The Task Force on Commerce, Insurance and Economic Development will gather for our meeting on Thursday, July 23 from 2:30-5:30 PM.

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1 Memorandum To: Members of the Task Force on Commerce, Insurance and Economic Development From: Michael Hough Director, Commerce, Insurance and Economic Development Date: June 18, 2015 Re: 35-Day Mailing 2015 ALEC Annual Meeting The American Legislative Exchange Council will host its 2015 Annual Meeting at the Manchester Grand Hyatt in San Diego, California July 22-July 24. You may register here or call to register via phone. The Task Force on Commerce, Insurance and Economic Development will gather for our meeting on Thursday, July 23 from 2:30-5:30 PM. Please find the following materials enclosed: ALEC Annual Meeting Agenda-at-a-Glance Tentative Task Force Agenda Draft Model Policy for Consideration ALEC Mission Statement/Reimbursement Policy For future reference, this information can also be viewed at I look forward to seeing you in San Diego, California. As always, if you have any questions or comments regarding the meeting or the Task Force, please contact me at or mhough@alec.org. Sincerely, Michael Hough Director, Commerce, Insurance and Economic Development Task Force o: c: mhough@alec.org

2 Task Force on Commerce, Insurance and Economic Development Tentative Meeting Agenda Annual Meeting 2015 San Diego, California Thursday, July 23, :30-5:30 PM 2:30 PM Call to Order Welcome and Introductions Approval of Minutes from the Spring Task Force Summit 2015 New member introductions Presentations and Model Policy 2:45 PM Model Policy Consideration: Proposed amendment to ALEC s Independent Contractor Act 3:05 PM Presentation: Labor Reform 3:20 PM Discussion: Transportation Network Companies Legislation 3:40 PM Presentation: Transportation Presentation 4:00 PM Model Policy Consideration: Direct to Customer Online Automobile Sales Act 4:30 PM Presentation: Department of Justice: Operation Chokepoint 4:45 PM Presentation: Occupational Licensing Litigation Update 5:05 PM For the Good of the Order 5:30 PM Adjournment To access an electronic copy of these documents, please visit:

3 Draft Amendments to the Existing ALEC Independent Contractor Definition Act Summary Many workers often characterize themselves as independent contractors due to beneficial tax incentives, etc. However, when the worker is injured on the job, the worker may want to characterize him/herself as an employee in order to draw from the workers' compensation system, even though the worker may not have paid into the system. Confusion in the precise definition of an independent contractor has contributed to conflicting decisions by the courts on this matter. The Independent Contractor Definition Act simplifies the criteria used to define independent contractors with respect to private and public employees for the purpose of workers' compensation. Model Policy Section 1. {Short Title.} This Act shall be known as the Independent Contractor Definition Act. Section 2. {Legislative Declarations.} (A) Simplifying the rules with respect to independent contractors was the top vote-getter at the 1995 White House Conference on Small Business. Conference delegates recommended that government needs to "recognize the legitimacy of an independent contractor." The Conference found that the current common law is "too subjective" and called upon the government to establish "realistic and consistent guidelines." (B) It is in the best interests of business and government to have fair and objective rules for determining who is an employee and who is an independent contractor. Section 3. {Definition Clarified; Private Employment.} (A) "Employee," with respect to private employment, means any person in the service of an employer subject to the provisions of this chapter under any express or implied, oral or written contract of hire except a railroad engaged in interstate commerce whose rights are governed by the Federal Employers' Liability Act. If they elect to be personally covered by this chapter, "employee" includes persons who regularly operate businesses or practice their trades, profession, or occupations, whether individually, or in partnership, or association with other persons, whether or not they hire others as employees. 30 1

4 (B) (1) Subject to the preceding subparagraph, any person, other than a direct seller or qualified real estate broker, or agent, or real estate appraiser or a registered representative of a securities broker-dealer, who performs services for pay for an employer, is presumed to be an employee. This presumption may be rebutted by proof that an individual meets all of the following criteria: (a) The person possesses or has applied for a federal employer identification number or social security number, or in the alternative, has agreed in writing to carry out the responsibilities imposed on employers under this chapter. (b) The person has control and discretion over the means and manner or performance of the work in achieving the result of the work. (c) The person has control over the time when the work is performed, and the time performance is not dictated by the employer. However, this criterion does not prohibit the employer from reaching agreement with the person as to completion schedule, range of work hours and maximum number of work hours to be provided by the person, and in the case of entertainment, the time such entertainment is to be presented. (d) The person holds himself or herself out to be in business for himself or herself. (e) The person is not required to work exclusively for the employer, or, if not exempt from the definition of "employee" under subparagraph (B)(1) of this section, the person signs a written contract with the employer which: (i) states the employer's intent to hire the person as an independent contractor; and (ii) states that the person is presumed to be an employee unless all provisions specified in subparagraphs (B)(1)(a) through (B)(1)(d) of this section are met, in which case the person shall be classified as an independent contractor; and (iii) explicitly and accurately details the provisions specified in subparagraphs (B)(1)(a) through (B)(1)(d) of this section in such a way that the criteria is clear and fully understandable without having to physically reference this section within state statutes. (2) For the purpose of this subparagraph, "qualified real estate broker or agent" means a person who is a licensed real estate broker or licensed real estate 64 2

5 salesman and whose remuneration as such is directly related to sales or other output including performance of services, rather than to the number of hours worked. (3) For the purposes of this subparagraph, "direct seller" means a person: (a) Engaged in selling or soliciting the sale of consumer products, services or intangibles to any buyer on a buy-sell basis, deposit-commission basis or any similar basis for resale by the buyer or any other person in the home or other than in a permanent retail establishment; or engaged in selling or soliciting the sale of consumer products, services or intangibles in the home or otherwise than in a permanent retail establishment; and (b) Who receives substantially all remuneration as such in a direct relationship to sales or other output including the performance of services, rather than the number of hours worked; and (c) Whose services are performed pursuant to a written contract with the person for whom the services are performed, which provide that the individual will not be treated as an employee for federal tax purposes. (4) For the purposes of this subparagraph, "real estate appraiser" means a person who is a real estate appraiser and whose remuneration as such is by way of a fee and is directly related to services or other work product rather than to the number of hours worked. Section 4. {Definition Clarified; Public Employment.} (A) "Employee," with respect to public employment, means: (1) Any person in the service of an employer, including member of the general court, under an express or implied contract of hire and every elected or appointed official or officer of the state or any political subdivision or agency thereof while performing official duties. (2) Any person who is a call firefighter or special police officer, volunteer or auxiliary member of a fire or police department, ambulance or rescue service, or the state police, whether paid or not, for purposes of this title, shall be deemed to be an employee of the political subdivision in which the department is organized. (3) Any person who is a regularly enrolled volunteer member or trainee of the emergency management corps of this state, for purposes of this title, shall be deemed to be an employee of the state. 96 3

6 (4) Any person who fights a forest or other type of fire and who is either voluntarily under the direction of those authorized to give direction in the fighting of fires or who is under statutory compulsion to fight fires, for purposes of this title, shall be deemed to be an employee of the state or municipality. (5) Any person who assists in a search for or an attempted rescue of another, and who is voluntarily under the direction of those authorized to give direction in searching for or attempting to rescue or rescuing another, for purposes of this title only, shall be deemed to be an employee of the state with respect to such activity. (B) "Employee," with respect to public employment shall not include any inmate of a correctional facility who is required to work or perform services for which no significant remuneration is provided or any volunteer not otherwise specified who performs services for which no significant remuneration is provided. Section 5. {Severability Clause.} Section 6. {Repealer Clause.} Section 7. {Effective Date.} 4

7 Direct to Customer Online Automobile Sales Act {Title, enacting clause, etc.} Section 1. {Title} (1) This Act may be cited as The Direct to Customer Online Automobile Sales Act Section 2. Definitions (1) "Authorized service center" means a person who: (a) is authorized by an online dealer to complete warranty repair work for motor vehicles in the same line-make as the online dealer; and (b) is permanently located in the state (2) (a) "Dealer" means a person: (i) whose business in whole or in part involves selling new, used, or new and used motor vehicles or off-highway vehicles; and (ii) who sells, displays for sale, or offers for sale or exchange three or more new or used motor vehicles or off-highway vehicles in any 12-month period. (b) "Dealer" includes a representative or consignee of any dealer (3) "Online dealer" means a manufacturer who: (a) sells, displays for sale, or offers for sale or exchange three or more new motor vehicles in any 12-month period; (b) performs the acts described in Subsection (24)(a) exclusively online; and (c) has not executed a franchise with any dealer in the state (4) "Online salesperson" means an individual who for a salary, commission, or compensation of any kind, is employed either directly, indirectly, regularly, or occasionally by an online dealer to sell, purchase, or exchange, or to negotiate for the sale, purchase, or exchange of new motor vehicles.

8 (5) "Online salesperson" means an individual who for a salary, commission, or compensation of any kind, is employed either directly, indirectly, regularly, or occasionally by an online dealer to sell, purchase, or exchange, or to negotiate for the sale, purchase, or exchange of new motor vehicles Section 3 Exceptions to "dealer" definition -- Dealer licensed in other state -- Online dealer or salesperson. Under this chapter: (1) (a) An insurance company, bank, finance company, company registered as a title lender, company registered as a check casher or deferred deposit, public utility company, commission impound yard, federal or state governmental agency, or any political subdivision of any of them or any other person coming into possession of a motor vehicle as an incident to its regular business, that sells the motor vehicle under contractual rights that it may have in the motor vehicle is not considered a dealer. (b) A person who sells or exchanges only those motor vehicles that the person has owned for over 12 months is not considered a dealer (2) (a) A person engaged in leasing motor vehicles is not considered as coming into possession of the motor vehicles incident to the person's regular business. (b) A pawnbroker engaged in selling, exchanging, or pawning motor vehicles is considered as coming into possession of the motor vehicles incident to the person's regular business and must be licensed as a used motor vehicle dealer (3) A person currently licensed as a dealer or salesperson by another state or country and not currently under license suspension or revocation by the administrator may only sell motor vehicles in this state to licensed dealers, dismantlers, or manufacturers, and only at places of business (4) Except as otherwise expressly provided: (a) an online dealer is subject to the same provisions as a new motor vehicle dealer; and (b) an online salesperson is subject to the same provisions as a salesperson.

9 (5) Notwithstanding any provision of this section to the contrary, an online dealer may: (a) operate without a principal place of business; and (b) sell new motor vehicles without a franchise Section 4: License holders -- Prohibitions and requirements. (a) unless licensed as an online dealer or an online sales person, sell, display for sale, or offer for sale motor vehicles at any location other than the principal place of business or additional places of business licensed under this chapter; this provision is construed to prevent dealers, salespersons, or any other representative of a dealership from selling, displaying, or offering motor vehicles for sale from their homes or other unlicensed locations; (b) (i) as a new motor vehicle dealer or used motor vehicle dealer, encourage or conspire with any person who has not obtained a salesperson's license to solicit for prospective purchasers; or (ii) as an online dealer, encourage or conspire with any person who has not obtained an online salesperson license to solicit for prospective purchasers; or (iii) engage in business as an online dealer without having an authorized service center.

10 Wednesday, July 22 7:00 AM 6:00 PM Registration 7:30 AM 4:00 PM Exhibit Hall Open ALEC 2015 Annual Meeting Preliminary Agenda Annual Meeting 2015 San Diego, California 8:30 AM 11:30 AM Subcommittee Meetings 8:30 AM 11:30 AM State Chair Meetings 8:30 AM - 4:30 PM Media Check-In 12:00 PM 2:00 PM Opening Luncheon 2:15 PM 3:30 PM Policy Workshops 2:15 PM 3:30 PM Task Force Chairs Meeting 3:45 PM 5:00 PM Policy Workshops 5:00 PM - 6:00 PM National Chair s Reception 7:00 PM 8:00 PM California Welcome Reception Thursday, July 23 7:30 AM 4:00 PM Exhibit Hall Open 7:30 AM 5:30 PM Registration 7:30 AM 2:00 PM Media Check-In 8:00 AM 9:15 AM Plenary Breakfast 9:30 AM - 10:45 AM Policy Workshops 11:00 AM - 12:15 PM Policy Workshops 12:30 PM - 2:00 PM Plenary Lunch 2:00 PM - 2:30 PM Ice Cream Social 2:30 PM 5:30 PM Task Force Meetings 5:30 PM 6:30 PM Iron Lady Reception 6:00 PM 7:00 PM Indianapolis Preview Reception

11 Friday, July 24 7:30 AM 2:30 PM Exhibit Hall Open 7:30 AM 3:00 PM Registration 7:30 AM 2:00 PM Media Check-In 8:00 AM 9:30 AM Plenary Breakfast 9:30 AM 10:45 AM Policy Workshops 11:00 AM - 12:15 PM Policy Workshops 12:30 PM 2:15 PM Plenary Lunch 2:30 PM - 5:30 PM Task Force Meetings 5:30 PM 6:30 PM Incoming Chair s Reception 7:00 PM 11:00 PM State Night

12 Mission Statement To advance free markets, limited government, and federalism.

13 ALEC Travel Reimbursement Policy Similar to other organizations such as the National Conference of State Legislatures, Council of State Governments, or the National Black Caucus of State Legislators, the purpose of the ALEC State Reimbursement Fund Account (Fund) is to provide funding for state lawmakers to attend ALEC conferences, state focused, and membership events for professional development and continuing education. The Fund may be used for reimbursement for four meetings as detailed below. State Reimbursement Fund Account Policy: All disbursements from the ALEC Fund must be in conformance with all applicable laws, regulations, and rules. Revisions and deviations from this Policy will be made whenever necessary to ensure that the State Reimbursement Fund Account is in full compliance with any applicable law, regulation, or rule. In those states which allow the establishment of a Fund, it will be administered by ALEC in Arlington, VA. The Public Sector Chair, with advice of the Private Sector Chair, monitors both contributions and expenditures from that account. All expenditures from the Fund must be reviewed by the State Chair. The Coordinator of Membership Services maintains the Fund account and issues monthly summary reports of Fund activity to the regional representatives at ALEC. Regional Representatives provide fund activity updates to the Public and Private State Chairs and Regional Vice-Chairs for their review. No expenditures shall be approved for the Fund with negative balances. Likewise, no expenditures shall be approved if such will result in the Fund having a negative balance. State Chairs must use the template letter with the ALEC logo and the template invoice. The Public Sector State Chair must sign the template letter. Public Sector State Chairs have the flexibility to add the signature(s) of the Private Sector State Chair, National Chair or Chief Executive Officer. State delegations are encouraged to complete fundraising efforts by the end of the first quarter. ALL letters and invoices must be approved by ALEC. All legislators are strongly encouraged to review all state reporting requirements annually. As ALEC is a non-profit 501(c)(3) corporation, all contributions to the ALEC Fund are tax deductible.

14 American Legislative Exchange Council Bylaws: Section State Reimbursement Funds. All funds for ALEC State Reimbursement Funds shall be deposited in accounts designated by the ALEC Legislative Board of Directors. State Chairs are prohibited from establishing, maintaining, or utilizing the accounts. Account expenses can be for ALEC only. Violation of this section shall constitute grounds for (1) immediate removal from a leadership position, and (2) dismissal from membership in accordance with these bylaws. Travel Reimbursement policy by meeting: Spring Task Force Summit (Spring Task Force Summit Reimbursement Form): ALEC Task Force members are reimbursed by ALEC up to $ for travel expenses. Receipts must be forwarded to the Membership Coordinator. ALEC Task Force Members room & tax fees for a two-night stay are reimbursed by ALEC. Official Alternate Task Force Members (chosen by the State Chair and whose names are given to ALEC more than 35 days prior to the meeting to serve in place of a Task Force Member who cannot attend) will be reimbursed in the same manner as Task Force Members. Expenses exceeding $ for travel, room, and other expenses can be submitted by Task Force Members for payment from the state account upon the approval of the State Chair. Receipts must be submitted to the State Chair who will approve disbursement. However, ALEC has ultimate authority over final disbursement. Each member, not the State Chair, is responsible for mailing their signed request to the Membership Coordinator, ALEC, 2900 Crystal Drive, Suite 600, Arlington, VA Valuation of hotel expenses can be obtained through the Membership Coordinator. Non-Task Force Members may be reimbursed by the Fund upon approval. Receipts must be submitted to the State Chair who will submit the signed form to the Membership Coordinator.

15 ALEC Annual Meeting (State Reimbursement Form): State funds are available for reimbursement by approval of the ALEC State Chair. Expenses are reimbursed after the conference and may cover the cost of travel, room & tax, and registration. Receipts must be submitted to the State Chair who will approve disbursement. However, ALEC has ultimate authority over final disbursement. Each member is responsible for mailing their signed request signed form to the Membership Coordinator, ALEC, 2900 Crystal Drive, Suite 600, Arlington, VA ALEC States & Nation Policy Summit (States & Nation Policy Summit Reimbursement Form): Two reimbursements per state are available to cover the cost of travel, room & tax, and registration not to exceed $1, per person for a total of $2, per state for newly elected legislators. The State Chair selects the recipients. Expenses are submitted to the State Chair and reimbursed after the conference. The State Chair submits the signed form to the VP of Membership and Development. State Reimbursement Form: Additional expenses can be reimbursed out of the state Fund with ALEC approval. Receipts must be submitted to the State Chair who submits the signed form to the Membership Coordinator. ALEC Academies (Academy Reimbursement Form): Attendees to ALEC Academies are reimbursed by the hosting Task Force Committee. Attendees will receive a form at the academy and will be reimbursed up to $ for travel, and room & tax fees for a two-night stay by ALEC. ALEC has ultimate authority over final disbursement. It is the responsibility of each member to mail their signed request signed form to the hosting Task Force Committee staff, ALEC, 2900 Crystal Drive, Suite 600, Arlington, VA Receipts must be forwarded to the Task Force Committee staff. Valuation of hotel expenses can be obtained through the Task Force Committee staff.

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