BILL ANALYSIS 1 1 SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE ALEX PADILLA, CHAIR AB 2572 - Bradford Hearing Date: June 15, 2010 A As Amended: May 5, 2010 FISCAL B 2 5 7 2 DESCRIPTION Current law authorizes the California Public Utilities Commission (CPUC) to regulate charter-party carriers of passengers, defined to mean persons engaged in the transportation of persons by motor vehicle for compensation on a prearranged basis over any public highway in California. This bill expands the definition of charter-party carriers subject to CPUC regulation to include any person or entity engaged in the provision of a hired driver service when a rented motor vehicle is operated by the hired driver and exempts these hired driver charter-party carriers from specified requirements applicable to entities that own charter-party carrier vehicles. Current law requires each initial and renewal applicant for a charter-party carrier certificate or permit to pay specified fees. This bill increases the cost of new permits and Class B and C certificates from $500 to $1,000 and decreases the cost of all renewal permits and certificates from $500 to $1,000. Current law authorizes the CPUC to cancel, revoke, or suspend a permit or certificate issued to a charter-party carrier for failure of a permit or certificate holder or its employees to follow specified laws and CPUC orders and regulations, pay required fees, maintain its vehicle in a safe operating condition, and other specified reasons. This bill would authorize the CPUC to cancel, revoke, or suspend any permit or certificate issued to a charter-party carrier if the permit or certificate holder failed to follow any order, decision, rule, regulation, direction, demand, ordinance, or other requirement established by the governing board of an airport, including solicitation practices. This bill would make inapplicable as a reason to cancel, revoke, or suspend a permit or certificate held by a charter-party carrier the requirement to maintain its vehicle in a safe operating condition in the case of a hired driver carrier. Current law authorizes a peace officer to impound a charter-party carrier vehicle being operated in violation of the law only within 100 feet of a public airport or within two miles of the international border between the United States and Mexico. This bill deletes that geographic limitation on the authority to impound a vehicle used by a charter-party carrier. Current law requires that a vehicle impounded by a local peace officer for violation of a local ordinance or resolution be returned to the owner of the vehicle without cost if the infraction or violation is not prosecuted or dismissed, the owner is not found guilty of the offense or it is determined that the owner was not aware of, nor did not consent to, the use of the vehicle for the violation. This bill 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. This bill states the intent of the Legislature to achieve all of the following: Ensure that the CPUC has access to real-time information on drivers for licensed charter-party carriers by utilizing the Department of Motor Vehicle's Employer Pull Notice Program. Have the CPUC implement procedures for an approved drug and alcohol testing provider to submit timely information on the status of licensed charter-party carriers with which they have contracted for testing of drivers. Have the CPUC create an online renewal process for charter-party carriers of passengers and a renewal process that is administratively efficient. BACKGROUND The Passenger Charter-Party Carriers' Act provides for CPUC regulation of charter-party carriers, defined as persons engaged in the transportation of persons by motor vehicle for compensation on a prearranged basis over any public highway in the state, including, for example, limousines, airport shuttles, and chartered buses. The purposes of the Act include preserving full public benefit and use of public highways, ensuring adequate and dependable transportation by carriers operating upon the highways, and promoting carrier and public safety through enforcement of safety regulations. The Act requires charter-party carriers to obtain operating authority from the CPUC through permits and certificates, requires the CPUC to investigate complaints and cancel, revoke, or suspend permits and certificates for specified violations, and regulates other terms of operation. The CPUC issues six different types of permits and certificates authorizing various kinds of services. Approximately 6,200 carriers currently hold one or more operating authorities. 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. COMMENTS 1) Hired Driver Service . According to the author and the Greater California Livery Association, the bill's sponsor, this bill closes a loophole in current law by giving CPUC authority to regulate a new transportation business model in which a rented motor vehicle is operated by a hired driver. Under that business model being employed by Avis Rent A Car and a separate company called WeDriveU, Avis refers a rental customer to WeDriveU to engage a driver to operate the Avis vehicle at the customer's direction. This bill expands the definition of charter-party carriers so that WeDriveU and similar operators would be covered by the Act. Because these operators compete with traditional charter-party carriers, this bill ensures a level playing field and protects the public by making provisions of the Act applicable. The bill also makes provisions of the Act that relate to carriers owning a vehicle inapplicable to charter-party carriers such as WeDriveU. 2) Permits and Certificates . This bill increases initial application fees for charter-party carrier permits and Class B and C certificates from $500 to $1,000 and decreases the cost of all renewal permits and certificates from $500 to $100. These changes result in fees that more closely correlate to when the CPUC incurs costs - more costs at the time of an initial application than at renewal. The bill also states legislative intent that the CPUC create a renewal process that is available online and administratively efficient. An improved renewal process will reduce administrative burdens on carriers and the CPUC and result in fewer carriers being subject to fines and penalties if they continue to operate after their authority expires because the renewal was not processed in a timely manner. 3) Impoundment . This bill expands the geographic area in which the vehicles of unlicensed carriers may be impounded from airports and near the U.S.-Mexico border to anywhere in the state and would make the vehicle owner responsible for the associated impoundment fees in order to retrieve the vehicle. Expanding the authority to impound vehicles of unlicensed carriers to anywhere in the state will enable impoundment at hotels, convention centers, and tourist locations where carriers typically operate. It also may bolster enforcement of the Act and serve as an additional deterrent to operating without proper authority. 4) Airport Regulations . While current law allows for placement of CPUC enforcement personnel at airports, it does not explicitly allow CPUC enforcement of airport regulations when patrolling at the airport. This bill provides that the CPUC may cancel, revoke, or suspend any permit or certificate issued to a charter-party carrier if the carrier fails to follow any order, decision, rule, regulation, direction, demand, ordinance, or other requirement established by the governing board of an airport, including airport restrictions on solicitation practices. In some instances, the CPUC and airports may have differing regulations, as is the case, for example, with weigh bill requirements of the CPUC and the San Francisco Airport. While this provision could lead to arbitrary or selective enforcement of different regulations by the CPUC, it should lead to overall enhanced enforcement of regulations that protect public safety and ensure a level playing field in the charter-party carrier market. 5) Double Referral . This bill has been double-referred to the Senate Transportation and Housing Committee. ASSEMBLY VOTES Assembly Utilities & Commerce (15-0) Assembly Transportation (12-0) Assembly Appropriations (14-1) Assembly Floor (62-4) POSITIONS Sponsor: Greater California Livery Association Support: Greater California Livery Association California Bus Association California Public Utilities Commission San Francisco International Airport WeDriveU, Inc. Oppose: None on file. Jackie Kinney AB 2572 Analysis Hearing Date: June 15, 2010