CSHB 272(STA): "An Act relating to motor vehicle dealers."

00 CS FOR HOUSE BILL NO. 272(STA) 01 "An Act relating to motor vehicle dealers." 02 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 03 * Section 1. AS 08.66.015 is amended to read: 04 Sec. 08.66.015. Sale of motor vehicle. (a) A person who does business as a 05 dealer in the state may not offer to sell or sell a motor vehicle as a new [OR 06 CURRENT MODEL] motor vehicle unless the motor vehicle retains the 07 manufacturer's certificate of origin. 08 (b) A person who does business as a dealer in the state may [NOT] offer to 09 sell or sell a motor vehicle as a [NEW OR] current model motor vehicle only if 10 [HAVING A MANUFACTURER'S WARRANTY UNLESS] 11 (1) the dealer has a current sales and service agreement with the 12 manufacturer [AND THE AGREEMENT REQUIRES THE DEALER, UPON 13 DEMAND OF THE MOTOR VEHICLE BUYER, TO PERFORM OR ARRANGE 14 FOR, WITHIN A REASONABLE DISTANCE OF THE DEALER'S PLACE OF 15 BUSINESS IN THE STATE, THE REPAIR AND REPLACEMENT WORK

01 REQUIRED OF THE MANUFACTURER UNDER THE WARRANTY]; [OR] 02 (2) the vehicle is a current model used vehicle received as a trade- 03 in in the normal course [DEALER OFFERS TO GIVE THE BUYER A REBATE 04 TO COVER THE REPAIR AND REPLACEMENT WORK THAT THE DEALER 05 CANNOT PERFORM OR ARRANGE FOR WITHIN A REASONABLE 06 DISTANCE OF THE DEALER'S PLACE] of business; 07 (3) the vehicle has been purchased directly from a consumer in the 08 United States for purposes of resale; 09 (4) the vehicle has been in service with a bona fide rental fleet for 10 at least five months; 11 (5) the vehicle is a current model used vehicle that has been leased 12 by a consumer and has been returned to the leasing dealer; 13 (6) the vehicle has been repossessed; or 14 (7) the vehicle was purchased at an auction and meets the 15 requirements of (2), (3), (4), (5), or (6) of this subsection. 16 * Sec. 2. AS 45.25.400(b) is amended to read: 17 (b) A motor vehicle dealer may use the term "manufacturer's suggested retail 18 price," "MSRP," or "list price" in an advertisement for the sale of a motor vehicle, 19 subject to the restriction on price comparisons in AS 45.25.450 and the following: 20 (1) the advertised price must reference the final price listed by the 21 manufacturer on the monroney sticker, including accessories and options physically 22 attached to the vehicle at the time of delivery to the dealer, plus any transportation 23 charges, and minus all manufacturer discounts and savings; 24 (2) the manufacturer's suggested retail price or the list price does not 25 include charges added by the dealer or options added to the vehicle by the dealer; and 26 (3) whenever using the term "manufacturer's suggested retail price," 27 "MSRP," or "list price," the dealer [SHALL PROVIDE IN THE ADVERTISEMENT 28 A CLEAR AND CONSPICUOUS DISCLOSURE THAT STATES THAT A SALE] 29 may not represent that a buyer would save money by paying a [HAVE 30 OCCURRED AT THAT] price that is lower than the "manufacturer's suggested 31 retail price," "MSRP," or "list price".

01 * Sec. 3. AS 45.25.410 is amended to read: 02 Sec. 45.25.410. Availability of advertised items. A motor vehicle dealer 03 may not advertise a new motor vehicle [VEHICLES AND RELATED GOODS OR 04 SERVICES] at a specified dealer price with the intent not to supply reasonably 05 expected demand, unless the advertisement discloses the number of vehicles in stock 06 at the advertised price. 07 * Sec. 4. AS 45.25.460(a) is amended to read: 08 (a) In addition to the provisions of AS 45.50.471 and regulations adopted 09 under AS 45.50.471, a motor vehicle dealer [MAY NOT] 10 (1) shall include in [EXCLUDE FROM] an advertisement of a motor 11 vehicle for sale all [THAT TAXES, IF APPLICABLE, VEHICLE REGISTRATION 12 FEES, FINANCE CHARGES, CHARGES FOR THE ISSUANCE OF ANY 13 CERTIFICATE OF COMPLIANCE OR NONCOMPLIANCE REQUIRED BY 14 STATUTE, OR OTHER] fees or charges, except fees or charges to be paid to a third 15 party [THAT ARE NOT OTHERWISE INCLUDED IN THE ADVERTISED PRICE 16 WILL BE ADDED TO THE ADVERTISED PRICE AT THE TIME OF THE SALE]; 17 (2) may not represent the dealer document preparation fee as a 18 government fee; 19 (3) may not advertise a specific motor vehicle for sale without 20 identifying the vehicle by either its vehicle identification number, vehicle stocking 21 number, or license number; 22 (4) may not advertise that free merchandise, gifts, or services will be 23 provided by the dealer if a vehicle is purchased; in this paragraph, "free" includes 24 merchandise or services offered for sale at a price less than the dealer's cost for the 25 merchandise or services; 26 (5) may not use the term "rebate," "cash back," or a similar term in 27 advertising the sale of a motor vehicle unless the rebate is expressed in a specific 28 dollar amount and is in fact a rebate offered by the vehicle manufacturer or distributor 29 directly to the retail buyer of the vehicle; 30 (6) may not require a person, in order to receive the advertised credit 31 terms, to pay a higher price for a motor vehicle and any related goods or services than

01 the cash price the same person would have to pay to purchase the same vehicle and 02 related goods or services; 03 (7) may not advertise a guaranteed trade-in allowance or range of 04 allowances unless the guarantee is provided by the manufacturer or distributor; 05 (8) may not affix to a new motor vehicle a supplemental price sticker 06 containing a price that represents the dealer's asking price if the supplemental price 07 sticker exceeds the manufacturer's suggested retail price, unless the supplemental 08 sticker 09 (A) clearly and conspicuously, in the largest print appearing on 10 the sticker other than the print size used for the dealer's name, discloses that 11 the supplemental sticker price is the dealer's asking price, or words of similar 12 meaning, and is not the manufacturer's suggested retail price; 13 (B) clearly and conspicuously discloses the manufacturer's 14 suggested retail price; and 15 (C) states, if the supplemental sticker price is greater than the 16 sum of the manufacturer's suggested retail price and the price of the items 17 added by the dealer, the difference and describes it as additional dealer mark- 18 up; 19 (9) may not advertise or otherwise represent, or knowingly allow to be 20 advertised or represented on behalf of the dealer, that a down payment is not required 21 in connection with the sale of a motor vehicle when a down payment is in fact 22 required; 23 (10) may not advertise an offer for the sale, lease, or purchase of a 24 motor vehicle that [CREATES THE FALSE IMPRESSION THAT THE VEHICLE IS 25 BEING OFFERED BY A PRIVATE PARTY OR A MOTOR VEHICLE AGENT OR 26 THAT] does not contain the name of the dealer; 27 (11) may not [USE AN ADVERTISEMENT FOR A MOTOR 28 VEHICLE THAT CONTAINS LANGUAGE THAT FALSELY, IMPLICITLY, OR 29 EXPLICITLY SUGGESTS THAT, TO TAKE ADVANTAGE OF AN OFFER, A 30 CONSUMER MUST ACT WITHIN A CERTAIN PERIOD OF TIME WHEN, IN 31 FACT, THE VEHICLES WILL CONTINUE TO BE AVAILABLE AT THE

01 ADVERTISED PRICE BEYOND THAT TIME PERIOD; 02 (12) REQUIRE A BUYER OF A NEW MOTOR VEHICLE, AS A 03 CONDITION OF SALE AND DELIVERY, TO ALSO PURCHASE SPECIAL 04 FEATURES, APPLIANCES, ACCESSORIES, OR EQUIPMENT NOT DESIRED 05 OR REQUESTED BY THE BUYER UNLESS THE SPECIAL FEATURES, 06 APPLIANCES, EQUIPMENT, OR ACCESSORIES ARE ALREADY INSTALLED 07 ON THE VEHICLE WHEN RECEIVED BY THE DEALER; 08 (13)] represent and sell as a new motor vehicle a demonstrator vehicle 09 or a motor vehicle that is a used motor vehicle; in this paragraph, "demonstrator 10 vehicle" 11 (A) means a motor vehicle 12 (i) that has been assigned by a dealer for use by the 13 dealership as an executive vehicle for promotional purposes, including 14 being driven in the community; 15 (ii) that has not been licensed by a retail buyer; and 16 (iii) the title of which has not been transferred to a retail 17 buyer; 18 (B) does not include a motor vehicle that has only been driven 19 to demonstrate the motor vehicle to a prospective buyer; 20 (12) may not [(14)] advertise that the dealer finances any person or 21 does not reject any person's credit, or make similar claims; 22 (13) may not [(15)] advertise or make a statement, declaration, or 23 representation in an advertisement that cannot be substantiated in fact; the burden of 24 proof of the factual basis for the statement, declaration, or representation is on the 25 dealer. 26 * Sec. 5. AS 45.25.465 is amended by adding a new subsection to read: 27 (c) When a motor vehicle dealer sells a used motor vehicle or a current model 28 used motor vehicle, the motor vehicle dealer shall disclose to the buyer in writing in a 29 manner that is clear and conspicuous and posted in the window of the vehicle 30 (1) that the warranty provisions of AS 45.45.300 - 45.45.360 do not 31 apply to the purchase of the motor vehicle;

01 (2) that, if applicable, the vehicle is not subject to a manufacturer's 02 warranty; and 03 (3) that, if applicable, the vehicle was originally manufactured for sale 04 in Canada or another foreign country. 05 * Sec. 6. AS 45.25.510(a) is amended to read: 06 (a) Before entering into a new motor vehicle sales contract, a new motor 07 vehicle dealer shall disclose in writing to a buyer of the new motor vehicle any known 08 damage and repair to the new motor vehicle if the damage exceeds five percent of the 09 manufacturer's suggested retail price as calculated at the dealer's authorized warranty 10 rate for labor and parts, or $1,000, whichever amount is greater. A new motor 11 vehicle dealer is not required to disclose to a buyer that glass, tires, bumpers, or 12 cosmetic parts of a new motor vehicle were damaged at any time if the damaged item 13 has been replaced with original or comparable equipment. A replaced part is not part 14 of the cumulative damage required to be disclosed under this subsection. 15 * Sec. 7. AS 45.25 is amended by adding a new section to read: 16 Sec. 45.25.530. Disclosure regarding receipt of commissions. If a motor 17 vehicle dealer's service operations employees receive a commission for the amount of 18 work they perform, the motor vehicle dealer shall post a conspicuous sign that is 19 visible to service customers that the dealer's service operations employees work on 20 commission. 21 * Sec. 8. AS 45.25.610(c) is amended to read: 22 (c) If [NOTWITHSTANDING THE REQUIREMENTS OF THIS SECTION, 23 IF] a motor vehicle dealer arranges financing for a buyer, the motor vehicle dealer 24 may deliver the motor vehicle to the buyer before final approval by the financing 25 entity if 26 (1) the buyer and seller sign an agreement separate from the motor 27 vehicle installment contract on an 8 1/2 x 11 inch sheet of paper that clearly and 28 conspicuously informs the buyer that final financing arrangements have not yet been 29 approved and that clearly sets out the amount that will be financed, the annual 30 percentage rate of the finance charge, the amount of the finance charge, the number 31 and frequency of payments, and the amount of each payment;

01 (2) the separate agreement clearly and conspicuously informs the 02 buyer that accepting delivery of the vehicle before final financing approval obligates 03 the buyer to terms of the motor vehicle sales contract if the terms on the separate 04 agreement are identical to the terms finally approved by the financing entity; and 05 (3) the separate agreement provides that the separate agreement, the 06 motor vehicle sales contract, and any and all other conditions of the purchase will be 07 void if any of the terms contained in the separate agreement are changed by either the 08 motor vehicle dealer or the financing institution as a condition of sale or final 09 financing approval. 10 * Sec. 9. AS 45.25.610(d) is amended to read: 11 (d) If a buyer's final financing is not approved [WITHIN SEVEN BUSINESS 12 DAYS FROM THE DATE OF THE SEPARATE AGREEMENT] and, as a result, the 13 transaction is not completed, the motor vehicle dealer shall return the buyer's entire 14 down payment, and the buyer's trade-in, if any, shall be returned to the buyer in the 15 same condition and with not more than 100 [10] miles accumulated on the odometer 16 from when the motor vehicle was delivered to the motor vehicle dealer. 17 * Sec. 10. AS 45.25.460(b) and 45.25.610(b) are repealed.