Bill Text: IL HB1497 | 2023-2024 | 103rd General Assembly | Engrossed

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Amends the Automobile Renting Occupation and Use Tax Act. Amends various definitions to exempt car-sharing from the tax imposed under the Act if tax due on the automobile under the Retailers' Occupation Tax Act or Use Tax Act was paid upon the purchase of the automobile or when the automobile was brought into Illinois. Provides that the taxes imposed under the Act do not apply to any amounts paid or received for peer-to-peer car sharing, as defined in the Car-Sharing Program Act, or the privilege of sharing a shared vehicle through a car-sharing program, as defined in the Car-Sharing Program Act, if the shared vehicle owner paid applicable taxes upon the purchase of the automobile. Defines "applicable taxes". Further amends the Illinois Vehicle Code. Provides that a person who rents a motor vehicle to another may hold the renter liable for physical or mechanical damage to the rented motor vehicle that occurs during the time the motor vehicle is under the rental agreement. Creates limits on liability due to theft based on the MSRP of the stolen vehicle. Provides that, beginning on the effective date and for 6 months after, a person who rents a motor vehicle to another shall provide notice to the renter of the motor vehicle of the changes reflected in the amendatory Act. Requires the notice to be posted in a conspicuous and unobscured place that is separate and apart from any other information. Effective immediately, except that the changes to the Illinois Vehicle Code take effect on January 1, 2024.

Spectrum: Moderate Partisan Bill (Democrat 4-1)

Status: (Passed) 2023-08-11 - Public Act . . . . . . . . . 103-0520 [HB1497 Detail]

Download: Illinois-2023-HB1497-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 6-305.2 as follows:
(625 ILCS 5/6-305.2)
Sec. 6-305.2. Limited liability for damage.
(a) Damage to private passenger vehicle. A person who
rents a motor vehicle to another may hold the renter liable to
the extent permitted under subsections (b) through (d) for
physical or mechanical damage to the rented motor vehicle that
occurs during the time the motor vehicle is under the rental
agreement.
(b) Limits on liability: vehicle MSRP $50,000 or less. The
total liability of a renter under subsection (a) for damage to
a motor vehicle with a Manufacturer's Suggested Retail Price
(MSRP) of $50,000 or less may not exceed all of the following:
(1) The lesser of:
(A) Actual and reasonable costs that the person
who rents a motor vehicle to another incurred to
repair the motor vehicle or that the rental company
would have incurred if the motor vehicle had been
repaired, which shall reflect any discounts, price

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reductions, or adjustments available to the rental
company; or
(B) The fair market value of that motor vehicle
immediately before the damage occurred, as determined
in the customary market for the retail sale of that
motor vehicle; and
(2) Actual and reasonable costs incurred by the loss
due to theft of the rental motor vehicle up to $2,000;
provided, however, that if it is established that the
renter or an authorized driver failed to exercise ordinary
care while in possession of the vehicle or that the renter
or an authorized driver committed or aided and abetted the
commission of the theft, then the damages shall be the
actual and reasonable costs of the rental vehicle up to
its fair market value, as determined by the customary
market for the sale of that vehicle.
For purposes of this subsection (b), for the period prior
to June 1, 1998, the maximum amount that may be recovered from
an authorized driver shall not exceed $6,000; for the period
beginning June 1, 1998 through May 31, 1999, the maximum
recovery shall not exceed $7,500; and for the period beginning
June 1, 1999 through May 31, 2000, the maximum recovery shall
not exceed $9,000. Beginning June 1, 2000, and annually each
June 1 thereafter, the maximum amount that may be recovered
from an authorized driver shall be increased by $500 above the
maximum recovery allowed immediately prior to June 1 of that

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year.
(b-5) (Blank). Limits on liability: vehicle MSRP more than
$50,000. The total liability of a renter under subsection (a)
for damage to a motor vehicle with a Manufacturer's Suggested
Retail Price (MSRP) of more than $50,000 may not exceed all of
the following:
(1) the lesser of:
(A) actual and reasonable costs that the person
who rents a motor vehicle to another incurred to
repair the motor vehicle or that the rental company
would have incurred if the motor vehicle had been
repaired, which shall reflect any discounts, price
reductions, or adjustments available to the rental
company; or
(B) the fair market value of that motor vehicle
immediately before the damage occurred, as determined
in the customary market for the retail sale of that
motor vehicle; and
(2) the actual and reasonable costs incurred by the
loss due to theft of the rental motor vehicle up to
$40,000.
The maximum recovery for a motor vehicle with a
Manufacturer's Suggested Retail Price (MSRP) of more than
$50,000 under this subsection (b-5) shall not exceed $40,000
on the effective date of this amendatory Act of the 99th
General Assembly. On October 1, 2016, and for the next 3 years

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thereafter, the maximum amount that may be recovered from an
authorized driver under this subsection (b-5) shall be
increased by $2,500 above the prior year's maximum recovery.
On October 1, 2020, and for each year thereafter, the maximum
amount that may be recovered from an authorized driver under
this subsection (b-5) shall be increased by $1,000 above the
prior year's maximum recovery.
(c) Multiple recoveries prohibited. Any person who rents a
motor vehicle to another may not hold the renter liable for any
amounts that the rental company recovers from any other party.
(d) Repair estimates. A person who rents a motor vehicle
to another may not collect or attempt to collect the amount
described in subsection (b) or (b-5) unless the rental company
obtains an estimate from a repair company or an appraiser in
the business of providing such appraisals on the costs of
repairing the motor vehicle, makes a copy of the estimate
available upon request to the renter who may be liable under
subsection (a), or the insurer of the renter, and submits a
copy of the estimate with any claim to collect the amount
described in subsection (b) or (b-5). In order to collect the
amount described in subsection (b-5), a person renting a motor
vehicle to another must also provide the renter's personal
insurance company with reasonable notice and an opportunity to
inspect damages.
(d-5) In the event of loss due to theft of the rental motor
vehicle with a MSRP more than $50,000, the rental company

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shall provide reasonable notice of the theft to the renter's
personal insurance company.
(e) Duty to mitigate. A claim against a renter resulting
from damage or loss to a rental vehicle must be reasonably and
rationally related to the actual loss incurred. A rental
company shall mitigate damages where possible and shall not
assert or collect any claim for physical damage which exceeds
the actual costs of the repair, including all discounts or
price reductions.
(f) No rental company shall require a deposit or an
advance charge against the credit card of a renter, in any
form, for damages to a vehicle which is in the renter's
possession, custody, or control. No rental company shall
require any payment for damage to the rental vehicle, upon the
renter's return of the vehicle in a damaged condition, until
after the cost of the damage to the vehicle and liability
therefor is agreed to between the rental company and renter or
is determined pursuant to law.
(g) If insurance coverage exists under the renter's
personal insurance policy and the coverage is confirmed during
regular business hours, the renter may require that the rental
company must submit any claims to the renter's personal
insurance carrier as the renter's agent. The rental company
shall not make any written or oral representations that it
will not present claims or negotiate with the renter's
insurance carrier. For purposes of this Section, confirmation

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of coverage includes telephone confirmation from insurance
company representatives during regular business hours. After
confirmation of coverage, the amount of claim shall be
resolved between the insurance carrier and the rental company.
(Source: P.A. 99-201, eff. 10-1-15.)