Call to Order and Roll Call
The 2nd meeting of the Interim Joint Committee on Transportation was held on<Day> Thursday, July 6, 2017, at 10:00 AM, in Room 154 of the Capitol Annex. Representative Marie Rader, Chair, called the meeting to order, and the secretary called the roll. The minutes from the committee’s June 6, 2017 meeting were approved.
Present were:
Members: Senator Ernie Harris, Co-Chair; Representative Marie Rader, Co-Chair; Senators C.B. Embry Jr., Jimmy Higdon, Gerald A. Neal, Albert Robinson, Brandon Smith, Johnny Ray Turner, and Mike Wilson; Representatives Tim Couch, Ken Fleming, Chris Fugate, Al Gentry, David Hale, Chris Harris, Toby Herald, Dennis Horlander, Kenny Imes, Dan Johnson, James Kay, Donna Mayfield, Robby Mills, Tim Moore, Rick Rand, Steve Riggs, Sal Santoro, John Sims Jr, Jim Stewart III, and Walker Thomas. Senator Dorsey Ridley attended the meeting via Go-to-meeting videoconference.
Guests: Anne Teigen, Program Principal, Transportation, National Conference of State Legislatures; Jason Siwula, Assistant State Highway Engineer, Department of Highways, Kentucky Transportation Cabinet (KYTC); Marty Frappolli, Senior Director of Knowledge Resources, The Institutes; John Mark Hack, Commissioner, Department of Vehicle Regulation, KYTC; Ann D’Angelo, Attorney, KYTC.
LRC Staff: John Snyder, Brandon White, Dana Fugazzi, and Christina Williams.
Autonomous Vehicle Issues
National Overview of State Action
Anne Teigen, Transportation Program Principal, National Conference of State Legislatures (NCSL), gave an overview of state actions concerning autonomous vehicles (AVs). Nineteen states and the District of Columbia have enacted autonomous vehicle legislation. Executive orders concerning AVs have been issued in Arizona, Massachusetts, Washington, and Wisconsin. Companies across the United States are testing AVs, including in states where the legislatures have not passed AV laws.
Nevada was the first state to authorize the testing and operation of AVs in 2011. The Nevada Center for Advanced Mobility initiative was established in 2016 involving the Governor’s Office of Economic Development, the Nevada Department of Transportation, the Department of Motor Vehicles, and the University of Nevada-Las Vegas. In May, Nevada announced a partnership to create a statewide vehicle-to-vehicle network. In October 2016, the first autonomous vehicle restricted license was issued. Nevada requires a company to submit a permit application, a $5 million bond, and proof that its self-driving vehicles have completed 10,000 miles of testing before they can be allowed on public state roads. During the tests, the vehicles must be supervised by people sitting in the driver and passenger seats. Approved vehicles are given a red license plate to denote that they are autonomous. In May 2016, Otto, a subsidiary of Uber, conducted a media event where a truck was driving on I-80 that did not have proper permitting, and the driver was in the back of the cab. At the time, Nevada did not have any penalties for violators. In 2017, new legislation provided for a penalty up to $2,500 per violation. The 2017 legislation also develops laws relating to companies such as Lyft and Uber.
Ms. Teigen stated California passed autonomous vehicle legislation in 2012. The California DMV issued draft regulations in 2015 that would have required a licensed driver behind the wheel at all times in an AV. These draft regulations received a lot of backlash from the industry who argued that the regulations were onerous and they created roadblocks to innovation. In 2016, the legislature passed a bill authorizing the Contra Costa Transportation Authority to test the first fully autonomous vehicle not equipped with a steering wheel, brake pedal, accelerator, or operator, on a California road. This was the next step in integrating these AVs after they had been tested on private roads. In September 2016, the DMV issued a revised draft of regulations, and subsequently in March 2017 the state released more proposed draft regulations relating to driverless testing and deployment regulations that were loosened in the 2015 regulations.
In 2016, Michigan passed a 4 bill package. One bill eases testing restrictions, providing that a researcher does not have to be present inside an autonomous test vehicle. However, the researcher would promptly have to take control of the vehicle remotely if necessary, or the vehicle would have to slow down or stop on its own. The second bill allows AVs to be driven on roads in the state when they are sold to the public. The third bill allows for truck platooning, which involves commercial trucks traveling closely together at electronically coordinated speeds. The fourth bill finalized the American Center for Mobility.
Ms. Teigen stated that, although Nevada, Michigan, California and Florida were at the AV legislation forefront, a number of states are now taking legislative action. Many are passing laws addressing the testing process of AVs within each state, whether on public roads or in limited facilities. At least seven states and the Washington D.C. have developed laws that address testing of AVs. States are defining a number of significant terms such as the definition of autonomous vehicles, automated driving system, and operator, in order to provide clarity. In most states that have enacted AV legislation, “operator” is defined as the person who causes the automated driving system to engage, whether or not the person is physically in the vehicle.
The industry has expressed the need for insurance to cover testing of autonomous vehicles. The typical insurance minimum requirement is $5,000,000 for testing in California, Florida, Nevada, and New York. Michigan requires a minimum $10,000,000 coverage. Some states make it clear that a manufacturer is not liable for damages resulting from a third party’s modification of a vehicle to make it autonomous.
Along with the development of AVs, automated technology is being addressed relating to freight transportation. This technology can allow trucks to travel in a platoon with multiple trucks traveling close together at coordinated speeds. Most states currently have laws that require a certain following distance for heavy vehicles. At least eight states have passed legislation to modify those laws to allow for truck platooning.
In 2017, 33 states considered AV legislation; 96 bills were considered. Since 2012, 41 states have considered AV legislation. NCSL now includes AVs in its 50 state bill tracking database. The governors of four states (Arizona, Massachusetts, Washington, and Wisconsin) that have not passed AV legislation have issued executive orders concerning the study, testing, and operation of AVs.
In September 2016, the National Highway Traffic Safety Administration (NHTSA) released a Federal Automated Vehicle Policy (FAVP). The policy is the first edition, and the administration indicated they expected the policy to be updated frequently. The FAVP provides a roadmap for states, the federal government, and manufacturers. The policy provides a section which attempts to define state and federal roles in AV policy. The federal roles specified by the policy include continued development and enforcement of federal motor vehicle safety standards, federal determination for the need for vehicle recalls, and regulations regarding vehicle performance. The FAVP includes a model state policy which enumerates topics where states traditionally have regulatory authority with conventional motor vehicles, such as driver training and education, traffic laws and regulations, vehicle registration and driver licensing, insurance and liability, law enforcement and emergency response, and safety inspections.
One area of discussion surrounding AVs on various levels is preemption and determining the appropriate roles for federal, state, and local governments. Some states preempt localities from regulating AVs and their boundaries. Some entities have argued that regulations should be focused at the federal level. The FAVP policy recognizes that there are a number of areas where the authority for regulation is vested strictly within the state and local levels.
At the 2017 Legislative Summit, there will be a session on the legal landscape of autonomous vehicles. Bryant Walker Smith, a nationally recognized expert on AVs will share his insight on the existing legal framework, legislative trends, and how laws may need to change to address this technology. Legislative and industry representatives will share their perceptions on the fast-moving technological climate and requisite policy changes needed.
KYTC’s AVs Working Group
Jason Siwula, Assistant State Highway Engineer, Department of Highways, Kentucky Transportation Cabinet, testified on opportunities and challenges with AV implementation at the state level. The term self-driving vehicle is used frequently in conjunction with autonomous vehicles. He explained the 5 levels of automation for an AV. Level zero is no automation meaning the driver is in control of the vehicle at all times. A level one automation is when a vehicle can assist the driver with some elements of driving such as adaptive cruise control. A level two is partial automation which consists of a vehicle conducting some elements of driving such as speed and lane position while the driver continues to be engaged. The level three automation is conditional automation where a vehicle can perform all aspects of driving in limited situations and can inform the driver when he/she must take control. A level four is high automation where a vehicle performs all aspects of driving under certain conditions. A level five automation is full automation where a vehicle performs all aspects of driving under any conditions and can operate with or without a driver or occupants.
Mr. Siwula stated there are numerous benefits that can be realized from the adoption of AVs including crash reductions, route planning, increased capacity of current infrastructure and reduced congestions, improved transportation access for underserved populations such as the elderly and disabled, reduced freight transport costs through related technologies such as truck platooning which can improve fuel efficiency by 5-10 percent, and increased productivity by allowing other activities to be performed instead of driving. Mr. Siwula stated according to NHTSA human factors contribute to 94 percent of crashes on the U.S. highways. If Kentucky could reduce crashes by utilizing AVs by 90 percent, there would be 753 fewer lives lost and $16 billion less in vehicle accident costs annually.
Kentucky serves as a major junction for the nation’s freight network. U.S. freight volumes are expected to increase 40 percent by 2040. Businesses and citizens are taking notice of Kentucky’s freight and logistics leadership. It is possible that AVs will be a big portion of the future of the freight industry. In April 2017, the Lane Report recognized Amazon’s investment in Kentucky by stating that Amazon fulfills Kentucky’s goal to be the world’s logistics leader.
Mr. Siwula stated there are policy issues surrounding the use of AVs. There are states and transportation agencies that largely regulate drivers, such as driver licensing, driver training, and conditions of operation. There is also vehicle manufacturing type of regulation which is handled by the U.S. Department of Transportation, NHTSA, and the Federal Motor Carrier Safety Administration. The Federal Highway administration handles roadway regulations and working with states to create policy regarding roadways. Key concerns about AVs are striping and signage and how the vehicle will interpret them. Cybersecurity and data are also policy issues.
Mr. Siwula reiterated Ms. Teigen’s comments regarding the FAVP, and that the states will generally continue regulating the aspects of vehicle transportation that they currently regulate. The FAVP recommends that states develop clear processes and regulations for testing AVs, resolve ambiguities or problems related to liability and insurance issues, address crash investigation procedures and safety inspections, establish a system to identify AVs through registration and titling requirements, and direct law enforcement to limit driver distractions in vehicles that are not fully automated.
Other state autonomous vehicle legislation topics have included a definition for autonomous vehicles, licensing responsibilities, authorized training, testing facilities, weather restrictions, use restrictions (both testing and in general), crash and malfunction reporting, event recording such as the use of a black box type of device, requirements for operators, and liability insurance requirements. KYTC’s Autonomous Vehicle Working Group reviewed Kentucky’s legislation and regulations. This review was undertaken by KYTC in partnership with the Kentucky Transportation Center and focused on the primary areas of driver definitions and requirements, equipment and vehicle regulations, licensing definitions and requirements, operational limitations, and safety equipment. A potential topic for consideration is license oversight.
Items under consideration by KYTC include defining autonomous vehicle, defining operator in the context of AVs, how to specifically enable AV testing in statute, driver licensing and registration issues, driver behaviors, and law enforcement issues. Mr. Siwula stated the cabinet plans to continue to gather information and learn from other states through the process of legislating the use of autonomous vehicles. KYTC plans to reach out to other Kentucky industries and partners to provide information to the General Assembly.
Insurance Considerations and Long Term Effects
Marty Frappolli, Senior Director of Knowledge Resources, The Institutes, The Griffith Foundation, testified about insurance considerations relating to autonomous vehicles. Mr. Frappolli stated Elon Musk of Tesla Motors is quoted as saying “governments may outlaw driving cars because it’s too dangerous. You can’t have a person driving a two-ton death machine.” Robert Melville, Chief Designer at McLaren Automotive, also anticipates a future where human operators of vehicles are outlawed at the very least in urban areas. In contrast, Warren Buffett is still investing in traditional models of car distribution and sales. The majority of AVs and the future of vehicles in general is still guesswork. He presented a four stage level of automation, noting that the 0-5 scale used by Mr. Siwula was perfectly valid, just calibrated differently. The high end of both scales is a fully autonomous vehicle.
Mr. Frappolli stated that most traditional car manufacturers are incrementally adding semi-autonomous features to vehicles such as a self-parking car, adaptive cruise control, and lane centering. In 2012, Google was also incrementally adding self-driving features to vehicles and testing them. The test drivers for these vehicles promised to stay engaged, but it was discovered that no matter the promise, some of the drivers did not stay engaged. He added that studies have shown that when you think the vehicle is in control, your off-road glances increase by 26 percent and you tend to stop paying attention when you do not have to. When Google recognized that people who promised to stay engaged were not, it realized this was not the way to introduce AVs, and instead halted adding autonomous features incrementally and made production of AVs fully autonomous.
Mr. Frappolli gave a brief overview of Zipcar, which is a rental, pay as you need it type of vehicle. Zipcar requires a low monthly membership fee, and then an hourly fee when you need the vehicle. The concept of Zipcar has become useful for people who reside in big cities or cannot afford to own, garage, fuel, insure, or maintain a vehicle, it is simply a car when you need it. There are also car sharing companies that are government sponsored such as Blueindy which is a service that involves electric cars that citizens pay for them when you need them, pick up the vehicle and drop it off at the charging station. As the move towards AVs occurs, companies such as Zipcar, Blueindy, Uber, and Lyft may make modern vehicles “ownerless” meaning more citizens will choose these types of transportation rather than owning their own vehicle. The Institutes uses the phrase “streaming transportation services” to describe the above modes of transportation, much like there are streaming video and music services.
Mr. Frappolli stated if AVs become the future, there are several entities that will be affected, such as police, government units relying on local taxes, car makers and insurers, car repair shops, parking garages, lawyers, home builders and remodelers, urban planners, highway engineers, doctors, hospitals, oil companies, coal companies, the electric grid, the economy, and even criminals. One thing that will be significantly impacted is the $6.2 bill annual revenue that is collected in traffic fines. If a human operator of a vehicle is removed, it is hopeful that human error will also be removed therefore violations of traffic laws will become nearly extinct. The question is being raised as to how municipalities and police departments will replace that lost revenue as well as what will happen to highway patrol officers. Car insurance will also be greatly affected due to the use of autonomous vehicles. Car insurance is fundamentally protection against human error. In the future, liability will shift from vehicle operators to manufacturers of the vehicle. The frequency of automobile accidents will also be significantly reduced. Parking will be greatly affected by the use of ownerless vehicles. If the reduction of cars is utilized due to these types of services, it is estimated that 6 billion square meters of parking space can be reclaimed by 2050. Medical care should also change dramatically as automobile accidents are the number 2 cause of lethal accidents in the United States. Mr. Frappolli stated that it should drop to number 9 cause of lethal accidents by 2050, according to some experts. Car accidents should become as rare as subway accidents. Automobile accidents cost over $200 billion per year, therefore billions of dollars could be saved as well as the health and productivity which could otherwise be injured in automobile accidents.
Mr. Frappolli stated there are regulatory concerns with the use of autonomous vehicles, such as hacked cars which would enable getaway cars with no driver and the use of hacked driverless cars as weapons. There is also a regulatory concern of distracted operators due to incrementally adding autonomous features where some drivers may not think they are driving as they are in higher level vehicles, but they actually are. Therefore, the drivers become distracted.
Mr. Frappolli stated if neighboring states have different laws about autonomous cars, and one state requires a driver for a fully AV, and a neighboring state does not, that is going to impede travel from state to state. Within the realm of insurance, the possibility of a traditional insurance model will be in place and a drop in claims should occur with the use of AVs. But over time, a drop in the premium base should occur resulting in insurer solvency issues. Urban planning will also be affected as striping of roads, as well as signage will still be needed, but on a larger scale if congestion is reduced, and accidents are reduced and personal auto is safer, easier, and cheaper, Congress will need to take a look at rail projects that it is funding for transport of people and reevaluate that. Urban planners have to understand if they are thinking in terms of today’s technology and capabilities, they may be planning something that could be obsolete in a few years. State, local, federal, and across state governments will ideally find standards for road marking, signal signs and widths of lanes that can facilitate travel across regions. He added if traffic congestion is reduced due to the reduction in human error, it could mean a revival of inner cities where congestion is an issue. He added that could also lead to a tremendous build-out of suburbs because commute time could become useful and productive.
Mr. Frappolli reiterated the trend from moving to ownership models of vehicles to a streaming model of vehicle usage. Much like Polaroid and Kodak were when digital photography was introduced, that many entrenched companies and even industries will be threatened by autonomous vehicles. However, many new opportunities will be created. Streaming transportation is also a concept that could become more of a reality in the future.
In response to a question asked by Representative Fleming concerning how the gas tax will be affected if AVs and streaming transportation become more of a reality, Ms. Teigen stated that is another element to the advancement of both concepts that still needs to be studied. All the legislation that she has studied gas tax issues have not been in the forefront. Tennessee considered but did not pass a per mile gas tax structure.
In response to a question asked by Senator Embry concerning how an autonomous vehicle would respond to unpredictable circumstances such as missing a deer or black ice, Ms. Teigen stated the concerns on how the AVs will handle those circumstances are certainly valid and those questions are still unanswered.
Representative Johnson stated in his opinion a better way to approach the roll out of AVs would be to go straight to level 5 vehicles, instead of incrementally introducing autonomous features. In response to a question asked by Representative Johnson concerning the idea or testing of autonomous motorcycles, Ms. Teigen stated she has not seen the testing of autonomous motorcycles.
Senator Higdon stated that an average vehicle traveling 12,000 miles a year at 30 miles per gallon, with a gas tax at 26 cents per gallon, yields $104 per year and less than a penny a mile. If one looks electric vehicles, it would be easy to put a user fee on them and be able to calculate what that would be.
In response to a question asked by Representative Gentry concerning air travel as autonomous, Mr. Frappolli stated drone services are becoming more prevalent, so he speculates that it is possible for planes to one day become autonomous as well. Ms. Teigen stated there has not been much data concerning autonomous air travel currently.
The committee reviewed Administrative Regulations 601 KAR 1:018 and 601 KAR 1:113 and neither were found deficient and no objections were raised.
There being no further business, Co-Chair Rader adjourned the meeting at 11:42 A.M.