BILL ANALYSIS                                                                                                                                                                                                    

                                                                     SB 812  

                                                                    Page  1

          Date of Hearing:  August 3, 2016


                               Lorena Gonzalez, Chair

          SB 812  
          (Hill) - As Amended June 29, 2016

          |Policy       |Transportation                 |Vote:|15 - 0       |
          |Committee:   |                               |     |             |
          |             |                               |     |             |
          |             |                               |     |             |

          Urgency:  No  State Mandated Local Program:  YesReimbursable:   


          This bill imposes additional, performance-based inspection  
          requirements on tour buses operated by passenger stage  
          corporations (PSCs) and charter party carriers (CPCs).  
          Specifically, this bill: 

          1)Requires the Public Utilities Commission (PUC), upon the  
            recommendation of the CHP and pending an administrative  
            hearing, to suspend the permit or certificate of a PSC or CPC  
            for receiving an unsatisfactory compliance rating in three  
            consecutive CHP terminal inspections.


                                                                     SB 812  

                                                                    Page  2

          2)Provides that a maintenance facility or terminal of a tour bus  
            operator receiving two or more consecutive satisfactory CHP  
            inspection ratings shall be inspected at least once every 26  
            months, instead of at least once every 13 months.

          3)Provides that a maintenance facility or terminal of a tour bus  
            operator that received an unsatisfactory CHP inspection rating  
            shall be inspected every six months until the operator  
            achieves a satisfactory rating during a regular terminal  

          4)Requires a tour bus older than two years and newly acquired by  
            a CPC or PSC, which has received an unsatisfactory rating and  
            is being inspected every six months, to be inspected by CHP  
            prior to being operated.

          5)Requires the CHP, when a tour bus is issued an out-of-service  
            order pursuant to a field inspection, to inspect the  
            operator's terminal or maintenance facility within 90 days.

          6)Requires CHP to recommend to the PUC or the U.S. Department of  
            Transportation, as appropriate, that a tour bus or modified  
            limousine carrier's operating authority be suspended, denied,  
            or revoked upon three consecutive unsatisfactory inspection  

          7)Requires CHP to order a tour bus out of service upon a  
            determination that the tour bus has multiple safety violations  
            that could constitute an imminent danger to public safety, and  
            prohibits the tour bus from being operated until corrections  
            to the violations are verified by a subsequent CHP inspection  
            within five business days.


                                                                     SB 812  

                                                                    Page  3

          8)Requires at least 10% of the inspections CHP conducts each  
            year to be unannounced surprise inspections, prioritized  
            toward companies that are non-compliant, have a history of  
            non-compliance with safety laws or regulations, or have  
            received unsatisfactory ratings.

          9)Requires CHP, by January 1, 2018, to adopt regulations  
            modifying its existing tour bus terminal inspection program  
            per the above, and requires the CHP to conduct a follow-up  
            inspection to an unsatisfactory rating between 30 to 90 days  
            after the initial inspection.

          FISCAL EFFECT:

          1)CHP. The CHP will incur significant unknown costs for  
            additional annual surprise bus inspections, inspection of  
            additional buses when initially put in service, inspection of  
            buses before returning to service after failing inspection,  
            and more frequent re-inspection of terminals that receive  
            unsatisfactory ratings. These additional costs will be  
            somewhat offset by reduced inspections of carriers receiving  
            satisfactory ratings. Based on current annual inspection costs  
            of $1.3 million for about 5,200 tour bus inspections, assuming  
            a 30% to 50% increase in inspections, costs would increase by  
            $400,000 to $600,000 annually.  These costs should decline  
            over time assuming more operators receive satisfactory ratings  
            and would thus be subject to less frequent inspections. There  
            will be additional one-time costs of several hundred thousand  
            dollars to train and equip new inspectors. [Motor Vehicle  

            It should be noted that current annual inspection fee revenues  
            are only about $200,000, far less than the current inspection  


                                                                     SB 812  

                                                                    Page  4

            costs, even absent the additional costs stemming from this  
            bill. It is unclear why this regulatory activity should be so  
            highly subsidized rather than be self-supporting. It is  
            staff's understanding that the author is working to resolve  
            this issue.

          2)PUC. Ongoing special fund costs of approximately $330,000 for  
            an administrative law judge and an attorney for conducting  
            additional formal hearings in carrier permit revocation cases,  
            and for associated litigation.  [Transportation Reimbursement  


          1)Background. PSCs 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.

            CPC is a charter vehicle, on a pre-arranged 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 PUC  
            does not regulate the fees charged by CPCs.  Types of CPCs  
            include limousines, tour buses, sightseeing services, and  
            charter and party buses.

            Current law generally vests the PUC with the responsibility to  
            regulate CPCs and PSCs. Tour buses operated by CPCs and PSCs  
            are required to be inspected every 13 months by the CHP and  
            every 45 days by the tour bus operator. The findings of the  
            inspections carried out by the CHP are reported to the PUC,  
            and tour buses may not legally operate unless the bus  
            operator's terminal and maintenance facilities have been  


                                                                     SB 812  

                                                                    Page  5

            inspected.  Terminal inspections typically include inspections  
            of a vehicle's registration, the driver's licensure, and the  
            condition of the vehicles. Due to the size of tour bus fleets,  
            the CHP only inspects a representative sample of each  
            carrier's fleet in the annual inspection. According to some  
            estimates, the CHP inspects less than 1/3 of all buses,  
            leaving some buses uninspected.

          2)Purpose. The author introduced this bill in response to a tour  
            bus crash in San Francisco in November 2015 that injured 20  
            people. While the crash was found to be the result of driver  
            error, according to the author, the vehicle had never been  
            inspected by CHP and was not properly registered with CPUC.  A  
            subsequent surprise inspection of the carrier's fleet resulted  
            in the discovery of numerous safety violations that had not  
            been discovered in previous scheduled inspections. This bill  
            restructures CHP's tour bus inspection program as a  
            performance-based program, with additional inspections  
            targeting carriers with repeated violations and less frequent  
            inspections for carriers who consistently demonstrate  

          3)Related Legislation. AB 1574 (Chiu), pending in Senate  
            Appropriatons, requires the PUC to verify with the DMV that  
            the buses, limousines, and modified limousines used by a PSC  
            or CPC have been reported and met safety requirements.

            AB 1677 (Ting), also pending in Senate Appropriations,  
            requires the CHP to develop protocols for additional  
            inspection of tour buses by the CHP when requested and  
            reimbursed by local governments.


                                                                     SB 812  

                                                                    Page  6

          Analysis Prepared by:Chuck Nicol / APPR. / (916)