BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 2118
                                                                  Page  1

          Date of Hearing:   April 23, 2012

                    ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
                               Steven Bradford, Chair
                 AB 2118 (Butler) - As Introduced:  February 23, 2012
           
          SUBJECT  :   Household Goods Carriers

           SUMMARY  :   Seeks to additionally prohibit a household goods 
          carrier from being a broker; requires a link from the household 
          goods carrier's website, if applicable, to consumer protections 
          on the website of the California Public Utilities Commission 
          (PUC); to permit PUC access to telephone subscriber's data upon 
          determining use of the number by an unlicensed household good's 
          carrier and increased civil and criminal penalties for 
          fraudulent representation of licensed household goods carrier 
          status.  Specifically,  this bill  : 

          1)Prohibits a household goods carrier from arranging as a broker 
            for the transportation of used household goods and personal 
            effects. 

          2)Creates a definition of a "broker" to be a person engaged for 
            others in the act of arranging, for compensation, the 
            transportation of used household goods by a motor vehicle over 
            the highways of this state for or on behalf of a shipper, 
            consignor, or a consignee.

          3)Permits the PUC to order an Internet Web site provider or the 
            source of an Internet posting to remove the post of the 
            unlicensed household goods carrier.

          4)Requires a household goods carrier with an Internet Web site 
            to add a link on that site that directs consumers to the PUC's 
            Internet Web site that promotes consumer rights and 
            protection.

          5)Requires telephone companies to provide access to the name and 
            address of the subscriber whose telephone number is being use 
            by an unlicensed household goods carrier without the written 
            consent of the subscriber.

          6)Increases the dollar limit of the misdemeanor fine for 
            violating the Act from $1,000 to $5,000.









                                                                  AB 2118
                                                                  Page  2

          7)Provides for a civil penalty of not more than $5,000 per day 
            of violation when a household goods carrier falsifies 
            licensure, membership in an association, or location.

           EXISTING LAW  :

          1)The PUC has regulatory authority over a public utility which 
            includes transportation companies.  Household goods carriers 
            are subject to the jurisdiction and control of the commission 
            under the Household Goods Carriers Act (Act).

          2)The definition of a "household goods carrier" includes 
            corporations and persons engaged in a business that transports 
            used household goods and personal effects by a motor vehicle 
            over any public highway in this state where there is 
            compensation for the transport.

          3)The Act prohibits a household goods carrier from engaging, or 
            attempting to engage, in the business of transporting used 
            household goods and personal effects without a permit issued 
            by the PUC that authorizes transportation solely within the 
            state.  A valid operating authority issued by the Federal 
            Motor Carrier Safety Administration is needed for interstate 
            transportation.

          4)The commission shall see that provisions of the Constitution 
            and State statues affecting public utilities, if not vested 
            elsewhere, are enforced and obeyed.  For these violations, the 
            PUC shall insure violations are promptly prosecuted and 
            penalties to the state are recovered and collected.

          5)The PUC may sue in the name of the people of the State of 
            California.  Upon the request of the commission, the 
            California Attorney General or the affected county district 
            attorney shall aid in any investigation, hearing, or trial.

          6)Without first obtaining a residential subscriber's consent, no 
            telephone or telegraph corporation shall give any person or 
            corporation a subscriber's personal calling patterns; a 
            residential subscriber's personal financial information except 
            when a utility needs it to determine the creditworthiness of a 
            new utility subscriber; information on the services that the 
            residential subscriber purchases; and, demographic information 
            about individual residential subscribers or aggregate 
            information from which individual identities and 








                                                                  AB 2118
                                                                  Page  3

            characteristics have not been removed.

          7)Requires a telephone utility or its parent or subsidiary, to 
            provide the PUC access to information on a subscriber's name 
            and address when the subscriber's telephone number is being 
            used by an unlicensed household goods carrier, upon demand 
            from the commission and an order of a magistrate.

          8)Specifies that a magistrate may only issue such an order after 
            it is shown that other available PUC enforcement remedies have 
            failed to terminate unlawful actions of a household goods 
            carrier that are detrimental to the public welfare and safety.


           FISCAL EFFECT  :   Unknown

           COMMENTS  :   According to the author, "The Household Goods 
          Carriers Act of 1951 paved the way for regulation of the moving 
          and storage industry in California.  Substantial amendments have 
          not been made to update the Act to prevent the industry from 
          rouge and unlicensed moving companies.  This bill will stiffen 
          fines against unlicensed moving companies by matching fines 
          currently given to the licensed, regulated companies while also 
          promoting consumer knowledge and protection by adding a consumer 
          rights link provided by the PUC to each licensed moving 
          company's website.  Also, this bill will create rules to allow 
          the commission to adopt the use of electronic transactions 
          between a carrier and shipper." 

          1)It is the purpose of the Act is to preserve for the public the 
            use of public highways consistent with the needs of commerce 
            without unnecessary congestion or wear and tear upon highways; 
            to secure just, reasonable, and nondiscriminatory rates; and 
            to promote fair dealings and ethical conduct in household 
            goods carrier services. 

          2)The sponsor of AB 2118, The California Moving and Storage 
            Association (CMSA), is familiar with the practices of 
            unethical and unlicensed household goods carriers.  It 
            believes that many unlicensed operators hold the mistaken 
            belief that they operate in a gray area as the Act only 
            applies to licensed providers.  CMSA suggests that the Act be 
            amended to make it clear that it applies to all that seek to 
            move used household goods and personal items in the state.









                                                                  AB 2118
                                                                  Page  4

             The author might want to address this concern by amending her 
            bill by add Public Utility Code section 5109 "Household goods 
            carrier" to AB 2118 as follows  :

            PU Code section 5109.  "Household goods carrier" includes 
            every corporation or person, their lessees, trustee, receivers 
            or trustees appointed by any court whatsoever, engaged in the 
            licensed or unlicensed transportation for compensation or hire 
            as a business by means of a motor vehicle or motor vehicles 
            being used in the transportation of used household goods and 
            personal effects over any public highway in this state.

          3)AB 2118 also contains the addition of a definition for a 
            "broker."  This was included to update the code now that many 
            unlicensed operators use the Internet to attract customers, 
            typically bid the job, illegally contract out the work, 
            collect the fees and then disappear. 

          4)The bill also would require each household goods carrier that 
            does list its company on the Internet to add or include a link 
            that directs all consumers to an Internet Web site hosted by 
            the PUC that promotes consumer rights and protection.

             The author might want to consider amending the new Public 
            Utility Code section 5144 to provide a direct link to the 
            PUC's recommended protections and safeguards as follows:
           
            PU Code section 5144. Every household goods carrier shall add 
            have a prominent link on its home page if the household goods 
            carrier's operates, posts to or uses an Internet Web site, 
            that immediately directs all consumers to the commission's 
            Internet Web page on moving companies and household goods 
            carriers that promotes consumer rights and protection.

          5)Every household goods carrier and every officer or employee of 
            the carrier who violates the Act or who aids or abets any 
            violations or fails to obey or comply with any PUC order or 
            regulation is guilty of a misdemeanor, and can be fine up to 
            $1,000 or imprisoned in a county jail for up to 3 months or 
            both.  If a violation is willful, each willful violation is 
            punishable by fine up to $10,000 or by imprisonment in a 
            county jail for up to a year, or both.

            The author seeks to increase the simple misdemeanor fine from 
            $1,000 to $5,000 to deter future violations.  Most misdemeanor 








                                                                  AB 2118
                                                                  Page  5

            penalty assessments do not increase five-fold at one time.  
             The author may wish to consider increasing the $1,000 fine to 
            $2,500 instead of $5,000 which is more in keeping with penalty 
            increases.  

          6)AB 2118 seeks to create a new fine for the fraudulent use of 
            household goods carriers that falsify licenses, association 
            membership, or a location.  The new fine would be not more 
            than $5,000 per day that the carrier is in violation.  This 
            fine was added because such representations falsely portray 
            legitimacy and attract unsophisticated customers.

          7)AB 2118 also seeks swift consumer protections by granting the 
            PUC the authority to order an Internet Web site provider or 
            the source of a listing of an unlicensed household goods 
            carrier to remove the Internet Web site or the listing 
            offering the unlicensed household goods carrier.

            The PUC has authority over specified utilities in the state of 
            California.   Since it is unlikely that the Internet Web site 
            or provider is under the jurisdiction of the PUC, the author 
            might additional wish to strike Section 6 which creates Public 
            Utilities Code section 5323.  


           REGISTERED SUPPORT / OPPOSITION  :   

           Support 
           
          21st Century Van Lines
          Ace Relocation Systems, Inc. 
          Advantage Moving & Storage
          Andy's Transfer & Storage (an Interstate Agent for North 
          American Van Lines)
          Atlas Transfer & Storage Co.
          Best Moving Services, Inc.
          Beverly Hills Transfer and Storage
          Blue Chip Moving & Storage, Inc.
          California Moving and Storage Association (CMSA) (sponsor)
          California Moving Systems
          California Public Utilities Commission (CPUC) (co-sponsor)
          California Relocation Services, Inc.
          Cardinal Van & Storage (Atlas Interstate Agent)
          Careful Moving & Storage 
          Chipman Moving & Storage 








                                                                  AB 2118
                                                                  Page  6

          Colonial Van & Storage, Inc. 
          Crown (Worldwide Moving & Storage)
          Dewitt Companies LTD. 
          Earl Farnsworth Express
          Ernie's Van & Storage
          Excel Moving Services 
          E-ZMove Moving Services
          G & H Moving & Storage Company (an agent for Mayflower Transit)
          Galbraith Van & Storage Co. Inc. (an agent for North American 
          Van Lines) 
          Golden Eagle Moving Services 
          Golden Gate Moving and Storage Co. 
          Hi Desert Moving and Storage
          Johnson United, Storage & Moving
          Lompoc Van & Storage, Inc. (an agent for United Van Lines)
          Main Street Moving and Storage
          Metropolitan Van & Storage, Inc.
          Monument Moving and Storage
          Mother Lode Van & Storage, Inc.
          MovePros
          Movers Supply Brokerage, Inc. 
          Nor-Cal Moving Services
          North Bay Moving & Storage (an agent for North American Van 
          Lines)
          One Big Man & One Big Truck Moving Co., Inc.
          Ortiz Bros. Moving & Storage 
          Paul Hanson Partners, Specialty Insurance Solutions 
          Poulos Moving Systems, Inc. 
          Priority Moving, Inc. (an agent for Wheaton Interstate Moving)
          Qualex Inc. (a White Glove Furniture Delivery company)
          Redwood Moving & Storage
          Roseville Van & Storage, Inc. (an agent for North American Van 
          Lines) 
          San Diego Van & Storage Co.
          Santa Rosa Moving & Storage Co.
          Seniors-On-The-Move, Inc.
          Stadler & Jensen Moving
          Starving Students, Inc.
          Sterling Van Lines 
          Unipack Global Relocation Services 
          Vandenberg Van & Storage, Inc. 
          VIP Transport (an agent for Mayflower Transit and United Van 
          Lines)
          Walton Family Moving and Storage (an agent for Wheaton 
          Interstate Moving)








                                                                  AB 2118
                                                                  Page  7


           Opposition 
           
          AT&T (unless amended)
          California Cable & Telecommunications Association (CCTA) (unless 
          amended)
          Comcast (unless amended)
          Verizon (unless amended)
           
          Analysis Prepared by  :    Susan Kateley / U. & C. / (916) 
          319-2083