BILL ANALYSIS                                                                                                                                                                                                    

                                                                    AB 2777

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          Date of Hearing:   May 11, 2016


                               Lorena Gonzalez, Chair

          2777 (Nazarian) - As Amended April 28, 2016

          |Policy       |Public Safety                  |Vote:|7 - 0        |
          |Committee:   |                               |     |             |
          |             |                               |     |             |
          |             |                               |     |             |
          |             |Utilities and Commerce         |     |8 - 3        |
          |             |                               |     |             |
          |             |                               |     |             |

          Urgency:  No  State Mandated Local Program:  YesReimbursable:   


          This bill requires the Department of Justice (DOJ), upon request  
          of a Transportation Network Company (TNC), to provide a TNC with  
          the state criminal history and arrest information of its  
          employees and contractors.  This bill provides DOJ with fee  


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          FISCAL EFFECT:

          Fully reimbursable cost in the $3.2 million range if all TNCs  
          request criminal background checks for about 100,000 employees  
          and DOJ charges the usual $32 for background checks.  
          (Fingerprint Fees Account) 


          1)Purpose.  According to the author, incidents of crimes against  
            passengers point to the need to allow TNCs to request a DOJ  
            background check. This bill gives TNCs another tool in its  
            toolbox to uncover criminal history not discovered through  
            traditional methods, prevent fraud and enhance its goal of  
            providing safe and reliable service.

          2)Background.  Beginning as early as 2009, a new model of  
            transportation known as TNCs allowed patrons to prearrange  
            transportation services through an online application on their  
            smartphone or computer.  Although TNCs do not neatly fall into  
            the conventional definition of a charter party carriers  
            (CPCs), the California Public Utilities Commission (PUC)  
            believes that TNCs are currently providing passengers  
            transportation for compensation, and reasonably concludes that  
            TNCs are CPCs, therefore, falling under the CPUC's existing  
            jurisdiction over such services. 

          3)Criminal Background Checks:  CPUC regulations require TNCs to  
            run criminal background checks on all hired drivers, but it  
            does not specify the parameters for which TNCs must go about  
            doing these background checks.  As such, TNCs generally  
            contract with third party firms that they argue provide a more  
            comprehensive review necessary to ensure passenger safety.   
            For example, Uber argues that its background screening process  


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            checks primary sources and court records going back seven  
            years, in addition to other national databases.

            However, news reports continue to identify situations in which  
            TNC drivers have been accused of criminal situations such as  
            rape, assault, kidnapping, among others.  The CPUC currently  
            has a pending rulemaking process examining TNC regulations,  
            including whether or not to require fingerprints as part of  
            the TNC background checks.

          4)Support.  According to the California Labor Federation, " A  
            2015 report by researchers at City University of New York  
            recommended biometric fingerprint background checks for all  
            for-hire drivers, including TNCs, and that the public should  
            not rely on private companies 'self-regulating.'"

          5)Opposition.  According to the Internet Association and  
            TechNet, the proposed authorization is premature as the PUC  
            has already stated their intent to examine background checks  
            in Phase III of their TNC rulemaking process.

          6)Related Legislation:  

             a)   AB 1289 (Cooper) was substantially amended in the Senate  
               to require a TNC to conduct comprehensive criminal  
               background checks for each participating driver that  
               include local, state, and federal law enforcement records.  
               The bill would prohibit a transportation network company  
               from contracting with, employing, or continuing to retain a  
               driver if he or she has specified convictions.  AB 1289 is  
               pending in the Senate Energy, Utilities and Communications  


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             b)   SB 1035 (Hueso), requires, among other things, the PUC  
               to study several driver background check protocols,  
               including the United States Department of Justice  
               background check, and to adopt any that would enhance  
               public safety by capturing records of any criminal offense.  
                SB 1035 failed passage in Senate Transportation and  
               Housing Committee.  

          1)Prior Legislation:  

             a)   AB 1422 (Cooper), Chapter 791, Statutes of 2015,  
               requires transportation network companies to participate in  
               the Department of Motor Vehicles Employer Pull Notice  
               System to regularly check the driving records of a  
               participating driver.  

             b)   AB 2404 (Eggman), Chapter 472, Statutes of 2014,  
               requires the DOJ to disseminate an applicant's sex offender  
               registration status whenever DOJ furnishes state or federal  
               summary criminal history information to specified entities  
               as a result of an employment, licensing, or certification  

             c)   AB 2343 (Torres), Chapter 256, Statutes of 2012,  
               requires that when state or federal summary criminal  
               history information is furnished to an agency, organization  
               or individual, a copy of the information be provided to the  
               person about whom the information relates if there is an  
               adverse employment, licensing, or certification decision.

          Analysis Prepared by:Pedro Reyes / APPR. / (916)  


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