or is the subject of a bankruptcy or receivership 06 proceeding; 07 (B) has failed to conduct its customary sales and service 08 operations during its customary business hours for seven consecutive business 09 days; this subparagraph does not apply to closures due to acts of God or 10 circumstances beyond the direct control of the new motor vehicle dealer; 11 (C) has had a license revoked and the license is required in 12 order to operate as a dealer; or 13 (D) is convicted of a felony involving moral turpitude or fraud 14 under the law of this state, another state, a territory, or the District of 15 Columbia; 16 (3) 180 days before the effective date of the termination or cancellation 17 if the manufacturer or distributor is discontinuing the sale of the product line. 18 (b) Notice required under this section must be in writing and sent by certified 19 mail or personally delivered to the new motor vehicle dealer, and must contain 20 (1) a statement of intention to terminate, to cancel, or not to renew the 21 franchise; 22 (2) a statement of the reasons for the termination, cancellation, or 23 nonrenewal; and 24 (3) the date on which the termination, cancellation, or nonrenewal 25 takes effect. 26 Sec. 45.25.350. Compensation for termination, nonrenewal, or 27 cancellation. (a) If a franchise is terminated, not renewed, or canceled by a 28 manufacturer, the manufacturer shall compensate the new motor vehicle dealer by 29 paying for franchise inventory or other items by purchasing the 30 (1) inventory consisting of new motor vehicles that have been acquired 31 from the manufacturer within the preceding 24 months at a price not less than the
01 original manufacturer's price to the dealer, if the motor vehicles have not been altered 02 or damaged, the motor vehicles have not been driven more than 200 miles, and 03 certificates of title have not been issued; 04 (2) unused, undamaged, and unsold supplies and parts purchased from 05 the manufacturer or a supplier approved or required by the manufacturer at a price not 06 less than the manufacturer's or approved supplier's current price to the dealer, if the 07 supplies and parts are currently offered for sale by the manufacturer or a supplier in a 08 current parts catalog and are in salable condition; 09 (3) equipment, signs, and furnishings that have not been altered or 10 damaged and that have been required by the manufacturer to be purchased by the new 11 motor vehicle dealer from the manufacturer or an approved source at fair market 12 value; and 13 (4) special tools that have not been altered or materially damaged and 14 that have been required by the manufacturer or distributor to be purchased by the new 15 motor vehicle dealer from the manufacturer or distributor or an approved source at fair 16 market value within five years immediately preceding the termination, nonrenewal, or 17 cancellation of the franchise. 18 (b) The manufacturer shall pay compensation required under (a) of this section 19 within 90 days after the effective date of the termination, cancellation, or nonrenewal 20 if the new motor vehicle dealer has clear title to the inventory and has conveyed title 21 and possession of all compensable items to the manufacturer. 22 Sec. 45.25.360. Dealer facilities assistance. (a) If a manufacturer terminates, 23 cancels, or does not renew a franchise, the manufacturer shall compensate the dealer 24 for facilities as follows: 25 (1) if the new motor vehicle dealer is leasing the dealer facilities from 26 a lessor other than the manufacturer, the manufacturer shall pay the new motor vehicle 27 dealer a sum equal to the rent for the unexpired term of the lease or two years' rent, 28 whichever is less, or a longer term as is provided in the franchise agreement between 29 the dealer and manufacturer; or 30 (2) if the new motor vehicle dealer owns the dealer facilities, the 31 manufacturer shall pay the new motor vehicle dealer a sum equal to the reasonable
01 rental value of the dealer facilities for two years. 02 (b) This section does not relieve a dealer of the obligation to mitigate damages 03 under the lease, prevent a manufacturer from occupying and using the dealer facilities 04 while paying rent, or preclude a manufacturer from negotiating a lease termination, 05 sublease, or new lease. 06 (c) This section does not apply if the termination, nonrenewal, or cancellation 07 of the franchise agreement is the result of the dealer's 08 (1) voluntary act; 09 (2) insolvency; 10 (3) license revocation; or 11 (4) conviction of a felony involving moral turpitude or fraud. 12 Sec. 45.25.370. Transfer of dealer ownership. (a) A manufacturer may not 13 unreasonably prevent or refuse to honor a transfer of ownership of a dealer. 14 (b) A new motor vehicle dealer may appoint by will or another written 15 instrument a designated successor to succeed in the ownership interest of the dealer, 16 including the franchise, upon the death or incapacity of the owner. 17 (c) A manufacturer may object to an owner's appointment of a designated 18 successor under the following procedure: 19 (1) within 30 days after receiving written notice of the identity of the 20 owner's designated successor and general information as to the financial ability and 21 qualifications of the designated successor, the manufacturer shall send the owner and 22 designated successor notice of the objection, by registered or certified mail, return 23 receipt requested; a notice of objection must state in detail all facts that constitute the 24 basis for the contention on the part of the manufacturer or distributor that good cause 25 exists for rejection of the designated successor; failure by the manufacturer to send a 26 notice of objection constitutes waiver by the manufacturer of the right to object to the 27 appointment of the designated successor; 28 (2) within 30 days after receipt of a manufacturer's notice of objection, 29 the owner or the designated successor may file a written request with the 30 commissioner that the commissioner determine whether good cause exists for 31 rejection of the designated successor; if a request is timely filed, the commissioner
01 shall promptly inform the affected manufacturer that a request has been filed; 02 (3) the commissioner may hold a hearing on the objection and shall 03 make a determination within 180 days after receipt of the written request from the 04 owner or designated successor; in determining whether good cause exists for rejection 05 of the owner's appointed designated successor, the manufacturer or distributor has the 06 burden of proof. 07 (d) Nothing in this section precludes a manufacturer, upon receipt of written 08 notice from a dealer of the identity of the dealer's designated successor, from requiring 09 that the designated successor promptly provide personal and financial data reasonably 10 necessary to determine the financial ability and qualifications of the designated 11 successor. However, a request for additional information may not delay a time period 12 imposed under this section. 13 (e) In the event that death or incapacity of the owner occurs before the time a 14 manufacturer receives notice of the owner's appointment of a designated successor or 15 before the commissioner had made a determination as provided in (c) of this section, 16 the existing franchise shall remain in effect, and the designated successor shall 17 succeed to all of the owner's rights and obligations in the dealer and under the 18 franchise until a determination is made by the commissioner or the rights of the parties 19 have otherwise changed as provided in this chapter. 20 (f) Except as provided in (g) of this section, a designated successor of a 21 deceased or incapacitated owner of a new motor vehicle dealer appointed by an owner 22 in substantial compliance with this section succeeds at the time of death or incapacity 23 to all of the ownership rights and obligations of the owner in the new motor vehicle 24 dealer and under the existing franchise. 25 (g) Within 60 days after the death or incapacity of the owner, a designated 26 successor appointed in substantial compliance with this section shall give the affected 27 manufacturer written notice of the succession to the ownership of the new motor 28 vehicle dealer. 29 (h) A designated successor is bound by all terms and conditions of the 30 franchise in effect between the manufacturer and the owner at the time of the owner's 31 death or incapacity if required in writing by the manufacturer subsequent to the
01 owner's death or incapacity. 02 (i) This section does not preclude an owner of a new motor vehicle dealer 03 from designating a person as a successor by written instrument filed with the 04 manufacturer. If there is an inconsistency between the successor named in the written 05 instrument and the designated successor otherwise appointed by the owner consistent 06 with the provisions of this section, the written instrument filed with the manufacturer 07 determines the appointment of the successor, unless the written instrument has been 08 revoked by the owner of the new motor vehicle dealer in writing to the manufacturer. 09 (j) Notwithstanding the terms of the franchise agreement, in the event of a 10 proposed sale or other transfer of a dealership, the manufacturer may not exercise a 11 right of first refusal to acquire the dealership or the dealership assets where the 12 proposed sale or transfer is conditioned on the manufacturer's or dealer's entering into 13 a franchise with the proposed new owner or other transferee unless all the following 14 requirements are met: 15 (1) the manufacturer notifies the dealer in writing within 30 days of the 16 manufacturer's receipt of the completed proposal for the proposed sale or other 17 transfer; 18 (2) the exercise of the right of first refusal results in the dealer 19 receiving the same consideration as or greater consideration than the dealer contracted 20 to receive for the proposed sale or other transfer; 21 (3) the proposed sale or transfer does not involve the sale or other 22 transfer to 23 (A) a family member of the dealer; 24 (B) a qualified manager; 25 (C) a person who has been employed continuously by the 26 dealer for at least 10 years; or 27 (D) a person, other than an individual, controlled by a person 28 described in (A) - (C) of this paragraph; and 29 (4) the manufacturer agrees to pay the reasonable expenses, including 30 attorney fees that do not exceed the usual, customary, and reasonable fees charged for 31 similar work done for other clients incurred by the proposed purchaser or transferee
01 before the manufacturer's exercise of the right of first refusal in negotiating and 02 implementing the contract for the proposed sale or other transfer; notwithstanding the 03 foregoing, the payment of the expenses is not required if the dealer has not submitted 04 or caused to be submitted an accounting of the expenses within 30 days of the dealer's 05 receipt of the manufacturer's written request for the accounting; a manufacturer may 06 request an accounting before exercising the right of first refusal. 07 Article 4. Manufacturer Practices. 08 Sec. 45.25.400. Prohibited manufacturer trade practices. Notwithstanding 09 the terms of the franchise agreement, a manufacturer may not 10 (1) modify or replace a dealer agreement of any kind with a succeeding 11 dealer agreement that would adversely alter the rights or obligations of a new motor 12 vehicle dealer under an existing dealer agreement or that substantially impairs the 13 sales, service obligations, or investment of the new motor vehicle dealer; 14 (2) require, coerce, or attempt to coerce a new motor vehicle dealer to 15 (A) order or accept delivery of a new motor vehicle with 16 special features, accessories, or equipment not included in the list price of the 17 motor vehicles as publicly advertised by the manufacturer; 18 (B) participate monetarily in an advertising campaign or 19 contest, or to purchase unnecessary or unreasonable quantities of any 20 promotional materials, training materials, training programs, or showroom or 21 other display decorations or materials at the expense of the new motor vehicle 22 dealer; nothing in this subparagraph precludes a manufacturer from including 23 an unitemized uniform charge in the base price of the new motor vehicle 24 charged to the dealer, unless the charge is attributable to advertising costs 25 incurred or to be incurred by the manufacturer in the ordinary course of its 26 business, if the uniform charge is in effect for vehicles sold to dealers in all 27 other states; 28 (C) change the capital structure of the new motor vehicle dealer 29 or the means by or through which the new motor vehicle dealer finances the 30 operation of the dealer if the new motor vehicle dealer at all times meets any 31 reasonable capital standards determined by the manufacturer under uniformly
01 applied criteria, except that a change in the capital structure does not cause a 02 change in the principal management or have the effect of a sale of the franchise 03 without the consent of the manufacturer; consent required under this 04 subparagraph may not be unreasonably withheld; 05 (D) refrain from participation in the management of, 06 investment in, or acquisition of another line of new motor vehicles or related 07 products; this subparagraph applies only if the new motor vehicle dealer 08 maintains a reasonable line of credit for each make-line of new motor vehicle 09 and the new motor vehicle dealer remains in compliance with any reasonable 10 capital standards and facilities requirements of the manufacturer; the 11 reasonable facilities requirements may not include requirements that a new 12 motor vehicle dealer establish or maintain exclusive facilities, personnel, or 13 display space when the requirements would be unreasonable in light of current 14 economic conditions and would not otherwise be justified by reasonable 15 business considerations; 16 (E) change the location of the dealership, or to make any 17 substantial alterations to the dealership premises or facilities, when the change 18 or alteration would be unreasonable or when the change or alteration is without 19 written assurance of a sufficient supply of new motor vehicles to justify the 20 expansion in light of the current market and economic conditions; 21 (F) prospectively assent to a release, assignment, novation, 22 waiver, or estoppel that would relieve a person from liability to be imposed by 23 law or to require a controversy between a new motor vehicle dealer and a 24 manufacturer to be referred to a person other than a court or the commissioner 25 if the referral would be binding on the new motor vehicle dealer; 26 (G) sell a new motor vehicle at a minimum or maximum price 27 that has been fixed by the manufacturer; 28 (H) pay more for a delivery or destination charge than for a 29 delivery or destination charge in the contiguous United States if the 30 manufacturer has an equalized delivery or destination charge in the contiguous 31 United States;
01 (I) deliver new motor vehicles or otherwise participate in a plan 02 where the manufacturer sells new vehicles directly or through a subsidiary to a 03 customer through electronic or other means; 04 (J) offer or adhere to menu prices set by the manufacturer for 05 service, parts, or accessories; or 06 (K) participate in a manufacturer's national or regional 07 marketing promotion that arbitrarily and adversely economically affects the 08 dealer; 09 (3) sell or offer to sell dealer-obligor service contracts; 10 (4) within a reasonable time after receipt of a retail order from a dealer 11 having a franchise for the retail sale of a new motor vehicle sold or distributed by the 12 manufacturer or distributor, delay, refuse, or fail to deliver motor vehicles or motor 13 vehicle parts or accessories in reasonable quantities relative to the new motor vehicle 14 dealer's facilities and sales potential in the new motor vehicle dealer's market area; the 15 delivery to another dealer of a motor vehicle of the same model as and similarly 16 equipped to the vehicle ordered by a motor vehicle dealer who has not received 17 delivery but who has placed a written order for the vehicle before the order of the 18 dealer receiving the vehicle is evidence of a delayed delivery of or refusal to deliver a 19 new motor vehicle to a new motor vehicle dealer within a reasonable time; this 20 paragraph does not apply to a delay or refusal caused by acts beyond the control of the 21 manufacturer; in this paragraph, "retail order" means an order placed for a buyer who 22 is not a licensed motor vehicle dealer franchised to sell the same line-make; 23 (5) refuse to disclose to a new motor vehicle dealer handling a line- 24 make the manner and mode of allocation and distribution of that line-make within the 25 state; 26 (6) count a vehicle that is still in transit between the manufacturing or 27 assembly plant and the dealer as a vehicle available for sale or in the dealer's supply of 28 vehicles for sale if counting that vehicle as available for sale or in the dealer's supply 29 adversely affects a system under which the manufacturer allocates vehicles to its 30 dealers in other states; 31 (7) require certification of any classification of employee of a dealer in
01 this state for a job-related function or reimbursement unless the manufacturer provides 02 in this state the same or greater frequency, level, quality, and type of training for a 03 dealer or dealership employee in this state that it provides for dealers and dealership 04 employees in other states; 05 (8) require certification of a dealer or a dealership employee for a job 06 function if the certification requirement would adversely affect a motor vehicle 07 owner's or lessee's receiving prompt warranty or service contract repairs at the closest 08 possible franchised dealership facility or dealer subcontractor facility; 09 (9) refuse to pay its dealer for a category of warranty repair or service 10 contract repair that was actually performed by the dealer in this state for the line-make 11 of vehicle for which the dealer has a franchise if the repair was covered by the 12 manufacturer's warranty or service contract at any other dealership that has a franchise 13 to sell that line-make of motor vehicle in this state or in a majority of the other 49 14 states of the United States; 15 (10) award money, goods, services, or any other benefit to an 16 employee of a new motor vehicle dealer, either directly or indirectly, unless the benefit 17 is promptly accounted for and transmitted to, or approved by, the new motor vehicle 18 dealer; 19 (11) increase the price of a new motor vehicle that a new motor vehicle 20 dealer has ordered and that the manufacturer has accepted for immediate delivery for 21 private retail or private commercial consumers before the new motor vehicle dealer 22 receives the manufacturer's written official price increase notification; a sales contract 23 signed by a private retail consumer or a purchase order signed by a private commercial 24 customer constitutes evidence of an order if the vehicle is in fact delivered to that 25 customer; price differences applicable to new models or series may not be considered 26 a price increase or price decrease; this paragraph does not apply to price changes 27 resulting from the addition to a new motor vehicle of required or optional equipment, 28 revaluation of the United States dollar, in the case of foreign-make vehicles or 29 components, an increase in transportation charges due to increased rates imposed by 30 carriers, or new tariffs or duties imposed by the United States or another governmental 31 authority;
01 (12) prevent or attempt to prevent a dealer from receiving fair and 02 reasonable compensation for the value of a franchised business transferred as required 03 by this chapter; 04 (13) offer a refund or other type of inducement to a person for the 05 purchase of a new motor vehicle of a certain line-make to be sold to the state or a 06 political subdivision of the state without making the same offer available upon request 07 to all other new motor vehicle dealers franchised to sell the same line-make in the 08 state; 09 (14) release to an outside party, except under subpoena or as otherwise 10 required by law, confidential business, financial, or personal information that may be 11 provided by a new motor vehicle dealer to the manufacturer, without the express 12 written consent of the new motor vehicle dealer; 13 (15) deny or attempt to deny a new motor vehicle dealer the right of 14 free association with another new motor vehicle dealer for any lawful purpose; 15 (16) unfairly discriminate among new motor vehicle dealers with 16 respect to warranty reimbursements or authority granted new motor vehicle dealers to 17 make warranty adjustments with retail customers; 18 (17) engage in an unfair trade practice described in this chapter against 19 or unfairly compete with a new motor vehicle dealer located in this state; 20 (18) sell a new vehicle to a private purchaser in this state or broker the 21 sale of a new motor vehicle to a private purchaser in this state; 22 (19) terminate a franchise because of the death or incapacity of an 23 owner, if the owner is not listed in the franchise as one on whose expertise and 24 abilities the manufacturer relied in the granting of the franchise; 25 (20) require, coerce, or attempt to coerce a new motor vehicle dealer to 26 establish or maintain exclusive facilities, personnel, or display space when the 27 requirement would not be justified by reasonable business considerations; 28 (21) require, coerce, or attempt to coerce a dealer to disclose to the 29 manufacturer information concerning a customer or a third party if the customer or 30 third party objects or the disclosure is otherwise unlawful; 31 (22) resort to or use a false or misleading advertisement in the conduct
01 of its business as a manufacturer in this state; 02 (23) knowingly make, either directly or through any agent or 03 employee, a material statement that is false or misleading and that induces a new 04 motor vehicle dealer to enter into an agreement or franchise or to take action that is 05 materially prejudicial to the new motor vehicle dealer; 06 (24) require, coerce, or attempt to coerce a new motor vehicle dealer to 07 purchase or order a new motor vehicle as a precondition of purchasing, ordering, or 08 receiving other new motor vehicles; this paragraph does not prevent a manufacturer 09 from requiring that a new motor vehicle dealer fairly represent and inventory the full 10 line of new motor vehicles that are covered by the franchise agreement; 11 (25) require, coerce, or attempt to coerce a new motor vehicle dealer to 12 sell, transfer, or otherwise issue stock or other ownership interest in the dealership 13 corporation to a general manager or other person involved in the management of the 14 dealership other than the dealer principal or dealer operator named in the franchise, 15 unless the dealer principal or dealer operator is an absentee owner who is not involved 16 in the operation or management of the dealership on a regular basis; 17 (26) vary the price charged to a franchised new motor vehicle dealer 18 located in this state for new motor vehicles or the reimbursement paid to a franchised 19 new motor vehicle dealer for parts and labor reimbursement for warranty, policy, or 20 service contract repairs based on the dealer's (A) purchase of new facilities, supplies, 21 tools, equipment, or other merchandise from the manufacturer; (B) relocation, 22 remodeling, repair, or renovation of an existing dealership or construction of a new 23 facility; or (C) participation in training programs sponsored, endorsed, recommended, 24 or required by the manufacturer; for purposes of this paragraph, the price of a vehicle 25 includes the manufacturer's use of rebates, credits, or other consideration that has the 26 effect of causing a variance in the price of a new motor vehicle offered to a franchised 27 dealer located in the state; this paragraph does not preclude a manufacturer from 28 establishing sales contests or promotions that are of limited duration and that provide 29 or award dealers or consumers a rebate or incentive, or prohibit a manufacturer from 30 providing assistance or encouragement to a franchised dealer to remodel renovate, 31 recondition, or relocate the dealer's existing facilities, if the assistance,
01 encouragement, or reward is not determined on a per vehicle basis; 02 (27) require that, in a civil or administrative proceeding in which a 03 new motor vehicle dealer asserts a claim, right, or defense arising under this chapter or 04 under the franchise, the dealer or a nonprevailing party compensate the manufacturer 05 or prevailing party for court costs, attorney fees, or other expenses incurred in 06 litigation; 07 (28) require that a franchised new motor vehicle dealer located in this 08 state pay an extra fee, purchase unreasonable or unnecessary quantities of advertising 09 displays or other materials, or remodel, renovate, or recondition the dealer's existing 10 facilities in order to receive a particular model or series of vehicles manufactured or 11 distributed by the manufacturer for which the dealer has a valid franchise; this 12 paragraph does not prohibit or prevent a manufacturer from requiring that a franchised 13 dealer located in this state purchase special tools or equipment, stock reasonable 14 quantities of certain parts, or participate in training programs that are reasonably 15 necessary for the dealer to sell or service a model or series of motor vehicles; 16 (29) require a separate dealer agreement with a new motor vehicle 17 dealer already a party to a dealer agreement with the manufacturer for the retail sale or 18 leasing of a particular new motor vehicle model made or distributed by the 19 manufacturer or restrict the right of a dealer to sell all products marketed under the 20 trademark for which the dealer has a valid franchise; 21 (30) offer a service contract for its own line or make of vehicle or a 22 competitive make of vehicle through a new motor vehicle dealer in this state that is a 23 dealer-obligor service contract or that could be construed in any way as a contract 24 between the dealer and the purchaser or that the dealer is a maker of the service 25 contract; or 26 (31) offer a service contract for sale to a resident of this state except 27 through a dealer licensed in this state. 28 Sec. 45.25.410. Warranty and service contract obligations. (a) A motor 29 vehicle manufacturer or manufacturer's subsidiary shall provide for timely warranty 30 repair of its vehicles through its franchised dealers that are licensed in this state under 31 the provisions of this chapter.
01 (b) A motor vehicle manufacturer or manufacturer's subsidiary shall specify in 02 writing to each of its motor vehicle dealers licensed in this state the dealer's 03 obligations for preparation, delivery, warranty, and service contract service on its 04 products or the products it covers, the schedule of compensation to be paid to a dealer 05 for parts, work, and service in connection with warranty service, recall service, and 06 service contract service or maintenance that is the responsibility of the manufacturers, 07 and the time allowances for the performance of warranty work and service. 08 (c) A schedule of warranty or service contract compensation must include 09 reasonable compensation for diagnostic work, whether or not a problem is found when 10 it has been reported by the owner, and, in addition to compensation for repair service 11 and labor, compensation for the labor required to complete and transmit warranty and 12 service contract claims and to gather and transmit substantiating documentation. 13 (d) When warranty work or service contract work is performed, service time 14 allowances must be reasonable and adequate for the work to be performed and must be 15 equal to the allowances published in the manufacturer's labor time standard manual or 16 another industry-wide recognized labor time guide manual for repairs performed by 17 experienced automotive technicians using hand tools, whichever is greater. When 18 reasonable compensation is determined under this subsection, the factors to be given 19 consideration shall include the compensation paid by other manufacturers to their 20 dealers, the retail price dealers charge their retail customers for parts used to perform 21 similar work and paid to dealers for parts, and the prevailing wage rates, including 22 employment benefits, being paid by dealers and the prevailing retail labor rate posted 23 by dealers in the community in which the dealer is doing business if the prevailing 24 rates and prices are not unreasonable. 25 (e) If a motor vehicle that is covered by a manufacturer's warranty or service 26 contract is brought to a dealer and the owner describes a concern that, if verified, 27 could reasonably lead to a covered warranty or service contract repair, the dealer shall 28 make a diligent and reasonable attempt to verify the owner's complaint, and the 29 manufacturer or administrator shall reimburse the dealer for the actual diagnosis time 30 spent at the dealer's current warranty labor rate, whether or not a covered defect or 31 failure is diagnosed. If, after a reasonable effort, the dealer is unable to verify the
01 owner's complaint, the dealer shall notify the owner in writing of the diagnostic steps 02 performed and the diagnostic results. 03 (f) When a motor vehicle that is covered by a manufacturer's warranty or 04 service contract is brought to a licensed dealer that has a franchise to sell a line-make 05 of motor vehicles in this state, if the dealer determines a motor vehicle covered by the 06 franchise has a nonconformity covered by the manufacturer's warranty or a necessary 07 repair covered by the manufacturer's service contract, and if the dealer subsequently 08 fixes the nonconformity or performs the covered repair, the manufacturer shall pay the 09 dealer for the labor associated with fixing the nonconformity or performing the 10 covered repair. 11 (g) If a manufacturer or administrator requires 12 (1) a franchised dealer to perform a diagnostic task that leads to, could 13 reasonably lead to, or confirms completion of a repair covered by a warranty or 14 service contract, the manufacturer or administrator shall reimburse the franchised 15 dealer for the actual diagnosis time at the dealer's current warranty labor rate, and the 16 labor shall be considered labor over and above the labor that is included in an 17 applicable published labor time standard or that was performed by the repairing 18 technician; 19 (2) a dealer or dealership employee to obtain prior approval before 20 performing a repair covered by a warranty or service contract, the manufacturer or 21 administrator shall reimburse the dealer at the dealer's normal warranty labor rate for 22 the actual time spent by a dealership employee to obtain the prior approval; 23 (3) a dealer or dealership employee to contact factory personnel in 24 order to obtain unpublished diagnostic processes or repair procedures or to clarify 25 diagnostic processes or repair procedures, the manufacturer or administrator shall 26 reimburse the dealer at the dealer's normal warranty labor rate for the actual time spent 27 by a dealership employee to obtain the information; 28 (4) a dealer to transmit digital images, video images, photographs, 29 documents, or other material to the manufacturer for prior approval of warranty or 30 service contract repairs, the manufacturer shall reimburse the dealer for the actual cost 31 of transmitting the material.
01 (h) A motor vehicle manufacturer or manufacturer's subsidiary may not fail to 02 (1) timely perform or, through a policy or procedure, may not cause a 03 dealer to be unable to timely perform a manufacturer's warranty obligations with 04 respect to a motor vehicle that the dealer has a franchise to sell; 05 (2) timely compensate its motor vehicle dealers licensed in this state 06 for warranty parts at the prevailing retail rate according to the requirements or other 07 factors set out in this section, or under the schedule of compensation provided the 08 dealer described in this chapter; or 09 (3) indemnify and hold harmless its franchised dealers licensed in this 10 state against a judgment for damages or a settlement agreed to by the manufacturer, 11 including court costs and reasonable attorney fees of the motor vehicle dealer, arising 12 out of a complaint, claim, or lawsuit relating to the alleged defective negligent 13 manufacture, assembly, or design or a new motor vehicle, part, or accessory, or to 14 other functions by the manufacturer, factory branch, distributor or distributor branch, 15 beyond the control of the dealer. 16 (i) A dealer or repair facility may not repair or replace an air emission related 17 component on a motor vehicle that requires emission certification without performing, 18 once the repair is complete, an emission test to verify that the repair is effective. A 19 manufacturer or administrator may not refuse to fully reimburse a dealer at the dealer's 20 current hourly warranty rate for performance of an emission test required under this 21 subsection for a repair or replacement that is covered by an emission defect warranty, 22 other warranty, or service contract. 23 (j) The power train components of a motor vehicle operated in this state must 24 operate within the manufacturer's specifications. A dealer or repair facility may not 25 repair or replace a power train component on a motor vehicle that is operated in this 26 state without performing, once the repair is complete, the necessary test to confirm 27 that the repaired or replaced component is operating within the manufacturer's 28 specifications. A manufacturer or administrator may not refuse to reimburse a dealer 29 at the dealer's current hourly warranty rate for performance of the test required under 30 this subsection to confirm that a repaired or replaced power train component covered 31 by a warranty or service contract is operating within the manufacturer's specifications.
01 (k) Operating through its dealers with franchises with the manufacturer or the 02 manufacturer's subsidiary, a new vehicle manufacturer or manufacturer's subsidiary 03 shall commence and complete repairs or maintenance covered by a new vehicle 04 warranty or service plan as quickly as possible and without unreasonable delay. A 05 motor vehicle manufacturer or administrator shall provide, at the manufacturer's 06 expense, reasonable alternate transportation for an owner whose vehicle is covered by 07 an express warranty or an authorized service plan if (1) the vehicle is unsafe or 08 inoperable and has been brought to a franchised dealer or to a subcontracting repair 09 facility working in cooperation with the franchised dealer; (2) covered repairs cannot 10 begin the same working day because of the decision of the manufacturer or 11 administrator to require prior approval before the dealer may commence the covered 12 repairs; and (3) for any reason beyond the control of the dealer, oral prior approval 13 may not be obtained that same day or repair parts for the vehicle required by the 14 manufacturer are not available at the dealership and the manufacturer or its authorized 15 suppliers cannot provide the repair parts within two working days. A manufacturer is 16 in compliance with the provisions of this subsection if the manufacturer authorizes the 17 repairing dealer to provide reasonable alternate transportation for the owner at the 18 manufacturer's expense. When a dealer is authorized to provide transportation, the 19 dealer shall attempt to provide a rental vehicle that is a similar model, or has similar 20 characteristics to the owner's vehicle, through its own rental fleet or from the fleet of 21 another licensed rental company. A manufacturer or administrator shall reimburse the 22 owner or the dealer for the cost of the rental in the same manner and time frame the 23 manufacturer or administrator uses to reimburse the dealer for warranty repairs, and 24 the manufacturer or administrator may not include the rental car expense in the 25 expenses that are used to compare the dealer to other dealers for audit purposes or for 26 the purposes of prior warranty approval. 27 (l) A manufacturer shall pay a claim made by the manufacturer's franchised 28 dealer for compensation for sales incentives, delivery, preparation, warranty repairs, 29 transportation claims, recall work, and service contract repairs, including labor, parts, 30 rental vehicle reimbursement, and other covered expenses, within 30 days after receipt 31 of a claim from the dealer. If a claim is disapproved, the dealer shall be notified in
01 writing of the grounds for disapproval. A claim not specifically disapproved in 02 writing within 30 days after receipt is considered approved and payment is due 03 immediately. A dealer's failure to comply with the specific requirements of the 04 manufacturer for processing the claim does not constitute grounds for denial of the 05 claim or reduction of the amount of compensation to the dealer as long as reasonable 06 documentation or other evidence has been presented to substantiate the claim. A 07 claim that has been approved and paid may not be charged back to the dealer unless it 08 can be shown that the claim was false or fraudulent, that the repairs were not properly 09 made according to industry standards or were unnecessary to correct the defective 10 condition, or that the dealer failed to reasonably substantiate the repairs. A 11 manufacturer or distributor may not deny a claim, reduce the amount to be reimbursed 12 to the dealer, or charge back a portion of the claim if 12 or more months have passed 13 since the claim was submitted, or if the dealer has provided reasonably sufficient 14 documentation that the dealer made a good faith attempt to perform the work in 15 compliance with the written policies and procedures of the manufacturer and actually 16 performed the work. 17 (m) A dealer may not be charged back or otherwise held liable for sales 18 incentives or charges related to motor vehicles sold by the dealer and subsequently 19 exported if the dealer can demonstrate that the dealer exercised due diligence and that 20 the sale was made in good faith and without knowledge of the purchaser's intention to 21 export the motor vehicle. 22 (n) If there is a dispute between the manufacturer and the dealer regarding a 23 matter described in this section, either party may petition the commissioner in writing, 24 within 30 days after either party has given written notice of the dispute to the other, for 25 a hearing on the dispute. This subsection does not give the commissioner authority 26 regarding the content of a manufacturer's or distributor's warranty. If a petition is filed 27 with the commissioner under this subsection, a chargeback to or payment required of a 28 dealer by a manufacturer relating to warranty parts or service compensation, or sales 29 incentives, service incentives, rebates, or other forms of incentive compensation shall 30 be stayed during the pendency of the determination by the commissioner and during 31 the pendency of any internal appeal provided by the manufacturer. Notification of
01 intent to use a manufacturer's internal appeal procedure shall be provided within 14 02 days after notification of the chargeback is received by the dealer, and the appeal shall 03 be completed and submitted by the dealer within 60 days from receipt by the dealer of 04 the manufacturer's list of specific claims scheduled for chargeback, including a 05 detailed claim-by-claim explanation of the policies the manufacturer alleges the dealer 06 has violated. 07 (o) A manufacturer may not process a chargeback against a dealer without 08 first providing the dealer with a detailed list of specific policies the dealer has violated 09 and a detailed explanation of the policy or procedure the dealer should have followed 10 to avoid the chargeback. 11 (p) A manufacturer or administrator may not contract with a person to audit a 12 dealer in this state for compliance with any of the manufacturer's policies or 13 procedures if the auditor's compensation is in any way based on the amount charged 14 back to the dealer or recovered from the dealer. 15 (q) A manufacturer or administrator may not require or cause, for any reason, 16 a motor vehicle owner to take a vehicle covered by a warranty for warranty repair to a 17 dealership in this state other than the manufacturer's franchised dealership closest to 18 the motor vehicle owner's residence or to the location where the motor vehicle's 19 nonconformity became apparent to the motor vehicle owner, whichever is closer. In 20 any case involving warranty repairs or service contract repairs, the motor vehicle 21 owners shall have the option, for any covered repair, to have the vehicle towed to and 22 repaired at the manufacturer's expense by the dealership that sold the motor vehicle to 23 the motor vehicle owner if the dealership is within 35 miles of the location where the 24 vehicle became inoperable due to the nonconformity. 25 (r) When a warranty or service contract repair results in the removal of 26 hazardous or potentially hazardous material from a motor vehicle, the manufacturer or 27 administrator shall reimburse the repairing dealership for the reasonable cost the 28 dealership incurs that results from or is associated with the disposal of the material. 29 (s) A licensed manufacturer doing business in this state shall notify its 30 franchised dealers of any hazardous or potentially hazardous material, including 31 asbestos in brake linings, contained in the motor vehicles and replacement parts it
01 manufacturers or distributes. As part of the required notification, the manufacturer 02 shall provide recommended procedures for the handling and disposal of the hazardous 03 or potentially hazardous material and shall assume any liability the dealer may later 04 incur for the handling or disposal of the hazardous or potentially hazardous material if 05 the dealer follows the manufacturer's recommended handling and disposal procedures. 06 Sec. 45.25.420. Transportation damages. (a) A manufacturer is liable for 07 all damages to a new motor vehicle manufactured by the manufacturer before delivery 08 to a carrier or transporter. If a new motor vehicle dealer determines the method of 09 transportation, the risk of loss passes to the dealer upon delivery of the new motor 10 vehicle to the carrier. Except as provided in this subsection, the risk of loss from 11 delivery of a new motor vehicle remains with the manufacturer until the new motor 12 vehicle dealer or the new motor vehicle dealer's designee accepts the new motor 13 vehicle from the carrier. 14 (b) If a new motor vehicle is damaged while in transit when the manufacturer 15 designates the carrier or the means of transportation, or if a new motor vehicle is 16 otherwise damaged before delivery to the dealer, the dealer shall notify the 17 manufacturer of the damage within three working days or within additional time as 18 authorized by the franchise agreement of the occurrence of the delivery of the new 19 motor vehicle and request authorization from the manufacturer to repair the damages 20 or replace the parts or accessories damaged. If the manufacturer refuses or fails to 21 authorize repair or replacement of the damage within three working days after the 22 manufacturer receives notification of damage from the dealer, ownership of the new 23 motor vehicle reverts to the manufacturer, and the dealer does not have an obligation, 24 financial or otherwise, for the damage to the new motor vehicle. A manufacturer may 25 not fail to disclose in writing to a new motor vehicle dealer, at the time of delivery of a 26 new motor vehicle, the nature and extent of damage or post-manufacturing repairs 27 made to a new motor vehicle while in the possession or under the control of the 28 manufacturer if the cost of the post-manufacturing repairs exceeds three percent of the 29 manufacturer's suggested retail price or an amount stated in the manufacturer's policy 30 regarding disclosure of damage, whichever is lower. A manufacturer is not required to 31 disclose to a new motor vehicle dealer that the glass, tires, or bumper of a new motor
01 vehicle was damaged if the damaged item has been replaced with original or 02 comparable equipment. Nothing in this subsection relieves the dealer of the obligation 03 to cooperate with the manufacturer as necessary in filing a transportation damage 04 claim with the carrier. 05 (c) Before entering into a new motor vehicle sales contract, a new motor 06 vehicle dealer shall disclose in writing to a purchaser of the new motor vehicle any 07 known damage and repair to the new motor vehicle if the damage exceeds five percent 08 of the manufacturer's suggested retail price as calculated at the dealer's authorized 09 warranty rate for labor and parts. A new motor vehicle dealer is not required to 10 disclose to a purchaser that glass, tires, bumpers, or cosmetic parts of a new motor 11 vehicle were damaged at any time if the damaged item has been replaced with original 12 or comparable equipment. A replaced part is not part of the cumulative damage 13 required to be disclosed under this subsection. If disclosure is not required under this 14 subsection, a purchaser may not revoke or rescind a sales contract due to the fact that 15 the new motor vehicle was damaged and repaired before completion of the sale. For 16 purposes of this subsection, "manufacturer's suggested retail price" means the retail 17 price of the new motor vehicle suggested by the manufacturer and includes the retail 18 delivered price suggested by the manufacturer for each accessory or item of optional 19 equipment physically attached to the new motor vehicle at the time of delivery to the 20 new motor vehicle dealer that is not included within the retail price suggested by the 21 manufacturer for the new motor vehicle. In this subsection, "cosmetic parts" means 22 parts that are attached by and can be replaced in total through the use of screws, bolts, 23 or other fasteners without the use of welding or thermal cutting and includes 24 windshields, bumpers, hoods, or trim panels. 25 Sec. 45.25.430. Other unfair methods of competition. A motor vehicle 26 manufacturer may not 27 (1) own, operate, or control a motor vehicle dealership in this state; 28 however, this paragraph does not prohibit the ownership or operation of a new motor 29 vehicle dealership by a manufacturer for a period, not to exceed one year, during the 30 transition from one owner or operator to another, or during a period when a dealership 31 is being sold or its shares are being purchased under a bona fide contract or purchase
01 option; 02 (2) own, operate, or control a facility for the repair or maintenance of 03 motor vehicles except a facility that is used to 04 (A) repair or maintain vehicles owned or operated by the 05 manufacturer; or 06 (B) perform motor vehicle service required by law that cannot 07 be performed by the manufacturer's franchised dealers; 08 (3) contract with or approve a person or entity other than a duly 09 franchised dealer to perform warranty repairs or service contract repairs for the 10 manufacturer unless that person or entity is a subcontractor for that manufacturer's 11 licensed dealer franchised for that geographic market area; 12 (4) ship new or used motor vehicles or new or used parts or accessories 13 to a location other than the location of its franchised dealer for the geographic area or 14 the dealer's subsidiary location or subcontractor location in that geographic area or to a 15 wholesale distributor appointed by the manufacturer for that geographic area. 16 Article 5. Installment Sales; Service Contracts. 17 Sec. 45.25.500. Installment sales; statement to be delivered to buyer; 18 obligations to buyer. (a) A motor vehicle installment contract must be in writing, 19 signed by both the seller and buyer, and completed as to all essential provisions before 20 the signing of the contract by the buyer and before delivery of the vehicle to the buyer. 21 (b) A dealer may not obtain a signed motor vehicle installment contract from 22 the buyer until the financing terms reflected on the motor vehicle installment contract 23 are final and complete. 24 (c) Notwithstanding the requirements of this section, if a dealer arranges 25 financing for a buyer, the dealer may deliver the motor vehicle to the buyer before 26 final approval by the financing entity if 27 (1) the buyer and seller sign an agreement separate from the motor 28 vehicle installment contract on an 8 1/2 x 11 inch sheet of paper that clearly and 29 conspicuously informs the buyer that final financing arrangements have not yet been 30 approved and that clearly sets out the amount that will be financed, the annual 31 percentage rate of the finance charge, the amount of the finance charge, the number
01 and frequency of payments, and the amount of each payment; 02 (2) the separate agreement clearly and conspicuously informs the 03 buyer that accepting delivery of the vehicle before final financing approval obligates 04 the buyer to terms of the motor vehicle installment contract if the terms on the separate 05 agreement are identical to the terms finally approved by the financing entity; and 06 (3) the separate agreement provides that the separate agreement, the 07 motor vehicle installment contract, and any and all other conditions of the purchase 08 will be void if any of the terms contained in the separate agreement are changed by 09 either the dealer or the financing institution as a condition of sale or final financing 10 approval. 11 (d) A licensee may not enter into a short-term or single-payment contract 12 unless the terms and conditions described in this section are fully complied with 13 before delivery of the vehicle to the buyer. 14 (e) If a buyer's final financing is not approved within seven business days 15 from the date of the separate agreement and, as a result, the transaction is not 16 completed, the licensee shall return the buyer's entire down payment, and the buyer's 17 trade-in, if any, shall be returned to the buyer in the same condition and with not more 18 than 10 miles accumulated on the odometer from when the motor vehicle was 19 delivered to the dealer. 20 Sec. 45.25.510. Installment sales coercion prohibited. (a) A manufacturer 21 or an officer, agent, or representative of a manufacturer, may not coerce or attempt to 22 coerce a motor vehicle dealer in this state to sell, assign, or transfer a motor vehicle 23 installment contract to a specified finance company, to a class of finance companies, 24 or to another specified person. 25 (b) A manufacturer, an officer, an agent, or a representative of a manufacturer, 26 or a person affiliated with the manufacturer may not 27 (1) offer to provide information to a dealer concerning a prospective 28 customer who contacts the manufacturer or a person affiliated with the manufacturer 29 about the manufacturer's or distributor's products; or 30 (2) condition the provision of the information referred to in (1) of this 31 subsection to a dealer on the agreement of the dealer to sell or lease a motor vehicle to
01 the prospective customer only if the financing or leasing for the transaction is done by 02 a finance company or lease company that has a relationship or is affiliated with the 03 manufacturer. 04 (c) The provisions of (b) of this section do not prohibit a finance company or 05 lease company that is affiliated with a manufacturer from 06 (1) servicing existing loans or leases, including arranging financing or 07 a lease upon the maturity of an existing loan or lease; 08 (2) negotiating with an existing debtor or lessee who is in default under 09 the terms of a loan or lease, including working with a dealer to retake or dispose of a 10 motor vehicle retaken from the existing debtor or lessee; or 11 (3) providing information concerning a customer who qualifies to 12 purchase a new motor vehicle under a motor vehicle purchase program sponsored by a 13 manufacturer for factory employees, manufacturer retirees, or factory vendors or 14 under another reasonably similar new vehicle purchase program offered by a 15 manufacturer or distributor. 16 Sec. 45.25.520. Service contracts. (a) A motor vehicle service contract must 17 be in writing and contain all essential provisions regarding the administration of the 18 contract. If a dealer presents a service contract to the customer as an "application" for 19 a contract, it must be clearly and conspicuously marked as an application and must 20 disclose the applicable rules for obtaining a final service contract. 21 (b) If a service contract is included in a motor vehicle sale, the seller shall, 22 before delivery of the motor vehicle, give to the buyer a written statement with all 23 pertinent blank spaces filled in that shall be signed by both the buyer and seller and 24 that clearly and conspicuously 25 (1) explains the difference between a service contract and a warranty; 26 (2) discloses the maker of or obligor on the service contract; 27 (3) describes the relationship between the maker and the seller of the 28 service contract; 29 (4) for a vehicle that is a used vehicle, notifies the buyer that the seller 30 may not disclaim implied warranties if the seller is the maker or obligor of the service 31 contract; and
01 (5) includes all other disclosures required by law. 02 (c) A dealer may not disclaim or limit implied warranties for a motor vehicle 03 for which the dealer is a maker of a service contract sold for that motor vehicle. 04 However, a dealer may disclaim or limit implied warranties as otherwise allowed by 05 law, regardless of the make or model of the motor vehicle if the dealer is merely the 06 seller, not the maker, of the service contract and does not otherwise extend any written 07 warranties on the motor vehicle that is purchased. 08 Article 6. Prohibited Trade Practices. 09 Sec. 45.25.600. Prohibited trade practices. A manufacturer or manufacturer 10 representative may not 11 (1) coerce or attempt to coerce a dealer to accept delivery of a motor 12 vehicle, motor vehicle parts or accessories, or another commodity, that has not been 13 ordered by the dealer; 14 (2) coerce or attempt to coerce a dealer to enter into an agreement with 15 the manufacturer or a subsidiary of the manufacturer, or do any other act unfair to the 16 dealer, by threatening to cancel a franchise existing between the manufacturer or 17 subsidiary of the manufacturer and the dealer; 18 (3) directly or indirectly impose unreasonable restrictions on a dealer 19 relating to the transfer or sale of the business, by stock transfer or otherwise, or to the 20 transfer, sale, or assignment of a dealer franchise; in this paragraph, "unreasonable 21 restrictions" includes restricting a dealer's right to renew a franchise, unreasonable 22 termination of a franchise, unreasonable discipline of a dealer, noncompetition 23 covenants, site-control agreements, the right of first refusal to purchase agreements, 24 option to purchase agreements, and unreasonable requirements to comply with 25 subjective manufacturer standards; 26 (4) prevent or refuse a change in the executive management or 27 principal operator of a franchise or prevent or refuse relocation of the franchise to 28 another site or additional sales or service facilities within the franchise's relevant 29 market area if the commissioner has determined, upon request in writing by the dealer 30 within 30 days after receipt of an objection to a proposed change or relocation and 31 after a hearing on the matter, that the manufacturer's failure to permit the change or
01 relocation is unreasonable under the circumstances; the executive management or 02 principal operators may not be changed, or a franchise relocated, unless the franchisor 03 has been given at least 30 days' prior written notice of the identity and qualifications 04 of the persons proposed to be involved in executive management or as principal 05 operators, or of the location and site plan of any proposed relocation; a franchisor 06 may, by registered or certified mail, return receipt requested, send the dealer a notice 07 of objection to the proposed change or relocation; notice of objection must be sent 08 within 30 days after receipt of notice from the dealer, as provided in this paragraph; 09 failure by the franchisor to send notice of objection within 30 days after receipt of 10 notice from the dealer constitutes waiver by the franchisor of the right to object to the 11 proposed change or relocation; a manufacturer or manufacturer representative has the 12 burden of proving that the proposed change or relocation is unreasonable under the 13 circumstances. In this paragraph, "franchisor" means a manufacturer, distributor, or 14 wholesaler who grants a franchise to a dealer. 15 Sec. 45.25.610. Prohibited acts by licensee. A licensed motor vehicle dealer 16 may not 17 (1) intentionally publish or circulate an advertisement that is 18 misleading or inaccurate in a material manner or that misrepresents a product sold or 19 furnished by a licensed motor vehicle dealer; 20 (2) use the word "invoice" in an advertisement for the sale of a motor 21 vehicle, unless 22 (A) the advertisement contains the following statement: "A 23 factory invoice may not reflect factory holdbacks or rebates paid to the dealer"; 24 and 25 (B) the word "invoice," as used by the licensed motor vehicle 26 dealer, means the itemized statement that a manufacturer sends to the dealer 27 that clearly defines the make, model, model year, and vehicle identification 28 number of the vehicle shipped to the dealer, that identifies all factory installed 29 accessories, and that states the amount originally charged to the dealer by the 30 manufacturer for the vehicle delivered to the dealer's principal place of 31 business;
01 (3) refuse to sell a motor vehicle under the terms or conditions that the 02 dealer has advertised; this paragraph does not apply if 03 (A) the dealer can document that the advertised term was the 04 result of an error on the part of the advertising medium or an outside 05 advertising agent; or 06 (B) the error was made in good faith by the dealer and was 07 clearly and conspicuously a mistake, and the dealer corrected the error as soon 08 as the dealer knew or reasonably should have known of the error; 09 (4) use misleading statements about dealer size, sales volume, or 10 inventory to represent or imply that the dealer sells motor vehicles at a lower price as a 11 result of the dealer's size, volume, or inventory; 12 (5) advertise a selling price for a motor vehicle that does not include 13 all internal dealer fees in the advertised selling price; 14 (6) use the term "factory outlet," "factory authorized sale," or a similar 15 term to imply that the dealer has a special connection or relationship with the 16 manufacturer that is greater or more direct than that of other dealers when in fact there 17 is not a special connection or relationship or when any special connection or 18 relationship does not have a discernible effect on vehicle prices; 19 (7) use the term "liquidation sale," "public notice," "public sale," or a 20 similar term in an advertisement when the sale is not required by court order, by 21 operation of law, or by impending cessation of the dealer's business; 22 (8) use the word "free" or a similar term in connection with the 23 purchase of a vehicle whose price is arrived at through bargaining or when the offer is 24 contingent on purchasing something whose price is marked up to recover all or part of 25 the cost of the "free" merchandise; 26 (9) advertise a minimum trade-in or use the term "guaranteed" or a 27 similar term in connection with a trade-in if the selling price of the advertised vehicle 28 is or may be higher than it would have been but for the minimum trade-in; 29 (10) advertise that a specific price will be paid for a trade-in vehicle, 30 unless 31 (A) the advertised price will be paid for all trade-in vehicles; or
01 (B) the advertisement discloses any conditions that the vehicle 02 must meet before the price is paid; 03 (11) advertise a range of prices that will be paid for trade-in vehicles, 04 unless the advertisement discloses the factors that will be used to determine the 05 amount to be paid for a particular trade-in vehicle; 06 (12) advertise a comparison with a manufacturer's suggested retail 07 price, unless the 08 (A) advertised price is in fact the manufacturer's suggested 09 retail price listed on the monroney sticker, including accessories and options 10 physically attached to the motor vehicle at the time of delivery to the dealer 11 and any charge to the dealer for transportation to the dealer, after all 12 manufacturer discounts and manufacturer savings listed on the monroney 13 sticker have been deducted; 14 (B) advertised manufacturer's suggested retail price does not 15 include any charges added by the dealer; 16 (C) advertised manufacturer's suggested retail price is referred 17 to as the "manufacturer's suggested retail price" or "MSRP"; 18 (D) advertisement clearly and conspicuously discloses that the 19 manufacturer's suggested retail price is a price set by the manufacturer and 20 does not necessarily reflect the price actually paid by consumers in the trade 21 area; and 22 (E) advertisement does not otherwise conflict with or detract 23 from a requirement or disclosure under (A) - (D) of this paragraph; 24 (13) advertise a discount offered by the manufacturer, including a 25 manufacturer rebate or other reduction in price offered by the manufacturer, without 26 disclosing that the manufacturer is the source of the discount; 27 (14) violate a provision of this chapter, including this section, or a 28 regulation adopted under this chapter; 29 (15) knowingly purchase, sell, or otherwise acquire or dispose of a 30 stolen vehicle; 31 (16) violate a provision of law relating to purchase or sale of a motor
01 vehicle; 02 (17) engage as a dealer in the business for which the dealer is licensed 03 without at all times maintaining a principal place of business in the state; 04 (18) knowingly purchase or sell a vehicle that has an altered or 05 removed vehicle identification number plate, or alter or remove a vehicle 06 identification number plate; 07 (19) display for sale or exchange or sell a vehicle for which the dealer 08 does not hold a manufacturer's statement of origin, a title, or a properly executed 09 consignment agreement; 10 (20) violate a provision of federal law relating to motor vehicle safety 11 standards or to odometer laws; 12 (21) transfer the title for a new or used vehicle to a buyer before 13 financing is final and complete; 14 (22) transfer title to a trade-in vehicle or perform any repairs or 15 reconditioning to a trade-in vehicle before the completion of the sales transaction for 16 which the vehicle is a trade-in; 17 (23) knowingly represent a vehicle as qualified to be covered by a 18 service contract when the vehicle is not, in fact, qualified; 19 (24) represent and sell as new or unused a motor vehicle that has been 20 used and operated for demonstration purposes or that is otherwise a used motor 21 vehicle. 22 Sec. 45.25.620. Restrictions on vehicle sale or lease. Unless otherwise 23 provided for in this chapter, it is unlawful for a person other than a licensed dealer to 24 (1) display a vehicle for sale or lease unless the title is in the name of 25 the displayer; or 26 (2) solicit the sale or lease of a vehicle unless the title is in the name of 27 the seller; this paragraph does not apply to a vehicle that is subject to a trust or 28 financing agreement between a dealer and a financing institution or entity where title 29 to the vehicle is obtained by paying off the trust or financing obligation. 30 Article 7. Miscellaneous Provisions. 31 Sec. 45.25.700. Acts of officers, directors, partners, salespersons, and
01 other representatives. (a) If a licensee is not an individual, a license may be denied, 02 suspended, or revoked if an officer, director, partner, member, or manager of the 03 licensee commits an act or omits a duty that is cause for refusing, suspending, or 04 revoking a license to an individual. 05 (b) A dealer or manufacturer is responsible for the acts of a representative or 06 salesperson while the representative or salesperson is acting as the dealer's or 07 manufacturer's agent. 08 (c) A manufacturer is responsible for the acts of its employees, agents, or 09 representatives while the employees, agents, or representatives are acting in the 10 conduct of the manufacturer's business, whether or not the manufacturer approved, 11 authorized, or had prior knowledge of the acts. 12 Sec. 45.25.710. Powers of the commissioner. Whenever the commissioner is 13 provided with information by the Motor Vehicle Dealers Advisory Board or another 14 person and the information supports commissioner action under this section, the 15 commissioner may 16 (1) prevent or investigate allegations of unfair methods of competition, 17 unfair deceptive acts or practices, and other violations of this chapter; 18 (2) conduct hearings, including conducting discovery, determining the 19 date, time, and place where hearings are to be held, subpoenaing witnesses, deposing 20 witnesses, and administering oaths; 21 (3) recommend that the attorney general bring an action in the name of 22 the state against a person for a violation of this chapter or seek to enjoin a person from 23 violating this chapter. 24 Sec. 45.25.720. Required hearing notice; appeal. (a) The commissioner 25 shall give reasonable notice of a hearing to all interested parties. 26 (b) In a dispute that is the subject of a hearing by the commissioner, the 27 commissioner's decision may be appealed to the superior court. The commissioner's 28 decision is binding on the parties unless the decision is appealed. The commissioner 29 may require the parties to a hearing to pay the costs of the hearing. 30 Sec. 45.25.730. Motor Vehicle Dealers Advisory Board. (a) The Motor 31 Vehicle Dealers Advisory Board is established in the department. The board consists
01 of six voting members appointed by the commissioner and the nonvoting member 02 under (g) of this section. 03 (b) A voting member of the board shall be a resident of the state for a 04 minimum of five consecutive years preceding appointment. Four voting members of 05 the board shall be licensed franchised dealers in new motor vehicles who have been 06 actually engaged in the sale, lease, and repair of motor vehicles in the state for at least 07 three consecutive years. One voting member shall be a licensed dealer in used 08 vehicles who has been actually engaged in the sale, lease, and repair of motor vehicles 09 in the state for at least three consecutive years. One voting member shall be a member 10 of the general public and may not be a dealer in either new or used vehicles. 11 (c) Members of the board shall meet at the call of the commissioner. 12 Members do not receive compensation for services, but shall receive per diem and 13 travel expenses allowed for boards under AS 39.20.180. 14 (d) The purpose of the board is to advise the commissioner regarding 15 (1) appeals or other disputes between manufacturers and dealers; 16 (2) a manufacturer's proposed changes to its new vehicle franchises; 17 (3) proposed regulations; and 18 (4) violations of the provisions of this chapter by a licensee. 19 (e) The commissioner shall refer an appeal made to the commissioner under 20 this chapter to the board for consideration before the commissioner acts on the appeal. 21 (f) The commissioner shall appoint a qualified person to serve as executive 22 director of the board. The executive director is a member of the exempt service under 23 AS 39.25.110. 24 (g) The attorney general or a person appointed by the attorney general to 25 represent the attorney general is a nonvoting member of the board, shall attend board 26 meetings, and shall seek the advice of and consult with the board before issuing a 27 business directive affecting the sale, leasing, or repair of motor vehicles in this state. 28 (h) A member of the board is not civilly liable for an act or omission that 29 occurs while performing duties as a member of the board. 30 Sec. 45.25.740. Civil penalty. If, after complying with the administrative 31 provisions of AS 44.62.330 - 44.62.630, the commissioner determines that a
01 manufacturer or dealer is violating a provision of this chapter or a regulation or order 02 of the commissioner issued under this chapter, the commissioner may levy a civil 03 penalty of not less than $1,000 nor more than $10,000 for each violation. If the 04 violation involves multiple transactions within a 30-day period, the multiple 05 transactions constitute a single violation. In determining the amount of the civil 06 penalty levied under this section, the commissioner shall consider 07 (1) the seriousness of the violation, including the nature, 08 circumstances, extent, and gravity of the prohibited act and the harm or potential harm 09 caused to the safety of the public; 10 (2) the economic damage to the public caused by the violation; 11 (3) any previous violations; 12 (4) the amount necessary to deter future violations; 13 (5) efforts made to correct the violation; and 14 (6) other matters that justice may require. 15 Sec. 45.25.750. Requirement of principal place of business. (a) When a 16 dealer is required by this chapter to have and maintain a principal place of business, 17 the principal place of business must include a permanent building that contains, at a 18 minimum, an established office and an established salesroom. 19 (b) To qualify as an established office under (a) of this section, the office must 20 (1) contain at least 400 square feet of floor space in a permanent and 21 enclosed building; and 22 (2) be a place where books, records, and files required by the 23 department are kept. 24 (c) To qualify as an established salesroom under (a) of this section, the 25 salesroom must 26 (1) contain at least 400 square feet of floor space in a permanent and 27 enclosed building; 28 (2) display, or be located immediately adjacent to, a sign having block 29 letters not less than six inches in height on a contrasting background, clearly and 30 distinctly designating the trade name of the business, unless prohibited by law; 31 (3) be a place at which the business of bartering, trading, and selling
01 motor vehicles is carried on in good faith on an ongoing basis and where the dealer 02 can be contacted by the public at reasonable times; and 03 (4) be a place where books, records, and files required by the 04 department are kept. 05 (d) An established salesroom includes the area contiguous to the premises on 06 which the salesroom is located, but does not include a tent, a temporary stand, or other 07 temporary quarters. 08 Sec. 45.25.760. Regulations. (a) The commissioner may adopt regulations, 09 as provided under AS 44.62 (Administrative Procedure Act), necessary or proper for 10 the effective administration and enforcement of this chapter. 11 (b) The commissioner shall mail a copy of proposed regulations to each 12 licensed motor vehicle dealer before the effective date of the regulations. 13 Article 8. General Provisions. 14 Sec. 45.25.900. Applicability. If a provision of this chapter conflicts with 15 another provision of this title, this chapter controls. 16 Sec. 45.25.950. Definitions. In this chapter, 17 (1) "administrator" means a person who administers any part of the 18 warranty coverage for a new or used vehicle or the service contract for a new or used 19 vehicle on behalf of a manufacturer or audits or examines a dealer's performance or 20 administration of a service contract, of a warranty, or of maintenance or repairs 21 performed on covered vehicles in this state; 22 (2) "brokering" means arranging or offering to arrange, for a fee, 23 commission, or other valuable consideration, a transaction involving the sale, 24 purchase, or lease of a new motor vehicle, and who is not a dealer or employee of a 25 dealer; 26 (3) "commissioner" means the commissioner of administration; 27 (4) "dealer" means a new motor vehicle dealer or used motor vehicle 28 dealer; 29 (5) "dealer facilities" means the real estate, buildings, fixtures and 30 improvements devoted to the conduct of business under a new vehicle franchise or in 31 the conduct of a used vehicle business;
01 (6) "dealership" means the business entity that is operated by a motor 02 vehicle dealer; 03 (7) "department" means the Department of Administration; 04 (8) "distributor" means a person or entity who sells or distributes new 05 or used motor vehicles to motor vehicle dealers or who maintains or sends distributor 06 representatives within or to this state to sell or distribute new or used motor vehicles to 07 motor vehicle dealers in this state; 08 (9) "distributor branch" means a branch office maintained by a 09 distributor or wholesaler who sells or distributes new or used motor vehicles to 10 franchised motor vehicle dealers in this state; 11 (10) "distributor representative" means a representative employed by a 12 distributor branch, distributor, or wholesaler who sells or distributes new or used 13 motor vehicles to franchised motor vehicle dealers in this state; 14 (11) "factory branch" means a branch office maintained by a 15 manufacturer for directing and supervising the representatives of the manufacturer; 16 (12) "factory representative" means a representative employed by a 17 manufacturer or factory branch for the purpose of making or promoting the sale of 18 motor vehicles or supervising, servicing, instructing, or contracting with franchised 19 motor vehicle dealers or prospective franchised motor vehicle dealers; 20 (13) "family member" means a spouse, child, stepchild, grandchild, 21 stepgrandchild, parent, stepparent, brother, stepbrother, sister, or stepsister; 22 (14) "franchise" means an oral or written arrangement for a definite or 23 indefinite period in which a manufacturer, distributor, or motor vehicle wholesaler 24 grants to a motor vehicle dealer a license, sales and service agreement, or contract of 25 any kind to use a trade name, service mark, or related characteristic, and in which 26 there is a community of interest in the wholesale or retail marketing of related motor 27 vehicles or services; 28 (15) "franchised" means having a franchise; 29 (16) "fraud" includes a promise or representation not made honestly or 30 in good faith, and an intentional failure to disclose a material fact; 31 (17) "good faith" means honesty in fact and the observation of
01 reasonable commercial standards of fair dealing in the trade; 02 (18) "lease" means a contract by which a person owning a motor 03 vehicle grants to another person the right to possess, use, and enjoy the motor vehicle 04 for a specified period of time in exchange for periodic payment of a stipulated price, 05 and in which the use of the vehicle is granted for a period of 12 or more months; 06 (19) "licensed dealer" means a dealer licensed under AS 45.25.140; 07 (20) "licensed manufacturer" means a manufacturer licensed under 08 AS 45.25.120; 09 (21) "line-make" means a new motor vehicle that is offered for sale, 10 lease, or distribution under a common name, common trademark, or common service 11 mark; 12 (22) "maker" means the person that makes, frames, and executes a 13 service contract and assumes any obligation due to the purchaser, but does not include 14 a dealer if the dealer merely sells the service contract as the agent of a service contract 15 company licensed to do business in this state; 16 (23) "manufacturer" means a person or the person's subsidiary who 17 manufacturers, imports, distributes, or assembles new motor vehicles and includes an 18 administrator, a distributor, a distributor branch, and a factory branch; 19 (24) "manufacturer representative" means any employee or agent of a 20 manufacturer who engages in the business of contacting a manufacturer's respective 21 franchised dealers for the purpose of making or promoting the sale of the 22 manufacturer's vehicles, parts, accessories, or services; 23 (25) "monroney sticker" means the window sticker required by 15 24 U.S.C. 1231 - 1233 (Automobile Information Disclosure Act); 25 (26) "motor vehicle" means a motor vehicle that is required to be 26 registered under AS 28.10; 27 (27) "motor vehicle dealer" means a person, other than a manufacturer, 28 who sells, leases, solicits, brokers, or arranges for sale or lease, of three or more new 29 or used motor vehicles in any 12 consecutive months, regardless of who owns the 30 vehicles; "motor vehicle dealer" does not include 31 (A) a receiver, trustee, administrator, executor, guardian, or
01 other person appointed by a court or a person performing duties as a public 02 officer; 03 (B) a person disposing of a motor vehicle acquired and actually 04 used for the person's own use or for the use of a family member of the person 05 if the vehicle is acquired and used in good faith and not for the purpose of 06 avoiding the provisions of this chapter; 07 (C) a person who sells motor vehicles as an incident of their 08 principal business but who is not engaged primarily in the selling of motor 09 vehicles; 10 (D) an employee of an organization arranging for the purchase 11 or lease by the organization of a vehicle for use in the organization's business; 12 (E) a publication, broadcast, or other communications media 13 when engaged in the business of advertising, but not otherwise arranging for 14 the sale of a motor vehicle owned by another person; 15 (F) a person acquiring an interest in a motor vehicle for a 16 family member of the person; 17 (28) "motor vehicle salesperson" means a person who is employed as a 18 sales representative or salesperson by, or has an agreement with, a motor vehicle 19 dealer to sell, lease, broker, or exchange motor vehicles; 20 (29) "new motor vehicle" means a motor vehicle that has not been 21 previously sold to and registered to a person except a distributor, wholesaler, or 22 licensed motor vehicle dealer for resale; 23 (30) "new motor vehicle dealer" means a motor vehicle dealer who 24 buys, sells, leases, brokers, or exchanges, or offers or attempts to negotiate a sale, 25 lease, or exchange of an interest in, or who is engaged, in whole or in part, in the 26 business of selling, leasing, brokering, or exchanging new or new and used motor 27 vehicles; 28 (31) "sale" means the issuance, transfer, agreement for transfer, 29 exchange, gift, pledge, hypothecation, or mortgage in any form, whether by transfer in 30 trust or otherwise, of a motor vehicle, an interest in a motor vehicle, or a related 31 franchise;
01 (32) "service contract" means an optional agreement that is separate 02 from a contract for the sale of a motor vehicle, and that covers certain repair or 03 maintenance functions beyond coverage provided by a warranty; 04 (33) "used motor vehicle" means a motor vehicle that has been 05 previously sold to and registered to a person other than a distributor, wholesaler, or 06 licensed motor vehicle dealer; 07 (34) "used motor vehicle dealer" means a motor vehicle dealer who 08 buys, sells, leases, brokers, exchanges, or offers or attempts to negotiate a sale, lease, 09 or exchange of an interest in, only used motor vehicles. 10 * Sec. 3. AS 39.25.110 is amended by adding a new paragraph to read: 11 (34) the executive director of the Motor Vehicle Dealers Advisory 12 Board. 13 * Sec. 4. AS 44.62.330(a) is amended by adding a new paragraph to read: 14 (60) the Department of Community and Economic Development as to 15 the licensing and regulation of a person involved in the selling, leasing, brokering, or 16 exchanging of a motor vehicle under AS 45.25. 17 * Sec. 5. AS 45.50.572 is amended by adding a new subsection to read: 18 (k) AS 45.50.562 - 45.50.596 do not apply to action taken by a person to 19 comply with AS 45.25 or to action refrained from by a person in order to comply with 20 AS 45.25 (motor vehicle transactions). 21 * Sec. 6. AS 08.66.010, 08.66.015, 08.66.020, 08.66.030, 08.66.040, 08.66.050, 08.66.060, 22 08.66.070, 08.66.080, 08.66.090, 08.66.200, 08.66.210, 08.66.220, 08.66.230, 08.66.240, 23 08.66.250, 08.66.260, 08.66.270, 08.66.280, 08.66.290, 08.66.300, 08.66.310, 08.66.320, 24 08.66.330, 08.66.350; AS 45.50.471(b)(33), and 45.50.471(b)(34) are repealed. 25 * Sec. 7. The uncodified law of the State of Alaska is amended by adding a new section to 26 read: 27 TRANSITION. The minimum floor space requirements for an established salesroom 28 imposed under AS 45.25.750(c), enacted by sec. 2 of this Act, do not apply to a motor vehicle 29 salesroom that was in existence on or before the effective date of this Act. 30 * Sec. 8. The uncodified law of the State of Alaska is amended by adding a new section to 31 read:
01 APPLICABILITY. This Act applies to a franchise, as that term is defined in 02 AS 45.25.950, that is entered into or renewed before, on, or after the effective date of this Act. 03 * Sec. 9. This Act takes effect July 1, 2001.