BILL ANALYSIS                                                                                                                                                                                                    




                   Senate Appropriations Committee Fiscal Summary
                           Senator Christine Kehoe, Chair


          AB 2118 (Butler) - Household goods carriers.
          
          Amended: August 6, 2012         Policy Vote: E,U&C 12-0
          Urgency: No                     Mandate: Yes
          Hearing Date: August 6, 2012                      Consultant: 
          Bob Franzoia  
          
          This bill does not meet the criteria for referral to the 
          Suspense File.


          Bill Summary: AB 2118 would amend the Household Goods Carriers 
          Act to enhance the authority of the Public Utilities Commission 
          to regulate household goods carriers.

          Fiscal Impact: $95,000 annually from the Transportation 
          Reimbursement Account. 

          Background: The Household Goods Carriers Act prevents carriers 
          from engaging in the business of transporting used household 
          goods over any public highway, including advertising, 
          soliciting, offering, or entering into an agreement, without a 
          permit issued by the commission.

          Proposed Law: This bill:
          (1) Identifies "broker" as a person engaged by others in the act 
          of arranging for service by a household goods carrier and makes 
          a "broker" subject to permit requirements.
          (2) Clarifies that an entity falling within the definition of 
          "household goods carrier," including a "broker," is subject to 
          penalties regardless of whether it has obtained a permit and 
          maintains the failure to obtain a permit as a separate 
          violation.
          (3) Increase fines from a maximum of $1,000 to $2,500 and 
          requires that the fine for a violation that involves operating 
          or holding oneself out as a household goods carrier without a 
          permit be not less than $1,000.
          (4) Authorizes the commission to suspend or revoke a household 
          goods carrier's permit, or assess a fine, for unauthorized use 
          of another person's trademark and authorizes assessments to 
          cover the expense of a commission trademark infringement 
          investigation.








          AB 2118 (Butler)
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          (5) Requires every household goods carrier to add a link to its 
          Internet Web site that immediately directs all consumers to the 
          commission's Internet Web site related to protection for 
          consumers of moving companies and household goods carriers.
          (6) Authorizes the release, without customer consent, of the 
          name and address of a subscriber whose telephone number is being 
          use by a household goods carrier operating without a permit.
          (7) Require the commission to adopt rules for meeting 
          requirements related to household goods carriers' records, 
          customer contracts, signatures, insurance, and other 
          documentation with electronic records.

          Staff Comments: According to the commission, consumers who hire 
          a household goods carrier that has not obtained a permit are 
          potentially subject to excessive charges, uninsured losses, and 
          other service problems.  Carriers operating without a permit 
          have an unfair cost advantage over permitted carriers because 
          they maintain inadequate liability and workers' compensation 
          insurance, which is a substantial expense for lawful operators.  
          As a consequence, carriers who obtain a permit and comply with 
          the rules lose business to the violators, which in turn, make it 
          more difficult for them to fully comply with insurance and 
          safety standards, all to the detriment of consumers.

          The commission indicates its enforcement staff receives many 
          complaints about carriers without permits, many from licensed 
          carriers or from industry trade groups.  Stopping the violators 
          is difficult because of the relative anonymity afforded by 
          Internet advertising and because many carriers claim to be 
          operating only as a "broker" and thus not subject to permit 
          requirements.  Unsuspecting customers are frequently subject to 
          abusive practices such as "holding goods hostage" - refusal to 
          deliver goods until the customer pays additional charges not 
          disclosed when the service was arranged.  

          Because a violation of the Household Goods Carriers Act or an 
          order of the commission is a crime, this bill would impose a 
          state mandated local program.  No reimbursement is required. 














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