Legislation Progress

The bill was assigned H3351, was referred to the committee on Financial Services on May 4, 2015 and a hearing was held September 15, 2015. Actions for Bill H.3351

Bill Text (H.3351)

Whereas, the deferred operation of this act would tend to defeat its purpose, which forthwith is to establish a framework to oversee transportation network companies that establishes safety and consumer protections, a framework which is immediately needed for public safety and marketplace fairness, therefore it is hereby declared to be an emergency law, necessary for the immediate preservation of the public safety and convenience. 

SECTION 1.  Subsection (a) of section 172 of chapter 6 of the General Laws, as amended by section 3 of chapter 10 of the acts of 2015, is hereby amended by inserting after clause (32) the following clauses:– 

(33) A municipal licensing authority with jurisdiction over livery licensure shall have access to all available criminal offender record information to determine the suitability of any applicant for livery licensure. 

(34) The department of public utilities shall have access to all available criminal offender record information to determine the suitability of an applicant for a motor bus driver certificate pursuant to section 9 of chapter 159A or to determine the suitability of an applicant to become a transportation network driver pursuant to section 11G of chapter 159A. 

SECTION 2.  Chapter 25 of the General Laws is hereby amended by inserting after section 18A the following section:–

Section 18B.  The department may make an assessment against each transportation network company under the jurisdictional control of the department pursuant to sections 11C through 11N of chapter 159A.  Each transportation network company shall annually report by March 31 its intrastate operating revenues for the previous calendar year to the department.  Any assessment shall be apportioned according to each transportation network company’s intrastate operating revenues as shall be determined and certified annually by the department as sufficient to reimburse the commonwealth for funds expended for the oversight of transportation network companies.  If a transportation network company fails to report its intrastate operating revenues to the department, the department shall be permitted to estimate the company’s intrastate operating revenues for purposes of apportioning the assessment. 

Each transportation network company shall pay the amount assessed against it within 30 days after receipt of the notice of assessment from the department.  The failure to pay the amount assessed within that timeline may, at the discretion of the department, constitute cause to suspend or revoke a transportation network permit pursuant to section 11F of chapter 159A. 

Any funds unexpended in any fiscal year for the purpose for which such assessments were made shall be credited against the assessment to be made the following fiscal year and the assessment in the following fiscal year shall be reduced by any such unexpended amount. 

SECTION 3.  Chapter 159A of the General Laws is hereby amended by inserting after the section 11B the following 12 sections:

Section 11C.  The following words and phrases used in this section through section 11O of this chapter shall have the following meanings, unless the context clearly requires otherwise: 

“Department,” the department of public utilities. 

“Prearranged Ride,” a period of time that begins when a transportation network driver accepts a requested ride through a digital network, continues while said driver transports the transportation network company rider, and ends when said rider departs from the vehicle. 

“Transportation Network Company,” a corporation, partnership, sole proprietorship or other entity, operating in the Commonwealth that uses a digital network to connect riders to drivers for the purposes of pre-arranging and providing transportation.

“Transportation Network Company Permit” or “Permit,” a document that may be issued by the department to a qualifying transportation network company under section 11F of this chapter, effective for a period of two years.  A Transportation Network Company shall not be deemed to control, direct or manage the Vehicles or Transportation Network Drivers that connect to its digital network, except where agreed to by written contract. 

“Transportation Network Driver,” a driver certified by a transportation network company pursuant to section 11G. 

“Transportation Network Driver Certificate,” a certificate issued by a transportation network company pursuant to section 11G, effective for a period of one year, and which may be provided in an electronic form.   

“Transportation Network Rider” or “Rider,” a passenger in a pre-arranged ride provided by a transportation network driver, provided that the passenger personally arranged the ride or an arrangement was made on his behalf. 

“Transportation Network Services” or “Services,” the offering or providing of pre-arranged rides for compensation or on a promotional basis to riders or prospective riders through the transportation network company’s digital network, covering the period beginning when a transportation network driver is logged onto the transportation network company’s digital network and is available to receive a prearranged ride or while in the course of providing a prearranged ride. 

“Vehicle,” a vehicle that is used by a transportation network driver to provide transportation network services. 

Section 11D.  The department shall have general supervision of all transportation network companies and the manner in which transportation network services are provided with reference to the safety and convenience of the public, as expressly set forth in sections 11C through 11N of this chapter.  Notwithstanding any other provision of general or session law, transportation network companies are not subject to the department’s rate or common carrier requirements, other than those expressly set forth in sections 11C through 11N of this chapter, nor are transportation network companies subject to any other provision of this chapter, other than those expressly set forth in sections 11C through 11N. 

Section 11E.  (a) No transportation network company shall operate in the Commonwealth without a permit issued to it by the department. 

(b) No transportation network driver shall provide transportation network services unless, said driver: (i) is affiliated with a transportation network company that holds a permit issued to it by the department; (ii) has been determined to be suitable to provide transportation network services by the department; (iii) holds a current and valid transportation network driver certificate issued to him by a transportation network company identifying him as a transportation network driver; (iv) uses a vehicle that is listed on his transportation network driver certificate and bears the recognizable external marker required by subsection (f) of section 11H; and (v) carries the proof of insurance required by subsection (d) of section 11H. 

Section 11F.  (a) A transportation network company shall apply for a permit to be issued by the department. 

(b) At minimum, and subject to such other requirements as the department may establish by regulation, no application for a permit may be granted unless the department determines that the rendering of transportation network services by the applicant is consistent with the public interest; and that the applicant is fit, willing and able to perform such service.  In addition, each applicant for a permit must meet the following requirements: 

(1) Adequate insurance as set forth in section 11H of this chapter. 

(2) Driver background checks. 

(i) The transportation network company shall not allow the provision of transportation network services by any driver who has not been determined to be suitable to provide transportation network services through the process set forth in section 11G of this chapter. 

(ii) The transportation network company shall submit a verification setting forth, in detail, its background check process under clause (2)(i) of subsection (b) of section 11G of this chapter. 

(3) Vehicle safety.  Each vehicle used to provide transportation network services shall be inspected yearly through a process approved by the department pursuant to section 11G of this chapter. 

(4) Transparent pricing.  The digital network used by the transportation network company to pre-arrange rides must have a straightforward explanation of the total cost or pricing structure applicable to each pre-arranged ride before such ride begins. 

Section 11G.  (a) A driver who seeks to be affiliated with a transportation network company shall apply to a transportation network company for a transportation network driver certificate. 

(b) At minimum, and subject to such other requirements as the department may establish by regulation, the following requirements must be met before a transportation network company may issue a transportation network driver certificate to an applicant for said certificate: 

(1) The driver shall be at least 21 years of age. 

(2) The driver shall be determined to be suitable to perform transportation network services on the basis of the following, two-part background check process: 

(i) The transportation network company shall conduct a background check of each applicant that includes a review of the local and national criminal records, sex offender records, and driving records associated with each applicant.  The transportation network company shall disqualify applicants on the basis of a suitability standard to be determined in regulations promulgated by the department. 

(ii)  The transportation network company shall submit identifying information regarding an applicant to the department, which shall refer said information to the department of criminal justice information services, which will obtain all available criminal offender record information as defined in section 167 of chapter 6 and pursuant to section 172 of chapter 6; and sex offender registry information.  Following a review of the pertinent records, the department or the department of criminal justice information services shall determine whether the applicant has committed an offense that would disqualify him from the provision of transportation network services, according to the department’s rules, orders, and regulations.  In light of that determination, and following the department’s review of all motor vehicle records pertaining to the applicant, the department shall determine within 5 business days of receiving an applicant’s identifying information whether the applicant is suitable to provide transportation network services according to regulations promulgated by the department, and shall so notify the transportation network company.  Notwithstanding the provisions of Section 11E(b)(ii) of this act, if the department has not notified the transportation network company of its suitability determination within 5 business days after receiving an applicant’s identifying information, a transportation network company may provisionally allow an applicant to provide transportation network services, provided that the transportation network company has determined that the applicant meets the department’s suitability standard and that all of the other requirements of Section 11E(b) are satisfied.  If the department subsequently notifies the transportation network company that the applicant does not meet the suitability standard, the transportation network company shall immediately prohibit the driver from providing transportation network services. 

(3) The transportation network company shall verify that the vehicle or, where appropriate, each of the vehicles, to be used by the driver to provide transportation network services has been registered in the Commonwealth and inspected  pursuant to section 7 of chapter 90 and regulations promulgated thereunder at facility licensed by the registry of motor vehicles; provided, however, that the department may, in its discretion, permit a transportation network vehicle to be registered and inspected in another state with substantially equivalent safety protections. 

(c) The certification requirements set forth in subsection (b) shall apply to each renewal of a transportation network company permit. 

(d) A transportation company shall provide to the department a roster of each driver certified by it to be a transportation network driver, and shall update said roster regularly.  The department shall make this roster available to the registry of motor vehicles and state and local law enforcement. 

(e) The department shall approve the form of a transportation network driver certificate; provided, however, that each such certificate shall contain the name, address, and picture of the driver, and the license plate number of each vehicle used by him to provide transportation network services. 

(f) The department shall establish the requirements for a recognizable external marker to be displayed on a vehicle at all times it is used to provide transportation network services. 

Section 11H.  (a) The insurance requirements set forth in this subsection shall constitute adequate insurance, and shall satisfy the financial responsibility requirement for a motor vehicle under section 34A of chapter 90 and section 113L of chapter 175; provided, however, that the insurance requirements set forth in this section shall only satisfy the financial responsibility requirements for a motor vehicle under section 34A of chapter 90 and section 113L of chapter 175 with respect to the provision of transportation network services in a vehicle operated by a transportation network driver, as said driver still must comply with section 34A of chapter 90 and section 113L of chapter 175 and maintain insurance coverage for the vehicle during those periods of time when the vehicle is being operated but is not providing transportation network services. 

(1) The following automobile insurance requirements shall apply while a driver affiliated with a transportation network company is logged onto the transportation network company’s digital network and is available to receive transportation requests, but is not engaged in a prearranged ride: 

(i) Automobile liability insurance that meets at least the minimum coverage requirements established in section 34A of chapter 90 and section 113L of chapter 175.

(ii) The insurance may be held by the transportation network driver, the transportation network company, or some combination thereof.

(2) The following automobile liability insurance requirements shall apply while a transportation network driver is engaged in prearranged ride: 

(i) Automobile liability insurance that provides at least $1,000,000 in per occurrence coverage for death, bodily injury, and property damage, uninsured motorist coverage to extent required by section 113L of chapter 175, and personal injury protection to the extent required by section 34A of chapter 90;

(ii) The insurance may be held by the transportation network driver, the transportation network company, or some combination thereof.

(b) In every instance where insurance maintained by a transportation network driver to fulfill the insurance requirements set forth in subsection (a) has lapsed, failed to provide the required coverage, denied a claim for the required coverage, or otherwise ceased to exist, insurance maintained by a transportation network company shall provide the coverage required by subsection (a) beginning with the first dollar of a claim and shall have the duty to investigate and defend such claim. 

(c) Coverage under an automobile insurance policy maintained by the transportation network company shall not be dependent on a personal automobile insurer first denying a claim nor shall a personal automobile insurer be required to first deny a claim. 

(d) Insurance required by this section 11H must be placed with an insurer authorized to do business in the state or, if such coverage is not available, then with a surplus lines insurer eligible under chapter 175, section 168. 

(e) A transportation network company driver shall carry proof of coverage satisfying subsection (a) with him at all times he is providing transportation network company services.  In the event of an incident giving rise to personal injury or property damage, a transportation network driver shall provide this insurance coverage information to the directly interested parties, automobile insurers, and investigating police officers.  Upon request, a transportation network driver shall also disclose to directly interested parties, automobile drivers, automobile insurers, and investigating police officers, whether he was providing transportation network services, including whether such services included a prearranged ride, at the time of the incident. 

(f) A transportation network company shall disclose in writing to transportation network drivers the following relative to insurance before they are allowed to accept a request for a prearranged ride:

(i) The insurance coverage, including the types of coverage and the limits for each coverage, that the transportation network company provides while the transportation network driver uses his vehicle to provide transportation network services; and

(ii) That the transportation network driver’s own automobile insurance policy might not provide coverage while the driver is providing transportation network services, depending on its terms. 

(f) In a claims coverage investigation, a transportation network company, a transportation network driver, and any insurer responding to a claim involving transportation network services shall cooperate to facilitate the exchange of relevant information with directly involved parties, including, but not limited to, the precise times that a transportation network company driver logged on and off of the transportation network company’s digital network in the twelve hour period immediately preceding and in the twelve 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 section 11H.

(h) Insurers that write automobile insurance in Massachusetts may exclude any and all coverage afforded under the policy issued to an owner or operator of a vehicle for any loss or injury that occurs while a driver is providing transportation network services or while a driver provides a prearranged ride.  This right to exclude all coverage may apply to any coverage included in an automobile insurance policy including, but not limited to:

(i) Liability coverage for bodily injury and property damage;

(ii) Personal injury protection coverage as defined in chapter 90, section 34A;

(iii) Uninsured and underinsured motorist coverage;

(iv) Medical payments coverage;

(v) Comprehensive physical damage coverage; and

(vi) Collision physical damage coverage. 

Such exclusions shall apply notwithstanding any requirement under chapter 90, section 34A and chapter 175, section 113L.  Nothing in this section 11H implies or requires that a personal automobile insurance policy provide coverage while the driver is logged on to the transportation network company’s digital network, while the driver is engaged in a prearranged ride or while the driver otherwise uses a vehicle to transport passengers for compensation.

Nothing shall be deemed to preclude an insurer from providing coverage for the transportation network company driver’s vehicle, if it so chooses to do so by contract or endorsement.

Automobile insurers that exclude the coverage described in section 11H shall have no 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 Massachusetts prior to the enactment of this Section 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 section 11H at the time of loss. 

Section 11I.  The department may, following notice and a hearing, suspend or revoke a transportation network company permit for cause. 

Section 11J.  (a) The department may order a transportation network company to revoke the permit of a transportation network driver, and to report to the department immediately upon having done so, upon receipt of information indicating that the driver is not suitable to provide transportation network services. 

(b) The department may order a transportation network company to suspend a transportation network driver certificate, and to report to the department immediately upon having done so, upon the driver’s arrest for a crime that would render him unsuitable to provide transportation network services or upon his citation for a driving infraction that would render him unsuitable to provide transportation network services for such period of time as necessary to determine whether continued provision of transportation network services by said driver is consistent with the public interest. 

Section 11K.  (a) Whenever the department determines that any transportation network company is in violation of any provision of sections 11C through 11N of this chapter or any regulation or rule promulgated thereunder, the department may issue a monetary penalty, suspend or revoke a permit, or take such other action that the department deems necessary.  In determining the amount of the penalty, the department shall consider the size of the transportation network company, the gravity of the violation, the good faith, if any, of the transportation network company in attempting to achieve compliance and remedying non-compliance, and any previous violations. 

(b) Any driver providing transportation network services who is not in compliance with clause (b) of section 11E has committed a civil motor vehicle infraction as that term is used in section 1 of chapter 90C; may be issued a civil citation by state or local law enforcement; and, if so cited, shall be subject to a fine of not less than 350 dollars. 

Section 11L.  The department shall recommend and the secretary of administration and finance shall establish, pursuant to section 3B of chapter 7, the cost associated with undertaking a suitability determination under section 11G, which cost may be payable by the applicant or the transportation network company. 

Section 11M.  The department may establish regulations, rules, and orders to effectuate sections 11C through 11N of this chapter, and shall consider comments provided to it by the transportation network company local advisory commission; provided that the department shall consult with the division of insurance in the development of any regulations related to insurance coverage; provided further that the department shall consult with the executive office of public safety and security, the City of Boston, and other municipalities as identified by the department, in the development of any regulations related to the suitability of transportation network drivers in light of criminal, sex offender, or driving history; and provided further that the regulatory authority of the department shall extend, but shall not be limited, to the accessibility of transportation network services by those with special needs. 

Section 11N.  (a) In the enforcement of sections 11C through 11N of this chapter, the department may prescribe records to be maintained by transportation network companies, including, but not limited to, records pertaining to service accessibility and pricing.  Each transportation network company or any applicant for a transportation network company permit shall furnish all information and documents related to the condition, management, and operation of the company upon the department’s request; provided, however, that any such request must be reasonably related to the requirement set forth in sections 11C through 11M of this chapter and any regulations promulgated thereunder. 

(b) Any record furnished to the department may exclude information that would tend to identify specific passengers, unless such information is pertinent to the enforcement processes established in section 11K of this chapter. 

(c) Any record furnished to the department or any other state agency by a transportation network company pursuant to sections 11C through 11N of this chapter, including but not limited to the roster of permitted transportation network drivers required by subsection (d) of section 11G shall not be considered a public record as that term is used in clause 26 of section 7 of chapter 4 or chapter 66; provided, however, that an application for a transportation network company permit submitted pursuant to section 11F of this chapter shall be a public record; provided further that any such application may be withheld from disclosure, in whole or in part, for reasons set forth in clause 26 of section 7 of chapter 4 or chapter 66. 

Section 11O.  There shall be a transportation network company local advisory commission to consult with the department as it develops regulations to effectuate sections 11C through 11N of this chapter.  The commission shall consist of 5 members, each appointed by the governor, and shall include: 1 representative of the city of Boston, from a list of names submitted by the city; 1 representative of the city of Cambridge, from a list of names submitted by the city; and 1 representative of the city of Somerville, from a list of names submitted by the city.

SECTION 4.  The department of public utilities and the registry of motor vehicles shall develop a report concerning the feasibility of conducting statewide criminal offender record information checks for each operator of a livery vehicle, and submit said report to the clerks of the house of representatives and the senate, not later than one year after the enactment of this act. 

SECTION 5.  Except as otherwise provided, this act shall take effect upon its enactment. 

SECTION 6.  That portion of SECTION 3 codifying section 11E of chapter 159A of the General Laws shall take effect 6 months after the enactment of this act; provided, however, that on no more than 6 occasions, the department of public utilities, in its sole discretion, may extend the effective date of section 11E by one month.