BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                      



           ------------------------------------------------------------ 
          |SENATE RULES COMMITTEE            |                    AB 45|
          |Office of Senate Floor Analyses   |                         |
          |1020 N Street, Suite 524          |                         |
          |(916) 651-1520         Fax: (916) |                         |
          |327-4478                          |                         |
           ------------------------------------------------------------ 
           
                                         
                                 THIRD READING


          Bill No:  AB 45
          Author:   Hill (D), et al.
          Amended:  8/24/12 in Senate
          Vote:     21

           
           SENATE ENERGY, UTIL. & COMMUNIC. COMMITTEE  : 7-1, 6/21/11
          AYES:  Padilla, Fuller, Corbett, De León, DeSaulnier, 
            Rubio, Simitian
          NOES:  Berryhill
          NO VOTE RECORDED:  Pavley, Strickland, Wright

           SENATE JUDICIARY COMMITTEE  :  4-0, 7/3/12
          AYES:  Evans, Blakeslee, Corbett, Leno
          NO VOTE RECORDED:  Harman

           SENATE APPROPRIATIONS COMMITTEE  :  7-0, 8/6/12
          AYES: Kehoe, Walters, Alquist, Dutton, Lieu, Price, 
            Steinberg

           ASSEMBLY FLOOR  :  70-0, 5/12/11 (Consent) - See last page 
            for vote


           SUBJECT  :    Charter-party carriers of passengers: alcoholic 
                    beverages:
                      open carry 

           SOURCE  :     Author


           DIGEST  :    This bill (1) repeals specified provisions of 
          the Passenger Charter-party Carriers Act (Act) related to 
                                                           CONTINUED





                                                                 AB 45
                                                                Page 
          2

          the requirements for a driver of a limousine for hire 
          operated by a charter-party carrier of passengers (carrier) 
          concerning the consumption of alcoholic beverages by 
          passengers under 21 years of age, and instead requires the 
          chartering party, as defined, to name a "designee" to be 
          present on any party bus or limousine, as specified; (2) 
          imposes various responsibilities and liabilities upon the 
          designee, driver, and carrier to prevent the consumption of 
          alcohol by persons under 21 years of age; and (3) makes 
          failure to comply with certain of its requirements a 
          misdemeanor and would make any violation of its 
          requirements by a carrier or its driver subject to civil 
          penalties imposed by the Public Utilities Commission (PUC).

           Senate Floor Amendments  of 8/24/12 add coauthors, clarify 
          the duties, liabilities and/or penalties of the designee, 
          driver, and carrier, and make other technical, clarifying 
          changes

           ANALYSIS  :    

           Existing Law  : 

          1. Article XII of the California Constitution: 

             A.    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 subject to control by the Legislature. 

             B.    Allows the PUC to fix rates and establish rules 
                for the transportation of passengers and property 
                by transportation companies. 

          2. The Public Utilities Code: 

             A.    Requires the PUC to ensure that every carrier 
                operates on a prearranged basis within the state. 

             B.    Requires the driver of any limousine for hire 
                operated by a carrier under a valid certificate or 
                permit to comply with certain requirements relating 
                to alcohol beverages, including: 

                                                           CONTINUED





                                                                 AB 45
                                                                Page 
          3


                (1)      Ascertaining whether any passenger is 
                   under the age of 21 years.

                (2)      Reading to the passenger a statement 
                   that the consumption of any alcoholic beverage 
                   in the vehicle is unlawful.

                (3)      Requiring the minor passenger to sign 
                   the statement and if minor is found to be, or 
                   to have been, consuming any alcoholic beverage 
                   during the course of the ride, the driver 
                   shall immediately terminate the contract of 
                   hire and return passenger to the point of 
                   origin. 

             C.    Subjects the carrier to specified penalties, 
                based on the number of offenses for conviction of a 
                driver, or any officer, director, agent or employee 
                of the carrier that prohibits storage of an opened 
                container of an alcoholic beverage in a motor 
                vehicle. 

          This bill, to be known as the Brett Studebaker Law, repeals 
          the requirements for a limousine driver for hire operated 
          by a carrier concerning the consumption of alcoholic 
          beverages by passengers under 21 years of age, and instead 
          enacts specified requirements and liabilities relating to 
          under-age drinking on charter party carriers, as specified. 
           This bill imposes various penalties for violations of the 
          bill's provisions, and creates two new misdemeanors.  This 
          bill:

          1. Requires the carrier to ask the chartering party, as 
             defined, to disclose to the carrier at the time the 
             service is prearranged or the contract is made and upon 
             being asked, requires the chartering party to disclose 
             whether alcoholic beverages will be served or 
             transported in the passenger compartment of the vehicle 
             during transportation and whether a member of the party 
             will be under 21 years of age.

          2. Requires the carrier if the aforementioned is true, the 
             carrier is required to notify the chartering party of 

                                                           CONTINUED





                                                                 AB 45
                                                                Page 
          4

             specified responsibilities, including the assignment of 
             a "designee" who is at least 25 years of age to be 
             present whenever persons under 21 years of age who are 
             not accompanied by a parent or legal guardian are being 
             transported.

          3. Requires the designee to make reasonable efforts to 
             ensure compliance with all laws prohibiting the 
             consumption of alcoholic beverages by persons under 21 
             years of age who are members of the party and are 
             unaccompanied by a parent or legal guardian.

          4. Requires the carrier to verify the written form has been 
             returned with the signature of the designee no later 
             than 72 hours prior to the commencement of the travel 
             date.  If the transportation service is prearranged 
             within 72 hours of the travel date, the carrier shall 
             immediately provide the written form to the chartering 
             party as a stand-alone form separate from the contract 
             of carriage, to be returned prior to the commencement of 
             transportation services with the signature of the 
             designee.

          5. Requires the carrier to inform the driver of the vehicle 
             that alcohol will be present and that there will be 
             persons under 21 years of age present during the 
             provision of transportation services, and the name of 
             the designee.

          6. Requires the driver to obtain the designee's signature 
             or initials on a written form indicating the designee's 
             acknowledgment and agreement to specified terms.

          7. Provides that if the PUC, after a hearing, finds that a 
             carrier or the driver of a carrier has violated this 
             section, the PUC shall do the following:

             A.    For a first violation, the PUC shall impose a 
                civil penalty of not more than $2,000 upon the 
                carrier, as determined appropriate by the PUC.

             B.    For a second violation, the PUC shall impose a 
                civil penalty of not more than $2,000 upon the 
                carrier or may suspend the carrier's certificate or 

                                                           CONTINUED





                                                                 AB 45
                                                                Page 
          5

                permit for not more than 30 days, or both, as 
                determined appropriate by the PUC.

             C.    For a third violation, the PUC shall revoke the 
                carrier's certificate or permit.

          8. Provides that a third or subsequent violation of Vehicle 
             Code Section 23225, relating to the storage of an opened 
             container of an alcoholic beverage, or Section 23223, 
             relating to the possession of an open container of an 
             alcoholic beverage, or a driver of any vehicle used to 
             provide transportation services on a prearranged 
             services, operating under a valid certificate or permit, 
             as specified, is a misdemeanor.

           Background
           
          Charter-party carriers are rented as an entire vehicle and 
          transport passengers on a prearranged basis.  A 
          charter-party carrier is also referred to as a party bus, 
          charter bus and limousine. 

          Charter-party carriers are regulated by the PUC pursuant to 
          the Passenger Charter-Party Carriers' Act.  Carriers 
          operate under one or more of the various types of permits 
          and certificates issued by the PUC.  There are three 
          categories of certificates (designated Class A, B, and C) 
          and three categories of permits (designated P, S, and Z).  
          The certificates and permits authorize different kinds of 
          transportation services or limit the size of the vehicle 
          that may be operated.  Approximately 5,600 carriers hold 
          one or more certificates and permits. 

           Issue  .  Limousines were not regulated by the PUC until the 
          proliferation of limousines companies in the late 1980s 
          began to lead to serious drug and alcohol abuse on 
          limousine rides by minor.  Similar to limousines, charter 
          buses are the new place for under-age teenagers to drink.  
          Some of these buses have the reputation for promoting 
          drinking parties on wheels, and there is no consistent set 
          of regulations promulgated to ensure that drivers are 
          checking the passenger's photo identification. 

           PUC enforcement authority  .  The PUC is the agency 

                                                           CONTINUED





                                                                 AB 45
                                                                Page 
          6

          responsible for licensing limousine operators by issuing 
          them a charter-party carrier permit or certificate.  
          Limousine operators and other charter-party carriers are 
          required to participate in the Department of Motor Vehicle 
          Employer Pull Notice System, which is a program for the 
          carrier-employer to monitor the driving records of its 
          drivers.  If a driver is pulled over by a California 
          Highway Patrol officer for violating the open container 
          law, that information is supposed to be given to the PUC by 
          the courts.  This information sharing allows the PUC to 
          issue administrative citations and with fines against 
          charter-party carriers for violations of the law or PUC 
          rules and regulations. 

          For instance, if a limousine driver is pulled over by a law 
          enforcement officer and is found to have passengers under 
          21 years of age drinking inside of the vehicle, the driver 
          can then be charged with an open container violation.  The 
          PUC does not have the authority to impose penalties against 
          the driver.  The carrier (i.e. company) is held responsible 
          for any violations committed by its drivers.  For a first 
          offense, the PUC may impose a civil penalty no greater than 
          $2,000 upon the carrier.  For a second offense, the PUC may 
          impose a civil penalty no greater than $2,000 upon the 
          carrier or suspend the carrier's permit for not more than 
          30 days, or both.  For a third offense, the PUC shall 
          revoke the carrier's permit.  These provisions and 
          penalties also apply to a limousine driver or a carrier 
          officer, director, agent or employee who is convicted of 
          having an open container of an alcoholic beverage in the 
          vehicle when a minor passenger is being transported. 

          According to the PUC, in recent years staff has not 
          received any notices from the courts of a violation of the 
          open container prohibition by a limousine driver or a 
          company official. 

           Close the loophole  .  This bill extends to all charter-party 
          carrier vehicles the protections against under-age drinking 
          of alcoholic beverages that currently apply only to 
          limousines.  For a first offense, the PUC may impose a 
          civil penalty no greater than $2,000 upon the carrier.  For 
          a second offense, the PUC may impose a civil penalty no 
          greater than $2,000 upon the carrier, or suspend the 

                                                           CONTINUED





                                                                 AB 45
                                                                Page 
          7

          carrier's permit for no more than 30 days, or both.  On a 
          third offense, the PUC shall revoke the carrier's permit.  
          A third or subsequent offense would subject the driver to 
          misdemeanor criminal charges which would be enforceable by 
          the appropriate law enforcement agency. 

           Statistical data  .  While there is no statistical data 
          available at this time, there is antidotal evidence that 
          may substantiate the need for greater regulatory oversight. 
           According to a news article published in the Los Angeles 
          Times in March 2011, the Los Angeles Police Department 
          formed a task force over the last year to address the 
          growing problems with party buses.  The task force has 
          received cooperation from many of the club operators who 
          turn away partiers who have engaged in excessive drinking 
          or appear under-age. 

          Additionally, PUC staff has been participating in vehicle 
          inspections, including vehicles operated as party buses, 
          with other law enforcement agencies where under-age 
          drinking or other alcohol related incidents occur.  These 
          include inspections conducted periodically by the Hollywood 
          Strike Force and surrounding areas and by the San Diego 
          Area Law Enforcement Task Force in the Pacific Beach and 
          Mission Beach areas of San Diego, where large numbers of 
          university students are attracted to the lively nightlife.  
          Any violations by a charter-party carrier that are observed 
          by the staff are dealt with subsequently by the issuance of 
          a citation or warning notice. 

           Comments
           
          According to the author's office, it took the loss of Brett 
          Studebaker, a 19-year old San Mateo resident to expose 
          loopholes in state law regarding under-age drinking in the 
          party bus industry. 

          On the evening of February 5, 2010, Brett Studebaker 
          boarded a charter bus to celebrate a friend's birthday.  
          According to the lawsuit filed by his family, the charter 
          bus dropped the passengers off at their cars at 
          approximately 2:00 a.m. after several hours of heavy 
          alcohol consumption.  Unfortunately, Brett lost his life 
          less than an hour later when he crashed his vehicle into a 

                                                           CONTINUED





                                                                 AB 45
                                                                Page 
          8

          sound wall and another vehicle on Highway 101 near San 
          Mateo.  It was later determined by officials that Brett's 
          blood alcohol level was more than three times the legal 
          limit for an adult of drinking age.

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes   
          Local:  Yes

          According to the Senate Appropriations Committee:

             Minor, absorbable costs to the PUC associated with the 
             revised provisions of the Act.

             Potential ongoing minor court costs for misdemeanor 
             filings, likely less than $25,000 (General Fund) for 50 
             new misdemeanor filings per year.

             While the impact of this bill independently is likely 
             to be minor, the cumulative effect of all new 
             misdemeanors could create General Fund cost pressure on 
             capital outlay, staffing, programming, the courts, and 
             other resources in the context of recently enacted 2011 
             Public Safety Realignment.

           SUPPORT  :   (Verified  8/24/12)

          California Bus Association
          California Narcotic Officers' Association 
          California Police Chiefs Association
          California Public Utilities Commission
          Crime Victims United of California
          EF International Language Schools
          Greater California Livery Association
          Los Angeles County Sheriff's Department 
          Mothers Against Drunk Driving
          National Council on Alcoholism and Drug Dependence - Orange 
          County
          San Mateo Police Department
          State Public Affairs Committee of the Junior League of 
          California


           ASSEMBLY FLOOR  :  70-0, 5/12/11
          AYES:  Achadjian, Allen, Ammiano, Atkins, Beall, Bill 

                                                           CONTINUED





                                                                 AB 45
                                                                Page 
          9

            Berryhill, Block, Blumenfield, Bonilla, Bradford, 
            Brownley, Buchanan, Butler, Charles Calderon, Campos, 
            Carter, Chesbro, Cook, Davis, Dickinson, Donnelly, Eng, 
            Feuer, Fletcher, Fong, Fuentes, Furutani, Beth Gaines, 
            Galgiani, Gatto, Gordon, Grove, Hagman, Halderman, Hall, 
            Harkey, Hayashi, Hill, Huber, Hueso, Huffman, Jeffries, 
            Jones, Knight, Lara, Logue, Ma, Mansoor, Mendoza, Miller, 
            Monning, Morrell, Nestande, Nielsen, Norby, Olsen, Pan, 
            Perea, V. Manuel Pérez, Silva, Skinner, Smyth, Solorio, 
            Swanson, Valadao, Wagner, Wieckowski, Williams, Yamada, 
            John A. Pérez
          NO VOTE RECORDED:  Alejo, Cedillo, Conway, Garrick, Gorell, 
            Roger Hernández, Bonnie Lowenthal, Mitchell, Portantino, 
            Torres


          RM:dkd  8/27/12   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

                                ****  END  ****
          























                                                           CONTINUED