And now, the waiting game.

 

The just-concluded Illinois General Assembly in late May passed several bills that would benefit dealers, their technicians, and their customers. But Illinoisans could be readying for their year’s last dip in the pool before Gov. J.B. Pritzker acts on any of them.

One measure, Senate Bill 58, would restore the tax credit on traded-in vehicles to their full amount. Another, House Bill 3940, would change how manufacturer pay is calculated on warranty work. And Senate Bill 573 would extend driveaway permits from 30 days to 90 days.

A bill passed by both houses must be sent to the governor within 30 days. The governor then has 60 calendar days to sign it or to return it with his veto. If the governor does nothing, the bill will automatically become a law after the 60-day period. 

That means Pritzker does not have to act on any of the three bills until the last days of August. At least for the warranty labor legislation, CATA officials said they are asking the governor to sign it before the July 31 expiration of the current collective bargaining agreement with the union representing area technicians, to help negotiations of the next bargaining agreement.

Supporters of the bills are urged to contact Pritzker’s office now to help move him to sign the bills. Dan Marquardt, a Buick-GMC dealer who leads the CATA’s Government Relations Committee, noted that few constituents ever contact their elected officials on pending legislation, so if supporters of the three bills prod Pritzker to signthese, it will have an impact.

Capping the trade-in credit increases the cost of new vehicles and used vehicles bought at retail. Pritzker has voiced his backing of SB 58. The cap took effect in 2020 following moves to find funding for Pritzker’s multibillion dollar state capital infrastructure plan.

Under SB 58, infrastructure projects would instead be funded, in part, by increasing the sales tax charged in private vehicle sales. For instance, the current $390 sales tax on a 1-year-old vehicle sold privately for less than $15,000 would increase to $465. If the same vehicle sells for $15,001-$20,000, the sales tax would be increased from $750 to $850. 

 

The tax rates for private transactions haven’t changed in more than 30 years, and the modest increases are much less impactful than a trade-in credit cap, which costs consumers hundreds of dollars and harms dealers statewide.

 

Regarding HB 3940, automakers consider different time guides for the same repair when technicians fix a car under warranty versus the longer time considered when customers pay for the work. The bill requires manufacturers to compensate dealerships for warranty work in the same manner that retail customers pay for retail work, in terms of time allowances, labor rates, and parts prices.

 

Mechanics Local 701, the union representing area technicians at dealerships, is working with the CATA to advance the legislation. Supporters say HB 3940 would bring a fairness to the payment process that could attract new technicians to dealerships. Wisconsin has had similar policy in place for more than a decade.

 

In addition to establishing an equitable compensation scheme for warranty work, the bill would prevent manufacturers from imposing cost recovery fees or surcharges to overcome the bill’s effect. For manufacturers, it would preserve their right to approve or disapprove dealership claims, and it ensures manufacturers have a way to charge back any false or unsubstantiated claims they paid.

 

Three-month permits

Under SB 573, a registration permit valid for 90 days could be provided for a fee of $13 for registration plus 1/10 of the flat weight tax. Permits currently are valid for one month.

 

Also, beginning Jan. 1, 2022, the secretary of state would be authorized to issue a certificate of title in the name of the dealership to a licensed dealer for $20 if the surrendered certificate of title has no space to assign the certificate of title again.