    May 2024 End of Session Report
IADA is your advocate for protecting the franchise dealer model.  Your Association is located across the street from the State Capitol so that we can represent your interests in the legislative process every day.  We sincerely appreciate your support in the form of membership, grassroots involvement, and partnering with us on our member programs.  Below is a wrap up of this year's session, to give you an idea of the issues and sheer volume of activity that IADA works on.
The Illinois General Assembly adjourned the 2024 regular session in the early hours of May 29th, 2024.  The legislature was scheduled to adjourn on May 24th but was extended several days due to delays in the budget negotiations and tax increases. The fall Veto Session calendar will be available soon. The general election will be Tuesday, November 5th. 

FY2025 State Budget
At the end of the session, the legislature passed the largest budget in state history, $53.1 billion for FY2025, a $1.2 billion increase from the previous year. Highlights of the budget include:

$440 million for health insurance spending for undocumented immigrants
$182 million for additional migrant services.
$250 million for the Smart Start Early Childhood Program
$711 million Monetary Award Program (MAP) funding for lower-income college students
$500 million in new bonding to increase capital project spending to $3.5 billion ($100 million for each Democrat caucus)
$200 million to enhance after-school and summer youth programs
$500 million grant for quantum computing initiative 
$350 million increase for K-12 education 
$150 million transferred from the Road Fund to pay for public transit expenses
5% pay increase to lawmakers and top state officials

The General Assembly approved $1.1 billion in additional revenue through increased taxes on Illinois businesses to support the largest budget in Illinois' history. The revenue omnibus bill needed to be voted on three separate times before receiving the 60 votes to pass at 4:30 a.m.

Key revenue increases:
Cap on Retail Allowance: $186 million from reducing retailer discounts for collecting sales tax to $1,000 per month ($101 million to the State, $85 million to municipalities)
Limit on Corporate Net Operating Loss Deductions: $526 million
Sports Betting Tax: $200 million increase
Hotel Re-Renter Tax: $25 million

For 2024, IADA was able to enjoy a mostly successful year at the Capitol. The majority of our work this year was opposing legislation that would have placed unnecessary mandates on businesses and dealerships. Some of the dealer issues that the General Assembly addressed include the following:

CAP ON RETAIL VENDOR ALLOWANCE

One of the most controversial issues this session was the $1,000 monthly cap on the retail vendor allowance included in the FY2025 budget revenue bill. Filed in the final days, this provision resulted from a backdoor deal brokered by the Illinois Retail Merchants Association (IRMA) with the Governor's Office. The decision to cap the vendor allowance at $1,000 per month was made without consulting key stakeholders like the IADA, which only learned of the deal after the bill was filed.

This cap primarily benefits IRMA’s large corporate members while sacrificing the interests of smaller businesses and auto dealers. By shifting the financial burden of tax collection onto retailers, the cap threatens the financial stability of many businesses that rely on this allowance to offset administrative costs from acting as the state’s tax collector.

IRMA was the only business group to support the cap, providing cover to the Governor’s Office, which was pushing for the measure in search of added revenue. In return, IRMA received a long sought after change in law dealing with interchange fees. The Interchange Fee Prohibition Act won't raise any money for the state but benefits IRMA's large corporate members by shifting costs from large retailers to banks and card companies. While simple in its description, this maneuver further underscores the preferential treatment afforded to large corporations at the expense of smaller businesses. 

IRMA was the only business group to support the proposal; the opposition included the IADA, Chicagoland Chamber of Commerce, Illinois Credit Union League, Illinois Bankers Association, Community Bankers Association of Illinois, Illinois Hispanic Chamber of Commerce, American Airlines, Southwest Airlines, United Airlines, Visa, Discover, and Citi Bank. 

Adding insult to injury, IRMA was rewarded with a $5 million line item for workforce grants as part of the deal. This financial gain for IRMA highlights the organization’s willingness to sell out the broader business community for its own benefit. This payoff further solidifies the perception that IRMA prioritized its interests and those of its largest members over the well-being of the entire retail sector and other businesses in Illinois.

Despite this setback, there is a silver lining: the cap does not go into effect until January 1, 2025. The IADA is not giving up the fight. We will work with the Governor's Office and leaders of the General Assembly to attempt to insert protections from the law during the Fall Veto Session.

The IADA remains steadfast in its commitment to advocating for fair and transparent legislative processes that support all Illinois businesses. We will continue to fight for the rights and well-being of our members.

HB 1634 – CALIFONIA’S 100% EV MANDATE BY 2035 – DEFEATED

Early in the 2024 Legislative Session, HB 1634 emerged, aiming to align Illinois with California's strict zero-emission vehicle (ZEV) standards. The bill proposed an aggressive schedule for increasing electric vehicle (EV) sales, starting with 35% by 2026 and reaching 100% by 2035.

The IADA swiftly opposed this mandate, highlighting concerns over insufficient consumer demand and the lack of necessary charging infrastructure. We argued that forcing such a transition would severely limit consumer choices and disrupt the market. The bill was assigned to the Energy & Environment Committee, known for its environmentalist leanings, raising concerns that HB 1634 might gain traction. However, IADA presented a strong case, highlighting that Illinois auto dealers are at the forefront of selling and servicing EVs, having invested significantly in EV inventory, tools, equipment, training, and infrastructure. Yet, the proposed regulations would unduly restrict consumer automobile choices at a time when significant hesitations exist regarding EV costs, battery range, charging infrastructure availability, and vehicle reliability in various climates.

Our efforts resonated with committee members, and the bill was effectively blocked. While this victory represents a significant achievement, we remain vigilant against future attempts to introduce similar mandates.

HB 4926 – JUNK FEE BAN ACT - DEFEATED

HB 4926, the Junk Fee Ban Act, aimed to enhance transparency by mandating that all costs be included in advertised prices of consumer goods, including automobiles. Led by state Rep. Bob Morgan (D-North Brook), the bill targeted various sectors to improve consumer transparency. The IADA argued that while the bill was well-intentioned, it overlooked the complexities of automotive sales, which are already subject to stringent transparency regulations.

Dealerships do not impose "junk fees"; charges like documentary service fees (DOC fees) are legally sanctioned and necessary to offset compliance costs with state and federal regulations. HB 4926 sought to enforce strict advertising requirements, which could conflict with established rules and cause consumer confusion by overshadowing other essential pricing details.

IADA actively engaged with legislators to secure an exemption for motor vehicle sales, ensuring that any legislative changes considered the unique aspects of auto transactions. This effort succeeded, and we persuaded the Senate Sponsor and the Illinois Attorney General’s Office not to move the bill forward in 2024.

SB 2906 – COOK COUNTY USE TAX COLLECTION EXPANSION - DEFEATED

Introduced by the Cook County President’s Office, SB 2906 is a legislative proposal requiring all Illinois auto dealers, except those within Cook County, to collect the Cook County Use Tax on vehicle sales. This bill aims to expand the obligation of collecting this tax from dealers in Cook and its neighboring counties to include dealerships across the entire state.

The IADA strongly opposes SB 2906 due to the significant burden it places on dealers outside of Cook County. This bill would require these dealers to adapt to new responsibilities, including extensive training to manage Cook County’s tax rates, exemptions, and reporting protocols. Compounding concerns, the bill controversially exempts dealers within Cook County from these new collection requirements, allowing them to continue collecting taxes directly from consumers. This selective enforcement could lead to unequal tax practices and appears to centralize tax collection control within Cook County, potentially complicating broader state tax administration efforts.

IADA successfully defeated the bill in the House and prevented it from being presented for a vote.

The IADA remains steadfast in its commitment to protecting auto dealers across Illinois. IADA advocates for equitable tax collection practices and legislative changes that recognize the operational realities of the state's auto dealers, ensuring fair competition and a balanced regulatory environment. This commitment underlines IADA's ongoing dedication to supporting the health and success of the automotive industry statewide.

OTHER LEGISLATION PASSED
Motor Vehicle Dealer Protection Act

HB 4447 (Cabello/Murphy), supported by IADA, successfully passed both chambers. The bill creates the Motor Vehicle Dealer Protection Act, enabling vehicle dealers to go after scammers who use their intellectual property to deceive consumers. This measure, led by Rep. John Cabello and State Senator Laura Murphy, targets extended warranty fraud, where aftermarket sellers often send fraudulent letters that appear to be from an official source, pushing unnecessary and overpriced plans.

Under HB 4447, car dealerships can seek damages for the unauthorized use of their name, likeness, image, registered trademark, or intellectual property. Violations allow motor vehicle dealers to recover actual damages or up to $5,000, whichever is greater, and the court may award punitive damages and other appropriate relief. This legislation aims to provide transparency for consumers and protect dealerships from reputational damage caused by deceptive practices.

HB 4447 passed both Chambers unanimously and has been sent to the Governor. 

Bill To Curb Catalytic Converter Theft Passes Both Chambers

HB 4589 (Hoffman/Hastings), aimed at curbing the rampant theft of catalytic converters, has passed both Chambers unanimously. This critical legislation requires buyers and sellers of detached catalytic converters to maintain meticulous records, including the Vehicle Identification Number (VIN) from which the part was removed. It mandates sellers provide a copy of the certificate of title or registration proving ownership of the vehicle.

A key part of HB 4589 is classifying the catalytic converter as an "essential part" under the Illinois Vehicle Code, requiring vehicle identification and part numbers in transactions. Furthermore, the bill seeks to ensure the continued enforcement of the Illinois Vehicle Hijacking and Motor Vehicle Theft Prevention and Insurance Verification Act by eliminating the clause that would terminate the Act in January 2025.

The Illinois Automobile Dealers Association (IADA) supported the passage of HB 4589, recognizing it as a strong measure that addresses a specific crime issue and supports broader efforts to enhance vehicle and consumer safety. 

Illinois’ Biometric Information Privacy Act Changes

SB 2979 (Cunningham/Williams, A.) provided a significant amendment to the Illinois Biometric Information Privacy Act (BIPA). The bill states that if an entity repeatedly collects the same biometric identifier or information from the same person without proper notice and consent, it counts as a single violation. This means each person affected can only recover once for a collective violation.

For instance, an employer who requires employees to use a biometric timekeeping system without providing the requisite notice and obtaining consent would, under the amended law, be liable only for one violation of BIPA rather than one violation for each day the employer had used the timekeeping system. This is significant because the law imposes a penalty of $1,000 per violation or $5,000 per intentional or reckless violation. Due to this amendment, plaintiffs’ incentive to file suit under BIPA may decrease.

The bill is not retroactive and now heads to the Governor’s desk for signature. The act would take effect upon signature.

New Fleet Electrification Incentive Program

The Fleet Electrification Incentive Program, created by HB 4959, provides grants for purchasing electric trucks and school buses in Illinois. Grants range from $7,500 for a Class 2b vehicle to $120,000 for a Class 8 vehicle, with an additional 65% incentive for electric school buses serving public school districts. Eligible purchasers must be based in Illinois, register the vehicles in the state, and ensure the vehicles operate in Illinois for at least 80% of their time.

The Illinois EPA awards grants competitively, using a points-based system that favors applications from equity investment-eligible communities and those with collective bargaining agreements. Grants cover up to 80% of the vehicle's purchase price and can be combined with other public incentives, provided the total does not exceed 80% of the cost. Applicants must deploy the vehicles within 24 months and complete the project within 36 months. Twenty percent of program funds are reserved for electric school bus purchases.

Road Funds Can Be Used for Illinois EV Rebates

Starting in fiscal year 2025, HB 4959 allows the Road Fund to be used by the Environmental Protection Agency for the Electric Vehicle Rebate Fund, subject to appropriation. This is a major change from the current funding, which relies on general revenue funds.

Governor Pritzker pushed for this change despite union objections. Unions are protective of the Road Fund due to its importance for funding road projects. The state's EV Rebate Program was allocated $12 million in the FY25 budget, highlighting the increased focus on electric vehicle incentives.

DEALER LEGISLATION HELD IN COMMITTEES

The following is a list of some introduced legislation impacting our dealers. With your support, IADA can continue to enjoy success in representing dealers' voices on various issues.

HOUSE BILLS:
HB 1634 & SB 2050 & SB 2839 – IMPLEMENTS CALIFORNIA EMISSIONS STANDARDS & EV MANDATE – Requires the Illinois Environmental Protection Agency (IEPA) to adopt and implement motor vehicle emissions standards from California, and MANDATES that 100% of new cars sold by 2035 must be EVs.

HB 2459 & SB 1458 & SB 1800 & SB 2706 - ELECTRIC TRUCK VOUCHERS - Requires IEPA to establish a fleet electrification voucher program to promote the use of electric school buses, electric Class 7 trucks, or electric Class 8 trucks. The vouchers would be $200,000 per truck.

HB 2561 - ELECTRIC CHARGING STATIONS - Provides that the Department of Transportation shall install direct current electric vehicle charging stations at each rest along each interstate highway in the state.

HB 2804 - CHARGING STATIONS - Creates a credit for taxpayers that install an electric vehicle charging station at a business location in the state which uses a contractor that participates in an apprenticeship program for the installation.

HB 3245 - AUTOMATION DRIVING FEATURE NOTICE - Provides that a vehicle dealer or manufacturer shall NOT sell any new vehicle equipped with any partial driving automation feature without giving notice of the functions and limitations of the features to the buyer.

HB 3374 - ELECTRIC VEHICLE RECYCLING ACT - Provides that after 60 days of this Act, manufacturers of electric vehicles that contain hazardous components and batteries must begin to implement a collection program that facilitates the removal of these items.

HB 3597 - ELECTRIC TRUCK VOUCHERS - Requires the IEPA to establish a voucher program to promote the use of electric trucks by offering a voucher in specified amounts per electric vehicle purchased or leased. 

HB 5068 - CARBON FUEL STANDARDS ACT – Requires the IEPA to establish a new Low Carbon Standards Program. Provides that the Program shall establish declining carbon intensity standards, expressed in terms of the carbon intensity of transportation fuels, to be achieved during each compliance period. Provides that providers of transportation fuel must demonstrate that the mix of fuels they supply for use in Illinois meets the carbon intensity benchmarks of the program for each annual compliance period. 

HB 5145 / SB 3672 - EV CHARGER GRANT ACT - Creates the Electric Vehicle Charger Grant Act. Provides that any State agency that disburses grant funds for electric vehicle charging stations must include provisions in the criteria for awarding grant funds that encourage the grantees' use of equity-eligible contractors. The provisions shall include, but not be limited to, additional points to those grantees who commit to exclusively using equity-eligible contractors, a portion of the grant funds solely devoted to equity-eligible contractors, and inclusion of aspirational goals for all grantees to use equity-eligible contractors. 

HB 5159 & 5160 - PAID LEAVE RELIEF ACT - Amends the Paid Leave for All Workers Act. Provides that the definition of "employee" means an individual who (i) meets the definition of "employee" in specified provisions of the Illinois Wage Payment and Collection Act and (ii) works at least 130/195 hours for an employer over at least 90 days.

HB 5233 - VEH CD-WEIGHT LIMIT EXEMPTION - Amends the Illinois Vehicle Code. Provides that a vehicle or combination of vehicles powered primarily using electric battery power may exceed the posted weight limits by up to 2,000 pounds.

HB 5263 - $EV REBATE FUND - Appropriates $50,000,000 from the General Revenue Fund to the Electric Vehicle Rebate Fund.

HB 5286 / SB 3588– EV REBATES – Reworks the existing State EV Rebate Program. Limits the electric vehicle rebate to low-income people beginning on July 1, 2024. Adds a rebate for electric motorcycles of $1,500 beginning on July 1, 2024, $750 starting on July 1, 2026, and $500 beginning on July 1, 2028. Lengthens the time for applying for the rebate to 120 days starting in July 2024. Allows for deposits into the Electric Vehicle Fund from any fund for specific specified purposes.

SENATE BILLS:

SB 1556 - CLEAN TRANSPORT STANDARD - Creates the Clean Transportation Standard Act. The bill directs the Illinois Environmental Protection Agency to establish a clean transportation standard to reduce the carbon intensity of transportation fuels in the state by 20% by 2038. SB1556 allows the agency to prescribe further carbon intensity reduction targets past 2038. 

SB 2043 - ELECTRIC VOUCHER PROGRAM - Requires the Illinois Environmental Protection Agency to establish a voucher program to promote the use of electric vehicles.

SB 2154 - ELECTRIC SCHOOL BUSES - Provides that all school buses that are newly purchased, leased, or contracted after January 1, 2028, shall be an electric vehicle.

SB 2680 - RIGHT TO REPAIR - Creates the Right to Repair Act. Provides that every manufacturer of an electronic or appliance product with a specified wholesale price or direct sales price shall make service and repair facilities available to owners of the product. "Appliance" includes, but is not limited to, any refrigerator, freezer, range, microwave oven, washer, dryer, dishwasher, trash compactor, or room air-conditioner normally used or sold for personal, family, household, or home office use, or use in private motor vehicles. "Service dealer" includes a person who, for compensation, engages in or holds himself or herself out to the public as offering services in installing, repairing, servicing, or maintaining equipment or a burglar alarm system for use in private motor vehicles.

SB 3323 - ACCESSIBLE EV CHARGING STATION - Creates the Accessible Electric Vehicle Charging Station Act. Requires the IDOT to ensure that electric vehicle charging stations statewide are accessible for individuals with disabilities. This act stipulates that charging facilities for mobility device users must be on accessible routes, adhering to the standards of the Americans with Disabilities Act of 1990 and the Architectural Barriers Act of 1968, which covers specifications for walking surfaces and ramps. 

SB 3456 - ELECTRIC VEHICLE REBATE - Amends the Electric Vehicle Rebate Act. Provides that, to be eligible for the electric vehicle rebate, a purchaser must purchase or make a significant payment towards the purchase of (instead of purchase) an electric vehicle on or after July 1, 2022. 

SB 3483 - EPA-LOCAL GOV EV GRANT - Requires IEPA to establish and administer a Local Government Zero Emissions Transition Grant Program. Delineates the program into two Phases. Phase 1 requires an application to the Agency by a local government stating a local ordinance or nonbinding declaration has been voted on regarding the transition of the local government's vehicle fleet to zero emissions by 2030. Limits Phase 1 grants to a maximum of $50,000 with at least a 20% match from the applicant. Requires applications under Phase 2 of the program to be predicated on either completion of an evaluative study regarding readiness for electric vehicles by the local government or completion of Phase 1 of the program. 

SB 3651 – EV CHARGING TAX - Creates the Electric Vehicle Charging Tax Act. Provides that a tax is imposed on the privilege of engaging in business as an electric vehicle power provider in this State. Provides that, from January 1, 2025, through January 1, 2026, the tax rate shall be $0.06 per kilowatt hour of electric vehicle power. Provides that the tax rate shall be increased on January 1 of each year by the percentage increase, if any, in the Consumer Price Index. Creates a dynamic wireless electric vehicle charging pilot program. 