96TH GENERAL ASSEMBLY
State of Illinois
2009 and 2010
SB1755

 

Introduced 2/19/2009, by Sen. J. Bradley Burzynski

 

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

    Amends the Motor Vehicle Franchise Act. Makes a technical change in a Section concerning unfair competition and practices.


LRB096 11263 WGH 21679 b

 

 

A BILL FOR

 

SB1755 LRB096 11263 WGH 21679 b

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

 

 

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1 or attempt to coerce, any motor vehicle dealer:
2         (1) to accept, buy or order any motor vehicle or
3     vehicles, appliances, equipment, parts or accessories
4     therefor, or any other commodity or commodities or service
5     or services which such motor vehicle dealer has not
6     voluntarily ordered or requested except items required by
7     applicable local, state or federal law; or to require a
8     motor vehicle dealer to accept, buy, order or purchase such
9     items in order to obtain any motor vehicle or vehicles or
10     any other commodity or commodities which have been ordered
11     or requested by such motor vehicle dealer;
12         (2) to order or accept delivery of any motor vehicle
13     with special features, appliances, accessories or
14     equipment not included in the list price of the motor
15     vehicles as publicly advertised by the manufacturer
16     thereof, except items required by applicable law; or
17         (3) to order for anyone any parts, accessories,
18     equipment, machinery, tools, appliances or any commodity
19     whatsoever, except items required by applicable law.
20     (d) It shall be deemed a violation for a manufacturer, a
21 distributor, a wholesaler, a distributor branch or division, or
22 officer, agent or other representative thereof:
23         (1) to adopt, change, establish or implement a plan or
24     system for the allocation and distribution of new motor
25     vehicles to motor vehicle dealers which is arbitrary or
26     capricious or to modify an existing plan so as to cause the

 

 

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1     same to be arbitrary or capricious;
2         (2) to fail or refuse to advise or disclose to any
3     motor vehicle dealer having a franchise or selling
4     agreement, upon written request therefor, the basis upon
5     which new motor vehicles of the same line make are
6     allocated or distributed to motor vehicle dealers in the
7     State and the basis upon which the current allocation or
8     distribution is being made or will be made to such motor
9     vehicle dealer;
10         (3) to refuse to deliver in reasonable quantities and
11     within a reasonable time after receipt of dealer's order,
12     to any motor vehicle dealer having a franchise or selling
13     agreement for the retail sale of new motor vehicles sold or
14     distributed by such manufacturer, distributor, wholesaler,
15     distributor branch or division, factory branch or division
16     or wholesale branch or division, any such motor vehicles as
17     are covered by such franchise or selling agreement
18     specifically publicly advertised in the State by such
19     manufacturer, distributor, wholesaler, distributor branch
20     or division, factory branch or division, or wholesale
21     branch or division to be available for immediate delivery.
22     However, the failure to deliver any motor vehicle shall not
23     be considered a violation of this Act if such failure is
24     due to an act of God, a work stoppage or delay due to a
25     strike or labor difficulty, a shortage of materials, a lack
26     of manufacturing capacity, a freight embargo or other cause

 

 

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1     over which the manufacturer, distributor, or wholesaler,
2     or any agent thereof has no control;
3         (4) to coerce, or attempt to coerce, any motor vehicle
4     dealer to enter into any agreement with such manufacturer,
5     distributor, wholesaler, distributor branch or division,
6     factory branch or division, or wholesale branch or
7     division, or officer, agent or other representative
8     thereof, or to do any other act prejudicial to the dealer
9     by threatening to reduce his allocation of motor vehicles
10     or cancel any franchise or any selling agreement existing
11     between such manufacturer, distributor, wholesaler,
12     distributor branch or division, or factory branch or
13     division, or wholesale branch or division, and the dealer.
14     However, notice in good faith to any motor vehicle dealer
15     of the dealer's violation of any terms or provisions of
16     such franchise or selling agreement or of any law or
17     regulation applicable to the conduct of a motor vehicle
18     dealer shall not constitute a violation of this Act;
19         (5) to require a franchisee to participate in an
20     advertising campaign or contest or any promotional
21     campaign, or to purchase or lease any promotional
22     materials, training materials, show room or other display
23     decorations or materials at the expense of the franchisee;
24         (6) to cancel or terminate the franchise or selling
25     agreement of a motor vehicle dealer without good cause and
26     without giving notice as hereinafter provided; to fail or

 

 

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1     refuse to extend the franchise or selling agreement of a
2     motor vehicle dealer upon its expiration without good cause
3     and without giving notice as hereinafter provided; or, to
4     offer a renewal, replacement or succeeding franchise or
5     selling agreement containing terms and provisions the
6     effect of which is to substantially change or modify the
7     sales and service obligations or capital requirements of
8     the motor vehicle dealer arbitrarily and without good cause
9     and without giving notice as hereinafter provided
10     notwithstanding any term or provision of a franchise or
11     selling agreement.
12             (A) If a manufacturer, distributor, wholesaler,
13         distributor branch or division, factory branch or
14         division or wholesale branch or division intends to
15         cancel or terminate a franchise or selling agreement or
16         intends not to extend or renew a franchise or selling
17         agreement on its expiration, it shall send a letter by
18         certified mail, return receipt requested, to the
19         affected franchisee at least 60 days before the
20         effective date of the proposed action, or not later
21         than 10 days before the proposed action when the reason
22         for the action is based upon either of the following:
23                 (i) the business operations of the franchisee
24             have been abandoned or the franchisee has failed to
25             conduct customary sales and service operations
26             during customary business hours for at least 7

 

 

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1             consecutive business days unless such closing is
2             due to an act of God, strike or labor difficulty or
3             other cause over which the franchisee has no
4             control; or
5                 (ii) the conviction of or plea of nolo
6             contendere by the motor vehicle dealer or any
7             operator thereof in a court of competent
8             jurisdiction to an offense punishable by
9             imprisonment for more than two years.
10             Each notice of proposed action shall include a
11         detailed statement setting forth the specific grounds
12         for the proposed cancellation, termination, or refusal
13         to extend or renew and shall state that the dealer has
14         only 30 days from receipt of the notice to file with
15         the Motor Vehicle Review Board a written protest
16         against the proposed action.
17             (B) If a manufacturer, distributor, wholesaler,
18         distributor branch or division, factory branch or
19         division or wholesale branch or division intends to
20         change substantially or modify the sales and service
21         obligations or capital requirements of a motor vehicle
22         dealer as a condition to extending or renewing the
23         existing franchise or selling agreement of such motor
24         vehicle dealer, it shall send a letter by certified
25         mail, return receipt requested, to the affected
26         franchisee at least 60 days before the date of

 

 

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1         expiration of the franchise or selling agreement. Each
2         notice of proposed action shall include a detailed
3         statement setting forth the specific grounds for the
4         proposed action and shall state that the dealer has
5         only 30 days from receipt of the notice to file with
6         the Motor Vehicle Review Board a written protest
7         against the proposed action.
8             (C) Within 30 days from receipt of the notice under
9         subparagraphs (A) and (B), the franchisee may file with
10         the Board a written protest against the proposed
11         action.
12             When the protest has been timely filed, the Board
13         shall enter an order, fixing a date (within 60 days of
14         the date of the order), time, and place of a hearing on
15         the protest required under Sections 12 and 29 of this
16         Act, and send by certified mail, return receipt
17         requested, a copy of the order to the manufacturer that
18         filed the notice of intention of the proposed action
19         and to the protesting dealer or franchisee.
20             The manufacturer shall have the burden of proof to
21         establish that good cause exists to cancel or
22         terminate, or fail to extend or renew the franchise or
23         selling agreement of a motor vehicle dealer or
24         franchisee, and to change substantially or modify the
25         sales and service obligations or capital requirements
26         of a motor vehicle dealer as a condition to extending

 

 

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1         or renewing the existing franchise or selling
2         agreement. The determination whether good cause exists
3         to cancel, terminate, or refuse to renew or extend the
4         franchise or selling agreement, or to change or modify
5         the obligations of the dealer as a condition to offer
6         renewal, replacement, or succession shall be made by
7         the Board under subsection (d) of Section 12 of this
8         Act.
9             (D) Notwithstanding the terms, conditions, or
10         provisions of a franchise or selling agreement, the
11         following shall not constitute good cause for
12         cancelling or terminating or failing to extend or renew
13         the franchise or selling agreement: (i) the change of
14         ownership or executive management of the franchisee's
15         dealership; or (ii) the fact that the franchisee or
16         owner of an interest in the franchise owns, has an
17         investment in, participates in the management of, or
18         holds a license for the sale of the same or any other
19         line make of new motor vehicles.
20             Good cause shall exist to cancel, terminate or fail
21         to offer a renewal or replacement franchise or selling
22         agreement to all franchisees of a line make if the
23         manufacturer permanently discontinues the manufacture
24         or assembly of motor vehicles of such line make.
25             (E) The manufacturer may not cancel or terminate,
26         or fail to extend or renew a franchise or selling

 

 

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1         agreement or change or modify the obligations of the
2         franchisee as a condition to offering a renewal,
3         replacement, or succeeding franchise or selling
4         agreement before the hearing process is concluded as
5         prescribed by this Act, and thereafter, if the Board
6         determines that the manufacturer has failed to meet its
7         burden of proof and that good cause does not exist to
8         allow the proposed action; or
9         (7) notwithstanding the terms of any franchise
10     agreement, to fail to indemnify and hold harmless its
11     franchised dealers against any judgment or settlement for
12     damages, including, but not limited to, court costs, expert
13     witness fees, reasonable attorneys' fees of the new motor
14     vehicle dealer, and other expenses incurred in the
15     litigation, so long as such fees and costs are reasonable,
16     arising out of complaints, claims or lawsuits including,
17     but not limited to, strict liability, negligence,
18     misrepresentation, warranty (express or implied), or
19     recision of the sale as defined in Section 2-608 of the
20     Uniform Commercial Code, to the extent that the judgment or
21     settlement relates to the alleged defective or negligent
22     manufacture, assembly or design of new motor vehicles,
23     parts or accessories or other functions by the
24     manufacturer, beyond the control of the dealer; provided
25     that, in order to provide an adequate defense, the
26     manufacturer receives notice of the filing of a complaint,

 

 

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1     claim, or lawsuit within 60 days after the filing.
2     (e) It shall be deemed a violation for a manufacturer, a
3 distributor, a wholesaler, a distributor branch or division or
4 officer, agent or other representative thereof:
5         (1) to resort to or use any false or misleading
6     advertisement in connection with his business as such
7     manufacturer, distributor, wholesaler, distributor branch
8     or division or officer, agent or other representative
9     thereof;
10         (2) to offer to sell or lease, or to sell or lease, any
11     new motor vehicle to any motor vehicle dealer at a lower
12     actual price therefor than the actual price offered to any
13     other motor vehicle dealer for the same model vehicle
14     similarly equipped or to utilize any device including, but
15     not limited to, sales promotion plans or programs which
16     result in such lesser actual price or fail to make
17     available to any motor vehicle dealer any preferential
18     pricing, incentive, rebate, finance rate, or low interest
19     loan program offered to competing motor vehicle dealers in
20     other contiguous states. However, the provisions of this
21     paragraph shall not apply to sales to a motor vehicle
22     dealer for resale to any unit of the United States
23     Government, the State or any of its political subdivisions;
24         (3) to offer to sell or lease, or to sell or lease, any
25     new motor vehicle to any person, except a wholesaler,
26     distributor or manufacturer's employees at a lower actual

 

 

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1     price therefor than the actual price offered and charged to
2     a motor vehicle dealer for the same model vehicle similarly
3     equipped or to utilize any device which results in such
4     lesser actual price. However, the provisions of this
5     paragraph shall not apply to sales to a motor vehicle
6     dealer for resale to any unit of the United States
7     Government, the State or any of its political subdivisions;
8         (4) to prevent or attempt to prevent by contract or
9     otherwise any motor vehicle dealer or franchisee from
10     changing the executive management control of the motor
11     vehicle dealer or franchisee unless the franchiser, having
12     the burden of proof, proves that such change of executive
13     management will result in executive management control by a
14     person or persons who are not of good moral character or
15     who do not meet the franchiser's existing and, with
16     consideration given to the volume of sales and service of
17     the dealership, uniformly applied minimum business
18     experience standards in the market area. However where the
19     manufacturer rejects a proposed change in executive
20     management control, the manufacturer shall give written
21     notice of his reasons to the dealer within 60 days of
22     notice to the manufacturer by the dealer of the proposed
23     change. If the manufacturer does not send a letter to the
24     franchisee by certified mail, return receipt requested,
25     within 60 days from receipt by the manufacturer of the
26     proposed change, then the change of the executive

 

 

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1     management control of the franchisee shall be deemed
2     accepted as proposed by the franchisee, and the
3     manufacturer shall give immediate effect to such change;
4         (5) to prevent or attempt to prevent by contract or
5     otherwise any motor vehicle dealer from establishing or
6     changing the capital structure of his dealership or the
7     means by or through which he finances the operation
8     thereof; provided the dealer meets any reasonable capital
9     standards agreed to between the dealer and the
10     manufacturer, distributor or wholesaler, who may require
11     that the sources, method and manner by which the dealer
12     finances or intends to finance its operation, equipment or
13     facilities be fully disclosed;
14         (6) to refuse to give effect to or prevent or attempt
15     to prevent by contract or otherwise any motor vehicle
16     dealer or any officer, partner or stockholder of any motor
17     vehicle dealer from selling or transferring any part of the
18     interest of any of them to any other person or persons or
19     party or parties unless such sale or transfer is to a
20     transferee who would not otherwise qualify for a new motor
21     vehicle dealers license under "The Illinois Vehicle Code"
22     or unless the franchiser, having the burden of proof,
23     proves that such sale or transfer is to a person or party
24     who is not of good moral character or does not meet the
25     franchiser's existing and reasonable capital standards
26     and, with consideration given to the volume of sales and

 

 

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1     service of the dealership, uniformly applied minimum
2     business experience standards in the market area. However,
3     nothing herein shall be construed to prevent a franchiser
4     from implementing affirmative action programs providing
5     business opportunities for minorities or from complying
6     with applicable federal, State or local law:
7             (A) If the manufacturer intends to refuse to
8         approve the sale or transfer of all or a part of the
9         interest, then it shall, within 60 days from receipt of
10         the completed application forms generally utilized by
11         a manufacturer to conduct its review and a copy of all
12         agreements regarding the proposed transfer, send a
13         letter by certified mail, return receipt requested,
14         advising the franchisee of any refusal to approve the
15         sale or transfer of all or part of the interest and
16         shall state that the dealer only has 30 days from the
17         receipt of the notice to file with the Motor Vehicle
18         Review Board a written protest against the proposed
19         action. The notice shall set forth specific criteria
20         used to evaluate the prospective transferee and the
21         grounds for refusing to approve the sale or transfer to
22         that transferee. Within 30 days from the franchisee's
23         receipt of the manufacturer's notice, the franchisee
24         may file with the Board a written protest against the
25         proposed action.
26             When a protest has been timely filed, the Board

 

 

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1         shall enter an order, fixing the date (within 60 days
2         of the date of such order), time, and place of a
3         hearing on the protest, required under Sections 12 and
4         29 of this Act, and send by certified mail, return
5         receipt requested, a copy of the order to the
6         manufacturer that filed notice of intention of the
7         proposed action and to the protesting franchisee.
8             The manufacturer shall have the burden of proof to
9         establish that good cause exists to refuse to approve
10         the sale or transfer to the transferee. The
11         determination whether good cause exists to refuse to
12         approve the sale or transfer shall be made by the Board
13         under subdivisions (6)(B). The manufacturer shall not
14         refuse to approve the sale or transfer by a dealer or
15         an officer, partner, or stockholder of a franchise or
16         any part of the interest to any person or persons
17         before the hearing process is concluded as prescribed
18         by this Act, and thereafter if the Board determines
19         that the manufacturer has failed to meet its burden of
20         proof and that good cause does not exist to refuse to
21         approve the sale or transfer to the transferee.
22             (B) Good cause to refuse to approve such sale or
23         transfer under this Section is established when such
24         sale or transfer is to a transferee who would not
25         otherwise qualify for a new motor vehicle dealers
26         license under "The Illinois Vehicle Code" or such sale

 

 

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1         or transfer is to a person or party who is not of good
2         moral character or does not meet the franchiser's
3         existing and reasonable capital standards and, with
4         consideration given to the volume of sales and service
5         of the dealership, uniformly applied minimum business
6         experience standards in the market area.
7         (7) to obtain money, goods, services, anything of
8     value, or any other benefit from any other person with whom
9     the motor vehicle dealer does business, on account of or in
10     relation to the transactions between the dealer and the
11     other person as compensation, except for services actually
12     rendered, unless such benefit is promptly accounted for and
13     transmitted to the motor vehicle dealer;
14         (8) to grant an additional franchise in the relevant
15     market area of an existing franchise of the same line make
16     or to relocate an existing motor vehicle dealership within
17     or into a relevant market area of an existing franchise of
18     the same line make. However, if the manufacturer wishes to
19     grant such an additional franchise to an independent person
20     in a bona fide relationship in which such person is
21     prepared to make a significant investment subject to loss
22     in such a dealership, or if the manufacturer wishes to
23     relocate an existing motor vehicle dealership, then the
24     manufacturer shall send a letter by certified mail, return
25     receipt requested, to each existing dealer or dealers of
26     the same line make whose relevant market area includes the

 

 

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

 

 

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1     dealers of the same line make whose relevant market area
2     includes the proposed location of the additional or
3     relocated franchise.
4         When more than one protest is filed against the grant
5     or establishment of the additional or relocated franchise
6     of the same line make, the Board may consolidate the
7     hearings to expedite disposition of the matter. The
8     manufacturer shall have the burden of proof to establish
9     that good cause exists to allow the grant or establishment
10     of the additional or relocated franchise. The manufacturer
11     may not grant or establish the additional franchise or
12     relocate the existing franchise before the hearing process
13     is concluded as prescribed by this Act, and thereafter if
14     the Board determines that the manufacturer has failed to
15     meet its burden of proof and that good cause does not exist
16     to allow the grant or establishment of the additional
17     franchise or relocation of the existing franchise.
18         The determination whether good cause exists for
19     allowing the grant or establishment of an additional
20     franchise or relocated existing franchise, shall be made by
21     the Board under subsection (c) of Section 12 of this Act.
22     If the manufacturer seeks to enter into a contract,
23     agreement or other arrangement with any person,
24     establishing any additional motor vehicle dealership or
25     other facility, limited to the sale of factory repurchase
26     vehicles or late model vehicles, then the manufacturer

 

 

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1     shall follow the notice procedures set forth in this
2     Section and the determination whether good cause exists for
3     allowing the proposed agreement shall be made by the Board
4     under subsection (c) of Section 12, with the manufacturer
5     having the burden of proof.
6             A. (Blank).
7             B. For the purposes of this Section, appointment of
8         a successor motor vehicle dealer at the same location
9         as its predecessor, or within 2 miles of such location,
10         or the relocation of an existing dealer or franchise
11         within 2 miles of the relocating dealer's or
12         franchisee's existing location, shall not be construed
13         as a grant, establishment or the entering into of an
14         additional franchise or selling agreement, or a
15         relocation of an existing franchise. The reopening of a
16         motor vehicle dealership that has not been in operation
17         for 18 months or more shall be deemed the grant of an
18         additional franchise or selling agreement.
19             C. This Section does not apply to the relocation of
20         an existing dealership or franchise in a county having
21         a population of more than 300,000 persons when the new
22         location is within the dealer's current relevant
23         market area, provided the new location is more than 7
24         miles from the nearest dealer of the same line make.
25         This Section does not apply to the relocation of an
26         existing dealership or franchise in a county having a

 

 

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1         population of less than 300,000 persons when the new
2         location is within the dealer's current relevant
3         market area, provided the new location is more than 12
4         miles from the nearest dealer of the same line make. A
5         dealer that would be farther away from the new location
6         of an existing dealership or franchise of the same line
7         make after a relocation may not file a written protest
8         against the relocation with the Motor Vehicle Review
9         Board.
10             D. Nothing in this Section shall be construed to
11         prevent a franchiser from implementing affirmative
12         action programs providing business opportunities for
13         minorities or from complying with applicable federal,
14         State or local law;
15         (9) to require a motor vehicle dealer to assent to a
16     release, assignment, novation, waiver or estoppel which
17     would relieve any person from liability imposed by this
18     Act;
19         (10) to prevent or refuse to give effect to the
20     succession to the ownership or management control of a
21     dealership by any legatee under the will of a dealer or to
22     an heir under the laws of descent and distribution of this
23     State unless the franchisee has designated a successor to
24     the ownership or management control under the succession
25     provisions of the franchise. Unless the franchiser, having
26     the burden of proof, proves that the successor is a person

 

 

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1     who is not of good moral character or does not meet the
2     franchiser's existing and reasonable capital standards
3     and, with consideration given to the volume of sales and
4     service of the dealership, uniformly applied minimum
5     business experience standards in the market area, any
6     designated successor of a dealer or franchisee may succeed
7     to the ownership or management control of a dealership
8     under the existing franchise if:
9                 (i) The designated successor gives the
10             franchiser written notice by certified mail,
11             return receipt requested, of his or her intention
12             to succeed to the ownership of the dealer within 60
13             days of the dealer's death or incapacity; and
14                 (ii) The designated successor agrees to be
15             bound by all the terms and conditions of the
16             existing franchise.
17         Notwithstanding the foregoing, in the event the motor
18     vehicle dealer or franchisee and manufacturer have duly
19     executed an agreement concerning succession rights prior
20     to the dealer's death or incapacitation, the agreement
21     shall be observed.
22             (A) If the franchiser intends to refuse to honor
23         the successor to the ownership of a deceased or
24         incapacitated dealer or franchisee under an existing
25         franchise agreement, the franchiser shall send a
26         letter by certified mail, return receipt requested, to

 

 

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

 

 

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1         filed the notice of intention of the proposed action
2         and to the protesting designee or such other person.
3             The manufacturer shall have the burden of proof to
4         establish that good cause exists to refuse to honor the
5         succession and discontinue the existing franchise
6         agreement. The determination whether good cause exists
7         to refuse to honor the succession shall be made by the
8         Board under subdivision (B) of this paragraph (10). The
9         manufacturer shall not refuse to honor the succession
10         or discontinue the existing franchise agreement before
11         the hearing process is concluded as prescribed by this
12         Act, and thereafter if the Board determines that it has
13         failed to meet its burden of proof and that good cause
14         does not exist to refuse to honor the succession and
15         discontinue the existing franchise agreement.
16             (B) No manufacturer shall impose any conditions
17         upon honoring the succession and continuing the
18         existing franchise agreement with the designated
19         successor other than that the franchisee has
20         designated a successor to the ownership or management
21         control under the succession provisions of the
22         franchise, or that the designated successor is of good
23         moral character or meets the reasonable capital
24         standards and, with consideration given to the volume
25         of sales and service of the dealership, uniformly
26         applied minimum business experience standards in the

 

 

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

 

 

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1     a population of more than 300,000 persons, or within 12
2     miles of the proposed franchise location in a county having
3     a population of less than 300,000 persons; or
4         (13) to prevent or attempt to prevent any new motor
5     vehicle dealer from establishing any additional motor
6     vehicle dealership or other facility limited to the sale of
7     factory repurchase vehicles or late model vehicles or
8     otherwise offering for sale factory repurchase vehicles of
9     the same line make at an existing franchise by failing to
10     make available any contract, agreement or other
11     arrangement which is made available or otherwise offered to
12     any person.
13     (f) It is deemed a violation for a manufacturer, a
14 distributor, a wholesale, a distributor branch or division, a
15 factory branch or division, or a wholesale branch or division,
16 or officer, agent, broker, shareholder, except a shareholder of
17 1% or less of the outstanding shares of any class of securities
18 of a manufacturer, distributor, or wholesaler which is a
19 publicly traded corporation, or other representative, directly
20 or indirectly, to own or operate a place of business as a motor
21 vehicle franchisee or motor vehicle financing affiliate,
22 except that, this subsection shall not prohibit the ownership
23 or operation of a place of business by a manufacturer,
24 distributor, or wholesaler for a period, not to exceed 18
25 months, during the transition from one motor vehicle franchisee
26 to another; or the investment in a motor vehicle franchisee by

 

 

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1 a manufacturer, distributor, or wholesaler if the investment is
2 for the sole purpose of enabling a partner or shareholder in
3 that motor vehicle franchisee to acquire an interest in that
4 motor vehicle franchisee and that partner or shareholder is not
5 otherwise employed by or associated with the manufacturer,
6 distributor, or wholesaler and would not otherwise have the
7 requisite capital investment funds to invest in the motor
8 vehicle franchisee, and has the right to purchase the entire
9 equity interest of the manufacturer, distributor, or
10 wholesaler in the motor vehicle franchisee within a reasonable
11 period of time not to exceed 5 years.
12 (Source: P.A. 94-287, eff. 1-1-06.)