BILL ANALYSIS                                                                                                                                                                                                    



                                                                       AB 828


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          ASSEMBLY THIRD READING


          AB  
          828 (Low and Chang)


          As Amended  April 20, 2015


          Majority vote


           --------------------------------------------------------------------- 
          |Committee       |Votes |Ayes                    |Noes                |
          |----------------+------+------------------------+--------------------|
          |Transportation  |14-0  |Frazier, Achadjian,     |                    |
          |                |      |Baker, Bloom, Daly,     |                    |
          |                |      |Dodd, Eduardo Garcia,   |                    |
          |                |      |Gomez, Kim, Linder,     |                    |
          |                |      |Medina, Melendez,       |                    |
          |                |      |O'Donnell, Santiago     |                    |
           --------------------------------------------------------------------- 


          SUMMARY:  Excludes motor vehicles operating in connection with a  
          transportation network company (TNC) from being required to  
          register as a commercial vehicle if certain conditions are met.  


          FISCAL EFFECT:  Unknown. This bill is keyed non-fiscal by the  
          Legislative Counsel.  


          COMMENTS:  Existing law requires the California Public Utilities  
          Commission (PUC) to regulate various transportation services,  
          including charter-party carrier of passengers ( CPCs).  CPCs  
          perform various types of transportation services including, but  
          not limited to, a limousine with seating capacity up to eight  








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          passengers, a bus providing prearranged services with capacity up  
          to 15 passengers, or buses providing round-trip sightseeing trips.  
           In order to obtain an operating permit or certificate from PUC,  
          CPCs must meet a number of requirements including providing  
          sufficient proof of financial responsibility, maintaining a  
          preventative maintenance program for all vehicles, possessing a  
          safety education and training program, and regularly checking the  
          driving records of all persons operating vehicles used in  
          transportation for compensation.  


          Approximately five years ago, a new model of transportation  
          service began to take place in cities across the United States.   
          Known as TNCs, these companies allow patrons to prearrange  
          transportation services through an online application on their  
          smartphone or computer.  Patrons request a ride to a predetermined  
          location, and the application connects them with a TNC driver.   
          Payment is processed through the application so that no physical  
          financial transaction occurs during the trip itself between the  
          patron and the driver.  Under this model drivers are considered  
          independent contractors and TNCs take a commission on each trip.


          In a September 2013 decision, the PUC began regulating TNCs by  
          creating a distinct new category of CPCs.  The PUC tailored  
          specific new rules in response to the introduction of this new  
          technology into an existing industry.  The decision requires TNCs  
          to obtain a permit from the PUC, conduct criminal background  
          checks on drivers, check driver's records, establish a driver  
          training program, implement a zero-tolerance policy on drugs and  
          alcohol, conduct vehicle inspections, and obtain authorization  
          from airports before conducting any operations on or into airport  
          property.  PUC is currently in the process of rolling out the  
          second phase of the September 2013 decision which will include an  
          evaluation of the original set of regulations and also consider  
          any modifications to existing regulations relative to other CPC  
          categories.   










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          On January 5, 2015, the California Department of Motor Vehicles  
          (DMV) issued an advisory memo due to a number of dealers and  
          customers seeking clarification on how to register a vehicle that  
          would be used to provide TNC services. These inquiries were  
          derived from purchasers buying new vehicles through financing  
          programs offered by TNCs.  The memo stated that "any passenger  
          vehicle used or maintained for the transportation of persons for  
          hire, compensation, or profit is a commercial vehicle.  Even  
          occasional use of a vehicle in this manner requires the vehicle to  
          be registered commercially."  DMV ultimately retracted the  
          advisory memo clarifying that further analysis is warranted.  


          Existing law requires a vehicle to be registered as a passenger or  
          commercial vehicle based on how the vehicle is used and/or  
          designed.  Registration for a passenger vehicle typically includes  
          several vehicle-related fees including registration fees, vehicle  
          licensing fees, and locally imposed county/district fees (e.g.  
          vehicle abatement, air quality, Service Authority for Freeway  
          Emergencies).  Vehicles registered as commercial are required to  
          pay an additional fee based on the weight of the vehicle which is  
          generally assessed based on the gross vehicle weight and number of  
          axles.  Overall, the weight fee is designed to offset the  
          additional wear and tear that a commercial vehicle causes on the  
          state's roads and highways.  Additionally, commercial license  
          plates defer from passenger vehicle license plates in order to  
          ensure law enforcement has the ability to easily identify  
          commercially operating vehicles.    


          The author introduced this bill in response to DMV's advisory  
          memo.  Advocates claim that commercial registration requirements  
          are outdated and do not adequately address new services provided  
          through advancements in technology.  Respectively, this bill  
          attempts to develop an exclusion for TNC drivers using their  
          passenger vehicles while ensuring that other types of commercial  
          vehicles continue to be subject to commercial registration  
          requirements.  The author notes, "TNCs are the cutting edge of  
          transportation innovation and are a large part of the rapidly  








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          increasing 'sharing' economy model.  With the convenience of TNCs  
          many more people are starting to use them which cuts down on  
          traffic and emissions from cars.  Many TNC drivers are part-time  
          or occasional drivers, working an average of 22.69 hours per  
          month, driving to supplement their income.  To that end, mandating  
          TNC drivers to register their personal vehicle as a commercial  
          vehicle needlessly increases business costs and curtails growth  
          and innovation." 



          Please see the policy committee analysis for a full discussion of  
          this bill.




          Analysis Prepared by:                                               
          Manny Leon / TRANS. / (916) 319-2093  FN: 0000216