Full Text of HB0990 102nd General Assembly
HB0990ham001 102ND GENERAL ASSEMBLY | Rep. LaToya Greenwood Filed: 4/7/2022
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| 1 | | AMENDMENT TO HOUSE BILL 990
| 2 | | AMENDMENT NO. ______. Amend House Bill 990 by replacing | 3 | | everything after the enacting clause with the following:
| 4 | | "Section 5. The Motor Vehicle Franchise Act is amended by | 5 | | changing Section 4 as follows:
| 6 | | (815 ILCS 710/4) (from Ch. 121 1/2, par. 754)
| 7 | | Sec. 4. Unfair competition and practices.
| 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.
| 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.
| 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:
| 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;
| 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
| 23 | | thereof, except items required by applicable law; or
| 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:
| 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;
| 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;
| 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
| 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;
| 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
| 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
| 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
| 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;
| 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
| 17 | | materials, training materials, show room or other display | 18 | | decorations or
materials at the expense of the franchisee;
| 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
| 5 | | hereinafter provided notwithstanding any term or provision | 6 | | of a franchise
or selling agreement.
| 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
| 17 | | reason for the action is based upon either of the | 18 | | following:
| 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
| 22 | | during customary business hours for at least 7
| 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
| 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.
| 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
| 10 | | only 30 days from receipt of
the notice to file with | 11 | | the Motor Vehicle Review Board a written protest
| 12 | | against the proposed action.
| 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
| 20 | | vehicle dealer, it shall
send a letter by certified | 21 | | mail, return receipt requested, to the affected
| 22 | | franchisee at
least 60
days
before the date of | 23 | | expiration of the franchise or selling agreement. Each
| 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
| 3 | | against the proposed action.
| 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.
| 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.
| 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
| 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.
| 5 | | (D) Notwithstanding the terms, conditions, or | 6 | | provisions of a
franchise
or selling agreement, the | 7 | | following shall not constitute good cause for
| 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
| 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.
| 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
| 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;
| 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,
| 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;
| 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:
| 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
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| 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 |
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| 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
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| 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 |
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| 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 |
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| 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 |
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| 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 |
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| 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 |
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| 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 |
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| 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 |
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| 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 |
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| 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 |
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| 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 |
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| 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 |
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| 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: | 18 | | (A) notifies the dealer in writing that it intends | 19 | | to exercise its right to acquire the franchise not | 20 | | later than 60 days after the manufacturer's or | 21 | | distributor's receipt of a notice of the proposed | 22 | | transfer from the dealer and all information and | 23 | | documents reasonably and customarily required by the | 24 | | manufacturer or distributor supporting the proposed | 25 | | transfer; | 26 | | (B) pays to the dealer the same or greater |
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| 1 | | consideration as the dealer has contracted to receive | 2 | | in connection with the proposed transfer or sale of | 3 | | all or substantially all of the dealership assets, | 4 | | stock, or other ownership interest, including the | 5 | | purchase or lease of all real property, leasehold, or | 6 | | improvements related to the transfer or sale of the | 7 | | dealership. Upon exercise of the right of first | 8 | | refusal or such other right, the manufacturer or | 9 | | distributor shall have the right to assign the lease | 10 | | or to convey the real property; | 11 | | (C) assumes all of the duties, obligations, and | 12 | | liabilities contained in the agreements that were to | 13 | | be assumed by the proposed transferee and with respect | 14 | | to which the manufacturer or distributor exercised the | 15 | | right of first refusal or other right to acquire the | 16 | | franchise; | 17 | | (D) reimburses the proposed transferee for all | 18 | | reasonable expenses incurred in evaluating, | 19 | | investigating, and negotiating the transfer of the | 20 | | dealership prior to the manufacturer's or | 21 | | distributor's exercise of its right of first refusal | 22 | | or other right to acquire the dealership. For purposes | 23 | | of this paragraph, "reasonable expenses" includes the | 24 | | usual and customary legal and accounting fees charged | 25 | | for similar work, as well as expenses associated with | 26 | | the evaluation and investigation of any real property |
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| 1 | | on which the dealership is operated. The proposed | 2 | | transferee shall submit an itemized list of its | 3 | | expenses to the manufacturer or distributor not later | 4 | | than 30 days after the manufacturer's or distributor's | 5 | | exercise of the right of first refusal or other right | 6 | | to acquire the motor vehicle franchise. The | 7 | | manufacturer or distributor shall reimburse the | 8 | | proposed transferee for its expenses not later than 90 | 9 | | days after receipt of the itemized list. A | 10 | | manufacturer or distributor may request to be provided | 11 | | with the itemized list of expenses before exercising | 12 | | the manufacturer's or distributor's right of first | 13 | | refusal. | 14 | | If a manufacturer exercises a right of first refusal | 15 | | under this paragraph (14) on or after January 1, 2022 in | 16 | | order to terminate a dealership that paid at least 10% of | 17 | | the local retailers' occupation tax imposed by the | 18 | | municipality or county where the terminated dealership is | 19 | | located during the calendar year immediately prior to the | 20 | | termination, then, in addition to any amounts due under | 21 | | this paragraph, for a period of 20 consecutive years after | 22 | | the dealership is terminated, the manufacturer must pay to | 23 | | the municipality or county in which the terminated | 24 | | dealership was located an amount equal to the certified | 25 | | local retailers' occupation tax amount. For the purposes | 26 | | of this paragraph (14), the certified local retailers' |
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| 1 | | occupation tax amount is the highest amount paid by the | 2 | | dealership in any of the 5 years immediately prior to the | 3 | | year in which the dealership was terminated. | 4 | | Except as provided in this paragraph (14), neither the | 5 | | selling dealer nor the manufacturer or distributor shall | 6 | | have any liability to any person as a result of a | 7 | | manufacturer or distributor exercising its right of first | 8 | | refusal. | 9 | | For the purpose of this paragraph, "proposed | 10 | | transferee" means the person to whom the franchise would | 11 | | have been transferred to, or was proposed to be | 12 | | transferred to, had the right of first refusal or other | 13 | | right to acquire the franchise not been exercised by the | 14 | | manufacturer or distributor. | 15 | | (f) It is deemed a violation for a manufacturer, a | 16 | | distributor, a wholesaler,
a distributor
branch or division, a | 17 | | factory branch or division, or a wholesale branch or
division, | 18 | | or
officer, agent, broker, shareholder, except a shareholder | 19 | | of 1% or less of the
outstanding
shares of any class of | 20 | | securities of a manufacturer, distributor, or wholesaler
which | 21 | | is a
publicly traded corporation, or other representative, | 22 | | directly or indirectly,
to own or
operate a place of business | 23 | | as a motor vehicle franchisee or motor vehicle
financing
| 24 | | affiliate, except that, this subsection shall not prohibit: | 25 | | (1) the ownership or
operation of a
place of business | 26 | | by a manufacturer, distributor, or wholesaler for a |
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| 1 | | period,
not to exceed
18 months, during the transition | 2 | | from one motor vehicle franchisee to another;
| 3 | | (2) the
investment in a motor vehicle franchisee by a | 4 | | manufacturer, distributor, or
wholesaler if
the investment | 5 | | is for the sole purpose of enabling a partner or | 6 | | shareholder in
that motor
vehicle franchisee to acquire an | 7 | | interest in that motor vehicle franchisee and
that partner
| 8 | | or shareholder is not otherwise employed by or associated | 9 | | with the
manufacturer,
distributor, or wholesaler and | 10 | | would not otherwise have the requisite capital
investment
| 11 | | funds to invest in the motor vehicle franchisee, and has | 12 | | the right to purchase
the entire
equity interest of the | 13 | | manufacturer, distributor, or wholesaler in the motor
| 14 | | vehicle
franchisee within a reasonable period of time not | 15 | | to exceed 5 years; or
| 16 | | (3) the ownership or operation of a place of business | 17 | | by a manufacturer that manufactures only diesel engines | 18 | | for installation in trucks having a gross vehicle weight | 19 | | rating of more than 16,000 pounds that are required to be | 20 | | registered under the Illinois Vehicle Code, provided that: | 21 | | (A) the manufacturer does not otherwise | 22 | | manufacture, distribute, or sell motor vehicles as | 23 | | defined under Section 1-217 of the Illinois Vehicle | 24 | | Code; | 25 | | (B) the manufacturer owned a place of business and | 26 | | it was in operation as of January 1, 2016; |
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| 1 | | (C) the manufacturer complies with all obligations | 2 | | owed to dealers that are not owned, operated, or | 3 | | controlled by the manufacturer, including, but not | 4 | | limited to those obligations arising pursuant to | 5 | | Section 6; | 6 | | (D) to further avoid any acts or practices, the | 7 | | effect of which may be to lessen or eliminate | 8 | | competition, the manufacturer provides to dealers on | 9 | | substantially equal terms access to all support for | 10 | | completing repairs, including, but not limited to, | 11 | | parts and assemblies, training, and technical service | 12 | | bulletins, and other information concerning repairs | 13 | | that the manufacturer provides to facilities that are | 14 | | owned, operated, or controlled by the manufacturer; | 15 | | and | 16 | | (E) the manufacturer does not require that | 17 | | warranty repair work be performed by a | 18 | | manufacturer-owned repair facility and the | 19 | | manufacturer provides any dealer that has an agreement | 20 | | with the manufacturer to sell and perform warranty | 21 | | repairs on the manufacturer's engines the opportunity | 22 | | to perform warranty repairs on those engines, | 23 | | regardless of whether the dealer sold the truck into | 24 | | which the engine was installed. | 25 | | (g) Notwithstanding the terms, provisions, or conditions | 26 | | of any agreement or
waiver, it shall be deemed a violation for |
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| 1 | | a manufacturer, a distributor,
a wholesaler, a distributor | 2 | | branch or division, a factory branch or division,
or a | 3 | | wholesale branch or division, or officer, agent or other | 4 | | representative
thereof, to directly or indirectly condition | 5 | | the awarding of a franchise to a
prospective new motor vehicle | 6 | | dealer, the addition of a line make or
franchise to an existing | 7 | | dealer, the renewal of a franchise of an existing
dealer, the | 8 | | approval of the relocation of an existing dealer's facility, | 9 | | or the
approval of the sale or transfer of the ownership of a | 10 | | franchise on the
willingness of a dealer, proposed new dealer, | 11 | | or owner of an interest in the
dealership facility to enter | 12 | | into a site control agreement or exclusive use
agreement | 13 | | unless separate and reasonable consideration was offered and | 14 | | accepted for that agreement. | 15 | | For purposes of this subsection (g), the terms "site | 16 | | control
agreement" and "exclusive use agreement" include any | 17 | | agreement that has
the effect of either (i) requiring that the | 18 | | dealer establish or maintain
exclusive dealership facilities; | 19 | | or (ii) restricting the ability of the dealer, or
the ability | 20 | | of the dealer's lessor in the event the dealership facility is | 21 | | being
leased, to transfer, sell, lease, or change the use of | 22 | | the dealership premises,
whether by sublease, lease, | 23 | | collateral pledge of lease, or other similar agreement. "Site | 24 | | control agreement" and "exclusive use agreement" also include | 25 | | a manufacturer restricting the ability of a dealer to | 26 | | transfer, sell, or lease the dealership premises by right of |
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| 1 | | first refusal to purchase or lease, option to purchase, or | 2 | | option to lease if the transfer, sale, or lease of the | 3 | | dealership premises is to a person who is an immediate family | 4 | | member of the dealer. For the purposes of this subsection (g), | 5 | | "immediate family member" means a spouse, parent, son, | 6 | | daughter, son-in-law, daughter-in-law, brother, and sister. | 7 | | If a manufacturer exercises any right of first refusal to | 8 | | purchase or lease or option to purchase or lease with regard to | 9 | | a transfer, sale, or lease of the dealership premises to a | 10 | | person who is not an immediate family member of the dealer, | 11 | | then (1) within 60 days from the receipt of the completed | 12 | | application forms generally utilized by a manufacturer to | 13 | | conduct its review and a copy of all agreements regarding the | 14 | | proposed transfer, the manufacturer must notify the dealer of | 15 | | its intent to exercise the right of first refusal to purchase | 16 | | or lease or option to purchase or lease and (2) the exercise of | 17 | | the right of first refusal to purchase or lease or option to | 18 | | purchase or lease must result in the dealer receiving | 19 | | consideration, terms, and conditions that either are the same | 20 | | as or greater than that which they have contracted to receive | 21 | | in connection with the proposed transfer, sale, or lease of | 22 | | the dealership premises. | 23 | | Any provision
contained in any agreement entered into on | 24 | | or after November 25, 2009 (the effective date of Public Act | 25 | | 96-824) that is inconsistent with the provisions of this | 26 | | subsection (g) shall be
voidable at the election of the |
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| 1 | | affected dealer, prospective dealer, or owner
of an interest | 2 | | in the dealership facility. | 3 | | (h) For purposes of this subsection: | 4 | | "Successor manufacturer" means any motor vehicle | 5 | | manufacturer that, on or after January 1, 2009, acquires, | 6 | | succeeds to, or
assumes any part of the business of another | 7 | | manufacturer, referred to as the
"predecessor manufacturer", | 8 | | as the result of any of the following: | 9 | | (i) A change in ownership, operation, or control of | 10 | | the predecessor
manufacturer by sale or transfer of | 11 | | assets, corporate stock or other
equity interest, | 12 | | assignment, merger, consolidation, combination, joint
| 13 | | venture, redemption, court-approved sale, operation of law | 14 | | or
otherwise. | 15 | | (ii) The termination, suspension, or cessation of a | 16 | | part or all of the
business operations of the predecessor | 17 | | manufacturer. | 18 | | (iii) The discontinuance of the sale of the product | 19 | | line. | 20 | | (iv) A change in distribution system by the | 21 | | predecessor manufacturer,
whether through a change in | 22 | | distributor or the predecessor
manufacturer's decision to | 23 | | cease conducting business through a
distributor | 24 | | altogether. | 25 | | "Former Franchisee" means a new motor vehicle dealer that | 26 | | has entered into a franchise with a predecessor manufacturer |
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| 1 | | and that has either: | 2 | | (i) entered into a termination agreement or deferred | 3 | | termination
agreement with a predecessor or successor | 4 | | manufacturer related to
such franchise; or | 5 | | (ii) has had such franchise canceled, terminated, | 6 | | nonrenewed,
noncontinued, rejected, nonassumed, or | 7 | | otherwise ended. | 8 | | For a period of 3 years from: (i) the date that a successor | 9 | | manufacturer acquires, succeeds to, or assumes any part of the | 10 | | business of a predecessor manufacturer; (ii) the last day that | 11 | | a former franchisee is authorized to remain in business as a | 12 | | franchised dealer with respect to a particular franchise under | 13 | | a termination agreement or deferred termination agreement with | 14 | | a predecessor or successor manufacturer; (iii) the last day | 15 | | that a former franchisee that was cancelled, terminated, | 16 | | nonrenewed, noncontinued, rejected, nonassumed, or otherwise | 17 | | ended by a predecessor or successor manufacturer is authorized | 18 | | to remain in business as a franchised dealer with respect to a | 19 | | particular franchise; or (iv) November 25, 2009 (the effective | 20 | | date of Public Act 96-824), whichever is latest, it shall be | 21 | | unlawful for such successor manufacturer to enter into a same | 22 | | line make franchise with any
person or to permit the | 23 | | relocation of any existing same line
make franchise, for a | 24 | | line make of the predecessor manufacturer that would be | 25 | | located or
relocated within the relevant market area of a | 26 | | former franchisee who owned or leased a
dealership facility in |
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| 1 | | that relevant market area without first offering the | 2 | | additional or relocated
franchise to the former franchisee, or | 3 | | the designated successor of such former franchisee in the
| 4 | | event the former franchisee is deceased or a person with a | 5 | | disability, at no cost and without any requirements or
| 6 | | restrictions other than those imposed generally on the | 7 | | manufacturer's other franchisees at that
time, unless one of | 8 | | the following applies: | 9 | | (1) As a result of the former franchisee's | 10 | | cancellation, termination,
noncontinuance, or nonrenewal | 11 | | of the franchise, the predecessor
manufacturer had | 12 | | consolidated the line make with another of its line makes
| 13 | | for which the predecessor manufacturer had a franchisee | 14 | | with a then-existing
dealership facility located within | 15 | | that relevant market area. | 16 | | (2) The successor manufacturer has paid the former | 17 | | franchisee, or the
designated successor of such former | 18 | | franchisee in the event the former
franchisee is deceased | 19 | | or a person with a disability, the fair market value of the | 20 | | former
franchisee's franchise on (i) the date the | 21 | | franchiser announces the action which results in the | 22 | | termination, cancellation, or nonrenewal; or (ii) the date | 23 | | the action which results in termination, cancellation, or | 24 | | nonrenewal first became general knowledge; or (iii) the | 25 | | day 12 months prior to the date on which the notice of | 26 | | termination, cancellation, or nonrenewal is issued, |
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| 1 | | whichever amount is higher. Payment is due within 90 days | 2 | | of the effective date of the termination, cancellation, or | 3 | | nonrenewal. If the termination, cancellation, or | 4 | | nonrenewal is due to a manufacturer's change in | 5 | | distributors, the manufacturer may avoid paying fair | 6 | | market value to the dealer if the new distributor or the | 7 | | manufacturer offers the dealer a franchise agreement with | 8 | | terms acceptable to the dealer. | 9 | | (3) The successor manufacturer proves that it would | 10 | | have had good cause to terminate the franchise agreement | 11 | | of the former franchisee, or the successor of the former | 12 | | franchisee under item (e)(10) in the event that the former | 13 | | franchisee is deceased or a person with a disability. The | 14 | | determination of whether the successor manufacturer would | 15 | | have had good cause to terminate the franchise agreement | 16 | | of the former franchisee, or the successor of the former | 17 | | franchisee, shall be made by the Board under subsection | 18 | | (d) of Section 12. A successor manufacturer that seeks to | 19 | | assert that it would have had good cause to terminate a | 20 | | former franchisee, or the successor of the former | 21 | | franchisee, must file a petition seeking a hearing on this | 22 | | issue before the Board and shall have the burden of | 23 | | proving that it would have had good cause to terminate the | 24 | | former franchisee or the successor of the former | 25 | | franchisee. No successor dealer, other than the former | 26 | | franchisee, may be appointed or franchised by the |
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| 1 | | successor manufacturer within the relevant market area of | 2 | | the former franchisee until the Board has held a hearing | 3 | | and rendered a determination on the issue of whether the | 4 | | successor manufacturer would have had good cause to | 5 | | terminate the former franchisee. | 6 | | In the event that a successor manufacturer attempts to | 7 | | enter into a same line make franchise with any person or to | 8 | | permit the relocation of any existing line make franchise | 9 | | under this subsection (h) at a location that is within the | 10 | | relevant market area of 2 or more former franchisees, then the | 11 | | successor manufacturer may not offer it to any person other | 12 | | than one of those former franchisees unless the successor | 13 | | manufacturer can prove that at least one of the 3 exceptions in | 14 | | items (1), (2), and (3) of this subsection (h) applies to each | 15 | | of those former franchisees. | 16 | | (Source: P.A. 102-433, eff. 1-1-22 .)
| 17 | | Section 99. Effective date. This Act takes effect upon | 18 | | becoming law.".
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