CSHB 182(L&C): "An Act relating to certain vehicles, including motorcycles and trailers; relating to the registration and bonding of motor vehicle dealers; eliminating certain registration and other requirements for certain motor vehicle buyers' agents; relating to acts and transactions involving vehicles, including trailers, and to the acts and practices of certain persons and entities involved in vehicle transactions, including trailer transactions; and providing for an effective date."
00 CS FOR HOUSE BILL NO. 182(L&C) 01 "An Act relating to certain vehicles, including motorcycles and trailers; relating to the 02 registration and bonding of motor vehicle dealers; eliminating certain registration and 03 other requirements for certain motor vehicle buyers' agents; relating to acts and 04 transactions involving vehicles, including trailers, and to the acts and practices of 05 certain persons and entities involved in vehicle transactions, including trailer 06 transactions; and providing for an effective date." 07 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 08 * Section 1. AS 08.66.010 is amended to read: 09 Sec. 08.66.010. Dealers to register. A dealer in motor vehicles [, 10 TRAILERS, OR SEMI-TRAILERS] shall, as a condition to engaging in business in 11 the state, register biennially with the department [DEPARTMENT OF 12 ADMINISTRATION]. 13 * Sec. 2. AS 08.66.030 is amended to read:
01 Sec. 08.66.030. Form of application. The department [DEPARTMENT OF 02 ADMINISTRATION] shall prescribe and furnish the form of application for dealer 03 registration under AS 08.66.010. The application must contain 04 (1) the name under which the business is conducted; 05 (2) the location of the business; 06 (3) the name and address of all persons having an interest in the 07 business and, in the case of a corporation, the application shall contain the name and 08 address of the two principal officers; 09 (4) the name and make of all vehicles handled; 10 (5) a statement of whether or not used vehicles are handled; 11 (6) a statement that the applicant is a bona fide dealer in motor 12 vehicles [, TRAILERS, OR SEMI-TRAILERS] with an established business at the 13 location given; 14 (7) if the applicant sells a motor vehicle as a new or current model 15 motor vehicle having a manufacturer's warranty, the name of the manufacturer of the 16 motor vehicle and the date and duration of the applicant's sales and service agreement 17 with the manufacturer; and 18 (8) other information the department [DEPARTMENT OF 19 ADMINISTRATION] requires to administer this chapter [AS 08.66.010 - 20 08.66.090]. 21 * Sec. 3. AS 08.66.040 is amended to read: 22 Sec. 08.66.040. Filing application for registration. The application shall be 23 filed with the department [DEPARTMENT OF ADMINISTRATION]. Upon receipt 24 of the application, the department shall examine it and may make an investigation of 25 the information in it. If the department is satisfied that the dealer is entitled to 26 registration, and the fees have been paid and a bond filed, the department shall assign 27 a distinctive registration number to the dealer and file the dealer's application and 28 index it alphabetically and numerically. A dealer is registered when the department 29 assigns a registration number. 30 * Sec. 4. AS 08.66.050 is amended to read: 31 Sec. 08.66.050. Renewal of registration. A dealer shall renew the
01 registration required by this chapter [AS 08.66.010 - 08.66.090] before January 1 02 every two years. 03 * Sec. 5. AS 08.66.060 is repealed and reenacted to read: 04 Sec. 08.66.060. Bond. (a) An applicant for a dealer registration under 05 AS 08.66.010 shall file with the application and shall maintain in force while 06 registered a bond in favor of the state that is executed by a surety approved by the 07 commissioner. The amount of the bond shall be $50,000, except that the amount of a 08 bond for a dealer who sells only motorcycles shall be $25,000. The bond must be 09 conditioned on the dealer's 10 (1) doing business in compliance with this chapter and the other laws 11 of this state; and 12 (2) not committing fraud or making fraudulent representations in the 13 course of doing business as a dealer. 14 (b) A surety may cancel the bond required by (a) of this section by giving 15 notice in writing to the commissioner or the commissioner's designee. However, 16 cancellation does not relieve a surety of liability arising before cancellation or a 17 liability that has accrued on the bond before cancellation. The commissioner or the 18 commissioner's designee shall retain the canceled bond on file and may not relieve a 19 surety of a liability arising before cancellation or accruing on the bond before 20 cancellation. 21 (c) A bond filed under (a) of this section is valid for renewal of a dealer 22 registration unless the surety has provided a written notice of cancellation to the 23 commissioner. 24 (d) In this section, "commissioner" means the commissioner of administration. 25 * Sec. 6. AS 08.66.070 is amended to read: 26 Sec. 08.66.070. Action on bond. If a person suffers loss or damage by reason 27 of fraud, fraudulent representations, or a violation of a [ANY] provision of this 28 chapter or another law of this state [AS 08.66.010 - 08.66.090] by a dealer, the 29 person has a right of action against the dealer and a personal right of action against the 30 surety upon the bond. The aggregate liability of the surety may [DOES] not exceed 31 the amount of the bond.
01 * Sec. 7. AS 08.66.080 is amended to read: 02 Sec. 08.66.080. Penalties. A dealer who fails to register and file a bond as 03 required by this chapter [AS 08.66.010 - 08.66.090] is guilty of a violation. A dealer 04 who knowingly violates a provision of this chapter [AS 08.66.010 - 08.66.090] is 05 guilty of a class A misdemeanor. 06 * Sec. 8. AS 08.66.090 is repealed and reenacted to read: 07 Sec. 08.66.090. Definitions. In this chapter, 08 (1) "dealer" means a person, other than a manufacturer, who sells, 09 leases, or solicits the sale or lease of five or more new or used motor vehicles in any 10 12 consecutive months, regardless of who owns the vehicles; "dealer" does not include 11 (A) a receiver, a trustee, an administrator, an executor, a 12 guardian, or another person appointed by a court or a person performing duties 13 as a public officer; 14 (B) a person disposing of a motor vehicle acquired and actually 15 used for the person's own use or for the use of a family member of the person, 16 or acquiring a motor vehicle for the person's own use or for the use of a family 17 member of the person if the vehicle is acquired and used in good faith and not 18 for the purpose of avoiding the provisions of this chapter; 19 (C) a person who sells motor vehicles as an incident of the 20 person's principal business but who is not engaged primarily in the selling of 21 motor vehicles; 22 (D) an employee of an organization arranging for the purchase 23 or lease by the organization of a vehicle for use in the organization's business; 24 (E) a publication, broadcast, or other communications media 25 when engaged in the business of advertising, but not otherwise arranging for 26 the sale of a motor vehicle owned by another person; 27 (2) "department" means the Department of Administration; 28 (3) "motor vehicle" means a motor vehicle that is required to be 29 registered under AS 28.10. 30 * Sec. 9. AS 45 is amended by adding a new chapter to read: 31 Chapter 25. Motor Vehicle Transactions.
01 Article 1. Applicability; Venue; Corporate Affiliates. 02 Sec. 45.25.010. Applicability. AS 45.25.020 - 45.25.320 apply to franchise 03 contracts between a manufacturer and its new motor vehicle dealers in this state. 04 Sec. 45.25.020. Jurisdiction; choice of law. The courts of this state have 05 jurisdiction over a legal dispute between a manufacturer located in or outside this state 06 and a new motor vehicle dealer located in this state, and the dispute is governed by 07 and interpreted and adjudicated under the law of this state. 08 Sec. 45.25.030. Corporate affiliates. (a) A manufacturer may not use a 09 subsidiary corporation, affiliated corporation, partnership, association, or other person 10 to accomplish what would be prohibited for the manufacturer under this chapter. 11 (b) This section does not limit the right of a person included within the scope 12 of this section to engage in reasonable and appropriate business practices consistent 13 with an existing trade practice that is not prohibited by this chapter. 14 Article 2. Franchise Agreements. 15 Sec. 45.25.100. Consistency with state law. The terms and conditions in an 16 agreement between a manufacturer and a new motor vehicle dealer in this state, 17 including a motor vehicle franchise agreement, that are inconsistent with the law of 18 this state do not have any force or effect in this state. 19 Sec. 45.25.110. Termination of franchise agreements. (a) A manufacturer 20 may not terminate a franchise with a new motor vehicle dealer unless 21 (1) the manufacturer has 22 (A) satisfied the notice requirements of this chapter; 23 (B) shown that there is good cause for the termination of the 24 franchise, and, if the reasons underlying the good cause can be corrected by the 25 new motor vehicle dealer, the new motor vehicle dealer has failed for 60 days 26 after delivery of the notice required by AS 45.25.120 to make the corrections; 27 the circumstances identified under AS 45.25.120(a)(2) for which a 15-day 28 notice of termination is required do not qualify as reasons for which correction 29 is allowed under this paragraph; or 30 (2) the new motor vehicle dealer has systematically engaged in fraud 31 against consumers or the manufacturer or in the operation of the new motor vehicle
01 dealership. 02 (b) Notwithstanding (a)(1) of this section, a manufacturer may not terminate a 03 franchise agreement with a new motor vehicle dealer because of the death or 04 incapacity of an owner if the owner is not listed in the franchise as one on whose 05 expertise and abilities the manufacturer relied in the granting of the franchise. 06 (c) In this section, "good cause" includes when the new motor vehicle dealer 07 fails to comply with or observe a material provision of the franchise agreement. For 08 the purposes of determining good cause under this subsection, reasonable sales and 09 service performance criteria and capital and facility requirements may be considered 10 material provisions only if the criteria or requirements were communicated in writing 11 to the new motor vehicle dealer within a reasonable period before the effective date of 12 the termination or nonrenewal so that a reasonable opportunity was afforded over a 13 period of not less than six months to comply with the criteria or requirements. 14 Sec. 45.25.120. Notice of termination. (a) A manufacturer shall furnish a 15 notice of termination of a franchise agreement to a new motor vehicle dealer at least 16 (1) 90 days before the effective date of a termination, except as 17 required under (2) or (3) of this subsection; 18 (2) 15 days before the effective date of a termination when the new 19 motor vehicle dealer 20 (A) is insolvent or is the subject of a bankruptcy or receivership 21 proceeding; 22 (B) has failed to conduct its customary sales and service 23 operations during its customary business hours for seven consecutive business 24 days; this subparagraph does not apply to closures due to acts of God or 25 circumstances beyond the direct control of the new motor vehicle dealer; or 26 (C) is convicted of a felony involving moral turpitude or fraud 27 under the law of this state, another state, the federal government, a territory of 28 the United States, or the District of Columbia; 29 (3) 180 days before the effective date of the termination if the 30 manufacturer or distributor is discontinuing the sale of the product line. 31 (b) Notice required under (a) of this section must be in writing, shall be sent
01 by certified mail or personally delivered to the new motor vehicle dealer, and must 02 contain 03 (1) a statement of intention to terminate the franchise; 04 (2) a statement of the reasons for the termination; and 05 (3) the date on which the termination takes effect. 06 Sec. 45.25.130. Threat of termination. (a) A manufacturer or manufacturer 07 representative may not coerce or attempt to coerce a new motor vehicle dealer to enter 08 into an agreement with the manufacturer or a subsidiary of the manufacturer, or to do 09 any other act unfair to the new motor vehicle dealer, by threatening to terminate a 10 franchise agreement between the manufacturer or subsidiary of the manufacturer and 11 the new motor vehicle dealer. 12 (b) This section does not prohibit a voluntary agreement between a 13 manufacturer and a new motor vehicle dealer or between a distributor and a new 14 motor vehicle dealer to settle legitimate disputes. 15 Sec. 45.25.140. Repurchase obligations on termination. (a) Upon the 16 termination of a new motor vehicle dealer's franchise agreement by the manufacturer 17 or distributor, the manufacturer or distributor shall repurchase from the new motor 18 vehicle dealer at 19 (1) the new motor vehicle dealer's net acquisition cost, if the motor 20 vehicles have not been altered or damaged, of inventory consisting of unsold new 21 motor vehicles that are current models and that have been acquired from the 22 manufacturer within the past two model years before receipt of the notice of 23 termination; 24 (2) the new motor vehicle dealer price listed in the current parts 25 catalog, less applicable allowances, new unused undamaged parts in their original, 26 unbroken packaging, listed in the current price catalog and acquired from the 27 manufacturer or distributor; 28 (3) fair market value, signs, equipment, and furnishings that bear a 29 trademark or trade name, that have not been altered or damaged, and that were 30 required by the manufacturer or distributor within five years preceding the notice of 31 termination; and
01 (4) the new motor vehicle dealer's net acquisition cost, special tools 02 that have not been altered or materially damaged that were purchased from the 03 manufacturer or distributor within three years preceding the date of the termination. 04 (b) Within 90 days after the effective date of the termination, the new motor 05 vehicle dealer shall return the property required by (a) of this section to be 06 repurchased to the manufacturer or distributor at the manufacturer's or distributor's 07 expense. The manufacturer or distributor shall pay the compensation for the property 08 within 60 days after the tender of inventory and other items if the new motor vehicle 09 dealer has clear title to the property and is in a position to convey that title to the 10 manufacturer or distributor. If the property is subject to a security interest, the 11 manufacturer or distributor may make payment jointly to the new motor vehicle dealer 12 and the holder of the security interest, and the manufacturer or distributor may offset 13 these payments. 14 Sec. 45.25.150. Required compensation for new motor vehicle dealer 15 facilities. (a) Upon termination by the manufacturer or distributor, the manufacturer 16 or distributor shall compensate the new motor vehicle dealer for new motor vehicle 17 dealer facilities a sum equivalent to the 18 (1) rent for the unexpired term of the lease or 18 months, whichever 19 period is shorter, if the new motor vehicle dealer is leasing the new motor vehicle 20 dealership facilities from a lessor other than the manufacturer or distributor; or 21 (2) reasonable rental value of the new motor vehicle dealership 22 facilities for 18 months or until the facilities are leased or sold, whichever period is 23 shorter, if the new motor vehicle dealer owns the new motor vehicle dealership 24 facilities; the sum may be paid in monthly installments at the election of the 25 manufacturer or distributor. 26 (b) This section does not relieve a new motor vehicle dealer of the obligation 27 to mitigate damages under a lease, prevent a manufacturer from occupying and using 28 the new motor vehicle dealer's facilities while paying rent, or preclude a manufacturer 29 from negotiating a lease termination, sublease, or new lease. 30 (c) This section does not apply to a termination for 31 (1) insolvency of the new motor vehicle dealer or the filing of any
01 petition by or against the new motor vehicle dealer under a bankruptcy or receivership 02 law; 03 (2) failure of the new motor vehicle dealer to conduct its customary 04 sales and service operations during its customary business hours for seven consecutive 05 business days; 06 (3) conviction of the new motor vehicle dealer or its principal owners 07 of a felony or a misdemeanor regardless of the punishment if the crime involves theft, 08 dishonesty, or false statement; 09 (4) revocation of a license required for the new motor vehicle dealer to 10 operate; or 11 (5) a fraudulent misrepresentation by the new motor vehicle dealer to 12 the manufacturer or distributor that is material to the new motor vehicle dealer's 13 agreement. 14 (d) The payment required under (a) of this section is only required to the 15 extent that the facilities were used for activities under the franchise agreement and 16 only to the extent the facilities were not leased for unrelated purposes. 17 (e) If payment under (a) of this section is made, the manufacturer or 18 distributor is entitled to possession and use of the new motor vehicle dealership 19 facilities for the period for which the payment is paid. 20 Sec. 45.25.160. Prevention or refusal to honor transfer of new motor 21 vehicle dealership ownership. A manufacturer may not unreasonably prevent or 22 refuse to honor a transfer of ownership of a new motor vehicle dealership. 23 Sec. 45.25.170. Succession. (a) A manufacturer or distributor may not 24 prevent or refuse to honor the succession to a new motor vehicle franchise of an heir 25 or devisee under a will of a franchisee, under a written instrument filed with the 26 manufacturer or distributor designating any person as the successor franchisee, or 27 under AS 13.06 - AS 13.36 (Uniform Probate Code), except that 28 (1) a designated successor must, within 60 days after the owner's death 29 or incapacity, give the manufacturer or distributor written notice of the intent to 30 succeed, and the designee must agree to be bound by all the terms and conditions of 31 the current franchise agreement;
01 (2) the manufacturer or distributor may request from the designated 02 successor personal and financial data that are reasonably necessary to determine the 03 qualifications of the designated successor; the designated successor shall provide the 04 information within 60 days after receiving the request; 05 (3) the manufacturer or distributor may not unreasonably withhold 06 approval of the succession; if the manufacturer or distributor refuses to honor the 07 succession, the manufacturer or distributor shall send written notice to the proposed 08 successor within 60 days after receiving the information requested in (2) of this 09 subsection or within 60 days after receiving the notice of the proposed successor's 10 intent to succeed, whichever is later. 11 (b) The notice required by (a)(3) of this section must state the specific grounds 12 for not approving the proposed successor. Within 30 days after the proposed 13 successor's receipt of the notice, the proposed successor may file a protest with the 14 superior court to determine whether the manufacturer or distributor has unreasonably 15 withheld approval. 16 (c) This section does not preclude the owner of a new motor vehicle 17 dealership from filing with the manufacturer or distributor a written instrument 18 designating any person as a successor. If there are competing successors, the written 19 instrument governs who may submit a proposal as a successor. 20 Sec. 45.25.180. New dealerships. (a) Before a manufacturer or distributor 21 enters into a franchise establishing or relocating a new motor vehicle dealer within a 22 relevant market area where the same line make is represented, the manufacturer or 23 distributor shall give 90 days' written notice to each new motor vehicle dealer of the 24 same line make in the relevant market area of the intention to establish an additional 25 new motor vehicle dealer or to relocate an existing new motor vehicle dealer within 26 that relevant market area. 27 (b) Within 30 days after receiving the notice required under (a) of this section 28 or within 30 days after the end of any appeal procedure provided by the manufacturer 29 or distributor, a new motor vehicle dealer may bring a declaratory judgment action in 30 the superior court of this state to determine whether good cause exists for the 31 establishment or relocation of a proposed new motor vehicle dealer. If an action is
01 filed, the manufacturer or distributor may not establish or relocate the proposed new 02 motor vehicle dealer until the court has rendered a decision on the matter. 03 (c) This section does not prohibit 04 (1) the relocation of an existing new motor vehicle dealer to a new 05 location not within four miles of an existing new motor vehicle dealer; 06 (2) the appointment of a successor new motor vehicle dealer at the 07 same location as its predecessor or within a two-mile radius from any boundary of the 08 predecessor's former location within two years from the date when the predecessor 09 ceased operations or was terminated, whichever occurred later; or 10 (3) the entering into of a renewal of, replacement of, or succeeding 11 franchise agreement with an existing new motor vehicle dealer whose operations will 12 continue at the existing new motor vehicle dealer's current location. 13 (d) When determining whether good cause exists for establishing or relocating 14 an additional new motor vehicle dealer for the same line make, the superior court shall 15 consider the existing circumstances, including 16 (1) whether the establishment of an additional franchise or relocation 17 of the existing new motor vehicle dealer appears to be warranted by economic and 18 marketing conditions, including anticipated future changes; 19 (2) the retail sales and service business transacted by the protesting 20 new motor vehicle dealer and other new motor vehicle dealers of the same line make 21 with a place of business in the relevant market area to be served by the additional 22 franchise or proposed new location of an existing new motor vehicle dealer during the 23 three-year period immediately preceding the notice; 24 (3) the investment necessarily made and obligations incurred by the 25 protesting new motor vehicle dealer to perform the protesting new motor vehicle 26 dealer's obligations under existing franchise agreements; 27 (4) the permanency of the investment of the protesting new motor 28 vehicle dealer; and 29 (5) whether it is beneficial or injurious to the public welfare for an 30 additional franchise to be established or for the existing new motor vehicle dealer to 31 be relocated.
01 (e) In this section, 02 (1) "relevant market area" means the greater of the area 03 (A) within a radius of 14 miles around an existing new motor 04 vehicle dealer; or 05 (B) of responsibility defined in a governing franchise 06 agreement; 07 (2) "relocate" and "relocation" do not include the relocation of a new 08 motor vehicle dealer within two miles of the new motor vehicle dealer's established 09 place of business. 10 Sec. 45.25.190. Arbitration. In a controversy between a manufacturer and a 11 new motor vehicle dealer under AS 45.25.010 - 45.25.320, neither the manufacturer 12 nor the new motor vehicle dealer is required to submit the controversy to arbitration. 13 If both the manufacturer and the new motor vehicle dealer agree to submit a 14 controversy under AS 45.25.010 - 45.25.320 to arbitration, the arbitration shall be 15 conducted under AS 09.43.020 - 09.43.180 (Uniform Arbitration Act), the 16 manufacturer and the new motor vehicle dealer shall each select one arbitrator, and 17 both the manufacturer and the new motor vehicle dealer shall select the third 18 arbitrator. 19 Article 3. Manufacturer and Distributor Practices. 20 Sec. 45.25.300. New motor vehicle dealership location and facilities. A 21 manufacturer may not require, coerce, or attempt to coerce a new motor vehicle dealer 22 to change the location of the new motor vehicle dealership, or to make any substantial 23 alterations to the new motor vehicle dealership premises or facilities if the change or 24 alteration would be unreasonable or if there is not a sufficient supply of new motor 25 vehicles to justify the expansion in light of the current market and economic 26 conditions. 27 Sec. 45.25.310. Discrimination. A manufacturer may not unfairly 28 discriminate among new motor vehicle dealers with respect to warranty 29 reimbursements or authority granted new motor vehicle dealers to make warranty 30 adjustments with retail customers. 31 Sec. 45.25.320. Claim audits and charge backs. A manufacturer or
01 distributor may not audit a claim, deny a claim, reduce the amount of a claim to be 02 reimbursed to a new motor vehicle dealer, or charge back a portion of the claim to a 03 new motor vehicle dealer if 18 or more months have passed since the new motor 04 vehicle dealer submitted the claim. In this section, "claim" means a claim made by a 05 new motor vehicle dealer for compensation by the manufacturer or distributor for sales 06 incentives, warranty repairs, service incentives, and related expenses. 07 Article 4. Dealer Practices. 08 Sec. 45.25.400. Prohibited use of advertising terms. (a) A motor vehicle 09 dealer may not use the term "invoice," "factory invoice," "dealer invoice," "dealer 10 cost," "wholesale price," or any other term of similar meaning in an advertisement for 11 the sale of a motor vehicle. 12 (b) A motor vehicle dealer may use the term "manufacturer's suggested retail 13 price," "MSRP," or "list price" in an advertisement for the sale of a motor vehicle, 14 subject to the restriction on price comparisons in AS 45.25.450 and the following: 15 (1) the advertised price must reference the final price listed on the 16 monroney sticker, including accessories and options physically attached to the vehicle 17 at the time of delivery to the dealer, plus any transportation charges, and minus all 18 manufacturer discounts and savings; 19 (2) the manufacturer's suggested retail price or the list price does not 20 include charges added by the dealer or options added to the vehicle by the dealer; and 21 (3) whenever using the term "manufacturer's suggested retail price," 22 "MSRP," or "list price," the dealer shall provide in the advertisement a clear and 23 conspicuous disclosure that states that a sale may not have occurred at that price. 24 Sec. 45.25.410. Availability of advertised items. A motor vehicle dealer 25 may not advertise vehicles and related goods or services at a specified dealer price 26 with the intent not to supply reasonably expected demand, unless the advertisement 27 discloses the number of vehicles in stock at the advertised price. 28 Sec. 45.25.420. Display of motor vehicles. A motor vehicle dealer shall 29 display all vehicles advertised for sale for the duration of the sale period in a 30 conspicuous and clearly visible location on the dealer's premises. The advertised sale 31 price for each vehicle must be clearly marked on the vehicle so the consumer can
01 readily identify the advertised price for the vehicle. 02 Sec. 45.25.430. Refusal to sell on advertised terms and conditions. A 03 motor vehicle dealer may not refuse to sell a motor vehicle on the terms and 04 conditions that the dealer has advertised. This section does not apply if 05 (1) the dealer can document that the advertised term or condition was 06 the result of an error on the part of the advertising medium or an outside advertising 07 agent; or 08 (2) the refusal is based on an error that was made in good faith by the 09 dealer and was clearly and conspicuously a mistake, and the dealer corrected the error 10 as soon as the dealer knew or reasonably should have known of the error. 11 Sec. 45.25.440. Advertised price. (a) When selling a motor vehicle, a motor 12 vehicle dealer may not charge dealer fees or costs, except for fees actually paid to a 13 state agency for licensing, registration, or title transfers, unless the fees or costs are 14 included in the advertised price. 15 (b) In this section, "dealer fees or costs" includes dealer preparation fees, 16 document preparation fees, surcharges, and other dealer imposed fees and costs. 17 Sec. 45.25.450. Advertised price comparisons, reductions, and discounts. 18 (a) A motor vehicle dealer may not make a price comparison, price reduction, or price 19 discount in an advertisement unless the comparison, reduction, or discount complies 20 with this section. 21 (b) A motor vehicle dealer may advertise a price comparison for a new motor 22 vehicle with the manufacturer's suggested retail price only if 23 (1) the dealer only uses the term "manufacturer's suggested retail 24 price," "MSRP," or "list price"; 25 (2) the advertised price references the final price listed on the 26 monroney sticker, including accessories and options physically attached to the vehicle 27 at the time of delivery to the dealer, plus any transportation charges and minus all 28 manufacturer discounts and savings; 29 (3) the manufacturer's suggested retail price, MSRP, or list price does 30 not include charges added by the dealer or options added to the vehicle by the dealer; 31 (4) the dealer clearly discloses that the manufacturer's suggested retail
01 price, MSRP, or list price may not reflect the actual selling price for the vehicle in the 02 dealer's trade area; and 03 (5) the dealer does not make a representation in the advertisement, 04 including a reference to a "sale," "reduction," or "discount," that the comparison 05 represents a saving to the consumer. 06 (c) A motor vehicle dealer may not use a competitor's price as a reference 07 price unless 08 (1) the reference price is the competitor's current, bona fide price in the 09 trade area of the dealer making the comparison; 10 (2) the comparison is to an identical or nearly identical vehicle that 11 does not materially differ in model, style, design, name, brand, kind, or quality from 12 the advertised product; and 13 (3) the dealer includes in the advertised price all charges that the 14 competitor includes in the competitor's price. 15 (d) A motor vehicle dealer shall be in possession of documents and all other 16 information necessary to substantiate all reference price claims when the claims are 17 made and shall maintain this information in a readily accessible place for two years 18 after the time the reference price claims are made. 19 Sec. 45.25.460. Advertising and selling practices generally. (a) In addition 20 to the provisions of AS 45.50.471 and regulations adopted under AS 45.50.471, a 21 motor vehicle dealer may not 22 (1) exclude from an advertisement of a motor vehicle for sale that 23 taxes, if applicable, vehicle registration fees, finance charges, charges for the issuance 24 of any certificate of compliance or noncompliance required by statute, or other fees or 25 charges to be paid to a third party that are not otherwise included in the advertised 26 price will be added to the advertised price at the time of the sale; 27 (2) represent the dealer document preparation fee as a government fee; 28 (3) advertise a specific motor vehicle for sale without identifying the 29 vehicle by either its vehicle identification number, vehicle stocking number, or license 30 number; 31 (4) advertise that free merchandise, gifts, or services will be provided
01 by the dealer if a vehicle is purchased; in this paragraph, "free" includes merchandise 02 or services offered for sale at a price less than the dealer's cost for the merchandise or 03 services; 04 (5) use the term "rebate," "cash back," or a similar term in advertising 05 the sale of a motor vehicle unless the rebate is expressed in a specific dollar amount 06 and is in fact a rebate offered by the vehicle manufacturer or distributor directly to the 07 retail buyer of the vehicle; 08 (6) require a person, in order to receive the advertised credit terms, to 09 pay a higher price for a motor vehicle and any related goods or services than the cash 10 price the same person would have to pay to purchase the same vehicle and related 11 goods or services; 12 (7) advertise a guaranteed trade in allowance or range of allowances 13 unless the guarantee is provided by the manufacturer or distributor; 14 (8) affix to a new motor vehicle a supplemental price sticker 15 containing a price that represents the dealer's asking price, if the supplemental price 16 sticker exceeds the manufacturer's suggested retail price, unless the supplemental 17 sticker 18 (A) clearly and conspicuously, in the largest print appearing on 19 the sticker other than the print size used for the dealer's name, discloses that 20 the supplemental sticker price is the dealer's asking price, or words of similar 21 meaning, and is not the manufacturer's suggested retail price; 22 (B) clearly and conspicuously discloses the manufacturer's 23 suggested retail price; and 24 (C) states, if the supplemental sticker price is greater than the 25 sum of the manufacturer's suggested retail price and the price of the items 26 added by the dealer, the difference and describes it as additional dealer mark- 27 up; 28 (9) advertise or otherwise represent, or knowingly allow to be 29 advertised or represented on behalf of the dealer, that a down payment is not required 30 in connection with the sale of a motor vehicle when a down payment is in fact 31 required;
01 (10) advertise an offer for the sale, lease, or purchase of a motor 02 vehicle that creates the false impression that the vehicle is being offered by a private 03 party or a motor vehicle agent or that does not contain the name of the dealer; 04 (11) use an advertisement for a motor vehicle that contains language 05 that falsely, implicitly, or explicitly suggests that, to take advantage of an offer, a 06 consumer must act within a certain period of time when, in fact, the vehicles will 07 continue to be available at the advertised price beyond that time period; 08 (12) require a buyer of a new motor vehicle, as a condition of sale and 09 delivery, to also purchase special features, appliances, accessories, or equipment not 10 desired or requested by the buyer unless the special features, appliances, equipment, or 11 accessories are already installed on the vehicle when received by the dealer; 12 (13) represent and sell as a new motor vehicle a demonstrator vehicle 13 or a motor vehicle that is a used motor vehicle; in this paragraph, "demonstrator 14 vehicle" 15 (A) means a motor vehicle 16 (i) that has been assigned by a dealer for use by the 17 dealership as an executive vehicle for promotional purposes, including 18 being driven in the community; 19 (ii) that has not been licensed by a retail buyer; and 20 (iii) the title of which has not been transferred to a retail 21 buyer; 22 (B) does not include a motor vehicle that has only been driven 23 to demonstrate the motor vehicle to a prospective buyer; 24 (14) advertise that the dealer finances any person, or does not reject 25 any person's credit, or make similar claims; 26 (15) advertise or make a statement, declaration, or representation in an 27 advertisement that cannot be substantiated in fact; the burden of proof of the factual 28 basis for the statement, declaration, or representation is on the dealer. 29 (b) A motor vehicle dealer shall disclose a beginning and ending date in all 30 motor vehicle sale advertisements. 31 Sec. 45.25.470. Sales of used motor vehicles. (a) Before the sale of a used
01 motor vehicle, a motor vehicle dealer shall 02 (1) when obtaining a used motor vehicle, by purchase or otherwise, 03 that the dealer intends to resell, make a reasonable inquiry of the seller about the 04 condition of the vehicle, including the vehicle's accident and repair history, to 05 determine if the vehicle has any known material defects; 06 (2) conduct a reasonable inspection of the vehicle, including a test 07 drive and visual inspection, for material defects; 08 (3) if the dealer has information that reasonably should lead the dealer 09 to know of the potential for a material defect in a used motor vehicle, conduct a further 10 inspection of the vehicle, including, at a minimum, placing the vehicle on a rack and 11 inspecting under the hood. 12 (b) A motor vehicle dealer shall make available to all sales staff and provide in 13 writing to a prospective buyer of the vehicle before sale all information obtained by a 14 motor vehicle dealer under this section, along with all information relating to repairs 15 made to the vehicle by the dealer. 16 (c) In (a) of this section, "material defect" means a condition that impairs the 17 safe operation of a motor vehicle by a reasonable person. 18 Sec. 45.25.480. Sales of vehicles manufactured for sale in a foreign 19 country. Before sale, a motor vehicle dealer shall disclose in writing whether a motor 20 vehicle was originally manufactured for sale in Canada or another foreign country. 21 Sec. 45.25.490. Identification number plates. A motor vehicle dealer may 22 not knowingly purchase or sell a vehicle that has an altered or removed vehicle 23 identification number plate, or alter or remove a vehicle identification number plate. 24 Sec. 45.25.500. Required documentation. A motor vehicle dealer may not 25 sell or offer to sell a motor vehicle unless the motor vehicle dealer holds a 26 manufacturer's statement of origin, a title, or another properly executed document 27 reasonably necessary to obtain the statement of origin or title for transfer of the 28 vehicle to the buyer. 29 Sec. 45.25.510. Trade-ins. A motor vehicle dealer may not transfer title to a 30 trade-in vehicle or perform any repairs or reconditioning on a trade-in vehicle before 31 the completion of the sales transaction for which the vehicle is a trade-in.
01 Sec. 45.25.520. Disclosure of damages. (a) Before entering into a new 02 motor vehicle sales contract, a new motor vehicle dealer shall disclose in writing to a 03 buyer of the new motor vehicle any known damage and repair to the new motor 04 vehicle if the damage exceeds five percent of the manufacturer's suggested retail price 05 as calculated at the dealer's authorized warranty rate for labor and parts. A new motor 06 vehicle dealer is not required to disclose to a buyer that glass, tires, bumpers, or 07 cosmetic parts of a new motor vehicle were damaged at any time if the damaged item 08 has been replaced with original or comparable equipment. A replaced part is not part 09 of the cumulative damage required to be disclosed under this subsection. 10 (b) If disclosure is not required under this section, a buyer may not revoke or 11 rescind a sales contract due to the fact that the new motor vehicle was damaged and 12 repaired before completion of the sale. 13 (c) In this section, 14 (1) "cosmetic parts" means parts that are attached by and can be 15 replaced in total through the use of screws, bolts, or other fasteners without the use of 16 welding or thermal cutting and includes windshields, bumpers, hoods, or trim panels; 17 (2) "manufacturer's suggested retail price" means the retail price of the 18 new motor vehicle suggested by the manufacturer and includes the retail delivered 19 price suggested by the manufacturer for each accessory or item of optional equipment 20 physically attached to the new motor vehicle at the time of delivery to the new motor 21 vehicle dealer that is not included within the retail price suggested by the manufacturer 22 for the new motor vehicle. 23 Sec. 45.25.530. Form of disclosures. Except as provided by 24 AS 45.25.460(a)(8)(A), if a disclosure is required by this chapter with respect to a 25 motor vehicle advertisement, the disclosure must be made in at least 12 point bold 26 type and in the same font style as the advertisement generally. 27 Sec. 45.25.590. Definitions. In AS 45.25.400 - 45.25.590, 28 (1) "advertise," "advertised," "advertising," and "advertisement" 29 include representations, whether made on or off store premises, made to persons in the 30 print media, in the broadcast media, on the computer, in a brochure, in a flyer, by 31 direct mail, by sign, or on a tag;
01 (2) "monroney sticker" means the window sticker required by 15 02 U.S.C. 1231 - 1233 (Automobile Information Disclosure Act); 03 (3) "motor vehicle," notwithstanding the definition of "motor vehicle" 04 in AS 45.25.990, means a vehicle, including a trailer, that is required to be registered 05 under AS 28.10, but does not include a motorcycle; 06 (4) "new motor vehicle," notwithstanding the definition of "new motor 07 vehicle" in AS 45.25.990, means a motor vehicle that has not been titled to anyone and 08 still retains the original manufacturer's certificate of origin. 09 Article 5. Sales and Service Contracts. 10 Sec. 45.25.600. Title transfer. A motor vehicle dealer may not transfer the 11 title for a motor vehicle to a buyer before all of the sale documents, including any 12 finance contract arranged by the seller, are complete and executed in final form by all 13 parties to the sale. 14 Sec. 45.25.610. Sales contracts. (a) A motor vehicle sales contract must be 15 in writing, signed by both the seller and buyer, and completed as to all essential 16 provisions before the signing of the contract by the buyer and before delivery of the 17 vehicle to the buyer. 18 (b) A motor vehicle dealer may not obtain a signed motor vehicle sales 19 contract from the buyer until any financing terms reflected on the motor vehicle 20 installment contract are final and complete. 21 (c) Notwithstanding the requirements of this section, if a motor vehicle dealer 22 arranges financing for a buyer, the motor vehicle dealer may deliver the motor vehicle 23 to the buyer before final approval by the financing entity if 24 (1) the buyer and seller sign an agreement separate from the motor 25 vehicle installment contract on an 8 1/2 x 11 inch sheet of paper that clearly and 26 conspicuously informs the buyer that final financing arrangements have not yet been 27 approved and that clearly sets out the amount that will be financed, the annual 28 percentage rate of the finance charge, the amount of the finance charge, the number 29 and frequency of payments, and the amount of each payment; 30 (2) the separate agreement clearly and conspicuously informs the 31 buyer that accepting delivery of the vehicle before final financing approval obligates
01 the buyer to terms of the motor vehicle sales contract if the terms on the separate 02 agreement are identical to the terms finally approved by the financing entity; and 03 (3) the separate agreement provides that the separate agreement, the 04 motor vehicle sales contract, and any and all other conditions of the purchase will be 05 void if any of the terms contained in the separate agreement are changed by either the 06 motor vehicle dealer or the financing institution as a condition of sale or final 07 financing approval. 08 (d) If a buyer's final financing is not approved within seven business days 09 from the date of the separate agreement and, as a result, the transaction is not 10 completed, the motor vehicle dealer shall return the buyer's entire down payment, and 11 the buyer's trade-in, if any, shall be returned to the buyer in the same condition and 12 with not more than 10 miles accumulated on the odometer from when the motor 13 vehicle was delivered to the motor vehicle dealer. 14 (e) In this section, "sales contract" includes an installment sales contract, a 15 short-term sales contract, and a single-payment contract. 16 Sec. 45.25.620. 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 motor vehicle dealer presents a service contract to the customer as an 19 "application" for a contract, it must be clearly and conspicuously marked as an 20 application and must disclose the applicable rules for obtaining a final service 21 contract. 22 (b) If a service contract is included in a motor vehicle sale, the seller shall, 23 before delivery of the motor vehicle, give to the buyer a written statement with all 24 pertinent blank spaces filled in that shall be signed by both the buyer and seller and 25 that clearly and conspicuously 26 (1) explains the difference between a service contract and a warranty; 27 (2) discloses the maker of or obligor on the service contract; 28 (3) describes the relationship between the maker and the seller of the 29 service contract; 30 (4) for a vehicle that is a used vehicle, notifies the buyer that the seller 31 may not disclaim implied warranties if the seller is the maker or obligor of the service
01 contract; and 02 (5) includes all other disclosures required by law. 03 (c) A motor vehicle dealer may not disclaim or limit implied warranties for a 04 motor vehicle for which the motor vehicle dealer is a maker of a service contract sold 05 for that motor vehicle. However, a motor vehicle dealer may disclaim or limit implied 06 warranties as otherwise allowed by law, regardless of the make or model of the motor 07 vehicle if the motor vehicle dealer is merely the seller, not the maker, of the service 08 contract and does not otherwise extend any written warranties on the motor vehicle 09 that is purchased. 10 (d) In this section, "maker" means the person that makes, frames, and executes 11 a service contract and assumes any obligation due to the buyer, but does not include a 12 motor vehicle dealer who merely sells the service contract as the agent of a service 13 contract company doing business in this state. 14 Article 6. General Provisions. 15 Sec. 45.25.900. Applicability. If a provision of this chapter conflicts with 16 another provision of this title, this chapter controls. 17 Sec. 45.25.910. Remedial purpose. The provisions of this chapter are 18 remedial. 19 Sec. 45.25.990. Definitions. In this chapter, 20 (1) "dealer" means a new motor vehicle dealer or used motor vehicle 21 dealer; 22 (2) "dealership" means the business entity that is operated by a motor 23 vehicle dealer; 24 (3) "distributor" means a person or entity who sells or distributes new 25 or used motor vehicles to motor vehicle dealers or who maintains or sends distributor 26 representatives within or to this state to sell or distribute new or used motor vehicles to 27 motor vehicle dealers in this state; in this paragraph, "distributor representative" 28 means a representative employed by a distributor branch, distributor, or wholesaler 29 who sells or distributes new or used motor vehicles to franchised motor vehicle dealers 30 in this state; 31 (4) "distributor branch" means a branch office maintained by a
01 distributor or wholesaler who sells or distributes new or used motor vehicles to 02 franchised motor vehicle dealers in this state; 03 (5) "family member" means a spouse, child, stepchild, grandchild, 04 stepgrandchild, parent, stepparent, brother, stepbrother, sister, or stepsister; 05 (6) "franchise" means a written arrangement for a definite or indefinite 06 period in which a manufacturer, distributor, or motor vehicle wholesaler grants to a 07 motor vehicle dealer a license, sales and service agreement, or contract of any kind to 08 use a trade name, service mark, or related characteristic, and in which there is a 09 community of interest in the wholesale or retail marketing of related motor vehicles or 10 services; 11 (7) "franchised" means having a franchise; 12 (8) "fraud" includes a promise or representation not made honestly or 13 in good faith, and an intentional failure to disclose a material fact; 14 (9) "good faith" means honesty in fact and the observation of 15 reasonable commercial standards of fair dealing in the trade; 16 (10) "lease," except in AS 45.25.150, means a contract by which a 17 person owning a motor vehicle grants to another person the right to possess, use, and 18 enjoy the motor vehicle for a specified period of time in exchange for periodic 19 payment of a stipulated price, and in which the use of the vehicle is granted for a 20 period of 12 or more months; 21 (11) "manufacturer" means a person or the person's subsidiary who 22 manufacturers, imports, distributes, or assembles new motor vehicles and includes an 23 administrator, a distributor, a distributor branch, and a factory branch; in this 24 paragraph, "factory branch" means a branch office maintained by a manufacturer for 25 directing and supervising the representatives of the manufacturer; 26 (12) "manufacturer representative" means any employee or agent of a 27 manufacturer who engages in the business of contacting a manufacturer's respective 28 franchised dealers for the purpose of making or promoting the sale of the 29 manufacturer's vehicles, parts, accessories, or services; 30 (13) "motor vehicle" means a motor vehicle that is required to be 31 registered under AS 28.10, but does not include a motor home, a recreational vehicle,
01 or a motorcycle; 02 (14) "motor vehicle dealer" means a person, other than a manufacturer, 03 who sells, leases, solicits, or arranges for sale or lease, of five or more new or used 04 motor vehicles in any 12 consecutive months, regardless of who owns the vehicles; 05 "motor vehicle dealer" does not include 06 (A) a receiver, trustee, administrator, executor, guardian, or 07 other person appointed by a court or a person performing duties as a public 08 officer; 09 (B) a person disposing of a motor vehicle acquired and actually 10 used for the person's own use or for the use of a family member of the person 11 if the vehicle is acquired and used in good faith and not for the purpose of 12 avoiding the provisions of this chapter; 13 (C) a person who sells motor vehicles as an incident of the 14 person's principal business but who is not engaged primarily in the selling of 15 motor vehicles; 16 (D) an employee of an organization arranging for the purchase 17 or lease by the organization of a vehicle for use in the organization's business; 18 (E) a publication, broadcast, or other communications media 19 when engaged in the business of advertising, but not otherwise arranging for 20 the sale of a motor vehicle owned by another person; 21 (F) a person acquiring an interest in a motor vehicle for a 22 family member of the person; 23 (15) "motor vehicle salesperson" means a person who is employed by 24 a motor vehicle dealer as a salesperson or sales representative to solicit, sell, lease, or 25 exchange motor vehicles under the direction of a motor vehicle dealer; 26 (16) "new motor vehicle" means a motor vehicle that has not been 27 previously sold to and registered to a person except a distributor, wholesaler, or motor 28 vehicle dealer for resale; 29 (17) "new motor vehicle dealer" means a motor vehicle dealer for new 30 motor vehicles or for new and used motor vehicles; 31 (18) "sale" means the issuance, transfer, agreement for transfer,
01 exchange, gift, pledge, hypothecation, or mortgage in any form, whether by transfer in 02 trust or otherwise, of a motor vehicle, an interest in a motor vehicle, or a related 03 franchise; 04 (19) "service contract" means an optional agreement that is separate 05 from a contract for the sale of a motor vehicle, and that covers certain repair or 06 maintenance functions beyond coverage provided by a warranty; 07 (20) "terminate" includes nonrenewal or cancellation; 08 (21) "used motor vehicle" means a motor vehicle that has been 09 previously sold to and registered to a person other than a distributor, wholesaler, or 10 motor vehicle dealer; 11 (22) "used motor vehicle dealer" means a motor vehicle dealer for used 12 motor vehicles. 13 * Sec. 10. AS 45.50.471(b)(33) is amended to read: 14 (33) violating AS 08.66 [AS 08.66.010 - 08.66.090] (motor vehicle 15 dealers); 16 * Sec. 11. AS 45.50.471(b) is amended by adding a new paragraph to read: 17 (43) violating AS 45.25.400 - 45.25.590 (motor vehicle dealer 18 practices). 19 * Sec. 12. AS 45.50.572 is amended by adding a new subsection to read: 20 (k) AS 45.50.562 - 45.50.596 do not apply to action taken by a person to 21 comply with AS 45.25 or to action refrained from by a person in order to comply with 22 AS 45.25 (motor vehicle transactions). 23 * Sec. 13. AS 08.66.015, 08.66.200, 08.66.210, 08.66.220, 08.66.230, 08.66.240, 24 08.66.250, 08.66.260, 08.66.270, 08.66.280, 08.66.290, 08.66.300, 08.66.310, 08.66.320, 25 08.66.330, 08.66.350; and AS 45.50.471(b)(34) are repealed. 26 * Sec. 14. The uncodified law of the State of Alaska is amended by adding a new section to 27 read: 28 APPLICABILITY. Sections 9, 11, and 12 of this Act apply to a franchise, as that term 29 is defined in AS 45.25.990, added by sec. 9 of this Act that is entered into on or after the 30 effective date of this Act. 31 * Sec. 15. This Act takes effect July 1, 2002.