BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
SB 541 (Hill) - Public Utilities Commission: for-hire
transportation carriers: enforcement.
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|Version: May 5, 2015 |Policy Vote: E., U., & C. 10 - |
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|Urgency: No |Mandate: No |
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|Hearing Date: May 28, 2015 |Consultant: Marie Liu |
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SUSPENSE FILE. AS AMENDED.
Bill
Summary: SB 541 would make a number of changes to the
California Public Utilities (CPUC) oversight and enforcement of
for-hire transportation carriers.
Fiscal Impact (as approved on May 28,
2015):
One-time contract costs in the mid-hundreds of thousands
(special*) to develop an electronic permit program, a human
resources plan, an enforcement strategy, and a monitoring
protocol.
Unknown ongoing cost pressures, likely in the millions of
dollars, (special*) for a significant increase in positions
for additional enforcement and permitting.
* Public Utilities Transportation Reimbursement Account.
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Background: Existing law grants the CPUC the authority to regulate and
license or permit passenger state corporations and
transportation charter-party carriers. The commission is divided
into several divisions, including the Safety and Enforcement
Division which has the Transportation Enforcement Branch (TEB).
The TEB has authority over non-rail passenger carriers and
household goods movers (i.e. moving companies and vans). The
term "passenger carriers" is encompassing of several types of
carrier including passenger stage corporations, charter-party
carriers, and vessel common carriers. A passenger stage
corporation provides transportation services on a fixed route,
scheduled service or an on-call, door-to-door shuttle-type
services like airport shuttles. A transportation charter-party
carrier operates under the direction and control of their
chartering party and includes services such as tour buses and
limousines. Charter-party carriers also include transportation
network companies like Uber, Lyft, and Sidecar. And vessel
common carriers include commute and tourist ferry service such
as in the San Francisco Bay and service to Catalina Island.
According to the CPUC's January 2015 zero-based budget, there
are nearly 12,000 carriers under the CPUC's jurisdiction.
Carriers are required to pay a license fee to the CPUC, which
are deposited into the Public Utilities Transportation
Reimbursement Account, which funds CPUC's related regulatory
activities.
In June 2014, the California State Auditor released a report on
the CPUC's oversight of passenger carriers. Overall, the audit
concluded that, "The Transportation Enforcement Branch (branch)
of the California Public Utilities Commission (commission) does
not provide sufficient oversight of charter-party carriers and
passenger stage corporations (passenger carriers) to ensure
customer safety?the branch does not adequately ensure that such
passenger carriers comply with state law." The auditor cited 17
areas within the TEB's efforts that are lacking and merit
improvement including:
A lack of procedures for processing complaints.
Failure to complete investigations and issue corresponding
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citations in a timely manner.
Failure to conduct adequate investigations.
Inconsistency regarding collecting money from passenger
carriers for citations.
Not adequately overseeing accounting related to the branch.
Lack of managerial oversight, 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.
Limited efforts to implement an airport enforcement program at
other major airports.
Failure to ensure staff receive adequate training.
Proposed Law:
This bill would make a number of changes to the CPUC's
oversight of transportation carriers. Specifically, this bill
would:
Require 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 focus on staff development, management practices,
and leadership, including policies to adequately train and
retain employees.
Require 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.
Require 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. The strategy would be required to include
strike-force enforcement actions, a formal process to respond
to consumer complaints, and enforcement actions against
illegally operating passenger carriers.
Require 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. This bill would direct the CPUC to
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streamline the way carriers submit information, reports, and
applications. The CPUC would be required to ensure that the
staff of TEB are available by phone during normal business
hours to respond to questions.
Require the CPUC to meet annually with the industry
associations regulated by TEB to coordinate efforts to improve
customer service and enforcement.
Require 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.
Require the CPUC to report to the Legislature on
implementation by January 1, 2017, and by January 1,
thereafter.
Allow a peace officer to enforce Public Utilities Code related
to carriers, including the ability to arrest violators and
impound vehicles lacking proper certificates or permits.
"Peace officer" would be defined to include local city or
county police officer or sheriff, California Highway Patrol
officer, or airport law enforcement officer.
Direct 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.
Provide 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.
Staff
Comments: Aside from the bill provisions that expand the
persons who may enforce the Public Utilities Code, this bill is
largely requiring the CPUC to undertake activities that are
within its existing powers and authorities. However, as
illustrated by the state auditor's report, these existing powers
and authorities are not being utilized effectively.
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This year, the CPUC released a zero-based budget to the
Legislature. In respect to the TEB, the CPUC found that the
number of carriers overseen by the CPUC has increased by 224%
since 2001 while they have had a 36% decrease in staffing. The
average time to process license applications has increased and
is currently three months from docketing to issue date with a
large variance, partially due to the variable level of
application completeness. As part of the formulation of the
zero-based budget, the CPUC developed some performance measures
and is able to generate simple reports on the number of open
applications, license application process times, and other
factors. The CPUC also now has the ability to extract
performance metrics regarding enforcement as a result of actions
taken for the zero-based budget. The CPUC notes that it is
working with a 30 year-old information management system. While
the zero-based budget indicated that there are more needs in
licensing and enforcement in addition to the need for analysts
in the TEB, the zero-based budget failed to identify the
resources that the CPUC feels is necessary to properly
accomplish its mission in this area.
This bill, by requiring specific actions of the CPUC, has
brought forward budget needs that may be existing. However, as
this bill is making certain actions mandatory, these costs, at
least in part, are appropriately attributable to this bill,
especially the planning and IT activities. Specifically, the
CPUC believes it would need a one-time contract to develop the
human resources plan, monitoring program, and enforcement
strategy required under the bill plus one limited term position
to oversee the contract for an annual cost of $107,000, likely
for two years. Staff notes that normally such planning and
strategy development should be within a department's existing
capabilities as it is core to management. However, the CPUC
notes that the TEB currently only has one analyst position for
the entire branch, severely limiting its planning capabilities.
Therefore, the CPUC believes that contracting out this work with
a limited-term staff overseeing the contract is the most
efficient and effective way of developing the plans and
strategies required by this bill.
To fulfill the bill's requirement that the CPUC improve its
technology capabilities in order to improve customer service and
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the permit application process, the CPUC anticipates needing a
$500,000 information-technology contract that would be overseen
by a systems analyst or by a maintenance contractor for an
additional $100,000 in ongoing costs. The CPUC notes that it is
in the preliminary stages of implementing such an IT upgrade,
though no additional budget resources have been allocated for
this purpose at this time. This bill would make those IT costs
mandatory.
To implement the customer service and enforcement changes
prompted by this bill to accomplish requirements including
ensuring sufficient staff is available to answer phones during
business hours, performing strike-force enforcement actions, and
providing a written acknowledgement of all complaints, the CPUC
anticipates needing 38 new positions at an annual cost of $3.0
million, divided between customer service (8), licensing (5),
enforcement (20), and legal and supervisorial needs (5). While
the CPUC did not provide specifics on the workload assumptions
used to calculate these positions, staff believes it is
reasonable to assume that at least some of these positions would
be needed to reach the specific requirements of the bill.
However, the vast majority of these positions are likely needed
to achieve unspecified performance goals of the CPUC that would
be prompted by this bill, but are not necessarily required.
Therefore it is unclear how many of these positions are a result
of the required activities of the bill versus how many positions
are needed to make improvements identified by the zero-based
budget and audit.
Staff notes that the Public Utilities Transportation
Reimbursement Account currently has a reserve over $10 million.
As such, should this bill be passed, an increase in fees to
cover the additional costs imposed by this bill would not be
needed for several years.
Author amendments (as adopted on May 28, 2015): Amend to delete
the requirement for a human resources plan, a comprehensive
strategy, and a specific IT plan and instead require the CPUC to
have specific goals regarding customer service, application
processing, enforcement, and interaction with regulated parties.
Amendments would require the CPUC to assess its capabilities and
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make recommendations to overcome any staffing deficiencies to
reach the required goals in a report to the Legislature due on
January 1, 2017.
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