BILL NUMBER: AB 24	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MARCH 16, 2015

INTRODUCED BY   Assembly Member Nazarian

                        DECEMBER 1, 2014

   An act  to amend Section 5374 of, and to add Section 5444 to,
the Public Utilities Code, and to amend Section 1808.1 of the Vehicle
Code,  relating to transportation.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 24, as amended, Nazarian. Transportation network companies:
public  safety.   safety requirements. 
   The Passenger Charter-party Carriers' Act, with certain
exceptions, prohibits a charter-party carrier of passengers from
engaging in transportation services subject to regulation by the
Public Utilities Commission without obtaining a specified certificate
or permit, as appropriate, from the commission, and imposes various
other requirements. A violation of the act is generally a
misdemeanor.  Pursuant to existing law, the commission has
adopted rules and regulations relating to the operation of
transportation network companies.  Existing law defines a
transportation network company as an organization, whether a
corporation, partnership, sole proprietor, or other form, operating
in California that provides prearranged transportation services for
compensation using an online-enabled platform to connect passengers
with drivers using their personal vehicles. 
   Existing regulations of the commission require, among other
things, a transportation network company to (1) obtain an operating
permit from the commission, (2) conduct a criminal background check
of each driver, (3) establish a driver training program, (4) adopt a
zero-tolerance policy on drugs and alcohol, (5) maintain specified
insurance coverage on the company's employees, and (6) conduct a
19-point motor vehicle inspection of the vehicles operated by drivers
under contract with the company.  
   Existing law, operative on July 1, 2015, imposes specified
additional requirements for liability insurance coverage on
transportation network companies, as defined, and their participating
drivers.  
   This bill would declare the intent of the Legislature to enact
legislation that promotes public safety relating to transportation
network companies.  
   This bill would prohibit the commission from issuing or renewing a
permit or certificate to a charter-party carrier of passengers
unless the applicant, in addition to existing requirements,
participates in the Department of Motor Vehicles pull-notice system
and provides for mandatory Department of Justice background checks of
every driver, except as specified, who is either employed by, or
under contract to, the applicant. This bill would specifically
require a transportation network company to comply with these
provisions. The bill would also require a transportation network
company to register any vehicle used in the transportation of
passengers for compensation with the commission and display the
identifying decal issued by the commission on the vehicle.  

   The bill would require a driver of a charter-party carrier of
passengers or a transportation network company to submit to the
Department of Justice fingerprint images and related information for
the purpose of obtaining information as to the existence and content
of state convictions and state arrests, as specified, and would
require the department to charge a fee sufficient to cover the cost
of processing the request described in these provisions.  
   The bill would require that drivers hired or initially retained by
either a charter-party carrier of passengers or a transportation
network company on or after January 1, 2016, be subject to background
checks and mandatory drug and alcohol testing prior to employment or
retention and that drivers hired or initially retained before
January 1, 2016, complete a background check and drug and alcohol
test before January 1, 2017.  
   Because a violation of these provisions would be a crime, the bill
would impose a state-mandated local program.  
   The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.  
   This bill would provide that no reimbursement is required by this
act for a specified reason.
   Vote: majority. Appropriation: no. Fiscal committee:  no
  yes  . State-mandated local program:  no
  yes  .


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

   SECTION 1.    Section 5374 of the   Public
Utilities Code   is amended to read: 
   5374.  (a) (1) Before a permit or certificate is issued or
renewed, the commission shall require the applicant to establish
reasonable fitness and financial responsibility to initiate and
conduct or continue to conduct the proposed or existing
transportation services. The commission shall not issue or renew a
permit or certificate pursuant to this chapter unless the applicant
meets all of the following requirements:
   (A) It is financially and organizationally capable of conducting
an operation that complies with the rules and regulations of the
Department of the California Highway Patrol governing highway safety.

   (B) It is committed to observing the hours of service regulations
of state and, where applicable, federal law, for all persons, whether
employees or subcarriers, operating vehicles in transportation for
compensation under the certificate.
   (C) It has a preventive maintenance program in effect for its
vehicles used in transportation for compensation that conforms to
regulations of the Department of the California Highway Patrol in
Title 13 of the California Code of Regulations.
   (D) It participates in  a program   the
pull-notice system pursuant to Section 1808.1 of the Vehicle Code
 to regularly check the driving records of all persons, whether
employees or subcarriers, operating vehicles used in transportation
for compensation.
   (E) It has a safety education and training program in effect for
all employees or subcarriers operating vehicles used in
transportation for compensation.
   (F) It will maintain its vehicles used in transportation for
compensation in a safe operating condition and in compliance with the
Vehicle Code and with regulations contained in Title 13 of the
California Code of Regulations relative to motor vehicle safety.
   (G) It has filed with the commission the certificate of workers'
compensation insurance coverage or statement required by Section
5378.1.
   (H) It has provided the commission an address of an office or
terminal where documents supporting the factual matters specified in
the showing required by this subdivision may be inspected by the
commission and the Department of the California Highway Patrol.
   (I) It provides for a mandatory controlled substance and alcohol
testing certification program as adopted by the commission pursuant
to Section 1032.1.
   (J) Subparagraphs (C), (F), and (H) do not apply to a
charter-party carrier of passengers engaged in the provision of a
hired driver service when a rented motor vehicle is being operated by
the hired driver. 
   (K) It provides for mandatory Department of Justice criminal
background checks to check the criminal history of any driver who is
either under contract to, or employed by, the applicant to operate a
vehicle used in transportation for compensation pursuant to the
following:  
   (i) A driver, as defined in Section 305 of the Vehicle Code, of a
charter-party carrier, as defined in Section 5360, shall submit to
the Department of Justice fingerprint images and related information
required by the department for the purpose of obtaining information
as to the existence and content of state convictions and state
arrests and also information as to the existence and content of a
record of a state arrest for which the department establishes that
the person is free on bail or on his or her own recognizance pending
trial or appeal.  
   (ii) The department shall provide a state response to the
charter-party carrier pursuant to paragraph (1) of subdivision (p) of
Section 11105 of the Penal Code.  
   (iii) The charter-party carrier shall request from the Department
of Justice subsequent notification service, as provided pursuant to
Section 11105.2 of the Penal Code, for persons described in clause
(i).  
   (iv) The department shall charge a fee sufficient to cover the
cost of processing the request described in this subparagraph. 

   (v) A driver shall be denied employment or have his or her
contract voided if he or she is required by any law to register as a
sex offender or has been convicted of any felony, within a seven-year
period from the date of his or her application, involving any of the
following: any type of sexual offense; the manufacture, possession
for sale, transportation, or distribution of narcotics, controlled
substances, or addictive or dangerous drugs; force, violence, threat,
or intimidation against persons; kidnapping; forgery, fraud,
larceny, extortion, burglary, robbery, or theft; credit card fraud;
possession of a firearm or dangerous weapon; resisting or obstructing
a peace officer, public officer, or emergency medical technician; or
use of another vehicle for hire in the commission of a felony.
Equivalent out-of-state violations shall be considered.  
   (L) Subparagraph (K) shall not apply with respect to a driver who
is required to undergo a criminal background check pursuant to
Section 33192 or 45125.1 of the Education Code, while the driver
remains employed by the employer for whom the criminal background
check was performed.  
   (2) Drivers hired or initially retained by a charter-party carrier
of passengers on or after January 1, 2016, shall be subject to
background checks and mandatory drug and alcohol testing prior to
employment or retention. Drivers hired or initially retained before
January 1, 2016, shall complete a background check and drug and
alcohol test before January 1, 2017.  
   (2) 
    (3)  With respect to subparagraphs (B) and (F) of
paragraph (1), the commission may base a finding on a certification
by the commission that an applicant has filed, with the commission, a
sworn declaration of ability to comply and intent to comply.

   (3) 
    (4)  The commission may require, as a precondition to
the issuance of a permit or certificate, the procurement of a
performance bond sufficient to facilitate the collection of fines,
penalties, and restitution related to enforcement actions that can be
taken against the applicant.
   (b) In addition to the requirements in subdivision (a),
charter-party carriers shall meet all other state and, where
applicable, federal regulations as prescribed.
   (c) The commission may delegate to its executive director or that
executive director's designee the authority to issue, renew, or
authorize the transfer of, charter-party carrier permits or
certificates and to make the findings specified in subdivision (a)
that are necessary to that delegated authority.
   SEC. 2.    Section 5444 is added to the  
Public Utilities Code  , to read:  
   5444.  (a) A transportation network company shall do all of the
following:
   (1) Participate in a pull-notice system pursuant to Section 1808.1
of the Vehicle Code to regularly check the driving records of all
participating drivers.
   (2) Provide for a mandatory controlled substance and alcohol
testing certification program as adopted by the commission pursuant
to Section 1032.1.
   (3) Provide for mandatory Department of Justice criminal
background checks to check the criminal history of any participating
driver who is either under contract to, or employed by, the
transportation network company to operate a vehicle used in
transportation for compensation pursuant to the following:
   (A) A driver shall submit to the Department of Justice fingerprint
images and related information required by the department for the
purpose of obtaining information as to the existence and content of
state convictions and state arrests and also information as to the
existence and content of a record of a state arrest for which the
department establishes that the person is free on bail or on his or
her own recognizance pending trial or appeal.
   (B) The department shall provide a state response to the
transportation network company pursuant to paragraph (1) of
subdivision (p) of Section 11105 of the Penal Code.
   (C) The transportation network company shall request from the
Department of Justice subsequent notification service, as provided
pursuant to Section 11105.2 of the Penal Code, for persons described
in subparagraph (A).
   (D) The department shall charge a fee sufficient to cover the cost
of processing the request described in this paragraph.
   (E) A driver shall be denied employment or have his or her
contract voided if he or she is required by any law to register as a
sex offender or has been convicted of any felony, within a seven-year
period from the date of his or her application, involving any of the
following: any type of sexual offense; the manufacture, possession
for sale, transportation, or distribution of narcotics, controlled
substances, or addictive or dangerous drugs; force, violence, threat,
or intimidation against persons; kidnapping; forgery, fraud,
larceny, extortion, burglary, robbery, or theft; credit card fraud;
possession of a firearm or dangerous weapon; resisting or obstructing
a peace officer, public officer, or emergency medical technician; or
use of another vehicle for hire in the commission of a felony.
Equivalent out-of-state violations shall be considered.
   (4) Register any vehicle used in the transportation of passengers
for compensation with the commission and display on the vehicle a
suitable decal with an identifying symbol issued by the commission.
   (b) Drivers hired or initially retained by a transportation
network company on or after January 1, 2016, shall be subject to
background checks and mandatory drug and alcohol testing prior to
employment or retention. Drivers hired or initially retained before
January 1, 2016, shall complete a background check and drug and
alcohol test before January 1, 2017. 
   SEC. 3.    Section 1808.1 of the   Vehicle
Code   is amended to read:
   1808.1.  (a) The prospective employer of a driver who drives a
vehicle specified in subdivision (k) shall obtain a report showing
the driver's current public record as recorded by the department. For
purposes of this subdivision, a report is current if it was issued
less than 30 days prior to the date the employer employs the driver.
The report shall be reviewed, signed, and dated by the employer and
maintained at the employer's place of business until receipt of the
pull-notice system report pursuant to subdivisions (b) and (c). These
reports shall be presented upon request to an authorized
representative of the Department of the California Highway Patrol
during regular business hours.
   (b) The employer of a driver who drives a vehicle specified in
subdivision (k) shall participate in a pull-notice system, which is a
process for the purpose of providing the employer with a report
showing the driver's current public record as recorded by the
department, and any subsequent convictions, failures to appear,
accidents, driver's license suspensions, driver's license
revocations, or any other actions taken against the driving privilege
or certificate, added to the driver's record while the employer's
notification request remains valid and uncanceled. As used in this
section, participation in the pull-notice system means obtaining a
requester code and enrolling all employed drivers who drive a vehicle
specified in subdivision (k) under that requester code.
   (c) The employer of a driver of a vehicle specified in subdivision
(k) shall, additionally, obtain a periodic report from the
department at least every 12 months. The employer shall verify that
each employee's driver's license has not been suspended or revoked,
the employee's traffic violation point count, and whether the
employee has been convicted of a violation of Section 23152 or 23153.
The report shall be signed and dated by the employer and maintained
at the employer's principal place of business. The report shall be
presented upon demand to an authorized representative of the
Department of the California Highway Patrol during regular business
hours.
   (d) Upon the termination of a driver's employment, the employer
shall notify the department to discontinue the driver's enrollment in
the pull-notice system.
   (e) For the purposes of the pull-notice system and periodic report
process required by subdivisions (b) and (c), an owner, other than
an owner-operator as defined in Section 34624, and an employer who
drives a vehicle described in subdivision (k) shall be enrolled as if
he or she were an employee. A family member and a volunteer driver
who drives a vehicle described in subdivision (k) shall also be
enrolled as if he or she were an employee.
   (f) An employer who, after receiving a driving record pursuant to
this section, employs or continues to employ as a driver a person
against whom a disqualifying action has been taken regarding his or
her driving privilege or required driver's certificate, is guilty of
a public offense, and upon conviction thereof, shall be punished by
confinement in a county jail for not more than six months, by a fine
of not more than one thousand dollars ($1,000), or by both that
confinement and fine.
   (g) As part of its inspection of bus maintenance facilities and
terminals required at least once every 13 months pursuant to
subdivision (c) of Section 34501, the Department of the California
Highway Patrol shall determine whether each transit operator, as
defined in Section 99210 of the Public Utilities Code, is then in
compliance with this section and Section 12804.6, and shall certify
each operator found to be in compliance. Funds shall not be allocated
pursuant to Chapter 4 (commencing with Section 99200) of Part 11 of
Division 10 of the Public Utilities Code to a transit operator that
the Department of the California Highway Patrol has not certified
pursuant to this section.
   (h) (1) A request to participate in the pull-notice system
established by this section shall be accompanied by a fee determined
by the department to be sufficient to defray the entire actual cost
to the department for the notification service. For the receipt of
subsequent reports, the employer shall also be charged a fee
established by the department pursuant to Section 1811. An employer
who qualifies pursuant to Section 1812 shall be exempt from any fee
required pursuant to this section. Failure to pay the fee shall
result in automatic cancellation of the employer's participation in
the notification services.
   (2) A regularly organized fire department, having official
recognition of the city, county, city and county, or district in
which the department is located, shall participate in the pull-notice
program and shall not be subject to the fee established pursuant to
this subdivision.
   (3) The Board of Pilot Commissioners for Monterey Bay and the Bays
of San Francisco, San Pablo, and Suisun, and its port agent shall
participate in the pull-notice system established by this section,
subject to Section 1178.5 of the Harbors and Navigation Code, and
shall not be subject to the fees established pursuant to this
subdivision.
   (i) The department, as soon as feasible, may establish an
automatic procedure to provide the periodic reports to an employer by
mail or via an electronic delivery method, as required by
subdivision (c), on a regular basis without the need for individual
requests.
   (j) (1) The employer of a driver who is employed as a casual
driver is not required to enter that driver's name in the pull-notice
system, as otherwise required by subdivision (a). However, the
employer of a casual driver shall be in possession of a report of the
driver's current public record as recorded by the department, prior
to allowing a casual driver to drive a vehicle specified in
subdivision (k). A report is current if it was issued less than six
months prior to the date the employer employs the driver.
   (2) For the purposes of this subdivision, a driver is employed as
a casual driver when the employer has employed the driver less than
30 days during the preceding six months. "Casual driver" does not
include a driver who operates a vehicle that requires a passenger
transportation endorsement.
   (k) This section applies to a vehicle for the operation of which
the driver is required to have a class A or class B driver's license,
a class C license with a hazardous materials endorsement, a class C
license issued pursuant to Section 12814.7, or a certificate issued
pursuant to Section 12517, 12519, 12520, 12523, 12523.5, or 12527, or
a passenger vehicle having a seating capacity of not more than 10
persons, including the driver, operated for compensation by a
charter-party carrier of  passengers  
passengers, transportation network company,  or passenger stage
corporation pursuant to a certificate of public convenience and
necessity or a permit issued by the Public Utilities Commission. 

   (l  ) (1) For purposes of this section, the term "employer"
or "prospective employer" includes a transportation network company
whose permit or certificate, including any renewal of that permit or
certificate, is subject to the requirements of Article 7 (commencing
with Section 5430) of Chapter 8 of Division 2 of the Public Utilities
Code. 
   (l) 
    (2)  This  section shall   section
shall  not be construed to change the definition of "employer,"
"employee," or "independent contractor" for any  other 
purpose.
   (m) A motor carrier who contracts with a person to drive a vehicle
described in subdivision (k) that is owned by, or leased to, that
motor carrier, shall be subject to subdivisions (a), (b), (c), (d),
(f), (j), (k), and ( l  ) and the employer obligations in
those subdivisions.
   (n) Reports issued pursuant to this section, but only those for a
driver of a taxicab engaged in transportation services as described
in subdivision (a) of Section 53075.5 of the Government Code, shall
be presented upon request, during regular business hours, to an
authorized representative of the administrative agency responsible
for issuing permits to taxicab transportation services pursuant to
Section 53075.5 of the Government Code.
   SEC. 4.    No reimbursement is required by this act
pursuant to Section 6 of Article XIII B of the California
Constitution because the only costs that may be incurred by a local
agency or school district will be incurred because this act creates a
new crime or infraction, eliminates a crime or infraction, or
changes the penalty for a crime or infraction, within the meaning of
Section 17556 of the Government Code, or changes the definition of a
crime within the meaning of Section 6 of Article XIII B of the
California Constitution.  
  SECTION 1.    It is the intent of the Legislature
to enact legislation that promotes public safety relating to
transportation network companies.