New Jersey-2014-S2519-Introduced

An Act concerning insurance coverage for certain motor vehicles and supplementing Title 39 of the Revised Statutes.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. The Legislature finds and declares:

a. The digital media age has created many new and innovative businesses made possible by the revolutionary means that allow us to communicate with one another at rapid speed;

b. One of the most popular new innovations is the ability of individuals to utilize an application on their mobile devices to summon limousines, taxis, sports utility vehicles and ordinary cars at a moment's notice to be transported anywhere, without restriction;

c. This technology has benefited not only riders, but also those who become drivers of the vehicles affiliated with transportation network companies in order to make additional money in their spare time or, in some cases, to engage in it as a full-time job;

d. Notwithstanding the benefits of this system, which has arisen spontaneously, it is necessary, for reasons of public safety and the welfare of both drivers and passengers, that some measure of State regulation be established, as is the case with traditional taxis and limousines;

e. One of the matters of concern regarding these "ridesharing" programs is that if a driver is using his own personal vehicle, in New Jersey his private passenger automobile insurance policy does not cover him or his passenger, as the State's "no-fault law" explicitly excludes any automobile that is an automobile for hire, thus depriving the driver and the passenger of the benefits provided under the State's private passenger automobile insurance "no-fault law;" and

f. It is therefore necessary that the State impose certain reasonable guidelines and requirements for the protection of the public as well as the drivers who have entered into this enterprise.

2. For the purposes of this act:

"Applicant" means a person applying to a transportation network company to become a transportation network driver.

"Commission" means the New Jersey Motor Vehicle Commission.

"Digital network" means a system wherein a transportation network company's telephone or other application is accessed electronically by a transportation network driver to receive assignments from the company to provide transportation or other services to customers of the company.

"Passenger" means a person who prearranges a transportation network trip with a driver through a transportation network company's digital network.

"Private passenger automobile" means an automobile required to be insured pursuant to the provisions of P.L.1972, c.70 (C.39:6A-1 et seq.).

"Transportation network company" or "company" means a corporation, partnership, sole proprietorship, or other entity that uses a digital network to connect passengers to drivers to provide third party transportation at a premium fare on a dedicated, nonscheduled basis that is not conducted on a regular route.

"Transportation network driver" or "driver" means a person who contracts with a transportation network company and who either uses a commercial vehicle, including, but not limited to, a taxi, limousine, or commercial sports utility vehicle, or uses a personal private passenger automobile, to transport passengers or deliver goods or services, on behalf of a transportation network company.

"Transportation network trip" or "trip" means that period of time that begins when the transportation network driver logs on to the transportation network company's digital network to indicate to the transportation network company the driver's availability to pick up a passenger or perform any other service, at which time the driver's private passenger automobile insurance policy shall not be in effect, and lasting until the transportation network driver logs off the company's digital network.

3. A transportation network company shall not operate in this State unless the transportation network company applies for, receives, and maintains in good standing, a permit from the commission.

4. In order to obtain and maintain a transportation network company permit, the company shall:

a. for vehicle classifications driven by a transportation network driver which by law are otherwise covered by a commercial business automobile policy and for which a commercial drivers license may be required, the transportation network company shall maintain and submit a listing of those transportation network drivers, at least semi-annually to the commission, together with such other information as the commission may require;

b. for vehicle classifications for which the transportation network driver is, when not in service as a transportation network driver, subject to the provisions of P.L.1972, c.70 (C.39:6A-1 et seq.), the transportation network company shall submit electronically to the commission, at least monthly, an updated list of the names of those transportation network drivers residing in the State with which it has a current relationship;

c. conduct a driver's license check on each transportation network driver with whom it enters into a contractual relationship, and subsequent driver's license checks at such intervals as the commission may determine by regulation;

d. prohibit an applicant or transportation network driver from providing a transportation network trip if the driver's license record check reveals any disqualifying violations, which shall include, but not be limited to: (1) reckless driving pursuant to R.S.39:4-96; (2) driving while intoxicated pursuant to R.S.39:4-50; (3) driving with a suspended or revoked license pursuant to R.S.39:5-30; or (4) any violation incurred in any other state, territory, commonwealth, or other jurisdiction of the United States or another country which is comparable to the violations set forth in paragraphs (1) to (3) of this subsection;

e. conduct a criminal history record background check on an applicant and, subsequently, every three years on a transportation network driver and prohibit the driver from making a transportation network trip if it is determined that the driver has been convicted of aggravated assault, arson, burglary, extortion, homicide, kidnapping, robbery, aggravated sexual assault, sexual assault, endangering the welfare of a child or other crime determined by the commission, in consultation with the Attorney General;

f. establish a program for the reasonable inspection of the condition of a motor vehicle used in the service of a transportation network company;

g. in the case of a transportation network driver that drives a private passenger vehicle subject to the provisions of P.L.1972, c.70 (C.39:6A-1 et seq.), for the purposes of determining, in the event of an occurrence which is or may be covered under a policy of insurance, whether under the private passenger automobile insurance policy or the policy provided by the transportation network company pursuant to subsection b. of section 6 of this act, the company shall maintain a log that establishes the exact time that the transportation network driver logs on to the transportation network company's digital network to indicate to the transportation network company the driver's availability to pick up a passenger or perform any other service, at which time the driver's private passenger automobile insurance policy shall not be in effect, until the transportation network driver logs off the company's digital network. The log shall be kept for a period of at least five years by the transportation network company and shall be made available upon the request of an insurer in connection with any claim filed with the insurer, as well as subject to discovery in any proceeding;

h. if otherwise required by law, provide workers' compensation coverage to transportation network drivers; and

i. maintain a surety bond in the amount of $500,000 in favor of the State, to be filed with the Department of Banking and Insurance as a guarantee for fulfilling any obligations arising from its operations in the State. Alternatively, the transportation network company may deposit securities or an irrevocable letter of credit with the Commissioner of Banking and Insurance.

5. Every transportation network company shall appoint an agent for service of process in this State, to be filed with the commission. Any change of the agent or the address or other contact thereof shall be filed within 10 days of the effective date of the change.

6. a. No policy of private passenger automobile insurance issued pursuant to P.L.1972, c.70 (C.39:6A-1 et seq.) shall be in force during any period in which a person in a vehicle covered by that policy is logged on to a transportation network company's digital network as a transportation network driver.

b. With respect to those vehicles, in lieu of the driver's private passenger automobile insurance, a transportation network company shall provide coverage though a commercial business automobile insurance liability policy issued by an insurer licensed or authorized to do business in this State covering the transportation network driver contracting with the transportation network company, in the amount of at least $1,500,000 per occurrence, uninsured and underinsured motorist coverage, medical payments coverage in an amount not less than $5,000 per person per occurrence, and optional collision and comprehensive coverage which shall be in force during a transportation network trip. That commercial business automobile policy shall be in force from the exact time that the transportation network driver logs on to the company's digital network to indicate availability to the transportation network company until the driver logs off. That policy supplied by the transportation network company shall be deemed to meet the requirements of P.L.1972, c.197 (C.39:6B-1 et seq.).

c. Every transportation network driver shall carry with them in the vehicle being used to transport passengers or perform services for a transportation network company a copy of the certificate of insurance that shows the commercial business automobile coverage applicable to the vehicle when the vehicle is operating as a transportation network company vehicle. A copy of the policy, or policies, including all endorsements attached to the policy, shall be filed with the commission.

7. Every transportation network company doing business with transportation network drivers in New Jersey shall provide on a separate sheet of paper, in connection with any agreement between the company and a driver, a notice in 14-point bold type, to be signed by the driver, that under New Jersey law:

a. No private passenger automobile insurance policy issued pursuant to P.L.1972, c.70 (C.39:6A-1 et seq.) includes coverage for the driver's vehicle while logged on to the transportation network company's digital network;

b. The driver and any other person covered under the driver's private passenger automobile insurance policy shall no longer be covered by that policy's personal injury protection medical and wage loss benefits, liability insurance, including property damage coverage, collision and comprehensive coverage, and uninsured and underinsured motorist coverage while logged on to the company's digital network; and

c. The driver could be exposed to lawsuits for injuries sustained while logged on to the company digital network, from which the driver would otherwise be protected under his personal private passenger automobile insurance policy.

8. A transportation network company that violates the provisions of this act or any rule or regulation adopted pursuant hereto shall be subject to a civil penalty of $1,000 for the first offense, per driver, and up to $5,000 for each subsequent offense, per driver, to be collected in a civil action by a summary proceeding under the "Penalty Enforcement Law of 1999," P.L.1999, c.274 (C.2A:58-10 et seq.).

9. Any insurer licensed or authorized to do business in this State may offer a separate commercial business automobile insurance policy for purchase by a transportation network driver, to supplement the policy required to be provided by the transportation network company, the terms and conditions of which shall be filed with and approved by the Commissioner of Banking and Insurance. The policy may provide liability, uninsured, underinsured, physical damage, and medical payments coverage.

10. The New Jersey Motor Vehicle Commission, in consultation with the Department of Banking and Insurance, shall promulgate rules and regulations to effectuate the purposes of this act pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.).

11. This act shall take effect on the 30^th day next following enactment.

STATEMENT

This bill provides for the registration of transportation network companies with the New Jersey Motor Vehicle Commission and establishes certain requirements for these companies with respect to the insurance protection given to the drivers and passengers of such companies. In New Jersey, the State's personal automobile insurance policy does not cover any vehicle for hire. Thus, the bill requires that the transportation network company provide liability insurance, medical payments coverage, and collision and comprehensive coverage and requires that a full copy of these policies, together with any endorsements, is filed with the commission.

The bill's insurance requirement applies to a transportation network driver whose vehicle is otherwise covered by a private passenger automobile insurance policy when the driver is not on duty. The bill establishes a point at which the private passenger automobile insurance policy is supplanted by the transportation network company's policy. That point is established at the time the transportation network company driver logs on to the company's digital network to indicate availability. The company is required to keep a log as to the time of the engagement and is required to keep that record for five years; the record is subject to discovery in the event of a dispute regarding which policy is to respond in the event of an accident. The driver is required to keep a copy of the certificate of insurance for coverage supplied by the transportation network company in his vehicle.

The bill requires criminal history record background checks, as well as checks on the driver's driving record and requires periodic inspection of the vehicle.

Some transportation network companies also use vehicles that are otherwise licensed or registered as commercial vehicles, such as limousines, taxis, and commercially licensed sports utility vehicles. In that case, a commercial business automobile policy is already in effect for that particular vehicle, and the commercial policy would respond in the event of an accident.