Amended in Assembly April 22, 2015

Amended in Assembly April 14, 2015

Amended in Assembly March 16, 2015

California Legislature—2015–16 Regular Session

Assembly BillNo. 24


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 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. Existing law requires, as a condition to obtaining a certificate or permit, that the applicant, among other things, participate in a program to regularly check the driving records of all vehicle operators and provide a mandatory controlled substance and alcohol testing certification program. A violation of the act is generally a misdemeanor. 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.

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 Motorbegin delete Vehiclesend deletebegin insert Vehiclesend insertbegin insertend insert pull-notice system. This bill would specifically require a transportation network company to comply with this provision and to provide for a mandatory controlled substance and alcohol testing certification program. 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 an identifyingbegin delete decal issuedend deletebegin insert symbol prescribedend insert by the commission on the vehicle.

The bill would require that drivers hired or initially retained by a transportation network company on or after January 1, 2016, be subject to mandatory drug and alcohol testing prior to employment or retention and that drivers hired or initially retained before January 1, 2016, complete a 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: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

P2    1

SECTION 1.  

Section 5374 of the Public Utilities Code is
2amended to read:

3

5374.  

(a) (1) Before a permit or certificate is issued or
4renewed, the commission shall require the applicant to establish
5reasonable fitness and financial responsibility to initiate and
6conduct or continue to conduct the proposed or existing
7transportation services. The commission shall not issue or renew
8a permit or certificate pursuant to this chapter unless the applicant
9meets all of the following requirements:

P3    1(A) It is financially and organizationally capable of conducting
2an operation that complies with the rules and regulations of the
3Department of the California Highway Patrol governing highway
4safety.

5(B) It is committed to observing the hours of service regulations
6of state and, where applicable, federal law, for all persons, whether
7employees or subcarriers, operating vehicles in transportation for
8compensation under the certificate.

9(C) It has a preventive maintenance program in effect for its
10vehicles used in transportation for compensation that conforms to
11regulations of the Department of the California Highway Patrol
12in Title 13 of the California Code of Regulations.

13(D) It participates in the pull-notice system pursuant to Section
141808.1 of the Vehicle Code to regularly check the driving records
15of all persons, whether employees or subcarriers, operating vehicles
16used in transportation for compensation.

17(E) It has a safety education and training program in effect for
18all employees or subcarriers operating vehicles used in
19transportation for compensation.

20(F) It will maintain its vehicles used in transportation for
21compensation in a safe operating condition and in compliance with
22the Vehicle Code and with regulations contained in Title 13 of the
23California Code of Regulations relative to motor vehicle safety.

24(G) It has filed with the commission the certificate of workers’
25compensation insurance coverage or statement required by Section
265378.1.

27(H) It has provided the commission an address of an office or
28terminal where documents supporting the factual matters specified
29in the showing required by this subdivision may be inspected by
30the commission and the Department of the California Highway
31Patrol.

32(I) It provides for a mandatory controlled substance and alcohol
33testing certification program as adopted by the commission
34pursuant to Section 1032.1.

35(J) Subparagraphs (C), (F), and (H) do not apply to a
36charter-party carrier of passengers engaged in the provision of a
37hired driver service when a rented motor vehicle is being operated
38by the hired driver.

39(2) With respect to subparagraphs (B) and (F) of paragraph (1),
40the commission may base a finding on a certification by the
P4    1commission that an applicant has filed, with the commission, a
2sworn declaration of ability to comply and intent to comply.

3(3) The commission may require, as a precondition to the
4issuance of a permit or certificate, the procurement of a
5performance bond sufficient to facilitate the collection of fines,
6penalties, and restitution related to enforcement actions that can
7be taken against the applicant.

8(b) In addition to the requirements in subdivision (a),
9charter-party carriers shall meet all other state and, where
10applicable, federal regulations as prescribed.

11(c) The commission may delegate to its executive director or
12that executive director’s designee the authority to issue, renew, or
13authorize the transfer of, charter-party carrier permits or certificates
14and to make the findings specified in subdivision (a) that are
15necessary to that delegated authority.

16

SEC. 2.  

Section 5444 is added to the Public Utilities Code, to
17read:

18

5444.  

(a) A transportation network company shall do all of
19the following:

20(1) Participate in a pull-notice system pursuant to Section 1808.1
21of the Vehicle Code to regularly check the driving records of all
22participating drivers.

23(2) Provide for a mandatory controlled substance and alcohol
24testing certification program as adopted by the commission
25pursuant to Section 1032.1.

26(3) Register any vehicle used in the transportation of passengers
27for compensation with the commission and display on the vehicle
28begin delete a suitable decal withend delete an identifying symbolbegin delete issuedend deletebegin insert prescribedend insert by
29thebegin delete commission.end deletebegin insert commission pursuant to Section 5385.end insert

30(b) Drivers hired or initially retained by a transportation network
31company on or after January 1, 2016, shall be subject to mandatory
32drug and alcohol testing prior to employment or retention. Drivers
33hired or initially retained before January 1, 2016, shall complete
34a drug and alcohol test before January 1, 2017.

35

SEC. 3.  

Section 1808.1 of the Vehicle Code is amended to
36read:

37

1808.1.  

(a) The prospective employer of a driver who drives
38a vehicle specified in subdivision (k) shall obtain a report showing
39the driver’s current public record as recorded by the department.
40For purposes of this subdivision, a report is current if it was issued
P5    1less than 30 days prior to the date the employer employs the driver.
2The report shall be reviewed, signed, and dated by the employer
3and maintained at the employer’s place of business until receipt
4of the pull-notice system report pursuant to subdivisions (b) and
5(c). These reports shall be presented upon request to an authorized
6representative of the Department of the California Highway Patrol
7during regular business hours.

8(b) The employer of a driver who drives a vehicle specified in
9subdivision (k) shall participate in a pull-notice system, which is
10a process for the purpose of providing the employer with a report
11showing the driver’s current public record as recorded by the
12department, and any subsequent convictions, failures to appear,
13accidents, driver’s license suspensions, driver’s license revocations,
14or any other actions taken against the driving privilege or
15certificate, added to the driver’s record while the employer’s
16notification request remains valid and uncanceled. As used in this
17section, participation in the pull-notice system means obtaining a
18requester code and enrolling all employed drivers who drive a
19vehicle specified in subdivision (k) under that requester code.

20(c) The employer of a driver of a vehicle specified in subdivision
21(k) shall, additionally, obtain a periodic report from the department
22at least every 12 months. The employer shall verify that each
23employee’s driver’s license has not been suspended or revoked,
24the employee’s traffic violation point count, and whether the
25employee has been convicted of a violation of Section 23152 or
2623153. The report shall be signed and dated by the employer and
27maintained at the employer’s principal place of business. The
28report shall be presented upon demand to an authorized
29representative of the Department of the California Highway Patrol
30during regular business hours.

31(d) Upon the termination of a driver’s employment, the employer
32shall notify the department to discontinue the driver’s enrollment
33in the pull-notice system.

34(e) For the purposes of the pull-notice system and periodic report
35process required by subdivisions (b) and (c), an owner, other than
36an owner-operator as defined in Section 34624, and an employer
37who drives a vehicle described in subdivision (k) shall be enrolled
38as if he or she were an employee. A family member and a volunteer
39 driver who drives a vehicle described in subdivision (k) shall also
40be enrolled as if he or she were an employee.

P6    1(f) An employer who, after receiving a driving record pursuant
2to this section, employs or continues to employ as a driver a person
3against whom a disqualifying action has been taken regarding his
4or her driving privilege or required driver’s certificate, is guilty of
5a public offense, and upon conviction thereof, shall be punished
6by confinement in a county jail for not more than six months, by
7a fine of not more than one thousand dollars ($1,000), or by both
8that confinement and fine.

9(g) As part of its inspection of bus maintenance facilities and
10terminals required at least once every 13 months pursuant to
11subdivision (c) of Section 34501, the Department of the California
12Highway Patrol shall determine whether each transit operator, as
13defined in Section 99210 of the Public Utilities Code, is then in
14compliance with this section and Section 12804.6, and shall certify
15each operator found to be in compliance. Funds shall not be
16allocated pursuant to Chapter 4 (commencing with Section 99200)
17of Part 11 of Division 10 of the Public Utilities Code to a transit
18operator that the Department of the California Highway Patrol has
19not certified pursuant to this section.

20(h) (1) A request to participate in the pull-notice system
21established by this section shall be accompanied by a fee
22determined by the department to be sufficient to defray the entire
23actual cost to the department for the notification service. For the
24receipt of subsequent reports, the employer shall also be charged
25a fee established by the department pursuant to Section 1811. An
26employer who qualifies pursuant to Section 1812 shall be exempt
27from any fee required pursuant to this section. Failure to pay the
28fee shall result in automatic cancellation of the employer’s
29participation in the notification services.

30(2) A regularly organized fire department, having official
31recognition of the city, county, city and county, or district in which
32the department is located, shall participate in the pull-notice
33program and shall not be subject to the fee established pursuant
34to this subdivision.

35(3) The Board of Pilot Commissioners for Monterey Bay and
36the Bays of San Francisco, San Pablo, and Suisun, and its port
37agent shall participate in the pull-notice system established by this
38section, subject to Section 1178.5 of the Harbors and Navigation
39Code, and shall not be subject to the fees established pursuant to
40this subdivision.

P7    1(i) The department, as soon as feasible, may establish an
2automatic procedure to provide the periodic reports to an employer
3by mail or via an electronic delivery method, as required by
4subdivision (c), on a regular basis without the need for individual
5requests.

6(j) (1) The employer of a driver who is employed as a casual
7driver is not required to enter that driver’s name in the pull-notice
8system, as otherwise required by subdivision (a). However, the
9employer of a casual driver shall be in possession of a report of
10the driver’s current public record as recorded by the department,
11prior to allowing a casual driver to drive a vehicle specified in
12subdivision (k). A report is current if it was issued less than six
13months prior to the date the employer employs the driver.

14(2) For the purposes of this subdivision, a driver is employed
15as a casual driver when the employer has employed the driver less
16than 30 days during the preceding six months. “Casual driver”
17does not include a driver who operates a vehicle that requires a
18passenger transportation endorsement.

19(k) This section applies to a vehicle for the operation of which
20the driver is required to have a class A or class B driver’s license,
21a class C license with a hazardous materials endorsement, a class
22C license issued pursuant to Section 12814.7, or a certificate issued
23pursuant to Section 12517, 12519, 12520, 12523, 12523.5, or
2412527, or a passenger vehicle having a seating capacity of not
25more than 10 persons, including the driver, operated for
26compensation by a charter-party carrier of passengers,
27transportation network company, or passenger stage corporation
28pursuant to a certificate of public convenience and necessity or a
29permit issued by the Public Utilities Commission.

30(l) (1) For purposes of this section, the term “employer” or
31“prospective employer” includes a transportation network company
32whose permit or certificate, including any renewal of that permit
33or certificate, is subject to the requirements of Article 7
34(commencing with Section 5430) of Chapter 8 of Division 2 of
35the Public Utilities Code.

36(2) This section shall not be construed to change the definition
37of “employer,” “employee,” or “independent contractor” for any
38other purpose.

39(m) A motor carrier who contracts with a person to drive a
40vehicle described in subdivision (k) that is owned by, or leased to,
P8    1that motor carrier, shall be subject to subdivisions (a), (b), (c), (d),
2(f), (j), (k), and (l) and the employer obligations in those
3subdivisions.

4(n) Reports issued pursuant to this section, but only those for a
5driver of a taxicab engaged in transportation services as described
6in subdivision (a) of Section 53075.5 of the Government Code,
7shall be presented upon request, during regular business hours, to
8an authorized representative of the administrative agency
9responsible for issuing permits to taxicab transportation services
10pursuant to Section 53075.5 of the Government Code.

11

SEC. 4.  

No reimbursement is required by this act pursuant to
12Section 6 of Article XIII B of the California Constitution because
13the only costs that may be incurred by a local agency or school
14district will be incurred because this act creates a new crime or
15infraction, eliminates a crime or infraction, or changes the penalty
16for a crime or infraction, within the meaning of Section 17556 of
17the Government Code, or changes the definition of a crime within
18the meaning of Section 6 of Article XIII B of the California
19Constitution.



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