Pub. 1 2011 Issue 4

6 AUTOMOBILE DEALER NEWS ILLINOIS www.illinoisdealers.com Attorney General Dealer Recovery Fund Update I would like to take this opportunity to update all members on the Attorney General Dealer Recovery fund which was signed into law and is effective October 1, 2011. During the Spring 2011 Legislative Session, the Illinois Attorney General introduced legislation to help consum- ers who are hurt by dealers who close their stores and fail to pay off trade in liens. On August 22nd, Governor Quinn signed that legislation into law. The legislation will create a 3-mem- ber board, composed of representatives from the Attorney General’s Office, the Illinois Secretary of State’s Office, and one person representing dealers. The Board will oversee a new Dealer Recov- ery Trust Fund, which will be created outside of the State treasury. Beginning October 1, 2011, the Dealer Recovery Trust Fund will add a $500 charge to the annual license fee for each new and used motor vehicle dealer and motorcycle dealers, plus $50 for each additional place of busi- ness. Dealerships that sell 25 or fewer vehicles are exempt from this legisla- tion. IADA estimates that the fund will collect approximately $2 million the first year. Once the fund reaches a balance of $3.5 million, collection of the fee will be suspended the following year for any dealer who does not have a claim paid from the fund; have his or her license suspended or revoked; or have any civil penalties assessed against him or her during the previ- ous 3 years. The Attorney General’s Office indi- cated that 48 states have some type of fund or bonding requirement to cover these situations. Their original proposal was a $1,000 fee per dealer or a bonding requirement that would have been even more expensive and permanent. IADA will administer the Fund to oversee that the funds are collected and used in accord with the provisions of the legislation. One of the most important provisions included in the legislation was to structure the fund outside the State Treasury as an independent fund. An independent fund will not be avail- able for the State to sweep for cash flow purposes! Currently there is a lawsuit pending before the Illinois Supreme Court regarding this issue; however the fund involved in the lawsuit is considered a state fund! If you have any questions about this legislation, please feel free to contact our IADA office at (217) 753-0220. Q Sincerely, TimMooney, IADA Chairman IADA CHAIRMAN’S Letter | BY TIM MOONEY 2011 Officers Chairman Mr. Tim Mooney / 217.253.4454 Tim Mooney, Inc. U.S. Highway 36, Tuscola, IL 61953 Vice Chairman Mr. Jim Lombardi / 815.476.2333 Lombardi Chevrolet Buick 901 E. Baltimore St., Wilmington, IL 60481 Treasurer Mr. Gary Knight / 217.443.6803 Carmack Car Capitol 3724 N. Vermilion, Danville, IL 61832 Secretary Mr. Mike Mangold / 309.467.2344 Mangold Ford Mercury, Inc. 1100 West Center St., Eureka, IL 61530 President Peter J. Sander / 217.753.0220 Illinois Automobile Dealers Association 300 W. Edwards, P.O. Box 3045, Springfield, IL 62708 Illinois Automobile Dealers Association 300 West Edwards Street, Springfield, Illinois 62708 T 217.753.0220 • F 217.753.3424 www.IllinoisDealers.com