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Public Act 91-0415
HB0555 Enrolled LRB9101217KSsb
AN ACT concerning motor vehicles.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Illinois Vehicle Code is amended by
changing Sections 5-100, 5-401.2, 5-402, 5-402.1, and 5-403.1
and adding Section 5-101.1 as follows:
(625 ILCS 5/5-100) (from Ch. 95 1/2, par. 5-100)
Sec. 5-100. Definitions. For the purposes of this
Chapter, the following words shall have the meanings ascribed
to them as follows:
"Additional place of business" means a place owned or
leased and occupied by the dealer in addition to its
established place of business, at which the dealer conducts
or intends to conduct business on a permanent or long term
basis. The term does not include an area where an off site
sale or exhibition is conducted. The Secretary of State
shall adopt guidelines for the administration and enforcement
of this definition by rule.
"Display exhibition" means a temporary display of
vehicles by a dealer licensed under Section 5-101 or 5-102,
at a location at which no vehicles are offered for sale, that
is conducted at a place other than the dealer's established
and additional places of business.
"Established place of business" means the place owned or
leased and occupied by any person duly licensed or required
to be licensed as a dealer for the purpose of engaging in
selling, buying, bartering, displaying, exchanging or dealing
in, on consignment or otherwise, vehicles and their essential
parts and for such other ancillary purposes as may be
permitted by the Secretary by rule. It shall include an
office in which the dealer's records shall be separate and
distinct from any other business or tenant which may occupy
space in the same building except as provided in Section
5-101.1. This office shall not be located in a house
trailer, residence, tent, temporary stand, temporary address,
room or rooms in a hotel or rooming house, nor the premises
occupied by a single or multiple unit residence. The
established place of business of a scrap processor shall be
the fixed location where the scrap processor maintains its
principal place of business. The Secretary of State shall,
by rule and regulation, adopt guidelines for the
administration and enforcement of this definition, such as,
but not limited to issues concerning the required hours of
operation, describing where vehicles are displayed and
offered for sale, where books and records are maintained and
requirements for the fulfillment of warranties. A dealer may
have an additional place of business as defined under this
Section.
"Motor vehicle financing affiliate" means a business
organization registered to do business in Illinois that,
pursuant to a written contract with either (1) a single new
or used motor vehicle dealer or (2) a single group of new or
used motor vehicle dealers that share a common ownership
within the group, purchases new or used motor vehicles on
behalf of the dealer or group of dealers and then sells,
transfers, or assigns those motor vehicles to the dealer or
group of dealers. The motor vehicle financing affiliate must
be incorporated or organized solely to purchase new or used
vehicles on behalf of the new or used motor vehicle dealer or
group of dealers with which it has contracted, shall not sell
motor vehicles at retail, shall perform only those business
functions related to the purchasing of motor vehicles and
selling, transferring, or assigning those motor vehicles to
the dealer or group of dealers. The motor vehicle financing
affiliate must be licensed under the provisions of Section
5-101.1 and must not be licensed as a new or used motor
vehicle dealer.
"Off site sale" means the temporary display and sale of
vehicles, for a period of not more than 7 calendar days
(excluding Sundays), by a dealer licensed under Section 5-101
or 5-102 at a place other than the dealer's established and
additional places of business.
"Relevant market area", for a new vehicle dealer licensed
under Section 5-101 and for a used vehicle dealer licensed
under Section 5-102, means the area within 10 miles of the
established or additional place of business of the dealer
located in a county with a population of 300,000 or more, or
within 15 miles if the established place of business is
located in a county with a population of less than 300,000.
"Trade show exhibition" means a temporary display of
vehicles, by dealers licensed under Section 5-101 or 5-102,
or any other person as defined in subsection (c) of Section
5-102.1, at a location at which no vehicles are offered for
sale that is conducted at a place other than the dealer's
established and additional places of business. In order for
a display exhibition to be considered a trade show
exhibition, it must be participated in by at least 3 dealers,
2 of which must be licensed under Section 5-101 or 5-102; and
a trade show exhibition of new vehicles shall only be
participated in by licensed new vehicle dealers at least 2 of
which must be licensed under Section 5-101.
(Source: P.A. 89-235, eff. 8-4-95; 90-89, eff. 1-1-98.)
(625 ILCS 5/5-101.1 new)
Sec. 5-101.1. Motor vehicle financing affiliates;
licensing.
(a) In this State no business shall engage in the
business of a motor vehicle financing affiliate without a
license to do so in writing from the Secretary of State.
(b) An application for a motor vehicle financing
affiliate's license must be filed with the Secretary of
State, duly verified by oath, on a form prescribed by the
Secretary of State and shall contain all of the following:
(1) The name and type of business organization of
the applicant and the applicant's established place of
business and any additional places of business in this
State.
(2) The name and address of the licensed new or
used vehicle dealer to which the applicant will be
selling, transferring, or assigning new or used motor
vehicles pursuant to a written contract. If more than
one dealer is on the application, the applicant shall
state in writing the basis of common ownership among the
dealers.
(3) A list of the business organization's officers,
directors, members, and shareholders having a 10% or
greater ownership interest in the business, providing the
residential address for each person listed.
(4) If selling, transferring, or assigning new
motor vehicles, the make or makes of new vehicles that it
will sell, assign, or otherwise transfer to the
contracting new motor vehicle dealer listed on the
application pursuant to paragraph (2).
(5) The name of each manufacturer or franchised
distributor, if any, of new vehicles with whom the
applicant has contracted for the sale of new vehicles and
a signed statement from each manufacturer or franchised
distributor acknowledging the contract.
(6) A statement that the applicant has been
approved for registration under the Retailers' Occupation
Tax Act by the Department of Revenue. This requirement
does not apply to a motor vehicle financing affiliate
that is already licensed with the Secretary of State and
is applying for a renewal of its license.
(7) A statement that the applicant has complied
with the appropriate liability insurance requirement and
a Certificate of Insurance that shall not expire before
December 31 of the year for which the license was issued
or renewed with a minimum liability coverage of $100,000
for the bodily injury or death of any person, $300,000
for the bodily injury or death of 2 or more persons in
any one accident, and $50,000 for damage to property.
The expiration of the insurance policy shall not
terminate the liability under the policy arising during
the period for which the policy was filed. Trailer and
mobile home dealers are exempt from the requirements of
this paragraph. A motor vehicle financing affiliate is
exempt from the requirements of this paragraph if it is
covered by the insurance policy of the new or used dealer
listed on the application pursuant to paragraph (2).
(8) A license fee of $1,000 for the applicant's
established place of business and $250 for each
additional place of business, if any, to which the
application pertains. However, if the application is made
after June 15 of any year, the license fee shall be $500
for the applicant's established place of business and
$125 for each additional place of business, if any, to
which the application pertains. These license fees shall
be returnable only in the event that the application is
denied by the Secretary of State.
(9) A statement incorporating the requirements of
paragraphs 8 and 9 of subsection (b) of Section 5-101.
(10) Any other information concerning the business
of the applicant as the Secretary of State may prescribe.
(11) A statement that the applicant understands
Chapter 1 through Chapter 5 of this Code.
(c) Any change which renders no longer accurate any
information contained in any application for a motor vehicle
financing affiliate's license shall be amended within 30 days
after the occurrence of the change on a form prescribed by
the Secretary of State, accompanied by an amendatory fee of
$2.
(d) If a new vehicle dealer is not listed on the
application, pursuant to paragraph (2) of subsection (b), the
motor vehicle financing affiliate shall not receive, possess,
or transfer any new vehicle. If a new motor vehicle dealer
is listed on the application, pursuant to paragraph (2) of
subsection (b), the new motor vehicle dealer can only receive
those new cars it is permitted to receive under its franchise
agreement. If both a new and used motor vehicle dealer are
listed on the application, pursuant to paragraph (2) of
subsection (b), only the new motor vehicle dealer may receive
new motor vehicles. If a used motor vehicle is listed on the
application, pursuant to paragraph (2) of subsection (b),
the used motor vehicle dealer shall not receive any new motor
vehicles.
(e) The applicant and dealer provided pursuant to
paragraph (2) of subsection (b) must be business
organizations registered to conduct business in Illinois.
Three-fourths of the dealer's board of directors must be
members of the motor vehicle financing affiliate's board of
directors, if applicable.
(f) Unless otherwise provided in this Chapter 5, no
business organization registered to do business in Illinois
shall be licensed as a motor vehicle financing affiliate
unless:
(1) The motor vehicle financing affiliate shall
only sell, transfer, or assign motor vehicles to the
licensed new or used dealer listed on the application
pursuant to paragraph (2) of subsection (b).
(2) The motor vehicle financing affiliate sells,
transfers, or assigns to the new motor vehicle dealer
listed on the application, if any, only those new motor
vehicles the motor vehicle financing affiliate has
received under the contract set forth in paragraph (5) of
subsection (b).
(3) Any new vehicle dealer listed pursuant to
paragraph (2) of subsection (b) has a franchise agreement
that permits the dealer to receive motor vehicles from
the motor vehicle franchise affiliate.
(4) The new or used motor vehicle dealer listed on
the application pursuant to paragraph (2) of subsection
(b) has one established place of business or supplemental
places of business as referenced in subsection (g).
(g) The Secretary of State shall, within a reasonable
time after receipt, examine an application submitted pursuant
to this Section and, unless it is determined that the
application does not conform with the requirements of this
Section or that grounds exist for a denial of the application
under Section 5-501, grant the applicant a motor vehicle
financing affiliate license in writing for the applicant's
established place of business and a supplemental license in
writing for each additional place of business in a form
prescribed by the Secretary, which shall include all of the
following:
(1) The name of the business licensed;
(2) The name and address of its officers,
directors, or members, as applicable;
(3) In the case of an original license, the
established place of business of the licensee; and
(4) If applicable, the make or makes of new
vehicles which the licensee is licensed to sell to the
new motor vehicle dealer listed on the application
pursuant to paragraph (2) of subsection (b).
(h) The appropriate instrument evidencing the license or
a certified copy, provided by the Secretary of State, shall
be kept posted conspicuously in the established place of
business of the licensee.
(i) Except as provided in subsection (h), all motor
vehicle financing affiliate's licenses granted under this
Section shall expired by operation of law on December 31 of
the calendar year for which they are granted, unless revoked
or canceled at an earlier date pursuant to Section 5-501.
(j) A motor vehicle financing affiliate's license may be
renewed upon application and payment of the required fee.
However, when an application for renewal of a motor vehicle
financing affiliate's license is made during the month of
December, the effective license shall remain in force until
the application is granted or denied by the Secretary of
State.
(k) The contract a motor vehicle financing affiliate has
with a manufacturer or franchised distributor, as provided in
paragraph (5) of subsection (b), shall only permit the
applicant to sell, transfer, or assign new motor vehicles to
the new motor vehicle dealer listed on the application
pursuant to paragraph (2) of subsection (b). The contract
shall specifically prohibit the motor vehicle financing
affiliate from selling motor vehicles at retail. This
contract shall not be considered the granting of a franchise
as defined in Section 2 of the Motor Vehicle Franchise Act.
(l) When purchasing of a motor vehicle by a new or used
motor vehicle dealer, all persons licensed as a motor vehicle
financing affiliate are required to furnish all of the
following:
(1) For a new vehicle, a manufacturer's statement
of origin properly assigned to the purchasing dealer.
For a used vehicle, a certificate of title properly
assigned to the purchasing dealer.
(2) A statement verified under oath that all
identifying numbers on the vehicle agree with those on
the certificate of title or manufacturer's statement of
origin.
(3) A bill of sale properly executed on behalf of
the purchasing dealer.
(4) A copy of the Uniform Invoice-transaction
report pursuant to Section 5-402.
(5) In the case of a rebuilt vehicle, a copy of the
Disclosure of Rebuilt Vehicle Status pursuant to Section
5-104.3.
(6) In the case of a vehicle for which a warranty
has been reinstated, a copy of the warranty.
(m) The motor vehicle financing affiliate shall use the
established and supplemental place or places of business the
new or used vehicle dealer listed on the application pursuant
to paragraph (2) of subsection (b) as its established and
supplemental place or places of business.
(n) The motor vehicle financing affiliate shall keep all
books and records required by this Code with the books and
records of the new or used vehicle dealer listed on the
application pursuant to paragraph (2) of subsection (b). The
motor vehicle financing affiliate may use the books and
records of the new or used motor vehicle dealer listed on the
application pursuant to paragraph (2) of subsection (b).
(o) Under no circumstances shall a motor vehicle
financing affiliate sell, transfer, or assign a new vehicle
to any place of business of a new motor vehicle dealer,
unless that place of business is licensed under this Chapter
to sell, assign, or otherwise transfer the make of the new
motor vehicle transferred.
(p) All moneys received by the Secretary of State as
license fees under this Section shall be deposited into the
Motor Vehicle Review Board Fund and shall be used to
administer the Motor Vehicle Review Board under the Motor
Vehicle Franchise Act.
(q) Except as otherwise provided in this Section, a
motor vehicle financing affiliate shall comply with all
provisions of this Code.
(625 ILCS 5/5-401.2) (from Ch. 95 1/2, par. 5-401.2)
Sec. 5-401.2. Licensees required to keep records and
make inspections.
(a) Every person licensed or required to be licensed
under Section 5-101, 5-101.1, 5-102, 5-301 or 5-302 of this
Code, shall, with the exception of scrap processors, maintain
for 3 years, in a form as the Secretary of State may by rule
or regulation prescribe, at his established place of
business, additional place of business, or principal place of
business if licensed under Section 5-302, the following
records relating to the acquisition or disposition of
vehicles and their essential parts possessed in this State,
brought into this State from another state, territory or
country, or sold or transferred to another person in this
State or in another state, territory, or country.
(1) the following records pertaining to new or used
vehicles shall be kept:
(A) the year, make, model, style and color of
the vehicle;
(B) the vehicle's manufacturer's
identification number or, if applicable, the
Secretary of State or Illinois Department of State
Police identification number;
(C) the date of acquisition of the vehicle;
(D) the name and address of the person from
whom the vehicle was acquired and, if that person is
a dealer, the Illinois or out-of-state dealer
license number of such person;
(E) the signature of the person making the
inspection of a used vehicle as required under
subsection (d) of this Section, if applicable;
(F) the purchase price of the vehicle, if
applicable;
(G) the date of the disposition of the
vehicle;
(H) the name and address of the person to whom
any vehicle was disposed, and if that person is a
dealer, the Illinois or out-of-State dealer's
license number of that dealer;
(I) the uniform invoice number reflecting the
disposition of the vehicle, if applicable; and
(J) The sale price of the vehicle, if
applicable.
(2) (A) the following records pertaining to used
essential parts other than quarter panels and transmissions
of vehicles of the first division shall be kept:
(i) the year, make, model, color and type
of such part;
(ii) the vehicle's manufacturer's
identification number, derivative number, or,
if applicable, the Secretary of State or
Illinois Department of State Police
identification number of such part;
(iii) the date of the acquisition of each
part;
(iv) the name and address of the person
from whom the part was acquired and, if that
person is a dealer, the Illinois or
out-of-state dealer license number of such
person; if the essential part being acquired is
from a person other than a dealer, the licensee
shall verify and record that person's identity
by recording the identification numbers from at
least two sources of identification, one of
which shall be a drivers license or State
identification card;
(v) the uniform invoice number or
out-of-state bill of sale number reflecting the
acquisition of such part;
(vi) the stock number assigned to the
essential part by the licensee, if applicable;
(vii) the date of the disposition of such
part;
(viii) the name and address of the person
to whom such part was disposed of and, if that
person is a dealer, the Illinois or
out-of-state dealer license number of that
person;
(ix) the uniform invoice number
reflecting the disposition of such part.
(B) Inspections of all essential parts shall be
conducted in accordance with Section 5-402.1.
(C) A separate entry containing all of the
information required to be recorded in subparagraph (A)
of paragraph (2) of subsection (a) of this Section shall
be made for each separate essential part. Separate
entries shall be made regardless of whether the part was
a large purchase acquisition. In addition, a separate
entry shall be made for each part acquired for immediate
sale or transfer, or for placement into the overall
inventory or stock to be disposed of at a later time, or
for use on a vehicle to be materially altered by the
licensee, or acquired for any other purpose or reason.
Failure to make a separate entry for each essential part
acquired or disposed of, or a failure to record any of
the specific information required to be recorded
concerning the acquisition or disposition of each
essential part as set forth in subparagraph (A) of
paragraph (2) of subsection (a) shall constitute a
failure to keep records.
(D) The vehicle's manufacturer's identification
number or Secretary of State or Illinois Department of
State Police identification number for the essential part
shall be ascertained and recorded even if such part is
acquired from a person or dealer located in a State,
territory, or country which does not require that such
information be recorded. If the vehicle's manufacturer's
identification number or Secretary of State or Illinois
Department of State Police identification number for an
essential part cannot be obtained, that part shall not be
acquired by the licensee or any of his agents or
employees. If such part or parts were physically acquired
by the licensee or any of his agents or employees while
the licensee or agent or employee was outside this State,
that licensee or agent or employee was outside the State,
that licensee, agent or employee shall not bring such
essential part into this State or cause it to be brought
into this State. The acquisition or disposition of an
essential part by a licensee without the recording of the
vehicle identification number or Secretary of State
identification number for such part or the transportation
into the State by the licensee or his agent or employee
of such part or parts shall constitute a failure to keep
records.
(E) The records of essential parts required to be
kept by this Section shall apply to all hulks, chassis,
frames or cowls, regardless of the age of those essential
parts. The records required to be kept by this Section
for essential parts other than hulks, chassis, frames or
cowls, shall apply only to those essential parts which
are 6 model years of age or newer. In determining the
model year of such an essential part it may be presumed
that the identification number of the vehicle from which
the essential part came or the identification number
affixed to the essential part itself acquired by the
licensee denotes the model year of that essential part.
This presumption, however, shall not apply if the gross
appearance of the essential part does not correspond to
the year, make or model of either the identification
number of the vehicle from which the essential part is
alleged to have come or the identification number which
is affixed to the essential part itself. To determine
whether an essential part is 6 years of age or newer
within this paragraph, the model year of the essential
part shall be subtracted from the calendar year in which
the essential part is acquired or disposed of by the
licensee. If the remainder is 6 or less, the record of
the acquisition or disposition of that essential part
shall be kept as required by this Section.
(F) The requirements of paragraph (2) of subsection
(a) of this Section shall not apply to the disposition of
an essential part other than a cowl which has been
damaged or altered to a state in which it can no longer
be returned to a usable condition and which is being sold
or transferred to a scrap processor or for delivery to a
scrap processor.
(3) the following records for vehicles on which junking
certificates are obtained shall be kept:
(A) the year, make, model, style and color of
the vehicle;
(B) the vehicle's manufacturer's
identification number or, if applicable, the
Secretary of State or Illinois Department of State
Police identification number;
(C) the date the vehicle was acquired;
(D) the name and address of the person from
whom the vehicle was acquired and, if that person is
a dealer, the Illinois or out-of-state dealer
license number of that person;
(E) the certificate of title number or salvage
certificate number for the vehicle, if applicable;
(F) the junking certificate number obtained by
the licensee; this entry shall be recorded at the
close of business of the second business day after
receiving the junking certificate;
(G) the name and address of the person to whom
the junking certificate has been assigned, if
applicable, and if that person is a dealer, the
Illinois or out-of-state dealer license number of
that dealer;
(H) if the vehicle or any part of the vehicle
is dismantled for its parts to be disposed of in any
way, or if such parts are to be used by the licensee
to materially alter a vehicle, those essential parts
shall be recorded in the record book for essential
parts and the entries required by paragraph (2) of
subsection (a) shall be made.
(4) the following records for rebuilt vehicles shall be
kept:
(A) the year, make, model, style and color of
the vehicle;
(B) the vehicle's manufacturer's
identification number of the vehicle or, if
applicable, the Secretary of State or Illinois
Department of State Police identification number;
(C) the date the vehicle was acquired;
(D) the name and address of the person from
whom the vehicle was acquired, and if that person is
a dealer, the Illinois or out-of-state dealer
license number of that person;
(E) the salvage certificate number for the
vehicle;
(F) the newly issued certificate of title
number for the vehicle;
(G) the date of disposition of the vehicle;
(H) the name and address of the person to whom
the vehicle was disposed, and if a dealer, the
Illinois or out-of-state dealer license number of
that dealer;
(I) The sale price of the vehicle.
(b) A failure to make separate entries for each vehicle
acquired, disposed of, or assigned, or a failure to record
any of the specific information required to be recorded
concerning the acquisition or disposition of each vehicle as
set forth in paragraphs (1), (3) and (4) of subsection (a)
shall constitute a failure to keep records.
(c) All entries relating to the acquisition of a vehicle
or essential part required by subsection (a) of this Section
shall be recorded no later than the close of business on the
seventh calendar day following such acquisition. All entries
relating to the disposition of a vehicle or an essential part
shall be made at the time of such disposition. If the
vehicle or essential part was disposed of on the same day as
its acquisition or the day thereafter, the entries relating
to the acquisition of the vehicle or essential part shall be
made at the time of the disposition of the vehicle or
essential part. Failure to make the entries required in or at
the times prescribed by this subsection following the
acquisition or disposition of such vehicle or essential part
shall constitute a failure to keep records.
(d) Every person licensed or required to be licensed
shall, before accepting delivery of a used vehicle, inspect
the vehicle to determine whether the manufacturer's public
vehicle identification number has been defaced, destroyed,
falsified, removed, altered, or tampered with in any way. If
the person making the inspection determines that the
manufacturer's public vehicle identification number has been
altered, removed, defaced, destroyed, falsified or tampered
with he shall not acquire that vehicle but instead shall
promptly notify law enforcement authorities of his finding.
(e) The information required to be kept in subsection
(a) of this Section shall be kept in a manner prescribed by
rule or regulation of the Secretary of State.
(f) Every person licensed or required to be licensed
shall have in his possession a separate certificate of title,
salvage certificate, junking certificate, certificate of
purchase, uniform invoice, out-of-state bill of sale or other
acceptable documentary evidence of his right to the
possession of every vehicle or essential part.
(g) Every person licensed or required to be licensed as
a transporter under Section 5-201 shall maintain for 3 years,
in such form as the Secretary of State may by rule or
regulation prescribe, at his principal place of business a
record of every vehicle transported by him, including numbers
of or other marks of identification thereof, the names and
addresses of persons from whom and to whom the vehicle was
delivered and the dates of delivery.
(h) No later than 15 days prior to going out of
business, selling the business, or transferring the ownership
of the business, the licensee shall notify the Secretary of
State that he is going out of business or that he is
transferring the ownership of the business. Failure to notify
under this paragraph shall constitute a failure to keep
records.
(i) Any person who knowingly fails to keep the records
required by this Section or who knowingly violates this
Section shall be guilty of a Class 2 felony. Each violation
shall constitute a separate and distinct offense and a
separate count may be brought in the same indictment or
information for each vehicle or each essential part of a
vehicle for which a record was not kept as required by this
Section.
(Source: P.A. 89-189, eff. 1-1-96; 89-235, eff. 8-4-95.)
(625 ILCS 5/5-402) (from Ch. 95 1/2, par. 5-402)
Sec. 5-402. Use of Department of Revenue Uniform Invoice
for vehicle. Every person licensed as a new vehicle dealer,
or as a used vehicle dealer, or as a motor vehicle financing
affiliate shall issue a Uniform Invoice with respect to each
transaction wherein he disposes of a vehicle, except that
where, in the same transaction, a vehicle dealer transfers
more than one vehicle to another vehicle dealer for the
purpose of resale, such seller for resale may issue one
Uniform Invoice to the purchaser covering all the vehicles
involved in that transaction and may report the transfer of
all the vehicles involved in that transaction to the
Department on the same Uniform Invoice-transaction reporting
return form. Every person licensed as a rebuilder shall
likewise issue a Uniform Invoice with respect to each
transaction wherein he disposes of a rebuilt or restored
vehicle. Such Uniform Invoice shall be the same document as
the transaction reporting return referred to in Section 3 of
the Retailers' Occupation Tax Act. Such Uniform Invoice shall
contain complete financial details of the transaction in such
form as shall be prescribed by the Department of Revenue.
Such Uniform Invoice shall include an affidavit by both the
seller and the buyer that any trade-in title has been
properly assigned from the buyer to the seller and that all
information on the Uniform Invoice-transaction reporting
return is true and accurate.
(Source: P.A. 85-1396.)
(625 ILCS 5/5-402.1) (from Ch. 95 1/2, par. 5-402.1)
Sec. 5-402.1. Use of Secretary of State Uniform Invoice
for Essential Parts.
(a) Except for scrap processors, every person licensed
or required to be licensed under Section 5-101, 5-101.1,
5-102 or 5-301 of this Code shall issue, in a form the
Secretary of State may by rule or regulation prescribe, a
Uniform Invoice, which may also act as a bill of sale, made
out in triplicate with respect to each transaction in which
he disposes of an essential part other than quarter panels
and transmissions of vehicles of the first division. Such
Invoice shall be made out at the time of the disposition of
the essential part. If the licensee disposes of several
essential parts in the same transaction, the licensee may
issue one Uniform Invoice covering all essential parts
disposed of in that transaction.
(b) The following information shall be contained on the
Uniform Invoice:
(1) the business name, address and dealer license
number of the person disposing of the essential part;
(2) the name and address of the person acquiring
the essential part, and if that person is a dealer, the
Illinois or out-of-state dealer license number of that
dealer;
(3) the date of the disposition of the essential
part;
(4) the year, make, model, color and description of
each essential part disposed of by the person;
(5) the manufacturer's vehicle identification
number, Secretary of State identification number or
Illinois Department of State Police identification
number, for each essential part disposed of by the
person;
(6) the printed name and legible signature of the
person or agent disposing of the essential part; and
(7) if the person is a dealer the printed name and
legible signature of the dealer or his agent or employee
accepting delivery of the essential part.
(c) Except for scrap processors, and except as set forth
in subsection (d) of this Section, whenever a person licensed
or required to be licensed by Section 5-101, 5-101.1, 5-102,
or 5-301 accepts delivery of an essential part, other than
quarter panels and transmissions of vehicles of the first
division, that person shall, at the time of the acceptance or
delivery, comply with the following procedures:
(1) Before acquiring or accepting delivery of any
essential part, the licensee or his authorized agent or
employee shall inspect the part to determine whether the
vehicle identification number, Secretary of State
identification number, Illinois Department of State
Police identification number, or identification plate or
sticker attached to or stamped on any part being acquired
or delivered has been removed, falsified, altered,
defaced, destroyed, or tampered with. If the licensee or
his agent or employee determines that the vehicle
identification number, Secretary of State identification
number, Illinois Department of State Police
identification number, identification plate or
identification sticker containing an identification
number, or Federal Certificate label of an essential part
has been removed, falsified, altered, defaced, destroyed
or tampered with, the licensee or agent shall not accept
or receive that part.
If that part was physically acquired by or delivered
to a licensee or his agent or employee while that
licensee, agent or employee was outside this State, that
licensee or agent or employee shall not bring that
essential part into this State or cause it to be brought
into this State.
(2) If the person disposing of or delivering the
essential part to the licensee is a licensed in-state or
out-of-state dealer, the licensee or his agent or
employee, after inspecting the essential part as required
by paragraph (1) of this subsection (c), shall examine
the Uniform Invoice, or bill of sale, as the case may be,
to ensure that it contains all the information required
to be provided by persons disposing of essential parts as
set forth in subsection (b) of this Section. If the
Uniform Invoice or bill of sale does not contain all the
information required to be listed by subsection (b) of
this Section, the dealer disposing of or delivering such
part or his agent or employee shall record such
additional information or other needed modifications on
the Uniform Invoice or bill of sale or, if needed, an
attachment thereto. The dealer or his agent or employee
delivering the essential part shall initial all additions
or modifications to the Uniform Invoice or bill of sale
and legibly print his name at the bottom of each document
containing his initials. If the transaction involves a
bill of sale rather than a Uniform Invoice, the licensee
or his agent or employee accepting delivery of or
acquiring the essential part shall affix his printed name
and legible signature on the space on the bill of sale
provided for his signature or, if no space is provided,
on the back of the bill of sale. If the dealer or his
agent or employee disposing of or delivering the
essential part cannot or does not provide all the
information required by subsection (b) of this Section,
the licensee or his agent or employee shall not accept or
receive any essential part for which that required
information is not provided. If such essential part for
which the information required is not fully provided was
physically acquired while the licensee or his agent or
employee was outside this State, the licensee or his
agent or employee shall not bring that essential part
into this State or cause it to be brought into this
State.
(3) If the person disposing of the essential part
is not a licensed dealer, the licensee or his agent or
employee shall, after inspecting the essential part as
required by paragraph (1) of subsection (c) of this
Section verify the identity of the person disposing of
the essential part by examining 2 sources of
identification, one of which shall be either a driver's
license or state identification card. The licensee or
his agent or employee shall then prepare a Uniform
Invoice listing all the information required to be
provided by subsection (b) of this Section. In the space
on the Uniform Invoice provided for the dealer license
number of the person disposing of the part, the licensee
or his agent or employee shall list the numbers taken
from the documents of identification provided by the
person disposing of the part. The person disposing of
the part shall affix his printed name and legible
signature on the space on the Uniform Invoice provided
for the person disposing of the essential part and the
licensee or his agent or employee acquiring the part
shall affix his printed name and legible signature on the
space provided on the Uniform Invoice for the person
acquiring the essential part. If the person disposing of
the essential part cannot or does not provide all the
information required to be provided by this paragraph, or
does not present 2 satisfactory forms of identification,
the licensee or his agent or employee shall not acquire
that essential part.
(d) If an essential part other than quarter panels and
transmissions of vehicles of the first division was delivered
by a licensed commercial delivery service delivering such
part on behalf of a licensed dealer, the person required to
comply with subsection (c) of this Section may conduct the
inspection of that part required by paragraph (1) of
subsection (c) and examination of the Uniform Invoice or bill
of sale required by paragraph (2) of subsection (c) of this
Section immediately after the acceptance of the part.
(1) If the inspection of the essential part
pursuant to paragraph (1) of subsection (c) reveals that
the vehicle identification number, Secretary of State
identification number, Illinois Department of State
Police identification number, identification plate or
sticker containing an identification number, or Federal
Certificate label of an essential part has been removed,
falsified, altered, defaced, destroyed or tampered with,
the licensee or his agent shall immediately record such
fact on the Uniform Invoice or bill of sale, assign the
part an inventory or stock number, place such inventory
or stock number on both the essential part and the
Uniform Invoice or bill of sale, and record the date of
the inspection of the part on the Uniform Invoice or bill
of sale. The licensee shall, within 7 days of such
inspection, return such part to the dealer from whom it
was acquired.
(2) If the examination of the Uniform Invoice or
bill of sale pursuant to paragraph (2) of subsection (c)
reveals that any of the information required to be listed
by subsection (b) of this Section is missing, the
licensee or person required to be licensed shall
immediately assign a stock or inventory number to such
part, place such stock or inventory number on both the
essential part and the Uniform Invoice or bill of sale,
and record the date of examination on the Uniform Invoice
or bill of sale. The licensee or person required to be
licensed shall acquire the information missing from the
Uniform Invoice or bill of sale within 7 days of the
examination of such Uniform Invoice or bill of sale.
Such information may be received by telephone
conversation with the dealer from whom the part was
acquired. If the dealer provides the missing information
the licensee shall record such information on the Uniform
Invoice or bill of sale along with the name of the person
providing the information. If the dealer does not
provide the required information within the
aforementioned 7 day period, the licensee shall return
the part to that dealer.
(e) Except for scrap processors, all persons licensed or
required to be licensed who acquire or dispose of essential
parts other than quarter panels and transmissions of vehicles
of the first division shall retain a copy of the Uniform
Invoice required to be made by subsections (a), (b) and (c)
of this Section for a period of 3 years.
(f) Except for scrap processors, any person licensed or
required to be licensed under Sections 5-101, 5-102 or 5-301
who knowingly fails to record on a Uniform Invoice any of the
information or entries required to be recorded by subsections
(a), (b) and (c) of this Section, or who knowingly places
false entries or other misleading information on such Uniform
Invoice, or who knowingly fails to retain for 3 years a copy
of a Uniform Invoice reflecting transactions required to be
recorded by subsections (a), (b) and (c) of this Section, or
who knowingly acquires or disposes of essential parts without
receiving, issuing, or executing a Uniform Invoice reflecting
that transaction as required by subsections (a), (b) and (c)
of this Section, or who brings or causes to be brought into
this State essential parts for which the information required
to be recorded on a Uniform Invoice is not recorded as
prohibited by subsection (c) of this Section, or who
knowingly fails to comply with the provisions of this Section
in any other manner shall be guilty of a Class 2 felony.
Each violation shall constitute a separate and distinct
offense and a separate count may be brought in the same
indictment or information for each essential part for which a
record was not kept as required by this Section or for which
the person failed to comply with other provisions of this
Section.
(g) The records required to be kept by this Section may
be examined by a person or persons making a lawful inspection
of the licensee's premises pursuant to Section 5-403.
(h) The records required to be kept by this Section
shall be retained by the licensee at his principal place of
business for a period of 7 years.
(i) The requirements of this Section shall not apply to
the disposition of an essential part other than a cowl which
has been damaged or altered to a state in which it can no
longer be returned to a usable condition and which is being
sold or transferred to a scrap processor or for delivery to a
scrap processor.
(Source: P.A. 85-1204; 85-1396; 85-1440; 86-1179; 86-1209;
86-1475.)
(625 ILCS 5/5-403.1) (from Ch. 95 1/2, par. 5-403.1)
Sec. 5-403.1. Inventory System.
(a) Every person licensed or required to be licensed
under the provisions of Sections 5-101, 5-101.1, 5-102 and
5-301 of this Code shall, under rule and regulation
prescribed by the Secretary of State, maintain an inventory
system of all vehicles or essential parts in such a manner
that a person making an inspection pursuant to the provisions
of Section 5-403 of this Code can readily ascertain the
identity of such vehicles or essential parts and readily
locate such parts on the licensees premises.
(b) Failure to maintain an inventory system as required
under this Section is a Class A misdemeanor.
(c) This Section does not apply to vehicles or essential
parts which have been acquired by a scrap processor for
processing into a form other than a vehicle or essential
part.
(Source: P.A. 86-1209.)
Section 10. The Motor Vehicle Franchise Act is amended
by changing Section 4 and adding Section 3.1 as follows:
(815 ILCS 710/3.1 new)
Sec. 3.1. Motor vehicle financing affiliate. For
purposes of this Act, a franchisee and a motor vehicle
financing affiliate, as defined in Section 5-100 of the
Illinois Vehicle Code, shall be treated as a single entity.
That a franchisee arranges to receive motor vehicles through
a motor vehicle financing affiliate shall not exempt a
manufacturer from the provisions of this Act. A manufacturer
shall not require, directly or indirectly, a motor vehicle
dealer to contract with a motor vehicle financing affiliate
in order to receive its motor vehicles nor shall a
manufacturer prevent, directly or indirectly, a motor vehicle
dealer from contracting with a motor vehicle financing
affiliate in order to receive its motor vehicles. A
manufacturer shall not use a motor vehicle financing
affiliate as a means of avoiding the provisions and
requirements of this Act.
(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.
(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.
(C) Within 15 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.
Good cause shall exist to cancel, terminate or
fail to offer a renewal or replacement franchise or
selling agreement to all franchisees of a line make
if the manufacturer permanently discontinues the
manufacture or assembly of motor vehicles of such
line make.
(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; or
(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 and
reasonable attorneys' fees of the new motor vehicle
dealer, 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.
(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. 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 15
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.
Unless the parties agree upon the grant or establishment
of the additional or relocated franchise within 15 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 or is further away 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 or is further away from the nearest dealer of
the same line make.
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. 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 15 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.
(Source: P.A. 89-145, eff. 7-14-95; 90-655, eff. 7-30-98.)
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