Bill Text - HB1697 (2016)

Relative to the operation and insurance of transportation network companies.


Revision: Jan. 25, 2016, midnight

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HB 1697-FN - AS INTRODUCED

 

2016 SESSION

\t16-2957

\t06/04

 

HOUSE BILL\t1697-FN

 

AN ACT\trelative to the operation and insurance of transportation network companies.

 

SPONSORS:\tRep. Hunt, Ches. 11; Rep. J. Belanger, Hills. 27; Rep. Steven Smith, Sull. 11; Sen. Soucy, Dist 18; Sen. Fuller Clark, Dist 21

 

COMMITTEE:\tTransportation

 

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ANALYSIS

 

\tThis bill requires the department of safety to regulate the operation and insurance of transportation network companies.

 

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Explanation:\tMatter added to current law appears in bold italics.

\t\tMatter removed from current law appears [in brackets and struckthrough.]

\t\tMatter which is either (a) all new or (b) repealed and reenacted appears in regular type.

\t16-2957

\t06/04

 

STATE OF NEW HAMPSHIRE

 

In the Year of Our Lord Two Thousand Sixteen

 

AN ACT\trelative to the operation and insurance of transportation network companies.

 

Be it Enacted by the Senate and House of Representatives in General Court convened:

 

\t1  New Chapter; Transportation Network Company.  Amend RSA by inserting after chapter 376 the following new chapter:

CHAPTER 376-A

Transportation Network Company

\t376-A:1  Definitions. In this chapter:

\t\tI.  "Department" means the department of safety.

\t\tII. “Digital network” means any online enabled application, software, website, or system offered or utilized by a transportation network company that enables the prearrangement of rides with transportation network company drivers.

\t\tIII.  "Personal vehicle" means a vehicle that is used by a transportation network company driver and is:

\t\t\t(a)  Owned, leased, or otherwise authorized for use by the transportation network company driver; and

\t\t\t(b)  Not a motor carrier or taxicab under RSA 376:2.

\t\tIV.  "Prearranged ride" means the provision of transportation by a driver to a rider, beginning when a driver accepts a ride requested by a rider through a digital network controlled by a transportation network company, continuing while the driver transports a requesting rider, and ending when the last requesting rider departs from the personal vehicle.  A prearranged ride does not include transportation provided using a motor carrier or taxicab as defined in  RSA 376:2.

\t\tV.  “Transportation network company" (TNC) means a corporation, partnership, sole proprietorship, or other entity, that has a permit issued by the department and is operating in New Hampshire, that uses a digital network to connect transportation network company riders to transportation network company drivers who provide prearranged rides. A transportation network company shall not be deemed to control, direct, or manage the personal vehicles or transportation network company drivers that connect to its digital network, except where agreed to by written contract.

\t\tVI.  "Transportation network company driver" (TNC driver) means an individual who:

\t\t\t(a)  Receives connections to potential passengers and related services from a transportation network company in exchange for payment of a fee to the transportation network company; and

\t\t\t(b)  Uses a personal vehicle to offer or provide a prearranged ride to riders upon connection through a digital network controlled by a transportation network company in return for compensation or payment of a fee.

\t\tVII. "Transportation network company rider" (rider) means a person who uses a transportation network company’s digital network to connect with a transportation network driver who provides prearranged rides to the rider in the driver's personal vehicle between points chosen by the rider.

\t376-A:2  Not Other Carriers. No TNC or TNC driver is a motor carrier, nor do they provide taxicab services pursuant to RSA 376:2.  No TNC or  TNC driver shall be required to:

\t\tI.  Apply for a common carrier certificate under RSA 376:4 or a contract carrier permit under RSA 376:7; or

\t\tII.  Register personal vehicles under RSA 376:24.

\t376-A:3  TNC Permit Required.

\t\tI.  No person shall operate a TNC in New Hampshire without first having obtained a permit from the department.

\t\tII.  The department shall issue a permit to each applicant that meets the requirements for a TNC under this chapter, and pays an annual permit fee of $5,000 to the department.

\t376-A:4  Agent. Every TNC shall appoint an agent for service of process in the state of New Hampshire.

\t376-A:5 Fare.  On behalf of a TNC driver, a TNC may charge a fare for the services provided to riders; provided that, if a fare is collected from a rider, the TNC shall disclose to the rider the fare calculation method on its website or within the software application service. The TNC shall also provide riders with the applicable rates being charged and the option to receive an estimated fare before the rider enters the TNC driver’s vehicle.

\t376-A:6  Identification of TNC Vehicles and Drivers.  The TNC’s software application or website shall display a picture of the TNC driver, and the license plate number of the motor vehicle utilized for providing the prearranged ride before the rider enters the TNC driver’s vehicle.

\t376-A:7  Electronic Receipt. Within a reasonable period of time following the completion of a trip, a TNC shall transmit an electronic receipt to the rider on behalf of the TNC driver that includes:

\t\tI.  The origin and destination of the trip.

\t\tII.  The total time and distance of the trip.

\t\tIII.   An itemization of the total fare paid, if any.

\t376-A:8  Financial Responsibility of  TNCs. On or before the effective date of this chapter and thereafter:

\t\tI.  Every TNC driver, or TNC on behalf of the driver, shall maintain primary automobile insurance that recognizes that the driver is a TNC driver or otherwise uses a vehicle to transport passengers for compensation and covers the driver:

\t\t\t(a)  While the driver is logged on to the TNC’s digital network; or

\t\t\t(b)  While the driver is engaged in a prearranged ride.

\t\tII.  The following automobile insurance requirements shall apply while a participating TNC driver is logged on to the TNC's digital network and is available to receive transportation requests but is not engaged in a prearranged ride:

\t\t\t(a)  Primary automobile liability insurance in the amount of at least $50,000 for death and bodily injury per person; $100,000 for death and bodily injury per incident; and $25,000 for property damage.

\t\t\t(b)  Uninsured motorist coverage as required by RSA 264:15.

\t\tIII.  The coverage requirements of paragraph II may be satisfied by any of the following:

\t\t\t(a)  Automobile insurance maintained by the TNC driver;

\t\t\t(b)  Automobile insurance maintained by the TNC; or

\t\t\t(c)  Any combination of subparagraphs (a) and (b).

\t\tIV.  The following automobile insurance requirements shall apply while a TNC driver is engaged in a prearranged ride:

\t\t\t(a)  Primary automobile liability insurance that provides at least $1,000,000 for death, bodily injury, and property damage.

\t\t\t(b)  Uninsured motorist coverage as required by RSA 264:15.

\t\tV.  The coverage requirements of paragraph IV may be satisfied by any of the following:

\t\t\t(a)  Automobile insurance maintained by the TNC  driver;

\t\t\t(b)  Automobile insurance maintained by the TNC; or

\t\t\t(c)  Any combination of subparagraphs (a) and (b).

\t\tVI.  If insurance maintained by the TNC driver in paragraphs II and IV has lapsed or does not provide the required coverage, insurance maintained by the TNC shall provide the coverage required by this section beginning with the first dollar of a claim and shall have the duty to defend such claim.

\t\tVII.  Coverage under an automobile insurance policy maintained by the TNC shall not be dependent on a personal automobile insurer first denying a claim nor shall a personal automobile insurance policy be required to first deny a claim.

\t\tVIII.  Insurance required by this section may be placed with an insurer authorized to do business in this state or with a surplus lines insurer eligible under RSA 405:24.

\t\tIX.  Insurance satisfying the requirements of this section shall be deemed to satisfy the financial responsibility requirement for a motor vehicle under RSA 264.

\t\tX.  Every TNC driver shall carry physical or electronic proof of coverage satisfying paragraphs II and IV with him or her at all times during his or her use of a vehicle in connection with a TNC’s digital network. In the event of an accident, a TNC driver shall provide this insurance coverage information to the directly interested parties, automobile insurers, and investigating police officers.  Upon  request, a TNC driver shall also disclose to directly interested parties, automobile insurers, and investigating police officers, whether he or she was logged on to the TNC's digital network or on a prearranged ride at the time of an accident.

\t376-A:9  Disclosures.  Before accepting a request for a prearranged ride on the TNC’s digital network, every TNC shall disclose in writing to the TNC driver the following:

\t\tI.  The insurance coverage, including the types of coverage and the limits for each coverage, that the TNC provides while the TNC driver uses a personal vehicle in connection with a TNC’s digital network; and

\t\tII.  That the TNC driver’s own automobile insurance policy might not provide any coverage while the TNC driver is logged on to the TNC's digital network and is available to receive transportation requests or is engaged in a prearranged ride, depending on its terms.

\t376-A:10  Automobile Insurance Provisions.

\t\tI.  Insurers that write automobile insurance in New Hampshire may exclude any and all coverage afforded under the policy issued to an owner or operator of a personal vehicle for any loss or injury that occurs while a TNC driver is logged on to a TNC’s digital network or while a driver provides a prearranged ride. The right to exclude all coverage may apply to any coverage included in an automobile insurance policy including, but not limited to:

\t\t\t(a)  Liability coverage for bodily injury and property damage.

\t\t\t(b)  Uninsured and under insured motorist coverage.

\t\t\t(c)  Medical payments coverage.

\t\t\t(d)  Comprehensive physical damage coverage.

\t\t\t(e)  Collision physical damage coverage.

Such exclusions shall apply notwithstanding any requirement under RSA 264. Nothing in this section implies or requires that a personal automobile insurance policy provide coverage while the TNC driver is logged on to the TNC’s digital network, while the TNC driver is engaged in a prearranged ride, or while the TNC driver otherwise uses a vehicle to transport passengers for compensation.  Nothing in this section shall be deemed to preclude an insurer from providing coverage for the TNC driver’s vehicle, if it chooses to do so by contract or endorsement.

\t\tII.  No automobile insurer that excludes the coverage described in RSA 376-A:8 shall have a duty to defend or indemnify any claim expressly excluded thereunder. Nothing in this section shall be deemed to invalidate or limit an exclusion contained in a policy, including any policy in use or approved for use in New Hampshire prior to the enactment of this chapter, that excludes coverage for vehicles used to carry persons or property for a charge or available for hire by the public.  An automobile insurer that defends or indemnifies a claim against a driver that is excluded under the terms of its policy, shall have a right of contribution against other insurers that provide automobile insurance to the same driver in satisfaction of the coverage requirements of RSA 376-A:8 at the time of loss.

\t\tIII.  In a claims coverage investigation, TNCs and any insurer potentially providing coverage under RSA 376-A:8 shall cooperate in facilitating the exchange of relevant information with directly involved parties and any insurer of the TNC driver if applicable, including the precise times that a TNC driver logged on and off of the TNC’s digital network in the 12 hour period immediately preceding and in the 12 hour period immediately following the accident and disclose to one another a clear description of the coverage, exclusions, and limits provided under any automobile insurance maintained under RSA 376-A:8.

\t376-A:11  Limitations.  TNC drivers are independent contractors and not employees of the TNC provided all of the following conditions are met:

\t\tI.  The TNC does not prescribe specific hours during which a TNC driver must be logged into the TNC’s digital platform.

\t\tII.  The TNC imposes no restrictions on the TNC driver’s ability to utilize digital platforms from other TNCs.

\t\tIII.  The TNC does not assign a TNC driver a particular territory in which prearranged rides can be provided.

\t\tIV.  The TNC does not restrict a TNC driver from engaging in any other occupation or business.

\t\tV.  The TNC and TNC driver agree in writing that the TNC driver is an independent contractor of the TNC.

\t376-A:12  Zero Tolerance for Drug or Alcohol Use.

 \t\tI.  The TNC shall implement a zero tolerance policy regarding a TNC driver’s activities while accessing the TNC’s digital platform. The zero tolerance policy shall address the use of drugs or alcohol while a TNC driver is providing prearranged rides or is logged into the TNC’s digital network but is not providing prearranged rides, and the TNC shall provide notice of this policy on its website, as well as procedures to report a complaint about a TNC driver with whom a rider was matched and whom the rider reasonably suspects was under the influence of drugs or alcohol during the course of the trip.

\t\tII.  Upon receipt of such rider complaint alleging a violation of the zero tolerance policy, the TNC shall immediately suspend such TNC driver’s access to the TNC’s digital platform, and shall conduct an investigation into the reported incident. The suspension shall last the duration of the investigation.

\t\tIII.  The TNC shall maintain records relevant to the enforcement of this requirement for a period of at least 2 years from the date that a rider complaint is received by the TNC.

\t376-A:13  TNC Driver Requirements.

\t\t I.  Before allowing an individual to accept trip requests through a TNC’s digital platform:

\t\t\t(a)  The individual shall submit an application to the TNC, which includes information regarding his or her address, age, driver’s license, driving history, motor vehicle registration, automobile liability insurance, and other information required by the TNC.

\t\t\t(b)  The TNC shall conduct, or have a third party conduct, a local and national criminal background check for each applicant that shall include:

\t\t\t\t(1)  Multi-state/multi-jurisdiction criminal records locator or other similar commercial nationwide database with validation (primary source search); and

\t\t\t\t(2)  National sex offender registry database.

\t\t\t(c)  The TNC shall obtain and review a driving history research report for such individual.

\t\tII.  No individual shall act as a TNC driver on the TNC's digital platform who:

\t\t\t(a)  Has had more than 3 moving violations in the prior 3-year period, or one major violation in the prior 3-year period, including, but not limited to, attempting to evade the police, reckless driving, or driving with a suspended or revoked license;

\t\t\t(b)  Has been convicted, within the past 7 years, of driving under the influence of drugs or alcohol, fraud, sexual offenses, use of a motor vehicle to commit a felony, a crime involving property damage, and/or theft, acts of violence, or acts of terror;

\t\t\t(c)  Is a match in the National Sex Offender Registry database;

\t\t\t(d)  Does not possess a valid driver’s license;

\t\t\t(e)  Does not possess proof of registration for the motor vehicle used to provide prearranged rides;

\t\t\t(f)  Does not possess proof of automobile liability insurance for the motor vehicle used to provide prearranged rides; or

\t\t\t(g) Is not at least 19 years of age.

\t376-A:14  Vehicle Safety. Prior to permitting a TNC driver to accept trip requests through the TNC’s digital platform, the TNC shall ensure that the TNC driver’s personal vehicle meets New Hampshire’s vehicle safety requirements for private motor vehicles.

\t376-A:15  Street Hails Prohibited.  No TNC driver shall solicit or accept street hails.

\t376-A:16  Cash Trips Prohibited.  The TNC shall adopt a policy prohibiting solicitation or acceptance of cash payments from riders and notify TNC drivers of such policy.  No TNC drivers shall solicit or accept cash payments from riders. Any payment for prearranged rides shall be made only electronically using the TNC’s digital network or software application.

\t376-A:17  Discrimination Prohibited; Accessibility.

\t\tI.  The TNC shall adopt a policy of nondiscrimination on the basis of destination, race, color, national origin, religious belief or affiliation, sex, disability, age, sexual orientation, or gender identity with respect to riders and potential riders and notify TNC drivers of such policy.

\t\tII.  TNC drivers shall comply with all applicable laws regarding nondiscrimination against riders or potential riders on the basis of destination, race, color, national origin, religious belief' or affiliation, sex, disability, age, sexual orientation, or gender identity.

\t\tIII.  TNC drivers shall comply with all applicable laws relating to accommodation of service animals.

\t\tIV.  No TNC shall impose additional charges for providing services to persons with physical disabilities because of such disabilities.

\t\tV.  Every TNC shall provide riders an opportunity to indicate whether they require a wheelchair accessible vehicle. If a TNC cannot arrange a wheelchair accessible prearranged ride in any instance, it shall direct the rider to an alternate provider of wheelchair accessible service, if available.

\t376-A:18  Records  Every TNC shall maintain the following customer records:

\t\tI.  Individual trip records for at least one year from the date each trip was provided.

\t\tII.  TNC driver records at least until the one year anniversary of the date on which a TNC driver's customer relationship with the TNC has ended.

\t376-A:19  Controlling Authority. Notwithstanding any other provision of law, TNCs and TNC drivers are governed exclusively by this chapter and any rules by the department of safety consistent with this chapter. No municipality or other local entity may impose a tax on, or require a license for, a TNC, a TNC driver, or a vehicle used by a TNC driver where such tax or licenses relates to providing prearranged rides, or subject a TNC to the municipality's or other local entity’s rate, entry, operational, or other requirements.

\t2  Effective Date.  This act shall take effect 60 days after its passage.

 

\t\t\t\t\t\t\t\t\t\t\tLBAO

\t\t\t\t\t\t\t\t\t\t\t16-2957

\t\t\t\t\t\t\t\t\t\t\tRevised 1/25/16

 

HB 1697-FN- FISCAL NOTE

 

AN ACT\trelative to the operation and insurance of transportation network companies.

 

 

FISCAL IMPACT:

The Department of Safety and Insurance Department state this bill, as introduced, will increase state general fund revenue by an indeterminable amount in FY 2017 and each year thereafter and increase state expenditures by $130,500 in FY 2017, $78,000 in FY 2018, $82,000 in FY 2019, and $86,000 in FY 2020.  There will be no impact on county and local revenue or expenditures.

 

METHODOLOGY:

The Department of Safety states this bill would require it to regulate the operation and insurance of transportation network companies (TNCs).  The Department states this bill would require a TNC to apply for a permit to operate at an annual cost of $5,000, which is assumed to be state general fund revenue.  The Department states it is aware of seven TNCs that may apply for permitting under this bill, which would generate $35,000 (7 X $5,000) in fee revenue annually.  The Department states this bill would require the maintenance of a database to manage information regarding TNC permitting and regulation and estimates one-time initial system programming costs to be $52,500 in FY 2017.  Lastly, the Department estimates it would need to hire an internal auditor III position to adequately meet the requirements of this bill at an estimated total cost of $78,000 in each FY 2017 and FY 2018, $82,000 in FY 2019, and $86,000 in FY 2020.  This bill provides neither appropriation nor authorization for new personnel.

 

The Insurance Department states this bill would require a TNC driver or a TNC on behalf of the driver to maintain auto insurance.  To the extent this generates purchase of additional insurance, insurance premium tax revenue to the general fund may increase.  For informational purposes, the Department states $1,000,000 in additional commercial auto premium generates $12,500 (1.25%) in premium tax revenue.