Legislature(2015 - 2016)BUTROVICH 205

04/14/2015 08:00 AM Senate STATE AFFAIRS

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Time Change --
Moved CSSB 58(STA) Out of Committee
-- Public Testimony --
Heard & Held
-- Public Testimony --
Scheduled but Not Heard
Scheduled but Not Heard
-- Public Testimony --
Moved SB 9 Out of Committee
-- Public Testimony --
+ Bills Previously Heard/Scheduled TELECONFERENCED
          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                                                               
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                                                               
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                                                               
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                                                               
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                                                               
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                                                               
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                                                               
CHAIR  STOLTZE announced  that  without  objection, CSSB  58(STA)                                                               
moves from the Senate State Affairs Standing Committee.                                                                         

Document Name Date/Time Subjects
SB58 SSTA Workdraft CS(STA) version P - 4-13-15.pdf SSTA 4/14/2015 8:00:00 AM
SB 58
SB58 Sponsor Statement - Version N.pdf SSTA 4/14/2015 8:00:00 AM
SB 58
SB58 Sectional Summary - Version N.pdf SSTA 4/14/2015 8:00:00 AM
SB 58
SB89 SSTA Workdraft G - SCS(STA).pdf SSTA 4/14/2015 8:00:00 AM
SB 89
SB89 Sectional Summary by Legal Services - Version I - CS(EDC).pdf SSTA 4/14/2015 8:00:00 AM
SB 89
SB89 Fiscal Note EED-SSA 4-10-15.pdf SSTA 4/14/2015 8:00:00 AM
SB 89
SB89 Explanation of Changes from (S)EDC to Version G.pdf SSTA 4/14/2015 8:00:00 AM
SB 89
SB89 Consolidated Support Emails to SSTA from 4-8-15 to 4-13-15.pdf SSTA 4/14/2015 8:00:00 AM
SB 89
SB89 Consolidated Opposition Emails to SSTA from 4-8-15 to 4-13-15.pdf SSTA 4/14/2015 8:00:00 AM
SB 89
SB67 Governor's Transmittal Letter 3-3-15.pdf SSTA 4/14/2015 8:00:00 AM
SB 67
SB67 Sectional Analysis by Department of Administration.pdf SSTA 4/14/2015 8:00:00 AM
SB 67
SB67 Supporting Document - Roth 457 FAQs.pdf SSTA 4/14/2015 8:00:00 AM
SB 67
SB67 Fiscal Note #1 - DOA-DRB 2-17-15.pdf SSTA 4/14/2015 8:00:00 AM
SB 67
SB67 Support Document - Press Release DOA 3-12-15.pdf SSTA 4/14/2015 8:00:00 AM
SB 67
SB89 Sponsor Statement for CS(EDC) Version.pdf SSTA 4/14/2015 8:00:00 AM
SB 89
SB89 Opposition Document - Letter Elizabeth Miner - 4-14-15.pdf SSTA 4/14/2015 8:00:00 AM
SB 89