BILL ANALYSIS Ó AB 612 Page 1 CONCURRENCE IN SENATE AMENDMENTS AB 612 (Nazarian) As Amended August 19, 2014 Majority vote ----------------------------------------------------------------- |ASSEMBLY: | |(May 9, 2013) |SENATE: |21-11|(August 21, | | | | | | |2014) | ----------------------------------------------------------------- (vote not relevant) Original Committee Reference: TRANS. SUMMARY : Requires charter-party carriers (CPC) to participate in the Department of Motor Vehicles (DMV) Employer Pull Notice system (EPN) and submit all drivers to a Department of Justice (DOJ) criminal background check. The Senate amendments delete the Assembly version of the bill, and instead: 1)Prohibit the California Public Utilities Commission (PUC) from issuing or renewing a permit or certification to a CPC unless the applicant, in addition to existing requirements: a) Participates in DMVs EPN system; and, b) Submits all of its drivers to a DOJ background check as specified. 2)Specify that CPC drivers are required to submit fingerprint images to DOJ for purposes of carrying out background checks and permit DOJ to charge a fee to cover the cost of providing background checks. 3)Require a CPC driver to be denied employment or have their contract voided if they are required by any law to register as a sex offender or have been convicted of any specified felony, within a seven-year period from the date of his or her application. 4)Require all CPCs, regardless of class or category, to participate in the EPN system, mandatory controlled substance and alcohol testing, and the DOJ background check process. AB 612 Page 2 5)Specify that drivers hired or initially retained by a CPC on or after January 1, 2015, are subject to the abovementioned requirements. Further specifies that CPC drivers hired or initially retained prior to January 1, 2015, are required to complete the abovementioned requirements before January 1, 2016. 6)Clarify that all CPC drivers are required to participate in the EPN system. Further clarifies that a CPC employer is the entity subject to PUC permitting and certificate requirements. 7)Delete provisions related to yellow-light intervals. EXISTING LAW : 1)Establishes the "Passenger Charter-Party Carriers Act," which directs PUC to issue permits or certificates to CPCs, investigate complaints against carriers, and cancel, revoke, or suspend permits and certificates for specific violations. 2)Defines "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 the state. 3)Requires CPCs to operate on a prearranged basis. Further defines "prearranged basis" to mean that the transportation of the prospective passenger was arranged with the carrier by the passenger, or a representative of the passenger, either by written contract or telephone. 4)At the regulatory level, establishes transportation network company (TNCs) as a category of CPCs and defines a TNC as an organization whether a corporation, partnership, sole proprietor, or other form, operating within the state that provides prearranged transportation services for compensation using an online-enabled application or platform to connect passengers with drivers using their personal vehicles. 5)Establishes the EPN system administered by the DMV that provides the employer of a driver who drives a specified type of vehicle with a report showing the driver's current public record and any subsequent convictions, driver's license revocations, failures to appear, accidents, driver's license AB 612 Page 3 suspensions, driver's license revocations, or any other actions taken against the driving privilege. 6)Requires employers of drivers of specified vehicles such as commercial truck drivers, school buses, farm labor vehicles, tow trucks, youth buses, paratransit vehicles, ambulances, vehicles that transport hazardous materials, to show EPN reports, during regular business hours, upon the request of the California Highway Patrol (CHP). 7)Requires employers of drivers of specified vehicles as described above to obtain EPN reports from DMV at least every 12 months that is to be signed, dated, and maintained by the employer. 8)Requires DOJ to maintain criminal history information on any person within the state and requires DOJ to generate a report to a requesting entity, as specified. FISCAL EFFECT : Unknown COMMENTS : Existing law requires PUC to regulate various transportation services, including CPCs. CPCs perform various types of transportation services including, but not limited to, a limousine with seating capacity up to eight passengers, a bus providing prearranged services with capacity up to 15 passengers, or buses providing round-trip sightseeing trips. In order to obtain an operating permit or certificate from PUC, CPCs must meet a number of requirements including providing sufficient proof of financial responsibility, maintaining a preventative maintenance program for all vehicles, possessing a safety education and training program, and regularly checking the driving records of all persons operating vehicles used in transportation for compensation. In a September 2013 decision, PUC began regulation of the new online app-based ride services by creating a distinct new category of CPCs called TNCs. PUC tailored specific new rules in response to the introduction of new technology into an existing industry. The decision requires TNCs to obtain a permit from the PUC, conduct criminal background checks of drivers, establish a driver training program, implement a zero-tolerance policy on drugs and alcohol, conduct vehicle inspections, and obtain authorization from airports before conducting any operations on or into airport property. The decision also AB 612 Page 4 requires each TNC to maintain commercial liability insurance policies providing not less than $1 million per-incident coverage for incidents occurring under specific conditions. The author states that this bill was introduced in attempt to provide additional clarification to the TNC regulations set forth by PUC and to also bring into alignment inconsistent requirements that currently exist between TNCs and other CPC providers. Specifically, this bill requires all CPCs, including TNCs, to participate in the EPN system, to be subject to mandatory alcohol and controlled substance testing, and undergo criminal background checks through DOJ. DMV's EPN was established as a voluntary program in 1983 to provide employers and regulatory agencies with a means of providing driver safety through the ongoing review of driver records. By 1998, the EPN system had expanded to require participation by most commercial drivers, including drivers transporting property, passengers, and household goods. The current EPN system is designed to automatically generate a report of a driver's record and electronically send the report to the employer under specific circumstances including: upon enrollment of a driver, annually from the date of employment, or whenever a driver commits certain moving violations (e.g. accidents, driving under the influence, suspended driver's license). Presently, approximately 1.6 million commercial drivers are enrolled in the EPN system and while specific types of CPC drivers are currently required to be enrolled in EPN, TNC drivers are not subject to the same requirement. This bill will expand the EPN system by clarifying that all CPC drivers, including TNC drivers, are required to enroll in EPN, thus providing TNCs such as Uber, Lyft, and Sidecar, with timely information on the DMV records of the drivers they employ. This bill also intends to address a discrepancy related to existing mandatory alcohol and substance testing requirements. The PUC's September 2013 regulations require TNCs to implement a zero-tolerance alcohol and controlled substance use policy and provide riders with information on how to report a driver AB 612 Page 5 suspected of being under the influence of intoxicating substances. The regulations further provide that TNCs are required to suspend a driver promptly after a zero-tolerance complaint is filed. However, this regulation differs from existing PUC requirements for other types of CPCs which are required to participate in mandatory and periodic alcohol and controlled substance testing on top of implementing a zero-tolerance policy. In order to remedy this discrepancy, this bill expands the mandatory testing requirement to apply to all CPCs and their drivers. Lastly, this bill will require all CPC drivers to now undergo criminal background checks. PUC regulations require TNCs to run criminal background checks on all hired drivers yet the same requirement does not apply to other types of CPCs. Furthermore, while PUC regulations require driver background checks, regulations lack specific parameters as to how TNCs are to proceed with this requirement. As a result, TNCs may, for example, use a third party firm that fails to provide a comprehensive search - for instance, only reviewing online digital records, thus failing to capture any data from jurisdictions that exclusively maintain hard copy criminal records. This bill will bring all CPCs up to the same standards by requiring all drivers to undergo criminal background checks and provides a uniform process by using the DOJ system to ensure the most comprehensive and updated data of an employee is provided to all CPCs. With the demand for online app-based transportation services continuing to rise, the provisions in this bill aim to mitigate the public safety issues and incidents that have been widely reported related to TNCs over the past year and to also provide clarification that all CPCs will be subject to specific PUC requirements. The author asserts that this bill will provide the necessary tools to ensure the public is safe and closes the gaps that currently exist between TNCs and other CPC providers. This bill was substantially amended in the Senate and the Assembly-approved version of this bill was deleted. This bill, AB 612 Page 6 as amended in the Senate, is inconsistent with Assembly actions and the provisions of this bill, as amended in the Senate, have not been heard in an Assembly policy committee. Analysis Prepared by : Manny Leon / TRANS. / (916) 319- 2093 FN: 0005135