BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 2790


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          ASSEMBLY THIRD READING


          AB  
          2790 (Nazarian)


          As Amended  April 13, 2016


          Majority vote


           ------------------------------------------------------------------ 
          |Committee       |Votes|Ayes                  |Noes                |
          |                |     |                      |                    |
          |                |     |                      |                    |
          |                |     |                      |                    |
          |----------------+-----+----------------------+--------------------|
          |Business &      |12-2 |Salas, Brough, Bloom, |Gatto, Jones        |
          |Professions     |     |Campos, Chávez,       |                    |
          |                |     |Dahle, Dodd, Gomez,   |                    |
          |                |     |Holden, Mullin, Ting, |                    |
          |                |     |Wood                  |                    |
          |                |     |                      |                    |
          |----------------+-----+----------------------+--------------------|
          |Transportation  |14-0 |Frazier, Linder,      |                    |
          |                |     |Baker, Bloom, Brown,  |                    |
          |                |     |Chu, Daly, Dodd,      |                    |
          |                |     |Gomez, Kim, Mathis,   |                    |
          |                |     |Medina, Nazarian,     |                    |
          |                |     |O'Donnell             |                    |
          |                |     |                      |                    |
          |----------------+-----+----------------------+--------------------|
          |Appropriations  |18-0 |Gonzalez, Bigelow,    |                    |
          |                |     |Bloom, Bonilla,       |                    |
          |                |     |Bonta, Calderon,      |                    |
          |                |     |Chang, Daly, Eggman,  |                    |
          |                |     |Gallagher, Eduardo    |                    |








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          |                |     |Garcia, Roger         |                    |
          |                |     |Hernández, Holden,    |                    |
          |                |     |Obernolte, Quirk,     |                    |
          |                |     |Santiago, Weber, Wood |                    |
          |                |     |                      |                    |
          |                |     |                      |                    |
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          SUMMARY:  Requires the California Research Bureau (CRB) conduct  
          a study, on or before September 1, 2017, on the necessity and  
          feasibility of licensure for taxicab drivers.


          FISCAL EFFECT:  According to the Assembly Appropriations  
          Committee, "negligible state fiscal impact.  CRB prepares  
          reports for members of the Legislature upon request."


          COMMENTS:


          Purpose.  This bill will require the CRB to conduct a study  
          regarding the necessity and feasibility of licensure for taxi  
          cab drivers.  This bill is author sponsored.  According to the  
          author, "unlike other drivers and professions, taxi cab drivers  
          face overlapping licensure requirements.  Overall, [this bill]  
          simplifies the licensure of the taxicab profession, protects  
          consumers and ensures a competent and fair marketplace for  
          taxicab professionals by creating the [Commission], under the  
          [DCA]."


          Taxicab Regulation and Local Control.  Under current law,  
          taxicab businesses and taxicab drivers are regulated through  
          various local ordinances.  Each local jurisdiction can and does  
          create its own requirements for taxis to operate, unlike other  
          models of passenger carriers, who are regulated under one  
          statewide requirement, established by the Public Utilities  








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          Commission (PUC).  Government Code Section 53075.5 requires  
          cities and counties to protect the public health, safety, and  
          welfare by adopting an ordinance or resolution in regard to  
          taxicab transportation services.  Each ordinance or resolution  
          must include a policy for entry into the business of providing  
          taxicab services, the establishment or registration of rates,  
          and a mandatory controlled substance and alcohol testing  
          certification program.  


          Local jurisdictions may include additional requirements for  
          taxicab businesses and drivers, many of which do.  The San  
          Francisco Municipal Transportation Agency requires taxicab  
          drivers to be a legal resident, maintain personal hygiene, be  
          free of disease, possess a current California driver's license,  
          be 21 years of age, speak, read and write the English language,  
          get fingerprinted, attend and complete a taxi school training  
          program, have an offer from a taxi company to drive and pay an  
          application fee, among others.  In the City of Los Angeles, an  
          applicant for a taxicab driver license, must be sponsored by one  
          of LA City's franchised taxicab companies, provide a driving  
          history record, pass an examination, and pay a fee.  


          According to information obtained from the Senate Energy,  
          Utilities, and Communications Committee and the Senate  
          Transportation and Housing Committee background paper for their  
          February 17, 2016 joint informational oversight hearing,  
          Ride-hailing Disruption:  Establishing a Level Playing Field in  
          the Transportation-for-hire Market, "Taxicab Service Unlike  
          services regulated and licensed by the [PUC], taxicab service in  
          California is regulated by cities and counties.  Taxis are the  
          only transportation for-hire service explicitly allowed to pick  
          up passengers via a street hail.  Taxicab owners, fleets, and  
          drivers are often subjected to extensive regulations,  
          particularly in large cities, and generally less extensive  
          regulations in mid-sized and smaller cities.  Therefore, the  
          range of regulations varies across jurisdictions, including  
          among neighboring cities.  In general, taxi fares are regulated.  








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           Additionally, cities often cap the number of taxis to protect  
          against an oversupply that could result in excessive competition  
          that undermines public safety with unsafe vehicles, drivers, and  
          driving practices? The cities and counties restrict the number  
          of taxis by limiting the supply of permits, or medallions (named  
          for the metal ornament affixed to the vehicle)."


          Other Vehicle Transportation Service Providers.  California law  
          regulates different modes of passenger transportation for  
          compensation, in addition to taxi services, which are regulated  
          at the local level; there are charter-party carriers and  
          passenger stage corporations, and transportation network  
          companies (TNCs).  TNC's are defined 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, as specified in the Public Utilities Code Section  
          5431(a).  The license to operate ride-hailing services has been  
          provided at the state level by the PUC, whereas taxis are  
          permitted exclusively by individual local cities and counties.  


          Occupational Licensing.  The issue of occupational licensing and  
          its impacts on the ability to enter the labor market and  
          mobility within have been raised at both the state and federal  
          level.  Currently, The Little Hoover Commission, which is a  
          statutorily created independent agency that conducts research  
          studies about state government operations, is currently in the  
          process of conducting a study on occupational licensing.  The  
          study will partly explore the impact of occupational licensing  
          on upward mobility for various groups, as well as the effect of  
          licensing regulations on consumers and the economy.  The Little  
          Hoover Commission's study will have a broad policy perspective,  
          and will not place emphasis on licensing testing, education, and  
          other requirements for specific professions.  









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          Analysis Prepared by:                                             
                          Elissa Silva / B. & P. / (916) 319-3301  FN:  
          0003162