Several high-profile initiatives hang in the balance as the Illinois General Assembly inches closer to its scheduled May 31 adjournment, among them a state budget, new legislative district boundaries, clean energy initiatives, an elected school board for Chicago, and an ethics overhaul in the wake of a sprawling corruption probe.

 

The glut of initiatives threatens to crowd out two bills important to dealers that stand on the doorstep of advancing out of the legislative body and to the desk of Gov. J.B. Pritzker: how manufacturers must compensate dealers for repairs of vehicles under warranty, and abolishment of the $10,000 limit on the trade-in credit allowance for first division vehicles, a limit that took effect in 2020. 

 

The CATA, the Illinois Automobile Dealers Association and a list of others have advocated for both bills, and dealers and their technicians are urged to contact their state senators now to voice their support and to exhort Senate President Don Harmon (D-Oak Park) to call House Bill 3940 for a third reading in the Senate and advancement to Pritzker.

 

The bill, which addresses the warranty work, passed the 17-member Senate Executive Committee May 20 on a 16-0 vote, with Harmon not voting.

 

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 champion 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.

The other bill, Senate Bill 58, would end the cap on trade-in credit allowances. The CATA has proposed an alternative: Raise the tax on private party sales, whose rates have not been raised in decades.

Over the last three years, an average 850,000 private party sales were transacted in the state of Illinois. Capping the trade-in credit on a retail transaction makes private party sales more attractive to the consumer, which means less revenue for the state. Dealerships also collect and remit tax due much more effectively and completely than do individuals. 

A second reading for the bill was on the House calendar on May 26. Supporters of SB 58 should express that to their state representatives in the House. Legislators would remain in session throughout the holiday weekend.