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Rep. Rich Brauer
Filed: 4/5/2005
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09400HB2991ham001 |
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LRB094 05242 RXD 44434 a |
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| AMENDMENT TO HOUSE BILL 2991
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| AMENDMENT NO. ______. Amend House Bill 2991 by replacing |
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| everything after the enacting clause with the following:
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| "Section 5. The Motor Vehicle Franchise Act is amended by |
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| changing Section 4 as follows:
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| (815 ILCS 710/4) (from Ch. 121 1/2, par. 754)
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| Sec. 4. Unfair competition and practices.
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| (a) The unfair methods of competition and unfair and |
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| deceptive acts or
practices listed in this Section are hereby |
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| declared to be unlawful. In
construing the provisions of this |
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| Section, the courts may be guided by the
interpretations of the |
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| Federal Trade Commission Act (15 U.S.C. 45 et
seq.), as from |
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| time to time amended.
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| (b) It shall be deemed a violation for any manufacturer, |
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| factory branch,
factory representative, distributor or |
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| wholesaler, distributor branch,
distributor representative or |
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| motor vehicle dealer to engage in any action
with respect to a |
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| franchise which is arbitrary, in bad faith or
unconscionable |
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| and which causes damage to any of the parties or to the public.
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| (c) It shall be deemed a violation for a manufacturer, a |
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| distributor,
a wholesaler, a distributor branch or division, a |
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| factory branch or division,
or a wholesale branch or division, |
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| or officer, agent or other representative
thereof, to coerce, |
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| or attempt to coerce, any motor vehicle dealer:
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09400HB2991ham001 |
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LRB094 05242 RXD 44434 a |
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| (1) to accept, buy or order any motor vehicle or |
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| vehicles, appliances,
equipment, parts or accessories |
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| therefor, or any other commodity or commodities
or service |
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| or services which such motor vehicle dealer has not |
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| voluntarily
ordered or requested except items required by |
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| applicable local, state or
federal law; or to require a |
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| motor vehicle dealer to accept, buy, order or
purchase such |
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| items in order to obtain any motor vehicle or vehicles or |
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| any
other commodity or commodities which have been ordered |
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| or requested by such
motor vehicle dealer;
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| (2) to order or accept delivery of any motor vehicle |
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| with special
features, appliances, accessories or |
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| equipment not included in the list
price of the motor |
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| vehicles as publicly advertised by the manufacturer
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| thereof, except items required by applicable law; or
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| (3) to order for anyone any parts, accessories, |
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| equipment, machinery,
tools, appliances or any commodity |
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| whatsoever, except items required by
applicable law.
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| (d) It shall be deemed a violation for a manufacturer, a |
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| distributor,
a wholesaler, a distributor branch or division, or |
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| officer, agent or other
representative thereof:
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| (1) to adopt, change, establish or implement a plan or |
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| system for the
allocation and distribution of new motor |
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| vehicles to motor vehicle dealers
which is arbitrary or |
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| capricious or to modify an existing plan so as to cause
the |
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| same to be arbitrary or capricious;
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| (2) to fail or refuse to advise or disclose to any |
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| motor vehicle dealer
having a franchise or selling |
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| agreement, upon written request therefor,
the basis upon |
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| which new motor vehicles of the same line make are |
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| allocated
or distributed to motor vehicle dealers in the |
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| State and the basis upon
which the current allocation or |
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| distribution is being made or will be made
to such motor |
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| vehicle dealer;
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LRB094 05242 RXD 44434 a |
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| (3) to refuse to deliver in reasonable quantities and |
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| within a reasonable
time after receipt of dealer's order, |
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| to any motor vehicle dealer having
a franchise or selling |
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| agreement for the retail sale of new motor vehicles
sold or |
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| distributed by such manufacturer, distributor, wholesaler, |
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| distributor
branch or division, factory branch or division |
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| or wholesale branch or division,
any such motor vehicles as |
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| are covered by such franchise or selling agreement
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| specifically publicly advertised in the State by such |
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| manufacturer,
distributor, wholesaler, distributor branch |
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| or division, factory branch or
division, or wholesale |
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| branch or division to be available for immediate
delivery. |
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| However, the failure to deliver any motor vehicle shall not |
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| be
considered a violation of this Act if such failure is |
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| due to an act of God,
a work stoppage or delay due to a |
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| strike or labor difficulty, a shortage
of materials, a lack |
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| of manufacturing capacity, a freight embargo or other
cause |
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| over which the manufacturer, distributor, or wholesaler, |
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| or any agent
thereof has no control;
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| (4) to coerce, or attempt to coerce, any motor vehicle |
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| dealer to enter
into any agreement with such manufacturer, |
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| distributor, wholesaler, distributor
branch or division, |
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| factory branch or division, or wholesale branch or
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| division, or officer, agent or other representative |
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| thereof, or to do any
other act prejudicial to the dealer |
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| by threatening to reduce his allocation
of motor vehicles |
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| or cancel any franchise or any selling agreement existing
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| between such manufacturer, distributor, wholesaler, |
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| distributor branch or
division, or factory branch or |
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| division, or wholesale branch or division,
and the dealer. |
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| However, notice in good faith to any motor vehicle dealer
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| of the dealer's violation of any terms or provisions of |
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| such franchise or
selling agreement or of any law or |
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| regulation applicable to the conduct of
a motor vehicle |
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LRB094 05242 RXD 44434 a |
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| dealer shall not constitute a violation of this Act;
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| (5) to require a franchisee to participate in an |
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| advertising campaign
or contest or any promotional |
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| campaign, or to purchase or lease any promotional
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| materials, training materials, show room or other display |
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| decorations or
materials at the expense of the franchisee;
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| (6) to cancel or terminate the franchise or selling |
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| agreement of a
motor vehicle dealer without good cause and |
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| without giving notice as
hereinafter provided; to fail or |
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| refuse to extend the franchise or selling
agreement of a |
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| motor vehicle dealer upon its expiration without good cause
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| and without giving notice as hereinafter provided; or, to |
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| offer a renewal,
replacement or succeeding franchise or |
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| selling agreement containing terms
and provisions the |
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| effect of which is to substantially change or modify the
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| sales and service obligations or capital requirements of |
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| the motor vehicle
dealer arbitrarily and without good cause |
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| and without giving notice as
hereinafter provided |
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| notwithstanding any term or provision of a franchise
or |
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| selling agreement.
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| (A) If a manufacturer, distributor, wholesaler, |
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| distributor branch or
division, factory branch or |
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| division or wholesale branch or division intends
to |
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| cancel or terminate a franchise or selling agreement or |
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| intends not to
extend or renew a franchise or selling |
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| agreement on its expiration, it shall
send a letter by |
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| certified mail, return
receipt requested, to the |
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| affected
franchisee at least
60 days before the |
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| effective date of the
proposed action, or not later |
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| than 10 days before the proposed action when the
reason |
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| for the action is based upon either of the following:
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| (i) the
business operations of the franchisee |
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| have been abandoned or
the franchisee has failed to |
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| conduct customary sales and service operations
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| during customary business hours for at least 7
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| consecutive business
days unless such closing is |
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| due to an act of God, strike or labor
difficulty or |
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| other cause over which the franchisee has no |
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| control; or
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| (ii) the conviction of or plea of nolo
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| contendere by the motor
vehicle dealer or any |
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| operator thereof in a court of competent |
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| jurisdiction
to an offense punishable by |
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| imprisonment for more than two years.
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| Each notice of proposed action shall include a |
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| detailed statement
setting forth the specific grounds |
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| for the proposed cancellation, termination,
or refusal |
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| to extend or renew and shall state that the dealer has
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| only 30 days from receipt of
the notice to file with |
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| the Motor Vehicle Review Board a written protest
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| against the proposed action.
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| (B) If a manufacturer, distributor, wholesaler, |
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| distributor branch or
division, factory branch or |
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| division or wholesale branch or division intends
to |
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| change substantially or modify the sales and service |
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| obligations or
capital requirements of a motor vehicle |
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| dealer as a condition to extending
or renewing the |
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| existing franchise or selling agreement of such motor
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| vehicle dealer, it shall
send a letter by certified |
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| mail, return receipt requested, to the affected
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| franchisee at
least 60
days
before the date of |
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| expiration of the franchise or selling agreement. Each
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| notice of proposed action shall include a detailed |
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| statement setting forth
the specific grounds for the |
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| proposed action
and shall state that the dealer has |
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| only 30 days from receipt of
the notice to file with |
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| the Motor Vehicle Review Board a written protest
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| against the proposed action.
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LRB094 05242 RXD 44434 a |
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| (C) Within 30 days from receipt of the notice under
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| subparagraphs (A) and (B),
the franchisee may file with |
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| the Board a written
protest against the proposed |
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| action.
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| When the protest has been timely filed, the Board |
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| shall enter an
order,
fixing a date (within 60 days of |
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| the date of the order), time,
and place of a hearing on |
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| the protest required under Sections 12 and 29
of this |
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| Act, and send by certified mail, return receipt |
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| requested, a copy of
the order to the manufacturer that |
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| filed the notice of intention of the
proposed action |
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| and to the protesting dealer or franchisee.
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| The manufacturer shall have the burden of proof to |
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| establish that good
cause exists to cancel or |
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| terminate, or fail to extend or renew the franchise
or
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| selling agreement of a motor vehicle dealer or |
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| franchisee, and to change
substantially or modify the |
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| sales and service obligations or capital
requirements |
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| of a motor vehicle dealer as a condition to extending |
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| or renewing
the existing franchise or selling |
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| agreement. The determination whether good
cause exists |
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| to cancel, terminate, or refuse to renew or extend the |
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| franchise
or selling agreement, or to change or modify |
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| the obligations of the dealer as a
condition to offer |
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| renewal, replacement, or succession shall be made
by |
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| the Board under subsection (d) of Section 12 of this |
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| Act.
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| (D) Notwithstanding the terms, conditions, or |
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| provisions of a
franchise
or selling agreement, the |
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| following shall not constitute good cause for
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| cancelling or terminating or failing to extend or renew |
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| the franchise or
selling agreement: (i) the change of |
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| ownership or executive management of the
franchisee's |
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| dealership; or (ii)
the
fact that the franchisee or |
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| owner of an interest in the franchise owns, has
an |
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| investment in, participates in the management of, or |
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| holds a license for
the sale of the same or any other |
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| line make of new motor vehicles.
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| Good cause shall exist to cancel, terminate or fail |
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| to offer a
renewal or replacement franchise or selling |
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| agreement to all franchisees of
a line make if the |
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| manufacturer permanently discontinues the manufacture |
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| or
assembly of motor vehicles of such line make.
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| (E) The manufacturer may not cancel or terminate, |
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| or fail to extend or
renew a franchise or selling |
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| agreement or change or modify the obligations of
the |
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| franchisee as a condition to offering a renewal, |
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| replacement, or succeeding
franchise or selling |
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| agreement before the hearing process is concluded as
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| prescribed by this Act, and thereafter, if the Board |
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| determines that the
manufacturer has failed to meet its |
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| burden of proof and that good cause does
not exist to |
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| allow the proposed action; or
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| (7) notwithstanding the terms of any franchise |
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| agreement, to fail to
indemnify and hold harmless its |
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| franchised dealers against any judgment
or settlement for |
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| damages, including, but not limited to, court costs, expert
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| witness fees, reasonable attorneys' fees of the new motor |
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| vehicle
dealer, and other expenses incurred in the |
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| litigation, so long as such fees
and costs are reasonable,
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| arising out
of complaints, claims or lawsuits including, |
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| but not limited to, strict
liability, negligence, |
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| misrepresentation, warranty (express or implied),
or |
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| recision of the sale as defined in Section 2-608 of the |
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| Uniform Commercial
Code, to the extent that the judgment or |
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| settlement relates to the alleged
defective or negligent |
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| manufacture, assembly or design of new motor vehicles,
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| parts or accessories or other functions by the |
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LRB094 05242 RXD 44434 a |
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| manufacturer, beyond the
control of the dealer; provided |
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| that, in order to provide an adequate
defense, the |
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| manufacturer receives notice of the filing of a complaint, |
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| claim,
or lawsuit within 60 days after the filing.
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| (e) It shall be deemed a violation for a manufacturer, a |
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| distributor,
a wholesaler, a distributor branch or division or |
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| officer, agent or other
representative thereof:
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| (1) to resort to or use any false or misleading |
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| advertisement in
connection with his business as such |
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| manufacturer, distributor, wholesaler,
distributor branch |
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| or division or officer, agent or other representative
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| thereof;
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| (2) to offer to sell or lease, or to sell or lease, any |
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| new motor vehicle
to any motor vehicle dealer at a lower |
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| actual price therefor than the actual
price offered to any |
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| other motor vehicle dealer for the same model vehicle
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| similarly equipped or to utilize any device including, but |
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| not limited to,
sales promotion plans or programs which |
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| result in such lesser actual
price or fail to make |
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| available to any motor vehicle dealer any
preferential |
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| pricing, incentive, rebate, finance rate, or low interest |
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| loan
program offered to competing motor vehicle dealers in |
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| other contiguous states.
However, the provisions of this |
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| paragraph shall not apply to sales
to a motor vehicle |
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| dealer for resale to any unit of the United States
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| Government, the State or any of its political subdivisions;
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| (3) to offer to sell or lease, or to sell or lease, any |
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| new motor vehicle
to any person, except a wholesaler, |
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| distributor or manufacturer's employees
at a lower actual |
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| price therefor than the actual price offered and charged
to |
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| a motor vehicle dealer for the same model vehicle similarly |
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| equipped or
to utilize any device which results in such |
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| lesser actual price. However,
the provisions of this |
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| paragraph shall not apply to sales to a motor
vehicle |
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09400HB2991ham001 |
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LRB094 05242 RXD 44434 a |
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| dealer for resale to any unit of the United States |
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| Government, the
State or any of its political subdivisions;
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| (4) to prevent or attempt to prevent by contract or |
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| otherwise any motor
vehicle dealer or franchisee from |
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| changing the executive management control
of the motor
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| vehicle dealer or franchisee unless the franchiser, having |
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| the burden of
proof, proves that such change of executive |
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| management will result in executive
management control by a |
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| person or persons who are not of good moral character
or |
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| who do not meet the franchiser's existing and, with |
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| consideration given
to the volume of sales and service of |
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| the dealership, uniformly applied
minimum business |
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| experience standards in the market area. However where
the |
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| manufacturer rejects a proposed change in executive |
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| management
control, the manufacturer shall give written |
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| notice of his reasons to the
dealer within 60 days of |
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| notice to the manufacturer by the dealer of
the proposed |
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| change. If the manufacturer does not send a letter to the
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| franchisee by certified mail, return receipt requested, |
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| within 60 days from
receipt by
the manufacturer of the |
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| proposed change, then the change of the
executive |
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| management control of the franchisee shall be deemed
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| accepted as proposed by the franchisee, and the |
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| manufacturer shall give
immediate
effect to such change;
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| (5) to prevent or attempt to prevent by contract or |
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| otherwise any motor
vehicle dealer from establishing or |
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| changing the capital structure of his
dealership or the |
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| means by or through which he finances the operation |
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| thereof;
provided the dealer meets any reasonable capital |
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| standards agreed to between
the dealer and the |
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| manufacturer, distributor or wholesaler, who may require
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| that the sources, method and manner by which the dealer |
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| finances or intends
to finance its operation, equipment or |
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| facilities be fully disclosed;
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LRB094 05242 RXD 44434 a |
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| (6) to refuse to give effect to or prevent or attempt |
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| to prevent by
contract or otherwise any motor vehicle |
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| dealer or any officer, partner or
stockholder of any motor |
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| vehicle dealer from selling or transferring any
part of the |
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| interest of any of them to any other person or persons or |
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| party
or parties unless such sale or transfer is to a |
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| transferee who would
not otherwise qualify for a new motor |
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| vehicle dealers license under "The
Illinois Vehicle Code" |
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| or unless the franchiser, having the burden of proof,
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| proves that such sale or transfer is to a person or party |
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| who is not of
good moral character or does not meet the |
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| franchiser's existing and reasonable
capital standards |
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| and, with consideration given to the volume of sales and
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| service of the dealership, uniformly applied minimum |
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| business experience
standards in the market area.
However, |
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| nothing herein shall be construed to prevent a
franchiser |
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| from implementing affirmative action programs providing |
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| business
opportunities for minorities or from complying |
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| with applicable federal,
State or local law:
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| (A) If the manufacturer intends to refuse to |
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| approve the sale or
transfer of all or a part of the |
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| interest, then it shall, within 60 days from
receipt of |
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| the completed application forms generally utilized by |
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| a manufacturer
to conduct its review and a copy of all |
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| agreements regarding the proposed
transfer, send a |
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| letter by certified mail, return receipt requested, |
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| advising
the franchisee of any refusal to approve the |
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| sale or transfer of all or part of
the interest
and |
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| shall state that the dealer only has 30 days from the |
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| receipt of the
notice to file with the Motor Vehicle |
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| Review Board a written protest against
the proposed |
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| action.
The
notice shall set forth specific criteria |
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| used to evaluate the prospective
transferee and the |
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| grounds for refusing to approve the sale or transfer to
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LRB094 05242 RXD 44434 a |
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| that transferee. Within 30 days from the franchisee's |
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| receipt of the
manufacturer's notice, the
franchisee |
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| may file
with the Board a written protest against the |
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| proposed action.
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| When a protest has been timely filed, the Board |
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| shall enter an
order, fixing the date (within 60 days |
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| of the date of such
order), time, and place of a |
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| hearing on the protest, required under
Sections 12 and |
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| 29 of this Act, and send by certified mail, return |
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| receipt
requested, a copy of the order to the |
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| manufacturer that filed notice of
intention of the |
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| proposed action and to the protesting franchisee.
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| The manufacturer shall have the burden of proof to |
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| establish that good
cause exists to refuse to approve |
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| the sale or transfer to the transferee. The
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| determination whether good cause exists to refuse to |
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| approve the sale or
transfer shall be made by the Board |
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| under subdivisions (6)(B).
The manufacturer shall not |
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| refuse to approve the sale or transfer
by
a dealer or |
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| an officer, partner, or stockholder of a franchise or |
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| any part
of the interest to any person or persons |
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| before the hearing process is
concluded as prescribed |
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| by this Act, and thereafter if the Board determines
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| that the manufacturer has failed to meet its burden of |
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| proof and that good
cause does not exist to refuse to |
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| approve the sale or transfer to the
transferee.
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| (B) Good cause to refuse to approve such sale or |
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| transfer under this
Section is established when such |
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| sale or transfer is to a transferee who would
not |
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| otherwise qualify for a new motor vehicle dealers |
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| license under "The
Illinois Vehicle Code" or such sale |
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| or transfer is to a person or party who is
not of good |
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| moral character or does not meet the franchiser's |
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| existing and
reasonable capital standards and, with |
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| consideration given to the volume of
sales and service |
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| of the dealership, uniformly applied minimum business
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| experience standards in the market area.
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| (7) to obtain money, goods, services, anything of |
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| value, or any other
benefit from any other person with whom |
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| the motor vehicle dealer does business,
on account of or in |
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| relation to the transactions between the dealer and
the |
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| other person as compensation, except for services actually |
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| rendered,
unless such benefit is promptly accounted for and |
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| transmitted to the motor
vehicle dealer;
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| (8) to grant an additional franchise in the relevant |
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| market area of an
existing franchise of the same line make |
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| or to relocate an existing motor
vehicle dealership within |
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| or into a relevant market area of an existing
franchise of |
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| the same line make.
However, if the manufacturer wishes to
|
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| grant such an additional franchise to an independent person |
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| in a bona fide
relationship in which such person is |
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| prepared to make a significant
investment subject to loss |
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| in such a dealership, or if the manufacturer
wishes to |
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| relocate an existing motor vehicle dealership, then the
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| manufacturer shall send a letter
by certified mail, return |
22 |
| receipt requested, to each existing dealer or dealers
of |
23 |
| the same line make whose relevant
market area includes the |
24 |
| proposed location of the additional or relocated
franchise |
25 |
| at least
60 days before the manufacturer grants an |
26 |
| additional franchise or relocates an
existing franchise of |
27 |
| the same line make within or into the relevant market
area |
28 |
| of an existing
franchisee of the same line make. Each |
29 |
| notice shall set forth the specific
grounds for the |
30 |
| proposed grant of an additional or relocation of an |
31 |
| existing
franchise. Unless the parties agree upon the grant |
32 |
| or establishment of the
additional or relocated franchise |
33 |
| within 30 days from the date the
notice was
received by the |
34 |
| existing franchisee of the same line make or any person
|
|
|
|
09400HB2991ham001 |
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LRB094 05242 RXD 44434 a |
|
|
1 |
| entitled to receive such notice, the franchisee or other |
2 |
| person may file
with the Board a written protest against |
3 |
| the grant or establishment of the
proposed additional or |
4 |
| relocated franchise
and shall state that the dealer only |
5 |
| has 30 days from the receipt of the
notice to file with
the |
6 |
| Motor Vehicle Review Board a written protest against the |
7 |
| proposed action.
|
8 |
| When a protest has been timely filed, the Board shall |
9 |
| enter an order
fixing a date (within 60 days of the date of |
10 |
| the order), time,
and place of a hearing on the protest, |
11 |
| required under Sections 12 and 29
of this Act, and send by |
12 |
| certified or registered mail, return receipt
requested, a |
13 |
| copy of the order to the manufacturer that filed the notice |
14 |
| of
intention to grant or establish the proposed additional |
15 |
| or relocated
franchise and to the protesting dealer or |
16 |
| dealers of the same line make
whose
relevant market area |
17 |
| includes the proposed location of the additional or
|
18 |
| relocated franchise.
|
19 |
| When more than one protest is filed against the grant |
20 |
| or establishment of
the
additional or relocated franchise |
21 |
| of the same line make, the Board may
consolidate the |
22 |
| hearings to expedite disposition of the matter. The
|
23 |
| manufacturer shall have the burden of proof to establish |
24 |
| that good cause
exists to allow the grant or establishment |
25 |
| of the additional or relocated
franchise. The manufacturer |
26 |
| may not grant or establish the additional
franchise or |
27 |
| relocate the existing franchise before the hearing process |
28 |
| is
concluded as prescribed by this Act, and thereafter if |
29 |
| the Board determines
that the manufacturer has failed to |
30 |
| meet its burden of proof and that good
cause does not exist |
31 |
| to allow the grant or establishment of the additional
|
32 |
| franchise or relocation of the existing franchise.
|
33 |
| The determination whether good cause exists for |
34 |
| allowing the grant or
establishment of an additional |
|
|
|
09400HB2991ham001 |
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LRB094 05242 RXD 44434 a |
|
|
1 |
| franchise or relocated existing franchise,
shall be made by |
2 |
| the Board under subsection (c) of Section 12 of this Act.
|
3 |
| If the manufacturer seeks to enter
into a contract, |
4 |
| agreement or other arrangement with any person,
|
5 |
| establishing any additional motor vehicle dealership or |
6 |
| other facility,
limited to the sale of factory repurchase |
7 |
| vehicles or late model vehicles,
then the manufacturer |
8 |
| shall follow the notice procedures set forth in this
|
9 |
| Section and the
determination whether good cause exists for |
10 |
| allowing the proposed agreement
shall be made by the Board |
11 |
| under subsection (c) of Section 12, with the
manufacturer |
12 |
| having
the burden of proof.
|
13 |
| A. (Blank).
|
14 |
| B. For the purposes of this Section, appointment of |
15 |
| a successor motor
vehicle dealer at the same location |
16 |
| as its predecessor, or within
2 miles
of such location,
|
17 |
| or the relocation of an existing dealer or franchise |
18 |
| within
2 miles of
the relocating dealer's or |
19 |
| franchisee's existing location,
shall not be construed |
20 |
| as a grant, establishment or the
entering into of an |
21 |
| additional franchise or selling agreement, or a
|
22 |
| relocation of an existing franchise. The reopening
of a |
23 |
| motor vehicle dealership that has not been in operation |
24 |
| for 18 months
or more shall be deemed the grant of an |
25 |
| additional franchise or selling
agreement.
|
26 |
| C. This Section does not apply to the relocation of |
27 |
| an existing
dealership or franchise in a county having |
28 |
| a population of more than
300,000 persons when the new |
29 |
| location is within the dealer's current
relevant |
30 |
| market area, provided the new location is more than 7 |
31 |
| miles from
the nearest dealer of the same line make. |
32 |
| This Section does not apply to
the relocation of an |
33 |
| existing dealership or franchise in a county having a
|
34 |
| population of less than 300,000 persons when the new |
|
|
|
09400HB2991ham001 |
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LRB094 05242 RXD 44434 a |
|
|
1 |
| location is within the
dealer's current relevant |
2 |
| market area, provided the new location is more
than
12 |
3 |
| miles from the nearest dealer of the same line make. |
4 |
| This Section does not apply to the relocation of an |
5 |
| existing dealership or franchise in any county having a |
6 |
| population of less than 35,000 persons when the new |
7 |
| location is moving less than 3 miles from the nearest |
8 |
| dealer of the same line make. A dealer that would be |
9 |
| farther away
from the new location of an existing |
10 |
| dealership or
franchise of the same line make after a |
11 |
| relocation may not
file a written protest against the |
12 |
| relocation with the
Motor Vehicle Review Board.
|
13 |
| D. Nothing in this Section shall be construed to |
14 |
| prevent a
franchiser from implementing affirmative |
15 |
| action programs providing business
opportunities for |
16 |
| minorities or from complying with applicable federal,
|
17 |
| State or local law;
|
18 |
| (9) to require a motor vehicle dealer to assent to a |
19 |
| release, assignment,
novation, waiver or estoppel which |
20 |
| would relieve any person from liability
imposed by this |
21 |
| Act;
|
22 |
| (10) to prevent or refuse to give effect to the |
23 |
| succession to the
ownership or management control of a |
24 |
| dealership by any legatee under the
will of a dealer or to |
25 |
| an heir under the laws of descent and distribution
of this |
26 |
| State unless the franchisee has designated a successor to |
27 |
| the ownership
or management control under the succession |
28 |
| provisions of the franchise.
Unless the
franchiser, having |
29 |
| the burden of proof, proves that the successor
is a person |
30 |
| who is not of good moral character or does not meet the
|
31 |
| franchiser's existing and reasonable capital standards |
32 |
| and, with consideration
given to the volume of sales and |
33 |
| service of the dealership, uniformly applied
minimum |
34 |
| business experience standards in the market area, any |
|
|
|
09400HB2991ham001 |
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LRB094 05242 RXD 44434 a |
|
|
1 |
| designated
successor of a dealer or franchisee may succeed |
2 |
| to the ownership or management
control of a dealership |
3 |
| under the existing franchise if:
|
4 |
| (i) The designated successor gives the |
5 |
| franchiser written notice by
certified mail, |
6 |
| return receipt requested, of his or her intention |
7 |
| to succeed to
the ownership of the dealer within 60 |
8 |
| days of the dealer's death or incapacity;
and
|
9 |
| (ii) The designated successor agrees to be |
10 |
| bound by all the terms
and
conditions of the |
11 |
| existing franchise.
|
12 |
| Notwithstanding the foregoing, in the event the motor |
13 |
| vehicle dealer or
franchisee and manufacturer have duly |
14 |
| executed an agreement concerning
succession rights prior |
15 |
| to the dealer's death or incapacitation, the agreement
|
16 |
| shall be observed.
|
17 |
| (A) If the franchiser intends to refuse to honor |
18 |
| the successor to the
ownership of a deceased or |
19 |
| incapacitated dealer or franchisee under an
existing |
20 |
| franchise agreement, the franchiser shall send a |
21 |
| letter by certified
mail, return receipt requested, to |
22 |
| the
designated successor within
60 days
from receipt of |
23 |
| a proposal advising of its intent to refuse to honor |
24 |
| the
succession and to discontinue the existing |
25 |
| franchise agreement
and shall state that the |
26 |
| designated successor only has 30 days from the
receipt |
27 |
| of the notice to file with the Motor Vehicle Review |
28 |
| Board a written
protest against the proposed action.
|
29 |
| The notice shall set forth the
specific grounds for the |
30 |
| refusal to honor the succession and discontinue the
|
31 |
| existing franchise agreement.
|
32 |
| If notice of refusal is not timely served upon the |
33 |
| designated
successor,
the franchise agreement shall |
34 |
| continue in effect subject to termination only as
|
|
|
|
09400HB2991ham001 |
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LRB094 05242 RXD 44434 a |
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|
1 |
| otherwise permitted by paragraph (6) of subsection (d) |
2 |
| of Section 4 of this
Act.
|
3 |
| Within 30 days from the date the notice was |
4 |
| received by the
designated
successor or any other |
5 |
| person entitled to notice, the designee or other
person |
6 |
| may file with the Board a written protest against the |
7 |
| proposed action.
|
8 |
| When a protest has been timely filed, the Board |
9 |
| shall enter an
order,
fixing a date (within 60 days of |
10 |
| the date of the order), time,
and place of a hearing on |
11 |
| the protest, required under Sections 12 and 29
of this |
12 |
| Act, and send by certified mail, return receipt |
13 |
| requested, a copy of
the order to the franchiser that |
14 |
| filed the notice of intention of the
proposed action |
15 |
| and to the protesting designee or such other person.
|
16 |
| The manufacturer shall have the burden of proof to |
17 |
| establish that good
cause exists to refuse to honor the |
18 |
| succession and discontinue the existing
franchise |
19 |
| agreement. The determination whether good cause exists |
20 |
| to refuse to
honor the succession shall be made by the |
21 |
| Board under subdivision (B) of this
paragraph (10). The |
22 |
| manufacturer shall not refuse to honor the succession |
23 |
| or
discontinue the existing franchise agreement before |
24 |
| the hearing process is
concluded as prescribed by this |
25 |
| Act, and thereafter if the Board determines
that it has |
26 |
| failed to meet its burden of proof and that good cause |
27 |
| does not
exist to refuse to honor the succession and |
28 |
| discontinue the existing
franchise agreement.
|
29 |
| (B) No manufacturer shall impose any conditions |
30 |
| upon honoring the
succession and continuing the |
31 |
| existing franchise agreement with the designated
|
32 |
| successor other than that the franchisee has |
33 |
| designated a successor to the
ownership or management |
34 |
| control under the succession provisions of the
|
|
|
|
09400HB2991ham001 |
- 18 - |
LRB094 05242 RXD 44434 a |
|
|
1 |
| franchise, or that the designated successor is of good |
2 |
| moral character or meets
the reasonable capital |
3 |
| standards and, with consideration given to the volume |
4 |
| of
sales and service of the dealership, uniformly |
5 |
| applied minimum business
experience standards in the |
6 |
| market area;
|
7 |
| (11) to prevent or refuse to approve a proposal to |
8 |
| establish a successor
franchise at a location previously |
9 |
| approved by the franchiser when submitted
with the |
10 |
| voluntary termination by the existing franchisee unless |
11 |
| the successor
franchisee would not otherwise qualify for a |
12 |
| new motor vehicle dealer's
license under the Illinois |
13 |
| Vehicle Code or unless the franchiser, having
the burden of |
14 |
| proof, proves that such proposed successor is not of good
|
15 |
| moral character or does not meet the franchiser's existing |
16 |
| and reasonable
capital standards and, with consideration |
17 |
| given to the volume of sales and
service of the dealership, |
18 |
| uniformly applied minimum business experience
standards in |
19 |
| the market area. However, when such a rejection
of a |
20 |
| proposal is made, the manufacturer shall give written |
21 |
| notice of its
reasons to the franchisee within 60 days of |
22 |
| receipt by the manufacturer
of the proposal. However, |
23 |
| nothing herein shall be construed
to prevent a franchiser |
24 |
| from implementing affirmative action programs providing
|
25 |
| business opportunities for minorities, or from complying |
26 |
| with applicable
federal, State or local law;
|
27 |
| (12) to prevent or refuse to grant a franchise to a |
28 |
| person because such
person owns, has investment in or |
29 |
| participates in the management of or holds
a franchise for |
30 |
| the sale of another make or line of motor vehicles within
7 |
31 |
| miles of the proposed franchise location in a county having |
32 |
| a population
of more than 300,000 persons, or within 10
12 |
33 |
| miles of the proposed franchise
location in a county having |
34 |
| a population of less than 300,000
persons; or
|
|
|
|
09400HB2991ham001 |
- 19 - |
LRB094 05242 RXD 44434 a |
|
|
1 |
| (13) to prevent or attempt to prevent any new motor |
2 |
| vehicle dealer
from establishing any additional motor |
3 |
| vehicle dealership or other facility
limited to the sale of |
4 |
| factory repurchase vehicles or late model vehicles
or |
5 |
| otherwise offering for sale factory repurchase vehicles of |
6 |
| the same line
make at an existing franchise by failing to |
7 |
| make
available any contract, agreement or other |
8 |
| arrangement which is made
available or otherwise offered to |
9 |
| any person.
|
10 |
| (f) It is deemed a violation for a manufacturer, a |
11 |
| distributor, a
wholesale,
a distributor
branch or division, a |
12 |
| factory branch or division, or a wholesale branch or
division, |
13 |
| or
officer, agent, broker, shareholder, except a shareholder of |
14 |
| 1% or less of the
outstanding
shares of any class of securities |
15 |
| of a manufacturer, distributor, or wholesaler
which is a
|
16 |
| publicly traded corporation, or other representative, directly |
17 |
| or indirectly,
to own or
operate a place of business as a motor |
18 |
| vehicle franchisee or motor vehicle
financing
affiliate, |
19 |
| except that, this subsection shall not prohibit the ownership |
20 |
| or
operation of a
place of business by a manufacturer, |
21 |
| distributor, or wholesaler for a period,
not to exceed
18 |
22 |
| months, during the transition from one motor vehicle franchisee |
23 |
| to another;
or the
investment in a motor vehicle franchisee by |
24 |
| a manufacturer, distributor, or
wholesaler if
the investment is |
25 |
| for the sole purpose of enabling a partner or shareholder in
|
26 |
| that motor
vehicle franchisee to acquire an interest in that |
27 |
| motor vehicle franchisee and
that partner
or shareholder is not |
28 |
| otherwise employed by or associated with the
manufacturer,
|
29 |
| distributor, or wholesaler and would not otherwise have the |
30 |
| requisite capital
investment
funds to invest in the motor |
31 |
| vehicle franchisee, and has the right to purchase
the entire
|
32 |
| equity interest of the manufacturer, distributor, or |
33 |
| wholesaler in the motor
vehicle
franchisee within a reasonable |
34 |
| period of time not to exceed 5 years.
|