BILL REQ. #:  H-0473.4 

     AN ACT Relating to for hire vehicles and for hire vehicle operators; amending RCW 82.16.010, 82.16.040, and 82.16.020; adding new sections to chapter 51.08 RCW; adding new sections to chapter 51.12 RCW; and adding a new section to chapter 51.16 RCW.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION.  Sec. 1   A new section is added to chapter 51.08 RCW to read as follows:
     The legislature finds that taxicab, limousine, and other for hire vehicle operators are at significant risk of injury due to work-related accidents, or work-related crimes such as robbery that may not be covered by standard vehicle insurance policies. Since almost all taxicab, limousine, and other for hire vehicle business operations are independent small business franchises, their owners or operators may opt out of industrial insurance coverage without full consideration for the risk of financial exposure due to such action. As a result, health care may be provided to them at public expense or not at all, and erroneous claims may be made by health care providers for insurance coverage, against the state department of labor and industries, private businesses, or the taxicab associations in which certain municipalities require participation. For hire vehicle operators do not enjoy the benefit of the broad public policy embodied in this title that mandates industrial insurance protection for workers. The legislature therefore declares that all taxicab, limousine, and other for hire vehicle businesses, defined in this act as "urban transportation business" operations, and all for hire vehicle operators are subject to mandatory industrial insurance coverage under this title.

NEW SECTION.  Sec. 2   A new section is added to chapter 51.08 RCW to read as follows:
     (1) As an exception to the definition of "worker" under RCW 51.08.180, services performed by an individual for remuneration do not constitute employment subject to this title if it is shown that the person operating a for hire vehicle or an urban transportation business: (a) Has an ownership or leasehold interest in a vehicle that is operated as a "for hire vehicle" under chapters 46.72 and 46.72A RCW, or under regulatory authority granted pursuant to chapter 81.72 RCW; and is operating such vehicle as a "for hire operator" as defined in RCW 46.72.010; and (b) meets all the requirements in RCW 51.08.195 (1) through (6) to qualify for the exception to the definition of "worker" under RCW 51.08.195.
     (2) For the purposes of this section, "for hire vehicle" has the same meaning as provided in RCW 46.72.010 and "urban transportation business" has the same meaning as provided in RCW 82.16.010.

Sec. 3   RCW 82.16.010 and 2007 c 6 s 1023 are each amended to read as follows:
     For the purposes of this chapter, unless otherwise required by the context:
     (1) "Railroad business" means the business of operating any railroad, by whatever power operated, for public use in the conveyance of persons or property for hire. It shall not, however, include any business herein defined as an urban transportation business.
     (2) "Express business" means the business of carrying property for public hire on the line of any common carrier operated in this state, when such common carrier is not owned or leased by the person engaging in such business.
     (3) "Railroad car business" means the business of operating stock cars, furniture cars, refrigerator cars, fruit cars, poultry cars, tank cars, sleeping cars, parlor cars, buffet cars, tourist cars, or any other kinds of cars used for transportation of property or persons upon the line of any railroad operated in this state when such railroad is not owned or leased by the person engaging in such business.
     (4) "Water distribution business" means the business of operating a plant or system for the distribution of water for hire or sale.
     (5) "Light and power business" means the business of operating a plant or system for the generation, production or distribution of electrical energy for hire or sale and/or for the wheeling of electricity for others.
     (6) "Telegraph business" means the business of affording telegraphic communication for hire.
     (7) "Gas distribution business" means the business of operating a plant or system for the production or distribution for hire or sale of gas, whether manufactured or natural.
     (8) "Motor transportation business" means the business (except urban transportation business) of operating any motor propelled vehicle by which persons or property of others are conveyed for hire, and includes, but is not limited to, the operation of any motor propelled vehicle as an auto transportation company (except urban transportation business), common carrier or contract carrier as defined by RCW 81.68.010 and 81.80.010: PROVIDED, That "motor transportation business" shall not mean or include the transportation of logs or other forest products exclusively upon private roads or private highways.
     (9) "Urban transportation business" means the business of operating:
     (a) Any vehicle for public use in the conveyance of persons or property for hire, insofar as (((a))) (i) operating entirely within the corporate limits of any city or town, or within five miles of the corporate limits thereof, or (((b))) (ii) operating entirely within and between cities and towns whose corporate limits are not more than five miles apart or within five miles of the corporate limits of either thereof. Included herein, but without limiting the scope hereof, is the business of operating passenger vehicles of every type and also the business of operating cartage, pickup, or delivery services, including in such services the collection and distribution of property arriving from or destined to a point within or without the state, whether or not such collection or distribution be made by the person performing a local or interstate line-haul of such property; or
     (b) Any for hire vehicle as defined in RCW 46.72.010, limousine as defined in RCW 46.72A.010, or a taxicab governed by the laws under chapter 46.72 or 81.72 RCW, for the purpose of transporting persons or goods for compensation. For the purpose of this subsection (9)(b) this term does not include the leasing of equipment, or the leasing of vehicles licensed under chapters 81.72, 46.72, and 46.72A RCW, or the providing of any other services to urban transportation businesses.
     (10)(a) "Public service business" means any of the businesses defined in subsections (1), (2), (3), (4), (5), (6), (7), (8), and (9) of this section or any business subject to control by the state, or having the powers of eminent domain and the duties incident thereto, or any business hereafter declared by the legislature to be of a public service nature, except telephone business and low-level radioactive waste site operating companies as redefined in RCW 81.04.010. It includes, among others, without limiting the scope hereof: Airplane transportation, boom, dock, ferry, pipe line, toll bridge, toll logging road, water transportation and wharf businesses.
     (b) The definitions in this subsection (10)(b) apply throughout this subsection (10).
     (i) "Competitive telephone service" has the same meaning as in RCW 82.04.065.
     (ii) "Network telephone service" means the providing by any person of access to a telephone network, telephone network switching service, toll service, or coin telephone services, or the providing of telephonic, video, data, or similar communication or transmission for hire, via a telephone network, toll line or channel, cable, microwave, or similar communication or transmission system. "Network telephone service" includes the provision of transmission to and from the site of an internet provider via a telephone network, toll line or channel, cable, microwave, or similar communication or transmission system. "Network telephone service" does not include the providing of competitive telephone service, the providing of cable television service, the providing of broadcast services by radio or television stations, nor the provision of internet service as defined in RCW 82.04.297, including the reception of dial-in connection, provided at the site of the internet service provider.
     (iii) "Telephone business" means the business of providing network telephone service. It includes cooperative or farmer line telephone companies or associations operating an exchange.
     (iv) "Telephone service" means competitive telephone service or network telephone service, or both, as defined in (b)(i) and (ii) of this subsection.
     (11) "Tugboat business" means the business of operating tugboats, towboats, wharf boats or similar vessels in the towing or pushing of vessels, barges or rafts for hire.
     (12) "Gross income" means the value proceeding or accruing from the performance of the particular public service or transportation business involved, including operations incidental thereto, but without any deduction on account of the cost of the commodity furnished or sold, the cost of materials used, labor costs, interest, discount, delivery costs, taxes, or any other expense whatsoever paid or accrued and without any deduction on account of losses.
     (13) The meaning attributed, in chapter 82.04 RCW, to the term "tax year," "person," "value proceeding or accruing," "business," "engaging in business," "in this state," "within this state," "cash discount" and "successor" shall apply equally in the provisions of this chapter.

NEW SECTION.  Sec. 4   A new section is added to chapter 51.08 RCW to read as follows:
     Operating under contract of service or in accordance with applicable laws does not constitute evidence of control or direction for the purposes of determining status as a worker or determining employment or independent contractor status, pursuant to the exceptions set forth in RCW 51.08.181 in regards to urban transportation businesses as defined in RCW 82.16.010 or for hire vehicles or for hire operators as defined in RCW 46.72.010.

Sec. 5   RCW 82.16.040 and 1996 c 111 s 4 are each amended to read as follows:
     The provisions of this chapter ((shall)) do not apply to persons engaging in one or more businesses taxable under this chapter whose total gross income is less than two thousand dollars for a monthly period or portion thereof unless such business is an urban transportation business. Any person claiming exemption under this section may be required to file returns even though no tax may be due. If the total gross income for a taxable monthly period is two thousand dollars, or more, no exemption or deductions from the gross operating revenue is allowed by this provision.

Sec. 6   RCW 82.16.020 and 1996 c 150 s 2 are each amended to read as follows:
     (1) There is levied and there shall be collected from every person a tax for the act or privilege of engaging within this state in any one or more of the businesses herein mentioned. The tax shall be equal to the gross income of the business, multiplied by the rate set out after the business, as follows:
     (a) Express, sewerage collection, and telegraph businesses: Three and six-tenths percent;
     (b) Light and power business: Three and sixty-two one-hundredths percent;
     (c) Gas distribution business: Three and six-tenths percent;
     (d) Urban transportation business: Six-tenths of one percent;
     (e) Vessels under sixty-five feet in length, except tugboats, operating upon the waters within the state: Six-tenths of one percent;
     (f) Motor transportation, railroad, railroad car, and tugboat businesses, and all public service businesses other than ones mentioned above: One and eight-tenths of one percent;
     (g) Water distribution business: Four and seven-tenths percent.
     (2) An additional tax is imposed equal to the rate specified in RCW 82.02.030 multiplied by the tax payable under subsection (1) of this section.
     (3) Twenty percent of the moneys collected under subsection (1) of this section on water distribution businesses and sixty percent of the moneys collected under subsection (1) of this section on sewerage collection businesses ((shall)) must be deposited in the public works assistance account created in RCW 43.155.050.
     (4) Fifty percent of the moneys collected under subsection (1)(d) of this section and from urban transportation businesses under subsection (2) of this section must be remitted to the department of labor and industries for the purpose of providing mandatory industrial insurance to urban transportation businesses and their licensed for hire vehicle operators, as provided pursuant to Title 51 RCW. For the purposes of this subsection (4), "for hire vehicle operator" has the same meaning as provided in RCW 46.72.010.

NEW SECTION.  Sec. 7   A new section is added to chapter 51.12 RCW to read as follows:
     (1) Any urban transportation business licensed pursuant to or operating a for hire vehicle under chapter 46.72, 46.72A, or 81.72 RCW, and who is operating such vehicle as a for hire operator, is within the mandatory coverage of this title. Such urban transportation business or for hire vehicle operator license must be granted by the department of licensing subject to mandatory industrial insurance coverage and must be suspended or revoked in the event of failure to file report of, and pay, applicable premiums or taxes, including but not limited to the public utility tax as levied upon urban transportation businesses pursuant to RCW 82.16.020.
     (2) A for hire vehicle operator must be registered or affiliated with an urban transportation business and must have evidence of such affiliation whenever operating a for hire vehicle. The department of labor and industries, the department of revenue, and the department of licensing must adopt rules to implement this section.
     (3) For the purposes of this section, "for hire vehicle" and "for hire operator" have the same meaning as provided in RCW 46.72.010 and "urban transportation business" has the same meaning as provided in RCW 82.16.010.

NEW SECTION.  Sec. 8   A new section is added to chapter 51.12 RCW to read as follows:
     (1) Any urban transportation business as defined in RCW 82.16.010 with workers subject to the employment provisions of RCW 51.08.180, and not otherwise eligible for an exemption, and accordingly paying industrial insurance premiums, must receive as credit against such premiums in the amount of any public utility tax paid under RCW 82.16.020, with credit to employers and employees proportionate to their share of such insurance premiums paid.
     (2) Notwithstanding any other provision of this act, such employer may opt for industrial insurance coverage for its urban transportation business and for hire vehicle operators pursuant to, and under the provisions of, this act.
     (3) The department of labor and industries must adopt rules to implement this section to ensure that costs and benefits of mandatory industrial insurance are uniformly applied and received by all urban transportation businesses, and for hire vehicle operators, without regard to business employment or financial structure.

NEW SECTION.  Sec. 9   A new section is added to chapter 51.12 RCW to read as follows:
     In order to control claims costs, particularly costs related to the self-monitoring of industrial insurance claims by small, independently operated urban transportation businesses, the department of labor and industries may empower a panel with disinterested, independent third party adjudicators with transportation industry experience and expertise; authority to review, approve, or reject claims; and authority to advise the department of labor and industries with respect to such.

NEW SECTION.  Sec. 10   A new section is added to chapter 51.12 RCW to read as follows:
     (1) Any entity regulating or setting consumer rates for urban transportation businesses, including specifically cities, towns, counties, and port districts setting the rates charged for taxicab service under chapter 81.72 RCW, or for hire vehicles or limousines operating under the authority of chapter 46.72 or 46.72A RCW or a taxicab under chapter 46.72 RCW, must: (a) Consider the impact of the public utility tax on urban transportation providers within its jurisdiction in the calculation and setting of such consumer rates; and (b) adjust such consumer rates to offset any increased cost to urban transportation businesses and for hire vehicle operators of mandatory industrial insurance coverage, within one hundred eighty days of the effective date of this act.
     (2) Rate-setting authority under this section is limited to the setting of consumer rates for the provision of transportation services.
     (3) Cities, towns, counties, and port districts that set consumer rates charged for taxicab service pursuant to chapter 81.72 RCW, or for other urban transportation businesses subject to the public utility tax and subject to mandatory industrial insurance pursuant to this act, are specifically prohibited from establishing, regulating, or otherwise setting rates for the leasing of for hire vehicles, including licensed taxicabs, by urban transportation industry service providers to urban transportation businesses or their for hire vehicle operators for this or any other purpose.

NEW SECTION.  Sec. 11   A new section is added to chapter 51.16 RCW to read as follows:
     (1) The department must assess premiums, under the provisions of this section, on urban transportation businesses in accordance with chapter 51.12 RCW. This premium assessment must be for the purpose of providing mandatory industrial insurance coverage while operating a for hire vehicle under chapter 46.72, 46.72A, or 81.72 RCW. The department may adopt rules under chapter 34.05 RCW to carry out the purposes of this section, including rules providing for alternative reporting periods and payment due dates for coverage under this section. The department rules must ensure that premiums assessed upon urban transportation businesses are proportionate to, and are assessed with credit for, taxes paid by urban transportation businesses for mandatory industrial insurance coverage levied in accordance with RCW 82.16.020(4) such that there must be no net revenue increase or decrease to state tax revenue deposited to any fund, budget, or account pursuant to RCW 43.135.035(6) except for the purposes of assessing and collecting mandatory industrial insurance coverage insurance premiums under this title including costs of premium collection.
     (2) The department must compute industrial insurance premium rates on a per license basis, which premium rate must be assessed at the time of each issuance or renewal of the for hire vehicle operator license, in an amount established by department rule for coverage under this section, with initial payment at the time of for hire operator license issuance, and further payment reported and paid by the urban transportation business with which the for hire vehicle license is affiliated, with the urban transportation business tax under chapter 51.12 RCW. Premium assessments must be determined in accordance with the requirements of this title, except that assessments must be experience rated with reference to all for hire vehicle operators subject to mandatory insurance coverage under RCW 82.16.020.
     (3) Alternate rules for the collection of premiums under this section may be established by the department of revenue and the department of licensing. Premiums must be deposited in the industrial insurance trust funds as provided under rules of the department.

NEW SECTION.  Sec. 12   If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.