Amended in Senate June 19, 2014

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

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(Coauthor: Assembly Member Hernández)

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February 20, 2013


An act to amend Section 5374 ofbegin delete, to add Sections 5374.3 and 5374.4 to, and to repeal Sections 5385.5 and 5391 of,end delete the Public Utilities Code, relating to transportation.

LEGISLATIVE COUNSEL’S DIGEST

AB 612, as amended, Nazarian. Charter-party carriers of passengers:begin delete online-enabled application or platform.end deletebegin insert permit requirements: drivers.end insert

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(1) The

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begin insertThe end insertPassenger 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,begin delete and imposesend deletebegin insert subject toend insert variousbegin delete otherend delete requirements.begin delete Existing law imposes certain penalties for violation of the act.end delete 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.

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This bill would prohibit the commission from issuing or renewing a permit or certificate to a charter-party carrier of passengers unless the applicant, in addition to existing requirements, participates in the Department of Motor Vehicles Employer Pull Notice Program and provides for mandatory Department of Justice background checks of every driver who is either employed by or under contract to the applicant, as specified.

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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.

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This bill would establish specified requirements applicable to a charter-party carrier of passengers and any carrier that utilizes 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

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begin insertTheend insert bill would begin insertalso end insertrequire any driver who is either under contract to, or employed by, the carrier to operate a vehicle used in transportation for compensation under the act to furnishbegin delete to the Department of Justice 2end delete classifiable fingerprint cardsbegin insert which the carrier would be required to forward to the Department of Justiceend insert to conduct a criminal history background check, as specifiedbegin insert and would prohibit the carrier from employing or contracting with a driver who fails that check, as specifiedend insert.

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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 with carriers that utilize an online-enabled application or platform to connect passengers with drivers.

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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 of decals.

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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.

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(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:

P3    1begin insert

begin insertSECTION end insertbegin insert1end insertbegin insert.end insert  

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begin insertSection 5374 of the end insertbegin insertPublic Utilities Codeend insertbegin insert is
2 amended to read:end insert

3

5374.  

(a) (1) Before a permit or certificate is issued or
4renewed, the commission shall require the applicant to establish
5reasonable fitness and financial responsibility to initiate and
6conduct or continue to conduct the proposed or existing
7transportation services. The commission shall not issue or renew
8a permit or certificate pursuant to this chapter unless the applicant
9meets all of the following requirements:

10(A) It is financially and organizationally capable of conducting
11an operation that complies with the rules and regulations of the
12Department of the California Highway Patrol governing highway
13safety.

14(B) It is committed to observing the hours of service regulations
15of state and, where applicable, federal law, for all persons, whether
16employees or subcarriers, operating vehicles in transportation for
17compensation under the certificate.

18(C) It has a preventive maintenance program in effect for its
19vehicles used in transportation for compensation that conforms to
20regulations of the Department of the California Highway Patrol
21in Title 13 of the California Code of Regulations.

22(D) It participates inbegin delete a programend deletebegin insert the Department of Motor
23Vehicle’s Employer Pull Notice Programend insert
to regularly check the
P4    1driving records of all persons, whether employees or subcarriers,
2operating vehicles used in transportation for compensation.

3(E) It has a safety education and training program in effect for
4all employees or subcarriers operating vehicles used in
5transportation for compensation.

6(F) It will maintain its vehicles used in transportation for
7compensation in a safe operating condition and in compliance with
8the Vehicle Code and with regulations contained in Title 13 of the
9California Code of Regulations relative to motor vehicle safety.

10(G) It has filed with the commission the certificate of workers’
11compensation insurance coverage or statement required by Section
125378.1.

13(H) It has provided the commission an address of an office or
14terminal where documents supporting the factual matters specified
15in the showing required by this subdivision may be inspected by
16the commission and the Department of the California Highway
17Patrol.

18(I) It provides for a mandatory controlled substance and alcohol
19testing certification program as adopted by the commission
20pursuant to Section 1032.1.

21(J) Subparagraphs (C), (F), and (H) do not apply to a
22charter-party carrier of passengers engaged in the provision of a
23hired driver service when a rented motor vehicle is being operated
24by the hired driver.

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25(K) It provides for mandatory Department of Justice criminal
26background checks to check the criminal history of any driver who
27is either under contract to, or employed by, the applicant to operate
28a vehicle used in transportation for compensation pursuant to the
29following:

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30(i) Upon accepting employment by or entering into a contract
31with a carrier, a driver shall obtain two classifiable fingerprint
32cards for submission to the Department of Justice. The driver shall
33submit to the carrier the fingerprint cards and a processing fee
34payable to the department. The carrier shall forward the
35classifiable fingerprint cards and the fee to the Department of
36Justice. The department shall forward one classifiable fingerprint
37card to the Federal Bureau of Investigation for purposes of a
38background check. The processing fee shall be in an amount to
39cover the actual costs to the department.

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P5    1(ii) In lieu of classifiable fingerprint cards provided for in this
2section, the carrier may authorize drivers to submit their
3fingerprints into an electronic fingerprinting system administered
4by the Department of Justice. Drivers who submit their fingerprints
5by electronic means shall have their fingerprints entered into the
6 system through a terminal operated by a law enforcement agency
7or other facility authorized by the Department of Justice to conduct
8electronic fingerprinting. The enforcement agency responsible for
9operating the terminal may charge a fee sufficient to reimburse it
10for the costs incurred in providing this service.

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11(iii) Upon receipt of a driver’s electronic or hard card
12fingerprints as provided in this section, the Department of Justice
13shall disseminate the following information to the carrier:

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14(I) Every conviction rendered against the driver.

end insert
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15(II) Every arrest for an offense for which the driver is presently
16awaiting trial, whether the driver is incarcerated or has been
17released on bail or on his or her own recognizance pending trial.

end insert
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18(iv) The carrier shall request from the Department of Justice
19subsequent notification service, as provided pursuant to Section
2011105.2 of the Penal Code.

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begin insert

21(v) A driver shall be denied employment or have his or her
22contract voided if he or she is required by any law to register as
23a sex offender or has been convicted of any felony involving any
24type of sexual offense; the manufacture, possession for sale,
25transportation, or distribution of narcotics, controlled substances,
26or addictive or dangerous drugs; force, violence, threat or
27intimidation against persons; kidnapping; forgery, fraud, larceny,
28extortion, burglary, robbery, or theft; credit card fraud; possession
29of a firearm or dangerous weapon; resisting or obstructing a peace
30officer, public officer, or emergency medical technician; or use of
31another vehicle for hire in the commission of a felony. Equivalent
32out-of-state violations shall be considered.

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33(vi) As used in this section, “driver” has the same meaning as
34defined in Section 305 of the Vehicle Code.

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35(2) With respect to subparagraphs (B) and (F) of paragraph (1),
36the commission may base a finding on a certification by the
37commission that an applicant has filed, with the commission, a
38sworn declaration of ability to comply and intent to comply.

39(3) The commission may require, as a precondition to the
40issuance of a permit or certificate, the procurement of a
P6    1performance bond sufficient to facilitate the collection of fines,
2penalties, and restitution related to enforcement actions that can
3be taken against the applicant.

4(b) In addition to the requirements in subdivision (a),
5charter-party carriers shall meet all other state and, where
6applicable, federal regulations as prescribed.

7(c) The commission may delegate to its executive director or
8that executive director’s designee the authority to issue, renew, or
9authorize the transfer of, charter-party carrier permits or certificates
10and to make the findings specified in subdivision (a) that are
11necessary to that delegated authority.

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12

SECTION 1.  

Section 5374 of the Public Utilities Code is
13amended to read:

14

5374.  

(a) (1) Before a permit or certificate is issued or
15renewed, the commission shall require the applicant to establish
16reasonable fitness and financial responsibility to initiate and
17conduct or continue to conduct the proposed or existing
18transportation services. The commission shall not issue or renew
19a permit or certificate pursuant to this chapter unless the applicant
20meets all of the following requirements:

21(A) It is financially and organizationally capable of conducting
22an operation that complies with the rules and regulations of the
23Department of the California Highway Patrol governing highway
24safety.

25(B) It is committed to observing the hours of service regulations
26of state and, where applicable, federal law, for all persons, whether
27employees or subcarriers, operating vehicles in transportation for
28compensation under the certificate.

29(C) It has a preventive maintenance program in effect for its
30vehicles used in transportation for compensation that conforms to
31regulations of the Department of the California Highway Patrol
32in Title 13 of the California Code of Regulations.

33 (D) It has a safety education and training program in effect for
34all employees or subcarriers operating vehicles used in
35transportation for compensation.

36 (E) It will maintain its vehicles used in transportation for
37compensation in a safe operating condition and in compliance with
38the Vehicle Code and with regulations contained in Title 13 of the
39California Code of Regulations relative to motor vehicle safety.

P7    1 (F) It has filed with the commission the certificate of workers’
2compensation insurance coverage or statement required by Section
35378.1.

4 (G) It has provided the commission an address of an office or
5terminal where documents supporting the factual matters specified
6in the showing required by this subdivision may be inspected by
7the commission and the Department of the California Highway
8Patrol.

9 (H) Subparagraphs (C), (E), and (G), do not apply to a
10charter-party carrier of passengers engaged in the provision of a
11hired driver service when a rented motor vehicle is being operated
12by the hired driver.

13(2) With respect to subparagraphs (B) and (E) of paragraph (1),
14the commission may base a finding on a certification by the
15commission that an applicant has filed, with the commission, a
16sworn declaration of ability to comply and intent to comply.

17(3) The commission may require, as a precondition to the
18issuance of a permit or certificate, the procurement of a
19performance bond sufficient to facilitate the collection of fines,
20penalties, and restitution related to enforcement actions that can
21be taken against the applicant.

22(b) In addition to the requirements in subdivision (a),
23charter-party carriers shall meet all other state and, where
24applicable, federal regulations as prescribed.

25(c) The commission may delegate to its executive director or
26that executive director’s designee the authority to issue, renew, or
27authorize the transfer of, charter-party carrier permits or certificates
28and to make the findings specified in subdivision (a) that are
29necessary to that delegated authority.

30

SEC. 2.  

Section 5374.3 is added to the Public Utilities Code,
31to read:

32

5374.3.  

The commission shall develop a standard disclosure
33agreement with respect to drivers who make themselves available
34for services with charter-party carriers of passengers that utilize
35an online-enabled application or platform to connect passengers
36with drivers. The standard disclosure agreement shall be part of a
37written agreement between the driver and the charter-party carrier
38of passengers, and shall provide information to the driver about
39insurance coverage and limits of liability coverage and advise the
40driver that their personal automobile insurance policy may not
P8    1provide coverage when they are operating a vehicle as part of that
2charter-party carrier of passengers operation. The standard
3disclosure agreement shall be in writing and shall be signed by
4each driver participating in this type of arrangement with a
5 charter-party carrier of passengers. Standard disclosure agreement
6records of charter-party carriers of passengers shall be subject to
7review and audit by the commission at its discretion.

8

SEC. 3.  

Section 5374.4 is added to the Public Utilities Code,
9to read:

10

5374.4.  

(a) Notwithstanding Section 5374, the following
11requirements shall apply to a charter party carrier of passengers,
12including any carrier that utilizes an online-enabled application or
13platform to connect passengers with drivers:

14(1) It participates in the Department of Motor Vehicle’s
15Employer Pull Notice Program to regularly check the driving
16record of any driver who is either under contract to, or employed
17by, the carrier to operate a vehicle used in transportation for
18compensation.

19(2) It provides for a mandatory controlled substance and alcohol
20testing certification program as adopted by the commission
21pursuant to Section 1032.1.

22(3) It provides for mandatory Department of Justice criminal
23background checks to check the criminal history of any driver who
24is either under contract to, or employed by, the carrier to operate
25a vehicle used in transportation for compensation pursuant to the
26following:

27(A) Upon accepting employment by a charter-party carrier of
28passengers or entering into a contract with a carrier that utilizes
29an online-enable application or platform to connect passengers
30with drivers, a driver shall obtain two classifiable fingerprint cards
31for submission to the Department of Justice. The driver shall submit
32the fingerprint cards and a processing fee payable to the department
33to the carrier. The carrier shall forward the classifiable fingerprint
34cards and the fee to the Department of Justice. The department
35shall forward one classifiable fingerprint card to the Federal Bureau
36of Investigation for purposes of a background check. The
37processing fee shall be in an amount to cover the actual costs of
38the department.

39(B) In lieu of classifiable fingerprint cards provided for in this
40section, the carrier may authorize drivers to submit their
P9    1fingerprints into an electronic fingerprinting system administered
2by the Department of Justice. Drivers who submit their fingerprints
3by electronic means shall have their fingerprints entered into the
4system through a terminal operated by a law enforcement agency
5or other facility authorized by the Department of Justice to conduct
6electronic fingerprinting. The enforcement agency responsible for
7operating the terminal may charge a fee sufficient to reimburse it
8for the costs incurred in providing this service.

9(C) Upon receipt of a driver’s electronic or hard card fingerprints
10as provided in this section, the Department of Justice shall
11 disseminate the following information to the carrier:

12(i) Every conviction rendered against the driver.

13(ii) Every arrest for an offense for which the driver is presently
14awaiting trial, whether the driver is incarcerated or has been
15released on bail or on his or her own recognizance pending trial.

16(D) The carrier shall request from the Department of Justice
17subsequent notification service, as provided pursuant to Section
1811105.2 of the Penal Code.

19(E) A driver shall be denied employment or have his or her
20contract voided if he or she is required by any law to register as a
21sex offender or has been convicted of any felony involving: any
22type of sexual offense; the manufacture, possession for sale,
23transportation, or distribution of narcotics, controlled substances,
24or addictive or dangerous drugs; force, violence, threat or
25intimidation against persons; kidnaping; forgery, fraud, larceny,
26extortion, burglary, robbery, or theft; credit card fraud; possession
27of a firearm or dangerous weapon; resisting or obstructing a peace
28officer, public officer, or emergency medical technician; or use of
29another vehicle for hire in the commission of a felony. Equivalent
30out-of-state violations shall be considered.

31(F) As used in this section, “driver” has the same meaning as
32defined in Section 305 of the Vehicle Code.

33(4) It provides decals to be applied to all vehicles used in
34transportation for compensation. For motor vehicles designed to
35carry not more than eight passengers, including the driver, the
36commission shall issue a suitable decal for purposes of Section
375385, for each vehicle (A) registered with the commission and
38operated by a charter-party carrier of passengers holding a valid
39permit or certificate of public convenience and necessity or (B)
40used by a driver under contract to any carrier that uses an
P10   1online-enabled application or platform to connect passengers with
2drivers. Carriers using an online-enabled application or platform
3shall register any vehicle used in the transportation of passengers
4for compensation with the commission and that vehicle shall
5display the commission-issued identifying symbol. The decal with
6an identifying symbol shall be a minimum size of two and one-half
7inches by six inches, and shall be affixed to the lower right hand
8corner of the rear bumper of the vehicle.

9(5) The carrier’s commercial auto liability insurance is primary.
10The commission shall, in granting permits or a certificate pursuant
11to this chapter, require the charter-party carrier of passengers to
12procure, and to continue in effect during the life of the permit or
13 certificate, adequate protection against liability imposed by law
14upon the charter-party carrier of passengers for the payment of
15damages for personal bodily injuries, including death resulting
16therefrom, protection against a total liability of the charter-party
17carrier of passengers on account of bodily injuries to, or death of,
18more than one person as a result of any one accident, and protection
19against damage or destruction of property. The requirements for
20these assurances of protection against liability shall be primary
21and shall be carried by the permit or certificate holder. The
22minimum requirements for these assurances of protection against
23liability shall not be less than the requirements that are applicable
24to operations conducted under certificates of public convenience
25and necessity issued pursuant to the provisions of Article 2
26(commencing with Section 1031) of Chapter 5 of Part 1 of Division
271, and the rules and regulations prescribed pursuant thereto shall
28apply to charter-party carriers of passengers.

29(b) Drivers employed or initially retained after January 1, 2015,
30shall be subject to background checks and mandatory drug testing
31employment or retention. Employees hired before January 1, 2015,
32shall complete a background check and drug test before January
331, 2016.

34

SEC. 4.  

Section 5385.5 of the Public Utilities Code is repealed.

35

SEC. 5.  

Section 5391 of the Public Utilities Code is repealed.

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36

begin deleteSEC. 6.end delete
37begin insertSEC. 2.end insert  

No reimbursement is required by this act pursuant to
38Section 6 of Article XIII B of the California Constitution because
39the only costs that may be incurred by a local agency or school
40district will be incurred because this act creates a new crime or
P11   1infraction, eliminates a crime or infraction, or changes the penalty
2for a crime or infraction, within the meaning of Section 17556 of
3the Government Code, or changes the definition of a crime within
4the meaning of Section 6 of Article XIII B of the California
5Constitution.



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