Legislature(2017 - 2018)SENATE FINANCE 532
03/07/2017 09:00 AM Senate FINANCE
Note: the audio ![]()
and video ![]()
recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.
| Audio | Topic |
|---|---|
| Start | |
| HB80 | |
| SB14 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 14 | TELECONFERENCED | |
| + | HB 80 | TELECONFERENCED | |
| + | TELECONFERENCED |
SENATE BILL NO. 14
"An Act relating to transportation network companies
and transportation network company drivers."
10:04:58 AM
Vice-Chair Bishop MOVED to ADOPT proposed committee
substitute for SB 14, Work Draft 30-LS0250\I (Wallace,
3/1/17).
Co-Chair MacKinnon OBJECTED for discussion.
Co-Chair MacKinnon read the bill title.
Ms. Lucky discussed the Explanation of Changes (copy on
file):
Page 1, line 11 - Page 2, line 4: New section 2:
enacts §09.65.350 which explicitly asserts that the
state and municipalities are not liable for a
Transportation Network Company's failure to follow the
law. This clarifies the sponsor's intent for the
regulatory authority over this program.
Ms. Lucky noted that that intent of the legislation was not
to have active regulation by departments of the state. If
the transportation network companies (TNCs) did not follow
the law, they would be held civilly liable, and the
recourse would be a civil suit. She noted that there had
been some confusion with the previous version of the bill
as to how much regulation a department would have to do,
which had led to a large fiscal note discussed at a
previous meeting. Since the bill was last heard, the co-
chair's office had been working with departments to find a
way to ensure that the sponsor's intent for regulation was
met. The language that was agreed upon was to provide
immunity.
Ms. Lucky continued discussing the summary of changes
document. She explained that the state did currently enjoy
general immunity, however it was thought that having the
explicit immunity in statute would make it clear that the
state departments were not actively regulating the TNCs by
checking insurance certificates or law compliance.
Ms. Lucky continued to discuss the changes:
Page 7, lines 26-29: Rewords §28.23.050(i) for
clarity.
Page 9, line 29: Rewords §28.23.110 to require adopted
policies regarding nondiscrimination and accessibility
to conform to existing state law.
Page 12, line 2: New section 9: immediate effective
date. This required a conforming title change.
Ms. Lucky explained that new language in the CS was more
clear about how payment should be applied in the event that
there was a lien on a damaged car.
10:08:44 AM
Co-Chair MacKinnon WITHDREW her OBJECTION. There being NO
further OBJECTION, it was so ordered. The Committee
Substitute for SB 14(FIN) was ADOPTED.
Co-Chair MacKinnon noted that the public hearing for the
bill was opened and closed on February 13, 2017; and re-
opened and closed on February 15, 2017.
Ms. Lucky discussed the fiscal notes for the bill. She
explained that when the bill was moved from the Senate
Labor and Commerce Committee, there had been four zero
fiscal notes: two from the Department of Labor and
Workforce Development; one from the Division of Motor
Vehicles (DMV); and one from the Department of Commerce,
Community and Economic Development, Division of Insurance.
She detailed that FN1 and FN2 still applied. There had been
questions about the DMV language in FN3. After discussion
with the department, it had re-worded the fiscal note. The
new fiscal note from DMV was still a zero fiscal note.
There was a fiscal note from the Division of Insurance that
had been produced too late to move from the previous
committee along with the bill - FN4 was a zero fiscal note.
She summarized that previously published FN1, FN2, and FN4
would apply to the bill; as well as a new zero fiscal note
from DMV that would replace FN3 that came with the bill.
Ms. Lucky pointed out that her office had been in constant
contact with the departments regarding the bill, and she
had been assured that the zero fiscal notes all applied to
the CS being considered.
10:11:16 AM
SENATOR MIA COSTELLO, SPONSOR, had examined the Committee
Substitute for SB 14, and had worked closely with committee
staff on the updates to the fiscal notes. She thought FN3
had caused confusion in the public, and was appreciative of
multiple committee hearings for the bill.
WESTON EILER, STAFF, SENATOR MIA COSTELLO, spoke to a memo
from Senator Costello that summarized questions from
committee members after the first hearing of the bill (copy
on file). He commented that many of the questions pertained
to comparisons with regard to TNC drivers or ride-shares.
He had worked with the companies Lyft and Uber.
Mr. Eiler addressed a question from Senator Micciche on
page 2 of the memo:
Senator Micciche
Does the $1 million dollar insurance coverage in the
bill mirror the coverage taxi cabs carry for riders
and drivers?
The insurance provisions of Senate Bill 14 exceed the
coverage requirements for many Alaskan taxi cabs.
While local laws vary, municipal regulation in
Anchorage, Fairbanks, and Juneau all require taxi cabs
to carry the following coverage:
$300,000 - aggregate injuries sustained in an accident
$100,000 - per personal injury
$50,000 - property damage per occurrence
Please see:
Anchorage - Municipal Code 11.20.100
Fairbanks - Ch. 86, Article II, Division 2, Sec. 86-52
Juneau - 20 CBJAC 40.580
Mr. Eiler discussed Senator Micciche's question about
comparative insurance coverage of TNC drivers and taxicabs.
There were further questions in the memo pertaining to
coverage throughout the course of a ride-share ride. He
informed that TNCs provided commercial insurance from the
moment a driver turned the application on to the moment
when a passenger exited a rideshare vehicle. Coverage
varied according to the course of the ride. Once a driver
had been matched with a passenger, the higher levels of
coverage were activated for the course of the ride.
10:15:16 AM
Mr. Eiler continued discussing insurance coverage of ride-
share drivers. He referred to 'Period 1,' a circumstance
under which a driver was driving but not yet matched with a
rider. He noted that a driver was able to purchase
additional insurance.
Mr. Eiler addressed questions pertaining to safety concerns
and background checks. He informed that both Lyft and Uber
adopted local and national background checks, did a social
security trace, and cross-referenced the national sex
offender registry. There was a variety of jurisdictions and
levels at which a background check was taken.
Mr. Eiler referred to a question by Senator Dunleavy that
was addressed in the memo:
Please explain the difference between Uber Pool and
the standard Uber product.
Both Uber and Lyft offer carpooling options that
riders can select through the apps. This option allows
riders to match with another heading the same
direction and share the trip and the cost. It's an
optional feature riders can elect to use at their
choice.
Mr. Eiler continued discussing ride shares, and spoke to
the benefits of carpooling ride-shares. He considered the
structure of the bill to have a statewide framework. Much
of the carpooling and transit could cross municipal
boundaries. In crossing municipal boundaries, ride share
cars did what local taxis could not, which necessitated a
statewide framework for regulation. He recalled that over
30 other states in the country had adopted similar
statutes.
10:18:07 AM
Mr. Eiler noted that he had worked with stakeholders
regarding protections for lienholders, which were addressed
on page 3 of the memo. He noted there were two provisions
by which lienholders were protected during ride-shares. He
furthered that TNCs were required to inform drivers that
not maintaining physical damage insurance coverage may
violate the contract with the vehicle's lienholder. He
referred to Section 28.23.05 (i), which also provided for
how lienholders were compensated in the event of damage or
loss to a vehicle.
Mr. Eiler stated that financial institutions had a variety
of mechanisms by which they managed risk; including
collateral protection insurance, which covered financial
institutions exposure to loss for incidental professional
use of personal vehicles. He used the examples of
individuals using a personal vehicle for small business
outings, such as home health aides and real estate agents.
He assured that there was existing contract law that
protected lienholders as the new area of technology and
commerce was developed.
Senator Micciche asked about the insurance levels, and
thought Mr. Eiler had mistakenly combined three levels into
two levels. He understood that when the app was not on,
drivers were required to have the same insurance as any
driver. When a TNC driver was logged in to the app and
available to receive transportation requests, there was a
second level of insurance. He thought there was a third
level of coverage when the driver was engaged in a pre-
arranged ride.
Mr. Eiler referred to an insurance diagram (copy on file)
that defined the three periods of commerce. When a driver
had accepted a trip and was in period 2 and 3, TNCs
provided primary insurance coverage that would respond
first in the case of an accident. The insurance coverage
was $1 million in liability and $1 million for uninsured or
underinsured motorist injury per incident. He stated that
drivers should be in contact with banks or lienholders to
purchase additional insurance for period 1. Throughout an
entire ride, there was not a possibility for a gap in
coverage. Under SB 14, TNCs were required to have insurance
as a backstop.
Senator Micciche thought the $1 million insurance was not
required when a driver was available to receive a
transportation request; but kicked in when the driver was
engaged in a prearranged ride.
Co-Chair MacKinnon asked if Senator Costello was supportive
of the changes in the Committee Substitute.
Senator Costello answered in the affirmative.
Co-Chair MacKinnon noted that there were representatives
from other companies available to answer questions. She
wanted to hear comments from operators.
10:23:34 AM
ANNABEL CHANG, LYFT, SAN FRANCISCO (via teleconference),
testified in support of the CS that was adopted.
10:24:19 AM
MITCHEL MATTHEWS, UBER, SEATTLE (via teleconference),
testified in support of the Committee Substitute.
10:24:47 AM
AT EASE
10:25:16 AM
RECONVENED
Senator Olson noted that the committee had heard from
sizable metropolitan carriers. He wondered if the service
would be available in areas outside Anchorage and
Fairbanks.
Senator Costello relayed that Co-Chair Hoffman had asked a
similar question in a previous meeting. She thought an
individual interested in being a driver could participate
as an independent contractor if they had a car, a phone,
and passed a background check. As soon as the bill was
signed in to law, Alaska would be joining the other 49
states in offering the opportunity to potential drivers.
She reiterated that the bill had a statewide approach.
Senator Olson asked if Senator Costello had heard any
testimony supporting the bill.
Senator Costello stated that the bill represented a
paradigm shift that looked to the future. She thought it
was an innovative approach to providing transportation
options. She shared that there was opposition to the bill
from the taxi industry. She referred to studies that
demonstrated that jobs had expanded and the pool of
individuals using transportation had expanded. She knew
that no other jurisdiction had resulted in a taxi company
going bankrupt. She thought people were using a greater
variety of transportation options.
Co-Chair MacKinnon recalled that someone had testified that
there were 60,000 individuals within the state that
possessed apps that could access services such as Lyft and
Uber.
10:29:54 AM
AT EASE
10:31:27 AM
RECONVENED
Co-Chair MacKinnon stated that SB 14 had been in the
committee for three weeks, and there had been multiple
public hearings. She asked the committee if there was any
further questions or concerns related to the bill.
Vice-Chair Bishop MOVED to report CSSB 14(FIN) out of
Committee with individual recommendations and the
accompanying fiscal notes. There being NO OBJECTION, it was
so ordered.
CSSB 14(FIN) was REPORTED out of committee with "no
recommendation" and with one new zero fiscal note by the
Department of Administration; and three previously
published zero fiscal notes: FN1(LWF), FN2(LWF), and
FN4(CED).
10:32:29 AM
AT EASE
10:35:16 AM
RECONVENED
Co-Chair MacKinnon discussed the schedule for the following
day, which included three bills that concerned the
Permanent Fund and use of the Permanent Fund earnings. She
asked that the members provide any amendments as soon as
possible. She noted that the committee would consider a
comparison of how each bill functioned.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 80 work draft version R.pdf |
SFIN 3/7/2017 9:00:00 AM |
HB 80 |
| HB 80 Explaination of Changes FIN version R.pdf |
SFIN 3/7/2017 9:00:00 AM |
HB 80 |
| SB 14 work draft version I.pdf |
SFIN 3/7/2017 9:00:00 AM |
SB 14 |
| SB 14 Summary work draft version I.pdf |
SFIN 3/7/2017 9:00:00 AM |
SB 14 |
| SB 14 Response to Senators' Questions.pdf |
SFIN 3/7/2017 9:00:00 AM |
SB 14 |