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SB109 ENROLLED
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SB109
W1BVX5E-2
By Senator Elliott
RFD: County and Municipal Government
First Read: 13-Jan-26
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First Read: 13-Jan-26
Enrolled, An Act,
Relating to motor vehicles; to establish the
Peer-to-Peer Car Sharing Program Act; to provide requirements
for the operation of peer-to-peer car sharing programs; and to
amend Section 40-12-222, Code of Alabama 1975, as last amended
by Act 2025-240, to provide for the taxation of peer-to-peer
car sharing programs under certain conditions.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. Sections 1 through 14 of this act shall be
known and may be cited as the Peer-to-Peer Car Sharing Program
Act.
Section 2. As used in Sections 1 through 14 of this
act, the following words have the following meanings:
(1) CAR SHARING DELIVERY PERIOD. The period of time
during which a shared vehicle is being delivered to the
location of the car sharing start time, if applicable, as
documented by the governing peer-to-peer car sharing program
agreement.
(2) CAR SHARING PERIOD. The period of time that
commences with the car sharing delivery period or, if there is
no car sharing delivery period, that commences with the car
sharing start time and, in either case, ends at the car
sharing termination time.
(3) CAR SHARING START TIME. The time when the shared
vehicle becomes subject to the control of the shared vehicle
driver at or after the time the reservation of a shared
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driver at or after the time the reservation of a shared
vehicle is scheduled to begin, as documented in the records of
a peer-to-peer car sharing program.
(4) CAR SHARING TERMINATION TIME. The earliest of the
following events:
a. The expiration of the agreed-upon period of time
established for the use of a shared vehicle according to the
terms of the peer-to-peer car sharing program agreement, if
the shared vehicle is delivered to the agreed upon location in
the agreement.
b. When the shared vehicle is returned to a location as
alternatively agreed upon by the shared vehicle owner and the
shared vehicle driver as communicated through a peer-to-peer
car sharing program, if the alternatively agreed upon location
is incorporated into the peer-to-peer car sharing program
agreement.
c. When the shared vehicle owner, or the shared vehicle
owner's authorized designee, takes possession and control of
the shared vehicle.
(5) PEER-TO-PEER CAR SHARING. The authorized use of a
vehicle by an individual other than the vehicle's owner
through a peer-to-peer car sharing program. The term does not
include any of the following:
a. A rental or leasing transaction of tangible personal
property which is subject to Article 4 of Chapter 12 of Title
40, Code of Alabama 1975, except as provided by Section
40-12-222(a)(2)b.1., Code of Alabama 1975.
b. Hiring, leasing, or renting a motor vehicle under a
rental agreement governed by Section 32-15-6, Code of Alabama
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rental agreement governed by Section 32-15-6, Code of Alabama
1975.
(6) PEER-TO-PEER CAR SHARING PROGRAM. A business
platform that connects vehicle owners with drivers to enable
the sharing of vehicles for financial consideration. The term
does not include any of the following:
a. A person engaging or continuing within this state in
the business of leasing or renting any automotive vehicle or
truck trailer, semitrailer, or house trailer that is subject
to Article 4 of Chapter 12 of Title 40, Code of Alabama 1975.
b. A person facilitating a rental transaction of
tangible personal property which is subject to Article 4 of
Chapter 12 of Title 40, Code of Alabama 1975, except as
provided by Section 40-12-222(a)(2)b.1., Code of Alabama 1975.
c. A motor vehicle rental company licensed pursuant to
Section 27-7-5.1, Code of Alabama 1975.
d. A person facilitating rental transactions as
described in Section 40-2-11(a)(7)c., Code of Alabama 1975.
(7) PEER-TO-PEER CAR SHARING PROGRAM AGREEMENT. The
terms and conditions applicable to a shared vehicle owner and
a shared vehicle driver that govern the use of a shared
vehicle through a peer-to-peer car sharing program. The term
does not include any of the following:
a. A motor vehicle rental agreement governed by Section
32-15-6, Code of Alabama 1975.
b. A rental agreement with a motor vehicle rental
company licensed pursuant to Section 27-7-5.1, Code of Alabama
1975.
(8) SHARED VEHICLE. A vehicle that is available for
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(8) SHARED VEHICLE. A vehicle that is available for
sharing through a peer-to-peer car sharing program. The term
does not include an automotive vehicle or a truck trailer,
semitrailer, or house trailer that is subject to Article 4 of
Chapter 12 of Title 40, Code of Alabama 1975, except as
provided by Section 40-12-222(a)(2)b.1., Code of Alabama 1975.
(9) SHARED VEHICLE DRIVER. An individual who has been
authorized to drive a shared vehicle by the shared vehicle
owner under a peer-to-peer car sharing program agreement. The
term does not include a person hiring, leasing, or renting a
motor vehicle under a rental agreement with a motor vehicle
rental company licensed pursuant to Section 27-7-5.1, Code of
Alabama 1975, or under a rental agreement governed by Section
32-15-6, Code of Alabama 1975.
(10) SHARED VEHICLE OWNER. The registered owner, or a
person or entity designated by the registered owner, of a
vehicle made available for sharing to shared vehicle drivers
through a peer-to-peer car sharing program. The term does not
include any of the following:
a. A lessor that is subject to Article 4 of Chapter 12
of Title 40, Code of Alabama 1975, except as provided by
Section 40-12-222(a)(2)b.1., Code of Alabama 1975.
b. A motor vehicle rental company licensed pursuant to
Section 27-7-5.1, Code of Alabama 1975.
Section 3. (a) Except as provided in subsection (b), a
peer-to-peer car sharing program shall assume liability of a
shared vehicle owner for bodily injury or property damage to
third parties during the car sharing period in an amount
stated in the peer-to-peer car sharing program agreement. The
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stated in the peer-to-peer car sharing program agreement. The
amount shall not be less than the proof of financial
responsibility required under Chapter 7 of Title 32, Code of
Alabama 1975.
(b) Notwithstanding the definition of "car sharing
termination time," the assumption of liability under
subsection (a) does not apply to any shared vehicle owner
under either of the following circumstances:
(1) When a shared vehicle owner makes an intentional or
fraudulent material misrepresentation or omission to the
peer-to-peer car sharing program before the car sharing period
in which the loss occurred.
(2) When a shared vehicle owner acts in concert with a
shared vehicle driver who fails to return the shared vehicle
pursuant to the terms of the peer-to-peer car sharing program
agreement.
(c) Notwithstanding the definition of "car sharing
termination time," the assumption of liability under
subsection (a) applies to bodily injury or property damage to
third parties as required under Chapter 7 of Title 32, Code of
Alabama 1975.
(d) A peer-to-peer car sharing program shall ensure
that during each car sharing period the shared vehicle owner
and the shared vehicle driver are insured under a motor
vehicle liability insurance policy that does all of the
following:
(1) Provides insurance coverage in amounts no less than
the minimum amounts required for proof of financial
responsibility described under Section 32-7-2, Code of Alabama
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responsibility described under Section 32-7-2, Code of Alabama
1975.
(2) Does either of the following:
a. Recognizes that the shared vehicle insured under the
policy is made available and used through a peer-to-peer car
sharing program.
b. Does not exclude the use of a shared vehicle by a
shared vehicle driver.
(e) The insurance required under subsection (d) may be
purchased by any of the following:
(1) A shared vehicle owner.
(2) A shared vehicle driver.
(3) A peer-to-peer car sharing program.
(4) Any combination of a shared vehicle owner, a shared
vehicle driver, or a peer-to-peer car sharing program.
(f) The insurance described in subsection (e), that is
satisfying the requirement of subsection (d), shall be primary
during each car sharing period. If a claim occurs in another
state with minimum financial responsibility limits higher than
those described in Section 32-7-2, Code of Alabama 1975,
during the car sharing period, the insurance maintained under
subsection (e) shall satisfy the difference in minimum
coverage amounts, up to the applicable policy limits.
(g) The insurer, insurers, or peer-to-peer car sharing
program providing coverage under subsection (d) or (e) shall
assume primary liability for a claim when either of the
following occurs:
(1) A dispute exists as to who was in control of the
shared vehicle at the time of the loss and the peer-to-peer
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shared vehicle at the time of the loss and the peer-to-peer
car sharing program does not have available, did not retain,
or fails to provide the information required by Section 6.
(2) A dispute exists as to whether the shared vehicle
was returned to the alternatively agreed upon location as
required under Section 2(4)b.
(h) If insurance purchased by a shared vehicle owner or
shared vehicle driver pursuant to subsection (e) has lapsed or
does not provide the required coverage, insurance maintained
by a peer-to-peer car sharing program shall provide the
coverage required by subsection (d) beginning with the first
dollar of a claim and shall have the duty to defend the claim
except under circumstances as set forth in subsection (b).
(i) Coverage under an automobile insurance policy
maintained by the peer-to-peer car sharing program may not be
dependent on another automobile insurer first denying a claim
and may not require another automobile insurance policy to
first deny a claim.
(j) Nothing in this section does either of the
following:
(1) Limits the liability of a peer-to-peer car sharing
program for any act or omission of the peer-to-peer car
sharing program which results in injury to any person as a
result of the use of a shared vehicle through a peer-to-peer
car sharing program.
(2) Limits the ability of the peer-to-peer car sharing
program to seek indemnification, by contract, from the shared
vehicle owner or the shared vehicle driver for economic loss
sustained by the peer-to-peer car sharing program resulting
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sustained by the peer-to-peer car sharing program resulting
from a breach of the terms and conditions of the peer-to-peer
car sharing program agreement.
Section 4. When the owner of a vehicle registers as a
shared vehicle owner on a peer-to-peer car sharing program,
and before the owner makes a vehicle available for
peer-to-peer car sharing on the peer-to-peer car sharing
program, the peer-to-peer car sharing program shall notify the
owner that, if the vehicle has a lien against the vehicle, the
use of the vehicle through the peer-to-peer car sharing
program, including use without physical damage coverage, may
violate the terms of the contract with the lienholder.
Section 5. (a) An authorized insurer that writes motor
vehicle liability insurance in this state may exclude any and
all coverage and the duty to defend or indemnify for any claim
afforded under a shared vehicle owner's motor vehicle
liability insurance policy, including, but not limited to, all
of the following:
(1) Liability coverage for bodily injury and property
damage.
(2) Personal injury protection coverage.
(3) Uninsured and underinsured motorist coverage.
(4) Medical payments coverage.
(5) Comprehensive physical damage coverage.
(6) Collision physical damage coverage.
(b) Nothing in Sections 1 through 14 of this act
invalidates, limits, or restricts any of the following:
(1) An exclusion contained in a motor vehicle liability
insurance policy, including any insurance policy in use or
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insurance policy, including any insurance policy in use or
approved for use, which excludes coverage for motor vehicles
made available for rent, sharing, hire, or for any business
use.
(2) An insurer's ability under existing law to
underwrite any insurance policy.
(3) An insurer's ability under existing law to cancel
and nonrenew policies.
Section 6. (a) A peer-to-peer car sharing program shall
collect and verify records pertaining to the use of all shared
vehicles used in a peer-to-peer car sharing program,
including, but not limited to, all of the following:
(1) The number of times the shared vehicle is used.
(2) Car sharing period pick up and drop off locations.
(3) Fees paid by the shared vehicle driver.
(4) Revenues received by the shared vehicle owner.
(b) To facilitate a claim coverage investigation,
settlement, negotiation, or litigation, the peer-to-peer car
sharing program, upon request, shall provide the records
collected under subsection (a) to the shared vehicle owner,
the shared vehicle owner's insurer, or the shared vehicle
driver's insurer.
(c) The peer-to-peer car sharing program shall retain
the records for a time period not less than the applicable
personal injury statute of limitations.
Section 7. A peer-to-peer car sharing program and a
shared vehicle owner shall be exempt from vicarious liability,
consistent with 49 U.S.C. § 30106, under any state or local
law that imposes liability solely based on vehicle ownership.
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law that imposes liability solely based on vehicle ownership.
Section 8. A motor vehicle insurer that defends or
indemnifies a claim against a shared vehicle that is excluded
under the terms of its policy shall have the right to seek
contribution from the motor vehicle insurer of the
peer-to-peer car sharing program if the claim is both of the
following:
(1) Made against the shared vehicle owner or the shared
vehicle driver for loss or injury that occurs during the car
sharing period.
(2) Excluded under the terms of its policy.
Section 9. (a) Notwithstanding any law to the contrary,
a peer-to-peer car sharing program shall have an insurable
interest in a shared vehicle during the car sharing period.
(b) A peer-to-peer car sharing program may own and
maintain as the named insured one or more policies of motor
vehicle liability insurance that provide coverage for any of
the following:
(1) Liabilities assumed by the peer-to-peer car sharing
program under a peer-to-peer car sharing program agreement.
(2) Any liability of the shared vehicle owner.
(3) Damage or loss to the shared motor vehicle.
(4) Any liability of the shared vehicle driver.
Section 10. Each peer-to-peer car sharing program
agreement made in this state shall disclose to the shared
vehicle owner and the shared vehicle driver all of the
following:
(1) Any right of the peer-to-peer car sharing program
to seek indemnification from the shared vehicle owner or the
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to seek indemnification from the shared vehicle owner or the
shared vehicle driver for economic loss sustained by the
peer-to-peer car sharing program resulting from a breach of
the terms and conditions of the peer-to-peer car sharing
program agreement.
(2) That a motor vehicle liability insurance policy
issued to the shared vehicle owner for the shared vehicle or
to the shared vehicle driver does not provide a defense or
indemnification for any claim asserted by the peer-to-peer car
sharing program.
(3) That the peer-to-peer car sharing program's
insurance coverage on the shared vehicle owner and the shared
vehicle driver is in effect only during each car sharing
period and that, for any use of the shared vehicle by the
shared vehicle driver after the car sharing termination time,
the shared vehicle driver and the shared vehicle owner may not
have insurance coverage.
(4) The daily rate, fees, and, if applicable, any
insurance or protection package costs that are charged to the
shared vehicle owner or the shared vehicle driver.
(5) That the shared vehicle owner's motor vehicle
liability insurance may not provide coverage for a shared
vehicle, including as a commercial rental.
(6) An emergency telephone number to personnel capable
of fielding roadside assistance and other customer service
inquiries.
(7) Whether there are conditions under which a shared
vehicle driver must maintain a personal automobile insurance
policy with certain applicable coverage limits on a primary
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policy with certain applicable coverage limits on a primary
basis in order to book a shared motor vehicle.
(8) The tire requirements for motor vehicles operated
on the highways of the state under Section 32-5-210, Code of
Alabama 1975.
Section 11. (a) A peer-to-peer car sharing program may
not enter into a peer-to-peer car sharing program agreement
with an individual who will operate a shared vehicle unless
the individual meets any of the following requirements:
(1) Is 18 years of age or older and holds a driver
license issued under Section 32-6-1, Code of Alabama 1975,
which authorizes him or her to operate vehicles of the class
of the shared vehicle.
(2) Is a nonresident who meets both of the following
requirements:
a. Has a driver license issued by the state or country
of his or her residence which authorizes him or her to drive
vehicles of the class of the shared vehicle.
b. Is 18 years of age or older.
(3) Is 18 years of age or older and is specifically
authorized by Section 32-6-2, Code of Alabama 1975, to drive
vehicles of the class of the shared vehicle.
(b) A peer-to-peer car sharing program shall keep a
record of all of the following:
(1) The name and address of the shared vehicle driver.
(2) A copy of the driver license of the shared vehicle
driver and each other person, if any, who will operate the
shared vehicle.
(3) The place of issuance of the driver license.
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(3) The place of issuance of the driver license.
Section 12. (a) A peer-to-peer car sharing program
shall have sole responsibility for any equipment, including a
Global Positioning System or other special equipment, that is
placed in or on the shared vehicle to monitor or facilitate
the car sharing transaction.
(b) A peer-to-peer car sharing program shall indemnify
and hold harmless the shared vehicle owner for any damage to
or theft of such equipment during the car sharing period not
caused by the shared vehicle owner.
(c) A peer-to-peer car sharing program may seek
indemnity from the shared vehicle driver for any loss or
damage to such equipment that occurs during the car sharing
period.
Section 13. (a) When a vehicle owner registers as a
shared vehicle owner on a peer-to-peer car sharing program,
and before a shared vehicle owner makes a shared vehicle
available for peer-to-peer car sharing on the peer-to-peer car
sharing program, the peer-to-peer car sharing program shall do
both of the following:
(1) Verify that the shared vehicle does not have any
safety recalls on the vehicle for which the repairs have not
been made.
(2) Notify the shared vehicle owner of the requirements
under subsection (b).
(b)(1) If a shared vehicle owner has received an actual
notice of a safety recall on a shared vehicle, the shared
vehicle owner may not make the vehicle available as a shared
vehicle on a peer-to-peer car sharing program until the safety
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vehicle on a peer-to-peer car sharing program until the safety
recall repair has been made.
(2) If a shared vehicle owner receives an actual notice
of a safety recall on a shared vehicle while the shared
vehicle is made available on the peer-to-peer car sharing
program, the shared vehicle owner shall change the status of
the vehicle to unavailable as soon as practicably possible.
The shared vehicle may not be listed as available until the
safety recall repair has been made.
(3) If a shared vehicle owner receives an actual notice
of a safety recall on a shared vehicle while the shared
vehicle is in the possession of a shared vehicle driver and
engaged in peer-to-peer car sharing during a car sharing
period, the shared vehicle owner shall notify the peer-to-peer
car sharing program about the safety recall as soon as
practicably possible after receiving the notice of the safety
recall. The shared vehicle may not be listed as available
until the safety recall repair has been made.
Section 14. (a) Nothing in Sections 1 through 14 of
this act shall expand or restrict in any manner the respective
rights, obligations, or limitations of motor vehicle
manufacturers and licensed new motor vehicle dealers as set
forth in Chapter 20 of Title 8, Code of Alabama 1975.
(b) Nothing in Sections 1 through 14 of this act limits
the right of an airport authority to regulate and impose fees
on peer-to-peer car sharing programs that enable peer-to-peer
car sharing at an airport.
Section 15. Section 40-12-222, Code of Alabama 1975, as
last amended by Act 2025-240, is amended to read as follows:
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last amended by Act 2025-240, is amended to read as follows:
"§40-12-222
(a)(1) In addition to all other taxes now imposed by
law, there is hereby levied and shall be collected a privilege
or license tax on each person engaging or continuing within
this state in the business of leasing or renting tangible
personal property at the rate of four percent of the gross
proceeds derived by the lessor from the lease or rental of
tangible personal property.
(2) Thea. Except as provided in paragraph b., the
privilege or license tax on each person engaging or continuing
within this state in the business of leasing or renting any
automotive vehicle or truck trailer, semitrailer, or house
trailer shall be at the rate of one and one-half percent of
the gross proceeds derived by the lessor from the lease or
rental of such automotive vehicle or truck trailer,
semitrailer, or house trailer.
b.1. For purposes of paragraph a. only, the business of
leasing or renting an automotive vehicle includes peer-to-peer
car sharing as defined in Section 2 of the act amending this
section. The gross proceeds collected by a peer-to-peer car
sharing program as the leasing facilitator under Sections 1
through 14 of the act amending this section shall be subject
to the tax set forth in paragraph a. only for those
transactions where the shared vehicle was not subject to the
applicable sales and use taxes upon purchase in the
jurisdiction in which the shared vehicle owner purchased the
vehicle or if sales and use taxes were not paid at the time of
initial titling and registration in this state.
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initial titling and registration in this state.
2. The peer-to-peer car sharing program shall require a
shared vehicle owner to certify if the shared vehicle owner
paid the applicable sales and use taxes upon purchase or at
the time of initial titling and registration in this state.
The peer-to-peer car sharing program shall retain records of a
shared vehicle owner's certification under this paragraph.
c. Notwithstanding paragraph b., beginning October 1,
2026, any local rental tax levied pursuant to Section
45-37-244.01 shall be collected and remitted by any
peer-to-peer car sharing program.
(3) The tax levied in this article shall not apply to
any leasing or rental, as lessor, by the state or any
municipality or county in the state, or any public corporation
organized under the laws of the state, including, without
limiting the generality of the foregoing, any corporation
organized under the provisions of Division 1 of Article 4 of
Chapter 54, Title 11 Division 1 of Article 4 of Chapter 54 of
Title 11 .
(4) The privilege or license tax on each person or firm
engaging or continuing within this state in the business of
the leasing and rental of linens and garments shall be at the
rate of two percent of the gross proceeds derived by the
lessor from the lease or rental of the linens and garments.
(b) Notwithstanding subsection (a), nothing shall
prohibit a lessor subject to a state or local privilege or
license tax from passing the amounts on to a lessee by adding
the taxes to the leasing price or otherwise; provided,
however, that all amounts passed on to the lessee shall be
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however, that all amounts passed on to the lessee shall be
includable in the gross proceeds derived from the lease of
tangible personal property which shall be subject to the
privilege or license tax owed by the lessor.
(c) The state and applicable local privilege or license
taxes applicable to a lease or rental transaction to which a
lessor is subject shall be determined as follows:
(1) Except for automotive vehicles as provided in
subdivision (2) and commercial aircraft as provided in
subdivision (3), the following shall apply:
a. When tangible personal property is delivered to the
lessee by the lessor or his or her agent, the privilege or
license tax levy shall be determined based on where the
property is delivered.
b. When tangible personal property is picked up at the
lessor's rental location by the lessee or his or her agent,
the privilege or license tax levy shall be determined based on
the rental location.
(2) For automotive vehicles required to be registered
pursuant to Section 32-6-61, each lease payment is considered
a separate lease transaction and occurs in the location as
provided below and the following rules shall apply:
a. The privilege or license tax levy on any
nonrecurring gross proceeds due at the inception of the lease
to a new motor vehicle dealer or a used motor vehicle dealer
licensed pursuant to Section 40-12-391, including any
capitalized cost reduction or other fee that is retained by
the dealer in connection with its initiation of the lease,
shall be determined based on the location of the dealer where
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shall be determined based on the location of the dealer where
the lease was initiated.
b. The privilege or license tax levy on gross proceeds
other than those described in paragraph a., including the
initial lease or rental payment and all subsequent lease or
rental payments, shall be determined based on the garage
address of the lessee as provided to the county licensing
official. The lessor is considered to be engaging or
continuing within this state in the business of leasing or
renting tangible personal property when its lessee has a
garage address within this state.
(3) For commercial aircraft, which are aircraft used by
certificated or licensed air carriers, the privilege or
license tax levy on gross proceeds, including the initial
lease or rental payment and all subsequent lease or rental
payments, shall be determined based on the location of the
aircraft when the aircraft is first entered into revenue
service."
Section 16. This act shall become effective on October
1, 2026.
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1, 2026.
________________________________________________
President and Presiding Officer of the Senate
________________________________________________
Speaker of the House of Representatives
SB109
Senate 27-Jan-26
I hereby certify that the within Act originated in and passed
the Senate.
Patrick Harris,
Secretary.
House of Representatives
Passed: 12-Feb-26
By: Senator Elliott
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