Title 8 — Commercial Law and Consumer Protection

Chapter 1 Contracts

Article 1 General Provisions

§ 8-1-1 Contracts Restraining Business Void; Exceptions

[Repealed]

Repealed by Act 2015-465 effective January 1, 2016.

(Code 1923, §§6826, 6827, 6828; Acts 1931, No. 546, p. 647; Code 1940, T. 9, §§22, 23, 24.)

§ 8-1-2 Written Contract Not Expressing Parties’ Intent May Be Revised

When, through fraud, a mutual mistake of the parties or a mistake of one party which the other at the time knew or suspected, a written contract does not truly express the intention of the parties, it may be revised by a court on the application of the party aggrieved so as to express that intention, so far as it can be done without prejudice to the rights acquired by third persons in good faith and for value.

(Code 1923, §6825; Code 1940, T. 9, §59.)

§ 8-1-3 Receipt or Acknowledgment for Collateral Required

(a) All banking, insurance and other corporations, private bankers, brokers and other persons engaged in the business of making discounts or lending money, or taking or receiving a collateral for a loan or discount, must give to the borrower, or to his agent or attorney, if demanded, a receipt or acknowledgment in writing designating or describing the collateral taken or received and stating the character of the debt, the time of its maturity and amount for the payment of which such collateral is intended as security.

(b) If negotiable bonds are taken or received as collateral, the receipt or acknowledgment must state the series number thereof if such bonds are numbered.

(Code 1886, §1785; Code 1896, §946; Code 1907, §3301; Code 1923, §6743; Code 1940, T. 9, §9.)

§ 8-1-4 Reimbursement for Certain Federal Manufacturer’s Excise Taxes; Option to Tender Payment One Business Day Before Remittance Due to Internal Revenue Service; Notification and Security; Applicability

(a) A party to a contract required to reimburse another party to the contract for the federal manufacturer’s excise tax levied pursuant to Sections 4081 to 4083, inclusive, and Section 4091 of Title 26 of the United States Code, whether as a separate item or as a part of the price, may tender payment for the taxes one business day prior to the time that the other party is required to remit the taxes to the United States Internal Revenue Service.

(b) If a party elects to make payment pursuant to subsection (a), the party to which the payment is owed may demand security for the payment of the taxes in proportion to the amount the taxes represent compared to the security demanded on the contract as a whole. The other party may not change the payment terms of the contract without a valid business reason other than the exercise of the option to be made by electronic transfer of funds.

(c) The party exercising the option in subsection (a) shall notify the other party in writing of the intent to exercise the payment option and the effective date of the exercise which shall not be earlier than 30 days after the notice of intent is received or the beginning of the next federal tax quarter, whichever is later.

(d) This section shall apply to all contracts existing on June 1, 1996 in which a reimbursement for taxes due has not been made, and to all other contracts entered into or renewed after June 1, 1996. Additionally and specifically, this section shall also apply to contracts arising from daily wholesale price offers which are accepted or rejected by the acceptance or rejection of products at such stated prices. Each daily price offering is a new offer and each purchase of product at a given price offer creates a new contract to which this section applies.

(e) The exercise of an option pursuant to subsection (a) shall not relieve the party of the obligation to make the reimbursement as provided for in the contract but shall affect only the timing of when that reimbursement shall be tendered.

(Acts 1996, No. 96-408, p. 516, §1.)

§ 8-1-5 Franchisor Prohibited from Requiring Franchisee to Operate on a Religious Day; Exception; Violations

(a) For purposes of this section, the following terms have the following meanings:

(1) FRANCHISE AGREEMENT. A written agreement or an amendment or renewal of a written agreement, or in the absence of a written agreement, a course of practice, in which a person grants to another person a license to use a trade name, trademark, service mark, or related characteristic in exchange for the payment of a franchise fee. The term includes a sales and service agreement other than a sales and service agreement regulated by Chapter 20, The Motor Vehicle Franchise Act; Chapter 8A of Tile 28; or Chapter 9 of Title 28.

(2) FRANCHISEE. a. A person with whom a franchisor has agreed or permitted, in writing or in practice, to purchase, sell, or offer for sale a product manufactured, produced, represented, or distributed by the franchisor in exchange for the payment of a franchise fee from the franchisee to the franchisor.

b. The term does not include a person regulated under Chapter 20, The Motor Vehicle Franchise Act; Chapter 8A of Title 28; Chapter 9 of Title 28; or Chapter 15 of Title 34.

(3) FRANCHISOR. a. A person that has agreed with or permits, in writing or in practice, a franchisee to purchase, sell, or offer for sale a product manufactured, produced, assembled, represented, or distributed by the franchisor. The term includes: (i) the manufacturer, producer, assembler, or distributor of the product; (ii) an intermediate distributor; and (iii) an agent, officer, or field or area representative of the franchisor.

b. The term does not include a person regulated under Chapter 20, The Motor Vehicle Franchise Act; Chapter 8A of Title 28; Chapter 9 of Title 28; or Chapter 15 of Title 34.

(4) ORIGINAL FRANCHISE AGREEMENT. A franchise agreement that is not a renewal or an amendment. The term includes any written documents incorporated into the agreement by reference.

(5) RELIGIOUS DAY OPERATION REQUIREMENT. Any requirement that has the effect of requiring a franchisee to operate a franchise on a day when doing so would conflict with the franchisee’s sincerely held religious beliefs.

(b) Except as provided in subsection (c), when a franchisee asserts a sincerely held religious belief, a franchisor may not:

(1) Enforce a religious day operation requirement;

(2) Require a franchisee to accept a religious day operation requirement as part of an amendment to the franchise agreement; or

(3) Refuse to renew a franchise agreement based on a franchisee’s decision to not comply with a religious day operation requirement.

(c) Subsection (b) does not apply and a franchisor is not prohibited from enforcing a religious day operation requirement when:

(1) The original franchise agreement or franchise agreement then in effect conspicuously provides for operation on a day that imposes a religious day operation requirement;

(2) The franchisee agrees through a renewal or an amendment to the franchise agreement to a religious day operation requirement; or

(3) The franchisor and the franchisee enter a franchise agreement expanding the franchisee’s number of franchise locations which contains a religious day operation requirement.

(d) If a court finds reasonable cause to believe that a franchisor violated subsection (b), the court may order:

(1) Actual damages, reasonable attorney fees, and costs to the franchisee;

(2) A permanent or temporary injunction, a temporary restraining order, or other appropriate order; and

(3) Civil penalties against the franchisor in an amount not exceeding:

a. Ten thousand dollars ($10,000) for a first violation;

b. Twenty-five thousand dollars ($25,000) for an additional violation within the five-year period ending on the day on which the franchisee filed the complaint; or

c. Fifty thousand dollars ($50,000) for an additional violation within the seven-year period ending on the day on which the franchisee filed the complaint.

(Act 2026-591, §1.)

Article 2 Accord and Satisfaction

§ 8-1-20 “Accord” Defined

An “accord” is an agreement to accept in extinction of an obligation something different from or less than that to which the person agreeing to accept is claiming or entitled.

(Code 1923, §5640; Code 1940, T. 9, §1.)

§ 8-1-21 Obligation Not Extinguished by Accord until Executed

Though the parties to an accord are bound to execute it, it does not extinguish the obligation until it is fully executed.

(Code 1923, §5641; Code 1940, T. 9, §2.)

§ 8-1-22 Accepting Accord Consideration Deemed Satisfaction

Acceptance of the consideration of an accord extinguishes the obligation and is called satisfaction.

(Code 1923, §5642; Code 1940, T. 9, §3.)

§ 8-1-23 Obligation Extinguished by New Consideration or Writing

An obligation is extinguished by a release therefrom given to the debtor by the creditor upon a new consideration or in writing with or without new consideration.

(Code 1923, §5643; Code 1940, T. 9, §4.)

Article 3 Specific Performance

§ 8-1-40 Specific Performance Not Enforced in Certain Cases

Specific performance cannot be enforced against a party to a contract in any of the following cases:

(1) If he has not received an adequate consideration for the contract;

(2) If it is not, as to him, just and reasonable;

(3) If his assent was obtained by the misrepresentation, concealment, circumvention or unfair practices of any party to whom performance would become due under the contract or by any promise of such party which has not been substantially fulfilled; or

(4) If his assent was given under the influence of mistake, misapprehension, or surprise; except, that where the contract provides for compensation in case of mistake, a mistake within the scope of such provision may be compensated for and the contract specifically enforced in other respects if proper to be so enforced.

(Code 1923, §6834; Code 1940, T. 9, §56.)

§ 8-1-41 Obligations Which Cannot Be Specifically Enforced

The following obligations cannot be specifically enforced:

(1) An obligation to render personal service;

(2) An obligation to employ another in personal service;

(3) An agreement to submit a controversy to arbitration;

(4) An agreement to perform an act which the party has not power lawfully to perform when required to do so;

(5) An agreement to procure the act or consent of the wife of the contracting party or of any other third persons; or

(6) An agreement, the terms of which are not sufficiently certain to make the precise act which is to be done clearly ascertainable.

(Code 1923, §6833; Code 1940, T. 9, §55.)

§ 8-1-42 Specific Performance Not Enforced for Party Not Fully Performing Conditions Precedent

Specific performance cannot be enforced in favor of a party who has not fully and fairly performed all the conditions precedent on his part to the obligation of the other party, except where his failure to perform is only partial and either entirely immaterial or capable of being fully compensated, in which case specific performance may be compelled, upon full compensation being made for the default.

(Code 1923, §6835; Code 1940, T. 9, §57.)

§ 8-1-43 Neither Party to Obligation Compelled Specifically to Perform Unless Other Party Performs

Neither party to an obligation can be compelled specifically to perform it unless the other party thereto has performed or is compelled specifically to perform everything to which the former is entitled under the same obligation, either completely or nearly so, with full compensation for any want of entire performance.

Code 1923, § 6829; Code 1940, T. 9, §51.)

§ 8-1-44 Contract Signed by One Party Only May Be Enforced by Other

A party who has signed a written contract may be compelled specifically to perform it, though the other party has not signed it, if the latter has performed, or offers to perform, it on his part and the case is otherwise proper for enforcing specific performance.

(Code 1923, §6831; Code 1940, T. 9, §53.)

§ 8-1-45 Imposition of Penalty or Liquidation of Damages Not Bar to Specific Performance

A contract otherwise proper to be specifically enforced may be thus enforced, though a penalty is imposed or the damages are liquidated for its breach and the party in default is willing to pay the same.

(Code 1923, §6832; Code 1940, T. 9, §54.)

§ 8-1-46 Obligation on Real Estate Specifically Enforced Against Person Subsequently Claiming Title

Whenever an obligation in respect to real property would be specifically enforced against a particular person, it may be in like manner enforced against any other person claiming under him by a title created subsequently to the obligation, except a purchaser or encumbrancer in good faith and for value, and except, also, that any such person may exonerate himself by conveying all his estate to the person entitled to enforce the obligation.

(Code 1923, §6836; Code 1940, T. 9, §58.)

§ 8-1-47 Presumptions as to Availability of Specific Performance as Remedy

It is to be presumed that the breach of an agreement to transfer real property cannot be adequately relieved by pecuniary compensation and that the breach of an agreement to transfer personal property can be thus relieved.

(Code 1923, §6830; Code 1940, T. 9, §52.)

Article 4 Hirings

§ 8-1-60 Thing Let for Particular Purpose to Be so Used

When a thing is let for a particular purpose, the lessee must not use it for any other purpose; and if he does, he is liable to the lessor for all damages resulting from such use, or the lessor may treat the contract as thereby rescinded.

(Code 1923, §6273; Code 1940, T. 9, §7.)

§ 8-1-61 Lessee to Use Ordinary Care

The lessee of a thing must use ordinary care for its preservation in safety and good condition.

(Code 1923, §6271; Code 1940, T. 9, §5.)

§ 8-1-62 Lessee to Repair Injuries

The lessee of a thing must repair all deteriorations or injuries thereto occasioned by the want of ordinary care.

(Code 1923, §6272; Code 1940, T. 9, §6.)

§ 8-1-63 When Lessor May Reclaim Before End of Term

The lessor of a thing may terminate the hiring and reclaim the thing before the end of the term agreed upon:

(1) When the lessee uses or permits a use of the thing hired in a manner contrary to the agreement of the parties; or

(2) When the lessee does not, within a reasonable time, after request, make such repair as he is bound to make.

(Code 1923, §6274; Code 1940, T. 9, §8.)

Article 6 Bidding at Public Sales

§ 8-1-100 Consideration for Bidding or Not Bidding at Public Sale Prohibited

No person shall receive, directly or indirectly, any money or thing of value in consideration of bidding or not bidding at any public sale within this state.

(Code 1852, §1557; Code 1867, §1869; Code 1876, §2127; Code 1886, §1738; Code 1896, §2159; Code 1907, §3334; Code 1923, §6804; Code 1940, T. 9, §25.)

§ 8-1-101 Bids on Public Lands Under Agreement to Transfer Same Prohibited

No person shall bid off any of the public lands within this state under an agreement, previously made, to transfer the same, or any part thereof, or interest therein, for a premium or advance to be paid therefor.

(Code 1852, §1558; Code 1867, §1870; Code 1876, §2128; Code 1886, §1739; Code 1896, §2160; Code 1907, §3335; Code 1923, §6805; Code 1940, T. 9, §26.)

§ 8-1-102 Contracts Violating Sections 8-1-100 and 8-1-101 Void

(a) All contracts in violation of the provisions of Sections 8-1-100 and 8-1-101 are void.

(b) Any person violating such provisions forfeits double the amount of money or value of the thing received, agreed to be received or paid, to the use of the person suing for the same, and anyone interested in the sale may sue therefor.

(Code 1852, §1559; Code 1867, §1871; Code 1876, §2129; Code 1886, §1740; Code 1896, §2161; Code 1907, §3336; Code 1923, §6806; Code 1940, T. 9, §27.)

§ 8-1-103 Selling Improvements on Public Lands by Person Making Same

Nothing in Sections 8-1-100 and 8-1-101 must be so construed as to prevent any person who has made improvements on public lands from selling the same and receiving the purchase money therefor.

(Code 1852, §1561; Code 1867, §1873; Code 1876, §2130; Code 1886, §1741; Code 1896, §2162; Code 1907, §3337; Code 1923, §6807; Code 1940, T. 9, §28.)

Article 7 Future Delivery

§ 8-1-120 Definitions

For the purposes of this article, the following terms shall have the meanings respectively ascribed to them by this section:

(1) CONTRACT OF SALE. Such term shall include sales, agreements of sale, and agreements to sell.

(2) PERSON. Such term shall be construed to import the plural or singular, as the case demands, and shall include individuals, associations, partnerships, and corporations.

(Acts 1915, No. 791, p. 913; Code 1923, §6815; Code 1940, T. 9, §29.)

§ 8-1-121 Certain Contracts for Future Delivery Void; Exceptions

(a) All contracts of sale for the future delivery of any commodity, article, personal property, stock or bond, wherein the parties thereto do not intend a delivery of the article contracted for, but do intend to gamble on the difference between the contract price and some subsequent market price, shall be illegal and void, and no action shall be maintained in any court to enforce such contract or to compel payment of any note or security given in payment or settlement of the same.

(b) The provisions of subsection (a) of this section shall not be construed so as to apply to any person, firm, corporation or his or their agent, engaged in the business of manufacturing or wholesale merchandising in the purchase or sale of the necessary commodities required in the ordinary course of their business.

(Code 1907, §§3349, 3350; Acts 1915, No. 791, p. 913; Code 1923, §§6816, 6818; Code 1940, T. 9, §§30, 32.)

§ 8-1-122 Failure to Furnish Statement on Future Delivery Prima Facie Evidence of Illegal Contract

Every person shall furnish, upon demand, to any principal for whom such person has executed any order for the actual purchase or sale of any commodities, stocks, or bonds for future delivery, a written statement containing the names of the persons from whom such property was bought or to whom it has been sold, as the fact may be, the time when and the place where, and if the person shall refuse or neglect to furnish such statement within 24 hours after such demand, such refusal or neglect shall be prima facie evidence that such purchase or sale was an illegal contract declared void by this article.

(Acts 1915, No. 791, p. 913; Code 1923, §6817; Code 1940, T. 9, §31.)

§ 8-1-123 Failure to Deliver After Deposit of Margins Prima Facie Evidence of Void Contract

Proof that anything of value agreed to be sold and delivered was not actually delivered at the time of making the agreement to sell and deliver and that one of the parties to such agreement deposited or secured, or agreed to deposit or secure, what are commonly called “margins” shall constitute prima facie evidence of a contract declared void by this article.

(Code 1907, §3351; Acts 1915, No. 791, p. 913; Code 1923, §6819; Code 1940, T. 9, §33.)

§ 8-1-124 Contracts for Future Delivery of Cotton Not Made Subject to Federal Statutes Prima Facie Evidence of Void Contract

Proof of the fact that any contract for the future delivery of cotton was not made subject to the provisions of any federal statute relating thereto, including such amendments as may hereafter be made to such statutes by Congress, shall be prima facie evidence of an illegal contract declared void by this article.

(Acts 1915, No. 791, p. 913; Code 1940, T. 9, §33.)

§ 8-1-125 Making or Assisting in Making Contract for Future Delivery When Actual Delivery Not Intended - Profit Intended to Be Paid in Money on Day of Delivery

If any person shall become a party to any contract for the sale and future delivery of any article or personal property in which it is not intended by the parties thereto that such property shall be actually delivered, but rather the difference between the contract price and the market price on the day of delivery shall be paid in money, if any person shall be the agent, directly or indirectly, of any such party in making, furthering, or effectuating the same, or if any agent or officer of any corporation shall knowingly aid in any way or manner in making or furthering any such contract to which such corporation shall be a party, he shall be guilty of a misdemeanor and on conviction shall be fined not less than $100 nor more than $500, and may be sentenced to hard labor for not less than one month nor more than six months.

(Code 1907, §6473; Code 1923, §3576; Code 1940, T. 9, §35.)

§ 8-1-126 Making or Assisting in Making Contract for Future Delivery When Actual Delivery Not Intended - Price Based on Bona Fide Sales on Exchange or Board of Trade Without Making Execution on Exchange or Board of Trade

(a) Any person, either as agent or principal, who enters into or assists in making any contract of sale for the future delivery of any commodity, article, personal property, stock or bond, wherein no delivery is intended by the parties thereto, and uses as a basis for fixing the price or prices in such contract the bona fide sales made on any exchange or board of trade, without making a bona fide execution of such contract on such exchange or board of trade, shall be guilty of a misdemeanor.

(b) Upon conviction thereof, such a person shall be fined in a sum not to exceed $1,000 or be imprisoned in the county jail not exceeding two years, and any person or persons who shall be guilty of a second offense under this section may be, upon conviction, both fined and imprisoned, in the discretion of the court, in addition to the penalty above described, and if a corporation, it shall be liable to forfeiture of all its rights and privileges as such.

(c) The continuance of such establishment after the first conviction shall be deemed a second offense.

(Acts 1915, No. 791, p. 913; Code 1923, §3577; Code 1940, T. 9, §36.)

§ 8-1-127 Futures Contracts Made in Another State

If any person shall consent while in this state to become a party to any futures contract contrary to Section 8-1-126, made in another state, or if any person shall become, as agent of any person or corporation, a party to any such contract made in another state or in this state do any act or in any way aid in the making or furthering such contract so made in another state, he shall be guilty of a misdemeanor and, on conviction, shall be fined not less than $50 nor more than $200 and may be sentenced to hard labor for not less than one month nor more than six months.

(Code 1907, §6474; Code 1923, §3578; Code 1940, T. 9, §37.)

§ 8-1-128 Establishing Office to Engage in Business of “Futures”

If any person, corporation or other association of persons, either as principals or agents, shall establish or open an office or other place of business in this state for the purpose of carrying on or engaging in any business of making contracts to sell and deliver any cotton, Indian corn, wheat, rye, oats, tobacco, meal, lard, bacon, salt pork, salt fish, beef cattle, sugar, coffee, stocks, bonds, or choses in action at a place and a time specified and agreed upon therein to any other person, whether the person to whom such article is so agreed to be sold and delivered shall be a party to such contract or not, when in fact and notwithstanding the terms expressed in such contracts it is not intended by the parties thereto that the articles or things so agreed to be sold and delivered shall be actually delivered or the value thereof paid, but rather it is intended and understood by them that money or other thing of value shall be paid to the one party by the other, or to a third party, the party to whom such payment of money or other thing of value shall be made to depend and the amount of such money or other thing of value so to be paid to depend upon whether the market price or value of the article so agreed to be sold and delivered is greater or less at the time and place so specified than the price stipulated to be paid and received for the articles so to be sold and delivered, or for making contracts commonly called “futures,” as to the several articles and things hereinbefore specified, or any of them, by whatever name called, he shall be guilty of a misdemeanor, and, upon conviction thereof, shall be fined not less than $100 and may be sentenced to hard labor for not less than one month, and upon a second conviction, he shall be fined not less than $500 and sentenced to hard labor for not less than six months.

(Code 1907, §6475; Code 1923, §3579; Code 1940, T. 9, §38.)

§ 8-1-129 Proof of Establishment of Place to Publish Commodities Information Prima Facie Evidence of Guilt

Proof that any person, corporation, or other association of persons, either as principals or agents, has established an office or place where are posted or published from information received the fluctuating prices of grain, cotton, provisions, stocks, bonds, and other commodities or of any one or more of the same shall constitute prima facie evidence of being guilty of violating this article.

(Code 1907, §6477; Code 1923, §3581; Code 1940, T. 9, §40.)

§ 8-1-130 Persons Involved in Futures Contracts Not Excused from Testifying; Participation Prima Facie Evidence of Guilt

(a) No person shall be excused on any prosecution under this article from testifying touching anything done by himself or others contrary to the provisions of this article; but no disclosures made by the witness upon such examination shall be used against him in any penal or criminal prosecution, and he shall be altogether pardoned of the offense so done or participated in by him.

(b) In all such prosecutions proof that the defendant was a party to a contract as agent or principal to sell and deliver any article, thing or property specified or named in this article, that he was agent, directly or indirectly, of any party in making, furthering, or effectuating the same, or that he was the agent or officer of any corporation or association or person in making, furthering, or effectuating the same and that the article, thing, or property agreed to be sold and delivered was not actually delivered and that settlement was made or agreed to be made upon the difference in value of such article, thing, or property shall constitute against such defendant prima facie evidence of guilt.

(Code 1907, §6476; Code 1923, §3580; Code 1940, T. 9, §39.)

§ 8-1-131 Money Paid on Illegal Contract May Be Recovered

Any money or thing paid or delivered to any person whether as principal, agent, or broker in furtherance or settlement of any contract made in violation of this article may be recovered in any action brought by the person paying the same, his wife, or child.

(Code 1907, §3353; Code 1923, §6820; Code 1940, T. 9, §34.)

Article 8 Gaming and Wagering

§ 8-1-150 Contracts Founded Upon Gambling Consideration Void; Recovery of Money Paid or Things of Value Delivered

(a) All contracts founded in whole or in part on a gambling consideration are void. Any person who has paid any money or delivered any thing of value lost upon any game or wager may recover such money, thing, or its value by an action commenced within six months from the time of such payment or delivery.

(b) Any other person may also recover the amount of such money, thing, or its value by an action commenced within 12 months after the payment or delivery thereof for the use of the wife or, if no wife, the children or, if no children, the next of kin of the loser.

(c) A judgment under either subsection (a) or (b) for the amount of money paid, thing delivered, or its value is a good defense to any action brought for such money, thing, or its value under the provisions of the other subsection.

(d) A judgment recovered under the provisions of this section is a defense to any proceeding on any garnishment served after the recovery of such judgment, and the court may make any order staying proceedings as may be necessary to protect the rights of the defendant.

(Code 1852, §§1562-1564, 1567; Code 1867, §§1874-1876, 1879; Code 1876, §§2131-2133, 2136; Code 1886, §§1742-1744, 1747; Code 1896, §§2163-2165, 2168; Code 1907, §§3338-3340, 3343; Code 1923, §§6808-6810, 6813; Code 1940, T. 9, §§44-46, 49.)

§ 8-1-151 Creditor of Losing Party Under Gambling Contract May Garnish Winner

(a) Any creditor of a losing party under a gambling contract may garnish the winner as other debtors are garnished at any time within two years from the payment of such money or delivery of such thing, and if such garnishee fails to appear, judgment may be entered against him as against other garnishees failing to answer, but the answer of a garnishee shall not be evidence against him in a criminal prosecution.

(b) A judgment recovered by a creditor under the provisions of this section is a defense to any action brought by any person under the provisions of Section 8-1-150.

(Code 1852, §§1565, 1566; Code 1867, §§1877, 1878; Code 1876, §§2134, 2135; Code 1886, §§1745, 1746; Code 1896, §§2166, 2167; Code 1907, §§3341, 3342; Code 1923, §§6811, 6812; Code 1940, T. 9, §§47, 48.)

§ 8-1-152 Answers in Actions Under Article Not to Be Used in Criminal Prosecutions

In any action brought under the provisions of this article either party may be examined on interrogatories as in other cases, but the answer of the party cannot be used against him in any criminal prosecution.

(Code 1852, §1570; Code 1867, §1881; Code 1876, §2137; Code 1886, §1748; Code 1896, §2169; Code 1907, §3344; Code 1923, §6814; Code 1940, T. 9, §50.)

Article 9 Insane Persons

§ 8-1-170 Contracts of Insane Person Void; Exceptions; Liability for Necessaries Furnished

Except as provided in Sections 8-1-171 and 8-1-172, and contracts of fire and tornado insurance wherein the insane person is the beneficiary, all contracts of an insane person are void; but he and his estate shall be liable for necessaries furnished him, which may be recovered upon the same proof and upon the same conditions as if furnished to an infant.

(Code 1907, §3348; Code 1923, §6824; Acts 1935, No. 224, p. 616; Code 1940, T. 9, §43.)

§ 8-1-171 Conveyance of Real Estate by Insane Person Not Void If Made in Good Faith

(a) Whenever any person shall purchase in good faith and for a valuable consideration real estate from an insane person without notice of such insanity, such contract and conveyance shall not be void; but such insane person may recover from the vendee, or those claiming under him, the difference between the market value of such real estate at the time of the sale and the price paid therefor, with interest thereon, and shall have a lien on such real estate to secure the same.

(b) Purchasers from such vendee without notice of the insanity of the original vendor shall be protected in like manner and have the benefits of this section.

(Code 1907, §3347; Code 1923, §6822; Code 1940, T. 9, §41.)

§ 8-1-172 Mortgage Taken in Good Faith on Real Estate of Insane Person Not Void

(a) When any person shall in good faith take a mortgage on real estate from an insane person without notice of the insanity, the mortgage deed shall not be void; but the insane person may redeem the property so mortgaged at any time prior to a foreclosure by paying to the mortgagee the amount actually received by the insane person at the time of executing the mortgage, or any balance due thereon, with interest thereon to the date of redemption.

(b) If the mortgage shall have been foreclosed, the insane person may redeem from the vendee at the foreclosure sale, or those claiming under the vendee, at any time within 180 days from foreclosure for residential property on which a homestead exemption was claimed in the tax year during which the foreclosure occurred, or at any time within one year from foreclosure for all other property, by paying to the vendee, or those claiming under the vendee, the amount which the vendee at the mortgage foreclosure sale actually paid at the sale for the property, with interest thereon at the rate of eight percent per annum to the date of redemption, together with all lawful charges as provided for by law.

(Code 1923, §6823; Code 1940, T. 9, §42; Act 2015-79, §1.)

Article 10 Restrictive Covenants,

§ 8-1-190 Void Contracts; Contracts Allowed to Preserve Protectable Interests

(a) Every contract by which anyone is restrained from exercising a lawful profession, trade, or business of any kind otherwise than is provided by this section is to that extent void.

(b) Except as otherwise prohibited by law, the following contracts are allowed to preserve a protectable interest:

(1) A contract between two or more persons or businesses or a person and a business limiting their ability to hire or employ the agent, servant, or employees of a party to the contract where the agent, servant, or employee holds a position uniquely essential to the management, organization, or service of the business.

(2) An agreement between two or more persons or businesses or a person and a business to limit commercial dealings to each other.

(3) One who sells the good will of a business may agree with the buyer to refrain from carrying on or engaging in a similar business and from soliciting customers of such business within a specified geographic area so long as the buyer, or any entity deriving title to the good will from that business, carries on a like business therein, subject to reasonable time and place restraints. Restraints of one year or less are presumed to be reasonable.

(4) An agent, servant, or employee of a commercial entity may agree with such entity to refrain from carrying on or engaging in a similar business within a specified geographic area so long as the commercial entity carries on a like business therein, subject to reasonable restraints of time and place. Restraints of two years or less are presumed to be reasonable.

(5) An agent, servant, or employee of a commercial entity may agree with such entity to refrain from soliciting current customers, so long as the commercial entity carries on a like business, subject to reasonable time restraints. Restraints of 18 months or for as long as post-separation consideration is paid for such agreement, whichever is greater, are presumed to be reasonable.

(6) Upon or in anticipation of a dissolution of a commercial entity, partners, owners, or members, or any combination thereof, may agree that none of them will carry on a similar commercial activity in the geographic area where the commercial activity has been transacted.

(Act 2015-465, §1.)

§ 8-1-191 Protectable Interests

(a) A protectable interest includes all of the following:

(1) Trade secrets, as defined in Section 8-27-2.

(2) Confidential information, including, but not limited to, pricing information and methodology; compensation; customer lists; customer data and information; mailing lists; prospective customer information; financial and investment information; management and marketing plans; business strategy, technique, and methodology; business models and data; processes and procedures; and company provided files, software, code, reports, documents, manuals, and forms used in the business that may not otherwise qualify as a trade secret but which are treated as confidential to the business entity, in whatever medium provided or preserved, such as in writing or stored electronically.

(3) Commercial relationships or contacts with specific prospective or existing customers, patients, vendors, or clients.

(4) Customer, patient, vendor, or client good will associated with any of the following:

a. An ongoing business, franchise, commercial, or professional practice, or trade dress.

b. A specific marketing or trade area.

(5) Specialized and unique training involving substantial business expenditure specifically directed to a particular agent, servant, or employee; provided that such training is specifically set forth in writing as the consideration for the restraint.

(b) Job skills in and of themselves, without more, are not protectable interests.

(Act 2015-465, §2.)

§ 8-1-192 Requirements

In order to be valid, any contract or agreement executed pursuant to this article shall be reduced to writing, signed by all parties, and be supported by adequate consideration.

(Act 2015-465, §3.)

§ 8-1-193 Voidable Restraints

If a contractually specified restraint is overly broad or unreasonable in its duration, a court may void the restraint in part and reform it to preserve the protectable interest or interests. If a contractually specified restraint does not fall within the limited exceptions set out in subsection (b) of Section 8-1-190, a court may void the restraint in its entirety.

(Act 2015-465, §4)

§ 8-1-194 Burden of Proof

The party seeking enforcement of the covenant has the burden of proof on every element. The party resisting enforcement of the covenant has the burden of proving the existence of undue hardship, if raised as a defense.

(Act 2015-465, §5.)

§ 8-1-195 Remedies and Defenses

(a) The remedies available for breach of an agreement subject to this article are:

(1) Such injunctive and other equitable relief as may be appropriate with respect to any actual or threatened breach.

(2) The actual damages suffered as a result of the breach or lawful liquidated damages if provided in the contract.

(3) Any remedies available in contract law, including attorneys’ fees or costs, if provided for in the contract or otherwise provided for by law.

(b) Nothing in this article shall limit the availability of any defense otherwise available in law or equity.

(Act 2015-465, §6.)

§ 8-1-196 Professional Exemptions

Nothing in this article shall be construed to eliminate any professional exemption recognized by Alabama law.

(Act 2015-465, §7.)

§ 8-1-197 Legislative Intent; Application

It is hereby declared that this article expresses fundamental public policies of the State of Alabama. Therefore, this article shall govern and shall be applied instead of any foreign laws that might otherwise be applicable in those instances when the application of those foreign laws would violate a fundamental public policy expressed in this article.

(Act 2015-465, §8.)

Article 11 Alabama Non-disparagement Obligations Contract

§ 8-1-220 Short Title

This article shall be known and may be cited as the Alabama Non-Disparagement Obligations Act.

(Act 2021-503, §1.)

§ 8-1-221 Definitions

As used in this article, the following terms shall have the following meanings:

(1) COVERED CONTRACT. Any written employment separation, termination, or post-employment settlement or release agreement written solely for that purpose; any written business relationship termination agreement written solely for that purpose; and any written settlement between parties to a legal dispute written solely for that purpose, whether before, during, or after litigation, and the provisions thereof.

(2) DISPARAGING STATEMENT. Any statement that does any of the following:

a. Discredits or detracts from the reputation of a person’s property, product, services, or business.

b. Diminishes or depreciates a person by direct or indirect comparisons to anything invidious, scandalous, criminal, or loathsome.

c. Raises doubts or questions about the quality, integrity, honesty, or character of a person or the person’s affiliations.

d. Discredits or detracts from the reputation of another’s character, property, product, or business by disclosing truthful but private information.

e. Discredits or detracts from the reputation of another’s character, property, product, or business by disclosing truthful, but non-public information, or information gained within the context of a fiduciary relationship between the parties not otherwise protected by a trade secret statute.

f. Is knowingly or recklessly made by a party that has clear and direct information that the statement was plainly false or misleading by its unreasonable incompleteness and that the communication of the misleading information would cause specific loss.

(3) LIQUIDATED DAMAGES. The dollar sum that the parties have by the covered contract fixed or assessed as damages to be paid as compensation for a breach of contract.

(4) PERSON. An individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, public corporation, government, government subdivision, agency, or instrumentality, or any other legal or commercial entity.

(5) STATEMENT. Spoken words, remarks, comments, publications, opinions, and other expressions delivered orally, in writing, or through websites, blogs, postings to the Internet, emails, texts, or by other electronic means, whether done publicly or privately in one’s own name, anonymously, or through the use of a pseudonym.

(Act 2021-503, §2.)

§ 8-1-222 Validity and Enforceability of Non-disparagement Obligations

(a) Non-disparagement obligations in covered contracts, whether unilateral, bilateral, or multilateral, shall be valid and enforceable for any period of time agreed to by the parties.

(b) Except as otherwise prohibited by law, any covered contract between two or more persons or parties obligating one or more parties to the covered contract not to disparage one or more other parties to the covered contract is only enforceable by a civil action where all of the following elements are present:

(1) The covered contract contains language prohibiting one or more of the parties from disparaging one or more of the other parties, and may include specifically named individuals who are affiliated with, are employed by, or are owners of one or more of the parties.

(2) A disparaging statement is made by the person or party who is obligated not to make such statements.

(3) Either of the following occur:

a. The communication of the disparaging statement proximately results in identifiable damage to the plaintiff.

b. The terms of the covered contract automatically activate a liquidated damages provision, as defined in Section 8-1-221.

(c) Nothing in this article creates any cause of action for disparagement at law or equity absent a written non-disparagement obligation in the covered contract between the parties.

(d) Nothing in this article has any effect on any other term, condition, or covenant in a covered contract that is not specifically stated in this article.

(e) Nothing in this article prevents parties from having bilateral, unilateral, or multilateral non-disparagement obligations in other contracts, including, but not limited to, nondisclosure agreements.

(Act 2021-503, §3.)

§ 8-1-223 Contracts to Be in Writing, Signed, and Supported by Adequate Consideration

In order to be valid and enforceable, a covered contract shall be in writing, signed by all parties, and supported by adequate consideration.

(Act 2021-503, §4.)

§ 8-1-224 Liability for Breach of Non-disparagement Obligation

In order to be enforceable, a covered contract shall state in writing that the obligated party may not be held liable for breach of the non-disparagement obligation if the obligated party makes an otherwise disparaging statement in good faith and solely for any of the following purposes:

(1) To communicate with a law enforcement officer acting within the line and scope of the officer’s law enforcement duties that a violation of the law has occurred or is occurring.

(2) To communicate with a government regulator acting within the line and scope of the regulator’s regulatory duties that a violation of the law has occurred or is occurring.

(3) To respond to a lawfully served judicial, grand jury, or other lawful subpoena.

(4) To testify in a judicial or administrative proceeding in response to a lawfully served subpoena or an order of a court of competent jurisdiction.

(5) To confer with the obligated party’s attorney for the purpose of obtaining legal advice or representation.

(6) To respond to lawful discovery in a judicial or administrative action; provided the disparaging statement is either ordered by a court of competent jurisdiction or made in compliance with a protective order entered by the same court.

(7) To prosecute or defend a civil action between or among parties to a covered contract; provided the party making the disparaging statement attempts to and, if permitted by law, does file the disparaging statement and any related pleading under seal or in compliance with a protective order entered by a court of competent jurisdiction in the civil action.

(8) To exercise federally protected statutory rights, including, but not limited to, the exercise of rights under the National Labor Relations Act or the Civil Rights Act of 1964, as amended.

(Act 2021-503, §5.)

§ 8-1-225 Enforcement Requirements; Sealing of Pleadings and Motions

(a) A covered contract containing a non-disparagement obligation in writing requires the parties to the covered contract to file under seal all initial and responsive pleadings and motions, including, but not limited to, motions under Alabama Rule of Civil Procedure 65 seeking enforcement of a covered contract.

(b) A court of competent jurisdiction may exercise its judgment regarding what, if any, filings filed under seal pursuant to this section must remain under seal. In making this judgment, the court shall consider the extent to which unsealing any or all parts of the record would cause, perpetuate, or increase any injury to any of the litigants or related third parties.

(c) If any party files a motion to seal the pleadings, motions, or other filings associated with a claim under this article, the court shall seal or continue to seal the pleadings, motions, or other filings absent a showing by the non-moving party of a compelling public interest to partially or completely unseal the pleadings, motions, or other filings.

(d) To the extent allowed by law, the parties may include in a covered contract a requirement that notice be provided prior to providing to outside third parties information protected under this article.

(e) In a civil action for breach of a covered contract in which the only damage pleaded and requested by the plaintiff is liquidated damages, there shall be no required proof of actual damage. As used in this subsection, a request for an award of attorneys’ fees, costs, and expenses is not considered damages or liquidated damages.

(Act 2021-503, §6.)

§ 8-1-226 Severability of Unenforceable Provisions

In the event any provision or provisions of a covered contract are found by a court of competent jurisdiction to be unenforceable as a matter of law, such provisions shall be severable from the covered contract and shall not affect the enforceability of the remainder of the covered contract.

(Act 2021-503, §7.)

§ 8-1-227 Applicability of Article

(a) Nothing in this article affects any defense or immunity otherwise available under applicable law.

(b) Nothing in this article shall reduce, void, or diminish any obligations or contractual obligations of any kind or nature between shareholders, owners, members, and officers of any entity that is governed by Title 10A.

(c) Parties to a covered contract may disclaim the applicability of this article to their covered contract and thereby make this article inapplicable to their otherwise covered contract, provided the disclaimer expressly and plainly states that the parties to the covered contract are knowingly waiving this article.

(d) If the parties exercise the right to disclaim the provisions of this article under subsection (c), this article shall not be the basis for any interpretation or determination of enforceability of any of the provisions of the otherwise covered contract entered into by the parties.

(Act 2021-503, §8.)

§ 8-1-228 Affirmative Defenses

(a) In an action for breach of a contract governed by this article when actual damages are sought, a defendant may assert affirmative defenses available under the law.

(b) If actual damages are sought, the defendant may also assert the following additional affirmative defenses:

(1) The disparaging statement was made in good faith.

(2) The disparaging statement was made by mistake.

(3) The disparaging statement caused no harm to the plaintiff.

(4) The disparaging statement was retracted in such a way as to eliminate or reduce the harm to the plaintiff.

(c) Unless it is specifically provided in the covered contract, none of the additional affirmative defenses apply to negate or diminish the effects or full enforcement of a liquidated damages provision in the covered contract.

(Act 2021-503, §9.)

§ 8-1-229 Remedies

Upon a finding of whether there has been a breach of a contract governed by this article, the court may order and award any of the following:

(1) Injunctive and other equitable relief as may be appropriate with respect to any actual or threatened breach.

(2) The actual damages recoverable under existing law that are suffered as a result of the breach of contract.

(3) Liquidated damages, but only if provided for in the covered contract.

(4) Reasonable attorney’s fees and costs, but only if provided for in the covered contract.

(Act 2021-503, §10.)

§ 8-1-230 Prospective Application

Nothing in this article shall affect any agreement executed prior to January 1, 2022.

(Act 2021-503, §11.)

Chapter 1A Uniform Electronic Transactions Act

§ 8-1A-1 Short Title

This chapter may be cited as the Uniform Electronic Transactions Act.

(Act 2001-458, p. 597, §1.)

§ 8-1A-2 Definitions

As used in this chapter, each of the following words have the following meanings:

(1) AGREEMENT. The bargain of the parties in fact, as found in their language or inferred from other circumstances and from rules, regulations, and procedures given the effect of agreements under laws otherwise applicable to a particular transaction.

(2) AUTOMATED TRANSACTION. A transaction conducted or performed, in whole or in part, by electronic means or electronic records, in which the acts or records of one or both parties are not reviewed by an individual in the ordinary course in forming a contract, performing under an existing contract, or fulfilling an obligation required by the transaction.

(3) COMPUTER PROGRAM. A set of statements or instructions to be used directly or indirectly in an information processing system in order to bring about a certain result.

(4) CONSUMER. An individual who obtains, through a transaction, products or services which are used primarily for personal, family, or household purposes, and also means the legal representative of such an individual.

(5) CONTRACT. The total legal obligation resulting from the parties’ agreement as affected by this chapter and other applicable law.

(6) ELECTRONIC. Relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, telephonic, or similar capabilities.

(7) ELECTRONIC AGENT. A computer program or an electronic or other automated means used independently to initiate an action or respond to electronic records or performances in whole or in part, without review or action by an individual.

(8) ELECTRONIC RECORD. A record created, generated, sent, communicated, received, or stored by electronic means.

(9) ELECTRONIC SIGNATURE. An electronic sound, symbol, or process attached to or logically associated with a record and executed or adopted by a person with the intent to sign the record.

(10) GOVERNMENTAL AGENCY. An executive, legislative, or judicial agency, department, board, commission, authority, institution, or instrumentality of the federal government or of a state or of a county, municipality, or other political subdivision of a state.

(11) INFORMATION. Data, text, images, sounds, codes, computer programs, software, databases, or the like.

(12) INFORMATION PROCESSING SYSTEM. An electronic system for creating, generating, sending, receiving, storing, displaying, or processing information.

(13) PERSON. An individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, governmental agency, public corporation, or any other legal or commercial entity.

(14) RECORD. Information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.

(15) SECURITY PROCEDURE. A procedure employed for the purpose of verifying that an electronic signature, record, or performance is that of a specific person or for detecting changes or errors in the information in an electronic record. The term includes a procedure that requires the use of algorithms or other codes, identifying words or numbers, encryption, or callback or other acknowledgment procedures.

(16) STATE. A state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States. The term includes an Indian tribe or band, or Alaskan native village, which is recognized by federal law or formally acknowledged by a state.

(17) TRANSACTION. An action or set of actions occurring between two or more persons relating to the conduct of business, commercial, or governmental affairs.

(Act 2001-458, p. 597, §1.)

§ 8-1A-3 Scope

(a) Except as otherwise provided in subsection (b), this chapter applies to electronic records and electronic signatures relating to a transaction.

(b) This chapter does not apply to a transaction to the extent it is governed by any of the following:

(1) A law governing the creation and execution of wills, codicils, or testamentary trusts.

(2) Title 7, the Uniform Commercial Code, other than Sections 7-1-107 and 7-1-206, Article 2, and Article 2A.

(3) A statute, regulation, or other rule of law governing adoption, divorce, or other matters of family law.

(c) This chapter does not apply to any of the following:

(1) Court orders or notices, or official court documents, including briefs, pleadings, and other writings, required to be executed in connection with court proceedings.

(2) Any notice of any of the following:

a. The cancellation or termination of utility services, including water, heat, and power.

b. Default, acceleration, repossession, foreclosure, or eviction, or the right to cure, under a credit agreement secured by, or a rental agreement for, a primary residence of an individual.

c. The cancellation or termination of health insurance or benefits or life insurance benefits, excluding annuities.

d. Recall of a product, or material failure of a product, that risks endangering health or safety.

(3) Any document required to accompany any transportation or handling of hazardous materials, pesticides, or other toxic or dangerous materials.

(d) This chapter applies to an electronic record or electronic signature otherwise excluded from the application of this chapter under subsection (b) or (c) to the extent it is governed by a law other than those specified in subsection (b) or (c).

(e) A transaction subject to this chapter is also subject to other applicable substantive law.

(f) A governmental agency which is a party to a transaction subject to this chapter is also further subject to both of the following:

(1) The records retention requirements for state government records established by the State Records Commission.

(2) The records retention requirements for local government records established by the Local Government Records Commission.

(Act 2001-458, p. 597, §1.)

§ 8-1A-4 Prospective Application

This chapter applies to any electronic record or electronic signature created, generated, sent, communicated, received, or stored on or after January 1, 2002.

(Act 2001-458, p. 597, §1.)

§ 8-1A-5 Use of Electronic Records and Electronic Signatures; Variation by Agreement

(a) This chapter does not require a record or signature to be created, generated, sent, communicated, received, stored, or otherwise processed or used by electronic means or in electronic form.

(b) This chapter applies only to transactions between parties each of which has agreed to conduct transactions by electronic means. Whether the parties agree to conduct a transaction by electronic means is determined from the context and surrounding circumstances, including the parties’ conduct.

(c) A party that agrees to conduct a transaction by electronic means may refuse to conduct other transactions by electronic means. The right granted by this subsection may not be waived by agreement.

(d) Except as otherwise provided in this chapter, the effect of any of its provisions may be varied by agreement. The presence in certain provisions of this chapter of the words “unless otherwise agreed,” or words of similar import, does not imply that the effect of other provisions may not be varied by agreement.

(e) Whether an electronic record or electronic signature has legal consequences is determined by this chapter and other applicable law.

(Act 2001-458, p. 597, §1.)

§ 8-1A-6 Construction and Application

This chapter shall be construed and applied in each of the following manners:

(1) To facilitate electronic transactions consistent with other applicable law.

(2) To be consistent with reasonable practices concerning electronic transactions and with the continued expansion of those practices.

(3) To effectuate its general purpose to make uniform the law with respect to the subject of this chapter among states enacting it.

(Act 2001-458, p. 597, §1.)

§ 8-1A-7 Legal Recognition of Electronic Records, Electronic Signatures, and Electronic Contracts

(a) A record or signature may not be denied legal effect or enforceability solely because it is in electronic form.

(b) A contract may not be denied legal effect or enforceability solely because an electronic record was used in its formation.

(c) If a law requires a record to be in writing, an electronic record satisfies the law.

(d) If a law requires a signature, an electronic signature satisfies the law.

(Act 2001-458, p. 597, §1.)

§ 8-1A-8 Provision of Information in Writing; Presentation of Records

(a) Subject to subsection (e), if parties have agreed to conduct a transaction by electronic means and a law requires a person to provide, send, or deliver information in writing to another person, the requirement is satisfied if the information is provided, sent, or delivered, as the case may be, in an electronic record capable of retention by the recipient at the time of receipt. An electronic record is not capable of retention by the recipient if the sender or its information processing system inhibits the ability of the recipient to print or store the electronic record.

(b) If a law other than this chapter requires a record to be posted or displayed in a certain manner, to be sent, communicated, or transmitted by a specified method, or to contain information that is formatted in a certain manner, the following rules apply:

(1) The record shall be posted or displayed in the manner specified in the other law.

(2) Except as otherwise provided in subdivision (2) of subsection (d), the record shall be sent, communicated, or transmitted by the method specified in the other law.

(3) The record shall contain the information formatted in the manner specified in the other law.

(c) If a sender inhibits the ability of a recipient to store or print an electronic record, the electronic record is not enforceable against the recipient.

(d) The requirements of this section may not be varied by agreement, but both of the following apply:

(1) To the extent a law other than this chapter requires information to be provided, sent, or delivered in writing but permits that requirement to be varied by agreement, the requirement under subsection (a) that the information be in the form of an electronic record capable of retention may also be varied by agreement.

(2) A requirement under a law other than this chapter to send, communicate, or transmit a record by first-class mail, postage prepaid or regular United States mail, may be varied by agreement to the extent permitted by the other law.

(e)(1) If a statute, regulation, or other rule of law requires that information relating to a transaction or transactions be provided or made available to a consumer in writing, the use of an electronic record to provide or make available, whichever is required, such information satisfies the requirement that such information be in writing if each of the following is met:

a. The consumer has affirmatively consented to such use and has not withdrawn such consent.

b. The consumer, prior to consenting, is provided with a clear and conspicuous statement that does all of the following:

1. Informs the consumer of both of the following:

(i) Any right or option of the consumer to have the record provided or made available on paper or in nonelectronic form.

(ii) The right of the consumer to withdraw the consent to have the record provided or made available in an electronic form and of any conditions, consequences (which may include termination of the parties’ relationship), or fees in the event of such withdrawal.

2. Informs the consumer of whether the consent applies:

(i) Only to the particular transaction which gave rise to the obligation to provide the record.

(ii) To identified categories of records that may be provided or made available during the course of the parties’ relationship.

3. Describes the procedures the consumer shall use to withdraw consent as provided in subparagraph 1. of paragraph b. of subdivision (1) of this subsection and to update information needed to contact the consumer electronically.

4. Informs the consumer:

(i) How, after the consent, the consumer, upon request, may obtain a paper copy of an electronic record.

(ii) Whether any fee will be charged for such copy.

c. If, with respect to the consumer, both of the following occur:

1. Prior to consenting, the consumer is provided with a statement of the hardware and software requirements for access to and retention of the electronic records.

2. The consumer consents electronically, or confirms his or her consent electronically, in a manner that reasonably demonstrates that the consumer can access information in the electronic form that will be used to provide the information that is the subject of the consent.

d. After the consent of a consumer in accordance with paragraph a. of subdivision (1) of this subsection, if a change in the hardware or software requirements needed to access or retain electronic records creates a material risk that the consumer will not be able to access or retain a subsequent electronic record that was the subject of the consent, the person providing the electronic record:

1. Provides the consumer with a statement of (i) the revised hardware and software requirements for access to and retention of the electronic records, and (ii) the right to withdraw consent without the imposition of any fees for such withdrawal and without the imposition of any condition or consequence that was not disclosed under subparagraph 1. of paragraph b. of subdivision (1) of this subsection.

2. Again complies with paragraph c. of subdivision (1) of this subsection.

(2) a. Nothing in this chapter affects the content or timing of any disclosure or other record required to be provided or made available to any consumer under any statute, regulation, or other rule of law.

b. If a law that was enacted prior to this chapter expressly requires a record to be provided or made available by a specified method that requires verification or acknowledgment of receipt, the record may be provided or made available electronically only if the method used provides verification or acknowledgment of receipt, whichever is required.

(3) The legal effectiveness, validity, or enforceability of any contract executed by a consumer shall not be denied solely because of the failure to obtain electronic consent or confirmation of consent by that consumer in accordance with subparagraph 2. of paragraph c. of subdivision (1) of this subsection.

(4) Withdrawal of consent by a consumer shall not affect the legal effectiveness, validity, or enforceability of electronic records provided or made available to that consumer in accordance with subdivision (1) prior to implementation of the consumer’s withdrawal of consent. A consumer’s withdrawal of consent shall be effective within a reasonable period of time after receipt of the withdrawal by the provider of the record. Failure to comply with paragraph d. of subdivision (1) of this subsection may, at the election of the consumer, be treated as a withdrawal of consent for purposes of this subdivision.

(5) This subsection does not apply to any records that are provided or made available to a consumer who has consented prior to January 1, 2002, to receive such records in electronic form as permitted by any statute, regulation, or other rule of law.

(6) An oral communication or a recording of an oral communication shall not qualify as an electronic record for purposes of this subsection except as otherwise provided under applicable law.

(Act 2001-458, p. 597, §1.)

§ 8-1A-9 Attribution and Effect of Electronic Record and Electronic Signature

(a) An electronic record or electronic signature is attributable to a person if it was the act of the person. The act of the person may be shown in any manner, including a showing of the efficacy of any security procedure applied to determine the person to which the electronic record or electronic signature was attributable.

(b) The effect of an electronic record or electronic signature attributed to a person under subsection (a) is determined from the context and surrounding circumstances at the time of its creation, execution, or adoption, including the parties’ agreement, if any, and otherwise as provided by law.

(Act 2001-458, p. 597, §1.)

§ 8-1A-10 Effect of Change or Error

If a change or error in an electronic record occurs in a transmission between parties to a transaction, the following rules apply:

(1) If the parties have agreed to use a security procedure to detect changes or errors and one party has conformed to the procedure, but the other party has not, and the nonconforming party would have detected the change or error had that party also conformed, the conforming party may avoid the effect of the changed or erroneous electronic record.

(2) In an automated transaction involving an individual, the individual may avoid the effect of an electronic record that resulted from an error made by the individual in dealing with the electronic agent of another person if the electronic agent did not provide an opportunity for the prevention or correction of the error and, at the time the individual learns of the error, the individual meets the following requirements:

a. Promptly notifies the other person of the error and that the individual did not intend to be bound by the electronic record received by the other person.

b. Takes reasonable steps, including steps that conform to the other person’s reasonable instructions, to return to the other person or, if instructed by the other person, to destroy the consideration received, if any, as a result of the erroneous electronic record.

c. Has not used or received any benefit or value from the consideration, if any, received from the other person.

(3) If neither subdivision (1) nor subdivision (2) applies, the change or error has the effect provided by other law, including the law of mistake, and the parties’ contract, if any.

(4) Subdivisions (2) and (3) may not be varied by agreement.

(Act 2001-458, p. 597, §1.)

§ 8-1A-11 Notarization and Acknowledgment

If a law requires a signature or record to be notarized, acknowledged, verified, or made under oath, the requirement is satisfied if the electronic signature of the person authorized to perform those acts, together with all other information required to be included by other applicable law, is attached to or logically associated with the signature or record.

(Act 2001-458, p. 597, §1.)

§ 8-1A-12 Retention of Electronic Records; Originals

(a) If a law requires that a record be retained, the requirement is satisfied by retaining an electronic record of the information in the record which meets the following requirements:

(1) Accurately reflects the information set forth in the record as it was first generated in final form as an electronic record or otherwise.

(2) Remains accessible for later reference.

(b) A requirement to retain a record in accordance with subsection (a) does not apply to any information the sole purpose of which is to enable the record to be sent, communicated, or received.

(c) A person may satisfy subsection (a) by using the services of another person if the requirements of that subsection are satisfied.

(d) If a law requires a record to be presented or retained in its original form, or provides consequences if the record is not presented or retained in its original form, that law is satisfied by an electronic record retained in accordance with subsection (a).

(e) If a law requires retention of a check, that requirement is satisfied by retention of an electronic record of the information on the front and back of the check in accordance with subsection (a).

(f) A record retained as an electronic record in accordance with subsection (a) satisfies a law requiring a person to retain a record for evidentiary, audit, or like purposes, unless a law enacted after January 1, 2002, specifically prohibits the use of an electronic record for the specified purpose.

(g) This section does not preclude the State Records Commission, Local Government Records Commission, or other governmental agency of this state from specifying additional requirements for the retention by the agency of a record subject to the agency’s jurisdiction. The State Records Commission and the Local Government Records Commission may promulgate records retention standards for state and local government agencies to follow in compliance with this chapter.

(Act 2001-458, p. 597, §1.)

§ 8-1A-13 Admissibility in Evidence

(a) In any proceeding, evidence of a record or signature may not be excluded solely because it is in electronic form.

(b) In determining the attribution and authenticity or evidentiary weight of an electronic record or signature, the trier of fact may consider, along with any other relevant and probative evidence, proof of the efficacy of any security procedure applied. This may include a showing that the procedure: (1) uniquely identifies the signer or creator of the record; (2) prevents others from using the same identifier; and/or (3) provides a mechanism for determining whether the data contained in the record was changed after it was created or signed. Evidence bearing on the means and the reliability with which the procedure performs these functions may also be considered.

(Act 2001-458, p. 597, §1.)

§ 8-1A-14 Automated Transaction

In an automated transaction, the following rules apply:

(1) A contract may be formed by the interaction of electronic agents of the parties, even if no individual was aware of or reviewed the electronic agents’ actions or the resulting terms and agreements.

(2) A contract may be formed by the interaction of an electronic agent and an individual, acting on the individual’s own behalf or for another person, including by an interaction in which the individual performs actions that the individual is free to refuse to perform and which the individual knows or has reason to know will cause the electronic agent to complete the transaction or performance.

(3) The terms of the contract are determined by the substantive law applicable to it.

(Act 2001-458, p. 597, §1.)

§ 8-1A-15 Time and Place of Sending and Receipt

(a) Unless otherwise agreed between the sender and the recipient, an electronic record is sent when the record meets all of the following requirements:

(1) The record is addressed properly or otherwise directed properly to an information processing system that the recipient has designated or uses for the purpose of receiving electronic records or information of the type sent and from which the recipient is able to retrieve the electronic record.

(2) The record is in a form capable of being processed by that system.

(3) The record enters an information processing system outside the control of the sender or of a person that sent the electronic record on behalf of the sender or enters a region of the information processing system designated or used by the recipient which is under the control of the recipient.

(b) Unless otherwise agreed between a sender and the recipient, an electronic record is received when the record meets the following requirements:

(1) The record enters an information processing system that the recipient has designated or uses for the purpose of receiving electronic records or information of the type sent and from which the recipient is able to retrieve the electronic record.

(2) The record is in a form capable of being processed by that system.

(c) Subsection (b) applies even if the place the information processing system is located is different from the place the electronic record is deemed to be received under subsection (d).

(d) Unless otherwise expressly provided in the electronic record or agreed between the sender and the recipient, an electronic record is deemed to be sent from the sender’s place of business and to be received at the recipient’s place of business. For purposes of this subsection, the following rules apply:

(1) If the sender or recipient has more than one place of business, the place of business of that person is the place having the closest relationship to the underlying transaction.

(2) If the sender or the recipient does not have a place of business, the place of business is the sender’s or recipient’s residence, as the case may be.

(e) An electronic record is received under subsection (b) even if no individual is aware of its receipt.

(f) Receipt of an electronic acknowledgment from an information processing system described in subsection (b) establishes that a record was received but, by itself, does not establish that the content sent corresponds to the content received.

(g) If a person is aware that an electronic record purportedly sent under subsection (a), or purportedly received under subsection (b), was not actually sent or received, the legal effect of the sending or receipt is determined by other applicable law. Except to the extent permitted by the other law, the requirements of this subsection may not be varied by agreement.

(Act 2001-458, p. 597, §1.)

§ 8-1A-16 Transferable Records

(a) In this section, “transferable record” means an electronic record that meets the following criteria:

(1) Would be a note under Article 3 of the Uniform Commercial Code or a document under Article 7 of the Uniform Commercial Code if the electronic record were in writing.

(2) The issuer of the electronic record expressly has agreed is a transferable record.

(b) A person has control of a transferable record if a system employed for evidencing the transfer of interests in the transferable record reliably establishes that person as the person to which the transferable record was issued or transferred.

(c) A system satisfies subsection (b), and a person is deemed to have control of a transferable record, if the transferable record is created, stored, and assigned in such a manner that all of the following occur:

(1) A single authoritative copy of the transferable record exists which is unique, identifiable, and, except as otherwise provided in subdivisions (4), (5), and (6), unalterable.

(2) The authoritative copy identifies the person asserting control as:

a. The person to which the transferable record was issued; or

b. If the authoritative copy indicates that the transferable record has been transferred, the person to which the transferable record was most recently transferred.

(3) The authoritative copy is communicated to and maintained by the person asserting control or its designated custodian.

(4) Copies or revisions that add or change an identified assignee of the authoritative copy can be made only with the consent of the person asserting control.

(5) Each copy of the authoritative copy and any copy of a copy is readily identifiable as a copy that is not the authoritative copy.

(6) Any revision of the authoritative copy is readily identifiable as authorized or unauthorized.

(d) Except as otherwise agreed, a person having control of a transferable record is the holder, as defined in subdivision (20) of Section 7-1-201 of the Uniform Commercial Code, of the transferable record and has the same rights and defenses as a holder of an equivalent record or writing under the Uniform Commercial Code, including, if the applicable statutory requirements under subsection (a) of Section 7-3-302, Section 7-7-501, or Section 7-9-308 of the Uniform Commercial Code or Section 5-19-5 are satisfied, the rights and defenses of a holder in due course, a holder to which a negotiable document of title has been duly negotiated, or a purchaser, respectively. Delivery, possession, and indorsement are not required to obtain or exercise any of the rights under this subsection.

(e) Except as otherwise agreed, an obligor under a transferable record has the same rights and defenses as an equivalent obligor under equivalent records or writings under the Uniform Commercial Code.

(f) If requested by a person against which enforcement is sought, the person seeking to enforce the transferable record shall provide reasonable proof that the person is in control of the transferable record. Proof may include access to the authoritative copy of the transferable record and related business records sufficient to review the terms of the transferable record and to establish the identity of the person having control of the transferable record.

(Act 2001-458, p. 597, §1.)

§ 8-1A-17 Creation and Retention of Electronic Records; Conversion of Written Records

(a) The Alabama Supreme Court and any other court or judicial official or entity with rulemaking authority and each governmental agency of this state with rulemaking authority reviewable under Section 41-22-23 may determine by rule whether, and the extent to which, it will create and retain electronic records and convert written records to electronic records.

(b) The governing body of each municipality in the state may determine by ordinance whether, and the extent to which, an executive, legislative, or judicial agency, department, board, commission, authority, institution, or instrumentality of the municipality shall create and retain electronic records and convert written records to electronic records.

(Act 2001-458, p. 597, §1; Act 2021-304, §1.)

§ 8-1A-18 Acceptance and Distribution of Electronic Records and Electronic Signatures

(a)(1) Except as otherwise provided in subsection (f) of Section 8-1A-12, the Alabama Supreme Court and any other court or judicial official or entity with rulemaking authority and each governmental agency of this state with rulemaking authority reviewable under Section 41-22-23 may determine by rule whether, and the extent to which, it will send and accept electronic records and electronic signatures to and from other persons and otherwise create, generate, communicate, store, process, use, and rely upon electronic records and electronic signatures.

(2) Except as otherwise provided in subsection (f) of Section 8-1A-12, the governing body of each municipality in the state may determine by ordinance whether, and the extent to which, an executive, legislative, or judicial agency, department, board, commission, authority, institution, or instrumentality of the municipality shall send and accept electronic records and electronic signatures to and from other persons and otherwise create, generate, communicate, store, process, use, and rely upon electronic records and electronic signatures.

(b) To the extent that a governmental agency uses electronic records and electronic signatures under subsection (a), the governmental agency, giving due consideration to security, may specify each of the following:

(1) The manner and format in which the electronic records shall be created, generated, sent, communicated, received, and stored and the systems established for those purposes.

(2) If electronic records must be signed by electronic means, the type of electronic signature required, the manner and format in which the electronic signature shall be affixed to the electronic record, and the identity of, or criteria that shall be met by, any third party used by a person filing a document to facilitate the process.

(3) Control processes and procedures as appropriate to ensure adequate preservation, disposition, integrity, security, confidentiality, and auditability of electronic records.

(c) Except as otherwise provided in subsection (f) of Section 8-1A-12, this chapter does not require a governmental agency of this state to use or permit the use of electronic records or electronic signatures.

(Act 2001-458, p. 597, §1; Act 2021-304, §1.)

§ 8-1A-19 Interoperability

(a) A governmental agency of this state which adopts standards pursuant to Section 8-1A-18 may encourage and promote consistency and interoperability with similar requirements adopted by other governmental agencies of this and other states and the federal government and nongovernmental persons interacting with governmental agencies of this state. If appropriate, those standards may specify differing levels of standards from which governmental agencies of this state may choose in implementing the most appropriate standard for a particular application.

(b) The Alabama Office of Information Technology, by rule, may provide a procedure for any agency under the purview of the office to create and retain electronic records, convert written records to electronic records, and accept electronic signatures. The rule shall satisfy the requirements of Sections 8-1A-17 and 8-1A-18, shall be permissive, and may not repeal or alter any existing or future agency rules relating to electronic signatures or electronic records.

(Act 2001-458, p. 597, §1; Act 2021-304, §1.)

§ 8-1A-20 Severability

If any provision of this chapter or its application to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of this chapter which can be given effect without the invalid provision or application, and to this end the provisions of this chapter are severable.

(Act 2001-458, p. 597, §1.)

Chapter 2 Agency

§ 8-2-1 Authority of Agents Generally

Every agent has actually such authority as is defined by this chapter, unless specially deprived thereof by his principal, and has even then such authority ostensibly, except as to persons who have actual or constructive notice of the restrictions upon his authority.

(Code 1923, §9534; Code 1940, T. 9, §68.)

§ 8-2-2 General Agent’s Authority to Receive Price

A general agent to sell who is intrusted by the principal with the possession of the thing sold has authority to receive the price.

(Code 1923, §9536; Code 1940, T. 9, §70.)

§ 8-2-3 Special Agent’s Authority to Receive Price

A special agent to sell has authority to receive the price on delivery of the thing sold, but not afterwards.

(Code 1923, §9537; Code 1940, T. 9, §71.)

§ 8-2-4 Agent’s Authority to Effect Purpose of Agency and Represent Authority

An agent has authority to:

(1) Do everything necessary or proper and usual in the ordinary course of business for effecting the purpose of his agency; and

(2) Make a representation respecting any matter of fact, not including the terms of his authority, but upon which his right to use his authority depends and the truth of which cannot be determined by the use of reasonable diligence on the part of the person to whom the representation is made.

(Code 1923, §9535; Code 1940, T. 9, §69.)

§ 8-2-5 Person Acting as Agent Warrants Authority He Assumes

One who assumes to act as an agent thereby warrants to all who deal with him in that capacity that he has the authority which he assumes.

(Code 1923, §9542; Code 1940, T. 9, §76.)

§ 8-2-6 Principal Bound by Agent’s Acts Under Ostensible Authority

A principal is bound by acts of his agent under a merely ostensible authority to those persons only who have in good faith and without want of ordinary care incurred a liability or parted with value upon the faith thereof.

(Code 1923, §9539; Code 1940, T. 9, §73.)

§ 8-2-7 Principal Responsible for Negligence and Omission of Agent in Transacting Agency

Unless required by or under the authority of law to employ that particular agent, a principal is responsible to third persons for the negligence of his agent in the transaction of the business of the agency, including wrongful acts committed by such agent in and as a part of the transaction of such business, and for his willful omission to fulfill the obligations of the principal.

(Code 1923, §9541; Code 1940, T. 9, §75.)

§ 8-2-8 Both Principal and Agent Have Notice of Whatever Either Has Notice Of

As against a principal, both principal and agent are deemed to have notice of whatever either has notice of and ought in good faith and the exercise of ordinary care and diligence to communicate to the other.

(Code 1923, §9538; Code 1940, T. 9, §72.)

§ 8-2-9 Setoff Against Principal’s Claim by Person Having Claim Against Agent Before Notice of Agency

One who deals with an agent without knowing or having reason to believe that the agent acts as such in the transaction may set off against any claim of the principal arising out of the same all claims which he might have set off against the agent before notice of the agency.

(Code 1923, §9540; Code 1940, T. 9, §74.)

Chapter 3 Suretyship

Article 1 General Provisions

§ 8-3-1 Relationship of Joint Makers of Notes, Bills, Etc

Joint makers of notes, bills, bonds, or contracts for the payment of money are bound severally and jointly to the payee, transferee, or holder, jointly and severally, for the full amount due; but as between themselves, each is principal to the extent of his share of the joint and several debt and surety to the extent of the shares of the other makers.

(Code 1907, §5384; Code 1923, §9543; Code 1940, T. 9, §77.)

§ 8-3-2 Rights of Surety Who Has Paid Debt

A surety who has paid his principal’s debt is entitled to a transfer of the original and collateral security which the creditor holds; he has all the rights to realize thereon and to reimburse himself to the same extent as the creditor might have done before the surety paid him, whether paid before or after judgment; and he shall be substituted for the creditor and subrogated to all his rights and remedies; in effect, he shall be a purchaser of the debt and all its incidents.

(Code 1907, §5385; Code 1923, §9544; Code 1940, T. 9, §78.)

§ 8-3-3 Remedies Given Sureties Not Exclusive

The remedies given sureties and cosureties in this chapter are not exclusive of other remedies conferred by statute or existing at common law, but are cumulative and additional.

(Code 1907, §5386; Code 1923, §9545; Code 1940, T. 9, §79.)

§ 8-3-4 Tender by Surety Discharges Surety

The surety may tender to the creditor the amount of his debt and demand that the evidence of and the securities for the same be delivered up to him to be enforced against his principal or cosureties; and a failure of the creditor to comply, when within his power, shall operate to discharge the surety.

(Code 1907, §5387; Code 1923, §9546; Code 1940, T. 9, §80.)

§ 8-3-5 Rights of Surety Against Principal Upon Payment of Debt

Payment by a surety or endorser of a debt past due entitles him to proceed immediately against his principal for the sum paid, with interest thereon, and all legal costs to which he may have been subjected by the default of the principal.

(Code 1907, §5388; Code 1923, §9547; Code 1940, T. 9, §81.)

§ 8-3-6 Suretyship May Be Proved by Parol

If the fact of suretyship does not appear on the face of the contract, it may be proved by parol, either before or after the judgment.

(Code 1907, §5389; Code 1923, §9548; Code 1940, T. 9, §82.)

§ 8-3-7 Rights of Surety Sued Separately and Paying Judgment

If the surety is sued separately from his principal, on payment by him of the judgment against him, he shall be entitled to control the judgment and execution against his principal in the same manner as if the judgment and execution were joint; and if he does not appear as surety in the judgment against him, he may give notice and make the proof and obtain the control in the same manner as pointed out in cases of joint judgment.

(Code 1907, §5390; Code 1923, §9549; Code 1940, T. 9, §83.)

§ 8-3-8 Payments by Surety Pending Action

If the surety pays off the debt pending an action against the principal and himself or against the principal alone, such payment shall operate only to cause the action to proceed for the benefit of such surety, and the judgment may be entered in the name of the original plaintiff for the use of such surety.

(Code 1907, §5391; Code 1923, §9550; Code 1940, T. 9, §84.)

§ 8-3-9 Contribution by Cosureties

All the foregoing provisions of this article shall apply to cases where there are more than one surety, so as to enable a surety discharging a joint debt, in whole or in part, either pending the action or after joint or several judgments, to control the same against his cosureties for the purpose of compelling them to contribute their respective shares of the amount so paid by him.

(Code 1907, §5392; Code 1923, §9551; Code 1940, T. 9, §85.)

§ 8-3-10 Control of Judgment by Endorser Upon Payment of Debt

(a) Every endorser who shall pay off and discharge the debt on which he is endorser, either pending the action or after judgment, whether the judgment be joint against the principal and all the endorsers or several against such, shall be entitled to control the judgment and execution founded thereon against the principal and all prior endorsers in the same manner, upon the same proof and under the same circumstances as provided in the case of sureties.

(b) If such endorser shall collect the same of a prior endorser, such prior endorser shall have the same control of the judgment or judgments against the principal or any endorser prior to him.

(Code 1907, §5393; Code 1923, §9552; Code 1940, T. 9, §86.)

§ 8-3-11 Surety Paying Debt Subrogated to Rights of Creditor

A surety who has paid the debt of his principal is subrogated to all the rights of the creditor and, in a controversy with other creditors, ranks in dignity the same as the creditor whose claim is paid.

(Code 1907, §5394; Code 1923, §9553; Code 1940, T. 9, §87.)

§ 8-3-12 When Surety Not to Confess Judgment

No surety, when sued, can confess judgment or suffer judgment to pass by default if the principal debtor, on being notified of the pending action, is willing to defend the action at his own cost and give good and sufficient collateral security to the surety, to be approved by the court.

(Code 1852, §2646; Code 1867, §3073; Code 1876, §3413; Code 1886, §3152; Code 1896, §3883; Code 1907, §5395; Code 1923, §9554; Code 1940, T. 9, §88.)

§ 8-3-13 Surety May Require Creditor to Bring Action Against Principal; Discharge of Surety Upon Failure to Bring Action

(a) A surety upon any contract for the payment of money or for the delivery or payment of personal property may require the creditor or anyone having the beneficial interest in the contract, by notice in writing, to bring an action thereon against the principal debtor or against any cosurety to such contract.

(b) If an action is not brought thereon in three months after the receipt of such notice and prosecuted with diligence according to the ordinary course of law, the surety giving such notice is discharged from all liability as surety or his aliquot proportion of the debt, as the case may be.

(c) One surety may give the notice in behalf of his cosureties.

(d) The remedy secured by this section does not apply to bonds or other contracts with collateral conditions, nor to the bonds of executors, administrators, guardians, or public officers.

(Code 1852, §§2647, 2648; Code 1867, §§3074, 3075; Code 1876, §§3414, 3415; Code 1886, §§3153, 3154; Code 1896, §§3884, 3885; Code 1907, §§5396, 5397; Code 1923, §§9555, 9556; Code 1940, T. 9, §§89, 90.)

§ 8-3-14 Provisions of Chapter Inure to Benefit of Personal Representatives

All the provisions of this chapter inure to the benefit of the personal representatives of the creditor or surety and in favor of sureties and cosureties against the personal representatives of the principal or of a surety.

(Code 1852, §2649; Code 1867, §3076; Code 1876, §3416; Code 1886, §3155; Code 1896, §3886; Code 1907, §5398; Code 1923, §9557; Code 1940, T. 9, §91.)

§ 8-3-15 Court in Which Complaints Filed

In cases not otherwise provided for in this chapter, complaints must be filed in the circuit court of the county in which the parties, or any of them, against whom the complaint is filed reside or, if they are nonresidents or have no fixed residence in the state, in the circuit court of any county in the state or in a district court where such court has acquired jurisdiction of the original debt.

(Code 1852, §2650; Code 1867, §3077; Code 1876, §3417; Code 1886, §3156; Code 1896, §3887; Code 1907, §5399; Code 1923, §9558; Code 1940, T. 9, §92.)

Article 2 Replevy Bonds

§ 8-3-30 When Surety on Replevy Bond May Demand Collateral Security; Seizure of Property If Collateral Not Given; Disposition of Seized Perishable Property

(a) When the principal in any replevy bond is wasting the replevied property or is removing or is about to remove himself or property out of the state, the surety or sureties on the replevy bond may demand of the principal adequate indemnity against loss by collateral security.

(b) If such security is not given within five days after demand made, the surety may make affidavit thereof before the clerk of the court in which such bond is filed, setting forth the demand of the principal for collateral security, for some one or more of the causes mentioned in subsection (a) of this section, and that the principal has failed to give security.

Thereupon, the clerk must issue a writ directed to the sheriff commanding him to seize the replevied property and hold the same until the decision of the civil action in which it was replevied or until the principal executes bond with sufficient surety in the same penalty as the replevy bond, payable to the surety, with condition to have the property forthcoming to abide the decision in the principal civil action, or to pay and satisfy the judgment entered therein.

(c) If the bond is not given and the property seized is of a wasting or perishable nature or the expense of keeping it would materially affect its value, it must be sold by the sheriff in the same manner as property levied on under execution and return thereof made as upon a writ of execution.

(d) If the bond is given, it must be filed with the original replevy bond, and execution may issue thereon upon a breach of the original replevy bond in favor either of the plaintiff or of the surety.

(Code 1852, §§2638-2642; Code 1867, §§3065-3069; Code 1876, §§3405-3409; Code 1886, §§3144-3148; Code 1896, §§3875-3879; Code 1907, §§5400-5404; Code 1923, §§9559-9563; Code 1940, T. 9, §§93-97.)

Article 3 Judgments

§ 8-3-40 Transfer of Judgment to Surety Upon Payment of Same by Surety

(a) Whenever a judgment is obtained by a creditor on a demand to which there are one or more sureties, the sureties may pay such demand, and the same shall be transferred by operation of law to the surety or sureties paying or satisfying such demand, who shall have all the liens or equities of such judgment and of the debt or claim on which the same is founded.

(b) The plaintiff in the judgment, his agent or attorney of record, when the payment is made, must assign such judgment to the surety or sureties paying the money, who may collect the same, with interest and costs, in the name of the plaintiff for their use, and may assert any lien or right against the principal debtor which the plaintiff could have asserted if the debt had not been paid.

(Code 1852, §2651; Code 1867, §3078; Code 1876, §3418; Code 1886, §3157; Code 1896, §3888; Code 1907, §5408; Code 1923, §9567; Code 1940, T. 9, §101.)

§ 8-3-41 Issuance of Execution on Judgment Paid by Surety; Collection of Money from Principal Debtor or Cosureties

(a) If a judgment is entered by any court against a principal debtor and his surety, or against his sureties, and one or more of his sureties shall pay and satisfy the judgment, the same shall be thereby transferred and assigned by operation of law to the surety or sureties paying and satisfying it, who shall have all the liens and equities of such judgment and of the debt or claim on which the same is founded which the creditor therein had.

(b) The surety, on making affidavit of his suretyship and of his having paid the judgment and filing the affidavit and any evidence of such payment that he may hold with the officer authorized to issue execution on the judgment to whom he may apply for execution, shall be entitled to have execution issued on the judgment in the name of the plaintiff or complainant for his use or in his own name against the other defendants therein, as if the judgment had not been paid and satisfied.

(c) The officer issuing the execution shall endorse thereon that it is issued for the use of the surety who paid the judgment, and the officer serving it shall collect the money for the use of the surety from the principal debtor, if he is a party to the judgment and the money can be made out of him; if not, he shall collect a ratable proportion of the money from each of the cosureties.

(Code 1907, §5409; Code 1923, §9568; Code 1940, T. 9, §102.)

§ 8-3-42 Sureties Entitled to Summary Judgment Against Principal and Between Each Other

Sureties, whether bound on the contract or instrument with the principal debtor as joint or joint and several obligors or promisors, as accommodation drawers, acceptors, or endorsers of a bill of exchange or in any other manner, are entitled to a summary judgment against their principal and between each other, by motion in the circuit court on three days’ notice thereof, in the cases, and in the following manner:

(1) Against the principal debtor:

a. When a judgment has been obtained against the surety which he has satisfied, either wholly or in part, for the amount paid and interest;

b. When a surety or sureties are sued without their principal upon notice given to the principal of the pending action if judgment is obtained against the surety, judgment for the same amount must be entered against the principal in favor of the surety.

(2) Between sureties:

a. A surety who has paid the debt of his principal may recover of each of his cosureties their aliquot proportion of the debt, and, if any of the cosureties are insolvent, the proportion of such insolvent must be excluded from the estimate, and judgment be entered against the remaining solvent sureties for their proportion of the debt as if such insolvent were not a cosurety.

b. When an action is pending against one or more sureties either in connection with or without their principal, then if the principal is insolvent or dead, the surety so sued may recover on notice of the pending action judgment against such of the cosureties as are not sued in that action for their aliquot proportion of the debt, excluding from the estimate the proportion of such of the sureties as are insolvent as if such insolvent had not been a surety.

(Code 1852, §§2643-2645; Code 1867, §§3070-3072; Code 1876, §§3410-3412; Code 1886, §§3149-3151; Code 1896, §§3880-3882; Code 1907, §§5405-5407; Code 1923, §§9564-9566; Code 1940, T. 9, §§98-100.)

Chapter 4 Bills of Exchange

§ 8-4-1 Damages on Protested Bills of Exchange

The damages on bills of exchange, inland or foreign, protested for nonacceptance or nonpayment are five percent on the sum drawn for.

(Code 1852, §1537; Code 1867, §1845; Code 1876, §2106; Code 1886, §1771; Code 1896, §885; Code 1907, §5145; Code 1923, §9216; Code 1940, T. 39, §185.)

§ 8-4-2 Damages on Protest for Nonpayment in Place of All Charges Except Costs

Damages on protest for nonpayment of bills of exchange are in the place of all charges except costs of protest incurred previous to and at the time of giving notice of nonpayment, but the holder may recover legal interest upon the aggregate amount of the principal sum specified in such bill and of the damages thereon from the time at which payment of the principal sum has been demanded, and costs of protest.

(Code 1852, §1538; Code 1867, §1846; Code 1876, §2107; Code 1886, §1772; Code 1896, §886; Code 1907, §5146; Code 1923, §9217; Code 1940, T. 39, §186.)

§ 8-4-3 Applicability of Rate of Exchange in Determining Amount Due and Damages for Nonpayment

(a) If the amount in a bill of exchange specified is expressed in money of the United States, the amount due thereon and the damages allowed for the nonpayment thereof must be ascertained at the time of the demand of payment or notice of nonpayment without reference to the rate of exchange between this state and the place on which such bill was drawn.

(b) If the amount in a bill of exchange specified is expressed in money or currency of any foreign country, then the amount due, exclusive of the damages payable thereon, must be ascertained and determined by the rate of exchange, or the value of such foreign currency at the time of the demand of payment.

(Code 1852, §§1539, 1540; Code 1867, §§1847, 1848; Code 1876, §§2108, 2109; Code 1886, §§1773, 1774; Code 1896, §§887, 888; Code 1907, §§5147, 5148; Code 1923, §§9218, 9219; Code 1940, T. 39, §§187, 188.)

§ 8-4-4 Damages and Charges on Protest for Nonacceptance

When a bill of exchange is protested for nonacceptance, the same rate of damages is allowed as in the case of a protest for nonpayment; and such damages are in the place of all charges, except costs of protest, incurred previous to and at the time of giving notice of nonacceptance; but the holder is entitled to recover legal interest, exclusive of the damages, upon the amount of the principal sum from the time when the same would have become payable, if accepted, interest on the damages from the demand of acceptance and the costs of protest.

(Code 1852, §1541; Code 1867, §1849; Code 1876, §2110; Code 1886, §1775; Code 1896, §889; Code 1907, §5149; Code 1923, §9220; Code 1940, T. 39, §189.)

Chapter 5 Nonnegotiable Instruments

Article 1 General Provisions

§ 8-5-1 Action on Instrument Issued to Circulate as Money Without Authority; Interest on Same

Every bill of exchange, note, bond, or instrument of any description, whatever may be its form or device, issued with the intent to circulate as money without authority of law, is an absolute, unconditional promise of the association or person putting such bill, note, or other instrument in circulation, and may be sued on by the holder thereof without transfer or assignment and without demand, protest, or notice and the amount thereof recovered with interest thereon at the rate of 50 percent per annum from the date thereof or from the time the same was put in circulation.

(Code 1852, §935; Code 1867, §1171; Code 1876, §1424; Code 1886, §1193; Code 1896, §866; Code 1907, §5150; Code 1923, §9223; Code 1940, T. 39, §192.)

§ 8-5-2 Issuance of Change Bills, Etc., by Corporations Prohibited

No corporation doing business in this state shall pay out, by its agents or officers, any change bills, notes, or paper issued without authority of law, the circulation or passing of which is prohibited by the laws of this state; and if such corporation allows the same, it incurs a forfeiture of its charter.

(Code 1852, §936; Code 1867, §1172; Code 1876, §1425; Code 1886, §1194; Code 1896, §867; Code 1907, §5151; Code 1923, §9224; Code 1940, T. 39, §193.)

Article 2 Assignments and Endorsements

§ 8-5-20 Bonds, Contracts, Writings for Payment of Money, Etc., Assignable by Endorsement

All bonds, writings, and contracts for the payment of money, or other thing, or the performance of any act or duty, are assignable by endorsement so as to authorize an action thereon by each successive endorsee.

(Code 1852, §1530; Code 1867, §1838; Code 1876, §2099; Code 1886, §1762; Code 1896, §876; Code 1907, §5158; Code 1923, §9231; Code 1940, T. 39, §200.)

§ 8-5-21 Assignment of Future Wages Void

(a) All assignments made by any person of salaries or wages, to be earned in the future, shall be absolutely void.

(b) The provisions of this section shall also apply to orders given by employees covering the whole or part of future wages.

(Acts 1911, No. 226, p. 370; Code 1923, §9232; Code 1940, T. 39, §201.)

§ 8-5-22 Right to Assign Interest in Crops

Nothing in Section 8-5-21 shall be construed to affect the right of the laborer under Section 35-9-37 to assign his interest in a crop.

(Code 1923, §9234; Acts 1935, No. 159, p. 202; Code 1940, T. 39, §203.)

§ 8-5-23 Property Injury Claims Against Railroads Assignable

Claims against railroad companies for injuries to property may be assigned in writing, and each successive assignee thereof may bring an action thereon in his own name.

(Code 1876, §2119; Code 1886, §1763; Code 1896, §877; Code 1907, §5159; Code 1923, §9235; Code 1940, T. 39, §204.)

§ 8-5-24 Effect of Transfer of Bill, Note, Etc., Given for Purchase Money of Lands

The transfer of a bond, bill, or note given for the purchase money of lands, whether the transfer be by delivery merely or in writing, expressed to be with or without recourse on the transferor, passes to the transferee the lien of the vendor of the lands.

(Code 1886, §1764; Code 1896, §878; Code 1907, §5160; Code 1923, §9236; Code 1940, T. 39, §205.)

§ 8-5-25 Contracts, Writings and Paper Circulated as Money Subject to Payments, Setoffs and Discounts Prior to Notice of Assignment

All contracts and writings, except such as are governed by the Uniform Commercial Code, and paper issued to circulate as money, are subject to all payments, setoffs, and discounts had or possessed against the same previous to notice of an assignment or transfer.

(Code 1852, §1531; Code 1867, §1839; Code 1876, §2100; Code 1886, §1765; Code 1896, §879; Code 1907, §5161; Code 1923, §9237; Code 1940, T. 39, §206; Acts 1965, No. 549, p. 811.)

§ 8-5-26 Action to Charge Endorser or Assignor on Contracts Assigned by Writing and Not Covered by Uniform Commercial Code - Time for Bringing Action Against Maker; Issuance of Execution When Judgment Obtained; Proof of Inability of Maker to Pay Judgment

(a) On all contracts assigned by writing which are not governed by the Uniform Commercial Code, an action to charge the endorser or assignor must be brought against the maker within 30 days after an action can properly be brought.

(b) If judgment is obtained, execution must be issued as authorized by law, and the inability of the maker to pay such judgment proved by the return of “no property.”

(Code 1852, §§1543, 1544; Code 1867, §§1851, 1852; Code 1876, §§2112, 2113; Code 1886, §1778; Code 1896, §892; Code 1907, §5153; Code 1923, §9226; Code 1940, T. 39, §195; Acts 1965, No. 549, p. 811.)

§ 8-5-27 Action to Charge Endorser or Assignor on Contracts Assigned by Writing and Not Covered by Uniform Commercial Code - Extension or Waiver of Time for Bringing Action by Endorser or Assignor

The time for bringing the action, as required by Section 8-5-26, may be extended or waived by the consent of the endorser or assignor in writing signed by him.

(Code 1852, §1545; Code 1867, §1853; Code 1876, §2114; Code 1886, §1779; Code 1896, §893; Code 1907, §5154; Code 1923, §9227; Code 1940, T. 39, §196.)

§ 8-5-28 Action to Charge Endorser or Assignor on Contracts Assigned by Writing and Not Covered by Uniform Commercial Code - When Holder of Contract Excused from Bringing Action, Obtaining Judgment, Etc

The holder of an endorsed or assigned contract which is not governed by the Uniform Commercial Code is excused from bringing an action, obtaining the judgment, and issuing the execution thereon when:

(1) The maker has no known place of residence in the state;

(2) By the use of ordinary diligence such residence cannot be ascertained;

(3) The action has been commenced in the county of the residence of the maker and a summons to the first and next succeeding court returned not found by the proper officer;

(4) A judgment against the maker has been defeated, in whole or in part, by a defense to the merits of such contract or writing or a setoff against any other than the endorsee or assignee;

(5) Any defense, except a setoff to the merits of such contract or writing, exists which would prevent a judgment for all or any portion of the sum due or the value of the thing payable by such contract or writing;

(6) The maker dies before the time expires for bringing an action or, if after an action brought, his estate is declared insolvent; or

(7) By any act or promise of the endorser, the plaintiff is induced to delay bringing such an action.

(Code 1852, §1546; Code 1867, §1854; Code 1876, §2115; Code 1886, §1780; Code 1896, §894; Code 1907, §5155; Code 1923, §9228; Code 1940, T. 39, §197.)

§ 8-5-29 Action to Charge Endorser or Assignor on Contracts Assigned by Writing and Not Covered by Uniform Commercial Code - Applicability of Sections 8-5-26 through 8-5-28

All assignments or endorsements in writing of contracts which are not governed by the Uniform Commercial Code, whether regular or irregular, must be construed as within the meaning of Sections 8-5-26 through 8-5-28, unless the contrary clearly appears from such assignment or endorsement.

(Code 1852, §1547; Code 1867, §1855; Code 1876, §2116; Code 1886, §1781; Code 1896, §895; Code 1907, §5156; Code 1923, §9229; Code 1940, T. 39, §198; Acts 1965, No. 549, p. 811.)

§ 8-5-30 Action to Charge Endorser or Assignor on Contracts Assigned by Writing and Not Covered by Uniform Commercial Code - Costs Recoverable Against Assignor or Endorser

The costs in an action against the maker in an assigned or endorsed contract which is not governed by the Uniform Commercial Code are recoverable in the action against the assignor or endorser.

(Code 1852, §1548; Code 1867, §1856; Code 1876, §2117; Code 1886, §1782; Code 1896, §896; Code 1907, §5157; Code 1923, §9230; Code 1940, T. 39, §199.)

Chapter 6 Securities

Article 1 General Provisions

§ 8-6-1 Short Title

This article may be cited as the “Alabama Securities Act.”

(Acts 1959, No. 542, p. 1318, §22; Acts 1990, No. 90-527, p. 772, §1.)

§ 8-6-2 Definitions

When used in this article, unless the context otherwise requires, the following terms shall have the meanings respectively ascribed to them by this section:

(1) COMMISSION or SECURITIES COMMISSION. The securities commission.

(2) AGENT. Any individual other than a dealer who represents a dealer or issuer in effecting or attempting to effect sales of securities, but such term does not include an individual who represents an issuer in:

a. Effecting a transaction in a security exempted by subdivisions (1), (2), (3), (4), (9) or (10) of Section 8-6-10;

b. Effecting transactions exempted by Section 8-6-11; or

c. Effecting transactions with existing employees, partners, or directors of the issuer if no commission or other remuneration is paid or given directly or indirectly for soliciting any person in this state.

A partner, officer, or director of a dealer or issuer is an agent if he otherwise comes within this definition.

(3) DEALER. Any person engaged in the business of effecting transactions in securities for the account of others or for his own account. Such term does not include:

a. An agent, issuer, bank, savings institution, savings and loan association, credit union, or trust company, or

b. A person who has no place of business in this state if he effects transactions in this state exclusively with or through the issuers of the securities involved in the transactions and other dealers.

(4) GUARANTEED. Guaranteed as to payment of principal, interest, or dividends.

(5) ISSUER. Every person who proposes to issue, has issued, or shall hereafter issue any security. Any person who acts for a compensation or a consideration as a promoter for or on behalf of a corporation, trust, unincorporated association, or partnership of any kind to be formed shall be deemed to be an issuer.

(6) NONISSUER. Not directly or indirectly for the benefit of the issuer.

(7) PERSON. Such term shall include a natural person, a corporation created under the laws of this or any other state, country, sovereignty, or political subdivision thereof, a partnership, an association, a joint-stock company, a trust, and any unincorporated organization. As used herein the term “trust” shall not include a trust created or appointed under or by virtue of a last will and testament, by instrument of declaration or appointment by any person for the benefit of himself, relatives, friends, servants, or employees, by a court or any public charitable trust.

(8) SALE, SELL, OFFER and OFFER TO SELL. “Sale” and “sell” includes every contract of sale of, contract to sell, or disposition of a security or interest in a security for value. “Offer” or “offer to sell” includes every attempt to offer or dispose of, or solicitation of an offer to buy, a security or interest in a security for value. Any security given or delivered with, or as a bonus on account of, any purchase of securities or any other thing is considered to constitute part of the subject of the purchase and to have been offered and sold for value. A purported gift of assessable stock is considered to involve an offer and sale. Every sale or offer of a warrant or right to purchase or subscribe to another security of the same or another issuer, as well as every sale or offer of a security which gives the holder a present or future right or privilege to convert into another security of the same or another issuer, is considered to include an offer of the other security.

(9) SECURITIES ACT OF 1933, SECURITIES EXCHANGE ACT OF 1934, PUBLIC UTILITY HOLDING COMPANY ACT OF 1935, INVESTMENT COMPANY ACT OF 1940, and INVESTMENT ADVISERS ACT OF 1940. The federal statutes of those names as amended at any time.

(10) SECURITY. Any note, stock, treasury stock, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, preorganization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit for a security, certificate of interest or participation in an oil, gas, or mining title or lease or in payments out of production under such a title or lease, annuity contract unless issued by an insurance company, bankers’ shares, trustees’ shares, investment participating bonds, investment trust debentures, units, shares, bonds and certificates in, for, respecting, or based upon any form of securities or collateral, subscriptions and contracts covering or pertaining to the sale or purchase on the installment plan of any security as herein defined, or subscription or contracts covering or pertaining to the sale or purchase of beneficial interest in title to property, profits or earnings, or any right to subscribe to any of the foregoing, or any instrument of any kind commonly known as a security.

(11) STATE. Any state, territory, or possession of the United States, as well as the District of Columbia and Puerto Rico.

(12) UNDERWRITER. A person who agrees to take or contracts to dispose of a stipulated amount of securities, or a portion thereof, at a fixed price.

(13) BROKER. A dealer, as hereinabove defined.

(14) SUSPEND. When used in relation to the registration of either a security, a dealer, an investment adviser, an agent, or an investment adviser representative, such term shall mean the temporary cessation or inoperativeness of such registration, whether by reason of operation of law or by reason of an order of the securities commission.

(15) REVOKE. To vacate the registration of either a security, a dealer, an investment adviser, an agent, or an investment adviser representative for cause by order of the securities commission.

(16) CANCEL. To terminate the registration of either a security, a dealer, an investment adviser, an agent, or an investment adviser representative upon application filed therefor as follows:

a. In the case of a security, upon application therefor filed by the issuer thereof or the person who secured the registration of said security;

b. In the case of a dealer, upon the application therefor filed by such dealer;

c. In the case of an investment adviser, upon the application therefor filed by such investment adviser;

d. In the case of an agent, upon the application therefor filed by either the issuer or dealer employing such agent; and

e. In the case of an investment adviser representative, upon application therefor filed by the investment adviser employing such investment adviser representative.

(17) FRAUD, DECEIT and DEFRAUD. These terms are not limited to common-law deceit.

(18) INVESTMENT ADVISER. Any person, who, for compensation, engages in the business of advising others, either directly or through publications or writings, as to the value of securities or as to the advisability of investing in, purchasing, or selling securities, or who, for compensation and as a part of a regular business, issues or promulgates analyses or reports concerning securities. “Investment adviser” also includes financial planners and other persons who, as an integral component of other financially related services, provide the foregoing investment advisory services to others for compensation and as part of a business or who hold themselves out as providing the foregoing investment advisory services to others for compensation. “Investment adviser” does not include:

a. An investment adviser representative;

b. A depository institution, which term includes a person organized, chartered, or holding an authorization certificate under the laws of this state or the United States which authorizes the person to receive deposits including a savings, share, certificate, or deposit account, and which is supervised and examined for the protection of depositors by an official or agency of this state or the United States; and a trust company or other institution authorized by federal or Alabama law to exercise fiduciary powers of the type a national bank is permitted to exercise under the authority of the Comptroller of the Currency and is supervised and examined by an official or agency of this state or the United States; but which does not include an insurance company or other organization primarily engaged in the insurance business, or a Morris Plan bank, industrial loan company, or a similar bank or company unless its deposits are insured by a federal agency;

c. A lawyer, accountant, engineer, or teacher whose performance of investment advisory services is solely incidental to the practice of that person’s profession;

d. A broker-dealer or its agent whose performance of investment advisory services is solely incidental to the conduct of its business as a broker-dealer and who receives no special compensation for the investment advisory services;

e. A publisher, employee, or columnist of a newspaper, news magazine, or business or financial publication, or an owner, operator, producer, or employee of a cable, radio or television network, station, or production facility if the financial or business news published or disseminated is made available to the general public and the content does not consist of rendering advice on the basis of the specific investment situation of each client;

f. An insurance company, its employees, or agents who are engaged exclusively in the sale or distribution of life, health, or casualty insurance or insurance related products.

(19) INVESTMENT ADVISER REPRESENTATIVE. Any partner, officer, director of (or a person occupying a similar status or performing similar functions) or other individual employed by or associated with an investment adviser, except clerical or ministerial personnel, who:

a. Makes any recommendation or otherwise renders advice regarding securities,

b. Manages accounts or portfolios of clients,

c. Determines which recommendation or advice regarding securities should be given,

d. Solicits, offers, or negotiates for the sale of or sells investment advisory services, unless the solicitation, offering, or selling activities are solely incidental to his or her profession and such person is a dealer or salesman registered under Section 8-6-3 and the person would not be an investment adviser representative except for the performance of activities described in subdivision (18)d. of this section, or

e. Supervises employees who perform any of the foregoing.

(20) OFFICER. A president, vice-president, treasurer, secretary, comptroller, or any other person performing similar functions with respect to any organization whether incorporated or unincorporated.

(21) APPLICANT. A person, natural or otherwise, executing or submitting an application for registration.

(22) REGISTRANT. An applicant for whom a registration has been declared effective by the commission.

(23) AFFILIATE. A person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, an applicant or registrant.

(24) CONTROLLING PERSON, CONTROL, CONTROLLING, CONTROLLED BY, UNDER COMMON CONTROL WITH. The possession, directly, or indirectly, or the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract or otherwise.

(25) SALESMAN. An agent, as hereinabove defined.

(Acts 1959, No. 542, p. 1318, §9; Acts 1975, No. 1044, p. 2095, §1; Acts 1990, No. 90-527, p. 772, §1.)

§ 8-6-3 Registration and Bonds of Dealers, Agents, Investment Advisers, Etc

(a) It is unlawful for any person to transact business in this state as a dealer or agent for securities unless he or she is registered under this article. It is unlawful for any dealer or issuer to employ an agent unless the agent is registered.

(b) It is unlawful for any person to transact business in this state as an investment adviser or as an investment adviser representative unless:

(1) He or she is so registered under this article;

(2) His or her only clients in this state are investment companies as defined in the Investment Company Act of 1940, other investment advisers, broker-dealers, banks, trust companies, savings and loan associations, insurance companies, employee benefit plans with assets of not less than $1,000,000, and governmental agencies or instrumentalities, whether acting for themselves or as trustees with investment control, or other institutional investors as are designated by rule or order of the commission; or

(3) He or she has no place of business in this state and during any period of 12 consecutive months does not direct business communications in this state in any manner to more than five clients, other than those specified in subdivision (2), whether or not he, she, or any of the persons to whom the communications are directed is then present in this state.

(c) It is unlawful for any investment adviser required to be registered to employ an investment adviser representative unless the investment adviser representative is registered under this article. The registration of an investment adviser representative is not effective during any period when he or she is not employed by an investment adviser registered under this article. When an investment adviser representative begins or terminates employment with an investment adviser, the investment adviser shall promptly notify the commission.

(d) A dealer, agent, investment adviser, or investment adviser representative may apply for registration by filing with the Securities Commission, or its designee, an application, together with a consent to service of process pursuant to Section 8-6-12 and payment of the fee prescribed in subsection (h) of this section. The application shall contain whatever information the commission requires concerning such matters as:

(1) The applicant’s form and place of organization;

(2) The applicant’s proposed method of doing business;

(3) The qualifications and business history of the applicant and, in the case of a dealer or investment adviser, any partner, officer, or director, any person occupying a similar status or performing similar functions, or any person directly or indirectly controlling the dealer or investment adviser;

(4) Any injunction or administrative order or conviction of a misdemeanor involving moral turpitude, a security or any aspect of the securities business, or any conviction of a felony;

(5) The applicant’s financial condition and history; and

(6) Any information to be furnished or disseminated to any client or prospective client, if the applicant is an investment adviser.

(e) The commission, by rule or order, shall require all or any class of applicants to post surety bonds, or cash, in an amount not less than $50,000, and shall determine their conditions.

(f) If no order to the contrary is in effect and no proceeding is pending under subsection (j), registration becomes effective at 5:00 p.m. on the sixtieth day after an application is filed. The Securities Commission may specify an earlier effective date, and it may by order defer the effective date until 5:00 p.m. of the sixtieth day after the filing of any amendment. The commission shall require as conditions of registration that:

(1) All or any class of applicants and, in the case of a corporation or partnership, the officers or partners, pass an examination, either written or oral, the form, content, and conduct of which the commission shall prescribe by rule or order.

(2) A dealer shall have and maintain a minimum net capital as the commission shall prescribe by rule or order. The commission may establish by rule minimum financial requirements for investment advisers, which may include different requirements for those investment advisers who maintain custody of clients’ funds or securities or who have discretionary authority over the same and those investment advisers who do not.

(3) Every registration expires December 31 unless renewed as provided in this section.

(g) Registration of a dealer, agent, investment adviser, or investment adviser representative may be renewed by filing with the Securities Commission, or its designee, prior to the expiration thereof, a renewal application. The renewal application shall contain such information as the commission may require to indicate any material change in the information contained in the original application or any renewal application for registration filed with the commission, or its designee, by the applicant, payment of the prescribed fee, and a bond as provided in subsection (e), if the financial condition of the registrant requires such bond. In order to continue the effectiveness of registration and to entitle the dealer or adviser to a renewal thereof, such registrant shall file a financial statement prepared in accordance with generally accepted accounting principles and certified by an independent certified public accountant showing the financial condition of such registrant at the close of its fiscal period. This statement shall be filed with the commission, or its designee, within 60 days after the close of the registrant’s fiscal period unless an extension of time is granted by the commission. The commission shall accept for filing a financial statement in the form required to be filed with the United States Securities and Exchange Commission from those registrants who are registered therewith.

(h) The fee for initial or renewal registration shall be two hundred fifty dollars ($250) for a dealer, seventy dollars ($70) for an agent, two hundred fifty dollars ($250) for an investment adviser, and seventy dollars ($70) for an investment adviser representative. The fee for initial or renewal registration of an investment adviser or investment adviser representative shall be deposited in the Alabama Securities Commission Fund in the State Treasury to be drawn upon by the commission for its use in administration of this article. When an application is denied or withdrawn, the Securities Commission shall retain the fee.

(i) Every registered dealer and investment adviser shall make and keep such accounts and other records as the Securities Commission by rule prescribes. All records so required shall be preserved for five years unless the commission prescribes otherwise for particular types of records. The commission may require that certain information be furnished or disseminated by a registrant as necessary or appropriate in the public interest or for the protection of investors and advisory clients. To the extent determined by the commission in its discretion, information furnished to clients or prospective clients of an investment adviser pursuant to the Investment Advisers Act of 1940 and the rules thereunder may be used in whole or partial satisfaction of this requirement. All the records of any registrant are subject at any time or from time to time to such reasonable periodic, special, or other examinations by representatives of the commission, within or without this state, as the commission deems necessary or appropriate in the public interest or for the protection of investors.

(j) The Securities Commission may by order deny, suspend, or revoke any registration, or censor or bar any applicant or registrant or any officer, director, partner, or person occupying a similar status or performing similar functions for a registrant, from employment with a dealer or investment adviser, or restrict or limit a registrant as to any function or activity of the business for which registration is required in this state if the commission finds that the order is in the public interest and that the applicant or registrant or, in the case of a dealer or investment adviser, any partner, officer, or director, any person occupying a similar status or performing similar functions, or any person directly or indirectly controlling the dealer or investment adviser:

(1) Has filed an application for registration under this section which, as of its effective date or as of any date after filing in the case of an order denying effectiveness, was incomplete in any material respect or contained any statement which was, in the light of the circumstance under which it was made, false or misleading with respect to any material fact;

(2) Has willfully violated or willfully failed to comply with any provisions of this article, or a predecessor act, or any rule or order under this article, or a predecessor act;

(3) Has been convicted of any misdemeanor involving moral turpitude, a security, or any aspect of the securities business or any felony;

(4) Is permanently or temporarily enjoined by any court of competent jurisdiction from engaging in or continuing any conduct or practice involving any aspect of the securities business;

(5) Is the subject of an order of the commission denying, suspending, or revoking registration as a dealer, agent, investment adviser, or investment adviser representative;

(6) Is the subject of an order, adjudication, or determination entered within the past 10 years by a securities or commodities agency or a national securities exchange or association registered under the Securities Exchange Act of 1934, or an administrator of another state, or a court of competent jurisdiction that the person has violated the Securities Act of 1933, the Securities Exchange Act of 1934, the Investment Advisers Act of 1940, the Investment Company Act of 1940, the Commodity Exchange Act, or the federal mail and wire fraud statutes, or the securities, investment adviser, or commodities law of any other state; but the commission may not enter any order under this subsection on the basis of an order unless that order was based on facts which would currently constitute a ground for an order under this section;

(7) Has engaged in dishonest or unethical practices in the securities business;

(8) Is insolvent, either in the sense that his or her liabilities exceed his or her assets or in the sense that he or she cannot meet his or her obligations as they mature, but the commission may not enter an order against a dealer or investment adviser under this subsection without a finding of insolvency as to the dealer or investment adviser;

(9) Has not complied with a condition imposed by the commission under subsection (f), or is not qualified on the basis of such factors as training, experience, or knowledge of the securities business;

(10) Has failed reasonably to supervise his or her agents or employees if he or she is a dealer, or his or her investment adviser representatives or employees if he or she is an investment adviser to assure their compliance with this article; or

(11) Has failed to pay the proper filing fee, but the commission may enter only a denial order under this subsection, and it shall vacate any such order when the deficiency has been corrected.

The commission may by order summarily postpone or suspend registration pending final determination of any proceeding under this subsection.

(k) If the Securities Commission finds that any registrant or applicant for registration is no longer in existence, has ceased to do business as a dealer, agent, investment adviser, or investment adviser representative, is subject to an adjudication of mental incompetence or to the control of a committee, conservator, or guardian, or cannot be located after reasonable search, the commission may by order cancel the registration or application.

(Acts 1959, No. 542, p. 1318, §2; Acts 1969, No. 605, p. 1093, §1; Acts 1971, No. 2243, p. 3598, §§1, 2; Acts 1979, No. 79-462, p. 827, §1; Acts 1988, 1st Ex. Sess., No. 88-722, p. 112; Acts 1990, No. 90-527, p. 772, §1; Act 2009-774, p. 2401, §1; Act 2018-275, §1.)

§ 8-6-4 Registration of Securities - Required; Exceptions

It is unlawful for any person to offer or sell any security in this state unless:

(1) It is registered under this article;

(2) The security is exempt from registration under Section 8-6-10; or

(3) The transaction is exempt under Section 8-6-11.

(Acts 1959, No. 542, p. 1318, §3; Acts 1990, No. 90-527, p. 772, §1.)

§ 8-6-5 Registration of Securities - Registration by Notification

(a) The following securities may be registered by notification, whether or not they are also eligible for registration by coordination under Section 8-6-6:

(1) Any security whose issuer and any predecessors have been in continuous operation for at least five years if:

a. There has been no default during the current fiscal year or within the three preceding fiscal years in the payment of principal, interest, or dividends on any security of the issuer, or any predecessor, with a fixed maturity or a fixed interest or dividend provision; and

b. The issuer and any predecessors during the past three fiscal years have had average net earnings determined in accordance with generally accepted accounting practices which are applicable to all securities without a fixed maturity or a fixed interest or dividend provision and which:

1. Equal at least five percent of the amount of securities without a fixed maturity or a fixed interest or dividend provision outstanding at the date the registration statement is filed, (as measured by the maximum offering price or the market price on a day selected by the registrant within 30 days before the date of filing the registration statement, whichever is higher, or, if there is neither a readily determinable market price nor an offering price, book value on a day selected by the registrant within 90 days of the date of filing the registration statement); or

2. If the issuer and any predecessors have not had any securities without a fixed maturity or a fixed interest or dividend provision outstanding for three full fiscal years, equal at least five percent of the amount (as measured by the maximum public offering price) of such securities which will be outstanding if all the securities being offered or proposed to be offered, whether or not they are proposed to be registered or offered in this state, are issued.

(2) Any security, other than a certificate of interest or participation in an oil, gas, or mining title or lease or in payments out of production under such a title or lease, registered for nonissuer distribution if any security of the same class has ever been registered under this article, or a predecessor act, or the security being registered was originally issued pursuant to an exemption under this article, or a predecessor act.

(3) Any national market system security under Section 11A of the Securities Exchange Act of 1934, including any other security of the same issuer which is of senior or substantially equal rank, any security called for by subscription rights or warrants so designated or approved, and any warrant or right to purchase or subscribe to any of the foregoing; provided, however, that the Securities Commission may by rule limit the application of this subdivision (3) if it finds such action to be in the public interest.

(b) A registration statement under this section shall contain the following information and be accompanied by the following documents, in addition to payment of the registration fee prescribed in Section 8-6-8 and, if required under Section 8-6-12, a consent to service of process meeting the requirements of that section:

(1) A statement demonstrating eligibility for registration by notification;

(2) With respect to the issuer, its name, address, and form of organization, the state or foreign jurisdiction and the date of its organization, and the general character and location of its business;

(3) A description of the securities being registered;

(4) Total amount of securities to be offered and amount of securities to be offered in this state;

(5) The price at which the securities are to be offered for sale to the public, any variation therefrom at which any portion of the offering is to be made to any person other than an underwriting and selling discounts or commissions, and the estimated maximum aggregate underwriting and selling discounts or commissions and finders’ fees, including cash, securities, or anything else of value;

(6) Names and addresses of the managing underwriters and a description of the plan of distribution of any securities which are to be offered otherwise than through an underwriter;

(7) Description of any options outstanding or to be created in connection with the securities being offered;

(8) Any adverse order or judgment previously entered in connection with the offering by any court or the Securities and Exchange Commission;

(9) A copy of an offering circular or prospectus to be used in connection with the offering;

(10) In the case of any registration under subdivision (a) (2) of this section which does not also satisfy the conditions of subdivision (a) (1) of this section, a balance sheet of the issuer as of a date within four months prior to the filing of the registration statement and a summary of earnings for each of the two fiscal years preceding the date of the balance sheet and for any period between the close of the last fiscal year and the date of the balance sheet or for the period of the issuer’s and any predecessor’s existence if less than two years.

(c) If no order to the contrary is in effect and no proceeding is pending under Section 8-6-9, a registration statement under this section automatically becomes effective at 3:00 P.M. central standard time on the fifth full business day after the filing of the registration statement or the last amendment, or at such earlier time as the Securities Commission determines.

(Acts 1959, No. 542, p. 1318, §4; Acts 1990, No. 90-527, p. 772, §1.)

§ 8-6-6 Registration of Securities - Registration of Certain Securities by Coordination

(a) Any security for which a registration statement has been filed under the Securities Act of 1933 in connection with the same offering may be registered by coordination.

(b) A registration statement under this section shall contain the following information and be accompanied by the following documents, in addition to payment of the registration fee prescribed in Section 8-6-8:

(1) Two copies of the prospectus filed under the Securities Act of 1933, together with all amendments thereto;

(2) If the Securities Commission requests, any other information or copies of any other documents filed under the Securities Act of 1933;

(3) The amount of securities to be offered in this state;

(4) The states in which a registration statement or similar document in connection with the offering has been or is expected to be filed;

(5) Any adverse order or judgment previously entered in connection with the offering by any court or the Securities and Exchange Commission;

(6) An undertaking to forward promptly all amendments to the federal registration statement, other than an amendment which merely delays the effective date.

(c) A registration statement under this section automatically becomes effective at the moment the federal registration statement becomes effective if all the following conditions are satisfied:

(1) No order to the contrary is in effect;

(2) The registration statement has been on file with the Securities Commission for at least five full business days; and

(3) A statement; of the maximum and minimum proposed offering prices and the maximum underwriting discounts and commissions has been on file for one full business day, or such shorter period as the commission permits by rule or otherwise, and the offering is made within those limitations. The registrant shall promptly notify the commission by telephone or telegram of the date and time when the federal registration statement became effective and the content of the price amendment, if any, and shall promptly file a posteffective amendment containing the information and documents in the price amendment. “Price amendment” means the final federal amendment which includes a statement of the offering price, underwriting and selling discounts or commissions, amount of proceeds, conversion rates, call prices, and other matters dependent upon the offering price.

(d) Upon failure to receive the required notification and posteffective amendment with respect to the price amendment, the commission may enter an order denying effectiveness to the registration statement or suspending its effectiveness until compliance with subsection (c) of this section, if the commission promptly notifies the registrant by telephone or telegram, and promptly confirms by letter or telegram when it notifies by telephone, of the issuance of the order. If the registrant proves compliance with the requirements of subsection (c) of this section as to notice and posteffective amendment, the order is void as of the time of its entry. The commission may by rule or otherwise waive either or both of the conditions specified in subdivisions (c) (2) and (c) (3) of this section. If the federal registration statement becomes effective before all these conditions are satisfied and they are not waived, the registration statement automatically becomes effective as soon as all the conditions are satisfied. If the registrant advises the commission of the date when the federal registration statement is expected to become effective, the commission shall promptly advise the registrant by telephone or telegram at the registrant’s expense whether all the conditions are satisfied and whether it then contemplates the institution of a proceeding under Section 8-6-9, but this advice by the commission does not preclude the institution of such a proceeding at any time.

(Acts 1959, No. 542, p. 1318, §5; Acts 1990, No. 90-527, p. 772, §1.)

§ 8-6-7 Registration of Securities - Registration by Qualification

(a) Any security may be registered by qualification.

(b) A registration statement under this section shall contain the following information and be accompanied by the following documents in addition to payment of the registration fee prescribed in Section 8-6-8 and, if required under Section 8-6-12, a consent to service of process meeting the requirements of that section:

(1) With respect to the issuer and any significant subsidiary, its name, address and form of organizations, the state or foreign jurisdiction and date of its organization, the general character and location of its business and a description of its physical properties and equipment;

(2) With respect to every director and officer of the issuer or person occupying a similar status or performing similar functions, his name, address, and principal occupation for the past five years, the amount of securities of the issuer held by him as of the date of the offering and a record of any securities of the issuer held by him previous to the filing of the application and the offering date and the remuneration paid to all such persons in the aggregate during the past 12 months and estimated to be paid during the next 12 months, directly or indirectly, by the issuer and its predecessors, parents, and subsidiaries;

(3) With respect to any person not named in subdivision (b) (2), owning of record, or beneficially if known, 10 percent or more of the outstanding shares of any class of equity security of the issuer, the information specified in subdivision (b) (2) of this section other than his occupation;

(4) With respect to every promoter not named in subdivision (b) (2) of this section, if the issuer was organized within the past three years, the information specified in subdivision (b) (2), any amount paid to him and the consideration for any such payment;

(5) The capitalization and long-term debt, on both a current and a pro forma basis, of the issuer and any significant subsidiary, including a description of each security outstanding or being registered or otherwise offered, and a statement of the amount and kind of consideration, whether in the form of cash, physical assets, services, patents, goodwill, or anything else, for which the issuer or any subsidiary has issued any of its securities within the past two years or is obligated to issue any of its securities;

(6) The kind and amount of securities to be offered, the amount to be offered in this state, the proposed offering price and any variation therefrom at which any portion of the offering is to be made to any persons except as underwriting and selling discounts and commissions, the estimated aggregate underwriting and selling discounts or commissions and finders’ fees, including separately cash, securities, or anything else of value to accrue to the underwriters in connection with the offering, the estimated amounts of other selling expenses and legal, engineering and accounting expenses to be incurred by the issuer in connection with the offering, the name and address of every underwriter and every recipient of a finder’s fee, a copy of any underwriting or selling group agreement pursuant to which the distribution is to be made or the proposed form of any such agreement whose terms have not yet been determined, and a description of the plan of distribution of any securities which are to be offered otherwise than through an underwriter;

(7) The estimated cash proceeds to be received by the issuer from the offering, the purposes for which the proceeds are to be used by the issuer, the amount to be used for each purpose, the order or priority in which the proceeds will be used for the purpose stated, the amounts of any funds to be raised from other sources to achieve the purposes stated and the sources of any such funds and, if any part of the proceeds is to be used to acquire any property, including goodwill, otherwise than in the ordinary course of business, the names and addresses of the vendors and the purchase price;

(8) A description of any stock options or other security options outstanding or to be created in connection with the offering, together with the amount of any such options held or to be held by every person required to be named in subdivisions (b) (2), (b) (3), (b) (4), (b) (5) or (b) (7) of this section and by any persons who hold or will hold 10 percent or more in the aggregate of any such options;

(9) The states in which a registration statement or similar document in connection with the offering has been or is expected to be filed;

(10) Any adverse order or judgment previously entered in connection with the offering by any court or the securities and exchange commission and a description of any pending litigation or proceeding to which the issuer is a party and which materially affects its business or assets, including any such litigation or proceeding known to be contemplated;

(11) Six copies of any prospectus or circular intended as of the effective date to be used in connection with the offering;

(12) A specimen or copy of the security being registered, a copy of the issuer’s articles of incorporation and bylaws as currently in effect, and a copy of any indenture or other instrument covering the security to be registered;

(13) A signed or conformed copy of an opinion of counsel as to the legality of the security being registered, which shall state whether the security when sold will be legally issued, fully paid and nonassessable, and, if a debt security, a binding obligation of the issuer;

(14) A balance sheet of the issuer as of a date within four months prior to the filing of the registration statement, a profit and loss statement and analysis of surplus for each of the three fiscal years preceding the date of the balance sheet and for any period between the close of the last fiscal year and the date of the balance sheet or for the period of the issuer’s and any predecessor’s existence if less than three years, and, if any part of the proceeds of the offering is to be applied to the purchase of any business, the same financial statements which would be required if that business were the registrant.

(c) A registration statement under this section becomes effective when the Securities Commission so orders. The commission may require as a condition of registration under this section that a prospectus containing any designated part of the information specified in subsection (b) of this section to be sent or given to each person to whom an offer is made before or concurrently with:

(1) The first written offer made to him, otherwise than by means of a public advertisement, by or for the account of the issuer or any other person on whose behalf the offering is being made, or by any underwriter or dealer who is offering part of an unsold allotment or subscription taken by him as a participant in the distribution,

(2) The confirmation of any sale made by or for the account of any such person,

(3) Payment pursuant to any such sale, or

(4) Delivery of the security pursuant to any such sale, whichever first occurs; but the commission shall accept for use under any such requirement a current prospectus or offering circular regarding the same securities filed under the Securities Act of 1933 or regulations thereunder.

(Acts 1959, No. 542, p. 1318, §6; Acts 1979, No. 79-462, p. 827, §2; Acts 1990, No. 90-527, p. 772, §1.)

§ 8-6-8 Registration of Securities - Registration Statement; Conditions Precedent; Bond; Notice of Action; Fees; Quarterly Reports and Financial Statements; Discharge from Supervision

(a) A registration statement on securities may be filed by the issuer, any other person on whose behalf the offering is to be made, or a registered dealer. Any document filed under this article within five years preceding the filing of a registration statement may be incorporated by reference in the registration statement to the extent that the document is currently accurate. The commission may permit, by rule or otherwise, the omission of any item of information or document from any registration statement.

(b) The Securities Commission may require as a condition of registration by qualification or coordination that: (1) proceeds from the sale of the registered security be impounded until the issuer receives a specified amount, or (2) any security issued within the past three years, or to be issued, to a promoter for a consideration substantially different from the public offering price or to any person for a consideration other than cash be delivered in escrow to him or her or to some other depository satisfactory to him or her under an escrow agreement that the owners of such securities shall not be entitled to sell or transfer such securities or to withdraw such securities from escrow until all other stockholders who have paid for their stock in cash shall have been paid a dividend or dividends aggregating not less than six percent of the initial offering price shown to the satisfaction of the commission to have been actually earned on the investment in any common stock so held. The commission shall not reject a depository solely because of location in another state. In case of dissolution or insolvency during the time such securities are held in escrow, the owner of such securities shall not participate in the assets until after the owners of all other securities shall have been paid in full.

(c) The Securities Commission shall take official action on the application for registration by qualification within 60 days after the application has been filed and give written notice thereof, to the applicant or applicants. If the application is denied, the notice shall state the grounds for denial or, if action is delayed, the notice shall state the reasons for the delay.

(d) For the registration of securities there shall be paid to the Securities Commission a filing fee of $40, plus a registration fee of one tenth of one percent of the aggregate offering price of the securities which are to be offered in this state, but the registration fee shall in no case be more than one thousand five hundred dollars ($1,500) nor less than one hundred dollars ($100). When a registration statement is withdrawn before the effective date or a pre-effective order is entered under Section 8-6-9, the commission shall retain the filing and registration fees. An open-end management company, a face amount certificate company, or a unit investment trust, as defined in the Investment Company Act of 1940, may register an indefinite amount of securities under a registration statement. Such registrant, at the time of filing, shall pay the filing fee of one hundred dollars ($100) and a registration fee of one thousand five hundred dollars ($1,500) and within 60 days after the end of each year during which its registration statement is effective, the registrant shall file a report on a form the commission, by rule, adopts, specifying its sale of securities to persons in this state during such year. Such registrant shall pay the same registration fee each year during which the registration statement remains in effect.

(e) When securities are registered, they may be offered and sold by the issuer, any other person on whose behalf they are registered, or by any registered dealer. Every registration statement is effective for one year from its effective date, or any longer period during which the security is being offered or distributed in a nonexempted transaction by or for the account of the issuer or other person on whose behalf the offering is being made or by any underwriter or dealer who is still offering part of an unsold allotment or subscription taken by him or her as a participant in the distribution, except during the time an order is in effect under Section 8-6-9. All outstanding securities of the same class as a registered security are considered to be registered for the purpose of any nonissuer transaction: (1) so long as the registration statement is effective, and (2) between the thirtieth day after the entry of any order suspending or revoking the effectiveness of the registration statement under Section 8-6-9, if the registration statement did not relate in whole or in part to a nonissuer distribution, and one year from the effective date of the registration statement. A registration statement which has become effective may not be withdrawn for a period of one year from its effective date if any securities of the same class are outstanding. A registration statement may be withdrawn otherwise only in the discretion of the commission.

(f) The Securities Commission may require the person who filed the registration statement to file reports, but not more often than quarterly, to keep reasonably current the information contained in the registration statement and to disclose the progress of the offering with respect to securities registered by coordination and notification; provided, however, that where a registration statement has been filed by a person other than the issuer or an affiliate of the issuer, the commission may require such person to file such reports on an annual basis only.

(g) Every issuer whose securities have been registered by qualification and the registration of whose securities has not been cancelled and who has not been discharged from filing further quarterly reports under the provisions of subsection (i) of this section shall file within 30 days after the close of business on December 31, March 31, June 30, and September 30 of each year and at such other reasonable times as may be required by the Securities Commission, a statement, verified under oath by some person having actual knowledge of the facts therein stated, setting forth, in such form as may be prescribed by the commission, the financial condition, the amount of assets and liabilities of such issuer on the above date and such other information as the commission may require. If any issuer subject to the provisions of this subsection shall willfully fail or refuse to comply with any of the provisions of this subsection and shall continue to so fail or refuse for 30 days after notice or demand, the registration statement of the issuer’s securities shall thereupon be revoked, and it shall thereafter be unlawful for any such issuer, his or her agent or agents, any dealer or salesman to sell such securities in this state.

(h) Any issuer, whose securities have been registered by qualification as provided in Section 8-6-7, who has completed the sale of the securities so registered, or who desires to discontinue the sale of said registered securities, and who desires to be discharged from further supervision of the Securities Commission or from further compliance with the Alabama securities law may file with the commission a notice in writing to such effect, and the commission may thereupon enter an order cancelling the registration of such securities; and such issuer shall thereupon be discharged from filing any financial report except as the commission may require up to and including the date of the filing of the notice as hereinabove provided. No such notice may be filed within one year after the effective date of the registration statement if any securities of the same class as those registered are outstanding.

(Acts 1959, No. 542, p. 1318, §7; Acts 1969, No. 605, p. 1093, §2; Acts 1979, No. 79-462, p. 827, §3; Acts 1990, No. 90-527, p. 772, §1; Act 2009-774, p. 2401, §1.)

§ 8-6-9 Registration of Securities - Denial, Suspension and Revocation of Registration

The Securities Commission shall issue an order denying effectiveness to, or suspending or revoking the effectiveness of, any registration statement in the sale of securities if it finds that the order is in the public interest and that:

(1) The registration statement, as of its effective date or as of any earlier date in the case of an order denying effectiveness, is incomplete in any material respect or contains any statement which was, in the light of the circumstances under which it was made, false or misleading with respect to any material fact.

(2) Any provision of this article or any rule, order, or condition lawfully imposed under this article has been willfully violated in connection with the offering by:

a. Any person filing the registration statement;

b. The issuer, any partner, officer, or director of the issuer, any person occupying a similar status or performing similar functions, or any person directly or indirectly controlling or controlled by the issuer, but only if the person filing the registration statement is directly or indirectly controlled by or acting for the issuer; or

c. Any underwriter.

(3) The issuer, any partner, officer, or director of the issuer, any person occupying a similar status or performing similar functions, or any person directly or indirectly controlling the issuer, or any underwriter has:

a. Willfully violated or willfully failed to comply with any provision of this article or any rule or order under this article, or any predecessor act; or

b. Has been convicted of a felony or any misdemeanor involving moral turpitude, a security, or any aspect of the securities business.

(4) The security registered or sought to be registered is the subject of a permanent injunction or temporary restraining order of any court of competent jurisdiction entered under any other federal or state act applicable to the offering, but:

a. The commission may not institute a proceeding against an effective registration statement under this subdivision more than one year from the date of the injunction relied on; and

b. It may not enter an order under this subdivision on the basis of an injunction entered under any other state act unless that order or injunction was based on facts which would currently constitute a ground for a stop order under this section.

(5) The issuer’s enterprise or method of business includes or would include activities which are illegal where performed.

(6) The offering has worked or tended to work a fraud upon purchasers or would so operate.

(7) The offering is being made on terms that are unfair, unjust, or inequitable.

(8) When a security is sought to be registered by notification, it is not eligible for such registration.

(9) When a security is sought to be registered by coordination, there has been a failure to comply with the undertaking required by subdivision (b) (6) of Section 8-6-6.

(10) The offering has been or would be made with unreasonable amounts of underwriters’ and sellers’ discounts, commissions or other compensation, promoters’ profits or participation, or unreasonable amounts or kinds of options.

(11) The applicant or registrant has failed to pay the proper registration fee, but the commission may enter only a denial order under this subdivision, and it shall vacate any such order when the deficiency has been corrected.

(Acts 1959, No. 542, p. 1318, §8; Acts 1969, No. 605, p. 1093, §3; Acts 1990, No. 90-527, p. 772, §1.)

§ 8-6-10 Registration of Securities - Exempt Securities

Sections 8-6-4 through 8-6-9 shall not apply to any of the following securities:

(1) Any security, including a revenue obligation, issued or guaranteed by the United States, any state, any political subdivision of a state, any agency, corporate, or other instrumentality of one or more of the foregoing; or any certificate of deposit for any of the foregoing.

(2) Any security issued or guaranteed by Canada, any Canadian province, any political subdivision of any province, any agency, corporate, or other instrumentality of one or more of the foregoing or any other foreign government with which the United States currently maintains diplomatic relations if the security is recognized as a valid obligation by the issuer or guarantor.

(3) Any security issued by and representing an interest in or a debt of, or guaranteed by, any bank organized under the laws of the United States or any bank, savings institution, or trust company organized and supervised under the laws of this state.

(4) Any security issued by and representing an interest in, a debt of, or guaranteed by any federal savings and loan association or any building and loan or similar association organized under the laws of this state.

(5) Any security issued or guaranteed by any federal credit union or any credit union, industrial loan association, or similar association organized and supervised under the laws of this state.

(6) Any security issued or guaranteed by any railroad, other common carrier, public utility, or holding company which is any of the following:

a. Subject to the jurisdiction of the Interstate Commerce Commission.

b. A registered holding company under the Public Utility Holding Company Act of 1935 or a subsidiary of a company within the meaning of that act.

c. Regulated in respect to its rates and charges by a governmental authority of the United States or any state.

d. Regulated in respect to the issuance or guarantee of the security by a governmental authority of the United States, any state, Canada, or any Canadian province.

(7) Any national market system security under Section 11A of the Securities Exchange Act of 1934 (including any other security of the same issuer which is of senior or substantially equal rank; any security called for by subscription rights or warrants so designated or approved; and any warrant or right to purchase or subscribe to any of the foregoing) which is so designated or approved for designation upon notice of issuance on an interdealer quotation system operated by a national securities association registered under Section 15A of the Securities Exchange Act of 1934, or any security (including any other security of the same issuer which is of senior or substantially equal rank; any security called for by subscription rights or warrants so designated or approved; and any warrant or right to purchase or subscribe to any of the foregoing) which is listed or approved for listing upon notice of issuance on a national securities exchange registered under Section 6 of the Securities Exchange Act of 1934, if the listing or designation criteria applicable to the issuer of that security provide minimum corporate governance standards substantially equivalent to those applicable to securities on the New York Stock Exchange, the American Stock Exchange, or the National Association of Securities Dealers National Market System as of January 1, 1991. The commission may by order deny, revoke, or suspend the exemption of a specific issue of securities or by rule any category of securities when necessitated by the public interest and for the protection of investors.

(8) Any security issued by any person organized and operated not for private profit but exclusively for religious, educational, benevolent, charitable, fraternal, social, athletic, or reformatory purposes or as a chamber of commerce, trade, or professional association, provided the issuer first files with the commission a written notice specifying the terms of the offer and the commission does not by order disallow the exemption within 15 days thereof.

(9) Any commercial paper which arises out of a current transaction or the proceeds of which have been or are to be used for current transactions and which evidences an obligation to pay cash within nine months of the date of issuance, exclusive of days of grace, or any renewal of the paper which is likewise limited or any guarantee of the paper or of any renewal.

(10) Any investment contract issued in connection with an employee’s stock purchase, savings, pension, profit-sharing, or similar benefit plan.

(11) A security issued by an issuer registered as an open-end management investment company or unit investment trust under Section 8 of the Investment Company Act of 1940 if:

a. The Securities Commission has received prior to the offer or sale of the securities:

1. A notice of intention to sell which has been executed by the issuer and which sets forth the name and address of the issuer and the description of the securities to be offered in this state; and

2. A nonrefundable filing fee of three hundred fifty dollars ($350) for an open-end management investment company with total net assets of $25,000,000 or less; a nonrefundable filing fee of seven hundred dollars ($700) for an open-end management investment company with total net assets of more than $25,000,000 but less than $100,000,000; a nonrefundable filing fee of one thousand two hundred dollars ($1,200) for an open-end management investment company with total net assets equal to or greater than $100,000,000 but less than $250,000,000; a nonrefundable filing fee of two thousand dollars ($2,000) for an open-end management investment company with total net assets equal to or greater than $250,000,000; or a nonrefundable filing fee of $200 for a unit investment trust. Fees collected under this section shall be deposited in the Alabama Securities Commission Fund in the State Treasury for the use of the Alabama Securities Commission in the administration of this article.

b. In the event any offer or sale of a security of an open-end management investment company is to be made more than 12 months after the date notice under paragraph a. is received by the director, another notice and payment of the applicable fee shall be required.

c. For the purpose of this subdivision an investment adviser is affiliated with another investment adviser if it controls, is controlled by, or is under common control with the other investment adviser.

(Acts 1959, No. 542, p. 1318, §10; Acts 1969, No. 605, p. 1093, §5; Acts 1990, No. 90-527, p. 772, §1; Acts 1991, No. 91-320, p. 584, §1; Acts 1992, No. 92-524, p. 1059, §1; Act 2009-774, p. 2401, §1; Act 2018-275, §1.)

§ 8-6-11 Registration of Securities - Exempt Transactions

(a) Except as hereinafter in this section expressly provided, Sections 8-6-3 through 8-6-9 shall not apply to any of the following transactions:

(1) Any isolated nonissuer transaction, whether effected through a dealer or not;

(2) Any nonissuer transaction in an outstanding security by a registered dealer if:

a. The issuer has a class of securities subject to registration under Section 12 of the Securities Exchange Act of 1934 and has been subject to the reporting requirements of Sections 13 or 15(d) of the Securities Exchange Act of 1934 for not less than 180 days before the transaction; or has filed and maintained with the commission for not less than 180 days before the transaction information, in such form as the commission, by rule, specifies, substantially comparable to the information which the issuer would be required to file under Section 12(b) or Section 12(g) of the Securities Exchange Act of 1934, or the securities have been the subject of an effective registration statement within 180 days before the transaction, or the issuer is required to file and has filed all reports under Section 13 of the Securities Exchange Act of 1934, or the issuer is exempted from registration by Section 12(g)(3) of the Securities Exchange Act of 1934, it or its predecessor in interest has been in existence for at least five years, the security is listed for trading on a foreign securities exchange and has been trading for at least six months and continues to trade on such exchange, and the aggregate market value of shares, the ownership of which is unrestricted, is not less than $500,000,000; or

b. The issuer is an investment company registered under the Investment Company Act of 1940 and has been subject to the reporting requirements of Section 30 of that act for not less than 180 days before the transaction; or

c. The security has a fixed maturity or a fixed interest or dividend provision and there has been no default during the current fiscal year, within the three preceding fiscal years, or during the existence of the issuer and any predecessors if less than three years in the payment of principal, interest, or dividends on the security;

(3) Any nonissuer transaction effected by or through a registered dealer pursuant to an unsolicited order or offer to buy;

(4) Any transaction between the issuer or other person on whose behalf the offering is made and an underwriter or among underwriters;

(5) Any transaction in a bond or other evidence of indebtedness secured by a real or chattel mortgage or deed of trust or by an agreement for the sale of real estate or chattels if the entire mortgage, deed of trust, or agreement, together with all the bonds or other evidences of indebtedness secured thereby, is offered and sold as a unit;

(6) Any sale or the offering for sale of any security at any judicial, executor’s, administrator’s, guardian, or conservator’s sale, or at any sale by a receiver or trustee in insolvency or bankruptcy;

(7) Any transaction executed by a bona fide pledge without any purpose of evading this article;

(8) Any offer or sale to a bank, savings institution, credit union, trust company, insurance company or investment company as defined in the Investment Company Act of 1940, pension or profit-sharing trust, or other financial institution or institutional buyer, or to a dealer, whether the purchaser is acting for itself or in some fiduciary capacity;

(9) Any transaction which is part of an issue of which there are no more than 10 purchasers [other than those designated in subdivision (a)(8) of this section] wherever located, of securities from the issuer during any period of 12 consecutive months if:

a. The issuer reasonably believes that all the buyers are purchasing for investment and not with a view to distribution, and such issuer exercises reasonable care to assure this investment intent, which reasonable care shall be presumed if the following conditions are satisfied:

1. Reasonable inquiry to determine if the purchaser is acquiring the securities for himself or herself or for other persons;

2. Written disclosure to each purchaser prior to sale that the securities have not been registered under the act and, therefore, cannot be resold unless they are registered under the act or unless an exemption from registration is available;

3. Placement of a legend on the certificate or other document that evidences the securities stating that the securities have not been registered under the act and setting forth or referring to the restrictions on transferability and sale of the securities; and

b. No commission or other remuneration is paid or given directly or indirectly for soliciting any prospective buyer; and

c. No public advertising or general solicitation is used in connection with the issue of which the transaction in reliance on this exemption is a part.

Sections 8-6-3 through 8-6-9 shall not apply to any offer made pursuant to this subdivision (a)(9) in which no sale results.

But the Securities Commission may by rule or order, as to any security or transaction or any type of security or transaction, withdraw or further condition this exemption or decrease or increase the number of purchasers permitted, or waive the conditions in paragraphs a. and b. of this subdivision (9) with or without the substitution of a limitation on remuneration.

(10) Any transaction pursuant to an offer to existing security holders of the issuer, including persons who at the time of the transaction are holders of convertible securities, nontransferable warrants or transferable warrants exercisable within not more than 90 days of their issuance, if:

a. No commission or other remuneration, other than a standby commission, is paid or given directly or indirectly for soliciting any security holder in this state; or

b. The issuer first files a notice specifying the terms of the offer and the Securities Commission does not by order disallow the exemption within the next five full business days;

(11) Any offer, but not a sale, of a security for which registration statements have been filed under both this article and the Securities Act of 1933 if no order of denial, suspension, or revocation is in effect and no public proceeding or examination looking toward such an order is pending under either act;

(12) The issuance of any stock dividend, whether the corporation distributing the dividend is the issuer of the stock or not, if nothing of value is given by stockholders for the distribution other than the surrender of a right to a cash dividend where the stockholder can elect to take a dividend in cash or stock;

(13) Any transaction incident to a right of conversion or a statutory or judicially approved reclassification, recapitalization, reorganization, quasi-reorganization, stock split, reverse stock split, merger, consolidation, or sale of assets; or

(14) An offering of securities conducted solely in this state to residents of this state in which:

a. The issuer of the security shall be a for-profit corporation or other for-profit entity, or business cooperative with its principal place of business in the State of Alabama and registered with the Secretary of State.

b. The transaction shall meet the requirements of the federal exemption for intrastate offerings in section 3(a)(11) of the Securities Act of 1933, 15 U.S.C. § 77c(a)(11), and SEC Rule 147. As such, securities must be offered to and sold only to persons who are residents of the State of Alabama at the time of purchase. Prior to any offer or sale pursuant to this exemption, the seller shall obtain documentary evidence from each prospective purchaser that provides the seller with a reasonable basis to believe that such investor is a resident of the State of Alabama.

c. The sum of all cash and other consideration to be received for all sales of the security in reliance upon this exemption shall not exceed one million dollars ($1,000,000), less the aggregate amount received for all sales of securities by the issuer within the 12 months before the first offer or sale made in reliance upon this exemption.

d. The issuer shall not accept more than five thousand dollars ($5,000) from any single purchaser unless the purchaser is an accredited investor as defined by Rule 501 SEC Regulation D, 17 C.F.R. 230.501.

e. The issuer must reasonably believe that all purchasers of securities are purchasing for investment and not for sale in connection with a distribution of the security.

f. A commission or remuneration shall not be paid or given, directly or indirectly, for any person’s participation in the offer or sale of securities for the issuer unless the person is registered as a broker-dealer or agent under the act.

g. All funds received from investors shall be deposited into a bank or depository institution authorized to do business in Alabama, and all the funds shall be used in accordance with representations made to investors.

h. Not less than 10 days prior to the use of any general solicitation or within 15 days after the first sale of the security pursuant to this exemption (provided no general solicitation has been used prior to such sale), whichever occurs first, the issuer shall provide a notice to the commission in writing or electronically on Form CF1. The notice shall specify that the issuer is conducting an offering in reliance upon this exemption and shall contain the names and addresses of the following persons:

1. The issuer;

2. Officers, directors and any control person of the issuer;

3. All persons who will be involved in the offer or sale of securities on behalf of the issuer; and

4. The bank or other depository institution in which investor funds will be deposited.

i. The issuer shall not be, either before or as a result of the offering:

1. An investment company as defined in section 3 of the Investment Company Act of 1940, 15 U.S.C. § 80a-3, or subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, 15 U.S.C. § 78m and 78o(d); or

2. An investment adviser as defined in Section 8-6-2(18) of this code, nor a person who otherwise provides investment advice as a service or for a fee.

j. The issuer shall inform all purchasers that the securities have not been registered under the act and, therefore, cannot be resold unless the securities are registered or qualify for an exemption from registration under Sections 8-6-4 through 8-6-11 of this code. In addition, the issuer shall make the disclosures required by subsection (f) or SEC Rule 147, 17 C.F.R. 230.147(f).

k. This exemption shall not be used in conjunction with any other exemption under the act except the exemption to institutional investors in Section 8-6-11(a)(8) of this code and for offers and sales to controlling persons of the issuer. Sales to controlling persons shall not count toward the limitation in paragraph (14)c.

l. This exemption shall not be available if the issuer, or any its officers, controlling people or promoters is subject to a disqualifier enumerated in Section 8-6-9 of this code.

m. Nothing in this exemption shall be construed to alleviate any person from the anti-fraud provisions in Section 8-6-17 of this code, nor shall such exemption be construed to provide relief from any other provisions of this article other than as expressly stated.

n. Every notice of exemption provided for in paragraph h. above shall be accompanied by a nonrefundable filing fee of $150. Such filing fee shall be deposited in the Alabama Securities Commission Fund in the State Treasury to be drawn upon by the commission for its use in administration of this article.

But the Securities Commission may by rule or order, as to any security or transaction of any type of security or transaction, withdraw, further condition or expand this exemption.

(b) The Securities Commission may by order deny or revoke the exemption specified in this section with respect to a specific security if it finds the sale of such security would work or tend to work a fraud upon the purchasers thereof. No order under this subsection may operate retroactively. No person may be considered to have violated this article by reason of any offer or sale effected after the entry of an order under this subsection if he or she sustains the burden of proof that he or she did not know and in the exercise of reasonable care could not have known of the order. In any proceeding under this article, the burden of proving an exemption from a definition is upon the person claiming it.

(c) Any individual, corporation, partnership, or association who makes application to the Securities Commission for any exemption from full registration under subdivision (a)(9) of this section shall be assessed a filing fee in the amount of three hundred dollars ($300) upon application for such exemption. The fee shall accompany the application and shall not be refunded whether the application is approved or rejected. Fees collected under this subsection shall be deposited in a special account in the State Treasury for the use of the commission in the administration of this article.

(Acts 1959, No. 542, p. 1318, §11; Acts 1971, No. 2244, p. 3600; Acts 1975, No. 1044, p. 2095, §2; Acts 1979, No. 79-462, p. 827, §4; Acts 1990, No. 90-527, p. 772, §1; Acts 1991, No. 91-320, p. 584, §1; Act 2009-774, p. 2401, §1; Act 2014-376, p. 1401, §1.)

§ 8-6-12 Registration of Securities - Applicability of Provisions of Article; Consent to Service of Process on Secretary of State

(a) The provisions of this article shall apply to persons who sell or offer to sell when

(1) an offer to sell is made in this state, or

(2) an offer to buy is made and accepted in this state.

(b) The provisions of this article shall apply to persons who buy or offer to buy when

(1) an offer to buy is made in this state, or

(2) an offer to sell is made and accepted in this state.

(c) An offer to sell or to buy is made in this state, whether or not either party is then present in this state, when the offer

(1) originates from this state, or

(2) is directed by the offeror to this state and received at the place to which it is directed (or at any post office in this state in the case of a mailed offer).

(d) An offer to buy or to sell is accepted in this state when acceptance

(1) is communicated to the offeror in this state, and

(2) has not previously been communicated to the offeror, orally or in writing, outside this state; and acceptance is communicated to the offeror in this state, whether or not either party is then present in this state, when the offeree directs it to the offeror in this state reasonably believing the offeror to be in this state and it is received at the place to which it is directed (or at any post office in this state in the case of a mailed acceptance).

(e)(1) Every applicant for registration as a dealer or salesman under this article and every issuer which proposes to offer a security in this state through any person acting on an agency basis in the common-law sense shall file with the security commission, in such form as it prescribes, an irrevocable consent appointing the Secretary of State to be his attorney to receive service of any lawful process in any noncriminal action or proceeding against him, or his successor, executor, or administrator, which arises under this article or any rule or order hereunder after the consent has been filed with the same force and validity as if served personally on the person filing the consent.

(2) A person who has filed such a consent in connection with a previous registration need not file another.

(3) Service may be made by leaving a copy of the process in the office of the Secretary of State, but it is not effective unless:

a. The plaintiff, who may be the Securities Commission, in an action or proceeding instituted by it, forthwith sends notice of the service and a copy of the process by registered mail to the defendant or respondent at his last address on file with the commission, and

b. The plaintiff’s affidavit of compliance with this clause is filed in the case on or before the return day of the process, if any, or within such further time as the court allows; provided however, that this subsection shall not apply to an issuer whose securities are registered by coordination with the commission.

(Acts 1959, No. 542, p. 1318, §12; Acts 1979, No. 79-462, p. 827, §5; Acts 1990, No. 90-527, p. 772, §1.)

§ 8-6-14 Filing or Registration Not Finding of Truth, Completeness, Etc., of Documents; Representations Concerning Effect of Registration or Exemption

(a) Neither the fact that an application for registration under Section 8-6-3 or a registration statement under Sections 8-6-5, 8-6-6 or 8-6-7 has been filed, nor the fact that a person or security is effectively registered constitutes a finding by the Securities Commission that any document filed under this article is true, complete, and not misleading.

(b) Neither any such fact nor the fact that an exemption or exception is available for a security or a transaction means that the Securities Commission has passed in any way upon the merits or qualifications of or recommended or given approval to any person, security, or transaction.

(c) It is unlawful to make, or cause to be made, to any prospective purchaser, customer, or client any representation inconsistent with this section.

(Acts 1959, No. 542, p. 1318, §14; Acts 1990, No. 90-527, p. 772, §1.)

§ 8-6-15 Investigations and Subpoenas by Commission

(a) The Securities Commission, in its discretion, may:

(1) Make such public or private investigations within or outside of this state as he deems necessary to determine whether any registration in the sale of securities should be granted, denied, or revoked, whether any person has violated or is about to violate any provision of this article or any rule or order hereunder, to aid in the enforcement of this article or in the prescribing of rules and forms hereunder;

(2) Require or permit any person to file a statement in writing, under oath, or otherwise as the commission may determine, as to all the facts and circumstances concerning the matter to be investigated; and

(3) Publish information concerning any violation of this article or any rule or order hereunder.

(b) For the purpose of any investigation or proceeding under this article, the Securities Commission or any officer designated by it may administer oaths and affirmations, subpoena witnesses, compel their attendance, take evidence, and require the production of any books, papers, correspondence, memoranda, agreements, or other documents or records which the commission deems relevant or material to the inquiry.

(c) In case of contumacy by or refusal to obey a subpoena issued to any person, any court of competent jurisdiction may issue, upon application by the Securities Commission, to that person an order requiring him to appear before the commission or the officer designated by it, there to produce documentary evidence if so ordered or to give evidence touching the matter under investigation or in question. Any failure to obey the order of the court may be punished by the court as a contempt of court.

(d) No person is excused from attending and testifying or from producing any document or record before the Securities Commission or in obedience to the subpoena of the commission or any officer designated by it, in any proceeding instituted by the commission, on the ground that the testimony or evidence, documentary or otherwise, required of him may tend to incriminate him or subject him to a penalty or forfeiture; but no individual may be prosecuted or subjected to any penalty or forfeiture for, or on account of, any transaction, matter, or thing concerning which he is compelled, after claiming his privilege against self-incrimination, to testify or produce evidence, documentary or otherwise, except that the individual so testifying shall not be exempt from prosecution and punishment for perjury committed in so testifying.

(Acts 1959, No. 542, p. 1318, §15; Acts 1969, No. 605, p. 1093, §6; Acts 1990, No. 90-527, p. 772, §1.)

§ 8-6-16 Administrative Cease and Desist Authority to Commission; Injunctive Relief; Appointment of Receivers or Conservators for Defendants or Defendants’ Assets; Court Ordered Rescission, Restitution, or Disgorgement for Violations

Whenever it appears to the Securities Commission that any person has engaged in or is about to engage in any act or practice constituting a violation of any provision of this article or any rule or order hereunder, it may, in its discretion, do either or both of the following:

(a) Issue a cease and desist order, with or without a prior hearing, against the person or persons engaged in the prohibited activities, directing them to cease and desist from engaging in the act or practice.

(b) Bring an action in its discretion in any court of competent jurisdiction to enjoin the act or practice and to enforce compliance with this article or any rule or order issued hereunder.

Upon a proper showing, a permanent injunction, temporary restraining order, or writ of mandamus shall be granted and a receiver or conservator may be appointed for the defendant or the defendant’s assets. In addition, upon a proper showing by the commission, the court may enter an order of rescission, restitution, or disgorgement directed at any person who has engaged in an act constituting a violation of this article or any rule or order adopted or issued pursuant to this article. The Securities Commission shall not be required to post a bond.

(Acts 1959, No. 542, p. 1318, §16; Acts 1990, No. 90-527, p. 772, §1; Acts 1992, No. 92-524, p. 1059, §1.)

§ 8-6-17 Prohibited Acts Regarding Offer, Sale, or Purchase of Securities

(a) It is unlawful for any person, in connection with the offer, sale, or purchase of any security, directly or indirectly, to:

(1) Employ any device, scheme, or artifice to defraud;

(2) Make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading; or

(3) Engage in any act, practice or course of business which operates or would operate as a fraud or deceit upon any person.

(b) It is unlawful for any person who receives, directly or indirectly, any consideration from another person for advising the other person as to the value of securities or their purchase or sale, whether through the issuance of analyses or reports or otherwise,

(1) to employ any device, scheme, or artifice to defraud the other person,

(2) to engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon the other person,

(3) acting as principal for his own account, knowingly to sell any security to or purchase any security from a client, or acting as broker for a person other than such client, knowingly to effect any sale or purchase of any security for the account of such client, without disclosing to such client in writing before the completion of such transaction the capacity in which he is acting and obtaining the consent of the client to such transaction. The prohibitions of this subdivision shall not apply to any transaction with a customer of a dealer if such dealer is not acting as an investment adviser in relation to such transaction; or

(4) to engage in dishonest or unethical practices as the commission may define by rule.

(c) In the solicitation of advisory clients, it is unlawful for any person to make any untrue statement of a material fact, or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they are made, not misleading.

(d) Except as may be permitted by rule or order of the commission, it is unlawful for any investment adviser to enter into, extend, or renew any investment advisory contract unless it provides in writing,

(1) that the investment adviser shall not be compensated on the basis of a share of capital gains upon or capital appreciation of the funds or any portion of the funds of the client;

(2) that no assignment of the contract may be made by adviser without the consent of the other party to the contract; and

(3) that the investment adviser, if a partnership, shall notify the other party to the contract of any change in the membership of the partnership within a reasonable time after the change.

(e) Subdivision (d)(1) does not prohibit an investment advisory contract which provides for compensation based upon the total value of a fund averaged over a definite period, or as of definite dates or taken as of a definite date. “Assignment,” as used in subdivision (d)(2), includes any direct or indirect transfer or hypothecation of an investment advisory contract by the assignor or of a controlling block of the assignor’s outstanding voting securities by a security holder of the assignor; but, if the investment adviser is a partnership, no assignment of an investment advisory contract is considered to result from the death or withdrawal of a minority of the members of the investment adviser having only a minority interest in the business of the investment adviser, or from the admission to the investment adviser of one or more members who, after admission, will be only a minority of the members and will have only a minority interest in the business.

(f) It is unlawful for any investment adviser to take or have custody of any securities or funds of any client if,

(1) the commission by rule prohibits custody; or

(2) in the absence of rule, the investment adviser fails to notify the commission that he has or may have custody.

(g) The commission may by rule or order adopt exemptions from subdivision (b)(3) and subdivisions (d)(1), (d)(2) and (d)(3) where such exemptions are consistent with the public interest and within the purposes fairly intended by the policy and provisions of this act.

(Acts 1959, No. 542, p. 1318, §1; Acts 1990, No. 90-527, p. 772, §1.)

§ 8-6-18 Criminal Penalties for Violations of Article; Enforcement; Scienter

(a) A person who willfully violates Section 8-6-3 or Section 8-6-4, upon conviction, shall be guilty of a Class C felony. A person that willfully violates subsection (a), (b), or (c) of Section 8-6-17, upon conviction, shall be guilty of a Class B felony. The limitations period for any prosecution under this section does not commence or begin to accrue until the discovery of the facts constituting the deception, after which the prosecution shall be commenced within five years.

(b) A person who willfully violates any provision of this chapter, other than those noted in subsection (a), or a rule adopted or order issued under this chapter, upon conviction, shall be guilty of a Class A misdemeanor.

(c) The enforcement of the provisions of this article shall be vested in the commission. It shall be the duty of the commission to see that its provisions are at all times obeyed and to take such measures and to make such investigations as will prevent or detect the violation of any provision thereof. The commission shall at once lay before the district attorney of the proper county any evidence which shall come to its knowledge of criminality under this article. In the event of the neglect or refusal of the district attorney to institute and prosecute such violation, the commission shall be authorized to proceed therein with all the rights, privileges, and powers conferred by law upon district or court attorneys including the power to appear before grand juries and to interrogate witnesses before such grand juries.

(d) Nothing in this article limits the power of the state to punish any person for any conduct which constitutes a crime by statute or at common law.

(e) In any proceeding under this article, scienter need not be alleged and proved in prosecutions involving the sale of unregistered securities or in the failure to register as a dealer, agent, investment adviser, or investment adviser representative under this article.

(Acts 1959, No. 542, p. 1318, §17; Acts 1969, No. 605, p. 1093, §7; Acts 1971, No. 2243, p. 3598, §3; Acts 1979, No. 79-462, p. 827, §6; Acts 1990, No. 90-527, p. 772, §1; Act 2009-774, p. 2401, §1; Act 2014-348, p. 1293, §1.)

§ 8-6-19 Civil Liabilities of Sellers, Agents, Etc.; Remedies of Purchasers

(a) Any person who:

(b)(1) Any person who engages in the business of advising others, for compensation, either directly or through publications or writings, as to the value of securities or as to the advisability of investing in, purchasing, or selling securities, or who, for compensation and as part of a regular business, issues or promulgates analyses or reports concerning securities in violation of subsection (b), (c), (d), (e), or (f) of Section 8-6-17, subsection (b) or (c) of Section 8-6-3, Section 8-6-14, is liable to that person, who may bring an action to recover the consideration paid for such advice and any loss due to such advice, together with interest at six percent per year from the date of payment of the consideration plus costs and reasonable attorney’s fees, less the amount of any income received from such advice.

No person may maintain an action hereunder pursuant to a violation of subsection (c) of Section 8-6-3 based solely on the fact that an investment adviser representative other than the one from whom the person received advice is unregistered.

(2) Any person who receives, directly or indirectly, any consideration from another person for advice as to the value of securities or their purchase or sale, whether through the issuance of analyses, reports, or otherwise and employs any device, scheme, or artifice to defraud such other person or engages in any act, practice, or course of business which operates or would operate as a fraud or deceit on such other person, is liable to that person, who may bring an action to recover the consideration paid for such advice and any loss due to such advice, together with interest at six percent per year from the date of payment of the consideration plus costs and reasonable attorney’s fees, less the amount of any income received from such advice.

An action based on a violation of subsection (c) of Section 8-6-17 and this section may not prevail where the person accused of the violation sustains the burden of proof that he did not know, and in the exercise of reasonable care, could not have known of the existence of the facts by reason of which the liability is alleged to exist.

(c) Every person who directly or indirectly controls a person liable under subsections (a) or (b) of this section, including every partner, officer, or director of such a person, every person occupying a similar status or performing similar functions, every employee of such a person who materially aids in the conduct giving rise to the liability, and every dealer or agent who materially aids in such conduct is also liable jointly and severally with and to the same extent as the person liable under subsection (a) or (b), unless he is able to sustain the burden of proof that he did not know, and in exercise of reasonable care could not have known, of the existence of the facts by reason of which the liability is alleged to exist.

(d) Any tender specified in this section may be made at any time before entry of judgment.

(e) Every cause of action under this section survives the death of any person who might have been a plaintiff or defendant.

(f) No person may obtain relief under this section in an action involving the failure to register unless suit is brought within two years from the date of sale. All other actions for relief under this section must be brought within the earlier of two years after discovery of the violation or two years after discovery should have been made by the exercise of reasonable care. No person may bring an action under subsection (a) of this section:

(1) If the buyer received a written offer, before the action and at a time when he owned the security, to refund the consideration paid together with interest at six percent per year from the date of payment, less the amount of any income received on the security, and he failed to accept the offer within 30 days of its receipt, or

(2) If the buyer received such an offer before the action and at a time when he did not own the security, unless he rejected the offer in writing within 30 days of its receipt.

(g) No person who has made or engaged in the performance of any contract in violation of any provision of this article or any rule or order hereunder or who has acquired any purported right under any such contract with knowledge of the facts by reason of which its making or performance was in violation, may base any action on the contract.

(h) Any condition, stipulation, or provision binding any person acquiring any security or receiving any investment advice to waive compliance with any provision of this article or any rule or order hereunder is void.

(i) The rights and remedies provided by this article are in addition to any other rights or remedies that may exist.

(j)(1) The commission may by order, if it finds such order to be in the public interest, impose an administrative assessment upon any person who violates any provision of this article or any rule or order issued under this article.

(2) Any administrative assessment imposed under this section shall not exceed $5,000 for each act or omission that constitutes the basis for an order issued under this section, except that the amount of the administrative assessment may not exceed $50,000 for any person subject to the order.

(3) For the purposes of determining the amount or extent of an administrative assessment, if any, to be imposed under this section, the commission shall consider among other factors, the frequency, persistence, and willfulness of the conduct constituting a violation of any provision of this article or any rule or order issued under this article, and the number of persons adversely affected by the conduct.

(4) The administrative assessment under this section is in addition to any other penalty, remedy, or sanction that may be imposed under this article.

(5) All assessments collected under this subsection (j) of Section 8-6-19 shall be deposited in the general fund of the state.

(k)(1) The commission may charge, in addition to any administrative assessment, fine, penalty, remedy, or sanction imposed under this article, the actual cost of any investigation resulting from any violation of any provision of this article or any violation of any rule or order issued under this article or the actual cost of any examination made by the commission pursuant to this article, to the party or parties subject to such investigation or examination. Such charge may include, but is not limited to, a per diem prorated upon the salary cost of any employee of the commission together with actual travel, housing and any and all other reasonable expenses incurred as a result of such investigation or examination.

(2) All charges assessed for costs involved pursuant to subdivision (1) of subsection (k) of Section 8-6-19 shall be deposited in the Alabama Securities Commission Fund in the State Treasury to be drawn upon by the commission for its use in the administration of this article.

(Acts 1959, No. 542, p. 1318, §18; Acts 1990, No. 90-527, p. 772, §1.)

§ 8-6-21 Commission Authorized to Swear Out Warrants of Arrest; Liability of Commission for Warrant

The Securities Commission is authorized and empowered to swear out warrants of arrest against any person violating the criminal provisions of this article, and it shall not be liable in damages or to an action for damages by reason of swearing out warrants or for causing the arrest and detention or imprisonment of any person or persons under such warrant or warrants.

(Acts 1959, No. 542, p. 1318, §20; Acts 1990, No. 90-527, p. 772, §1.)

§ 8-6-22 Duties of Director; Director Empowered to Swear Out Warrants of Arrest; Liability of Director for Warrant

The Director of the Securities Commission shall keep the records of the commission and generally perform such duties as the commission may direct. When ordered by the commission, he shall be authorized and empowered to swear out warrants of arrest against any person violating the criminal provisions of this article. He shall not be liable in damages or to an action for damages by reason of swearing out such warrant or warrants or for causing the arrest, detention, or imprisonment of any person or persons under such warrant or warrants.

(Acts 1959, No. 542, p. 1318, §20; Acts 1990, No. 90-527, p. 772, §1.)

§ 8-6-23 Making, Amending, and Rescinding Rules and Prescribing Forms by Commission

The Securities Commission may from time to time make, amend, and rescind such rules and prescribe such forms as are necessary and desirable to carry out the provisions of this article. No rules or forms may be made or prescribed unless the commission finds that the action is necessary or appropriate in the public interest or for the protection of investors and consistent with the purposes fairly intended by the policy and provisions of this article. In prescribing rules and forms the commission may cooperate with the securities administrators of the other states and the securities and exchange commission with a view to effectuating the policy of this article to achieve maximum uniformity in the form and content of registration statements, applications, and reports wherever practicable. All rules and forms of the commission shall be published.

(Acts 1959, No. 542, p. 1318, §20; Acts 1990, No. 90-527, p. 772, §1.)

§ 8-6-24 Liability for Acts Done or Omitted in Good Faith Under Rules, Forms, or Orders

No provision of this article imposing any liability applies to any act done or omitted in good faith in conformity with any rule, form, or order of the Securities Commission, notwithstanding that the rule or form may later be amended or rescinded or be determined by judicial or other authority to be invalid for any reason.

(Acts 1959, No. 542, p. 1318, §20; Acts 1990, No. 90-527, p. 772, §1.)

§ 8-6-25 Hearings to Be Public; Requests for Private Hearings

Every hearing in an administrative proceeding shall be public unless the Securities Commission, in its discretion, grants a request joined in by all the respondents that the hearing be conducted privately.

(Acts 1959, No. 542, p. 1318, §20; Acts 1990, No. 90-527, p. 772, §1.)

§ 8-6-26 Document Deemed Filed When Received

A document is deemed filed when it is received by the Securities Commission.

(Acts 1959, No. 542, p. 1318, §20; Acts 1990, No. 90-527, p. 772, §1.)

§ 8-6-27 Commission to Keep Register; Register to Be Open for Public Inspection

The Securities Commission shall keep a register of all applications for registration and registration statements which are or have ever been effective under this article and all denial, suspension, or revocation orders which have ever been entered under this article. The register shall be open for public inspection. The information contained in or filed with any registration statement, application, or report may be made available to the public under such rules as the commission prescribes.

(Acts 1959, No. 542, p. 1318, §20; Acts 1990, No. 90-527, p. 772, §1.)

§ 8-6-28 Commission to Furnish Copies of Register Entries or Documents; Certified Copy Deemed Prima Facie Evidence

Upon request and at such reasonable charges as it prescribes, the Securities Commission shall furnish to any person photostatic or other copies, certified under its seal of office if requested, of any entry in the register or any document which is a matter of public record. In any proceeding or prosecution under this article, any copy so certified is prima facie evidence of the contents of the entry or document certified.

(Acts 1959, No. 542, p. 1318, §20; Acts 1990, No. 90-527, p. 772, §1.)

§ 8-6-29 Interpretative Opinions by Commission

(a) The Securities Commission, in its discretion, may honor requests from interested persons for interpretative opinions and no-action letters.

(b) Any person who makes application to the Securities Commission for an interpretative opinion or no-action letter shall be assessed a non-refundable filing fee of $150 upon application for such opinion or letter. Fees collected under this section shall be deposited in the Alabama Securities Commission Fund in the State Treasury to be drawn upon by the commission for its use in the administration of this article.

(Acts 1959, No. 542, p. 1318, §20; Acts 1990, No. 90-527, p. 772, §1.)

§ 8-6-30 Burden of Proving Exemption or Exception from Definition

In any proceeding under this article, the burden of proving an exemption or an exception from a definition is upon the person claiming it.

(Acts 1959, No. 542, p. 1318, §21; Acts 1990, No. 90-527, p. 772, §1.)

§ 8-6-31 Commission May Issue Warnings to Public and Publish Information Regarding Orders

The Securities Commission may issue and give warnings to the public concerning securities being sold in this state and may in its discretion cause to be published information regarding any orders or rules issued by the commission in the implementation of its duties, including, without limitation, information pertaining to specific orders denying registration or prohibiting the sale of securities.

(Acts 1959, No. 542, p. 1318, §25; Acts 1990, No. 90-527, p. 772, §1.)

§ 8-6-32 Party Aggrieved by Order Entitled to Hearing Before Commission; Appeals from Action of Commission

(a) Any person aggrieved by an order issued under this article shall be entitled to a hearing pursuant to the provisions of the Alabama Administrative Procedure Act (Section 41-22-1 et seq.) pertaining to “contested cases,” if such person, within 28 days after delivery of the order, submits a written request for a hearing before the commission. The order shall disclose the right to a hearing upon written request within 28 days after delivery of the order. If no timely request for a hearing is made, the order shall constitute a final order of the commission.

(b) Any appeal from any final order of the commission shall be made to the Circuit Court of Montgomery County and shall be governed by the provisions of the Alabama Administrative Procedure Act pertaining to judicial review.

(Acts 1959, No. 542, p. 1318, §19; Acts 1990, No. 90-527, p. 772, §1.)

§ 8-6-33 Disposition of Revenue

All moneys accruing to or collected by or through the Securities Commission shall be deposited when collected into the State Treasury to the credit of the general fund, unless otherwise provided by law.

(Acts 1959, No. 542, p. 1318, §27; Acts 1969, No. 605, p. 1093, §8; Acts 1971, No. 2243, p. 3598, §4; Acts 1990, No. 90-527, p. 772, §1.)

Article 2 Securities Commission

§ 8-6-50 Created; Duties Generally

There is created the Alabama Securities Commission, which shall be responsible for the enforcement of laws governing the issuance, sale, and other transactions relative to securities.

(Acts 1969, No. 740, p. 1315, §1.)

§ 8-6-51 Membership; Qualifications and Appointment of Commissioners; Use or Disclosure of Confidential Information by Commissioners, Employees, Etc.; Civil Liability of Commissioners

(a) The Securities Commission shall consist of the Attorney General of Alabama, the State Superintendent of Banks, the State Superintendent of Insurance and four other members appointed by the Governor by and with the advice and consent of the Senate. Two appointed members shall be members of the Alabama Bar Association appointed from a list of three nominees for each position submitted by the bar association, and the other two appointed members shall be certified public accountants appointed from a list of three nominees for each position submitted by the Alabama Society of Certified Public Accountants. The membership of the commission shall be inclusive and reflect the racial, gender, geographic, urban/rural, and economic diversity of the state.

(b) No person may be appointed to or by the commission while he is registered as a dealer or salesman under Article 1 of this chapter, while he is an officer, director or partner of any person so registered, while he is an officer, director or partner of an issuer which has a registration statement effective under Article 1 of this chapter or while he is occupying a similar status or performing similar functions.

(c) It is unlawful for any member of the commission, the director or any other officer or employee of the commission to use for personal benefit any information which is filed with or obtained by the director and which is not made public. No provision of this article authorizes any member of the commission, the director or any other officer or employee of the commission to disclose any such information except among themselves or when necessary or appropriate in a proceeding or investigation under this article. No provision of this article either creates or derogates from any privilege which exists at common law or otherwise when documentary or other evidence is sought under a subpoena directed to any member of the commission, the director, or any other officer or employee of the commission.

(d) Except upon proof of corruption, no commissioner shall for his acts or his failure to act be civilly liable to any investor, applicant for registration, or any other person.

(Acts 1969, No. 740, p. 1315, §2; Acts 1996, No. 96-749, p. 1320, §3.)

§ 8-6-52 Terms of Office of Appointed Members; Filling of Vacancies; Reappointment of Members

(a) The Governor shall biennially appoint one Securities Commission member to serve for a term of four years; provided, however, that the Governor shall designate for the initial appointments one member to serve for a term of two years and one member to serve for a term of four years from their respective dates of appointment and qualification. Upon the expiration of these initial terms, the term of each member shall be four years from the date of his appointment and qualification, until his successor shall qualify; provided further, however, that, on April 4, 1988, no member shall serve more than two consecutive terms of office.

(b) Vacancies shall be filled by the Governor for the unexpired term.

(c) Members shall be eligible for reappointment.

(Acts 1969, No. 740, p. 1315, §3; Acts 1988, No. 88-137, p. 199, §3.)

§ 8-6-53 Selection of Chair; Rules for Proceedings; Meetings; Quorum; Records and Reports; Access to Offices and Records; Exercise of Powers of Director

(a) The Securities Commission shall select a chair and may adopt rules for conducting its proceedings.

(b) The commission shall meet quarterly on a date it designates and may meet at other times it deems necessary, or when called by the chair or by any two members. Any three members shall constitute a quorum for transacting commission business.

(c) Complete minutes of each meeting shall be kept and filed in the office of the commission and shall be available for public inspection during reasonable office hours.

(d) The commission shall report annually to the Governor, to the legislature and to the state Legislative Council. The report shall contain the minutes of each meeting held during the year, legislative recommendations, a summary of violations of Article 1 of this chapter, actions taken for those violations, and other data and information deemed necessary or appropriate.

(e) Each member of the commission shall have unrestricted access to all offices and records under the jurisdiction of the commission.

(f) The commission, or a majority of the commission, may exercise any power or perform any act that the director is authorized to perform under this chapter.

(Acts 1969, No. 740, p. 1315, §4; Acts 1992, No. 92-124, p. 224, §3.)

§ 8-6-54 Compensation of Members

(a) Each appointed member of the Securities Commission shall be paid $50 per day, for a period not to exceed a total of 60 days in any one calendar year, while engaged in the performance of his duties, and shall receive mileage and per diem as provided by Article 2 of Chapter 7 of Title 36.

(b) Ex officio members shall not be entitled to any extra compensation for performing their duties under this chapter.

(Acts 1969, No. 740, p. 1315, §5.)

§ 8-6-55 Director - Appointment; Duties Generally

(a) The Securities Commission shall appoint a full-time director who shall be a career employee subject to the provisions of the Alabama Merit System Law and whose employment may be terminated only for cause.

(b) The director shall administer the provisions of Article 1 of this chapter under the supervision of the commission and in accordance with its policies.

(Acts 1969, No. 740, p. 1315, §6.)

§ 8-6-56 Director - Qualifications; Interest in Banks, Etc., Prohibited; Salary

(a) The Director of the Securities Commission shall be a person of good moral character, at least 30 years of age, a resident of Alabama, a member of the Alabama bar and thoroughly familiar with corporate organization, investment banking, investment trusts, the sale of securities, and the statistical details of the manufacturing industries and commerce of this state. The Securities Commission may also require additional qualifications.

(b) The director, while serving as such, shall not directly or indirectly be financially interested in or associated with any commercial bank, savings bank, trust company, industrial loan or investment company, credit union, building and loan association, or any other person subject to the jurisdiction of the commission or the director.

(c) The salary of the director shall be fixed by the commission with the approval of the Governor and the State Personnel Board.

(Acts 1969, No. 740, p. 1315, §7; Acts 1990, No. 90-527, p. 772, §2; Act 2018-187, §1.)

§ 8-6-57 Deputy Director

(a) With the approval of the Securities Commission and subject to the provisions of the Merit System law, the director thereof may designate a deputy director, who shall possess qualifications fixed by the commission with the approval of the personnel department, and who shall perform such duties as the director shall designate.

(b) In the absence of the director or his inability to act, the deputy director shall perform such duties as are required to be performed by the director.

(c) The compensation of the deputy director shall be fixed by the commission, subject to the approval of the personnel department, in the salary range payable to attorneys in the Merit System classification of Attorney IV.

(Acts 1969, No. 740, p. 1315, §8; Acts 1979, No. 79-462, p. 827, §7; Acts 1990, No. 90-527, p. 772, §2.)

§ 8-6-58 Personnel

(a) The Director of the Securities Commission shall prepare in writing a manual of necessary employee positions for the commission, including job classifications, personnel qualifications, duties, maximum and minimum salary schedules, and other personnel information for approval by the commission.

(b) Subject to the provisions of the Merit System law, the director may select, appoint, and employ such accountants, auditors, financial analysts, special agents and senior special agents, clerks, and other personnel as the director deems necessary for the proper administration of the Alabama securities laws including legal counsel to act as attorneys for the commission in actions or proceedings brought by or against the commission under or pursuant to any provision of law under the commission’s jurisdiction, or in which the commission joins or intervenes as to a matter within the commission’s jurisdiction, as a friend of the court or otherwise, and stenographic reporters to take and transcribe the testimony in any formal or informal hearing or investigation before the commission or before a person authorized by the commission.

(c) Special agents and senior special agents appointed pursuant to this section shall have the power to investigate matters within the commission’s jurisdiction and in such capacity shall have the powers vested in peace officers and shall be considered law enforcement officers of the State of Alabama to enforce the laws of this state pertaining to the operation and administration of the commission and this chapter. Senior special agents and special agents shall exercise their power of arrest only when ordered by both the commission and a court of competent jurisdiction. The commission shall request a suspension or waiver of firearms requalification as provided in Rule 650-X-4.02 of the Alabama Peace Officers’ Standards and Training Commission Code for law enforcement officers who are not required to carry or use a firearm. If a suspension or waiver cannot be obtained, senior special agents and special agents shall not carry firearms, except as required by P.O.S.T. training and continuing education. Nothing herein shall affect subpoena, visitation, examination, or other investigatory powers contained in this chapter.

(d) No person may serve as a special agent or senior special agent unless the person meets the minimum standards established for law enforcement officers by the Alabama Peace Officers’ Standards and Training Commission or other standards as may be hereafter provided by law. Special agents and senior special agents appointed pursuant to subsection (b) shall meet such other additional standards as the director may adopt.

(Acts 1969, No. 740, p. 1315, §10; Acts 1979, No. 79-462, p. 827, §8; Act 2000-703, p. 1429, §1.)

§ 8-6-59 Bonds of Director and Employees

(a) Before assuming office, the Director of the Securities Commission shall give a bond in the sum of $50,000, payable to the State of Alabama, to be approved by the Attorney General of Alabama and filed in the office of the Secretary of State. Such bond shall be conditioned that he will faithfully execute the duties of his office.

(b) The director may by rule or order require any employee of the commission to be bonded on the same condition and in the same or such lesser amount as he determines.

(c) The expense of all such bonds shall be paid from funds available to the commission.

(Acts 1969, No. 740, p. 1315, §9.)

§ 8-6-60 Place of Office

The Securities Commission and the director thereof shall maintain offices in the capital city of the state, and all records of the commission shall be kept at these offices.

(Acts 1969, No. 740, p. 1315, §11.)

§ 8-6-61 Alabama Title Fraud Recovery Fund; Investigation Procedures; Enforcement

(a) There is established in the State Treasury an Alabama Title Fraud Recovery Fund to be administered by the Alabama Securities Commission in accordance with this section. The fund shall be budgeted and allotted in accordance with Article 4 of Chapter 4 of Title 41 and Chapter 19 of Title 41.

(b) Money in the fund shall only be used to compensate individuals injured by title conveyance fraud for actual economic damages, excluding interest and court costs, incurred by the injured party. Payments from the fund are subject to the following limitations and conditions:

(1) The fund shall only make payments to real property owners who file a complaint with the commission as required by this section.

(2) The fund shall not issue payments based on consent judgments.

(c) The commission, by rule, shall set the maximum payment amount that can be issued from the fund to a complainant.

(d) Any person with a claim for title conveyance fraud may submit a written complaint to the commission, which may investigate the complaint.

(e) During the investigation of a complaint, the commission may:

(1) Hold hearings;

(2) Subpoena witnesses;

(3) Administer oaths;

(4) Examine any individual under oath; and

(5) Compel the production of records, books, papers, contracts, or other documents.

(f) If an individual fails to comply with a subpoena issued by the commission or to testify on matters for which the individual may be questioned under this section, the commission may petition a court of competent jurisdiction for enforcement.

(g) If the commission determines that a person is liable for fraudulent title conveyance, the commission may take any of the following actions:

(1) Issue an administrative order declaring the conveyance void pursuant to Chapter 21 of Title 35.

(2) Impose a civil penalty of up to one hundred thousand dollars ($100,000) per transaction on the liable person or persons who have committed the fraud, which shall be deposited into the Alabama Title Fraud Recovery Fund.

(h) Any final order issued by the commission shall be legally binding and shall not be stayed except by order of the circuit court in a timely filed appeal. Any party dissatisfied with a final judgment or decision by the commission may appeal to the circuit court where the property is located not later than 30 days from the date of the final administrative order of the Alabama Securities Commission. For appeals, the commission shall provide a certified transcript of the proceedings and actions taken by the commission to the circuit court to which the appeal is taken.

(i) The judge of probate may comply with an administrative order under this section by recording the enforcement order in the official real property records and making a marginal notation on the voided instrument referencing the recorded order, or by making a cross reference to the voided instrument when recording the administrative order.

(j)(1) Nothing in this chapter shall apply to the acquisition of real property, easements, or rights-of-way for utility infrastructure.

(2) Banks, credit unions, title insurers, and state or local governments shall not be subject to civil penalties under this section. This subdivision does not apply to any individual acting as a real estate agent or settlement agent, regardless of the individual’s employer.

(3) Documentation demonstrating compliance with the requirements of Section 35-21-5 shall constitute an affirmative defense to any civil penalty under this section for individuals acting as a real estate agent or settlement agent.

(4) Any civil penalty under this section must be commenced not later than four years after the date the transfer is recorded in the public record.

(Act 2026-536, §2.)

Article 4 Ownership by Minors

§ 8-6-90 Short Title

This article may be cited as the Securities Ownership by Minors Act.

(Acts 1961, No. 1010, p. 1585, §5.)

§ 8-6-91 Definitions

In this article, unless the context otherwise requires, the following terms shall have the meanings ascribed to them by this section:

(1) BANK. A bank, trust company, national banking association, savings bank, or industrial bank.

(2) BROKER. A person, including a bank, lawfully engaged in the business of effecting transactions in securities for the account of others and includes a broker lawfully engaged in buying and selling securities for his own account.

(3) ISSUER. A person who places, or authorizes the placing of, his name on a security other than as a transfer agent to evidence that it represents a share, participation, or other interest in his property or in an enterprise or to evidence his duty to perform an obligation evidenced by the security or who becomes responsible for or in place of any such person.

(4) PERSON. Such term includes a corporation, government or governmental subdivision or agency, business trust, estate, trust, partnership or association, two or more persons having a joint or common interest or any other legal or commercial entity.

(5) SECURITY. Such term includes any note, stock, treasury stock, bond, debenture, evidence of indebtedness or certificate of interest or participation in an oil, gas, or mining title or lease or in payment out of production under such a title or lease, collateral trust certificate, transferable share, voting trust certificate, or, in general, any interest or instrument commonly known as a security or any certificate, interest or participation in any temporary or interim certificate, receipt or certificate of deposit for, or any warrant or right to subscribe to or purchase, any of the foregoing.

(6) THIRD-PARTY. A person other than a bank, broker, transfer agent, or issuer who with respect to a security held by a minor effects a transaction otherwise than directly with the minor.

(7) TRANSFER AGENT. A person who acts as authenticating trustee, transfer agent, registrar, or other agent for an issuer in the registration of transfers of securities in the issue of new securities or in the cancellation of surrendered securities.

(Acts 1961, No. 1010, p. 1585, §1.)

§ 8-6-92 Liability of Bank, Transfer Agent, Etc., for Treating Minor as Having Capacity to Exercise Security Rights; Presumption That Holder Not Minor

(a) A bank, broker, issuer, third-party or transfer agent incurs no liability by reason of his treating a minor as having capacity to transfer a security, to receive or to empower others to receive dividends, interest, principal, or other payments or distributions, to vote or give consent in person or by proxy, or to make elections or exercise rights relating to the security unless prior to acting in the transaction the bank, broker, issuer, third-party or transfer agent had received written notice in the office acting in the transaction that the specific security is held by a minor.

(b) Except as otherwise provided in this article, such a bank, broker, issuer, third-party or transfer agent may assume without inquiry that the holder of a security is not a minor.

(Acts 1961, No. 1010, p. 1585, §2.)

§ 8-6-93 Minor May Not Disaffirm Security Transaction Unless Prior Written Notice of Minority Given

A minor who has transferred a security, received or empowered others to receive dividends, interest, principal, or other payments or distributions, voted or given consent in person or by proxy or made an election or exercised rights relating to the security has no right thereafter, as against a bank, broker, issuer, third-party or transfer agent, to disaffirm or avoid the transaction unless, prior to acting in the transaction, the bank, broker, issuer, third-party or transfer agent against whom the transaction is sought to be disaffirmed or avoided had received written notice in the office acting in the transaction that the specific security is held by a minor.

(Acts 1961, No. 1010, p. 1585, §3.)

§ 8-6-94 Right of Minor to Receive Dividends, Etc

A minor may receive in his own right dividends or other moneys in respect to any securities standing in his name on the books of a corporation, bank, or business trust, and such receipt shall constitute a valid and sufficient release and discharge of the corporation, bank, or business trust for such dividends or other moneys paid to such minor, notwithstanding that the corporation, bank, or business trust may have actual or written notice of the minority of such person.

(Acts 1961, No. 1010, p. 1585, §4.)

§ 8-6-95 Certain Laws Not Affected by Article

Nothing in this article shall be construed to repeal or in any way affect Sections 10-6-1 through 10-6-4.

(Acts 1961, No. 1010, p. 1585, §7.)

Article 5 Pre-issuance Procedure for Industrial Revenue Bonds

§ 8-6-110 Definitions

The following words and phrases, as used in this article, shall have the following meanings:

(1) AUTHORIZING ACT. Any of the following statutes or acts:

a. Any of the following sections, as amended: Section 11-20-1 et seq., relating to industrial revenue bonds to be issued by counties; Section 11-54-20 et seq., relating to industrial revenue bonds to be issued by municipalities; Section 11-54-80 et seq., relating to industrial revenue bonds to be issued by municipal industrial development boards; Section 11-58-1 et seq., relating to industrial revenue bonds to be issued by municipal medical clinic boards, Section 22-21-170 et seq., relating to industrial revenue bonds to be issued by county and municipal hospital authorities; and Section 11-20-30 et seq., relating to industrial revenue bonds to be issued by county industrial development boards.

b. The following acts of the Alabama Legislature: Act No. 4, enacted at the 1956 Second Special Session of the Alabama Legislature (1956 Acts, p. 240 et seq.), relating to industrial revenue bonds to be issued by certain municipalities to finance hotel and motel projects and Act No. 337, enacted at the 1971 Third Extra Session of the Alabama Legislature (1971 Acts, p. 4625 et seq.), relating to industrial revenue bonds to be issued by certain municipalities to finance hotel and motel projects.

(2) COMMISSION. The Alabama Securities Commission existing under Article 2 (commencing with Section 8-6-50) of Chapter 6 of Title 8.

(3) DIRECTOR. The director appointed by the commission pursuant to Section 8-6-55 or, in the absence of the director or his or her inability to act, the deputy director appointed by the director as provided in Section 8-6-57.

(4) GOVERNING BODY. The county commission, council, board of commissioners, board of directors, or other governing body of any issuer.

(5) GUARANTOR. The guarantor of the performance by the lessee of its obligations under a lease or the guarantor of any industrial revenue bonds.

(6) IMPROVIDENT. With respect to any industrial revenue bonds the term means that there is a reasonable probability that the bonds will be deficient in one or more of the following respects:

a. The project may not be completed.

b. The principal of or interest on the industrial revenue bonds will not be paid when due.

c. The industrial revenue bonds may be sold or distributed by the parties or in a manner as to constitute a fraud on one or more purchasers of the bonds.

(7) INDUSTRIAL REVENUE BONDS. The bonds, warrants, notes, certificates of indebtedness, or other obligations issued by any issuer under the authority of the authorizing act to finance or refinance a project or to refund bonds, but does not include either of the following:

a. Any obligation unless the lessee is a lessee as defined in this section.

b. Any issue of bonds, warrants, notes, certificates of indebtedness, or other obligations, any of which has a stated maturity not more than 18 months from the date of its issuance and evidences a loan initially made by a bank to the issuer of the bonds, warrants, notes, certificates of indebtedness, or other obligations.

(8) ISSUER. Any county, city, town, municipality, or public corporation issuing industrial revenue bonds under the authorizing act.

(9) JUDICIAL VALIDATION. The procedure described in Section 8-6-119 by which industrial revenue bonds may be validated and culminating in a decree of the circuit court validating the bonds.

(10) LEASE. The lease, installment purchase, or other agreement by which the lessee obtains the right to use the project and agrees to make payments sufficient to pay the principal of and interest on the industrial revenue bonds issued to finance or refinance the project.

(11) LESSEE. The lessee, purchaser, or user of a project under the lease. The term does not include the State of Alabama, any county, any city, town, or municipality, any public corporation or any nonprofit corporation organized and operated exclusively for religious, charitable, or educational purposes, no part of the net earnings of which inures to the benefit of any private share holder, member, or individual.

(12) NOTIFICATION. The instrument or the procedure, or both, by which an issuer is required by this article to notify the director prior to the proposed issuance of industrial revenue bonds.

(13) PROJECT. Any land, plant, building, facilities, equipment, or other property proposed to be acquired with the proceeds of any industrial revenue bonds to be used by a lessee under a lease.

(14) SERVED UPON THE ISSUER. As applied to a stop order, notice of a reference to the commission, or of a hearing before the commission, the term means that it has been deposited in the United States mail in a sealed envelope with first class, certified postage prepaid, properly addressed to the issuer at the address shown in the notification, or delivered to the person who signed the notification on behalf of the issuer.

(15) STOP ORDER. An order issued by the director or by the commission in accordance with this article prohibiting the issuer from issuing the industrial revenue bonds described in the notification or any bonds in lieu of those bonds.

(Acts 1978, No. 586, p. 681, §1; Acts 1992, No. 92-124, p. 224, §3.)

§ 8-6-111 Legislative Findings; Purpose of Article

(a) The Legislature finds and determines that unscrupulous promoters may take advantage of the authorizing act by inducing issuers to issue industrial revenue bonds which careful investigation by the issuer or other responsible parties would reveal to be improvident. The standing of all issuers could be impaired and the purposes of the Legislature in enacting the authorizing act could be thwarted by those improvident issues.

(b) The purpose of this article is to provide a procedure whereby the State of Alabama, acting through the director and the commission, may assist in developing facts to aid the issuer in the exercise of its authority under the authorizing act, and, to that end, to delay the issuance of industrial revenue bonds pending adequate investigation by the director or to prevent the issue of industrial revenue bonds found to be improvident.

(Acts 1978, No. 586, p. 681, §2; Acts 1992, No. 92-124, p. 224, §3.)

§ 8-6-112 Powers of Director of Securities Commission

(a) The director shall have authority to:

(1) Consider and investigate proposed issues of industrial revenue bonds;

(2) Advise and consult with issuers with respect thereto;

(3) Publish such notices of proposed issues of industrial revenue bonds or proposed rules and regulations as are required by this article or the rules and regulations of the commission;

(4) Stop the issuance of industrial revenue bonds for the limited times and under the procedures provided in this article by issuing the orders and giving the notices herein required;

(5) Cause information concerning a proposed issue of industrial revenue bonds to be presented at any meeting of the governing body at which industrial revenue bonds are to be authorized or reauthorized or any hearing upon the judicial validation of such issue; and

(6) Perform such other functions and duties as may be required by this article or by order of the commission.

(b) The authority herein granted to the director is in addition to that granted under Section 8-6-50 et seq.

(Acts 1978, No. 586, p. 681, §3.)

§ 8-6-113 Powers of Securities Commission

(a) The commission may:

(1) Stop the issuance of industrial revenue bonds under the procedures provided in this article.

(2) Issue rules and regulations necessary or desirable to prescribe the form and content of notifications, the conduct of investigations, the issuance of stop orders, appeals by issuers, or references by the director to the commission and the conduct of hearings thereon. No rule or regulation shall be adopted by the commission until the commission shall hold a public hearing on the proposed rules and regulations, notice of which shall be given by publication one time in a daily newspaper published in the City of Montgomery and in any other manner as the commission directs.

(b) The authority granted to the commission in this section is in addition to that granted under Section 8-6-50 et seq., or any other provided by law.

(Acts 1978, No. 586, p. 681, §4; Acts 1992, No. 92-124, p. 224, §3.)

§ 8-6-115 Notifications of Intent to Issue Bonds

On and after May 27, 1978, any issuer proposing to issue any industrial revenue bonds under authority of the authorizing act shall, at least 20 days prior to the date of delivery of the industrial revenue bonds, deliver to the director a notification in writing of its intention to issue the bonds. The director may for good cause shown, waive, shorten, or, with the consent of the issuer, extend the 20-day requirement. The notifications shall contain the name and address of the issuer, the lessee, the guarantor, if any, the trustee, the underwriter, purchaser, fiscal agent, or agents, legal counsel for each of the above named parties and bond counsel, the estimated face amount of the bond issue, the estimated capital budget for the project to the extent that the information is available to the issuer when it files the notification, and any other information prescribed by the rules and regulations issued by the commission to advise the director and the commission of the nature of the proposed transaction. Each notification shall be accompanied by a filing fee equal to one twentieth of one percent of the principal amount of industrial revenue bonds described in the notification. No filing fee shall be less than $25 nor greater than $1,000. All fees shall be deposited in a special account in the State Treasury to be withdrawn by the director for the use of the commission in the administration of this article. All notifications shall be available for public inspection during the normal business hours of the director.

(Acts 1978, No. 586, p. 681, §6; Acts 1992, No. 92-124, p. 224, §3.)

§ 8-6-116 Action by Director Upon Receipt of Notification; Stop Orders

Upon receipt of a notification, the director shall cause a preliminary investigation or inquiry to be made into the proposed issue to determine whether there exist circumstances which, in his or her opinion, indicate that the proposed issue of industrial revenue bonds may be an improvident issue. If he or she finds that the proposed issue may be improvident, he or she shall advise the issuer of the findings and shall issue a stop order or stop orders requiring that for a period of time not exceeding in the aggregate 90 days after the filing of the notification, the issuer shall not issue the industrial revenue bonds proposed in the notification or any industrial revenue bonds in lieu of the bonds proposed. When a stop order has been served upon the issuer, it shall be fully effective (a) unless lifted by the director or the commission for good cause shown, or (b) unless the proposed industrial revenue bonds described in the notification have been reauthorized by the governing body of the issuer at a meeting at which the governing body has considered any comments or objections presented by the director or his or her representative. Written notice of the meeting shall be given to the director. The notice shall also be published in a newspaper published or circulated in the county where the proposed issuer is located.

(Acts 1978, No. 586, p. 681, §7; Acts 1992, No. 92-124, p. 224, §3.)

§ 8-6-117 Appeals or References to Securities Commission

When a stop order has been issued by the director, the issuer shall have the right to appeal the matter to the commission by notice in writing of such appeal delivered to the director. The director shall have the right to refer to the commission the matter of any issue of industrial revenue bonds proposed in a notification as to which a stop order is then in effect or which have been reauthorized by the governing body of the issuer pursuant to Section 8-6-116, and to request that the commission issue a permanent stop order. Notice of such reference and request shall be given in writing and served upon the issuer. The director shall mail to each member of the council a copy of each notice required by this section as soon as it is delivered to him or prepared for service upon the issuer.

(Acts 1978, No. 586, p. 681, §8.)

§ 8-6-118 Proceedings Before Securities Commission

When the matter of any proposed industrial revenue bond issue has been appealed by the issuer to the commission or referred to the commission by the director with the request that the commission issue a permanent stop order, the director shall convene the commission. The commission shall conduct a hearing on the matter within 14 days after receipt by the director of the notice of appeal or service upon the issuer of the referral. At the request of the issuer, the date of the hearing may be postponed. Notice of the time, place, and purpose of the hearing shall be served upon the issuer at least three days before the date of the hearing. The issuer and other interested parties shall have the right to appear and be heard in person or by counsel. The commission shall render a decision within three days after the hearing. Pending the determination by the commission of any appeal or referral, the stop order previously issued by the director shall remain in effect until the commission renders a decision, or three days after the hearing, whichever is earlier. If, upon a hearing of the matter, the commission concludes that the proposed issue of industrial revenue bonds is improvident, the stop order previously issued by the director shall be made permanent and neither the proposed industrial revenue bonds nor any industrial revenue bonds in lieu of the bonds shall be issued until approved by judicial validation in proceedings instituted by the proposed issuer after the issuance of the stop order. If the commission concludes that the issue is not improvident, the commission shall lift the stop order and the issuer may proceed to issue the proposed industrial revenue bonds.

(Acts 1978, No. 586, p. 681, §9; Acts 1992, No. 92-124, p. 224, §3.)

§ 8-6-119 Judicial Validation Proceedings

Any judicial validation proceeding instituted under this article shall conform to and be conducted in accordance with either Section 6-6-750 et seq. or Section 11-81-220 et seq., whichever is applicable to the issuer. The petition shall allege that the issue of industrial revenue bonds proposed by the issuer is not improvident, and the director shall be served with notice of the proceeding in the same manner and for the same time as the district attorney, and may attend the hearing before the circuit court having jurisdiction of the matter in person or by attorney, present evidence, and be heard by the court. The court shall not validate unless, pursuant to evidence presented at the hearing, the court finds and determines that the issue is not improvident. No judicial validation proceedings shall be instituted under this article until the commission enters a stop order or until the expiration of 15 days after the proposed industrial revenue bond issue is appealed by the issuer or referred to the commission by the director without any stop order having been issued.

(Acts 1978, No. 586, p. 681, §10; Acts 1992, No. 92-124, p. 224, §3.)

§ 8-6-120 Certificate of Notification; Representation That Industrial Revenue Bonds Have Been Approved Prohibited

In the event that (1) 20 days shall have expired after the filing by an issuer of the notification required by Section 8-6-115 describing proposed industrial revenue bonds to be issued by it, or the director shall have waived, shortened or, with the consent of the issuer, extended such waiting period and (2) no stop order shall then be effective as to the proposed industrial revenue bonds, the director shall provide such issuer with a certificate substantially as follows: CERTIFICATE OF NOTIFICATION

The _____ of _____ (the issuer) has filed in my office a notification under Act No. 586 of the 1978 Regular Session of the Alabama Legislature stating its intention to issue $_____ of its _____ Industrial Revenue Bonds and no stop order is effective as to the issue of such bonds. This certificate is not an approval of said bonds, and it is unlawful for any person to represent that such bonds have been approved by the director, the commission or any other agency of the state.

This _____ day of ___, 2

_______________________________ Director

It shall be unlawful for any issuer to issue any industrial revenue bonds under the authority of the authorizing act unless the foregoing certificate with respect to such industrial revenue bonds shall have been issued by the director or unless the proposed industrial revenue bonds shall have been reauthorized by the governing body of the issuer pursuant to Section 8-6-116 or shall have been judicially validated pursuant to Sections 8-6-118 and 8-6-119. When a certificate of notification shall have been issued by the director, no stop order thereafter issued either by the director or the commission with respect to the industrial revenue bonds described in such certificate shall be effective unless, prior to the issuance of the industrial revenue bonds described in such certificate, such stop order shall have been served personally upon the person who signed the notification in behalf of the issuer and upon each bond counsel named in the notification with respect to the industrial revenue bonds described in such certificate. When the industrial revenue bonds described in a certificate of notification shall have been issued, such certificate shall be conclusive evidence of formal compliance by the issuer with this article, and the failure of the issuer to comply with any requirement of this article in issuing the industrial revenue bonds described in such certificate shall not affect the validity of such industrial revenue bonds. In the event that any industrial revenue bonds shall be issued without a certificate of notification having been issued with respect thereto, the holder of any such bonds shall, in addition to any other right he may have by statute or law, have the right of rescission as to such bonds; provided, that such right shall be exercised within 12 months of the date on which such bonds shall have been delivered by the issuer and paid for; and provided further, that any right of recovery against the issuer shall be limited to the then unexpended proceeds of such bonds. In the event that the director shall refuse to issue a certificate of notification to any issuer entitled thereto, an appeal shall lie to the commission or the Circuit Court of Montgomery County, which shall have jurisdiction to require the director forthwith to issue any certificate wrongfully withheld.

It shall be unlawful for any issuer or any person, firm, or corporation to represent that an issue of industrial revenue bonds has been approved by the director or the commission or any agency of the state, whether the certificate herein provided for shall have been issued or not.

(Acts 1978, No. 586, p. 681, §11.)

§ 8-6-121 Criminal Penalties

Any lessee, any guarantor, or any officer of any issuer, lessee, or guarantor or any other person, firm, or corporation who:

shall be guilty of a felony and upon conviction shall be fined not more than $10,000 or shall be imprisoned for a period not exceeding 10 years or both so fined and so imprisoned, as the trial court shall determine. No prosecution under this section shall be commenced more than five years after the occurrence of the alleged violation.

(Acts 1978, No. 586, p. 681, §12.)

§ 8-6-122 Article Remedial; Certain Statutes Not

[Repealed]

This article is remedial in nature and shall not be construed so as to repeal any provision of Section 8-6-1 et seq. or Section 8-6-50 et seq.

(Acts 1978, No. 586, p. 681, §13.)

Article 6 Uniform Transfer on Death Security Registration Act

§ 8-6-140 Definitions

For the purposes of this article, the following words have the following meanings unless the context otherwise requires:

(1) BENEFICIARY FORM. A registration of a security which indicates the present owner of the security and the intention of the owner regarding the person who will become the owner of the security upon the death of the owner.

(2) DEVISEE. Any person designated in a will to receive a disposition of real or personal property.

(3) HEIRS. Those persons, including the surviving spouse, who are entitled under the statutes of intestate succession to the property of a decedent.

(4) PERSON. An individual, a corporation, an organization, or other legal entity.

(5) PERSONAL REPRESENTATIVE. Includes executor, administrator, successor personal representative, special administrator, and persons who perform substantially the same function under the law governing their status.

(6) PROPERTY. Includes both real and personal property or any interest therein and means anything that may be the subject of ownership.

(7) REGISTER. Including its derivatives, means to issue a certificate showing the ownership of a certificated security or, in the case of an uncertificated security, to initiate or transfer an account showing ownership of securities.

(8) REGISTERING ENTITY. A person who originates a security title by registration, and includes a securities broker or dealer, bank, or other depository institution, trust company, investment adviser, or other financial institution that maintains security accounts for customers and a transfer agent or other person acting for or as an issuer of securities.

(9) SECURITY. A share, participation, or other interest in property, in a business, or in an obligation of an enterprise or other issuer, and includes a certificated security, an uncertificated security, and a security account.

(10) SECURITY ACCOUNT. a. A reinvestment account associated with a security.

b. A securities, brokerage, investment management, or custody account maintained with a securities broker or dealer, bank, or other depository institution, trust company, investment adviser, or other financial institution and any securities held in such account.

c. The cash balance in any reinvestment account associated with a security or in any securities, brokerage, investment management, or custody account maintained with a securities broker or dealer, bank, or other depository institution, trust company, investment adviser, or other financial institution, whether or not credited to the account before the owner’s death.

d. Cash, cash equivalents, meaning any investment that is easily converted into cash, including Treasury bills, Treasury notes, money market funds, savings bonds, short-term instruments, short-term obligations, and similar instruments or obligations, interest, earnings, or dividends earned or declared on a security in any reinvestment account associated with a security or in any securities, brokerage, investment management, or custody account maintained with a securities broker or dealer, bank, or other depository institution, trust company, investment adviser, or other financial institution.

e. A cash balance or other property held for or due to the owner of a security as a replacement for or product of any security in any reinvestment account associated with such security or in any securities, brokerage, investment management, or custody account maintained with a securities broker or dealer, bank, or other depository institution, trust company, investment adviser, or other financial institution, whether or not credited to the account before the owner’s death.

(11) STATE. Includes any state of the United States, the District of Columbia, the Commonwealth of Puerto Rico, and any territory or possession subject to the legislative authority of the United States.

(Acts 1997, No. 97-703, p. 1451, §1; Act 2012-296, p. 635, §1.)

§ 8-6-141 Registration - Beneficiary Form

Only individuals whose registration of a security shows sole ownership by one individual or multiple ownership by two or more with right of survivorship, rather than as tenants in common, may obtain registration in beneficiary form. Multiple owners of a security registered in beneficiary form hold as joint tenants with right of survivorship, as tenants by the entireties, or as owners of community property held in survivorship form, and not as tenants in common.

(Acts 1997, No. 97-703, p. 1451, §2.)

§ 8-6-142 Registration - Authorization

A security may be registered in beneficiary form if the form is authorized by this or a similar statute of the state of organization of the issuer or registering entity, the location of the registering entity’s principal office, the office of its transfer agent or its office making the registration, or by this or a similar statute of the law of the state listed as the owner’s address at the time of registration. A registration governed by the law of a jurisdiction in which this or similar legislation is not in force or was not in force when a registration in beneficiary form was made is nevertheless presumed to be valid and authorized as a matter of contract law.

(Acts 1997, No. 97-703, p. 1451, §3.)

§ 8-6-143 Registration - Designation of a Beneficiary

A security, whether evidenced by certificate or account, is registered in beneficiary form when the registration includes a designation of a beneficiary to take the ownership at the death of the owner or the deaths of all multiple owners.

(Acts 1997, No. 97-703, p. 1451, §4.)

§ 8-6-144 Registration - Applicable Language

Registration in beneficiary form may be shown by the words “transfer on death” or the abbreviation “TOD,” or by the words “pay on death” or the abbreviation “POD,” after the name of the registered owner and before the name of a beneficiary.

(Acts 1997, No. 97-703, p. 1451, §5.)

§ 8-6-145 Designation of Tod; Registration Cancelled or Changed

The designation of a TOD beneficiary on a registration in beneficiary form has no effect on ownership until the owner’s death. A registration of a security in beneficiary form may be cancelled or changed at any time by the sole owner or all then surviving owners, without the consent of the beneficiary.

(Acts 1997, No. 97-703, p. 1451, §6.)

§ 8-6-146 Death of Owner

On death of a sole owner or the last to die of all multiple owners, ownership of securities registered in beneficiary form passes to the beneficiary or beneficiaries who survive all owners. On proof of death of all owners and compliance with any applicable requirements of the registering entity, a security registered in beneficiary form may be reregistered in the name of the beneficiary or beneficiaries who survived the death of all owners. Until division of the security after the death of all owners, multiple beneficiaries surviving the death of all owners hold their interests as tenants in common. If no beneficiary survives the death of all owners, the security belongs to the estate of the deceased sole owner or the estate of the last to die of all multiple owners.

(Acts 1997, No. 97-703, p. 1451, §7; Act 98-279, p. 1451, §1.)

§ 8-6-147 Assent of Owner; Discharge from Claims

(a) A registering entity is not required to offer or to accept a request for security registration in beneficiary form. If a registration in beneficiary form is offered by a registering entity, the owner requesting registration in beneficiary form assents to the protections given to the registering entity by this article.

(b) By accepting a request for registration of a security in beneficiary form, the registering entity agrees that the registration will be implemented on death of the deceased owner as provided in this article.

(c) A registering entity is discharged from all claims to a security by the estate, creditors, heirs, or devisees of a deceased owner if it registers a transfer of a security in accordance with Section 8-6-146 and does so in good faith reliance (1) on the registration, (2) on this article, and (3) on information provided to it by affidavit of the personal representative of the deceased owner, or by the surviving beneficiary or by the surviving beneficiary’s representatives, or other information available to the registering entity. The protections of this article do not extend to a reregistration or payment made after a registering entity has received written notice from any claimant to any interest in the security objecting to implementation of a registration in beneficiary form. No other notice or other information available to the registering entity affects its right to protection under this article.

(d) The protection provided by this article to the registering entity of a security does not affect the rights of beneficiaries in disputes between themselves and other claimants to ownership of the security transferred or its value or proceeds.

(Acts 1997, No. 97-703, p. 1451, §8.)

§ 8-6-148 Transfer on Death

(a) A transfer on death resulting from a registration in beneficiary form is effective by reason of the contract regarding the registration between the owner and the registering entity and this article and is not testamentary.

(b) This article does not limit the rights of creditors of security owners against beneficiaries and other transferees under other laws of this state.

(Acts 1997, No. 97-703, p. 1451, §9.)

§ 8-6-149 Terms and Conditions of Registration

(a) A registering entity offering to accept registrations in beneficiary form may establish the terms and conditions under which it will receive requests (1) for registrations in beneficiary form, and (2) for implementation of registrations in beneficiary form, including requests for cancellation or previously registered TOD beneficiary designations and requests for reregistrations to effect a change of beneficiary. The terms and conditions so established may provide for proving death, avoiding or resolving any problems concerning fractional shares, designating primary and contingent beneficiaries, and substituting a named beneficiary’s descendants to take in the place of the named beneficiary in the event of the beneficiary’s death. Substitution may be indicated by appending to the name of the primary beneficiary the letters LDPS, standing for “lineal descendants per stirpes.” This designation substitutes a deceased beneficiary’s descendants who survive the owner for a beneficiary who fails to so survive, the descendants to be identified and to share in accordance with the law of the beneficiary’s domicile at the owner’s death governing inheritance by descendants of an intestate. Other forms of identifying beneficiaries who are to take on one or more contingencies, and rules for providing proofs and assurances needed to satisfy reasonable concerns by registering entities regarding conditions and identities relevant to accurate implementation of registrations in beneficiary form, may be contained in a registering entity’s terms and conditions.

(b) The following are illustrations of registrations in beneficiary form which a registering entity may authorize:

(1) Sole owner sole beneficiary: John S Brown TOD (or POD) John S Brown Jr.

(2) Multiple owners-sole beneficiary: John S Brown Mary B Brown JT TEN TOD John S Brown Jr.

(3) Multiple owners-primary and secondary (substituted) beneficiaries: John S Brown Mary B Brown JT TEN TOD John S Brown Jr SUB BENE Peter Q Brown or John S Brown Mary B Brown JT TEN TOD John S Brown Jr LDPS.

(Acts 1997, No. 97-703, p. 1451, §10.)

§ 8-6-150 Short Title; Construction

(a) This article shall be known as and may be cited as the Uniform TOD Security Registration Act.

(b) This article shall be liberally construed and applied to promote its underlying purposes and policy and to make uniform the laws with respect to the subject of this article among states enacting it.

(c) Unless displaced by the particular provisions of this article, the principles of law and equity supplement its provisions.

(Acts 1997, No. 97-703, p. 1451, §11.)

§ 8-6-151 Application

This article applies to registrations of securities in beneficiary form made before or after August 1, 1997, by decedents dying on or after August 1, 1997.

(Acts 1997, No. 97-703, p. 1451, §12.)

Article 7 Protection of Vulnerable Adults from Financial Exploitation Act

§ 8-6-170 Short Title

This article shall be known and may be cited as the Protection of Vulnerable Adults from Financial Exploitation Act.

(Act 2016-141, §1.)

§ 8-6-171 Definitions

In this article, unless the context otherwise requires, the following words and terms shall have the following meanings:

(1) AGENT. The same meaning as in subdivision (2) of Section 8-6-2.

(2) BROKER-DEALER. The same meaning as in subdivision (3) of Section 8-6-2.

(3) COMMISSION. The Alabama Securities Commission.

(4) DEPARTMENT. The Department of Human Resources.

(5) FINANCIAL EXPLOITATION. Any of the following:

a. The wrongful or unauthorized taking, withholding, appropriation, or use of money, assets, or property of a vulnerable adult.

b. Any act or omission taken by a person, including through the use of a power of attorney, guardianship, or conservatorship of a vulnerable adult, to either of the following:

1. Obtain control through deception, intimidation, or undue influence over the vulnerable adult’s money, assets, or property to deprive the vulnerable adult of the ownership, use, benefit, or possession of his or her money, assets, or property.

2. Convert money, assets, or property of the vulnerable adult to deprive the vulnerable adult of the ownership, use, benefit, or possession of his or her money, assets, or property.

(6) INVESTMENT ADVISER. The same meaning as in subdivision (18) of Section 8-6-2.

(7) INVESTMENT ADVISER REPRESENTATIVE. The same meaning as in subdivision (19) of Section 8-6-2.

(8) QUALIFIED INDIVIDUAL. Any agent, investment adviser representative, or person who serves in a supervisory, compliance, legal, or associated member capacity of a broker-dealer or investment adviser.

(9) REASONABLY ASSOCIATED INDIVIDUAL or ASSOCIATED MEMBER. An individual known to the investment adviser representative, broker-dealer, or firm who is reasonably associated with the account.

(10) VULNERABLE ADULT. Any of the following:

a. A person 65 years of age or older.

b. A protected person included and defined in Chapter 9 of Title 38.

(Act 2016-141, §2.)

§ 8-6-172 Notification of Department and Commission - Disclosure of Information

If a qualified individual reasonably believes that financial exploitation of a vulnerable adult may have occurred, may have been attempted, or is being attempted, the qualified individual shall promptly notify the department and the commission.

(Act 2016-141, §3.)

§ 8-6-173 Notification of Department and Commission - Liability

A qualified individual that in good faith and exercising reasonable care makes a disclosure of information pursuant to Section 8-6-172 shall be immune from administrative or civil liability that might otherwise arise from such disclosure or for any failure to notify.

(Act 2016-141, §4.)

§ 8-6-174 Notification of Certain Third Parties - Disclosure of Information

If a qualified individual reasonably believes that financial exploitation of a vulnerable adult may have occurred, may have been attempted, or is being attempted, the qualified individual may notify a reasonably associated individual, legal guardian, any third party previously designated by the vulnerable adult, conservator, co-trustee, successor trustee, or agent under a power of attorney of the vulnerable adult of such belief. Disclosure may not be made to a designated third party that is suspected of financial exploitation or other abuse of the vulnerable adult.

(Act 2016-141, §5.)

§ 8-6-175 Notification of Certain Third Parties - Liability

A qualified individual that, in good faith and exercising reasonable care, complies with Section 8-6-174 shall be immune from any administrative or civil liability that might otherwise arise from such disclosure.

(Act 2016-141, §6.)

§ 8-6-176 Delay of Disbursement - Authorized

(a) A broker-dealer or investment adviser may delay a disbursement from an account of a vulnerable adult or an account on which a vulnerable adult is a beneficiary if:

(1) The broker-dealer, investment adviser, or qualified individual reasonably believes, after initiating an internal review of the requested disbursement and the suspected financial exploitation, that the requested disbursement may result in financial exploitation of a vulnerable adult; and

(2) The broker-dealer or investment adviser:

a. Immediately, but in no event more than two business days after the requested disbursement, provides written notification of the delay and the reason for the delay to all parties authorized to transact business on the account, unless any such party is reasonably believed to have engaged in suspected or attempted financial exploitation of the vulnerable adult;

b. Immediately, but in no event more than two business days after the requested disbursement, notifies the department and commission; and

c. Continues its internal review of the suspected or attempted financial exploitation of the vulnerable adult, as necessary, and reports any additional results of the investigation to the department and commission within seven business days after the requested disbursement.

(b) Any delay of a disbursement as authorized by this section expires upon the sooner of:

(1) A determination by the broker-dealer or investment adviser that the disbursement will not result in financial exploitation of the vulnerable adult.

(2) Fifteen business days after the date on which the broker-dealer or investment adviser first delayed disbursement of the funds, unless either the department or the commission requests that the broker-dealer or investment adviser extend the delay, in which case the delay shall expire no more than 25 business days after the date on which the broker-dealer or investment adviser first delayed disbursement of the funds unless sooner terminated by either the department or commission or an order of a court of competent jurisdiction.

(c) A court of competent jurisdiction may enter an order extending the delay of the disbursement of funds or may order other protective relief based on the petition of the commission, department, broker-dealer, or investment adviser that initiated the delay under this section, or other interested party.

(Act 2016-141, §7.)

§ 8-6-177 Delay of Disbursement - Liability

A broker-dealer or investment adviser that, in good faith and exercising reasonable care, complies with Section 8-6-176 shall be immune from any administrative or civil liability that might otherwise arise from such delay in a disbursement in accordance with this section.

(Act 2016-141, §8.)

§ 8-6-178 Access to and Availability of Records

A broker-dealer or investment adviser shall provide access to or copies of records that are relevant to the suspected or attempted financial exploitation of a vulnerable adult to agencies charged with administering state adult protective services laws and to law enforcement, either as part of a referral to the agency or to law enforcement, or upon request of the agency or law enforcement pursuant to an investigation. The records may include historical records as well as records relating to the most recent transaction or transactions that may comprise financial exploitation of a vulnerable adult. All records made available to agencies under this section are not a public record as defined in any state public records law. Nothing in this section shall limit or otherwise impede the authority of the commission to access or examine the books and records of broker-dealers and investment advisers as otherwise provided by law.

(Act 2016-141, §9.)

§ 8-6-179 Rulemaking Authority

The commission, from time to time, may make, amend, and rescind such rules pursuant to the Alabama Administrative Procedure Act and prescribe such forms as are necessary and desirable to carry out the provisions of this article. No rules or forms may be made or prescribed unless the commission finds that the action is necessary or appropriate in the public interest or for the protection of vulnerable adults and those protected under the article and consistent with the purposes fairly intended by the policy and provisions of this article. In prescribing rules and forms, the commission may cooperate with the securities administrators and adult protective services agencies of the other states and the United States Securities and Exchange Commission and the Financial Industry Regulatory Authority with a view to effectuating the policy of this article to achieve general uniformity in the application of the article wherever practicable.

(Act 2016-141, §10.)

Article 8 Elderly and Vulnerable Adult Financial Protection Act of 2021

§ 8-6-190 Short Title

This article shall be known and may be cited as the Elderly and Vulnerable Adult Financial Protection Act of 2021.

(Act 2021-78, §1.)

§ 8-6-191 Legislative Findings

The Legislature finds that instances of financial exploitation are on the rise in Alabama and elsewhere, particularly among elderly and vulnerable adults. The Legislature recognizes that while financial institutions are uniquely positioned to potentially uncover instances of financial exploitation, they are also subject to duties imposed by contract and law to conduct financial transactions in accordance with their customers’ instructions. While all instances of financial exploitation cannot be exposed, delayed, or thwarted, it is the intent of the Legislature that this article furnish financial institutions with additional tools to protect elderly and vulnerable adults from financial exploitation.

(Act 2021-78, §2.)

§ 8-6-192 Definitions

As used in this article, unless the context requires otherwise, the following terms have the following meanings:

(1) ACCOUNT. Funds or assets held by a financial service provider, including, but not limited to, a deposit account, checking account, money market account, savings account, share account, certificate of deposit, trust account, individual retirement account or other type of retirement account, guardianship or conservatorship account, investment or securities account, loan, credit card, or any extension of credit, including a home equity line of credit.

(2) ELDERLY ADULT. An individual 65 years of age or older.

(3) FINANCIAL EXPLOITATION. Any of the following:

a. The wrongful or unauthorized taking, withholding, appropriation, or use of money, assets, or property of an elderly or vulnerable adult, including incurring debt in the name of an elderly or vulnerable adult for the benefit of a third party.

b. Any act or omission taken by a person, including through the use of a power of attorney, guardianship, or conservatorship of an elderly or vulnerable adult, to do either of the following:

1. Obtain control through deception, intimidation, or undue influence over the elderly or vulnerable adult’s money, assets, or property to deprive the elderly or vulnerable adult of the ownership, use, benefit, or possession of his or her money, assets, or property.

2. Convert money, assets, or property of the elderly or vulnerable adult to deprive the elderly or vulnerable adult of the ownership, use, benefit, or possession of his or her money, assets, or property.

(4) FINANCIAL SERVICE PROVIDER. Any entity, including its employees and officers, regulated by the Alabama Credit Union Administration or the State Banking Department, or similar federal regulatory agency, engaged in or transacting business in this state, including, but not limited to, a state or national bank or trust company; a state or federal savings and loan association; a state or federal credit union; an industrial loan and thrift company; a mortgage loan lender, broker, originator, or servicer; a title pledge lender; a deferred presentment services provider; a pawnbroker; or a small loan lender.

(5) FINANCIAL TRANSACTION. Any of the following:

a. A transfer or request to transfer or disburse funds or assets in an account.

b. A request to initiate a wire transfer, initiate an automated clearing house transfer, or issue a money order, cashier’s check, or official check.

c. A request to negotiate a check or other negotiable instrument.

d. A request to change the ownership of an account.

e. A request for a loan, extension of credit, or draw on a line of credit.

f. A request to transfer the title to any real property or the title of any motor vehicle or mobile home, or to encumber such real property, motor vehicle, or mobile home.

(6) LAW ENFORCEMENT AGENCY. Any municipal, county, state, or federal agency the personnel of which have the power to arrest and to perform law enforcement functions, including prosecutorial entities.

(7) VULNERABLE ADULT. An individual 18 years of age or older who, because of mental or physical impairment, is unable to fully manage his or her own resources, carry out all or a portion of the activities of daily living, or is unable to fully protect against neglect, exploitation, or hazardous or abusive situations without assistance from others.

(Act 2021-78, §3.)

§ 8-6-193 Authority to Refuse or Delay Execution of a Financial Transaction

(a)(1) If a financial service provider has reasonable cause to suspect that financial exploitation may have occurred, may have been attempted, or is being attempted, the financial service provider may, but is not required to, refuse or delay the execution of a financial transaction on an account of an elderly or vulnerable adult; on an account on which the elderly or vulnerable adult is a beneficiary, including a trust, guardianship, or conservatorship account; or on an account of a person suspected of perpetrating the financial exploitation.

(2) A financial service provider may also refuse or delay the execution of a financial transaction under this section if the Department of Human Resources or a law enforcement agency provides information to the financial service provider demonstrating that it is reasonable to believe that financial exploitation may have occurred, may have been attempted, or is being attempted.

(b) Except as ordered by a court, a financial service provider is not required to refuse or delay the execution of a financial transaction under this section and may use its discretion to determine whether to refuse or delay the execution of a financial transaction based on the information available to the financial service provider.

(c) A financial service provider that refuses to execute a financial transaction or places a hold on a financial transaction based on reasonable cause to suspect that financial exploitation may have occurred, may have been attempted, or is being attempted shall do both of the following:

(1) Except with regard to an account administered by a bank or trust company in a fiduciary capacity, make a reasonable effort to notify one or more parties authorized to transact business on the account orally or in writing.

(2) If the incident involves financial exploitation, report the incident to the Department of Human Resources and the appropriate law enforcement agency.

(d) Notwithstanding subsection (c), notice to any party authorized to conduct business on the account is not required if the party is the suspected perpetrator of financial exploitation.

(e) A refusal by a financial service provider to execute a financial transaction or place a hold on a financial transaction as authorized by this section, based on the financial service provider’s reasonable cause to suspect that financial exploitation may have occurred, may have been attempted, or is being attempted, expires when the financial service provider reasonably believes that the financial transaction will not result in financial exploitation unless earlier terminated by an order of a court of competent jurisdiction.

(f) A financial service provider or an officer or employee of a financial service provider, acting in a reasonable manner, is immune from all criminal, civil, and administrative liability for the following:

(1) Refusing or not refusing to execute a financial transaction, or holding or not holding a financial transaction under this section.

(2) Actions taken in furtherance of the determination made under subdivision (1) if the determination was based upon a reasonable belief.

(Act 2021-78, §4.)

§ 8-6-194 Financial Service Provider Authorized to Contact Certain Individuals or Entities Upon Suspicion of Financial Exploitation; Disclosure of Information

(a) A financial service provider may offer to a customer who is an elderly or vulnerable adult the opportunity to submit and periodically update a list of individuals or entities that the elderly or vulnerable adult authorizes the financial service provider to contact when the financial service provider has reasonable cause to suspect that the elderly or vulnerable adult is a victim or a target of financial exploitation.

(b) A financial service provider that has reasonable cause to suspect that an elderly or vulnerable adult is the victim or target of financial exploitation may convey the suspicion to one or more of the following, provided that the person is not the suspected perpetrator:

(1) An individual or entity on the list described in subsection (a), if a list has been provided by the elderly or vulnerable adult to the financial service provider.

(2) A co-owner, additional authorized signatory, or beneficiary on the elderly or vulnerable adult’s account at the financial institution.

(3) A third party reasonably associated with the elderly or vulnerable adult.

(c) When providing information under this section, a financial service provider may limit the information and disclose only that the financial service provider has reasonable cause to suspect that the elderly or vulnerable adult may be a victim or target of financial exploitation without disclosing any other details or confidential personal information regarding the financial affairs of the elderly or vulnerable adult.

(d) A financial service provider may choose not to contact one or more individuals or entities on the list provided pursuant to subsection (a) if the financial service provider suspects that the person or persons are engaged in financial exploitation.

(e) A financial service provider may rely on information provided by the customer in compiling a list of contact persons.

(f) A financial service provider or an officer or employee of a financial service provider, acting in a reasonable manner, is immune from all criminal, civil, and administrative liability for contacting a person or electing not to contact a person under this section and for actions taken in furtherance of that determination.

(g) Any contact or disclosure of information made pursuant to this section is exempt from any applicable state customer consent and customer notice statutes or rules.

(Act 2021-78, §5.)

§ 8-6-195 Construction and Application of Article

(a) All laws or parts of laws which conflict with this article are repealed. Notwithstanding the previous sentence, nothing in this article shall be construed as altering or amending Article 7, commencing with Section 8-6-170, of Chapter 6, the Protection of Vulnerable Adults from Financial Exploitation Act, which relates to broker-dealers and investment advisors protecting vulnerable adults from financial exploitation.

(b) Nothing in this article shall be construed as altering or amending a contract, including a deposit agreement, to which a financial service provider is a party.

(Act 2021-78, §6.)

Chapter 7 Sale of Checks

§ 8-7-1 Short Title

[Repealed]

Repealed by Act 2017-389, §1, effective August 1, 2017.

(Acts 1961, Ex. Sess., No. 177, p. 2142, §1.)

§ 8-7-2 Definitions

[Repealed]

Repealed by Act 2017-389, §1, effective August 1, 2017.

(Acts 1961, Ex. Sess., No. 177, p. 2142, §2.)

§ 8-7-3 License - Required

[Repealed]

Repealed by Act 2017-389, §1, effective August 1, 2017.

(Acts 1961, Ex. Sess., No. 177, p. 2142, §3.)

§ 8-7-4 License - Exemptions

[Repealed]

Repealed by Act 2017-389, §1, effective August 1, 2017.

(Acts 1961, Ex. Sess., No. 177, p. 2142, §4.)

§ 8-7-5 License - Application

[Repealed]

Repealed by Act 2017-389, §1, effective August 1, 2017.

(Acts 1961, Ex. Sess., No. 177, p. 2142, §5.)

§ 8-7-6 License - Investigation Fee; License Fee

[Repealed]

Repealed by Act 2017-389, §1, effective August 1, 2017.

(Acts 1961, Ex. Sess., No. 177, p. 2142, §6; Acts 1991, No. 91-320, p. 584, §2.)

§ 8-7-7 License - Certified Financial Statement; Surety Bond or Deposit of Securities; List of Offices, Etc

[Repealed]

Repealed by Act 2017-389, §1, effective August 1, 2017.

(Acts 1961, Ex. Sess., No. 177, p. 2142, §7.)

§ 8-7-8 License - Issuance

[Repealed]

Repealed by Act 2017-389, §1, effective August 1, 2017.

(Acts 1961, Ex. Sess., No. 177, p. 2142, §8.)

§ 8-7-9 License Fees

[Repealed]

Repealed by Act 2017-389, §1, effective August 1, 2017.

(Acts 1961, Ex. Sess., No. 177, p. 2142, §9.)

§ 8-7-10 Employees, Agents or Representatives of Licensees

[Repealed]

Repealed by Act 2017-389, §1, effective August 1, 2017.

(Acts 1961, Ex. Sess., No. 177, p. 2142, §10.)

§ 8-7-11 Annual and Supplemental Listings of Offices, Etc.; Adjustment of Surety Bond or Deposit

[Repealed]

Repealed by Act 2017-389, §1, effective August 1, 2017.

(Acts 1961, Ex. Sess., No. 177, p. 2142, §11.)

§ 8-7-12 Procedure for Denial or Revocation of License; Judicial Review

[Repealed]

Repealed by Act 2017-389, §1, effective August 1, 2017.

(Acts 1961, Ex. Sess., No. 177, p. 2142, §12.)

§ 8-7-13 Grounds for Revocation of Licenses

[Repealed]

Repealed by Act 2017-389, §1, effective August 1, 2017.

(Acts 1960, Ex. Sess., No. 177, p. 2142, §13.)

§ 8-7-14 Increase of Surety Bond or Deposit

[Repealed]

Repealed by Act 2017-389, §1, effective August 1, 2017.

(Acts 1961, Ex. Sess., No. 177, p. 2142, §14.)

§ 8-7-15 Penalties for Violation of Provisions of Chapter

[Repealed]

Repealed by Act 2017-389, §1, effective August 1, 2017.

(Acts 1961, Ex. Sess., No. 177, p. 2142, §15.)

Chapter 7A Alabama Monetary Transmission Act

§ 8-7A-1 Short Title

This chapter may be cited as the Alabama Monetary Transmission Act.

(Act 2017-389, §2.)

§ 8-7A-2 Definitions

For purposes of this chapter, the following terms shall have the following meanings:

(1) AGENT or AUTHORIZED DELEGATE. Any person designated or employed by a licensee under this chapter to provide monetary transmission services on behalf of the licensee.

(2) APPLICANT. Any person that files an application for a license under this chapter.

(3) BANK. An institution organized under federal or state law which meets any of the following requirements:

a. Accepts demand deposits or deposits that the depositor may use for payment to third parties and engages in the business of making loans.

b. Engages in credit card operations and maintains only one office that accepts deposits, does not accept demand deposits or deposits that a depositor may use for payments to third parties, does not accept a savings or time deposit less than one hundred thousand dollars ($100,000), and does not engage in the business of making commercial loans.

c. Is a trust company subject to the jurisdiction of the Alabama State Banking Department, or subject to another state or federal banking regulatory authority.

(4) COMMISSION. The Alabama Securities Commission, its director, officers, or any person authorized to act on its behalf.

(5) CONTROL. Any of the following:

a. The ownership of, or the power to vote, directly or indirectly, at least 25 percent of a class of voting securities or voting interests of a licensee or person in control of a licensee.

b. The power to elect a majority of executive officers, managers, directors, trustees, or other persons exercising managerial authority of a licensee or person in control of a licensee.

c. The power to exercise, directly or indirectly, a controlling influence over the management or policies of a licensee or person in control of a licensee.

(6) EXECUTIVE OFFICER. A president, chair of the executive committee, chief financial officer, responsible individual, or other individual who performs similar functions.

(7) LICENSEE. A person licensed under this chapter.

(8) MONETARY VALUE. A medium of exchange, including virtual or fiat currencies, whether or not redeemable in money.

(9) MONEY. A medium of exchange that is authorized or adopted by the United States or a foreign government. The term includes a monetary unit of account established by an intergovernmental organization or by agreement between two or more governments.

(10) MONEY TRANSMISSION. Selling or issuing payment instruments, stored value, or receiving money or monetary value for transmission. The term does not include the provision solely of delivery, online or telecommunications services, or network access.

(11) PAYMENT INSTRUMENT. A check, draft, money order, traveler’s check, or other means utilized for the transmission or payment of money or monetary value, whether or not negotiable. The term does not include a credit voucher, letter of credit, or instrument that is redeemable by the issuer in goods and services.

(12) PERSON. An individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, government; governmental subdivision, agency, or instrumentality; public corporation; or any other legal or commercial entity.

(13) RECORD. Information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.

(14) RESPONSIBLE INDIVIDUAL. An individual who is employed by a licensee and has managerial authority over the provision of the money transmittal services of the licensee in this state.

(15) STORED VALUE. Monetary value that is evidenced by an electronic record.

(16) UNSAFE OR UNSOUND PRACTICE. A practice or conduct by a person licensed to engage in money transmission or an authorized delegate of such person which creates the likelihood of material loss, insolvency, or dissipation of the licensee’s assets, or otherwise prejudices the interests of its customers or a practice or conduct defined by rule of the commission to be an unsafe or unsound practice.

(Act 2017-389, §2.)

§ 8-7A-3 Exclusions

This chapter does not apply to any of the following:

(1) The United States or a department, agency, or instrumentality thereof.

(2) The transmission of money by the United States Postal Service or by a contractor on behalf of the United States Postal Service.

(3) A state, county, city, or any other governmental agency or governmental subdivision of a state.

(4) Electronic funds transfer of governmental benefits for a federal, state, or governmental agency by a contractor on behalf of the United States or a department, agency, or instrumentality thereof, or a state or governmental subdivision, agency, or instrumentality thereof.

(5) A board of trade designated as a contract market under the federal Commodity Exchange Act, 7 U.S.C. Sections 1-25 (1994), or a person that, in the ordinary course of business, provides clearance and settlement services for a board of trade to the extent of its operation as or for such a board.

(6) A registered futures commission merchant under the federal commodities laws to the extent of its operation as such a merchant.

(7) A bank, bank holding company, office of an international banking corporation, or a branch of a foreign bank, provided that such international banking corporation or foreign bank is subject to regulation significantly similar to United States or state chartered banks and deposits are insured.

(Act 2017-389, §2.)

§ 8-7A-4 Exemptions from Licensing

Sections 8-7A-5 to 8-7A-15, inclusive, shall not apply to any of the following persons:

(1) A person that provides clearance or settlement services pursuant to a registration as a clearing agency or an exemption from such registration granted under the federal securities laws.

(2) An operator of a payment system to the extent that it provides processing, clearing, or settlement services, between or among persons excluded by this section, in connection with wire transfers, credit card transactions, debit card transactions, stored-value transactions, automated clearing house transfers, or similar funds transfers.

(3) A person registered as a securities broker-dealer under federal or state securities laws to the extent of its operation as such a broker-dealer.

(4) Any person collecting, forwarding, or submitting payments to the state, a state agency, board, or commission, a quasi-governmental agency, or to persons in state custody, provided the person does all of the following:

a. Operates in this state exclusively for such purpose.

b. Has entered into a binding contract with the governmental entity or entities to provide money transmittal services to third parties.

c. Files a notice with the commission identifying all governmental agencies for whom the person has contracted to provide money transmittal services.

d. Has an independent audit performed on a yearly basis.

e. Immediately notifies the commission if any financial or other condition arises which would compromise the person’s ability to perform the services for which the person has contracted.

f. Maintains a segregated account or accounts for the deposit and transmittal of third-party payments which will not be comingled with any other funds.

g. Upon request, makes its books and records available for examination by the commission.

(Act 2017-389, §2.)

§ 8-7A-5 License Required

(a) A person may not engage in the business of money transmission or advertise, solicit, or hold itself out as providing money transmission unless the person meets one of the following requirements:

(1) Is licensed under this chapter.

(2) Is an authorized delegate of a person licensed under this chapter.

(b) A license under this chapter is not transferable or assignable.

(c) Persons licensed and in good standing pursuant to Chapter 7 of this title, on August 1, 2017, shall retain the license issued pursuant to that chapter without interruption until their next licensing renewal date.

(Act 2017-389, §§2, 3.)

§ 8-7A-6 Application for License

(a) A person applying for a license under this chapter shall do so in a form and in a medium prescribed by the commission. The application shall contain all of the following information:

(1) The legal name, the residential address of the applicant if the applicant is an individual, the business addresses of the applicant, and any fictitious or trade name used by the applicant in conducting its business.

(2) A list of any criminal convictions of the applicant and any material litigation in which the applicant has been involved in the 10-year period preceding the submission of the application.

(3) A description of any money transmission services previously provided by the applicant.

(4) A list of the proposed authorized delegates of the applicant and the locations in this state where the applicant and its authorized delegates propose to engage in money transmission services.

(5) A list of other states in which the applicant is licensed to engage in money transmission or provide other money services and any license revocations, suspensions, or other disciplinary action taken against the applicant in another state.

(6) Information concerning any bankruptcy within the last seven years, or receivership proceedings affecting the applicant or any control person or affiliate of the applicant.

(7) A sample form of any contract the applicant proposes to use, including both of the following:

a. Any contract to be used by an authorized delegate or agent of the applicant.

b. Any contract to be used with consumers relating to the provision of money transmission services.

(8) A sample form of any payment instrument or instrument upon which stored value is recorded, if applicable.

(9) The names and addresses of any banks through which the applicant’s payment instruments and stored value will be paid.

(10) Any other information the commission reasonably requires with respect to the applicant.

(b) If an applicant is not an individual or natural person, in addition to the information required in subsection (a), the applicant shall provide all of the following information:

(1) The date of the applicant’s incorporation or formation and state or country of incorporation or formation.

(2) A certificate of good standing from the state or country in which the applicant is incorporated or formed and proof of registration with the Alabama Secretary of State to do business as a foreign corporation, if incorporated in another state or country.

(3) A brief description of the structure or organization of the applicant, including any parent, affiliate, or subsidiary of the applicant, and whether any parent, affiliate, or subsidiary is publicly traded.

(4) The legal name, any fictitious name, all business and residential addresses, and the employment, for the 10 years preceding the submission of the application for each executive officer, manager, director, or a person who has direct or indirect control of the applicant.

(5) A list of criminal convictions of, and material litigation involving, any executive officer, manager, director, or a person who has direct or indirect control of the applicant, for the 10 years preceding the submission of the application.

(6) A copy of the applicant’s audited financial statements for the most recent fiscal year and, if available, for the two-year period preceding the submission of the application.

(7) A copy of the applicant’s unconsolidated financial statements for the current fiscal year.

(8) If the applicant has a registered agent in this state, the name and address of the applicant’s registered agent.

(9) Any other information the commission reasonably requires with respect to the applicant.

(c) A nonrefundable filing fee and a license fee shall accompany an application for a license under this chapter. The commission may set the filing and license fees by rule. The minimum filing fee and license fee shall not be less than five hundred dollars ($500), respectively.

(d) The commission may waive one or more of the requirements in subsections (a) and (b) or permit an applicant to submit alternate information in lieu of the required information.

(Act 2017-389, §2.)

§ 8-7A-7 Security

(a) A licensee shall maintain a surety bond, letter of credit, or other similar security in an amount, determined by rule or order of the commission, sufficient to secure faithful performance of the obligations of the licensee with respect to money transmission in Alabama.

(b) Security must be in a form satisfactory to the commission and payable to the commission for the benefit of any claimant against the licensee.

(c) A claimant against a licensee may maintain an action on the bond, or the commission may maintain an action on behalf of the claimant.

(d) A surety bond must cover claims for a minimum of five years after the licensee ceases to provide money transmission services in this state. The surety bond may be reduced or eliminated, at the discretion of the commission, to the extent the amount of the licensee’s outstanding payment instruments and stored-value obligations are less than the surety bond coverage.

(e) The commission has discretion to accept other forms of security in lieu of the bond.

(f) In no event shall the bond be set at an amount less than one hundred thousand dollars ($100,000), or the average daily outstanding obligations for money received for transmission in Alabama plus 50 percent of the average daily outstanding payment instrument and stored value obligations in Alabama, whichever is greater.

(g) The commission may increase the amount of security required to a maximum of five million dollars ($5,000,000) if the financial condition of a licensee so requires, as evidenced by reduction of net worth, financial losses, or other relevant criteria.

(Act 2017-389, §2.)

§ 8-7A-8 Issuance of License

(a) When an application is filed under this chapter, the commission shall investigate the applicant’s financial condition and responsibility, financial and business experience, character, and general fitness. The commission may conduct an on-site investigation of the applicant, the reasonable cost of which the applicant must pay. The commission shall issue a license to an applicant under this chapter if the commission finds that both of the following conditions have been fulfilled:

(1) The applicant has complied with Sections 8-7A-6 and 8-7A-7.

(2) The financial condition and responsibility, financial and business experience, competence, character, and general fitness of the applicant; and the competence, experience, character, and general fitness of the executive officers, managers, directors, and persons in control of the applicant indicate that it is in the interest of the public to permit the applicant to engage in money transmission.

(b) When an application for an original license under this chapter is determined by the commission to be complete, the commission shall promptly notify the applicant in writing of the date on which the application was determined to be complete, and:

(1) The commission shall approve or deny the application within 120 days after that date.

(2) If the application is not approved or denied within 120 days after that date, the application is approved, and the license takes effect as of the first business day after expiration of the 120-day period.

(c) The commission may for good cause extend the application period.

(Act 2017-389, §2.)

§ 8-7A-9 Renewal of License

(a) All licenses under this chapter shall expire on March 31 of the calendar year.

(b) A licensee under this chapter shall pay an annual renewal fee no later than March 15. The renewal fee shall be established by rule of the commission and shall not be less than five hundred dollars ($500).

(c) A licensee under this chapter shall submit a renewal report with the renewal fee, in a form and in a medium prescribed by the commission. The renewal report shall contain the following information:

(1) A copy of the licensee’s most recent audited financial statement.

(2) The number and monetary value of payment and stored-value instruments sold by the licensee in this state which have not been included in a previous renewal report, and the monetary amount of payment and stored-value instruments currently outstanding.

(3) A description of each material change in information submitted by the licensee in its original license application which has not been reported to the commission.

(4) Proof that the licensee continues to maintain adequate security as required by Section 8-7A-7.

(5) A list of the locations in this state where the licensee or an authorized delegate of the licensee engages in money transmission.

(d) The renewal license shall become immediately effective upon the expiration of the current license if the licensee has submitted the renewal fee pursuant to subsection (b) and the required reports pursuant to subsection (c) to the commission.

(e) If the licensee fails to renew the license prior to March 31, the licensee shall have 20 days from the expiration date to submit the renewal fee and report required pursuant to subsections (b) and (c), plus a late fee of one hundred dollars ($100) for each day between expiration of the license and submission of the renewal report. If the licensee perfects renewal of the license prior to the expiration of the 20 days, the license renewal shall be effective on April 1, and the licensee shall not be liable for unlicensed monetary transmission during the period between the statutory expiration date and the date the renewal is perfected.

(f) The commission, for good cause, may grant an extension of the renewal date.

(Act 2017-389, §2.)

§ 8-7A-10 Net Worth

A licensee under this chapter shall maintain a net worth of at least twenty-five thousand dollars ($25,000) determined in accordance with generally accepted accounting principles.

(Act 2017-389, §2.)

§ 8-7A-11 Relationship Between Licensee and Authorized Delegate

(a) A contract between a licensee and an authorized delegate shall require the authorized delegate to operate in full compliance with this chapter.

(b) The licensee shall establish, furnish, and enforce policies and procedures sufficient to ensure that its authorized delegates comply with this chapter.

(c) An authorized delegate may not use a subdelegate to conduct money transmission on behalf of a licensee.

(Act 2017-389, §2.)

§ 8-7A-12 Examinations

(a) The commission may conduct an annual examination of a licensee or of any of its authorized delegates.

(b) The commission may examine a licensee or its authorized delegate, at any time, if the commission has reason to believe that the licensee or authorized delegate is engaging in an unsafe or unsound practice or has violated or is violating this chapter or any rule adopted or order issued under this chapter.

(c) If the commission concludes that an on-site examination is necessary under subsection (b), the licensee shall pay the reasonable cost of the examination.

(d) Information obtained during any examination under this chapter may be disclosed only as prescribed in Section 8-7A-21.

(Act 2017-389, §2.)

§ 8-7A-13 Reports

(a) A licensee shall file a report to the commission within 15 business days of any material change in information provided in a licensee’s application.

(b) A licensee shall file a report with the commission within five business days after the licensee has reason to know of the occurrence of any of the following events:

(1) The filing of a petition by or against the licensee under the United States Bankruptcy Code for bankruptcy or reorganization.

(2) The filing of a petition by or against the licensee for receivership, the commencement of any other judicial or administrative proceeding for its dissolution or reorganization, or the making of a general assignment for the benefit of its creditors.

(3) The commencement of a proceeding to revoke or suspend its license in a state or country in which the licensee engages in business or is licensed.

(4) The cancellation or other impairment of the licensee’s bond or other security.

(5) A charge or conviction of the licensee or of an executive officer, manager, commission, or other control person of the licensee for a felony.

(6) A charge or conviction of an authorized delegate of the licensee for a felony.

(7) The executive officers, managers, directors, an authorized delegate, or persons in control of the licensee are named in any material civil litigation or class action.

(c) (1) A licensee shall give notice of a proposed change of control within 15 days after learning of the proposed change in control.

(2) The commission shall approve a request for change of control if, after investigation, the commission determines that the person or group of persons requesting approval has the competence, experience, character, and general fitness to operate the licensee or person in control of the licensee in a lawful and proper manner and that the public interest will not be jeopardized by the change of control.

(3) The commission shall approve or deny a request for change of control within 120 days after the notice. If the request has not been approved or denied within 120 days, the request will be deemed to have been approved and will take effect on the first day after the expiration of the 120 days.

(d) A licensee and an authorized delegate shall maintain a file of all reports required by federal currency reporting, record keeping, and suspicious transaction reporting requirements as set forth in 31 U.S.C. Section 5311 (1994), and other federal and state laws pertaining to money laundering. If an investigation or other inquiry is initiated by any regulatory authority, the licensee shall immediately notify the commission and forward all records associated with such investigation or inquiry.

(Act 2017-389, §2.)

§ 8-7A-14 Records

(a) A licensee shall maintain all of the following records for determining its compliance with this chapter:

(1) A record of each payment instrument or stored-value obligation sold.

(2) A general ledger posted at least monthly containing all assets, liabilities, capital, income, and expense accounts.

(3) Bank statements and reconciliation records.

(4) Records of outstanding payment instruments and stored-value obligations.

(5) Records of each payment instrument and stored-value obligation paid within a five-year period.

(6) A list of names and addresses of all of the licensee’s authorized delegates.

(7) Any other record the commission requires by rule.

(b) The records referenced in subsection (a) shall be maintained by the licensee for a minimum of five years. Records may be maintained outside of the state.

(c) All records of a licensee, authorized delegate, or applicant shall be subject to reasonable, periodic, or special examination, at any time or from time to time, whether the records are located within or outside of this state, as the commission deems necessary or appropriate to the public interest. The licensee shall make any record available for inspection by the commission within five business days of the request.

(Act 2017-389, §2.)

§ 8-7A-15 Suspension and Revocation

(a) The commission, by order, may suspend or revoke a license or order a licensee to revoke the designation of an authorized delegate, with or without prior notice, if the commission finds that such an order is in the best interest of the public, and any of the following circumstances exist:

(1) The licensee has violated any provision of this chapter or a rule adopted or an order issued under this chapter.

(2) The licensee, or any authorized delegate, does not cooperate with an examination or investigation by the commission.

(3) The licensee, or any authorized delegate, engaged in fraud, intentional misrepresentation, or gross negligence.

(4) An authorized delegate is convicted of a violation of a state or federal anti-money laundering statute, or willfully violates a rule adopted or an order issued under this chapter.

(5) The competence, experience, character, or general fitness of the licensee, authorized delegate, or a control person of a licensee indicates that it is not in the public interest to permit the person to provide money transmission services.

(6) The licensee becomes insolvent, suspends payment of its obligations, or makes a general assignment for the benefit of its creditors.

(7) The licensee engages in an unsafe or unsound practice. In determining whether a licensee is engaging in an unsafe or unsound practice, the commission may consider the size and financial condition of the licensee’s money transmission business, the magnitude of any losses, the severity of the violation of this chapter, and the previous disciplinary history of the person involved.

(b) The commission may issue an order suspending or revoking the designation of an authorized delegate, if the commission finds that such order is in the best interest of the public, and any of the following circumstances exist:

(1) The authorized delegate has violated any provision of this chapter or a rule adopted or an order issued under this chapter.

(2) The authorized delegate does not cooperate with an examination or investigation by the commission.

(3) The authorized delegate engaged in fraud, intentional misrepresentation, or gross negligence.

(4) An authorized delegate is convicted of a violation of a state or federal anti-money laundering statute, or willfully violates a rule adopted or an order issued under this chapter.

(5) The competence, experience, character, or general fitness of the authorized delegate indicates that it is not in the public interest to permit the person to provide money transmission services.

(6) The authorized delegate engages in an unsafe or unsound practice. In determining whether a licensee is engaging in an unsafe or unsound practice, the commission may consider the size and financial condition of the licensee’s money transmission business, magnitude of any losses, severity of the violation of this chapter, and previous disciplinary history of the person involved.

(Act 2017-389, §2.)

§ 8-7A-16 Unauthorized Activities

A person may not provide monetary transmission services on behalf of a person required to be licensed who is not licensed under this chapter. The commission, by rule or order, may further define unauthorized activities.

(Act 2017-389, §2.)

§ 8-7A-17 Orders to Cease and Desist and Other Injunctive or Civil Relief

(a) If the commission determines that any person has engaged in or is about to engage in any act or practice constituting a violation of this chapter or a rule adopted or an order issued under this chapter, the commission, in its discretion, may do any of the following:

(1) Issue an order, with or without a prior hearing or notice, against the person or persons engaged in the act or practice, directing them to cease and desist from engaging in the act or practice.

(2) Issue an order appointing a receiver or conservator over a respondent or the respondent’s assets.

(3) Order restitution or disgorgement against any person who has violated this chapter or any rule adopted or order issued pursuant to this chapter.

(4) Bring an action in any court of competent jurisdiction to enjoin an act or practice and to enforce compliance with this chapter or any rule adopted or order issued hereunder. Upon a proper showing, the court may issue a temporary restraining order or permanently enjoin any unlawful act or practice.

(b) The commission shall not be required to post a bond.

(Act 2017-389, §2.)

§ 8-7A-18 Consent Orders

The commission may enter into a consent order at any time with a person to resolve a matter arising under this chapter or a rule adopted or order issued under this chapter. A consent order must be signed by the person to whom it is issued or by the person’s authorized representative, and must indicate agreement with the terms contained in the order.

(Act 2017-389, §2.)

§ 8-7A-19 Civil Penalties

(a) The commission may assess a civil penalty against a person that violates this chapter or a rule adopted or an order issued under this chapter in an amount not to exceed one thousand dollars ($1,000) per day for each day the violation is outstanding.

(b) In addition to the assessment in subsection (a), the commission may assess a charge for the actual cost of any investigation resulting from any violation of this chapter, a violation of any rule or order issued under this chapter, or the cost of any examination made by the commission pursuant to this chapter, to the person or persons subject to such investigation or examination. All assessments collected under this subsection shall be deposited in the Alabama Securities Commission Fund in the State Treasury to be drawn upon by the commission for its use in administration of this chapter.

(Act 2017-389, §2.)

§ 8-7A-20 Criminal Penalties

(a) A person that intentionally makes a false statement, misrepresentation, or false certification in a record filed or required to be maintained under this chapter or that intentionally makes a false entry or omits a material entry in such a record, upon conviction, shall be guilty of a Class D felony.

(b) A person that knowingly engages in an activity for which a license is required under this chapter without being licensed under this chapter and who receives more than five thousand dollars ($5,000) in compensation within a one-year period from this activity, upon conviction, shall be guilty of a Class C felony.

(c) A person that knowingly engages in an activity for which a license is required under this chapter without being licensed under this chapter and who receives no more than five thousand dollars ($5,000) in compensation within a one-year period from this activity, upon conviction, shall be guilty of a Class D felony.

(d) The enforcement of this chapter shall be vested in the commission. It is the duty of the commission to enforce this chapter and to investigate, prevent, and detect violations of this chapter. The commission is vested with the rights, privileges, and powers conferred by law upon district attorneys, including the power to appear before grand juries and to interrogate witnesses before such grand jury. A district attorney may empower the commission to proceed on its behalf in any proceeding under this chapter.

(e) In any proceeding under this chapter, scienter need not be alleged and proved in prosecutions of violations involving unlicensed money transmission.

(f) A proceeding under this chapter shall not preempt or foreclose any criminal action or liability which may arise under any other criminal provision of the Code of Alabama 1975.

(Act 2017-389, §2.)

§ 8-7A-21 Confidentiality

(a) Except as otherwise provided in subsection (b), all information or reports obtained by the commission from the applicant, licensee, or authorized delegate and all information contained in or related to examination, investigation, operation, or condition reports prepared by, or on behalf of, or for the use of the commission, are confidential and are not subject to disclosure under Section 36-12-40.

(b) The commission may disclose information not otherwise subject to disclosure under subsection (a) to representatives of state and federal agencies, provided the agencies submit an undertaking to maintain the confidentiality of the information in a record.

(c) This section does not prohibit the commission from disclosing to the public a list of persons licensed under this chapter or the aggregated financial data concerning those licensees.

(Act 2017-389, §2.)

§ 8-7A-22 Cooperation

The commission may consult and cooperate with other federal and state agencies in enforcing and administering this chapter. The commission may jointly pursue examinations and take other official action that it is otherwise empowered to take.

(Act 2017-389, §2.)

§ 8-7A-23 Investigation and Subpoenas by Commission

(a) The commission may do any of the following:

(1) Make such public or private investigations within or outside of this state as it deems necessary to determine whether: Any license under this chapter should be granted, denied, suspended, or revoked; any person has violated or is about to violate any provision of this chapter or any rule or order hereunder; or to aid in the enforcement of this chapter or in the prescribing of rules and forms hereunder.

(2) Require or permit any person to file a statement in writing, under oath, or otherwise as the commission may determine, as to all the facts and circumstances concerning the matter to be investigated.

(3) Publish information concerning any violation of this chapter or any rule or order hereunder.

(b) In relation to any investigation or proceeding under this chapter, the commission, or any officer designated, may administer oaths and affirmations, subpoena witnesses, compel their attendance, take evidence, and require the production of any books, papers, correspondence, memoranda, agreements, or other documents or records which the commission deems relevant to the inquiry.

(c) In case of refusal to obey a subpoena, upon application by the commission, any court of competent jurisdiction may issue an order to the person failing to obey the subpoena requiring that person to appear before the commission or the officer designated by it, to produce documentary evidence if so ordered, or to give evidence touching the matter under investigation or in question. The court may hold any person who fails to obey an order of the court in contempt of court.

(d) No person is excused from attending and testifying or from producing any document or record before the commission or any officer designated by it, in any proceeding instituted by the commission, on the ground that the testimony or evidence, documentary or otherwise, required of the person may tend to incriminate him or her or subject him or her to a penalty or forfeiture. No individual may be prosecuted or subjected to any penalty or forfeiture using or based on information he or she offered after asserting such privilege, except that the individual so testifying shall not be exempt from prosecution and punishment for perjury committed in so testifying. Nothing in this section shall prohibit the commission from prosecuting any person compelled to testify or provide evidence, if the commission has sufficient evidence, derived from other sources not discovered, derived, or revealed from such compelled testimony or evidence, to sustain a prosecution for a violation under this chapter.

(Act 2017-389, §2.)

§ 8-7A-24 Party Aggrieved by Order Entitled to Hearing Before Commission; Appeals from Action of Commission

(a) Any person aggrieved by an order issued under this chapter shall be entitled to a hearing, as authorized for contested cases, pursuant to the Administrative Procedure Act, Chapter 22 of Title 41, if the aggrieved person, within 28 days after delivery of the order, submits a written request for a hearing before the commission. The order shall disclose the right to a hearing upon written request within 28 days after delivery of the order. If no timely request for a hearing is made, the order shall constitute a final order of the commission.

(b) Any appeal from any final order of the commission shall be made to the Circuit Court of Montgomery County and shall be governed by the provisions of the Administrative Procedure Act pertaining to judicial review.

(Act 2017-389, §2.)

§ 8-7A-25 Burden of Proving an Exemption or an Exception from a Definition

In any proceeding under this chapter, the burden of proving an exemption or an exception from a definition is upon the person claiming it.

(Act 2017-389, §2.)

§ 8-7A-26 Making, Amending, and Rescinding Rules and Prescribing Forms

The commission from time to time, may make, amend, and rescind rules and prescribe forms as are necessary and desirable to carry out this chapter. No rules or forms may be made or prescribed unless the commission finds that the action is necessary or appropriate in the public interest and consistent with the purposes fairly intended by the policy and provisions of this chapter. In prescribing rules and forms, the commission may cooperate with the administrators of other states, industry representatives, and other federal regulatory bodies with a view to effectuate the policy of this chapter to achieve maximum uniformity in the form and content of applications and reports wherever practicable. All rules shall be adopted pursuant to the Alabama Administrative Procedure Act and, along with all forms adopted, be published by the commission.

(Act 2017-389, §2.)

§ 8-7A-27 Interpretive Opinions by the Commission

(a) The commission may issue interpretative opinions and no-action letters upon request from interested persons. Such opinions or no-action letters shall be limited in scope and may not be requested to provide legal advice to any person. No opinion or no-action letter shall be issued on a hypothetical basis.

(b) Any person who makes application to the commission for an interpretative opinion or no-action letter shall be assessed a nonrefundable filing fee of five hundred dollars ($500) upon application for such opinion or no-action letter.

(Act 2017-389, §2.)

§ 8-7A-28 Cryptocurrency Kiosk and Operator Requirements; Fraud Protection; Penalties

(a) This section shall be known and may be cited as the Cryptocurrency Kiosk Fraud Prevention Act.

(b) For purposes of this section, the following terms have the following meanings:

(1) BLOCKCHAIN ANALYTICS. Analysis of data from blockchains or publicly distributed ledgers, including associated transaction information.

(2) BLOCKCHAIN ANALYTICS AND TRACING SOFTWARE. A software service that uses blockchain analytics data to provide risk-specific information and tracing of virtual currency wallet addresses, among other virtual items.

(3) CONSUMER. Any individual who uses a cryptocurrency kiosk.

(4) CRYPTOCURRENCY. A virtual representation of value or rights that can be transferred, stored, or traded electronically and used for payments or investment purposes.

(5) CRYPTOCURRENCY ADDRESS. An alphanumeric identifier that represents a potential destination for a cryptocurrency transfer. A cryptocurrency address is associated with a virtual wallet.

(6) CRYPTOCURRENCY KIOSK. A physical, electronic terminal that is a mechanical agent of the cryptocurrency kiosk operator and that enables a cryptocurrency kiosk operator to facilitate the purchase, sale, or exchange of cryptocurrency for money, bank credit, or other cryptocurrency.

(7) EXISTING CONSUMER. Any consumer who engages in a cryptocurrency kiosk transaction that is not the consumer’s initial transaction or within the 30-day period immediately following his or her initial transaction.

(8) FEE. A charge or expense paid by the consumer.

(9) FINANCIAL INSTITUTION. Any bank, savings and loan association, or credit union operating in Alabama which is chartered under federal or state statutes.

(10) NEW CONSUMER. A consumer who is engaging in a transaction at a cryptocurrency kiosk in this state for the first time or who is within the 30-day period immediately after engaging in his or her first cryptocurrency kiosk transaction.

(11) OPERATOR. Any person that engages in cryptocurrency business activity through a cryptocurrency kiosk located in Alabama or operates or manages a cryptocurrency kiosk.

(12) PRIVACY COIN. A cryptocurrency with privacy-enhancing features designed to increase anonymity and reduce or eliminate the ability for the cryptocurrency to be traced using blockchain analytics and tracing software.

(13) TRANSACTION. A transaction conducted or performed through a cryptocurrency kiosk to purchase or sell cryptocurrency.

(14) TRANSACTION HASH. A unique identifier consisting of a string of characters which acts as a record of and provides proof that the transaction was verified and added to the blockchain.

(15) VIRTUAL WALLET. A software application or other electronic mechanism that provides a means to hold, store, or transfer cryptocurrency or nonfungible tokens.

(c)(1) A cryptocurrency kiosk operator shall disclose in a clear and conspicuous manner all relevant terms and conditions to use the products, services, kiosks, and other activities of the operator. The operator shall receive an acknowledgment of receipt of all disclosures required from a consumer through confirmation or consent. This disclosure shall include:

a. The United States dollar amount of the cryptocurrency involved in the transaction;

b. A listing, in United States dollars, of all fees to be collected by the cryptocurrency kiosk operator;

c. The total amount, in both the cryptocurrency and United States dollars, used in the transaction; and

d. The exchange rate clearly showing the difference between the market price of the cryptocurrency and the price of the cryptocurrency charged to the consumer.

(2)a. At the beginning of a transaction at a cryptocurrency kiosk, the operator shall ensure that the kiosk displays the following disclosures:

“WARNING: CONSUMER FRAUD OFTEN STARTS WITH CONTACT FROM A STRANGER ONLINE, BY PHONE, OR BY TEXT WHO IS INITIATING A DISHONEST SCHEME OR CRIMINAL OR FRAUDULENT ACTIVITY THAT MAY APPEAR IN MANY FORMS, INCLUDING THE FOLLOWING:

1. COMMUNICATION INITIATED BY SOMEONE STARTING A ROMANTIC RELATIONSHIP WHO BEGINS ASKING FOR FUNDS FOR REASONS SUCH AS AN EMERGENCY OR TO PAY TO VISIT YOU.

2. PROMPTS TO CLICK ON DESKTOP POP-UPS THAT INCLUDE VIRUS WARNINGS OR COMMUNICATIONS FROM ALLEGED FAMILIAR MERCHANTS.

3. COMMUNICATIONS FROM SOMEONE IMPERSONATING A REPRESENTATIVE OF YOUR BANK OR A LAW ENFORCEMENT OFFICER.

4. CLAIMS OF A FROZEN BANK ACCOUNT OR CREDIT CARD.

5. CLAIMS OF A FRAUDULENT BANK TRANSACTION.

6. CLAIMS OF IDENTITY THEFT OR AN OFFER OF EMPLOYMENT IN EXCHANGE FOR PAYMENT.

7. REQUESTS FOR A PAYMENT TO A GOVERNMENT AGENCY OR COMPANY.

8. REQUESTS FOR DISASTER RELIEF DONATIONS OR LOANS.

9. OFFERS TO PURCHASE LOTTERY TICKETS, SWEEPSTAKES, OR DRAWINGS FOR VEHICLES.

10. CLAIMS OF WINNING A LOTTERY BUT REQUIRES UP-FRONT FEES TO BE PAID BEFORE COLLECTING ANY WINNINGS.

11. COMMUNICATION FROM SOMEONE OFFERING TO TEACH YOU HOW TO TRADE CRYPTOCURRENCY.

IF YOU BELIEVE THAT YOU ARE A VICTIM OF FRAUDULENT CONDUCT, STOP AND CALL YOUR LOCAL LAW ENFORCEMENT AGENCY AND THE CRYPTOCURRENCY KIOSK OPERATOR.”

“WARNING: LOSSES DUE TO FRAUDULENT OR ACCIDENTAL TRANSACTIONS MAY NOT BE RECOVERABLE. TRANSACTIONS IN CRYPTOCURRENCY ARE IRREVERSIBLE. PEOPLE MAY USE CRYPTOCURRENCY TRANSACTIONS TO STEAL YOUR MONEY BY IMPERSONATING THE GOVERNMENT, ORGANIZATIONS, OR PEOPLE YOU KNOW. IMPERSONATORS MAY THREATEN JAIL TIME, CLAIM YOUR IDENTITY HAS BEEN STOLEN, ALLEGE THAT YOUR COMPUTER HAS BEEN HACKED, OR USE A NUMBER OF OTHER SCAMS. DO NOT DISCLOSE YOUR PRIVATE KEY THAT IS ASSOCIATED WITH YOUR VIRTUAL WALLET TO A THIRD PARTY. IF YOU BELIEVE THAT YOU ARE BEING SCAMMED, STOP AND CALL YOUR LOCAL LAW ENFORCEMENT AGENCY AND THE CRYPTOCURRENCY KIOSK OPERATOR.”

b. The kiosk shall display the disclosures in a conspicuous font and a color that contrasts with the background of the kiosk screen.

c. Each disclosure shall appear separately on the kiosk, and both disclosures must be accepted by the consumer before the transaction may be executed.

(d) At the completion of each transaction, the operator shall provide the consumer who made the transaction a physical or digital receipt that contains all of the following information:

(1) The operator’s name and contact information, including a telephone number to answer questions and register complaints.

(2) The type, value, date, and precise time of a transaction, and each applicable receiving cryptocurrency address in its entirety. If a digital receipt is selected, the operator shall provide the entire transaction hash in addition to the aforementioned items.

(3) The name and contact information of the sender.

(4) The name and contact information of the designated recipient if known.

(5) Fees charged by the operator.

(6) The exchange rate of the applicable cryptocurrency to the United States dollar.

(7) A statement of the operator’s refund policy.

(8) A statement of the refund policy required by this section.

(9) Any additional information required by rule or order of the commission under this chapter.

(e) If a consumer opts for a digital receipt pursuant to subsection (d), the operator shall provide the receipt to the email address or phone number provided by the consumer and to the commission.

(f)(1) A cryptocurrency kiosk operator shall use blockchain analytics and tracing software to prevent any transaction that involves a cryptocurrency address identified as being associated or affiliated with fraud or other criminal activity. If a consumer attempts to transact with a virtual wallet that is detected to be associated or affiliated with fraud or other criminal activity, the kiosk shall not execute the transaction.

(2)a. For a new consumer, an operator shall not accept transactions of more than one thousand United States dollars ($1,000) in cash, or the equivalent amount of foreign currency or cryptocurrency, in one calendar day, or ten thousand United States dollars ($10,000) in cash, or the equivalent amount of foreign currency or cryptocurrency in a calendar month, from the same consumer, regardless of whether the consumer uses one or multiple kiosks in the state.

b. For an existing consumer, an operator shall not accept transactions of more than ten thousand five hundred United States dollars ($10,500) in cash, or the equivalent amount of foreign currency or cryptocurrency, in one calendar day.

c. An operator shall use an identification verification process, operated in accordance with federal law, to verify the identity of every consumer for each transaction in order to comply with this subsection for all transactions.

(g) An operator shall provide enhanced due diligence protections for consumers who are 60 years of age or older. The commission shall adopt rules, pursuant to Section 8-7A-26, to implement this requirement.

(h) All operators headquartered in the United States shall provide live, United States-based, toll-free consumer service at all times. Operators shall prominently display the consumer service phone number on the cryptocurrency kiosk or on the kiosk screen during the transaction. The operator shall report all calls from consumers in Alabama regarding fraud to the commission upon request of the commission.

(i)(1) Operators shall provide a United States phone number and email address to serve as a dedicated communication line between the operator and relevant government agencies. This dedicated line shall be frequently monitored and used to facilitate law enforcement and regulatory agency communications with the operator.

(2) At the request of the commission, an operator shall provide the requesting agency with data from the operator’s blockchain analytics and tracing software or any other information regarding that data.

(j)(1)a. If a new consumer has been fraudulently induced to engage in a cryptocurrency kiosk transaction and has completed the requirements of subdivision (2), the operator shall issue a full refund for the fraudulently induced transaction, as well as all fees incurred through the transaction.

b. If an existing consumer has been fraudulently induced to engage in a cryptocurrency kiosk transaction and has completed the requirements of subdivision (2), the operator shall issue a refund for one-half of the value of the transaction, including all fees incurred through the transaction.

(2) The consumer shall complete all of the following to receive the refund pursuant to subdivision (1):

a. Contact the operator not more than 60 calendar days after the cryptocurrency kiosk transaction.

b. Contact a law enforcement agency, as well as the commission, not more than 60 calendar days after the transaction.

c. File a report with a law enforcement agency or the commission regarding the fraudulently induced transaction.

(3) A consumer who has been determined to be a victim of fraud is eligible to receive a refund regardless of whether an operator provided the disclosures prescribed in subsection (c) and the receipt required in subsection (d).

(4) An operator shall maintain a report of all refund requests made. The operator shall provide to the commission the name and contact information of the consumer who made the request, as well as the information on the receipt, upon request of the commission.

(k) An operator shall not share a kiosk with any financial institution and shall not use any signage that makes the cryptocurrency kiosk appear to be affiliated with or represented by any financial institution.

(l) An operator shall comply with all federal reporting requirements under the Bank Secrecy Act of 1970, Pub. L. No. 91-508, the USA PATRIOT Act, Pub. L. No. 107-56, and any other reporting requirement imposed from the Financial Crimes Enforcement Network or the Office of Foreign Assets Control.

(m) An operator shall not permit the buying, selling, or sending of privacy coins from cryptocurrency kiosks or online platforms in any capacity.

(n)(1) The commission, pursuant to Section 8-7A-19, may assess a civil penalty against a person that violates this section or a rule adopted or an order issued under this section.

(2) Any proceeding under this section pursued by the commission shall not preempt any criminal action or civil liability that may arise under any other state law.

(Act 2026-369, §1.)

Chapter 7B Financial Innovation and Market Expansion Act

§ 8-7B-1 Short Title; Legislative Intent

(a) This chapter shall be known and may be cited as the Financial Innovation and Market Expansion Act.

(b) The intent of this chapter is to implement Section 4(c) of the federal Guiding and Establishing National Innovation for U.S. Stablecoins Act, 12 U.S.C. § 5903(c), governing regulation of payment stablecoins at the state level.

(Act 2026-354, §1.)

§ 8-7B-2 Definitions

For the purposes of this chapter, the following terms have the following meanings:

(1) ALABAMA QUALIFIED PAYMENT STABLECOIN ISSUER. A stablecoin issuer licensed and approved by the commission through the licensing process in Section 8-7B-4.

(2) AUTHORIZED PAYMENT STABLECOIN. A payment stablecoin issued by an Alabama qualified payment stablecoin issuer.

(3) COMMISSION. The Alabama Securities Commission.

(4) COMPTROLLER. The federal Office of the Comptroller of the Currency.

(5) DIGITAL ASSET SERVICE PROVIDER. A person that, in the United States and for compensation or profit, engages in the business of exchanging digital assets for monetary value, exchanging digital assets for other digital assets, transferring digital assets to a third party, acting as a digital asset custodian, or participating in financial services relating to digital asset insurance. The term does not include a person that engages in the business of developing or operating distributed ledger protocols, self-custodial software interfaces, or validating transactions through a distributed ledger. The term does not include a person that participates in a liquidity poll or other similar mechanism for the provisioning of liquidity for peer-to-peer transactions.

(6) GENIUS ACT. The Guiding and Establishing National Innovation for U.S. Stablecoins Act, 12 U.S.C. §§ 5901-5916.

(7) GOVERNMENTAL ENTITY. Any state or local agency or instrumentality thereof located in the state.

(8) INTENTIONALLY. A person acts intentionally with respect to a result or to conduct described by a statute defining an offense, when his or her purpose is to cause that result or to engage in that conduct.

(9) KNOWINGLY. A person acts knowingly with respect to conduct or to a circumstance described by a statute defining an offense when he or she is aware that his or her conduct is of that nature or that the circumstance exists.

(10) OPEN, PUBLIC, OR DECENTRALIZED NETWORK. A blockchain network that is open to use by the public without permission of use by governing authorities or a network that is operated using distributed ledger technology, where the data is stored in separate physical locations.

(11) PAYMENT STABLECOIN. A digital asset or assets designed to maintain a stable value that is, or is designed to be, used as a means of payment or settlement. The issuer of the token:

a. Is obligated to convert, redeem, or repurchase the token for a fixed amount of monetary value; and

b. Represents, or creates the reasonable expectation, that the token will maintain a stable value relative to the value of a fixed amount of monetary value.

(12) PERMITTED PAYMENT STABLECOIN ISSUER. A person formed in the United States that is one of the following:

a. A subsidiary of an insured depository institution that has been approved to issue payment stablecoins under Section 5 of the GENIUS Act, 12 U.S.C. § 5904.

b. A nonbank entity approved by the comptroller, pursuant to Section 5 of the GENIUS Act, 12 U.S.C. § 5904, to issue payment stablecoins.

c. An uninsured national bank that is chartered by the comptroller and is approved by the comptroller, pursuant to Section 5 of the GENIUS Act, 12 U.S.C. § 5904, to issue payment stablecoins.

d. A federal branch that is approved by the comptroller, pursuant to Section 5 of the GENIUS Act, 12 U.S.C. § 5904, to issue payment stablecoins.

e. An entity legally established under the laws of a state and approved to issue payment stablecoins by a state payment stablecoin regulator, including Alabama qualified payment stablecoin issuers.

(Act 2026-354, §1.)

§ 8-7B-3 Payment Stablecoin Issuance and Sale Restrictions; Exceptions; Banking Activity Determinations

(a) No person may issue a payment stablecoin in the state, unless that person is a permitted payment stablecoin issuer.

(b) Beginning on July 18, 2028, no digital asset service provider may offer or sell a payment stablecoin to a person in the state, unless the payment stablecoin is issued by a permitted payment stablecoin issuer.

(c) This section shall not apply to the following transactions:

(1) Any direct transfer of payment stablecoin between two individuals, each acting on his or her own behalf and for his or her own lawful purposes, without the involvement of an intermediary.

(2) Any transaction involving the receipt of payment stablecoin by an individual between an account owned by the individual in the United States and an account owned by the individual abroad which are offered by the same parent company.

(3) Any transaction by means of a software or hardware wallet which facilitates an individual’s own custody of payment stablecoin.

(d) Notwithstanding any provision of this chapter to the contrary, any determination regarding banking activities shall be the sole authority of the Alabama State Banking Department pursuant to Title 5.

(Act 2026-354, §1.)

§ 8-7B-4 Alabama Qualified Payment Stablecoin Issuer - Application Requirements; Denial

(a)(1) The commission shall receive, review, and consider for approval applications from any person that seeks to issue or sell payment stablecoins as an Alabama qualified payment stablecoin issuer, and the commission shall establish a process and framework for the licensing, regulation, examination, and supervision of such persons, through the adoption of rules pursuant to Section 8-7B-8.

(2) The commission, upon receipt of a substantially complete application received under subdivision (1), shall evaluate and make a determination on each application based only on the criteria established under this chapter, and rules adopted pursuant to this chapter.

(b) The commission shall consider the following factors when determining whether an applicant, who submitted a substantially complete application, shall be licensed as an Alabama qualified payment stablecoin issuer:

(1) The ability of the applicant, based on the applicant’s financial condition and resources, to meet the requirements set forth under 12 U.S.C. § 5903.

(2) Whether an individual who has been convicted of a felony offense involving insider trading, embezzlement, cybercrime, money laundering, financing of terrorism, or financial fraud is serving as an officer or director of the applicant.

(3) The competence, experience, and integrity of the officers, directors, and principal shareholders of the applicant, its subsidiaries, and parent company, including:

a. The record of those officers, directors, and principal shareholders of compliance with laws and regulations; and

b. The ability of those officers, directors, and principal shareholders to fulfill any commitments to, and any conditions imposed by, the commission in connection with the application at issue and any prior applications.

(4) Whether the redemption policy of the applicant meets the standards under 12 U.S.C. § 5903.

(5) Any other factors established under federal regulations pursuant to the GENIUS Act or rules adopted pursuant to this chapter which are necessary to ensure the safety and soundness of the Alabama qualified payment stablecoin issuer.

(c) The commission shall render a decision on a substantially complete application submitted under subsection (a) not later than 120 days after receipt of the application.

(d)(1) For purposes of this section, an application shall be considered substantially complete if the application contains sufficient information for the commission to render a decision on whether the applicant satisfies the factors described in subsection (a).

(2) Not later than 30 days after receiving any application, the commission shall notify the applicant as to whether the commission considers the application to be substantially complete and, if the application is not substantially complete, the additional information the applicant must provide in order for the application to be considered substantially complete.

(3) An application considered substantially complete under this subsection shall remain substantially complete unless there is a material change in circumstances that requires the commission to treat the application as a new application.

(e)(1) The commission may only deny a substantially complete application received if the commission determines that the activities of the applicant would include any conduct that would authorize the commission to suspend or revoke a license under Section 8-7B-9(a).

(2) The issuance of a payment stablecoin on an open, public, or decentralized network shall not be a valid ground for denial of an application.

(f) If the commission denies a substantially complete application received under subsection (a), the commission, not later than 30 days after the date of denial, shall provide the applicant with written notice explaining the denial with specificity, including all findings made by the commission with respect to all identified material shortcomings in the application, including actionable recommendations on how the applicant could address the identified material shortcomings.

(g) The denial of an application under subsection (e) shall not prohibit the applicant from filing any subsequent application.

(Act 2026-354, §1.)

§ 8-7B-5 Alabama Qualified Payment Stablecoin Issuer - Performance of Permitted Activities

A provider is not required to obtain any other license or charter except for the requirement under this chapter to perform the activities permitted in Section 8-7B-3.

(Act 2026-354, §1.)

§ 8-7B-6 Alabama Qualified Payment Stablecoin Issuer - Certification Requirements

No later than 180 days after the approval of an application, and afterwards on an annual basis, each Alabama qualified payment stablecoin issuer shall submit to the commission a certification that the issuer, consistent with the requirements of the GENIUS Act, has implemented anti-money laundering and economic sanctions compliance programs that are reasonably designed to prevent the Alabama qualified payment stablecoin issuer from facilitating money laundering, in particular, facilitating money laundering for cartels and organizations designated as foreign terrorist organizations under 8 U.S.C. § 1189 and the financing of terrorist activities.

(Act 2026-354, §1.)

§ 8-7B-7 Alabama Qualified Payment Stablecoin Issuer - Compliance with Federal Law and Regulations

(a) An Alabama qualified payment stablecoin issuer shall comply with 12 U.S.C. § 5902(a) and any regulations adopted by federal governmental entities implementing the GENIUS Act.

(b) The commission, through the adoption of rules pursuant to Section 8-7B-8 or other means of notice, shall identify the federal laws and regulations applicable to Alabama qualified payment stablecoin issuers. The commission shall ensure that the minimum federal requirements apply to all Alabama qualified payment stablecoin issuers in the state.

(Act 2026-354, §1.)

§ 8-7B-8 Powers and Duties of Commission; Examination or Investigation; Exempt Positions

(a)(1) The commission shall adopt rules to administer and implement this chapter. These rules may include provisions that govern the recovery of the cost of administering and enforcing this chapter by imposing and collecting fees, fines, penalties, and costs associated with applications, examinations, investigations, and other actions required to implement this chapter.

(2) The rules adopted under subsection (a) shall include the following:

a. The establishment of a secure system for processing payments made using payment stablecoins.

b. Security and fraud prevention measures.

c. The creation of educational material regarding the use of payment stablecoins.

(b) The commission may conduct an examination or investigation of an Alabama qualified payment stablecoin issuer or otherwise take action authorized by this chapter or by a rule adopted or order issued under this chapter as reasonably necessary or appropriate to administer and implement this chapter, federal regulations implementing the GENIUS Act, and other applicable state and federal law. In performing the examination or investigation, the commission may:

(1) Conduct an on-site or off-site examination of the Alabama qualified payment stablecoin issuer as the commission may reasonably require;

(2) Conduct an examination in conjunction with other state agencies or federal government agencies;

(3) Accept the examination report of another state agency or federal government agency, or a report prepared by an independent accounting firm, which, upon being accepted by the commission, shall be considered an official report of the commission; and

(4) Summon and examine, under oath, individuals or employees of an Alabama qualified payment stablecoin issuer and require the individuals to produce records regarding any matter related to the condition and business of the licensee or an agent of the licensee.

(c) An Alabama qualified payment stablecoin issuer shall provide, and the commission shall have full and complete access to, all records the commission may reasonably require to conduct an examination. The records must be provided at the location and in the format specified by the commission, provided the commission may utilize multistate record production standards and examination procedures when such standards will reasonably achieve the requirements of this section.

(d) Unless otherwise directed by the commission, a licensee shall pay all costs reasonably incurred in connection with an examination of the licensee or the licensee’s authorized delegates.

(e) Information obtained during any examination under this chapter may be disclosed only as prescribed in Section 8-7B-15.

(f) In the course of an examination or investigation under subsection (b), the commission may do any of the following:

(1) Make such public or private investigations within or outside of this state as it deems necessary to determine whether: (i) any license under this chapter should be granted, denied, suspended, or revoked; (ii) any person has violated or is about to violate any provision of this chapter or any rule or order issued under this chapter; or (iii) any enforcement measures are necessary to be imposed on an Alabama qualified payment stablecoin issuer under this chapter.

(2) Require or permit any person to file a statement in writing, under oath, or otherwise as the commission may determine, as to all the facts and circumstances concerning the matter to be investigated.

(3) Publish information concerning any violation of this chapter or any rule or order adopted or issued under this chapter.

(4) Administer oaths and affirmations, subpoena witnesses, compel their attendance, take evidence, and require the production of any books, papers, correspondence, memoranda, agreements, or other documents or records which the commission deems relevant to the inquiry.

(g) In case of refusal to obey a subpoena, upon application by the commission, the Circuit Court of Montgomery County may issue an order to the person failing to obey the subpoena requiring the person to appear before the commission or the officer designated by it, to produce documentary evidence if so ordered, or to give evidence touching the matter under investigation or in question. The court may hold any person who fails to obey an order of the court in contempt of court.

(h) No person is excused from attending and testifying or from producing any document or record before the commission or any officer designated by it, in any proceeding instituted by the commission, on the ground that the testimony or evidence, documentary or otherwise, required of the person may tend to incriminate him or her or subject him or her to a penalty or forfeiture. No person may be prosecuted or subjected to any penalty or forfeiture using or based on information he or she offered after asserting such privilege, except that the person so testifying shall not be exempt from prosecution and punishment for perjury committed in so testifying. Nothing in this section shall prohibit the commission from prosecuting any person compelled to testify or provide evidence, if the commission has sufficient evidence, derived from other sources not discovered, derived, or revealed from such compelled testimony or evidence, to sustain a prosecution for a violation under this chapter.

(i) The commission may prescribe additional enforcement procedures under subsection (a) to ensure compliance with the GENIUS Act.

(j) The commission shall submit an annual report to the Legislature which shall include the current list of authorized payment stablecoins, the volume of transactions and cost savings, assessment of risks and safeguards, and any recommendations for legislative changes. The report shall be made publicly available on the commission’s website.

(k) This chapter shall not apply to an Alabama qualified payment stablecoin issuer to the extent that federal law precludes or preempts or has been determined to preclude or preempt the application of the provisions of this chapter to any Alabama qualified payment stablecoin issuer.

(l) In addition to any other exempt positions as otherwise allowed by law, the exempt positions in the commission shall include up to three highly trained, highly specialized securities professionals.

(Act 2026-354, §1.)

§ 8-7B-9 Suspension or Revocation of License

(a) The commission may suspend or revoke a license if the Alabama qualified payment stablecoin issuer:

(1) Violates this chapter or a rule adopted or an order issued under this chapter;

(2) Does not cooperate with an examination or investigation by the commission;

(3) Engages in fraud, intentional misrepresentation, or gross negligence;

(4) The competence, experience, character, or general fitness of the issuer, person in control of an issuer, key individual, or responsible individual of the authorized delegate indicates that it is not in the public interest to permit the issuer to issue a payment stablecoin;

(5) Engages in an unsafe or unsound practice; or

(6) Is insolvent, suspends payment of its obligations, or makes a general assignment for the benefit of its creditors.

(b) In determining the severity of the violation, the commission may consider the size and condition of the issuer’s payment stablecoin issuance, the magnitude of the loss, the gravity of the violation of this chapter, and the previous conduct of the person involved.

(Act 2026-354, §1.)

§ 8-7B-10 Violations of Chapter; Enforcement

(a) If the commission determines that any person has engaged in or is about to engage in any act or practice constituting a violation of this chapter or a rule adopted or an order issued under this chapter, the commission may do any of the following:

(1) Issue an order, with or without a prior hearing or notice, against the person or persons engaged in the act or practice, directing them to cease and desist from engaging in the act or practice.

(2) Issue an order appointing a receiver or conservator over a respondent or the respondent’s assets.

(3) Order restitution or disgorgement against any person who has violated this chapter or any rule adopted or order issued pursuant to this chapter.

(4) Bring an action in the Circuit Court of Montgomery County to enjoin an action or practice and to enforce compliance with this chapter or any rule adopted or order issued pursuant to this chapter. Upon a proper showing, the court may issue a temporary restraining order or permanently enjoin any unlawful act or practice.

(b) The commission shall not be required to post a bond for any actions taken pursuant to subsection (a).

(Act 2026-354, §1.)

§ 8-7B-11 Hearings; Appeals

(a) Any person aggrieved by an order or denial issued under this chapter shall be entitled to a hearing, as authorized for contested cases, pursuant to the Alabama Administrative Procedure Act, Chapter 22 of Title 41, if the aggrieved person, within 28 days after delivery of the order or denial, submits a written request for a hearing before the commission. The order shall disclose the right to a hearing upon written request within 28 days after delivery of the order. If no timely request for a hearing is made, the order shall constitute a final order of the commission.

(b) Any appeal from any final order of the commission shall be made to the Circuit Court of Montgomery County and shall be governed by the provisions of the Alabama Administrative Procedure Act, Chapter 22 of Title 41, pertaining to judicial review.

(Act 2026-354, §1.)

§ 8-7B-12 Consent Orders

The commission may enter into a consent order at any time with a person to resolve a matter arising under this chapter or a rule adopted or order issued under this chapter. A consent order must be signed by the person to whom it is issued or by the person’s authorized representative, and must indicate agreement with the terms contained in the order.

(Act 2026-354, §1.)

§ 8-7B-13 Prohibited Activities

(a) It is unlawful for any person, in connection with the offer, sale, or purchase of any stablecoin, directly or indirectly, to knowingly:

(1) Employ any device, scheme, or artifice to defraud a person;

(2) Make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made not misleading in the light of the circumstances under which the statements are made; or

(3) Engage in any act, practice, or course of business that operates or would operate as a fraud or deceit upon any person.

(b)(1) A person that knowingly violates subsection (a) shall be guilty of a Class B felony.

(2) The limitations period for any prosecution under this section does not commence or begin to accrue until the discovery of the facts constituting the deception, after which the prosecution shall be commenced within five years.

(c) A person that intentionally makes a false statement, misrepresentation, or false certification in a record filed or required to be maintained under this chapter or intentionally makes a false entry or omits a material entry in such a record is guilty of a Class C felony.

(d) A person that intentionally engages in an activity for which a license is required under this chapter without being licensed under this chapter and who receives more than five thousand dollars ($5,000) in compensation within a 30-day period from this activity is guilty of a Class C felony.

(e) A person that intentionally engages in an activity for which a license is required under this chapter without being licensed under this chapter and who receives five thousand dollars ($5,000) or less in compensation within a 30-day period from this activity is guilty of a Class D felony.

(f) The enforcement of this chapter shall be vested in the commission. It is the duty of the commission to enforce this chapter and to investigate, prevent, and detect violations of this chapter. The commission is vested with the rights, privileges, and powers conferred by law upon district attorneys, including the power to appear before grand juries and to interrogate witnesses before a grand jury. A district attorney may empower the commission to proceed on his or her behalf in any proceeding under this chapter.

(g) In any proceeding under this chapter, intent or knowledge need not be alleged and proved in prosecutions of violations involving unlicensed issuers.

(h) A proceeding under this chapter shall not preempt or foreclose any criminal action or liability that may arise under any other criminal provision.

(Act 2026-354, §1.)

§ 8-7B-14 Civil Penalties; Administrative Assessments

(a) The commission may assess a civil penalty against a person that violates this chapter or a rule adopted or an order issued under this chapter in an amount not to exceed one hundred thousand dollars ($100,000) per day for each day the violation is outstanding, plus the state’s costs and expenses for the investigation and prosecution of the matter, including reasonable attorney fees. All assessments collected under this section shall be deposited in the State General Fund.

(b) The commission may assess an administrative charge for the actual cost of any investigation resulting from any violation of this chapter, a violation of any rule or order issued under this chapter, or the cost of any examination made by the commission pursuant to this chapter, to the person or persons subject to the investigation or examination. All charges assessed for costs shall be deposited in the Alabama Securities Commission Fund in the State Treasury to be drawn upon by the commission for its use in the administration of this chapter.

(c) For the purposes of determining the amount or extent of an administrative assessment, if any, to be imposed under this section, the commission shall consider among other factors, the frequency, persistence, and willfulness of the conduct constituting a violation of any provision of this chapter or any rule or order issued under this chapter, and the number of persons adversely affected by the conduct.

(d) The administrative assessment under this section is in addition to any other penalty, remedy, or sanction that may be imposed under this chapter.

(Act 2026-354, §1.)

§ 8-7B-15 Disclosure of Confidential Information or Reports

(a) Except as otherwise provided in subsection (b), all information or reports obtained by the commission from the applicant, licensee, or authorized delegate and all information contained in or related to examination, investigation, operation, or condition reports prepared by, or on behalf of, or for the use of the commission, are confidential and are not subject to disclosure under Article 3 of Chapter 12, Title 36.

(b) The commission may disclose information not otherwise subject to disclosure under subsection (a) to representatives of state and federal agencies, provided the agencies submit an undertaking to maintain the confidentiality of the information in a record.

(c) This section shall not prohibit the commission from disclosing to the public a list of persons licensed under this chapter or the aggregated financial data concerning those licensees.

(Act 2026-354, §1.)

§ 8-7B-16 Insolvency Proceedings

In any insolvency proceeding of an Alabama qualified payment stablecoin issuer, including any insolvency proceeding administered by the commission, the following shall apply:

(1) The claim of a person holding any payment stablecoin issued by the Alabama qualified payment stablecoin issuer shall have priority, on a ratable basis with the claims of other persons holding the payment stablecoin, over the claims of the Alabama qualified payment stablecoin issuer and any other holder of claims against the Alabama qualified payment stablecoin issuer, with respect to required payment stablecoin reserves.

(2) Notwithstanding any other provision of law, any person holding a payment stablecoin issued by the Alabama qualified payment stablecoin issuer shall be deemed to hold a claim.

(3) The priority under subdivision (1) shall not apply to claims other than those arising directly from the holding of payment stablecoins.

(Act 2026-354, §1.)

Chapter 8 Interest and Usury

§ 8-8-1 Maximum Rates of Interest - Generally

Except as otherwise provided by law, the maximum rate of interest upon the loan or forbearance of money, goods, or things in action, except by written contract is $6 upon $100 for one year, and the rate of interest by written contract is not to exceed $8 upon $100 for one year and at that rate for a greater or less sum or for a longer or shorter time.

(Code 1852, §1519; Code 1867, §1827; Code 1876, §2088; Code 1886, §1750; Code 1896, §2626; Code 1907, §4619; Code 1923, §8563; Acts 1935, No. 37, p. 69; Code 1940, T. 9, §60.)

§ 8-8-1.1 Maximum Rates of Interest - Permitted Under State or Federal Law

(a) Individuals, partnerships, banks, corporations, and other legal entities may, on any loans or extensions of credit made by them, charge or impose the same rate of interest or finance charge to the same extent and under the same circumstances and conditions as any federal or state chartered or licensed lending institution having its principal place of business in Alabama; provided, however, that any individual or partnership charging or imposing interest or finance charges in excess of that permitted such lending institutions under other applicable law shall be subject to the same penalties prescribed in such other applicable law or laws for such excessive interest or finance charges.

(b) The provisions of this section are cumulative and nothing herein contained shall diminish rights or powers otherwise existing. The provisions of this section, as amended, shall have retroactive effect to May 14, 1979, when it became law; provided, however, that there shall be no change of interest rates on secured loans in existence as of April 25, 1980. Any actions taken or contracts made in accordance with the provisions of this section since May 14, 1979 are hereby ratified, validated, and confirmed.

(Acts 1979, No. 79-103, p. 125; Acts 1980, No. 80-259, p. 335.)

§ 8-8-1.2 Maximum Rates of Interest - Loans Secured by Savings Accounts

Any savings and loan association located within the State of Alabama may charge on loans secured by savings accounts a rate of interest of not more than two percent per annum in excess of the rate of return payable on any such savings account.

(Acts 1979, No. 79-104, p. 126.)

§ 8-8-2 Maximum Rates of Interest - Aggregation of Principal and Interest on Loans at Six Percent and Division into Installments

It shall be lawful to lend money at six percent per annum or less, to aggregate principal and interest at the date of the loan for the entire period of the loan and to divide the sum of the principal and interest for the entire period of the loan into monthly or other installments.

(Acts 1927, No. 376, p. 440; Code 1940, T. 9, §61; Acts 1953, No. 450, p. 554.)

§ 8-8-4 Maximum Rates of Interest - Loans, Etc., of $100,000 or More to State Board of Education and Trustees of State Educational Institutions

(a) The State Board of Education and the trustees of all state institutions where education is a part of the program of the institution as referred to in Section 16-3-28, when borrowing money in amounts of not less than $100,000, may agree to pay such rate or rates of interest not to exceed a rate of 15 percent per annum for the loan or forbearance of money as such board of education or trustees may determine, notwithstanding any law of this state otherwise prescribing or limiting such rate or rates of interest.

(b) As to any such agreement, neither such board of education or trustees, nor any surety, guarantor, endorser, or any other person, firm, partnership, association, or corporation which may become liable, in whole or in part, for the payment of the debt and interest agreed to be paid thereon in accordance with the terms hereof, or under any extension, amendment, or renewal thereof, may raise or claim the defense or benefit of the usury laws or any other law prescribing, regulating, or limiting such rate or rates of interest.

(c) The provisions of this section are cumulative and shall be construed in pari materia with other laws prescribing or limiting rates of interest on the loan of money and not in repeal thereof.

(Acts 1969, No. 1038, p. 1919; Acts 1970, Ex. Sess., No. 9, p. 2605.)

§ 8-8-5 Maximum Rates of Interest - Loans, Credit Sales, Etc., of $2,000 or More to Individuals, Corporations, Trusts, Partnerships, or Associations

(a) Any person or persons, corporations, trust, general partnership or partnerships, limited partnership or partnerships, or association may agree to pay such rate or rates of interest for the loan or forbearance of money and for any credit sales as such person, corporation, trust, general partnership, limited partnership, or association may determine, notwithstanding any law of this state otherwise prescribing or limiting such rate or rates of interest; provided, that the original principal balance of the loan or forbearance of money or credit sales is not less than $2,000; provided further, that all laws relating to unconscionability in consumer transactions including but not limited to the provisions of Chapter 19 of Title 5, known as the Mini-Code, shall apply to transactions covered by this section.

(b) As to any such loan or forbearance of money or credit sales made in compliance with subsection (a) of this section, neither such person, corporation, trust, general partnership, limited partnership, or association, nor their heirs, successors, or assigns, nor any surety, guarantor, endorser, or any other person, firm, partnership, association, trust, or corporation which may become liable, in whole or in part, for the payment of the debt and interest agreed to be paid thereon in accordance with the terms hereof, or any extension, amendment, or renewal thereof, may raise or claim the defense or benefit of the usury laws or any other law prescribing, regulating, or limiting such rate or rates of interest.

(c) The term “original principal balance,” as used herein, shall include the total principal amount of indebtedness incurred or contracted for in a loan, forbearance of money, credit sales, or in a single issue or sale of bonds, debentures, promissory notes, or like transaction, without regard either to the face amount or denomination of any bond, debenture, note, or other evidence of indebtedness constituting a part of such issue or sale, or to the amount of the initial or any subsequent advance pursuant to such loan, forbearance, or credit sales. The term “interest” as used herein shall include all direct or indirect charges imposed as an incident to a loan, forbearance of money, or credit sales.

(d) This section shall apply to any person or entity, whether or not organized for profit, and to transactions both prior to and after default, but shall not apply to any agreement involving the loan or forbearance of money or credit sales where the original principal balance is less than $2,000.

(e) The provisions of this section are cumulative to, and not in derogation of, rights under other provisions of state or federal law and shall not in any way repeal, amend, or modify the provisions of Public Law 96-221 enacted by the Congress of the United States and approved March 31, 1980, as amended.

(Acts 1970, Ex. Sess., No. 27, p. 2628; Acts 1980, No. 80-435, p. 659; Acts 1981, No. 81-503, p. 861, §1; Acts 1984, No. 84-108; Acts 1984, No. 84-308.)

§ 8-8-6 Maximum Rates of Interest - Exemption of Debts Incurred Pursuant to National Housing Act or Veterans’ Benefits

(a) All debts or extensions of credit incurred pursuant to any provision of the act of Congress known as the National Housing Act, as the same now exists or may hereafter be amended or supplemented, and all debts or extensions of credit incurred pursuant to any act of Congress relating to veterans’ benefits, as the same now exists or may hereafter be amended or supplemented, are exempt from any law of this state relating to usury or prescribing or limiting interest rates.

(b) The provisions of this section are remedial and supersede the provisions of any other act limiting interest rates in any way contrary to the provisions hereof.

(Acts 1969, No. 3, p. 297.)

§ 8-8-7 Maximum Rates of Interest - Exemption of Bonds, Notes, Etc., of State, Instrumentalities, Localities, Etc

Any bonds, notes, warrants, other evidences of indebtedness, or securities issued by the State of Alabama or any department, agency, or instrumentality thereof, by any not-for-profit public or private corporation at any time organized or created pursuant to act of the Legislature or executive order of the Governor for the purpose of acting as an instrumentality of the State of Alabama or otherwise acting in the public interest and by any board of water and sewer commissioners created under the provisions of Article 10, Chapter 50, Title 11, and authorized to issue bonds under Section 11-50-345 by any municipality, by any county, by any public corporation heretofore or hereafter organized or created in the State of Alabama pursuant to authorization, determination, finding, or other action of any municipality or municipalities or county or counties or the governing body of any one or more thereof, or by any city or county board of education, are hereby exempted from all laws of the State of Alabama governing usury or prescribing or limiting interest rates, including, without limitation, the provisions of this chapter.

(Acts 1975, 4th Ex. Sess., No. 53, p. 2665, §1; Acts 1982, No. 82-551, p. 911, §1.)

§ 8-8-8 Interest Accrues on Breach of Contract

All contracts, express or implied, for the payment of money, or other thing, or for the performance of any act or duty bear interest from the day such money, or thing, estimating it at its money value, should have been paid, or such act, estimating the compensation therefor in money, performed.

(Code 1852, §1520; Code 1867, §1828; Code 1876, §2089; Code 1886, §1751; Code 1896, §2627; Code 1907, §4620; Code 1923, §8564; Code 1940, T. 9, §62.)

§ 8-8-9 Interest on Unauthorized Change Bills and Notes Not Exceeding $1

All change bills and notes for a sum not exceeding $1 issued or circulated in this state without authority of law bear interest at the rate of 100 percent per annum from the day of their date, time of issue or circulation, and may be sued on by the holder thereof, without regard to the person to whom the same are payable, and a recovery had against the person issuing or giving circulation to the same.

(Code 1852, §1524; Code 1867, §1832; Code 1876, §2093; Code 1886, §1755; Code 1896, §2632; Code 1907, §4625; Code 1923, §8569; Code 1940, T. 9, §67.)

§ 8-8-10 Interest on Money Judgments and Costs

(a) Judgments for the payment of money, other than costs, if based upon a contract action, bear interest from the day of the cause of action, at the same rate of interest as stated in the contract; all other judgments shall bear interest at the rate of 7.5 percent per annum, the provisions of Section 8-8-1 to the contrary notwithstanding; provided, that fees allowed a trustee, executor, administrator, or attorney and taxed as a part of the cost of the proceeding shall bear interest at a like rate from the day of entry.

(b) This section shall apply to all judgments entered on and after September 1, 2011.

(Code 1852, §1521; Code 1867, §1829; Code 1876, §2090; Code 1886, §1752; Code 1896, §2628; Code 1907, §4621; Code 1923, §8565; Code 1940, T. 9, §63; Acts 1953, No. 64, p. 96; Acts 1981, 3rd Ex. Sess., No. 81-1115, p. 379; Acts 1982, No. 82-443, p. 696; Act 2011-521, p. 837, §1.)

§ 8-8-11 Application of Partial Payments to Principal and Interest

Except as provided in this section, when partial payments are made, the interest due is first to be paid and the balance applied to the payment of the principal. In the case of a judgment for child or spousal support, or a judgment for medical support of a child or spouse, any partial payment shall be applied first to the principal, and the remaining balance, if any, shall be applied to the interest.

(Code 1852, §1522; Code 1867, §1830; Code 1876, §2091; Code 1886, §1753; Code 1896, §2629; Code 1907, §4622; Code 1923, §8566; Code 1940, T. 9, §64; Acts 1995, No. 95-391, p. 799, §2.)

§ 8-8-12 Enforcement of Usurious Contracts

(a) Except as otherwise permitted by law, all contracts for the payment of interest upon the loan or forbearance of goods, money, things in action, or upon any contract whatever at a higher rate than is prescribed in this chapter are usurious and cannot be enforced except as to the principal.

(b) The borrower of money at a usurious rate of interest shall not in any case be required to pay more than the principal sum borrowed, and if any interest has been paid, the same must be deducted from the principal and judgment entered for the balance only; provided, however, that the defense of usury may not be pleaded against a holder in due course of any negotiable instrument.

(Code 1852, §1523; Code 1867, §1831; Code 1876, §2092; Code 1886, §1754; Code 1896, §2630; Code 1907, §4623; Code 1923, §8567; Acts 1931, No. 650, p. 783; Code 1940, T. 9, §65.)

§ 8-8-13 Collection on Notes, Etc., Discounted at Higher Rate of Interest Than Eight Percent

Except when otherwise permitted by law, any banker who discounts any note, bill of exchange, or draft at a higher rate of interest than eight percent per annum, not including the difference of exchange, cannot enforce the collection of the same, except as to principal; and if any interest has been paid, the same must be deducted from the principal and judgment entered for the balance only.

(Code 1852, §1417; Code 1867, §1689; Code 1876, §4435; Code 1886, §4140; Code 1896, §2631; Code 1907, §4624; Code 1923, §8568; Code 1940, T. 9, §66.)

§ 8-8-14 Interest Surcharge on Loans or Credit Sales; Refunds; Maximum Interest Rate Indexed to Prime Rate; Maximum Interest Rates for Open-End Credit Plans

(a) In addition to other lawful charges under various state laws, and notwithstanding any restrictions thereunder, a legal licensed lending institution, a vendor making credit sales, any financial institution operating in Alabama or any individual may, if provided in the contract, charge and collect at the time of making a loan or credit sale, on each contract of loan or credit sale, an interest surcharge of not more than six percent of the part of the amount financed, which is not in excess of two thousand dollars ($2000). In addition to any rebate to which the debtor is otherwise entitled, when any contract upon which an interest surcharge has been charged is prepaid in full by any means within 90 days of date of the contract, the creditor shall refund or credit the debtor with a pro rata portion of the interest surcharge, except that in such event an amount of no less than twenty-five dollars ($25) may be retained by the creditor.

(b) As an alternative to any other interest or finance charge allowed by state laws, and any law or regulation to the contrary notwithstanding, a lender or a vendor in credit sales, any financial institution operating in Alabama or any individual may, in connection with any credit sale, upon any type or class of loan, charge a maximum allowable rate on the amount of such loan or credit sale, not to exceed two percentage points above the prime rate at the time such loan or credit sales contract is executed; or if the debt is created under an open-end credit plan, the maximum finance charge in connection therewith shall be one and three-fourths percent per month on the first $750 or less, and one and one-half percent per month on the excess of any unpaid balance from time to time thereunder. For the purpose of this section, the prime rate shall be the average of the prime rates reported by the three largest banks in New York City as of the close of business three business days immediately preceding the date on which the loan or credit sale is made.

(c) The provisions of this section are cumulative to, and not in derogation of, rights under other provisions of state or federal law and shall not in any way repeal, amend or modify the provisions of Public Law 96-221 enacted by the Congress of the United States and approved March 31, 1980.

(Acts 1980, No. 80-738, §§1, 2, 4, 5, p. 1502; Acts 1981, No. 81-654, p. 1071, §1; Acts 1982, No. 82-271, p. 340, §1; Acts 1989, No. 89-421, p. 885; Acts 1997, No. 97-453, p. 803, §1.)

§ 8-8-15 Bad Check Charge; Deemed Not Finance Charge

(a) Any lender of money, extender of other credit, or merchant making a sale of merchandise, goods, or services, or the assignee of the lender, extender of credit, or merchant who receives a check, draft, negotiable order of withdrawal, or like instrument drawn on a bank or other depository institution given by any person in full or partial repayment of a loan, other extension of credit, or a sale of merchandise, goods, or services may, if the instrument is not paid or is dishonored by the institution, charge and collect, through regular billing procedure or otherwise, from the borrower, person to whom the credit was extended, or from whom the instrument was received, a bad check charge of not more than the greater of either twenty-five dollars ($25) or an amount equal to the actual charge by the depository institution for the return of unpaid or dishonored instruments.

(b) Commencing January 1, 1999, the bad check charge in subsection (a) shall increase by one dollar ($1) per year through January 1, 2003, at which time the maximum bad check charge shall be thirty dollars ($30).

Charges imposed in connection with the dishonor of a negotiable instrument shall not be deemed interest finance or other charge made as an incident to or as a condition to the grant of the loan or other extension of credit and shall not be included in determining the limit on charges which may be made in connection with the loan or extension of credit as provided in this section or in any other law of this state.

(Acts 1985, No. 85-282, p. 182; Acts 1989, Ex. Sess., No. 89-980, p. 19; Acts 1991, No. 91-319, p. 578, §1; Acts 1997, No. 97-413, p. 679, §1.)

Chapter 9 Frauds

§ 8-9-1 Mortgage of Personalty

Except as may be otherwise provided by Title 7 a mortgage of or security interest in personal property is not valid unless made in writing and subscribed by the mortgagor or debtor.

(Code 1886, §1731; Code 1896, §2151; Code 1907, §4288; Code 1923, §8033; Code 1940, T. 20, §2.)

§ 8-9-2 Certain Agreements Void Unless in Writing

In the following cases, every agreement is void unless such agreement or some note or memorandum thereof expressing the consideration is in writing and subscribed by the party to be charged therewith or some other person by him thereunto lawfully authorized in writing:

(1) Every agreement which, by its terms, is not to be performed within one year from the making thereof;

(2) Every special promise by an executor or administrator to answer damages out of his own estate;

(3) Every special promise to answer for the debt, default or miscarriage of another;

(4) Every agreement, promise or undertaking made upon consideration of marriage, except mutual promises to marry;

(5) Every contract for the sale of lands, tenements or hereditaments, or of any interest therein, except leases for a term not longer than one year, unless the purchase money, or a portion thereof is paid and the purchaser is put in possession of the land by the seller;

(6) Every agreement, contract or promise to make a will or to devise or bequeath any real or personal property or right, title or interest therein;

(7) Every agreement or commitment to lend money, delay or forebear repayment thereof or to modify the provisions of such an agreement or commitment except for consumer loans with a principal amount financed less than $25,000;

(8) Notwithstanding Section 7-8-113, every agreement for the sale or purchase of securities other than through the facilities of a national stock exchange or of the over-the-counter securities market.

(Code 1852, §1551; Code 1867, §1862; Code 1876, §2121; Code 1886, §1732; Code 1896, §2152; Code 1907, §4289; Code 1923, §8034; Code 1940, T. 20, §3; Acts 1951, No. 645, p. 1109; Acts 1989, No. 89-430, p. 910; Acts 1996, No. 96-742, p. 1241, §5.)

§ 8-9-3 Sufficiency of Note of Contract - Memorandum of Auctioneer

When lands, tenements, or hereditaments are sold or leased at public auction and the auctioneer, his clerk or agent makes a memorandum of the property and the price thereof at which it is sold or leased, the terms of sale, the name of the purchaser, or lessee and the name of the person on whose account the sale or lease is made, such memorandum is a note of the contract within the meaning of Section 8-9-2.

(Code 1852, §1552; Code 1867, §1863; Code 1876, §2122; Code 1886, §1733; Code 1896, §2153; Code 1907, §4290; Code 1923, §8035; Code 1940, T. 20, §4.)

§ 8-9-4 Sufficiency of Note of Contract - Return or Report of Officer Making Judicial Sale

When lands, tenements, or hereditaments are sold at judicial sale, the return or report of the officer making the sale, showing the names of the parties to the action or proceeding, a description of the property, the price at which it was sold, and the name of the purchaser is a note of the contract within the meaning of Section 8-9-2.

(Code 1896, §2154; Code 1907, §4291; Code 1923, §8036; Code 1940, T. 20, §5.)

§ 8-9-5 Representation or Assurance of Another’s Credit to Be in Writing

No action can be maintained to charge any person, by reason of any representation or assurance made, concerning the character, conduct, ability, trade, or dealings of any other person, when such action is brought by the person to whom such representation or assurance was made, unless the same is in writing, signed by a party sought to be charged.

(Code 1852, §1553; Code 1867, §1864; Code 1876, §2123; Code 1886, §1734; Code 1896, §2155; Code 1907, §4292; Code 1923, §8037; Code 1940, T. 20, §6.)

§ 8-9-8 When General Assignment or Conveyance of Substantially All Property by Debtor Inures to Benefit of All Creditors Equally

(a) Every general assignment made by a debtor or a conveyance by a debtor of substantially all of his property subject to execution in payment of a prior debt by which a preference or priority of payment is given to one or more creditors over the remaining creditors of the grantor shall be and inure to the benefit of all the creditors of the grantor equally.

(b) This section shall not apply to or embrace mortgages, pledges, or pawns given to secure a debt contracted contemporaneously with the execution of the mortgage, pledge, or pawn and for the security of which the mortgage, pledge, or pawn was given.

(c) A “general assignment” within the meaning of this section shall include, in addition to the conveyances now defined as such by law, every judgment confessed, attachment procured by a debtor or other disposition of property by which a debtor conveys all, or substantially all, of his property subject to execution in payment of, or as the security for, a prior debt or charges such property with the payment of such debt.

(Code 1876, §2126; Code 1886, §1737; Code 1896, §2158; Code 1907, §4295; Code 1923, §8040; Code 1940, T. 20, §9.)

§ 8-9-10 Agreement in Contract to Forfeit Right of Action for Not Presenting Damage Claim Void; Exceptions

Any agreement, convenant, or stipulation in any contract, verbal or written, forfeiting any right of action for failure to present to the party liable a claim for damages, is void; but this section shall not prevent stipulations requiring the giving of informaiton by one party to another within a reasonable time of the happening of any event peculiarly within the knowlege of one of the parties to such contract.

(Code 1907, § 4297; Code 1923, § 8048; Code 1940, T. 20, §17.)

§ 8-9-11 Agreements to Confess Judgment, Be Sued in Different Venue or Authorize Another to Confess Judgment Before Commencement of Action Void; Annulment of Illegal Judgments

All agreements, contracts, or stipulations to confess judgment in any of the courts of this state, to be sued in any county other than that fixed by the venue statutes of this state, or to authorize another to confess judgment in any of the courts of this state made before the commencement of the action in which such judgments are so confessed shall be void, and all judgments by such unlawful confession, or otherwise taken or had in violation of this section, shall be set aside and annulled on motion if made within six months after the entry of such judgment.

(Code 1907, §4296; Code 1923, §8047; Code 1940, T. 20, §16.)

§ 8-9-12 Realty Conveyance Wherein Grantee Agrees to Support Grantor During Life Voidable; Exceptions

Any conveyance of realty wherein a material part of the consideration is the agreement of the grantee to support the grantor during life is void at the option of the grantor, except as to bona fide purchasers for value, lienees, and mortgagees without notice, if, during the life of the grantor, he takes proceedings to annul such conveyance.

(Code 1923, §8046; Code 1940, T. 20, §15.)

Chapter 9A Alabama Fraudulent Transfer Act

§ 8-9A-1 Definitions

As used in this chapter:

(1) AFFILIATE.

a. A person who directly or indirectly owns, controls, or holds with power to vote, 20 percent or more of the outstanding voting securities of the debtor, other than a person who holds the securities,

1. As a fiduciary or agent without sole discretionary power to vote the securities; or

2. Solely to secure a debt, if the person has not exercised the power to vote;

b. A corporation 20 percent or more of whose outstanding voting securities are directly or indirectly owned, controlled, or held with power to vote, by the debtor or a person who directly or indirectly owns, controls, or holds, with power to vote, 20 percent or more of the outstanding voting securities of the debtor, other than a person who holds the securities,

1. As a fiduciary or agent without sole power to vote the securities; or

2. Solely to secure a debt, if the person has not in fact exercised the power to vote;

c. A person whose business is operated by the debtor under a lease or other agreement or a person substantially all of whose assets are controlled by the debtor, or

d. A person who operates the debtor’s business under a lease or other agreement or controls substantially all of the debtor’s assets.

(2) ASSET. Property of a debtor, but the term does not include:

a. Property to the extent it is encumbered by a valid lien;

b. Property to the extent it is generally exempt under nonbankruptcy law; or

c. An interest in property held in tenancy in common for life with cross contingent remainder to the survivor in fee to the extent it is not subject to process by a creditor holding a claim against only one tenant.

(3) CLAIM. A right to payment, whether or not the right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured, and specifically shall include the nonpayment of child support pursuant to a court order.

(4) CREDITOR. A person who has a claim.

(5) DEBT. Liability on a claim.

(6) DEBTOR. A person who is liable on a claim.

(7) INCLUDES. Is not a limiting term.

(8) INSIDER. Includes:

a. If the debtor is an individual,

1. A relative of the debtor or of a general partner of the debtor;

2. A partnership in which the debtor is a general partner;

3. A general partner in a partnership described in subparagraph 2; or

4. A corporation of which the debtor is a director, officer, or person in control;

b. If the debtor is a corporation,

1. A director of the debtor;

2. An officer of the debtor;

3. A person in control of the debtor;

4. A partnership in which the debtor is a general partner;

5. A general partner in a partnership described in subparagraph 4; or

6. A relative of a general partner, director, officer, or person in control of the debtor,

c. If the debtor is a partnership,

1. A general partner in the debtor;

2. A relative of a general partner in, a general partner of, or a person in control of the debtor;

3. Another partnership in which the debtor is a general partner;

4. A general partner in a partnership described in subparagraph 3; or

5. A person in control of the debtor.

d. An affiliate, or an insider of an affiliate as if the affiliate were the debtor; and

e. A managing agent of the debtor.

(9) LIEN. A charge against or an interest in property to secure payment of a debt or performance of an obligation, and includes a security interest created by agreement, a judicial lien obtained by legal or equitable process or proceedings, a common law lien, or a statutory lien.

(10) PERSON. An individual, partnership, corporation, association, organization, government, or governmental subdivision or agency, business trust, estate, trust, or any other legal or commercial entity.

(11) PROPERTY. Both real and personal property, whether tangible or intangible, and any interest in property whether legal or equitable and includes anything that may be the subject of ownership.

(12) RELATIVE. An individual related by consanguinity within the third degree as determined by the common law, a spouse, or an individual related to a spouse within the third degree as so determined, and includes an individual in an adoptive relationship within the third degree.

(13) TRANSFER. Every mode, direct or indirect, absolute or conditional, voluntary or involuntary, of disposing of or parting with an asset or an interest in an asset, and includes payment of money, release, lease, and creation of a lien or other encumbrance.

(14) VALID LIEN. A lien that is effective against the holder of a judicial lien subsequently obtained by legal or equitable process or proceedings.

(Acts 1989, No. 89-793, p. 1585, §1; Act 99-443, p. 1008, §1.)

§ 8-9A-2 Insolvency

(a) A debtor is insolvent if the sum of the debtor’s debts is greater than all of the debtor’s assets at a fair valuation.

(b) A debtor who is generally not paying his debts as they become due is presumed to be insolvent.

(c) A partnership is insolvent under subsection (a) if the sum of the partnership’s debts is greater than the aggregate, at a fair valuation, of all of the partnership’s assets and the sum of the excess of the value of each general partner’s nonpartnership assets over the partner’s nonpartnership debts.

(d) Assets under this section do not include property that has been transferred, concealed, or removed with intent to hinder, delay, or defraud creditors or that has been transferred in a manner making the transfer voidable under this chapter.

(e) Debts under this section do not include an obligation to the extent it is secured by a valid lien on property of the debtor not included as an asset.

(Acts 1989, No. 89-793, p. 1585, §2.)

§ 8-9A-3 Value

(a) Value is given for a transfer if, in exchange for the transfer, property is transferred or an antecedent debt is secured or satisfied, but value does not include an unperformed promise to furnish support to the debtor or another person made otherwise than in the ordinary course of the promisor’s business.

(b) For the purposes of subsection (c) of Section 8-9A-4 and subsection (a) of Section 8-9A-5, a person gives a reasonably equivalent value if the person acquires an interest of the debtor in an asset pursuant to a regularly conducted, noncollusive foreclosure sale or execution of a power of sale for the acquisition or disposition of the interest of the debtor upon default under a mortgage, deed of trust, or security agreement.

(c) A transfer is made for present value if the exchange between the debtor and the transferee is intended by them to be contemporaneous and is in fact substantially contemporaneous.

(Acts 1989, No. 89-793, p. 1585, §3.)

§ 8-9A-4 Transfers Fraudulent as to Present and Future Creditors

(a) A transfer made by a debtor is fraudulent as to a creditor, whether the creditor’s claim arose before or after the transfer was made, if the debtor made the transfer with actual intent to hinder, delay, or defraud any creditor of the debtor.

(b) In determining actual intent under subsection (a), consideration may be given, among other factors, to whether:

(1) The transfer was to an insider;

(2) The debtor retained possession or control of the property transferred after the transfer;

(3) The transfer was disclosed or concealed;

(4) Before the transfer was made the debtor had been sued or threatened with suit;

(5) The transfer was of substantially all the debtor’s assets;

(6) The debtor absconded;

(7) The debtor removed or concealed assets;

(8) The value of the consideration received by the debtor was reasonably equivalent to the value of the asset transferred;

(9) The debtor was insolvent or became insolvent shortly after the transfer was made;

(10) The transfer occurred shortly before or shortly after a substantial debt was incurred; and

(11) The debtor transferred the essential assets of the business to a lienor who transferred the assets to an insider of the debtor.

(c) A transfer made by a debtor is fraudulent as to a creditor, whether the creditor’s claim arose before or after the transfer was made, if the debtor made the transfer without receiving a reasonably equivalent value in exchange for the transfer and the debtor:

(1) Was engaged or was about to engage in a business or a transaction for which the remaining assets of the debtor were unreasonably small in relation to the business or transaction; or

(2) Intended to incur, or believed or reasonably should have believed that he or she would incur, debts beyond his or her ability to pay as they became due.

(Acts 1989, No. 89-793, p. 1585, §4.)

§ 8-9A-5 Transfers Fraudulent as to Present Creditors

(a) A transfer made by a debtor is fraudulent as to a creditor whose claim arose before the transfer was made if the debtor made the transfer without receiving a reasonably equivalent value in exchange for the transfer and the debtor was insolvent at that time or the debtor became insolvent as a result of the transfer.

(b) A transfer made by a debtor is fraudulent as to a creditor whose claim arose before the transfer was made if the transfer was made to an insider for an antecedent debt and the debtor was insolvent at that time and the insider had reasonable cause to believe that the debtor was insolvent.

(Acts 1989, No. 89-793, p. 1585, §5.)

§ 8-9A-6 When Transfer Is Made

For the purposes of this chapter:

(1) A transfer is made:

a. With respect to an asset that is real property other than a fixture, but including the interest of a seller or purchaser under a contract for the sale of the asset, when the transfer is so far perfected that a good-faith purchaser of the asset from the debtor against whom applicable law permits the transfer to be perfected cannot acquire an interest in the asset that is superior to the interest of the transferee; and

b. With respect to an asset that is not real property or that is a fixture, when the transfer is so far perfected that a creditor on a simple contract cannot acquire a judicial lien otherwise than under this chapter that is superior to the interest of the transferee;

(2) If applicable law permits the transfer to be perfected as provided in subdivision (1) and the transfer is not so perfected before the commencement of an action for relief under this chapter, the transfer is deemed made immediately before the commencement of the action;

(3) If applicable law does not permit the transfer to be perfected as provided in subdivision (1), the transfer is made when it becomes effective between the debtor and the transferee.

(4) Except with respect to personal property and fixtures where a lender has perfected its security interest in such property in which event paragraph (1)a shall apply, a transfer is not made until the debtor has acquired rights in the asset transferred.

(Acts 1989, No. 89-793, p. 1585, §6.)

§ 8-9A-7 Remedies of Creditors

(a) In an action for relief against a transfer under this chapter, the remedies available to creditors, subject to the limitations in Section 8-9A-8, include:

(1) Avoidance of the transfer to the extent necessary to satisfy the creditor’s claim;

(2) An attachment or other provisional remedy against the asset transferred or other property of the transferee in accordance with the procedure prescribed by any applicable provision of any other statute or the Alabama Rules of Civil Procedure;

(3) Subject to applicable principles of equity and in accordance with applicable rules of civil procedure,

a. An injunction against further disposition by the debtor or a transferee, or both, of the asset transferred or of other property;

b. Appointment of a receiver to take charge of the asset transferred or of other property of the transferee; or

c. Any other relief the circumstances may require.

(b) If a creditor has obtained a judgment on a claim against the debtor, the creditor, if the court so orders, may levy execution on the asset transferred or its proceeds.

(Acts 1989, No. 89-793, p. 1585, §7.)

§ 8-9A-8 Defenses, Liability, and Protection of Transferee

(a) A transfer is not voidable under Section 8-9A-4(a) against a person who took in good faith and for a reasonably equivalent value or against any subsequent transferee or obligee who took in good faith.

(b) Except as otherwise provided in this section, to the extent a transfer is voidable in an action by a creditor under Section 8-9A-7(a)(1), the creditor may recover judgment for the value of the asset transferred, as adjusted under subsection (c), or the amount necessary to satisfy the creditor’s claim, whichever is less, or judgment for conveyance of the asset transferred. The judgment may be entered against:

(1) The first transferee of the asset or the person for whose benefit the transfer was made; or

(2) Any subsequent transferee other than a good faith transferee who took for value or from any subsequent transferee.

(c) If the judgment under subsection (b) is based upon the value of the asset transferred, the judgment must be for an amount equal to the value of the asset at the time of the transfer, subject to adjustment as the equities may require.

(d) Notwithstanding voidability of a transfer under this chapter, a good-faith transferee is entitled, to the extent of the value given the debtor for the transfer or to another person as a consequence of the debtor’s making such transfer, to

(1) A lien on or a right to retain any interest in the asset transferred; or

(2) A reduction in the amount of the liability on the judgment.

(e) A transfer is not voidable under Section 8-9A-4(c) or Section 8-9A-5 if the transfer results from:

(1) Termination of a lease upon default by the debtor when the termination is pursuant to the lease and applicable law; or

(2) Enforcement of a security interest in compliance with Article 9 of Title 7 of the Uniform Commercial Code or a regularly conducted, noncollusive foreclosure sale or execution of a power of sale for the acquisition or disposition of the interest of the debtor under a mortgage or deed of trust.

(f) A transfer is not voidable under Section 8-9A-5(b):

(1) To the extent the insider gave new value to or for the benefit of the debtor after the transfer was made unless the new value was secured by a valid lien;

(2) If made in the ordinary course of business or financial affairs of the debtor and the insider; or

(3) If made pursuant to a good-faith effort to rehabilitate the debtor and the transfer secured present value given for that purpose as well as antecedent debt of the debtor.

(Acts 1989, No. 89-793, p. 1585, §8.)

§ 8-9A-9 Extinguishment of Claim for Relief

A claim for relief with respect to a fraudulent transfer under this chapter is extinguished unless action is brought:

(1) Under Section 8-9A-4(a) within 10 years after the transfer of real property was made.

(2) Under Section 8-9A-4(a) within six years after the transfer of personal property was made.

(3) Under Section 8-9A-4(c) or 8-9A-5(a), within four years after the transfer was made when the action is brought by a creditor whose claim arose before the transfer was made.

(4) Under Section 8-9A-4(c), within one year after the transfer was made when the action is brought by a creditor whose claim arose after the transfer was made; or

(5) Under Section 8-9A-5(b), within one year after the transfer was made.

(Acts 1989, No. 89-793, p. 1585, §9.)

§ 8-9A-10 Supplementary Provisions

Unless displaced by the provisions of this chapter, the principles of law and equity, including the law merchant and the law relating to principal and agent, estoppel, laches, fraud, misrepresentation, duress, coercion, mistake, insolvency, or other validating or invalidating cause, supplement its provisions.

(Acts 1989, No. 89-793, p. 1585, §10.)

§ 8-9A-11 Uniformity of Application and Construction

This chapter shall be applied and construed to effectuate its general purpose to make uniform the law with respect to the subject of this chapter among states enacting it.

(Acts 1989, No. 89-793, p. 1585, §11.)

§ 8-9A-12 Short Title

This chapter may be cited as the “Alabama Uniform Fraudulent Transfer Act.”

(Acts 1989, No. 89-793, p. 1585, §12.)

Chapter 9B Alabama Uniform Voidable Transactions Act

§ 8-9B-1 Short Title

This chapter may be cited as the Alabama Uniform Voidable Transactions Act.

(Act 2018-163, §1.)

§ 8-9B-2 Definitions

As used in this chapter:

(1) “Affiliate” means:

(i) a person that directly or indirectly owns, controls, or holds with power to vote, 20 percent or more of the outstanding voting securities of the debtor, other than a person that holds the securities:

(A) as a fiduciary or agent without sole discretionary power to vote the securities; or

(B) solely to secure a debt, if the person has not in fact exercised the power to vote;

(ii) a corporation 20 percent or more of whose outstanding voting securities are directly or indirectly owned, controlled, or held, with power to vote, by the debtor or a person that directly or indirectly owns, controls, or holds, with power to vote, 20 percent or more of the outstanding voting securities of the debtor, other than a person that holds the securities:

(A) as a fiduciary or agent without sole discretionary power to vote the securities; or

(B) solely to secure a debt, if the person has not in fact exercised the power to vote;

(iii) a person whose business is operated by the debtor under a lease or other agreement, or a person substantially all of whose assets are controlled by the debtor; or

(iv) a person that operates the debtor’s business under a lease or other agreement or controls substantially all of the debtor’s assets.

(2) “Asset” means property of a debtor, but the term does not include:

(i) property to the extent it is encumbered by a valid lien;

(ii) property to the extent it is generally exempt under nonbankruptcy law; or

(iii) an interest in property held in tenancy in common for life with cross contingent remainder to the survivor in fee to the extent it is not subject to process by a creditor holding a claim against only one tenant.

(3) “Claim,” except as used in “claim for relief,” means a right to payment, whether or not the right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured and specifically shall include the nonpayment of child support pursuant to a court order.

(4) “Creditor” means a person that has a claim.

(5) “Debt” means liability on a claim.

(6) “Debtor” means a person that is liable on a claim.

(7) “Electronic” means relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities.

(8) “Insider” includes:

(i) if the debtor is an individual:

(A) a relative of the debtor or of a general partner of the debtor;

(B) a partnership in which the debtor is a general partner;

(C) a general partner in a partnership described in clause (B); or

(D) a corporation of which the debtor is a director, officer, or person in control;

(ii) if the debtor is a corporation:

(A) a director of the debtor;

(B) an officer of the debtor;

(C) a person in control of the debtor;

(D) a partnership in which the debtor is a general partner;

(E) a general partner in a partnership described in clause (D); or

(F) a relative of a general partner, director, officer, or person in control of the debtor;

(iii) if the debtor is a partnership:

(A) a general partner in the debtor;

(B) a relative of a general partner in, a general partner of, or a person in control of the debtor;

(C) another partnership in which the debtor is a general partner;

(D) a general partner in a partnership described in clause (C); or

(E) a person in control of the debtor;

(iv) an affiliate, or an insider of an affiliate as if the affiliate were the debtor; and

(v) a managing agent of the debtor.

(9) “Lien” means a charge against or an interest in property to secure payment of a debt or performance of an obligation, and includes a security interest created by agreement, a judicial lien obtained by legal or equitable process or proceedings, a common-law lien, or a statutory lien.

(10) “Organization” means a person other than an individual.

(11) “Person” means an individual, estate, partnership, association, trust, business or nonprofit entity, public corporation, government or governmental subdivision, agency, or instrumentality, or other legal or commercial entity.

(12) “Property” means both real and personal property, whether tangible or intangible, and any interest in property whether legal or equitable and includes anything that may be the subject of ownership.

(13) “Record” means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.

(14) “Relative” means an individual related by consanguinity within the third degree as determined by the common law, a spouse, or an individual related to a spouse within the third degree as so determined, and includes an individual in an adoptive relationship within the third degree.

(15) “Sign” means, with present intent to authenticate or adopt a record:

(i) to execute or adopt a tangible symbol; or

(ii) to attach to or logically associate with the record an electronic symbol, sound, or process.

(16) “Transfer” means every mode, direct or indirect, absolute or conditional, voluntary or involuntary, of disposing of or parting with an asset or an interest in an asset, and includes payment of money, release, lease, license, and creation of a lien or other encumbrance. The term also includes a transfer made pursuant to a settlement whether or not incorporated into a court order.

(17) “Valid lien” means a lien that is effective against the holder of a judicial lien subsequently obtained by legal or equitable process or proceedings.

(Act 2018-163, §1.)

§ 8-9B-3 Insolvency

(a) A debtor is insolvent if the sum of the debtor’s debts at a fair valuation is greater than the sum of the debtor’s assets at a fair valuation.

(b) A debtor that is generally not paying the debtor’s debts as they become due other than as a result of a bona fide dispute is presumed to be insolvent. The presumption imposes on the party against which the presumption is directed the burden of proving that the nonexistence of insolvency is more probable than its existence.

(c) Assets under this section do not include property that has been transferred, concealed, or removed with intent to hinder, delay, or defraud creditors or that has been transferred in a manner making the transfer voidable under this chapter.

(d) Debts under this section do not include an obligation to the extent it is secured by a valid lien on property of the debtor not included as an asset.

(Act 2018-163, §1.)

§ 8-9B-4 Value

(a) Value is given for a transfer if, in exchange for the transfer, property is transferred or an antecedent debt is secured or satisfied, but value does not include an unperformed promise made otherwise than in the ordinary course of the promisor’s business to furnish support to the debtor or another person.

(b) For the purposes of Section 8-9B-5 (a)(2) and Section 8-9B-6, a person gives a reasonably equivalent value if the person acquires an interest of the debtor in an asset pursuant to a regularly conducted, noncollusive foreclosure sale or execution of a power of sale for the acquisition or disposition of the interest of the debtor upon default under a mortgage, deed of trust, or security agreement.

(c) A transfer is made for present value if the exchange between the debtor and the transferee is intended by them to be contemporaneous and is in fact substantially contemporaneous.

(Act 2018-163, §1.)

§ 8-9B-5 Transfer Voidable as to Present or Future Creditor

(a) A transfer made by a debtor is voidable as to a creditor, whether the creditor’s claim arose before or after the transfer was made, if the debtor made the transfer:

(1) with actual intent to hinder, delay, or defraud any creditor of the debtor; or

(2) without receiving a reasonably equivalent value in exchange for the transfer, and the debtor:

(i) was engaged or was about to engage in a business or a transaction for which the remaining assets of the debtor were unreasonably small in relation to the business or transaction; or

(ii) intended to incur, or believed or reasonably should have believed that the debtor would incur, debts beyond the debtor’s ability to pay as they became due.

(b) In determining actual intent under subsection (a)(1), consideration may be given, among other factors, to whether:

(1) the transfer was to an insider;

(2) the debtor retained possession or control of the property transferred after the transfer;

(3) the transfer was concealed or not disclosed;

(4) before the transfer was made, the debtor had been sued or threatened with suit;

(5) the transfer was of substantially all the debtor’s assets;

(6) the debtor absconded;

(7) the debtor removed or concealed assets;

(8) the value of the consideration received by the debtor was not reasonably equivalent to the value of the asset transferred;

(9) the debtor was insolvent or became insolvent shortly after the transfer was made;

(10) the transfer occurred shortly before or shortly after a substantial debt was incurred; and

(11) the debtor transferred the essential assets of the business to a lienor that transferred the assets to an insider of the debtor.

(c) A creditor making a claim for relief under subsection (a) has the burden of proving the elements of the claim for relief by a preponderance of the evidence.

(Act 2018-163, §1.)

§ 8-9B-6 Transfer Voidable as to Present Creditor

(a) A transfer made by a debtor is voidable as to a creditor whose claim arose before the transfer was made if the debtor made the transfer without the debtor receiving a reasonably equivalent value in exchange for the transfer and the debtor was insolvent at that time or the debtor became insolvent as a result of the transfer.

(b) A transfer made by a debtor is voidable as to a creditor whose claim arose before the transfer was made if the transfer was made to an insider for an antecedent debt, the debtor was insolvent at that time, and the insider had reasonable cause to believe that the debtor was insolvent.

(c) Subject to Section 8-9B-3(b), a creditor making a claim for relief under subsection (a) or (b) has the burden of proving the elements of the claim for relief by a preponderance of the evidence.

(Act 2018-163, §1.)

§ 8-9B-7 When Transfer Is Made

For the purposes of this chapter:

(1) a transfer is made:

(i) with respect to an asset that is real property other than a fixture, but including the interest of a seller or purchaser under a contract for the sale of the asset, when the transfer is so far perfected that a good-faith purchaser of the asset from the debtor against which applicable law permits the transfer to be perfected cannot acquire an interest in the asset that is superior to the interest of the transferee; and

(ii) with respect to an asset that is not real property or that is a fixture, when the transfer is so far perfected that a creditor on a simple contract cannot acquire a judicial lien otherwise than under this chapter that is superior to the interest of the transferee;

(2) if applicable law permits the transfer to be perfected as provided in paragraph (1) and the transfer is not so perfected before the commencement of an action for relief under this chapter, the transfer is deemed made immediately before the commencement of the action;

(3) if applicable law does not permit the transfer to be perfected as provided in paragraph (1), the transfer is made when it becomes effective between the debtor and the transferee; and

(4) except with respect to personal property and fixtures where a lender has perfected its security interest in such property in which event paragraph (1)(i) shall apply, a transfer is not made until the debtor has acquired rights in the asset transferred.

(Act 2018-163, §1.)

§ 8-9B-8 Remedies of Creditor

(a) In an action for relief against a transfer under this chapter, a creditor, subject to the limitations in Section 8-9B-9, may obtain:

(1) avoidance of the transfer to the extent necessary to satisfy the creditor’s claim;

(2) an attachment or other provisional remedy against the asset transferred or other property of the transferee if available under applicable law; and

(3) subject to applicable principles of equity and in accordance with applicable rules of civil procedure:

(i) an injunction against further disposition by the debtor or a transferee, or both, of the asset transferred or of other property;

(ii) appointment of a receiver to take charge of the asset transferred or of other property of the transferee; or

(iii) any other relief the circumstances may require.

(b) If a creditor has obtained a judgment on a claim against the debtor, the creditor, if the court so orders, may levy execution on the asset transferred or its proceeds.

(Act 2018-163, §1.)

§ 8-9B-9 Defenses, Liability, and Protection of Transferee

(a) A transfer is not voidable under Section 8-9B-5(a)(1) against a person that took in good faith and for a reasonably equivalent value given the debtor or against any subsequent transferee that took in good faith.

(b) To the extent a transfer is avoidable in an action by a creditor under Section 8-9B-8(a)(1), the following rules apply:

(1) Except as otherwise provided in this section, the creditor may recover judgment for the value of the asset transferred, as adjusted under subsection (c), or the amount necessary to satisfy the creditor’s claim, whichever is less. The judgment may be entered against:

(i) the first transferee of the asset or the person for whose benefit the transfer was made; or

(ii) any subsequent transferee, other than:

(A) a good-faith transferee that took for value; or

(B) a subsequent transferee of a person described in clause (A).

(2) Recovery pursuant to Section 8-9B-8(a)(1) or (b) of or from the asset transferred or its proceeds, by levy or otherwise, is available only against a person described in paragraph (1)(i) or (ii).

(c) If the judgment under subsection (b) is based upon the value of the asset transferred, the judgment must be for an amount equal to the value of the asset at the time of the transfer, subject to adjustment as the equities may require.

(d) Notwithstanding voidability of a transfer under this chapter, a good-faith transferee is entitled, to the extent of the value given the debtor for the transfer, to:

(1) a lien on or a right to retain an interest in the asset transferred; or

(2) a reduction in the amount of the liability on the judgment.

(e) A transfer is not voidable under Section 8-9B-5(a)(2) or Section 8-9B-6 if the transfer results from:

(1) termination of a lease upon default by the debtor when the termination is pursuant to the lease and applicable law;

(2) enforcement of a security interest in compliance with Article 9 of the Uniform Commercial Code, Article 9A, commencing with Section 7-9A-1, of Title 7, other than acceptance of collateral in full or partial satisfaction of the obligation it secures; or

(3) a regularly conducted, noncollusive foreclosure sale or execution of a power of sale for the acquisition or disposition of the interest of the debtor under a mortgage, deed of trust, or security agreement.

(f) A transfer is not voidable under Section 8-9B-6(b):

(1) to the extent the insider gave new value to or for the benefit of the debtor after the transfer was made, except to the extent the new value was secured by a valid lien;

(2) if made in the ordinary course of business or financial affairs of the debtor and the insider; or

(3) if made pursuant to a good-faith effort to rehabilitate the debtor and the transfer secured present value given for that purpose as well as an antecedent debt of the debtor.

(g) The following rules determine the burden of proving matters referred to in this section:

(1) A party that seeks to invoke subsection (a), (d), (e), or (f) has the burden of proving the applicability of that subsection.

(2) Except as otherwise provided in paragraphs (3) and (4), the creditor has the burden of proving each applicable element of subsection (b) or (c).

(3) The transferee has the burden of proving the applicability to the transferee of subsection (b)(1)(ii)(A) or (B).

(4) A party that seeks adjustment under subsection (c) has the burden of proving the adjustment.

(h) The standard of proof required to establish matters referred to in this section is preponderance of the evidence.

(Act 2018-163, §1.)

§ 8-9B-10 Extinguishment of Claim for Relief

A claim for relief with respect to a transfer under this chapter is extinguished unless action is brought:

(a) under Section 8-9B-5(a)(1), within ten years after the transfer of real property was made;

(b) under Section 8-9B-5(a)(1), within six years after the transfer of personal property was made;

(c) under Section 8-9B-5(a)(2) or 8-9B-6(a), within four years after the transfer was made when the action is brought by a creditor whose claim arose before the transfer was made;

(d) under Section 8-9B-5(a)(2), within one year after the transfer was made when the action is brought by a creditor whose claim arose after the transfer was made; or

(e) under Section 8-9B-6(b), within one year after the transfer was made.

(Act 2018-163, §1.)

§ 8-9B-11 Governing Law

(a) In this section, the following rules determine a debtor’s location:

(1) A debtor who is an individual is located at the individual’s principal residence.

(2) A debtor that is an organization and has only one place of business is located at its place of business.

(3) A debtor that is an organization and has more than one place of business is located at its chief executive office.

(b) A claim for relief in the nature of a claim for relief under this chapter is governed by the local law of the jurisdiction in which the debtor is located when the transfer is made.

(Act 2018-163, §1.)

§ 8-9B-12 Application to Series Organization

(a) In this section:

(1) “Series” means an arrangement, however denominated, created by a series organization that, pursuant to the law under which the series organization is organized, has the characteristics set forth in paragraph (2).

(2) “Series organization” means an organization that, pursuant to the law under which it is organized, has the following characteristics:

(i) The public organic record of the organization provides for creation by the organization of one or more series, however denominated, with respect to specified property of the organization, and for records to be maintained for each series that identify the property of or associated with the series.

(ii) Debt incurred or existing with respect to the activities of, or property of or associated with, a particular series is enforceable against the property of or associated with the series only, and not against the property of or associated with the organization or associated with any other series of the organization.

(iii) Debt incurred or existing with respect to the activities or property of the organization is enforceable against the property of the organization only, and not against the property of or associated with a series of the organization.

(b) A series organization and each series of the organization is a separate person for purposes of this chapter, even if for other purposes a series is not a person separate from the organization or other series of the organization.

(Act 2018-163, §1.)

§ 8-9B-13 Supplementary Provisions

Unless displaced by the provisions of this chapter, the principles of law and equity, including the law merchant and the law relating to principal and agent, estoppel, laches, fraud, misrepresentation, duress, coercion, mistake, insolvency, or other validating or invalidating cause, supplement its provisions.

(Act 2018-163, §1.)

§ 8-9B-14 Uniformity of Application and Construction

This chapter shall be applied and construed to effectuate its general purpose to make uniform the law with respect to the subject of this chapter among states enacting it.

(Act 2018-163, §1.)

§ 8-9B-15 Relation to Electronic Signatures in Global and National Commerce Act

This chapter modifies, limits, or supersedes the Electronic Signatures in Global and National Commerce Act, 15 U.S.C. Section 7001 et seq., but does not modify, limit, or supersede Section 101(c) of that act, 15 U.S.C. Section 7001(c), or authorize electronic delivery of any of the notices described in Section 103(b) of that act, 15 U.S.C. Section 7003(b).

(Act 2018-163, §1.)

§ 8-9B-16 Application; Conforming Amendments

This chapter applies to transfers made on or after January 1, 2019, and does not apply to a transfer made before January 1, 2019. The Alabama Uniform Fraudulent Transfer Act, Sections 8-9A-1 to 8-9A-12, inclusive, shall apply to transfers made prior to January 1, 2019, and shall not apply to a transfer made on or after January 1, 2019.

(Act 2018-163, §1.)

Chapter 10 Restraint of Trade or Production

§ 8-10-1 Entering Combination, Pool, Etc., to Fix Price or Limit Quantity of Commodity

Any person or corporation who engages or agrees with other persons or corporations or enters, directly or indirectly, into any combination, pool, trust, or confederation to regulate or fix the price of any article or commodity to be sold or produced within this state or any person or corporation who enters into, becomes a member of or party to any pool agreement, combination, or confederation to fix or limit the quantity of any article or commodity to be produced, manufactured, mined, or sold in this state must be fined, on conviction, not less than $500 nor more than $2,000.

(Code 1896, §5557; Code 1907, §7579; Code 1923, §5212; Code 1940, T. 57, §106.)

§ 8-10-2 Entering Combination to Control Management of Corporation with Intent to Fix Price, Diminish Production, Etc

Any corporation chartered under the laws of this state or any officer, stockholder, agent, or employee of any such corporation which enters into any combination with any other corporation or person with the intent to place the management or control of any such corporation in the hands of another corporation or person and thereby limit or fix the price, restrict or diminish the production, manufacture, sale, use, or consumption of any article of commerce must be fined, on conviction, not less than $500 nor more than $2,000.

(Code 1896, §5558; Code 1907, §7580; Code 1923, §5213; Code 1940, T. 57, §107.)

§ 8-10-3 Restraining Trade or Production, Monopolizing Commodities or Business, Destruction of Competition, Etc

Any person or corporation, domestic or foreign, which shall restrain, or attempt to restrain, the freedom of trade or production, or which shall monopolize, or attempt to monopolize, the production, control, or sale of any commodity or the prosecution, management, or control of any kind, class, or description of business or which shall destroy, or attempt to destroy, competition in the manufacture or sale of a commodity shall be guilty of a misdemeanor and, upon conviction, shall be fined not less than $500 nor more than $2,000 for each offense.

(Code 1907, §7581; Code 1923, §5214; Code 1940, T. 57, §108.)

Chapter 11 Rebates, Discounts, Drawbacks, Return Commissions, Gifts or Gratuities

§ 8-11-4 Taking Rebate, Etc., by Officer, Agent, Etc., of Railroad, Manufacturing or Mining Corporation

Any officer, agent, or servant of any railroad, manufacturing, or mining corporation who is authorized or employed to buy any property or who may be empowered to contract for, let out, locate, superintend, or estimate for any work or construction for such corporation and who demands, asks for, bargains for, agrees to take, takes, or receives, directly or indirectly, from the seller of such property or the contractor or other person any rebate, discount, drawback, return commission, gift, or gratuity, must be punished on conviction as if he had stolen it.

(Code 1886, §3826; Code 1896, §4744; Code 1907, §7706; Code 1923, §5417; Code 1940, T. 57, §112.)

§ 8-11-5 Taking Rebate, Etc., by Factor, Commission Merchant, Broker, Attorney, Auctioneer, or Agent

Any factor, commission merchant, broker, attorney, auctioneer, architect, or agent who is employed or authorized to sell the property of another or to contract for, survey, locate, estimate for, or superintend any work and who demands, asks for, bargains for, agrees to take, takes, or receives, directly or indirectly, from the purchaser, contractor, or any person who is employed to store, move, handle, transport, insure, repair, or do any act or service in or about the taking care of, preserving, and marketing such property any rebate, discount, drawback, return commission, gift, or gratuity, who charges his principal on account of any one or more of the above enumerated services more than he actually paid therefor or who buys any property or thing for his principal and charges his principal more than he actually paid therefor, must be punished on conviction as if he had stolen it.

(Code 1886, §3827; Code 1896, §4745; Code 1907, §7707; Code 1923, §5418; Code 1940, T. 57, §113.)

Chapter 12 Trademarks, Names, Marks, Devices, and Labels

Article 1 General Provisions

§ 8-12-1 Appropriation of Trademark to Designate Origin or Ownership

One who produces or deals in a particular thing or conducts a particular business may appropriate to his exclusive use, as a trademark, any form, symbol, or name which has not been so appropriated by another to designate the origin or ownership thereof; but he cannot exclusively appropriate any designation, or part of a designation, which relates only to the name, quality, or the description of the thing or business or the place where the thing is produced or the business is carried on.

(Code 1923, §10370; Code 1940, T. 47, §271.)

§ 8-12-3 Defacing Identifying Mark on Encumbered Personal Property; Presumption of Guilt by Possession

(a) Any person who defaces, or permits the same to be done, with intent to defraud any trademark, or other identifying mark, on any automobile motor, other motor, guns, electrical equipment, radios, motor vehicles, refrigerators, furniture, household or office equipment, or any other personal property, when such property is encumbered with a mortgage, conditional sale contract, or other lien, shall be guilty of a misdemeanor, shall be fined on conviction not less than $25 nor more than $500 and may be imprisoned in the county jail or sentenced to hard labor for not more than six months.

(b) Any person, other than the absolute owner of the property while the same is free and clear of mortgages, retention of title contracts or other encumbrances, found in possession of such property under any claim of right with knowledge that the property has been defaced by a person or persons with intent to defraud after the trademarks or other identifying marks have been defaced, shall be presumed to be guilty of defacing such marks, and shall be punished as provided in this section unless the person in possession overcomes the presumption by clear and convincing proof.

(Acts 1939, No. 667, p. 1061, §§1, 2; Code 1940, T. 57, §§94(1), 94(2).)

Article 2 Registration of Trademarks and Service Marks

§ 8-12-6 Definitions

As used in this article, the following terms shall have the following meanings, respectively, unless the context clearly indicates otherwise:

(1) APPLICANT. The person filing an application for registration of a mark under this article and the person’s legal representative, successors, or assigns.

(2) DILUTION. Dilution by blurring or dilution by tarnishment, regardless of the presence or absence of:

a. Competition between the owner of the famous mark and other parties, or

b. Actual or likely confusion, mistake, or deception, or

c. Actual economic injury.

(3) DILUTION BY BLURRING. The association arising from the similarity between a mark and a famous mark that impairs the distinctiveness of the famous mark.

(4) DILUTION BY TARNISHMENT. The association arising from the similarity between a mark and a famous mark that harms the reputation of the famous mark.

(5) MARK. Any trade name, trademark, or service mark entitled to registration under this article whether registered or not.

(6) PERSON. Any individual, firm, partnership, corporation, association, union, or other organization.

(7) REGISTRANT. The person to whom the registration of a mark under this article is issued and the person’s legal representative, successors, or assigns.

(8) SERVICE MARK. Any word, name, symbol, character, or device, or any combination thereof and the distinctive feature of radio, television, or other advertising adopted and used by a person to identify services rendered or offered by the person and to distinguish them from the services of others.

(9) TRADEMARK. Any word, name, symbol, character, design, drawing, or device, or any combination thereof adopted and used by a person to identify goods made or sold by the person and to distinguish them from goods made or sold by others.

(10) TRADE NAME. A word, name, symbol, character, design, drawing, device, or any combination thereof adopted and used by a person to identify the person’s business (including vocation, occupation, or profession), and distinguish it from the business of others.

(11) USED. A mark shall be deemed to be used in this state:

a. On goods or their containers or the displays associated therewith or on the tags or labels affixed thereto when such goods are sold or otherwise distributed in the state;

b. In connection with services when it is used or displayed in the sale or advertising of services and the services are rendered in this state; and

c. In connection with a business when it identifies the business to persons in this state.

(Acts 1980, No. 80-166, p. 236, §1; Acts 1988, 1st Ex. Sess., No. 88-924, p. 526, §1; Act 2010-747, p. 1886, §1.)

§ 8-12-7 Registrability

(a) A mark by which the goods, services, or business of any applicant for registration may be distinguished from the goods, services, or business of others shall not be registered if it:

(1) Consists of or comprises immoral, deceptive, or scandalous matter;

(2) Consists of or comprises matter which may disparage or falsely suggest a connection with a person, living or dead, institutions, beliefs, or national symbols, or bring them into contempt or disrepute;

(3) Consist of or comprises the flag or coat of arms or other insignia of the United States, of any state or municipality or of any foreign nation, or any simulation thereof;

(4) Consists of, comprises or includes the name, signature, or portrait of any living individual, except with his written consent;

(5) Consists of a mark which:

provided, however, that nothing in this subdivision shall prevent the registration of a mark used in this state by the applicant which has become distinctive of the applicant’s goods, services, or business. The Secretary of State may accept as evidence that the mark has become distinctive, as applied to the applicant’s goods, services, or business, proof of continuous use thereof as a mark by the applicant in this state or elsewhere for the five years next preceding the date of the filing of the application for registration; or

(6) Consists of or comprises a mark which so resembles a mark registered in this state or a mark previously used in this state by another and not abandoned, as to be likely, where applied to the goods, services, or business of the applicant, to cause confusion or mistake or to deceive. Such a mark may be registered when the prior registrant or assignee, or the previous user of the mark gives his written consent, and the parties identify by affidavit their respective separate geographic markets and state that neither plans to expand into the other’s market.

(b) Neither the issuance of a certificate of incorporation to a domestic corporation or a certificate of authority to a foreign corporation or a certificate of registration to a foreign limited partnership, nor the reservation or registration of a corporate name bestows any rights of ownership in a mark, and the issuance to another of a certificate of incorporation, a certificate of authority, a certificate of registration of a foreign limited partnership, a certificate of reservation of corporate name, or a certificate of registration of corporate name shall not serve as the basis for refusing registration of a mark.

(Acts 1980, No. 80-166, p. 236, §2; Acts 1988, 1st Ex. Sess., No. 88-924, p. 526, §1.)

§ 8-12-8 Application for Registration; Contents; Signature and Verification; Filing Fee

(a) Subject to the limitations set forth in this article, any person who adopts and uses a mark in this state may file in the office of the Secretary of State, on a form to be furnished by the Secretary of State, an application for registration of that mark setting forth, but not limited to, the following information:

(1) The name and business address of the person applying for such registration and, if a corporation, the state of incorporation;

(2) A description of the goods, services, or business in connection with which the mark is used and the mode or manner in which the mark is used in connection with such goods, services, or business and the class in which such goods, services, or business fall;

(3) The date when the mark was first used anywhere and the date when it was first used in this state by the applicant or his predecessor in business; and

(4) A statement that the applicant is the owner of the mark and that no other person has the right to use such mark in this state either in the identical form thereof or in such near resemblance thereto as might be calculated to deceive or to be mistaken therefor.

(b) Every application under this section shall be signed and verified by the applicant or by a member of the firm or an officer of the corporation or association applying.

(c) Every application under this section shall be accompanied by a specimen or facsimile of such mark in triplicate.

(d) Every application for registration under this section shall be accompanied by a filing fee of $30, payable to the Secretary of State.

(Acts 1980, No. 80-166, p. 236, §3; Acts 1988, 1st Ex. Sess., No. 88-924, p. 526, §1.)

§ 8-12-9 Certificate of Registration; Issuance; Use as Evidence

(a) Upon compliance by the applicant with the requirements of this article, the Secretary of State shall cause a certificate of registration to be issued and delivered to the applicant. The certificate of registration shall be issued under the signature of the Secretary of State and the seal of the state, and it shall show the name and business address and, if a corporation, the state of incorporation of the person claiming ownership of the mark, the date claimed for the first use of the mark anywhere and the date claimed for the first use of the mark in this state, the class of goods, services, or business and a description of the goods, services, or business on which the mark is used, a reproduction of the mark, the registration date, and the term of the registration.

(b) Any certificate of registration issued by the Secretary of State under the provisions of this section or a copy thereof duly certified by the Secretary of State shall be admissible in evidence as competent and sufficient proof of the registration of such mark in any action or judicial proceedings in any court of this state.

(Acts 1980, No. 80-166, p. 236, §4; Acts 1988, 1st Ex. Sess., No. 88-924, p. 526, §1.)

§ 8-12-10 Duration and Renewal of Registration; Renewal Fee

(a) Registration of a mark under this article shall be effective for a term of five years from the date of registration and, if the mark is then still in use, upon application filed within six months prior to the expiration of such term, on a form to be furnished by the Secretary of State, the registration may be renewed for a like term. A renewal fee of $30, payable to the Secretary of State, shall accompany the application for renewal of the registration.

(b) A mark registration may be renewed for successive periods of five years in like manner.

(c) The Secretary of State shall notify registrants of marks under this article of the necessity of renewal within the year next preceding the expiration of five years from the date of registration, and within the year next preceding the expiration of five years from the date of any renewal of a registration, by writing to the last known address, physical, electronic, or otherwise, of the registrants.

(d) Any registration in force on January 1, 2011, shall continue in full force and effect for the unexpired term thereof and may be renewed by filing an application for renewal with the Secretary of State complying with the requirements of the Secretary of State and paying the renewal fee therefor within six months prior to the expiration of the registration.

(e) All applications for renewals under this article, whether of registrations made under this article or of registrations effected under any prior act, shall include a statement that the mark is still in use in this state.

(Acts 1980, No. 80-166, p. 236, §5; Act 2010-747, p. 1886, §1.)

§ 8-12-11 Assignment of Mark and Registration; Fee; Recordation and Issuance of New Certificate; Effect of Failure to Record

Any mark and its registration under this article shall be assignable with the good will of the business in which the mark is used, or with that part of the good will of the business connected with the use of and symbolized by the mark. Assignment shall be by instruments in writing duly executed and may be recorded with the Secretary of State upon the payment of a fee of $30, payable to the Secretary of State, who, upon recording of the assignment, shall issue in the name of the assignee a new certificate for the remainder of the term of the registration or of the last renewal thereof. An assignment of any registration under this article shall be void as against any subsequent purchaser for valuable consideration without notice, unless it is recorded with the Secretary of State within three months after the date thereof or prior to such subsequent purchase.

(Acts 1980, No. 80-166, p. 236, §6.)

§ 8-12-12 Records

The Secretary of State shall keep for public examination a record of all marks registered or renewed under this article.

(Acts 1980, No. 80-166, p. 236, §7.)

§ 8-12-13 Cancellation

The Secretary of State shall cancel from the register:

(1) After one year from January 1, 1981, all registrations under prior acts or informal registration which have not been registered in accordance with this article;

(2) Any registration concerning which the Secretary of State shall receive a voluntary request for cancellation thereof from the registrant or the assignee of record;

(3) All registrations granted under this article and not renewed in accordance with the provisions of Section 8-12-10;

(4) Any registration concerning which a court of competent jurisdiction shall find:

a. That the registered mark has been abandoned;

b. That the registrant is not the owner of the mark;

c. That the registration was granted improperly;

d. That the registration was obtained fraudulently; or

e. That the registered mark is so similar, as to be likely to cause confusion or mistake or to deceive, to a mark registered by another person in the United States patent and trademark office, prior to the date of the filing of the application for registration by the registrant hereunder, and not abandoned; provided, however, that should the registrant prove that he is the owner of a concurrent registration of his mark in the United States patent and trademark office covering an area including this state, the registration hereunder shall not be cancelled; or

(5) Any registration when a court of competent jurisdiction shall order cancellation thereof, on any ground.

(Acts 1980, No. 80-166, p. 236, §8.)

§ 8-12-14 Classification of Goods, Services and Businesses

(a) The following general classes of goods, services, and business are established for convenience of administration of this article, but not to limit or extend the applicant’s or registrant’s rights , and a single application for registration of a mark may include any or all goods upon which, or services or business with which, the mark is actually being used indicating the appropriate class or classes of goods, services, or business. When a single application includes goods, services, or business which fall within multiple classes, the Secretary of State may require payment of a fee for each class.

(b) The classification of goods and services shall be the classification of goods and services adopted by the United States Patent and Trademark Office, as amended from time to time, except that nothing in this subsection shall prevent the registration of a trade name.

(c) The classification of businesses is as follows:

(1) Agriculture, forestry, and fisheries.

(2) Mining.

(3) Construction.

(4) Manufacturing, nondurable goods.

(5) Manufacturing, durable goods.

(6) Transportation, communications, and other public utilities.

(7) Wholesale trade, nondurable goods.

(8) Wholesale trade, durable goods.

(9) Retail trade - lumber and building materials, hardware, nurseries and garden stores, and mobile home dealers.

(10) Retail trade - department, variety, miscellaneous general merchandise, grocery, dairy products, retail bakery, and food stores.

(11) Retail trade - motor vehicle dealers, auto and home supply stores, gasoline service stations, and miscellaneous vehicle dealers.

(12) Retail trade - apparel, accessory, and shoe stores.

(13) Retail trade - furniture, home furnishings, household appliances, T.V. and radio stores.

(14) Retail trade - eating and drinking places, drugstores, and liquor stores.

(15) Retail trade - sporting goods, bicycles, and hobby stores.

(16) Retail trade - book, stationery, jewelry, sewing, needlework, and piece-goods stores.

(17) Retail trade - mail-order houses, vending machine operators, and direct selling establishments, fuel and ice dealers, and retail florists.

(18) Retail trade - miscellaneous.

(19) Finance, insurance, and real estate.

(20) Business and repair services.

(21) Personal services.

(22) Entertainment and recreation services.

(23) Professional and related services.

(24) Public administration.

(25) Miscellaneous.

(Acts 1980, No. 80-166, p. 236, §9; Acts 1988, 1st Ex. Sess., No. 88-924, p. 526, §1; Act 2010-747, p. 1886, §1.)

§ 8-12-15 Liability for Damages Sustained in Consequence of Fraudulent Filing or Registration

Any person who shall for himself, or on behalf of any other person, procure the filing or registration of any mark in the office of the Secretary of State under the provisions of this article, by knowingly making any false or fraudulent representation or declaration, verbally or in writing, or by any other fraudulent means, shall be liable to pay all damages sustained in consequence of such filing or registration, to be recovered by or on behalf of the party injured thereby in any court of competent jurisdiction.

(Acts 1980, No. 80-166, p. 236, §10.)

§ 8-12-16 Liability to Civil Action for Infringement

Subject to the provisions of Section 8-12-19, any person who shall:

(1) Use, without the consent of the registrant, any reproduction, counterfeit, copy, or colorable imitation of a mark registered under this article in connection with a business, or with the sale, offering for sale, or advertising of any goods or services, and such use is likely to cause confusion or mistake or to deceive as to the source of origin of such goods or services or the sponsorship of such business; or

(2) Reproduce, counterfeit, copy, or colorably imitate any such mark and apply such reproduction, counterfeit, copy, or colorable imitation to labels, signs, prints, packages, wrappers, receptacles, or advertisements intended to be used upon or in conjunction with the business or with the sale or other distribution in this state of such goods or services;

shall be liable to a civil action by the owner of such registered mark for any or all of the remedies provided in Section 8-12-18, except that under subdivision (2) of this section the registrant shall not be entitled to recover profits or damages unless the acts have been committed with knowledge that such mark is intended to be used to cause confusion or mistake or to deceive.

(Acts 1980, No. 80-166, p. 236, §11; Acts 1988, 1st Ex. Sess., No. 88-924, p. 526, §1.)

§ 8-12-17 Injunctive Relief; Famous Marks

(a) Subject to the principles of equity, the owner of a mark which is famous and distinctive, inherently or through acquired distinctiveness, in this state shall be entitled to an injunction against another person’s commercial use of a mark, if such use begins after the famous mark has become famous and is likely to cause dilution of the famous mark, and to obtain such other relief as is provided in this section.

(b) A mark is famous if it is widely recognized by the general consuming public of this state or a significant geographic area in this state as a designation of source of the goods or services or the business of the mark’s owner. In determining whether a mark is famous, a court may consider factors such as, but not limited to:

(1) The duration, extent, and geographic reach of advertising and publicity of the mark in this state, whether advertised or publicized by the owner or third parties.

(2) The amount, volume, and geographic extent of sales offered under the mark in this state.

(3) The extent of actual recognition of the mark in this state or a significant geographic area in this state.

(4) Whether the mark is the subject of a state registration in this state, or a federal registration under the Act of March 3, 1881, or under the Act of February 20, 1905, or on the principal register under the Trademark Act of 1946, as amended.

(c) In an action brought under this section, the owner of a famous mark shall be entitled to injunctive relief throughout the geographic area in which the mark is found to have become famous prior to commencement of the junior use, but not beyond the borders of this state. If the person against whom the injunctive relief is sought willfully intended to cause dilution of the famous mark, then the owner shall also be entitled to the remedies set forth in this chapter, subject to the discretion of the court and the principles of equity.

(d) The following shall not be actionable under this section:

(1) Any fair use, including a nominative or descriptive fair use, or facilitation of such fair use, of a famous mark by another person other than as a designation of source for the person’s own goods or services or business, including use in connection with:

a. Advertising or promotion that permits consumers to compare goods or services or businesses; or

b. Identifying and parodying, criticizing, or commenting upon the famous mark owner or the goods or services or business of the famous mark owner.

(2) Noncommercial use of the mark and all forms of news reporting and news commentary.

(Acts 1980, No. 80-166, p. 236, §12; Acts 1988, 1st Ex. Sess., No. 88-924, p. 526, §1; Act 2010-747, p. 1886, §1.)

§ 8-12-18 Remedies

(a) Any owner of a mark registered under this article may proceed by suit to enjoin the manufacture, use, display, or sale of any counterfeits or imitations thereof and any court of competent jurisdiction may grant injunctions to restrain such manufacture, use, display, or sale as may be by the court deemed just and reasonable, and may require the defendants to pay to such owner all profits derived from, and/or all damages suffered by reason of, such wrongful manufacture, use, display, or sale, and to pay the costs of the action. In assessing profits, the owner shall be required to prove defendant’s sales only; defendant must prove all elements of cost or deduction claimed. The court may also order that any such counterfeits or imitations in the possession or under the control of any defendant in such case, be delivered to an officer of the court, or to the complainant, to be destroyed.

(b) In assessing damages the court may enter judgment, according to the circumstances of the case, for any sum above the amount found as actual damages, up to a trebling of such amount. If the court shall find that the amount of the recovery based on profits is either inadequate or excessive, the court may enter judgment for such sum as the court shall find to be just, according to the circumstances of the case. Such sum in either of the above circumstances shall constitute compensation and not a penalty.

(c) The court may award reasonable attorney fees as follows:

(1) To a prevailing owner in such cases when the court finds the defendant willfully intended infringement or dilution.

(2) To a prevailing defendant in such cases as the Alabama Litigation Accountability Act provides.

(d) The enumeration of any right or remedy in this article shall not affect an owner’s right to prosecute under any penal law of this state.

(Acts 1980, No. 80-166, p. 236, §13; Act 2010-747, p. 1886, §1.)

§ 8-12-19 Common-Law Rights

Nothing in this article shall adversely affect the rights or the enforcement of rights in marks acquired in good faith at any time at common law.

(Acts 1980, No. 80-166, p. 236, §14.)

Article 3 Names, Marks, Etc., on Beverage Containers

§ 8-12-20 Registration of Names, Marks, Etc

Any person or corporation engaged in manufacturing, bottling, or selling soda water, mineral or aerated waters, cider, ginger ale, milk, cream, beer, ale, or other beverages in bottles, siphons, fountains, or kegs with his or its name or other mark or device branded, stamped, engraved, etched, blown, impressed, or otherwise produced upon such bottles, siphons, fountains, or kegs, or on the boxes used in such business, may file in the office of the judge of probate of the county in which his, or its, place of business is situated, and also in the office of the Secretary of State, a description of the name, mark, or device so used and cause such description and a notice of its filing to be printed once a week for three successive weeks in a newspaper published in the county in which such notice is filed.

(Code 1896, §5567; Code 1907, §7318; Code 1923, §4899; Code 1940, T. 57, §89.)

§ 8-12-21 Unauthorized Refilling, Defacing of Marks on or Trafficking in Containers

Any person or corporation who fills with soda water, mineral or aerated waters, ginger ale, milk, cream, beer, other beverages, medicines, compounds, or mixtures, any bottle, box, siphon, fountain, or keg marked or distinguished by any name, mark, or device of which a description shall have been filed and published as provided in Section 8-12-20, or who defaces, erases, obliterates, covers up, or otherwise removes or conceals any such name, mark, or device, or who sells, buys, gives, receives, or otherwise disposes of or traffics in the same without the written consent of, unless the same shall have been purchased from, the person or corporation whose mark or device shall be upon the bottle, box, siphon, fountain, or keg so filled, trafficked in, used, or dealt with, must be punished on conviction for the first offense by imprisonment in the county jail or at hard labor for the county for not less than 10 days nor more than one year or fined $.50 for each such bottle, box, siphon, fountain, or keg so filled, sold, used, disposed of, bought, or trafficked in, or by both such fine and imprisonment, and for each subsequent offense, by imprisonment for not less than 20 days nor more than one year or by a fine of not less than $1 nor more than $5 for each such bottle, box, siphon, fountain, or keg so filled, sold, used, disposed of, bought, or trafficked in, or by both such fine and imprisonment at the discretion of the jury.

(Code 1896, §5568; Code 1907, §7319; Code 1923, §4900; Code 1940, T. 57, §;90.)

§ 8-12-22 Use, Furnishing, Trafficking, or Possession of Containers Without Consent Presumptive Evidence of Unlawful Use or Purchase

The use by any person or corporation, other than the person or corporation whose name, mark, or device may be, or may have been, upon the same, without the written consent of, or purchase from, the owner of any bottle, box, siphon, fountain, or keg, a description of the name, mark, or device whereon shall have been filed and published as provided in Section 8-12-20, for the sale of soda water, mineral, or aerated water, ginger ale, milk, cream, beer, ale, or other beverages, any article of merchandise, medicines, compounds, or preparations, or for the furnishing of such similar beverages to customers or the buying, selling, using, disposing of, or trafficking in any such bottles, boxes, siphons, fountains, or kegs by any person or corporation other than the person or corporation owning the name, mark, or device thereon of such owner, without his written consent, or the having by any junk dealer, or dealer in secondhand articles, possession of any such bottles, siphons, boxes, fountains, or kegs without the written consent of the owner, shall be presumptive evidence of the unlawful use or purchase of or traffic in such bottles, boxes, siphons, fountains, or kegs.

(Code 1896, §5569; Code 1907, §7320; Code 1923, §4901; Code 1940, T. 57, §91.)

§ 8-12-23 Issuance of Search Warrant for Containers Unlawfully Used or Held

Whenever any person, corporation, or their agent shall make oath before any judge that he has reason to believe, and does believe, that any of his bottles, boxes, siphons, fountains, or kegs, a description of the name, marks, or devices whereon has been filed and published as provided in Section 8-12-20, are being unlawfully used, filled, or had by any person or corporation manufacturing or selling soda, mineral, or aerated waters, cider, ginger ale, milk, cream, beer, ale, or other beverages, or that any junk dealer, dealer in secondhand articles, vendor of bottles, or any person or corporation has any such bottles, boxes, siphons, fountains, or kegs in his possession or secreted in any place, such judge must issue a search warrant to discover and seize such property, whereupon such proceedings must be had as in other cases in which search warrants have issued.

(Code 1896, §5570; Code 1907, §7321; Code 1923, §4902; Code 1940, T. 57, §92.)

Article 4 Marked Containers for Milk and Milk Products

§ 8-12-40 Purchase, Sale, Etc., of Container Upon Which Name Appears

It shall be unlawful for any person, firm, or corporation, other than the owner thereof, to purchase, offer to purchase, sell, offer to sell, or transport for sale any bottle, can, crate, or other container upon which or in which, appears in permanent form, the name, trade name, or trademark of the owner thereof, in which milk or milk products are sold and delivered with the understanding at the time of such sale and delivery of the contents thereof that such bottle, can, crate, or container is the property of the person, firm, or corporation whose name, trade name, or trademark is designated in permanent form thereon or therein; provided, that this section shall not apply to the manufacturers of such bottles, cans, crates, or like containers, nor shall it apply to purchasers at execution sales or other judicial sales; provided further, that any person, firm, or corporation who may sell or otherwise dispose of his, their, or its business in bulk may transfer his, their, or its bottles, cans, crates, or containers to his, their, or its vendee by bill of sale; provided further, that the provisions of this section shall not apply to bottle exchanges which are operated by or patronized by the owners of such bottles, cans, crates, or like containers.

(Acts 1931, No. 703, p. 827; Code 1940, T. 2, §402.)

§ 8-12-41 Presumption of Ownership

Whenever the name, trade name, or trademark of any person, firm, or corporation appears in permanent form upon, or in, any milk bottle, can, crate, or container of any kind in which milk or milk products are sold and delivered, such fact shall create a rebuttable presumption that such person, firm, or corporation is the owner thereof.

(Acts 1931, No. 703, p. 827; Code 1940, T. 2, §403.)

§ 8-12-42 Possession by Secondhand or Junk Dealer Prima Facie Evidence of Violation

The use, possession, or control by any person, firm, or corporation engaged in the business of buying, selling, renting, receiving, storing, transporting, or dealing in secondhand merchandise or junk of any milk bottle, can, crate, carton, or container which has marked thereon or therein, in permanent form, the name of any dairy, dairyman, milk producer, milk distributor, milk vendor, or milk dealer shall be prima facie evidence of the violation of Section 8-12-40.

(Acts 1931, No. 703, p. 827; Code 1940, T. 2, §404.)

§ 8-12-43 Enforcement of Article

(a) The Commissioner of Agriculture and Industries shall enforce the provisions of this article.

(b) The provisions of Article 2, Chapter 2 of Title 2 shall be applicable to this article.

§ 8-12-44 Penalty for Violation of Article

Any person violating any provision of this article, shall be guilty of a misdemeanor and, upon conviction, shall be fined not more than $500, and may also be sentenced to hard labor for not more than six months.

(Ag. Code 1927, §611; Code 1940, T. 2, §12.)

Chapter 12A Patent Infringement

§ 8-12A-1 Definitions

The following terms shall have the following meanings:

(1) DEMAND LETTER. A letter, e-mail, or other communication asserting or claiming that the target has engaged in patent infringement.

(2) TARGET. A person located in this state that satisfies any of the following:

a. Has received a demand letter alleging that a patent infringement has been made.

b. Has been threatened with litigation alleging patent infringement.

c. The customers of which have received a demand letter asserting that the person’s product, service, or technology has infringed a patent.

(Act 2014-218, p. 686, §1.)

§ 8-12A-2 Assertion of Patent Infringement in Bad Faith

(a) A person may not assert a claim of patent infringement in bad faith.

(b) The Attorney General may investigate claims of patent infringement alleged to have been made in bad faith and may do both of the following:

(1) Issue subpoenas to any person to appear and produce relevant papers, documents, and physical evidence, and administer an oath or affirmation to any person, in aid of any investigation or inquiry into possible violations of this chapter. Subpoenas shall be served in accordance with the appropriate Alabama Rules of Civil Procedure. Upon failure of a person without lawful excuse to obey a subpoena, the Attorney General may apply to a court of competent jurisdiction for an order compelling compliance. After an action is commenced, discovery may proceed in accordance with the Alabama Rules of Civil Procedure.

(2) Initiate a civil action in the name of the state, as necessary, to seek injunctive and any other relief available under this chapter or other law.

(c) Venue for actions under this section shall be proper in the circuit court of the county in which the defendant resides, is doing business, or has his or her principal place of business, or the county in which the unlawful act or practice was or is being committed.

(d) A target or a person aggrieved by a violation of subsection (a) may assert a cause of action in a court of competent jurisdiction for a determination of whether the patent infringement assertion was made in bad faith. The court may award the following remedies to a plaintiff who prevails in an action brought pursuant to this subsection:

(1) Equitable relief.

(2) Damages.

(3) Court costs and attorney’s fees.

(4) Exemplary damages in an amount equal to fifty thousand dollars ($50,000) or three times the total of damages, costs, and fees, whichever is greater.

(e) A court may consider any of the following factors as evidence that a person has made an assertion of patent infringement in bad faith:

(1) The demand letter does not contain all of the following information:

a. The patent number.

b. The name and address of the patent owner or owners and assignee or assignees, if any.

c. Factual allegations concerning the specific areas in which the target’s products, services, and technology infringe the patent or are covered by the claims in the patent.

(2) Prior to sending the demand letter, the person failed to conduct an analysis comparing the claims in the patent to the target’s products, services, and technology, or an analysis was performed, but did not identify specific areas in which the products, services, and technology are covered by the claims in the patent.

(3) The demand letter lacks the information described in subdivision (1), the target requests the information, and the person fails to provide the information within a reasonable period of time.

(4) The demand letter demands payment of a license fee or response within an unreasonably short period of time.

(5) The person offers to license the patent for an amount that is not based on a reasonable estimate of the value of the license.

(6) The demand letter alleging patent infringement is meritless, and the person knew, or should have known, that the claim or assertion is meritless.

(7) The demand letter alleging patent infringement is deceptive.

(8) Any other factor the court finds relevant.

(f) A court may consider any of the following factors as evidence that a person has not made a bad faith assertion of patent infringement:

(1) The demand letter contains the information described in subdivision (e)(1).

(2) If the demand letter lacks the information described in subdivision (e)(1) and the target requests the information, the person provides the information within a reasonable period of time.

(3) The person engages in a good faith effort to establish that the target has infringed the patent and to negotiate an appropriate remedy.

(4) The person makes a substantial investment in the use of the patent or in the production or sale of a product or item covered by the patent.

(5) The person is either of the following:

a. The inventor or joint inventor of the patent, or in the case of a patent filed by and awarded to an assignee of the original inventor or joint inventor, is the original assignee.

b. An institution of higher education or a technology transfer organization owned or affiliated with an institution of higher education.

(6) The person has done either of the following:

a. Demonstrated good faith business practices in previous efforts to enforce the patent, or a substantially similar patent.

b. Successfully enforced the patent, or a substantially similar patent, through litigation.

(7) Any other factor the court finds relevant.

(Act 2014-218, p. 686, §2.)

§ 8-12A-3 Commencement of Actions

An action under Section 8-12A-2 shall be commenced no later than five years after the violation occurred.

(Act 2014-218, p. 686, §3.)

§ 8-12A-4 Enforcement and Licensing of Patent

Provided that the assertion of patent infringement is not made in bad faith, nothing in this chapter shall be construed to deem it a violation of this chapter for any person who owns or has the right to license or enforce a patent to advise others of that ownership or right of license or enforcement; to communicate to others that the patent is available for license or sale; to notify another of the infringement of that patent pursuant to 35 U.S.C. § 287; or to seek compensation on account of a past or present infringement, or for a license to the patent, when it is reasonable to believe that the person from whom compensation is sought may owe such compensation or may need or want such a license to practice the patent.

(Act 2014-218, p. 686, §4.)

§ 8-12A-5 Violations

Any person who continuously and willfully violates Section 8-12A-2 shall be guilty of a Class A misdemeanor.

(Act 2014-218, p. 686, §5.)

§ 8-12A-6 Construction of Chapter

(a) This chapter shall not be construed to limit rights and remedies available to the State of Alabama or to any person under any other law and shall not alter or restrict the Attorney General’s authority under law with regard to conduct involving assertions of patent infringement.

(b) This chapter shall be interpreted consistently with any federal law or regulations governing patents or patent infringement.

(Act 2014-218, p. 686, §6.)

§ 8-12A-7 Relation to Federal Law

A demand letter or civil action that includes a claim for relief arising under 35 U.S.C. § 271(e)(2) is not subject to the requirements of this chapter.

(Act 2014-218, p. 686, §7.)

Chapter 13 Going Out of Business or Distress Merchandise Sales

§ 8-13-1 Definitions

Unless otherwise provided, the following words and phrases, when used in this chapter, shall have the meanings respectively ascribed to them in this section:

(1) APPLICANT. Any person applying for a license under this chapter, including the principal, if such person is the agent of another who is the true owner, notwithstanding whether that other is an individual, partnership, association, firm, or corporation and notwithstanding whether the name of the true owner appears on the application or not.

(2) DISTRESS MERCHANDISE SALE. Any offer to sell to the public or a sale to the public of goods, wares, or merchandise on the implied or direct representation that such sale is being held other than in the ordinary course of business and not otherwise defined herein. Without limiting the generality of the above, “distress merchandise sales” shall include, but not be limited to, any sale advertised either specifically or in substance to be any one of the following:

a. Fire sale;

b. Smoke and/or water damage sale;

c. Adjustment sale;

d. Insurance salvage sale;

e. Mortgage sale;

f. Adjuster’s sale;

g. Reorganization sale; or

h. Other terminology of similar intent to any of the above.

(3) GOING OUT OF BUSINESS SALE. Any offer to sell to the public or a sale to the public of goods, wares, or merchandise on the implied or direct representation that such sale is in anticipation of the termination of a business at its present location or that the sale is being held other than in the ordinary course of business. Without limiting the generality of the above, “going out of business sales” shall include, but not be limited to, any sale advertised either specifically or in substance to be any one of the following:

a. A sale because the applicant is going out of business;

b. A sale because the applicant is liquidating;

c. A sale because the applicant is selling 50 percent or more of his stock, his entire stock or selling out to the bare walls;

d. A sale because the applicant has lost his lease;

e. A sale because the applicant is selling out his interest in the business establishment;

f. A sale because everything in the store or establishment must be sold;

g. Trustee’s sale;

h. Bankrupt sale;

i. Save us from bankruptcy sale;

j. Insolvent sale;

k. Assignee’s sale;

l. Must vacate sale;

m. Quitting business sale;

n. Receiver’s sale;

o. Loss of lease sale;

p. Forced out of business sale;

q. Removal sale;

r. Liquidation sale;

s. Executor’s sale;

t. Administrator’s sale;

u. Warehouse removal sale;

v. Branch store discontinuance sale;

w. Creditor’s committee sale;

x. Adjustment sale;

y. Defunct business sale;

z. Selling out interest sale; or

aa. Other terminology of similar intent to any of the above.

(4) GOODS, WARES and MERCHANDISE. Any goods, wares, merchandise, or other property capable of being the object of a sale regulated under this chapter.

(5) INVENTORY. A list of and the wholesale cost of goods, wares, and merchandise.

(6) PERSON. Any individual, partnership, association, firm, or corporation.

(Acts 1965, No. 553, p. 1027, §1.)

§ 8-13-2 License - Required; Display on Premises of Sale; Display of License Number and Date of Issuance in Advertising

(a) It shall be unlawful for any person to sell, offer for sale, or advertise for sale at a going out of business sale or a distress merchandise sale any goods, wares, or merchandise, whether it be his property or that of another, unless a license for such sale has been issued pursuant to this chapter and is in effect.

(b) Such license must be displayed in a prominent place on the premises wherein any such sale is being conducted, and the number and date of issue of the license must be displayed in any advertising of the sale.

(Acts 1965, No. 553, p. 1027, §2.)

§ 8-13-3 License - Application

An applicant for a license to conduct a going out of business sale or a distress merchandise sale shall file an application with the judge of probate of the county in which such sale shall be held at least 30 days prior to such sale; provided, however, that the said 30-day period may be waived in writing by the probate judge to whom the application is made for good cause shown. The application shall be made upon forms prescribed by the Commissioner of Revenue of the State of Alabama, signed and verified by the applicant and shall include the following information:

(1) Name and address of the applicant and also the name of the true owner if the applicant is not such true owner;

(2) Name, location, and time of the proposed going out of business sale or distress merchandise sale;

(3) Inventory of the goods, wares, or merchandise, on hand and on order, which the applicant intends to offer for sale at a going out of business sale or distress merchandise sale. The inventory shall show the quantity, kind, or grade of each item, the wholesale cost thereof, and the name of the supplier from whom each item was acquired;

(4) A statement of the average, highest, and lowest inventory at the wholesale cost thereof at the applicant’s place of business during the year next preceding the filing of the application. When the applicant operates more than one retail outlet and said outlets are supplied from a warehouse or warehouses operated by applicant, then the amount of inventory in said warehouse or warehouses attributable to the retail outlet wherein the sale hereunder is to be conducted shall be calculated as follows:

a. The total volume of merchandise handled in said warehouse or warehouses during the year next preceding the filing of the application under this chapter shall be determined;

b. The percentage of such year’s total volume sold through the retail outlet wherein the sale hereunder is being conducted shall next be determined;

c. The percentage so determined of the merchandise on hand at said warehouse or warehouses at the time of the filing of the application hereunder shall be attributable to the concerned outlet and shall be included as part of the inventory set forth in the application;

(5) A list of goods, wares, or merchandise received by the applicant during the three months next preceding the filing of the application;

(6) A statement that the applicant will discontinue the business for which the license is requested, provided such sale is a going out of business sale, the date when such termination will be effected and that the applicant will not use or authorize the use of his trade, business, or firm name for a period of one year immediately following the expiration of a license issued to him under this chapter; provided, however, that if such name is being used in connection with another establishment operated by applicant presently located within the State of Alabama at a different location, then the trade, business, or firm name may be used at such other location, but not at the location where the sale is conducted and not at another location established by applicant after the application is made;

(7) Such other information as the Commissioner of Revenue may prescribe.

(Acts 1965, No. 553, p. 1027, §3.)

§ 8-13-4 License - Bond Required of Applicant

(a) Every applicant for a going out of business sale or distress merchandise sale license shall execute and file with the probate judge to whom the application is made a good and sufficient bond in the sum of $2,500 or five percent of the wholesale value of the inventory as set forth in the application, whichever is greater, with two or more sureties thereon, approved by said probate judge or with the surety thereon a surety company authorized to do business in the State of Alabama, which bond in any event shall be approved by said probate judge, payable to the State of Alabama, and shall be conditioned upon faithful observance of all the conditions of this chapter and shall also indemnify any purchaser at such sale who suffers any loss by reason of misrepresentation in said sale.

(b) Such bond shall continue in effect for one year after the termination of the sale for which it is made.

(c) The licensee shall notify the probate judge issuing the license of any action filed as a result of the operation hereby licensed. Any purchaser claiming to have been damaged by misrepresentation in such going out of business sale or distress merchandise sale may maintain an action against the licensee making such misrepresentations and may join as party defendant the surety or sureties on the bond.

(d) If an action is filed by any purchaser or purchasers at a licensed sale within one year after the termination of the sale, the bond shall remain in force and effect until all actions are concluded and the judgment or judgments, if any, paid in full.

(e) In the event the applicant fails to observe all of the provisions of this chapter in conducting such sale for which the bond is given, the bond will be deemed to be forfeited, and any district attorney of the State of Alabama may recover in an action in the circuit court of the county in which the bond was given the amount of the bond from applicant and his sureties for the use and benefit of the State of Alabama.

(Acts 1965, No. 553, p. 1027, §4.)

§ 8-13-5 License - Public Hearing on Application

The probate judge to whom the application for a going out of business sale or distress merchandise sale license is made, or his designee, shall conduct a public hearing not later than two weeks after an application has been filed. At least one week prior to such hearing the probate judge shall publish, at the expense of the applicant, a notice of the hearing in a local newspaper of general circulation. The probate judge may require that a record be made of the public hearing and that the testimony at such hearing be under oath.

(Acts 1965, No. 553, p. 1027, §6.)

§ 8-13-6 License - Investigation; Investigation Fee; Cost of Independent Audit; Applicant’s Refusal to Pay Investigation Fee and Costs

(a) When an application for a license to conduct a going out of business sale or distress merchandise sale is filed, the probate judge to whom the application is made shall make such investigation as he deems necessary prior to the public hearing hereinafter provided.

(b) The applicant shall pay to such probate judge at the time the application is filed a fee of $10 for making such an investigation, and if such probate judge deems it necessary to have an independent inventory or audit of the applicant’s books made, he shall advise the applicant of the cost of such independent inventory or audit and applicant shall pay such amount to such probate judge to be used by him to pay the cost of such inventory and/or audit.

(c) The applicant’s refusal to pay the fee and costs hereinabove provided and his refusal to permit examination of his books and records or his goods, wares and merchandise is ground for refusal by such probate judge to issue a license.

(Acts 1965, No. 553, p. 1027, §5.)

§ 8-13-7 License - License Issued Only to Bona Fide Merchant

No license for a going out of business sale or a distress merchandise sale shall be issued except to a bona fide licensed merchant of the State of Alabama, and no such license shall be granted to an applicant who sets up an establishment or who acquires an interest in an establishment solely or principally for the purpose of conducting a going out of business sale or distress merchandise sale.

(Acts 1965, No. 553, p. 1027, §10.)

§ 8-13-8 License - Fee Generally; Renewal Fee; Issuing Fee; Costs of Investigation and Public Hearing

(a) For a license for a going out of business sale or distress merchandise sale issued for 30 days or less, the applicant shall pay to the probate judge issuing the same, for the use and benefit of the State of Alabama, a license fee in accordance with the following schedule:

(1) $50 if inventory is $10,000 or less.

(2) $100 if inventory is over $10,000 but less than $25,000.

(3) $200 if inventory is over $25,000 but less than $50,000.

(4) $300 if inventory is over $50,000 but not over $100,000.

(5) $400 if inventory is over $100,000 but not over $200,000.

(6) $500 if inventory is over $200,000.

(b) For a license renewal of 30 days or less, the applicant shall pay an additional license fee of $100.

(c) The applicant shall also pay to the probate judge issuing the license an issuing fee of $25 for each license issued hereunder, and for each renewal of such license, if any, and for all costs of investigation and public hearing.

(Acts 1965, No. 553, p. 1027, §14.)

§ 8-13-9 License - When Probate Judge to Issue License

A license shall be issued to an applicant when the probate judge to whom the application for a going out of business sale or distress merchandise sale is made is satisfied after investigation and public hearing that:

(1) The applicant intends to discontinue his business at the location designated in the application on the date specified therein if such sale is a going out of business sale;

(2) The applicant’s inventory, on hand and on order, is not out of proportion to the stock normally carried by such applicant;

(3) The applicant has not purchased or otherwise acquired goods, wares, or merchandise for the purpose of conducting a going out of business sale or distress merchandise sale;

(4) The goods, wares, or merchandise to be offered for sale are those of a bona fide merchant of the State of Alabama;

(5) No misrepresentation of the goods to be sold has been made or will be practiced; and

(6) The applicant has complied with the provisions of this chapter in all other respects not specifically set forth in this section.

(Acts 1965, No. 553, p. 1027, §12.)

§ 8-13-10 License - Restrictions on Issuance

No license shall, under any circumstances, be granted to any persons, applicant, or owner within a period of two years after the termination of any going out of business sale by such person, applicant, or owner, held or conducted under this chapter. No person, applicant, or owner who has been convicted of violating any of the provisions of this chapter relating to the conduct of going out of business sales or distress merchandise sales shall be granted a license for such sale or sales or be employed, in any manner at or in connection with any going out of business sale or distress merchandise sale licensed hereunder for a period of 10 years after such conviction.

(Acts 1965, No. 553, p. 1027, §11.)

§ 8-13-11 License - Surrender of Business Licenses

At the time a license is issued hereunder for a going out of business sale, the applicant shall surrender to the probate judge issuing the same all licenses held by him at that time for the regular operation of his business at the location where such sale is to be held, and the same shall no longer be of force and effect.

(Acts 1965, No. 553, p. 1027, §13.)

§ 8-13-12 License - Duration of License; Sale Prohibited Between November 15 and December 31; Extension of License

A license for a going out of business sale or distress merchandise sale shall be limited to a period of 30 consecutive business days, exclusive of Sundays and legal holidays. No license shall be issued for a period that will include any of the days between November 15 through December 31, inclusive, and no going out of business sale or distress merchandise sale may be conducted during that period. If a licensee does not sell the quantity of goods, wares, or merchandise permitted under this chapter, he may apply for, and the probate judge may grant an extension of 30 days upon good cause shown.

(Acts 1965, No. 553, p. 1027, §7.)

§ 8-13-13 License - Revocation or Suspension

The probate judge issuing a license for a going out of business sale or distress merchandise sale may revoke or suspend the same if any licensee sells, offers for sale, or advertises for sale any goods, wares, or merchandise in addition to those specified under Section 8-13-17, violates any of the provisions of this chapter or any other law relating to the business so licensed or otherwise fails to comply with the terms of this chapter.

(Acts 1965, No. 553, p. 1027, §21.)

§ 8-13-14 Use of Trade, Business or Firm Name of Licensee After Issuance of License

It shall be unlawful for any person to use the trade, business, or firm name of a licensee for a period of one year after the expiration of a license issued under this chapter, if such license is issued for a going out of business sale; provided, however, that an applicant may continue the use of such name at a different location if it has been, and is at the time the application is filed, being used at a different location within the State of Alabama by applicant.

(Acts 1965, No. 553, p. 1027, §8.)

§ 8-13-15 Sales to Be Held Only at Regular Store Hours; Exceptions

No going out of business sale or distress merchandise sale shall be held at times other than regular store hours of the applicant, except that the probate judge issuing the license may make reasonable provision for extra evening hours upon good cause shown by the applicant.

(Acts 1965, No. 553, p. 1027, §9.)

§ 8-13-16 Advertising

A licensee shall not advertise a going out of business sale or distress merchandise sale earlier than seven days prior to the date on which the sale is licensed to begin. Advertising of such sales shall state the number of the license issued pursuant to this chapter and the date when the sale is to begin and, during the last 15 days of such sale, shall clearly and prominently state the date upon which the sale shall end.

(Acts 1965, No. 553, p. 1027, §15.)

§ 8-13-17 Sale Limited to Inventoried Stock; Additions to Inventory

(a) During any going out of business sale or distress merchandise sale, it shall be unlawful for a licensee to sell, offer for sale, or advertise for sale any goods, wares, or merchandise which were not included in the inventory filed with his application or added to his stock as permitted in this section.

(b) During any licensed going out of business sale or distress merchandise sale, no additions shall be made to the stock of merchandise set forth in the inventory attached to the application for the license; provided, however, that the applicant may add new stock not to exceed 10 percent of the dollar value of the inventory of goods, wares, or merchandise on hand as shown in the inventory attached to the application filed pursuant to this chapter; and provided further, that the addition of 10 percent shall include the goods, wares, or merchandise on order as shown in the application. The purpose of said additions to inventory shall be only to maintain reasonably balanced selections.

(Acts 1965, No. 553, p. 1027, §16.)

§ 8-13-18 Daily Report of Merchandise Received; Failure to Report Ground for License Revocation

A licensee in a going out of business sale or distress merchandise sale shall file with the probate judge issuing the license a daily report under oath of merchandise received. The report shall show the quantity, kind, and grade of each item received, the supplier of each item, and the wholesale value thereof. Failure to report any receipt of goods while a license is in force is ground for revocation of the license, in the discretion of the probate judge issuing the same.

(Acts 1965, No. 553, p. 1027, §17.)

§ 8-13-20 False Bidders, Etc., Prohibited

No person who is not a bona fide potential purchaser shall act at any going out of business sale or distress merchandise sale as bidder, or what is commonly known as a “capper,” “booster,” or “shiller,” or offer or make any false bid to buy any article sold or offered for sale at any going out of business sale or distress merchandise sale.

(Acts 1965, No. 553, p. 1027, §19.)

§ 8-13-21 Licensee to Be in Continuous Attendance at Sale; Licensee Responsible for Violations of Chapter

The person to whom a license has been granted under this chapter, or his authorized representative, shall remain in continuous attendance at all times while a going out of business sale or distress merchandise sale is being conducted, and he shall be responsible for any violation of the provisions of this chapter.

(Acts 1965, No. 553, p. 1027, §20.)

§ 8-13-22 Penalties for Violation of Chapter; Each Sale, Etc., Constitutes Separate Offense

(a) A person convicted of a willful violation of any of the provisions of this chapter shall be fined not more than $100 and may be imprisoned for not more than six months, or both.

(b) Each separate sale, offering for sale, or advertising for sale at a going out of business sale or distress merchandise sale of any goods, wares, or merchandise in violation of the provisions of this chapter constitutes a separate offense.

(Acts 1965, No. 553, p. 1027, §23.)

§ 8-13-23 Chapter Not Applicable to Certain Sales

In the following cases the provisions of this chapter shall not apply:

(1) Sales for the estate of a decedent by the personal representative, or his agent, according to law or by the provisions of the will.

(2) Sales of property conveyed by deed of trust, mortgage, or judgment or ordered to be sold according to the mortgage, judgment, or order.

(3) Sales of all agricultural produce and livestock arising from the labor of the seller or other labor under his control on or belonging to his real or personal estate and not purchased or sold for speculation.

(4) All sales under legal process.

(5) Sales by a licensed pawnbroker or loan company which is selling or offering for sale unredeemed pledges of chattels as provided by law.

(6) Sales made within the incorporated limits or police jurisdiction of any municipality of the State of Alabama under a license granted by such municipality pursuant to the provisions of a valid ordinance of such municipality similar to the provisions of this chapter.

(7) Sales of automobiles by an auctioneer licensed under the laws of the State of Alabama.

(8) Sales of fire, smoke, or water damaged merchandise by a licensed business establishment continuing in business. Such sales shall be limited to 12 regular business days.

(9) Sales of perishable merchandise by a licensed business establishment continuing in business. Such sales shall be limited to seven regular business days.

(Acts 1965, No. 553, p. 1027, §24.)

Chapter 14 Public Auctions

Article 1 General Provisions

§ 8-14-1 Records to Be Kept by Persons Selling Personal Property at Auction; Inspection of Records by Law Enforcement Officers

(a) Every person, firm, or corporation engaged in the business of selling personal property at public auction in the State of Alabama, whether the same shall be their own property or whether they sell the same at auction as agent or employee of others, shall keep and maintain records in which shall be described and inventoried all articles of personal property received by such person, firm, or corporation for sale at auction, including the date of such receipt, the date of sale, the names and addresses of persons from whom the property was received for sale, and the names and addresses of persons to whom the property was sold; provided, that the provisions of this section shall not apply to the sale of livestock at auction.

(b) The records required to be kept by this section shall be open at all times to inspection by all law enforcement officers; and persons, firms, or corporations engaged in the business of selling personal property at public auction are required in any case to give all information they may have of property received and sold or offered for sale by them.

(c) Any person, firm, or corporation failing, neglecting, or refusing to keep and maintain the records provided for in this section or to permit the inspection thereof by the proper authorities shall be guilty of a misdemeanor and, upon conviction, shall be fined not more than $1,000.

(Acts 1966, Ex. Sess., No. 428, p. 572, §§1, 2, 3.)

Article 2 Sale of Gold, Silver, Watches, Jewelry, China, Etc

§ 8-14-20 Sales at Auction Restricted

[Repealed]

Repealed by Act 98-271, §3, effective July 1, 1998 .

(Acts 1923, No. 522, p. 691; Code 1923, §3319; Code 1940, T. 57, §84.)

§ 8-14-21 Prohibited Hours of Sale

[Repealed]

Repealed by Act 98-271, §3, effective July 1, 1998 .

(Code 1923, §3320; Acts 1932, Ex. Sess., No. 322, p. 314; Code 1940, T. 57, §85.)

§ 8-14-22 By-Bidders, Cappers, and Boosters

It shall be unlawful for any person to act as by-bidder, or what is commonly known as capper or booster, at any public auction regulated by this article, or to place, offer, or make any false bid to buy, or pretend to buy, any article sold or offered for sale at any such auction sale.

(Acts 1923, No. 522, p. 691; Code 1923, §3321; Code 1940, T. 57, §86.)

§ 8-14-23 Descriptions of Goods Considered Warranties

Any person, firm, or corporation selling, disposing of, or offering for sale at public auction any gold, silver, plated ware, precious stones, watches, clocks, jewelry, bric-a-brac, china, or glassware shall be truthful in describing the same with respect to the character, quality, kind, and description of the same, which, for the purpose thereof, shall be considered as warranties.

(Acts 1923, No. 522, p. 691; Code 1923, §3322; Code 1940, T. 57, §87.)

§ 8-14-24 Penalty for Violation of Article

Any person, firm, or corporation violating any of the provisions of this article shall be fined upon conviction in a sum not exceeding $500, to which may be added imprisonment for not exceeding 90 days in the discretion of the court.

(Acts 1923, No. 522, p. 691; Code 1923, §3323; Code 1940, T. 57, §88.)

Chapter 15 Public Warehouses

Article 1 General Provisions

§ 8-15-1 Definition; Supervision by Commissioner of Agriculture and Industries

(a) All buildings, structures, or other protected enclosures used for storage of cotton or other articles of value for the public, with or without compensation, and all buildings, structures, or other protected enclosures for the storage of cotton or other articles of value where a statement is issued acknowledging the receipt of the articles of goods stored and undertaking to deliver the same are declared to be public warehouses.

(b) All such warehouses shall be under the supervision of the Commissioner of Agriculture and Industries, whose duty it shall be to enforce the requirements of the law and the rules and regulations promulgated by the State Board of Agriculture and Industries relative to public warehouses.

(c) The term “public warehouse,” as used in this chapter, shall not be construed as applying to any building, structure, or protected enclosure, or portion thereof, used exclusively for the checking or storing of hats, wearing apparel, or baggage or exclusively for the storing of furs when the storage thereof is merely incidental to the business of a dealer therein or to the business of cleaning or renovating such furs.

(Ag. Code 1927, §388; Acts 1935, No. 13, p. 12; Acts 1939, No. 443, p. 586; Code 1940, T. 2, §568; Acts 1943, No. 301, p. 260.)

§ 8-15-2 Promulgation of Standards, Character of Records, Rules and Regulations by State Board of Agriculture and Industries

The State Board of Agriculture and Industries shall have authority to:

(1) Provide the standards as to the suitability or adequacy for the purpose for which it is used or intended of any warehouse building, structure, or protected enclosure used for the storage of cotton or other articles of value;

(2) Prescribe the character of records; and

(3) Promulgate such other rules and regulations relative to the conduct of the business of a public warehouse and such as are necessary to effect the purposes of this chapter.

(Ag. Code 1927, §389; Acts 1939, No. 443, p. 586; Code 1940, T. 2, §569.)

§ 8-15-3 Permit - Required; Application; Fees

(a) The judge of probate of the county may not issue a license permitting anyone to transact business as a public warehouseman unless the person presents to the judge of probate a permit to transact such business issued by the Commissioner of Agriculture and Industries showing that he or she has complied with all the provisions of the law and rules and regulations promulgated by the State Board of Agriculture and Industries relative to public warehouses.

(b) Any person desiring to operate a public warehouse shall file with the Commissioner of Agriculture and Industries, upon forms prescribed by the commissioner, a written application, verified by affidavit, which shall set forth the location and the name of such warehouse and the name of such person interested as owner or principal in the management of the same or, if it is managed or controlled by a corporation, the names of the president, secretary, and treasurer of such corporation shall be stated, and the location of the principal office of such corporation. The application shall also state the character of goods or articles for the storage of which the public warehouse will be operated, and the estimated value of articles stored in such warehouse at the time, and during the preceding 12 months, when the value of the articles stored was the greatest.

(c) In the event cotton is stored in the warehouse, the verified application shall also state the number of bales of cotton stored therein during the 12 months next preceding the date of the application.

(d) Where no business has been done during the previous year, the application must state an estimate of the value of the articles which it is anticipated will be stored during the first year in the warehouse.

(e) The application shall also show what persons are authorized to sign receipts for the warehouse.

(f) A filing fee established by the Board of Agriculture and Industries not to exceed one hundred fifty dollars ($150) shall accompany the application, which shall accrue to the credit of the Agricultural Fund to be used in defraying the expenses of executing the provisions of this chapter.

(g) The Commissioner of Agriculture and Industries may issue a permit to a federally bonded warehouse upon the payment of the fee established by the board not to exceed one hundred fifty dollars ($150) without the filing of any bond with the state.

(Ag. Code 1927, §390; Acts 1939, No. 443, p. 586; Code 1940, T. 2, §570; Acts 1981, No. 81-693, p. 1165, §1; Act 2004-516, p. 996, §1.)

§ 8-15-4 Permit - False Statements in Application

Any person making a false material statement in an application filed under this chapter to secure a permit to operate a public warehouse shall be guilty of perjury and, upon conviction, shall be punished as now provided by law for the commission of such offense.

(Ag. Code 1927, §407; Acts 1935, No. 13, p. 12; Acts 1939, No. 443, p. 586; Code 1940, T. 2, §586.)

§ 8-15-5 Permit - Investigation of Building and Applicant

(a) Upon the filing of an application with the Commissioner of Agriculture and Industries to secure a permit for the operation of a public warehouse, the commissioner or his duly authorized agent shall make such investigation as necessary to ascertain whether or not the statements contained in such application are true and correct, whether or not the building, structure, or protected enclosure is reasonably suited or adequate for the purpose for which it is intended to be used and whether or not there has been a compliance with all conditions as required by the law and the rules and regulations of the State Board of Agriculture and Industries relative to public warehouses.

(b) The Commissioner of Agriculture and Industries may investigate and consider the responsibility, reliability, and qualifications, as well as the capacity of the person or persons filing with him an application, for a permit to operate a public warehouse, both with reference to the person or persons applying for such permit and the person who is shown in the application as the person authorized to sign receipts for the warehouse.

(Ag. Code 1927, §391; Acts 1935, No. 13, p. 12; Acts 1939, No. 443, p. 586; Code 1940, T. 2, §571.)

§ 8-15-6 Permit - Notification of Grant or Denial; Appeals

(a) The Commissioner of Agriculture and Industries shall promptly notify any person applying for a permit to operate a public warehouse whether or not such application has been granted.

(b) In the event the Commissioner of Agriculture and Industries refuses to grant such permit, the applicant may give written notice, by filing the same with the chief clerk of the Department of Agriculture and Industries, that he appeals from the decision of the commissioner to the State Board of Agriculture and Industries. Such appeal must be heard at the next meeting of the board, at which time the board shall investigate the facts and hear from both the commissioner or his duly authorized agent and the applicant and, after due consideration, enter a written finding determining whether or not such permit should be issued, spreading the same upon the minutes of the board.

(c) From the findings of the State Board of Agriculture and Industries, an appeal lies to the Circuit Court of Montgomery County. In the trial in the circuit court, the order of the board shall be presumed to be correct, and the burden shall be upon the applicant to show to the satisfaction of the court beyond a reasonable doubt that he is entitled to be permitted to engage in the operation of a public warehouse under the laws and rules and regulations relating to the same.

(Ag. Code 1927, §392; Acts 1939, No. 443, p. 586; Code 1940, T. 2, §572.)

§ 8-15-7 Permit - Bond and Proof of Insurance; Prerequisite to Issuance of Permit; Filing of Additional Bonds; Actions on Bond

(a) In the event the Commissioner of Agriculture and Industries decides that a permit to operate a public warehouse should be issued, he shall fix the amount of the bond, which shall be furnished by the applicant and approved by the commissioner prior to the issuance of the permit. In addition to the requirement of bond, the commissioner may require the applicant, as a prerequisite to the issuance of such bond, to furnish legal proof of warehouseman’s legal liability insurance in effect on the commodities to be stored in any such public warehouse.

(b) Such bond shall be made with some surety company that has complied with the laws of the State of Alabama and which has a reputation for promptly settling claims upon their merits and shall be payable to the State of Alabama in such sum as the Commissioner of Agriculture and Industries may fix, but in no event be more than $5,000. Said bond shall be conditioned upon the faithful performance of his or its duties as a public warehouseman for the period covered by the permit and for a faithful compliance with all laws, rules, and regulations relating to the operation of a public warehouse.

(c) Notwithstanding the above bond requirements the Commissioner of Agriculture and Industries may require the filing of additional bonds at any time by any warehouseman storing agricultural commodities, and the failure to file any such additional bonds, within the time to be fixed by the commissioner, shall be sufficient cause for revoking the permit issued such warehouseman.

(d) The bond required of an applicant for a permit to operate a public warehouse shall also undertake to pay to the State of Alabama all expenses of any successful litigation which the state institutes to compel a compliance with the laws and rules and regulations relative to public warehouses.

(e) Any person who suffers a loss because of a breach of the conditions of the required public warehouseman’s bond may bring an action on such bond in his own name against the principal and surety thereon for any such breach and loss until the penalty of said bond is exhausted; provided, that the aggregate liability of the surety to all such persons shall in no event exceed the amount of such bond. In the event the penalty is exhausted, the Commissioner of Agriculture and Industries shall require the filing of an additional bond within a reasonable time period, or revoke the permit heretofore issued.

(Ag. Code 1927, §§393, 394; Acts 1931, No. 737, p. 844; Acts 1939, No. 443, p. 586; Code 1940, T. 2, §§573, 574; Acts 1980, No. 80-83, p. 107.)

§ 8-15-8 Permit - Recordation

[Repealed]

Repealed by Act 2014-315, §1, effective April 8, 2014.

(Ag. Code 1927, §396; Acts 1939, No. 443, p. 586; Code 1940, T. 2, §576.)

§ 8-15-9 Permit - Issuance; Term; Expiration Date

(a) Upon the filing and approval of a bond with the Commissioner of Agriculture and Industries, the commissioner must issue a permit which will authorize the applicant to operate a public warehouse at the place, building, structure, or enclosure named in the application upon such applicant’s securing from the probate judge of the county a license required by law to transact such business.

(b) Such permit shall not be issued for a longer period than one year and shall expire on July 31 next after the issuance thereof.

(Ag. Code 1927, §395; Acts 1939, No. 443, p. 586; Code 1940, T. 2, §575; Acts 1945, No. 476, p. 708.)

§ 8-15-10 Permit - Penalty for Operating Without Permit; Disposition of Proceeds from Penalties

(a) Any person operating a public warehouse without a permit required by this chapter shall be subject to a penalty of not over $1,000, which may be collected in a civil action instituted at the instance of the Governor, the Attorney General or the Commissioner of Agriculture and Industries.

(b) All moneys received from the collection of such penalty shall accrue to the Agricultural Fund.

(Ag. Code 1927, §407; Acts 1935, No. 13, p. 12; Acts 1939, No. 443, p. 586; Code 1940, T. 2, §586.)

§ 8-15-11 Inspection of Warehouses by Commissioner and Agents

(a) The Commissioner of Agriculture and Industries and his duly authorized agents or employees shall have full power and authority to inspect public warehouses, to audit the books thereof, to check the articles or goods stored with the records or receipts, and to exercise such other power relative to public warehouses as is necessary to ascertain whether or not the business is conducted in such a manner as to protect the interest of the persons who are storing, or may store, articles in such warehouse.

(b) The inspectors, when instructed by the Commissioner of Agriculture and Industries, shall make sworn reports of their findings, within 10 days after the completion of the work assigned, to the commissioner, who shall hold and keep same in the records of his office. Such reports, when sworn to, shall be public records and shall be prima facie evidence of what they charge.

(c) Such inspections shall be made at least twice between October 1 and September 30 in each fiscal year.

(Ag. Code 1927, §397; Acts 1935, No. 148, p. 192; Acts 1939, No. 443, p. 586; Code 1940, T. 2, §577.)

§ 8-15-12 Investigation of Complaints Against Warehouse

Upon the filing of a complaint in writing by any person with the Commissioner of Agriculture and Industries setting forth a violation of the laws or rules and regulations relating to the operation of a public warehouse, setting forth that the warehouse building, structure, or protected enclosure is not reasonably suitable or adequate for the purpose for which it is used, setting forth facts showing that there is a shortage of the articles which have been stored in said warehouse, setting forth any other facts showing that the interests of the persons who have stored, or who may store, articles in such warehouse are jeopardized or are not properly safeguarded and protected or where such facts are ascertained by the commissioner by an investigation upon his own initiative, or otherwise, the commissioner must make an investigation to ascertain whether or not the facts alleged in the complaint are true or whether or not there is reasonable cause to believe such facts to be true.

(Ag. Code 1927, §398; Acts 1935, No. 13, p. 12; Acts 1939, No. 443, p. 586; Code 1940, T. 2, §578.)

§ 8-15-13 Public Hearing on Operations; Notice of Hearing; Sworn Testimony Heard; Authority to Subpoena Witnesses; Witness Fees; Production of Books and Records; Appearance in Person or by Counsel; Failure to Obey Process; Rules of Evidence Not Applicable

(a) In the event the Commissioner of Agriculture and Industries is of the opinion that a condition exists which would jeopardize the interest of persons patronizing, or who may patronize, a public warehouse by reason of the manner in which such public warehouse is being operated or that the same is being operated without having complied with the laws or rules and regulations relating to the operation of public warehouses, he shall order a public hearing thereon, to be held in the office of the commissioner at Montgomery or at the courthouse of the county in which the warehouse is being operated, to determine what action shall be taken relative to the said warehouse.

(b) It shall be the duty of the Commissioner of Agriculture and Industries to give notice by registered mail addressed to the owners or operators of the public warehouse at least 10 days prior to the date fixed for the hearing, of the time and place thereof.

(c) Upon the hearing, the Commissioner of Agriculture and Industries shall hear sworn testimony of persons complaining as to the manner of the operation of the warehouse and of agents and employees of the Department of Agriculture and Industries who have made investigations into the manner of the operation thereof. He shall also hear sworn testimony of the owners and operators of said warehouse, if any is offered, and the sworn testimony of any persons which they may offer in refutation of the complaints and charges.

(d) The Commissioner of Agriculture and Industries in such cases shall have the authority to compel the attendance of witnesses by issuing subpoenas signed by him, which subpoenas must be served by any lawful officer of the State of Alabama and due return made thereon as is provided by law for the procuring of testimony in civil actions in the circuit courts of this state.

(e) Each witness so subpoenaed and attending upon such hearing shall be entitled to $3 per day for each day of his attendance upon such hearing and $.05 for each mile necessarily traveled in coming to and returning from the hearing.

(f) In the event that investigation results in a finding of the Commissioner of Agriculture and Industries that the said public warehouse is being operated in a manner in violation of the laws and regulations pertaining thereto or in a manner which jeopardizes the interest of the persons patronizing the same, witnesses subpoenaed and attending on behalf of the warehouse shall not be paid from public funds, but the witnesses attending on behalf of the complainant or on behalf of the commissioner shall be paid from the funds of the Department of Agriculture and Industries in the treasury. In the event that the finding of the commissioner shall determine that the public warehouse is being operated in compliance with law and regulations relating thereto, all witnesses appearing upon such hearing shall be paid from the funds of the Department of Agriculture and Industries.

(g) Upon such hearing the Commissioner of Agriculture and Industries shall have authority to administer oaths to witnesses and to compel the production of books and records necessary to a determination of the issue involved in such cause by the issuance of subpoena duces tecum and all other necessary process.

(h) The public warehouse involved and the owners and operators thereof may appear in person or by counsel and shall have the benefit of compulsory process for the attendance of its witnesses.

(i) Willful failure to obey the process issued to witnesses by the Commissioner of Agriculture and Industries shall be punishable as in cases of failure to obey the process issued out of the circuit courts of this state. In such cases the commissioner shall certify to the judge of the circuit court having jurisdiction at the place of the commissioner’s hearing the fact of willful disobedience of his subpoena, whereupon such judge shall cause the defaulting witness to appear before him upon a date fixed to show cause why he should not be adjudged in contempt for the willful failure to obey the process issued by the commissioner as hereinabove provided, and upon determination of willful disobedience of such process, shall enter judgment and impose punishment as in cases of contempt of the circuit court.

(j) In the conduct of such hearing the Commissioner of Agriculture and Industries shall not be bound by the strict rules of evidence prevailing in the courts of the state.

(Ag. Code 1927, §§399, 400; Acts 1939, No. 443, p. 586; Code 1940, T. 2, §§579, 580.)

§ 8-15-14 Revocation of Permit; Liquidation of Operation

(a) In the event that the Commissioner of Agriculture and Industries upon a public hearing finds and determines that a public warehouse is being operated in violation of law and regulations and in jeopardy of the public interest, he shall thereupon revoke the permit to operate such public warehouse and, in his discretion, he may take charge of the operation of such warehouse for the purpose of liquidating the same under the direction of the circuit court having jurisdiction at the place of the operation thereof and to operate same under the direction of the court for such time as may be necessary to protect the public interest or to compel compliance with the laws and regulations relating to the operation of public warehouses.

(b) Upon taking charge thereof, the Commissioner of Agriculture and Industries shall appoint in writing, under his hand and official seal, an agent to assist him in the duty of liquidation and distribution of the assets of any public warehouse so taken possession of by him under the provisions of this chapter and the commissioner may authorize such agent to perform such duties connected with such liquidation and distribution as the commissioner himself could in person do and perform.

(c) The Commissioner of Agriculture and Industries forthwith shall cause to be addressed to the circuit court of the county in which such warehouse is located a petition for receivership and liquidation thereof, setting forth the full facts upon which his action in taking charge of the warehouse is based and requesting that the court take jurisdiction and order the liquidation of such public warehouse and the collection of its assets and the distribution thereof and of the property therein stored to its creditors and to claimants of such property so stored therein in such manner as will best serve the public interest.

(d) The court shall fix a date for hearing thereof not less than 10 days from the date of presentation and shall order that in the interim between the filing of the petition and the final determination of the matter of liquidation thereof, that the warehouse shall be under the direction of the Commissioner of Agriculture and Industries or the agents appointed by him to assist therein. If upon final hearing thereof the court determines that the warehouse is not being operated in such manner as is violative of laws and regulations pertaining thereto or in a manner which jeopardizes the public interest, an order shall thereupon be made and entered dismissing the petition and directing the return of the control and operation of the warehouse to the owners and operators thereof. In the event, however, that the court determines that the warehouse is being operated in violation of law and regulations pertaining thereto or in jeopardy of the public interest, an order shall be made and entered appointing the commissioner as liquidating agent thereof and directing the operation of the warehouse by the commissioner and his designated agents under the direction of the court so long as may be necessary for the purpose of the collection of the assets of the warehouse and the distribution thereof to the creditors thereof and for the protection and distribution of the property therein stored to the owners thereof.

(e) The court may provide for the compensation of the liquidating agent and of the employees necessary in the operation thereof, for the employment of counsel and the payment of other expenses necessary to the operation of the warehouse during the period of receivership and cause the same to be paid from the assets of the public warehouse as a prior charge thereon.

(f) The court shall also cause notice to be given by publication of the receivership of the public warehouse and that claims of creditors and bailors of property therein stored shall be presented to the designated liquidating agent within such time as the court may fix not less than six nor more than 12 months after the date of the completion of the publication. If the Commissioner of Agriculture and Industries doubts the justice and validity of any claims of creditors or of bailors, he may reject the same and serve notice of such rejection upon the creditor or bailor, either by mail or personally, and an affidavit of service of such notice which shall be prima facie evidence thereof shall be filed in the office of the liquidating agent and a copy thereof shall be filed in the office of the commissioner. An action upon a claim so rejected must be brought by complaint to the court having jurisdiction of the affairs of the public warehouse by the creditor or bailor within six months after such service or the same shall be barred. Claims presented and allowed after the expiration of the time fixed in the notice to creditors and bailors shall be entitled to share in the distribution only to the extent of the assets in the hands of the commissioner at the time such claims are filed without allowance for prior distributions.

(g) The Commissioner of Agriculture and Industries shall have authority for, and in the name of, the public warehouse in liquidation to collect the assets of such public warehouse and to initiate and prosecute litigation for the collection thereof.

(h) At any time after the expiration of the date fixed for the presentation of claims, the Commissioner of Agriculture and Industries may petition the court for direction as to distribution of assets then in his hands, and he shall make distribution as directed by the court. After one year from the expiration of the date fixed for the presentation of claims, the court shall order final distribution to creditors and bailors unless the time thereof shall have been extended by the court by order duly made and entered. Whenever the commissioner shall have paid all of the creditors and shall have satisfied the claims and demands of all the bailors of the public warehouse whose claims shall have been duly proven and allowed and shall have paid all of the expenses of the liquidation, he shall deliver upon order of the court duly made and entered the remaining assets in his custody to the public warehouse or the owners and operators thereof. The property of bailors remaining in the hands of the commissioner, or the liquidating agent, for a period of six months after the date fixed by the court for final distribution of assets shall be sold and converted into money, with a complete record of the proceeds of the property belonging to each separate bailor who has not claimed the same. The proceeds of such sales shall be covered by him into the treasury to the credit of the commissioner in trust for the several bailors of the liquidated public warehouse, and the commissioner may pay over the money so held by him in trust to the bailors entitled thereto upon being satisfied of their right to the same. In case of doubtful or conflicting claims to said proceeds, he may require an order from the court having jurisdiction of the liquidation of the warehouse authorizing and directing the payment thereof. All such funds remaining in his hands for a period of 10 years after the date upon which he covered the same into the treasury shall become the property of the state and shall be covered into the state Agricultural Fund.

(i) Upon the finding of the Commissioner of Agriculture and Industries that it is necessary to take charge of a public warehouse for liquidation thereof, he shall forthwith make full report thereof to the State Board of Agriculture and Industries which shall spread his findings upon the minutes of the said State Board of Agriculture and Industries; and at the conclusion of the liquidation of any warehouse of which the commissioner has taken charge as herein provided, he shall forthwith make full report thereof to the State Board of Agriculture and Industries, which shall spread the same upon its minutes.

(Ag. Code 1927, §401; Acts 1939, No. 443, p. 586; Code 1940, T. 2, §581.)

§ 8-15-15 Issuance of Receipt by Warehouseman

Every public warehouseman receiving property of any kind for safekeeping must issue, on delivery to him or it of such property, in favor of the person from whom received, a receipt therefor, which shall comply with the requirements of the laws of this state.

(Ag. Code 1927, §403; Acts 1939, No. 443, p. 586; Code 1940, T. 2, §582.)

§ 8-15-16 When Receipt to Be Endorsed “Stored in the Open”

Whenever any public warehouseman accepts for storage any cotton or other article of value and keeps or stores the same where it is exposed to weather conditions or in any place except within the warehouse, there shall be endorsed on the warehouse receipt given for such cotton or other article the words “Stored In The Open” in such manner as may be prescribed by the rules and regulations promulgated by the State Board of Agriculture and Industries.

(Ag. Code 1927, §404; Acts 1939, No. 443, p. 586; Code 1940, T. 2, §583.)

§ 8-15-17 Insurance Requirement and Liability of Warehouseman for Articles Not Stored in Warehouse

(a) A public warehouseman who stores cotton or other article in the open or in any place except in the warehouse shall keep the same insured against destruction or injury by fire and shall be responsible and liable for all injury or damage suffered from the weather or any other cause by reason of the cotton or other article being stored in the open or in any other place except in the warehouse.

(b) Such warehouseman shall also have the same responsibility and liability for the cotton or other article as if the same was stored or kept in the warehouse. The warehouseman’s bond shall also cover all duties and liabilities of a warehouseman imposed by this section and Section 8-15-16.

(Ag. Code 1927, §405; Acts 1939, No. 443, p. 586; Code 1940, T. 2, §584.)

§ 8-15-18 Insurance of Stored Cotton and Other Raw Agricultural Commodities

The Commissioner of Agriculture and Industries shall have power to require that all bales of cotton or other raw agricultural commodities, accepted for storage by a public warehouseman, other than cotton moving in transit to a compress to be compressed, shall be insured against destruction, damage by fire, and other hazards, or perils that could be incurred by such warehouseman, unless otherwise instructed in writing by the bailor.

(Ag. Code 1927, §406; Acts 1939, No. 443, p. 586; Code 1940, T. 2, §585; Acts 1981, No. 81-693, p. 1165, §2.)

Article 2 Self-Service Storage Facilities

§ 8-15-30 Short Title

[Repealed]

REPEALED IN THE 2021 REGULAR SESSION BY ACT 2021-183 EFFECTIVE OCTOBER 1, 2021. THIS IS NOT IN THE CURRENT CODE SUPPLEMENT.

(Acts 1981, No. 81-769, p. 1321, §1.)

§ 8-15-31 Definitions

[Repealed]

REPEALED IN THE 2021 REGULAR SESSION BY ACT 2021-183 EFFECTIVE OCTOBER 1, 2021. THIS IS NOT IN THE CURRENT CODE SUPPLEMENT.

(Acts 1981, No. 81-769, p. 1321, §2.)

§ 8-15-32 Vesting of Care, Control, Etc., of Stored Property in Occupant; Determination of Risk of Loss

[Repealed]

REPEALED IN THE 2021 REGULAR SESSION BY ACT 2021-183 EFFECTIVE OCTOBER 1, 2021. THIS IS NOT IN THE CURRENT CODE SUPPLEMENT.

(Acts 1981, No. 81-769, p. 1321, §3.)

§ 8-15-33 Lien of Owner, Etc., of Self-Service Storage Facility Upon Personal Property Located at Facility

[Repealed]

REPEALED IN THE 2021 REGULAR SESSION BY ACT 2021-183 EFFECTIVE OCTOBER 1, 2021. THIS IS NOT IN THE CURRENT CODE SUPPLEMENT.

(Acts 1981, No. 81-769, p. 1321, §4.)

§ 8-15-34 Satisfaction of Owner’s Lien

[Repealed]

REPEALED IN THE 2021 REGULAR SESSION BY ACT 2021-183 EFFECTIVE OCTOBER 1, 2021. THIS IS NOT IN THE CURRENT CODE SUPPLEMENT.

(Acts 1981, No. 81-769, p. 1321, §5.)

§ 8-15-35 Posting of Notice as to Effect of Failure to Pay Charges

[Repealed]

REPEALED IN THE 2021 REGULAR SESSION BY ACT 2021-183 EFFECTIVE OCTOBER 1, 2021. THIS IS NOT IN THE CURRENT CODE SUPPLEMENT.

(Acts 1981, No. 81-769, p. 1321, §6.)

§ 8-15-36 Rights Provided by Article as Additional to Other Rights Allowed by Law

[Repealed]

REPEALED IN THE 2021 REGULAR SESSION BY ACT 2021-183 EFFECTIVE OCTOBER 1, 2021. THIS IS NOT IN THE CURRENT CODE SUPPLEMENT.

(Acts 1981, No. 81-769, p. 1321, §7.)

§ 8-15-37 Effect of Other Laws Governing Rights of Creditors and Landlords Against Debtors and Tenants

[Repealed]

REPEALED IN THE 2021 REGULAR SESSION BY ACT 2021-183 EFFECTIVE OCTOBER 1, 2021. THIS IS NOT IN THE CURRENT CODE SUPPLEMENT.

(Acts 1981, No. 81-769, p. 1321, §8.)

§ 8-15-38 Applicability of Article

[Repealed]

REPEALED IN THE 2021 REGULAR SESSION BY ACT 2021-183 EFFECTIVE OCTOBER 1, 2021. THIS IS NOT IN THE CURRENT CODE SUPPLEMENT.

(Acts 1981, No. 81-769, p. 1321, §9.)

Article 2A Self-Service Storage Facilities Act

§ 8-15-40 Short Title

This article shall be known and may be cited as the Self-Service Storage Facilities Act.

(Act 2021-183, §1.)

§ 8-15-41 Definitions

For the purposes of this article, the following terms shall have the following meanings:

(1) COMMERCIALLY REASONABLE SALE. A sale, conducted pursuant to this article, at the self-service storage facility, another suitable location selected by the operator, or on a publicly accessible website that conducts lien sales or personal property sales.

(2) DEFAULT. The failure by the occupant to perform on time any obligation or duty set forth in a rental agreement or in this article.

(3) ELECTRONIC MAIL. An electronic message or an executable program or computer file that contains an image of a message that is transmitted between two or more computers or electronic terminals and includes electronic messages that are transmitted within or between computer networks.

(4) EMERGENCY. Any occurrence or circumstance at or near a self-service storage facility which requires immediate action to avoid injury to persons or damage to property at or near the self-service storage facility including, but not limited to, a fire.

(5) LAST KNOWN ADDRESS. The postal address or electronic mail address provided by an occupant in a rental agreement or the postal address or electronic mail address provided by the occupant in a subsequent written notice of a change of address.

(6) LATE FEE. Any fee or charge assessed for the failure of an occupant to pay rent when due. The term does not include interest on a debt; expenses incurred in the collection of unpaid rent; expenses incurred for the preservation, sale, or disposition of personal property pursuant to this article; or costs associated with the enforcement of any other remedy provided by law or contract.

(7) LEASED SPACE. The individual storage space at a self-service storage facility which is rented to an occupant pursuant to a rental agreement.

(8) OCCUPANT. A person entitled to the use of leased space at a self-service storage facility under a rental agreement, or his or her successors or assigns.

(9) OPERATOR. The owner, operator, lessor, or sublessor of a self-service storage facility, or an agent of any of the foregoing, or any other person authorized to manage the facility or to receive rent from an occupant under a rental agreement. The term does not include a warehouseman if the warehouseman issues a warehouse receipt, bill of lading, or other document of title for the personal property stored.

(10) PERSONAL PROPERTY. Movable property not affixed to land. The term includes, but is not limited to, goods, wares, merchandise, motor vehicles, watercraft, household items, and furnishings.

(11) PROPERTY WHICH HAS NO COMMERCIAL VALUE. Property offered for sale in a commercially reasonable sale that receives no bid or offer.

(12) RENTAL AGREEMENT. Any written agreement or lease that establishes or modifies the terms, conditions, or rules concerning the use and occupancy of leased space at a self-service storage facility.

(13) SELF-SERVICE STORAGE FACILITY. Any real property used for renting or leasing individual storage spaces in which the occupants customarily store and remove their own personal property on a self-service basis.

(14) VERIFIED MAIL. Any method of mailing offered by the United States Postal Service or private delivery service that provides evidence of the mailing.

(Act 2021-183, §1.)

§ 8-15-42 Use of Leased Space for Residential Purposes Prohibited

(a) An operator shall not knowingly permit a leased space at a self-service storage facility to be used for residential purposes.

(b) An occupant shall not use a leased space for residential purposes.

(Act 2021-183, §1.)

§ 8-15-43 Access for Inspection or Repair of Leased Space

An occupant, upon reasonable request from the operator, shall allow the operator to enter a leased space for the purpose of inspection or repair. If an emergency occurs, an operator may enter a leased space for inspection or repair without notice to or consent from the occupant.

(Act 2021-183, §1.)

§ 8-15-44 Lien of Operator, Etc., of Self-Service Storage Facilty Upon Personal Property Located at Facility

(a) The operator of a self-service storage facility and the heirs, executors, administrators, successors, and assigns of the operator shall have a lien upon all of the personal property of an occupant located at the self-service storage facility for delinquent rent, late fees, labor, or other charges incurred pursuant to a rental agreement and for expenses incurred for preservation, sale, or disposition of the personal property. The lien provided for in this section is superior to any other lien or security interest, except for a tax lien as otherwise provided by law.

(b) The lien described in subsection (a) attaches on the date on which personal property is placed in a leased space.

(c) The rental agreement shall contain a statement, in bold type, advising the occupant of all of the following:

(1) The existence of the lien.

(2) That personal property stored in the leased space may be sold to satisfy the lien if the occupant is in default.

(3) That the occupant must disclose any lienholders with an interest in property that is stored or will be stored in the leased space.

(d) If the rental agreement specifies a limit on the value of personal property that the occupant may store in the leased space, the limit shall be deemed to be the maximum value of the personal property in the leased space of the occupant.

(e) The rental agreement may provide for a reasonable late fee when the occupant is in default. A monthly late fee of twenty dollars ($20) or 20 percent of the monthly rental amount, whichever is greater, shall be considered reasonable and is not a penalty.

(Act 2021-183, §1.)

§ 8-15-45 Default by Occupant - Denial of Access; Removal and Disposition of Personal Property

If the occupant is in default, the operator may deny the occupant access to the leased space at the self-service storage facility. The operator may enter and remove the personal property from the leased space to other suitable storage space pending its sale or other disposition.

(Act 2021-183, §1.)

§ 8-15-46 Default by Occupant - Enforcement of Lien; Sale of Personal Property

(a) If an occupant is in default for a period of more than 30 days, the operator may enforce the lien granted in Section 8-15-44 by selling the stored personal property of the occupant. Sale of the personal property of an occupant may be by public or private proceedings. The personal property may be sold as a unit or in parcels, by way of one or more contracts, at any time or place, with bids or offers sealed or open, and on any terms as long as the sale is a commercially reasonable sale. The operator may otherwise dispose of any property which has no commercial value.

(b) Before conducting a sale under this section, the operator shall do all of the following:

(1) At least 20 days before the sale, send notice of default to the occupant and any lienholder identified by the occupant in the rental agreement by verified mail or electronic mail pursuant to subsection (h). The notice of default shall include:

a. A statement that the contents of the leased space are subject to the operator’s lien.

b. A statement of the operator’s claim, indicating the charges due on the date of the notice, the amount of any additional charges which shall become due before the date of sale, and the date the additional charges shall become due.

c. A demand for payment of the charges due within a specified time, which shall not be less than 10 days after the date of the notice.

d. A statement that unless the claim is paid within the time stated, the contents of the leased space will be sold or otherwise disposed of after a specified time.

e. The name, street address, and telephone number of the operator or a designated agent whom the occupant may contact to respond to the notice.

(2) At least seven days before the sale, an advertisement containing the time, place, and terms of the sale shall be published once in a newspaper of general circulation in the county where the self-service storage facility is located. A single advertisement listing multiple sales in a newspaper of general circulation in the county shall suffice. If no newspaper of general circulation is located in the county, or if the operator determines, based on the previous experience of the operator, that the contents of the leased space have a value of five hundred dollars ($500) or less, then an advertisement in any commercially reasonable manner shall suffice. The manner of advertisement is deemed commercially reasonable if it is likely to attract at least three independent bidders to attend or view the sale in person or online at the time and place advertised.

(c) The operator may buy the personal property of the occupant at any public sale held pursuant to this section.

(d) If the personal property subject to the operator’s lien is a vehicle, watercraft, or trailer and rent and other charges remain unpaid for 60 days, the operator may have the vehicle, watercraft, or trailer towed from the self-service storage facility. The operator shall not be liable for any damages to the vehicle, watercraft, or trailer once a licensed and bonded tower takes possession of the property. Removal of any vehicle, watercraft, or trailer from the self-service storage facility shall not release the operator’s lien. The sale of a watercraft shall comply with Section 33-5A-4. Any provision of this article to the contrary notwithstanding, unclaimed motor vehicles shall be reported in accordance with Section 32-8-84 and abandoned motor vehicles shall be sold in accordance with Chapter 13 of Title 32.

(e) At any time before a sale is held under this section or before a vehicle, watercraft, or trailer is towed under this section, the occupant may pay the amount necessary to satisfy the lien and redeem the personal property. The operator shall have no liability to any person with respect to personal property redeemed pursuant to this subsection.

(f) In the event of a sale, the operator may satisfy the lien from the proceeds of the sale. The lien rights of secured lienholders are automatically transferred to the remaining proceeds of the sale, if any. If the sale is a commercially reasonable sale, the operator shall not be subject to any liability for a deficiency if the amount realized at the sale does not satisfy any secured lien, but shall hold the balance, if any, for delivery to the occupant or any secured lienholder, upon demand. If the occupant or secured lienholder, if any, does not claim the balance of the proceeds within one year after the date of sale, the balance shall become the property of the operator without further recourse by the occupant or secured lienholder.

(g) A purchaser in good faith of any personal property sold pursuant to this section to satisfy the lien granted in Section 8-15-44 takes the property free and clear of any rights of persons against whom the lien was valid, despite noncompliance by the operator with the requirements of this section. If the requirements of this article are not satisfied, if the sale of the personal property is not in conformity with the notice of sale, or if there is a willful violation of this article, nothing in this section affects the rights and liabilities of the owner, occupant, or any other person.

(h) Notices to the occupant under subdivision (b)(1) shall be sent to the last known address of the occupant by verified mail or electronic mail. Notices sent by verified mail shall be deemed delivered when deposited with the United States Postal Service or private delivery service if they are properly addressed with postage prepaid. Notices sent by electronic mail shall be deemed delivered when an electronic message is sent to the last known address provided by the occupant. If the operator sends notice by electronic mail and receives an automated message stating that the electronic mail cannot be delivered, the operator shall send notice by verified mail to the last known address of the occupant with postage prepaid.

(i) If the operator complies with the requirements of this section, the liability of the operator:

(1) To the occupant, shall be limited to the net proceeds received from the sale of the personal property of the occupant less any proceeds paid to the holders of any lien or security interest of record on the personal property being sold.

(2) To the holders of any lien or security interest of record on the personal property being sold, shall be limited to the net proceeds received from the sale of any personal property covered by the lien or security interest of the holder.

(Act 2021-183, §1.)

§ 8-15-47 Risk of Loss or Damage to Personal Property

Unless the rental agreement specifically provides otherwise and until a lien sale is conducted under Section 8-15-46, the exclusive care, custody, and control of all personal property stored in a leased space remains vested in the occupant, and the occupant shall bear all risks of loss or damage to that personal property.

(Act 2021-183, §1.)

§ 8-15-48 Rights Provided by Article as Additional to Other Rights Allowed by Law

This article does not impair the power of the parties to a rental agreement to create rights, duties, or obligations in the rental agreement. The rights provided to an operator by this article are in addition to all other rights provided by law to a creditor against a debtor or to a landlord against a tenant.

(Act 2021-183, §1.)

§ 8-15-49 Applicability of Article

This article shall apply to all rental agreements entered into, extended, or renewed after October 1, 2021.

(Act 2021-183, §1.)

Chapter 16 Weights and Measures

Article 1 General Provisions

§ 8-16-1 Definitions

For the purposes of this chapter, the following terms shall have the meanings respectively ascribed to them by this section:

(1) REGISTERED SERVICE AGENT. Any individual, agency, firm, company, or corporation that for hire, commission, or other payment of any kind, services, repairs, or reconditions any weighing or measuring devices, and that registers with the Commissioner of Agriculture and Industries.

(2) SELL or SALE. Such terms shall include barter and exchange.

(3) WEIGHTS, MEASURES or WEIGHING OR MEASURING DEVICES. Such terms include all weights, scales, beams, measures of every kind, instruments and mechanical devices for weighing, or measuring, and any appliances and accessories connected with any or all such instruments.

(Ag. Code 1927, §241; Code 1940, T. 2, §600; Act 2013-212, p. 485, §1.)

§ 8-16-2 Standard Measure of Length, Surface, Weight, and Capacity

There is but one unit or standard measure of length and surface, one of weight, one of capacity for liquid substances, and one of capacity for dry substances throughout this state, which must be in conformity with the standard measure of length, surface, weight, and capacity established by Congress. Any firm, association, corporation, or person selling, offering, or exposing for sale any commodity by weight or measure which does not correspond with such standard or measure is guilty of a misdemeanor.

(Ag. Code 1927, §228; Code 1940, T. 2, §587.)

§ 8-16-3 Standards Approved by Congress to Be State Standards

The standards of weights and measures received from the United States under a resolution of Congress approved June 14, 1836, and such new weights and measures as shall be received from the United States as standard weights and measures in addition thereto or in renewal thereof, and such as shall be procured by the state in conformity therewith and certified by the national bureau of standards shall be the state standards by which all state, county, and municipal standards of weights and measures shall be tried, proved, and sealed.

(Ag. Code 1927, §230; Code 1940, T. 2, §589.)

§ 8-16-4 Contracts Construed According to Standards Ascertained by Congress

All contracts made within this state for any work to be done or for anything to be sold or delivered must be construed to have been according to the standard of weight and measure ascertained by Congress, unless the parties stipulate to the contrary.

(Ag. Code 1927, §229; Code 1940, T. 2, §588.)

§ 8-16-5 Custody of State Standards; Duties of Commissioner of Agriculture and Industries as to Standards

(a) The state standards of weights and measures shall be kept by the Commissioner of Agriculture and Industries in a safe and suitable place in his or her office, from which the standards shall not be removed except for repairs.

(b) With respect to the state standards of weights and measures, the Commissioner of Agriculture and Industries shall have the following duties:

(1) Maintain such standards in good order.

(2) Replace such standards as are incorrect and purchase such additional standards as shall be necessary to complete and make up a complete standard of weights and measures.

(3) Purchase such apparatus as shall be found necessary to a proper prosecution of the work of the office, to be known as working standards.

(4) Compare such working standards with the state standards at such times as the commissioner deems necessary to prove the accuracy of the working standards.

(5) Keep a record of all standards and other apparatus belonging to the state for the purposes of this chapter.

(6) Maintain traceability of the state standards to the National Bureau of Standards.

(c) Weights and measures that are traceable to the U.S. prototype standards supplied by the federal government, or approved as being satisfactory by the National Bureau of Standards, shall be the state primary standards of weights and measures, and shall be maintained in such calibration as prescribed by the National Bureau of Standards. All secondary standards may be prescribed by the commissioner and shall be verified upon their initial receipt, and as often thereafter as deemed necessary by the commissioner.

(d) Any testing or analysis required to be performed may be performed as provided in Section 2-2-33.

(Ag. Code 1927, §231; Code 1940, T. 2, §590; Acts 1979, No. 79-162, p. 268; Act 2015-262, §2.)

§ 8-16-6 Duties Generally of Commissioner Respecting Weights and Measures

With respect to weights and measures, the Commissioner of Agriculture and Industries shall have the following duties:

(1) To try and prove by the state standards, at least once in five years, all weights, measures, and other apparatus which may belong to any county or city and shall seal such when found to be accurate, stamping on them the letter “A” and the last two figures of the year with seals which he or she shall have and keep for that purpose.

(2) To have and keep a general supervision of the weights, measures, and weighing and measuring devices offered for sale, sold, or in use in the state.

(3) Upon the written request of any citizen, firm, corporation, or educational institution in the state, to test or calibrate weights, measures, weighing, or measuring devices, and instruments or apparatus used as standards in this state.

(4) To assure that at least once annually all scales, weights, and measures used in checking the receipts and disbursements of supplies in every institution for the maintenance of which moneys are appropriated by the Legislature are inspected, and report in writing his or her findings through the supervisory board and to the executive officer of the institution concerned. At the request of such board or executive officer, the Commissioner of Agriculture and Industries shall appoint in writing one or more employees then in the actual service of each institution who shall act as special deputy or deputies, without extra compensation, for the purpose of checking the receipts and disbursements of supplies.

(5) To include a report of the work done by his or her office in his or her general report to the State Board of Agriculture and Industries.

(6) To inspect all standards and apparatus used by the counties and cities at least once in five years and shall keep a record of the same.

(7) At least once in five years, to visit the various cities and counties of the state in order to inspect the work of the local sealers of weights and measures.

(8) To issue from time to time regulations for guidance for city and county sealers, and the regulations shall govern the procedure to be followed by these officers in the discharge of their duties.

(Ag. Code 1927, §232; Code 1940, T. 2, §591; Act 2013-212, p. 485, §1.)

§ 8-16-7 Powers of Commissioner and Local Sealers in Supervising Weights and Measures

(a) When not otherwise provided by law, the Commissioner of Agriculture and Industries within the state, the county sealer within the county and the city sealer within the city shall have the power and it shall be their duty to inspect, test, try, and ascertain if they are correct all weights, measures, and weighing or measuring devices kept, offered, or exposed for sale, sold, used, or employed in proving the size, quantity, extent, area, or measurement of quantities, things, produce, or articles for distribution or consumption purchased or offered or submitted for sale, hire, or reward, in computing any charge for services rendered on the basis of weight or measure or in determining weight or measure when a charge is made for such determination.

(b) They shall have the power to, and shall from time to time, weigh or measure and inspect packages or amounts of commodities of whatsoever kind kept for the purpose of sale, offered, or exposed for sale, sold, or in the process of delivery in order to determine whether the same contain the amount represented and whether they are offered for sale or sold in a manner in accordance with the law.

(c) They shall, at least once each year and more often as they may deem necessary, see that all weights, measures, and weighing or measuring devices used are correct.

(d) They, for the purpose above mentioned and in the general performance of their official duties, at any reasonable time, may enter and go into or upon, without formal warrant, any stand, place, building, or premises or stop any vendor, peddler, junk dealer, coal wagon, ice wagon, delivery wagon, or any person whatsoever and require him or her, if necessary, to proceed to some place which the local sealer may specify for the purpose of making the proper test.

(e) The commissioner may perform such testing of weighing or measuring devices through a registered service agent. The commissioner’s duty to inspect and test weighing or measuring devices used for commercial transaction is fulfilled by the registered service agent’s inspection and test for accuracy.

(f) A registered service agent shall perform the inspection and test of weighing and measuring devices in accordance with the rules promulgated by the Board of Agriculture and Industries. The registered service agent who performs the recalibration or repair may be, but is not required to be, the same registered service agent who performed the inspection. The registered service agent who performs the inspection and test of weighing and measuring devices may be an agent or employee of the owner or an affiliate of the owner of the weighing and measuring devices.

(g) The Department of Agriculture and Industries shall approve a decal and upon approval, the department shall provide a decal to registered service agents. After the device meets all requirements as promulgated by the Board of Agriculture and Industries the registered service agent shall place an approved decal conspicuously on the weighing or measuring device.

(h) The registered service agent shall provide all inspection and test reports of the weighing or measuring devices to the commissioner. The commissioner may adopt a uniform reporting system to be utilized by all registered services.

(i) The commissioner may adopt a system to periodically monitor, inspect, or test such weighing or measuring devices to check the accuracy of the work of the registered service agent.

(j) The power conferred on the commissioner in subsection (d) shall not apply to a registered service agent.

(k) Beginning October 1, 2013, the commissioner may suspend or revoke the certificate of registration of a registered service agent for violating any provisions of this article.

(l) If the certificate of registration of a registered service agent has been suspended or revoked, then the service agent may not register with the department as a service agent for at least one year.

(m) Whenever the Commissioner of Agriculture and Industries or a local sealer of weights and measures finds a violation of the statutes relating to weights and measures, he or she shall cause the violator to be prosecuted.

(n) Notwithstanding the provisions of this section, the testing, inspection, and examination of all weights, measures, and weighing or measuring devices is subject to the oversight authority of the commissioner as set forth hereinabove.

(Ag. Code 1927, §236; Code 1940, T. 2, §595; Act 2013-212, p. 485, §1.)

§ 8-16-8 Weights or Measures Corresponding with Standards to Be Sealed or Marked

Whenever the Commissioner of Agriculture and Industries or a local sealer of weights and measures compares weights, measures or weighing or measuring devices and finds that they correspond, or causes them to correspond, with the standards in his possession, he shall seal or mark such weight, measure or weighing or measuring device with appropriate devices to be approved by the commissioner.

(Ag. Code 1927, §237; Code 1940, T. 2, §596.)

§ 8-16-9 Condemnation, Repair, Etc., of Nonstandard Weights and Measures

(a) The Commissioner of Agriculture and Industries or a local sealer of weights and measures shall condemn, seize, and may destroy weights, measures, or weighing or measuring devices which are false, fraudulent, or cannot be made to conform to the legal standards. They shall condemn and mark or tag as “condemned for repairs” such weights, measures, or weighing, or measuring devices which are found incorrect and yet, in their best judgment, may be repaired.

(b) The owners or users of any weights, measures, or weighing or measuring devices which have been condemned for repairs shall have the same repaired and corrected within 10 days, and they may neither use nor dispose of the same in any way, but shall hold the same at the disposal of the Commissioner of Agriculture and Industries or local sealer of weights and measures. Any weights, measures, or weighing or measuring devices which have been condemned for repairs and have not been repaired as required above shall be confiscated by such commissioner or sealer.

(Ag. Code 1927, §238; Code 1940, T. 2, §597.)

§ 8-16-10 Seizure for Evidence of Incorrect, False, or Unsealed Weight, Measure, Device, Package, or Commodity

The Commissioner of Agriculture and Industries or any local sealer of weights and measures is authorized and empowered to seize for use as evidence, without formal warrant, any incorrect, false, or unsealed weight, measure, weighing, or measuring device, package, or amount of commodity found to be used, retained, or offered or exposed for sale, or sold in violation of the law.

(Ag. Code 1927, §239; Code 1940, T. 2, §598.)

§ 8-16-11 Powers of Sheriff Conferred Upon Commissioner and Sealers; Exhibition of Badges; Power of Arrest

There is conferred upon the Commissioner of Agriculture and Industries and local sealers of weights and measures the same powers in their respective jurisdictions as are possessed by sheriffs of this state for the purpose of carrying out the provisions of this chapter only. In the exercise of their duties they shall exhibit their badges to any person questioning their authority upon demand. They are authorized and empowered to make arrests of any person violating any provisions of this chapter.

(Ag. Code 1927, §240; Code 1940, T. 2, §599.)

§ 8-16-12 Possession of Altered, Etc., Weight, Measure or Device Prima Facie Evidence of Guilt

In all prosecutions for the violation of any laws relating to weights and measures, the possession of a weight, measure or weighing or measuring device which has been altered, changed or in any manner tampered with so that the same shall give a false or wrong weight or measure in either buying or selling any commodity, thing or service shall be prima facie evidence of the guilt of the person having the same in possession.

(Ag. Code 1927, §244; Code 1940, T. 2, §602.)

§ 8-16-13 Existence of Weights, Measures or Devices in Place of Sale, Etc., Presumptive Proof of Use and Ownership

For the purposes of this article, proof of the existence of weights, measures or weighing or measuring devices in or about any building, enclosure, stand or vehicle in or from which it is shown buying or selling is commonly carried on shall be presumptive proof of their regular use for such purposes and of their ownership by the person so using or possessing them, and such fact shall be deemed to remain established until disproved beyond reasonable doubt.

(Ag. Code 1927, §263; Code 1940, T. 2, §619.)

§ 8-16-15 Rules and Regulations; Fees

(a) The Board of Agriculture and Industries shall have the right and power to adopt and promulgate all reasonable and necessary rules and regulations for the better enforcement of the provisions of law relative to weights and measures and the sale of commodities, things, or service by weight or measure, and to establish a fee payable annually by all individuals or entities subject to this section not to exceed one hundred fifty dollars ($150) for reimbursement of expenses incurred in the enforcement of this section which shall be deposited into the Agricultural Fund of the State Treasury. The annual inspection fee for those individuals and entities utilizing measuring devices measuring 30 pounds or less shall be based upon a sliding scale broken into 5 categories based upon the total dollar volume of each individual or entity with the minimum rate not to exceed twenty-five dollars ($25) and the maximum not to exceed one hundred fifty dollars ($150).

(b) The board shall prescribe specifications as to the type of make-up and reasonable variations or tolerances for all weights, measures, and weighing and measuring devices used, offered, exposed for sale, sold, or given away in the state.

(c) Any weight, measure, or weighing or measuring device which does not comply with these specifications or does not conform with the state’s standards within such tolerances shall be a false and incorrect weight, measure, or weighing or measuring device.

(d) The board shall prescribe reasonable rules and regulations for the submission of samples and the examination of type and approval or disapproval of all types of weights or measures or weighing or measuring devices used, offered, or exposed for sale or given away in the state.

(Ag. Code 1927, §259; Code 1940, T. 2, §616; Act 2004-516, p. 996, §1.)

§ 8-16-16 Standards for Containers of Farm Products - Duty to Establish

It shall be the duty of the State Board of Agriculture and Industries to fix and promulgate official standards for containers of farm products and to change any of them from time to time as may be found necessary.

(Ag. Code 1927, §260; Code 1940, T. 2, §617.)

§ 8-16-17 Standards for Containers of Farm Products - Adoption of Federal Standards

The State Board of Agriculture and Industries is authorized to fix and promulgate as the official standards for this state, for any container for any agricultural product, the standard for such product which may have been promulgated or announced therefor under the authority of the Congress of the United States. In carrying out the provisions of this section the Commissioner of Agriculture and Industries is authorized to cooperate with the United States government, or any department thereof, in accomplishing the matters and things referred to in this section.

(Ag. Code 1927, §258; Code 1940, T. 2, §615.)

§ 8-16-18 Penalties for Violation of Chapter

(a) Any person violating any provision of this chapter or the rules and regulations issued hereunder shall be guilty of a misdemeanor and, upon conviction, unless otherwise provided in this chapter, shall be fined not more than $500 and may also be sentenced to hard labor for not more than six months.

(b) In addition to the criminal penalty provided for in subsection (a), the Board of Agriculture and Industries may adopt a schedule of civil fines for violations of this chapter. All fines collected under this chapter shall be deposited into the Agricultural Fund in the State Treasury.

(Ag. Code 1927, §611; Code 1940, T. 2, §12; Act 2013-212, p. 485, §1.)

Article 2 Local Sealers

§ 8-16-30 Appointment; Qualifications; Keeping of Standards and Apparatus by Cities and Counties

(a) The county commission of each county and the mayor or other governing body of any city may appoint for their respective county or city one or more sealers of weights and measures; provided, however, that two or more counties may appoint jointly for their counties a sealer, subject to the approval of the Commissioner of Agriculture and Industries; provided further, that any county and any city within the county may jointly appoint a sealer of weights and measures, subject to the approval of the commissioner.

(b) No person shall be appointed as local sealer of weights and measures until he has received a certificate from the Commissioner of Agriculture and Industries showing that such person had the qualifications required by the State Board of Agriculture and Industries.

(c) All such counties or cities appointing a sealer of weights and measures shall keep at all times, at the expense of the county or city, or both, such standards and apparatus of such material and construction as the Commissioner of Agriculture and Industries may direct. All such standards and apparatus, having been tried and accurately proven, shall be sealed and certified to by the commissioner as provided for in this chapter, and shall be then preserved by the county or city sealer as public standards for such county or city.

(Ag. Code 1927, §233; Code 1940, T. 2, §592.)

§ 8-16-31 Term of Office; Salary; Removal; Bond

(a) Local sealers of weights and measures shall hold office for such terms and receive such salaries as the appointing power may prescribe.

(b) The salary shall be paid out of the county or city treasury, as the case may be, and no fee shall be charged by the local sealer or by the county or city for inspecting, testing or sealing of weights, measures or weighing or measuring devices.

(c) Local sealers may be removed at any time by the authority which appointed them for nonfeasance, misfeasance or malfeasance in office.

(d) The local sealer shall forthwith on his appointment give a bond in such penal sum with such surety as is approved by the appointing power for the faithful performance of the duties of his office.

(Ag. Code 1927, §234; Code 1940, T. 2, §593.)

§ 8-16-32 Records and Reports

(a) A local sealer of weights and measures shall keep a complete record of all of his official acts and shall make an annual report duly sworn to on October 1 to the Commissioner of Agriculture and Industries on blanks to be furnished by the commissioner, which report shall be included in the commissioner’s general report to the State Board of Agriculture and Industries.

(b) Local sealers shall make such reports to the appointing power as may be designated by the appointing power.

(Ag. Code 1927, §235; Code 1940, T. 2, §594.)

Article 3 Weighmasters

Division 1 General Provisions

§ 8-16-50 Appointment; Oath; Certificate of Appointment

(a) Any person engaged in the business of weighing for hire who shall weigh or measure any commodity, produce or article and issue therefor a weight certificate which shall be accepted as the accurate weight upon which the purchase or sale of such commodity, produce or article is based shall be known as a public weighmaster. All public weighmasters shall be appointed by the Commissioner of Agriculture and Industries.

(b) Persons not engaged in the business of weighing for hire, but to whom the services of a certified weigher are necessary for the proper conduct of any business in which they may be engaged, may, upon application to the commissioner, have one or more of their employees, or some other suitable person, designated by the commissioner to act as weighmaster for such persons.

(c) Each weighmaster shall make oath faithfully to execute his trust as a weighmaster before entering upon his duties.

(d) The Commissioner of Agriculture and Industries shall issue a certificate of such appointment or designation and shall keep a record of the same.

(Ag. Code 1927, §256; Code 1940, T. 2, §621.)

§ 8-16-51 Rules and Regulations; Fees

(a) The term of appointment for weighmasters shall be for one year.

(b) A fee established by the Board of Agriculture and Industries not to exceed one hundred dollars ($100), which shall accrue to the Agricultural Fund, shall be paid to the Commissioner of Agriculture and Industries by each person appointed or designated as weighmaster.

(c) Provided, however, any weighmaster whose term of appointment has not expired on or after July 30, 1979, shall not be required to pay the increased permit fee during such term.

(Ag. Code 1927, §274; Code 1940, T. 2, §630; Acts 1979, No. 79-612, p. 1083; Act 2004-516, p. 996, §1.)

§ 8-16-52 Bond

[Repealed]

Repealed by Act 2012-399, §1, effective May 14, 2012.

(Ag. Code 1927, §275; Code 1940, T. 2, §631.)

§ 8-16-53 Rights and Duties; Compensation Not to Be Paid by State

The rights and duties of all weighmasters shall be prescribed by the Commissioner of Agriculture and Industries with the approval of the State Board of Agriculture and Industries. Such weighmasters shall not receive compensation from the state for the duties so performed.

(Ag. Code 1927, §266; Code 1940, T. 2, §622.)

§ 8-16-54 Seal

(a) It shall be the duty of every weighmaster in this state to provide himself with a seal at his own expense which shall have inscribed on the outer margin thereof his name and the word “Alabama,” with the words “Public Weigher” inscribed in the center of such seal.

(b) Such seal shall be impressed upon each and every weight certificate issued by such weighmaster, and such seal, when applied to weight certificates, shall be a recognized authority of accuracy.

(Ag. Code 1927, §268; Code 1940, T. 2, §624.)

§ 8-16-55 Records

All public weighmasters shall keep and preserve correct and accurate records of all public weighings as provided by this article, which records shall be open at all times for inspection by the Commissioner of Agriculture and Industries or his assistants.

(Ag. Code 1927, §269; Code 1940, T. 2, §625.)

§ 8-16-56 Weight Certificate Form; Certificate Deemed Prima Facie Evidence of Weight

(a) The Commissioner of Agriculture and Industries shall prescribe the form of weight certificate to be used by all public weighmasters in this state.

(b) Such certificate shall state thereon the kind of commodity, produce or article, the number of units of the same, the date of the receipt of the commodity, produce or article, the owner, agent or consignee, the total weight of the commodity, produce or article, the vessel, railroad, team, truck or other means by which the commodity, produce or article was received, any trade or other mark thereon and such other information as may be necessary to distinguish or identify the commodity, produce or article from a like kind.

(c) No certificate other than the one prescribed in this section shall be used by any public weighmaster in this state, and when so made and properly signed, such certificates shall be a prima facie evidence of such weights.

(Ag. Code 1927, §267; Code 1940, T. 2, §623.)

§ 8-16-57 Certificates to Contain Accurate Weight

All certificates of weights and measures, as provided by this article, shall contain the accurate and correct weight of any and all commodities weighed when issued by the public weighmaster.

(Ag. Code 1927, §270; Code 1940, T. 2, §626.)

§ 8-16-58 Reweighing of Certified Commodity, Produce or Article

When doubt or differences arise as to the correctness of the net or gross weight of any amount or part of any commodity, produce or article for which a certificate of weights and measures has been issued by a public weighmaster, the owner, agent or consignee, upon complaint to the Commissioner of Agriculture and Industries or his assistants, may have such amount or part of the amount of any commodity, produce or article reweighed by the commissioner, his assistants or a public weighmaster designated by him, the services for which reweigh, when performed by the commissioner or his assistants, shall be gratis.

(Ag. Code 1927, §273; Code 1940, T. 2, §629.)

§ 8-16-59 False Certificates

Any weighmaster who shall issue a certificate of weights and measures giving a false weight or measure of any article or commodity weighed or measured by him or his representative to any person shall be guilty of a misdemeanor. In addition thereto, he shall forfeit his certificate as weighmaster, which certificate, when so forfeited, shall be turned over to the Commissioner of Agriculture and Industries.

(Ag. Code 1927, §271; Code 1940, T. 2, §627.)

Division 2 State and Federal Employees

§ 8-16-70 Appointment

(a) The Commissioner of Agriculture and Industries is authorized to designate and appoint any competent employee or agent of the State Department of Agriculture and Industries or United States Department of Agriculture to weigh or supervise the weighing of any agricultural commodities which are to be sold on the basis of weight; and such employees or agents so appointed may be designated or appointed by the commissioner as public weighmasters; provided, that such employees or agents shall comply with all of the provisions of this article required for the appointment of weighmasters.

(b) Weight certificates issued by such employees appointed under this section shall be issued in accordance with the provisions and requirements of this article governing public weighmasters.

(Acts 1956, 2nd Ex. Sess., No. 25, p. 295, §1.)

§ 8-16-71 Fees and Charges for Weighing Agricultural Commodities; Disposition of Collected Amounts

The Commissioner of Agriculture and Industries, with the approval of the State Board of Agriculture and Industries, may fix, assess and collect, or cause to be collected, fees and charges for weighing services furnished by the Department of Agriculture and Industries through services furnished by duly appointed weighmasters as authorized under Section 8-16-70, and all amounts collected therefor shall be deposited into the Shipping Point Inspection Fund of the State Treasury. No amounts collected under this section shall accrue or be paid to the employee or agent of the Department of Agriculture and Industries, as all such amounts are required to be deposited into the State Treasury to the credit of the Shipping Point Inspection Fund.

(Acts 1956, 2nd Ex. Sess., No. 25, p. 295, §2.)

§ 8-16-72 Rules and Regulations for Weighing Agricultural Commodities

The Commissioner of Agriculture and Industries, with the approval of the State Board of Agriculture and Industries, may adopt and promulgate reasonable rules and regulations to carry out the provisions of this division, to the end that persons, firms, corporations, or associations may be furnished with accurate weighing services by the Department of Agriculture and Industries where such services are required for the sale of agricultural commodities.

(Acts 1956, 2nd Ex. Sess., No. 25, p. 295, §3.)

Article 4 Miscellaneous Regulations

§ 8-16-90 Prohibited Acts Generally

Any person who, by himself or his servant or agent, or as the servant or agent of another person, shall offer or expose for sale, sell, use in the buying or selling of any commodity or thing or for hire or reward or in the computation of any charge for services rendered on the basis of weight or measure when a charge is made for such determination, retain in his possession a false weight or measure or weighing or measuring device or any tool or appliance used in connection therewith which has not been sealed by the Commissioner of Agriculture and Industries or by a local sealer of weights and measures within one year, shall dispose of any condemned weight, measure or weighing or measuring device contrary to law, remove any tag placed thereon by the commissioner or a local sealer, who shall sell or offer or expose for sale less than the quantity he represents of any commodity, thing or service, shall take or attempt to take more than the quantity he represents when as the buyer he furnishes the weight, measure or weighing or measuring device by means of which the amount of any commodity, thing or service is determined, who shall keep for the purpose of sale, offer, expose for sale or sell any commodity in a manner contrary to law, who shall violate any provision of this chapter for which a specific penalty has not been provided or who shall sell, offer or expose for sale or use or have in his possession for the purpose of using or selling any device or instrument to be used to, or calculated to, falsify any weight or measure, shall be guilty of a misdemeanor.

(Ag. Code 1927, §243; Code 1940, T. 2, §601.)

§ 8-16-91 Net Weight of Commodity Basis for Sales by Weight

Whenever any commodity, other than bale cotton, is sold on a basis of weight, it shall be unlawful to employ any other weight in such sale than the net weight of the commodity; and all contracts concerning goods sold on a basis of weight shall be understood and construed accordingly. Whenever the “weight” of a commodity is mentioned in this chapter, it shall be understood and construed to mean the net weight of the commodity.

(Ag. Code 1927, §262; Code 1940, T. 2, §618.)

§ 8-16-93 Net Quantities of Contents of Packages to Be Marked on Outside

(a) It shall be unlawful to keep for the purpose of sale, offer or expose for sale or sell any commodity in package form unless the net quantity of the contents is plainly and conspicuously marked on the outside of the package in terms of weight, measure or numerical count; provided, however, that reasonable variations or tolerances shall be permitted, and that these reasonable variations and tolerances shall be established by rules and regulations made and promulgated by the State Board of Agriculture and Industries; and provided further, that this section shall not be construed to apply to those commodities in package form, the manner of sale of which is specifically regulated by the provisions of other sections of this chapter.

(b) The words “in package form,” as used in this section, shall be construed to include a commodity in a package, carton, case, can, box, barrel, bottle, phial or other receptacle or in coverings or wrappings of any kind put up by the manufacturer, or put up prior to the order of the commodity by the vendor, which may be labeled, branded, stenciled or otherwise marked or which may be suitable for labeling, branding, stenciling or marking otherwise, making one complete package of the commodity. The words “in package form” shall be construed to include both the wholesale and the retail package. “Package,” as used in this section, does not include any container in which are packed or contained packages of a smaller size of a commodity, but the provisions of this section apply only to the container directly including the commodity.

(Ag. Code 1927, §§255, 256; Code 1940, T. 2, §§612, 613.)

§ 8-16-94 Weight Per Bushel or Barrel of Certain Commodities Established by Custom of Marketplace; Commissioner of Agriculture and Industries Authorized to Promulgate Rules Concerning Weights Per Bushel or Barrel

(a) Whenever any commodities shall be sold or delivered and no special written contract or agreement shall be made to the contrary, if sold or authorized to be sold by the bushel or barrel, said bushel or barrel of such commodities shall be the weight per bushel or barrel as is generally recognized and accepted in the marketplace, and the fractional part of the bushel or barrel shall be the corresponding fractional part of the weight per bushel or barrel as is generally recognized and accepted in the marketplace for such commodity.

(b) All such commodities shall be bought or sold by actual weight unless otherwise agreed to in writing between the seller and buyer; provided, however, that any of such commodities may be sold by numerical count; and provided further, that turnips, kale, mustard and spinach salad and other vegetables customarily sold by the bunch may be sold by the bunch.

(c) The Commissioner of Agriculture and Industries, as provided under the provisions of Section 2-2-16, is authorized and empowered to promulgate rules and regulations concerning minimum weights per bushel or barrel or other type container for the sale of commodities, as is needed for the standardization of the sale of such commodities in the marketplace.

(Ag. Code 1927, §246; Code 1940, T. 2, §604; Acts 1980, No. 80-759, p. 1584.)

§ 8-16-95 Milk and Cream Bottles and Containers - Capacities; Markings; Bond Required of Manufacturers

(a) Bottles or other containers used for the sale of milk or cream shall be of the capacity of one gallon, three quarts, one-half gallon, one quart, one-third quart, one pint, one-half pint, and one gill.

(b) Each bottle or other container used for the sale of milk or cream shall be clearly and permanently marked with its capacity and with the word “sealed.” For purposes of identification, such bottles and other containers shall also have clearly and permanently marked thereon the name, initials or trademark of the manufacturer and the manufacturer’s mold designation which identifies the pattern or design of the bottles. The capacity designation and the word “sealed” shall be clearly and permanently marked on the side of the bottle or container.

(c) A bond of $1,000, with surety to be approved by the Commissioner of Agriculture and Industries, together with a complete description of the bottle or container, shall be furnished the commissioner by the manufacturer, conditioned upon their conformance with the requirements of this section and such regulations as may be promulgated by the State Board of Agriculture and Industries for the purposes of this section. A record of the bonds furnished and identification shall be kept in the office of the commissioner.

(Ag. Code 1927, §248; Code 1940, T. 2, §606; Acts 1951, No. 123, p. 352; Acts 1967, No. 431, p. 1100.)

§ 8-16-96 Milk and Cream Bottles and Containers - Penalty for Selling or Using Noncomplying Containers

(a) Any manufacturer or dealer who sells, or offers to sell, milk or cream bottles or containers to be used in the state that do not comply as to size and marking with the provisions of this article shall suffer a penalty of $500, to be recovered by the Attorney General in an action against the offender’s bondsman, to be brought in the name of the state in the Circuit Court of Montgomery County, Alabama.

(b) Any dealer who offers for sale, or who uses for the purpose of selling, milk or cream jars, bottles or containers that do not comply with the requirements of this article as to markings and capacity shall be guilty of offering for sale or using a false or insufficient measure.

(Ag. Code 1927, §249; Acts 1935, No. 13, p. 12; Code 1940, T. 2, §607.)

§ 8-16-97 Milk and Cream Bottles and Containers - Duties of Sealers

Local sealers of weights and measures are not required to seal bottles or containers for milk or cream marked as provided in this article; but they shall have the power to, and shall from time to time, make tests on individual bottles or containers in order to ascertain if the provisions of this article are being complied with, and they shall immediately report violations found to the Commissioner of Agriculture and Industries.

(Ag. Code 1927, §250; Code 1940, T. 2, §608.)

§ 8-16-98 Coal, Coke, or Charcoal - Sale by Weight; “Ton” Defined; Restriction on Liquid Substances in Coal, Coke, or Charcoal

(a) It shall be unlawful to sell, or offer to sell, any coal, coke, or charcoal in any other manner than by weight. When sold by the ton, 2,000 pounds avoirdupois shall be the weight of the ton.

(b) No coal, charcoal or coke shall be sold at retail which contained, at the time the weight was taken, more water or other liquid substance than is due to natural conditions, weather conditions or causes incident to the mining, cleaning, or handling of the coal, charcoal, or coke, except by and with the consent of the purchaser.

(Ag. Code 1927, §252; Code 1940, T. 2, §610.)

§ 8-16-99 Coal, Coke, or Charcoal - Delivery Tickets

(a) It shall be unlawful for any person to deliver any coal, coke, or charcoal without such delivery being accompanied by a delivery ticket and a duplicate thereof, on each of which shall be marked clearly and distinctly the gross weight of the load expressed in pounds, the tare of the delivery vehicle and the quantity or quantities of coal, coke, or charcoal contained in the vehicle used in such deliveries, the name of the purchaser and the name of the dealer from whom purchased.

(b) Such ticket shall be surrendered to the Commissioner of Agriculture and Industries or local sealer of weights and measures upon his demand for his inspection, and if he desires to retain this ticket he shall return a duplicate ticket. The original or duplicate ticket shall be delivered to the purchaser of the coal, coke, or charcoal, or his agent, at the time of the delivery of the fuel and the other ticket shall be retained by the seller of the fuel.

(Ag. Code 1927, §253; Code 1940, T. 2, §611.)

§ 8-16-100 Coal, Coke, or Charcoal - Weighing of Coal at Time of Purchase at Request of Purchaser

When a dealer or dealers in coal in cities or towns where public sales are kept may be requested by a person or persons buying as much as 500 pounds of coal at any one time to weigh such coal upon the public scales, such dealer or dealers shall do so. The person or persons buying the coal shall pay the fee for weighing the same if such is of proper weight; otherwise, such fee shall be paid by the dealer. Any dealer refusing to weigh or to have weighed such coal as required in this section or to pay such fee for weighing the same as required by this section shall be guilty of a misdemeanor.

(Ag. Code 1927, §251; Code 1940, T. 2, §609.)

§ 8-16-101 Fruit, Nuts, Vegetables and Grain to Be Sold by Avoirdupois Weight or Numerical Count

(a) Except as otherwise provided in this article or when sold in the original standard container, all fruit, nuts, vegetables and grain shall be sold at retail by avoirdupois weight or numerical count.

(b) The words “original standard container,” as used in this section, shall mean and include only barrels, boxes, baskets, hampers or similar containers, the dimensions or capacity of which are established by regulations of the State Board of Agriculture and Industries, the contents of which have not been removed or repacked by the retailer and upon which is plainly and conspicuously marked the net quantity of the contents thereof in terms of weight, measure or numerical count.

(c) This section shall not apply to the sale by the bunch of fresh beets, onions, turnips, carrots and other similar vegetables usually and customarily sold by the bunch.

(Ag. Code 1927, §257; Code 1940, T. 2, §614.)

§ 8-16-102 Cornmeal and Grits to Be Sold in Five to 200 Pound Packages; Exceptions

(a) No person shall sell, offer for sale, expose for sale, have in possession with intent to sell, pack or deliver in this state cornmeal or grits in packages of sizes other than five pounds, 10 pounds, 25 pounds, 50 pounds, 100 pounds and 200 pounds; provided, that any person may weigh and sell from bulk cornmeal or grits any number of pounds desired by a customer on order and provided further, that any person may sell, offer for sale, expose for sale, have in possession with intent to sell, pack or deliver in this state cornmeal or grits in weight packages weighing less than five pounds.

(b) For the purpose of this section, the term “cornmeal” shall be deemed to include all products in the form of meal or grits derived from corn, with or without additional processing, such as bolting, degerming or refining, and all mixtures of same with chemicals and other modifying agents.

(Ag. Code 1927, §§99, 100; Code 1940, T. 2, §§134, 135; Acts 1945, No. 284, p. 471, §§1, 2.)

§ 8-16-103 Flour to Be Sold in Packages of Five to 200 Pounds; Exceptions

(a) No person shall sell, offer for sale, expose for sale, have in possession with intent to sell, pack or deliver in this state flour in packages of sizes other than five pounds, 10 pounds, 25 pounds, 50 pounds, 100 pounds and 200 pounds; provided, that any person may weigh and sell from bulk flour any number of pounds desired by a customer on order; and provided further, that any person may sell, offer for sale, expose for sale, have in possession with intent to sell, pack or deliver in this state flour in weight packages weighing less than five pounds.

(b) The provisions of this section shall not apply to the sale of flour to commercial bakers or blenders or for export in containers of more than 100 pounds.

(c) For the purpose of this section, the term “flour” shall include flours derived from cereals or other vegetable sources and mixtures of the same with or without added chemicals or other modifying agents.

(Ag. Code 1927, §§104, 105; Acts 1935, No. 13, p. 12; Code 1940, T. 2, §§301, 302; Acts 1945, No. 284, p. 471, §§3, 4.)

§ 8-16-104 Sale of Ice Regulated

(a) It shall be unlawful for any person, firm or corporation to sell ice in any other manner than by weight.

(b) All ice shall be correctly weighed by the seller at the time of delivery to the purchaser. All agents or employees of any person, firm or corporation engaged in the sale and delivery of ice shall be provided with suitable and correct weighing devices to be used for the purpose of correctly weighing each piece of ice delivered.

(c) It shall be unlawful for any such agent or employee to report or make a charge for any quantity of ice in excess of the quantity in pounds, or fraction thereof, actually delivered according to the weight thereof. It shall be unlawful for any person, firm or corporation delivering ice to refuse, on demand, to allow the purchaser to witness the weighing of the same at the time of delivery, or to refuse, on demand, to furnish the purchaser with a weight slip at the time of delivery containing the name of the person, firm or corporation selling the ice, the number of pounds sold and signed by the agent or employee of such person, firm or corporation.

(d) Whoever, being engaged in the business of selling ice at retail and not engaged in the delivery of the same under a contract, refuses to sell from any place or vehicle engaged in the regular distribution of ice at retail a piece of ice at the fair value thereof to any person other than an ice dealer shall, if such person tenders in payment the fair value thereof in the amount of $.05 or any multiple thereof not more than $.50 in legal money of the United States, be guilty of a misdemeanor.

(Ag. Code 1927, §247; Code 1940, T. 2, §605.)

§ 8-16-105 Sale of Oil at Retail Regulated

Any person engaged in the business of the sale of oil at retail shall use a standard liquid measure, which measure shall not be a larger capacity than the amount of the purchase by any purchaser; provided, however, that this section shall not prevent the use of a correct liquid-measuring device when so located and disposed as to be clearly visible to and readable by the customer from any position which he may reasonably be expected to assume.

(Ag. Code 1927, §264; Code 1940, T. 2, §620.)

§ 8-16-106 Requesting False or Incorrect Weighing or Certificate; Unauthorized Issuance of Certificate

Any person, firm or corporation who shall request a weighmaster to weigh any product, commodity or article falsely or incorrectly or who shall request a false or incorrect certificate of weight or measure and any person issuing a certificate of weights and measures who is not a weighmaster as provided for in this chapter shall be guilty of a misdemeanor.

(Ag. Code 1927, §272; Code 1940, T. 2, §628.)

§ 8-16-107 Operating Weighing or Measuring Device Other Than as Intended

It shall be unlawful for any person to operate any weighing or measuring device in any other manner than that which would be a regular and intended method of operation by the manufacturer, as is evidenced by the make-up of the device itself as being the proper method of operation.

(Ag. Code 1927, §277; Code 1940, T. 2, §633.)

Article 5 Registered Commercial Weighing and Measuring Technicians

§ 8-16-120 Registration Authorized; Purpose

For the benefit of users, manufacturers and distributors of commercial weighing and measuring devices used in selling commodities, things or service by weight or measure, the Commissioner of Agriculture and Industries is empowered to register certain persons skilled in repairing, servicing or installing said devices. Service persons or scale mechanics that become registered may remove condemnation tags placed on weighing and measuring devices by the Commissioner of Agriculture and Industries or local sealers, for the purpose of repair. The removal of condemnation tags by registered service persons or scale mechanics for the specific purpose of repairing devices shall not constitute a violation of Section 8-16-90, but the removal of said tags by registered service persons or scale mechanics for purposes other than repair shall constitute a violation of Section 8-16-90.

(Acts 1984, No. 84-256, §1.)

§ 8-16-121 Registration Requirements; Fees

Only those natural persons who demonstrate to the satisfaction of the Commissioner of Agriculture and Industries their skill in repairing, servicing, or installing, weighing and measuring devices may be registered. The commissioner, under the provisions of Section 2-2-16, may promulgate rules and regulations and establish fees not to exceed one hundred dollars ($100) for the reimbursement of costs and expenses of registration which are reasonable and necessary to include necessary skills, standards, procedures, and equipment which a registrant must meet and follow to accomplish the evident purpose and intent of this law.

(Acts 1984, No. 84-256, p. 421, §2; Act 2004-516, p. 996, §1.)

§ 8-16-122 Registration Period; Renewal; Fee; Testing; Identification; Penalty

Registration of service persons and scale mechanics shall be for a period of 12 months, and shall be renewed each year. An annual fee established by the Board of Agriculture and Industries not to exceed one hundred dollars ($100), to be paid into the Agricultural Fund, shall accompany each initial request for registration or each renewal thereof. Application forms for registration or renewal, and testing shall be furnished and administered by the Commissioner of Agriculture and Industries. The commissioner shall also furnish appropriate identification to persons registered as service persons or scale mechanics. Any person removing condemnation tags placed on weighing and measuring devices by the Commissioner of Agriculture and Industries or local sealers, even for purposes of repair, during any time the person’s registration may have expired due to failure to renew, shall be considered a violation of Section 8-16-90.

(Acts 1984, No. 84-256, p. 421, §3; Act 2004-516, p. 996, §1.)

§ 8-16-123 Revocation, Suspension, Etc., of Registration; Grounds; Notice; Appeal

The commissioner may revoke, suspend or refuse to renew the registration of service persons or scale mechanics if he determines that the person has failed to abide by the rules and regulations promulgated under this law or has removed a condemnation tag, for purpose other than that of repair, or no longer qualifies under the above rules and regulations. The taking of unfair advantage of an owner of a weighing or measuring device or unsatisfactory work in repairing said devices shall also constitute grounds for refusing to register, revocation, suspension or nonrenewal of the registration.

The Commissioner of Agriculture and Industries shall give at least 10-days’ written notice by certified mail to the concerned person prior to refusing to register, revocation, suspension or nonrenewal of the registration. The notice shall set out the specific grounds under which the action was taken. The registrant or proposed registrant, after receiving notification as set out above, may request a hearing before the commissioner. This request must be in writing and be received by the commissioner within 10 days after receiving notice of the commissioner’s intended action. If the written request for a hearing is received within the 10-day period, the commissioner shall stay his intended action pending the outcome of the hearing. Any adverse ruling at this hearing is appealable to the State Board of Agriculture and Industries provided notice of appeal to the board is given in writing to the commissioner within 10 days after receiving written notice of an adverse ruling. The hearing before the State Board of Agriculture and Industries shall follow the proceedings affecting licensees under the Alabama Administrative Procedures Act (§41-22-1 et seq.).

(Acts 1984, No. 84-256, §4.)

Chapter 17 Regulation of Certain Goods and Products

Article 1 Brake Fluid

§ 8-17-1 Definitions

For the purpose of this article, the following words shall have the meanings respectively ascribed to them by this section:

(1) COMMISSIONER. The Commissioner of Agriculture and Industries.

(2) PERSON. Any individual, partnership, firm, corporation or association.

(3) BRAKE FLUID. Any and all substances, liquids, or preparations used or intended for use as a brake medium or to be added to a brake fluid in the braking system of any motor vehicle for use in hydraulic brakes.

(4) PACKAGE. The immediate container in which the brake fluid is packed for sale but does not include a carton or wrapping containing several packages, nor a tank car or truck.

(Acts 1959, No. 30, p. 433, §1.)

§ 8-17-2 Registration and Permit for Sale or Distribution

(a) Before any brake fluid shall be sold, offered for sale, kept for sale or distributed in the State of Alabama, the manufacturer, packer, or distributor thereof shall register the product with the Commissioner of Agriculture and Industries and obtain a permit authorizing the sale of the product.

(b) Applications for registration and permits upon forms furnished by the Commissioner of Agriculture and Industries shall contain:

(1) Name, address, and location of the applicant’s brake fluid manufacturing company, packing or distributing establishment and the address of applicant’s sales office, if any, in the State of Alabama.

(2) The brand name of the brake fluid which the applicant proposes to offer for sale or distribution in the State of Alabama.

(3) A copy of the label or brand which will be affixed to or imprinted upon packages in which brake fluid will be sold, offered for sale or distribution.

(4) A copy of the standards or specifications of the brake fluid, together with such other information as may be required by the commissioner which is necessary for the enforcement of the provisions of this article.

(c) Registration of a brake fluid as required hereunder shall be renewable annually on or before January 1 of each year, and the permit authorizing sale thereof shall be renewable annually on or before that date.

(d) The annual registration fee for each brand of brake fluid registered hereunder shall be $10, to be collected by the Commissioner of Agriculture and Industries before the product is registered and the permit is issued authorizing sale thereof.

(e) Amounts collected hereunder as registration fees and any amount levied as a fine under the penalty provisions of this article shall be deposited in the State Treasury to the credit of the Agricultural Fund.

(f) The Commissioner of Agriculture and Industries shall refuse registration of any brake fluid which does not comply with the requirements of this article.

(g) Whenever a person who manufactures, packs, or distributes brake fluid for sale or distribution in the State of Alabama shall have registered his brand of brake fluid and has obtained a permit as required under the provisions of this section, no other person shall be required to register the same brand and obtain a permit for the purpose of selling or offering the same brand of brake fluid for sale, as it is the intent and purpose hereof to require that the requirements of this section shall be complied with only once for the sale of the same brand of brake fluid.

(Acts 1959, No. 30, p. 433, §§2, 9.)

§ 8-17-3 When Deemed Adulterated

Brake fluid shall be deemed to be adulterated unless it meets the minimum standards for purity and quality as such standards for brake fluid are established by the State Board of Agriculture and Industries under the provisions of this article. Brake fluid shall also be deemed to be adulterated if it contains any substance or preparation which renders it unsuitable for use as a brake fluid or will impair the normal operation of a hydraulic brake system.

(Acts 1959, No. 30, p. 433, §3.)

§ 8-17-4 When Deemed Misbranded

Brake fluid shall be deemed to be misbranded if its labeling is false or misleading in any particular and if in package form it does not bear a label containing the name and address of the manufacturer, packer, seller, or distributor, an accurate statement of the net quantity of the contents in terms of liquid measure and the words “brake fluid” and “heavy duty.”

(Acts 1959, No. 30, p. 433, §4.)

§ 8-17-5 Sale, Etc., Prohibited If Misbranded, Adulterated or Unregistered

No person shall sell, offer for sale, keep for sale, distribute, or add to the hydraulic brake system of motor vehicles in this state any brake fluid which is misbranded or adulterated; and no person shall sell, offer for sale, keep for sale, or distribute any brake fluid in this state unless the manufacturer, packer or distributor thereof has registered the product and obtained a permit as required under the provisions of this article.

(Acts 1959, No. 30, p. 433, §5.)

§ 8-17-6 Promulgation of Rules and Regulations; Product to Meet Standards and Other Requirements

(a) The Commissioner of Agriculture and Industries, with the approval of the State Board of Agriculture and Industries, is authorized to adopt and promulgate by rule or regulation the minimum standards and specifications for brake fluid. Such standards and specifications as adopted under this section shall not be below the minimum standards and specifications established by the Society of Automotive Engineers for heavy-duty type brake fluids No. 70-R-1.

(b) Brake fluid shall not be registered for sale or distribution unless such product meets the standards and other requirements adopted under this section.

(c) The Commissioner of Agriculture and Industries, with the approval of the State Board of Agriculture and Industries, is also authorized to promulgate and adopt reasonable rules and regulations necessary to carry out the evident intent and purpose of this article.

(Acts 1959, No. 30, p. 433, §6.)

§ 8-17-7 Suspension from Sale, Seizure and Condemnation for Violations; Sale, Etc., Prohibited After Suspension

(a) Any brake fluid sold, offered for sale, kept for sale, or distributed in this state which is in violation of any of the provisions or requirements of this article, or rules and regulations promulgated under it, or which is not registered as required under this article shall be subject to suspension from sale, seizure and condemnation pursuant to the provisions of Article 2, Chapter 2 of Title 2, and shall be subject to all of the provisions of said Article 2.

(b) It shall be unlawful and punishable as a misdemeanor for any person to move, transport, sell or in any other manner dispose of any brake fluid after such brake fluid has been suspended or ordered withheld from sale as authorized under this section without having written authority from the Commissioner of Agriculture and Industries or his duly authorized agents or employees.

(Acts 1959, No. 30, p. 433, §7.)

§ 8-17-8 Inspection and Testing

The Commissioner of Agriculture and Industries and his agents, representatives or employees are authorized to enter any establishment where brake fluid is being sold, offered for sale or kept for sale to examine and inspect the product to determine whether such brake fluid is in compliance with the provisions of this article. Upon paying, or offering to pay the value of any specimen or sample, they are authorized to take such specimens or samples for analysis, examination and inspection.

(Acts 30, p. 433, §8.)

§ 8-17-9 Penalty for Violation of Article

Any person who shall sell, offer for sale, or distribute any brake fluid in violation of the provisions of this article and any person who sells, offers for sale or distributes any brake fluid not registered and approved for sale as required under this article shall be guilty of a misdemeanor and punished as now prescribed by law for such an offense.

(Acts 1959, No. 30, p. 433, §10.)

Article 2 Caustic or Corrosive Substances

§ 8-17-20 Definitions

For the purposes of this article, the following terms shall have the meanings respectively ascribed to them by this section:

(1) DANGEROUS CAUSTIC OR CORROSIVE SUBSTANCE.

Each and all of the acids, alkalis, and substances named below:

a. Hydrochloric acid and any preparation containing free or chemically unneutralized hydrochloric acid (HCL) in a concentration of 10 percent or more;

b. Sulphuric acid and any preparation containing free or chemically unneutralized sulphuric acid (H2SO4) in a concentration of 10 percent or more;

c. Nitric acid or any preparation containing free or chemically unneutralized nitric acid (HNO3) in a concentration of five percent or more;

d. Carbolic acid (C6H5OH), otherwise known as phenol, and any preparation containing carbolic acid in a concentration of five percent or more;

e. Oxalic acid or any preparation containing free or chemically unneutralized oxalic acid (H2C2O4) in a concentration of 10 percent or more;

f. Any salt of oxalic acid and any preparation containing any such salt in a concentration of 10 percent or more;

g. Acetic acid or any preparation containing free or chemically unneutralized acetic acid (HC2H3O2) in a concentration of 20 percent or more;

h. Hypochlorous acid, either free or combined, and any preparation containing the same in a concentration so as to yield 10 percent or more by weight of available chlorine, excluding calx chlorinata, bleaching powder, and chloride of lime;

i. Potassium hydroxide and any preparation containing free or chemically unneutralized potassium hydroxide (KOH), including caustic potash and Vienna paste, in a concentration of 10 percent or more;

j. Sodium hydroxide and any preparation containing free or chemically unneutralized sodium hydroxide (NaOH), including caustic soda and lye, in a concentration of 10 percent or more;

k. Silver nitrate, sometimes known as luna caustic, or any preparation containing silver nitrate (AgNO3) in a concentration of five percent or more;

l. Ammonia water and any preparation yielding free or chemically uncombined ammonia (NH3), including ammonium hydroxide and “hartshorn,” in a concentration of five percent or more.

(2) MISBRANDED PARCEL, PACKAGE, OR CONTAINER. A retail parcel, package, or container of any dangerous caustic or corrosive substance for household use, not bearing a conspicuous, easily legible label, or sticker containing the name of the article, the name and place of business of the manufacturer, packer, seller, or distributor, the word “Poison,” running parallel with the main body of reading matter on said label, or sticker on a clear, plain background of a distinctly contrasting color in uncondensed gothic capital letters, the letters to be not less than 24-point size unless there is on said label or sticker no other type so large, in which event the type shall be not smaller than the largest type on the label or sticker and directions for treatment in case of accidental personal injury by the dangerous caustic or corrosive substance.

(Acts 1927, No. 132, p. 90; Code 1940, T. 2, §51.)

§ 8-17-21 Selling, Etc., in Misbranded Container, Etc

No person shall sell, barter or exchange, receive, hold, pack, display, or offer for sale, barter or exchange in the State of Alabama any dangerous caustic or corrosive substance in a misbranded parcel, package, or container, such parcel, package, or container designed for household use; provided, that household products for cleaning and washing purposes, subject to this article and labeled in accordance therewith, may be sold, offered for sale, held for sale, and distributed in this state by any dealer, wholesale, or retail.

(Acts 1927, No. 132, p. 90; Code 1940, T. 2, §52.)

§ 8-17-22 Confiscation, Etc., of Misbranded Containers, Etc

Any dangerous caustic or corrosive substance in a misbranded parcel, package, or container suitable for household use that is being sold, bartered or exchanged, held, displayed or offered for sale, barter, or exchange shall be confiscated and disposed of as provided for under Article 2, Chapter 2 of Title 2, and all of the provisions of said Article 2 shall be applicable to substances regulated by this article.

(Acts 1927, No. 132, p. 90; Code 1940, T. 2, §53.)

§ 8-17-23 Enforcement of Article; Approval and Registration of Brands and Labels; Rules and Regulations

The Commissioner of Agriculture and Industries shall enforce the provisions of this article as in the case of other provisions of Chapter 1 of Title 20, and may approve and register such brands and labels intended for use under the provisions of this article as may be submitted for that purpose and as may, in his or her judgment, conform to the requirements of this article; provided, that in any prosecution under this article the fact that any brand or label involved in such prosecution has not been submitted to the commissioner for approval or, if submitted, has not been approved by him or her shall be immaterial. In addition, the commissioner may make and adopt rules and regulations pursuant to the Administrative Procedure Act as he or she deems necessary to carry out this article and may establish a filing fee to accompany each application for approval and registration of a brand or label.

(Acts 1927, No. 132, p. 90; Code 1940, T. 2, §54; Act 2004-516, p. 996, §1.)

§ 8-17-24 Penalty for Violation of Article

Any person violating the provisions of this article shall be guilty of a misdemeanor.

(Acts 1927, No. 132, p. 90; Code 1940, T. 2, §55.)

Article 3 Linseed Oil

§ 8-17-40 Standards for Raw Linseed Oil

No person shall sell or take orders for sale and delivery within the state any raw linseed oil unless the same is wholly obtained from the seeds of the flax plant (linum usitatissimum) and unless the same fulfills all the requirements recognized by the United States pharmacopoeia official at the time of the investigation.

(Ag. Code 1927, §198; Code 1940, T. 2, §442.)

§ 8-17-41 Standards for Boiled Linseed Oil

No person shall sell or take orders for sale and delivery within this state any boiled linseed oil, or so-called “boiled oil,” unless the same has been prepared from pure raw linseed oil and lead and manganese driers and unless the same complies with the standards and requirements prescribed by the State Board of Agriculture and Industries.

(Ag. Code 1927, §200; Code 1940, T. 2, §443.)

§ 8-17-42 Labeling of Original, Unbroken Containers

No person shall sell any linseed or flaxseed oil unless it is exposed for sale or sold under its true name and each original unbroken tank car, tank, barrel, keg, or vessel containing such oil has distinctly and durably marked thereon the true name of such oil as well as the name and place of business of the manufacturer thereof in ordinary bold-faced capital letters not less than 60 points in size the words “Pure Linseed Oil - Raw” or “Pure Linseed Oil - Boiled,” as the case may be.

(Ag. Code 1927, §201; Code 1940, T. 2, §444.)

§ 8-17-43 Mixture or Substitute to Be Marked and Sold as Such

(a) No person shall sell or take orders for sale and delivery within this state any compound or mixture of linseed oil, raw or boiled, with other products, except as provided in this article, or any product which is intended to be used as a substitute for linseed oil (raw or boiled) unless it is exposed for sale and sold under the name “substitute for linseed oil.”

(b) If the words “linseed” or “flaxseed” are used other than in the name, the true name of each and every ingredient of such product shall also appear, giving preference of order to the ingredients present in the greater proportion; but all letters used in naming the ingredients shall be of the same size and color, using the style of type as hereinafter specified.

(c) Each tank car, tank, barrel, keg, can, jug, or vessel, both wholesale and retail, and all storage receptacles containing such product, shall be distinctly and durably marked in a conspicuous place using the English language and kind of type as hereinafter specified, giving the name under which it is sold, the names of ingredients when required and the name and place of business of the manufacturer thereon in continuous list with no intervening matter, using ordinary bold-face capital letters not less than 60 points in size, and there shall be such a contrast between the color of the type and the background of the label as to render the same easily and plainly legible.

(Ag. Code 1927, §202; Code 1940, T. 2, §445.)

§ 8-17-44 Enforcement of Article; Suspension from Sale, Seizure, Etc., of Illegal Products

(a) The Commissioner of Agriculture and Industries through the facilities of the State Department of Agriculture and Industries shall enforce the provisions of this article.

(b) The provisions of Article 2, Chapter 2 of Title 2 shall be applicable to linseed oil regulated by this chapter.

(Acts 1977, No. 20, p. 28, §2.)

§ 8-17-45 Penalty for Violation of Article

Any person violating any provision of this article or the standards established hereunder shall be guilty of a misdemeanor and, upon conviction, shall be fined not more than $500, and may also be sentenced to hard labor for not more than six months.

(Ag. Code 1927, §611; Code 1940, T. 2, §12.)

Article 5 Petroleum Products

Division 1 Standards and Inspections Generally

§ 8-17-80 Definitions

(a) The following words and phrases, when used in this article, shall have the meanings ascribed to them in this section, except where the context clearly indicates a different meaning:

(1) AVIATION GASOLINE. Motor fuel designed for use in the operation of aircraft other than jet aircraft, and sold or used for that purpose.

(2) BIODIESEL FUEL. Any motor fuel or mixture of motor fuels that is derived, in whole or in part, from agricultural products or animal fats, or the wastes of such products or fats, and is advertised as, offered for sale as, suitable for use as, or used as motor fuel in a diesel engine.

(3) BLENDED FUEL. A mixture composed of gasoline or diesel fuel and any other liquid that can be used as a motor fuel in a highway vehicle.

(4) BOARD. The Alabama Board of Agriculture and Industries.

(5) BRAND. The trade name or other designation under which a particular petroleum product is sold, offered for sale, or otherwise identified.

(6) BULK TRANSFER. Any transfer of motor fuel from one location to another by pipeline tender or marine delivery within a bulk transfer/terminal system, including, but not limited to, the following:

a. The movement of motor fuel from a refinery or terminal to a terminal by marine vessel or barge.

b. The movement of motor fuel from a refinery or terminal to a terminal by pipeline.

c. The book or in-tank transfer of motor fuel within a terminal between licensed suppliers prior to the completion of removal across the rack.

d. A two-party exchange between licensed suppliers or between licensed suppliers and permissive suppliers.

(7) BULK TRANSFER/TERMINAL SYSTEM. The motor fuel distribution system consisting of refineries, pipelines, marine vessels, and terminals.

(8) BULK USER. A person who receives into his or her own storage facilities, in transport truck lots, taxable motor fuel for his or her own consumption.

(9) COMMISSIONER. The Alabama Commissioner of Agriculture and Industries.

(10) DEPARTMENT. The Alabama Department of Agriculture and Industries.

(11) DIESEL FUEL. Any liquid that is advertised, offered for sale, or sold for use as or used as a motor fuel in a diesel-powered engine. Diesel fuel includes #1 and #2 fuel oils, kerosene, special fuels, and blended fuels which contain diesel fuel, but shall not include gasoline or aviation fuel.

(12) DYED DIESEL FUEL. Diesel fuel that meets the dyeing and marking requirements of Section 4082, Title 26 of the United States Code.

(13) DYED KEROSENE. Kerosene that meets the dyeing and marking requirements of Section 4082, Title 26 of the United States Code.

(14) GASOHOL. A blended motor fuel composed of gasoline and motor fuel grade alcohol.

(15) GASOLINE. Any product commonly or commercially known as gasoline, regardless of classification, that is advertised, offered for sale, or sold for use as or used as motor fuel in an internal combustion engine, including gasohol and blended fuel which contains gasoline. Gasoline also includes gasoline blendstocks as defined under Section 4081, Title 26 of the United States Code and the regulations promulgated thereunder. Gasoline does not include special fuel or aviation gasoline sold to a licensed aviation fuel purchaser for use in an aircraft motor.

(16) IMPORT. To bring petroleum products into this state for sale, use, or storage by any means of conveyance other than in the fuel supply tank of a motor vehicle. Petroleum products delivered into this state from out-of-state by or for the seller constitutes an import by the seller. Petroleum products delivered into this state from out-of-state by or for the purchaser constitutes an import by the purchaser.

(17) IMPORTER. A person who imports petroleum products into this state.

(18) INSPECTION FEE PERMIT HOLDER. A person to whom the Department of Revenue has issued an inspection fee permit.

(19) K-1 KEROSENE. A petroleum product having an A.P.I. gravity of not less than 40 degrees, at a temperature of 60 degrees Fahrenheit and a minimum flash point of 100 degrees Fahrenheit, and which meets American Society for Testing Materials Standard D-3699 as in effect on January 1, 1999.

(20) KEROSENE. All grades of kerosene, including, but not limited to, the two grades of kerosene, No. 1-K and No. 2-K, commonly known as K-1 kerosene and K-2 kerosene, respectively, described in the American Society for Testing Materials Standard D-3699, in effect on January 1, 1999, and kerosene-type jet fuel described in the American Society for Testing Materials Standard D-1655 and military specifications MIL-t-5624r and MIL-t-83133d (grades jp-5 and jp8) and any grade described as kerosene or kerosene-type jet fuel by the Internal Revenue Code and administrative guidance promulgated thereunder.

(21) LUBRICATING OIL. Those products of petroleum that are commonly used in lubricating or oiling engines and any devices or substitutes for such products of petroleum.

(22) NET GALLONS. The amount of dyed diesel fuel and dyed kerosene measured in gallons when adjusted to a temperature of 60 degrees Fahrenheit and a pressure of fourteen and seven-tenths pounds pressure per square inch.

(23) PERMISSIVE SUPPLIER. An out-of-state supplier that elects, but is not required, to have a supplier’s license as required in Section 40-17-332.

(24) PERSON. Any natural person, firm, partnership, association, corporation, receiver, trust, estate, or other entity as well as any other group or combination thereof acting as a unit.

(25) PERSON FIRST SELLING. Any person, as herein defined, who first sells dyed diesel fuel, dyed kerosene, and/or lubricating oil in Alabama on which an inspection fee is imposed by this article. The first seller of dyed diesel fuel, dyed kerosene, and/or lubricating oil must obtain an inspection fee permit by making application to the Department of Revenue.

(26) PETROLEUM PRODUCTS. Gasoline, diesel fuel, and lubricating oil.

(27) RETAILER. A person other than a wholesale distributor that engages in the business of selling or distributing taxable motor fuel to the end user within this state.

(28) REVENUE COMMISSIONER. The Commissioner of the Alabama Department of Revenue.

(29) SPECIAL FUEL. Any gas or liquid, other than gasoline, used or suitable for use as motor fuel in an internal combustion engine or motor to propel any form of vehicle, machine, or mechanical contrivance, and includes products commonly known as natural or casing-head gasoline, biodiesel fuel, and transmix. Special fuel does not include any petroleum product or chemical compound such as alcohol, industrial solvent, or lubricant, unless blended in or sold for use as motor fuel in an internal combustion engine.

(30) STATE. The State of Alabama.

(31) SUPPLIER. A person who is subject to the general taxing jurisdiction of this state and registered under Section 4101 of the Internal Revenue Code for transactions in motor fuel in the bulk transfer/terminal distribution system and who owns motor fuel in the bulk transfer/terminal system, or a person who receives motor fuel in this state pursuant to a two-party exchange. A terminal operator shall not be considered a supplier based solely on the fact that the terminal operator handles motor fuel consigned to it within a terminal.

(32) UNDYED DIESEL FUEL. Diesel fuel that has not been dyed in accordance with the Internal Revenue Service fuel dyeing provisions.

(b) The definitions set forth in this section shall be deemed applicable whether the words defined are herein used in the singular or plural.

(c) Any pronoun or pronouns used herein shall be deemed to include both singular and plural and to cover all genders.

(Acts 1971, No. 1403, p. 2363, §1; Acts 1971, 3rd Ex. Sess., No. 339, p. 4643, §1; Act 2015-54, p. 198, §1; Act 2017-296, §1.)

§ 8-17-81 Determination and Adoption of Standards and Methods of Tests; Promulgation of Rules; Effect of Prior Standards

(a) The Board of Agriculture and Industries shall have the power and duty to:

(1) Determine and adopt standards of minimum specifications for petroleum products, and the various classifications and kinds thereof, as to safety, purity, freedom from objectionable substances, distillation tests, heat-producing qualities, fire tests, and efficiency which are not inconsistent with the specifications for the same products that are published from time to time by the United States Department of Commerce; and

(2) Make changes from time to time in such standards, all as the board may deem necessary to provide for the public safety and to provide that such petroleum products are satisfactory and efficient for the purposes for which they may be sold, offered for sale, stored, or used in the state; provided, that such standards shall not be adopted or altered by the board until after a specified date when any person in interest may appear before the board with reference to such standards.

(b) The Board of Agriculture and Industries shall prescribe the methods of tests to be used in determining whether or not petroleum products are in compliance with such standards as shall be adopted as authorized in this section. Any testing and analysis required to be performed may be performed as provided in Section 2-2-33.

(c) The Board of Agriculture and Industries shall have authority to promulgate rules and regulations necessary to secure the safe handling of petroleum products and other such rules and regulations not inconsistent with the provisions of this division as in the judgment of the board may be necessary to the proper enforcement of this division.

(d) The standards of minimum specifications heretofore promulgated by the Board of Agriculture and Industries pursuant to authorization in either Article 21 of Chapter 1 of Title 2 of the Code of Alabama of 1940, or Division 2 of Article 26 of Chapter 1, shall constitute the standards of minimum specifications applicable under this division until such time as the board shall adopt standards pursuant to the provisions of this division.

(Acts 1971, No. 1403, p. 2363, §5; Act 2015-262, §2.)

§ 8-17-82 Labeling Requirement

(a) Each person selling, offering for sale, storing or using in the state any petroleum product must label, or cause to be labeled, each tank car, tank, barrel, pump, or other container in which such petroleum product is contained or marketed with the words “guaranteed legal standards” and with an additional word or words denoting the precise character of the petroleum product in the container so labeled. Each word in such label shall be legibly printed in letters not less than one-half inch in height.

(b) An alternate manner for container and other labeling information as required under subsection (a) of this section may be prescribed by the Board of Agriculture and Industries pursuant to rules and regulations which shall be consistent with the evident intent and purposes of this section.

(c) In addition to the requirements of subsections (a) and (b) of this section each person selling, offering for sale, storing or using in the state any petroleum product to be used as a motor fuel containing a minimum of 10 percent blend of ethyl alcohol of a purity of at least 99 percent denatured in conformity with one of the approved methods set forth by the U.S. Department of Treasury Division of Alcohol, Tobacco and Firearms and derived from agricultural or forest products or other renewable resource products commonly known as gasohol must label or cause to be labeled each container, pump, or dispenser from which such petroleum product is sold or dispensed with the word “GASOHOL.” Each such container or pump shall be conspicuously, clearly and distinctly labeled on each side which faces the motor vehicle and readily visible in an upright position with the word “GASOHOL” printed in black letters at least three inches in height and one-quarter inch in width on a yellow background. The Board of Agriculture and Industries shall have authority to make and issue rules and regulations relating to the implementation of the provisions of this subsection; provided, however, no alternate method of labeling shall be prescribed by such board for this subsection nor shall the requirements of this subsection be in any manner delayed.

(Acts 1971, No. 1403, p. 2363, §3; Acts 1971, 3rd Ex. Sess., No. 339, p. 4643, §2; Acts 1987, No. 87-277, p. 385, §1.)

§ 8-17-83 Adulteration or Lowering of Standard Prohibited

It shall be unlawful for any person who has purchased for resale any petroleum product in respect of which an inspection fee has been paid or which has been designated “guaranteed legal standard” to adulterate or in any way lower the standard of the said petroleum product by the addition of any other liquid or substance, including, without limitation to, any other petroleum product, or to sell, offer for sale, store or use any petroleum product so adulterated or lowered in standard.

(Acts 1971, No. 1403, p. 2363, §8.)

§ 8-17-84 Records to Be Kept; Preservation and Inspection of Records; Regulations as to Keeping of Records

(a) Each person required to be licensed under Section 40-17-332(a), (b), or (f) for gasoline, or permitted under Section 8-17-96 for dyed diesel fuel, dyed kerosene, or lubricating oil, and each bulk user and retailer shall keep and maintain all records pertaining to the petroleum products received, produced, manufactured, refined, compounded, used, sold, imported, or delivered, together with delivery tickets, invoices, bills of lading, and other pertinent records and papers required by the Department of Revenue for the reasonable administration of this article, for a period of no less than three years.

(b) All such records shall be preserved for a period of three years and shall at all times during the business hours of the day be subject to inspection by the Revenue Commissioner or his or her agents or representatives.

(c) The Revenue Commissioner may prescribe regulations respecting the keeping of the records required in this section and the forms thereof.

(Acts 1971, No. 1403, p. 2363, §4; Act 2015-54, §1.)

§ 8-17-85 Examinations and Tests; Permit Required for Sale, Storage, Etc.; Permit Application, Fee and Expiration Date; Nonapplicability of Section to Certain Persons

(a) All petroleum products sold, offered for sale, used or stored in the state shall be subject to examination and tests to determine the safety of such products and their value and efficiency for the purposes for which they are sold, offered for sale, used or stored.

(b) Before selling, offering for sale, storing, or using petroleum products in the state, the person desiring to sell, offer for sale, store, or use such petroleum products in the state must submit to the Commissioner of Agriculture and Industries a written application for a permit, upon forms furnished by the commissioner, setting forth:

(1) The name and brand under which any petroleum product is to be sold, offered for sale, stored or used;

(2) In case said petroleum product is to be sold, offered for sale, stored or used in tanks, barrels, cans or other containers, the number of gallons, the capacity of the containers in which it is to be sold, offered for sale, stored or used, the brand applicable to each particular petroleum product referred to in the application;

(3) The name or names and address of the manufacturers or dealers from which the said petroleum product was procured; and

(4) A statement expressed in terms of the standards adopted by the Board of Agriculture and Industries pursuant to the provisions of Section 8-17-81, as to the standard guaranteed for the petroleum product in respect of which the application is made. The said statement may simply set forth that the petroleum product referred to therein complies with the standard applicable to that particular product that is specified in the regulations as to standards that are provided for in the said Section 8-17-81; provided, that if the person making the application claims a higher standard for any particular petroleum product, he may make a statement to that effect specifying the standard guaranteed.

(c) As soon as practicable after the receipt of such statement, the Commissioner of Agriculture and Industries shall issue to the applicant a permit, provided said statement shows the petroleum product to be sold or offered for sale or stored or used in the state is equal to or above the minimum standard required in the state for such petroleum product.

(d) Such applicant shall pay to the Commissioner of Agriculture and Industries, as a permit fee, the sum of $10 for each different brand specified in the application for a permit.

(e) All such permits shall expire on September 30 of the fiscal year for which they were issued.

(f) This section shall not apply to any person selling, offering for sale, storing, or using petroleum products obtained from a person that has complied with the provisions of this division with respect to the same petroleum products.

(Acts 1971, No. 1403, p. 2363, §2; Acts 1981, No. 81-793, p. 1395, §1.)

§ 8-17-86 Duty to Test Samples; Certificate of Tests

(a) It is the duty of the Commissioner of Agriculture and Industries to secure samples of all petroleum products sold, offered for sale, stored or used in the state and to determine:

(1) Whether or not such petroleum products are sold, offered for sale, stored or used in correct measure or quantity claimed by the person selling or offering for sale or storing or using such petroleum products; and

(2) Whether the same is of legal standard and of the standard advertised.

(b) The Commissioner of Agriculture and Industries shall test, or cause to be tested, such samples in the manner provided by the rules and regulations made by the Board of Agriculture and Industries pursuant to authorization in Section 8-17-81, and shall make a certificate of such test, a copy of which certificate shall be furnished by the commissioner upon request to the person from whom the sample was obtained.

(Acts 1971, No. 1403, p. 2363, §6.)

§ 8-17-87 Inspection Fee

(a) An inspection fee is imposed on the ultimate consumer of gasoline at the rate of two cents ($.02) per gallon, if the excise tax levied on gasoline under Section 40-17-325(a)(1) is refunded by the Department of Revenue unless the ultimate consumer is specifically exempted from the inspection fee by this code. The Department of Revenue is authorized to reduce the excise tax refund by the amount due for the inspection fee.

(b) An inspection fee is imposed on the ultimate consumer of undyed diesel fuel at the rate of two cents ($.02) per gallon, if the excise tax levied on diesel fuel under Section 40-17-325(a)(2) is refunded by the Department of Revenue unless the ultimate consumer is specifically exempted from the inspection fee by this code or unless the undyed diesel fuel is subject to a reduced rate inspection fee in subsection (i). The Department of Revenue is authorized to reduce the excise tax refund by the amount due for the inspection fee.

(c) An inspection fee of two cents ($.02) per gallon is imposed on the first sale within this state or upon importation into this state of dyed diesel fuel unless (1) the purchaser or importer is an inspection fee permit holder, in which case the inspection fee is imposed at the point the inspection fee permit holder makes a sale to a purchaser who is not an inspection fee permit holder, or (2) the purchaser is subject to a reduced rate inspection fee in subsections (e), (f), (g), and (h). The person first selling, the person importing, or the inspection fee permit holder shall collect the fee imposed by this article. If the importer purchases dyed diesel fuel destined for Alabama from a supplier or permissive supplier and the importer is not an inspection fee permit holder and does not have a valid inspection fee permit issued by the Alabama Department of Revenue, the supplier or permissive supplier shall collect and remit the inspection fee imposed by this article. If the importer brings dyed diesel fuel in from bulk storage outside the terminal system, the importer is responsible for collecting and remitting the inspection fee imposed by this article.

(d) An inspection fee of one cent ($.01) per gallon is imposed on the first sale within this state or upon importation into this state of dyed kerosene unless (1) the purchaser or importer is an inspection fee permit holder, in which case the inspection fee is imposed at the point the inspection fee permit holder makes a sale to a purchaser who is not an inspection fee permit holder, or (2) the purchaser is subject to a reduced rate inspection fee in subsections (e), (f), (g), and (h). The person first selling, the person importing, or the inspection fee permit holder shall collect the fee imposed by this article. If the importer purchases dyed kerosene destined for Alabama from a supplier or permissive supplier and the importer is not an inspection fee permit holder and does not have a valid inspection fee permit issued by the Alabama Department of Revenue, the supplier or permissive supplier shall collect and remit the inspection fee imposed by this article. If the importer brings dyed kerosene in from bulk storage outside the terminal system, the importer is responsible for collecting and remitting the inspection fee imposed by this article.

(e) Dyed diesel fuel and dyed kerosene that is used by the ultimate consumer thereof as motor fuel to operate boats, yachts, ships, or other maritime vehicles, whether such boats, yachts, ships, or other maritime vehicles are used commercially or for pleasure, shall be subject to the reduced inspection fee of one fortieth of $.01 ($.00025) per gallon. This reduced rate only applies to purchases by the ultimate consumer directly from an inspection fee permit holder. The person first selling, the person importing, or the inspection fee permit holder shall collect the fee imposed by this article.

(f) Dyed diesel fuel or dyed kerosene used by the ultimate consumer thereof to propel or operate tractors which are not operated on public highways but which are used exclusively in preparing and cultivating land, harvesting any agricultural commodity, or for other agricultural purposes, including pasture and hay production; provided, however, that the term tractors as used herein shall not include automobiles, trucks, pickups, trailers, semitrailers, or other such vehicles, shall be subject to the reduced inspection fee of one fortieth of $.01 ($.00025) per gallon. This reduced rate only applies to purchases by the ultimate consumer directly from an inspection fee permit holder. The person first selling, the person importing, or the inspection fee permit holder shall collect the fee imposed by this article.

(g) Dyed diesel fuel or dyed kerosene that is of the types customarily used as, and that is intended to be used only as, fuel to propel railroad locomotives, shall be subject to the reduced inspection fee of one fortieth of $.01 ($.00025) per gallon. This reduced rate only applies to purchases by the ultimate consumer directly from an inspection fee permit holder. The person first selling, the person importing, or the inspection fee permit holder shall collect the fee imposed by this article.

(h) Dyed diesel fuel or dyed kerosene used by the ultimate consumer thereof as a solvent or other agent in the treatment or preservation of wood products, shall be subject to the reduced inspection fee of one fortieth of $.01 ($.00025) per gallon. This reduced rate only applies to purchases by the ultimate consumer directly from an inspection fee permit holder. The person first selling, the person importing, or the inspection fee permit holder shall collect the fee imposed by this article.

(i) An inspection fee is imposed on the ultimate consumer of undyed diesel fuel at the rate of one fortieth of $.01 ($.00025) per gallon, if the excise tax levied on undyed diesel fuel under Section 40-17-325(a)(2) is refunded by the Department of Revenue and the ultimate consumer specifically used the undyed diesel fuel:

(1) To operate boats, yachts, ships, or other maritime vehicles, whether such boats, yachts, ships, or other maritime vehicles are used commercially or for pleasure;

(2) To propel or operate tractors which are not operated on public highways but which are used exclusively in preparing and cultivating land, harvesting any agricultural commodity, or for other agricultural purposes, including pasture and hay production; provided, however, that the term tractors as used herein shall not include automobiles, trucks, pickups, trailers, semitrailers, or other such vehicles;

(3) To propel railroad locomotives; or

(4) As solvent or other agent in the treatment or preservation of wood products.

The Department of Revenue is authorized to reduce the excise tax refund by the amount due for the inspection fee.

(j) An inspection fee of fifteen cents ($.15) per gallon is imposed on the person first selling lubricating oil in this state or importing lubricating oil into this state, regardless of whether the excise taxes levied on lube oil under Sections 40-17-171 and 40-17-220 are paid, unless the purchaser or importer is an inspection fee permit holder, in which case the inspection fee is imposed at the point the inspection fee permit holder makes a sale to a purchaser who is not an inspection fee permit holder. The person first selling, the person importing, or the inspection fee permit holder shall collect the fee imposed by this article.

(k) An inspection fee of two cents ($.02) per gallon is imposed on removal within this state of gasoline and undyed diesel fuel from the terminal using the terminal rack, other than by bulk transfer, if the supplier sells the gasoline or undyed diesel fuel to a licensed entity which is exempt from the excise tax levied on gasoline or diesel fuel under Section 40-17-325(a); unless the purchaser is the federal government. The supplier shall collect the inspection fee imposed by this article from the purchaser at the time of sale of the gasoline or undyed diesel fuel.

(l) An inspection fee of two cents ($.02) per gallon is imposed at the time gasoline and undyed diesel fuel is imported into this state, other than by bulk transfer, for delivery to a destination in this state, if the supplier sells the gasoline or undyed diesel fuel to a licensed entity which is exempt from the excise tax levied on gasoline or diesel fuel under Section 40-17-325(a); unless the purchaser is the federal government. The supplier or permissive supplier shall collect the inspection fee imposed by this article from the person who imports the gasoline or undyed diesel fuel into this state.

(m) In each subsequent sale of petroleum products on which the inspection fee has been paid, the amount of the inspection fee shall be added to the selling price so that the inspection fee is paid ultimately by the person using or consuming the petroleum product.

(n) Petroleum products in a refinery, a pipeline, a terminal, or a marine vessel transporting petroleum products to a refinery or terminal is in the bulk transfer/terminal system. Petroleum products in a motor fuel storage facility including, but not limited to, a bulk plant that is not part of a refinery or terminal, in the motor fuel supply tank of any engine or motor vehicle, or in any tank car, rail car, trailer, truck, or other equipment suitable for ground transportation is not in the bulk transfer/terminal system.

(o) The inspection fee provided for in this section is in addition to all other fees and all taxes payable with respect to petroleum products. The inspection fee shall be paid on the net gallons of dyed diesel fuel or dyed kerosene.

(p) Aviation gasoline and aviation jet fuel are exempt from the inspection fee.

(Acts 1971, No. 1403, p. 2363, §9; Acts 1971, 3rd Ex. Sess., No. 339, p. 4643, §3; Acts 1973, No. 641, p. 949, §1; Acts 1984, No. 84-185, p. 279, §1; Act 2004-546, p. 1164, §1; Act 2015-54, p. 198, §1; Act 2017-296, §1.)

§ 8-17-88 Sale, Storage, Etc., of Nonstandard Products Prohibited; Suspension from Sale, Condemnation, Etc., of Nonstandard Products

(a) No person shall sell, offer for sale, store, use or bring to rest in the state for sale, offer for sale, use or storage in the state any petroleum product which fails to comply with the standards adopted by the Board of Agriculture and Industries.

(b) Publicity shall be given to any failure to comply with the standards as the Commissioner of Agriculture and Industries shall prescribe.

(c) The sale, offer for sale, storage or use of petroleum products that fall below the standards fixed by the Board of Agriculture and Industries is hereby declared illegal, and such petroleum products shall be subject to suspension from sale, offer for sale, storage or use and may be condemned and sold as provided in Sections 2-2-30 through 2-2-37.

(Acts 1971, No. 1403, p. 2363, §7.)

§ 8-17-89 Notification; Duty of Importer

[Repealed]

Repealed by Act 2015-54, §2, effective October 1, 2016.

(Acts 1971, No. 1403, p. 2363, §10; Acts 1971, 3rd Ex. Sess., No. 339, p. 4643, §4.)

§ 8-17-90 Driver of Delivery Vehicle to Deliver Invoice

No sale or delivery of petroleum products shall be made from a tank, wagon, motor vehicle or delivery truck unless the driver in charge of the vehicle shall deliver to the person receiving such product an invoice that:

(1) Shows the number of gallons of the product;

(2) Has plainly written or stamped thereon the words “guaranteed legal standard”; and

(3) States that the inspection fee payable with respect to such petroleum product has been paid.

(Acts 1971, No. 1403, p. 2363, §10; Acts 1971, 3rd Ex. Sess., No. 339, p. 4643, §4.)

§ 8-17-91 Disposition of Funds; Overpayments

(a) The proceeds from the permit fees, inspection fees, and penalties, if any, collected by the Commissioner of Agriculture and Industries and the Revenue Commissioner pursuant to Section 8-17-87 together with one-third of the proceeds of the six cent ($.06) additional motor fuel excise tax levied on gasoline under subdivision (1) of subsection (a) of Section 40-17-325, shall be paid into the State Treasury and distributed by the State Treasurer as follows:

(1) An amount equal to five percent or no less than $175,000, whichever is greater, of the combined proceeds received each month shall accrue to the credit of, and be deposited in, the Agricultural Fund; and

(2) The balance of the proceeds shall be distributed as follows:

a. 13.87 percent of the balance of the proceeds shall be distributed equally among each of the 67 counties of the state monthly.

The county shall deposit the proceeds into the county’s special RRR Fund as provided for in Section 40-17-362, and may use the proceeds so deposited for any purpose authorized under that section.

b. $408,981 shall be allocated to the State Department of Transportation monthly and deposited in the State Treasury to the credit of the Public Road and Bridge Fund. Such funds are hereby appropriated to the State Department of Transportation to be used to match federal aid discretionary funds that may from time to time become available to the State Department of Transportation. In the event that in any fiscal year other State Department of Transportation funds are insufficient to match the department’s regular federal aid apportionment, then at the Director of the State Department of Transportation’s recommendation, and approval by the Governor, funds appropriated under this subsection may be used to match the federal aid apportionment.

c. 2.76 percent of the balance of the proceeds shall be allocated among the incorporated municipalities of the state as follows:

1. A portion of the municipalities’ share of the balance of the proceeds that is equal to 45.45 percent of the municipalities’ share of the balance of the proceeds shall be allocated equally among the 67 counties of the state.

2. The entire residue of the municipalities’ share of the balance of the proceeds being an amount equal to 54.55 percent of the municipalities’ share of the balance of the proceeds shall be allocated among the 67 counties of the state on the basis of the ratio of the population of each such county to the total population of the state according to the then next preceding federal decennial census, or any special federal census heretofore held in any county subsequent to the effective date of the 1980 federal decennial census.

3. The amount so allocated or apportioned to each county shall be distributed among the municipalities in the county with respect to which the allocation or apportionment is made, each such distribution among the municipalities to be on the basis of the ratio of the population of each such municipality to the total population of all municipalities in the applicable county according to the then next preceding federal decennial census.

4. The population of any municipality incorporated subsequent to the taking of the then next preceding federal decennial census shall be deemed to be the population shown by the census for that municipality taken pursuant to the requirements of Section 11-41-4. Any municipality incorporated after September 1983, shall not participate in the distribution provided for in this section until the fiscal year next succeeding the fiscal year during which it is incorporated, the first distribution to such municipality to be made in respect of receipts of the inspection fee by the state during October of the fiscal year next succeeding the incorporation.

5. Use of the inspection fee by a municipality shall be for transportation planning, the construction, reconstruction, maintenance, widening, alteration, and improvement of public roads, bridges, streets, and other public ways, including payment of the principal of and interest on any securities at any time issued by the municipality pursuant to law for the payment of which any part of the net tax proceeds were or may be lawfully pledged; provided, that no part of the balance of the proceeds referred to in this section shall be expended contrary to the provisions of the Constitution; and provided further, that funds distributed to municipalities under the provisions of this division shall not be commingled with other funds of the municipality, except the municipalities’ portion of the highway gasoline tax, and shall be kept and disbursed by such municipality from a special fund only for the purposes hereinabove provided.

d. An additional five percent of the balance each month computed after deducting the distributions in paragraphs a. and c. shall accrue to the credit of, and be deposited in, the Agricultural Fund.

e. In addition to any and all other funds heretofore or hereafter appropriated, for the fiscal year beginning October 1, 2015, there is appropriated to the Department of Revenue as a first charge against the fees collected pursuant to this article, the sum of five hundred thousand dollars ($500,000) to offset the Revenue Department’s costs to implement and administer this article. Beginning October 1, 2016, and every year thereafter an amount equal to two and one-half percent of the balance of the proceeds received each month after deducting the distributions in paragraphs a., b., c., and d. or no less than eighty-seven thousand five hundred dollars ($87,500), whichever is greater, is appropriated and shall accrue to the credit of, and be deposited to, the Department of Revenue to offset its costs of collection.

f. The balance of the proceeds after a., b., c., d., and e. above have been distributed monthly shall accrue to the credit of and be deposited in the Public Road and Bridge Fund.

(b) In the event of the collection hereunder from any person of an amount in excess of the amount of all inspection fees, interest, or penalties properly and lawfully required to be paid by such person, such person may apply to the Revenue Commissioner in the case of the inspection fees, interest, and penalties paid to the Revenue Commissioner. In the case of overpayment of the permit fees or penalties paid to the Commissioner of Agriculture and Industries, the person may apply to the Commissioner of Agriculture and Industries for a refund of the amount of such overpayment. If such application for refund is approved in whole or in part by the commissioner, the commissioner shall submit to the state Comptroller a statement, approved by the state Attorney General, setting forth the amount determined to have been overpaid and the date of the overpayment. If an application for refund submitted to the Revenue Commissioner is approved in whole or in part by the Revenue Commissioner, he or she shall submit to the state Comptroller a statement, setting forth the amount determined to have been overpaid and the date of the overpayment. In each case, the state Comptroller shall then draw his or her warrant in favor of the person making such overpayment upon the State Treasurer for the amount specified in the statement, and such amount shall be paid out of current months’ collections before any distribution is made under subsection (a) of this section.

(c) The application for refund of the permit fees provided for in this article shall be filed with the Commissioner of Agriculture and Industries within 12 calendar months from the date upon which the overpayment was made, and no amount shall be refunded unless the application therefor is filed within the time prescribed herein.

For any period prior to October 1, 2016, the application for refund of the inspection fee provided for in this article shall be filed with the Revenue Commissioner within 12 calendar months from the date upon which the overpayment was made, and no amount shall be refunded unless the application therefor is filed within the time prescribed herein. For the period beginning October 1, 2016, the application for refund of the inspection fee provided for in this article must be filed with the Revenue Commissioner within the time limits provided by the Taxpayer Bill of Rights in Chapter 2A of Title 40. No amount shall be approved for refund by the Revenue Commissioner unless the application therefor is filed within the time prescribed therein.

(d) The Department of Agriculture and Industries or the Department of Revenue shall have authority to make and issue rules and regulations relating to the procedure to be followed in filing an application for a refund and for payment of any refund made under this article.

(e) In the event of the collection from any person by the Revenue Commissioner of an amount in excess of the amount lawfully required for the six cent ($.06) additional motor fuel excise tax levied on gasoline under subdivision (1) of subsection (a) of Section 40-17-325, when one-third of the amounts so collected have been deposited in the State Treasury and distributed as provided herein, any refund properly approved by the Revenue Commissioner shall be paid out of current months’ collections before any distribution of the current months’ collections is made under subsection (a) of this section.

(Acts 1971, No. 1403, p. 2363, §11; Acts 1979, No. 79-307, p. 460, §1; Acts 1984, No. 84-185, p. 279, §2; Acts 1986, Ex. Sess., No. 86-716, p. 132, §1; Act 2004-516, p. 996, §1; Act 2004-546, p. 1164, §1; Act 2012-400, p. 1092, §1; Act 2015-54, §1.)

§ 8-17-92 Injunctive Relief

(a) In addition to penalty and other enforcement provisions of this division and notwithstanding the existence of another adequate remedy, the circuit court shall have jurisdiction for cause shown to grant a temporary restraining order or permanent injunction, or both, restraining and enjoining any person from violation or continuing to violate any requirements of this division declared to be unlawful.

(b) Any such person may also be restrained or enjoined from selling, offering for sale, storing, or using any petroleum product without having a permit as required by Section 8-17-96, from selling, distributing, offering for sale, storing, or using in this state any petroleum product upon which the inspection fee imposed by Section 8-17-87 is not paid or from otherwise violating any of the provisions and requirements of this chapter.

(c) Such injunction or restraining order shall be issued without bond.

(d) Any action commenced under this section shall be brought in the name of the State of Alabama upon the relation of the Attorney General.

(Acts 1971, No. 1403, p. 2363, §12; Acts 1971, 3rd Ex. Sess., No. 339, p. 4643, §5; Act 2015-54, §1.)

§ 8-17-93 Penalty for Violation; Revocation of Permits

(a) Any person who sells, offers for sale, stores, or uses any petroleum product in the state which is below the legal standard, who makes a false statement or certificate as to the quantity or standard of such petroleum product, sells, offers for sale, stores, or uses any petroleum product without having procured a permit as required by Section 8-17-85, fails to make any report to the Revenue Commissioner as required by this article, makes a false certificate of the number of gallons of such petroleum product sold, stored, or used during the preceding month or who otherwise violates or fails to comply with the provisions of this article shall be guilty of a misdemeanor.

(b) The Commissioner of Agriculture and Industries may revoke the permit, referenced in Section 8-17-85, of any person found upon investigation to have sold, offered for sale, stored, or used any petroleum product below the minimum standards adopted by the Board of Agriculture and Industries pursuant to the provisions of this article or when the Revenue Commissioner has notified the Commissioner of Agriculture and Industries that the taxpayer has failed or refused, subject to the appeal provisions of Chapter 2A of Title 40, to file the delinquent tax return or to pay the inspection fee required by this article.

(c) The holder of any permit, referenced in Section 8-17-85, that may be revoked pursuant to the provisions of this section shall have the right, upon request of such holder, to a hearing before the Commissioner of Agriculture and Industries, at which such holder may appear personally or by legal representative, and he or she may appeal from the decision of the commissioner by filing in the Circuit Court of Montgomery County a petition for an injunction against the commissioner. In the event such an injunction is sought, sufficient bond shall be filed with the court and conditioned as the law now provides relative to injunction bonds. The findings of the commissioner shall be presumed to be correct.

(Acts 1971, No. 1403, p. 2363, §12; Acts 1971, 3rd Ex. Sess., No. 339, p. 4643, §5; Act 2015-54, §1.)

§ 8-17-94 Division Not Applicable to Certain Shipments

The provisions of this division shall not be construed to be applicable to petroleum products unloaded in any port of the state for shipment from such port into any other state or to any shipments of petroleum products through the state from any other state to a destination point outside the state.

(Acts 1971, No. 1403, p. 2363, §13.)

§ 8-17-95 (Effective October 1, 2016) Floor-Stocks Inspection Fee

(a) There is hereby imposed a floor-stocks inspection fee on gasoline held in inventory outside of the bulk transfer/terminal system, as defined in Section 40-17-322, but not at the retail level, on October 1, 2016, if:

(1) No inspection fee was imposed on the gasoline under Section 8-17-87, as of September 30, 2016; and

(2) The inspection fee would have been imposed on the gasoline by this article had it been in effect for the periods prior to October 1, 2016.

(b) The rate of the inspection fee imposed by this section shall be the amount of the fee imposed under Section 8-17-87, on September 30, 2016.

(c) Any person owning gasoline on October 1, 2016, to which the inspection fee imposed by this section applies, shall be liable for the inspection fee. The inspection fee imposed by this section shall be paid on or before December 31, 2016, and shall be paid in the manner prescribed by the Department of Revenue.

(Act 2015-54, §3.)

§ 8-17-96 Inspection Fee Permit; Liability of Surety

(a) The supplier or permissive supplier of gasoline or undyed diesel fuel sold to a licensed exempt entity other than the federal government at the rack, or the supplier or permissive supplier selling dyed diesel fuel or dyed kerosene at the rack at an out-of-state terminal to an importer for delivery into Alabama that does not have a valid inspection fee permit issued by the Alabama Department of Revenue, or the person first selling, the person importing, or the person who makes application to become an inspection fee permit holder of dyed diesel fuel, dyed kerosene, or lubricating oil in this state shall submit an application for an inspection fee permit to the department, which shall be approved by the department. Upon approval of the inspection fee application, the department shall issue to the applicant an inspection fee permit. This permit is not transferable and remains in effect until surrendered or canceled.

(b) The surety will remain liable for any liability that has accrued or will accrue prior to May 16, 2017.

(Act 2015-54, p. 198, §3; Act 2017-296, §1.)

§ 8-17-97 Collection and Payment of Inspection Fee; Filing Requirements; Rulemaking Authority

(a) It shall be the duty of the person first selling dyed diesel fuel, dyed kerosene, or lubricating oil in this state or importing dyed diesel fuel, dyed kerosene, or lubricating oil into the state, on which an inspection fee is due to collect and pay such inspection fee to the Department of Revenue each month in respect of all dyed diesel fuel, dyed kerosene, or lubricating oil sold or imported in the state during the preceding month unless the purchaser is an inspection fee permit holder.

(b) It shall be the duty of the supplier or permissive supplier to collect and pay the inspection fee to the Department of Revenue each month in respect of all dyed diesel fuel or dyed kerosene destined for Alabama that is sold to an importer that does not have a valid inspection fee permit issued by the Alabama Department of Revenue.

(c) It shall be the duty of the supplier or permissive supplier to collect the inspection fee imposed by this article from the licensed exempt entity unless the licensed exempt entity is an entity of the federal government on sales at the terminal rack and remit payment each month in respect of all gasoline or undyed diesel fuel sold in the state during the preceding month to licensed exempt entities other than the federal government.

(d) Each supplier, permissive supplier, importer, first seller, or inspection fee permit holder shall file the monthly returns and monthly remittance, in a format prescribed by the Revenue Commissioner, on or before the 20th day of each calendar month for the preceding month with the Department of Revenue. The taxpayer is required to file an electronic report through the Department of Revenue’s electronic filing system.

(e) The inspection fee provided for in this section shall be paid but once with respect to the same product; but in the event any person fails to make the required electronic report or payment as herein provided on or before the date such payment is due, the Revenue Commissioner shall add to the inspection fee already due interest as prescribed in Section 40-1-44 and any applicable penalties as prescribed in Chapter 2A of Title 40. The Revenue Commissioner shall then proceed to collect the inspection fee, together with the interest and penalties, in accordance with the provisions of Title 40.

(f) The inspection fee, interest, and any penalties added thereto shall constitute and operate as a lien at all times until paid upon any petroleum products sold, offered for sale, stored, or used in the state by the person liable for the fee, and shall be immediately enforceable by the Revenue Commissioner in accordance with established collection procedures of the Department of Revenue.

(g) The Revenue Commissioner shall have authority to adopt and promulgate reasonable rules and regulations to effectuate the evident intent and purpose of this section with respect to reporting, collection, remittance, and payments of the petroleum products inspection fees imposed under this article which shall not conflict with any of the express provisions and requirements of this section.

(Act 2015-54, p. 198, §3; Act 2017-296, §1.)

§ 8-17-98 (Effective October 1, 2016) Inspection Fee of Ultimate Consumers Having Submitted Refund Petition

(a) Having submitted a refund petition for the excise tax under the provisions of Section 40-17-329(h), the following ultimate consumers shall owe an inspection fee to the Department of Revenue at a reduced rate of one-fortieth of a cent ($.00025) per gallon on undyed diesel fuel. The Department of Revenue is authorized to reduce the excise tax refund by the amount of the inspection fee that is due.

(1) Undyed diesel fuel used by the ultimate consumer to operate boats, yachts, ships, or other maritime vehicles, whether such boats, yachts, ships, or other maritime vehicles are used commercially or for pleasure.

(2) Undyed diesel fuel used by the ultimate consumer to propel or operate tractors which are not operated on public highways but which are used exclusively in preparing and cultivating land, harvesting any agricultural commodity, or for other agricultural purposes, including pasture and hay production; provided, however, that the term tractors as used herein shall not include automobiles, trucks, pickups, trailers, semitrailers, or other such vehicles.

(3) Undyed diesel fuel used to propel railroad locomotives.

(4) Undyed diesel fuel used by the ultimate consumer as a solvent or other agent in the treatment or preservation of wood products.

(b) Having submitted a refund petition for the excise tax under the provisions of Section 40-17-329(h) on undyed diesel fuel used by the ultimate consumer in firing steam boilers or combustion generating turbines by compression, the ultimate consumer shall be exempt from the inspection fee on undyed diesel fuel used in firing steam boilers or combustion generating turbines by compression.

(c) If a refund is issued by the Department of Revenue for excise taxes levied under Section 40-17-325(1) on gasoline or Section 40-17-325(2) on undyed diesel fuel for sales to the United States government or any agency thereof, the inspection fee levied under this article shall not be due.

(d) If a refund is issued by the Department of Revenue for excise taxes levied under Section 40-17-325(1) on gasoline or Section 40-17-325(2) on undyed diesel exported out of Alabama, the inspection fee levied under this article shall not be due.

(Act 2015-54, §3.)

§ 8-17-99 Deduction on Monthly Returns

(a) The person first selling, the person importing, or the inspection fee permit holder of dyed diesel fuel or dyed kerosene may take a deduction on the monthly return for sales of dyed diesel fuel or dyed kerosene to the following:

(1) United States Government.

(2) Exports by the inspection fee permit holder.

(3) Sales from one Alabama inspection fee permit holder to another Alabama inspection fee permit holder.

(4) Sales to the ultimate consumer for use in firing steam boilers or combustion generating turbines by compression.

(b) The person first selling, the person importing, or the inspection fee permit holder of lubricating oil may take a deduction on the monthly return for sales of lubricating oil to the following:

(1) United States Government.

(2) Exports by the inspection fee permit holder.

(3) Sales from one Alabama inspection fee permit holder to another Alabama inspection fee permit holder.

(Act 2015-54, p. 198, §3; Act 2017-296, §1.)

§ 8-17-100 (Effective October 1, 2016) Refusal of Inspection Fee Permit; Appeals

(a) The Department of Revenue may refuse to issue an inspection fee permit under this article if the applicant or any principal of the applicant has done any of the following:

(1) Had a motor fuel license or registration issued by this state or another state canceled for cause.

(2) Been convicted of any offense involving fraud or misrepresentation.

(3) Been convicted of any other offense that indicates that the applicant may not comply with this article if issued an inspection fee permit.

(b) The Department of Revenue may also refuse to issue an inspection fee permit if the applicant is in arrears to the state for any taxes or fees or for other good cause shown.

(c) Any refusal by the Department of Revenue under this section to issue an inspection fee permit may be appealed under the provisions of Chapter 2A of Title 40.

(Act 2015-54, §3.)

§ 8-17-101 Cancellation of Inspection Fee Permit

(a) In accordance with the provisions of Chapter 2A of Title 40, the Department of Revenue may cancel the inspection fee permit required under Section 8-17-96, upon written notice sent to the permit holder’s last known address, as it appears in the Department of Revenue’s files, for any of the following reasons:

(1) Filing by the permit holder of a false report of the data or information required by this article.

(2) Failure, refusal, or neglect of the permit holder to file a report or to provide any information required by this article.

(3) Failure of the permit holder to pay the full amount of all excise taxes and inspection fees due or to pay any penalties or interest due.

(4) Failure of the permit holder to keep accurate records of the quantities of petroleum products received, produced, refined, manufactured, compounded, sold, imported, or used in Alabama.

(5) Conviction of the permit holder or a principal of the permit holder for any act prohibited under this article.

(6) Failure, refusal, or neglect of a permit holder to comply with any other provision of this article or any rule promulgated pursuant to this article.

(7) Having a motor fuel license or registration issued by this state or another state canceled for cause.

(8) For any change in the ownership or control of the business.

(b) Upon cancellation of any permit for any cause listed above, the inspection fee levied under this article becomes due and payable on all untaxed petroleum products held in storage or otherwise in the possession of the permit holder and all petroleum products sold, delivered, imported, or used prior to the cancellation on which the fee has not been paid.

(c) The permit can be canceled upon the written request of the permit holder.

(Act 2015-54, p. 198, §3; Act 2017-296, §1.)

§ 8-17-102 Filing of Returns

Every return required to be filed under this article shall be on forms and by means prescribed by the Revenue Commissioner and furnished by the Department of Revenue and shall contain any information the Department of Revenue considers necessary for the enforcement of this article.

(Act 2015-54, §3.)

Division 2 Reclaimed or Re-refined Oil

§ 8-17-110 Definitions

The terms “reclaimed oil” or “re-refined oil,” as used in this division, shall mean any lubricating oil, lubricant or motor lubricating oil which has been previously used, in whole or in part, when such oil has been reprocessed, re-refined or in any manner reclaimed, regardless of the quality of the oil, the method of reprocessing, re-refining or reclaiming of the oil or of the intended use of such oil.

(Acts 1951, No. 923, p. 1571, §1.)

§ 8-17-111 Labeling Requirements

It shall be unlawful for any person, firm, corporation or association to sell, offer for sale or keep for sale in the State of Alabama reclaimed or re-refined oil, as defined in this division, unless such oil is in a container bearing a label on which there shall be expressed the brand or trade name of the oil, the name and address of the person, firm, corporation or association who has reclaimed, reprocessed or re-refined such oil and placed it in the container, the S.A.E. (Society of Automotive Engineers) viscosity number, the net quantity of each container expressed in standard liquid measure and the words “reclaimed oil” or “re-refined oil” in letters as large and conspicuous as any other letters thereon, except the trade name of such oil, and such letters shall not be obscured by other words, legend, color or otherwise.

(Acts 1951, No. 923, p. 1571, §1.)

§ 8-17-112 Advertising

It shall be unlawful for any person, firm, corporation or association to advertise, publicize or circulate advertising material or to use display advertising to promote the sale of reclaimed oil or re-refined oil in the State of Alabama unless such advertising material or displays include a statement that the oil offered for sale is reclaimed or re-refined oil, and such statement shall be in letters as large as any other letters used in such advertising material or advertising displays except the trade name of such oil.

(Acts 1951, No. 923, p. 1571, §2.)

§ 8-17-113 Enforcement of Division

The Commissioner of Agriculture and Industries is charged with the execution and enforcement of this division.

(Acts 1951, No. 923, p. 1571, §3.)

§ 8-17-114 Suspension from Sale, Seizure, Condemnation, Etc., of Illegal Oil

Any reclaimed or re-refined oil kept for sale or offered for sale in violation of any of the provisions of this division shall be subject to suspension from sale, seizure and condemnation in accordance with the provisions of Article 2, Chapter 2 of Title 2, and all of the provisions of said Article 2 shall be applicable to oil regulated by this division.

(Acts 1951, No. 923, p. 1571, §3.)

§ 8-17-115 Nonapplicability of Division to Certain Sales

The provisions of this division shall not apply to oil sold to the consumer on, or from, the premises of a person, firm or corporation where the reclaimed or re-refined oil is reclaimed, reprocessed or re-refined on such premises.

(Acts 1951, No. 923, p. 1571, §1.)

§ 8-17-116 Penalty for Violation of Division

Any person, firm, corporation or association violating any of the provisions of this division shall be guilty of a misdemeanor and, upon conviction, shall be fined not more than $250.

(Acts 1951, No. 923, p. 1571, §4.)

Division 3 Fraud and Deceit in Sale

§ 8-17-130 Deceit in Sales

It shall be unlawful for any person to knowingly sell, or offer for sale, any liquid motor fuel, lubricating oil, grease or other similar petroleum products with the intent to deceive any purchaser or prospective purchaser thereof as to the identity, quality, brand or character of any of such products.

(Acts 1932, Ex. Sess., No. 243, p. 241; Code 1940, T. 2, §416.)

§ 8-17-131 Marking of Pumps, Etc. - Liquid Motor Fuels

Every person conducting a place of business from which any liquid motor fuel is sold or offered for sale at retail to the public must conspicuously, clearly and distinctly place and keep placed on each pump or other device used by him for dispensing such fuel at such place the name of the owner thereof and the name of the brand, trademark or trade name of the liquid motor fuel being dispensed from each pump or other said device.

(Acts 1932, Ex. Sess., No. 243, p. 241; Code 1940, T. 2, §417.)

§ 8-17-132 Marking of Pumps, Etc. - Lubricating Oils and Motor Greases

Every person selling or offering for sale, at retail to the public, lubricating oils and motor greases must conspicuously, clearly and distinctly place, and keep placed on each drum, tank, or other container from or in which such products are sold or offered for sale the name of the owner thereof and the name of the brand, trademark or trade name of each of such products sold or offered for sale therefrom.

(Acts 1932, Ex. Sess., No. 243, p. 241; Code 1940, T. 2, §418.)

§ 8-17-133 Removing Markings on Equipment, Etc

It shall be unlawful for any person to intentionally erase, deface, destroy, or otherwise remove without the consent of the owner thereof the name of the owner, the brand, trademark or trade name, or any word, figure or symbol placed on any pump, tank, container, or other equipment or property used in connection with the sale or distribution of any liquid motor fuel, lubricating oils, greases, or other similar petroleum products.

(Acts 1932, Ex. Sess., No. 243, p. 241; Code 1940, T. 2, §419.)

§ 8-17-134 Selling, Etc., Under Other Name; Adulteration of Products

It shall be unlawful for any person to sell, expose, or offer for sale any liquid motor fuel or any lubricating oil, grease, or other similar petroleum product under any name other than the name or trade name given thereto or designated therefor by the manufacturer or distributor thereof; nor shall any person adulterate the liquid motor fuels, lubricating oils, greases or other similar petroleum products sold or offered for sale under such trade name or trademark.

(Acts 1932, Ex. Sess., No. 243, p. 241; Code 1940, T. 2, §420.)

§ 8-17-135 Selling, Etc., Product Other Than That Indicated

It shall be unlawful for any person to store, keep, expose for sale, or sell from any tank, container, pump, or other distributing device or equipment any liquid motor fuel, lubricating oil, grease or other similar petroleum products other than those indicated by the brand, name, trademark, trade name, symbol, or sign of the manufacturer or distributor appearing upon the tank, pump, container, or other distributing equipment from which the same are sold, offered for sale or distributed.

(Acts 1932, Ex. Sess., No. 243, p. 241; Code 1940, T. 2, §421.)

§ 8-17-136 Changing Contents of Containers

It shall be unlawful for any person to deposit or deliver, or knowingly aid or assist in depositing or delivering, into any tank, receptacle, or other container, any liquid motor fuel, lubricating oil, grease or similar petroleum products other than those to be stored therein and distributed therefrom, as indicated by the brand, name, trade name, trademark, symbol or sign of the manufacturer or distributor appearing on the tank, pump, container, or other distributing equipment from which the same is sold, offered for sale or distributed.

(Acts 1932, Ex. Sess., No. 243, p. 241; Code 1940, T. 2, §422.)

§ 8-17-137 Imitation of Markings, Etc., of Others with Intent to Deceive

It shall be unlawful for any person to imitate the design, symbol, emblem, color scheme, trade name, or markings of any equipment used by any other marketer of petroleum products with the intent to deceive a purchaser as to the nature, source, quality or identity of any petroleum product sold by such person to the purchaser.

(Acts 1932, Ex. Sess., No. 243, p. 241; Code 1940, T. 2, §423.)

§ 8-17-138 Enforcement of Division

(a) The Commissioner of Agriculture and Industries shall enforce the provisions of this division.

(b) The provisions of Article 2, Chapter 2 of Title 2 shall be applicable to motor fuels, lubricating oil, grease and other similar petroleum products regulated by the provisions of this division.

(Acts 1977, No. 20, §2.)

§ 8-17-139 Penalty for Violation of Division

Any person who shall violate any of the provisions of this division shall be guilty of a misdemeanor.

(Acts 1932, Ex. Sess., No. 243, p. 241; Code 1940, T. 2, §424.)

Division 4 Posting Price and Tax

§ 8-17-150 “Motor Vehicle” Defined

The term “motor vehicle,” as used in this division, shall include all vehicles propelled by any power other than muscular power.

(Acts 1939, No. 607, p. 972, §3; Code 1940, T. 2, §425(3); Acts 1943, No. 596, p. 611, §3.)

§ 8-17-151 Purpose and Construction of Division

The purpose of this division is to render general information to the consuming public as to the amount of taxes levied by the several units of government upon the goods, wares and merchandise identified in this division, and nothing contained in this division shall be construed to convert any taxes levied on such goods, wares and merchandise into a consumer’s sales tax.

(Acts 1943, No. 596, p. 611, §6.)

§ 8-17-152 Posting of Price Required

It shall be unlawful for any person, firm, or corporation to sell or offer for sale at retail for use or consumption in any motor vehicle or to deliver into any motor vehicle for actual or apparent use therein any motor fuel for use in supplying, creating, or generating motive power to such motor vehicle unless such person, firm, or corporation shall conspicuously and plainly post on the pump from which delivery is made the price or prices of such product.

(Acts 1939, No. 607, p. 972, §1; Code 1940, T. 2, §425(1); Acts 1943, No. 596, p. 611, §1.)

§ 8-17-153 Jurisdiction in Enforcement of Division

District courts shall have original and concurrent jurisdiction along with the circuit courts of the state in the enforcement of this division.

(Acts 1939, No. 607, p. 972, §5; Code 1940, T. 2, §425(5); Acts 1943, No. 596, p. 611, §5.)

§ 8-17-154 Enforcement of Division

(a) The Commissioner of Agriculture and Industries shall enforce the provisions of this division.

(b) The provisions of Article 2, Chapter 2 of Title 2 shall be applicable to the provisions of this division.

(Acts 1977, No. 20, §2.)

§ 8-17-155 Penalty for Violation of Division

A violation of this division shall constitute a misdemeanor, punishable upon conviction as provided by law.

(Acts 1939, No. 607, p. 972, §4; Code 1940, T. 2, §425(4); Acts 1943, No. 596, p. 611, §4.)

Article 6 Turpentine

§ 8-17-170 Standards

(a) No person shall sell or take orders for sale and delivery within this state any “oil of turpentine,” or so-called “spirits of turpentine,” “turpentine,” or “turps,” unless the same is wholly volatile oil derived from the oleo-resinous exudation from, or the resinous wood of, various species of coniferous trees.

(b) It shall also be deemed a violation of this article if oil of turpentine does not conform to the standard specifications for turpentine as appearing in the latest biennial issue of the “A.S.T.M. Standards” issued by the American Society for Testing Materials.

(Ag. Code 1927, §204; Code 1940, T. 2, §446.)

§ 8-17-171 Labeling Requirements Generally

No person shall sell any oil of turpentine unless it is exposed for sale or sold under its true name and each original unbroken tank car, tank, barrel, keg, or vessel containing such oil has distinctly and durably marked thereon the true name of such oil as well as the name and place of business of the manufacturer thereof, in ordinary bold-faced capital letters not less than 60 points in size.

(Ag. Code 1927, §205; Code 1940, T. 2, §447.)

§ 8-17-172 Sale of Substitutes; Labeling of Tanks, Etc., Containing Substitutes

(a) No person shall sell or take orders for sale and delivery within this state any compound or mixture of oil of turpentine with other products or any product which is intended to be used as a substitute for oil of turpentine unless it is exposed for sale and sold under the name “substitute for oil of turpentine.”

(b) If the word “turpentine” is used other than in the name, the true name of each and every ingredient of such product shall also appear, giving preference of order to the ingredients present in the greater proportion; but all letters used in naming the ingredients shall be of the same size and color, using the style of type as specified in subsection (c) of this section.

(c) Each tank car, tank, barrel, keg, can, jug, or vessel, both wholesale and retail, and all storage receptacles containing such product shall be distinctly and durably marked in a conspicuous place, using the English language and kind of type as specified in this subsection giving the name under which it is sold, the names of ingredients when required and the name and place of business of the manufacturer or jobber thereof in continuous list with no intervening matter of any kind, using ordinary bold-faced capital letters not less than 60 points in size, and there shall be such a contrast between the color of the type and the background of the label as to render the same easily and plainly legible.

(Ag. Code 1927, §206; Code 1940, T. 2, §448.)

§ 8-17-173 Enforcement of Article; Rules and Regulations; Applicability of Section 2-2-30, Et Seq

(a) The Commissioner of Agriculture and Industries, through the facilities of the state Department of Agriculture and Industries, shall enforce the provisions of this article. In addition, the commissioner may make and adopt rules pursuant to the Administrative Procedure Act as he or she deems necessary to carry out this article and may establish a filing fee for reimbursement of expenses and costs.

(b) The provisions of Article 2, Chapter 2 of Title 2 shall be applicable to turpentine regulated by the provisions of this article.

(Act 2004-516, p. 996, §1.)

§ 8-17-174 Penalty for Violation of Article

(a) Any failure to label any article as specified in this article, any erasures, defacements or carelessness in printing or stamping labels, any statement regarding the composition of any article as required or any statements of any kind which are misleading or deceptive or which are not true shall constitute a misdemeanor.

(b) Any person violating any other provision of this article shall be guilty of a misdemeanor and, upon conviction, shall be fined not more than $500 and may also be sentenced to hard labor for not more than six months.

(Ag. Code 1927, §§207, 611; Code 1940, T. 2, §§12, 449.)

Article 7 Liquefied Petroleum Gas

§ 8-17-190 Weighing or Metering of Liquefied Petroleum Gas Upon Purchase; Issuance to Purchaser or Agent of Invoice as to Amount Purchased

(a) All liquefied petroleum gas which is purchased from gas fields in Alabama shall be either metered or weighed and an invoice showing the amount of gas purchased shall be given to the purchaser or his agent.

(b) Any person who violates subsection (a) of this section shall be guilty of a misdemeanor.

(Acts 1977, No. 576, p. 763, §§ 1, 2.)

Article 8 Fireworks

§ 8-17-210 Definitions

As used in this article, the following terms shall have the meanings ascribed to them in this section, unless clearly indicated otherwise:

(1) AERIAL DEVICES. Any type of D.O.T. Class C Consumer Fireworks listed in the APA 87-1, Sections 3.1.2 and 3.5.

(2) ANNUAL RETAILER. Any person engaged in the business of making sales of fireworks to consumers within this state throughout the entire calendar year from January 1 through December 31.

(3) APA 87-1. The 2001 American Pyrotechnics Standard for Construction and Approval for Transportation of Fireworks, Novelties, and Theatrical Pyrotechnics.

(4) AUDIBLE GROUND DEVICES. Any type of D.O.T. Class C Consumer Fireworks listed in APA 87-1, Section 3.1.3.

(5) DISTRIBUTOR. Any person engaged in the business of making sales of fireworks for resale to all holders of the required Alabama permits who in turn resells to any permit holder; or any person who receives, brings, or imports any fireworks of any kind into the State of Alabama, except to a holder of an Alabama manufacturer’s or distributor’s permit.

(6) D.O.T. CLASS C CONSUMER FIREWORKS. All articles of fireworks as are now or hereafter classified as D.O.T. Class C 1.4G Consumer fireworks in the regulations of the U.S. Department of Transportation for the transportation of explosive and other dangerous articles, including aerial devices and audible ground devices.

(7) FIREWORKS SEASONS. The dates of June 20 through July 10 and December 15 through January 2 of each year shall be the only periods when seasonal retailers may sell fireworks.

(8) MANUFACTURER. Any person engaged in the making, manufacture, or construction of fireworks of any kind within the State of Alabama.

(9) NFPA 1123. The National Fire Protection Association Code for Fireworks Display, as adopted by the State Fire Marshal.

(10) NOVELTIES. Any device listed in APA 87-1, Section 3.2, including, without limitation, the following:

a. Party poppers.

b. Snappers.

c. Toy smoke devices.

d. Snake, glow worms.

e. Wire sparklers, dipped sticks.

(11) PERMIT. The written authority of the State Fire Marshal issued under the authority of this article.

(12) PERSON. Includes any corporation, association, copartnership, or one or more individuals.

(13) SALE. An exchange of articles or fireworks for money, including barter, exchange, gift, or offer thereof, and each transaction made by any person, whether as principal proprietor, salesperson, agent, association, copartnership, or one or more individuals.

(14) SEASONAL RETAILER. Any person engaged in the business of making sales of fireworks to consumers within the State of Alabama during the fireworks season(s) only, from permanent buildings or temporary or moveable stands.

(15) SPARKLING DEVICES. Handheld or ground based sparkling devices that are non-explosive and non-aerial and contain 75 grams or less of chemical compound per tube or a total of 500 grams or less for multiple tubes and other sparkling devices that emit showers of sparks and sometimes a whistling, spinning, or crackling effect when burning, but does not include aerial devices, audible ground devices, or anything that will detonate or explode.

(16) SPECIAL FIREWORKS. All articles of fireworks that are classified as Class B 1.3G fireworks in the regulations of the U.S. Department of Transportation, including all articles classified as fireworks other than those classified as Class C.

(17) WHOLESALER. Any person engaged in the business of making sales of fireworks to any other person engaged in the business of making sales at seasonal retail.

(Acts 1981, No. 81-409, p. 638, §1; Acts 1987, No. 87-563, p. 876, §1; Act 2021-399, §1.)

§ 8-17-211 Permit for Manufacture, Sale, Etc., of Fireworks or Pyrotechnics for Use Before a Proximate Audience; Record of Sales; Enforcement

(a) It shall be unlawful for any person to manufacture, sell, offer for sale, or ship or cause to be shipped into or within the State of Alabama, except as herein provided, any item of fireworks or pyrotechnics for use before a proximate audience, without first having secured the required applicable permit, as a manufacturer, distributor, wholesaler, annual retailer, or seasonal retailer, from the State Fire Marshal. Possession of a permit is a condition prerequisite to manufacturing, selling, or offering for sale, or shipping or causing to be shipped any fireworks or pyrotechnics for use before a proximate audience into or within the State of Alabama, except as herein provided. This provision applies to nonresidents as well as residents of the State of Alabama. Mail orders where consumers purchase any fireworks or pyrotechnics for use before a proximate audience through the mail or receive any fireworks or pyrotechnics for use before a proximate audience in Alabama by mail, parcel service, or other carrier are prohibited. A sales clerk must be on duty to serve consumers at the time of purchase or delivery. All fireworks or pyrotechnics for use before a proximate audience sold and delivered to consumers within the State of Alabama must take place within the State of Alabama and be sold and delivered only by an individual, firm, partnership, or corporation holding the proper Alabama permit and all fireworks or pyrotechnics for use before a proximate audience coming into the state, manufactured, sold, or stored within the state shall be under the supervision of the State Fire Marshal as provided for in this article.

(b) Prior to engaging in the manufacture or sale within the State of Alabama, or shipment into the State of Alabama, of any fireworks or pyrotechnics for use before a proximate audience, each person making shipment or delivery or receiving any fireworks or pyrotechnics for use before a proximate audience into or within the State of Alabama, must make application on forms secured from the State Fire Marshal for a permit or permits required under this article for each location at which fireworks or pyrotechnics for use before a proximate audience are to be offered for sale.

(c) A manufacturer’s permit issued under this article shall be subject to rules adopted by the State Fire Marshal to govern the manufacture of fireworks or pyrotechnics for use before a proximate audience as in the judgment of the State Fire Marshal the public welfare may require.

(d) The decision of the State Fire Marshal as to what type of permit or permits shall be required of each person shall be final. The State Fire Marshal may deny a permit to an applicant or revoke a permit if the State Fire Marshal has knowledge or reason to believe the safety standards and conditions of this article are not or cannot be met by the applicant. No permit shall be issued to a person under the age of 18 years. All permits shall be for the calendar year or any fraction thereof and shall expire on December 31 of each year, two days of grace shall be allowed holders of permits after expiration thereof. Only one seasonal retailer permit shall be required for a full calendar year, and it shall be valid for both fireworks seasons, provided that the building is not moved from the location where it was originally permitted and no substantial structural or environmental changes have occurred. A seasonal retailer permit may be issued after July tenth for the remaining fireworks season of that calendar year. All permits issued must be displayed in their place of business. No permit provided for herein shall be transferable nor shall a person be permitted to operate under a permit issued to any other person or under a permit issued for another location, unless the transfer was approved by the State Fire Marshal. The holder of an annual retailer permit shall not be required to obtain a seasonal retailer permit.

(e) The State Fire Marshal shall charge for permits issued as follows:

(1) Manufacturer, three thousand dollars ($3,000).

(2) Distributor, three thousand dollars ($3,000).

(3) Wholesaler, one thousand dollars ($1,000).

(4) Annual Retailer:

a. Of aerial devices, sparkling devices, audible ground devices, and novelties, three hundred dollars ($300) per location.

b. Of only sparkling devices and novelties, one hundred fifty dollars ($150) per location.

c. Of only novelties, fifty dollars ($50) per location.

(5) Seasonal Retailer:

a. Of aerial devices, sparkling devices, audible ground devices, and novelties, three hundred dollars ($300) per location.

b. Of only sparkling devices and novelties, one hundred fifty dollars ($150) per location.

(6) Seasonal Retailer after July 10, one-half the permit fee indicated in subdivision (5).

(7) Display, application filed at least 10 business days before display date, seventy-five dollars ($75).

(8) Display, application filed less than 10 business days before display date, one hundred fifty dollars ($150).

(f) Only holders of an annual retailer or seasonal retailer permit may engage in the retail sale of aerial devices, sparkling devices, audible ground devices, and novelties, in any quantity, to consumers.

(g) A holder of a manufacturer’s permit is not required to have any additional permit or permits in order to sell to distributors, wholesalers, retailers, or seasonal retailers.

(h) A record of all sales by manufacturers, distributors, or wholesalers must be kept showing the names and addresses of purchasers. All fees collected for the permits shall be paid into the State Fire Marshal’s Fund for the enforcement of this article. The State Fire Marshal may designate a deputy fire marshal as the “fireworks enforcement officer” who shall direct enforcement of the state fireworks laws.

(i) The State Fire Marshal is charged with the enforcement of this article and may call upon any state or county or city peace officer for assistance in the enforcement of this article. The fire marshal is not authorized to adopt rules in conflict with or that go beyond the scope or intent of this article.

(j) Every five years, the State Fire Marshal may increase the fees by the percentage increase in the Consumer Price Index for all urban consumers as published by the U.S. Department of Labor, Bureau of Labor Statistics from the end of December 2020, to the end of the month preceding the month in which the fee increase is to be effective, rounded down to the nearest dollar. The increase may not exceed 2 percent per year.

(Acts 1981, No. 81-409, p. 638, §2; Acts 1987, No. 87-563, p. 876, §2; Act 2003-378, p. 1068, §1; Act 2021-399, §1.)

§ 8-17-212 Assignment and Utilization of Permit Numbers

The State Fire Marshal shall assign a number to each permit issued and each holder of a permit of any of the classes hereinabove provided shall imprint or affix the same to all purchase orders, delivery receipts, and invoices issued or used by each manufacturer, distributor, or wholesaler.

(Acts 1981, No. 81-409, p. 638, §3.)

§ 8-17-213 Requirement That Consignee Produce Permit, Etc., Prior to Delivery, Sale, Etc., of Fireworks; Requirement That Purchaser of Fireworks Obtain Proof That Seller Possesses Permit; Keeping of Records by Permit Holders

No person shall deliver, sell or ship fireworks into or within the State of Alabama unless the consignee produces the required permit or evidence that the consignee holds said permit. No person shall purchase fireworks from another person without first requiring proof that the proper permit required of the seller herein has been obtained and is current and valid. Each holder of a permit under the provisions of this article shall keep an accurate record of each shipment received. Each holder of a permit as distributor or wholesaler shall keep a record of each sale, delivery, or out shipment of fireworks. Such records shall be clear, legible, and accurate, showing the name and address of the seller or purchaser, item and quantity received or sold. Such records are to be kept at each place of business and shall be subject to examination by the State Fire Marshal or his deputies, who shall have the authority at any reasonable time to require any manufacturer, distributor, wholesaler, or retailer to produce records for the current year and the immediately preceding full calendar year.

(Acts 1981, No. 81-409, p. 638, §4.)

§ 8-17-214 Revocation of Permit for Reasons of Purchasing, Receiving, Etc., Illegal Fireworks; Notice of Revocation; Refusal to Issue New Permit to Holder Whose Permit Is Cancelled or Revoked

(a) The State Fire Marshal may revoke any permit issued under the provisions of this article upon evidence that the holder has purchased, received, sold, used, shipped, or caused to be shipped any illegal fireworks in violation of this article. Notice must be given in writing to the holder of a permit stating cause of revocation; if the permit revoked is for a business located within Alabama, a copy of said notice of revocation must be supplied to the judge of probate of the county in which such permit holder’s business is located.

(b) The State Fire Marshal, in his discretion, may refuse to issue another permit to the holder of a permit which has been cancelled or revoked for the possession or sale of illegal fireworks for a period not to exceed three years.

(Acts 1981, No. 81-409, p. 638, §5.)

§ 8-17-215 Effect of Article on State, County, and Municipal License Requirements; Requirement of Proof of Current and Valid Sales Tax Number

The issuance of the permit herein required does not replace or relieve any person of state, county or municipal privilege licenses as now or hereafter provided by law. Before the issuance of any state and county licenses, the judge of probate shall require each applicant for a fireworks license to exhibit a permit or furnish other definite and satisfactory evidence that a proper permit has been issued to the applicant by the State Fire Marshal and that said permit is current and valid. No permit shall be issued to any applicant who does not show proof of a current and valid sales tax number.

(Acts 1981, No. 81-409, p. 638, §6.)

§ 8-17-216 Permits for Sale, Use, Etc., of Special Fireworks for Public Displays

(a) Nothing in this article shall be construed as applying to the shipping, sale, possession, and use of special fireworks for public displays by holders of a permit for a public display to be conducted in accordance with the rules and regulations governing this type of fireworks by the Alcohol, Tobacco, and Firearms Division of the United States Treasury Department, and their requirements met and any permit or license required by them secured before application for a state display permit is made.

(b) Application for a state permit for public display of special fireworks must be made in writing to the State Fire Marshal at least 10 days before the display date. The State Fire Marshal may accept an application for a state permit for public display of special fireworks less than 10 days before the display date if accompanied by a fee of double the amount otherwise required. The application shall show that the proposed display is to be so located and supervised that it shall not be hazardous to property and that it shall not endanger human lives. If the display is to be performed within the limits of a municipality, the application shall so state and shall bear the signed approval of the chief supervisory officials of the fire and police departments of such municipality. Permits issued shall be limited to the time specified therein and shall not be transferable.

(c) Possession and sale of special fireworks shall be limited to a holder of a federal license issued for display fireworks. Possession of special fireworks for resale to holders of a permit for public display shall be confined to holders of a distributor’s permit only. Provided, however, a distributor’s permit shall not be required where the special fireworks are for public display to be performed solely for The Alabama June Jam, Inc.; and provided further that the application for the state permit for public display shall show that the proposed display is to be performed solely for The Alabama June Jam, Inc.

(d) Nothing in this article shall apply to Class C firework displays.

(Acts 1981, No. 81-409, p. 638, §7; Acts 1987, No. 87-151, p. 206, §1; Act 2003-378, §1.)

§ 8-17-216.1 Use of Pyrotechnics Before a Proximate Audience

(a) The use of pyrotechnics before a proximate audience shall comply with the requirements set out in the latest edition of the National Fire Protection Association’s Standard for the Use of Pyrotechnics Before a Proximate Audience (NFPA 1126) as shall be adopted by the State Fire Marshal. For purposes of this article, the term “proximate audience” shall mean an indoor audience closer to pyrotechnic devices than permitted by the National Fire Protection Association’s Code for Fireworks Display (NFPA 1123).

(b) No person shall use pyrotechnics before a proximate audience without first obtaining a permit from the State Fire Marshal. An application for a permit for the use of pyrotechnics at an event with a proximate audience shall be filed with the State Fire Marshal not less than 10 days prior to the planned date of the event. The State Fire Marshal may accept an application for a permit under this section less than 10 days before the planned date of the event if accompanied by a fee of double the amount otherwise required.

(c) The request for a permit under subsection (b) shall be in the form and manner prescribed by the State Fire Marshal. The permit shall be in addition to any locally required permit or approval.

(d) A fee of one hundred fifty dollars ($150) per event shall be submitted with each application.

(e) Where more than one event is to take place at the same location during the same calendar date, a separate application shall be filed for each event. The application fee for the second and subsequent events on the same calendar date shall be seventy-five dollars ($75) per event.

(f) The State Fire Marshal may prescribe additional requirements associated with the use of pyrotechnics before a proximate audience as are deemed necessary for the safety of property and persons present at the proximate event location.

(g) All pyrotechnics found at an event with a proximate audience that does not have a permit shall be confiscated and destroyed by the State Fire Marshal or his or her designee.

(h) All fees collected pursuant to this section shall be paid into the State Fire Marshal’s Fund for the enforcement of this article.

(i) Every five years, the State Fire Marshal may increase the fees by the percentage increase in the Consumer Price Index for all urban consumers as published by the U.S. Department of Labor, Bureau of Labor Statistics from the end of December 2020, to the end of the month preceding the month in which the fee increase is to be effective, rounded down to the nearest dollar. The increase may not exceed 2 percent per year.

(Act 2003-378, p. 1068, §2; Act 2021-399, §1.)

§ 8-17-217 Permissible Items of Fireworks

(a) It shall be unlawful for an individual, firm, partnership, or corporation to possess, sell, or use within the State of Alabama, or ship into the State of Alabama, except as provided in Section 8-17-216, any pyrotechnics commonly known as “fireworks” other than items now or hereafter classified as Class C consumer fireworks by the United States Department of Transportation, including, but not limited to, aerial devices, audible ground devices, sparkling devices, and novelties and those items that comply with the construction, chemical composition, and labeling regulations promulgated by the United States Consumer Product Safety Commission and permitted for use by the general public under their regulations.

(b) Permitted items designed to produce an audible effect are confined to small ground items which include firecrackers containing not over 50 milligrams of explosive composition and aerial devices containing not over 130 milligrams of explosive composition. Propelling or expelling charge consisting of a mixture of charcoal, sulfur, and potassium nitrate are not considered as designed to produce an audible effect.

(c) Items permitted and for which a permit is required shall include related items not classified by the United States Department of Transportation as consumer fireworks, but identified under their regulations as trick noisemakers, toy novelties, toy smoke devices and sparklers and shall include toy snakes, snappers, auto burglar alarms, smoke balls, smoke novelty items, and wire sparklers containing not over 100 grams of composition per item. Sparklers containing any chlorate or perchlorate salts may not exceed five grams of composition per item.

(Acts 1981, No. 81-409, p. 638, §8; Acts 1987, No. 87-563, p. 876, §3; Act 2021-399, §1.)

§ 8-17-218 Sale, Use, Etc., of Special Class B Commercial Type Ground Salutes

All items of fireworks which exceed the two grain limit of D.O.T. Class C consumer fireworks as to explosive composition, such items being commonly referred to as “illegal ground salutes” designed to produce an audible effect, are expressly prohibited from shipment into, manufacture, possession, sale, and use within the State of Alabama for any purpose. This section shall not affect display fireworks authorized by this article.

(Acts 1981, No. 81-409, p. 638, §9; Acts 1987, No. 87-563, p. 876, §4; Act 2021-399, §1.)

§ 8-17-219 Conformance of Permissible Items to Nomenclature of Section 8-17-217; Identification Marks on Items

No permissible article of fireworks or related items defined in Section 8-17-217 shall be sold, offered for sale or possessed within the state, or used within the state, except as provided in Section 8-17-216 unless it shall be properly named to conform to the nomenclature of Section 8-17-217. Items must be identified on the shipping cases and by imprinting on the article or retail sales container or unit “D.O.T. Class C Consumer Fireworks” or other appropriate classification or identification as may be applicable or required by any federal agency having jurisdiction over fireworks on related items; such imprint to be of sufficient size and so positioned as to be readily recognized by law enforcement authorities and the general public.

(Acts 1981, No. 81-409, p. 638, §10; Act 2021-399, §1.)

§ 8-17-220 Authorization for Retail Sales of Permissible Items of Fireworks; Items for Which Special Fireworks Permit at No Time Required

Permissible items of fireworks, defined in Section 8-17-217, may be sold at retail to residents of the State of Alabama. The term “fireworks” shall not include toy paper pistol caps which contain less than twenty-five hundredths grains of explosive compounds, model rockets, emergency signal flares, matches, trick matches, and cigarette loads, the sale and use of which shall be permitted at all times without a special fireworks permit.

(Acts 1981, No. 81-409, p. 638, §11; Act 2021-399, §1.)

§ 8-17-221 Requirements as to Storage, Display, Etc., of Fireworks; Retail Sales of Fireworks from Tents, Motor Vehicles, Etc.; Inspection by State Fire Marshal, Etc., of Premises Where Fireworks Are to Be Stored or Sold

(a) Placing, storing, locating, or displaying of fireworks in any window where the sun may shine through glass onto the fireworks so displayed or to permit the presence of lighted cigars, cigarettes, or pipes within 10 feet of where the fireworks are offered for sale is hereby declared unlawful and prohibited. At all places where fireworks are stored or sold, there must be posted signs with the words “FIREWORKS - NO SMOKING” in letters not less than four inches high.

(b) No fireworks shall be sold at retail at any permanent location where paints, oils or varnishes are for sale or use unless kept in the original unbroken containers, nor where gasoline or other flammable liquid or gas is used, stored or sold, if the use, storage, or sale creates an undue hazard to person or property. No fireworks shall be sold at retail from any temporary or moveable stand where paints, oils, or varnishes are for sale or use unless kept in the original unbroken containers, nor within 50 feet of where gasoline or other flammable liquid or gas is used, stored or sold.

(c) Any fireworks devices that are readily accessible to handling by consumers or purchasers must have their fuses protected in such a manner as to protect against accidental ignition of an item by a spark, cigarette ash or other ignition source. Safety type thread wrapped and coated fuses shall be exempt from this provision.

(d) No retail permit shall be issued for the sale of fireworks at retail from tents or from or in a motor vehicle or from a trailer towed by a motor vehicle. A permit may be issued for the sale of fireworks from a modular or mobile building when the structure is eight feet or more in width and thirty-two feet or more in length, from which all wheels have been removed and the structure placed on a non-mobile foundation. No permit shall be issued to an applicant for a previously unpermitted location, until the premises where fireworks are to be stored or sold have been inspected by the State Fire Marshal or his designated representative and it shall have been determined that such building and facilities within the building and facilities for storage meet reasonable safety standards for the storage and sale of permissible fireworks. Inspection is not required for renewal of permits at the same location to be operated by the same owner unless there has occurred substantial structure or environmental changes.

(Acts 1981, No. 81-409, p. 638, §12; Acts 1987, No. 87-563, p. 876. §5.)

§ 8-17-222 Sale, Etc., of Fireworks to Persons Under 16 or Intoxicated or Irresponsible Persons; Display of Identification by Persons Purchasing Fireworks; Acts Constituting Unlawful Explosion or Ignition of Fireworks

It shall be unlawful to offer for sale or to sell any fireworks to children under the age of 16 years unless accompanied by an adult or to any intoxicated or irresponsible person. Any person purchasing fireworks shall be required to show a valid driver’s license or state approved identification card. It shall be unlawful to explode or ignite fireworks within 600 feet of any church, hospital, asylum, public school, any enclosed building, or within 200 feet of where fireworks are stored, sold, or offered for sale. No person shall ignite or discharge any permissible articles of fireworks within or throw the same from a motor vehicle while within nor shall any person place or throw any ignited article of fireworks into or at such a motor vehicle, or at or near any person or group of people.

(Acts 1981, No. 81-409, p. 638, §13; Acts 1987, No. 87-563, p. 876, §6.)

§ 8-17-223 Applicability of Article

Nothing in this article shall be construed as applying to the manufacture, storage, sale or use of signals necessary for the safe operation of railroads or other classes of public or private transportation, nor as applying to the military or naval forces of the United States, or of this state or to peace officers, nor as prohibiting the sale or use of blank cartridges for ceremonial, theatrical or athletic events.

(Acts 1981, No. 81-409, p. 638, §14.)

§ 8-17-224 Penalty

Any individual, firm, partnership or corporation that violates any provisions of this article other than Section 8-17-218 shall be guilty of a Class A misdemeanor, and upon conviction shall be punished by a fine of not less than $100 or more than $1,000 or imprisoned for not less than 30 days, or more than, one year or both, in the discretion of the court. Any person convicted of manufacturing, shipping into, possessing, or selling any illegal fireworks described in Section 8-17-218 shall be guilty of a Class C felony and upon conviction shall be punished by a fine of not less than $500 nor more than $5,000 or imprisoned not less than one year and one day or more than 10 years, or both, in the discretion of the court.

(Acts 1981, No. 81-409, p. 638, §15; Acts 1987, No. 87-563, p. 876, §7.)

§ 8-17-225 Authority of State Fire Marshal to Seize and Destroy Illegal Fireworks

The State Fire Marshal shall seize as contraband any fireworks other than the permitted “Class C Consumer Fireworks” and related items defined in Section 8-17-217 or “special fireworks” for public displays as provided in Section 8-17-216, which are sold, displayed, used, or possessed in violation of this article. The State Fire Marshal may destroy any illegal fireworks so seized.

(Acts 1981, No. 81-409, p. 638, §16; Act 2021-399, §1.)

§ 8-17-226 Effect of Article on Validity of City Ordinances

(a) This article does not affect the validity of any city ordinance further restricting the sale or use of aerial devices and audible ground devices, including the authority to adopt ordinances related to aerial devices, sparkling devices, and audible ground devices in accordance with Section 11-45-9.1.

(b) A municipality may enact an ordinance further restricting the sale or use of sparkling devices or novelties. The State Fire Marshal shall keep a current listing of those municipalities that have enacted an ordinance further restricting the sale or use of sparkling devices or novelties. This subsection shall not affect any existing ordinance in a Class 1 municipality.

(c) Nothing in this section shall be construed to limit or restrict a municipality from including the revenue derived from the devices listed above from the gross receipts calculation used as the basis for a retailer’s existing business license as provided in Section 11-51-90.

(Acts 1981, No. 81-409, p. 638, §17; Acts 1987, No. 87-563, p. 876, §8; Act 2021-399, §1.)

Article 8A Pyrotechnic Displays

§ 8-17-230 Definitions

For the purposes of this article, the following terms shall have the following meanings:

(1) AMERICAN PYROTECHNICS ASSOCIATION. An association of the fireworks industry promoting safety and regulatory compliance in the design and use of legal fireworks.

(2) ASSISTANT. A person who works under the supervision of a pyrotechnic operator in accordance with NFPA 1123, NFPA 1126, and NFPA 160.

(3) CO-LEAD. A person who works under the supervision of a pyrotechnic operator in accordance with NFPA 1123, NFPA 1126, and NFPA 160 and is in training to become a pyrotechnic display operator or pyrotechnic special effects operator, or both.

(4) CONSUMER FIREWORKS. Small fireworks devices containing restricted amounts of pyrotechnic composition designed primarily to produce visible or audible effects by combustion that comply with the construction, chemical composition, and labeling regulations of the United States Consumer Product Safety Commission that are not being modified or used in any way other than as originally intended.

(5) DISPLAY FIREWORKS. Large fireworks devices that are explosive materials intended for use in fireworks displays and designed to produce visible or audible effects by combustion, deflagration, or detonation as well as consumer fireworks devices that are being modified and used in a way other than as originally intended.

(6) FIREWORKS. Any composition or device for the purpose of producing a visible or an audible effect for entertainment purposes by deflagration or detonation, that meets the definition of consumer fireworks or display fireworks as provided in NFPA 1123 or NFPA 1126.

(7) FIREWORKS DISPLAY. A presentation of fireworks for a public or private gathering.

(8) FLAME EFFECT. The combustion of solids, liquids, or gases utilizing atmospheric oxygen to produce thermal, physical, visual, or audible phenomena before an audience as defined by NFPA 160.

(9) LICENSE HOLDER. An individual employed by a company or organization, or self-employed, who holds a distributor permit in the state and whose employee is licensed as a pyrotechnic display operator or pyrotechnic special effects operator under this article and who is holding the license for a company or individual who is not licensed to conduct a fireworks display, proximate audience display, flame effect, or any other special effects.

(10) NATIONAL FIRE PROTECTION ASSOCIATION (NFPA). A United States trade association that creates and maintains private, copyrighted standards and codes for usage and adoption by local governments.

(11) NFPA 160. The National Fire Protection Association publication relating to standards for flame effects before an audience, as adopted by the State Fire Marshal.

(12) NFPA 1123. The National Fire Protection Association publication relating to a code for fireworks display, as adopted by the State Fire Marshal.

(13) NFPA 1126. The National Fire Protection Association publication relating to standards for the use of pyrotechnics before a proximate audience, as adopted by the State Fire Marshal.

(14) PROXIMATE AUDIENCE DISPLAY. A display in which the audience is closer to pyrotechnic devices than permitted by NFPA 1123.

(15) PYROTECHNIC DISPLAY OPERATOR. A person with overall responsibility for the operation and safety of a fireworks display in accordance with NFPA 1123 who is licensed under this article.

(16) PYROTECHNIC SPECIAL EFFECTS OPERATOR. A person who is responsible for pyrotechnic and special effects safety in accordance with NFPA 1126 and NFPA 160, who controls, initiates, or otherwise creates pyrotechnics and special effects, and is responsible for storing, setting up, and removing special effects, pyrotechnic materials, and devices after a performance.

(17) SUPERVISION. The direction and management of the activities of personnel in the safety, setup, handling, and display of an outdoor pyrotechnic display, a proximate audience display, a flame effect display, or any other use of pyrotechnics.

(Act 2018-464, §1.)

§ 8-17-231 Regulation and Licensing of Pyrotechnic Displays

(a) The State Fire Marshal shall regulate pyrotechnic displays and shall issue pyrotechnic display operator and pyrotechnic special effects operator licenses as provided in this article.

(b) A person may not provide a fireworks display without a pyrotechnic display operator license. An applicant for a pyrotechnic display operator license shall submit all of the following to the State Fire Marshal:

(1) Proof that the applicant is 21 years of age at the time of application.

(2) Proof of successful completion, with a passing score of 75 percent or greater, of an eight-hour training program approved by the State Fire Marshal for pyrotechnic display operators. The training program test shall be given under the supervision of a person appointed by the State Fire Marshal.

(3) Verifiable evidence of safe performances in active participation as a co-lead for at least six fireworks displays under the direct supervision of a competent licensed pyrotechnic display operator.

(4) Proof of a current Employer Possessor Letter of Clearance issued to the individual by the Bureau of Alcohol, Tobacco and Firearms.

(5) An application fee of one hundred twenty dollars ($120).

(c) Each pyrotechnic display operator licensee requesting renewal of his or her license shall submit proof of all of the following to the State Fire Marshal:

(1) Completion of an eight-hour continuing education training program approved by the State Fire Marshal for pyrotechnic display operators within the two-year license period. The training program shall be taught by an organization, display company, or individual approved by the State Fire Marshal.

(2) Active participation as a pyrotechnic display operator in the safe performance of at least two fireworks displays within the two-year license period.

(3) Proof of a current Employer Possessor Letter of Clearance issued to the individual by the Bureau of Alcohol, Tobacco and Firearms.

(4) A signed affidavit stating that the licensee has committed no felonies within the two-year license period.

(5) A renewal fee of one hundred twenty dollars ($120).

(d) A pyrotechnic display operator license shall expire two years after issuance, unless renewed before expiration.

(Act 2018-464, §2.)

§ 8-17-232 Pyrotechnic Special Effects License

(a) A person may not provide pyrotechnics display, special effects, and flame effects in which the audience is closer to the devices than permitted by NFPA 1123 or in compliance with NFPA 160, or both, without a pyrotechnic special effects operator license. An applicant for a pyrotechnic special effects license shall submit all of the following to the State Fire Marshal:

(1) Proof that the applicant is at least 21 years of age at the time of application.

(2) Proof of successful completion, with a passing score of 75 percent or greater, of a 16-hour proximate pyrotechnics training program approved by the State Fire Marshal for pyrotechnic special effects operators. The training program test shall be given under the supervision of a person appointed by the State Fire Marshal.

(3) Verifiable evidence of active participation as a co-lead in the safe performance of at least six proximate audience displays or flame effects, or both, under the direct supervision of a competent licensed pyrotechnic special effects operator.

(4) Proof of a current Employer Possessor Letter of Clearance issued to the individual by the Bureau of Alcohol, Tobacco and Firearms.

(5) An application fee of one hundred twenty dollars ($120).

(b) Each pyrotechnic special effects operator licensee requesting renewal of his or her license shall submit proof of all of the following to the State Fire Marshal:

(1) Completion of a 16-hour continuing education training program approved by the State Fire Marshal for pyrotechnic special effects operators within the two-year license period. The training program shall be taught by an organization, display company, or individual approved by the State Fire Marshal.

(2) Active participation as a pyrotechnic special effects operator in the safe performance of at least two proximate audience displays or flame effects, or both, within the two-year license period.

(3) Proof of a current Employer Possessor Letter of Clearance issued to the individual by the Bureau of Alcohol, Tobacco and Firearms.

(4) A signed affidavit stating that the licensee has committed no felonies in this state or another state within the two-year license period.

(5) A renewal fee of one hundred twenty dollars ($120).

(c) A pyrotechnic special effects operator license shall expire two years after issuance, unless renewed before expiration.

(Act 2018-464, §3.)

§ 8-17-233 Reciprocity

(a) The State Fire Marshal may license pyrotechnic display operators and pyrotechnic special effects operators by reciprocity. An applicant for a license by reciprocity shall be 21 years of age and satisfy the requirements of subsection (b) or subsection (c).

(b) For a pyrotechnic display operator license, the applicant shall submit all of the following to the State Fire Marshal:

(1) Proof of a current Employer Possessor Letter of Clearance issued to the individual by the Bureau of Alcohol, Tobacco and Firearms or consent to a criminal history background check by the State Fire Marshal.

(2) Proof of successful completion, with a passing score of 75 percent or greater, of an eight-hour training program approved by the State Fire Marshal for pyrotechnic display operators. The training program test shall be given under the supervision of a person appointed by the State Fire Marshal.

(3) Verifiable evidence of safe performances as an operator for at least six fireworks displays.

(4) A copy of the license of the applicant issued by the other state.

(5) A reciprocal license fee of one hundred twenty dollars ($120).

(c) For a pyrotechnic special effects operator license, the applicant shall submit all of the following to the State Fire Marshal:

(1) Proof of a current Employer Possessor Letter of Clearance issued to the individual by the Bureau of Alcohol, Tobacco and Firearms or consent to a criminal history background check by the State Fire Marshal.

(2) Proof of successful completion, with a passing score of 75 percent or greater, of a 16-hour proximate pyrotechnics training program approved by the State Fire Marshal for pyrotechnic special effects operators. The training program test shall be given under the supervision of a person appointed by the State Fire Marshal.

(3) Verifiable evidence of safe performances as an operator for at least six proximate audience displays.

(4) A copy of the license of the applicant issued by the other state.

(5) A reciprocal license fee of one hundred twenty dollars ($120).

(d) A reciprocal license shall expire two years after issuance, unless renewed before expiration.

(Act 2018-464, §4.)

§ 8-17-234 Use of Fireworks by Unlicensed Companies or Individuals

(a) An unlicensed company or individual that plans to conduct a fireworks display, proximate audience display, flame effects, or other special effects in this state using fireworks shall first hire a licensed pyrotechnic display operator or a pyrotechnic special effects operator to act as license holder and shall comply with all other state and federal laws.

(b) This section shall not apply to a person who is conducting an uncompensated display using only consumer fireworks on private property.

(Act 2018-464, §5.)

§ 8-17-235 Use of Hazardous Explosive Materials for Entertainment Purposes

The use of hazardous explosive materials for entertainment purposes not directly referenced in this article is prohibited unless approved by the State Fire Marshal prior to use.

(Act 2018-464, §6.)

§ 8-17-236 Licensing of Certified Lead Technicians

(a) Any person who is certified as a lead technician by the State Fire Marshal on or before June 1, 2018, may apply to the State Fire Marshal under this article for a pyrotechnic display operator license or a pyrotechnic special effects operator license. The application shall be submitted before midnight on December 31, 2019, and shall satisfy the requirements of subsection (b) or subsection (c), as applicable.

(b) For a pyrotechnic display operator license, the applicant shall submit all of the following to the State Fire Marshal:

(1) Proof of completion of an eight-hour training program approved by the State Fire Marshal for pyrotechnic display operators.

(2) Proof of a current Employer Possessor Letter of Clearance issued to the individual by the Bureau of Alcohol, Tobacco and Firearms or consent to a criminal history background check by the State Fire Marshal.

(3) A completed affidavit or other documentation confirming that the applicant has no felony convictions in this state or another state.

(4) A completed license application packet.

(5) An application fee of one hundred twenty dollars ($120).

(c) For a pyrotechnic special effects operator license, the applicant shall submit all of the following to the State Fire Marshal:

(1) Proof of completion of 16-hour training program approved by the State Fire Marshal for pyrotechnic special effects operators.

(2) Proof of a current Employer Possessor Letter of Clearance issued to the individual by the Bureau of Alcohol, Tobacco and Firearms or consent to a criminal history background check by the State Fire Marshal.

(3) A completed affidavit or other documentation confirming that the applicant has no felony convictions.

(4) A completed license application packet.

(5) An application fee of one hundred twenty dollars ($120).

(Act 2018-464, §7.)

§ 8-17-237 Validity of License; Disposition of Fees

(a) A pyrotechnics display operator license or pyrotechnic special effects operator license issued under this article authorizes the holder to act pursuant to that license until the license is suspended, revoked, or not renewed. Upon the suspension or revocation of a license, or the failure to renew a license, the licensee shall return the license to the State Fire Marshal. Each license is valid for two years, unless suspended or revoked.

(b) All fees collected pursuant to this article shall be deposited in the State Treasury to the credit of the State Fire Marshal’s Fund authorized in Section 36-19-31. The State Fire Marshal may expend monies from the State Fire Marshal’s Fund for the administration and enforcement of this article.

(Act 2018-464, §8; Act 2021-399, §1.)

§ 8-17-238 Violations

Any individual, firm, partnership, or corporation that violates this article shall be guilty of a Class A misdemeanor.

(Act 2018-464, §9.)

§ 8-17-239 Construction of Article

This article shall be read in pari materia with Article 8, commencing with Section 8-17-210, of Chapter 17, Title 8.

(Act 2018-464, §10.)

Article 9 Explosives

§ 8-17-240 Short Title

This article shall be known and may be cited as the “Alabama Explosives Safety Act of 1993.”

(Acts 1993, No. 93-713, p. 1391, §1.)

§ 8-17-241 Definitions

The following words and phrases used in this article shall have the following meanings:

(1) ACT. Alabama Explosives Safety Act of 1993.

(2) BLAST. The firing or detonating of explosives.

(3) BLASTER. A person qualified by reason of training, knowledge, and experience to design, supervise, or detonate explosives in blasting operations, who has obtained a valid blaster certification card issued by the office.

(4) BLASTING CONTRACTOR. A person employed, hired, or contracted by a client or other person to plan, organize, supervise, and conduct blasting operations.

(5) BLASTING OPERATION. The use of explosives in the blasting of stone, rock, or any other natural formation, or in any construction, quarry work, or demolition of man-made structures.

(6) BLASTING PRIVILEGES. Blasting certification, blasting contractor licensing, and blasting permits.

(7) EXPLOSIVES. Any chemical compound or other substance or mechanical system intended for the purpose of producing an explosion, or that contains oxidizing and combustible units, or other ingredients, in such proportions or quantities that ignition by detonation may produce an explosion, capable of causing injury to persons or damage to property.

(8) ISSUING AUTHORITY. A municipality or other governmental entity authorized to issue permits and conduct the duties provided by this article.

(9) LICENSE. An authorization issued pursuant to Section 8-17-247 that identifies persons eligible to do business as a blasting contractor or a quarry operator where explosives will be involved in blasting operations.

(10) OFFICE. The State Fire Marshal’s Office.

(11) PERMIT. A municipal explosives use permit.

(12) SEISMOGRAPH. An instrument designed to measure and record the surface vibrations produced by blasting in three mutually perpendicular (transverse, vertical, and longitudinal) directions. The instrument may also have the capability of measuring and recording air blast over-pressure produced by blasting.

(Acts 1993, No. 93-713, p. 1391, §2.)

§ 8-17-242 Rules and Regulations; Orders; Employment of Personnel and Purchasing of Equipment

(a) In addition to any other legal powers, the State Fire Marshal may adopt, amend, suspend, repeal, and enforce reasonably necessary rules and regulations governing the use of explosives in the blasting of stone, rock, or any other natural formation, or in any construction, quarry work, or demolition of man-made structures. The rules and regulations adopted shall not be more stringent than those promulgated by federal law, rule, or regulation to control surface coal mining operations. The rules and regulations may apply to the state as a whole or may vary from area to area in order to take into account varying local conditions.

(b) The authority granted to the State Fire Marshal shall not extend to surface coal mining operations, which shall continue to be regulated by the Alabama Surface Mining Commission, pursuant to the Alabama Surface Mining Control and Reclamation Act [Chapter 16 (commencing with Section 9-16-2) of Title 9].

(c) The office may issue reasonable orders as necessary to implement the purposes of this act and to enforce this act through appropriate administrative and judicial proceedings.

(d) The office may employ personnel and consultants, purchase equipment and supplies, and lease or otherwise acquire property as may be reasonably necessary to perform its duties under this article.

(Acts 1993, No. 93-713, p. 1391, §3.)

§ 8-17-243 Blaster Certification

(a) Every person engaged in any use of explosives regulated by this article shall apply for and obtain certification from the office prior to using any explosives. No person shall detonate explosive materials or supervise the conduct of blasting operations unless that person has obtained certification from the office.

(b) The following persons are eligible for certification:

(1) Any person who is 21 years of age or older, with not less than two years’ experience as a blaster in this state, may be certified without examination up to one year from October 1, 1993. The applicant shall furnish proof of experience satisfactory to the office.

(2) Any person engaged in any use of explosives regulated by this article on October 1, 1993, shall have one year after October 1, 1993, to obtain a blaster certification required under this article.

(3) After this article has been in effect for one year, any person who is 21 years of age or older with two or more years of experience as a blaster may be certified only by passing a written comprehensive examination given by the office relating to the use of explosives.

(4) Certifications may be granted by the office to any person holding a certification from another state, provided that the requirements for a certification in that state are equivalent to, or more stringent than, those of the State of Alabama, as determined by the State Fire Marshal.

(c) No person may detonate explosive materials or supervise the conduct of a blasting operation unless that person has obtained a certification card from the office.

(d) Each person certified shall pay a one hundred dollars ($100) fee to the office.

(e) Certification shall expire one year following the date of its issuance, or renewal, and shall become invalid unless renewed by payment of the certification fee.

(Acts 1993, No. 93-713, p. 1391, §4; Act 2003-378, §1.)

§ 8-17-244 Refusing, Suspending, Revoking, or Failing to Renew Certification

(a) A person may be refused certification, a duly issued blaster certification may be suspended or revoked, or the renewal of certification may be refused by the office if it finds that the applicant for, or the holder of, the certification:

(1) Has violated this article or any other state or federal law relating to explosives, or has violated any regulation duly promulgated by the office.

(2) Has misrepresented or concealed any material fact in the application for a certificate, or identification card, or any document filed in support of those documents.

(3) Has permitted any employee of the person, either by direct instruction or by reasonable implication, to violate this article.

(4) Has been convicted by final judgment in any state or federal court of a felony.

(5) Has been terminated from employment due to possessing or being under the influence of intoxicants, or possessing or using illegal drugs.

(6) Has used explosives in an unsafe manner.

(b) Prior to the office refusing, suspending, revoking, or failing to renew a blaster certification card, the office shall notify the applicant or holder of a blaster certification card of the specific reason or reasons for the intended action. The applicant or holder of a blaster certification card shall have 10 days after receipt of the notice to respond to the office notice of proposed action by filing a written notification to the office and requesting a hearing before the office pursuant to the rules of the office.

(c) The office shall have 10 days after its receipt of the applicant’s or the holder’s response to either take the proposed action or issue the blaster certification card and notify the blaster of the decision. If the blaster disagrees with the action taken by the office, a hearing for the purpose of reconsidering the matter shall be set within 30 days of the action of the office.

(Acts 1993, No. 93-713, p. 1391, §5.)

§ 8-17-245 Office May Reissue Certification Card

In the event a blaster certification card is revoked, suspended, or the original application for certification is denied, the office may reissue a blaster certification card provided that all requirements of this article have been met.

(Acts 1993, No. 93-713, p. 1391, §6.)

§ 8-17-246 Records to Be Maintained on Blasting Operations

(a) A record of each blast shall be kept in accordance with rules and regulations promulgated by the office.

(b) It is unlawful for any person to make any false entry in any record required to be kept by this section.

(Acts 1993, No. 93-713, p. 1391, §7.)

§ 8-17-247 Blasting Contractor License

(a) Unless otherwise exempted by this article, no person shall engage in blasting or other use of explosives for commercial purposes, without first obtaining a blasting contractor license. Any person desiring to be licensed or desiring a renewal of an existing license as a blasting contractor in this state shall make and file with the office a written application on a form prescribed by the office. The office shall have 30 days to investigate and review the application, and either issue or deny a license. A denial shall state the reasons why the license was not issued and what corrective action, if any, may be taken.

(b) The license shall expire one year following the date of its issuance or renewal and shall become invalid, unless renewed by payment of the license fee.

(c) A fee of two thousand dollars ($2,000) shall be paid to the office by any person issued a license under this section.

(d) No person with a blaster certification card may conduct any blasting operations which require certification and licensure under this article unless the person has, or is employed by an employer who has a blasting contractor license.

(Acts 1993, No. 93-713, p. 1391, §8; Act 2003-378, §1.)

§ 8-17-248 Municipal Explosives Use Permit

(a) No person, unless otherwise exempted by this article, shall engage in blasting or other use of explosives for commercial purposes without first obtaining a municipal explosives use permit from the appropriate local issuing authority. The appropriate local issuing authority for the municipal explosives use permit shall be the municipality within police jurisdiction of which the proposed blasting would take place. Copies of all permits shall be forwarded to the office.

(b) The issuing authority shall issue permits in accordance with this article and the rules and regulations promulgated by the office.

(c) Terms of the permit shall be effective for one year or at the termination of the commercial purpose, whichever occurs first, with the right of successive renewal upon expiration of the terms of the permit unless the permit has been suspended or revoked.

(d) The issuing authority shall collect a municipal explosives use permit fee of $25 to be paid by each applicant to cover the expense of the municipality for processing and issuing the municipal explosives use permit.

(e) No municipal explosives use permit shall be issued unless the applicant has liability insurance with a company licensed to do business as an insurer in this state in an amount not less than $500,000 with identical limits for explosion, collapse, and underground coverage to protect the public against property damage and personal injury. This insurance shall be continued in effect during the period of the permit.

(Acts 1993, No. 93-713, p. 1391, §9.)

§ 8-17-249 Suspension or Revocation of Certification or License for Certain Actions

(a) The office may suspend or revoke the certification or license of any person issued under this article who is found guilty of any fraud or deceit in obtaining a certification or license, or gross negligence, incompetence, or gross misconduct in the conduct of blasting activities. The office may file charges of fraud, deceit, negligence, incompetence, or misconduct against any licensed person or firm. The charges shall be made in writing and the charged party shall have at least 10 days notice of the date of a formal hearing. A time and place for the hearing shall be fixed by the office, and a copy of the charges, along with the notice of time and place of hearing, shall be legally served on the person at least 10 days prior to the date of the hearing. At the hearing, the accused shall have the right to produce evidence or witnesses in his or her defense. If, after the hearing, the State Fire Marshal finds the person in violation, the office shall suspend or revoke the certification or license. The accused shall have a right to appeal the hearing to the circuit court of the county of residence of the person pursuant to the laws of civil procedure.

(b) The office may reissue a license to any person whose license has been suspended or revoked, provided the person complies with this article, and the rules and regulations promulgated by the office.

(c) The issuing authority, upon a final and binding decision of the State Fire Marshal, may reissue certification to any person whose certification has been suspended or revoked, provided the person complies with this article and the rules and regulations promulgated by the office.

(Acts 1993, No. 93-713, p. 1391, §10.)

§ 8-17-250 Variations from Requirements

(a) The office may approve variations from the requirements of this article where it finds, as the result of a written request, that an emergency exists and that the proposed variations:

(1) Are reasonable and necessary.

(2) Will not hinder the effective administration of the article.

(3) Will not be contrary to any other applicable state or federal law.

(4) Will not cause injury to any person or damage to public or private property.

(5) Are ordered by a circuit or district court judge after a hearing upon the record of the finding of the office.

(b) The office shall establish a fee not to exceed $50 to be paid by each applicant requesting a variation.

(Acts 1993, No. 93-713, p. 1391, §11.)

§ 8-17-251 Article Preempts Certain Ordinances and Regulations

This article is intended to and shall preempt and supersede all county, town, city, or municipal ordinances or regulations enacted after January 1, 1993, or which may be enacted in the future with respect to the subjects covered by this article. Any municipal ordinance regulating blasting or other use of explosives which was in effect on January 1, 1993, shall continue in effect. Any municipality with a more stringent ordinance or resolution relating to the use of explosives or on blasting activities in effect on January 1, 1993 is exempt from this article.

(Acts 1993, No. 93-713, p. 1391, §12.)

§ 8-17-252 Inspection Where Reasonable Belief of Violation; Notification; Citation; Civil Action for Relief

(a) Whenever the office or local issuing authority has reason to believe that any person has engaged in, or is engaging in, or is about to engage in, any practice or activity that is prohibited by this article, the office or issuing authority shall conduct an inspection of the blasting operations and may order the permittee to monitor blast effects, with seismographic readings, unless the same information is available to the office or issuing authority as a result of a previous inspection.

(b) When, on the basis of an inspection by the office or issuing authority or seismic monitoring, it is determined by the office or issuing authority that any person is in violation of any requirements of this article, and the violation creates an imminent danger to the health, or safety of the public, or private property, the local issuing authority shall immediately notify the office of the violation. The office may immediately order a cessation of the blasting operation. The order shall remain in effect until the office determines that the condition, practice, or violation has been abated.

(c) When it is determined by the office that any person is in violation of any requirement of this article, and the violations can be reasonably expected to create a danger to the health or safety of the public or private property, the office may issue a citation to the person in violation. If, upon expiration of the period of time as originally fixed in the citation, the abatement of the violation has not been accomplished, the office may order a cessation of the blasting operation. Those orders shall remain in effect until modified, vacated, or terminated by the office or a competent court of law.

(d) Citations and orders issued under this section shall set forth with specific explanation the nature of the violation and the corrective action required. The citation or order shall be served or delivered promptly to the person in violation of this article.

(e) The office may institute a civil action for relief including a permanent or temporary injunction, restraining order, or any other appropriate relief in the circuit court for the county in which the blasting operation is located, whenever that person:

(1) Violates, fails, or refuses to comply with any reasonable order issued by the office under this article.

(2) Interferes with, hinders, or delays the office in carrying out this article.

(3) Refuses to permit entry to or inspection of the blasting operation by an authorized representative of the office.

(4) Refuses to furnish pertinent information required by the office under this article that is deemed necessary to implement this article. The court shall have jurisdiction to provide relief as may be appropriate.

(Acts 1993, No. 93-713, p. 1391, §13.)

§ 8-17-253 Penalty for Violation of Act

Any person found guilty of violating this article, or any reasonable rule or regulation promulgated by the State Fire Marshal pursuant to this article, is subject to a penalty of up to $500 for each violation.

(Acts 1993, No. 93-713, p. 1391, §14.)

§ 8-17-254 Exceptions

(a) Nothing contained in this article shall apply to:

(1) Personnel of regular law enforcement agencies, military, or naval forces of the United States, or to the duly organized military force within the state, so long as these persons are acting within their respective official capacities and in the performance of official duties.

(2) The possession and storage of black powder, percussion caps, safety and pyrotechnic fuses, matches and friction primers, intended to be used solely for sporting, recreational, or cultural purposes in antique firearms, or antique devices as defined in Section 921(a)(16) of Title 18 of the United States Code.

(3) The possession and storage of smokeless powder, primers used for reloading rifles, or pistol cartridges, shot shells, percussion caps, and smokeless propellants intended for personal use.

(4) Coal mining.

(5) Public utilities.

(6) Railroads.

(7) The use of explosives for occasional personal agricultural blasting or other noncommercial use of explosives.

(8) The use of explosives for blasting tree stumps for forest products production.

(9) The use of explosives for oil and gas exploration purposes.

(10) The occasional use of explosives in highway construction or maintenance.

(11) Persons engaged in the homebuilding industry, the home remodeling industry, or the plumbing industry, or any combination of these industries.

(Acts 1993, No. 93-713, p. 1391, §15.)

§ 8-17-255 Disposition of Funds

All sums received through the payment of fees and the recovery of civil penalties, grants, and appropriations by the Legislature shall be deposited in the State Treasury and credited to the State Fire Marshal’s Fund authorized by Section 36-19-31. This fund shall be available to the State Fire Marshal for the operation of the State Fire Marshal’s Offices, including expenditure in the administration and enforcement of this article, Article 8, Article 8A, and Article 10, training, research programs, and to support fire safety and prevention programs. Provided, however, that no funds shall be withdrawn or expended except as budgeted and allocated according to Sections 41-4-80 to 41-4-96 and Sections 41-19-1 to 41-19-12, inclusive, and only in amounts as stipulated in the general appropriations bills or other appropriations bills. Any unencumbered and any unexpended balance of this fund remaining at the end of any fiscal year shall not lapse or revert to the General Fund, but shall be carried forward for the purposes of this article until expended.

(Acts 1993, No. 93-713, p. 1391, §16; Act 2021-399, §1.)

§ 8-17-256 Determining Compliance with Article

In determining compliance with this article, the authorized representatives of the State Fire Marshal or issuing authority shall have the right of entry to, upon, and through any premises, or the site of any permitted or unpermitted commercial blasting operation without advance notice. Upon entry, the person or persons shall immediately notify the blaster in charge at the blasting operation of his or her presence so that appropriate safety instructions, if any, may be communicated, so that persons may comply with all applicable federal and state safety regulations pertaining to persons in or about a blasting operation.

(Acts 1993, No. 93-713, p. 1391, §17.)

Article 10 Cigarette Ignition Propensity Standards

§ 8-17-270 Short Title

This article shall be known as the Reduced Cigarette Ignition Propensity Standards and Firefighter Protection Act.

(Act 2009-630, p. 1927, §1.)

§ 8-17-271 Definitions

As used in this article, the following terms shall have the following meanings:

(1) AGENT. Any person authorized by the Department of Revenue to purchase and affix stamps on packages of cigarettes.

(2) CIGARETTE. Any of the following:

a. Any roll of tobacco wrapped in paper or in any substance not containing tobacco.

b. Any roll of tobacco wrapped in any substance containing tobacco which, because of its appearance, the type of tobacco used in the filler, or its packaging and labeling, is likely to be offered to, or purchased by, consumers as a cigarette described in paragraph a.

(3) MANUFACTURER. Any of the following:

a. Any entity which manufactures or otherwise produces cigarettes or causes cigarettes to be manufactured or produced anywhere that the manufacturer intends to be sold in this state, including cigarettes intended to be sold in the United States through an importer.

b. Any entity that becomes a successor of an entity described in paragraph a.

(4) QUALITY CONTROL AND QUALITY ASSURANCE PROGRAM. The laboratory procedures implemented to ensure that operator bias, systematic and nonsystematic methodological errors, and equipment-related problems do not affect the results of the testing. The program ensures that the testing repeatability remains within the required repeatability values stated in subdivision (6) of subsection (a) of Section 8-17-272 for all test trials used to certify cigarettes in accordance with this article.

(5) REPEATABILITY. The range of values within which the repeat results of cigarette test trials from a single laboratory will fall 95 percent of the time.

(6) RETAIL DEALER. Any person, other than a manufacturer or wholesale dealer, engaged in selling cigarettes or tobacco products.

(7) SALE. Any transfer of title or possession, or both, exchange or barter, conditional or otherwise, in any manner or by any means whatever or any agreement therefor. In addition to cash and credit sales, the giving of cigarettes as samples, prizes, or gifts, and the exchanging of cigarettes for any consideration other than money, are considered sales.

(8) SELL. To sell or to offer or agree to do the same.

(9) WHOLESALE DEALER. Any person, other than a manufacturer, who sells cigarettes or tobacco products to retail dealers or other persons for purposes of resale, and any person who owns, operates, or maintains one or more cigarette or tobacco product vending machines in, at, or upon premises owned or occupied by any other person.

(Act 2009-630, p. 1927, §2.)

§ 8-17-272 Testing and Certification of Cigarettes

(a) Except as provided in subsection (g), no cigarettes may be sold or offered for sale in this state or offered for sale or sold to persons located in this state unless the cigarettes have been tested in accordance with the test method and meet the performance standard specified in this section, a written certification has been filed by the manufacturer with the State Fire Marshal in accordance with Section 8-17-273, and the cigarettes have been marked in accordance with Section 8-17-274.

(1) Testing of cigarettes shall be conducted in accordance with the American Society of Testing and Materials (ASTM) Standard E2187-04, Standard Test Method for Measuring the Ignition Strength of Cigarettes.

(2) Testing shall be conducted on 10 layers of filter paper.

(3) No more than 25 percent of the cigarettes tested in a test trial in accordance with this section shall exhibit full-length burns. Forty replicate tests shall comprise a complete test trial for each cigarette tested.

(4) The performance standard required by this section shall only be applied to a complete test trial.

(5) Written certifications shall be based upon testing conducted by a laboratory that has been accredited pursuant to Standard ISO/IEC 17025 of the International Organization for Standardization (ISO), or other comparable accreditation standard required by the State Fire Marshal.

(6) Laboratories conducting testing in accordance with this section shall implement a quality control and quality assurance program that includes a procedure that will determine the repeatability of the testing results. The repeatability value shall be no greater than 0.19.

(7) This section does not require additional testing if cigarettes are tested consistent with this article for any other purpose.

(8) Testing performed or sponsored by the State Fire Marshal to determine a cigarette’s compliance with the performance standard required shall be conducted in accordance with this section.

(b) Each cigarette listed in a certification submitted pursuant to Section 8-17-273 that uses lowered permeability bands in the cigarette paper to achieve compliance with the performance standard set forth in this section shall have at least two nominally identical bands on the paper surrounding the tobacco column. At least one complete band shall be located at least 15 millimeters from the lighting end of the cigarette. For cigarettes on which the bands are positioned by design, there shall be at least two bands fully located at least 15 millimeters from the lighting end and 10 millimeters from the filter end of the tobacco column, or 10 millimeters from the labeled end of the tobacco column for non-filtered cigarettes.

(c) A manufacturer of a cigarette that the State Fire Marshal determines cannot be tested in accordance with the test method prescribed in subdivision (1) of subsection (a) shall propose a test method and performance standard for the cigarette to the State Fire Marshal. Upon approval of the proposed test method and a determination by the State Fire Marshal that the performance standard proposed by the manufacturer is equivalent to the performance standard prescribed in subdivision (3) of subsection (a), the manufacturer may employ the test method and performance standard to certify the cigarette pursuant to Section 8-17-273. If the State Fire Marshal determines that another state has enacted reduced cigarette ignition propensity standards that include a test method and performance standard that are the same as those contained in this article, and the State Fire Marshal finds that the officials responsible for implementing those requirements have approved the proposed alternative test method and performance standard for a particular cigarette proposed by a manufacturer as meeting the reduced cigarette ignition propensity standards of that state’s law or regulation under a legal provision comparable to this section, then the State Fire Marshal shall authorize that manufacturer to employ the alternative test method and performance standard to certify that cigarette for sale in this state, unless the State Fire Marshal demonstrates a reasonable basis why the alternative test should not be accepted under this article. All other applicable requirements of this section shall apply to the manufacturer.

(d) Each manufacturer shall maintain copies of the reports of all tests conducted on all cigarettes offered for sale for a period of three years, and shall make copies of these reports available to the State Fire Marshal and the Attorney General upon written request. Any manufacturer who fails to make copies of these reports available within 60 days of receiving a written request shall be subject to a civil penalty not to exceed ten thousand dollars ($10,000) for each day after the 60th day that the manufacturer does not make the copies available.

(e) The State Fire Marshal may adopt a subsequent ASTM standard test method for measuring the ignition strength of cigarettes upon a finding that the subsequent method does not result in a change in the percentage of full-length burns exhibited by any tested cigarette when compared to the percentage of full-length burns the same cigarette would exhibit when tested in accordance with ASTM Standard E2187-04 and the performance standard in subdivision (3) of subsection (a).

(f) The State Fire Marshal shall review the effectiveness of this section and report every three years to the Legislature the State Fire Marshal’s findings and, if appropriate, recommendations for legislation to improve the effectiveness of this article. The report and legislative recommendations shall be submitted no later than June 30th following the conclusion of each three-year period.

(g) The requirements of subsection (a) shall not prohibit any of the following:

(1) Wholesale or retail dealers from selling their existing inventory of cigarettes on or after January 1, 2010, if the wholesale or retail dealer can establish that state tax stamps were affixed to the cigarettes prior to January 1, 2010, and the wholesale or retail dealer can establish that the inventory was purchased prior to January 1, 2010, in comparable quantity to the inventory purchased during the same period of the prior year.

(2) The sale of cigarettes solely for the purpose of consumer testing. For purposes of this subsection, the term consumer testing shall mean an assessment of cigarettes that is conducted by a manufacturer, or under the control and direction of a manufacturer, for the purpose of evaluating consumer acceptance of the cigarettes, utilizing only the quantity of cigarettes that is reasonably necessary for the assessment.

(h) This article shall be so interpreted and construed as to effectuate its general purpose to make uniform this article with the laws of those states that have enacted reduced cigarette ignition propensity laws as of January 1, 2010.

(Act 2009-630, p. 1927, §3.)

§ 8-17-273 Manufacturer to Submit Written Certification; Recertification; Fee

(a) Each manufacturer shall submit to the State Fire Marshal a written certification attesting to each of the following:

(1) Each cigarette listed in the certification has been tested in accordance with Section 8-17-272.

(2) Each cigarette listed in the certification meets the performance standard set forth in Section 8-17-272.

(b) Each cigarette listed in the certification shall be described with the following information:

(1) Brand or trade name on the package.

(2) Style, such as light or ultra light.

(3) Length in millimeters.

(4) Circumference in millimeters.

(5) Flavor, such as menthol or chocolate, if applicable.

(6) Filter or non-filter.

(7) Package description, such as soft pack or box.

(8) Marking pursuant to Section 8-17-274.

(9) The name, address, and telephone number of the laboratory, if different than the manufacturer that conducted the test.

(10) The date that the testing occurred.

(c) The State Fire Marshal shall make the certifications available to the Attorney General for purposes consistent with this article and the Department of Revenue for the purposes of ensuring compliance with this section.

(d) Each cigarette certified under this section shall be recertified every three years.

(e) At the time a manufacturer submits a written certification under this section, the manufacturer shall pay to the State Fire Marshal a fee of one thousand dollars ($1,000) for each brand family of cigarettes identified in the certification. The fee paid shall apply to all cigarettes listed in the brand family identified in the certification and shall include any new cigarette certified within the brand family during the three-year certification period.

(f) If a manufacturer has certified a cigarette pursuant to this section, and thereafter makes any change to the cigarette that is likely to alter its compliance with the reduced cigarette ignition propensity standards required by this article, that cigarette shall not be sold or offered for sale in this state until the manufacturer retests the cigarette in accordance with the testing standards set forth in Section 8-17-272 and maintains records of that retesting as required by Section 8-17-272. Any altered cigarette which does not meet the performance standard set forth in Section 8-17-272 may not be sold in this state.

(Act 2009-630, p. 1927, §4.)

§ 8-17-274 Fire Standards Compliant Marking

(a) Cigarettes that are certified by a manufacturer in accordance with Section 8-17-273 shall be marked to indicate compliance with the requirements of Section 8-17-272. The marking shall be in eight point type or larger and consist of the letters FSC, which signifies Fire Standards Compliant, permanently printed, stamped, engraved, or embossed on the package at or near the UPC Code.

(b) A manufacturer shall use only one marking, and shall apply this marking uniformly for all packages including, but not limited to, packs, cartons, cases, and brands marketed by that manufacturer.

(c) Manufacturers certifying cigarettes in accordance with Section 8-17-273 shall provide a copy of the certifications to all wholesale dealers and agents to which they sell cigarettes. Wholesale dealers, agents, and retail dealers shall permit the State Fire Marshal, the Department of Revenue, the Attorney General, and their employees to inspect markings of cigarette packaging marked in accordance with this section.

(Act 2009-630, p. 1927, §5.)

§ 8-17-275 Violations

(a) A manufacturer, wholesale dealer, agent, or any other person or entity who knowingly sells or offers to sell cigarettes, other than through retail sale, in violation of Section 8-17-272, shall be subject to a civil penalty not to exceed one hundred dollars ($100) for each pack of the cigarettes sold or offered for sale provided that in no case shall the penalty against a person or entity for that violation exceed one hundred thousand dollars ($100,000) during any 30-day period.

(b) A retail dealer who knowingly sells or offers to sell cigarettes in violation of Section 8-17-272 shall be subject to a civil penalty not to exceed one hundred dollars ($100) for each pack of the cigarettes sold or offered for sale, provided that in no case shall the penalty against any retail dealer exceed twenty-five thousand dollars ($25,000) for sales or offers to sell during any 30-day period.

(c) In addition to any penalty prescribed by law, any corporation, partnership, sole proprietor, limited partnership, or association engaged in the manufacture of cigarettes that knowingly makes a false certification pursuant to Section 8-17-273 shall be subject to a civil penalty of at least seventy-five thousand dollars ($75,000) and not to exceed two hundred fifty thousand dollars ($250,000) for each false certification.

(d) Any person violating any other provision in this article shall be subject to a civil penalty for a first offense not to exceed one thousand dollars ($1,000), and for a subsequent offense subject to a civil penalty not to exceed five thousand dollars ($5,000) for each violation.

(e) Whenever any law enforcement personnel or duly authorized representative of the State Fire Marshal shall discover any cigarettes for which no certification has been filed as required by Section 8-17-273, or that have not been marked in the manner required by Section 8-17-274, such personnel is hereby authorized and empowered to seize and take possession of the cigarettes. Cigarettes seized pursuant to this section shall be destroyed, provided, however, that prior to the destruction of any cigarette seized pursuant to these provisions, the true holder of the trademark rights in the cigarette brand shall be permitted to inspect the cigarette.

(f) In addition to any other remedy provided by law, the Attorney General may file an action in circuit court for a violation of this article, including petitioning for preliminary or permanent injunctive relief against any manufacturer, importer, wholesale dealer, retail dealer, agent, or any other person or entity to enjoin such entity from selling, offering to sell, or affixing tax stamps to any cigarette that does not comply with the requirements of this article, or to recover any costs or damages suffered by the state because of a violation of this article, including enforcement costs relating to the specific violation and attorney’s fees. Each violation of this article or rules adopted under this article constitutes a separate civil violation for which the State Fire Marshal or Attorney General may obtain relief. Upon obtaining judgment for injunctive relief under this section, the State Fire Marshal or Attorney General shall provide a copy of the judgment to all wholesale dealers and agents to which the cigarette has been sold.

(Act 2009-630, p. 1927, §6.)

§ 8-17-276 Promulgation of Rules; Inspections

(a) The State Fire Marshal may promulgate rules pursuant to the Alabama Administrative Procedure Act necessary to effectuate the purposes of this article.

(b) The Department of Revenue in the regular course of conducting inspections of wholesale dealers, agents, and retail dealers, as authorized under Section 40-2-11, may inspect the cigarettes to determine if the cigarettes are marked as required by Section 8-17-274. If the cigarettes are not marked as required, the Department of Revenue shall notify the State Fire Marshal.

(Act 2009-630, p. 1927, §7.)

§ 8-17-277 Enforcement

To enforce this article, the Attorney General, the Department of Revenue, the State Fire Marshal, their duly authorized representatives, and other law enforcement personnel are hereby authorized to examine the books, papers, invoices, and other records of any person in possession, control, or occupancy of any premises where cigarettes are placed, stored, sold, or offered for sale, as well as the stock of cigarettes on the premises. Every person in the possession, control, or occupancy of any premises where cigarettes are placed, sold, or offered for sale is hereby directed and required to give the Attorney General, the Department of Revenue, the State Fire Marshal, their duly authorized representatives, and other law enforcement personnel the means, facilities, and opportunity for the examinations authorized by this section.

(Act 2009-630, p. 1927, §8.)

§ 8-17-278 Reduced Cigarette Ignition Propensity Standards and Firefighter Protection Act Fund

There is hereby established in the State Treasury a special fund to be known as the Reduced Cigarette Ignition Propensity Standards and Firefighter Protection Act Fund. The fund shall consist of all certification fees paid under Section 8-17-273 and monies recovered as penalties under Section 8-17-275. The monies shall be deposited to the credit of the fund and shall, in addition to any other monies made available for that purpose, be made available to the State Fire Marshal to support fire safety and prevention programs. All payments from the Reduced Cigarette Ignition Propensity Standards and Firefighter Protection Act Fund shall be made on the audit and warrant of the state Comptroller on vouchers certified and submitted by the State Fire Marshal.

(Act 2009-630, p. 1927, §9.)

§ 8-17-279 Cigarettes for Sale Outside State

Nothing in this article shall be construed to prohibit any person or entity from manufacturing or selling cigarettes that do not meet the requirements of Section 8-17-272 if the cigarettes are or will be stamped for sale in another state or are packaged for sale outside the United States and that person or entity has taken reasonable steps to ensure that the cigarettes will not be sold or offered for sale to persons located in this state.

(Act 2009-630, p. 1927, §10.)

§ 8-17-280 Federal Preemption

This article shall be repealed if a federal reduced cigarette ignition propensity standard that preempts this article is adopted and becomes effective.

(Act 2009-630, p. 1927, §11.)

§ 8-17-281 Relation to Local Provisions

This article preempts any local law, ordinance, or regulation that conflicts with any provision of this article or any policy of the state implemented in accordance with this article and, notwithstanding any other provision of law, a governmental unit of this state may not enact or enforce an ordinance, local law, or rule conflicting with or preempted by this article.

(Act 2009-630, p. 1927, §12.)

Article 11 Amusement Rides

§ 8-17-290 Adoption of ASTM International Standards

Unless inconsistent with any other provision of this article, the following ASTM International standards are adopted by reference:

(1) F770-22, Standard Practice for Ownership, Operation, Maintenance, and Inspection of Amusement Rides and Devices.

(2) F2376-22, Standard Practice for Classification, Design, Manufacture, Construction, and Operation of Water Slide Systems.

(3) F747-22, Standard Terminology Relating to Amusement Rides and Devices.

(Act 2023-246, §1.)

§ 8-17-291 Definitions

For the purposes of this article, the following terms have the following meanings:

(1) AMUSEMENT RIDE. A device or combination of devices or elements that carry, convey, or direct an individual over or through a fixed or restricted course or within a defined area for the primary purpose of amusement or entertainment, including, but not limited to, amusement railway rides, circular rides, concession go karts, flat rides, high rides, inflatable amusement devices, and kiddie rides as defined in ASTM F747-22. Amusement rides shall not include aerial trekking courses, canopy tours, challenge courses, fun karts, race karts, ropes courses, trampoline courts, or zip lines as defined in ASTM F747-22. Further, amusement rides shall not include coin-operated amusement rides, courses or facilities that include whitewater rafting, paddling, climbing, bouldering, or biking, or nonmechanized playground equipment.

(2) COIN-OPERATED AMUSEMENT RIDE. A single passenger coin-operated ride that is manually, mechanically, or electrically operated, customarily placed in a public location, and does not normally require the supervision of an operator.

(3) INFLATABLE AMUSEMENT DEVICE. An amusement ride or device designed for uses including, but not limited to, bouncing, climbing, sliding, or interactive play, made of flexible fabric, kept inflated by continuous air flow provided by one or more blowers, and reliant upon air pressure to maintain its shape. The term does not include mobile devices that are offered for rent or sale to the general public.

(4) NONMECHANIZED PLAYGROUND EQUIPMENT. Swings, seesaws, stationary spring-mounted animal features, rider-propelled merry-go-rounds, climbers, playground slides, physical fitness devices, and other similar items.

(5) OPERATOR. An individual in direct control of the starting, stopping, or speed of an amusement ride.

(6) OWNER. The individual, organization, or business entity responsible for the maintenance and operation of an amusement ride or water slide.

(7) QUALIFIED INSPECTOR. A professional engineer or inspector who is not employed by the owner and holds at a minimum a level 1 inspector certification from Amusement Industry Manufacturers and Suppliers International (AIMS International) or the National Association of Amusement Ride Safety Officials.

(8) WATER SLIDE. A ride intended for use by riders in bathing attire where the action of the ride involves possible or purposeful immersion of the rider’s body in water, either in whole or in part, and which uses circulating water to mobilize or lubricate the rider’s transportation along a pre-built path. A water slide includes slides used with or without vehicles, but does not include water slides installed at private residences, water flume amusement rides, log flume rides, lazy river-type attractions operating at a constant elevation and constructed in the ground, courses or facilities that include whitewater rafting or paddling, or slides where the change in elevation from the beginning to the end of the slide is less than fifteen feet.

(Act 2023-246, §2.)

§ 8-17-292 Annual Inspection; Certificate; Daily Pre-opening Inspection Requirements

(a) All amusement rides and water slides shall be inspected by a qualified inspector at least once every 12 months, measured from the date of issuance of the immediately preceding inspection certificate.

(b) Upon completion of a satisfactory inspection, a qualified inspector shall issue an inspection certificate to the owner of the amusement ride or water slide certifying that, in the qualified inspector’s reasonable judgment, the amusement ride or water slide substantially complies with all statutorily required ASTM standards and is reasonably safe for public use.

(c) No patron may be admitted to an amusement ride or water slide that has undergone a major modification until the amusement ride or water slide receives a new inspection certificate from a qualified inspector.

(d)(1) No amusement ride or water slide may be operated for the public if the amusement ride or water slide has not received an inspection certificate from a qualified inspector.

(2) If, using his or her reasonable judgment, a qualified inspector determines that an amusement ride or water slide is not reasonably safe for public use, the qualified inspector shall immediately notify the amusement ride or water slide’s owner of any unsafe condition.

(3) A qualified inspector shall not issue an inspection certificate for an unsafe amusement ride or water slide until the unsafe condition has been rectified to the satisfaction of the qualified inspector.

(e) Inspection fees shall be determined by each qualified inspector and paid by the owner of the amusement ride or water slide.

(f) In addition to the inspections by qualified inspectors required by this article, the owner of an amusement ride shall ensure that, at minimum, a daily pre-opening inspection is conducted on each amusement ride and water slide in accordance with the pre-opening inspection requirements of ASTM F770-22, ASTM F1193-22 Section 6, or ASTM F2376-22.

(g) Owners shall keep records of all inspections by qualified inspectors and pre-opening inspections for at least three years from the creation of each record.

(Act 2023-246, §3.)

§ 8-17-293 Liability Insurance

An owner of an amusement ride or water slide shall maintain, at all times during which the amusement ride or water slide is in operation for the public, liability insurance with an insurer authorized or approved to write such insurance in this state on the operation of the amusement ride or water slide providing coverage, subject to a limit, exclusive of interest and costs, of not less than one million dollars ($1,000,000) for bodily injury or death of one individual in each occurrence, and, subject to such limit for one individual, to a limit of not less than one million dollars ($1,000,000) for bodily injury or death of two or more individuals in each occurrence.

(Act 2023-246, §4.)

§ 8-17-294 Patron Obligations

(a) Patrons of an amusement ride or water slide shall do all of the following:

(1) Obey all posted signs, including, but not limited to, warning signs, instruction signs, and direction signs, pertaining to the amusement ride or water slide.

(2) Obey all verbal instructions from operators.

(3) Properly use all safety equipment on the amusement ride or water slide in accordance with the instructions of operators and posted signs.

(b) Patrons of an amusement ride or water slide may not do any of the following:

(1) Act in any manner that may cause or contribute to injury to self or others.

(2) Interfere with the operation of the amusement ride or water slide.

(3) Fail to engage any provided safety devices.

(4) Disconnect or disable a safety device, except at the express instruction of an operator.

(5) Extend arms or legs beyond the carrier or seating area, except at the express instruction of an operator.

(6) Throw, drop, or expel any object from or toward an amusement ride or water slide.

(7) Enter or exit an amusement ride or water slide, except at the designated time and area, at the express direction of an operator, or in an emergency.

(8) Unreasonably control the speed or direction of himself or herself if the amusement ride or water slide requires the patron to control or direct himself or herself.

(9) Ride any amusement ride or water slide while under the influence of alcohol or any other intoxicating substance.

(c) Any patron who violates this section shall be subject to immediate removal from the amusement facility without the refund of any admission charge.

(Act 2023-246, §5.)

§ 8-17-295 Exceptions

(a) This article shall not apply to sheriffs, recreational vehicle parks, as defined in Section 35-15-30, governmental entities, or summer camps.

(b) For the purposes of this article, “summer camps” include facilities providing lodging, meals, and educational and recreational opportunities, primarily for the benefit of children, students, and nonprofit organizations, and not members of the general public.

(c) For purposes of this article, “governmental entities” means the state or any political subdivision thereof, or any department, agency, board, commission, or authority of the state, or any such political subdivision, or any public corporation, authority, agency, board, commission, state colleges, or universities, or other governmental entity controlled by the state or any such political subdivisions. This definition shall be inclusive of both the singular and plural form of this term.

(Act 2023-246, §6.)

Article 12 Appliances

§ 8-17-310

(a) For the purposes of this section, the term “appliance” means an item used in the home for the performance of domestic chores or tasks, or used in a commercial or industrial setting for the performance of similar tasks, including, but not limited to, cooking, food storage, heating, cooling, washing, or drying, and the term “governmental entity” shall have the same meaning provided in Section 41-1-41.

(b) A governmental entity may not enact or enforce any resolution, ordinance, regulation, rule, code, program, or policy, or take any other action that restricts or prohibits, or has the effect of restricting or prohibiting, any person or other entity from acquiring or using any appliance solely based on the type of energy or energy generation used to operate the appliance.

(c) Nothing in this section shall be construed to limit a governmental entity’s authority to do any of the following:

(1) Regulate any entity providing energy or energy generation.

(2) Prohibit the use of any household appliance for an illegal purpose.

(3) Take actions to ensure that the usage of a household appliance complies with the manufacturer’s recommendations.

(4) Exercise existing authority to review or approve applications for building permits or to otherwise enforce building, fire, or other public safety codes or other regulations.

(Act 2024-72, §1.)

Chapter 18 Motion Picture Fair Competition

§ 8-18-1 Short Title

This chapter shall be known as the “Alabama Motion Picture Fair Competition Act.”

(Acts 1978, No. 591, p. 702, §2.)

§ 8-18-2 Definitions

As used in this chapter:

(1) PERSON. One or more individuals, partnerships, associations, societies, trusts, organizations or corporations.

(2) THEATRE. Any establishment in which motion pictures are exhibited to the public regularly for a charge.

(3) DISTRIBUTOR. Any person engaged in the business of distributing or supplying motion pictures to exhibitors by rental, sale or licensing.

(4) EXHIBITOR. Any person engaged in the business of operating one or more theatres.

(5) EXHIBIT or EXHIBITION. Showing a motion picture to the public for a charge.

(6) INVITATION TO BID. A written or oral solicitation or invitation by a distributor to one or more exhibitors to bid for the right to exhibit a motion picture.

(7) BID. A written offer or proposal by an exhibitor to a distributor in response to an invitation to bid for the right to exhibit a motion picture, stating the terms under which the exhibitor will agree to exhibit a motion picture.

(8) LICENSE AGREEMENT. Any contract, agreement, understanding or condition between a distributor and an exhibitor relating to the licensing or exhibition of a motion picture by the exhibitor.

(9) TRADE SCREENING. The showing of a motion picture by a distributor at the location of the film exchange that distributes his picture in Alabama, which is open to any exhibitor from whom the distributor intends to solicit bids or with whom the distributor intends to negotiate for the right to exhibit the motion picture.

(10) BLIND BIDDING. The bidding for, negotiating for or offering or agreeing to terms for the licensing or exhibition of a motion picture at any time before such motion picture has either been trade screened or before such motion picture, at the option of the distributor, otherwise has been made available for viewing by all exhibitors from whom the distributor is soliciting bids or with whom the distributor is negotiating for the right to exhibit such motion picture.

(11) RUN. The continuous exhibition of a motion picture in a defined geographic area for a specified period of time. A “first run” is the first exhibition of a picture in the designated area, a “second run” is the second exhibition and “subsequent runs” are subsequent exhibitions after the second run. An “exclusive run” is any run limited to a single theatre in a defined geographic area and a “nonexclusive run” is any run in more than one theatre in a defined geographic area.

(Acts 1978, No. 591, p. 702, §3.)

§ 8-18-3 Legislative Intent

The intent of this chapter is to establish fair and open procedures for the bidding and negotiation for the right to exhibit motion pictures within the state in order to prevent unfair and deceptive acts or practices and unreasonable restraints of trade in the business of motion picture distribution within the state, to promote fair and effective competition in that business and to insure that exhibitors have the opportunity to view a motion picture and know its contents before committing themselves to exhibiting it in their municipalities or towns.

(Acts 1978, No. 591, p. 702, §1.)

§ 8-18-4 Blind Bidding Prohibited; Notice of Trade Screening Required

(a) Blind bidding is hereby prohibited within the state. No bids shall be returnable, no negotiations for the exhibition or licensing of a motion picture shall take place and no license agreement or any of its terms shall be agreed to, for the exhibition of any motion picture, before the motion picture has either been trade screened or before such motion picture, at the option of the distributor, otherwise has been made available for viewing by all exhibitors from whom the distributor is soliciting bids or with whom the distributor is negotiating for the right to exhibit the motion picture.

(b) A distributor shall provide reasonable and uniform notice of the trade screening of any motion picture to those exhibitors from whom he intends to solicit bids or with whom he intends to negotiate for the right to exhibit that motion picture.

(c) Any purported waiver of the prohibition against blind bidding in this chapter shall be void and unenforceable.

(Acts 1978, No. 591, p. 702, §4.)

§ 8-18-5 Bidding Procedures

(a) If bids are solicited from exhibitors for the licensing of a motion picture within the state, then:

(1) The invitation to bid shall specify:

a. Whether the run for which the bid is being solicited is a first, second or subsequent run; whether the run is an exclusive or nonexclusive run; and the geographic area for the run;

b. The names of all exhibitors who are being solicited;

c. The date and hour the invitation to bid expires; and

d. The time, date and the location, including the address, where the bids will be opened.

(2) All bids shall be submitted in writing and shall be opened at the same time and in the presence of those exhibitors, or their agents, who submitted bids and are present at such time.

(3) Immediately upon being opened, the bids shall be subject to examination by exhibitors, or their agents, who submitted bids, and who are present at the opening. Within 10 business days after the bids are opened, the distributor shall notify each exhibitor who submitted a bid either the name of the winning bidder or the fact that none of the bids were acceptable.

(b) Once bids are solicited, the distributor shall license the picture only by bidding and may solicit rebids if he does not accept any of the submitted bids.

(Acts 1978, No. 591, p. 702, §5.)

§ 8-18-6 Award of Damages and Attorneys’ Fees in Civil Actions; Injunctive, Etc., Relief

In any civil action for damages against a person for violation of the provisions of this chapter, the court may award damages to the prevailing party and reasonable attorneys’ fees. The provisions of this chapter may be enforced by injunction or any other available equitable or legal remedy.

(Acts 1978, No. 591, §6.)

Chapter 19 Deceptive Trade Practices

§ 8-19-1 Short Title

This chapter shall be known and may be cited as the “Deceptive Trade Practices Act.”

(Acts 1981, No. 81-355, p. 510, §1.)

§ 8-19-2 Legislative Intent

The public health, welfare and interest require a strong and effective consumer protection program to protect the interest of both the consuming public and the legitimate businessperson.

(Acts 1981, No. 81-355, p. 510, §2.)

§ 8-19-3 Definitions

As used in this chapter, the following words and phrases shall have the meanings hereinafter ascribed to them:

(1) ATTORNEY GENERAL. The Attorney General of the State of Alabama or his or her duly designated representatives.

(2) BONA FIDE INVENTORY REPURCHASE PROGRAM. A program by which an entity repurchases from a salesperson current and marketable inventory in possession of the salesperson, on request and on commercially reasonable terms, when the salesperson’s business relationship is terminated.

(3) COMMERCIALLY REASONABLE TERMS. The repurchase of current and marketable inventory within 12 months after the date of purchase at not less than 90 percent of the original net cost, less appropriate set-offs and legal claims, if any.

(4) CONSUMER. Any natural person who buys goods or services for personal, family, or household use.

(5) CURRENT AND MARKETABLE. The term does not include inventory to which any of the following apply:

a. Is no longer within its commercially reasonable use or shelf-life period.

b. Was clearly described to salespersons prior to purchase as seasonal, discontinued, or special promotion products not subject to the plan or organization’s inventory repurpose program.

c. Has been used or opened.

(6) GOODS. Includes but is not limited to any property, tangible or intangible, real, personal, or any combination thereof, and any franchise, license, distributorship, or other similar right, privilege, or interest.

(7) INVENTORY. Includes both goods and services, including company-produced promotional materials, sales aids, and sales kits that an entity requires independent salespersons to purchase.

(8) INVENTORY LOADING. The requirement or encouragement by a plan or operation to have the independent salesperson of the plan or operation purchase inventory in an amount that exceeds the amount that the salesperson can expect to resell for ultimate consumption or to use or consume in a reasonable time period, or both.

(9) KNOW, KNOWING, KNOWINGLY, KNOWLEDGE, and KNEW. Either actual awareness or such awareness as a reasonable person should have considering all the surrounding circumstances.

(10) PERSON. Includes, but is not limited to, natural persons, corporations, trusts, partnerships, incorporated or unincorporated associations, and any other legal entity.

(11) PYRAMID PROMOTIONAL SCHEME. A plan or operation by which a person gives consideration for the opportunity to receive compensation that is derived primarily from the introduction of other persons into the plan or operation rather than from the sale or consumption of goods, services, or intangible property by a participant or other persons introduced into the plan or operation. The term includes any plan or operation under which the number of people who may participate is limited either expressly or by the application of conditions affecting the eligibility of a person to receive compensation under the plan or operation. The term also includes any plan or operation under which a person, on giving consideration, obtains goods, services, or intangible property in addition to the right to receive compensation.

(12) SALE, BUYING, and DISTRIBUTION. In addition to their ordinary meanings, include, but are not limited to, the act of leasing, renting, or consigning.

(13) SERVICES. Work, labor, and other services, including, but not limited to, services furnished in connection with the sale or repair of goods.

(14) TRADE or COMMERCE. Includes, but is not limited to, the advertising, buying, offering for sale, sale or distribution or performance of any service or goods, and any other article, commodity, or thing of value wherever situated and shall include any trade or commerce affecting the people of this state.

(Acts 1981, No. 81-355, p. 510, §3; Act 2021-349, §1.)

§ 8-19-4 Enforcement

(a) The office of the Attorney General and the district attorneys shall have the following functions, powers, and duties:

(1) Conduct preliminary investigations to determine the merit of complaints, provided, however, the office of the Attorney General or the district attorneys need not handle any complaint which lacks merit, has been made in bad faith, or may be readily resolved between the parties.

(2) Receive information and documentary material from complainants and take whatever action is appropriate in connection therewith as authorized by this chapter. The office of the Attorney General and the district attorneys may otherwise receive and investigate complaints with respect to acts or practices declared to be unlawful by this chapter, and inform the complainants with respect thereto. Said persons may institute legal proceedings or take such other actions provided for herein which are necessary or incidental to the exercise of its powers and functions.

(3) For the purpose of enforcing subdivision (23) of Section 8-19-5, share information with and request information from any federal agency and any other agency of any other state or any local agency thereof.

(b) Each department, agency, officer, or employee of the state shall cooperate with and assist the office of the Attorney General or a district attorney in the performance of its functions, powers, and duties. When a complaint is referred by the office of the Attorney General or a district attorney to a department, agency, officer, or employee of the state or a county, such entity shall, upon final disposition of the complaint, make a final report in writing to the office of the Attorney General or a district attorney describing the action taken and the final results of that action.

(c) Nothing contained in this chapter shall be deemed to delegate or detract in any way from the functions, powers, and duties prescribed by law for any other department or agency of the state, nor to interrupt or preclude the direct relationships of any such department or agency or units of county government in the performance of such functions, powers and duties, nor shall good faith compliance with any federal or state law or regulation be a violation of this chapter with respect to that specific act of compliance.

(d) Nothing contained in this chapter shall be deemed to supersede, take precedence over, or preempt any remedy, either criminal or civil, available to the Commissioner of Agriculture and Industries or the Board of Agriculture and Industries in the enforcement of those laws and regulations under the jurisdiction of the commissioner or the board.

(Acts 1981, No. 81-355, p. 510, §4; Act 2002-496, p. 1276, §1.)

§ 8-19-5 Unlawful Trade Practices

The following deceptive acts or practices in the conduct of any trade or commerce are hereby declared to be unlawful:

(1) Passing off goods or services as those of another, provided that this section shall not prohibit the private labeling of goods or services.

(2) Causing confusion or misunderstanding as to the source, sponsorship, approval, or certification of goods or services.

(3) Causing confusion or misunderstanding as to the affiliation, connection, or association with, or certification by another, provided that this section shall not prohibit the private labeling of goods or services.

(4) Using deceptive representations or designations of geographic origin in connection with goods or services.

(5) Representing that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits, or qualities that they do not have or that a person has sponsorship, approval, status, affiliation, or connection that he or she does not have.

(6) Representing that goods are original or new if they are deteriorated, reconditioned, reclaimed, used, secondhand, or altered to the point of decreasing their value or rendering the goods unfit for the ordinary purpose for which they were purchased, provided that this subdivision shall not apply to new goods which have been reconditioned, reclaimed, or repaired and such fact is disclosed to the purchaser.

(7) Representing that goods or services are of a particular standard, quality, or grade, or that goods are of a particular style or model, if they are of another.

(8) Disparaging the goods, services, or business of another by false or misleading representation of fact.

(9) Advertising goods or services with intent not to sell them as advertised.

(10) Advertising goods or services with intent not to supply reasonably expectable public demand unless the advertisement discloses a limitation of quantity.

(11) Making a false or misleading statement of fact concerning the reasons for, existence of, or amounts of, price reductions.

(12) Knowingly failing to identify flood, water, fire, or accidentally damaged goods as damaged goods if they are damaged to the point of decreasing their value or rendering the goods unfit for the ordinary purpose for which they were purchased, provided, that this subdivision shall not apply to accidentally damaged new goods where the goods are reconditioned, reclaimed, or repaired to substantially their original condition and such fact is disclosed to the purchaser.

(13) Knowingly making false or misleading statements of fact concerning the need for parts, replacement, or repair service.

(14) Misrepresenting the authority of a salesperson, representative, or agent to negotiate the final terms of a transaction.

(15) Disconnecting, turning back, replacing, or resetting the odometer of any motor vehicle so as to reduce the number of miles indicated on the odometer gauge with the intent of deception.

(16) Advertising of any sale by falsely representing that a person is going out of business.

(17) After receipt of payment for goods or services, failing to ship the goods or furnish such services within the time advertised or otherwise represented or, if no specific time is advertised or represented, failing to ship the goods or furnish such services within 30 days, unless within the applicable time period the seller provides the buyer with the option to either cancel the sales agreement and receive a refund of all previous payments to the seller or to extend the date to a specific date proposed by the seller. Any refund shall be mailed or delivered to the buyer within 10 business days after the seller receives written notification from the buyer of the buyer’s option to cancel the sales agreement and receive the refund.

(18) Using or employing a chain referral sales plan in connection with the sale or offering for sale of goods, merchandise, or anything of value, involving a sales technique, plan, arrangement, or agreement in which the buyer or prospective buyer is offered the opportunity to purchase merchandise or goods and in connection with the purchase receives the seller’s promise or representation that the buyer shall have the right to receive compensation or consideration in any form for furnishing to the seller the names of other prospective buyers, if the receipt of the compensation or consideration is contingent upon the occurrence of an event subsequent to the time the buyer purchased the goods, merchandise, or anything of value.

(19) Establishing, promoting, or operating a pyramid promotional scheme.

a. Nothing in this subdivision may be construed to prohibit a plan or operation, or to define a plan or operation, where the participants in the plan or operation give consideration in return for the right to receive compensation based upon purchases of goods, services, or intangible property for personal use, consumption, or resale if the plan or operation does not cause inventory loading and the plan or operation implements a bona fide inventory repurchase program.

b. A bona fide inventory repurchase program under this subdivision is subject to the following requirements:

1. The program shall be clearly described in its recruiting literature, sales manual, or contracts.

2. The recruiting literature, sales manual, or contracts shall disclose any inventory that is not eligible for repurchase under the program, including inventory that is beyond the commercially reasonable use or shelf life period or has been used or opened.

c. Before a repurchase of inventory is made, the entity operating the repurchase program shall clearly describe the inventory that is excluded from the entity’s bona fide repurchase program as seasonal, discontinued, or special promotion products and the inventory that is not subject to the entity’s bona fide inventory repurchase program.

(20) In connection with any seller-assisted marketing plan, either misrepresenting the amount or extent of earnings to result therefrom, or misrepresenting the extent or nature of the market for the goods or services, or both, sold or delivered in connection with the plan, or misrepresenting that the seller of the plan will repurchase all or part of the goods or services, or both, sold or delivered in connection with the plan, or failing to deliver goods or services, or both, within the time represented. As used herein, “seller-assisted marketing plan” includes any plan, scheme, or system in which for a consideration a buyer acquires goods or services, or both, together with a plan, scheme, or system for the resale of the goods or services, or both.

(21) Intentionally misrepresenting that a warranty or guarantee confers or involves certain rights or remedies.

(22) In selling a new motor vehicle, failing to disclose material damage to the motor vehicle as prescribed hereafter:

a. Each manufacturer, importer, or distributor of new motor vehicles sold or transferred to a motor vehicle dealer in this state, shall notify the motor vehicle dealer in writing prior to delivery of the vehicle of any material damage to the vehicle which is known to the manufacturer, importer, or distributor, and which was sustained or incurred by the motor vehicle at any time after the manufacturing process is complete but prior to delivery of the vehicle to the dealer.

b. In selling a new motor vehicle, each motor vehicle dealer in this state shall notify the purchaser in writing at the time of sale of any material damage to the vehicle which is known to the motor vehicle dealer and which was sustained or incurred by the motor vehicle at any time after the manufacturing process is complete, but prior to delivery of the vehicle to the purchaser.

c. For purposes of this section, “material damage” means damage sustained or incurred by a motor vehicle, whether corrected or uncorrected, which cost to repair exceeds three percent of the manufacturer’s suggested retail price of the vehicle based upon the dealer’s retail repair cost or the sum of five hundred dollars ($500), whichever is greater. Damage to tires, glass, bumpers, and in-dash audio equipment shall not be considered in determining the cost of repair if those components are replaced by identical manufacturer’s original equipment. The failure of a manufacturer, importer, distributor, or motor vehicle dealer to give notice of damage below the threshold constituting material damage shall not provide grounds for revocation of the sale nor shall such failure constitute a material misrepresentation or omission of fact.

d. Each manufacturer, importer, or distributor of new motor vehicles shall indemnify and hold harmless the motor vehicle dealer obtaining a vehicle from the manufacturer, importer, or distributor from and against any liability, including reasonable attorneys’ fees, which the motor vehicle dealer may have to the purchaser of the vehicle as a result of damage to the new motor vehicle which was known to the manufacturer, importer, or distributor, which occurred prior to delivery of the vehicle to the dealer, and which was not disclosed in writing to the dealer prior to delivery of the vehicle. This indemnity obligation of the manufacturer, importer, or distributor shall apply regardless of whether the damage constitutes material damage.

(23) Affixing an Alabama revenue stamp, including local municipal or county stamps, to, or upon, any package of cigarettes, or selling or holding for sale any package of cigarettes to which an Alabama revenue stamp, including local municipal or county stamps, has been affixed, if:

a. The package differs in any respect with the requirements of the Federal Cigarette Labeling and Advertising Act (15 U.S.C. § 1331, et seq.), for the placement of labels, warnings, or any other information upon a package of cigarettes that is to be sold within the United States;

b. The package is labeled “For Export Only,” “U.S. Tax Exempt,” “For Use Outside U.S.,” or similar wording indicating that the manufacturer did not intend that the product be sold in the United States;

c. The package, or a package containing individually stamped packages, has been altered by adding or deleting the wording, labels, or warnings described in paragraph a. or b. of this subdivision;

d. With respect to the cigarettes, any person is not in compliance with 15 U.S.C. § 1335a (relating to submission of ingredient information to federal authorities), 19 U.S.C. § 1681-1681b (relating to imports of certain cigarettes), 26 U.S.C. § 5754 (relating to previously exported tobacco products), or any other federal law or implementing federal regulations; or

e. The package in any way violates federal trademark or copyright laws.

For the purposes of this subdivision, the term “package” means a pack, carton, or container of any kind in which cigarettes are offered for sale, sold, or otherwise distributed, or intended for distribution, to consumers. Also for the purposes of this subdivision, the term “Alabama revenue stamp” means the stamp or stamps by the use of which the tax levied under Article 1 of Chapter 25 of Title 40, is paid.

(24) Engaging in the sale, distribution, possession, acquisition, importation, or transportation of any cigarettes that do not comply with all applicable requirements imposed by or pursuant to federal law and federal implementing regulations.

(25) Engaging in a scheme or artifice to defraud by telephone communication. For purposes of this subdivision, a “scheme or artifice to defraud” means a systematic, ongoing course of conduct with the specific intent to defraud one or more persons in order to obtain property from that person by a telephone communication; and “telephone communication” means the transmission of information by the use of the telephone, with the specific intent of defrauding a person by a material misrepresentation and obtaining property from that person as a result of the fraud. Puffing or puffery does not constitute a scheme or artifice to defraud.

(26) Making any communication by telephone directly to another person which offers to the other person a gift, award, or prize, where the person making the communication has actual knowledge at the time of making the communication that the communication was materially false and the person making the communication specifically intended to deprive the other person of real or personal property as a result of the false communication.

(27) Engaging in any other unconscionable, false, misleading, or deceptive act or practice in the conduct of trade or commerce.

(Acts 1981, No. 81-355, p. 510, §5; Acts 1993, No. 93-203, §1; Act 99-583, p. 1327, §1; Act 2000-712, p. 1509, §1; Act 2002-496, p. 1276, §1; Act 2021-349, §1.)

§ 8-19-6 Interpretation

It is the intent of the legislature that in construing Section 8-19-5, due consideration and great weight shall be given where applicable to interpretations of the Federal Trade Commission and the federal courts relating to Section 5(a)(1) of the Federal Trade Commission Act (15 U.S.C. 45(a)(1)), as from time to time amended.

(Acts 1981, No. 81-355, p. 510, §6.)

§ 8-19-7 Exemptions

Nothing in this chapter shall apply to:

(1) Acts done by the publisher, owner, agent or employee of a newspaper, periodical, radio, or television station or telephone company in the publication or dissemination of an advertisement, which the owner, agent, or employee did not have knowledge of the false, misleading or deceptive character of the advertisement;

(2) Any seller of goods or services who meets all the following requirements:

a. Has disseminated advertisement or promotional material from a manufacturer, packer, distributor, or other seller, from whom he has purchased the goods or services, unless the seller knew the advertisement or promotional material to be false or misleading; and

b. On the request of the Attorney General or district attorney, provides the name and address of the manufacturer, packer, distributor or other seller from whom he has purchased the goods or services; and

c. On the request of the Attorney General or district attorney, agrees in writing to discontinue dissemination of such false and misleading material;

(3) Any person or activity which is subject to the provisions of the Alabama Insurance Code, Title 27, as amended, or any bank or affiliate of a bank which is regulated by the State Banking Department of Alabama, the Comptroller of the Currency of the United States, Federal Deposit Insurance Corporation or the Board of Governors of the Federal Reserve System, or to any person or activity which is subject to the provisions of Title 10, Chapter 4, Article 6, or to the regulated activities of any utility, telephone company or railroad which is regulated by the Alabama Public Service Commission;

(4) Any violation of the Federal Consumer Credit Protection Act (15 U.S.C. §1601 et seq.);

(5) Any activity which is subject to the provisions of the Securities Act of Alabama, Chapter 6 of this title or to the provisions of the Sale of Checks Acts, Chapter 7 of this title; or to the provisions of Article 5 of Chapter 6 of this title (relating to a notification procedure for the issuance of certain industrial revenue bonds).

(6) For purposes of this section, the burden of proving exemption from the provisions of this chapter shall be upon the person claiming the exemption.

(Acts 1981, No. 81-355, p. 510, §7.)

§ 8-19-8 Restraining Orders

(a) Whenever the office of the Attorney General or the office of the district attorney has reason to believe that any person is engaging in, has engaged in or is about to engage in any act or practice declared to be unlawful by this chapter, the Attorney General or the district attorney may bring an action in the name of the state against such person to restrain by temporary restraining order, temporary or permanent injunction such acts or practices. However, unless the Attorney General or district attorney determines that a person subject to the provisions of this chapter designs quickly to depart from this state or to remove his property therefrom, or to conceal himself or his property therein, or to continue practices unlawful under this chapter, he shall, before initiating any legal proceedings is contemplated, allow such person a reasonable opportunity to appear before the Attorney General or district attorney and solve the dispute to the parties’ satisfaction.

(b) The court may appoint a master or receiver or order sequestration of assets whenever it shall appear that the defendant threatens or is about to remove, conceal, or dispose of his property to the damage of persons to whom restoration would be made, or whenever a person who has been ordered to make restitution under this section has failed to do so within three months after the order to make restitution has become final and nonappealable, and assess the expenses of the master or receiver against the defendant.

(c) Upon a showing to the court by the office of the Attorney General or the office of the district attorney that a person has engaged in continuous and willful violations of the provisions of this chapter, the court may suspend or revoke any license or certificate authorizing that person to engage in business in this state or the court may enjoin any person from engaging in business in this state.

(d) The penalties authorized under this section shall not apply to any person who shows by a preponderance of evidence that he had established reasonable procedures to comply with the provisions of this chapter.

(e) The court may grant such other appropriate relief as the court may determine.

(Acts 1981, No. 81-355, p. 510, §8.)

§ 8-19-9 Discovery of Information

Before any action is commenced, the Attorney General or the district attorneys may issue subpoenas to any person to appear and produce relevant papers, documents, and physical evidence, and administer an oath or affirmation to any person, in aid of any investigation or inquiry into possible violations of this chapter. Such subpoenas shall be served in accordance with the appropriate Alabama Rules of Civil Procedure. Upon failure of a person without lawful excuse to obey such subpoena, the Attorney General or district attorney may apply to a court of competent jurisdiction for an order compelling compliance. After an action is commenced, discovery may proceed in accordance with the Alabama Rules of Civil Procedure.

(Acts 1981, No. 81-355, p. 510, §9.)

§ 8-19-10 Private Right of Action

(a) Any person who commits one or more of the acts or practices declared unlawful under this chapter and thereby causes monetary damage to a consumer, and any person who commits one or more of the acts or practices declared unlawful in subdivisions (19) and (20) of Section 8-19-5 and thereby causes monetary damage to another person, shall be liable to each consumer or other person for:

(1) Any actual damages sustained by such consumer or person, or the sum of $100, whichever is greater; or

(2) Up to three times any actual damages, in the court’s discretion. In making its determination under this subsection, the court shall consider, among other relevant factors, the amount of actual damages awarded, the frequency of the unlawful acts or practices, the number of persons adversely affected thereby, and the extent to which the unlawful acts or practices were committed intentionally; and

(3) In the case of any successful action or counterclaim to enforce the foregoing liability or in which injunctive relief is obtained, the costs of the action or counterclaim, together with a reasonable attorney’s fee. On a finding by the court that an action or counterclaim under this section was frivolous or brought in bad faith or for the purpose of harassment, the court shall award to the defendant (or counterclaim-defendant) reasonable attorney’s fees and costs.

(b) The liability provided in this section may be enforced by counterclaim in an action arising from the same transaction without regard to the statute of limitations provided in Section 8-19-14.

(c) Any action under this section may be brought in the circuit court for the county in which the defendant resides, has his or her principal place of business, is doing business, or committed the unlawful act or practice.

(d) Upon commencement of any action brought under this section, the clerk of the court shall mail a copy of the complaint or other initial pleading to the office of the Attorney General and to the local district attorney and, upon entry of any injunction, judgment, or decree in the action, shall mail a copy of such injunction, judgment, or decree to the office of the Attorney General and to the local district attorney.

(e) At least 15 days prior to the filing of any action under this section, a written demand for relief, identifying the claimant and reasonably describing the unfair or deceptive act or practice relied upon and the injury suffered, shall be communicated to any prospective respondent by placing in the United States mail or otherwise. Any person receiving such a demand for relief who, within 15 days of the delivering of the demand for relief, makes a written tender of settlement which is rejected by the claimant may, in any subsequent action, file the written tender and an affidavit concerning this rejection. If the court finds that the relief tendered was sufficient to compensate the petitioner for his or her actual damages, the court shall not award any additional damages or attorney’s fees or costs to the petitioner. The demand requirements of this subsection shall not apply if the prospective respondent does not maintain a place of business or does not keep assets within the state, but such respondent may otherwise employ the provisions of this section by making a written offer of relief and paying the rejected tender into court as soon as practicable after receiving notice of an action commenced under this section. All written tenders of settlement such as described in this subsection shall be presumed to be offered without prejudice in compromise of a disputed matter.

(f) A consumer or other person bringing an action under this chapter may not bring an action on behalf of a class. The limitation in this subsection is a substantive limitation and allowing a consumer or other person to bring a class action or other representative action for a violation of this chapter would abridge, enlarge, or modify the substantive rights created by this chapter.

(g) Notwithstanding the limitation in subsection (f), only the office of the Attorney General or district attorney shall have the right and authority to bring action in a representative capacity on behalf of any named person or persons. In any such representative action brought by the office of the Attorney General or a district attorney, the court shall not award minimum damages or treble damages, but recovery shall be limited to actual damages suffered by the person or persons, plus reasonable attorney’s fees and costs.

(h) Any person who sells, distributes, or manufactures cigarettes and sustains direct economic or commercial injury as a result of a violation of subdivision (23) of Section 8-19-5 may bring an action in good faith for appropriate injunctive relief.

(Acts 1981, No. 81-355, p. 510, §10; Act 2002-496, p. 1276, §1; Act 2016-407, §1.)

§ 8-19-11 Penalties

(a) Any person who violates the terms of an injunction or order issued under this chapter shall forfeit and pay a civil penalty of not more than $25,000 per violation and shall be adjudged in contempt. For the purpose of this section, any circuit court issuing an injunction or order under this chapter shall retain jurisdiction, and in such cases the Attorney General or the district attorney acting in the name of the state may petition for recovery of such civil penalties.

(b) Any person who is knowingly engaging in or has knowingly engaged in any act or practice declared unlawful by Section 8-19-5 shall forfeit and pay a civil penalty of not more than $2,000 per violation upon petition by the Attorney General or a district attorney acting in the name of the state to the circuit court for the county in which the defendant resides, is doing business, or has his/her principal place of business, or the county in which the unlawful act or practice was or is being committed.

(c) Furthermore, upon a second or continuing violation of an injunction after imposition of the sanctions in subsection (a) of this section, and upon petition by the Attorney General or a district attorney, the circuit court of general jurisdiction of a county may, in its discretion, order the dissolution or suspension or forfeiture of the franchise of any corporation, partnership, or sole proprietorship which willfully violates the terms of any injunction issued under Section 8-19-8.

(d) The penalties authorized under this section shall not apply to any offender who shows by a preponderance of evidence that he had established reasonable procedures to comply with this chapter or with any injunction issued under Section 8-19-8.

(e) In any successful action or petition brought under this section, the court shall award the office of the Attorney General and/or the office of the district attorney reasonable attorney’s fees and costs.

(f) All penalties collected under this section shall be remitted by the circuit court to the state treasurer and shall be credited to the account of either the office of the Attorney General or the office of the district attorney, whichever initiated the action or petition resulting in imposition of such penalties.

(Acts 1981, No. 81-355, p. 510, §11.)

§ 8-19-12 Violations

(a) Any person who continuously and willfully violates any provision of this chapter shall be guilty of a Class A misdemeanor.

(b) In addition to any other penalties set forth in this chapter, a person who violates subdivision (23) of Section 8-19-5:

(1) Shall be guilty of a Class A misdemeanor.

(2) Shall be subject to the revocation of any license or permit pertaining to the sale or distribution of cigarettes or other tobacco products, including, but not limited to, any license or permit issued by the Commissioner of Revenue pursuant to Chapter 25 of Title 40.

(c) Notwithstanding any other provision of law, any law enforcement officer or agent of the Department of Revenue shall seize any cigarettes that are acquired, held, owned, possessed, transported in, imported into, or sold or distributed in this state in violation of subdivision (23) of Section 8-19-5. Any cigarettes so seized shall be deemed contraband goods and shall be confiscated and destroyed. Such cigarettes shall be deemed contraband goods whether the violation is knowing or otherwise.

(Acts 1981, No. 81-355, p. 510, §12; Act 99-583, p. 1327, §1; Act 2002-496, p. 1276, §1; Act 2009-503, p. 929, §1.)

§ 8-19-13 Defense

Any person against whom any civil action or proceeding is brought pursuant to this chapter shall have a defense to such action or proceeding upon a showing by a preponderance of the evidence presented that such person did not knowingly commit any act or knowingly engage in any activity which constitutes a violation of any provision of this chapter.

(Acts 1981, No. 81-355, p. 510, §13.)

§ 8-19-14 Statute of Limitations

No action may be brought under this chapter more than one year after the person bringing the action discovers or reasonably should have discovered the act or practice which is the subject of the action, but in no event may any action be brought under this chapter more than four years from the date of the transaction giving rise to the cause of action unless the contract or warranty is for more than three years. If the contract or warranty is for more than three years, no action may be brought more than one year from the expiration date of the contract or warranty or more than one year after the person bringing the action discovered or reasonably should have discovered the act or practice which is the subject of the action, whichever occurs first.

(Acts 1981, No. 81-355, p. 510, §14.)

§ 8-19-15 Savings Clause

(a) The civil remedies provided herein and the civil remedies available at common law, by statute or otherwise, for fraud, misrepresentation, deceit, suppression of material facts or fraudulent concealment are mutually exclusive. An election to pursue the civil remedies prescribed in this chapter shall exclude and be a surrender of all other rights and remedies available at common law, by statute or otherwise, for fraud, misrepresentation, deceit, suppression of material facts or fraudulent concealment arising out of any act, occurrence or transaction actionable under this chapter.

(b) An election to pursue any civil remedies available at common law, by statute or otherwise, for fraud, misrepresentation, deceit, suppression of material facts or fraudulent concealment arising out of any act, occurrence or transaction actionable under this chapter shall exclude and be a surrender of all rights and remedies available under this chapter. All other remedies, penalties or actions presently provided by statute or common law or hereafter provided for in any other law or rule of procedure are cumulative with the provisions, remedies and actions in this chapter and this chapter shall not be construed to repeal or supersede any law not inconsistent herewith.

(Acts 1981, No. 81-355, p. 510, §15.)

Chapter 19A Alabama Telemarketing Act

§ 8-19A-1 Short Title

This chapter may be cited as the “Alabama Telemarketing Act.”

(Acts 1994, No. 94-650, p. 1220, §1.)

§ 8-19A-2 Liberal Construction

The provisions of this chapter shall be construed liberally to promote the general welfare of the public and the integrity of the telemarketing industry.

(Acts 1994, No. 94-650, p. 1220, §2.)

§ 8-19A-3 Definitions

As used in this chapter and Chapter 19C, the following terms shall have the following meanings unless the context clearly indicates otherwise:

(1) CALLER IDENTIFICATION SERVICE. A type of telephone service which permits telephone subscribers to see the telephone number of incoming telephone calls.

(2) COMMERCIAL TELEPHONE SELLER. Any person who engages in commercial telephone solicitation on his or her own behalf or through salespersons, except that a commercial telephone seller does not include any of the persons or entities exempted from this chapter by Section 8-19A-4. A commercial telephone seller does not include a salesperson as defined in subdivision (15). A commercial telephone seller includes, but is not limited to, owners, operators, officers, directors, partners, or other individuals engaged in the management activities of a business entity pursuant to this chapter.

(3) COMMERCIAL TELEPHONE SOLICITATION.

a. An unsolicited telephone call to a person initiated by a commercial telephone seller or salesperson, or an automated dialing machine used in accordance with this chapter for the purpose of inducing the person to purchase or invest in consumer goods or services.

b. Other communication with a person where:

1. A gift, award, or prize is offered to a purchaser who has not previously purchased from the person initiating the communication.

2. A telephone call response is invited.

3. The salesperson intends to complete a sale or enter into an agreement to purchase during the course of the telephone call.

c. Other communication with a person which represents a price, quality, or availability of consumer goods or services and which invites a response by telephone or which is followed by a call to the purchaser by a salesperson. For purposes of this section, “other communication” means a written or oral notification or advertisement transmitted through any means. Also, for purposes of this section, “invites a response by telephone” does not mean the mere listing or including of a telephone number in a notification or advertisement.

(4) COMMISSION. The Alabama Public Service Commission.

(5) CONSUMER. An actual or prospective purchaser, lessee, or recipient of consumer goods or services.

(6) CONSUMER GOODS OR SERVICES. Any real property or any tangible or intangible personal property which is normally used for personal, family, or household purposes including, without limitation, any property intended to be attached to or installed in any real property, without regard to whether it is so attached or installed, as well as cemetery lots, timeshare estates and licenses, and any services related to the property.

(7) DIVISION. The Consumer Division of the Office of the Attorney General.

(8) DOING BUSINESS IN THIS STATE. Businesses conducting telephonic sales calls from a location in Alabama or from other states or nations to consumers located in Alabama.

(9) ENFORCING AUTHORITY. The division or the office of the district attorney if a violation of this chapter occurs in or affects the judicial circuit under the jurisdiction of the office of the district attorney.

(10) GIFT, AWARD, or PRIZE. A gratuity which the purchaser believes to be of value.

(11) INDIVIDUAL. A single human being but does not mean a firm, association of individuals, corporation, partnership, joint venture, sole proprietorship, or any other entity.

(12) MERCHANT. A person who, directly or indirectly, offers or makes available to consumers any consumer goods or services.

(13) PERSON. Any individual, group of individuals, firm, association, corporation, partnership, joint venture, sole proprietorship, or any other business entity.

(14) PURCHASER. A person who is solicited to become or does become obligated to a commercial telephone seller.

(15) SALESPERSON. Any individual employed, appointed, or authorized by a commercial telephone seller, regardless of whether the commercial telephone seller refers to the individual as an agent, representative, or independent contractor, who attempts to solicit or solicits a sale on behalf of the commercial telephone seller. A salesperson, however, does not include individuals exempted from this chapter by Section 8-19A-4 or employees or agents of persons exempted from this chapter by Section 8-19A-4, or companies and individuals under contract with persons exempted from this chapter by Section 8-19A-4 when liability is assumed by the exempt entity.

(16) TELEMARKETER or TELEPHONE SOLICITOR. Any natural person, firm, organization, partnership, association, or corporation, or a subsidiary or affiliate thereof, doing business in this state, who makes or causes to be made a telephonic sales call.

(17) TELEMARKETING or TELEPHONE SOLICITATION. A voice communication over a telephone line for the purpose of encouraging the purchase or rental of, or investment in property, goods, or services, but does not include communications by or on behalf of any of the exempt persons in Section 8-19A-4.

(18) TELEPHONE SOLICITATION CALL. A call made by a telephone solicitor to a consumer, for the purpose of soliciting a sale of consumer goods or services, or for the purpose of obtaining information that may be used for the direct solicitation of a sale of consumer goods or services or an extension of credit for consumer goods or services, or for the purpose of obtaining information that may be used for the direct solicitation of a sale of consumer goods or services or an extension of credit for such purposes.

(19) UNSOLICITED SOLICITATION SALES CALL. A telephonic sales call other than a call made to a person with whom the telephone solicitor has a prior or existing business relationship; or by a newspaper publisher or his or her agent or employee in connection with his or her business; or any of the exempt persons in Section 8-19A-4.

(Acts 1994, No. 94-650, p. 1220, §3; Act 99-450, p. 1043, §2.)

§ 8-19A-4 Exemptions

The provisions of this chapter do not apply to:

(1) A person engaging in commercial telephone solicitation where the solicitation is an isolated transaction and not done in the course of a pattern of repeated transactions of like nature.

(2) A person making calls for religious, charitable, political, educational, or other noncommercial purposes or a person soliciting for a nonprofit corporation if that corporation is properly registered with the Secretary of State and is included within the exemption of the Alabama Revenue Code or Section 501(c)(3) of the Internal Revenue Code or rural electric cooperatives formed under Chapter 6 of Title 37 of the Code of Alabama or affiliates or subsidiaries thereof.

(3) A person soliciting:

a. Without the intent to complete or obtain provisional acceptance of a sale during the telephone solicitation.

b. Who does not make the major sales presentation during the telephone solicitation.

c. Without the intent to complete, and who does not complete, the sales presentation during the telephone solicitation, but who completes the sales presentation at a later face-to-face meeting between the seller and the prospective purchaser. However, if a seller, directly following a telephone solicitation, causes an individual whose primary purpose it is to go to the prospective purchaser to collect the payment or deliver any item purchased, this exemption does not apply.

(4) Any licensed securities, commodities, or investment broker, dealer, or investment adviser, when soliciting within the scope of his or her license. As used in this section, “licensed securities, commodities, or investment broker, dealer, or investment adviser” means a person subject to license or registration by the Securities and Exchange Commission, by the National Association of Securities Dealers or other self-regulatory organization as defined by the Securities Exchange Act of 1934 (15 U.S.C. Section 781), or by an official or agency of this state or of any state, commonwealth or territory of the United States.

(5) Any licensed associated person of a securities, commodities, or investment broker, dealer, or investment adviser, when soliciting within the scope of his or her license. As used in this section, “licensed associated person of a securities, commodities, or investment broker, dealer, or investment adviser” means any associated person registered or licensed by the National Association of Securities Dealers or other self-regulatory organization as defined by the Securities Exchange Act of 1934 (15 U.S.C. Section 781), or by an official or agency of this state or of any state, commonwealth or territory of the United States.

(6) A person primarily soliciting the sale of a newspaper, periodical of general circulation, or magazine.

(7) A book, video, or record club or contractual plan or arrangement:

a. Under which the seller provides the consumer with a form which the consumer may use to instruct the seller not to ship the offered merchandise.

b. Which is regulated by the Federal Trade Commission trade regulation concerning “use of negative option plans by sellers in commerce.”

c. Which provides for the sale of books, records, or videos which are not covered under paragraph a. or paragraph b., including continuity plans, subscription arrangements, standing order arrangements, supplements, and series arrangements under which the seller periodically ships merchandise to a consumer who has consented in advance to receive the merchandise on a periodic basis.

(8) Any supervised financial institution or parent, subsidiary, or affiliate thereof. As used in this section, “supervised financial institution” means any commercial bank, trust company, savings and loan association, mutual savings bank, credit union, industrial loan company, consumer finance lender, commercial finance lender, or insurer, provided that the institution is subject to supervision by an official or agency of this state, of any state, or of the United States.

(9) Any licensed insurance broker, agent, customer representative, or solicitor when soliciting within the scope of his or her license. As used in this section, “licensed insurance broker, agent, customer representative, or solicitor” means any insurance broker, agent, customer representative, or solicitor licensed by an official or agency of this state or of any state of the United States licensed in accordance with the Alabama Insurance Code (Title 27).

(10) A person soliciting the sale of services provided by a cable television system operating under authority of a franchise or permit.

(11) A business-to-business sale where:

a. The commercial telephone seller has been operating continuously for at least three years under the same business name and has at least 50 percent of its dollar volume consisting of repeat sales to existing businesses.

b. The purchaser business intends to resell or offer for purposes of advertisement or as a promotional item the property or goods purchased.

c. The purchaser business intends to use the property or goods purchased in a recycling, reuse, remanufacturing, or manufacturing process.

(12) A person who solicits sales or advertising by periodically publishing and delivering a catalog, periodical, or magazine of the seller’s merchandise or ad purchasers, merchandise to prospective purchasers, if the catalog, periodical, or magazine:

a. Contains a written description or illustration of each item or service offered for sale.

b. Includes the physical, permanent business address or home address of the seller.

c. Includes at least 20 pages of written material and illustration and is distributed in more than one state.

d. Has an annual cumulative circulation by mailing of not less than 150,000.

(13) A person who solicits contracts for the maintenance or repair of goods previously purchased from the person making the solicitation or on whose behalf the solicitation is made.

(14) A telephone company or utility company which is regulated by the Alabama Public Service Commission, or any employee, officer, director, or authorized sales representative of such telephone company or utility company when soliciting products or services which would be subject to Public Service Commission regulation on behalf of such telephone company, utility company, or a Federal Communications Commission licensed cellular telephone company or affiliates or other bona fide radio telecommunication services provider. Provided, however, that such authorized sales representatives shall be subject to the same rules and regulations as the exempted company through the Public Service Commission.

(15) A person who is licensed pursuant to Chapter 13, Title 34, who is soliciting within the scope of the license.

(16) A person licensed pursuant to Section 8-19A-5 when soliciting pursuant to that license.

(17) An issuer or a subsidiary of an issuer that has a class of securities which is subject to Section 12 of the Securities Exchange Act of 1934 (15 U.S.C. Section 781) and which is either registered or exempt from registration under paragraph (A), paragraph (B), paragraph (C), paragraph (E), paragraph (F), paragraph (G), or paragraph (H) of subsection (g)(2) of that section.

(18) A business soliciting exclusively the sale of telephone answering services provided that the telephone answering services will be supplied by the solicitor.

(19) A person soliciting a transaction regulated by the Commodity Futures Trading Commission if the person is registered or temporarily licensed for this activity with the Commodity Futures Trading Commission under the Commodity Exchange Act (7 U.S.C. Section 1 et seq.) and the registration or license has not expired, or been suspended or revoked.

(20) A person soliciting the sale of food or produce if the solicitation neither intends to result in, or actually results in, a sale which costs the purchaser in excess of five hundred dollars ($500).

(21) A person soliciting business from prospective consumers who have an existing business relationship with or who have previously purchased from the business enterprise for which the solicitor is calling, if the solicitor is operating under the same exact business name.

(22) A person who has been operating, for at least one year, a retail business establishment under the same name as that used in connection with telemarketing, and both of the following occur on a continuing basis:

a. Either products are displayed and offered for sale or services are offered for sale and provided at the business establishment.

b. A majority of the seller’s business involves the buyer obtaining the products or services at the seller’s location.

(23) Any person who is duly licensed under Section 34-27-66.

(24) Any telephone marketing service company which provides telemarketing sales services under contract to sellers and has been operating continuously for at least five years under the same business name and 75 percent of its contracts are performed on behalf of persons exempted from this chapter by this section.

(25) A person or business soliciting the sale of an annual publication comprised of a biographical compilation of notable and distinguished individuals.

(Acts 1994, No. 94-650, p. 1220, §4; Acts 1994, 1st Ex. Sess., No. 94-769, p. 54, §1.)

§ 8-19A-5 Licensing; Application for License

(a) Prior to doing business in this state, a commercial telephone seller shall obtain a license from the division. Doing business in this state includes both telephone solicitation from a location in Alabama and solicitation from other states or nations of purchasers located in Alabama.

(b) An applicant for a license as a commercial telephone seller shall submit to the division, in the form prescribed, a written application for the license. The application shall set forth the following information:

(1) The true name, date of birth, driver’s license number, Social Security number, and home address of the applicant, including each name under which he or she intends to do business.

(2) Each business or occupation engaged in by the applicant during the three years immediately preceding the date of the application, and the location thereof.

(3) The previous experience of the applicant as a commercial telephone seller or salesperson.

(4) Whether the applicant has previously been arrested for, convicted of, or is under indictment or information for, a felony and, if so, the nature of the felony. Conviction includes a finding of guilt where adjudication has been withheld.

(5) Whether the applicant has previously been convicted of, or is under indictment or information for, racketeering or any offense involving fraud, theft, embezzlement, fraudulent conversion, or misappropriation of property. Conviction includes a finding of guilt where adjudication has been withheld.

(6) Whether there has ever been a judicial or administrative finding that the applicant has previously been convicted of acting as a salesperson without a license, or whether a license has previously been refused, revoked, or suspended in any jurisdiction.

(7) Whether the applicant has worked for, or been affiliated with, a company that has had entered against it an injunction, a temporary restraining order, or a final judgment or order, including a stipulated judgment or order, an assurance of voluntary compliance, or any similar document, in any civil or administrative action involving racketeering, fraud, theft, embezzlement, fraudulent conversion, or misappropriation of property or the use of any untrue, deceptive, or misleading representation or the use of any unfair, unlawful, or deceptive trade practice.

(8) Whether the applicant has had entered against him or her an injunction, a temporary restraining order, or a final judgment or order, including a stipulated judgment or order, an assurance of voluntary compliance, or any similar document, in any civil or administrative action involving racketeering, fraud, theft, embezzlement, fraudulent conversion, or misappropriation of property or the use of any untrue, deceptive, or misleading representation or the use of any unfair, unlawful, or deceptive trade practice; and whether or not there is any litigation pending against the applicant.

(9) The name of any parent or affiliated entity that:

a. Will engage in a business transaction with the purchaser relating to any sale solicited by the applicant.

b. Accepts responsibility or is otherwise held out by the applicant as being responsible for any statement or act of the applicant relating to any sale solicited by the applicant.

(10) The complete street address of each location, designating the principal location, from which the applicant will be doing business. If any location is a mail drop, this shall be disclosed.

(11) A list of all telephone numbers currently used or to be used by the applicant, with the address where each telephone having these numbers will be located.

(12) The true name, current home address, date of birth, Social Security number, and all other names by which each person below is now known, or was previously known:

a. Principal officer, director, trustee, shareholder, owner, or partner of the applicant, and every other person responsible for the management of the business of the applicant.

b. Office manager or other person principally responsible for a location from which the applicant will do business.

c. Salesperson(s) or other person(s) to be employed by the applicant.

(c) The application shall be accompanied by a copy of any: Script, outline, or presentation the applicant will require or suggest a salesperson to use when soliciting, or, if no document is used, a statement to that effect; sales information or literature to be provided by the applicant to a salesperson; and sales information or literature to be provided by the applicant to a purchaser in connection with any solicitation.

(d) When an application sets forth information regarding an applicant as described in subdivisions (4) to (8), inclusive, of subsection (b), the applicant shall:

(1) Identify the court or administrative agency rendering the conviction, judgment, or order against the person or pending litigation.

(2) Provide the docket number of the matter; the date of the conviction, judgment, or order; and the name of the governmental agency, if any, that brought the action resulting in the conviction, judgment, or order. The applicant shall also include all pending civil or criminal litigation.

(e) If the applicant is other than a natural person, or if any parent or affiliated entity is identified pursuant to subsection (b)(9), the applicant shall, for itself and any entity, identify its place of organization and:

(1) In the case of a partnership, provide a copy of any written partnership agreement.

(2) In the case of a corporation, provide a copy of its articles of incorporation and bylaws.

(f) An application filed pursuant to this chapter shall be verified and accompanied by:

(1) A bond, letter of credit, or certificate of deposit satisfying the requirements of Section 8-19A-10.

(2) An annual license fee in the amount of $500.00.

(g) The division shall issue a license number to all commercial telephone sellers.

(h) It is a violation of this chapter for a commercial telephone seller to:

(1) Fail to maintain a valid license.

(2) Advertise that one is licensed as a commercial seller or represent that the licensing constitutes approval or endorsement by any government or governmental office or agency.

(3) Provide inaccurate or incomplete information to the division when making a license application.

(4) Misrepresent that a person is registered or that a person has a valid license number.

(Acts 1994, No. 94-650, p. 1220, §5.)

§ 8-19A-6 Identification of Certain Affiliated Sellers or Salespersons

(a) With respect to any person identified pursuant to Section 8-19A-5, an applicant for a license as a commercial telephone seller shall state in his or her application the identity of any affiliated commercial seller or salesperson who:

(1) Has been convicted of, or is under indictment or information for, racketeering or any offense involving fraud, theft, embezzlement, fraudulent conversion, or misappropriation of property. Conviction includes a finding of guilt where adjudication has been withheld.

(2) Is involved in pending litigation or has had entered against him or her an injunction, a temporary restraining order, or a final judgment or order, including a stipulated judgment or order, an assurance of voluntary compliance, or any similar document, in any civil or administrative action involving racketeering, fraud, theft, embezzlement, fraudulent conversion, or misappropriation of property or the use of any untrue, deceptive, or misleading representation or the use of any unfair, unlawful, or deceptive trade practice.

(3) Is, or ever has been, subject to any litigation, injunction, temporary restraining order, or final judgment or order, including a stipulated judgment or order, an assurance of voluntary compliance, or any similar document or any restrictive court order relating to a business activity as the result of any action brought by a governmental agency, including any action affecting any license to do business or practice an occupation or trade.

(4) Has at any time during the previous seven years filed for bankruptcy, been adjudged bankrupt, or been reorganized because of insolvency.

(5) Has been a principal, director, officer, or trustee of, or a general or limited partner in, or had responsibilities as a manager in, any corporation, partnership, joint venture, or other entity that filed for bankruptcy, was adjudged bankrupt, or was reorganized because of insolvency within one year after the person held that position. The disclosures required in subdivision (4) shall be applicable insofar as they relate to the applicant commercial telephone seller, as well as any affiliated commercial seller or salesperson.

(b) (1) For any person described in subsection (a), the applicant shall:

a. Identify the court or administrative agency rendering the conviction, judgment, or order against the person or pending litigation.

b. Provide the docket number of the matter, the date of the conviction, judgment, or order, and the name of the governmental agency, if any, that brought the action resulting in the conviction, judgment, or order.

(2) For any person described in subdivision (5), the applicant shall provide the name and address of the person filing for bankruptcy, adjudged bankrupt, or reorganized because of insolvency, the date of the action, the court which exercised jurisdiction, and the docket number of the matter.

(c) Each commercial telephone seller shall disclose to the division the name, address, and account number of each institution where banking or similar monetary transactions are done by the commercial telephone seller.

(Acts 1994, No. 94-650, p. 1220, §6.)

§ 8-19A-7 Application Form and Contents; Fee; License Number; Violations

(a) An applicant for a license as a salesperson shall submit to the division, in the form prescribed, a written application for a license. The application shall set forth the following information:

(1) The true name, date of birth, driver’s license number, Social Security number, and home address of the applicant.

(2) Each business or occupation engaged in by the applicant during the three years immediately preceding the date of the application, and the location thereof.

(3) The previous experience of the applicant as a commercial telephone seller or salesperson.

(4) Whether the applicant has previously been arrested for, convicted of, or is under indictment or information for, a felony and, if so, the nature of the felony. Conviction includes a finding of guilt where adjudication has been withheld.

(5) Whether the applicant has previously been convicted of, or is under indictment or information for, racketeering or any offense involving fraud, theft, embezzlement, fraudulent conversion, or misappropriation of property. Conviction includes a finding of guilt where adjudication has been withheld.

(6) Whether there has ever been a judicial or administrative finding that the applicant has previously been convicted of acting as a salesperson without a license, or whether a license has previously been refused, revoked, or suspended in any jurisdiction.

(7) Whether the applicant has worked for, or been affiliated with, a company that is involved in pending litigation or has had entered against it an injunction, a temporary restraining order, or a final judgment or order, including a stipulated judgment or order, an assurance of voluntary compliance, or any similar document, in any civil or administrative action involving racketeering, fraud, theft, embezzlement, fraudulent conversion, or misappropriation of property or the use of any untrue, deceptive, or misleading representation or the use of any unfair, unlawful, or deceptive trade practice.

(8) Whether the applicant is involved in pending litigation or has had entered against him or her an injunction, a temporary restraining order, or a final judgment or order, including a stipulated judgment or order, an assurance of voluntary compliance, or any similar document, in any civil or administrative action involving racketeering, fraud, theft, embezzlement, fraudulent conversion, or misappropriation of property or the use of any untrue, deceptive, or misleading representation or the use of any unfair, unlawful, or deceptive trade practice.

(b) An application filed pursuant to this section shall be verified and be accompanied by:

(1) A verified statement of the commercial telephone seller with whom the salesperson will be associated, expressing the intention of the commercial telephone seller to associate the salesperson with him or her and to be responsible for the activities of the salesperson.

(2) An annual license fee for a salesperson in the amount of fifty dollars ($50).

(c) The division shall issue a license number to all salespersons. The division shall adopt rules which allow certain salesperson applicants to operate on an interim basis until such time as a license is granted or denied.

(d) It is a violation of this chapter for a salesperson to:

(1) Fail to maintain a valid license.

(2) Advertise that one is licensed as a salesperson or to represent that the licensing constitutes approval or endorsement by any government or governmental office or agency.

(3) Provide inaccurate or incomplete information to the division when making a license application.

(4) Misrepresent that a person is registered or that a person has a valid license number.

(Acts 1994, No. 94-650, p. 1220, §7.)

§ 8-19A-8 Display of License Required; Penalty for Failure to Display License

(a) The division shall issue to each approved applicant a license in the form and size as is prescribed by the division and, in the case of a commercial telephone seller, shall issue a license for each location at which the commercial telephone seller proposes to do business. Each license issued under this chapter shall show the name and address of the licensee.

(b) Each licensee shall prominently display his or her license at the location where he or she does business. Each licensee shall make the license available for inspection by any governmental agency upon request.

(c) Failure to display a license is sufficient grounds for the division to issue an immediate cease and desist order. The order shall remain in effect until the commercial telephone seller can show the authorities that he or she is licensed. The division shall order the business to cease operations and request the Public Service Commission to order the providers to disconnect any and all telecommunications services being provided to or used by the business. Defendants have the burden of petitioning the circuit court for relief from the cease and desist order. Failure of a salesperson to display a license may result in the salesperson being summarily ordered by the division to leave the office until such time as he or she can produce a license for the division.

(Acts 1994, No. 94-650, p. 1220, §8.)

§ 8-19A-9 License Renewal

(a) Each person licensed under this chapter shall renew his or her license annually by paying the fee for licensing and submitting to the division the application required by this chapter.

(b) Except as otherwise provided in subsection (c), if any material change in the information submitted for licensing occurs before the date for renewal, a licensee shall submit that information to the division in the manner prescribed by the division, along with a fee in the amount of ten dollars ($10).

(c) If any change is made to any script, outline, presentation, sales information, or literature used by a licensee in connection with any solicitation, the new or revised material shall be submitted by the licensee to the division within 10 days of the change.

(d) If any licensee has a change of address or status required to be disclosed pursuant to Sections 8-19A-5 to 8-19A-7, inclusive, notification shall be made to the division in writing within 10 days of the change.

(Acts 1994, No. 94-650, p. 1220, §9.)

§ 8-19A-10 Financial Requirements

(a) An application filed pursuant to Section 8-19A-5 shall be accompanied by:

(1) A bond executed by a corporate surety approved by the division and licensed to do business in this state.

(2) An irrevocable letter of credit issued for the benefit of the applicant by a bank whose deposits are insured by an agency of the federal government.

(3) A certificate of deposit in a financial institution insured by an agency of the federal government, which may be withdrawn only on the order of the division, except that the interest may accrue to the applicant.

(b) The amount of the bond, letter of credit, or certificate of deposit shall be a minimum of fifty thousand dollars ($50,000), and the bond, letter of credit, or certificate of deposit shall be conditioned upon compliance by the applicant with this chapter. The division may establish a bond of a greater amount to ensure the general welfare of the public and the interests of the telemarketing industry.

(c) The bond shall be posted with the division.

(d) The division or any governmental agency, on behalf of any injured purchaser or any purchaser himself or herself who is injured by the bankruptcy of the applicant or his or her breach of any agreement entered into in his or her capacity as a licensee, may bring and maintain an action to recover against the bond, letter of credit, or certificate of deposit.

(Acts 1994, No. 94-650, p. 1220, §10.)

§ 8-19A-11 Denial of License

(a) The division may deny licensure to any applicant who:

(1) Has been convicted of racketeering or any offense involving fraud, theft, embezzlement, fraudulent conversion, or misappropriation of property, or any other crime involving moral turpitude. Conviction includes a finding of guilt where adjudication has been withheld.

(2) Has had entered against him or her or any business for which he or she has worked or been affiliated, an injunction, a temporary restraining order, or a final judgment or order, including a stipulated judgment or order, an assurance of voluntary compliance, or any similar document, in any civil or administrative action involving racketeering, fraud, theft, embezzlement, fraudulent conversion, or misappropriation of property or the use of any untrue or misleading representation in an attempt to sell or dispose of real or personal property or the use of any unfair, unlawful, or deceptive trade practice.

(3) Is subject to or has worked or been affiliated with any company which is, or ever has been, subject to any injunction, temporary restraining order, or final judgment or order, including a stipulated judgment or order, an assurance of voluntary compliance, or any similar document, or any restrictive court order relating to a business activity as the result of any action brought by a governmental agency, including any action affecting any license to do business or practice an occupation or trade.

(4) Has at any time during the previous seven years filed for bankruptcy, been adjudged bankrupt, or been reorganized because of insolvency.

(5) Has been a principal, director, officer, or trustee of, or a general or limited partner in, or had responsibilities as a manager in, any corporation, partnership, joint venture, or other entity that filed the bankruptcy, was adjudged bankrupt, or was reorganized because of insolvency within one year after the person held that position.

(6) Has been previously convicted of or found to have been acting as a salesperson or commercial telephone seller without a license or whose licensure has previously been refused, revoked, or suspended in any jurisdiction.

(7) Falsifies or willfully omits any material information asked for in the application.

(8) Otherwise violates this chapter.

(b) An applicant may appeal the denial or nonrenewal of a license by requesting in writing, within 30 days of receipt of the notice of denial or nonrenewal, a hearing. The hearing shall be conducted in accordance with Chapter 22, Title 41, and presided over by a hearing officer designated by the division. When any hearing officer conducts a hearing with respect to the issuance of a license by the division, the hearing officer shall submit his or her recommended order to the division, which shall issue a final order of the division in accordance with Chapter 22, Title 41.

(Acts 1994, No. 94-650, p. 1220, §11.)

§ 8-19A-12 Oral Disclosures

(a) Within the first 30 seconds of a telephone call, a commercial telephone seller or salesperson shall identify himself or herself by stating his or her true name, the company on whose behalf the solicitation is being made, and the consumer goods or services being sold.

(b) If a sale or an agreement to purchase is completed, the commercial telephone seller shall inform the purchaser of his or her cancellation rights as provided in this chapter, state the license number issued by the division for both the commercial telephone seller and the salesperson, and give the street address of the commercial telephone seller.

(c) All oral disclosures required by this section shall be made in a clear and intelligible manner.

(Acts 1994, No. 94-650, p. 1220, §12.)

§ 8-19A-13 Gifts, Premiums, Bonuses, or Prizes; Disclosures

If a commercial telephone seller expressly or impliedly represents to any prospective purchaser, directly or through a salesperson, that the purchaser is or may be eligible to receive any gift, premium, bonus, or prize, however denominated, the commercial telephone seller shall submit to the division a statement setting forth, for each item mentioned:

(1) A description of the item.

(2) The value or worth of the item and the basis for the valuation.

(3) All terms and conditions a purchaser is required to satisfy in order to receive the item. The statement shall be accompanied by a copy of the written statement of terms and conditions provided to purchasers pursuant to this chapter.

(4) If they are ascertainable, the odds, for a given purchaser, of receiving the item.

(5) If a purchaser is to receive fewer than all the items described by the seller:

a. The manner in which the commercial telephone seller decides which item a given purchaser is to receive.

b. If they are ascertainable, the odds, for a given purchaser, of receiving each item described.

c. The name and address of each person who has, during the preceding 12 months or any portion thereof in which the commercial telephone seller has done business, received each gift, premium, bonus, or prize. The provisions of this section shall not apply if the item is unconditionally offered to a purchaser as part of a sale and the buyer has seven days to return the goods or cancel the services and the right to receive a full refund in 30 days and the right to keep the item in that case without cost.

(Acts 1994, No. 94-650, p. 1220, §13.)

§ 8-19A-14 Contract Requirements; Credit Cards; Notice of Cancellation; Returns; Purchaser’s Rights

(a) A purchase of consumer goods or services ordered as a result of a commercial telephone solicitation as defined in this chapter, if not followed by a signed written contract, is not final. If a contract is not made in compliance with this section, it is not valid and enforceable against the purchaser. The contract made pursuant to a commercial telephone solicitation shall:

(1) Be reduced to writing and be signed by the purchaser.

(2) Match the description of the goods or services as that principally used in the telephone solicitation.

(3) Contain the name, address, telephone number, and registration number of the commercial telephone seller and the salesperson, the total price of the contract, and a detailed description of the goods or services being sold.

(4) Contain the value or worth of any item, good, or service specified in Section 8-19A-13, and the basis for the valuation.

(5) Contain all terms and conditions a purchaser is required to satisfy in order to receive any item, good, or service specified in Section 8-19A-13.

(6) Contain, if they are ascertainable, the odds, for a given purchaser, of receiving any item specified in Section 8-19A-13.

(7) Contain, if a purchaser is to receive fewer than all the items specified in Section 8-19A-13 described by the seller:

a. The manner in which the commercial telephone seller decides which item a given purchaser is to receive.

b. If they are ascertainable, the odds, for a given purchaser, of receiving each item described.

(8) Contain, in at least 12-point type, immediately preceding the signature, the following statement: “You are not obligated to pay any money unless you sign this contract and return it to the commercial telephone seller.”

(9) Not exclude from its terms any oral or written representations made by the commercial telephone seller or salesperson to the purchaser in connection with the transaction.

(b) A commercial telephone seller who engages a salesperson to make, or cause to be made, a telephone sales call shall not make or submit any charge to the purchaser’s credit card account until after the commercial telephone seller receives from the purchaser a copy of the contract which complies with this section. The commercial telephone seller shall then send the purchaser a written confirmation of the sale.

(c) The written contract shall contain an explanation of the purchaser’s rights under this section and a statement indicating when notice of cancellation is required to be sent. The purchaser may give notice of cancellation to the commercial telephone seller in writing within three business days after receipt of the confirmation. If the commercial telephone seller has not provided an address for receipt of the notice, cancellation is effective by mailing the notice to the division.

(d) Notice of cancellation by the commercial telephone seller shall be given by certified mail, return receipt requested, and shall be effective when mailed. Notice of cancellation given by the purchaser need not take a particular form and is sufficient if it indicates, by any form of written expression, the name and address of the purchaser and the purchaser’s stated intention not to be bound by the sale.

(e) If a commercial telephone seller violates this act in making a sale, or fails to deliver an item within 30 calendar days, the contract is voidable by giving notice to the commercial telephone seller, and the purchaser is entitled to a return from the seller, within 14 days, of all consideration paid. Notice of cancellation given by the purchaser need not take a particular form and is sufficient given orally or in writing. Upon receipt by the purchaser of the consideration paid to the commercial telephone seller, the purchaser shall return to the commercial telephone seller the items received by the purchaser. Any cost of returning the items received by the purchaser shall be borne by the commercial telephone seller, by providing or guaranteeing payment for return shipping. If the payment is not provided or guaranteed, the purchaser may keep, without further obligation, the items received.

(f) A person who purchases goods or services pursuant to a solicitation governed by this chapter shall be given a refund, credit, or replacement, at his or her option, if:

(1) The goods or services are defective, are not as represented, or if any item described pursuant to this chapter is not received as promised.

(2) He or she returns the goods or makes a written request for the refund, credit, or replacement within seven days after he or she receives the goods or services. A return or request is timely if shipment is made or the request is postmarked, properly addressed and postage prepaid, within the time provided by this section.

(g) If a purchaser of goods returns only a portion of the goods, the refund, credit, or replacement required by this section may be prorated accordingly.

(h) The refund, credit, or replacement required by this section shall be guaranteed by the commercial telephone seller who made the sale, regardless of whether payment for the goods or services is made to that person.

(i) Any contract, agreement to purchase, or written confirmation executed by a seller which purports to waive the purchaser’s rights under this chapter is against public policy and shall be unenforceable, provided that an agreement between a purchaser and commercial telephone seller to extend the delivery time of an item to more than 30 days shall be enforceable if the commercial telephone seller has a reasonable basis to expect that he or she will be unable to ship the item within 30 days and if the agreement is included in the terms of the written confirmation.

(j) Where a contract or agreement to purchase confers on a purchaser greater rights to cancellation, refund, or return than those enumerated in this chapter, the contract shall be enforceable and not in violation of this chapter, provided that all rights under a contract or agreement to purchase shall be specifically stated in a written confirmation sent pursuant to this section.

(k) The provisions of this section shall not reduce, restrict, or eliminate any existing rights or remedies available to purchasers.

(l) Any sale in which the consumer is given a full refund or credit for the return of undamaged and unused goods, or a cancellation of services notice is given to the seller, within seven days after receipt of the goods or services by the consumer, is exempt from the requirements of subsections (a) to (e), inclusive, and the seller shall process the refund or credit to the consumer’s credit card account within 30 days after receipt of the returned merchandise by the consumer or within 30 days after receipt of the cancellation notice from the consumer, process the refund or credit to the consumer’s credit card account for any services not yet performed or a pro rata refund or credit to the consumer’s credit card for any services not yet performed for the consumer.

(Acts 1994, No. 94-650, p. 1220, §14.)

§ 8-19A-15 Violations

(a) It shall be unlawful for any commercial telephone seller or salesperson to require that payment be by credit card authorization or otherwise to announce a preference for that method of payment.

(b) It shall be unlawful for any commercial telephone seller to employ, or be affiliated with, any unlicensed salesperson.

(c) It shall be unlawful for any salesperson to be employed by, or affiliated with, an unlicensed commercial telephone seller.

(d) It shall be unlawful for any commercial telephone seller or salesperson to be unlicensed.

(e) It shall be unlawful for any salesperson or commercial telephone seller to otherwise violate this chapter.

(Acts 1994, No. 94-650, p. 1220, §15.)

§ 8-19A-16 Enforcement Procedures

(a) If, by his or her own inquiries or as a result of complaints, the enforcing authority has reason to believe that a person has engaged in, or is engaging in a practice that violates this chapter, he or she may administer oaths and affirmations, subpoena witnesses or matter, and collect evidence. Within 10 days after the service of a subpoena or at any time before the return date specified therein, whichever is longer, the party served may file in the circuit court in the county in which he or she resides or in which he or she transacts business and serve upon the enforcing authority a petition for an order modifying or setting aside the subpoena. The petitioner may raise any objection or privilege which would be available under this chapter or upon service of the subpoena in a civil action. The subpoena shall inform the party served of his or her rights under this subsection.

(b) If matter that the enforcing authority seeks to obtain by subpoena is located outside the state, the person subpoenaed may make it available to the enforcing authority or his or her representative to examine the matter at the place where it is located. The enforcing authority may designate representatives, including officials of the state in which the matter is located, to inspect the matter on his or her behalf, and he or she may respond to similar requests from officials of other states.

(c) Upon failure of a person, without lawful excuse, to obey a subpoena and upon reasonable notice to all persons affected, the enforcing authority may apply to the circuit court for an order compelling compliance.

(Acts 1994, No. 94-650, p. 1220, §16.)

§ 8-19A-17 Actions by Enforcing Authority

The division may bring:

(1) An action to obtain a declaratory judgment that an act or practice violates this chapter.

(2) An action to enjoin any person who has violated or is violating this chapter.

(3) An action on behalf of one or more purchasers for the actual damages caused by an act or practice performed in violation of this chapter. This action may include, but is not limited to, an action to recover against a bond, letter of credit, or certificate of deposit as otherwise provided in this chapter. Upon motion of the enforcing authority in any action brought under this section, the court may make appropriate orders, including appointment of a master or receiver or sequestration of assets, to reimburse consumers found to have been damaged, to carry out a consumer transaction in accordance with the consumer’s reasonable expectations, or to grant other appropriate relief. The court may assess the expenses of a master or receiver against a commercial telephone seller. Any injunctive order, whether temporary or permanent, issued by the court shall be effective throughout the state unless otherwise provided in the order.

(Acts 1994, No. 94-650, p. 1220, §17.)

§ 8-19A-18 Civil Penalties; Recovery of Penalties

(a) Any person who engages in any act or practices that violate this chapter is liable for a civil penalty of up to ten thousand dollars ($10,000) for each violation.

(b) The civil penalty may be recovered by any of the following:

(1) Civil action against the person engaging in the violative act or practice.

(2) Agreement and settlement of a civil action filed by stipulation of terms by the person engaging in the violative act or practice and the director of the division by authority of the Attorney General, and by payment of any agreed upon amount by the person against whom the claim was filed.

(3) The settlement of a claim against a person for violation of this chapter before civil action is filed by agreement upon terms and by the payment of any settlement amount agreed upon by the person and the director of the division by authority of the Attorney General.

(c) Upon ceasing the violative act or practice and agreeing to desist therefrom, and upon the payment of the settlement or stipulated amount to the office of the Attorney General by the person in violation, the director of the division may terminate the investigation or prosecution of any civil action or proposed action.

(d) The division or the court may waive any civil penalty or other claims, or costs if the person has previously made full restitution or reimbursement or has paid actual damages to the purchasers who have been injured by the act or practice in violation of this chapter.

(e) All amounts recovered and all monies paid under this chapter shall be deposited into the State General Fund and are appropriated as received hereby to the Attorney General’s Special Revenue Account for implementing and enforcing this chapter.

Notwithstanding the provisions of this subsection (e), one half of the licensing fee collected under subdivision (2) of subsection (b) of Section 8-19A-7 shall be remitted to the treasury of the county within the State of Alabama in which the business is licensed.

(Acts 1994, No. 94-650, p. 1220, §18.)

§ 8-19A-19 Attorney’s Fees and Costs

(a) In any civil action or investigation resulting from a transaction involving a violation of this chapter, except as provided in subsection (c), the division shall receive reasonable attorney’s fees and costs from the nonprevailing party. The amounts appropriated for those purposes in this chapter are in addition to all monies heretofore and hereafter appropriated in any special or general appropriation act to the Attorney General’s Special Revenue Account which is a revolving fund in which the Attorney General is authorized to make deposits and withdrawals from time to time so that the account operates on a revolving basis for expenditure for administration and future civil and criminal investigation and prosecution, and all balances of revenue, income, and receipts remaining at the end of the fiscal year shall carry over to the next fiscal year and shall not revert to the State General Fund or any other fund under Section 41-4-93.

(b) Any award of attorney’s fees or costs shall become a part of the judgment and subject to execution as the law allows.

(c) In any civil litigation initiated by the division resulting in a judgment or administrative order, the court may award to the prevailing party reasonable attorney’s fees and costs if the court finds that there was a complete absence of a justiciable issue of either law or fact raised by the losing party or if the court finds bad faith on the part of the losing party.

(d) The attorney for the prevailing party shall submit a sworn affidavit of his or her time spent on the case and his or her costs incurred.

(Acts 1994, No. 94-650, p. 1220, §19.)

§ 8-19A-20 Criminal Prosecuting Authority

The division or other enforcing authority shall have criminal prosecuting authority concerning the violations of this chapter or of any rule or order hereunder. In addition to any other action, the division or other enforcing authority may bring an action against any person to enjoin, restrain, and prevent the doing of any act or practice herein prohibited or declared unlawful.

(Acts 1994, No. 94-650, p. 1220, §20.)

§ 8-19A-21 Criminal Penalties

(a) No salesperson shall solicit purchasers on behalf of a commercial telephone seller who is not currently licensed with the division pursuant to this chapter. Any person who violates this subsection commits a Class C felony punishable as provided in Section 13A-5-6 and Section 13A-5-11.

(b) No commercial telephone seller shall employ or be affiliated with a salesman who is soliciting purchasers and who is not currently licensed with the division pursuant to this chapter. Any person who violates this subsection commits a Class C felony punishable as provided in Section 13A-5-6 and Section 13A-5-11.

(c) No commercial telephone seller or salesperson shall solicit without a license. Any person who violates this subsection commits a Class C felony punishable as provided in Section 13A-5-6 and Section 13A-5-11.

(d) Any commercial telephone seller or salesperson who falsifies information on an application commits a Class C felony punishable as provided in Section 13A-5-6 and Section 13A-5-11.

(e) Except as provided in subsections (a), (b), (c), or (d), any person who otherwise violates any provision of this chapter or who directly or indirectly employs any device, scheme, or artifice to deceive in connection with the offer or sale by any commercial telephone seller commits a Class C felony punishable as provided in Section 13A-5-6 and Section 13A-5-11.

(f) Any person who is convicted of a second or subsequent violation of this chapter commits a Class B felony punishable as provided in Section 13A-5-6 and Section 13A-5-11. A conviction shall include a finding of guilt where adjudication has been withheld.

(g) Any person who violates this chapter shall also be guilty of a violation of Sections 8-19-1 to 8-19-15, inclusive.

(Acts 1994, No. 94-650, p. 1220, §21.)

§ 8-19A-22 Civil Proceeding Burden of Proof; Criminal Proceeding Burden of Producing Evidence

In any civil proceeding alleging a violation of this chapter, the burden of proving an exemption specified in Section 8-19A-4 or that the person or entity is not otherwise subject to this chapter is upon the person or entity claiming the exemption. In any criminal proceeding alleging a violation of this chapter, the burden of producing evidence to support a defense based upon an exemption specified in Section 8-19A-4 or that the person or entity is not subject to this chapter is upon the person or entity claiming the defense.

(Acts 1994, No. 94-650, p. 1220, §22.)

§ 8-19A-23 Injured Person’s Right of Recovery; Deceptive Trade Practices Act

In addition to any other penalties or remedies provided under law, a person who is injured by a violation of this chapter may bring a civil action for recovery of actual damages and any damages that would be available at common law or by statute, including actual costs, court costs, and attorney’s fees. No provision in this chapter shall be construed to limit any right or remedy provided under law. Any violation of this chapter shall also be considered a violation of the Deceptive Trade Practices Act, Section 8-19-1, et seq.

(Acts 1994, No. 94-650, p. 1220, §23.)

§ 8-19A-24 Rules

The division shall promulgate rules to implement and administer this chapter.

(Acts 1994, No. 94-650, p. 1220, §24.)

Chapter 19B Unauthorized Changing of Provider of Telecommunication Services

§ 8-19B-1 Change in Telecommunication Service

(a) It shall be unlawful for any person or provider of telecommunication service to knowingly designate or change the provider of telecommunication service to a subscriber without the permission or authorization of such subscriber. An affirmative order for designation or change in such service provider shall be confirmed by any of the following methods:

(1) Obtaining the consumer’s written authorization.

(2) Obtaining the consumer’s electronic authorization by use of an 800 number.

(3) Having the consumer’s oral authorization verified by an independent third party.

(4) Sending an information package, including a prepaid, returnable postcard, within three days of the consumer’s request for a PIC change, and waiting 14 days before submitting the consumer’s order to the LEC, so that the consumer has sufficient time to return the postcard denying, cancelling, or confirming the change order.

(b) Any person or provider of telecommunication service knowingly designating or changing the subscriber’s telecommunication service provider in violation of subsection (a) shall credit or refund to the subscriber any amounts billed or paid for charges associated with such service and the unauthorized change, shall pay to other telecommunication providers any and all fees set by the Public Service Commission for such designation or change, and may be penalized up to five hundred dollars ($500) per unauthorized change by the Public Service Commission to be deposited to the State General Fund.

(c) The use of contest or sweepstake entries of any kind which results in changing the provider of a subscriber’s telecommunication service is prohibited and subject to penalties as described above.

(d) This section shall be enforced by the Public Service Commission. The commission may promulgate rules and regulations pursuant to this section.

(Acts 1997, No. 97-412, p. 678 §1.)

Chapter 19C Telephone Solicitations

§ 8-19C-1 Legislative Findings

The Legislature of Alabama finds all of the following:

(1) The use of the telephone to market goods and services to the home is pervasive now due to the increased use of cost-effective telemarketing techniques.

(2) Over 30,000 businesses actively telemarket goods and services to business and residential customers.

(3) Everyday, over 300,000 solicitors place calls to more than 18 million Americans, including citizens of this state.

(4) Telemarketing, however, can be an intrusive and relentless invasion of the privacy and peacefulness of the home.

(5) Many citizens of this state are outraged over the proliferation of nuisance calls to their homes from telemarketers.

(6) Privacy rights and commercial freedom of speech of individuals can be balanced in a way that accommodates both the privacy of individuals and legitimate telemarketing practices.

(7) It is in the public interest to establish a mechanism under which the individual citizens of this state can decide whether or not to receive telemarketing calls in their homes.

(Act 99-450, p. 1043, §1.)

§ 8-19C-2 Database of Subscribers Objecting to Telephone Solicitations

(a) No person or entity may make or cause to be made any telephone solicitation to the telephone line of any residential subscriber in this state who has given notice to the commission of his or her objection to receiving telephone solicitations.

(b)(1) The commission shall establish and operate a database to compile a list of telephone numbers of residential subscribers who object to receiving telephone solicitations. The commission shall have the database in operation before July 1, 2000.

(2) The database may be operated by the commission or by another entity under contract with the commission.

(3) Before July 1, 2000, the commission shall promulgate regulations which shall include all of the following:

a. A requirement that each local exchange company and each competing local exchange carrier shall inform on an annual basis its residential subscribers of the opportunity to provide notification to the commission or its contractor that the subscriber objects to receiving telephone solicitations.

The information shall be disseminated at the option of the carrier by television, radio, or newspaper advertisements; written correspondence; bill insert or messages; telephone book subscription forms; or any other method not expressly prohibited.

b. Methods by which each residential subscriber may give notice to the commission or its contractor of his or her objection to receiving solicitations or revocation of the notice.

c. Methods by which a notice of objection becomes effective and the effect of a change of telephone number on the notice.

d. Methods by which objections and revocations are collected and added to the database.

e. Methods by which a person or entity desiring to make telephone solicitations may obtain access to the database as required to avoid calling the telephone numbers of residential subscribers included in the database.

f. All other matters relating to the database that the commission deems necessary.

(4) If, pursuant to 47 U.S.C. Section 227(c)(3), the Federal Communications Commission establishes a single national database of telephone numbers of subscribers who object to receiving telephone solicitations, the commission shall include the part of the single national database that relates to Alabama in the database established under this section.

(Act 99-450, p. 1043, §3.)

§ 8-19C-3 Database Fees

(a) The commission shall have the authority to charge a residential subscriber a fee every two years payable to the commission for each notice for inclusion on the database established pursuant to this chapter. The commission shall also have the authority to charge a person or entity desiring to make telephone solicitations a fee per year payable to the commission for access to, or for paper or electronic copies of the database established pursuant to this chapter. Any fee established by the commission shall be subject to the approval of the Legislative Council.

(b) The commission shall update its “no sales solicitation calls” listing upon receipt of initial consumer subscriptions or renewals and provide this listing for a fee, pursuant to subsection (a).

(c) All fees collected under this chapter shall be deposited into a separate fund in the State Treasury to be expended by the commission for the implementation and administration of this chapter. At the end of each fiscal year, unexpended monies remaining in the fund shall not revert to any other fund of the state, but shall remain available for appropriation. The Legislature shall annually appropriate from the fund the amount necessary for the administration of this chapter to the commission subject to the provisions, terms, conditions, and limitations of the Budget and Financial Control Act, Sections 41-4-80 et seq., Sections 41-19-1 et seq., and any other provisions of this chapter.

(Act 99-450, p. 1043, §4.)

§ 8-19C-4 Disclosure of Information

Information contained in the database established pursuant to this chapter may be used only for the purpose of compliance with this chapter or in a proceeding or action pursuant to Section 8-19C-6 or 8-19C-7. The information shall not be subject to public inspection or disclosure.

(Act 99-450, p. 1043, §5.)

§ 8-19C-5 Identification by Telephone Solicitors Required

(a) Any person or entity who makes a telephone solicitation to the telephone line of a residential subscriber in this state shall identify himself or herself as provided under Section 8-19A-12.

(b) No person or entity who makes a telephone solicitation to the telephone line of a residential subscriber in this state may knowingly utilize a method to block or otherwise circumvent the use of a caller identification service by the subscriber.

(Act 99-450, p. 1043, §6.)

§ 8-19C-6 Violations

The commission may commence proceedings in the circuit court in the county relating to a knowing violation or threatened knowing violation of subsection (a) of Section 8-19C-2 or Section 8-19C-5. Proceedings which the commission may commence, include, without limitation, issuance of a cease and desist order or issuance of an order imposing a civil penalty up to a maximum of two thousand dollars ($2,000) for each violation. The proceedings shall be brought in the name of the state. The commission may issue investigative demands, issue subpoenas, administer oaths, and conduct hearings in the course of investigating a violation of subsection (a) of Section 8-19C-2 or Section 8-19C-5.

(Act 99-450, p. 1043, §7.)

§ 8-19C-7 Action to Enjoin Violations

A person who has received more than one telephone solicitation within a 12-month period by or on behalf of the same person or entity in violation of subsection (a) of Section 8-19C-2 or Section 8-19C-5 may bring an action to enjoin the violation; bring an action to recover for actual monetary loss from the knowing violation or to receive up to two thousand dollars ($2,000) in damages for each knowing violation, whichever is greater; or bring both actions.

(Act 99-450, p. 1043, §8.)

§ 8-19C-8 Defenses

It shall be a defense in any action or proceeding brought under Section 8-19C-6 or Section 8-19C-7 that the defendant has established and implemented, with due care, reasonable practices and procedures to effectively prevent telephone solicitations in violation of this chapter.

(Act 99-450, p. 1043, §9.)

§ 8-19C-9 Limitations

No action or proceeding may be brought under Section 8-19C-6 or Section 8-19C-7 more than two years after the person bringing the action knew or should have known of the occurrence of the alleged violation; or more than two years after the termination of any proceeding or action by the state, whichever is later.

(Act 99-450, p. 1043, §10.)

§ 8-19C-10 Jurisdiction

A court of this state may exercise personal jurisdiction over any nonresident or his or her executor or administrator as to an action or proceeding authorized by this chapter.

(Act 99-450, p. 1043, §11.)

§ 8-19C-11 Remedies Not Exclusive

The remedies, duties, prohibitions, and penalties of Sections 8-19C-2 to 8-19C-10, inclusive, of this chapter shall not be exclusive and shall be in addition to all other causes of action, remedies, and penalties provided by law.

(Act 99-450, p. 1043, §12.)

§ 8-19C-12 Liability

No provider of telephone caller identification service, local exchange telephone company, or long distance telephone company may be held liable for violations of this chapter committed by other persons or entities.

(Act 99-450, p. 1043, §13.)

Chapter 19D Civil Action for Deceptive Sweepstakes Solicitation

§ 8-19D-1 Definitions

For purposes of this chapter, the following words shall have the following meanings:

(1) PERSON. An individual, corporation, company, partnership, estate, trust, association, foundation, cooperative, or any other legal entity.

(2) PRIZE. Any item of value given to a winner in a sweepstakes who has been selected on the basis of lot or chance.

(3) QUALIFYING LANGUAGE. The language in the solicitation that accompanies the representation that the person being solicited has won or has been selected to receive a prize and that indicates the circumstances or provisions under which the person being solicited will be eligible to receive the prize. The term includes, but is not limited to, language which requires the person to perform some act, to submit information, to hold the winning number, or for the person’s assigned numbers to be drawn by the sponsor of the sweepstakes.

(4) SWEEPSTAKES. A legal contest or game where anything of value is distributed by lot or chance.

(Act 99-445, p. 1012, §1.)

§ 8-19D-2 Deceptive Solicitations; Action for Damages

(a) It shall be unlawful for any person to solicit or sell a product or service through the mail by implying or expressly representing in the solicitation that the person being solicited has won or has been selected to receive a prize or purported prize unless the qualifying language appears in print that is clear, easily read, and conspicuous.

(b) A person who suffers damage as a result of a violation of subsection (a) may bring a civil action against the sponsor or promoter of the solicitation, or both. Damages shall not exceed three times the compensatory damages of the party claiming punitive damages or five hundred thousand dollars ($500,000), whichever is greater.

(Act 99-445, p. 1012, §2.)

Chapter 19E Sale of Admission Tickets

§ 8-19E-1 Purchase Price Printed on Face of Ticket

Admission tickets to any athletic contest, dance, theater, concert, circus, or other amusement shall have the price paid for the ticket, excluding order processing and delivery charges, printed on the face of the ticket.

(Act 2009-568, p. 1670, §1.)

§ 8-19E-2 Resale of Admission Ticket

An admission ticket that was originally issued, sold, or authorized by the organizer or venue to any athletic contest, dance, theater, concert, circus, or other amusement may be resold for an amount in excess of the price printed on the face of the ticket.

(Act 2009-568, p. 1670, §2.)

§ 8-19E-3 Sale of Counterfeit Admission Ticket

(a) Any person who sells a counterfeit admission ticket, upon conviction, shall be guilty of forgery in the third degree which is a Class A misdemeanor.

(b) A license inspector may issue citations and otherwise enforce this chapter under the authority granted pursuant to Section 40-12-10.

(Act 2009-568, p. 1670, §3.)

§ 8-19E-4 License Not Required for Internet or Electronic Sales

An individual reselling admission tickets through an Internet website or other electronic means shall not be required to obtain a business license under Section 40-12-167.

(Act 2009-568, p. 1670, §4.)

Chapter 19F Fantasy Contests Act

§ 8-19F-1 Short Title

This chapter shall be known and may be cited as the Fantasy Contests Act.

(Act 2019-343, §1.)

§ 8-19F-2 Definitions

For the purposes of this chapter, the following terms shall have the following meanings:

(1) CONFIDENTIAL INFORMATION. Information related to the play of a fantasy contest by fantasy contest players obtained as a result of, or by virtue of, a person’s employment.

(2) ENTRY FEE. Cash or cash equivalent that is required to be paid by a fantasy contest player to a fantasy contest operator in order to participate in a fantasy contest.

(3) FANTASY CONTEST. A simulated game of skill in which both of the following are true:

a. Winning outcomes are determined predominately by accumulated statistical results of performance of individual athletes in actual sporting events.

b. Winning outcomes are not based on the score, point spread, or any performance of any single actual sports team or combination of teams or solely on any single performance of an individual athlete in any single sporting event.

(4) FANTASY CONTEST OPERATOR. A person or entity that offers fantasy contests with an entry fee for a cash prize to the general public.

(5) FANTASY CONTEST PLAYER. A person who participates in a fantasy contest offered by a fantasy contest operator.

(6) GROSS FANTASY CONTEST REVENUES. The amount equal to the total of all entry fees that a fantasy contest operator collects from all fantasy contest players, less the total of all sums paid out as winning to all fantasy contest players multiplied by the location percentage for this state.

(7) LOCATION PERCENTAGE. The percentage, rounded to the nearest tenth of a percent, of the total of all entry fees collected from fantasy contest players located in this state, divided by the total entry fees collected from all fantasy contest players in fantasy contests.

(8) NATIONAL GROSS FANTASY CONTEST REVENUES. The amount equal to the total of all entry fees that a fantasy contest operator collects from all fantasy contest players located in the United States, less the total of all sums paid out as winnings to all fantasy contest players.

(9) REGULATOR. The Office of the Attorney General.

(Act 2019-343, §2.)

§ 8-19F-3 Registration of Operators; Fees; Taxes

(a)(1) No fantasy contest operator shall offer any fantasy contest with an entry fee in this state without first being registered with the regulator. Applications for registration and renewal shall be under oath, in the form prescribed by the Attorney General. The regulator shall make applications for operators available by November 27, 2019.

(2) A fantasy contest operator that offered fantasy contests in this state prior to May 1, 2016, may operate fantasy contests in this state on May 31, 2019, provided the operator files an application for registration with the regulator within 60 days of availability of the application.

(b) The regulator may not adopt rules limiting or regulating the rules or administration of an individual fantasy contest, the statistical makeup of a fantasy contest, or the digital platform of a fantasy contest operator.

(c) At the time of initial registration to offer fantasy contests with an entry fee in this state, a fantasy contest operator shall pay to the regulator an initial registration fee as follows:

(1) A fantasy contest operator that has national gross fantasy contest revenues in excess of ten million dollars ($10,000,000) shall pay an initial registration fee of eighty-five thousand dollars ($85,000). A fantasy contest operator registered under this subdivision shall pay to the regulator an annual registration renewal fee of eighty-five thousand dollars ($85,000).

(2) All other fantasy contest operators shall pay an initial registration fee of one thousand dollars ($1,000). A fantasy contest operator registered under this subdivision shall pay to the regulator an annual registration renewal fee of one thousand dollars ($1,000).

(d) On the anniversary date of the fantasy contest operator’s registration, the fantasy contest operator shall annually pay a tax equal to ten and one-half percent of the fantasy contest operator’s gross fantasy contest revenues from the immediately preceding 12-month period. The revenues shall be deposited to the credit of the state General Fund.

(e) Any operator applying for registration, renewal, or transfer of a registration may operate during the application period unless the regulator has reasonable cause to believe that the operator is or may be in violation of this chapter, and the regulator requires the operator to suspend the operation of any fantasy contest until registration, transfer, or renewal of registration is approved.

(Act 2019-343, §3.)

§ 8-19F-4 Fantasy Constest Procedure Requirements

A fantasy contest operator who operates fantasy contests with an entry fee shall implement commercially reasonable procedures that are intended to accomplish all of the following:

(1) Prevent the fantasy contest operator, employees of the fantasy contest operator, and relatives living in the same household as the employees, from competing in any public fantasy contest offered by any fantasy contest operator in which the operator offers a cash prize to the general public.

(2) Prevent sharing of confidential information that could affect fantasy contest play with third parties until information is made publicly available.

(3) Verify that a fantasy contest player in a fantasy contest is 19 years of age or older.

(4) Prevent the fantasy contest operator from offering contests based on the performances of participants in high school or youth athletic events.

(5) Prevent the fantasy contest operator from offering a fantasy contest open to the general public that does not establish and make known all prizes and awards offered to winning participants in advance of the game or contest.

(6) Provide that no winning outcome is based on the score, point spread, or any performance of any single actual sports team or combination of teams or solely on any single performance of an individual athlete or participant in any single actual event.

(7) Ensure that an individual who is a player in a real-world game or sporting event is restricted from participating in a fantasy contest that is determined, in whole or in part, on the accumulated statistical results of that player, the player’s real-world team, or the sport or competition for which he or she is a player.

(8) Allow individuals to restrict themselves from entering a fantasy contest upon request and provide reasonable steps to prevent the person from entering fantasy contests offered by the fantasy contest operator.

(9) Disclose the number of entries that a fantasy contest player may submit to each fantasy contest and provide reasonable steps to prevent players from submitting more than the allowable number.

(10) Segregate fantasy contest player funds from operational funds or maintain a reserve that equals or exceeds the amount of player funds on deposit, which reserve may not be used for operational activities. These reserve funds may take the form of cash, cash equivalents, an irrevocable letter of credit, a bond, payment processor reserves and receivables, or a combination thereof, in the amount that shall exceed the total balances of the fantasy contest players’ accounts.

(11) A fantasy contest operator offering fantasy contests with an entry fee in this state shall contract with a third party to annually perform an independent audit, consistent with the standards established by the American Institute of Certified Public Accountants, to ensure compliance with this chapter and shall submit the results of the audit to the regulator within 270 days of the end of the operator’s fiscal year.

(12) A fantasy contest operator offering fantasy contests with an entry fee in this state shall not target minors or other excluded players in any advertising.

(Act 2019-343, §4.)

§ 8-19F-5 Deceptive Trade Practices

A violation of this chapter is a deceptive trade practice under the Deceptive Trade Practices Act, Chapter 19 of this title.

(Act 2019-343, §5.)

§ 8-19F-6 Construction of Chapter

The provisions of this chapter shall be construed liberally to promote the general welfare of the public and integrity of the fantasy sports industry.

(Act 2019-343, §6.)

§ 8-19F-7 Rulemaking Authority

The Office of the Attorney General may adopt rules to implement and administer this chapter.

(Act 2019-343, §7.)

§ 8-19F-8 Applicability of Gambling Statutes

Article 2 of Chapter 12 of Title 13A does not apply to a fantasy contest.

(Act 2019-343, §8.)

§ 8-19F-9 Exclusion from Lottery or Gift Enterprise Provisions

A fantasy contest offered pursuant to this chapter does not constitute a lottery or gift enterprise pursuant to Section 65 of the Constitution of Alabama of 2022.

(Act 2019-343, §9.)

§ 8-19F-10 Relation to Other Laws

Nothing in this chapter shall be construed to alter the existing authority of the state or any state official with respect to any matter other than fantasy contests as defined in this chapter.

(Act 2019-343, §10.)

Chapter 19G Internet Distribution of Sexual Material Harmful to Minors

§ 8-19G-1 Legislative Findings

The Legislature finds and declares the following:

(1) The pervasive use of pornography is creating a public health crisis.

(2) Pornography is contributing to the hypersexualization of children and teens in our society.

(3) Due to advances in technology and the universal availability of the Internet, young children are more easily exposed to pornography than ever before, with the average age of exposure now being only 11 to 12 years of age.

(4) Pornography treats people as objects and commodities for the viewer’s use.

(5) Pornography normalizes violence and abuse, often depicts rape and abuse as being harmless fun, and increases the demand for sex trafficking, prostitution, and child pornography.

(6) Pornography is a public health crisis leading to a broad spectrum of individual and public health impacts and societal harms. This state has a compelling governmental interest to take action, and this chapter serves as the most narrowly tailored approach to prevent pornography exposure and addiction to minors and to educate individuals and families concerning its very serious harms.

(Act 2024-97, §1.)

§ 8-19G-2 Definitions

As used in this chapter, the following terms have the following meanings:

(1) ADULT WEBSITE. A website, application, or digital or virtual platform that uses the Internet to facilitate the dissemination of pictures, videos, or other content, a substantial portion of which is sexual material harmful to minors.

(2) COMMERCIAL ENTITY. The term includes corporations, limited liability companies, partnerships, limited partnerships, sole proprietorships, or other legally recognized entities.

(3) CONSUMER INTEREST DIVISION. The Consumer Interest Division of the Office of the Attorney General.

(4) DISTRIBUTE. To issue, sell, give, provide, deliver, transfer, circulate, or disseminate.

(5) HARMFUL TO MINORS. The term as defined under Section 13A-12-200.1.

(6) MINOR. An individual under 18 years of age.

(7) NEWS-GATHERING ORGANIZATION. Any of the following:

a. A newspaper, news publication, or other news source, whether in printed or electronic format, of current news and public interest.

b. A radio broadcast station, television broadcast station, or cable television operator.

(8) PUBLISH. To communicate or make information available to another person through an online platform.

(9) REASONABLE AGE-VERIFICATION METHOD. Any commercially available software, application, program, or methodology that, when enabled, provides reasonable assurances that any individual accessing certain published material is 18 years of age or older.

(10) SUBSTANTIAL PORTION. More than 33 1/3 percent.

(Act 2024-97, §2.)

§ 8-19G-3 Use of Age-Verification for Minors on Certain Adult Websites

(a) Any commercial entity that knowingly and intentionally publishes or distributes sexual material harmful to minors through an adult website shall use a reasonable age-verification method to provide reasonable assurance that individuals under 18 years of age cannot access the material harmful to minors.

(b) Nothing in this section shall apply to a bona fide news-gathering organization.

(Act 2024-97, §3.)

§ 8-19G-4 Retention of Personally Identifying Information Prohibited

(a) Any commercial entity or third party that performs the required age-verification under Section 8-19G-3 shall not retain any personally identifying information of the individual after access has been granted to the sexual material.

(b) A commercial entity that is found to have knowingly retained identifying information of the individual, as prohibited in subsection (a), shall be liable to the individual for damages resulting from retaining the identifying information, including court costs and reasonable attorney fees as ordered by the court.

(c) Nothing in this section shall apply to a bona fide news-gathering organization.

(Act 2024-97, §4.)

§ 8-19G-5 Liability of Internet Service Providers, Search Engines, Cloud Service Providers, Etc

No Internet service provider, or its affiliates or subsidiaries, search engine, or cloud service provider shall be held to have violated this chapter or Section 13A-6-240, solely for providing access or connection to or from a website or other information or content on the Internet or a facility, system, or network not under that provider’s control, including transmission, downloading, intermediate storage, or access software to the extent the provider is not responsible for the creation of the content of the communication that constitutes sexual material harmful to minors.

(Act 2024-97, §5.)

§ 8-19G-6 Civil Action for Damages

(a) Any individual injured by a violation of Section 8-19G-3, Section 8-19G-8, or Section 8-19G-9 may bring a civil action in circuit court against the commercial entity to recover actual and punitive damages, court costs, and reasonable attorney’s fees. If the injured individual is a minor, then a parent or legal guardian may bring action on his or her behalf.

(b) Upon commencement of any action brought under this section, the plaintiff shall mail a copy of the complaint or other initial pleading to the Attorney General and upon entry of any judgment or decree in the action, shall mail a copy of the judgment or decree to the Attorney General.

(c) Upon a finding by the court that a violation of Section 8-19G-3, Section 8-19G-8, or Section 8-19G-9 has occurred, the Attorney General, upon petition to the court, may recover a civil penalty up to ten thousand dollars ($10,000) per violation.

(Act 2024-97, §6.)

§ 8-19G-7 Penalties

In addition to any other penalty provided by law, any violation of Section 8-19G-3, Section 8-19G-8, or Section 8-19G-9 shall be considered a violation of the Deceptive Trade Practices Act under Chapter 19 of the this title.

(Act 2024-97, §7.)

§ 8-19G-8 Consent Requirements to Publish or Distribute Private Images

(a) Any commercial entity, before knowingly and intentionally publishing or distributing a private image, as defined under Section 13A-6-240, through an adult website, shall obtain written consent to publish or distribute the private image from every individual depicted in the private image.

(b) The written consent required by this section shall be signed by the individual depicted and sworn to by a notary public. The commercial entity shall maintain records of the written consent for not less than five calendar years following the publication or distribution of the private image.

(Act 2024-97, §8.)

§ 8-19G-9 Notices Required from Commercial Entities Using Age Verification Methods

(a) A commercial entity required to use reasonable age verification methods under Section 8-19G-3 shall do all of the following:

(1) Display the following notices on the home or landing page of the adult website on which sexual material harmful to minors is published or distributed and all advertisements thereof:

“ALABAMA HEALTH AND HUMAN SERVICES WARNING: Pornography is potentially biologically addictive, is proven to harm human brain development, desensitizes brain reward circuits, increases conditioned responses, and weakens brain function.”

“ALABAMA HEALTH AND HUMAN SERVICES WARNING: Exposure to this content is associated with low self-esteem and body image, eating disorders, impaired brain development, and other emotional and mental illnesses.”

“ALABAMA HEALTH AND HUMAN SERVICES WARNING: Pornography increases the demand for prostitution, child exploitation, and child pornography.”

(2) Display the following notice on every page of the adult website:

“U.S. SUBSTANCE ABUSE AND MENTAL HEALTH SERVICES ADMINISTRATION HELPLINE:

“1-800-662-HELP (4357)

“THIS HELPLINE IS A FREE, CONFIDENTIAL INFORMATION SERVICE (IN ENGLISH OR SPANISH) OPEN 24 HOURS PER DAY, FOR INDIVIDUALS AND FAMILY MEMBERS FACING MENTAL HEALTH OR SUBSTANCE USE DISORDERS. THE SERVICE PROVIDES REFERRAL TO LOCAL TREATMENT FACILITIES, SUPPORT GROUPS, AND COMMUNITY-BASED ORGANIZATIONS.”

(b) A violation of this section shall be punished as provided under Section 8-19G-6 or Section 8-19G-7.

(c) Each notice required under this section shall be displayed in 14 point font or greater and in a conspicuous manner.

(Act 2024-97, §9.)

§ 8-19G-10 Tax Levied on Commercial Entities Operating Adult Websites; Reporting Requirements; Distribution of Funds; Rulemaking Authority

(a) In addition to all other taxes of every kind, there is levied and shall be collected a tax at the rate of 10 percent upon the gross receipts of any commercial entity operating an adult website for all sales, distributions, memberships, subscriptions, performances, and all other content amounting to material harmful to minors that is produced, sold, filmed, generated, or otherwise based in this state.

(b) The tax levied by this section shall be collected by the State Department of Revenue at the same time and in the same manner as state sales and use taxes are collected. On or prior to the date the tax is due, each person subject to the tax shall file with the department a report in the form prescribed by the department.

(c) Any taxes collected under this section shall be budgeted and allotted in accordance with Sections 41-4-80 through 41-4-96, and Sections 41-19-1 through 41-19-12, and shall be distributed to the Department of Mental Health for the care and treatment of individuals with behavioral health needs, including prevention, treatment, and recovery services and supports.

(d) The Department of Revenue may adopt rules for the implementation and administration of this chapter.

(Act 2024-97, §10; Act 2024-97, §13.)

Chapter 19H Filter for Certain Internet-Enabled Devices

§ 8-19H-1 Definitions

As used in this chapter, the following terms have the following meanings:

(1) ACTIVATE. The process of powering on a device and associating it with a new or existing user account.

(2) DEVICE. A tablet or a smartphone manufactured on or after October 1, 2025.

(3) FILTER. Generally accepted and commercially reasonable software used on a device that is capable of preventing the device from accessing or displaying obscene material through Internet browsers or search engines owned and controlled by the manufacturer in accordance with prevailing industry standards, including blocking known websites linked to obscene content, via mobile data networks, wired Internet networks, and wireless Internet networks.

(4) INTERNET. The global information system that is logically linked together by a globally unique address space based on the Internet protocol (IP), or its subsequent extensions; that is able to support communications using the transmission control protocol/Internet protocol (TCP/IP) suite or its subsequent extensions, or other IP-compatible protocols; and that provides, uses, or makes accessible, either publicly or privately, high-level services layered on communications and related infrastructure.

(5) MANUFACTURER. A person to which all of the following apply:

a. Is engaged in the business of manufacturing a device.

b. Holds the patents for each device it manufactures or holds the patents for the operating system on a device.

c. Has a commercial designated registered agent in this state.

(6) MINOR. An individual under 18 years of age who is not emancipated, married, or a member of the United States Armed Forces.

(7) OBSCENE MATERIAL. A visual depiction of sexually explicit conduct, as defined under Section 13A-12-190.

(8) OPERATING SYSTEM. Software that manages all of the other application programs on a device.

(9) PASSWORD. A string of characters or other secure method used to enable, deactivate, modify, or uninstall a filter on a device.

(10) RETAILER. A person, other than a manufacturer, that sells a device directly to consumers. The term includes an employee of a retailer acting in the course and scope of the employee’s employment.

(11) SMARTPHONE. An electronic device that combines a cell phone with a hand-held computer, typically offering Internet access through a browser or search engine and that typically has data storage, text, and email capabilities.

(12) TABLET. A mobile device that is equipped with a mobile operating system, touchscreen display, and rechargeable battery and that has the ability to support access to a cellular network.

(13) VIDEO GAME CONSOLE. A discrete computing system, including the system’s components and peripherals, primarily used for playing video games, but does not include a smartphone or tablet.

(Act 2025-406, §1.)

§ 8-19H-2 Requirements for Certain Devices

Devices activated in this state must meet all of the following requirements:

(1) Contain a filter.

(2) Ask the user to provide the user’s age during activation and account set-up.

(3) Automatically enable the filter when the user is a minor based on the age provided under subdivision (2).

(4) Allow a password to be established for the filter.

(5) Notify the user of the device when the filter blocks the device from accessing a website.

(6) Allow a non-minor who has a password the opportunity to deactivate and reactivate the filter.

(Act 2025-406, §2.)

§ 8-19H-3 Manufacturer Liability

(a) A manufacturer of a device shall be subject to civil liability if all of the following occur:

(1) A device is activated in the state.

(2) The device does not, upon activation, enable a filter that complies with the requirements described in Section 8-19H-2.

(3) A minor accesses obscene material on the device.

(b) Notwithstanding subsection (a), this section does not apply to a manufacturer that makes a good faith effort to provide a device that, upon activation of the device in the state, automatically enables a filter on the device that complies with the requirements of Section 8-19H-2.

(c) Nothing in this chapter does any of the following:

(1) Applies to a device manufactured before October 1, 2025.

(2) Applies to a video game console.

(3) Creates a cause of action against a retailer of a device.

(Act 2025-406, §3.)

§ 8-19H-4 Liability of Individuals

With the exception of a minor’s parent or legal guardian, a person may be liable in a civil action for intentionally enabling the password to remove or deactivate the filter on a device in the possession of the minor if the minor accesses obscene material on the device.

(Act 2025-406, §4.)

§ 8-19H-5 Violations; Penalties

(a) Whenever the Attorney General has reason to believe that a person has violated or is violating this chapter, the Attorney General, acting in the public interest, may bring an action in the name of the state against the person as follows:

(1) To enjoin any action that constitutes a violation of this chapter by the issuance of a temporary restraining order or preliminary or permanent injunction.

(2) To recover from the alleged violator a civil penalty not to exceed five thousand dollars ($5,000) per violation, and not to exceed a total of fifty thousand dollars ($50,000) in aggregate, as determined by the court.

(3) To recover from the alleged violator the Attorney General’s reasonable expenses, investigative costs, and attorney fees.

(4) To obtain other appropriate relief as provided for under this chapter.

(b) The Attorney General, in addition to other powers conferred by this chapter, may issue subpoenas to any person and conduct hearings in aid of any investigation or inquiry.

(c) The Attorney General may seek the revocation of any license or certificate authorizing a manufacturer to engage in business in this state if, after the manufacturer is found to have violated this chapter, the manufacturer demonstrates a repeated pattern of violations of this chapter.

(d) For purposes of assessing a penalty under this section, a manufacturer is considered to have committed a separate violation for each device manufactured on or after October 1, 2025, which violates Section 8-19H-2.

(Act 2025-406, §5.)

Chapter 19I Advising or Assisting Individuals Regarding Veterans Benefits

§ 8-19I-1 Definitions

For purposes of this chapter, the following terms have the following meanings:

(1) COMPENSATION. Payment of any money, thing of value, or financial benefit.

(2) PERSON. An individual; corporation; business; estate; trust; partnership; limited liability company; association; joint venture; or public corporation; a state, county, or municipal governmental body or instrumentality thereof; or any other commercial entity.

(3) VETERANS BENEFITS MATTER. The preparation, presentation, or prosecution of any claim affecting any person who has filed or expressed an intent to file a claim for any benefit, program, service, commodity, function, or status entitlement as determined under the laws, rules, and regulations administered by the United States Department of Veterans Affairs or the Alabama Department of Veterans Affairs pertaining to veterans, their dependents, their survivors, and any other individuals eligible for such benefits.

(Act 2025-456, §1.)

§ 8-19I-2 Accreditation Required

No person shall assist individuals in the preparation, presentation, and prosecution of claims for veterans benefits as an agent or attorney unless the person has first been accredited by the United States Department of Veterans Affairs for such purpose.

(Act 2025-456, §2.)

§ 8-19I-3 Memorialization of Payment Terms; Disclosure

A person seeking to receive compensation for advising or assisting any individual with any veterans benefits matter, before rendering any services, shall do both of the following:

(1) Memorialize all terms regarding the individual’s payment of fees for services rendered in a written agreement, signed by both parties.

(2)a. Provide the following disclosure, both orally and in writing:

“This business is not sponsored by, or affiliated with, the United States Department of Veterans Affairs or the Alabama Department of Veterans Affairs, or any other federally chartered veterans service organization. Other organizations, including, but not limited to, the Alabama Department of Veterans Affairs, your local county veterans service agency, and other federally chartered veterans service organizations, may be able to provide you with this service free of charge. Products or services offered by this business are not necessarily endorsed by any of these organizations. You may qualify for other veterans benefits beyond the benefits for which you are receiving services here.”

b. The written disclosure shall appear in at least 12-point font and shall appear in a readily noticeable and identifiable place in the person’s agreement with the individual seeking services.

c. The individual must verbally acknowledge understanding of the oral disclosure and must sign the document in which the written disclosure appears.

d. The person offering services shall retain a copy of the written disclosure while providing veterans benefits services for compensation to the individual and for at least one year after the date on which the service relationship terminates.

(Act 2025-456, §3.)

§ 8-19I-4 Certain Guarantees Prohibited; Excessive or Unreasonable Fees

(a) A person advising or assisting individuals pursuant to this chapter may not guarantee, either directly or by implication, that any individual is certain to receive specific veterans benefits or that any individual is certain to receive a specific level, percentage, or amount of veterans benefits.

(b) A person advising or assisting individuals pursuant to this chapter may not receive excessive or unreasonable fees as compensation.

(Act 2025-456, §4.)

§ 8-19I-5 Advertising Requirements

(a) A person may not advertise the person’s services of advising or assisting in veterans benefits matters for compensation without including the following disclosure:

“This business is not sponsored by, or affiliated with, the United States Department of Veterans Affairs, the Alabama Department of Veterans Affairs, or any other federally chartered veterans service organization. Other organizations, including, but not limited to, the Alabama Department of Veterans Affairs, your local county veterans service agency, and other federally chartered veterans service organizations, may be able to provide you with these services free of charge. Products or services offered by this business are not necessarily endorsed by any of these organizations. You may qualify for other veterans benefits beyond the services that this business offers.”

(b) If the advertisement is printed, including, but not limited to, advertisements visible to Internet users, the disclosure shall appear in a readily visible place on the advertisement. If the advertisement is verbal, the spoken statement of the disclosure shall be clear and intelligible.

(Act 2025-456, §5.)

§ 8-19I-6 Compensation for Referrals

In no event may a person receive compensation for referring an individual to another person to advise or assist the individual with any veterans benefits matter.

(Act 2025-456, §6.)

§ 8-19I-7 Violations

A violation of this chapter shall be considered a violation of the Deceptive Trade Practices Act under Chapter 19 of this title.

(Act 2025-456, §7.)

§ 8-19I-8 Applicability

The provisions of this chapter shall not apply to an attorney accredited by the federal government pursuant to 38 C.F.R. § 14.629.

(Act 2025-456, §8.)

Chapter 19K Regulation of App Store Providers and Developers

§ 8-19K-1 Definitions

For the purposes of this chapter, the following terms have the following meanings:

(1) ACCOUNT HOLDER. The individual associated with a mobile device.

(2) AGE CATEGORY. Whether an individual is: (i) under 13 years of age; (ii) at least 13 years of age but less than 16 years of age; (iii) at least 16 years of age but less than 18 years of age; or (iv) at least 18 years of age.

(3) AGE CATEGORY DATA. Information about a user’s age category which is collected by an app store developer and shared with a developer.

(4) AGE RATING. A classification that assesses the suitability of an app’s content and functions for different age groups.

(5) APP. A software application or electronic service that a user may run or direct on a mobile device. The term includes pre-installed apps.

(6) APP STORE. A publicly available website, software application, or electronic service that allows account holders to download apps from third-party developers onto a mobile device.

(7) APP STORE PROVIDER. An entity that owns, operates, or controls an app store that allows account holders in the state to download apps onto a mobile device.

(8) CONTENT DESCRIPTION. A description of the specific content elements or functions that inform an app’s age rating.

(9) DEVELOPER. An entity that owns or controls an app made available through an app store or a pre-installed app.

(10) IN-APP PURCHASE. A charge associated with any user conduct within an app and billed by an app store, including, but not limited to, the acquisition of virtual currency, digital goods, digital services, or other apps.

(11) MINOR. An individual under 18 years of age, unless the individual is married or legally emancipated.

(12) MINOR ACCOUNT. An account with an app store provider which is established by an individual who the app store provider has determined is a minor.

(13) MOBILE DEVICE. A phone or general-purpose tablet that: (i) provides cellular or wireless connectivity; (ii) is capable of connecting to the Internet; (iii) runs a mobile operating system; and (iv) is capable of running apps through the mobile operating system.

(14) MOBILE OPERATING SYSTEM. Software that: (i) manages mobile device hardware resources; (ii) provides common services for mobile device programs; (iii) controls memory allocation; and (iv) provides interfaces for apps to access device functionality.

(15) PARENT. With respect to a minor, any of the following individuals:

a. A biological parent.

b. A legal guardian.

c. An individual with legal custody.

(16) PARENT ACCOUNT. An account with an app store provider which is affiliated with one or more minor accounts and which is verified to have been established by an individual who the app store provider has determined is not a minor.

(17) PARENTAL CONSENT DISCLOSURE. The following information that an app store provider is required to provide to a parent before obtaining parental disclosure:

a. A description of the personal data collected by the app from a user.

b. A description of the personal data shared by the app with any third party.

c. Any methods implemented by the developer to protect personal data.

d. The age rating of the app or in-app purchase, if available.

e. The content description of the app or in-app purchase, if available.

(18) PRE-INSTALLED APP. Any app, or portion of an app, which is present on a mobile device at the time of purchase, initial activation, or first use by the consumer. The term includes, but is not limited to: (i) browsers; (ii) search engines; (iii) messaging apps; and (iv) other apps, or portions of apps, that are installed or partially installed by the device manufacturer, wireless services provider, retailer, or any other party prior to the purchase, initial activation, or first use of the device by the customer and that may be updated thereafter. The term does not include: (i) core operating system functions; (ii) essential device drivers; and (iii) applications necessary for basic device operation such as phone and settings applications.

(19) SIGNIFICANT CHANGE. A material modification to an app’s terms of service or privacy policy which does any of the following:

a. Changes the categories of data collected, stored, or shared.

b. Adds new monetization features, including, but not limited to, in-app purchases or advertisements, where no such features were previously present.

c. Alters the app’s age rating or content descriptions.

(20) VERIFIABLE PARENTAL CONSENT. Authorization that meets all of the following criteria:

a. Is provided by an individual who the app store provider has verified is at least 18 years of age.

b. Is given after the app store provider has clearly and conspicuously provided the parental consent disclosure to the individual.

c. Requires the parent to make an affirmative choice to either grant consent or decline consent.

(Act 2026-59, §1.)

§ 8-19K-2 Age Verification Requirements

(a) An app store provider shall do both of the following when an individual located in this state creates an account with the app store provider, or before October 1, 2027, for all accounts in existence on January 2, 2027:

(1) Request age category information from the individual.

(2) Verify the individual’s age category using one of the following:

a. Commercially available methods that are reasonably designed to ensure accuracy.

b. An age verification system that complies with rules adopted pursuant to this chapter.

(b) For the purposes of this section, a method is commercially available if the method includes both: (i) affirmative age attestation by an individual who is reasonably believed to be the parent or legal guardian of the minor; and (ii) other information collected in the ordinary course of account creation or use.

(Act 2026-59, §2.)

§ 8-19K-3 Minor Account Requirements; Parental Consent

An app store provider shall do all of the following when an individual is determined to be a minor pursuant to Section 8-19K-2:

(1) Require the account to be affiliated with a parent account.

(2) Obtain verifiable parental consent from the holder of the affiliated parent account before allowing the minor to: (i) download an app; (ii) purchase an app; or (iii) make an in-app purchase.

(3) Provide a mechanism for the holder of the affiliated parent account to withdraw consent and notify developers when the holder of a parent account withdraws consent.

(Act 2026-59, §3.)

§ 8-19K-4 Notification of Significant App Changes

An app store provider shall do both of the following after receiving notice of a significant change from a developer:

(1) Notify the user of the significant change.

(2) For a minor account, do both of the following:

a. Notify the holder of the affiliated parent account.

b. Obtain renewed verifiable parental consent before providing access to the significantly changed version of the app.

(Act 2026-59, §4.)

§ 8-19K-5 Access to Data by Developers

An app store provider shall provide developers with real-time access to both of the following:

(1) Age category data for each user located in this state.

(2) The status of verifiable parental consent for each minor located in this state.

(Act 2026-59, §5.)

§ 8-19K-6 Protection of Personal Age Verification Data

An app store provider shall protect personal age verification data by doing both of the following:

(1) Limiting the collection and processing to data necessary to: (i) verify a user’s age; (ii) obtain parental consent; or (iii) maintain compliance records.

(2) Transmitting personal age verification data using industry-standard encryption protocols that ensure data integrity and data confidentiality.

(Act 2026-59, §6.)

§ 8-19K-7 Pre-installed App Requirements

An app store provider shall do both of the following with respect to pre-installed apps:

(1) Provide available age category information in response to a request from a developer.

(2) Take reasonable measures to facilitate verifiable parental consent for use of a pre-installed app in response to a request from a developer.

(Act 2026-59, §7.)

§ 8-19K-8 Prohibited Activities of App Store Providers

An app store provider may not do any of the following:

(1) Enforce a contract or terms of service against a minor unless the app store provider has obtained verifiable parental consent.

(2) Knowingly misrepresent the information in the parental consent disclosure.

(3) Share age category data or any other associated data except as required by law or as required by this chapter between an app store provider and a developer.

(Act 2026-59, §8.)

§ 8-19K-9 Developer Requirements; Prohibited Activities

(a) A developer shall do all of the following:

(1) Verify through the app store’s data sharing methods: (i) the age category of users located in this state; and (ii) for a minor account, whether verifiable parental consent has been obtained.

(2) Notify app store providers of any significant change to an app.

(3) Limit use of age category data received from an app store provider to: (i) enforce developer-created age-related restrictions, protections, or defaults; (ii) ensure compliance with applicable laws or regulations; or (iii) implement safety-related features or defaults.

(4) Request age category data or verifiable parental consent in all of the following scenarios:

a. Whenever an account holder does any of the following:

1. Downloads an app.

2. Purchases an app.

3. Launches a pre-installed app for the first time.

b. When implementing a significant change to an app.

c. To comply with applicable law.

(5) When implementing any developer-created age-related restrictions, safety-related features, or defaults, use the lowest age category indicated by either: (i) age category data received through the app store’s data sharing methods; or (ii) age data independently collected by the developer.

(b) A developer may request age category data in any of the following scenarios:

(1) No more than once during each 12-month period to verify either of the following:

a. The accuracy of age category data associated with an account holder.

b. Continued account use within the age category.

(2) When there is reasonable suspicion of either of the following:

a. Account transfer.

b. Misuse outside of the age category.

(3) At the time an account holder creates a new account with the developer.

(c) A developer may not do any of the following:

(1) Enforce a contract or terms of service against a minor unless the developer has verified through the app store provider that verifiable parental consent has been obtained.

(2) Knowingly misrepresent any information in the parental consent disclosure.

(3) Share age category data with any person.

(Act 2026-59, §9.)

§ 8-19K-10 Rulemaking Authority of Attorney General

The Attorney General shall adopt rules establishing processes and means by which an app store provider may verify whether an account holder is a minor in accordance with this chapter.

(Act 2026-59, §10.)

§ 8-19K-11 Violations

(a) Any knowing or reckless violation of this chapter is deemed a deceptive trade practice actionable under Chapter 19. The Attorney General shall have the exclusive jurisdiction to bring an action pursuant to Chapter 19. If the Attorney General has reason to believe that an entity is in violation of this chapter, the Attorney General may bring an action against the entity for an unfair or deceptive trade practice. In addition to other remedies available under Chapter 19, the Attorney General may collect a civil penalty of up to seven thousand five hundred dollars ($7,500) per violation, reasonable attorney fees, and court costs.

(b) If a violation described in subsection (a) is part of a consistent pattern of knowing or reckless conduct, the Attorney General may seek punitive damages against the entity.

(c) An action for a claim under this section must be brought within one year from the date the Attorney General knew or reasonably should have known of the alleged violation.

(d) This section does not preclude any other available remedy at law or equity.

(Act 2026-59, §11.)

§ 8-19K-12 Liability; Safe Harbor Provisions

(a) A developer is not liable for a violation of this chapter if the developer demonstrates all of the following:

(1) The developer relied in good faith on applicable age category data received through an app store’s data sharing methods.

(2) The developer relied in good faith on notification from an app store provider that verifiable parental consent was obtained.

(3) The developer complied with the requirements of this chapter.

(b) A developer is not liable for a violation of Section 8-19K-9(c)(1) if the developer: (i) uses widely adopted industry standards to determine the app’s age category and content description; and (ii) applies those standards consistently and in good faith.

(c) Notwithstanding subsection (a), the safe harbor provision applies only to actions brought under this chapter and does not limit a developer or app store provider’s liability under any other applicable law.

(d) An app store provider shall not be liable for a violation of this chapter if the app store provider generates an erroneous age category signal for a user as long as the app store provider demonstrates that the app store provider did all of the following:

(1) Used a commercially reasonable age verification process.

(2) Exercised due care in conducting the age verification process.

(3) Made reasonable efforts to reconcile any discrepancies between a parent’s attestation of the minor’s age and other age data collected in the ordinary course of account creation or use.

(Act 2026-59, §12.)

§ 8-19K-13 Construction of Chapter

Nothing in this chapter shall be construed to do any of the following:

(1) Prevent an app store provider or developer from taking reasonable measures to do any of the following:

a. Block, detect, or prevent distribution to minors of: (i) unlawful material; (ii) obscene material; or (iii) other harmful material.

b. Block or filter spam.

c. Prevent criminal activity.

d. Protect app store or app security.

(2) Require an app store provider or developer to disclose user information to a developer beyond age category or verification of parental consent status.

(3) Allow an app store provider or developer to implement measures required by this chapter in a manner that is: (i) arbitrary; (ii) capricious; (iii) anticompetitive; or (iv) unlawful.

(4) Require a developer to collect, retain, reidentify, or link any information beyond what is both:

a. Necessary to verify age category data as required by this chapter; and

b. Collected, retained, reidentified, or linked in the developer’s ordinary course of business.

(5) Require an app store provider or developer to block access to an application that an account holder has downloaded or installed onto a mobile device prior to January 1, 2027, except to the extent that either:

a. A parent account revokes verifiable consent for an affiliated minor account; or

b. There has been a significant change to the application.

(Act 2026-59, §13.)

§ 8-19K-14 Compliance with Other State Laws

Nothing in this chapter shall be construed to relieve any person from compliance with any other law of this state that requires age verification.

(Act 2026-59, §14.)

Chapter 19J Online Real Estate Platforms

§ 8-19J-1 Definitions

For the purposes of this chapter, the term “online real estate platform” means: (i) a digital media platform whose primary business purpose is to publicly advertise real estate for sale or lease; or (ii) a real estate website whose primary purpose is publicly advertising real estate for sale or lease. For purposes of this chapter, an online real estate platform does not include:

(1) Nonpublic websites, portals, list serves, social media websites, or news sites;

(2) Multiple listing services operated by or on behalf of licensed real estate brokers and accessible only to licensed real estate professionals and their clients; or

(3) Internal business tools that do not provide a public-facing listing search experience to the general public.

(Act 2026-536, §3.)

§ 8-19J-2 Listing Requirements; Third-Party Services

(a) For a listing that originates from an online real estate platform through a direct contract with the property owner and is not first listed with a licensed real estate broker, real estate brokerage, or multiple listing service, the platform shall require the following before publishing, hosting, advertising, or otherwise publicly disseminating real property for sale or lease:

(1) A copy of the owner’s government-issued identification that is unexpired and includes the individual’s photograph, name, and address.

(2) A copy of the official county recorder’s records showing the owner of record, a copy of the deed to the real property with the owner’s name, a title history, or a last will and testament.

(b) An online real estate platform may satisfy the requirements of this section by using a third-party identity or title verification service.

(Act 2026-536, §3.)

§ 8-19J-3 Display, Etc., of Interior Photos or Videos of Certain Real Property; Removal Requests

(a) An online real estate platform may display, publish, host, advertise, or otherwise distribute interior photos or videos of real property that is not currently listed for sale, subject to the requirements of this section.

(b) The current owner of record of real property may submit a written request to an online real estate platform to remove interior photos or videos of the owner’s property from public display.

(c) Upon receipt of a request submitted pursuant to subsection (b), the online real estate platform shall:

(1) Verify the identity and ownership status of the requesting party through reasonable means; and

(2) Remove the interior photos or videos from public display within 30 days after verification of ownership.

(d) Nothing in this section shall require an online real estate platform to remove interior photos or videos absent a request from the current property owner.

(e) This section shall not be construed to prohibit the retention of interior photos or videos for archival, legal compliance, fraud prevention, or internal business purposes, provided such photos or videos are not publicly displayed after a valid removal request.

(Act 2026-536, §3.)

§ 8-19J-4 Rebuttable Presumption of Reasonableness; Limitations of Actions; Liability

(a) An online real estate platform that complies with the practices outlined in Sections 8-19J-2 and 8-19J-3 shall create a rebuttable presumption that the platform acted reasonably. Such adherence does not preclude administrative action by the commission. The existence of the presumption shall be a question of law for the court and may be determined on a motion for summary judgment.

(b) An action under this chapter against an online real estate platform must be commenced not later than four years after the date the transfer is recorded in the public record.

(c) An online real estate platform may not be liable for negligence arising from a syndicated listing or from an intermediary agent or broker that fails to obtain property documentation before listing real property.

(Act 2026-536, §3.)

§ 8-19J-5 Applicability to Internet Service Providers, Etc

No Internet service provider, or its affiliates or subsidiaries, search engine, or cloud service provider shall be considered to have violated this chapter solely for providing access or connection to or from a website, to content on the Internet, or to a facility, system, or network not under that provider’s control, including transmission, download, intermediate storage, or access software.

(Act 2026-536, §3.)

Chapter 20 Dealings by Motor Vehicle Manufacturers, Wholesalers, Etc., with Motor Vehicle Dealers

§ 8-20-1 Short Title

This chapter may be cited as “The Motor Vehicle Franchise Act.”

(Acts 1981, No. 81-390, p. 596, §1.)

§ 8-20-2 Declaration of Purpose

(a) The Legislature finds and declares that the distribution and sale of motor vehicles within this state vitally affect the general economy of the state and the public interest and the public welfare, and that in order to promote the public interest and the public welfare, and in the exercise of its police power, it is necessary to regulate motor vehicle manufacturers, distributors, dealers, and their representatives and to regulate the dealings between manufacturers and distributors or wholesalers and their dealers in order to prevent fraud and other abuses upon the citizens of this state and to protect and preserve the investments and properties of the citizens of this state.

(b) This chapter shall not apply to any recreational vehicle manufacturer and dealer agreement to which Chapter 21C of this title applies.

(Acts 1981, No. 81-390, p. 596, §2; Act 2011-636, p. 1529, §12.)

§ 8-20-3 Definitions

For the purpose of this chapter, the following terms shall have the meanings respectively ascribed to them in this section, except where the context clearly indicates a different meaning:

(1) COERCE. The failure to act in good faith in performing or complying with any term or provision of the franchise or dealer agreement, except that recommendation, persuasion, urging, or argument shall not be deemed to constitute a lack of good faith.

(2) DEALER AGREEMENT or FRANCHISE. The written contract between any new motor vehicle manufacturer and any new motor vehicle dealer which purports to fix the legal rights and liabilities of the parties to such agreement or contract, and pursuant to which the dealer purchases and resells the franchise product or leases or rents the dealership premises.

(3) DISTRIBUTOR or WHOLESALER. A person, whether a resident or a nonresident, other than a manufacturer, who sells or distributes motor vehicles to motor vehicle dealers or who maintains distributor representatives within the state.

(4) DISTRIBUTOR BRANCH. A branch office maintained by a distributor or wholesaler.

(5) DISTRIBUTOR REPRESENTATIVE. A representative employed by a distributor or wholesaler for the purpose of making or promoting the sale of the distributor’s or wholesaler’s new motor vehicles to motor vehicle dealers or for supervising or contracting the motor vehicle dealers or prospective motor vehicle dealers.

(6) FACTORY BRANCH. A branch office maintained by a manufacturer in order to direct and supervise the representatives of the manufacturer.

(7) FACTORY REPRESENTATIVE. A person employed by a manufacturer for the purpose of making or promoting the sale of the manufacturer’s new motor vehicles to motor vehicle dealers or distributors or for supervising or contacting the motor vehicle dealers or prospective motor vehicle dealers.

(8) GOOD FAITH. Honesty in fact and the observation of reasonable commercial standards of fair dealing in the trade as is defined and interpreted in paragraph (1)(b) of Section 7-2-103.

(9) LINE MAKE. A collection of models, series, or groups of motor vehicles manufactured by or for a particular manufacturer, distributor, or importer offered for sale, lease, or distribution pursuant to a common brand name or mark; provided, however:

1. Multiple brand names or marks may constitute a single line make, but only when included in a common dealer agreement and the manufacturer, distributor, or importer offers such vehicles bearing the multiple names or marks together only, and not separately, to its authorized dealers; and

2. Motor vehicles bearing a common brand name or mark may constitute separate line makes when pertaining to motor vehicles subject to separate dealer agreements or when such vehicles are intended for different types of use.

(10) MANUFACTURER. Any person engaged in the manufacturing or assembling of new motor vehicles as a regular business or any person who is controlled by the manufacturer.

(11) MOTOR VEHICLE. Every vehicle intended primarily for use and operation on the public highways which is self-propelled.

(12) MOTOR VEHICLE DEALER. A person operating under a dealer agreement from a manufacturer or distributor and who is engaged regularly in the business of buying, selling, or exchanging motor vehicles in this state and who has in this state an established place of business.

(13) NET COST. The price the dealer pays for new motor vehicles, supplies, parts, equipment, signs, furnishings, and special tools, including the freight costs to the dealer’s location, minus any applicable discounts obtained by the dealer.

(14) NEW MOTOR VEHICLE. A vehicle which has been sold to a new motor vehicle dealer and which has not been used for other than demonstration purposes and on which the original title has not been issued from the new motor vehicle dealer. A new motor vehicle shall also mean an engine, transmission, or rear axle manufactured for installation in a vehicle having as its primary purpose the transport of a person or persons or property on a public highway and having a gross vehicle weight rating of more than 16,000 pounds, whether or not attached to a vehicle chassis.

(15) PERSON. An individual, firm, partnership, association, joint stock company, corporation, or other legal entity or a combination of legal entities.

(16) RELEVANT MARKET AREA. The area within a radius of 20 miles around an existing dealer or the area of responsibility defined in the franchise, whichever is greater; except that, where a manufacturer is seeking to establish an additional new motor vehicle dealer and there are one or more existing new motor vehicle dealers of the same line make within a 10-mile radius of the proposed dealer site, the relevant market area shall in all instances be the area within a radius of 10 miles around an existing dealer.

(Acts 1981, No. 81-390, p. 596, §3; Acts 1981, No. 81-776, p. 1338, §16; Act 2010-198, p. 300, §1.)

§ 8-20-4 Unfair and Deceptive Trade Practices

Notwithstanding the terms, provisions, or conditions of any dealer agreement or franchise or the terms or provisions of any waiver, prior to the termination, cancellation, or nonrenewal of any dealer agreement or franchise, the following acts or conduct shall constitute unfair and deceptive trade practices:

(1) For any manufacturer, factory branch, factory representative, distributor, or wholesaler, distributor branch, or distributor representative to coerce or attempt to coerce any motor vehicle dealer to do any of the following:

a. To accept, buy, or order any motor vehicle or vehicles, appliances, equipment, parts, or accessories therefor, or any other commodity or commodities or service or services which such motor vehicle dealer has not voluntarily ordered or requested except items required by applicable local, state, or federal law; or to require a motor vehicle dealer to accept, buy, order, or purchase such items in order to obtain any motor vehicle or vehicles or any other commodity or commodities which have been ordered or requested by such motor vehicle dealer.

b. To order or accept delivery of any motor vehicle with special features, appliances, accessories, or equipment not included in the list price of the motor vehicles as publicly advertised by the manufacturer thereof, except items required by applicable law.

c. To enter into any agreement with such manufacturer, factory branch, factory representative, distributor, or wholesaler, distributor branch, or distributor representative to do any other act prejudicial to the dealer, the effect of which is to reduce the motor vehicle dealer’s allocation of motor vehicles or cancel or fail to renew any franchise or any dealer agreement existing between the parties other than as hereinafter provided; provided, however, that this subsection is not intended to preclude the manufacturer or distributor from insisting on compliance with the reasonable terms or provisions of the franchise, and notice in good faith to any motor vehicle dealer of the dealer’s violation of any reasonable terms or provisions of such franchise or dealer agreement or of any law or regulation applicable to the conduct of a motor vehicle dealer shall not constitute a violation of this chapter.

d. To participate monetarily in an advertising campaign or contest, or to purchase any promotional materials, training materials, showroom, or other display decorations or materials at the expense of the new motor vehicle dealer. This paragraph is not intended to modify any reasonable and uniformly applied provision of the franchise which requires the new motor vehicle dealer to advertise and promote the sale of vehicles and does not apply to campaigns, contests, advertising, and other promotional programs in which the new motor vehicle dealer voluntarily elects to participate.

e. To refrain from participation in the management of, investment in, or the acquisition of any other line of new motor vehicle or related products; provided that the new motor vehicle dealer maintains a reasonable line of credit for each make or line of new motor vehicle, and that the new motor vehicle dealer remains in substantial compliance with the terms and conditions of the franchise.

f. To change the location of the new motor vehicle dealership or, during the course of the agreement, to make any substantial alterations to the dealership premises when to do so would be unreasonable.

1. For the purposes of this paragraph, both of the following would be unreasonable:

(i) To require the construction of or substantial alteration to a facility or premises if the same item or design component, consisting of interior or exterior elements of the sales, service, administrative, or parts components, was constructed or substantially altered within the prior 10 years and that construction or alteration was required and approved by the manufacturer, factory branch, factory representative, distributor, or wholesaler, distributor branch, or distributor representative. A substantial alteration shall mean an alteration that has a major impact on the architectural features, characteristics, appearance, or integrity of a structure or lot. The term does not include routine maintenance, such as interior painting reasonably necessary to maintain a dealership facility in attractive condition, nor any changes to items protected by federal intellectual property rights.

(ii) To require the use of a vendor of goods or services selected by the manufacturer, factory branch, factory representative, distributor, or wholesaler, distributor branch, or distributor representative for construction or substantial alterations if the dealer, with approval of the manufacturer, factory branch, factory representative, distributor, or wholesaler, distributor branch, or distributor representative selects an alternative vendor of goods and services that are of the same design, quality, and kind. This section shall not be construed to eliminate, impair, damage, or otherwise limit a manufacturer’s intellectual property, trademark, or trade dress rights in any way. This paragraph shall not apply to goods or services paid for entirely by a manufacturer, factory branch, factory representative, distributor, or wholesaler, distributor branch, or distributor representative nor to their initial design or architectural review service.

2. This paragraph does not apply to routine facility maintenance or to construction or alterations necessary to comply with a health or safety law or technology requirements necessary to sell or service a vehicle that the dealer is authorized to sell and service.

3. This paragraph is not intended to prohibit a manufacturer, factory branch, factory representative, distributor, or wholesaler, distributor branch, or distributor representative from continuing a facility improvement program that is in effect as of March 12, 2018, with more than one new vehicle dealer in the state nor to any modification or renewal of the program or providing program payments to assist a new vehicle dealer in making agreed upon facility improvements, construction, or substantial alterations, including signage or an image element, or from enforcing a voluntary agreement between a new vehicle dealer and manufacturer, factory branch, factory representative, distributor, or wholesaler, distributor branch, or distributor representative where separate and valuable consideration has been offered and accepted.

g. To establish or maintain exclusive sales facilities or sales display space for a new motor vehicle line make unless such exclusive sales facilities or sales display space are reasonable and are otherwise justified by reasonable business considerations. The burden of proving that reasonable business considerations justify exclusive sales facilities or sales display space is on the manufacturer. Provided, however, a manufacturer or distributor may not coerce, attempt to coerce, or require a motor vehicle dealer to establish or maintain exclusive personnel or exclusive service, parts, or administrative facilities for a line make.

h. To adhere to performance standards that are not fair, reasonable, and equitable or that are not applied uniformly to other similarly situated dealers. A performance standard, sales objective, or program for measuring dealership performance that may have a material effect on a dealer, including the dealer’s right to payment under any incentive or reimbursement program shall be fair, reasonable, equitable, and based on accurate information.

i. To engage in any acts which constitute fraud, deceit, or suppression under Sections 6-5-100 to 6-5-104, inclusive.

j. To offer to sell or to sell any extended service contract or extended maintenance plan offered, sold, backed by, or sponsored by the manufacturer or to sell, assign, or transfer any retail installment sales contract or lease obtained by the dealer in connection with the sale or lease of a new motor vehicle manufactured by the manufacturer to a specified finance company, class of finance companies, leasing company, or class of leasing companies, or to any other specified persons.

(2) For any manufacturer, factory branch, factory representative, distributor, or wholesaler, distributor branch, distributor representative, or motor vehicle dealer to engage in any action with respect to a franchise which is arbitrary, unconscionable, unreasonable, or is not in good faith and which causes damage to any of the parties.

(3) For any manufacturer, factory branch, factory representative, distributor, or wholesaler, distributor branch, or distributor representative to do any of the following:

a. To adopt, change, establish, or implement a plan or system for the allocation and distribution of new or used motor vehicles to motor vehicle dealers which is arbitrary, capricious, or unreasonably discriminatory or to modify an existing plan so as to cause the same to be arbitrary, capricious, or unreasonably discriminatory.

b. To fail or refuse to advise or disclose to any motor vehicle dealer having a franchise or dealer agreement, upon written request therefor, the basis upon which new motor vehicles of the same line make are allocated or distributed to motor vehicle dealers in the state and the basis upon which the current allocation or distribution is being made or will be made to such motor vehicle dealer.

c. To refuse to deliver to a motor vehicle dealer in reasonable quantities and within a reasonable time after receipt of the motor vehicle dealer’s order any such motor vehicles as are covered by a franchise or dealer agreement and specifically publicly advertised in the state by such manufacturer, factory branch, factory representative, distributor, or wholesaler, distributor branch, or distributor representative to be available for immediate delivery; provided, however, that the failure to deliver any motor vehicle shall not be considered a violation of this chapter if such failure is due to an act of God, a work stoppage or delay due to a strike or labor difficulty, a shortage of materials, a lack of available manufacturing capacity, a freight embargo, or other cause over which the manufacturer, factory branch, factory representative, distributor, or wholesaler, distributor branch, or distributor representative shall have no control.

d. To cancel or terminate the franchise or dealer agreement of a motor vehicle dealer other than as hereinafter provided.

e. To fail or refuse to extend the franchise or dealer agreement of a motor vehicle dealer upon its expiration other than as hereinafter provided.

f. To offer a renewal, replacement, or succeeding franchise or dealer agreement containing terms and provisions the effect of which is to substantially change or modify the sales and service obligations or capital requirements of the motor vehicle dealer other than as hereinafter provided.

g. To offer to sell or lease, or to sell or lease, any new motor vehicle to any motor vehicle dealer at a lower actual price therefor than the actual price offered to any other motor vehicle dealer for the same model vehicle similarly equipped or to utilize any device including, but not limited to, sales promotion plans or programs which result in such lesser actual price and which are not offered to dealers of vehicles of the same line make; provided, however, that the provisions of this paragraph shall not apply to sale to a motor vehicle dealer for resale to any unit of the United States government, the state, or any of its political subdivisions.

h. To offer to sell or lease, or to sell or lease, any new motor vehicle to any person, except a wholesaler’s or distributor’s or manufacturer’s employees, at a lower actual price therefor than the actual price offered and charged to a motor vehicle dealer for the same model vehicle similarly equipped or to utilize any device which results in such lesser actual price and which are not offered to dealers of vehicles of the same line make; provided, however, that the provisions of this paragraph shall not apply to sales to a motor vehicle dealer for resale to any unit of the United States government, the state, or any of its political subdivisions.

i. To prevent or attempt to prevent by contract or otherwise any motor vehicle dealer from changing the executive management control of the motor vehicle dealer unless such change of executive management control will result in executive management control by a person or persons who are not of good moral character or who do not meet the manufacturer’s or wholesaler’s or distributor’s existing and reasonable capital standards and, with consideration given to the volume of sales and service of the new motor vehicle dealer, uniformly applied minimum business experience standards in the market area; provided, however, that where the manufacturer, or distributor, or wholesaler rejects a proposed change in executive management control, the manufacturer, or distributor, or wholesaler shall give written notice of his or her reasons to the motor vehicle dealer within 45 days of notice to the manufacturer, or wholesaler, or distributor by the motor vehicle dealer of the proposed change accompanied by information reflecting the identity, business experience and affiliations, and source of investment funds of the proposed new management.

j. To prevent or attempt to prevent by contract or otherwise any motor vehicle dealer from establishing or changing the capital structure of his or her dealership or the means by or through which he or she finances the operation thereof; provided, the dealer meets any reasonable capital standards agreed to between the motor vehicle dealer and the manufacturer, distributor, or wholesaler, who may require that the sources, method, and manner by which the motor vehicle dealer finances or intends to finance its operation, equipment, or facilities be fully disclosed.

k. To refuse to give effect to or prevent or attempt to prevent by contract or otherwise any motor vehicle dealer or any officer, partner, or stockholder of any motor vehicle dealer from selling or transferring any part of the interest of any of them to any other person unless such sale or transfer is to a transferee who would not otherwise qualify for a new motor vehicle dealer’s license issued by the State of Alabama or a political subdivision thereof or unless such sale or transfer is to a person who is not of good moral character or who does not meet the manufacturer’s or wholesaler’s or distributor’s existing and reasonable capital standards and, with consideration given to the volume of sales and service of the dealership, uniformly applied minimum business experience standards in the market area; provided, however, that where such a rejection of a transfer is made, the manufacturer or distributor or wholesaler shall give written notice of his or her reasons to the motor vehicle dealer within 60 days of notice to the manufacturer or wholesaler or distributor by the dealer of the proposed transfer, accompanied by information reflecting the identity of the new owner or owners, their business experience and affiliations, and the pro forma balance sheet and source of investment funds of the proposed new dealership. A manufacturer or distributor may exercise a contractual right of first refusal with respect to the sale or transfer of the interest of the dealer only if each of the following requirements are met:

1. The sale or transfer is not to a family member of an owner of the dealership, nor a managerial employee of the dealership owning 15 percent or more of the dealership, nor a corporation, partnership, or other legal entity owned by the existing owners of the dealership. For purposes of this subparagraph, a “family member” means the spouse of an owner of the dealership, the child, grandchild, brother, sister, or parent of an owner, or a spouse of one of those family members.

2. The manufacturer or distributor notifies the dealer in writing within 60 days after receipt of the completed application forms and related information generally used by a manufacturer or distributor to conduct its review and a copy of all agreements regarding the proposed transfer of its intent to exercise its right of first refusal or its rejection of the proposed transfer. If the manufacturer or distributor fails to notify the dealer of its exercise of the right of first refusal or its rejection of the proposed transferee within the 60-day period, the effect of such failure shall constitute approval of the proposed sale or transfer. If the manufacturer or distributor exercises a right of first refusal under this section, the transfer shall be deemed to be rejected.

3. The exercise of the right of first refusal provides to the dealer the same compensation as, or greater compensation than, the dealer had negotiated to receive from the proposed buyer or transferee.

4. The manufacturer or distributor agrees to pay the reasonable expenses, including reasonable attorneys’ and accountants’ fees that do not exceed the usual, customary, and reasonable fees charged for similar work done for other clients incurred by the proposed buyer or transferee before the manufacturer’s or distributor’s exercise of its right of first refusal in negotiating and implementing the contract for the sale or transfer. The proposed buyer or transferee shall provide to the manufacturer or distributor a written itemization of the expenses incurred within 30 days of the receipt by the proposed buyer or transferee of a written request from the manufacturer or distributor for an accounting of the expenses. The manufacturer or distributor shall make payment of these expenses within 30 days of exercising the right of first refusal.

l. To unreasonably and without notice to existing motor vehicle dealers, as hereinafter provided, enter into a franchise with an additional motor vehicle dealer who intends to conduct its dealership operations from a place of business situated within the relevant market area of an existing motor vehicle dealer or motor vehicle dealers representing the same line make. The appointment of a successor motor vehicle dealer at the same location as its predecessor or within a two-mile radius therefrom within two years from the date on which its predecessor ceased operations or was terminated, whichever occurred later, shall not be construed as the entering into of an additional franchise. Any manufacturer, distributor, or wholesaler, factory branch, factory representative, distributor branch, or distributor representative which intends to enter into an additional franchise shall, at least 60 days prior to granting such franchise, give written notice of its intention to do so to each motor vehicle dealer of the same line make within the relevant market area. Such notice shall state the date on or after which such proposed franchise shall be granted or entered into. Prior to the date set forth in the notice on or after which such franchise will be entered into, any such motor vehicle dealer may petition a court of competent jurisdiction to determine whether such appointment or proposed appointment is unreasonable in which action the manufacturer, wholesaler, or distributor shall have the burden of proof that such action is not unreasonable. No bond shall be required as a precondition to entry of an injunction enjoining appointment of an additional franchise. Such petition shall be entitled to a speedy trial. In determining whether such proposed appointment is unreasonable, the court shall consider all pertinent circumstances. These may include but are not limited to:

1. Whether the establishment of such additional franchise is warranted by economic and marketing conditions including anticipated future changes.

2. The past, present, and anticipated retail sales and service business transacted by the objecting motor vehicle dealer or dealers and other motor vehicle dealers of the same line make with a place of business in the relevant market area.

3. The investment made and obligations incurred by the objecting motor vehicle dealer or dealers and other motor vehicle dealers of the same line make with a place of business in the relevant market area.

4. Whether it is beneficial or injurious to the public welfare for an additional franchise to be established.

m. To prospectively assent to a release, assignment, novation, agreement, waiver, or estoppel that does any of the following:

1. Relieves any person from any liability or obligation under this chapter.

2. Requires any controversy between a new motor vehicle dealer and a manufacturer to be referred to any person other than the duly constituted courts of this state or the United States, if the referral would be binding on the new motor vehicle dealer.

3. Limits the entitlement to recover damages under this chapter or other Alabama law.

4. Specifies the jurisdiction or venues in which disputes arising with respect to the franchise shall or shall not be submitted for resolution or otherwise prohibits a dealer from bringing an action in the courts of Alabama.

5. Waives the right to trial by jury.

n. To prevent or refuse to give effect to the succession to the ownership or management control of a dealership upon the death or incapacity of a motor vehicle dealer to any legatee or devisee under the will of a dealer or to an heir under the laws of descent and distribution of this state unless the successor is a person who is not of good moral character or who does not meet the manufacturer’s or distributor’s or wholesaler’s existing and reasonable capital standards and, with consideration given to the volume of the sales and service of the dealership, uniformly applied minimum business experience standards in the market area; provided, however, that where such a rejection of succession is made, the manufacturer or distributor or wholesaler shall give written notice of his or her reasons to the proposed successor within 60 days of notice to the manufacturer or wholesaler or distributor by the proposed successor of his or her intent to succeed to the ownership or management of the dealership, accompanied by information reflecting the identity of the new owner or owners, their business experience and affiliation, and the pro forma balance sheet and source of investment funds of the proposed new dealership. This section does not preclude the owner of a new motor vehicle dealer from designating any person as his or her successor by written instrument filed with the manufacturer or distributor and, in the event there is a conflict between such written instrument and the provisions of this section, the written instrument shall govern.

o. To fail to indemnify and hold harmless its motor vehicle dealers against any losses, including, but not limited to, court costs and reasonable attorneys’ fees, or damages arising out of complaints, claims, or lawsuits, including, but not limited to, strict liability, negligence, misrepresentation, warranty (express or implied), or rescission of the sale where the complaint, claim, or lawsuit relates to any of the following:

1. The manufacture, assembly, or design of new motor vehicles, parts, or accessories.

2. A defect in any forms furnished to the dealer or in the written instructions for the completion of such forms by the manufacturer, an affiliate of the manufacturer, or person controlled by the manufacturer used in connection with the sale, lease, or financing of a vehicle and associated products, unless the dealer improperly completes the forms or makes misrepresentations contrary either to the terms of the forms or the written instructions for their completion.

3. Other functions by the manufacturer, beyond the control of the dealer, including, without limitation, the selection by the manufacturer of parts or components for the vehicle, or any damages to merchandise occurring in transit to the dealer where the carrier is designated by the manufacturer.

p. To increase prices of new motor vehicles which the new motor vehicle dealer had ordered for retail consumers prior to the dealer’s receipt of the written official price increase notification. A sales contract signed by a retail consumer shall constitute evidence of each such order; provided that the vehicle is in fact delivered to that customer. In the event of manufacturer price reductions or cash rebates, the amount of any such reduction or rebate received by a dealer shall be passed on to the retail consumer by the dealer if the retail price was negotiated on the basis of the previous higher price to the dealer. Price reductions shall apply to all vehicles in the dealer’s inventory which were subject to the price reduction. Price differences applicable to new model or series motor vehicles at the time of the introduction of new models or series shall not be considered a price increase or price decrease. Price changes caused by any of the following shall not be subject to the provisions of this paragraph:

1. The addition to a motor vehicle of required or optional equipment pursuant to state or federal law.

2. Revaluation of the United States dollar, in the case of foreign-made vehicles or components.

3. An increase in transportation charges due to increased rates imposed by common or contract carriers.

q. To offer any refunds or other types of inducements to any person for the purchase of new motor vehicles of a certain line make to be sold to the state or any political subdivision thereof without making the same offer to all other new motor vehicle dealers in the same line make within the state.

r. To release to any outside party, except under subpoena, or as otherwise required by law or in an administrative, judicial, or arbitration proceeding, any business, financial, or personal information which may be from time to time provided by the dealer to the manufacturer, without the express written consent of the dealer.

s. To own an interest in a new motor vehicle dealership, to operate or control a dealership, to make direct sales or leases of new motor vehicles to the public in Alabama, or to own, operate, or control a facility for performance of motor vehicle warranty or repair service work, except as follows:

1. The manufacturer or distributor is owning or operating a new motor vehicle dealership or a warranty repair facility for a temporary period of not more than 24 months, as long as the new motor vehicle dealership or warranty repair center is for sale at a reasonable price and on reasonable terms and conditions; or

2. The manufacturer’s or distributor’s participation is in a bona fide relationship with an independent person who satisfies both of the following:

(i) Is required to make significant investment in the new motor vehicle dealership or warranty repair center subject to loss.

(ii) Operates the dealership or warranty repair center and may reasonably be expected to acquire full ownership of the dealership or warranty repair center within a reasonable time and under reasonable terms and conditions.

3. The manufacturer or distributor is selling or leasing new motor vehicles in Alabama to its qualified vendors, not-for-profit organizations, fleets, or the federal, state, or local government if sold or leased and delivered through new motor vehicle dealers in this state. The manufacturer or distributor is selling or leasing new motor vehicles in Alabama to its employees and employees’ families if delivered through new motor vehicle dealers in this state. The manufacturer or distributor is implementing a program to sell or lease or offer to sell or lease new motor vehicles through new motor vehicle dealers in this state.

4. The manufacturer or distributor owns a passive interest of not more than 10 percent in a publicly traded corporation held exclusively for investment purposes.

5. A manufacturer of recreational vehicles which as of December 31, 1999, owns, operates, or controls a facility in this state for performance of motor vehicle warranty repair or service work on recreational vehicles manufactured by that manufacturer.

6. The manufacturer or distributor is owning, operating, or controlling an entity primarily engaged in the business of renting passenger and commercial motor vehicles and industrial and construction equipment, as well as activities incidental to the businesses, including warranty and repair work on vehicles that it owns, previously owned, or takes in trade.

7. A manufacturer or distributor that meets all of the following requirements:

(i) Manufactures or distributes engines for installation in a vehicle having as its primary purpose the transport of a person or persons or property on a public highway and having a gross vehicle weight rating of more than 16,000 pounds, provided that the manufacturer does not otherwise manufacture motor vehicles.

(ii) Owned, operated, or controlled a new motor vehicle dealership or a warranty repair facility in this state prior to January 1, 2016.

(iii) Does not own or operate more than three new motor vehicle dealership or warranty repair facilities in this state.

(iv) Does not regularly provide motor vehicle warranty or repair service work in this state to noncommercial single-family passenger motor vehicles having a gross vehicle weight rating of less than 16,000 pounds unless the repair is not reasonably available at a motor vehicle dealer that sells new motor vehicles with a gross vehicle weight rating of less than 16,000 pounds or at the request of such motor vehicle dealer.

(v) Avoids any acts or practices the effect of which may be to lessen or eliminate competition that provided to dealers on materially equal terms access to all support for completing repairs, including, but not limited to, parts and assembles, training, and technical service bulletins and other information concerning repairs that the manufacturer provides to facilities owned, operated, or controlled by the manufacturer.

t. To make any material change in any franchise agreement without giving the dealer written notice by certified mail of such change at least 60 days prior to the effective date of such change.

u. To fail to pay or otherwise compensate its new motor vehicle dealers for sales incentives, service incentives, rebates, or other forms of incentive compensation earned by the dealer as a consequence of incentive programs of the manufacturer. The manufacturer shall have the right to audit any such incentive payments made to the dealer and to charge back the dealer for any fraudulent claims for incentive payments made to the dealer for a period not to exceed 12 months from the date the claim was paid. A manufacturer shall not disapprove claims for which the dealer has received preauthorization from the manufacturer or its representative nor shall the manufacturer unreasonably disapprove a claim solely based on the dealer’s incidental failure to comply with a specific claim processing requirement that results only in a clerical error or administrative error; rather, a claim denial must be based upon a material defect and deviation from the reasonable written claim submission requirements of the manufacturer. In the event of neglect, oversight, or mistake by the dealer, a dealer may submit an amended claim, or may submit a claim not submitted within the time required by the manufacturer, for sales incentives, service incentives, rebates, or other forms of incentive compensation up to 120 days from the date on which such claim was first submitted or could have been submitted.

v. To fail or refuse to offer its same line make franchised dealers all models of new motor vehicles manufactured for that line make and offered to any dealer in this state. No unreasonable additional requirements, over the requirements originally required to obtain a franchise from the manufacturer, may be required of existing franchised dealers to receive any model by that line make. The provisions in this paragraph shall not apply to recreational vehicles and reasonable requirements of a manufacturer that its dealers obtain tools or diagnostic equipment to properly service its line make of motor vehicles. The failure to deliver any such new motor vehicle shall not be considered a violation of this section if the failure is due to a lack of manufacturing capacity or to a strike or labor difficulty, a shortage of materials, a freight embargo, or any other cause over which the manufacturer has no control.

w. To prohibit a motor vehicle dealer from changing the location of the new motor vehicle dealership to another location within the dealer’s assigned area of responsibility if the refusal to approve the relocation is not reasonable under the circumstances.

x. To charge back, deny vehicle allocation, withhold payments, or take any other adverse actions against a dealer because of a sale of a new motor vehicle which is exported from the United States unless the manufacturer can prove that the dealer knew or reasonably should have known on the date of the sale that the new motor vehicle was to be exported. A dealer is rebuttably presumed to have no knowledge of the intended export if the vehicle is sold by the dealer to a United States resident who titles and registers the vehicle in any state in the United States.

y. To condition the sale, transfer, relocation, or renewal of a franchise or dealer agreement or to condition sales, service, parts, or finance incentives upon site control or an agreement to renovate or make substantial improvements to a facility; provided, however, that voluntary and non-coerced acceptance of such conditions by the dealer in writing, including, but not limited to, a written agreement for which the dealer has accepted separate and valuable consideration, shall not constitute a violation.

z. To assign or change a dealer’s area of responsibility under the franchise or dealer agreement arbitrarily or without due regard to the present or projected future pattern of motor vehicle sales and registrations within the dealer’s market area and without first having provided the dealer with written notice of the change in the dealer’s area of responsibility and a detailed description of the change and reasons therefor.

(Acts 1981, No. 81-390, p. 596, §4; Acts 1991, No. 91-212, p. 398, §1; Act 2000-267, p. 415, §1; Act 2010-198, p. 300, §1; Act 2016-357, p. 879, §1; Act 2018-188, §1.)

§ 8-20-4.1 Obligation to Act in Good Faith and Deal Fairly

Every dealer agreement entered into under Act 2010-198 shall impose on the parties the obligation to act in good faith and to deal fairly.

(Act 2010-198, p. 300, §2.)

§ 8-20-5 Limitations on Cancellations, Modifications, Terminations, and Nonrenewals of Franchise Relationships

(a) Notwithstanding the terms, provisions, or conditions of any agreement or franchise or notwithstanding the terms or provisions of any waiver, no manufacturer shall cancel, terminate, modify, fail to renew, or refuse to continue any franchise relationship with a licensed new motor vehicle dealer unless the manufacturer has:

(1) Satisfied the notice requirement of this section.

(2) Acted in good faith as defined in this chapter.

(3) Has good cause for the cancellation, termination, modification, nonrenewal, or noncontinuance.

(b) Notwithstanding the terms, provisions, or conditions of any agreement or franchise or the terms or provisions of any waiver, good cause shall exist for the purposes of a termination, cancellation, modification, nonrenewal, or noncontinuance when:

(1) There is a failure by the new motor vehicle dealer to comply with a provision of the franchise which provision is both reasonable and of material significance to the franchise relationship, provided that the manufacturer first acquired actual or constructive knowledge of such failure not more than 180 days prior to the date on which notification is given by the manufacturer pursuant to the requirements of this section.

(2) If the failure by the new motor vehicle dealer to comply with a provision of the franchise relates to the performance of the dealer in sales or service, then good cause shall be defined as the failure of the dealer to substantially comply with the reasonable performance provisions of the franchise if:

a. The new motor vehicle dealer was apprised by the manufacturer in writing of such failure and each of the following occur:

1. The notification stated that notice was provided of failure of performance pursuant to this chapter.

2. The new motor vehicle dealer was afforded a reasonable opportunity, for a period of not less than six months, to exert good faith efforts to carry out such provisions.

3. The new motor vehicle dealer did not demonstrate substantial compliance with the manufacturer’s performance standards during such period and that the failure to demonstrate such compliance was not due to factors which were beyond the control of such dealer.

b. Such failure thereafter continued within the period which began not more than 180 days before the date notification of termination, cancellation, modification, or nonrenewal was given pursuant to this section.

(c) The manufacturer shall have the burden of proof for showing that it has acted in good faith, that the notice requirements have been complied with, and that there was good cause for the franchise termination, cancellation, modification, nonrenewal, or noncontinuance.

(d) If a dealer brings an action in a court of competent jurisdiction to challenge the cancellation, termination, or nonrenewal of a franchise or dealer agreement by a manufacturer under this section, such franchise or dealer agreement shall remain in full force and effect and such dealer shall retain all rights and remedies pursuant to the terms and conditions of such franchise or dealer agreement, including, but not limited to, the right to sell or transfer the dealer’s ownership interest, until a final determination by a court of competent jurisdiction, including appeal, unless extended by the court for good cause. This subsection shall not apply to a cancellation, termination, or nonrenewal of a franchise or dealer agreement based upon any of the reasons set forth in subsection (e)(2).

(e) Notwithstanding the terms, provisions, or conditions of any agreement or franchise or the terms or provisions of any waiver, prior to the termination, cancellation, modification, or nonrenewal of any franchise or dealer agreement, the manufacturer shall furnish notification of such termination, cancellation, modification, or nonrenewal to the new motor vehicle dealer as follows:

(1) In the manner described in subsection (f).

(2) Not less than 90 days prior to the effective date of such termination, cancellation, modification, or nonrenewal or not less than 30 days prior to the effective date of such termination, cancellation, or nonrenewal with respect to any of the following:

a. Filing of any petition by or against the new motor vehicle dealer under any bankruptcy or receivership law.

b. Willful or intentional misrepresentation made by the new motor vehicle dealer with the express intent to defraud the manufacturer or distributor.

c. Failure of the new motor vehicle dealer to conduct its customary sales and service operations during its customary business hours for seven consecutive business days.

d. Final conviction (including appeal) of the new motor vehicle dealer, principal owner, or principal executive manager of any felony.

(f) Notification under this section shall be in writing; shall be by certified mail or personally delivered to the new motor vehicle dealer; and shall contain:

(1) A statement of intention to terminate the franchise, cancel the franchise, modify the franchise, or not to renew the franchise.

(2) A statement of the reasons for the termination, cancellation, modification, or nonrenewal.

(3) The date on which such termination, cancellation, modification, or nonrenewal takes effect.

(g) Upon the termination, cancellation, or nonrenewal by the manufacturer of any franchise or dealer agreement for good cause, the new motor vehicle dealer shall be paid fair and reasonable compensation by the manufacturer for the:

(1) New motor vehicle inventory of the current and previous model year which has been acquired from the manufacturer. Any new and unused motor vehicle repurchased by the manufacturer shall be repurchased at the net cost to the dealer.

(2) Supplies and parts acquired by the new motor vehicle dealer from the manufacturer, its approved sources, or original manufacturer supplies and parts acquired from other dealers in the ordinary course of business, within seven years prior to the effective date of the termination, cancellation, or nonrenewal. Supplies and parts shall be repurchased by the manufacturer at the net cost to the dealer without any restocking fees or other fees.

(3) Equipment, signs, and furnishings acquired by the new motor vehicle dealer from the manufacturer or its approved sources. The dealer shall be paid either the fair market value of the equipment, signs, and furnishings as of the date of termination or the value of the equipment, signs, and furnishings based on a six-year straight line schedule of depreciation, whichever is greater.

(4) Special tools and automotive service equipment that were required and designated as special tools or equipment by the manufacturer. The dealer shall be paid either the fair market value of the special tools and automotive service equipment as of the date of termination or the value of the special tools and automotive service equipment based on a six-year straight line schedule of depreciation, whichever is greater.

(5) The net cost of any upgrades or alterations made by the dealer to the dealership facilities which were recommended in writing by the manufacturer and made within two years prior to the effective date of termination.

(6) Dealership facilities, if the facilities were required to be purchased or constructed as a precondition to obtaining the franchise or to its renewal by the manufacturer. The manufacturer shall use its best efforts to locate a purchaser who will offer to purchase the facilities at a reasonable price. If the manufacturer does not locate a purchaser within a reasonable time, the manufacturer will pay the dealer an amount equivalent to the reasonable rental value of such facilities for three years during which time the manufacturer shall be entitled to possession of the facilities. If the facilities were leased from a lessor other than the manufacturer and the facilities were required as a precondition to obtaining the franchise or to its renewal by the manufacturer, then the manufacturer shall use its best efforts to locate a lessee who will offer to lease the premises for a reasonable term at a reasonable rent. If the manufacturer does not locate a lessee within a reasonable time, the manufacturer shall pay such rent for three years or the remainder of the term of the lease, whichever is less and the manufacturer shall have the option to succeed to the rights of the dealer under the lease. If the dealership facility is used for more than one line make, the rental payment by the manufacturer shall be prorated for each line make based on the floor space allocated to each line make.

(h) Upon the termination, cancellation, or nonrenewal by the manufacturer of any franchise without good cause, the new motor vehicle dealer shall be paid fair and reasonable compensation by the manufacturer for the items described in subdivisions (g)(1) through (g)(6) and for the dealership facilities, if the facilities were required to be purchased or constructed as a precondition to obtain the franchise or to its renewal by the manufacturer. If the facilities were leased and the lease was required as a precondition to obtaining the franchise or to its renewal by the manufacturer, then the manufacturer shall be liable for payment of the rent for the remainder of the term of the lease during which time the manufacturer shall be entitled to possession of the facilities. If the dealership facility is used for more than one line make, the rental payment by the manufacturer shall be prorated based on the floor space allocated to each line make. The manufacturer shall also pay the dealer fair and reasonable compensation for the value of the dealership within six months after the date of termination, cancellation, or nonrenewal.

(i) Upon the termination, cancellation, or nonrenewal by the manufacturer of any franchise as a result of willful or intentional misrepresentations made by the new motor vehicle dealer with the express intent to defraud the manufacturer or distributor or upon the termination, cancellation, or nonrenewal by the motor vehicle dealer, the new motor vehicle dealer shall be paid fair and reasonable compensation by the manufacturer for the items described in subdivisions (g)(1) through (g)(6).

(j)(1) Upon the termination, cancellation, or nonrenewal by the manufacturer occurring as a result of the cessation of a line make or as a result of the manufacturer’s selling or otherwise transferring some or all of the assets essential to the manufacture or distribution of the line make, the new motor vehicle dealer shall be paid fair and reasonable compensation by the manufacturer for the items described in subdivisions (g)(1) through (g)(6). The manufacturer shall also compensate the dealer in an amount equal to the greater of:

a. The actual pecuniary loss that the dealer suffered as a result of the termination, cancellation, or nonrenewal.

b. The fair market value of the franchise determined as of:

1. The date the manufacturer announces the action that results in termination, cancellation, or nonrenewal.

2. The date the action that resulted in the termination, cancellation, or nonrenewal first became general knowledge.

3. The day 12 months prior to the date on which the notice of termination, cancellation, or nonrenewal is issued, whichever is greater.

(2) If, as a result of the circumstances described above, an entity other than the original manufacturer of a line make becomes the manufacturer of the line make and intends to distribute motor vehicles of that line make in Alabama, the entity shall honor the franchise agreements of the original manufacturer and its dealers or offer those dealers a new franchise agreement for the line make on substantially similar terms and conditions. A dealer which elects to remain a dealer with the new entity or which enters into a new franchise agreement with this entity shall not be entitled to the compensation set forth in subdivision (1).

(3) This subsection shall not apply in the event of a termination or cessation of a line make by a recreational vehicle manufacturer.

(k) The fair and reasonable compensation to the dealer shall be paid by the manufacturer within 90 days after tender by the dealer of the items in subdivisions (g)(1) through (g)(4) at the dealership premises, provided the new motor vehicle dealer has clear title to the inventory and other items and is in a position to convey that title to the manufacturer.

(l) Subsections (g) through (k) shall not apply upon the termination, cancellation, or nonrenewal of a franchise by a motor home or motorcycle dealer.

(Acts 1981, No. 81-390, p. 596, §5; Acts 1991, No. 91-212, p. 398, §1; Act 2010-198, p. 300, §1.)

§ 8-20-6 Predelivery Obligations

Every manufacturer or wholesaler or distributor, factory branch, factory representative, distributor branch or distributor representative shall specify to the motor vehicle dealer the delivery and preparation obligations of its motor vehicle dealers prior to delivery of new motor vehicles to retail buyers. A copy of the delivery and preparation obligations of its motor vehicle dealers and a schedule of the compensation to be paid to its motor vehicle dealers for the work and services they shall be required to perform in connection with such delivery and preparation obligations shall be presented to the dealer and the obligations specified therein shall constitute any such dealer’s only predelivery obligations as between such dealer and such manufacturer or wholesaler or distributor. The compensation as set forth on said schedule shall be reasonable.

(Acts 1981, No. 81-390, p. 596, §6.)

§ 8-20-7 Warranty Obligations to Dealers; Reasonable Compensation

(a) For purposes of this section, the following words have the following meanings:

(1) PRE-DELIVERY SERVICE. All work and services, except warranty work, performed on a new motor vehicle by a motor vehicle dealer at the direction of the warrantor prior to the delivery of the vehicle to the first retail consumer.

(2) REPAIR ORDER. An invoice, paid by a retail customer, and closed as of the time of submission, encompassing one or more repairs to a motor vehicle, and reflecting, in the case of a parts markup submission, the cost of each part and the sale price thereof, and in the case of a labor rate submission, the total charges for labor and the total number of hours that produced the charges, which invoice may be submitted in electronic form.

(3) QUALIFIED REPAIR. A repair to a motor vehicle paid by a retail customer, which would have come within the warrantor’s new motor vehicle warranty, but for the motor vehicle having exceeded the chronological or mileage limit of such warranty, and which does not constitute any of the work encompassed by subdivision (f)(5).

(4) QUALIFIED REPAIR ORDER. A repair order which encompasses, in whole or in part, a qualified repair or repairs.

(5) WARRANTOR. A manufacturer, distributor, or wholesaler, factory branch, factory representative, distributor branch, or distributor representative.

(6) WARRANTY WORK. All labor, including that of a diagnostic character, performed, and all parts, including original or replacement parts, and components, including engine, transmission, and other parts assemblies, installed by motor vehicle dealers on motor vehicles which are reasonably incurred by motor vehicle dealers, other than the incidental expenses incurred in performing labor and installing parts on motor vehicles, in fulfilling a warrantor’s obligations under a new motor vehicle warranty, a recall, or a certified pre-owned warranty, to consumers, including, but not limited to, the expense of shipping or returning defective parts to the warrantor, when required by the warrantor.

(b) Every warrantor shall specify in writing to each of its motor vehicle dealers the dealer’s obligation for pre-delivery service and warranty service on its products, shall compensate the motor vehicle dealer for the service required of the dealer by the warrantor, and shall provide the dealer the schedule of compensation to be paid the dealer for parts, work, and service in connection with the services, and the time allowance for the performance of such work and service.

(c) In no event shall the schedule of compensation fail to include reasonable compensation for diagnostic work, service, labor, and parts. Time allowances for the diagnosis and performance of warranty work and service shall be reasonable and adequate for the work to be performed. In no event shall such compensation of a dealer for warranty services including labor and parts, be less than the rates or prices charged by the dealer for like service to retail customers for nonwarranty service, repairs, and parts, provided that such prices and rates are not unreasonable. This subsection does not apply to compensation for parts, systems, fixtures, appliances, furnishings, accessories, and features of a motor home that are designed, used, and maintained primarily for non-vehicular residential purposes, or parts related to motorcycle repairs.

(d) It is a violation of this section for any warrantor to fail to perform any warranty obligations under the motor vehicle manufacturer’s warranty, or to fail to include in written notices of factory recalls to dealers the expected date by which necessary parts and equipment will be available to dealers for the correction of such defects, or to fail to compensate any of the motor vehicle dealers for repairs effected by the recall.

(e) All claims made by new motor vehicle dealers pursuant to this section for such labor and parts shall be paid within 30 days following their approval; provided, however, that the warrantor retains the right to audit such claims and to charge back the dealer for any fraudulent claims for a period not to exceed 12 months from the date the claim was paid. All such claims shall be either approved or disapproved within 30 days after their receipt on forms and in the manner specified by the warrantor, and any claim not specifically disapproved in writing within 30 days after the receipt shall be construed to be approved and payment must follow within 30 days. A warrantor shall not disapprove claims for which the dealer has received preauthorization from the warrantor or its representative nor shall the warrantor unreasonably disapprove a claim solely based on the dealer’s incidental failure to comply with a specific claim processing requirement that results only in a clerical error or administrative error; rather a claim denial must be based upon a material defect and deviation from the reasonable written claim submission requirements of the manufacturer. In the event of neglect, oversight, or mistake by the dealer, a dealer may submit an amended claim, or may submit a claim not submitted within the time required by the warrantor, for labor and parts up to 120 days from the date on which the claim was first submitted or could have been submitted.

(f)(1) For the purposes of this section, reasonable compensation shall be determined as provided in this subsection.

(2) The markup customarily charged by the dealer for parts or its labor rate may be established at the election of the dealer by the dealer submitting to the warrantor, either by electronic transmission or tangible delivery, all consecutive repair orders that include 100 sequential repair orders reflecting qualified repairs, or all repair orders closed during any period of 90 consecutive days, whichever produces the fewer number of repair orders, covering repairs made no more than 180 days before the submission and declaring the parts markup or labor rate.

(3) The dealer shall calculate its labor rate by determining the total charges for labor from the qualified repairs submitted and dividing that amount by the total number of hours that produced the charges. The dealer shall calculate its parts markup by determining the total charges for parts from the qualified repairs submitted, dividing that amount by its total cost of the purchase of the parts, subtracting one from that amount, and multiplying by 100 to produce a percentage.

(4) A motor vehicle dealer seeking to establish or modify its warranty reimbursement labor rate, parts markup, or both, not more frequently than once per 12-month period, shall submit to the warrantor one of the following:

a. A single set of repair orders for purposes of calculating both its labor rate and parts markup.

b. A set of repair orders for purposes of calculating only its labor rate or for purposes of calculating only its parts markup.

(5) In calculating the rate customarily charged by the dealer for parts and labor for purposes of this subsection, the following shall not be included in the calculation of the rate:

a. Repairs that are the subject of manufacturer or distributor discounts, such as special events, specials, promotions, coupons, or service campaigns.

b. Repairs of motor vehicles owned by the dealer.

c. Routine maintenance, including, but not limited to, replacements of fluids, filters, batteries, bulbs, belts, nuts, bolts, or fasteners, unless provided in the course of, and related to, an otherwise qualified repair.

d. Installations of accessories.

e. Replacements of or work on tires, wheels, including alignments, wheel or tire rotations, or replacements of brake drums, rotors, shoes, or pads.

f. Vehicle reconditioning.

g. Safety or emission inspections required by law.

h. Repairs for which volume discounts have been negotiated with government agencies.

i. Body shop repairs, including repairs covered by insurance, for conditions caused by collision, road hazard, the force of the elements, vandalism, theft, or the negligence or deliberate act of the owner, operator, or a third party.

j. Parts that do not have individual part numbers.

k. Warrantor approved and reimbursed goodwill repairs or reimbursements.

l. Window replacement, window etching, window tint, protective film, or other masking products.

(6) a. The submitted parts markup or labor rate shall go into effect 45 days after the warrantor’s receipt of its submission, unless, within that period, the warrantor reasonably substantiates that the submission is materially incomplete, materially inaccurate, or is materially unreasonable and provides a full explanation of any reasons that the submitted markup or rate is materially incomplete, materially inaccurate, or materially unreasonable, evidence validating each reason, a copy of all calculations used by the warrantor demonstrating any material inaccuracy, and a proposed adjusted markup or rate provided that the dealer’s submission is materially accurate based upon the qualified repair orders submitted by the dealer. In that event, the warrantor may submit only one rebuttal to the dealer, and may not thereafter add to, expand, supplement, or otherwise modify any element thereof, including, but not limited to, the warrantor’s grounds for contesting the parts markup or labor rate, unless the warrantor did not possess the information at the time of its rebuttal, or if the information is used for the purpose of rebutting the dealer’s response to the warrantor’s rebuttal.

b. If a warrantor determines from any set of repair orders submitted under this subsection that the labor rate or parts markup calculated under this subsection is substantially higher or lower than the rate currently on record with the warrantor for labor or parts, or both, the warrantor, in accordance with this subsection, may request additional repair orders for a period of 60 days prior to or 60 days subsequent to the time period for which the repair orders were submitted for purposes of an alteration, and shall have 45 days from receiving the additional repair orders to rebut the presumption that the dealer’s proposed markup and labor rates are reasonable.

(7) If the dealer and the warrantor do not agree on the parts markup or labor rate, the dealer may file an action in a court having jurisdiction in this state within 120 days of receiving the warrantor’s written rejection of the dealer’s proposed parts markup or labor rate. In that action, the warrantor shall have the burden of proving by a preponderance of the evidence that the dealer’s submitted parts markup or labor rate, or both, was materially incomplete, materially inaccurate, or materially unreasonable. Upon a court decision in favor of the dealer finding that the labor or parts rate shall be more than proposed by the warrantor, any increase in the dealer’s parts markup or labor rate arising from the proceeding shall be effective retroactively to the date 45 days following the warrantor’s receipt of the original submission to the dealer or to the warrantor.

(8) In the determination of what constitutes materially unreasonable compensation under this section, relevant factors include, but are not limited to, the prevailing wage rates paid by similarly situated dealers in the state.

(Acts 1981, No. 81-390, p. 596, §7; Acts 1991, No. 91-212, p. 398, §1; Act 2000-267, p. 415, §1; Act 2010-198, p. 300, §1; Act 2022-104, §1.)

§ 8-20-7.1 Compensation of Dealers for Recall Repairs

(a) For the purposes of this section, the following words have the following meanings:

(1) MANUFACTURER. A manufacturer, distributor or wholesaler, factory branch, or distributor branch.

(2) STOP-SALE ORDER. A notification issued by a manufacturer to its franchised new motor vehicle dealers stating that certain used vehicles in inventory shall not be sold or leased, at either retail or wholesale, due to a federal safety recall for a defect or a noncompliance, or a federal emissions recall.

(b) A manufacturer shall compensate its new motor vehicle dealers for all labor and parts required by the manufacturer to perform recall repairs. Compensation for recall repairs shall be reasonable. If parts or a remedy are not reasonably available to perform a recall service or repair on a used vehicle held for sale by a dealer authorized to sell and service new vehicles of the same line-make within 30 days of the manufacturer issuing the initial notice of recall, and the manufacturer has issued a Stop-Sale or Do-Not-Drive order on the vehicle, the manufacturer shall compensate the dealer at a prorated rate of at least one percent of the value of the vehicle per month beginning on the date that is 30 days after the date on which the Stop-Sale or Do-Not-Drive order was provided to the dealer until the earlier of either of the following:

(1) The date the recall or remedy parts are made available.

(2) The date the dealer sells, trades, or otherwise disposes of the affected used motor vehicle.

(c) The value of a used vehicle shall be the average trade-in value for used vehicles as indicated in an independent third party guide for the year, make, and model of the recalled vehicle.

(d) This section shall apply only to used vehicles subject to safety or emissions recalls pursuant to and recalled in accordance with federal law and regulations adopted thereunder and where a Stop-Sale or Do-Not-Drive order has been issued and repair parts or remedy remain unavailable for 30 days or longer. This section further shall apply only to new motor vehicle dealers holding an affected used vehicle for sale:

(1) In inventory at the time the Stop-Sale or Do-Not-Drive order was issued; or

(2) Which was taken in the used vehicle inventory of the dealer as a consumer trade-in incident to the purchase of a new vehicle from the dealer after the Stop-Sale or Do-Not-Drive order was issued; and

(3) That is a line-make that the dealer is franchised to sell or on which the dealer is authorized to perform recall repairs.

(e) Subject to the audit provisions of subsection (d) of Section 8-20-7, it shall be a violation of this section for a manufacturer to reduce the amount of compensation otherwise owed to an individual new motor vehicle dealer, whether through a chargeback, removal of the individual dealer from an incentive program, or reduction in amount owed under an incentive program solely because the new motor vehicle dealer has submitted a claim for reimbursement under this section. This subsection shall not apply to an action by a manufacturer that is applied uniformly among all dealers of the same line-make in the state.

(f) All reimbursement claims made by new motor vehicle dealers pursuant to this section for recall remedies or repairs, or for compensation where no part or repair is reasonably available and the vehicle is subject to a Stop-Sale or Do-Not-Drive order, shall be subject to the same limitations and requirements as a warranty reimbursement claim made under subsection (d) of Section 8-20-7. In the alternative, a manufacturer may compensate its franchised dealers under a national recall compensation program, provided the compensation under the program is equal to or greater than that provided under subsection (b) or as the manufacturer and dealer otherwise agree.

(g) A manufacturer may direct the manner and method in which a dealer must demonstrate the inventory status of an affected used motor vehicle to determine eligibility under this section, provided that the manner and method may not be unduly burdensome and may not require information that is unduly burdensome to provide.

(h) Nothing in this section shall require a manufacturer to provide total compensation to a dealer which would exceed the total average trade-in value of the affected used motor vehicle as originally determined under subsection (c).

(i) Any remedy provided to a dealer under this section is exclusive and may not be combined with any other state or federal recall compensation remedy.

(Act 2017-148, §1.)

§ 8-20-8 Warranty Obligations of Manufacturers and Dealers to Consumers

Every manufacturer and new motor vehicle dealer shall fulfill the terms of any express or implied warranty concerning the sale of a new motor vehicle to the public of the line make which is the subject of a contract or franchise agreement between the parties. If it is determined by a court of competent jurisdiction that either the manufacturer or new motor vehicle dealer, or both, have violated an express or implied warranty, the court shall add to any award or relief granted an additional award for reasonable attorney’s fees.

(Acts 1981, No. 81-390, p. 596, §8.)

§ 8-20-9 Transportation Damages

(a) Notwithstanding the terms, provisions, or conditions of any agreement or franchise, the new motor vehicle dealer is solely liable for damages to new motor vehicles occurring after acceptance of the new motor vehicle from the carrier and before delivery to the ultimate purchaser.

(b) Notwithstanding the terms, provisions, or conditions of any agreement or franchise, the manufacturer is liable for all damages to motor vehicles occurring before delivery to a carrier or transporter. If a new motor vehicle dealer determines the method of transportation, the risk of loss passes to the dealer upon delivery of the vehicle to the carrier. In every other instance, the risk of loss remains with the manufacturer until such time as the new motor vehicle dealer or his designee accepts the vehicle from the carrier.

(c) With respect to new or used vehicles sold or otherwise transferred by the manufacturer to a new motor vehicle dealer, the manufacturer shall notify in writing the new motor vehicle dealer of all damage and repairs made to such vehicle which is known to the manufacturer.

(Acts 1981, No. 81-390, p. 596, §9; Acts 1991, No. 91-212, p. 398, §1.)

§ 8-20-10 Dealer’s Right of Free Association with Other Dealers

Every motor vehicle dealer shall have the right of free association with other motor vehicle dealers for any lawful purpose.

(Acts 1981, No. 81-390, p. 596, §10.)

§ 8-20-11 Remedies

Notwithstanding the terms, provisions, or conditions of any dealer agreement or franchise or the terms or provisions of any waiver, and notwithstanding any other legal remedies available, any person who is injured in his business or property by a violation of this chapter by the commission of any unfair and deceptive trade practices, or because he refuses to accede to a proposal for an arrangement which, if consummated, would be in violation of this chapter, may bring a civil action in a court of competent jurisdiction in this state to enjoin further violations, to recover the damages sustained by him together with the costs of the suit, including a reasonable attorney’s fee.

(Acts 1981, No. 81-390, p. 596, §11.)

§ 8-20-12 Time Limitation on Bringing of Civil Actions; Time of Accrual of Cause of Action

Except as otherwise provided in paragraph l. of subdivision (3) of Section 8-20-4, any civil action commenced under the provisions of this chapter must be brought within four years after the cause of action has accrued. The cause of action shall not accrue until the discovery by the aggrieved party of the fact or facts constituting a violation of the provisions of this chapter.

(Acts 1981, No. 81-390, p. 596, §12.)

§ 8-20-13 Procedure, Protection, and Remedies Available to Motor Vehicle Distributors

All procedures, protections, and remedies afforded to a motor vehicle dealer under Sections 8-20-1 through 8-20-12 of this chapter shall be available to a motor vehicle distributor whose distributor agreement is terminated, canceled, not renewed, modified or replaced by a manufacturer or an importer.

(Acts 1991, No. 91-567, p. 1048, §1.)

§ 8-20-14 Applicability of Chapter

This chapter shall apply to all franchise or dealer agreements in force and effect on March 9, 2010, and to all franchise or dealer agreements, amendments, and renewals to dealer agreements made after March 9, 2010. The Motor Vehicle Franchise Act and Act 2010-198, shall supersede and control all provisions of any franchise or dealer agreement inconsistent with Act 2010-198 or the Motor Vehicle Franchise Act. Act 2010-198 and the Motor Vehicle Franchise Act shall not be modified or superseded by a choice of law clause in any franchise or dealer agreement, waiver, or other written instrument. These provisions shall apply to all written agreements between a manufacturer and dealer including, but not limited to, the franchise offering, the franchise agreement, sales of goods, services or advertising, leases or deeds of trust of real or personal property, promises to pay, security interests, pledges, insurance contracts, advertising contracts, construction or installation contracts, servicing contracts, and other agreements between a dealer and a manufacturer.

(Act 2010-198, p. 300, §3.)

Chapter 20A Motor Vehicle Lemon Law Rights

§ 8-20A-1 Definitions

As used in this chapter, the following terms shall have the respective meanings as indicated:

(1) CONSUMER. The purchaser, other than for purposes of resale, of a new or previously untitled motor vehicle used in substantial part for personal, family, or household purposes, and any other person entitled by the terms of such warranty to enforce the obligations of the warranty.

(2) MOTOR VEHICLE. Every vehicle intended primarily for use and operation on the public highways which is self-propelled; provided, however, that the term “motor vehicle” shall not apply to motor homes or to any motor vehicle having a manufacturer’s gross vehicle weight rating (GVWR) of 10,000 pounds or more.

(3) MANUFACTURER. The person, firm, or corporation engaged in the business of manufacturing, importing and/or distributing motor vehicles to be made available to a motor vehicle dealer for retail sale.

(4) MOTOR VEHICLE DEALER or AUTHORIZED DEALER. The person, firm, or corporation operating under a dealer agreement from a manufacturer, importer, or distributor and who is engaged regularly in the business of buying, selling or exchanging motor vehicles in this state and who has in this state an established place of business.

(5) EXPRESS WARRANTY. A written warranty, so labeled, issued by the manufacturer of a new motor vehicle, including any terms or conditions precedent to the enforcement of obligations under that warranty.

(6) NONCONFORMING CONDITION. Any condition of a motor vehicle which shall not be in conformity with the terms of any express warranty issued by the manufacturer to a consumer and which: (i) significantly impairs the use, value or safety of the motor vehicle and (ii) occurs or arises solely in the course of the ordinary use of the motor vehicle, and which does not arise or occur as a result of abuse, neglect, modification, or alteration of the motor vehicle not authorized by the manufacturer, nor from any accident or other damage to the motor vehicle which occurs or arises after such motor vehicle was delivered by an authorized dealer to the consumer.

(7) NOTICE OF A NONCONFORMING CONDITION. A written statement which shall be delivered to the manufacturer and which shall describe the subject motor vehicle, the nonconforming condition, and shall describe all previous attempts to correct such nonconforming condition by identifying the person, firm or corporation who or which made such attempt, and the time when such attempt was made.

(8) LEMON LAW RIGHTS PERIOD. The period ending one year after the date of the original delivery of a motor vehicle to a consumer or the first 12,000 miles of operation, whichever first occurs.

(Acts 1990, No. 90-479, p. 701, §1.)

§ 8-20A-2 Obligations of Manufacturer

(a) If a new motor vehicle does not conform to any applicable express warranty, and the consumer delivers the motor vehicle to the manufacturer, its agent, or its authorized dealer, and gives notice of the nonconforming condition during the lemon law rights period, the manufacturer of the motor vehicle shall be obligated to make such repairs to the motor vehicle as shall be necessary to remedy any nonconforming condition thereof. Such repairs shall be required even after the expiration of the lemon law rights period provided that notice of the nonconforming condition was first given during the lemon law rights period and provided further that the manufacturer’s obligation to repair the nonconforming condition shall not extend beyond the period of 24 months following delivery of the vehicle or 24,000 miles, whichever occurs first.

(b) If, after reasonable attempts, the manufacturer, its agent, or its authorized dealer is unable to conform the motor vehicle to any express warranty by repairing or correcting a nonconforming condition of the motor vehicle which first occurred during the lemon law rights period, the manufacturer shall, at the option of the consumer, replace the motor vehicle with a comparable new motor vehicle or shall accept return of the vehicle from the consumer and refund to the consumer the following:

(1) The full contract price including, but not limited to, charges for undercoating, dealer preparation and transportation charges, and installed options, plus the nonrefundable portions of extended warranties and service contracts;

(2) All collateral charges, including but not limited to, sales tax, license and registration fees, and similar government charges;

(3) All finance charges incurred by the consumer after he first reported the nonconformity to the manufacturer, its agent, or its authorized dealer; and

(4) Any incidental damages which shall include the reasonable cost of alternative transportation during the period that the consumer is without the use of the motor vehicle because of the nonconforming condition. There shall be offset against any monetary recovery of the consumer a reasonable allowance for the consumer’s use of the vehicle. Refunds shall be made to the consumer, and any lien holders, as their interests may appear. A reasonable allowance for use is that amount directly attributable to use by the consumer before his first report of the nonconformity to the manufacturer, agent, or authorized dealer, and must be calculated by multiplying the full purchase price of the motor vehicle by a fraction having as its denominator 100,000 and having as its numerator the number of miles that the vehicle travelled before the first report of nonconformity.

(c) It shall be presumed that reasonable attempts to correct a nonconforming condition have been allowed by the consumer if, during the period of 24 months following delivery of the vehicle or 24,000 miles, whichever first occurs, either of the following events shall have occurred:

(1) The same nonconforming condition has been subject to repair attempts three or more times by the manufacturer, its agents or its authorized dealers, at least one of which occurred during the lemon law rights period, plus a final attempt by the manufacturer, and the same nonconforming condition continues to exist; or

(2) The motor vehicle is out of service and in the custody of the manufacturer, its agent, or an authorized dealer due to repair attempts (including the final repair attempt), one of which occurred during the lemon law rights period, for a cumulative total of 30 calendar days, unless such repair could not be performed because of conditions beyond the control of the manufacturer, its agents or authorized dealers, such as war, invasion, strike, fire, flood, or other natural disaster.

(Acts 1990, No. 90-479, p. 701, §2.)

§ 8-20A-3 Cause of Action Against Manufacturer

(a) A consumer sustaining damages as a proximate consequence of the failure by a manufacturer to perform its obligations imposed under this chapter may bring a civil action against the manufacturer to enforce the provisions of this chapter. Prior to the commencement of any such proceeding a consumer must give notice of a nonconforming condition by certified United States mail to the manufacturer and demand correction or repair of the nonconforming condition. If at the time such notice of a nonconforming condition is given to the manufacturer, a presumption has arisen that reasonable attempts to correct a nonconforming condition have been allowed, the manufacturer shall be given a final opportunity to cure the nonconforming condition. The manufacturer shall within seven calendar days of receiving the written notice of nonconforming condition notify the consumer of a reasonably accessible repair facility. After delivery of the new vehicle to the authorized repair facility by the consumer, the manufacturer shall attempt to correct the nonconforming condition and conform the vehicle to the express warranty within a period not to exceed 14 calendar days. If a manufacturer has established an informal dispute settlement procedure which is in compliance with federal rules and regulations, a consumer must first exhaust any remedy afforded to the consumer under the informal dispute procedure of the manufacturer before a cause of action may be instituted under the provisions of this chapter.

(b) It shall be an affirmative defense to any claim against the manufacturer under this chapter that: (i) an alleged nonconforming condition does not significantly impair the use, market value, or safety of the motor vehicle; or (ii) a nonconforming condition is a result of abuse, neglect, or any modification or alteration of a motor vehicle by a consumer that is not authorized by the manufacturer.

(c) If it is determined that the manufacturer has breached its obligations imposed under this chapter, then the consumer shall be entitled to recover, in addition to the remedy provided under Section 8-20A-2 above, an additional award for reasonable attorneys fees.

(Acts 1990, No. 90-479, p. 701, §3.)

§ 8-20A-4 Resale of Returned Motor Vehicle

If a motor vehicle has been returned to the manufacturer under the provisions of this chapter or a similar statute of another state, whether as the result of a legal action or as the result of an informal dispute settlement proceeding, it may not be resold in this state unless:

(1) The manufacturer discloses in writing to the subsequent purchaser the fact that the motor vehicle was returned under the provisions of this chapter and the nature of the nonconformity to the vehicle warranty.

(2) The manufacturer returns the title of the motor vehicle to the Alabama Department of Revenue advising of the return of the motor vehicle under provisions of this chapter with an application for title in the name of the manufacturer. The Department of Revenue shall brand the title issued to the manufacturer and all subsequent titles to the motor vehicle with the following statement:

THIS VEHICLE WAS RETURNED TO THE MANUFACTURER BECAUSE IT DID NOT CONFORM TO ITS WARRANTY.

(Acts 1990, No. 90-479, p. 701, §4.)

§ 8-20A-5 No Dealership Liability

Nothing in this chapter imposes any liability upon a motor vehicle dealer or authorized dealer or creates a cause of action by a consumer against a motor vehicle dealer or authorized dealer. A motor vehicle dealer or authorized dealer may not be made a party defendant in any action involving or relating to this chapter. The manufacturer shall not charge back or require reimbursement by a motor vehicle dealer or authorized dealer for any costs, including, but not limited to, any refunds or vehicle replacements, incurred by the manufacturer arising out of this chapter.

(Acts 1990, No. 90-479, p. 701, §5.)

§ 8-20A-6 Statute of Limitations

Any action brought under this chapter against the manufacturer shall be commenced within three years following the date of original delivery of the motor vehicle to the consumer.

(Acts 1990, No. 90-479, p. 701, §6.)

Chapter 21A The Tractor, Lawn and Garden and Light Industrial Equipment Franchise Act

§ 8-21A-1 Short Title

This chapter may be cited as “The Tractor, Lawn and Garden and Light Industrial Equipment Franchise Act.”

(Acts 1991, No. 91-721, p. 1401, §1.)

§ 8-21A-2 Definitions

As used in this chapter, the following terms shall have the ascribed meanings unless the context indicates a different meaning:

(1) CONTINUING COMMERCIAL RELATIONSHIP. Any relationship in which the equipment dealer has been granted the right to sell and/or service equipment manufactured by the supplier.

(2) COST or NET COST. The actual price paid by the dealer to the manufacturer, distributor, or wholesaler, plus freight costs paid by or charged to the dealer.

(3) CURRENT NET PRICE. The dealer’s price as listed in the supplier’s effective price list and/or catalog.

(4) DEALER CONTRACT, DEALER AGREEMENT, or FRANCHISE. An agreement or contract, expressed or implied, oral or written, by and between a supplier and a dealer by which the dealer is granted the right to purchase, sell, distribute, and/or service the supplier’s equipment, and in which there is a community of interest in the marketing of farm tractors, lawn and garden equipment, light industrial equipment, or services related thereto.

(5) EQUIPMENT. Machines designed for or adapted and used for agriculture, horticulture, irrigation for agriculture or horticulture, livestock, grazing, lawn and garden, and/or light industrial purposes.

(6) EQUIPMENT DEALER, TRACTOR DEALER, DEALER, LIGHT INDUSTRIAL DEALER, DEALERSHIP, EQUIPMENT DEALERSHIP. Any person, partnership, corporation, association, or other business entity engaged primarily in the business of selling, retailing, and/or leasing and servicing farm tractors, machines, implements, lawn and garden tractors and equipment, and light industrial tractors and equipment, along with attachments and related repair parts. This includes lawn and garden dealers or light industrial dealers that are not primarily engaged in the farm equipment business. This does not include persons or companies primarily engaged in the sales of heavy duty industrial tractors and equipment used in road construction or maintenance, or forestry equipment. This does not include persons primarily engaged in the auction sale of tractors and farm equipment and light industrial equipment nor dealers in exclusively used tractors, farm equipment, and light industrial equipment.

(7) GOOD CAUSE. Failure of the dealer to substantially comply with requirements of the dealer agreement, provided such requirements are not different from, nor enforced differently than those requirements imposed on other similarly situated dealers.

(8) INVENTORY. Tractors, farm implements, machinery, equipment, lawn and garden tractors and equipment, light industrial tractors and equipment, and repair parts held by the dealer.

(9) MANUFACTURER, DISTRIBUTOR, or WHOLESALER. Any person, company, or corporation who sells or distributes new tractors, lawn and garden equipment, and light industrial equipment to dealers or any branch or division, or any officer, agent, or representative thereof.

(10) RELEVANT MARKET AREA. The geographic area for which a dealer is assigned responsibility for selling or soliciting or advertising the sale of equipment under the terms of a franchise.

(11) SUPPLIER. The manufacturer, wholesaler, or distributor of the tractor, equipment, lawn and garden equipment, light industrial tractors and equipment, and/or repair parts to be sold by the dealer.

(12) TERMINATION. The termination, cancellation, nonrenewal, or noncontinuation of the contract or agreement.

(13) WRITTEN NOTICE. In addition to a delivered written notice, such notice shall include notice by any other accepted means including, but not limited to, notice by “electronic mail” or its equivalent.

(Acts 1991, No. 91-721, p. 1401, §2; Acts 1993, No. 93-614, p. 1006, §1(2); Act 2003-356, p. 967, §1; Act 2004-556, p. 1196, §1.)

§ 8-21A-3 Violations by Suppliers Generally

It shall be a violation of this chapter for a supplier to do any of the following:

(1) To coerce, compel, or require any dealer to order or accept delivery of any equipment or parts with special features or accessories not included in the base list price of such equipment as publicly advertised by the supplier which the dealer has not voluntarily ordered.

(2) To coerce, compel, or require any dealer to enter into any agreement, whether written or oral, as a supplement to an existing dealer agreement with such supplier unless such supplemental agreement is imposed on all other dealers in the state doing business with that same supplier.

(3) To discriminate in the delivery of equipment to any dealer in reasonable quantities and within a reasonable time after receipt of the equipment dealer’s order, if the equipment covered by the dealer agreement was specifically represented by the supplier to be available for immediate delivery. However, the failure to deliver the equipment shall not be considered a violation of this chapter if the failure is due to prudent and reasonable restriction on the extension of credit by the supplier to the dealer, an act of God, work stoppage or delay due to a strike or a labor difficulty, a bona fide shortage of materials, freight embargo, or other causes over which the supplier has no control.

(4) To terminate, cancel, or fail to renew a dealer’s agreement or substantially alter that dealer’s competitive circumstances without good cause.

(5) To condition the renewal or extension of a dealer agreement on the dealer’s substantial renovation of the dealer’s place of business or on the construction, purchase, acquisition, or rental of a new place of business by the dealer, unless:

a. the dealer is given at least 12 months’ notice in advance;

b. the supplier’s demand is shown to be reasonable; and

c. the supplier can demonstrate an actual need or necessity for such a change in the place of business in order that the dealer be in a position to adequately serve the public’s needs in his or her trade area at that particular time.

(6) To discriminate in the offering of net prices, sale promotion plans, or any and all other devices of programs that affect the ultimate net price paid by the dealer for any item of equipment offered to the dealer by the supplier. “Item of equipment” shall include, but not be limited to, tractors, any equipment or attachments, garden tractors, lawn and garden equipment, or any other items offered by supplier to their dealer. This subdivision shall not apply to the sales to an equipment dealer for resale to any unit or agency of the United States government, the state, or any of its political subdivisions or any municipality located within this state, and provided further that there is no violation of this subdivision so long as a supplier sells or offers to sell its products to all of its dealers at an equal price.

(7) To prevent or attempt to prevent, by contract or otherwise, any dealer from changing the capital structure of his or her dealership or the means or sources through which he or she finances the operation of his or her dealership so long as the dealer continues to meet the reasonable capital requirements which have previously been agreed upon by dealer and supplier and the change does not result in a change of controlling interest, or in the executive management of the dealership.

(8) To prevent or attempt to prevent, by contract or otherwise, any equipment dealer or any officer, member, partner, or stockholder of any dealer from selling or transferring any part of the interest of any one of them to any other person or persons or party or parties. However, no dealer, officer, partner, member, or stockholder shall have the right to sell, transfer, or assign the dealership and/or the dealer agreement without the written consent of the supplier, provided however that consent shall not be unreasonably withheld.

(9) To require the dealer to agree to a release, agreement, waiver, or any other modification that would relieve supplier or dealer from liability imposed by this chapter.

(10)a. To unreasonably withhold consent, in the event of the death of the dealer or the principal owner of the dealership, to the transfer of the dealer’s interest in the dealership to a member or members of the family of the dealer or the principal owner of the dealership or to another qualified individual if the family member or other qualified individual meets the reasonable requirements, business experience, and character standards required of all dealers at that time by the supplier. In the event the supplier determines that the designated family member or other qualified individual is not acceptable, the supplier shall provide the dealer or his or her family with written notice of its objections and specific reasons for withholding its consent. Frivolous or capricious reasons will not be acceptable to satisfy the requirements of this section. A supplier shall have 30 days in which to consider and make a determination on a dealer’s request to make a transfer to a family member or other qualified individual. As used herein, “family” means a spouse, parents, siblings, children, stepchildren, sons-in-law, daughters-in-law, and lineal descendants including those by adoption of the dealer or principal owner of the dealership.

b. Notwithstanding the foregoing, in the event that a supplier and dealer have previously duly executed an agreement concerning succession rights prior to the dealer’s death, and if the agreement has not been revoked, the agreement shall be observed, even if it designates someone other than the surviving spouse or heirs of the decedent as the successor.

(11) To prevent a dealer from having an investment in or holding a dealership contract for the sale of competing product lines or makes of equipment, or to require a dealer to provide separate facilities for competing product lines or makes of equipment.

(12) To impose, directly or indirectly, unreasonable restrictions on the dealer relative to transfer, renewal, termination, location, or site control.

(13) Notwithstanding the provisions of this section, the supplier may determine that a dealer’s area of responsibility or trade area does not afford sufficient sales potential to continue to reasonably support a dealer.

(Acts 1991, No. 91-721, p. 1401,§3; Act 2003-356, p. 976, §1.)

§ 8-21A-4 Termination, Cancellation, or Nonrenewal of Dealer Agreement; Sales Contract, Etc.; New or Relocated Dealership; Sale or Lease of New Equipment

(a) Except as provided in subsection (d), notwithstanding any dealer agreement, sales contract, franchise agreement, or other agreement by and between dealer and supplier except where grounds for termination or nonrenewal of a dealer’s agreement or a change in his or her competitive position are contained in subdivisions (1), (2), (3), (4), (5), or (6) of subsection (b), a supplier shall give a dealer at least 90 days’ written notice of the supplier’s intent to terminate, cancel, or not renew a dealer agreement or change the dealer’s competitive circumstances. The notice shall state all reasons relied upon by supplier to show good cause for the action and shall provide the dealer with a reasonable time in which to correct any claimed deficiency with a minimum of at least six months. Once mutually agreeable steps have been outlined, agreed upon, and implemented, then the notice of termination shall be void. The contractual terms of the dealer agreement shall not expire or a change be made in the dealer’s competitive circumstances, without the written consent of the dealer, prior to the expiration of at least 90 days following the notice.

(b) As used in this chapter, a termination by a supplier of a dealer’s agreement or a change by the supplier in dealer’s competitive circumstances, shall be with good cause when the dealer has done any of the following:

(1) Transferred a controlling ownership interest in the dealership without the supplier’s consent.

(2) Made a material misrepresentation to the supplier when applying for the dealer agreement.

(3) Filed a voluntary petition in bankruptcy or has had an involuntary petition in bankruptcy filed against the dealer which has not been discharged within 60 days after the filing; is in default under the provisions of a security agreement in effect with the supplier; or is insolvent or in receivership.

(4) Been convicted of a felony.

(5) Failed to operate in the normal course of business for seven consecutive business days or has terminated the business.

(6) Relocated the dealer’s place of business without the supplier’s consent.

(7) Consistently engaged in business practices which are detrimental to the consumer or supplier by way of excessive pricing, misleading advertising, failure to provide service and replacement parts or perform warranty obligations.

(8) Consistently failed to comply with the applicable licensing laws pertaining to the products and services being represented for and on supplier’s behalf.

(c) No supplier shall base its decision to terminate, cancel, or not renew a dealer agreement or to change the dealer’s competitive circumstances on any of the subdivisions of subsection (b) except subdivisions (1), (2), (3), (4), (5), or (6) thereof unless the supplier can demonstrate through written documentation and clear and convincing evidence, the alleged lack of sales demand to support a dealership, alleged misconduct and/or lack of performance or other deficiency of the dealer. Furthermore, supplier shall also show that the reason for the decision to terminate, cancel, or not renew the dealer agreement or change the dealer’s competitive circumstances was in no way caused by supplier’s actions.

(d) Before termination of the franchise or selling agreement because of the failure of a dealer to meet reasonable marketing criteria or market penetration, the manufacturer, distributor, or wholesaler shall provide written notice of that intention at least one year in advance. After notice, the manufacturer or other entity issuing the notice shall make good faith efforts to work with the dealer to gain the desired market share including, without limitation, reasonably making available to the dealer an adequate inventory of new equipment and parts and competitive marketing programs. The manufacturer or other entity, at the end of the one-year notice period, may terminate or elect not to renew the agreement only upon further written notice specifying the reasons for determining that the dealer failed to meet reasonable criteria or market penetration. The written notice shall specify that termination is effective 90 days from the date of the notice. If the dealer cures the claimed deficiency within the 90-day period, the franchise or selling agreement shall not be terminated.

(e) Any manufacturer, distributor, or wholesaler which intends to establish a new dealership or to relocate a current dealership for a particular product line or make of equipment within the relevant market area of an existing dealership of the same product line or make of equipment shall give a written 90-day notice of that intent by certified mail or statutory overnight delivery, return receipt requested, to the existing dealership. The notice shall include all of the following:

(1) The specific location of the additional or relocated dealership.

(2) The date on or after which the additional or relocated dealership will commence operation at the new location.

(3) The identity of all existing dealerships in whose relevant market area the new or relocated dealership is to be located.

(4) The names and addresses of the dealer and principals in the new or relocated dealership.

(f) A manufacturer, distributor, or wholesaler may sell or lease new equipment for use within this state. If the equipment is prepared for delivery or serviced by a dealer, the manufacturer, distributor, or wholesaler shall reasonably compensate the dealer for the preparation and delivery of the new equipment and pay to the dealer a reasonable commission on the sale or lease of the new equipment which shall not be less than eight percent of the sale price of the equipment. The manufacturer, distributor, or wholesaler, if practicable, shall utilize the dealer in the relevant market area described in this subsection for preparation and delivery. This compensation shall be paid or credited in the same manner as provided in Section 8-21A-10. This subsection shall not be applicable to any liquidation or sale of equipment which has been ordered by any court. For purposes of this subsection, equipment is considered to be used primarily within the relevant market area of a dealer if the new equipment is located or housed at a facility of the user located within that relevant market area.

(Acts 1991, No. 91-721, p. 1401, §4; Act 2003-356, p. 976, §1.)

§ 8-21A-5 Supplier’s Duties to Dealers - Provision of Repair Parts; Return of Surplus Parts

(a) Every supplier shall provide for the availability of repair parts throughout the reasonable useful life of any equipment sold by the supplier or dealer.

(b) Every supplier shall give written notice to and provide to its dealers, on at least an annual basis, an opportunity to return a portion of dealer’s surplus parts inventory for credit. This surplus procedure shall be administered as follows:

(1) The supplier must notify its equipment dealers of a time period, in no event less than 90 days’ duration, during which time equipment dealers may submit their surplus parts lists and return their surplus parts to the supplier.

(2) Pursuant to this subdivision, a supplier must allow surplus parts return authority on a dollar value of parts equal to 10 percent of the total dollar value of parts purchased on stock order by the dealer from the supplier during the twelve month period immediately preceding the notification to the dealer by the supplier or the surplus parts return program, or the month the dealer’s return request is made, whichever is applicable. However, the dealer may wish to return less than 10 percent of the total value of stock order parts purchased by the dealer from supplier during the preceding twelve month period as provided above. This has no effect on the validity of this section or the dealer’s rights hereunder.

(c) This chapter shall not require the repurchase from a dealer of any of the following:

(1) Any single repair part which is priced as a set of two or more items.

(2) Any repair part which, because of the condition, is not resalable as a new part without repackaging or reconditioning.

(3) Any inventory for which the dealer is unable to furnish evidence, reasonably satisfactory to the manufacturer, distributor, wholesaler, of good title, free and clear of all claims, liens, and encumbrances.

(4) Any inventory which the dealer desires to keep, provided the dealer has a contractual right to do so. No obsolete or superseded part may be returned, but any part listed in the supplier’s current parts price list or any superseded part that has not been the subject of the supplier’s parts return program at the date of notification to the dealer by the supplier of the surplus parts return program, or the date of the dealer’s parts return request, whichever is applicable shall be eligible for return for the credit specified.

(d) The minimum lawful credit to be allowed for returned parts shall be 85 percent of the dealer’s cost thereof as listed in the supplier’s current parts list at the date of the notification to the dealer by the supplier of the surplus parts return program, or the date of the dealer’s parts return request, whichever is applicable.

(e) Applicable credit hereunder shall be issued to the dealer within 60 days after receipt of the dealer’s returned parts by the supplier.

(f) All packing and return freight expenses incurred in the return of surplus parts under the terms of this section shall be the obligation of and borne by the dealer.

(g) This section shall be supplemental to any agreement between the dealer and the supplier covering the return of farm equipment, attachments, and repair parts which provides the equipment dealer with greater protection. The dealer can elect to pursue either his or her dealer agreement remedy or the remedy provided by state law, and an election by the dealer to pursue the agreement remedy shall not bar the right to the remedy provided herein as to those repair parts not affected by the contract remedy. Notwithstanding anything contained herein, the rights of a supplier to charge back to the dealer’s account previously paid or credited as a discount incident to the dealer’s purchase of goods shall not be affected. Further, any repurchase hereunder shall not be subject to the bulk sales law.

(Acts 1991, No. 91-721, p. 1401, §5; Act 2003-356, p. 976, §1.)

§ 8-21A-6 Supplier’s Duties to Dealers - Agreements to Maintain Inventory; Supplier’s Duty to Repurchase Inventory, Etc. Upon Termination of Agreement; Transfer of Title and Right of Possession; Continuing Security Interest; Items Not Covered; Civil Liability of Supplier; Remedies

(a) Whenever any dealer enters into a dealer agreement with a supplier wherein the dealer agrees to maintain an inventory of equipment and/or repair parts and the dealer agreement is subsequently terminated or not renewed, whether by either party or mutual consent of both, the supplier shall repurchase the inventory as provided in this section. Further, supplier shall repurchase at its fair market value or assume the lease responsibilities of any specific data processing hardware and/or software that the supplier required the dealer to purchase to satisfy the minimum requirements of the dealer agreement and repurchase at 75 percent of the current net price any merchandising tools, accessories, and specialized repair tools, previously purchased pursuant to requirements of the supplier and held by the dealer on the date of termination. Dealer may, at his option, elect to retain such tools if it is not in violation of any contract terms held by the supplier.

(b) If the dealer decides not to keep the inventory, supplier shall repurchase the inventory, specific data processing hardware and software, merchandising equipment, tools, and accessories, and specialized repair tools previously purchased by dealer and held by dealer on the date of termination of the dealer agreement. Supplier shall pay 100 percent of the net cost of all new, unsold, undamaged and complete tractors and equipment, 100 percent of the current net price of all new, unused, undamaged repair parts and accessories which are listed in the supplier’s effective price list or catalog. The supplier shall also pay the dealer six percent of the current net price of all new, unused and undamaged repair parts returned as payment for the cost of handling, packing, and loading. Supplier shall have the option of performing the handling, packing, and loading and paying 100 percent of the current net price of parts in lieu of paying the additional six percent sum imposed herein for these services and in this case, the dealer shall make available to the supplier, at the dealer’s address or at the places at which it is located, all equipment previously purchased by the dealer, after a satisfactory repurchase amount has been negotiated. Provided, however, that merchandising tools and accessories and specialized repair tools must have been purchased within the last three years, and must be complete, usable and unique to the product line.

(c) Upon payment or credit of the repurchase amount to the dealer, the title and right to possession of the repurchased inventory shall transfer or be transferred to the supplier and, notwithstanding the provisions for the state’s Uniform Commercial Code to file notice of a security interest, the dealer shall have a continuing security interest in the inventory until payment or the issuance of credit against any undisputed account balance claimed against dealer by supplier.

(d) The provisions of this chapter shall not require the repurchase from the dealer by supplier of:

(1) Any single repair part which is priced as a set of two or more items;

(2) Any repair part which, because of its condition, is not resalable as a new part without reconditioning or repairing;

(3) Any inventory from which the dealer is unable to furnish evidence, reasonably satisfactory to the supplier, of good title, free and clear of all claims, liens, and encumbrances;

(4) Any inventory which the equipment dealer desires to keep, provided dealer has a contractual right to do so;

(5) Any equipment or repair parts which are not in new, unused, undamaged condition;

(6) Any inventory which was ordered by the dealer on or after the date of receipt of the notification of termination or nonrenewal of the dealer agreement; or

(7) Any inventory which was acquired by the dealer from any source other than the supplier, other than a successor in interest as provided in Section 8-21A-9.

(e) If any supplier shall fail or refuse to repurchase any inventory covered under the provisions of this chapter within ninety days after termination or nonrenewal of dealer agreement, the supplier shall be civilly liable to the dealer for the total amount of 115 percent of the current net price of the inventory, plus any freight charges paid by the dealer, plus all cost of financing such repurchase, including court costs, and reasonable attorney’s fee as awarded by court or statute.

(Acts 1991, No. 91-721, p. 1401, §6.)

§ 8-21A-7 Supplier’s Duties to Dealers - Death or Incapacity of Dealer or Majority Stockholder of Corporation Acting as Dealer; Inventory Repurchase; Applicability of Rights and Remedies

(a) In the event of the death or incapacity of the dealer or majority stockholder of a corporation operating as an equipment dealer, the supplier shall, at the option of the heirs at law, if dealer died intestate, or the executor or executrix under the terms of deceased dealer’s will, if dealer died testate, repurchase the inventory from the estate the same as if the supplier had terminated the dealer agreement with good cause. The inventory repurchase provisions of Section 8-21A-6 are made expressly applicable hereto. The heirs or executor shall have nine months from the date of death of the dealer or majority stockholder to exercise the option hereunder. Nothing in this chapter shall require the repurchase of deceased dealer’s inventory if the heirs or the executor and supplier subsequently enter into a new dealer agreement, or if a successor to the deceased dealer is agreed upon in accordance with the provisions of this chapter.

(b) The provisions of this section shall be supplemental to any agreement between the dealer and the supplier covering the return of farm equipment, attachments, and/or repair parts which provide the dealer with greater protection. The heirs or executor can elect to pursue either the contract remedy or the remedy provided herein, and an election by the heirs or executor to pursue contract remedy shall not bar such heirs or executor’s right to the remedy provided herein as to the farm equipment, attachments and/or repair parts not affected by the contract remedy. Any repurchase hereunder is not to be subject to the bulk sales law of this state. Further, nothing shall preclude a price for return parts which is greater than the total allowance for parts allowed herein and the shipping allowance; in such case, the packing, freight and handling expense shall not be borne by the supplier as to such overage.

(Acts 1991, No. 91-721, p. 1401, §7.)

§ 8-21A-8 Dealer’s Action Against Supplier for Violations; Civil Liability and Remedies

Any dealer may bring an action against a supplier in court of competent jurisdiction for damages sustained by the dealer as a result of supplier’s violation of any part of this chapter, together with the actual costs of the action, including but not limited to, reasonable attorney’s fees along with any consequential damages sustained by the dealer. Dealer may also be granted injunctive relief against the unlawful termination, cancellation, nonrenewal or change in competitive circumstances by the supplier. The remedies set forth in this section shall not be deemed exclusive and shall be in addition to any other remedies permitted by law.

(Acts 1991, No. 91-721, p. 1401, §8.)

§ 8-21A-9 Supplier’s Obligations Applied to Successor in Interest or Assignee

The obligation of any supplier is applied to and made an obligation of any successor in interest or assignee of the supplier. A successor in interest includes, but is not limited to, any purchaser of the assets or stock, any surviving entity resulting from merger or liquidation, any receiver or any trustee of the original supplier.

(Acts 1991, No. 91-721, p. 1401, §9.)

§ 8-21A-10 Warranty Agreement on New Equipment; Warranty Claims

(a) Every supplier shall provide a fair and reasonable warranty agreement on any new equipment which it sells and shall fairly compensate each of its dealers for parts and labor used in fulfilling the warranty agreement. All claims for paying under the warranty agreement made by dealers hereunder for parts and labor shall be paid within 30 days following their approval by supplier. All claims shall be either approved or disapproved within 60 days after their receipt by supplier. Upon disapproval of any claim submitted by the dealer, and within the time periods set forth in this section, the dealer shall be notified in writing of disapproval, along with specific reasons for the disapproval and curative steps required.

(b) All warranty work performed by the dealer under this section shall be compensated in accordance with the reasonable and customary amount of time required to complete the work, expressed in hours and fractions thereof multiplied by the dealer’s established customer hourly labor rate, which shall have previously been made known to supplier. All parts used by dealer in warranty work shall be paid to dealer in the amount of dealer’s net price for the parts, plus 15 percent of that sum or the supplier’s current reimbursement program for warranty work, whichever is greater. The payment is to reimburse the dealer for dealer’s reasonable costs of doing business and providing such warranty service on the supplier’s behalf. The supplier shall have the right to adjust errors discovered during audit and if necessary to adjust claims collected in error.

(c) It shall be unlawful to deny, delay payment for, or restrict a claim by a dealer for warranty service or parts, incentives, hold-backs, or other amounts owed to a dealer unless the denial, delay, or restriction is the direct result of a material defect in the claim that affects its validity.

(d) A manufacturer, distributor, or wholesaler may audit warranty claims submitted by its dealers only for a period of up to one year following payment of the claims and may charge back to its dealers only those amounts based upon paid claims shown by the audit to be invalid except that this limitation shall not apply in any case of fraudulent claims.

(e) Any audit of a dealer by or on behalf of a manufacturer, distributor, or wholesaler for sales incentives, service incentives, rebates, or other forms of incentive compensation shall be completed not later than six months after the date of the termination of the incentive compensation program except that this limitation shall not apply in any case of fraudulent claims.

(Acts 1991, No. 91-721, p. 1401, §10; Act 2003-356, p. 976, §1.)

§ 8-21A-11 Supplier to Indemnify Dealer Against Claims Relating to Manufacture, Assembly, or Design Beyond Dealer’s Control

The supplier will fully indemnify and hold harmless its dealer against any losses, including but not limited to: court costs, reasonable attorney’s fees, any damages arising out of complaints, claims or lawsuits including, but not limited to, strict liability, negligence, misrepresentation, warranty either express or implied, or recession of the sale where the complaint, claim or lawsuit relates to the manufacture, assembly, or design of new items covered by this chapter, parts, or accessories, or other matters relating to the manufacturer, beyond the control of the dealer.

(Acts 1991, No. 91-721, p. 1401, §11.)

§ 8-21A-12 Action for Injunction, Damages, Etc., for Violations of Chapter, Unfair, or Deceptive Trade Practices, and Other Unlawful Acts

Notwithstanding the terms, provisions or conditions of any dealer franchise or dealer agreement or the terms or provisions of any waiver, and notwithstanding any other legal remedies available, any person who is injured in his business or property by a violation of this chapter, by the commission of any unfair and/or deceptive trade practices, or because he refuses to accede to a proposal for an arrangement which, if consummated, would be in violation of this chapter, may bring a civil action in a court of competent jurisdiction to enjoin further violations, to recover any damages sustained by him, together with the costs of the suit, including a reasonable attorney’s fee. This section applies equally to both manufacturers and dealers.

(Acts 1991, No. 91-721, p. 1401, §12.)

§ 8-21A-13 Statute of Limitations; Accrual of Cause of Action

Except as otherwise provided, any civil action commenced under the provisions of this chapter must be brought within four years after the cause of action has accrued. The cause of action shall not accrue until constituting a violation of the provisions of this chapter.

(Acts 1991, No. 91-721, p. 1401, §13.)

Chapter 21B Alabama Heavy Equipment Dealer Act

§ 8-21B-1 Short Title

This chapter shall be known as and may be cited as the Alabama Heavy Equipment Dealer Act.

(Act 2009-755, p. 2279, §1.)

§ 8-21B-2 Legislative Findings

The Legislature finds and declares that the distribution and sale of heavy equipment in this state vitally affects the general economy of the state, the public interest, the public safety, and the public welfare and that, in the exercise of its police power, it is necessary to regulate the conduct of heavy equipment suppliers and dealers and their representatives doing business in this state in order to prevent fraud, unfair business practices, unfair methods of competition, and other abuses upon its citizens.

(Act 2009-755, p. 2279, §2.)

§ 8-21B-3 Definitions

The following words shall have the following meanings:

(1) DEALER. A person, corporation, partnership, or other business entity primarily engaged in the business of retail sales or leasing of heavy equipment and heavy equipment parts and who has an established place of business in this state. If a dealer’s retail sales volume of heavy equipment and heavy equipment parts purchased from a single supplier is greater than 70 percent of such dealer’s total retail sales volume of heavy equipment and heavy equipment parts during the 12-month period immediately prior to May 22, 2009, or the term of any dealer agreement entered into between the supplier and such dealer after May 22, 2009, then the dealer and such supplier shall not be subject to this chapter with respect to the dealer agreement and transactions between them, but the dealer shall otherwise be subject to this chapter with respect to dealer agreements and transactions with other suppliers.

(2) DEALER AGREEMENT. The agreement or contract, expressed or implied, oral or written, by and between a dealer and supplier which provides for the rights and obligations of the parties with respect to the purchase or sale of heavy equipment.

(3) EQUIPMENT or HEAVY EQUIPMENT. Self-propelled, self-powered, or pull-type equipment and machinery, primarily employed for construction, industrial, maritime, mining, or forestry usage. The term shall not include:

a. Motor vehicles requiring registration and certificates of title.

b. Equipment used for agriculture, horticulture, livestock, grazing, lawn and garden, or light industrial purposes which are subject to Chapter 21A.

(4) NET COST. The price the dealer pays to the supplier for heavy equipment and parts, including the freight costs from the supplier’s location to the dealer’s location, minus all applicable discounts allowed by the supplier.

(5) PARTS or HEAVY EQUIPMENT PARTS. The parts that the dealer purchased from the supplier for use on heavy equipment.

(6) PERSON. A natural person, partnership, association, corporation, or other legal entity or a combination of legal entities. The term also includes heirs, assigns, personal representatives, guardians, and successors in interest.

(7) RELEVANT MARKET AREA. The geographic area for which a dealer is assigned responsibility for selling or soliciting or advertising the sale or lease of heavy equipment under the terms of a dealer agreement.

(8) SUPPLIER. A person, partnership, corporation, association, or other form of business enterprise engaged in the manufacture, assembly, or wholesale distribution of heavy equipment and parts related thereto or any officer or agent thereof. The term also includes any successor in interest including any purchaser of assets or stock, any surviving corporation resulting from merger or liquidation, any receiver or assignee, or any trustee of the original supplier.

(Act 2009-755, p. 2279, §3.)

§ 8-21B-4 Amendment, Termination, Etc., of Dealer Agreement - Good Cause Required

(a) Notwithstanding the terms, provisions, or conditions of any agreement or dealer agreement, no supplier shall unilaterally amend, terminate, or refuse to renew any dealer agreement, or unilaterally cause a dealer to resign from a dealer agreement, unless the supplier has first complied with this chapter and good cause exists for amendment, termination, nonrenewal, or causing of resignation. The term good cause shall not include the sale or purchase of a supplier. The term good cause shall be limited to withdrawal by the supplier, its successors, and assigns of the sale of its products in Alabama or dealer performance deficiencies including, but not limited to, failure by the dealer to comply substantially, without reasonable cause, with any reasonable and material requirement imposed upon such dealer in writing by the supplier, including, but not limited to, a substantial failure by a dealer to do the following:

(1) Maintain a sales volume or trend of the supplier’s product line or lines comparable to that of other similarly situated dealers of that product line.

(2) Render services comparable in quality, quantity, or volume to the services rendered by other dealers of the same product or product line similarly situated.

(b) In any determination as to whether a dealer has failed to comply substantially, without reasonable cause, with any reasonable and material requirement imposed upon such dealer by the supplier, consideration shall be given to the relative size, population, geographical location, number of retail outlets, and demand for the products applicable to the relevant market area of the dealer and to other comparable market areas.

(c) No supplier shall be required to give notice or show good cause pursuant to subsection (a) to unilaterally amend dealer agreements to comply with federal or state law or, where not inconsistent with this chapter, to amend uniformly dealer agreements as to all dealers of the supplier in all states in which the supplier is marketing its products.

(d) In any dispute as to whether a supplier has acted with good cause as required by this chapter, the supplier shall have the burden of proof to establish that good cause existed.

(Act 2009-755, p. 2279, §4.)

§ 8-21B-5 Amendment, Termination, Etc., of Dealer Agreement - Notice

(a) Except as provided in subsection (d), a supplier shall provide a dealer at least 120 days’ prior written notice of any intention to amend, terminate, or decline to renew any dealer agreement. The notice shall state all of the reasons for the intended amendment, termination, or nonrenewal.

(b) Where such reason or reasons for amendment, termination, or nonrenewal relate to a condition or conditions which may be rectified by action of the dealer, the dealer shall have 90 days from the date of notice from the supplier in which to take such action and, within such 90-day period, shall give written notice to the supplier if and when such action is taken. If the condition or conditions have been rectified by the dealer, then the proposed amendment, termination, or nonrenewal shall be void and without legal effect. However, where the supplier contends that action on the part of the dealer has not rectified one or more of such conditions, the supplier must give written notice of such claimed deficiency to the dealer within 15 days after the dealer gave notice to the supplier of the action taken.

(c) During the 120-day notice period provided for in subsection (a), the dealer shall have the right to contract for a transfer of the dealership business or dealer agreement to another person who meets the material and reasonable qualifications and standards required by the supplier for its dealers. The dealer shall give notice of any such transfer to the supplier at least 45 days prior to the expiration of the 120-day notice period.

(d) A dealer agreement may be immediately terminated, amended, or nonrenewed and no notice shall be required if the reason for the amendment, termination, or nonrenewal is any of the following:

(1) The bankruptcy or receivership of the dealer.

(2) An assignment by the dealer for the benefit of the creditors or similar disposition of the assets of the business, other than the creation of a security interest in the assets of a dealer for the purpose of securing financing in the ordinary course of business.

(3) Willful or intentional misrepresentation made by the dealer to the supplier with the express intent to defraud the supplier.

(4) Failure of the dealer to conduct its customary sales and service operations during its customary business hours for seven consecutive business days, unless such failure has resulted from acts of God, casualties, strikes, or other similar circumstances beyond the dealer’s reasonable control.

(5) A final conviction of the dealer principal of a felony.

(Act 2009-755, p. 2279, §5.)

§ 8-21B-6 Consent to Transfers

(a) No supplier shall unreasonably withhold or delay consent to any transfer of the dealer’s business or dealer agreement or transfer of the stock or other interest in the dealership whenever the transferee meets the material and reasonable qualifications and standards of the supplier required in appointing its dealers. Should a supplier determine that a proposed transferee does not meet its qualifications and standards, it shall give the dealer written notice thereof, stating the specific reasons for withholding consent. No prospective transferee shall be disqualified to be a dealer because it is a publicly held corporation. A supplier shall have 45 days to consider a dealer’s request to make a transfer under this subsection.

(b) In any dispute as to whether a supplier has denied consent in violation of this section, the supplier shall have the burden of proving a substantial and reasonable justification for the denial of consent.

(Act 2009-755, p. 2279, §6.)

§ 8-21B-7 Delivery of Notice

Notices required by this chapter shall be sent by certified or registered mail or overnight delivery, postage prepaid.

(Act 2009-755, p. 2279, §7.)

§ 8-21B-8 Change in Management Personnel; Damaging Actions; Additional Dealership Agreements; Recovery of Damages

(a) No supplier shall require or prohibit any change in management personnel of any dealer unless the current or proposed management or personnel fails to meet reasonable qualifications and standards required by the supplier for its dealers.

(b) No supplier shall engage in any action with respect to a dealer which is arbitrary, in bad faith, or unconscionable and which causes damage to the dealer.

(c) No supplier, without notice to existing dealers, shall enter into a dealer agreement with another dealer who intends to conduct its dealership operations from a place of business within the relevant market area of an existing dealer or dealers representing the same line of heavy equipment. The appointment of a successor dealer at the same location as its predecessor or within a two-mile radius therefrom within two years from the date on which its predecessor ceased operations or was terminated, whichever occurred later, shall not be construed as the entering into of an additional dealer agreement. Any supplier which intends to enter into a dealer agreement with another dealer in the relevant market area, at least 60 days prior to entering into such dealer agreement, shall give written notice of its intention to do so to each dealer of the same line make within the relevant market area. The notice shall state the date on or after which such proposed dealer agreement shall be entered into. Prior to the date set forth in the notice on or after which such dealer agreement will be entered into, any dealer in the relevant market area may file a civil action to determine whether the additional dealer agreement is unreasonable in which action the supplier shall have the burden of proof that the action is not unreasonable. No bond shall be required as a precondition to entry of an injunction enjoining the entering into of the additional dealer agreement. In determining whether an additional dealer agreement is unreasonable, the court shall consider all pertinent circumstances, including the following:

(1) Whether the establishment of another dealer is warranted by economic and marketing conditions including anticipated future changes.

(2) The past, present, and anticipated retail sales and service business transacted by the objecting dealer or dealers and other dealers of the same line make with a place of business in the relevant market area.

(3) The investment made and obligations incurred by the objecting dealer or dealers and other dealers of the same line make with a place of business in the relevant market area.

(d) No supplier shall require a dealer to prospectively assent to a release, assignment, novation, waiver, or estoppel which would relieve any person from any liability or obligation under this chapter, which would limit the entitlement to recover damages under this chapter or other Alabama law, or which would waive the right to trial by jury. Any provision or agreement purporting to do so is void and unenforceable to the extent of the waiver or release. Nothing in this chapter shall be construed to limit or prohibit good faith settlements of disputes voluntarily entered into between the parties.

(e) No supplier shall willfully discriminate, either directly or indirectly, in price, programs, or terms of sale offered to dealers in this state when the effect of such discrimination may be to substantially lessen competition or to give one dealer who has a dealer agreement with the supplier any economic, business, or competitive advantage not offered to other dealers who have dealer agreements with such supplier.

(Act 2009-755, p. 2279, §8.)

§ 8-21B-9 Incorporation of Chapter into Dealer Agreement

This chapter shall be deemed to be incorporated into every dealer agreement subject to this chapter and shall supersede and control all provisions of any dealer agreement inconsistent with this chapter.

(Act 2009-755, p. 2279, §9.)

§ 8-21B-10 Reasonableness

This chapter shall impose on every term and provision of any dealer agreement a requirement of reasonableness. Every term or provision of any dealer agreement shall be interpreted so that the requirements or obligations imposed therein are reasonable.

(Act 2009-755, p. 2279, §10.)

§ 8-21B-11 Indemnification

Each supplier shall indemnify and hold harmless its dealers against any damages, expenses, and losses including, but not limited to, court costs and reasonable attorneys’ fees incurred by the dealer arising out of complaints, claims, or lawsuits including, but not limited to, strict liability, negligence, misrepresentation, warranty, express or implied, or rescission of the sale where the complaint, claim, or lawsuit relates to either of the following:

(1) The manufacture, assembly, or design of heavy equipment, parts, or accessories by the supplier.

(2) Other functions by the supplier beyond the control of the dealer including, without limitation, the selection by the supplier of parts or components for the heavy equipment.

(Act 2009-755, p. 2279, §11.)

§ 8-21B-12 Repurchase of Items by Supplier

Upon voluntary or involuntary termination, nonrenewal, or discontinuance of the dealer agreement by the dealer or supplier, the supplier shall repurchase from the dealer the following:

(1) All heavy equipment which has been acquired from the supplier within three years prior to the date of notice of the termination, nonrenewal, or discontinuance of the dealer agreement and which has not previously been sold by the dealer. The heavy equipment shall be repurchased at the net cost to the dealer. The heavy equipment shall be delivered to the supplier at the dealer’s premises.

(2) All parts acquired by the dealer from the supplier, or its approved sources, within seven years prior to the date of notice of termination, nonrenewal, or discontinuance. The supplier shall repurchase the parts at the net cost to the dealer. The parts shall be delivered to the supplier at the dealer’s premises.

(3) Specialized repair tools, signage, books, and supplies previously purchased by the dealer pursuant to requirements of the supplier and held by the dealer on the date of termination. The supplier shall repurchase the specialized repair tools, signs, books, and supplies at the net cost to the dealer.

(4) The supplier shall pay the dealer for the items in subdivisions (1) through (3) within 90 days after tender by the dealer of these items at the dealer’s premises. If the supplier shall fail or refuse to pay the compensation to the dealer within 90 days, the supplier shall be liable to the dealer for the total amount of 115 percent of the net cost of these items, plus court costs and reasonable attorney’s fees in the event of a civil action by the dealer. The supplier shall pay the cost of the return, handling, packing, and loading of all of the items repurchased under this section.

(Act 2009-755, p. 2279, §12.)

§ 8-21B-13 Remedies

Notwithstanding the terms, provisions, or conditions of any dealer agreement, any person who suffers bodily injury, loss of profit, or property damage as a result of a violation of this chapter may bring a civil action in a court of competent jurisdiction in this state to enjoin further violations and to recover the damages sustained by him or her together with the costs of the suit, including a reasonable attorney’s fee. The remedies set forth in this section shall not be deemed exclusive and shall be in addition to any other remedies permitted by law.

(Act 2009-755, p. 2279, §13.)

§ 8-21B-14 Civil Action

Any civil action commenced under this chapter must be brought within four years after the cause of action has accrued. The cause of action shall not accrue until the discovery by the aggrieved party of the fact or facts constituting a violation of this chapter.

(Act 2009-755, p. 2279, §14.)

§ 8-21B-15 Application of Chapter

This chapter shall apply to all dealer agreements in force and effect on May 22, 2009, and to all dealer agreements, amendments, and renewals to dealer agreements made after May 22, 2009.

(Act 2009-755, p. 2279, §17.)

Chapter 21C Sale of Recreational Vehicles

§ 8-21C-1 Legislative Intent; Applicability

(a) It is the intent of the Legislature to protect the public health, safety, and welfare of the residents of the state by regulating the relationship between recreational vehicle dealers, manufacturers, and distributors, by maintaining competition, and by providing consumer protection and fair trade.

(b) This chapter applies to manufacturer and dealer agreements entered into on or after October 1, 2011.

(c) Chapter 20 of Title 8, shall not apply to any recreational vehicle manufacturer and dealer agreement to which this chapter applies. This chapter does not otherwise amend or affect Chapter 20 of Title 8.

(Act 2011-636, p. 1529, §1.)

§ 8-21C-2 Definitions

As used in this chapter, the following words shall have the following meanings:

(1) AREA OF SALES RESPONSIBILITY. The geographical area, agreed to by the dealer and the manufacturer or the distributor or in the manufacturer and dealer agreement, within which the dealer has the exclusive right to display or sell new recreational vehicles of a particular line-make of the manufacturer or distributor to the retail public.

(2) CAMPING TRAILER. A vehicular unit that is mounted on wheels and constructed with collapsible partial side walls that fold for towing by another vehicle and unfold at the campsite to provide temporary living quarters for recreational, camping, or travel use.

(3) DEALER. Any person, firm, corporation, or business engaged in the business of selling recreational vehicles to the general public and that maintains a permanent business establishment including a service and repair facility which offers mechanical services for the recreational vehicles it sells.

(4) DISTRIBUTOR. Any person, firm, corporation, or business entity that purchases new recreational vehicles for resale to dealers.

(5) FACTORY CAMPAIGN. An effort on the part of a warrantor to contact recreational vehicle owners or dealers in order to address a part or equipment issue.

(6) FAMILY MEMBER. A spouse or a child, grandchild, parent, sibling, niece, or nephew, or the spouse thereof.

(7) FIFTH WHEEL TRAILER. A vehicular unit, mounted on wheels, designed to provide temporary living quarters for recreational, camping, or travel use and of such size and weight as not to require a special highway movement permit and designed to be towed by a motorized vehicle that contains a towing mechanism that is mounted above or forward of the tow vehicle’s rear axle.

(8) LINE-MAKE. A specific series of recreational vehicle products that meets all of the following specifications:

a. Is identified by a common series trade name or trademark.

b. Is targeted to a particular market segment, as determined by the decor, features, equipment, size, weight, and price range.

c. Has lengths and interior floor plans that distinguish the recreational vehicles from other recreational vehicles with substantially the same decor, equipment, features, price, and weight.

d. Belongs to a single, distinct classification of recreational vehicle product type having a substantial degree of commonality in the construction of the chassis, frame, and body.

e. Is a product that the manufacturer and dealer agreement authorizes the dealer to sell.

(9) MANUFACTURER. Any person, firm, corporation, or business entity that engages in the manufacture of recreational vehicles.

(10) MANUFACTURER AND DEALER AGREEMENT. A written agreement or contract entered into between a manufacturer or a distributor and a dealer that fixes the rights and responsibilities of the parties and pursuant to which the dealer sells new recreational vehicles.

(11) MOTOR HOME. A motorized, vehicular unit designed to provide temporary living quarters for recreational, camping, or travel use.

(12) PROPRIETARY PART. Any part manufactured by or for and sold exclusively by the manufacturer.

(13) RECREATIONAL VEHICLE. A motor home, travel trailer, fifth wheel trailer, camping trailer, and truck camper.

(14) SUPPLIER. Any person, firm, corporation, or business entity that engages in the manufacturing of recreational vehicle parts, accessories, or components.

(15) TRANSIENT CUSTOMER. A customer who is temporarily traveling through a dealer’s area of sales responsibility.

(16) TRAVEL TRAILER. A vehicular unit, mounted on wheels, designed to provide temporary living quarters for recreational, camping, or travel use and of such size and weight as not to require a special highway movement permit when towed by a motorized vehicle.

(17) TRUCK CAMPER. A portable unit, constructed to provide temporary living quarters for recreational, travel, or camping use, consisting of a roof, floor, and sides and designed to be loaded onto and unloaded from the back of a pickup truck.

(18) WARRANTOR. Any person, firm, corporation, or business entity, including any manufacturer or distributor, that provides a written warranty to the consumer in connection with a new recreational vehicle or parts, accessories, or components thereof. The term does not include service contracts, mechanical or other insurance, or extended warranties sold for separate consideration by a dealer or other person not controlled by a manufacturer or distributor.

(Act 2011-636, p. 1529, §2.)

§ 8-21C-3 Manufacturer and Dealer Agreement - Required for Sales by Manufacturer or Distributor

(a)(1) After September 30, 2011, a manufacturer or distributor may not sell a recreational vehicle in this state to or through a dealer without having first entered into a manufacturer and dealer agreement with the dealer which has been signed by both parties.

(2) A dealer may not sell a new recreational vehicle in this state without having first entered into a manufacturer and dealer agreement with a manufacturer or distributor which has been signed by both parties.

(b) The manufacturer or distributor shall designate the area of sales responsibility exclusively assigned to a dealer in the manufacturer and dealer agreement. Except as provided in subsection (c), the manufacturer or distributor may not review or change the area of sales responsibility without the consent of both parties or contract with another dealer for the sale of the same line-make in the designated area until at least one year after the execution of the manufacturer and dealer agreement.

(c) If, subsequent to entering into a manufacturer and dealer agreement, a dealer enters into an agreement to sell any competing recreational vehicle products, or enters into an agreement to increase its pre-existing commitment to sell any competing recreational vehicle products, a manufacturer or distributor may revise the area of sales responsibility designated in the manufacturer and dealer agreement if the market penetration of the manufacturer’s or distributor’s products is jeopardized by the dealer’s subsequent agreements.

(d) When taking on an additional line-make of recreational vehicle, a dealer shall notify in writing any manufacturer or distributor of a competing similar product line with whom the dealer has a manufacturer and dealer agreement at least 30 days subsequent to entering into a manufacturer and dealer agreement with the manufacturer or distributor of the additional line-make.

(Act 2011-636, p. 1529, §3.)

§ 8-21C-4 Manufacturer and Dealer Agreement - Termination, Cancellation, Etc

(a) A manufacturer or distributor, directly or through any authorized officer, agent, or employee, may terminate, cancel, or fail to renew a manufacturer and dealer agreement with or without cause. If the manufacturer or distributor terminates, cancels, or fails to renew a manufacturer and dealer agreement without cause, the manufacturer or distributor shall comply with Section 8-21C-5. If the manufacturer or distributor terminates, cancels, or fails to renew a manufacturer and dealer agreement with cause, Section 8-21C-5 does not apply.

(b) A manufacturer or distributor has the burden of showing cause for terminating, canceling, or failing to renew a manufacturer and dealer agreement with a dealer. For purposes of determining whether there is cause for the proposed action, any of the following factors may be considered:

(1) The extent of the affected dealer’s penetration in the area of sales responsibility.

(2) The nature and extent of the dealer’s investment in its business.

(3) The adequacy of the dealer’s service facilities, equipment, parts, supplies, and personnel.

(4) The effect of the proposed action on the community.

(5) The extent and quality of the dealer’s service under recreational vehicle warranties.

(6) The failure to follow agreed upon procedures or standards related to the overall operation of the dealership.

(7) The dealer’s performance under the terms of the manufacturer and dealer agreement.

(c) In the event the manufacturer or distributor is terminating the agreement for cause and except as otherwise provided in this section, a manufacturer or distributor shall provide the dealer, at least 120 days prior, with a written notice of termination, cancellation, or nonrenewal of the manufacturer and dealer agreement for cause.

(d)(1) A manufacturer or distributor that terminates a dealer agreement pursuant to subsection (c) shall provide a notice stating all reasons for the proposed termination, cancellation, or nonrenewal. The notice shall further state that if, within 30 days following receipt of the notice, the dealer provides to the manufacturer or distributor a written notice of intent to cure all claimed deficiencies, the dealer shall then have 120 days following receipt of the notice to rectify the deficiencies. If the deficiencies are rectified within 120 days, the manufacturer’s or distributor’s notice is void. If the dealer fails to provide the notice of intent to cure the deficiencies in the prescribed time period, the termination, cancellation, or nonrenewal takes effect 30 days after the receipt by the dealer of the notice unless the dealer has new and untitled inventory on hand. The dealer may dispose of the inventory pursuant to Section 8-21C-5.

(2) The notice period for a termination for cause may be reduced to 30 days if the grounds of the manufacturer or distributor for termination, cancellation, or nonrenewal are due to any of the following factors:

a. A dealer or any of its owners is convicted of, or enters a plea of nolo contendere to, a felony.

b. The dealer abandons or closes the business operations of the dealer for 10 consecutive business days unless the closing is due to a natural disaster, fire, labor difficulty, act of terrorism, war, riot, or other cause over which the dealer has no control.

c. A significant misrepresentation by the dealer materially affecting the business relationship.

d. A suspension or revocation of any license the dealer is required to possess, or a refusal by a licensing authority to renew a required license.

e. A material violation of this chapter which is not cured within 30 days after the written notice by the manufacturer or distributor.

(e) The notice provisions of subsections (c) and (d) do not apply if the reason for termination, cancellation, or nonrenewal is the insolvency of the dealer or the occurrence of an assignment for the benefit of creditors or bankruptcy.

(f)(1) A dealer may terminate or cancel its manufacturer and dealer agreement with a manufacturer or distributor with or without cause by giving 30 days written notice. If the termination or cancellation is for cause, the notice shall state all reasons for the proposed termination or cancellation and shall further state that if, within 30 days following receipt of the notice, the manufacturer or distributor provides to the dealer a written notice of intent to cure all claimed deficiencies, the manufacturer or distributor will then have 120 days following receipt of the original notice to rectify the deficiencies. If the deficiencies are rectified within 120 days, the dealer’s notice is void. If the manufacturer or distributor fails to provide the notice of intent to cure the deficiencies in the time period prescribed in the original notice of termination or cancellation, the pending termination or cancellation shall take effect 30 days after the receipt by the manufacturer or distributor of the original notice.

(2) If the dealer terminates, cancels, or fails to renew the manufacturer and dealer agreement without good cause, the terms of Section 8-21C-5 do not apply. If the dealer terminates, cancels, or fails to renew the manufacturer and dealer agreement for good cause, Section 8-21C-5 applies. The dealer has the burden of showing cause. Any of the following shall be deemed cause for the proposed termination, cancellation, or nonrenewal action by a dealer:

a. The manufacturer or distributor being convicted of, or entering a plea of nolo contendere to, a felony.

b. The business operations of the manufacturer or distributor have been abandoned or closed for 10 consecutive business days, unless the closing is due to a natural disaster, fire, labor difficulty, act of terrorism, war, riot, or other cause over which the manufacturer or distributor has no control.

c. A significant misrepresentation by the manufacturer or distributor materially affecting the business relationship.

d. A material violation of this chapter which is not cured within 30 days after written notice by the dealer.

(3) The notice provisions of subdivisions (1) and (2) do not apply if the reason for termination, cancellation, or nonrenewal is the insolvency of the manufacturer or distributor or the occurrence of an assignment for the benefit of creditors or bankruptcy.

(Act 2011-636, p. 1529, §4.)

§ 8-21C-5 Manufacturer and Dealer Agreement - Actions Upon Failure to Cure Deficiencies

(a) If the manufacturer and dealer agreement is terminated, canceled, or not renewed by the manufacturer or distributor without cause as defined in subsection (b) of Section 8-21C-4 or if the dealer terminates or cancels the manufacturer and dealer agreement for cause as defined in subsection (f) of Section 8-21C-4, and the manufacturer or distributor fails to cure the claimed deficiencies within the time provided in Section 8-21C-4, the manufacturer or distributor, at the election of the dealer and within 45 days after termination, cancellation, or nonrenewal, shall do all of the following:

(1) Repurchase all new, untitled recreational vehicles that were acquired and delivered to the dealership from the manufacturer or distributor within 12 months before the effective date of the notice of termination, cancellation, or nonrenewal that have not been used, except for demonstration purposes, and that have not been altered or damaged at 100 percent of the net invoice cost, including transportation, less applicable rebates and discounts to the dealer. In the event any of the vehicles repurchased pursuant to this subdivision are damaged, but do not trigger a consumer disclosure requirement, the amount due the dealer shall be reduced by the cost of repairing the vehicle. Damage prior to delivery to the dealer that is disclosed at the time of delivery does not disqualify repurchase under this subdivision.

(2) Repurchase all undamaged accessories and proprietary parts sold to the dealer for resale within the 12 months prior to termination, cancellation, or nonrenewal, if accompanied by the original invoice, at 105 percent of the original net price paid to the manufacturer or distributor to compensate the dealer for handling, packing, and shipping the parts.

(3) Repurchase any properly functioning diagnostic equipment, special tools, current signage, and other equipment and machinery at 100 percent of the dealer’s net cost plus freight, destination, delivery, and distribution charges and sales taxes, if any, if the items were purchased by the dealer within 5 years before termination, cancellation, or nonrenewal, upon the manufacturer’s or distributor’s request, and which the dealer meets the burden of establishing, and can no longer be used in the normal course of the dealer’s ongoing business.

(b) The manufacturer or distributor shall pay the dealer within 30 days after receipt of the repurchased items.

(Act 2011-636, p. 1529, §5.)

§ 8-21C-6 Change of Dealer Ownership

(a) If a dealer desires to make a change in ownership by the sale of the business assets, a stock transfer, or otherwise, the dealer shall give the manufacturer or distributor written notice at least 15 business days before the closing, including all supporting documentation as may be reasonably required by the manufacturer or distributor to determine if an objection to the sale may be made. In the absence of a breach by the selling dealer of its dealer agreement or this chapter, the manufacturer or distributor may not object to the proposed change in ownership unless any of the following circumstances is present:

(1) The prospective transferee has previously been terminated by the manufacturer or distributor for breach of its dealer agreement.

(2) The prospective transferee has been convicted of a felony or any crime of fraud, deceit, or moral turpitude.

(3) The prospective transferee lacks any license required by law.

(4) The prospective transferee does not have an active line of credit sufficient to purchase a manufacturer’s or distributor’s product.

(5) The prospective transferee has undergone in the last 10 years bankruptcy, insolvency, a general assignment for the benefit of creditors, or the appointment of a receiver, trustee, or conservator to take possession of the transferee’s business or property. This subdivision may be waived if the prospective transferee meets all of the requirements of this section and if the prospective transferee fully qualifies under the manufacturer’s or lender’s financial criteria.

(b) If the manufacturer or distributor objects to a proposed change of ownership, the manufacturer or distributor shall give written notice of its reasons to the dealer within 10 business days after receipt of the dealer’s notification and complete documentation. The manufacturer or distributor has the burden of proof with regard to its objection. If the manufacturer or distributor does not give timely notice of its objection, the change or sale shall be deemed approved.

(c) A manufacturer or distributor shall allow a dealer an opportunity to designate, in writing, a family member as a successor to the dealership in the event of the death, incapacity, or retirement of the dealer. The manufacturer or distributor may not prevent or refuse to honor the succession to a dealership by a family member of the deceased, incapacitated, or retired dealer unless the manufacturer or distributor has provided to the dealer written notice of its objections within 10 business days after receipt of the dealer’s modification of the dealer’s succession plan. In the absence of a breach of the dealer agreement, the manufacturer or distributor may object to the succession for the following reasons only:

(1) Conviction of the successor of a felony or any crime involving fraud, deceit, or moral turpitude.

(2) Bankruptcy or insolvency of the successor during the past 10 years. This subdivision can be waived if the prospective successor meets all of the requirements of this section and if the prospective successor fully qualifies under the manufacturer’s or lender’s financial criteria.

(3) Prior termination by the manufacturer or distributor of the successor for breach of a dealer agreement.

(4) The lack of an active line of credit for the successor sufficient to purchase the manufacturer’s or distributor’s product.

(5) The lack of any license required by law of the successor.

(d) The manufacturer or distributor has the burden of proving its objection. A family member may not succeed to a dealership if the succession involves, without the manufacturer’s or distributor’s consent, a relocation of the business or an alteration of the terms and conditions of the manufacturer and dealer agreement.

(Act 2011-636, p. 1529, §6.)

§ 8-21C-7 Duties of Warrantors; Warranty Claims

(a) Each warrantor shall do all of the following:

(1) Specify in writing each of its dealer obligations, if any, for preparation, delivery, and warranty service on its products.

(2) Compensate a dealer for warranty service required of the dealer by the warrantor.

(3) Provide a dealer the schedule of compensation to be paid and the time allowances for the performance of any work and service. The schedule of compensation shall include reasonable compensation for diagnostic work as well as warranty labor.

(b) Time allowances for the diagnosis and performance of warranty labor shall be reasonable for the work to be performed. In the determination of what constitutes reasonable compensation under this section, the principal factors to be given consideration shall be the actual wage rates being paid by the dealer and the actual retail labor rate being charged by the dealers in the community in which the dealer is doing business. The compensation of a dealer for warranty labor may not be less than the lowest retail labor rates actually charged by the dealer for like non-warranty labor as long as such rates are reasonable.

(c) The warrantor shall reimburse the dealer for warranty parts at actual wholesale cost plus a minimum 30 percent handling charge and the cost, if any, of freight to return warranty parts to the warrantor.

(d) Warranty audits of dealer records may be conducted by the warrantor on a reasonable basis, and dealer claims for warranty compensation may not be denied except for cause, such as performance of non-warranty repairs, material noncompliance with the warrantor’s published policies and procedures, lack of material documentation, fraud, or misrepresentation.

(e) The dealer shall submit warranty claims within 30 days after completing work.

(f) The dealer shall immediately notify the warrantor in writing if the dealer is unable to perform any warranty repairs within 10 days of receipt of verbal or written complaints from a consumer.

(g) The warrantor shall disapprove warranty claims in writing within 30 days after the date of submission by the dealer in the manner and form prescribed by the warrantor. Claims not specifically disapproved in writing within 30 days shall be construed to be approved and shall be paid within 60 days of submission.

(h) It is a violation of this chapter for any warrantor to do any of the following:

(1) Fail to perform any of its warranty obligations with respect to its warranted products.

(2) Fail to include, in written notices of factory campaigns to recreational vehicle owners and dealers, the expected date by which necessary parts and equipment, including tires and chassis or chassis parts, will be available to dealers to perform the campaign work. The warrantor may ship parts to the dealer to effect the campaign work, and, if such parts are in excess of the dealer’s requirements, the dealer may return unused parts to the warrantor for credit after completion of the campaign.

(3) Fail to compensate any of its dealers for authorized repairs effected by the dealer of merchandise damaged in manufacture or transit to the dealer, if the carrier is designated by the warrantor, factory branch, distributor, or distributor branch.

(4) Fail to compensate any of its dealers in accordance with the schedule of compensation provided to the dealer pursuant to this section if performed in a timely and competent manner.

(5) Intentionally misrepresent in any way to purchasers of recreational vehicles that warranties with respect to the manufacture, performance, or design of the vehicle are made by the dealer as warrantor or co-warrantor.

(6) Require the dealer to make warranties to customers in any manner related to the manufacture of the recreational vehicle.

(i) It is a violation of this chapter for any dealer to do any of the following:

(1) Fail to perform pre-delivery inspection functions, as specified by the warrantor, in a competent and timely manner so long as there are specific instructions from the manufacturer.

(2) Fail to perform warranty service work authorized by the warrantor in a reasonably competent and timely manner on any transient customer’s vehicle of the same line-make.

(3) Fail to accurately document the time spent completing each repair, the total number of repair attempts conducted on a single unit, and the number of repair attempts for the same repair conducted on a single vehicle.

(4) Fail to notify the warrantor within 10 days of a second repair attempt which impairs the use, value, or safety of the vehicle.

(5) Fail to maintain written records, including a consumer’s signature, regarding the amount of time a unit is stored for the consumer’s convenience during a repair.

(6) Make fraudulent warranty claims or misrepresent the terms of any warranty.

(Act 2011-636, p. 1529, §7.)

§ 8-21C-8 Indemnification

Notwithstanding the terms of any manufacturer and dealer agreement:

(1) A warrantor shall indemnify and hold harmless its dealer against any losses or damages to the extent such losses or damages are caused by the negligence or willful misconduct of the warrantor. The dealer shall provide to the warrantor a copy of any pending lawsuit or similar proceeding in which allegations are made that come within this subsection within 10 days after receiving such suit.

(2) A dealer shall indemnify and hold harmless its warrantor against any losses or damages to the extent such losses or damages are caused by the negligence or willful misconduct of the dealer. The warrantor shall provide to the dealer a copy of any pending lawsuit or similar proceeding in which allegations are made that come within this subsection within 10 days after receiving such suit.

(Act 2011-636, p. 1529, §8.)

§ 8-21C-9 Notification of Pre-delivery Damage

(a) Whenever a new recreational vehicle is damaged prior to transit to the dealer or is damaged in transit to the dealer when the carrier or means of transportation has been selected by the manufacturer or distributor, the dealer shall notify the manufacturer or distributor of the damage within the time frame specified in the manufacturer and dealer agreement and shall do either of the following:

(1) Request from the manufacturer or distributor authorization to replace the components, parts, and accessories damaged or otherwise correct the damage.

(2) Reject the vehicle within the time frame set forth in subsection (d).

(b) If the manufacturer or distributor refuses or fails to authorize repair of the damage within 10 days after receipt of notification, or if the dealer rejects the recreational vehicle because of damage, ownership of the new recreational vehicle shall revert to the manufacturer or distributor.

(c) The dealer shall exercise due care while having custody of the damaged recreational vehicle, but the dealer shall have no other obligations, financial or otherwise, with respect to that recreational vehicle.

(d) The time frame for inspection and rejection by the dealer must be part of the manufacturer and dealer agreement and may not be less than two business days after the physical delivery of the recreational vehicle.

(e) Any recreational vehicle that, at the time of delivery to the dealer, has an unreasonable amount of miles on its odometer, as determined by the dealer, may be subject to rejection by the dealer and reversion of the vehicle to the manufacturer or distributor. In no instance shall a dealer deem an amount less than the distance between the dealer and the manufacturer’s factory or a distributor’s point of distribution, plus 100 miles, as unreasonable.

(Act 2011-636, p. 1529, §9.)

§ 8-21C-10 Coercion Prohibited

(a) A manufacturer or distributor may not coerce or attempt to coerce a dealer to do any of the following:

(1) Purchase a product that the dealer did not order.

(2) Enter into an agreement with the manufacturer or distributor.

(3) Enter into an agreement that requires the dealer to submit its disputes to binding arbitration or otherwise waive rights or responsibilities provided under this chapter.

(b) As used in this section, the term coerce includes, but is not limited to, threatening to terminate, cancel, or not renew a manufacturer and dealer agreement without good cause or threatening to withhold product lines the dealer is entitled to purchase pursuant to the manufacturer and dealer agreement or delay product delivery as an inducement to amending the manufacturer and dealer agreement.

(Act 2011-636, p. 1529, §10.)

§ 8-21C-11 Civil Action for Damages

(a) A dealer, manufacturer, distributor, or warrantor injured by another party’s violation of this chapter may bring a civil action in circuit court to recover actual damages. The court shall award attorney’s fees and costs to the prevailing party in such an action. Venue for any civil action authorized by this section shall be exclusively in the county in which the dealer’s business is located. In an action involving more than one dealer, venue may be in any county in which any dealer that is party to the action is located.

(b)(1) Prior to bringing suit under this section, the party bringing suit for an alleged violation shall serve a written demand for mediation upon the offending party.

a. The demand for mediation shall be served upon the other party via certified mail at the address stated within the manufacturer and dealer agreement between the parties.

b. The demand for mediation shall contain a brief statement of the dispute and the relief sought by the party filing the demand.

(2) Within 20 days after the date a demand for mediation is served, the parties shall mutually select an independent certified mediator and meet with that mediator for the purpose of attempting to resolve the dispute. The meeting place shall be in this state in a location selected by the mediator. The mediator may extend the date of the meeting for good cause shown by either party or upon stipulation of both parties.

(3) The service of a demand for mediation under this section shall toll the time for the filing of any complaint, petition, protest, or other action under this chapter until representatives of both parties have met with a mutually selected mediator for the purpose of attempting to resolve the dispute. If a complaint, petition, protest, or other action is filed before that meeting, the court shall enter an order suspending the proceeding or action until the mediation meeting has occurred and may, upon written stipulation of all parties to the proceeding or action that they wish to continue to mediate under this section, enter an order suspending the proceeding or action for as long a period as the court considers appropriate.

(4) The parties to the mediation shall bear their own costs for attorney’s fees and divide equally the cost of the mediator.

(c) In addition to the remedies provided in this section and notwithstanding the existence of any additional remedy at law, a dealer, manufacturer, distributor, or warrantor, is authorized to make application to a circuit court, upon a hearing and for cause shown, for the grant of a temporary or permanent injunction, or both, restraining any person from acting as a dealer without being properly licensed, from violating or continuing to violate any of the provisions of this chapter, or from failing or refusing to comply with the requirements of this chapter. The injunction shall be issued without bond. A single act in violation of the provisions of this chapter shall be sufficient to authorize the issuance of an injunction.

(Act 2011-636, p. 1529, §11.)

Chapter 22 Motor Fuel Marketing

§ 8-22-1 Short Title

This act shall be known and may be cited as the “Motor Fuel Marketing Act.”

(Acts 1984, No. 84-260, p. 433, §1.)

§ 8-22-2 Legislative Findings

The Legislature makes the following findings with respect to the marketing of motor fuel in Alabama:

(1) Marketing of motor fuel is affected with the public interest.

(2) Unfair competition in the marketing of motor fuel occurs whenever costs associated with the marketing of motor fuel are recovered from other operations, allowing the refined motor fuel to be sold at subsidized prices. Such subsidies most commonly occur in one of three ways: when refiners use profits from refining of crude oil to cover below normal or negative returns earned from motor fuel marketing operations; and where a marketer with more than one location uses profits from one location to cover losses from below-cost selling of motor fuel at another location.

(3) Independent motor fuel marketers (i.e., dealers, distributors, jobbers, and wholesalers) are unable to survive predatory subsidized pricing at the marketing level by persons when all of an independent’s income comes from marketing operations.

(4) Subsidized pricing is inherently predatory and is reducing competition in the petroleum industry, and if it continues unabated, will ultimately threaten the consuming public.

(Acts 1984, No. 84-260, p. 433, §2; Act 2015-225, §1.)

§ 8-22-3 Legislative Declaration and Intent

It is hereby declared that marketing of motor fuel in Alabama is affected with the public interest. It is hereby declared to be the legislative intent to encourage fair and honest competition, and to safeguard the public against creation of monopolies or unfair methods of competition, in transactions involving the sale of, or offer to sell, or inducement to sell motor fuel in the wholesale and retail trades in this state. It is further declared that the advertising, offering for sale, or sale of motor fuel below cost or at a cost lower than charged other persons on the same marketing level with the intent of injuring competitors or destroying or substantially lessening competition is an unfair and deceptive trade practice. The policy of the state is to promote the general welfare through the prohibition of such sales. The purpose of the Motor Fuel Marketing Act is to carry out that policy in the public interest, providing for exceptions under stated circumstances, providing for enforcement and providing penalties.

(Acts 1984, No. 84-260, p. 433, §3.)

§ 8-22-4 Definitions

The following terms shall have the meanings ascribed to them in this section unless otherwise stated and unless the context or subject matter clearly indicates otherwise:

(1) PERSON. Any person, firm, association, organization, partnership, business trust, joint stock company, company, corporation, or legal entity.

(2) MOTOR FUEL. Those products upon which the state excise tax levied, or defined, in Sections 40-17-1 through 40-17-52 and 40-17-170, as amended, is imposed.

(3) WHOLESALER. Includes any person qualified as a wholesaler of motor fuel with the state Revenue Commissioner, and shall also mean and include any person, other than a buying pool defined herein, wherever resident or located, who brings or causes to be brought into this state motor fuel purchased directly from the manufacturer thereof.

(4) WHOLESALE DISTRIBUTION. Any person, or the act of any person, including any affiliate of such person, in commerce within the state, who purchases motor fuel for sale, consignment or distribution to another, or, receives motor fuel on consignment for consignment or distribution to his own motor fuel accounts or to accounts of his supplier, but shall not include a person who is an employee of, or merely serves as, a common carrier providing transportation services for such supplier.

(5) RETAILER. Includes any person who is engaged in this state in the business of selling motor fuel at retail to the general public for ultimate consumption, and includes any group of persons, cooperative organizations, buying pools and any other person or group purchasing motor fuel on a cooperative basis from licensed distributors or wholesalers.

(6) BUYING POOL. Includes any combination, corporation, association, affiliation or group of retail dealers operating jointly in the purchase, sale, exchange or barter of motor fuel, the profits of which accrue directly or indirectly to such retail dealers.

(7) SALE or SELL. Any transfer for a combination, exchange, barter, gift, offer for sale, advertising for sale, soliciting an order for motor fuel and distribution in any manner or by any means whatsoever.

(8) SELL AT WHOLESALE, SALE AT WHOLESALE and WHOLESALES. Includes any sale made in the ordinary course of trade or usual conduct of the wholesaler’s business to a retailer for the purpose of resale.

(9) SELL AT RETAIL, SALE AT RETAIL and RETAIL SALES. Includes any sale for consumption or use in the ordinary course of trade or usual conduct of the seller’s business.

(10) CUSTOMARY DISCOUNT FOR CASH. Includes any allowance, whether a part of a larger discount or not, made to a wholesaler or retailer when such person pays for motor fuel within a limited or specified time.

(11) REFINER. Any person engaged in the production or refining of motor fuel, whether such production or refining occurs in this state or elsewhere, and includes any affiliate of such person.

(12) COST TO REFINER. That refiner’s posted terminal price to the wholesale class of trade. In the event a refiner does not regularly sell to the wholesale class of trade at that terminal or does not post such a terminal price, it may use as its cost the posted price of any other refiner at any terminal within the general trade area which has products readily available for sale to the wholesale class of trade.

(13) COMPETITION. Includes any person who competes with another person in the same market area at the same level of distribution.

(14) BASIC COST OF MOTOR FUEL. Whichever of the two following amounts is lower, namely, (i) the most recent invoice cost of motor fuel to the wholesaler or retailer, as the case may be, or (ii) the weighted-average cost of motor fuel to the wholesaler or retailer, as the case may be, in either of the two cases, all trade discounts except customary discounts for cash, plus the full value of freight costs and any taxes which may be required by law, now in effect or hereafter enacted, if not already included in the invoice cost of the motor fuel to the wholesaler or retailer, as the case may be. In computing its basic cost of motor fuel, its cost of doing business and in meeting competition under Section 8-22-8; a refiner that assesses a processing fee of any kind for credit card transactions must assess such fees in a like manner to its affiliates.

(15) COST TO WHOLESALER. As applied to wholesale distribution, the most recent invoice or weighted-average cost of the motor fuel, whichever is less, less all trade discounts except customary discounts for cash, to which shall be added all applicable state, federal and local taxes, inspection fees, freight charges not otherwise included in the cost of motor fuel, cartage to the retail outlet, if paid by the wholesaler, plus the cost of doing business.

(16) COST TO RETAILER. As applied to retail sales, the most recent invoice or weighted-average cost of the motor fuel, whichever is less, less all trade discounts except customary discounts for cash, to which shall be added all applicable state, federal and local taxes, inspection fees, freight cost, if paid by the retailer, plus the cost of doing business.

(17) COST OF DOING BUSINESS or OVERHEAD EXPENSES. Includes all costs incurred in the conduct of business, including but not limited to: labor (including salaries of executives and officers), rent (which rent must be no less than fair market value based on current use), interest on borrowed capital, depreciation, selling cost, maintenance of equipment, transportation or freight cost, losses due to breakage or damage; credit card fees, or other charges; credit losses, all types of licenses, taxes, insurance, and advertising.

(18) TRANSFER PRICE. Includes the price used by a person in transferring motor fuel to itself or an affiliate for resale at another marketing level. Such price shall be determined using standard, functional accounting procedures.

(19) AFFILIATE. Any person who (other than by means of franchise) controls, is controlled by, or is under common control with, any other person.

(20) OTHER GOODS. Any other articles, products, commodities, gifts, or concessions sold in a combined sale with motor fuel.

(21) BASIC COST OF OTHER GOODS. The lower of the two following amounts:

a. The most recent invoice cost of other goods to the wholesaler or retailer, as the case may be, less all trade discounts except customary discounts for cash, plus the full value of freight costs and any taxes which may be required by law, now in effect or hereafter enacted, if not already included in the invoice cost of the other goods to the wholesaler or retailer, as the case may be.

b. The weighted-average cost of other goods to the wholesaler or retailer, as the case may be, less all trade discounts except customary discounts for cash, plus the full value of freight costs and any taxes which may be required by law, now in effect or hereafter enacted, if not already included in the invoice cost of the other goods to the wholesaler or retailer, as the case may be.

(Acts 1984, No. 84-260, p. 433, §4; Act 2015-225, §1.)

§ 8-22-5 Oil Transfer Price Disclosure Required

All persons engaged in commerce in this state are required to disclose, upon request, their transfer prices on each grade of motor fuel transferred or sold to itself or an affiliate for resale at another marketing level of distribution. Such disclosure shall only be made to those persons affected by such transfer prices or in any legal proceedings arising from this chapter.

(Acts 1984, No. 84-260, p. 433, §5.)

§ 8-22-6 Certain Below Cost Fuel Sales Prohibited

It shall be unlawful for any person engaged in commerce in this state to sell or offer to sell motor fuel below cost or to sell or offer to sell it at a price lower than the seller charges other persons on the same day and on the same level of distribution, within the same market area, where the effect is to injure competition.

(Acts 1984, No. 84-260, p. 433, §6.)

§ 8-22-7 Certain Below Cost Fuel Transfers Prohibited

It shall be unlawful for any person engaged in commerce in this state to sell or transfer motor fuel to itself or an affiliate for resale at another marketing level of distribution at a transfer price that is below cost or lower than the price it charges a person who purchases for resale on the same day and at the same distribution level, within the same market area, where the effect is to injure competition.

(Acts 1984, No. 84-260, p. 433, §7.)

§ 8-22-8 Certain Sales and Transfer Price Differentials Authorized

(a) It is not a violation of this chapter if a difference exists between the transfer price or sales price of motor fuel of like grade and quality and the price charged to a person who purchases for resale at the same level of distribution, including any discounts, rebates, allowances, services, facilities granted any of a supplier’s own marketing operations in excess of those provided to a person who purchases for resale at the same level of distribution, if the lower price is due to a cost differential incurred because of a difference in shipping method, transportation, marketing, sale or quantity, in which such motor fuel is sold.

(b) It is not a violation of this chapter if any price is established in good faith to meet an equally low price of a competitor in the same market area on the same level of distribution selling the same or a similar product of like grade and quality or is exempt under Section 8-22-13.

(c) It is not a violation of this chapter for a retailer to offer to sell, or sell, motor fuel in a combined sale with other goods when the retailer’s combined selling price is not below the cost to the retailer of all motor fuel and other goods included in the transactions. A combined sale permitted by this chapter includes both contemporaneous sales and also sales or series of sales that are not contemporaneous, including where the purchaser receives accrued discounts or credits on motor fuel as a result of the purchaser’s earlier purchases of other goods from the retailer.

(Acts 1984, No. 84-260, p. 433, §8; Act 2015-225, §1.)

§ 8-22-9 Unlawful Acts Generally

It shall be unlawful under this section:

(1) For any person engaged in commerce in this state to sell or offer to sell motor fuel at wholesale or retail, as the case may be, where the effect is to injure competition.

(2) For any person, where the effect is to injure competition, to offer a rebate, to offer to give a rebate, to offer a concession of any kind in connection with the sale of motor fuel.

(3) For any retailer to induce or attempt to induce or to procure or attempt to procure the purchase of motor fuel at a price less than cost to wholesaler. Any person who violates any provision of this section shall be subject to the provisions and penalties of this chapter.

(Acts 1984, No. 84-260, p. 433, §9.)

§ 8-22-10 Below Cost Combined Selling Price of Motor Fuel and Promotional Gifts, Etc., Prohibited

In all advertisements, offers for sale or sales involving two or more items, at least one of which items is motor fuel, at a combined price, and in all advertisements, offers of sale, or sales, involving the giving of any gift or concession of any kind whatsoever (whether it be coupons or otherwise), the wholesaler’s or retailer’s combined selling price shall not be below the cost to the wholesaler or the cost to the retailer, respectively, of the total of all motor fuel and other goods.

(Acts 1984, No. 84-260, p. 433, §10; Act 2015-225, §1.)

§ 8-22-11 Sales Between Wholesalers

When one wholesaler sells motor fuel to any other wholesaler, the former shall not be required to include in his selling price to the latter “cost to the wholesaler” as provided by Section 8-22-4, but the latter wholesaler, upon resale to a retailer, shall be subject to the provisions of said section.

(Acts 1984, No. 84-260, p. 433, §11.)

§ 8-22-12 Applicability of Chapter Generally

(a) The provisions of the Motor Fuel Marketing Act shall not apply to a sale at wholesale or a sale at retail made

(1) In an isolated transaction and not in the usual course of business;

(2) Where motor fuels are advertised, offered for sale, or sold in a bona fide clearance sale for the purpose of discontinuing trade in such motor fuel, and said advertising, offer to sell, or sale shall state the reason thereafter and the quantity of such motor fuel advertised, offered for sale, or to be sold;

(3) Where motor fuel is advertised, offered for sale, or sold as imperfect or damaged, and said advertising, offer of sale or sale shall state the reason therefor and the quantity of such motor fuel advertised, offered for sale, or to be sold;

(4) Where motor fuel is sold upon the final liquidation of a business; or

(5) Where motor fuel is advertised, offered for sale, or sold by any fiduciary or other officer under the order or direction of any court.

(b) The notice required to be given under this section shall not be sufficient unless the subject of such sales is kept separate from other stocks and clearly and legibly marked with the reason for such sales, and any advertisement of such goods must indicate the same facts and the quantity to be sold.

(Acts 1984, No. 84-260, p. 433, §12.)

§ 8-22-13 Competitive Sales, Etc

(a) Any wholesaler may advertise, offer to sell, or sell motor fuel at a price made in good faith to meet the price of a competitor who is rendering the same type service and is selling the same article at cost to the said competing wholesaler as defined in this chapter. Any retailer may advertise, offer to sell, or sell motor fuel at a price made in good faith to meet the price of a competitor who is selling the same article at cost to the said competing retailer as defined in this chapter. The price of motor fuel advertised, offered for sale, or sold under the exceptions specified in Section 8-22-12 shall not be considered the price of a competitor and shall not be used as a basis for establishing prices below cost, nor shall the price established at a bankrupt sale be considered the price of a competitor within the purview of this section.

(b) In the absence of proof of the actual cost to the said competing wholesaler or the said competing retailer, as the case may be, such cost may be presumed to be the lowest cost to wholesalers or the lowest cost to retailers, as the case may be, within the same market area as determined by a cost survey made pursuant to subsection (b) of Section 8-22-15.

(Acts 1984, No. 84-260, p. 433, §13.)

§ 8-22-14 Contracts Violative of Chapter Rendered Void and Unenforceable

Any contract, express or implied, made by any person in violation of any of the provisions of this chapter, is illegal and void and no recovery shall be had thereon.

(Acts 1984, No. 84-260, p. 433, §14.)

§ 8-22-15 Determination of Cost to Wholesaler, Etc

(a) In determining cost to the wholesaler and cost to the retailer, the court of jurisdiction shall receive and consider as bearing on the bona fides of such cost, evidence tending to show that any person complained against under this chapter purchased the motor fuel involved in the complaint, at a fictitious price, or upon terms, or in such a manner, or under such invoices, as to conceal the true costs, discounts or terms of purchase, and shall also receive and consider as bearing on the bona fides of such costs, evidence of the normal, customary and prevailing terms and discounts in connection with other sales of a similar nature in the market area.

(b) Where a cost survey pursuant to recognized statistical and cost accounting practices has been made for a market area in which a violation of this chapter is committed or charged, to determine and establish on the basis of actual existing conditions the lowest cost to wholesalers or the lowest cost to retailers within the said area, the said cost survey shall be deemed competent evidence in any action or proceeding under this chapter as tending to prove actual cost to the wholesaler or actual cost to the retailer complained against, but any party against whom any such cost survey may be introduced in evidence shall have the right to offer evidence tending to prove any inaccuracy of such cost survey or any state of facts which would impair its probative value.

(Acts 1984, No. 84-260, p. 433, §15.)

§ 8-22-16 Penalties

(a) Any person who violates this chapter shall be subject to a civil penalty not to exceed ten thousand dollars ($10,000) per violation for each offense. Any such person shall also be liable for attorney fees and shall be subject to injunctive relief. Each day that a violation of this chapter occurs shall be considered as a separate violation.

(b) The penalty may be assessed and recovered in a civil action brought by the Attorney General, or by any district attorney in any court of competent jurisdiction. If brought by a district attorney, 30 percent of the penalty shall be paid to the office of the district attorney which brought the action and 70 percent of the penalty shall be paid to the treasury of the county in which the judgment was entered. If brought by the Attorney General, one-half of the penalty shall be paid to the treasury of the county where the action was brought and one-half shall be paid to the State Treasury.

(Acts 1984, No. 84-260, p. 433, §16; Acts 1994, No. 94-699, p. 1353, §1.)

§ 8-22-17 Equity Action by Person Injured from Violation of Chapter Authorized; Injunctive Relief; Damages; Attorneys Fees; Jurisdiction

(a) Any person injured by any violation, or who would suffer injury from any threatened violation, of this chapter may maintain an action in any court of equity jurisdiction to prevent, restrain, or enjoin such violation or threatened violation. If in such action a violation or threatened violation of this chapter shall be established, the court shall enjoin and restrain, or otherwise prohibit, such violation or threatened violation and, in addition thereto, the court shall assess in favor of the plaintiff and against the defendant the costs of suit, including reasonable attorney’s fees. In such action it shall not be necessary that actual damages to the plaintiff be alleged or proved, but where alleged and proved, the plaintiff in said action, in addition to such injunctive relief and cost of suit, including reasonable attorney’s fees, shall be entitled to recover from the defendant the damages sustained by him.

(b) A person injured as a result of an act or practice which violates this chapter may bring a civil action for appropriate relief, including an action for a declaratory judgment, injunctive relief, and for actual damages. Any actual damages found to have resulted from violations of this chapter shall be trebled by the court in making its award. Any action under this subsection shall be brought within two years after the alleged violations occurred.

(c) The court, in making an award under subsection (b) of this section, may award court costs and reasonable attorney’s fees to the prevailing party.

(d) The courts of this state are empowered with jurisdiction to hear and determine all cases brought under this section. Venue lies in any county where the defendant or any of them resides or does business or where the cause of action accrues.

(Acts 1984, No. 84-260, p. 433, §17.)

§ 8-22-18 Prima Facie Showing of Violation of Chapter

In any action brought under Sections 8-22-15, 8-22-16 or 8-22-17, upon a prima facie showing of a violation, the burden of rebutting the prima facie case thus made by showing justification shall shift to the defendant. A prima facie showing of a violation shall be constituted if the plaintiff shows:

(1) That the plaintiff’s purchase price from a refiner or wholesaler is greater than said refiner’s transfer price; or

(2) That the plaintiff’s purchase price from a refiner or wholesaler plus the plaintiff’s cost of doing business is greater than said refiner’s or wholesaler’s retail posted sales price; or

(3) That the plaintiff’s basic cost of motor fuel plus the plaintiff’s cost of doing business is greater than the posted sales price at a retail location of a competitor, within the plaintiff’s marketing area, suspected of selling motor fuel in violation of this chapter.

(Acts 1984, No. 84-260, p. 433, §18.)

Chapter 23 Health Studio Services

§ 8-23-1 Legislative Findings and Declaration

The Legislature finds and declares that there exist in connection with a substantial number of contracts for health studio services certain practices and business and financing methods which have worked undue financial hardship upon some of the citizens of our state, and that existing legal remedies are inadequate to correct existing problems in the industry. The Legislature finds and declares that the health studio industry has a significant impact upon the economy and well-being of the people of the state and that the provisions of this chapter regulating health studio contracts are necessary for the public welfare.

(Acts 1984, No. 84-297, p. 661, §1.)

§ 8-23-2 Definitions

For purposes of this section, the following terms shall have the following meanings, unless the context requires otherwise:

(1) HEALTH STUDIO. Includes any person, firm, corporation, organization, club, or association engaged in the sale of instruction, training, or assistance in a program of physical exercise or weight reduction, which may include the use of a sauna, whirlpool bath, weight lifting room, massage, steam room, or other exercising or weight reduction machine or device. The term also includes any person, firm, corporation, organization, or association engaged in the sale of the right or privilege to use exercise or weight reduction equipment or facilities, such as a sauna, whirlpool bath, weight lifting room, massage, steam room, or other exercising or weight reduction machine or device. “Health studio” does not include bona fide nonprofit organizations which have been granted tax exempt status by the Internal Revenue Service, including but not limited to, the Young Men’s Christian Association, Young Women’s Christian Association, or other similar organizations, whose functions as health studios are only incidental to their overall functions and purposes.

(2) HEALTH STUDIO SERVICES. Includes services, privileges, or rights offered for sale or provided by a “health studio.”

(3) DIVISION. The Consumer Division of the office of Attorney General.

(Acts 1984, No. 84-297, p. 661, §2.)

§ 8-23-3 Registration of Health Studio Sales Persons; Resident Agent; Security Bond

(a) Each person who sells health studio services in this state shall register with the Attorney General’s Consumer Protection Division on forms the division provides. The person shall furnish the full name and address of each business location where health studio services are sold as well as any other registration information the division deems appropriate.

(b) There shall be one registered agent representing each seller of health studio services in the county where a studio is located and shall serve as a resident agent for receipt of service of process.

(c) The division may bring an action for mandamus against a health studio to require the club to register or to have and maintain the surety required by this section.

(d) Every health studio which sells contracts for health studio services to be rendered at a planned health studio or a health studio under construction shall purchase a security bond in an amount not less than $50,000, or shall file with the division an irrevocable letter of credit by a surety company or lending institution permitted to do business in the state.

(e) A buyer of health studio services who suffers or sustains any loss or damage by reason of breach of contract or bankruptcy by the seller of the health studio services contract may bring an action based on the bond and recover against the surety.

(f) The liability of the surety under any bond may not exceed the aggregate amount of the bond, regardless of the number of amount of claims filed.

(g) If the claims filed should exceed the amount of the bond, the surety shall pay the amount of the bond to the division for distribution to claimants entitled to restitution and shall be relieved of all liability under the bond.

(h) Any person or business bonded under this section shall maintain accurate records of the bond and of premium payments on it. These records shall be open to inspection by the division at any time during normal business hours.

(Acts 1984, No. 84-297, p. 661, §3.)

§ 8-23-4 Health Studio Services Contracts - Composition

Every contract for the sale of health studio services shall contain the following:

(1) Provisions for the penalty-free cancellation of the contract within three days, exclusive of holidays and weekends, of its making, upon the mailing or delivery of written notice to the health studio, and refund upon such notice of all moneys paid under the contract, except that the health studio may retain an amount computed by dividing the number of complete days in the contract’s term or, if appropriate, the number of occasions health studio services are to be rendered, into the total contract price and multiplying the result by the number of complete days that have passed since the contract’s making or, if appropriate, by the number of occasions that health studio services have been rendered.

(2) Provision for the cancellation of the contract if the health studio goes out of business and fails to provide facilities within five miles or moves its facilities more than five miles from the location designated in such contract, upon written notice by the buyer, with refund upon such notice of funds paid or accepted in payment of the contract or in an amount computed by dividing the contract price by the number of weeks of the contract’s term and multiplying the result by the number of weeks remaining in the contract’s term.

(3) Provision for the cancellation of the contract if the buyer dies or becomes totally and permanently disabled during the membership term following the date of such contract, with refund of funds paid or accepted in payment of the contract in an amount computed by dividing the contract price by the number of weeks of the contract’s term and multiplying the result by the number of weeks remaining in the contract’s term. The contract may require a buyer or the buyer’s estate seeking relief under this subsection to provide reasonable proof of total and permanent disability or death.

(4) Provision that period over which the contract is financed shall not be for a period in excess of 24 months.

(5) Buyer has the right to rescind this agreement within a 30-day period after the facility becomes fully operational if there has been any misrepresentation concerning the facilities that would be available to said buyer.

(6) Provision that in the event that buyer moves out of town and there exists no affiliated facility within a 15-mile radius of buyer’s new location the contract or membership agreement may be cancelled at buyer’s option. On an installment sales contract a pro rata refund must be available at buyer’s option.

(Acts 1984, No. 84-297, p. 661, §4.)

§ 8-23-5 Health Studio Services Contracts - Written Contract Required; Rights of Buyer

Upon entering into a contract for health studio services, the buyer shall be provided with a written contract, which shall include the name, address, and primary place of business of the health studio. Prior to entering into any such contract, the health studio shall also provide the buyer with a current copy of any rules and regulations applicable to the buyer’s use of the health studio.

(1) If a health studio facility is not in existence on the date the health studio contract is executed, the buyer may cancel the contract in the event the facility is not open for business on the date as provided by the contract.

(2) If the buyer cancels under this section, the health studio facility shall refund any deposit, down payment, or payment on the contract.

(Acts 1984, No. 84-297, p. 661, §5.)

§ 8-23-6 Applicability of Chapter

The provisions of this chapter shall not apply to any contracts for health studio services entered into before August 13, 1984, or to the subsequent renewals of said contracts.

(Acts 1984, No. 84-297, p. 661, §6.)

§ 8-23-7 Assignment of Contract; Notice

No right of action or defense arising out of a contract for health studio services which the buyer has against the seller, and which would be cut off by assignment, shall be cut off by assignment of the contract to any third party whether or not he acquires the contract in good faith and for value unless the assignee gives notice of the assignment to the buyer as provided in this section and within 30 days of the mailing of notice receives no written notice of the facts giving rise to the claim or defense of the buyer. A notice of assignment shall be in writing addressed to the buyer at the address shown on the contract and shall identify the contract and inform the buyer that he must, within 30 days of the date of mailing of the notice, notify the assignee in writing of any facts giving rise to a claim or defense which he may have. The notice of assignment shall state the name of the seller and buyer, a description of the services, the contract balance and the number and amount of the installments.

(Acts 1984, No. 84-297, p. 661, §7.)

§ 8-23-8 Restriction of Right of Action of Buyer Prohibited

No contract for health studio services shall require or entail the execution of any note or series of notes by the buyer which when separately negotiated will cut off as to the parties any right of action or defense which the buyer may have against the seller.

(Acts 1984, No. 84-297, p. 661, §8.)

§ 8-23-9 Effect of Noncompliance with Chapter

Any contract for health studio services which does not comply with the applicable provisions of this chapter shall be void and unenforceable as contrary to public policy.

(Acts 1984, No. 84-297, p. 661, §9.)

§ 8-23-10 Supervision and Enforcement of Chapter

Supervision and enforcement of the provisions of this chapter shall rest with the Attorney General and district attorneys of the several judicial circuits where such health studios are situated, respectively.

(Acts 1984, No. 84-297, p. 661, §10.)

§ 8-23-11 Penalty

Violation of this chapter shall constitute a Class C felony.

(Acts 1984, No. 84-297, p. 661, §11.)

§ 8-23-12 Chapter Not Exclusive

Provisions of this chapter are not exclusive and do not relieve the parties or contracts subject thereto from compliance with all other applicable laws.

(Acts 1984, No. 84-297, p. 661, §12.)

§ 8-23-13 Noncompliance with Chapter Constitutes Unfair Trade Practice

Failure to comply with the provisions of this chapter is an unfair or deceptive trade practice.

(Acts 1984, No. 84-297, p. 661, §13.)

Chapter 24 Sales Representative’s Commission Contracts

§ 8-24-1 Definitions

As used in this chapter, the following terms shall have the following meanings, respectively, unless the context clearly indicates otherwise:

(1) COMMISSION. Compensation accruing to a sales representative for payment by a principal, the rate of which is expressed as a percentage of the dollar amount of certain orders or sales.

(2) PRINCIPAL. Any person who does all of the following:

a. Engages in the business of manufacturing, producing, importing, or distributing a product or products for sale to customers who purchase the product or products for resale.

b. Utilizes sales representatives to solicit orders for the product or products.

c. Compensates the sales representatives, in whole or in part, by commission.

(3) SALES REPRESENTATIVE. Any person who engages in the business of soliciting, on behalf of a principal, orders for the purchase at wholesale of the product or products of the principal, but does not include a person who places orders or purchases for his or her own account for resale, or a person engaged in home solicitation sales.

(4) TERMINATION. The end of services performed by the sales representative for the principal, whether by discharge, resignation, or expiration of a contract.

(Acts 1985, No. 85-543, p. 782, §1; Acts 1994, No. 94-686, p. 1319, §1.)

§ 8-24-2 When Commission Is Due; Payment

(a) The terms of the contract between the principal and sales representative shall determine when a commission is due.

(b) If the time when the commission is due cannot be determined by a contract between the principal and sales representative, the past practices between the parties shall control, or if there are no past practices, the custom and usage prevalent in this state for the business that is the subject of the relationship between the parties shall control.

(c) All commissions that are due at the time of termination of a contract between a sales representative and principal shall be paid within thirty days after the date of termination. Commissions that become due after the termination date shall be paid within thirty days after the date on which the commissions become due.

(Acts 1985, No. 85-543, p. 782, §2; Acts 1994, No. 94-686, p. 1319, §1.)

§ 8-24-3 Failure to Pay Commission

A principal who fails to pay a commission as required by Section 8-24-2 is liable to the sales representative in a civil action for three times the damages sustained by the sales representative plus reasonable attorney’s fees and court costs.

(Acts 1985, No. 85-543, p. 782, §3; Acts 1994, No. 94-686, p. 1319, §1.)

§ 8-24-4 When Nonresident Principal Considered to Be Doing Business in State

A principal who is not a resident of this state and who enters into a contract subject to this chapter is considered to be doing business in this state for purposes of the exercise of personal jurisdiction over the principal.

(Acts 1985, No. 85-543, p. 782, §4; Acts 1994, No. 94-686, p. 1319, §1.)

§ 8-24-5 Waiver of Chapter Provisions; Other Rights or Remedies

(a) This chapter may not be waived, whether by express waiver or by any provision in a contract attempting to make the contract or agreement subject to the laws of another state. A waiver of any provision of this chapter is void.

(b) This chapter does not invalidate or restrict any other right or remedy available to a sales representative or preclude a sales representative from seeking to recover in one action on all claims against a principal.

(Acts 1985, No. 85-543, p. 782, §5; Acts 1994, No. 94-686, p. 1319, §1.)

Chapter 25 Rental-Purchase Agreements

§ 8-25-1 Definitions

As used in this chapter, the following words and phrases shall have the following meanings ascribed to them, unless the context clearly indicates otherwise:

(1) ADVERTISEMENT. A commercial message in any medium that directly or indirectly promotes or assists a rental-purchase agreement, except for instore merchandising aids.

(2) CONSUMER. An individual who leases personal property under a rental-purchase agreement.

(3) MERCHANDISE. The personal property that is the subject of a rental-purchase agreement.

(4) MERCHANT. A person who, in the ordinary course of business, regularly leases, offers to lease, or arranges for the leasing of merchandise under a rental-purchase agreement, and includes a person who is assigned an interest in a rental-purchase agreement.

(5) RENTAL-PURCHASE AGREEMENT. An agreement for the use of merchandise by a consumer for personal, family, or household purposes, for an initial period of four months or less that is automatically renewable with each payment after the initial period, and that permits the consumer to become the owner of the merchandise. This term does not include any transaction wherein a consumer sells personal property to a merchant and then leases the same personal property back with or without a right to repurchase the property. Any rental-purchase agreement in compliance with this chapter shall not be construed to be, nor governed by the laws relating to:

a. A “credit sale” as that term is defined in subdivision (4) of Section 5-19-1; or

b. A “security interest” as that term is defined in subdivision (37) of Section 7-1-201 of the Uniform Commercial Code.

(Acts 1986, No. 86-497, p. 945, §1; Acts 1991, No. 91-654, p. 1232, §1; Acts 1993, No. 93-614, §1(3).)

§ 8-25-2 Disclosures by Merchant to Consumer; Inaccuracy Due to Acts, Etc., After Delivery; Form of Disclosure

(a) The merchant shall disclose to the consumer the information required by this title. In a transaction involving more than one consumer, the merchant need disclose to only one of the consumers who are primarily obligated. In a transaction involving more than one merchant, only one merchant need make the disclosures.

(b) The disclosures shall be made clearly and conspicuously in writing in a form that the consumer may keep. The required disclosure may be made a part of the rental-purchase agreement or provided on a separate form.

(c) If a disclosure becomes inaccurate as the result of any act, occurrence, or agreement after delivery of the required disclosure, the resulting inaccuracy is not a violation of this title.

(d) For each rental-purchase agreement, the lessor shall disclose the following items, as applicable:

(1) Whether the merchandise is new or has been previously rented;

(2) The amount and timing of periodic payments;

(3) A brief explanation of other charges besides rental payments for which the consumer may be liable;

(4) The total number of rental payments required and the total amount to be paid to acquire ownership of the merchandise;

(5) That the consumer does not acquire ownership rights unless the consumer has complied with the ownership terms of the agreement; and

(6) A statement explaining who is liable for loss of or damage to the merchandise.

(e) The following form is an example of the form which may be used to satisfy the disclosure requirements of this section:

Rental-Purchase Discloures

1. Condition of property: new/previously rented

2. This agreement is for _____ week(s) or _____ month(s).

Weekly rental is _____.

Monthly rental is _____.

3. Other charges (specify):

4. Ownership:

If you renew this agreement for ______ weeks/months in a row, you will pay a total of $ _____ to own the property.

5. You do not own the property. You will not own the property unless you comply fully with the ownership terms of this agreement.

6. Explanation of liability for loss of or damage to property

(Acts 1986, No. 86-497, p. 945, §2.)

§ 8-25-3 Prohibited Provisions

A rental-purchase agreement shall not contain a provision:

(1) Requiring a confession of judgment;

(2) Authorizing a merchant or agent of the merchant to commit a breach of the peace while repossessing merchandise;

(3) Waiving a defense, counterclaim, or right the consumer may have against the merchant or an agent of the merchant; or

(4) Requiring the purchase of insurance or waiver of liability from the merchant to cover the merchandise; provided, however, that the lessor may offer to the lessee any such insurance or waiver of liability if it is clearly and conspicuously disclosed on the face of the insurance or waiver of liability agreement, in print not less than eight-point bold face type, that the purchase of any such insurance or waiver of liability by the lessee from the lessor is optional. The charge for any insurance or waiver of liability shall not exceed 15 percent of the rental payment.

(Acts 1986, No. 86-497, p. 945, §3; Acts 1991, No. 91-654, p. 1232, §1.)

§ 8-25-4 Reinstatement of Agreement After Failure to Make Timely Payment

A consumer who fails to make a timely rental payment may reinstate an agreement without losing any rights or options previously acquired, by taking the required action within five days if the consumer pays monthly or within two days if the consumer pays more frequently than monthly. Nothing in this section shall prevent the accrual of any late charges or reinstatement fees charged by the merchant. Nothing in this section shall prevent the merchant from attempting repossession of the merchandise during the reinstatement period, and the consumer’s right to reinstate an agreement shall not expire because of such a repossession.

A consumer must pay all rental and other charges due or return the merchandise to the merchant if the merchant so requests during the reinstatement period. If the merchandise is returned during the applicable reinstatement period other than through judicial process, the right to reinstate shall be extended for a period of not less than 30 days after the date of the return of the merchandise.

No consumer shall have the right to reinstate more than three times during the term of any one rental-purchase agreement.

On reinstatement, the merchant shall provide the consumer with the same merchandise or substitute merchandise of comparable quality and condition; however, the merchant shall not be required to provide new disclosures upon reinstatement.

(Acts 1986, No. 86-497, p. 945, §4.)

§ 8-25-5 Required Provisions in Advertisements

An advertisement for a rental-purchase agreement that states the amount of a payment or the right to acquire ownership of any one particular item under the agreement must clearly and conspicuously state:

(1) That the transaction advertised is a rental-purchase agreement and

(2) The total amount and the number of payments necessary to acquire ownership.

(Acts 1986, No. 86-497, p. 945, §5.)

§ 8-25-6 Damages and Fees Recoverable for Violations of Chapter; Nonliability Where Merchant Discovers Error, Gives Notice, and Makes Adjustments

(a) A consumer damaged by a violation of this chapter by a merchant is entitled to recover from the merchant:

(1) Actual damages;

(2) Twenty-five percent of an amount equal to the total amount of payments required to obtain ownership of the merchandise involved, except that the amount recovered under this subdivision may not be less than $100 nor more than $1,000; and

(3) Reasonable attorney’s fees not to exceed 15 percent of the consumer’s allowable recovery and court costs.

(b) A merchant is not liable under this section for a violation of this chapter caused by the merchant’s error if before the sixty-first day after the date the merchant discovers the error, and before an action under this section is filed or written notice of the error is received by the merchant from the consumer, the merchant gives the consumer written notice of the error and makes adjustments in the consumer’s account as necessary to assure that the agreement complies with this chapter.

(Acts 1986, No. 86-497, p. 945, §6.)

Chapter 25A Recovery Fee for Rental Equipment

§ 8-25A-1 Recovery Fee Included in Rental Agreement for Heavy Equipment Property

(a) Except as provided in subsection (b), a person in the business of renting heavy equipment property located in this state may include in the rental agreement a one and one-half percent recovery fee on the gross rental receipts from any item of heavy equipment rented by a customer. The total amount of the recovery fee shall be retained by the business for the purpose of paying personal property taxes levied by all taxing jurisdictions against the heavy equipment property. For the purposes of this section, heavy equipment property includes self-propelled, self-powered, or pull-type equipment, including farm equipment, that is intended to be used for agricultural, construction, industrial, mining, or forestry uses. Heavy equipment property also includes equipment that is described under Industry Code 532412 of the 2002 North American Industry Classification System as published by the Bureau of the Census.

(b) Notwithstanding subsection (a), the recovery fee provided in this section shall not apply to the leasing or renting of heavy equipment to the State of Alabama, any municipality, or any county.

(Act 2009-583, p. 1718, §1.)

Chapter 26 Alabama Athlete Agents Regulatory Act

§ 8-26-1 Short Title

[Repealed]

Repealed by Act 2001-701, § 3, effective October 1, 2001.

(Acts 1987, No. 87-628, p. 1115, §1.)

§ 8-26-1.1 Legislative Findings

[Repealed]

Repealed by Act 2001-701, § 3, effective October 1, 2001.

(Act 98-132, p. 194, §1.)

§ 8-26-2 Definitions

[Repealed]

Repealed by Act 2001-701, § 3, effective October 1, 2001.

(Acts 1987, No. 87-628, p. 1115, §2; Act 98-132, p. 194, §2.)

§ 8-26-3 Alabama Athlete Agent Regulatory Commission Created; Members; Terms of Office; Vacancies; Reappointment; Oath; Removal; Officers; Quorum; Records; Annual Register; Employees, Rules and Regulations; Compensation and Expenses

[Repealed]

Repealed by Act 2001-701, § 3, effective October 1, 2001.

(Acts 1987, No. 87-628, p. 1115, §3; Acts 1994, 1st Ex. Sess., No. 94-828, p. 162, §1; Act 98–132, p. 194, §2.)

§ 8-26-4 Registration of Athlete Agents Required

[Repealed]

Repealed by Act 2001-701, § 3, effective October 1, 2001.

(Acts 1987, No. 87-628, p. 1115, §4; Acts 1994, 1st Ex. Sess., No. 94-828, p. 162, §1.)

§ 8-26-5 Application for Registration

[Repealed]

Repealed by Act 2001-701, § 3, effective October 1, 2001.

(Acts 1987, No. 87-628, p. 1115, §5.)

§ 8-26-6 Evaluation of Applicant and Principal Place of Business

[Repealed]

Repealed by Act 2001-701, § 3, effective October 1, 2001.

(Acts 1987, No. 87-628, p. 1115, §6.)

§ 8-26-7 Grounds for Refusal to Grant Registration; Notice of Refusal and Opportunity for Hearing; Hearing Procedure; Determination of Commission; Appeals; Effective Date of Orders and Judgments

[Repealed]

Repealed by Act 2001-701, § 3, effective October 1, 2001.

(Acts 1987, No. 87-628, p. 1115, §7; Acts 1994, 1st Ex. Sess., No. 94-828, p. 162, §1; Act 98–132, p. 194, §2.)

§ 8-26-8 Revocation or Suspension of Registration; Procedure; Reinstatement

[Repealed]

Repealed by Act 2001-701, § 3, effective October 1, 2001.

(Acts 1987, No. 87-628, p. 1115, §8.)

§ 8-26-9 Duration of Registration; Renewal Application, Bond, and Fee

[Repealed]

Repealed by Act 2001-701, § 3, effective October 1, 2001.

(Acts 1987, No. 87-628, p. 1115, §9.)

§ 8-26-10 Temporary or Provisional Registration

[Repealed]

Repealed by Act 2001-701, § 3, effective October 1, 2001.

(Acts 1987, No. 87-628, p. 1115, §10.)

§ 8-26-11 Disclosure of Names and Addresses of Financially Interested Persons

[Repealed]

Repealed by Act 2001-701, § 3, effective October 1, 2001.

(Acts 1987, No. 87-628, p. 1115, §11.)

§ 8-26-12 Filing and Registration Fees

[Repealed]

Repealed by Act 2001-701, § 3, effective October 1, 2001.

(Acts 1987, No. 87-628, p. 1115, §12; Acts 1994, 1st Ex. Sess., No. 94-828, p. 162, §1.)

§ 8-26-13 Setting of Fees by Commission

[Repealed]

Repealed by Act 2001-701, § 3, effective October 1, 2001.

(Acts 1987, No. 87-628, p. 1115, §13; Acts 1994, 1st Ex. Sess., No. 94-828, p. 162, §1.)

§ 8-26-14 Surety Bond - Requirement; Amount; Malpractice Coverage in Lieu of Bond; Certificate of Deposit Payable to Commission or Savings Account Assigned to Commission in Lieu of Bond

[Repealed]

Repealed by Act 2001-701, § 3, effective October 1, 2001.

(Acts 1987, No. 87-628, p. 1115, §14; Acts 1994, 1st Ex. Sess., No. 94-828, p. 162, §1; Act 98–132, p. 194, §2.)

§ 8-26-15 Surety Bond - to Whom Payable; Conditions; Damages Not Limited to Amount of Bond, Etc

[Repealed]

Repealed by Act 2001-701, § 3, effective October 1, 2001.

(Acts 1987, No. 87-628, p. 1115, §15, Act 98–132, p. 194, §2.)

§ 8-26-16 Surety Bond - Suspension for Failure to Maintain Coverage

[Repealed]

Repealed by Act 2001-701, § 3, effective October 1, 2001.

(Acts 1987, No. 87-628, p. 1115, §16.)

§ 8-26-17 Disposition of Moneys and Fines Collected; Alabama Athlete Agent Regulatory Commission Fund

[Repealed]

Repealed by Act 2001-701, § 3, effective October 1, 2001.

(Acts 1987, No. 87-628, p. 1115, §17; Acts 1994, 1st Ex. Sess., No. 94-828, p. 162, §1.)

§ 8-26-18 Contents of Registration

[Repealed]

Repealed by Act 2001-701, § 3, effective October 1, 2001.

(Acts 1987, No. 87-628, p. 1115, §18.)

§ 8-26-19 Applicability of Registration

[Repealed]

Repealed by Act 2001-701, § 3, effective October 1, 2001.

(Acts 1987, No. 87-628, p. 1115, §19.)

§ 8-26-20 Certificate of Convenience Where Registered Person Has Died, Been Declared Incompetent, or for Whose Estate a Conservator Has Been Appointed

[Repealed]

Repealed by Act 2001-701, § 3, effective October 1, 2001.

(Acts 1987, No. 87-628, p. 1115, §20.)

§ 8-26-21 Eligibility for Certificate of Convenience; Duration and Renewal of Certificate

[Repealed]

Repealed by Act 2001-701, § 3, effective October 1, 2001.

(Acts 1987, No. 87-628, p. 1115, §21.)

§ 8-26-22 Contracts - Approved Form and Content; Agent to Register Presence on Campus, Etc.; Notice of Negotiations, Etc.; Contract Requirements; Rescission; Penalties

[Repealed]

Repealed by Act 2001-701, § 3, effective October 1, 2001.

(Acts 1987, No. 87-628, p. 1115, §22; Act 98–132, p. 194, §2.)

§ 8-26-23 Contracts — Statement That Amateur Standing May Be Jeopardized

[Repealed]

Repealed by Act 2001-701, § 3, effective October 1, 2001.

(Acts 1987, No. 87-628, p. 1115, §23.)

§ 8-26-24 Limit on Athlete Agent’s Fee

[Repealed]

Repealed by Act 2001-701, § 3, effective October 1, 2001.

(Acts 1987, No. 87-628, p. 1115, §24; Acts 1994, 1st Ex. Sess., No. 94-828, p. 162, §1.)

§ 8-26-25 Trust Fund Where Athlete Agent Is Recipient of Athlete’s Salary

[Repealed]

Repealed by Act 2001-701, § 3, effective October 1, 2001.

(Acts 1987, No. 87-628, p. 1115, §25.)

§ 8-26-26 Records to Be Kept by Athlete Agent

[Repealed]

Repealed by Act 2001-701, § 3, effective October 1, 2001.

(Acts 1987, No. 87-628, p. 1115, §26; Acts 1994, 1st Ex. Sess., No. 94-828, p. 162, §1.)

§ 8-26-27 Maintenance of Financial and Business Records; Access to Records by Commission; Subpoena Power

[Repealed]

Repealed by Act 2001-701, § 3, effective October 1, 2001.

(Acts 1987, No. 87-628, p. 1115, §27; Act 98–132, p. 194, §2.)

§ 8-26-28 Rules and Regulations

[Repealed]

Repealed by Act 2001-701, § 3, effective October 1, 2001.

(Acts 1987, No. 87-628, p. 1115, §28.)

§ 8-26-29 Sale or Transfer of Athlete Agent’s Interest in Profits of the Athlete Agent

[Repealed]

Repealed by Act 2001-701, § 3, effective October 1, 2001.

(Acts 1987, No. 87-628, p. 1115, §29.)

§ 8-26-30 Interest in Entity Directly Involved in Same Sport Prohibited

[Repealed]

Repealed by Act 2001-701, § 3, effective October 1, 2001.

(Acts 1987, No. 87-628, p. 1115, §30.)

§ 8-26-31 Disclosure of Athlete Agent’s Interest in Entity Used in Giving Investment Advice

[Repealed]

Repealed by Act 2001-701, § 3, effective October 1, 2001.

(Acts 1987, No. 87-628, p. 1115, §31.)

§ 8-26-32 Contracts in Violation of Law

[Repealed]

Repealed by Act 2001-701, § 3, effective October 1, 2001.

(Acts 1987, No. 87-628, p. 1115, §32.)

§ 8-26-33 Publication of False, Fraudulent, Etc., Information; Advertisements of Athlete Agent; False Information or Promises Concerning Employment

[Repealed]

Repealed by Act 2001-701, § 3, effective October 1, 2001.

(Acts 1987, No. 87-628, p. 1115, §33.)

§ 8-26-34 Division of Fees with Professional Sports League Prohibited; Offers of Compensation to University Employees for Referrals; Employee of Union or Players Association May Not Have Interest in Revenues

[Repealed]

Repealed by Act 2001-701, § 3, effective October 1, 2001.

(Acts 1987, No. 87-628, p. 1115, §34.)

§ 8-26-35 Limit on Athlete Agent’s Fee Where Athlete Fails to Procure or Be Paid for Employment

[Repealed]

Repealed by Act 2001-701, § 3, effective October 1, 2001.

(Acts 1987, No. 87-628, p. 1115, §35.)

§ 8-26-36 Parties to Action Against Athlete Agent; Transfer and Assignment of Action; Jurisdiction Determined by Damages Claimed

[Repealed]

Repealed by Act 2001-701, § 3, effective October 1, 2001.

(Acts 1987, No. 87-628, p. 1115, §36.)

§ 8-26-37 Service of Process Where Athlete Agent Departs State with Intent to Defraud or Avoid Service

[Repealed]

Repealed by Act 2001-701, § 3, effective October 1, 2001.

(Acts 1987, No. 87-628, p. 1115, §37.)

§ 8-26-38 Referral of Disputes to Commission; Appeal; Certification That No Controversy Exists

[Repealed]

Repealed by Act 2001-701, § 3, effective October 1, 2001.

(Acts 1987, No. 87-628, p. 1115, §38.)

§ 8-26-39 Validity of Provisions as to Arbitration, Existence of Contract, Validity, Construction, Performance, Nonperformance, Breach, Operation, Continuance, or Termination

[Repealed]

Repealed by Act 2001-701, § 3, effective October 1, 2001.

(Acts 1987, No. 87-628, p. 1115, §39.)

§ 8-26-40 Effect of Failure to Comply with Section 8-26-4

[Repealed]

Repealed by Act 2001-701, § 3, effective October 1, 2001.

(Acts 1987, No. 87-628, p. 1115, §40.)

§ 8-26-41 Penalties for Violation of Chapter

[Repealed]

Repealed by Act 2001-701, § 3, effective October 1, 2001.

(Acts 1987, No. 87-628, p. 1115, §41; Act 98–132, p. 194, § 2.)

Chapter 26A Alabama Uniform Athlete Agents Act

Article 1 General Provisions

§ 8-26A-1 Short Title

[Repealed]

Repealed by Act 2016-415, §2, effective October 1, 2016.

(Act 2001-701, p. 1494, §1.)

§ 8-26A-2 Definitions

[Repealed]

Repealed by Act 2016-415, §2, effective October 1, 2016.

(Act 2001-701, p. 1494, §1.)

§ 8-26A-3 Administration; Service of Process; Subpoenas

[Repealed]

Repealed by Act 2016-415, §2, effective October 1, 2016.

(Act 2001-701, p. 1494, §1.)

§ 8-26A-4 Athlete Agents; Registration Required; Void Contracts

[Repealed]

Repealed by Act 2016-415, §2, effective October 1, 2016.

(Act 2001-701, p. 1494, §1.)

§ 8-26A-5 Registration as Athlete Agent; Form; Requirements

[Repealed]

Repealed by Act 2016-415, §2, effective October 1, 2016.

(Act 2001-701, p. 1494, §1; Act 2011-173, p. 337, §3.)

§ 8-26A-6 Certificate of Registration; Issuance or Denial; Renewal

[Repealed]

Repealed by Act 2016-415, §2, effective October 1, 2016.

(Act 2001-701, p. 1494, §1.)

§ 8-26A-7 Suspension, Revocation, or Refusal to Renew Registration

[Repealed]

Repealed by Act 2016-415, §2, effective October 1, 2016.

(Act 2001-701, p. 1494, §1.)

§ 8-26A-8 Temporary Registration

[Repealed]

Repealed by Act 2016-415, §2, effective October 1, 2016.

(Act 2001-701, p. 1494, §1.)

§ 8-26A-9 Registration and Renewal Fees

[Repealed]

Repealed by Act 2016-415, §2, effective October 1, 2016.

(Act 2001-701, p. 1494, §1.)

§ 8-26A-10 Required Form of Contract

[Repealed]

Repealed by Act 2016-415, §2, effective October 1, 2016.

(Act 2001-701, p. 1494, §1.)

§ 8-26A-11 Notice of Contract to Educational Institution

[Repealed]

Repealed by Act 2016-415, §2, effective October 1, 2016.

(Act 2001-701, p. 1494, §1.)

§ 8-26A-12 Student-Athlete’s Right to Cancel

[Repealed]

Repealed by Act 2016-415, §2, effective October 1, 2016.

(Act 2001-701, p. 1494, §1.)

§ 8-26A-13 Required Records

[Repealed]

Repealed by Act 2016-415, §2, effective October 1, 2016.

(Act 2001-701, p. 1494, §1.)

§ 8-26A-14 Prohibited Conduct

[Repealed]

Repealed by Act 2016-415, §2, effective October 1, 2016.

(Act 2001-701, p. 1494, §1.)

§ 8-26A-15 Criminal Penalties

[Repealed]

Repealed by Act 2016-415, §2, effective October 1, 2016.

(Act 2001-701, p. 1494, §1.)

§ 8-26A-16 Civil Remedies

[Repealed]

Repealed by Act 2016-415, §2, effective October 1, 2016.

(Act 2001-701, p. 1494, §1.)

§ 8-26A-17 Administrative Penalty

[Repealed]

Repealed by Act 2016-415, §2, effective October 1, 2016.

(Act 2001-701, p. 1494, §1.)

§ 8-26A-18 Uniformity of Application and Construction

[Repealed]

Repealed by Act 2016-415, §2, effective October 1, 2016.

(Act 2001-701, p. 1494, §1.)

Article 2 Commission and Disposition of Funds

§ 8-26A-30 Alabama Athlete Agents Commission Continued; Members; Terms of Office; Vacancies; Reappointment; Oath; Removal; Officers; Quorum; Records; Annual Register; Employees, Rules and Regulations; Compensation and Expenses

[Repealed]

Repealed by Act 2016-415, §2, effective October 1, 2016.

(Act 2001-701, p. 1494, §1, Act 2003-59, §1.)

§ 8-26A-31 Disposition of Moneys and Fines Collected; Alabama Athlete Agents Fund

[Repealed]

Repealed by Act 2016-415, §2, effective October 1, 2016.

(Act 2001-701, p. 1494, §1.)

Chapter 26B Revised Uniform Athlete Agents Act

Article 1 General Provisions

§ 8-26B-1 Short Title

This chapter may be cited as the Revised Uniform Athlete Agents Act (2016).

(Act 2016-415, §1.)

§ 8-26B-2 Definitions

In this chapter:

(1) “Agency contract” means an agreement in which a student athlete authorizes a person to negotiate or solicit on behalf of the athlete a professional-sports-services contract or endorsement contract.

(2) “Athlete agent”:

(A) means an individual, whether or not registered under this chapter, who:

(i) directly or indirectly recruits or solicits a student athlete to enter into an agency contract or, for compensation, procures employment or offers, promises, attempts, or negotiates to obtain employment for a student athlete as a professional athlete or member of a professional sports team or organization;

(ii) for compensation or in anticipation of compensation related to a student athlete’s participation in athletics:

(I) serves the athlete in an advisory capacity on a matter related to finances, business pursuits, or career management decisions, unless the individual is an employee of an educational institution acting exclusively as an employee of the institution for the benefit of the institution; or

(II) manages the business affairs of the athlete by providing assistance with bills, payments, contracts, or taxes; or

(iii) in anticipation of representing a student athlete for a purpose related to the athlete’s participation in athletics:

(I) gives consideration to the student athlete or another person;

(II) serves the athlete in an advisory capacity on a matter related to finances, business pursuits, or career management decisions; or

(III) manages the business affairs of the athlete by providing assistance with bills, payments, contracts, or taxes; but

(B) does not include an individual who:

(i) acts solely on behalf of a professional sports team or organization; or

(ii) is a licensed, registered, or certified professional and offers or provides services to a student athlete customarily provided by members of the profession, unless the individual:

(I) also recruits or solicits the athlete to enter into an agency contract;

(II) also, for compensation, procures employment or offers, promises, attempts, or negotiates to obtain employment for the athlete as a professional athlete or member of a professional sports team or organization; or

(III) receives consideration for providing the services calculated using a different method than for an individual who is not a student athlete.

(3) “Athletic director” means the individual responsible for administering the overall athletic program of an educational institution or, if an educational institution has separately administered athletic programs for male students and female students, the athletic program for males or the athletic program for females, as appropriate.

(4) “Educational institution” includes a public or private elementary school, secondary school, technical or vocational school, community college, college, and university.

(5) “Endorsement contract” means an agreement under which a student athlete is employed or receives consideration to use on behalf of the other party any value that the athlete may have because of publicity, reputation, following, or fame obtained because of athletic ability or performance.

(6) “Enrolled” means registered for courses and attending athletic practice or class. “Enrolls” has a corresponding meaning.

(7) “Intercollegiate sport” means a sport played at the collegiate level for which eligibility requirements for participation by a student athlete are established by a national association that promotes or regulates collegiate athletics.

(8) “Interscholastic sport” means a sport played between educational institutions that are not community colleges, colleges, or universities.

(9) “Licensed, registered, or certified professional” means an individual licensed, registered, or certified as an attorney, dealer in securities, financial planner, insurance agent, real estate broker or sales agent, tax consultant, accountant, or member of a profession, other than that of athlete agent, who is licensed, registered, or certified by the state or a nationally recognized organization that licenses, registers, or certifies members of the profession on the basis of experience, education, or testing.

(10) “Person” means an individual, estate, business or nonprofit entity, public corporation, government or governmental subdivision, agency, or instrumentality, or other legal entity.

(11) “Professional-sports-services contract” means an agreement under which an individual is employed as a professional athlete or agrees to render services as a player on a professional sports team or with a professional sports organization.

(12) “Record” means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.

(13) “Recruit or solicit” means attempt to influence the choice of an athlete agent by a student athlete or, if the athlete is a minor, a parent or guardian of the athlete. The term does not include giving advice on the selection of a particular agent in a family, coaching, or social situation unless the individual giving the advice does so because of the receipt or anticipated receipt of an economic benefit, directly or indirectly, from the agent.

(14) “Registration” means registration as an athlete agent under this chapter.

(15) “Sign” means, with present intent to authenticate or adopt a record:

(A) to execute or adopt a tangible symbol; or

(B) to attach to or logically associate with the record an electronic symbol, sound, or process.

(16) “State” means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States.

(17) “Student athlete” means an individual who is eligible to attend an educational institution and engages in, is eligible to engage in, or may be eligible in the future to engage in, any interscholastic or intercollegiate sport. The term does not include an individual permanently ineligible to participate in a particular interscholastic or intercollegiate sport for that sport.

(Act 2016-415, §1.)

§ 8-26B-3 Secretary of State; Authority; Procedure

(a) The Alabama Administrative Procedure Act applies to this chapter. The Secretary of State may adopt rules under the act to implement this chapter.

(b) By acting as an athlete agent in this state, a nonresident individual appoints the Secretary of State as the individual’s agent for service of process in any civil action in this state related to the individual acting as an athlete agent in this state.

(Act 2016-415, §1.)

§ 8-26B-4 Athlete Agent; Registration Required; Void Contract

(a) Except as otherwise provided in subsection (b), an individual may not act as an athlete agent in this state without holding a certificate of registration under this chapter.

(b) Before being issued a certificate of registration under this chapter, an individual may act as an athlete agent in this state for all purposes except signing an agency contract, if:

(1) a student athlete or another person acting on behalf of the athlete initiates communication with the individual; and

(2) not later than seven days after an initial act that requires the individual to register as an athlete agent, the individual submits an application for registration as an athlete agent in this state.

(c) An agency contract resulting from conduct in violation of this section is void, and the athlete agent shall return any consideration received under the contract.

(Act 2016-415, §1.)

§ 8-26B-5 Registration as Athlete Agent; Application; Requirements; Reciprocal Registration

(a) An applicant for registration as an athlete agent shall submit an application for registration to the Secretary of State in a form prescribed by the Secretary of State. The applicant must be an individual, and the application must be signed by the applicant under penalty of perjury. The application must contain at least the following:

(1) the name and date and place of birth of the applicant and the following contact information for the applicant:

(A) the address of the applicant’s principal place of business;

(B) work and mobile telephone numbers; and

(C) any means of communicating electronically, including a facsimile number, electronic-mail address, and personal and business or employer websites;

(2) the name of the applicant’s business or employer, if applicable, including for each business or employer, its mailing address, telephone number, organization form, and the nature of the business;

(3) each social-media account with which the applicant or the applicant’s business or employer is affiliated;

(4) each business or occupation in which the applicant engaged within five years before the date of the application, including self-employment and employment by others, and any professional or occupational license, registration, or certification held by the applicant during that time;

(5) a description of the applicant’s:

(A) formal training as an athlete agent;

(B) practical experience as an athlete agent; and

(C) educational background relating to the applicant’s activities as an athlete agent;

(6) the name of each student athlete for whom the applicant acted as an athlete agent within five years before the date of the application or, if the individual is a minor, the name of the parent or guardian of the minor, together with the athlete’s sport and last-known team;

(7) the name and address of each person that:

(A) is a partner, member, officer, manager, associate, or profit sharer or directly or indirectly holds an equity interest of five percent or greater of the athlete agent’s business if it is not a corporation; and

(B) is an officer or director of a corporation employing the athlete agent or a shareholder having an interest of five percent or greater in the corporation;

(8) a description of the status of any application by the applicant, or any person named under paragraph (7), for a state or federal business, professional, or occupational license, other than as an athlete agent, from a state or federal agency, including any denial, refusal to renew, suspension, withdrawal, or termination of the license and any reprimand or censure related to the license;

(9) whether the applicant, or any person named under paragraph (7), has pleaded guilty or no contest to, has been convicted of, or has charges pending for, a crime that would involve moral turpitude or be a felony if committed in this state and, if so, identification of:

(A) the crime;

(B) the law-enforcement agency involved; and

(C) if applicable, the date of the conviction and the fine or penalty imposed;

(10) whether, within 15 years before the date of application, the applicant, or any person named under paragraph (7), has been a defendant or respondent in a civil proceeding, including a proceeding seeking an adjudication of legal incompetence and, if so, the date and a full explanation of each proceeding;

(11) whether the applicant, or any person named under paragraph (7), has an unsatisfied judgment or a judgment of continuing effect, including alimony or a domestic order in the nature of child support, which is not current at the date of the application;

(12) whether, within 10 years before the date of application, the applicant, or any person named under paragraph (7), was adjudicated bankrupt or was an owner of a business that was adjudicated bankrupt;

(13) whether there has been any administrative or judicial determination that the applicant, or any person named under paragraph (7), made a false, misleading, deceptive, or fraudulent representation;

(14) each instance in which conduct of the applicant, or any person named under paragraph (7), resulted in the imposition of a sanction, suspension, or declaration of ineligibility to participate in an interscholastic, intercollegiate, or professional athletic event on a student athlete or a sanction on an educational institution;

(15) each sanction, suspension, or disciplinary action taken against the applicant, or any person named under paragraph (7), arising out of occupational or professional conduct;

(16) whether there has been a denial of an application for, suspension or revocation of, refusal to renew, or abandonment of, the registration of the applicant, or any person named under paragraph (7), as an athlete agent in any state;

(17) each state in which the applicant currently is registered as an athlete agent or has applied to be registered as an athlete agent;

(18) if the applicant is certified or registered by a professional league or players association:

(A) the name of the league or association;

(B) the date of certification or registration, and the date of expiration of the certification or registration, if any; and

(C) if applicable, the date of any denial of an application for, suspension or revocation of, refusal to renew, withdrawal of, or termination of, the certification or registration or any reprimand or censure related to the certification or registration; and

(19) any additional information required by the Secretary of State.

(b) Instead of proceeding under subsection (a), an individual registered as an athlete agent in another state may apply for registration as an athlete agent in this state by submitting to the Secretary of State:

(1) a copy of the application for registration in the other state;

(2) a statement that identifies any material change in the information on the application or verifies there is no material change in the information, signed under penalty of perjury; and

(3) a copy of the certificate of registration from the other state.

(c) The Secretary of State shall issue a certificate of registration to an individual who applies for registration under subsection (b) if the Secretary of State determines:

(1) the application and registration requirements of the other state are substantially similar to or more restrictive than this chapter; and

(2) the registration has not been revoked or suspended and no action involving the individual’s conduct as an athlete agent is pending against the individual or the individual’s registration in any state.

(d) For purposes of implementing subsection (c), the Secretary of State shall:

(1) cooperate with national organizations concerned with athlete agent issues and agencies in other states which register athlete agents to develop a common registration form and determine which states have laws that are substantially similar to or more restrictive than this chapter; and

(2) exchange information, including information related to actions taken against registered athlete agents or their registrations, with those organizations and agencies.

(Act 2016-415, §1.)

§ 8-26B-6 Certificate of Registration; Issuance or Denial; Renewal

(a) Except as otherwise provided in subsection (b), the Secretary of State shall issue a certificate of registration to an applicant for registration who complies with Section 8-26B-5(a).

(b) The Secretary of State may refuse to issue a certificate of registration to an applicant for registration under Section 8-26B-5(a) if the Secretary of State determines that the applicant has engaged in conduct that significantly adversely reflects on the applicant’s fitness to act as an athlete agent. In making the determination, the Secretary of State may consider whether the applicant has:

(1) pleaded guilty or no contest to, has been convicted of, or has charges pending for, a crime that would involve moral turpitude or be a felony if committed in this state;

(2) made a materially false, misleading, deceptive, or fraudulent representation in the application or as an athlete agent;

(3) engaged in conduct that would disqualify the applicant from serving in a fiduciary capacity;

(4) engaged in conduct prohibited by Section 8-26B-14;

(5) had a registration as an athlete agent suspended, revoked, or denied in any state;

(6) been refused renewal of registration as an athlete agent in any state;

(7) engaged in conduct resulting in imposition of a sanction, suspension, or declaration of ineligibility to participate in an interscholastic, intercollegiate, or professional athletic event on a student athlete or a sanction on an educational institution; or

(8) engaged in conduct that adversely reflects on the applicant’s credibility, honesty, or integrity.

(c) In making a determination under subsection (b), the Secretary of State shall consider:

(1) how recently the conduct occurred;

(2) the nature of the conduct and the context in which it occurred; and

(3) other relevant conduct of the applicant.

(d) An athlete agent registered under subsection (a) may apply to renew the registration by submitting an application for renewal in a form prescribed by the Secretary of State. The applicant shall sign the application for renewal under penalty of perjury and include current information on all matters required in an original application for registration.

(e) An athlete agent registered under Section 8-26B-5(c) may renew the registration by proceeding under subsection (d) or, if the registration in the other state has been renewed, by submitting to the Secretary of State copies of the application for renewal in the other state and the renewed registration from the other state. The Secretary of State shall renew the registration if the Secretary of State determines:

(1) the registration requirements of the other state are substantially similar to or more restrictive than this chapter; and

(2) the renewed registration has not been suspended or revoked and no action involving the individual’s conduct as an athlete agent is pending against the individual or the individual’s registration in any state.

(f) A certificate of registration or renewal of registration under this chapter is valid for two years.

(Act 2016-415, §1.)

§ 8-26B-7 Suspension, Revocation, or Refusal to Renew Registration

(a) The Secretary of State may limit, suspend, revoke, or refuse to renew a registration of an individual registered under Section 8-26B-6(a) for conduct that would have justified refusal to issue a certificate of registration under Section 8-26B-6(b).

(b) The Secretary of State may suspend or revoke the registration of an individual registered under Section 8-26B-5(c) or renewed under Section 8-26B-6(e) for any reason for which the Secretary of State could have refused to grant or renew registration or for conduct that would justify refusal to issue a certificate of registration under Section 8-26B-6(b).

(Act 2016-415, §1.)

§ 8-26B-8 Temporary Registration

The Secretary of State may issue a temporary certificate of registration as an athlete agent while an application for registration or renewal of registration is pending.

(Act 2016-415, §1.)

§ 8-26B-9 Registration and Renewal Fees

An application for registration or renewal of registration as an athlete agent must be accompanied by a fee in the following amount:

(1) Two hundred dollars ($200) for an initial application for registration;

(2) One hundred dollars ($100) for registration based on a certificate of registration issued by another state;

(3) One hundred dollars ($100) for an application for renewal of registration; or

(4) One hundred dollars ($100) for renewal of registration based on a renewal of registration in another state.

(Act 2016-415, §1.)

§ 8-26B-10 Required Form of Agency Contract

(a) An agency contract must be in a record signed by the parties.

(b) An agency contract must contain:

(1) a statement that the athlete agent is registered as an athlete agent in this state and a list of any other states in which the agent is registered as an athlete agent;

(2) the amount and method of calculating the consideration to be paid by the student athlete for services to be provided by the agent under the contract and any other consideration the agent has received or will receive from any other source for entering into the contract or providing the services;

(3) the name of any person not listed in the agent’s application for registration or renewal of registration which will be compensated because the athlete signed the contract;

(4) a description of any expenses the athlete agrees to reimburse;

(5) a description of the services to be provided to the athlete;

(6) the duration of the contract; and

(7) the date of execution.

(c) Subject to subsection (g), an agency contract must contain a conspicuous notice in boldface type and in substantially the following form:

WARNING TO STUDENT ATHLETE

IF YOU SIGN THIS CONTRACT:

(1) YOU MAY LOSE YOUR ELIGIBILITY TO COMPETE AS A STUDENT ATHLETE IN YOUR SPORT;

(2) IF YOU HAVE AN ATHLETIC DIRECTOR, WITHIN 72 HOURS AFTER SIGNING THIS CONTRACT OR BEFORE THE NEXT SCHEDULED ATHLETIC EVENT IN WHICH YOU PARTICIPATE, WHICHEVER OCCURS FIRST, BOTH YOU AND YOUR ATHLETE AGENT MUST NOTIFY YOUR ATHLETIC DIRECTOR THAT YOU HAVE ENTERED INTO THIS CONTRACT AND PROVIDE THE NAME AND CONTACT INFORMATION OF THE ATHLETE AGENT; AND

(3) YOU MAY CANCEL THIS CONTRACT WITHIN 14 DAYS AFTER SIGNING IT. CANCELLATION OF THIS CONTRACT MAY NOT REINSTATE YOUR ELIGIBILITY AS A STUDENT ATHLETE IN YOUR SPORT.

(d) An agency contract must be accompanied by a separate record signed by the student athlete or, if the athlete is a minor, the parent or guardian of the athlete acknowledging that signing the contract may result in the loss of the athlete’s eligibility to participate in the athlete’s sport.

(e) A student athlete or, if the athlete is a minor, the parent or guardian of the athlete may void an agency contract that does not conform to this section. If the contract is voided, any consideration received from the athlete agent under the contract to induce entering into the contract is not required to be returned.

(f) At the time an agency contract is executed, the athlete agent shall give the student athlete or, if the athlete is a minor, the parent or guardian of the athlete a copy in a record of the contract and the separate acknowledgement required by subsection (d).

(g) If a student athlete is a minor, an agency contract must be signed by the parent or guardian of the minor and the notice required by subsection (c) must be revised accordingly.

(Act 2016-415, §1.)

§ 8-26B-11 Notice to Educational Institution

(a) In this section, “communicating or attempting to communicate” means contacting or attempting to contact by an in-person meeting, a record, or any other method that conveys or attempts to convey a message.

(b) Not later than 72 hours after entering into an agency contract or before the next scheduled athletic event in which the student athlete may participate, whichever occurs first, the athlete agent shall give notice in a record of the existence of the contract to the athletic director of the educational institution at which the athlete is enrolled or at which the agent has reasonable grounds to believe the athlete intends to enroll.

(c) Not later than 72 hours after entering into an agency contract or before the next scheduled athletic event in which the student athlete may participate, whichever occurs first, the athlete shall inform the athletic director of the educational institution at which the athlete is enrolled that the athlete has entered into an agency contract and the name and contact information of the athlete agent.

(d) If an athlete agent enters into an agency contract with a student athlete and the athlete subsequently enrolls at an educational institution, the agent shall notify the athletic director of the institution of the existence of the contract not later than 72 hours after the agent knew or should have known the athlete enrolled.

(e) If an athlete agent has a relationship with a student athlete before the athlete enrolls in an educational institution and receives an athletic scholarship from the institution, the agent shall notify the institution of the relationship not later than 10 days after the enrollment if the agent knows or should have known of the enrollment and:

(1) the relationship was motivated in whole or part by the intention of the agent to recruit or solicit the athlete to enter an agency contract in the future; or

(2) the agent directly or indirectly recruited or solicited the athlete to enter an agency contract before the enrollment.

(f) An athlete agent shall give notice in a record to the athletic director of any educational institution at which a student athlete is enrolled before the agent communicates or attempts to communicate with:

(1) the athlete or, if the athlete is a minor, a parent or guardian of the athlete, to influence the athlete or parent or guardian to enter into an agency contract; or

(2) another individual to have that individual influence the athlete or, if the athlete is a minor, the parent or guardian of the athlete to enter into an agency contract.

(g) If a communication or attempt to communicate with an athlete agent is initiated by a student athlete or another individual on behalf of the athlete, the agent shall notify in a record the athletic director of any educational institution at which the athlete is enrolled. The notification must be made not later than 10 days after the communication or attempt.

(h) An educational institution that becomes aware of a violation of this chapter by an athlete agent shall notify the Secretary of State and any professional league or players association with which the institution is aware the agent is licensed or registered of the violation.

(Act 2016-415, §1.)

§ 8-26B-12 Student Athlete’s Right to Cancel

(a) A student athlete or, if the athlete is a minor, the parent or guardian of the athlete may cancel an agency contract by giving notice in a record of cancellation to the athlete agent not later than 14 days after the contract is signed.

(b) A student athlete or, if the athlete is a minor, the parent or guardian of the athlete may not waive the right to cancel an agency contract.

(c) If a student athlete, parent, or guardian cancels an agency contract, the athlete, parent, or guardian is not required to pay any consideration under the contract or return any consideration received from the athlete agent to influence the athlete to enter into the contract.

(Act 2016-415, §1.)

§ 8-26B-13 Required Records

(a) An athlete agent shall create and retain for five years records of the following:

(1) the name and address of each individual represented by the agent;

(2) each agency contract entered into by the agent; and

(3) the direct costs incurred by the agent in the recruitment or solicitation of each student athlete to enter into an agency contract.

(b) Records described in subsection (a) are open to inspection by the Secretary of State during normal business hours.

(Act 2016-415, §1.)

§ 8-26B-14 Prohibited Conduct; Payment of Expenses Under Certain Circumstances

(a) Except as otherwise provided in subsection (c), an athlete agent, with the intent to influence a student athlete or, if the athlete is a minor, a parent or guardian of the athlete, to enter into an agency contract, may not take any of the following actions or encourage any other individual to take or assist any other individual in taking any of the following actions on behalf of the agent:

(1) give materially false or misleading information or make a materially false promise or representation;

(2) furnish anything of value to the athlete before the athlete enters into the contract; or

(3) furnish anything of value to an individual other than the athlete or another registered athlete agent.

(b) An athlete agent may not intentionally do any of the following or encourage any other individual to do any of the following on behalf of the agent:

(1) initiate contact, directly or indirectly, with a student athlete or, if the athlete is a minor, a parent or guardian of the athlete, to recruit or solicit the athlete, parent, or guardian to enter an agency contract unless registered under this chapter;

(2) fail to create or retain or to permit inspection of the records required by Section 8-26B-13;

(3) fail to register when required by Section 8-26B-4;

(4) provide materially false or misleading information in an application for registration or renewal of registration;

(5) predate or postdate an agency contract; or

(6) fail to notify a student athlete or, if the athlete is a minor, a parent or guardian of the athlete, before the athlete, parent, or guardian signs an agency contract for a particular sport that the signing may make the athlete ineligible to participate as a student athlete in that sport.

(c) An athlete agent registered under this chapter who is certified as an athlete agent in a particular sport by a national association that promotes or regulates intercollegiate athletics and establishes eligibility standards for participation by a student athlete in the sport may pay expenses incurred before the signing of an agency contract by a student athlete, a family member of the student athlete, and an individual who is a member of a class of individuals authorized to receive payment for the expenses by the national association that certified the agent, if the expenses are:

(1) for the benefit of an athlete who is a member of a class of athletes authorized to receive the benefit by the national association;

(2) of a type authorized to be paid by a certified agent by the national association;

(3) for a purpose authorized by the national association; and

(4) with respect to an athlete who is a secondary school student, allowed by the interscholastic association that determines eligibility for the athlete.

(Act 2016-415, p. 1160, §1; Act 2019-504, §1.)

§ 8-26B-15 Criminal Penalties

(a) The commission of any conduct prohibited in subsection (a) of Section 8-26B-14 by an individual required by this chapter to register as an athlete agent who has intentionally not registered under this chapter is a Class B felony.

(b) Except for subdivision (1) of subsection (b) of Section 8-26B-14, the commission of any conduct prohibited in Section 8-26B-14 by an athlete agent who has registered under this chapter is a Class C felony.

(c) The commission of any conduct prohibited in subdivision (1) of subsection (b) of Section 8-26B-14 by an athlete agent who has registered under this chapter is a Class A misdemeanor.

(Act 2016-415, §1.)

§ 8-26B-16 Civil Remedy

(a) An educational institution or student athlete may bring an action for damages against an athlete agent if the institution or athlete is adversely affected by an act or omission of the agent in violation of this chapter. An educational institution or student athlete is adversely affected by an act or omission of the agent only if, because of the act or omission, the institution or an individual who was a student athlete at the time of the act or omission and enrolled in the institution:

(1) is suspended or disqualified from participation in an interscholastic or intercollegiate sports event by or under the rules of a state or national federation or association that promotes or regulates interscholastic or intercollegiate sports; or

(2) suffers financial damage.

(b) A plaintiff that prevails in an action under this section may recover actual damages, costs, and reasonable attorney’s fees. An athlete agent found liable under this section forfeits any right of payment for anything of benefit or value provided to the student athlete and shall refund any consideration paid to the agent by or on behalf of the athlete.

(Act 2016-415, §1.)

§ 8-26B-17 Civil Penalty

The Secretary of State may assess a civil penalty against an athlete agent not to exceed fifty thousand dollars ($50,000) for a violation of this chapter.

(Act 2016-415, §1.)

§ 8-26B-18 Uniformity of Application and Construction

In applying and construing this uniform act, consideration must be given to the need to promote uniformity of the law with respect to its subject matter among states that enact it.

(Act 2016-415, §1.)

§ 8-26B-19 Relation to Electronic Signatures in Global and National Commerce Act

This chapter modifies, limits, or supersedes the Electronic Signatures in Global and National Commerce Act, 15 U.S.C. Section 7001 et seq., but does not modify, limit, or supersede Section 101(c) of that act, 15 U.S.C. Section 7001(c), or authorize electronic delivery of any of the notices described in Section 103 (b) of that act, 15 U.S.C. Section 7003(b).

(Act 2016-415, §1.)

Article 2 Commission and Disposition of Funds

§ 8-26B-30 Alabama Athlete Agents Commission

(a) The Alabama Athlete Agents Commission is continued in existence. The commission shall consist of the Secretary of State or an individual designated by the Secretary of State and 18 members to be appointed as follows:

(1) One member appointed by the Governor.

(2) One member appointed by the Lieutenant Governor.

(3) One member appointed by the Speaker of the House of Representatives.

(4) The athletic director or an individual appointed by the athletic director at each of the following institutions of higher education:

a. Auburn University.

b. University of Alabama, Tuscaloosa.

c. University of South Alabama.

d. Alabama State University.

e. Alabama A & M University.

f. Tuskegee University.

g. Troy University.

h. Jacksonville State University.

i. University of North Alabama.

j. University of West Alabama.

k. Miles College.

l. University of Montevallo.

m. University of Alabama, Huntsville.

n. University of Alabama, Birmingham.

(5) One member appointed by the Alabama High School Athletic Association.

(b) In appointing members to the board, the appointing power shall select those individuals whose appointments, to the extent possible, assure that the membership of the board is inclusive and reflects the racial, gender, urban, rural, and economic diversity of the state. All appointed members of the commission shall be citizens of the United States and residents of Alabama. The term of each appointed commission member shall be three years and members are eligible for reappointment. If a vacancy occurs, the appointing power for the vacant position shall appoint a successor who shall take office immediately and serve the remainder of the unexpired term. Members of the Alabama Athlete Agents Commission serving on October 1, 2016, shall continue to serve on the Alabama Athlete Agents Commission until their term expires.

(c) Within 15 days after their appointment, the members of the commission shall take an oath before any individual lawfully authorized to administer oaths in this state to faithfully and impartially perform their duties as members of the commission, and the same shall be filed with the Secretary of State.

(d) The Governor may remove from the commission any appointed member for neglect of duty or other just cause.

(e) The commission shall elect annually a chair, a vice chair, and a secretary-treasurer from its members.

(f) A majority of the commission shall constitute a quorum for the transaction of business.

(g) The Secretary of State shall keep records of the proceedings of the commission. In any proceeding in court, civil or criminal, arising out of or founded upon any provision of this chapter, copies of those records certified as correct by the Secretary of State shall be admissible in evidence as tending to prove the content of the records.

(h) The Secretary of State shall have printed and published for distribution an annual register which shall contain the names, arranged alphabetically, of all persons registered under this chapter. The Secretary of State shall also provide a quarterly report to the commission of all agents registered during the quarter, any suspension or revocation of registered agents during the quarter, and other disciplinary action taken against an agent.

(i) The Secretary of State may employ personnel and arrange for assistance, service, and supplies as the Secretary of State may require for the performance of the duties of the commission.

(j) The commission may adopt and, from time to time, amend rules and standards of conduct for athlete agents appropriate for the protection of the residents of the state. At least 35 days prior to the completion of notice of any rule or amendment, the Secretary of State shall mail copies of the proposed rule or amendment to all persons registered under this chapter, with a notice advising them of the completion of notice of the rule or amendment and requesting that they submit advisory comments thereon at least 15 days prior to the completion of notice. Failure to receive by mail a rule, amendment, or notice by all persons registered under this chapter shall not affect the validity of the rule or amendment.

(k) Except for the Secretary of State, each member of the commission who is not otherwise reimbursed by public funds for services provided to this commission shall be paid fifty dollars ($50) for each day the member is actively engaged in the discharge of official duties as a member of the commission and shall also be entitled to, and shall receive, reimbursement for actual necessary expenses incurred in the discharge of official duties on behalf of the commission.

(l) The Alabama Athlete Agents Commission shall be subject to the Alabama Sunset Law, Chapter 20, Title 41, as an enumerated agency as provided in Section 41-20-3, and shall have a termination date of October 1, 2019, and every four years thereafter, unless continued pursuant to the Alabama Sunset Law.

(Act 2016-415, p. 1160, §1; Act 2025-288, §1.)

§ 8-26B-31 Disposition of Funds; Alabama Athlete Agents Fund

(a) All moneys collected for registrations and all fines collected for violations of this chapter shall be paid to the Secretary of State, who shall deposit them in a special fund in the State Treasury for the use of the commission.

(b) There is hereby created in the State Treasury a fund to be known and designated as the Alabama Athlete Agents Fund. All funds, fees, charges, costs, and collections accruing to or collected under the provisions of this chapter shall be deposited into the State Treasury to the credit of the Alabama Athlete Agents Fund.

(c) Funds now or hereafter deposited in the State Treasury to the credit of the Alabama Athlete Agents Fund may not be expended for any purpose whatsoever unless the same shall have been allotted and budgeted in accordance with Article 4 of Chapter 4 of Title 41, and only in the amounts and for the purposes provided by the Legislature in the general appropriation bill or other appropriation bills.

(Act 2016-415, §1.)

§ 8-26B-32 Oversight and Enforcement of Article 3 and Rules Adopted Thereunder

THIS SECTION WAS REPEALED IN THE 2022 REGULAR SESSION BY ACT 2022-2 EFFECTIVE FEBRUARY 3, 2022. THIS IS NOT IN THE CURRENT CODE SUPPLEMENT.

(Act 2021-227, §13.)

Article 3 Compensation of Student Athletes

§ 8-26B-50 Definitions

THIS SECTION WAS REPEALED IN THE 2022 REGULAR SESSION BY ACT 2022-2 EFFECTIVE FEBRUARY 3, 2022. THIS IS NOT IN THE CURRENT CODE SUPPLEMENT.

(Act 2021-227, §1.)

§ 8-26B-51 Compensation for Use of Student Athlete’s Name, Image, or Likeness

THIS SECTION WAS REPEALED IN THE 2022 REGULAR SESSION BY ACT 2022-2 EFFECTIVE FEBRUARY 3, 2022. THIS IS NOT IN THE CURRENT CODE SUPPLEMENT.

(Act 2021-227, §2.)

§ 8-26B-52 Professional Representation of Student Athlete

THIS SECTION WAS REPEALED IN THE 2022 REGULAR SESSION BY ACT 2022-2 EFFECTIVE FEBRUARY 3, 2022. THIS IS NOT IN THE CURRENT CODE SUPPLEMENT.

(Act 2021-227, §3.)

§ 8-26B-53 Revocation or Reduction of Scholarships

THIS SECTION WAS REPEALED IN THE 2022 REGULAR SESSION BY ACT 2022-2 EFFECTIVE FEBRUARY 3, 2022. THIS IS NOT IN THE CURRENT CODE SUPPLEMENT.

(Act 2021-227, §4.)

§ 8-26B-54 Financial Literacy and Life Skills Programming for Student Athletes

THIS SECTION WAS REPEALED IN THE 2022 REGULAR SESSION BY ACT 2022-2 EFFECTIVE FEBRUARY 3, 2022. THIS IS NOT IN THE CURRENT CODE SUPPLEMENT.

(Act 2021-227, §5.)

§ 8-26B-55 Alabama Collegiate Athletics Commission

THIS SECTION WAS REPEALED IN THE 2022 REGULAR SESSION BY ACT 2022-2 EFFECTIVE FEBRUARY 3, 2022. THIS IS NOT IN THE CURRENT CODE SUPPLEMENT.

(Act 2021-227, §6.)

§ 8-26B-56 Permission Required for Use of Name, Image, or Likeness in Conjunction with Registered or Licensed Marks, Logos, Etc

THIS SECTION WAS REPEALED IN THE 2022 REGULAR SESSION BY ACT 2022-2 EFFECTIVE FEBRUARY 3, 2022. THIS IS NOT IN THE CURRENT CODE SUPPLEMENT.

(Act 2021-227, §7.)

§ 8-26B-57 Inducements Prohibited to Attend, Enroll, Etc., in Specific Postsecondary Educational Institution

THIS SECTION WAS REPEALED IN THE 2022 REGULAR SESSION BY ACT 2022-2 EFFECTIVE FEBRUARY 3, 2022. THIS IS NOT IN THE CURRENT CODE SUPPLEMENT.

(Act 2021-227, §8.)

§ 8-26B-58 No Cause of Action for Prior Acts

THIS SECTION WAS REPEALED IN THE 2022 REGULAR SESSION BY ACT 2022-2 EFFECTIVE FEBRUARY 3, 2022. THIS IS NOT IN THE CURRENT CODE SUPPLEMENT.

(Act 2021-227, §9.)

§ 8-26B-59 Employment Status of Student Athlete with a Postsecondary Education Institution

THIS SECTION WAS REPEALED IN THE 2022 REGULAR SESSION BY ACT 2022-2 EFFECTIVE FEBRUARY 3, 2022. THIS IS NOT IN THE CURRENT CODE SUPPLEMENT.

(Act 2021-227, §10.)

§ 8-26B-60 Applicability to Constitutionally Created Boards of Trustees of Postsecondary Educational Institutions

THIS SECTION WAS REPEALED IN THE 2022 REGULAR SESSION BY ACT 2022-2 EFFECTIVE FEBRUARY 3, 2022. THIS IS NOT IN THE CURRENT CODE SUPPLEMENT.

(Act 2021-227, §11.)

§ 8-26B-61 Violations

THIS SECTION WAS REPEALED IN THE 2022 REGULAR SESSION BY ACT 2022-2 EFFECTIVE FEBRUARY 3, 2022. THIS IS NOT IN THE CURRENT CODE SUPPLEMENT.

(Act 2021-227, §12.)

Chapter 27 Alabama Trade Secrets Act

§ 8-27-1 Short Title

This chapter may be cited as the “Alabama Trade Secrets Act.”

(Acts 1987, No. 87-669, p. 1195, §6.)

§ 8-27-2 Definitions

As used in this chapter, the following terms shall have the following meanings, respectively, unless the context clearly indicates otherwise:

(1) TRADE SECRET. A “trade secret” is information that:

a. Is used or intended for use in a trade or business;

b. Is included or embodied in a formula, pattern, compilation, computer software, drawing, device, method, technique, or process;

c. Is not publicly known and is not generally known in the trade or business of the person asserting that it is a trade secret;

d. Cannot be readily ascertained or derived from publicly available information;

e. Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy; and

f. Has significant economic value.

(2) IMPROPER MEANS. “Improper means” are means such as:

a. Theft;

b. Bribery;

c. Misrepresentation;

d. Inducement of a breach of confidence;

e. Trespass; or

f. Other deliberate acts taken for the specific purpose of gaining access to the information of another by means such as electronic, photographic, telescopic or other aids to enhance normal human perception, where the trade secret owner reasonably should be able to expect privacy.

(3) PERSON. A “person” is a natural person, corporation, business trust, estate, trust, partnership, association, joint venture, government, governmental subdivision or agency, or any other legal or commercial entity.

(Acts 1987, No. 87-669, p. 1195, §1.)

§ 8-27-3 Misappropriation

A person who discloses or uses the trade secret of another, without a privilege to do so, is liable to the other for misappropriation of the trade secret if:

(1) That person discovered the trade secret by improper means;

(2) That person’s disclosure or use constitutes a breach of confidence reposed in that person by the other;

(3) That person learned the trade secret from a third person, and knew or should have known that (i) the information was a trade secret and (ii) that the trade secret had been appropriated under circumstances which violate the provisions of (1) or (2), above; or

(4) That person learned the information and knew or should have known that it was a trade secret and that its disclosure was made to that person by mistake.

(Acts 1987, No. 87-669, p. 1195, §2.)

§ 8-27-4 Remedies for Actual or Threatened Misappropriation; Intentional Remuneration of a Third Party for Misappropriation

(a) The remedies available for actual or threatened misappropriation of a trade secret are:

(1) To the extent that they are not duplicative:

a. Such injunctive and other equitable relief as may be appropriate with respect to any actual or threatened misappropriation of a trade secret,

b. Recovery of any profits and other benefits conferred by the misappropriation that are attributable to the misappropriation (In establishing the misappropriator’s profits, the complainant is required to present proof only of the misappropriator’s gross revenue, and the misappropriator is required to present proof of his or her deductible expenses and the elements of profit attributable to factors other than the trade secret.), and

c. The actual damages suffered as a result of the misappropriation;

(2) Reasonable attorney’s fees to the prevailing party if:

a. A claim of actual or threatened misappropriation is made or resisted in bad faith,

b. A motion to terminate an injunction is made or resisted in bad faith, or

c. Willful and malicious misappropriation exists; and

(3) Exemplary damages in an amount not to exceed the actual award made under subdivision (1), but not less than ten thousand dollars ($10,000), if willful and malicious misappropriation exists.

(b) In addition to the civil damages and penalties provided in subsection (a), a person who intentionally remunerates or recruits a third person for actual or threatened misappropriation of a trade secret and any person who misappropriates a trade secret shall be guilty of a Class C felony. In any criminal prosecution under this subsection against an employer based on misappropriation of a trade secret by its employee, the term intentionally shall mean that the employer remunerated an employee with the intent that the employee would misappropriate the trade secrets of another. The trade secret that was misappropriated shall be clearly identified. Mere acceptance or receipt by an employer of a trade secret of another, by itself, shall be insufficient to prove criminal liability. Each act committed under this subsection shall constitute a separate offense.

(Acts 1987, No. 87-669, p. 1195, §3; Act 2010-499, p. 781, §1.)

§ 8-27-5 Statute of Limitation

An action for misappropriation must be brought within two years after the misappropriation is discovered or by the exercise of reasonable diligence should have been discovered.

(Acts 1987, No. 87-669, p. 1195, §4.)

§ 8-27-6 Effect on Other Law

Those provisions of this chapter that are inconsistent with the common law of trade secrets supersede the common law; otherwise, this chapter should be construed to be consistent with the common law of trade secrets.

(Acts 1987, No. 87-669, p. 1195, §5.)

Chapter 28 Disposal of Molds, Dies or Patterns

§ 8-28-1 Definitions

As used in this chapter, the following words shall have the following meanings respectively ascribed to them, unless the context clearly indicates otherwise:

(1) CUSTOMER. Any person who causes a molder to make a form or to use a form to make a product.

(2) FORM. An object in or around which material is placed to make a mold for pouring plastic or casting metal, and includes a mold, die or pattern.

(3) MOLDER. Any person who makes a form or who uses a form to make a product.

(Acts 1989, No. 89-537, p. 1125, §1.)

§ 8-28-2 When Molder May Dispose of Form Owned by Customer

Unless a customer and a molder otherwise agree in writing, a molder may, as provided in Section 8-28-3, dispose of a form owned by a customer if the customer does not take from the molder physical custody of the form within three years after the molder’s last prior use of the form.

(Acts 1989, No. 89-537, p. 1125, §2.)

§ 8-28-3 Procedure for Disposal; Notice

A molder who wishes to dispose of a form shall send written notice by registered mail with return receipt requested to the customer’s last-known address and to any address set forth in the agreement under which the molder obtained physical custody of the form. The notice shall state that the molder intends to dispose of the form. The molder may dispose of the form without liability to the customer if, within 120 days after the molder receives the return receipt of the notice or within 120 days after the molder sends notice if no return receipt is received within that period, the customer does not take physical custody of the form or enter into an agreement with the molder for taking possession or physical custody of the form.

(Acts 1989, No. 89-537, p. 1125, §3.)

§ 8-28-4 Applicability

This chapter applies to any form, whether it was last used before, on or after May 4, 1989.

(Acts 1989, No. 89-537, p. 1125, §4.)

Chapter 29 Timely Payments to Contractors and Subcontractors

§ 8-29-1 Definitions

For the purpose of this chapter, the following words have the following meanings:

(1) CONTRACTOR. Any person, individual, firm, corporation, partnership, or other legal entity who contracts with an owner to improve real property or perform construction services for an owner.

(2) IMPROVE. To build, effect, alter, repair, or demolish any improvements upon, connected with, or on, or beneath the surface of any real property; to excavate, clear, grade, fill, landscape any real property; to construct driveways and roadways; to furnish materials, including trees and shrubbery, for any of these purposes; or to perform any labor upon these improvements.

(3) IMPROVEMENT. All or any part of any building, structure, erection, alteration, demolition, excavation, clearing, grading, filling, or landscaping, including trees and shrubbery, driveways, and roadways on real property.

(4) OWNER. Any person, individual, firm, corporation, partnership, or other legal entity who has an interest in the real property improved and for whom an improvement is made, who either directly or by agent ordered the improvement to be made.

(5) REAL PROPERTY. The real estate that is improved, including lands, leaseholds, tenements, and improvements placed on the real property.

(6) SUBCONTRACTOR. Any person, individual, firm, corporation, partnership, or other legal entity who has contracted to furnish labor or materials to, or has performed labor or supplied materials for a contractor in connection with a contract to improve real property.

(7) SUB-SUBCONTRACTOR. Any person, individual, firm, corporation, partnership, or other legal entity who has contracted to furnish labor or materials to, or has performed labor or supplied materials for a subcontractor in connection with a contract to improve real property.

(Acts 1995, No. 95-380, p. 775, §1.)

§ 8-29-2 Performance in Accordance with Contract Entitles Contractor or Subcontractor to Payment

Performance by a contractor, subcontractor, or sub-subcontractor in accordance with the provisions of his or her contract entitles them to payment from the party with whom they contract. All contracts between parties require a date of payment.

(Acts 1995, No. 95-380, p. 775, §2.)

§ 8-29-3 Timely Payments to Contractors and Subcontractors; Noncompliance with Chapter; Percentage of Retainage on Payments

(a) When a contractor has performed pursuant to his or her contract and submits an application or pay request for payment or an invoice for materials, to the owner or owner’s representative, the owner shall timely pay the contractor by mailing via first class mail or delivering the amount of the pay request or invoice in accordance with the payment terms agreed to by the owner and the contractor, the agreed upon payment terms must be specified in all contract documents, but if payment terms are not agreed to, then within 30 days after receipt of the pay request or invoice.

(b) When a subcontractor has performed pursuant to his or her contract and submits an application or pay request for payment or an invoice for materials to a contractor in sufficient time to allow the contractor to include the application, request, or invoice in his or her own pay request submitted to an owner, the contractor shall timely pay to the subcontractor in accordance with the payment terms agreed to by the contractor and subcontractor, but if payment terms are not agreed to, then within seven days of receipt of payment from owner by mailing via first class mail or delivering the amount received for the subcontractor’s work and materials based on work properly completed or service properly provided under the contract.

(c) When a sub-subcontractor has performed labor or supplied materials for a subcontractor pursuant to his or her contract and submits an application or pay request for payment or an invoice for materials to a subcontractor in sufficient time to allow the subcontractor to include the application, request, or invoice in his or her own pay request submitted to a contractor, the subcontractor shall timely pay the sub-subcontractor in accordance with the payment terms agreed to by the subcontractor and sub-subcontractor but if payment terms are not agreed to, then within seven days of receipt of payment from contractor by mailing via first class mail or delivering the amount received for the sub-subcontractor’s work and materials based on work properly completed or service properly provided under the contract.

(d) If the owner, contractor, or subcontractor does not make payment in compliance with this chapter, the owner, contractor, or subcontractor shall be obligated to pay his or her contractor, subcontractor, or sub-subcontractor interest at the rate of one percent per month (12% per annum) on the unpaid balance due.

(e) A contractor who receives a payment under subsection (a) or otherwise, from an owner in connection with a contract shall pay each of its subcontractors the portion of the owner’s payment to the extent of that subcontractor’s interest in the owner’s payment. The payment shall include interest, if any, that is attributable to work properly performed or materials suitably stored by that subcontractor if payment for stored materials is provided for in the contract. The payment required by this subsection shall be made not later than the seventh day after the date the contractor receives the owner’s payment.

(f) The percentage of retainage on payments by the contractor to the subcontractor shall not exceed the percentage of retainage on payments made by the owner to the contractor. Any percentage of retainage on payments made by contractor to the subcontractor that exceeds the percentage of retainage on payments made by the owner to the contractor shall be subject to interest to be paid by the contractor to the subcontractor at the rate of one percent per month (12% per annum).

(g) The percentage of retainage on payments by the subcontractor to the sub-subcontractor shall not exceed the percentage of retainage on payments made by the contractor to the subcontractor. Retainage on payments made by the subcontractor to the sub-subcontractor that exceeds the percentage of retainage on payments made by the contractor to the subcontractor shall be subject to interest paid at the rate of one percent per month (12% per annum).

(h) For the purposes of this chapter, retainage means that money, or other security as agreed to by the parties to a construction contract, earned by the contractor, subcontractor or lower tier sub-subcontractor, or supplier for work properly performed or materials suitably stored if payment for stored materials is provided for in the contract, which has been retained by the owner conditioned on final completion and acceptance of all work in connection with a project or projects by the contractor, subcontractor or lower tier sub-subcontractor, or supplier.

(i) A construction contract on any project in this state may provide for the owner’s withholding of retainage from payments to its contractor for work performed by that contractor on a construction project. There shall be retained not more than 10 percent of the estimated amount of work properly done and the value of materials stored on the site or suitably stored and insured off-site, and after 50 percent completion has been accomplished, no further retainage shall be withheld. If an owner withholds an amount greater than that allowed by this subsection, the owner shall be liable to the contractor for interest accruing on the excess amount withheld at the rate of one percent per month. Nothing herein is intended to limit or alter the paying party’s right to withhold or not approve payment on grounds set forth in the parties’ contract or the grounds set forth in Section 8-29-4 or otherwise for work not properly performed or payment not earned; rather, this section is intended only to establish a maximum amount of retainage, establish the timing for release of retainage, and provide for the payment of interest for improperly held retainage.

(j) A construction contract on any project in this state may provide for the contractor’s withholding of retainage from payments to its subcontractors for work performed by the subcontractors on a construction project. There shall be retained not more than 10 percent of the estimated amount of work properly done and the value of materials stored on the site or suitably stored and insured off-site, and after 50 percent completion has been accomplished, no further retainage shall be withheld. If a contractor withholds an amount greater than that allowed by this subsection, the contractor shall be liable to the subcontractor for interest accruing on the excess amount withheld at the rate of one percent per month.

(k) A construction contract on any project in this state may provide for the subcontractor’s withholding of retainage from payments to its sub-subcontractors or material suppliers for work performed by such sub-subcontractors or material suppliers on a construction project. There shall be retained not more than 10 percent of the estimated amount of work properly done and the value of materials stored on the site or suitably stored and insured off-site, and after 50 percent completion has been accomplished, no further retainage shall be withheld. If a subcontractor withholds an amount greater than that allowed by this subsection, the subcontractor shall be liable to the sub-subcontractor or material supplier for interest accruing on the excess amount withheld at the rate of one percent per month.

(l)(1) The owner shall release and pay retainage to the contractor for work completed on any construction contract no later than 60 days after the completion of the contractor’s work defined in its contract with the owner, or no later than 60 days after substantial completion of the project, whichever occurs first, and in both events, with all necessary certificates of occupancy having been issued. The contractor shall release and pay retainage to its subcontractors for work completed pursuant to the terms of this chapter.

(2) For the purposes of this subsection, substantial completion means the stage in the progress of the project when the project or designated portion thereof is sufficiently complete in accordance with the contract documents with all necessary certificates of occupancy having been issued so that the owner may occupy or utilize the project for its intended purpose.

(m) The provisions of subsections (h) through (l) shall not apply to any construction project for or by an electric utility regulated by the Public Service Commission.

(n) Nothing herein limits or alters the paying party’s right to withhold or not approve payment on grounds set forth in the party’s contract or the grounds set forth in Section 8-29-4 or otherwise for work not properly performed or payment not earned; rather, this section is intended only to establish a maximum amount of retainage, establish the timing for release of retainage, and provide for the payment of interest for improperly held retainage. Also, the paying party may condition payment on the receipt of a full release of any lien of the contractor, subcontractor, or sub-subcontractor for the amount of work being paid.

(o) All loans and loan proceeds related to a construction project, and the disbursement and use thereof, are governed solely by the terms of the documents evidencing and securing the loan, and contractors, subcontractors, and sub-subcontractors have no lien or rights in any such loan, loan proceeds, or the disbursement or use thereof.

(Acts 1995, No. 95-380, p. 775, §3; Act 2011-647, p. 1646, §1.)

§ 8-29-4 Withholding Application and Certification for Payment; Withholding Payment; Notice

(a) Nothing in this chapter shall prevent the owner, contractor, or subcontractor from withholding application and certification for payment for any of the following reasons if there is a bona fide dispute over one or more of the following:

(1) Unsatisfactory job progress.

(2) Defective construction not remedied.

(3) Disputed work.

(4) Third party claims filed or reasonable evidence that a claim will be filed.

(5) Failure of the contractor, subcontractor, or sub-subcontractor to make timely payments for labor, equipment, and materials.

(6) Property damage to owner, contractor, or subcontractor.

(7) Reasonable evidence that the contract, subcontract, or sub-subcontract cannot be completed for the unpaid balance of the contract or contract sum.

(b) In the event that there is a bona fide dispute over all or any portion of the amount due on a progress payment from the owner, contractor, or subcontractor then the owner, contractor, or subcontractor may withhold payment in an amount not to exceed 2 times the disputed amount.

(c) An owner is required to notify a contractor in writing within 15 days of receipt of any disputed request for payment. A contractor, subcontractor and sub-subcontractor is required to provide written notification within 5 days of disputed request for payment or notice of disputed request for payment.

(Acts 1995, No. 95-380, p. 775, §4.)

§ 8-29-5 Waiver of Right to Receive Interest

A party may not waive the right to receive interest before a payment is due under a contract subject to this section. A party may waive the interest due on any late payment on or after the date the payment is due under Section 8-29-3.

(Acts 1995, No. 95-380, p. 775, §5.)

§ 8-29-6 Civil Action

A contractor, subcontractor, or sub-subcontractor may file a civil action solely against the party contractually obligated for the payment of the amount claimed to recover the amount due plus the interest accrued in accordance with this chapter. If the court finds in the civil action that the owner, contractor, or subcontractor has not made payment in compliance with this chapter, the court shall award the interest specified in this chapter in addition to the amount due. In any such civil action, the party in whose favor a judgement is rendered shall be entitled to recover payment of reasonable attorneys’ fees, court costs and reasonable expenses from the other party.

(Acts 1995, No. 95-380, p. 775, §6.)

§ 8-29-7 Exemptions from Chapter

This chapter does not apply to the following:

(1) Residential homebuilders.

(2) Improvements to real property intended for residential purposes which consist of 16 or fewer residential units.

(3) Contracts, subcontracts, or sub-subcontracts in the amount of ten thousand dollars ($10,000) or less.

(4) Contracts with the state or local governments of the State of Alabama.

(Acts 1995, No. 95-380, p. 775, §7.)

§ 8-29-8 No Amendment of Existing Laws; Not Applicable in Certain Civil Actions

This chapter does not amend or modify existing laws relating to mechanics and materialmen liens and shall not be applicable in civil actions pursuant to Title 35, Chapter 11, Division 8.

(Acts 1995, No. 95-380, p. 775, §8.)

Chapter 30 Burial Services, Merchandise, and Property

§ 8-30-1 Definitions

The following terms shall have the following meanings:

(1) BURIAL MERCHANDISE. Any merchandise normally offered or sold by a cemetery for use in connection with the interment, entombment, or inurnment of human remains. This includes, but is not limited to, subterranean crypts, mausoleums, markers, and monuments, whether bronze or otherwise, bronze plaques and vases, mausoleum spaces to be constructed, cemetery spaces to be developed, and vaults, and also includes foundations or footings of any type.

(2) BURIAL RIGHT. The right to use a grave space, mausoleum, or columbarium for the interment, entombment, or inurnment of human remains.

(3) BURIAL SERVICE. Any service offered by a cemetery in connection with the interment, entombment, or inurnment of human remains as described in subdivision (1) of this section.

(4) CEMETERY. Any land or structure in this state dedicated to and used, or intended to be used, for interment of human remains. It may be either a burial park for earth interments, or a mausoleum for vault or crypt interments, or a combination of one or more thereof. The term shall not include governmentally owned cemeteries, fraternal cemeteries, church and synagogue cemeteries, or family burial plots.

(5) CEMETERY COMPANY. An individual, partnership, corporation, or association now or hereafter organized, owning or controlling cemetery lands or property and conducting the business of a cemetery.

(6) PERSON. An individual, a corporation, a partnership, an association, a joint stock company, a trust, or any unincorporated organization.

(7) SALE or SELL. Every contract of sale or disposition of cemetery property, burial right, burial lot, burial services, or burial merchandise for value. The term “offer to sell,” “offer for sale,” or “offer” shall include any attempt or offer to dispose of, or solicitation of an offer to buy, cemetery property, burial lots, burial rights, burial services, or burial merchandise for value. This definition shall not include wholesalers of burial merchandise.

(8) SALESPERSON. An individual employed or appointed or authorized by a cemetery or cemetery company to sell cemetery property, burial lots, burial rights, burial services, or any other right or thing of value in connection with the interment of human remains. The owner of a cemetery, the executive officers, and general partners of a cemetery company shall not be deemed to be salespersons within the meaning of this definition unless they are paid a commission for the sale of the property, lots, rights, merchandise, or services.

(Acts 1995, No. 95-760, p. 1783, §1.)

§ 8-30-2 Schedule of Charges for Burial Services and Merchandise

Every cemetery organized under the laws of this state shall have a full and complete schedule of all charges for burial services and burial merchandise provided by the cemetery plainly printed or typewritten, posted conspicuously, and maintained, subject to inspection and copy, at the usual place for transacting the regular business of the cemetery.

(Acts 1995, No. 95-760, p. 1783, §2.)

§ 8-30-3 Prohibited Actions

It shall be unlawful for any cemetery:

(1) To sell or offer to sell any cemetery property, burial lot, burial rights, burial services, or burial merchandise by means of any oral or written untrue statement of a material fact or any omission of a material fact.

(2) In connection with the offer, sale, or purchase of any cemetery property, burial lot, burial rights, burial services, or burial merchandise, directly or indirectly:

a. To employ any device, scheme, or artifice to defraud.

b. To engage in any transaction, act, practice, or course of business which operates or would operate as a fraud or deceit upon the purchaser or seller.

(3) To sell or offer to sell any cemetery property, burial lot, burial rights, burial services, or burial merchandise by means of any oral or written contract at a price that is above the posted amount.

(Acts 1995, No. 95-760, p. 1783, §3.)

§ 8-30-4 Penalty for Violation of Chapter

Any person who violates this chapter is guilty of a Class A misdemeanor.

(Acts 1995, No. 95-760, p. 1783, §4.)

Chapter 31 Alabama Unconscionable Pricing Act

§ 8-31-1 Short Title

This chapter shall be known and may be cited as the “Alabama Unconscionable Pricing Act.”

(Acts 1996, No. 96-171, p. 195, §1.)

§ 8-31-2 Definitions

As used in this chapter, the following words and phrases have the following meanings unless a different meaning is required by the context:

(1) COMMODITY. Any goods, services, materials, merchandise, supplies, equipment, resources, or other articles of commerce, and includes, without limitation, all services offered or provided or work performed or offered to be performed as an occupation or business to consumers and food, water, ice, chemicals, petroleum products, and lumber necessary for consumption or use as a direct result of the emergency.

(2) PERSON. Shall include, but not be limited to, natural persons, corporations, trusts, partnerships, incorporated or unincorporated associations, and any other legal entity.

(3) RENTAL FACILITY. Shall include, but not be limited to, any hotel, motel, boarding house, dwelling house, and self storage facility offered for rent or lease.

(Acts 1996, No. 96-171, p. 195, §2; Act 2003-336, p. 843, §1.)

§ 8-31-3 Prohibition of Unconscionable Pricing During Declared State of Emergency

It is unlawful and a violation of Section 8-19-5 for any person or entity to impose unconscionable prices for the sale or rental of any commodity, the rental of any facility, or the provision of any service during the period of a declared state of emergency for any time periods and in any affected areas specified in a proclamation by the Governor or a joint resolution of the Legislature issued pursuant to Section 31-9-8(a).

(Acts 1996, No. 96-171, p. 195, §3; Act 2003-336, p. 843, §1; Act 2023-122, §1; Act 2025-341, §1.)

§ 8-31-4 Determination of Unconscionable Price During a State of Emergency

It is prima facie evidence that a price is unconscionable if any person, during a state of emergency declared pursuant to the powers granted to the Governor in Section 31-9-8, charges a price that exceeds, by an amount equal to or in excess of 25 percent the average price at which the same or similar commodity or rental facility was obtainable in the affected area during the last 30 days immediately prior to the declared state of emergency and the increase in the price charged is not attributable to reasonable costs incurred in connection with the rental or sale of the commodity. For purposes of this section, the term “affected area” means any area specified as an affected area in a proclamation by the Governor or a joint resolution by the Legislature issued pursuant to Section 31-9-8(a).

(Acts 1996, No. 96-171, p. 195, §4; Act 2001-1104, 4th Sp. Sess., p. 1168, §1; Act 2003-336, p. 843, §1; Act 2023-122, §1.)

§ 8-31-5 Penalties for Violation of Chapter; Penalties Collected Remitted to State Treasurer; Suspension or Revocation of License or Certificate

(a) Upon an entry of judgement or decree for a violation of this chapter, the court shall impose a civil penalty not to exceed one thousand dollars ($1,000) per violation with an aggregate total not to exceed twenty-five thousand dollars ($25,000) for any 24-hour period.

(b) All penalties collected under this chapter shall be remitted by the circuit court to the State Treasurer and shall be credited to the account of either the office of the Attorney General or the office of the district attorney whichever initiated the action resulting in the imposition of such penalties.

(c) Upon a showing to the court by the office of the Attorney General or the office of the district attorney that a person has engaged in continuous and willful violations of this chapter, the court may suspend or revoke any license or certificate authorizing that person to engage in business in this state or the court may enjoin any person from engaging in business in this state.

(Acts 1996, No. 96-171, p. 195, §5.)

§ 8-31-6 Private Cause of Action Not Created

Nothing in this chapter creates a private cause of action in favor of any person damaged by a violation of this chapter.

(Acts 1996, No. 96-171, p. 195, §6.)

Chapter 32 Service Contracts

§ 8-32-1 Purpose

AMENDED BY ACT 2026-395, EFFECTIVE OCTOBER 1, 2026. SEE ACT FOR REVISED LANGUAGE.

(a) The purpose of this chapter is to create a framework to regulate service contracts sold to consumers in this state.

(b) The following are exempt from Sections 8-32-2 to 8-32-12, inclusive, of this chapter:

(1) Warranties.

(2) Maintenance agreements.

(3) Warranties, service contracts, or maintenance agreements offered by electric, gas, water, or telephone utilities on their transmission devices.

(4) Service contracts sold or offered for sale in commercial transactions.

(5) Service contracts sold or offered for sale to persons other than consumers.

(6) Service contracts sold at the point of sale, or within 60 days of the original purchase date of the property, which cover tangible property where the tangible property for which the service contract is sold, has a purchase price of two hundred and fifty dollars ($250) or less, exclusive of sales tax.

(c) Manufacturer’s service contracts on the manufacturer’s products and service contracts sold or offered for sale by Alabama electric cooperatives, and their subsidiaries and affiliates, including without limitation, affiliates managed or controlled by electric cooperatives, are required to comply only with Section 8-32-3(a), Section 8-32-3(g), Section 8-32-5(a), Section 8-32-5(d) to (n), inclusive, Section 8-32-6, Section 8-32-10(a), and Section 8-32-10(c) to (f), inclusive, as applicable, of this chapter.

(d) The types of agreements referred to in subsections (b) and (c) are not insurance for any purpose including, without limitation, compliance with the Alabama Insurance Code.

(Acts 1997, No. 97-445, p. 753, §1.)

§ 8-32-2 Definitions

As used in this chapter, the following terms shall have the following meanings:

(1) ADMINISTRATOR. The person designated by a provider to be responsible for the administration of service contracts or the service contracts plan or to make the filings required by this chapter.

(2) COMMISSIONER. The Commissioner of Insurance of this state.

(3) CONSUMER. A natural person who buys, primarily for personal, family, or household purposes, and not for resale, any tangible personal property normally used for personal, family, or household purposes and not for commercial or research purposes.

(4) MAINTENANCE AGREEMENT. A contract of limited duration that provides for scheduled maintenance only.

(5) MANUFACTURER. A person that is one of the following:

a. A manufacturer or producer of property that sells the property under its own name or label.

b. A subsidiary of the person who manufactures or produces the property.

c. A corporation which owns at least 80 percent of the person who manufactures or produces the property.

d. A person who manufactures or produces the property even though the property is sold under the trade name or label of another person.

(6) MECHANICAL BREAKDOWN INSURANCE. For purposes of this chapter, a policy, contract, or agreement issued by an authorized insurance company directly to a consumer or other owner of property that provides for, among other coverages, the repair, replacement, or maintenance of property or indemnification for repair, replacement, or maintenance, for the operational or structural failure of the property due to a defect in materials or workmanship or due to normal wear and tear.

(7) NON-ORIGINAL MANUFACTURER’S PARTS. Replacement parts not made for or by the original manufacturer of the property, commonly referred to as “after market parts.”

(8) PERSON. An individual, partnership, corporation, incorporated or unincorporated association, joint stock company, reciprocal, syndicate, or any other entity, or combination of persons acting in concert.

(9) PREMIUM. The consideration paid to an insurer for a reimbursement insurance policy.

(10) PROVIDER. A person who administers, makes, provides, sells, or offers to sell a service contract, who is contractually obligated to provide service under a service contract.

(11) PROVIDER FEE. The total purchase price paid for a service contract. In cases where a reimbursement insurance policy is issued to a provider, the “provider fee” is the total purchase price paid for a service contract net of the premium.

(12) REIMBURSEMENT INSURANCE POLICY. A policy of insurance issued to a provider pursuant to which the insurer agrees, for the benefit of the service contract holders, to discharge the obligations of the provider under the terms of the service contracts in the event of non-performance by the provider.

(13) ROAD HAZARD. A hazard that is encountered while driving a motor vehicle, including, but not limited to, potholes, rocks, wood debris, metal parts, glass, plastic, curbs, or composite scraps.

(14) SERVICE CONTRACT. A contract or agreement for a separately stated consideration for a specific duration to perform the repair, replacement, or maintenance of property or indemnification for repair, replacement, or maintenance, for the operational or structural failure due to a defect in materials or workmanship, or normal wear and tear, with or without additional provision for incidental payment or indemnity under limited circumstances, for related expenses, including, but not limited to, towing, rental, and emergency road service. Service contracts may provide for the repair, replacement, or maintenance of property for damage resulting from power surges and accidental damage from handling. “Service contract” does not include warranties, mechanical breakdown insurance, or maintenance agreements. A service contract is not insurance for any purpose, including, but not limited to, compliance with the Alabama Insurance Code, other than for the purpose of a service contract holder’s claim against a service contract provider for failure to comply with the provisions of the service contract if so provided by other law. Service contract services include, but are not limited to, the following:

a. The repair or replacement of tires or wheels, or both, on a motor vehicle damaged as a result of coming into contact with a road hazard.

b. The removal of dents, dings, or creases on a motor vehicle that may be repaired using the process of paintless dent removal without affecting the existing paint finish and without replacing vehicle body panels, sanding, bonding, or painting.

c. The repair of chips or cracks in or the replacement of a motor vehicle windshield as a result of damage caused by a road hazard that is primary to the coverage offered by the motor vehicle owner’s motor vehicle insurance policy.

d. The replacement of a motor vehicle key or key-fob if the key or key-fob becomes inoperable, lost, or stolen.

e. Other services which may be approved by the commissioner, if not inconsistent with this chapter.

(15) SERVICE CONTRACT HOLDER or CONTRACT HOLDER. A person who is the purchaser or holder of a service contract.

(16) WARRANTY. A warranty made by the manufacturer, importer, distributor, or seller of property or services without consideration stated separately from the price of the property or services sold, that is not negotiated separate from the sale of the product and is incidental to the sale of the product, that guarantees repair or replacement, or indemnity for repair or replacement, for defective parts, mechanical or electrical breakdown, labor or other remedial measures, such as repair or replacement of the property or repetition of services.

(Acts 1997, No. 97-445, p. 753, §2; Act 2016-101, §1.)

§ 8-32-3 Requirements for Selling or Offering to Sell Service Contracts

AMENDED BY ACT 2026-395, EFFECTIVE OCTOBER 1, 2026. SEE ACT FOR REVISED LANGUAGE.

(a) Either the provider or its designee shall:

(1) Provide a receipt for, or other written evidence of, the purchase of the service contract to the contract holder.

(2) Provide a copy of the service contract to the service contract holder within a reasonable period of time from the date of purchase.

(b) A provider may, but is not required to, appoint an administrator or other designee to be responsible for any or all of the administration of service contracts and compliance with this chapter.

(c) Each provider of service contracts sold in this state shall file a registration with the commissioner on a form prescribed by the commissioner. Each provider shall pay to the commissioner a fee in the amount of two hundred dollars ($200) annually. All fees collected shall be paid into a special revolving fund to be set up by the State Treasurer referred to as the “Service Contract Revolving Fund.” The Service Contract Revolving Fund shall be used in the supervision and examination of providers and otherwise in the administration of this chapter; provided however, that nothing in this section shall be construed to mean that all of the expenses of supervision and examination of providers and in the administration of this chapter incurred by the State Insurance Department shall come from the Service Contract Revolving Fund.

(d) All funds now or hereafter deposited in the State Treasury to the credit of the Service Contract Revolving Fund shall not be expended for any purpose whatsoever unless the same shall have been allotted and budgeted in accordance with the provisions of Sections 41-4-80 to 41-4-96, inclusive, and 41-19-1 to 41-19-12, inclusive, and only in the amounts and for the purposes provided by the Legislature in the general appropriation bill, other appropriations bills or this chapter.

(e) There is hereby appropriated for the fiscal year ending September 30, 1998, from the Service Contract Revolving Fund to the State Department of Insurance those amounts as deemed necessary to carry out the provisions of this chapter as determined by the Commissioner of Insurance.

(f) In order to assure the faithful performance of a provider’s obligations to its service contract holders, each provider shall be responsible for complying with the requirements of one of the following subdivisions:

(1) Insure all service contracts under a reimbursement insurance policy issued by an insurer authorized to transact insurance in this state or issued pursuant to Chapter 10, Title 27.

(2) Do both of the following:

a. Maintain a funded reserve account for its obligations under its service contracts sold and outstanding in this state. The reserves shall be based on the loss experience of the provider as certified by an actuary or, at the election of the provider, the reserves shall be 30 percent of the aggregate provider fees for all service contracts sold and then in force. The reserve account shall be subject to examination and review by the commissioner.

b. Place in trust with the commissioner a financial security deposit, having a value of not less than five percent of the aggregate provider fees, less claims paid, for all service contracts sold and then in force, but not less than twenty-five thousand dollars ($25,000) consisting of one of the following:

(i) A surety bond issued by an authorized surety.

(ii) Securities of the type eligible for deposit by authorized insurers in this state.

(iii) Cash.

(iv) A letter of credit issued by a qualified financial institution.

(v) Another form of security prescribed by regulations issued by the commissioner.

(3) Do both of the following:

a. Maintain a net worth or stockholders’ equity of one hundred million dollars ($100,000,000).

b. Upon request, provide the commissioner with a copy of the financial statement of the provider included in its most recent annual report on Form 10-K or Form 20-F filed with the Securities and Exchange Commission (SEC) within the last calendar year, or if the provider does not file with the SEC, a copy of the audited financial statements of the provider, which shows a net worth of the provider of at least one hundred million dollars ($100,000,000). A consolidated Form 10-K, Form 20-F or audited financial statements shall meet the requirements of this chapter for the provider if it shows a net worth or stockholders’ equity of the provider of at least one hundred million dollars ($100,000,000) and there shall be no requirement of a parent company guarantee, reimbursement insurance, or other form of financial stability requirement. However, if the Form 10-K, Form 20-F or audited financial statements of the parent company of the provider are filed to meet the provider’s financial stability requirement because the provider’s net worth or stockholders’ equity of the provider is not at least one hundred million dollars ($100,000,000), or because the net worth or stockholders’ equity is not determinable from the consolidated Form 10-K, Form 20-F or audited financial statements of the parent company, then the parent company shall agree to guarantee the obligations of the provider relating to service contracts sold by the provider in this state.

(g) Service contracts shall require the provider to permit the service contract holder to return the service contract within no less than 20 days of the date the service contract was mailed to the service contract holder or within no less than 10 days of delivery if the service contract is delivered to the service contract holder at the time of sale. Upon return of the service contract to the provider within the applicable time period, if no claim has been made under the service contract prior to its return to the provider, the service contract is void and the provider shall refund to the service contract holder the full purchase price of the service contract including any premium paid for any applicable reimbursement insurance policy. Any refund due a service contract holder may be credited to any outstanding balance of the account of the service contract holder, and the excess, if any, shall be refunded to the service contract holder. The right to void the service contract provided in this subsection (g) is not transferable and shall apply only to the original service contract purchaser, and only if no claim has been made prior to its return to the provider. A 10 percent penalty per month shall be added to a refund that is not paid or credited within 45 days after return of the service contract to the provider.

(h) In the event the original service contract holder makes a written demand for cancellation of a service contract pursuant to the terms of the service contract, the provider shall refund to the service contract holder the unearned portion of the full purchase price of the service contract including the unearned portion of any premium paid for any applicable reimbursement insurance policy. Any refund due a service contract holder may be credited to any outstanding balance of the account of the service contract holder, and the excess, if any, shall be refunded to the service contract holder. If the original contract purchaser or a contract holder elects cancellation, the provider may retain an administrative fee of up to twenty-five dollars ($25) for issuance of the service contract if such fee is provided for in the service contract; however, this amount may not be deducted in the event the service contract is terminated pursuant to the provisions of subsection (g).

(i)(1) Provider fees are not subject to premium taxes.

(2) Premiums for reimbursement insurance policies are subject to applicable taxes.

(j) Except for the registration requirement in subsection (c), providers, administrators, and other persons marketing, selling, or offering to sell service contracts for providers are exempt from any licensing requirements of this state.

(k) Providers are not required to comply with any provision of Title 27.

(Acts 1997, No. 97-445, p. 753, §3.)

§ 8-32-4 Required Provisions, Reimbursement Insurance Policy

Reimbursement insurance policies insuring service contracts sold in this state shall provide that, upon failure of the provider to perform under the service contract, including, without limitation, failure to refund or credit the unearned portion of the purchase price of the service contract to the extent required by this chapter, the insurer that issued the reimbursement insurance policy shall pay on behalf of the provider any sums the provider is legally obligated to pay to a service contract holder, or shall provide the service which the provider is legally obligated to perform, according to the provider’s contractual obligations under the service contracts sold by the provider. The reimbursement insurance company shall be responsible to refund only the unearned premium net of the unearned provider fee, and the provider shall be responsible for refunding or crediting the unearned provider fee in excess of the unearned premium. If the provider fails to refund or credit any portion of the unearned provider fee required to be refunded or credited by this chapter, the reimbursement insurance company shall be responsible for the entire refund of the unearned premium and unearned provider fee. The amount of the reserve relative to the unearned provider fee to be maintained by the reimbursement insurance company shall be based on the loss experience of the reimbursement insurance company as certified by an actuary.

(Acts 1997, No. 97-445, p. 753, §4.)

§ 8-32-5 Required Provisions, Service Contracts

(a) Service contracts sold or offered for sale in this state, in their entirety, shall be written, printed, or typed in eight point type size, or larger, and shall comply with the requirements set forth in this section, as applicable.

(b) Service contracts insured under a reimbursement insurance policy pursuant to subdivision (1) of subsection (f) of Section 8-32-3 shall contain a statement in substantially the following form:

“Obligations of the provider under this service contract are guaranteed under a service contract reimbursement insurance policy.”

If the provider fails to pay or to provide service on a claim within 60 days after proof of loss has been filed, the service contract holder is entitled to make a claim directly against the reimbursement insurance company. The service contract shall state the name and address of the reimbursement insurance company.

(c) Service contracts not insured under a reimbursement insurance policy pursuant to subdivision (1) of subsection (f) of Section 8-32-3 shall contain a statement in substantially the following form:

“Obligations of the provider under this service contract are backed by the full faith and credit of the provider.”

(d) Service contracts shall state the name and address of the provider, and shall identify any administrator, the service contract seller, and the service contract holder to the extent that the name and address of the service contract holder has been furnished by the service contract holder. Neither the name of the service contract seller nor other provisions are required to be preprinted on the service contract and may be added to the service contract at the time of sale.

(e) Service contracts shall state the purchase price of the service contract, the term of the service contract and any applicable renewal provisions. Neither the purchase price nor any other provisions are required to be pre-printed on the service contract and may be negotiated at the time of sale with the service contract holder.

(f) If the provider will reimburse the contract holder for repair work performed by third parties and if prior approval of repair work is required, (i) the service contract shall state the procedure for obtaining prior approval and for making a claim, including a toll-free telephone number for claim service and (ii) if the service contract provides services essential to public health, safety, or welfare, the service contract shall either provide for 24-hour telephone assistance, or state the procedure for obtaining emergency repairs performed outside of normal business hours.

(g) Service contracts shall state the existence of any deductible amount.

(h) Service contracts shall describe the property upon which the services are to be provided, the services to be provided and any limitations, exceptions, or exclusions to the services to be provided.

(i) Service contracts shall state whether the use of non-original manufacturer’s parts is allowed.

(j) Service contracts shall state any restrictions governing the transferability of the service contract.

(k) Service contracts shall state the terms, restrictions, or conditions governing cancellation of the service contract prior to the termination or expiration date of the service contract by either the provider or by the service contract holder. The provider of the service contract shall mail a written notice to the service contract holder at the last known address of the service contract holder contained in the records of the provider at least five days prior to cancellation by the provider. Prior notice is not required if the reason for cancellation is nonpayment of the provider fee or a material misrepresentation by the service contract holder to the provider relating to the covered property or its use. The notice shall state the effective date of the cancellation and the reason for the cancellation.

(l) Service contracts shall set forth the obligations and duties of the service contract holder relating to the property covered by the service contract.

(m) Service contracts shall state whether or not the service contract provides for or excludes consequential damages or preexisting conditions, to the extent applicable.

(n) Service contracts may contain other provisions as determined by the provider.

(Acts 1997, No. 97-445, p. 753, §5.)

§ 8-32-6 Prohibited Acts

(a) A provider shall not use in its name the words insurance, casualty, surety, mutual, or any other words descriptive of the insurance, casualty, or surety business; or a name deceptively similar to the name or description of any insurance or surety corporation, or to the name of any other provider. The word “guaranty” or similar word may be used by a provider. This section shall not apply to a company that was using any of the prohibited language in its name prior to August 1, 1997. However, a company using the prohibited language in its name shall include in its service contracts a statement in substantially the following form: “This agreement is not an insurance contract.”

(b) A person, such as a bank, savings and loan association, lending institution, manufacturer, or seller of any product, shall not require the purchase of a service contract as a condition of a loan or a condition for the sale of any property.

(Acts 1997, No. 97-445, p. 753, §6.)

§ 8-32-7 Record Keeping Requirements

(a)(1) The provider shall keep accurate accounts, books, and records concerning transactions regulated under this chapter.

(2) The provider’s accounts, books, and records shall include the following:

a. Copies of each type of service contract sold.

b. The name and address of each service contract holder to the extent that the name and address have been furnished by the service contract holder.

c. A list of the locations where service contracts are marketed, sold, or offered for sale.

d. Recorded claims files which shall contain at least the dates, amounts, and description of all receipts, claims, and expenditures related to the service contracts.

(3) The provider shall retain all records required to be maintained by this subsection (a) for at least three years after the specified period of coverage has expired.

(4) The records required under this chapter may be, but are not required to be, maintained on a computer disk or other record keeping technology. If the records are maintained in other than hard copy, the records shall be capable of duplication to legible hard copy at the request of the commissioner.

(b) A provider discontinuing business in this state shall maintain its records until it furnishes the commissioner satisfactory proof that it has discharged all obligations to service contract holders in this state.

(Acts 1997, No. 97-445, p. 753, §7.)

§ 8-32-8 Cancellation of Reimbursement Insurance Policy

To the extent applicable, an insurer that issued a reimbursement insurance policy shall not terminate the policy until a notice of termination in accordance with Chapter 40 of Title 27 has been mailed or delivered to the commissioner. The termination of a reimbursement insurance policy shall not reduce the issuer’s responsibility for service contracts sold by providers which it insured prior to the date of the termination.

(Acts 1997, No. 97-445, p. 753, §8.)

§ 8-32-9 Obligation of Reimbursement Insurance Policy Insurers

(a) Where reimbursement insurance is applicable, providers are considered to be the agent of the insurer which issued the reimbursement insurance policy solely for purposes of obligating the insurers to service contract holders in accordance with the service contract and this chapter. In cases where a provider is acting as an administrator and enlists other providers, the provider acting as the administrator shall notify the insurer of the existence and identities of the other providers.

(b) This chapter shall not prevent or limit the right of an insurer which issued a reimbursement insurance policy to seek indemnification or subrogation against a provider if the insurer pays or is obligated to pay the service contract holder sums that the provider was obligated to pay pursuant to the provisions of the service contract.

(Acts 1997, No. 97-445, p. 753, §9.)

§ 8-32-10 Enforcement Provisions

(a) The commissioner may conduct investigations or examinations of providers, administrators, insurers, or other persons to enforce this chapter and protect service contract holders in this state. Upon request of the commissioner, the provider shall make all accounts, books, and records concerning service contracts sold in this state by the provider available to the commissioner which are necessary to enable the commissioner to reasonably determine compliance or noncompliance with this chapter.

(b) Providers, administrators, or insurers being examined shall pay to the commissioner the travel expense to and from such examination, a living expense allowance at reasonable rates customary for the examination in the state where the examination takes place and as established or adopted by regulation of the commissioner, and the compensation of the examiners making the examination, upon presentation by the commissioner of a detailed account of the allowances and expenses. The account may be presented periodically during the course of the examination or at the termination of the examination, as the commissioner deems proper. All payments collected by the commissioner shall be paid into the special fund provided by Section 8-32-3(c) and used to pay the cost of the examination of providers.

(c) The commissioner may take action which is necessary or appropriate to enforce this chapter and the commissioner’s regulations and orders, and to protect service contract holders in this state.

(d) If a provider has violated this chapter or the commissioner’s regulations or orders, the commissioner may issue an order directed to that provider (i) to cease and desist from committing violations of this chapter or the commissioner’s regulations or orders; (ii) prohibiting that provider from selling or offering for sale service contracts in violation of this chapter; or (iii) imposing a civil penalty on that provider; or (iv) any combination of the foregoing, as applicable.

(1) A person aggrieved by an order issued under this subsection (d) may request a hearing before the commissioner. The hearing request shall be filed with the commissioner within 20 days of the date the commissioner’s order is effective.

(2) If a hearing is requested, pending the hearing and the decision by the commissioner, the effective date of the order automatically shall be suspended until completion of the hearing and final decision of the commissioner.

(3) At the hearing, the burden shall be on the commissioner to show why the order issued pursuant to this subsection is justified. The provisions of Sections 27-2-30, 27-2-31, and 27-2-32 shall apply to a hearing requested under this subsection (d).

(e) The commissioner may bring an action in the Circuit Court of Montgomery County, Alabama, for an injunction or other appropriate relief to enjoin threatened or existing violations of this chapter or of the commissioner’s orders or regulations. An action filed under this section also may seek restitution on behalf of persons aggrieved by a violation of this chapter or orders or regulations of the commissioner.

(f) A person who is found to have violated this chapter may be ordered to pay to the commissioner a civil penalty in an amount determined by the commissioner of not more than five hundred dollars ($500) per violation and no more than ten thousand dollars ($10,000) in the aggregate for all violations of a similar nature. For purposes of this section, violations shall be of a similar nature if the violation consists of the same or similar course of conduct, action, or practice, irrespective of the number of times the act, conduct, or practice which is determined to be a violation of this chapter occurred. All civil penalties collected shall be paid into the special fund provided by Section 8-32-3(c) and used in the supervision and examination of providers and otherwise in the administration of this chapter.

(Acts 1997, No. 97-445, p. 753, §10.)

§ 8-32-11 Rules and Regulations

The commissioner may promulgate reasonable rules and regulations necessary to implement this chapter.

(Acts 1997, No. 97-445, p. 753, §11.)

§ 8-32-12 Service Contracts Prior to January 1, 1998

Service contracts entered into prior to January 1, 1998, and renewals thereof, may but are not required to comply with this chapter. Providers and other persons are not required to comply with this chapter until January 1, 1998. A provider or other person may, but is not required to, implement the requirements of this chapter prior to January 1, 1998. The failure of a provider or other person to comply with this chapter or otherwise to administer a service contract plan, in the manner required by this chapter prior to January 1, 1998, shall not be admissible in any court, arbitration, or alternative dispute resolution proceedings or otherwise used to prove that the action of any person or the service contract was unlawful or otherwise improper.

(Acts 1997, No. 97-445, p. 753, §13.)

§ 8-32-13 Transfer of Unexpired Manufacturer’s Warranties on Heating, Ventilation, and Air-Conditioning Systems with the Associated Real Property

(a) As used in this section, the following terms have the following meanings:

(1) HVAC SYSTEM. A heating, ventilation, and air conditioning system.

(2) MANUFACTURER’S WARRANTY. The original equipment manufacturer’s unregistered, initial, or base term warranty to repair, service, or replace a component or a part of the HVAC system which automatically accompanies the HVAC system at the time of purchase, through no further action of the owner. The term does not include any coverage extended beyond the unregistered, initial term or base warranty.

(3) RESIDENTIAL REAL PROPERTY. Any of the following:

a. A single-family house.

b. A duplex, triplex, or quadraplex.

c. A unit in a multi-unit residential structure in which title to an individual unit is transferred to the owner of the unit under a condominium or cooperative system.

(b) If a residential real property that includes an HVAC system as a fixture to the property is conveyed to a new owner on or after October 1, 2025, a manufacturer’s warranty in effect on that system or a component of that system:

(1) Is automatically transferred to the new owner; and

(2) Continues in effect as if the new owner was the original purchaser of the system or component, as applicable.

(c) A warrantor continues to be obligated under the terms of a manufacturer’s warranty agreement for a warranty transferred under this section and may not charge a fee for the transfer of the warranty.

(d) The transfer of a manufacturer’s warranty under this section does not extend the remaining term of the warranty.

(e) This section applies if:

(1) A sale of a residential property that includes an HVAC system as a fixture to the property occurs on or after October 1, 2025;

(2) A manufacturer’s warranty is still in effect on the HVAC system or a component of the system; and

(3) A warranty agreement was entered into or renewed on or after October 1, 2025. A warranty agreement entered into or renewed before October 1, 2025, is governed by the law in effect on the date the agreement was entered into or renewed, and the former law is continued in effect for that purpose.

(Act 2025-374, §1.)

Chapter 33 Vehicle Protection Product Act

§ 8-33-1 Short Title

This chapter shall be known and may be cited as the Vehicle Protection Product Act.

(Act 2006-600, p. 1638, §1.)

§ 8-33-2 Definitions

As used in this chapter, the following words shall have the following meanings:

(1) ADMINISTRATOR. A third party other than the warrantor who is designated by the warrantor to be responsible for the administration of vehicle protection product warranties.

(2) COMMISSIONER. The Commissioner of the Department of Insurance.

(3) DEPARTMENT. The Department of Insurance.

(4) INCIDENTAL COSTS. Expenses specified in the warranty incurred by the warranty holder related to the failure of the vehicle protection product to perform as provided in the warranty. Incidental costs may include, without limitation, insurance policy deductibles, rental vehicle charges, the difference between the actual value of the stolen vehicle at the time of theft and the cost of a replacement vehicle, sales taxes, registration fees, transaction fees, and mechanical inspection fees.

(5) SERVICE CONTRACT. A contract or agreement as defined in subdivision (13) of Section 8-32-2.

(6) VEHICLE PROTECTION PRODUCT. A vehicle protection device, system, or service that is all of the following:

a. Installed on or applied to a vehicle.

b. Is designed to prevent loss or damage to a vehicle from a specific cause.

c. Includes a written warranty.

For purposes of this chapter, the term vehicle protection product shall include, without limitation, alarm systems, body part marking products, steering locks, window etch products, pedal and ignition locks, fuel and ignition kill switches, and electronic, radio, and satellite tracking devices. A vehicle protection product is not insurance for any purpose.

(7) VEHICLE PROTECTION PRODUCT WARRANTOR or WARRANTOR. A person who is contractually obligated to the warranty holder under the terms of the vehicle protection product warranty agreement. Warrantor does not include an authorized insurer providing a warranty reimbursement insurance policy.

(8) VEHICLE PROTECTION PRODUCT WARRANTY or WARRANTY. A written agreement by a warrantor that provides if the vehicle protection product fails to prevent loss or damage to a vehicle from a specific cause, that the warranty holder shall be paid specified incidental costs by the warrantor as a result of the failure of the vehicle protection product to perform pursuant to the terms of the warranty. Incidental costs may be reimbursed under the provisions of the warranty in either a fixed amount specified in the warranty or sales agreement or by use of a formula itemizing specific incidental costs incurred by the warranty holder.

(9) WARRANTY HOLDER. The person who purchases a vehicle protection product or who is a permitted transferee.

(10) WARRANTY REIMBURSEMENT INSURANCE POLICY. A policy of insurance that is issued to the vehicle protection product warrantor to provide reimbursement to the warrantor or to pay on behalf of the warrantor all covered contractual obligations incurred by the warrantor under the terms and conditions of the insured vehicle protection product warranties sold by the warrantor.

(Act 2006-600, p. 1638, §2.)

§ 8-33-3 Compliance

(a) No vehicle protection product may be sold or offered for sale in this state unless the seller, warrantor, and administrator, if any, comply with the provisions of this chapter.

(b) Vehicle protection product warrantors and related vehicle protection product sellers and warranty administrators complying with this chapter are not required to comply with and are not subject to any other provision of the Alabama Insurance Code.

(c) Service contract providers who do not sell vehicle protection products are not subject to the requirements of this chapter and sales of vehicle protection products are exempt from the requirements of Chapter 32.

(d) Warranties, indemnity agreements, and guarantees that are not provided as a part of a vehicle protection product are not subject to this chapter.

(Act 2006-600, p. 1638, §3.)

§ 8-33-4 Registration Requirements

(a) A person may not operate as a warrantor or represent to the public that the person is a warrantor unless the person is registered with the department on a form prescribed by the commissioner.

(b) Warrantor registration records shall be filed annually and shall be updated within 30 days of any change. The registration records shall contain the following information:

(1) The warrantor’s name, any fictitious names under which the warrantor does business in the state, principal office address, and telephone number.

(2) The name and address of the warrantor’s agent for service of process in the state if other than the warrantor.

(3) The names of the warrantor’s executive officer or officers directly responsible for the warrantor’s vehicle protection product business.

(4) The name, address, and telephone number of any administrators designated by the warrantor to be responsible for the administration of vehicle protection product warranties in this state.

(5) A copy of the warranty reimbursement insurance policy or policies or other financial information required by Section 8-33-5.

(6) A copy of each warranty the warrantor proposes to use in this state.

(7) A statement indicating under which provision of Section 8-33-5 the warrantor qualifies to do business in this state as a warrantor.

(c) The commissioner may charge each registrant a reasonable fee to offset the cost of processing the registration and maintaining the records in an amount not to exceed two hundred fifty dollars ($250) annually. The information in subdivisions (1) and (2) of subsection (b) shall be made available to the public.

(d) If a registrant fails to register by the renewal deadline, the commissioner shall give him or her written notice of the failure and the registrant will have 30 days to complete the renewal of his or her registration before he or she is suspended from being registered in this state.

(e) An administrator or person who sells or solicits a sale of a vehicle protection product but who is not a warrantor shall not be required to register as a warrantor or be licensed under the insurance laws of this state to sell vehicle protection products.

(Act 2006-600, p. 1638, §4.)

§ 8-33-5 Conditions for Warrantors

(a) No vehicle protection product shall be sold or offered for sale in this state unless the warrantor meets one of the conditions in subsection (b) or (c) in order to ensure adequate performance under the warranty. No other financial security requirements or financial standards for warrantors shall be required.

(b) The vehicle protection product warrantor is insured under a warranty reimbursement insurance policy issued by an insurer authorized to do business in this state which provides that:

(1) The insurer will pay to, or on behalf of, the warrantor 100 percent of all sums that the warrantor is legally obligated to pay according to the warrantor’s contractual obligations under the warrantor’s vehicle protection product warranty.

(2) A true and correct copy of the warranty reimbursement insurance policy has been filed with the commissioner by the warrantor.

(3) The policy contains the provision required in Section 8-33-6.

(c)(1) The vehicle protection product warrantor, or its parent company, maintains a net worth or stockholders’ equity of fifty million dollars ($50,000,000).

(2) The warrantor provides the commissioner with a copy of the warrantor’s or the warrantor’s parent company’s most recent Form 10-K or Form 20-F filed with the Securities and Exchange Commission within the last calendar year or, if the warrantor does not file with the Securities and Exchange Commission, a copy of the warrantor’s or the warrantor’s parent company’s audited financial statements that shows a net worth of the warrantor or its parent company of at least fifty million dollars ($50,000,000). If the warrantor’s parent company’s Form 10-K, Form 20-F, or audited financial statements are filed to meet the warrantor’s financial stability requirement, then the parent company shall agree to guarantee the obligations of the warrantor relating to warranties issued by the warrantor in this state. The audited financial statements filed pursuant to this section shall be exempt from public disclosure under Section 36-12-40.

(Act 2006-600, p. 1638, §5.)

§ 8-33-6 Conditions for Policies

No warranty reimbursement insurance policy shall be issued, sold, or offered for sale in this state unless the policy meets the following conditions:

(1) The policy states that the issuer of the policy will reimburse or pay on behalf of the vehicle protection product warrantor all covered sums which the warrantor is legally obligated to pay or will provide all service that the warrantor is legally obligated to perform according to the warrantor’s contractual obligations under the provisions of the insured warranties sold by the warrantor.

(2) The policy states that in the event payment due under the terms of the warranty is not provided by the warrantor within 60 days after proof of loss has been filed according to the terms of the warranty by the warranty holder, the warranty holder may file directly with the warranty reimbursement insurance company for reimbursement.

(3) The policy provides that a warranty reimbursement insurance company that insures a warranty shall be deemed to have received payment of the premium if the warranty holder paid for the vehicle protection product and the insurer’s liability under the policy shall not be reduced or relieved by a failure of the warrantor, for any reason, to report the issuance of a warranty to the insurer.

(4) The policy has the following provisions regarding cancellation of the policy:

a. The issuer of a reimbursement insurance policy shall not cancel such policy until a notice of cancellation in writing has been mailed or delivered to the commissioner and each insured warrantor.

b. The cancellation of a reimbursement insurance policy shall not reduce the issuer’s responsibility for vehicle protection products sold prior to the date of cancellation.

c. In the event an insurer cancels a policy that a warrantor has filed with the commissioner, the warrantor shall do either of the following:

1. File a copy of a new policy with the commissioner, before the termination of the prior policy, providing no lapse in coverage following the termination of the prior policy.

2. Discontinue acting as a warrantor as of the termination date of the policy until a new policy becomes effective and is accepted by the commissioner.

(Act 2006-600, p. 1638, §6.)

§ 8-33-7 Form and Contents of Warranty

(a) Every vehicle protection product warranty in its entirety shall be written, printed, or typed in eight point type size or larger and shall not be sold or offered for sale in this state unless the warranty:

(1) States that the obligations of the warrantor to the warranty holder are guaranteed under a warranty reimbursement insurance policy if the warrantor elects to meet its financial responsibility obligations under subsection (b) of Section 8-33-5 or states that the obligations of the warrantor under the warranty are backed by the full faith and credit of the warrantor if the warrantor elects to meet its financial responsibility obligations under subsection (c) of Section 8-33-5.

(2) States that in the event a warranty holder must make a claim against a party other than the warranty reimbursement insurance policy issuer, the warranty holder is entitled to make a direct claim against the insurer upon the failure of the warrantor to pay any claim or meet any obligation under the terms of the warranty within 60 days after proof of loss has been filed with the warrantor.

(3) States the name and address of the issuer of the warranty reimbursement insurance policy and this information need not be preprinted on the warranty form, but may be added to or stamped on the warranty, if the warrantor elects to meet its financial responsibility obligations under subsection (c) of Section 8-33-5.

(4) Identifies the warrantor, the seller, and the warranty holder.

(5) Sets forth the total purchase price and the terms under which it is to be paid, however, the purchase price is not required to be preprinted on the vehicle protection product warranty and may be negotiated with the consumer at the time of sale.

(6) Sets forth the procedure for making a claim, including a telephone number.

(7) States the existence of a deductible amount, if any.

(8) Specifies the payments or performance to be provided under the warranty including payments for incidental costs, the manner of calculation or determination of payments or performance, and any limitations, exceptions, or exclusions.

(9) Sets forth all of the obligations and duties of the warranty holder including the duty to protect against any further damage to the vehicle, the obligation to notify the warrantor in advance of any repair, or other similar requirements, if any.

(10) Sets forth any terms, restrictions, or conditions governing transferability of the warranty, if any.

(11) Contains a disclosure that reads substantially as follows: “This agreement is a product warranty and is not insurance.”

(b) At the time of sale, the seller or warrantor shall provide one of the following to the purchaser:

(1) A copy of the vehicle protection product warranty.

(2) A receipt or other written evidence of the purchase of the vehicle protection product and a copy of the warranty within 30 days of the date of purchase.

(Act 2006-600, p. 1638, §7.)

§ 8-33-8 Cancellation of Warranty

(a) No vehicle protection product may be sold or offered for sale in this state unless the vehicle protection product warranty clearly states the terms and conditions governing the cancellation of the sale and warranty, if any.

(b) The warrantor may only cancel the warranty if the warranty holder does any of the following:

(1) Fails to pay for the vehicle protection product.

(2) Makes a material misrepresentation to the seller or warrantor.

(3) Commits fraud related to the purchase of the vehicle protection product, registration of the warranty, or a claim made under the warranty.

(4) Substantially breaches the warranty holder’s duties under the warranty.

(c) A warrantor canceling a warranty shall mail written notice of cancellation to the warranty holder at the last address of the warranty holder in the warrantor’s records at least 30 days prior to the effective date of the cancellation. The notice shall state the effective date of the cancellation and the reason for cancellation.

(Act 2006-600, p. 1638, §8.)

§ 8-33-9 Prohibited Acts

(a) Unless licensed as an insurance company, a vehicle protection product warrantor shall not use in its name, contracts, or literature, any of the words “insurance,” “casualty,” “surety,” “mutual,” or any other words descriptive of the insurance, casualty, or surety business or deceptively similar to the name or description of any insurance or surety corporation, or any other vehicle protection product warrantor. A warrantor may use the term “guaranty” or similar word in the warrantor’s name.

(b) A vehicle protection product seller or warrantor may not require as a condition of sale or financing that a retail purchaser of a motor vehicle purchase a vehicle protection product that is not installed on the motor vehicle at the time of sale.

(Act 2006-600, p. 1638, §9.)

§ 8-33-10 Record Keeping Requirements

(a) All vehicle protection product warrantors shall keep accurate accounts, books, and records concerning transactions regulated under this chapter.

(b) A vehicle protection product warrantor’s accounts, books, and records shall include:

(1) Copies of all vehicle protection product warranties.

(2) The name and address of each warranty holder.

(3) The dates, amounts, and descriptions of all receipts, claims, and expenditures.

(c) A vehicle protection product warrantor shall retain all required accounts, books, and records pertaining to each warranty holder for at least two years after the specified period of coverage has expired. A warrantor discontinuing business in this state shall maintain its records until it furnishes the commissioner satisfactory proof that it has discharged all obligations to warranty holders in this state.

(d) Vehicle protection product warrantors shall make all accounts, books, and records concerning transactions regulated under this chapter available to the commissioner for examination.

(Act 2006-600, p. 1638, §10.)

§ 8-33-11 Enforcement Provisions

(a) The commissioner may conduct examinations of warrantors, administrators, or other persons to enforce this chapter and protect warranty holders in this state. Upon request of the commissioner, a warrantor shall make available to the commissioner all accounts, books, and records concerning vehicle protection products sold by the warrantor that are necessary to enable the commissioner to reasonably determine compliance or noncompliance with this chapter.

(b) The commissioner may take action that is necessary or appropriate to enforce this chapter, the commissioner’s rules and orders, and to protect warranty holders in this state. If a warrantor engages in a pattern or practice of conduct that violates this chapter and that the commissioner reasonably believes threatens to render the warrantor insolvent or cause irreparable loss or injury to the property or business of any person or company located in this state, the commissioner may do any of the following:

(1) Issue an order directed to that warrantor to cease and desist from engaging in further acts, practices, or transactions that are causing the conduct.

(2) Issue an order prohibiting that warrantor from selling or offering for sale vehicle protection products in violation of this chapter.

(3) Issue an order imposing a civil penalty on that warrantor.

(4) Issue any combination of the foregoing, as applicable.

(c) Prior to the effective date of any order issued pursuant to subsection (b), the commissioner must provide written notice of the order to the warrantor and the opportunity for a hearing to be held within 10 business days after receipt of the notice, except prior notice and hearing shall not be required if the commissioner reasonably believes that the warrantor has become, or is about to become, insolvent.

(d) A person aggrieved by an order issued under this section may request a hearing before the commissioner. The hearing request shall be filed with the commissioner within 20 days after the date the commissioner’s order is effective, and the commissioner must hold such a hearing within 15 days after receipt of the hearing request.

(e) At the hearing, the burden shall be on the commissioner to show why the order issued pursuant to this section is justified. The provisions of the Alabama Department of Insurance Administrative Code Chapter 482-1-065 shall apply to a hearing request under this section.

(f) The commissioner may bring an action in any court of competent jurisdiction for an injunction or other appropriate relief to enjoin threatened or existing violations of this chapter or of the commissioner’s orders or rules. An action filed under this section also may seek restitution on behalf of persons aggrieved by a violation of this chapter or orders or rules of the commissioner.

(g) A person who is found to have violated this chapter or orders or rules of the commissioner may be ordered to pay to the commissioner a civil penalty in an amount, determined by the commissioner, of not more than five hundred dollars ($500) per violation and not more than ten thousand dollars ($10,000) in the aggregate for all violations of a similar nature. For purposes of this section, violations shall be of a similar nature if the violation consists of the same or similar course of conduct, action, or practice, irrespective of the number of times the conduct, action, or practice that is determined to be a violation of this chapter occurred.

(h) This chapter does not create a separate civil cause of action.

(Act 2006-600, p. 1638, §11.)

§ 8-33-12 Rules and Regulations

The commissioner may adopt such administrative rules consistent with this chapter as are necessary to implement this chapter. Such rules and regulations shall include disclosures for the benefit of the warranty holder, record keeping, and procedures for public complaints. Such rules and regulations shall also include the conditions under which surplus lines insurers may be rejected for the purpose of underwriting vehicle protection product warranty agreements.

(Act 2006-600, p. 1638, §12.)

§ 8-33-13 Applicability

This chapter applies to all vehicle protection products sold or offered for sale on or after January 1, 2007. The failure of any person to comply with this chapter prior to January 1, 2007, shall not be admissible in any court proceeding, administrative proceeding, arbitration, or alternative dispute resolution proceeding and may not otherwise be used to prove that the action of any person or the affected vehicle protection product was unlawful or otherwise improper. The adoption of this chapter does not imply that a vehicle protection product warranty was insurance prior to January 1, 2007. The penalty provisions of this chapter do not apply to any violation of this chapter relating to or in connection with the sale or failure to disclose in a retail installment contract or lease, or contract or agreement that provides for payments under a vehicle protection product warranty as long as the sale of such product, contract, or agreement was otherwise disclosed to the purchaser in writing at the time of the purchase or lease. In the event of a violation for which the penalty provisions of this chapter do not apply, the court shall award actual damages and costs, including reasonable attorney’s fees. Nothing in this section shall be construed to require the application of the penalty provisions where this section is not applicable.

(Act 2006-600, p. 1638, §13.)

§ 8-33-14 Disposition of Funds; Examination Expenses

(a) All fees collected pursuant to this chapter shall be paid into the Insurance Department Fund for the enforcement of this chapter.

(b) Each person being examined by the commissioner in the enforcement of this chapter shall be liable for and pay the expenses of the examination as provided in Section 27-2-25.

(Act 2021-163, §1.)

Chapter 34 Dealers in Gold or Precious Items

§ 8-34-1 Definitions

As used in this chapter, the following terms shall have the following meanings:

(1) DEALER. Any person, corporation, or partnership that engages in the business of purchasing precious items for the purpose of reselling such items in any form. A dealer does not include a manufacturer, retail merchant, pawnbroker licensed by the Alabama State Banking Department, or person in the wholesale business.

(2) LOCAL LAW ENFORCEMENT AGENCY. The chief of police for businesses located within the jurisdiction of a municipality and the county sheriff for businesses located outside the jurisdiction of a municipality.

(3) PERMANENT PLACE OF BUSINESS. A fixed premises either owned by the dealer or leased by the dealer for at least one year.

(4) PRECIOUS ITEM. Any of the following:

a. An article made in whole or in part of gold, silver, or platinum.

b. Precious or semiprecious stones or pearls whether mounted or unmounted.

(5) PURCHASE. The acquisition of a precious item or items for a consideration of cash, goods, or another precious item.

(Act 2010-732, p. 1843, §1.)

§ 8-34-2 License Required

(a) Each dealer engaged in the business of purchasing precious items for the purpose of reselling the items shall purchase a state license in the amount of one hundred dollars ($100) and a county license in the amount of fifty dollars ($50) under Article 1, Chapter 12, Title 40. The dealer shall purchase one state license per year and shall annually purchase the county license in each county where he or she conducts business. No dealer shall operate in the State of Alabama unless he or she first obtains the business license required herein to engage in the business of purchasing precious items.

(b) A dealer may only operate from the permanent place of business listed on the business license. The dealer shall forward a copy of each state and county license to the local law enforcement agency within five days of receipt.

(Act 2010-732, p. 1843, §2.)

§ 8-34-3 Documentation of Items and Identification of Sellers; Weekly Report to Law Enforcement Agency

(a) Each dealer shall keep for six months from the date of purchase of a precious item and make available on request of a local law enforcement agency:

(1) The name, current address, date of birth, and signature of the person from whom the dealer purchased the item.

(2) A description of the person, including height, weight, race, complexion, and hair color.

(3) A valid identification card number as outlined in subsection (b).

(4) A list describing the items purchased from that person.

(b) (1) Before making a purchase, a dealer shall require the person from whom he or she is purchasing to identify himself or herself with a valid driver’s license, a non-driver’s identification card, armed services identification card, or other valid photo identification sufficient to obtain the information required pursuant to subsection (a).

(2) The method of photo identification shall contain a traceable serial number to be recorded by the dealer.

A list of the acceptable forms of photo identification shall be provided by each local law enforcement agency.

(c) Each dealer, at least once each week in which he or she makes a purchase, shall make out and deliver to the local law enforcement agency a true, complete, and legible list of all items purchased during the period since the last report. The dealer shall use local law enforcement agency forms to meet the requirements of this subsection if such forms are issued by the local law enforcement agency. The list shall include:

(1) The brand name and serial number, if any, of the item or items purchased.

(2) An accurate description of each item sufficient to enable the law enforcement agency to identify the item.

(3) The date and time when the item was received.

(4) The amount paid for each item.

(5) All information pursuant to subsection (a).

(Act 2010-732, p. 1843, §3.)

§ 8-34-4 Retention of Items; Payment; Purchase from Persons Under 18 Years of Age

(a) Any item purchased shall be held in the same shape and form as receipted for in the dealer’s custody for 15 business days after delivering the list to the local law enforcement agency as required under this chapter.

(b) Payment to the seller shall be by check only, made payable to a named actual intended seller.

(c) It is presumptive evidence of intent to violate this chapter if the items purchased are not listed or fail to agree with the description contained in the required list.

(d) On notification by a law enforcement agency or district attorney’s office that the items purchased are the fruits of a crime, the dealer may not dispose of those items.

(e) A dealer may not purchase items from any person under 18 years of age unless the person is accompanied by a parent or guardian who shall submit identification as required under this chapter.

(Act 2010-732, p. 1843, §4.)

§ 8-34-5 Display of Chapter

Each dealer shall prominently display a copy of this chapter in a conspicuous place on the premises of the business.

(Act 2010-732, p. 1843, §5.)

§ 8-34-6 Violations

A person who violates this chapter is guilty of a Class B misdemeanor.

(Act 2010-732, p. 1843, §6.)

§ 8-34-7 Application

This chapter does not apply to any person who purchases precious items from a retail merchant, pawnbroker licensed by the Alabama State Banking Department, manufacturer, or wholesale dealer.

(Act 2010-732, p. 1843, §7.)

Chapter 35 Consumer Credit Report Security Freeze

§ 8-35-1 Definitions

As used in this chapter, the following terms shall have the following meanings:

(1) CONSUMER. A natural person residing in this state.

(2) CONSUMER CREDIT REPORT. A consumer report, as defined in 15 U.S.C. §1681a(d), that a consumer reporting agency furnishes to a person which it has reason to believe intends to use the information as a factor in establishing the consumer’s eligibility for credit to be used primarily for personal, family, or household purposes.

(3) CONSUMER CREDIT REPORTING AGENCY. Any person who, for monetary fees, dues, or on a cooperative nonprofit basis, regularly engages in whole or in part in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing consumer credit reports to third parties.

(4) NORMAL BUSINESS HOURS. Any day between the hours of 8:00 A.M. and 9:30 P.M., Central Standard Time.

(5) PERSON. Any individual, partnership, corporation, trust, estate, cooperative, association, government or governmental subdivision or agency, or other entity.

(6) PROPER IDENTIFICATION. Information generally deemed sufficient to identify a person for consumer reporting agency purposes under 15 U.S.C. §1681 et seq.

(7) SECURITY FREEZE. A restriction placed on a consumer credit report at the request of the consumer that prohibits a consumer credit reporting agency from releasing the consumer’s consumer credit report for a purpose relating to the extension of credit without the express authorization of the consumer.

(Act 2012-500, p. 1470, §1.)

§ 8-35-2 Security Freeze on Credit Report

(a) A consumer may place a security freeze on the consumer’s credit report by making a request in writing by certified mail to a consumer credit reporting agency. No later than August 31, 2012, a consumer credit reporting agency shall make available to consumers an Internet based method of requesting a security freeze and a toll-free telephone number for consumers to use to place a security freeze, temporarily lift a security freeze, or completely remove a security freeze. A security freeze shall prohibit, subject to exceptions in subsection (m), the consumer credit reporting agency from releasing the consumer’s credit report or credit score without the prior express authorization of the consumer as provided in subsection (d) or (e). Nothing in this subsection shall prevent a consumer credit reporting agency from advising a third party that a security freeze is in effect with respect to the consumer’s credit report.

(b) A consumer credit reporting agency shall place a security freeze on a consumer’s credit report no later than three business days after receiving the consumer’s written request sent by certified mail.

(c) The consumer credit reporting agency shall send a written confirmation of the security freeze to the consumer within 10 business days of placing the security freeze and at the same time shall provide the consumer with a unique personal identification number or password, other than the consumer’s Social Security number, to be used by the consumer when providing authorization for the release of the consumer’s credit report for a specific period of time.

(d) If the consumer wishes to allow the consumer’s credit report to be accessed for a specific period of time while a security freeze is in place, the consumer shall contact the consumer credit reporting agency through the contact method established by the consumer credit reporting agency, request that the security freeze be temporarily lifted, and provide all of the following:

(1) Proper identification.

(2) The unique personal identification number or password provided by the consumer credit reporting agency pursuant to subsection (c).

(3) The proper information regarding the time period for which the report shall be available to users of the consumer credit report.

(4) The proper payment as may be required by the consumer credit reporting agency.

(e) A consumer credit reporting agency shall develop procedures involving the use of telephone, the Internet, or other electronic media to receive and process a request from a consumer to temporarily lift a security freeze on a consumer credit report pursuant to subsection (d).

(f) A consumer credit reporting agency that receives a request from a consumer to temporarily lift a security freeze on a consumer credit report pursuant to subsection (d) or (e) shall comply with the request as follows:

(1) No later than three business days after receiving a written request.

(2) Within 15 minutes after the request and payment are received by telephone or electronically by the contact method chosen by the consumer reporting agency during normal business hours and the request includes the consumer’s proper identification, correct personal identification number or password, and the proper payment as may be required by the consumer credit reporting agency.

(g) A consumer reporting agency need not temporarily lift a security freeze within 15 minutes, as specified in subdivision (2) of subsection (f), if either of the following occurs:

(1) The consumer fails to satisfy the requirements of subsection (d).

(2) The consumer credit reporting agency’s ability to temporarily lift the security freeze within 15 minutes is prevented by the following:

a. An act of God, including earthquakes, hurricanes, storms, or similar natural disaster or phenomenon, or fire.

b. Unauthorized or illegal acts by a third party, including terrorism, sabotage, riot, vandalism, labor strikes or disputes disrupting operations, or similar occurrence.

c. Operational interruption, including electrical failure, unanticipated delay in equipment or replacement part delivery, computer hardware or software failures inhibiting response time, or similar disruption.

d. Governmental action, including emergency orders or regulations, judicial or law enforcement action, or similar directives.

e. Regularly scheduled maintenance or updates, during other than normal business hours, to the consumer reporting agency’s systems.

f. Commercially reasonable maintenance of, or repair to, the consumer reporting agency’s systems that is unexpected or unscheduled.

g. Receipt of a request outside of normal business hours.

(h) A consumer credit reporting agency shall only remove or temporarily lift a security freeze placed on a consumer’s credit report upon any of the following circumstances:

(1) Upon the consumer’s request, in compliance with the requirements of this section.

(2) If the consumer’s credit report was frozen due to a material misrepresentation of fact by the consumer. If a consumer credit reporting agency intends to remove a security freeze upon a consumer’s credit report pursuant to this subdivision, the consumer credit reporting agency shall notify the consumer in writing prior to removing the security freeze on the consumer’s credit report.

(i) If a third party requests access to a consumer credit report on which a security freeze is in effect and this request is in connection with an application for credit or any other use related to the extension of credit and the consumer does not allow the consumer’s credit report to be accessed for that specific period of time, the third party may treat the application as incomplete.

(j) If a consumer requests a security freeze pursuant to this section, the consumer credit reporting agency shall disclose to the consumer the process of placing and temporarily lifting a security freeze and the process for allowing access to information from the consumer’s credit report for a specific period of time while the security freeze is in place.

(k) A security freeze shall remain in place until the consumer requests that the security freeze be removed. A consumer credit reporting agency shall remove a security freeze within three business days of receiving a request for removal from the consumer. The consumer shall provide all of the following:

(1) Proper identification.

(2) The unique personal identification number or password provided by the consumer credit reporting agency pursuant to subsection (c).

(3) The proper fee as may be required by the consumer credit reporting agency.

(l) A consumer credit reporting agency shall require proper identification of the person making a request to place, temporarily lift, or remove a security freeze.

(m) This section shall not apply to the use of a consumer report by any of the following persons or entities. The persons and entities exempt from this section include but are not limited to:

(1) A person, or the person’s subsidiary, affiliate, agent, subcontractor, or assignee with whom the consumer has, or prior to assignment had, an account, contract, or debtor-creditor relationship for the purposes of reviewing the active account or collecting the financial obligation owing for the account, contract, or debt.

(2) A subsidiary, affiliate, agent, assignee, or prospective assignee of a person to whom access has been granted under subsection (d) for purposes of facilitating the extension of credit or other permissible use.

(3) Any person acting pursuant to a court order, warrant, or subpoena.

(4) A state or local agency, or its agents or assigns, which administers a program for establishing and enforcing child support obligations.

(5) A state or local agency, or its agents or assigns, acting to investigate fraud, including Medicaid fraud; acting to investigate or collect delinquent taxes or assessments, including interest, penalties, and unpaid court orders; or acting to fulfill any of its other statutory responsibilities.

(6) A federal, state, or local governmental entity, including a law enforcement agency, court, or its agents or assigns.

(7) Any person for the use of a credit report for purposes permitted under 15 U.S.C. §1681b(c).

(8) Any person for the sole purpose of providing a credit file monitoring subscription service to which the consumer has subscribed.

(9) Any person for the purpose of providing a consumer with a copy of the consumer’s credit report or credit score upon the consumer’s request.

(10) Any depository financial institution for checking, savings, and investment accounts.

(11) Any person or entity for insurance purposes, including use in setting or adjusting a rate, adjusting a claim, or underwriting.

(n) If a security freeze is in place, a consumer credit reporting agency shall not change any of the following official information in a credit report without sending a written confirmation of the change to the consumer within 30 days of the change being posted to the consumer’s file: Name, date of birth, Social Security number, and address. Written confirmation shall not be required for technical modifications of a consumer’s official information, including name and street abbreviations, complete spellings, or transposition of numbers or letters. In the case of an address change, the written confirmation shall be sent to both the new address and the former address.

(o) The following persons shall not be required to place a security freeze in a consumer credit report pursuant to this section, provided, however, that any person not required to place a security freeze on a consumer credit report under the provisions of subdivision (3) shall be subject to any security freeze placed on a consumer credit report by another consumer credit reporting agency from which it obtains information:

(1) A check services or fraud prevention services company, including reports on incidents of fraud, or authorizations for the purpose of approving or processing negotiable instruments, electronic funds transfers, or similar methods of payment.

(2) A deposit account information service company which issues reports regarding account closures due to fraud, substantial overdrafts, automated teller machine abuse, or other similar negative information regarding a consumer to inquiring banks or other financial institutions for use only in reviewing a consumer request for a deposit account at the inquiring bank or financial institution.

(3) Resellers of consumer credit report information that assemble and merge information contained in a database of one or more consumer credit reporting agencies and do not maintain a permanent database of consumer credit information from which new consumer credit reports are produced.

(4) A consumer credit reporting agency’s database or file which consists of information concerning, and used for, one or more of the following:

a. Criminal record information.

b. Fraud prevention or detection.

c. Personal claim loss history information.

d. Employment, tenant, or individual background screening.

(p) This section shall not prevent a consumer credit reporting agency from charging a fee of no more than ten dollars ($10) to a consumer for each security freeze placement, any permanent removal of the security freeze, or any temporary lifting of the security freeze for a period of time. A consumer credit reporting agency shall not charge a person age 65 years or over for the placement of a security freeze. A consumer credit reporting agency shall not charge any fee to a victim of identity theft who has submitted a copy of a valid investigative or incident report or complaint with a law enforcement agency about the unlawful use of the victim’s identifying information by another person that was filed with the law enforcement agency no more than 90 days prior to the consumer’s request for a security freeze. A consumer credit reporting agency may charge a fee of no more than five dollars ($5) to a consumer for each replacement of a unique personal identification number or password.

(q) A person that violates this section may be fined not more than one hundred dollars ($100) for a violation concerning a specific consumer.

(Act 2012-500, p. 1470, §2.)

§ 8-35-3 Notice of Rights

At any time that a consumer is required to receive a summary of rights required by 15 U.S.C. §1681g(d) of the federal Fair Credit Reporting Act, the consumer shall also be provided with the following notice:

“Alabama Consumers Have the Right to Obtain a Security Freeze. You have a right to place a security freeze on your credit report, which will prohibit a consumer reporting agency from releasing information in your credit report without your express authorization. A security freeze must be requested in writing by certified mail or by electronic means as provided by a consumer reporting agency. The security freeze is designed to prevent credit, loans, and services from being approved in your name without your consent. If you are actively seeking a new credit, loan, utility, telephone, or insurance account, you should understand that the procedures involved in lifting a security freeze may slow your applications for credit. You should plan ahead and lift a freeze in advance of actually applying for new credit. When you place a security freeze on your credit report, you will be provided a personal identification number or password to use if you choose to remove the freeze on your credit report or authorize the release of your credit report for a period of time after the freeze is in place.

“To provide that authorization you must contact the consumer reporting agency and provide all of the following:

”(1) Your personal identification number or password.

”(2) Proper identification to verify your identity.

”(3) The proper information regarding the period of time for which the report shall be available. A consumer reporting agency must authorize the release of your credit report no later than 15 minutes after receiving the above information if the request is by electronic means or by telephone, or no later than three business days when a written request is submitted.

“A security freeze does not apply to a person or entity, or its affiliates or collection agencies acting on behalf of the person or entity, with which you have an existing account, that requests information in your credit report for the purposes of reviewing or collecting the account. Reviewing the account includes activities related to account maintenance. Unless you are a victim of identity theft with a police report or other official document acceptable to a consumer reporting agency to verify the crime, or you are 65 years of age or older, a consumer reporting agency has the right to charge you a fee of no more than ten dollars ($10) to place a freeze on your credit report.”

(Act 2012-500, p. 1470, §3.)

Chapter 36 Residential Roofing Controls

§ 8-36-1 Definitions

As used in this chapter, the following terms shall have the following meanings:

(1) RESIDENTIAL REAL ESTATE. A new or existing building constructed for habitation by one to four families, including detached garages.

(2) RESIDENTIAL ROOFING CONTRACTOR. A person or entity in the business of contracting or offering to contract with an owner or possessor of residential real estate to repair or replace roof systems.

(3) ROOF SYSTEM. A roof covering, roof sheathing, roof weatherproofing, roof framing, roof ventilation system, and insulation.

(Act 2012-519, p. 1541, §1.)

§ 8-36-2 Cancellation of Residential Roofing Contract; Notice of Cancellation; Payments

(a) A person who has entered into a written contract with a residential roofing contractor to provide goods or services to be paid from the proceeds of a property and casualty insurance policy may cancel the contract prior to midnight on the fifth business day if the insured receives written notice from the insurer that all or any part of the claim or contract is not a covered loss under the insurance policy or that the covered claim will not be sufficient to cover the amount of the contract. Cancellation shall be evidenced by the insured giving written notice of cancellation to the residential roofing contractor at the address stated in the contract. Notice of cancellation, if given by mail, shall be effective upon deposit into the United States mail, postage prepaid and properly addressed to the residential roofing contractor and, if given by electronic mail, shall be effective if sent to the electronic mail address stated in the contract. Notice of cancellation need not take a particular form and shall be sufficient if it indicates, by any form of written expression, the intention of the insured not to be bound by the contract.

(b) Before entering a contract as provided in subsection (a), the residential roofing contractor shall do all of the following:

(1) Furnish the insured a statement in boldface type of a minimum size of 10 points, in substantially the following form:

“You may cancel this contract at any time before midnight on the fifth business day after you have received written notification from your insurer that all or any part of the claim or contract is not a covered loss under the insurance policy or that the covered claim will not be sufficient to cover the amount of the contract. This right to cancel is in addition to any other rights of cancellation which may be found in state or federal law or regulation. See attached notice of cancellation form for an explanation of this right.”

(2) Furnish each insured a fully completed form in duplicate, captioned “NOTICE OF CANCELLATION,” which shall be attached to the contract but easily detachable, and which shall contain in boldface type of a minimum size of 10 points the following statement:

“NOTICE OF CANCELLATION”

“If you are notified by your insurer that all or any part of the claim or contract is not a covered loss under the insurance policy, or that the covered claim will not be sufficient to cover the amount of the contract, you may cancel the contract by mailing, electronic mailing, or delivering a signed and dated copy of this cancellation notice or any other written notice to [name of contractor] at [address of contractor’s place of business], at any time prior to midnight on the fifth business day after you have received such notice from your insurer.

“I HEREBY CANCEL THIS TRANSACTION

---

“Date

---

“Insured’s Signature”

(c) In circumstances in which payment may be made from the proceeds of a property and casualty insurance policy, a residential roofing contractor shall not require any payments from an insured until the five-day cancellation period has expired. If, however, the residential roofing contractor has performed any emergency services, acknowledged by the insured in writing to be necessary to prevent damage to the premises, the residential roofing contractor shall be entitled to collect the amount due for the emergency services at the time they are rendered. Any provision in a contract as provided in subsection (a) that requires the payment of any fee for anything except emergency services shall not be enforceable against any insured who has cancelled a contract pursuant to this section. A residential roofing contractor shall not represent or negotiate, or offer or advertise to represent or negotiate, on behalf of an owner or possessor of residential real estate on any insurance claim in connection with the repair or replacement of roof systems.

(Act 2012-519, p. 1541, §2; Act 2019-99, §1.)

Chapter 37 Guaranteed Asset Protection Waivers

§ 8-37-1 Purpose; Applicability

(a) The purpose of this chapter is to define guaranteed asset protection waivers (GAP waivers) and to provide that GAP waivers may be offered within this state.

(b) This chapter does not apply to either of the following:

(1) An insurance policy offered by an insurer under the insurance laws of this state.

(2) A debt cancellation or debt suspension contract being offered by a federally regulated financial institution operating under 12 CFR Part 37 or a credit union operating under 12 CFR Part 721 or other federal law; or a debt cancellation or debt suspension contract being offered by a state chartered bank or credit union. Debt cancellation and debt suspension contracts being offered by any of these federal or state regulated financial institutions are not insurance and are exempt from the insurance laws of this state.

(c) Guaranteed asset protection waivers governed under this chapter are not insurance and are exempt from the insurance laws of this state. Persons marketing, selling, or offering to sell guaranteed asset protection waivers to borrowers that comply with this chapter are exempt from insurance licensing and insurance regulation requirements of this state.

(d) This chapter applies only to GAP waivers for financing of motor vehicles as defined in this chapter. This chapter does not affect the validity or enforcement of other asset protection waivers, debt cancellation contracts, or debt suspension agreements.

(Act 2017-392, §1.)

§ 8-37-2 Definitions

THIS SECTION WAS AMENDED BY ACT 2022-179 IN THE 2022 REGULAR SESSION, EFFECTIVE JANUARY 1, 2023. TO SEE THE AMENDED VERSION, SEE THE VERSION LABELED PENDING.

For the purposes of this chapter, the following words have the following meanings:

(1) ADMINISTRATOR. A person, other than an insurer or creditor, that performs administrative or operational functions pursuant to guaranteed asset protection waiver programs.

(2) BORROWER. A debtor, retail buyer or lessee, under a finance agreement.

(3) CREDITOR means any of the following:

a. The lender in a loan or credit transaction.

b. The lessor in a lease transaction.

c. Any retail seller of motor vehicles in a retail installment transaction.

d. The seller in commercial retail installment transactions.

e. The assignees of any of the foregoing to whom the credit or lease obligation is payable.

(4) FINANCE AGREEMENT. A loan, lease, or retail installment sales contract for the purchase or lease of a motor vehicle.

(5) FREE LOOK PERIOD. The period of time from the effective date of the GAP waiver until the date the borrower may cancel the GAP waiver without penalty, fees, or costs to the borrower. This period of time shall not be shorter than 30 days.

(6) GUARANTEED ASSET PROTECTION WAIVER or GAP WAIVER. A contractual agreement in which a creditor agrees for a separate charge to cancel or waive all or part of amounts due on a borrower’s finance agreement in the event of a total physical damage loss or unrecovered theft of the motor vehicle, which agreement shall be part of, or a separate addendum to, the finance agreement.

(7) INSURER. An insurance company licensed, registered, or otherwise authorized to do business under the insurance laws of this state.

(8) MOTOR VEHICLE. Self-propelled or towed vehicles designed for personal or commercial use, including but not limited to automobiles, trucks, motorcycles, recreational vehicles, all terrain vehicles, snowmobiles, campers, boats, personal watercraft, and motorcycle, and boat, camper and personal watercraft trailers.

(9) PERSON. An individual, company, association, organization, partnership, business trust, corporation, and every form of legal entity.

(Act 2017-392, §1.)

§ 8-37-3 Gap Waivers Authorized; Charges; Insurance; Creditor Requirements

(a) GAP waivers may be offered, sold, or provided to borrowers in this state under this chapter.

(b) GAP waivers, at the option of the creditor that offers the GAP waiver, may be sold for a single payment or may be offered with a monthly or periodic payment option.

(c) Notwithstanding any other provision of law and subject to Section 8-37-7, any cost to the borrower for a GAP waiver entered into in compliance with The Truth in Lending Act, 15 U.S.C. §1601 et seq., and its implementing regulations, as they may be amended from time to time, shall be separately stated and is not to be considered a finance charge or interest. If the charge for a GAP waiver is financed, the charge shall be separately itemized on the finance agreement.

(d) A retail seller shall insure its GAP waiver obligations under a contractual liability or other insurance policy issued by an insurer. A creditor, other than a retail seller, may insure its GAP waiver obligations under a contractual liability policy or similar policy issued by an insurer. Any insurance policy may be directly obtained by a creditor, retail seller, or may be procured by an administrator to cover a creditor’s or retail seller’s obligations under the GAP waiver. However retail sellers who do not assign their finance agreements or retail sellers that are lessors of motor vehicles are not required to insure obligations related to GAP waivers on the sold or leased vehicles.

(e) A GAP waiver remains a part of the finance agreement upon the assignment, sale, or transfer of the finance agreement by the creditor. The creditor, administrator, or other designated party shall maintain for three years after the maturity date of the finance agreement a copy of or electronic details of each GAP waiver sold regardless of the method of payment and the creditor, administrator, or other designated party shall provide copies of or electronic details of the contracts to the Superintendent of Banks upon reasonable advance written notice.

(f) Neither the extension of credit, any term of credit, nor the term of the related motor vehicle sale or lease may be conditioned upon the purchase of a GAP waiver.

(g) Any creditor that offers a GAP waiver shall report the sale of, and forward funds received on all waivers to the designated party, if any, as prescribed in any applicable administrative services agreement, contractual liability policy, other insurance policy, or other specified program documents.

(h) Funds received or held by a creditor or administrator and belonging to an insurer, creditor, or administrator, pursuant to the terms of a written agreement shall be held by the creditor or administrator in a fiduciary capacity.

(Act 2017-392, §1.)

§ 8-37-4 Reimbursements; Coverage; Effect of Cancellation or Termination

(a) A contractual liability or other insurance policy insuring a GAP waiver shall state the obligation of the insurer to reimburse or pay to the creditor any sums the creditor is legally obligated to waive under the GAP waiver issued by the creditor and purchased or held by the borrower.

(b) Coverage under a contractual liability or other insurance policy insuring a GAP waiver shall also cover any subsequent assignee upon the assignment, sale, or transfer of the finance agreement.

(c) Coverage under a contractual liability or other insurance policy insuring a GAP waiver shall remain in effect unless cancelled or terminated in compliance with applicable insurance laws of this state.

(d) The cancellation or termination of a contractual liability or other insurance policy shall not reduce the insurer’s responsibility for GAP waivers issued by the creditor prior to the date of cancellation or termination and for which premium has been received by the insurer.

(Act 2017-392, §1.)

§ 8-37-5 Disclosure Requirements

Subject to Section 8-37-7, a creditor that offers a GAP waiver shall disclose, as applicable, in writing and in clear, understandable language that is easy to read, all of the following:

(1) The name and address of the initial creditor and the borrower at the time of sale and the identity of any administrator if different from the creditor.

(2) The purchase price and the terms of the GAP waiver, including without limitation, the requirements for protection, conditions, or exclusions associated with the GAP waiver.

(3) That the borrower may cancel the GAP waiver within a Free Look Period as specified in the waiver, and will be entitled to a full refund of the purchase price, so long as no benefits have been provided. If cancelled after the Free Look Period and no benefits have been provided, the borrower shall receive a pro rata refund less a cancellation fee no greater than fifty dollars ($50) in accordance with the terms of the waiver.

(4) The procedure the borrower is required to follow in order to obtain GAP waiver benefits under the terms and conditions of the waiver, including a telephone number and address where the borrower may apply for waiver benefits.

(5) The procedures for cancelling the GAP waiver and requesting any refund due pursuant to Section 8-37-6.

(6) That neither the extension of credit, the terms of the credit, nor the terms of the related motor vehicle sale or lease, may be conditioned upon the purchase of the GAP waiver.

(7) That the cost of the GAP waiver is not regulated and that the borrower should determine whether the cost of the GAP waiver is reasonable in relation to the protection afforded by the GAP waiver.

(Act 2017-392, §1.)

§ 8-37-6 Cancellation of Gap Waiver Agreements

(a) Guaranteed asset protection waiver agreements shall be cancellable. GAP waivers shall provide that if a borrower cancels a waiver within the Free Look Period, the creditor, administrator, or other authorized party shall provide the borrower a full refund of the purchase price of the GAP waiver, provided no benefits have been provided. In the event a borrower cancels the waiver after the Free Look Period and no benefits have been provided, the creditor, administrator, or other authorized party shall provide the borrower a pro rata refund of the purchase price, less any cancellation fee no greater than fifty dollars ($50) in accordance with the terms of the waiver.

(b) In the event of cancellation of the GAP waiver due to early termination of the finance agreement, the creditor shall provide, or cause the administrator or retail seller to provide, within 60 days of termination, any refund due to a borrower without requiring the borrower to request cancellation of the waiver.

(c) Any cancellation refund under subsection (a) or (b) may be applied by the creditor as a reduction of the amount owed under the finance agreement unless the borrower can show that the finance agreement has been paid in full.

(Act 2017-392, §1.)

§ 8-37-7 Lease or Retail Installments Sales

Subsection (c) of Section 8-37-3 and Sections 8-37-5 and 8-37-8 of this chapter are not applicable to a GAP waiver offered in connection with a lease or retail installment sale associated with a commercial transaction.

(Act 2017-392, §1.)

§ 8-37-8 Enforcement

(a) The Superintendent of Banks may take action which is necessary or appropriate to enforce the provisions of this chapter and to protect GAP waiver holders in this state. After proper notice and opportunity for hearing, the superintendent may do both of the following:

(1) Order the creditor, administrator, or any other person not in compliance with this chapter to cease and desist from further GAP waiver-related operations which are in violation of this chapter.

(2) Impose a penalty of not more than five hundred dollars ($500) per violation and no more than ten thousand dollars ($10,000) in the aggregate for all violations of similar nature. For purposes of this chapter, a violation shall be considered to be of a similar nature if the violation consists of the same or similar course of conduct, action, or practice, irrespective of the number of times the action, conduct, or practice which is determined to be a violation of the chapter occurred.

(b) If requested by a retail seller, the Superintendent of Banks may determine that the insurance policy required by subsection (d) of Section 8-37-3 is not required for a retail seller that does not assign any of its finance agreements to any entity other than an affiliate and if the affiliated assignee agrees that the insurance policy is waived and the finance agreements will not be further assigned. The superintendent may require the evidence and assurances that the superintendent determines is needed to make that determination.

(Act 2017-392, §1.)

§ 8-37-9 Legislative Findings

The Legislature finds that guaranteed asset protection waivers are not insurance. All guaranteed asset protection waivers issued prior to and after January 1, 2018, shall not be construed as insurance.

(Act 2017-392, §1.)

§ 8-37-10 Applicability

Creditors and other persons are not required to comply with this chapter for any GAP waiver entered into prior to January 1, 2018.

(Act 2017-392, §2.)

Chapter 37A Motor Vehicle Value Protection Agreements

§ 8-37A-1 Purpose and Application of Chapter

(a) The purpose of this chapter is to define motor vehicle value protection agreements and to authorize the agreements to be offered within this state.

(b) This chapter does not apply to either of the following:

(1) An insurance policy offered by an insurer under the insurance laws of this state.

(2) A debt cancellation or debt suspension contract being offered by a federally regulated financial institution operating under 12 C.F.R. Part 37 or a credit union operating under 12 C.F.R. Part 721 or other federal law; or a debt cancellation or debt suspension contract being offered by a state chartered bank or credit union.

(c) Except as provided in this chapter, motor vehicle value protection agreements governed under this chapter are not insurance and are exempt from the insurance laws of this state. Persons marketing, selling, or offering to sell motor vehicle value protection agreements to borrowers that comply with this chapter are exempt from insurance licensing and insurance regulation requirements of this state.

(d) This chapter applies only to motor vehicle value protection agreements for financing of motor vehicles as defined in this chapter. This chapter does not affect the validity or enforcement of other asset protection waivers, debt cancellation contracts, or debt suspension agreements.

(Act 2022-179, §2.)

§ 8-37A-2 Definitions

For the purposes of this chapter, the following words have the following meanings:

(1) ADMINISTRATOR. The person who may be responsible for the administrative or operational function of motor vehicle value protection agreements including, but not limited to, the adjudication of claims or benefit requests by contract holders.

(2) CONTRACT HOLDER. A person who is the purchaser or holder of a motor vehicle value protection agreement.

(3) FREE LOOK PERIOD. The period of time not less than 30 days from the effective date of a motor vehicle value protection agreement until the date the borrower may cancel the agreement without penalty, fees, or costs to the borrower.

(4) MOTOR VEHICLE VALUE PROTECTION AGREEMENT. A contractual agreement that provides a benefit towards either the reduction of all or part of the contract holder’s current finance agreement deficiency balance, or towards the purchase or lease of a replacement motor vehicle or motor vehicle services, based on the occurrence of an adverse event to the motor vehicle including, but not limited to, loss, theft, damage, obsolescence, diminished value, or depreciation. A motor vehicle value protection agreement does not include a GAP waiver, as defined in Chapter 37 of this title, but may include similar agreements including, but not limited to, trade-in-credit agreements, diminished value agreements, or depreciation benefit agreements.

(5) PROVIDER. A person that is obligated to provide a benefit under a motor vehicle value protection agreement.

(Act 2022-179, §2.)

§ 8-37A-3 Motor Vehicle Value Protection Agreements; Administration; Agreement to Be Provided

(a) A motor vehicle value protection agreement may be offered, sold, or provided to a borrower or lessor under this chapter.

(b) A provider may use an administrator or other designee to be responsible for all or part of the administration of motor vehicle value protection agreements in compliance with this chapter. A provider may act as an administrator or retain the services of a third-party administrator.

(c) A motor vehicle value protection agreement shall not be sold unless the contract holder is provided a copy of the agreement.

(Act 2022-179, §2.)

§ 8-37A-4 Provider Requirements

In order to assure the faithful performance of the obligations of a provider to its contract holders, the provider shall comply with one of the following:

(1)a. Insure all of its motor vehicle value protection agreements under an insurance policy that pays or reimburses the obligations of a provider under any motor vehicle value protection agreements of the provider in the event the provider fails to perform its obligations. The insurance policy shall be issued by an insurer licensed, registered, or otherwise authorized to do business in this state at the time the policy is filed with the Commissioner of Insurance and continuously thereafter, that meets one of the following criteria:

1. Has a surplus as to policyholders and paid-in capital of at least fifteen million dollars ($15,000,000).

2. Has a surplus as to policyholders and paid-in capital of not less than ten million dollars ($10,000,000), and evidence to the satisfaction of the commissioner that the company maintains a ratio of net written premiums, wherever written, to surplus as to policyholders and paid-in capital of not greater than three to one.

b. In addition, the insurer shall annually file with the commissioner copies of the insurer’s audited financial statements, its NAIC Annual Statement, and the actuarial certification required by and filed in the insurer’s state of domicile.

(2)a. Maintain a funded reserve account for its obligations under its contracts issued and outstanding in this state. The reserves shall not be less than 40 percent of gross consideration received, less claims paid, on the sale of the motor vehicle value protection agreement for all in-force contracts. The reserve account shall be subject to examination and review by the Superintendent of Banks; and

b. Place in trust with the superintendent a financial security deposit, having a value of not less than five percent of the gross consideration received, less claims paid, on the sale of the motor vehicle value protection agreements for all agreements issued and in force, but not less than twenty-five thousand dollars ($25,000) consisting of one of the following:

1. A surety bond issued by an authorized surety.

2. Securities of the type eligible for deposit by authorized insurers in this state.

3. Cash.

4. A letter of credit issued by a qualified financial institution.

5. Another form of security prescribed by regulations issued by the superintendent.

(3)a. Maintain, or together with its parent company maintain, a net worth or stockholders’ equity of one hundred million dollars ($100,000,000); and

b. Upon request, provide the Superintendent of Banks with a copy of the provider’s or the provider’s parent company’s most recent Form 10-K or Form 20-F filed with the Securities and Exchange Commission (SEC) within the last calendar year, or if the company does not file with the SEC, a copy of the company’s audited financial statements that shows a net worth of the provider or its parent company of at least one hundred million dollars ($100,000,000). If the provider’s parent company’s Form 10-K, Form 20-F, or financial statements are filed to meet the provider’s financial security requirement, then the parent company shall agree to guarantee the obligations of the provider relating to motor vehicle value protection agreements sold by the provider in this state.

(Act 2022-179, §2; Act 2023-325, §1.)

§ 8-37A-5 Written Disclosures

(a) A motor vehicle value protection agreement shall disclose in writing and in clear, understandable language that is easy to read all of the following:

(1) The name and address of the provider, contract holder, and administrator, if any.

(2) The terms of the agreement including, without limitation, the purchase price to be paid by the contract holder, if any, and the requirements for eligibility, conditions of coverage, or exclusions.

(3) A provision that the agreement may be cancelled by the contract holder within a free look period as specified in the agreement, and that in the event the contract holder will be entitled to a full refund of the purchase price paid by the contract holder, if any, so long as no benefits have been provided.

(4) The procedure the contract holder must follow, if any, to obtain a benefit under the terms and conditions of the agreement including, if applicable, a telephone number or website and address where the contract holder may apply for a benefit.

(5) A provision indicating whether or not the agreement is cancellable after the free look period and the conditions under which it may be cancelled, including the procedures for requesting any refund of the unearned purchase price paid by the contract holder.

(6) In the event of cancellation, the methodology for calculating any refund of the unearned purchase price of the agreement due.

(7) A provision specifying that the extension of credit, the terms of the credit, or the terms of the related motor vehicle sale or lease, may not be conditioned upon the purchase of the agreement.

(8) The terms, restrictions, or conditions governing cancellation of the agreement prior to the termination or expiration date of the agreement by either the provider or the contract holder.

(b) The provider shall mail a written notice to the contract holder at the last known address of the contract holder contained in the records of the provider at least five days prior to cancellation by the provider. Prior notice is not required if the reason for cancellation is nonpayment of the provider fee, a material misrepresentation by the contract holder to the provider or administrator, or a substantial breach of duties by the contract holder relating to the covered product or its use. The notice shall state the effective date of the cancellation and the reason for the cancellation. If an agreement is cancelled by the provider for a reason other than nonpayment of the provider fee, the provider shall refund to the contract holder all of the unearned pro rata provider fee paid by the contract holder, if any. If coverage under the agreement continues after a claim, any refund may deduct claims paid and a reasonable administrative fee not to exceed seventy-five dollars ($75).

(c) This section shall not apply to commercial transactions.

(Act 2022-179, §2.)

§ 8-37A-6 Enforcement of Chapter

(a) The Superintendent of Banks may take action that is necessary or appropriate to enforce this chapter and to protect motor vehicle value protection contract holders in this state. After notice and a hearing, the superintendent may do both of the following:

(1) Order the provider, administrator, or any other person not in compliance with this chapter to cease and desist from further actions related to motor vehicle value protection agreements that are in violation of this chapter.

(2) Impose a penalty of not more than five hundred dollars ($500) per violation and no more than ten thousand dollars ($10,000) in the aggregate for all violations of similar nature. For purposes of this chapter, a violation shall be considered to be of a similar nature if the violation consists of the same or similar course of conduct, action, or practice, irrespective of the number of times the action, conduct, or practice which is determined to be a violation of the chapter occurred.

(b) This section shall not apply to motor vehicle value protection agreements offered in connection with a commercial transaction.

(Act 2022-179, §2.)

Chapter 38 Data Breach Notification Act of 2018

§ 8-38-1 Short Title

This chapter may be cited and shall be known as the Alabama Data Breach Notification Act of 2018.

(Act 2018-396, §1.)

§ 8-38-2 Definitions

For the purposes of this chapter, the following terms have the following meanings:

(1) BREACH OF SECURITY or BREACH. The unauthorized acquisition of data in electronic form containing sensitive personally identifying information. Acquisition occurring over a period of time committed by the same entity constitutes one breach. The term does not include any of the following:

a. Good faith acquisition of sensitive personally identifying information by an employee or agent of a covered entity, unless the information is used for a purpose unrelated to the business or subject to further unauthorized use.

b. The release of a public record not otherwise subject to confidentiality or nondisclosure requirements.

c. Any lawful investigative, protective, or intelligence activity of a law enforcement or intelligence agency of the state, or a political subdivision of the state.

(2) COVERED ENTITY. A person, sole proprietorship, partnership, government entity, corporation, nonprofit, trust, estate, cooperative association, or other business entity that acquires or uses sensitive personally identifying information.

(3) DATA IN ELECTRONIC FORM. Any data stored electronically or digitally on any computer system or other database, including, but not limited to, recordable tapes and other mass storage devices.

(4) GOVERNMENT ENTITY. The state, a county, or a municipality or any instrumentality of the state, a county, or a municipality.

(5) INDIVIDUAL. Any Alabama resident whose sensitive personally identifying information was, or the covered entity reasonably believes to have been, accessed as a result of the breach.

(6) SENSITIVE PERSONALLY IDENTIFYING INFORMATION.

a. Except as provided in paragraph b., an Alabama resident’s first name or first initial and last name in combination with one or more of the following with respect to the same Alabama resident:

1. A non-truncated Social Security number or tax identification number.

2. A non-truncated driver’s license number, state-issued identification card number, passport number, military identification number, or other unique identification number issued on a government document used to verify the identity of a specific individual.

3. A financial account number, including a bank account number, credit card number, or debit card number, in combination with any security code, access code, password, expiration date, or PIN, that is necessary to access the financial account or to conduct a transaction that will credit or debit the financial account.

4. Any information regarding an individual’s medical history, mental or physical condition, or medical treatment or diagnosis by a health care professional.

5. An individual’s health insurance policy number or subscriber identification number and any unique identifier used by a health insurer to identify the individual.

6. A user name or email address, in combination with a password or security question and answer that would permit access to an online account affiliated with the covered entity that is reasonably likely to contain or is used to obtain sensitive personally identifying information.

b. The term does not include either of the following:

1. Information about an individual which has been lawfully made public by a federal, state, or local government record or a widely distributed media.

2. Information that is truncated, encrypted, secured, or modified by any other method or technology that removes elements that personally identify an individual or that otherwise renders the information unusable, including encryption of the data, document, or device containing the sensitive personally identifying information, unless the covered entity knows or has reason to know that the encryption key or security credential that could render the personally identifying information readable or useable has been breached together with the information.

(7) THIRD-PARTY AGENT. An entity that has been contracted to maintain, store, process, or is otherwise permitted to access sensitive personally identifying information in connection with providing services to a covered entity.

(Act 2018-396, §2.)

§ 8-38-3 Reasonable Security Measures; Assessment

(a) Each covered entity and third-party agent shall implement and maintain reasonable security measures to protect sensitive personally identifying information against a breach of security.

(b) Reasonable security measures means security measures practicable for the covered entity subject to subsection (c), to implement and maintain, including consideration of all of the following:

(1) Designation of an employee or employees to coordinate the covered entity’s security measures to protect against a breach of security. An owner or manager may designate himself or herself.

(2) Identification of internal and external risks of a breach of security.

(3) Adoption of appropriate information safeguards to address identified risks of a breach of security and assess the effectiveness of such safeguards.

(4) Retention of service providers, if any, that are contractually required to maintain appropriate safeguards for sensitive personally identifying information.

(5) Evaluation and adjustment of security measures to account for changes in circumstances affecting the security of sensitive personally identifying information.

(6) Keeping the management of the covered entity, including its board of directors, if any, appropriately informed of the overall status of its security measures; provided, however, that the management of a government entity subject to this subdivision may be appropriately informed of the status of its security measures through a properly convened executive session under the Open Meetings Act pursuant to Section 36-25A-7.

(c) An assessment of a covered entity’s security shall be based upon the entity’s reasonable security measures as a whole and shall place an emphasis on data security failures that are multiple or systemic, including consideration of all the following:

(1) The size of the covered entity.

(2) The amount of sensitive personally identifying information and the type of activities for which the sensitive personally identifying information is accessed, acquired, maintained, stored, utilized, or communicated by, or on behalf of, the covered entity.

(3) The covered entity’s cost to implement and maintain the reasonable security measures to protect against a breach of security relative to its resources.

(Act 2018-396, §3.)

§ 8-38-4 Investigation of Security Breach

(a) If a covered entity determines that a breach of security has or may have occurred in relation to sensitive personally identifying information that is accessed, acquired, maintained, stored, utilized, or communicated by, or on behalf of, the covered entity, the covered entity shall conduct a good faith and prompt investigation that includes all of the following:

(1) An assessment of the nature and scope of the breach.

(2) Identification of any sensitive personally identifying information that may have been involved in the breach and the identity of any individuals to whom that information relates.

(3) A determination of whether the sensitive personally identifying information has been acquired or is reasonably believed to have been acquired by an unauthorized person, and is reasonably likely to cause substantial harm to the individuals to whom the information relates.

(4) Identification and implementation of measures to restore the security and confidentiality of the systems compromised in the breach.

(b) In determining whether sensitive personally identifying information has been acquired or is reasonably believed to have been acquired by an unauthorized person without valid authorization, the following factors may be considered:

(1) Indications that the information is in the physical possession and control of a person without valid authorization, such as a lost or stolen computer or other device containing information.

(2) Indications that the information has been downloaded or copied.

(3) Indications that the information was used by an unauthorized person, such as fraudulent accounts opened or instances of identity theft reported.

(4) Whether the information has been made public.

(Act 2018-396, §4.)

§ 8-38-5 Notice of Security Breach - Individuals Affected

(a) A covered entity that is not a third-party agent that determines under Section 8-38-4 that, as a result of a breach of security, sensitive personally identifying information has been acquired or is reasonably believed to have been acquired by an unauthorized person, and is reasonably likely to cause substantial harm to the individuals to whom the information relates, shall give notice of the breach to each individual.

(b) Notice to individuals under subsection (a) shall be made as expeditiously as possible and without unreasonable delay, taking into account the time necessary to allow the covered entity to conduct an investigation in accordance with Section 8-38-4. Except as provided in subsection (c), the covered entity shall provide notice within 45 days of the covered entity’s receipt of notice from a third-party agent that a breach has occurred or upon the covered entity’s determination that a breach has occurred and is reasonably likely to cause substantial harm to the individuals to whom the information relates.

(c) If a federal or state law enforcement agency determines that notice to individuals required under this section would interfere with a criminal investigation or national security, the notice shall be delayed upon the receipt of written request of the law enforcement agency for a period that the law enforcement agency determines is necessary. A law enforcement agency, by a subsequent written request, may revoke the delay as of a specified date or extend the period set forth in the original request made under this section if further delay is necessary.

(d) Except as provided by subsection (e), notice to an affected individual under this section shall be given in writing, sent to the mailing address of the individual in the records of the covered entity, or by email notice sent to the email address of the individual in the records of the covered entity. The notice shall include, at a minimum, all of the following:

(1) The date, estimated date, or estimated date range of the breach.

(2) A description of the sensitive personally identifying information that was acquired by an unauthorized person as part of the breach.

(3) A general description of the actions taken by a covered entity to restore the security and confidentiality of the personal information involved in the breach.

(4) A general description of steps an affected individual can take to protect himself or herself from identity theft.

(5) Information that the individual can use to contact the covered entity to inquire about the breach.

(e)(1) A covered entity required to provide notice to any individual under this section may provide substitute notice in lieu of direct notice, if direct notice is not feasible due to any of the following:

a. Excessive cost. The term includes either of the following:

1. Excessive cost to the covered entity relative to the resources of the covered entity.

2. The cost to the covered entity exceeds five hundred thousand dollars ($500,000).

b. Lack of sufficient contact information for the individual required to be notified.

c. The affected individuals exceed 100,000 persons.

(2) a. Substitute notice shall include both of the following:

1. A conspicuous notice on the Internet website of the covered entity, if the covered entity maintains a website, for a period of 30 days.

2. Notice in print and in broadcast media, including major media in urban and rural areas where the affected individuals reside.

b. An alternative form of substitute notice may be used with the approval of the Attorney General.

(f) If a covered entity determines that notice is not required under this section, the entity shall document the determination in writing and maintain records concerning the determination for no less than five years.

(Act 2018-396, §5.)

§ 8-38-6 Notice of Security Breach - Attorney General

(a) If the number of individuals a covered entity is required to notify under Section 8-38-5 exceeds 1,000, the entity shall provide written notice of the breach to the Attorney General as expeditiously as possible and without unreasonable delay. Except as provided in subsection (c) of Section 8-38-5, the covered entity shall provide the notice within 45 days of the covered entity’s receipt of notice from a third-party agent that a breach has occurred or upon the entity’s determination that a breach has occurred and is reasonably likely to cause substantial harm to the individuals to whom the information relates.

(b) Written notice to the Attorney General shall include all of the following:

(1) A synopsis of the events surrounding the breach at the time that notice is provided.

(2) The approximate number of individuals in the state who were affected by the breach.

(3) Any services related to the breach being offered or scheduled to be offered, without charge, by the covered entity to individuals and instructions on how to use the services.

(4) The name, address, telephone number, and email address of the employee or agent of the covered entity from whom additional information may be obtained about the breach.

(c) A covered entity may provide the Attorney General with supplemental or updated information regarding a breach at any time.

(d) Information marked as confidential that is obtained by the Attorney General under this section is not subject to any open records, freedom of information, or other public record disclosure law.

(Act 2018-396, §6.)

§ 8-38-7 Notice of Security Breach - Consumer Reporting Agencies

If a covered entity discovers circumstances requiring notice under Section 8-38-5 of more than 1,000 individuals at a single time, the entity shall also notify, without unreasonable delay, all consumer reporting agencies that compile and maintain files on consumers on a nationwide basis, as defined in the Fair Credit Reporting Act, 15 U.S.C. §1681a, of the timing, distribution, and content of the notices.

(Act 2018-396, §7.)

§ 8-38-8 Notice of Security Breach - Covered Entity

In the event a third-party agent has experienced a breach of security in the system maintained by the agent, the agent shall notify the covered entity of the breach of security as expeditiously as possible and without unreasonable delay, but no later than 10 days following the determination of the breach of security or reason to believe the breach occurred. After receiving notice from a third-party agent, a covered entity shall provide notices required under Sections 8-38-5 and 8-38-6. A third-party agent, in cooperation with a covered entity, shall provide information in the possession of the third-party agent so that the covered entity can comply with its notice requirements. A covered entity may enter into a contractual agreement with a third-party agent whereby the third-party agent agrees to handle notifications required under this chapter.

(Act 2018-396, §8.)

§ 8-38-9 Violations of Notification Requirements

(a) A violation of the notification provisions of this chapter is an unlawful trade practice under the Alabama Deceptive Trade Practices Act, Chapter 19 of this title, but does not constitute a criminal offense under Section 8-19-12. The Attorney General shall have the exclusive authority to bring an action for civil penalties under this chapter.

(1) A violation of this chapter does not establish a private cause of action under Section 8-19-10. Nothing in this chapter may otherwise be construed to affect any right a person may have at common law, by statute, or otherwise.

(2) Any covered entity or third-party agent who is knowingly engaging in or has knowingly engaged in a violation of the notification provisions of this chapter is subject to the penalty provisions set out in Section 8-19-11. For the purposes of this chapter, knowingly shall mean willfully or with reckless disregard in failing to comply with the notice requirements of Sections 8-38-5 and 8-38-6. Civil penalties assessed under Section 8-19-11, shall not exceed five hundred thousand dollars ($500,000) per breach.

(b)(1) Notwithstanding any remedy available under subdivision (2) of subsection (a), a covered entity that violates the notification provisions of this chapter shall be liable for a civil penalty of not more than five thousand dollars ($5,000) per day for each consecutive day that the covered entity fails to take reasonable action to comply with the notice provisions of this chapter.

(2) The office of the Attorney General shall have the exclusive authority to bring an action for damages in a representative capacity on behalf of any named individual or individuals. In such an action brought by the office of the Attorney General, recovery shall be limited to actual damages suffered by the person or persons, plus reasonable attorney’s fees and costs.

(3) It is not a violation of this chapter to refrain from providing any notice required under this chapter if a court of competent jurisdiction has directed otherwise.

(4) To the extent that notification is required under this chapter as the result of a breach experienced by a third-party agent, a failure to inform the covered entity of the breach shall subject the third-party agent to the fines and penalties set forth in this chapter.

(5) Government entities shall be subject to the notice requirements of this chapter. A government entity that acquires and maintains sensitive personally identifying information from a government employer, and which is required to provide notice to any individual under this chapter, must also notify the employing government entity of any individual to whom the information relates.

(6) All government entities are exempt from any civil penalty authorized by this chapter; provided, however, the Attorney General may bring an action against any state, county, or municipal official or employee, in his or her official capacity, who is subject to this chapter for any of the following:

a. To compel the performance of his or her duties under this chapter.

b. To compel the performance of his or her ministerial acts under this chapter.

c. To enjoin him or her from acting in bad faith, fraudulently, beyond his or her authority, or under mistaken interpretation of the law.

(7) By February 1 of each year, the Attorney General shall submit a report to the Governor, the President Pro Tempore of the Senate, and the Speaker of the House of Representatives describing the nature of any reported breaches of security by government entities or third-party agents of government entities in the preceding calendar year along with recommendations for security improvements. The report shall identify any government entity that has violated any of the applicable requirements in this chapter in the preceding calendar year.

(Act 2018-396, §9.)

§ 8-38-10 Disposal of Records Containing Sensitive Personally Identifying Information

A covered entity or third-party agent shall take reasonable measures to dispose, or arrange for the disposal, of records containing sensitive personally identifying information within its custody or control when the records are no longer to be retained pursuant to applicable law, regulations, or business needs. Disposal shall include shredding, erasing, or otherwise modifying the personal information in the records to make it unreadable or undecipherable through any reasonable means consistent with industry standards.

(Act 2018-396, §10.)

§ 8-38-11 Exemptions - Federal

An entity subject to or regulated by federal laws, rules, regulations, procedures, or guidance on data breach notification established or enforced by the federal government is exempt from this chapter as long as the entity does all of the following:

(1) Maintains procedures pursuant to those laws, rules, regulations, procedures, or guidance.

(2) Provides notice to affected individuals pursuant to those laws, rules, regulations, procedures, or guidance.

(3) Timely provides a copy of the notice to the Attorney General when the number of individuals the entity notified exceeds 1,000.

(Act 2018-396, §11.)

§ 8-38-12 Exemptions - State

An entity subject to or regulated by state laws, rules, regulations, procedures, or guidance on data breach notification that are established or enforced by state government, and are at least as thorough as the notice requirements provided by this chapter, is exempt from this chapter so long as the entity does all of the following:

(1) Maintains procedures pursuant to those laws, rules, regulations, procedures, or guidance.

(2) Provides notice to affected individuals pursuant to the notice requirements of those laws, rules, regulations, procedures, or guidance.

(3) Timely provides a copy of the notice to the Attorney General when the number of individuals the entity notified exceeds 1,000.

(Act 2018-396, §12.)

Chapter 39 New Assistive Device Warranty Act

§ 8-39-1 Short Title

This chapter shall be known and may be cited as the New Assistive Devices Warranty Act.

(Act 2018-448, §1.)

§ 8-39-2 Definitions

For purposes of this chapter, the following terms shall have the following meanings:

(1) ASSISTIVE DEVICE. a. Any device, that costs five thousand dollars ($5,000) or more, including a demonstrator that a consumer purchases or accepts transfer of in this state which is used for a major life activity. The term is limited to the following:

1. Manual wheelchairs, motorized wheelchairs, motorized scooters, and other aids that enhance the mobility of an individual.

2. Voice synthesized computer modules, optical scanners, talking software, Braille printers, and other devices that enhance the ability of a sight impaired individual to communicate.

b. The term does not include hearing aids, telephone communication devices for the deaf, assistive listening devices, or other aids that enhance the ability of an individual to hear.

(2) ASSISTIVE DEVICE DEALER. A person who is in the business of selling assistive devices.

(3) ASSISTIVE DEVICE LESSOR. A person who leases assistive devices to consumers, or who holds the rights of a lessor, under a written lease. Any assistive device lessor who is also an assistive device dealer shall fulfill all obligations owed to the consumer pursuant to this chapter as both an assistive device dealer and lessor.

(4) COLLATERAL COSTS. Expenses incurred by a consumer in connection with the repair of a nonconformity, including the cost of sales tax and of obtaining an alternative assistive device.

(5) CONSUMER or THE AGENCY. Any of the following:

a. The purchaser of an assistive device, including government entities purchasing a device for the benefit of an individual and the individual for whose benefit the device is purchased, if the assistive device was purchased from an assistive device dealer or manufacturer for purposes other than resale.

b. A person to whom the assistive device is transferred for purposes other than resale, if the transfer occurs before the expiration of an express warranty applicable to the assistive device.

c. A person who may enforce the warranty.

d. A person who leases an assistive device from an assistive device lessor under a written lease.

e. Any person, with authority, acting on behalf of the consumer or the agency.

(6) DEMONSTRATOR. An assistive device used primarily for the purpose of demonstration to the public.

(Act 2018-448, §2.)

§ 8-39-3 Reporting and Repair of Assistive Device with a Noncomformity

(a) If an assistive device covered by an applicable express warranty exhibits a nonconformity, the consumer or the agency shall do both of the following:

(1) Report the nonconformity to the manufacturer, the assistive device lessor, or any of the authorized assistive device dealers of the manufacturer.

(2) Make the assistive device available for repair within an applicable express warranty period.

(b) Once a nonconformity is reported and the assistive device is made available for repair, the manufacturer, the assistive device lessor, or any of the authorized assistive device dealers of the manufacturer shall make an attempt to repair the nonconformity.

(Act 2018-448, §3.)

§ 8-39-4 Refund or Replacement for Assistive Device with a Non Comformity

(a) If the manufacturer, dealer, or lessor either refuses to accept a device that a consumer makes available for repairs or makes a reasonable attempt to repair, but the nonconformity is not actually repaired, the manufacturer shall be required to provide a refund or replacement of the device, whichever is requested by the consumer or the agency, as follows:

(1) If the consumer or the agency requests a refund for a device that was purchased, the manufacturer shall refund to the consumer and to any holder of a perfected security interest in the assistive device of the consumer, as their interest may appear, the full purchase price plus any finance charge or sales tax paid by the consumer at the point of sale and any collateral costs incurred by the consumer, less a reasonable allowance for use. When the manufacturer provides the refund, the consumer or the agency shall return the assistive device having the nonconformity to the manufacturer, along with any endorsements necessary to transfer legal possession to the manufacturer.

(2) If the consumer or the agency requests a refund for a device which was leased, the manufacturer shall refund to the assistive device lessor and to any holder of a perfected security interest in the assistive device, as their interest may appear, the current value of the written lease and refund to the consumer the amount that the consumer paid under the written lease plus any collateral costs, less a reasonable allowance for use. The manufacturer shall have a cause of action against the dealer or lessor for reimbursement of any amount that it pays to a consumer which exceeds the net price received by the manufacturer for the assistive device. When the manufacturer provides the refund, the assistive device lessor shall provide to the manufacturer any endorsements necessary to transfer legal possession to the manufacturer.

(3) If the consumer elects to receive a comparable new assistive device, the manufacturer shall provide the consumer or the agency with the comparable new assistive device no later than 30 days after the consumer or lessor offers to transfer possession of the assistive device having the nonconformity to the manufacturer.

(b) This section regarding the duty of a manufacturer shall apply for the period of the express warranty of the manufacturer.

(Act 2018-448, §4.)

§ 8-39-5 Applicability of Chapter

This chapter does not apply to any of the following:

(1) Disposable assistive devices with a useful life of one year or less.

(2) Batteries or nonfunctional accessories.

(3) Assistive devices dispensed, sold, injected, or implanted by a licensed physician, licensed physician assistant, or any individual working with or for the practice of a licensed physician, employer, or other business entity that is primarily engaged in the practice of medicine, whether or not the individual is working in a collaborative practice agreement as an agent, employee, or independent contractor. The exemption provided by this subdivision shall not apply to an assistive device simply because it was prescribed or ordered by a licensed physician or other health care practitioner.

(Act 2018-448, §5.)

§ 8-39-6 Rights and Remedies of Consumer

(a) This chapter shall not limit rights or remedies available to a consumer under any other law.

(b) Any waiver of rights by a consumer under this chapter shall be void.

(c) In addition to pursuing any other remedy, a consumer may bring an action to recover any damages caused by a violation of this chapter within four years after the cause of action has accrued. By the original agreement, the parties may reduce the period of limitation to not less than one year but may not extend the period of limitation. The court may award a consumer who prevails up to treble damages, together with costs, disbursements, and reasonable attorney fees, and any equitable relief that the court determines is appropriate.

(Act 2018-448, §6.)

Chapter 40 Sale of Collectibles

§ 8-40-1 Definitions

As used in this chapter, the following terms have the following meanings:

(1) AUTHENTICATE. The representation by a dealer or other person that a collectible is authentic.

(2) AUTOGRAPHED ITEM. A sports item or entertainment media item bearing the signature of a particular person that is sold or offered for sale for fifty dollars ($50) or more, excluding sales tax and shipping fees, when the dealer offers the signed item at a higher price than the dealer would charge for a comparable item without the signature.

(3) COLLECTIBLE. An autographed item, entertainment media item, historical artifact, limited edition item, item of memorabilia, sports item, or similar item represented to have value based on the collectible nature of the item.

(4) CONSUMER. A natural person who purchases an autographed collectible from a dealer for personal, family, or household purposes. The term includes a prospective purchaser meeting these criteria.

(5) DEALER. A person who is in the business of selling or offering for sale collectibles and has sold three or more collectibles in the preceding 12 months. The term includes a person engaged in a mail-order, telephone-order, online, or television business for the sale of collectibles. The term does not include either of the following:

a. A pawnbroker that acquired the collectible through a foreclosure on a collateral loan, provided that the pawnbroker does not hold himself or herself out as having knowledge or skill peculiar to autographed collectibles.

b. The person who autographed the collectible.

(6) ENTERTAINMENT MEDIA ITEM. An item related to music, television, and films, including, but not limited to, a picture, photo, record, compact disc, digital video disc, ticket, program, playbill, clothing, hat, poster, toy, plaque, trading card, musical instrument, or other entertainment memorabilia.

(7) HISTORICAL ARTIFACT. An object, such as a tool, or the remains of one, such as a shard of pottery, or a historical writing, manuscript, or document, characteristic of an earlier time or cultural stage, valued for its historical significance and authenticity.

(8) LIMITED EDITION. An autographed collectible that meets all of the following requirements:

a. A person has produced a specific quantity of an autographed collectible and placed it on the open market.

b. The person has posted a notice, at its primary place of business, that it will provide any consumer, upon request, with a copy of a notice that states the exact number of an autographed collectible produced in that series of limited editions.

c. The person makes available, upon request of a consumer, evidence that the electronic encoding, films, molds, or plates used to create the autographed collectible have been destroyed after the specified number of autographed collectibles have been produced.

d. The sequence number of the autographed collectible and the number of the total quantity produced in the limited edition are printed on the autographed collectible.

(9) MEMORABILIA. Objects kept or collected because of their historical interest, particularly those deriving value from their connection to a particular memorable person or event, and also deriving value from authenticity.

(10) REPRESENTATION. Any written representation, including, but not limited to, a representation in an advertisement, brochure, catalog, flyer, invoice, sign, online communication, Internet web page, email, or other commercial or promotional material.

(11) SPORTS ITEM. A photograph, ticket, plaque, sports program, trading card, item of sports equipment or clothing, or other sports memorabilia.

(Act 2022-398, §1.)

§ 8-40-2 Applicability of Chapter

This chapter does not apply to a collectible if purchased based on any of the following:

(1) The collectible was purchased by barter or trade for other items.

(2) The collectible was sold by one dealer to another dealer.

(Act 2022-398, §2.)

§ 8-40-3 Consumer Remedies for Purchase of Inauthentic Collectible Item

(a) A consumer who purchases an authenticated collectible from a dealer based on a representation that the collectible is authentic is entitled to recover from the dealer the full purchase price of the collectible plus damages within three years of the purchase if the consumer presents substantial evidence to the dealer that the collectible is in fact not authentic.

(b) A consumer may file a civil action to enforce the rights provided by this chapter.

(c) The remedies specified in this section are in addition to, and not in lieu of, any other remedy that may be provided by law.

(Act 2022-398, §3.)

Chapter 41 High Volume Third Party Sellers of Consumer Products on Online Market Places

§ 8-41-1 Definitions

As used in this chapter, the following terms have the following meanings:

(1) CONSUMER PRODUCT. Any tangible personal property that is distributed in commerce and that is normally used for personal, family, or household purposes, including, but not limited to, any property intended to be attached to or installed in any real property without regard to whether it is attached or installed.

(2) HIGH-VOLUME THIRD-PARTY SELLER. A participant in an online marketplace that is a third-party seller and, in any continuous 12-month period during the previous 24 months, that has entered into 200 or more discrete sales or transactions of new or unused consumer products of an aggregate total of five thousand dollars ($5,000) or more in gross revenue in this state made through the online marketplace and for which payment was processed by the online marketplace or through a third party.

(3) ONLINE MARKETPLACE. Any person or entity that operates a consumer-directed electronically based or accessed platform that does all of the following:

a. Includes features that allow for, facilitate, or enable third-party sellers to engage in the sale, purchase, payment, storage, shipment, or delivery of a consumer product within this state.

b. Is used by one or more third-party sellers.

c. Has a contractual or similar relationship with consumers governing their use of the platform to purchase consumer products.

(4) SELLER. A person who sells, offers to sell, or contracts to sell a consumer product through an online marketplace’s platform.

(5) THIRD-PARTY SELLER. Any seller, independent of an online marketplace, that sells, offers to sell, or contracts to sell a consumer product in this state through an online marketplace. The term does not include, with respect to an online marketplace, any of the following:

a. A seller that operates the online marketplace’s platform.

b. A business entity that has all of the following:

1. Made available to the general public the entity’s name, business address, and working contact information.

2. An ongoing contractual relationship with the online marketplace to provide the online marketplace with the manufacture, distribution, wholesaling, or fulfillment of shipments of consumer products.

3. Provided to the online marketplace the identity information required under Section 8-41-2(a) that has been verified in accordance with Section 8-41-2(d).

(6) VERIFY. To confirm information and documents provided to an online marketplace, pursuant to this chapter, through the use of one or more methods that enable an online marketplace to reliably determine that any information and documents provided are valid, correspond to the seller or an individual acting on the seller’s behalf, are not misappropriated, and are not falsified.

(Act 2022-441, §1.)

§ 8-41-2 Information Required from High-Volume Third Party Sellers; Duties of Online Marketplace

(a) An online marketplace shall require any high-volume third-party seller on its platform, not later than 10 days after qualifying as such, to provide all of the following information to the online marketplace:

(1) A bank account number or, if the high-volume third-party seller does not have a bank account, the name of the payee for payments issued by the online marketplace to the high-volume third-party seller. This information may be provided by the high-volume third-party seller to the online marketplace or to a third party contracted by the online marketplace to maintain the information; provided, however, that the online marketplace ensures that it can obtain the information on demand from the third party.

(2) Contact information, which shall include either of the following:

a. If the high-volume third-party seller is an individual, the individual’s name.

b. If the high-volume third-party seller is not an individual, either of the following:

1. A copy of a valid government issued identification for an individual acting on behalf of a seller that includes the individual’s name.

2. A copy of a valid government issued record or tax document that includes the business name and physical address of the high-volume third-party seller.

(3) A business tax identification number or, if the high-volume third-party seller does not have a business tax identification number, a taxpayer identification number.

(4) A current working email address and telephone number for the high-volume third-party seller.

(b) An online marketplace shall do both of the following for each high-volume third-party seller on its platform:

(1) Periodically, but not less than annually, provide notification of the requirement to keep current the information required under subsection (a).

(2) Require the high-volume third-party seller, not later than 10 days after receiving the notice provided under subdivision (1), to submit electronic certification of either of the following:

a. That there have been changes to the information required to be provided under subsection (a). If there have been changes to the information required to be provided, the high-volume third-party seller shall update the information in its certified response.

b. That there have been no changes to the information required to be provided under subsection (a).

(c) In the event that a high-volume third-party seller does not provide the information or certification required under subsection (a) or (b), the online marketplace, after providing the seller with written or electronic notice and an opportunity to provide the information or certification not later than 10 days after the issuance of the notice, shall suspend any future sales activity of the seller until the seller provides the required information or certification.

(d)(1) An online marketplace shall verify both of the following:

a. The information and documents required to be provided under subsection (a) have been received not later than 10 days after receipt of notification under subdivision (b)(1).

b. Any change in the information or to the documents has been received not later than 10 days after being notified of the change by a high-volume third-party seller under subsection (b).

(2) If a high-volume third-party seller provides a copy of a valid government issued tax document, any information contained within the tax document shall be presumed to be verified as of the date the document was issued.

(Act 2022-441, §2.)

§ 8-41-3 Disclosure of Identity Information; Grounds for Suspension of Future Sales Activity

(a) Except as provided in subsection (b), an online marketplace shall require any high-volume third-party seller with an aggregate total of twenty thousand dollars ($20,000) or more in annual gross revenues on its platform to provide to the online marketplace and disclose to consumers in a clear and conspicuous manner all of the following identity information:

(1) The full name of the high-volume third-party seller, including the company name or the name by which the seller or company operates on the online marketplace.

(2) The physical address of the high-volume third-party seller.

(3) Contact information for the high-volume third-party seller that will allow for direct unhindered communication with the seller by consumers of the online marketplace, including one or more of the following:

a. A current working telephone number.

b. A current working email address.

c. Other means of direct electronic messaging, which may be provided by the online marketplace; provided, however, that the requirements of this paragraph shall not prohibit the online marketplace from preventing actual fraud, abuse, or spam through the communication.

(4) Whether the high-volume third-party seller used a different seller to supply the product to the consumer upon purchase and, upon the request of an authenticated purchaser, the information described in subdivisions (1) through (3) relating to the different seller that is different than the high-volume third-party seller listed on the product listing page prior to purchase. The identity information of the different seller shall be provided on the product listing page, directly, via hyperlink, or, after the purchase is finalized, in the order confirmation message or other document or communication made to a consumer and in the consumer’s account transaction history.

(b) Upon the request of a high-volume third-party seller, an online marketplace may provide for partial disclosure of the identity information required under subsection (a) if the high-volume third-party seller certifies to the online marketplace that any of the following apply:

(1) The seller does not have a business address and only has a residential street address, or has a combined business and residential address. If this subdivision is applicable, the online marketplace shall do both of the following:

a. Disclose only the country and, if applicable, the city and state in which the seller resides.

b. Inform consumers that there is no business address available for the high-volume third-party seller and that consumer inquiries should be submitted to the seller by telephone, email, or other means of electronic messaging provided to the seller by the online marketplace.

(2) The seller is a business that has a physical address for product returns. If this subdivision is applicable, the online marketplace shall disclose the seller’s physical address for product returns.

(3) The seller does not have a telephone number other than a personal telephone number. If this subdivision is applicable, the online marketplace shall inform consumers that there is no telephone number available for the seller and that consumer inquiries should be submitted to the seller’s email address or other means of electronic messaging provided to the seller by the online marketplace.

(c)(1) Subject to subdivision (3), an online marketplace shall suspend any future sales activity of a high-volume third-party seller if the online marketplace becomes aware of either of the following:

a. That the high-volume third-party seller has made a false representation to the online marketplace in order to justify the provision of a partial disclosure of the identity information under subsection (b).

b. That the high-volume third-party seller that has requested and received a provision for a partial disclosure has not provided responsive answers within a reasonable time frame to consumer inquiries submitted to the seller by telephone, email, or other means of electronic messaging provided to the seller by the online marketplace.

(2) Prior to any suspension under this subsection, the online marketplace shall provide the high-volume third-party seller with written or electronic notice and an opportunity to respond not later than 10 days after the issuance of the notice.

(3) A high-volume third-party seller may avoid suspension under this subsection by consenting to the disclosure of the identity information required under subsection (a).

(d) If a high-volume third-party seller does not comply with the requirements to provide and disclose information under this section, then, after providing the seller with written or electronic notice and an opportunity to provide or disclose the information not later than 10 days after the issuance of the notice, the online marketplace shall suspend any future sales activities of the seller until the seller complies with the requirements.

(Act 2022-441, §3.)

§ 8-41-4 Disclosure of Reporting Mechanisms

An online marketplace shall disclose to consumers in a clear and conspicuous manner, on the product listing of any high-volume third-party seller, a reporting mechanism that allows for electronic and telephonic reporting of suspicious marketplace activity to the online marketplace.

(Act 2022-441, §4.)

§ 8-41-5 Use of Information or Documents; Security Procedures

(a) Information or documents collected solely to comply with the requirements of this chapter shall not be used for any other purpose unless required by law.

(b) An online marketplace shall implement and maintain reasonable security procedures and practices, including administrative, physical, and technical safeguards, appropriate to the nature of the data and the purposes for which the data will be used, to protect the information or documents collected to comply with the requirements of this chapter from unauthorized use, disclosure, access, destruction, or modification.

(Act 2022-441, §5.)

§ 8-41-6 Violations

A violation of any provision of this chapter shall be actionable as a violation of the Deceptive Trade Practices Act, enforceable by the Attorney General or any district attorney.

(Act 2022-441, §6(a).)

§ 8-41-7 Relation to Simplified Use Tax Remittance Program

Nothing in this chapter shall be construed as imposing any requirement, qualification, or condition for an online marketplace to be eligible to participate in the state Simplified Use Tax Remittance Program, as defined under Section 40-23-191.

(Act 2022-441, §6(b).)

Chapter 42 Residential Real Estate Transactions

§ 8-42-1 Legislative Findings

The Legislature finds and declares all of the following:

(1) Wholesaling real property occurs when a buyer enters into a contract for purchase and sale of a single-family residential property with the seller of the property thereby creating the buyer’s equitable interest in the property, the buyer then finds a subsequent purchaser willing to pay a higher price for the property and then assigns its interest to the subsequent purchaser for a fee.

(2) Certain unfair service agreements provide a real estate company with the right to market, list, or assist in selling a residential property for up to 40 years, binding homeowners and successors in interest through a recorded memorandum and penalizing the homeowner or successor in interest for breach of the agreement.

(3) The practices of wholesaling residential real estate, and recording these unfair service agreements, pose a significant risk to Alabama homeowners if left unregulated.

(4) The lack of any restrictions enables predatory practices against homeowners, especially those who have lived in a home for a long period of time, leading to financial loss and resulting in confusion for unsuspecting subsequent purchasers.

(5) The Legislature concludes the following in the interest of protecting Alabama homeowners and home buyers:

a. Disclosure of the limited interest, marketing, and assignment of the buyer’s equitable interest in the homeowner’s property should be required of buyers engaging in wholesaling.

b. Unfair service agreements create clouds on the titles of Alabama homes and burden Alabama homeowners with false promises, are against the public interest, and constitute unreasonable restraints on the alienation of real property.

(Act 2023-201, §1.)

§ 8-42-2 Assignment of Equitable Interest in Single-Family Residential Property; Disclosure Requirements

(a) A person may acquire an equitable interest in a single-family residential property as the buyer under a contract for the purchase and sale of the property and then may assign or offer to assign the interest for a fee if the buyer discloses in writing all of the following:

(1) To any potential subsequent purchaser or assignee, the nature of the buyer’s equitable interest.

(2) To the seller of the property, the buyer’s intent to market its equitable interest prior to commencing any marketing of the property.

(3) To the seller of the property, the effective date of any assignment of the buyer’s interest to a subsequent purchaser of the property at least three business days prior to the effective date of any assignment.

(b) Written disclosure under subsection (a) shall be required for the intent to market and transfer an equitable interest in residential real property, as limited by subsection (d), whether by assignment, novation, or other similar method of transferring interest in real property.

(c)(1) A violation of this section is a Class C misdemeanor.

(2) In addition to criminal penalties, a person violating this section may be liable to the person to whom disclosure is required in an amount equal to three times the fee or amount received by the buyer pursuant to the assignment.

(d) This section shall only apply to transactions involving single-family residential property and shall not apply to any other property.

(e) This section shall not infringe on the right of the parties to otherwise agree by contract.

(Act 2023-201, §2.)

§ 8-42-3 Application of Chapter; Liens; Unfair Service Agreements

(a) For purposes of this section the following terms have the following meanings:

(1) RECORDING. Presenting a document to a county judge of probate for official placement in the public land records.

(2) RESIDENTIAL REAL ESTATE. Real property located in this state which is used primarily for a dwelling and contains one to four dwelling units.

(3) SERVICE AGREEMENT. A contract under which a person agrees to provide services in connection with the purchase or sale of residential real estate.

(4) SERVICE PROVIDER. An individual or entity that provides services to another party under a service agreement.

(5) UNFAIR SERVICE AGREEMENT. A service agreement in which the services subject to the agreement are not performed within one year after the date upon which the agreement commences and provides any of the following:

a. Purports to run with the land or to be binding on future owners of interests in the real property.

b. Allows for assignment of the right to provide the service without notice and agreement of the owner of residential real estate.

c. Purports to create a lien, encumbrance, or other real property security interest.

(b) This chapter does not apply to any of the following:

(1) A home warranty or other type of similar product that covers the cost of maintenance of a major housing system, such as plumbing or electrical wiring, for a set period of time from the date a house is sold.

(2) An insurance contract.

(3) An option to purchase or right of refusal to purchase real estate.

(4) A maintenance or repair agreement entered into by a homeowners’ association in a common interest community.

(5) Agreements to manage residential real estate.

(6) A declaration of any covenants, conditions, or restrictions created in the formation of a homeowners’ association, a group of condominium owners, or other common interest community, or an amendment to the declaration.

(7) A mortgage loan or commitment to make or receive a mortgage loan.

(8) A security agreement under Alabama’s Uniform Commercial Code, relating to the sale or rental of personal property or fixtures.

(9) Water, sewer, electrical, telephone, cable, or other regulated utility service providers.

(c) This section does not impair the rights granted by a mechanic’s or materialman’s lien under Division 8 of Article 5 of Chapter 11 of Title 35 or by another judicially imposed lien.

(d) If a service agreement is unfair under this section, it is unenforceable.

(e) If a person enters into an unfair service agreement with a consumer, that agreement shall be deemed a deceptive act under the Deceptive Trade Practices Act, commencing with Section 8-19-1.

(f)(1) No person shall record or cause to be recorded an unfair service agreement, or notice or memorandum of an unfair service agreement in the state.

(2) If an unfair service agreement is recorded in this state, it shall not provide actual or constructive notice against an otherwise bona fide purchaser of the residential real property to which it pertains, or against a creditor with a security interest in the residential real property to which it pertains.

(3) A service provider who records or causes to be recorded an unfair service agreement or notice or memorandum thereof in this state is liable to an affected party in the amount of ten thousand dollars ($10,000) in statutory damages.

(g) If an unfair service agreement, or notice or memorandum of an unfair service agreement, is recorded in the state, any party with an interest in the residential real property to which it pertains may take either or both of the following actions:

(1) Apply to the circuit court in the county where the recording exists to seek a court order declaring the agreement is void and of no effect.

(2) In addition to the statutory damages described in subdivision (f)(3), recover actual damages, plus costs and attorney fees as may be proven against the service provider who recorded the agreement.

(Act 2023-201, §3.)

Chapter 43 Alabama Genetic Data Privacy Act

§ 8-43-1 Short Title

This chapter shall be known as the “Alabama Genetic Data Privacy Act.”

(Act 2024-384, §1.)

§ 8-43-2 Definitions

For purposes of this chapter, the following words have the following meanings:

(1) BIOLOGICAL SAMPLE. Any human material known to contain DNA, including, but not limited to, tissue, saliva, blood, or urine.

(2) CONSUMER. Any individual who is an Alabama resident.

(3) CONTRACTOR. A person that contracts with a genetic testing company to provide a service necessary to the genetic testing company’s consumer products or services which requires possession of a consumer’s biological sample or genetic data, including laboratory facilities for genetic testing.

(4) DEIDENTIFIED DATA. Genetic data possessed by a genetic testing company which cannot be used to infer information about, or otherwise be linked to, an identifiable consumer and which either meets the requirements for deidentification of genetic data set forth in 45 C.F.R. § 164.514 or is subject to the following:

a. Administrative and technical measures put in place by the genetic testing company to ensure that the data cannot be associated with an identified consumer.

b. A public commitment by the genetic testing company to undertake all of the following:

1. Maintain and use the data only in a deidentified form.

2. Prohibit any attempts to reidentify the data.

3. Take legal action to enforce contractual obligations that prohibit any recipient of the data from attempting to reidentify the data.

(5) DNA. Deoxyribonucleic acid.

(6) EXPRESS CONSENT. A consumer’s acknowledgment or permission, in writing or captured electronically, to a clear, meaningful, and prominent written notice regarding the collection, use, retention, or disclosure of the consumer’s biological sample or genetic data for a specific purpose.

(7) GENETIC DATA. a. Any data derived from analysis of a biological sample which concerns a consumer’s genetic characteristics and which may include, but is not limited to, any of the following formats or sources:

1. Raw data that results from sequencing all or a portion of a consumer’s extracted DNA.

2. Genotypic and phenotypic information obtained from analyzing a consumer’s raw sequence data.

3. Health information self-reported by the consumer to a genetic testing company to be used by the company in connection with analyzing the consumer’s raw sequence data or for product development or scientific research.

b. Genetic data does not include deidentified data.

(8) GENETIC TESTING. Laboratory testing of a consumer’s biological sample to analyze DNA, including, but not limited to, chromosomes and single nucleotide polymorphisms in order to derive and interpret genetic data.

(9) GENETIC TESTING COMPANY or COMPANY. Any person, other than a health care provider, who directly solicits a biological sample from a consumer for analysis in order to provide products or services to the consumer which include disclosure of information that may include, but is not limited to, the following:

a. The genetic link of the consumer to certain population groups based on ethnicity, geography, or anthropology.

b. The probable relationship of the consumer to other individuals based on matching DNA for purposes that include genealogical research.

c. Recommendations to the consumer for managing wellness which are based on physical or metabolic traits, lifestyle tendencies, or disease predispositions that are associated with genetic markers present in the consumer’s DNA.

(10) HEALTH CARE PROVIDER. Any hospital, as defined in Section 22-21-20, licensed by the Alabama Department of Public Health, and any physician, nurse, or other licensed medical practitioner, whether in individual, group, professional corporation, or professional association practice, which provides diagnostic services or treatment for a patient of the hospital, physician, nurse, or other licensed medical practitioner.

(Act 2024-384, §2.)

§ 8-43-3 Policies and Procedures Governing the Collection, Use, Maintenance, and Disclosure of Genetic Data; Consumer Consent Requirements

(a)(1) A genetic testing company shall prominently display to a consumer complete information regarding the company’s policies and procedures governing the collection, use, maintenance, and disclosure of genetic data in plain language, including all of the following:

a. A privacy policy overview that includes basic information about the company’s collection, use, or disclosure of genetic data.

b. A privacy policy notice that sets forth the complete text of the company’s collection, consent, use, access, disclosure, transfer, security, retention, and deletion policies or practices.

c. A clear and complete notice that the consumer’s genetic data may be included in deidentified data shared or disclosed by the company to a third party for research in compliance with the U.S. Department of Health and Human Services policy for the protection of human subjects, 45 C.F.R. Part 46.

d. A clear description of how to file a complaint alleging a violation of this chapter.

(2) A genetic testing company shall obtain the consumer’s initial express consent for all of the following:

a. Use of the biological sample and resulting genetic data to provide the product or service ordered by the consumer.

b. Identification of who may have access to the biological sample, genetic data, and test results, including a contractor, in order to fulfill the consumer’s order.

c. Permission to retain the biological sample and genetic data for future testing for other products or services offered by the company.

d. Acknowledgment that the company may seek express consent in the future to transfer the biological sample or disclose the genetic data to a third party other than a contractor for a reason other than fulfillment of an order for the company’s products or services.

(3) A genetic testing company shall obtain the consumer’s express consent every time the company does any of the following:

a. Transfers the biological sample or discloses the genetic data to a third party other than a contractor for a reason other than fulfillment of an order for the company’s products or services.

b. Uses the biological sample or genetic data for a purpose other than the company’s products or services ordered by the consumer.

c. Markets to a consumer based on the consumer’s genetic data, or markets to a consumer by a third party based on the consumer having ordered or purchased a genetic testing product or service. Marketing does not include the provision of customized content or offers on websites or through the applications or services provided by the direct-to-consumer genetic testing company with the first-party relationship to the consumer.

(4) A genetic testing company shall obtain the consumer’s informed consent to transfer the biological sample or disclose the consumer’s genetic data in compliance with 45 C.F.R. Part 46, in the following cases:

a. For independent research conducted by a third party.

b. For research conducted under the sponsorship of the genetic testing company for the purpose of product or service research and development, scientific publication, or promotion of the company.

(5)a. A genetic testing company shall provide a process for the consumer to do all of the following:

1. Access the consumer’s genetic data.

2. Delete the consumer’s account.

3. Request the destruction of the consumer’s biological sample and genetic data.

4. Revoke any express or informed consent given.

b. 1. If the consumer requests the destruction of the consumer’s biological sample and genetic data, the company shall comply with the request as soon as reasonably possible, but no more than 30 days after the request is made.

2. If the consumer revokes any express or informed consent given that resulted in the transfer of the consumer’s biological sample or disclosure of the consumer’s genetic data to a third party, the company shall secure the return of the biological sample and the genetic data as soon as reasonably possible, but no more than 60 days after the revocation is tendered.

(b) A genetic testing company may disclose a consumer’s genetic data to any law enforcement agency pursuant to a valid legal process. When a law enforcement agency requests data from a genetic testing company, the company shall not disclose the existence of the valid legal process or the fact of the company’s compliance specifically to the party to whom the valid legal process pertains. Nothing in this subsection shall prevent a company from publishing a transparency report that details the number and types of law enforcement requests received and the number of times categories of information are shared, nor prevent a company from complying with other laws or policies, including a company’s privacy policy.

(c) A genetic testing company may not do any of the following without a consumer’s express written consent:

(1) Disclose a consumer’s genetic data to any person issuing health, life, disability, or long-term care insurance.

(2) Disclose a consumer’s genetic data to any employer or prospective employer of the consumer.

(Act 2024-384, §3.)

§ 8-43-4 Confidentiality of Consumers’ Genetic Information

(a) A contract between the genetic testing company and a contractor shall prohibit the contractor from using, retaining, or disclosing any biological sample, extracted genetic material, genetic data, or information identifying the consumer for any purpose other than performing the service specified in the contract.

(b) A contractor shall be subject to the same confidentiality obligation as the company, consistent with each express consent given or withheld by a consumer with respect to using, retaining, or disclosing the consumer’s biological sample, extracted genetic material, genetic data, or information identifying the consumer.

(Act 2024-384, §4.)

§ 8-43-5 Applicability of Chapter

This chapter does not apply to any of the following:

(1) A covered entity or business associate as those terms are defined in 45 C.F.R. Parts 160 and 164.

(2) The collection, use, or retention of biological samples or genetic data for noncommercial purposes, including for research and instruction, by a public or private institution of higher learning or any entity owned or operated by a public or private institution of higher learning.

(3) Biological samples or genetic data lawfully obtained by law enforcement pursuant to a criminal investigation.

(Act 2024-384, §5.)

§ 8-43-6 Violations; Enforcement

(a) Any consumer may report a violation of this chapter to the the Consumer Interest Division of the Office of the Attorney General.

(b) The Consumer Interest Division of the Office of the Attorney General may enforce this chapter by a civil action in circuit court to enjoin any practice or conduct in violation of this chapter or to recover a civil penalty of up to three thousand dollars ($3,000) for each violation.

(c) Any civil penalty and costs may be waived if the genetic testing company or contractor has made full restitution or has paid actual damages to any consumer who has been injured by a violation of this chapter.

(d) In any settlement of a claim or civil action resulting from a violation of this chapter, the Office of the Attorney General shall receive reasonable attorney fees and costs.

(Act 2024-384, §6.)

Chapter 44 The Alabama Personal Data Protection Act

§ 8-44-1 Short Title

This chapter shall be known as the Alabama Personal Data Protection Act.

(Act 2026-552, §1.)

§ 8-44-2 Definitions

For the purposes of this chapter, the following terms have the following meanings:

(1) AFFILIATE. A legal entity that shares common branding with another legal entity or that controls, is controlled by, or is under common control with another legal entity.

(2) AUTHENTICATE. To use reasonable methods to determine that a request to exercise any of the consumer rights afforded under this chapter is being made by, or on behalf of, a consumer who is entitled to exercise those consumer rights with respect to the consumer’s personal data at issue.

(3) BIOMETRIC DATA. Data generated by automatic measurements of an individual’s biological characteristics, such as a fingerprint, voiceprint, retina, or iris, which are used to identify a specific individual. The term does not include any of the following:

a. A digital or physical photograph.

b. An audio or video recording.

c. Any data generated from paragraph a. or b. unless the data is used to identify a specific individual.

(4) CHILD. An individual under 13 years of age.

(5) CONSENT. A clear affirmative act signifying a consumer’s freely given, specific, informed, and unambiguous agreement to allow the processing of personal data relating to the consumer, including, but not limited to, a written statement or a statement by electronic means. The term does not include any of the following:

a. Acceptance of a general or broad term of use or similar document that contains descriptions of personal data processing along with other unrelated information.

b. Hovering over, muting, or pausing a given piece of content.

c. An agreement obtained using dark patterns.

(6) CONSUMER. An individual who is a resident of this state. The term does not include an individual acting in a commercial or employment context or as an employee, owner, director, officer, or contractor of a company, partnership, sole proprietorship, nonprofit, or government agency whose communications or transactions with the controller occur solely within the context of that individual’s role with the company, partnership, sole proprietorship, nonprofit, or government agency.

(7) CONTROL. Any of the following:

a. Ownership of or the power to vote more than 50 percent of the outstanding shares of any class of voting security of a company.

b. Control in any manner over the election of a majority of the directors or of individuals exercising similar functions.

c. The power to exercise controlling influence over the management of a company.

(8) CONTROLLER. An individual or legal entity that, alone or jointly with others, determines the purposes and means of processing personal data.

(9) DARK PATTERN. A user interface designed or manipulated with the effect of substantially subverting or impairing user autonomy, decision-making, or choice.

(10) DEIDENTIFIED DATA. Data that cannot be used to reasonably infer information about or otherwise be linked to an identified or identifiable individual or a device linked to an identified or identifiable individual if the controller that possesses the data does all of the following:

a. Takes reasonable measures to ensure that the data cannot be associated with an individual.

b. Publicly commits to process the data in a deidentified fashion only and to not attempt to reidentify the data.

c. Contractually obligates any recipients of the data to satisfy the criteria set forth in paragraphs a. and b.

(11) IDENTIFIABLE INDIVIDUAL. An individual who can be readily identified, directly or indirectly.

(12) NONPROFIT ENTITY. As defined in Section 10A-1-1.03.

(13) PERSONAL DATA. Any information that is linked or reasonably linkable to an identified or identifiable individual. The term does not include deidentified data or publicly available information.

(14) PRECISE GEOLOCATION DATA. Information derived from technology, including, but not limited to, global positioning system level latitude and longitude coordinates, which directly identifies the specific location of an individual with precision and accuracy within a radius of 1,750 feet. The term does not include the content of communications or any data generated by or connected to advanced utility metering infrastructure systems or equipment for use by a utility.

(15) PROCESS. Any operation or set of operations, whether by manual or automated means, performed on personal data or on sets of personal data, including, but not limited to, the collection, use, storage, disclosure, analysis, deletion, or modification of personal data.

(16) PROCESSOR. An individual or legal entity that processes personal data on behalf of a controller.

(17) PROFILING. Any form of solely automated processing performed on personal data to evaluate, analyze, or predict personal aspects related to an identified or identifiable individual’s economic situation, health, personal preferences, interests, reliability, behavior, location, or movements.

(18) PSEUDONYMOUS DATA. Personal data that cannot be attributed to a specific individual without the use of additional information, provided the additional information is kept separately and is subject to appropriate technical and organizational measures to ensure that the personal data is not attributable to an identified or identifiable individual.

(19) PUBLICLY AVAILABLE INFORMATION. Either of the following:

a. Information that is lawfully made available through federal, state, or local government records or widely distributed media.

b. Information that a controller has a reasonable basis to believe a consumer has lawfully made available to the public.

(20) SALE OF PERSONAL DATA. The exchange of personal data for monetary consideration by a controller to a third party, or for other valuable consideration by a controller to a third party where the controller receives a material benefit and the third party is not restricted in its subsequent uses of the personal data. The term does not include any of the following:

a. The disclosure of personal data to a processor that processes the personal data on behalf of the controller.

b. The disclosure of personal data to a third party for the purposes of providing a product or service requested by the consumer.

c. The disclosure or transfer of personal data to an affiliate of the controller.

d. The disclosure of personal data in which the consumer directs the controller to disclose the personal data or intentionally uses the controller to interact with a third party.

e. The disclosure of personal data that the consumer intentionally made available to the public via a channel of mass media and did not restrict to a specific audience.

f. The disclosure or transfer of personal data to a third party as an asset that is part of a merger, acquisition, bankruptcy, or other transaction, or a proposed merger, acquisition, bankruptcy, or other transaction in which the third party assumes control of all or part of the controller’s assets.

g. The disclosure or transfer of personal data to a third party for the purposes of providing analytics services.

h. The disclosure or transfer of personal data to a third party for the purposes of providing marketing services solely to the controller.

(21) SENSITIVE DATA. Personal data that includes any of the following:

a. Data revealing racial or ethnic origin, religious beliefs, a mental or physical health condition or diagnosis, information about an individual’s sex life, sexual orientation, or citizenship or immigration status.

b. The processing of genetic or biometric data for the purpose of uniquely identifying an individual.

c. Personal data collected from a known child.

d. Precise geolocation data.

(22) SIGNIFICANT DECISION. A decision made by a controller which results in the provision or denial by the controller of credit or lending services, housing, insurance, education enrollment or opportunity, criminal justice, employment opportunity, health care service, or access to basic necessities such as food or water.

(23) TARGETED ADVERTISING. Displaying advertisements to a consumer in which the advertisement is selected based on personal data obtained or inferred from that consumer’s activities over time and across nonaffiliated Internet websites or online applications to predict the consumer’s preferences or interests. The term does not include any of the following:

a. Advertisements based on activities within a controller’s own Internet websites or online applications.

b. Advertisements based on the context of a consumer’s current search query or visit to any Internet website or online application.

c. Advertisements directed to a consumer in response to the consumer’s request for information or feedback.

d. Processing personal data solely to measure or report advertising frequency, performance, or reach.

(24) THIRD PARTY. An individual or legal entity other than a consumer, controller, processor, or an affiliate of the controller or processor.

(25) TRADE SECRET. As defined in Section 8-27-2.

(Act 2026-552, §2.)

§ 8-44-3 Applicability of Chapter

The provisions of this chapter apply to persons that conduct business in this state or persons that produce products or services that are targeted to residents of this state and that meet either of the following qualifications:

(1) Control or process the personal data of more than 25,000 consumers, excluding personal data controlled or processed solely for the purpose of completing a payment transaction.

(2) Derive more than 25 percent of gross revenue from the sale of personal data, regardless of the number of consumers whose data the person controls or processes.

(Act 2026-552, §3.)

§ 8-44-4 Exemptions; Compliance with Verifiable Parental Consent Requirements

(a) Notwithstanding any other provisions of this chapter, this chapter shall not apply to any of the following:

(1)a. A political subdivision of the state.

b. Any board, authority, district, or public corporation organized pursuant to Title 11 or Chapter 7 of Title 39.

(2) A two-year or four-year institution of higher education, including affiliates of a two-year or four-year institution of higher education.

(3) A national securities association that is registered under 15 U.S.C. § 78o-3.

(4) A financial institution or an affiliate of a financial institution governed by 15 U.S.C. Chapter 94.

(5) A financial institution or an affiliate of a financial institution governed by, or personal data collected, processed, sold, or disclosed in accordance with, Title V of the Gramm-Leach-Bliley Financial Modernization Act, 15 U.S.C. § 6801 et. seq.

(6) A covered entity or business associate as defined in the privacy regulations of 45 C.F.R. § 160.103.

(7) A business, including an organization cooperatively organized under Chapter 6 of Title 37, or an entity that is an instrumentality of a municipal corporation, with fewer than 500 employees, provided the business does not engage in the sale of personal data.

(8) A nonprofit entity, as defined in Section 10A-1-1.03, with less than 100 employees, provided the entity does not engage in the sale of personal data.

(9) Any individual or entity regulated by Chapter 6 of Title 8.

(10) Any individual or entity regulated by Chapter 7A of Title 8.

(11) Any trade association explicitly authorized to receive documents or evidence pursuant to Section 27-12A-23.

(12)a. A political action committee, political party, or principal campaign committee, as defined in Section 17-5-2, or any political organization as defined in 26 U.S.C. § 527.

b. A business entity that sells data primarily to a political action committee, political party, or principal campaign committee, as defined in Section 17-5-2, or any political organization as defined in 26 U.S.C. § 527.

(13) An electric provider as defined under Chapter 16 of Title 37, which is subject to the requirements or reliability standards of the North American Electric Reliability Corporation.

(b) This chapter shall not apply to any of the following information or data:

(1) Protected health information under the privacy regulations of the federal Health Insurance Portability and Accountability Act of 1996 and related regulations.

(2) Patient-identifying information for the purposes of 42 C.F.R. Part 2, established pursuant to 42 U.S.C. § 290dd-2.

(3) Identifiable private information for the purposes of 45 C.F.R. Part 46.

(4) Identifiable private information that is otherwise collected as part of human subjects research pursuant to the good clinical practice guidelines issued by the International Council for Harmonisation of Technical Requirements for Pharmaceuticals for Human Use.

(5) The protection of human subjects under 21 C.F.R. Parts 50 and 56, or personal data used or shared in research as defined in the federal Health Insurance Portability and Accountability Act of 1996 and 45 C.F.R. § 164.501, which is conducted in accordance with applicable law.

(6) Information or documents created for the purposes of the federal Health Care Quality Improvement Act of 1986.

(7) Patient safety work products for the purposes of the federal Patient Safety and Quality Improvement Act of 2005.

(8) Information derived from any of the health care related information listed in this subsection which is deidentified in accordance with the requirements for deidentification pursuant to the privacy regulations of the federal Health Insurance Portability and Accountability Act of 1996.

(9) Information derived from any of the health care related information listed in this subsection which is included in a limited data set as described in 45 C.F.R. § 164.514(e), to the extent that the information is used, disclosed, and maintained in a manner specified in 45 C.F.R. § 164.514(e).

(10) Information originating from and intermingled to be indistinguishable with or information treated in the same manner as information exempt under this subsection which is maintained by a covered entity or business associate as defined in the privacy regulations of the federal Health Insurance Portability and Accountability Act of 1996 or a program or qualified service organization as specified in 42 U.S.C. § 290dd-2.

(11) Information used for public health activities and purposes as authorized by the federal Health Insurance Portability and Accountability Act of 1996, community health activities, and population health activities.

(12) The collection, maintenance, disclosure, sale, communication, or use of any personal information bearing on a consumer’s credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living by a consumer reporting agency, furnisher, or user that provides information for use in a consumer report and by a user of a consumer report, but only to the extent that the activity is regulated by and authorized under the federal Fair Credit Reporting Act.

(13) Personal data collected, processed, sold, or disclosed in compliance with the federal Driver’s Privacy Protection Act of 1994.

(14) Personal data regulated by the federal Family Educational Rights and Privacy Act of 1974.

(15) Personal data collected, processed, sold, or disclosed in compliance with the federal Farm Credit Act of 1971.

(16) Data processed or maintained by an individual applying to, employed by, or acting as an agent or independent contractor of a controller, processor, or third party to the extent that the data is collected and used within the context of that role.

(17) Data processed or maintained as the emergency contact information of an individual under this chapter and used for emergency contact purposes.

(18) Data processed or maintained that is necessary to retain to administer benefits for another individual relating to the individual who is the subject of the information under this section and is used for the purposes of administering the benefits.

(19) Personal data collected, processed, sold, or disclosed in relation to price, route, or service, as these terms are used in the federal Airline Deregulation Act of 1978 by an air carrier subject to the act.

(20) Data or information collected or processed to comply with or in accordance with state law.

(21) Personal data collected or used pursuant to 21 U.S.C. § 830.

(c) Controllers and processors that comply with the verifiable parental consent requirements of the federal Children’s Online Privacy Protection Act of 1998 are compliant with any obligation to obtain parental consent pursuant to this chapter.

(Act 2026-552, §4.)

§ 8-44-5 Exercise of Consumer Rights; Requests and Compliance

(a) Subject to authentication and any other conditions or limitations provided by this chapter, a consumer may invoke the rights authorized pursuant to this subsection at any time by submitting a request to a controller specifying the consumer right the consumer seeks to invoke. A controller shall comply with an authenticated request to do any of the following:

(1) Confirm whether a controller, or a processor or third party acting on a controller’s behalf, is processing the consumer’s personal data and accessing any of the consumer’s personal data under the control of the controller, unless confirmation or access would require the controller to reveal a trade secret.

(2) Correct inaccuracies in the consumer’s personal data, considering the nature of the personal data and the purposes of the processing of the consumer’s personal data.

(3) Direct a controller to delete the consumer’s personal data.

(4) Obtain a copy of the consumer’s personal data previously provided by the consumer to a controller in a portable and, to the extent technically feasible, readily usable format that allows the consumer to transmit the personal data to another controller without hindrance when the processing is carried out by automated means, unless the provision of the data would require the controller to reveal a trade secret.

(5) Opt out of the processing of the consumer’s personal data for any of the following purposes:

a. Targeted advertising.

b. The sale of the consumer’s personal data.

c. Profiling in furtherance of solely automated significant decisions concerning the consumer.

(b) A controller shall establish a secure and reliable method for a consumer to exercise rights established by this section and shall describe the method in the controller’s privacy notice.

(c)(1) A parent or legal guardian of a known child may exercise the consumer’s rights on behalf of the known child regarding the processing of personal data.

(2) A guardian or conservator of a consumer may exercise the consumer’s rights on behalf of the consumer regarding the processing of personal data.

(d) Except as otherwise provided in this chapter, a controller shall comply with a request by a consumer to exercise the consumer’s rights authorized by this section as follows:

(1)a. A controller shall respond to a consumer’s request within 45 days of receipt of the request.

b. A controller may extend the response period by 45 additional days, when reasonably necessary considering the complexity and number of the consumer’s requests, by notifying the consumer of the extension and the reason for the extension within the initial 45-day response period.

(2) If a controller declines to act regarding a consumer’s request, the controller shall inform the consumer of the justification for declining to act within 45 days of receipt of the request.

(3) Information provided in response to a consumer request must be provided by a controller, free of charge, once for each consumer during any 12-month period. If a consumer’s requests are manifestly unfounded, excessive, technically infeasible, or repetitive, the controller may charge the consumer a reasonable fee to cover the administrative costs of complying with a request or decline to act on a request. Upon inquiry by an enforcement authority, the controller bears the burden of demonstrating the manifestly unfounded, excessive, technically infeasible, or repetitive nature of a request.

(4) If a controller is unable to authenticate a consumer’s request using commercially reasonable efforts, the controller shall not be required to comply with a request to initiate an action pursuant to this section and shall provide notice to the consumer that the controller is unable to authenticate the request until the consumer provides additional information reasonably necessary to authenticate the consumer and the request. A controller is not required to authenticate an opt-out request, but a controller may deny an opt-out request if the controller has a good faith, reasonable, and documented belief that the request is fraudulent or otherwise not authorized. If a controller denies an opt-out request because the controller believes the request is fraudulent or not authorized, the controller shall send notice to the person who made the request disclosing that the controller believes the request is fraudulent or not authorized and that the controller may not comply with the request.

(5) A controller that has obtained personal data about a consumer from a source other than the consumer is in compliance with a consumer’s request to delete the consumer’s data if the controller has done either of the following:

a. Retained a record of the deletion request and the minimum data necessary for the purpose of ensuring the consumer’s personal data remains deleted from the controller’s records and refrains from using the retained data for any other purpose.

b. Opted the consumer out of any further processing of the consumer’s personal data for any purpose except for those exempted pursuant to this chapter.

(Act 2026-552, §5.)

§ 8-44-6 Opt-Out Procedures

(a) A parent or legal guardian of a known child or a guardian or conservator of a consumer may act on the known child’s or the consumer’s behalf to opt out of the processing of the known child’s or the consumer’s personal data for one or more of the purposes specified in Section 8-44-5.

(b) A controller must allow a consumer to opt out by providing a clear and conspicuous link on the controller’s Internet website to an Internet web page that enables a consumer directly to opt out of any processing of the consumer’s personal data for the purposes of targeted advertising or sale of the consumer’s personal data, or provides up-to-date contact information for a consumer to submit the opt-out request.

(c)(1) If a consumer’s decision to opt out of any processing of the consumer’s personal data for the purposes of targeted advertising, or any sale of personal data, through an opt-out preference signal sent in accordance with this section conflicts with the consumer’s existing controller-specific privacy setting or voluntary participation in a controller’s bona fide loyalty, rewards, premium features, discounts, or club card program, the controller shall comply with the consumer’s opt-out preference signal but may notify the consumer of the conflict and provide the choice to confirm controller-specific privacy settings or participation in such a program.

(2) If a controller responds to consumer opt-out requests received in accordance with this section by informing the consumer of a charge for the use of any product or service, the controller shall present the terms of any financial incentive offered pursuant to this section for the retention, use, sale, or sharing of the consumer’s personal data.

(Act 2026-552, §6.)

§ 8-44-7 Controller Obligations; Waiver or Limitations of Consumer Rights

(a) A controller shall do all of the following:

(1) Limit the collection of personal data to what is adequate, relevant, and reasonably necessary in relation to the purposes for which the personal data is processed.

(2) Establish, implement, and maintain reasonable administrative, technical, and physical data security practices to protect the confidentiality, integrity, and accessibility of personal data appropriate to the volume and nature of the personal data at issue.

(3) Provide an effective mechanism for a consumer to revoke the consumer’s consent under this chapter which is at least as easy as the mechanism by which the consumer provided the consumer’s consent and, on revocation of the consent, cease to further process the personal data as soon as practicable, but no later than 45 days after complying with the consumer’s opt-out request consistent with this chapter.

(b) A controller may not do any of the following:

(1) Except as provided in this chapter, process personal data for purposes that are not reasonably necessary to or compatible with the disclosed purposes for which the personal data is processed as disclosed by the controller.

(2) Process sensitive data concerning a consumer other than a known child without obtaining that consumer’s consent or, in the case of the processing of personal data concerning a known child, without processing the data in accordance with the federal Children’s Online Privacy Protection Act of 1998, 15 U.S.C. § 6501 et seq.

(3) Process personal data in violation of the laws of this state or federal laws that prohibit unlawful discrimination against consumers.

(4) Process the personal data of a consumer for the purposes of targeted advertising or sell a consumer’s personal data without the consumer’s consent under circumstances in which a controller has actual knowledge that the consumer is at least 13 years of age but younger than 16 years of age.

(5) Deny goods or services, charge different prices or rates for goods or services, or provide a different level of quality of goods or services to a consumer if the consumer opts out of the processing of the consumer’s data. However, if a consumer opts out of data processing, the covered entity is not required to provide a service that requires data processing. Controllers may provide different prices or levels for goods or services if the good or service is a bona fide loyalty, rewards, premium features, discount, or club card program in which a consumer voluntarily participates.

(c) If a controller sells personal data to third parties or processes personal data for targeted advertising, the controller shall clearly and conspicuously disclose the processing, as well as the way a consumer may exercise the right to opt out of the processing.

(d) A controller shall provide consumers with a reasonably accurate, clear, and meaningful privacy notice that includes all of the following:

(1) The categories of personal data processed by the controller.

(2) The purpose for processing personal data.

(3) The categories of personal data that the controller shares with third parties, if any.

(4) The categories of third parties, if any, with which the controller shares personal data.

(5) An active email address or other mechanism that the consumer may use to contact the controller.

(6) How consumers may exercise their consumer rights, including a link or contact information for availing themselves of the opt-out method provided in Section 8-44-6.

(e)(1) A controller shall establish and describe in a privacy notice one or more secure and reliable means for consumers to submit a request to exercise their consumer rights, as established under Section 8-44-5, pursuant to this chapter considering the ways in which consumers normally interact with the controller, the need for secure and reliable communication of consumer requests, and the ability of the controller to authenticate the identity of the consumer or authorized agent making the request.

(2) A controller may not require a consumer to create a new account to exercise consumer rights but may require a consumer to use an existing account as a means of exercising his or her consumer rights.

(f) Any provision of a contract or agreement of any kind which purports to waive or limit in any way a consumer’s consumer rights as established under this chapter shall be deemed contrary to public policy and shall be void and unenforceable.

(Act 2026-552, §7.)

§ 8-44-8 Processor Obligations; Contracts; Liability

(a) A processor shall adhere to the instructions of a controller and shall assist the controller in meeting the controller’s obligations under this chapter, considering the nature of processing and the information available to the processor, including, but not limited to, both of the following:

(1) Maintaining appropriate and reasonably practical technical and organizational measures to support the fulfillment of the controller’s obligation to respond to consumer rights requests.

(2) Assisting the controller in meeting the controller’s obligations in relation to the security of processing the personal data and in relation to the notification of a breach of security of the system of the processor to meet both the controller’s and the processor’s obligations.

(b)(1) A contract between a controller and a processor shall govern the processor’s data processing obligations with respect to processing performed on behalf of the controller.

(2) The contract shall:

a. Be binding;

b. Clearly set forth instructions for processing data;

c. Clearly set forth the nature and purpose of the processing;

d. Clearly set forth the type of data subject to processing;

e. Clearly set forth the duration of processing; and

f. Clearly set forth the rights and obligations of both parties.

(3) The contract, taking into account the nature of the processing, the relationship between the parties, and other factors, shall also require the processor to:

a. Ensure that each processor of personal data is subject to a duty of confidentiality with respect to the personal data;

b. Delete or return all personal data to the controller as requested at the end of the provision of services at the controller’s direction, unless retention of the personal data is required or permitted by law or the contract;

c. Make available to the controller all information in the processor’s possession necessary to demonstrate the processor’s compliance with the obligations of this chapter upon the reasonable request of the controller; and

d. Obligate any subcontractor processing personal data to meet the obligations of the processor with respect to the personal data.

(c) Nothing in this section may be construed to relieve a controller or processor from the liabilities imposed on the controller or processor by virtue of the controller’s or processor’s role in the processing relationship as described in this chapter.

(d) Determining whether a person is acting as a controller or processor with respect to a specific processing of data is a fact-based determination that depends on the following context in which personal data is to be processed:

(1) A person who is not limited in the processing of personal data pursuant to a controller’s instructions or who fails to adhere to a controller’s instructions is a controller and not a processor with respect to a specific processing of data.

(2) A processor that continues to adhere to a controller’s instructions with respect to a specific processing of personal data remains a processor.

(3) If a processor begins, alone or jointly with others, determining the purposes and means of the processing of personal data, the processor is a controller with respect to the processing and may be subject to an enforcement action under this chapter.

(Act 2026-552, §8.)

§ 8-44-9 Restrictions on Deidentified or Pseudonymous Data

(a) Any controller in possession of deidentified data shall do all of the following:

(1) Take measures to ensure that the deidentified data cannot reasonably be associated with an individual.

(2) Refrain from reidentifying the deidentified data when maintaining and using deidentified data.

(3) Contractually obligate any recipients of the deidentified data to comply with all provisions of this section.

(b) Nothing in this chapter may be construed to require a controller to do any of the following:

(1) Reidentify deidentified data or pseudonymous data.

(2) Maintain deidentified data in an identifiable form.

(3) Collect, obtain, retain, or access any identifiable data associated with deidentified data solely for purposes of authenticating a potential consumer request regarding personal data.

(c) Nothing in this chapter may be construed to require a controller or processor to comply with an authenticated consumer rights request if the controller or processor:

(1) Is not reasonably capable of associating the request with the personal data or it would be unreasonably burdensome to associate the request with the personal data;

(2) Does not use the personal data to recognize or respond to the specific consumer who is the subject of the personal data or associate the personal data with other personal data about the same specific consumer; and

(3) Does not sell the personal data to any third party or otherwise voluntarily disclose the personal data to any third party other than a processor or subprocessor, except as otherwise permitted in this section.

(d) The rights afforded under Section 8-44-5 may not apply to pseudonymous data in cases in which the controller is able to demonstrate that any information necessary to identify the consumer is kept separately and is subject to effective technical and organizational controls that prevent the controller from accessing the information.

(e) A controller that discloses pseudonymous data or deidentified data shall exercise reasonable oversight to monitor compliance with any contractual commitments to which the pseudonymous data or deidentified data is subject and shall take appropriate steps to address any breaches of those contractual commitments.

(Act 2026-552, §9.)

§ 8-44-10 Construction of Chapter

(a) Nothing in this chapter may be construed to restrict a controller’s or processor’s ability to do any of the following:

(1) Comply with federal, state, or local ordinances or regulations.

(2) Comply with a civil, criminal, or regulatory inquiry, investigation, subpoena, or summons by federal, state, local, or other government authority.

(3) Cooperate with law enforcement agencies concerning conduct or activity that the controller or processor reasonably and in good faith believes may violate federal, state, or local ordinances, rules, or regulations.

(4) Investigate, establish, exercise, prepare for, or defend legal claims, or otherwise protect the legal rights of the controller or processor.

(5) Provide a product or service specifically requested by a consumer.

(6) Perform under a contract to which a consumer is a party, including fulfilling the terms of a written warranty.

(7) Take steps at the request of a consumer prior to entering a contract.

(8) Take immediate steps to protect an interest that is essential for the life or physical safety of the consumer or another individual and when the processing cannot be manifestly based on another legal basis.

(9) Prevent, detect, protect against, or respond to security incidents; identify theft, including identity theft, fraud, harassment, malicious or deceptive activities, or any illegal activity; preserve the integrity or security of systems; or investigate, report, or prosecute those responsible for any of these actions.

(10) Engage in public or peer-reviewed scientific or statistical research in the public interest which adheres to all other applicable ethics and privacy laws and is approved, monitored, and governed by an institutional review board that determines, or similar independent oversight entities that determine, all of the following:

a. Whether the deletion of the information is likely to provide substantial benefits that do not exclusively accrue to the controller.

b. The expected benefits of the research outweigh the privacy risks.

c. Whether the controller has implemented reasonable safeguards to mitigate privacy risks associated with research, including any risks associated with reidentification.

(11) Assist another controller, processor, or third party with any of the obligations under this chapter.

(12) Process personal data for reasons of public interest in public health, community health, or population health, but solely to the extent that the processing is both of the following:

a. Subject to suitable and specific measures to safeguard the rights of the consumer whose personal data is being processed.

b. Under the responsibility of a professional subject to confidentiality obligations under federal, state, or local law.

(b) The obligations imposed on controllers or processors under this chapter may not restrict a controller’s or processor’s ability to collect, use, or retain personal data for internal use to do any of the following:

(1) Conduct internal research to develop, improve, or repair products, services, or technology.

(2) Effectuate a product recall.

(3) Identify and repair technical errors that impair existing or intended functionality.

(4) Perform internal operations that are reasonably aligned with the expectations of the consumer or reasonably anticipated based on the consumer’s existing relationship with the controller or are otherwise compatible with processing data in furtherance of the provision of a product or service specifically requested by a consumer or the performance of a contract to which the consumer is a party.

(c) The obligations imposed on controllers or processors under this chapter may not apply when compliance by the controller or processor with this chapter would violate an evidentiary privilege under the laws of this state. Nothing in this chapter may be construed to prevent a controller or processor from providing personal data concerning a consumer to a person covered by an evidentiary privilege under the laws of this state as part of a privileged communication.

(d)(1) If, at the time a controller or processor discloses personal data to a processor or third-party controller in accordance with this chapter, the controller or processor did not have actual knowledge that the processor or third-party controller would violate this chapter, then the controller or processor may not be considered to have violated this chapter.

(2) A receiving processor or third-party controller receiving personal data from a disclosing controller or processor in compliance with this chapter is likewise not in violation of this chapter for the transgressions of the disclosing controller or processor from which the receiving processor or third-party controller receives the personal data.

(e) Nothing in this chapter may be construed to do either of the following:

(1) Impose any obligation on a controller or processor which adversely affects the rights or freedoms of any person.

(2) Apply to an individual’s processing of personal data during the individual’s personal or household activities.

(f) Personal data processed by a controller pursuant to this section may be processed to the extent that the processing is both of the following:

(1) Reasonably necessary and proportionate to the purposes listed in this section.

(2) Adequate, relevant, and limited to what is necessary in relation to the specific purposes listed in this section. The controller or processor must, when applicable, consider the nature and purpose of the collection, use, or retention of the personal data collected, used, or retained pursuant to this section. The personal data must be subject to reasonable administrative, technical, and physical measures to protect the confidentiality, integrity, and accessibility of the personal data and to reduce reasonably foreseeable risks of harm to consumers relating to the collection, use, or retention of personal data.

(g) If a controller processes personal data pursuant to an exemption in this section, the controller bears the burden of demonstrating that the processing qualifies for the exemption and complies with the requirements in this section.

(h) Processing personal data for the purposes expressly identified in this section may not solely make a legal entity a controller with respect to the processing.

(Act 2026-552, §10.)

§ 8-44-11 Enforcement of Chapter

(a) The Attorney General may enforce violations of this chapter.

(b)(1) The Attorney General, prior to initiating any action for a violation of any provision of this chapter, shall issue a notice of violation to the controller.

(2) If the controller fails to correct the violation within 45 days after receipt of the notice of violation, the Attorney General may bring an action for an injunction pursuant to this section. Upon a finding that the controller has violated this chapter and failed to correct the violation as required by this section, the court may assess a civil penalty of not more than fifteen thousand dollars ($15,000) per violation.

(3) If within the 45-day period the controller corrects the noticed violation and provides the Attorney General an express written statement that the alleged violations have been corrected and that no such further violations will occur, no action may be initiated against the controller.

(Act 2026-552, §11.)