BILL ANALYSIS
AB 2572
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Date of Hearing: April 19, 2010
ASSEMBLY COMMITTEE ON TRANSPORTATION
Bonnie Lowenthal, Chair
AB 2572 (Bradford) - As Introduced: February 19, 2010
SUBJECT : Charter-party carriers of passengers
SUMMARY : Modifies provisions related to charter-party carriers
of passengers. Specifically, this bill:
1)Expands the definition of a "charter-party carrier of
passengers" (charter-party carrier) to include any person, or
entity engaged in providing either a hired driver or a rented
motor vehicle operated by a hired driver.
2)Deletes provisions limiting the term of a charter-party
carrier operating permit or certificate to three years,
thereby making the permits or certificates valid indefinitely;
amends related provisions accordingly, including the
associated fee structure that increases new permit fees from
$500 to $700.
3)Authorizes the California Public Utilities Commission (CPUC)
to cancel, revoke, or suspend any charter-party carrier
operating permit or certificate for failure of a permit or
certificate holder, or any of its employees, to follow any
order, decision, rule, regulation, direction, demand,
ordinance, or other requirement established by the governing
body of an airport, including solicitation practices.
4)Deletes a provision that restricts a police officer from
impounding a vehicle used by a charter-party carrier who
operates in violation of the law if the person is within 100
feet of a public airport or within two miles of the
international border between the United States and Mexico.
5)Requires the return of an impounded vehicle to the owner after
all impoundment fees are paid when the vehicle is seized due
to a violation of a person other than the owner of the
vehicle.
EXISTING LAW :
1)Prohibits a charter-party carrier from engaging in
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transportation services subject to regulation by CPUC without
obtaining a specified permit or certificate from CPUC.
2)Limits the term for a charter-party carrier permit or
certificate to three years.
3)Sets forth a rate schedule for charter-party carrier permit or
certificate applications depending on the class of vehicle
being operated, as follows:
a) Class A certificates: $1,500 new or $500 renewed;
b) Class B certificates: $500 for both new and renewed;
c) Class C certificates: $500 for both new and renewed;
d) Permits: $500 for both new and renewed.
4)Requires CPUC to deny the application for a new or renewed
permit or certificate upon a written recommendation from the
California Highway Patrol (CHP) that the application should be
denied for specified reasons, and requires CPUC to provide an
appeal process.
5)Pursuant to the California Constitution, establishes private
corporations and persons that own, operate, control, or manage
a line, plant, or system for the transportation of people or
property, and common carriers, as public utilities that are
subject to control by the Legislature; allows CPUC to fix
rates and establish rules for the transportation of passengers
and property by transportation companies.
FISCAL EFFECT : Unknown
COMMENTS : According to the author, the purpose of this bill is
to increase public safety and consumer protections by providing
CPUC greater authority to enforce charter-party carrier laws.
In addition, Avis, a well-known rental car company, would like
to implement a program in California where it hires drivers to
drive Avis cars as a limousine-for-hire service. Avis has
successfully tested this business model on the East Coast and
would like to expand that service to California. The author
would like to ensure the state's rigorous charter-party carrier
laws capture this new business model by expanding the definition
of charter-party carrier.
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Charter-party carriers for-hire drivers : Charter-party carriers
are rented as an entire vehicle (vehicle and driver) and
transport passengers on a prearranged basis. Some examples
include limousines and chartered buses for tours or events.
Currently, for the chartered buses and limousines, the law
prescribes specific requirements for vehicle maintenance and
safety standards, driver screening and training, controlled
substance and alcohol testing, workers' compensation insurance,
and fitness and financial responsibility. However, the law is
ambiguous wherein a hired driver operates a rented vehicle under
separate travel agreements. This bill intends to clarify this
situation.
Charter-party carrier three-year operating permit : Current law
requires applicants for a charter-party carrier permit or
certificate to establish reasonable fitness and financial
responsibility. Current law also prescribes specific
requirements for vehicle maintenance and safety standards,
driver screening and training, controlled substance and alcohol
testing, and workers' compensation insurance. The law also
requires a carrier to renew their operating permit every three
years.
This bill would delete the requirement to renew a permit every
three years. Writing in support of deleting that requirement,
the bill's sponsor, the Greater California Livery Association
mentions that, "the elimination of the three-year renewal does
not eliminate an opportunity for a public entity, such as an
airport, to submit concerns or object to a 'bad' charter-party
carrier having their license renewed with CPUC. Any public
entity or member of the public can submit evidence and file a
complaint with CPUC against a charter-party carrier at any time.
The three-year renewal has no connection to complaints." The
CPUC also contends that the current renewal process does not
provide greater consumer protection. The CPUC audits the
carrier's compliance when conducting investigations triggered by
consumer complaints, industry complaints, law enforcement
complaints, notice of lapsed or cancelled insurance policies, or
any other means of notice to CPUC of a carrier's non-compliance
with the law.
However, writing in opposition to the bill's proposed repeal of
the three-year renewal process, the California Airports Council
(Airports Council) believes that repealing the three-year
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renewal process would compromise consumer protections and public
safety. By repealing this section, once a license is granted,
the Airports Council believes it will remain valid indefinitely
with no further CPUC review. The Airports Council contends that
the law "delineates a series of factors CPUC must review and
examine prior to licensure or renewal of a charter party
carrier, including financial condition, adherence to hours of
service regulations, preventative maintenance of fleet vehicles,
driver record reviews, safety and training of drivers, and
vehicle safety. AB 2572 would result in none of these factors
ever being reviewed again by CPUC once the original license is
granted. In the ongoing air travel security environment that
airports are required by the federal government to maintain,
eliminating periodic state oversight of the charter-party
carrier industry jeopardizes the safety and security of the
flying public. We strongly oppose this provision and urge
retention of current law, at a minimum."
Complaint process : The Airports Council also voiced concern
that once they file a complaint with CPUC, that they don't know
whether the complaint was investigated and the results of the
investigation. According to CPUC, the current process for
receiving complaints from airport personnel and following up
with the complainant is not a formal process. CPUC staff
believes this process can be more formal by requiring that
airport personnel file informal complaints in the same manner as
members of the public. This process requires the completion of a
complaint form that is then entered into the Transportation
Informal Complaint Tracking System. These complaints can be
tracked by CPUC staff and airports will receive feedback on the
resolution of the complaint when the investigation is completed.
Related bills : AB 1310 (Leno) Chapter 701, Statutes of 2007,
streamlined CPUC's regulation and investigation procedures of
charter-party carriers.
AB 2985 (Duvall, 2008), a similar bill, would have eliminated
the three-year permit and certificate renewal process and
proposed to eliminate or reduce a number of other requirements.
The bill passed out of the Assembly Utilities and Commerce (U &
C) Committee on a unanimous vote (13-0) but was later amended
and held in the Assembly Rules Committee.
Transportation Committee amendments : This bill was heard in the
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U & C Committee on April 12, 2010, and passed out on a unanimous
vote of 15-0. The U & C Committee approved the bill on
condition that the amendments would be taken in the Assembly
Transportation Committee to:
1)Retain the three-year renewal requirement of licensed charter
party carriers.
2)Require when the hired driver is utilizing a rented vehicle to
provide chauffeured transportation, that the hired driver
provide insurance coverage and possess a current and
appropriate license to drive in the State of California.
3)Add intent language to streamline the complaint resolution
process.
The author intends to take these amendments as author's
amendments in the Assembly Transportation Committee today.
Although the amendments remove the concerns of the parties
opposed to this bill, it may raise the concerns of others, such
as Avis, as the for-hire drivers using the Avis limousines would
be required to purchase liability insurance.
REGISTERED SUPPORT / OPPOSITION :
Support
The Greater California Livery Association (sponsor)
California Bus Association
Opposition
California Airports Council
San Francisco International Airport (SFO)
Analysis Prepared by : Ed Imai / TRANS. / (916) 319-2093