Full Text of SB1755 096th General Assembly
SB1755 96TH GENERAL ASSEMBLY
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96TH GENERAL ASSEMBLY
State of Illinois
2009 and 2010 SB1755
Introduced 2/19/2009, by Sen. J. Bradley Burzynski SYNOPSIS AS INTRODUCED: |
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815 ILCS 710/4 |
from Ch. 121 1/2, par. 754 |
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Amends the Motor Vehicle Franchise Act. Makes a technical change in a Section
concerning unfair competition and practices. |
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A BILL FOR
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SB1755 |
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| AN ACT concerning business.
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| Be it enacted by the People of the State of Illinois, | 3 |
| represented in the General Assembly:
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| Section 5. The Motor Vehicle Franchise Act is amended by | 5 |
| changing Section 4 as follows:
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| (815 ILCS 710/4) (from Ch. 121 1/2, par. 754)
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| Sec. 4. Unfair competition and practices.
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| (a) The unfair methods of competition and 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 the | 12 |
| Federal Trade Commission Act (15 U.S.C. 45 et
seq.), as from | 13 |
| time to time amended.
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| (b) It shall be deemed a violation for any manufacturer, | 15 |
| factory branch,
factory representative, distributor or | 16 |
| wholesaler, distributor branch,
distributor representative or | 17 |
| motor vehicle dealer to engage in any action
with respect to a | 18 |
| franchise which is arbitrary, in bad faith or
unconscionable | 19 |
| and which causes damage to any of the parties or to the public.
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| (c) It shall be deemed a violation for a manufacturer, a | 21 |
| distributor,
a wholesaler, a distributor branch or division, a | 22 |
| factory branch or division,
or a wholesale branch or division, | 23 |
| or officer, agent or other representative
thereof, to coerce, |
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| or attempt to coerce, any motor vehicle dealer:
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| (1) to accept, buy or order any motor vehicle or | 3 |
| vehicles, appliances,
equipment, parts or accessories | 4 |
| therefor, or any other commodity or commodities
or service | 5 |
| or services which such motor vehicle dealer has not | 6 |
| voluntarily
ordered or requested except items required by | 7 |
| applicable local, state or
federal law; or to require a | 8 |
| motor vehicle dealer to accept, buy, order or
purchase such | 9 |
| items in order to obtain any motor vehicle or vehicles or | 10 |
| any
other commodity or commodities which have been ordered | 11 |
| or requested by such
motor vehicle dealer;
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| (2) to order or accept delivery of any motor vehicle | 13 |
| with special
features, appliances, accessories or | 14 |
| equipment not included in the list
price of the motor | 15 |
| vehicles as publicly advertised by the manufacturer
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| thereof, except items required by applicable law; or
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| (3) to order for anyone any parts, accessories, | 18 |
| equipment, machinery,
tools, appliances or any commodity | 19 |
| whatsoever, except items required by
applicable law.
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| (d) It shall be deemed a violation for a manufacturer, a | 21 |
| distributor,
a wholesaler, a distributor branch or division, or | 22 |
| officer, agent or other
representative thereof:
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| (1) to adopt, change, establish or implement a plan or | 24 |
| system for the
allocation and distribution of new motor | 25 |
| vehicles to motor vehicle dealers
which is arbitrary or | 26 |
| capricious or to modify an existing plan so as to cause
the |
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| same to be arbitrary or capricious;
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| (2) to fail or refuse to advise or disclose to any | 3 |
| motor vehicle dealer
having a franchise or selling | 4 |
| agreement, upon written request therefor,
the basis upon | 5 |
| which new motor vehicles of the same line make are | 6 |
| allocated
or distributed to motor vehicle dealers in the | 7 |
| State and the basis upon
which the current allocation or | 8 |
| distribution is being made or will be made
to such motor | 9 |
| vehicle dealer;
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| (3) to refuse to deliver in reasonable quantities and | 11 |
| within a reasonable
time after receipt of dealer's order, | 12 |
| to any motor vehicle dealer having
a franchise or selling | 13 |
| agreement for the retail sale of new motor vehicles
sold or | 14 |
| distributed by such manufacturer, distributor, wholesaler, | 15 |
| distributor
branch or division, factory branch or division | 16 |
| or wholesale branch or division,
any such motor vehicles as | 17 |
| are covered by such franchise or selling agreement
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| specifically publicly advertised in the State by such | 19 |
| manufacturer,
distributor, wholesaler, distributor branch | 20 |
| or division, factory branch or
division, or wholesale | 21 |
| branch or division to be available for immediate
delivery. | 22 |
| However, the failure to deliver any motor vehicle shall not | 23 |
| be
considered a violation of this Act if such failure is | 24 |
| due to an act of God,
a work stoppage or delay due to a | 25 |
| strike or labor difficulty, a shortage
of materials, a lack | 26 |
| of manufacturing capacity, a freight embargo or other
cause |
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| over which the manufacturer, distributor, or wholesaler, | 2 |
| or any agent
thereof has no control;
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| (4) to coerce, or attempt to coerce, any motor vehicle | 4 |
| dealer to enter
into any agreement with such manufacturer, | 5 |
| distributor, wholesaler, distributor
branch or division, | 6 |
| factory branch or division, or wholesale branch or
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| division, or officer, agent or other representative | 8 |
| thereof, or to do any
other act prejudicial to the dealer | 9 |
| by threatening to reduce his allocation
of motor vehicles | 10 |
| or cancel any franchise or any selling agreement existing
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| between such manufacturer, distributor, wholesaler, | 12 |
| distributor branch or
division, or factory branch or | 13 |
| division, or wholesale branch or division,
and the dealer. | 14 |
| However, notice in good faith to any motor vehicle dealer
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| of the dealer's violation of any terms or provisions of | 16 |
| such franchise or
selling agreement or of any law or | 17 |
| regulation applicable to the conduct of
a motor vehicle | 18 |
| dealer shall not constitute a violation of this Act;
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| (5) to require a franchisee to participate in an | 20 |
| advertising campaign
or contest or any promotional | 21 |
| campaign, or to purchase or lease any promotional
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| materials, training materials, show room or other display | 23 |
| decorations or
materials at the expense of the franchisee;
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| (6) to cancel or terminate the franchise or selling | 25 |
| agreement of a
motor vehicle dealer without good cause and | 26 |
| without giving notice as
hereinafter provided; to fail or |
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| refuse to extend the franchise or selling
agreement of a | 2 |
| motor vehicle dealer upon its expiration without good cause
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| and without giving notice as hereinafter provided; or, to | 4 |
| offer a renewal,
replacement or succeeding franchise or | 5 |
| selling agreement containing terms
and provisions the | 6 |
| effect of which is to substantially change or modify the
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| sales and service obligations or capital requirements of | 8 |
| the motor vehicle
dealer arbitrarily and without good cause | 9 |
| and without giving notice as
hereinafter provided | 10 |
| notwithstanding any term or provision of a franchise
or | 11 |
| selling agreement.
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| (A) If a manufacturer, distributor, wholesaler, | 13 |
| distributor branch or
division, factory branch or | 14 |
| division or wholesale branch or division intends
to | 15 |
| cancel or terminate a franchise or selling agreement or | 16 |
| intends not to
extend or renew a franchise or selling | 17 |
| agreement on its expiration, it shall
send a letter by | 18 |
| certified mail, return
receipt requested, to the | 19 |
| affected
franchisee at least
60 days before the | 20 |
| effective date of the
proposed action, or not later | 21 |
| than 10 days before the proposed action when the
reason | 22 |
| for the action is based upon either of the following:
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| (i) the
business operations of the franchisee | 24 |
| have been abandoned or
the franchisee has failed to | 25 |
| conduct customary sales and service operations
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| during customary business hours for at least 7
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| 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
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| (ii) the conviction of or plea of nolo
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| 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.
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| 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
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| only 30 days from receipt of
the notice to file with | 15 |
| the Motor Vehicle Review Board a written protest
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| against the proposed action.
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| (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
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| vehicle dealer, it shall
send a letter by certified | 25 |
| mail, return receipt requested, to the affected
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| franchisee at
least 60
days
before the date of |
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| expiration of the franchise or selling agreement. Each
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| notice of proposed action shall include a detailed | 3 |
| statement setting forth
the specific grounds for the | 4 |
| proposed action
and shall state that the dealer has | 5 |
| only 30 days from receipt of
the notice to file with | 6 |
| the Motor Vehicle Review Board a written protest
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| against the proposed action.
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| (C) Within 30 days from receipt of the notice under
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| subparagraphs (A) and (B),
the franchisee may file with | 10 |
| the Board a written
protest against the proposed | 11 |
| action.
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| When the protest has been timely filed, the Board | 13 |
| shall enter an
order,
fixing a date (within 60 days of | 14 |
| the date of the order), time,
and place of a hearing on | 15 |
| the protest required under Sections 12 and 29
of this | 16 |
| Act, and send by certified mail, return receipt | 17 |
| requested, a copy of
the order to the manufacturer that | 18 |
| filed the notice of intention of the
proposed action | 19 |
| and to the protesting dealer or franchisee.
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| The manufacturer shall have the burden of proof to | 21 |
| establish that good
cause exists to cancel or | 22 |
| terminate, or fail to extend or renew the franchise
or
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| selling agreement of a motor vehicle dealer or | 24 |
| franchisee, and to change
substantially or modify the | 25 |
| sales and service obligations or capital
requirements | 26 |
| of a motor vehicle dealer as a condition to extending |
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| or renewing
the existing franchise or selling | 2 |
| agreement. The determination whether good
cause exists | 3 |
| to cancel, terminate, or refuse to renew or extend the | 4 |
| franchise
or selling agreement, or to change or modify | 5 |
| the obligations of the dealer as a
condition to offer | 6 |
| renewal, replacement, or succession shall be made
by | 7 |
| the Board under subsection (d) of Section 12 of this | 8 |
| Act.
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| (D) Notwithstanding the terms, conditions, or | 10 |
| provisions of a
franchise
or selling agreement, the | 11 |
| following shall not constitute good cause for
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| cancelling or terminating or failing to extend or renew | 13 |
| the franchise or
selling agreement: (i) the change of | 14 |
| ownership or executive management of the
franchisee's | 15 |
| dealership; or (ii)
the
fact that the franchisee or | 16 |
| owner of an interest in the franchise owns, has
an | 17 |
| investment in, participates in the management of, or | 18 |
| holds a license for
the sale of the same or any other | 19 |
| line make of new motor vehicles.
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| Good cause shall exist to cancel, terminate or fail | 21 |
| to offer a
renewal or replacement franchise or selling | 22 |
| agreement to all franchisees of
a line make if the | 23 |
| manufacturer permanently discontinues the manufacture | 24 |
| or
assembly of motor vehicles of such line make.
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| (E) The manufacturer may not cancel or terminate, | 26 |
| or fail to extend or
renew a franchise or selling |
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| agreement or change or modify the obligations of
the | 2 |
| franchisee as a condition to offering a renewal, | 3 |
| replacement, or succeeding
franchise or selling | 4 |
| agreement before the hearing process is concluded as
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| prescribed by this Act, and thereafter, if the Board | 6 |
| determines that the
manufacturer has failed to meet its | 7 |
| burden of proof and that good cause does
not exist to | 8 |
| allow the proposed action; or
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| (7) notwithstanding the terms of any franchise | 10 |
| agreement, to fail to
indemnify and hold harmless its | 11 |
| franchised dealers against any judgment
or settlement for | 12 |
| damages, including, but not limited to, court costs, expert
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| witness fees, reasonable attorneys' fees of the new motor | 14 |
| vehicle
dealer, and other expenses incurred in the | 15 |
| litigation, so long as such fees
and costs are reasonable,
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| arising out
of complaints, claims or lawsuits including, | 17 |
| but not limited to, strict
liability, negligence, | 18 |
| misrepresentation, warranty (express or implied),
or | 19 |
| recision of the sale as defined in Section 2-608 of the | 20 |
| Uniform Commercial
Code, to the extent that the judgment or | 21 |
| settlement relates to the alleged
defective or negligent | 22 |
| manufacture, assembly or design of new motor vehicles,
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| parts or accessories or other functions by the | 24 |
| manufacturer, beyond the
control of the dealer; provided | 25 |
| that, in order to provide an adequate
defense, the | 26 |
| manufacturer receives notice of the filing of a complaint, |
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| claim,
or lawsuit within 60 days after the filing.
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| (e) It shall be deemed a violation for a manufacturer, a | 3 |
| distributor,
a wholesaler, a distributor branch or division or | 4 |
| officer, agent or other
representative thereof:
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| (1) to resort to or use any false or misleading | 6 |
| advertisement in
connection with his business as such | 7 |
| manufacturer, distributor, wholesaler,
distributor branch | 8 |
| or division or officer, agent or other representative
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| thereof;
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| (2) to offer to sell or lease, or to sell or lease, any | 11 |
| new motor vehicle
to any motor vehicle dealer at a lower | 12 |
| actual price therefor than the actual
price offered to any | 13 |
| other motor vehicle dealer for the same model vehicle
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| similarly equipped or to utilize any device including, but | 15 |
| not limited to,
sales promotion plans or programs which | 16 |
| result in such lesser actual
price or fail to make | 17 |
| available to any motor vehicle dealer any
preferential | 18 |
| pricing, incentive, rebate, finance rate, or low interest | 19 |
| loan
program offered to competing motor vehicle dealers in | 20 |
| other contiguous states.
However, the provisions of this | 21 |
| paragraph shall not apply to sales
to a motor vehicle | 22 |
| dealer for resale to any unit of the United States
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| Government, the State or any of its political subdivisions;
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| (3) to offer to sell or lease, or to sell or lease, any | 25 |
| new motor vehicle
to any person, except a wholesaler, | 26 |
| distributor or manufacturer's employees
at a lower actual |
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| price therefor than the actual price offered and charged
to | 2 |
| a motor vehicle dealer for the same model vehicle similarly | 3 |
| equipped or
to utilize any device which results in such | 4 |
| lesser actual price. However,
the provisions of this | 5 |
| paragraph shall not apply to sales to a motor
vehicle | 6 |
| dealer for resale to any unit of the United States | 7 |
| Government, the
State or any of its political subdivisions;
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| (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
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| 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 a | 14 |
| 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
the | 19 |
| 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
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| 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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| management control of the franchisee shall be deemed
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| accepted as proposed by the franchisee, and the | 3 |
| manufacturer shall give
immediate
effect to such change;
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| (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
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| 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;
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| (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 the | 18 |
| interest of any of them to any other person or persons or | 19 |
| 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" | 22 |
| or unless the franchiser, having the burden of proof,
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| proves that such sale or transfer is to a person or party | 24 |
| who is 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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| 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:
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| (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 of | 10 |
| the completed application forms generally utilized by | 11 |
| a manufacturer
to conduct its review and a copy of all | 12 |
| 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 to
| 22 |
| that transferee. Within 30 days from the franchisee's | 23 |
| receipt of the
manufacturer's notice, the
franchisee | 24 |
| may file
with the Board a written protest against the | 25 |
| proposed action.
| 26 |
| When a protest has been timely filed, the Board |
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| 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.
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| (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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| 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 whom | 9 |
| the motor vehicle dealer does business,
on account of or in | 10 |
| relation to the transactions between the dealer and
the | 11 |
| other person as compensation, except for services actually | 12 |
| rendered,
unless such benefit is promptly accounted for and | 13 |
| 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 person | 20 |
| 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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| 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 only | 9 |
| 30 days from the date of receipt of the notice to file with | 10 |
| the Motor Vehicle Review Board a written protest against | 11 |
| the proposed action. Unless the parties agree upon the | 12 |
| 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 notice | 25 |
| of
intention to grant or establish the proposed additional | 26 |
| or relocated
franchise and to the protesting dealer or |
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| 1 |
| dealers of the same line make
whose
relevant market area | 2 |
| includes the proposed location of the additional or
| 3 |
| 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 by | 21 |
| the Board under subsection (c) of Section 12 of this Act.
| 22 |
| 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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| shall follow the notice procedures set forth in this
| 2 |
| Section and the
determination whether good cause exists for | 3 |
| allowing the proposed agreement
shall be made by the Board | 4 |
| under subsection (c) of Section 12, with the
manufacturer | 5 |
| having
the burden of proof.
| 6 |
| A. (Blank).
| 7 |
| B. For the purposes of this Section, appointment of | 8 |
| a successor motor
vehicle dealer at the same location | 9 |
| as its predecessor, or within 2 miles
of such location,
| 10 |
| or the relocation of an existing dealer or franchise | 11 |
| 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 a | 16 |
| motor vehicle dealership that has not been in operation | 17 |
| for 18 months
or more shall be deemed the grant of an | 18 |
| additional franchise or selling
agreement.
| 19 |
| C. This Section does not apply to the relocation of | 20 |
| an existing
dealership or franchise in a county having | 21 |
| a population of more than
300,000 persons when the new | 22 |
| location is within the dealer's current
relevant | 23 |
| market area, provided the new location is more than 7 | 24 |
| miles from
the nearest dealer of the same line make. | 25 |
| This Section does not apply to
the relocation of an | 26 |
| existing dealership or franchise in a county having a
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| population of less than 300,000 persons when the new | 2 |
| location is within the
dealer's current relevant | 3 |
| market area, provided the new location is more
than 12 | 4 |
| miles from the nearest dealer of the same line make. A | 5 |
| dealer that would be farther away
from the new location | 6 |
| of an existing dealership or
franchise of the same line | 7 |
| make after a relocation may not
file a written protest | 8 |
| against the relocation with the
Motor Vehicle Review | 9 |
| 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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| 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 60 | 13 |
| 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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| the
designated successor within
60 days
from receipt of | 2 |
| 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 the | 9 |
| refusal to honor the succession and discontinue the
| 10 |
| 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
person | 19 |
| may file with the Board a written protest against the | 20 |
| 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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| 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 the | 5 |
| 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). The | 9 |
| manufacturer shall not refuse to honor the succession | 10 |
| or
discontinue the existing franchise agreement before | 11 |
| the hearing process is
concluded as prescribed by this | 12 |
| Act, and thereafter if the Board determines
that it has | 13 |
| failed to meet its burden of proof and that good cause | 14 |
| does not
exist to refuse to honor the succession and | 15 |
| discontinue the existing
franchise agreement.
| 16 |
| (B) No manufacturer shall impose any conditions | 17 |
| upon honoring the
succession and continuing the | 18 |
| existing franchise agreement with the designated
| 19 |
| successor other than that the franchisee has | 20 |
| designated a successor to the
ownership or management | 21 |
| control under the succession provisions of the
| 22 |
| franchise, or that the designated successor is of good | 23 |
| moral character or meets
the reasonable capital | 24 |
| standards and, with consideration given to the volume | 25 |
| of
sales and service of the dealership, uniformly | 26 |
| applied minimum business
experience standards in the |
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| market area;
| 2 |
| (11) to prevent or refuse to approve a proposal to | 3 |
| establish a successor
franchise at a location previously | 4 |
| approved by the franchiser when submitted
with the | 5 |
| voluntary termination by the existing franchisee unless | 6 |
| the successor
franchisee would not otherwise qualify for a | 7 |
| new motor vehicle dealer's
license under the Illinois | 8 |
| Vehicle Code or unless the franchiser, having
the burden of | 9 |
| proof, proves that such proposed successor is not of good
| 10 |
| moral character or does not meet the franchiser's existing | 11 |
| and reasonable
capital standards and, with consideration | 12 |
| given to the volume of sales and
service of the dealership, | 13 |
| uniformly applied minimum business experience
standards in | 14 |
| the market area. However, when such a rejection
of a | 15 |
| proposal is made, the manufacturer shall give written | 16 |
| notice of its
reasons to the franchisee within 60 days of | 17 |
| receipt by the manufacturer
of the proposal. However, | 18 |
| nothing herein shall be construed
to prevent a franchiser | 19 |
| from implementing affirmative action programs providing
| 20 |
| business opportunities for minorities, or from complying | 21 |
| with applicable
federal, State or local law;
| 22 |
| (12) to prevent or refuse to grant a franchise to a | 23 |
| person because such
person owns, has investment in or | 24 |
| participates in the management of or holds
a franchise for | 25 |
| the sale of another make or line of motor vehicles within
7 | 26 |
| miles of the proposed franchise location in a county having |
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| a population
of more than 300,000 persons, or within 12 | 2 |
| miles of the proposed franchise
location in a county having | 3 |
| a population of less than 300,000
persons; or
| 4 |
| (13) to prevent or attempt to prevent any new motor | 5 |
| vehicle dealer
from establishing any additional motor | 6 |
| vehicle dealership or other facility
limited to the sale of | 7 |
| factory repurchase vehicles or late model vehicles
or | 8 |
| otherwise offering for sale factory repurchase vehicles of | 9 |
| the same line
make at an existing franchise by failing to | 10 |
| make
available any contract, agreement or other | 11 |
| arrangement which is made
available or otherwise offered to | 12 |
| any person.
| 13 |
| (f) It is deemed a violation for a manufacturer, a | 14 |
| distributor, a
wholesale,
a distributor
branch or division, a | 15 |
| factory branch or division, or a wholesale branch or
division, | 16 |
| or
officer, agent, broker, shareholder, except a shareholder of | 17 |
| 1% or less of the
outstanding
shares of any class of securities | 18 |
| of a manufacturer, distributor, or wholesaler
which is a
| 19 |
| publicly traded corporation, or other representative, directly | 20 |
| or indirectly,
to own or
operate a place of business as a motor | 21 |
| vehicle franchisee or motor vehicle
financing
affiliate, | 22 |
| except that, this subsection shall not prohibit the ownership | 23 |
| or
operation of a
place of business by a manufacturer, | 24 |
| distributor, or wholesaler for a period,
not to exceed
18 | 25 |
| months, during the transition from one motor vehicle franchisee | 26 |
| to another;
or the
investment in a motor vehicle franchisee by |
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| a manufacturer, distributor, or
wholesaler if
the investment is | 2 |
| for the sole purpose of enabling a partner or shareholder in
| 3 |
| that motor
vehicle franchisee to acquire an interest in that | 4 |
| motor vehicle franchisee and
that partner
or shareholder is not | 5 |
| otherwise employed by or associated with the
manufacturer,
| 6 |
| distributor, or wholesaler and would not otherwise have the | 7 |
| requisite capital
investment
funds to invest in the motor | 8 |
| vehicle franchisee, and has the right to purchase
the entire
| 9 |
| equity interest of the manufacturer, distributor, or | 10 |
| wholesaler in the motor
vehicle
franchisee within a reasonable | 11 |
| period of time not to exceed 5 years.
| 12 |
| (Source: P.A. 94-287, eff. 1-1-06.)
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