HB 256: "An Act relating to distributorships."

00 HOUSE BILL NO. 256 01 "An Act relating to distributorships." 02 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 03 * Section 1. AS 45.45 is amended by adding new sections to read: 04 Article 9A. Distributorships. 05 Sec. 45.45.700. Coercion of dealer. (a) A distributor may not coerce or 06 attempt to coerce a dealer to perform certain acts by using duress or by threatening to 07 terminate the distributorship agreement or another agreement between the distributor 08 and the dealer. 09 (b) In this section, "certain acts" means 10 (1) the purchase or acceptance of delivery of merchandise that has not 11 been ordered by the dealer; 12 (2) the assignment, sale, or disposal of a contract or property; or 13 (3) the expenditure of money. 14 Sec. 45.45.710. Disposition of merchandise remaining upon contract 15 termination. (a) If a dealer maintains a stock of merchandise supplied for the

01 dealer's resale under a distributorship agreement and if the distributor or the dealer 02 terminates the distributorship agreement, the distributor shall, unless the dealer 03 chooses to keep the merchandise, pay the dealer for the merchandise that was 04 purchased from the distributor and that is held by the dealer on the date of the 05 termination an amount equal to 06 (1) 100 percent of the net cost of the merchandise, except repair parts, 07 that is current and unused and for which the retailer has paid the distributor, plus 100 08 percent of the transportation charges paid by the dealer to return the merchandise to 09 the distributor; 10 (2) 85 percent of the current net price, as listed in the current price list 11 or catalog of the distributor, for repair parts, including superseded parts; and 12 (3) five percent of the current net price of repair parts to cover the 13 handling, packing, and transportation of the repair parts back to the distributor. 14 (b) Upon payment of the amounts required by (a) of this section, the title to 15 the merchandise passes to the distributor making the payment, and the distributor is 16 entitled to the possession of the merchandise for which the payment was made. 17 (c) In (a)(2) or (3) of this section, if a repair part is not listed in a current price 18 list or catalog of the distributor, the current net price is the higher of the original 19 purchase price or the latest price published by the distributor for the repair part if a 20 dealer has actual proof of the purchase of the repair part from the distributor and if the 21 repair part was purchased within 10 years before the termination. 22 Sec. 45.45.720. Time for payment. A distributor shall make the payments to 23 the dealer under AS 45.45.710 not later than three months after the date the agreement 24 is terminated. When the payment is made, the distributor shall provide the dealer with 25 a final detailed statement of account for the merchandise. 26 Sec. 45.45.730. Death of distributor. Unless the distributorship agreement is 27 continued by the personal representative, heirs, or devisees of the individual, upon the 28 death of an individual who is a dealer or holds a majority interest in a dealer, a 29 distributor who supplied merchandise to the dealer shall repurchase from the personal 30 representative, heirs, or devisees the merchandise that was purchased from the 31 distributor and that remains when the distributorship agreement is terminated under

01 this section. To repurchase under this section, the distributor shall pay an amount 02 equal to the amount identified under AS 45.45.710(a) and (c), and the repurchase is 03 subject to AS 45.45.720. In this section, "devisee," "heir," and "personal 04 representative" have the meanings given in AS 13.06.050. 05 Sec. 45.45.740. Required purchase, reimbursement, and supplies. (a) In 06 addition to any purchase of merchandise required by AS 45.45.710, if a distributor 07 terminates a distributorship agreement or changes the competitive situation of the 08 distributor's dealer with regard to distribution of the merchandise or services that are 09 the subject of the distribution agreement, the distributor shall 10 (1) purchase that portion of the dealer's business covered by the 11 distributorship agreement or affected by the change, including good will, assets, and 12 machinery, at commercially reasonable business valuations; and 13 (2) reimburse the dealer for the expenses that were incurred by the 14 dealer 15 (A) for that portion of the dealer's business covered by the 16 distributorship agreement; and 17 (B) during the 18 months before the termination or change. 18 (b) In this section, "change" does not include making a price change that 19 affects similarly situated dealers equally. 20 Sec. 45.45.750. Prohibited terms. (a) A distributor may not require a dealer 21 to agree to any of the following terms in a distributorship agreement, or in another 22 agreement that is ancillary to a distributorship agreement, as a condition of an offer, 23 grant, or renewal of a distributorship agreement or ancillary agreement: 24 (1) a requirement that the distributor waive a trial by jury in court 25 cases involving the distributor; 26 (2) a requirement that disputes between the distributor and the dealer 27 be submitted to arbitration or to any other binding alternate dispute resolution 28 procedure, except authorization for the submission of a dispute to arbitration or to 29 binding alternative dispute resolution if the distributor and dealer voluntarily agree to 30 submit the dispute to arbitration or binding alternative dispute resolution when the 31 dispute arises;

01 (3) a requirement that the dealer pay the attorney fees of the 02 distributor; or 03 (4) a requirement that the agreement be subject to the laws of a state 04 other than Alaska. 05 (b) The provisions of (a) of this section do not apply to an agreement where a 06 lease or sale of real property is the main purpose of the agreement. 07 Sec. 45.45.760. Civil action. (a) A dealer may bring an action in court 08 against a distributor if the distributor engages in activity prohibited under this chapter. 09 (b) In an action brought under (a) of this section, the dealer may obtain one or 10 more of the following types of relief that apply to the specific action of the dealer: 11 (1) damages suffered by the dealer as a result of the activity; 12 (2) an injunction enjoining the distributor from engaging in the 13 activity; 14 (3) a requirement that the distributor make a payment or a purchase 15 required by this chapter; 16 (4) any other relief determined by the court to be appropriate under the 17 circumstances. 18 (c) In this section, "activity prohibited under this chapter" means 19 (1) coercion or attempted coercion under AS 45.45.700; 20 (2) terminating a distributorship agreement without paying the dealer 21 as required by AS 45.45.710; 22 (3) failing to pay the dealer within the time established by 23 AS 45.45.720; 24 (4) failing to provide the statement of account as required by 25 AS 45.45.720; 26 (5) failing to make a repurchase payment required by AS 45.45.730; 27 (6) failing to repurchase merchandise as required by 28 AS 45.45.740(a)(1); 29 (7) failing to make the reimbursement required by AS 45.45.740(a)(2); 30 or 31 (8) violating AS 45.45.750.

01 Sec. 45.45.770. Exemption. AS 45.45.700 - 45.45.790 do not apply to 02 (1) a distributorship agreement that would be considered a franchise 03 regulated by 15 U.S.C. 2801 - 2841 (Petroleum Marketing Practices Act); 04 (2) a situation regulated by AS 45.50.800 - 45.50.850; or 05 (3) a distributorship agreement for the sale, repair, or servicing of 06 motor vehicles that are required to be registered under AS 28.10. 07 Sec. 45.45.790. Definitions. In AS 45.45.700 - 45.45.790, 08 (1) "dealer" means a person who enters into a distributorship 09 agreement and who, under the agreement, receives merchandise or services from a 10 distributor; 11 (2) "distributor" means a person who enters into a distributorship 12 agreement and who, under the agreement, provides merchandise or services to a 13 dealer; the term includes 14 (A) a wholesaler; 15 (B) a manufacturer; 16 (C) a person that is a parent corporation or an affiliated 17 corporation of a person identified in (A) or (B) of this paragraph; and 18 (D) a field representative, an officer, an agent, or another direct 19 or indirect representative of a person identified in (A), (B), or (C) of this 20 paragraph; 21 (3) "distributorship agreement" means an agreement, whether express, 22 implied, oral, or written, between two or more persons 23 (A) by which a person receives the right to 24 (i) sell or lease merchandise or services at retail or 25 wholesale; or 26 (ii) use a trade name, trademark, service mark, 27 logotype, advertising, or other commercial symbol; and 28 (B) in which the parties to the agreement have a joint interest, 29 whether equal or unequal, in the offering, selling, or leasing of the merchandise 30 or services; 31 (4) "merchandise" includes parts and accessories;

01 (5) "terminate" includes failing to renew. 02 * Sec. 2. The uncodified law of the State of Alaska is amended by adding a new section to 03 read: 04 APPLICABILITY. This Act applies to a distributorship agreement that is entered into 05 on or after the effective date of this Act.