[ Home ] [ ILCS ] [ Search ] [ Bottom ]
[ Other General Assemblies ]
Public Act 91-0701
HB3037 Enrolled LRB9110146STsb
AN ACT to amend the Motor Vehicle Franchise Act by
changing Section 4.
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.
Good cause shall exist to cancel, terminate or
fail to offer a renewal or replacement franchise or
selling agreement to all franchisees of a line make
if the manufacturer permanently discontinues the
manufacture or assembly of motor vehicles of such
line make.
(E) The manufacturer may not cancel or
terminate, or fail to extend or renew a franchise or
selling agreement or change or modify the
obligations of the franchisee as a condition to
offering a renewal, replacement, or succeeding
franchise or selling agreement before the hearing
process is concluded as prescribed by this Act, and
thereafter, if the Board determines that the
manufacturer has failed to meet its burden of proof
and that good cause does not exist to allow the
proposed action; or
(7) notwithstanding the terms of any franchise
agreement, to fail to indemnify and hold harmless its
franchised dealers against any judgment or settlement for
damages, including, but not limited to, court costs,
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.
(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.
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 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.
When a protest has been timely filed, the Board
shall enter an order fixing a date (within 60 days of the
date of the order), time, and place of a hearing on the
protest, required under Sections 12 and 29 of this Act,
and send by certified or registered mail, return receipt
requested, a copy of the order to the manufacturer that
filed the notice of intention to grant or establish the
proposed additional or relocated franchise and to the
protesting dealer or dealers of the same line make whose
relevant market area includes the proposed location of
the additional or relocated franchise.
When more than one protest is filed against the
grant or establishment of the additional or relocated
franchise of the same line make, the Board may
consolidate the hearings to expedite disposition of the
matter. The manufacturer shall have the burden of proof
to establish that good cause exists to allow the grant or
establishment of the additional or relocated franchise.
The manufacturer may not grant or establish the
additional franchise or relocate the existing franchise
before the hearing process is concluded as prescribed by
this Act, and thereafter if the Board determines that the
manufacturer has failed to meet its burden of proof and
that good cause does not exist to allow the grant or
establishment of the additional franchise or relocation
of the existing franchise.
The determination whether good cause exists for
allowing the grant or establishment of an additional
franchise or relocated existing franchise, shall be made
by the Board under subsection (c) of Section 12 of this
Act. If the manufacturer seeks to enter into a contract,
agreement or other arrangement with any person,
establishing any additional motor vehicle dealership or
other facility, limited to the sale of factory repurchase
vehicles or late model vehicles, then the manufacturer
shall follow the notice procedures set forth in this
Section and the determination whether good cause exists
for allowing the proposed agreement shall be made by the
Board under subsection (c) of Section 12, with the
manufacturer having the burden of proof.
A. (Blank).
B. For the purposes of this Section,
appointment of a successor motor vehicle dealer at
the same location as its predecessor, or within 2
miles of such location, or the relocation of an
existing dealer or franchise within 2 miles of the
relocating dealer's or franchisee's existing
location, shall not be construed as a grant,
establishment or the entering into of an additional
franchise or selling agreement, or a relocation of
an existing franchise. The reopening of a motor
vehicle dealership that has not been in operation
for 18 months or more shall be deemed the grant of
an additional franchise or selling agreement.
C. This Section does not apply to the
relocation of an existing dealership or franchise in
a county having a population of more than 300,000
persons when the new location is within the dealer's
current relevant market area, provided the new
location is more than 7 miles from the nearest
dealer of the same line make or is further away from
the nearest dealer of the same line make. This
Section does not apply to the relocation of an
existing dealership or franchise in a county having
a population of less than 300,000 persons when the
new location is within the dealer's current relevant
market area, provided the new location is more than
12 miles from the nearest dealer of the same line
make or is further away from the nearest dealer of
the same line make. A dealer that would be farther
away from the new location of an existing dealership
or franchise of the same line make after a
relocation may not file a written protest against
the relocation with the Motor Vehicle Review Board.
D. Nothing in this Section shall be construed
to prevent a franchiser from implementing
affirmative action programs providing business
opportunities for minorities or from complying with
applicable federal, State or local law;
(9) to require a motor vehicle dealer to assent to
a release, assignment, novation, waiver or estoppel which
would relieve any person from liability imposed by this
Act;
(10) to prevent or refuse to give effect to the
succession to the ownership or management control of a
dealership by any legatee under the will of a dealer or
to an heir under the laws of descent and distribution of
this State unless the franchisee has designated a
successor to the ownership or management control under
the succession provisions of the franchise. Unless the
franchiser, having the burden of proof, proves that the
successor is a person who is not of good moral character
or does not meet the franchiser's existing and reasonable
capital standards and, with consideration given to the
volume of sales and service of the dealership, uniformly
applied minimum business experience standards in the
market area, any designated successor of a dealer or
franchisee may succeed to the ownership or management
control of a dealership under the existing franchise if:
(i) The designated successor gives the
franchiser written notice by certified mail,
return receipt requested, of his or her
intention to succeed to the ownership of the
dealer within 60 days of the dealer's death or
incapacity; and
(ii) The designated successor agrees to
be bound by all the terms and conditions of the
existing franchise.
Notwithstanding the foregoing, in the event the
motor vehicle dealer or franchisee and manufacturer have
duly executed an agreement concerning succession rights
prior to the dealer's death or incapacitation, the
agreement shall be observed.
(A) If the franchiser intends to refuse to
honor the successor to the ownership of a deceased
or incapacitated dealer or franchisee under an
existing franchise agreement, the franchiser shall
send a letter by certified mail, return receipt
requested, to the designated successor within 60
days from receipt of a proposal advising of its
intent to refuse to honor the succession and to
discontinue the existing franchise agreement and
shall state that the designated successor only has
30 days from the receipt of the notice to file with
the Motor Vehicle Review Board a written protest
against the proposed action. The notice shall set
forth the specific grounds for the refusal to honor
the succession and discontinue the existing
franchise agreement.
If notice of refusal is not timely served upon
the designated successor, the franchise agreement
shall continue in effect subject to termination only
as otherwise permitted by paragraph (6) of
subsection (d) of Section 4 of this Act.
Within 30 days from the date the notice was
received by the designated successor or any other
person entitled to notice, the designee or other
person may file with the Board a written protest
against the proposed action.
When a protest has been timely filed, the Board
shall enter an order, fixing a date (within 60 days
of the date of the order), time, and place of a
hearing on the protest, required under Sections 12
and 29 of this Act, and send by certified mail,
return receipt requested, a copy of the order to the
franchiser that filed the notice of intention of the
proposed action and to the protesting designee or
such other person.
The manufacturer shall have the burden of proof
to establish that good cause exists to refuse to
honor the succession and discontinue the existing
franchise agreement. The determination whether good
cause exists to refuse to honor the succession shall
be made by the Board under subdivision (B) of this
paragraph (10). The manufacturer shall not refuse
to honor the succession or discontinue the existing
franchise agreement before the hearing process is
concluded as prescribed by this Act, and thereafter
if the Board determines that it has failed to meet
its burden of proof and that good cause does not
exist to refuse to honor the succession and
discontinue the existing franchise agreement.
(B) No manufacturer shall impose any
conditions upon honoring the succession and
continuing the existing franchise agreement with the
designated successor other than that the franchisee
has designated a successor to the ownership or
management control under the succession provisions
of the franchise, or that the designated successor
is of good moral character or meets the reasonable
capital standards and, with consideration given to
the volume of sales and service of the dealership,
uniformly applied minimum business experience
standards in the market area;
(11) to prevent or refuse to approve a proposal to
establish a successor franchise at a location previously
approved by the franchiser when submitted with the
voluntary termination by the existing franchisee unless
the successor franchisee would not otherwise qualify for
a new motor vehicle dealer's license under the Illinois
Vehicle Code or unless the franchiser, having the burden
of proof, proves that such proposed successor is not of
good moral character or does not meet the franchiser's
existing and reasonable capital standards and, with
consideration given to the volume of sales and service of
the dealership, uniformly applied minimum business
experience standards in the market area. However, when
such a rejection of a proposal is made, the manufacturer
shall give written notice of its reasons to the
franchisee within 60 days of receipt by the manufacturer
of the proposal. However, nothing herein shall be
construed to prevent a franchiser from implementing
affirmative action programs providing business
opportunities for minorities, or from complying with
applicable federal, State or local law;
(12) to prevent or refuse to grant a franchise to a
person because such person owns, has investment in or
participates in the management of or holds a franchise
for the sale of another make or line of motor vehicles
within 7 miles of the proposed franchise location in a
county having a population of more than 300,000 persons,
or within 12 miles of the proposed franchise location in
a county having a population of less than 300,000
persons; or
(13) to prevent or attempt to prevent any new motor
vehicle dealer from establishing any additional motor
vehicle dealership or other facility limited to the sale
of factory repurchase vehicles or late model vehicles or
otherwise offering for sale factory repurchase vehicles
of the same line make at an existing franchise by failing
to make available any contract, agreement or other
arrangement which is made available or otherwise offered
to any person.
(f) It is deemed a violation for a manufacturer, a
distributor, a wholesale, a distributor branch or division, a
factory branch or division, or a wholesale branch or
division, or officer, agent, broker, shareholder, except a
shareholder of 1% or less of the outstanding shares of any
class of securities of a manufacturer, distributor, or
wholesaler which is a publicly traded corporation, or other
representative, directly or indirectly, to own or operate a
place of business as a motor vehicle franchisee or motor
vehicle financing affiliate, except that, this subsection
shall not prohibit the ownership or operation of a place of
business by a manufacturer, distributor, or wholesaler for a
period, not to exceed 18 months, during the transition from
one motor vehicle franchisee to another; or the investment in
a motor vehicle franchisee by a manufacturer, distributor, or
wholesaler if the investment is for the sole purpose of
enabling a partner or shareholder in that motor vehicle
franchisee to acquire an interest in that motor vehicle
franchisee and that partner or shareholder is not otherwise
employed by or associated with the manufacturer, distributor,
or wholesaler and would not otherwise have the requisite
capital investment funds to invest in the motor vehicle
franchisee, and has the right to purchase the entire equity
interest of the manufacturer, distributor, or wholesaler in
the motor vehicle franchisee within a reasonable period of
time not to exceed 5 years.
(Source: P.A. 90-655, eff. 7-30-98; 91-415, eff. 1-1-00;
91-485, eff. 1-1-00; revised 10-19-99.)
Section 99. Effective date. This Act takes effect upon
becoming law.
[ Top ]