BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 812| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: SB 812 Author: Hill (D), et al. Amended: 5/31/16 Vote: 21 SENATE TRANS. & HOUSING COMMITTEE: 10-0, 4/5/16 AYES: Beall, Cannella, Allen, Bates, Galgiani, Leyva, McGuire, Mendoza, Roth, Wieckowski NO VOTE RECORDED: Gaines SENATE ENERGY, U. & C. COMMITTEE: 11-0, 4/19/16 AYES: Hueso, Morrell, Cannella, Gaines, Hertzberg, Hill, Lara, Leyva, McGuire, Pavley, Wolk SENATE APPROPRIATIONS COMMITTEE: 7-0, 5/27/16 AYES: Lara, Bates, Beall, Hill, McGuire, Mendoza, Nielsen SUBJECT: Charter-party carriers of passengers: passenger stage corporations SOURCE: Author 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 increases state oversight of recalled limousines and buses. ANALYSIS: Existing law: SB 812 Page 2 1) Requires that charter-party carriers of passengers and passenger stage corporations: a) Obtain a permit from the California Public Utilities Commission (CPUC); b) Register all individual buses with the CPUC; c) Conduct safety inspections on each of their buses at least every 45 days; d) Correct any defects that are found during an inspection before transporting passengers; and e) Keep detailed records of inspections and repairs performed. 2) Requires the CHP to: a) Conduct annual terminal inspections on a representative subset of each carrier's buses and records to verify that buses are being maintained in accordance with the law. For carriers with fewer than 100 buses, inspections are scheduled. For carriers with more than 100 buses, inspections are not scheduled in advance. b) Collect a fee of $15 per bus (not to exceed $6,500 total) to offset the cost of terminal inspections of charter party carriers. These fees are deposited in the state Motor Vehicle Account. c) Reinspect, within 120 days, any terminal that receives an "unsatisfactory" rating in an inspection. 3) Authorizes the CHP to recommend that the CPUC suspend a carrier's operating authority when the CHP finds violations at a terminal that constitute an imminent threat to public safety or a consistent failure to comply with regulations. 4) Requires the CPUC to follow the CHP's recommendation, pending a hearing. This bill: SB 812 Page 3 1) 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; c) When a terminal receives an unsatisfactory rating in a regular inspection, requires the CHP to conduct a follow-up inspection within 30 days; and d) Requires any operator that is being inspected every six months and acquires a bus that is more than two years old to have the vehicle inspected by the CHP before it is used to transport passengers. 2) Requires the CPUC to suspend the operating license of a passenger stage corporation or charter party carrier of passengers that receives an unsatisfactory rating in three consecutive terminal inspections, pending a hearing. 3) 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% of the inspections it conducts each year are surprise inspections. 4) 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. 5) Requires the CHP to establish by January 1, 2018, a new scaled fee structure for terminal inspections that retains the current maximum per-operator inspection fee. 6) Requires the CHP, in consultation with the CPUC and the SB 812 Page 4 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. Comments 1) Purpose. According to the author, "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. The 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 bus operators. Lastly, SB 812 increases state oversight of recalled limousines and buses." 2) What's covered? This bill deals with bus transportation by charter party carriers and passenger stage corporations. It does not affect school buses or public transit buses. A bus is defined as a vehicle designed to carry more than 10 people, including the driver. Charter party carriers transport passengers traveling under a single contract for a fixed fee. Passenger stage corporations transport passengers over a fixed route between regular termini. 3) Background: San Francisco tour bus accident. On November 13, 2015, 19 people were injured when a City Sightseeing bus crashed into construction scaffolding in San Francisco's Union Square. The bus was originally a transit vehicle and had been retrofitted as a double-decker open-air tour bus before it was sold to City Sightseeing. Despite early speculation that the vehicle's brakes may have failed, on March 23, 2016, the CHP announced that the cause of the crash SB 812 Page 5 was driver error. 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. 4) Related legislation: AB 1574. The San Francisco bus crash has drawn attention to the problem of unregistered "ghost buses" and to the possibility of improving the CHP's bus inspection program. The former issue is the target of AB 1574 (Chiu, 2016), a companion bill which compels the CPUC and the DMV to ensure that the former has a record of all commercial buses registered with the latter. AB 1574 imposes additional triggers for bus inspections and broadens the authority of the CHP and the CPUC to impound vehicles. 5) 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 examining terminal records to determine whether operators have established systems that ensure that all of their vehicles are safely maintained. 6) 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 SB 812 Page 6 cap in existing law. 7) 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 more frequent checks of poorly performing operators would increase the safety of bus travel. 8) 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%) occurred in accidents involving a tour bus. In California, only 6.5% 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 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. SB 812 Page 7 9) 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. Revoking operating authority from chronically noncompliant carriers is another way to protect public safety that can also act as a cap on the number of additional inspections the state must undertake. This bill therefore also requires the CHP to recommend suspending an operator's license after it receives three consecutive unsatisfactory ratings on terminal inspections. An operator is considered to have received three consecutive unsatisfactory ratings if it obtained (a) an unsatisfactory compliance rating in a regular terminal inspection and the next two consecutive follow-up terminal inspections, or (b) an unsatisfactory compliance rating for three consecutive regular terminal inspections, irrespective of receiving satisfactory ratings on the follow-up inspections associated with the first two terminal inspections. 10)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. 11)Two kinds of bus operators, two sets of rules. Currently, the statutory requirements facing charter party carriers and passenger stage corporations are enumerated in different sections of the Public Utilities Code. In many cases they are similar or even identical, but sometimes they are markedly different. A good example is the fee for terminal inspections, which is fixed in statute for charter party SB 812 Page 8 carriers but not for passenger stage corporations. Terminology related to vehicles (e.g., buses, tour buses) also varies among code sections and codes. The study of statutes and regulations required by this bill would evaluate whether the complexity of state policy in this area has resulted in uneven public safety requirements or arbitrary distribution of costs among operator types. FISCAL EFFECT: Appropriation: No Fiscal Com.:YesLocal: Yes According to the Senate Appropriations Committee: 1)Estimated CHP costs of up to $75,000 to develop and adopt regulations to modify the tour bus inspection program and the fee schedule. (Motor Vehicle Account) 2)Estimated CHP staff costs off approximately $1 million to $1.4 million in the first year and $500,000 to $700,000 annually ongoing for 6-8 PY of new inspection staff. First year costs include initial training and equipment costs for new staff. (Motor Vehicle Account) 3)Unknown, significant revenue gains as a result of the requirement that CHP adopt a fee schedule that covers its costs to administer the inspection program. Increased fee revenues would fully offset the increased staffing costs noted above, and correct structural deficits in the current program. (Motor Vehicle Account) 4)One-time CPUC costs of approximately $100,000 to make necessary automation upgrades. (Transportation Reimbursement Account) 5)Ongoing CPUC staff costs of approximately $330,000 for PY (Administrative Law Judge and Legal Counsel) for a proceeding, SB 812 Page 9 conducting additional formal hearings in carrier permit revocation cases, and associated formal litigation. (Transportation Reimbursement Account) SUPPORT: (Verified5/27/16) California Association of Highway Patrolmen California Bus Association City and County of San Francisco OPPOSITION: (Verified5/27/16) None received Prepared by:Randy Chinn / Sarah Carvill / T. & H. / (916) 651-4121 5/31/16 21:58:39 **** END ****