HB 142: "An Act relating to the sale of new or used motor vehicles; relating to the confidentiality of certain information related to attorney general investigations of unlawful trade practices and antitrust activities; establishing additional unlawful trade practices; relating to the mail order catalog exemption from telephonic solicitation regulation; regulating the sale of business opportunities; amending Rules 4 and 73, Alaska Rules of Civil Procedure; and providing for an effective date."
00HOUSE BILL NO. 142 01 "An Act relating to the sale of new or used motor vehicles; relating to the 02 confidentiality of certain information related to attorney general investigations of 03 unlawful trade practices and antitrust activities; establishing additional unlawful 04 trade practices; relating to the mail order catalog exemption from telephonic 05 solicitation regulation; regulating the sale of business opportunities; amending 06 Rules 4 and 73, Alaska Rules of Civil Procedure; and providing for an effective 07 date." 08 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 09 * Section 1. AS 45.45.400(a) is amended to read: 10 (a) A person engaged in the business of selling used motor vehicles may not 11 contract to sell, transfer, or assign a [THE OWNER'S TITLE OR INTEREST IN 12 THE] used motor vehicle to a person who resides in an area subject to a state- 13 approved emission inspection program established under AS 46.14.400 or 46.14.510 and who 14 intends to use the vehicle in that area [,] unless, before entering into the contract, the
01 person engaged in the business of selling used motor vehicles 02 (1) provides the prospective buyer, transferee, or assignee with a 03 valid copy of [THE VEHICLE HAS] a certificate of inspection [COMPLIANCE] or 04 noncompliance for the vehicle as required under the air pollution control requirements 05 applicable in that area; and 06 (2) obtains from the prospective buyer, transferee, assignee, or the 07 agent of the prospective buyer, transferee. or assignee, a signed, written 08 acknowledgment that the prospective buyer, transferee, or assignee, or the agent 09 of the prospective buyer, transferee, or assignee has received a copy of the 10 certificate of inspection or noncompliance as required by (1) of this subsection. 11 * Sec. 2. AS 45.50.471(b) is amended by adding new paragraphs to read: 12 (42) a person engaged in the business of selling new or used motor 13 vehicles failing to disclose in writing to a motor vehicle buyer, before a 14 contract for the sale is entered into, information that the seller knows or could 15 have known through the exercise of reasonable diligence on the accident 16 history of the vehicle and any safety problems with the vehicle; 17 (43) violating AS 45.66 (sales of business opportunities). 18 * Sec. 3. AS 45.50.521(b) is amended to read: 19 (b) Subject to the provisions of AS 45.50.501(a), the attorney general may not 20 make public the name of a person alleged to have committed an act or practice 21 declared unlawful by AS 45.50.471 - 45.50.561 [IN AS 45.50.471] during an 22 investigation conducted by the attorney general under AS 45.50.471 - 45.50.561, nor 23 are the records of investigation or intelligence information of the attorney general 24 obtained or created in the course of the investigation under AS 45.50.471 - 25 45.50.561 considered public records available for inspection or copying under 26 AS 09.25.110 - 09.25.220 by the general public at any time during or after the 27 investigation. However, the attorney general is not prevented from issuing public 28 statements describing or warning of a course of conduct or a conspiracy that 29 constitutes or will constitute an unlawful act or practice, whether on a local, state, 30 regional, or national basis. 31 * Sec. 4. AS 45.50.594 is amended by adding a new subsection to read:
01 (e) Testimony given under a demand, or a copy of the testimony, is subject to 02 the same restrictions and prohibition against disclosure as is documentary material 03 under AS 45.50.592(e). 04 * Sec. 5. AS 45.50 is amended by adding a new section to read: 05 Sec. 45.50.595. Confidentiality of investigatory records. Investigation 06 records obtained or created by the attorney general in the course of an investigation 07 under AS 45.50.562 - 45.50.596 are not considered public records available for 08 inspection or copying under AS 09.25.110 - 09.25.220 by the public at any time during 09 or after the investigation. However, the attorney general may issue public statements 10 describing or warning of a course of conduct or a conspiracy that constitutes or will 11 constitute a violation of AS 45.50.562 - 45.50.596, whether on a local, state, regional, 12 or national basis. 13 * Sec. 6. AS 45.63.080(14) is repealed and reenacted to read: 14 (14) of property from a mail order catalog, if the person making the 15 solicitation does not initiate contact with prospective customers by telephonic means, 16 if contact by telephonic means is initiated by the prospective customer in response to 17 the catalog, and if during the contact the person making the solicitation does not make 18 a further solicitation; in this paragraph, 19 (A) "further solicitation" does not include providing the 20 prospective customer with information about, or attempting to sell, another item 21 included in the same mail order catalog that prompted the prospective 22 customer's contact; 23 (B) "mail order catalog" means a publication that 24 (i) is published one or more times a year; 25 (ii) is delivered to prospective customers; 26 (iii) describes or pictures the products, equipment, or 27 supplies for sale and prominently provides the specific price of each; 28 (iv) includes the business name, address, and telephone 29 number of the person who owns and produces the publication; 30 (v) includes instructions to prospective buyers on how 31 to order products from the publication;
01 (vi) includes 10 or more pages of written material and 02 illustrations; 03 (vii) is distributed in this state; and 04 (viii) has an annual mail circulation of 10,000 or more 05 copies. 06 * Sec. 7. AS 45 is amended by adding a new chapter to read: 07 Chapter 66. Sales of Business Opportunities. 08 Sec. 45.66.010. Registration required. A seller may not sell or offer to sell 09 a business opportunity unless the seller is registered with the department at least 30 10 days before the seller's solicitation campaign begins. 11 Sec. 45.66.020. Registration procedure. (a) To register under AS 45.66.010, 12 a seller shall file with the department 13 (1) the disclosure statement required by AS 45.66.070 and any 14 advertising, pamphlets, brochures, or other materials to be used in the solicitation 15 campaign; 16 (2) the bond required by AS 45.66.050; 17 (3) an irrevocable consent appointing the department as the seller's 18 agent for the receipt of service of process in a court action or other proceeding against 19 the seller, or the successor in interest of the seller, for a violation of this chapter; 20 (4) a completed application form that satisfies (b) of this section; 21 (5) a signed statement that the seller has read and will comply with this 22 chapter and the regulations adopted under it; and 23 (6) other information requested by the department to evaluate whether 24 the applicant meets the requirements of this chapter. 25 (b) The application form shall be established by the department by regulation 26 and must contain information including 27 (1) the nature of the solicitation campaign; 28 (2) the identity and business practices of the seller, including 29 information on the owners, employees, agents, officers, and other persons affiliated 30 with the seller; and 31 (3) disclosures of criminal convictions, civil judgments, orders, consent
01 decrees, or administrative determinations involving allegations of fraud, theft, 02 embezzlement, fraudulent conversion, misappropriation of property, the use of untrue 03 or misleading representations in an attempt to sell or dispose of real or personal 04 property, violations of this chapter, violations of AS 45.63 (telephonic solicitations), 05 violations of AS 45.68 (charitable solicitations), or unfair or deceptive business 06 practices under AS 45.50.471 - 45.50.561, by the seller, including the owners, 07 employees, agents, officers, and other persons affiliated with the seller. 08 (c) Registration under AS 45.66.010 or renewal under AS 45.66.030 is not 09 complete until the seller receives an acknowledgment from the department that the 10 seller has complied with (a) of this section or 45.66.030. 11 Sec. 45.66.030. Renewal of registration. If a solicitation campaign continues 12 for more than one year from the date of department's acknowledgment of the initial 13 registration under this chapter, a seller shall renew the registration each year that the 14 solicitation campaign continues by filing before or on the anniversary date of the 15 department's acknowledgment under AS 45.66.020(c) a renewal application on a form 16 established by the department by regulation requesting information that is similar to 17 the information required under AS 45.66.020. 18 Sec. 45.66.040. Material changes in registration information. If there is 19 a material change in the information provided under AS 45.66.020 or 45.66.030, the 20 seller shall, within 10 days of the change, file with the department a statement 21 describing the change on a form established by the department by regulation. 22 Sec. 45.66.050. Surety bond required. (a) A seller shall obtain a surety 23 bond in the amount of $75,000 issued by a surety company authorized to do business 24 in the state. The bond must be in favor of the state for the benefit of a buyer and 25 must satisfy the conditions established by the department by regulation. 26 (b) If the department finds that the amount of the bond set by (a) of this 27 section is insufficient to protect the public interest, the department may by regulation 28 increase the amount of the bond. 29 Sec. 45.66.060. Location of offer and sale. This chapter applies to a sale of 30 or offer to sell a business opportunity if 31 (1) the offer, regardless of whether either party is then present in this
01 state, originates in this state, or is directed by the offeror to this state and received at 02 the place to which the offer is directed, including a post office box; this paragraph 03 does not include an offer that 04 (A) appears in a bona fide newspaper or other publication of 05 general circulation that is not published in this state or that is published in this 06 state but more than two-thirds of its circulation was outside this state during 07 the 12 months preceding the offer; or 08 (B) is made on a radio or television program that originates 09 outside this state and is received in this state; 10 (2) the acceptance 11 (A) has not been previously communicated, orally or in writing, 12 to the offeror outside this state; 13 (B) is communicated to the offeror in this state, regardless of 14 whether the seller or buyer is then present in this state, and the offeree 15 reasonably believes that the offeror is located in this state; and 16 (C) is received at the place to which it was directed, including 17 a post office box; or 18 (3) the buyer is domiciled in this state and the business opportunity is 19 or will be operated in this state. 20 Sec. 45.66.070. Disclosure requirements. (a) At least 10 days before the 21 buyer signs the contract, or at least 10 days before receipt of any consideration by the 22 seller, whichever event occurs first, the seller shall give the buyer the written 23 disclosure statement described in (b) of this section, require the buyer to sign a receipt 24 containing the buyer's name and the date when the buyer received the disclosure 25 statement, and give the buyer the original receipt with the buyer's original signature. 26 The seller shall retain a copy of the receipt. 27 (b) The department shall specify by regulation the form and content of the 28 disclosure statement required by (a) of this section, including 29 (1) the seller's name, type of business organization, address, and name 30 of any parent or affiliated company related to the transaction; 31 (2) the names, addresses, and other relevant information regarding the
01 owners, officers, directors, and other persons responsible for the seller's business 02 activities related to the contract; 03 (3) the business history of the seller and the seller's representatives and 04 the background of the seller and the seller's representatives that relates to business 05 opportunities; 06 (4) the total contract amount to be paid by the buyer and the schedule 07 of payments; 08 (5) the financial condition of the seller, including audits and recent 09 income statements; 10 (6) a complete description of the services that the seller will perform 11 for the buyer, including training; 12 (7) the history of the seller's registration or attempted registration in 13 this or another state as a seller of business opportunities; 14 (8) a history of civil actions, criminal actions, and consumer protection 15 complaints brought against the seller or its representatives related to the sale of 16 business opportunities and the resolution of the actions and complaints; 17 (9) identification of any bankruptcy actions filed in court by the seller 18 and the resolution of the actions; 19 (10) a statement adopted by the department by regulation to alert the 20 public about the legal requirements for a sale of business opportunities if the 21 department determines the statement is reasonable and necessary; 22 (11) if the seller makes a statement about potential earnings that can 23 be made through a business opportunity, the basis for the statement and the economic 24 risks associated with the business opportunity; 25 (12) the rights and obligations of the seller and buyer regarding 26 termination of the contract, including the rights arising out of the bond required by 27 AS 45.66.050; and 28 (13) any additional information that the department determines by 29 regulation is reasonable and in the public interest for the seller to provide in order to 30 make a complete disclosure concerning the contract. 31 Sec. 45.66.080. Written contract required. (a) In addition to the other
01 requirements of this chapter, a person may not contract to sell a business opportunity 02 unless the contract is in writing and the seller gives a copy of the contract to the buyer 03 when the buyer signs the contract. 04 (b) The department shall establish by regulation the content and format of the 05 information that must be contained in the contract, including 06 (1) the payment terms, including any escrow account required under 07 AS 45.66.090; 08 (2) name, address, and telephone number of the seller, the seller's 09 agent, and each supplier of products, equipment, or supplies that the seller is to deliver 10 to the buyer; 11 (3) the form of the seller's business organization; 12 (4) a description of services, including any training services, that the 13 seller is to provide to the buyer; 14 (5) the delivery date of the product, equipment, or supplies being sold 15 or leased; 16 (6) if the seller has represented that there is a buy-back agreement for 17 the business opportunity or that payments are protected or secured, a complete 18 description of those provisions; 19 (7) a statement of buyer's right to cancel, the circumstances when 20 cancellation is authorized, and the procedure for cancellation and refunds; and 21 (8) any other terms that the department determines are necessary to 22 protect the public interest. 23 Sec. 45.66.090. Restrictions on down payments. (a) A seller may not 24 require a buyer to pay as a down payment more than 20 percent of the initial payment 25 unless the excess above the 20 percent is placed in an escrow account that meets the 26 requirements of AS 45.66.100. 27 (b) In this section, 28 (1) "down payment" means that portion of the initial payment that the 29 buyer is obligated to pay to the seller before or at the time the products, equipment, 30 supplies, or services are delivered, but does not include any amount that is financed 31 by or for which financing is to be obtained by the seller or that results from financing
01 that the seller assists the buyer to obtain; 02 (2) "initial payment" means the total amount a buyer is obligated to pay 03 under the terms of the contract before or at the time the equipment, supplies, products, 04 or services are delivered or within six months of the buyer commencing operation of 05 the business opportunity, except that, if the contract sets out a specific total sale price 06 for the purchase of the business opportunity and the total price is to be paid partially 07 as a down payment and then in specific monthly payments or a subsequent lump sum 08 payment, "initial payment" means the entire total sale price. 09 Sec. 45.66.100. Escrow account requirements. (a) The holder of an escrow 10 account required by AS 45.66.090 must be a person who is independent from the 11 seller, and the seller may not make direct disbursements from the escrow account 12 except as provided in (c) of this section. 13 (b) A seller who establishes an escrow account required by AS 45.66.090 shall 14 promptly report to the department the following information: 15 (1) the name and address of the escrow account holder; 16 (2) the name and address of the financial institution, including the 17 branch, where the escrow account is located; and 18 (3) the escrow account number. 19 (c) Except as provided under AS 45.66.110, money placed in an escrow 20 account required by AS 45.66.090 may not be released until the buyer notifies the 21 escrow holder in writing that the products, equipment, supplies, or services required 22 by the contract have been delivered within the time set in the contract between the 23 buyer and seller. The buyer shall timely notify the escrow holder of deliveries in a 24 timely manner and may not unreasonably withhold the notification. 25 Sec. 45.66.110. Actions for claims against escrow account. (a) A buyer 26 who has a claim against an escrow account required by AS 45.66.090 may bring a 27 civil action against the seller or escrow account holder to recover money from the 28 escrow account. 29 (b) Upon the filing of an action brought under this section, the clerk of the 30 court shall mail a copy of the complaint to the attorney general and, upon entry of an 31 order or judgment in the action, shall mail a copy of the order or judgment to the
01 attorney general. 02 (c) A person may not begin an action under this section more than two years 03 after the person discovers or reasonably should have discovered the basis for the claim. 04 (d) In an action brought under this section, the court may award the prevailing 05 party all or a portion of the actual costs and attorney fees incurred by the party. 06 (e) The escrow holder is not liable for the amount by which claims or damages 07 caused by the seller exceed the amount of the escrow account. 08 Sec. 45.66.120. Cancellation of contract. (a) A buyer may cancel a contract 09 for any reason if the buyer gives notice of the cancellation to the seller within 30 days 10 after signing the contract. 11 (b) In addition to the right to cancel under (a) of this section, a buyer may 12 cancel the contract at any time if the seller 13 (1) fails to comply with AS 45.66.070 or 45.66.080; 14 (2) uses untrue, misleading, incomplete, or deceptive statements in the 15 solicitation campaign; 16 (3) fails, within 30 days of the delivery date specified in the contract, 17 to deliver the products, equipment, supplies, or services required under the contract to 18 begin substantial operation of the business to be started under the contract; or 19 (4) fails, contrary to the contract, to provide a location for the business 20 to be started under the contract. 21 (c) If provided by mail, the notice of cancellation is effective when it is 22 deposited in the mail properly addressed to the seller with postage prepaid. 23 (d) The notice of cancellation is not required to have a particular form. The 24 notice is sufficient if it indicates in writing the intention of the buyer not to be bound 25 by the contract. 26 (e) Within 15 days after the date the buyer gives a notice of cancellation under 27 this section, the seller must tender to the buyer any payments, including payments for 28 shipping costs, made by the buyer and terminate all financial obligations of the buyer 29 under the contract. Within five days of refund, the buyer shall make available to the 30 seller, at a reasonable time and place, any products, equipment, or supplies delivered 31 by the seller.
01 Sec. 45.66.130. Prohibited representations. (a) The seller may not state that 02 the seller is registered under this chapter unless the seller has complied with the 03 registration requirements of this chapter. 04 (b) Unless the seller is asked for the information by the buyer, a seller may 05 not state or imply that the seller has a license, consent, or other form of permission 06 from the state to sell business opportunities in this state. 07 (c) A seller may not make, or cause to be made, a representation that is 08 inconsistent with AS 45.66.150. 09 (d) A seller may not state or imply that the seller's compliance with the laws 10 of this state or a municipality constitutes approval or endorsement of the seller by the 11 state or municipality. 12 Sec. 45.66.140. Untrue statements or omissions. A person may not, in 13 connection with a sale of or offer to sell a business opportunity subject to registration 14 under this chapter, directly or indirectly make an untrue statement of material fact in 15 the registration information required under AS 45.66.020 - 45.66.040 or in other 16 written or oral communications, including the disclosure required under AS 45.66.070 17 and advertising, related to the sale or offer, or omit to state a material fact necessary, 18 in light of the circumstances under which it is made, to avoid a statement being 19 misleading. 20 Sec. 45.66.150. Unwarranted conclusions. (a) Acknowledgment of 21 registration by the department under AS 45.66.030 does not constitute a finding by 22 the department that a document filed with the department under this chapter is true, 23 complete, or not misleading. 24 (b) Acknowledgment of registration by the department under AS 45.66.030 25 does not mean that the department has passed in any way on the merits or 26 qualifications of the seller or business opportunity, or that the department recommends 27 or approves a seller. 28 (c) Availability of an exemption under AS 45.66.210 for a seller does not 29 mean that the state recommends or approves the seller. 30 Sec. 45.66.160. Waiver prohibited and void. A seller may not request or 31 obtain from a buyer a waiver of the rights or defenses of the buyer under this chapter.
01 A waiver of the rights or defenses of the buyer under this chapter is void. 02 Sec. 45.66.170. Seller's records and files. (a) A seller shall maintain a 03 complete set of records of the solicitation campaigns of the seller and allow the 04 department to inspect and copy them during reasonable business hours. 05 (b) A seller shall keep all documents relating to a contract entered into by the 06 seller for four years after the date the contract is entered into. 07 Sec. 45.66.180. Public records. Except for testimony and records related to 08 an investigation by the department under this chapter, the registration application form, 09 registration renewal form, disclosure statement, bond, contract, and other documents 10 required to be prepared or filed with the department under this chapter, including a 11 document created or obtained by the department under AS 45.66.190, are public 12 records available for public inspection and copying under AS 09.25.110 - 09.25.220. 13 Sec. 45.66.190. Denial, suspension, or revocation of registration. (a) 14 Subject to the other requirements of this section and after reviewing a response 15 submitted by the person under (b) of this section, the department may issue an order 16 denying, suspending, or revoking a registration made by a person under AS 45.66.010 17 - 45.66.030, or prohibiting a person from selling or offering to sell business 18 opportunities if the department finds that 19 (1) the person failed to comply with this chapter or the regulations 20 adopted under this chapter; 21 (2) the sale of or offer to sell would constitute, or has constituted, a 22 misrepresentation of, deceit of, or fraud on the buyer; 23 (3) the nature of the person's business enterprise or method of business, 24 or the nature or methods of the business opportunity includes activities that are illegal 25 where performed; 26 (4) the person failed to file a document or information required by 27 AS 45.66.020 - 45.66.040; 28 (5) the literature or advertising of the person, or of another person 29 recommended by the person, is misleading, incorrect, materially incomplete, or 30 deceptive; 31 (6) a person identified in the registration represents an unreasonable
01 risk to the public interest and 02 (A) has been convicted of 03 (i) a felony or misdemeanor involving fraud, theft, 04 embezzlement, fraudulent conversion, misappropriation of property, or 05 the use of untrue or misleading representations in the sale of or offer to 06 sell or otherwise dispose of real or personal property; or 07 (ii) violations under this chapter, violations of AS 45.63 08 (telephonic solicitations), violations of AS 45.68 (charitable 09 solicitations), or an unfair trade practice prohibited by AS 45.50.471 - 10 45.50.561; 11 (B) is subject to a final order or judgment against the person in 12 a civil or administrative action, including a stipulated order or judgment, if the 13 complaint or petition in the action alleged acts constituting 14 (i) a violation of this chapter; 15 (ii) fraud, theft, embezzlement, fraudulent conversion, 16 or misappropriation of real or personal property; 17 (iii) the use of untrue or misleading representations in 18 an offer to sell or dispose of real or personal property; 19 (iv) the use of unfair trade practices under AS 45.50.471 20 - 45.50.561; or 21 (v) a violation of AS 45.63 or AS 45.68; or 22 (C) is subject to an injunction relating to business activity if the 23 injunction resulted from an action brought by a federal, state, or local public 24 agency, including an action related to an occupational license under AS 08. 25 (b) Before issuing an order to a person under (a) of this section, the 26 department shall send by certified mail to the address set out in the person's 27 registration a notice of intent to issue the order. In the notice, the department shall 28 provide the facts supporting the denial, suspension, or revocation of the registration. 29 The person may respond to the notice by submitting a statement signed under penalty 30 of perjury by an owner or officer of the person. 31 Sec. 45.66.200. Criminal penalties. (a) A seller who recklessly violates
01 AS 45.66.010 - 45.66.050, 45.66.070 - 45.66.100, or 45.66.140 is guilty of a class C 02 felony. 03 (b) A seller who recklessly violates AS 45.66.120(e), 45.66.130, or 45.66.160 04 is guilty of a class A misdemeanor. 05 (c) Each violation is a separate offense and a prosecution or conviction for one 06 of the offenses does not bar prosecution or conviction of another offense. 07 Sec. 45.66.210. Exemptions. This chapter does not apply to a sale or offer 08 to sell 09 (1) if the total amount of the payments to be made by the buyer under 10 the contract is less than $200; 11 (2) a franchise under 16 CFR 436, as amended from time to time; 12 (3) an ongoing business operated by the seller that is to be sold in its 13 entirety; 14 (4) a business opportunity to an ongoing business if the seller will 15 provide products, equipment, supplies, or services that are to be sold by the buyer in 16 connection with the buyer's ongoing business; 17 (5) a nonprofit sale of sales demonstration equipment, materials, or 18 samples for use in making sales and not for resale, or of product inventory sold to the 19 buyer at a bona fide wholesale price; 20 (6) by an executor, an administrator, a marshal, a receiver, a trustee in 21 bankruptcy, or a guardian or conservator, or under a judicial sale; 22 (7) a security regulated under AS 45.55 or a security that is exempted 23 by AS 45.55.900 from regulation under AS 45.55; 24 (8) if the sale or offer is by a person registered with the United States 25 Securities and Exchange Commission when acting within the scope of the person's 26 Securities and Exchange Commission license; 27 (9) by an issuer, or a subsidiary of an issuer, of a class of securities 28 that is 29 (A) subject to 15 U.S.C. 78a - 78lll (Securities Exchange Act 30 of 1934); and 31 (B) either registered under 15 U.S.C. 78a - 78lll (Securities
01 Exchange Act of 1934) or exempt from registration under 15 U.S.C. 02 78l(g)(2)(A) - (C) or (E) - (H); 03 (10) a business opportunity where the buyer is 04 (A) a bank, savings and loan association, trust company, 05 insurance company, credit union, or investment company under 15 U.S.C. 80a- 06 1 - 80a-64 (Investment Company Act of 1940), pension or profit sharing trust, or other 07 financial institution or institutional buyer; or 08 (B) a dealer registered under AS 45.55 (Alaska Securities Act 09 of 1959) if the buyer is acting for itself or in a fiduciary capacity; 10 (11) a business opportunity that involves a marketing plan made in 11 conjunction with the registration of a trademark or service mark under 15 U.S.C. 1051 12 - 1127 (Lanham Act) if the seller has a minimum net worth of $1,000,000 as 13 determined on the basis of the seller's most recent audited financial statement prepared 14 within 13 months of the first offer to sell in this state; net worth may be determined 15 on a consolidated basis if one person owns at least 80 percent of the seller and that 16 one person expressly guarantees the obligations of the seller that arise under the sale 17 or offer claimed to be exempt under this paragraph; or 18 (12) in which either the seller or the buyer is licensed as a real estate 19 broker, associate real estate broker, or real estate sales person under AS 08.88 and the 20 sale or offer is regulated by AS 08.88. 21 Sec. 45.66.220. Coordination with other laws. (a) The rights and remedies 22 in this chapter are in addition to other legal rights and remedies available to a buyer 23 or the department. 24 (b) To the extent of the conflict, the provisions of this chapter govern if a sale 25 or offer to sell a business opportunity is regulated by this chapter and by AS 45.63 26 (telephonic solicitations), by AS 45.01 - AS 45.09, AS 45.12 and AS 45.14 (Uniform 27 Commercial Code), or by another law, and it is not possible to comply with or to 28 apply both this chapter and the other law. 29 Sec. 45.66.230. Regulations. The department may adopt regulations under 30 AS 44.62 (Administrative Procedure Act) to implement or interpret this chapter. 31 Sec. 45.66.900. Definitions. In this chapter, unless the context indicates
01 otherwise, 02 (1) "advertising" means a circular, prospectus, advertisement, or other 03 material or a communication by radio, television, pictures, or similar means used in 04 connection with a sale of or offer to sell a business opportunity; 05 (2) "business opportunity" means an express or implied arrangement 06 under which the seller or a person recommended by the seller will provide to the buyer 07 products, equipment, supplies, or services enabling the buyer to start a business and 08 in which the seller 09 (A) or a person recommended by the seller, will provide or 10 assist the buyer in finding locations for the use or operation of vending 11 machines, racks, display cases, or other similar devices on premises that are not 12 owned or leased by the buyer or seller; 13 (B) or a person recommended by the seller, will provide or 14 assist the buyer in finding outlets or accounts for the buyer's products or 15 services; 16 (C) or a person specified by the seller, will purchase any or all 17 products made, produced, fabricated, grown, bred, or modified by the buyer; 18 (D) or a person specified by the seller, will buy back or is likely 19 to buy back any products made, produced, fabricated, grown, bred, or modified 20 by the buyer using, in whole or in part, the product, supplies, equipment, or 21 services that were initially sold or offered for sale to the buyer by the seller; 22 (E) makes an oral or a written representation that the buyer will 23 derive income from the business that will exceed the price paid to the seller 24 and the representation would cause a reasonable person in the buyer's position 25 to believe the income is assured; 26 (F) will refund all or part of the price paid to the seller, or 27 repurchase some or all of the products, equipment, or supplies provided by the 28 seller or a person recommended by the seller, if the buyer is dissatisfied with 29 the business; or 30 (G) will provide the buyer with a marketing plan; 31 (3) "buyer" means a person who is solicited to become obligated or
01 does become obligated on a contract; 02 (4) "contract" means an agreement relating to a business opportunity; 03 (5) "department" means the Department of Law; 04 (6) "equipment" includes machines, electrical devices, video or audio 05 devices, computer devices, molds, display racks, vending machines, coin operated 06 game machines, machines that dispense products, and display units of all kinds; 07 (7) "marketing plan" means advice or training provided to the buyer by 08 the seller or a person recommended by the seller pertaining to the sale of products, 09 equipment, supplies, or services; 10 (8) "offer" or "offer to sell" means an attempt to sell or otherwise 11 dispose of a business opportunity for value; 12 (9) "product" includes a tangible chattel, including food or living 13 animals, that the buyer intends to 14 (A) sell or lease; 15 (B) use to perform a service; 16 (C) resell or offer to resell to the seller; or 17 (D ) provide or offer to provide to the seller, or to another 18 person whom the seller suggests the buyer contact, so that the seller or the 19 other person may assist either directly or indirectly the buyer to distribute, sell, 20 lease, or otherwise dispose of a product; 21 (10) "recklessly" has the meaning given in AS 11.81.900; 22 (11) "sale" means a contract to sell, lease, or otherwise dispose of a 23 business opportunity or an interest in a business opportunity for value; 24 (12) "sell" means to sell, lease, or otherwise dispose of a business 25 opportunity or an interest in a business opportunity for value; 26 (13) "seller" means a person, or the person's agent, who sells, leases, 27 offers to sell, offers to lease, or otherwise disposes of a business opportunity; 28 (14) "services" includes assistance, guidance, direction, work, labor, or 29 other act that may be provided by the seller in the initiation or maintenance of a 30 business; 31 (15) "solicitation campaign" means the sale of, or the offer to sell, a
01 business opportunity; 02 (16) "supplies" includes materials used to produce, grow, breed, 03 fabricate, modify, develop, or make a product or other item. 04 * Sec. 8 COURT RULES. AS 45.66.110(b), enacted by sec. 7 of this Act, changes 05 (1) Rule 4, Alaska Rules of Civil Procedure, by requiring the clerk of 06 the court to mail a copy of the complaint to the attorney general when an action is 07 filed under AS 45.66.110; 08 (2) Rule 73, Alaska Rules of Civil Procedure, by requiring the clerk of 09 the court to mail a copy of an order or judgment in an action under AS 45.66.110 to 10 the attorney general. 11 * Sec. 9. REGULATIONS. The Department of Law may proceed to adopt regulations 12 that it has authority to adopt for or under secs. 1 - 7 of this Act. The regulations take effect 13 under AS 44.62 (Administrative Procedure Act), but not before the effective dates of secs. 1 - 14 7 of this Act. 15 * Sec. 10. AS 45.66.110(b), enacted by sec. 7 of this Act, takes effect only if sec. 8 of this 16 Act receives the two-thirds majority vote of each house required by art. IV, sec. 15, 17 Constitution of the State of Alaska. 18 * Sec. 11. Sections 1 - 7 of this Act take effect July 1, 1997. 19 * Sec. 12. Section 9 of this Act takes effect immediately under AS 01.10.070(c).