HF 545 (LSB 1352HV (2) 91)

HOUSE FILE 545

BY  COMMITTEE ON COMMERCE

(SUCCESSOR TO HF 7)

A BILL FOR

An Act providing for the regulation of delivery network companies and drivers, making penalties applicable, and including effective date provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 321.518, Code 2025, is amended to read as follows:
   321.518  On-demand driverless-capable vehicle network.
   A person may operate an on-demand driverless-capable vehicle network. An on-demand driverless-capable vehicle network may be used to facilitate the transportation of persons or goods, including transportation for hire as defined in section 325A.1, and public transportation. An on-demand driverless-capable vehicle network may connect passengers persons to driverless-capable vehicles either exclusively or as part of a digital network that also connects passengers persons to conventional human drivers who provide transportation or delivery services, consistent with chapter 321N or 321Q, or any other applicable laws, in vehicles that are not driverless-capable vehicles.
    Sec. 2.  NEW SECTION.  321Q.1  Definitions.
   As used in this chapter:
   1.  “Delivery network company” or “company” means a corporation, partnership, sole proprietorship, or other entity that operates in this state and uses a digital network to connect a delivery network company customer to a delivery network driver to provide delivery services. “Delivery network company” does not include an entity engaged in the delivery of the entity’s products by the entity’s employees.
   2.  “Delivery network company customer” or “customer” means a person who uses a delivery network company’s digital network to request the delivery of goods.
   3.  “Delivery network driver” or “driver” means an individual who does all of the following:
   a.  Receives delivery service requests from a delivery network company’s digital network.
   b.  Uses a personal vehicle to provide delivery services.
   4.  “Delivery service” means the fulfillment of a delivery request by a driver to a customer during the delivery service period. “Delivery service” includes a series of deliveries made by a driver to different customers.
   5.  “Delivery service period” means the period between a driver accepting a request to deliver goods and the delivery of such goods. “Delivery service period” begins when a driver starts operating a personal vehicle en route to pick up goods for a delivery or series of deliveries as documented by the digital network controlled by a delivery network company. “Delivery service period” includes the period during which the driver transports the requested goods for delivery, and ends upon delivery of the requested goods to any of the following:
   a.  The customer or the last customer in a series of deliveries.
   b.  A location designated by the delivery network company, including for purposes of returning the goods.
   6.  “Digital network” means an online-enabled application, internet site, or system offered or utilized by a delivery network company that enables delivery services.
   7.  “Financial liability coverage” means the same as defined in section 321.1, subsection 24B.
   8.  “Personal vehicle” means a noncommercial motor vehicle that is used by a delivery network driver and is owned, leased, or otherwise authorized for use by the delivery network driver. “Personal vehicle” does not include a taxicab, limousine, or other vehicle for hire.
    Sec. 3.  NEW SECTION.  321Q.2  Interaction with other law.
   Nothing in this chapter limits the scope of federal or state law regarding delivery or transport of goods. Deliveries made under this chapter that are subject to such other law must also comply with the requirements of that law. In the event of a conflict between this chapter and another law dealing with the delivery or transport of goods, the other law prevails.
    Sec. 4.  NEW SECTION.  321Q.3  Financial responsibility.
   1.  A delivery network driver, or a delivery network company on the driver’s behalf, shall maintain financial liability coverage that does all of the following:
   a.  Recognizes that the driver is a delivery network driver or that the driver otherwise uses a personal motor vehicle to deliver goods.
   b.  Covers the driver during the delivery service period.
   c.  Covers the driver in the amounts set forth in subsection 2.
   2.  a.  During the delivery service period, financial liability coverage shall cover the driver in the amount of at least fifty thousand dollars for damages arising out of bodily injury to or death of any one person in a crash or collision, at least one hundred thousand dollars for damages arising out of bodily injury to or death of two or more persons in a crash or collision, and at least twenty-five thousand dollars for all damages arising out of damage to or destruction of property in a crash or collision.
   b.  The requirements of paragraph “a” shall be in addition to the automobile insurance requirements set forth in chapter 516A or any other provision of law.
   c.  The requirements of paragraph “a” may be satisfied by any of the following:
   (1)  Insurance maintained by the delivery network driver.
   (2)  Insurance maintained by the delivery network company.
   (3)  A combination of subparagraphs (1) and (2).
   3.  If the financial liability coverage maintained by a delivery network driver under this chapter lapses or does not provide coverage in the amounts required by subsection 2, insurance maintained by a delivery network company shall provide the financial liability coverage required by subsection 2 beginning with the first dollar of a claim and the company shall have the duty to defend the claim.
   4.  Coverage under an automobile insurance policy maintained by a delivery network company under this chapter shall not be dependent on the insurer of a driver’s personal vehicle first denying a claim, nor shall a personal automobile insurance policy be required to first deny a claim.
   5.  Insurance maintained under this chapter shall be provided by an insurer governed by chapter 515, or by a surplus lines insurer governed by chapter 515I.
   6.  Insurance maintained under this chapter shall be deemed to satisfy the financial responsibility requirements for a motor vehicle under chapter 321A.
   7.  A delivery network driver shall carry proof of financial liability coverage, as required by section 321.20B, in the amounts required by subsection 2, at all times while using a personal vehicle in connection with a digital network. In the event of a crash or collision, the driver shall provide proof of financial liability coverage to any directly interested party or insurer, and to any investigating law enforcement officer, upon request and in a format provided for under section 321.20B. Upon such a request, the driver shall also disclose to any directly interested party or insurer, and to any investigating law enforcement officer, whether the driver was operating during the delivery service period providing delivery services at the time of the crash or collision. A delivery network driver who fails to carry proof of financial liability coverage is subject to section 321.20B.
    Sec. 5.  NEW SECTION.  321Q.4  Disclosure requirements.
   A delivery network company shall disclose all of the following to a delivery network driver in writing before the driver may accept a request from a customer for delivery services on the delivery network company’s digital network:
   1.  The types, amounts, terms, and limits of automobile insurance provided by the company to the driver while the driver uses a personal vehicle in connection with the use of the company’s digital network.
   2.  That the driver’s own automobile insurance policy, depending on the policy’s terms, may not provide any coverage during the delivery service period.
    Sec. 6.  NEW SECTION.  321Q.5  Insurers.
   1.  a.  Notwithstanding any other provision of law to the contrary, an insurer that writes automobile insurance within this state may exclude any and all coverage afforded to an insured person under a policy issued to the owner or operator of a personal vehicle for any injury or loss that occurs while the insured is logged on to a delivery network company’s digital network during the delivery service period. This right to exclude coverage may apply to any type of coverage provided for in the insured’s policy, including but not limited to liability coverage for bodily injury, death, and property damage, personal injury protection coverage, uninsured and underinsured motorist coverage, medical payments coverage, comprehensive physical damage coverage, and collision physical damage coverage.
   b.  This chapter shall not be construed to require an insurer to provide coverage to an individual during the delivery service period or while otherwise delivering goods for compensation.
   c.  This chapter shall not be construed to preclude an insurer from providing coverage for a delivery network driver’s personal vehicle, if the insurer chooses to do so by contract or endorsement.
   2.  a.  An insurer that excludes coverage pursuant to subsection 1 shall not have a duty to defend or indemnify a claim expressly excluded from a policy issued by the insurer. This chapter shall not be deemed to invalidate or limit an exclusion contained in a policy, including a policy in use or approved for use in this state prior to the effective date of this Act, that excludes coverage for vehicles used for delivery service.
   b.  An insurer that defends or indemnifies a claim against an insured delivery network driver that is excluded under the terms of the driver’s policy shall have a right of action for contribution or indemnity against an insurer providing automobile insurance to the driver under this chapter during the period in which the loss occurred.
   3.  The insurer or insurers of a delivery network company providing coverage under section 321Q.3, subsection 2, shall assume primary liability for a claim when a dispute exists as to when the delivery service period began or ended, and when the delivery network company does not have available, did not retain, or fails to provide the information required by section 321Q.3, subsection 7.
   4.  In a claims coverage investigation, any involved delivery network company and any insurer providing coverage pursuant to this chapter shall cooperate to facilitate the exchange of relevant information with one another, and with any insurer of the delivery network driver, where applicable, including but not limited to the precise times during which the driver began and ended the delivery services period on the delivery network company’s digital network in the twelve-hour period immediately preceding the crash or collision and in the twelve-hour period immediately following the crash or collision, and shall disclose to one another a clear description of any relevant automobile insurance provided pursuant to this chapter, including any applicable limits and exclusions.
    Sec. 7.  NEW SECTION.  321Q.6  Company-driver relationship.
   1.  A delivery network company is not deemed to control, direct, or manage a delivery network driver that connects to the company’s digital network, or the driver’s personal vehicle, except as agreed to by the company and the driver pursuant to a written contract.
   2.  A delivery network driver shall be considered an independent contractor and shall not be considered an agent or employee of a delivery network company.
    Sec. 8.  Section 325A.1, subsections 7, 12, and 15, Code 2025, are amended to read as follows:
   7.  “Motor carrier” means a person defined in subsection 9, 10, 11, or 12, but does not include a transportation network company or a transportation network company driver, as defined in section 321N.1, or delivery network company or delivery network driver, as defined in section 321Q.1.
   12.  “Motor carrier of property” means a person engaged in the transportation, for hire, of property by motor vehicle including a carrier transporting liquid commodities or compressed gases in a vehicle having a total cargo tank shell capacity of two thousand gallons or less, other than a delivery network company or delivery network driver, as defined in section 321Q.1.
   15.  “Private carrier” means a person who provides transportation of property or passengers by motor vehicle or who transports commodities of which the person is the owner, lessee, or bailee and the transportation is a furtherance of the person’s primary business or occupation, but is not a for-hire motor carrier, or a transportation network company or a transportation network company driver, as defined in section 321N.1, or a delivery network company or delivery network driver, as defined in section 321Q.1.
    Sec. 9.  Section 325A.1, subsection 10, unnumbered paragraph 1, Code 2025, is amended to read as follows:
   “Motor carrier of household goods” means a person engaged in the transportation, for hire, of personal effects and property used or to be used in a dwelling, and includes other than a delivery network company or delivery network driver, as defined in section 321Q.1, including all of the following:
    Sec. 10.  Section 327D.1, Code 2025, is amended to read as follows:
   327D.1  Applicability of chapter.
   This chapter applies to intrastate transportation by for-hire common carriers of persons and property. However, this chapter does not apply to regular route motor carriers of passengers or charter carriers, as defined under section 325A.12, or a transportation network company or a transportation network company driver, as defined in section 321N.1, or delivery network company or a delivery network driver, as defined in section 321Q.1.
    Sec. 11.  EFFECTIVE DATE.  This Act takes effect July 1, 2026.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill provides for the regulation of delivery network companies (DNCs) and delivery network drivers (drivers). A DNC is an entity that uses a digital network to connect DNC customers to drivers who provide delivery services.
   During the delivery service periods, the bill requires financial liability coverage to cover the driver in the amount of at least $50,000 for bodily injury to or death of one person in any one crash or collision, $100,000 for bodily injury to or death of two or more persons in any one crash or collision, and $25,000 for injury to or destruction of property of others in any one crash or collision. The insurance required by the bill may be maintained by the driver, the DNC, or both.
   Under the bill, if the financial liability coverage maintained by a driver lapses or does not provide coverage in the amounts required by the bill, insurance maintained by a DNC must provide the coverage beginning with the first dollar of a claim, and the DNC is required to defend the claim. In addition, insurance maintained by a DNC is prohibited from being dependent on the insurer of a driver’s personal vehicle first denying a claim.
   The financial liability coverage required by the bill must be provided by an insurer governed by Code chapter 515, or by a surplus lines insurer governed by Code chapter 515I.
   The bill requires a driver to carry proof of financial liability coverage at all times during which the driver uses a vehicle in connection with the use of a DNC’s digital network. In the event of a crash or collision, the driver must provide the proof of financial liability coverage, upon request, to any directly interested party or insurer, and to any investigating police officer.
   The bill requires a DNC to disclose to a driver in writing the types, amounts, terms, and limits of financial liability coverage provided by the DNC to the driver while the driver uses a personal vehicle in connection with the use of the DNC’s digital network, and the fact that the driver’s own financial liability coverage may not provide coverage during the delivery service period.
   The bill provides that an insurer may exclude coverage afforded to an insured person under a policy issued to the owner or operator of a personal vehicle for any injury or loss that occurs while the insured is logged on to a DNC’s digital network during the delivery service period. An insurer that excludes coverage in this way does not have a duty to defend or indemnify a claim so excluded from a policy issued by the insurer. An insurer that defends or indemnifies a claim against an insured driver that is excluded under the terms of the driver’s policy has a right of action for contribution or indemnity against an insurer providing financial liability coverage to the driver during the period in which the loss occurred.
   In addition, the bill provides that in a claims coverage investigation, any involved DNC and any insurer potentially providing coverage must cooperate to facilitate the exchange of relevant information with parties directly involved in the claim.
   The bill provides that a DNC is not deemed to control, direct, or manage a driver that connects to the DNC’s digital network, or the driver’s personal vehicle, except as agreed to by the DNC and the driver pursuant to a written contract, and that a driver is an independent contractor, not an agent or employee of a DNC.
   The bill exempts drivers from Code chapters 325A (motor carrier authority) and 327D (regulation of carriers).
   Under current law, a person who violates provisions relating to proof of financial liability coverage (Code section 321.20B), including a driver under the bill, is subject to a scheduled fine of $325, or $645 if the person was involved in an accident, among other consequences. There are no penalties set forth in the bill for DNCs that violate the provisions of the bill.
   Code chapter 321N regulates transportation network companies and restricts certain persons from being eligible to operate as a transportation network company driver. A driver is not subject to the same exclusions while performing delivery services.
   The bill takes effect July 1, 2026.