Illinois General Assembly - Bill Status for SB1417

Amends the Motor Vehicle Franchise Act. Expands the definition of the term "motor vehicle" to include any engine, transmission, or rear axle, regardless of whether it is attached to a vehicle chassis, that is manufactured for installation in any motor-driven vehicle with a gross vehicle weight rating of more than 16,000 pounds that is required to be registered under the Illinois Vehicle Code. Eliminates language providing that a manufacturer has good cause to cancel, terminate, or fail to extend or renew the franchise or selling agreement to all franchisees of a line make when the manufacturer permanently discontinues the manufacture or assembly of motor vehicles of such line make. Provides that it is a violation for a manufacturer to require or coerce a motor vehicle dealer to underutilize the motor vehicle dealer's facilities by requiring or coercing the motor vehicle dealer to cease operations for the selling or servicing of any vehicles that fall under a franchise agreement with another manufacturer. Provides an itemized list of what is considered reasonable compensation to a motor vehicle dealer for the value of the motor vehicle dealer's business and business premises, as well as a payment scheme for such compensation. Makes other changes. Effective immediately.

Qualifies the prohibition against requiring or coercing a motor vehicle dealer to underutilize the motor vehicle dealer's facilities by establishing that such action by a manufacturer or franchiser is prohibited provided certain conditions are met: (i) the motor vehicle dealer maintains a reasonable line of credit for each make or line of new motor vehicle, (ii) the new motor vehicle dealer remains in compliance with any reasonable facilities requirements of the manufacturer, (iii) no change is made in the principal management of the new motor vehicle dealer, and (iv) the addition of the make or line of new motor vehicles would be reasonable. Permits a manufacturer or franchiser to initiate an audit, charge, or reimbursement for false or unsubstantiated labor or parts claims within a one year period after the date the claim was paid or issued by the manufacturer or franchiser (rather than within a one year period after the date of the sale of the vehicle that is subject to audit by the franchiser). Eliminates language that reasonable compensation to a franchisee includes the franchisee's cost of each new motor vehicle having 1,000 or fewer miles recorded on the odometer that is in the franchisee's inventory at the time of nonrenewal, termination, or restriction, and instead provides that reasonable compensation includes the franchisee's cost of each new undamaged and unsold current and prior year motor vehicles that were acquired within 12 months of termination and have 500 or fewer miles recorded on the odometer that are in the franchisee's inventory at the time of nonrenewal, termination, or restriction and that were purchased or acquired from the manufacturer or from another dealer of the same line make in the ordinary course of business. Provides that provisions concerning reasonable compensation shall not apply to a nonrenewal or termination that is implemented as a result of a sale of the assets or stock of the franchise. Requires that payment for the franchisee's cost of each new, undamaged, and unsold current and prior year vehicles is due no later than 90 days (rather than 60 days) after the franchise is terminated or nonrenewed. Provides that a failure to compensate a motor vehicle dealer in compliance with the mandated payment scheme shall render the manufacturer, distributor, or wholesaler liable to the motor vehicle dealer for (i) interest on the amount due at a rate reasonable in light of commercial practices determined by the Motor Vehicle Review Board or an arbitrator, and (ii) reasonable attorney's fees and costs (rather than (i) the dealer cost, fair market value, or current price of the item, whichever is highest; (ii) interest on the amount due at the rate equal to the prime lending rate plus 1%; and (iii) reasonable attorney's fees and costs). Requires a manufacturer, distributor, or wholesaler to make certain compensation payments to a motor vehicle dealer if the manufacturer, distributor, or wholesaler, with good cause, (i) fails to renew a franchise on terms then equally available to all of its motor vehicle dealers, (ii) terminates a franchise, or (iii) restricts the transfer of a franchise. Further provides that noncompliance with the mandated compensation and payment scheme shall render the manufacturer, distributor, or wholesaler liable to the motor vehicle dealer for specified payments.

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