1     
TRANSPORTATION NETWORK COMPANY AMENDMENTS

2     
2016 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Curtis S. Bramble

5     
House Sponsor: James A. Dunnigan

6     

7     LONG TITLE
8     General Description:
9           This bill amends provisions related to a transportation network company.
10     Highlighted Provisions:
11          This bill:
12          ▸      repeals a requirement that a transportation network company or transportation
13     network driver maintain comprehensive and collision coverage for a vehicle used by
14     a transportation network driver to provide transportation network services;
15          ▸     creates the Transportation Network Vehicle Recovery Fund;
16          ▸     requires a transportation network company to pay into the fund:
17               •     an initial assessment; and
18               •     a payment per each prearranged ride;
19          ▸     provides a repeal date;
20          ▸     allows a person who holds a lien on a vehicle that a transportation network driver
21     uses to provide transportation network services to make a claim to the Division of
22     Consumer Protection for payment from the fund for physical damage to the vehicle;
23          ▸     provides that a transportation network driver is an independent contractor of a
24     transportation network company; and
25          ▸     provides criteria under which the Division of Consumer Protection may grant a
26     claim.
27     Money Appropriated in this Bill:
28          None
29     Other Special Clauses:
30          None
31     Utah Code Sections Affected:
32     AMENDS:
33          13-51-103, as enacted by Laws of Utah 2015, Chapter 461
34          13-51-108, as enacted by Laws of Utah 2015, Chapter 244 and last amended by
35     Coordination Clause, Laws of Utah 2015, Chapter 244
36          63I-1-213, as last amended by Laws of Utah 2015, Chapter 258
37     ENACTS:
38          13-51-201, Utah Code Annotated 1953
39          13-51-202, Utah Code Annotated 1953
40          13-51-203, Utah Code Annotated 1953
41          13-51-204, Utah Code Annotated 1953
42     

43     Be it enacted by the Legislature of the state of Utah:
44          Section 1. Section 13-51-103 is amended to read:
45          13-51-103. Exemptions -- Transportation network company and transportation
46     network driver.
47          (1) A transportation network company or a transportation network driver is not subject
48     to the requirements applicable to:
49          [(1)] (a) a motor carrier, under Title 72, Chapter 9, Motor Carrier Safety Act;
50          [(2)] (b) a common carrier, under Title 59, Chapter 12, Sales and Use Tax Act; or
51          [(3)] (c) a taxicab, under Title 53, Chapter 3, Uniform Driver License Act.
52          (2) A transportation network driver is:
53          (a) an independent contractor of a transportation network company; and
54          (b) not an employee of a transportation network company.
55          Section 2. Section 13-51-108 is amended to read:
56          13-51-108. Insurance.
57          (1) A transportation network company or a transportation network driver shall maintain
58     insurance that covers, on a primary basis, a transportation network driver's use of a vehicle
59     during a prearranged ride and that includes:
60          (a) an acknowledgment that the transportation network driver is using the vehicle in
61     connection with a transportation network company during a prearranged ride or that the
62     transportation network driver is otherwise using the vehicle for a commercial purpose;
63          (b) liability coverage for a minimum amount of $1,000,000 per occurrence;
64          (c) personal injury protection to the extent required under Sections 31A-22-306
65     through 31A-22-309;
66          (d) uninsured motorist coverage where required by Section 31A-22-305; and
67          (e) underinsured motorist coverage where required by Section 31A-22-305.3.
68          (2) A transportation network company or a transportation network driver shall maintain
69     insurance that covers, on a primary basis, a transportation network driver's use of a vehicle
70     during a waiting period and that includes:
71          (a) an acknowledgment that the transportation network driver is using the vehicle in
72     connection with a transportation network company during a waiting period or that the
73     transportation network driver is otherwise using the vehicle for a commercial purpose;
74          (b) liability coverage in a minimum amount, per occurrence, of:
75          (i) $50,000 to any one individual;
76          (ii) $100,000 to all individuals; and
77          (iii) $30,000 for property damage;
78          (c) personal injury protection to the extent required under Sections 31A-22-306
79     through 31A-22-309;
80          (d) uninsured motorist coverage where required by Section 31A-22-305; and
81          (e) underinsured motorist coverage where required by Section 31A-22-305.3.
82          [(3) A transportation network company or a transportation network driver shall
83     maintain comprehensive and collision insurance that covers, on a primary or contingent basis, a
84     transportation network driver's use of a vehicle while providing transportation network
85     services, and that includes:]
86          [(a) an acknowledgment that the transportation network driver is using the vehicle in
87     connection with a transportation network company during a prearranged ride or waiting period,
88     or that the transportation network driver is otherwise using the vehicle for a commercial
89     purpose; and]
90          [(b) coverage limits that are at least equal to such coverage limits, if any, for the
91     personal automobile insurance maintained by the vehicle's owner and reported to the
92     transportation network company.]
93          [(4)] (3) A transportation network company and a transportation network driver may
94     satisfy the requirements of Subsections (1)[, (2),] and [(3)] (2) by:
95          (a) the transportation network driver purchasing coverage that complies with
96     Subsections (1)[, (2),] and [(3)] (2);
97          (b) the transportation network company purchasing, on the transportation network
98     driver's behalf, coverage that complies with Subsections (1)[, (2),] and [(3)] (2); or
99          (c) a combination of Subsections [(4)] (3)(a) and (b).
100          [(5)] (4) An insurer may offer to a transportation network driver a personal automobile
101     liability insurance policy, or an amendment or endorsement to a personal automobile liability
102     policy, that:
103          (a) covers a private passenger motor vehicle while used to provide transportation
104     network services; and
105          (b) satisfies the coverage requirements described in Subsection (1)[, (2),] or [(3)] (2).
106          [(6)] (5) Nothing in this section requires a personal automobile insurance policy to
107     provide coverage while a driver is providing transportation network services.
108          [(7)] (6) If a transportation network company does not purchase a policy that complies
109     with Subsections (1)[, (2),] and [(3)] (2) on behalf of a transportation network driver, the
110     transportation network company shall verify that the driver has purchased a policy that
111     complies with Subsections (1)[, (2),] and [(3)] (2).
112          [(8)] (7) An insurance policy that a transportation network company or a transportation
113     network driver maintains under Subsection (1) or (2):
114          (a) satisfies the security requirements of Section 41-12a-301; and
115          (b) may[, along with insurance maintained under Subsection (3),] be placed with:
116          (i) an insurer that is certified under Section 31A-4-103; or
117          (ii) a surplus lines insurer licensed under Section 31A-23a-104.
118          [(9)] (8) An insurer that provides coverage for a transportation network driver
119     explicitly for the transportation network driver's transportation network services under
120     Subsection (1) or (2) shall have the duty to defend a liability claim arising from an occurrence
121     while the transportation network driver is providing transportation network services.
122          [(10) (a)] (9) If insurance a transportation network driver maintains under Subsection
123     (1)[, (2),] or [(3)] (2) lapses or ceases to exist, a transportation network company shall provide
124     coverage complying with Subsection (1)[, (2),] or [(3)] (2) beginning with the first dollar of a
125     claim.
126          [(b) Subsection (10)(a) does not apply to comprehensive or collision insurance
127     otherwise required under Subsection (3) if, at the time of a claim for damage to a vehicle being
128     used to provide transportation network services, there is no outstanding lien on the vehicle.]
129          [(11)] (10) (a) An insurance policy that a transportation network company or
130     transportation network driver maintains under Subsection (1) or (2) may not provide that
131     coverage is dependent on a transportation network driver's personal automobile insurance
132     policy first denying a claim.
133          (b) Subsection [(11)] (10)(a) does not apply to coverage a transportation network
134     company provides under Subsection (9) in the event a transportation network driver's coverage
135     under Subsection (1) or (2) lapses or ceases to exist.
136          [(12)] (11) A personal automobile insurer:
137          (a) notwithstanding Section 31A-22-302, may offer a personal automobile liability
138     policy that excludes coverage for a loss that arises from the use of the insured vehicle to
139     provide transportation network services; and
140          (b) does not have the duty to defend or indemnify a loss if an exclusion described in
141     Subsection (12)(a) excludes coverage according to the policy's terms.
142          Section 3. Section 13-51-201 is enacted to read:
143     
Part 2. Transportation Network Vehicle Recovery Fund

144          13-51-201. Transportation Network Vehicle Recovery Fund -- Creation -- Report
145     to the Legislature.
146          (1) As used in this part, "fund" means the Transportation Network Vehicle Recovery
147     Fund created in Subsection (2).
148          (2) There is created an expendable special revenue fund called the "Transportation
149     Network Vehicle Recovery Fund."
150          (3) The fund consists of:
151          (a) the amount collected by the division under Subsection 13-51-202(1); and
152          (b) interest earned on the money in the fund.
153          (4) The division shall deposit the money collected for the fund in an account with the
154     state treasurer and record the money in the fund.
155          (5) The division may hire employees and allocate resources necessary to administer the
156     fund.
157          (6) The division shall use money from the fund to cover the division's cost to
158     administer this part.
159          (7) The fund is not insurance as defined in Section 31A-1-301.
160          Section 4. Section 13-51-202 is enacted to read:
161          13-51-202. Per-ride payment -- Initial assessment -- Assessment for shortfall.
162          (1) Subject to Subsection (2), the division shall collect, from each transportation
163     network company licensed under this chapter:
164          (a) a one-time assessment in the amount of $15,000; and
165          (b) on the first day of each quarter, a payment of 10 cents for each prearranged ride
166     provided by a transportation network driver in affiliation with the transportation network
167     company during the quarter.
168          (2) If, on the first day of a given quarter, the amount of money in the fund is greater
169     than or equal to $50,000, the division may not collect the payment for each prearranged ride
170     described in Subsection (1)(b) for that quarter.
171          (3) If the division does not collect a payment under Subsection (2) in a given quarter,
172     the division shall resume collecting the prearranged ride payment described in Subsection
173     (1)(b) on the first day of the next quarter on which the amount of money in the fund is less than
174     $50,000.
175          (4) If the division grants a claim under Section 13-51-203 in an amount that is greater
176     than the amount of money in the fund, the division shall assess each transportation network
177     company licensed under this chapter an amount equal to the difference between the claim and
178     the amount of money in the fund, divided by the number of transportation network companies
179     licensed under this chapter.
180          Section 5. Section 13-51-203 is enacted to read:
181          13-51-203. Payment of a claim from the fund.
182          (1) A person that holds a lien on a vehicle used by a transportation network driver to
183     provide transportation network services may submit a claim to the division for payment from
184     the fund for physical damage to the vehicle.
185          (2) The division shall pay a claim for payment from the fund to a person that holds a
186     lien on a vehicle described in Subsection (1) for physical damage to the vehicle if:
187          (a) the physical damage to the vehicle occurred during a waiting period or a
188     prearranged ride;
189          (b) the lien complies with Section 41-1a-601;
190          (c) the person required the transportation network driver, by contract, to maintain
191     insurance coverage for physical damage to the vehicle;
192          (d) the insurance coverage described in Subsection (2)(c):
193          (i) names the person as the loss payee;
194          (ii) was in effect at the time the physical damage occurred; and
195          (iii) denied coverage to the person as the loss payee on the sole basis that the
196     transportation network driver used the vehicle to provide transportation network services in the
197     state; and
198          (e) the division determines, no earlier than 10 days after the day on which the person
199     makes the claim, that:
200          (i) no other insurance is available from the relevant transportation network company;
201     and
202          (ii) the fund has enough money to cover the cost of the claim.
203          (3) If the division grants a claim to a person for a lien on a transportation network
204     driver's vehicle under Subsection (2), the fund shall pay the person the lesser of, as estimated
205     by the division:
206          (a) the cost to repair the vehicle; or
207          (b) the actual cash value of the vehicle less any salvage costs.
208          Section 6. Section 13-51-204 is enacted to read:
209          13-51-204. State not liable.
210          The state, a state agency, or a political subdivision is not liable for:
211          (1) the granting or denial of a claim under Section 13-51-203;
212          (2) a claim made against the fund; or
213          (3) a failure of the fund to pay an amount that the division orders paid from the fund.
214          Section 7. Section 63I-1-213 is amended to read:
215          63I-1-213. Repeal dates, Title 13.
216          Title 13, Chapter 51, Part 2, Transportation Network Vehicle Recovery Fund, is
217     repealed on July 1, 2018.