HB 318: "An Act relating to motor vehicle franchises, motor vehicle transactions, motor vehicle dealers, motor vehicle manufacturers, and motor vehicle distributors."
00 HOUSE BILL NO. 318 01 "An Act relating to motor vehicle franchises, motor vehicle transactions, motor vehicle 02 dealers, motor vehicle manufacturers, and motor vehicle distributors." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04 * Section 1. AS 45.25.010 is repealed and reenacted to read: 05 Sec. 45.25.010. Applicability. The provisions of AS 45.25.020 - 45.25.340 06 apply to franchise agreements that are entered into, renewed, or amended by a 07 manufacturer and a new motor vehicle dealer before, on, or after the effective date of 08 this Act. 09 * Sec. 2. AS 45.25.020(b) is amended to read: 10 (b) Except as provided in AS 45.25.185(b), venue [VENUE] for a dispute 11 under (a) of this section is in the judicial district of this state where the new motor 12 vehicle dealer's principal place of business is located. 13 * Sec. 3. AS 45.25.110(a) is amended to read: 14 (a) A manufacturer may not terminate a franchise agreement with a new
01 motor vehicle dealer unless 02 (1) the manufacturer has 03 (A) complied with [SATISFIED] the notice requirements of 04 this chapter; 05 (B) shown that there is good cause under AS 45.25.115 for the 06 termination of the franchise agreement; [,] and 07 (C) acted in good faith [, IF THE REASONS UNDERLYING 08 THE GOOD CAUSE CAN BE CORRECTED BY THE NEW MOTOR 09 VEHICLE DEALER, THE NEW MOTOR VEHICLE DEALER HAS 10 FAILED FOR 60 DAYS AFTER DELIVERY OF THE NOTICE REQUIRED 11 BY AS 45.25.120 TO MAKE THE CORRECTIONS; THE 12 CIRCUMSTANCES IDENTIFIED UNDER AS 45.25.120(a)(2) FOR WHICH 13 A 15-DAY NOTICE OF TERMINATION IS REQUIRED DO NOT 14 QUALIFY AS REASONS FOR WHICH CORRECTION IS ALLOWED 15 UNDER THIS PARAGRAPH]; or 16 (2) the new motor vehicle dealer has systematically engaged in fraud 17 against consumers or the manufacturer or in the operation of the new motor vehicle 18 dealership. 19 * Sec. 4. AS 45.25 is amended by adding a new section to read: 20 Sec. 45.25.115. Good cause; burden of proof. (a) Notwithstanding the terms 21 of a franchise agreement or a waiver, and except as otherwise provided in (b) - (e) of 22 this section, good cause exists for termination of a franchise agreement if 23 (1) a new motor vehicle dealer fails to comply with a franchise 24 agreement provision that is reasonable and materially significant to the franchise 25 agreement; and 26 (2) the manufacturer notifies the new motor vehicle dealer of the 27 failure under (1) of this subsection within 180 days after the manufacturer first 28 acquires knowledge of the failure and the new motor vehicle dealer does not correct 29 the failure in a reasonable time after receiving the notice. 30 (b) If the failure of the new motor vehicle dealer under (a) of this section 31 relates to the performance of the new motor vehicle dealer in sales, service, or level of
01 customer satisfaction, the failure does not amount to good cause under AS 45.25.110, 02 unless 03 (1) the manufacturer determined the failure based on methodology 04 supporting reasonable performance standards that the manufacturer 05 (A) determined in accordance with criteria that the 06 manufacturer established for a dealership located in this state and that the 07 manufacturer applied uniformly; and 08 (B) fully disclosed to the new motor vehicle dealer; 09 (2) the manufacturer notified the new motor vehicle dealer in writing 10 of the failure of the new motor vehicle dealer in sales, service, or level of customer 11 satisfaction; 12 (3) after providing the notice under (2) of this subsection, the 13 manufacturer provided the new motor vehicle dealer with 14 (A) specific reasonable performance standards or goals with 15 which the dealer must comply and that took into account the specific 16 challenges arising from location and environmental conditions for a new 17 vehicle dealer in the state; and 18 (B) a suggested timetable or program during a period of not 19 less than 180 days for reaching the standards or goals under (A) of this 20 paragraph; and 21 (4) the new motor vehicle dealer did not substantially comply with the 22 performance standards or goals under (3)(A) of this subsection during the period 23 provided under (3)(B) of this subsection, and the failure substantially to comply was 24 not because of market, economic, or other factors that exist within the new motor 25 vehicle dealer's relevant market area and that are beyond the control of the dealer. 26 (c) Notwithstanding (a) and (b) of this section, if a new motor vehicle dealer 27 claims that the manufacturer has not provided the new motor vehicle dealer with an 28 adequate supply of new motor vehicles, the manufacturer does not have good cause to 29 terminate the franchise agreement under AS 45.25.110, unless 30 (1) the manufacturer provided an adequate supply of new motor 31 vehicles in the new motor vehicle dealer's primary allocation of new motor vehicles,
01 both in quantity and product mix, for the new motor vehicle dealer's assigned market 02 area, and the manufacturer delivered the supply in a manner that allowed the dealer 03 reasonably to meet the manufacturer's performance standards or goals; and 04 (2) the new motor vehicle dealer requests the documentation and the 05 manufacturer provides the new motor vehicle dealer with documentation that is 06 sufficient for the new motor vehicle dealer to develop a market analysis; the 07 documentation must include the allocation of new motor vehicles to the new motor 08 vehicle dealer and other new motor vehicle dealers in the same zone during the period 09 established by the manufacturer; the new motor vehicle dealer may not share the 10 market analysis with a person that is not involved in preparing the market analysis or 11 terminating the franchise agreement. 12 (d) Notwithstanding the other provisions of this section, there is good cause to 13 terminate a franchise agreement under AS 45.25.110 if 14 (1) the new motor vehicle dealer is insolvent or is the subject of a 15 bankruptcy or receivership proceeding; 16 (2) the new motor vehicle dealer has failed to conduct its customary 17 sales and service operations during its customary business hours for seven consecutive 18 business days; this paragraph does not apply to a closure because of an act or 19 circumstance beyond the direct control of the new motor vehicle dealer; 20 (3) the new motor vehicle dealer or a principal operator of the 21 dealership is convicted of a felony; or 22 (4) the new motor vehicle dealer has had a license revoked or 23 suspended for more than 30 days, if the new motor vehicle dealer is required to have 24 the license to operate the new motor vehicle dealership. 25 (e) The events described in AS 45.25.300(12) do not constitute good cause for 26 termination. 27 * Sec. 5. AS 45.25.120(a) is amended to read: 28 (a) Before termination of a franchise agreement, a [A] manufacturer shall 29 give [FURNISH] a notice of termination of the [A] franchise agreement to a new 30 motor vehicle dealer at least 31 (1) 90 days before the effective date of a termination, except as
01 required under (2) or (3) of this subsection; 02 (2) 15 days before the effective date of a termination when the [NEW 03 MOTOR VEHICLE DEALER] 04 (A) new motor vehicle dealer is insolvent or is the subject of a 05 bankruptcy or receivership proceeding; 06 (B) new motor vehicle dealer has failed to conduct its 07 customary sales and service operations during its customary business hours for 08 seven consecutive business days; this subparagraph does not apply to closures 09 due to acts of God or circumstances beyond the direct control of the new motor 10 vehicle dealer; or 11 (C) new motor vehicle dealer or a principal operator of the 12 dealership is convicted of a felony [INVOLVING MORAL TURPITUDE OR 13 FRAUD UNDER THE LAW OF THIS STATE, ANOTHER STATE, THE 14 FEDERAL GOVERNMENT, A TERRITORY OF THE UNITED STATES, 15 OR THE DISTRICT OF COLUMBIA]; or 16 (D) new motor vehicle dealer has had a license revoked or 17 suspended for more than 30 days, if the new motor vehicle dealer is 18 required to have the license to operate the new motor vehicle dealership; 19 or 20 (3) 180 days before the effective date of the termination if the 21 manufacturer or distributor is discontinuing the sale and distribution of the product 22 line on a nationwide basis. 23 * Sec. 6. AS 45.25 is amended by adding a new section to read: 24 Sec. 45.25.135. Termination by dealer. Notwithstanding the terms of a 25 franchise agreement, a new motor vehicle dealer may terminate a franchise agreement 26 by giving written notice of the termination to the manufacturer at least 90 days before 27 the effective date of the termination. 28 * Sec. 7. AS 45.25.140 is repealed and reenacted to read: 29 Sec. 45.25.140. Payment for inventory, equipment, and other items. (a) 30 Upon the termination of a new motor vehicle dealer's franchise agreement, the 31 manufacturer or distributor shall pay the new motor vehicle dealer, at a minimum,
01 (1) if the new motor vehicles have not been materially altered or 02 materially damaged and if the new motor vehicles are current models the dealer 03 acquired from the manufacturer within the past two model years before receipt of the 04 notice of termination, the new motor vehicle dealer's cost of the unsold new motor 05 vehicles, plus any charges by the manufacturer for distribution, delivery, and taxes, 06 and less 07 (A) all allowances paid or credited to the new motor vehicle 08 dealer by the manufacturer; 09 (B) repairable damage, except that the manufacturer is not 10 required to repurchase a damaged motor vehicle if the cost of repairing the 11 damage exceeds five percent of the manufacturer's suggested retail price of the 12 motor vehicle as calculated at the dealer's authorized warranty rate for labor 13 and parts; and 14 (C) a mileage charge of 20 cents a mile for all mileage over 15 200 miles on demonstrator vehicles; 16 (2) the new motor vehicle dealer's cost, including any charges by the 17 manufacturer for distribution, delivery, and taxes, less all allowances that the 18 manufacturer paid or credited to the new motor vehicle dealer, of new motor vehicles 19 required by the manufacturer to be used for loaner, demonstrator, or display purposes; 20 (3) the new motor vehicle dealer's cost for all unused, undamaged, and 21 unsold supplies, parts, and accessories in the original unbroken packaging if 22 (A) the supply, part, or accessory is listed in the current price 23 catalog; and 24 (B) the new motor vehicle dealer acquired the supply, part, or 25 accessory from the manufacturer or distributor, or the manufacturer required 26 the new motor vehicle dealer to purchase the supply, part, or accessory; 27 (4) the fair market value, less reasonable wear and tear, of each 28 undamaged sign that is owned by the new motor vehicle dealer and that bears a 29 common name, trade name, or trademark of the manufacturer, if the manufacturer 30 recommended or required the new motor vehicle dealer to acquire the sign and the 31 sign is in good and usable condition;
01 (5) the fair market value of all equipment, furnishings, and special 02 tools that the new motor vehicle dealer owns or leases, that the new motor vehicle 03 dealer acquired from the manufacturer or from sources approved by the manufacturer, 04 that the manufacturer recommended or required the new motor vehicle dealer to 05 purchase, and that are in good and usable condition, less reasonable wear and tear; 06 however, if the new motor vehicle dealer leases the equipment, furnishings, or tools, 07 the manufacturer shall pay the new motor vehicle dealer the amount of money that is 08 required for the new motor vehicle dealer to terminate the lease under the lease 09 agreement; 10 (6) the fair market value of all computers, printers, and software that 11 the manufacturer required or that were reasonably necessary for the new motor vehicle 12 dealer to operate the dealership according to the standards of the manufacturer, except, 13 if the new motor vehicle dealer leases the computers, printers, or software, the 14 manufacturer shall pay the new motor vehicle dealer the amount of money that is 15 required for the new motor vehicle dealer to terminate the lease under the lease 16 agreement; and 17 (7) the cost to the new motor vehicle dealer to transport, handle, pack, 18 and load the new motor vehicles, supplies, parts, accessories, signs, equipment, 19 furnishings, and special tools described in this subsection. 20 (b) To the extent the franchise agreement requires the manufacturer to pay or 21 reimburse the new motor vehicle dealer more than the amounts required under (a) of 22 this section, the provisions of the franchise agreement control. 23 (c) Within 90 days after the effective date of the termination, the new motor 24 vehicle dealer shall return the property required to be repurchased under (a) of this 25 section to the manufacturer or distributor at the expense of the manufacturer or 26 distributor. 27 (d) The manufacturer or distributor shall pay the compensation required under 28 (a) of this section within 30 days after the new motor vehicle dealer tenders the 29 property described in (a) of this section to the manufacturer or distributor if the new 30 motor vehicle dealer has clear title to the property and is in a position to convey that 31 title to the manufacturer or distributor. If the property is subject to a security interest,
01 the manufacturer or distributor may jointly pay the new motor vehicle dealer and the 02 holder of the security interest, and the manufacturer or distributor may offset those 03 payments. 04 * Sec. 8. AS 45.25.150 is repealed and reenacted to read: 05 Sec. 45.25.150. Payments for dealership facilities and business. (a) In 06 addition to the payment required under AS 45.25.140 and (c) of this section, upon 07 termination of a franchise agreement under this chapter, the manufacturer shall, at the 08 request and option of the new motor vehicle dealer, pay the new motor vehicle dealer 09 (1) the dealer's cost for a relocation, substantial alteration, or 10 remodeling of a dealer's facilities that the manufacturer required for the continuation 11 or renewal of the franchise agreement and that was completed within three years 12 before the termination; 13 (2) if the new motor vehicle dealer is leasing the new motor vehicle 14 dealership facilities from a lessor other than the manufacturer or distributor, an amount 15 of money that is equal to the rent for the longer of 16 (A) the unexpired term of a lease or 24 months, whichever 17 period is shorter; or 18 (B) the time provided by the franchise agreement; or 19 (3) if the new motor vehicle dealer owns the dealership facilities, a 20 sum of money that is equivalent to the reasonable rental value of the dealership 21 facilities for 24 months or until the facilities are leased or sold, whichever period is 22 shorter. 23 (b) The payments under (a) of this section are only required to the extent that 24 the new motor vehicle dealer used the facilities for activities under the franchise 25 agreement and only to the extent that the new motor vehicle dealer did not lease the 26 facilities for unrelated purposes. 27 (c) If a manufacturer discontinues the sale and distribution of a new motor 28 vehicle line on a nationwide basis, the manufacturer shall pay the new motor vehicle 29 dealer the fair market value of the franchise as if the dealership were a continuing 30 business. 31 (d) If a manufacturer makes a payment under (a) of this section, the
01 manufacturer is entitled to possess and use the new motor vehicle dealership facility 02 during the period for which the payment is made. 03 * Sec. 9. AS 45.25 is amended by adding a new section to read: 04 Sec. 45.25.155. Application of payment provisions. The provisions of 05 AS 45.25.140 and 45.25.150 do not apply when a manufacturer terminates a franchise 06 agreement because 07 (1) the new motor vehicle dealer is insolvent or is the subject of a 08 bankruptcy or receivership proceeding; 09 (2) the new motor vehicle dealer has failed to conduct its customary 10 sales and service operations during its customary business hours for seven consecutive 11 business days; this paragraph does not apply to closures due to acts or circumstances 12 beyond the direct control of the new motor vehicle dealer; 13 (3) the new motor vehicle dealer or a principal operator of the 14 dealership is convicted of a felony; 15 (4) the new motor vehicle dealer has had a license revoked or 16 suspended for more than 30 days, if the new motor vehicle dealer is required to have 17 the license to operate the new motor vehicle dealership; 18 (5) the new motor vehicle dealer has made a fraudulent 19 misrepresentation to the manufacturer or distributor that is material to the franchise 20 agreement; or 21 (6) the new motor vehicle dealer voluntarily enters into an agreement 22 to sell the stock or other assets of the new motor vehicle dealer to another person, and 23 the manufacturer approves the agreement. 24 * Sec. 10. AS 45.25.160 is repealed and reenacted to read: 25 Sec. 45.25.160. Sale, transfer, or exchange of a franchise. (a) 26 Notwithstanding the terms of a franchise agreement, a manufacturer may not withhold 27 consent to the sale, transfer, or exchange of a franchise to a qualified buyer if the 28 qualified buyer 29 (1) meets the normal, reasonable, and uniformly applied standards 30 established by the manufacturer for a person to whom the manufacturer may grant an 31 application to be a new motor vehicle dealer;
01 (2) does not already hold a franchise from the manufacturer; and 02 (3) is capable of being licensed as a new motor vehicle dealer in the 03 state. 04 (b) If requested by a manufacturer, the applicant for a franchise shall 05 (1) promptly provide the personal and financial information that is 06 reasonably necessary to determine whether the sale, transfer, or exchange should be 07 approved; and 08 (2) agree to be bound by all reasonable terms and conditions of the 09 franchise. 10 (c) If a manufacturer refuses to approve the sale, transfer, or exchange of a 11 franchise, the manufacturer shall serve written notice on the applicant and on the 12 transferring, selling, or exchanging new motor vehicle dealer of its refusal to approve 13 the transfer of the franchise not later than 60 days after the date the manufacturer 14 receives the written request from the new motor vehicle dealer. If the manufacturer 15 has requested personal or financial information from the applicant under (b)(1) of this 16 section, the manufacturer shall serve the notice not later than 60 days after the receipt 17 of the information. Service of a notice under this section shall be made by personal 18 service or certified mail, return receipt requested. 19 (d) A manufacturer's failure to respond in writing to a request for consent to a 20 sale, transfer, or exchange under (a) of this section within 60 days after receipt of a 21 written request on the forms, if any, generally used by the manufacturer containing the 22 information and reasonable promises required by a manufacturer is considered to be 23 the manufacturer's consent to the request. 24 (e) The notice under (c) of this section must state the specific grounds for the 25 refusal to approve the sale, transfer, or exchange of the franchise. 26 * Sec. 11. AS 45.25 is amended by adding a new section to read: 27 Sec. 45.25.165. Mitigation of damages. The provisions of AS 45.25.110 - 28 45.25.160 do not relieve a new motor vehicle dealer of the obligation to mitigate the 29 new motor vehicle dealer's damages upon termination. 30 * Sec. 12. AS 45.25.170 is repealed and reenacted to read: 31 Sec. 45.25.170. Succession. (a) Notwithstanding the terms of a franchise
01 agreement, an owner of a new motor vehicle dealer franchise 02 (1) may appoint a designated successor to succeed to the ownership of 03 the new motor vehicle dealer franchise upon the owner's death or incapacity; or 04 (2) if the owner has owned the franchise for at least five consecutive 05 years, may appoint a person to succeed to the ownership of the new motor vehicle 06 dealer franchise at the current date, a specific future date, or an undetermined future 07 date of the owner's choosing that is before the new motor vehicle dealer's death or 08 incapacity. 09 (b) Notwithstanding the terms of a franchise agreement, a designated 10 successor described under (a) of this section may succeed to the ownership interest of 11 the dealer under the existing franchise if 12 (1) the person is qualified and experienced in the business of being a 13 new motor vehicle dealer and meets the normal, reasonable, and uniformly applied 14 standards of a manufacturer to grant an application to a person for a franchise from the 15 manufacturer or, in the case of a designated successor who is not experienced in the 16 business of being a new motor vehicle dealer, the person will employ an individual 17 who is qualified and experienced in the business of being a new motor vehicle dealer 18 to help manage the day-to-day operations of the new motor vehicle dealership; 19 (2) the designated successor gives written notice to the manufacturer of 20 the intention of the designated successor to succeed to the ownership of the new motor 21 vehicle dealer franchise within 60 days after the former owner's death or incapacity or, 22 if the appointment is under (a)(2) of this section, at least 30 days before the designated 23 successor's proposed succession; and 24 (3) the designated successor agrees to be bound by all terms and 25 conditions of the existing franchise that are in compliance with the law of the state. 26 (c) The manufacturer may request, and the designated successor shall 27 promptly provide, the personal and financial information that is reasonably necessary 28 for the manufacturer to determine whether to accept the designated successor. 29 (d) A manufacturer may refuse to honor the succession to the ownership of a 30 new motor vehicle dealer franchise agreement by a designated successor if the 31 manufacturer establishes that good cause exists for its refusal and if the manufacturer
01 gives written notice to the designated successor and the new motor vehicle dealer of 02 its refusal to accept the designated successor not earlier than 60 days after the date the 03 manufacturer receives the notice from the new motor vehicle dealer. However, if the 04 manufacturer has requested personal or financial information from the applicant under 05 (c) of this section, the manufacturer shall give the notice not later than 30 days after 06 the manufacturer's receipt of the requested personal or financial information. 07 (e) The notice under (d) of this section must state the specific grounds for the 08 refusal to honor the succession. If the manufacturer does not serve the notice of refusal 09 in a timely and proper manner, the designated successor shall be considered approved 10 and continue to be an approved designated successor to the franchise agreement in full 11 force and effect, subject to termination only as otherwise provided under this chapter. 12 (f) A manufacturer has the burden of proof to show that good cause exists for 13 the refusal to honor a succession. 14 (g) This section does not prevent the owner of a new motor vehicle dealer 15 from filing with the manufacturer a written, notarized notice designating a person as 16 the successor. If the notice under this subsection has not been revoked by written 17 notice from the owner to the manufacturer and conflicts with the provisions of this 18 section, the notice given under this subsection governs. 19 (h) If an owner enters into an agreement to sell the franchise to a person who 20 is related to the owner in the first or second degree or is the husband or wife of a 21 person who is related to the owner in the first or second degree, the manufacturer may 22 not exercise a right of first refusal contained in the manufacturer's franchise agreement 23 with the owner. 24 (i) A manufacturer may not require changes in the capitalization or facilities of 25 a franchise as a condition of approving a designated family member successor or a 26 current qualified employee successor, including a general manager of the franchise, to 27 have full managerial authority for the operating management of the franchise. 28 * Sec. 13. AS 45.25.180 is repealed and reenacted to read: 29 Sec. 45.25.180. New or relocated dealership. (a) Before a manufacturer 30 enters into a franchise establishing or relocating a new motor vehicle dealer within a 31 dealer's relevant market area, the manufacturer shall give 90 days' written notice to the
01 new motor vehicle dealer holding the relevant market area of the manufacturer's 02 intention to establish an additional new motor vehicle dealer or to relocate an existing 03 new motor vehicle dealer within the dealer's relevant market area. 04 (b) This section does not apply 05 (1) to the relocation of an existing new motor vehicle dealer to a new 06 location within the relevant market area of the existing new motor vehicle dealer; 07 (2) to the sale or transfer of the ownership or assets of an existing new 08 motor vehicle dealer if the transferee proposes to engage in business representing the 09 same line make of new motor vehicle at the same location or within 10 miles of that 10 location within the existing new motor vehicle dealer's assigned relevant market area; 11 (3) if the proposed new motor vehicle dealer will establish the 12 dealership at or within 10 miles of a location within the relevant market area in which 13 a former new motor vehicle dealer of the same line make of new motor vehicles had 14 ceased operating within the previous 24 months and if the manufacturer had not 15 assigned the location to another new motor vehicle dealer during the period when the 16 former new motor vehicle dealer had stopped operating; 17 (4) if the proposed relocation is two miles or less from the existing 18 location of the relocating new motor vehicle dealer; or 19 (5) if the proposed relocation will be located farther away from all 20 other existing new motor vehicle dealers of the same line make of new motor vehicle 21 than the existing new motor vehicle dealer. 22 (c) Notwithstanding the terms of a franchise agreement and notwithstanding 23 the terms of a waiver, if a manufacturer intends or proposes to establish an additional 24 new motor vehicle dealership or relocate an existing new motor vehicle dealership 25 within or into a relevant market area in which the same make or line of new motor 26 vehicle is represented, the manufacturer shall first establish good cause to establish or 27 relocate a dealership. When determining whether good cause exists for permitting the 28 proposed establishment or relocation of a new motor vehicle dealer of the same line 29 make, the manufacturer shall consider the existing circumstances, including 30 (1) the extent, nature, and permanency of the investment of the 31 existing new motor vehicle dealers of the same line make in the relevant market area
01 and the proposed additional or relocating new motor vehicle dealer, including 02 obligations reasonably incurred by the existing dealer to perform its obligations under 03 its respective franchise; 04 (2) the growth or decline in population and new motor vehicle 05 registrations during the past five years in the relevant market area; 06 (3) the effect on the consuming public in the relevant market area; 07 (4) the effect on the existing new motor vehicle dealers in the relevant 08 market area, including any adverse financial effect on the existing new motor vehicle 09 dealer; 10 (5) the reasonably expected or anticipated motor vehicle market for the 11 relevant market area, including the age of the population, income, education, size class 12 preference, product popularity, retail lease transactions, other demographic factors, 13 and other factors affecting sales to consumers in the relevant market area; 14 (6) whether establishing an additional new motor vehicle dealer would 15 injure or benefit the public welfare; 16 (7) whether the new motor vehicle dealer of the same line make in the 17 relevant market area is providing adequate competition and convenient customer care 18 for the new motor vehicles of the same line make in the relevant market area, 19 including a consideration of the service facilities, the equipment, the supply of vehicle 20 parts, the qualifications of service personnel, and the number of new motor vehicle 21 sales; 22 (8) whether the establishment of an additional new motor vehicle 23 dealer would increase competition and be in the public interest; 24 (9) whether the manufacturer is motivated principally by good faith 25 and economic considerations to establish an additional or new motor vehicle dealer; 26 (10) whether the manufacturer has denied its existing new motor 27 vehicle dealer of the same line make the opportunity for reasonable growth, market 28 expansion, establishment of a satellite location, subagency, or relocation; and 29 (11) whether the existing dealer is substantially and significantly 30 violating the franchise agreement or other agreements with the manufacturer. 31 (d) If a manufacturer intends or proposes to enter into a franchise agreement to
01 establish an additional new motor vehicle dealer within a relevant market area in 02 which the same make or line of new motor vehicle is represented, the manufacturer 03 shall first offer the existing dealer in that relevant market area the opportunity to 04 establish the new dealership as a satellite location of the existing dealer. If the 05 manufacturer believes, in good faith, that the existing new motor vehicle dealer does 06 not, for good cause, qualify to establish the additional dealership or satellite location, 07 or relocate an existing new motor vehicle dealer within or into a relevant market area 08 in which the same line make of motor vehicle is then represented, the manufacturer 09 shall provide at least 90 days' advance written notice to each new motor vehicle dealer 10 of the same line make in the relevant market area of the manufacturer's intention to 11 establish an additional new motor vehicle dealer within the relevant market area. The 12 notice shall be sent by certified mail and must include the 13 (1) specific location at which the additional or relocated new motor 14 vehicle dealer will be established; 15 (2) date on or after which the additional or relocated new motor 16 vehicle dealer intends to begin business at the proposed location; 17 (3) identity of the new motor vehicle dealer who is franchised to sell 18 the same line make new motor vehicles as the proposed dealer and who has licensed 19 locations within the relevant market area; 20 (4) names and addresses, if available, of the owners of and principal 21 investors in the proposed additional or relocated new motor vehicle dealership; and 22 (5) specific grounds or reasons for the proposed establishment of an 23 additional new motor vehicle dealer or relocation of an existing new motor vehicle 24 dealer. 25 (e) The manufacturer has the burden of proof to establish that good cause 26 exists for permitting a proposed establishment or relocation of a new motor vehicle 27 dealer under this section. 28 * Sec. 14. AS 45.25 is amended by adding a new section to read: 29 Sec. 45.25.185. Court actions. (a) Within 30 days after receiving the notice of 30 termination given under AS 45.25.120 or within 30 days after the end of an appeal 31 procedure provided by the manufacturer, whichever event is later, a new motor vehicle
01 dealer may bring an action for declaratory judgment in the superior court to determine 02 whether good cause exists under AS 45.25.115 for the termination of the franchise 03 agreement. If a new motor vehicle dealer files an action under this subsection, the 04 manufacturer may not terminate the franchise agreement until the superior court has 05 issued a decision on the matter. 06 (b) Within 20 days after receipt of a notice under AS 45.25.160(c) of a 07 manufacturer's refusal to approve a sale, transfer, or exchange of a franchise by a new 08 motor vehicle dealer, the new motor vehicle dealer may file an action in the superior 09 court to determine whether the manufacturer unreasonably withheld consent to the 10 sale, transfer, or exchange of the franchise. 11 (c) Within 30 days after receipt of a notice of disapproval of succession under 12 AS 45.25.170(d), the proposed successor may file an action with the superior court to 13 determine whether the manufacturer has unreasonably withheld approval. 14 (d) Within 30 days after receiving the notice required under AS 45.25.180(d), 15 or within 30 days after the end of an appeal procedure provided by the manufacturer, a 16 new motor vehicle dealer may bring an action for declaratory judgment in the superior 17 court to determine whether good cause exists for the establishment or relocation of a 18 proposed new motor vehicle dealer. If a new motor vehicle dealer files an action under 19 this subsection, the manufacturer may not establish or relocate the proposed new 20 motor vehicle dealer until the superior court decides the matter. 21 (e) When a superior court determines whether good cause exists for permitting 22 the proposed establishment or relocation of a new motor vehicle dealer of the same 23 line make under (d) of this section, 24 (1) the superior court shall consider the existing circumstances, 25 including the factors in AS 45.25.180(c), and shall give equal weight to the factors 26 applied under AS 45.25.180(c); and 27 (2) a finding of good cause requires that at least nine of the 11 factors 28 in AS 45.25.180(c) support the proposed establishment or relocation of a new motor 29 vehicle dealer. 30 * Sec. 15. AS 45.25 is amended by adding new sections to article 2 to read: 31 Sec. 45.25.195. Rates for warranty and policy work. (a) A manufacturer
01 shall provide each of its new motor vehicle dealers with the schedule of compensation 02 that the manufacturer shall pay to the new motor vehicle dealer for warranty work, 03 policy work, predelivery service, or other service that the manufacturer requires the 04 new motor vehicle dealer to perform for the manufacturer's products. 05 (b) The manufacturer shall provide the schedule of compensation established 06 under (a) of this section in the franchise agreement or in a separate agreement with the 07 new motor vehicle dealer. The schedule of compensation must include compensation 08 for parts, labor, and diagnostic work and must comply with this section. 09 (c) The schedule of compensation may not be less than the rates that the new 10 motor vehicle dealer charges retail customers for similar service for nonwarranty 11 service and repairs. 12 (d) The manufacturer shall establish the schedule of compensation for parts at 13 a rate that equals the prices that a new motor vehicle dealer charges retail customers 14 for nonwarranty service and repairs for parts, including the price paid for the part, 15 shipping charges, other charges incurred for the parts, and the average retail 16 percentage markup that the new motor vehicle dealer charges. 17 (e) To establish the average retail percentage markup, the new motor vehicle 18 dealer shall submit to the manufacturer 50 sequential chronologically issued retail 19 service repair orders paid by customers, or 45 days of retail service repair orders paid 20 by customers if the number of orders during the 45 days is fewer. The orders that the 21 new motor vehicle dealer submits must cover retail repairs that the new motor vehicle 22 dealer made less than 180 days before the new motor vehicle dealer submits them to 23 the manufacturer. 24 (f) A manufacturer may not require a new motor vehicle dealer to establish the 25 average retail percentage markup for parts by a method other than the method required 26 by (e) of this section. When establishing the average retail percentage markup, a 27 manufacturer may not require the new motor vehicle dealer to provide information 28 that is unduly burdensome or time consuming to provide, including part-by-part or 29 transaction-by-transaction calculations. 30 (g) When calculating the retail rate for parts and labor, a dealer may not 31 include in the calculation
01 (1) repairs for manufacturer special events, manufacturer specials, or 02 retail customer repair promotional discounts; 03 (2) for insurance repairs, parts sold at wholesale or at reduced or 04 specially negotiated rates; 05 (3) routine maintenance not covered under warranty, including the 06 replacement of fluids, filters, and belts, unless the new motor vehicle dealer provides 07 the routine maintenance in the course of making a repair; 08 (4) nuts, bolts, fasteners, and similar items that do not have an 09 individual part number; 10 (5) tires, batteries, and light bulbs; and 11 (6) vehicle reconditioning. 12 (h) The average retail percentage markup calculated under (d) - (g) of this 13 section may not take effect more than 30 days after the new motor vehicle dealer 14 submits the information required in (e) of this section to the manufacturer. 15 (i) A manufacturer shall compensate a new motor vehicle dealer for labor and 16 diagnostic work at the hourly rates charged by the new motor vehicle dealer to its 17 retail customers for that type of work, plus any documentation work or contact time 18 that the new motor vehicle dealer spends and the manufacturer requires to authorize or 19 verify the work, including providing photographs, paperwork, consultation, and 20 electronic data. 21 (j) A manufacturer may disapprove a rate proposed by the new motor vehicle 22 dealer under (i) of this section if the manufacturer demonstrates that the hourly rates or 23 other charges under (i) of this section unreasonably exceed the rates and charges of all 24 other franchised new motor vehicle dealers in the same relevant market area offering 25 the same motor vehicle line or a competitive motor vehicle line. 26 (k) A new motor vehicle dealer may not receive more than one rate increase 27 under (i) of this section in a calendar year. 28 (l) A manufacturer shall pay a new motor vehicle dealer for all repairs 29 performed by a new motor vehicle dealer that are covered under a manufacturer's 30 warranty, policy, or service contract. The manufacturer shall pay for the repairs 31 whether the owner or the dealership personnel identified the need for the repair. A
01 manufacturer shall pay the dealer for the repairs in accordance with the new motor 02 vehicle dealer's schedule of compensation established under (i) of this section that 03 applies to the repairs when the new motor vehicle dealer made the repairs. 04 (m) A new motor vehicle dealer shall submit a warranty work claim to the 05 manufacturer within 90 days after the owner reclaims the motor vehicle following the 06 new motor vehicle dealer's completion of work on the motor vehicle. The new motor 07 vehicle dealer shall submit the claim in the manner that the manufacturer requires. 08 (n) Within 15 days after the manufacturer receives a claim from a new motor 09 vehicle dealer under (m) of this section, the manufacturer shall approve or deny the 10 claim. If a manufacturer does not disapprove a claim in writing or electronically, as 11 required by this subsection, the manufacturer is considered to have approved the 12 claim, and the manufacturer shall pay the claim within 30 days after the manufacturer 13 receives the claim. 14 (o) If a manufacturer disapproves a claim that the new motor vehicle dealer 15 submits under (m) of this section, a manufacturer shall notify the new motor vehicle 16 dealer in writing or electronically and shall set out the reasons for disapproving the 17 claim. A new motor vehicle dealer may correct and resubmit the claim within 30 days 18 after the new motor vehicle dealer receives the written or electronic notice that the 19 manufacturer disapproved or denied the claim. 20 (p) Notwithstanding the other provisions of this section, within 15 days after a 21 manufacturer receives a consumer or dealer incentive claim from a new motor vehicle 22 dealer, the manufacturer shall approve or deny the claim. If a manufacturer does not 23 deny a claim in writing or electronically, as required by this subsection, within 15 days 24 after the manufacturer receives the claim, the manufacturer is considered to have 25 approved the claim, and the manufacturer shall pay the claim within 30 days after the 26 manufacturer receives the claim. 27 (q) The manufacturer shall notify the new motor vehicle dealer in writing or 28 electronically if the manufacturer denies the claim that the new motor vehicle dealer 29 submits under (p) of this section, and shall set out the reasons for the denial. A new 30 motor vehicle dealer may correct and resubmit the claim within 30 days after the new 31 motor vehicle dealer receives the written or electronic notice that the manufacturer
01 disapproved the claim. 02 (r) A manufacturer may not initiate or conduct an audit to determine the 03 validity of paid claims for new motor vehicle dealer warranty work, policy work, 04 predelivery service claims, or other service claims, or for consumer or new motor 05 vehicle dealer incentive claims, unless the manufacturer paid the claims within the six 06 months before performance of the audit. The manufacturer may not perform more than 07 one audit in a calendar year. 08 (s) A manufacturer may not deny or charge back to a new motor vehicle dealer 09 a warranty or policy claim after the initial submission or resubmission of the claim, or 10 as a result of an audit, if the new motor vehicle dealer can reasonably demonstrate that 11 the reason for the repair existed, the repair was performed, and the cause for the repair 12 was cured. 13 (t) A manufacturer may not recover all or a portion of its costs for 14 compensating its dealers for parts and labor provided by a new motor vehicle dealer 15 under this section by reducing the amount because of the new motor vehicle dealer or 16 by making a separate charge, surcharge, or other imposition. 17 (u) If a manufacturer requires that a certified technician perform a repair on a 18 motor vehicle, and if a certified technician is not available to begin the repair within 19 one business day after the delivery of the motor vehicle to a new motor vehicle dealer, 20 an uncertified technician may perform the repair if the uncertified technician performs 21 the repair under the supervision of a certified technician or service manager, and the 22 manufacturer shall pay a new motor vehicle dealer for the repairs performed by the 23 uncertified technician at the rate charged by the new motor vehicle dealer for the same 24 repair when performed by a certified technician. 25 (v) If a motor vehicle needs repairs that are covered under a manufacturer's 26 warranty, policy, or service contract, and if the motor vehicle is in a location that is not 27 accessible by road or that is more than 100 road miles from a new motor vehicle 28 dealer who may perform warranty, policy, or service contract repairs on the motor 29 vehicle, a new motor vehicle dealer may arrange to have the repairs performed by 30 another technician where the vehicle is located. The manufacturer shall reimburse the 31 new motor vehicle dealer for the cost of having the repairs performed in accordance
01 with the authorizing new motor vehicle dealer's then current schedule of compensation 02 for parts and labor, plus any freight or shipping charges, or at the retail rate that is in 03 effect when, and in the community where, the repairs are made, whichever amount is 04 less. 05 (w) In this section, 06 (1) "average retail percentage markup" means the average retail 07 percentage markup established under (e) of this section; 08 (2) "schedule of compensation" means the schedule of compensation 09 provided under (a) of this section. 10 Sec. 45.25.200. Discontinuation or reduction of line. In this chapter, if a 11 manufacturer discontinues the sale and distribution of a new motor vehicle line, or if a 12 manufacturer materially reduces the selection of new motor vehicle lines that the 13 manufacturer is offering to the extent that it is not economically viable for a new 14 motor vehicle dealer to continue to retail the new motor vehicle line, the new motor 15 vehicle dealer may consider the discontinuation or reduction a termination of the 16 franchise agreement between the manufacturer and the new motor vehicle dealer. 17 * Sec. 16. AS 45.25.300 is repealed and reenacted to read: 18 Sec. 45.25.300. Unfair practices. (a) Notwithstanding the terms of a franchise 19 agreement, a manufacturer, distributor, factory branch, or factory representative, or an 20 agent, officer, parent company, wholly or partially owned subsidiary, affiliated entity, 21 or other person controlled by or under common control with a manufacturer, 22 distributor, factory branch, or factory representative may not 23 (1) sell, offer to sell, or deliver a new motor vehicle to a new motor 24 vehicle dealer at a lower actual price than the actual price offered to another new 25 motor vehicle dealer for the same model of new motor vehicle that is similarly 26 equipped; 27 (2) sell, offer to sell, or deliver parts, accessories, equipment, or other 28 items to a new motor vehicle dealer at a lower actual price than the actual price 29 offered to another new motor vehicle dealer; 30 (3) use a promotion plan, marketing plan, or other similar device that 31 would
01 (A) result in one new motor vehicle dealer being charged a 02 lower actual price on new motor vehicles, parts, accessories, or other items 03 than another new motor vehicle dealer; or 04 (B) provide a rebate or incentive program that is based on a 05 new motor vehicle dealer selling or including in inventory a predetermined 06 number or percentage of new motor vehicles, certified pre-owned motor 07 vehicles, or lease return motor vehicles; 08 (4) adopt or change a method for the allocation, scheduling, or delivery 09 of new motor vehicles, parts, or accessories to a new motor vehicle dealer if the new 10 or changed method is not fair, reasonable, and equitable; upon request of a new motor 11 vehicle dealer, a manufacturer, distributor, factory branch, or factory representative 12 shall disclose in writing to the dealer the method by which the manufacturer allocates, 13 schedules, or delivers new motor vehicles, parts, and accessories to the manufacturer's 14 new motor vehicle dealers handling the same line make of vehicles; 15 (5) prevent, offset, or otherwise impair a new motor vehicle dealer's 16 right to request a documentation service fee on purchases made under an affinity 17 program or a similar program, including a promotion plan, marketing plan, 18 manufacturer employee program, new motor vehicle dealer employee program, or 19 employee friends or family purchase program; in this paragraph, 20 (A) "affinity program" means a marketing program designed to 21 increase brand loyalty by developing an ongoing relationship between a new 22 motor vehicle dealer and the customers of the new motor vehicle dealer; 23 (B) "documentation service fee" means a fee for filling out and 24 filing paperwork for a new motor vehicle; 25 (6) refuse or fail to deliver, in reasonable quantities and within a 26 reasonable period after receipt of an order, to a new motor vehicle dealer holding a 27 franchise for a make or line of new motor vehicles sold or distributed by the 28 manufacturer, distributor, factory branch, or factory representative a new motor 29 vehicle, part, or accessory, if the vehicle, part, or accessory is being delivered to other 30 motor vehicle dealers, or require a dealer to purchase unreasonable advertising 31 displays or other materials, or unreasonably require a dealer to remodel or renovate
01 existing facilities as a prerequisite to receiving a model or series of vehicles; 02 (7) fail or refuse to offer to its new motor vehicle dealer franchised to 03 sell the same line make of new motor vehicles all models manufactured for that line 04 make of new motor vehicles; 05 (8) sell, lease, ship, or deliver a new motor vehicle to a person in this 06 state, except directly to a new motor vehicle dealer holding a franchise agreement for 07 the line make in this state, without a written and revocable agreement by the new 08 motor vehicle dealer holding the relevant market area for the new motor vehicle dealer 09 to deliver the new motor vehicle to a specific person at a specific location; however, it 10 is not a violation of this paragraph for 11 (A) a manufacturer to sell, lease, or deliver new motor vehicles 12 directly to an agency of the federal government; or 13 (B) a manufacturer or new motor vehicle dealer to arrange for 14 the delivery of a new motor vehicle that is sold or leased to a specific customer 15 of another new motor vehicle dealer that is assigned to the relevant market area 16 in which the purchaser or lessor resides, if the manufacturer or new motor 17 vehicle dealer arranges for the delivery by using an agreement with the new 18 motor vehicle dealer that is assigned to the relevant market area in which the 19 purchaser or lessor resides; 20 (9) own, operate, or control, whether directly or indirectly, a new 21 motor vehicle dealership in this state, except that a manufacturer, distributor, factory 22 branch, or factory representative may own or operate a dealership 23 (A) for a temporary period, not to exceed two years, during the 24 transition from one owner of the dealership to another owner if a franchised 25 new motor vehicle dealer previously owned the dealership and the dealership is 26 currently for sale at a fair and reasonable price to a qualified person who is 27 independent of the manufacturer, distributor, factory branch, or factory 28 representative; or 29 (B) in conjunction with another person in a bona fide business 30 relationship for the purpose of broadening the diversity of its dealers and 31 increasing the opportunities for qualified persons who lack the resources to
01 purchase a dealership completely and immediately if the person 02 (i) is not connected by business arrangement to the 03 manufacturer, distributor, factory branch, or factory representative; 04 (ii) makes a significant bona fide capital investment in 05 the dealership that the person may lose; 06 (iii) has an ownership interest in the dealership; and 07 (iv) operates the dealership under a bona fide written 08 agreement with the manufacturer, distributor, factory branch, or factory 09 representative under which the person will acquire all of the ownership 10 interest in the dealership within a reasonable period and under 11 reasonable terms and conditions; the manufacturer, distributor, factory 12 branch, or factory representative has the burden of proof to establish 13 that the person acquired the dealership within a reasonable period and 14 under reasonable terms and conditions; this sub-subparagraph does not 15 relieve a manufacturer, distributor, factory branch, or factory 16 representative from complying with the other provisions of this 17 paragraph; 18 (10) without the express, continuing, and revocable written consent of 19 the dealer within the relevant market area, own, operate, or control, whether directly or 20 indirectly, a service facility in this state for the repair or maintenance of motor 21 vehicles under the manufacturer's new vehicle warranty, service plans, or extended 22 warranty, or contract with a person other than its franchised new motor vehicle dealer 23 in the relevant market area for payment by the manufacturer to a person for the repair, 24 maintenance, or service of motor vehicles under the manufacturer's new vehicle 25 warranty, extended warranty, or service contract; this paragraph does not prohibit a 26 manufacturer, distributor, factory branch, or factory representative from owning or 27 operating a service facility for the purpose of providing or performing maintenance, 28 repair, or service work on motor vehicles that are owned and operated solely by the 29 manufacturer, distributor, factory branch, or factory representative; 30 (11) use confidential or proprietary information obtained from a new 31 motor vehicle dealer to compete with the new motor vehicle dealer or to sell the
01 confidential or proprietary information to another person; in this paragraph, 02 "confidential or proprietary information" includes trade secrets, business plans, 03 marketing plans, marketing strategies, customer lists, contracts, sales data, revenue, or 04 other business information; 05 (12) terminate a franchise with a new motor vehicle dealer if 06 (A) the new motor vehicle dealer owns, has an investment in, 07 participates in the management of, or holds a franchise agreement for the sale 08 or service of another make or line of new motor vehicles; 09 (B) the new motor vehicle dealer has established another make 10 or line of new motor vehicles or service in the same dealership facilities as 11 those of the manufacturer or distributor; 12 (C) the new motor vehicle dealer has or intends to relocate the 13 manufacturer's or distributor's make or line of new motor vehicles or service to 14 an existing dealership facility that is within the relevant market area of the 15 motor vehicle line make to be relocated, except that, in a nonemergency 16 circumstance, the dealer shall give the manufacturer or distributor at least 60 17 days' notice of the intent to relocate; or 18 (D) a new motor vehicle dealer fails to change the location of 19 the dealership or to make substantial alterations to the use or number of 20 franchises on the dealership premises or facilities; 21 (13) coerce or attempt to coerce a new motor vehicle dealer to refrain 22 from or prohibit or attempt to prohibit a new motor vehicle dealer from acquiring, 23 owning, having an investment in, participating in the management of, or holding a 24 franchise agreement for the sale or service of another make or line of new motor 25 vehicles or related products, or establishing another make or line of new motor 26 vehicles or service in the same dealership facilities, if the prohibition against 27 acquiring, owning, investing, managing, or holding a franchise agreement for the 28 additional make or line of vehicles or products, or establishing another make or line of 29 new motor vehicles or service in the same dealership facilities, is not supported by 30 reasonable business considerations; the manufacturer has the burden of proving that 31 reasonable business considerations support or justify the prohibition against the
01 additional make or line of new motor vehicles or products or nonexclusive facilities; 02 (14) require, by contract or otherwise, a new motor vehicle dealer to 03 make a material alteration to, expansion of, or addition to a dealership facility, unless 04 the manufacturer uniformly requires similarly situated new motor vehicle dealers of 05 the same motor vehicle line make to make the alteration, expansion, or addition and 06 the alteration, expansion, or addition is reasonable in light of all existing 07 circumstances, including economic conditions and local market considerations; in an 08 administrative or judicial proceeding in which a required facility alteration, expansion, 09 or addition is an issue, the manufacturer or distributor has the burden of proof; if an 10 alteration, expansion, or addition is required under this paragraph, the new motor 11 vehicle dealer may select the person to make the alteration, expansion, or addition; 12 (15) require a new motor vehicle dealer to order or accept delivery of a 13 new motor vehicle, part, accessory, piece of equipment, promotional material, display 14 device, display decoration, or other item that is not otherwise required by law and that 15 the dealer does not voluntarily order; this paragraph does not apply to the recall of 16 safety and emissions campaign parts unless the dealer voluntarily ordered them, or to a 17 motor vehicle feature, part, accessory, or other component required by federal law, the 18 law of this state, or local law; 19 (16) coerce or attempt to coerce a new motor vehicle dealer to join, 20 contribute money to, or affiliate with an advertising association, or to participate 21 monetarily in an advertising campaign, or, if a new motor vehicle dealer chooses to 22 join, contribute monetarily to, or affiliate with an advertising association, to require 23 the new motor vehicle dealer to use the association funding allocated to the new motor 24 vehicle dealer to run prepackaged radio, television, or newspaper advertising that 25 identifies the association with the association rather than the contributing new motor 26 vehicle dealer; 27 (17) prevent or attempt to prevent by contract or another method a new 28 motor vehicle dealer from changing the executive management of the new motor 29 vehicle dealer unless the manufacturer or distributor meets the burden of proof to 30 show that a proposed change of executive management will result in executive 31 management by a person who does not have good moral character or who does not
01 meet reasonable, preexisting, and equitably applied standards of the manufacturer or 02 distributor; if a manufacturer or distributor rejects a proposed change in the executive 03 management, the manufacturer or distributor shall give written notice of its reasons for 04 the rejection to the new motor vehicle dealer within 60 days after receiving written 05 notice from the new motor vehicle dealer of the proposed change and all related 06 information reasonably requested by the manufacturer or distributor; if the 07 manufacturer or distributor does not give the written notice within the 60 days, the 08 manufacturer or distributor is considered to have approved the change in executive 09 management; 10 (18) condition the sale, transfer, relocation, or renewal of a franchise 11 agreement, or condition manufacturer, distributor, factory branch, or factory 12 representative sales, services, or parts incentives on the 13 (A) manufacturer obtaining site control, including a right to 14 purchase or lease the new motor vehicle dealer's facility; or 15 (B) new motor vehicle dealer making facility improvements or 16 renovations that exceed a gross cost of $5,000 to the new motor vehicle dealer; 17 (19) coerce, threaten, intimidate, or require a new motor vehicle dealer, 18 as a condition of granting or renewing a franchise agreement, to waive, limit, or 19 disclaim a right that the new motor vehicle dealer may have to protest the 20 establishment or relocation of another motor vehicle dealer in the relevant market 21 area; 22 (20) require a new motor vehicle dealer to change the capital structure 23 of the dealership or the means by or through which the new motor vehicle dealer 24 finances the operation of the dealership, unless the dealership does not at all times 25 meet reasonable capital investment requirements; 26 (21) increase the price of a new motor vehicle that the new motor 27 vehicle dealer has ordered from the manufacturer and for which there exists at the time 28 of the order a bona fide sale to a retail or fleet purchaser if the order was made before 29 the manufacturer provided the dealer with an official written price increase 30 notification; 31 (22) require a new motor vehicle dealer to purchase or sell a
01 predetermined number of certain new, certified used, or lease return motor vehicles in 02 a specified time for the new motor vehicle dealer to obtain offered rebates or refunds 03 that the manufacturer offers without imposing the time requirement on another new 04 motor vehicle dealer who sells the predetermined number of vehicles; 05 (23) increase the price of a new motor vehicle by 06 (A) charging more for the new motor vehicle; or 07 (B) effectively decreasing the price of the new motor vehicle 08 by requiring the new motor vehicle dealer to 09 (i) stock a particular model of new motor vehicle; or 10 (ii) provide an unreasonable and economically 11 unjustifiable modification of the new motor vehicle dealer's facility; 12 (24) deliver to a new motor vehicle dealer a new motor vehicle that 13 does not comply in every respect with equipment requirements required by the law of 14 this state, unless the manufacturer reimburses a dealer to modify the new vehicle to 15 meet the equipment requirements; or 16 (25) fail to indemnify and hold harmless a new motor vehicle dealer 17 (A) from a court judgment for damages, or settlement of a court 18 action if the manufacturer approves the settlement in writing; or 19 (B) where applicable law or the franchise agreement requires 20 the indemnification and holding harmless. 21 (b) The provisions of (a)(1) - (3) of this section do not apply to sales to a new 22 motor vehicle dealer if the new motor vehicle dealer 23 (1) makes the sale for resale to a federal agency; 24 (2) sells or donates the vehicles for use in a driver's education 25 program; 26 (3) makes the sale under a manufacturer's bona fide uniformly applied 27 promotional program offering sales incentives or rebates; 28 (4) sells parts or accessories under a manufacturer's bona fide quantity 29 discount program; or 30 (5) makes the sale under a manufacturer's bona fide motor vehicle 31 discount program to a person that owns and operates a fleet of 15 or more new motor
01 vehicles purchased or leased from a dealer where the manufacturer has assigned an 02 identifier code. 03 (c) In this section, 04 (1) "actual price" means that the price the new motor vehicle dealer 05 pays after deducting an incentive that the manufacturer, distributor, factory branch, or 06 factory representative pays to the new motor vehicle dealer or the ultimate purchaser 07 of the vehicle; 08 (2) "control" means to possess 09 (A) title to, or right to exercise 10 percent or more of the voting 10 equity interest in a person, whether directly or indirectly through a fiduciary, 11 agent, or other intermediary; or 12 (B) directly or indirectly, the power to direct or cause the 13 direction of the management or policies of a person, whether through the 14 ownership of voting securities, through director control, by contract, or 15 otherwise, except as expressly provided under the franchise agreement; 16 (3) "lease return vehicle" means a motor vehicle that has been 17 previously leased and then returned to the lessor; 18 (4) "operate" means to manage a new motor vehicle dealership directly 19 or indirectly; 20 (5) "own" means to hold the beneficial ownership of one percent or 21 more of a class of equity interest in a new motor vehicle dealership, whether the 22 interest is that of a shareholder, partner, limited liability company member, or 23 otherwise; in this paragraph, "hold" means to have possession of, title to, or control of, 24 whether directly or indirectly through a fiduciary, agent, or other intermediary. 25 * Sec. 17. AS 45.25.320(a) is amended to read: 26 (a) A manufacturer or distributor may not [AUDIT A CLAIM,] deny a claim, 27 reduce the amount of a claim to be reimbursed to a new motor vehicle dealer, or 28 charge back a portion of the claim to a new motor vehicle dealer if 18 or more months 29 have passed since the new motor vehicle dealer submitted the claim or if 18 or more 30 months have passed from the end of a manufacturer-sponsored incentive program 31 related to the claim, whichever 18-month period ends later.
01 * Sec. 18. AS 45.25.990(19) is repealed and reenacted to read: 02 (19) "terminate" includes to cancel, not to renew, or to discontinue or 03 make a reduction under AS 45.25.200; 04 * Sec. 19. AS 45.25.990 is amended by adding new paragraphs to read: 05 (22) "line make" means motor vehicles that are offered for sale under a 06 common name, trademark, service mark, or brand name of the manufacturer of those 07 motor vehicles; 08 (23) "relevant market area" means the area of responsibility of a new 09 motor vehicle dealer established in a franchise agreement. 10 * Sec. 20. AS 45.25.110(b) and 45.25.110(c) are repealed. 11 * Sec. 21. The uncodified law of the State of Alaska is amended by adding a new section to 12 read: 13 TRANSITION: SCHEDULE OF COMPENSATION. The schedule of compensation 14 for a new motor vehicle dealer under franchise with a manufacturer on the effective date of 15 this Act may not be less than the schedule of compensation provided to the new motor vehicle 16 dealer immediately before the effective date of this Act. In this section, 17 (1) "franchise" has the meaning given in AS 45.25.990; 18 (2) "manufacturer" has the meaning given in AS 45.25.990; 19 (3) "new motor vehicle dealer" has the meaning given in AS 45.25.990; 20 (4) "schedule of compensation" has the meaning given in AS 45.25.195.