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CSHB 182(FIN) am: "An Act relating to certain vehicles, including motorcycles and trailers; relating to the registration, bonding, and other regulation of motor vehicle dealers; relating to the registration and other regulation of 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; relating to consumer protection for used vehicle buyers; amending Rule 3, Alaska Rules of Civil Procedure; and providing for an effective date."

00 CS FOR HOUSE BILL NO. 182(FIN) am 01 "An Act relating to certain vehicles, including motorcycles and trailers; relating to the 02 registration, bonding, and other regulation of motor vehicle dealers; relating to the 03 registration and other regulation of certain motor vehicle buyers' agents; relating to acts 04 and 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; relating to consumer protection for used vehicle buyers; amending Rule 3, 07 Alaska Rules of Civil Procedure; and providing for an effective date." 08 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 09 * Section 1. AS 08.66.010 is amended to read: 10 Sec. 08.66.010. Dealers to register. A dealer in motor vehicles [, 11 TRAILERS, OR SEMI-TRAILERS] shall, as a condition to engaging in business in 12 the state, register biennially with the department [DEPARTMENT OF 13 ADMINISTRATION].

01 * Sec. 2. AS 08.66.030 is amended to read: 02 Sec. 08.66.030. Form of application. The department [DEPARTMENT OF 03 ADMINISTRATION] shall prescribe and furnish the form of application for dealer 04 registration under AS 08.66.010. The application must contain 05 (1) the name under which the business is conducted; 06 (2) the location of the business; 07 (3) the name and address of all persons having an interest in the 08 business and, in the case of a corporation, the application shall contain the name and 09 address of the two principal officers; 10 (4) the name and make of all vehicles handled; 11 (5) a statement of whether or not used vehicles are handled; 12 (6) a statement that the applicant is a bona fide dealer in motor 13 vehicles [, TRAILERS, OR SEMI-TRAILERS] with an established business at the 14 location given; 15 (7) if the applicant sells a motor vehicle as a new or current model 16 motor vehicle having a manufacturer's warranty, the name of the manufacturer of the 17 motor vehicle and the date and duration of the applicant's sales and service agreement 18 with the manufacturer; and 19 (8) other information the department [DEPARTMENT OF 20 ADMINISTRATION] requires to administer this chapter [AS 08.66.010 - 21 08.66.090]. 22 * Sec. 3. AS 08.66.040 is amended to read: 23 Sec. 08.66.040. Filing application for registration. The application shall be 24 filed with the department [DEPARTMENT OF ADMINISTRATION]. Upon receipt 25 of the application, the department shall examine it and may make an investigation of 26 the information in it. If the department is satisfied that the dealer is entitled to 27 registration, and the fees have been paid and a bond filed, the department shall assign 28 a distinctive registration number to the dealer and file the dealer's application and 29 index it alphabetically and numerically. A dealer is registered when the department 30 assigns a registration number. 31 * Sec. 4. AS 08.66.050 is amended to read:

01 Sec. 08.66.050. Renewal of registration. A dealer shall renew the 02 registration required by this chapter [AS 08.66.010 - 08.66.090] before January 1 03 every two years. 04 * Sec. 5. AS 08.66.060 is repealed and reenacted to read: 05 Sec. 08.66.060. Bond. (a) An applicant for a dealer registration under 06 AS 08.66.010 shall file with the application and shall maintain in force while 07 registered a bond in favor of the state that is executed by a surety approved by the 08 commissioner. The amount of the bond shall be $50,000, except that the amount of a 09 bond for a dealer who sells only motorcycles shall be $25,000. The bond must be 10 conditioned on the dealer's 11 (1) doing business in compliance with this chapter and the other laws 12 of this state; and 13 (2) not committing fraud or making fraudulent representations in the 14 course of doing business as a dealer. 15 (b) A surety may cancel the bond required by (a) of this section by giving 16 notice in writing to the commissioner or the commissioner's designee. However, 17 cancellation does not relieve a surety of liability arising before cancellation or a 18 liability that has accrued on the bond before cancellation. The commissioner or the 19 commissioner's designee shall retain the canceled bond on file and may not relieve a 20 surety of a liability arising before cancellation or accruing on the bond before 21 cancellation. 22 (c) A bond filed under (a) of this section is valid for renewal of a dealer 23 registration unless the surety has provided a written notice of cancellation to the 24 commissioner. 25 (d) In this section, "commissioner" means the commissioner of administration. 26 * Sec. 6. AS 08.66.070 is amended to read: 27 Sec. 08.66.070. Action on bond. If a person suffers loss or damage by reason 28 of fraud, fraudulent representations, or a violation of a [ANY] provision of this 29 chapter or another law of this state [AS 08.66.010 - 08.66.090] by a dealer, the 30 person has a right of action against the dealer and a personal right of action against the 31 surety upon the bond. The aggregate liability of the surety may [DOES] not exceed

01 the amount of the bond. 02 * Sec. 7. AS 08.66.080 is amended to read: 03 Sec. 08.66.080. Penalties. A dealer who fails to register and file a bond as 04 required by this chapter [AS 08.66.010 - 08.66.090] is guilty of a violation. A dealer 05 who knowingly violates a provision of this chapter [AS 08.66.010 - 08.66.090] is 06 guilty of a class A misdemeanor. 07 * Sec. 8. AS 08.66.350 is repealed and reenacted to read: 08 Sec. 08.66.350. Definitions. In this chapter, 09 (1) "buyer's agent" means a person who does business in the state by 10 negotiating on behalf of a buyer the purchase of a motor vehicle from a motor vehicle 11 dealer; 12 (2) "department" means the Department of Administration; 13 (3) "motor vehicle" means a motor vehicle that is required to be 14 registered under AS 28.10; 15 (4) "motor vehicle dealer" or "dealer" 16 (A) means 17 (i) a buyer's agent; or 18 (ii) a person, other than a manufacturer, who sells, 19 leases, solicits, or arranges for the sale or lease of five or more new or 20 10 used motor vehicles in any 12 consecutive months, regardless of 21 who owns the vehicles; 22 (B) does not include 23 (i) a receiver, a trustee, an administrator, an executor, a 24 guardian, or another person appointed by a court or a person 25 performing duties as a public officer; 26 (ii) a person disposing of a motor vehicle acquired and 27 actually used for the person's own use or for the use of a family 28 member of the person, or acquiring a motor vehicle for the person's 29 own use or for the use of a family member of the person if the vehicle 30 is acquired and used in good faith and not for the purpose of avoiding 31 the provisions of this chapter;

01 (iii) a person who sells motor vehicles as an incident of 02 the person's principal business but who is not engaged primarily in the 03 selling of motor vehicles; 04 (iv) an employee of an organization arranging for the 05 purchase or lease by the organization of a vehicle for use in the 06 organization's business; 07 (v) a publication, broadcast, or other communications 08 media when engaged in the business of advertising, but not otherwise 09 arranging for the sale of a motor vehicle owned by another person. 10 * Sec. 9. AS 45 is amended by adding a new chapter to read: 11 Chapter 25. Motor Vehicle Transactions. 12 Article 1. Applicability; Venue; Corporate Affiliates. 13 Sec. 45.25.010. Applicability. AS 45.25.020 - 45.25.320 apply to franchise 14 contracts between a manufacturer and its new motor vehicle dealers in this state. 15 Sec. 45.25.020. Jurisdiction; choice of law. (a) The courts of this state have 16 jurisdiction over a legal dispute between a manufacturer located in or outside this state 17 and a new motor vehicle dealer located in this state, and the dispute is governed by 18 and interpreted and adjudicated under the law of this state. 19 (b) Venue for a dispute under (a) of this section is in the judicial district of this 20 state where the new motor vehicle dealer's principal place of business is located. 21 Sec. 45.25.030. Corporate affiliates. (a) A manufacturer may not use a 22 subsidiary corporation, affiliated corporation, partnership, association, or other person 23 to accomplish what would be prohibited for the manufacturer under this chapter. 24 (b) This section does not limit the right of a person included within the scope 25 of this section to engage in reasonable and appropriate business practices consistent 26 with an existing trade practice that is not prohibited by this chapter. 27 Article 2. Franchise Agreements. 28 Sec. 45.25.100. Consistency with state law. The terms and conditions in an 29 agreement between a manufacturer and a new motor vehicle dealer in this state, 30 including a motor vehicle franchise agreement, that are inconsistent with the law of 31 this state do not have any force or effect in this state.

01 Sec. 45.25.110. Termination of franchise agreements. (a) A manufacturer 02 may not terminate a franchise with a new motor vehicle dealer unless 03 (1) the manufacturer has 04 (A) satisfied the notice requirements of this chapter; 05 (B) shown that there is good cause for the termination of the 06 franchise, and, if the reasons underlying the good cause can be corrected by the 07 new motor vehicle dealer, the new motor vehicle dealer has failed for 60 days 08 after delivery of the notice required by AS 45.25.120 to make the corrections; 09 the circumstances identified under AS 45.25.120(a)(2) for which a 15-day 10 notice of termination is required do not qualify as reasons for which correction 11 is allowed under this paragraph; or 12 (2) the new motor vehicle dealer has systematically engaged in fraud 13 against consumers or the manufacturer or in the operation of the new motor vehicle 14 dealership. 15 (b) Notwithstanding (a)(1) of this section, a manufacturer may not terminate a 16 franchise agreement with a new motor vehicle dealer because of the death or 17 incapacity of an owner if the owner is not listed in the franchise as one on whose 18 expertise and abilities the manufacturer relied in the granting of the franchise. 19 (c) In this section, "good cause" includes when the new motor vehicle dealer 20 fails to comply with or observe a material provision of the franchise agreement. For 21 the purposes of determining good cause under this subsection, reasonable sales and 22 service performance criteria and capital and facility requirements may be considered 23 material provisions only if the criteria or requirements were communicated in writing 24 to the new motor vehicle dealer within a reasonable period before the effective date of 25 the termination or nonrenewal so that a reasonable opportunity was afforded over a 26 period of not less than six months to comply with the criteria or requirements. 27 Sec. 45.25.120. Notice of termination. (a) A manufacturer shall furnish a 28 notice of termination of a franchise agreement to a new motor vehicle dealer at least 29 (1) 90 days before the effective date of a termination, except as 30 required under (2) or (3) of this subsection; 31 (2) 15 days before the effective date of a termination when the new

01 motor vehicle dealer 02 (A) is insolvent or is the subject of a bankruptcy or receivership 03 proceeding; 04 (B) has failed to conduct its customary sales and service 05 operations during its customary business hours for seven consecutive business 06 days; this subparagraph does not apply to closures due to acts of God or 07 circumstances beyond the direct control of the new motor vehicle dealer; or 08 (C) is convicted of a felony involving moral turpitude or fraud 09 under the law of this state, another state, the federal government, a territory of 10 the United States, or the District of Columbia; 11 (3) 180 days before the effective date of the termination if the 12 manufacturer or distributor is discontinuing the sale of the product line. 13 (b) Notice required under (a) of this section must be in writing, shall be sent 14 by certified mail or personally delivered to the new motor vehicle dealer, and must 15 contain 16 (1) a statement of intention to terminate the franchise; 17 (2) a statement of the reasons for the termination; and 18 (3) the date on which the termination takes effect. 19 Sec. 45.25.130. Threat of termination. (a) A manufacturer or manufacturer 20 representative may not coerce or attempt to coerce a new motor vehicle dealer to enter 21 into an agreement with the manufacturer or a subsidiary of the manufacturer, or to do 22 any other act unfair to the new motor vehicle dealer, by threatening to terminate a 23 franchise agreement between the manufacturer or subsidiary of the manufacturer and 24 the new motor vehicle dealer. 25 (b) This section does not prohibit a voluntary agreement between a 26 manufacturer and a new motor vehicle dealer or between a distributor and a new 27 motor vehicle dealer to settle legitimate disputes. 28 Sec. 45.25.140. Repurchase obligations on termination. (a) Upon the 29 termination of a new motor vehicle dealer's franchise agreement by the manufacturer 30 or distributor, the manufacturer or distributor shall repurchase from the new motor 31 vehicle dealer at

01 (1) the new motor vehicle dealer's net acquisition cost, if the motor 02 vehicles have not been materially altered or damaged, all inventory consisting of 03 unsold new motor vehicles that are current models and models that have been acquired 04 from the manufacturer within the past two model years before receipt of the notice of 05 termination; 06 (2) the new motor vehicle dealer price listed in the current parts 07 catalog, less applicable allowances, new unused undamaged parts in their original, 08 unbroken packaging, listed in the current price catalog and acquired from the 09 manufacturer or distributor; 10 (3) fair market value, signs, equipment, and furnishings that bear a 11 trademark or trade name, that have not been altered or damaged, and that were 12 required by the manufacturer or distributor within five years preceding the notice of 13 termination; and 14 (4) the new motor vehicle dealer's net acquisition cost, special tools 15 that have not been altered or materially damaged that were purchased from the 16 manufacturer or distributor within three years preceding the date of the termination. 17 (b) Within 90 days after the effective date of the termination, the new motor 18 vehicle dealer shall return the property required by (a) of this section to be 19 repurchased to the manufacturer or distributor at the manufacturer's or distributor's 20 expense. The manufacturer or distributor shall pay the compensation for the property 21 within 60 days after the tender of inventory and other items if the new motor vehicle 22 dealer has clear title to the property and is in a position to convey that title to the 23 manufacturer or distributor. If the property is subject to a security interest, the 24 manufacturer or distributor may make payment jointly to the new motor vehicle dealer 25 and the holder of the security interest, and the manufacturer or distributor may offset 26 these payments. 27 Sec. 45.25.150. Required compensation for new motor vehicle dealer 28 facilities. (a) Upon termination by the manufacturer or distributor, the manufacturer 29 or distributor shall compensate the new motor vehicle dealer for new motor vehicle 30 dealer facilities a sum equivalent to the 31 (1) rent for the unexpired term of the lease or 18 months, whichever

01 period is shorter, if the new motor vehicle dealer is leasing the new motor vehicle 02 dealership facilities from a lessor other than the manufacturer or distributor; or 03 (2) reasonable rental value of the new motor vehicle dealership 04 facilities for 18 months or until the facilities are leased or sold, whichever period is 05 shorter, if the new motor vehicle dealer owns the new motor vehicle dealership 06 facilities; the sum may be paid in monthly installments at the election of the 07 manufacturer or distributor. 08 (b) This section does not relieve a new motor vehicle dealer of the obligation 09 to mitigate damages under a lease, prevent a manufacturer from occupying and using 10 the new motor vehicle dealer's facilities while paying rent, or preclude a manufacturer 11 from negotiating a lease termination, sublease, or new lease. 12 (c) This section does not apply to a termination for 13 (1) insolvency of the new motor vehicle dealer or the filing of any 14 petition by or against the new motor vehicle dealer under a bankruptcy or receivership 15 law; 16 (2) failure of the new motor vehicle dealer to conduct its customary 17 sales and service operations during its customary business hours for seven consecutive 18 business days; 19 (3) conviction of the new motor vehicle dealer or its principal owners 20 of a felony or a misdemeanor regardless of the punishment if the crime involves theft, 21 dishonesty, or false statement; 22 (4) revocation of a license required for the new motor vehicle dealer to 23 operate; or 24 (5) a fraudulent misrepresentation by the new motor vehicle dealer to 25 the manufacturer or distributor that is material to the new motor vehicle dealer's 26 agreement. 27 (d) The payment required under (a) of this section is only required to the 28 extent that the facilities were used for activities under the franchise agreement and 29 only to the extent the facilities were not leased for unrelated purposes. 30 (e) If payment under (a) of this section is made, the manufacturer or 31 distributor is entitled to possession and use of the new motor vehicle dealership

01 facilities for the period for which the payment is paid. 02 Sec. 45.25.160. Prevention or refusal to honor transfer of new motor 03 vehicle dealership ownership. A manufacturer may not unreasonably prevent or 04 refuse to honor a transfer of ownership of a new motor vehicle dealership. 05 Sec. 45.25.170. Succession. (a) A manufacturer or distributor may not 06 prevent or refuse to honor the succession to a new motor vehicle franchise of an heir 07 or devisee under a will of a franchisee, under a written instrument filed with the 08 manufacturer or distributor designating any person as the successor franchisee, or 09 under AS 13.06 - AS 13.36 (Uniform Probate Code), except that 10 (1) a designated successor must, within 60 days after the owner's death 11 or incapacity, give the manufacturer or distributor written notice of the intent to 12 succeed, and the designee must agree to be bound by all the terms and conditions of 13 the current franchise agreement; 14 (2) the manufacturer or distributor may request from the designated 15 successor personal and financial data that are reasonably necessary to determine the 16 qualifications of the designated successor; the designated successor shall provide the 17 information within 60 days after receiving the request; 18 (3) the manufacturer or distributor may not unreasonably withhold 19 approval of the succession; if the manufacturer or distributor refuses to honor the 20 succession, the manufacturer or distributor shall send written notice to the proposed 21 successor within 60 days after receiving the information requested in (2) of this 22 subsection or within 60 days after receiving the notice of the proposed successor's 23 intent to succeed, whichever is later. 24 (b) The notice required by (a)(3) of this section must state the specific grounds 25 for not approving the proposed successor. Within 30 days after the proposed 26 successor's receipt of the notice, the proposed successor may file a protest with the 27 superior court to determine whether the manufacturer or distributor has unreasonably 28 withheld approval. 29 (c) This section does not preclude the owner of a new motor vehicle 30 dealership from filing with the manufacturer or distributor a written instrument 31 designating any person as a successor. If there are competing successors, the written

01 instrument governs who may submit a proposal as a successor. 02 Sec. 45.25.180. New dealerships. (a) Before a manufacturer or distributor 03 enters into a franchise establishing or relocating a new motor vehicle dealer within a 04 relevant market area where the same line make is represented, the manufacturer or 05 distributor shall give 90 days' written notice to each new motor vehicle dealer of the 06 same line make in the relevant market area of the intention to establish an additional 07 new motor vehicle dealer or to relocate an existing new motor vehicle dealer within 08 that relevant market area. 09 (b) Within 30 days after receiving the notice required under (a) of this section 10 or within 30 days after the end of any appeal procedure provided by the manufacturer 11 or distributor, a new motor vehicle dealer may bring a declaratory judgment action in 12 the superior court of this state to determine whether good cause exists for the 13 establishment or relocation of a proposed new motor vehicle dealer. If an action is 14 filed, the manufacturer or distributor may not establish or relocate the proposed new 15 motor vehicle dealer until the court has rendered a decision on the matter. 16 (c) This section does not prohibit 17 (1) the relocation of an existing new motor vehicle dealer to a new 18 location not within four miles of an existing new motor vehicle dealer; 19 (2) the appointment of a successor new motor vehicle dealer at the 20 same location as its predecessor or within a two-mile radius from any boundary of the 21 predecessor's former location within two years from the date when the predecessor 22 ceased operations or was terminated, whichever occurred later; or 23 (3) the entering into of a renewal of, replacement of, or succeeding 24 franchise agreement with an existing new motor vehicle dealer whose operations will 25 continue at the existing new motor vehicle dealer's current location. 26 (d) When determining whether good cause exists for establishing or relocating 27 an additional new motor vehicle dealer for the same line make, the superior court shall 28 consider the existing circumstances, including 29 (1) whether the establishment of an additional franchise or relocation 30 of the existing new motor vehicle dealer appears to be warranted by economic and 31 marketing conditions, including anticipated future changes;

01 (2) the retail sales and service business transacted by the protesting 02 new motor vehicle dealer and other new motor vehicle dealers of the same line make 03 with a place of business in the relevant market area to be served by the additional 04 franchise or proposed new location of an existing new motor vehicle dealer during the 05 three-year period immediately preceding the notice; 06 (3) the investment necessarily made and obligations incurred by the 07 protesting new motor vehicle dealer to perform the protesting new motor vehicle 08 dealer's obligations under existing franchise agreements; 09 (4) the permanency of the investment of the protesting new motor 10 vehicle dealer; and 11 (5) whether it is beneficial or injurious to the public welfare for an 12 additional franchise to be established or for the existing new motor vehicle dealer to 13 be relocated. 14 (e) In this section, 15 (1) "relevant market area" means the greater of the area 16 (A) within a radius of 14 miles around an existing new motor 17 vehicle dealer; or 18 (B) of responsibility defined in a governing franchise 19 agreement; 20 (2) "relocate" and "relocation" do not include the relocation of a new 21 motor vehicle dealer within two miles of the new motor vehicle dealer's established 22 place of business. 23 Sec. 45.25.190. Arbitration. In a controversy between a manufacturer and a 24 new motor vehicle dealer under AS 45.25.010 - 45.25.320, neither the manufacturer 25 nor the new motor vehicle dealer is required to submit the controversy to arbitration. 26 If both the manufacturer and the new motor vehicle dealer agree to submit a 27 controversy under AS 45.25.010 - 45.25.320 to arbitration, the arbitration shall be 28 conducted under AS 09.43.020 - 09.43.180 (Uniform Arbitration Act), the 29 manufacturer and the new motor vehicle dealer shall each select one arbitrator, and 30 both the manufacturer and the new motor vehicle dealer shall select the third 31 arbitrator.

01 Article 3. Manufacturer and Distributor Practices. 02 Sec. 45.25.300. New motor vehicle dealership location and facilities. A 03 manufacturer may not require, coerce, or attempt to coerce a new motor vehicle dealer 04 to change the location of the new motor vehicle dealership, or to make any substantial 05 alterations to the new motor vehicle dealership premises or facilities if the change or 06 alteration would be unreasonable or if there is not a sufficient supply of new motor 07 vehicles to justify the expansion in light of the current market and economic 08 conditions. 09 Sec. 45.25.310. Discrimination. A manufacturer may not unfairly 10 discriminate among new motor vehicle dealers with respect to warranty 11 reimbursements or authority granted new motor vehicle dealers to make warranty 12 adjustments with retail customers. 13 Sec. 45.25.320. Claim audits and charge backs. (a) A manufacturer or 14 distributor may not audit a claim, deny a claim, reduce the amount of a claim to be 15 reimbursed to a new motor vehicle dealer, or charge back a portion of the claim to a 16 new motor vehicle dealer if 18 or more months have passed since the new motor 17 vehicle dealer submitted the claim, or, if 18 or more months have passed from the end 18 of a manufacturer sponsored incentive program related to the claim, whichever 18- 19 month period ends later. 20 (b) The time restriction in (a) of this section does not apply if the manufacturer 21 reasonably suspects that fraud is involved in the claim. 22 (c) In this section, "claim" means a claim made by a new motor vehicle dealer 23 for compensation by the manufacturer or distributor for sales incentives, warranty 24 repairs, and service incentives. 25 Article 4. Dealer Practices. 26 Sec. 45.25.400. Prohibited use of advertising terms. (a) A motor vehicle 27 dealer may not use the term "invoice," "factory invoice," "dealer invoice," "dealer 28 cost," "wholesale price," or any other term of similar meaning in an advertisement for 29 the sale of a motor vehicle. 30 (b) A motor vehicle dealer may use the term "manufacturer's suggested retail 31 price," "MSRP," or "list price" in an advertisement for the sale of a motor vehicle,

01 subject to the restriction on price comparisons in AS 45.25.450 and the following: 02 (1) the advertised price must reference the final price listed by the 03 manufacturer on the monroney sticker, including accessories and options physically 04 attached to the vehicle at the time of delivery to the dealer, plus any transportation 05 charges, and minus all manufacturer discounts and savings; 06 (2) the manufacturer's suggested retail price or the list price does not 07 include charges added by the dealer or options added to the vehicle by the dealer; and 08 (3) whenever using the term "manufacturer's suggested retail price," 09 "MSRP," or "list price," the dealer shall provide in the advertisement a clear and 10 conspicuous disclosure that states that a sale may not have occurred at that price. 11 Sec. 45.25.410. Availability of advertised items. A motor vehicle dealer 12 may not advertise vehicles and related goods or services at a specified dealer price 13 with the intent not to supply reasonably expected demand, unless the advertisement 14 discloses the number of vehicles in stock at the advertised price. 15 Sec. 45.25.420. Display of motor vehicles. A motor vehicle dealer shall 16 display all vehicles advertised for sale for the duration of the sale period in a 17 conspicuous and clearly visible location on the dealer's premises. The advertised sale 18 price for each vehicle must be clearly marked on the vehicle so the consumer can 19 readily identify the advertised price for the vehicle. 20 Sec. 45.25.430. Refusal to sell on advertised terms and conditions. A 21 motor vehicle dealer may not refuse to sell a motor vehicle on the terms and 22 conditions that the dealer has advertised. This section does not apply if 23 (1) the dealer can document that the advertised term or condition was 24 the result of an error on the part of the advertising medium or an outside advertising 25 agent; or 26 (2) the refusal is based on an error that was made in good faith by the 27 dealer and was clearly and conspicuously a mistake, and the dealer corrected the error 28 as soon as the dealer knew or reasonably should have known of the error. 29 Sec. 45.25.440. Advertised price. (a) When selling a motor vehicle, a motor 30 vehicle dealer may not charge dealer fees or costs, except for fees actually paid to a 31 state agency for licensing, registration, or title transfers, unless the fees or costs are

01 included in the advertised price. 02 (b) In this section, "dealer fees or costs" includes dealer preparation fees, 03 document preparation fees, surcharges, and other dealer imposed fees and costs. 04 Sec. 45.25.450. Advertised price comparisons, reductions, and discounts. 05 (a) A motor vehicle dealer may not make a price comparison, price reduction, or price 06 discount in an advertisement unless the comparison, reduction, or discount complies 07 with this section. 08 (b) A motor vehicle dealer may advertise a price comparison for a new motor 09 vehicle with the manufacturer's suggested retail price only if 10 (1) the dealer only uses the term "manufacturer's suggested retail 11 price," "MSRP," or "list price"; 12 (2) the advertised price references the final price listed by the 13 manufacturer on the monroney sticker; 14 (3) the manufacturer's suggested retail price, MSRP, or list price does 15 not include charges added by the dealer or options added to the vehicle by the dealer; 16 (4) the dealer clearly discloses that the manufacturer's suggested retail 17 price, MSRP, or list price may not reflect the actual selling price for the vehicle in the 18 dealer's trade area; and 19 (5) the dealer does not make a representation in the advertisement, 20 including a reference to a "sale," "reduction," or "discount," that the comparison 21 represents a saving to the consumer. 22 (c) A motor vehicle dealer may not use a competitor's price as a reference 23 price unless 24 (1) the reference price is the competitor's current, bona fide price in the 25 trade area of the dealer making the comparison; 26 (2) the comparison is to an identical or nearly identical vehicle that 27 does not materially differ in model, style, design, name, brand, kind, or quality from 28 the advertised product; and 29 (3) the dealer includes in the advertised price all charges that the 30 competitor includes in the competitor's price. 31 (d) A motor vehicle dealer shall be in possession of documents and all other

01 information necessary to substantiate all reference price claims when the claims are 02 made and shall maintain this information in a readily accessible place for two years 03 after the time the reference price claims are made. 04 Sec. 45.25.460. Advertising and selling practices generally. (a) In addition 05 to the provisions of AS 45.50.471 and regulations adopted under AS 45.50.471, a 06 motor vehicle dealer may not 07 (1) exclude from an advertisement of a motor vehicle for sale that 08 taxes, if applicable, vehicle registration fees, finance charges, charges for the issuance 09 of any certificate of compliance or noncompliance required by statute, or other fees or 10 charges to be paid to a third party that are not otherwise included in the advertised 11 price will be added to the advertised price at the time of the sale; 12 (2) represent the dealer document preparation fee as a government fee; 13 (3) advertise a specific motor vehicle for sale without identifying the 14 vehicle by either its vehicle identification number, vehicle stocking number, or license 15 number; 16 (4) advertise that free merchandise, gifts, or services will be provided 17 by the dealer if a vehicle is purchased; in this paragraph, "free" includes merchandise 18 or services offered for sale at a price less than the dealer's cost for the merchandise or 19 services; 20 (5) use the term "rebate," "cash back," or a similar term in advertising 21 the sale of a motor vehicle unless the rebate is expressed in a specific dollar amount 22 and is in fact a rebate offered by the vehicle manufacturer or distributor directly to the 23 retail buyer of the vehicle; 24 (6) require a person, in order to receive the advertised credit terms, to 25 pay a higher price for a motor vehicle and any related goods or services than the cash 26 price the same person would have to pay to purchase the same vehicle and related 27 goods or services; 28 (7) advertise a guaranteed trade in allowance or range of allowances 29 unless the guarantee is provided by the manufacturer or distributor; 30 (8) affix to a new motor vehicle a supplemental price sticker 31 containing a price that represents the dealer's asking price, if the supplemental price

01 sticker exceeds the manufacturer's suggested retail price, unless the supplemental 02 sticker 03 (A) clearly and conspicuously, in the largest print appearing on 04 the sticker other than the print size used for the dealer's name, discloses that 05 the supplemental sticker price is the dealer's asking price, or words of similar 06 meaning, and is not the manufacturer's suggested retail price; 07 (B) clearly and conspicuously discloses the manufacturer's 08 suggested retail price; and 09 (C) states, if the supplemental sticker price is greater than the 10 sum of the manufacturer's suggested retail price and the price of the items 11 added by the dealer, the difference and describes it as additional dealer mark- 12 up; 13 (9) advertise or otherwise represent, or knowingly allow to be 14 advertised or represented on behalf of the dealer, that a down payment is not required 15 in connection with the sale of a motor vehicle when a down payment is in fact 16 required; 17 (10) advertise an offer for the sale, lease, or purchase of a motor 18 vehicle that creates the false impression that the vehicle is being offered by a private 19 party or a motor vehicle agent or that does not contain the name of the dealer; 20 (11) use an advertisement for a motor vehicle that contains language 21 that falsely, implicitly, or explicitly suggests that, to take advantage of an offer, a 22 consumer must act within a certain period of time when, in fact, the vehicles will 23 continue to be available at the advertised price beyond that time period; 24 (12) require a buyer of a new motor vehicle, as a condition of sale and 25 delivery, to also purchase special features, appliances, accessories, or equipment not 26 desired or requested by the buyer unless the special features, appliances, equipment, or 27 accessories are already installed on the vehicle when received by the dealer; 28 (13) represent and sell as a new motor vehicle a demonstrator vehicle 29 or a motor vehicle that is a used motor vehicle; in this paragraph, "demonstrator 30 vehicle" 31 (A) means a motor vehicle

01 (i) that has been assigned by a dealer for use by the 02 dealership as an executive vehicle for promotional purposes, including 03 being driven in the community; 04 (ii) that has not been licensed by a retail buyer; and 05 (iii) the title of which has not been transferred to a retail 06 buyer; 07 (B) does not include a motor vehicle that has only been driven 08 to demonstrate the motor vehicle to a prospective buyer; 09 (14) advertise that the dealer finances any person, or does not reject 10 any person's credit, or make similar claims; 11 (15) advertise or make a statement, declaration, or representation in an 12 advertisement that cannot be substantiated in fact; the burden of proof of the factual 13 basis for the statement, declaration, or representation is on the dealer. 14 (b) A motor vehicle dealer shall disclose a beginning and ending date in all 15 motor vehicle sale advertisements. 16 Sec. 45.25.465. Sales of used motor vehicles. (a) Before the sale of a used 17 motor vehicle, a motor vehicle dealer shall, 18 (1) when obtaining a used motor vehicle from an individual consumer, 19 make a reasonable inquiry of the seller into the condition of the vehicle, including the 20 accident and repair history of the vehicle; the information shall be recorded in writing 21 and verified by the seller; the dealer shall provide this information to a prospective 22 purchaser of the vehicle; 23 (2) when a motor vehicle dealer obtains a used motor vehicle from 24 another motor vehicle dealer, a wholesaler, or an auction, disclose to a prospective 25 purchaser of the vehicle that the vehicle was purchased from another dealer, a 26 wholesaler, or an auction. 27 (b) Nothing in this section creates an express warranty by the dealer. 28 Sec. 45.25.470. Sales of vehicles manufactured for sale in a foreign 29 country. Before sale, a motor vehicle dealer shall disclose in writing whether a motor 30 vehicle was originally manufactured for sale in Canada or another foreign country. 31 Sec. 45.25.480. Identification number plates. A motor vehicle dealer may

01 not knowingly purchase or sell a vehicle that has an altered or removed vehicle 02 identification number plate, or alter or remove a vehicle identification number plate. 03 Sec. 45.25.490. Required documentation. A motor vehicle dealer may not 04 sell or offer to sell a motor vehicle unless the motor vehicle dealer holds a 05 manufacturer's statement of origin, a title, or another properly executed document 06 reasonably necessary to obtain the statement of origin or title for transfer of the 07 vehicle to the buyer. 08 Sec. 45.25.500. Trade-ins. A motor vehicle dealer may not transfer title to a 09 trade-in vehicle or perform any repairs or reconditioning on a trade-in vehicle before 10 the completion of the sales transaction for which the vehicle is a trade-in. 11 Sec. 45.25.510. Disclosure of damages. (a) Before entering into a new 12 motor vehicle sales contract, a new motor vehicle dealer shall disclose in writing to a 13 buyer of the new motor vehicle any known damage and repair to the new motor 14 vehicle if the damage exceeds five percent of the manufacturer's suggested retail price 15 as calculated at the dealer's authorized warranty rate for labor and parts. A new motor 16 vehicle dealer is not required to disclose to a buyer that glass, tires, bumpers, or 17 cosmetic parts of a new motor vehicle were damaged at any time if the damaged item 18 has been replaced with original or comparable equipment. A replaced part is not part 19 of the cumulative damage required to be disclosed under this subsection. 20 (b) If disclosure is not required under this section, a buyer may not revoke or 21 rescind a sales contract due to the fact that the new motor vehicle was damaged and 22 repaired before completion of the sale. 23 (c) In this section, 24 (1) "cosmetic parts" means parts that are attached by and can be 25 replaced in total through the use of screws, bolts, or other fasteners without the use of 26 welding or thermal cutting and includes windshields, bumpers, hoods, or trim panels; 27 (2) "manufacturer's suggested retail price" means the retail price of the 28 new motor vehicle suggested by the manufacturer and includes the retail delivered 29 price suggested by the manufacturer for each accessory or item of optional equipment 30 physically attached to the new motor vehicle at the time of delivery to the new motor 31 vehicle dealer that is not included within the retail price suggested by the manufacturer

01 for the new motor vehicle. 02 Sec. 45.25.520. Form of disclosures. Except as provided in 03 AS 45.25.460(a)(8)(A), if a disclosure is required by this chapter with respect to a 04 motor vehicle advertisement, the disclosure must be made in a clear and conspicuous 05 manner. 06 Sec. 45.25.590. Definitions. In AS 45.25.400 - 45.25.590, 07 (1) "advertise," "advertised," "advertising," and "advertisement" 08 include representations, whether made on or off store premises, made to persons in the 09 print media, in the broadcast media, on the computer, in a brochure, in a flyer, by 10 direct mail, by sign, or on a tag; 11 (2) "monroney sticker" means the window sticker required by 15 12 U.S.C. 1231 - 1233 (Automobile Information Disclosure Act); 13 (3) "motor vehicle," notwithstanding the definition of "motor vehicle" 14 in AS 45.25.990, means a vehicle, including a trailer, that is required to be registered 15 under AS 28.10, but does not include a motorcycle; 16 (4) "new motor vehicle," notwithstanding the definition of "new motor 17 vehicle" in AS 45.25.990, means a motor vehicle that has not been titled to anyone and 18 still retains the original manufacturer's certificate of origin. 19 Article 5. Sales and Service Contracts. 20 Sec. 45.25.600. Title transfer. A motor vehicle dealer may not transfer the 21 title for a motor vehicle to a buyer before all of the sale documents, including any 22 finance contract arranged by the seller, are complete and executed in final form by all 23 parties to the sale. 24 Sec. 45.25.610. Sales contracts. (a) A motor vehicle sales contract must be 25 in writing, signed by both the seller and buyer, and completed as to all essential 26 provisions before the signing of the contract by the buyer and before delivery of the 27 vehicle to the buyer. 28 (b) A motor vehicle dealer may not obtain a signed motor vehicle sales 29 contract from the buyer until any financing terms reflected on the motor vehicle 30 installment contract are final and complete. 31 (c) Notwithstanding the requirements of this section, if a motor vehicle dealer

01 arranges financing for a buyer, the motor vehicle dealer may deliver the motor vehicle 02 to the buyer before final approval by the financing entity if 03 (1) the buyer and seller sign an agreement separate from the motor 04 vehicle installment contract on an 8 1/2 x 11 inch sheet of paper that clearly and 05 conspicuously informs the buyer that final financing arrangements have not yet been 06 approved and that clearly sets out the amount that will be financed, the annual 07 percentage rate of the finance charge, the amount of the finance charge, the number 08 and frequency of payments, and the amount of each payment; 09 (2) the separate agreement clearly and conspicuously informs the 10 buyer that accepting delivery of the vehicle before final financing approval obligates 11 the buyer to terms of the motor vehicle sales contract if the terms on the separate 12 agreement are identical to the terms finally approved by the financing entity; and 13 (3) the separate agreement provides that the separate agreement, the 14 motor vehicle sales contract, and any and all other conditions of the purchase will be 15 void if any of the terms contained in the separate agreement are changed by either the 16 motor vehicle dealer or the financing institution as a condition of sale or final 17 financing approval. 18 (d) If a buyer's final financing is not approved within seven business days 19 from the date of the separate agreement and, as a result, the transaction is not 20 completed, the motor vehicle dealer shall return the buyer's entire down payment, and 21 the buyer's trade-in, if any, shall be returned to the buyer in the same condition and 22 with not more than 10 miles accumulated on the odometer from when the motor 23 vehicle was delivered to the motor vehicle dealer. 24 (e) In this section, "sales contract" includes an installment sales contract, a 25 short-term sales contract, and a single-payment contract. 26 Sec. 45.25.620. Service contracts. (a) A motor vehicle service contract must 27 be in writing and contain all essential provisions regarding the administration of the 28 contract. If a motor vehicle dealer presents a service contract to the customer as an 29 "application" for a contract, it must be clearly and conspicuously marked as an 30 application and must disclose the applicable rules for obtaining a final service 31 contract.

01 (b) If a service contract is included in a motor vehicle sale, the seller shall, 02 before delivery of the motor vehicle, give to the buyer a written statement with all 03 pertinent blank spaces filled in that shall be signed by both the buyer and seller and 04 that clearly and conspicuously 05 (1) explains the difference between a service contract and a warranty; 06 (2) discloses the maker of or obligor on the service contract; 07 (3) describes the relationship between the maker and the seller of the 08 service contract; 09 (4) for a vehicle that is a used vehicle, notifies the buyer that the seller 10 may not disclaim implied warranties if the seller is the maker or obligor of the service 11 contract; and 12 (5) includes all other disclosures required by law. 13 (c) A motor vehicle dealer may not disclaim or limit implied warranties for a 14 motor vehicle for which the motor vehicle dealer is a maker of a service contract sold 15 for that motor vehicle. However, a motor vehicle dealer may disclaim or limit implied 16 warranties as otherwise allowed by law, regardless of the make or model of the motor 17 vehicle if the motor vehicle dealer is merely the seller, not the maker, of the service 18 contract and does not otherwise extend any written warranties on the motor vehicle 19 that is purchased. 20 (d) In this section, "maker" means the person that makes, frames, and executes 21 a service contract and assumes any obligation due to the buyer, but does not include a 22 motor vehicle dealer who merely sells the service contract as the agent of a service 23 contract company doing business in this state. 24 Article 6. General Provisions. 25 Sec. 45.25.900. Applicability. If a provision of this chapter conflicts with 26 another provision of this title, this chapter controls. 27 Sec. 45.25.910. Remedial purpose. The provisions of this chapter are 28 remedial. 29 Sec. 45.25.990. Definitions. In this chapter, 30 (1) "dealer" means a new motor vehicle dealer or used motor vehicle 31 dealer;

01 (2) "dealership" means the business entity that is operated by a motor 02 vehicle dealer; 03 (3) "distributor" means a person or entity who sells or distributes new 04 or used motor vehicles to motor vehicle dealers or who maintains or sends distributor 05 representatives within or to this state to sell or distribute new or used motor vehicles to 06 motor vehicle dealers in this state; in this paragraph, "distributor representative" 07 means a representative employed by a distributor branch, distributor, or wholesaler 08 who sells or distributes new or used motor vehicles to franchised motor vehicle dealers 09 in this state; 10 (4) "distributor branch" means a branch office maintained by a 11 distributor or wholesaler who sells or distributes new or used motor vehicles to 12 franchised motor vehicle dealers in this state; 13 (5) "franchise" means a written arrangement for a definite or indefinite 14 period in which a manufacturer, distributor, or motor vehicle wholesaler grants to a 15 motor vehicle dealer a license, sales and service agreement, or contract of any kind to 16 use a trade name, service mark, or related characteristic, and in which there is a 17 community of interest in the wholesale or retail marketing of related motor vehicles or 18 services; 19 (6) "franchised" means having a franchise; 20 (7) "fraud" includes a promise or representation not made honestly or 21 in good faith, and an intentional failure to disclose a material fact; 22 (8) "good faith" means honesty in fact and the observation of 23 reasonable commercial standards of fair dealing in the trade; 24 (9) "lease," except in AS 45.25.150, means a contract by which a 25 person owning a motor vehicle grants to another person the right to possess, use, and 26 enjoy the motor vehicle for a specified period of time in exchange for periodic 27 payment of a stipulated price, and in which the use of the vehicle is granted for a 28 period of 12 or more months; 29 (10) "manufacturer" means a person or the person's subsidiary who 30 manufacturers, imports, distributes, or assembles new motor vehicles and includes an 31 administrator, a distributor, a distributor branch, and a factory branch; in this

01 paragraph, "factory branch" means a branch office maintained by a manufacturer for 02 directing and supervising the representatives of the manufacturer; 03 (11) "manufacturer representative" means any employee or agent of a 04 manufacturer who engages in the business of contacting a manufacturer's respective 05 franchised dealers for the purpose of making or promoting the sale of the 06 manufacturer's vehicles, parts, accessories, or services; 07 (12) "motor vehicle" means a motor vehicle that is required to be 08 registered under AS 28.10, but does not include a motor home, a recreational vehicle, 09 or a motorcycle; 10 (13) "motor vehicle dealer" has the meaning given in AS 08.66.350, 11 except that, in this paragraph, notwithstanding the definition of "motor vehicle" given 12 in AS 08.66.350, "motor vehicle" has the meaning given in this section; 13 (14) "motor vehicle salesperson" means a person who is employed by 14 a motor vehicle dealer as a salesperson or sales representative to solicit, sell, lease, or 15 exchange motor vehicles under the direction of a motor vehicle dealer; 16 (15) "new motor vehicle" means a motor vehicle that has not been 17 previously sold to and registered to a person except a distributor, wholesaler, or motor 18 vehicle dealer for resale; 19 (16) "new motor vehicle dealer" means a motor vehicle dealer for new 20 motor vehicles or for new and used motor vehicles; 21 (17) "sale" means the issuance, transfer, agreement for transfer, 22 exchange, gift, pledge, hypothecation, or mortgage in any form, whether by transfer in 23 trust or otherwise, of a motor vehicle, an interest in a motor vehicle, or a related 24 franchise; 25 (18) "service contract" means an optional agreement that is separate 26 from a contract for the sale of a motor vehicle, and that covers certain repair or 27 maintenance functions beyond coverage provided by a warranty; 28 (19) "terminate" includes nonrenewal or cancellation; 29 (20) "used motor vehicle" means a motor vehicle that has been 30 previously sold to and registered to a person other than a distributor, wholesaler, or 31 motor vehicle dealer;

01 (21) "used motor vehicle dealer" means a motor vehicle dealer for used 02 motor vehicles. 03 * Sec. 10. AS 45.50.471(b)(33) is amended to read: 04 (33) violating AS 08.66 [AS 08.66.010 - 08.66.090] (motor vehicle 05 dealers); 06 * Sec. 11. AS 45.50.471(b) is amended by adding a new paragraph to read: 07 (43) violating AS 45.25.400 - 45.25.590 (motor vehicle dealer 08 practices). 09 * Sec. 12. AS 45.50.572 is amended by adding a new subsection to read: 10 (k) AS 45.50.562 - 45.50.596 do not apply to action taken by a person to 11 comply with AS 45.25 or to action refrained from by a person in order to comply with 12 AS 45.25 (motor vehicle transactions). 13 * Sec. 13. AS 08.66.090, 08.66.200, 08.66.210, 08.66.220, 08.66.230, 08.66.240, 14 08.66.250, and 08.66.330 are repealed. 15 * Sec. 14. The uncodified law of the State of Alaska is amended by adding a new section to 16 read: 17 INDIRECT COURT RULE AMENDMENT. AS 45.25.020(b), enacted by sec. 9 of 18 this Act, amends Rule 3, Alaska Rules of Civil Procedure, by establishing a different rule for 19 determining where a legal dispute described in AS 45.25.020(a), enacted by sec. 9 of this Act, 20 may be brought. 21 * Sec. 15. The uncodified law of the State of Alaska is amended by adding a new section to 22 read: 23 APPLICABILITY. Sections 9, 11, and 12 of this Act apply to a franchise, as that term 24 is defined in AS 45.25.990, added by sec. 9 of this Act that is entered into on or after the 25 effective date of this Act. 26 * Sec. 16. The uncodified law of the State of Alaska is amended by adding a new section to 27 read: 28 CONDITIONAL EFFECT. AS 45.25.020(b), enacted by sec. 9 of this Act, takes 29 effect only if sec. 14 of this Act receives the two-thirds majority vote of each house required 30 by art. IV, sec. 15, Constitution of the State of Alaska. 31 * Sec. 17. This Act takes effect July 1, 2002.