HB0956 Engrossed LRB094 06117 DRH 37654 b

1     AN ACT concerning transportation.
 
2     Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
 
4     Section 5. The Illinois Vehicle Code is amended by changing
5 Section 5-501 as follows:
 
6     (625 ILCS 5/5-501)  (from Ch. 95 1/2, par. 5-501)
7     Sec. 5-501. Denial, suspension or revocation or
8 cancellation of a license. (a) The license of a person issued
9 under this Chapter may be denied, revoked or suspended if the
10 Secretary of State finds that the applicant, or the officer,
11 director, shareholder having a ten percent or greater ownership
12 interest in the corporation, owner, partner, trustee, manager,
13 employee or the licensee has:
14     1. Violated this Act;
15     2. Made any material misrepresentation to the Secretary of
16 State in connection with an application for a license, junking
17 certificate, salvage certificate, title or registration;
18     3. Committed a fraudulent act in connection with selling,
19 bartering, exchanging, offering for sale or otherwise dealing
20 in vehicles, chassis, essential parts, or vehicle shells;
21     4. As a new vehicle dealer has no contract with a
22 manufacturer or enfranchised distributor to sell that new
23 vehicle in this State;
24     5. Not maintained an established place of business as
25 defined in this Code;
26     6. Failed to file or produce for the Secretary of State any
27 application, report, document or other pertinent books,
28 records, documents, letters, contracts, required to be filed or
29 produced under this Code or any rule or regulation made by the
30 Secretary of State pursuant to this Code;
31     7. Previously had, within 3 years, such a license denied,
32 suspended, revoked, or cancelled under the provisions of

 

 

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1 subsection (c) (2) of this Section;
2     8. Has committed in any calendar year 3 or more violations,
3 as determined in any civil or criminal proceeding, of any one
4 or more of the following Acts:
5     a. the "Consumer Finance Act";
6     b. the "Consumer Installment Loan Act";
7     c. the "Retail Installment Sales Act";
8     d. the "Motor Vehicle Retail Installment Sales Act";
9     e. "An Act in relation to the rate of interest and other
10 charges in connection with sales on credit and the lending of
11 money", approved May 24, 1879, as amended;
12     f. "An Act to promote the welfare of wage-earners by
13 regulating the assignment of wages, and prescribing a penalty
14 for the violation thereof", approved July 1, 1935, as amended;
15     g. Part 8 of Article XII of the Code of Civil Procedure; or
16     h. the "Consumer Fraud Act";
17     9. Failed to pay any fees or taxes due under this Act, or
18 has failed to transmit any fees or taxes received by him for
19 transmittal by him to the Secretary of State or the State of
20 Illinois;
21     10. Converted an abandoned vehicle;
22     11. Used a vehicle identification plate or number assigned
23 to a vehicle other than the one to which originally assigned;
24     12. Violated the provisions of Chapter 5 of this Act, as
25 amended;
26     13. Violated the provisions of Chapter 4 of this Act, as
27 amended;
28     14. Violated the provisions of Chapter 3 of this Act, as
29 amended;
30     15. Violated Section 21-2 of the Criminal Code of 1961,
31 Criminal Trespass to Vehicles;
32     16. Made or concealed a material fact in connection with
33 his application for a license;
34     17. Acted in the capacity of a person licensed or acted as
35 a licensee under this Chapter without having a license
36 therefor;

 

 

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1     18. Failed to pay, within 90 days after a final judgment,
2 any fines assessed against the licensee pursuant to an action
3 brought under Section 5-404.
4     (b) In addition to other grounds specified in this Chapter,
5 the Secretary of State, on complaint of the Department of
6 Revenue, shall refuse the issuance or of renewal of a license,
7 or suspend or revoke such license, for any of the following
8 violations of the "Retailers' Occupation Tax Act":
9     1. Failure to make a tax return;
10     2. The filing of a fraudulent return;
11     3. Failure to pay all or part of any tax or penalty finally
12 determined to be due;
13     4. Failure to comply with the bonding requirements of the
14 "Retailers' Occupation Tax Act".
15     (b-1) In addition to other grounds specified in this
16 Chapter, the Secretary of State, on complaint of the Motor
17 Vehicle Review Board, shall refuse the issuance or renewal of a
18 license, or suspend or revoke that license, if costs or fees
19 assessed under Section 29 or Section 30 of the Motor Vehicle
20 Franchise Act have remained unpaid for a period in excess of 90
21 days after the licensee received from the Motor Vehicle Board a
22 second notice and demand for the costs or fees. The Motor
23 Vehicle Review Board must send the licensee written notice and
24 demand for payment of the fees or costs at least 2 times, and
25 the second notice and demand must be sent by certified mail.
26     (c) Cancellation of a license.
27     1. The license of a person issued under this Chapter may be
28 cancelled by the Secretary of State prior to its expiration in
29 any of the following situations:
30     A. When a license is voluntarily surrendered, by the
31 licensed person; or
32     B. If the business enterprise is a sole proprietorship,
33 which is not a franchised dealership, when the sole proprietor
34 dies or is imprisoned for any period of time exceeding 30 days;
35 or
36     C. If the license was issued to the wrong person or

 

 

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1 corporation, or contains an error on its face. If any person
2 above whose license has been cancelled wishes to apply for
3 another license, whether during the same license year or any
4 other year, that person shall be treated as any other new
5 applicant and the cancellation of the person's prior license
6 shall not, in and of itself, be a bar to the issuance of a new
7 license.
8     2. The license of a person issued under this Chapter may be
9 cancelled without a hearing when the Secretary of State is
10 notified that the applicant, or any officer, director,
11 shareholder having a 10 per cent or greater ownership interest
12 in the corporation, owner, partner, trustee, manager, employee
13 or member of the applicant or the licensee has been convicted
14 of any felony involving the selling, bartering, exchanging,
15 offering for sale, or otherwise dealing in vehicles, chassis,
16 essential parts, vehicle shells, or ownership documents
17 relating to any of the above items.
18 (Source: P.A. 86-820.)
 
19     Section 10. The Motor Vehicle Franchise Act is amended by
20 changing Section 4 as follows:
 
21     (815 ILCS 710/4)  (from Ch. 121 1/2, par. 754)
22     Sec. 4. Unfair competition and practices.
23     (a) The unfair methods of competition and unfair and
24 deceptive acts or practices listed in this Section are hereby
25 declared to be unlawful. In construing the provisions of this
26 Section, the courts may be guided by the interpretations of the
27 Federal Trade Commission Act (15 U.S.C. 45 et seq.), as from
28 time to time amended.
29     (b) It shall be deemed a violation for any manufacturer,
30 factory branch, factory representative, distributor or
31 wholesaler, distributor branch, distributor representative or
32 motor vehicle dealer to engage in any action with respect to a
33 franchise which is arbitrary, in bad faith or unconscionable
34 and which causes damage to any of the parties or to the public.

 

 

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1     (c) It shall be deemed a violation for a manufacturer, a
2 distributor, a wholesaler, a distributor branch or division, a
3 factory branch or division, or a wholesale branch or division,
4 or officer, agent or other representative thereof, to coerce,
5 or attempt to coerce, any motor vehicle dealer:
6         (1) to accept, buy or order any motor vehicle or
7     vehicles, appliances, equipment, parts or accessories
8     therefor, or any other commodity or commodities or service
9     or services which such motor vehicle dealer has not
10     voluntarily ordered or requested except items required by
11     applicable local, state or federal law; or to require a
12     motor vehicle dealer to accept, buy, order or purchase such
13     items in order to obtain any motor vehicle or vehicles or
14     any other commodity or commodities which have been ordered
15     or requested by such motor vehicle dealer;
16         (2) to order or accept delivery of any motor vehicle
17     with special features, appliances, accessories or
18     equipment not included in the list price of the motor
19     vehicles as publicly advertised by the manufacturer
20     thereof, except items required by applicable law; or
21         (3) to order for anyone any parts, accessories,
22     equipment, machinery, tools, appliances or any commodity
23     whatsoever, except items required by applicable law.
24     (d) It shall be deemed a violation for a manufacturer, a
25 distributor, a wholesaler, a distributor branch or division, or
26 officer, agent or other representative thereof:
27         (1) to adopt, change, establish or implement a plan or
28     system for the allocation and distribution of new motor
29     vehicles to motor vehicle dealers which is arbitrary or
30     capricious or to modify an existing plan so as to cause the
31     same to be arbitrary or capricious;
32         (2) to fail or refuse to advise or disclose to any
33     motor vehicle dealer having a franchise or selling
34     agreement, upon written request therefor, the basis upon
35     which new motor vehicles of the same line make are
36     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;
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 or
8     distributed by such manufacturer, distributor, wholesaler,
9     distributor branch or division, factory branch or division
10     or wholesale branch or division, any such motor vehicles as
11     are covered by such franchise or selling agreement
12     specifically publicly advertised in the State by such
13     manufacturer, distributor, wholesaler, distributor branch
14     or division, factory branch or division, or wholesale
15     branch or division to be available for immediate delivery.
16     However, the failure to deliver any motor vehicle shall not
17     be considered a violation of this Act if such failure is
18     due to an act of God, a work stoppage or delay due to a
19     strike or labor difficulty, a shortage of materials, a lack
20     of manufacturing capacity, a freight embargo or other cause
21     over which the manufacturer, distributor, or wholesaler,
22     or any agent thereof has no control;
23         (4) to coerce, or attempt to coerce, any motor vehicle
24     dealer to enter into any agreement with such manufacturer,
25     distributor, wholesaler, distributor branch or division,
26     factory branch or division, or wholesale branch or
27     division, or officer, agent or other representative
28     thereof, or to do any other act prejudicial to the dealer
29     by threatening to reduce his allocation of motor vehicles
30     or cancel any franchise or any selling agreement existing
31     between such manufacturer, distributor, wholesaler,
32     distributor branch or division, or factory branch or
33     division, or wholesale branch or division, and the dealer.
34     However, notice in good faith to any motor vehicle dealer
35     of the dealer's violation of any terms or provisions of
36     such franchise or selling agreement or of any law or

 

 

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1     regulation applicable to the conduct of a motor vehicle
2     dealer shall not constitute a violation of this Act;
3         (5) to require a franchisee to participate in an
4     advertising campaign or contest or any promotional
5     campaign, or to purchase or lease any promotional
6     materials, training materials, show room or other display
7     decorations or materials at the expense of the franchisee;
8         (6) to cancel or terminate the franchise or selling
9     agreement of a motor vehicle dealer without good cause and
10     without giving notice as hereinafter provided; to fail or
11     refuse to extend the franchise or selling agreement of a
12     motor vehicle dealer upon its expiration without good cause
13     and without giving notice as hereinafter provided; or, to
14     offer a renewal, replacement or succeeding franchise or
15     selling agreement containing terms and provisions the
16     effect of which is to substantially change or modify the
17     sales and service obligations or capital requirements of
18     the motor vehicle dealer arbitrarily and without good cause
19     and without giving notice as hereinafter provided
20     notwithstanding any term or provision of a franchise or
21     selling agreement.
22             (A) If a manufacturer, distributor, wholesaler,
23         distributor branch or division, factory branch or
24         division or wholesale branch or division intends to
25         cancel or terminate a franchise or selling agreement or
26         intends not to extend or renew a franchise or selling
27         agreement on its expiration, it shall send a letter by
28         certified mail, return receipt requested, to the
29         affected franchisee at least 60 days before the
30         effective date of the proposed action, or not later
31         than 10 days before the proposed action when the reason
32         for the action is based upon either of the following:
33                 (i) the business operations of the franchisee
34             have been abandoned or the franchisee has failed to
35             conduct customary sales and service operations
36             during customary business hours for at least 7

 

 

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1             consecutive business days unless such closing is
2             due to an act of God, strike or labor difficulty or
3             other cause over which the franchisee has no
4             control; or
5                 (ii) the conviction of or plea of nolo
6             contendere by the motor vehicle dealer or any
7             operator thereof in a court of competent
8             jurisdiction to an offense punishable by
9             imprisonment for more than two years.
10             Each notice of proposed action shall include a
11         detailed statement setting forth the specific grounds
12         for the proposed cancellation, termination, or refusal
13         to extend or renew and shall state that the dealer has
14         only 30 days from receipt of the notice to file with
15         the Motor Vehicle Review Board a written protest
16         against the proposed action.
17             (B) If a manufacturer, distributor, wholesaler,
18         distributor branch or division, factory branch or
19         division or wholesale branch or division intends to
20         change substantially or modify the sales and service
21         obligations or capital requirements of a motor vehicle
22         dealer as a condition to extending or renewing the
23         existing franchise or selling agreement of such motor
24         vehicle dealer, it shall send a letter by certified
25         mail, return receipt requested, to the affected
26         franchisee at least 60 days before the date of
27         expiration of the franchise or selling agreement. Each
28         notice of proposed action shall include a detailed
29         statement setting forth the specific grounds for the
30         proposed action and shall state that the dealer has
31         only 30 days from receipt of the notice to file with
32         the Motor Vehicle Review Board a written protest
33         against the proposed action.
34             (C) Within 30 days from receipt of the notice under
35         subparagraphs (A) and (B), the franchisee may file with
36         the Board a written protest against the proposed

 

 

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1         action.
2             When the protest has been timely filed, the Board
3         shall enter an order, fixing a date (within 60 days of
4         the date of the order), time, and place of a hearing on
5         the protest required under Sections 12 and 29 of this
6         Act, and send by certified mail, return receipt
7         requested, a copy of the order to the manufacturer that
8         filed the notice of intention of the proposed action
9         and to the protesting dealer or franchisee.
10             The manufacturer shall have the burden of proof to
11         establish that good cause exists to cancel or
12         terminate, or fail to extend or renew the franchise or
13         selling agreement of a motor vehicle dealer or
14         franchisee, and to change substantially or modify the
15         sales and service obligations or capital requirements
16         of a motor vehicle dealer as a condition to extending
17         or renewing the existing franchise or selling
18         agreement. The determination whether good cause exists
19         to cancel, terminate, or refuse to renew or extend the
20         franchise or selling agreement, or to change or modify
21         the obligations of the dealer as a condition to offer
22         renewal, replacement, or succession shall be made by
23         the Board under subsection (d) of Section 12 of this
24         Act.
25             (D) Notwithstanding the terms, conditions, or
26         provisions of a franchise or selling agreement, the
27         following shall not constitute good cause for
28         cancelling or terminating or failing to extend or renew
29         the franchise or selling agreement: (i) the change of
30         ownership or executive management of the franchisee's
31         dealership; or (ii) the fact that the franchisee or
32         owner of an interest in the franchise owns, has an
33         investment in, participates in the management of, or
34         holds a license for the sale of the same or any other
35         line make of new motor vehicles.
36             Good cause shall exist to cancel, terminate or fail

 

 

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1         to offer a renewal or replacement franchise or selling
2         agreement to all franchisees of a line make if the
3         manufacturer permanently discontinues the manufacture
4         or assembly of motor vehicles of such line make.
5             (E) The manufacturer may not cancel or terminate,
6         or fail to extend or renew a franchise or selling
7         agreement or change or modify the obligations of the
8         franchisee as a condition to offering a renewal,
9         replacement, or succeeding franchise or selling
10         agreement before the hearing process is concluded as
11         prescribed by this Act, and thereafter, if the Board
12         determines that the manufacturer has failed to meet its
13         burden of proof and that good cause does not exist to
14         allow the proposed action; or
15         (7) notwithstanding the terms of any franchise
16     agreement, to fail to indemnify and hold harmless its
17     franchised dealers against any judgment or settlement for
18     damages, including, but not limited to, court costs, expert
19     witness fees, reasonable attorneys' fees of the new motor
20     vehicle dealer, and other expenses incurred in the
21     litigation, so long as such fees and costs are reasonable,
22     arising out of complaints, claims or lawsuits including,
23     but not limited to, strict liability, negligence,
24     misrepresentation, warranty (express or implied), or
25     recision of the sale as defined in Section 2-608 of the
26     Uniform Commercial Code, to the extent that the judgment or
27     settlement relates to the alleged defective or negligent
28     manufacture, assembly or design of new motor vehicles,
29     parts or accessories or other functions by the
30     manufacturer, beyond the control of the dealer; provided
31     that, in order to provide an adequate defense, the
32     manufacturer receives notice of the filing of a complaint,
33     claim, or lawsuit within 60 days after the filing.
34     (e) It shall be deemed a violation for a manufacturer, a
35 distributor, a wholesaler, a distributor branch or division or
36 officer, agent or other representative thereof:

 

 

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1         (1) to resort to or use any false or misleading
2     advertisement in connection with his business as such
3     manufacturer, distributor, wholesaler, distributor branch
4     or division or officer, agent or other representative
5     thereof;
6         (2) to offer to sell or lease, or to sell or lease, any
7     new motor vehicle to any motor vehicle dealer at a lower
8     actual price therefor than the actual price offered to any
9     other motor vehicle dealer for the same model vehicle
10     similarly equipped or to utilize any device including, but
11     not limited to, sales promotion plans or programs which
12     result in such lesser actual price or fail to make
13     available to any motor vehicle dealer any preferential
14     pricing, incentive, rebate, finance rate, or low interest
15     loan program offered to competing motor vehicle dealers in
16     other contiguous states. However, the provisions of this
17     paragraph shall not apply to sales to a motor vehicle
18     dealer for resale to any unit of the United States
19     Government, the State or any of its political subdivisions;
20         (3) to offer to sell or lease, or to sell or lease, any
21     new motor vehicle to any person, except a wholesaler,
22     distributor or manufacturer's employees at a lower actual
23     price therefor than the actual price offered and charged to
24     a motor vehicle dealer for the same model vehicle similarly
25     equipped or to utilize any device which results in such
26     lesser actual price. However, the provisions of this
27     paragraph shall not apply to sales to a motor vehicle
28     dealer for resale to any unit of the United States
29     Government, the State or any of its political subdivisions;
30         (4) to prevent or attempt to prevent by contract or
31     otherwise any motor vehicle dealer or franchisee from
32     changing the executive management control of the motor
33     vehicle dealer or franchisee unless the franchiser, having
34     the burden of proof, proves that such change of executive
35     management will result in executive management control by a
36     person or persons who are not of good moral character or

 

 

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1     who do not meet the franchiser's existing and, with
2     consideration given to the volume of sales and service of
3     the dealership, uniformly applied minimum business
4     experience standards in the market area. However where the
5     manufacturer rejects a proposed change in executive
6     management control, the manufacturer shall give written
7     notice of his reasons to the dealer within 60 days of
8     notice to the manufacturer by the dealer of the proposed
9     change. If the manufacturer does not send a letter to the
10     franchisee by certified mail, return receipt requested,
11     within 60 days from receipt by the manufacturer of the
12     proposed change, then the change of the executive
13     management control of the franchisee shall be deemed
14     accepted as proposed by the franchisee, and the
15     manufacturer shall give immediate effect to such change;
16         (5) to prevent or attempt to prevent by contract or
17     otherwise any motor vehicle dealer from establishing or
18     changing the capital structure of his dealership or the
19     means by or through which he finances the operation
20     thereof; provided the dealer meets any reasonable capital
21     standards agreed to between the dealer and the
22     manufacturer, distributor or wholesaler, who may require
23     that the sources, method and manner by which the dealer
24     finances or intends to finance its operation, equipment or
25     facilities be fully disclosed;
26         (6) to refuse to give effect to or prevent or attempt
27     to prevent by contract or otherwise any motor vehicle
28     dealer or any officer, partner or stockholder of any motor
29     vehicle dealer from selling or transferring any part of the
30     interest of any of them to any other person or persons or
31     party or parties unless such sale or transfer is to a
32     transferee who would not otherwise qualify for a new motor
33     vehicle dealers license under "The Illinois Vehicle Code"
34     or unless the franchiser, having the burden of proof,
35     proves that such sale or transfer is to a person or party
36     who is not of good moral character or does not meet the

 

 

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1     franchiser's existing and reasonable capital standards
2     and, with consideration given to the volume of sales and
3     service of the dealership, uniformly applied minimum
4     business experience standards in the market area. However,
5     nothing herein shall be construed to prevent a franchiser
6     from implementing affirmative action programs providing
7     business opportunities for minorities or from complying
8     with applicable federal, State or local law:
9             (A) If the manufacturer intends to refuse to
10         approve the sale or transfer of all or a part of the
11         interest, then it shall, within 60 days from receipt of
12         the completed application forms generally utilized by
13         a manufacturer to conduct its review and a copy of all
14         agreements regarding the proposed transfer, send a
15         letter by certified mail, return receipt requested,
16         advising the franchisee of any refusal to approve the
17         sale or transfer of all or part of the interest and
18         shall state that the dealer only has 30 days from the
19         receipt of the notice to file with the Motor Vehicle
20         Review Board a written protest against the proposed
21         action. The notice shall set forth specific criteria
22         used to evaluate the prospective transferee and the
23         grounds for refusing to approve the sale or transfer to
24         that transferee. Within 30 days from the franchisee's
25         receipt of the manufacturer's notice, the franchisee
26         may file with the Board a written protest against the
27         proposed action.
28             When a protest has been timely filed, the Board
29         shall enter an order, fixing the date (within 60 days
30         of the date of such order), time, and place of a
31         hearing on the protest, required under Sections 12 and
32         29 of this Act, and send by certified mail, return
33         receipt requested, a copy of the order to the
34         manufacturer that filed notice of intention of the
35         proposed action and to the protesting franchisee.
36             The manufacturer shall have the burden of proof to

 

 

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1         establish that good cause exists to refuse to approve
2         the sale or transfer to the transferee. The
3         determination whether good cause exists to refuse to
4         approve the sale or transfer shall be made by the Board
5         under subdivisions (6)(B). The manufacturer shall not
6         refuse to approve the sale or transfer by a dealer or
7         an officer, partner, or stockholder of a franchise or
8         any part of the interest to any person or persons
9         before the hearing process is concluded as prescribed
10         by this Act, and thereafter if the Board determines
11         that the manufacturer has failed to meet its burden of
12         proof and that good cause does not exist to refuse to
13         approve the sale or transfer to the transferee.
14             (B) Good cause to refuse to approve such sale or
15         transfer under this Section is established when such
16         sale or transfer is to a transferee who would not
17         otherwise qualify for a new motor vehicle dealers
18         license under "The Illinois Vehicle Code" or such sale
19         or transfer is to a person or party who is not of good
20         moral character or does not meet the franchiser's
21         existing and reasonable capital standards and, with
22         consideration given to the volume of sales and service
23         of the dealership, uniformly applied minimum business
24         experience standards in the market area.
25         (7) to obtain money, goods, services, anything of
26     value, or any other benefit from any other person with whom
27     the motor vehicle dealer does business, on account of or in
28     relation to the transactions between the dealer and the
29     other person as compensation, except for services actually
30     rendered, unless such benefit is promptly accounted for and
31     transmitted to the motor vehicle dealer;
32         (8) to grant an additional franchise in the relevant
33     market area of an existing franchise of the same line make
34     or to relocate an existing motor vehicle dealership within
35     or into a relevant market area of an existing franchise of
36     the same line make. However, if the manufacturer wishes to

 

 

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1     grant such an additional franchise to an independent person
2     in a bona fide relationship in which such person is
3     prepared to make a significant investment subject to loss
4     in such a dealership, or if the manufacturer wishes to
5     relocate an existing motor vehicle dealership, then the
6     manufacturer shall send a letter by certified mail, return
7     receipt requested, to each existing dealer or dealers of
8     the same line make whose relevant market area includes the
9     proposed location of the additional or relocated franchise
10     at least 60 days before the manufacturer grants an
11     additional franchise or relocates an existing franchise of
12     the same line make within or into the relevant market area
13     of an existing franchisee of the same line make. Each
14     notice shall set forth the specific grounds for the
15     proposed grant of an additional or relocation of an
16     existing franchise and shall state that the dealer has only
17     30 days from the date of receipt of the notice to file with
18     the Motor Vehicle Review Board a written protest against
19     the proposed action. Unless the parties agree upon the
20     grant or establishment of the additional or relocated
21     franchise within 30 days from the date the notice was
22     received by the existing franchisee of the same line make
23     or any person entitled to receive such notice, the
24     franchisee or other person may file with the Board a
25     written protest against the grant or establishment of the
26     proposed additional or relocated franchise and shall state
27     that the dealer only has 30 days from the receipt of the
28     notice to file with the Motor Vehicle Review Board a
29     written protest against the proposed action.
30         When a protest has been timely filed, the Board shall
31     enter an order fixing a date (within 60 days of the date of
32     the order), time, and place of a hearing on the protest,
33     required under Sections 12 and 29 of this Act, and send by
34     certified or registered mail, return receipt requested, a
35     copy of the order to the manufacturer that filed the notice
36     of intention to grant or establish the proposed additional

 

 

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1     or relocated franchise and to the protesting dealer or
2     dealers of the same line make whose relevant market area
3     includes the proposed location of the additional or
4     relocated franchise.
5         When more than one protest is filed against the grant
6     or establishment of the additional or relocated franchise
7     of the same line make, the Board may consolidate the
8     hearings to expedite disposition of the matter. The
9     manufacturer shall have the burden of proof to establish
10     that good cause exists to allow the grant or establishment
11     of the additional or relocated franchise. The manufacturer
12     may not grant or establish the additional franchise or
13     relocate the existing franchise before the hearing process
14     is concluded as prescribed by this Act, and thereafter if
15     the Board determines that the manufacturer has failed to
16     meet its burden of proof and that good cause does not exist
17     to allow the grant or establishment of the additional
18     franchise or relocation of the existing franchise.
19         The determination whether good cause exists for
20     allowing the grant or establishment of an additional
21     franchise or relocated existing franchise, shall be made by
22     the Board under subsection (c) of Section 12 of this Act.
23     If the manufacturer seeks to enter into a contract,
24     agreement or other arrangement with any person,
25     establishing any additional motor vehicle dealership or
26     other facility, limited to the sale of factory repurchase
27     vehicles or late model vehicles, then the manufacturer
28     shall follow the notice procedures set forth in this
29     Section and the determination whether good cause exists for
30     allowing the proposed agreement shall be made by the Board
31     under subsection (c) of Section 12, with the manufacturer
32     having the burden of proof.
33             A. (Blank).
34             B. For the purposes of this Section, appointment of
35         a successor motor vehicle dealer at the same location
36         as its predecessor, or within 2 miles of such location,

 

 

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1         or the relocation of an existing dealer or franchise
2         within 2 miles of the relocating dealer's or
3         franchisee's existing location, shall not be construed
4         as a grant, establishment or the entering into of an
5         additional franchise or selling agreement, or a
6         relocation of an existing franchise. The reopening of a
7         motor vehicle dealership that has not been in operation
8         for 18 months or more shall be deemed the grant of an
9         additional franchise or selling agreement.
10             C. This Section does not apply to the relocation of
11         an existing dealership or franchise in a county having
12         a population of more than 300,000 persons when the new
13         location is within the dealer's current relevant
14         market area, provided the new location is more than 7
15         miles from the nearest dealer of the same line make.
16         This Section does not apply to the relocation of an
17         existing dealership or franchise in a county having a
18         population of less than 300,000 persons when the new
19         location is within the dealer's current relevant
20         market area, provided the new location is more than 12
21         miles from the nearest dealer of the same line make. A
22         dealer that would be farther away from the new location
23         of an existing dealership or franchise of the same line
24         make after a relocation may not file a written protest
25         against the relocation with the Motor Vehicle Review
26         Board.
27             D. Nothing in this Section shall be construed to
28         prevent a franchiser from implementing affirmative
29         action programs providing business opportunities for
30         minorities or from complying with applicable federal,
31         State or local law;
32         (9) to require a motor vehicle dealer to assent to a
33     release, assignment, novation, waiver or estoppel which
34     would relieve any person from liability imposed by this
35     Act;
36         (10) to prevent or refuse to give effect to the

 

 

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1     succession to the ownership or management control of a
2     dealership by any legatee under the will of a dealer or to
3     an heir under the laws of descent and distribution of this
4     State unless the franchisee has designated a successor to
5     the ownership or management control under the succession
6     provisions of the franchise. Unless the franchiser, having
7     the burden of proof, proves that the successor is a person
8     who is not of good moral character or does not meet the
9     franchiser's existing and reasonable capital standards
10     and, with consideration given to the volume of sales and
11     service of the dealership, uniformly applied minimum
12     business experience standards in the market area, any
13     designated successor of a dealer or franchisee may succeed
14     to the ownership or management control of a dealership
15     under the existing franchise if:
16                 (i) The designated successor gives the
17             franchiser written notice by certified mail,
18             return receipt requested, of his or her intention
19             to succeed to the ownership of the dealer within 60
20             days of the dealer's death or incapacity; and
21                 (ii) The designated successor agrees to be
22             bound by all the terms and conditions of the
23             existing franchise.
24         Notwithstanding the foregoing, in the event the motor
25     vehicle dealer or franchisee and manufacturer have duly
26     executed an agreement concerning succession rights prior
27     to the dealer's death or incapacitation, the agreement
28     shall be observed.
29             (A) If the franchiser intends to refuse to honor
30         the successor to the ownership of a deceased or
31         incapacitated dealer or franchisee under an existing
32         franchise agreement, the franchiser shall send a
33         letter by certified mail, return receipt requested, to
34         the designated successor within 60 days from receipt of
35         a proposal advising of its intent to refuse to honor
36         the succession and to discontinue the existing

 

 

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1         franchise agreement and shall state that the
2         designated successor only has 30 days from the receipt
3         of the notice to file with the Motor Vehicle Review
4         Board a written protest against the proposed action.
5         The notice shall set forth the specific grounds for the
6         refusal to honor the succession and discontinue the
7         existing franchise agreement.
8             If notice of refusal is not timely served upon the
9         designated successor, the franchise agreement shall
10         continue in effect subject to termination only as
11         otherwise permitted by paragraph (6) of subsection (d)
12         of Section 4 of this Act.
13             Within 30 days from the date the notice was
14         received by the designated successor or any other
15         person entitled to notice, the designee or other person
16         may file with the Board a written protest against the
17         proposed action.
18             When a protest has been timely filed, the Board
19         shall enter an order, fixing a date (within 60 days of
20         the date of the order), time, and place of a hearing on
21         the protest, required under Sections 12 and 29 of this
22         Act, and send by certified mail, return receipt
23         requested, a copy of the order to the franchiser that
24         filed the notice of intention of the proposed action
25         and to the protesting designee or such other person.
26             The manufacturer shall have the burden of proof to
27         establish that good cause exists to refuse to honor the
28         succession and discontinue the existing franchise
29         agreement. The determination whether good cause exists
30         to refuse to honor the succession shall be made by the
31         Board under subdivision (B) of this paragraph (10). The
32         manufacturer shall not refuse to honor the succession
33         or discontinue the existing franchise agreement before
34         the hearing process is concluded as prescribed by this
35         Act, and thereafter if the Board determines that it has
36         failed to meet its burden of proof and that good cause

 

 

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1         does not exist to refuse to honor the succession and
2         discontinue the existing franchise agreement.
3             (B) No manufacturer shall impose any conditions
4         upon honoring the succession and continuing the
5         existing franchise agreement with the designated
6         successor other than that the franchisee has
7         designated a successor to the ownership or management
8         control under the succession provisions of the
9         franchise, or that the designated successor is of good
10         moral character or meets the reasonable capital
11         standards and, with consideration given to the volume
12         of sales and service of the dealership, uniformly
13         applied minimum business experience standards in the
14         market area;
15         (11) to prevent or refuse to approve a proposal to
16     establish a successor franchise at a location previously
17     approved by the franchiser when submitted with the
18     voluntary termination by the existing franchisee unless
19     the successor franchisee would not otherwise qualify for a
20     new motor vehicle dealer's license under the Illinois
21     Vehicle Code or unless the franchiser, having the burden of
22     proof, proves that such proposed successor is not of good
23     moral character or does not meet the franchiser's existing
24     and reasonable capital standards and, with consideration
25     given to the volume of sales and service of the dealership,
26     uniformly applied minimum business experience standards in
27     the market area. However, when such a rejection of a
28     proposal is made, the manufacturer shall give written
29     notice of its reasons to the franchisee within 60 days of
30     receipt by the manufacturer of the proposal. However,
31     nothing herein shall be construed to prevent a franchiser
32     from implementing affirmative action programs providing
33     business opportunities for minorities, or from complying
34     with applicable federal, State or local law;
35         (12) to prevent or refuse to grant a franchise to a
36     person because such person owns, has investment in or

 

 

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1     participates in the management of or holds a franchise for
2     the sale of another make or line of motor vehicles within 7
3     miles of the proposed franchise location in a county having
4     a population of more than 300,000 persons, or within 12
5     miles of the proposed franchise location in a county having
6     a population of less than 300,000 persons; or
7         (13) to prevent or attempt to prevent any new motor
8     vehicle dealer from establishing any additional motor
9     vehicle dealership or other facility limited to the sale of
10     factory repurchase vehicles or late model vehicles or
11     otherwise offering for sale factory repurchase vehicles of
12     the same line make at an existing franchise by failing to
13     make available any contract, agreement or other
14     arrangement which is made available or otherwise offered to
15     any person.
16     (f) It is deemed a violation for a manufacturer, a
17 distributor, a wholesale, a distributor branch or division, a
18 factory branch or division, or a wholesale branch or division,
19 or officer, agent, broker, shareholder, except a shareholder of
20 1% or less of the outstanding shares of any class of securities
21 of a manufacturer, distributor, or wholesaler which is a
22 publicly traded corporation, or other representative, directly
23 or indirectly, to own or operate a place of business as a motor
24 vehicle franchisee or motor vehicle financing affiliate,
25 except that, this subsection shall not prohibit the ownership
26 or operation of a place of business by a manufacturer,
27 distributor, or wholesaler for a period, not to exceed 18
28 months, during the transition from one motor vehicle franchisee
29 to another; or the investment in a motor vehicle franchisee by
30 a manufacturer, distributor, or wholesaler if the investment is
31 for the sole purpose of enabling a partner or shareholder in
32 that motor vehicle franchisee to acquire an interest in that
33 motor vehicle franchisee and that partner or shareholder is not
34 otherwise employed by or associated with the manufacturer,
35 distributor, or wholesaler and would not otherwise have the
36 requisite capital investment funds to invest in the motor

 

 

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1 vehicle franchisee, and has the right to purchase the entire
2 equity interest of the manufacturer, distributor, or
3 wholesaler in the motor vehicle franchisee within a reasonable
4 period of time not to exceed 5 years.
5 (Source: P.A. 90-655, eff. 7-30-98; 91-415, eff. 1-1-00;
6 91-485, eff. 1-1-00; 91-701, eff. 5-12-00.)