Sen. Ram Villivalam
Filed: 3/3/2023
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1 | AMENDMENT TO SENATE BILL 2051
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2 | AMENDMENT NO. ______. Amend Senate Bill 2051 by replacing | ||||||
3 | everything after the enacting clause with the following:
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4 | "Section 5. The Motor Vehicle Franchise Act is amended by | ||||||
5 | changing Section 4 as follows:
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6 | (815 ILCS 710/4) (from Ch. 121 1/2, par. 754)
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7 | Sec. 4. Unfair competition and practices.
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8 | (a) The unfair methods of competition and unfair and | ||||||
9 | deceptive acts or
practices listed in this Section are hereby | ||||||
10 | declared to be unlawful. In
construing the provisions of this | ||||||
11 | Section, the courts may be guided by the
interpretations of | ||||||
12 | the Federal Trade Commission Act (15 U.S.C. 45 et
seq.), as | ||||||
13 | from time to time amended.
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14 | (b) It shall be deemed a violation for any manufacturer, | ||||||
15 | factory branch,
factory representative, distributor or | ||||||
16 | wholesaler, distributor branch,
distributor representative or |
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1 | motor vehicle dealer to engage in any action
with respect to a | ||||||
2 | franchise which is arbitrary, in bad faith or
unconscionable | ||||||
3 | and which causes damage to any of the parties or to the public.
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4 | (c) It shall be deemed a violation for a manufacturer, a | ||||||
5 | distributor,
a wholesaler, a distributor branch or division, a | ||||||
6 | factory branch or division,
or a wholesale branch or division, | ||||||
7 | or officer, agent or other representative
thereof, to coerce, | ||||||
8 | or attempt to coerce, any motor vehicle dealer:
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9 | (1) to accept, buy or order any motor vehicle or | ||||||
10 | vehicles, appliances,
equipment, parts or accessories | ||||||
11 | therefor, or any other commodity or commodities
or service | ||||||
12 | or services which such motor vehicle dealer has not | ||||||
13 | voluntarily
ordered or requested except items required by | ||||||
14 | applicable local, state or
federal law; or to require a | ||||||
15 | motor vehicle dealer to accept, buy, order or
purchase | ||||||
16 | such items in order to obtain any motor vehicle or | ||||||
17 | vehicles or any
other commodity or commodities which have | ||||||
18 | been ordered or requested by such
motor vehicle dealer;
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19 | (2) to order or accept delivery of any motor vehicle | ||||||
20 | with special
features, appliances, accessories or | ||||||
21 | equipment not included in the list
price of the motor | ||||||
22 | vehicles as publicly advertised by the manufacturer
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23 | thereof, except items required by applicable law; or
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24 | (3) to order for anyone any parts, accessories, | ||||||
25 | equipment, machinery,
tools, appliances or any commodity | ||||||
26 | whatsoever, except items required by
applicable law.
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1 | (c-5) A manufacturer, a distributor, a wholesaler, a | ||||||
2 | distributor branch or division, a factory branch or division, | ||||||
3 | or a wholesale branch or division, or officer, agent, or other | ||||||
4 | representative thereof may not: | ||||||
5 | (1) require a motor vehicle dealer to offer a | ||||||
6 | secondary product; or | ||||||
7 | | ||||||
8 | (2) prohibit a motor vehicle dealer from offering a | ||||||
9 | secondary product, including, but not limited to: | ||||||
10 | (A) service contracts; | ||||||
11 | (B) maintenance agreements; | ||||||
12 | (C) extended warranties; | ||||||
13 | (D) protection product guarantees; | ||||||
14 | (E) guaranteed asset protection waivers; | ||||||
15 | (F) insurance; | ||||||
16 | (G) replacement parts; | ||||||
17 | (H) vehicle accessories; | ||||||
18 | (I) oil; or | ||||||
19 | (J) supplies. | ||||||
20 | It is not a violation of this subsection to offer an | ||||||
21 | incentive program to motor vehicle dealers to encourage them | ||||||
22 | to sell or offer to sell a secondary product approved, | ||||||
23 | endorsed, sponsored, or offered by the manufacturer, | ||||||
24 | distributor, wholesaler, distributor branch or division, | ||||||
25 | factory branch or division, wholesale branch or division, or | ||||||
26 | officer, agent, or other representative thereof, provided the |
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1 | program does not provide vehicle sales or service incentives. | ||||||
2 | It is not a violation of this subsection to prohibit a | ||||||
3 | motor vehicle dealer from using secondary products for any | ||||||
4 | repair work paid for under the terms of a warranty, recall, | ||||||
5 | service contract, extended warranty, maintenance plan, or | ||||||
6 | certified pre-owned vehicle program established or offered by | ||||||
7 | the manufacturer, distributor, wholesaler, distributor branch | ||||||
8 | or division, factory branch or division, or wholesale branch | ||||||
9 | or division, or officer, agent, or other representative | ||||||
10 | thereof. | ||||||
11 | As used in this subsection, "secondary product" means all | ||||||
12 | products that are not new motor vehicles or original equipment | ||||||
13 | manufacturer parts. | ||||||
14 | (d) It shall be deemed a violation for a manufacturer, a | ||||||
15 | distributor,
a wholesaler, a distributor branch or division, | ||||||
16 | or officer, agent or other
representative thereof:
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17 | (1) to adopt, change, establish or implement a plan or | ||||||
18 | system for the
allocation and distribution of new motor | ||||||
19 | vehicles to motor vehicle dealers
which is arbitrary or | ||||||
20 | capricious or to modify an existing plan so as to cause
the | ||||||
21 | same to be arbitrary or capricious;
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22 | (2) to fail or refuse to advise or disclose to any | ||||||
23 | motor vehicle dealer
having a franchise or selling | ||||||
24 | agreement, upon written request therefor,
the basis upon | ||||||
25 | which new motor vehicles of the same line make are | ||||||
26 | allocated
or distributed to motor vehicle dealers in the |
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1 | State and the basis upon
which the current allocation or | ||||||
2 | distribution is being made or will be made
to such motor | ||||||
3 | vehicle dealer;
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4 | (3) to refuse to deliver in reasonable quantities and | ||||||
5 | within a reasonable
time after receipt of dealer's order, | ||||||
6 | to any motor vehicle dealer having
a franchise or selling | ||||||
7 | agreement for the retail sale of new motor vehicles
sold | ||||||
8 | or distributed by such manufacturer, distributor, | ||||||
9 | wholesaler, distributor
branch or division, factory branch | ||||||
10 | or division or wholesale branch or division,
any such | ||||||
11 | motor vehicles as are covered by such franchise or selling | ||||||
12 | agreement
specifically publicly advertised in the State by | ||||||
13 | such manufacturer,
distributor, wholesaler, distributor | ||||||
14 | branch or division, factory branch or
division, or | ||||||
15 | wholesale branch or division to be available for immediate
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16 | delivery. However, the failure to deliver any motor | ||||||
17 | vehicle shall not be
considered a violation of this Act if | ||||||
18 | such failure is due to an act of God,
a work stoppage or | ||||||
19 | delay due to a strike or labor difficulty, a shortage
of | ||||||
20 | materials, a lack of manufacturing capacity, a freight | ||||||
21 | embargo or other
cause over which the manufacturer, | ||||||
22 | distributor, or wholesaler, or any agent
thereof has no | ||||||
23 | control;
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24 | (4) to coerce, or attempt to coerce, any motor vehicle | ||||||
25 | dealer to enter
into any agreement with such manufacturer, | ||||||
26 | distributor, wholesaler, distributor
branch or division, |
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1 | factory branch or division, or wholesale branch or
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2 | division, or officer, agent or other representative | ||||||
3 | thereof, or to do any
other act prejudicial to the dealer | ||||||
4 | by threatening to reduce his allocation
of motor vehicles | ||||||
5 | or cancel any franchise or any selling agreement existing
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6 | between such manufacturer, distributor, wholesaler, | ||||||
7 | distributor branch or
division, or factory branch or | ||||||
8 | division, or wholesale branch or division,
and the dealer. | ||||||
9 | However, notice in good faith to any motor vehicle dealer
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10 | of the dealer's violation of any terms or provisions of | ||||||
11 | such franchise or
selling agreement or of any law or | ||||||
12 | regulation applicable to the conduct of
a motor vehicle | ||||||
13 | dealer shall not constitute a violation of this Act;
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14 | (5) to require a franchisee to participate in an | ||||||
15 | advertising campaign
or contest or any promotional | ||||||
16 | campaign, or to purchase or lease any promotional
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17 | materials, training materials, show room or other display | ||||||
18 | decorations or
materials at the expense of the franchisee;
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19 | (6) to cancel or terminate the franchise or selling | ||||||
20 | agreement of a
motor vehicle dealer without good cause and | ||||||
21 | without giving notice as
hereinafter provided; to fail or | ||||||
22 | refuse to extend the franchise or selling
agreement of a | ||||||
23 | motor vehicle dealer upon its expiration without good | ||||||
24 | cause
and without giving notice as hereinafter provided; | ||||||
25 | or, to offer a renewal,
replacement or succeeding | ||||||
26 | franchise or selling agreement containing terms
and |
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1 | provisions the effect of which is to substantially change | ||||||
2 | or modify the
sales and service obligations or capital | ||||||
3 | requirements of the motor vehicle
dealer arbitrarily and | ||||||
4 | without good cause and without giving notice as
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5 | hereinafter provided notwithstanding any term or provision | ||||||
6 | of a franchise
or selling agreement.
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7 | (A) If a manufacturer, distributor, wholesaler, | ||||||
8 | distributor branch or
division, factory branch or | ||||||
9 | division or wholesale branch or division intends
to | ||||||
10 | cancel or terminate a franchise or selling agreement | ||||||
11 | or intends not to
extend or renew a franchise or | ||||||
12 | selling agreement on its expiration, it shall
send a | ||||||
13 | letter by certified mail, return
receipt requested, to | ||||||
14 | the affected
franchisee at least
60 days before the | ||||||
15 | effective date of the
proposed action, or not later | ||||||
16 | than 10 days before the proposed action when the
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17 | reason for the action is based upon either of the | ||||||
18 | following:
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19 | (i) the
business operations of the franchisee | ||||||
20 | have been abandoned or
the franchisee has failed | ||||||
21 | to conduct customary sales and service operations
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22 | during customary business hours for at least 7
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23 | consecutive business
days unless such closing is | ||||||
24 | due to an act of God, strike or labor
difficulty or | ||||||
25 | other cause over which the franchisee has no | ||||||
26 | control; or
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1 | (ii) the conviction of or plea of nolo
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2 | contendere by the motor
vehicle dealer or any | ||||||
3 | operator thereof in a court of competent | ||||||
4 | jurisdiction
to an offense punishable by | ||||||
5 | imprisonment for more than two years.
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6 | Each notice of proposed action shall include a | ||||||
7 | detailed statement
setting forth the specific grounds | ||||||
8 | for the proposed cancellation, termination,
or refusal | ||||||
9 | to extend or renew and shall state that the dealer has
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10 | only 30 days from receipt of
the notice to file with | ||||||
11 | the Motor Vehicle Review Board a written protest
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12 | against the proposed action.
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13 | (B) If a manufacturer, distributor, wholesaler, | ||||||
14 | distributor branch or
division, factory branch or | ||||||
15 | division or wholesale branch or division intends
to | ||||||
16 | change substantially or modify the sales and service | ||||||
17 | obligations or
capital requirements of a motor vehicle | ||||||
18 | dealer as a condition to extending
or renewing the | ||||||
19 | existing franchise or selling agreement of such motor
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20 | vehicle dealer, it shall
send a letter by certified | ||||||
21 | mail, return receipt requested, to the affected
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22 | franchisee at
least 60
days
before the date of | ||||||
23 | expiration of the franchise or selling agreement. Each
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24 | notice of proposed action shall include a detailed | ||||||
25 | statement setting forth
the specific grounds for the | ||||||
26 | proposed action
and shall state that the dealer has |
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1 | only 30 days from receipt of
the notice to file with | ||||||
2 | the Motor Vehicle Review Board a written protest
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3 | against the proposed action.
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4 | (C) Within 30 days from receipt of the notice | ||||||
5 | under
subparagraphs (A) and (B),
the franchisee may | ||||||
6 | file with the Board a written
protest against the | ||||||
7 | proposed action.
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8 | When the protest has been timely filed, the Board | ||||||
9 | shall enter an
order,
fixing a date (within 60 days of | ||||||
10 | the date of the order), time,
and place of a hearing on | ||||||
11 | the protest required under Sections 12 and 29
of this | ||||||
12 | Act, and send by certified mail, return receipt | ||||||
13 | requested, a copy of
the order to the manufacturer | ||||||
14 | that filed the notice of intention of the
proposed | ||||||
15 | action and to the protesting dealer or franchisee.
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16 | The manufacturer shall have the burden of proof to | ||||||
17 | establish that good
cause exists to cancel or | ||||||
18 | terminate, or fail to extend or renew the franchise
or
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19 | selling agreement of a motor vehicle dealer or | ||||||
20 | franchisee, and to change
substantially or modify the | ||||||
21 | sales and service obligations or capital
requirements | ||||||
22 | of a motor vehicle dealer as a condition to extending | ||||||
23 | or renewing
the existing franchise or selling | ||||||
24 | agreement. The determination whether good
cause exists | ||||||
25 | to cancel, terminate, or refuse to renew or extend the | ||||||
26 | franchise
or selling agreement, or to change or modify |
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1 | the obligations of the dealer as a
condition to offer | ||||||
2 | renewal, replacement, or succession shall be made
by | ||||||
3 | the Board under subsection (d) of Section 12 of this | ||||||
4 | Act.
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5 | (D) Notwithstanding the terms, conditions, or | ||||||
6 | provisions of a
franchise
or selling agreement, the | ||||||
7 | following shall not constitute good cause for
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8 | cancelling or terminating or failing to extend or | ||||||
9 | renew the franchise or
selling agreement: (i) the | ||||||
10 | change of ownership or executive management of the
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11 | franchisee's dealership; or (ii)
the
fact that the | ||||||
12 | franchisee or owner of an interest in the franchise | ||||||
13 | owns, has
an investment in, participates in the | ||||||
14 | management of, or holds a license for
the sale of the | ||||||
15 | same or any other line make of new motor vehicles.
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16 | (E) The manufacturer may not cancel or terminate, | ||||||
17 | or fail to extend or
renew a franchise or selling | ||||||
18 | agreement or change or modify the obligations of
the | ||||||
19 | franchisee as a condition to offering a renewal, | ||||||
20 | replacement, or succeeding
franchise or selling | ||||||
21 | agreement before the hearing process is concluded as
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22 | prescribed by this Act, and thereafter, if the Board | ||||||
23 | determines that the
manufacturer has failed to meet | ||||||
24 | its burden of proof and that good cause does
not exist | ||||||
25 | to allow the proposed action;
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26 | (7) notwithstanding the terms of any franchise |
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1 | agreement, to fail to
indemnify and hold harmless its | ||||||
2 | franchised dealers against any judgment
or settlement for | ||||||
3 | damages, including, but not limited to, court costs, | ||||||
4 | expert
witness fees, reasonable attorneys' fees of the new | ||||||
5 | motor vehicle
dealer, and other expenses incurred in the | ||||||
6 | litigation, so long as such fees
and costs are reasonable,
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7 | arising out
of complaints, claims, or lawsuits, including, | ||||||
8 | but not limited to, strict
liability, negligence, | ||||||
9 | misrepresentation, warranty (express or implied),
or | ||||||
10 | rescission of the sale as defined in Section 2-608 of the | ||||||
11 | Uniform Commercial
Code, to the extent that the judgment | ||||||
12 | or settlement relates to the alleged
defective or | ||||||
13 | negligent manufacture, assembly or design of new motor | ||||||
14 | vehicles,
parts or accessories or other functions by the | ||||||
15 | manufacturer, beyond the
control of the dealer; provided | ||||||
16 | that, in order to provide an adequate
defense, the | ||||||
17 | manufacturer receives notice of the filing of a complaint, | ||||||
18 | claim,
or lawsuit within 60 days after the filing;
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19 | (8) to require or otherwise coerce a motor vehicle | ||||||
20 | dealer to underutilize the motor vehicle dealer's | ||||||
21 | facilities by requiring or otherwise coercing the motor | ||||||
22 | vehicle dealer to exclude or remove from the motor vehicle | ||||||
23 | dealer's facilities operations for selling or servicing of | ||||||
24 | any vehicles for which the motor vehicle dealer has a | ||||||
25 | franchise agreement with another manufacturer, | ||||||
26 | distributor, wholesaler, distribution branch or division, |
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1 | or officer, agent, or other representative thereof; | ||||||
2 | provided, however, that, in light of all existing | ||||||
3 | circumstances, (i) the motor vehicle dealer maintains a | ||||||
4 | reasonable line of credit for each make or line of new | ||||||
5 | motor vehicle, (ii) the new motor vehicle dealer remains | ||||||
6 | in compliance with any reasonable facilities requirements | ||||||
7 | of the manufacturer, (iii) no change is made in the | ||||||
8 | principal management of the new motor vehicle dealer, and | ||||||
9 | (iv) the addition of the make or line of new motor vehicles | ||||||
10 | would be reasonable. The reasonable facilities requirement | ||||||
11 | set forth in item (ii) of subsection (d)(8) shall not | ||||||
12 | include any requirement that a franchisee establish or | ||||||
13 | maintain exclusive facilities, personnel, or display | ||||||
14 | space. Any decision by a motor vehicle dealer to sell | ||||||
15 | additional makes or lines at the motor vehicle dealer's | ||||||
16 | facility shall be presumed to be reasonable, and the | ||||||
17 | manufacturer shall have the burden to overcome that | ||||||
18 | presumption. A motor vehicle dealer must provide a written | ||||||
19 | notification of its intent to add a make or line of new | ||||||
20 | motor vehicles to the manufacturer. If the manufacturer | ||||||
21 | does not respond to the motor vehicle dealer, in writing, | ||||||
22 | objecting to the addition of the make or line within 60 | ||||||
23 | days after the date that the motor vehicle dealer sends | ||||||
24 | the written notification, then the manufacturer shall be | ||||||
25 | deemed to have approved the addition of the make or line; | ||||||
26 | (9) to use or consider the performance of a motor |
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1 | vehicle dealer relating to the sale of the manufacturer's, | ||||||
2 | distributor's, or wholesaler's vehicles or the motor | ||||||
3 | vehicle dealer's ability to satisfy any minimum sales or | ||||||
4 | market share quota or responsibility relating to the sale | ||||||
5 | of the manufacturer's, distributor's, or wholesaler's new | ||||||
6 | vehicles in determining: | ||||||
7 | (A) the motor vehicle dealer's eligibility to | ||||||
8 | purchase program, certified, or other used motor | ||||||
9 | vehicles from the manufacturer, distributor, or | ||||||
10 | wholesaler; | ||||||
11 | (B) the volume, type, or model of program, | ||||||
12 | certified, or other used motor vehicles that a motor | ||||||
13 | vehicle dealer is eligible to purchase from the | ||||||
14 | manufacturer, distributor, or wholesaler; | ||||||
15 | (C) the price of any program, certified, or other | ||||||
16 | used motor vehicle that the dealer is eligible to | ||||||
17 | purchase from the manufacturer, distributor, or | ||||||
18 | wholesaler; or | ||||||
19 | (D) the availability or amount of any discount, | ||||||
20 | credit, rebate, or sales incentive that the dealer is | ||||||
21 | eligible to receive from the manufacturer, | ||||||
22 | distributor, or wholesaler for the purchase of any | ||||||
23 | program, certified, or other used motor vehicle | ||||||
24 | offered for sale by the manufacturer, distributor, or | ||||||
25 | wholesaler; | ||||||
26 | (10) to take any adverse action against a dealer |
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1 | pursuant to an export or sale-for-resale prohibition | ||||||
2 | because the dealer sold or leased a vehicle to a customer | ||||||
3 | who either exported the vehicle to a foreign country or | ||||||
4 | resold the vehicle in violation of the prohibition, unless | ||||||
5 | the export or sale-for-resale prohibition policy was | ||||||
6 | provided to the dealer in writing either electronically or | ||||||
7 | on paper, prior to the sale or lease, and the dealer knew | ||||||
8 | or reasonably should have known of the customer's intent | ||||||
9 | to export or resell the vehicle in violation of the | ||||||
10 | prohibition at the time of the sale or lease. If the dealer | ||||||
11 | causes the vehicle to be registered and titled in this or | ||||||
12 | any other state, and collects or causes to be collected | ||||||
13 | any applicable sales or use tax to this State, a | ||||||
14 | rebuttable presumption is established that the dealer did | ||||||
15 | not have reason to know of the customer's intent to resell | ||||||
16 | the vehicle; | ||||||
17 | (11) to coerce or require any dealer to construct | ||||||
18 | improvements to his or her facilities or to install new | ||||||
19 | signs or other franchiser image elements that replace or | ||||||
20 | substantially alter those improvements, signs, or | ||||||
21 | franchiser image elements completed within the past 10 | ||||||
22 | years that were required and approved by the manufacturer | ||||||
23 | or one of its affiliates. The 10-year period under this | ||||||
24 | paragraph (11) begins to run for a dealer, including that | ||||||
25 | dealer's successors and assigns, on the date that the | ||||||
26 | manufacturer gives final written approval of the facility |
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1 | improvements or installation of signs or other franchiser | ||||||
2 | image elements or the date that the dealer receives a | ||||||
3 | certificate of occupancy, whichever is later. For the | ||||||
4 | purpose of this paragraph (11), the term "substantially | ||||||
5 | alter" does not include routine maintenance, including, | ||||||
6 | but not limited to, interior painting, that is reasonably | ||||||
7 | necessary to keep a dealer facility in attractive | ||||||
8 | condition; or | ||||||
9 | (12) to require a dealer to purchase goods or services | ||||||
10 | to make improvements to the dealer's facilities from a | ||||||
11 | vendor selected, identified, or designated by a | ||||||
12 | manufacturer or one of its affiliates by agreement, | ||||||
13 | program, incentive provision, or otherwise without making | ||||||
14 | available to the dealer the option to obtain the goods or | ||||||
15 | services of substantially similar quality and overall | ||||||
16 | design from a vendor chosen by the dealer and approved by | ||||||
17 | the manufacturer; however, approval by the manufacturer | ||||||
18 | shall not be unreasonably withheld, and the dealer's | ||||||
19 | option to select a vendor shall not be available if the | ||||||
20 | manufacturer provides substantial reimbursement for the | ||||||
21 | goods or services offered. "Substantial reimbursement" | ||||||
22 | means an amount equal to or greater than the cost savings | ||||||
23 | that would result if the dealer were to utilize a vendor of | ||||||
24 | the dealer's own selection instead of using the vendor | ||||||
25 | identified by the manufacturer. For the purpose of this | ||||||
26 | paragraph (12), the term "goods" does not include movable |
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1 | displays, brochures, and promotional materials containing | ||||||
2 | material subject to the intellectual property rights of a | ||||||
3 | manufacturer. If signs, other than signs containing the | ||||||
4 | manufacturer's brand or logo or free-standing signs that | ||||||
5 | are not directly attached to a building, or other | ||||||
6 | franchiser image or design elements or trade dress are to | ||||||
7 | be leased to the dealer by a vendor selected, identified, | ||||||
8 | or designated by the manufacturer, the dealer has the | ||||||
9 | right to purchase the signs or other franchiser image or | ||||||
10 | design elements or trade dress of substantially similar | ||||||
11 | quality and design from a vendor selected by the dealer if | ||||||
12 | the signs, franchiser image or design elements, or trade | ||||||
13 | dress are approved by the manufacturer. Approval by the | ||||||
14 | manufacturer shall not be unreasonably withheld. This | ||||||
15 | paragraph (12) shall not be construed to allow a dealer or | ||||||
16 | vendor to impair, infringe upon, or eliminate, directly or | ||||||
17 | indirectly, the intellectual property rights of the | ||||||
18 | manufacturer, including, but not limited to, the | ||||||
19 | manufacturer's intellectual property rights in any | ||||||
20 | trademarks or trade dress, or other intellectual property | ||||||
21 | interests owned or controlled by the manufacturer. This | ||||||
22 | paragraph (12) shall not be construed to permit a dealer | ||||||
23 | to erect or maintain signs that do not conform to the | ||||||
24 | manufacturer's intellectual property rights or trademark | ||||||
25 | or trade dress usage guidelines. | ||||||
26 | (e) It shall be deemed a violation for a manufacturer, a |
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1 | distributor,
a wholesaler, a distributor branch or division or | ||||||
2 | officer, agent or other
representative thereof:
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3 | (1) to resort to or use any false or misleading | ||||||
4 | advertisement in
connection with his business as such | ||||||
5 | manufacturer, distributor, wholesaler,
distributor branch | ||||||
6 | or division or officer, agent or other representative
| ||||||
7 | thereof;
| ||||||
8 | (2) to offer to sell or lease, or to sell or lease, any | ||||||
9 | new motor vehicle
to any motor vehicle dealer at a lower | ||||||
10 | actual price therefor than the actual
price offered to any | ||||||
11 | other motor vehicle dealer for the same model vehicle
| ||||||
12 | similarly equipped or to utilize any device including, but | ||||||
13 | not limited to,
sales promotion plans or programs which | ||||||
14 | result in such lesser actual
price or fail to make | ||||||
15 | available to any motor vehicle dealer any
preferential | ||||||
16 | pricing, incentive, rebate, finance rate, or low interest | ||||||
17 | loan
program offered to competing motor vehicle dealers in | ||||||
18 | other contiguous states.
However, the provisions of this | ||||||
19 | paragraph shall not apply to sales
to a motor vehicle | ||||||
20 | dealer for resale to any unit of the United States
| ||||||
21 | Government, the State or any of its political | ||||||
22 | subdivisions;
| ||||||
23 | (3) to offer to sell or lease, or to sell or lease, any | ||||||
24 | new motor vehicle
to any person, except a wholesaler, | ||||||
25 | distributor or manufacturer's employees
at a lower actual | ||||||
26 | price therefor than the actual price offered and charged
|
| |||||||
| |||||||
1 | to a motor vehicle dealer for the same model vehicle | ||||||
2 | similarly equipped or
to utilize any device which results | ||||||
3 | in such lesser actual price. However,
the provisions of | ||||||
4 | this paragraph shall not apply to sales to a motor
vehicle | ||||||
5 | dealer for resale to any unit of the United States | ||||||
6 | Government, the
State or any of its political | ||||||
7 | subdivisions;
| ||||||
8 | (4) to prevent or attempt to prevent by contract or | ||||||
9 | otherwise any motor
vehicle dealer or franchisee from | ||||||
10 | changing the executive management control
of the motor
| ||||||
11 | vehicle dealer or franchisee unless the franchiser, having | ||||||
12 | the burden of
proof, proves that such change of executive | ||||||
13 | management will result in executive
management control by | ||||||
14 | a person or persons who are not of good moral character
or | ||||||
15 | who do not meet the franchiser's existing and, with | ||||||
16 | consideration given
to the volume of sales and service of | ||||||
17 | the dealership, uniformly applied
minimum business | ||||||
18 | experience standards in the market area. However, where
| ||||||
19 | the manufacturer rejects a proposed change in executive | ||||||
20 | management
control, the manufacturer shall give written | ||||||
21 | notice of his reasons to the
dealer within 60 days of | ||||||
22 | notice to the manufacturer by the dealer of
the proposed | ||||||
23 | change. If the manufacturer does not send a letter to the
| ||||||
24 | franchisee by certified mail, return receipt requested, | ||||||
25 | within 60 days from
receipt by
the manufacturer of the | ||||||
26 | proposed change, then the change of the
executive |
| |||||||
| |||||||
1 | management control of the franchisee shall be deemed
| ||||||
2 | accepted as proposed by the franchisee, and the | ||||||
3 | manufacturer shall give
immediate
effect to such change;
| ||||||
4 | (5) to prevent or attempt to prevent by contract or | ||||||
5 | otherwise any motor
vehicle dealer from establishing or | ||||||
6 | changing the capital structure of his
dealership or the | ||||||
7 | means by or through which he finances the operation | ||||||
8 | thereof;
provided the dealer meets any reasonable capital | ||||||
9 | standards agreed to between
the dealer and the | ||||||
10 | manufacturer, distributor or wholesaler, who may require
| ||||||
11 | that the sources, method and manner by which the dealer | ||||||
12 | finances or intends
to finance its operation, equipment or | ||||||
13 | facilities be fully disclosed;
| ||||||
14 | (6) to refuse to give effect to or prevent or attempt | ||||||
15 | to prevent by
contract or otherwise any motor vehicle | ||||||
16 | dealer or any officer, partner or
stockholder of any motor | ||||||
17 | vehicle dealer from selling or transferring any
part of | ||||||
18 | the interest of any of them to any other person or persons | ||||||
19 | or party
or parties unless such sale or transfer is to a | ||||||
20 | transferee who would
not otherwise qualify for a new motor | ||||||
21 | vehicle dealers license under the
Illinois Vehicle Code or | ||||||
22 | unless the franchiser, having the burden of proof,
proves | ||||||
23 | that such sale or transfer is to a person or party who is | ||||||
24 | not of
good moral character or does not meet the | ||||||
25 | franchiser's existing and reasonable
capital standards | ||||||
26 | and, with consideration given to the volume of sales and
|
| |||||||
| |||||||
1 | service of the dealership, uniformly applied minimum | ||||||
2 | business experience
standards in the market area.
However, | ||||||
3 | nothing herein shall be construed to prevent a
franchiser | ||||||
4 | from implementing affirmative action programs providing | ||||||
5 | business
opportunities for minorities or from complying | ||||||
6 | with applicable federal,
State or local law:
| ||||||
7 | (A) If the manufacturer intends to refuse to | ||||||
8 | approve the sale or
transfer of all or a part of the | ||||||
9 | interest, then it shall, within 60 days from
receipt | ||||||
10 | of the completed application forms generally utilized | ||||||
11 | by a manufacturer
to conduct its review and a copy of | ||||||
12 | all agreements regarding the proposed
transfer, send a | ||||||
13 | letter by certified mail, return receipt requested, | ||||||
14 | advising
the franchisee of any refusal to approve the | ||||||
15 | sale or transfer of all or part of
the interest
and | ||||||
16 | shall state that the dealer only has 30 days from the | ||||||
17 | receipt of the
notice to file with the Motor Vehicle | ||||||
18 | Review Board a written protest against
the proposed | ||||||
19 | action.
The
notice shall set forth specific criteria | ||||||
20 | used to evaluate the prospective
transferee and the | ||||||
21 | grounds for refusing to approve the sale or transfer | ||||||
22 | to
that transferee. Within 30 days from the | ||||||
23 | franchisee's receipt of the
manufacturer's notice, the
| ||||||
24 | franchisee may file
with the Board a written protest | ||||||
25 | against the proposed action.
| ||||||
26 | When a protest has been timely filed, the Board |
| |||||||
| |||||||
1 | shall enter an
order, fixing the date (within 60 days | ||||||
2 | of the date of such
order), time, and place of a | ||||||
3 | hearing on the protest, required under
Sections 12 and | ||||||
4 | 29 of this Act, and send by certified mail, return | ||||||
5 | receipt
requested, a copy of the order to the | ||||||
6 | manufacturer that filed notice of
intention of the | ||||||
7 | proposed action and to the protesting franchisee.
| ||||||
8 | The manufacturer shall have the burden of proof to | ||||||
9 | establish that good
cause exists to refuse to approve | ||||||
10 | the sale or transfer to the transferee. The
| ||||||
11 | determination whether good cause exists to refuse to | ||||||
12 | approve the sale or
transfer shall be made by the Board | ||||||
13 | under subdivisions (6)(B).
The manufacturer shall not | ||||||
14 | refuse to approve the sale or transfer
by
a dealer or | ||||||
15 | an officer, partner, or stockholder of a franchise or | ||||||
16 | any part
of the interest to any person or persons | ||||||
17 | before the hearing process is
concluded as prescribed | ||||||
18 | by this Act, and thereafter if the Board determines
| ||||||
19 | that the manufacturer has failed to meet its burden of | ||||||
20 | proof and that good
cause does not exist to refuse to | ||||||
21 | approve the sale or transfer to the
transferee.
| ||||||
22 | (B) Good cause to refuse to approve such sale or | ||||||
23 | transfer under this
Section is established when such | ||||||
24 | sale or transfer is to a transferee who would
not | ||||||
25 | otherwise qualify for a new motor vehicle dealers | ||||||
26 | license under the
Illinois Vehicle Code or such sale |
| |||||||
| |||||||
1 | or transfer is to a person or party who is
not of good | ||||||
2 | moral character or does not meet the franchiser's | ||||||
3 | existing and
reasonable capital standards and, with | ||||||
4 | consideration given to the volume of
sales and service | ||||||
5 | of the dealership, uniformly applied minimum business
| ||||||
6 | experience standards in the market area.
| ||||||
7 | (7) to obtain money, goods, services, anything of | ||||||
8 | value, or any other
benefit from any other person with | ||||||
9 | whom the motor vehicle dealer does business,
on account of | ||||||
10 | or in relation to the transactions between the dealer and
| ||||||
11 | the other person as compensation, except for services | ||||||
12 | actually rendered,
unless such benefit is promptly | ||||||
13 | accounted for and transmitted to the motor
vehicle dealer;
| ||||||
14 | (8) to grant an additional franchise in the relevant | ||||||
15 | market area of an
existing franchise of the same line make | ||||||
16 | or to relocate an existing motor
vehicle dealership within | ||||||
17 | or into a relevant market area of an existing
franchise of | ||||||
18 | the same line make.
However, if the manufacturer wishes to
| ||||||
19 | grant such an additional franchise to an independent | ||||||
20 | person in a bona fide
relationship in which such person is | ||||||
21 | prepared to make a significant
investment subject to loss | ||||||
22 | in such a dealership, or if the manufacturer
wishes to | ||||||
23 | relocate an existing motor vehicle dealership, then the
| ||||||
24 | manufacturer shall send a letter
by certified mail, return | ||||||
25 | receipt requested, to each existing dealer or dealers
of | ||||||
26 | the same line make whose relevant
market area includes the |
| |||||||
| |||||||
1 | proposed location of the additional or relocated
franchise | ||||||
2 | at least
60 days before the manufacturer grants an | ||||||
3 | additional franchise or relocates an
existing franchise of | ||||||
4 | the same line make within or into the relevant market
area | ||||||
5 | of an existing
franchisee of the same line make. Each | ||||||
6 | notice shall set forth the specific
grounds for the | ||||||
7 | proposed grant of an additional or relocation of an | ||||||
8 | existing
franchise and shall state that the dealer has | ||||||
9 | only 30 days from the date of receipt of the notice to file | ||||||
10 | with the Motor Vehicle Review Board a written protest | ||||||
11 | against the proposed action. Unless the parties agree upon | ||||||
12 | the grant or establishment of the
additional or relocated | ||||||
13 | franchise within 30 days from the date the
notice was
| ||||||
14 | received by the existing franchisee of the same line make | ||||||
15 | or any person
entitled to receive such notice, the | ||||||
16 | franchisee or other person may file
with the Board a | ||||||
17 | written protest against the grant or establishment of the
| ||||||
18 | proposed additional or relocated franchise.
| ||||||
19 | When a protest has been timely filed, the Board shall | ||||||
20 | enter an order
fixing a date (within 60 days of the date of | ||||||
21 | the order), time,
and place of a hearing on the protest, | ||||||
22 | required under Sections 12 and 29
of this Act, and send by | ||||||
23 | certified or registered mail, return receipt
requested, a | ||||||
24 | copy of the order to the manufacturer that filed the | ||||||
25 | notice of
intention to grant or establish the proposed | ||||||
26 | additional or relocated
franchise and to the protesting |
| |||||||
| |||||||
1 | dealer or dealers of the same line make
whose
relevant | ||||||
2 | market area includes the proposed location of the | ||||||
3 | additional or
relocated franchise.
| ||||||
4 | When more than one protest is filed against the grant | ||||||
5 | or establishment of
the
additional or relocated franchise | ||||||
6 | of the same line make, the Board may
consolidate the | ||||||
7 | hearings to expedite disposition of the matter. The
| ||||||
8 | manufacturer shall have the burden of proof to establish | ||||||
9 | that good cause
exists to allow the grant or establishment | ||||||
10 | of the additional or relocated
franchise. The manufacturer | ||||||
11 | may not grant or establish the additional
franchise or | ||||||
12 | relocate the existing franchise before the hearing process | ||||||
13 | is
concluded as prescribed by this Act, and thereafter if | ||||||
14 | the Board determines
that the manufacturer has failed to | ||||||
15 | meet its burden of proof and that good
cause does not exist | ||||||
16 | to allow the grant or establishment of the additional
| ||||||
17 | franchise or relocation of the existing franchise.
| ||||||
18 | The determination whether good cause exists for | ||||||
19 | allowing the grant or
establishment of an additional | ||||||
20 | franchise or relocated existing franchise,
shall be made | ||||||
21 | by the Board under subsection (c) of Section 12 of this | ||||||
22 | Act.
If the manufacturer seeks to enter
into a contract, | ||||||
23 | agreement or other arrangement with any person,
| ||||||
24 | establishing any additional motor vehicle dealership or | ||||||
25 | other facility,
limited to the sale of factory repurchase | ||||||
26 | vehicles or late model vehicles,
then the manufacturer |
| |||||||
| |||||||
1 | shall follow the notice procedures set forth in this
| ||||||
2 | Section and the
determination whether good cause exists | ||||||
3 | for allowing the proposed agreement
shall be made by the | ||||||
4 | Board under subsection (c) of Section 12, with the
| ||||||
5 | manufacturer having
the burden of proof.
| ||||||
6 | A. (Blank).
| ||||||
7 | B. For the purposes of this Section, appointment | ||||||
8 | of a successor motor
vehicle dealer at the same | ||||||
9 | location as its predecessor, or within 2 miles
of such | ||||||
10 | location,
or the relocation of an existing dealer or | ||||||
11 | franchise within 2 miles of
the relocating dealer's or | ||||||
12 | franchisee's existing location,
shall not be construed | ||||||
13 | as a grant, establishment or the
entering into of an | ||||||
14 | additional franchise or selling agreement, or a
| ||||||
15 | relocation of an existing franchise. The reopening
of | ||||||
16 | a motor vehicle dealership that has not been in | ||||||
17 | operation for 18 months
or more shall be deemed the | ||||||
18 | grant of an additional franchise or selling
agreement.
| ||||||
19 | C. This Section does not apply to the relocation | ||||||
20 | of an existing
dealership or franchise in a county | ||||||
21 | having a population of more than
300,000 persons when | ||||||
22 | the new location is within the dealer's current
| ||||||
23 | relevant market area, provided the new location is | ||||||
24 | more than 7 miles from
the nearest dealer of the same | ||||||
25 | line make. This Section does not apply to
the | ||||||
26 | relocation of an existing dealership or franchise in a |
| |||||||
| |||||||
1 | county having a
population of less than 300,000 | ||||||
2 | persons when the new location is within the
dealer's | ||||||
3 | current relevant market area, provided the new | ||||||
4 | location is more
than 12 miles from the nearest dealer | ||||||
5 | of the same line make. A dealer that would be farther | ||||||
6 | away
from the new location of an existing dealership | ||||||
7 | or
franchise of the same line make after a relocation | ||||||
8 | may not
file a written protest against the relocation | ||||||
9 | with the
Motor Vehicle Review Board.
| ||||||
10 | D. Nothing in this Section shall be construed to | ||||||
11 | prevent a
franchiser from implementing affirmative | ||||||
12 | action programs providing business
opportunities for | ||||||
13 | minorities or from complying with applicable federal,
| ||||||
14 | State or local law;
| ||||||
15 | (9) to require a motor vehicle dealer to assent to a | ||||||
16 | release, assignment,
novation, waiver or estoppel which | ||||||
17 | would relieve any person from liability
imposed by this | ||||||
18 | Act;
| ||||||
19 | (10) to prevent or refuse to give effect to the | ||||||
20 | succession to the
ownership or management control of a | ||||||
21 | dealership by any legatee under the
will of a dealer or to | ||||||
22 | an heir under the laws of descent and distribution
of this | ||||||
23 | State unless the franchisee has designated a successor to | ||||||
24 | the ownership
or management control under the succession | ||||||
25 | provisions of the franchise.
Unless the
franchiser, having | ||||||
26 | the burden of proof, proves that the successor
is a person |
| |||||||
| |||||||
1 | who is not of good moral character or does not meet the
| ||||||
2 | franchiser's existing and reasonable capital standards | ||||||
3 | and, with consideration
given to the volume of sales and | ||||||
4 | service of the dealership, uniformly applied
minimum | ||||||
5 | business experience standards in the market area, any | ||||||
6 | designated
successor of a dealer or franchisee may succeed | ||||||
7 | to the ownership or management
control of a dealership | ||||||
8 | under the existing franchise if:
| ||||||
9 | (i) The designated successor gives the | ||||||
10 | franchiser written notice by
certified mail, | ||||||
11 | return receipt requested, of his or her intention | ||||||
12 | to succeed to
the ownership of the dealer within | ||||||
13 | 60 days of the dealer's death or incapacity;
and
| ||||||
14 | (ii) The designated successor agrees to be | ||||||
15 | bound by all the terms
and
conditions of the | ||||||
16 | existing franchise.
| ||||||
17 | Notwithstanding the foregoing, in the event the motor | ||||||
18 | vehicle dealer or
franchisee and manufacturer have duly | ||||||
19 | executed an agreement concerning
succession rights prior | ||||||
20 | to the dealer's death or incapacitation, the agreement
| ||||||
21 | shall be observed.
| ||||||
22 | (A) If the franchiser intends to refuse to honor | ||||||
23 | the successor to the
ownership of a deceased or | ||||||
24 | incapacitated dealer or franchisee under an
existing | ||||||
25 | franchise agreement, the franchiser shall send a | ||||||
26 | letter by certified
mail, return receipt requested, to |
| |||||||
| |||||||
1 | the
designated successor within
60 days
from receipt | ||||||
2 | of a proposal advising of its intent to refuse to honor | ||||||
3 | the
succession and to discontinue the existing | ||||||
4 | franchise agreement
and shall state that the | ||||||
5 | designated successor only has 30 days from the
receipt | ||||||
6 | of the notice to file with the Motor Vehicle Review | ||||||
7 | Board a written
protest against the proposed action.
| ||||||
8 | The notice shall set forth the
specific grounds for | ||||||
9 | the refusal to honor the succession and discontinue | ||||||
10 | the
existing franchise agreement.
| ||||||
11 | If notice of refusal is not timely served upon the | ||||||
12 | designated
successor,
the franchise agreement shall | ||||||
13 | continue in effect subject to termination only as
| ||||||
14 | otherwise permitted by paragraph (6) of subsection (d) | ||||||
15 | of Section 4 of this
Act.
| ||||||
16 | Within 30 days from the date the notice was | ||||||
17 | received by the
designated
successor or any other | ||||||
18 | person entitled to notice, the designee or other
| ||||||
19 | person may file with the Board a written protest | ||||||
20 | against the proposed action.
| ||||||
21 | When a protest has been timely filed, the Board | ||||||
22 | shall enter an
order,
fixing a date (within 60 days of | ||||||
23 | the date of the order), time,
and place of a hearing on | ||||||
24 | the protest, required under Sections 12 and 29
of this | ||||||
25 | Act, and send by certified mail, return receipt | ||||||
26 | requested, a copy of
the order to the franchiser that |
| |||||||
| |||||||
1 | filed the notice of intention of the
proposed action | ||||||
2 | and to the protesting designee or such other person.
| ||||||
3 | The manufacturer shall have the burden of proof to | ||||||
4 | establish that good
cause exists to refuse to honor | ||||||
5 | the succession and discontinue the existing
franchise | ||||||
6 | agreement. The determination whether good cause exists | ||||||
7 | to refuse to
honor the succession shall be made by the | ||||||
8 | Board under subdivision (B) of this
paragraph (10). | ||||||
9 | The manufacturer shall not refuse to honor the | ||||||
10 | succession or
discontinue the existing franchise | ||||||
11 | agreement before the hearing process is
concluded as | ||||||
12 | prescribed by this Act, and thereafter if the Board | ||||||
13 | determines
that it has failed to meet its burden of | ||||||
14 | proof and that good cause does not
exist to refuse to | ||||||
15 | honor the succession and discontinue the existing
| ||||||
16 | franchise agreement.
| ||||||
17 | (B) No manufacturer shall impose any conditions | ||||||
18 | upon honoring the
succession and continuing the | ||||||
19 | existing franchise agreement with the designated
| ||||||
20 | successor other than that the franchisee has | ||||||
21 | designated a successor to the
ownership or management | ||||||
22 | control under the succession provisions of the
| ||||||
23 | franchise, or that the designated successor is of good | ||||||
24 | moral character or meets
the reasonable capital | ||||||
25 | standards and, with consideration given to the volume | ||||||
26 | of
sales and service of the dealership, uniformly |
| |||||||
| |||||||
1 | applied minimum business
experience standards in the | ||||||
2 | market area;
| ||||||
3 | (11) to prevent or refuse to approve a proposal to | ||||||
4 | establish a successor
franchise at a location previously | ||||||
5 | approved by the franchiser when submitted
with the | ||||||
6 | voluntary termination by the existing franchisee unless | ||||||
7 | the successor
franchisee would not otherwise qualify for a | ||||||
8 | new motor vehicle dealer's
license under the Illinois | ||||||
9 | Vehicle Code or unless the franchiser, having
the burden | ||||||
10 | of proof, proves that such proposed successor is not of | ||||||
11 | good
moral character or does not meet the franchiser's | ||||||
12 | existing and reasonable
capital standards and, with | ||||||
13 | consideration given to the volume of sales and
service of | ||||||
14 | the dealership, uniformly applied minimum business | ||||||
15 | experience
standards in the market area. However, when | ||||||
16 | such a rejection
of a proposal is made, the manufacturer | ||||||
17 | shall give written notice of its
reasons to the franchisee | ||||||
18 | within 60 days of receipt by the manufacturer
of the | ||||||
19 | proposal. However, nothing herein shall be construed
to | ||||||
20 | prevent a franchiser from implementing affirmative action | ||||||
21 | programs providing
business opportunities for minorities, | ||||||
22 | or from complying with applicable
federal, State or local | ||||||
23 | law;
| ||||||
24 | (12) to prevent or refuse to grant a franchise to a | ||||||
25 | person because such
person owns, has investment in or | ||||||
26 | participates in the management of or holds
a franchise for |
| |||||||
| |||||||
1 | the sale of another make or line of motor vehicles within
7 | ||||||
2 | miles of the proposed franchise location in a county | ||||||
3 | having a population
of more than 300,000 persons, or | ||||||
4 | within 12 miles of the proposed franchise
location in a | ||||||
5 | county having a population of less than 300,000
persons;
| ||||||
6 | (13) to prevent or attempt to prevent any new motor | ||||||
7 | vehicle dealer
from establishing any additional motor | ||||||
8 | vehicle dealership or other facility
limited to the sale | ||||||
9 | of factory repurchase vehicles or late model vehicles
or | ||||||
10 | otherwise offering for sale factory repurchase vehicles of | ||||||
11 | the same line
make at an existing franchise by failing to | ||||||
12 | make
available any contract, agreement or other | ||||||
13 | arrangement which is made
available or otherwise offered | ||||||
14 | to any person; or
| ||||||
15 | (14) to exercise a right of first refusal or other | ||||||
16 | right to acquire a franchise from a dealer, unless the | ||||||
17 | manufacturer: (i) notifies the dealer in writing that it | ||||||
18 | intends to exercise a right of first refusal no later than | ||||||
19 | 60 days after the manufacturer receives a notice of the | ||||||
20 | proposed transfer from the dealer and (ii) having the | ||||||
21 | burden of proof, proves that the dealer's proposed | ||||||
22 | transferee is a person who is not of good moral character | ||||||
23 | or does not meet the manufacturer's existing and | ||||||
24 | reasonable capital standards, and with consideration given | ||||||
25 | to the volume of sales and service of the dealership, | ||||||
26 | uniformly applied minimum business experience standards in |
| |||||||
| |||||||
1 | the market area. | ||||||
2 | If a manufacturer satisfies the requirements of this | ||||||
3 | paragraph and exercises a right of first refusal, the | ||||||
4 | manufacturer must: | ||||||
5 | (A) notify notifies the dealer in writing that it | ||||||
6 | intends to exercise its right to acquire the | ||||||
7 | franchise not later than 60 days after the | ||||||
8 | manufacturer's or distributor's receipt of a | ||||||
9 | notice of the proposed transfer from the dealer | ||||||
10 | and all information and documents reasonably and | ||||||
11 | customarily required by the manufacturer or | ||||||
12 | distributor supporting the proposed transfer; | ||||||
13 | (B) pay pays to the dealer the same or greater | ||||||
14 | consideration as the dealer has contracted to receive | ||||||
15 | in connection with the proposed transfer or sale of | ||||||
16 | all or substantially all of the dealership assets, | ||||||
17 | stock, or other ownership interest, including the | ||||||
18 | purchase or lease of all real property, leasehold, or | ||||||
19 | improvements related to the transfer or sale of the | ||||||
20 | dealership. Upon exercise of the right of first | ||||||
21 | refusal or such other right, the manufacturer or | ||||||
22 | distributor shall have the right to assign the lease | ||||||
23 | or to convey the real property; | ||||||
24 | (C) assume assumes all of the duties, obligations, | ||||||
25 | and liabilities contained in the agreements that were | ||||||
26 | to be assumed by the proposed transferee and with |
| |||||||
| |||||||
1 | respect to which the manufacturer or distributor | ||||||
2 | exercised the right of first refusal or other right to | ||||||
3 | acquire the franchise; and | ||||||
4 | (D) reimburse reimburses the proposed transferee | ||||||
5 | for all reasonable expenses incurred in evaluating, | ||||||
6 | investigating, and negotiating the transfer of the | ||||||
7 | dealership prior to the manufacturer's or | ||||||
8 | distributor's exercise of its right of first refusal | ||||||
9 | or other right to acquire the dealership. For purposes | ||||||
10 | of this paragraph, "reasonable expenses" includes the | ||||||
11 | usual and customary legal and accounting fees charged | ||||||
12 | for similar work, as well as expenses associated with | ||||||
13 | the evaluation and investigation of any real property | ||||||
14 | on which the dealership is operated. The proposed | ||||||
15 | transferee shall submit an itemized list of its | ||||||
16 | expenses to the manufacturer or distributor not later | ||||||
17 | than 30 days after the manufacturer's or distributor's | ||||||
18 | exercise of the right of first refusal or other right | ||||||
19 | to acquire the motor vehicle franchise. The | ||||||
20 | manufacturer or distributor shall reimburse the | ||||||
21 | proposed transferee for its expenses not later than 90 | ||||||
22 | days after receipt of the itemized list. A | ||||||
23 | manufacturer or distributor may request to be provided | ||||||
24 | with the itemized list of expenses before exercising | ||||||
25 | the manufacturer's or distributor's right of first | ||||||
26 | refusal. |
| |||||||
| |||||||
1 | Except as provided in this paragraph (14), neither the | ||||||
2 | selling dealer nor the manufacturer or distributor shall | ||||||
3 | have any liability to any person as a result of a | ||||||
4 | manufacturer or distributor exercising its right of first | ||||||
5 | refusal. | ||||||
6 | For the purpose of this paragraph, "proposed | ||||||
7 | transferee" means the person to whom the franchise would | ||||||
8 | have been transferred to, or was proposed to be | ||||||
9 | transferred to, had the right of first refusal or other | ||||||
10 | right to acquire the franchise not been exercised by the | ||||||
11 | manufacturer or distributor. | ||||||
12 | (f) It is deemed a violation for a manufacturer, a | ||||||
13 | distributor, a wholesaler,
a distributor
branch or division, a | ||||||
14 | factory branch or division, or a wholesale branch or
division, | ||||||
15 | or
officer, agent, broker, shareholder, except a shareholder | ||||||
16 | of 1% or less of the
outstanding
shares of any class of | ||||||
17 | securities of a manufacturer, distributor, or wholesaler
which | ||||||
18 | is a
publicly traded corporation, or other representative, | ||||||
19 | directly or indirectly,
to own or
operate a place of business | ||||||
20 | as a motor vehicle franchisee or motor vehicle
financing
| ||||||
21 | affiliate, except that, this subsection shall not prohibit: | ||||||
22 | (1) the ownership or
operation of a
place of business | ||||||
23 | by a manufacturer, distributor, or wholesaler for a | ||||||
24 | period,
not to exceed
18 months, during the transition | ||||||
25 | from one motor vehicle franchisee to another;
| ||||||
26 | (2) the
investment in a motor vehicle franchisee by a |
| |||||||
| |||||||
1 | manufacturer, distributor, or
wholesaler if
the investment | ||||||
2 | is for the sole purpose of enabling a partner or | ||||||
3 | shareholder in
that motor
vehicle franchisee to acquire an | ||||||
4 | interest in that motor vehicle franchisee and
that partner
| ||||||
5 | or shareholder is not otherwise employed by or associated | ||||||
6 | with the
manufacturer,
distributor, or wholesaler and | ||||||
7 | would not otherwise have the requisite capital
investment
| ||||||
8 | funds to invest in the motor vehicle franchisee, and has | ||||||
9 | the right to purchase
the entire
equity interest of the | ||||||
10 | manufacturer, distributor, or wholesaler in the motor
| ||||||
11 | vehicle
franchisee within a reasonable period of time not | ||||||
12 | to exceed 5 years; or
| ||||||
13 | (3) the ownership or operation of a place of business | ||||||
14 | by a manufacturer that manufactures only diesel engines | ||||||
15 | for installation in trucks having a gross vehicle weight | ||||||
16 | rating of more than 16,000 pounds that are required to be | ||||||
17 | registered under the Illinois Vehicle Code, provided that: | ||||||
18 | (A) the manufacturer does not otherwise | ||||||
19 | manufacture, distribute, or sell motor vehicles as | ||||||
20 | defined under Section 1-217 of the Illinois Vehicle | ||||||
21 | Code; | ||||||
22 | (B) the manufacturer owned a place of business and | ||||||
23 | it was in operation as of January 1, 2016; | ||||||
24 | (C) the manufacturer complies with all obligations | ||||||
25 | owed to dealers that are not owned, operated, or | ||||||
26 | controlled by the manufacturer, including, but not |
| |||||||
| |||||||
1 | limited to those obligations arising pursuant to | ||||||
2 | Section 6; | ||||||
3 | (D) to further avoid any acts or practices, the | ||||||
4 | effect of which may be to lessen or eliminate | ||||||
5 | competition, the manufacturer provides to dealers on | ||||||
6 | substantially equal terms access to all support for | ||||||
7 | completing repairs, including, but not limited to, | ||||||
8 | parts and assemblies, training, and technical service | ||||||
9 | bulletins, and other information concerning repairs | ||||||
10 | that the manufacturer provides to facilities that are | ||||||
11 | owned, operated, or controlled by the manufacturer; | ||||||
12 | and | ||||||
13 | (E) the manufacturer does not require that | ||||||
14 | warranty repair work be performed by a | ||||||
15 | manufacturer-owned repair facility and the | ||||||
16 | manufacturer provides any dealer that has an agreement | ||||||
17 | with the manufacturer to sell and perform warranty | ||||||
18 | repairs on the manufacturer's engines the opportunity | ||||||
19 | to perform warranty repairs on those engines, | ||||||
20 | regardless of whether the dealer sold the truck into | ||||||
21 | which the engine was installed. | ||||||
22 | (g) Notwithstanding the terms, provisions, or conditions | ||||||
23 | of any agreement or
waiver, it shall be deemed a violation for | ||||||
24 | a manufacturer, a distributor,
a wholesaler, a distributor | ||||||
25 | branch or division, a factory branch or division,
or a | ||||||
26 | wholesale branch or division, or officer, agent or other |
| |||||||
| |||||||
1 | representative
thereof, to directly or indirectly condition | ||||||
2 | the awarding of a franchise to a
prospective new motor vehicle | ||||||
3 | dealer, the addition of a line make or
franchise to an existing | ||||||
4 | dealer, the renewal of a franchise of an existing
dealer, the | ||||||
5 | approval of the relocation of an existing dealer's facility, | ||||||
6 | or the
approval of the sale or transfer of the ownership of a | ||||||
7 | franchise on the
willingness of a dealer, proposed new dealer, | ||||||
8 | or owner of an interest in the
dealership facility to enter | ||||||
9 | into a site control agreement or exclusive use
agreement | ||||||
10 | unless separate and reasonable consideration was offered and | ||||||
11 | accepted for that agreement. | ||||||
12 | For purposes of this subsection (g), the terms "site | ||||||
13 | control
agreement" and "exclusive use agreement" include any | ||||||
14 | agreement that has
the effect of either (i) requiring that the | ||||||
15 | dealer establish or maintain
exclusive dealership facilities; | ||||||
16 | or (ii) restricting the ability of the dealer, or
the ability | ||||||
17 | of the dealer's lessor in the event the dealership facility is | ||||||
18 | being
leased, to transfer, sell, lease, or change the use of | ||||||
19 | the dealership premises,
whether by sublease, lease, | ||||||
20 | collateral pledge of lease, or other similar agreement. "Site | ||||||
21 | control agreement" and "exclusive use agreement" also include | ||||||
22 | a manufacturer restricting the ability of a dealer to | ||||||
23 | transfer, sell, or lease the dealership premises by right of | ||||||
24 | first refusal to purchase or lease, option to purchase, or | ||||||
25 | option to lease if the transfer, sale, or lease of the | ||||||
26 | dealership premises is to a person who is an immediate family |
| |||||||
| |||||||
1 | member of the dealer. For the purposes of this subsection (g), | ||||||
2 | "immediate family member" means a spouse, parent, son, | ||||||
3 | daughter, son-in-law, daughter-in-law, brother, and sister. | ||||||
4 | If a manufacturer exercises any right of first refusal to | ||||||
5 | purchase or lease or option to purchase or lease with regard to | ||||||
6 | a transfer, sale, or lease of the dealership premises to a | ||||||
7 | person who is not an immediate family member of the dealer, | ||||||
8 | then (1) within 60 days from the receipt of the completed | ||||||
9 | application forms generally utilized by a manufacturer to | ||||||
10 | conduct its review and a copy of all agreements regarding the | ||||||
11 | proposed transfer, the manufacturer must notify the dealer of | ||||||
12 | its intent to exercise the right of first refusal to purchase | ||||||
13 | or lease or option to purchase or lease and (2) the exercise of | ||||||
14 | the right of first refusal to purchase or lease or option to | ||||||
15 | purchase or lease must result in the dealer receiving | ||||||
16 | consideration, terms, and conditions that either are the same | ||||||
17 | as or greater than that which they have contracted to receive | ||||||
18 | in connection with the proposed transfer, sale, or lease of | ||||||
19 | the dealership premises. | ||||||
20 | Any provision
contained in any agreement entered into on | ||||||
21 | or after November 25, 2009 (the effective date of Public Act | ||||||
22 | 96-824) that is inconsistent with the provisions of this | ||||||
23 | subsection (g) shall be
voidable at the election of the | ||||||
24 | affected dealer, prospective dealer, or owner
of an interest | ||||||
25 | in the dealership facility. | ||||||
26 | (h) For purposes of this subsection: |
| |||||||
| |||||||
1 | "Successor manufacturer" means any motor vehicle | ||||||
2 | manufacturer that, on or after January 1, 2009, acquires, | ||||||
3 | succeeds to, or
assumes any part of the business of another | ||||||
4 | manufacturer, referred to as the
"predecessor manufacturer", | ||||||
5 | as the result of any of the following: | ||||||
6 | (i) A change in ownership, operation, or control of | ||||||
7 | the predecessor
manufacturer by sale or transfer of | ||||||
8 | assets, corporate stock or other
equity interest, | ||||||
9 | assignment, merger, consolidation, combination, joint
| ||||||
10 | venture, redemption, court-approved sale, operation of law | ||||||
11 | or
otherwise. | ||||||
12 | (ii) The termination, suspension, or cessation of a | ||||||
13 | part or all of the
business operations of the predecessor | ||||||
14 | manufacturer. | ||||||
15 | (iii) The discontinuance of the sale of the product | ||||||
16 | line. | ||||||
17 | (iv) A change in distribution system by the | ||||||
18 | predecessor manufacturer,
whether through a change in | ||||||
19 | distributor or the predecessor
manufacturer's decision to | ||||||
20 | cease conducting business through a
distributor | ||||||
21 | altogether. | ||||||
22 | "Former Franchisee" means a new motor vehicle dealer that | ||||||
23 | has entered into a franchise with a predecessor manufacturer | ||||||
24 | and that has either: | ||||||
25 | (i) entered into a termination agreement or deferred | ||||||
26 | termination
agreement with a predecessor or successor |
| |||||||
| |||||||
1 | manufacturer related to
such franchise; or | ||||||
2 | (ii) has had such franchise canceled, terminated, | ||||||
3 | nonrenewed,
noncontinued, rejected, nonassumed, or | ||||||
4 | otherwise ended. | ||||||
5 | For a period of 3 years from: (i) the date that a successor | ||||||
6 | manufacturer acquires, succeeds to, or assumes any part of the | ||||||
7 | business of a predecessor manufacturer; (ii) the last day that | ||||||
8 | a former franchisee is authorized to remain in business as a | ||||||
9 | franchised dealer with respect to a particular franchise under | ||||||
10 | a termination agreement or deferred termination agreement with | ||||||
11 | a predecessor or successor manufacturer; (iii) the last day | ||||||
12 | that a former franchisee that was cancelled, terminated, | ||||||
13 | nonrenewed, noncontinued, rejected, nonassumed, or otherwise | ||||||
14 | ended by a predecessor or successor manufacturer is authorized | ||||||
15 | to remain in business as a franchised dealer with respect to a | ||||||
16 | particular franchise; or (iv) November 25, 2009 (the effective | ||||||
17 | date of Public Act 96-824), whichever is latest, it shall be | ||||||
18 | unlawful for such successor manufacturer to enter into a same | ||||||
19 | line make franchise with any
person or to permit the | ||||||
20 | relocation of any existing same line
make franchise, for a | ||||||
21 | line make of the predecessor manufacturer that would be | ||||||
22 | located or
relocated within the relevant market area of a | ||||||
23 | former franchisee who owned or leased a
dealership facility in | ||||||
24 | that relevant market area without first offering the | ||||||
25 | additional or relocated
franchise to the former franchisee, or | ||||||
26 | the designated successor of such former franchisee in the
|
| |||||||
| |||||||
1 | event the former franchisee is deceased or a person with a | ||||||
2 | disability, at no cost and without any requirements or
| ||||||
3 | restrictions other than those imposed generally on the | ||||||
4 | manufacturer's other franchisees at that
time, unless one of | ||||||
5 | the following applies: | ||||||
6 | (1) As a result of the former franchisee's | ||||||
7 | cancellation, termination,
noncontinuance, or nonrenewal | ||||||
8 | of the franchise, the predecessor
manufacturer had | ||||||
9 | consolidated the line make with another of its line makes
| ||||||
10 | for which the predecessor manufacturer had a franchisee | ||||||
11 | with a then-existing
dealership facility located within | ||||||
12 | that relevant market area. | ||||||
13 | (2) The successor manufacturer has paid the former | ||||||
14 | franchisee, or the
designated successor of such former | ||||||
15 | franchisee in the event the former
franchisee is deceased | ||||||
16 | or a person with a disability, the fair market value of the | ||||||
17 | former
franchisee's franchise on (i) the date the | ||||||
18 | franchiser announces the action which results in the | ||||||
19 | termination, cancellation, or nonrenewal; or (ii) the date | ||||||
20 | the action which results in termination, cancellation, or | ||||||
21 | nonrenewal first became general knowledge; or (iii) the | ||||||
22 | day 12 months prior to the date on which the notice of | ||||||
23 | termination, cancellation, or nonrenewal is issued, | ||||||
24 | whichever amount is higher. Payment is due within 90 days | ||||||
25 | of the effective date of the termination, cancellation, or | ||||||
26 | nonrenewal. If the termination, cancellation, or |
| |||||||
| |||||||
1 | nonrenewal is due to a manufacturer's change in | ||||||
2 | distributors, the manufacturer may avoid paying fair | ||||||
3 | market value to the dealer if the new distributor or the | ||||||
4 | manufacturer offers the dealer a franchise agreement with | ||||||
5 | terms acceptable to the dealer. | ||||||
6 | (3) The successor manufacturer proves that it would | ||||||
7 | have had good cause to terminate the franchise agreement | ||||||
8 | of the former franchisee, or the successor of the former | ||||||
9 | franchisee under item (e)(10) in the event that the former | ||||||
10 | franchisee is deceased or a person with a disability. The | ||||||
11 | determination of whether the successor manufacturer would | ||||||
12 | have had good cause to terminate the franchise agreement | ||||||
13 | of the former franchisee, or the successor of the former | ||||||
14 | franchisee, shall be made by the Board under subsection | ||||||
15 | (d) of Section 12. A successor manufacturer that seeks to | ||||||
16 | assert that it would have had good cause to terminate a | ||||||
17 | former franchisee, or the successor of the former | ||||||
18 | franchisee, must file a petition seeking a hearing on this | ||||||
19 | issue before the Board and shall have the burden of | ||||||
20 | proving that it would have had good cause to terminate the | ||||||
21 | former franchisee or the successor of the former | ||||||
22 | franchisee. No successor dealer, other than the former | ||||||
23 | franchisee, may be appointed or franchised by the | ||||||
24 | successor manufacturer within the relevant market area of | ||||||
25 | the former franchisee until the Board has held a hearing | ||||||
26 | and rendered a determination on the issue of whether the |
| |||||||
| |||||||
1 | successor manufacturer would have had good cause to | ||||||
2 | terminate the former franchisee. | ||||||
3 | In the event that a successor manufacturer attempts to | ||||||
4 | enter into a same line make franchise with any person or to | ||||||
5 | permit the relocation of any existing line make franchise | ||||||
6 | under this subsection (h) at a location that is within the | ||||||
7 | relevant market area of 2 or more former franchisees, then the | ||||||
8 | successor manufacturer may not offer it to any person other | ||||||
9 | than one of those former franchisees unless the successor | ||||||
10 | manufacturer can prove that at least one of the 3 exceptions in | ||||||
11 | items (1), (2), and (3) of this subsection (h) applies to each | ||||||
12 | of those former franchisees. | ||||||
13 | (Source: P.A. 102-433, eff. 1-1-22 .)
| ||||||
14 | Section 99. Effective date. This Act takes effect upon | ||||||
15 | becoming law.".
|