BILL ANALYSIS � 1
SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
ALEX PADILLA, CHAIR
AB 2118 - Butler Hearing Date:
June 19, 2012 A
As Amended: June 12, 2012 FISCAL B
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DESCRIPTION
Current law authorizes the California Public Utilities
Commission (CPUC) to regulate any "household goods carrier,"
defined as a corporation or person that transports for
compensation or hire used household goods and personal effects
by a motor vehicle over any public highway in this state.
Current law prohibits a household goods carrier from operating
without a permit issued by the CPUC and meeting requirements
that include showing financial and safety fitness and residency,
having adequate insurance, clearing a criminal background check,
and complying with operating regulations, including maximum rate
tariffs.
This bill identifies "broker" as a person engaged by others in
the act of arranging for service by a household goods carrier
and makes a "broker" subject to the permit requirement.
Current law provides various penalties for household goods
carriers that violate applicable laws and CPUC rules, including
being subject to vehicle impoundment and court action for
recovery of customer charges, and being found guilty of a
misdemeanor punishable by a fine of not more than $1,000 or
three months in county jail, or both, or, for a willful
violation, a fine of not more than $10,000 or one year in county
jail.
This bill clarifies that an entity falling within the definition
of "household goods carrier," including a "broker," is subject
to all of these penalties regardless of whether it has obtained
a permit and also maintains the failure to obtain a permit as a
separate violation.
This bill increases these fines from a maximum of $1,000 to
$2,500 and requires that the fine for a violation that involves
operating or holding oneself out as a household goods carrier
without a permit be not less than $1,000.
This bill authorizes the CPUC to suspend or revoke a household
goods carrier's permit, or assess a fine up to $2,500, for
unauthorized use of another person's or corporation's trademark
and authorizes the CPUC to assess an additional amount to cover
the reasonable expense of CPUC investigation to verify the
trademark infringement.
This bill requires every household goods carrier to add a
prominent link to its Internet Web site that immediately directs
all consumers to the CPUC's Internet Web site related to
protection for consumers of moving companies and household goods
carriers.
Current law authorizes the CPUC to seek the termination of
telephone service of a household goods carrier operating without
a permit.
Current law prohibits a telephone corporation from releasing
subscriber information without customer consent except in
specified circumstances.
This bill authorizes the release, without customer consent, of
the name and address of a subscriber whose telephone number is
being use by a household goods carrier operating without a
permit.
Current law establishes various requirements related to
household goods carriers' records, customer contracts,
signatures, insurance, and other documentation.
This bill would require the CPUC to adopt rules for meeting
these requirements with electronic records.
BACKGROUND
According to the CPUC, sponsor of this bill, consumers who hire
a household goods carrier that has not obtained a permit are
potentially subject to excessive charges, uninsured losses, and
other service problems. Carriers operating without a permit
have an unfair cost advantage over permitted carriers because
they maintain inadequate liability and workers' compensation
insurance, which is a substantial expense for lawful operators.
As a consequence, carriers who obtain a permit and comply with
the rules lose business to the violators, which in turn, makes
it more difficult for them to fully comply with insurance and
safety standards, all to the detriment of consumers.
The CPUC states that its enforcement staff receives many
complaints about carriers without permits, many from licensed
carriers or the California Moving and Storage Association, an
industry trade group. Stopping the violators is difficult, the
CPUC states, because of the relative anonymity afforded by
Internet advertising and because many claim to be operating only
as a "broker" and not subject to permit requirements.
Unsuspecting customers are frequently subject to abusive
practices such as "holding goods hostage" - refusal to deliver
goods until the customer pays additional charges not disclosed
when the service was arranged.
COMMENTS
1. Author's purpose . According to the author, this bill
"is designed to allow the CPUC greater ability to stop
illegal moving companies who are preying on unknowing
consumers."
2. Investigating Trademark Infringement . A provision in
this bill as approved by the Assembly made a household
goods carrier subject to a penalty of not more than $5,000
per day for falsifying licensure, membership in an
association, or location. The author states that this was
to address the problem of carriers fraudulently holding
themselves out to the public as a member of a moving
association that operates lawfully. The current version of
the bill deleted this provision and instead authorizes the
CPUC to investigate trademark infringement and makes use of
an infringing trademark subject to a fine not to exceed
$2,500. However, recognizing that the CPUC does not have
expertise in trademark infringement, the author has agreed
to delete the trademark provision and revert to the prior
language. Thus, the author and committee may wish to
consider amending the bill to delete the new trademark
provisions on page 7, lines 18 to 29, and reinstate the
provisions in strikeout on page 7, lines 15 to 18.
3. Electronic Records Rulemaking . This bill requires the
CPUC to adopt rules permitting electronic transactions,
including electronic signatures and electronic
transmission, completion, and execution of forms, contracts
and documents. This provision further states that
requirements pursuant to Public Utilities Code Sections
5142, 5143, 5221, 5223, 5224, and 5225 related to written
forms and documents, information booklet, document storage,
signatures, "and the like" may be satisfied by complying
with the new rules the CPUC is required to adopt for
electronic transactions.
This provision is both exceedingly broad and at the same
time vague in referring to "and the like." Moreover,
current law in Section 5223 provides that the CPUC "may
prescribe the forms of any account, records, and memoranda,
including those pertaining to the movement of traffic and
the receipt or expenditure of money, to be kept by
household goods carriers, and the length of time the
accounts, records, and memoranda shall be preserved."
Thus, the CPUC has existing authority to prescribe the form
of required records and could undertake a rulemaking to
prescribe an electronic form of these records.
Accordingly, the author and committee may wish to consider
amending the bill to delete Section 4.
4. Technical Amendments . This bill needs two technical
amendments to achieve the author's purpose. First, the
bill adds a definition of "broker" with the goal of making
a broker of household goods carrier service subject to the
same permit requirement as the actual provider of this
service. Instead, the definition of "household goods
carrier" should be amended to include a broker. Second,
this bill also adds to the definition of "household goods
carrier" a reference to "licensed or unlicensed" with the
goal of ensuring that an entity that falls within the
definition of household goods carrier is required to comply
with applicable requirements regardless of whether it has
obtained a permit, although that also is a separate
violation. This reference should be to a carrier operating
with or without a permit, rather than a license.
ASSEMBLY VOTES
Assembly Floor (70-0)
Assembly Appropriations Committee (17-0)
Assembly Utilities and Commerce Committee
(14-0)
POSITIONS
Sponsor:
California Moving and Storage Association
California Public Utilities Commission
Support:
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|21st Century Van Lines, Inc. |Main Street Moving & Storage |
|Ace Relocation Systems, Inc. |Metropolitan Van & Storage, |
|Advantage Moving & Storage |Inc. |
|Andy's Transfer & Storage |Monument Moving & Storage |
|Atlas Transfer & Storage |Mother Lode Van & Storage, Inc. |
|Company |Move Pros |
|Best Moving Service, Inc. |Movers Supply Brokerage, Inc. |
|Beverly Hills Transfer & |Nor-Cal Moving Services |
|Storage |North Bay Moving & Storage |
|Blue Chip Moving & Storage, |Oakley Relocation |
|Inc. |One Big Man & One Big Truck |
|CDS Moving Equipment, Inc. |Ortiz Bros. Moving & Storage |
|California Moving Systems |Paul Hanson Partners |
|Cardinal Van & Storage |Poulos Moving Systems, Inc. |
|California Relocation Service, |Priority Moving, Inc. |
|Inc. |Qualex Inc. |
|Careful Moving & Storage |Redwood Moving & Storage |
|Chipman Moving & Storage |Roseville Van & Storage, Inc. |
|Colonial Van & Storage, Inc. |San Diego Van & Storage Company |
|Crown Moving & Storage |Santa Rosa Moving & Storage |
|Dewitt Companies of California |Company |
|Earl Farnsworth Express |Seniors On The Move, Inc. |
|Ernie's Van & Storage |Stadler & Jensen Moving |
|EXCEL Moving Services |Starving Students |
|E-ZMOVE Moving Services |State Council for Independent |
|G&H Moving & Storage Company |Living |
|Galbraith Van & Storage |Sterling Van Lines |
|Company, Inc. |Unipack Global Relocation |
|Golden Eagle Moving Services |Services |
|Golden Gate Moving & Storage |Vandenberg Van & Storage, Inc. |
|Company |VIP Transport |
|Hi Desert Moving & Storage |Walton Family Moving & |
|Johnson Storage & Moving |Storage |
|Lompoc Van & Storage, Inc. | |
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Oppose:
None on file
Jacqueline Kinney
AB 2118 Analysis
Hearing Date: June 19, 2012