BILL ANALYSIS
AB 2591
Page 1
Date of Hearing: May 3, 2004
ASSEMBLY COMMITTEE ON TRANSPORTATION
Jenny Oropeza, 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 PUC.
3)Establishes fee structures for charter-party carriers, based
on a uniform percentage of a carrier's gross revenue, to be
paid to 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
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operations within its boundaries for any charter-party carrier
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 : According to the Assembly Local Government Committee
analysis, 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 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.
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
introduced, 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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Faced with a similar problem of clarifying the regulatory status
of charter-party carriers in relation to 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 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.
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 PUC lacks the resources or
personnel to do more than minimal enforcement, and that the
efforts of local governments have been largely ineffective due
to the inadequacy of existing regulations. They contend that
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this bill will enhance public safety and confidence, mitigate
the economic harm of illegal activities, and reduce the
regulatory burden on the PUC.
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% of limousine operators in California are
small business owners with three or fewer vehicles, and 87% 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.
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.
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
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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."
Author's Amendments : The author has provided amendments to the
bill that delete the prior contents and insert new language
providing more narrow authority for local governments to take
enforcement actions on charter-party carriers as follows:
1)Allow vehicles to be impounded by local authorities if they
violate the law.
2)Grant local governments the authority to inspect waybills
within the jurisdiction of the local jurisdiction.
3)Defines the pre-arrangement of pickups.
4)Increase fines for illegal operations of charter party
carriers.
Double referral : This bill was heard in the Assembly Local
Government Committee on April 28th and passed out with a vote of
9-0.
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
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National Limousine Association
Secure Transportation
Star Coach
Taxicab, Limousine and Paratransit Association
Virgin Limousines
Letter from one individual
Analysis Prepared by : Andrew Antwih / TRANS. / (916) 319-2093