BILL ANALYSIS                                                                                                                                                                                                    Ó






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          |SENATE RULES COMMITTEE            |                       AB 1289|
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                                   THIRD READING 


          Bill No:  AB 1289
          Author:   Cooper (D)
          Amended:  8/19/16 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 check 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 specified list of felonies. This bill  
          sets minimum and maximum fines for violating these requirements  
          and exempts consumer report agencies from furnishing TNCs with  








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          currently prohibited non-conviction information of applicant  
          drivers.
          
          Senate Floor Amendments of 8/19/16 clarify, narrow and expand  
          the penal code violations that can be considered in assessing  
          whether a prospective driver can be hired, contracted with, or  
          retained by a TNC.
          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))







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           6) Allows the DOJ to furnish state summary criminal history  
             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  







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             Sex Offender Public Website. 

           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 any of a list of specified offenses,  
             including violent felony and acts of terror, or, within the  
             previous seven years, has been convicted of any misdemeanor  
             assault or battery, a domestic violence offense, driving  
             under the influence of alcohol or drugs, or any of a  
             specified list of felonies.

           3) Prohibits a TNC from contracting, employing, or retaining a  
             driver who has been convicted of an offense committed in  
             another jurisdiction that includes all of the elements of any  
             of the offenses specified in the bill.  

           4) Provides that a TNC is not prevented from imposing  
             additional standards beyond those mentioned in this bill. 

           5) 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. 

           6) 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. 

           7) 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  







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          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  
          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 -  







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          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  
          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 in its analysis noted: "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  







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          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.  





          Prohibited offenses.  This bill largely expands, but also  
          narrows, the CPUC's 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, adds misdemeanor assault and battery, domestic  
          violence offense to those convictions occurring within the prior  
          seven years, several bribery convictions, extortion, false  
          impersonation, larceny and other offenses .  However, this bill  
          also narrows the list of convictions which TNCs must consider by  
          not including specified criminal convictions in this bill,  
          including: fraud, use of a motor vehicle to commit a felony, a  
          sexual offense, and a crime involving property damage.





          Arrest records.  According to the Senate Committee on Public  
          Safety: 








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          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  
          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







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          SUPPORT:   (Verified8/8/16)


          California Delivery Association
          Peace Officers Research Association of California
          San Diego International Airport


          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,  







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            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

          Prepared by:Nidia Bautista / E., U., & C. / (916) 651-4107
          8/22/16 22:10:23


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