BILL ANALYSIS Ó
SENATE COMMITTEE ON ENERGY, UTILITIES AND COMMUNICATIONS
Senator Ben Hueso, Chair
2015 - 2016 Regular
Bill No: SB 812 Hearing Date: 4/19/2016
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|Author: |Hill |
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|Version: |4/12/2016 As Amended |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant:|Nidia Bautista |
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SUBJECT: Charter-party carriers of passengers and passenger
stage corporations
DIGEST: This bill makes multiple changes to the California
Highway Patrol's (CHP) authority to inspect tour buses, with the
goal of increasing regulatory scrutiny of operators with poor
safety records. This bill also requires the California Public
Utilities Commission (CPUC) to monitor recalls of limousines and
buses, notify operators of the recalls that affect the safety of
the vehicle and suspend a license to operate if a recall has not
been addressed by the operator.
ANALYSIS:
Existing law:
1)Establishes the CPUC and empowers it to regulate privately
owned public utilities and common carriers in California.
(Article XII of the California Constitution; Public Utilities
Code §301 et seq.)
2)Defines passenger stage corporation as every corporation or
person engaged as a common carrier, for compensation, in the
ownership, control, operation, or management of any passenger
stage over any public highway in the state between fixed
termini or over a regular route, not including those
exclusively operating within a local jurisdiction or school
buses. Establishes the CPUC's authority to regulate, require
license or permit to operate, require vehicles used are in
safe operating condition, require insurance and workers
compensation, take appropriate enforcement action and other
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provisions related to passenger stage corporations. (Public
Utilities Code §§226 and 1031 et seq.)
3)Defines "charter-party carrier of passengers" as every person
engaged in the transportation of persons by motor vehicle for
compensation, whether in common or contract carriage, over any
public highway in the state and includes any person,
corporation, or other entity engaged in the provision of a
hired driver service when a rented motor vehicle is being
operated by a hired driver. Establishes the CPUC's authority
to regulate, require license or permit to operate, require
insurance and workers compensation, require vehicles are in
safe operating condition, take appropriate enforcement action
and other provisions related to charter-party carrier of
passengers. (Public Utilities Code §5351)
4)Establishes the CPUC's authority 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 provides that the CPUC can take appropriate enforcement
action, etc. (Public Utilities Code §4001)
5)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)
6)Provides that the Department of Motor Vehicles (DMV) shall
regulate the safe operation of buses, including tour buses,
and establish regulations regarding equipment and operations.
(Vehicle Code §34500 et seq.)
This bill:
1)Requires the CPUC to monitor the recall notifications of the
National Highway Traffic Safety Administration (NHTSA) related
to buses, limousines, and modified limousines operated by
passenger stage corporations and charter-party carriers in the
state.
a. Requires the CPUC to notify operators with affected
vehicles.
b. Prohibits operators from transporting passengers in
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vehicles subject to certain safety recalls until the
defect that prompted the recall has been corrected; and
c. Gives the CPUC the authority to order out of service
any vehicle operated by a passenger stage corporation or
a charter-party carrier that is subject to certain safety
recalls.
2)Requires the CPUC to suspend a certificate to operate for a
charter-party carrier or passenger stage corporation, pending
a CHP recommendation and a hearing in the matter, that
receives three consecutive unsatisfactory compliance ratings
for terminal inspections conducted by the CHP.
3)Authorizes the CHP to establish a new fee structure to offset
the cost of bus terminal inspections for charter party
carriers and passenger stage corporations, while maintaining
the existing statutory cap of $6,500 for each operating
carrier. Prohibits the revenues from the fees from being used
to supplant other sources of funding for any other inspection
program conducted by the CHP.
4)Modifies the CHP's existing terminal inspection program so
that terminals with a history of unsatisfactory ratings are
inspected more frequently than terminals with a record of
satisfactory performance.
a. Provides the CHP can inspect terminals with two or
more consecutive satisfactory ratings every 26 months as
oppose to every 13 months;
b. Requires the CHP to inspect terminals that receive
an unsatisfactory rating every six months until the
operator achieves a satisfactory rating; and
c. When a terminal receives an unsatisfactory rating in
a regular inspection, requires the CHP to conduct a
follow-up inspection within 30 days.
5)Augments the existing terminal inspection program by requiring
the CHP to conduct additional surprise inspections. The CHP
is directed to prioritize companies that have a history of
noncompliance for these inspections, and to ensure that at
least 10 percent of the inspections it conducts each year are
surprise inspections.
6)Requires the CHP to conduct a comprehensive review, in
consultation with the Office of Legislative Counsel and the
CPUC, of the statutes and regulations governing tour buses,
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and buses generally, in order to identify opportunities to
simplify and consolidate where appropriate. Requires the CHP
to provide a report for proposed changes to the policy
committees with responsibility for transportation matters
before January 2, 2018.
7)Modifies the CHP's existing terminal inspection program so
that terminals with a history of unsatisfactory ratings are
inspected more frequently than terminals with a record of
satisfactory performance. Specifically, this bill:
a. Allows the CHP to inspect terminals with two or more
consecutive satisfactory ratings every 26 months as
opposed to every 13 months;
b. Requires the CHP to inspect terminals that receive
an unsatisfactory rating every six months until the
operator achieves a satisfactory rating; and
c. When a terminal receives an unsatisfactory rating in
a regular inspection, requires the CHP to conduct a
follow-up inspection within 30 days.
8)Augments the existing terminal inspection program by requiring
the CHP to conduct additional surprise inspections. The CHP
is directed to prioritize companies that have a history of
noncompliance for these inspections, and to ensure that at
least 10 percent of the inspections it conducts each year are
surprise inspections.
9)Requires any operator that acquires a bus to have the vehicle
inspected by the CHP before it is used to transport
passengers, unless the bus is less than two years old.
10)Requires the CHP to order a bus out of service if it finds,
either during a terminal inspection or at some other time,
multiple safety violations that could constitute an imminent
threat to the public.
11)Effective January 1, 2018, requires passenger stage
corporations and charter party carriers to show proof of their
most recent bus terminal inspection to the DMV when renewing
the registration of any individual bus, and prohibits the DMV
from registering a bus if the operator has not attained a
satisfactory rating.
12)Requires the CHP to establish by January 1, 2018, a new
scaled fee structure for terminal inspections that retains the
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current maximum per-operator inspection fee.
13)Requires the CHP, in consultation with the CPUC and the
Office of the Legislative Counsel, to conduct a study of
existing statutes and regulations governing tour buses with
the goal of identifying opportunities to avoid duplication and
use terminology consistently. The CHP would be required to
report to the Legislature on its findings on or before January
1, 2018.
Background
On November 13, 2015, a City Sightseeing bus crashed into
construction scaffolding in San Francisco's Union Square
resulting in 19 people injured. The bus was originally used as
a transit vehicle and had been retrofitted as a double-decker
open-air tour bus before it was sold to City Sightseeing. The
CHP's investigation found the cause of the crash was driver
error, specifically driving at an unsafe speed. Post-crash
investigations revealed that City Sightseeing had not notified
the CPUC when it added the bus to its fleet, as required by law,
and the CHP identified other safety violations at the company in
a December 2015 terminal inspection. The CHP investigation also
noted that there was a recall notice issued in December 2010
that was applicable to the bus, although it did not contribute
to the accident. Specifically, the recall notice is related to
a fitting connected to the hydraulic pump in the engine
compartment.
As set forth in the Senate Transportation and Housing Committee
who heard this bill on April 5th:
Terminal inspections: What they do and what they don't do.
Buses must undergo frequent maintenance, which is why existing
law requires operators to perform their own safety checks and
routine repairs on every vehicle at least once every 45 days -
far more often than regulators could be called in for
inspections. There are also tradeoffs between the number of
buses that are checked in an inspection and the amount of notice
given to operators, on the one hand, and the impact to an
operator's service on the other. While the ideal inspection
program might involve surprise terminal visits in which all
buses are physically examined, this approach would severely
compromise an operator's ability to deliver reliable service to
paying customers. The current terminal inspection program
balances these tradeoffs by checking a subset of vehicles and
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examining terminal records to determine whether operators have
established systems that ensure that all of their vehicles are
safely maintained. One assumption underlying this approach is
that it would be extraordinarily difficult for operators to
persuasively "fake" correspondence between maintenance records
and actual under-the-hood conditions.
New fee structure. The existing terminal inspection fee of
$15/bus does not begin to cover the cost of inspections.
Depending on their operating authority, some bus companies may
not pay inspection fees at all. While matching fees to the true
cost of inspections could have a significant impact on
operators, raising the fees somewhat would at least relieve the
impact on the Motor Vehicle Account. This bill requires the CHP
to develop a new fee structure by regulation, taking into
account the costs to the state to operate the program and
preserving the $6,500 per terminal cap in existing law.
The case for a performance-based system. This bill aims to
change the terminal inspection program so that it prioritizes
for inspection operators with a record of safety-related
violations. Some of the bus companies that have been involved
in accidents in California were out of compliance with state
safety regulations, and these violations were either not
detected prior to the accident or were not corrected after
detection. For example, City Sightseeing had a record of
satisfactory ratings on terminal inspections prior to the
November 2015 accident, but in a surprise inspection following
the crash, the CHP found multiple serious violations in the
terminal. A 2013 bus crash near Pala, California, involved a
company that had received multiple "unsatisfactory" ratings in
terminal inspections in the three years leading up to the crash.
These examples suggest that some of the measures in this bill,
such as more frequent checks of poorly performing operators,
would increase the safety of bus travel.
Does the magnitude of the changes match the magnitude of the
problem? It is important to bear in mind, however, that bus
crashes are actually quite rare. In the year 2013, for example,
only 43 of 32,719 U.S. traffic fatalities (0.13 percent)
occurred in accidents involving a tour bus. In California, only
6.5 percent of traffic fatalities and serious injuries occur in
accidents involving commercial vehicles - a category that
includes trucks as well as several different types of buses.
When bus accidents do occur, mechanical failures or defects are
usually not the cause. It is also worth noting that the CHP's
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terminal inspection program is more comprehensive than its
counterparts in other states, and the existing program includes
performance-based elements. Specifically, if a terminal
inspection results in an unsatisfactory rating, the CHP returns
to that terminal within four months (120 days) for a follow-up
inspection. Inspections continue on this four-month interval
until the operator receives a satisfactory rating. With respect
to terminals that receive an unsatisfactory rating in an annual
inspection, this bill effectively replaces inspections every
four months until compliance is achieved with inspections every
one month until compliance is achieved, followed by inspections
every six months.
Alternative to inspection: loss of operating authority. One of
the primary ways this bill aims to make bus travel safer is by
requiring the CHP to conduct more vehicle and terminal
inspections than are required under existing law. Several
provisions of this bill either increase the number of
inspections that would be conducted under the CHP's existing
authority or require inspections to be conducted in
circumstances that do not trigger an inspection under current
law. These added inspections increase the cost of the
inspection program to the state. Revoking operating authority
from chronically noncompliant carriers is another way to protect
public safety that does not necessitate imposing additional
inspections. Amendments taken in Senate Transportation require
the CHP to recommend suspending an operator's license after it
receives three consecutive unsatisfactory ratings on terminal
inspections.
Showing proof of successful terminal inspection to renew DMV
registration. The provisions in this bill requiring operators
to show proof of a recent terminal inspection to the DMV in
order to renew the registration of their buses would not prevent
an operator from renewing the registration of an individual bus
that has not been properly registered with the CPUC. This
requirement only provides an additional incentive to operators
to obtain a satisfactory rating on their terminal inspections.
An operator will only be subject to this incentive in cases
where the registration renewal deadline for one of its vehicles
coincides with the interval between a failed terminal inspection
and a successful follow-up inspection. Both this bill and
existing law provide several more direct and consistent
penalties for operators who cannot obtain a satisfactory rating
SB 812 (Hill) Page 8 of ?
on a terminal inspection.
Two years between inspections for good performers? This bill
attempts to offset the expansion of inspections for poor
performers by providing relief from annual inspections to good
performers. Instead, terminal inspections would be required
once every 26 months for operators who receive two consecutive
satisfactory ratings on terminal inspections. This provision is
not without precedent: Until recently, the CHP permitted
property carriers with strong compliance records to bypass some
annual inspections by certifying their continued compliance with
state safety requirements. However, this relaxed inspection
option was not extended to carriers of hazardous materials,
suggesting that the state found it important to maintain annual
inspections for higher-risk cargo. Loosening the annual
inspection requirement for carriers who are responsible for the
safety of human passengers may be out of step with this
practice.
SEUC Comments:
A third kind of bus operator - the private carrier of
passengers. While this bill addresses recalls for buses and
limousines operating as charter-party carriers and passenger
stage corporations, there are other buses who register with the
CPUC as private carriers of passengers who could also benefit
from the notifications. These vehicles are registered to carry
passengers for purposes such as nonprofits, churches and others.
To the extent feasible the CPUC should also notify those
vehicles of any safety recall notices. The author and committee
may wish to amend this bill to require the CPUC to notify
private carriers of passengers of NHTSA vehicle safety recalls.
Decoding the code. Section 12 of this bill which requires the
CHP to work with the CPUC and Legislative Counsel to recommend
changes to simplify the statutes related to tour buses is a
worthy effort. However, the direction is better suited as
intent language. The author and committee may wish to amend
this bill to move Section 12 to intent language and include
language that provides the recommendations to both the policy
committees in each house related to transportation, including
the utilities committees overseeing the work of the CPUC.
Prior/Related Legislation
AB 1574 (Chiu) requires CPUC to verify with the DMV that the
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buses, limousines, and modified limousines used by a passenger
stage corporations or charter-party carriers have been reported
and meet safety requirements. AB 1574 passed out of the
Assembly Committee on Utilities and Commerce on March 30, 2016,
and is scheduled to be heard by the Assembly Committee on
Transportation Committee on April 18, 2016.
AB 1677 (Ting) requires the CHP to develop protocols for the
inspection of tour buses by local agencies.
SB 247 (Lara) requires charter buses to have specified emergency
equipment by July 1, 2017, including a secondary exit door, burn
resistant materials, event data recorder, and others. The bill
also requires charter bus drivers to instruct passengers of
locations and operations of emergency exits and the use of seat
belts prior to the beginning of a trip and provide these
instructions in writing.
FISCAL EFFECT: Appropriation: No Fiscal
Com.: Yes Local: Yes
SUPPORT:
California Bus Association, if amended
City and County of San Francisco
OPPOSITION:
None received
ARGUMENTS IN SUPPORT: The author states: "SB 812 puts forward
common sense policies to improve the safety of tour buses driven
in California. Since 1986, the CHP has had a program in place
to inspect the safety of tour buses in the state. Since the
inception of the program the CHP has inspected thousands of
buses and caught many mechanical problems. There are components
of the inspection program, however, that need to be updated and
strengthened, which SB 812 seeks to do. This bill will increase
the number of surprise, un-announced tour bus inspections, will
shorten the amount of time a bus operator has to fix safety
problems, and will implement a risk-based inspection methodology
so tour bus operators with a history of unsatisfactory ratings
will be inspected more often, meaning the CHP will focus more of
their efforts and limited resources on problematic and unsafe
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bus operators. Lastly, SB 812 increases state oversight of
recalled limousines and buses."
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