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  1. Home / Alabama / Alabama House & Senate Bills / 2019 Alabama Legislative Regular Session / 2019 Alabama Senate Bills / SB 224

SB 224

In Committee
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Sponsor
J. T. WaggonerJ. T. Waggoner
Session
Regular Session 2019
Title
Motor vehicle rentals, private motor vehicle rentals, subject to all insurance, taxation, and licensing laws and rules relating to rental of
Description

Under existing law, motor vehicle rentals and leases are subject to insurance, taxation, and licensing requirements and obligations

This bill would provide that private passenger automobiles and pickup trucks are subject to those same insurance, taxation, and licensing requirements and obligations when used as a rental vehicle in a private motor vehicle rental program

This bill would also provide liability and property and casualty insurance coverage requirements for a private motor vehicle rental program and program provider

Relating to motor vehicle rentals; to provide that private motor vehicle rentals are subject to all insurance, taxation, and licensing laws and rules relating to the rental of motor vehicles; and to provide for insurance requirements for the rental of such vehicles.

Subjects
Motor Vehicles
Note: Bills that change current law do not show the amended text correctly below. Please view Original PDF to see amended sections: SB 224 - Introduced - PDF

Under existing law, motor vehicle rentals and leases are subject to insurance, taxation, and licensing requirements and obligations

This bill would provide that private passenger automobiles and pickup trucks are subject to those same insurance, taxation, and licensing requirements and obligations when used as a rental vehicle in a private motor vehicle rental program

This bill would also provide liability and property and casualty insurance coverage requirements for a private motor vehicle rental program and program provider

Relating to motor vehicle rentals; to provide that private motor vehicle rentals are subject to all insurance, taxation, and licensing laws and rules relating to the rental of motor vehicles; and to provide for insurance requirements for the rental of such vehicles.

Section 1

(a) As used in this act, the following terms shall have the following meanings: (1) GROUP POLICY. An insurance policy issued pursuant to Section 3. (2) MOTOR VEHICLE. A motor vehicle, as defined by Section 32-1-1.1, Code of Alabama 1975, that has a gross weight rating of ten thousand pounds or less and is not used for the commercial delivery or transportation of goods or materials. (3) PERSON. An individual, corporation, a limited liability company, a limited partnership, a limited liability partnership, a partnership, an association, or a similar entity or any combination of the foregoing acting in concert. (4) PRIVATE MOTOR VEHICLE or VEHICLE. A motor vehicle, owned by or leased to a person and registered to the same person, that is insured, or subject to being insured, under a personal automobile liability insurance policy insuring a single individual or individuals residing in the same household, as the named insured, but does not include a motor vehicle with three or less wheels. (5) PRIVATE MOTOR VEHICLE RENTAL. The use of a private motor vehicle by an individual other than the registrant, in connection with a private motor vehicle rental program. (6) PRIVATE MOTOR VEHICLE RENTAL PROGRAM or RENTAL PROGRAM. Any means, digital or otherwise, by which a private motor vehicle rental is facilitated by a private motor vehicle rental program provider. (7) PRIVATE MOTOR VEHICLE RENTAL PROGRAM PROVIDER or PROGRAM PROVIDER. The person who is responsible for operating, facilitating, or administering the private motor vehicle rental program. (8) PRIVATE MOTOR VEHICLE RENTAL OWNER or OWNER. The registrant or registrants of a private motor vehicle available for rent through a private motor vehicle rental program. (9) PRIVATE MOTOR VEHICLE RENTER or RENTER. An individual, other than the private motor vehicle rental owner, who rents the owner's vehicle through a private motor vehicle rental program. (10) PROGRAM RENTAL PERIOD or RENTAL PERIOD. The period of time when a renter takes possession and control of a vehicle available for private vehicle rental, including the period of time when the vehicle becomes under the control of the program provider and continuing until both of the following conditions are met: a. The vehicle is returned or retrieved under any of the following conditions: 1. Retrieved by the owner or the owner's designee. 2. Returned to a location agreed upon by the owner and the renter. 3. Returned to a location designated by the program provider. b. One of the following occurs: 1. The time period established through the rental program expires. 2. The renter communicates in writing to the program provider or owner that the rental period is terminated. 3. The program provider or owner takes possession and control of the vehicle. (11) REGISTRANT. A vehicle owner or operator who is issued a registration for a motor vehicle.

Section 2

(a) In addition to any other requirements provided in this act, private motor vehicle rentals are subject to all laws and rules relating to the rental of motor vehicles, including, but not limited to, insurance, license, and tax requirements and obligations, including, but not limited to, the requirements of Article 4, commencing with Section 40-12-220, of Chapter 12 of Title 40, Code of Alabama 1975; and any and all municipal and county insurance, license, and tax requirements and obligations. (b) A private motor vehicle rental program provider that operates, facilitates, or administers a private motor vehicle rental program shall be deemed to be engaging or continuing within this state in the business of leasing or renting motor vehicles. The program provider shall be responsible for remitting the privilege or license tax levied under Section 40-12-222, Code of Alabama 1975, for the gross proceeds derived by the program provider for the lease or rental of motor vehicles under this act and registering with the Department of Revenue as a private motor vehicle rental program provider. (c) For purposes of the ad valorem tax assessment rate under Section 40-8-1, Code of Alabama 1975, every private motor vehicle that is used in a private motor vehicle rental program for a private motor vehicle rental shall be assessed as Class II property. A program provider shall maintain for a period of three years approved documentation that every private motor vehicle used in the program provider's private motor vehicle rental program has been assessed and taxed as Class II property and upon request by the Department of Revenue, the program provider shall provide such documentation to the department. Failure to provide the documentation when requested may result in revocation of the program provider's authority to operate in this state for a period up to three years. If a private motor vehicle in the program provider's rental program is not assessed and taxed as Class II property, the program provider is liable for any differential. (d) Nothing in this act shall prohibit an airport from charging a program provider a fee or prohibit an airport from requiring a program provider to enter into an airport concession agreement prior to operating a private motor vehicle rental program on the property of the airport.

Section 3

(a)(1) A program provider, during the rental period for a vehicle engaged in a private motor vehicle rental facilitated by the program provider, shall procure group insurance coverage. The group policy, at a minimum, shall provide primary automobile liability insurance at least equal to the minimum financial responsibility requirements for personal passenger motor vehicles required under Chapter 7 of Title 32, Code of Alabama 1975. The insurance shall be for the driver and authorized occupants of the vehicle. (2) Insurance required by this subsection may only be placed with an insurer licensed under state law or with a surplus lines insurer eligible under state law that has a credit rating of no less than A- from A.M. Best or A from Demotech or a similar rating from another rating agency recognized by the Department of Insurance. (3) The rate charged by an insurer for a group policy issued under this section shall be filed with the Department of Insurance on a file and use basis. (4) An insurer that issues a group policy under this section, when issuing the policy, shall identify the private motor vehicle rental program and program provider as the named insureds. The policy shall provide coverage, without requiring prior notice to the insurer, for all private motor vehicles during the rental period. The policy shall provide that the vehicles' renters and authorized or permissive operators and occupants are included as insureds under the policy to the same extent as insureds under a private passenger motor vehicle policy. (b) A program provider may offer or sell insurance in connection with the use of a vehicle in the private motor vehicle rental program only if the program provider is licensed pursuant to Section 27-7-5.1, Code of Alabama 1975. (c) A program provider shall provide the registered owner of a vehicle engaged in private vehicle rental that was facilitated by the provider with suitable proof of compliance with the insurance requirements of this section. Proof of insurance coverage satisfying this section and the requirements of Chapter 7 of Title 32, Code of Alabama 1975, shall be maintained in the vehicle by the owner or made available in an electronic form to the renter while the vehicle is operated by the renter, or any person other than the owner, pursuant to a private motor vehicle rental program. (d) A vehicle may not be operated for commercial use or as a vehicle for hire by a renter while engaged in a private motor vehicle rental. (e) For each rental transaction under a private motor vehicle rental program, the program provider shall provide each renter with all of the following: (1) Access to an insurance identification card approved for use by the state in which the vehicle is registered, or other documentation that is able to be carried in the vehicle or electronically accessible by the renter at all times during the rental period and proves the insurance coverage required under subsection (a) is in full force and effect. (2) The means, via a toll free number, email address, or other form of communication, with a law enforcement officer or other officer of the state, to confirm in real time that the insurance coverage required under subsection (a) is in full force and effect. (f) Every vehicle used in a private motor vehicle rental program shall be a private motor vehicle. A violation of this subsection may result in the suspension or termination of a private motor vehicle program provider's privilege to conduct business in this state for a period up to three years or a fine of not more than one thousand dollars ($1,000), or both. (g)(1) Every private motor vehicle program provider shall facilitate the installation, operation, and maintenance of its own signage and computer hardware and software to the extent necessary for the vehicle to be used in its private motor vehicle rental program. (2) Every private motor vehicle program provider shall indemnify and hold harmless the owner of a vehicle used in the program provider's rental program for the cost of damage or theft of equipment installed by the program provider under subdivision (1) for any damage caused to the vehicle by the installation, operation, or maintenance of the equipment. (h) Every private motor vehicle program provider, at the cost of program provider, shall collect from the owner, maintain, and make available, to any government agency as required by law, all of the following: a. The primary motor vehicle liability insurer of each vehicle in the program provider's rental program. b. The primary automobile, excess, or umbrella insurer of each renter in the program provider's rental program. c. The following information pertaining to any incidents that occurred during the rental period: 1. Verifiable records of the rental period for the vehicle, and, to the extent possible, verifiable electronic records of the time, initial and final locations of the vehicle, and miles driven. 2. In instances where an insurance claim has been filed with a group insurer, any and all information relevant to the claim, including payments by the program provider concerning accidents, damages, and injuries. (i) Every private motor vehicle program provider, prior to the first use or operation of a private motor vehicle pursuant to enrollment in a private motor vehicle program, shall give notice to owners and renters in the rental program of both of the following: a. That during the rental period, the owner's insurer may exclude any and all coverage afforded to its policy and that the owner's insurer may notify the insured that it has no duty to defend or indemnify any person or organization for liability for any loss that occurs during the rental period. b. That the group policy and physical damage coverage contract may not provide coverage outside of the rental period. (j)(1) Any notice or disclosure required to be provided or otherwise made available by a program provider shall be deemed to be timely and effectively made when the notice or disclosure is provided or delivered electronically at or before the time required by a master or member agreement in effect at the time of the rental. For purposes of this act, the term master or member agreement includes, but is not limited to, any of the following: a. A service offered by a program provider that allows customers to bypass a retail service location and obtain a product or service directly. b. A service where a program provider does not require the renter to execute a rental agreement at the time of the rental. c. A service where the renter does not receive the rental terms and conditions at the time of the rental. (2) Electronic or written acceptance is a valid form of acceptance of any notice or disclosure performed under this act, and acceptance is effective until the acceptance is affirmatively withdrawn by the renter. (3) Any notice or disclosure made under this act is exempt from any placement or stylistic display requirements, including, but not limited to, location, font size, typeset, or other specifically stated description; provided, however, that the notice or disclosure is generally consistent in appearance with the entirety of the communication in which it is contained. (4) If a program provider facilitates a rental through digital, electronic, or other means that allows a customer to obtain possession of a private motor vehicle without in-person contact with an agent or employee of the program provider, or where the renter does not execute a rental contract at the time of the rental, the program provider shall be deemed to have met all obligations to physically inspect a renter's driver's license under either of the following circumstances: a. At the time of enrollment in the rental program, or anytime thereafter, the master or member agreement, or other means of establishing the use of the program provider's services, requires verification that the renter is a licensed driver. b. Prior to the renter taking possession of the rental vehicle, the program provider verifies the renter's identity.

Section 4

(a) Notwithstanding any provision of law to the contrary, in the event of a loss or injury that occurs during the rental period or while the private motor vehicle is otherwise under the control of a private vehicle rental program provider, the program provider shall be deemed the owner of the vehicle for all purposes, including liability. The program provider shall retain such liability under all circumstances, regardless of the existence of a lapse in the group policy or any insurance policy under which the program provider is insured or whether the liability is covered under the group policy or any insurance policy under which the program provider is insured. (b) A program provider's group insurance policy shall provide coverage during the rental period for an owner's private motor vehicle. (c) When a dispute exists between the renter, rental program provider, and owner regarding who was in control of the vehicle when a loss occurs giving rise to a claim, the insurer providing group liability insurance to the private motor vehicle rental program pursuant to subsection (a) of Section 4 and group physical damage insurance to the private motor vehicle rental program pursuant to subsection (d) of Section 4 shall assume liability for the claim. The rental program shall notify the owner's private motor vehicle insurer of any dispute under this subsection within 10 business days of becoming aware that the dispute exists. (d) If the owner of a vehicle, or its insurer, is named as a defendant in a civil action for a loss or injury that occurs during any time within the rental period, or otherwise under the control of a private motor vehicle rental program, the rental program's group liability insurance insurer, pursuant to subsection (a) of Section 4, shall have the duty to defend and indemnify the owner and the owner's insurer, subject to the provisions of subsection (c) of this section. (e) When a private motor vehicle is used by a person other than its owner pursuant to a private motor vehicle rental facilitated through a private motor vehicle rental program, all of the following shall apply: (1) The insurer of the vehicle's owner may exclude any and all coverage for liability, uninsured, underinsured, collision physical damage and comprehensive physical damage benefits, and first-party benefits that may otherwise be afforded pursuant to its policy. (2) The primary and excess insurer or insurers of the owner of the vehicle used in the rental program may notify the insured that it has no duty to defend or indemnify any person or organization for liability for any loss that occurs during the rental period of the vehicle in the rental program. (f) No private contract or policy may diminish the automobile insurance requirements under this act.

Section 5

(a) A program provider shall do all of the following: (1) Verify that each private motor vehicle used in the program provider's rental program does not have a safety recall issued for the vehicle, or, if a safety recall has been issued for a vehicle, verify that any necessary repairs associated with the safety recall have been made. (2) Notify the owner of each private motor vehicle used in the program provider's rental program of the requirements of subdivision (1). (b) If the owner of a private motor vehicle used in the program provider's rental program has received an actual notice of a safety recall on the private motor vehicle, the private motor vehicle may not be used in the rental program until the safety recall repair has been made. (c) If a private motor vehicle is being used by a renter in a program provider's rental program and the program provider or owner of the private motor vehicle receives actual notice of a safety recall on the vehicle, the program provider shall remove the vehicle from participation in the program as soon as practicable, but no later than 72 hours after receipt of the notice. The program provider may not allow the vehicle to be used in the rental program until the safety recall repair has been made.

Section 6

The Department of Insurance and the Department of Revenue may adopt rules necessary for the implementation and administration of this act.

Section 7

This act shall become effective on the first day of the third month following its passage and approval by the Governor, or its otherwise becoming law.

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Action Date Chamber Action
April 3, 2019 S Read for the first time and referred to the Senate committee on Transportation and Energy
Document Type Document Location
Bill Text http://alisondb.legislature.state.al.us/ALISON/SearchableInstruments/2019RS/PrintFiles/SB224-int.pdf

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