CSHB 303(JUD): "An Act relating to marine products and motorized recreational products; and providing for an effective date."
00 CS FOR HOUSE BILL NO. 303(JUD) 01 "An Act relating to marine products and motorized recreational products; and 02 providing for an effective date." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04 * Section 1. AS 45.25 is amended by adding a new section to read: 05 Sec. 45.25.920. Conflicting provisions. If a provision of this chapter conflicts 06 with a provision in AS 45.27, the provision in AS 45.27 governs. 07 * Sec. 2. AS 45 is amended by adding a new chapter to read: 08 Chapter 27. Marine Products and Motorized Recreational Products. 09 Article 1. Agreement Practices of Product Manufacturers and Distributors. 10 Sec. 45.27.010. Cancellation or nonrenewal of agreement. A manufacturer 11 or distributor may not, without 90 days' advance written notice, cancel or refuse to 12 renew an agreement with an authorized dealer. 13 Sec. 45.27.020. Consent to transfer of agreement. A manufacturer or 14 distributor may not unreasonably withhold consent to the sale or other transfer of an
01 agreement by an authorized dealer to a transferee if the transferee 02 (1) meets the criteria generally applied by the manufacturer or 03 distributor when approving new authorized dealers; and 04 (2) agrees to be bound by all the terms and conditions of the standard 05 form of the agreement. 06 Sec. 45.27.030. Change in existing agreement. Except as provided by 07 AS 45.25.110, a manufacturer or distributor may not change an agreement with an 08 authorized dealer unless the manufacturer or distributor gives notice by mail to the 09 authorized dealer at least 90 days before the change. 10 Article 2. Area of Responsibility. 11 Sec. 45.27.100. Determination of area of responsibility. Unless the 12 authorized dealer's agreement establishes a smaller area of responsibility, an 13 authorized dealer's area of responsibility may be a geographical area designated by zip 14 code, municipality, or mileage radius in the authorized dealer's agreement with a 15 manufacturer or distributor. 16 Sec. 45.27.110. Changing area of responsibility. Before changing an area of 17 responsibility, the manufacturer or distributor shall give the authorized dealer at least 18 90 days' written notice by mail before the change. This section does not apply to an 19 authorized dealer who relocates or opens additional facilities within two miles of the 20 authorized dealer's existing facilities unless the relocation would infringe on another 21 authorized dealer's area of responsibility. 22 Sec. 45.27.120. Adding authorized dealer to area of responsibility. (a) A 23 manufacturer or distributor may not enter into an agreement that would add an 24 authorized dealer within the existing authorized dealer's area of responsibility without 25 giving at least 90 days' written notice by mail to all potentially affected authorized 26 dealers in the area of responsibility. 27 (b) The notice under (a) of this section must include 28 (1) a determination that the community or territory can support an 29 additional authorized dealer; and 30 (2) a determination of whether the existing authorized dealers of the 31 same line of product makes, models, or classifications in the authorized dealer's area
01 of responsibility are providing adequate representation, competition, and convenient 02 consumer care for the same line of product makes, models, and classifications located 03 in that area of responsibility. 04 (c) The potentially affected authorized dealers shall have at least 60 days to 05 provide additional information and comments to the manufacturer or distributor before 06 the manufacturer or distributor makes a final decision. 07 Article 3. General Product Provisions. 08 Sec. 45.27.200. Sale or shipment before agreement. A manufacturer or 09 distributor may not sell or ship a product to an authorized dealer before the authorized 10 dealer signs an agreement that complies with this chapter. 11 Sec. 45.27.210. Involuntary order or delivery. A manufacturer or distributor 12 may not coerce or attempt to coerce an authorized dealer to order or accept delivery of 13 a 14 (1) product or another item that the authorized dealer has not 15 voluntarily ordered; or 16 (2) product with a special feature, appliance, accessory, or equipment 17 that is not included in the manufacturer's or distributor's advertised list for the product. 18 Sec. 45.27.220. Refusal to deliver or ship. A manufacturer or distributor may 19 not, without just cause, refuse to deliver or ship, within 60 days after the authorized 20 dealer's order has been received, to an authorized dealer a product that the 21 manufacturer or distributor has publicly advertised is available for immediate delivery. 22 Sec. 45.27.230. Delivery of products in reasonable quantities. A 23 manufacturer or distributor may not delay, refuse, or fail to deliver products in 24 reasonable quantities to an authorized dealer unless the delay, refusal, or failure is 25 caused by an act beyond the control of the manufacturer, the distributor, or a person 26 related to the manufacturer or distributor. 27 Sec. 45.27.240. Selection of delivery method. Unless otherwise provided by 28 the agreement, a manufacturer or distributor may not refuse to allow an authorized 29 dealer to select the method and carrier for the delivery of products to the authorized 30 dealer by the manufacturer or distributor. 31 Sec. 45.27.250. Product damage responsibility. (a) A manufacturer or
01 distributor is solely responsible for damage to a product that occurs before the 02 manufacturer or distributor delivers the product to a carrier. 03 (b) An authorized dealer is not responsible for damage to a new product that 04 occurs while the product is in the possession of the carrier unless the authorized dealer 05 selects the method of transportation and the carrier. 06 (c) An authorized dealer is solely responsible for damage to a new product 07 that occurs after the authorized dealer accepts the product from the carrier and before 08 delivery to the ultimate purchaser unless the damage results from a latent or hidden 09 defect or is not reasonably observable at the time the authorized dealer accepts the 10 product. An authorized dealer accepts a product when the authorized dealer signs a 11 delivery receipt for the product. 12 (d) An authorized dealer may refuse to accept a damaged product from a 13 manufacturer or distributor by giving written notice to the manufacturer or distributor 14 within 10 business days after the product is delivered to the authorized dealer. If an 15 authorized dealer refuses to accept the damaged product, the manufacturer or 16 distributor shall, within 10 days after receiving the notice from the authorized dealer, 17 credit the authorized dealer's account for the product cost that the manufacturer or 18 distributor charged to the authorized dealer and any freight and interest charged to the 19 authorized dealer for the product. 20 Article 4. Product Repurchase Requirements. 21 Sec. 45.27.300. Manufacturer or distributor mandatory repurchase. If an 22 authorized dealer discontinues selling a particular product and gives 60 days' advance 23 written notice of the discontinuance to the manufacturer or distributor by mail, the 24 manufacturer or distributor shall repurchase from the authorized dealer's inventory 25 (1) each new and unused discontinued product of the manufacturer that 26 is 27 (A) the current model of the discontinued product; or 28 (B) a model of the discontinued product from the previous two 29 years; and 30 (2) each discontinued product part that 31 (A) was purchased from the manufacturer or distributor;
01 (B) is listed in the manufacturers' parts price books in the past 02 two years; and 03 (C) has not been damaged or substantially altered to the 04 prejudice of the manufacturer or distributor while in the possession of the 05 authorized dealer. 06 Sec. 45.27.310. Timing of repurchase. A manufacturer or distributor shall 07 make the repurchase required by AS 45.27.300 within 60 days after the authorized 08 dealer submits to the manufacturer or distributor by mail the authorized dealer's final 09 inventory of all the products and product parts identified under AS 45.27.300 that 10 apply to the authorized dealer's discontinuance of the manufacturer's products. 11 Sec. 45.27.320. Optional retention. If an authorized dealer discontinues 12 engaging in the business of being an authorized dealer or discontinues selling a 13 particular make of product, the authorized dealer may, at the sole option of the 14 authorized dealer, retain some of the discontinued products and product parts to allow 15 for customer service, special orders, presold products, or another valid situation, as 16 determined in the sole discretion of the authorized dealer. 17 Sec. 45.27.330. Failure to repurchase. If a manufacturer or distributor fails, 18 without just cause, to make the repurchase required by AS 45.27.300, the 19 manufacturer or distributor shall pay the authorized dealer interest at the allowed rate 20 on the inventory value of the products and product parts that the manufacturer or 21 distributor fails to repurchase. The interest begins on the 31st day after the 22 manufacturer or distributor receives the final inventory under AS 45.27.310 and 23 continues until the manufacturer or distributor completes the required repurchase. In 24 this section, "allowed rate" means the interest rate set out in AS 45.45.010(a), 25 excluding the exception for AS 45.45.010(b). 26 Sec. 45.27.340. Landed cost. (a) The amount of a repurchase required by 27 AS 45.27.300 shall be based on the authorized dealer's landed cost at the authorized 28 dealer's facility. 29 (b) An authorized dealer's landed cost shall be adjusted for any quarterly or 30 annual purchase rebates and credits given to the authorized dealer on the products and 31 product parts being repurchased.
01 Sec. 45.27.350. Carrier selection and costs. A manufacturer or distributor of 02 a product may select the method and carrier to transport a product repurchased under 03 AS 45.27.300 - 45.27.340, but is responsible for any transportation or storage costs for 04 the repurchased product. 05 Article 5. Product Warranties. 06 Sec. 45.27.400. Warranty provided. A manufacturer shall provide, through 07 the authorized dealer, to the product's ultimate purchaser from an authorized dealer the 08 manufacturer's standard written warranty, if any, that is in effect at the time of delivery 09 of the product to the authorized dealer. 10 Sec. 45.27.410. Defective products. (a) A manufacturer or distributor of a 11 defective product shall, during the original warranty period, pay, in accordance with 12 the standard warranty service claim procedures and methods of the industry and with 13 AS 45.27.400 - 45.27.500, an authorized dealer to complete factory-recommended 14 warranty repairs, solutions, and procedures to cure factory warranty problems with a 15 defective product. 16 (b) A manufacturer or distributor shall, within 30 days after an authorized 17 dealer's request, provide the authorized dealer with original factory parts required to 18 perform warranty service on a defective product. If a manufacturer or distributor is 19 unable to supply original factory parts needed to complete the warranty repairs for a 20 defective product within 30 days, the authorized dealer may return the defective 21 product and receive full credit for the authorized dealer's landed cost of the product, 22 plus 100 percent of the freight charges to return the product. 23 (c) In this section, "defective product" means a product that is defective in 24 design, assembly, engineering, or manufacturing. 25 Sec. 45.27.420. Authorized dealer warranty representations. An authorized 26 dealer may not make a representation about the warranty that is not made by the 27 manufacturer in the written warranty. An authorized dealer shall deliver the manuals 28 on the operation and maintenance of a product to an ultimate purchaser and make the 29 manufacturer's warranty known to the ultimate purchaser, including all disclaimers 30 and limitations. 31 Sec. 45.27.430. Timely warranty service and claims. (a) An authorized
01 dealer shall provide timely warranty service in accordance with the manufacturer's 02 applicable warranty on all of the manufacturer's and distributor's products sold by the 03 authorized dealer. 04 (b) An authorized dealer shall make all claims for warranty reimbursement in 05 the manner established by the manufacturer. 06 Sec. 45.27.440. Basis for reimbursements. (a) A manufacturer or distributor 07 shall use the bases established in this section to reimburse an authorized dealer for all 08 approved warranty service work performed by the authorized dealer. 09 (b) A manufacturer or distributor shall pay to a servicing authorized dealer 10 warranty work labor rates that 11 (1) are at least the same as the authorized dealer customarily charges to 12 a customer for nonwarranty service work; and 13 (2) include time for clean-up, preparation, diagnosis, disassembly, 14 repair, assembly, testing, and final cleaning as needed to provide a quality result and 15 customer satisfaction. 16 (c) In addition to the payment under (b) of this section, the manufacturer or 17 distributor shall reimburse an authorized dealer a minimum of one hour at the 18 authorized dealer's shop standard labor rate for the administration of each warranty 19 claim. 20 (d) A manufacturer or distributor shall reimburse the authorized dealer for 21 product parts at the current manufacturer's full suggested retail price and shall ship 22 each part to the authorized dealer without cost for freight or handling. 23 Sec. 45.27.450. Requests to return items. A request by the manufacturer, the 24 distributor, or another person involved in a product's warranty service to an authorized 25 dealer to return a product or a product part for analysis, testing, or inspection must be 26 in writing and shall be made within 30 days after the filing date of the warranty claim 27 submitted by the authorized dealer. 28 Sec. 45.27.460. Timely reimbursement for claims. A manufacturer or 29 distributor shall pay a properly submitted warranty claim within 30 days after 30 receiving the claim from an authorized dealer. If a manufacturer or distributor fails to 31 pay a claim within 30 days after receipt, the failure is considered an acceptance of the
01 claim as submitted, and the manufacturer or distributor shall pay the authorized dealer 02 interest at the rate of 1.5 percent a month on the claim. 03 Sec. 45.27.470. Boat package warranties and branding. (a) A manufacturer 04 or distributor of a marine product may enter into a warranty service agreement with a 05 marine authorized dealer of a boat package without violating the area of responsibility 06 of another authorized dealer who has an agreement to sell the brand of marine motor 07 that is part of the boat package. However, the warranty service agreement may not be 08 construed to permit the marine authorized dealer to sell the marine motor separately 09 from the boat package, and the marine authorized dealer may not hold itself out to be 10 an authorized dealer in the full line of marine engines. 11 (b) The boat package brand shall be determined by the brand of the boat. 12 Sec. 45.27.480. Performance of warranty service work. An authorized 13 dealer shall use a factory-certified or factory-trained technician to perform warranty 14 service work if factory certification or training is readily available. 15 Sec. 45.27.490. Warranty restrictions. A manufacturer may not, by 16 agreement, by restrictions on reimbursement, or by another method, restrict the nature 17 or extent of product parts provided or labor performed by an authorized dealer if the 18 restriction impairs the authorized dealer's ability to satisfy a warranty created by the 19 manufacturer in accordance with generally accepted standards. 20 Sec. 45.27.500. Warranty claim disapproval. If a manufacturer or distributor 21 disapproves a claim, the manufacturer or distributor shall issue a written notice of 22 disapproval to the authorized dealer within 30 days after the manufacturer or 23 distributor receives the claim. The notice must contain the specific reasons for the 24 disapproval. 25 Article 6. Miscellaneous Business Practices. 26 Sec. 45.27.600. Liability resulting from audit. (a) An authorized dealer is not 27 liable to a manufacturer or distributor for money that an audit of the authorized 28 dealer's financial records determines to be owed to the manufacturer or distributor, or 29 to a wholesaler, distributor branch, or factory branch, if the money is a result of 30 transactions that occurred more than two years before the beginning of the audit, 31 unless the money is owed as a result of a fraudulent practice of the authorized dealer.
01 (b) If an authorized dealer retains a product part for at least 30 days after the 02 warranty claim is filed, the authorized dealer is not liable to a manufacturer or 03 distributor for failing to retain the product part for a longer time. 04 Sec. 45.27.610. Competition with authorized dealer. A manufacturer or 05 distributor may not compete with an authorized dealer who is operating under an 06 agreement with a manufacturer or distributor in the same line, brand, model, or make 07 of product. 08 Sec. 45.27.620. Content of factory recall notices. A manufacturer or 09 distributor shall include in a written factory recall notice to ultimate purchasers and 10 authorized dealers the date by which the manufacturer or distributor expects that 11 necessary parts and equipment will be available to the authorized dealer for the 12 correction of the defect that is the subject of the recall. 13 Sec. 45.27.630. Advertising. A manufacturer or distributor may not use false 14 or misleading advertising in connection with an agreement with an authorized dealer 15 or in the operation of the manufacturer's or distributor's sale of products. 16 Sec. 45.27.640. Required posting. (a) An authorized dealer shall post a notice 17 of the authorized dealer's retail labor rate in a place conspicuous to service customers. 18 If the authorized dealer uses a factory-certified or factory-trained technician to 19 perform warranty service work, the notice must also contain a statement that warranty 20 service work completed by the authorized dealer is performed by a factory-certified or 21 factory-trained technician. 22 (b) If an authorized dealer's service operations employees receive a 23 commission for the amount of work they perform, the authorized dealer shall post a 24 conspicuous sign that is visible to service customers that the authorized dealer's 25 service operations employees work on commission. 26 Article 7. Miscellaneous Provisions. 27 Sec. 45.27.800. Unenforceable provisions. If a provision in an agreement 28 violates this chapter, the provision is not enforceable. 29 Sec. 45.27.810. Manufacturer and distributor liability. (a) A manufacturer 30 and a distributor shall indemnify and hold harmless an authorized dealer for damages, 31 including fines, suffered by the authorized dealer as a result of the manufacturer's or
01 distributor's violation of this chapter. 02 (b) Notwithstanding the terms of an agreement with an authorized dealer, a 03 manufacturer and a distributor shall indemnify and hold harmless an authorized dealer 04 for damages arising out of complaints, claims, or lawsuits, to the extent that the 05 damages arise out of alleged acts of the manufacturer and distributor, that 06 (1) relate to the authorized dealer's sale or other handling of the 07 manufacturer's or distributor's product; 08 (2) are beyond the control of the authorized dealer; and 09 (3) are based on strict liability, negligence, misrepresentation, express 10 warranty, implied warranty, or rescission. 11 (c) In this section, "damages" includes court costs and reasonable attorney fees 12 of the authorized dealer. 13 Sec. 45.27.820. Cumulative provisions. The provisions of this chapter are in 14 addition to any other legal or equitable remedy available under law or under an 15 agreement between an authorized dealer and a manufacturer or distributor. 16 Article 8. General Provisions. 17 Sec. 45.27.900. Exemptions. The following persons are exempt from this 18 chapter: 19 (1) a receiver, a trustee, an administrator, an executor, a guardian, and 20 other persons appointed by or acting under a court order; 21 (2) a public officer in the course of performing the public officer's 22 duties; 23 (3) a person who holds a security interest in a motor vehicle as part of 24 the sale of the motor vehicle to another person; 25 (4) an insurance company; 26 (5) an auctioneer and an auction house handling an estate auction, a 27 bankruptcy auction, a farm equipment auction, or a government auction, if the 28 auctioneer and auction house are not engaged in the auction of used products as the 29 principal part of their business. 30 Sec. 45.27.990. Definitions. In this chapter, unless the context indicates 31 otherwise,
01 (1) "agreement" means a franchise, sales, or other product agreement 02 with a manufacturer or distributor; 03 (2) "all-terrain vehicle" means a vehicle with three or more low- 04 pressure, flotation-type tires, as designed by the manufacturer or altered, to be used as 05 an off-road recreational vehicle; 06 (3) "area of responsibility" means the area of an authorized dealer's 07 principal product sales and service responsibility; 08 (4) "authorized dealer" means a dealer who has entered into an 09 agreement with a manufacturer or distributor of products to sell or service the 10 manufacturer's or distributor's products; 11 (5) "boat" means a marine product that is not equipped with a motor; 12 (6) "boat package" means a boat that is equipped and sold with a motor 13 or another form of motorized propulsion; 14 (7) "distributor" means a person who 15 (A) sells or distributes products to authorized dealers; or 16 (B) maintains distributor representatives, including 17 wholesalers, distributor branches, and distributor sales representatives; 18 (8) "distributor sales representative" means an officer, agent, or 19 employee hired by a distributor to promote the sale of products or to supervise or 20 contact authorized dealers or prospective authorized dealers; 21 (9) "landed cost" means the total cost of a product delivered at a given 22 location, including the initial authorized dealer invoice price and any freight, 23 transportation, flooring expense, interest expense, authorized dealer preparation cost, 24 assembly cost, and reasonable handling cost; 25 (10) "mail" means registered or certified mail, return receipt requested; 26 (11) "manufacturer" means a person who fabricates, manufactures, or 27 assembles products; "manufacturer" includes a manufacturer branch and a 28 manufacturer sales representative, but does not include a person who converts, 29 modifies, or otherwise alters a product fabricated, manufactured, or assembled by 30 another person; 31 (12) "marine authorized dealer" means an authorized dealer of marine
01 products; 02 (13) "marine product" means a new watercraft, boat, or motor designed 03 for recreational or commercial use on water; "marine product" includes an outboard 04 motor or boat with an attached motor, but does not include a watercraft designed or 05 adapted to be powered only by an occupant's energy; 06 (14) "motorized recreational product" means an all-terrain vehicle, a 07 marine motor, a boat, a boat package, a marine product, and a snow machine; in this 08 paragraph, "snow machine" means a motorized vehicle with a gross vehicle weight 09 under 1,300 pounds propelled by a track system designed to move a person over snow 10 or ice, and includes a snowmobile; 11 (15) "part" includes an accessory; 12 (16) "product" means a marine product or a motorized recreational 13 product; 14 (17) "ultimate purchaser" means the first person, other than an 15 authorized dealer purchasing in the authorized dealer's capacity as an authorized 16 dealer, who, in good faith, purchases a new product for a purpose other than resale. 17 Sec. 45.27.995. Short title. This chapter may be cited as the Alaska Marine 18 Product and Motorized Recreational Product Act. 19 * Sec. 3. AS 45.45.770(a) is amended to read: 20 (a) AS 45.45.700 - 45.45.790 do not apply to 21 (1) a distributorship agreement that would be considered a franchise 22 regulated by 15 U.S.C. 2801 - 2841 (Petroleum Marketing Practices Act); 23 (2) a situation regulated by AS 45.50.800 - 45.50.850; 24 (3) a distributorship agreement, including a franchise agreement, for 25 the sale, repair, or servicing of motor vehicles that are required to be registered under 26 AS 28.10; 27 (4) an activity or agreement by a person licensed under AS 04 if the 28 activity or agreement is within the scope of the license or is incidental to the activity 29 or agreement that is within the scope of the license; 30 (5) a distributorship agreement or another contract between a person 31 licensed under AS 04 and a distributor, manufacturer, importer, supplier, or wholesaler
01 of alcoholic beverages who is not located in this state if the subject of the agreement 02 or contract is the distribution of alcoholic beverages to the licensed person by the 03 distributor, manufacturer, importer, supplier, or wholesaler; 04 (6) a distributor, manufacturer, importer, supplier, or wholesaler of 05 alcoholic beverages; 06 (7) a distributorship agreement for the sale or distribution of, or other 07 transaction involving, cigarettes, food, drink, or a component of food or drink; in this 08 paragraph, "cigarette" has the meaning given in AS 43.50.170; [OR] 09 (8) a manufacturer with 50 or fewer employees; or 10 (9) a marine product or motorized recreational product 11 agreement, as regulated under AS 45.27. 12 * Sec. 4. AS 45.50.471(b) is amended by adding a new paragraph to read: 13 (53) violating AS 45.27 (marine products and motorized recreational 14 products). 15 * Sec. 5. AS 45.50.572 is amended by adding a new subsection to read: 16 (m) AS 45.50.562 - 45.50.596 do not apply to action taken by a person to 17 comply with AS 45.27 or to action refrained from by a person to comply with 18 AS 45.27 (Alaska Marine Product and Motorized Recreational Product Act). 19 * Sec. 6. The uncodified law of the State of Alaska is amended by adding a new section to 20 read: 21 APPLICABILITY. This Act does not apply to an agreement that is entered into before 22 the effective date of this Act. In this section, "agreement" has the meaning given in 23 AS 45.27.990, enacted by sec. 2 of this Act. 24 * Sec. 7. This Act takes effect immediately under AS 01.10.070(c).