State of Illinois
91st General Assembly
Legislation

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[ Introduced ][ Senate Amendment 001 ]

91_SB0217eng

 
SB217 Engrossed                                LRB9101218KSgc

 1        AN ACT concerning motor vehicles.

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

 4        Section  5.   The  Illinois  Vehicle  Code  is amended by
 5    changing Sections 5-100, 5-401.2, 5-402, 5-402.1, and 5-403.1
 6    and adding Section 5-101.1 as follows:

 7        (625 ILCS 5/5-100) (from Ch. 95 1/2, par. 5-100)
 8        Sec.  5-100.  Definitions.   For  the  purposes  of  this
 9    Chapter, the following words shall have the meanings ascribed
10    to them as follows:
11        "Additional place of business" means  a  place  owned  or
12    leased  and  occupied  by  the  dealer  in  addition  to  its
13    established  place  of business, at which the dealer conducts
14    or intends to conduct business on a permanent  or  long  term
15    basis.   The  term does not include an area where an off site
16    sale or exhibition is  conducted.   The  Secretary  of  State
17    shall adopt guidelines for the administration and enforcement
18    of this definition by rule.
19        "Display   exhibition"   means  a  temporary  display  of
20    vehicles by a dealer licensed under Section 5-101  or  5-102,
21    at a location at which no vehicles are offered for sale, that
22    is  conducted  at a place other than the dealer's established
23    and additional places of business.
24        "Established place of business" means the place owned  or
25    leased  and  occupied by any person duly licensed or required
26    to be licensed as a dealer for the  purpose  of  engaging  in
27    selling, buying, bartering, displaying, exchanging or dealing
28    in, on consignment or otherwise, vehicles and their essential
29    parts  and  for  such  other  ancillary  purposes  as  may be
30    permitted by the Secretary by  rule.   It  shall  include  an
31    office  in  which  the dealer's records shall be separate and
 
SB217 Engrossed             -2-                LRB9101218KSgc
 1    distinct from any other business or tenant which  may  occupy
 2    space  in  the  same  building  except as provided in Section
 3    5-101.1.  This  office  shall  not  be  located  in  a  house
 4    trailer, residence, tent, temporary stand, temporary address,
 5    room  or  rooms in a hotel or rooming house, nor the premises
 6    occupied  by  a  single  or  multiple  unit  residence.   The
 7    established place of business of a scrap processor  shall  be
 8    the  fixed  location  where the scrap processor maintains its
 9    principal place of business.  The Secretary of  State  shall,
10    by   rule   and   regulation,   adopt   guidelines   for  the
11    administration and enforcement of this definition,  such  as,
12    but  not  limited  to issues concerning the required hours of
13    operation,  describing  where  vehicles  are  displayed   and
14    offered  for sale, where books and records are maintained and
15    requirements for the fulfillment of warranties.  A dealer may
16    have an additional place of business as  defined  under  this
17    Section.
18        "Motor  vehicle  financing  affiliate"  means  a business
19    organization registered to  do  business  in  Illinois  that,
20    pursuant  to  a written contract with either (1) a single new
21    or used motor vehicle dealer or (2) a single group of new  or
22    used  motor  vehicle  dealers  that  share a common ownership
23    within the group, purchases new or  used  motor  vehicles  on
24    behalf  of  the  dealer  or  group of dealers and then sells,
25    transfers, or assigns those motor vehicles to the  dealer  or
26    group of dealers.  The motor vehicle financing affiliate must
27    be  incorporated  or organized solely to purchase new or used
28    vehicles on behalf of the new or used motor vehicle dealer or
29    group of dealers with which it has contracted, shall not sell
30    motor vehicles at retail, shall perform only  those  business
31    functions  related  to  the  purchasing of motor vehicles and
32    selling, transferring, or assigning those motor  vehicles  to
33    the  dealer or group of dealers.  The motor vehicle financing
34    affiliate must be licensed under the  provisions  of  Section
 
SB217 Engrossed             -3-                LRB9101218KSgc
 1    5-101.1  and  must  not  be  licensed  as a new or used motor
 2    vehicle dealer.
 3        "Off site sale" means the temporary display and  sale  of
 4    vehicles,  for  a  period  of  not  more than 7 calendar days
 5    (excluding Sundays), by a dealer licensed under Section 5-101
 6    or 5-102 at a place other than the dealer's  established  and
 7    additional places of business.
 8        "Relevant market area", for a new vehicle dealer licensed
 9    under  Section  5-101  and for a used vehicle dealer licensed
10    under Section 5-102, means the area within 10  miles  of  the
11    established  or  additional  place  of business of the dealer
12    located in a county with a population of 300,000 or more,  or
13    within  15  miles  if  the  established  place of business is
14    located in a county with a population of less than 300,000.
15        "Trade show exhibition"  means  a  temporary  display  of
16    vehicles,  by  dealers licensed under Section 5-101 or 5-102,
17    or any other person as defined in subsection (c)  of  Section
18    5-102.1,  at  a location at which no vehicles are offered for
19    sale that is conducted at a place  other  than  the  dealer's
20    established  and additional places of business.  In order for
21    a  display  exhibition  to  be  considered   a   trade   show
22    exhibition, it must be participated in by at least 3 dealers,
23    2 of which must be licensed under Section 5-101 or 5-102; and
24    a  trade  show  exhibition  of  new  vehicles  shall  only be
25    participated in by licensed new vehicle dealers at least 2 of
26    which must be licensed under Section 5-101.
27    (Source: P.A. 89-235, eff. 8-4-95; 90-89, eff. 1-1-98.)

28        (625 ILCS 5/5-101.1 new)
29        Sec.  5-101.1.  Motor   vehicle   financing   affiliates;
30    licensing.
31        (a)  In  this  State  no  business  shall  engage  in the
32    business of a motor vehicle  financing  affiliate  without  a
33    license to do so in writing from the Secretary of State.
 
SB217 Engrossed             -4-                LRB9101218KSgc
 1        (b)  An   application   for  a  motor  vehicle  financing
 2    affiliate's license must  be  filed  with  the  Secretary  of
 3    State,  duly  verified  by  oath, on a form prescribed by the
 4    Secretary of State and shall contain all of the following:
 5             (1)  The name and type of business  organization  of
 6        the  applicant  and  the applicant's established place of
 7        business and any additional places of  business  in  this
 8        State.
 9             (2)  The  name  and  address  of the licensed new or
10        used vehicle  dealer  to  which  the  applicant  will  be
11        selling,  transferring,  or  assigning  new or used motor
12        vehicles pursuant to a written contract.   If  more  than
13        one  dealer  is  on  the application, the applicant shall
14        state in writing the basis of common ownership among  the
15        dealers.
16             (3)  A list of the business organization's officers,
17        directors,  members,  and  shareholders  having  a 10% or
18        greater ownership interest in the business, providing the
19        residential address for each person listed.
20             (4)  If  selling,  transferring,  or  assigning  new
21        motor vehicles, the make or makes of new vehicles that it
22        will  sell,  assign,  or  otherwise   transfer   to   the
23        contracting  new  motor  vehicle  dealer  listed  on  the
24        application pursuant to paragraph (2).
25             (5)  The  name  of  each  manufacturer or franchised
26        distributor, if  any,  of  new  vehicles  with  whom  the
27        applicant has contracted for the sale of new vehicles and
28        a  signed  statement from each manufacturer or franchised
29        distributor acknowledging the contract.
30             (6)  A  statement  that  the  applicant   has   been
31        approved for registration under the Retailers' Occupation
32        Tax  Act  by the Department of Revenue.  This requirement
33        does not apply to a  motor  vehicle  financing  affiliate
34        that  is already licensed with the Secretary of State and
 
SB217 Engrossed             -5-                LRB9101218KSgc
 1        is applying for a renewal of its license.
 2             (7)  A statement that  the  applicant  has  complied
 3        with  the appropriate liability insurance requirement and
 4        a Certificate of Insurance that shall not  expire  before
 5        December  31 of the year for which the license was issued
 6        or renewed with a minimum liability coverage of  $100,000
 7        for  the  bodily  injury or death of any person, $300,000
 8        for the bodily injury or death of 2 or  more  persons  in
 9        any  one  accident,  and  $50,000 for damage to property.
10        The  expiration  of  the  insurance  policy   shall   not
11        terminate  the  liability under the policy arising during
12        the period for which the policy was filed.   Trailer  and
13        mobile  home  dealers are exempt from the requirements of
14        this paragraph.  A motor vehicle financing  affiliate  is
15        exempt  from  the requirements of this paragraph if it is
16        covered by the insurance policy of the new or used dealer
17        listed on the application pursuant to paragraph (2).
18             (8)  A license fee of  $1,000  for  the  applicant's
19        established   place   of   business  and  $250  for  each
20        additional place  of  business,  if  any,  to  which  the
21        application pertains. However, if the application is made
22        after  June 15 of any year, the license fee shall be $500
23        for the applicant's established  place  of  business  and
24        $125  for  each  additional place of business, if any, to
25        which the application pertains.  These license fees shall
26        be returnable only in the event that the  application  is
27        denied by the Secretary of State.
28             (9)  A  statement  incorporating the requirements of
29        paragraphs 8 and 9 of subsection (b) of Section 5-101.
30             (10)  Any other information concerning the  business
31        of the applicant as the Secretary of State may prescribe.
32             (11)  A  statement  that  the  applicant understands
33        Chapter 1 through Chapter 5 of this Code.
34        (c)  Any change which  renders  no  longer  accurate  any
 
SB217 Engrossed             -6-                LRB9101218KSgc
 1    information  contained in any application for a motor vehicle
 2    financing affiliate's license shall be amended within 30 days
 3    after the occurrence of the change on a  form  prescribed  by
 4    the  Secretary  of State, accompanied by an amendatory fee of
 5    $2.
 6        (d)  If a  new  vehicle  dealer  is  not  listed  on  the
 7    application, pursuant to paragraph (2) of subsection (b), the
 8    motor vehicle financing affiliate shall not receive, possess,
 9    or  transfer  any new vehicle.  If a new motor vehicle dealer
10    is listed on the application, pursuant to  paragraph  (2)  of
11    subsection (b), the new motor vehicle dealer can only receive
12    those new cars it is permitted to receive under its franchise
13    agreement.   If  both a new and used motor vehicle dealer are
14    listed on the  application,  pursuant  to  paragraph  (2)  of
15    subsection  (b),  only  the  new  motor  vehicle  dealer  may
16    receive  new  motor  vehicles.   If  a  used motor vehicle is
17    listed on the  application,  pursuant  to  paragraph  (2)  of
18    subsection  (b),   the  used  motor  vehicle dealer shall not
19    receive any new motor vehicles.
20        (e)  The  applicant  and  dealer  provided  pursuant   to
21    paragraph   (2)   of   subsection   (b)   must   be  business
22    organizations registered to  conduct  business  in  Illinois.
23    Three-fourths  of  the  dealer's  board  of directors must be
24    members of the motor vehicle financing affiliate's  board  of
25    directors, if applicable.
26        (f)  Unless  otherwise  provided  in  this  Chapter 5, no
27    business organization registered to do business  in  Illinois
28    shall  be  licensed  as  a  motor vehicle financing affiliate
29    unless:
30             (1)  The motor  vehicle  financing  affiliate  shall
31        only  sell,  transfer,  or  assign  motor vehicles to the
32        licensed new or used dealer  listed  on  the  application
33        pursuant to paragraph (2) of subsection (b).
34             (2)  The  motor  vehicle  financing affiliate sells,
 
SB217 Engrossed             -7-                LRB9101218KSgc
 1        transfers, or assigns to the  new  motor  vehicle  dealer
 2        listed  on  the application, if any, only those new motor
 3        vehicles  the  motor  vehicle  financing  affiliate   has
 4        received under the contract set forth in paragraph (5) of
 5        subsection (b).
 6             (3)  Any  new  vehicle  dealer  listed  pursuant  to
 7        paragraph (2) of subsection (b) has a franchise agreement
 8        that  permits  the  dealer to receive motor vehicles from
 9        the motor vehicle franchise affiliate.
10             (4)  The new or used motor vehicle dealer listed  on
11        the  application  pursuant to paragraph (2) of subsection
12        (b) has one established place of business or supplemental
13        places of business as referenced in subsection (g).
14        (g)  The Secretary of State shall,  within  a  reasonable
15    time after receipt, examine an application submitted pursuant
16    to  this  Section  and,  unless  it  is  determined  that the
17    application does not conform with the  requirements  of  this
18    Section or that grounds exist for a denial of the application
19    under  Section  5-501,  grant  the  applicant a motor vehicle
20    financing affiliate license in writing  for  the  applicant's
21    established  place  of business and a supplemental license in
22    writing for each additional  place  of  business  in  a  form
23    prescribed  by  the Secretary, which shall include all of the
24    following:
25             (1)  The name of the business licensed;
26             (2)  The  name  and   address   of   its   officers,
27        directors, or members, as applicable;
28             (3)  In   the  case  of  an  original  license,  the
29        established place of business of the licensee; and
30             (4)  If  applicable,  the  make  or  makes  of   new
31        vehicles  which  the  licensee is licensed to sell to the
32        new  motor  vehicle  dealer  listed  on  the  application
33        pursuant to paragraph (2) of subsection (b).
34        (h)  The appropriate instrument evidencing the license or
 
SB217 Engrossed             -8-                LRB9101218KSgc
 1    a certified copy, provided by the Secretary of  State,  shall
 2    be  kept  posted  conspicuously  in  the established place of
 3    business of the licensee.
 4        (i)  Except as provided  in  subsection  (h),  all  motor
 5    vehicle  financing  affiliate's  licenses  granted under this
 6    Section shall expired by operation of law on December  31  of
 7    the  calendar year for which they are granted, unless revoked
 8    or canceled at an earlier date pursuant to Section 5-501.
 9        (j)  A motor vehicle financing affiliate's license may be
10    renewed upon application and payment  of  the  required  fee.
11    However,  when  an application for renewal of a motor vehicle
12    financing affiliate's license is made  during  the  month  of
13    December,  the  effective license shall remain in force until
14    the application is granted or  denied  by  the  Secretary  of
15    State.
16        (k)  The contract a motor vehicle financing affiliate has
17    with a manufacturer or franchised distributor, as provided in
18    paragraph  (5)  of  subsection  (b),  shall  only  permit the
19    applicant to sell, transfer, or assign new motor vehicles  to
20    the  new  motor  vehicle  dealer  listed  on  the application
21    pursuant to paragraph (2) of subsection (b).    The  contract
22    shall  specifically  prohibit  the  motor  vehicle  financing
23    affiliate  from  selling  motor  vehicles  at  retail.   This
24    contract  shall not be considered the granting of a franchise
25    as defined in Section 2 of the Motor Vehicle Franchise Act.
26        (l)  When purchasing of a motor vehicle by a new or  used
27    motor vehicle dealer, all persons licensed as a motor vehicle
28    financing  affiliate  are  required  to  furnish  all  of the
29    following:
30             (1)  For a new vehicle, a  manufacturer's  statement
31        of  origin  properly  assigned  to the purchasing dealer.
32        For a used  vehicle,  a  certificate  of  title  properly
33        assigned to the purchasing dealer.
34             (2)  A   statement  verified  under  oath  that  all
 
SB217 Engrossed             -9-                LRB9101218KSgc
 1        identifying numbers on the vehicle agree  with  those  on
 2        the  certificate  of title or manufacturer's statement of
 3        origin.
 4             (3)  A bill of sale properly executed on  behalf  of
 5        the purchasing dealer.
 6             (4)  A   copy  of  the  Uniform  Invoice-transaction
 7        report pursuant to Section 5-402.
 8             (5)  In the case of a rebuilt vehicle, a copy of the
 9        Disclosure of Rebuilt Vehicle Status pursuant to  Section
10        5-104.3.
11             (6)  In  the  case of a vehicle for which a warranty
12        has been reinstated, a copy of the warranty.
13        (m)  The motor vehicle financing affiliate shall use  the
14    established  and supplemental place or places of business the
15    new or used vehicle dealer listed on the application pursuant
16    to paragraph (2) of subsection (b)  as  its  established  and
17    supplemental place  or places of business.
18        (n)  The motor vehicle financing affiliate shall keep all
19    books  and  records  required by this Code with the books and
20    records of the new or  used  vehicle  dealer  listed  on  the
21    application pursuant to paragraph (2) of subsection (b).  The
22    motor  vehicle  financing  affiliate  may  use  the books and
23    records of the new or used motor vehicle dealer listed on the
24    application pursuant to paragraph (2) of subsection (b).
25        (o)  Under  no  circumstances  shall  a   motor   vehicle
26    financing  affiliate  sell, transfer, or assign a new vehicle
27    to any place of business  of  a  new  motor  vehicle  dealer,
28    unless  that place of business is licensed under this Chapter
29    to sell, assign, or otherwise transfer the make  of  the  new
30    motor vehicle transferred.
31        (p)  All  moneys  received  by  the Secretary of State as
32    license fees under this Section shall be deposited  into  the
33    Motor  Vehicle  Review  Board  Fund  and  shall  be  used  to
34    administer  the  Motor  Vehicle  Review Board under the Motor
 
SB217 Engrossed             -10-               LRB9101218KSgc
 1    Vehicle Franchise Act.
 2        (q)  Except as otherwise  provided  in  this  Section,  a
 3    motor  vehicle  financing  affiliate  shall  comply  with all
 4    provisions of this Code.

 5        (625 ILCS 5/5-401.2) (from Ch. 95 1/2, par. 5-401.2)
 6        Sec. 5-401.2.  Licensees required  to  keep  records  and
 7    make inspections.
 8        (a)  Every  person  licensed  or  required to be licensed
 9    under Section 5-101, 5-101.1, 5-102, 5-301  or 5-302 of  this
10    Code, shall, with the exception of scrap processors, maintain
11    for  3 years, in a form as the Secretary of State may by rule
12    or  regulation  prescribe,  at  his  established   place   of
13    business, additional place of business, or principal place of
14    business  if  licensed  under  Section  5-302,  the following
15    records  relating  to  the  acquisition  or  disposition   of
16    vehicles  and  their essential parts possessed in this State,
17    brought into this State  from  another  state,  territory  or
18    country,  or  sold  or  transferred to another person in this
19    State or in another state, territory, or country.
20        (1)  the following records  pertaining  to  new  or  used
21    vehicles shall be kept:
22                  (A)  the  year, make, model, style and color of
23             the vehicle;
24                  (B)  the        vehicle's        manufacturer's
25             identification  number  or,   if   applicable,   the
26             Secretary  of  State or Illinois Department of State
27             Police identification number;
28                  (C)  the date of acquisition of the vehicle;
29                  (D)  the name and address of  the  person  from
30             whom the vehicle was acquired and, if that person is
31             a   dealer,  the  Illinois  or  out-of-state  dealer
32             license number of such person;
33                  (E)  the signature of  the  person  making  the
 
SB217 Engrossed             -11-               LRB9101218KSgc
 1             inspection  of  a  used  vehicle  as  required under
 2             subsection (d) of this Section, if applicable;
 3                  (F)  the purchase  price  of  the  vehicle,  if
 4             applicable;
 5                  (G)  the   date   of  the  disposition  of  the
 6             vehicle;
 7                  (H)  the name and address of the person to whom
 8             any vehicle was disposed, and if that  person  is  a
 9             dealer,   the   Illinois  or  out-of-State  dealer's
10             license number of that dealer;
11                  (I)  the uniform invoice number reflecting  the
12             disposition of the vehicle, if applicable; and
13                  (J)  The   sale   price   of  the  vehicle,  if
14             applicable.
15        (2) (A)  the  following  records   pertaining   to   used
16    essential  parts  other than quarter panels and transmissions
17    of vehicles of the first division shall be kept:
18                       (i)  the year, make, model, color and type
19                  of such part;
20                       (ii)  the     vehicle's     manufacturer's
21                  identification number, derivative  number,  or,
22                  if   applicable,  the  Secretary  of  State  or
23                  Illinois    Department    of    State    Police
24                  identification number of such part;
25                       (iii)  the date of the acquisition of each
26                  part;
27                       (iv)  the name and address of  the  person
28                  from  whom  the  part was acquired and, if that
29                  person   is   a   dealer,   the   Illinois   or
30                  out-of-state  dealer  license  number  of  such
31                  person; if the essential part being acquired is
32                  from a person other than a dealer, the licensee
33                  shall verify and record that person's  identity
34                  by recording the identification numbers from at
 
SB217 Engrossed             -12-               LRB9101218KSgc
 1                  least  two  sources  of  identification, one of
 2                  which shall  be  a  drivers  license  or  State
 3                  identification card;
 4                       (v)  the   uniform   invoice   number   or
 5                  out-of-state bill of sale number reflecting the
 6                  acquisition of such part;
 7                       (vi)  the  stock  number  assigned  to the
 8                  essential part by the licensee, if applicable;
 9                       (vii)  the date of the disposition of such
10                  part;
11                       (viii)  the name and address of the person
12                  to whom such part was disposed of and, if  that
13                  person   is   a   dealer,   the   Illinois   or
14                  out-of-state  dealer  license  number  of  that
15                  person;
16                       (ix)  the     uniform    invoice    number
17                  reflecting the disposition of such part.
18             (B)  Inspections of all  essential  parts  shall  be
19        conducted in accordance with Section 5-402.1.
20             (C)  A   separate   entry   containing  all  of  the
21        information required to be recorded in  subparagraph  (A)
22        of  paragraph (2) of subsection (a) of this Section shall
23        be made  for  each  separate  essential  part.   Separate
24        entries  shall be made regardless of whether the part was
25        a large purchase acquisition.  In  addition,  a  separate
26        entry  shall be made for each part acquired for immediate
27        sale or transfer,  or  for  placement  into  the  overall
28        inventory  or stock to be disposed of at a later time, or
29        for use on a vehicle to  be  materially  altered  by  the
30        licensee,  or  acquired  for any other purpose or reason.
31        Failure to make a separate entry for each essential  part
32        acquired  or  disposed  of, or a failure to record any of
33        the  specific  information  required   to   be   recorded
34        concerning   the   acquisition  or  disposition  of  each
 
SB217 Engrossed             -13-               LRB9101218KSgc
 1        essential part  as  set  forth  in  subparagraph  (A)  of
 2        paragraph  (2)  of  subsection  (a)  shall  constitute  a
 3        failure to keep records.
 4             (D)  The   vehicle's  manufacturer's  identification
 5        number or Secretary of State or  Illinois  Department  of
 6        State Police identification number for the essential part
 7        shall  be  ascertained  and recorded even if such part is
 8        acquired from a person or  dealer  located  in  a  State,
 9        territory,  or  country  which does not require that such
10        information be recorded.  If the vehicle's manufacturer's
11        identification number or Secretary of State  or  Illinois
12        Department  of  State Police identification number for an
13        essential part cannot be obtained, that part shall not be
14        acquired  by  the  licensee  or  any  of  his  agents  or
15        employees. If such part or parts were physically acquired
16        by the licensee or any of his agents or  employees  while
17        the licensee or agent or employee was outside this State,
18        that licensee or agent or employee was outside the State,
19        that  licensee,  agent  or  employee shall not bring such
20        essential part into this State or cause it to be  brought
21        into  this  State.  The  acquisition or disposition of an
22        essential part by a licensee without the recording of the
23        vehicle  identification  number  or  Secretary  of  State
24        identification number for such part or the transportation
25        into the State by the licensee or his agent  or  employee
26        of  such part or parts shall constitute a failure to keep
27        records.
28             (E)  The records of essential parts required  to  be
29        kept  by  this Section shall apply to all hulks, chassis,
30        frames or cowls, regardless of the age of those essential
31        parts.  The records required to be kept by  this  Section
32        for  essential parts other than hulks, chassis, frames or
33        cowls, shall apply only to those  essential  parts  which
34        are  6  model  years of age or newer.  In determining the
 
SB217 Engrossed             -14-               LRB9101218KSgc
 1        model year of such an essential part it may  be  presumed
 2        that  the identification number of the vehicle from which
 3        the essential part  came  or  the  identification  number
 4        affixed  to  the  essential  part  itself acquired by the
 5        licensee denotes the model year of that  essential  part.
 6        This  presumption,  however, shall not apply if the gross
 7        appearance of the essential part does not  correspond  to
 8        the  year,  make  or  model  of either the identification
 9        number of the vehicle from which the  essential  part  is
10        alleged  to  have come or the identification number which
11        is affixed to the essential part  itself.   To  determine
12        whether  an  essential  part  is  6 years of age or newer
13        within this paragraph, the model year  of  the  essential
14        part  shall be subtracted from the calendar year in which
15        the essential part is acquired  or  disposed  of  by  the
16        licensee.   If  the remainder is 6 or less, the record of
17        the acquisition or disposition  of  that  essential  part
18        shall be kept as required by this Section.
19             (F)  The requirements of paragraph (2) of subsection
20        (a) of this Section shall not apply to the disposition of
21        an  essential  part  other  than  a  cowl  which has been
22        damaged or altered to a state in which it can  no  longer
23        be returned to a usable condition and which is being sold
24        or  transferred to a scrap processor or for delivery to a
25        scrap processor.
26        (3)  the following records for vehicles on which  junking
27    certificates are obtained shall be kept:
28                  (A)  the  year, make, model, style and color of
29             the vehicle;
30                  (B)  the        vehicle's        manufacturer's
31             identification  number  or,   if   applicable,   the
32             Secretary  of  State or Illinois Department of State
33             Police identification number;
34                  (C)  the date the vehicle was acquired;
 
SB217 Engrossed             -15-               LRB9101218KSgc
 1                  (D)  the name and address of  the  person  from
 2             whom the vehicle was acquired and, if that person is
 3             a   dealer,  the  Illinois  or  out-of-state  dealer
 4             license number of that person;
 5                  (E)  the certificate of title number or salvage
 6             certificate number for the vehicle, if applicable;
 7                  (F)  the junking certificate number obtained by
 8             the licensee; this entry shall be  recorded  at  the
 9             close  of  business of the second business day after
10             receiving the junking certificate;
11                  (G)  the name and address of the person to whom
12             the  junking  certificate  has  been  assigned,   if
13             applicable,  and  if  that  person  is a dealer, the
14             Illinois or out-of-state dealer  license  number  of
15             that dealer;
16                  (H)  if  the vehicle or any part of the vehicle
17             is dismantled for its parts to be disposed of in any
18             way, or if such parts are to be used by the licensee
19             to materially alter a vehicle, those essential parts
20             shall be recorded in the record book  for  essential
21             parts  and  the entries required by paragraph (2) of
22             subsection (a) shall be made.
23        (4)  the following records for rebuilt vehicles shall  be
24    kept:
25                  (A)  the  year, make, model, style and color of
26             the vehicle;
27                  (B)  the        vehicle's        manufacturer's
28             identification  number  of  the   vehicle   or,   if
29             applicable,  the  Secretary  of  State  or  Illinois
30             Department of State Police identification number;
31                  (C)  the date the vehicle was acquired;
32                  (D)  the  name  and  address of the person from
33             whom the vehicle was acquired, and if that person is
34             a  dealer,  the  Illinois  or  out-of-state   dealer
 
SB217 Engrossed             -16-               LRB9101218KSgc
 1             license number of that person;
 2                  (E)  the  salvage  certificate  number  for the
 3             vehicle;
 4                  (F)  the  newly  issued  certificate  of  title
 5             number for the vehicle;
 6                  (G)  the date of disposition of the vehicle;
 7                  (H)  the name and address of the person to whom
 8             the vehicle was  disposed,  and  if  a  dealer,  the
 9             Illinois  or  out-of-state  dealer license number of
10             that dealer;
11                  (I)  The sale price of the vehicle.
12        (b)  A failure to make separate entries for each  vehicle
13    acquired,  disposed  of,  or assigned, or a failure to record
14    any of the  specific  information  required  to  be  recorded
15    concerning  the acquisition or disposition of each vehicle as
16    set forth in paragraphs (1), (3) and (4)  of  subsection  (a)
17    shall constitute a failure to keep records.
18        (c)  All entries relating to the acquisition of a vehicle
19    or  essential part required by subsection (a) of this Section
20    shall be recorded no later than the close of business on  the
21    seventh  calendar day following such acquisition. All entries
22    relating to the disposition of a vehicle or an essential part
23    shall be made at  the  time  of  such  disposition.   If  the
24    vehicle  or essential part was disposed of on the same day as
25    its acquisition or the day thereafter, the  entries  relating
26    to  the acquisition of the vehicle or essential part shall be
27    made at the  time  of  the  disposition  of  the  vehicle  or
28    essential part. Failure to make the entries required in or at
29    the   times  prescribed  by  this  subsection  following  the
30    acquisition or disposition of such vehicle or essential  part
31    shall constitute a failure to keep records.
32        (d)  Every  person  licensed  or  required to be licensed
33    shall, before accepting delivery of a used  vehicle,  inspect
34    the  vehicle  to  determine whether the manufacturer's public
 
SB217 Engrossed             -17-               LRB9101218KSgc
 1    vehicle identification number has  been  defaced,  destroyed,
 2    falsified, removed, altered, or tampered with in any way.  If
 3    the   person   making  the  inspection  determines  that  the
 4    manufacturer's public vehicle identification number has  been
 5    altered,  removed,  defaced, destroyed, falsified or tampered
 6    with he shall not acquire  that  vehicle  but  instead  shall
 7    promptly notify law enforcement authorities of his finding.
 8        (e)  The  information  required  to be kept in subsection
 9    (a) of this Section shall be kept in a manner  prescribed  by
10    rule or regulation of the Secretary of State.
11        (f)  Every  person  licensed  or  required to be licensed
12    shall have in his possession a separate certificate of title,
13    salvage  certificate,  junking  certificate,  certificate  of
14    purchase, uniform invoice, out-of-state bill of sale or other
15    acceptable  documentary  evidence  of  his   right   to   the
16    possession of every vehicle or essential part.
17        (g)  Every  person licensed or required to be licensed as
18    a transporter under Section 5-201 shall maintain for 3 years,
19    in such form as  the  Secretary  of  State  may  by  rule  or
20    regulation  prescribe,  at  his principal place of business a
21    record of every vehicle transported by him, including numbers
22    of or other marks of identification thereof,  the  names  and
23    addresses  of  persons  from whom and to whom the vehicle was
24    delivered and the dates of delivery.
25        (h)  No  later  than  15  days  prior  to  going  out  of
26    business, selling the business, or transferring the ownership
27    of the business, the licensee shall notify the  Secretary  of
28    State  that  he  is  going  out  of  business  or  that he is
29    transferring the ownership of the business. Failure to notify
30    under this paragraph  shall  constitute  a  failure  to  keep
31    records.
32        (i)  Any  person  who knowingly fails to keep the records
33    required by this  Section  or  who  knowingly  violates  this
34    Section  shall be guilty of a Class 2 felony.  Each violation
 
SB217 Engrossed             -18-               LRB9101218KSgc
 1    shall constitute  a  separate  and  distinct  offense  and  a
 2    separate  count  may  be  brought  in  the same indictment or
 3    information for each vehicle or  each  essential  part  of  a
 4    vehicle  for  which a record was not kept as required by this
 5    Section.
 6    (Source: P.A. 89-189, eff. 1-1-96; 89-235, eff. 8-4-95.)

 7        (625 ILCS 5/5-402) (from Ch. 95 1/2, par. 5-402)
 8        Sec. 5-402. Use of Department of Revenue Uniform  Invoice
 9    for  vehicle.  Every person licensed as a new vehicle dealer,
10    or as a used vehicle dealer, or as a motor vehicle  financing
11    affiliate  shall issue a Uniform Invoice with respect to each
12    transaction wherein he disposes of  a  vehicle,  except  that
13    where,  in  the  same transaction, a vehicle dealer transfers
14    more than one vehicle  to  another  vehicle  dealer  for  the
15    purpose  of  resale,  such  seller  for  resale may issue one
16    Uniform Invoice to the purchaser covering  all  the  vehicles
17    involved  in  that transaction and may report the transfer of
18    all  the  vehicles  involved  in  that  transaction  to   the
19    Department  on the same Uniform Invoice-transaction reporting
20    return form. Every  person  licensed  as  a  rebuilder  shall
21    likewise  issue  a  Uniform  Invoice  with  respect  to  each
22    transaction  wherein  he  disposes  of  a rebuilt or restored
23    vehicle. Such Uniform Invoice shall be the same  document  as
24    the  transaction reporting return referred to in Section 3 of
25    the Retailers' Occupation Tax Act. Such Uniform Invoice shall
26    contain complete financial details of the transaction in such
27    form as shall be prescribed by  the  Department  of  Revenue.
28    Such  Uniform  Invoice shall include an affidavit by both the
29    seller and  the  buyer  that  any  trade-in  title  has  been
30    properly  assigned  from the buyer to the seller and that all
31    information  on  the  Uniform  Invoice-transaction  reporting
32    return is true and accurate.
33    (Source: P.A. 85-1396.)
 
SB217 Engrossed             -19-               LRB9101218KSgc
 1        (625 ILCS 5/5-402.1) (from Ch. 95 1/2, par. 5-402.1)
 2        Sec. 5-402.1.  Use of Secretary of State Uniform  Invoice
 3    for Essential Parts.
 4        (a)  Except  for  scrap processors, every person licensed
 5    or required to be  licensed  under  Section  5-101,  5-101.1,
 6    5-102  or  5-301  of  this  Code  shall  issue, in a form the
 7    Secretary of State may by rule  or  regulation  prescribe,  a
 8    Uniform  Invoice,  which may also act as a bill of sale, made
 9    out in triplicate with respect to each transaction  in  which
10    he  disposes  of  an essential part other than quarter panels
11    and transmissions of vehicles of the  first  division.   Such
12    Invoice  shall  be made out at the time of the disposition of
13    the essential part.  If  the  licensee  disposes  of  several
14    essential  parts  in  the  same transaction, the licensee may
15    issue  one  Uniform  Invoice  covering  all  essential  parts
16    disposed of in that transaction.
17        (b)  The following information shall be contained on  the
18    Uniform Invoice:
19             (1)  the  business  name, address and dealer license
20        number of the person disposing of the essential part;
21             (2)  the name and address of  the  person  acquiring
22        the  essential  part, and if that person is a dealer, the
23        Illinois or out-of-state dealer license  number  of  that
24        dealer;
25             (3)  the  date  of  the disposition of the essential
26        part;
27             (4)  the year, make, model, color and description of
28        each essential part disposed of by the person;
29             (5)  the   manufacturer's   vehicle   identification
30        number,  Secretary  of  State  identification  number  or
31        Illinois  Department  of  State   Police   identification
32        number,  for  each  essential  part  disposed  of  by the
33        person;
34             (6)  the printed name and legible signature  of  the
 
SB217 Engrossed             -20-               LRB9101218KSgc
 1        person or agent disposing of the essential part; and
 2             (7)  if  the person is a dealer the printed name and
 3        legible signature of the dealer or his agent or  employee
 4        accepting delivery of the essential part.
 5        (c)  Except for scrap processors, and except as set forth
 6    in subsection (d) of this Section, whenever a person licensed
 7    or  required to be licensed by Section 5-101, 5-101.1, 5-102,
 8    or 5-301 accepts delivery of an essential  part,  other  than
 9    quarter  panels  and  transmissions  of vehicles of the first
10    division, that person shall, at the time of the acceptance or
11    delivery, comply with the following procedures:
12             (1)  Before acquiring or accepting delivery  of  any
13        essential  part,  the licensee or his authorized agent or
14        employee shall inspect the part to determine whether  the
15        vehicle   identification   number,   Secretary  of  State
16        identification  number,  Illinois  Department  of   State
17        Police  identification number, or identification plate or
18        sticker attached to or stamped on any part being acquired
19        or  delivered  has  been  removed,  falsified,   altered,
20        defaced, destroyed, or tampered with.  If the licensee or
21        his   agent  or  employee  determines  that  the  vehicle
22        identification number, Secretary of State  identification
23        number,    Illinois    Department    of    State   Police
24        identification   number,    identification    plate    or
25        identification   sticker   containing  an  identification
26        number, or Federal Certificate label of an essential part
27        has been removed, falsified, altered, defaced,  destroyed
28        or  tampered with, the licensee or agent shall not accept
29        or receive that part.
30             If that part was physically acquired by or delivered
31        to a  licensee  or  his  agent  or  employee  while  that
32        licensee,  agent or employee was outside this State, that
33        licensee or  agent  or  employee  shall  not  bring  that
34        essential  part into this State or cause it to be brought
 
SB217 Engrossed             -21-               LRB9101218KSgc
 1        into this State.
 2             (2)  If the person disposing of  or  delivering  the
 3        essential  part to the licensee is a licensed in-state or
 4        out-of-state  dealer,  the  licensee  or  his  agent   or
 5        employee, after inspecting the essential part as required
 6        by  paragraph  (1)  of this subsection (c), shall examine
 7        the Uniform Invoice, or bill of sale, as the case may be,
 8        to ensure that it contains all the  information  required
 9        to be provided by persons disposing of essential parts as
10        set  forth  in  subsection  (b)  of this Section.  If the
11        Uniform Invoice or bill of sale does not contain all  the
12        information  required  to  be listed by subsection (b) of
13        this Section, the dealer disposing of or delivering  such
14        part   or   his  agent  or  employee  shall  record  such
15        additional information or other needed  modifications  on
16        the  Uniform  Invoice  or  bill of sale or, if needed, an
17        attachment thereto.  The dealer or his agent or  employee
18        delivering the essential part shall initial all additions
19        or  modifications  to the Uniform Invoice or bill of sale
20        and legibly print his name at the bottom of each document
21        containing his initials.  If the transaction  involves  a
22        bill  of sale rather than a Uniform Invoice, the licensee
23        or  his  agent  or  employee  accepting  delivery  of  or
24        acquiring the essential part shall affix his printed name
25        and legible signature on the space on the  bill  of  sale
26        provided  for  his signature or, if no space is provided,
27        on the back of the bill of sale.  If the  dealer  or  his
28        agent   or   employee  disposing  of  or  delivering  the
29        essential  part  cannot  or  does  not  provide  all  the
30        information required by subsection (b) of  this  Section,
31        the licensee or his agent or employee shall not accept or
32        receive  any  essential  part  for  which  that  required
33        information  is not provided.  If such essential part for
34        which the information required is not fully provided  was
 
SB217 Engrossed             -22-               LRB9101218KSgc
 1        physically  acquired  while  the licensee or his agent or
 2        employee was outside this  State,  the  licensee  or  his
 3        agent  or  employee  shall  not bring that essential part
 4        into this State or cause  it  to  be  brought  into  this
 5        State.
 6             (3)  If  the  person disposing of the essential part
 7        is not a licensed dealer, the licensee or  his  agent  or
 8        employee  shall,  after  inspecting the essential part as
 9        required by paragraph  (1)  of  subsection  (c)  of  this
10        Section  verify  the  identity of the person disposing of
11        the  essential   part   by   examining   2   sources   of
12        identification,  one  of which shall be either a driver's
13        license or state identification card.   The  licensee  or
14        his  agent  or  employee  shall  then  prepare  a Uniform
15        Invoice  listing  all  the  information  required  to  be
16        provided by subsection (b) of this Section.  In the space
17        on the Uniform Invoice provided for  the  dealer  license
18        number  of the person disposing of the part, the licensee
19        or his agent or employee shall  list  the  numbers  taken
20        from  the  documents  of  identification  provided by the
21        person disposing of the part.  The  person  disposing  of
22        the  part  shall  affix  his  printed  name  and  legible
23        signature  on  the  space on the Uniform Invoice provided
24        for the person disposing of the essential  part  and  the
25        licensee  or  his  agent  or  employee acquiring the part
26        shall affix his printed name and legible signature on the
27        space provided on the  Uniform  Invoice  for  the  person
28        acquiring the essential part.  If the person disposing of
29        the  essential  part  cannot  or does not provide all the
30        information required to be provided by this paragraph, or
31        does not present 2 satisfactory forms of  identification,
32        the  licensee  or his agent or employee shall not acquire
33        that essential part.
34        (d)  If an essential part other than  quarter panels  and
 
SB217 Engrossed             -23-               LRB9101218KSgc
 1    transmissions of vehicles of the first division was delivered
 2    by  a  licensed  commercial  delivery service delivering such
 3    part on behalf of a licensed dealer, the person  required  to
 4    comply  with  subsection  (c) of this Section may conduct the
 5    inspection  of  that  part  required  by  paragraph  (1)   of
 6    subsection (c) and examination of the Uniform Invoice or bill
 7    of  sale  required by paragraph (2) of subsection (c) of this
 8    Section immediately after the acceptance of the part.
 9             (1)  If  the  inspection  of  the   essential   part
10        pursuant  to paragraph (1) of subsection (c) reveals that
11        the vehicle identification  number,  Secretary  of  State
12        identification   number,  Illinois  Department  of  State
13        Police identification  number,  identification  plate  or
14        sticker  containing  an identification number, or Federal
15        Certificate label of an essential part has been  removed,
16        falsified,  altered, defaced, destroyed or tampered with,
17        the licensee or his agent shall immediately  record  such
18        fact  on  the Uniform Invoice or bill of sale, assign the
19        part an inventory or stock number, place  such  inventory
20        or  stock  number  on  both  the  essential  part and the
21        Uniform Invoice or bill of sale, and record the  date  of
22        the inspection of the part on the Uniform Invoice or bill
23        of  sale.  The  licensee  shall,  within  7  days of such
24        inspection, return such part to the dealer from  whom  it
25        was acquired.
26             (2)  If  the  examination  of the Uniform Invoice or
27        bill of sale pursuant to paragraph (2) of subsection  (c)
28        reveals that any of the information required to be listed
29        by  subsection  (b)  of  this  Section  is  missing,  the
30        licensee   or   person  required  to  be  licensed  shall
31        immediately assign a stock or inventory  number  to  such
32        part,  place  such  stock or inventory number on both the
33        essential part and the Uniform Invoice or bill  of  sale,
34        and record the date of examination on the Uniform Invoice
 
SB217 Engrossed             -24-               LRB9101218KSgc
 1        or  bill  of sale.  The licensee or person required to be
 2        licensed shall acquire the information missing  from  the
 3        Uniform  Invoice  or  bill  of  sale within 7 days of the
 4        examination of such Uniform  Invoice  or  bill  of  sale.
 5        Such   information   may   be   received   by   telephone
 6        conversation  with  the  dealer  from  whom  the part was
 7        acquired.  If the dealer provides the missing information
 8        the licensee shall record such information on the Uniform
 9        Invoice or bill of sale along with the name of the person
10        providing  the  information.   If  the  dealer  does  not
11        provide   the    required    information    within    the
12        aforementioned  7  day  period, the licensee shall return
13        the part to that dealer.
14        (e)  Except for scrap processors, all persons licensed or
15    required to be licensed who acquire or dispose  of  essential
16    parts other than quarter panels and transmissions of vehicles
17    of  the  first  division  shall  retain a copy of the Uniform
18    Invoice required to be made by subsections (a), (b)  and  (c)
19    of this Section for a period of 3 years.
20        (f)  Except  for scrap processors, any person licensed or
21    required to be licensed under Sections 5-101, 5-102 or  5-301
22    who knowingly fails to record on a Uniform Invoice any of the
23    information or entries required to be recorded by subsections
24    (a),  (b)  and  (c)  of this Section, or who knowingly places
25    false entries or other misleading information on such Uniform
26    Invoice, or who knowingly fails to retain for 3 years a  copy
27    of  a  Uniform Invoice reflecting transactions required to be
28    recorded by subsections (a), (b) and (c) of this Section,  or
29    who knowingly acquires or disposes of essential parts without
30    receiving, issuing, or executing a Uniform Invoice reflecting
31    that  transaction as required by subsections (a), (b) and (c)
32    of this Section, or who brings or causes to be  brought  into
33    this State essential parts for which the information required
34    to  be  recorded  on  a  Uniform  Invoice  is not recorded as
 
SB217 Engrossed             -25-               LRB9101218KSgc
 1    prohibited  by  subsection  (c)  of  this  Section,  or   who
 2    knowingly fails to comply with the provisions of this Section
 3    in  any  other  manner  shall  be guilty of a Class 2 felony.
 4    Each violation  shall  constitute  a  separate  and  distinct
 5    offense  and  a  separate  count  may  be brought in the same
 6    indictment or information for each essential part for which a
 7    record was not kept as required by this Section or for  which
 8    the  person  failed  to  comply with other provisions of this
 9    Section.
10        (g)  The records required to be kept by this Section  may
11    be examined by a person or persons making a lawful inspection
12    of the licensee's premises pursuant to Section 5-403.
13        (h)  The  records  required  to  be  kept by this Section
14    shall be retained by the licensee at his principal  place  of
15    business for a period of 7 years.
16        (i)  The  requirements of this Section shall not apply to
17    the disposition of an essential part other than a cowl  which
18    has  been  damaged  or  altered to a state in which it can no
19    longer be returned to a usable condition and which  is  being
20    sold or transferred to a scrap processor or for delivery to a
21    scrap processor.
22    (Source:  P.A.  85-1204;  85-1396; 85-1440; 86-1179; 86-1209;
23    86-1475.)

24        (625 ILCS 5/5-403.1) (from Ch. 95 1/2, par. 5-403.1)
25        Sec. 5-403.1.  Inventory System.
26        (a)  Every person licensed or  required  to  be  licensed
27    under  the  provisions  of Sections 5-101, 5-101.1, 5-102 and
28    5-301  of  this  Code  shall,  under  rule   and   regulation
29    prescribed  by  the Secretary of State, maintain an inventory
30    system of all vehicles or essential parts in  such  a  manner
31    that a person making an inspection pursuant to the provisions
32    of  Section  5-403  of  this  Code  can readily ascertain the
33    identity of such vehicles  or  essential  parts  and  readily
 
SB217 Engrossed             -26-               LRB9101218KSgc
 1    locate such parts on the licensees premises.
 2        (b)  Failure  to maintain an inventory system as required
 3    under this Section is a Class A misdemeanor.
 4        (c)  This Section does not apply to vehicles or essential
 5    parts which have been  acquired  by  a  scrap  processor  for
 6    processing  into  a  form  other  than a vehicle or essential
 7    part.
 8    (Source: P.A. 86-1209.)

 9        Section 10.  The Motor Vehicle Franchise Act  is  amended
10    by changing Section 4 and adding Section 3.1 as follows:

11        (815 ILCS 710/3.1 new)
12        Sec.   3.1.  Motor   vehicle  financing  affiliate.   For
13    purposes of this  Act,  a  franchisee  and  a  motor  vehicle
14    financing  affiliate,  as  defined  in  Section  5-100 of the
15    Illinois Vehicle Code,  shall be treated as a single  entity.
16    That  a franchisee arranges to receive motor vehicles through
17    a motor  vehicle  financing  affiliate  shall  not  exempt  a
18    manufacturer from the provisions of this Act.  A manufacturer
19    shall  not  require,  directly or indirectly, a motor vehicle
20    dealer to contract with a motor vehicle  financing  affiliate
21    in   order   to  receive  its  motor  vehicles  nor  shall  a
22    manufacturer prevent, directly or indirectly, a motor vehicle
23    dealer from  contracting  with  a   motor  vehicle  financing
24    affiliate   in   order  to  receive  its  motor  vehicles.  A
25    manufacturer  shall  not  use  a  motor   vehicle   financing
26    affiliate   as   a  means  of  avoiding  the  provisions  and
27    requirements of this Act.

28        (815 ILCS 710/4) (from Ch. 121 1/2, par. 754)
29        Sec. 4.  Unfair competition and practices.
30        (a)  The unfair methods of  competition  and  unfair  and
31    deceptive acts or practices listed in this Section are hereby
 
SB217 Engrossed             -27-               LRB9101218KSgc
 1    declared to be unlawful. In construing the provisions of this
 2    Section,  the  courts may be guided by the interpretations of
 3    the Federal Trade Commission Act (15 U.S.C. 45 et  seq.),  as
 4    from time to time amended.
 5        (b)  It shall be deemed a violation for any manufacturer,
 6    factory   branch,   factory  representative,  distributor  or
 7    wholesaler, distributor branch, distributor representative or
 8    motor vehicle dealer to engage in any action with respect  to
 9    a   franchise   which   is   arbitrary,   in   bad  faith  or
10    unconscionable and which causes damage to any of the  parties
11    or to the public.
12        (c)  It shall be deemed a violation for a manufacturer, a
13    distributor,  a wholesaler, a distributor branch or division,
14    a factory branch  or  division,  or  a  wholesale  branch  or
15    division,  or officer, agent or other representative thereof,
16    to coerce, or attempt to coerce, any motor vehicle dealer:
17             (1)  to accept, buy or order any  motor  vehicle  or
18        vehicles,  appliances,  equipment,  parts  or accessories
19        therefor,  or  any  other  commodity  or  commodities  or
20        service or services which such motor vehicle  dealer  has
21        not   voluntarily   ordered  or  requested  except  items
22        required by applicable local, state or federal law; or to
23        require a motor vehicle dealer to accept, buy,  order  or
24        purchase  such items in order to obtain any motor vehicle
25        or vehicles or any other commodity or  commodities  which
26        have  been  ordered  or  requested  by such motor vehicle
27        dealer;
28             (2)  to  order  or  accept  delivery  of  any  motor
29        vehicle with special features, appliances, accessories or
30        equipment not included in the list  price  of  the  motor
31        vehicles  as  publicly  advertised  by  the  manufacturer
32        thereof, except items required by applicable law; or
33             (3)  to  order  for  anyone  any parts, accessories,
34        equipment, machinery, tools, appliances or any  commodity
 
SB217 Engrossed             -28-               LRB9101218KSgc
 1        whatsoever, except items required by applicable law.
 2        (d)  It shall be deemed a violation for a manufacturer, a
 3    distributor,  a wholesaler, a distributor branch or division,
 4    or officer, agent or other representative thereof:
 5             (1)  to adopt, change, establish or implement a plan
 6        or system for the  allocation  and  distribution  of  new
 7        motor   vehicles   to  motor  vehicle  dealers  which  is
 8        arbitrary or capricious or to modify an existing plan  so
 9        as to cause the same to be arbitrary or capricious;
10             (2)  to  fail or refuse to advise or disclose to any
11        motor  vehicle  dealer  having  a  franchise  or  selling
12        agreement, upon written request therefor, the basis  upon
13        which  new  motor  vehicles  of  the  same  line make are
14        allocated or distributed to motor vehicle dealers in  the
15        State  and the basis upon which the current allocation or
16        distribution is being made or will be made to such  motor
17        vehicle dealer;
18             (3)  to  refuse  to deliver in reasonable quantities
19        and within a reasonable time after  receipt  of  dealer's
20        order,  to any motor vehicle dealer having a franchise or
21        selling agreement  for  the  retail  sale  of  new  motor
22        vehicles   sold  or  distributed  by  such  manufacturer,
23        distributor, wholesaler, distributor branch or  division,
24        factory   branch  or  division  or  wholesale  branch  or
25        division, any such motor vehicles as are covered by  such
26        franchise  or  selling  agreement  specifically  publicly
27        advertised   in   the   State   by   such   manufacturer,
28        distributor,  wholesaler, distributor branch or division,
29        factory  branch  or  division,  or  wholesale  branch  or
30        division  to  be  available   for   immediate   delivery.
31        However,  the  failure to deliver any motor vehicle shall
32        not be considered a violation of this Act if such failure
33        is due to an act of God, a work stoppage or delay due  to
34        a  strike or labor difficulty, a shortage of materials, a
 
SB217 Engrossed             -29-               LRB9101218KSgc
 1        lack of manufacturing  capacity,  a  freight  embargo  or
 2        other  cause over which the manufacturer, distributor, or
 3        wholesaler, or any agent thereof has no control;
 4             (4)  to coerce, or  attempt  to  coerce,  any  motor
 5        vehicle  dealer  to  enter  into  any agreement with such
 6        manufacturer, distributor, wholesaler, distributor branch
 7        or division, factory branch  or  division,  or  wholesale
 8        branch   or   division,   or   officer,  agent  or  other
 9        representative  thereof,  or  to   do   any   other   act
10        prejudicial  to  the  dealer by threatening to reduce his
11        allocation of motor vehicles or cancel any  franchise  or
12        any selling agreement existing between such manufacturer,
13        distributor,  wholesaler, distributor branch or division,
14        or factory branch or division,  or  wholesale  branch  or
15        division,  and  the dealer. However, notice in good faith
16        to any motor vehicle dealer of the dealer's violation  of
17        any  terms  or  provisions  of  such franchise or selling
18        agreement or of any law or regulation applicable  to  the
19        conduct  of a motor vehicle dealer shall not constitute a
20        violation of this Act;
21             (5)  to require a franchisee to  participate  in  an
22        advertising   campaign  or  contest  or  any  promotional
23        campaign,  or  to  purchase  or  lease  any   promotional
24        materials, training materials, show room or other display
25        decorations   or   materials   at   the  expense  of  the
26        franchisee;
27             (6)  to cancel or terminate the franchise or selling
28        agreement of a motor vehicle dealer  without  good  cause
29        and  without  giving  notice  as hereinafter provided; to
30        fail  or  refuse  to  extend  the  franchise  or  selling
31        agreement of a motor vehicle dealer upon  its  expiration
32        without   good   cause   and  without  giving  notice  as
33        hereinafter provided; or, to offer a renewal, replacement
34        or succeeding franchise or selling  agreement  containing
 
SB217 Engrossed             -30-               LRB9101218KSgc
 1        terms   and   provisions   the  effect  of  which  is  to
 2        substantially change or  modify  the  sales  and  service
 3        obligations  or capital requirements of the motor vehicle
 4        dealer arbitrarily and without  good  cause  and  without
 5        giving notice as hereinafter provided notwithstanding any
 6        term or provision of a franchise or selling agreement.
 7                  (A)  If     a     manufacturer,    distributor,
 8             wholesaler, distributor branch or division,  factory
 9             branch  or  division or wholesale branch or division
10             intends  to  cancel  or  terminate  a  franchise  or
11             selling agreement or intends not to extend or  renew
12             a  franchise or selling agreement on its expiration,
13             it shall send a letter  by  certified  mail,  return
14             receipt  requested,  to  the  affected franchisee at
15             least 60 days  before  the  effective  date  of  the
16             proposed  action,  or  not later than 10 days before
17             the proposed action when the reason for  the  action
18             is based upon either of the following:
19                       (i)  the   business   operations   of  the
20                  franchisee   have   been   abandoned   or   the
21                  franchisee  has  failed  to  conduct  customary
22                  sales and service operations  during  customary
23                  business  hours  for  at  least  7  consecutive
24                  business  days unless such closing is due to an
25                  act of God, strike or labor difficulty or other
26                  cause over which the franchisee has no control;
27                  or
28                       (ii)  the conviction of or  plea  of  nolo
29                  contendere  by  the motor vehicle dealer or any
30                  operator  thereof  in  a  court  of   competent
31                  jurisdiction   to   an  offense  punishable  by
32                  imprisonment for more than two years.
33                  Each notice of proposed action shall include  a
34             detailed   statement   setting  forth  the  specific
 
SB217 Engrossed             -31-               LRB9101218KSgc
 1             grounds for the proposed cancellation,  termination,
 2             or refusal to extend or renew.
 3                  (B)  If     a     manufacturer,    distributor,
 4             wholesaler, distributor branch or division,  factory
 5             branch  or  division or wholesale branch or division
 6             intends to change substantially or modify the  sales
 7             and service obligations or capital requirements of a
 8             motor  vehicle dealer as a condition to extending or
 9             renewing the existing franchise or selling agreement
10             of such motor vehicle dealer, it shall send a letter
11             by certified mail, return receipt requested, to  the
12             affected  franchisee  at  least  60  days before the
13             date of  expiration  of  the  franchise  or  selling
14             agreement.   Each  notice  of  proposed action shall
15             include  a  detailed  statement  setting  forth  the
16             specific grounds for the proposed action.
17                  (C)  Within 15 days from receipt of the  notice
18             under  subparagraphs (A) and (B), the franchisee may
19             file with the Board a written  protest  against  the
20             proposed action.
21                  When  the  protest  has  been timely filed, the
22             Board shall enter an order, fixing a date (within 60
23             days of the date of the order), time, and place of a
24             hearing on the protest required  under  Sections  12
25             and  29  of  this  Act,  and send by certified mail,
26             return receipt requested, a copy of the order to the
27             manufacturer that filed the notice of  intention  of
28             the  proposed action and to the protesting dealer or
29             franchisee.
30                  The manufacturer shall have the burden of proof
31             to establish that good cause  exists  to  cancel  or
32             terminate,  or fail to extend or renew the franchise
33             or selling agreement of a motor  vehicle  dealer  or
34             franchisee,  and  to  change substantially or modify
 
SB217 Engrossed             -32-               LRB9101218KSgc
 1             the  sales  and  service  obligations   or   capital
 2             requirements   of   a  motor  vehicle  dealer  as  a
 3             condition to  extending  or  renewing  the  existing
 4             franchise  or  selling agreement.  The determination
 5             whether good cause exists to cancel,  terminate,  or
 6             refuse  to  renew or extend the franchise or selling
 7             agreement, or to change or modify the obligations of
 8             the  dealer  as  a  condition  to   offer   renewal,
 9             replacement,  or  succession  shall  be  made by the
10             Board under subsection (d) of  Section  12  of  this
11             Act.
12                  (D)  Notwithstanding  the terms, conditions, or
13             provisions of a franchise or selling agreement,  the
14             following   shall  not  constitute  good  cause  for
15             cancelling or terminating or failing  to  extend  or
16             renew  the  franchise  or selling agreement: (i) the
17             change of ownership or executive management  of  the
18             franchisee's  dealership;  or (ii) the fact that the
19             franchisee or owner of an interest in the  franchise
20             owns,  has  an  investment  in,  participates in the
21             management of, or holds a license for  the  sale  of
22             the  same  or  any  other  line  make  of  new motor
23             vehicles.
24                  Good cause shall exist to cancel, terminate  or
25             fail  to offer a renewal or replacement franchise or
26             selling agreement to all franchisees of a line  make
27             if  the  manufacturer  permanently  discontinues the
28             manufacture or assembly of motor  vehicles  of  such
29             line make.
30                  (E)  The   manufacturer   may   not  cancel  or
31             terminate, or fail to extend or renew a franchise or
32             selling  agreement   or   change   or   modify   the
33             obligations  of  the  franchisee  as  a condition to
34             offering  a  renewal,  replacement,  or   succeeding
 
SB217 Engrossed             -33-               LRB9101218KSgc
 1             franchise  or  selling  agreement before the hearing
 2             process is concluded as prescribed by this Act,  and
 3             thereafter,   if   the  Board  determines  that  the
 4             manufacturer has failed to meet its burden of  proof
 5             and  that  good  cause  does  not exist to allow the
 6             proposed action; or
 7             (7)  notwithstanding  the  terms  of  any  franchise
 8        agreement, to fail to indemnify  and  hold  harmless  its
 9        franchised dealers against any judgment or settlement for
10        damages,  including,  but not limited to, court costs and
11        reasonable attorneys'  fees  of  the  new  motor  vehicle
12        dealer,  arising  out  of  complaints, claims or lawsuits
13        including,  but  not  limited   to,   strict   liability,
14        negligence,   misrepresentation,   warranty  (express  or
15        implied), or recision of the sale as defined  in  Section
16        2-608  of the Uniform Commercial Code, to the extent that
17        the  judgment  or  settlement  relates  to  the   alleged
18        defective or negligent manufacture, assembly or design of
19        new   motor  vehicles,  parts  or  accessories  or  other
20        functions by the manufacturer, beyond the control of  the
21        dealer.
22        (e)  It shall be deemed a violation for a manufacturer, a
23    distributor,  a  wholesaler, a distributor branch or division
24    or officer, agent or other representative thereof:
25             (1)  to resort to or use  any  false  or  misleading
26        advertisement  in  connection  with  his business as such
27        manufacturer, distributor, wholesaler, distributor branch
28        or division or officer,  agent  or  other  representative
29        thereof;
30             (2)  to offer to sell or lease, or to sell or lease,
31        any  new  motor  vehicle to any motor vehicle dealer at a
32        lower actual price therefor than the actual price offered
33        to any other motor vehicle  dealer  for  the  same  model
34        vehicle  similarly  equipped  or  to  utilize  any device
 
SB217 Engrossed             -34-               LRB9101218KSgc
 1        including, but not limited to, sales promotion  plans  or
 2        programs  which  result  in  such lesser actual price  or
 3        fail to make available to any motor  vehicle  dealer  any
 4        preferential pricing, incentive, rebate, finance rate, or
 5        low  interest  loan  program  offered  to competing motor
 6        vehicle dealers in other contiguous states. However,  the
 7        provisions  of this paragraph shall not apply to sales to
 8        a motor vehicle dealer for resale  to  any  unit  of  the
 9        United  States  Government,  the  State  or  any  of  its
10        political subdivisions;
11             (3)  to offer to sell or lease, or to sell or lease,
12        any new motor vehicle to any person, except a wholesaler,
13        distributor or manufacturer's employees at a lower actual
14        price  therefor than the actual price offered and charged
15        to a motor vehicle dealer  for  the  same  model  vehicle
16        similarly equipped or to utilize any device which results
17        in  such  lesser actual price. However, the provisions of
18        this paragraph shall  not  apply  to  sales  to  a  motor
19        vehicle  dealer  for  resale  to  any  unit of the United
20        States Government, the State  or  any  of  its  political
21        subdivisions;
22             (4)  to prevent or attempt to prevent by contract or
23        otherwise  any  motor  vehicle  dealer or franchisee from
24        changing the executive management control  of  the  motor
25        vehicle  dealer  or  franchisee  unless  the  franchiser,
26        having  the  burden  of proof, proves that such change of
27        executive management will result in executive  management
28        control  by a person or persons who are not of good moral
29        character or who do not meet  the  franchiser's  existing
30        and,  with consideration given to the volume of sales and
31        service of  the  dealership,  uniformly  applied  minimum
32        business experience standards in the market area. However
33        where  the  manufacturer  rejects  a  proposed  change in
34        executive management control, the manufacturer shall give
 
SB217 Engrossed             -35-               LRB9101218KSgc
 1        written notice of his reasons to  the  dealer  within  60
 2        days  of  notice to the manufacturer by the dealer of the
 3        proposed change. If the  manufacturer  does  not  send  a
 4        letter  to  the  franchisee  by  certified  mail,  return
 5        receipt  requested,  within  60  days from receipt by the
 6        manufacturer of the proposed change, then the  change  of
 7        the  executive management control of the franchisee shall
 8        be deemed accepted as proposed by the franchisee, and the
 9        manufacturer shall give immediate effect to such change;
10             (5)  to prevent or attempt to prevent by contract or
11        otherwise any motor vehicle dealer from  establishing  or
12        changing  the  capital structure of his dealership or the
13        means by or  through  which  he  finances  the  operation
14        thereof; provided the dealer meets any reasonable capital
15        standards   agreed   to   between   the  dealer  and  the
16        manufacturer, distributor or wholesaler, who may  require
17        that  the  sources, method and manner by which the dealer
18        finances or intends to finance its  operation,  equipment
19        or facilities be fully disclosed;
20             (6)  to  refuse  to  give  effect  to  or prevent or
21        attempt to prevent by contract  or  otherwise  any  motor
22        vehicle  dealer or any officer, partner or stockholder of
23        any motor vehicle dealer from selling or transferring any
24        part of the interest of any of them to any  other  person
25        or  persons  or  party  or  parties  unless  such sale or
26        transfer is to  a  transferee  who  would  not  otherwise
27        qualify  for  a  new  motor vehicle dealers license under
28        "The Illinois Vehicle Code"  or  unless  the  franchiser,
29        having  the  burden  of  proof,  proves that such sale or
30        transfer is to a person or party who is not of good moral
31        character or does not meet the franchiser's existing  and
32        reasonable  capital  standards  and,  with  consideration
33        given   to  the  volume  of  sales  and  service  of  the
34        dealership, uniformly applied minimum business experience
 
SB217 Engrossed             -36-               LRB9101218KSgc
 1        standards in the market  area.  However,  nothing  herein
 2        shall   be   construed   to  prevent  a  franchiser  from
 3        implementing  affirmative   action   programs   providing
 4        business  opportunities  for minorities or from complying
 5        with applicable federal, State or local law:
 6                  (A)  If the manufacturer intends to  refuse  to
 7             approve the sale or transfer of all or a part of the
 8             interest, then it shall, within 60 days from receipt
 9             of   the   completed   application  forms  generally
10             utilized by a manufacturer to conduct its review and
11             a copy of  all  agreements  regarding  the  proposed
12             transfer,  send  a  letter by certified mail, return
13             receipt requested, advising the  franchisee  of  any
14             refusal  to  approve  the sale or transfer of all or
15             part of the interest. The  notice  shall  set  forth
16             specific  criteria  used to evaluate the prospective
17             transferee and the grounds for refusing  to  approve
18             the  sale  or transfer to that transferee. Within 15
19             days  from   the   franchisee's   receipt   of   the
20             manufacturer's  notice, the franchisee may file with
21             the Board a written  protest  against  the  proposed
22             action.
23                  When a protest has been timely filed, the Board
24             shall  enter  an  order,  fixing the date (within 60
25             days of the date of such order), time, and place  of
26             a hearing on the protest, required under Sections 12
27             and  29  of  this  Act,  and send by certified mail,
28             return receipt requested, a copy of the order to the
29             manufacturer that filed notice of intention  of  the
30             proposed action and to the protesting franchisee.
31                  The manufacturer shall have the burden of proof
32             to  establish  that  good  cause exists to refuse to
33             approve the sale or transfer to the transferee.  The
34             determination whether good cause exists to refuse to
 
SB217 Engrossed             -37-               LRB9101218KSgc
 1             approve the sale or transfer shall be  made  by  the
 2             Board  under  subdivisions  (6)(B). The manufacturer
 3             shall not refuse to approve the sale or transfer  by
 4             a dealer or an officer, partner, or stockholder of a
 5             franchise  or any part of the interest to any person
 6             or persons before the hearing process  is  concluded
 7             as  prescribed  by  this  Act, and thereafter if the
 8             Board determines that the manufacturer has failed to
 9             meet its burden of proof and that  good  cause  does
10             not  exist to refuse to approve the sale or transfer
11             to the transferee.
12                  (B)  Good cause to refuse to approve such  sale
13             or  transfer  under this Section is established when
14             such sale or transfer is to a transferee  who  would
15             not  otherwise  qualify  for  a  new  motor  vehicle
16             dealers license under "The Illinois Vehicle Code" or
17             such sale or transfer is to a person or party who is
18             not  of  good  moral  character or does not meet the
19             franchiser's   existing   and   reasonable   capital
20             standards  and,  with  consideration  given  to  the
21             volume of  sales  and  service  of  the  dealership,
22             uniformly   applied   minimum   business  experience
23             standards in the market area.
24             (7)  to obtain money, goods, services,  anything  of
25        value,  or  any  other benefit from any other person with
26        whom the motor vehicle dealer does business,  on  account
27        of  or in relation to the transactions between the dealer
28        and the other person as compensation, except for services
29        actually  rendered,  unless  such  benefit  is   promptly
30        accounted  for  and  transmitted  to  the  motor  vehicle
31        dealer;
32             (8)  to   grant   an  additional  franchise  in  the
33        relevant market area of an existing franchise of the same
34        line make  or  to  relocate  an  existing  motor  vehicle
 
SB217 Engrossed             -38-               LRB9101218KSgc
 1        dealership  within  or  into a relevant market area of an
 2        existing franchise of the same line make. However, if the
 3        manufacturer wishes to grant such an additional franchise
 4        to an independent person in a bona fide  relationship  in
 5        which  such  person  is  prepared  to  make a significant
 6        investment subject to loss in such a  dealership,  or  if
 7        the  manufacturer  wishes  to  relocate an existing motor
 8        vehicle dealership, then the manufacturer  shall  send  a
 9        letter  by  certified  mail, return receipt requested, to
10        each existing dealer or dealers of  the  same  line  make
11        whose relevant market area includes the proposed location
12        of the additional or relocated franchise at least 60 days
13        before the manufacturer grants an additional franchise or
14        relocates  an  existing  franchise  of the same line make
15        within or into the relevant market area  of  an  existing
16        franchisee  of the same line make.  Each notice shall set
17        forth the specific grounds for the proposed grant  of  an
18        additional   or  relocation  of  an  existing  franchise.
19        Unless the parties agree upon the grant or  establishment
20        of  the  additional or relocated franchise within 15 days
21        from the date the notice was  received  by  the  existing
22        franchisee  of  the same line make or any person entitled
23        to receive such notice, the franchisee  or  other  person
24        may  file  with  the  Board a written protest against the
25        grant or establishment  of  the  proposed  additional  or
26        relocated franchise.
27             When  a  protest  has  been  timely filed, the Board
28        shall enter an order fixing a date (within 60 days of the
29        date of the order), time, and place of a hearing  on  the
30        protest,  required  under Sections 12 and 29 of this Act,
31        and send by certified or registered mail, return  receipt
32        requested,  a  copy of the order to the manufacturer that
33        filed the notice of intention to grant or  establish  the
34        proposed  additional  or  relocated  franchise and to the
 
SB217 Engrossed             -39-               LRB9101218KSgc
 1        protesting dealer or dealers of the same line make  whose
 2        relevant  market  area  includes the proposed location of
 3        the additional or relocated franchise.
 4             When more than one  protest  is  filed  against  the
 5        grant  or  establishment  of  the additional or relocated
 6        franchise  of  the  same  line  make,   the   Board   may
 7        consolidate  the  hearings to expedite disposition of the
 8        matter.  The manufacturer shall have the burden of  proof
 9        to establish that good cause exists to allow the grant or
10        establishment  of  the additional or relocated franchise.
11        The  manufacturer  may  not  grant   or   establish   the
12        additional  franchise  or relocate the existing franchise
13        before the hearing process is concluded as prescribed  by
14        this Act, and thereafter if the Board determines that the
15        manufacturer  has  failed to meet its burden of proof and
16        that good cause does not exist  to  allow  the  grant  or
17        establishment  of  the additional franchise or relocation
18        of the existing franchise.
19             The determination  whether  good  cause  exists  for
20        allowing  the  grant  or  establishment  of an additional
21        franchise or relocated existing franchise, shall be  made
22        by  the  Board under subsection (c) of Section 12 of this
23        Act. If the manufacturer seeks to enter into a  contract,
24        agreement   or   other   arrangement   with  any  person,
25        establishing any additional motor vehicle  dealership  or
26        other facility, limited to the sale of factory repurchase
27        vehicles  or  late  model vehicles, then the manufacturer
28        shall follow the notice  procedures  set  forth  in  this
29        Section  and  the determination whether good cause exists
30        for allowing the proposed agreement shall be made by  the
31        Board  under  subsection  (c)  of  Section  12,  with the
32        manufacturer having the burden of proof.
33                  A.  (Blank).
34                  B.  For   the   purposes   of   this   Section,
 
SB217 Engrossed             -40-               LRB9101218KSgc
 1             appointment of a successor motor vehicle  dealer  at
 2             the  same  location  as its predecessor, or within 2
 3             miles of such location,  or  the  relocation  of  an
 4             existing  dealer  or franchise within 2 miles of the
 5             relocating   dealer's   or   franchisee's   existing
 6             location,  shall  not  be  construed  as  a   grant,
 7             establishment  or the entering into of an additional
 8             franchise or selling agreement, or a  relocation  of
 9             an  existing  franchise.  The  reopening  of a motor
10             vehicle dealership that has not  been  in  operation
11             for  18  months or more shall be deemed the grant of
12             an additional franchise or selling agreement.
13                  C.  This  Section  does  not   apply   to   the
14             relocation of an existing dealership or franchise in
15             a  county  having  a population of more than 300,000
16             persons when the new location is within the dealer's
17             current  relevant  market  area,  provided  the  new
18             location is more  than  7  miles  from  the  nearest
19             dealer of the same line make or is further away from
20             the  nearest  dealer  of  the  same  line make. This
21             Section does not  apply  to  the  relocation  of  an
22             existing  dealership or franchise in a county having
23             a population of less than 300,000 persons  when  the
24             new location is within the dealer's current relevant
25             market  area, provided the new location is more than
26             12 miles from the nearest dealer of  the  same  line
27             make  or  is further away from the nearest dealer of
28             the same line make.
29                  D.  Nothing in this Section shall be  construed
30             to    prevent   a   franchiser   from   implementing
31             affirmative  action  programs   providing   business
32             opportunities  for minorities or from complying with
33             applicable federal, State or local law;
34             (9)  to require a motor vehicle dealer to assent  to
 
SB217 Engrossed             -41-               LRB9101218KSgc
 1        a release, assignment, novation, waiver or estoppel which
 2        would  relieve  any person from liability imposed by this
 3        Act;
 4             (10)  to prevent or refuse to  give  effect  to  the
 5        succession  to  the  ownership or management control of a
 6        dealership by any legatee under the will of a  dealer  or
 7        to  an heir under the laws of descent and distribution of
 8        this  State  unless  the  franchisee  has  designated   a
 9        successor  to  the  ownership or management control under
10        the succession provisions of the franchise.   Unless  the
11        franchiser,  having  the burden of proof, proves that the
12        successor is a person who is not of good moral  character
13        or does not meet the franchiser's existing and reasonable
14        capital  standards  and,  with consideration given to the
15        volume of sales and service of the dealership,  uniformly
16        applied  minimum  business  experience  standards  in the
17        market area, any designated  successor  of  a  dealer  or
18        franchisee  may  succeed  to  the ownership or management
19        control of a dealership under the existing franchise if:
20                       (i)  The designated  successor  gives  the
21                  franchiser  written  notice  by certified mail,
22                  return  receipt  requested,  of  his   or   her
23                  intention  to  succeed  to the ownership of the
24                  dealer within 60 days of the dealer's death  or
25                  incapacity; and
26                       (ii)  The  designated  successor agrees to
27                  be bound by all the terms and conditions of the
28                  existing franchise.
29             Notwithstanding the  foregoing,  in  the  event  the
30        motor  vehicle dealer or franchisee and manufacturer have
31        duly executed an agreement concerning  succession  rights
32        prior  to  the  dealer's  death  or  incapacitation,  the
33        agreement shall be observed.
34                  (A)  If  the  franchiser  intends  to refuse to
 
SB217 Engrossed             -42-               LRB9101218KSgc
 1             honor the successor to the ownership of  a  deceased
 2             or  incapacitated  dealer  or  franchisee  under  an
 3             existing  franchise  agreement, the franchiser shall
 4             send a letter  by  certified  mail,  return  receipt
 5             requested,  to  the  designated  successor within 60
 6             days from receipt of  a  proposal  advising  of  its
 7             intent  to  refuse  to  honor  the succession and to
 8             discontinue the existing franchise  agreement.   The
 9             notice  shall set forth the specific grounds for the
10             refusal to honor the succession and discontinue  the
11             existing franchise agreement.
12                  If  notice of refusal is not timely served upon
13             the designated successor,  the  franchise  agreement
14             shall continue in effect subject to termination only
15             as   otherwise   permitted   by   paragraph  (6)  of
16             subsection (d) of Section 4 of this Act.
17                  Within 15 days from the  date  the  notice  was
18             received  by  the  designated successor or any other
19             person entitled to notice,  the  designee  or  other
20             person  may  file  with  the Board a written protest
21             against the proposed action.
22                  When a protest has been timely filed, the Board
23             shall enter an order, fixing a date (within 60  days
24             of  the  date  of  the  order), time, and place of a
25             hearing on the protest, required under  Sections  12
26             and  29  of  this  Act,  and send by certified mail,
27             return receipt requested, a copy of the order to the
28             franchiser that filed the notice of intention of the
29             proposed action and to the  protesting  designee  or
30             such other person.
31                  The manufacturer shall have the burden of proof
32             to  establish  that  good  cause exists to refuse to
33             honor the succession and  discontinue  the  existing
34             franchise agreement.  The determination whether good
 
SB217 Engrossed             -43-               LRB9101218KSgc
 1             cause exists to refuse to honor the succession shall
 2             be  made  by the Board under subdivision (B) of this
 3             paragraph (10).  The manufacturer shall  not  refuse
 4             to  honor the succession or discontinue the existing
 5             franchise agreement before the  hearing  process  is
 6             concluded  as prescribed by this Act, and thereafter
 7             if the Board determines that it has failed  to  meet
 8             its  burden  of  proof  and that good cause does not
 9             exist  to  refuse  to  honor  the   succession   and
10             discontinue the existing franchise agreement.
11                  (B)  No    manufacturer    shall   impose   any
12             conditions  upon   honoring   the   succession   and
13             continuing the existing franchise agreement with the
14             designated  successor other than that the franchisee
15             has designated  a  successor  to  the  ownership  or
16             management  control  under the succession provisions
17             of the franchise, or that the  designated  successor
18             is  of  good moral character or meets the reasonable
19             capital standards and, with consideration  given  to
20             the  volume  of sales and service of the dealership,
21             uniformly  applied   minimum   business   experience
22             standards in the market area;
23             (11)  to  prevent or refuse to approve a proposal to
24        establish a successor franchise at a location  previously
25        approved  by  the  franchiser  when  submitted  with  the
26        voluntary  termination  by the existing franchisee unless
27        the successor franchisee would not otherwise qualify  for
28        a  new  motor vehicle dealer's license under the Illinois
29        Vehicle Code or unless the franchiser, having the  burden
30        of  proof,  proves that such proposed successor is not of
31        good moral character or does not  meet  the  franchiser's
32        existing  and  reasonable  capital  standards  and,  with
33        consideration given to the volume of sales and service of
34        the   dealership,   uniformly  applied  minimum  business
 
SB217 Engrossed             -44-               LRB9101218KSgc
 1        experience standards in the market  area.  However,  when
 2        such  a rejection of a proposal is made, the manufacturer
 3        shall  give  written  notice  of  its  reasons   to   the
 4        franchisee  within 60 days of receipt by the manufacturer
 5        of  the  proposal.   However,  nothing  herein  shall  be
 6        construed  to  prevent  a  franchiser  from  implementing
 7        affirmative   action    programs    providing    business
 8        opportunities  for  minorities,  or  from  complying with
 9        applicable federal, State or local law;
10             (12)  to prevent or refuse to grant a franchise to a
11        person because such person owns,  has  investment  in  or
12        participates  in  the  management of or holds a franchise
13        for the sale of another make or line  of  motor  vehicles
14        within  7  miles  of the proposed franchise location in a
15        county having a population of more than 300,000  persons,
16        or  within 12 miles of the proposed franchise location in
17        a  county  having  a  population  of  less  than  300,000
18        persons; or
19             (13)  to prevent or attempt to prevent any new motor
20        vehicle dealer from  establishing  any  additional  motor
21        vehicle  dealership or other facility limited to the sale
22        of factory repurchase vehicles or late model vehicles  or
23        otherwise  offering  for sale factory repurchase vehicles
24        of the same line make at an existing franchise by failing
25        to  make  available  any  contract,  agreement  or  other
26        arrangement which is made available or otherwise  offered
27        to any person.
28        (f)  It  is  deemed  a  violation  for  a manufacturer, a
29    distributor, a wholesaler, a distributor branch or  division,
30    a  factory  branch  or  division,  or  a  wholesale branch or
31    division, or officer, agent, broker,  shareholder,  except  a
32    shareholder  of  1%  or less of the outstanding shares of any
33    class  of  securities  of  a  manufacturer,  distributor,  or
34    wholesaler which is a publicly traded corporation,  or  other
 
SB217 Engrossed             -45-               LRB9101218KSgc
 1    representative,  directly  or indirectly, to own or operate a
 2    place of business as a  motor  vehicle  franchisee  or  motor
 3    vehicle  financing  affiliate,  except  that, this subsection
 4    shall not prohibit the ownership or operation of a  place  of
 5    business  by a manufacturer, distributor, or wholesaler for a
 6    period, not to exceed 18 months, during the  transition  from
 7    one motor vehicle franchisee to another; or the investment in
 8    a motor vehicle franchisee by a manufacturer, distributor, or
 9    wholesaler  if  the  investment  is  for  the sole purpose of
10    enabling a partner  or  shareholder  in  that  motor  vehicle
11    franchisee  to  acquire  an  interest  in  that motor vehicle
12    franchisee and that partner or shareholder is  not  otherwise
13    employed by or associated with the manufacturer, distributor,
14    or  wholesaler  and  would  not  otherwise have the requisite
15    capital investment funds  to  invest  in  the  motor  vehicle
16    franchisee,  and  has the right to purchase the entire equity
17    interest of the manufacturer, distributor, or  wholesaler  in
18    the  motor  vehicle  franchisee within a reasonable period of
19    time not to exceed 5 years.
20    (Source: P.A. 89-145, eff. 7-14-95; 90-655, eff. 7-30-98.)

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