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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, 10oras 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.)