HB1497 EnrolledLRB103 04797 HEP 49807 b

1    AN ACT concerning transportation.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Automobile Renting Occupation and Use Tax
5Act is amended by changing Section 2 and adding Section 6 as
6follows:
 
7    (35 ILCS 155/2)  (from Ch. 120, par. 1702)
8    Sec. 2. Definitions. "Renting" means any transfer of the
9possession or right to possession of an automobile to a user
10for a valuable consideration for a period of one year or less.
11    "Renting" does not include making a charge for the use of
12an automobile where the rentor, either himself or through an
13agent, furnishes a service of operating an automobile so that
14the rentor remains in possession of the automobile, because
15this does not constitute a transfer of possession or right to
16possession of the automobile.
17    "Renting" does not include the making of a charge by an
18automobile dealer for the use of an automobile as a
19demonstrator in connection with the dealer's business of
20selling, where the charge is merely made to recover the costs
21of operating the automobile as a demonstrator and is not
22intended as a rental or leasing charge in the ordinary sense.
23    "Renting" does not include peer-to-peer car sharing, as

 

 

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1defined in Section 5 of the Car-Sharing Program Act, if tax due
2on the automobile under the Retailers' Occupation Tax Act or
3Use Tax Act was paid upon the purchase of the automobile or
4when the automobile was brought into Illinois. The car-sharing
5program shall ask a shared vehicle owner if the shared vehicle
6owner paid applicable taxes at the time of purchase.
7Notwithstanding any law to the contrary, the car-sharing
8program shall have the right to rely on the shared vehicle
9owner's response and to be held legally harmless for such
10reliance.
11    "Automobile" means (1) any motor vehicle of the first
12division, or (2) a motor vehicle of the second division which:
13(A) is a self-contained motor vehicle designed or permanently
14converted to provide living quarters for recreational, camping
15or travel use, with direct walk through access to the living
16quarters from the driver's seat; (B) is of the van
17configuration designed for the transportation of not less than
187 nor more than 16 passengers, as defined in Section 1-146 of
19the Illinois Vehicle Code; or (C) has a Gross Vehicle Weight
20Rating, as defined in Section 1-124.5 of the Illinois Vehicle
21Code, of 8,000 pounds or less.
22    "Department" means the Department of Revenue.
23    "Person" means any natural individual, firm, partnership,
24association, joint stock company, joint adventure, public or
25private corporation, limited liability company, or a receiver,
26executor, trustee, conservator or other representative

 

 

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1appointed by order of any court.
2    "Rentor" means any person, firm, corporation or
3association engaged in the business of renting or leasing
4automobiles to users. For this purpose, the objective of
5making a profit is not necessary to make the renting activity a
6business.
7    "Rentor" does not include a car-sharing program or a
8shared-vehicle owner, as defined in Section 5 of the
9Car-Sharing Program Act, if tax due on the automobile under
10the Retailers' Occupation Tax Act or Use Tax Act was paid upon
11the purchase of the automobile or when the automobile was
12brought into Illinois. The car-sharing program shall ask a
13shared vehicle owner if the shared vehicle owner paid
14applicable taxes at the time of purchase. Notwithstanding any
15law to the contrary, the car-sharing program shall have the
16right to rely on the shared vehicle owner's response and to be
17held legally harmless for such reliance.
18    "Rentee" means any user to whom the possession, or the
19right to possession, of an automobile is transferred for a
20valuable consideration for a period of one year or less,
21whether paid for by the "rentee" or by someone else.
22    "Rentee" does not include a shared-vehicle driver, as
23defined in Section 5 of the Car-Sharing Program Act, if tax due
24on the automobile under the Retailers' Occupation Tax Act or
25Use Tax Act was paid upon the purchase of the automobile or
26when the automobile was brought into Illinois. The car-sharing

 

 

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1program shall ask a shared vehicle owner if the shared vehicle
2owner paid applicable taxes at the time of purchase.
3Notwithstanding any law to the contrary, the car-sharing
4program shall have the right to rely on the shared vehicle
5owner's response and to be held legally harmless for such
6reliance.
7    "Gross receipts" from the renting of tangible personal
8property or "rent" means the total rental price or leasing
9price. In the case of rental transactions in which the
10consideration is paid to the rentor on an installment basis,
11the amounts of such payments shall be included by the rentor in
12gross receipts or rent only as and when payments are received
13by the rentor.
14    "Gross receipts" does not include receipts received by an
15automobile dealer from a manufacturer or service contract
16provider for the use of an automobile by a person while that
17person's automobile is being repaired by that automobile
18dealer and the repair is made pursuant to a manufacturer's
19warranty or a service contract where a manufacturer or service
20contract provider reimburses that automobile dealer pursuant
21to a manufacturer's warranty or a service contract and the
22reimbursement is merely made to recover the costs of operating
23the automobile as a loaner vehicle.
24    "Rental price" means the consideration for renting or
25leasing an automobile valued in money, whether received in
26money or otherwise, including cash credits, property and

 

 

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1services, and shall be determined without any deduction on
2account of the cost of the property rented, the cost of
3materials used, labor or service cost, or any other expense
4whatsoever, but does not include charges that are added by a
5rentor on account of the rentor's tax liability under this Act
6or on account of the rentor's duty to collect, from the rentee,
7the tax that is imposed by Section 4 of this Act. The phrase
8"rental price" does not include compensation paid to a rentor
9by a rentee in consideration of the waiver by the rentor of any
10right of action or claim against the rentee for loss or damage
11to the automobile rented and also does not include a
12separately stated charge for insurance or recovery of
13refueling costs or other separately stated charges that are
14not for the use of tangible personal property.
15    "Rental price" does not include consideration paid for
16peer-to-peer car sharing to a shared-vehicle owner or a
17car-sharing program, as those terms are defined in Section 5
18of the Car-Sharing Program Act, if tax due on the automobile
19under the Retailers' Occupation Tax Act or Use Tax Act was paid
20upon the purchase of the automobile or when the automobile was
21brought into Illinois. The car-sharing program shall ask a
22shared vehicle owner if the shared vehicle owner paid
23applicable taxes at the time of purchase. Notwithstanding any
24law to the contrary, the car-sharing program shall have the
25right to rely on the shared vehicle owner's response and to be
26held legally harmless for such reliance.

 

 

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1(Source: P.A. 98-574, eff. 1-1-14.)
 
2    (35 ILCS 155/6 new)
3    Sec. 6. Applicability. The taxes imposed by Sections 3 and
44 of this Act do not apply to any amounts paid or received for
5peer-to-peer car sharing, as defined in Section 5 of the
6Car-Sharing Program Act, or the privilege of sharing a shared
7vehicle through a car-sharing program, as defined in Section 5
8of the Car-Sharing Program Act, if the shared vehicle owner
9paid applicable taxes upon the purchase of the automobile.
10    As used in this Section, "applicable taxes" means, with
11respect to vehicles purchased in Illinois, the retailers'
12occupation tax levied under the Retailers' Occupation Tax Act
13or the use tax levied under the Use Tax Act. "Applicable
14taxes", with respect to vehicles not purchased in Illinois,
15refers to the sales, use, excise, or other generally
16applicable tax that is due upon the purchase of a vehicle in
17the jurisdiction in which the vehicle was purchased.
18    Notwithstanding any law to the contrary, the car-sharing
19program shall have the right to rely on the shared vehicle
20owner's response and to be held legally harmless for such
21reliance.
 
22    Section 10. The Illinois Vehicle Code is amended by
23changing Section 6-305.2 as follows:
 

 

 

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1    (625 ILCS 5/6-305.2)
2    Sec. 6-305.2. Limited liability for damage.
3    (a) Damage to private passenger vehicle. A person who
4rents a motor vehicle to another may hold the renter liable to
5the extent permitted under subsections (b) through (d) for
6physical or mechanical damage to the rented motor vehicle that
7occurs during the time the motor vehicle is under the rental
8agreement.
9    (b) Limits on liability due to theft for a : vehicle having
10an MSRP of $50,000 or less. The total liability of a renter who
11rents from another a motor vehicle that has an MSRP of $50,000
12or less and that is stolen shall be the actual and reasonable
13costs incurred by the loss due to theft of the rental motor
14vehicle up to $5,000; provided, however, that if it is
15established that the renter or authorized driver failed to
16exercise ordinary care while in possession of the vehicle or
17that the renter or authorized driver committed or aided and
18abetted the commission of a theft, then the damages shall be
19the actual and reasonable costs of the rental vehicle up to its
20fair market value, as determined by the customary market for
21the sale of the vehicle. renter under subsection (a) for
22damage to a motor vehicle with a Manufacturer's Suggested
23Retail Price (MSRP) of $50,000 or less may not exceed all of
24the following:
25        (1) The lesser of:
26            (A) Actual and reasonable costs that the person

 

 

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1        who rents a motor vehicle to another incurred to
2        repair the motor vehicle or that the rental company
3        would have incurred if the motor vehicle had been
4        repaired, which shall reflect any discounts, price
5        reductions, or adjustments available to the rental
6        company; or
7            (B) The fair market value of that motor vehicle
8        immediately before the damage occurred, as determined
9        in the customary market for the retail sale of that
10        motor vehicle; and
11        (2) Actual and reasonable costs incurred by the loss
12    due to theft of the rental motor vehicle up to $2,000;
13    provided, however, that if it is established that the
14    renter or an authorized driver failed to exercise ordinary
15    care while in possession of the vehicle or that the renter
16    or an authorized driver committed or aided and abetted the
17    commission of the theft, then the damages shall be the
18    actual and reasonable costs of the rental vehicle up to
19    its fair market value, as determined by the customary
20    market for the sale of that vehicle.
21    For purposes of this subsection (b), for the period prior
22to June 1, 1998, the maximum amount that may be recovered from
23an authorized driver shall not exceed $6,000; for the period
24beginning June 1, 1998 through May 31, 1999, the maximum
25recovery shall not exceed $7,500; and for the period beginning
26June 1, 1999 through May 31, 2000, the maximum recovery shall

 

 

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1not exceed $9,000. Beginning June 1, 2000, and annually each
2June 1 thereafter, the maximum amount that may be recovered
3from an authorized driver under this subsection (b) shall be
4increased by $500 above the maximum recovery allowed
5immediately prior to June 1 of that year.
6    (b-5) Limits on liability due to theft for a : vehicle
7having an MSRP of more than $50,000. The total liability of a
8renter who rents from another a motor vehicle that has an MSRP
9of more than $50,000 and that is stolen shall be the actual and
10reasonable cost incurred by the loss due to theft of the rental
11motor vehicle up to $40,000; provided, however that if it is
12established that the renter or authorized driver failed to
13exercise ordinary care while in possession of the vehicle or
14that the renter or authorized driver committed or aided and
15abetted the commission of a theft, then the damages shall be
16the actual and reasonable costs of the rental vehicle up to its
17fair market value, as determined by the customary market for
18the sale of the vehicle. renter under subsection (a) for
19damage to a motor vehicle with a Manufacturer's Suggested
20Retail Price (MSRP) of more than $50,000 may not exceed all of
21the following:
22        (1) the lesser of:
23            (A) actual and reasonable costs that the person
24        who rents a motor vehicle to another incurred to
25        repair the motor vehicle or that the rental company
26        would have incurred if the motor vehicle had been

 

 

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1        repaired, which shall reflect any discounts, price
2        reductions, or adjustments available to the rental
3        company; or
4            (B) the fair market value of that motor vehicle
5        immediately before the damage occurred, as determined
6        in the customary market for the retail sale of that
7        motor vehicle; and
8        (2) the actual and reasonable costs incurred by the
9    loss due to theft of the rental motor vehicle up to
10    $40,000.
11    The maximum recovery for a motor vehicle with a
12Manufacturer's Suggested Retail Price (MSRP) of more than
13$50,000 under this subsection (b-5) shall not exceed $40,000
14on the effective date of this amendatory Act of the 99th
15General Assembly. On October 1, 2016, and for the next 3 years
16thereafter, the maximum amount that may be recovered from an
17authorized driver under this subsection (b-5) shall be
18increased by $2,500 above the prior year's maximum recovery.
19On October 1, 2020, and for each year thereafter, the maximum
20amount that may be recovered from an authorized driver under
21this subsection (b-5) shall be increased by $1,000 above the
22prior year's maximum recovery.
23    (b-10) Beginning on the effective date of this amendatory
24Act of the 103rd General Assembly and for 6 months after, a
25person who rents a motor vehicle to another shall provide
26notice to the renter of the motor vehicle of the changes

 

 

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1reflected in this amendatory Act of the 103rd General
2Assembly. The notice shall be posted in a conspicuous and
3unobscured place that is separate and apart from any other
4information.
5    (c) Multiple recoveries prohibited. Any person who rents a
6motor vehicle to another may not hold the renter liable for any
7amounts that the rental company recovers from any other party.
8    (d) Repair estimates. A person who rents a motor vehicle
9to another may not collect or attempt to collect the amount
10described in subsection (b) or (b-5) unless the rental company
11obtains an estimate from a repair company or an appraiser in
12the business of providing such appraisals on the costs of
13repairing the motor vehicle, makes a copy of the estimate
14available upon request to the renter who may be liable under
15subsection (a), or the insurer of the renter, and submits a
16copy of the estimate with any claim to collect the amount
17described in subsection (b) or (b-5). In order to collect the
18amount described in subsection (b-5), a person renting a motor
19vehicle to another must also provide the renter's personal
20insurance company with reasonable notice and an opportunity to
21inspect damages.
22    (d-5) In the event of loss due to theft of the rental motor
23vehicle with a MSRP more than $50,000, the rental company
24shall provide reasonable notice of the theft to the renter's
25personal insurance company.
26    (e) Duty to mitigate. A claim against a renter resulting

 

 

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1from damage or loss to a rental vehicle must be reasonably and
2rationally related to the actual loss incurred. A rental
3company shall mitigate damages where possible and shall not
4assert or collect any claim for physical damage which exceeds
5the actual costs of the repair, including all discounts or
6price reductions.
7    (f) No rental company shall require a deposit or an
8advance charge against the credit card of a renter, in any
9form, for damages to a vehicle which is in the renter's
10possession, custody, or control. No rental company shall
11require any payment for damage to the rental vehicle, upon the
12renter's return of the vehicle in a damaged condition, until
13after the cost of the damage to the vehicle and liability
14therefor is agreed to between the rental company and renter or
15is determined pursuant to law.
16    (g) If insurance coverage exists under the renter's
17personal insurance policy and the coverage is confirmed during
18regular business hours, the renter may require that the rental
19company must submit any claims to the renter's personal
20insurance carrier as the renter's agent. The rental company
21shall not make any written or oral representations that it
22will not present claims or negotiate with the renter's
23insurance carrier. For purposes of this Section, confirmation
24of coverage includes telephone confirmation from insurance
25company representatives during regular business hours. After
26confirmation of coverage, the amount of claim shall be

 

 

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1resolved between the insurance carrier and the rental company.
2(Source: P.A. 99-201, eff. 10-1-15.)
 
3    Section 99. Effective date. This Act takes upon becoming
4law, except that Section 10 takes effect on January 1, 2024.