HB2504.DOC

SECTION 1. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:

"CHAPTER

Transportation Network companies

§ -1 Definitions. As used in this chapter:

"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.

"Personal vehicle" means a vehicle that is:

(1) Used by a transportation network company driver to provide a prearranged ride;

(2) Owned, leased, or otherwise authorized for use by the transportation network company drivers; and

(3) Not a taxicab, limousine, or other for hire vehicle.

"Prearranged ride" means the provision of transportation by a transportation network company driver to a transportation network company rider:

(1) Beginning when a transportation network company driver accepts a transportation network company rider's request for a rider through a digital network;

(2) Continuing while the transportation network company driver transports the transportation network company rider; and

(3) Ending when the last requesting transportation network company rider departs from the personal vehicle;

provided that the term "prearranged ride" shall not include transportation provided through:

(1) A ridesharing arrangement as defined in section 279G-1;

(2) A taxicab, limousine, or other for-hire vehicle; or

(3) A regional transportation provider.

"Transportation network company" means a corporation, partnership, sole proprietorship, or other entity operating in Hawaii 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 vehicle or transportation network company drivers that connect to the digital network, except where agreed to by written contract.

"Transportation network company driver" means an individual who receives connections to potential riders and related services from a transportation network company and uses a personal vehicle to offer or provide a prearranged ride to transportation network company riders upon connection through a digital network controlled by a transportation network company in exchange for compensation or payment of a fee.

"Transportation network company rider" means an individual or persons who use a transportation network company's digital network to connect with a transportation network company driver who provided prearranged rides to the transportation network company rider in the transportation network company driver's personal vehicle between points chosen by the transportation network company rider.

§ -2 Not other carriers. (a) Neither a transportation network company nor a transportation network company driver shall be deemed to be a common carrier, a contract carrier, a motor carrier as defined in section 271-4, a taxicab, or a for-hire vehicle service.

(b) A transportation network company driver shall not be required to register the vehicle that the transportation network company driver uses to provide prearranged rides as a commercial or for-hire vehicle.

§ -3 Financial responsibility of transportation network companies. (a) On or before July 1, 2016, and thereafter, a transportation network company driver or transportation network company, on the transportation network driver's behalf, shall maintain primary automobile insurance that recognizes that the driver is a transportation network company driver or otherwise uses a vehicle to transport passengers for compensation and covers the transportation network company driver:

(1) While the transportation network company driver is logged on to the transportation network company's digital network; or

(2) While the transportation network company driver is engaged in a prearranged ride.

(b) The following automobile insurance requirements shall apply while a transportation network company driver is logged on to the transportation network company's digital network and is available to receive transportation requests but is not engaged in a prearranged ride:

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

(2) Personal injury protection coverage in an amount that meets the minimum coverage amount requirements of section 431:10C–103.5; and

(3) The coverage requirements of this subsection may be satisfied by any of the following:

(A) Automobile insurance maintained by the transportation network company driver;

(B) Automobile insurance maintained by the transportation network company; or

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

(1) Primary automobile liability coverage that provides at least $1,000,000 for death, bodily injury, and property damage;

(2) Personal injury protection coverage in an amount that meets the minimum coverage amount requirements of section 431:10C–103.5; and

(3) The coverage requirements of this subsection may be satisfied by any of the following:

(A) Automobile insurance maintained by the transportation network company driver;

(B) Automobile insurance maintained by the transportation network company; or

(d) If insurance maintained by a transportation network company driver in subsections (b) or (c) has lapsed or does not provide the required coverage, the insurance maintained by the transportation network company shall provide the coverage required by this section beginning with the first dollar of a claim and shall have the duty to defend the claim.

(e) 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 insurance policy be required to first deny a claim.

(f) Insurance required by this section may be placed with an insurer licensed under section 431:3-203 or with a surplus lines insurer eligible under section 431:8-301 that has a credit rating of no less than "A-" from A.M. Best or "A" from Demotech or similar rating from another rating agency recognized by the insurance commissioner.

(g) Insurance satisfying the requirements of this section shall be deemed to satisfy the financial responsibility requirements for a motor vehicle under chapter 287, Hawaii Revised Statutes.

(h) A transportation network company driver shall carry proof of insurance coverage satisfying subsections (b) and (c) with the vehicle at all times when the vehicle is being used in connection with a transportation network company's digital network. In the event of an accident, a transportation network company driver shall provide this insurance coverage information to the directly interested parties, automobile insurers, and investigating police officers, upon request pursuant to section 291C-137. Upon such a request, a transportation network company driver shall also disclose to directly interested parties, automobile insurers, and investigating police officers, whether the transportation network company driver was logged on to the transportation network company's digital network or on a prearranged ride at the time of the accident.

§ -4 Disclosures. A transportation network company shall disclose in writing to transportation network company drivers the following before they are allowed to accept a request for a prearranged ride on the transportation network company's digital network:

(1) The insurance coverage, including the types of coverage and the limits for each type of coverage, which the transportation network company provides while the transportation network company driver uses a personal vehicle in connection with a transportation network company's digital network; and

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

§ -5 Automobile insurance provisions. (a) Insurers that write automobile insurance policies in Hawaii 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 transportation network company driver is logged on to a transportation network company's digital network or while a transportation network company 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:

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

(2) Personal injury protection coverage as defined in section 431:10C-103.5;

(3) Uninsured and underinsured motorist coverage;

(4) Medical payments coverage;

(5) Comprehensive physical damage coverage; and

(6) Collision physical damage coverage.

Such exclusions shall apply notwithstanding any requirement under chapter 287. Nothing in this section shall imply or require that a personal automobile insurance policy provide coverage while a transportation network company driver is logged on to the transportation network company's digital network, while the transportation network company driver is engaged in a prearranged ride, or while the transportation network company driver otherwise uses a vehicle to transport passengers for compensation.

Nothing in this section shall be construed as to require an insurer to use any particular policy language or reference to this section to exclude any and all coverage for any loss or injury that occurs while a transportation network company driver is logged on to a transportation network company's digital network or while a transportation network company driver provides a prearranged ride.

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

(b) Automobile insurers that exclude insurance coverage as provided for under this section shall have no duty to defend and 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 Hawaii 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 -3 at the time of loss.

(c) In a claims coverage investigation, a transportation network company shall immediately provide upon request by directly involved parties or any insurer of the transportation network company driver, if applicable, the precise times that the transportation network company driver logged on and off the transportation network company's digital network in the twelve-hour period immediately preceding the accident and in the twelve-hour period immediately following the accident. Insurers potentially providing coverage as set forth in -3 shall disclose, upon request by any other such insurer involved in the particular claim, the applicable coverages, exclusions, and limits provided under any automobile insurance maintained under section -3."

SECTION 2. This Act shall take effect on July 1, 2016.

INTRODUCED BY:	_____________________________

HOUSE OF REPRESENTATIVES	H.B. NO.	2504
TWENTY-EIGHTH LEGISLATURE, 2016
STATE OF HAWAII