Legislature(2015 - 2016)BUTROVICH 205
04/14/2015 08:00 AM Senate STATE AFFAIRS
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SB 58-TRANSPORT NETWORK SVES. & WORKERS COMP 9:56:58 AM CHAIR STOLTZE announced the consideration of SB 58. 9:57:25 AM SENATOR COGHILL moved to adopt the CS for SB 58, version 29- LS0616\P, as the working document. 9:57:39 AM CHAIR STOLTZE objected for discussion and explained that the bill is before the committee because of a transportation challenge in Chugiak/Eagle River, a community of 35,000 people. The mayor has said that the insurance issue has to be resolved at the state level before they can return to the debate at the local level of how to deal with transportation network contractors. This is an insurance bill that removes one obstacle to even having the discussion. 9:59:26 AM BRANDON BREFCZYNSKI, Staff to Senator Bill Stoltze, Alaska State Legislature, Juneau, Alaska, explained that the change in the State Affairs committee substitute (CS) occurs on page 7, line 19 in section 5. It was a minor drafting error: at the end of subsection (d) it used to read "that the transportation network company has the duty to defend the claim" and that was changed to "the transportation network company insurer has the duty". All parties agree to it. 10:00:15 AM MR. BREFCZYNSKI provided an overview of the bill. On page 1, line 6: Section 1 provides clarification for insurers regarding personal insurance policies and transportation network company (TNC) insurance policies. On page 3, line 3: 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 On page 4, line 8: Section 3: Amends AS 23.30.230(a) by adding new language to exempt transportation network company drivers and horse carriage operators from the Workers' Compensation Act. On page 5, line 12: Section 4: Amends AS 23.30.230(c) by adding new definitions. On page 6, line 16: Section 5: Amends AS 28 by adding a new chapter with three new sections. AS 28.23.010. Financial Responsibility of transportation network companies clarifies the coverage between personal insurance and TNC insurance. AS 28.23.015. Transportation network company automobile insurance disclosures is a disclosure requirement for the TNC to let the drivers know that a driver's personal insurance may not cover the driver in the event of an accident and to let them know of the insurance coverage provided by the TNC. AS 28.23.200 Definitions provides new definitions similar to the ones in section 2 for AS 28.23. Section 6: Applicability clause for sections 3 and 4. Section 7: Retroactivity clause for sections 3, 4, and 6. Section 8: Section 5 effective date. Section 9: Immediate effective date for all sections excluding section 8. 10:02:21 AM CHAIR STOLTZE removed his objection and announced that version P is adopted. SENATOR WIELECHOWSKI asked if the Division of Worker's Compensation supported this bill. 10:03:36 AM MIKE MONAGLE, Director, Division of Worker's Compensation, Department of Labor and Workforce Development (DOLWD), Juneau, Alaska, said the department is neutral on SB 58. Language in the Labor and Commerce version had been addressed in the Labor and Commerce version and they had no objection to that. He noted some concern with the retroactive clause as a policy issues because it makes the legislation retroactive back to January 2014. So, if there are any claims or pending actions before the department this bill would take away the rights of those claimants to pursue a workers' compensation claim for any injury happening while a TNC was operating in the state. SENATOR WIELECHOWSKI asked if he was aware of any claims that had been filed since January 1, 2014. MR. MONAGLE answered no, but an injured worker has up to two years to step forward with a claim. 10:05:26 AM SENATOR WIELECHOWSKI asked if any other departments had any concerns. 10:06:14 AM MARTY HESTER, Deputy Director, Division of Insurance, Department of Commerce, Community and Economic Development (DCCED), Juneau, Alaska, answered that section 1 affects the insurance code that he oversees and it provides clarity to those in Alaska who are involved in the TNC industry. It establishes what can be excluded and that TNCs and insurers must work in concert to assist Alaskan consumers in resolving their claims. SENATOR WIELECHOWSKI, in reference to section 1, asked if the people who are driving will have some degree of adequate insurance. 10:07:43 AM MR. HESTER answered yes and the other sections address the requirements for insurance. Section 1 just provides clarity as to what a personal auto insurer may exclude for and not necessarily a policy that is covering a TNC operator. SENATOR WIELECHOWSKI asked if they are allowing a driver's personal insurance to exclude coverage while the driver is working for a TNC, but then the TNC must provide insurance. MR. HESTER answered that was his understanding of the bill. Section 5 on page 6, line 16, develops the financial responsibility of the TNCs and lays out the amount of insurance they are required to cover for the different periods. 10:09:13 AM SENATOR WIELECHOWSKI asked if a person who is on the way to pick up someone is covered even though they don't have a passenger in the car. A person may be getting their car fixed; who covers that? MR. HESTER answered that there are three different periods of operation when someone is participating in a TNC. -Period 1 would be when a TNC driver has their application on the smart phone but has not made a pair with someone. -Period 2 is when a match has actually been made and accepted, but a passenger has not yet entered the vehicle. -Period 3 is when the passenger has actually been picked up by the TNC driver. He explained that Section 5 actually speaks to the three different sections: language on page 6, line 29, speaks to period 1; periods 2 and 3 are addressed on page 7, lines 10 and 11. 10:11:50 AM BRYCE BENNETT, Senior Operations Manager, Uber Northwest, Seattle, Washington, supported SB 58. He explained that it would clarify the relationship between TNCs and the small independent contractors that they partner with in the State of Alaska. He said Uber works with multiple-industry parties including insurance to outline insurance requirements for TNCs throughout the states. This is part of a national agreement that multiple states have now adopted for TNC insurance. MR. BENNETT added that Uber is a TNC platform that connects riders and drivers in search of safe and reliable rides with the nearest driver through a cashless transaction. The system brings an unprecedented level of accountability to transportation in cities in knowing where your driver is, who they are and able to leave feedback after every trip. When a driver goes through their very thorough vetting process of background checks and a vehicle inspection, he has the flexibility to come and go as he pleases. There are no shifts; partners completely make their own hours. A majority of them are part-time and just work on the platform five hours a week or 20 hours a month. They are not dispatched like a traditional taxi cab; they receive a request directed from the rider and are able to decide whether to accept it or not. Further, they have their own small business; in many places actually acquire business licenses with local municipalities. Partners take 80 percent of every calculated fare at the end of the trips; they have no hourly rates. Finally, they receive a 1099 at the end of each year and there is no tax withholding. In places where multiple TNCs exist, partners are able to be logged into multiple platforms at the same time and choose which request to take. SB 58 will clear up not only the insurance components of TNCs, but also the independent contractor relationship that exists. 10:17:37 AM CHAIR STOLTZE said some other TNCs are: Lyft, Uber, Sidecar, Wingz, Summon, and Haxi, but Uber is the one that has been involved within the 49th state recently. He noted that horse carriage riders in Anchorage had some issues on interpretation and this would provide that clarity for them, also. They have the same operating rules as taxis, but use a different kind of horse power. Finding no further comments, he closed public testimony. MR. BREFCZYNSKI said there are two fiscal notes: one from the Division of Motor Vehicles and one from the Division of Insurance, both of which are zero. 10:18:14 AM SENATOR MCGUIRE moved to report the CS for SB 58 from committee with individual recommendations and attached zero fiscal note(s). CHAIR STOLTZE announced that without objection, CSSB 58(STA) moves from the Senate State Affairs Standing Committee.