I'm going to try and answer all the questions here. I've read through DougC's response and I must second every idea. However, sometimes one can become inspired or motivated when you learn how things are done in another part of the world. I hope this answer your question Beast775.
I too, in Ontario, was told the same thing in regards to my electric bicycle, back in the day when the Ministry of Transportation (MTO) kept refusing everyone and anyone as soon as we/they said electric.
Now, in Ontario, there are apparently no safety requirements for registering a moped. Nevertheless, I did bring my vehicle for inspection. Here most small vehicles, (cars, vans, motorcycles) are inspected at private garages. I paid the mechanic 60$ for the appraisal and the "inspection". The only reason this was needed was for the insurance company and that was it! Supposedly there is no law that requires a vehicle inspection, here in Ontario, for the registration of a MOPED (Motor assisted bicycle). In fact, as the MTO representative stated "You could be registering a 60' mobile home as a moped and we wouldn't know. Are we supposed to go check it? We don't inspect the vehicle or have time. It’s up to you to tell the truth." So, drop off a sworn affidavit stating that you are the manufacturer of the vehicle. Incorporate all bills, vin#, make, model, appraisals, etc.
In Ontario there is a section within your Automobile Insurance that requires your current insurance company to insure any newly purchased vehicle, so long as you advise them as soon as reasonably possible. (I think it's up to 14 days but don't quote me on that one and do check your current automobile insurance policy – That’s the standard Ontario - OPC1). Send them your motor-vehicle’s info (Or Moped info).
Once they, if they do realize, it's homebuilt, they'll probably refuse to insure your new vehicle because of some subclause "modified vehicle". Now if you wish you could start a legal battle here... In Ontario that might be justified because of the way things are defined. Nevertheless, with that letter of refusal, tell them you require facility insurance (the last resort). They'll probably refuse again. So, find a broker... no insurance company, from a study I did in 2004, will offer facility, so you will need to find a broker.
I also had a few other interesting tricks up my sleeve. Which I think I may publish on my website (for copyright issues). This info will pertain to the name of your vehicle.
But in short: The vehicle I own currently meets 2 definitions.
It meets the federal safety requirements for a "power-assisted bicycle" as define in the Motor Vehicle Safety Regulation (MVSR) Section 2. It also meets the term “motor-assisted bicycle” as defined in the Highway Traffic Act (HTA) Section 1, of Ontario. So technically, I own a power-assisted bicycle and a motor-assisted bicycle. It's both!
If you have trouble registering, don’t fuss; just ask them for a letter. Usually they’ll smarten up quite quickly and stop with any bull****. Remember, it's hard to prove discrimination when it's you’re word against theirs, but if it’s written down on paper, now that’s pretty good evidence! I must agree that perhaps there may be some form of discrimination against a homebuilt mopeds vs. commercially built mopeds, however, if you follow the above steps and you still encounter this problem I believe, you should have enough to go to the courts and ask for some sort of judicial review. But, that's for Ontario and not IL. I just realized the first post by Red, specifies IL, so... that's the US... Not Canada... Aren’t the laws for your Bill of Rights a little different... The right to bear arms? etc?