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2003 SESSION
039336600Be it enacted by the General Assembly of Virginia:
1. That §§ 46.2-1993, 46.2-1993.6, 46.2-1993.25, [ and ] 46.2-1993.64 [ , and
46.2-1993.67 ] of the Code of Virginia are amended and reenacted as follows:
§ 46.2-1993. Definitions.
Unless the context otherwise requires, the following words and terms for the purpose of this chapter shall have the following meanings:
"All-terrain vehicle" means a three-wheeled or four-wheeled motor vehicle powered by a gasoline or diesel engine and generally characterized by large, low-pressure tires, a seat designed to be straddled by the operator, and handlebars for steering, that is intended for off-road use by an individual rider on various types of unpaved terrain. The term does not include four-wheeled vehicles that have low centers of gravity and are typically used in racing and on relatively level surfaces, commonly known as "go-carts," nor does the term include any "farm utility vehicle" as defined in this section. Except as otherwise provided in this chapter, for the purposes of this chapter, all-terrain vehicles shall be deemed to be motorcycles.
"Certificate of origin" means the document provided by the manufacturer of a new motorcycle, or its distributor, which is the only valid indication of ownership between the manufacturer, its distributor, its franchised motorcycle dealers, and the original purchaser not for resale.
"Dealer-operator" means the individual who works at the established place of business of a dealer and who is responsible for and in charge of day-to-day operations of that place of business.
"Distributor" means a person who sells or distributes new motorcycles pursuant to a written agreement with the manufacturer, to franchised motorcycle dealers in the Commonwealth.
"Distributor branch" means a branch office maintained by a distributor for the sale of motorcycles to motorcycle dealers or for directing or supervising, in whole or in part, its representatives in the Commonwealth.
"Distributor representative" means a person employed by a distributor or by a distributor branch, for the purpose of making or promoting the sale of motorcycles or for supervising or contacting its dealers, prospective dealers, or representatives in the Commonwealth.
"Factory branch" means a branch office maintained by a person for the sale of motorcycles to distributors or for the sale of motorcycles to motorcycle dealers, or for directing or supervising, in whole or in part, its representatives in the Commonwealth.
"Factory representative" means a person employed by a person who manufactures or assembles motorcycles, or by a factory branch for the purpose of making or promoting the sale of its motorcycles, or for supervising or contacting its dealers, prospective dealers, or representatives in the Commonwealth.
"Factory repurchase motorcycle" means a motorcycle sold, leased, rented, consigned, or otherwise transferred to a person under an agreement that the motorcycle will be resold or otherwise retransferred only to the manufacturer or distributor of the motorcycle, and which is reacquired by the manufacturer or distributor, or its agents.
"Family member" means a person who either (i) is the spouse, child, grandchild, spouse of a child, spouse of a grandchild, brother, sister, or parent of the dealer or owner, or (ii) has been employed continuously by the dealer for at least five years.
"Farm utility vehicle" means a vehicle that is designed for off-road use and is used as a farm, agricultural, or horticultural service vehicle, generally having a gasoline or diesel engine, four or more wheels, bench seating for the operator and a passenger, a steering wheel for control, and a cargo bed. "Farm utility vehicle" does not include pickup or panel trucks, golf carts, low-speed vehicles, riding lawn mowers, or all-terrain vehicles.
"Franchise" means a written contract or agreement between two or more persons whereby one person, the franchisee, is granted the right to engage in the business of offering and selling, servicing, or offering, selling, and servicing new motorcycles of a particular line-make or late model or factory repurchase motorcycles of a particular line-make manufactured or distributed by the grantor of the right, the franchisor, and where the operation of the franchisee's business is substantially associated with the franchisor's trademark, trade name, advertising, or other commercial symbol designating the franchisor, the motorcycle or its manufacturer or distributor. The term shall include any severable part or parts of a franchise agreement which separately provides for selling and servicing different line-makes of the franchisor.
"Franchised late model or factory repurchase motorcycle dealer" means a dealer in late model or factory repurchase motorcycles, including a franchised new motorcycle dealer, that has a franchise agreement with a manufacturer or distributor of the line-make of the late model or factory repurchase motorcycles.
"Franchised motorcycle dealer" or "franchised dealer" means a dealer in new motorcycles that has a franchise agreement with a manufacturer or distributor of new motorcycles.
"Independent motorcycle dealer" means a dealer in used motorcycles.
"Late model motorcycle" means a motorcycle of the current model year and the immediately preceding model year.
"Line-make" means the name of the motorcycle manufacturer or distributor and a brand or name plate marketed by the manufacturer or distributor. For the purposes of this chapter, the "line-make" of a motorcycle manufacturer, factory branch, distributor, or distributor branch shall include every brand of all-terrain vehicle and off-road motorcycle manufactured or distributed bearing the name of the motorcycle manufacturer or distributor.
"Manufacturer" means a person engaged in the business of constructing or assembling new motorcycles.
"Motorcycle" means every motor vehicle designed to travel on not more than three wheels in contact with the ground, except any vehicle included within the term "farm vehicle" or "moped" as defined in § 46.2-100. Except as otherwise provided in this chapter, for the purposes of this chapter "all-terrain vehicles" and "off-road motorcycles" shall be deemed to be "motorcycles."
"Motorcycle dealer" or "dealer" means any person who:
1. For commission, money, or other thing of value, buys, sells, exchanges, either outright or on conditional sale, bailment lease, chattel mortgage, or otherwise or arranges or offers or attempts to solicit or negotiate on behalf of others a sale, purchase, or exchange of an interest in new motorcycles, new and used motorcycles, or used motorcycles alone, whether or not the motorcycles are owned by him;
2. Is wholly or partly engaged in the business of selling new motorcycles, new and used motorcycles, or used motorcycles only, whether or not the motorcycles are owned by him; or
3. Offers to sell, sells, displays, or permits the display for sale, of five or
more motorcycles within any twelve 12 consecutive months.
The term "motorcycle dealer" does not include:
1. Receivers, trustees, administrators, executors, guardians, conservators or other persons appointed by or acting under judgment or order of any court or their employees when engaged in the specific performance of their duties as employees.
2. Public officers, their deputies, assistants, or employees, while performing their official duties.
3. Persons other than business entities primarily engaged in the leasing or renting of motorcycles to others when selling or offering such motorcycles for sale at retail, disposing of motorcycles acquired for their own use and actually so used, when the motorcycles have been so acquired and used in good faith and not for the purpose of avoiding the provisions of this chapter.
4. Any financial institution chartered or authorized to do business under the laws of the Commonwealth or the United States which may have received title to a motorcycle in the normal course of its business by reason of a foreclosure, other taking, repossession, or voluntary reconveyance to that institution occurring as a result of any loan secured by a lien on the motorcycle.
5. An employee of an organization arranging for the purchase or lease by the organization of motorcycles for use in the organization's business.
6. Any person who permits the operation of a motorcycle show or permits the display of motorcycles for sale by any motorcycle dealer licensed under this chapter.
7. An insurance company authorized to do business in the Commonwealth that sells or disposes of motorcycles under a contract with its insured in the regular course of business.
8. Any publication, broadcast, or other communications media when engaged in the business of advertising, but not otherwise arranging for the sale of motorcycles owned by others.
9. Any person dealing solely in the sale or lease of either (i) motorcycles designed exclusively for off-road use or (ii) all-terrain vehicles [ manufactured or distributed in Virginia by a manufacturer, factory branch, distributor, distributor branch or factory or distributor representative that does not also manufacture or does not also distribute in Virginia any motorcycle designed for lawful use on the public highways ] .
10. Any credit union authorized to do business in Virginia, provided the credit union does not receive a commission, money, or other thing of value directly from a motorcycle dealer.
"Motorcycle salesperson" or "salesperson" means any person who is licensed as and employed as a salesperson by a motorcycle dealer to sell or exchange motorcycles.
"Motorcycle show" means a display of motorcycles to the general public at a location other than a dealer's location licensed under this chapter where the motorcycles are not being offered for sale or exchange during or as part of the display.
"New motorcycle" means any motorcycle which (i) has not been previously sold except in good faith for the purpose of resale, (ii) has not been used as a rental, driver education, or demonstration motorcycle, or for the personal and business transportation of the manufacturer, distributor, dealer, or any of his employees, (iii) has not been used except for limited use necessary in moving or road testing the motorcycle prior to delivery to a customer, (iv) is transferred by a certificate of origin, and (v) has the manufacturer's certification that it conforms to all applicable federal motorcycle safety and emission standards. Notwithstanding provisions (i) and (iii), a motorcycle that has been previously sold but not titled shall be deemed a new motorcycle if it meets the requirements of provisions (ii), (iv), and (v).
"Off-road motorcycle" means every motorcycle designed exclusively for off-road use by an individual rider with not more than two wheels in contact with the ground. Except as otherwise provided in this chapter, for the purposes of this chapter off-road motorcycles shall be deemed to be "motorcycles."
"Original license" means a motorcycle dealer license issued to an applicant who
has never been licensed as a motorcycle dealer in Virginia or whose Virginia
motorcycle dealer license has been expired for more than thirty 30 days.
"Relevant market area" means as follows:
1. In metropolitan localities with a population populations of 250,000 or more,
the relevant market area shall be a circular area around an existing franchised dealer not to exceed a radius of
ten 10 miles, but in no case less than seven miles.
2. If the population in an area within a radius of ten 10 miles around an
existing franchised dealer is less than 250,000, but the population in an area
within a radius of fifteen 15 miles around an existing franchised dealer
is 150,000 or more, the relevant market area shall be that area within the
fifteen 15-mile radius.
3. In all other cases the relevant market area shall be an area within a radius
of twenty 20 miles around an existing franchised dealer or the area of
responsibility defined in the franchise, whichever is greater. In any case
where the franchise agreement is silent as to area responsibility, the relevant
market area shall be the greater of an area within a radius of twenty 20 miles
around an existing franchised dealer or that area in which the franchisor otherwise requires the
franchisee to make significant retail sales or sales efforts.
In determining population for this definition, the most recent census by the U.S. Bureau of the Census or the most recent population update, either from the National Planning Data Corporation or other similar recognized source, shall be accumulated for all census tracts either wholly or partially within the relevant market area.
"Retail installment sale" means every sale of one or more motorcycles to a buyer for his use and not for resale, in which the price of the motorcycle is payable in one or more installments and in which the seller has either retained title to the goods or has taken or retained a security interest in the goods under form of contract designated either as a security agreement, conditional sale, bailment lease, chattel mortgage, or otherwise.
"Sale at retail" or "retail sale" means the act or attempted act of selling, bartering, exchanging, or otherwise disposing of a motorcycle to a buyer for his personal use and not for resale.
"Sale at wholesale" or "wholesale" means a sale to motorcycle dealers or wholesalers other than to consumers, or a sale to one who intends to resell.
"Used motorcycle" means any motorcycle other than a new motorcycle as defined in this section.
"Wholesale auction" means an auction of motorcycles restricted to sales at wholesale.
§ 46.2-1993.6. Licenses required.
Except as otherwise provided in this section, it shall be unlawful for any person to engage in business in the Commonwealth as a motorcycle dealer, salesperson, manufacturer, factory branch, distributor, distributor branch, or factory or distributor representative, without first obtaining a license as provided in this chapter. Any person licensed in another state as a motorcycle dealer may sell motorcycles at wholesale auctions in the Commonwealth after having obtained a certificate of dealer registration as provided in Chapter 19 (§ 46.2-1900 et seq.) of this title. Any nonprofit organization exempt from taxation under § 501 (c) (3) of the Internal Revenue Code, after having obtained a nonprofit organization certificate as provided in this chapter, may consign donated motorcycles to licensed Virginia motorcycle dealers. The offering or granting of a motorcycle dealer franchise in the Commonwealth shall constitute engaging in business in the Commonwealth for purposes of this section, and no new motorcycle may be sold or offered for sale in the Commonwealth unless the franchisor of motorcycle dealer franchises for that line-make in the Commonwealth, whether such franchisor is a manufacturer, factory branch, distributor, distributor branch, or otherwise, is licensed under this chapter. In the event a license issued under this chapter to a franchisor of motorcycle dealer franchises is suspended, revoked, or not renewed, nothing in this section shall prevent the sale of any new motorcycle of such franchisor's line-make manufactured in or brought into the Commonwealth for sale prior to the suspension, revocation or expiration of the license.
Notwithstanding the foregoing provisions of this section, a manufacturer, factory branch, distributor, distributor branch, or factory or distributor representative engaged in the manufacture or distribution of all-terrain vehicles or off-road motorcycles that does not also manufacture or does not also distribute in Virginia any motorcycle designed for lawful use on the public highways shall not be required to obtain a license from the Department as provided in this chapter.
Violation of any provision of this section shall constitute a Class 1 misdemeanor.
§ 46.2-1993.25. Odometer disclosure.
Every motorcycle dealer shall comply with all requirements of the Federal Odometer Act and § 46.2-629 by completing the appropriate odometer mileage statement form for each vehicle purchased, sold or transferred, or in any other way acquired or disposed of. Odometer disclosure statements shall be maintained by the dealer in a manner that permits systematic retrieval. Any person found violating any of the provisions of this section shall be guilty of a Class 1 misdemeanor.
The provisions of this section shall not apply to all-terrain vehicles or off-road motorcycles.
§ 46.2-1993.64. Filing of franchises.
Except as otherwise provided in this section, each motorcycle manufacturer,
factory branch, distributor, distributor branch, or subsidiary thereof shall file with the
Commissioner a true copy of each new, amended, modified, or different form or addendum
offered to more than one dealer which affects the rights, responsibilities, or
obligations of the parties of a franchise or sales, service, or sales and
service agreement to be offered to a motorcycle dealer or prospective
motorcycle dealer in the Commonwealth no later than sixty 60 days prior to the
date the franchise or sales agreement is offered. In no event shall a new,
amended, modified, or different form of franchise or sales, service, or sales
and service agreement be offered a motorcycle dealer in the Commonwealth until
the form has been determined by the Commissioner as not containing terms
inconsistent with the provisions of this chapter. At the time a filing is made
with the Commissioner pursuant to this section, the manufacturer, factory
branch, distributor, distributor branch, or subsidiary shall also give written
notice together with a copy of the papers so filed to the affected dealer or
dealers.
The provisions of this article shall not apply to a manufacturer, factory branch, distributor, distributor branch, or factory or distributor representative engaged in the manufacture or distribution of all-terrain vehicles or off-road motorcycles that does not also manufacture or does not also distribute in Virginia any motorcycle designed for lawful use on the public highways.
[ § 46.2-1993.67. Other coercion of dealers; transfer, grant, succession to
and cancellation of dealer franchises; delivery of motorcycles, parts, and
accessories.
It shall be unlawful for any manufacturer, factory branch, distributor, or
distributor branch, or any field representative, officer, agent, or their
representatives:
1. To coerce or attempt to coerce any dealer to accept delivery of any
motorcycle or motorcycles, parts or accessories therefor, or any other commodities,
which have not been ordered by the dealer.
2. To coerce or attempt to coerce any dealer to enter into an agreement with
the manufacturer, factory branch, distributor, or distributor branch, or
representative thereof, or do any other act unfair to the dealer, by threatening to
cancel any franchise existing between the manufacturer, factory branch,
distributor, distributor branch, or representative thereof and the dealer.
3. To coerce or attempt to coerce any dealer to join, contribute to, or
affiliate with any advertising association.
4. To prevent or refuse to approve the sale or transfer of the ownership of a
dealership by the sale of the business, stock transfer, or otherwise, or the
transfer, sale, or assignment of a dealer franchise, or a change in the executive
management or principal operator of the dealership, unless the franchisor
provides written notice to the dealer of its objection and the reasons therefor
at least thirty 30 days prior to the proposed effective date of the transfer,
sale, assignment, or change. No such objection shall be effective to prevent
the sale, transfer, assignment, or change if the Commissioner has determined,
if requested in writing by the dealer within thirty 30 days after receipt of an
objection to the proposed sale, transfer, or change, and after a hearing on the
matter, that the failure to permit or honor the sale, transfer, assignment, or
change is unreasonable under the circumstances. No franchise may be sold,
assigned, or transferred unless (i) the franchisor has been given at least
ninety days' prior written notice by the dealer as to the identity, financial
ability, and qualifications of the proposed transferee and (ii) the sale or
transfer of the franchise and business will not involve, without the
franchisor's consent, a relocation of the business.
5. a. To grant an additional franchise for a particular line-make of motorcycle
in a relevant market area in which a dealer or dealers in that line-make are already located unless the franchisor
has first advised in writing all other dealers in the line-make in the relevant
market area. No such additional franchise may be established at the proposed
site unless the Commissioner has determined, if requested by a dealer of the
same line-make in the relevant market area within thirty 30 days after receipt
of the franchisor's notice of intention to establish the additional franchise,
and after a hearing on the matter, that there is reasonable evidence that after
the grant of the new franchise, the market will support all of the dealers in
that line-make in the relevant market area. Establishing a franchised dealer in
a relevant market area to replace a franchised dealer that has not been in
operation for more than two years shall constitute the establishment of a new
franchise subject to the terms of this subdivision. The two2-year period for
replacing a franchised dealer shall begin on the day the franchise was terminated, or, if a termination hearing was held,
on the day the franchisor was legally permitted finally to terminate the franchise. This subdivision shall not apply to (i)
the relocation of an existing dealer within that dealer's relevant market area
if the relocation site is to be more than ten miles distant from any other
dealer for the same line-make; (ii) the relocation of an existing dealer within
that dealer's relevant market area if the relocation site is to be more distant
than the existing site from all other dealers of the same line-make in that
relevant market area; or (iii) the relocation of an existing new motorcycle
dealer within two miles of the existing site of the relocating dealer.
b. No new or additional motorcycle dealer franchise shall be established in any
county, city or town the Commonwealth unless the manufacturer, factory branch,
distributor, distributor branch, or factory or distributor representative gives
advance notice to anyall existing franchised dealers of the same
line-make in the Commonwealth. The notice shall be in writing, shall include
the exact street address of the proposed new dealer, and sent by certified
mail, return receipt requested, at least forty-five45 days prior to the
establishment of the new or additional franchise. Any An existing franchise
dealer of the same line make that is serving all or a substantial portion of
the market area likely to be served by the proposed new or additional dealer
franchise may file a written protest with the Commissioner within thirty
30 days of the date the notice is received. Every protest filed
under this subdivision shall include (i) a statement by the existing dealer
that it directly and substantially represents the line-make in all or a
substantial portion of the same market area likely to be served by the proposed
new dealer and (ii) documentation of such asserted representation by the
protesting dealer. Such documentation shall include the protesting dealer's
motorcycle sales volume of the same line-make as the proposed new dealer for
the prior 4 years in the market area likely to be served by the proposed new
dealer. The Commissioner, in his discretion, shall determine whether such
protesting dealer's assertion of representation of the line-make is
sufficiently substantiated that the protesting dealer should be afforded a
formal hearing under § 2.2-4020 to determine whether the protesting dealer or
dealers are providing inadequate representation of such line-make motorcycles
in the market area likely to be served by the proposed new dealer. No hearing
shall be granted to a protesting dealer unless that dealer is either (a) a
dealer of the same line-make that is geographically the closest dealer to the
site of the proposed new dealer or (b) a dealer who has been joined in the
protest by the geographically closest dealer. The If a hearing is granted,
burden of proof in establishing inadequate representation by the protesting
dealer or dealers of such line-make motorcycles in the market area likely to be
served by the proposed new dealer shall be on the manufacturer, factory branch,
distributor, distributor branch, or factory or distributor representative. If
the Commissioner determines that the manufacturer, factory branch, distributor
or factory or distributor representative has failed to carry its burden of
proof, he shall disallow the establishment of the proposed new dealer.
6. Except as otherwise provided in this subdivision and notwithstanding the
terms of any franchise, to terminate, cancel, or refuse to renew the franchise of
any dealer without good cause and unless (i) the dealer and the Commissioner have
received written notice of the franchisor's intentions at least sixty 60 days
prior to the effective date of such termination, cancellation, or the
expiration date of the franchise, setting forth the specific grounds for the
action, and (ii) the Commissioner has determined, if requested in writing by
the dealer within the sixty-day period, and after a hearing on the matter, that
there is good cause for the termination, cancellation, or nonrenewal of the
franchise. In any case where a petition is made to the Commissioner for a
determination as to good cause for the termination, cancellation, or nonrenewal
of a franchise, the franchise in question shall continue in effect pending the
Commissioner's decision or, if that decision is appealed to the circuit court,
pending the decision of the circuit court. In any case in which a franchisor
neither advises a dealer that it does not intend to renew a franchise nor takes
any action to renew a franchise beyond its expiration date, the franchise in
question shall continue in effect on the terms last agreed to by the parties.
Notwithstanding the other provisions of this subdivision, notice of
termination, cancellation, or nonrenewal may be provided to a dealer by a
franchisor not less than fifteen days prior to the effective date of such
termination, cancellation, or nonrenewal when the grounds for such action are
any of the following:
a. Insolvency of the franchised motorcycle dealer or filing of any petition by
or against the franchised motorcycle dealer, under any bankruptcy or receivership
law, leading to liquidation or which is intended to lead to liquidation of the
franchisee's business;
b. Failure of the franchised motorcycle dealer to conduct its customary sales
and service operations during its posted business hours for seven consecutive
business days, except where the failure results from acts of God or
circumstances beyond the direct control of the franchised motorcycle dealer;
c. Revocation of any license which the franchised motorcycle dealer is required
to have to operate a dealership;
d. Conviction of the dealer or any principal of the dealer of a felony.
The change or discontinuance of a marketing or distribution system of a
particular line-make product by a manufacturer or distributor, while the name
identification of the product is continued in substantial form by the same or
different manufacturer or distributor, may be considered to be a franchise
termination, cancellation, or nonrenewal. The provisions of this paragraph
shall apply to changes and discontinuances made after January 1, 1989, but they
shall not be considered by any court in any case in which such a change or
discontinuance occurring prior to that date has been challenged as constituting
a termination, cancellation or nonrenewal.
7. To fail to provide continued parts and service support to a dealer which
holds a franchise in a discontinued line-make for at least five 5 years from
the date of such discontinuance. This requirement shall not apply to a line-make which was discontinued prior to January 1,
1989.
8. To fail to allow a dealer the right at any time to designate a member of his
family as a successor to the dealership in the event of the death or incapacity of
the dealer. It shall be unlawful to prevent or refuse to honor the succession to a
dealership by a member of the family of a deceased or incapacitated dealer if
the franchisor has not provided to the member of the family previously
designated by the dealer as his successor written notice of its objections to
the succession and of such person's right to seek a hearing on the matter
before the Commissioner pursuant to this article, and the Commissioner
determines, if requested in writing by such member of the family within thirty
30 days of receipt of such notice from the franchisor, and
after a hearing on the matter before the Commissioner pursuant to this article,
that the failure to permit or honor the succession is unreasonable under the
circumstances. No member of the family may succeed to a franchise unless (i)
the franchisor has been given written notice as to the identity, financial
ability, and qualifications of the member of the family in question and (ii)
the succession to the franchise will not involve, without the franchisor's
consent, a relocation of the business.
9. To fail to ship monthly to any dealer, if ordered by the dealer, the number
of new motorcycles of each make, series, and model needed by the dealer to
receive a percentage of total new motorcycle sales of each make, series, and
model equitably related to the total new motorcycle production or importation
currently being achieved nationally by each make, series, and model covered
under the franchise. Upon the written request of any dealer holding its sales
or sales and service franchise, the manufacturer or distributor shall disclose
to the dealer in writing the basis upon which new motorcycles are allocated,
scheduled, and delivered to the dealers of the same line-make. If allocation is
at issue in a request for a hearing, the dealer may demand the Commissioner to
direct that the manufacturer or distributor provide to the dealer, within
thirty 30 days of such demand, all records of sales and all records
of distribution of all motorcycles to the same line-make dealers who compete with the dealer requesting the
hearing.
10. To require or otherwise coerce a dealer to underutilize the dealer's
facilities.
11. To include in any franchise with a motorcycle dealer terms that are
contrary to, prohibited by, or otherwise inconsistent with the requirements of this
chapter.
12. For any franchise agreement to require a motorcycle dealer to pay the
attorney's fees of the manufacturer or distributor related to hearings and appeals
brought under this article.
13. To fail to include in any franchise with a motorcycle dealer the following
language: "If any provision herein contravenes the laws or regulations of any
state or other jurisdiction wherein this agreement is to be performed, or
denies access to the procedures, forums, or remedies provided for by such laws
or regulations, such provision shall be deemed to be modified to conform to
such laws or regulations, and all other terms and provisions shall remain in
full force," or words to that effect.
14. To include in any franchise agreement with a motorcycle dealer terms that
prohibit a motorcycle dealer from exercising his right to a trial by jury in any
action where such right otherwise exists. ]