Public Act 099-0844
 
SB0140 EnrolledLRB099 03415 JLS 23423 b



    AN ACT concerning business.

 
    Be it enacted by the People of the State of Illinois, 
represented in the General Assembly: 




 
    Section 5. The Motor Vehicle Franchise Act is amended  by 
changing Section 4 as follows:
 



    (815 ILCS 710/4)  (from Ch. 121 1/2, par. 754)



    Sec. 4. Unfair competition and practices. 

    (a) The unfair methods of competition and unfair and 
deceptive acts or
practices listed in this Section are hereby 
declared to be unlawful. In
construing the provisions of this 
Section, the courts may be guided by the
interpretations of the 
Federal Trade Commission Act (15 U.S.C. 45 et
seq.), as from 
time to time amended.

    (b) It shall be deemed a violation for any manufacturer, 
factory branch,
factory representative, distributor or 
wholesaler, distributor branch,
distributor representative or 
motor vehicle dealer to engage in any action
with respect to a 
franchise which is arbitrary, in bad faith or
unconscionable 
and which causes damage to any of the parties or to the public.

    (c) It shall be deemed a violation for a manufacturer, a 
distributor,
a wholesaler, a distributor branch or division, a 
factory branch or division,
or a wholesale branch or division, 
or officer, agent or other representative
thereof, to coerce, 
or attempt to coerce, any motor vehicle dealer:


        (1) to accept, buy or order any motor vehicle or 
    vehicles, appliances,
equipment, parts or accessories 
    therefor, or any other commodity or commodities
or service 
    or services which such motor vehicle dealer has not 
    voluntarily
ordered or requested except items required by 
    applicable local, state or
federal law; or to require a 
    motor vehicle dealer to accept, buy, order or
purchase such 
    items in order to obtain any motor vehicle or vehicles or 
    any
other commodity or commodities which have been ordered 
    or requested by such
motor vehicle dealer;


        (2) to order or accept delivery of any motor vehicle 
    with special
features, appliances, accessories or 
    equipment not included in the list
price of the motor 
    vehicles as publicly advertised by the manufacturer

    thereof, except items required by applicable law; or


        (3) to order for anyone any parts, accessories, 
    equipment, machinery,
tools, appliances or any commodity 
    whatsoever, except items required by
applicable law.

    (d) It shall be deemed a violation for a manufacturer, a 
distributor,
a wholesaler, a distributor branch or division, or 
officer, agent or other
representative thereof:


        (1) to adopt, change, establish or implement a plan or 
    system for the
allocation and distribution of new motor 
    vehicles to motor vehicle dealers
which is arbitrary or 
    capricious or to modify an existing plan so as to cause
the 
    same to be arbitrary or capricious;


        (2) to fail or refuse to advise or disclose to any 
    motor vehicle dealer
having a franchise or selling 
    agreement, upon written request therefor,
the basis upon 
    which new motor vehicles of the same line make are 
    allocated
or distributed to motor vehicle dealers in the 
    State and the basis upon
which the current allocation or 
    distribution is being made or will be made
to such motor 
    vehicle dealer;


        (3) to refuse to deliver in reasonable quantities and 
    within a reasonable
time after receipt of dealer's order, 
    to any motor vehicle dealer having
a franchise or selling 
    agreement for the retail sale of new motor vehicles
sold or 
    distributed by such manufacturer, distributor, wholesaler, 
    distributor
branch or division, factory branch or division 
    or wholesale branch or division,
any such motor vehicles as 
    are covered by such franchise or selling agreement

    specifically publicly advertised in the State by such 
    manufacturer,
distributor, wholesaler, distributor branch 
    or division, factory branch or
division, or wholesale 
    branch or division to be available for immediate
delivery.  
    However, the failure to deliver any motor vehicle shall not 
    be
considered a violation of this Act if such failure is 
    due to an act of God,
a work stoppage or delay due to a 
    strike or labor difficulty, a shortage
of materials, a lack 
    of manufacturing capacity, a freight embargo or other
cause 
    over which the manufacturer, distributor, or wholesaler, 
    or any agent
thereof has no control;


        (4) to coerce, or attempt to coerce, any motor vehicle 
    dealer to enter
into any agreement with such manufacturer, 
    distributor, wholesaler, distributor
branch or division, 
    factory branch or division, or wholesale branch or

    division, or officer, agent or other representative 
    thereof, or to do any
other act prejudicial to the dealer 
    by threatening to reduce his allocation
of motor vehicles 
    or cancel any franchise or any selling agreement existing

    between such manufacturer, distributor, wholesaler, 
    distributor branch or
division, or factory branch or 
    division, or wholesale branch or division,
and the dealer. 
    However, notice in good faith to any motor vehicle dealer

    of the dealer's violation of any terms or provisions of 
    such franchise or
selling agreement or of any law or 
    regulation applicable to the conduct of
a motor vehicle 
    dealer shall not constitute a violation of this Act;


        (5) to require a franchisee to participate in an 
    advertising campaign
or contest or any promotional 
    campaign, or to purchase or lease any promotional

    materials, training materials, show room or other display 
    decorations or
materials at the expense of the franchisee;


        (6) to cancel or terminate the franchise or selling 
    agreement of a
motor vehicle dealer without good cause and 
    without giving notice as
hereinafter provided; to fail or 
    refuse to extend the franchise or selling
agreement of a 
    motor vehicle dealer upon its expiration without good cause

    and without giving notice as hereinafter provided; or, to 
    offer a renewal,
replacement or succeeding franchise or 
    selling agreement containing terms
and provisions the 
    effect of which is to substantially change or modify the

    sales and service obligations or capital requirements of 
    the motor vehicle
dealer arbitrarily and without good cause 
    and without giving notice as
hereinafter provided 
    notwithstanding any term or provision of a franchise
or 
    selling agreement.


            (A) If a manufacturer, distributor, wholesaler, 
        distributor branch or
division, factory branch or 
        division or wholesale branch or division intends
to 
        cancel or terminate a franchise or selling agreement or 
        intends not to
extend or renew a franchise or selling 
        agreement on its expiration, it shall
send a letter by 
        certified mail, return
receipt requested, to the 
        affected
franchisee at least
60 days before the 
        effective date of the
proposed action, or not later 
        than 10 days before the proposed action when the
reason 
        for the action is based upon either of the following:


                (i) the
business operations of the franchisee 
            have been abandoned or
the franchisee has failed to 
            conduct customary sales and service operations

            during customary business hours for at least 7

            consecutive business
days unless such closing is 
            due to an act of God, strike or labor
difficulty or 
            other cause over which the franchisee has no 
            control; or


                (ii) the conviction of or plea of nolo

            contendere by the motor
vehicle dealer or any 
            operator thereof in a court of competent 
            jurisdiction
to an offense punishable by 
            imprisonment for more than two years.


            Each notice of proposed action shall include a 
        detailed statement
setting forth the specific grounds 
        for the proposed cancellation, termination,
or refusal 
        to extend or renew and shall state that the dealer has

        only 30 days from receipt of
the notice to file with 
        the Motor Vehicle Review Board a written protest

        against the proposed action.


            (B) If a manufacturer, distributor, wholesaler, 
        distributor branch or
division, factory branch or 
        division or wholesale branch or division intends
to 
        change substantially or modify the sales and service 
        obligations or
capital requirements of a motor vehicle 
        dealer as a condition to extending
or renewing the 
        existing franchise or selling agreement of such motor

        vehicle dealer, it shall
send a letter by certified 
        mail, return receipt requested, to the affected

        franchisee at
least 60
 days
before the date of 
        expiration of the franchise or selling agreement.  Each

        notice of proposed action shall include a detailed 
        statement setting forth
the specific grounds for the 
        proposed action
and shall state that the dealer has 
        only 30 days from receipt of
the notice to file with 
        the Motor Vehicle Review Board a written protest

        against the proposed action.


            (C) Within 30 days from receipt of the notice under

        subparagraphs (A) and (B),
the franchisee may file with 
        the Board a written
protest against the proposed 
        action.


            When the protest has been timely filed, the Board 
        shall enter an
order,
fixing a date (within 60 days of 
        the date of the order), time,
and place of a hearing on 
        the protest required under Sections 12 and 29
of this 
        Act, and send by certified mail, return receipt 
        requested, a copy of
the order to the manufacturer that 
        filed the notice of intention of the
proposed action 
        and to the protesting dealer or franchisee.


            The manufacturer shall have the burden of proof to 
        establish that good
cause exists to cancel or 
        terminate, or fail to extend or renew the franchise
or

        selling agreement of a motor vehicle dealer or 
        franchisee, and to change
substantially or modify the 
        sales and service obligations or capital
requirements 
        of a motor vehicle dealer as a condition to extending 
        or renewing
the existing franchise or selling 
        agreement.  The determination whether good
cause exists 
        to cancel, terminate, or refuse to renew or extend the 
        franchise
or selling agreement, or to change or modify 
        the obligations of the dealer as a
condition to offer 
        renewal, replacement, or succession shall be made
by 
        the Board under subsection (d) of Section 12 of this 
        Act.


            (D) Notwithstanding the terms, conditions, or 
        provisions of a
franchise
or selling agreement, the 
        following shall not constitute good cause for

        cancelling or terminating or failing to extend or renew 
        the franchise or
selling agreement: (i) the change of 
        ownership or executive management of the
franchisee's 
        dealership; or (ii)
the
fact that the franchisee or 
        owner of an interest in the franchise owns, has
an 
        investment in, participates in the management of, or 
        holds a license for
the sale of the same or any other 
        line make of new motor vehicles.


            (E) The manufacturer may not cancel or terminate, 
        or fail to extend or
renew a franchise or selling 
        agreement or change or modify the obligations of
the 
        franchisee as a condition to offering a renewal, 
        replacement, or succeeding
franchise or selling 
        agreement before the hearing process is concluded as

        prescribed by this Act, and thereafter, if the Board 
        determines that the
manufacturer has failed to meet its 
        burden of proof and that good cause does
not exist to 
        allow the proposed action;


        (7) notwithstanding the terms of any franchise 
    agreement, to fail to
indemnify and hold harmless its 
    franchised dealers against any judgment
or settlement for 
    damages, including, but not limited to, court costs, expert

    witness fees, reasonable attorneys' fees of the new motor 
    vehicle
dealer, and other expenses incurred in the 
    litigation, so long as such fees
and costs are reasonable,

    arising out
of complaints, claims or lawsuits including, 
    but not limited to, strict
liability, negligence, 
    misrepresentation, warranty (express or implied),
or 
    recision of the sale as defined in Section 2-608 of the 
    Uniform Commercial
Code, to the extent that the judgment or 
    settlement relates to the alleged
defective or negligent 
    manufacture, assembly or design of new motor vehicles,

    parts or accessories or other functions by the 
    manufacturer, beyond the
control of the dealer; provided 
    that, in order to provide an adequate
defense, the 
    manufacturer receives notice of the filing of a complaint, 
    claim,
or lawsuit within 60 days after the filing;

        (8) to require or otherwise coerce a motor vehicle 
    dealer to underutilize the motor vehicle dealer's 
    facilities by requiring or otherwise coercing the motor 
    vehicle dealer to exclude or remove from the motor vehicle 
    dealer's facilities operations for selling or servicing of 
    any vehicles for which the motor vehicle dealer has a 
    franchise agreement with another manufacturer, 
    distributor, wholesaler, distribution branch or division, 
    or officer, agent, or other representative thereof; 
    provided, however, that, in light of all existing 
    circumstances, (i) the motor vehicle dealer maintains a 
    reasonable line of credit for each make or line of new 
    motor vehicle, (ii) the new motor vehicle dealer remains in 
    compliance with any reasonable facilities requirements of 
    the manufacturer, (iii) no change is made in the principal 
    management of the new motor vehicle dealer, and (iv) the 
    addition of the make or line of new motor vehicles would be 
    reasonable. The reasonable facilities requirement set 
    forth in item (ii) of subsection (d)(8) shall not include 
    any requirement that a franchisee establish or maintain 
    exclusive facilities, personnel, or display space. Any 
    decision by a motor vehicle dealer to sell additional makes 
    or lines at the motor vehicle dealer's facility shall be 
    presumed to be reasonable, and the manufacturer shall have 
    the burden to overcome that presumption. A motor vehicle 
    dealer must provide a written notification of its intent to 
    add a make or line of new motor vehicles to the 
    manufacturer. If the manufacturer does not respond to the 
    motor vehicle dealer, in writing, objecting to the addition 
    of the make or line within 60 days after the date that the 
    motor vehicle dealer sends the written notification, then 
    the manufacturer shall be deemed to have approved the 
    addition of the make or line; or 
        (9) to use or consider the performance of a  motor 
    vehicle dealer relating to the sale of the manufacturer's, 
    distributor's, or wholesaler's vehicles or the motor 
    vehicle dealer's ability to satisfy any minimum sales or 
    market share quota or responsibility relating to the sale 
    of the manufacturer's, distributor's, or wholesaler's new 
    vehicles in determining:
            (A) the motor vehicle dealer's eligibility to 
        purchase program, certified, or other used motor 
        vehicles from the manufacturer, distributor, or 
        wholesaler;
            (B) the volume, type, or model of program, 
        certified, or other used motor vehicles that a motor 
        vehicle dealer is eligible to purchase from the 
        manufacturer, distributor, or wholesaler;
            (C) the price of any program, certified, or other 
        used motor vehicle that the dealer is eligible to 
        purchase from the manufacturer, distributor, or 
        wholesaler; or
            (D) the availability or amount of any discount, 
        credit, rebate, or sales incentive that the dealer is 
        eligible to receive from the manufacturer, 
        distributor, or wholesaler for the purchase of any 
        program, certified, or other used motor vehicle 
        offered for sale by the manufacturer, distributor, or 
        wholesaler.
    (e) It shall be deemed a violation for a manufacturer, a 
distributor,
a wholesaler, a distributor branch or division or 
officer, agent or other
representative thereof:


        (1) to resort to or use any false or misleading 
    advertisement in
connection with his business as such 
    manufacturer, distributor, wholesaler,
distributor branch 
    or division or officer, agent or other representative

    thereof;


        (2) to offer to sell or lease, or to sell or lease, any 
    new motor vehicle
to any motor vehicle dealer at a lower 
    actual price therefor than the actual
price offered to any 
    other motor vehicle dealer for the same model vehicle

    similarly equipped or to utilize any device including, but 
    not limited to,
sales promotion plans or programs which 
    result in such lesser actual
price  or fail to make 
    available to any motor vehicle dealer any
preferential 
    pricing, incentive, rebate, finance rate, or low interest 
    loan
program offered to competing motor vehicle dealers in 
    other contiguous states.
However, the provisions of this 
    paragraph shall not apply to sales
to a motor vehicle 
    dealer for resale to any unit of the United States

    Government, the State or any of its political subdivisions;


        (3) to offer to sell or lease, or to sell or lease, any 
    new motor vehicle
to any person, except a wholesaler, 
    distributor or manufacturer's employees
at a lower actual 
    price therefor than the actual price offered and charged
to 
    a motor vehicle dealer for the same model vehicle similarly 
    equipped or
to utilize any device which results in such 
    lesser actual price. However,
the provisions of this 
    paragraph shall not apply to sales to a motor
vehicle 
    dealer for resale to any unit of the United States 
    Government, the
State or any of its political subdivisions;


        (4) to prevent or attempt to prevent by contract or 
    otherwise any motor
vehicle dealer or franchisee from 
    changing the executive management control
of the motor

    vehicle dealer or franchisee unless the franchiser, having 
    the burden of
proof, proves that such change of executive 
    management will result in executive
management control by a 
    person or persons who are not of good moral character
or 
    who do not meet the franchiser's existing and, with 
    consideration given
to the volume of sales and service of 
    the dealership, uniformly applied
minimum business 
    experience standards in the market area. However where
the 
    manufacturer rejects a proposed change in executive 
    management
control, the manufacturer shall give written 
    notice of his reasons to the
dealer within 60 days of 
    notice to the manufacturer by the dealer of
the proposed 
    change. If the manufacturer does not send a letter to the

    franchisee by certified mail, return receipt requested, 
    within 60 days from
receipt by
the manufacturer of the 
    proposed change, then the change of the
executive 
    management control of the franchisee shall be deemed

    accepted as proposed by the franchisee, and the 
    manufacturer shall give
immediate
effect to such change;


        (5) to prevent or attempt to prevent by contract or 
    otherwise any motor
vehicle dealer from establishing or 
    changing the capital structure of his
dealership or the 
    means by or through which he finances the operation 
    thereof;
provided the dealer meets any reasonable capital 
    standards agreed to between
the dealer and the 
    manufacturer, distributor or wholesaler, who may require

    that the sources, method and manner by which the dealer 
    finances or intends
to finance its operation, equipment or 
    facilities be fully disclosed; 


        (6) to refuse to give effect to or prevent or attempt 
    to prevent by
contract or otherwise any motor vehicle 
    dealer or any officer, partner or
stockholder of any motor 
    vehicle dealer from selling or transferring any
part of the 
    interest of any of them to any other person or persons or 
    party
or parties unless such sale or transfer is to a 
    transferee who would
not otherwise qualify for a new motor 
    vehicle dealers license under "The
Illinois Vehicle Code" 
    or unless the franchiser, having the burden of proof,

    proves that such sale or transfer is to a person or party 
    who is not of
good moral character or does not meet the 
    franchiser's existing and reasonable
capital standards 
    and, with consideration given to the volume of sales and

    service of the dealership, uniformly applied minimum 
    business experience
standards in the market area.
However, 
    nothing herein shall be construed to prevent a
franchiser 
    from implementing affirmative action programs providing 
    business
opportunities for minorities or from complying 
    with applicable federal,
State or local law:


            (A) If the manufacturer intends to refuse to 
        approve the sale or
transfer of all or a part of the 
        interest, then it shall, within 60 days from
receipt of 
        the completed application forms generally utilized by 
        a manufacturer
to conduct its review and a copy of all 
        agreements regarding the proposed
transfer, send a 
        letter by certified mail, return receipt requested, 
        advising
the franchisee of any refusal to approve the 
        sale or transfer of all or part of
the interest
and 
        shall state that the dealer only has 30 days from the 
        receipt of the
notice to file with the Motor Vehicle 
        Review Board a written protest against
the proposed 
        action.
The
notice shall set forth specific criteria 
        used to evaluate the prospective
transferee and the 
        grounds for refusing to approve the sale or transfer to

        that transferee. Within 30 days from the franchisee's 
        receipt of the
manufacturer's notice, the
franchisee 
        may file
with the Board a written protest against the 
        proposed action.


            When a protest has been timely filed, the Board 
        shall enter an
order, fixing the date (within 60 days 
        of the date of such
order), time, and place of a 
        hearing on the protest, required under
Sections 12 and 
        29 of this Act, and send by certified mail, return 
        receipt
requested, a copy of the order to the 
        manufacturer that filed notice of
intention of the 
        proposed action and to the protesting franchisee.


            The manufacturer shall have the burden of proof to 
        establish that good
cause exists to refuse to approve 
        the sale or transfer to the transferee.  The

        determination whether good cause exists to refuse to 
        approve the sale or
transfer shall be made by the Board 
        under subdivisions (6)(B).
The manufacturer shall not 
        refuse to approve the sale or transfer
by
a dealer or 
        an officer, partner, or stockholder of a franchise or 
        any part
of the interest to any person or persons 
        before the hearing process is
concluded as prescribed 
        by this Act, and thereafter if the Board determines

        that the manufacturer has failed to meet its burden of 
        proof and that good
cause does not exist to refuse to 
        approve the sale or transfer to the
transferee.


            (B) Good cause to refuse to approve such sale or 
        transfer under this
Section is established when such 
        sale or transfer is to a transferee who would
not 
        otherwise qualify for a new motor vehicle dealers 
        license under "The
Illinois Vehicle Code" or such sale 
        or transfer is to a person or party who is
not of good 
        moral character or does not meet the franchiser's 
        existing and
reasonable capital standards and, with 
        consideration given to the volume of
sales and service 
        of the dealership, uniformly applied minimum business

        experience standards in the market area.


        (7) to obtain money, goods, services, anything of 
    value, or any other
benefit from any other person with whom 
    the motor vehicle dealer does business,
on account of or in 
    relation to the transactions between the dealer and
the 
    other person as compensation, except for services actually 
    rendered,
unless such benefit is promptly accounted for and 
    transmitted to the motor
vehicle dealer;


        (8) to grant an additional franchise in the relevant 
    market area of an
existing franchise of the same line make 
    or to relocate an existing motor
vehicle dealership within 
    or into a relevant market area of an existing
franchise of 
    the same line make.
However, if the manufacturer wishes to

    grant such an additional franchise to an independent person 
    in a bona fide
relationship in which such person is 
    prepared to make a significant
investment subject to loss 
    in such a dealership, or if the manufacturer
wishes to 
    relocate an existing motor vehicle dealership, then the

    manufacturer shall send a letter
by certified mail, return 
    receipt requested, to each existing dealer or dealers
of 
    the same line make whose relevant
market area includes the 
    proposed location of the additional or relocated
franchise 
    at least
60 days before the manufacturer grants an 
    additional franchise or relocates an
existing franchise of 
    the same line make within or into the relevant market
area 
    of an existing
franchisee of the same line make.  Each 
    notice shall set forth the specific
grounds for the 
    proposed grant of an additional or relocation of an 
    existing
franchise and shall state that the dealer has only 
    30 days from the date of receipt of the notice to file with 
    the Motor Vehicle Review Board a written protest against 
    the proposed action.  Unless the parties agree upon the 
    grant or establishment of the
additional or relocated 
    franchise within 30 days from the date the
notice was

    received by the existing franchisee of the same line make 
    or any person
entitled to receive such notice, the 
    franchisee or other person may file
with the Board a 
    written protest against the grant or establishment of the

    proposed additional or relocated franchise.


        When a protest has been timely filed, the Board shall 
    enter an order
fixing a date (within 60 days of the date of 
    the order), time,
and place of a hearing on the protest, 
    required under Sections 12 and 29
of this Act, and send by 
    certified or registered mail, return receipt
requested, a 
    copy of the order to the manufacturer that filed the notice 
    of
intention to grant or establish the proposed additional 
    or relocated
franchise and to the protesting dealer or 
    dealers of the same line make
whose
relevant market area 
    includes the proposed location of the additional or

    relocated franchise. 


        When more than one protest is filed against the grant 
    or establishment of
the
additional or relocated franchise 
    of the same line make, the Board may
consolidate the 
    hearings to expedite disposition of the matter.  The

    manufacturer shall have the burden of proof to establish 
    that good cause
exists to allow the grant or establishment 
    of the additional or relocated
franchise.  The manufacturer 
    may not grant or establish the additional
franchise or 
    relocate the existing franchise before the hearing process 
    is
concluded as prescribed by this Act, and thereafter if 
    the Board determines
that the manufacturer has failed to 
    meet its burden of proof and that good
cause does not exist 
    to allow the grant or establishment of the additional

    franchise or relocation of the existing franchise.


        The determination whether good cause exists for 
    allowing the grant or
establishment of an additional 
    franchise or relocated existing franchise,
shall be made by 
    the Board under subsection (c) of Section 12 of this Act.

    If the manufacturer seeks to enter
into a contract, 
    agreement or other arrangement with any person,

    establishing any additional motor vehicle dealership or 
    other facility,
limited to the sale of factory repurchase 
    vehicles or late model vehicles,
then the manufacturer 
    shall follow the notice procedures set forth in this

    Section and the
determination whether good cause exists for 
    allowing the proposed agreement
shall be made by the Board 
    under subsection (c) of Section 12, with the
manufacturer 
    having
the burden of proof.


            A. (Blank).


            B. For the purposes of this Section, appointment of 
        a successor motor
vehicle dealer at the same location 
        as its predecessor, or within 2 miles
of such location,

        or the relocation of an existing dealer or franchise 
        within 2 miles of
the relocating dealer's or 
        franchisee's existing location,
shall not be construed 
        as a grant, establishment or the
entering into of an 
        additional franchise or selling agreement, or a

        relocation of an existing franchise. The reopening
of a 
        motor vehicle dealership that has not been in operation 
        for 18 months
or more shall be deemed the grant of an 
        additional franchise or selling
agreement.


            C. This Section does not apply to the relocation of 
        an existing
dealership or franchise in a county having 
        a population of more than
300,000 persons when the new 
        location is within the dealer's current
relevant 
        market area, provided the new location is more than 7 
        miles from
the nearest dealer of the same line make. 
        This Section does not apply to
the relocation of an 
        existing dealership or franchise in a county having a

        population of less than 300,000 persons when the new 
        location is within the
dealer's current relevant 
        market area, provided the new location is more
than 12 
        miles from the nearest dealer of the same line make.  A 
        dealer that would be farther away
from the new location 
        of an existing dealership or
franchise of the same line 
        make after a relocation may not
file a written protest 
        against the relocation with the
Motor Vehicle Review 
        Board.


            D. Nothing in this Section shall be construed to 
        prevent a
franchiser from implementing affirmative 
        action programs providing business
opportunities for 
        minorities or from complying with applicable federal,

        State or local law;


        (9) to require a motor vehicle dealer to assent to a 
    release, assignment,
novation, waiver or estoppel which 
    would relieve any person from liability
imposed by this 
    Act;


        (10) to prevent or refuse to give effect to the 
    succession to the
ownership or management control of a 
    dealership by any legatee under the
will of a dealer or to 
    an heir under the laws of descent and distribution
of this 
    State unless the franchisee has designated a successor to 
    the ownership
or management control under the succession 
    provisions of the franchise.
Unless the
franchiser, having 
    the burden of proof, proves that the successor
is a person 
    who is not of good moral character or does not meet the

    franchiser's existing and reasonable capital standards 
    and, with consideration
given to the volume of sales and 
    service of the dealership, uniformly applied
minimum 
    business experience standards in the market area, any 
    designated
successor of a dealer or franchisee may succeed 
    to the ownership or management
control of a dealership 
    under the existing franchise if:


                (i) The designated successor gives the 
            franchiser written notice by
certified mail, 
            return receipt requested, of his or her intention 
            to succeed to
the ownership of the dealer within 60 
            days of the dealer's death or incapacity;
and


                (ii) The designated successor agrees to be 
            bound by all the terms
and
conditions of the 
            existing franchise.


        Notwithstanding the foregoing, in the event the motor 
    vehicle dealer or
franchisee and manufacturer have duly 
    executed an agreement concerning
succession rights prior 
    to the dealer's death or incapacitation, the agreement

    shall be observed.


            (A) If the franchiser intends to refuse to honor 
        the successor to the
ownership of a deceased or 
        incapacitated dealer or franchisee under an
existing 
        franchise agreement, the franchiser shall send a 
        letter by certified
mail, return receipt requested, to 
        the
designated successor within
60 days
from receipt of 
        a proposal advising of its intent to refuse to honor 
        the
succession and to discontinue the existing 
        franchise agreement
and shall state that the 
        designated successor only has 30 days from the
receipt 
        of the notice to file with the Motor Vehicle Review 
        Board a written
protest against the proposed action.

        The notice shall set forth the
specific grounds for the 
        refusal to honor the succession and discontinue the

        existing franchise agreement.


            If notice of refusal is not timely served upon the 
        designated
successor,
the franchise agreement shall 
        continue in effect subject to termination only as

        otherwise permitted by paragraph (6) of subsection (d) 
        of Section 4 of this
Act.


            Within 30 days from the date the notice was 
        received by the
designated
successor or any other 
        person entitled to notice, the designee or other
person 
        may file with the Board a written protest against the 
        proposed action.


            When a protest has been timely filed, the Board 
        shall enter an
order,
fixing a date (within 60 days of 
        the date of the order), time,
and place of a hearing on 
        the protest, required under Sections 12 and 29
of this 
        Act, and send by certified mail, return receipt 
        requested, a copy of
the order to the franchiser that 
        filed the notice of intention of the
proposed action 
        and to the protesting designee or such other person.


            The manufacturer shall have the burden of proof to 
        establish that good
cause exists to refuse to honor the 
        succession and discontinue the existing
franchise 
        agreement.  The determination whether good cause exists 
        to refuse to
honor the succession shall be made by the 
        Board under subdivision (B) of this
paragraph (10).  The 
        manufacturer shall not refuse to honor the succession 
        or
discontinue the existing franchise agreement before 
        the hearing process is
concluded as prescribed by this 
        Act, and thereafter if the Board determines
that it has 
        failed to meet its burden of proof and that good cause 
        does not
exist to refuse to honor the succession and 
        discontinue the existing
franchise agreement.


            (B) No manufacturer shall impose any conditions 
        upon honoring the
succession and continuing the 
        existing franchise agreement with the designated

        successor other than that the franchisee has 
        designated a successor to the
ownership or management 
        control under the succession provisions of the

        franchise, or that the designated successor is of good 
        moral character or meets
the reasonable capital 
        standards and, with consideration given to the volume 
        of
sales and service of the dealership, uniformly 
        applied minimum business
experience standards in the 
        market area;


        (11) to prevent or refuse to approve a proposal to 
    establish a successor
franchise at a location previously 
    approved by the franchiser when submitted
with the 
    voluntary termination by the existing franchisee unless 
    the successor
franchisee would not otherwise qualify for a 
    new motor vehicle dealer's
license under the Illinois 
    Vehicle Code or unless the franchiser, having
the burden of 
    proof, proves that such proposed successor is not of good

    moral character or does not meet the franchiser's existing 
    and reasonable
capital standards and, with consideration 
    given to the volume of sales and
service of the dealership, 
    uniformly applied minimum business experience
standards in 
    the market area. However, when such a rejection
of a 
    proposal is made, the manufacturer shall give written 
    notice of its
reasons to the franchisee within 60 days of 
    receipt by the manufacturer
of the proposal.  However, 
    nothing herein shall be construed
to prevent a franchiser 
    from implementing affirmative action programs providing

    business opportunities for minorities, or from complying 
    with applicable
federal, State or local law;


        (12) to prevent or refuse to grant a franchise to a 
    person because such
person owns, has investment in or 
    participates in the management of or holds
a franchise for 
    the sale of another make or line of motor vehicles within
7 
    miles of the proposed franchise location in a county having 
    a population
of more than 300,000 persons, or within 12 
    miles of the proposed franchise
location in a county having 
    a population of less than 300,000
persons; or


        (13) to prevent or attempt to prevent any new motor 
    vehicle dealer
from establishing any additional motor 
    vehicle dealership or other facility
limited to the sale of 
    factory repurchase vehicles or late model vehicles
or 
    otherwise offering for sale factory repurchase vehicles of 
    the same line
make at an existing franchise by failing to 
    make
available any contract, agreement or other 
    arrangement which is made
available or otherwise offered to 
    any person.

    (f) It is deemed a violation for a manufacturer, a 
distributor, a wholesaler
wholesale,
a distributor
branch or 
division, a factory branch or division, or a wholesale branch 
or
division, or
officer, agent, broker, shareholder, except a 
shareholder of 1% or less of the
outstanding
shares of any 
class of securities of a manufacturer, distributor, or 
wholesaler
which is a
publicly traded corporation, or other 
representative, directly or indirectly,
to own or
operate a 
place of business as a motor vehicle franchisee or motor 
vehicle
financing
affiliate, except that, this subsection 
shall not prohibit:
        (1) the ownership or
operation of a
place of business 
    by a manufacturer, distributor, or wholesaler for a period,

    not to exceed
18 months, during the transition from one 
    motor vehicle franchisee to another;
or
        (2) the
investment in a motor vehicle franchisee by a 
    manufacturer, distributor, or
wholesaler if
the investment 
    is for the sole purpose of enabling a partner or 
    shareholder in
that motor
vehicle franchisee to acquire an 
    interest in that motor vehicle franchisee and
that partner

    or shareholder is not otherwise employed by or associated 
    with the
manufacturer,
distributor, or wholesaler and 
    would not otherwise have the requisite capital
investment

    funds to invest in the motor vehicle franchisee, and has 
    the right to purchase
the entire
equity interest of the 
    manufacturer, distributor, or wholesaler in the motor

    vehicle
franchisee within a reasonable period of time not 
    to exceed 5 years; or .

        (3) the ownership or operation of a place of business 
    by a manufacturer that manufactures only diesel engines for 
    installation in trucks having a gross vehicle weight rating 
    of more than 16,000 pounds that are required to be 
    registered under the Illinois Vehicle Code, provided that:
            (A) the manufacturer does not otherwise 
        manufacture, distribute, or sell motor vehicles as 
        defined under Section 1-217 of the Illinois Vehicle 
        Code;
            (B) the manufacturer owned a place of business and 
        it was in operation as of January 1, 2016;
            (C) the manufacturer complies with all obligations 
        owed to dealers that are not owned, operated, or 
        controlled by the manufacturer, including, but not 
        limited to those obligations arising pursuant to 
        Section 6;
            (D) to further avoid any acts or practices, the 
        effect of which may be to lessen or eliminate 
        competition, the manufacturer provides to dealers on 
        substantially equal terms access to all support for 
        completing repairs, including, but not limited to, 
        parts and assemblies, training, and technical service 
        bulletins, and other information concerning repairs 
        that the manufacturer provides to facilities that are 
        owned, operated, or controlled by the manufacturer; 
        and
            (E) the manufacturer does not require that 
        warranty repair work be performed by a 
        manufacturer-owned repair facility and the 
        manufacturer provides any dealer that has an agreement 
        with the manufacturer to sell and perform warranty 
        repairs on the manufacturer's engines the opportunity 
        to perform warranty repairs on those engines, 
        regardless of whether the dealer sold the truck into 
        which the engine was installed. 
    (g) Notwithstanding the terms, provisions, or conditions 
of any agreement or
waiver, it shall be deemed a violation for 
a manufacturer, a distributor,
a wholesaler, a distributor 
branch or division, a factory branch or division,
or a 
wholesale branch or division, or officer, agent or other 
representative
thereof, to directly or indirectly condition 
the awarding of a franchise to a
prospective new motor vehicle 
dealer, the addition of a line make or
franchise to an existing 
dealer, the renewal of a franchise of an existing
dealer, the 
approval of the relocation of an existing dealer's facility, or 
the
approval of the sale or transfer of the ownership of a 
franchise on the
willingness of a dealer, proposed new dealer, 
or owner of an interest in the
dealership facility to enter 
into a site control agreement or exclusive use
agreement unless 
separate and reasonable consideration was offered and accepted 
for that agreement.
    For purposes of this subsection (g), the terms "site 
control
agreement" and "exclusive use agreement" include any 
agreement that has
the effect of either (i) requiring that the 
dealer establish or maintain
exclusive dealership facilities; 
or (ii) restricting the ability of the dealer, or
the ability 
of the dealer's lessor in the event the dealership facility is 
being
leased, to transfer, sell, lease, or change the use of 
the dealership premises,
whether by sublease, lease, 
collateral pledge of lease, or other similar agreement. "Site 
control agreement" and "exclusive use agreement" also include a 
manufacturer restricting the ability of a dealer to transfer, 
sell, or lease the dealership premises by right of first 
refusal to purchase or lease, option to purchase, or option to 
lease if the transfer, sale, or lease of the dealership 
premises is to a person who is an immediate family member of 
the dealer. For the purposes of this subsection (g), "immediate 
family member" means a spouse, parent, son, daughter, 
son-in-law, daughter-in-law, brother, and sister.
    If a manufacturer exercises any right of first refusal to 
purchase or lease or option to purchase or lease with regard to 
a transfer, sale, or lease of the dealership premises to a 
person who is not an immediate family member of the dealer, 
then (1) within 60 days from the receipt of the completed 
application forms generally utilized by a manufacturer to 
conduct its review and a copy of all agreements regarding the 
proposed transfer, the manufacturer must notify the dealer of 
its intent to exercise the right of first refusal to purchase 
or lease or option to purchase or lease and (2) the exercise of 
the right of first refusal to purchase or lease or option to 
purchase or lease must result in the dealer receiving 
consideration, terms, and conditions that either are the same 
as or greater than that which they have contracted to receive 
in connection with the proposed transfer, sale, or lease of the 
dealership premises. 
    Any provision
contained in any agreement entered into on or 
after the effective date of this amendatory Act of the 96th 
General Assembly that is inconsistent with the provisions of 
this subsection (g) shall be
voidable at the election of the 
affected dealer, prospective dealer, or owner
of an interest in 
the dealership facility. 
    (h) For purposes of this subsection:
    "Successor manufacturer" means any motor vehicle 
manufacturer that, on or after January 1, 2009, acquires, 
succeeds to, or
assumes any part of the business of another 
manufacturer, referred to as the
"predecessor manufacturer", 
as the result of any of the following:
        (i) A change in ownership, operation, or control of the 
    predecessor
manufacturer by sale or transfer of assets, 
    corporate stock or other
equity interest, assignment, 
    merger, consolidation, combination, joint
venture, 
    redemption, court-approved sale, operation of law or

    otherwise. 
        (ii) The termination, suspension, or cessation of a 
    part or all of the
business operations of the predecessor 
    manufacturer.
        (iii) The discontinuance of the sale of the product 
    line.
        (iv) A change in distribution system by the predecessor 
    manufacturer,
whether through a change in distributor or 
    the predecessor
manufacturer's decision to cease 
    conducting business through a
distributor altogether. 
    "Former Franchisee" means a new motor vehicle dealer that 
has entered into a franchise with a predecessor manufacturer 
and that has either:
        (i) entered into a termination agreement or deferred 
    termination
agreement with a predecessor or successor 
    manufacturer related to
such franchise; or
        (ii) has had such franchise canceled, terminated, 
    nonrenewed,
noncontinued, rejected, nonassumed, or 
    otherwise ended. 
    For a period of 3 years from: (i) the date that a successor 
manufacturer acquires, succeeds to, or assumes any part of the 
business of a predecessor manufacturer; (ii) the last day that 
a former franchisee is authorized to remain in business as a 
franchised dealer with respect to a particular franchise under 
a termination agreement or deferred termination agreement with 
a predecessor or successor manufacturer; (iii) the last day 
that a former franchisee that was cancelled, terminated, 
nonrenewed, noncontinued, rejected, nonassumed, or otherwise 
ended by a predecessor or successor manufacturer is authorized 
to remain in business as a franchised dealer with respect to a 
particular franchise; or (iv) the effective date of this 
amendatory Act of the 96th General Assembly, whichever is 
latest, it shall be unlawful for such successor manufacturer to 
enter into a same line make franchise with any
person or to 
permit the relocation of any existing same line
make franchise, 
for a line make of the predecessor manufacturer that would be 
located or
relocated within the relevant market area of a 
former franchisee who owned or leased a
dealership facility in 
that relevant market area without first offering the additional 
or relocated
franchise to the former franchisee, or the 
designated successor of such former franchisee in the
event the 
former franchisee is deceased or a person with a disability, at 
no cost and without any requirements or
restrictions other than 
those imposed generally on the manufacturer's other 
franchisees at that
time, unless one of the following applies: 
        (1) As a result of the former franchisee's 
    cancellation, termination,
noncontinuance, or nonrenewal 
    of the franchise, the predecessor
manufacturer had 
    consolidated the line make with another of its line makes

    for which the predecessor manufacturer had a franchisee 
    with a then-existing
dealership facility located within 
    that relevant market area.
        (2) The successor manufacturer has paid the former 
    franchisee, or the
designated successor of such former 
    franchisee in the event the former
franchisee is deceased 
    or a person with a disability, the fair market  value of the 
    former
franchisee's franchise on (i) the date the 
    franchisor announces the action which results in the 
    termination, cancellation, or nonrenewal; or (ii) the date 
    the action which results in termination, cancellation, or 
    nonrenewal first became general knowledge; or (iii) the day 
    12 months prior to the date on which the notice of 
    termination, cancellation, or nonrenewal is issued, 
    whichever amount is higher. Payment is due within 90 days 
    of the effective date of the termination, cancellation, or 
    nonrenewal. If the termination, cancellation, or 
    nonrenewal is due to a manufacturer's change in 
    distributors, the manufacturer may avoid paying fair 
    market value to the dealer if the new distributor or the 
    manufacturer offers the dealer a franchise agreement with 
    terms acceptable to the dealer.
        (3) The successor manufacturer proves that it would 
    have had good cause to terminate the franchise agreement of 
    the former franchisee, or the successor of the former 
    franchisee under item (e)(10) in the event that the former 
    franchisee is deceased or a person with a disability. The 
    determination of whether the successor manufacturer would 
    have had good cause to terminate the franchise agreement of 
    the former franchisee, or the successor of the former 
    franchisee, shall be made by the Board under subsection (d) 
    of Section 12. A successor manufacturer that seeks to 
    assert that it would have had good cause to terminate a 
    former franchisee, or the successor of the former 
    franchisee, must file a petition seeking a hearing on this 
    issue before the Board and shall have the burden of proving 
    that it would have had good cause to terminate the former 
    franchisee or the successor of the former franchisee. No 
    successor dealer, other than the former franchisee, may be 
    appointed or franchised by the successor manufacturer 
    within the relevant market area of the former franchisee 
    until the Board has held a hearing and rendered a 
    determination on the issue of whether the successor 
    manufacturer would have had good cause to terminate the 
    former franchisee. 
    In the event that a successor manufacturer attempts to 
enter into a same line make franchise with any person or to 
permit the relocation of any existing line make franchise under 
this subsection (h) at a location that is within the relevant 
market area of 2 or more former franchisees, then the successor 
manufacturer may not offer it to any person other than one of 
those former franchisees unless the successor manufacturer can 
prove that at least one of the 3 exceptions in items (1), (2), 
and (3) of this subsection (h) applies to each of those former 
franchisees. 
(Source: P.A. 99-143, eff. 7-27-15.)

 

    Section 99. Effective date. This Act takes effect upon 
becoming law.