SB 1939 — MOTOR VEHICLE FRANCHISE-SALES

(D) Notwithstanding the terms, conditions, or provisions of a franchise or selling agreement, the following shall not constitute good cause for SB1939 - 15 - LRB104 12083 SPS 22180 b cancelling or terminating or failing to extend or renew the franchise or selling agreement:

(i) the SB1939 Engrossed - 15 - LRB104 12083 SPS 22180 b change of ownership or executive management of the franchisee's dealership;

(7) notwithstanding the terms of any franchise agreement, to fail to indemnify and hold harmless its franchised dealers against any judgment or settlement for damages, including, but not limited to, court costs, expert witness fees, reasonable attorneys' fees of the new motor vehicle dealer, and other expenses incurred in the litigation, so long as such fees and costs are reasonable, arising out of complaints, claims, or lawsuits, including, SB1939 - 16 - LRB104 12083 SPS 22180 b but not limited to, strict liability, negligence, misrepresentation, warranty (express or implied), or SB1939 Engrossed - 16 - LRB104 12083 SPS 22180 b rescission of the sale as defined in Section 2-608 of the Uniform Commercial Code, to the extent that the judgment or settlement relates to the alleged defective or negligent manufacture, assembly or design of new motor vehicles, parts or accessories or other functions by the manufacturer, beyond the control of the dealer;

provided, however, that, in light of all existing circumstances, (i) the motor vehicle dealer maintains a reasonable line of credit for each make or line of new motor vehicle, (ii) the new motor vehicle dealer remains in compliance with any reasonable facilities requirements of the manufacturer, (iii) no change is made in the SB1939 - 17 - LRB104 12083 SPS 22180 b principal management of the new motor vehicle dealer, and (iv) the addition of the make or line of new motor vehicles SB1939 Engrossed - 17 - LRB104 12083 SPS 22180 b would be reasonable.

(A) the motor vehicle dealer's eligibility to SB1939 - 18 - LRB104 12083 SPS 22180 b purchase program, certified, or other used motor vehicles from the manufacturer, distributor, or SB1939 Engrossed - 18 - LRB104 12083 SPS 22180 b wholesaler;

(10) to take any adverse action against a dealer pursuant to an export or sale-for-resale prohibition because the dealer sold or leased a vehicle to a customer who either exported the vehicle to a foreign country or resold the vehicle in violation of the prohibition, unless the export or sale-for-resale prohibition policy was provided to the dealer in writing either electronically or on paper, prior to the sale or lease, and the dealer knew SB1939 - 19 - LRB104 12083 SPS 22180 b or reasonably should have known of the customer's intent to export or resell the vehicle in violation of the SB1939 Engrossed - 19 - LRB104 12083 SPS 22180 b prohibition at the time of the sale or lease.

For the purpose of this paragraph (11), the term "substantially alter" does not include routine maintenance, including, but not limited to, interior painting, that is reasonably necessary to keep a dealer facility in attractive SB1939 - 20 - LRB104 12083 SPS 22180 b condition;

or (12) to require a dealer to purchase goods or services SB1939 Engrossed - 20 - LRB104 12083 SPS 22180 b to make improvements to the dealer's facilities from a vendor selected, identified, or designated by a manufacturer or one of its affiliates by agreement, program, incentive provision, or otherwise without making available to the dealer the option to obtain the goods or services of substantially similar quality and overall design from a vendor chosen by the dealer and approved by the manufacturer;

If signs, other than signs containing the manufacturer's brand or logo or free-standing signs that are not directly attached to a building, or other franchiser image or design elements or trade dress are to be leased to the dealer by a vendor selected, identified, SB1939 - 21 - LRB104 12083 SPS 22180 b or designated by the manufacturer, the dealer has the right to purchase the signs or other franchiser image or SB1939 Engrossed - 21 - LRB104 12083 SPS 22180 b design elements or trade dress of substantially similar quality and design from a vendor selected by the dealer if the signs, franchiser image or design elements, or trade dress are approved by the manufacturer.

(13) to establish or utilize any common entity, affiliate, or spin-off company to sell, lease, or otherwise distribute new motor vehicles directly to consumers or to circumvent franchisethe manufacturer's new motor vehicle distribution obligations under this Act, whereif the manufacturer, including any common entities, subsidiaries, or affiliates, currently or previously maintained a franchise or selling agreement with a motor vehicle dealer for the retail sale of motor vehicles in this SB1939 - 22 - LRB104 12083 SPS 22180 b State.

(e) It shall be deemed a violation for a manufacturer, anya parent,SB1939 subsidiary,Engrossed affiliate,- agent,22 or- entityLRB104 under12083 commonSPS ownership22180 orb control of the manufacturer, a distributor, a wholesaler, a distributor branch or division or officer, agent or other representative thereof:

SB1939 - 23 - LRB104 12083 SPS 22180 b (3) to offer to sell or lease, or to sell or lease, any new motor vehicle to any person, except a wholesaler, distributor or manufacturer's employees at a lower actual price therefor than the actual price offered and charged SB1939 Engrossed - 23 - LRB104 12083 SPS 22180 b to a motor vehicle dealer for the same model vehicle similarly equipped or to utilize any device which results in such lesser actual price.

However, where the manufacturer rejects a proposed change in executive management control, the manufacturer shall give written notice of his reasons to the dealer within 60 days of notice to the manufacturer by the dealer of the proposed SB1939 - 24 - LRB104 12083 SPS 22180 b change.

If the manufacturer does not send a letter to the franchisee by certified mail, return receipt requested, within 60 days from receipt by the manufacturer of the proposed change, then the change of the executive SB1939 Engrossed - 24 - LRB104 12083 SPS 22180 b management control of the franchisee shall be deemed accepted as proposed by the franchisee, and the manufacturer shall give immediate effect to such change;

(6) to refuse to give effect to or prevent or attempt to prevent by contract or otherwise any motor vehicle dealer or any officer, partner or stockholder of any motor vehicle dealer from selling or transferring any part of the interest of any of them to any other person or persons or party or parties unless such sale or transfer is to a transferee who would not otherwise qualify for a new motor vehicle dealers license under the Illinois Vehicle Code or unless the franchiser, having the burden of proof, proves SB1939 - 25 - LRB104 12083 SPS 22180 b that such sale or transfer is to a person or party who is not of good moral character or does not meet the franchiser's existing and reasonable capital standards and, with consideration given to the volume of sales and SB1939 Engrossed - 25 - LRB104 12083 SPS 22180 b service of the dealership, uniformly applied minimum business experience standards in the market area.

Within 30 days from the SB1939 - 26 - LRB104 12083 SPS 22180 b franchisee's receipt of the manufacturer's notice, the franchisee may file with the Board a written protest against the proposed action.

When a protest has been timely filed, the Board SB1939 Engrossed - 26 - LRB104 12083 SPS 22180 b shall enter an order, fixing the date (within 60 days of the date of such order), time, and place of a hearing on the protest, required under Sections 12 and 29 of this Act, and send by certified mail, return receipt requested, a copy of the order to the manufacturer that filed notice of intention of the proposed action and to the protesting franchisee.

(B) Good cause to refuse to approve such sale or SB1939 - 27 - LRB104 12083 SPS 22180 b transfer under this Section is established when such sale or transfer is to a transferee who would not otherwise qualify for a new motor vehicle dealers license under the Illinois Vehicle Code or such sale SB1939 Engrossed - 27 - LRB104 12083 SPS 22180 b or transfer is to a person or party who is not of good moral character or does not meet the franchiser's existing and reasonable capital standards and, with consideration given to the volume of sales and service of the dealership, uniformly applied minimum business experience standards in the market area.

However, if the manufacturer wishes to grant such an additional franchise to an independent person in a bona fide relationship in which such person is prepared to make a significant investment subject to loss in such a dealership, or if the manufacturer wishes to SB1939 - 28 - LRB104 12083 SPS 22180 b relocate an existing motor vehicle dealership, then the manufacturer shall send a letter by certified mail, return receipt requested, to each existing dealer or dealers of the same line make whose relevant market area includes the SB1939 Engrossed - 28 - LRB104 12083 SPS 22180 b proposed location of the additional or relocated franchise at least 60 days before the manufacturer grants an additional franchise or relocates an existing franchise of the same line make within or into the relevant market area of an existing franchisee of the same line make.

When a protest has been timely filed, the Board shall enter an order fixing a date (within 60 days of the date of the order), time, and place of a hearing on the protest, required under Sections 12 and 29 of this Act, and send by SB1939 - 29 - LRB104 12083 SPS 22180 b certified or registered mail, return receipt requested, a copy of the order to the manufacturer that filed the notice of intention to grant or establish the proposed additional or relocated franchise and to the protesting SB1939 Engrossed - 29 - LRB104 12083 SPS 22180 b dealer or dealers of the same line make whose relevant market area includes the proposed location of the additional or relocated franchise.

If the manufacturer seeks to enter into a contract, SB1939 - 30 - LRB104 12083 SPS 22180 b agreement or other arrangement with any person, establishing any additional motor vehicle dealership or other facility, limited to the sale of factory repurchase vehicles or late model vehicles, then the manufacturer SB1939 Engrossed - 30 - LRB104 12083 SPS 22180 b shall follow the notice procedures set forth in this Section and the determination whether good cause exists for allowing the proposed agreement shall be made by the Board under subsection (c) of Section 12, with the manufacturer having the burden of proof.

This Section does not apply to the relocation of an existing dealership or franchise in a county having a population of more than 300,000 persons when the new location is within the dealer's current SB1939 - 31 - LRB104 12083 SPS 22180 b relevant market area, provided the new location is more than 7 miles from the nearest dealer of the same line make.

This Section does not apply to the relocation of an existing dealership or franchise in a SB1939 Engrossed - 31 - LRB104 12083 SPS 22180 b county having a population of less than 300,000 persons when the new location is within the dealer's current relevant market area, provided the new location is more than 12 miles from the nearest dealer of the same line make.

(10) to prevent or refuse to give effect to the succession to the ownership or management control of a dealership by any legatee under the will of a dealer or to an heir under the laws of descent and distribution of this SB1939 - 32 - LRB104 12083 SPS 22180 b State unless the franchisee has designated a successor to the ownership or management control under the succession provisions of the franchise.

Unless the franchiser, having the burden of proof, proves that the successor is a person SB1939 Engrossed - 32 - LRB104 12083 SPS 22180 b who is not of good moral character or does not meet the franchiser's existing and reasonable capital standards and, with consideration given to the volume of sales and service of the dealership, uniformly applied minimum business experience standards in the market area, any designated successor of a dealer or franchisee may succeed to the ownership or management control of a dealership under the existing franchise if:

(A) If the franchiser intends to refuse to honor SB1939 - 33 - LRB104 12083 SPS 22180 b the successor to the ownership of a deceased or incapacitated dealer or franchisee under an existing franchise agreement, the franchiser shall send a letter by certified mail, return receipt requested, to SB1939 Engrossed - 33 - LRB104 12083 SPS 22180 b the designated successor within 60 days from receipt of a proposal advising of its intent to refuse to honor the succession and to discontinue the existing franchise agreement and shall state that the designated successor only has 30 days from the receipt of the notice to file with the Motor Vehicle Review Board a written protest against the proposed action.

When a protest has been timely filed, the Board shall enter an order, fixing a date (within 60 days of SB1939 - 34 - LRB104 12083 SPS 22180 b the date of the order), time, and place of a hearing on the protest, required under Sections 12 and 29 of this Act, and send by certified mail, return receipt requested, a copy of the order to the franchiser that SB1939 Engrossed - 34 - LRB104 12083 SPS 22180 b filed the notice of intention of the proposed action and to the protesting designee or such other person.

(B) No manufacturer shall impose any conditions upon honoring the succession and continuing the existing franchise agreement with the designated successor other than that the franchisee has designated a successor to the ownership or management control under the succession provisions of the SB1939 - 35 - LRB104 12083 SPS 22180 b franchise, or that the designated successor is of good moral character or meets the reasonable capital standards and, with consideration given to the volume of sales and service of the dealership, uniformly SB1939 Engrossed - 35 - LRB104 12083 SPS 22180 b applied minimum business experience standards in the market area;

However, nothing herein shall be construed to prevent a franchiser from implementing affirmative action programs providing business opportunities for minorities, or from complying with applicable federal, State or local SB1939 - 36 - LRB104 12083 SPS 22180 b law;

(12) to prevent or refuse to grant a franchise to a person because such person owns, has investment in or participates in the management of or holds a franchise for SB1939 Engrossed - 36 - LRB104 12083 SPS 22180 b the sale of another make or line of motor vehicles within 7 miles of the proposed franchise location in a county having a population of more than 300,000 persons, or within 12 miles of the proposed franchise location in a county having a population of less than 300,000 persons;

(i)(A) notifies the dealer in writing that it intends to exercise aits right ofto firstacquire refusalthe nofranchise not later than 60 days after the manufacturermanufacturer's receivesor distributor's receipt of a notice of the proposed transfer from the dealer;dealer and all information and documents reasonably and customarily required by the manufacturer or distributor supporting the proposed transfer;

and(B) (ii)pays havingto the burdendealer ofthe proof,same provesor thatgreater theSB1939 dealer'sEngrossed proposed- transferee37 is- aLRB104 person12083 whoSPS is22180 notb ofconsideration goodas moralthe characterdealer SB1939has -contracted 37to -receive LRB104in 12083connection SPSwith 22180the bproposed transfer or doessale notof meetall theor manufacturer'ssubstantially existingall andof reasonablethe capitaldealership standards,assets, andstock, withor considerationother givenownership tointerest, including the volumepurchase or lease of salesall andreal serviceproperty, ofleasehold, theor dealership,improvements uniformlyrelated appliedto minimumthe businesstransfer experienceor standardssale inof the marketdealership. area.

Nothing in this paragraph shall be construed to prevent a manufacturer from exercising the right of first refusal for the purpose of implementing an affirmative action program or providing business opportunities for minorities, or from complying with applicable federal, State or local law, provided:

(i) the manufacturer has a formal written program for increasing minority representation in its dealer network;

(ii) the right of first refusal ensures that a minority dealer will acquire at least 51% ownership and control of the dealership's assets after the transfer;

and (iii) the manufacturer fulfills this obligation in good faith and does not subsequently rescind, assign, or abandon the affirmative action-based transfer.

If a manufacturer satisfies the requirements of this paragraph and exercises a right of first refusal, the manufacturer shall:

(A) notify notifies the dealer in writing that it intends to exercise its right to acquire the franchise not later than 60 days after the manufacturer's or distributor's receipt of a notice of the proposed SB1939 - 38 - LRB104 12083 SPS 22180 b transfer from the dealer and all information and documents reasonably and customarily required by the manufacturer or distributor supporting the proposed transfer;

(B) pay pays to the dealer the same or greater consideration as the dealer has contracted to receive in connection with the proposed transfer or sale of all or substantially all of the dealership assets, stock, or other ownership interest, including the purchase or lease of all real property, leasehold, or improvements related to the transfer or sale of the dealership.

(C) assume assumes all of the duties, obligations, and liabilities contained in the agreements that were to be assumed by the proposed transferee and with respect to which the manufacturer or distributor exercised the right of first refusal or other right to acquire the franchise;

(D) reimburse reimburses the proposed transferee for all reasonable expenses incurred in evaluating, investigating, and negotiating the transfer of the dealership prior to the manufacturer's or distributor's exercise of its right of first refusal SB1939 - 39 - LRB104 12083 SPS 22180 b or other right to acquire the dealership.

For purposes of this paragraph, "reasonable expenses" includes the usual and customary legal and accounting fees charged for similar work, as well as expenses associated with the evaluation and investigation of any real property SB1939 Engrossed - 38 - LRB104 12083 SPS 22180 b on which the dealership is operated.

For the purpose of this paragraph, "proposed transferee" means the person to whom the franchise would have been transferred to, or was proposed to be SB1939 - 40 - LRB104 12083 SPS 22180 b transferred to, had the right of first refusal or other right to acquire the franchise not been exercised by the manufacturer or distributor.

(f) It is deemed a violation for a manufacturer, any parent company, subsidiary, affiliate, or agent of the manufacturer, any person under common ownershipentity, or control,agent anySB1939 employeeEngrossed of- the39 manufacturer,- andLRB104 any12083 personSPS holding22180 1%b or more of the shares of any class of securities or other ownership interest in the manufacturer, broker, shareholder, except a shareholder of 1% or less of the outstanding shares of any class of securities of a manufacturer, a distributor, a wholesaler, a distributor branch or division, a factory branch or division, or a wholesale branch or division, or officer, agent, broker, shareholder, except a shareholder of 1% or less of the outstanding shares of any class of securities of a manufacturer, distributor, or wholesaler which is a publicly traded corporation, or other representative, directly or indirectly, to own or operate a place of business as a motor vehicle franchisee or motor vehicle financing affiliate.affiliate or to perform warranty service for retail consumers.

, except that, this subsection shall not prohibit A manufacturer, common entity, or distributor, other than a manufacturer or anydistributor affiliatedthat entity,was includinglawfully subsidiarieslicensed orto entitiessell undernew commonmotor ownershipvehicles ordirectly control,to customers in this State before January 1, 2022, shall not own,own operate,or operate a dealership or directly sell new vehicles in this State, nor shall such entities be eligible for a new motor vehicle dealer license under the Illinois Vehicle Code, regardless of the entity's branding as SB1939 - 41 - LRB104 12083 SPS 22180 b separate or independent of the controlling manufacturer.

(2) the investment in a motor vehicle franchisee by a SB1939 Engrossed - 40 - LRB104 12083 SPS 22180 b manufacturer, distributor, or wholesaler if the investment is for the sole purpose of enabling a partner or shareholder in that motor vehicle franchisee to acquire an interest in that motor vehicle franchisee and that partner or shareholder is not otherwise employed by or associated with the manufacturer, distributor, or wholesaler and would not otherwise have the requisite capital investment funds to invest in the motor vehicle franchisee, and has the right to purchase the entire equity interest of the manufacturer, distributor, or wholesaler in the motor vehicle franchisee within a reasonable period of time not to exceed 5 years;

(A) the manufacturer does not otherwise manufacture, distribute, or sell motor vehicles as SB1939 - 42 - LRB104 12083 SPS 22180 b defined under Section 1-217 of the Illinois Vehicle Code;

(C) the manufacturer complies with all obligations owed to dealers that are not owned, operated, or controlled by the manufacturer, including, but not SB1939 Engrossed - 41 - LRB104 12083 SPS 22180 b limited to those obligations arising pursuant to Section 6;

and (E) the manufacturer does not require that warranty repair work be performed by a manufacturer-owned repair facility and the manufacturer provides any dealer that has an agreement with the manufacturer to sell and perform warranty repairs on the manufacturer's engines the opportunity to perform warranty repairs on those engines, SB1939 - 43 - LRB104 12083 SPS 22180 b regardless of whether the dealer sold the truck into which the engine was installed.

(g) Notwithstanding the terms, provisions, or conditions of any agreement or waiver, it shall be deemed a violation for a manufacturer, a distributor, a wholesaler, a distributor branch or division, a factory branch or division, or a wholesale branch or division, or officer, agent, any parent, subsidiary, affiliate, or agent of the manufacturer, any person under common ownershipSB1939 orEngrossed control,- any42 employee- ofLRB104 the12083 manufacturer,SPS and22180 anyb personentity, holding 1% or more of the shares of any class of securities or other ownership interest in the manufacturer, or other representative thereof, to directly or indirectly condition the awarding of a franchise to a prospective new motor vehicle dealer, the addition of a line make or franchise to an existing dealer, the renewal of a franchise of an existing dealer, the approval of the relocation of an existing dealer's facility, or the approval of the sale or transfer of the ownership of a franchise on the willingness of a dealer, proposed new dealer, or owner of an interest in the dealership facility to enter into a site control agreement or exclusive use agreement unless separate and reasonable consideration was offered and accepted for that agreement.

For purposes of this subsection (g), the terms "site control agreement" and "exclusive use agreement" include any agreement that has the effect of either (i) requiring that the SB1939 - 44 - LRB104 12083 SPS 22180 b dealer establish or maintain exclusive dealership facilities;

"Site control agreement" and "exclusive use agreement" also include a manufacturer restricting the ability of a dealer to transfer, sell, or lease the dealership premises by right of first refusal to purchase or lease, option to purchase, or option to lease if the transfer, sale, or lease of the SB1939 Engrossed - 43 - LRB104 12083 SPS 22180 b dealership premises is to a person who is an immediate family member of the dealer.

If a manufacturer exercises any right of first refusal to purchase or lease or option to purchase or lease with regard to a transfer, sale, or lease of the dealership premises to a person who is not an immediate family member of the dealer, then (1) within 60 days from the receipt of the completed application forms generally utilized by a manufacturer to conduct its review and a copy of all agreements regarding the proposed transfer, the manufacturer must notify the dealer of its intent to exercise the right of first refusal to purchase or lease or option to purchase or lease and (2) the exercise of the right of first refusal to purchase or lease or option to SB1939 - 45 - LRB104 12083 SPS 22180 b purchase or lease must result in the dealer receiving consideration, terms, and conditions that either are the same as or greater than that which they have contracted to receive in connection with the proposed transfer, sale, or lease of the dealership premises.

SB1939 Engrossed - 44 - LRB104 12083 SPS 22180 b (h) For purposes of this subsection:

SB1939 - 46 - LRB104 12083 SPS 22180 b (iii) The discontinuance of the sale of the product line.

(i) entered into a termination agreement or deferred SB1939 Engrossed - 45 - LRB104 12083 SPS 22180 b termination agreement with a predecessor or successor manufacturer related to such franchise;

(iii) the last day that a former franchisee that was cancelled, terminated, nonrenewed, noncontinued, rejected, nonassumed, or otherwise ended by a predecessor or successor manufacturer is authorized SB1939 - 47 - LRB104 12083 SPS 22180 b to remain in business as a franchised dealer with respect to a particular franchise;

or (iv) November 25, 2009 (the effective date of Public Act 96-824), whichever is latest, it shall be unlawful for such successor manufacturer to enter into a same line make franchise with any person or to permit the relocation of any existing same line make franchise, for a line make of the predecessor manufacturer that would be located or relocated within the relevant market area of a former franchisee who owned or leased a dealership facility in that relevant market area without first offering the additional or relocated franchise to the former franchisee, or SB1939 Engrossed - 46 - LRB104 12083 SPS 22180 b the designated successor of such former franchisee in the event the former franchisee is deceased or a person with a disability, at no cost and without any requirements or restrictions other than those imposed generally on the manufacturer's other franchisees at that time, unless one of the following applies:

(2) The successor manufacturer has paid the former franchisee, or the designated successor of such former SB1939 - 48 - LRB104 12083 SPS 22180 b franchisee in the event the former franchisee is deceased or a person with a disability, the fair market value of the former franchisee's franchise on (i) the date the franchiser announces the action which results in the termination, cancellation, or nonrenewal;

Payment is due within 90 days of the effective date of the termination, cancellation, or SB1939 Engrossed - 47 - LRB104 12083 SPS 22180 b nonrenewal.

The determination of whether the successor manufacturer would have had good cause to terminate the franchise agreement of the former franchisee, or the successor of the former franchisee, shall be made by the Board under subsection SB1939 - 49 - LRB104 12083 SPS 22180 b (d) of Section 12.

No successor dealer, other than the former franchisee, may be appointed or franchised by the successor manufacturer within the relevant market area of the former franchisee until the Board has held a hearing SB1939 Engrossed - 48 - LRB104 12083 SPS 22180 b and rendered a determination on the issue of whether the successor manufacturer would have had good cause to terminate the former franchisee.

(i) It shall be deemed a violation of this Section for any manufacturer with an established franchise dealer network in SB1939 - 50 - LRB104 12083 SPS 22180 b this State, either directly or indirectly, through any parent, subsidiary, affiliate, or agent of the manufacturer, any person under common ownership or control, or common entity, to engage in the sale, lease, or warranty servicing of new motor vehicles in a manner that bypasses or competes with the manufacturer's existing franchisee network, including, but not limited to:

or (2) establishing or using newly branded entities, SB1939 Engrossed - 49 - LRB104 12083 SPS 22180 b spin-offs, or affiliated or subsidiary entities to conduct retail operations outside the franchise system.

(a) Every manufacturer, distributor, wholesaler, distributor branch or division, factory branch or division, or wholesale branch or division shall properly fulfill any warranty agreement and adequately and fairly compensate each SB1939 - 51 - LRB104 12083 SPS 22180 b of its motor vehicle dealers for labor and parts.

In the event that a time guide has not been agreed to for warranty repairs, or said time guide does not define time for an applicable warranty repair, the SB1939 Engrossed - 50 - LRB104 12083 SPS 22180 b manufacturer's time guide shall be used, multiplied by 1.5.

This requirement includes vehicle diagnostic times SB1939 - 52 - LRB104 12083 SPS 22180 b for all warranty repairs.

The dealer may submit a request to the manufacturer for warranty labor rate increases a maximum of once per calendar year;year.

providedA thatclaim ifmade theby manufacturera deniesfranchised anymotor requestvehicle dealer for warrantySB1939 laborEngrossed rate- increase51 - LRB104 12083 SPS 22180 b compensation under this Section shall be either approved or disapproved within 30 days after the dealerclaim mayis resubmitsubmitted ato newthe requestmanufacturer in the samemanner calendarand year.on the forms the manufacturer reasonably prescribes.

A claim made by a franchised motor vehicle dealer for compensation under this Section shall be either approved or disapproved within 30 days after the claim is submitted to the manufacturer in the manner and on the forms the manufacturer reasonably prescribes.

Additionally, the manufacturer shall reimburse the dealer for any parts provided SB1939 - 53 - LRB104 12083 SPS 22180 b in satisfaction of a warranty at the prevailing retail price charged by that dealer for the same parts when not provided in satisfaction of a warranty;

provided that such dealer's prevailing retail price is not unreasonable when compared with that of the holders of motor vehicle franchises of from the same line make manufacturer for identical parts in the geographic area in which the dealer is engaged in business.

SB1939 Engrossed - 52 - LRB104 12083 SPS 22180 b No debit reduction or charge back of any item on a warranty repair order may be made absent a finding of fraud or illegal actions by the dealer.

SB1939 - 54 - LRB104 12083 SPS 22180 b All claims, either original or resubmitted, made by motor vehicle dealers hereunder and under Section 5 for such labor and parts shall be either approved or disapproved within 30 days following their submission.

Any claims not specifically disapproved in writing within 30 days from SB1939 Engrossed - 53 - LRB104 12083 SPS 22180 b their submission shall be deemed approved and payment shall follow within 30 days.

(c) The motor vehicle franchiser shall not, by agreement, SB1939 - 55 - LRB104 12083 SPS 22180 b by restrictions upon reimbursement, or otherwise, restrict the nature and extent of services to be rendered or parts to be provided so that such restriction prevents the motor vehicle franchisee from satisfying the warranty by rendering services in a good and workmanlike manner and providing parts which are required in accordance with generally accepted standards.

(d) For the purposes of this Section, the "prevailing retail price charged by that dealer for the same parts" means the price paid by the motor vehicle franchisee for parts, including all shipping and other charges, multiplied by the sum of 1.0 and the franchisee's average percentage markup over SB1939 Engrossed - 54 - LRB104 12083 SPS 22180 b the price paid by the motor vehicle franchisee for parts purchased by the motor vehicle franchisee from the motor vehicle franchiser and sold at retail.

Any audit must be conducted within 30 days following SB1939 - 56 - LRB104 12083 SPS 22180 b the declaration.

No motor vehicle franchiser shall require a motor vehicle franchisee to SB1939 Engrossed - 55 - LRB104 12083 SPS 22180 b establish average percentage markup by a methodology, or by requiring information, that is unduly burdensome or time consuming to provide, including, but not limited to, part by part or transaction by transaction calculations.

A motor vehicle franchisee shall not request a change in the average percentage markup more than twice in one calendar year;year.

provided(e) that,If a motor vehicle franchiser supplies a part or parts for anyuse requestin thata isrepair notrendered approved,under a dealerwarranty mayother resubmitthan anby additionalsale requestof forthat apart changeor inparts to the motor vehicle franchisee, the motor vehicle franchisee shall be entitled to compensation equivalent to the motor vehicle franchisee's average percentage markup.markup on the part or parts, as if the part or parts had been sold to the motor vehicle franchisee by the motor vehicle franchiser.

(e) If a motor vehicle franchiser supplies a part or parts for use in a repair rendered under a warranty other than by sale of that part or parts to the motor vehicle franchisee, the motor vehicle franchisee shall be entitled to compensation equivalent to the motor vehicle franchisee's average SB1939 - 57 - LRB104 12083 SPS 22180 b percentage markup on the part or parts, as if the part or parts had been sold to the motor vehicle franchisee by the motor vehicle franchiser.

(f) The obligations imposed on motor vehicle franchisers by this Section shall apply to any parent, subsidiary, affiliate, or agent of the motor vehicle franchiser, any SB1939 Engrossed - 56 - LRB104 12083 SPS 22180 b person under common ownership or control, any employee of the motor vehicle franchiser, and any person holding 1% or more of the shares of any class of securities or other ownership interest in the motor vehicle franchiser, if a warranty or service or repair plan is issued by that person instead of or in addition to one issued by the motor vehicle franchiser.