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Full Text of SB0076  100th General Assembly

SB0076 100TH GENERAL ASSEMBLY

  
  

 


 
100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
SB0076

 

Introduced 1/12/2017, by Sen. Ira I. Silverstein

 

SYNOPSIS AS INTRODUCED:
 
See Index

    Creates the New Vehicle Buyer Protection Act of 2017. Provides that if a manufacturer is unable to service or repair a new motor vehicle to conform to the applicable express warranties after a reasonable number of attempts, the manufacturer shall either promptly replace the new motor vehicle or make restitution to the buyer. Provides that it shall be presumed that a reasonable number of attempts have been made to conform a new motor vehicle to the applicable express warranties if, within 18 months from delivery to the buyer or 18,000 miles on the odometer of the vehicle: (1) the same nonconformity results in a condition that is likely to cause death or serious bodily injury if the vehicle is driven after 2 or more repairs; (2) the same nonconformity has been subject to repair 4 or more times; or (3) the vehicle is out of service by reason of repair for more than 30 calendar days since delivery of the vehicle to the buyer. Requires a buyer to initiate a qualified third-party dispute resolution process, if available, before asserting the presumption that a reasonable number of attempts have been made to repair the nonconformity. Prohibits a person from selling a motor vehicle without first disclosing to the prospective buyer that the vehicle had a nonconformity and the nonconformity was corrected. Contains provisions concerning a "Lemon Law Buyback" decal; a warranty buyback notice; remedies; a manufacturer's fee for each vehicle sold; sales and use tax reimbursements; and other matters. Amends the Retailers' Occupation Tax Act and the Illinois Vehicle Code. Changes references to "New Vehicle Buyer Protection Act" to "New Vehicle Buyer Protection Act of 2017". Amends the State Finance Act. Creates the Motor Vehicle Dispute Resolution Certification Fund. Repeals the New Vehicle Buyer Protection Act.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

SB0076LRB100 03638 KTG 13643 b

1    AN ACT concerning business.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 1. Short title. This Act may be cited as the New
5Vehicle Buyer Protection Act of 2017.
 
6    Section 3. Definitions. As used in this Act:
7    "Buyer" or "retail buyer" means any individual who buys a
8new motor vehicle from a person, including a partnership,
9limited liability company, corporation, association, or any
10other legal entity, engaged in the business of manufacturing,
11distributing, or selling vehicles at retail.
12    "Distributor" means any individual, partnership,
13corporation, association, or other legal relationship that
14stands between the manufacturer and the retail seller in
15purchases, consignments, or contracts for sale of motor
16vehicles.
17    "Express warranty" has the same meaning, for the purposes
18of this Act, as it has for the purposes of the Uniform
19Commercial Code.
20    "Lease" means any contract for the lease or bailment for
21the use of a motor vehicle by an individual, for a term
22exceeding 4 months, primarily for personal, family, or
23household purposes, whether or not it is agreed that the lessee

 

 

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1bears the risk of the vehicles' depreciation.
2    "Lessee" means an individual who leases a motor vehicle
3under a lease.
4    "Lessor" means a person who regularly leases motor vehicles
5under a lease.
6    "Manufacturer" means any individual, partnership,
7corporation, association, or other legal relationship that
8manufactures, assembles, or produces motor vehicles.
9    "Motor home" means a vehicular unit built on, or
10permanently attached to, a self-propelled motor vehicle
11chassis, chassis cab, or van, which becomes an integral part of
12the completed vehicle, designed for human habitation for
13recreational or emergency occupancy.
14    "New motor vehicle" means a new motor vehicle that is
15bought or used primarily for personal, family, or household
16purposes. "New motor vehicle" also means a new motor vehicle
17with a gross vehicle weight under 10,000 pounds that is bought
18or used primarily for business purposes by a person, including
19a partnership, limited liability company, corporation,
20association, or any other legal entity, to which not more than
215 motor vehicles are registered in this State. "New motor
22vehicle" includes the chassis, cab, and that portion of a motor
23home devoted to its propulsion, but does not include any
24portion designed, used, or maintained primarily for human
25habitation, a dealer-owned vehicle, and a "demonstrator" or
26other motor vehicle sold with a manufacturer's new car

 

 

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1warranty, but does not include a motorcycle or a motor vehicle
2which is not registered under the Illinois Vehicle Code because
3it is to be operated or used exclusively off the highways. A
4demonstrator is a vehicle assigned by a dealer for the purpose
5of demonstrating qualities and characteristics common to
6vehicles of the same or similar model and type.
7    "Nonconformity" means a nonconformity which substantially
8impairs the use, value, or safety of the new motor vehicle to
9the buyer or lessee.
10    "Retail seller" or "retailer" means any individual,
11partnership, corporation, association, or other legal
12relationship that engages in the business of selling or leasing
13motor vehicles to retail buyers.
14    "Service contract" means a contract in writing to perform,
15over a fixed period of time or for a specified duration,
16services relating to the maintenance or repair of a motor
17vehicle, except that this term does not include a policy of
18automobile insurance as defined in Section 143.13 of the
19Illinois Insurance Code.
 
20    Section 5. Failure to service or repair. If a manufacturer
21or its representative in this State is unable to service or
22repair a new motor vehicle to conform to the applicable express
23warranties after a reasonable number of attempts, the
24manufacturer shall either promptly replace the new motor
25vehicle in accordance with paragraph (1) or promptly make

 

 

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1restitution to the buyer in accordance with paragraph (2).
2However, the buyer shall be free to elect restitution in lieu
3of replacement, and in no event shall the buyer be required by
4the manufacturer to accept a replacement vehicle.
5        (1) In the case of replacement, the manufacturer shall
6    replace the buyer's vehicle with a new motor vehicle
7    substantially identical to the vehicle replaced. The
8    replacement vehicle shall be accompanied by all express and
9    implied warranties that normally accompany new motor
10    vehicles of that specific kind. The manufacturer also shall
11    pay for, or to, the buyer the amount of any sales or use
12    tax, license fees, registration fees, and other official
13    fees which the buyer is obligated to pay in connection with
14    the replacement, plus any incidental damages to which the
15    buyer is entitled under Section 30, including, but not
16    limited to, reasonable repair, towing, and rental car costs
17    actually incurred by the buyer.
18        (2) In the case of restitution, the manufacturer shall
19    make restitution in an amount equal to the actual price
20    paid or payable by the buyer, including any charges for
21    transportation and manufacturer-installed options, but
22    excluding non-manufacturer items installed by a dealer or
23    the buyer, and including any collateral charges such as
24    sales or use tax, license fees, registration fees, and
25    other official fees, plus any incidental damages to which
26    the buyer is entitled under Section 30, including, but not

 

 

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1    limited to, reasonable repair, towing, and rental car costs
2    actually incurred by the buyer.
3        (3) When the manufacturer replaces the new motor
4    vehicle pursuant to paragraph (1), the buyer shall only be
5    liable to pay the manufacturer an amount directly
6    attributable to use by the buyer of the replaced vehicle
7    prior to the time the buyer first delivered the vehicle to
8    the manufacturer or distributor, or its authorized service
9    and repair facility for correction of the problem that gave
10    rise to the nonconformity. When restitution is made
11    pursuant to paragraph (2), the amount to be paid by the
12    manufacturer to the buyer may be reduced by the
13    manufacturer by that amount directly attributable to use by
14    the buyer prior to the time the buyer first delivered the
15    vehicle to the manufacturer or distributor, or its
16    authorized service and repair facility for correction of
17    the problem that gave rise to the nonconformity. The amount
18    directly attributable to use by the buyer shall be
19    determined by multiplying the actual price of the new motor
20    vehicle paid or payable by the buyer, including any charges
21    for transportation and manufacturer-installed options, by
22    a fraction having as its denominator 120,000 and having as
23    its numerator the number of miles traveled by the new motor
24    vehicle prior to the time the buyer first delivered the
25    vehicle to the manufacturer or distributor, or its
26    authorized service and repair facility for correction of

 

 

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1    the problem that gave rise to the nonconformity. Nothing in
2    this paragraph shall in any way limit the rights or
3    remedies available to the buyer under any other law.
4        (4) A buyer of a new motor vehicle shall also include a
5    lessee of a new motor vehicle.
 
6    Section 10. Nonconformity.
7    (a) It shall be presumed that a reasonable number of
8attempts have been made to conform a new motor vehicle to the
9applicable express warranties if, within 18 months from
10delivery to the buyer or 18,000 miles on the odometer of the
11vehicle, whichever occurs first, one or more of the following
12occurs:
13        (1) The same nonconformity results in a condition that
14    is likely to cause death or serious bodily injury if the
15    vehicle is driven and the nonconformity has been subject to
16    repair 2 or more times by the manufacturer or its agents,
17    and the buyer or lessee has at least once directly notified
18    the manufacturer of the need for the repair of the
19    nonconformity.
20        (2) The same nonconformity has been subject to repair 4
21    or more times by the manufacturer or its agents and the
22    buyer has at least once directly notified the manufacturer
23    of the need for the repair of the nonconformity.
24        (3) The vehicle is out of service by reason of repair
25    of nonconformities by the manufacturer or its agents for a

 

 

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1    cumulative total of more than 30 calendar days since
2    delivery of the vehicle to the buyer. The 30-day limit
3    shall be extended only if repairs cannot be performed due
4    to conditions beyond the control of the manufacturer or its
5    agents. The buyer shall be required to directly notify the
6    manufacturer pursuant to paragraphs (1) and (2) only if the
7    manufacturer has clearly and conspicuously disclosed to
8    the buyer, with the warranty or the owner's manual, the
9    provisions of this Section and that of Section 5, including
10    the requirement that the buyer must notify the manufacturer
11    directly pursuant to paragraphs (1) and (2). The
12    notification, if required, shall be sent to the address, if
13    any, specified clearly and conspicuously by the
14    manufacturer in the warranty or owner's manual. This
15    presumption shall be a rebuttable presumption affecting
16    the burden of proof, and it may be asserted by the buyer in
17    any civil action, including an action in small claims
18    court, or other formal or informal proceeding.
19    (b) If a qualified third-party dispute resolution process
20exists, and the buyer receives timely notification in writing
21of the availability of that qualified third-party dispute
22resolution process with a description of its operation and
23effect, the presumption in subsection (a) may not be asserted
24by the buyer until after the buyer has initially resorted to
25the qualified third-party dispute resolution process as
26required in subsection (c). Notification of the availability of

 

 

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1the qualified third-party dispute resolution process is not
2timely if the buyer suffers any prejudice resulting from any
3delay in giving the notification. If a qualified third-party
4dispute resolution process does not exist, or if the buyer is
5dissatisfied with that third-party decision, or if the
6manufacturer or its agent neglects to promptly fulfill the
7terms of the qualified third-party dispute resolution process
8decision after the decision is accepted by the buyer, the buyer
9may assert the presumption provided in subsection (a) in an
10action to enforce the buyer's rights under Section 5. The
11findings and decision of a qualified third-party dispute
12resolution process shall be admissible in evidence in the
13action without further foundation. Any period of limitation of
14actions under any federal or State laws with respect to any
15person shall be extended for a period equal to the number of
16days between the date a complaint is filed with a third-party
17dispute resolution process and the date of its decision or the
18date before which the manufacturer or its agent is required by
19the decision to fulfill its terms if the decision is accepted
20by the buyer, whichever occurs later.
21    (c) A qualified third-party dispute resolution process
22shall be one that does all of the following:
23        (1) Complies with the minimum requirements of the
24    Federal Trade Commission for informal dispute settlement
25    procedures as set forth in Part 703 of Title 16 of the Code
26    of Federal Regulations, as those regulations read on

 

 

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1    January 1, 1987.
2        (2) Renders decisions which are binding on the
3    manufacturer if the buyer elects to accept the decision.
4        (3) Prescribes a reasonable time, not to exceed 30 days
5    after the decision is accepted by the buyer, within which
6    the manufacturer or its agent must fulfill the terms of its
7    decisions.
8        (4) Provides arbitrators who are assigned to decide
9    disputes with copies of, and instruction in, the provisions
10    of the Federal Trade Commission's regulations in Part 703
11    of Title 16 of the Code of Federal Regulations as those
12    regulations read on January 1, 1987, Article 2 of the
13    Uniform Commercial Code, and this Act.
14        (5) Requires the manufacturer, when the process
15    orders, under the terms of this Act, either that the
16    nonconforming motor vehicle be replaced if the buyer
17    consents to this remedy or that restitution be made to the
18    buyer, to replace the motor vehicle or make restitution in
19    accordance with Section 5.
20        (6) Provides, at the request of the arbitrator or a
21    majority of the arbitration panel, for an inspection and
22    written report on the condition of a nonconforming motor
23    vehicle, at no cost to the buyer, by an automobile expert
24    who is independent of the manufacturer.
25        (7) Takes into account, in rendering decisions, all
26    legal and equitable factors, including, but not limited to,

 

 

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1    the written warranty, the rights and remedies conferred in
2    regulations of the Federal Trade Commission contained in
3    Part 703 of Title 16 of the Code of Federal Regulations as
4    those regulations read on January 1, 1987, Article 2 of the
5    Uniform Commercial Code, this Act, and any other equitable
6    considerations appropriate in the circumstances. Nothing
7    in this Act requires that, to be certified as a qualified
8    third-party dispute resolution process pursuant to this
9    Section, decisions of the process must consider or provide
10    remedies in the form of awards of punitive damages or
11    multiple damages, under subsection (c) of Section 30, or of
12    attorneys' fees under subsection (d) of Section 30 , or of
13    consequential damages other than as provided in
14    subsections (a) and (b) of Section 30, including, but not
15    limited to, reasonable repair, towing, and rental car costs
16    actually incurred by the buyer.
17        (8) Requires that no arbitrator deciding a dispute may
18    be a party to the dispute and that no other person,
19    including an employee, agent, or dealer for the
20    manufacturer, may be allowed to participate substantively
21    in the merits of any dispute with the arbitrator unless the
22    buyer is allowed to participate also. Nothing in this
23    subsection prohibits any member of an arbitration from
24    deciding a dispute.
25        (9) Obtains and maintains certification by the
26    Attorney General as provided in Section 35.

 

 

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1    (d) (1) Except as provided in paragraph (2), no person
2shall sell, either at wholesale or retail, lease, or transfer a
3motor vehicle transferred by a buyer or lessee to a
4manufacturer pursuant to Section 5 or a similar statute of any
5other state, unless the nature of the nonconformity experienced
6by the original buyer or lessee is clearly and conspicuously
7disclosed to the prospective buyer, lessee, or transferee, the
8nonconformity is corrected, and the manufacturer warrants to
9the new buyer, lessee, or transferee in writing for a period of
10one year that the motor vehicle is free of that nonconformity.
11    (2) Except for the requirement that the nature of the
12nonconformity be disclosed to the transferee, paragraph (1)
13does not apply to the transfer of a motor vehicle to an
14educational institution if the purpose of the transfer is to
15make the motor vehicle available for use in automotive repair
16courses.
 
17    Section 15. Automotive consumer notification.
18    (a) The General Assembly finds and declares all of the
19following:
20        (1) That the expansion of state warranty laws covering
21    new and used cars has given important and valuable
22    protection to consumers.
23        (2) That, in states without this valuable warranty
24    protection, used and new motor vehicles are being resold in
25    the marketplace without notice to the subsequent

 

 

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1    purchaser.
2        (3) That other states have addressed this problem by
3    requiring notices on the title of these vehicles or other
4    notice procedures to warn consumers that the motor vehicles
5    were repurchased by a dealer or manufacturer because the
6    vehicle could not be repaired in a reasonable length of
7    time or a reasonable number of repair attempts or the
8    dealer or manufacturer was not willing to repair the
9    vehicle.
10        (4) That these notices serve the interests of consumers
11    who have a right to information relevant to their buying
12    decisions.
13        (5) That the disappearance of these notices upon the
14    transfer of title from another state to this State
15    encourages the transport of "lemons" to this State for sale
16    to the drivers of this State.
17    (b) As used in this Section, "dealer" means any person
18engaged in the business of selling, offering for sale, or
19negotiating the retail sale of, a used motor vehicle or selling
20motor vehicles as a broker or agent for another, including the
21officers, agents, and employees of the person and any
22combination or association of dealers.
23    (c) Any manufacturer who reacquires or assists a dealer or
24lienholder to reacquire a motor vehicle registered in this
25State, any other state, or a federally administered district
26shall, prior to any sale, lease, or transfer of the vehicle in

 

 

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1this State, or prior to exporting the vehicle to another state
2for sale, lease, or transfer if the vehicle was registered in
3this State and reacquired pursuant to Section 5, cause the
4vehicle to be retitled in the name of the manufacturer, request
5the Secretary of State to inscribe the manufacturer's
6certificate of title with the notation "Lemon Law Buyback", and
7affix a decal to the vehicle in accordance with Section 25 if
8the manufacturer knew or should have known that the vehicle is
9required by law to be replaced, accepted for restitution due to
10the failure of the manufacturer to conform the vehicle to
11applicable warranties pursuant to Section 5, or accepted for
12restitution by the manufacturer due to the failure of the
13manufacturer to conform the vehicle to warranties required by
14any other applicable law of the State, any other state, or
15federal law.
16    (d) Any manufacturer who reacquires or assists a dealer or
17lienholder to reacquire a motor vehicle in response to a
18request by the buyer or lessee that the vehicle be either
19replaced or accepted for restitution because the vehicle did
20not conform to express warranties shall, prior to the sale,
21lease, or other transfer of the vehicle, execute and deliver to
22the subsequent transferee a notice and obtain the transferee's
23written acknowledgment of a notice, as prescribed by Section
2420.
25    (e) Any person, including any dealer, who acquires a motor
26vehicle for resale and knows or should have known that the

 

 

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1vehicle was reacquired by the vehicle's manufacturer in
2response to a request by the last retail owner or lessee of the
3vehicle that it be replaced or accepted for restitution because
4the vehicle did not conform to express warranties shall, prior
5to the sale, lease, or other transfer, execute and deliver to
6the subsequent transferee a notice and obtain the transferee's
7written acknowledgment of a notice, as prescribed by Section
820.
9    (f) Any person, including any manufacturer or dealer, who
10sells, leases, or transfers ownership of a motor vehicle when
11the vehicle's certificate of title is inscribed with the
12notation "Lemon Law Buyback" shall, prior to the sale, lease,
13or ownership transfer of the vehicle, provide the transferee
14with a disclosure statement signed by the transferee that
15states: "THIS VEHICLE WAS REPURCHASED BY ITS MANUFACTURER DUE
16TO A DEFECT IN THE VEHICLE PURSUANT TO CONSUMER WARRANTY LAWS.
17THE TITLE TO THIS VEHICLE HAS BEEN PERMANENTLY BRANDED WITH THE
18NOTATION "LEMON LAW BUYBACK"."
19    (g) The disclosure requirements in subsections (d), (e),
20and (f) are cumulative with all other consumer notice
21requirements and do not relieve any person, including any
22dealer or manufacturer, from complying with any other
23applicable law, including any requirement of subsection (d) of
24Section 10.
 
25    Section 20. Warranty buyback notice.

 

 

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1    (a) The notice required in subsections (d) and (e) of
2Section 15 shall be prepared by the manufacturer of the
3reacquired vehicle and shall disclose all of the following:
4        (1) Year, make, model, and vehicle identification
5    number of the vehicle.
6        (2) Whether the title to the vehicle has been inscribed
7    with the notation "Lemon Law Buyback".
8        (3) The nature of each nonconformity reported by the
9    original buyer or lessee of the vehicle.
10        (4) Repairs, if any, made to the vehicle in an attempt
11    to correct each nonconformity reported by the original
12    buyer or lessee.
13    (b) The notice shall be on a form 8 1/2 x 11 inches in size
14and printed in no smaller than 10-point black type on a white
15background. The form shall only contain the following
16information prior to it being filled out by the manufacturer:
 
17
WARRANTY BUYBACK NOTICE
18(Check One)
19/. . ./ This vehicle was repurchased by the vehicle's
20manufacturer after the last retail owner or lessee requested
21its repurchase due to the problem(s) listed below.
22/. . ./ THIS VEHICLE WAS REPURCHASED BY ITS MANUFACTURER DUE TO
23A DEFECT IN THE VEHICLE PURSUANT TO CONSUMER WARRANTY LAWS. THE
24TITLE TO THIS VEHICLE HAS BEEN PERMANENTLY BRANDED WITH THE
25NOTATION "LEMON LAW BUYBACK." Under Illinois law, the

 

 

 

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1manufacturer must warrant to you, for a one year period, that
2the vehicle is free of the problem(s) listed below.
 
3V.I.N: ........... Year: ..... Make: ...... Model: ......
 
4Problem(s) Reported by Repairs Made, if any, to
5Original Owner Correct Reported Problem(s)
6.......................... ..........................
7.......................... ..........................
8.......................... ..........................
9.......................... ..........................
10.......................... ..........................
11.......................... ..........................
12Signature of ManufacturerDate
13.......................... ..........................
14Signature of Dealer(s)Date
15.......................... ..........................
16.......................... ..........................
17.......................... ..........................
18Signature of Retail Buyer or
19LesseeDate
20.......................... ..........................
21.......................... ..........................
22    (c) The manufacturer shall provide an executed copy of the
23notice to the manufacturer's transferee. Each transferee,

 

 

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1including a dealer, to whom the motor vehicle is transferred
2prior to its sale to a retail buyer or lessee shall be provided
3an executed copy of the notice by the previous transferor.
 
4    Section 25. Lemon decal.
5    (a) The decal required by subsection (c) of Section 15 to
6be affixed by a manufacturer to a motor vehicle, shall be
7affixed to the left front door frame of the vehicle, or, if the
8vehicle does not have a left front door frame, it shall be
9affixed in a location designated by the Secretary of State. The
10decal shall specify that title to the motor vehicle has been
11inscribed with the notation "Lemon Law Buyback" and shall be
12affixed to the vehicle in a manner prescribed by the Secretary
13of State.
14    (b) No person shall knowingly remove or alter any decal
15affixed to a vehicle pursuant to subsection (a), whether or not
16licensed under the Illinois Vehicle Code.
 
17    Section 30. Remedies.
18    (a) Any buyer of consumer goods who is damaged by a failure
19to comply with any obligation under this Act or under an
20implied or express warranty or service contract may bring an
21action for the recovery of damages and other legal and
22equitable relief.
23    (b) The measure of the buyer's damages in an action under
24this Section shall include the rights of replacement or

 

 

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1reimbursement as set forth in Section 5, and the following:
2        (1) Where the buyer has rightfully rejected or
3    justifiably revoked acceptance of the goods or has
4    exercised any right to cancel the sale, Sections 2-711,
5    2-712, and 2-713 of the Uniform Commercial Code shall
6    apply.
7        (2) Where the buyer has accepted the goods, Sections
8    2-714 and 2-715 of the Uniform Commercial Code shall apply,
9    and the measure of damages shall include the cost of
10    repairs necessary to make the goods conform.
11    (c) If the buyer establishes that the failure to comply was
12willful, the judgment may include, in addition to the amounts
13recovered under subsection (a), a civil penalty which shall not
14exceed 2 times the amount of actual damages. This subsection
15shall not apply in any class action under Section 2-404 of the
16Code of Civil Procedure or with respect to a claim based solely
17on a breach of an implied warranty.
18    (d) If the buyer prevails in an action under this Section,
19the buyer shall be allowed by the court to recover as part of
20the judgment a sum equal to the aggregate amount of costs and
21expenses, including attorney's fees based on actual time
22expended, determined by the court to have been reasonably
23incurred by the buyer in connection with the commencement and
24prosecution of such action.
25    (e) (1) Except as otherwise provided in this subsection, if
26the buyer establishes a violation of Section 5, the buyer shall

 

 

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1recover damages and reasonable attorney's fees and costs, and
2may recover a civil penalty of up to 2 times the amount of
3damages.
4    (2) If the manufacturer maintains a qualified third-party
5dispute resolution process which substantially complies with
6Section 10, the manufacturer shall not be liable for any civil
7penalty pursuant to this subsection.
8    (3) After the occurrence of the events giving rise to the
9presumption established in subsection (a) of Section 10, the
10buyer may serve upon the manufacturer a written notice
11requesting that the manufacturer comply with Section 5. If the
12buyer fails to serve the notice, the manufacturer shall not be
13liable for a civil penalty pursuant to this subsection.
14    (4) If the buyer serves the notice described in paragraph
15(3) and the manufacturer complies with Section 5 within 30 days
16of the service of that notice, the manufacturer shall not be
17liable for a civil penalty pursuant to this subsection.
18    (5) If the buyer recovers a civil penalty under subsection
19(c), the buyer may not also recover a civil penalty under this
20subsection for the same violation.
 
21    Section 35. Third-party dispute resolution process
22certification program; fund.
23    (a) The Attorney General shall establish a program for
24certifying each third-party dispute resolution process used
25for the arbitration of disputes pursuant to subsection (b) of

 

 

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1Section 10. In establishing the program, the Attorney General
2shall do all of the following:
3        (1) Prescribe and provide forms to be used to apply for
4    certification under this Act.
5        (2) Establish a set of minimum standards which shall be
6    used to determine whether a third-party dispute resolution
7    process is in substantial compliance with subsection (c) of
8    Section 10.
9        (3) Prescribe the information which each manufacturer,
10    or other entity, that operates a third-party dispute
11    resolution process shall provide the Attorney General in
12    the application for certification. In prescribing the
13    information to accompany the application for
14    certification, the Attorney General shall require the
15    manufacturer, or other entity, to provide only that
16    information which the Attorney General finds is reasonably
17    necessary to enable the Attorney General to determine
18    whether the third-party dispute resolution process is in
19    substantial compliance with subsection (c) of Section 10.
20        (4) Prescribe the information that each qualified
21    third-party dispute resolution process shall provide the
22    Attorney General, and the time intervals at which the
23    information shall be required, to enable the Attorney
24    General to determine whether the qualified third-party
25    dispute resolution process continues to operate in
26    substantial compliance with subsection (c) of Section 10.

 

 

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1    (b)(1) Each manufacturer may establish, or otherwise make
2available to buyers or lessees of new motor vehicles, a
3qualified third-party dispute resolution process for the
4resolution of disputes pursuant to subsection (b) of Section
510. A manufacturer that itself operates the third-party dispute
6resolution process shall apply to the Attorney General for
7certification of that process. If the manufacturer makes the
8third-party dispute resolution process available to buyers or
9lessees of new motor vehicles through contract or other
10arrangement with another entity, that entity shall apply to the
11Attorney General for certification. An entity that operates a
12third-party dispute resolution process for more than one
13manufacturer shall make a separate application for
14certification for each manufacturer that uses that entity's
15third-party dispute resolution process. The application for
16certification shall be accompanied by the information
17prescribed by the Attorney General.
18    (2) The Attorney General shall review the application and
19accompanying information and, after conducting an onsite
20inspection, shall determine whether the third-party dispute
21resolution process is in substantial compliance with
22subsection (c) of Section 10 and this Section. If the Attorney
23General determines that the process is in substantial
24compliance, the Attorney General shall certify the process. If
25the Attorney General determines that the process is not in
26substantial compliance, the Attorney General shall deny

 

 

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1certification and shall state, in writing, the reasons for
2denial and the modifications in the operation of the process
3that are required in order for the process to be certified.
4    (3) The Attorney General shall make a final determination
5whether to certify a third-party dispute resolution process or
6to deny certification not later than 90 calendar days following
7the date the Attorney General accepts the application for
8certification as complete.
9    (c)(1) The Attorney General, in accordance with the time
10intervals prescribed pursuant to paragraph (4) of subsection
11(a), but at least once annually, shall review the operation and
12performance of each qualified third-party dispute resolution
13process and determine, using the information provided the
14Attorney General as prescribed pursuant to paragraph (4) of
15subsection (a) and the monitoring and inspection information
16described in paragraph (3) of subsection (d), whether the
17process is operating in substantial compliance with subsection
18(c) of Section 10 and this Section. If the Attorney General
19determines that the process is in substantial compliance, the
20certification shall remain in effect.
21    (2) If the Attorney General determines that the process is
22not in substantial compliance with subsection (c) of Section 10
23or this Section, the Attorney General shall issue a notice of
24decertification to the entity which operates the process and
25shall send a copy of that notice to any manufacturer affected
26by the decertification. The notice of decertification shall

 

 

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1state the reasons for the issuance of the notice and prescribe
2the modifications in the operation of the process that are
3required in order for the process to retain its certification.
4    (3) A notice of decertification shall take effect 180
5calendar days following the date the notice is served on the
6manufacturer, or other entity, which uses the process that the
7Attorney General has determined is not in substantial
8compliance with subsection (c) of Section 10 or this Section.
9The Attorney General shall withdraw the notice of
10decertification prior to its effective date if the Attorney
11General determines, after a public hearing, that the
12manufacturer, or other entity, which uses the process has made
13the modifications in the operation of the process required in
14the notice of decertification and is in substantial compliance
15with subsection (c) of Section 10 and this Section.
16    (d) In addition to any other requirements of this Section,
17the Attorney General shall do all of the following:
18        (1) Establish procedures to assist owners or lessees of
19    new motor vehicles who have complaints regarding the
20    operation of a qualified third-party dispute resolution
21    process.
22        (2) Establish methods for measuring customer
23    satisfaction and to identify violations of this Section,
24    which shall include an annual random postcard or telephone
25    survey by the Attorney General of the customers of each
26    qualified third-party dispute resolution process.

 

 

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1        (3) Monitor and inspect, on a regular basis, qualified
2    third-party dispute resolution processes to determine
3    whether they continue to meet the standards for
4    certification. Monitoring and inspection shall include,
5    but not be limited to, all of the following:
6            (A) Onsite inspections of each qualified
7        third-party dispute resolution process not less
8        frequently than twice annually.
9            (B) Investigation of complaints from consumers
10        regarding the operation of qualified third-party
11        dispute resolution processes and analyses of
12        representative samples of complaints against each
13        process.
14            (C) Analyses of the annual surveys required by
15        paragraph (2).
16        (5) Submit a biennial report to the General Assembly
17    evaluating the effectiveness of this Section, make
18    available to the public summaries of the statistics and
19    other information supplied by each qualified third-party
20    dispute resolution process, and publish educational
21    materials regarding the purposes of this Section.
22        (6) Adopt rules as necessary and appropriate to
23    implement this Section and subsection (c) of Section 10.
24        (7) Protection of the public shall be the highest
25    priority for the Attorney General in exercising its
26    certification, regulatory, and disciplinary functions.

 

 

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1    Whenever the protection of the public is inconsistent with
2    other interests sought to be promoted, the protection of
3    the public shall be paramount.
4    (e) The Secretary of State shall, in accordance with the
5procedures prescribed in this subsection, administer the
6collection of fees for the purposes of fully funding the
7administration of this subsection.
8        (1) Fees collected pursuant to this subsection shall be
9    deposited into the Motor Vehicle Dispute Resolution
10    Certification Fund, a special fund created in the State
11    treasury, and shall be available, upon appropriation by the
12    General Assembly, exclusively to pay the expenses incurred
13    by the Attorney General in administering this Section. If,
14    at the conclusion of any fiscal year, the amount of fees
15    collected exceeds the amount of expenditures for that
16    purpose during that fiscal year, the surplus in the Dispute
17    Resolution Certification Fund shall be carried forward
18    into the succeeding fiscal year.
19        (2) Beginning July 1, 2018, and on or before May 1 of
20    each calendar year thereafter, every manufacturer shall
21    file with the Secretary of State a statement of the number
22    of motor vehicles sold, leased, or otherwise distributed by
23    or for the manufacturer in this State during the preceding
24    calendar year, and shall, upon written notice delivered to
25    the manufacturer by certified mail, return receipt
26    requested, pay to the Secretary of State a fee, not to

 

 

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1    exceed $1 for each motor vehicle sold, leased, or
2    distributed by or for the manufacturer in this State during
3    the preceding calendar year. The total fee paid by each
4    manufacturer shall be rounded to the nearest dollar. Not
5    more than one dollar $1 shall be charged, collected, or
6    received from any one or more manufacturers pursuant to
7    this subsection with respect to the same motor vehicle.
8        (3) The fee required by paragraph (2) is due and
9    payable not later than 30 days after the manufacturer has
10    received notice of the amount due and is delinquent after
11    that time. A penalty of 10% of the amount delinquent shall
12    be added to that amount, if the delinquency continues for
13    more than 30 days. If a manufacturer fails to file the
14    statement required by paragraph (2) by the date specified,
15    the Secretary of State shall assess the amount due from the
16    manufacturer by using as the number of motor vehicles sold,
17    leased, or otherwise distributed by or for the manufacturer
18    in this State during the preceding calendar year the total
19    number of new registrations of all motor vehicles sold,
20    leased, or otherwise distributed by or for the manufacturer
21    during the preceding calendar year.
22        (4) On or before February 1 of each year, the Attorney
23    General shall notify the Secretary of State of the dollar
24    amount necessary to fully fund the program established by
25    this Section during the following fiscal year. The
26    Secretary of State shall use this information in

 

 

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1    calculating the amounts of the fees to be collected from
2    manufacturers pursuant to this subsection.
3        (5) The Secretary of State may adopt rules to implement
4    this subsection. The rules shall include, at a minimum, a
5    formula for calculating the fee, established pursuant to
6    paragraph (2), for each motor vehicle and the total amount
7    of fees to be collected from each manufacturer.
8    As used in this subsection, "motor vehicle" means a new
9passenger or commercial motor vehicle of a kind that is
10required to be registered under the Illinois Vehicle Code, but
11the term does not include a motorcycle, a motor home, or any
12vehicle whose gross weight exceeds 10,000 pounds.
 
13    Section 40. Sales and use tax reimbursement.
14    (a) Notwithstanding any applicable provisions imposing a
15tax amount on manufacturers under the Retailers' Occupation Tax
16Act, the Use Tax Act, the Service Occupation Tax Act, or the
17Service Use Tax Act, the Department of Revenue shall reimburse
18the manufacturer of a new motor vehicle for an amount equal to
19the sales tax or use tax which the manufacturer pays to or for
20the buyer or lessee when providing a replacement vehicle
21pursuant to paragraph (1) of Section 5 or includes in making
22restitution to the buyer or lessee pursuant to paragraph (2) of
23Section 5 when the manufacturer provides satisfactory proof
24that it has complied with subsection (c) of Section 15, and
25satisfactory proof is provided for one of the following:

 

 

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1        (1) The retailer of the motor vehicle for which the
2    manufacturer is making restitution has reported and paid
3    the sales tax on the gross receipts from the sale of that
4    motor vehicle.
5        (2) The buyer of the motor vehicle has paid the use tax
6    on the sales price for the storage, use, or other
7    consumption of that motor vehicle in this State.
8        (3) The lessee of the motor vehicle has paid the use
9    tax on the rentals payable from the lease of that motor
10    vehicle.
11    (b) The Department of Revenue may adopt rules and
12regulations to carry out, facilitate compliance with, or
13prevent circumvention or evasion of this Section.
14    (c) This Section shall not change the application of the
15sales and use tax to the gross receipts, the rentals payable,
16and the sales price from the sale, lease, and the storage, use,
17or other consumption, in this State, of tangible personal
18property pursuant to the Retailers' Occupation Tax Act, the Use
19Tax Act, the Service Occupation Tax Act, or the Service Use Tax
20Act.
21    (d) The manufacturer's claim for reimbursement and the
22Department of Revenue's approval or denial of the claim shall
23be subject to the applicable provisions under the Retailers'
24Occupation Tax Act, the Use Tax Act, the Service Occupation Tax
25Act, or the Service Use Tax Act concerning claims for a credit
26or refund of erroneously paid amounts, except provisions

 

 

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1relating to accrued interest at the rate and in the manner
2specified in the Uniform Penalty and Interest Act, insofar as
3those provisions are not inconsistent with this Section.
4    (e) For purposes of this Section, the amount of use tax
5that the Department of Revenue is required to reimburse the
6manufacturer shall be limited to the amount of use tax the
7manufacturer is required to pay to or for the lessee pursuant
8to Section 5.
 
9    Section 45. Prohibitions.
10    (a) Any automobile manufacturer, importer, distributor,
11dealer, or lienholder who reacquires, or who assists in
12reacquiring, a motor vehicle, whether by judgment, decree,
13arbitration award, settlement agreement, or voluntary
14agreement, is prohibited from doing either of the following:
15        (1) Requiring, as a condition of the reacquisition of
16    the motor vehicle, that a buyer or lessee who is a resident
17    of this State agree not to disclose the problems with the
18    vehicle experienced by the buyer or lessee or the
19    nonfinancial terms of the reacquisition.
20        (2) Including, in any release or other agreement,
21    whether prepared by the manufacturer, importer,
22    distributor, dealer, or lienholder, for signature by the
23    buyer or lessee, a confidentiality clause, gag clause, or
24    similar clause prohibiting the buyer or lessee from
25    disclosing information to anyone about the problems with

 

 

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1    the vehicle, or the nonfinancial terms of the reacquisition
2    of the vehicle by the manufacturer, importer, distributor,
3    dealer, or lienholder.
4    (b) Any confidentiality clause, gag clause, or similar
5clause in such a release or other agreement in violation of
6this Section shall be null and void as against the public
7policy of this State.
8    (c) Nothing in this Section is intended to prevent any
9confidentiality clause, gag clause, or similar clause
10regarding the financial terms of the reacquisition of the
11vehicle.
 
12    Section 900. The State Finance Act is amended by adding
13Section 5.878 as follows:
 
14    (30 ILCS 105/5.878 new)
15    Sec. 5.878. Motor Vehicle Dispute Resolution Certification
16Fund.
 
17    Section 905. The Retailers' Occupation Tax Act is amended
18by changing Section 6 as follows:
 
19    (35 ILCS 120/6)  (from Ch. 120, par. 445)
20    Sec. 6. Credit memorandum or refund. If it appears, after
21claim therefor filed with the Department, that an amount of tax
22or penalty or interest has been paid which was not due under

 

 

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1this Act, whether as the result of a mistake of fact or an
2error of law, except as hereinafter provided, then the
3Department shall issue a credit memorandum or refund to the
4person who made the erroneous payment or, if that person died
5or became a person under legal disability, to his or her legal
6representative, as such. For purposes of this Section, the tax
7is deemed to be erroneously paid by a retailer when the
8manufacturer of a motor vehicle sold by the retailer accepts
9the return of that automobile and refunds to the purchaser the
10selling price of that vehicle as provided in the New Vehicle
11Buyer Protection Act of 2017. When a motor vehicle is returned
12for a refund of the purchase price under the New Vehicle Buyer
13Protection Act of 2017, the Department shall issue a credit
14memorandum or a refund for the amount of tax paid by the
15retailer under this Act attributable to the initial sale of
16that vehicle. Claims submitted by the retailer are subject to
17the same restrictions and procedures provided for in this Act.
18If it is determined that the Department should issue a credit
19memorandum or refund, the Department may first apply the amount
20thereof against any tax or penalty or interest due or to become
21due under this Act or under the Use Tax Act, the Service
22Occupation Tax Act, the Service Use Tax Act, any local
23occupation or use tax administered by the Department, Section 4
24of the Water Commission Act of 1985, subsections (b), (c) and
25(d) of Section 5.01 of the Local Mass Transit District Act, or
26subsections (e), (f) and (g) of Section 4.03 of the Regional

 

 

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1Transportation Authority Act, from the person who made the
2erroneous payment. If no tax or penalty or interest is due and
3no proceeding is pending to determine whether such person is
4indebted to the Department for tax or penalty or interest, the
5credit memorandum or refund shall be issued to the claimant; or
6(in the case of a credit memorandum) the credit memorandum may
7be assigned and set over by the lawful holder thereof, subject
8to reasonable rules of the Department, to any other person who
9is subject to this Act, the Use Tax Act, the Service Occupation
10Tax Act, the Service Use Tax Act, any local occupation or use
11tax administered by the Department, Section 4 of the Water
12Commission Act of 1985, subsections (b), (c) and (d) of Section
135.01 of the Local Mass Transit District Act, or subsections
14(e), (f) and (g) of Section 4.03 of the Regional Transportation
15Authority Act, and the amount thereof applied by the Department
16against any tax or penalty or interest due or to become due
17under this Act or under the Use Tax Act, the Service Occupation
18Tax Act, the Service Use Tax Act, any local occupation or use
19tax administered by the Department, Section 4 of the Water
20Commission Act of 1985, subsections (b), (c) and (d) of Section
215.01 of the Local Mass Transit District Act, or subsections
22(e), (f) and (g) of Section 4.03 of the Regional Transportation
23Authority Act, from such assignee. However, as to any claim for
24credit or refund filed with the Department on and after each
25January 1 and July 1 no amount of tax or penalty or interest
26erroneously paid (either in total or partial liquidation of a

 

 

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1tax or penalty or amount of interest under this Act) more than
23 years prior to such January 1 and July 1, respectively, shall
3be credited or refunded, except that if both the Department and
4the taxpayer have agreed to an extension of time to issue a
5notice of tax liability as provided in Section 4 of this Act,
6such claim may be filed at any time prior to the expiration of
7the period agreed upon.
8    No claim may be allowed for any amount paid to the
9Department, whether paid voluntarily or involuntarily, if paid
10in total or partial liquidation of an assessment which had
11become final before the claim for credit or refund to recover
12the amount so paid is filed with the Department, or if paid in
13total or partial liquidation of a judgment or order of court.
14No credit may be allowed or refund made for any amount paid by
15or collected from any claimant unless it appears (a) that the
16claimant bore the burden of such amount and has not been
17relieved thereof nor reimbursed therefor and has not shifted
18such burden directly or indirectly through inclusion of such
19amount in the price of the tangible personal property sold by
20him or her or in any manner whatsoever; and that no
21understanding or agreement, written or oral, exists whereby he
22or she or his or her legal representative may be relieved of
23the burden of such amount, be reimbursed therefor or may shift
24the burden thereof; or (b) that he or she or his or her legal
25representative has repaid unconditionally such amount to his or
26her vendee (1) who bore the burden thereof and has not shifted

 

 

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1such burden directly or indirectly, in any manner whatsoever;
2(2) who, if he or she has shifted such burden, has repaid
3unconditionally such amount to his own vendee; and (3) who is
4not entitled to receive any reimbursement therefor from any
5other source than from his or her vendor, nor to be relieved of
6such burden in any manner whatsoever. No credit may be allowed
7or refund made for any amount paid by or collected from any
8claimant unless it appears that the claimant has
9unconditionally repaid, to the purchaser, any amount collected
10from the purchaser and retained by the claimant with respect to
11the same transaction under the Use Tax Act.
12    Any credit or refund that is allowed under this Section
13shall bear interest at the rate and in the manner specified in
14the Uniform Penalty and Interest Act.
15    In case the Department determines that the claimant is
16entitled to a refund, such refund shall be made only from such
17appropriation as may be available for that purpose. If it
18appears unlikely that the amount appropriated would permit
19everyone having a claim allowed during the period covered by
20such appropriation to elect to receive a cash refund, the
21Department, by rule or regulation, shall provide for the
22payment of refunds in hardship cases and shall define what
23types of cases qualify as hardship cases.
24    If a retailer who has failed to pay retailers' occupation
25tax on gross receipts from retail sales is required by the
26Department to pay such tax, such retailer, without filing any

 

 

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1formal claim with the Department, shall be allowed to take
2credit against such retailers' occupation tax liability to the
3extent, if any, to which such retailer has paid an amount
4equivalent to retailers' occupation tax or has paid use tax in
5error to his or her vendor or vendors of the same tangible
6personal property which such retailer bought for resale and did
7not first use before selling it, and no penalty or interest
8shall be charged to such retailer on the amount of such credit.
9However, when such credit is allowed to the retailer by the
10Department, the vendor is precluded from refunding any of that
11tax to the retailer and filing a claim for credit or refund
12with respect thereto with the Department. The provisions of
13this amendatory Act shall be applied retroactively, regardless
14of the date of the transaction.
15(Source: P.A. 91-901, eff. 1-1-01.)
 
16    Section 910. The Illinois Vehicle Code is amended by
17changing Section 5-104.2 as follows:
 
18    (625 ILCS 5/5-104.2)
19    Sec. 5-104.2. Nonconforming vehicles; sale.
20    (a) Every manufacturer shall be prohibited from reselling
21any motor vehicle that has been finally ordered, determined, or
22adjudicated as having a nonconformity under the New Vehicle
23Buyer Protection Act, the New Vehicle Buyer Protection Act of
242017, or a similar law of any state, territory, or country, and

 

 

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1that the manufacturer repurchased or replaced because of the
2nonconformity, unless the manufacturer has corrected the
3nonconformity and issues a disclosure statement prior to resale
4stating that the vehicle was repurchased or replaced under the
5New Vehicle Buyer Protection Act, the New Vehicle Buyer
6Protection Act of 2017, or similar law of any other state,
7territory, or country; identifying the nonconformity; and
8warranting that the nonconformity has been corrected. The
9disclosure statement must accompany the vehicle through the
10first retail purchase.
11    (b) "Nonconformity" refers to a new vehicle's failure to
12conform to all express warranties applicable to the vehicle,
13which failure substantially impairs the use, market value, or
14safety of the vehicle.
15    (c) The disclosure statement referred to in subsection (a)
16shall be in substantially the same form as below:
17
"IMPORTANT
18    Vehicle Identification Number (VIN): (Insert VIN Number);
19    Year: (Insert Year); Make (Insert Make); Model: (Insert
20    Model). This vehicle was previously sold as new. It was
21    subsequently ordered as having a nonconformity by final
22    decision of court proceeding or State run arbitration. It
23    was subsequently repurchased by its manufacturer because
24    it did not conform to the manufacturer's express warranty
25    and the nonconformity was not cured within a reasonable
26    time as provided by Illinois law. The following

 

 

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1    nonconformities have been corrected (a minimum of 5
2    numbered lines shall be provided to describe the
3    nonconformity or nonconformities)."
4The customer shall sign the disclosure statement. This
5disclosure language shall be in at least 8-point type.
6(Source: P.A. 88-415.)
 
7    (815 ILCS 380/Act rep.)
8    Section 915. The New Vehicle Buyer Protection Act is
9repealed.

 

 

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1 INDEX
2 Statutes amended in order of appearance
3    New Act
4    30 ILCS 105/5.878 new
5    35 ILCS 120/6from Ch. 120, par. 445
6    625 ILCS 5/5-104.2
7    815 ILCS 380/Act rep.