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Full Text of HB0880  97th General Assembly

HB0880enr 97TH GENERAL ASSEMBLY



 


 
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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 5-501 and by adding Section 5-102.7
6as follows:
 
7    (625 ILCS 5/5-101)  (from Ch. 95 1/2, par. 5-101)
8    Sec. 5-101. New vehicle dealers must be licensed.
9    (a) No person shall engage in this State in the business of
10selling or dealing in, on consignment or otherwise, new
11vehicles of any make, or act as an intermediary or agent or
12broker for any licensed dealer or vehicle purchaser other than
13as a salesperson, or represent or advertise that he is so
14engaged or intends to so engage in such business unless
15licensed to do so in writing by the Secretary of State under
16the provisions of this Section.
17    (b) An application for a new vehicle dealer's license shall
18be filed with the Secretary of State, duly verified by oath, on
19such form as the Secretary of State may by rule or regulation
20prescribe and shall contain:
21        1. The name and type of business organization of the
22    applicant and his established and additional places of
23    business, if any, in this State.

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1        additional place of business, if any, to which the
2        application pertains; but if the application is made
3        after June 15 of any year, the fee shall be $250 for
4        the applicant's established place of business plus $25
5        for each additional place of business, if any, to which
6        the application pertains. License fees shall be
7        returnable only in the event that the application is
8        denied by the Secretary of State. Moneys received under
9        this subparagraph (ii) shall be deposited into the
10        Dealer Recovery Trust Fund.
11        8. A statement that the applicant's officers,
12    directors, shareholders having a 10% or greater ownership
13    interest therein, proprietor, a partner, member, officer,
14    director, trustee, manager or other principals in the
15    business have not committed in the past 3 years any one
16    violation as determined in any civil, criminal or
17    administrative proceedings of any one of the following
18    Acts:
19            (A) The Anti Theft Laws of the Illinois Vehicle
20        Code;
21            (B) The Certificate of Title Laws of the Illinois
22        Vehicle Code;
23            (C) The Offenses against Registration and
24        Certificates of Title Laws of the Illinois Vehicle
25        Code;
26            (D) The Dealers, Transporters, Wreckers and

 

 

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1        Rebuilders Laws of the Illinois Vehicle Code;
2            (E) Section 21-2 of the Criminal Code of 1961,
3        Criminal Trespass to Vehicles; or
4            (F) The Retailers' Occupation Tax Act.
5        9. A statement that the applicant's officers,
6    directors, shareholders having a 10% or greater ownership
7    interest therein, proprietor, partner, member, officer,
8    director, trustee, manager or other principals in the
9    business have not committed in any calendar year 3 or more
10    violations, as determined in any civil, criminal or
11    administrative proceedings, of any one or more of the
12    following Acts:
13            (A) The Consumer Finance Act;
14            (B) The Consumer Installment Loan Act;
15            (C) The Retail Installment Sales Act;
16            (D) The Motor Vehicle Retail Installment Sales
17        Act;
18            (E) The Interest Act;
19            (F) The Illinois Wage Assignment Act;
20            (G) Part 8 of Article XII of the Code of Civil
21        Procedure; or
22            (H) The Consumer Fraud Act.
23        10. A bond or certificate of deposit in the amount of
24    $20,000 for each location at which the applicant intends to
25    act as a new vehicle dealer. The bond shall be for the term
26    of the license, or its renewal, for which application is

 

 

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1    made, and shall expire not sooner than December 31 of the
2    year for which the license was issued or renewed. The bond
3    shall run to the People of the State of Illinois, with
4    surety by a bonding or insurance company authorized to do
5    business in this State. It shall be conditioned upon the
6    proper transmittal of all title and registration fees and
7    taxes (excluding taxes under the Retailers' Occupation Tax
8    Act) accepted by the applicant as a new vehicle dealer.
9        11. Such other information concerning the business of
10    the applicant as the Secretary of State may by rule or
11    regulation prescribe.
12        12. A statement that the applicant understands Chapter
13    One through Chapter Five of this Code.
14    (c) Any change which renders no longer accurate any
15information contained in any application for a new vehicle
16dealer's license shall be amended within 30 days after the
17occurrence of such change on such form as the Secretary of
18State may prescribe by rule or regulation, accompanied by an
19amendatory fee of $2.
20    (d) Anything in this Chapter 5 to the contrary
21notwithstanding no person shall be licensed as a new vehicle
22dealer unless:
23        1. He is authorized by contract in writing between
24    himself and the manufacturer or franchised distributor of
25    such make of vehicle to so sell the same in this State, and
26        2. Such person shall maintain an established place of

 

 

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

 

 

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

 

 

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1        2. A statement verified under oath that all identifying
2    numbers on the vehicle agree with those on the certificate
3    of title or manufacturer's statement of origin;
4        3. A bill of sale properly executed on behalf of such
5    person;
6        4. A copy of the Uniform Invoice-transaction reporting
7    return referred to in Section 5-402 hereof;
8        5. In the case of a rebuilt vehicle, a copy of the
9    Disclosure of Rebuilt Vehicle Status; and
10        6. In the case of a vehicle for which the warranty has
11    been reinstated, a copy of the warranty.
12    (j) Except at the time of sale or repossession of the
13vehicle, no person licensed as a new vehicle dealer may issue
14any other person a newly created key to a vehicle unless the
15new vehicle dealer makes a copy of the driver's license or
16State identification card of the person requesting or obtaining
17the newly created key. The new vehicle dealer must retain the
18copy for 30 days.
19    A new vehicle dealer who violates this subsection (j) is
20guilty of a petty offense. Violation of this subsection (j) is
21not cause to suspend, revoke, cancel, or deny renewal of the
22new vehicle dealer's license.
23    This amendatory Act of 1983 shall be applicable to the 1984
24registration year and thereafter.
25(Source: P.A. 92-391, eff. 8-16-01; 92-835, eff. 6-1-03; 93-32,
26eff. 7-1-03.)
 

 

 

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1    (625 ILCS 5/5-102)  (from Ch. 95 1/2, par. 5-102)
2    Sec. 5-102. Used vehicle dealers must be licensed.
3    (a) No person, other than a licensed new vehicle dealer,
4shall engage in the business of selling or dealing in, on
5consignment or otherwise, 5 or more used vehicles of any make
6during the year (except house trailers as authorized by
7paragraph (j) of this Section and rebuilt salvage vehicles sold
8by their rebuilders to persons licensed under this Chapter), or
9act as an intermediary, agent or broker for any licensed dealer
10or vehicle purchaser (other than as a salesperson) or represent
11or advertise that he is so engaged or intends to so engage in
12such business unless licensed to do so by the Secretary of
13State under the provisions of this Section.
14    (b) An application for a used vehicle dealer's license
15shall be filed with the Secretary of State, duly verified by
16oath, in such form as the Secretary of State may by rule or
17regulation prescribe and shall contain:
18        1. The name and type of business organization
19    established and additional places of business, if any, in
20    this State.
21        2. If the applicant is a corporation, a list of its
22    officers, directors, and shareholders having a ten percent
23    or greater ownership interest in the corporation, setting
24    forth the residence address of each; if the applicant is a
25    sole proprietorship, a partnership, an unincorporated

 

 

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

 

 

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1    of the insurance policy shall not terminate the liability
2    under the policy arising during the period for which the
3    policy was filed. Trailer and mobile home dealers are
4    exempt from this requirement.
5        If the permitted user has a liability insurance policy
6    that provides automobile liability insurance coverage of
7    at least $100,000 for bodily injury to or the death of any
8    person, $300,000 for bodily injury to or the death of any 2
9    or more persons in any one accident, and $50,000 for damage
10    to property, then the permitted user's insurer shall be the
11    primary insurer and the dealer's insurer shall be the
12    secondary insurer. If the permitted user does not have a
13    liability insurance policy that provides automobile
14    liability insurance coverage of at least $100,000 for
15    bodily injury to or the death of any person, $300,000 for
16    bodily injury to or the death of any 2 or more persons in
17    any one accident, and $50,000 for damage to property, or
18    does not have any insurance at all, then the dealer's
19    insurer shall be the primary insurer and the permitted
20    user's insurer shall be the secondary insurer.
21        When a permitted user is "test driving" a used vehicle
22    dealer's automobile, the used vehicle dealer's insurance
23    shall be primary and the permitted user's insurance shall
24    be secondary.
25        As used in this paragraph 4, a "permitted user" is a
26    person who, with the permission of the used vehicle dealer

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1        2. The vehicle's manufacturer's identification number
2    or, if applicable, the Secretary of State or Illinois
3    Department of State Police identification number;
4        3. The date of acquisition of the vehicle;
5        4. The name and address of the person from whom the
6    vehicle was acquired;
7        5. The name and address of the person to whom any
8    vehicle was disposed, the person's Illinois license number
9    or if the person is an out-of-state salvage vehicle buyer,
10    the license number from the state or jurisdiction where the
11    buyer is licensed; and
12        6. The purchase price of the vehicle.
13    The register shall be submitted to the Secretary of State
14via written or electronic means within 10 calendar days from
15the date of the auction.
16(Source: P.A. 95-783, eff. 1-1-09; 96-678, eff. 8-25-09.)
 
17    (625 ILCS 5/5-102.7 new)
18    Sec. 5-102.7. Dealer Recovery Trust Fund.
19    (a) The General Assembly finds that motor vehicle dealers
20that go out of business without fulfilling agreements to pay
21off the balance of their customers' liens on traded-in vehicles
22cause financial harm to those customers by leaving those
23customers liable for multiple vehicle loans and cause harm to
24the integrity of the motor vehicle retailing industry. It is
25the intent of the General Assembly to protect vehicle

 

 

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1purchasers by creating a Dealer Recovery Trust Fund to
2reimburse these consumers.
3    (b) The Dealer Recovery Trust Fund shall be used solely for
4the limited purpose of helping victims of dealership closings.
5Any interest accrued by moneys in the Fund shall be deposited
6and become part of the Dealer Recovery Trust Fund and its
7purpose. The sole beneficiaries of the Dealer Recovery Trust
8Fund are victims of dealership closings.
9    (c) Except where the context otherwise requires, the
10following words and phrases, when used in this Section, have
11the meanings ascribed to them in this subsection (c):
12    "Applicant" means a person who applies for reimbursement
13from the Dealer Recovery Trust Fund Board.
14    "Board" means the Dealer Recovery Trust Fund Board created
15under this Section.
16    "Dealer" means a new vehicle dealer licensed under Section
175-101 or a used vehicle dealer licensed under Section 5-102,
18excepting a dealer who primarily sells mobile homes,
19recreational vehicles, or trailers or any dealer who sells 25
20vehicles or fewer per calendar year.
21    "Fund" means the Dealer Recovery Trust Fund created under
22this Section.
23    "Fund Administrator" means the private entity, which shall
24be appointed by the Board, that administers the Dealer Recovery
25Trust Fund.
26    (d) Beginning October 1, 2011, each application or renewal

 

 

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1for a new vehicle dealer's license and each application or
2renewal for a used vehicle dealer's license shall be
3accompanied by the applicable Annual Dealer Recovery Fund Fee
4under Section 5-101 or 5-102 of this Code. The fee shall be in
5addition to any other fees imposed under this Article, shall be
6submitted at the same time an application or renewal for a new
7vehicle dealer's license or used vehicle dealer's license is
8submitted, and shall be made payable to and remitted directly
9to the Dealer Recovery Trust Fund, a trust fund outside of the
10State Treasury which is hereby created. In addition, the Dealer
11Recovery Trust Fund may accept any federal, State, or private
12moneys for deposit into the Fund.
13    (e) The Fund Administrator shall maintain a list of all
14dealers who have paid the fee under subsection (d) of this
15Section for the current year, which shall be available to the
16Secretary of State and the Board. The Secretary of State shall
17revoke the dealer license of any dealer who does not pay the
18fee imposed under subsection (d) of this Section. The Secretary
19of State and the Fund Administrator may enter into information
20sharing agreements as needed to implement this Section.
21    (f) The Fund shall be audited annually by an independent
22auditor who is a certified public accountant and who has been
23selected by the Board. The independent auditor shall compile an
24annual report, which shall be filed with the Board and shall be
25a public record. The auditor shall be paid by the Fund,
26pursuant to an order of the Board.

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1$50 to bring the balance to at least $500,000. Not more than
2one additional assessment may be made against a dealer in any
312-month period.
4    (p) If the total amount of claims awarded against any
5dealer exceeds 33% of the balance in the Fund, the Board may
6permanently reduce the amount of those claims, pro rata, so
7that those claims do not exceed 33% of the balance in the Fund.
8    (q) The Board shall issue a written order directing the
9Fund Administrator to pay an applicant's claim to a secured
10party where the Board has received a signed agreement between
11the applicant and the secured party holding the lien. The
12agreement must (i) state that the applicant and the secured
13party agree to accept payment from the Fund to the secured
14party as settlement in full of all claims against the dealer;
15and (ii) release the lien and the title, if applicable, to the
16vehicle that was the subject of the claim. The written order
17shall state the amount of the claim and the name and address of
18the secured party to whom the claim shall be paid. The Fund
19Administrator shall pay the claim within 30 days after it
20receives the Board's order.
21    (r) No dealer or principal associated with a dealer's
22license is eligible for licensure, renewal or relicensure until
23the full amount of reimbursement for an unpaid claim, plus
24interest as determined by the Board, is paid to the Fund.
25Nothing in this Section shall limit the authority of the
26Secretary of State to suspend, revoke, or levy civil penalties

 

 

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1against a dealer, nor shall full repayment of the amount owed
2to the Fund nullify or modify the effect of any action by the
3Secretary.
4    (s) Nothing in this Section shall limit the right of any
5person to seek relief though civil action against any other
6person as an alternative to seeking reimbursement from the
7Fund.
 
8    (625 ILCS 5/5-501)  (from Ch. 95 1/2, par. 5-501)
9    Sec. 5-501. Denial, suspension or revocation or
10cancellation of a license.
11    (a) The license of a person issued under this Chapter may
12be denied, revoked or suspended if the Secretary of State finds
13that the applicant, or the officer, director, shareholder
14having a ten percent or greater ownership interest in the
15corporation, owner, partner, trustee, manager, employee or the
16licensee has:
17        1. Violated this Act;
18        2. Made any material misrepresentation to the
19    Secretary of State in connection with an application for a
20    license, junking certificate, salvage certificate, title
21    or registration;
22        3. Committed a fraudulent act in connection with
23    selling, bartering, exchanging, offering for sale or
24    otherwise dealing in vehicles, chassis, essential parts,
25    or vehicle shells;

 

 

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1        4. As a new vehicle dealer has no contract with a
2    manufacturer or enfranchised distributor to sell that new
3    vehicle in this State;
4        5. Not maintained an established place of business as
5    defined in this Code;
6        6. Failed to file or produce for the Secretary of State
7    any application, report, document or other pertinent
8    books, records, documents, letters, contracts, required to
9    be filed or produced under this Code or any rule or
10    regulation made by the Secretary of State pursuant to this
11    Code;
12        7. Previously had, within 3 years, such a license
13    denied, suspended, revoked, or cancelled under the
14    provisions of subsection (c)(2) of this Section;
15        8. Has committed in any calendar year 3 or more
16    violations, as determined in any civil or criminal
17    proceeding, of any one or more of the following Acts:
18            a. the "Consumer Finance Act";
19            b. the "Consumer Installment Loan Act";
20            c. the "Retail Installment Sales Act";
21            d. the "Motor Vehicle Retail Installment Sales
22        Act";
23            e. "An Act in relation to the rate of interest and
24        other charges in connection with sales on credit and
25        the lending of money", approved May 24, 1879, as
26        amended;

 

 

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1            f. "An Act to promote the welfare of wage-earners
2        by regulating the assignment of wages, and prescribing
3        a penalty for the violation thereof", approved July 1,
4        1935, as amended;
5            g. Part 8 of Article XII of the Code of Civil
6        Procedure; or
7            h. the "Consumer Fraud Act";
8        9. Failed to pay any fees or taxes due under this Act,
9    or has failed to transmit any fees or taxes received by him
10    for transmittal by him to the Secretary of State or the
11    State of Illinois;
12        10. Converted an abandoned vehicle;
13        11. Used a vehicle identification plate or number
14    assigned to a vehicle other than the one to which
15    originally assigned;
16        12. Violated the provisions of Chapter 5 of this Act,
17    as amended;
18        13. Violated the provisions of Chapter 4 of this Act,
19    as amended;
20        14. Violated the provisions of Chapter 3 of this Act,
21    as amended;
22        15. Violated Section 21-2 of the Criminal Code of 1961,
23    Criminal Trespass to Vehicles;
24        16. Made or concealed a material fact in connection
25    with his application for a license;
26        17. Acted in the capacity of a person licensed or acted

 

 

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1    as a licensee under this Chapter without having a license
2    therefor;
3        18. Failed to pay, within 90 days after a final
4    judgment, any fines assessed against the licensee pursuant
5    to an action brought under Section 5-404; .
6        19. Failed to pay the Dealer Recovery Trust Fund fee
7    under Section 5-102.7 of this Code.
8    (b) In addition to other grounds specified in this Chapter,
9the Secretary of State, on complaint of the Department of
10Revenue, shall refuse the issuance or renewal of a license, or
11suspend or revoke such license, for any of the following
12violations of the "Retailers' Occupation Tax Act":
13        1. Failure to make a tax return;
14        2. The filing of a fraudulent return;
15        3. Failure to pay all or part of any tax or penalty
16    finally determined to be due;
17        4. Failure to comply with the bonding requirements of
18    the "Retailers' Occupation Tax Act".
19    (b-1) In addition to other grounds specified in this
20Chapter, the Secretary of State, on complaint of the Motor
21Vehicle Review Board, shall refuse the issuance or renewal of a
22license, or suspend or revoke that license, if costs or fees
23assessed under Section 29 or Section 30 of the Motor Vehicle
24Franchise Act have remained unpaid for a period in excess of 90
25days after the licensee received from the Motor Vehicle Board a
26second notice and demand for the costs or fees. The Motor

 

 

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1Vehicle Review Board must send the licensee written notice and
2demand for payment of the fees or costs at least 2 times, and
3the second notice and demand must be sent by certified mail.
4    (c) Cancellation of a license.
5        1. The license of a person issued under this Chapter
6    may be cancelled by the Secretary of State prior to its
7    expiration in any of the following situations:
8            A. When a license is voluntarily surrendered, by
9        the licensed person; or
10            B. If the business enterprise is a sole
11        proprietorship, which is not a franchised dealership,
12        when the sole proprietor dies or is imprisoned for any
13        period of time exceeding 30 days; or
14            C. If the license was issued to the wrong person or
15        corporation, or contains an error on its face. If any
16        person above whose license has been cancelled wishes to
17        apply for another license, whether during the same
18        license year or any other year, that person shall be
19        treated as any other new applicant and the cancellation
20        of the person's prior license shall not, in and of
21        itself, be a bar to the issuance of a new license.
22        2. The license of a person issued under this Chapter
23    may be cancelled without a hearing when the Secretary of
24    State is notified that the applicant, or any officer,
25    director, shareholder having a 10 per cent or greater
26    ownership interest in the corporation, owner, partner,

 

 

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1    trustee, manager, employee or member of the applicant or
2    the licensee has been convicted of any felony involving the
3    selling, bartering, exchanging, offering for sale, or
4    otherwise dealing in vehicles, chassis, essential parts,
5    vehicle shells, or ownership documents relating to any of
6    the above items.
7(Source: P.A. 94-287, eff. 1-1-06.)
 
8    Section 99. Effective date. This Act takes effect October
91, 2011.