Public Act 096-0824
 
HB4628 Enrolled LRB096 14542 KTG 29374 b

    AN ACT concerning business.
 
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
 
    Section 5. The Motor Vehicle Franchise Act is amended by
changing Section 4 as follows:
 
    (815 ILCS 710/4)  (from Ch. 121 1/2, par. 754)
    Sec. 4. Unfair competition and practices.
    (a) The unfair methods of competition and unfair and
deceptive acts or practices listed in this Section are hereby
declared to be unlawful. In construing the provisions of this
Section, the courts may be guided by the interpretations of the
Federal Trade Commission Act (15 U.S.C. 45 et seq.), as from
time to time amended.
    (b) It shall be deemed a violation for any manufacturer,
factory branch, factory representative, distributor or
wholesaler, distributor branch, distributor representative or
motor vehicle dealer to engage in any action with respect to a
franchise which is arbitrary, in bad faith or unconscionable
and which causes damage to any of the parties or to the public.
    (c) It shall be deemed a violation for a manufacturer, a
distributor, a wholesaler, a distributor branch or division, a
factory branch or division, or a wholesale branch or division,
or officer, agent or other representative thereof, to coerce,
or attempt to coerce, any motor vehicle dealer:
        (1) to accept, buy or order any motor vehicle or
    vehicles, appliances, equipment, parts or accessories
    therefor, or any other commodity or commodities or service
    or services which such motor vehicle dealer has not
    voluntarily ordered or requested except items required by
    applicable local, state or federal law; or to require a
    motor vehicle dealer to accept, buy, order or purchase such
    items in order to obtain any motor vehicle or vehicles or
    any other commodity or commodities which have been ordered
    or requested by such motor vehicle dealer;
        (2) to order or accept delivery of any motor vehicle
    with special features, appliances, accessories or
    equipment not included in the list price of the motor
    vehicles as publicly advertised by the manufacturer
    thereof, except items required by applicable law; or
        (3) to order for anyone any parts, accessories,
    equipment, machinery, tools, appliances or any commodity
    whatsoever, except items required by applicable law.
    (d) It shall be deemed a violation for a manufacturer, a
distributor, a wholesaler, a distributor branch or division, or
officer, agent or other representative thereof:
        (1) to adopt, change, establish or implement a plan or
    system for the allocation and distribution of new motor
    vehicles to motor vehicle dealers which is arbitrary or
    capricious or to modify an existing plan so as to cause the
    same to be arbitrary or capricious;
        (2) to fail or refuse to advise or disclose to any
    motor vehicle dealer having a franchise or selling
    agreement, upon written request therefor, the basis upon
    which new motor vehicles of the same line make are
    allocated or distributed to motor vehicle dealers in the
    State and the basis upon which the current allocation or
    distribution is being made or will be made to such motor
    vehicle dealer;
        (3) to refuse to deliver in reasonable quantities and
    within a reasonable time after receipt of dealer's order,
    to any motor vehicle dealer having a franchise or selling
    agreement for the retail sale of new motor vehicles sold or
    distributed by such manufacturer, distributor, wholesaler,
    distributor branch or division, factory branch or division
    or wholesale branch or division, any such motor vehicles as
    are covered by such franchise or selling agreement
    specifically publicly advertised in the State by such
    manufacturer, distributor, wholesaler, distributor branch
    or division, factory branch or division, or wholesale
    branch or division to be available for immediate delivery.
    However, the failure to deliver any motor vehicle shall not
    be considered a violation of this Act if such failure is
    due to an act of God, a work stoppage or delay due to a
    strike or labor difficulty, a shortage of materials, a lack
    of manufacturing capacity, a freight embargo or other cause
    over which the manufacturer, distributor, or wholesaler,
    or any agent thereof has no control;
        (4) to coerce, or attempt to coerce, any motor vehicle
    dealer to enter into any agreement with such manufacturer,
    distributor, wholesaler, distributor branch or division,
    factory branch or division, or wholesale branch or
    division, or officer, agent or other representative
    thereof, or to do any other act prejudicial to the dealer
    by threatening to reduce his allocation of motor vehicles
    or cancel any franchise or any selling agreement existing
    between such manufacturer, distributor, wholesaler,
    distributor branch or division, or factory branch or
    division, or wholesale branch or division, and the dealer.
    However, notice in good faith to any motor vehicle dealer
    of the dealer's violation of any terms or provisions of
    such franchise or selling agreement or of any law or
    regulation applicable to the conduct of a motor vehicle
    dealer shall not constitute a violation of this Act;
        (5) to require a franchisee to participate in an
    advertising campaign or contest or any promotional
    campaign, or to purchase or lease any promotional
    materials, training materials, show room or other display
    decorations or materials at the expense of the franchisee;
        (6) to cancel or terminate the franchise or selling
    agreement of a motor vehicle dealer without good cause and
    without giving notice as hereinafter provided; to fail or
    refuse to extend the franchise or selling agreement of a
    motor vehicle dealer upon its expiration without good cause
    and without giving notice as hereinafter provided; or, to
    offer a renewal, replacement or succeeding franchise or
    selling agreement containing terms and provisions the
    effect of which is to substantially change or modify the
    sales and service obligations or capital requirements of
    the motor vehicle dealer arbitrarily and without good cause
    and without giving notice as hereinafter provided
    notwithstanding any term or provision of a franchise or
    selling agreement.
            (A) If a manufacturer, distributor, wholesaler,
        distributor branch or division, factory branch or
        division or wholesale branch or division intends to
        cancel or terminate a franchise or selling agreement or
        intends not to extend or renew a franchise or selling
        agreement on its expiration, it shall send a letter by
        certified mail, return receipt requested, to the
        affected franchisee at least 60 days before the
        effective date of the proposed action, or not later
        than 10 days before the proposed action when the reason
        for the action is based upon either of the following:
                (i) the business operations of the franchisee
            have been abandoned or the franchisee has failed to
            conduct customary sales and service operations
            during customary business hours for at least 7
            consecutive business days unless such closing is
            due to an act of God, strike or labor difficulty or
            other cause over which the franchisee has no
            control; or
                (ii) the conviction of or plea of nolo
            contendere by the motor vehicle dealer or any
            operator thereof in a court of competent
            jurisdiction to an offense punishable by
            imprisonment for more than two years.
            Each notice of proposed action shall include a
        detailed statement setting forth the specific grounds
        for the proposed cancellation, termination, or refusal
        to extend or renew and shall state that the dealer has
        only 30 days from receipt of the notice to file with
        the Motor Vehicle Review Board a written protest
        against the proposed action.
            (B) If a manufacturer, distributor, wholesaler,
        distributor branch or division, factory branch or
        division or wholesale branch or division intends to
        change substantially or modify the sales and service
        obligations or capital requirements of a motor vehicle
        dealer as a condition to extending or renewing the
        existing franchise or selling agreement of such motor
        vehicle dealer, it shall send a letter by certified
        mail, return receipt requested, to the affected
        franchisee at least 60 days before the date of
        expiration of the franchise or selling agreement. Each
        notice of proposed action shall include a detailed
        statement setting forth the specific grounds for the
        proposed action and shall state that the dealer has
        only 30 days from receipt of the notice to file with
        the Motor Vehicle Review Board a written protest
        against the proposed action.
            (C) Within 30 days from receipt of the notice under
        subparagraphs (A) and (B), the franchisee may file with
        the Board a written protest against the proposed
        action.
            When the protest has been timely filed, the Board
        shall enter an order, fixing a date (within 60 days of
        the date of the order), time, and place of a hearing on
        the protest required under Sections 12 and 29 of this
        Act, and send by certified mail, return receipt
        requested, a copy of the order to the manufacturer that
        filed the notice of intention of the proposed action
        and to the protesting dealer or franchisee.
            The manufacturer shall have the burden of proof to
        establish that good cause exists to cancel or
        terminate, or fail to extend or renew the franchise or
        selling agreement of a motor vehicle dealer or
        franchisee, and to change substantially or modify the
        sales and service obligations or capital requirements
        of a motor vehicle dealer as a condition to extending
        or renewing the existing franchise or selling
        agreement. The determination whether good cause exists
        to cancel, terminate, or refuse to renew or extend the
        franchise or selling agreement, or to change or modify
        the obligations of the dealer as a condition to offer
        renewal, replacement, or succession shall be made by
        the Board under subsection (d) of Section 12 of this
        Act.
            (D) Notwithstanding the terms, conditions, or
        provisions of a franchise or selling agreement, the
        following shall not constitute good cause for
        cancelling or terminating or failing to extend or renew
        the franchise or selling agreement: (i) the change of
        ownership or executive management of the franchisee's
        dealership; or (ii) the fact that the franchisee or
        owner of an interest in the franchise owns, has an
        investment in, participates in the management of, or
        holds a license for the sale of the same or any other
        line make of new motor vehicles.
            (E) The manufacturer may not cancel or terminate,
        or fail to extend or renew a franchise or selling
        agreement or change or modify the obligations of the
        franchisee as a condition to offering a renewal,
        replacement, or succeeding franchise or selling
        agreement before the hearing process is concluded as
        prescribed by this Act, and thereafter, if the Board
        determines that the manufacturer has failed to meet its
        burden of proof and that good cause does not exist to
        allow the proposed action;
        (7) notwithstanding the terms of any franchise
    agreement, to fail to indemnify and hold harmless its
    franchised dealers against any judgment or settlement for
    damages, including, but not limited to, court costs, expert
    witness fees, reasonable attorneys' fees of the new motor
    vehicle dealer, and other expenses incurred in the
    litigation, so long as such fees and costs are reasonable,
    arising out of complaints, claims or lawsuits including,
    but not limited to, strict liability, negligence,
    misrepresentation, warranty (express or implied), or
    recision of the sale as defined in Section 2-608 of the
    Uniform Commercial Code, to the extent that the judgment or
    settlement relates to the alleged defective or negligent
    manufacture, assembly or design of new motor vehicles,
    parts or accessories or other functions by the
    manufacturer, beyond the control of the dealer; provided
    that, in order to provide an adequate defense, the
    manufacturer receives notice of the filing of a complaint,
    claim, or lawsuit within 60 days after the filing;
        (8) to require or otherwise coerce a motor vehicle
    dealer to underutilize the motor vehicle dealer's
    facilities by requiring or otherwise coercing the motor
    vehicle dealer to exclude or remove from the motor vehicle
    dealer's facilities operations for selling or servicing of
    any vehicles for which the motor vehicle dealer has a
    franchise agreement with another manufacturer,
    distributor, wholesaler, distribution branch or division,
    or officer, agent, or other representative thereof;
    provided, however, that, in light of all existing
    circumstances, (i) the motor vehicle dealer maintains a
    reasonable line of credit for each make or line of new
    motor vehicle, (ii) the new motor vehicle dealer remains in
    compliance with any reasonable facilities requirements of
    the manufacturer, (iii) no change is made in the principal
    management of the new motor vehicle dealer, and (iv) the
    addition of the make or line of new motor vehicles would be
    reasonable. The reasonable facilities requirement set
    forth in item (ii) of subsection (d)(8) shall not include
    any requirement that a franchisee establish or maintain
    exclusive facilities, personnel, or display space. Any
    decision by a motor vehicle dealer to sell additional makes
    or lines at the motor vehicle dealer's facility shall be
    presumed to be reasonable, and the manufacturer shall have
    the burden to overcome that presumption. A motor vehicle
    dealer must provide a written notification of its intent to
    add a make or line of new motor vehicles to the
    manufacturer. If the manufacturer does not respond to the
    motor vehicle dealer, in writing, objecting to the addition
    of the make or line within 60 days after the date that the
    motor vehicle dealer sends the written notification, then
    the manufacturer shall be deemed to have approved the
    addition of the make or line; or
        (9) to use or consider the performance of a motor
    vehicle dealer relating to the sale of the manufacturer's,
    distributor's, or wholesaler's vehicles or the motor
    vehicle dealer's ability to satisfy any minimum sales or
    market share quota or responsibility relating to the sale
    of the manufacturer's, distributor's, or wholesaler's new
    vehicles in determining:
            (A) the motor vehicle dealer's eligibility to
        purchase program, certified, or other used motor
        vehicles from the manufacturer, distributor, or
        wholesaler;
            (B) the volume, type, or model of program,
        certified, or other used motor vehicles that a motor
        vehicle dealer is eligible to purchase from the
        manufacturer, distributor, or wholesaler;
            (C) the price of any program, certified, or other
        used motor vehicle that the dealer is eligible to
        purchase from the manufacturer, distributor, or
        wholesaler; or
            (D) the availability or amount of any discount,
        credit, rebate, or sales incentive that the dealer is
        eligible to receive from the manufacturer,
        distributor, or wholesaler for the purchase of any
        program, certified, or other used motor vehicle
        offered for sale by the manufacturer, distributor, or
        wholesaler.
    (e) It shall be deemed a violation for a manufacturer, a
distributor, a wholesaler, a distributor branch or division or
officer, agent or other representative thereof:
        (1) to resort to or use any false or misleading
    advertisement in connection with his business as such
    manufacturer, distributor, wholesaler, distributor branch
    or division or officer, agent or other representative
    thereof;
        (2) to offer to sell or lease, or to sell or lease, any
    new motor vehicle to any motor vehicle dealer at a lower
    actual price therefor than the actual price offered to any
    other motor vehicle dealer for the same model vehicle
    similarly equipped or to utilize any device including, but
    not limited to, sales promotion plans or programs which
    result in such lesser actual price or fail to make
    available to any motor vehicle dealer any preferential
    pricing, incentive, rebate, finance rate, or low interest
    loan program offered to competing motor vehicle dealers in
    other contiguous states. However, the provisions of this
    paragraph shall not apply to sales to a motor vehicle
    dealer for resale to any unit of the United States
    Government, the State or any of its political subdivisions;
        (3) to offer to sell or lease, or to sell or lease, any
    new motor vehicle to any person, except a wholesaler,
    distributor or manufacturer's employees at a lower actual
    price therefor than the actual price offered and charged to
    a motor vehicle dealer for the same model vehicle similarly
    equipped or to utilize any device which results in such
    lesser actual price. However, the provisions of this
    paragraph shall not apply to sales to a motor vehicle
    dealer for resale to any unit of the United States
    Government, the State or any of its political subdivisions;
        (4) to prevent or attempt to prevent by contract or
    otherwise any motor vehicle dealer or franchisee from
    changing the executive management control of the motor
    vehicle dealer or franchisee unless the franchiser, having
    the burden of proof, proves that such change of executive
    management will result in executive management control by a
    person or persons who are not of good moral character or
    who do not meet the franchiser's existing and, with
    consideration given to the volume of sales and service of
    the dealership, uniformly applied minimum business
    experience standards in the market area. However where the
    manufacturer rejects a proposed change in executive
    management control, the manufacturer shall give written
    notice of his reasons to the dealer within 60 days of
    notice to the manufacturer by the dealer of the proposed
    change. If the manufacturer does not send a letter to the
    franchisee by certified mail, return receipt requested,
    within 60 days from receipt by the manufacturer of the
    proposed change, then the change of the executive
    management control of the franchisee shall be deemed
    accepted as proposed by the franchisee, and the
    manufacturer shall give immediate effect to such change;
        (5) to prevent or attempt to prevent by contract or
    otherwise any motor vehicle dealer from establishing or
    changing the capital structure of his dealership or the
    means by or through which he finances the operation
    thereof; provided the dealer meets any reasonable capital
    standards agreed to between the dealer and the
    manufacturer, distributor or wholesaler, who may require
    that the sources, method and manner by which the dealer
    finances or intends to finance its operation, equipment or
    facilities be fully disclosed;
        (6) to refuse to give effect to or prevent or attempt
    to prevent by contract or otherwise any motor vehicle
    dealer or any officer, partner or stockholder of any motor
    vehicle dealer from selling or transferring any part of the
    interest of any of them to any other person or persons or
    party or parties unless such sale or transfer is to a
    transferee who would not otherwise qualify for a new motor
    vehicle dealers license under "The Illinois Vehicle Code"
    or unless the franchiser, having the burden of proof,
    proves that such sale or transfer is to a person or party
    who is not of good moral character or does not meet the
    franchiser's existing and reasonable capital standards
    and, with consideration given to the volume of sales and
    service of the dealership, uniformly applied minimum
    business experience standards in the market area. However,
    nothing herein shall be construed to prevent a franchiser
    from implementing affirmative action programs providing
    business opportunities for minorities or from complying
    with applicable federal, State or local law:
            (A) If the manufacturer intends to refuse to
        approve the sale or transfer of all or a part of the
        interest, then it shall, within 60 days from receipt of
        the completed application forms generally utilized by
        a manufacturer to conduct its review and a copy of all
        agreements regarding the proposed transfer, send a
        letter by certified mail, return receipt requested,
        advising the franchisee of any refusal to approve the
        sale or transfer of all or part of the interest and
        shall state that the dealer only has 30 days from the
        receipt of the notice to file with the Motor Vehicle
        Review Board a written protest against the proposed
        action. The notice shall set forth specific criteria
        used to evaluate the prospective transferee and the
        grounds for refusing to approve the sale or transfer to
        that transferee. Within 30 days from the franchisee's
        receipt of the manufacturer's notice, the franchisee
        may file with the Board a written protest against the
        proposed action.
            When a protest has been timely filed, the Board
        shall enter an order, fixing the date (within 60 days
        of the date of such order), time, and place of a
        hearing on the protest, required under Sections 12 and
        29 of this Act, and send by certified mail, return
        receipt requested, a copy of the order to the
        manufacturer that filed notice of intention of the
        proposed action and to the protesting franchisee.
            The manufacturer shall have the burden of proof to
        establish that good cause exists to refuse to approve
        the sale or transfer to the transferee. The
        determination whether good cause exists to refuse to
        approve the sale or transfer shall be made by the Board
        under subdivisions (6)(B). The manufacturer shall not
        refuse to approve the sale or transfer by a dealer or
        an officer, partner, or stockholder of a franchise or
        any part of the interest to any person or persons
        before the hearing process is concluded as prescribed
        by this Act, and thereafter if the Board determines
        that the manufacturer has failed to meet its burden of
        proof and that good cause does not exist to refuse to
        approve the sale or transfer to the transferee.
            (B) Good cause to refuse to approve such sale or
        transfer under this Section is established when such
        sale or transfer is to a transferee who would not
        otherwise qualify for a new motor vehicle dealers
        license under "The Illinois Vehicle Code" or such sale
        or transfer is to a person or party who is not of good
        moral character or does not meet the franchiser's
        existing and reasonable capital standards and, with
        consideration given to the volume of sales and service
        of the dealership, uniformly applied minimum business
        experience standards in the market area.
        (7) to obtain money, goods, services, anything of
    value, or any other benefit from any other person with whom
    the motor vehicle dealer does business, on account of or in
    relation to the transactions between the dealer and the
    other person as compensation, except for services actually
    rendered, unless such benefit is promptly accounted for and
    transmitted to the motor vehicle dealer;
        (8) to grant an additional franchise in the relevant
    market area of an existing franchise of the same line make
    or to relocate an existing motor vehicle dealership within
    or into a relevant market area of an existing franchise of
    the same line make. However, if the manufacturer wishes to
    grant such an additional franchise to an independent person
    in a bona fide relationship in which such person is
    prepared to make a significant investment subject to loss
    in such a dealership, or if the manufacturer wishes to
    relocate an existing motor vehicle dealership, then the
    manufacturer shall send a letter by certified mail, return
    receipt requested, to each existing dealer or dealers of
    the same line make whose relevant market area includes the
    proposed location of the additional or relocated franchise
    at least 60 days before the manufacturer grants an
    additional franchise or relocates an existing franchise of
    the same line make within or into the relevant market area
    of an existing franchisee of the same line make. Each
    notice shall set forth the specific grounds for the
    proposed grant of an additional or relocation of an
    existing franchise and shall state that the dealer has only
    30 days from the date of receipt of the notice to file with
    the Motor Vehicle Review Board a written protest against
    the proposed action. Unless the parties agree upon the
    grant or establishment of the additional or relocated
    franchise within 30 days from the date the notice was
    received by the existing franchisee of the same line make
    or any person entitled to receive such notice, the
    franchisee or other person may file with the Board a
    written protest against the grant or establishment of the
    proposed additional or relocated franchise.
        When a protest has been timely filed, the Board shall
    enter an order fixing a date (within 60 days of the date of
    the order), time, and place of a hearing on the protest,
    required under Sections 12 and 29 of this Act, and send by
    certified or registered mail, return receipt requested, a
    copy of the order to the manufacturer that filed the notice
    of intention to grant or establish the proposed additional
    or relocated franchise and to the protesting dealer or
    dealers of the same line make whose relevant market area
    includes the proposed location of the additional or
    relocated franchise.
        When more than one protest is filed against the grant
    or establishment of the additional or relocated franchise
    of the same line make, the Board may consolidate the
    hearings to expedite disposition of the matter. The
    manufacturer shall have the burden of proof to establish
    that good cause exists to allow the grant or establishment
    of the additional or relocated franchise. The manufacturer
    may not grant or establish the additional franchise or
    relocate the existing franchise before the hearing process
    is concluded as prescribed by this Act, and thereafter if
    the Board determines that the manufacturer has failed to
    meet its burden of proof and that good cause does not exist
    to allow the grant or establishment of the additional
    franchise or relocation of the existing franchise.
        The determination whether good cause exists for
    allowing the grant or establishment of an additional
    franchise or relocated existing franchise, shall be made by
    the Board under subsection (c) of Section 12 of this Act.
    If the manufacturer seeks to enter into a contract,
    agreement or other arrangement with any person,
    establishing any additional motor vehicle dealership or
    other facility, limited to the sale of factory repurchase
    vehicles or late model vehicles, then the manufacturer
    shall follow the notice procedures set forth in this
    Section and the determination whether good cause exists for
    allowing the proposed agreement shall be made by the Board
    under subsection (c) of Section 12, with the manufacturer
    having the burden of proof.
            A. (Blank).
            B. For the purposes of this Section, appointment of
        a successor motor vehicle dealer at the same location
        as its predecessor, or within 2 miles of such location,
        or the relocation of an existing dealer or franchise
        within 2 miles of the relocating dealer's or
        franchisee's existing location, shall not be construed
        as a grant, establishment or the entering into of an
        additional franchise or selling agreement, or a
        relocation of an existing franchise. The reopening of a
        motor vehicle dealership that has not been in operation
        for 18 months or more shall be deemed the grant of an
        additional franchise or selling agreement.
            C. This Section does not apply to the relocation of
        an existing dealership or franchise in a county having
        a population of more than 300,000 persons when the new
        location is within the dealer's current relevant
        market area, provided the new location is more than 7
        miles from the nearest dealer of the same line make.
        This Section does not apply to the relocation of an
        existing dealership or franchise in a county having a
        population of less than 300,000 persons when the new
        location is within the dealer's current relevant
        market area, provided the new location is more than 12
        miles from the nearest dealer of the same line make. A
        dealer that would be farther away from the new location
        of an existing dealership or franchise of the same line
        make after a relocation may not file a written protest
        against the relocation with the Motor Vehicle Review
        Board.
            D. Nothing in this Section shall be construed to
        prevent a franchiser from implementing affirmative
        action programs providing business opportunities for
        minorities or from complying with applicable federal,
        State or local law;
        (9) to require a motor vehicle dealer to assent to a
    release, assignment, novation, waiver or estoppel which
    would relieve any person from liability imposed by this
    Act;
        (10) to prevent or refuse to give effect to the
    succession to the ownership or management control of a
    dealership by any legatee under the will of a dealer or to
    an heir under the laws of descent and distribution of this
    State unless the franchisee has designated a successor to
    the ownership or management control under the succession
    provisions of the franchise. Unless the franchiser, having
    the burden of proof, proves that the successor is a person
    who is not of good moral character or does not meet the
    franchiser's existing and reasonable capital standards
    and, with consideration given to the volume of sales and
    service of the dealership, uniformly applied minimum
    business experience standards in the market area, any
    designated successor of a dealer or franchisee may succeed
    to the ownership or management control of a dealership
    under the existing franchise if:
                (i) The designated successor gives the
            franchiser written notice by certified mail,
            return receipt requested, of his or her intention
            to succeed to the ownership of the dealer within 60
            days of the dealer's death or incapacity; and
                (ii) The designated successor agrees to be
            bound by all the terms and conditions of the
            existing franchise.
        Notwithstanding the foregoing, in the event the motor
    vehicle dealer or franchisee and manufacturer have duly
    executed an agreement concerning succession rights prior
    to the dealer's death or incapacitation, the agreement
    shall be observed.
            (A) If the franchiser intends to refuse to honor
        the successor to the ownership of a deceased or
        incapacitated dealer or franchisee under an existing
        franchise agreement, the franchiser shall send a
        letter by certified mail, return receipt requested, to
        the designated successor within 60 days from receipt of
        a proposal advising of its intent to refuse to honor
        the succession and to discontinue the existing
        franchise agreement and shall state that the
        designated successor only has 30 days from the receipt
        of the notice to file with the Motor Vehicle Review
        Board a written protest against the proposed action.
        The notice shall set forth the specific grounds for the
        refusal to honor the succession and discontinue the
        existing franchise agreement.
            If notice of refusal is not timely served upon the
        designated successor, the franchise agreement shall
        continue in effect subject to termination only as
        otherwise permitted by paragraph (6) of subsection (d)
        of Section 4 of this Act.
            Within 30 days from the date the notice was
        received by the designated successor or any other
        person entitled to notice, the designee or other person
        may file with the Board a written protest against the
        proposed action.
            When a protest has been timely filed, the Board
        shall enter an order, fixing a date (within 60 days of
        the date of the order), time, and place of a hearing on
        the protest, required under Sections 12 and 29 of this
        Act, and send by certified mail, return receipt
        requested, a copy of the order to the franchiser that
        filed the notice of intention of the proposed action
        and to the protesting designee or such other person.
            The manufacturer shall have the burden of proof to
        establish that good cause exists to refuse to honor the
        succession and discontinue the existing franchise
        agreement. The determination whether good cause exists
        to refuse to honor the succession shall be made by the
        Board under subdivision (B) of this paragraph (10). The
        manufacturer shall not refuse to honor the succession
        or discontinue the existing franchise agreement before
        the hearing process is concluded as prescribed by this
        Act, and thereafter if the Board determines that it has
        failed to meet its burden of proof and that good cause
        does not exist to refuse to honor the succession and
        discontinue the existing franchise agreement.
            (B) No manufacturer shall impose any conditions
        upon honoring the succession and continuing the
        existing franchise agreement with the designated
        successor other than that the franchisee has
        designated a successor to the ownership or management
        control under the succession provisions of the
        franchise, or that the designated successor is of good
        moral character or meets the reasonable capital
        standards and, with consideration given to the volume
        of sales and service of the dealership, uniformly
        applied minimum business experience standards in the
        market area;
        (11) to prevent or refuse to approve a proposal to
    establish a successor franchise at a location previously
    approved by the franchiser when submitted with the
    voluntary termination by the existing franchisee unless
    the successor franchisee would not otherwise qualify for a
    new motor vehicle dealer's license under the Illinois
    Vehicle Code or unless the franchiser, having the burden of
    proof, proves that such proposed successor is not of good
    moral character or does not meet the franchiser's existing
    and reasonable capital standards and, with consideration
    given to the volume of sales and service of the dealership,
    uniformly applied minimum business experience standards in
    the market area. However, when such a rejection of a
    proposal is made, the manufacturer shall give written
    notice of its reasons to the franchisee within 60 days of
    receipt by the manufacturer of the proposal. However,
    nothing herein shall be construed to prevent a franchiser
    from implementing affirmative action programs providing
    business opportunities for minorities, or from complying
    with applicable federal, State or local law;
        (12) to prevent or refuse to grant a franchise to a
    person because such person owns, has investment in or
    participates in the management of or holds a franchise for
    the sale of another make or line of motor vehicles within 7
    miles of the proposed franchise location in a county having
    a population of more than 300,000 persons, or within 12
    miles of the proposed franchise location in a county having
    a population of less than 300,000 persons; or
        (13) to prevent or attempt to prevent any new motor
    vehicle dealer from establishing any additional motor
    vehicle dealership or other facility limited to the sale of
    factory repurchase vehicles or late model vehicles or
    otherwise offering for sale factory repurchase vehicles of
    the same line make at an existing franchise by failing to
    make available any contract, agreement or other
    arrangement which is made available or otherwise offered to
    any person.
    (f) It is deemed a violation for a manufacturer, a
distributor, a wholesale, a distributor branch or division, a
factory branch or division, or a wholesale branch or division,
or officer, agent, broker, shareholder, except a shareholder of
1% or less of the outstanding shares of any class of securities
of a manufacturer, distributor, or wholesaler which is a
publicly traded corporation, or other representative, directly
or indirectly, to own or operate a place of business as a motor
vehicle franchisee or motor vehicle financing affiliate,
except that, this subsection shall not prohibit the ownership
or operation of a place of business by a manufacturer,
distributor, or wholesaler for a period, not to exceed 18
months, during the transition from one motor vehicle franchisee
to another; or the investment in a motor vehicle franchisee by
a manufacturer, distributor, or wholesaler if the investment is
for the sole purpose of enabling a partner or shareholder in
that motor vehicle franchisee to acquire an interest in that
motor vehicle franchisee and that partner or shareholder is not
otherwise employed by or associated with the manufacturer,
distributor, or wholesaler and would not otherwise have the
requisite capital investment funds to invest in the motor
vehicle franchisee, and has the right to purchase the entire
equity interest of the manufacturer, distributor, or
wholesaler in the motor vehicle franchisee within a reasonable
period of time not to exceed 5 years.
    (g) Notwithstanding the terms, provisions, or conditions
of any agreement or waiver, it shall be deemed a violation for
a manufacturer, a distributor, a wholesaler, a distributor
branch or division, a factory branch or division, or a
wholesale branch or division, or officer, agent or other
representative thereof, to directly or indirectly condition
the awarding of a franchise to a prospective new motor vehicle
dealer, the addition of a line make or franchise to an existing
dealer, the renewal of a franchise of an existing dealer, the
approval of the relocation of an existing dealer's facility, or
the approval of the sale or transfer of the ownership of a
franchise on the willingness of a dealer, proposed new dealer,
or owner of an interest in the dealership facility to enter
into a site control agreement or exclusive use agreement unless
separate and reasonable consideration was offered and accepted
for that agreement.
    For purposes of this subsection (g), the terms "site
control agreement" and "exclusive use agreement" include any
agreement that has the effect of either (i) requiring that the
dealer establish or maintain exclusive dealership facilities;
or (ii) restricting the ability of the dealer, or the ability
of the dealer's lessor in the event the dealership facility is
being leased, to transfer, sell, lease, or change the use of
the dealership premises, whether by sublease, lease,
collateral pledge of lease, or other similar agreement. "Site
control agreement" and "exclusive use agreement" also include a
manufacturer restricting the ability of a dealer to transfer,
sell, or lease the dealership premises by right of first
refusal to purchase or lease, option to purchase, or option to
lease if the transfer, sale, or lease of the dealership
premises is to a person who is an immediate family member of
the dealer. For the purposes of this subsection (g), "immediate
family member" means a spouse, parent, son, daughter,
son-in-law, daughter-in-law, brother, and sister.
    If a manufacturer exercises any right of first refusal to
purchase or lease or option to purchase or lease with regard to
a transfer, sale, or lease of the dealership premises to a
person who is not an immediate family member of the dealer,
then (1) within 60 days from the receipt of the completed
application forms generally utilized by a manufacturer to
conduct its review and a copy of all agreements regarding the
proposed transfer, the manufacturer must notify the dealer of
its intent to exercise the right of first refusal to purchase
or lease or option to purchase or lease and (2) the exercise of
the right of first refusal to purchase or lease or option to
purchase or lease must result in the dealer receiving
consideration, terms, and conditions that either are the same
as or greater than that which they have contracted to receive
in connection with the proposed transfer, sale, or lease of the
dealership premises.
    Any provision contained in any agreement entered into on or
after the effective date of this amendatory Act of the 96th
General Assembly that is inconsistent with the provisions of
this subsection (g) shall be voidable at the election of the
affected dealer, prospective dealer, or owner of an interest in
the dealership facility.
    (h) For purposes of this subsection:
    "Successor manufacturer" means any motor vehicle
manufacturer that, on or after January 1, 2009, acquires,
succeeds to, or assumes any part of the business of another
manufacturer, referred to as the "predecessor manufacturer",
as the result of any of the following:
        (i) A change in ownership, operation, or control of the
    predecessor manufacturer by sale or transfer of assets,
    corporate stock or other equity interest, assignment,
    merger, consolidation, combination, joint venture,
    redemption, court-approved sale, operation of law or
    otherwise.
        (ii) The termination, suspension, or cessation of a
    part or all of the business operations of the predecessor
    manufacturer.
        (iii) The discontinuance of the sale of the product
    line.
        (iv) A change in distribution system by the predecessor
    manufacturer, whether through a change in distributor or
    the predecessor manufacturer's decision to cease
    conducting business through a distributor altogether.
    "Former Franchisee" means a new motor vehicle dealer that
has entered into a franchise with a predecessor manufacturer
and that has either:
        (i) entered into a termination agreement or deferred
    termination agreement with a predecessor or successor
    manufacturer related to such franchise; or
        (ii) has had such franchise canceled, terminated,
    nonrenewed, noncontinued, rejected, nonassumed, or
    otherwise ended.
    For a period of 3 years from: (i) the date that a successor
manufacturer acquires, succeeds to, or assumes any part of the
business of a predecessor manufacturer; (ii) the last day that
a former franchisee is authorized to remain in business as a
franchised dealer with respect to a particular franchise under
a termination agreement or deferred termination agreement with
a predecessor or successor manufacturer; (iii) the last day
that a former franchisee that was cancelled, terminated,
nonrenewed, noncontinued, rejected, nonassumed, or otherwise
ended by a predecessor or successor manufacturer is authorized
to remain in business as a franchised dealer with respect to a
particular franchise; or (iv) the effective date of this
amendatory Act of the 96th General Assembly, whichever is
latest, it shall be unlawful for such successor manufacturer to
enter into a same line make franchise with any person or to
permit the relocation of any existing same line make franchise,
for a line make of the predecessor manufacturer that would be
located or relocated within the relevant market area of a
former franchisee who owned or leased a dealership facility in
that relevant market area without first offering the additional
or relocated franchise to the former franchisee, or the
designated successor of such former franchisee in the event the
former franchisee is deceased or disabled, at no cost and
without any requirements or restrictions other than those
imposed generally on the manufacturer's other franchisees at
that time, unless one of the following applies:
        (1) As a result of the former franchisee's
    cancellation, termination, noncontinuance, or nonrenewal
    of the franchise, the predecessor manufacturer had
    consolidated the line make with another of its line makes
    for which the predecessor manufacturer had a franchisee
    with a then-existing dealership facility located within
    that relevant market area.
        (2) The successor manufacturer has paid the former
    franchisee, or the designated successor of such former
    franchisee in the event the former franchisee is deceased
    or disabled, the fair market value of the former
    franchisee's franchise on (i) the date the franchisor
    announces the action which results in the termination,
    cancellation, or nonrenewal; or (ii) the date the action
    which results in termination, cancellation, or nonrenewal
    first became general knowledge; or (iii) the day 12 months
    prior to the date on which the notice of termination,
    cancellation, or nonrenewal is issued, whichever amount is
    higher. Payment is due within 90 days of the effective date
    of the termination, cancellation, or nonrenewal. If the
    termination, cancellation, or nonrenewal is due to a
    manufacturer's change in distributors, the manufacturer
    may avoid paying fair market value to the dealer if the new
    distributor or the manufacturer offers the dealer a
    franchise agreement with terms acceptable to the dealer.
        (3) The successor manufacturer proves that it would
    have had good cause to terminate the franchise agreement of
    the former franchisee, or the successor of the former
    franchisee under item (e)(10) in the event that the former
    franchisee is deceased or disabled. The determination of
    whether the successor manufacturer would have had good
    cause to terminate the franchise agreement of the former
    franchisee, or the successor of the former franchisee,
    shall be made by the Board under subsection (d) of Section
    12. A successor manufacturer that seeks to assert that it
    would have had good cause to terminate a former franchisee,
    or the successor of the former franchisee, must file a
    petition seeking a hearing on this issue before the Board
    and shall have the burden of proving that it would have had
    good cause to terminate the former franchisee or the
    successor of the former franchisee. No successor dealer,
    other than the former franchisee, may be appointed or
    franchised by the successor manufacturer within the
    relevant market area of the former franchisee until the
    Board has held a hearing and rendered a determination on
    the issue of whether the successor manufacturer would have
    had good cause to terminate the former franchisee.
    In the event that a successor manufacturer attempts to
enter into a same line make franchise with any person or to
permit the relocation of any existing line make franchise under
this subsection (h) at a location that is within the relevant
market area of 2 or more former franchisees, then the successor
manufacturer may not offer it to any person other than one of
those former franchisees unless the successor manufacturer can
prove that at least one of the 3 exceptions in items (1), (2),
and (3) of this subsection (h) applies to each of those former
franchisees.
(Source: P.A. 96-11, eff. 5-22-09.)
 
    Section 99. Effective date. This Act takes effect upon
becoming law.