102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
HB5395

 

Introduced 1/31/2022___________, by

 

SYNOPSIS AS INTRODUCED:
 
815 ILCS 710/4  from Ch. 121 1/2, par. 754

    Amends the Motor Vehicle Franchise Act. Provides that, if a manufacturer exercises a right of first refusal in order to terminate a dealership that paid at least 10% of the local retailers' occupation tax imposed by the municipality or county where the terminated dealership is located during the calendar year immediately prior to the termination, then, for a period of 20 consecutive years after the dealership is terminated, the manufacturer must pay to the municipality or county in which the terminated dealership was located an amount equal to the certified local retailers' occupation tax amount. Provides that the certified local retailers' occupation tax amount is the highest amount paid by the dealership in any of the 5 years immediately prior to the year in which the dealership was terminated. Effective immediately.


LRB102 25907 HLH 35500 b

 

 

A BILL FOR

 

HB5395LRB102 25907 HLH 35500 b

1    AN ACT concerning business.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Motor Vehicle Franchise Act is amended by
5changing Section 4 as follows:
 
6    (815 ILCS 710/4)  (from Ch. 121 1/2, par. 754)
7    Sec. 4. Unfair competition and practices.
8    (a) The unfair methods of competition and unfair and
9deceptive acts or practices listed in this Section are hereby
10declared to be unlawful. In construing the provisions of this
11Section, the courts may be guided by the interpretations of
12the Federal Trade Commission Act (15 U.S.C. 45 et seq.), as
13from time to time amended.
14    (b) It shall be deemed a violation for any manufacturer,
15factory branch, factory representative, distributor or
16wholesaler, distributor branch, distributor representative or
17motor vehicle dealer to engage in any action with respect to a
18franchise which is arbitrary, in bad faith or unconscionable
19and which causes damage to any of the parties or to the public.
20    (c) It shall be deemed a violation for a manufacturer, a
21distributor, a wholesaler, a distributor branch or division, a
22factory branch or division, or a wholesale branch or division,
23or officer, agent or other representative thereof, to coerce,

 

 

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1or attempt to coerce, any motor vehicle dealer:
2        (1) to accept, buy or order any motor vehicle or
3    vehicles, appliances, equipment, parts or accessories
4    therefor, or any other commodity or commodities or service
5    or services which such motor vehicle dealer has not
6    voluntarily ordered or requested except items required by
7    applicable local, state or federal law; or to require a
8    motor vehicle dealer to accept, buy, order or purchase
9    such items in order to obtain any motor vehicle or
10    vehicles or any other commodity or commodities which have
11    been ordered or requested by such motor vehicle dealer;
12        (2) to order or accept delivery of any motor vehicle
13    with special features, appliances, accessories or
14    equipment not included in the list price of the motor
15    vehicles as publicly advertised by the manufacturer
16    thereof, except items required by applicable law; or
17        (3) to order for anyone any parts, accessories,
18    equipment, machinery, tools, appliances or any commodity
19    whatsoever, except items required by applicable law.
20    (c-5) A manufacturer, a distributor, a wholesaler, a
21distributor branch or division, a factory branch or division,
22or a wholesale branch or division, or officer, agent, or other
23representative thereof may not:
24        (1) require a motor vehicle dealer to offer a
25    secondary product; or
26        

 

 

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1        (2) prohibit a motor vehicle dealer from offering a
2    secondary product, including, but not limited to:
3            (A) service contracts;
4            (B) maintenance agreements;
5            (C) extended warranties;
6            (D) protection product guarantees;
7            (E) guaranteed asset protection waivers;
8            (F) insurance;
9            (G) replacement parts;
10            (H) vehicle accessories;
11            (I) oil; or
12            (J) supplies.
13    It is not a violation of this subsection to offer an
14incentive program to motor vehicle dealers to encourage them
15to sell or offer to sell a secondary product approved,
16endorsed, sponsored, or offered by the manufacturer,
17distributor, wholesaler, distributor branch or division,
18factory branch or division, wholesale branch or division, or
19officer, agent, or other representative thereof, provided the
20program does not provide vehicle sales or service incentives.
21    It is not a violation of this subsection to prohibit a
22motor vehicle dealer from using secondary products for any
23repair work paid for under the terms of a warranty, recall,
24service contract, extended warranty, maintenance plan, or
25certified pre-owned vehicle program established or offered by
26the manufacturer, distributor, wholesaler, distributor branch

 

 

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1or division, factory branch or division, or wholesale branch
2or division, or officer, agent, or other representative
3thereof.
4    As used in this subsection, "secondary product" means all
5products that are not new motor vehicles or original equipment
6manufacturer parts.
7    (d) It shall be deemed a violation for a manufacturer, a
8distributor, a wholesaler, a distributor branch or division,
9or officer, agent or other representative thereof:
10        (1) to adopt, change, establish or implement a plan or
11    system for the allocation and distribution of new motor
12    vehicles to motor vehicle dealers which is arbitrary or
13    capricious or to modify an existing plan so as to cause the
14    same to be arbitrary or capricious;
15        (2) to fail or refuse to advise or disclose to any
16    motor vehicle dealer having a franchise or selling
17    agreement, upon written request therefor, the basis upon
18    which new motor vehicles of the same line make are
19    allocated or distributed to motor vehicle dealers in the
20    State and the basis upon which the current allocation or
21    distribution is being made or will be made to such motor
22    vehicle dealer;
23        (3) to refuse to deliver in reasonable quantities and
24    within a reasonable time after receipt of dealer's order,
25    to any motor vehicle dealer having a franchise or selling
26    agreement for the retail sale of new motor vehicles sold

 

 

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1    or distributed by such manufacturer, distributor,
2    wholesaler, distributor branch or division, factory branch
3    or division or wholesale branch or division, any such
4    motor vehicles as are covered by such franchise or selling
5    agreement specifically publicly advertised in the State by
6    such manufacturer, distributor, wholesaler, distributor
7    branch or division, factory branch or division, or
8    wholesale branch or division to be available for immediate
9    delivery. However, the failure to deliver any motor
10    vehicle shall not be considered a violation of this Act if
11    such failure is due to an act of God, a work stoppage or
12    delay due to a strike or labor difficulty, a shortage of
13    materials, a lack of manufacturing capacity, a freight
14    embargo or other cause over which the manufacturer,
15    distributor, or wholesaler, or any agent thereof has no
16    control;
17        (4) to coerce, or attempt to coerce, any motor vehicle
18    dealer to enter into any agreement with such manufacturer,
19    distributor, wholesaler, distributor branch or division,
20    factory branch or division, or wholesale branch or
21    division, or officer, agent or other representative
22    thereof, or to do any other act prejudicial to the dealer
23    by threatening to reduce his allocation of motor vehicles
24    or cancel any franchise or any selling agreement existing
25    between such manufacturer, distributor, wholesaler,
26    distributor branch or division, or factory branch or

 

 

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1    division, or wholesale branch or division, and the dealer.
2    However, notice in good faith to any motor vehicle dealer
3    of the dealer's violation of any terms or provisions of
4    such franchise or selling agreement or of any law or
5    regulation applicable to the conduct of a motor vehicle
6    dealer shall not constitute a violation of this Act;
7        (5) to require a franchisee to participate in an
8    advertising campaign or contest or any promotional
9    campaign, or to purchase or lease any promotional
10    materials, training materials, show room or other display
11    decorations or materials at the expense of the franchisee;
12        (6) to cancel or terminate the franchise or selling
13    agreement of a motor vehicle dealer without good cause and
14    without giving notice as hereinafter provided; to fail or
15    refuse to extend the franchise or selling agreement of a
16    motor vehicle dealer upon its expiration without good
17    cause and without giving notice as hereinafter provided;
18    or, to offer a renewal, replacement or succeeding
19    franchise or selling agreement containing terms and
20    provisions the effect of which is to substantially change
21    or modify the sales and service obligations or capital
22    requirements of the motor vehicle dealer arbitrarily and
23    without good cause and without giving notice as
24    hereinafter provided notwithstanding any term or provision
25    of a franchise or selling agreement.
26            (A) If a manufacturer, distributor, wholesaler,

 

 

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1        distributor branch or division, factory branch or
2        division or wholesale branch or division intends to
3        cancel or terminate a franchise or selling agreement
4        or intends not to extend or renew a franchise or
5        selling agreement on its expiration, it shall send a
6        letter by certified mail, return receipt requested, to
7        the affected franchisee at least 60 days before the
8        effective date of the proposed action, or not later
9        than 10 days before the proposed action when the
10        reason for the action is based upon either of the
11        following:
12                (i) the business operations of the franchisee
13            have been abandoned or the franchisee has failed
14            to conduct customary sales and service operations
15            during customary business hours for at least 7
16            consecutive business days unless such closing is
17            due to an act of God, strike or labor difficulty or
18            other cause over which the franchisee has no
19            control; or
20                (ii) the conviction of or plea of nolo
21            contendere by the motor vehicle dealer or any
22            operator thereof in a court of competent
23            jurisdiction to an offense punishable by
24            imprisonment for more than two years.
25            Each notice of proposed action shall include a
26        detailed statement setting forth the specific grounds

 

 

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1        for the proposed cancellation, termination, or refusal
2        to extend or renew and shall state that the dealer has
3        only 30 days from receipt of the notice to file with
4        the Motor Vehicle Review Board a written protest
5        against the proposed action.
6            (B) If a manufacturer, distributor, wholesaler,
7        distributor branch or division, factory branch or
8        division or wholesale branch or division intends to
9        change substantially or modify the sales and service
10        obligations or capital requirements of a motor vehicle
11        dealer as a condition to extending or renewing the
12        existing franchise or selling agreement of such motor
13        vehicle dealer, it shall send a letter by certified
14        mail, return receipt requested, to the affected
15        franchisee at least 60 days before the date of
16        expiration of the franchise or selling agreement. Each
17        notice of proposed action shall include a detailed
18        statement setting forth the specific grounds for the
19        proposed action and shall state that the dealer has
20        only 30 days from receipt of the notice to file with
21        the Motor Vehicle Review Board a written protest
22        against the proposed action.
23            (C) Within 30 days from receipt of the notice
24        under subparagraphs (A) and (B), the franchisee may
25        file with the Board a written protest against the
26        proposed action.

 

 

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1            When the protest has been timely filed, the Board
2        shall enter an order, fixing a date (within 60 days of
3        the date of the order), time, and place of a hearing on
4        the protest required under Sections 12 and 29 of this
5        Act, and send by certified mail, return receipt
6        requested, a copy of the order to the manufacturer
7        that filed the notice of intention of the proposed
8        action and to the protesting dealer or franchisee.
9            The manufacturer shall have the burden of proof to
10        establish that good cause exists to cancel or
11        terminate, or fail to extend or renew the franchise or
12        selling agreement of a motor vehicle dealer or
13        franchisee, and to change substantially or modify the
14        sales and service obligations or capital requirements
15        of a motor vehicle dealer as a condition to extending
16        or renewing the existing franchise or selling
17        agreement. The determination whether good cause exists
18        to cancel, terminate, or refuse to renew or extend the
19        franchise or selling agreement, or to change or modify
20        the obligations of the dealer as a condition to offer
21        renewal, replacement, or succession shall be made by
22        the Board under subsection (d) of Section 12 of this
23        Act.
24            (D) Notwithstanding the terms, conditions, or
25        provisions of a franchise or selling agreement, the
26        following shall not constitute good cause for

 

 

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1        cancelling or terminating or failing to extend or
2        renew the franchise or selling agreement: (i) the
3        change of ownership or executive management of the
4        franchisee's dealership; or (ii) the fact that the
5        franchisee or owner of an interest in the franchise
6        owns, has an investment in, participates in the
7        management of, or holds a license for the sale of the
8        same or any other line make of new motor vehicles.
9            (E) The manufacturer may not cancel or terminate,
10        or fail to extend or renew a franchise or selling
11        agreement or change or modify the obligations of the
12        franchisee as a condition to offering a renewal,
13        replacement, or succeeding franchise or selling
14        agreement before the hearing process is concluded as
15        prescribed by this Act, and thereafter, if the Board
16        determines that the manufacturer has failed to meet
17        its burden of proof and that good cause does not exist
18        to allow the proposed action;
19        (7) notwithstanding the terms of any franchise
20    agreement, to fail to indemnify and hold harmless its
21    franchised dealers against any judgment or settlement for
22    damages, including, but not limited to, court costs,
23    expert witness fees, reasonable attorneys' fees of the new
24    motor vehicle dealer, and other expenses incurred in the
25    litigation, so long as such fees and costs are reasonable,
26    arising out of complaints, claims, or lawsuits, including,

 

 

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1    but not limited to, strict liability, negligence,
2    misrepresentation, warranty (express or implied), or
3    rescission of the sale as defined in Section 2-608 of the
4    Uniform Commercial Code, to the extent that the judgment
5    or settlement relates to the alleged defective or
6    negligent manufacture, assembly or design of new motor
7    vehicles, parts or accessories or other functions by the
8    manufacturer, beyond the control of the dealer; provided
9    that, in order to provide an adequate defense, the
10    manufacturer receives notice of the filing of a complaint,
11    claim, or lawsuit within 60 days after the filing;
12        (8) to require or otherwise coerce a motor vehicle
13    dealer to underutilize the motor vehicle dealer's
14    facilities by requiring or otherwise coercing the motor
15    vehicle dealer to exclude or remove from the motor vehicle
16    dealer's facilities operations for selling or servicing of
17    any vehicles for which the motor vehicle dealer has a
18    franchise agreement with another manufacturer,
19    distributor, wholesaler, distribution branch or division,
20    or officer, agent, or other representative thereof;
21    provided, however, that, in light of all existing
22    circumstances, (i) the motor vehicle dealer maintains a
23    reasonable line of credit for each make or line of new
24    motor vehicle, (ii) the new motor vehicle dealer remains
25    in compliance with any reasonable facilities requirements
26    of the manufacturer, (iii) no change is made in the

 

 

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1    principal management of the new motor vehicle dealer, and
2    (iv) the addition of the make or line of new motor vehicles
3    would be reasonable. The reasonable facilities requirement
4    set forth in item (ii) of subsection (d)(8) shall not
5    include any requirement that a franchisee establish or
6    maintain exclusive facilities, personnel, or display
7    space. Any decision by a motor vehicle dealer to sell
8    additional makes or lines at the motor vehicle dealer's
9    facility shall be presumed to be reasonable, and the
10    manufacturer shall have the burden to overcome that
11    presumption. A motor vehicle dealer must provide a written
12    notification of its intent to add a make or line of new
13    motor vehicles to the manufacturer. If the manufacturer
14    does not respond to the motor vehicle dealer, in writing,
15    objecting to the addition of the make or line within 60
16    days after the date that the motor vehicle dealer sends
17    the written notification, then the manufacturer shall be
18    deemed to have approved the addition of the make or line;
19        (9) to use or consider the performance of a motor
20    vehicle dealer relating to the sale of the manufacturer's,
21    distributor's, or wholesaler's vehicles or the motor
22    vehicle dealer's ability to satisfy any minimum sales or
23    market share quota or responsibility relating to the sale
24    of the manufacturer's, distributor's, or wholesaler's new
25    vehicles in determining:
26            (A) the motor vehicle dealer's eligibility to

 

 

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1        purchase program, certified, or other used motor
2        vehicles from the manufacturer, distributor, or
3        wholesaler;
4            (B) the volume, type, or model of program,
5        certified, or other used motor vehicles that a motor
6        vehicle dealer is eligible to purchase from the
7        manufacturer, distributor, or wholesaler;
8            (C) the price of any program, certified, or other
9        used motor vehicle that the dealer is eligible to
10        purchase from the manufacturer, distributor, or
11        wholesaler; or
12            (D) the availability or amount of any discount,
13        credit, rebate, or sales incentive that the dealer is
14        eligible to receive from the manufacturer,
15        distributor, or wholesaler for the purchase of any
16        program, certified, or other used motor vehicle
17        offered for sale by the manufacturer, distributor, or
18        wholesaler;
19        (10) to take any adverse action against a dealer
20    pursuant to an export or sale-for-resale prohibition
21    because the dealer sold or leased a vehicle to a customer
22    who either exported the vehicle to a foreign country or
23    resold the vehicle in violation of the prohibition, unless
24    the export or sale-for-resale prohibition policy was
25    provided to the dealer in writing either electronically or
26    on paper, prior to the sale or lease, and the dealer knew

 

 

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1    or reasonably should have known of the customer's intent
2    to export or resell the vehicle in violation of the
3    prohibition at the time of the sale or lease. If the dealer
4    causes the vehicle to be registered and titled in this or
5    any other state, and collects or causes to be collected
6    any applicable sales or use tax to this State, a
7    rebuttable presumption is established that the dealer did
8    not have reason to know of the customer's intent to resell
9    the vehicle;
10        (11) to coerce or require any dealer to construct
11    improvements to his or her facilities or to install new
12    signs or other franchiser image elements that replace or
13    substantially alter those improvements, signs, or
14    franchiser image elements completed within the past 10
15    years that were required and approved by the manufacturer
16    or one of its affiliates. The 10-year period under this
17    paragraph (11) begins to run for a dealer, including that
18    dealer's successors and assigns, on the date that the
19    manufacturer gives final written approval of the facility
20    improvements or installation of signs or other franchiser
21    image elements or the date that the dealer receives a
22    certificate of occupancy, whichever is later. For the
23    purpose of this paragraph (11), the term "substantially
24    alter" does not include routine maintenance, including,
25    but not limited to, interior painting, that is reasonably
26    necessary to keep a dealer facility in attractive

 

 

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1    condition; or
2        (12) to require a dealer to purchase goods or services
3    to make improvements to the dealer's facilities from a
4    vendor selected, identified, or designated by a
5    manufacturer or one of its affiliates by agreement,
6    program, incentive provision, or otherwise without making
7    available to the dealer the option to obtain the goods or
8    services of substantially similar quality and overall
9    design from a vendor chosen by the dealer and approved by
10    the manufacturer; however, approval by the manufacturer
11    shall not be unreasonably withheld, and the dealer's
12    option to select a vendor shall not be available if the
13    manufacturer provides substantial reimbursement for the
14    goods or services offered. "Substantial reimbursement"
15    means an amount equal to or greater than the cost savings
16    that would result if the dealer were to utilize a vendor of
17    the dealer's own selection instead of using the vendor
18    identified by the manufacturer. For the purpose of this
19    paragraph (12), the term "goods" does not include movable
20    displays, brochures, and promotional materials containing
21    material subject to the intellectual property rights of a
22    manufacturer. If signs, other than signs containing the
23    manufacturer's brand or logo or free-standing signs that
24    are not directly attached to a building, or other
25    franchiser image or design elements or trade dress are to
26    be leased to the dealer by a vendor selected, identified,

 

 

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1    or designated by the manufacturer, the dealer has the
2    right to purchase the signs or other franchiser image or
3    design elements or trade dress of substantially similar
4    quality and design from a vendor selected by the dealer if
5    the signs, franchiser image or design elements, or trade
6    dress are approved by the manufacturer. Approval by the
7    manufacturer shall not be unreasonably withheld. This
8    paragraph (12) shall not be construed to allow a dealer or
9    vendor to impair, infringe upon, or eliminate, directly or
10    indirectly, the intellectual property rights of the
11    manufacturer, including, but not limited to, the
12    manufacturer's intellectual property rights in any
13    trademarks or trade dress, or other intellectual property
14    interests owned or controlled by the manufacturer. This
15    paragraph (12) shall not be construed to permit a dealer
16    to erect or maintain signs that do not conform to the
17    manufacturer's intellectual property rights or trademark
18    or trade dress usage guidelines.
19    (e) It shall be deemed a violation for a manufacturer, a
20distributor, a wholesaler, a distributor branch or division or
21officer, agent or other representative thereof:
22        (1) to resort to or use any false or misleading
23    advertisement in connection with his business as such
24    manufacturer, distributor, wholesaler, distributor branch
25    or division or officer, agent or other representative
26    thereof;

 

 

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1        (2) to offer to sell or lease, or to sell or lease, any
2    new motor vehicle to any motor vehicle dealer at a lower
3    actual price therefor than the actual price offered to any
4    other motor vehicle dealer for the same model vehicle
5    similarly equipped or to utilize any device including, but
6    not limited to, sales promotion plans or programs which
7    result in such lesser actual price or fail to make
8    available to any motor vehicle dealer any preferential
9    pricing, incentive, rebate, finance rate, or low interest
10    loan program offered to competing motor vehicle dealers in
11    other contiguous states. However, the provisions of this
12    paragraph shall not apply to sales to a motor vehicle
13    dealer for resale to any unit of the United States
14    Government, the State or any of its political
15    subdivisions;
16        (3) to offer to sell or lease, or to sell or lease, any
17    new motor vehicle to any person, except a wholesaler,
18    distributor or manufacturer's employees at a lower actual
19    price therefor than the actual price offered and charged
20    to a motor vehicle dealer for the same model vehicle
21    similarly equipped or to utilize any device which results
22    in such lesser actual price. However, the provisions of
23    this paragraph shall not apply to sales to a motor vehicle
24    dealer for resale to any unit of the United States
25    Government, the State or any of its political
26    subdivisions;

 

 

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1        (4) to prevent or attempt to prevent by contract or
2    otherwise any motor vehicle dealer or franchisee from
3    changing the executive management control of the motor
4    vehicle dealer or franchisee unless the franchiser, having
5    the burden of proof, proves that such change of executive
6    management will result in executive management control by
7    a person or persons who are not of good moral character or
8    who do not meet the franchiser's existing and, with
9    consideration given to the volume of sales and service of
10    the dealership, uniformly applied minimum business
11    experience standards in the market area. However, where
12    the manufacturer rejects a proposed change in executive
13    management control, the manufacturer shall give written
14    notice of his reasons to the dealer within 60 days of
15    notice to the manufacturer by the dealer of the proposed
16    change. If the manufacturer does not send a letter to the
17    franchisee by certified mail, return receipt requested,
18    within 60 days from receipt by the manufacturer of the
19    proposed change, then the change of the executive
20    management control of the franchisee shall be deemed
21    accepted as proposed by the franchisee, and the
22    manufacturer shall give immediate effect to such change;
23        (5) to prevent or attempt to prevent by contract or
24    otherwise any motor vehicle dealer from establishing or
25    changing the capital structure of his dealership or the
26    means by or through which he finances the operation

 

 

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1    thereof; provided the dealer meets any reasonable capital
2    standards agreed to between the dealer and the
3    manufacturer, distributor or wholesaler, who may require
4    that the sources, method and manner by which the dealer
5    finances or intends to finance its operation, equipment or
6    facilities be fully disclosed;
7        (6) to refuse to give effect to or prevent or attempt
8    to prevent by contract or otherwise any motor vehicle
9    dealer or any officer, partner or stockholder of any motor
10    vehicle dealer from selling or transferring any part of
11    the interest of any of them to any other person or persons
12    or party or parties unless such sale or transfer is to a
13    transferee who would not otherwise qualify for a new motor
14    vehicle dealers license under the Illinois Vehicle Code or
15    unless the franchiser, having the burden of proof, proves
16    that such sale or transfer is to a person or party who is
17    not of good moral character or does not meet the
18    franchiser's existing and reasonable capital standards
19    and, with consideration given to the volume of sales and
20    service of the dealership, uniformly applied minimum
21    business experience standards in the market area. However,
22    nothing herein shall be construed to prevent a franchiser
23    from implementing affirmative action programs providing
24    business opportunities for minorities or from complying
25    with applicable federal, State or local law:
26            (A) If the manufacturer intends to refuse to

 

 

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1        approve the sale or transfer of all or a part of the
2        interest, then it shall, within 60 days from receipt
3        of the completed application forms generally utilized
4        by a manufacturer to conduct its review and a copy of
5        all agreements regarding the proposed transfer, send a
6        letter by certified mail, return receipt requested,
7        advising the franchisee of any refusal to approve the
8        sale or transfer of all or part of the interest and
9        shall state that the dealer only has 30 days from the
10        receipt of the notice to file with the Motor Vehicle
11        Review Board a written protest against the proposed
12        action. The notice shall set forth specific criteria
13        used to evaluate the prospective transferee and the
14        grounds for refusing to approve the sale or transfer
15        to that transferee. Within 30 days from the
16        franchisee's receipt of the manufacturer's notice, the
17        franchisee may file with the Board a written protest
18        against the proposed action.
19            When a protest has been timely filed, the Board
20        shall enter an order, fixing the date (within 60 days
21        of the date of such order), time, and place of a
22        hearing on the protest, required under Sections 12 and
23        29 of this Act, and send by certified mail, return
24        receipt requested, a copy of the order to the
25        manufacturer that filed notice of intention of the
26        proposed action and to the protesting franchisee.

 

 

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1            The manufacturer shall have the burden of proof to
2        establish that good cause exists to refuse to approve
3        the sale or transfer to the transferee. The
4        determination whether good cause exists to refuse to
5        approve the sale or transfer shall be made by the Board
6        under subdivisions (6)(B). The manufacturer shall not
7        refuse to approve the sale or transfer by a dealer or
8        an officer, partner, or stockholder of a franchise or
9        any part of the interest to any person or persons
10        before the hearing process is concluded as prescribed
11        by this Act, and thereafter if the Board determines
12        that the manufacturer has failed to meet its burden of
13        proof and that good cause does not exist to refuse to
14        approve the sale or transfer to the transferee.
15            (B) Good cause to refuse to approve such sale or
16        transfer under this Section is established when such
17        sale or transfer is to a transferee who would not
18        otherwise qualify for a new motor vehicle dealers
19        license under the Illinois Vehicle Code or such sale
20        or transfer is to a person or party who is not of good
21        moral character or does not meet the franchiser's
22        existing and reasonable capital standards and, with
23        consideration given to the volume of sales and service
24        of the dealership, uniformly applied minimum business
25        experience standards in the market area.
26        (7) to obtain money, goods, services, anything of

 

 

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1    value, or any other benefit from any other person with
2    whom the motor vehicle dealer does business, on account of
3    or in relation to the transactions between the dealer and
4    the other person as compensation, except for services
5    actually rendered, unless such benefit is promptly
6    accounted for and transmitted to the motor vehicle dealer;
7        (8) to grant an additional franchise in the relevant
8    market area of an existing franchise of the same line make
9    or to relocate an existing motor vehicle dealership within
10    or into a relevant market area of an existing franchise of
11    the same line make. However, if the manufacturer wishes to
12    grant such an additional franchise to an independent
13    person in a bona fide relationship in which such person is
14    prepared to make a significant investment subject to loss
15    in such a dealership, or if the manufacturer wishes to
16    relocate an existing motor vehicle dealership, then the
17    manufacturer shall send a letter by certified mail, return
18    receipt requested, to each existing dealer or dealers of
19    the same line make whose relevant market area includes the
20    proposed location of the additional or relocated franchise
21    at least 60 days before the manufacturer grants an
22    additional franchise or relocates an existing franchise of
23    the same line make within or into the relevant market area
24    of an existing franchisee of the same line make. Each
25    notice shall set forth the specific grounds for the
26    proposed grant of an additional or relocation of an

 

 

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1    existing franchise and shall state that the dealer has
2    only 30 days from the date of receipt of the notice to file
3    with the Motor Vehicle Review Board a written protest
4    against the proposed action. Unless the parties agree upon
5    the grant or establishment of the additional or relocated
6    franchise within 30 days from the date the notice was
7    received by the existing franchisee of the same line make
8    or any person entitled to receive such notice, the
9    franchisee or other person may file with the Board a
10    written protest against the grant or establishment of the
11    proposed additional or relocated franchise.
12        When a protest has been timely filed, the Board shall
13    enter an order fixing a date (within 60 days of the date of
14    the order), time, and place of a hearing on the protest,
15    required under Sections 12 and 29 of this Act, and send by
16    certified or registered mail, return receipt requested, a
17    copy of the order to the manufacturer that filed the
18    notice of intention to grant or establish the proposed
19    additional or relocated franchise and to the protesting
20    dealer or dealers of the same line make whose relevant
21    market area includes the proposed location of the
22    additional or relocated franchise.
23        When more than one protest is filed against the grant
24    or establishment of the additional or relocated franchise
25    of the same line make, the Board may consolidate the
26    hearings to expedite disposition of the matter. The

 

 

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1    manufacturer shall have the burden of proof to establish
2    that good cause exists to allow the grant or establishment
3    of the additional or relocated franchise. The manufacturer
4    may not grant or establish the additional franchise or
5    relocate the existing franchise before the hearing process
6    is concluded as prescribed by this Act, and thereafter if
7    the Board determines that the manufacturer has failed to
8    meet its burden of proof and that good cause does not exist
9    to allow the grant or establishment of the additional
10    franchise or relocation of the existing franchise.
11        The determination whether good cause exists for
12    allowing the grant or establishment of an additional
13    franchise or relocated existing franchise, shall be made
14    by the Board under subsection (c) of Section 12 of this
15    Act. If the manufacturer seeks to enter into a contract,
16    agreement or other arrangement with any person,
17    establishing any additional motor vehicle dealership or
18    other facility, limited to the sale of factory repurchase
19    vehicles or late model vehicles, then the manufacturer
20    shall follow the notice procedures set forth in this
21    Section and the determination whether good cause exists
22    for allowing the proposed agreement shall be made by the
23    Board under subsection (c) of Section 12, with the
24    manufacturer having the burden of proof.
25            A. (Blank).
26            B. For the purposes of this Section, appointment

 

 

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1        of a successor motor vehicle dealer at the same
2        location as its predecessor, or within 2 miles of such
3        location, or the relocation of an existing dealer or
4        franchise within 2 miles of the relocating dealer's or
5        franchisee's existing location, shall not be construed
6        as a grant, establishment or the entering into of an
7        additional franchise or selling agreement, or a
8        relocation of an existing franchise. The reopening of
9        a motor vehicle dealership that has not been in
10        operation for 18 months or more shall be deemed the
11        grant of an additional franchise or selling agreement.
12            C. This Section does not apply to the relocation
13        of an existing dealership or franchise in a county
14        having a population of more than 300,000 persons when
15        the new location is within the dealer's current
16        relevant market area, provided the new location is
17        more than 7 miles from the nearest dealer of the same
18        line make. This Section does not apply to the
19        relocation of an existing dealership or franchise in a
20        county having a population of less than 300,000
21        persons when the new location is within the dealer's
22        current relevant market area, provided the new
23        location is more than 12 miles from the nearest dealer
24        of the same line make. A dealer that would be farther
25        away from the new location of an existing dealership
26        or franchise of the same line make after a relocation

 

 

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1        may not file a written protest against the relocation
2        with the Motor Vehicle Review Board.
3            D. Nothing in this Section shall be construed to
4        prevent a franchiser from implementing affirmative
5        action programs providing business opportunities for
6        minorities or from complying with applicable federal,
7        State or local law;
8        (9) to require a motor vehicle dealer to assent to a
9    release, assignment, novation, waiver or estoppel which
10    would relieve any person from liability imposed by this
11    Act;
12        (10) to prevent or refuse to give effect to the
13    succession to the ownership or management control of a
14    dealership by any legatee under the will of a dealer or to
15    an heir under the laws of descent and distribution of this
16    State unless the franchisee has designated a successor to
17    the ownership or management control under the succession
18    provisions of the franchise. Unless the franchiser, having
19    the burden of proof, proves that the successor is a person
20    who is not of good moral character or does not meet the
21    franchiser's existing and reasonable capital standards
22    and, with consideration given to the volume of sales and
23    service of the dealership, uniformly applied minimum
24    business experience standards in the market area, any
25    designated successor of a dealer or franchisee may succeed
26    to the ownership or management control of a dealership

 

 

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1    under the existing franchise if:
2                (i) The designated successor gives the
3            franchiser written notice by certified mail,
4            return receipt requested, of his or her intention
5            to succeed to the ownership of the dealer within
6            60 days of the dealer's death or incapacity; and
7                (ii) The designated successor agrees to be
8            bound by all the terms and conditions of the
9            existing franchise.
10        Notwithstanding the foregoing, in the event the motor
11    vehicle dealer or franchisee and manufacturer have duly
12    executed an agreement concerning succession rights prior
13    to the dealer's death or incapacitation, the agreement
14    shall be observed.
15            (A) If the franchiser intends to refuse to honor
16        the successor to the ownership of a deceased or
17        incapacitated dealer or franchisee under an existing
18        franchise agreement, the franchiser shall send a
19        letter by certified mail, return receipt requested, to
20        the designated successor within 60 days from receipt
21        of a proposal advising of its intent to refuse to honor
22        the succession and to discontinue the existing
23        franchise agreement and shall state that the
24        designated successor only has 30 days from the receipt
25        of the notice to file with the Motor Vehicle Review
26        Board a written protest against the proposed action.

 

 

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1        The notice shall set forth the specific grounds for
2        the refusal to honor the succession and discontinue
3        the existing franchise agreement.
4            If notice of refusal is not timely served upon the
5        designated successor, the franchise agreement shall
6        continue in effect subject to termination only as
7        otherwise permitted by paragraph (6) of subsection (d)
8        of Section 4 of this Act.
9            Within 30 days from the date the notice was
10        received by the designated successor or any other
11        person entitled to notice, the designee or other
12        person may file with the Board a written protest
13        against the proposed action.
14            When a protest has been timely filed, the Board
15        shall enter an order, fixing a date (within 60 days of
16        the date of the order), time, and place of a hearing on
17        the protest, required under Sections 12 and 29 of this
18        Act, and send by certified mail, return receipt
19        requested, a copy of the order to the franchiser that
20        filed the notice of intention of the proposed action
21        and to the protesting designee or such other person.
22            The manufacturer shall have the burden of proof to
23        establish that good cause exists to refuse to honor
24        the succession and discontinue the existing franchise
25        agreement. The determination whether good cause exists
26        to refuse to honor the succession shall be made by the

 

 

HB5395- 29 -LRB102 25907 HLH 35500 b

1        Board under subdivision (B) of this paragraph (10).
2        The manufacturer shall not refuse to honor the
3        succession or discontinue the existing franchise
4        agreement before the hearing process is concluded as
5        prescribed by this Act, and thereafter if the Board
6        determines that it has failed to meet its burden of
7        proof and that good cause does not exist to refuse to
8        honor the succession and discontinue the existing
9        franchise agreement.
10            (B) No manufacturer shall impose any conditions
11        upon honoring the succession and continuing the
12        existing franchise agreement with the designated
13        successor other than that the franchisee has
14        designated a successor to the ownership or management
15        control under the succession provisions of the
16        franchise, or that the designated successor is of good
17        moral character or meets the reasonable capital
18        standards and, with consideration given to the volume
19        of sales and service of the dealership, uniformly
20        applied minimum business experience standards in the
21        market area;
22        (11) to prevent or refuse to approve a proposal to
23    establish a successor franchise at a location previously
24    approved by the franchiser when submitted with the
25    voluntary termination by the existing franchisee unless
26    the successor franchisee would not otherwise qualify for a

 

 

HB5395- 30 -LRB102 25907 HLH 35500 b

1    new motor vehicle dealer's license under the Illinois
2    Vehicle Code or unless the franchiser, having the burden
3    of proof, proves that such proposed successor is not of
4    good moral character or does not meet the franchiser's
5    existing and reasonable capital standards and, with
6    consideration given to the volume of sales and service of
7    the dealership, uniformly applied minimum business
8    experience standards in the market area. However, when
9    such a rejection of a proposal is made, the manufacturer
10    shall give written notice of its reasons to the franchisee
11    within 60 days of receipt by the manufacturer of the
12    proposal. However, nothing herein shall be construed to
13    prevent a franchiser from implementing affirmative action
14    programs providing business opportunities for minorities,
15    or from complying with applicable federal, State or local
16    law;
17        (12) to prevent or refuse to grant a franchise to a
18    person because such person owns, has investment in or
19    participates in the management of or holds a franchise for
20    the sale of another make or line of motor vehicles within 7
21    miles of the proposed franchise location in a county
22    having a population of more than 300,000 persons, or
23    within 12 miles of the proposed franchise location in a
24    county having a population of less than 300,000 persons;
25        (13) to prevent or attempt to prevent any new motor
26    vehicle dealer from establishing any additional motor

 

 

HB5395- 31 -LRB102 25907 HLH 35500 b

1    vehicle dealership or other facility limited to the sale
2    of factory repurchase vehicles or late model vehicles or
3    otherwise offering for sale factory repurchase vehicles of
4    the same line make at an existing franchise by failing to
5    make available any contract, agreement or other
6    arrangement which is made available or otherwise offered
7    to any person; or
8        (14) to exercise a right of first refusal or other
9    right to acquire a franchise from a dealer, unless the
10    manufacturer:
11            (A) notifies the dealer in writing that it intends
12        to exercise its right to acquire the franchise not
13        later than 60 days after the manufacturer's or
14        distributor's receipt of a notice of the proposed
15        transfer from the dealer and all information and
16        documents reasonably and customarily required by the
17        manufacturer or distributor supporting the proposed
18        transfer;
19            (B) pays to the dealer the same or greater
20        consideration as the dealer has contracted to receive
21        in connection with the proposed transfer or sale of
22        all or substantially all of the dealership assets,
23        stock, or other ownership interest, including the
24        purchase or lease of all real property, leasehold, or
25        improvements related to the transfer or sale of the
26        dealership. Upon exercise of the right of first

 

 

HB5395- 32 -LRB102 25907 HLH 35500 b

1        refusal or such other right, the manufacturer or
2        distributor shall have the right to assign the lease
3        or to convey the real property;
4            (C) assumes all of the duties, obligations, and
5        liabilities contained in the agreements that were to
6        be assumed by the proposed transferee and with respect
7        to which the manufacturer or distributor exercised the
8        right of first refusal or other right to acquire the
9        franchise;
10            (D) reimburses the proposed transferee for all
11        reasonable expenses incurred in evaluating,
12        investigating, and negotiating the transfer of the
13        dealership prior to the manufacturer's or
14        distributor's exercise of its right of first refusal
15        or other right to acquire the dealership. For purposes
16        of this paragraph, "reasonable expenses" includes the
17        usual and customary legal and accounting fees charged
18        for similar work, as well as expenses associated with
19        the evaluation and investigation of any real property
20        on which the dealership is operated. The proposed
21        transferee shall submit an itemized list of its
22        expenses to the manufacturer or distributor not later
23        than 30 days after the manufacturer's or distributor's
24        exercise of the right of first refusal or other right
25        to acquire the motor vehicle franchise. The
26        manufacturer or distributor shall reimburse the

 

 

HB5395- 33 -LRB102 25907 HLH 35500 b

1        proposed transferee for its expenses not later than 90
2        days after receipt of the itemized list. A
3        manufacturer or distributor may request to be provided
4        with the itemized list of expenses before exercising
5        the manufacturer's or distributor's right of first
6        refusal.
7        If a manufacturer exercises a right of first refusal
8    under this paragraph (14) on or after January 1, 2022 in
9    order to terminate a dealership that paid at least 10% of
10    the local retailers' occupation tax imposed by the
11    municipality or county where the terminated dealership is
12    located during the calendar year immediately prior to the
13    termination, then, in addition to any amounts due under
14    this paragraph, for a period of 20 consecutive years after
15    the dealership is terminated, the manufacturer must pay to
16    the municipality or county in which the terminated
17    dealership was located an amount equal to the certified
18    local retailers' occupation tax amount. For the purposes
19    of this paragraph (14), the certified local retailers'
20    occupation tax amount is the highest amount paid by the
21    dealership in any of the 5 years immediately prior to the
22    year in which the dealership was terminated.
23        Except as provided in this paragraph (14), neither the
24    selling dealer nor the manufacturer or distributor shall
25    have any liability to any person as a result of a
26    manufacturer or distributor exercising its right of first

 

 

HB5395- 34 -LRB102 25907 HLH 35500 b

1    refusal.
2        For the purpose of this paragraph, "proposed
3    transferee" means the person to whom the franchise would
4    have been transferred to, or was proposed to be
5    transferred to, had the right of first refusal or other
6    right to acquire the franchise not been exercised by the
7    manufacturer or distributor.
8    (f) It is deemed a violation for a manufacturer, a
9distributor, a wholesaler, a distributor branch or division, a
10factory branch or division, or a wholesale branch or division,
11or officer, agent, broker, shareholder, except a shareholder
12of 1% or less of the outstanding shares of any class of
13securities of a manufacturer, distributor, or wholesaler which
14is a publicly traded corporation, or other representative,
15directly or indirectly, to own or operate a place of business
16as a motor vehicle franchisee or motor vehicle financing
17affiliate, except that, this subsection shall not prohibit:
18        (1) the ownership or operation of a place of business
19    by a manufacturer, distributor, or wholesaler for a
20    period, not to exceed 18 months, during the transition
21    from one motor vehicle franchisee to another;
22        (2) the investment in a motor vehicle franchisee by a
23    manufacturer, distributor, or wholesaler if the investment
24    is for the sole purpose of enabling a partner or
25    shareholder in that motor vehicle franchisee to acquire an
26    interest in that motor vehicle franchisee and that partner

 

 

HB5395- 35 -LRB102 25907 HLH 35500 b

1    or shareholder is not otherwise employed by or associated
2    with the manufacturer, distributor, or wholesaler and
3    would not otherwise have the requisite capital investment
4    funds to invest in the motor vehicle franchisee, and has
5    the right to purchase the entire equity interest of the
6    manufacturer, distributor, or wholesaler in the motor
7    vehicle franchisee within a reasonable period of time not
8    to exceed 5 years; or
9        (3) the ownership or operation of a place of business
10    by a manufacturer that manufactures only diesel engines
11    for installation in trucks having a gross vehicle weight
12    rating of more than 16,000 pounds that are required to be
13    registered under the Illinois Vehicle Code, provided that:
14            (A) the manufacturer does not otherwise
15        manufacture, distribute, or sell motor vehicles as
16        defined under Section 1-217 of the Illinois Vehicle
17        Code;
18            (B) the manufacturer owned a place of business and
19        it was in operation as of January 1, 2016;
20            (C) the manufacturer complies with all obligations
21        owed to dealers that are not owned, operated, or
22        controlled by the manufacturer, including, but not
23        limited to those obligations arising pursuant to
24        Section 6;
25            (D) to further avoid any acts or practices, the
26        effect of which may be to lessen or eliminate

 

 

HB5395- 36 -LRB102 25907 HLH 35500 b

1        competition, the manufacturer provides to dealers on
2        substantially equal terms access to all support for
3        completing repairs, including, but not limited to,
4        parts and assemblies, training, and technical service
5        bulletins, and other information concerning repairs
6        that the manufacturer provides to facilities that are
7        owned, operated, or controlled by the manufacturer;
8        and
9            (E) the manufacturer does not require that
10        warranty repair work be performed by a
11        manufacturer-owned repair facility and the
12        manufacturer provides any dealer that has an agreement
13        with the manufacturer to sell and perform warranty
14        repairs on the manufacturer's engines the opportunity
15        to perform warranty repairs on those engines,
16        regardless of whether the dealer sold the truck into
17        which the engine was installed.
18    (g) Notwithstanding the terms, provisions, or conditions
19of any agreement or waiver, it shall be deemed a violation for
20a manufacturer, a distributor, a wholesaler, a distributor
21branch or division, a factory branch or division, or a
22wholesale branch or division, or officer, agent or other
23representative thereof, to directly or indirectly condition
24the awarding of a franchise to a prospective new motor vehicle
25dealer, the addition of a line make or franchise to an existing
26dealer, the renewal of a franchise of an existing dealer, the

 

 

HB5395- 37 -LRB102 25907 HLH 35500 b

1approval of the relocation of an existing dealer's facility,
2or the approval of the sale or transfer of the ownership of a
3franchise on the willingness of a dealer, proposed new dealer,
4or owner of an interest in the dealership facility to enter
5into a site control agreement or exclusive use agreement
6unless separate and reasonable consideration was offered and
7accepted for that agreement.
8    For purposes of this subsection (g), the terms "site
9control agreement" and "exclusive use agreement" include any
10agreement that has the effect of either (i) requiring that the
11dealer establish or maintain exclusive dealership facilities;
12or (ii) restricting the ability of the dealer, or the ability
13of the dealer's lessor in the event the dealership facility is
14being leased, to transfer, sell, lease, or change the use of
15the dealership premises, whether by sublease, lease,
16collateral pledge of lease, or other similar agreement. "Site
17control agreement" and "exclusive use agreement" also include
18a manufacturer restricting the ability of a dealer to
19transfer, sell, or lease the dealership premises by right of
20first refusal to purchase or lease, option to purchase, or
21option to lease if the transfer, sale, or lease of the
22dealership premises is to a person who is an immediate family
23member of the dealer. For the purposes of this subsection (g),
24"immediate family member" means a spouse, parent, son,
25daughter, son-in-law, daughter-in-law, brother, and sister.
26    If a manufacturer exercises any right of first refusal to

 

 

HB5395- 38 -LRB102 25907 HLH 35500 b

1purchase or lease or option to purchase or lease with regard to
2a transfer, sale, or lease of the dealership premises to a
3person who is not an immediate family member of the dealer,
4then (1) within 60 days from the receipt of the completed
5application forms generally utilized by a manufacturer to
6conduct its review and a copy of all agreements regarding the
7proposed transfer, the manufacturer must notify the dealer of
8its intent to exercise the right of first refusal to purchase
9or lease or option to purchase or lease and (2) the exercise of
10the right of first refusal to purchase or lease or option to
11purchase or lease must result in the dealer receiving
12consideration, terms, and conditions that either are the same
13as or greater than that which they have contracted to receive
14in connection with the proposed transfer, sale, or lease of
15the dealership premises.
16    Any provision contained in any agreement entered into on
17or after November 25, 2009 (the effective date of Public Act
1896-824) that is inconsistent with the provisions of this
19subsection (g) shall be voidable at the election of the
20affected dealer, prospective dealer, or owner of an interest
21in the dealership facility.
22    (h) For purposes of this subsection:
23    "Successor manufacturer" means any motor vehicle
24manufacturer that, on or after January 1, 2009, acquires,
25succeeds to, or assumes any part of the business of another
26manufacturer, referred to as the "predecessor manufacturer",

 

 

HB5395- 39 -LRB102 25907 HLH 35500 b

1as the result of any of the following:
2        (i) A change in ownership, operation, or control of
3    the predecessor manufacturer by sale or transfer of
4    assets, corporate stock or other equity interest,
5    assignment, merger, consolidation, combination, joint
6    venture, redemption, court-approved sale, operation of law
7    or otherwise.
8        (ii) The termination, suspension, or cessation of a
9    part or all of the business operations of the predecessor
10    manufacturer.
11        (iii) The discontinuance of the sale of the product
12    line.
13        (iv) A change in distribution system by the
14    predecessor manufacturer, whether through a change in
15    distributor or the predecessor manufacturer's decision to
16    cease conducting business through a distributor
17    altogether.
18    "Former Franchisee" means a new motor vehicle dealer that
19has entered into a franchise with a predecessor manufacturer
20and that has either:
21        (i) entered into a termination agreement or deferred
22    termination agreement with a predecessor or successor
23    manufacturer related to such franchise; or
24        (ii) has had such franchise canceled, terminated,
25    nonrenewed, noncontinued, rejected, nonassumed, or
26    otherwise ended.

 

 

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1    For a period of 3 years from: (i) the date that a successor
2manufacturer acquires, succeeds to, or assumes any part of the
3business of a predecessor manufacturer; (ii) the last day that
4a former franchisee is authorized to remain in business as a
5franchised dealer with respect to a particular franchise under
6a termination agreement or deferred termination agreement with
7a predecessor or successor manufacturer; (iii) the last day
8that a former franchisee that was cancelled, terminated,
9nonrenewed, noncontinued, rejected, nonassumed, or otherwise
10ended by a predecessor or successor manufacturer is authorized
11to remain in business as a franchised dealer with respect to a
12particular franchise; or (iv) November 25, 2009 (the effective
13date of Public Act 96-824), whichever is latest, it shall be
14unlawful for such successor manufacturer to enter into a same
15line make franchise with any person or to permit the
16relocation of any existing same line make franchise, for a
17line make of the predecessor manufacturer that would be
18located or relocated within the relevant market area of a
19former franchisee who owned or leased a dealership facility in
20that relevant market area without first offering the
21additional or relocated franchise to the former franchisee, or
22the designated successor of such former franchisee in the
23event the former franchisee is deceased or a person with a
24disability, at no cost and without any requirements or
25restrictions other than those imposed generally on the
26manufacturer's other franchisees at that time, unless one of

 

 

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1the following applies:
2        (1) As a result of the former franchisee's
3    cancellation, termination, noncontinuance, or nonrenewal
4    of the franchise, the predecessor manufacturer had
5    consolidated the line make with another of its line makes
6    for which the predecessor manufacturer had a franchisee
7    with a then-existing dealership facility located within
8    that relevant market area.
9        (2) The successor manufacturer has paid the former
10    franchisee, or the designated successor of such former
11    franchisee in the event the former franchisee is deceased
12    or a person with a disability, the fair market value of the
13    former franchisee's franchise on (i) the date the
14    franchiser announces the action which results in the
15    termination, cancellation, or nonrenewal; or (ii) the date
16    the action which results in termination, cancellation, or
17    nonrenewal first became general knowledge; or (iii) the
18    day 12 months prior to the date on which the notice of
19    termination, cancellation, or nonrenewal is issued,
20    whichever amount is higher. Payment is due within 90 days
21    of the effective date of the termination, cancellation, or
22    nonrenewal. If the termination, cancellation, or
23    nonrenewal is due to a manufacturer's change in
24    distributors, the manufacturer may avoid paying fair
25    market value to the dealer if the new distributor or the
26    manufacturer offers the dealer a franchise agreement with

 

 

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1    terms acceptable to the dealer.
2        (3) The successor manufacturer proves that it would
3    have had good cause to terminate the franchise agreement
4    of the former franchisee, or the successor of the former
5    franchisee under item (e)(10) in the event that the former
6    franchisee is deceased or a person with a disability. The
7    determination of whether the successor manufacturer would
8    have had good cause to terminate the franchise agreement
9    of the former franchisee, or the successor of the former
10    franchisee, shall be made by the Board under subsection
11    (d) of Section 12. A successor manufacturer that seeks to
12    assert that it would have had good cause to terminate a
13    former franchisee, or the successor of the former
14    franchisee, must file a petition seeking a hearing on this
15    issue before the Board and shall have the burden of
16    proving that it would have had good cause to terminate the
17    former franchisee or the successor of the former
18    franchisee. No successor dealer, other than the former
19    franchisee, may be appointed or franchised by the
20    successor manufacturer within the relevant market area of
21    the former franchisee until the Board has held a hearing
22    and rendered a determination on the issue of whether the
23    successor manufacturer would have had good cause to
24    terminate the former franchisee.
25    In the event that a successor manufacturer attempts to
26enter into a same line make franchise with any person or to

 

 

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1permit the relocation of any existing line make franchise
2under this subsection (h) at a location that is within the
3relevant market area of 2 or more former franchisees, then the
4successor manufacturer may not offer it to any person other
5than one of those former franchisees unless the successor
6manufacturer can prove that at least one of the 3 exceptions in
7items (1), (2), and (3) of this subsection (h) applies to each
8of those former franchisees.
9(Source: P.A. 102-433, eff. 1-1-22.)
 
10    Section 99. Effective date. This Act takes effect upon
11becoming law.