§ 1116. TAXI MEDALLION TRANSFER PROGRAM.

(a) Surrender for Consideration.

(1) The following natural persons are eligible to surrender their Medallions to the SFMTA for consideration in accordance with this Section:

(A) Any Medallion Holder, except a Ramp Taxi Medallion Holder or a Single Operator Part-time Taxi Medallion Holder, who has demonstrated to the satisfaction of the SFMTA that he or she has a bona fide disability that permanently prevents him or her from satisfying the Full-Time Driving requirement, whether or not he or she is subject to the Full-Time Driving Requirement, or

(B) Any Post-K Medallion Holder who has attained the age of 60.

(2) A Medallion Holder who is subject to the Full Time Driving Requirement must demonstrate that, as of the date that the Medallion is surrendered, he or she has been a Full Time Driver for four of five consecutive calendar years. This requirement of Full Time Driving may only be satisfied by driving a Taxi or Ramp Taxi for which a permit has been issued by SFMTA. Electronic waybills completed in compliance with Section 1109(c)(5), electronic trip data, or other corroborating documentary evidence may be used to establish eligibility for surrender for consideration.

(3) No otherwise eligible Medallion Holder against whom the SFMTA has filed a Notice of Violation, Notice of Summary Suspension, or Notice of Nonrenewal prior to completion of the surrender is eligible to surrender his or her Medallion for consideration until any resultant administrative hearing, administrative appeal, or court proceeding is concluded and the Medallion Holder has served any term of suspension imposed and paid any administrative fine imposed. In the event that the Notice of Violation seeks revocation of the Medallion, the Medallion Holder is not eligible to surrender the Medallion for consideration unless and until the administrative hearing and any resultant administrative appeal or court proceeding is concluded upon a determination that the Medallion will not be revoked.

(4) This Section does not confer on a Medallion Holder a vested right, or other legal entitlement, to surrender a Medallion for consideration.

(5) The SFMTA Board of Directors may decide at any time that the Medallion Transfer Program is terminated, suspended or otherwise not operational.

(6) The SFMTA Board of Directors may decide at any time that no further surrenders by Medallion Holders eligible under this Section 1116 are permitted.

(b) Medallion Surrender Payment. As consideration for surrender of a Medallion in accordance with this Section, the SFMTA shall make a Medallion Surrender Payment in the amount of $200,000 to the Medallion Holder, when a Transferee has been identified to which the surrendered Medallion will be initially transferred and a properly executed Transfer Agreement has been received from the identified Transferee.

(c) Qualified Medallion Transferees. Upon surrender, the SFMTA may transfer the Surrendered Medallion under the Taxi Medallion Transfer Program to a Transferee who acknowledges and agrees that the Transferable Medallion is subject to the provisions of this Section. The SFMTA shall make offers of Initial Transfer to such Transferees in chronological order by the date that each complete Medallion Application was received from a qualified applicant.

(d) Retransfer.

(1) A Medallion that was newly issued by the SFMTA on or after March 28, 2010 or was subject to an Initial Transfer under the Taxi Medallion Sales Pilot Program or the Medallion Transfer Program is a Transferable Medallion, and the Transferee is eligible to Retransfer the Transferable Medallion at any time in accordance with this Section, regardless of age or disability status. The Transferee may not convey the Transferable Medallion by gift, bequest or in any manner other than by a bona fide Retransfer in accordance with this Section.

(2) In all instances in which Retransfer of a Medallion is allowed under this Section, the SFMTA may elect to purchase the Medallion from the Medallion Holder instead of allowing the Medallion Holder to Retransfer the Medallion.

(3) If the SFMTA chooses at any time to prohibit the future Retransfer of Transferable Medallions, it shall, at the request of a Medallion Holder who holds a Transferable Medallion, and upon 10 days’ notice to a Qualified Lender who has a security interest in the Transferable Medallion, purchase the Medallion at the Medallion Transfer Price paid by the Medallion Holder. At the request of a Qualified Lender who has complied with the requirements of Section 1116(l) of this Article, the SFMTA will deduct from the payment made to any Medallion Holder under this Section 1116(d)(3) an amount sufficient to satisfy any outstanding balance on a loan made by the Qualified Lender and secured by an interest in the Medallion, and shall immediately remit that amount to the Qualified Lender. Upon receipt of this amount, the Qualified Lender shall comply with Section 1116(k)(3) and release its security interest in the Medallion. Upon purchase of the Medallion under this Section 1116(d)(3), the SFMTA shall reissue the Medallion to the Medallion Holder. The reissued Medallion shall not be a Transferable Medallion, and the Medallion Holder will be subject to all the provisions of this Article, including Section 1105(a)(4), which provides that permits issued under this Article are not transferable or assignable.

(e) Fixed Medallion Transfer Price. A Surrendered Medallion may be transferred by the SFMTA, and a Transferable Medallion may be Retransferred under the supervision of the SFMTA, at a price established by the SFMTA. The initial Medallion Transfer Price shall be $250,000. The Director of Transportation may reset the Medallion Transfer Price based upon his or her determination that commercially relevant factors, including but not limited to the commercial loan terms available to Medallion applicants, the affordability of the monthly payments under such loans, and the anticipated business revenue to be generated from a Medallion, warrant resetting the Price. The Director of Transportation shall present his or her recommendation for a new Medallion Transfer Price to the SFMTA Board for approval. The Director of Transportation may adjust the Medallion Transfer Price without SFMTA Board approval no more frequently than annually in accordance with the percentage by which the Consumer Price Index for Urban Wage Earners for the San Francisco Bay Area has increased since the Medallion Transfer Price was last set or adjusted. Any changes to the Medallion Transfer Price shall be subject to the restrictions set forth in any agreement between the SFMTA and a Qualified Lender described in Section 1116(j)(3).

(f) Medallion Transfer Allocation.

(1) The Transferor shall distribute to the SFMTA the Medallion Transfer Allocation at the time of Retransfer. The Medallion Transfer Allo- cation shall be 5% of the Medallion Transfer Price.

(2) Notwithstanding Subsection (f)(1) above, the Director of Transportation is authorized to waive the Medallion Transfer Allocation from November 17, 2018 through November 16, 2021.

(g) Taxi Medallion Retransfer Procedures.

(1) Retransfer of a Medallion may only be accomplished by a transaction that complies with all requirements of this Article. Retransfer of a Medallion to a Transferee is not effective until the Retransfer is approved by the Director of Transportation.

(2) The Director of Transportation may require a Transferee to provide documentation in a form satisfactory to the SFMTA of the source of the funds used to fund the transfer of the Medallion.

(3) The Director of Transportation may establish such procedures as he or she deems appropriate to carry out the Medallion Transfer Program.

(h) Transferable Medallions Subject to all Regulations. A Medallion transferred or Retransferred pursuant to this Section remains subject to all applicable laws and regulations and may be suspended or revoked for cause.

(i) Reserved.

(j) Medallion Lender Qualification.

(1) A Transferee of a Medallion may enter into a loan agreement to finance the Initial Transfer or Retransfer of a Medallion, or to refinance such transactions, only with a Qualified Lender.

(2) A Qualified Lender must be a financial institution chartered by a state government or the federal government. The Director of Transportation may adopt rules setting forth additional requirements for designation by the SFMTA as a Qualified Lender. If the SFMTA determines that a lender has failed to meet or maintain the requirements to be a Qualified Lender, the SFMTA shall deny the application to become a Qualified Lender or suspend or revoke the lender’s current status as a Qualified Lender.

(3) All Qualified Lenders must enter into a written agreement with the SFMTA, in a form approved by the SFMTA. The agreement shall include, at a minimum, the Qualified Lender’s acknowledgement of the provisions of this Section, the Qualified Lender’s agreement to be bound by these provisions, and the SFMTA’s promise not to set the Medallion Transfer Price below the highest Medallion Transfer Price paid by a Medallion Holder to whom a Qualified Lender made a loan that is still outstanding to finance the Transfer or Retransfer of the Medallion.

(k) Security Interests.

(1) Qualified Lender’s Security Interest. Notwithstanding any other provisions herein to the contrary, a Transferee may encumber a Transferable Medallion with a security interest only pursuant to an agreement entered into with a Qualified Lender to finance the Initial Transfer or Retransfer of the Medallion, or to refinance such a transaction.

(2) Filing Security Interests. A Qualified Lender wishing to evidence a security interest in a Transferable Medallion shall file a notice of the security interest with the SFMTA in a form approved by the SFMTA within ten business days of closing the relevant loan transaction, and shall provide to the SFMTA a copy of the promissory note, loan agreement, security agreement, any other underlying contracts or documents memorializing the terms and conditions of the debt that is secured by the Transferable Medallion, and any documents memorializing the perfection of the security interest. The SFMTA will not recognize any security interest in a Transferable Medallion that is not filed and reported in compliance with this rule.

(3) Release of Secured Interest. Upon repayment of the loan secured by an interest in a Transferable Medallion, the Qualified Lender must file notice of release of the secured interest within five business days of the release with the SFMTA along with any underlying contracts or documents memorializing the terms and conditions of the release.

(l) Foreclosure and Retransfer of Transferable Medallions.

(1) Foreclosure. If the Transferee defaults under the agreement with the Qualified Lender beyond any applicable notice and cure period, notwithstanding any other provisions herein to the contrary, the Qualified Lender may foreclose upon its security interest and possess the foreclosed, Transferable Medallion as an owner of the Transferable Medallion with full right, title, and interest thereto. If the Qualified Lender intends to foreclose on the security interest, the qualified Lender shall notify the SFMTA without delay once the Qualified Lender determines the date on which it intends to foreclose. The notice shall include the name of the Medallion Holder, the intended date of foreclosure, and the contact information for the representative of the Qualified Lender to whom inquiries may be made.

(2) Retransfer. Provided that the Qualified Lender has provided notice to the SFMTA under Section 1116(l)(1), upon foreclosure in accordance with applicable law and the terms of the security agreement between the Qualified Lender and the Medallion Holder, the Qualified Lender may Retransfer the Transferable Medallion pursuant to the provisions of this Section to the Transferee identified by the SFMTA at the Medallion Transfer Price. The proceeds of such Retransfer sale shall be distributed first to the Qualified Lender to satisfy, to the extent possible, the Medallion Holder’s debt to the Qualified Lender as determined by reference to the unpaid balance under the loan agreement between the Medallion Holder and the Qualified Lender. Any remaining proceeds shall be distributed to the former Medallion Holder(s) or the former Medallion Holder’s designees.

(3) Continued Operation After Foreclosure. Upon foreclosure and until Retransfer of the Transferable Medallion, the Qualified Lender may operate the Transferable Medallion in accordance with this Article 1100 or enter into an agreement with the Participating Color Scheme with which the Medallion is affiliated to continue to operate the Medallion.

(m) Expiration and Retransfer of a Transferable Medallion upon Revocation of the Medallion, Death of Medallion Holder, Severance of Joint Tenancy, or Bankruptcy, Dissolution or Termination of Business Entity Holding a Medallion.

(1) Expiration of the Transferable Medallion. A Transferable Medallion shall expire upon the death of Medallion Holder, severance of joint tenancy, or bankruptcy, dissolution or termination of the Business Entity holding a Medallion, or upon revocation of the Medallion, and the SFMTA shall repossess the expired Medallion or, if the Transferable Medallion cannot be repossessed, the SFMTA shall issue a temporary Medallion to replace the Transferable Medallion until the SFMTA is able to repossess it.

(2) Retransfer. Upon revocation of the Medallion, death of Medallion Holder, severance of joint tenancy, or bankruptcy, dissolution or termination of the Business Entity holding a Medallion, the SFMTA may proceed to Retransfer the Medallion to the next qualified applicant in accordance with the procedures set forth in this Section, and any such Retransfer shall be subject to the lien of the Qualified Lender who has complied with Section 1116(k). The proceeds of any Retransfer of a Transferable Medallion that has expired due to revocation of the Medallion, death of Medallion Holder, severance of joint tenancy, or bankruptcy, dissolution or termination of the Business Entity holding a Medallion, shall be distributed first to the Qualified Lender, if any, to satisfy, to the extent possible, the Medallion Holder’s debt to the Qualified Lender as determined by reference to the unpaid balance under the loan agreement between the Medallion Holder and the Qualified Lender. The remaining proceeds shall be distributed to the former Medallion Holder(s) or the Medallion Holder’s designees.

(3) Other Disposition of the Medallion. If the SFMTA elects not to Retransfer the Transferable Medallion, the SFMTA must nevertheless satisfy any outstanding balance on a loan secured by a Qualified Lender, and must pay to the designees of a deceased Medallion Holder the equity accrued in the Transferable Medallion. Such equity shall consist of the current Medallion Transfer Price, minus the outstanding balance on any loan made by a Qualified Lender who has complied with Section 1116(k) to finance or refinance the Transfer or Retransfer of the Medallion.

(4) Continued Operation After Revocation of Medallion, Death of Medallion Holder, Severance of Joint Tenancy, or Bankruptcy, Dissolution or Termination of Business Entity Holding a Medallion. Upon revocation of Medallion, death of Medallion Holder, severance of joint tenancy, or bankruptcy, dissolution or termination of Business Entity holding a Medallion, and until the Transferable Medallion is distributed to a new Medallion Holder, the SFMTA may authorize the holder of the revoked Medallion or designee of the deceased or former Medallion Holder to enter into an agreement with the Participating Color Scheme with which the Medallion is affiliated to continue to operate the Medallion until such time as the Medallion can be Retransferred in accordance with this Section 1116.

(n) Participating Color Schemes. Any Color Scheme Permit Holder who wishes to act as a Participating Color Scheme through affiliation with Transferable Medallions must enter into a written agreement with the SFMTA. The agreement shall include, but need not be limited to, the agreement of the Color Scheme Permit Holder to allow any Transferable Medallion transferred under this Section to affiliate with the Color Scheme in accordance with all applicable rules and regulations, and to operate any such affiliated, Transferable Medallion during the period commencing on the death of the Medallion Holder, revocation of the Medallion, foreclosure upon the Medallion, or severance of joint tenancy, bankruptcy, dissolution, or termination of Business Entity holding the Medallion and ending on the Retransfer or other disposition of the Medallion by the SFMTA. During such periods of operation, the Color Scheme shall make periodic payments to the Qualified Lender, holder of the revoked Medallion, designee of a deceased Medallion Holder, or designee of a former Medallion Holder in the case of severance of joint tenancy, bankruptcy, dissolution, or termination of Business Entity holding a Medallion for the right to operate the Medallion in accordance with the agreement between the designee of a deceased Medallion Holder or designee of a former Medallion Holder in the case of severance of joint tenancy, bankruptcy, dissolution, or termination of Business Entity holding a Medallion and the Participating Color Scheme.

(SFMTA Bd. Res. No. 09-077, 5/19/2009; SFMTA Bd. Res. No. 09-183, 10/20/2009; SFMTA Bd. Res. No. 11-017, 2/1/2011; SFMTA Bd. Res. No. , Ad. 12/6/2011, Eff. 1/6/2012; SFMTA Bd. Res. No. , Ad. 8/21/2012, Eff. 9/21/2012; SFMTA Bd. Res. No. , Ad. 11/20/2012, Eff. 12/21/2012; SFMTA Bd. Res. No. , Ad. 2/19/2013, Eff. 3/22/2013; SFMTA Bd. Res. No. , Ad. 4/16/2013, Eff. 5/17/2013; SFMTA Bd. Res. No. , Ad. 6/18/2013, Eff.7/19/2013; SFMTA Bd. Res. No. , Ad. 12/2/2014, Eff. 1/2/2015; SFMTA Bd. Res. No. , Ad. 3/3/2015, Eff. 4/2/2015; SFMTA Bd. Res. No. , Ad. 1/3/2017, Eff. 2/3/2017; SFMTA Bd. Res. No. , Ad. 4/4/2017, Eff. 5/5/2017; SFMTA Bd. Res. No. , Ad. 10/17/2017, Eff. 11/17/2017; SFMTA Bd. Res. No. , Ad. 10/16/2018, Eff. 11/16/2018)