HB4108 102ND GENERAL ASSEMBLY

LRB102 19025 KMF 27789 b

102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
HB4108

Introduced 9/3/2021, by Rep. Jonathan Carroll

SYNOPSIS AS INTRODUCED:

New Act
30 ILCS 105/5.935 new
35 ILCS 120/6	from Ch. 120, par. 445
625 ILCS 5/5-104.2
815 ILCS 380/Act rep.

Creates the New Vehicle Buyer Protection Act of 2021. Provides that if a manufacturer is unable to service or repair a new motor vehicle to conform to the applicable written warranties after a reasonable number of attempts, the manufacturer shall either promptly replace the new motor vehicle or make restitution to the buyer. Provides that it shall be presumed that a reasonable number of attempts have been made to conform a new motor vehicle to the applicable express warranties if, within 18 months from delivery to the buyer or 18,000 miles on the odometer of the vehicle: (1) the same nonconformity results in a condition that is likely to cause death or serious bodily injury if the vehicle is driven after 2 or more repairs; (2) the same nonconformity has been subject to repair 4 or more times; or (3) the vehicle is out of service by reason of repair for more than 30 calendar days since delivery of the vehicle to the buyer. Requires a buyer to initiate a qualified third-party dispute resolution process, if available, before asserting the presumption that a reasonable number of attempts have been made to repair the nonconformity. Prohibits a person from selling a motor vehicle without first disclosing to the prospective buyer that the vehicle had a nonconformity and the nonconformity was corrected. Contains provisions concerning a "Lemon Law Buyback" decal; a warranty buyback notice; remedies; a manufacturer's fee for each vehicle sold; sales and use tax reimbursements; and other matters. Amends the Retailers' Occupation Tax Act and the Illinois Vehicle Code. Changes references to "New Vehicle Buyer Protection Act" to "New Vehicle Buyer Protection Act of 2021". Amends the State Finance Act. Creates the Motor Vehicle Dispute Resolution Certification Fund. Repeals the New Vehicle Buyer Protection Act.

A BILL FOR

AN ACT concerning business.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 1. Short title. This Act may be cited as the New Vehicle Buyer Protection Act of 2021.

Section 3. Definitions. As used in this Act:

"Buyer" or "retail buyer" means any individual or entity who buys a new motor vehicle from a person, including a partnership, limited liability company, corporation, association, or any other legal entity, engaged in the business of manufacturing, distributing, or selling vehicles at retail.

"Distributor" means any individual, partnership, corporation, association, or other legal relationship that stands between the manufacturer and the retail seller in purchases, consignments, or contracts for sale of motor vehicles.

"Lease" means any contract for the lease or bailment for the use of a motor vehicle by an individual, for a term exceeding 4 months, primarily for personal, family, or household purposes, whether or not it is agreed that the lessee bears the risk of the vehicles' depreciation.

"Lessee" means an individual who leases a motor vehicle under a lease.

"Manufacturer" means any individual, partnership, corporation, association, or other legal relationship that manufactures, assembles, or produces motor vehicles.

"Motor home" means a vehicular unit built on, or permanently attached to, a self-propelled motor vehicle chassis, chassis cab, or van, which becomes an integral part of the completed vehicle, designed for human habitation for recreational or emergency occupancy.

"New motor vehicle" means a new motor vehicle that is bought or used primarily for personal, family, or household purposes. "New motor vehicle" also means a new motor vehicle with a gross vehicle weight under 10,000 pounds that is bought or used primarily for business purposes by a person, including a partnership, limited liability company, corporation, association, or any other legal entity, to which not more than 5 motor vehicles are registered in this State. "New motor vehicle" includes the chassis, cab, and that portion of a motor home devoted to its propulsion, but does not include any portion designed, used, or maintained primarily for human habitation, a dealer-owned vehicle, and a "demonstrator" or other motor vehicle sold with a manufacturer's new car warranty, but does not include a motorcycle or a motor vehicle which is not registered under the Illinois Vehicle Code because it is to be operated or used exclusively off the highways. A demonstrator is a vehicle assigned by a dealer for the purpose of demonstrating qualities and characteristics common to vehicles of the same or similar model and type.

"Nonconformity" means a nonconformity which substantially impairs the use, value, or safety of the new motor vehicle to the buyer or lessee.

"Retail seller" or "retailer" means any individual, partnership, corporation, association, or other legal relationship that engages in the business of selling or leasing motor vehicles to retail buyers.

"Service contract" means a contract in writing to perform, over a fixed period of time or for a specified duration, services relating to the maintenance or repair of a motor vehicle, except that this term does not include a policy of automobile insurance as defined in Section 143.13 of the Illinois Insurance Code.

"Supplier" means any person engaged in the business of making a motor home or new motor vehicle directly or indirectly available to a buyer.

"Written warranty" means any undertaking in writing in connection with the sale by a supplier of a consumer product to refund, repair, replace, or take other remedial action with respect to the product if the product fails to meet the specifications set forth in the undertaking.

Section 5. Failure to service or repair. If a manufacturer or its representative in this State is unable to service or repair a new motor vehicle or motor home to conform to the applicable written warranties after a reasonable number of attempts, the manufacturer shall either promptly replace the new motor vehicle or motor home in accordance with paragraph (1) or promptly make restitution to the buyer in accordance with paragraph (2). However, the buyer shall be free to elect restitution in lieu of replacement, and in no event shall the buyer be required by the manufacturer to accept a replacement vehicle.

(1) In the case of replacement, the manufacturer shall replace the buyer's vehicle with a new motor vehicle or motor home substantially identical to the new motor vehicle or motor home replaced. The replacement vehicle shall be accompanied by all written and implied warranties that normally accompany new motor vehicles or motor homes of that specific kind. The manufacturer also shall pay for, or to, the buyer the amount of any sales or use tax, license fees, registration fees, and other official fees which the buyer is obligated to pay in connection with the replacement, plus any incidental damages to which the buyer is entitled under Section 30, including, but not limited to, reasonable repair, towing, and rental car costs actually incurred by the buyer.

(2) In the case of restitution, the manufacturer shall make restitution in an amount equal to the actual price paid or payable by the buyer, including any charges for transportation and manufacturer-installed options, but excluding non-manufacturer items installed by a dealer or the buyer, and including any collateral charges such as sales or use tax, license fees, registration fees, finance interest charges, and other official fees, plus any incidental damages to which the buyer is entitled under Section 30, including, but not limited to, reasonable repair, towing, and rental car costs actually incurred by the buyer.

(3) When the manufacturer replaces the new motor vehicle or motor home pursuant to paragraph (1), the buyer shall only be liable to pay the manufacturer an amount directly attributable to use by the buyer of the replaced vehicle prior to the time the buyer first delivered the vehicle to the manufacturer or distributor, or its authorized service and repair facility for correction of the problem that gave rise to the nonconformity. When restitution is made pursuant to paragraph (2), the amount to be paid by the manufacturer to the buyer may be reduced by the manufacturer by that amount directly attributable to use by the buyer prior to the time the buyer first delivered the vehicle to the manufacturer or distributor, or its authorized service and repair facility for correction of the problem that gave rise to the nonconformity. The amount directly attributable to use by the buyer shall be determined by multiplying the actual price of the new motor vehicle or motor home paid or payable by the buyer, including any charges for transportation and manufacturer-installed options, by a fraction having as its denominator 120,000 and having as its numerator the number of miles traveled by the new motor vehicle or motor home prior to the time the buyer first delivered the new motor vehicle or motor home to the manufacturer or distributor, or its authorized service and repair facility for correction of the problem that gave rise to the nonconformity. Nothing in this paragraph shall in any way limit the rights or remedies available to the buyer under any other law.

(4) A buyer of a new motor vehicle or motor home shall also include a lessee of a new motor vehicle or motor home.

Section 10. Nonconformity.

(a) It shall be presumed that a reasonable number of attempts have been made to conform a new motor vehicle or motor home to the applicable written warranties if, within 18 months from delivery to the buyer or 18,000 miles on the odometer of the vehicle, whichever occurs first, one or more of the following occurs:

(1) The same nonconformity results in a condition that is likely to cause death or serious bodily injury if the new motor vehicle or motor home is driven and the nonconformity has been subject to repair 2 or more times by the manufacturer or its agents, and the buyer or lessee has at least once directly notified the manufacturer of the need for the repair of the nonconformity.

(2) The same nonconformity has been subject to repair 4 or more times by the manufacturer or its agents and the buyer has at least once directly notified the manufacturer of the need for the repair of the nonconformity.

(3) The vehicle is out of service by reason of repair of nonconformities by the manufacturer or its agents for a cumulative total of more than 30 calendar days since delivery of the new motor vehicle or motor home to the buyer. The 30-day limit shall be extended only if repairs cannot be performed due to conditions beyond the control of the manufacturer or its agents. The buyer shall be required to directly notify the manufacturer pursuant to paragraphs (1) and (2) only if the manufacturer has clearly and conspicuously disclosed to the buyer, with the warranty or the owner's manual, the provisions of this Section and that of Section 5, including the requirement that the buyer must notify the manufacturer directly pursuant to paragraphs (1) and (2). The notification, if required, shall be sent to the address, if any, specified clearly and conspicuously by the manufacturer in the written warranty or owner's manual. This presumption shall be a rebuttable presumption affecting the burden of proof, and it may be asserted by the buyer in any civil action, including an action in small claims court, or other formal or informal proceeding.

(b) If a qualified third-party dispute resolution process exists, and the buyer receives timely notification in writing of the availability of that qualified third-party dispute resolution process with a description of its operation and effect, the presumption in subsection (a) may not be asserted by the buyer until after the buyer has initially resorted to the qualified third-party dispute resolution process as required in subsection (c). Notification of the availability of the qualified third-party dispute resolution process is not timely if the buyer suffers any prejudice resulting from any delay in giving the notification. If a qualified third-party dispute resolution process does not exist, or if the buyer is dissatisfied with that third-party decision, or if the manufacturer or its agent neglects to promptly fulfill the terms of the qualified third-party dispute resolution process decision after the decision is accepted by the buyer, the buyer may assert the presumption provided in subsection (a) in an action to enforce the buyer's rights under Section 5. The findings and decision of a qualified third-party dispute resolution process shall be admissible in evidence in the action without further foundation. Any period of limitation of actions under any federal or State laws with respect to any person shall be extended for a period equal to the number of days between the date a complaint is filed with a third-party dispute resolution process and the date of its decision or the date before which the manufacturer or its agent is required by the decision to fulfill its terms if the decision is accepted by the buyer, whichever occurs later.

(c) A qualified third-party dispute resolution process shall be one that does all of the following:

(1) Complies with the minimum requirements of the Federal Trade Commission for informal dispute settlement procedures as set forth in Part 703 of Title 16 of the Code of Federal Regulations, as those regulations read on January 1, 1987.

(2) Renders decisions which are binding on the manufacturer if the buyer elects to accept the decision.

(3) Prescribes a reasonable time, not to exceed 30 days after the decision is accepted by the buyer, within which the manufacturer or its agent must fulfill the terms of its decisions.

(4) Provides arbitrators who are assigned to decide disputes with copies of, and instruction in, the provisions of the Federal Trade Commission's regulations in Part 703 of Title 16 of the Code of Federal Regulations as those regulations read on January 1, 1987, Article 2 of the Uniform Commercial Code, and this Act.

(5) Requires the manufacturer, when the process orders, under the terms of this Act, either that the nonconforming new motor vehicle or motor home be replaced if the buyer consents to this remedy or that restitution be made to the buyer, to replace the new motor vehicle or motor home or make restitution in accordance with Section 5.

(6) Provides, at the request of the arbitrator or a majority of the arbitration panel, for an inspection and written report on the condition of a nonconforming new motor vehicle, or motor home, at no cost to the buyer, by an automobile expert who is independent of the manufacturer.

(7) Takes into account, in rendering decisions, all legal and equitable factors, including, but not limited to, the written warranty, the rights and remedies conferred in regulations of the Federal Trade Commission contained in Part 703 of Title 16 of the Code of Federal Regulations as those regulations read on January 1, 1987, Article 2 of the Uniform Commercial Code, this Act, and any other equitable considerations appropriate in the circumstances. Nothing in this Act requires that, to be certified as a qualified third-party dispute resolution process pursuant to this Section, decisions of the process must consider or provide remedies in the form of awards of punitive damages or multiple damages, under subsection (c) of Section 30, or of attorney's fees under subsection (d) of Section 30, or of consequential damages other than as provided in subsections (a) and (b) of Section 30, including, but not limited to, reasonable repair, towing, and rental car costs actually incurred by the buyer.

(8) Requires that no arbitrator deciding a dispute may be a party to the dispute and that no other person, including an employee, agent, or dealer for the manufacturer, may be allowed to participate substantively in the merits of any dispute with the arbitrator unless the buyer is allowed to participate as well. Nothing in this subsection prohibits any member of an arbitration from deciding a dispute.

(9) Obtains and maintains certification by the Attorney General as provided in Section 35.

(d) (1) Except as provided in paragraph (2), no person shall sell, either at wholesale or retail, lease, or transfer a new motor vehicle or motor home transferred by a buyer or lessee to a manufacturer pursuant to Section 5 or a similar statute of any other state, unless the nature of the nonconformity experienced by the original buyer or lessee is clearly and conspicuously disclosed to the prospective buyer, lessee, or transferee, the nonconformity is corrected, and the manufacturer warrants to the new buyer, lessee, or transferee in writing for a period of one year that the new motor vehicle or motor home is free of that nonconformity.

(2) Except for the requirement that the nature of the nonconformity be disclosed to the transferee, paragraph (1) does not apply to the transfer of a new motor vehicle or motor home to an educational institution if the purpose of the transfer is to make the new motor vehicle or motor home available for use in automotive repair courses.

Section 15. Automotive consumer notification.

(a) The General Assembly finds and declares all of the following:

(1) That the expansion of state warranty laws covering new and used motor vehicles and motor homes has given important and valuable protection to consumers.

(2) That, in states without this valuable warranty protection, used and new motor vehicles and motor homes are being resold in the marketplace without notice to the subsequent purchaser.

(3) That other states have addressed this problem by requiring notices on the title of new motor vehicles and motor homes or other notice procedures to warn consumers that the new motor vehicles or motor homes were repurchased by a dealer or manufacturer because the new motor vehicle or motor home could not be repaired in a reasonable length of time or a reasonable number of repair attempts or the dealer or manufacturer was not willing to repair the new motor vehicle or motor home.

(4) That these notices serve the interests of consumers who have a right to information relevant to their buying decisions.

(5) That the disappearance of these notices upon the transfer of title from another state to this State encourages the transport of "lemons" to this State for sale to the drivers of this State.

(b) As used in this Section, "dealer" means any person engaged in the business of selling, offering for sale, or negotiating the retail sale of, a used motor vehicle or motor home or selling new motor vehicles or motor homes as a broker or agent for another, including the officers, agents, and employees of the person and any combination or association of dealers.

(c) Any manufacturer who reacquires or assists a dealer or lienholder to reacquire a new motor vehicle or motor home registered in this State, any other state, or a federally administered district shall, prior to any sale, lease, or transfer of the new motor vehicle or motor home in this State, or prior to exporting the new motor vehicle or motor home to another state for sale, lease, or transfer if the new motor vehicle or motor home was registered in this State and reacquired pursuant to Section 5, cause the new motor vehicle or motor home to be retitled in the name of the manufacturer, request the Secretary of State to inscribe the manufacturer's certificate of title with the notation "Lemon Law Buyback", and affix a decal to the new motor vehicle or motor home in accordance with Section 25 if the manufacturer knew or should have known that the new motor vehicle or motor home is required by law to be replaced, accepted for restitution due to the failure of the manufacturer to conform the new motor vehicle or motor home to applicable written warranties pursuant to Section 5, or accepted for restitution by the manufacturer due to the failure of the manufacturer to conform the new motor vehicle or motor home to written warranties required by any other applicable law of the State, any other state, or federal law.

(d) Any manufacturer who reacquires or assists a dealer or lienholder to reacquire a new motor vehicle or motor home in response to a request by the buyer or lessee that the new motor vehicle or motor home be either replaced or accepted for restitution because the new motor vehicle or motor home did not conform to written warranties shall, prior to the sale, lease, or other transfer of the new motor vehicle or motor home, execute and deliver to the subsequent transferee a notice and obtain the transferee's written acknowledgment of a notice, as prescribed by Section 20.

(e) Any person, including any dealer, who acquires a new motor vehicle or motor home for resale and knows or should have known that the new motor vehicle or motor home was reacquired by the manufacturer of the new motor vehicle or motor home in response to a request by the last retail owner or lessee of the new motor vehicle or motor home that it be replaced or accepted for restitution because the new motor vehicle or motor home did not conform to written warranties shall, prior to the sale, lease, or other transfer, execute and deliver to the subsequent transferee a notice and obtain the transferee's written acknowledgment of a notice, as prescribed by Section 20.

(f) Any person, including any manufacturer or dealer, who sells, leases, or transfers ownership of a new motor vehicle or motor home when the new motor vehicle's or motor home's certificate of title is inscribed with the notation "Lemon Law Buyback" shall, prior to the sale, lease, or ownership transfer of the new motor vehicle or motor home, provide the transferee with a disclosure statement signed by the transferee that states: "THIS NEW MOTOR VEHICLE OR MOTOR HOME WAS REPURCHASED BY ITS MANUFACTURER DUE TO A DEFECT IN THE NEW MOTOR VEHICLE OR MOTOR HOME VEHICLE PURSUANT TO CONSUMER WARRANTY LAWS. THE TITLE TO THIS NEW MOTOR VEHICLE OR MOTOR HOME HAS BEEN PERMANENTLY BRANDED WITH THE NOTATION "LEMON LAW BUYBACK"."

(g) The disclosure requirements in subsections (d), (e), and (f) are cumulative with all other consumer notice requirements and do not relieve any person, including any dealer or manufacturer, from complying with any other applicable law, including any requirement of subsection (d) of Section 10.

Section 20. Warranty buyback notice.

(a) The notice required in subsections (d) and (e) of Section 15 shall be prepared by the manufacturer of the reacquired new motor vehicle a motor home and shall disclose all of the following:

(1) Year, make, model, and vehicle identification number of the new motor vehicle or motor home.

(2) Whether the title to the new motor vehicle or motor home has been inscribed with the notation "Lemon Law Buyback".

(3) The nature of each nonconformity reported by the original buyer or lessee of the new motor vehicle or motor home.

(4) Repairs, if any, made to the new motor vehicle or motor home in an attempt to correct each nonconformity reported by the original buyer or lessee.

(b) The notice shall be on a form 8 1/2 x 11 inches in size and printed in no smaller than 10-point black type on a white background. The form shall only contain the following information prior to it being filled out by the manufacturer:

WARRANTY BUYBACK NOTICE (Check One) /. . ./ This new motor vehicle or motor home was repurchased by the manufacturer after the last retail owner or lessee requested its repurchase due to the problem(s) listed below. /. . ./ THIS VEHICLE WAS REPURCHASED BY ITS MANUFACTURER DUE TO A DEFECT IN THE VEHICLE PURSUANT TO CONSUMER WARRANTY LAWS. THE TITLE TO THIS VEHICLE HAS BEEN PERMANENTLY BRANDED WITH THE NOTATION "LEMON LAW BUYBACK." Under Illinois law, the manufacturer must warrant to you, for a one-year period, that the vehicle is free of the problem(s) listed below.

V.I.N: ........... Year: ..... Make: ...... Model: ......

(c) The manufacturer shall provide an executed copy of the notice to the manufacturer's transferee. Each transferee, including a dealer, to whom the new motor vehicle or motor home is transferred prior to its sale to a retail buyer or lessee shall be provided an executed copy of the notice by the previous transferor.

Section 25. Lemon decal.

(a) The decal required by subsection (c) of Section 15 to be affixed by a manufacturer to a new motor vehicle or motor home, shall be affixed to the left front door frame of the new motor vehicle or motor home, or, if the new motor vehicle or motor home does not have a left front door frame, it shall be affixed in a location designated by the Secretary of State. The decal shall specify that title to new the motor vehicle or motor home has been inscribed with the notation "Lemon Law Buyback" and shall be affixed to the new motor vehicle or motor home in a manner prescribed by the Secretary of State.

(b) No person shall knowingly remove or alter any decal affixed to a new motor vehicle or motor home pursuant to subsection (a), whether or not licensed under the Illinois Vehicle Code.

Section 30. Remedies.

(a) Any buyer of consumer goods who is damaged by a failure to comply with any obligation under this Act or under an implied or written warranty or service contract may bring an action for the recovery of damages and other legal and equitable relief.

(b) The measure of the buyer's damages in an action under this Section shall include the rights of replacement or reimbursement as set forth in Section 5, and the following:

(1) Where the buyer has rightfully rejected or justifiably revoked acceptance of the goods or has exercised any right to cancel the sale, Sections 2-711, 2-712, and 2-713 of the Uniform Commercial Code shall apply.

(2) Where the buyer has accepted the goods, Sections 2-714 and 2-715 of the Uniform Commercial Code shall apply, and the measure of damages shall include the cost of repairs necessary to make the goods conform.

(c) If the buyer establishes that the failure to comply was willful, the judgment may include, in addition to the amounts recovered under subsection (a), a civil penalty which shall not exceed 2 times the amount of actual damages. This subsection shall not apply in any class action under Section 2-404 of the Code of Civil Procedure or with respect to a claim based solely on a breach of an implied warranty.

(d) If the buyer prevails in an action under this Section, including before a qualified third-party dispute resolution process, the buyer shall be allowed by the court to recover as part of the judgment a sum equal to the aggregate amount of costs and expenses, including attorney's fees based on actual time expended, determined by the court to have been reasonably incurred by the buyer in connection with the commencement and prosecution of such action.

(e) (1) Except as otherwise provided in this subsection, if the buyer establishes a violation of Section 5, the buyer shall recover damages and reasonable attorney's fees and costs, and may recover a civil penalty of up to 2 times the amount of damages.

(2) If the manufacturer maintains a qualified third-party dispute resolution process which substantially complies with Section 10, the manufacturer shall not be liable for any civil penalty pursuant to this subsection.

(3) After the occurrence of the events giving rise to the presumption established in subsection (a) of Section 10, the buyer may serve upon the manufacturer a written notice requesting that the manufacturer comply with Section 5. If the buyer fails to serve the notice, the manufacturer shall not be liable for a civil penalty pursuant to this subsection.

(4) If the buyer serves the notice described in paragraph (3) and the manufacturer complies with Section 5 within 30 days of the service of that notice, the manufacturer shall not be liable for a civil penalty pursuant to this subsection.

(5) If the buyer recovers a civil penalty under subsection (c), the buyer may not also recover a civil penalty under this subsection for the same violation.

Section 35. Third-party dispute resolution process certification program; fund.

(a) The Attorney General shall establish a program for certifying each third-party dispute resolution process used for the arbitration of disputes pursuant to subsection (b) of Section 10. In establishing the program, the Attorney General shall do all of the following:

(1) Prescribe and provide forms to be used to apply for certification under this Act.

(2) Establish a set of minimum standards which shall be used to determine whether a third-party dispute resolution process is in substantial compliance with subsection (c) of Section 10.

(3) Prescribe the information which each manufacturer, or other entity, that operates a third-party dispute resolution process shall provide the Attorney General in the application for certification. In prescribing the information to accompany the application for certification, the Attorney General shall require the manufacturer, or other entity, to provide only that information which the Attorney General finds is reasonably necessary to enable the Attorney General to determine whether the third-party dispute resolution process is in substantial compliance with subsection (c) of Section 10.

(4) Prescribe the information that each qualified third-party dispute resolution process shall provide the Attorney General, and the time intervals at which the information shall be required, to enable the Attorney General to determine whether the qualified third-party dispute resolution process continues to operate in substantial compliance with subsection (c) of Section 10.

(b)(1) Each manufacturer may establish, or otherwise make available to buyers or lessees of new motor vehicles or motor homes, a qualified third-party dispute resolution process for the resolution of disputes pursuant to subsection (b) of Section 10. A manufacturer that itself operates the third-party dispute resolution process shall apply to the Attorney General for certification of that process. If the manufacturer makes the third-party dispute resolution process available to buyers or lessees of new motor vehicles or motor homes through contract or other arrangement with another entity, that entity shall apply to the Attorney General for certification. An entity that operates a third-party dispute resolution process for more than one manufacturer shall make a separate application for certification for each manufacturer that uses that entity's third-party dispute resolution process. The application for certification shall be accompanied by the information prescribed by the Attorney General.

(2) The Attorney General shall review the application and accompanying information and, after conducting an onsite inspection, shall determine whether the third-party dispute resolution process is in substantial compliance with subsection (c) of Section 10 and this Section. If the Attorney General determines that the process is in substantial compliance, the Attorney General shall certify the process. If the Attorney General determines that the process is not in substantial compliance, the Attorney General shall deny certification and shall state, in writing, the reasons for denial and the modifications in the operation of the process that are required in order for the process to be certified.

(3) The Attorney General shall make a final determination whether to certify a third-party dispute resolution process or to deny certification not later than 90 calendar days following the date the Attorney General accepts the application for certification as complete.

(c)(1) The Attorney General, in accordance with the time intervals prescribed pursuant to paragraph (4) of subsection (a), but at least once annually, shall review the operation and performance of each qualified third-party dispute resolution process and determine, using the information provided the Attorney General as prescribed pursuant to paragraph (4) of subsection (a) and the monitoring and inspection information described in paragraph (3) of subsection (d), whether the process is operating in substantial compliance with subsection (c) of Section 10 and this Section. If the Attorney General determines that the process is in substantial compliance, the certification shall remain in effect.

(2) If the Attorney General determines that the process is not in substantial compliance with subsection (c) of Section 10 or this Section, the Attorney General shall issue a notice of decertification to the entity which operates the process and shall send a copy of that notice to any manufacturer affected by the decertification. The notice of decertification shall state the reasons for the issuance of the notice and prescribe the modifications in the operation of the process that are required in order for the process to retain its certification.

(3) A notice of decertification shall take effect 180 calendar days following the date the notice is served on the manufacturer, or other entity, which uses the process that the Attorney General has determined is not in substantial compliance with subsection (c) of Section 10 or this Section. The Attorney General shall withdraw the notice of decertification prior to its effective date if the Attorney General determines, after a public hearing, that the manufacturer, or other entity, which uses the process has made the modifications in the operation of the process required in the notice of decertification and is in substantial compliance with subsection (c) of Section 10 and this Section.

(d) In addition to any other requirements of this Section, the Attorney General shall do all of the following:

(1) Establish procedures to assist owners or lessees of new motor vehicles or motor homes who have complaints regarding the operation of a qualified third-party dispute resolution process.

(2) Establish methods for measuring customer satisfaction and to identify violations of this Section, which shall include an annual random postcard or telephone survey by the Attorney General of the customers of each qualified third-party dispute resolution process.

(3) Monitor and inspect, on a regular basis, qualified third-party dispute resolution processes to determine whether they continue to meet the standards for certification. Monitoring and inspection shall include, but not be limited to, all of the following:

(A) Onsite inspections of each qualified third-party dispute resolution process not less frequently than twice annually.

(B) Investigation of complaints from consumers regarding the operation of qualified third-party dispute resolution processes and analyses of representative samples of complaints against each process.

(C) Analyses of the annual surveys required by paragraph (2).

(5) Submit a biennial report to the General Assembly evaluating the effectiveness of this Section, make available to the public summaries of the statistics and other information supplied by each qualified third-party dispute resolution process, and publish educational materials regarding the purposes of this Section.

(6) Adopt rules as necessary and appropriate to implement this Section and subsection (c) of Section 10.

(7) Protection of the public shall be the highest priority for the Attorney General in exercising its certification, regulatory, and disciplinary functions. Whenever the protection of the public is inconsistent with other interests sought to be promoted, the protection of the public shall be paramount.

(e) The Secretary of State shall, in accordance with the procedures prescribed in this subsection, administer the collection of fees for the purposes of fully funding the administration of this subsection.

(1) Fees collected pursuant to this subsection shall be deposited into the Motor Vehicle Dispute Resolution Certification Fund, a special fund created in the State treasury, and shall be available, upon appropriation by the General Assembly, exclusively to pay the expenses incurred by the Attorney General in administering this Section. If, at the conclusion of any fiscal year, the amount of fees collected exceeds the amount of expenditures for that purpose during that fiscal year, the surplus in the Dispute Resolution Certification Fund shall be carried forward into the succeeding fiscal year.

(2) Beginning July 1, 2022, and on or before May 1 of each calendar year thereafter, every manufacturer shall file with the Secretary of State a statement of the number of new motor vehicles and motor homes sold, leased, or otherwise distributed by or for the manufacturer in this State during the preceding calendar year, and shall, upon written notice delivered to the manufacturer by certified mail, return receipt requested, pay to the Secretary of State a fee, not to exceed $1 for each new motor vehicle or motor home sold, leased, or distributed by or for the manufacturer in this State during the preceding calendar year. The total fee paid by each manufacturer shall be rounded to the nearest dollar. Not more than $1 shall be charged, collected, or received from any one or more manufacturers pursuant to this subsection with respect to the same new motor vehicle or motor home.

(3) The fee required by paragraph (2) is due and payable not later than 30 days after the manufacturer has received notice of the amount due and is delinquent after that time. A penalty of 10% of the amount delinquent shall be added to that amount, if the delinquency continues for more than 30 days. If a manufacturer fails to file the statement required by paragraph (2) by the date specified, the Secretary of State shall assess the amount due from the manufacturer by using as the number of new motor vehicles or motor homes sold, leased, or otherwise distributed by or for the manufacturer in this State during the preceding calendar year the total number of new registrations of all new motor vehicles or motor homes sold, leased, or otherwise distributed by or for the manufacturer during the preceding calendar year.

(4) On or before February 1 of each year, the Attorney General shall notify the Secretary of State of the dollar amount necessary to fully fund the program established by this Section during the following fiscal year. The Secretary of State shall use this information in calculating the amounts of the fees to be collected from manufacturers pursuant to this subsection.

(5) The Secretary of State may adopt rules to implement this subsection. The rules shall include, at a minimum, a formula for calculating the fee, established pursuant to paragraph (2), for each new motor vehicle and motor home and the total amount of fees to be collected from each manufacturer.

As used in this subsection, "new motor vehicle" means a new passenger or commercial motor vehicle of a kind that is required to be registered under the Illinois Vehicle Code, but the term does not include a motorcycle, a motor home, or any vehicle whose gross weight exceeds 10,000 pounds.

Section 40. Sales and use tax reimbursement.

(a) Notwithstanding any applicable provisions imposing a tax amount on manufacturers under the Retailers' Occupation Tax Act, the Use Tax Act, the Service Occupation Tax Act, or the Service Use Tax Act, the Department of Revenue shall reimburse the manufacturer of a new motor vehicle or motor home for an amount equal to the sales tax or use tax which the manufacturer pays to or for the buyer or lessee when providing a replacement vehicle pursuant to paragraph (1) of Section 5 or includes in making restitution to the buyer or lessee pursuant to paragraph (2) of Section 5 when the manufacturer provides satisfactory proof that it has complied with subsection (c) of Section 15, and satisfactory proof is provided for one of the following:

(1) The retailer of the new motor vehicle or motor home for which the manufacturer is making restitution has reported and paid the sales tax on the gross receipts from the sale of that motor vehicle.

(2) The buyer of the new motor vehicle or motor home has paid the use tax on the sales price for the storage, use, or other consumption of that new motor vehicle or motor home in this State.

(3) The lessee of the new motor vehicle or motor home has paid the use tax on the rentals payable from the lease of that new motor vehicle or motor home.

(b) The Department of Revenue may adopt rules and regulations to carry out, facilitate compliance with, or prevent circumvention or evasion of this Section.

(c) This Section shall not change the application of the sales and use tax to the gross receipts, the rentals payable, and the sales price from the sale, lease, and the storage, use, or other consumption, in this State, of tangible personal property pursuant to the Retailers' Occupation Tax Act, the Use Tax Act, the Service Occupation Tax Act, or the Service Use Tax Act.

(d) The manufacturer's claim for reimbursement and the Department of Revenue's approval or denial of the claim shall be subject to the applicable provisions under the Retailers' Occupation Tax Act, the Use Tax Act, the Service Occupation Tax Act, or the Service Use Tax Act concerning claims for a credit or refund of erroneously paid amounts, except provisions relating to accrued interest at the rate and in the manner specified in the Uniform Penalty and Interest Act, insofar as those provisions are not inconsistent with this Section.

(e) For purposes of this Section, the amount of use tax that the Department of Revenue is required to reimburse the manufacturer shall be limited to the amount of use tax the manufacturer is required to pay to or for the lessee pursuant to Section 5.

Section 45. Prohibitions.

(a) Any automobile manufacturer, importer, distributor, dealer, or lienholder who reacquires, or who assists in reacquiring, a new motor vehicle or motor home, whether by judgment, decree, arbitration award, settlement agreement, or voluntary agreement, is prohibited from doing either of the following:

(1) Requiring, as a condition of the reacquisition of the new motor vehicle or motor home, that a buyer or lessee who is a resident of this State agree not to disclose the problems with the new motor vehicle or motor home experienced by the buyer or lessee or the nonfinancial terms of the reacquisition.

(2) Including, in any release or other agreement, whether prepared by the manufacturer, importer, distributor, dealer, or lienholder, for signature by the buyer or lessee, a confidentiality clause, gag clause, or similar clause prohibiting the buyer or lessee from disclosing information to anyone about the problems with the new motor vehicle or motor home, or the nonfinancial terms of the reacquisition of the new motor vehicle or motor home by the manufacturer, importer, distributor, dealer, or lienholder.

(b) Any confidentiality clause, gag clause, or similar clause in such a release or other agreement in violation of this Section shall be null and void as against the public policy of this State.

(c) Nothing in this Section is intended to prevent any confidentiality clause, gag clause, or similar clause regarding the financial terms of the reacquisition of the new motor vehicle or motor home.

Section 900. The State Finance Act is amended by adding Section 5.935 as follows:

(30 ILCS 105/5.935 new)

Sec. 5.935. The Motor Vehicle Dispute Resolution Certification Fund.

Section 905. The Retailers' Occupation Tax Act is amended by changing Section 6 as follows:

(35 ILCS 120/6) (from Ch. 120, par. 445)

Sec. 6. Credit memorandum or refund. If it appears, after claim therefor filed with the Department, that an amount of tax or penalty or interest has been paid which was not due under this Act, whether as the result of a mistake of fact or an error of law, except as hereinafter provided, then the Department shall issue a credit memorandum or refund to the person who made the erroneous payment or, if that person died or became a person under legal disability, to his or her legal representative, as such. For purposes of this Section, the tax is deemed to be erroneously paid by a retailer when the manufacturer of a new motor vehicle or motor home sold by the retailer accepts the return of that new motor vehicle or motor home automobile and refunds to the purchaser the selling price of that new motor vehicle or motor home as provided in the New Vehicle Buyer Protection Act of 2021. When a new motor vehicle or motor home is returned for a refund of the purchase price under the New Vehicle Buyer Protection Act of 2021, the Department shall issue a credit memorandum or a refund for the amount of tax paid by the retailer under this Act attributable to the initial sale of that new motor vehicle or motor home. Claims submitted by the retailer are subject to the same restrictions and procedures provided for in this Act. If it is determined that the Department should issue a credit memorandum or refund, the Department may first apply the amount thereof against any tax or penalty or interest due or to become due under this Act or under the Use Tax Act, the Service Occupation Tax Act, the Service Use Tax Act, any local occupation or use tax administered by the Department, Section 4 of the Water Commission Act of 1985, subsections (b), (c) and (d) of Section 5.01 of the Local Mass Transit District Act, or subsections (e), (f) and (g) of Section 4.03 of the Regional Transportation Authority Act, from the person who made the erroneous payment. If no tax or penalty or interest is due and no proceeding is pending to determine whether such person is indebted to the Department for tax or penalty or interest, the credit memorandum or refund shall be issued to the claimant; or (in the case of a credit memorandum) the credit memorandum may be assigned and set over by the lawful holder thereof, subject to reasonable rules of the Department, to any other person who is subject to this Act, the Use Tax Act, the Service Occupation Tax Act, the Service Use Tax Act, any local occupation or use tax administered by the Department, Section 4 of the Water Commission Act of 1985, subsections (b), (c) and (d) of Section 5.01 of the Local Mass Transit District Act, or subsections (e), (f) and (g) of Section 4.03 of the Regional Transportation Authority Act, and the amount thereof applied by the Department against any tax or penalty or interest due or to become due under this Act or under the Use Tax Act, the Service Occupation Tax Act, the Service Use Tax Act, any local occupation or use tax administered by the Department, Section 4 of the Water Commission Act of 1985, subsections (b), (c) and (d) of Section 5.01 of the Local Mass Transit District Act, or subsections (e), (f) and (g) of Section 4.03 of the Regional Transportation Authority Act, from such assignee. However, as to any claim for credit or refund filed with the Department on and after each January 1 and July 1 no amount of tax or penalty or interest erroneously paid (either in total or partial liquidation of a tax or penalty or amount of interest under this Act) more than 3 years prior to such January 1 and July 1, respectively, shall be credited or refunded, except that if both the Department and the taxpayer have agreed to an extension of time to issue a notice of tax liability as provided in Section 4 of this Act, such claim may be filed at any time prior to the expiration of the period agreed upon.

No claim may be allowed for any amount paid to the Department, whether paid voluntarily or involuntarily, if paid in total or partial liquidation of an assessment which had become final before the claim for credit or refund to recover the amount so paid is filed with the Department, or if paid in total or partial liquidation of a judgment or order of court. No credit may be allowed or refund made for any amount paid by or collected from any claimant unless it appears (a) that the claimant bore the burden of such amount and has not been relieved thereof nor reimbursed therefor and has not shifted such burden directly or indirectly through inclusion of such amount in the price of the tangible personal property sold by him or her or in any manner whatsoever; and that no understanding or agreement, written or oral, exists whereby he or she or his or her legal representative may be relieved of the burden of such amount, be reimbursed therefor or may shift the burden thereof; or (b) that he or she or his or her legal representative has repaid unconditionally such amount to his or her vendee (1) who bore the burden thereof and has not shifted such burden directly or indirectly, in any manner whatsoever; (2) who, if he or she has shifted such burden, has repaid unconditionally such amount to his own vendee; and (3) who is not entitled to receive any reimbursement therefor from any other source than from his or her vendor, nor to be relieved of such burden in any manner whatsoever. No credit may be allowed or refund made for any amount paid by or collected from any claimant unless it appears that the claimant has unconditionally repaid, to the purchaser, any amount collected from the purchaser and retained by the claimant with respect to the same transaction under the Use Tax Act.

Any credit or refund that is allowed under this Section shall bear interest at the rate and in the manner specified in the Uniform Penalty and Interest Act.

In case the Department determines that the claimant is entitled to a refund, such refund shall be made only from the Aviation Fuel Sales Tax Refund Fund or from such appropriation as may be available for that purpose, as appropriate. If it appears unlikely that the amount available would permit everyone having a claim allowed during the period covered by such appropriation or from the Aviation Fuel Sales Tax Refund Fund, as appropriate, to elect to receive a cash refund, the Department, by rule or regulation, shall provide for the payment of refunds in hardship cases and shall define what types of cases qualify as hardship cases.

If a retailer who has failed to pay retailers' occupation tax on gross receipts from retail sales is required by the Department to pay such tax, such retailer, without filing any formal claim with the Department, shall be allowed to take credit against such retailers' occupation tax liability to the extent, if any, to which such retailer has paid an amount equivalent to retailers' occupation tax or has paid use tax in error to his or her vendor or vendors of the same tangible personal property which such retailer bought for resale and did not first use before selling it, and no penalty or interest shall be charged to such retailer on the amount of such credit. However, when such credit is allowed to the retailer by the Department, the vendor is precluded from refunding any of that tax to the retailer and filing a claim for credit or refund with respect thereto with the Department. The provisions of this amendatory Act shall be applied retroactively, regardless of the date of the transaction.

(Source: P.A. 101-10, eff. 6-5-19.)

Section 910. The Illinois Vehicle Code is amended by changing Section 5-104.2 as follows:

(625 ILCS 5/5-104.2)

Sec. 5-104.2. Nonconforming vehicles; sale.

(a) Every manufacturer shall be prohibited from reselling any new motor vehicle or motor home that has been finally ordered, determined, or adjudicated as having a nonconformity under the New Vehicle Buyer Protection Act, the New Vehicle Buyer Protection Act of 2021, or a similar law of any state, territory, or country, and that the manufacturer repurchased or replaced because of the nonconformity, unless the manufacturer has corrected the nonconformity and issues a disclosure statement prior to resale stating that the new motor vehicle or motor home was repurchased or replaced under the New Vehicle Buyer Protection Act, the New Vehicle Buyer Protection Act of 2021, or similar law of any other state, territory, or country; identifying the nonconformity; and warranting that the nonconformity has been corrected. The disclosure statement must accompany the new motor vehicle or motor home through the first retail purchase.

(b) "Nonconformity" refers to a new motor vehicle's or motor home's failure to conform to all written express warranties applicable to the new motor vehicle or motor home, which failure substantially impairs the use, market value, or safety of the new motor vehicle or motor home.

(c) The disclosure statement referred to in subsection (a) shall be in substantially the same form as below:

"IMPORTANT

Vehicle Identification Number (VIN): (Insert VIN Number); Year: (Insert Year); Make (Insert Make); Model: (Insert Model). This vehicle was previously sold as new. It was subsequently ordered as having a nonconformity by final decision of court proceeding or State run arbitration. It was subsequently repurchased by its manufacturer because it did not conform to the manufacturer's written express warranty and the nonconformity was not cured within a reasonable time as provided by Illinois law. The following nonconformities have been corrected (a minimum of 5 numbered lines shall be provided to describe the nonconformity or nonconformities)."

The customer shall sign the disclosure statement. This disclosure language shall be in at least 8-point type.

(Source: P.A. 88-415.)

(815 ILCS 380/Act rep.)

Section 915. The New Vehicle Buyer Protection Act is repealed.