BILL ANALYSIS Ó
SB 541
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Date of Hearing: July 14, 2015
Counsel: David Billingsley
ASSEMBLY COMMITTEE ON PUBLIC SAFETY
Bill Quirk, Chair
SB
541(Hill) - As Amended June 2, 2015
As Proposed to be Amended in Committee
SUMMARY: Codifies the State Auditor report's recommendations on
strengthening the California Public Utilities Commission's
(CPUC) oversight of transportation-related activities. Allows
peace officers to impound buses and limousines of specified
companies that carry passengers when they lack the required
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permits or licensing. Specifically, this bill:
1)Directs the CPUC to coordinate enforcement with peace
officers, including:
a) Education outreach to ensure that those peace officers
are aware of the transportation-related services, as
specified, and
b) Establishing lines of communications to ensure that the
CPUC is notified if an action is commenced so that CPUC can
take appropriate action to enforce the fine and penalty
provisions.
2)Authorizes the Attorney General, a district attorney, or a
city attorney to prosecute actions or proceedings for the
violation of any law committed in connection with a
transaction involving the transportation of household goods
and personal effects.
3)Requires the CPUC to establish the following goals related to
its existing authority to provide oversight and regulation of
transportation-related activities of household goods carriers
and Charter Party Carriers (CPC) and Passenger Stage
Corporations (PSC):
a) Prioritize the timely processing of applications and
hold "application workshops" for potential applicants
around the state;
b) Enable electronic filing of applications, reports, and
fee payments;
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c) Dedicate staff to answering telephone calls, mailings,
and electronic inquiries from carriers;
d) Prioritize the timely processing of consumer complaints;
e) Implement electronic case tracking of complaints and
their disposition;
f) Implement a process for appropriate and timely
enforcement against illegally operating carriers, including
by performing staff-driven investigations and performing
enforcement through sting operations and other forms of
presence in the field;
g) Maintain relationships with, and implement outreach and
education programs to local law enforcement, district
attorneys, and airports;
h) Meet with carrier trade associations at least annually;
and,
i) Implement a consolidated case tracking system that
integrates each of the transportation program core
functions and data collection, administrative compliance
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details, complaints, and investigations.
4)Requires the CPUC to assess its capabilities to carry out the
activities, specified in the goals, and report to the
Legislature with an analysis of current capabilities and
deficiencies, and recommendations to overcome any deficiencies
identified by January 1, 2017.
5)Allows peace office to impound a bus or limousine of a CPC or
PSC for 30 days if the officer determines that any of the
following violations occurred while the driver was operating
the vehicle of the charter-party carrier:
a) The driver was operating the bus or limousine of a CPC
or PSC when the charter-party carrier did not have a permit
or certificate issued by the CPUC;
b) The driver was operating the bus or limousine of a CPC
when the CPC or PSC was operating with a suspended permit
or certificate from the CPUC; or,
c) The driver was operating the bus or limousine of a CPC
or PSC without having a current and valid driver's license
of the proper class.
6)Allows a peace officer to impound a bus or limousine of a CPC
for 30 days if the officer determines that the driver was
operating the bus or limousine without a passenger vehicle
endorsement, or the required certificate.
7)Clarifies that impoundment provisions do not apply to
privately owned, personal vehicles, or to charter-party
carriers that are not required to carry individual permits.
EXISTING LAW:
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1)Authorizes the CPUC to regulate PSCs, through the issuance of
a certificate, require insurance and workers compensation, and
take appropriate enforcement actions and other provisions, as
specified. (Pub. Utilities Code, §§ 1031-1045.)
2)Specifies that "Passenger stage corporation" includes every
corporation or person engaged as a common carrier, for
compensation, between fixed termini (airport shuttles) or over
a regular route (buses). (Pub. Utilities Code, § 226.)
3)Directs the CPUC to issue permits or certificates to CPCs,
investigate complaints against carriers, cancel, revoke, or
suspend permits and certificates for specific violations.
(Public Utilities Code Section 5387.)
4)Defines "charter party carriers of passengers" as "every
person engaged in the transportation of person by motor
vehicle for compensation, whether in common or contract
carriage, over any public highway in the state." (Pub.
Utilities Code, § 5360.)
5)Authorizes the CPUC to regulate private carriers of
passengers, including requiring public liability and property
insurance, cargo insurance, knowledge of rates, documentation,
timely reporting of revenues and payment fees, and take
appropriate enforcement actions and other provisions, as
specified. (Pub. Utilities Code, §§ 4000-4022.)
6)Defines "private carrier" as not-for-hire motor carriers that
transports passengers and is required to obtain a carrier
identification number, as specified. (Pub. Utilities Code, §
4001.)
7)Authorizes the CPUC to regulate household goods carriers,
including requiring public liability and property insurance,
cargo insurance, knowledge of rates, documentation, timely
reporting of revenues and payment fees, and take appropriate
enforcement actions and other provisions, as specified. (Pub.
Utilities Code, §§ 5101-5335.)
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8)Defines "household goods carrier" as "every corporation or
person engaged in the transportation for compensation by means
of a motor vehicle being used in the transportation of used
household goods and personal effects over any public highway
in the state." (Pub. Utilities Code, § 5109.)
9)States that if a peace officer arrests a person for operating
a CPC without a valid permit or certificate, the officer may
impound the vehicle. (Pub. Utilities Code, § 5411.5, subd.
(a).)
10)States that if a peace officer arrests a person for operating
a CPC of passengers as a taxicab in violation of an ordinance
or resolution of a city, county, or city and county, the peace
officer may impound the vehicle. (Pub. Utilities Code, §
5411.5, subd. (b).)
11)Specifies that the operation of a motor vehicle used in the
business of transporting household goods and personal effects
that does not possess a valid permit or operating authority
may be removed from the highway by a peace officer. The peace
officer may impound the vehicle for up to 72 hours at the
request of the Public Utilities Commission, Attorney General,
district attorney, or county counsel. (Pub. Utilities Code, §
5133, subd. (c).)
12)Allows an officer of the Department of the California Highway
Patrol (CHP) to impound a bus of a charter-party carrier for
30 days if the officer determines that any of the following
violations occurred while the bus driver was operating the bus
of a charter-party carrier:
a) The driver was operating the bus of a charter-party
carrier when the charter-party carrier did not have a
permit or certificate issued by the Public Utilities
Commission; (Veh. Code, § 14602.9, subd. (a)(1), (Pub.
Utilities Code, § 5387, subd. (d).).)
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b) The driver was operating the bus of a charter-party
carrier when the charter-party carrier was operating the
bus with a suspended permit or certificate from the Public
Utilities Commission; or(Veh. Code, § 14602.9, subd.
(a)(2), (Pub. Utilities Code, § 5387, subd. (d).).)
c) The driver was operating the bus of a charter-party
carrier without having a current and valid driver's license
of the proper class, a passenger vehicle endorsement, or
the required certificate. (Veh. Code, § 14602.9, subd.
(a)(3) (Pub. Utilities Code, § 5387, subd. (d).).)
FISCAL EFFECT: Unknown.
COMMENTS:
1)Author's Statement: According to the author, "SB 541 improves
the functions of the Transportation Enforcement Branch ("the
branch") at the California Public Utilities Commission (CPUC)
to improve customer service and enforcement against illegally
operating charter-party carriers, passenger stage
corporations, and moving companies.
"In a 2014 report, the California State Auditor concluded that
the CPUC Transportation Enforcement Branch "does not provide
sufficient oversight of charter-party carriers and passenger
Stage Corporation (passenger carriers) to ensure consumer
safety." The Auditor found a multitude of problems including:
the branch has not established written guidelines for
processing consumer complaints, it takes the branch an average
of 238 days to complete an investigation and the branch does
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not conduct proper investigations, the branch does not know if
revenue is aligned with program activities, and the branch was
not aware of the significant fund surplus it had accumulated,
which at the time of the audit was over $9 million and has
since grown to $14 million.
"In addition, many carriers experience long delays when they
apply for carrier certificates and permits. Limousine
operators report that the CPUC frequently loses their permit
applications and no one answers the phone, nor responds
promptly to inquiries. One carrier told our office, 'we tried
calling the PUC on several occasion and at various times
throughout the working days in the months of June, July, and
December 2014 and January 2015 but no one answered. So we
emailed the licensing [division] but never got replies.'"
2)Background: California law regulates different modes of
passenger transportation for compensation, including taxi
services, which are regulated by cities and/or counties, as
well as CPCs and PSCs, which are regulated by the CPUC. The
division within the CPUC responsible to ensure that services
are delivered in a safe and reliable manner is the Safety and
Enforcement Division. The division is responsible for safety
oversight in specific industries, including electric, natural
gas, and telecommunications infrastructure; railroads, rail
crossings, and light rail transit system; passenger carriers,
ferries; and household goods carriers.
The Division is funded through a fee assessed on various types
of state-regulated vehicles, including passenger carriers.
The CPUC collects these fees from operators and deposits them
in the Transportation Reimbursement Account. The CPUC has set
the fee for passenger carriers that seat no more than 15
persons at 1/3 of 1 percent of their annual gross revenue,
plus a $10 quarterly fee or a $25 annual fee. The CPUC is
allowed to maintain an appropriate reserve in the account
based on past and projected operating experiences.
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3)Charter-Party Carriers (CPC): CPCs are services that charter
a vehicle, on a prearranged basis, for the exclusive use of an
individual or group. Charges are based on the mileage or time
of use, or a combination of both. The CPUC does not regulate
the level of charges for CPCs. Types of CPCs include limos,
tour buses, sightseeing services, and charter and party buses.
The CPUC requires CPCs to meet a number of requirements until an
operating permit or certificate is issued. These requirements
include providing sufficient proof of financial
responsibility, maintain a preventative maintenance program
for all vehicles, possessing a safety education and training
program, and regularly checking the driving records of all
persons operating vehicles used in transportation for
compensation. Taxis are excluded from the definition of CPCs
and are regulated by cities or counties.
4)Passenger Stage Corporations (PSC): PSCs are services that
provide transportation to the general public on an individual
fare basis, such as scheduled bus operators, which are buses
that operate on a fixed route and scheduled services, or
airport shuttles, which operate on an on-call door-to-door
share the ride service.
5)Private Carriers of Passengers and Household Good Carriers:
Private carriers of passengers are not-for-hire motor carriers
that do not receive any compensation for services and are
required to obtain a carrier identification number. Examples
of private carriers of passengers include vehicles used by
employers to transport employees or vehicles used by an
organization to transport members to and from a location.
Household good carriers are often referred to as moving
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companies which transports used household goods and personal
effects for residential moves. They may also conduct office
moves if granted a permit by the CPUC.
6)State Auditor Report: In June 2014, the California State
Auditor released a report examining the CPUC's Transportation
Enforcement Branch, within the Safety and Enforcement
Division, efforts to regulate passenger carriers, as well as
its use of fees collected from carriers. The report found
that the branch did not provide sufficient oversight of CPCs
and PSCs to ensure consumer safety.
The report made a number of recommendations to address problems
identified by the Auditor. This bill codifies these
recommendations by requiring the CPUC to establish specific
goals and assess its capabilities to achieve such goals, and
report to the Legislature with an analysis of current
capabilities and deficiencies, and recommendations to overcome
any deficiencies identified by January 1, 2017.
To improve enforcement of the branch, this bill authorizes
peace officers to help in the enforcement of
transportation-related services. The CPUC would coordinate
efforts with peace officers through educational outreach and
establishing lines of communication.
7)Proposed Committee Amendments: The proposed amendments
clarify that law enforcement can impound buses and limousines
of CPC's when they are operating without required permits.
The proposed amendments also allow law enforcement to impound
buses and limousines from PSC's operating without required
permits or licensing. The proposed amendments specify that
the language in this bill related to impoundment does not
authorize the impoundment of privately owned personal
vehicles, or the impoundment of charter-party carriers that
are not required to carry individual permits.
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8)Argument in Support: According to the California Moving and
Storage Association, "SB 541 improves the functions of the
transportation Enforcement branch at the California Public
Utilities Commission to improve customer service and
enforcement against illegally operating moving companies,
limousines and buses.
"In addition to regulating telecommunication companies and
investor owned energy utility companies, the CPUC has also
regulated various transportation services, including moving
companies, limousines and buses since the 1960's. The
Transportation Enforcement Branch is under the CPUC's Safety
and Enforcement Division and oversees the regulation of
transportation services with a staff of about 47.
"SB 41 helps implement audit recommendation and makes additional
legislative changes to improve the functions of the CPUC
Transportation Enforcement Branch.
"The CMSA feels very strongly that the most critical threat to
California consumers who are moving is not coming from
license, insured moving companies, but rather from a
significant amount of unlicensed, unregulated, illegal
companies that do not follow California law and jeopardize the
protection of consumers. We urge the CPUC Transportation and
Enforcement Branch to take appropriate action against unlawful
companies in California."
9)Related Legislation:
a) SB 697 (Hill), requires CPC vehicles to display a
distinctive identifying symbol, showing their
classification. SB 697 is pending hearing in the in
Assembly Appropriations Committee.
10)Prior Legislation:
a) AB 636 (Jones), Chapter 248, Statutes of 2009, requires
the CPUC to permanently revoke the authority of a
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charter-party carrier if the carrier knowingly employs a
non-licensed or inappropriately licensed driver, and allows
a CHP officer to impound the bus if driven by a
non-licensed driver.
REGISTERED SUPPORT / OPPOSITION:
Support
California Moving and Storage Association
Greater California Livery Association
Opposition
None
Analysis Prepared by:David Billingsley / PUB. S. / (916)
319-3744
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