HOUSE REPUBLICAN STAFF ANALYSIS

Transcription

1 HOUSE REPUBLICAN STAFF ANALYSIS Bill: HF 394 (Formerly HSB 117) Committee: Commerce Floor Manager: Rep. Hagenow Date: March 23, 2015 Staff: Dane Schumann(1-3626) House Committee: PASSED (21-2) 2/23/2015 House Floor: PASSED (95-5) 3/24/2015 Senate Floor: Governor: Transportation Network Companies The bill establishes law regulating transportation network companies and their services. Fiscal Note: None Section by Section Analysis Sections 1 through 3--Purpose and Definitions Section 1 describes the bill s purpose. Section 2 sets important definitions for the rest of the bill, the most important of which is a transportation network company (TNC) which is defined as an entity that uses a digital network or software application to connect passengers to drivers. A TNC does not own, control, operate or manage the vehicles used by the TNC drivers. The bill also defines [TNC] services as a means of transportation of a passenger between points chosen by the passenger and prearranged with the TNC through the use of a digital network or software application maintained by the TNC. Those services begin when a TNC driver accepts a request for transportation through the network and ends when the passenger exits the vehicle. Section 3 excludes more charter carriers or common carriers from the definitions provided in Section 2. Section 4--Agent The section requires a TNC to maintain an agent in Iowa for service of process. Section 5--Identification of Vehicles and Drivers The section requires a TNC to electronically disclose to the passenger a picture of the driver s face and the vehicle s license plate before the passenger enters the motor vehicle. Sections 6 and 7--Fares and Receipts This part authorizes a TNC to charge a fare for their services if they provide a calculation method for those fares along with the rates and fees to be charged and an option for the passenger to receive a fare estimate before entering the vehicle. The TNC must provide this information on their website or within 1

2 their software application for service. Section 7 requires TNCs to provide a receipt to the passenger within a reasonable period of time following the completion of services. Sections 8 and 9--Insurance Requirements This section requires TNCs to maintain insurance coverage for the period when a driver is logged into the TNC s network and is available to receive requests but is not providing TNC services. 1 The TNC s coverage will cover the TNC driver if that driver s own policy does not cover the driver during that period, but either the TNC s policy or the driver s policy shall provide at least $1 million of coverage for death, bodily injury or property damage when the driver is performing TNC services. The coverage minimum may be satisfied through a combination of coverages provided by the driver and the TNC. Section 9 requires a TNC to disclose the amounts and terms of financial liability coverage provided by the TNC to the driver while the driver operates a vehicle for the TNC. Section 10--Substance Abuse The section requires TNCs to adopt a policy prohibiting the use of drugs or alcohol by a driver while the driver is providing services or is logged on to the network. The policy must include a procedure whereby a passenger can submit a complaint against a driver. The company must immediately suspend the driver s access to the network if it receives a complaint alleging violation of the policy. The suspension shall last for the duration of the investigation. Section 11--Driver Requirements Under this section, a TNC is subject to a number of requirements when hiring drivers. They must first have the applicant submit an application with typical employment information but also driving history, vehicle registration and proof of insurance. The TNC must conduct a third-party background check searching local and national records along with the national sex offender registry. A TNC cannot hire a person to drive for the company if the person has had more than three moving violations within the previous three years or has been convicted of operating without a driver s license, reckless driving, eluding, driving with a suspended, revoked or barred license or any other moving violation punishable by more than a fine within the past three years. A person convicted of any crime involving fraud, a sexual offense or various other felonies within the past seven years cannot be drivers. Persons on the national sex offender registry, under the age of 19, without proof of insurance coverage or valid vehicle registration cannot be a driver. Section 12--Street Hails The section bars TNC drivers from accepting or soliciting street hails from potential passengers. Section 13--Cash Payments The section requires TNCs to adopt a policy prohibiting solicitation or acceptance of cash payments, and it bars drivers from doing so also. All payments for services must be made electronically. Sections 14 and 15--Records and Disclosure of Information 1 That required coverage is the state s mandatory minimum insurance coverage provided under 321A.1, subsection 11. It provides that the minimum coverage for all insurance policies issued in Iowa must at least contain : the amount of twenty thousand dollars because of bodily injury to or death of one person in any one accident, and, subject to the limit for one person, the amount of forty thousand dollars because of bodily injury to or death of two or more persons in any one accident, and the amount of fifteen thousand dollars because of injury to or destruction of property of others in any one accident. 2

3 Section 14 requires TNC to keep records on both its provided services and its drivers for at least one year. A TNC is barred from disclose a passenger s personal information to a third party unless the passenger consents, if the TNC is required to disclose it by law or if the TNC is defending its intellectual property. Section 16--Home Rule Prohibited The section bars political subdivisions from regulating TNCs, identifying this chapter as the sole repository for their governance. It bars political subdivisions from imposing a tax on or such services or companies too. Sections 17 through 21--Conforming Changes The remaining sections make important additions to the code governing chauffeurs, motor carriers, private carriers and other passenger transportation means, clarifying that they are not TNCs. It also ensures that certain methods of transportation currently described in code cannot be construed to cover TNCs. Amendment Analysis Amendment H-1033 by Rep. Pettengill: The amendment adds a definition to the bill, defining transportation network company insurance as a primary liability policy that covers a transportation network company driver s operation of a motor vehicle while providing transportation network company services or in connection with a transportation network company s digital network or software application service. It then changes the bill s definition of transportation network company services. The bill defines those services as beginning when the transportation network company driver accepts a request for transportation from a passenger through the transportation network company s digital network and ending when the passenger exits the vehicle. The amendment would shift that timeframe, and services would begin when a transportation network company driver simply logs on to a transportation network company s digital network.... Services would end when the driver logs off a transportation network company s digital network and indicates they are not available for hire. The amendment then replaces the bill s insurance requirements. It first provides that the new chapter provides exclusive governance of insurance policies issued to transportation network companies, their drivers and the obligations of the parties to the insurance policies. It then requires that a transportation network company maintain insurance as required by the amendment. That insurance policy must provide coverage when a driver accepts a request from a passenger over the company s digital network through the period when the passenger exits the vehicle or transaction is completed, whichever is later. The transportation network company insurance must provide $1 million in collision and comprehensive physical damage coverage; $1 million for death, bodily injury and property damage coverage; and uninsured and underinsured motorist coverage. The coverage requirements could be satisfied through the transportation network company s own policy, the driver s transportation network company policy or a combination of the two. The amendment goes on to govern the coverage requirements for the period when a driver logs on to company s network and is available to receive requests but has no passenger. The transportation network company must provide $150,000 for collision and comprehensive physical damage coverage; uninsured and underinsured motorist coverage and $200,000 for death, bodily injury and property 3

4 damage coverage. This requirement can also be satisfied by a combination of the company s policy, the driver s policy or a combination of the two. However, the company s policy could provide coverage only if the driver s insurance ceased to exist, has been cancelled or the driver does not maintain transportation network company insurance. Additionally, if a driver s policy lapses, terminates or fails to provide coverage for any reason, the company s transportation network company insurance must provide the coverage required beginning with the first dollar of a claim. The amendment would also prohibit driver s personal insurance policy from providing transportation network company insurance unless it explicitly provides that coverage in the policy itself or through an endorsement. The driver s personal policy would also have no duty to defend or indemnify claims related to transportation network services unless those services are explicitly covered. Any policy that would cover transportation network company services must provide coverage during the period when the driver turns on the company s digital network and is available to receive a passenger until the driver logs off the network. During the claims process, transportation network company insurance providers must cooperate with other insurers involved in the investigation. A driver must carry proof of transportation network company insurance coverage while the driver is operating in connection with a transportation network company. The amendment would require the transportation network company to require their driver to notify any lien holder of the driver s vehicle that the driver will be using the vehicle in a manner that may violate the terms of the driver s contract with the [lien holder]. Finally, if a transportation network company s insurer makes a payment for a comprehensive or collision physical damage coverage, the company shall cause its insurer to issue the payment directly to the business repairing the insured vehicle or jointly to the vehicle owner and primary lienholder. Amendment H-1119 by Rep. Dawson: The amendment provides that a transportation network company vehicle must undergo a safety inspection before a driver may use it to provide TNC services. Thereafter, the vehicle must undergo annual inspections so long as the driver continues to provide TNC services. Amendment H-1121 (second-degree amendment to H-1119) by Rep. Dawson: This second-degree amendment would strike the requirements of H-1119 and replace them with more specific safety inspection requirements. It provides that the TNC or a third party must perform an initial safety inspection on a vehicle before it can be used to provide services. Thereafter, the inspection must be performed annually. The inspection shall examine the vehicles brakes, steering, windshield, wipers, tail lights, turning signal, front seat adjustment mechanism, horn, speedometer, tires, mirrors, doors, horn and other components of the vehicle. The TNC driver must maintain proof of the latest inspection, and the TNC company must maintain documentation of the inspections. Amendment H-1127 by Rep. Hagenow: This amendment is detailed below within the summary of amendment H Amendment H-1128 by Rep. Pettengill: Section 1 of the bill states the new chapter s purpose is to ensure the safety, reliability, and cost-effectiveness of transportation network company services within this state and to preserve and enhance access to this important transportation option for residents and visitors to the state. The amendment would strike the word important from section 1 and replace it with crucial to national security. 4

5 Amendment H-1129 by Rep. Pettengill: Like amendment H-1128, this amendment strikes the word important from section 1 but does not replace the word with anything. The bill s section 9 pertains to disclosures that a transportation network company must make to their driver before they begin driving for the company. The amendment requires the disclosures be disseminated to a driver in an understandable written format rather than just in writing. The amendment would also require the disclosure to inform drivers that their personal insurance policy does not provide coverage when the driver operates the vehicle to provide transportation network company services. The current bill obliges companies to inform drivers that their personal policies may not provide coverage. Amendment H-1135 by Rep. Hagenow and Rep. Dawson: The amendment first excludes certain medical transportation broker services from the bill. It then adds that the application used by the passenger to request a driver must provide the requested vehicle s make and model. The amendment also raises the required insurance coverage a TNC must provide for its drivers. During the app-on stage, when a driver is open to ride requests but has no passenger in the vehicle, the TNC must carry a primary insurance policy that provides: uninsured and underinsured motorists coverage; $50,000 of coverage for bodily injury or death of any one person; $100,000 of coverage for bodily injury or death of two or more people; and $15,000 of property damage coverage. When a TNC driver has a passenger in the vehicle, the TNC or the driver must carry a primary insurance policy covering $100,000 of uninsured and underinsured motorist coverage and $1,000,000 for death, bodily injury and property damage. The amendment then clarifies that nothing within the bill would prevent a TNC driver from obtaining coverage that exceeds the financial responsibility requirements that the bill specifies. If a driver were to maintain such excess coverage, any claims arising from either the app-on stage or the passenger transportation stage would be first covered by the primary underlying automobile insurance policy, and any excess financial responsibility would fall onto the excess coverage maintained by the driver. The amendment requires that insurance coverage provided under the bill would be provided by an eligible insurer authorized to do business in Iowa. If a transportation network company s insurer makes a payment for a comprehensive or collision physical damage coverage, the company shall cause its insurer to issue the payment directly to the business repairing the insured vehicle or jointly to the vehicle owner and primary lienholder. The amendment also requires the TNC to advise potential drivers to inform their insurer of their intent to act as TNC driver. This advisement from the TNC must be presented to the driver in a conspicuous manner separate from any other advisements, terms or conditions presented to the driver. The TNC company must also obtain affirmation from the driver that the driver received the advisement. Finally, the amendment incorporates the safety inspection requirements found in Rep. Dawson s amendment, providing that the TNC or a third party must perform an initial safety inspection on a vehicle before it can be used to provide services. Thereafter, the inspection must be performed annually. The inspection shall examine the vehicles brakes, steering, windshield, wipers, tail lights, turning signal, front seat adjustment mechanism, horn, speedometer, tires, mirrors, doors, horn and other components of the vehicle. The TNC driver must maintain proof of the latest inspection, and the TNC company must maintain documentation of the inspections. 5