Bill Text: IL HB5684 | 2013-2014 | 98th General Assembly | Amended
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Amends the Illinois Vehicle Code. Provides that the Secretary of State shall suspend or refuse to issue or renew the license of a motor vehicle dealer, transporter, wrecker, or rebuilder for violations of any tax administered by the Department of Revenue (currently, the Retailers' Occupation Tax Act only). Effective immediately.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Passed) 2014-08-26 - Public Act . . . . . . . . . 98-1080 [HB5684 Detail]
Download: Illinois-2013-HB5684-Amended.html
Bill Title: Amends the Illinois Vehicle Code. Provides that the Secretary of State shall suspend or refuse to issue or renew the license of a motor vehicle dealer, transporter, wrecker, or rebuilder for violations of any tax administered by the Department of Revenue (currently, the Retailers' Occupation Tax Act only). Effective immediately.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Passed) 2014-08-26 - Public Act . . . . . . . . . 98-1080 [HB5684 Detail]
Download: Illinois-2013-HB5684-Amended.html
| |||||||
| |||||||
| |||||||
1 | AMENDMENT TO HOUSE BILL 5684
| ||||||
2 | AMENDMENT NO. ______. Amend House Bill 5684 by replacing | ||||||
3 | everything after the enacting clause with the following:
| ||||||
4 | "Section 5. If and only if House Bill 2317 of the 98th | ||||||
5 | General Assembly becomes law, then the Use Tax Act is amended | ||||||
6 | by changing Section 2 as follows:
| ||||||
7 | (35 ILCS 105/2) (from Ch. 120, par. 439.2)
| ||||||
8 | Sec. 2. "Use" means the exercise by any person of any right | ||||||
9 | or power over
tangible personal property incident to the | ||||||
10 | ownership of that property,
except that it does not include the | ||||||
11 | sale of such property in any form as
tangible personal property | ||||||
12 | in the regular course of business to the extent
that such | ||||||
13 | property is not first subjected to a use for which it was
| ||||||
14 | purchased, and does not include the use of such property by its | ||||||
15 | owner for
demonstration purposes: Provided that the property | ||||||
16 | purchased is deemed to
be purchased for the purpose of resale, |
| |||||||
| |||||||
1 | despite first being used, to the
extent to which it is resold | ||||||
2 | as an ingredient of an intentionally produced
product or | ||||||
3 | by-product of manufacturing. "Use" does not mean the | ||||||
4 | demonstration
use or interim use of tangible personal property | ||||||
5 | by a retailer before he sells
that tangible personal property. | ||||||
6 | For watercraft or aircraft, if the period of
demonstration use | ||||||
7 | or interim use by the retailer exceeds 18 months,
the retailer
| ||||||
8 | shall pay on the retailers' original cost price the tax imposed | ||||||
9 | by this Act,
and no credit for that tax is permitted if the | ||||||
10 | watercraft or aircraft is
subsequently sold by the retailer. | ||||||
11 | "Use" does not mean the physical
incorporation of tangible | ||||||
12 | personal property, to the extent not first subjected
to a use | ||||||
13 | for which it was purchased, as an ingredient or constituent, | ||||||
14 | into
other tangible personal property (a) which is sold in the | ||||||
15 | regular course of
business or (b) which the person | ||||||
16 | incorporating such ingredient or constituent
therein has | ||||||
17 | undertaken at the time of such purchase to cause to be | ||||||
18 | transported
in interstate commerce to destinations outside the | ||||||
19 | State of Illinois: Provided
that the property purchased is | ||||||
20 | deemed to be purchased for the purpose of
resale, despite first | ||||||
21 | being used, to the extent to which it is resold as an
| ||||||
22 | ingredient of an intentionally produced product or by-product | ||||||
23 | of manufacturing.
| ||||||
24 | "Watercraft" means a Class 2, Class 3, or Class 4 | ||||||
25 | watercraft as defined in
Section 3-2 of the Boat Registration | ||||||
26 | and Safety Act, a personal watercraft, or
any boat equipped |
| |||||||
| |||||||
1 | with an inboard motor.
| ||||||
2 | "Purchase at retail" means the acquisition of the ownership | ||||||
3 | of or title
to tangible personal property through a sale at | ||||||
4 | retail.
| ||||||
5 | "Purchaser" means anyone who, through a sale at retail, | ||||||
6 | acquires the
ownership of tangible personal property for a | ||||||
7 | valuable consideration.
| ||||||
8 | "Sale at retail" means any transfer of the ownership of or | ||||||
9 | title to
tangible personal property to a purchaser, for the | ||||||
10 | purpose of use, and not
for the purpose of resale in any form | ||||||
11 | as tangible personal property to the
extent not first subjected | ||||||
12 | to a use for which it was purchased, for a
valuable | ||||||
13 | consideration: Provided that the property purchased is deemed | ||||||
14 | to
be purchased for the purpose of resale, despite first being | ||||||
15 | used, to the
extent to which it is resold as an ingredient of | ||||||
16 | an intentionally produced
product or by-product of | ||||||
17 | manufacturing. For this purpose, slag produced as
an incident | ||||||
18 | to manufacturing pig iron or steel and sold is considered to be
| ||||||
19 | an intentionally produced by-product of manufacturing. "Sale | ||||||
20 | at retail"
includes any such transfer made for resale unless | ||||||
21 | made in compliance with
Section 2c of the Retailers' Occupation | ||||||
22 | Tax Act, as incorporated by
reference into Section 12 of this | ||||||
23 | Act. Transactions whereby the possession
of the property is | ||||||
24 | transferred but the seller retains the title as security
for | ||||||
25 | payment of the selling price are sales.
| ||||||
26 | "Sale at retail" shall also be construed to include any |
| |||||||
| |||||||
1 | Illinois
florist's sales transaction in which the purchase | ||||||
2 | order is received in
Illinois by a florist and the sale is for | ||||||
3 | use or consumption, but the
Illinois florist has a florist in | ||||||
4 | another state deliver the property to the
purchaser or the | ||||||
5 | purchaser's donee in such other state.
| ||||||
6 | Nonreusable tangible personal property that is used by | ||||||
7 | persons engaged in
the business of operating a restaurant, | ||||||
8 | cafeteria, or drive-in is a sale for
resale when it is | ||||||
9 | transferred to customers in the ordinary course of business
as | ||||||
10 | part of the sale of food or beverages and is used to deliver, | ||||||
11 | package, or
consume food or beverages, regardless of where | ||||||
12 | consumption of the food or
beverages occurs. Examples of those | ||||||
13 | items include, but are not limited to
nonreusable, paper and | ||||||
14 | plastic cups, plates, baskets, boxes, sleeves, buckets
or other | ||||||
15 | containers, utensils, straws, placemats, napkins, doggie bags, | ||||||
16 | and
wrapping or packaging
materials that are transferred to | ||||||
17 | customers as part of the sale of food or
beverages in the | ||||||
18 | ordinary course of business.
| ||||||
19 | The purchase, employment and transfer of such tangible | ||||||
20 | personal property
as newsprint and ink for the primary purpose | ||||||
21 | of conveying news (with or
without other information) is not a | ||||||
22 | purchase, use or sale of tangible
personal property.
| ||||||
23 | "Selling price" means the consideration for a sale valued | ||||||
24 | in money
whether received in money or otherwise, including | ||||||
25 | cash, credits, property
other than as hereinafter provided, and | ||||||
26 | services, but not including the
value of or credit given for |
| |||||||
| |||||||
1 | traded-in tangible personal property where the
item that is | ||||||
2 | traded-in is of like kind and character as that which is being
| ||||||
3 | sold, and shall be determined without any deduction on account | ||||||
4 | of the cost
of the property sold, the cost of materials used, | ||||||
5 | labor or service cost or
any other expense whatsoever, but does | ||||||
6 | not include interest or finance
charges which appear as | ||||||
7 | separate items on the bill of sale or sales
contract nor | ||||||
8 | charges that are added to prices by sellers on account of the
| ||||||
9 | seller's tax liability under the "Retailers' Occupation Tax | ||||||
10 | Act", or on
account of the seller's duty to collect, from the | ||||||
11 | purchaser, the tax that
is imposed by this Act, or, except as | ||||||
12 | otherwise provided with respect to any cigarette tax imposed by | ||||||
13 | a home rule unit, on account of the seller's tax liability | ||||||
14 | under any local occupation tax administered by the Department, | ||||||
15 | or, except as otherwise provided with respect to any cigarette | ||||||
16 | tax imposed by a home rule unit on account of the seller's duty | ||||||
17 | to collect, from the purchasers, the tax that is imposed under | ||||||
18 | any local use tax administered by the Department. Effective | ||||||
19 | December 1, 1985, "selling price"
shall include charges that | ||||||
20 | are added to prices by sellers on account of the
seller's tax | ||||||
21 | liability under the Cigarette Tax Act, on account of the | ||||||
22 | seller's
duty to collect, from the purchaser, the tax imposed | ||||||
23 | under the Cigarette Use
Tax Act, and on account of the seller's | ||||||
24 | duty to collect, from the purchaser,
any cigarette tax imposed | ||||||
25 | by a home rule unit.
| ||||||
26 | Notwithstanding any law to the contrary, for any motor |
| |||||||
| |||||||
1 | vehicle, as defined in Section 1-146 of the Vehicle Code, that | ||||||
2 | is sold on or after January 1, 2015 July 1, 2014 for the | ||||||
3 | purpose of leasing the vehicle for a defined period that is | ||||||
4 | longer than one year and (1) is a motor vehicle of the second | ||||||
5 | division that: (A) is a self-contained motor vehicle designed | ||||||
6 | or permanently converted to provide living quarters for | ||||||
7 | recreational, camping, or travel use, with direct walk through | ||||||
8 | access to the living quarters from the driver's seat; (B) is of | ||||||
9 | the van configuration designed for the transportation of not | ||||||
10 | less than 7 nor more than 16 passengers; or (C) has a gross | ||||||
11 | vehicle weight rating of 8,000 pounds or less or (2) is a motor | ||||||
12 | vehicle of the first division, "selling price" or "amount of | ||||||
13 | sale" means the consideration received by the lessor pursuant | ||||||
14 | to the lease contract, including amounts due at lease signing | ||||||
15 | and all monthly or other regular payments charged over the term | ||||||
16 | of the lease. Also included in the selling price is any amount | ||||||
17 | received by the lessor from the lessee for the leased vehicle | ||||||
18 | that is not calculated at the time the lease is executed, | ||||||
19 | including, but not limited to, excess mileage charges and | ||||||
20 | charges for excess wear and tear. For sales that occur in | ||||||
21 | Illinois, with respect to any amount received by the lessor | ||||||
22 | from the lessee for the leased vehicle that is not calculated | ||||||
23 | at the time the lease is executed, the lessor who purchased the | ||||||
24 | motor vehicle does not incur the tax imposed by the Use Tax Act | ||||||
25 | on those amounts, and the retailer who makes the retail sale of | ||||||
26 | the motor vehicle to the lessor is not required to collect the |
| |||||||
| |||||||
1 | tax imposed by this Act or to pay the tax imposed by the | ||||||
2 | Retailers' Occupation Tax Act on those amounts. However, the | ||||||
3 | lessor who purchased the motor vehicle assumes the liability | ||||||
4 | for reporting and paying the tax on those amounts directly to | ||||||
5 | the Department in the same form (Illinois Retailers' Occupation | ||||||
6 | Tax, and local retailers' occupation taxes, if applicable) in | ||||||
7 | which the retailer would have reported and paid such tax if the | ||||||
8 | retailer had accounted for the tax to the Department. For | ||||||
9 | amounts received by the lessor from the lessee that are not | ||||||
10 | calculated at the time the lease is executed, the lessor must | ||||||
11 | file the return and pay the tax to the Department by the due | ||||||
12 | date otherwise required by this Act for returns other than | ||||||
13 | transaction returns. If the retailer is entitled under this Act | ||||||
14 | to a discount for collecting and remitting the tax imposed | ||||||
15 | under this Act to the Department with respect to the sale of | ||||||
16 | the motor vehicle to the lessor, then the right to the discount | ||||||
17 | provided in this Act shall be transferred to the lessor with | ||||||
18 | respect to the tax paid by the lessor for any amount received | ||||||
19 | by the lessor from the lessee for the leased vehicle that is | ||||||
20 | not calculated at the time the lease is executed; provided that | ||||||
21 | the discount is only allowed if the return is timely filed and | ||||||
22 | for amounts timely paid. The "selling price" of a motor vehicle | ||||||
23 | that is sold on or after January 1, 2015 July 1, 2014 for the | ||||||
24 | purpose of leasing for a defined period of longer than one year | ||||||
25 | shall not be reduced by the value of or credit given for | ||||||
26 | traded-in tangible personal property owned by the lessor, nor |
| |||||||
| |||||||
1 | shall it be reduced by the value of or credit given for | ||||||
2 | traded-in tangible personal property owned by the lessee, | ||||||
3 | regardless of whether the trade-in value thereof is assigned by | ||||||
4 | the lessee to the lessor. In the case of a motor vehicle that | ||||||
5 | is sold for the purpose of leasing for a defined period of | ||||||
6 | longer than one year, the sale occurs at the time of the | ||||||
7 | delivery of the vehicle, regardless of the due date of any | ||||||
8 | lease payments. A lessor who incurs a Retailers' Occupation Tax | ||||||
9 | liability on the sale of a motor vehicle coming off lease may | ||||||
10 | not take a credit against that liability for the Use Tax the | ||||||
11 | lessor paid upon the purchase of the motor vehicle (or for any | ||||||
12 | tax the lessor paid with respect to any amount received by the | ||||||
13 | lessor from the lessee for the leased vehicle that was not | ||||||
14 | calculated at the time the lease was executed) if the selling | ||||||
15 | price of the motor vehicle at the time of purchase was | ||||||
16 | calculated using the definition of "selling price" as defined | ||||||
17 | in this paragraph. Notwithstanding any other provision of this | ||||||
18 | Act to the contrary, lessors shall file all returns and make | ||||||
19 | all payments required under this paragraph to the Department by | ||||||
20 | electronic means in the manner and form as required by the | ||||||
21 | Department. This paragraph does not apply to leases of motor | ||||||
22 | vehicles for which, at the time the lease is entered into, the | ||||||
23 | term of the lease is not a defined period, including leases | ||||||
24 | with a defined initial period with the option to continue the | ||||||
25 | lease on a month-to-month or other basis beyond the initial | ||||||
26 | defined period. |
| |||||||
| |||||||
1 | The phrase "like kind and character" shall be liberally | ||||||
2 | construed
(including but not limited to any form of motor | ||||||
3 | vehicle for any form of
motor vehicle, or any kind of farm or | ||||||
4 | agricultural implement for any other
kind of farm or | ||||||
5 | agricultural implement), while not including a kind of item
| ||||||
6 | which, if sold at retail by that retailer, would be exempt from | ||||||
7 | retailers'
occupation tax and use tax as an isolated or | ||||||
8 | occasional sale.
| ||||||
9 | "Department" means the Department of Revenue.
| ||||||
10 | "Person" means any natural individual, firm, partnership, | ||||||
11 | association,
joint stock company, joint adventure, public or | ||||||
12 | private corporation, limited
liability company, or a
receiver, | ||||||
13 | executor, trustee, guardian or other representative appointed
| ||||||
14 | by order of any court.
| ||||||
15 | "Retailer" means and includes every person engaged in the | ||||||
16 | business of
making sales at retail as defined in this Section.
| ||||||
17 | A person who holds himself or herself out as being engaged | ||||||
18 | (or who habitually
engages) in selling tangible personal | ||||||
19 | property at retail is a retailer
hereunder with respect to such | ||||||
20 | sales (and not primarily in a service
occupation) | ||||||
21 | notwithstanding the fact that such person designs and produces
| ||||||
22 | such tangible personal property on special order for the | ||||||
23 | purchaser and in
such a way as to render the property of value | ||||||
24 | only to such purchaser, if
such tangible personal property so | ||||||
25 | produced on special order serves
substantially the same | ||||||
26 | function as stock or standard items of tangible
personal |
| |||||||
| |||||||
1 | property that are sold at retail.
| ||||||
2 | A person whose activities are organized and conducted | ||||||
3 | primarily as a
not-for-profit service enterprise, and who | ||||||
4 | engages in selling tangible
personal property at retail | ||||||
5 | (whether to the public or merely to members and
their guests) | ||||||
6 | is a retailer with respect to such transactions, excepting
only | ||||||
7 | a person organized and operated exclusively for charitable, | ||||||
8 | religious
or educational purposes either (1), to the extent of | ||||||
9 | sales by such person
to its members, students, patients or | ||||||
10 | inmates of tangible personal property
to be used primarily for | ||||||
11 | the purposes of such person, or (2), to the extent
of sales by | ||||||
12 | such person of tangible personal property which is not sold or
| ||||||
13 | offered for sale by persons organized for profit. The selling | ||||||
14 | of school
books and school supplies by schools at retail to | ||||||
15 | students is not
"primarily for the purposes of" the school | ||||||
16 | which does such selling. This
paragraph does not apply to nor | ||||||
17 | subject to taxation occasional dinners,
social or similar | ||||||
18 | activities of a person organized and operated exclusively
for | ||||||
19 | charitable, religious or educational purposes, whether or not | ||||||
20 | such
activities are open to the public.
| ||||||
21 | A person who is the recipient of a grant or contract under | ||||||
22 | Title VII of
the Older Americans Act of 1965 (P.L. 92-258) and | ||||||
23 | serves meals to
participants in the federal Nutrition Program | ||||||
24 | for the Elderly in return for
contributions established in | ||||||
25 | amount by the individual participant pursuant
to a schedule of | ||||||
26 | suggested fees as provided for in the federal Act is not a
|
| |||||||
| |||||||
1 | retailer under this Act with respect to such transactions.
| ||||||
2 | Persons who engage in the business of transferring tangible | ||||||
3 | personal
property upon the redemption of trading stamps are | ||||||
4 | retailers hereunder when
engaged in such business.
| ||||||
5 | The isolated or occasional sale of tangible personal | ||||||
6 | property at retail
by a person who does not hold himself out as | ||||||
7 | being engaged (or who does not
habitually engage) in selling | ||||||
8 | such tangible personal property at retail or
a sale through a | ||||||
9 | bulk vending machine does not make such person a retailer
| ||||||
10 | hereunder. However, any person who is engaged in a business | ||||||
11 | which is not
subject to the tax imposed by the "Retailers' | ||||||
12 | Occupation Tax Act" because
of involving the sale of or a | ||||||
13 | contract to sell real estate or a
construction contract to | ||||||
14 | improve real estate, but who, in the course of
conducting such | ||||||
15 | business, transfers tangible personal property to users or
| ||||||
16 | consumers in the finished form in which it was purchased, and | ||||||
17 | which does
not become real estate, under any provision of a | ||||||
18 | construction contract or
real estate sale or real estate sales | ||||||
19 | agreement entered into with some
other person arising out of or | ||||||
20 | because of such nontaxable business, is a
retailer to the | ||||||
21 | extent of the value of the tangible personal property so
| ||||||
22 | transferred. If, in such transaction, a separate charge is made | ||||||
23 | for the
tangible personal property so transferred, the value of | ||||||
24 | such property, for
the purposes of this Act, is the amount so | ||||||
25 | separately charged, but not less
than the cost of such property | ||||||
26 | to the transferor; if no separate charge is
made, the value of |
| |||||||
| |||||||
1 | such property, for the purposes of this Act, is the cost
to the | ||||||
2 | transferor of such tangible personal property.
| ||||||
3 | "Retailer maintaining a place of business in this State", | ||||||
4 | or any like
term, means and includes any of the following | ||||||
5 | retailers:
| ||||||
6 | 1. A retailer having or maintaining within this State, | ||||||
7 | directly or by
a subsidiary, an office, distribution house, | ||||||
8 | sales house, warehouse or other
place of business, or any | ||||||
9 | agent or other representative operating within this
State | ||||||
10 | under the authority of the retailer or its subsidiary, | ||||||
11 | irrespective of
whether such place of business or agent or | ||||||
12 | other representative is located here
permanently or | ||||||
13 | temporarily, or whether such retailer or subsidiary is | ||||||
14 | licensed
to do business in this State. However, the | ||||||
15 | ownership of property that is
located at the premises of a | ||||||
16 | printer with which the retailer has contracted for
printing | ||||||
17 | and that consists of the final printed product, property | ||||||
18 | that becomes
a part of the final printed product, or copy | ||||||
19 | from which the printed product is
produced shall not result | ||||||
20 | in the retailer being deemed to have or maintain an
office, | ||||||
21 | distribution house, sales house, warehouse, or other place | ||||||
22 | of business
within this State. | ||||||
23 | 1.1. Beginning July 1, 2011, a retailer having a | ||||||
24 | contract with a person located in this State under which | ||||||
25 | the person, for a commission or other consideration based | ||||||
26 | upon the sale of tangible personal property by the |
| |||||||
| |||||||
1 | retailer, directly or indirectly refers potential | ||||||
2 | customers to the retailer by a link on the person's | ||||||
3 | Internet website. The provisions of this paragraph 1.1 | ||||||
4 | shall apply only if the cumulative gross receipts from | ||||||
5 | sales of tangible personal property by the retailer to | ||||||
6 | customers who are referred to the retailer by all persons | ||||||
7 | in this State under such contracts exceed $10,000 during | ||||||
8 | the preceding 4 quarterly periods ending on the last day of | ||||||
9 | March, June, September, and December. | ||||||
10 | 1.2. Beginning July 1, 2011, a retailer having a | ||||||
11 | contract with a person located in this State under which: | ||||||
12 | A. the retailer sells the same or substantially | ||||||
13 | similar line of products as the person located in this | ||||||
14 | State and does so using an identical or substantially | ||||||
15 | similar name, trade name, or trademark as the person | ||||||
16 | located in this State; and | ||||||
17 | B. the retailer provides a commission or other | ||||||
18 | consideration to the person located in this State based | ||||||
19 | upon the sale of tangible personal property by the | ||||||
20 | retailer. | ||||||
21 | The provisions of this paragraph 1.2 shall apply only if | ||||||
22 | the cumulative gross receipts from sales of tangible | ||||||
23 | personal property by the retailer to customers in this | ||||||
24 | State under all such contracts exceed $10,000 during the | ||||||
25 | preceding 4 quarterly periods ending on the last day of | ||||||
26 | March, June, September, and December.
|
| |||||||
| |||||||
1 | 2. A retailer soliciting orders for tangible personal | ||||||
2 | property by
means of a telecommunication or television | ||||||
3 | shopping system (which utilizes toll
free numbers) which is | ||||||
4 | intended by the retailer to be broadcast by cable
| ||||||
5 | television or other means of broadcasting, to consumers | ||||||
6 | located in this State.
| ||||||
7 | 3. A retailer, pursuant to a contract with a | ||||||
8 | broadcaster or publisher
located in this State, soliciting | ||||||
9 | orders for tangible personal property by
means of | ||||||
10 | advertising which is disseminated primarily to consumers | ||||||
11 | located in
this State and only secondarily to bordering | ||||||
12 | jurisdictions.
| ||||||
13 | 4. A retailer soliciting orders for tangible personal | ||||||
14 | property by mail
if the solicitations are substantial and | ||||||
15 | recurring and if the retailer benefits
from any banking, | ||||||
16 | financing, debt collection, telecommunication, or | ||||||
17 | marketing
activities occurring in this State or benefits | ||||||
18 | from the location in this State
of authorized installation, | ||||||
19 | servicing, or repair facilities.
| ||||||
20 | 5. A retailer that is owned or controlled by the same | ||||||
21 | interests that own
or control any retailer engaging in | ||||||
22 | business in the same or similar line of
business in this | ||||||
23 | State.
| ||||||
24 | 6. A retailer having a franchisee or licensee operating | ||||||
25 | under its trade
name if the franchisee or licensee is | ||||||
26 | required to collect the tax under this
Section.
|
| |||||||
| |||||||
1 | 7. A retailer, pursuant to a contract with a cable | ||||||
2 | television operator
located in this State, soliciting | ||||||
3 | orders for tangible personal property by
means of | ||||||
4 | advertising which is transmitted or distributed over a | ||||||
5 | cable
television system in this State.
| ||||||
6 | 8. A retailer engaging in activities in Illinois, which | ||||||
7 | activities in
the state in which the retail business | ||||||
8 | engaging in such activities is located
would constitute | ||||||
9 | maintaining a place of business in that state.
| ||||||
10 | "Bulk vending machine" means a vending machine,
containing | ||||||
11 | unsorted confections, nuts, toys, or other items designed
| ||||||
12 | primarily to be used or played with by children
which, when a | ||||||
13 | coin or coins of a denomination not larger than $0.50 are | ||||||
14 | inserted, are dispensed in equal portions, at random and
| ||||||
15 | without selection by the customer.
| ||||||
16 | (Source: P.A. 95-723, eff. 6-23-08; 96-1544, eff. 3-10-11; | ||||||
17 | 09800HB2317enr.)
| ||||||
18 | Section 10. If and only if House Bill 2317 of the 98th | ||||||
19 | General Assembly becomes law, then the Retailers' Occupation | ||||||
20 | Tax Act is amended by changing Section 1 as follows:
| ||||||
21 | (35 ILCS 120/1) (from Ch. 120, par. 440)
| ||||||
22 | Sec. 1. Definitions. "Sale at retail" means any transfer of | ||||||
23 | the
ownership of or title to
tangible personal property to a | ||||||
24 | purchaser, for the purpose of use or
consumption, and not for |
| |||||||
| |||||||
1 | the purpose of resale in any form as tangible
personal property | ||||||
2 | to the extent not first subjected to a use for which it
was | ||||||
3 | purchased, for a valuable consideration: Provided that the | ||||||
4 | property
purchased is deemed to be purchased for the purpose of | ||||||
5 | resale, despite
first being used, to the extent to which it is | ||||||
6 | resold as an ingredient of
an intentionally produced product or | ||||||
7 | byproduct of manufacturing. For this
purpose, slag produced as | ||||||
8 | an incident to manufacturing pig iron or steel
and sold is | ||||||
9 | considered to be an intentionally produced byproduct of
| ||||||
10 | manufacturing. Transactions whereby the possession of the | ||||||
11 | property is
transferred but the seller retains the title as | ||||||
12 | security for payment of the
selling price shall be deemed to be | ||||||
13 | sales.
| ||||||
14 | "Sale at retail" shall be construed to include any transfer | ||||||
15 | of the
ownership of or title to tangible personal property to a | ||||||
16 | purchaser, for use
or consumption by any other person to whom | ||||||
17 | such purchaser may transfer the
tangible personal property | ||||||
18 | without a valuable consideration, and to include
any transfer, | ||||||
19 | whether made for or without a valuable consideration, for
| ||||||
20 | resale in any form as tangible personal property unless made in | ||||||
21 | compliance
with Section 2c of this Act.
| ||||||
22 | Sales of tangible personal property, which property, to the | ||||||
23 | extent not
first subjected to a use for which it was purchased, | ||||||
24 | as an ingredient or
constituent, goes into and forms a part of | ||||||
25 | tangible personal property
subsequently the subject of a "Sale | ||||||
26 | at retail", are not sales at retail as
defined in this Act: |
| |||||||
| |||||||
1 | Provided that the property purchased is deemed to be
purchased | ||||||
2 | for the purpose of resale, despite first being used, to the
| ||||||
3 | extent to which it is resold as an ingredient of an | ||||||
4 | intentionally produced
product or byproduct of manufacturing.
| ||||||
5 | "Sale at retail" shall be construed to include any Illinois | ||||||
6 | florist's
sales transaction in which the purchase order is | ||||||
7 | received in Illinois by a
florist and the sale is for use or | ||||||
8 | consumption, but the Illinois florist
has a florist in another | ||||||
9 | state deliver the property to the purchaser or the
purchaser's | ||||||
10 | donee in such other state.
| ||||||
11 | Nonreusable tangible personal property that is used by | ||||||
12 | persons engaged in
the business of operating a restaurant, | ||||||
13 | cafeteria, or drive-in is a sale for
resale when it is | ||||||
14 | transferred to customers in the ordinary course of business
as | ||||||
15 | part of the sale of food or beverages and is used to deliver, | ||||||
16 | package, or
consume food or beverages, regardless of where | ||||||
17 | consumption of the food or
beverages occurs. Examples of those | ||||||
18 | items include, but are not limited to
nonreusable, paper and | ||||||
19 | plastic cups, plates, baskets, boxes, sleeves, buckets
or other | ||||||
20 | containers, utensils, straws, placemats, napkins, doggie bags, | ||||||
21 | and
wrapping or packaging
materials that are transferred to | ||||||
22 | customers as part of the sale of food or
beverages in the | ||||||
23 | ordinary course of business.
| ||||||
24 | The purchase, employment and transfer of such tangible | ||||||
25 | personal property
as newsprint and ink for the primary purpose | ||||||
26 | of conveying news (with or
without other information) is not a |
| |||||||
| |||||||
1 | purchase, use or sale of tangible
personal property.
| ||||||
2 | A person whose activities are organized and conducted | ||||||
3 | primarily as a
not-for-profit service enterprise, and who | ||||||
4 | engages in selling tangible
personal property at retail | ||||||
5 | (whether to the public or merely to members and
their guests) | ||||||
6 | is engaged in the business of selling tangible personal
| ||||||
7 | property at retail with respect to such transactions, excepting | ||||||
8 | only a
person organized and operated exclusively for | ||||||
9 | charitable, religious or
educational purposes either (1), to | ||||||
10 | the extent of sales by such person to
its members, students, | ||||||
11 | patients or inmates of tangible personal property to
be used | ||||||
12 | primarily for the purposes of such person, or (2), to the | ||||||
13 | extent of
sales by such person of tangible personal property | ||||||
14 | which is not sold or
offered for sale by persons organized for | ||||||
15 | profit. The selling of school
books and school supplies by | ||||||
16 | schools at retail to students is not
"primarily for the | ||||||
17 | purposes of" the school which does such selling. The
provisions | ||||||
18 | of this paragraph shall not apply to nor subject to taxation
| ||||||
19 | occasional dinners, socials or similar activities of a person | ||||||
20 | organized and
operated exclusively for charitable, religious | ||||||
21 | or educational purposes,
whether or not such activities are | ||||||
22 | open to the public.
| ||||||
23 | A person who is the recipient of a grant or contract under | ||||||
24 | Title VII of
the Older Americans Act of 1965 (P.L. 92-258) and | ||||||
25 | serves meals to
participants in the federal Nutrition Program | ||||||
26 | for the Elderly in return for
contributions established in |
| |||||||
| |||||||
1 | amount by the individual participant pursuant
to a schedule of | ||||||
2 | suggested fees as provided for in the federal Act is not
| ||||||
3 | engaged in the business of selling tangible personal property | ||||||
4 | at retail
with respect to such transactions.
| ||||||
5 | "Purchaser" means anyone who, through a sale at retail, | ||||||
6 | acquires the
ownership of or title to tangible personal | ||||||
7 | property for a valuable
consideration.
| ||||||
8 | "Reseller of motor fuel" means any person engaged in the | ||||||
9 | business of selling
or delivering or transferring title of | ||||||
10 | motor fuel to another person
other than for use or consumption.
| ||||||
11 | No person shall act as a reseller of motor fuel within this | ||||||
12 | State without
first being registered as a reseller pursuant to | ||||||
13 | Section 2c or a retailer
pursuant to Section 2a.
| ||||||
14 | "Selling price" or the "amount of sale" means the | ||||||
15 | consideration for a
sale valued in money whether received in | ||||||
16 | money or otherwise, including
cash, credits, property, other | ||||||
17 | than as hereinafter provided, and services,
but not including | ||||||
18 | the value of or credit given for traded-in tangible
personal | ||||||
19 | property where the item that is traded-in is of like kind and
| ||||||
20 | character as that which is being sold, and shall be determined | ||||||
21 | without any
deduction on account of the cost of the property | ||||||
22 | sold, the cost of
materials used, labor or service cost or any | ||||||
23 | other expense whatsoever, but
does not include charges that are | ||||||
24 | added to prices by sellers on account of
the seller's tax | ||||||
25 | liability under this Act, or on account of the seller's
duty to | ||||||
26 | collect, from the purchaser, the tax that is imposed by the Use |
| |||||||
| |||||||
1 | Tax
Act, or, except as otherwise provided with respect to any | ||||||
2 | cigarette tax imposed by a home rule unit, on account of the | ||||||
3 | seller's tax liability under any local occupation tax | ||||||
4 | administered by the Department, or, except as otherwise | ||||||
5 | provided with respect to any cigarette tax imposed by a home | ||||||
6 | rule unit on account of the seller's duty to collect, from the | ||||||
7 | purchasers, the tax that is imposed under any local use tax | ||||||
8 | administered by the Department.
Effective December 1, 1985, | ||||||
9 | "selling price" shall include charges that
are added to prices | ||||||
10 | by sellers on account of the seller's
tax liability under the | ||||||
11 | Cigarette Tax Act, on account of the sellers'
duty to collect, | ||||||
12 | from the purchaser, the tax imposed under the Cigarette
Use Tax | ||||||
13 | Act, and on account of the seller's duty to collect, from the
| ||||||
14 | purchaser, any cigarette tax imposed by a home rule unit.
| ||||||
15 | Notwithstanding any law to the contrary, for any motor | ||||||
16 | vehicle, as defined in Section 1-146 of the Vehicle Code, that | ||||||
17 | is sold on or after January 1, 2015 July 1, 2014 for the | ||||||
18 | purpose of leasing the vehicle for a defined period that is | ||||||
19 | longer than one year and (1) is a motor vehicle of the second | ||||||
20 | division that: (A) is a self-contained motor vehicle designed | ||||||
21 | or permanently converted to provide living quarters for | ||||||
22 | recreational, camping, or travel use, with direct walk through | ||||||
23 | access to the living quarters from the driver's seat; (B) is of | ||||||
24 | the van configuration designed for the transportation of not | ||||||
25 | less than 7 nor more than 16 passengers; or (C) has a gross | ||||||
26 | vehicle weight rating of 8,000 pounds or less or (2) is a motor |
| |||||||
| |||||||
1 | vehicle of the first division, "selling price" or "amount of | ||||||
2 | sale" means the consideration received by the lessor pursuant | ||||||
3 | to the lease contract, including amounts due at lease signing | ||||||
4 | and all monthly or other regular payments charged over the term | ||||||
5 | of the lease. Also included in the selling price is any amount | ||||||
6 | received by the lessor from the lessee for the leased vehicle | ||||||
7 | that is not calculated at the time the lease is executed, | ||||||
8 | including, but not limited to, excess mileage charges and | ||||||
9 | charges for excess wear and tear. For sales that occur in | ||||||
10 | Illinois, with respect to any amount received by the lessor | ||||||
11 | from the lessee for the leased vehicle that is not calculated | ||||||
12 | at the time the lease is executed, the lessor who purchased the | ||||||
13 | motor vehicle does not incur the tax imposed by the Use Tax Act | ||||||
14 | on those amounts, and the retailer who makes the retail sale of | ||||||
15 | the motor vehicle to the lessor is not required to collect the | ||||||
16 | tax imposed by the Use Tax Act or to pay the tax imposed by this | ||||||
17 | Act on those amounts. However, the lessor who purchased the | ||||||
18 | motor vehicle assumes the liability for reporting and paying | ||||||
19 | the tax on those amounts directly to the Department in the same | ||||||
20 | form (Illinois Retailers' Occupation Tax, and local retailers' | ||||||
21 | occupation taxes, if applicable) in which the retailer would | ||||||
22 | have reported and paid such tax if the retailer had accounted | ||||||
23 | for the tax to the Department. For amounts received by the | ||||||
24 | lessor from the lessee that are not calculated at the time the | ||||||
25 | lease is executed, the lessor must file the return and pay the | ||||||
26 | tax to the Department by the due date otherwise required by |
| |||||||
| |||||||
1 | this Act for returns other than transaction returns. If the | ||||||
2 | retailer is entitled under this Act to a discount for | ||||||
3 | collecting and remitting the tax imposed under this Act to the | ||||||
4 | Department with respect to the sale of the motor vehicle to the | ||||||
5 | lessor, then the right to the discount provided in this Act | ||||||
6 | shall be transferred to the lessor with respect to the tax paid | ||||||
7 | by the lessor for any amount received by the lessor from the | ||||||
8 | lessee for the leased vehicle that is not calculated at the | ||||||
9 | time the lease is executed; provided that the discount is only | ||||||
10 | allowed if the return is timely filed and for amounts timely | ||||||
11 | paid. The "selling price" of a motor vehicle that is sold on or | ||||||
12 | after January 1, 2015 July 1, 2014 for the purpose of leasing | ||||||
13 | for a defined period of longer than one year shall not be | ||||||
14 | reduced by the value of or credit given for traded-in tangible | ||||||
15 | personal property owned by the lessor, nor shall it be reduced | ||||||
16 | by the value of or credit given for traded-in tangible personal | ||||||
17 | property owned by the lessee, regardless of whether the | ||||||
18 | trade-in value thereof is assigned by the lessee to the lessor. | ||||||
19 | In the case of a motor vehicle that is sold for the purpose of | ||||||
20 | leasing for a defined period of longer than one year, the sale | ||||||
21 | occurs at the time of the delivery of the vehicle, regardless | ||||||
22 | of the due date of any lease payments. A lessor who incurs a | ||||||
23 | Retailers' Occupation Tax liability on the sale of a motor | ||||||
24 | vehicle coming off lease may not take a credit against that | ||||||
25 | liability for the Use Tax the lessor paid upon the purchase of | ||||||
26 | the motor vehicle (or for any tax the lessor paid with respect |
| |||||||
| |||||||
1 | to any amount received by the lessor from the lessee for the | ||||||
2 | leased vehicle that was not calculated at the time the lease | ||||||
3 | was executed) if the selling price of the motor vehicle at the | ||||||
4 | time of purchase was calculated using the definition of | ||||||
5 | "selling price" as defined in this paragraph.
Notwithstanding | ||||||
6 | any other provision of this Act to the contrary, lessors shall | ||||||
7 | file all returns and make all payments required under this | ||||||
8 | paragraph to the Department by electronic means in the manner | ||||||
9 | and form as required by the Department. This paragraph does not | ||||||
10 | apply to leases of motor vehicles for which, at the time the | ||||||
11 | lease is entered into, the term of the lease is not a defined | ||||||
12 | period, including leases with a defined initial period with the | ||||||
13 | option to continue the lease on a month-to-month or other basis | ||||||
14 | beyond the initial defined period. | ||||||
15 | The phrase "like kind and character" shall be liberally | ||||||
16 | construed
(including but not limited to any form of motor | ||||||
17 | vehicle for any form of
motor vehicle, or any kind of farm or | ||||||
18 | agricultural implement for any other
kind of farm or | ||||||
19 | agricultural implement), while not including a kind of item
| ||||||
20 | which, if sold at retail by that retailer, would be exempt from | ||||||
21 | retailers'
occupation tax and use tax as an isolated or | ||||||
22 | occasional sale.
| ||||||
23 | "Gross receipts" from the sales of tangible personal | ||||||
24 | property at retail
means the total selling price or the amount | ||||||
25 | of such sales, as hereinbefore
defined. In the case of charge | ||||||
26 | and time sales, the amount thereof shall be
included only as |
| |||||||
| |||||||
1 | and when payments are received by the seller.
Receipts or other | ||||||
2 | consideration derived by a seller from
the sale, transfer or | ||||||
3 | assignment of accounts receivable to a wholly owned
subsidiary | ||||||
4 | will not be deemed payments prior to the time the purchaser
| ||||||
5 | makes payment on such accounts.
| ||||||
6 | "Department" means the Department of Revenue.
| ||||||
7 | "Person" means any natural individual, firm, partnership, | ||||||
8 | association,
joint stock company, joint adventure, public or | ||||||
9 | private corporation, limited
liability company, or a receiver, | ||||||
10 | executor, trustee, guardian or other
representative appointed | ||||||
11 | by order of any court.
| ||||||
12 | The isolated or occasional sale of tangible personal | ||||||
13 | property at retail
by a person who does not hold himself out as | ||||||
14 | being engaged (or who does not
habitually engage) in selling | ||||||
15 | such tangible personal property at retail, or
a sale through a | ||||||
16 | bulk vending machine, does not constitute engaging in a
| ||||||
17 | business of selling such tangible personal property at retail | ||||||
18 | within the
meaning of this Act; provided that any person who is | ||||||
19 | engaged in a business
which is not subject to the tax imposed | ||||||
20 | by this Act because of involving
the sale of or a contract to | ||||||
21 | sell real estate or a construction contract to
improve real | ||||||
22 | estate or a construction contract to engineer, install, and
| ||||||
23 | maintain an integrated system of products, but who, in the | ||||||
24 | course of
conducting such business,
transfers tangible | ||||||
25 | personal property to users or consumers in the finished
form in | ||||||
26 | which it was purchased, and which does not become real estate |
| |||||||
| |||||||
1 | or was
not engineered and installed, under any provision of a | ||||||
2 | construction contract or
real estate sale or real estate sales | ||||||
3 | agreement entered into with some other
person arising out of or | ||||||
4 | because of such nontaxable business, is engaged in the
business | ||||||
5 | of selling tangible personal property at retail to the extent | ||||||
6 | of the
value of the tangible personal property so transferred. | ||||||
7 | If, in such a
transaction, a separate charge is made for the | ||||||
8 | tangible personal property so
transferred, the value of such | ||||||
9 | property, for the purpose of this Act, shall be
the amount so | ||||||
10 | separately charged, but not less than the cost of such property
| ||||||
11 | to the transferor; if no separate charge is made, the value of | ||||||
12 | such property,
for the purposes of this Act, is the cost to the | ||||||
13 | transferor of such tangible
personal property. Construction | ||||||
14 | contracts for the improvement of real estate
consisting of | ||||||
15 | engineering, installation, and maintenance of voice, data, | ||||||
16 | video,
security, and all telecommunication systems do not | ||||||
17 | constitute engaging in a
business of selling tangible personal | ||||||
18 | property at retail within the meaning of
this Act if they are | ||||||
19 | sold at one specified contract price.
| ||||||
20 | A person who holds himself or herself out as being engaged | ||||||
21 | (or who habitually
engages) in selling tangible personal | ||||||
22 | property at retail is a person
engaged in the business of | ||||||
23 | selling tangible personal property at retail
hereunder with | ||||||
24 | respect to such sales (and not primarily in a service
| ||||||
25 | occupation) notwithstanding the fact that such person designs | ||||||
26 | and produces
such tangible personal property on special order |
| |||||||
| |||||||
1 | for the purchaser and in
such a way as to render the property | ||||||
2 | of value only to such purchaser, if
such tangible personal | ||||||
3 | property so produced on special order serves
substantially the | ||||||
4 | same function as stock or standard items of tangible
personal | ||||||
5 | property that are sold at retail.
| ||||||
6 | Persons who engage in the business of transferring tangible | ||||||
7 | personal
property upon the redemption of trading stamps are | ||||||
8 | engaged in the business
of selling such property at retail and | ||||||
9 | shall be liable for and shall pay
the tax imposed by this Act | ||||||
10 | on the basis of the retail value of the
property transferred | ||||||
11 | upon redemption of such stamps.
| ||||||
12 | "Bulk vending machine" means a vending machine,
containing | ||||||
13 | unsorted confections, nuts, toys, or other items designed
| ||||||
14 | primarily to be used or played with by children
which, when a | ||||||
15 | coin or coins of a denomination not larger than $0.50 are
| ||||||
16 | inserted, are dispensed in equal portions, at random and
| ||||||
17 | without selection by the customer.
| ||||||
18 | (Source: P.A. 95-723, eff. 6-23-08; 09800HB2317enr.)
| ||||||
19 | Section 15. The Illinois Vehicle Code is amended by | ||||||
20 | changing Section 5-501 as follows:
| ||||||
21 | (625 ILCS 5/5-501) (from Ch. 95 1/2, par. 5-501)
| ||||||
22 | Sec. 5-501. Denial, suspension or revocation or | ||||||
23 | cancellation of a license. | ||||||
24 | (a) The license of a person issued under this Chapter may |
| |||||||
| |||||||
1 | be denied,
revoked or suspended if the Secretary of State finds | ||||||
2 | that the applicant,
or the officer, director, shareholder | ||||||
3 | having a ten percent or
greater ownership interest in the | ||||||
4 | corporation, owner, partner, trustee,
manager, employee or the | ||||||
5 | licensee
has:
| ||||||
6 | 1. Violated this Act;
| ||||||
7 | 2. Made any material misrepresentation to the | ||||||
8 | Secretary of State in
connection with an application for a | ||||||
9 | license, junking certificate,
salvage certificate, title | ||||||
10 | or registration;
| ||||||
11 | 3. Committed a fraudulent act in connection with | ||||||
12 | selling,
bartering, exchanging, offering for sale or | ||||||
13 | otherwise dealing in
vehicles, chassis, essential parts, | ||||||
14 | or vehicle shells;
| ||||||
15 | 4. As a new vehicle dealer has no contract with a | ||||||
16 | manufacturer or
enfranchised distributor to sell that new | ||||||
17 | vehicle in this State;
| ||||||
18 | 5. Not maintained an established place of business as | ||||||
19 | defined in
this Code;
| ||||||
20 | 6. Failed to file or produce for the Secretary of State | ||||||
21 | any
application, report, document or other pertinent | ||||||
22 | books, records,
documents, letters, contracts, required to | ||||||
23 | be filed or produced under
this Code or any rule or | ||||||
24 | regulation made by the Secretary of State
pursuant to this | ||||||
25 | Code;
| ||||||
26 | 7. Previously had, within 3 years, such a license |
| |||||||
| |||||||
1 | denied, suspended,
revoked, or cancelled under the | ||||||
2 | provisions of subsection (c)(2)
of this Section;
| ||||||
3 | 8. Has committed in any calendar year 3 or more | ||||||
4 | violations, as
determined in any civil or criminal | ||||||
5 | proceeding, of any one or more of
the following Acts:
| ||||||
6 | a. the "Consumer Finance Act";
| ||||||
7 | b. the "Consumer Installment Loan Act";
| ||||||
8 | c. the "Retail Installment Sales Act";
| ||||||
9 | d. the "Motor Vehicle Retail Installment Sales | ||||||
10 | Act";
| ||||||
11 | e. "An Act in relation to the rate of interest and | ||||||
12 | other charges in
connection with sales on credit and | ||||||
13 | the lending of money", approved May
24, 1879, as | ||||||
14 | amended;
| ||||||
15 | f. "An Act to promote the welfare of wage-earners | ||||||
16 | by regulating the
assignment of wages, and prescribing | ||||||
17 | a penalty for the violation
thereof", approved July 1, | ||||||
18 | 1935, as amended;
| ||||||
19 | g. Part 8 of Article XII of the Code of Civil | ||||||
20 | Procedure; or
| ||||||
21 | h. the "Consumer Fraud Act";
| ||||||
22 | 9. Failed to pay any fees or taxes due under this Act, | ||||||
23 | or has
failed to transmit any fees or taxes received by him | ||||||
24 | for transmittal by
him to the Secretary of State or the | ||||||
25 | State of Illinois;
| ||||||
26 | 10. Converted an abandoned vehicle;
|
| |||||||
| |||||||
1 | 11. Used a vehicle identification plate or number | ||||||
2 | assigned to a
vehicle other than the one to which | ||||||
3 | originally assigned;
| ||||||
4 | 12. Violated the provisions of Chapter 5 of this Act, | ||||||
5 | as amended;
| ||||||
6 | 13. Violated the provisions of Chapter 4 of this Act, | ||||||
7 | as amended;
| ||||||
8 | 14. Violated the provisions of Chapter 3 of this Act, | ||||||
9 | as amended;
| ||||||
10 | 15. Violated Section 21-2 of the Criminal Code of 1961 | ||||||
11 | or the Criminal Code of 2012, Criminal Trespass
to | ||||||
12 | Vehicles;
| ||||||
13 | 16. Made or concealed a material fact in connection | ||||||
14 | with his application
for a license;
| ||||||
15 | 17. Acted in the capacity of a person licensed or acted | ||||||
16 | as a licensee
under this Chapter without having a license | ||||||
17 | therefor;
| ||||||
18 | 18. Failed to pay, within 90 days after a final | ||||||
19 | judgment, any fines
assessed against the licensee pursuant | ||||||
20 | to an action brought under Section 5-404;
| ||||||
21 | 19. Failed to pay the Dealer Recovery Trust Fund fee | ||||||
22 | under Section 5-102.7 of this Code; | ||||||
23 | 20. Failed to pay, within 90 days after notice has been | ||||||
24 | given, any fine or fee owed as a result of an | ||||||
25 | administrative citation issued by the Secretary under this | ||||||
26 | Code. |
| |||||||
| |||||||
1 | (b) In addition to other grounds specified in this Chapter, | ||||||
2 | the
Secretary of State, on complaint of the Department of | ||||||
3 | Revenue, shall
refuse the issuance or renewal of a license, or | ||||||
4 | suspend or revoke such
license, for any of the following | ||||||
5 | violations of any tax administered by the Department of Revenue | ||||||
6 | the "Retailers'
Occupation Tax Act" :
| ||||||
7 | 1. Failure to make a tax return;
| ||||||
8 | 2. The filing of a fraudulent return;
| ||||||
9 | 3. Failure to pay all or part of any tax or penalty | ||||||
10 | finally
determined to be due;
| ||||||
11 | 4. Failure to comply with the bonding requirements of | ||||||
12 | the
"Retailers' Occupation Tax Act".
| ||||||
13 | (b-1) In addition to other grounds specified in this | ||||||
14 | Chapter, the
Secretary of State, on complaint of the Motor | ||||||
15 | Vehicle Review Board, shall
refuse the issuance or renewal of a | ||||||
16 | license, or suspend or revoke that
license, if costs or fees | ||||||
17 | assessed under Section 29 or Section 30 of the Motor Vehicle | ||||||
18 | Franchise Act have remained unpaid for a period in excess of 90 | ||||||
19 | days after the licensee received from the Motor Vehicle Board a | ||||||
20 | second notice and demand for the costs or fees. The Motor | ||||||
21 | Vehicle Review Board must send the licensee written notice and | ||||||
22 | demand for payment of the fees or costs at least 2 times, and | ||||||
23 | the second notice and demand must be sent by certified mail.
| ||||||
24 | (c) Cancellation of a license.
| ||||||
25 | 1. The license of a person issued under this Chapter | ||||||
26 | may be cancelled
by the Secretary of State prior to its |
| |||||||
| |||||||
1 | expiration in any of the following
situations:
| ||||||
2 | A. When a license is voluntarily surrendered, by | ||||||
3 | the licensed person;
or
| ||||||
4 | B. If the business enterprise is a sole | ||||||
5 | proprietorship, which is not a
franchised dealership, | ||||||
6 | when the sole proprietor dies or is imprisoned for
any | ||||||
7 | period of time exceeding 30 days; or
| ||||||
8 | C. If the license was issued to the wrong person or | ||||||
9 | corporation, or
contains an error on its face. If any | ||||||
10 | person above whose license
has been cancelled wishes to | ||||||
11 | apply for another license, whether during the
same | ||||||
12 | license year or any other year, that person shall be | ||||||
13 | treated as any
other new applicant and the cancellation | ||||||
14 | of the person's prior license
shall not, in and of | ||||||
15 | itself, be a bar to the issuance of a new license.
| ||||||
16 | 2. The license of a person issued under this Chapter | ||||||
17 | may be cancelled
without a hearing when the Secretary of | ||||||
18 | State is notified that the
applicant, or any officer, | ||||||
19 | director, shareholder having a 10 per cent or
greater | ||||||
20 | ownership interest in the corporation, owner, partner, | ||||||
21 | trustee,
manager, employee or member of the applicant or | ||||||
22 | the licensee has been
convicted of any felony involving the | ||||||
23 | selling, bartering, exchanging,
offering for sale, or | ||||||
24 | otherwise dealing in vehicles, chassis, essential
parts, | ||||||
25 | vehicle shells, or ownership documents relating to any of | ||||||
26 | the
above items.
|
| |||||||
| |||||||
1 | (Source: P.A. 97-480, eff. 10-1-11; 97-838, eff. 7-20-12; | ||||||
2 | 97-1150, eff. 1-25-13.)
| ||||||
3 | Section 20. The Motor Vehicle Franchise Act is amended by | ||||||
4 | changing Section 4 as follows:
| ||||||
5 | (815 ILCS 710/4) (from Ch. 121 1/2, par. 754)
| ||||||
6 | Sec. 4. Unfair competition and practices.
| ||||||
7 | (a) The unfair methods of competition and unfair and | ||||||
8 | deceptive acts or
practices listed in this Section are hereby | ||||||
9 | declared to be unlawful. In
construing the provisions of this | ||||||
10 | Section, the courts may be guided by the
interpretations of the | ||||||
11 | Federal Trade Commission Act (15 U.S.C. 45 et
seq.), as from | ||||||
12 | time to time amended.
| ||||||
13 | (b) It shall be deemed a violation for any manufacturer, | ||||||
14 | factory branch,
factory representative, distributor or | ||||||
15 | wholesaler, distributor branch,
distributor representative or | ||||||
16 | motor vehicle dealer to engage in any action
with respect to a | ||||||
17 | franchise which is arbitrary, in bad faith or
unconscionable | ||||||
18 | and which causes damage to any of the parties or to the public.
| ||||||
19 | (c) It shall be deemed a violation for a manufacturer, a | ||||||
20 | distributor,
a wholesaler, a distributor branch or division, a | ||||||
21 | factory branch or division,
or a wholesale branch or division, | ||||||
22 | or officer, agent or other representative
thereof, to coerce, | ||||||
23 | or attempt to coerce, any motor vehicle dealer:
| ||||||
24 | (1) to accept, buy or order any motor vehicle or |
| |||||||
| |||||||
1 | vehicles, appliances,
equipment, parts or accessories | ||||||
2 | therefor, or any other commodity or commodities
or service | ||||||
3 | or services which such motor vehicle dealer has not | ||||||
4 | voluntarily
ordered or requested except items required by | ||||||
5 | applicable local, state or
federal law; or to require a | ||||||
6 | motor vehicle dealer to accept, buy, order or
purchase such | ||||||
7 | items in order to obtain any motor vehicle or vehicles or | ||||||
8 | any
other commodity or commodities which have been ordered | ||||||
9 | or requested by such
motor vehicle dealer;
| ||||||
10 | (2) to order or accept delivery of any motor vehicle | ||||||
11 | with special
features, appliances, accessories or | ||||||
12 | equipment not included in the list
price of the motor | ||||||
13 | vehicles as publicly advertised by the manufacturer
| ||||||
14 | thereof, except items required by applicable law; or
| ||||||
15 | (3) to order for anyone any parts, accessories, | ||||||
16 | equipment, machinery,
tools, appliances or any commodity | ||||||
17 | whatsoever, except items required by
applicable law.
| ||||||
18 | (d) It shall be deemed a violation for a manufacturer, a | ||||||
19 | distributor,
a wholesaler, a distributor branch or division, or | ||||||
20 | officer, agent or other
representative thereof:
| ||||||
21 | (1) to adopt, change, establish or implement a plan or | ||||||
22 | system for the
allocation and distribution of new motor | ||||||
23 | vehicles to motor vehicle dealers
which is arbitrary or | ||||||
24 | capricious or to modify an existing plan so as to cause
the | ||||||
25 | same to be arbitrary or capricious;
| ||||||
26 | (2) to fail or refuse to advise or disclose to any |
| |||||||
| |||||||
1 | motor vehicle dealer
having a franchise or selling | ||||||
2 | agreement, upon written request therefor,
the basis upon | ||||||
3 | which new motor vehicles of the same line make are | ||||||
4 | allocated
or distributed to motor vehicle dealers in the | ||||||
5 | State and the basis upon
which the current allocation or | ||||||
6 | distribution is being made or will be made
to such motor | ||||||
7 | vehicle dealer;
| ||||||
8 | (3) to refuse to deliver in reasonable quantities and | ||||||
9 | within a reasonable
time after receipt of dealer's order, | ||||||
10 | to any motor vehicle dealer having
a franchise or selling | ||||||
11 | agreement for the retail sale of new motor vehicles
sold or | ||||||
12 | distributed by such manufacturer, distributor, wholesaler, | ||||||
13 | distributor
branch or division, factory branch or division | ||||||
14 | or wholesale branch or division,
any such motor vehicles as | ||||||
15 | are covered by such franchise or selling agreement
| ||||||
16 | specifically publicly advertised in the State by such | ||||||
17 | manufacturer,
distributor, wholesaler, distributor branch | ||||||
18 | or division, factory branch or
division, or wholesale | ||||||
19 | branch or division to be available for immediate
delivery. | ||||||
20 | However, the failure to deliver any motor vehicle shall not | ||||||
21 | be
considered a violation of this Act if such failure is | ||||||
22 | due to an act of God,
a work stoppage or delay due to a | ||||||
23 | strike or labor difficulty, a shortage
of materials, a lack | ||||||
24 | of manufacturing capacity, a freight embargo or other
cause | ||||||
25 | over which the manufacturer, distributor, or wholesaler, | ||||||
26 | or any agent
thereof has no control;
|
| |||||||
| |||||||
1 | (4) to coerce, or attempt to coerce, any motor vehicle | ||||||
2 | dealer to enter
into any agreement with such manufacturer, | ||||||
3 | distributor, wholesaler, distributor
branch or division, | ||||||
4 | factory branch or division, or wholesale branch or
| ||||||
5 | division, or officer, agent or other representative | ||||||
6 | thereof, or to do any
other act prejudicial to the dealer | ||||||
7 | by threatening to reduce his allocation
of motor vehicles | ||||||
8 | or cancel any franchise or any selling agreement existing
| ||||||
9 | between such manufacturer, distributor, wholesaler, | ||||||
10 | distributor branch or
division, or factory branch or | ||||||
11 | division, or wholesale branch or division,
and the dealer. | ||||||
12 | However, notice in good faith to any motor vehicle dealer
| ||||||
13 | of the dealer's violation of any terms or provisions of | ||||||
14 | such franchise or
selling agreement or of any law or | ||||||
15 | regulation applicable to the conduct of
a motor vehicle | ||||||
16 | dealer shall not constitute a violation of this Act;
| ||||||
17 | (5) to require a franchisee to participate in an | ||||||
18 | advertising campaign
or contest or any promotional | ||||||
19 | campaign, or to purchase or lease any promotional
| ||||||
20 | materials, training materials, show room or other display | ||||||
21 | decorations or
materials at the expense of the franchisee;
| ||||||
22 | (6) to cancel or terminate the franchise or selling | ||||||
23 | agreement of a
motor vehicle dealer without good cause and | ||||||
24 | without giving notice as
hereinafter provided; to fail or | ||||||
25 | refuse to extend the franchise or selling
agreement of a | ||||||
26 | motor vehicle dealer upon its expiration without good cause
|
| |||||||
| |||||||
1 | and without giving notice as hereinafter provided; or, to | ||||||
2 | offer a renewal,
replacement or succeeding franchise or | ||||||
3 | selling agreement containing terms
and provisions the | ||||||
4 | effect of which is to substantially change or modify the
| ||||||
5 | sales and service obligations or capital requirements of | ||||||
6 | the motor vehicle
dealer arbitrarily and without good cause | ||||||
7 | and without giving notice as
hereinafter provided | ||||||
8 | notwithstanding any term or provision of a franchise
or | ||||||
9 | selling agreement.
| ||||||
10 | (A) If a manufacturer, distributor, wholesaler, | ||||||
11 | distributor branch or
division, factory branch or | ||||||
12 | division or wholesale branch or division intends
to | ||||||
13 | cancel or terminate a franchise or selling agreement or | ||||||
14 | intends not to
extend or renew a franchise or selling | ||||||
15 | agreement on its expiration, it shall
send a letter by | ||||||
16 | certified mail, return
receipt requested, to the | ||||||
17 | affected
franchisee at least
60 days before the | ||||||
18 | effective date of the
proposed action, or not later | ||||||
19 | than 10 days before the proposed action when the
reason | ||||||
20 | for the action is based upon either of the following:
| ||||||
21 | (i) the
business operations of the franchisee | ||||||
22 | have been abandoned or
the franchisee has failed to | ||||||
23 | conduct customary sales and service operations
| ||||||
24 | during customary business hours for at least 7
| ||||||
25 | consecutive business
days unless such closing is | ||||||
26 | due to the suspension or revocation of a license |
| |||||||
| |||||||
1 | under subsection (b) of Section 5-501 of Illinois | ||||||
2 | Vehicle Code or an act of God, strike or labor
| ||||||
3 | difficulty or other cause over which the | ||||||
4 | franchisee has no 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 |
| |||||||
| |||||||
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 |
| |||||||
| |||||||
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 ; or (iii) suspension or | ||||||
20 | revocation of the franchisee's license pursuant to | ||||||
21 | subsection (b) of Section 5-501 of the Illinois Vehicle | ||||||
22 | Code .
| ||||||
23 | (E) The manufacturer may not cancel or terminate, | ||||||
24 | or fail to extend or
renew a franchise or selling | ||||||
25 | agreement or change or modify the obligations of
the | ||||||
26 | franchisee as a condition to offering a renewal, |
| |||||||
| |||||||
1 | replacement, or succeeding
franchise or selling | ||||||
2 | agreement before the hearing process is concluded as
| ||||||
3 | prescribed by this Act, and thereafter, if the Board | ||||||
4 | determines that the
manufacturer has failed to meet its | ||||||
5 | burden of proof and that good cause does
not exist to | ||||||
6 | allow the proposed action;
| ||||||
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, expert
| ||||||
11 | witness fees, reasonable attorneys' fees of the new motor | ||||||
12 | vehicle
dealer, and other expenses incurred in the | ||||||
13 | litigation, so long as such fees
and costs are reasonable,
| ||||||
14 | arising out
of complaints, claims or lawsuits including, | ||||||
15 | but not limited to, strict
liability, negligence, | ||||||
16 | misrepresentation, warranty (express or implied),
or | ||||||
17 | recision of the sale as defined in Section 2-608 of the | ||||||
18 | Uniform Commercial
Code, to the extent that the judgment or | ||||||
19 | settlement relates to the alleged
defective or negligent | ||||||
20 | manufacture, assembly or design of new motor vehicles,
| ||||||
21 | parts or accessories or other functions by the | ||||||
22 | manufacturer, beyond the
control of the dealer; provided | ||||||
23 | that, in order to provide an adequate
defense, the | ||||||
24 | manufacturer receives notice of the filing of a complaint, | ||||||
25 | claim,
or lawsuit within 60 days after the filing;
| ||||||
26 | (8) to require or otherwise coerce a motor vehicle |
| |||||||
| |||||||
1 | dealer to underutilize the motor vehicle dealer's | ||||||
2 | facilities by requiring or otherwise coercing the motor | ||||||
3 | vehicle dealer to exclude or remove from the motor vehicle | ||||||
4 | dealer's facilities operations for selling or servicing of | ||||||
5 | any vehicles for which the motor vehicle dealer has a | ||||||
6 | franchise agreement with another manufacturer, | ||||||
7 | distributor, wholesaler, distribution branch or division, | ||||||
8 | or officer, agent, or other representative thereof; | ||||||
9 | provided, however, that, in light of all existing | ||||||
10 | circumstances, (i) the motor vehicle dealer maintains a | ||||||
11 | reasonable line of credit for each make or line of new | ||||||
12 | motor vehicle, (ii) the new motor vehicle dealer remains in | ||||||
13 | compliance with any reasonable facilities requirements of | ||||||
14 | the manufacturer, (iii) no change is made in the principal | ||||||
15 | management of the new motor vehicle dealer, and (iv) the | ||||||
16 | addition of the make or line of new motor vehicles would be | ||||||
17 | reasonable. The reasonable facilities requirement set | ||||||
18 | forth in item (ii) of subsection (d)(8) shall not include | ||||||
19 | any requirement that a franchisee establish or maintain | ||||||
20 | exclusive facilities, personnel, or display space. Any | ||||||
21 | decision by a motor vehicle dealer to sell additional makes | ||||||
22 | or lines at the motor vehicle dealer's facility shall be | ||||||
23 | presumed to be reasonable, and the manufacturer shall have | ||||||
24 | the burden to overcome that presumption. A motor vehicle | ||||||
25 | dealer must provide a written notification of its intent to | ||||||
26 | add a make or line of new motor vehicles to the |
| |||||||
| |||||||
1 | manufacturer. If the manufacturer does not respond to the | ||||||
2 | motor vehicle dealer, in writing, objecting to the addition | ||||||
3 | of the make or line within 60 days after the date that the | ||||||
4 | motor vehicle dealer sends the written notification, then | ||||||
5 | the manufacturer shall be deemed to have approved the | ||||||
6 | addition of the make or line; or | ||||||
7 | (9) to use or consider the performance of a motor | ||||||
8 | vehicle dealer relating to the sale of the manufacturer's, | ||||||
9 | distributor's, or wholesaler's vehicles or the motor | ||||||
10 | vehicle dealer's ability to satisfy any minimum sales or | ||||||
11 | market share quota or responsibility relating to the sale | ||||||
12 | of the manufacturer's, distributor's, or wholesaler's new | ||||||
13 | vehicles in determining: | ||||||
14 | (A) the motor vehicle dealer's eligibility to | ||||||
15 | purchase program, certified, or other used motor | ||||||
16 | vehicles from the manufacturer, distributor, or | ||||||
17 | wholesaler; | ||||||
18 | (B) the volume, type, or model of program, | ||||||
19 | certified, or other used motor vehicles that a motor | ||||||
20 | vehicle dealer is eligible to purchase from the | ||||||
21 | manufacturer, distributor, or wholesaler; | ||||||
22 | (C) the price of any program, certified, or other | ||||||
23 | used motor vehicle that the dealer is eligible to | ||||||
24 | purchase from the manufacturer, distributor, or | ||||||
25 | wholesaler; or | ||||||
26 | (D) the availability or amount of any discount, |
| |||||||
| |||||||
1 | credit, rebate, or sales incentive that the dealer is | ||||||
2 | eligible to receive from the manufacturer, | ||||||
3 | distributor, or wholesaler for the purchase of any | ||||||
4 | program, certified, or other used motor vehicle | ||||||
5 | offered for sale by the manufacturer, distributor, or | ||||||
6 | wholesaler. | ||||||
7 | (e) It shall be deemed a violation for a manufacturer, a | ||||||
8 | distributor,
a wholesaler, a distributor branch or division or | ||||||
9 | officer, agent or other
representative thereof:
| ||||||
10 | (1) to resort to or use any false or misleading | ||||||
11 | advertisement in
connection with his business as such | ||||||
12 | manufacturer, distributor, wholesaler,
distributor branch | ||||||
13 | or division or officer, agent or other representative
| ||||||
14 | thereof;
| ||||||
15 | (2) to offer to sell or lease, or to sell or lease, any | ||||||
16 | new motor vehicle
to any motor vehicle dealer at a lower | ||||||
17 | actual price therefor than the actual
price offered to any | ||||||
18 | other motor vehicle dealer for the same model vehicle
| ||||||
19 | similarly equipped or to utilize any device including, but | ||||||
20 | not limited to,
sales promotion plans or programs which | ||||||
21 | result in such lesser actual
price or fail to make | ||||||
22 | available to any motor vehicle dealer any
preferential | ||||||
23 | pricing, incentive, rebate, finance rate, or low interest | ||||||
24 | loan
program offered to competing motor vehicle dealers in | ||||||
25 | other contiguous states.
However, the provisions of this | ||||||
26 | paragraph shall not apply to sales
to a motor vehicle |
| |||||||
| |||||||
1 | dealer for resale to any unit of the United States
| ||||||
2 | Government, the State or any of its political subdivisions;
| ||||||
3 | (3) to offer to sell or lease, or to sell or lease, any | ||||||
4 | new motor vehicle
to any person, except a wholesaler, | ||||||
5 | distributor or manufacturer's employees
at a lower actual | ||||||
6 | price therefor than the actual price offered and charged
to | ||||||
7 | a motor vehicle dealer for the same model vehicle similarly | ||||||
8 | equipped or
to utilize any device which results in such | ||||||
9 | lesser actual price. However,
the provisions of this | ||||||
10 | paragraph shall not apply to sales to a motor
vehicle | ||||||
11 | dealer for resale to any unit of the United States | ||||||
12 | Government, the
State or any of its political subdivisions;
| ||||||
13 | (4) to prevent or attempt to prevent by contract or | ||||||
14 | otherwise any motor
vehicle dealer or franchisee from | ||||||
15 | changing the executive management control
of the motor
| ||||||
16 | vehicle dealer or franchisee unless the franchiser, having | ||||||
17 | the burden of
proof, proves that such change of executive | ||||||
18 | management will result in executive
management control by a | ||||||
19 | person or persons who are not of good moral character
or | ||||||
20 | who do not meet the franchiser's existing and, with | ||||||
21 | consideration given
to the volume of sales and service of | ||||||
22 | the dealership, uniformly applied
minimum business | ||||||
23 | experience standards in the market area. However where
the | ||||||
24 | manufacturer rejects a proposed change in executive | ||||||
25 | management
control, the manufacturer shall give written | ||||||
26 | notice of his reasons to the
dealer within 60 days of |
| |||||||
| |||||||
1 | notice to the manufacturer by the dealer of
the proposed | ||||||
2 | change. If the manufacturer does not send a letter to the
| ||||||
3 | franchisee by certified mail, return receipt requested, | ||||||
4 | within 60 days from
receipt by
the manufacturer of the | ||||||
5 | proposed change, then the change of the
executive | ||||||
6 | management control of the franchisee shall be deemed
| ||||||
7 | accepted as proposed by the franchisee, and the | ||||||
8 | manufacturer shall give
immediate
effect to such change;
| ||||||
9 | (5) to prevent or attempt to prevent by contract or | ||||||
10 | otherwise any motor
vehicle dealer from establishing or | ||||||
11 | changing the capital structure of his
dealership or the | ||||||
12 | means by or through which he finances the operation | ||||||
13 | thereof;
provided the dealer meets any reasonable capital | ||||||
14 | standards agreed to between
the dealer and the | ||||||
15 | manufacturer, distributor or wholesaler, who may require
| ||||||
16 | that the sources, method and manner by which the dealer | ||||||
17 | finances or intends
to finance its operation, equipment or | ||||||
18 | facilities be fully disclosed;
| ||||||
19 | (6) to refuse to give effect to or prevent or attempt | ||||||
20 | to prevent by
contract or otherwise any motor vehicle | ||||||
21 | dealer or any officer, partner or
stockholder of any motor | ||||||
22 | vehicle dealer from selling or transferring any
part of the | ||||||
23 | interest of any of them to any other person or persons or | ||||||
24 | party
or parties unless such sale or transfer is to a | ||||||
25 | transferee who would
not otherwise qualify for a new motor | ||||||
26 | vehicle dealers license under "The
Illinois Vehicle Code" |
| |||||||
| |||||||
1 | or unless the franchiser, having the burden of proof,
| ||||||
2 | proves that such sale or transfer is to a person or party | ||||||
3 | who is not of
good moral character or does not meet the | ||||||
4 | franchiser's existing and reasonable
capital standards | ||||||
5 | and, with consideration given to the volume of sales and
| ||||||
6 | service of the dealership, uniformly applied minimum | ||||||
7 | business experience
standards in the market area.
However, | ||||||
8 | nothing herein shall be construed to prevent a
franchiser | ||||||
9 | from implementing affirmative action programs providing | ||||||
10 | business
opportunities for minorities or from complying | ||||||
11 | with applicable federal,
State or local law:
| ||||||
12 | (A) If the manufacturer intends to refuse to | ||||||
13 | approve the sale or
transfer of all or a part of the | ||||||
14 | interest, then it shall, within 60 days from
receipt of | ||||||
15 | the completed application forms generally utilized by | ||||||
16 | a manufacturer
to conduct its review and a copy of all | ||||||
17 | agreements regarding the proposed
transfer, send a | ||||||
18 | letter by certified mail, return receipt requested, | ||||||
19 | advising
the franchisee of any refusal to approve the | ||||||
20 | sale or transfer of all or part of
the interest
and | ||||||
21 | shall state that the dealer only has 30 days from the | ||||||
22 | receipt of the
notice to file with the Motor Vehicle | ||||||
23 | Review Board a written protest against
the proposed | ||||||
24 | action.
The
notice shall set forth specific criteria | ||||||
25 | used to evaluate the prospective
transferee and the | ||||||
26 | grounds for refusing to approve the sale or transfer to
|
| |||||||
| |||||||
1 | that transferee. Within 30 days from the franchisee's | ||||||
2 | receipt of the
manufacturer's notice, the
franchisee | ||||||
3 | may file
with the Board a written protest against the | ||||||
4 | proposed action.
| ||||||
5 | When a protest has been timely filed, the Board | ||||||
6 | shall enter an
order, fixing the date (within 60 days | ||||||
7 | of the date of such
order), time, and place of a | ||||||
8 | hearing on the protest, required under
Sections 12 and | ||||||
9 | 29 of this Act, and send by certified mail, return | ||||||
10 | receipt
requested, a copy of the order to the | ||||||
11 | manufacturer that filed notice of
intention of the | ||||||
12 | proposed action and to the protesting franchisee.
| ||||||
13 | The manufacturer shall have the burden of proof to | ||||||
14 | establish that good
cause exists to refuse to approve | ||||||
15 | the sale or transfer to the transferee. The
| ||||||
16 | determination whether good cause exists to refuse to | ||||||
17 | approve the sale or
transfer shall be made by the Board | ||||||
18 | under subdivisions (6)(B).
The manufacturer shall not | ||||||
19 | refuse to approve the sale or transfer
by
a dealer or | ||||||
20 | an officer, partner, or stockholder of a franchise or | ||||||
21 | any part
of the interest to any person or persons | ||||||
22 | before the hearing process is
concluded as prescribed | ||||||
23 | by this Act, and thereafter if the Board determines
| ||||||
24 | that the manufacturer has failed to meet its burden of | ||||||
25 | proof and that good
cause does not exist to refuse to | ||||||
26 | approve the sale or transfer to the
transferee.
|
| |||||||
| |||||||
1 | (B) Good cause to refuse to approve such sale or | ||||||
2 | transfer under this
Section is established when such | ||||||
3 | sale or transfer is to a transferee who would
not | ||||||
4 | otherwise qualify for a new motor vehicle dealers | ||||||
5 | license under "The
Illinois Vehicle Code" or such sale | ||||||
6 | or transfer is to a person or party who is
not of good | ||||||
7 | moral character or does not meet the franchiser's | ||||||
8 | existing and
reasonable capital standards and, with | ||||||
9 | consideration given to the volume of
sales and service | ||||||
10 | of the dealership, uniformly applied minimum business
| ||||||
11 | experience standards in the market area.
| ||||||
12 | (7) to obtain money, goods, services, anything of | ||||||
13 | value, or any other
benefit from any other person with whom | ||||||
14 | the motor vehicle dealer does business,
on account of or in | ||||||
15 | relation to the transactions between the dealer and
the | ||||||
16 | other person as compensation, except for services actually | ||||||
17 | rendered,
unless such benefit is promptly accounted for and | ||||||
18 | transmitted to the motor
vehicle dealer;
| ||||||
19 | (8) to grant an additional franchise in the relevant | ||||||
20 | market area of an
existing franchise of the same line make | ||||||
21 | or to relocate an existing motor
vehicle dealership within | ||||||
22 | or into a relevant market area of an existing
franchise of | ||||||
23 | the same line make.
However, if the manufacturer wishes to
| ||||||
24 | grant such an additional franchise to an independent person | ||||||
25 | in a bona fide
relationship in which such person is | ||||||
26 | prepared to make a significant
investment subject to loss |
| |||||||
| |||||||
1 | in such a dealership, or if the manufacturer
wishes to | ||||||
2 | relocate an existing motor vehicle dealership, then the
| ||||||
3 | manufacturer shall send a letter
by certified mail, return | ||||||
4 | receipt requested, to each existing dealer or dealers
of | ||||||
5 | the same line make whose relevant
market area includes the | ||||||
6 | proposed location of the additional or relocated
franchise | ||||||
7 | at least
60 days before the manufacturer grants an | ||||||
8 | additional franchise or relocates an
existing franchise of | ||||||
9 | the same line make within or into the relevant market
area | ||||||
10 | of an existing
franchisee of the same line make. Each | ||||||
11 | notice shall set forth the specific
grounds for the | ||||||
12 | proposed grant of an additional or relocation of an | ||||||
13 | existing
franchise and shall state that the dealer has only | ||||||
14 | 30 days from the date of receipt of the notice to file with | ||||||
15 | the Motor Vehicle Review Board a written protest against | ||||||
16 | the proposed action. Unless the parties agree upon the | ||||||
17 | grant or establishment of the
additional or relocated | ||||||
18 | franchise within 30 days from the date the
notice was
| ||||||
19 | received by the existing franchisee of the same line make | ||||||
20 | or any person
entitled to receive such notice, the | ||||||
21 | franchisee or other person may file
with the Board a | ||||||
22 | written protest against the grant or establishment of the
| ||||||
23 | proposed additional or relocated franchise.
| ||||||
24 | When a protest has been timely filed, the Board shall | ||||||
25 | enter an order
fixing a date (within 60 days of the date of | ||||||
26 | the order), time,
and place of a hearing on the protest, |
| |||||||
| |||||||
1 | required under Sections 12 and 29
of this Act, and send by | ||||||
2 | certified or registered mail, return receipt
requested, a | ||||||
3 | copy of the order to the manufacturer that filed the notice | ||||||
4 | of
intention to grant or establish the proposed additional | ||||||
5 | or relocated
franchise and to the protesting dealer or | ||||||
6 | dealers of the same line make
whose
relevant market area | ||||||
7 | includes the proposed location of the additional or
| ||||||
8 | relocated franchise.
| ||||||
9 | When more than one protest is filed against the grant | ||||||
10 | or establishment of
the
additional or relocated franchise | ||||||
11 | of the same line make, the Board may
consolidate the | ||||||
12 | hearings to expedite disposition of the matter. The
| ||||||
13 | manufacturer shall have the burden of proof to establish | ||||||
14 | that good cause
exists to allow the grant or establishment | ||||||
15 | of the additional or relocated
franchise. The manufacturer | ||||||
16 | may not grant or establish the additional
franchise or | ||||||
17 | relocate the existing franchise before the hearing process | ||||||
18 | is
concluded as prescribed by this Act, and thereafter if | ||||||
19 | the Board determines
that the manufacturer has failed to | ||||||
20 | meet its burden of proof and that good
cause does not exist | ||||||
21 | to allow the grant or establishment of the additional
| ||||||
22 | franchise or relocation of the existing franchise.
| ||||||
23 | The determination whether good cause exists for | ||||||
24 | allowing the grant or
establishment of an additional | ||||||
25 | franchise or relocated existing franchise,
shall be made by | ||||||
26 | the Board under subsection (c) of Section 12 of this Act.
|
| |||||||
| |||||||
1 | If the manufacturer seeks to enter
into a contract, | ||||||
2 | agreement or other arrangement with any person,
| ||||||
3 | establishing any additional motor vehicle dealership or | ||||||
4 | other facility,
limited to the sale of factory repurchase | ||||||
5 | vehicles or late model vehicles,
then the manufacturer | ||||||
6 | shall follow the notice procedures set forth in this
| ||||||
7 | Section and the
determination whether good cause exists for | ||||||
8 | allowing the proposed agreement
shall be made by the Board | ||||||
9 | under subsection (c) of Section 12, with the
manufacturer | ||||||
10 | having
the burden of proof.
| ||||||
11 | A. (Blank).
| ||||||
12 | B. For the purposes of this Section, appointment of | ||||||
13 | a successor motor
vehicle dealer at the same location | ||||||
14 | as its predecessor, or within 2 miles
of such location,
| ||||||
15 | or the relocation of an existing dealer or franchise | ||||||
16 | within 2 miles of
the relocating dealer's or | ||||||
17 | franchisee's existing location,
shall not be construed | ||||||
18 | as a grant, establishment or the
entering into of an | ||||||
19 | additional franchise or selling agreement, or a
| ||||||
20 | relocation of an existing franchise. The reopening
of a | ||||||
21 | motor vehicle dealership that has not been in operation | ||||||
22 | for 18 months
or more shall be deemed the grant of an | ||||||
23 | additional franchise or selling
agreement.
| ||||||
24 | C. This Section does not apply to the relocation of | ||||||
25 | an existing
dealership or franchise in a county having | ||||||
26 | a population of more than
300,000 persons when the new |
| |||||||
| |||||||
1 | location is within the dealer's current
relevant | ||||||
2 | market area, provided the new location is more than 7 | ||||||
3 | miles from
the nearest dealer of the same line make. | ||||||
4 | This Section does not apply to
the relocation of an | ||||||
5 | existing dealership or franchise in a county having a
| ||||||
6 | population of less than 300,000 persons when the new | ||||||
7 | location is within the
dealer's current relevant | ||||||
8 | market area, provided the new location is more
than 12 | ||||||
9 | miles from the nearest dealer of the same line make. A | ||||||
10 | dealer that would be farther away
from the new location | ||||||
11 | of an existing dealership or
franchise of the same line | ||||||
12 | make after a relocation may not
file a written protest | ||||||
13 | against the relocation with the
Motor Vehicle Review | ||||||
14 | Board.
| ||||||
15 | D. Nothing in this Section shall be construed to | ||||||
16 | prevent a
franchiser from implementing affirmative | ||||||
17 | action programs providing business
opportunities for | ||||||
18 | minorities or from complying with applicable federal,
| ||||||
19 | State or local law;
| ||||||
20 | (9) to require a motor vehicle dealer to assent to a | ||||||
21 | release, assignment,
novation, waiver or estoppel which | ||||||
22 | would relieve any person from liability
imposed by this | ||||||
23 | Act;
| ||||||
24 | (10) to prevent or refuse to give effect to the | ||||||
25 | succession to the
ownership or management control of a | ||||||
26 | dealership by any legatee under the
will of a dealer or to |
| |||||||
| |||||||
1 | an heir under the laws of descent and distribution
of this | ||||||
2 | State unless the franchisee has designated a successor to | ||||||
3 | the ownership
or management control under the succession | ||||||
4 | provisions of the franchise.
Unless the
franchiser, having | ||||||
5 | the burden of proof, proves that the successor
is a person | ||||||
6 | who is not of good moral character or does not meet the
| ||||||
7 | franchiser's existing and reasonable capital standards | ||||||
8 | and, with consideration
given to the volume of sales and | ||||||
9 | service of the dealership, uniformly applied
minimum | ||||||
10 | business experience standards in the market area, any | ||||||
11 | designated
successor of a dealer or franchisee may succeed | ||||||
12 | to the ownership or management
control of a dealership | ||||||
13 | under the existing franchise if:
| ||||||
14 | (i) The designated successor gives the | ||||||
15 | franchiser written notice by
certified mail, | ||||||
16 | return receipt requested, of his or her intention | ||||||
17 | to succeed to
the ownership of the dealer within 60 | ||||||
18 | days of the dealer's death or incapacity;
and
| ||||||
19 | (ii) The designated successor agrees to be | ||||||
20 | bound by all the terms
and
conditions of the | ||||||
21 | existing franchise.
| ||||||
22 | Notwithstanding the foregoing, in the event the motor | ||||||
23 | vehicle dealer or
franchisee and manufacturer have duly | ||||||
24 | executed an agreement concerning
succession rights prior | ||||||
25 | to the dealer's death or incapacitation, the agreement
| ||||||
26 | shall be observed.
|
| |||||||
| |||||||
1 | (A) If the franchiser intends to refuse to honor | ||||||
2 | the successor to the
ownership of a deceased or | ||||||
3 | incapacitated dealer or franchisee under an
existing | ||||||
4 | franchise agreement, the franchiser shall send a | ||||||
5 | letter by certified
mail, return receipt requested, to | ||||||
6 | the
designated successor within
60 days
from receipt of | ||||||
7 | a proposal advising of its intent to refuse to honor | ||||||
8 | the
succession and to discontinue the existing | ||||||
9 | franchise agreement
and shall state that the | ||||||
10 | designated successor only has 30 days from the
receipt | ||||||
11 | of the notice to file with the Motor Vehicle Review | ||||||
12 | Board a written
protest against the proposed action.
| ||||||
13 | The notice shall set forth the
specific grounds for the | ||||||
14 | refusal to honor the succession and discontinue the
| ||||||
15 | existing franchise agreement.
| ||||||
16 | If notice of refusal is not timely served upon the | ||||||
17 | designated
successor,
the franchise agreement shall | ||||||
18 | continue in effect subject to termination only as
| ||||||
19 | otherwise permitted by paragraph (6) of subsection (d) | ||||||
20 | of Section 4 of this
Act.
| ||||||
21 | Within 30 days from the date the notice was | ||||||
22 | received by the
designated
successor or any other | ||||||
23 | person entitled to notice, the designee or other
person | ||||||
24 | may file with the Board a written protest against the | ||||||
25 | proposed action.
| ||||||
26 | When a protest has been timely filed, the Board |
| |||||||
| |||||||
1 | shall enter an
order,
fixing a date (within 60 days of | ||||||
2 | the date of the order), time,
and place of a hearing on | ||||||
3 | the protest, required under Sections 12 and 29
of this | ||||||
4 | Act, and send by certified mail, return receipt | ||||||
5 | requested, a copy of
the order to the franchiser that | ||||||
6 | filed the notice of intention of the
proposed action | ||||||
7 | and to the protesting designee or such other person.
| ||||||
8 | The manufacturer shall have the burden of proof to | ||||||
9 | establish that good
cause exists to refuse to honor the | ||||||
10 | succession and discontinue the existing
franchise | ||||||
11 | agreement. The determination whether good cause exists | ||||||
12 | to refuse to
honor the succession shall be made by the | ||||||
13 | Board under subdivision (B) of this
paragraph (10). The | ||||||
14 | manufacturer shall not refuse to honor the succession | ||||||
15 | or
discontinue the existing franchise agreement before | ||||||
16 | the hearing process is
concluded as prescribed by this | ||||||
17 | Act, and thereafter if the Board determines
that it has | ||||||
18 | failed to meet its burden of proof and that good cause | ||||||
19 | does not
exist to refuse to honor the succession and | ||||||
20 | discontinue the existing
franchise agreement.
| ||||||
21 | (B) No manufacturer shall impose any conditions | ||||||
22 | upon honoring the
succession and continuing the | ||||||
23 | existing franchise agreement with the designated
| ||||||
24 | successor other than that the franchisee has | ||||||
25 | designated a successor to the
ownership or management | ||||||
26 | control under the succession provisions of the
|
| |||||||
| |||||||
1 | franchise, or that the designated successor is of good | ||||||
2 | moral character or meets
the reasonable capital | ||||||
3 | standards and, with consideration given to the volume | ||||||
4 | of
sales and service of the dealership, uniformly | ||||||
5 | applied minimum business
experience standards in the | ||||||
6 | market area;
| ||||||
7 | (11) to prevent or refuse to approve a proposal to | ||||||
8 | establish a successor
franchise at a location previously | ||||||
9 | approved by the franchiser when submitted
with the | ||||||
10 | voluntary termination by the existing franchisee unless | ||||||
11 | the successor
franchisee would not otherwise qualify for a | ||||||
12 | new motor vehicle dealer's
license under the Illinois | ||||||
13 | Vehicle Code or unless the franchiser, having
the burden of | ||||||
14 | proof, proves that such proposed successor is not of good
| ||||||
15 | moral character or does not meet the franchiser's existing | ||||||
16 | and reasonable
capital standards and, with consideration | ||||||
17 | given to the volume of sales and
service of the dealership, | ||||||
18 | uniformly applied minimum business experience
standards in | ||||||
19 | the market area. However, when such a rejection
of a | ||||||
20 | proposal is made, the manufacturer shall give written | ||||||
21 | notice of its
reasons to the franchisee within 60 days of | ||||||
22 | receipt by the manufacturer
of the proposal. However, | ||||||
23 | nothing herein shall be construed
to prevent a franchiser | ||||||
24 | from implementing affirmative action programs providing
| ||||||
25 | business opportunities for minorities, or from complying | ||||||
26 | with applicable
federal, State or local law;
|
| |||||||
| |||||||
1 | (12) to prevent or refuse to grant a franchise to a | ||||||
2 | person because such
person owns, has investment in or | ||||||
3 | participates in the management of or holds
a franchise for | ||||||
4 | the sale of another make or line of motor vehicles within
7 | ||||||
5 | miles of the proposed franchise location in a county having | ||||||
6 | a population
of more than 300,000 persons, or within 12 | ||||||
7 | miles of the proposed franchise
location in a county having | ||||||
8 | a population of less than 300,000
persons; or
| ||||||
9 | (13) to prevent or attempt to prevent any new motor | ||||||
10 | vehicle dealer
from establishing any additional motor | ||||||
11 | vehicle dealership or other facility
limited to the sale of | ||||||
12 | factory repurchase vehicles or late model vehicles
or | ||||||
13 | otherwise offering for sale factory repurchase vehicles of | ||||||
14 | the same line
make at an existing franchise by failing to | ||||||
15 | make
available any contract, agreement or other | ||||||
16 | arrangement which is made
available or otherwise offered to | ||||||
17 | any person.
| ||||||
18 | (f) It is deemed a violation for a manufacturer, a | ||||||
19 | distributor, a
wholesale,
a distributor
branch or division, a | ||||||
20 | factory branch or division, or a wholesale branch or
division, | ||||||
21 | or
officer, agent, broker, shareholder, except a shareholder of | ||||||
22 | 1% or less of the
outstanding
shares of any class of securities | ||||||
23 | of a manufacturer, distributor, or wholesaler
which is a
| ||||||
24 | publicly traded corporation, or other representative, directly | ||||||
25 | or indirectly,
to own or
operate a place of business as a motor | ||||||
26 | vehicle franchisee or motor vehicle
financing
affiliate, |
| |||||||
| |||||||
1 | except that, this subsection shall not prohibit the ownership | ||||||
2 | or
operation of a
place of business by a manufacturer, | ||||||
3 | distributor, or wholesaler for a period,
not to exceed
18 | ||||||
4 | months, during the transition from one motor vehicle franchisee | ||||||
5 | to another;
or the
investment in a motor vehicle franchisee by | ||||||
6 | a manufacturer, distributor, or
wholesaler if
the investment is | ||||||
7 | for the sole purpose of enabling a partner or shareholder in
| ||||||
8 | that motor
vehicle franchisee to acquire an interest in that | ||||||
9 | motor vehicle franchisee and
that partner
or shareholder is not | ||||||
10 | otherwise employed by or associated with the
manufacturer,
| ||||||
11 | distributor, or wholesaler and would not otherwise have the | ||||||
12 | requisite capital
investment
funds to invest in the motor | ||||||
13 | vehicle franchisee, and has the right to purchase
the entire
| ||||||
14 | equity interest of the manufacturer, distributor, or | ||||||
15 | wholesaler in the motor
vehicle
franchisee within a reasonable | ||||||
16 | period of time not to exceed 5 years.
| ||||||
17 | (g) Notwithstanding the terms, provisions, or conditions | ||||||
18 | of any agreement or
waiver, it shall be deemed a violation for | ||||||
19 | a manufacturer, a distributor,
a wholesaler, a distributor | ||||||
20 | branch or division, a factory branch or division,
or a | ||||||
21 | wholesale branch or division, or officer, agent or other | ||||||
22 | representative
thereof, to directly or indirectly condition | ||||||
23 | the awarding of a franchise to a
prospective new motor vehicle | ||||||
24 | dealer, the addition of a line make or
franchise to an existing | ||||||
25 | dealer, the renewal of a franchise of an existing
dealer, the | ||||||
26 | approval of the relocation of an existing dealer's facility, or |
| |||||||
| |||||||
1 | the
approval of the sale or transfer of the ownership of a | ||||||
2 | franchise on the
willingness of a dealer, proposed new dealer, | ||||||
3 | or owner of an interest in the
dealership facility to enter | ||||||
4 | into a site control agreement or exclusive use
agreement unless | ||||||
5 | separate and reasonable consideration was offered and accepted | ||||||
6 | for that agreement. | ||||||
7 | For purposes of this subsection (g), the terms "site | ||||||
8 | control
agreement" and "exclusive use agreement" include any | ||||||
9 | agreement that has
the effect of either (i) requiring that the | ||||||
10 | dealer establish or maintain
exclusive dealership facilities; | ||||||
11 | or (ii) restricting the ability of the dealer, or
the ability | ||||||
12 | of the dealer's lessor in the event the dealership facility is | ||||||
13 | being
leased, to transfer, sell, lease, or change the use of | ||||||
14 | the dealership premises,
whether by sublease, lease, | ||||||
15 | collateral pledge of lease, or other similar agreement. "Site | ||||||
16 | control agreement" and "exclusive use agreement" also include a | ||||||
17 | manufacturer restricting the ability of a dealer to transfer, | ||||||
18 | sell, or lease the dealership premises by right of first | ||||||
19 | refusal to purchase or lease, option to purchase, or option to | ||||||
20 | lease if the transfer, sale, or lease of the dealership | ||||||
21 | premises is to a person who is an immediate family member of | ||||||
22 | the dealer. For the purposes of this subsection (g), "immediate | ||||||
23 | family member" means a spouse, parent, son, daughter, | ||||||
24 | son-in-law, daughter-in-law, brother, and sister. | ||||||
25 | If a manufacturer exercises any right of first refusal to | ||||||
26 | purchase or lease or option to purchase or lease with regard to |
| |||||||
| |||||||
1 | a transfer, sale, or lease of the dealership premises to a | ||||||
2 | person who is not an immediate family member of the dealer, | ||||||
3 | then (1) within 60 days from the receipt of the completed | ||||||
4 | application forms generally utilized by a manufacturer to | ||||||
5 | conduct its review and a copy of all agreements regarding the | ||||||
6 | proposed transfer, the manufacturer must notify the dealer of | ||||||
7 | its intent to exercise the right of first refusal to purchase | ||||||
8 | or lease or option to purchase or lease and (2) the exercise of | ||||||
9 | the right of first refusal to purchase or lease or option to | ||||||
10 | purchase or lease must result in the dealer receiving | ||||||
11 | consideration, terms, and conditions that either are the same | ||||||
12 | as or greater than that which they have contracted to receive | ||||||
13 | in connection with the proposed transfer, sale, or lease of the | ||||||
14 | dealership premises. | ||||||
15 | Any provision
contained in any agreement entered into on or | ||||||
16 | after the effective date of this amendatory Act of the 96th | ||||||
17 | General Assembly that is inconsistent with the provisions of | ||||||
18 | this subsection (g) shall be
voidable at the election of the | ||||||
19 | affected dealer, prospective dealer, or owner
of an interest in | ||||||
20 | the dealership facility. | ||||||
21 | (h) For purposes of this subsection: | ||||||
22 | "Successor manufacturer" means any motor vehicle | ||||||
23 | manufacturer that, on or after January 1, 2009, acquires, | ||||||
24 | succeeds to, or
assumes any part of the business of another | ||||||
25 | manufacturer, referred to as the
"predecessor manufacturer", | ||||||
26 | as the result of any of the following: |
| |||||||
| |||||||
1 | (i) A change in ownership, operation, or control of the | ||||||
2 | predecessor
manufacturer by sale or transfer of assets, | ||||||
3 | corporate stock or other
equity interest, assignment, | ||||||
4 | merger, consolidation, combination, joint
venture, | ||||||
5 | redemption, court-approved sale, operation of law or
| ||||||
6 | otherwise. | ||||||
7 | (ii) The termination, suspension, or cessation of a | ||||||
8 | part or all of the
business operations of the predecessor | ||||||
9 | manufacturer. | ||||||
10 | (iii) The discontinuance of the sale of the product | ||||||
11 | line. | ||||||
12 | (iv) A change in distribution system by the predecessor | ||||||
13 | manufacturer,
whether through a change in distributor or | ||||||
14 | the predecessor
manufacturer's decision to cease | ||||||
15 | conducting business through a
distributor altogether. | ||||||
16 | "Former Franchisee" means a new motor vehicle dealer that | ||||||
17 | has entered into a franchise with a predecessor manufacturer | ||||||
18 | and that has either: | ||||||
19 | (i) entered into a termination agreement or deferred | ||||||
20 | termination
agreement with a predecessor or successor | ||||||
21 | manufacturer related to
such franchise; or | ||||||
22 | (ii) has had such franchise canceled, terminated, | ||||||
23 | nonrenewed,
noncontinued, rejected, nonassumed, or | ||||||
24 | otherwise ended. | ||||||
25 | For a period of 3 years from: (i) the date that a successor | ||||||
26 | manufacturer acquires, succeeds to, or assumes any part of the |
| |||||||
| |||||||
1 | business of a predecessor manufacturer; (ii) the last day that | ||||||
2 | a former franchisee is authorized to remain in business as a | ||||||
3 | franchised dealer with respect to a particular franchise under | ||||||
4 | a termination agreement or deferred termination agreement with | ||||||
5 | a predecessor or successor manufacturer; (iii) the last day | ||||||
6 | that a former franchisee that was cancelled, terminated, | ||||||
7 | nonrenewed, noncontinued, rejected, nonassumed, or otherwise | ||||||
8 | ended by a predecessor or successor manufacturer is authorized | ||||||
9 | to remain in business as a franchised dealer with respect to a | ||||||
10 | particular franchise; or (iv) the effective date of this | ||||||
11 | amendatory Act of the 96th General Assembly, whichever is | ||||||
12 | latest, it shall be unlawful for such successor manufacturer to | ||||||
13 | enter into a same line make franchise with any
person or to | ||||||
14 | permit the relocation of any existing same line
make franchise, | ||||||
15 | for a line make of the predecessor manufacturer that would be | ||||||
16 | located or
relocated within the relevant market area of a | ||||||
17 | former franchisee who owned or leased a
dealership facility in | ||||||
18 | that relevant market area without first offering the additional | ||||||
19 | or relocated
franchise to the former franchisee, or the | ||||||
20 | designated successor of such former franchisee in the
event the | ||||||
21 | former franchisee is deceased or disabled, at no cost and | ||||||
22 | without any requirements or
restrictions other than those | ||||||
23 | imposed generally on the manufacturer's other franchisees at | ||||||
24 | that
time, unless one of the following applies: | ||||||
25 | (1) As a result of the former franchisee's | ||||||
26 | cancellation, termination,
noncontinuance, or nonrenewal |
| |||||||
| |||||||
1 | of the franchise, the predecessor
manufacturer had | ||||||
2 | consolidated the line make with another of its line makes
| ||||||
3 | for which the predecessor manufacturer had a franchisee | ||||||
4 | with a then-existing
dealership facility located within | ||||||
5 | that relevant market area. | ||||||
6 | (2) The successor manufacturer has paid the former | ||||||
7 | franchisee, or the
designated successor of such former | ||||||
8 | franchisee in the event the former
franchisee is deceased | ||||||
9 | or disabled, the fair market value of the former
| ||||||
10 | franchisee's franchise on (i) the date the franchisor | ||||||
11 | announces the action which results in the termination, | ||||||
12 | cancellation, or nonrenewal; or (ii) the date the action | ||||||
13 | which results in termination, cancellation, or nonrenewal | ||||||
14 | first became general knowledge; or (iii) the day 12 months | ||||||
15 | prior to the date on which the notice of termination, | ||||||
16 | cancellation, or nonrenewal is issued, whichever amount is | ||||||
17 | higher. Payment is due within 90 days of the effective date | ||||||
18 | of the termination, cancellation, or nonrenewal. If the | ||||||
19 | termination, cancellation, or nonrenewal is due to a | ||||||
20 | manufacturer's change in distributors, the manufacturer | ||||||
21 | may avoid paying fair market value to the dealer if the new | ||||||
22 | distributor or the manufacturer offers the dealer a | ||||||
23 | franchise agreement with terms acceptable to the dealer. | ||||||
24 | (3) The successor manufacturer proves that it would | ||||||
25 | have had good cause to terminate the franchise agreement of | ||||||
26 | the former franchisee, or the successor of the former |
| |||||||
| |||||||
1 | franchisee under item (e)(10) in the event that the former | ||||||
2 | franchisee is deceased or disabled. The determination of | ||||||
3 | whether the successor manufacturer would have had good | ||||||
4 | cause to terminate the franchise agreement of the former | ||||||
5 | franchisee, or the successor of the former franchisee, | ||||||
6 | shall be made by the Board under subsection (d) of Section | ||||||
7 | 12. A successor manufacturer that seeks to assert that it | ||||||
8 | would have had good cause to terminate a former franchisee, | ||||||
9 | or the successor of the former franchisee, must file a | ||||||
10 | petition seeking a hearing on this issue before the Board | ||||||
11 | and shall have the burden of proving that it would have had | ||||||
12 | good cause to terminate the former franchisee or the | ||||||
13 | successor of the former franchisee. No successor dealer, | ||||||
14 | other than the former franchisee, may be appointed or | ||||||
15 | franchised by the successor manufacturer within the | ||||||
16 | relevant market area of the former franchisee until the | ||||||
17 | Board has held a hearing and rendered a determination on | ||||||
18 | the issue of whether the successor manufacturer would have | ||||||
19 | had good cause to terminate the former franchisee. | ||||||
20 | In the event that a successor manufacturer attempts to | ||||||
21 | enter into a same line make franchise with any person or to | ||||||
22 | permit the relocation of any existing line make franchise under | ||||||
23 | this subsection (h) at a location that is within the relevant | ||||||
24 | market area of 2 or more former franchisees, then the successor | ||||||
25 | manufacturer may not offer it to any person other than one of | ||||||
26 | those former franchisees unless the successor manufacturer can |
| |||||||
| |||||||
1 | prove that at least one of the 3 exceptions in items (1), (2), | ||||||
2 | and (3) of this subsection (h) applies to each of those former | ||||||
3 | franchisees. | ||||||
4 | (Source: P.A. 96-11, eff. 5-22-09; 96-824, eff. 11-25-09.)
| ||||||
5 | Section 99. Effective date. This Act takes effect upon | ||||||
6 | becoming law.".
|