SB386: Bill Text

SB386,,1 2023 SENATE BILL 386

August 9, 2023 - Introduced by Senators Stafsholt, Ballweg, Cabral-Guevara and Cowles, cosponsored by Representatives Duchow, Neylon, Goeben, Gundrum, Kitchens, Mursau, O’Connor, Rettinger, Schmidt and Zimmerman. Referred to Committee on Insurance and Small Business.

SB386,,2 An Act to amend 77.99, 77.995 (2), 344.57 (5), 344.57 (6) and 344.57 (7); and to create 344.51 (4), 344.581 and 632.362 of the statutes; relating to: requirements for and insurance related to peer-to-peer motor vehicle sharing programs.

SB386,,3 Analysis by the Legislative Reference Bureau

This bill generally requires that peer-to-peer motor vehicle sharing programs assume liability, as specified under the bill, for the owners of shared vehicles and sets certain other requirements on those programs.

Under the bill, a peer-to-peer motor vehicle sharing program is a business platform that connects a motor vehicle owner with an individual to enable the individual’s use of the motor vehicle for financial consideration. The individual must have a driver’s license to be able to participate in the sharing program.

The bill requires the sharing program to assume liability for the shared vehicle owner for bodily injury or property damage to third parties, or for uninsured and underinsured motorist or personal injury protection losses, in amounts stated in the sharing agreement, which cannot be less than the minimum coverage required under Wisconsin law. However, the sharing program is not required to assume liability if the vehicle owner makes an intentional or fraudulent material misrepresentation or omission or is acting in concert with a driver who fails to return the motor vehicle in accordance with the sharing agreement.

The bill also requires the sharing program to ensure that each shared vehicle owner and driver are insured under a policy that provides coverage in amounts no less than the minimum required under Wisconsin law. That required coverage may be provided under primary insurance maintained by the shared vehicle owner, the shared vehicle driver, the sharing program, or any combination of those. The bill requires that the insurer, insurers, or sharing program providing coverage must provide primary coverage if there is a dispute about who controlled the vehicle at the time of the loss and the program does not retain information required under the bill or if there is a dispute about whether the vehicle was dropped off at a location specified in the sharing agreement. Under the bill, the sharing program’s insurance must cover the loss beginning with the first dollar and has the duty to defend if the driver’s or owner’s insurance has lapsed or does not provide the required coverage. The bill gives the sharing program an insurable interest in the motor vehicle during the period it is being shared and allows the sharing program to own and maintain coverage specified under the bill.

The bill allows insurers writing motor vehicle insurance to exclude coverage, including liability for bodily injury and property damage and uninsured and underinsured motorists coverage, and to refuse to defend or indemnify for any claim under a shared vehicle owner’s policy.

The bill exempts sharing programs and shared vehicle owners from liability in accordance with a federal law that exempts a vehicle owner who rents or leases the vehicle from liability for harm to persons or property that results from or arises out of the use, operation, or possession of the vehicle during the rental or lease if the owner is engaged in the business of renting or leasing motor vehicles and there is no negligence or criminal wrongdoing on the part of the owner. The bill also exempts sharing programs and shared vehicle owners from state laws regarding financial responsibility for rented vehicles and damage waivers and liability in the context of vehicle rental agreements.

The bill requires the sharing program to verify that the shared vehicle is not the subject of a safety recall at the time the vehicle is registered with the program. A shared vehicle owner that receives a safety recall notice must remove the vehicle from the program and refrain from sharing it until the repairs are made and, if the vehicle is in the possession of a shared vehicle driver, notify the sharing program of the recall.

The bill requires the sharing program to disclose certain information to shared vehicle owners and drivers, including information related to insurance coverage and the daily rates and fees, and to retain information about the sharing transactions. Additionally, at the time a vehicle owner registers with a sharing program, the sharing program must inform the owner of the responsibilities relating to safety recalls and that sharing the vehicle may violate an agreement with a lienholder.

Under the bill, the sharing program has responsibility for any equipment that is put in or on the vehicle to monitor or facilitate the sharing transaction. The sharing program must agree to indemnify and hold harmless the owner for any damage or theft to that equipment not caused by the owner, but has the right to seek indemnity from the driver for such loss or damage.

Finally, the bill also specifies that sharing programs and shared vehicle owners are not establishments primarily engaged in the short-term rental of passenger cars for purposes of the local rental car tax and the short-term rental of vehicles for the purposes of the state rental vehicle fee, if the applicable sales and use taxes are paid for the purchase of the shared motor vehicle.

For further information see the state and local fiscal estimate, which will be printed as an appendix to this bill.

SB386,,4 The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

SB386,1 Section 1. 77.99 of the statutes is amended to read:

SB386,,6 77.99 Imposition. A local exposition district under subch. II of ch. 229 may impose a tax at the rate of 3 percent of the sales price on the rental, but not for rerental and not for rental as a service or repair replacement vehicle, within the district’s jurisdiction under s. 229.43, of Type 1 automobiles, as defined in s. 340.01 (4) (a), by establishments primarily engaged in short-term rental of passenger cars without drivers, for a period of 30 days or less, unless the sale is exempt from the sales tax under s. 77.54 (1), (4), (7) (a), (7m), (9) or (9a). If the state makes a payment under s. 229.50 (7) to a district’s special debt service reserve fund, a majority of the district’s authorized board of directors may vote to increase the tax rate under this subchapter to 4 percent. A resolution to adopt the taxes imposed under this section, or an increase in the tax rate, shall be effective on the first January 1, April 1, July 1, or October 1 following the adoption of the resolution or tax increase. For purposes of this section, a peer-to-peer motor vehicle sharing program, as defined in s. 632.362 (1) (g), or a shared vehicle owner, as defined in s. 632.362 (1) (i), is not an establishment primarily engaged in short-term rental of passenger cars without drivers, if the applicable taxes under s. 77.52 or 77.53 have been paid for the purchase of the shared motor vehicle.

SB386,2 Section 2. 77.995 (2) of the statutes is amended to read:

SB386,,8 77.995 (2) There is imposed a fee at the rate of 5 percent of the sales price on the rental, but not for rerental and not for rental as a service or repair replacement vehicle of Type 1 automobiles, as defined in s. 340.01 (4) (a); of recreational vehicles, as defined in s. 340.01 (48r); of motor homes, as defined in s. 340.01 (33m); and of camping trailers, as defined in s. 340.01 (6m) by establishments primarily engaged in short-term rental of vehicles without drivers, for a period of 30 days or less, unless the sale is exempt from the sales tax under s. 77.54 (1), (4), (7) (a), (7m) or (9a). There is also imposed a fee at the rate of 5 percent of the sales price on the rental of limousines. For purposes of this subsection, a peer-to-peer motor vehicle sharing program, as defined in s. 632.362 (1) (g), or a shared vehicle owner, as defined in s. 632.362 (1) (i), is not an establishment primarily engaged in short-term rental of vehicles without drivers, if the applicable taxes under s. 77.52 or 77.53 have been paid for the purchase of the shared motor vehicle.

SB386,3 Section 3. 344.51 (4) of the statutes is created to read:

SB386,,10 344.51 (4) This section does not apply to a motor vehicle sharing agreement, as defined in s. 632.362 (1) (b); a peer-to-peer motor vehicle sharing program, as defined in s. 632.362 (1) (g); or a shared vehicle owner, as defined in s. 632.362 (1) (i).

SB386,4 Section 4. 344.57 (5) of the statutes is amended to read:

SB386,,12 344.57 (5) “Rental agreement” means a written agreement setting forth the terms and conditions governing the use of a private passenger vehicle provided for rent by a rental company. “Rental agreement” does not include a motor vehicle sharing agreement, as defined in s. 632.362 (1) (b).

SB386,5 Section 5. 344.57 (6) of the statutes is amended to read:

SB386,,14 344.57 (6) “Rental company” means a person in the business of providing private passenger vehicles for rent to the public. “Rental company” does not include a person operating a peer-to-peer motor vehicle sharing program, as defined in s. 632.362 (1) (g), or a shared vehicle owner, as defined in s. 632.362 (1) (i).

SB386,6 Section 6. 344.57 (7) of the statutes is amended to read:

SB386,,16 344.57 (7) “Renter” means the person who rents a private passenger vehicle from a rental company under a rental agreement. “Renter” does not include a shared vehicle driver, as defined in s. 632.362 (1) (h).

SB386,7 Section 7. 344.581 of the statutes is created to read:

SB386,,18 344.581 Peer-to-peer motor vehicle sharing. (1) Definitions. In this section:

SB386,,19 (a) “Motor vehicle sharing agreement” has the meaning given in s. 632.362 (1) (b).

SB386,,20 (b) “Motor vehicle sharing duration” has the meaning given in s. 632.362 (1) (d).

SB386,,21 (c) “Peer-to-peer motor vehicle sharing program” has the meaning given in s. 632.362 (1) (g).

SB386,,22 (d) “Shared vehicle driver” has the meaning given in s. 632.362 (1) (h).

SB386,,23 (e) Notwithstanding s. 344.01 (2) (cm), “shared vehicle owner” has the meaning given in s. 632.362 (1) (i).

SB386,,24 (2) Operator’s license required. A peer-to-peer motor vehicle sharing program may not enter into a motor vehicle sharing agreement with an individual who will operate a shared motor vehicle unless the individual satisfies any of the following:

SB386,,25 (a) The individual holds an operator’s license under ch. 343 that authorizes the individual to operate a motor vehicle of the class of the shared motor vehicle.

SB386,,26 (b) The individual is a nonresident of this state who satisfies all of the following:

SB386,,27 1. The individual holds a license issued by the state or country of the individual’s residence that authorizes the individual to operate a motor vehicle of the class of the shared motor vehicle in that state or country.

SB386,,28 2. The individual has attained the age of 18.

SB386,,29 (3) Responsibility for certain equipment. A peer-to-peer motor vehicle sharing program has sole responsibility for any equipment, including a global positioning system or other special equipment, that is put in or on a motor vehicle to monitor or facilitate the motor vehicle sharing transaction. The peer-to-peer motor vehicle sharing program shall agree to indemnify and hold harmless the shared vehicle owner for any damage to or theft of equipment described under this subsection during the motor vehicle sharing duration that is not caused by the shared vehicle owner. The peer-to-peer motor vehicle sharing program has the right to seek indemnity from the shared vehicle driver for any loss or damage to equipment described under this subsection during the motor vehicle sharing duration.

SB386,,30 (4) Safety recalls. (a) At the time a motor vehicle owner registers as a shared vehicle owner through a peer-to-peer motor vehicle sharing program and before the shared vehicle owner makes a motor vehicle available for sharing, the peer-to-peer motor vehicle sharing program shall do all of the following:

SB386,,31 1. Verify that the shared motor vehicle is not the subject of a safety recall for which the repairs have not been made.

SB386,,32 2. Notify the shared vehicle owner of the shared vehicle owner’s responsibilities under par. (b).

SB386,,33 (b) A shared vehicle owner that receives notice of a safety recall on the shared motor vehicle shall do all of the following, as applicable:

SB386,,34 1. Refrain from making the motor vehicle available for sharing until the safety recall repair has been made.

SB386,,35 2. If the motor vehicle has been made available for sharing before receipt of the notice of recall, remove the motor vehicle from the peer-to-peer motor vehicle sharing program as soon as practicable after receipt of the notice and until the safety recall repair has been made.

SB386,,36 3. If the motor vehicle is in possession of the shared vehicle driver at the time of receipt of the notice of recall, notify the peer-to-peer motor vehicle sharing program of the recall as soon as practicable after receipt of the notice.

SB386,,37 (5) Record retention. For each individual who will operate a shared motor vehicle under a motor vehicle sharing agreement, a peer-to-peer motor vehicle sharing program shall keep a record of the individual’s name and address, the individual’s operator’s license number, and the state or foreign country that issued the individual’s operator’s license.

SB386,8 Section 8. 632.362 of the statutes is created to read:

SB386,,39 632.362 Peer-to-peer motor vehicle sharing. (1) Definitions. In this section:

SB386,,40 (a) “Motor vehicle” has the meaning given in s. 344.01 (2) (b).

SB386,,41 (b) “Motor vehicle sharing agreement” means an agreement providing the terms and conditions, applicable to a shared vehicle driver and shared vehicle owner, that govern the use of a shared motor vehicle through a peer-to-peer motor vehicle sharing program.

SB386,,42 (c) “Motor vehicle sharing delivery period” means the period during which a shared motor vehicle is being delivered to the location of the motor vehicle sharing initiation time, if applicable, as documented by the governing motor vehicle sharing agreement.

SB386,,43 (d) “Motor vehicle sharing duration” means the period that commences with the motor vehicle sharing delivery period or, if there is no motor vehicle sharing delivery period, that commences with the motor vehicle sharing initiation time and, in either case, ends at the motor vehicle sharing termination time.

SB386,,44 (e) “Motor vehicle sharing initiation time” means the time when the motor vehicle to be shared becomes subject to the control of the shared vehicle driver at or after the time the reservation of a shared motor vehicle is scheduled to begin as documented in the records of a peer-to-peer motor vehicle sharing program.

SB386,,45 (f) “Motor vehicle sharing termination time” means the earliest of the following:

SB386,,46 1. The expiration of the time agreed upon for the use of the shared motor vehicle according to the terms of the motor vehicle sharing agreement, if the shared motor vehicle is delivered to the location that is specified in the motor vehicle sharing agreement.

SB386,,47 2. The time the shared motor vehicle is returned by the shared vehicle driver to a location as alternatively agreed upon by the shared vehicle owner and shared vehicle driver, as communicated through a peer-to-peer motor vehicle sharing program, which alternatively agreed upon location shall be incorporated into the motor vehicle sharing agreement.