BILL ANALYSIS                                                                                                                                                                                                    



                                                                     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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