Tag: legislation

Lawmakers Respond To Results Of TSA Internal Investigation

Upon news that Transportation Security Administration (TSA) screeners failed to detect prohibited items in 67 out of 70 test cases conducted by U.S. Department of Homeland Security (DHS) Inspector General undercover teams, the acting TSA Administrator was reassigned and replaced by Acting TSA Deputy Administrator Mark Hatfield. Undercover agents posed as passengers and attempted to smuggle mock explosives or banned weapons through airport checkpoints.

President Obama has nominated Coast Guard Vice Admiral Peter Neffenger to serve as TSA Administrator and Assistant Secretary at DHS. His nomination is scheduled for consideration by the Senate Homeland Security and Governmental Affairs Committee this week, following his approval by the Senate Commerce, Science, and Transportation Committee last week. DHS Secretary Jeh Johnson also called for a detailed briefing from the DHS Inspector General and directed TSA to implement a series of immediate and near-term actions.

Both House Homeland Security Committee Chairman Mike McCaul (R-TX) and Ranking Member Rep. Bennie Thompson (D-MS) issued statements expressing concerns with TSA’s ability to prevent weapons from getting onto airplanes, calling the test results disturbing and alarming.

The Senate Homeland Security and Governmental Affairs Committee will hold a hearing on TSA oversight with DHS Inspector General John Roth and other government representatives this week, and continued scrutiny from Capitol Hill will certainly follow.

This Week’s Hearings:

  • Tuesday, June 9: The Senate Homeland Security and Governmental Affairs Committee will hold a hearing titled “Oversight of the Transportation Security Administration: First-Hand and Government Watchdog Accounts of Agency Challenges.”

  • Wednesday, June 10: The Senate Homeland Security and Governmental Affairs Committee will hold a hearing to consider the nomination of Vice Admiral Peter Neffenger to serve as Administrator of the Transportation Security Administration and Assistant Secretary at the Department of Homeland Security.

  • Wednesday, June 10: The House Homeland Security Subcommittee on Emergency Preparedness, Response, and Communication will hold a hearing titled “Defense Support of Civil Authorities: A Vital Resource in the Nation’s Homeland Security Missions.”

ARTICLE BY Ludmilla L. Savelieff & Norma M. Krayem of Squire Patton Boggs (US) LLP
© Copyright 2015 Squire Patton Boggs (US) LLP

New Ridesharing Legislation in California and Oregon Highlights Insurance Uncertainty in Emerging Industries

Proskauer Law firm

Managing a company’s exposure to new types of risks is often a complicated endeavor.  We’ve previously reported on the uncertainty that can arise when existing coverage models are applied to a new risk—such as losses arising from data breaches and other cyber-attacks.  Applying existing coverage models to emerging industries presents similar challenges.  These challenges were highlighted recently in the years-long dispute over insurance of ridesharing companies, like Lyft and Uber, which recently reached some degree of closure in California with the enactment of new insurance legislation for these companies.

Ridesharing companies have arisen in the past few years as an alternative to traditional forms of transportation, such as taxis.  These companies neither employ the drivers nor own the cars used for transportation; they essentially serve as an online “middleman” connecting passengers with freelance drivers for hire and expressly disavow that they provide any sort of “transportation services.”  This new business model—blurring the lines between traditional services and social media—presented many questions as to liability and, consequently, risk management.  These questions were brought to the fore earlier this year, when the family of a six year old girl killed by a ridesharing driver sued the ridesharing company.  The company disclaimed liability on the basis that it is not responsible for the acts of its drivers, especially when the drivers do not have ridesharing passengers or are not en route to pick up one.

Many ridesharing drivers have relied primarily on their personal automobile policies, eschewing business coverage altogether, reportedlyat the recommendation of the ridesharing companies themselves.  While ridesharing companies have carried excess insurance policies to cover ridesharing accidents, the insurance industry took the position that these policies did not cover such accidents because there was no primary coverage.  In other words, because the only “primary” insurance policies were personal use automobile policies that did not cover commercial livery use, the excess insurance could not be triggered.

On September 17, 2014, California AB-2293 was enacted to address this uncertainty of coverage.  The statute was the result of discussions between legislators, ridesharing companies, insurers, and traditional taxi companies.  It requires ridesharing companies in the state to provide $100,000 in coverage for their drivers that takes effect the moment a driver connects to the ridesharing company’s dispatch software and increases to $1 million once the driver agrees to pick up a passenger.  It also states that a personal automobile insurer does not have the duty to defend or indemnify claims arising out of ridesharing, unless the policy expressly provides such coverage, and it requires ridesharing companies to disclose this fact to their drivers.

Whether other states will follow California’s lead remains to be seen.  Legislation addressing ridesharing has been introduced across the country, and as one Pennsylvania state legislator observed, “By far the biggest issue is insurance.”  In other states, regulators are addressing the possible insurance gap.  Just days after California’s new statute was enacted, Oregon’s State Insurance Division issued a consumer advisory, warning of the potential unavailability of insurance coverage under personal insurance policies for ridesharing and other services provided in the peer-to-peer marketplace.

As Oregon Insurance Commissioner Laura Cali observed in connection with ridesharing, “When a new industry emerges, it often creates unique insurance situations.”  New industries may exist under insurance uncertainty for years or decades before legislation, regulation, or litigation clarifies the issue.  It is therefore critical when expanding into a nascent industry to consider how the risks of that industry may be managed, under either new or existing types of insurance coverage.

ARTICLE BY

Shawn Ledingham
OF
Proskauer Rose LLP

Colorado’s Cutting Edge Legislation Fosters Clean Fuel Truck Adoption

Lewis Roca Rothgerber

 

The State of Colorado recently passed HB 14-1326, the “Clean Trucks Bill,” catapulting itself into the group of cutting edge states that are on the forefront of the clean fuel issue. Recognizing that trucks represent a huge opportunity for emissions reductions by replacing diesel engine trucks with trucks reliant on clean fuels, the Clean Trucks Bill paves the way for improved air quality, reduction in greenhouse gases, promotion ofdomestic energy sources and ultimately, cost savings for industry and for consumers. The bill, which passed the Colorado Senate unamended from the version previously passed by the House, was sent to Governor Hickenlooper on May 12, 2014. The Governor is expected to sign the bill and pass it into law soon.

The Clean Trucks Bill employs several components to promote clean fuels. The bill recognizes that the expense of clean fuel trucks over their traditional fuel counterparts leaves clean fuel trucks at a competitive disadvantage, with clean fuel trucks costing between 25 and 75 percent more. As such, the bill expands the alternative fuel tax credit targeting trucks. While existing tax credits provided incentives for compressed natural gas and propane trucks, the bill broadens the category of eligible fuels by incorporating hydrogen and liquefied natural gas into the credit-eligible fuels. Electric or hybrid-electric vehicles greater than 8,500 pounds in gross vehicle weight ratio (GVWR) also become eligible for the tax credit. Additionally, the bill introduces tax credits for heavy duty trucks (greater than 26,000 GVWR) and expands tax credit eligibility to light and medium-duty trucks.

By promoting broader adoption of clean fuel trucks, eventually market development and economies of scale will cause clean fuel trucks to become more cost competitive. The bill provides an 8-year period to achieve those economies of scale, paring down the percentage of a clean fuel truck purchase or conversion that is eligible for the tax credit over that time period. However, the maximum amount of the credit remains constant over the life of the legislation; heavy-duty trucks are eligible for up to $20,000 in tax credits per income tax year, medium-duty trucks up to $15,000 per income tax year, and light-duty trucks up to $7,500 per income tax year.

But the Clean Trucks Bill didn’t stop at a package of clean fuel truck purchase or conversion tax credits. Aerodynamic technologies proven to improve fuel efficiency and clean fuel refrigerated trailers also gained eligibility for tax credits. (Previously, tax credits were only available for idling reduction technologies.) The importance of the inclusion of clean fuel trailers cannot be understated, as fleets prefer to use the same fuel for the truck as the trailer, and the tax credit provides an incentive for the purchase or conversion of the clean fuel trailer in companion with the clean fuel truck.

The Clean Trucks Bill also updates the sales tax exemption for low-emitting vehicles over 10,000 GVWR. Today, virtually every vehicle over 10,000 GVWR meets the eligibility requirements for the sales tax exemption. The Clean Trucks Bill limits that sales tax exemption to trucks meeting more stringent standards.

The final element of the Clean Trucks Bill eliminates the specific ownership tax penalty for purchasing a clean fuel truck. Because the specific ownership tax is based on the purchase price of a vehicle, clean fuel trucks with their higher purchase price stand at a disadvantage to traditional fuel trucks with a lower purchase price. The Clean Trucks Bill abrogates that penalty by reducing the price at which clean trucks are valued for purposes of the specific ownership tax to an amount comparable to traditional fuel vehicles. By equalizing the tax value of a clean fuel truck with a traditional fuel truck, local government recipients of specific ownership tax revenues are unaffected from a revenue standpoint.

The benefits of the Clean Trucks Bill are many. First, the bill stimulates Colorado’s economy by promoting trucks using clean fuels, of which Colorado is a major producer. The bill also supports reduced emissions and improved air quality by providing an incentive for cleaner fuel trucks. Finally, the bill encourages energy independence through the promotion of domestically-produced clean fuels like natural gas and propane, as well as hydrogen and liquefied natural gas. It’s not often legislation of this magnitude can be widely perceived as a win-win, but Colorado is on the eve of becoming one of few states to accomplish such a feat.

Article By:

Dave McGimpsey
Of:
Lewis Roca Rothgerber LLP