Illinois General Assembly

Previous General Assemblies

Full Text of HB0880  97th General Assembly

HB0880ham004 97TH GENERAL ASSEMBLY

Rep. Marlow H. Colvin

Filed: 4/13/2011

 

 


 

 


 
09700HB0880ham004LRB097 03709 AJO 54491 a

1
AMENDMENT TO HOUSE BILL 880

2    AMENDMENT NO. ______. Amend House Bill 880 by replacing
3everything after the enacting clause with the following:
 
4    "Section 5. The Illinois Vehicle Code is amended by
5changing Sections 5-101, 5-102, and 5-501 and by adding Section
65-102.7 as 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.

 

 

09700HB0880ham004- 2 -LRB097 03709 AJO 54491 a

1    (b) An application for a new vehicle dealer's license shall
2be filed with the Secretary of State, duly verified by oath, on
3such form as the Secretary of State may by rule or regulation
4prescribe and shall contain:
5        1. The name and type of business organization of the
6    applicant and his established and additional places of
7    business, if any, in this State.
8        2. If the applicant is a corporation, a list of its
9    officers, directors, and shareholders having a ten percent
10    or greater ownership interest in the corporation, setting
11    forth the residence address of each; if the applicant is a
12    sole proprietorship, a partnership, an unincorporated
13    association, a trust, or any similar form of business
14    organization, the name and residence address of the
15    proprietor or of each partner, member, officer, director,
16    trustee, or manager.
17        3. The make or makes of new vehicles which the
18    applicant will offer for sale at retail in this State.
19        4. The name of each manufacturer or franchised
20    distributor, if any, of new vehicles with whom the
21    applicant has contracted for the sale of such new vehicles.
22    As evidence of this fact, the application shall be
23    accompanied by a signed statement from each such
24    manufacturer or franchised distributor. If the applicant
25    is in the business of offering for sale new conversion
26    vehicles, trucks or vans, except for trucks modified to

 

 

09700HB0880ham004- 3 -LRB097 03709 AJO 54491 a

1    serve a special purpose which includes but is not limited
2    to the following vehicles: street sweepers, fertilizer
3    spreaders, emergency vehicles, implements of husbandry or
4    maintenance type vehicles, he must furnish evidence of a
5    sales and service agreement from both the chassis
6    manufacturer and second stage manufacturer.
7        5. A statement that the applicant has been approved for
8    registration under the Retailers' Occupation Tax Act by the
9    Department of Revenue: Provided that this requirement does
10    not apply to a dealer who is already licensed hereunder
11    with the Secretary of State, and who is merely applying for
12    a renewal of his license. As evidence of this fact, the
13    application shall be accompanied by a certification from
14    the Department of Revenue showing that that Department has
15    approved the applicant for registration under the
16    Retailers' Occupation Tax Act.
17        6. A statement that the applicant has complied with the
18    appropriate liability insurance requirement. A Certificate
19    of Insurance in a solvent company authorized to do business
20    in the State of Illinois shall be included with each
21    application covering each location at which he proposes to
22    act as a new vehicle dealer. The policy must provide
23    liability coverage in the minimum amounts of $100,000 for
24    bodily injury to, or death of, any person, $300,000 for
25    bodily injury to, or death of, two or more persons in any
26    one accident, and $50,000 for damage to property. Such

 

 

09700HB0880ham004- 4 -LRB097 03709 AJO 54491 a

1    policy shall expire not sooner than December 31 of the year
2    for which the license was issued or renewed. The expiration
3    of the insurance policy shall not terminate the liability
4    under the policy arising during the period for which the
5    policy was filed. Trailer and mobile home dealers are
6    exempt from this requirement.
7        If the permitted user has a liability insurance policy
8    that provides automobile liability insurance coverage of
9    at least $100,000 for bodily injury to or the death of any
10    person, $300,000 for bodily injury to or the death of any 2
11    or more persons in any one accident, and $50,000 for damage
12    to property, then the permitted user's insurer shall be the
13    primary insurer and the dealer's insurer shall be the
14    secondary insurer. If the permitted user does not have a
15    liability insurance policy that provides automobile
16    liability insurance coverage of at least $100,000 for
17    bodily injury to or the death of any person, $300,000 for
18    bodily injury to or the death of any 2 or more persons in
19    any one accident, and $50,000 for damage to property, or
20    does not have any insurance at all, then the dealer's
21    insurer shall be the primary insurer and the permitted
22    user's insurer shall be the secondary insurer.
23        When a permitted user is "test driving" a new vehicle
24    dealer's automobile, the new vehicle dealer's insurance
25    shall be primary and the permitted user's insurance shall
26    be secondary.

 

 

09700HB0880ham004- 5 -LRB097 03709 AJO 54491 a

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

 

 

09700HB0880ham004- 6 -LRB097 03709 AJO 54491 a

1        business, and $100 for each additional place of
2        business, if any, to which the application pertains;
3        but if the application is made after June 15 of any
4        year, the license fee shall be $500 for applicant's
5        established place of business plus $50 for each
6        additional place of business, if any, to which the
7        application pertains. License fees shall be returnable
8        only in the event that the application is denied by the
9        Secretary of State. All moneys received by the
10        Secretary of State as license fees under this
11        subparagraph (i) paragraph (7)(A) of subsection (b) of
12        this Section prior to applications for the 2004
13        licensing year 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. Of the money received by
17        the Secretary of State as license fees under this
18        subparagraph (i) paragraph (7)(A) of subsection (b) of
19        this Section for the 2004 licensing year and
20        thereafter, 10% shall be deposited into the Motor
21        Vehicle Review Board Fund and shall be used to
22        administer the Motor Vehicle Review Board under the
23        Motor Vehicle Franchise Act and 90% shall be deposited
24        into the General Revenue Fund.
25            (ii) Except as provided in subsection (h) of
26        Section 5-102.7 of this Code, an Annual Dealer Recovery

 

 

09700HB0880ham004- 7 -LRB097 03709 AJO 54491 a

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

 

 

09700HB0880ham004- 8 -LRB097 03709 AJO 54491 a

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

 

 

09700HB0880ham004- 9 -LRB097 03709 AJO 54491 a

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

 

 

09700HB0880ham004- 10 -LRB097 03709 AJO 54491 a

1            (G) Part 8 of Article XII of the Code of Civil
2        Procedure; or
3            (H) The Consumer Fraud Act.
4        10. A bond or certificate of deposit in the amount of
5    $20,000 for each location at which the applicant intends to
6    act as a new vehicle dealer. The bond shall be for the term
7    of the license, or its renewal, for which application is
8    made, and shall expire not sooner than December 31 of the
9    year for which the license was issued or renewed. The bond
10    shall run to the People of the State of Illinois, with
11    surety by a bonding or insurance company authorized to do
12    business in this State. It shall be conditioned upon the
13    proper transmittal of all title and registration fees and
14    taxes (excluding taxes under the Retailers' Occupation Tax
15    Act) accepted by the applicant as a new vehicle dealer.
16        11. Such other information concerning the business of
17    the applicant as the Secretary of State may by rule or
18    regulation prescribe.
19        12. A statement that the applicant understands Chapter
20    One through Chapter Five of this Code.
21    (c) Any change which renders no longer accurate any
22information contained in any application for a new vehicle
23dealer's license shall be amended within 30 days after the
24occurrence of such change on such form as the Secretary of
25State may prescribe by rule or regulation, accompanied by an
26amendatory fee of $2.

 

 

09700HB0880ham004- 11 -LRB097 03709 AJO 54491 a

1    (d) Anything in this Chapter 5 to the contrary
2notwithstanding no person shall be licensed as a new vehicle
3dealer unless:
4        1. He is authorized by contract in writing between
5    himself and the manufacturer or franchised distributor of
6    such make of vehicle to so sell the same in this State, and
7        2. Such person shall maintain an established place of
8    business as defined in this Act.
9    (e) The Secretary of State shall, within a reasonable time
10after receipt, examine an application submitted to him under
11this Section and unless he makes a determination that the
12application submitted to him does not conform with the
13requirements of this Section or that grounds exist for a denial
14of the application, under Section 5-501 of this Chapter, grant
15the applicant an original new vehicle dealer's license in
16writing for his established place of business and a
17supplemental license in writing for each additional place of
18business in such form as he may prescribe by rule or regulation
19which shall include the following:
20        1. The name of the person licensed;
21        2. If a corporation, the name and address of its
22    officers or if a sole proprietorship, a partnership, an
23    unincorporated association or any similar form of business
24    organization, the name and address of the proprietor or of
25    each partner, member, officer, director, trustee or
26    manager;

 

 

09700HB0880ham004- 12 -LRB097 03709 AJO 54491 a

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

 

 

09700HB0880ham004- 13 -LRB097 03709 AJO 54491 a

1is granted or denied by the Secretary of State.
2    (i) All persons licensed as a new vehicle dealer are
3required to furnish each purchaser of a motor vehicle:
4        1. In the case of a new vehicle a manufacturer's
5    statement of origin and in the case of a used motor vehicle
6    a certificate of title, in either case properly assigned to
7    the purchaser;
8        2. A statement verified under oath that all identifying
9    numbers on the vehicle agree with those on the certificate
10    of title or manufacturer's statement of origin;
11        3. A bill of sale properly executed on behalf of such
12    person;
13        4. A copy of the Uniform Invoice-transaction reporting
14    return referred to in Section 5-402 hereof;
15        5. In the case of a rebuilt vehicle, a copy of the
16    Disclosure of Rebuilt Vehicle Status; and
17        6. In the case of a vehicle for which the warranty has
18    been reinstated, a copy of the warranty.
19    (j) Except at the time of sale or repossession of the
20vehicle, no person licensed as a new vehicle dealer may issue
21any other person a newly created key to a vehicle unless the
22new vehicle dealer makes a copy of the driver's license or
23State identification card of the person requesting or obtaining
24the newly created key. The new vehicle dealer must retain the
25copy for 30 days.
26    A new vehicle dealer who violates this subsection (j) is

 

 

09700HB0880ham004- 14 -LRB097 03709 AJO 54491 a

1guilty of a petty offense. Violation of this subsection (j) is
2not cause to suspend, revoke, cancel, or deny renewal of the
3new vehicle dealer's license.
4    This amendatory Act of 1983 shall be applicable to the 1984
5registration year and thereafter.
6(Source: P.A. 92-391, eff. 8-16-01; 92-835, eff. 6-1-03; 93-32,
7eff. 7-1-03.)
 
8    (625 ILCS 5/5-102)  (from Ch. 95 1/2, par. 5-102)
9    Sec. 5-102. Used vehicle dealers must be licensed.
10    (a) No person, other than a licensed new vehicle dealer,
11shall engage in the business of selling or dealing in, on
12consignment or otherwise, 5 or more used vehicles of any make
13during the year (except house trailers as authorized by
14paragraph (j) of this Section and rebuilt salvage vehicles sold
15by their rebuilders to persons licensed under this Chapter), or
16act as an intermediary, agent or broker for any licensed dealer
17or vehicle purchaser (other than as a salesperson) or represent
18or advertise that he is so engaged or intends to so engage in
19such business unless licensed to do so by the Secretary of
20State under the provisions of this Section.
21    (b) An application for a used vehicle dealer's license
22shall be filed with the Secretary of State, duly verified by
23oath, in such form as the Secretary of State may by rule or
24regulation prescribe and shall contain:
25        1. The name and type of business organization

 

 

09700HB0880ham004- 15 -LRB097 03709 AJO 54491 a

1    established and additional places of business, if any, in
2    this State.
3        2. If the applicant is a corporation, a list of its
4    officers, directors, and shareholders having a ten percent
5    or greater ownership interest in the corporation, setting
6    forth the residence address of each; if the applicant is a
7    sole proprietorship, a partnership, an unincorporated
8    association, a trust, or any similar form of business
9    organization, the names and residence address of the
10    proprietor or of each partner, member, officer, director,
11    trustee or manager.
12        3. A statement that the applicant has been approved for
13    registration under the Retailers' Occupation Tax Act by the
14    Department of Revenue. However, this requirement does not
15    apply to a dealer who is already licensed hereunder with
16    the Secretary of State, and who is merely applying for a
17    renewal of his license. As evidence of this fact, the
18    application shall be accompanied by a certification from
19    the Department of Revenue showing that the Department has
20    approved the applicant for registration under the
21    Retailers' Occupation Tax Act.
22        4. A statement that the applicant has complied with the
23    appropriate liability insurance requirement. A Certificate
24    of Insurance in a solvent company authorized to do business
25    in the State of Illinois shall be included with each
26    application covering each location at which he proposes to

 

 

09700HB0880ham004- 16 -LRB097 03709 AJO 54491 a

1    act as a used vehicle dealer. The policy must provide
2    liability coverage in the minimum amounts of $100,000 for
3    bodily injury to, or death of, any person, $300,000 for
4    bodily injury to, or death of, two or more persons in any
5    one accident, and $50,000 for damage to property. Such
6    policy shall expire not sooner than December 31 of the year
7    for which the license was issued or renewed. The expiration
8    of the insurance policy shall not terminate the liability
9    under the policy arising during the period for which the
10    policy was filed. Trailer and mobile home dealers are
11    exempt from this requirement.
12        If the permitted user has a liability insurance policy
13    that provides automobile liability insurance coverage of
14    at least $100,000 for bodily injury to or the death of any
15    person, $300,000 for bodily injury to or the death of any 2
16    or more persons in any one accident, and $50,000 for damage
17    to property, then the permitted user's insurer shall be the
18    primary insurer and the dealer's insurer shall be the
19    secondary insurer. If the permitted user does not have a
20    liability insurance policy that provides automobile
21    liability insurance coverage of at least $100,000 for
22    bodily injury to or the death of any person, $300,000 for
23    bodily injury to or the death of any 2 or more persons in
24    any one accident, and $50,000 for damage to property, or
25    does not have any insurance at all, then the dealer's
26    insurer shall be the primary insurer and the permitted

 

 

09700HB0880ham004- 17 -LRB097 03709 AJO 54491 a

1    user's insurer shall be the secondary insurer.
2        When a permitted user is "test driving" a used vehicle
3    dealer's automobile, the used vehicle dealer's insurance
4    shall be primary and the permitted user's insurance shall
5    be secondary.
6        As used in this paragraph 4, a "permitted user" is a
7    person who, with the permission of the used vehicle dealer
8    or an employee of the used vehicle dealer, drives a vehicle
9    owned and held for sale or lease by the used vehicle dealer
10    which the person is considering to purchase or lease, in
11    order to evaluate the performance, reliability, or
12    condition of the vehicle. The term "permitted user" also
13    includes a person who, with the permission of the used
14    vehicle dealer, drives a vehicle owned or held for sale or
15    lease by the used vehicle dealer for loaner purposes while
16    the user's vehicle is being repaired or evaluated.
17        As used in this paragraph 4, "test driving" occurs when
18    a permitted user who, with the permission of the used
19    vehicle dealer or an employee of the used vehicle dealer,
20    drives a vehicle owned and held for sale or lease by a used
21    vehicle dealer that the person is considering to purchase
22    or lease, in order to evaluate the performance,
23    reliability, or condition of the vehicle.
24        As used in this paragraph 4, "loaner purposes" means
25    when a person who, with the permission of the used vehicle
26    dealer, drives a vehicle owned or held for sale or lease by

 

 

09700HB0880ham004- 18 -LRB097 03709 AJO 54491 a

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

 

 

09700HB0880ham004- 19 -LRB097 03709 AJO 54491 a

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

 

 

09700HB0880ham004- 20 -LRB097 03709 AJO 54491 a

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

 

 

09700HB0880ham004- 21 -LRB097 03709 AJO 54491 a

1    business in this State. It shall be conditioned upon the
2    proper transmittal of all title and registration fees and
3    taxes (excluding taxes under the Retailers' Occupation Tax
4    Act) accepted by the applicant as a used vehicle dealer.
5        9. Such other information concerning the business of
6    the applicant as the Secretary of State may by rule or
7    regulation prescribe.
8        10. A statement that the applicant understands Chapter
9    1 through Chapter 5 of this Code.
10        11. A copy of the certification from the prelicensing
11    education program.
12    (c) Any change which renders no longer accurate any
13information contained in any application for a used vehicle
14dealer's license shall be amended within 30 days after the
15occurrence of each change on such form as the Secretary of
16State may prescribe by rule or regulation, accompanied by an
17amendatory fee of $2.
18    (d) Anything in this Chapter to the contrary
19notwithstanding, no person shall be licensed as a used vehicle
20dealer unless such person maintains an established place of
21business as defined in this Chapter.
22    (e) The Secretary of State shall, within a reasonable time
23after receipt, examine an application submitted to him under
24this Section. Unless the Secretary makes a determination that
25the application submitted to him does not conform to this
26Section or that grounds exist for a denial of the application

 

 

09700HB0880ham004- 22 -LRB097 03709 AJO 54491 a

1under Section 5-501 of this Chapter, he must grant the
2applicant an original used vehicle dealer's license in writing
3for his established place of business and a supplemental
4license in writing for each additional place of business in
5such form as he may prescribe by rule or regulation which shall
6include the following:
7        1. The name of the person licensed;
8        2. If a corporation, the name and address of its
9    officers or if a sole proprietorship, a partnership, an
10    unincorporated association or any similar form of business
11    organization, the name and address of the proprietor or of
12    each partner, member, officer, director, trustee or
13    manager;
14        3. In case of an original license, the established
15    place of business of the licensee;
16        4. In the case of a supplemental license, the
17    established place of business of the licensee and the
18    additional place of business to which such supplemental
19    license pertains.
20    (f) The appropriate instrument evidencing the license or a
21certified copy thereof, provided by the Secretary of State
22shall be kept posted, conspicuously, in the established place
23of business of the licensee and in each additional place of
24business, if any, maintained by such licensee.
25    (g) Except as provided in subsection (h) of this Section,
26all used vehicle dealer's licenses granted under this Section

 

 

09700HB0880ham004- 23 -LRB097 03709 AJO 54491 a

1expire by operation of law on December 31 of the calendar year
2for which they are granted unless sooner revoked or cancelled
3under Section 5-501 of this Chapter.
4    (h) A used vehicle dealer's license may be renewed upon
5application and payment of the fee required herein, and
6submission of proof of coverage by an approved bond under the
7"Retailers' Occupation Tax Act" or proof that applicant is not
8subject to such bonding requirements, as in the case of an
9original license, but in case an application for the renewal of
10an effective license is made during the month of December, the
11effective license shall remain in force until the application
12for renewal is granted or denied by the Secretary of State.
13    (i) All persons licensed as a used vehicle dealer are
14required to furnish each purchaser of a motor vehicle:
15        1. A certificate of title properly assigned to the
16    purchaser;
17        2. A statement verified under oath that all identifying
18    numbers on the vehicle agree with those on the certificate
19    of title;
20        3. A bill of sale properly executed on behalf of such
21    person;
22        4. A copy of the Uniform Invoice-transaction reporting
23    return referred to in Section 5-402 of this Chapter;
24        5. In the case of a rebuilt vehicle, a copy of the
25    Disclosure of Rebuilt Vehicle Status; and
26        6. In the case of a vehicle for which the warranty has

 

 

09700HB0880ham004- 24 -LRB097 03709 AJO 54491 a

1    been reinstated, a copy of the warranty.
2    (j) A real estate broker holding a valid certificate of
3registration issued pursuant to "The Real Estate Brokers and
4Salesmen License Act" may engage in the business of selling or
5dealing in house trailers not his own without being licensed as
6a used vehicle dealer under this Section; however such broker
7shall maintain a record of the transaction including the
8following:
9        (1) the name and address of the buyer and seller,
10        (2) the date of sale,
11        (3) a description of the mobile home, including the
12    vehicle identification number, make, model, and year, and
13        (4) the Illinois certificate of title number.
14    The foregoing records shall be available for inspection by
15any officer of the Secretary of State's Office at any
16reasonable hour.
17    (k) Except at the time of sale or repossession of the
18vehicle, no person licensed as a used vehicle dealer may issue
19any other person a newly created key to a vehicle unless the
20used vehicle dealer makes a copy of the driver's license or
21State identification card of the person requesting or obtaining
22the newly created key. The used vehicle dealer must retain the
23copy for 30 days.
24    A used vehicle dealer who violates this subsection (k) is
25guilty of a petty offense. Violation of this subsection (k) is
26not cause to suspend, revoke, cancel, or deny renewal of the

 

 

09700HB0880ham004- 25 -LRB097 03709 AJO 54491 a

1used vehicle dealer's license.
2    (l) Used vehicle dealers licensed under this Section shall
3provide the Secretary of State a register for the sale at
4auction of each salvage or junk certificate vehicle. Each
5register shall include the following information:
6        1. The year, make, model, style and color of the
7    vehicle;
8        2. The vehicle's manufacturer's identification number
9    or, if applicable, the Secretary of State or Illinois
10    Department of State Police identification number;
11        3. The date of acquisition of the vehicle;
12        4. The name and address of the person from whom the
13    vehicle was acquired;
14        5. The name and address of the person to whom any
15    vehicle was disposed, the person's Illinois license number
16    or if the person is an out-of-state salvage vehicle buyer,
17    the license number from the state or jurisdiction where the
18    buyer is licensed; and
19        6. The purchase price of the vehicle.
20    The register shall be submitted to the Secretary of State
21via written or electronic means within 10 calendar days from
22the date of the auction.
23(Source: P.A. 95-783, eff. 1-1-09; 96-678, eff. 8-25-09.)
 
24    (625 ILCS 5/5-102.7 new)
25    Sec. 5-102.7. Dealer Recovery Trust Fund.

 

 

09700HB0880ham004- 26 -LRB097 03709 AJO 54491 a

1    (a) The General Assembly finds that motor vehicle dealers
2that go out of business without fulfilling agreements to pay
3off the balance of their customers' liens on traded-in vehicles
4cause financial harm to those customers by leaving those
5customers liable for multiple vehicle loans and cause harm to
6the integrity of the motor vehicle retailing industry. It is
7the intent of the General Assembly to protect vehicle
8purchasers by creating a Dealer Recovery Trust Fund to
9reimburse these consumers.
10    (b) The Dealer Recovery Trust Fund shall be used solely for
11the limited purpose of helping victims of dealership closings.
12Any interest accrued by moneys in the Fund shall be deposited
13and become part of the Dealer Recovery Trust Fund and its
14purpose. The sole beneficiaries of the Dealer Recovery Trust
15Fund are victims of dealership closings.
16    (c) Except where the context otherwise requires, the
17following words and phrases, when used in this Section, have
18the meanings ascribed to them in this subsection (c):
19    "Applicant" means a person who applies for reimbursement
20from the Dealer Recovery Trust Fund Board.
21    "Board" means the Dealer Recovery Trust Fund Board created
22under this Section.
23    "Dealer" means a new vehicle dealer licensed under Section
245-101 or a used vehicle dealer licensed under Section 5-102,
25excepting a dealer who primarily sells mobile homes,
26recreational vehicles, or trailers.

 

 

09700HB0880ham004- 27 -LRB097 03709 AJO 54491 a

1    "Fund" means the Dealer Recovery Trust Fund created under
2this Section.
3    "Fund Administrator" means the entity that administers the
4Dealer Recovery Trust Fund, which shall be appointed by the
5Board.
6    (d) Beginning October 1, 2011, each application or renewal
7for a new vehicle dealer's license and each application or
8renewal for a used vehicle dealer's license shall be
9accompanied by the applicable Annual Dealer Recovery Fund Fee
10under Section 5-101 or 5-102 of this Code. The fee shall be in
11addition to any other fees imposed under this Article, shall be
12submitted at the same time an application or renewal for a new
13vehicle dealer's license or used vehicle dealer's license is
14submitted, and shall be made payable to and remitted directly
15to the Dealer Recovery Trust Fund, a trust fund outside of the
16State Treasury which is hereby created. In addition, the Dealer
17Recovery Trust Fund may accept any federal, State, or private
18moneys for deposit into the Fund.
19    (e) The Fund Administrator shall maintain a list of all
20dealers who have paid the fee under subsection (d) of this
21Section for the current year, which shall be available to the
22Secretary of State and the Board. The Secretary of State shall
23revoke the dealer license of any dealer who does not pay the
24fee imposed under subsection (d) of this Section. The Secretary
25of State and the Fund Administrator may enter into information
26sharing agreements as needed to implement this Section.

 

 

09700HB0880ham004- 28 -LRB097 03709 AJO 54491 a

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

 

 

09700HB0880ham004- 29 -LRB097 03709 AJO 54491 a

1assessed any civil penalties under this Code during the 3
2previous years.
3    (i) Moneys in the Dealer Recovery Trust Fund may be paid
4from the Fund only as directed by a written order of the Board
5and used only for the following purposes:
6        (i) to pay claims under a written order of the Board as
7    provided in this Section; or
8        (ii) to reimburse the Fund Administrator for its
9    expenses related to the administration of the Fund,
10    provided that the reimbursement to the Fund Administrator
11    in any year shall not exceed 2% of the balance in the Fund
12    as of January 15th of that year.
13    (j) The Dealer Recovery Trust Fund Board is hereby created.
14The Board shall consist of the Secretary of State, or his or
15her designee, who shall serve as chair, the Attorney General,
16or his or her designee, who shall serve as secretary, and one
17person representing Illinois automobile dealers, selected
18collectively by the Attorney General, or his or her designee,
19and the Secretary of State, or his or her designee. The
20Secretary of State may propose procedures and employ personnel
21as necessary to implement this Section. The Board shall meet at
22least twice per year, and as needed, as directed by the chair.
23The Board may not pay out any claims before the balance
24deposited into the Fund exceeds $500,000. Board meetings shall
25be open to the public. The Board has the authority to take any
26action by at least a two-thirds majority vote.

 

 

09700HB0880ham004- 30 -LRB097 03709 AJO 54491 a

1    (k) The following persons may apply to the Board for
2reimbursement from the Dealer Recovery Trust Fund:
3        (i) A retail customer who, on or after October 1, 2011,
4    purchases a vehicle from a dealer who subsequently files
5    for bankruptcy or whose vehicle dealer's license is
6    subsequently revoked by the Secretary of State or otherwise
7    terminated and, as part of the purchase transaction, trades
8    in a vehicle with an outstanding lien to the dealer if lien
9    satisfaction was a condition of the purchase agreement and
10    the retail customer determines that the lien has not been
11    satisfied;
12        (ii) A retail customer who, on or after October 1,
13    2011, purchases a vehicle with an undisclosed lien from a
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        (iii) A dealer who, on or after October 1, 2011,
18    purchases a vehicle with an undisclosed lien from another
19    dealer who subsequently files for bankruptcy or whose
20    vehicle dealer's license is subsequently revoked by the
21    Secretary of State or otherwise terminated.
22    (l) To be considered by the Board, an applicant must submit
23his or her claim to the Board within 9 months after the date of
24the transaction that gave rise to the claim.
25    (m) At each meeting of the Board, it shall consider all
26claims that are properly submitted to it on forms prescribed by

 

 

09700HB0880ham004- 31 -LRB097 03709 AJO 54491 a

1the Secretary of State at least 30 days before the date of the
2Board's meeting. Before the Board may consider a claim against
3a dealer, it must make a written determination that the dealer
4has filed for bankruptcy under the provisions of 11 U.S.C.
5Chapter 7; that the Secretary of State has revoked his or her
6dealer's license; or that the license has been otherwise
7terminated. Once the Board has made this determination, it may
8consider the applicant's claim against the dealer. If a
9two-thirds majority of the Board determines that the dealer has
10committed a violation under subsection (k), it shall grant the
11applicant's claim. Except as otherwise provided in this
12Section, the maximum amount of any award for a claim under
13paragraph (i) of subsection (k) of this Section shall be equal
14to the amount of the unpaid balance of the lien that the dealer
15agreed to pay off on behalf of the applicant as shown on the
16bill of sale or the retail installment sales contract. The
17maximum amount of any claim under paragraph (ii) or (iii) of
18subsection (k) of this Section shall be equal to the amount of
19the undisclosed lien. However, no award for a claim under
20subsection (k) of this Section shall exceed $35,000.
21    (n) If the balance in the Fund at the time of any Board
22meeting is less than the amount of the total amount of all
23claims awarded at that meeting, then all awards made at that
24meeting shall be reduced, pro rata, so that the amount of
25claims does not exceed the balance in the Fund. Before it
26reviews new claims, the Board shall issue written orders to pay

 

 

09700HB0880ham004- 32 -LRB097 03709 AJO 54491 a

1the remaining portion of any claims that were so reduced,
2provided that the balance in the Fund is sufficient to pay
3those claims.
4    (o) Whenever the balance of the Fund falls below $500,000,
5the Board may charge dealers an additional assessment of up to
6$50 to bring the balance to at least $500,000. Not more than
7one additional assessment may be made against a dealer in any
812-month period.
9    (p) If the total amount of claims awarded against any
10dealer exceeds 33% of the balance in the Fund, the Board may
11permanently reduce the amount of those claims, pro rata, so
12that those claims do not exceed 33% of the balance in the Fund.
13    (q) The Board shall issue a written order directing the
14Fund Administrator to pay an applicant's claim to a secured
15party where the Board has received a signed agreement between
16the applicant and the secured party holding the lien. The
17agreement must (i) state that the applicant and the secured
18party agree to accept payment from the Fund to the secured
19party as settlement in full of all claims against the dealer;
20and (ii) release the lien and the title, if applicable, to the
21vehicle that was the subject of the claim. The written order
22shall state the amount of the claim and the name and address of
23the secured party to whom the claim shall be paid. The Fund
24Administrator shall pay the claim within 30 days after it
25receives the Board's order.
26    (r) No dealer or principal associated with a dealer's

 

 

09700HB0880ham004- 33 -LRB097 03709 AJO 54491 a

1license is eligible for licensure, renewal or relicensure until
2the full amount of reimbursement for an unpaid claim, plus
3interest as determined by the Board, is paid to the Fund.
4Nothing in this Section shall limit the authority of the
5Secretary of State to suspend, revoke, or levy civil penalties
6against a dealer, nor shall full repayment of the amount owed
7to the Fund nullify or modify the effect of any action by the
8Secretary.
9    (s) Nothing in this Section shall limit the right of any
10person to seek relief though civil action against any other
11person as an alternative to seeking reimbursement from the
12Fund.
 
13    (625 ILCS 5/5-501)  (from Ch. 95 1/2, par. 5-501)
14    Sec. 5-501. Denial, suspension or revocation or
15cancellation of a license.
16    (a) The license of a person issued under this Chapter may
17be denied, revoked or suspended if the Secretary of State finds
18that the applicant, or the officer, director, shareholder
19having a ten percent or greater ownership interest in the
20corporation, owner, partner, trustee, manager, employee or the
21licensee has:
22        1. Violated this Act;
23        2. Made any material misrepresentation to the
24    Secretary of State in connection with an application for a
25    license, junking certificate, salvage certificate, title

 

 

09700HB0880ham004- 34 -LRB097 03709 AJO 54491 a

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

 

 

09700HB0880ham004- 35 -LRB097 03709 AJO 54491 a

1        Act";
2            e. "An Act in relation to the rate of interest and
3        other charges in connection with sales on credit and
4        the lending of money", approved May 24, 1879, as
5        amended;
6            f. "An Act to promote the welfare of wage-earners
7        by regulating the assignment of wages, and prescribing
8        a penalty for the violation thereof", approved July 1,
9        1935, as amended;
10            g. Part 8 of Article XII of the Code of Civil
11        Procedure; or
12            h. the "Consumer Fraud Act";
13        9. Failed to pay any fees or taxes due under this Act,
14    or has failed to transmit any fees or taxes received by him
15    for transmittal by him to the Secretary of State or the
16    State of Illinois;
17        10. Converted an abandoned vehicle;
18        11. Used a vehicle identification plate or number
19    assigned to a vehicle other than the one to which
20    originally assigned;
21        12. Violated the provisions of Chapter 5 of this Act,
22    as amended;
23        13. Violated the provisions of Chapter 4 of this Act,
24    as amended;
25        14. Violated the provisions of Chapter 3 of this Act,
26    as amended;

 

 

09700HB0880ham004- 36 -LRB097 03709 AJO 54491 a

1        15. Violated Section 21-2 of the Criminal Code of 1961,
2    Criminal Trespass to Vehicles;
3        16. Made or concealed a material fact in connection
4    with his application for a license;
5        17. Acted in the capacity of a person licensed or acted
6    as a licensee under this Chapter without having a license
7    therefor;
8        18. Failed to pay, within 90 days after a final
9    judgment, any fines assessed against the licensee pursuant
10    to an action brought under Section 5-404; .
11        19. Failed to pay the Dealer Recovery Trust Fund fee
12    under Section 5-102.7 of this Code.
13    (b) In addition to other grounds specified in this Chapter,
14the Secretary of State, on complaint of the Department of
15Revenue, shall refuse the issuance or renewal of a license, or
16suspend or revoke such license, for any of the following
17violations of the "Retailers' Occupation Tax Act":
18        1. Failure to make a tax return;
19        2. The filing of a fraudulent return;
20        3. Failure to pay all or part of any tax or penalty
21    finally determined to be due;
22        4. Failure to comply with the bonding requirements of
23    the "Retailers' Occupation Tax Act".
24    (b-1) In addition to other grounds specified in this
25Chapter, the Secretary of State, on complaint of the Motor
26Vehicle Review Board, shall refuse the issuance or renewal of a

 

 

09700HB0880ham004- 37 -LRB097 03709 AJO 54491 a

1license, or suspend or revoke that license, if costs or fees
2assessed under Section 29 or Section 30 of the Motor Vehicle
3Franchise Act have remained unpaid for a period in excess of 90
4days after the licensee received from the Motor Vehicle Board a
5second notice and demand for the costs or fees. The Motor
6Vehicle Review Board must send the licensee written notice and
7demand for payment of the fees or costs at least 2 times, and
8the second notice and demand must be sent by certified mail.
9    (c) Cancellation of a license.
10        1. The license of a person issued under this Chapter
11    may be cancelled by the Secretary of State prior to its
12    expiration in any of the following situations:
13            A. When a license is voluntarily surrendered, by
14        the licensed person; or
15            B. If the business enterprise is a sole
16        proprietorship, which is not a franchised dealership,
17        when the sole proprietor dies or is imprisoned for any
18        period of time exceeding 30 days; or
19            C. If the license was issued to the wrong person or
20        corporation, or contains an error on its face. If any
21        person above whose license has been cancelled wishes to
22        apply for another license, whether during the same
23        license year or any other year, that person shall be
24        treated as any other new applicant and the cancellation
25        of the person's prior license shall not, in and of
26        itself, be a bar to the issuance of a new license.

 

 

09700HB0880ham004- 38 -LRB097 03709 AJO 54491 a

1        2. The license of a person issued under this Chapter
2    may be cancelled without a hearing when the Secretary of
3    State is notified that the applicant, or any officer,
4    director, shareholder having a 10 per cent or greater
5    ownership interest in the corporation, owner, partner,
6    trustee, manager, employee or member of the applicant or
7    the licensee has been convicted of any felony involving the
8    selling, bartering, exchanging, offering for sale, or
9    otherwise dealing in vehicles, chassis, essential parts,
10    vehicle shells, or ownership documents relating to any of
11    the above items.
12(Source: P.A. 94-287, eff. 1-1-06.)
 
13    Section 99. Effective date. This Act takes effect October
141, 2011.".