Alaska House Passes Bill to Revise Alaska’s Outdated Automotive Dealership Franchise Agreements

FOR IMMEDIATE RELEASE
April 9, 2018

Alaska House Passes Bill to Revise Alaska’s Outdated Automotive Dealership Franchise Agreements

Anchorage Lawmaker Negotiates Compromise Between Alaska’s Auto Dealers and Nationwide Manufacturers to Update Auto Dealer Franchise Laws.

Juneau – Today, the Alaska House of Representatives passed legislation sponsored by Representative Matt Claman (D-Anchorage) that updates Alaska statutes dealing with franchise agreements between auto dealers and auto manufacturers and distributors. Senator Kevin Meyer (R-Anchorage) has sponsored the companion bill in the Senate with identical provisions.

In 2016, Alaska dealerships directly or indirectly employed 6,876 people. In the same year, car sales accounted for 14 percent of total retail sales in Alaska. House Bill 136 recognizes the contributions of auto dealers and manufacturers to Alaska’s economy and updates Alaska statute to include protections for both. The need for a revision of Alaska’s motor vehicle franchise agreements became apparent after the 2008 market crash when General Motors and Chrysler terminated roughly 2,000 dealerships. House Bill 136 provides termination protections for auto dealers while also creating new consumer protections for Alaskans.

House Bill 136 updates statutes relating to warranty repair work, requiring a manufacturer to pay for warranty work at a competitive rate that is consistent with the retail rate for non-warranty work. The bill updates warranty repair policies to be more consumer friendly and provides new warranty repair work options for consumers who are 100 miles or more away from a dealership. House Bill 136 address dealership terminations by manufacturers by stipulating what constitutes good cause for terminations and by setting out the manufacturers and auto dealers’ financial responsibilities during terminations. The bill also updates the provisions and terms for transferring or selling a dealership.

The version of House Bill 136 that passed the House today is a product of extensive negotiations between the Alaska Automobile Dealers Association and the Alliance of Automobile Manufacturers. The collaboration effort, led by Rep. Claman and Sen. Meyer, resulted in a bill that both parties agree clarifies their individual responsibilities and strengthens protections for Alaskans.

“Both dealers and manufacturers have a shared interest in the success of Alaska’s dealerships,” said Rep. Claman. “Alaskan dealers have found that standard motor vehicle franchise agreements used by the manufacturers don’t always address our unique state. By revising the statutes, we are creating a sound system for dealers and manufacturers in Alaska that extends protections to our consumers. In times of financial uncertainty, House Bill 136 provides the needed support to keep Alaska’s automotive industry strong.”

House Bill 136 passed the Alaska House of Representatives today by a vote of 36-3. The bill will now be sent to the Alaska State Senate for consideration.

For more information, please contact Sara Perman in Rep. Claman’s office at (907) 465-6597.

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