BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 1289| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: AB 1289 Author: Cooper (D) Amended: 8/2/16 in Senate Vote: 21 SENATE ENERGY, U. & C. COMMITTEE: 11-0, 6/13/16 AYES: Hueso, Morrell, Cannella, Gaines, Hertzberg, Hill, Lara, Leyva, McGuire, Pavley, Wolk SENATE PUBLIC SAFETY COMMITTEE: 5-2, 6/28/16 AYES: Hancock, Glazer, Leno, Liu, Monning NOES: Anderson, Stone SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8 ASSEMBLY FLOOR: 80-0, 6/1/15 - See last page for vote SUBJECT: Transportation network companies: participating drivers: penalties SOURCE: Author DIGEST: This bill requires a transportation network company (TNC) to conduct, or have a third party conduct, a local and national criminal background checks for each participating driver, that includes multistate and multijurisdiction criminal records locator. This bill prohibits a TNC from retaining a driver who is required by any law to register as a sex offender or has been convicted of any violent felony, or within the prior seven years has been convicted of any misdemeanor assault or battery, any domestic violence offense, or driving under the AB 1289 Page 2 influence of alcohol or drugs. This bill sets minimum and maximum fines for violating these requirements and exempts consumer report agencies from furnishing TNCs with currently prohibited non-conviction information of applicant drivers. ANALYSIS: Existing law: 1) Provides that the California Public Utilities Commission (CPUC) may fix rates and establish rules for the transportation of passengers and property by transportation companies, prohibit discrimination, and award reparation for the exaction of unreasonable, excessive, or discriminatory charges. (Article XII, §4 of the California Constitution) 2) Establishes the CPUC's authority to regulate, require license or permit to operate, require insurance and workers compensation, take appropriate enforcement action and other provisions related to passenger stage corporations and transportation charter-party carriers. (Public Utilities Code §§1031 et. seq. and 5351). 3) Defines a TNC as an organization, including, but not limited to, a corporation, limited-liability company, partnership, sole proprietor, or any other entity, operating in California that provides prearranged transportation services for compensation using an online-enabled application or platform to connect passengers with drivers using a personal vehicle. (Public Utilities Code §5431) 4) Requires the Department of Justice (DOJ) to maintain state summary criminal history information. (Penal Code §11105(a)) 5) Requires the DOJ to furnish state summary criminal history information to specified entities, if needed in the course of their duties, provided that when information is furnished to assist an agency, officer, or official of state or local government, a public utility, or any other entity in fulfilling employment, certification, or licensing duties, specified restrictions listed in the Labor Code are followed. (Penal Code §11105 (b)) 6) Allows the DOJ to furnish state summary criminal history AB 1289 Page 3 information to specified entities and, when specifically authorized, federal-level criminal history information, upon a showing of a compelling need, provided that when information is furnished to assist an agency, officer, or official of state or local government, a public utility, or any other entity in fulfilling employment, certification, or licensing duties, specified restrictions listed in the Labor Code are followed. (Penal Code §11105 (c)) 7) Authorizes any local criminal justice agency as defined to compile local summary criminal history information and requires the local criminal justice agency to furnish this information and requires the local criminal justice agency to furnish this information to any of the specified entities. (Penal Code §13300) 8) Defines violent felony to mean: murder or voluntary manslaughter, rape, a felony in which defendant inflicts great bodily injury, arson, kidnapping, attempted murder, carjacking, burglary of first degree, and several other offenses. (Penal Code §667.5 ) 9) Provides that an investigative consumer reporting agency shall only furnish an investigative report under the specified purpose including that it is intended to be used for information for employment purposes. (Civil Code §1786.12) 10)Prohibits a consumer reporting agency from furnishing specified items including records of arrest, indictment, information, misdemeanor complaint, or conviction of a crime that is more than seven years old. (Civil Code §1786.18 (7)(a)) This bill: 1) Requires a TNC to conduct, or have a third party conduct, a local and national criminal background check for each participating driver that includes both (1) multistate and multijurisdiction criminal records locator or other similar commercial nationwide database with validation and (2) a search of the United States Department of Justice National Sex Offender Public Website. AB 1289 Page 4 2) Prohibits a TNC from contracting, employing, or retaining a driver who is currently registered on the United States Department of Justice National Sex Offender Public Website, has been convicted of a violent felony, or, within the previous seven years, has been convicted of any misdemeanor assault or battery, any domestic violence offense, or driving under the influence of alcohol or drugs. 3) Provides that a TNC is not prevented from imposing additional standards beyond those mentioned in this bill. 4) Provides that a TNC that violates or fails to comply with these requirements is subject to a penalty of not less than one thousand dollars ($1,000) nor more than five thousand dollars ($5,000) for each offense. 5) Provides that an investigative consumer reporting agency may furnish an investigative consumer report to a TNC about a person seeking to become a participating driver, regardless of whether the participating driver is to be an employee or an independent contractor of the TNC. 6) Exempts an investigative consumer report furnished to a TNC from the requirements of current statute that prohibit the release non-conviction information. Background Criminal background check. A criminal background check is a search of confidential law enforcement databases which can be cross-referenced with a person's name, social security number or other personal identifier (also known as biometric identification). The cross-referencing and the biometric identification (such as a fingerprint) ensures that even if a person uses multiple names or another person in the database exists with the same name, the result of the search will be accurate. [Daus, Matthew W. and Pasqualino Russo. One Standard for All: Criminal Background Checks for Taxicab, For-hire, and Transportation Network Company Drivers. May 2015.] These background checks can be conducted by private vendors or directly by a government agency. The various types of criminal background checks range from a simplified name check to social security number check to a fingerprint check, or combination thereof, which is run through the Federal Bureau of AB 1289 Page 5 Investigations (FBI) database or through a state or local level law enforcement database. TNCs and criminal background checks. The recent growth and popularity of technology-enabled transportation ride-hailing services from companies like Lyft and Uber have raised questions about whether these services are adequately regulated to ensure public safety. A year ago, the LA Times found that at least four men who were ticketed by Los Angeles International Airport police while driving for a TNC have criminal convictions that would have barred them from operating a taxi - including convictions of child exploitation, manslaughter and identify theft. In August, district attorneys of Los Angeles and San Francisco filed amended complaints against the same TNC citing 25 instances they found of California drivers for this company with criminal records. Earlier this year, the district attorneys and the company reached a settlement agreement of $25 million of a lawsuit focused on consumer protection and public safety whereby the district attorneys accused the company of overstating its customer-safety policy in marketing materials. The company was originally claiming it has the "safest ride on the road" and described its background checks as "the gold standard." These are claims the company can no longer make. More recently, the City of LA sent the CPUC a letter requesting a pilot project on criminal background checks that would require finger print background checks. However, the CPUC declined. Varying requirements. The various types of transportation for-hire services (e.g., TNCs, limousines, taxi cabs) have varying regulations related to criminal background checks. Taxicab services are required to undergo extensive criminal background check requirements, including a LiveScan - fingerprint check - that is run through the FBI and other databases. Unlike taxicab services, TNCs are not required to perform fingerprint criminal background checks that use the United States Department of Justice FBI database. While the CPUC does require TNCs to perform criminal background checks on their drivers, fingerprinting is not required. Instead, TNCs contract with a third-party to run a namecheck background check which does not include the FBI database. However, the CPUC has stated its intention to address the issue of criminal background AB 1289 Page 6 checks in a third phase of its current proceeding related to TNC regulations and is currently soliciting public comments on whether fingerprinting should be required. The agency has also recently required fingerprint background checks via the TrustLine finger print check system for TNCs that serve unaccompanied minors and market themselves as chauffeuring services to take kids to school or afterschool activities. The TrustLine fingerprint check system searches federal and state law enforcement databases as is commonly used for professions that require interaction with children and minors, such as teachers, school volunteers, school bus drivers and others. Need for fingerprinting. While no one background check system is completely full-proof, a combination of name and social security checks with a biometric identifier, such as a fingerprint, would ensure the greatest level of accuracy, and therefore, the best protection of public safety and fairness to potential drivers. On June 22, the CPUC assigned commissioner issued a ruling seeking comments from parties and all interested stakeholders on whether the CPUC should require fingerprint-based background checks of TNC drivers. Moreover, the Senate Committee on Public Safety noted in its analysis: "Historically, this Committee [Public Safety] has not passed bills providing for background checks that are not fingerprint based. Name based checks are not as reliable as similar names exist and there is not check on the information." However, fingerprinting requires applicants to visit a police station or other channeling office in order to provide fingerprints that can be used to search in federal, state, and local law enforcement databases. The TNCs argue that such delay in hiring drivers could jeopardize their business model which relies on signing-up drivers fairly instantaneously via a phone application. The author's intent to enhance public safety can be strengthened by including language that would require the CPUC to assess the use of biometric, including fingerprint background checks, for TNCs and determine what type of background check should be required. As currently drafted, this bill does not include fingerprinting or other biometric requirements as part of a background check. AB 1289 Page 7 Prohibited offenses. This bill both expands and narrows the current list of convictions that can be used to prohibit TNCs from retaining an applicant-driver. Currently, the CPUC requires TNCs to conduct a criminal background check for each driver that uses the national criminal background check including the national sex offender database utilizing the applicant's social security number and not just the applicant's name. The CPUC also requires that any felony criminal conviction within the prior seven years would make the applicant-driver ineligible, specifically: driving under the influence of drugs or alcohol, fraud, use of a motor vehicle to commit a felony, a violent crime or act of terror, a sexual offense, a crime involving property damage, and/or theft. This bill expands the list by prohibiting TNCs from contracting, employing or retaining drivers who have been convicted of a violent felony regardless of the how long ago the offense occurred and adds misdemeanor assault and battery, domestic violence offense to those convictions occurring within the prior seven years. However, this bill also narrows the list of convictions which TNCs must consider by not including specified criminal convictions in this bill, including: fraud, acts of terror, use of a motor vehicle to commit a felony, a sexual offense, a crime involving property damage. Arrest records. According to the Senate Committee on Public Safety: When the DOJ releases a criminal history based on a fingerprint check it may not release arrest information unless and until they can make a determination as to the final disposition of the arrest. The DOJ process ensures that a record is not released if the charges were dropped, the wrong person was arrested, the person was acquitted or any other situation where an arrest should not be used against a person. However, non-fingerprint checks do not utilize the DOJ database, which as a result, do not stop a TNC from receiving an arrest record where an arrest AB 1289 Page 8 record should not be used against a person. Additionally, this bill creates an exception to the Civil Code provision prohibiting an investigative consumer reporting agency from furnishing specified items including records of arrest, indictment, information, misdemeanor complaint, or conviction of a crime that is more than seven years old. Prior/Related Legislation AB 2777 (Nazarian, 2016) would have allowed, but not require, a TNC to ask the DOJ to provide summary criminal history information for its employees and contractors. The bill failed passage on the Assembly floor. SB 1035 (Hueso, 2016) would have required, among other things, the CPUC to study several driver background check protocols, including the United States DOJ background check, and to adopt any for TNCs that would enhance public safety by capturing records of any criminal offense. The bill failed in Senate Committee on Transportation and Housing. AB 1422 (Cooper, Chapter 791, Statutes of 2015) required TNCs to participate in the Department of Motor Vehicles Pull Notice System to regularly check the driving records of participating drivers. FISCAL EFFECT: Appropriation: No Fiscal Com.:YesLocal: Yes SUPPORT: (Verified8/8/16) California Delivery Association Peace Officers Research Association of California San Diego International Airport AB 1289 Page 9 OPPOSITION: (Verified8/8/16) American Civil Liberties Union East Bay Community Law Center Legal Services for Prisoners with Children National Employment Law Project ARGUMENTS IN SUPPORT: According to the author, this bill seeks to improve the safety of consumers utilizing TNC services. AB 1289 "will assist TNCs uncover the complete criminal history of prospective drivers and will help ensure the safety of passengers utilizing TNC services." The San Diego Airport Authority in supporting this bill, states "the Airport Authority is continually seeking ways to enhance the safety of passengers and employees at San Diego International Airport. Accordingly, this bill could reduce the potential risk posed by drivers with criminal records to individuals utilizing TNCs to access the airport." ARGUMENTS IN OPPOSITION: Many of the opponents of this bill argue that background checks are known to contain errors which could wrongly deprive qualified applicants of economic opportunities. The opponents also argue that even if the information is true, past criminal convictions do not predict future behavior. Additionally, many of those opposed raised concerns about the lack of clarity regarding the list of offenses stated in this bill that would be used to filter potential drivers. ASSEMBLY FLOOR: 80-0, 6/1/15 AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Perea, Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Atkins AB 1289 Page 10 Prepared by:Nidia Bautista / E., U., & C. / (916) 651-4107 8/10/16 15:45:24 **** END ****