BILL ANALYSIS AB 1656 Page 1 Date of Hearing: May 8, 2001 ASSEMBLY COMMITTEE ON BUSINESS AND PROFESSIONS Lou Correa, Chair AB 1656 (Goldberg) - As Amended: May 1, 2001 SUBJECT : Self-storage facilities: household goods. SUMMARY : Imposes disclosure and registration requirements on self-service storage facilities that transport household goods. Specifically, this bill : 1)Provides that self-service storage facilities that move household goods, in containers that have been loaded by customers, shall be subject to regulation by the Public Utilities Commission (PUC) unless the facility provides the PUC with proof of compliance with specified requirements as well as any other requirements established by the PUC. 2)Provides that a storage company shall obtain a customer's written acknowledgement of the company's right to move a storage container from its initial storage location, and provides that the customer has an opportunity to refuse this type of move. 3)Requires that all self-service storage facilities shall register with the PUC in accordance with regulations adopted by the PUC. EXISTING LAW : 1)Provides that household goods carriers are regulated by the PUC. 2)Provides that self-service storage facilities that transport containers with household goods shall not be subject to regulation by the PUC if the facility complies with specified requirements. These requirements include: limits on fees charged to customers; prohibitions on loading, packing or handling the contents of the container by the facility; maintaining cargo insurance; providing customers with specified disclosure information. FISCAL EFFECT : Unknown AB 1656 Page 2 COMMENTS : 1)Purpose of the bill . The author notes that current law provides that the transportation by a self-service storage facility of portable containers of used household goods and personal effects is exempt from regulation by the PUC if the facility complies with specified requirements. A major purpose of the bill is to provide that such an exemption is not allowed unless the facility provides proof of compliance with specified requirements. The bill also is designed to enhance consumer protections by requiring self-service storage facilities to register with the PUC as well as ensuring that consumers understand that the container with their household goods may be moved away from the storage facility where the container was originally stored. 2)Opposition . According to opponents, the bill proposes to give the PUC jurisdiction over the transportation of storage containers containing household goods. Opponents state that this is contrary to SB 1086 (Schiff), Chapter 45, Statutes of 1998. SB 1086 amended the Self-Service Storage Act to authorize storage operators to transport storage containers to and from self-storage facilities, subject to specific requirements. Many storage operators now offer their customers the option of having an empty storage container delivered to their home. The customer packs the container, and the operator then returns the loaded container to a storage facility. SB 1086 provides that if the operator complies with specific requirements - including a prohibition on packing the goods, and specific fee limits - this activity would not be subject to PUC regulations that apply to moving companies. Significantly, failure to comply with the limited "safe harbor" for container transportation established by SB 1086 subjects the operator to PUC jurisdiction and full compliance with the PUC's moving regulations and tariffs. SB 1086 was a compromise supported by all interested parties. Opponents also express concern that the bill provides that self-service facilities that transport containers with household goods will be subject to PUC regulation unless the facility provides proof of compliance with specified requirements and any other requirements established by the PUC. 3)Scope of registration requirement . The bill focuses on AB 1656 Page 3 self-service storage facilities that transport containers with used household goods to and from the storage facility. However, the bill requires that all self-service storage facilities shall register with the PUC. The author should clarify the intent of the scope of the registration requirement and, if the intent is to limit the scope to only those self-service facilities that transport containers, the bill will need to be amended accordingly. 4)Customer's right to refuse moving a container from original storage location . The bill increases disclosure requirements for consumers by requiring the facility to obtain a customer's written acknowledgement that the facility has the right to move a storage container from its initial storage location to a different location (that may be less convenient for the customer). The bill also provides that the customer has an opportunity to refuse this type of move. Opponents object to providing customers with the right of refusal because, in part, the implications are not clear. For example, if the intention is to provide the customer with a right of refusal in conjunction with signing a contract, and the customer refuses, then the contract presumably will not be signed. On the other hand, if the customer has a right of refusal subsequent to the container being moved to its original storage location, such a refusal could place an undue burden on the owner of the facility. REGISTERED SUPPORT / OPPOSITION : Support None on file. Opposition Door To Door Storage, Inc. Public Storage, Inc. Self-Storage Association Analysis Prepared by : Jay Greenwood / B. & P. / (916) 319-3301