94TH GENERAL ASSEMBLY
State of Illinois
2005 and 2006
HB4790

 

Introduced 1/18/2006, by Rep. Jim Sacia

 

SYNOPSIS AS INTRODUCED:
 
625 ILCS 5/5-102   from Ch. 95 1/2, par. 5-102

    Amends the Illinois Vehicle Code. Provides that no used vehicle dealer license may be issued to any franchised motor vehicle dealer or any independent motor vehicle dealer owned by a franchised motor vehicle dealer or its dealer-operator and operated by the dealer-operator of a franchised motor vehicle dealer, unless the dealer-operator holds a valid certificate of qualification issued by the Secretary of State. Sets forth requirements for certification. Provides that certain dealers may obtain a license without examination. Provides that no license may be issued to any independent motor vehicle dealer unless the dealer-operator holds a valid certificate of qualification issued by the Secretary of State. Sets forth requirements for certification. Provides that the Secretary of State may establish minimum qualifications for applicants and, on and after January 1, 2007, shall require applicants for an original independent dealer-operator license to complete a course curriculum and to pay set course fees. Provides that the Secretary of State may approve qualified persons to prepare and present the courses and to administer the examination.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

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

 

 

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

 

 

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

 

 

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1     shall be accompanied by the following license fees:
2         $1,000 for applicant's established place of business,
3     and $50 for each additional place of business, if any, to
4     which the application pertains; however, if the
5     application is made after June 15 of any year, the license
6     fee shall be $500 for applicant's established place of
7     business plus $25 for each additional place of business, if
8     any, to which the application pertains. License fees shall
9     be returnable only in the event that the application is
10     denied by the Secretary of State. Of the money received by
11     the Secretary of State as license fees under this Section
12     for the 2004 licensing year and thereafter, 95% shall be
13     deposited into the General Revenue Fund.
14         6. A statement that the applicant's officers,
15     directors, shareholders having a 10% or greater ownership
16     interest therein, proprietor, partner, member, officer,
17     director, trustee, manager or other principals in the
18     business have not committed in the past 3 years any one
19     violation as determined in any civil, criminal or
20     administrative proceedings of any one of the following
21     Acts:
22             (A) The Anti Theft Laws of the Illinois Vehicle
23         Code;
24             (B) The Certificate of Title Laws of the Illinois
25         Vehicle Code;
26             (C) The Offenses against Registration and
27         Certificates of Title Laws of the Illinois Vehicle
28         Code;
29             (D) The Dealers, Transporters, Wreckers and
30         Rebuilders Laws of the Illinois Vehicle Code;
31             (E) Section 21-2 of the Illinois Criminal Code of
32         1961, Criminal Trespass to Vehicles; or
33             (F) The Retailers' Occupation Tax Act.
34         7. A statement that the applicant's officers,
35     directors, shareholders having a 10% or greater ownership
36     interest therein, proprietor, partner, member, officer,

 

 

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1     director, trustee, manager or other principals in the
2     business have not committed in any calendar year 3 or more
3     violations, as determined in any civil or criminal or
4     administrative proceedings, of any one or more of the
5     following Acts:
6             (A) The Consumer Finance Act;
7             (B) The Consumer Installment Loan Act;
8             (C) The Retail Installment Sales Act;
9             (D) The Motor Vehicle Retail Installment Sales
10         Act;
11             (E) The Interest Act;
12             (F) The Illinois Wage Assignment Act;
13             (G) Part 8 of Article XII of the Code of Civil
14         Procedure; or
15             (H) The Consumer Fraud Act.
16         8. A bond or Certificate of Deposit in the amount of
17     $20,000 for each location at which the applicant intends to
18     act as a used vehicle dealer. The bond shall be for the
19     term of the license, or its renewal, for which application
20     is made, and shall expire not sooner than December 31 of
21     the year for which the license was issued or renewed. The
22     bond shall run to the People of the State of Illinois, with
23     surety by a bonding or insurance company authorized to do
24     business in this State. It shall be conditioned upon the
25     proper transmittal of all title and registration fees and
26     taxes (excluding taxes under the Retailers' Occupation Tax
27     Act) accepted by the applicant as a used vehicle dealer.
28         9. Such other information concerning the business of
29     the applicant as the Secretary of State may by rule or
30     regulation prescribe.
31         10. A statement that the applicant understands Chapter
32     1 through Chapter 5 of this Code.
33     (c) Any change which renders no longer accurate any
34 information contained in any application for a used vehicle
35 dealer's license shall be amended within 30 days after the
36 occurrence of each change on such form as the Secretary of

 

 

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1 State may prescribe by rule or regulation, accompanied by an
2 amendatory fee of $2.
3     (d) Anything in this Chapter to the contrary
4 notwithstanding, no person shall be licensed as a used vehicle
5 dealer unless such person maintains an established place of
6 business as defined in this Chapter.
7     (e) The Secretary of State shall, within a reasonable time
8 after receipt, examine an application submitted to him under
9 this Section. Unless the Secretary makes a determination that
10 the application submitted to him does not conform to this
11 Section or that grounds exist for a denial of the application
12 under Section 5-501 of this Chapter, he must grant the
13 applicant an original used vehicle dealer's license in writing
14 for his established place of business and a supplemental
15 license in writing for each additional place of business in
16 such form as he may prescribe by rule or regulation which shall
17 include the following:
18         1. The name of the person licensed;
19         2. If a corporation, the name and address of its
20     officers or if a sole proprietorship, a partnership, an
21     unincorporated association or any similar form of business
22     organization, the name and address of the proprietor or of
23     each partner, member, officer, director, trustee or
24     manager;
25         3. In case of an original license, the established
26     place of business of the licensee;
27         4. In the case of a supplemental license, the
28     established place of business of the licensee and the
29     additional place of business to which such supplemental
30     license pertains.
31     (f) The appropriate instrument evidencing the license or a
32 certified copy thereof, provided by the Secretary of State
33 shall be kept posted, conspicuously, in the established place
34 of business of the licensee and in each additional place of
35 business, if any, maintained by such licensee.
36     (g) Except as provided in subsection (h) of this Section,

 

 

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1 all used vehicle dealer's licenses granted under this Section
2 expire by operation of law on December 31 of the calendar year
3 for which they are granted unless sooner revoked or cancelled
4 under Section 5-501 of this Chapter.
5     (h) A used vehicle dealer's license may be renewed upon
6 application and payment of the fee required herein, and
7 submission of proof of coverage by an approved bond under the
8 "Retailers' Occupation Tax Act" or proof that applicant is not
9 subject to such bonding requirements, as in the case of an
10 original license, but in case an application for the renewal of
11 an effective license is made during the month of December, the
12 effective license shall remain in force until the application
13 for renewal is granted or denied by the Secretary of State.
14     (i) All persons licensed as a used vehicle dealer are
15 required to furnish each purchaser of a motor vehicle:
16         1. A certificate of title properly assigned to the
17     purchaser;
18         2. A statement verified under oath that all identifying
19     numbers on the vehicle agree with those on the certificate
20     of title;
21         3. A bill of sale properly executed on behalf of such
22     person;
23         4. A copy of the Uniform Invoice-transaction reporting
24     return referred to in Section 5-402 of this Chapter;
25         5. In the case of a rebuilt vehicle, a copy of the
26     Disclosure of Rebuilt Vehicle Status; and
27         6. In the case of a vehicle for which the warranty has
28     been reinstated, a copy of the warranty.
29     (j) A real estate broker holding a valid certificate of
30 registration issued pursuant to "The Real Estate Brokers and
31 Salesmen License Act" may engage in the business of selling or
32 dealing in house trailers not his own without being licensed as
33 a used vehicle dealer under this Section; however such broker
34 shall maintain a record of the transaction including the
35 following:
36         (1) the name and address of the buyer and seller,

 

 

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1         (2) the date of sale,
2         (3) a description of the mobile home, including the
3     vehicle identification number, make, model, and year, and
4         (4) the Illinois certificate of title number.
5     The foregoing records shall be available for inspection by
6 any officer of the Secretary of State's Office at any
7 reasonable hour.
8     (k) Except at the time of sale or repossession of the
9 vehicle, no person licensed as a used vehicle dealer may issue
10 any other person a newly created key to a vehicle unless the
11 used vehicle dealer makes a copy of the driver's license or
12 State identification card of the person requesting or obtaining
13 the newly created key. The used vehicle dealer must retain the
14 copy for 30 days.
15     A used vehicle dealer who violates this subsection (k) is
16 guilty of a petty offense. Violation of this subsection (k) is
17 not cause to suspend, revoke, cancel, or deny renewal of the
18 used vehicle dealer's license.
19     (l) No license shall be issued to any franchised motor
20 vehicle dealer or any independent motor vehicle dealer owned by
21 a franchised motor vehicle dealer or its dealer-operator and
22 operated by the dealer-operator of a franchised motor vehicle
23 dealer, unless the dealer-operator holds a valid certificate of
24 qualification issued by the Secretary of State. The certificate
25 shall be issued only on application to the Secretary of State,
26 payment of an application fee of no more than $50 as determined
27 by the Secretary of State, and successful completion of an
28 examination approved by the Secretary of State. However, any
29 individual who is the dealer-operator of a licensed dealer on
30 July 1, 1995, shall be entitled to the license without
31 examination on application to the Secretary of State made on or
32 before January 1, 1996. The Secretary of State may established
33 minimum qualifications for applicants and require applicants
34 to satisfactorily complete courses of study or other
35 prerequisites prior to taking the examination.
36     (m) No license shall be issued to any independent motor

 

 

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1 vehicle dealer, except as permitted in subsection (a), unless
2 the dealer-operator holds a valid certificate of qualification
3 issued by the Secretary of State. The certificate shall be
4 issued only on application to the Secretary of State, payment
5 of an application fee of no more than $50 as determined by the
6 Secretary of State, and successful completion of an examination
7 approved by the Secretary of State. The Secretary of State may
8 establish minimum qualifications for applicants and, on and
9 after January 1, 2007, shall require applicants for an original
10 independent dealer-operator license issued pursuant to this
11 subsection (m) to complete a course curriculum and to pay set
12 course fees. The Secretary of State may approve qualified
13 persons to prepare and present the courses and to administer
14 the examination.
15 (Source: P.A. 92-391, eff. 8-16-01; 92-835, eff. 6-1-03; 93-32,
16 eff. 7-1-03.)