BILL ANALYSIS
AB 2591
Page 1
Date of Hearing: April 28, 2004
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
Simon Salinas, Chair
AB 2591 (Leno) - As Introduced: February 20, 2004
SUBJECT : Charter-party carriers: limousines.
SUMMARY : Authorizes local regulation of charter-party carriers
operating limousines. Specifically, this bill :
1)Authorizes a city, county, or city and county to impose a
business license fee on charter-party carriers domiciled or
maintaining a business office within that city, county, or
city and county.
2)Authorizes a city, county, or city and county to impose a
business license fee on charter-party carriers operating at an
airport owned or operated by that city, county, or city and
county.
EXISTING LAW :
1)Authorizes, under the Charter-Party Carriers' Act, the
California Public Utilities Commission (PUC) to issue
operating authority and to regulate every charter-party
carrier of passengers, including limousines for hire, that
operates in the state.
2)Prohibits restrictions pertaining to point of origination or
destination in the state for charter-party carriers licensed
by the PUC.
3)Establishes fee structures for charter-party carriers, based
on a uniform percentage of a carrier's gross revenue, to be
paid to the PUC for regulation and enforcement.
4)Defines "limousine" as any luxury sedan, of either standard or
extended length, with a seating capacity of not more than
nine, including the driver, used in the transportation
of passengers for hire on a prearranged basis within the state.
5)Authorizes a city, county, or city and county to adopt and
enforce reasonable rules and regulations pertaining to
operations within its boundaries for any charter-party carrier
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domiciled or maintaining a business office within that city,
county, or city and county.
6)Authorizes airports to adopt and enforce local rules and
regulations for the operation of charter-party carriers,
including those related to access, use of streets and roads,
parking, traffic control, passenger transfers, trip fees,
occupancy, and the use of buildings and facilities.
7)Prohibits a charter-party carrier from engaging in taxicab
transportation service licensed and regulated by a city or
county.
8)Prohibits local governments from adopting license, permit,
fee, and other requirements on charter-party carriers
operating a limousine.
FISCAL EFFECT : Unknown
COMMENTS :
1)The author has introduced this bill in an effort to address
problems on the local level with the regulation of limousine
operators. Charter-party carriers, including limousines, are
passenger carriers who provide prearranged transportation
service within the state. The Charter-Party Carriers' Act,
enacted in the early 1960s, establishes the PUC as a
regulatory body that issues permits for this type of passenger
carrier operation, and establishes financial responsibility
criteria, rate criteria, and other operating requirements.
According to the author and proponents of this bill, the PUC
has been less than effective in discharging its
responsibilities.
2)In response to allegations of the proliferation of renegade or
bandit limousine operators acting illegally as taxicabs, the
author wants to give local governments the authority to
license and regulate limousine service providers. This bill,
as drafted, authorizes a local government to charge a business
license fee on limousine companies domiciled, maintaining a
business office, or operating at an airport in a city, county,
or city and county. Existing law authorizes local governments
to adopt and enforce any reasonable rules and regulations
pertaining to the operation of charter-party carriers within
its boundaries.
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3)Faced with a similar problem of clarifying the regulatory
status of charter-party carriers vis-?-vis local government
authorities, the Legislature enacted AB 1506 (Moore), Chapter
518, Statutes of 1990. This bill reemphasized the regulatory
authority of the PUC, expanded PUC enforcement powers, and
required the PUC to develop uniform operating standards for
charter-party carriers, while authorizing airports to collect
trip fees and require the licensing of charter-party carriers.
AB 1506 also authorized local governments and airports to
adopt and enforce any reasonable rules and regulations
pertaining to these operations within their boundaries.
However, the author and supporters contend that the current
system of regulation and enforcement of charter-party carriers
is inadequate and ineffective. The taxicab and limousine
industries have both been faced with a proliferation of
illegal operators who fail to get PUC operating authority or
proper insurance, and undercut the rates of legitimate
operators. Supporters and opponents agree that there is a
real problem with enforcement, but disagree about the solution
to the problem.
4)Illegal operators do not follow basic safety and insurance
regulations required by the PUC, do not pay for the state
regulation of limousines, and pose a variety of hazards to
passengers and other drivers. Proponents contend that this
bill will help control the long-standing illegal and unfair
practices of limousine drivers who operate as taxicabs by not
adhering to the requirement that their services have been
prearranged. Supporters assert that limousines have been
stealing fares from taxicabs from hotels, airports, and
increasingly while customers are hailing off the street. The
author believes that limousine companies have the inherent
advantage of operating in multiple jurisdictions, so they
should at least be subject to the same local rules and
regulations that are applicable to taxicabs. Supporters
contend that this bill will provide the public with enhanced
safety and security, since local governments would be
authorized to require more stringent licensing requirements on
limousine operators, such as criminal background checks and
fingerprinting, as currently required for taxicabs.
The author and supporters note that the PUC lacks the resources
or personnel to do more than
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minimal enforcement, and that local governments' efforts have
been largely ineffective due to the inadequacy of existing
regulations. They contend that this bill will enhance public
safety and confidence, mitigate the economic harm of illegal
activities, and reduce the regulatory burden on the PUC.
5)Limousine companies already pay a PUC license fee, airport
fees, and a percentage of their gross income to the PUC for
regulation and enforcement. 80 percent of limousine operators
in California are small business owners with three or fewer
vehicles, and 87 percent have a gross revenue of less than
$500,000. Opponents fear that granting the authority to local
governments to charge additional fees would significantly
impact their costs, and may drive some companies out of
business. The opposition also asserts that the potential for
divergent regulatory requirements and a multiplicity of
permits would be an unfair burden on the industry. A national
organization that represents all segments of the local
passenger service for-hire industry, including both limousines
and taxicabs, asserts that the multiple regulatory structure
proposed in this bill does not exist anywhere else in the
country, and opposes the concept as a counterproductive
barrier to quality service. Opponents are also concerned that
this bill would be ineffective at eliminating illegal
operators and would only result in the over-regulation of PUC
licensed charter-party carriers, since illegal operators would
be unlikely to acquire a license from any regulating
authority. The opposition supports increased enforcement
efforts, since illegal operators affect their business as
well, but they are opposed to the approach taken in this bill.
6)The author has made good-faith efforts to amend this bill,
inviting members of both the taxicab and limousine industries
to discuss options. He has invited comment on a series of
proposals, including: limiting the provisions of this bill to
cities with a population over 300,000; the institution of a
fee structure that ensures limousine companies would pay no
more than they currently pay to the PUC; and specification
that any local regulation would be consistent with state laws
and regulations. The limousine industry has also noted their
preference for increased enforcement on the local level,
including enhanced fines and penalties, rather than increased
regulation on the local level proposed by the author.
Negotiations are ongoing.
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7)This bill, as drafted, appears to have constitutional
implications. Article XII, Section 8 of the California
Constitution provides that "a city, county or other public
body may not regulate matters over which the Legislature
grants regulatory authority power to the Commission [PUC]."
This bill is attempting to authorize local governments to
regulate the operation of limousine charter-party carriers
operating within their jurisdictions. Since the Legislature
has granted the regulatory authority of charter-party carriers
to the PUC, the authority sought by this bill runs contrary to
this constitutional provision. In addition, the California
Appellate Court ruled in People v. Levering , (1981) 122 Cal.
App. 3d Supp. 19, that "a city ordinance requiring a limousine
operator to obtain a permit was unconstitutional because they
legislated in an area preempted by state law."
8)AB 2591 is double-referred to the Local Government and
Transportation Committees.
REGISTERED SUPPORT / OPPOSITION :
Support
United Taxicab Workers [SPONSOR]
CA Labor Federation
East Bay Taxi Drivers Association
Independent Taxi Owners Association
Los Angeles Board of Taxicab Commissioners
Los Angeles County Taxi Association
Los Angeles Department of Transportation
Region 8 States Council of United Food and Commercial Workers
San Francisco Taxi Association
San Francisco Taxi Commission
One individual letter
Opposition
Capital City Limousine
Greater CA Livery Association
National Limousine Association
Secure Transportation
Star Coach
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Taxicab, Limousine and Paratransit Association
Virgin Limousines
One individual letter
Analysis Prepared by : Mark McKenzie / L. GOV. / (916)
319-3958