97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB5148

 

Introduced 2/8/2012, by Rep. Jim Sacia

 

SYNOPSIS AS INTRODUCED:
 
625 ILCS 5/5-101  from Ch. 95 1/2, par. 5-101
625 ILCS 5/5-102  from Ch. 95 1/2, par. 5-102
625 ILCS 5/5-102.7

    Amends the Illinois Vehicle Code. Changes the fees charged for inclusion in the Dealer Recovery Trust Fund to $50 (instead of $500 for the applicant's established place of business, and $50 for each additional place of business, if any, and half those amounts if the application is made after June 15 of any year). Provides that in any year for which the balance in the Fund as of August 31st is greater than $1,500,000 (instead of $3,500,000), the Fund Administrator shall notify the Secretary of State and the Secretary shall suspend collection of the fee for the following year for any dealer who meets certain criteria. Provides that no award for a claim from the Fund shall exceed $25,000 (instead of $35,000).


LRB097 17162 HEP 62362 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB5148LRB097 17162 HEP 62362 b

1    AN ACT concerning transportation.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Vehicle Code is amended by changing
5Sections 5-101, 5-102, and 5-102.7 as follows:
 
6    (625 ILCS 5/5-101)  (from Ch. 95 1/2, par. 5-101)
7    Sec. 5-101. New vehicle dealers must be licensed.
8    (a) No person shall engage in this State in the business of
9selling or dealing in, on consignment or otherwise, new
10vehicles of any make, or act as an intermediary or agent or
11broker for any licensed dealer or vehicle purchaser other than
12as a salesperson, or represent or advertise that he is so
13engaged or intends to so engage in such business unless
14licensed to do so in writing by the Secretary of State under
15the provisions of this Section.
16    (b) An application for a new vehicle dealer's license shall
17be filed with the Secretary of State, duly verified by oath, on
18such form as the Secretary of State may by rule or regulation
19prescribe and shall contain:
20        1. The name and type of business organization of the
21    applicant and his established and additional places of
22    business, if any, in this State.
23        2. If the applicant is a corporation, a list of its

 

 

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1    officers, directors, and shareholders having a ten percent
2    or greater ownership interest in the corporation, setting
3    forth the residence address of each; if the applicant is a
4    sole proprietorship, a partnership, an unincorporated
5    association, a trust, or any similar form of business
6    organization, the name and residence address of the
7    proprietor or of each partner, member, officer, director,
8    trustee, or manager.
9        3. The make or makes of new vehicles which the
10    applicant will offer for sale at retail in this State.
11        4. The name of each manufacturer or franchised
12    distributor, if any, of new vehicles with whom the
13    applicant has contracted for the sale of such new vehicles.
14    As evidence of this fact, the application shall be
15    accompanied by a signed statement from each such
16    manufacturer or franchised distributor. If the applicant
17    is in the business of offering for sale new conversion
18    vehicles, trucks or vans, except for trucks modified to
19    serve a special purpose which includes but is not limited
20    to the following vehicles: street sweepers, fertilizer
21    spreaders, emergency vehicles, implements of husbandry or
22    maintenance type vehicles, he must furnish evidence of a
23    sales and service agreement from both the chassis
24    manufacturer and second stage manufacturer.
25        5. A statement that the applicant has been approved for
26    registration under the Retailers' Occupation Tax Act by the

 

 

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1    Department of Revenue: Provided that this requirement does
2    not apply to a dealer who is already licensed hereunder
3    with the Secretary of State, and who is merely applying for
4    a renewal of his license. As evidence of this fact, the
5    application shall be accompanied by a certification from
6    the Department of Revenue showing that that Department has
7    approved the applicant for registration under the
8    Retailers' Occupation Tax Act.
9        6. A statement that the applicant has complied with the
10    appropriate liability insurance requirement. A Certificate
11    of Insurance in a solvent company authorized to do business
12    in the State of Illinois shall be included with each
13    application covering each location at which he proposes to
14    act as a new vehicle dealer. The policy must provide
15    liability coverage in the minimum amounts of $100,000 for
16    bodily injury to, or death of, any person, $300,000 for
17    bodily injury to, or death of, two or more persons in any
18    one accident, and $50,000 for damage to property. Such
19    policy shall expire not sooner than December 31 of the year
20    for which the license was issued or renewed. The expiration
21    of the insurance policy shall not terminate the liability
22    under the policy arising during the period for which the
23    policy was filed. Trailer and mobile home dealers are
24    exempt from this requirement.
25        If the permitted user has a liability insurance policy
26    that provides automobile liability insurance coverage of

 

 

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1    at least $100,000 for bodily injury to or the death of any
2    person, $300,000 for bodily injury to or the death of any 2
3    or more persons in any one accident, and $50,000 for damage
4    to property, then the permitted user's insurer shall be the
5    primary insurer and the dealer's insurer shall be the
6    secondary insurer. If the permitted user does not have a
7    liability insurance policy that provides automobile
8    liability insurance coverage of at least $100,000 for
9    bodily injury to or the death of any person, $300,000 for
10    bodily injury to or the death of any 2 or more persons in
11    any one accident, and $50,000 for damage to property, or
12    does not have any insurance at all, then the dealer's
13    insurer shall be the primary insurer and the permitted
14    user's insurer shall be the secondary insurer.
15        When a permitted user is "test driving" a new vehicle
16    dealer's automobile, the new vehicle dealer's insurance
17    shall be primary and the permitted user's insurance shall
18    be secondary.
19        As used in this paragraph 6, a "permitted user" is a
20    person who, with the permission of the new vehicle dealer
21    or an employee of the new vehicle dealer, drives a vehicle
22    owned and held for sale or lease by the new vehicle dealer
23    which the person is considering to purchase or lease, in
24    order to evaluate the performance, reliability, or
25    condition of the vehicle. The term "permitted user" also
26    includes a person who, with the permission of the new

 

 

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1    vehicle dealer, drives a vehicle owned or held for sale or
2    lease by the new vehicle dealer for loaner purposes while
3    the user's vehicle is being repaired or evaluated.
4        As used in this paragraph 6, "test driving" occurs when
5    a permitted user who, with the permission of the new
6    vehicle dealer or an employee of the new vehicle dealer,
7    drives a vehicle owned and held for sale or lease by a new
8    vehicle dealer that the person is considering to purchase
9    or lease, in order to evaluate the performance,
10    reliability, or condition of the vehicle.
11        As used in this paragraph 6, "loaner purposes" means
12    when a person who, with the permission of the new vehicle
13    dealer, drives a vehicle owned or held for sale or lease by
14    the new vehicle dealer while the user's vehicle is being
15    repaired or evaluated.
16        7. (A) An application for a new motor vehicle dealer's
17    license shall be accompanied by the following license fees:
18            (i) $1,000 for applicant's established place of
19        business, and $100 for each additional place of
20        business, if any, to which the application pertains;
21        but if the application is made after June 15 of any
22        year, the license fee shall be $500 for applicant's
23        established place of business plus $50 for each
24        additional place of business, if any, to which the
25        application pertains. License fees shall be returnable
26        only in the event that the application is denied by the

 

 

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1        Secretary of State. All moneys received by the
2        Secretary of State as license fees under this
3        subparagraph (i) prior to applications for the 2004
4        licensing year shall be deposited into the Motor
5        Vehicle Review Board Fund and shall be used to
6        administer the Motor Vehicle Review Board under the
7        Motor Vehicle Franchise Act. Of the money received by
8        the Secretary of State as license fees under this
9        subparagraph (i) for the 2004 licensing year and
10        thereafter, 10% shall be deposited into the Motor
11        Vehicle Review Board Fund and shall be used to
12        administer the Motor Vehicle Review Board under the
13        Motor Vehicle Franchise Act and 90% shall be deposited
14        into the General Revenue Fund.
15            (ii) Except as provided in subsection (h) of
16        Section 5-102.7 of this Code, an Annual Dealer Recovery
17        Fund Fee in the amount of $50 $500 for the applicant's
18        established place of business, and $50 for each
19        additional place of business, if any, to which the
20        application pertains; but if the application is made
21        after June 15 of any year, the fee shall be $250 for
22        the applicant's established place of business plus $25
23        for each additional place of business, if any, to which
24        the application pertains. License fees shall be
25        returnable only in the event that the application is
26        denied by the Secretary of State. Moneys received under

 

 

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1        this subparagraph (ii) shall be deposited into the
2        Dealer Recovery Trust Fund.
3        (B) An application for a new vehicle dealer's license,
4    other than for a new motor vehicle dealer's license, shall
5    be accompanied by the following license fees:
6            (i) $1,000 for applicant's established place of
7        business, and $50 for each additional place of
8        business, if any, to which the application pertains;
9        but if the application is made after June 15 of any
10        year, the license fee shall be $500 for applicant's
11        established place of business plus $25 for each
12        additional place of business, if any, to which the
13        application pertains. License fees shall be returnable
14        only in the event that the application is denied by the
15        Secretary of State. Of the money received by the
16        Secretary of State as license fees under this
17        subparagraph (i) for the 2004 licensing year and
18        thereafter, 95% shall be deposited into the General
19        Revenue Fund.
20            (ii) Except as provided in subsection (h) of
21        Section 5-102.7 of this Code, an Annual Dealer Recovery
22        Fund Fee in the amount of $50 $500 for the applicant's
23        established place of business, and $50 for each
24        additional place of business, if any, to which the
25        application pertains; but if the application is made
26        after June 15 of any year, the fee shall be $250 for

 

 

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1        the applicant's established place of business plus $25
2        for each additional place of business, if any, to which
3        the application pertains. License fees shall be
4        returnable only in the event that the application is
5        denied by the Secretary of State. Moneys received under
6        this subparagraph (ii) shall be deposited into the
7        Dealer Recovery Trust Fund.
8        8. A statement that the applicant's officers,
9    directors, shareholders having a 10% or greater ownership
10    interest therein, proprietor, a partner, member, officer,
11    director, trustee, manager or other principals in the
12    business have not committed in the past 3 years any one
13    violation as determined in any civil, criminal or
14    administrative proceedings of any one of the following
15    Acts:
16            (A) The Anti Theft Laws of the Illinois Vehicle
17        Code;
18            (B) The Certificate of Title Laws of the Illinois
19        Vehicle Code;
20            (C) The Offenses against Registration and
21        Certificates of Title Laws of the Illinois Vehicle
22        Code;
23            (D) The Dealers, Transporters, Wreckers and
24        Rebuilders Laws of the Illinois Vehicle Code;
25            (E) Section 21-2 of the Criminal Code of 1961,
26        Criminal Trespass to Vehicles; or

 

 

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1            (F) The Retailers' Occupation Tax Act.
2        9. A statement that the applicant's officers,
3    directors, shareholders having a 10% or greater ownership
4    interest therein, proprietor, partner, member, officer,
5    director, trustee, manager or other principals in the
6    business have not committed in any calendar year 3 or more
7    violations, as determined in any civil, criminal or
8    administrative proceedings, of any one or more of the
9    following Acts:
10            (A) The Consumer Finance Act;
11            (B) The Consumer Installment Loan Act;
12            (C) The Retail Installment Sales Act;
13            (D) The Motor Vehicle Retail Installment Sales
14        Act;
15            (E) The Interest Act;
16            (F) The Illinois Wage Assignment Act;
17            (G) Part 8 of Article XII of the Code of Civil
18        Procedure; or
19            (H) The Consumer Fraud Act.
20        10. A bond or certificate of deposit in the amount of
21    $20,000 for each location at which the applicant intends to
22    act as a new vehicle dealer. The bond shall be for the term
23    of the license, or its renewal, for which application is
24    made, and shall expire not sooner than December 31 of the
25    year for which the license was issued or renewed. The bond
26    shall run to the People of the State of Illinois, with

 

 

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1    surety by a bonding or insurance company authorized to do
2    business in this State. It shall be conditioned upon the
3    proper transmittal of all title and registration fees and
4    taxes (excluding taxes under the Retailers' Occupation Tax
5    Act) accepted by the applicant as a new vehicle dealer.
6        11. Such other information concerning the business of
7    the applicant as the Secretary of State may by rule or
8    regulation prescribe.
9        12. A statement that the applicant understands Chapter
10    One through Chapter Five of this Code.
11    (c) Any change which renders no longer accurate any
12information contained in any application for a new vehicle
13dealer's license shall be amended within 30 days after the
14occurrence of such change on such form as the Secretary of
15State may prescribe by rule or regulation, accompanied by an
16amendatory fee of $2.
17    (d) Anything in this Chapter 5 to the contrary
18notwithstanding no person shall be licensed as a new vehicle
19dealer unless:
20        1. He is authorized by contract in writing between
21    himself and the manufacturer or franchised distributor of
22    such make of vehicle to so sell the same in this State, and
23        2. Such person shall maintain an established place of
24    business as defined in this Act.
25    (e) The Secretary of State shall, within a reasonable time
26after receipt, examine an application submitted to him under

 

 

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1this Section and unless he makes a determination that the
2application submitted to him does not conform with the
3requirements of this Section or that grounds exist for a denial
4of the application, under Section 5-501 of this Chapter, grant
5the applicant an original new vehicle dealer's license in
6writing for his established place of business and a
7supplemental license in writing for each additional place of
8business in such form as he may prescribe by rule or regulation
9which shall include the following:
10        1. The name of the person licensed;
11        2. If a corporation, the name and address of its
12    officers or if a sole proprietorship, a partnership, an
13    unincorporated association or any similar form of business
14    organization, the name and address of the proprietor or of
15    each partner, member, officer, director, trustee or
16    manager;
17        3. In the case of an original license, the established
18    place of business of the licensee;
19        4. In the case of a supplemental license, the
20    established place of business of the licensee and the
21    additional place of business to which such supplemental
22    license pertains;
23        5. The make or makes of new vehicles which the licensee
24    is licensed to sell.
25    (f) The appropriate instrument evidencing the license or a
26certified copy thereof, provided by the Secretary of State,

 

 

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1shall be kept posted conspicuously in the established place of
2business of the licensee and in each additional place of
3business, if any, maintained by such licensee.
4    (g) Except as provided in subsection (h) hereof, all new
5vehicle dealer's licenses granted under this Section shall
6expire by operation of law on December 31 of the calendar year
7for which they are granted unless sooner revoked or cancelled
8under the provisions of Section 5-501 of this Chapter.
9    (h) A new vehicle dealer's license may be renewed upon
10application and payment of the fee required herein, and
11submission of proof of coverage under an approved bond under
12the "Retailers' Occupation Tax Act" or proof that applicant is
13not subject to such bonding requirements, as in the case of an
14original license, but in case an application for the renewal of
15an effective license is made during the month of December, the
16effective license shall remain in force until the application
17is granted or denied by the Secretary of State.
18    (i) All persons licensed as a new vehicle dealer are
19required to furnish each purchaser of a motor vehicle:
20        1. In the case of a new vehicle a manufacturer's
21    statement of origin and in the case of a used motor vehicle
22    a certificate of title, in either case properly assigned to
23    the purchaser;
24        2. A statement verified under oath that all identifying
25    numbers on the vehicle agree with those on the certificate
26    of title or manufacturer's statement of origin;

 

 

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1        3. A bill of sale properly executed on behalf of such
2    person;
3        4. A copy of the Uniform Invoice-transaction reporting
4    return referred to in Section 5-402 hereof;
5        5. In the case of a rebuilt vehicle, a copy of the
6    Disclosure of Rebuilt Vehicle Status; and
7        6. In the case of a vehicle for which the warranty has
8    been reinstated, a copy of the warranty.
9    (j) Except at the time of sale or repossession of the
10vehicle, no person licensed as a new vehicle dealer may issue
11any other person a newly created key to a vehicle unless the
12new vehicle dealer makes a copy of the driver's license or
13State identification card of the person requesting or obtaining
14the newly created key. The new vehicle dealer must retain the
15copy for 30 days.
16    A new vehicle dealer who violates this subsection (j) is
17guilty of a petty offense. Violation of this subsection (j) is
18not cause to suspend, revoke, cancel, or deny renewal of the
19new vehicle dealer's license.
20    This amendatory Act of 1983 shall be applicable to the 1984
21registration year and thereafter.
22(Source: P.A. 97-480, eff. 10-1-11.)
 
23    (625 ILCS 5/5-102)  (from Ch. 95 1/2, par. 5-102)
24    Sec. 5-102. Used vehicle dealers must be licensed.
25    (a) No person, other than a licensed new vehicle dealer,

 

 

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1shall engage in the business of selling or dealing in, on
2consignment or otherwise, 5 or more used vehicles of any make
3during the year (except house trailers as authorized by
4paragraph (j) of this Section and rebuilt salvage vehicles sold
5by their rebuilders to persons licensed under this Chapter), or
6act as an intermediary, agent or broker for any licensed dealer
7or vehicle purchaser (other than as a salesperson) or represent
8or advertise that he is so engaged or intends to so engage in
9such business unless licensed to do so by the Secretary of
10State under the provisions of this Section.
11    (b) An application for a used vehicle dealer's license
12shall be filed with the Secretary of State, duly verified by
13oath, in such form as the Secretary of State may by rule or
14regulation prescribe and shall contain:
15        1. The name and type of business organization
16    established and additional places of business, if any, in
17    this State.
18        2. If the applicant is a corporation, a list of its
19    officers, directors, and shareholders having a ten percent
20    or greater ownership interest in the corporation, setting
21    forth the residence address of each; if the applicant is a
22    sole proprietorship, a partnership, an unincorporated
23    association, a trust, or any similar form of business
24    organization, the names and residence address of the
25    proprietor or of each partner, member, officer, director,
26    trustee or manager.

 

 

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1        3. A statement that the applicant has been approved for
2    registration under the Retailers' Occupation Tax Act by the
3    Department of Revenue. However, this requirement does not
4    apply to a dealer who is already licensed hereunder with
5    the Secretary of State, and who is merely applying for a
6    renewal of his license. As evidence of this fact, the
7    application shall be accompanied by a certification from
8    the Department of Revenue showing that the Department has
9    approved the applicant for registration under the
10    Retailers' Occupation Tax Act.
11        4. A statement that the applicant has complied with the
12    appropriate liability insurance requirement. A Certificate
13    of Insurance in a solvent company authorized to do business
14    in the State of Illinois shall be included with each
15    application covering each location at which he proposes to
16    act as a used vehicle dealer. The policy must provide
17    liability coverage in the minimum amounts of $100,000 for
18    bodily injury to, or death of, any person, $300,000 for
19    bodily injury to, or death of, two or more persons in any
20    one accident, and $50,000 for damage to property. Such
21    policy shall expire not sooner than December 31 of the year
22    for which the license was issued or renewed. The expiration
23    of the insurance policy shall not terminate the liability
24    under the policy arising during the period for which the
25    policy was filed. Trailer and mobile home dealers are
26    exempt from this requirement.

 

 

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1        If the permitted user has a liability insurance policy
2    that provides automobile liability insurance coverage of
3    at least $100,000 for bodily injury to or the death of any
4    person, $300,000 for bodily injury to or the death of any 2
5    or more persons in any one accident, and $50,000 for damage
6    to property, then the permitted user's insurer shall be the
7    primary insurer and the dealer's insurer shall be the
8    secondary insurer. If the permitted user does not have a
9    liability insurance policy that provides automobile
10    liability insurance coverage of at least $100,000 for
11    bodily injury to or the death of any person, $300,000 for
12    bodily injury to or the death of any 2 or more persons in
13    any one accident, and $50,000 for damage to property, or
14    does not have any insurance at all, then the dealer's
15    insurer shall be the primary insurer and the permitted
16    user's insurer shall be the secondary insurer.
17        When a permitted user is "test driving" a used vehicle
18    dealer's automobile, the used vehicle dealer's insurance
19    shall be primary and the permitted user's insurance shall
20    be secondary.
21        As used in this paragraph 4, a "permitted user" is a
22    person who, with the permission of the used vehicle dealer
23    or an employee of the used vehicle dealer, drives a vehicle
24    owned and held for sale or lease by the used vehicle dealer
25    which the person is considering to purchase or lease, in
26    order to evaluate the performance, reliability, or

 

 

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1    condition of the vehicle. The term "permitted user" also
2    includes a person who, with the permission of the used
3    vehicle dealer, drives a vehicle owned or held for sale or
4    lease by the used vehicle dealer for loaner purposes while
5    the user's vehicle is being repaired or evaluated.
6        As used in this paragraph 4, "test driving" occurs when
7    a permitted user who, with the permission of the used
8    vehicle dealer or an employee of the used vehicle dealer,
9    drives a vehicle owned and held for sale or lease by a used
10    vehicle dealer that the person is considering to purchase
11    or lease, in order to evaluate the performance,
12    reliability, or condition of the vehicle.
13        As used in this paragraph 4, "loaner purposes" means
14    when a person who, with the permission of the used vehicle
15    dealer, drives a vehicle owned or held for sale or lease by
16    the used vehicle dealer while the user's vehicle is being
17    repaired or evaluated.
18        5. An application for a used vehicle dealer's license
19    shall be accompanied by the following license fees:
20            (A) $1,000 for applicant's established place of
21        business, and $50 for each additional place of
22        business, if any, to which the application pertains;
23        however, if the application is made after June 15 of
24        any year, the license fee shall be $500 for applicant's
25        established place of business plus $25 for each
26        additional place of business, if any, to which the

 

 

HB5148- 18 -LRB097 17162 HEP 62362 b

1        application pertains. License fees shall be returnable
2        only in the event that the application is denied by the
3        Secretary of State. Of the money received by the
4        Secretary of State as license fees under this
5        subparagraph (A) for the 2004 licensing year and
6        thereafter, 95% shall be deposited into the General
7        Revenue Fund.
8            (B) Except as provided in subsection (h) of Section
9        5-102.7 of this Code, an Annual Dealer Recovery Fund
10        Fee in the amount of $50 $500 for the applicant's
11        established place of business, and $50 for each
12        additional place of business, if any, to which the
13        application pertains; but if the application is made
14        after June 15 of any year, the fee shall be $250 for
15        the applicant's established place of business plus $25
16        for each additional place of business, if any, to which
17        the application pertains. License fees shall be
18        returnable only in the event that the application is
19        denied by the Secretary of State. Moneys received under
20        this subparagraph (B) shall be deposited into the
21        Dealer Recovery Trust Fund.
22        6. A statement that the applicant's officers,
23    directors, shareholders having a 10% or greater ownership
24    interest therein, proprietor, partner, member, officer,
25    director, trustee, manager or other principals in the
26    business have not committed in the past 3 years any one

 

 

HB5148- 19 -LRB097 17162 HEP 62362 b

1    violation as determined in any civil, criminal or
2    administrative proceedings of any one of the following
3    Acts:
4            (A) The Anti Theft Laws of the Illinois Vehicle
5        Code;
6            (B) The Certificate of Title Laws of the Illinois
7        Vehicle Code;
8            (C) The Offenses against Registration and
9        Certificates of Title Laws of the Illinois Vehicle
10        Code;
11            (D) The Dealers, Transporters, Wreckers and
12        Rebuilders Laws of the Illinois Vehicle Code;
13            (E) Section 21-2 of the Illinois Criminal Code of
14        1961, Criminal Trespass to Vehicles; or
15            (F) The Retailers' Occupation Tax Act.
16        7. A statement that the applicant's officers,
17    directors, shareholders having a 10% or greater ownership
18    interest therein, proprietor, partner, member, officer,
19    director, trustee, manager or other principals in the
20    business have not committed in any calendar year 3 or more
21    violations, as determined in any civil or criminal or
22    administrative proceedings, of any one or more of the
23    following Acts:
24            (A) The Consumer Finance Act;
25            (B) The Consumer Installment Loan Act;
26            (C) The Retail Installment Sales Act;

 

 

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1            (D) The Motor Vehicle Retail Installment Sales
2        Act;
3            (E) The Interest Act;
4            (F) The Illinois Wage Assignment Act;
5            (G) Part 8 of Article XII of the Code of Civil
6        Procedure; or
7            (H) The Consumer Fraud Act.
8        8. A bond or Certificate of Deposit in the amount of
9    $20,000 for each location at which the applicant intends to
10    act as a used vehicle dealer. The bond shall be for the
11    term of the license, or its renewal, for which application
12    is made, and shall expire not sooner than December 31 of
13    the year for which the license was issued or renewed. The
14    bond shall run to the People of the State of Illinois, with
15    surety by a bonding or insurance company authorized to do
16    business in this State. It shall be conditioned upon the
17    proper transmittal of all title and registration fees and
18    taxes (excluding taxes under the Retailers' Occupation Tax
19    Act) accepted by the applicant as a used vehicle dealer.
20        9. Such other information concerning the business of
21    the applicant as the Secretary of State may by rule or
22    regulation prescribe.
23        10. A statement that the applicant understands Chapter
24    1 through Chapter 5 of this Code.
25        11. A copy of the certification from the prelicensing
26    education program.

 

 

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1    (c) Any change which renders no longer accurate any
2information contained in any application for a used vehicle
3dealer's license shall be amended within 30 days after the
4occurrence of each change on such form as the Secretary of
5State may prescribe by rule or regulation, accompanied by an
6amendatory fee of $2.
7    (d) Anything in this Chapter to the contrary
8notwithstanding, no person shall be licensed as a used vehicle
9dealer unless such person maintains an established place of
10business as defined in this Chapter.
11    (e) The Secretary of State shall, within a reasonable time
12after receipt, examine an application submitted to him under
13this Section. Unless the Secretary makes a determination that
14the application submitted to him does not conform to this
15Section or that grounds exist for a denial of the application
16under Section 5-501 of this Chapter, he must grant the
17applicant an original used vehicle dealer's license in writing
18for his established place of business and a supplemental
19license in writing for each additional place of business in
20such form as he may prescribe by rule or regulation which shall
21include the following:
22        1. The name of the person licensed;
23        2. If a corporation, the name and address of its
24    officers or if a sole proprietorship, a partnership, an
25    unincorporated association or any similar form of business
26    organization, the name and address of the proprietor or of

 

 

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1    each partner, member, officer, director, trustee or
2    manager;
3        3. In case of an original license, the established
4    place of business of the licensee;
5        4. In the case of a supplemental license, the
6    established place of business of the licensee and the
7    additional place of business to which such supplemental
8    license pertains.
9    (f) The appropriate instrument evidencing the license or a
10certified copy thereof, provided by the Secretary of State
11shall be kept posted, conspicuously, in the established place
12of business of the licensee and in each additional place of
13business, if any, maintained by such licensee.
14    (g) Except as provided in subsection (h) of this Section,
15all used vehicle dealer's licenses granted under this Section
16expire by operation of law on December 31 of the calendar year
17for which they are granted unless sooner revoked or cancelled
18under Section 5-501 of this Chapter.
19    (h) A used vehicle dealer's license may be renewed upon
20application and payment of the fee required herein, and
21submission of proof of coverage by an approved bond under the
22"Retailers' Occupation Tax Act" or proof that applicant is not
23subject to such bonding requirements, as in the case of an
24original license, but in case an application for the renewal of
25an effective license is made during the month of December, the
26effective license shall remain in force until the application

 

 

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1for renewal is granted or denied by the Secretary of State.
2    (i) All persons licensed as a used vehicle dealer are
3required to furnish each purchaser of a motor vehicle:
4        1. A certificate of title properly assigned to the
5    purchaser;
6        2. A statement verified under oath that all identifying
7    numbers on the vehicle agree with those on the certificate
8    of title;
9        3. A bill of sale properly executed on behalf of such
10    person;
11        4. A copy of the Uniform Invoice-transaction reporting
12    return referred to in Section 5-402 of this Chapter;
13        5. In the case of a rebuilt vehicle, a copy of the
14    Disclosure of Rebuilt Vehicle Status; and
15        6. In the case of a vehicle for which the warranty has
16    been reinstated, a copy of the warranty.
17    (j) A real estate broker holding a valid certificate of
18registration issued pursuant to "The Real Estate Brokers and
19Salesmen License Act" may engage in the business of selling or
20dealing in house trailers not his own without being licensed as
21a used vehicle dealer under this Section; however such broker
22shall maintain a record of the transaction including the
23following:
24        (1) the name and address of the buyer and seller,
25        (2) the date of sale,
26        (3) a description of the mobile home, including the

 

 

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1    vehicle identification number, make, model, and year, and
2        (4) the Illinois certificate of title number.
3    The foregoing records shall be available for inspection by
4any officer of the Secretary of State's Office at any
5reasonable hour.
6    (k) Except at the time of sale or repossession of the
7vehicle, no person licensed as a used vehicle dealer may issue
8any other person a newly created key to a vehicle unless the
9used vehicle dealer makes a copy of the driver's license or
10State identification card of the person requesting or obtaining
11the newly created key. The used vehicle dealer must retain the
12copy for 30 days.
13    A used vehicle dealer who violates this subsection (k) is
14guilty of a petty offense. Violation of this subsection (k) is
15not cause to suspend, revoke, cancel, or deny renewal of the
16used vehicle dealer's license.
17    (l) Used vehicle dealers licensed under this Section shall
18provide the Secretary of State a register for the sale at
19auction of each salvage or junk certificate vehicle. Each
20register shall include the following information:
21        1. The year, make, model, style and color of the
22    vehicle;
23        2. The vehicle's manufacturer's identification number
24    or, if applicable, the Secretary of State or Illinois
25    Department of State Police identification number;
26        3. The date of acquisition of the vehicle;

 

 

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1        4. The name and address of the person from whom the
2    vehicle was acquired;
3        5. The name and address of the person to whom any
4    vehicle was disposed, the person's Illinois license number
5    or if the person is an out-of-state salvage vehicle buyer,
6    the license number from the state or jurisdiction where the
7    buyer is licensed; and
8        6. The purchase price of the vehicle.
9    The register shall be submitted to the Secretary of State
10via written or electronic means within 10 calendar days from
11the date of the auction.
12(Source: P.A. 96-678, eff. 8-25-09; 97-480, eff. 10-1-11.)
 
13    (625 ILCS 5/5-102.7)
14    Sec. 5-102.7. Dealer Recovery Trust Fund.
15    (a) The General Assembly finds that motor vehicle dealers
16that go out of business without fulfilling agreements to pay
17off the balance of their customers' liens on traded-in vehicles
18cause financial harm to those customers by leaving those
19customers liable for multiple vehicle loans and cause harm to
20the integrity of the motor vehicle retailing industry. It is
21the intent of the General Assembly to protect vehicle
22purchasers by creating a Dealer Recovery Trust Fund to
23reimburse these consumers.
24    (b) The Dealer Recovery Trust Fund shall be used solely for
25the limited purpose of helping victims of dealership closings.

 

 

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1Any interest accrued by moneys in the Fund shall be deposited
2and become part of the Dealer Recovery Trust Fund and its
3purpose. The sole beneficiaries of the Dealer Recovery Trust
4Fund are victims of dealership closings.
5    (c) Except where the context otherwise requires, the
6following words and phrases, when used in this Section, have
7the meanings ascribed to them in this subsection (c):
8    "Applicant" means a person who applies for reimbursement
9from the Dealer Recovery Trust Fund Board.
10    "Board" means the Dealer Recovery Trust Fund Board created
11under this Section.
12    "Dealer" means a new vehicle dealer licensed under Section
135-101 or a used vehicle dealer licensed under Section 5-102,
14excepting a dealer who primarily sells mobile homes,
15recreational vehicles, or trailers or any dealer who sells 25
16vehicles or fewer per calendar year.
17    "Fund" means the Dealer Recovery Trust Fund created under
18this Section.
19    "Fund Administrator" means the private entity, which shall
20be appointed by the Board, that administers the Dealer Recovery
21Trust Fund.
22    (d) Beginning October 1, 2011, each application or renewal
23for a new vehicle dealer's license and each application or
24renewal for a used vehicle dealer's license shall be
25accompanied by the applicable Annual Dealer Recovery Fund Fee
26under Section 5-101 or 5-102 of this Code. The fee shall be in

 

 

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1addition to any other fees imposed under this Article, shall be
2submitted at the same time an application or renewal for a new
3vehicle dealer's license or used vehicle dealer's license is
4submitted, and shall be made payable to and remitted directly
5to the Dealer Recovery Trust Fund, a trust fund outside of the
6State Treasury which is hereby created. In addition, the Dealer
7Recovery Trust Fund may accept any federal, State, or private
8moneys for deposit into the Fund.
9    (e) The Fund Administrator shall maintain a list of all
10dealers who have paid the fee under subsection (d) of this
11Section for the current year, which shall be available to the
12Secretary of State and the Board. The Secretary of State shall
13revoke the dealer license of any dealer who does not pay the
14fee imposed under subsection (d) of this Section. The Secretary
15of State and the Fund Administrator may enter into information
16sharing agreements as needed to implement this Section.
17    (f) The Fund shall be audited annually by an independent
18auditor who is a certified public accountant and who has been
19selected by the Board. The independent auditor shall compile an
20annual report, which shall be filed with the Board and shall be
21a public record. The auditor shall be paid by the Fund,
22pursuant to an order of the Board.
23    (g) The Fund shall be maintained by the Fund Administrator,
24who shall keep current records of the amounts deposited into
25the Fund and the amounts paid out of the Fund pursuant to an
26order of the Board. These records shall be made available to

 

 

HB5148- 28 -LRB097 17162 HEP 62362 b

1all members of the Board upon reasonable request during normal
2business hours. The Fund Administrator shall report the balance
3in the Fund to the Board monthly, by the 15th day of each
4month. For purposes of determining the amount available to pay
5claims under this Section at any meeting of the Board, the
6Board shall use the Fund Administrator's most recent monthly
7report. The Fund Administrator shall purchase liability
8insurance to cover management of the Fund at a cost not to
9exceed 2% of the balance in the Fund as of January 15th of that
10year.
11    (h) In any year for which the balance in the Fund as of
12August 31st is greater than $1,500,000 $3,500,000, the Fund
13Administrator shall notify the Secretary of State and the
14Secretary of State shall suspend collection of the fee for the
15following year for any dealer who has not had a claim paid from
16the Fund, has not had his or her license suspended or revoked,
17and has not been assessed any civil penalties under this Code
18during the 3 previous years.
19    (i) Moneys in the Dealer Recovery Trust Fund may be paid
20from the Fund only as directed by a written order of the Board
21and used only for the following purposes:
22        (i) to pay claims under a written order of the Board as
23    provided in this Section; or
24        (ii) to reimburse the Fund Administrator for its
25    expenses related to the administration of the Fund,
26    provided that the reimbursement to the Fund Administrator

 

 

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1    in any year shall not exceed 2% of the balance in the Fund
2    as of January 15th of that year.
3    (j) The Dealer Recovery Trust Fund Board is hereby created.
4The Board shall consist of the Secretary of State, or his or
5her designee, who shall serve as chair, the Attorney General,
6or his or her designee, who shall serve as secretary, and one
7person alternatively representing new and independent Illinois
8automobile dealers, selected collectively by the Attorney
9General, or his or her designee, and the Secretary of State, or
10his or her designee. The Secretary of State may propose
11procedures and employ personnel as necessary to implement this
12Section. The Board shall meet quarterly, and as needed, as
13directed by the chair. The Board may not pay out any claims
14before the balance deposited into the Fund exceeds $500,000.
15Board meetings shall be open to the public. The Board has the
16authority to take any action by at least a two-thirds majority
17vote.
18    (k) The following persons may apply to the Board for
19reimbursement from the Dealer Recovery Trust Fund:
20        (i) A retail customer who, on or after October 1, 2011,
21    purchases a vehicle from a dealer who subsequently files
22    for bankruptcy or whose vehicle dealer's license is
23    subsequently revoked by the Secretary of State or otherwise
24    terminated and, as part of the purchase transaction, trades
25    in a vehicle with an outstanding lien to the dealer if lien
26    satisfaction was a condition of the purchase agreement and

 

 

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1    the retail customer determines that the lien has not been
2    satisfied;
3        (ii) A retail customer who, on or after October 1,
4    2011, purchases a vehicle with an undisclosed lien from a
5    dealer who subsequently files for bankruptcy or whose
6    vehicle dealer's license is subsequently revoked by the
7    Secretary of State or otherwise terminated;
8        (iii) A dealer who, on or after October 1, 2011,
9    purchases a vehicle with an undisclosed lien from another
10    dealer who subsequently files for bankruptcy or whose
11    vehicle dealer's license is subsequently revoked by the
12    Secretary of State or otherwise terminated.
13    (l) To be considered by the Board, an applicant must submit
14his or her claim to the Board within 9 months after the date of
15the transaction that gave rise to the claim.
16    (m) At each meeting of the Board, it shall consider all
17claims that are properly submitted to it on forms prescribed by
18the Secretary of State at least 30 days before the date of the
19Board's meeting. Before the Board may consider a claim against
20a dealer, it must make a written determination that the dealer
21has filed for bankruptcy under the provisions of 11 U.S.C.
22Chapter 7; that the Secretary of State has revoked his or her
23dealer's license; or that the license has been otherwise
24terminated. Once the Board has made this determination, it may
25consider the applicant's claim against the dealer. If a
26two-thirds majority of the Board determines that the dealer has

 

 

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1committed a violation under subsection (k), it shall grant the
2applicant's claim. Except as otherwise provided in this
3Section, the maximum amount of any award for a claim under
4paragraph (i) of subsection (k) of this Section shall be equal
5to the amount of the unpaid balance of the lien that the dealer
6agreed to pay off on behalf of the applicant as shown on the
7bill of sale or the retail installment sales contract. The
8maximum amount of any claim under paragraph (ii) or (iii) of
9subsection (k) of this Section shall be equal to the amount of
10the undisclosed lien. However, no award for a claim under
11subsection (k) of this Section shall exceed $25,000 $35,000.
12    (n) If the balance in the Fund at the time of any Board
13meeting is less than the amount of the total amount of all
14claims awarded at that meeting, then all awards made at that
15meeting shall be reduced, pro rata, so that the amount of
16claims does not exceed the balance in the Fund. Before it
17reviews new claims, the Board shall issue written orders to pay
18the remaining portion of any claims that were so reduced,
19provided that the balance in the Fund is sufficient to pay
20those claims.
21    (o) Whenever the balance of the Fund falls below $500,000,
22the Board may charge dealers an additional assessment of up to
23$50 to bring the balance to at least $500,000. Not more than
24one additional assessment may be made against a dealer in any
2512-month period.
26    (p) If the total amount of claims awarded against any

 

 

HB5148- 32 -LRB097 17162 HEP 62362 b

1dealer exceeds 33% of the balance in the Fund, the Board may
2permanently reduce the amount of those claims, pro rata, so
3that those claims do not exceed 33% of the balance in the Fund.
4    (q) The Board shall issue a written order directing the
5Fund Administrator to pay an applicant's claim to a secured
6party where the Board has received a signed agreement between
7the applicant and the secured party holding the lien. The
8agreement must (i) state that the applicant and the secured
9party agree to accept payment from the Fund to the secured
10party as settlement in full of all claims against the dealer;
11and (ii) release the lien and the title, if applicable, to the
12vehicle that was the subject of the claim. The written order
13shall state the amount of the claim and the name and address of
14the secured party to whom the claim shall be paid. The Fund
15Administrator shall pay the claim within 30 days after it
16receives the Board's order.
17    (r) No dealer or principal associated with a dealer's
18license is eligible for licensure, renewal or relicensure until
19the full amount of reimbursement for an unpaid claim, plus
20interest as determined by the Board, is paid to the Fund.
21Nothing in this Section shall limit the authority of the
22Secretary of State to suspend, revoke, or levy civil penalties
23against a dealer, nor shall full repayment of the amount owed
24to the Fund nullify or modify the effect of any action by the
25Secretary.
26    (s) Nothing in this Section shall limit the right of any

 

 

HB5148- 33 -LRB097 17162 HEP 62362 b

1person to seek relief though civil action against any other
2person as an alternative to seeking reimbursement from the
3Fund.
4(Source: P.A. 97-480, eff. 10-1-11.)