Amended in Senate June 10, 2014

Amended in Senate May 29, 2014

Amended in Assembly March 19, 2013

California Legislature—2013–14 Regular Session

Assembly BillNo. 612


Introduced by Assembly Member Nazarian

February 20, 2013


An act to amendbegin delete Sections 5360,end deletebegin insert Sectionend insert 5374begin delete, 5385.5, 5385.6, and 5391end delete of,begin delete andend delete to addbegin delete Sectionend deletebegin insert Sections 5374.3 andend insert 5374.4 to, begin insertand to repeal Sections 5385.5 and 5391 of, end insertthe Public Utilities Code, relating to transportation.

LEGISLATIVE COUNSEL’S DIGEST

AB 612, as amended, Nazarian. Charter-party carriers of passengers: online-enabled application or platform.

(1) The Passenger Charter-party Carriers’ Act, with certain exceptions, prohibits a charter-party carrier of passengers from engaging in transportation services subject to regulation by the Public Utilities Commission without obtaining a specified certificate or permit, as appropriate, from the commission, and imposes various other requirements. Existing law imposes certain penalties for violation of the act. The act defines a charter-party carrier of passengers as every person engaged in the transportation of persons by motor vehicle for compensation, whether in common or contract carriage, over any public highway in this state and includes any person, corporation, or other entity engaged in the provision of a hired driver service when a rented motor vehicle is being operated by a hired driver.

Pursuant to existing law, the commission has adopted rules and regulations relating to public safety risks in the operation of transportation network companies. Those rules and regulations define a transportation network company as an organization that provides prearranged transportation services for compensation using an online-enabled application or platform to connect passengers with drivers using their personal vehicles.

This bill wouldbegin delete defineend deletebegin insert establish specified requirements applicable toend insert a charter-party carrier of passengersbegin delete to include a person that usesend deletebegin insert and any carrier that utilizesend insert an online-enabled application or platform to connect passengers with drivers. The bill would require a charter-party carrier of passengers to participate in the Department of Motor Vehicle’s Employer Pull Notice Program. The bill would requirebegin delete persons operating vehiclesend deletebegin insert any driver who is either under contract to, or employed by, the carrier to operate a vehicleend insert used in transportation for compensation under the act to furnish to the Department of Justicebegin delete a full set of fingerprintsend deletebegin insert 2 classifiable fingerprint cardsend insert to conduct begin inserta end insertcriminal historybegin delete record checks and to cause the results to be reported to the Public Utilities Commissionend deletebegin insert background check, as specifiedend insert.

The bill would require assurances of protection against liability applicable to charter-party carriers under existing law to be primary and carried by the permit or certificate holder. The bill would require the commission to develop a standard disclosure agreement with respect to drivers who make themselves available for services withbegin delete charter-party carriers of passengersend deletebegin insert carriersend insert that utilize an online-enabled application or platform to connect passengers with drivers.

The bill would make expressly applicable to carriers that use an online-enabled application or platform to connect passengers with drivers certain provisions relating to the issuance ofbegin delete decals and special license platesend deletebegin insert decalsend insert.

begin insert

The bill would require that drivers employed or initially retained after January 1, 2015, be subject to background checks and mandatory drug and alcohol testing prior to employment or retention and that employees hired before January 1, 2015, complete a background check and drug and alcohol test prior to January 1, 2016.

end insert

(2) Because a violation of these provisions would be a crime, the bill would impose a state-mandated local program.

(3) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

begin deleteP3    1

SECTION 1.  

Section 5360 of the Public Utilities Code is
2amended to read:

3

5360.  

Subject to the exclusions of Section 5353, “charter-party
4carrier of passengers” means every person engaged in the
5transportation of persons by motor vehicle for compensation,
6whether in common or contract carriage, over any public highway
7in this state, and includes any person that uses an online-enabled
8application or platform to connect passengers with drivers.
9“Charter-party carrier of passengers” includes any person,
10corporation, or other entity engaged in the provision of a hired
11driver service when a rented motor vehicle is being operated by a
12hired driver.

end delete
13

begin deleteSEC. 2.end delete
14begin insertSECTION 1.end insert  

Section 5374 of the Public Utilities Code is
15amended to read:

16

5374.  

(a) (1) Before a permit or certificate is issued or
17renewed, the commission shall require the applicant to establish
18reasonable fitness and financial responsibility to initiate and
19conduct or continue to conduct the proposed or existing
20transportation services. The commission shall not issue or renew
21a permit or certificate pursuant to this chapter unless the applicant
22meets all of the following requirements:

23(A) It is financially and organizationally capable of conducting
24an operation that complies with the rules and regulations of the
25Department of the California Highway Patrol governing highway
26safety.

27(B) It is committed to observing the hours of service regulations
28of state and, where applicable, federal law, for all persons, whether
29employees or subcarriers, operating vehicles in transportation for
30compensation under the certificate.

31(C) It has a preventive maintenance program in effect for its
32vehicles used in transportation for compensation that conforms to
P4    1regulations of the Department of the California Highway Patrol
2in Title 13 of the California Code of Regulations.

begin delete

3(D) It participates in the Department of Motor Vehicle’s
4Employer Pull Notice Program to regularly check the driving
5records of all persons, whether employees or subcarriers, operating
6vehicles used in transportation for compensation.

end delete
begin delete

7(E)

end delete

8begin insert (D)end insert It has a safety education and training program in effect for
9all employees or subcarriers operating vehicles used in
10transportation for compensation.

begin delete

11(F)

end delete

12begin insert (E)end insert It will maintain its vehicles used in transportation for
13compensation in a safe operating condition and in compliance with
14the Vehicle Code and with regulations contained in Title 13 of the
15California Code of Regulations relative to motor vehicle safety.

begin delete

16(G)

end delete

17begin insert (F)end insert It has filed with the commission the certificate of workers’
18compensation insurance coverage or statement required by Section
195378.1.

begin delete

20(H)

end delete

21begin insert (G)end insert It has provided the commission an address of an office or
22terminal where documents supporting the factual matters specified
23in the showing required by this subdivision may be inspected by
24the commission and the Department of the California Highway
25Patrol.

begin delete

26(I) It provides for a mandatory controlled substance and alcohol
27testing certification program as adopted by the commission
28pursuant to Section 1032.1.

end delete
begin delete

29(J)

end delete

30begin insert (H)end insert Subparagraphs (C),begin delete (F), and (H)end deletebegin insert (E), and (G),end insert do not apply
31to a charter-party carrier of passengers engaged in the provision
32of a hired driver service when a rented motor vehicle is being
33operated by the hired driver.

34(2) With respect to subparagraphs (B) andbegin delete (F)end deletebegin insert (E)end insert of paragraph
35(1), the commission may base a finding on a certification by the
36commission that an applicant has filed, with the commission, a
37sworn declaration of ability to comply and intent to comply.

38(3) The commission may require, as a precondition to the
39issuance of a permit or certificate, the procurement of a
40performance bond sufficient to facilitate the collection of fines,
P5    1penalties, and restitution related to enforcement actions that can
2be taken against the applicant.

3(b) In addition to the requirements in subdivision (a),
4charter-party carriers shall meet all other state and, where
5applicable, federal regulations as prescribed.

6(c) The commission may delegate to its executive director or
7that executive director’s designee the authority to issue, renew, or
8authorize the transfer of, charter-party carrier permits or certificates
9and to make the findings specified in subdivision (a) that are
10necessary to that delegated authority.

11begin insert

begin insertSEC. 2.end insert  

end insert

begin insertSection 5374.3 is added to the end insertbegin insertPublic Utilities Codeend insertbegin insert,
12to read:end insert

begin insert
13

begin insert5374.3.end insert  

The commission shall develop a standard disclosure
14agreement with respect to drivers who make themselves available
15for services with charter-party carriers of passengers that utilize
16an online-enabled application or platform to connect passengers
17with drivers. The standard disclosure agreement shall be part of
18a written agreement between the driver and the charter-party
19carrier of passengers, and shall provide information to the driver
20about insurance coverage and limits of liability coverage and
21advise the driver that their personal automobile insurance policy
22may not provide coverage when they are operating a vehicle as
23part of that charter-party carrier of passengers operation. The
24standard disclosure agreement shall be in writing and shall be
25signed by each driver participating in this type of arrangement
26with a charter-party carrier of passengers. Standard disclosure
27agreement records of charter-party carriers of passengers shall
28be subject to review and audit by the commission at its discretion.

end insert
29begin insert

begin insertSEC. 3.end insert  

end insert

begin insertSection 5374.4 is added to the end insertbegin insertPublic Utilities Codeend insertbegin insert,
30to read:end insert

begin insert
31

begin insert5374.4.end insert  

(a) Notwithstanding Section 5374, the following
32requirements shall apply to a charter party carrier of passengers,
33including any carrier that utilizes an online-enabled application
34or platform to connect passengers with drivers:

35(1) It participates in the Department of Motor Vehicle’s
36Employer Pull Notice Program to regularly check the driving
37record of any driver who is either under contract to, or employed
38by, the carrier to operate a vehicle used in transportation for
39compensation.

P6    1(2) It provides for a mandatory controlled substance and alcohol
2testing certification program as adopted by the commission
3pursuant to Section 1032.1.

4(3) It provides for mandatory Department of Justice criminal
5background checks to check the criminal history of any driver who
6is either under contract to, or employed by, the carrier to operate
7a vehicle used in transportation for compensation pursuant to the
8following:

9(A) Upon accepting employment by a charter-party carrier of
10passengers or entering into a contract with a carrier that utilizes
11an online-enable application or platform to connect passengers
12with drivers, a driver shall obtain two classifiable fingerprint cards
13for submission to the Department of Justice. The driver shall submit
14the fingerprint cards and a processing fee payable to the
15department to the carrier. The carrier shall forward the classifiable
16fingerprint cards and the fee to the Department of Justice. The
17department shall forward one classifiable fingerprint card to the
18Federal Bureau of Investigation for purposes of a background
19check. The processing fee shall be in an amount to cover the actual
20costs of the department.

21(B) In lieu of classifiable fingerprint cards provided for in this
22section, the carrier may authorize drivers to submit their
23fingerprints into an electronic fingerprinting system administered
24by the Department of Justice. Drivers who submit their fingerprints
25by electronic means shall have their fingerprints entered into the
26system through a terminal operated by a law enforcement agency
27or other facility authorized by the Department of Justice to conduct
28electronic fingerprinting. The enforcement agency responsible for
29operating the terminal may charge a fee sufficient to reimburse it
30for the costs incurred in providing this service.

31(C) Upon receipt of a driver’s electronic or hard card
32fingerprints as provided in this section, the Department of Justice
33shall disseminate the following information to the carrier:

34(i) Every conviction rendered against the driver.

35(ii) Every arrest for an offense for which the driver is presently
36awaiting trial, whether the driver is incarcerated or has been
37released on bail or on his or her own recognizance pending trial.

38(D) The carrier shall request from the Department of Justice
39subsequent notification service, as provided pursuant to Section
4011105.2 of the Penal Code.

P7    1(E) A driver shall be denied employment or have his or her
2contract voided if he or she is required by any law to register as
3a sex offender or has been convicted of any felony involving: any
4type of sexual offense; the manufacture, possession for sale,
5transportation, or distribution of narcotics, controlled substances,
6or addictive or dangerous drugs; force, violence, threat or
7intimidation against persons; kidnaping; forgery, fraud, larceny,
8extortion, burglary, robbery, or theft; credit card fraud; possession
9of a firearm or dangerous weapon; resisting or obstructing a peace
10officer, public officer, or emergency medical technician; or use of
11another vehicle for hire in the commission of a felony. Equivalent
12out-of-state violations shall be considered.

13(F) As used in this section, “driver” has the same meaning as
14defined in Section 305 of the Vehicle Code.

15(4) It provides decals to be applied to all vehicles used in
16transportation for compensation. For motor vehicles designed to
17carry not more than eight passengers, including the driver, the
18commission shall issue a suitable decal for purposes of Section
195385, for each vehicle (A) registered with the commission and
20operated by a charter-party carrier of passengers holding a valid
21permit or certificate of public convenience and necessity or (B)
22used by a driver under contract to any carrier that uses an
23online-enabled application or platform to connect passengers with
24drivers. Carriers using an online-enabled application or platform
25shall register any vehicle used in the transportation of passengers
26for compensation with the commission and that vehicle shall
27display the commission-issued identifying symbol. The decal with
28an identifying symbol shall be a minimum size of two and one-half
29inches by six inches, and shall be affixed to the lower right hand
30corner of the rear bumper of the vehicle.

31(5) The carrier’s commercial auto liability insurance is primary.
32The commission shall, in granting permits or a certificate pursuant
33to this chapter, require the charter-party carrier of passengers to
34procure, and to continue in effect during the life of the permit or
35 certificate, adequate protection against liability imposed by law
36upon the charter-party carrier of passengers for the payment of
37damages for personal bodily injuries, including death resulting
38therefrom, protection against a total liability of the charter-party
39carrier of passengers on account of bodily injuries to, or death of,
40more than one person as a result of any one accident, and
P8    1protection against damage or destruction of property. The
2requirements for these assurances of protection against liability
3shall be primary and shall be carried by the permit or certificate
4holder. The minimum requirements for these assurances of
5protection against liability shall not be less than the requirements
6that are applicable to operations conducted under certificates of
7public convenience and necessity issued pursuant to the provisions
8of Article 2 (commencing with Section 1031) of Chapter 5 of Part
91 of Division 1, and the rules and regulations prescribed pursuant
10thereto shall apply to charter-party carriers of passengers.

11(b) Drivers employed or initially retained after January 1, 2015,
12shall be subject to background checks and mandatory drug testing
13employment or retention. Employees hired before January 1, 2015,
14shall complete a background check and drug test before January
151, 2016.

end insert
16begin insert

begin insertSEC. 4.end insert  

end insert

begin insertSection 5385.5 of the end insertbegin insertPublic Utilities Codeend insertbegin insert is repealed.end insert

begin delete
17

5385.5.  

For motor vehicles designed to carry not more than
18eight passengers, including the driver, the commission shall issue
19a suitable decal for purposes of Section 5385, for each vehicle
20registered with the commission and operated by a charter-party
21carrier of passengers holding a valid permit or certificate of public
22convenience and necessity. The decal with an identifying symbol
23shall be a minimum size of two and one-half inches by six inches,
24and shall be affixed to the lower right hand corner of the rear
25bumper of the vehicle.

end delete
26begin insert

begin insertSEC. 5.end insert  

end insert

begin insertSection 5391 of the end insertbegin insertPublic Utilities Codeend insertbegin insert is repealed.end insert

begin delete
27

5391.  

The commission shall, in granting permits or a certificate
28pursuant to this chapter, require the charter-party carrier of
29passengers to procure, and to continue in effect during the life of
30the permit or certificate, adequate protection against liability
31imposed by law upon the charter-party carrier of passengers for
32the payment of damages for personal bodily injuries, including
33death resulting therefrom, protection against a total liability of the
34charter-party carrier of passengers on account of bodily injuries
35to, or death of, more than one person as a result of any one accident,
36and protection against damage or destruction of property. The
37minimum requirements for such assurances of protection against
38liability shall not be less than the requirements which are applicable
39to operations conducted under certificates of public convenience
40and necessity issued pursuant to the provisions of Article 2
P9    1(commencing with Section 1031), Chapter 5, Part 1, Division 1,
2of this code, and the rules and regulations prescribed pursuant
3thereto shall apply to charter-party carriers of passengers.

end delete
begin delete
4

SEC. 3.  

Section 5374.4 is added to the Public Utilities Code,
5to read:

6

5374.4.  

Notwithstanding any other law, the commission shall
7require all persons, whether employees or subcarriers, operating
8vehicles used in transportation for compensation under this chapter
9to furnish to the Department of Justice a full set of fingerprints for
10purposes of conducting criminal history record checks, and to
11cause the results of those record checks to be reported to the
12commission.

13

SEC. 4.  

Section 5385.5 of the Public Utilities Code is amended
14to read:

15

5385.5.  

For motor vehicles designed to carry not more than
16eight passengers, including the driver, the commission shall issue
17a suitable decal for purposes of Section 5385, for each vehicle
18registered with the commission and operated by a charter-party
19carrier of passengers holding a valid permit or certificate of public
20convenience and necessity, including any carrier that uses an
21online-enabled application or platform to connect passengers with
22drivers. The decal with an identifying symbol shall be a minimum
23size of two and one-half inches by six inches, and shall be affixed
24to the lower right hand corner of the rear bumper of the vehicle.

25

SEC. 5.  

Section 5385.6 of the Public Utilities Code is amended
26to read:

27

5385.6.  

(a) No charter-party carrier, including any carrier that
28uses an online-enabled application or platform to connect
29passengers with drivers, shall operate a limousine as defined by
30Section 5371.4 unless the limousine is equipped with the special
31license plates issued and distributed by the Department of Motor
32Vehicles pursuant to Section 5011.5 of the Vehicle Code.

33(b) The commission shall issue to each charter-party carrier
34operating limousines a permit or certificate for the number of
35vehicles verified by the carrier as employed in providing limousine
36service. The permit or certificate shall be submitted to the
37 Department of Motor Vehicles, which will issue to each verified
38vehicle a set of unique, identifying license plates. The department
39shall maintain a record of each set of plates it issues and provide
40a copy of each record to the commission.

P10   1(c) The commission shall recover from any carrier whose permit
2or certificate is cancelled, suspended, or revoked any and all plates
3issued pursuant to this section.

4(d) The special license plate shall be in lieu of the decal required
5to be issued and displayed pursuant to Section 5385.5.

6

SEC. 6.  

Section 5391 of the Public Utilities Code is amended
7to read:

8

5391.  

(a) The commission shall, in granting permits or a
9certificate pursuant to this chapter, require the charter-party carrier
10of passengers to procure, and to continue in effect during the life
11of the permit or certificate, adequate protection against liability
12imposed by law upon the charter-party carrier of passengers for
13the payment of damages for personal bodily injuries, including
14death resulting therefrom, protection against a total liability of the
15charter-party carrier of passengers on account of bodily injuries
16to, or death of, more than one person as a result of any one accident,
17and protection against damage or destruction of property. The
18 requirements for these assurances of protection against liability
19shall be primary and shall be carried by the permit or certificate
20holder. The minimum requirements for these assurances of
21protection against liability shall not be less than the requirements
22that are applicable to operations conducted under certificates of
23public convenience and necessity issued pursuant to the provisions
24of Article 2 (commencing with Section 1031), Chapter 5, Part 1,
25Division 1, of this code, and the rules and regulations prescribed
26pursuant thereto shall apply to charter-party carriers of passengers.

27(b) The commission shall develop a standard disclosure
28agreement with respect to drivers who make themselves available
29for services with charter-party carriers of passengers that utilize
30an online-enabled application or platform to connect passengers
31with drivers. The standard disclosure agreement shall be part of a
32written agreement between the driver and the charter-party carrier
33of passengers, and shall provide information to the driver about
34insurance coverage and limits of liability coverage and advise the
35driver that their personal automobile insurance policy may not
36provide coverage when they are operating a vehicle as part of that
37charter-party carrier of passengers operation. The standard
38disclosure agreement shall be in writing and shall be signed by
39each driver participating in this type of arrangement with a
40charter-party carrier of passengers. Standard disclosure agreement
P11   1records of charter-party carriers of passengers shall be subject to
2review and audit by the commission at its discretion.

end delete
3

begin deleteSEC. 7.end delete
4begin insertSEC. 6.end insert  

No reimbursement is required by this act pursuant to
5Section 6 of Article XIII B of the California Constitution because
6the only costs that may be incurred by a local agency or school
7district will be incurred because this act creates a new crime or
8infraction, eliminates a crime or infraction, or changes the penalty
9for a crime or infraction, within the meaning of Section 17556 of
10the Government Code, or changes the definition of a crime within
11the meaning of Section 6 of Article XIII B of the California
12Constitution.



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