BILL ANALYSIS                                                                                                                                                                                                    Ó

          |SENATE RULES COMMITTEE            |                        SB 541|
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                                UNFINISHED BUSINESS 

          Bill No:  SB 541
          Author:   Hill (D)
          Amended:  9/3/15  
          Vote:     21  

           SENATE ENERGY, U. & C. COMMITTEE:  10-0, 4/27/15
           AYES:  Hueso, Fuller, Cannella, Hertzberg, Hill, Lara, Leyva,  
            McGuire, Morrell, Wolk
           NO VOTE RECORDED:  Pavley

           AYES:  Lara, Bates, Beall, Hill, Leyva, Mendoza, Nielsen

           SENATE FLOOR:  40-0, 6/3/15
           AYES:  Allen, Anderson, Bates, Beall, Berryhill, Block,  
            Cannella, De León, Fuller, Gaines, Galgiani, Glazer, Hall,  
            Hancock, Hernandez, Hertzberg, Hill, Hueso, Huff, Jackson,  
            Lara, Leno, Leyva, Liu, McGuire, Mendoza, Mitchell, Monning,  
            Moorlach, Morrell, Nguyen, Nielsen, Pan, Pavley, Roth, Runner,  
            Stone, Vidak, Wieckowski, Wolk

           ASSEMBLY FLOOR:  79-0, 9/8/15 - See last page for vote
           SUBJECT:   Public Utilities Commission: for-hire transportation  
                     carriers: enforcement

          SOURCE:    Author

          DIGEST:   This bill codifies recommendations from the State  
          Auditors report on strengthening the California Public Utilities  
          Commission (CPUC)'s oversight of transportation-related  
          activities of household good and charter-party carriers. This  
          bill requires the CPUC to hire an independent entity to assess  
          the agency's capabilities, in consultation with carrier trade  


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                                                                    Page  2

          associations, related to specific goals and report its findings  
          to the Legislature. This bill also expands enforcement authority  
          to other peace officers beyond just the California Highway  
          Patrol (CHP).

          Assembly Amendments (1) require the CPUC to hire an independent  
          entity to assess the capabilities of the agency to carry out the  
          specified activities and report to the Legislature , (2) clarify  
          the definition of peace officers referencing the existing Penal  
          Code, (3) narrow the vehicles law enforcement can impound to  
          buses and limousines of charter-party carriers and passenger  
          stage corporations when they are operating without required  
          permits or licensing, and (4) 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  


          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 et seq.).

          3)Establishes the CPUC's authority to regulate private carriers  
            of passengers (Public Utilities Code §4001) and household  
            goods carriers (Public Utilities Code §5101 et seq.) including  
            requiring public liability and property insurance, cargo  
            insurance, knowledge of rates, documentation, timely reporting  


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                                                                    Page  3

            of revenues and payment fees, and provides that the CPUC can  
            take appropriate enforcement action, etc. 

          4)Provides the 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 to hire an independent entity for not more  
            than $250,000 to assess the agency's capabilities to carry out  
            the specific activities related to household goods carriers  
            and to report to the Legislature no later than January 1,  

          2)Requires the CPUC to hire an independent entity for not more  
            than $250,000 to assess the agency's capabilities to carry out  
            the specific activities related to transportation  
            charter-party carriers and to report to the Legislature no  
            later than January 1, 2017.   

          3)Requires the CPUC to prioritize the timely processing of  
            applications of carriers, including enabling electronic filing  
            and fee payments, dedicating staff to answering inquiries,  
            implementing electronic case tracking of complaints and other  

          4)Authorizes a peace officer, as defined, to impound a bus or  
            limousine when the passenger stage coach or charter-party  
            carrier of passengers is not properly licensed or permitted. 

          5)Requires the CPUC to coordinate with peace officers likely to  
            be involved in enforcement, including conducting educational  
            outreach to promote awareness and establishing lines of  
            communication to allow the CPUC to enforce the fine and  
            penalty provisions. 

          6)Requires the CPUC to implement a process for appropriate and  
            timely enforcement against illegally operating carriers,  
            including performing staff-driven investigations and  


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                                                                    Page  4

            performing sting operations. 

          7)Provides that the Attorney General, a district attorney of the  
            proper county or city and county, or a city attorney may  
            institute and 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 or involving a charter-party carrier of  

          8)Exempts from the impoundment provisions of this bill privately  
            owned personal vehicles and charter-party carriers that are  
            not required to carry individual permits.


          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  

           Passenger Stage Corporations - 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 - 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 - 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. 


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           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 Transportation Enforcement Branch  
          (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. The  
          TEB's efforts are 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. 

           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 the fees it collects  
          from 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 lack of staff  
          training, a lack of procedures for processing complaints,  
          failure to complete investigations and issue citations in a  
          timely manner, and many others.  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. This bill codifies many of the  
          recommendations of the audit. 


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          FISCAL EFFECT:   Appropriation:    No          Fiscal  
          Com.:YesLocal:   No            

          According to the Assembly Appropriations Committee, this bill  
          will have an increased one-time cost of approximately $250,000  
          for the CPUC to assess the transportation program and submit an  
          evaluation report to the Legislature. 

          SUPPORT:   (Verified9/8/15)

          California Moving and Storage Association
          Greater California Livery Association 

          OPPOSITION:   (Verified9/8/15)

          None received

          ARGUMENTS IN SUPPORT:  The author states that the CPUC's TEB  
          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.

           ASSEMBLY FLOOR:  79-0, 9/8/15
           AYES:  Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom,  
            Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang,  
            Chau, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd,  
            Eggman, Frazier, Beth Gaines, Gallagher, Cristina Garcia,  
            Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray,  
            Grove, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones,  
            Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low,  
            Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin,  
            Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Perea,  
            Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago,  
            Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber,  
            Wilk, Williams, Wood, Atkins


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           NO VOTE RECORDED:  Chávez

          Prepared by:Nidia Bautista / E., U., & C. / (916) 651-4107
          9/8/15 22:02:39

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