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  provisions  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 definitions. Section 5: Amends AS 28 by adding a new chapter Chapter 23 Transportation Network Companies and  Drivers  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 platforms. 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.