HB2026 101ST GENERAL ASSEMBLY

LRB101 05140 TAE 50152 b

101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
HB2026

Introduced , by Rep. Michelle Mussman

SYNOPSIS AS INTRODUCED:

New Act

Creates the Digital Fair Repair Act. Provides that original equipment manufacturers shall: (i) make available to any independent repair provider or owner of equipment manufactured by the original equipment manufacturer the same diagnostic and repair documentation in the same manner as that information is made available to the manufacturer's authorized repair providers; and (ii) make available for purchase by the owner, his or her authorized agent, or any independent repair provider parts, inclusive of any updates to the embedded software of the parts, upon fair and reasonable terms. Requires original equipment manufacturers to make available for purchase by owners and independent repair providers all diagnostic repair tools incorporating the same diagnostic, repair, and remote communications capabilities that the original equipment manufacturer makes available to its own repair or engineering staff or an authorized repair provider. Requires an independent repair provider that purchases or acquires embedded software or service parts to notify the owner of the equipment in writing of certain warranties prior to performing any services on digital electronic equipment. Provides that, with one exception, an authorized provider shall have all the rights and remedies provided under the Act. Authorizes the Attorney General to seek to enjoin violations and to recover civil penalties. Requires the Attorney General to establish an outreach program to inform the public of rights under the Act. Defines terms. Excludes motor vehicle manufacturers. Provides for recovery of damages and attorney's fees. Provides for the protection of trade secrets. Effective January 1, 2020.

A BILL FOR

AN ACT concerning business.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 1. Short title. This Act may be cited as the Digital Fair Repair Act.

Section 5. Definitions. In this Act:

"Authorized repair provider" means a person or a business that has an arrangement for a definite or indefinite period in which an original equipment manufacturer grants to a separate business organization or individual a license to use a trade name, service mark, or related characteristic for the purposes of offering repair services under the name of the original equipment manufacturer.

"Digital electronic equipment" or "equipment" means a part or equipment originally manufactured for distribution and sale in the United States.

"Documentation" means any manuals, diagrams, reporting output, or service code descriptions provided to the authorized repair providers for purposes of effecting repair.

"Embedded software" means any programmable instructions provided on firmware delivered with the equipment or part for the purposes of equipment operation, including all relevant patches and fixes made by the manufacturer for this purpose, including, but not limited to, a basic internal operating system, an internal operating system, a machine code, an assembly code, a root code, and a microcode.

"Fair and reasonable terms" means an equitable price in light of relevant factors, including, but not limited to:

(1) the net cost to the authorized repair provider for similar information obtained from an original equipment manufacturer, less any discounts, rebates, or other incentive programs;

(2) the cost to the original equipment manufacturer for preparing and distributing the information, excluding any research and development costs incurred in designing and implementing, upgrading, or altering the product, but including amortized capital costs for the preparation and distribution of the information;

(3) the price charged by other original equipment manufacturers for similar information;

(4) the price charged by original equipment manufacturers for similar information prior to the launch of original equipment manufacturer web sites;

(5) the ability of aftermarket technicians or shops to afford the information;

(6) the means by which the information is distributed;

(7) the extent to which the information is used, which includes the number of users, and frequency, duration, and volume of use; and

(8) inflation.

"Firmware" means a software program or set of instructions programmed on a hardware device to allow the device to communicate with other computer hardware.

"Independent repair provider" means a person or business operating in this State that is not affiliated with an original equipment manufacturer or an original equipment manufacturer's authorized repair provider, that is engaged in the diagnosis, service, maintenance, or repair of equipment, except that an original equipment manufacturer shall be considered an independent repair provider for purposes of those instances when the original equipment manufacturer engages in the diagnosis, service, maintenance, or repair of digital equipment that is not affiliated with the original equipment manufacturer.

"Motor vehicle" means a vehicle that is designed for transporting persons or property on a street or highway and is certified by the manufacturer under all applicable federal safety and emissions standards and requirements for distribution and sale in the United States. Motor vehicle does not include:

(1) a motorcycle;

(2) a recreational off-highway vehicle; or

(3) a recreational vehicle or an auto home equipped for habitation.

"Motor vehicle dealer" means a person or business who, in the ordinary course of business, is engaged in the business of selling or leasing new motor vehicles to a person or business pursuant to a franchise agreement, has obtained a license under the Illinois Vehicle Code, and is engaged in the diagnosis, service, maintenance, or repair of motor vehicles or motor vehicle engines pursuant to that franchise agreement.

"Motor vehicle manufacturer" means a person or business engaged in the business of manufacturing or assembling new motor vehicles.

"Original equipment manufacturer" means a person or business who, in the ordinary course of its business, is engaged in the business of selling or leasing new digital electronic equipment or parts of equipment to any person or business and is engaged in the diagnosis, service, maintenance, or repair of digital electronic equipment or parts of such equipment.

"Owner" means a person or business who owns or leases a digital electronic product purchased or used in this State.

"Service parts" or "parts" means any replacement part, either new or used, made available by the original equipment manufacturer to the authorized repair provider for purposes of effecting repair.

"Trade secret" means (1) anything tangible or intangible or electronically stored or kept that constitutes, represents, evidences, or records intellectual property, including secret or confidentially held designs, processes, procedures, formulas, inventions, or improvements, (2) secret or confidentially held scientific, technical, merchandising, production, financial, business, or management information, or (3) any other trade secret as defined in 18 U.S.C. 1839 as that Section existed on January 1, 2016.

Section 10. Requirements.

(a) For equipment and parts sold and used in this State, the original equipment manufacturer of the equipment and parts shall:

(1) make available to any independent repair provider or owner of products manufactured by the original equipment manufacturer diagnostic and repair documentation, including repair technical updates and updates and corrections to embedded software, for no charge or in the same manner and in the same time frame as the original equipment manufacturer makes that diagnostic and repair documentation, including repair technical updates and updates and corrections to embedded software, available to its authorized repair provider; and

(2) make available for purchase by the owner, his or her authorized agent, or any independent repair provider, parts, inclusive of any updates to the embedded software of the parts, upon fair and reasonable terms.

Nothing in this Section requires the original equipment manufacturer to sell equipment or service parts if the parts are no longer available to the original equipment manufacturer or the authorized repair provider of the original equipment manufacturer.

(b) An original equipment manufacturer that sells any diagnostic, service, or repair documentation to any independent repair provider or to any owner in a format that is standardized with other original equipment manufacturers, and on terms and conditions more favorable than the manner and the terms and conditions pursuant to which the authorized repair provider obtains the same diagnostic, service, or repair documentation, shall be prohibited from requiring an authorized repair provider to continue purchasing diagnostic, service, or repair documentation in a proprietary format, unless such proprietary format includes diagnostic, service, or repair documentation or functionality that is not available in such standardized format.

(c) An original equipment manufacturer of equipment sold or used in this State shall make available for purchase by owners and independent repair providers all diagnostic repair tools incorporating the same diagnostic, repair, and remote communications capabilities that the original equipment manufacturer makes available to its own repair or engineering staff or an authorized repair provider.

An original equipment manufacturer shall offer such tools for sale to an owner and independent repair provider upon fair and reasonable terms. An original equipment manufacturer that provides diagnostic repair documentation to aftermarket diagnostic tool manufacturers, diagnostics providers, or service information publications and systems shall have fully satisfied its obligations under this Section and thereafter not be responsible for the content and functionality of such aftermarket diagnostic tools, diagnostics, or service information systems.

(d) Original equipment manufacturer equipment or parts sold or used in this State for the purpose of providing security-related functions may not exclude diagnostic, service, and repair documentation necessary to reset a security-related electronic function from information provided to an owner or independent repair provider. If excluded under this Act, the documentation necessary to reset an immobilizer system or security-related electronic module shall be obtained by an owner or independent repair provider through the appropriate secure data release systems.

Section 15. Notice to consumers. An independent repair provider that purchases or acquires embedded software or service parts shall, prior to performing any services on digital electronic equipment, notify the owner of the equipment in writing that:

(1) consumers should review the terms and conditions of the warranty for such digital electronic equipment as repairs not performed by an authorized repair provider could affect the terms and conditions of the warranty;

(2) warrantors cannot require that only branded parts be used with the product in order to retain the warranty;

(3) warrantors must demonstrate that a defect or damage was caused by independent repair to affect the warranty;

(4) warranties are governed by the federal Magnuson-Moss Warranty Act; and

(5) the independent repair provider is not an authorized repair provider for such digital electronic equipment.

Section 20. Rights of authorized repair provider. Except in the instance of a dispute arising between an original equipment manufacturer and its authorized repair provider related to either party's compliance with an existing authorized repair agreement, an authorized repair provider shall have all the rights and remedies provided in this Act.

Section 25. Duties of Attorney General. The Attorney General shall develop, establish, and implement a public outreach program directed at independent repair providers, consumers, and digital electronic original equipment manufacturers to inform them of their rights and responsibilities pursuant to this Act. The public outreach shall include brochures, consumer guides, posters, or any combination thereof and be made available to consumers and other stakeholders by any means deemed appropriate by such division and may include internet, radio, and print advertising. The public outreach may also identify and recruit individuals or trade organizations to assist in distributing this information and materials. The public outreach shall begin no later than the 30th day after the effective date of this Act.

Section 30. Injunctions.

(a) Whenever the Attorney General believes from satisfactory evidence that any person, firm, corporation, association, or agent or employee thereof has engaged in or is about to engage in any act or practice that is a violation of this Act, the Attorney General may bring an action in the manner provided under the Consumer Fraud and Deceptive Business Practices Act to enjoin the unlawful act or practice and to obtain restitution of any moneys or property obtained directly or indirectly by the unlawful act or practice.

(b) Before bringing an action under this Section, the Attorney General shall give the person against whom such proceeding is contemplated notice by certified mail and an opportunity to show in writing within 5 business days after receipt of notice why proceedings should not be instituted, unless the Attorney General finds, in any case seeking preliminary relief, that to give such notice and opportunity is not in the public interest.

(c) In connection with any proposed proceeding under this Section, the Attorney General is authorized to take proof and make a determination of the relevant facts and issue subpoenas.

Section 35. Limitations.

(a) Nothing in this Act shall be construed to require an original equipment manufacturer to divulge a trade secret.

(b) No provision in this Act shall be read, interpreted, or construed to abrogate, interfere with, contradict, or alter the terms of any agreement executed and in force between an authorized repair provider and an original equipment manufacturer, including, but not limited to, the performance or provision of warranty or recall repair work by an authorized repair provider on behalf of an original equipment manufacturer pursuant to such authorized repair agreement, except that any provision in such an authorized repair agreement that purports to waive, avoid, restrict, or limit an original equipment manufacturer's compliance with this Section shall be void and unenforceable.

(c) Nothing in this Act shall be construed to require an original equipment manufacturer or an authorized repair provider to provide an owner or independent repair provider access to non-diagnostic and repair documentation provided by an original equipment manufacturer to an authorized repair provider pursuant to the terms of an authorizing agreement.

Section 40. Exclusions. Nothing in this Act applies to motorcycle equipment, equipment for recreational off-highway vehicles, motor vehicle manufacturers, any product or service of a motor vehicle manufacturer, or motor vehicle dealers.

Section 45. Penalty. Any person, firm, corporation, or association or agent or employee thereof who engages in any act or practice that is a violation of this Act is liable for a civil penalty of not more than $500 for each violation, which may be recovered in a civil action brought by the Attorney General.

Section 50. Applicability. This Act applies to equipment sold or in use on or after the effective date of this Act.

Section 99. Effective date. This Act takes effect January 1, 2020.