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Illinois legislation would amend Motor Vehicle Franchise Act

February 24, 2017
Car manufacturers would be prohibited from requiring their dealers to remodel their facilities for 10 years after the last upgrade, under legislation introduced this month to amend the Illinois Motor Vehicle Franchise Act. 
Senate Bill 1687 was brought forth by Sen. Martin Sandoval, D-Chicago, who heads the Senate Transportation Committee. The Chicago Automobile Trade Association supports the bill.
The state’s franchise act has seen few revisions since its enactment in 1979. Proposed changes would mirror those already passed in other states. Among them:
Exports/Chargebacks would prohibit a manufacturer from rescinding sales incentives paid to a dealer if the customer exports the vehicle to another country, unless the manufacturer can prove the dealer knew or should have known that the vehicle would be exported.
Vendor Choice Signage would prohibit a manufacturer from requiring a dealer to buy building-improvement materials from a manufacturer-designated vendor, provided the dealer can find another vendor who can provide substantially similar materials. But if the manufacturer insists on a certain vendor, then the manufacturer would have to pay for at least 65 percent of the cost of the materials.
Also, manufacturers that lease signs and other image and design elements to dealers must give those dealers the option to buy similar items from a vendor the dealer selects. Dealers still would be required to conform to the manufacturer’s intellectual property use guidelines.
Right of First Refusal would provide that, when a dealer wants to sell the franchise, the manufacturer cannot exercise a right to buy the franchise, unless the manufacturer:
• notifies the dealer, within 60 days after receiving notice of the proposed transfer, that the manufacturer intends to exercise its right of first refusal;
• pays the dealer at least the same consideration as under the proposed transfer, including the purchase or lease of the dealer’s real property;
• reimburses the proposed transferee for reasonable expenses incurred in its attempt to acquire the dealership before the manufacturer exercised its right of first refusal;
• clarifies the dealership owner eligibility requirements to be owner of a dealership; and
• considers, when evaluating a dealer’s sales performance as part of the termination process, local factors such as local brand preference, demographics, proximity of same line-make dealers, proximity to competing line-make factories in a dealer’s market, drive time, and distance.
Several other bills introduced since January in the Illinois General Assembly also could impact dealers. Among them:
House Bill 371 repeals the commercial distribution fee on vehicles weighing more than 8,000 pounds.
HB 733 prohibits test drives when signs, paperwork, deals and advertising on front windows or adjacent side windows that obstruct the driver’s view.
HB 2376 creates the Family Leave Insurance Program Act, providing up to 12 weeks of unpaid leave for personal health issues.
HB 2747 creates the Safe Autonomous Vehicle Act, which would regulate a driverless vehicle pilot program. The CATA would seek to make such vehicles be sold through franchised dealers and not be provided as a manufacturer fleet program, which sells directly to a customer.
HB 2754 removes provisions that vehicle accident reports are privileged and allows various entities to access the reports.
HB 3279 increases the maximum liability of a renter of damage of a vehicle from $2,000 to the actual costs to repair a vehicle.
HB 3466 creates the Motor Vehicle Repair Fairness Act, which provides that motor vehicle manufacturers must make available all diagnostic, repair manuals and technical updates on all vehicles to independent repairers. Such a measure would directly compete with franchised dealers.
HB 3571 prohibits the sale or lease of any vehicle that has an outstanding manufacturer recall regardless if it is safety-related or not.
SB 76 creates the New-Car Buyer Protection Act of 2017, which would make many revisions/changes to current law regarding what is considered a lemon vehicle in Illinois.
SB 1505 allows vehicle owners the option to pay their registration fees in advance up to five years.
SB 1755 provides that dealers shall make a record of test drives. Any moving violations, tickets, and accidents will be at the fault of the permitted user driving a dealer’s vehicle.