NEWS

CODIFYING RECIPROCITY IN NEW YORK STATE LAW:
PASSAGE OFTHE INTER-JURISDICTIONAL OPERATION ACT OF 2006

By Matthew W. Daus
Commissioner/Chair
New York City Taxi & Limousine Commission

For those who have been following border disputes and reciprocity issues over the years, I am pleased to announce our achievement of a legislative solution to the regulatory challenges of intra-state for-hire ground transportation.

I am hopeful that the Governor will sign the the New York State Senate and Assembly’s passage of the The Inter-Jurisdictional Pre-Arranged For-Hire Vehicle Operation Act (S8400/A11540) into law before the end of this summer. I took some time out to write this article because it is important for the industry to understand the effect of this new law, as well as our efforts to apply a common sense approach to this complex and sometimes divisive issue.

I have been personally involved in the reciprocity issue for almost a decade now. First as General Counsel to the New York City Taxi and Limousine Commission (TLC), and throughout my tenure as Commissioner/Chair.

While serving as counsel, I was involved in the negotiation and drafting of the reciprocity agreement with Westchester County’s TLC, ending an intrastate border dispute with the first such accord in New York State history. I was also involved in the negotiation with Congress and industry stakeholders leading to the enactment of the Real Interstate Driver Equity Act (RIDE Act), which not only brought to an end a protracted series of issues between the states and for-hire industries of New York and New Jersey, but which codified.

Finally, I currently have done everything possible to foster unity between our neighboring counties in light of recent disputes between the industry and regulators. These latest efforts have resulted in the innovative legislation described more fully in this article.

For newcomers, the basics are deceptively simple. The absence of a uniform statewide authority in New York to regulate and monitor the provision of for-hire service has resulted in municipalities traveling down sometimes differing paths to address who, when and how to require licensing.

The term “reciprocity” has been used to describe the mutual recognition of licenses by two or more regulatory jurisdictions or, in context, the issuance of a vehicle license by one jurisdiction allows certain for-hire activity in another jurisdiction without requiring the applicant to obtain multiple licenses, as long as minimum standards to obtain licenses in either jurisdiction are similar.

Some other key terms essential to understanding the issue are:

(a) “point-to-point” travel (the passenger’s trip both originates and ends within the same municipal jurisdiction);

(b) “drop-offs” (the passenger’s trip originates in the jurisdiction of the licensed vehicle and ends in another intrastate jurisdiction where the vehicle may not be licensed); and

(c) “Tier II or III activity” (the passenger’s trip originates in a jurisdiction where the vehicle is not licensed for a destination where the vehicle may be licensed).

In 1992, the New York State Legislature passed a law, codified as Article 17-B, Section 498 of the New York State Vehicle & Traffic Law (VTL), which allowed every for-hire vehicle licensed anywhere outside New York City to obtain Tier II or III permits to pick up passengers within New York City (NYC) for trips that end in the licensing jurisdiction. However, with the exception of NYC, this law did not prevent jurisdictions from requiring permits or licenses for merely dropping off passengers within their borders from elsewhere.

Consistent with the 1992 VTL provisions, the TLC’s regulations define for-hire vehicle permits by three categories: Tier I (allowing “point-to-point” travel wholly within New York City); Tier II (allowing vehicles to “pick-up” passengers in NYC for destinations outside NYC); and Tier III (allowing vehicles to “pick-up” passengers at NYC airports for destinations outside NYC).

It is important to note that a Tier I vehicle must be driven by a person with a valid TLC operator’s license, and that vehicle must also be affiliated with a TLC licensed base. Tier II or III vehicle permit holders are not required to be affiliated with NYC licensed bases or to have these vehicles driven by TLC licensed drivers (instead, the drivers must be licensed by any other jurisdiction which meets certain minimum licensing standards).

The Tier II and III vehicle permit process provides the TLC with an opportunity to ensure, among other things, that appropriate for-hire insurance is carried before passengers can be picked-up in NYC for travel to outside destinations.

Other jurisdictions have required permits for the mere “drop-off” of passengers. Westchester County had done so prior to the reciprocity agreement reached with NYC several years ago, and Nassau County continues to do so. The authority to assert jurisdiction based on “drop-offs” alone was asserted via a loophole in the 1992 VTL which will no longer exist should Governor Pataki sign this new law.

Thankfully, the Inter-Jurisdictional Act would repeal these provisions and create a more fair system that guarantees the right for New York City licensed for-hire vehicles to drop-off passengers anywhere in New York State, and for Nassau and Westchester Counties to voluntarily “opt-in” to the reciprocity statute’s protections if its licensing standards and other requirements are met.

In addition to firmly establishing equitable “drop-off” procedures, the legislation eliminates the need for for-hire vehicle owners and drivers to apply for Tier II or III permits and/or licenses within each participating jurisdiction where they operate.

It also clearly sets forth the criteria necessary for government regulators to qualify for reciprocity, including but not limited to: criminal background checks and disqualification for certain serious criminal convictions, annual drug testing, appropriate inspection and insurance provisions, the display or easy access to drivers’ licenses for passengers, and the establishment of a point-based licensee monitoring system for traffic violations similar to the TLC’s Critical Driver Program.

In addition, the legislation will also require the electronic sharing of basic licensing data between participating jurisdictions for law enforcement and adjudication purposes only, the suspension of licenses for unpaid civil judgments and penalties owed to participating jurisdictions, and the maintenance of trip logs and information by licensees for all inter-jurisdictional trips.

The legislative solution sought was based primarily upon the need to achieve consistency and fair play under the law, while also creating an incentive for our neighboring licensed businesses and government entities to raise their licensing standards. This new law is consistent with my strongly held belief that it is neither good business nor good government to perpetuate disputes and impose burdensome licensing regulations which may have an adverse impact on both interstate and intrastate for-hire vehicle travel.

Another important reason why we pursued a legislative solution was to promote regulatory stability. Reciprocity agreements may expire and the renewal of such compacts (as well as the terms of renewal) could depend on future administrations in multiple New York State jurisdictions. Of course, such uncertainties are not good for the businesses that wish to plan ahead, and multiple negotiations over time with numerous government entities may lead to differing and inequitable results not to mention the expenditure of government resources involved in doing so.

The implementation of this new legislation will have an impact on some fundamental operations at the TLC and the way reciprocity is administered:

First, to accomplish reciprocity with any of the subject jurisdictions, instead of negotiating a complicated agreement, each county will only need to place the other participating county on notice that the terms or conditions of the statute are being met.

Second, the TLC will no longer issue Tier II or III licenses –
effective immediately.

There are so many people I would like to thank for the passage of this legislation, including TLC staff, the NYC Law Department, the Mayor’s Office of Legislative Affairs, State Senator Marty Golden and Assemblyman Jose Peralta, Victor Dizengoff of the Black Car Assistance Corporation, as well as Commissioner Barbara Monohan of the Westchester County TLC.

Up until a few hours before the legislative session ended, it seemed as if the bill was not going to pass due to miscommunications and other issues. But I can truly say that if it were not for a few key factors, the bill would not have passed, namely the support of Senator Golden, the reasonableness of Commissioner Monohan and the efforts of Victor Dizengoff.

Although the TLC and its regulated industries disagree on matters from time to time, the key to successful regulation is respecting one another and compromising for the best interests of the public. Certainly, my longstanding working relationships with the key players mentioned helped facilitate the necessary communication and trust that resulted in a compromise and passage of the bill.

We must keep these working relationships positive and active as we have for several years. There have been similar situations to speak of during my tenure, including the efforts of industry leaders Victor Dizengoff, Barry Lefkowitz from the Limousine Association of New Jersey (LANJ), and Al LaGasse from the Taxicab, Limousine & Paratransit Association (TLPA), who helped lay the groundwork to establish Federal legislative solutions to interstate jurisdictional disputes via the RIDE Act which has likewise inspired this new model intrastate legislation.

It is important to point out that the final draft of this legislation applies only to the Counties of Nassau and Westchester, and New York City. It is my hope that, in the future, we can convince the legislature that the regulatory model for reciprocity established by this legislation can and should apply to the entire state.

As more and more jurisdictions contemplate the possibility of regulation, it is important to have consistent, fair and high licensing standards, while also protecting the right of passengers to travel freely within the state and for the industry to conduct business without having to worry about jurisdictional barriers.

Over the last year, both Suffolk and Rockland Counties have considered regulation of the for-hire vehicle industry and more counties and municipalities may do so in the future, so we should be ready to codify our standards now to prevent border disputes forever within New York State and, hopefully, throughout the United States.

© 2015 TLC Magazine Online, Inc.