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92_SB0547eng SB547 Engrossed LRB9202484DHmb 1 AN ACT concerning vehicles. 2 Be it enacted by the People of the State of Illinois, 3 represented in the General Assembly: 4 Section 5. The Illinois Vehicle Code is amended by 5 changing Sections 2-124, 3-402.2, and 3-824 as follows: 6 (625 ILCS 5/2-124) (from Ch. 95 1/2, par. 2-124) 7 Sec. 2-124. Audits, interest and penalties. 8 (a) Audits. The Secretary of State or employees and 9 agents designated by him, may audit the books, records, tax 10 returns, reports, and any and all other pertinent records or 11 documents of any person licensed or registered, or required 12 to be licensed or registered, under any provisions of this 13 Act, for the purpose of determining whether such person has 14 not paid any fees or taxes required to be paid to the 15 Secretary of State and due to the State of Illinois. For 16 purposes of this Section, "person" means an individual, 17 corporation, or partnership, or an officer or an employee of 18 any corporation, including a dissolved corporation, or a 19 member or an employee of any partnership, who as an officer, 20 employee, or member under a duty to perform the act in 21 respect to which the violation occurs. 22 (b) Joint Audits. The Secretary of State may enter into 23 reciprocal audit agreements with officers, agents or agencies 24 of another State or States, for joint audits of any person 25 subject to audit under this Act. 26 (c) Special Audits. If the Secretary of State is not 27 satisfied with the books, records and documents made 28 available for an audit, or if the Secretary of State is 29 unable to determine therefrom whether any fees or taxes are 30 due to the State of Illinois, or if there is cause to believe 31 that the person audited has declined or refused to supply the SB547 Engrossed -2- LRB9202484DHmb 1 books, records and documents necessary to determine whether a 2 deficiency exists, the Secretary of State may either seek a 3 court order for production of any and all books, records and 4 documents he deems relevant and material, or, in his 5 discretion, the Secretary of State may instead give written 6 notice to such person requiring him to produce any and all 7 books, records and documents necessary to properly audit and 8 determine whether any fees or taxes are due to the State of 9 Illinois. If such person fails, refuses or declines to comply 10 with either the court order or written notice within the time 11 specified, the Secretary of State shall then order a special 12 audit at the expense of the person affected. Upon completion 13 of the special audit, the Secretary of State shall determine 14 if any fees or taxes required to be paid under this Act have 15 not been paid, and make an assessment of any deficiency based 16 upon the books, records and documents available to him, and 17 in an assessment, he may rely upon records of other persons 18 having an operation similar to that of the person audited 19 specially. A person audited specially and subject to a court 20 order and in default thereof, shall in addition, be subject 21 to any penalty or punishment imposed by the court entering 22 the order. 23 (d) Deficiency; Audit Costs. When a deficiency is found 24 and any fees or taxes required to be paid under this Act have 25 not been paid to the State of Illinois, the Secretary of 26 State may impose an audit fee of $50 per day, or $25 per 27 half-day, per auditor, plus in the case of out-of-state 28 travel, transportation expenses incurred by the auditor or 29 auditors. Where more than one person is audited on the same 30 out-of-state trip, the additional transportation expenses may 31 be apportioned. The actual costs of a special audit shall be 32 imposed upon the person audited. 33 (e) Interest. When a deficiency is found and any fees or 34 taxes required to be paid under this Act have not been paid SB547 Engrossed -3- LRB9202484DHmb 1 to the State of Illinois, the amount of the deficiency, if 2 greater than $100 for all registration years examined, shall 3 also bear interest at the rate of 1/2 of 1% per month or 4 fraction thereof, from the date when the fee or tax due 5 should have been paid under the provisions of this Act, 6 subject to a maximum of 6% per annum. 7 (f) Willful Negligence. When a deficiency is determined 8 by the Secretary to be caused by the willful neglect or 9 negligence of the person audited, an additional 10% penalty, 10 that is 10% of the amount of the deficiency or assessment, 11 shall be imposed, and the 10% penalty shall bear interest at 12 the rate of 1/2 of 1% on and after the 30th day after the 13 penalty is imposed until paid in full. 14 (g) Fraud or Evasion. When a deficiency is determined by 15 the Secretary to be caused by fraud or willful evasion of the 16 provisions of this Act, an additional penalty, that is 20% of 17 the amount of the deficiency or assessment, shall be imposed, 18 and the 20% penalty shall bear interest at the rate of 1/2 of 19 1% on and after the 30th day after the penalty is imposed 20 until paid in full. 21 (h) Notice. The Secretary of State shall give written 22 notice to any person audited, of the amount of any deficiency 23 found or assessment made, of the costs of an audit or special 24 audit, and of the penalty imposed, and payment shall be made 25 within 30 days of the date of the notice unless such person 26 petitions for a hearing. 27 However, except in the case of fraud or willful evasion, 28 or the inaccessibility of books and records for audit or with 29 the express consent of the person audited, no notice of a 30 deficiency or assessment shall be issued by the Secretary for 31 more than 3 registration years. This limitation shall 32 commence on any January 1 as to calendar year registrations 33 and on any July 1 as to fiscal year registrations. This 34 limitation shall not apply for any period during which the SB547 Engrossed -4- LRB9202484DHmb 1 person affected has declined or refuses to make his books and 2 records available for audit, nor during any period of time in 3 which an Order of any Court has the effect of enjoining or 4 restraining the Secretary from making an audit or issuing a 5 notice. Notwithstanding, each person licensed under the 6 International Registration Plan and audited by this State or 7 any member jurisdiction shall follow the assessment and 8 refund procedures as adopted and amended by the International 9 Registration Plan members. The Secretary of State shall have 10 the final decision as to which registrants may be subject to 11 the netting of audit fees as outlined in the International 12 Registration Plan. Persons audited may be subject to a 13 review process to determine the final outcome of the audit 14 finding. This process shall follow the adopted procedure as 15 outlined in the International Registration Plan. All 16 decisions by the IRP designated tribunal shall be binding. 17 (i) Every person subject to licensing or registration 18 and audit under the provisions of this Chapter shall retain 19 all pertinent licensing and registration documents, books, 20 records, tax returns, reports and all supporting records and 21 documents for a period of 4 years. 22 (j) Hearings. Any person receiving written notice of a 23 deficiency or assessment may, within 30 days after the date 24 of the notice, petition for a hearing before the Secretary of 25 State or his duly appointed hearing officer to contest the 26 audit in whole or in part, and the petitioner shall 27 simultaneously file a certified check or money order, or 28 certificate of deposit, or a surety bond approved by the 29 Secretary in the amount of the deficiency or assessment. 30 Hearings shall be held pursuant to the provisions of Section 31 2-118 of this Act. 32 (k) Judgments. The Secretary of State may enforce any 33 notice of deficiency or assessment pursuant to the provisions 34 of Section 3-831 of this Act. SB547 Engrossed -5- LRB9202484DHmb 1 (Source: P.A. 89-570, eff. 7-26-96.) 2 (625 ILCS 5/3-402.2) (from Ch. 95 1/2, par. 3-402.2) 3 Sec. 3-402.2. Audits. In addition to audit authority 4 set forth in Section 2-124 of this Act, the Secretary of 5 State, when this state is the base jurisdiction, may audit 6 such owners displaying a base plate of this state as to 7 authenticity of mileage figures and registrations and at such 8 time and frequency as determined by the Secretary of State. 9 Audits may be made by officials of other jurisdictions which 10 are members of an International Registration Plan (IRP) of 11 which this state is also a member. 12 Upon completion of any such audit, the Secretary of State 13 shall notify all jurisdictions in which such owner was 14 proportionally registered on the accuracy of the records of 15 such owner. Should such owner have underpaid or overpaid 16under paidany jurisdiction in which his vehicles were 17 proportionally registered, such information shall be 18 furnished to the jurisdiction for processing in accordance 19 with the procedures as set forth under the International 20 Registration Plancollection. 21 (Source: P.A. 87-206.) 22 (625 ILCS 5/3-824) (from Ch. 95 1/2, par. 3-824) 23 Sec. 3-824. When fees returnable. 24 (a) Whenever any application to the Secretary of State 25 is accompanied by any fee as required by law and such 26 application is refused or rejected, said fee shall be 27 returned to said applicant. 28 (b) Whenever the Secretary of State collects any fee not 29 required to be paid under the provisions of this Act, the 30 same shall be refunded to the person paying the same upon 31 application therefor made within 6 months after the date of 32 such payment, except as follows: (1) whenever a refund is SB547 Engrossed -6- LRB9202484DHmb 1 determined to be due and owing as a result of an audit, by 2 this State or any other state or province, in accordance with 3 Section 2-124 of this Code, of a prorate or apportion license 4 fee payment pursuant to any reciprocal compact or agreement 5 between this State and any other state or province, and the 6 Secretary for any reason fails to promptly make such refund, 7 the licensee shall have one year from the date of the 8 notification of the audit result to file, with the Secretary, 9 an application for refund found to be due and owing as a 10 result of such audit; and (2) whenever a person eligible for 11 a reduced registration fee pursuant to Section 3-806.3 of 12 this Code has paid in excess of the reduced registration fee 13 owed, the refund applicant shall have 2 years from the date 14 of overpayment to apply with the Secretary for a refund of 15 that part of payment made in excess of the established 16 reduced registration fee. 17 (c) Whenever a person dies after making application for 18 registration, application for a refund of the registration 19 fees and taxes may be made if the vehicle is then sold or 20 disposed of so that the registration plates, registration 21 sticker and card are never used. The Secretary of State 22 shall refund the registration fees and taxes upon receipt 23 within 6 months after the application for registration of an 24 application for refund accompanied with the unused 25 registration plates or registration sticker and card and 26 proof of both the death of the applicant and the sale or 27 disposition of the vehicle. 28 (d) Any application for refund received after the times 29 specified in this Section shall be denied and the applicant 30 in order to receive a refund must apply to the Court of 31 Claims. 32 (e) The Secretary of State is authorized to maintain a 33 two signature revolving checking account with a suitable 34 commercial bank for the purpose of depositing and SB547 Engrossed -7- LRB9202484DHmb 1 withdrawal-for-return those monies received and determined 2 upon receipt to be in excess of the amount or amounts 3 required by law. 4 (f) Refunds on audits performed by Illinois or another 5 member of the International Registration Plan shall be made 6 in accordance with the procedures as set forth in the 7 agreement. 8 (Source: P.A. 86-131.) 9 Section 99. Effective date. This Act takes effect upon 10 becoming law.