Bill Text: IL HB1425 | 2023-2024 | 103rd General Assembly | Engrossed

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Bill Title: Amends the Certificate of Title Article of the Illinois Vehicle Code. In provisions concerning total loss claims for vehicles, provides that if the registered owner of a vehicle 9 model years of age or older does not agree to retain the vehicle, then the insurance company shall take possession of the vehicle.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced) 2023-03-27 - House Floor Amendment No. 1 Rule 19(c) / Re-referred to Rules Committee [HB1425 Detail]

Download: Illinois-2023-HB1425-Engrossed.html

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AN ACT concerning transportation.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Illinois Vehicle Code is amended by
changing Section 3-117.1 as follows:
(625 ILCS 5/3-117.1) (from Ch. 95 1/2, par. 3-117.1)
Sec. 3-117.1. When junking certificates or salvage
certificates must be obtained.
(a) Except as provided in Chapter 4 and Section 3-117.3 of
this Code, a person who possesses a junk vehicle shall within
15 days cause the certificate of title, salvage certificate,
certificate of purchase, or a similarly acceptable
out-of-state document of ownership to be surrendered to the
Secretary of State along with an application for a junking
certificate, except as provided in Section 3-117.2, whereupon
the Secretary of State shall issue to such a person a junking
certificate, which shall authorize the holder thereof to
possess, transport, or, by an endorsement, transfer ownership
in such junked vehicle, and a certificate of title shall not
again be issued for such vehicle. The owner of a junk vehicle
is not required to surrender the certificate of title under
this subsection if (i) there is no lienholder on the
certificate of title or (ii) the owner of the junk vehicle has

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a valid lien release from the lienholder releasing all
interest in the vehicle and the owner applying for the junk
certificate matches the current record on the certificate of
title file for the vehicle.
A licensee who possesses a junk vehicle and a Certificate
of Title, Salvage Certificate, Certificate of Purchase, or a
similarly acceptable out-of-state document of ownership for
such junk vehicle, may transport the junk vehicle to another
licensee prior to applying for or obtaining a junking
certificate, by executing a uniform invoice. The licensee
transferor shall furnish a copy of the uniform invoice to the
licensee transferee at the time of transfer. In any case, the
licensee transferor shall apply for a junking certificate in
conformance with Section 3-117.1 of this Chapter. The
following information shall be contained on a uniform invoice:
(1) The business name, address, and dealer license
number of the person disposing of the vehicle, junk
vehicle, or vehicle cowl;
(2) The name and address of the person acquiring the
vehicle, junk vehicle, or vehicle cowl and, if that person
is a dealer, the Illinois or out-of-state dealer license
number of that dealer;
(3) The date of the disposition of the vehicle, junk
vehicle, or vehicle cowl;
(4) The year, make, model, color, and description of
each vehicle, junk vehicle, or vehicle cowl disposed of by

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such person;
(5) The manufacturer's vehicle identification number,
Secretary of State identification number, or Illinois
State Police number for each vehicle, junk vehicle, or
vehicle cowl part disposed of by such person;
(6) The printed name and legible signature of the
person or agent disposing of the vehicle, junk vehicle, or
vehicle cowl; and
(7) The printed name and legible signature of the
person accepting delivery of the vehicle, junk vehicle, or
vehicle cowl.
The Secretary of State may certify a junking manifest in a
form prescribed by the Secretary of State that reflects those
vehicles for which junking certificates have been applied or
issued. A junking manifest may be issued to any person and it
shall constitute evidence of ownership for the vehicle listed
upon it. A junking manifest may be transferred only to a person
licensed under Section 5-301 of this Code as a scrap
processor. A junking manifest will allow the transportation of
those vehicles to a scrap processor prior to receiving the
junk certificate from the Secretary of State.
(b) An application for a salvage certificate shall be
submitted to the Secretary of State in any of the following
situations:
(1) When an insurance company makes a payment of
damages on a total loss claim for a vehicle, the insurance

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company shall be deemed to be the owner of such vehicle and
the vehicle shall be considered to be salvage except that
ownership of (i) a vehicle that has incurred only hail
damage that does not affect the operational safety of the
vehicle or (ii) any vehicle 9 model years of age or older
may, by agreement between the registered owner and the
insurance company, be retained by the registered owner of
such vehicle; however, if the registered owner does not
agree to retain a vehicle 9 model years of age or older,
then the insurance company shall take possession of the
vehicle. The insurance company shall promptly deliver or
mail within 20 days the certificate of title along with
proper application and fee to the Secretary of State, and
a salvage certificate shall be issued in the name of the
insurance company. Notwithstanding the foregoing, an
insurer making payment of damages on a total loss claim
for the theft of a vehicle shall not be required to apply
for a salvage certificate unless the vehicle is recovered
and has incurred damage that initially would have caused
the vehicle to be declared a total loss by the insurer.
(1.1) When a vehicle of a self-insured company is to
be sold in the State of Illinois and has sustained damaged
by collision, fire, theft, rust corrosion, or other means
so that the self-insured company determines the vehicle to
be a total loss, or if the cost of repairing the damage,
including labor, would be greater than 70% of its fair

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market value without that damage, the vehicle shall be
considered salvage. The self-insured company shall
promptly deliver the certificate of title along with
proper application and fee to the Secretary of State, and
a salvage certificate shall be issued in the name of the
self-insured company. A self-insured company making
payment of damages on a total loss claim for the theft of a
vehicle may exchange the salvage certificate for a
certificate of title if the vehicle is recovered without
damage. In such a situation, the self-insured shall fill
out and sign a form prescribed by the Secretary of State
which contains an affirmation under penalty of perjury
that the vehicle was recovered without damage and the
Secretary of State may, by rule, require photographs to be
submitted.
(2) When a vehicle the ownership of which has been
transferred to any person through a certificate of
purchase from acquisition of the vehicle at an auction,
other dispositions as set forth in Sections 4-208 and
4-209 of this Code, or a lien arising under Section
18a-501 of this Code shall be deemed salvage or junk at the
option of the purchaser. The person acquiring such vehicle
in such manner shall promptly deliver or mail, within 20
days after the acquisition of the vehicle, the certificate
of purchase, the proper application and fee, and, if the
vehicle is an abandoned mobile home under the Abandoned

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Mobile Home Act, a certification from a local law
enforcement agency that the vehicle was purchased or
acquired at a public sale under the Abandoned Mobile Home
Act to the Secretary of State and a salvage certificate or
junking certificate shall be issued in the name of that
person. The salvage certificate or junking certificate
issued by the Secretary of State under this Section shall
be free of any lien that existed against the vehicle prior
to the time the vehicle was acquired by the applicant
under this Code.
(3) A vehicle which has been repossessed by a
lienholder shall be considered to be salvage only when the
repossessed vehicle, on the date of repossession by the
lienholder, has sustained damage by collision, fire,
theft, rust corrosion, or other means so that the cost of
repairing such damage, including labor, would be greater
than 50% of its fair market value without such damage. If
the lienholder determines that such vehicle is damaged in
excess of 50% of such fair market value, the lienholder
shall, before sale, transfer, or assignment of the
vehicle, make application for a salvage certificate, and
shall submit with such application the proper fee and
evidence of possession. If the facts required to be shown
in subsection (f) of Section 3-114 are satisfied, the
Secretary of State shall issue a salvage certificate in
the name of the lienholder making the application. In any

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case wherein the vehicle repossessed is not damaged in
excess of 50% of its fair market value, the lienholder
shall comply with the requirements of subsections (f),
(f-5), and (f-10) of Section 3-114, except that the
affidavit of repossession made by or on behalf of the
lienholder shall also contain an affirmation under penalty
of perjury that the vehicle on the date of sale is not
damaged in excess of 50% of its fair market value. If the
facts required to be shown in subsection (f) of Section
3-114 are satisfied, the Secretary of State shall issue a
certificate of title as set forth in Section 3-116 of this
Code. The Secretary of State may by rule or regulation
require photographs to be submitted.
(4) A vehicle which is a part of a fleet of more than 5
commercial vehicles registered in this State or any other
state or registered proportionately among several states
shall be considered to be salvage when such vehicle has
sustained damage by collision, fire, theft, rust,
corrosion or similar means so that the cost of repairing
such damage, including labor, would be greater than 50% of
the fair market value of the vehicle without such damage.
If the owner of a fleet vehicle desires to sell, transfer,
or assign his interest in such vehicle to a person within
this State other than an insurance company licensed to do
business within this State, and the owner determines that
such vehicle, at the time of the proposed sale, transfer

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or assignment is damaged in excess of 50% of its fair
market value, the owner shall, before such sale, transfer
or assignment, make application for a salvage certificate.
The application shall contain with it evidence of
possession of the vehicle. If the fleet vehicle at the
time of its sale, transfer, or assignment is not damaged
in excess of 50% of its fair market value, the owner shall
so state in a written affirmation on a form prescribed by
the Secretary of State by rule or regulation. The
Secretary of State may by rule or regulation require
photographs to be submitted. Upon sale, transfer or
assignment of the fleet vehicle the owner shall mail the
affirmation to the Secretary of State.
(5) A vehicle that has been submerged in water to the
point that rising water has reached over the door sill and
has entered the passenger or trunk compartment is a "flood
vehicle". A flood vehicle shall be considered to be
salvage only if the vehicle has sustained damage so that
the cost of repairing the damage, including labor, would
be greater than 50% of the fair market value of the vehicle
without that damage. The salvage certificate issued under
this Section shall indicate the word "flood", and the word
"flood" shall be conspicuously entered on subsequent
titles for the vehicle. A person who possesses or acquires
a flood vehicle that is not damaged in excess of 50% of its
fair market value shall make application for title in

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accordance with Section 3-116 of this Code, designating
the vehicle as "flood" in a manner prescribed by the
Secretary of State. The certificate of title issued shall
indicate the word "flood", and the word "flood" shall be
conspicuously entered on subsequent titles for the
vehicle.
(6) When any licensed rebuilder, repairer, new or used
vehicle dealer, or remittance agent has submitted an
application for title to a vehicle (other than an
application for title to a rebuilt vehicle) that he or she
knows or reasonably should have known to have sustained
damages in excess of 50% of the vehicle's fair market
value without that damage; provided, however, that any
application for a salvage certificate for a vehicle
recovered from theft and acquired from an insurance
company shall be made as required by paragraph (1) of this
subsection (b).
(c) Any person who without authority acquires, sells,
exchanges, gives away, transfers or destroys or offers to
acquire, sell, exchange, give away, transfer or destroy the
certificate of title to any vehicle which is a junk or salvage
vehicle shall be guilty of a Class 3 felony.
(d) Except as provided under subsection (a), any person
who knowingly fails to surrender to the Secretary of State a
certificate of title, salvage certificate, certificate of
purchase or a similarly acceptable out-of-state document of

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ownership as required under the provisions of this Section is
guilty of a Class A misdemeanor for a first offense and a Class
4 felony for a subsequent offense; except that a person
licensed under this Code who violates paragraph (5) of
subsection (b) of this Section is guilty of a business offense
and shall be fined not less than $1,000 nor more than $5,000
for a first offense and is guilty of a Class 4 felony for a
second or subsequent violation.
(e) Any vehicle which is salvage or junk may not be driven
or operated on roads and highways within this State. A
violation of this subsection is a Class A misdemeanor. A
salvage vehicle displaying valid special plates issued under
Section 3-601(b) of this Code, which is being driven to or from
an inspection conducted under Section 3-308 of this Code, is
exempt from the provisions of this subsection. A salvage
vehicle for which a short term permit has been issued under
Section 3-307 of this Code is exempt from the provisions of
this subsection for the duration of the permit.
(Source: P.A. 101-81, eff. 7-12-19; 102-319, eff. 1-1-22;
102-538, eff. 8-20-21; 102-813, eff. 5-13-22.)