HB4083 93RD GENERAL ASSEMBLY

LRB093 14547 WGH 40038 b

93RD GENERAL ASSEMBLY
State of Illinois
2003 and 2004
HB4083

Introduced 1/15/2004, by Maria Antonia Berrios

SYNOPSIS AS INTRODUCED:

New Act
30 ILCS 105/5.625 new
35 ILCS 120/6	from Ch. 120, par. 445
625 ILCS 5/5-104.2
625 ILCS 5/5-501	from Ch. 95 1/2, par. 5-501
815 ILCS 380/8	from Ch. 121 1/2, par. 1208

Creates the New Vehicle Buyer Protection Act of 2004. Provides that qualified third-party dispute resolution processes may be used to resolve certain disputes between certain new vehicle buyers and manufacturers concerning a nonconformity that substantially impairs the use, value, or safety of a new vehicle. Provides that, if a qualified third-party dispute resolution process does not exist, or the new vehicle buyer is dissatisfied with that third-party decision, or the manufacturer or its agent does not fulfill the terms of a decision after it is accepted by the buyer, the buyer may: (i) assert a presumption that a reasonable number of attempts have been made to conform the vehicle to the applicable express warranties in accordance with criteria set forth in the Act and (ii) seek replacement of the vehicle or restitution for the price of the vehicle and damages, attorney's fees, costs, and a civil penalty. Provides that no person may sell, lease, or transfer a motor vehicle that was returned to a manufacturer under the Act or a similar law of any other state unless the vehicle's nonconformity 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 motor vehicle is free of that nonconformity, except as otherwise specified. Provides that the Attorney General shall establish a program for certifying, reviewing, and decertifying third-party dispute resolution processes established by new vehicle manufacturers or their agents. Provides that the Secretary of State may suspend the license of a manufacturer or distributor for its failure to honor a decision of a qualified third-party dispute resolution process. Provides that the Secretary of State shall collect fees from manufacturers for the administration of the program and that the fees shall be deposited in the new Third-Party Dispute Resolution Fund. Applies to new motor vehicles beginning with the model year following the effective date of the Act. Amends the State Finance Act, the Retailers' Occupation Tax Act, and the Illinois Vehicle Code to conform to the new Act. Amends the existing New Vehicle Buyer Protection Act to provide that it does not apply to vehicles to which the new Act applies. Effective January 1, 2005.

FISCAL NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning motor vehicles.

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

Article 1

Section 1-1. Short title. This Act may be cited as the New Vehicle Buyer Protection Act of 2004.

Article 5

Section 5-5. Definitions. As used in this Article:

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

"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, 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 that 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.

"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.

Section 5-10. Presumption. 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, 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 vehicle 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 vehicle 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 under subdivisions (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 Act, including the requirement that the buyer must notify the manufacturer directly under subdivisions (1) and (2). The notification, if required, shall be sent to the address, if any, specified clearly and conspicuously by the manufacturer in the 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.

Section 5-15. Assertion of presumption; qualified third-party dispute resolution process. 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 Section 5-10 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 Section 5-20. 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 Section 5-10 in an action to enforce the buyer's rights under Section 5-30. 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 law 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.

Section 5-20. Elements of qualified third-party dispute resolution process. A qualified third-party dispute resolution process is 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.

(2) Renders decisions that 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, 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 motor vehicle be replaced if the buyer consents to this remedy or that restitution be made to the buyer, to replace the motor vehicle or make restitution in accordance with Section 5-30.

(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 motor vehicle, 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, 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 under this Section, decisions of the process must consider or provide remedies in the form of awards of punitive damages, attorney's fees, or consequential damages under Section 5-35 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 also allowed to participate. Nothing in this subdivision (8) prohibits any member of an arbitration board from deciding a dispute.

(9) Obtains and maintains certification under Article 10.

Section 5-25. Sale of transferred vehicles.

(a) Except as provided in subsection (b), no person may sell, either at wholesale or retail, lease, or transfer a motor vehicle transferred by a buyer or lessee to a manufacturer under Section 5-30 or a similar law 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 motor vehicle is free of that nonconformity.

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

Section 5-30. Replacement or restitution.

(a) If the manufacturer or its representative in this State is unable to service or repair a new motor vehicle to conform to the applicable express warranties after a reasonable number of attempts, the manufacturer shall either promptly replace the new motor vehicle in accordance with subsection (b) or promptly make restitution to the buyer in accordance with subsection (c). However, the buyer may elect restitution in lieu of replacement, and in no event shall the buyer be required by the manufacturer to accept a replacement vehicle.

(b) In the case of replacement, the manufacturer shall replace the buyer's vehicle with a new motor vehicle substantially identical to the vehicle replaced. The replacement vehicle shall be accompanied by all express and implied warranties that normally accompany new motor vehicles of that specific kind. The manufacturer also shall pay for, or to, the buyer the amount of any 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 5-35, including, but not limited to, reasonable repair, towing, and rental car costs actually incurred by the buyer.

(c) 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 nonmanufacturer items installed by a dealer or the buyer, and including any collateral charges such as use tax, license fees, registration fees, and other official fees, plus any incidental damages to which the buyer is entitled under Section 5-35, including, but not limited to, reasonable repair, towing, and rental car costs actually incurred by the buyer.

(d) When the manufacturer replaces the new motor vehicle under subsection (b), the buyer shall only be liable to pay the manufacturer an amount directly attributable to use by the buyer of the replaced vehicle before 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 under subsection (c), 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 before 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 a buyer shall be determined by multiplying the actual price of the new motor vehicle 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 before 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. Nothing in this Section in any way limits the rights or remedies available to the buyer under any other law.

Section 5-35. Damages; attorney's fees and costs; civil penalty.

(a) Except as otherwise provided in this Section, if the buyer establishes a violation of Section 5-30, 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.

(b) If the manufacturer maintains a qualified third-party dispute resolution process which substantially complies with this Act, the manufacturer shall not be liable for any civil penalty under this Section.

(c) After the occurrence of the events giving rise to the presumption established in Section 5-30, the buyer may serve upon the manufacturer a written notice requesting that the manufacturer comply with Section 5-30. If the buyer fails to serve the notice, the manufacturer is not liable for a civil penalty under this Section.

(d) If the buyer serves the notice described in subsection (c) and the manufacturer complies with Section 5-30 within 30 days of the service of that notice, the manufacturer is not liable for a civil penalty under this Section.

Article 10

Section 10-5. Definitions. As used in this Article, unless the context requires otherwise:

Except as otherwise provided in Section 10-30, "new motor vehicle" means a new motor vehicle as defined in Article 5.

"Manufacturer" a manufacturer or distributor as defined in Section 5-109 of the Illinois Vehicle Code.

"Qualified third party dispute resolution process" means a third party dispute resolution process which operates in compliance with Section 5-20 and this Article and which has been certified by the Attorney General under this Article.

Section 10-10. Program for certifying third-party dispute resolution process. The Attorney General shall establish a program for certifying each third-party dispute resolution process used for the arbitration of disputes under Section 5-15. 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 Article.

(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 Section 5-20 and this Article.

(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 Section 5-20 and this Article.

(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 Section 5-20 and this Article.

Section 10-15. Establishment of qualified third-party dispute resolution process.

(a) Each manufacturer may establish, or otherwise make available to buyers or lessees of new motor vehicles, a qualified third-party dispute resolution process for the resolution of disputes under Section 5-15. 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 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.

(b) 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 Section 5-20 and this Article. 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.

(c) 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.

Section 10-20. Review.

(a) The Attorney General, in accordance with the time intervals set forth in subdivision (4) of Section 10-10, 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 under subdivision (4) of Section 10-10 and the monitoring and inspection information described in subsection (c) of Section 10-25, whether the process is operating in substantial compliance with Section 5-20 and this Article. If the Attorney General determines that the process is in substantial compliance, the certification shall remain in effect.

(b) If the Attorney General determines that the process is not in substantial compliance with Section 5-20 or this Article, 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 for the process to retain its certification.

(c) 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 Section 5-20 or this Article. The Attorney General shall withdraw the notice of decertification before 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 Section 5-20 and this Article.

Section 10-25. Duties of Attorney General.

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

(1) Establish procedures to assist owners or lessees of new motor vehicles 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 Article, 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 subdivision (2).

(4) Notify the Secretary of State of the failure of a manufacturer to honor a decision of a qualified third-party dispute resolution process to enable the Secretary of State to take appropriate enforcement action against the manufacturer under Section 5-501 of the Illinois Vehicle Code.

(5) Submit a biennial report to the General Assembly evaluating the effectiveness of this Article, 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 Article.

(6) Adopt rules as necessary and appropriate to implement this Article and Section 5-20.

(b) 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.

Section 10-30. Fees.

(a) The Secretary of State shall, in accordance with this Section, administer the collection of fees for the purposes of fully funding the administration of this Article.

(b) Fees collected under this Section shall be deposited in the Third-Party Dispute Resolution Fund, a special fund which is created in the State treasury and shall be used, subject to appropriation, exclusively to pay the expenses incurred by the Attorney General in administering this Article and the expenses incurred by the Secretary of State in collecting the fees.

(c) Beginning July 1, 2006, 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 motor vehicles 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 motor vehicle sold, leased, or distributed by or for the manufacturer in this State during the preceding calendar year. Not more than $1 shall be charged, collected, or received from any one or more manufacturers under this subsection (c) with respect to the same motor vehicle.

(d) The fee required by subsection (c) 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 subdivision (b) by the date specified, the Secretary of State shall assess the amount due from the manufacturer by using as the number of motor vehicles 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 motor vehicles sold, leased, or otherwise distributed by or for the manufacturer during the preceding calendar year.

(e) 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 Article 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 under this Section.

(f) As used in this Section, "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 "motor vehicle" does not include a motorcycle, a motor home, or any vehicle whose gross weight exceeds 10,000 pounds.

(g) The Secretary of State may adopt rules to implement this Section. The rules shall include, at a minimum, a formula for calculating the fee for each motor vehicle and the total amount of fees to be collected from each manufacturer.

Article 80

Section 80-5. Applicability. This Act applies to new motor vehicles beginning with the model year following the effective date of this Act.

Article 90

Section 90-5. The State Finance Act is amended by adding Section 5.625 as follows:

(30 ILCS 105/5.625 new)

Sec. 5.625. The Third-Party Dispute Resolution Fund.

Section 90-7. 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 motor vehicle sold by the retailer accepts the return of that automobile and refunds to the purchaser the selling price of that vehicle as provided in the New Vehicle Buyer Protection Act or the New Vehicle Buyer Protection Act of 2004. When a motor vehicle is returned for a refund of the purchase price under the New Vehicle Buyer Protection Act or the New Vehicle Buyer Protection Act of 2004, 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 vehicle. 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 such appropriation as may be available for that purpose. If it appears unlikely that the amount appropriated would permit everyone having a claim allowed during the period covered by such appropriation 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. 91-901, eff. 1-1-01.)

Section 90-10. The Illinois Vehicle Code is amended by changing Sections 5-104.2 and 5-501 as follows:

(625 ILCS 5/5-104.2)

Sec. 5-104.2. Nonconforming vehicles; sale.

(a) Every manufacturer shall be prohibited from reselling any motor vehicle that has been finally ordered, determined, or adjudicated as having a nonconformity under the New Vehicle Buyer Protection Act 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 vehicle was repurchased or replaced under the New Vehicle Buyer Protection Act 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 vehicle through the first retail purchase.

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

(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 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.

(d) The sale, lease, or transfer of motor vehicles that have been determined to have a nonconformity under the New Vehicle Buyer Protection Act of 2004 shall be governed by that Act.

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

(625 ILCS 5/5-501) (from Ch. 95 1/2, par. 5-501)

Sec. 5-501. Denial, suspension or revocation or cancellation of a license. (a) The license of a person issued under this Chapter may be denied, revoked or suspended if the Secretary of State finds that the applicant, or the officer, director, shareholder having a ten percent or greater ownership interest in the corporation, owner, partner, trustee, manager, employee or the licensee has:

1. Violated this Act;

2. Made any material misrepresentation to the Secretary of State in connection with an application for a license, junking certificate, salvage certificate, title or registration;

3. Committed a fraudulent act in connection with selling, bartering, exchanging, offering for sale or otherwise dealing in vehicles, chassis, essential parts, or vehicle shells;

4. As a new vehicle dealer has no contract with a manufacturer or enfranchised distributor to sell that new vehicle in this State;

5. Not maintained an established place of business as defined in this Code;

6. Failed to file or produce for the Secretary of State any application, report, document or other pertinent books, records, documents, letters, contracts, required to be filed or produced under this Code or any rule or regulation made by the Secretary of State pursuant to this Code;

7. Previously had, within 3 years, such a license denied, suspended, revoked, or cancelled under the provisions of subsection (c) (2) of this Section;

8. Has committed in any calendar year 3 or more violations, as determined in any civil or criminal proceeding, of any one or more of the following Acts:

a. the "Consumer Finance Act";

b. the "Consumer Installment Loan Act";

c. the "Retail Installment Sales Act";

d. the "Motor Vehicle Retail Installment Sales Act";

e. "An Act in relation to the rate of interest and other charges in connection with sales on credit and the lending of money", approved May 24, 1879, as amended;

f. "An Act to promote the welfare of wage-earners by regulating the assignment of wages, and prescribing a penalty for the violation thereof", approved July 1, 1935, as amended;

g. Part 8 of Article XII of the Code of Civil Procedure; or

h. the "Consumer Fraud Act";

9. Failed to pay any fees or taxes due under this Act, or has failed to transmit any fees or taxes received by him for transmittal by him to the Secretary of State or the State of Illinois;

10. Converted an abandoned vehicle;

11. Used a vehicle identification plate or number assigned to a vehicle other than the one to which originally assigned;

12. Violated the provisions of Chapter 5 of this Act, as amended;

13. Violated the provisions of Chapter 4 of this Act, as amended;

14. Violated the provisions of Chapter 3 of this Act, as amended;

15. Violated Section 21-2 of the Criminal Code of 1961, Criminal Trespass to Vehicles;

16. Made or concealed a material fact in connection with his application for a license;

17. Acted in the capacity of a person licensed or acted as a licensee under this Chapter without having a license therefor;

18. Failed to pay, within 90 days after a final judgment, any fines assessed against the licensee pursuant to an action brought under Section 5-404;

19. Willfully violated the terms of any warranty responsibilities as set forth in the New Vehicle Buyer Protection Act of 2004.

(b) In addition to other grounds specified in this Chapter, the Secretary of State, on complaint of the Department of Revenue, shall refuse the issuance of renewal of a license, or suspend or revoke such license, for any of the following violations of the "Retailers' Occupation Tax Act":

1. Failure to make a tax return;

2. The filing of a fraudulent return;

3. Failure to pay all or part of any tax or penalty finally determined to be due;

4. Failure to comply with the bonding requirements of the "Retailers' Occupation Tax Act".

(c) Cancellation of a license.

1. The license of a person issued under this Chapter may be cancelled by the Secretary of State prior to its expiration in any of the following situations:

A. When a license is voluntarily surrendered, by the licensed person; or

B. If the business enterprise is a sole proprietorship, which is not a franchised dealership, when the sole proprietor dies or is imprisoned for any period of time exceeding 30 days; or

C. If the license was issued to the wrong person or corporation, or contains an error on its face. If any person above whose license has been cancelled wishes to apply for another license, whether during the same license year or any other year, that person shall be treated as any other new applicant and the cancellation of the person's prior license shall not, in and of itself, be a bar to the issuance of a new license.

2. The license of a person issued under this Chapter may be cancelled without a hearing when the Secretary of State is notified that the applicant, or any officer, director, shareholder having a 10 per cent or greater ownership interest in the corporation, owner, partner, trustee, manager, employee or member of the applicant or the licensee has been convicted of any felony involving the selling, bartering, exchanging, offering for sale, or otherwise dealing in vehicles, chassis, essential parts, vehicle shells, or ownership documents relating to any of the above items.

(Source: P.A. 86-820.)

Section 90-15. The New Vehicle Buyer Protection Act is amended by changing Section 8 as follows:

(815 ILCS 380/8) (from Ch. 121 1/2, par. 1208)

Sec. 8. This Act shall apply to motor vehicles beginning with the model year following the effective date of this Act, except that this Act does not apply to any motor vehicle to which the New Vehicle Buyer Protection Act of 2004 applies.

(Source: P.A. 83-768.)

Article 99

Section 99-5. Effective date. This Act takes effect on January 1, 2005.