103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
HB1425

 

Introduced 1/31/2023, by Rep. David Friess

 

SYNOPSIS AS INTRODUCED:
 
625 ILCS 5/3-117.1  from Ch. 95 1/2, par. 3-117.1

    Amends the Certificate of Title Article of the Illinois Vehicle Code. In provisions concerning total loss claims for vehicles, provides that if the registered owner of a vehicle 9 model years of age or older does not agree to retain the vehicle, then the insurance company shall take possession of the vehicle.


LRB103 03727 BMS 48733 b

 

 

A BILL FOR

 

HB1425LRB103 03727 BMS 48733 b

1    AN ACT concerning transportation.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Vehicle Code is amended by
5changing Section 3-117.1 as follows:
 
6    (625 ILCS 5/3-117.1)  (from Ch. 95 1/2, par. 3-117.1)
7    Sec. 3-117.1. When junking certificates or salvage
8certificates must be obtained.
9    (a) Except as provided in Chapter 4 and Section 3-117.3 of
10this Code, a person who possesses a junk vehicle shall within
1115 days cause the certificate of title, salvage certificate,
12certificate of purchase, or a similarly acceptable
13out-of-state document of ownership to be surrendered to the
14Secretary of State along with an application for a junking
15certificate, except as provided in Section 3-117.2, whereupon
16the Secretary of State shall issue to such a person a junking
17certificate, which shall authorize the holder thereof to
18possess, transport, or, by an endorsement, transfer ownership
19in such junked vehicle, and a certificate of title shall not
20again be issued for such vehicle. The owner of a junk vehicle
21is not required to surrender the certificate of title under
22this subsection if (i) there is no lienholder on the
23certificate of title or (ii) the owner of the junk vehicle has

 

 

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1a valid lien release from the lienholder releasing all
2interest in the vehicle and the owner applying for the junk
3certificate matches the current record on the certificate of
4title file for the vehicle.
5    A licensee who possesses a junk vehicle and a Certificate
6of Title, Salvage Certificate, Certificate of Purchase, or a
7similarly acceptable out-of-state document of ownership for
8such junk vehicle, may transport the junk vehicle to another
9licensee prior to applying for or obtaining a junking
10certificate, by executing a uniform invoice. The licensee
11transferor shall furnish a copy of the uniform invoice to the
12licensee transferee at the time of transfer. In any case, the
13licensee transferor shall apply for a junking certificate in
14conformance with Section 3-117.1 of this Chapter. The
15following information shall be contained on a uniform invoice:
16        (1) The business name, address, and dealer license
17    number of the person disposing of the vehicle, junk
18    vehicle, or vehicle cowl;
19        (2) The name and address of the person acquiring the
20    vehicle, junk vehicle, or vehicle cowl and, if that person
21    is a dealer, the Illinois or out-of-state dealer license
22    number of that dealer;
23        (3) The date of the disposition of the vehicle, junk
24    vehicle, or vehicle cowl;
25        (4) The year, make, model, color, and description of
26    each vehicle, junk vehicle, or vehicle cowl disposed of by

 

 

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1    such person;
2        (5) The manufacturer's vehicle identification number,
3    Secretary of State identification number, or Illinois
4    State Police number for each vehicle, junk vehicle, or
5    vehicle cowl part disposed of by such person;
6        (6) The printed name and legible signature of the
7    person or agent disposing of the vehicle, junk vehicle, or
8    vehicle cowl; and
9        (7) The printed name and legible signature of the
10    person accepting delivery of the vehicle, junk vehicle, or
11    vehicle cowl.
12    The Secretary of State may certify a junking manifest in a
13form prescribed by the Secretary of State that reflects those
14vehicles for which junking certificates have been applied or
15issued. A junking manifest may be issued to any person and it
16shall constitute evidence of ownership for the vehicle listed
17upon it. A junking manifest may be transferred only to a person
18licensed under Section 5-301 of this Code as a scrap
19processor. A junking manifest will allow the transportation of
20those vehicles to a scrap processor prior to receiving the
21junk certificate from the Secretary of State.
22    (b) An application for a salvage certificate shall be
23submitted to the Secretary of State in any of the following
24situations:
25        (1) When an insurance company makes a payment of
26    damages on a total loss claim for a vehicle, the insurance

 

 

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1    company shall be deemed to be the owner of such vehicle and
2    the vehicle shall be considered to be salvage except that
3    ownership of (i) a vehicle that has incurred only hail
4    damage that does not affect the operational safety of the
5    vehicle or (ii) any vehicle 9 model years of age or older
6    may, by agreement between the registered owner and the
7    insurance company, be retained by the registered owner of
8    such vehicle; however, if the registered owner does not
9    agree to retain a vehicle 9 model years of age or older,
10    then the insurance company shall take possession of the
11    vehicle. The insurance company shall promptly deliver or
12    mail within 20 days the certificate of title along with
13    proper application and fee to the Secretary of State, and
14    a salvage certificate shall be issued in the name of the
15    insurance company. Notwithstanding the foregoing, an
16    insurer making payment of damages on a total loss claim
17    for the theft of a vehicle shall not be required to apply
18    for a salvage certificate unless the vehicle is recovered
19    and has incurred damage that initially would have caused
20    the vehicle to be declared a total loss by the insurer.
21        (1.1) When a vehicle of a self-insured company is to
22    be sold in the State of Illinois and has sustained damaged
23    by collision, fire, theft, rust corrosion, or other means
24    so that the self-insured company determines the vehicle to
25    be a total loss, or if the cost of repairing the damage,
26    including labor, would be greater than 70% of its fair

 

 

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1    market value without that damage, the vehicle shall be
2    considered salvage. The self-insured company shall
3    promptly deliver the certificate of title along with
4    proper application and fee to the Secretary of State, and
5    a salvage certificate shall be issued in the name of the
6    self-insured company. A self-insured company making
7    payment of damages on a total loss claim for the theft of a
8    vehicle may exchange the salvage certificate for a
9    certificate of title if the vehicle is recovered without
10    damage. In such a situation, the self-insured shall fill
11    out and sign a form prescribed by the Secretary of State
12    which contains an affirmation under penalty of perjury
13    that the vehicle was recovered without damage and the
14    Secretary of State may, by rule, require photographs to be
15    submitted.
16        (2) When a vehicle the ownership of which has been
17    transferred to any person through a certificate of
18    purchase from acquisition of the vehicle at an auction,
19    other dispositions as set forth in Sections 4-208 and
20    4-209 of this Code, or a lien arising under Section
21    18a-501 of this Code shall be deemed salvage or junk at the
22    option of the purchaser. The person acquiring such vehicle
23    in such manner shall promptly deliver or mail, within 20
24    days after the acquisition of the vehicle, the certificate
25    of purchase, the proper application and fee, and, if the
26    vehicle is an abandoned mobile home under the Abandoned

 

 

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1    Mobile Home Act, a certification from a local law
2    enforcement agency that the vehicle was purchased or
3    acquired at a public sale under the Abandoned Mobile Home
4    Act to the Secretary of State and a salvage certificate or
5    junking certificate shall be issued in the name of that
6    person. The salvage certificate or junking certificate
7    issued by the Secretary of State under this Section shall
8    be free of any lien that existed against the vehicle prior
9    to the time the vehicle was acquired by the applicant
10    under this Code.
11        (3) A vehicle which has been repossessed by a
12    lienholder shall be considered to be salvage only when the
13    repossessed vehicle, on the date of repossession by the
14    lienholder, has sustained damage by collision, fire,
15    theft, rust corrosion, or other means so that the cost of
16    repairing such damage, including labor, would be greater
17    than 50% of its fair market value without such damage. If
18    the lienholder determines that such vehicle is damaged in
19    excess of 50% of such fair market value, the lienholder
20    shall, before sale, transfer, or assignment of the
21    vehicle, make application for a salvage certificate, and
22    shall submit with such application the proper fee and
23    evidence of possession. If the facts required to be shown
24    in subsection (f) of Section 3-114 are satisfied, the
25    Secretary of State shall issue a salvage certificate in
26    the name of the lienholder making the application. In any

 

 

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1    case wherein the vehicle repossessed is not damaged in
2    excess of 50% of its fair market value, the lienholder
3    shall comply with the requirements of subsections (f),
4    (f-5), and (f-10) of Section 3-114, except that the
5    affidavit of repossession made by or on behalf of the
6    lienholder shall also contain an affirmation under penalty
7    of perjury that the vehicle on the date of sale is not
8    damaged in excess of 50% of its fair market value. If the
9    facts required to be shown in subsection (f) of Section
10    3-114 are satisfied, the Secretary of State shall issue a
11    certificate of title as set forth in Section 3-116 of this
12    Code. The Secretary of State may by rule or regulation
13    require photographs to be submitted.
14        (4) A vehicle which is a part of a fleet of more than 5
15    commercial vehicles registered in this State or any other
16    state or registered proportionately among several states
17    shall be considered to be salvage when such vehicle has
18    sustained damage by collision, fire, theft, rust,
19    corrosion or similar means so that the cost of repairing
20    such damage, including labor, would be greater than 50% of
21    the fair market value of the vehicle without such damage.
22    If the owner of a fleet vehicle desires to sell, transfer,
23    or assign his interest in such vehicle to a person within
24    this State other than an insurance company licensed to do
25    business within this State, and the owner determines that
26    such vehicle, at the time of the proposed sale, transfer

 

 

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1    or assignment is damaged in excess of 50% of its fair
2    market value, the owner shall, before such sale, transfer
3    or assignment, make application for a salvage certificate.
4    The application shall contain with it evidence of
5    possession of the vehicle. If the fleet vehicle at the
6    time of its sale, transfer, or assignment is not damaged
7    in excess of 50% of its fair market value, the owner shall
8    so state in a written affirmation on a form prescribed by
9    the Secretary of State by rule or regulation. The
10    Secretary of State may by rule or regulation require
11    photographs to be submitted. Upon sale, transfer or
12    assignment of the fleet vehicle the owner shall mail the
13    affirmation to the Secretary of State.
14        (5) A vehicle that has been submerged in water to the
15    point that rising water has reached over the door sill and
16    has entered the passenger or trunk compartment is a "flood
17    vehicle". A flood vehicle shall be considered to be
18    salvage only if the vehicle has sustained damage so that
19    the cost of repairing the damage, including labor, would
20    be greater than 50% of the fair market value of the vehicle
21    without that damage. The salvage certificate issued under
22    this Section shall indicate the word "flood", and the word
23    "flood" shall be conspicuously entered on subsequent
24    titles for the vehicle. A person who possesses or acquires
25    a flood vehicle that is not damaged in excess of 50% of its
26    fair market value shall make application for title in

 

 

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1    accordance with Section 3-116 of this Code, designating
2    the vehicle as "flood" in a manner prescribed by the
3    Secretary of State. The certificate of title issued shall
4    indicate the word "flood", and the word "flood" shall be
5    conspicuously entered on subsequent titles for the
6    vehicle.
7        (6) When any licensed rebuilder, repairer, new or used
8    vehicle dealer, or remittance agent has submitted an
9    application for title to a vehicle (other than an
10    application for title to a rebuilt vehicle) that he or she
11    knows or reasonably should have known to have sustained
12    damages in excess of 50% of the vehicle's fair market
13    value without that damage; provided, however, that any
14    application for a salvage certificate for a vehicle
15    recovered from theft and acquired from an insurance
16    company shall be made as required by paragraph (1) of this
17    subsection (b).
18    (c) Any person who without authority acquires, sells,
19exchanges, gives away, transfers or destroys or offers to
20acquire, sell, exchange, give away, transfer or destroy the
21certificate of title to any vehicle which is a junk or salvage
22vehicle shall be guilty of a Class 3 felony.
23    (d) Except as provided under subsection (a), any person
24who knowingly fails to surrender to the Secretary of State a
25certificate of title, salvage certificate, certificate of
26purchase or a similarly acceptable out-of-state document of

 

 

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1ownership as required under the provisions of this Section is
2guilty of a Class A misdemeanor for a first offense and a Class
34 felony for a subsequent offense; except that a person
4licensed under this Code who violates paragraph (5) of
5subsection (b) of this Section is guilty of a business offense
6and shall be fined not less than $1,000 nor more than $5,000
7for a first offense and is guilty of a Class 4 felony for a
8second or subsequent violation.
9    (e) Any vehicle which is salvage or junk may not be driven
10or operated on roads and highways within this State. A
11violation of this subsection is a Class A misdemeanor. A
12salvage vehicle displaying valid special plates issued under
13Section 3-601(b) of this Code, which is being driven to or from
14an inspection conducted under Section 3-308 of this Code, is
15exempt from the provisions of this subsection. A salvage
16vehicle for which a short term permit has been issued under
17Section 3-307 of this Code is exempt from the provisions of
18this subsection for the duration of the permit.
19(Source: P.A. 101-81, eff. 7-12-19; 102-319, eff. 1-1-22;
20102-538, eff. 8-20-21; 102-813, eff. 5-13-22.)