Legislature(2015 - 2016)BELTZ 105 (TSBldg)

04/11/2015 11:00 AM Senate LABOR & COMMERCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Public Testimony --
Moved HB 149 AM Out of Committee
Moved CSSB 58(L&C) Out of Committee
Heard & Held
Heard & Held
-- Testimony <Invitation Only> --
+ Bills Previously Heard/Scheduled TELECONFERENCED
         SB  58-TRANSPORT NETWORK SVES. & WORKERS COMP                                                                      
12:37:49 PM                                                                                                                   
CHAIR  COSTELLO   reconvened  the   meeting  and   announced  the                                                               
consideration   of  SB   58.  "An   Act   relating  to   workers'                                                               
compensation and transportation  network companies; and providing                                                               
for an effective date." She noted that this was the second                                                                      
hearing and public testimony was open. She asked for a motion to                                                                
adopt the proposed committee substitute.                                                                                        
12:38:01 PM                                                                                                                   
SENATOR GIESSEL motioned to adopt the CS for SB 58, labeled 29-                                                                 
LS0616\N, as the working document.                                                                                              
CHAIR COSTELLO objected for discussion purposes.                                                                                
BRANDON BREFCZYNSKI, Staff, Senator Bill Stoltze, delivered the                                                                 
following sectional analysis for the CS for SB 58:                                                                              
     Section 1: Amends AS 21.96 by adding a new section                                                                       
     21.96.018  Transportation   network  company  insurance                                                                  
     Insurers may  exclude coverage  offered under  a policy                                                                    
     of an  owner or  operator of  a personal  vehicle while                                                                    
     logged  onto a  transportation network  company digital                                                                    
     network or  engaged in  a prearranged  ride. Exclusions                                                                    
     of this  section apply  regardless of  the requirements                                                                    
     under  AS  28.20.  This section  does  not  require  or                                                                    
     preclude  a  personal  automobile insurance  policy  to                                                                    
     provide coverage  while the driver  is logged  onto the                                                                    
     network  or  engaged  in   a  prearranged  ride.  Holds                                                                    
     insurers not  liable for excluding coverage  of under a                                                                    
     personal insurance  policy while logged onto  a digital                                                                    
     network  or engaging  in a  prearranged ride.  Requires                                                                    
     cooperation  of  transportation network  companies  and                                                                    
     insurers during a claims investigation.                                                                                    
     Section 2:  Amends AS  21.96 by  adding new  section to                                                                  
     provide the following definitions:                                                                                         
             · Digital network                                                                                                  
             · Personal vehicle                                                                                                 
             · Prearranged ride                                                                                                 
             · Transportation network company                                                                                   
            · Transportation network company driver                                                                             
             · Transportation network company rider                                                                             
     Section  3:  Amends  AS   23.30.230(a)  by  adding  new                                                                  
     language  to  exempt   transportation  network  company                                                                    
     drivers and  horse carriage operator from  the Workers'                                                                    
     Compensation Act.                                                                                                          
     Section  4:  Amends  AS   23.30.230(c)  by  adding  new                                                                  
     Section 5: Amends AS 28 by adding a new chapter                                                                          
     Chapter   23  Transportation   Network  Companies   and                                                                  
     AS     28.23.010.    Financial     Responsibility    of                                                                  
     transportation network companies.                                                                                        
     Requires  either  the  transportation  network  company                                                                    
     driver or  transportation network company on  behalf of                                                                    
     the  driver to  maintain  primary automobile  insurance                                                                    
     while  logged   onto  the  digital  network   or  while                                                                    
     engaging  in a  prearranged ride.  Institutes insurance                                                                    
     requirements  for  when  drivers   are  logged  into  a                                                                    
     digital  network and  engaging in  a prearranged  ride.                                                                    
     Requires the transportation  network company to provide                                                                    
     insurance if the driver's insurance has lapsed.                                                                            
     Required  insurance  may  be  placed  with  an  insurer                                                                    
     licensed  under AS  21.09.010  or  AS 21.34.  Insurance                                                                    
     requirements of  this section satisfy  the requirements                                                                    
     of AS 28.20. Requires proof of insurance.                                                                                  
     AS    28.23.015.    Transportation   network    company                                                                  
     automobile insurance disclosures.                                                                                        
     Requires a  transportation network company  to disclose                                                                    
     in  writing to  transportation network  company drivers                                                                    
     the insurance  coverage provided while the  driver uses                                                                    
     a personal  vehicle in connection to  a digital network                                                                    
     or while  engaged in a  prearranged ride, and  that the                                                                    
     driver's  personal insurance  may not  provide coverage                                                                    
     when logged  onto a  digital network  or engaging  in a                                                                    
     prearranged ride.                                                                                                          
     AS 28.23.200 Definitions                                                                                                 
     Provides new definitions for AS 28.23.                                                                                     
     Section 6: Applicability clause.                                                                                         
     Section 7: Retroactivity clause.                                                                                         
     Section 8: Section 5 effective date.                                                                                     
     Section 9:  Immediate effective  date for  all sections                                                                  
     excluding section 8.                                                                                                       
12:40:21 PM                                                                                                                   
SENATOR MEYER joined the committee.                                                                                             
12:42:28 PM                                                                                                                   
CHAIR COSTELLO  removed her  objection and  version N  was before                                                               
the committee.                                                                                                                  
SENATOR STEVENS  asked how it  works to transition  from personal                                                               
to company insurance.                                                                                                           
MR.  BREFCZYNSKI  explained  that  a driver  is  operating  under                                                               
his/her personal insurance until he/she  logs onto the app and is                                                               
seeking passengers. After that he/she  is covered under a $50,000                                                               
death and  bodily injury  policy, $100,000  for death  and bodily                                                               
injury for  each incident, and  $25,000 property  damage provided                                                               
through the  transportation network company. Once  the driver has                                                               
accepted a  rider, he/she  is covered by  a $1  million insurance                                                               
policy  provided  through   the  transportation  network  company                                                               
(TNC). These provisions  are in Section 5.  The insurance reverts                                                               
to  the smaller  policy once  the rider  is dropped  off. If  the                                                               
driver is  no longer looking for  a rider and turns  the app off,                                                               
the insurance reverts to the driver's personal insurance.                                                                       
SENATOR  STEVENS  asked if  a  driver  is covered  under  his/her                                                               
personal insurance once they've logged onto the app.                                                                            
MR. BREFCZYNSKI  directed attention to  Section 1 that  says that                                                               
insurers have the  option of excluding coverage when  a driver is                                                               
logged  onto  the app  or  covered  by a  transportation  network                                                               
company policy.                                                                                                                 
12:44:59 PM                                                                                                                   
CHAIR  COSTELLO asked  what  would keep  a  person from  dropping                                                               
their personal  insurance and  instead logging  onto the  app any                                                               
time they're driving.                                                                                                           
MR.  BREFCZYNSKI explained  that  state law  requires drivers  to                                                               
carry  insurance for  their  private  vehicle and  transportation                                                               
network  companies like  Uber have  requirements  for someone  to                                                               
become a driver. Insurance is one of the requirements.                                                                          
CHAIR COSTELLO  asked if there  are protections to keep  a driver                                                               
from abusing  the use  of the  TNC insurance  by logging  on when                                                               
he/she didn't intend to pick up a rider.                                                                                        
MR. BREFCZYNSKI deferred the question to Uber.                                                                                  
CHAIR COSTELLO asked him to  provide some background on the horse                                                               
carriage provision.                                                                                                             
12:47:24 PM                                                                                                                   
MR. BREFCZYNSKI  explained that Senator Stoltze  has constituents                                                               
in  his district  that  operate horse  carriage  services and  he                                                               
decided they should be exempted.                                                                                                
CHAIR COSTELLO opened public testimony.                                                                                         
12:48:52 PM                                                                                                                   
ARMAND  FELICIANO,  Property  Casualty  Insurers  Association  of                                                               
America, testified  in support of the  CS for SB 58.  He said the                                                               
language in the bill is part  of a national agreement. Sections 1                                                               
and 5  address insurance gaps that  were of concern and  now will                                                               
be  good  for drivers,  passengers,  and  the public  because  it                                                               
clarifies the law  regarding insurance. The bill  is flexible and                                                               
accommodates  innovation  and  provides  adequate  disclosure  to                                                               
drivers. As  written, the bill  protects liability  insurance and                                                               
is a good public policy  that provides insurance whenever an Uber                                                               
driver operates in Alaska.                                                                                                      
Referencing previous  questions, he explained that  the insurance                                                               
falls into  two periods. This  bill would  make it clear  that if                                                               
someone  is logged  on without  a passenger  coverage could  come                                                               
either from  personal insurance  or it could  be provided  by the                                                               
TNC's or a  cross between a commercial and  personal policy. Once                                                               
a passenger gets in the car, the TNC policy is in force.                                                                        
CHAIR COSTELLO asked if there is  a way that the driver indicates                                                               
on the app that he/she has a passenger.                                                                                         
MR.  FELICIANO confirmed  that the  driver indicates  in the  app                                                               
that he/she  has accepted a passenger  and is on the  way to pick                                                               
them up. There's an electronic record.                                                                                          
12:52:10 PM                                                                                                                   
CARLA JACOBS, Policy Team,  Uber Technologies, Chicago, Illinois,                                                               
testified in  support of the  CS for SB  58. She agreed  with Mr.                                                               
Feliciano that  the language in  the bill  is part of  a national                                                               
agreement that  multiple states  have adopted  for transportation                                                               
network  company  insurance.  The bill  now  provides  regulatory                                                               
authority for  TNC insurance and  defines TNC  affiliated drivers                                                               
as independent contractors.                                                                                                     
MS.  JACOBS explained  that Uber  is a  technology platform  that                                                               
connects  riders  with  the nearest  driver  through  a  cashless                                                               
transaction. The way the process  works is that drivers can apply                                                               
for an  online platform. They submit  information including their                                                               
driver's   license,   vehicle    registration,   insurance,   and                                                               
inspection form.  The applicant  undergoes a  thorough background                                                               
check conducted  by an accredited  third party. Each  driver then                                                               
gets  a   19-point  vehicle  inspection  by   a  local  certified                                                               
mechanic. The  driver then  partners with  the Uber  platform and                                                               
has  the ability  to log  onto  the platform  anytime. She  noted                                                               
that, on  average, partners  use the platform  20 hours  a month.                                                               
Drivers  receive requests  directly  from riders,  not through  a                                                               
dispatch  service,  and can  choose  whether  to accept  or  not.                                                               
Partners take  home 80 percent of  each fare, 20 percent  goes to                                                               
Uber for the use of the  platform and drivers receive a 1099 form                                                               
at the end  of each year. In cities where  multiple TNCs operate,                                                               
the partner  drivers have  the freedom  to partner  with multiple                                                               
12:56:39 PM                                                                                                                   
SENATOR STEVENS  asked what  impact Uber  has had  on independent                                                               
taxicab companies.                                                                                                              
MS. JACOBS replied  it varies from city to city,  but often there                                                               
has  been a  positive impact  because  taxi drivers  are able  to                                                               
supplement  their income  by driving  a cab  and also  partnering                                                               
with Uber.  In cities such as  Milwaukie where there was  a limit                                                               
on the number of taxicab  permits available, Uber worked with the                                                               
city to  change the permitting  structure to accommodate  TNCs as                                                               
well as additional taxicab permits.                                                                                             
SENATOR  MEYER  asked  what,  other  than  use  of  the  app  and                                                               
insurance, Uber  provides its  drivers for  taking 20  percent of                                                               
the fare.                                                                                                                       
MS. JACOBS  reiterated the previous testimony  that insurance can                                                               
be provided  by the individual  driver, the TNC or  a combination                                                               
of the two.                                                                                                                     
SENATOR MEYER  asked if he  as a TNC  driver would be  covered by                                                               
the  TNC insurance  if he  turned  the app  on and  drove to  the                                                               
grocery store for personal business.                                                                                            
MS. JACOBS replied it would  depend on the driver's situation. If                                                               
the driver had  an insurance policy that  allowed coverage during                                                               
period  1 when  the application  is on  and a  ride has  not been                                                               
accepted, then  coverage would be  through that  driver's policy.                                                               
If  the  driver's  personal  insurance  didn't  provide  coverage                                                               
during period 1, then coverage would be through Uber's policy.                                                                  
1:01:46 PM                                                                                                                    
CHAIR COSTELLO closed public testimony and solicited a motion.                                                                  
1:01:57 PM                                                                                                                    
SENATOR GIESSEL motioned to report the  CS for SB 58, labeled 29-                                                               
LS0616\N,  from  committee  with individual  recommendations  and                                                               
attached fiscal note(s).                                                                                                        
CHAIR COSTELLO announced that without  objection, CSSB 58(L&C) is                                                               
reported from the Senate Labor and Commerce Standing Committee.                                                                 

Document Name Date/Time Subjects
CSSB 58 - Version N.pdf SL&C 4/11/2015 11:00:00 AM
SB 58
CSSB 58 Version N sponsor statement.pdf SL&C 4/11/2015 11:00:00 AM
SB 58
CSSB 58 Version N sectional.pdf SL&C 4/11/2015 11:00:00 AM
SB 58
SB 107.PDF SL&C 4/11/2015 11:00:00 AM
SB 107
SB 107 - Sponsor Statement.pdf SL&C 4/11/2015 11:00:00 AM
SB 107
SB 107 - Sectional Analysis.pdf SL&C 4/11/2015 11:00:00 AM
SB 107
SB 107 - Presentation.pdf SL&C 4/11/2015 11:00:00 AM
SB 107
SB 107 - Accreditation Brief.PDF SL&C 4/11/2015 11:00:00 AM
SB 107
SB 107 - NAIMC Support.PDF SL&C 4/11/2015 11:00:00 AM
SB 107
SB 107 - Financial Regulation Standards & Accreditation Program.pdf SL&C 4/11/2015 11:00:00 AM
SB 107