BILL ANALYSIS Ó
SENATE COMMITTEE ON ENERGY, UTILITIES AND COMMUNICATIONS
Senator Ben Hueso, Chair
2015 - 2016 Regular
Bill No: SB 541 Hearing Date: 4/27/2015
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|Author: |Hill |
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|Version: |4/6/2015 As Amended |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant:|Nidia Bautista |
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SUBJECT: Public Utilities Commission: for-hire transportation
carriers: enforcement
DIGEST: This bill proposes a suite of requirements of the
California Public Utilities Commission (CPUC) in an effort to
strengthen the agency's overall program and enforcement of
for-hire transportation carriers. The bill also expands
enforcement authority to other peace officers in addition to the
California Highway Patrol.
ANALYSIS:
Existing law:
1) Establishes the CPUC with five members appointed by the
governor and confirmed by the Senate and empowers it to
regulate privately owned public utilities and common
carriers in California. Specifies that the Legislature may
prescribe that additional classes of private corporations or
other persons are public utilities. (Article XII of the
California Constitution; Public Utilities Code §301 et seq.)
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. (Public
Utilities Code §1031 et seq) and transportation
charter-party carriers (Public Utilities Code §5351).
3) Establishes the CPUC's authority to regulate private
carriers of passengers (Public Utilities Code §4001) and
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household goods carriers (Public Utilities Code §5101)
including requiring public liability and property insurance,
cargo insurance, knowledge of rates, documentation, timely
reporting of revenues and payment fees, and provides that
the CPUC can take appropriate enforcement action, etc.
4) Provides the California Highway Patrol (CHP) with the
ability to take enforcement action related to requirements
of buses of charter-party carriers as required by the Public
Utilities Code, including ensuring a proper and current
license or permit from the CPUC. (Vehicle Code §14602.9)
This bill:
1) Requires the CPUC, in consultation with the Department of
Human Resources, to develop a comprehensive human resources
plan for the TEB of the CPUC's Safety and Enforcement
Division. The plan shall focuses on staff development,
management practices, and leadership, including policies to
adequately train and retain employees.
2) Requires the CPUC to implement a program to monitor the
performance of the TEB, including tracking the timeliness in
resolving applications for permits and certificates and
ensuring appropriate enforcement actions.
3) Requires the CPUC to develop a comprehensive strategy to
detect, deter, and take enforcement actions against
charter-party carriers of passengers, passenger stage
corporations, and household goods carriers that are
operating illegally. Directs the CPUC to coordinate these
activities with state and local law enforcement, where
possible. Details several strategies, including the use of
strike-force enforcement at special events, a formal
complaints process, enforcement actions for illegally
operating carriers, coordination with relevant state
agencies, and other strategies.
4) Requires the CPUC to develop and implement a plan to
improve technology capabilities to enhance customer service
at the TEB that facilitate complete online application and
renewal, vehicle registration, vehicle insurance compliance
and consumer complaints. Directs the CPUC to streamline the
way carriers submit information, reports, and applications.
Requires CPUC to ensure that staff of TEB are available by
phone during normal business hours to respond to questions.
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5) Requires the CPUC to meet annually with the industry
associations regulated by TEB to coordinate efforts to
improve customer service and enforcement.
6) Requires the CPUC to develop a budget plan for the TEB to
ensure that revenues and expenditures are appropriately
aligned, with detailed information regarding categorizing
revenues and expenditures by carrier type and enforcement
activities.
7) Requires the CPUC to report to the Legislature on
implementation by January 1, 2017, and by January 1,
thereafter.
8) Defines a peace officer to include local city or county
police officer or sheriff, CHP officer, or airport law
enforcement officer. Provides that peace officers, as
defined, can enforce Public Utilities Code related to
carriers, including the ability to arrest violators and
impound vehicles lacking proper certificates or permits.
9) Directs the CPUC to coordinate enforcement with those
peace officers by providing educational outreach and
establishing lines of communication to ensure the CPUC is
notified if enforcement actions have commenced.
10) Provides that peace officers, as defined, can assist in
enforcement cases related to provisions regarding carriers
in Public Utilities Code which are executed by the Attorney
General, a district attorney, or city attorney.
Background
Since its inception in 1911 (then as the Railroad Commission),
the CPUC has regulated private companies and individuals that
own, operate, control or manage transportation of people and
property. Until 1995, with passage of federal trucking
deregulation laws, the CPUC licensed and regulated many types of
carriers transporting commodities over public highways within
California. Currently, the CPUC's remaining authority is limited
to non-rail passenger carriers and household goods movers. Under
state law, the CPUC is required to license carriers, and
investigate and enforce safety and consumer protection laws for
the following surface transportation carriers:
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Passenger Stage Corporations (PSCs) - for-hire carriers
transporting passengers over public highways on an
individual-fare basis. Examples include: Greyhound bus service
and airport shuttles.
Transportation Charter-Party Carriers (TCPs) - operate under the
direction and control of their chartering party that arranges
the transportation, on a prearranged basis. Examples include
tour buses, limousines, and transportation network companies,
including Uber, Lyft, and Sidecar.
Private Carriers of Passengers (PCPs) - includes not-for-hire
motor carrier transporting passengers in buses (vehicles seating
10 or more) that are required to obtain a "CA number" from CHP.
Household Goods Carriers - includes for-hire moving companies.
The work to license, enforce and ensure safety of these carriers
is done through the CPUC's TEB within the Safety and Enforcement
Division with approximately 45 authorized staff positions. The
CPUC is responsible for issuing operating permits and
certificates (operating authority) to qualified applicants for
authority to operate as passenger stage corporations,
charter-party carriers of passengers, and household goods
carriers, and for denying, suspending and revoking operating
authorities of such carriers that fail to meet statutory and
regulatory requirements. This work is performed by the
Transportation License Section, the Transportation and
Enforcement Section. The 45 authorized staff positions in TEB
are spread evenly between licensing (14 staff), enforcement
section-north (15 staff) and enforcement section-south (15
staff).
Type of Carrier No. Permitted
Charter-party carriers of passengers8,942
Private carrier of passengers 1,310
Household goods carriers 1,077
Passenger stage corporations 262
In response to a request by the Joint Legislative Budget
Committee, the State Auditor developed and released a report in
June 2014 concerning the CPUC's TEB's efforts to regulate
passenger carriers, as well as its use of fees it collects from
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these carriers. The report concluded that the "branch does not
adequately ensure that passenger carriers comply with state
law." The Auditor's report cited 17 areas within TEB's efforts
that are lacking and merit improvement, including:
A lack of procedures for processing complaints.
Failure to complete investigations and issue
corresponding citations in a timely manner.
Failure to conduct adequate investigations.
Imposing penalties for lower amounts than state law
allows.
Inconsistency regarding collecting money from passenger
carriers for citations.
Not adequately overseeing accounting related to the
branch.
Not ensuring that passenger carrier fee payments are
adequate.
Not aligning revenues and expenditures associated with
passenger carriers as state law requires.
Lack of managerial oversigh, which led to incorrect
funding of transportation enforcement positions.
Incorrectly funded and used positions authorized in the
state budget for enforcement of passenger carriers at
airports.
Failure to use the new positions for airport enforcement
as the legislature intended.
Limited efforts to implement an airport enforcement
program at other major airports.
Lack of internal controls and high turnover have led to
inadequate enforcement across the state.
Leadership within the branch has been lacking.
High management turnover for several years.
Failure to ensure staff receive adequate training.
Unprepared to handle additional responsibilities.
The Auditor's report also provided a series of recommendations
to address the many failures and shortcomings and to improve the
TEB's efforts to ensure carrier and public safety. The
recommendations include:
Develop policies and procedures for receiving complaints
and investigating passenger carriers, ensuring all
complaints are entered into a database.
Establish a method for prioritizing complaints and
implement a policy specifying the maximum amount of time
between the receipt of a complaint and the completion of
the subsequent investigation.
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Require the TEB management to monitor and report
regularly on its performance to the CPUC agency management
and commissioners.
Establish standards specifying the types of evidence
that CPUC considers sufficient to determine whether a
carrier is operating legally.
Implement a policy that directs investigators to obtain
sufficient evidence to justify determinations.
Require investigators to review passenger carriers for
compliance with each state law relating to passenger
carrier requirements.
Implement a formal training program to ensure that all
investigators have adequate knowledge and skills related to
regulating passenger carriers.
Create a system to determine when a carrier merits a
penalty and the magnitude of the penalty and ensure it is
more consistent with what state law permits.
And several other recommendations.
Is the CPUC the Right Agency to Regulate Transportation-Related
Efforts? - In consideration of the many challenges the agency is
facing, the question must be raised as to whether the CPUC is
the right state agency to oversee transportation-related
efforts. After federal deregulation of trucking, the CPUC's
corresponding staffing and resources, including investigators,
were largely eliminated. Today, the CPUC is struggling to keep
up with existing demands, as well as new challenges that have
emerged, such as addressing transportation network companies,
like Uber, Lyft and Sidecar. Moving the transportation-related
efforts at the CPUC may be limited by constitutional
requirements. However, the legislature may wish to more deeply
explore the question with other relevant legislative committees
and agencies.
Is a bill needed? - The CPUC already has authority to institute
the recommendations in the Auditor's report and most of the
proposals in this bill. In response to the Auditor's report, the
CPUC acknowledged its agreement with many of the findings and
recommendations. The agency is taking action to respond to the
recommendations, such as developing a strategic plan for the
branch and others. However, the agency still has a long way to
go. Therefore, additional direction from the legislature is
warranted, particularly related to reporting on its performance.
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Do the agencies have the right tools? - Expanding authority for
enforcement to include local law enforcement authorities makes a
lot sense in theory. However, there are currently technological
challenges to provide the CHP the ability to ensure the most
current information regarding the status of CPUC permit or
license. More work is needed, much of which is detailed in SB
541, to provide all the necessary agencies the appropriate tools
to conduct appropriate enforcement.
Reporting to the Legislature - The CPUC is already required to
provide an annual report to the Legislature by February 1st of
each year. The author and committee may wish to amend the bill
to align the reporting requirements with the annual report
deadline, February 1st of each year.
FISCAL EFFECT: Appropriation: No Fiscal
Com.: Yes Local: No
SUPPORT:
Greater California Livery Association
OPPOSITION:
None received
ARGUMENTS IN SUPPORT:
The author states that the CPUC's Transportation Enforcement
Branch requires further direction from the Legislature to
improve its functions. SB 541 is a proposal to ensure the CPUC
is focusing its efforts appropriately to ensure safety and
improved customer service and enforcement of illegally operating
limousines, buses, and moving companies.
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