BILL ANALYSIS Ó AB 650 Page 1 GOVERNOR'S VETO AB 650 (Low) As Enrolled September 9, 2016 2/3 vote -------------------------------------------------------------------- |ASSEMBLY: | |(May 14, 2015) |SENATE: |27-7 |(August 31, | | | | | | |2016) | | | | | | | | | | | | | | | -------------------------------------------------------------------- (vote not relevant) ---------------------------------------------------------------------- | | | | | | | | | | | | |COMMITTEE VOTE: |9-2 |(August 31, |RECOMMENDATION: |concur | | | |2016) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ---------------------------------------------------------------------- (Trans.) -------------------------------------------------------------------- |ASSEMBLY: |57-12 |(August 31, | | | | AB 650 Page 2 | | |2016) | | | | | | | | | | | | | | | | | | -------------------------------------------------------------------- Original Committee Reference: G.O. SUMMARY: Prohibits cities and counties from creating additional rules and regulations on taxicab transportation services, as specified, and states the intent of the Legislature that the regulation of taxicab transportation services and taxicab drivers be consolidated with other modes of for-hire transportation regulated by the state. The Senate amendments delete the Assembly version of the bill and instead: 1)Sunset the existing authority of every city and county, except for the city and county of San Francisco, to regulate taxicab transportation services operated within the jurisdiction of the city or county upon notification from the Directory of Finance to the Speaker of the Assembly and the President Pro Tem of the Senate of the completion of the state reorganization of transportation duties from the Public Utilities Commission (CPUC) to other agencies, if taxicab transportation services are included in that reorganization. 2)Provide that taxicab transportation services and taxicab drivers shall be subject to rules and regulations adopted by a city or a county as those rules and regulations existed on July 1, 2016, except for in the city and county of San Francisco, with the following exceptions: AB 650 Page 3 a) Prohibit service charges, fees, or assessments levied on a taxicab company from exceeding the amount annually required per taxi vehicle as of July 1, 2016, and prohibits new or additional service charges, fees, or assessments from being created. b) Prohibit fees for the issuance of taxi driver permits from exceeding $75 annually. c) Prohibit a city or county from limiting or prohibiting prearranged trips, originated through dispatch, an Internet Web site, or online application, by licensed taxicabs. d) Authorize a city or county to limit the number of taxicab companies or vehicles that use taxi stand areas, pick up passengers at airports, or pick up street hails. e) Authorize a city or county to set a maximum fare structure for taxicab transportation services, with maximum fares not lower than the fares existing on July 1, 2016, and the ability for a taxicab transportation service to offer fares lower than the maximum fare structure. f) Prohibit a city or county from regulating the type of device used by a taxicab company to calculate fares, including the use of global positioning system metering, require taxicab companies to disclose fares, fees, or rates to the customer before the customer accepts the ride, and authorize a taxicab company to disclose fares, fees, or rates on its Internet Web site or cellular telephone application. g) Require local rules and regulations adopted prior to AB 650 Page 4 July 1, 2016, ensuring adequate service levels to all areas of a city or county's jurisdiction and promoting the use of taxicab transportation services by individuals covered under the Americans with Disabilities Act of 1990 to remain in effect. 3)State the intent of the Legislature as the following: that the regulation of taxicab transportation services be modernized in order for taxicabs to better compete with all for-hire modes of transportation; that taxicab regulation be moved from local authorities to one state agency coinciding with the Governor's reorganization of transportation; that duties and responsibilities for the regulation of taxicab transportation services be established by state departments that handle all other modes of for-hire transportation; that the Governor propose the specific budget and statutory changes needed to establish duties and responsibilities to the agency that handles all other modes of for-hire transportation; that conforming changes be made in existing law; and that a city or county not impose any rule or regulation governing taxicab transportation service that are inconsistent with or in addition to the requirements established by state departments within the agency that handles all other modes of for-hire transportation. 4)Make findings and declarations relating to the relative levels of regulation between taxicab transportation services and other modes of for-hire transportation. EXISTING LAW: 1)Requires every city or county to protect the public health, safety, and welfare by adopting an ordinance or resolution in regard to taxicab transportation services rendered in vehicles designed for carrying not more than eight persons, excluding AB 650 Page 5 the driver, which is operated within the jurisdiction of the city or county. 2)States that each city or county is required to provide for, but is not limited to providing for, all of the following: a) A policy for entry into the business of providing taxicab transportation service, as specified; b) The establishment or registration of rates for the provision of taxicab transportation service; and, c) A mandatory controlled substance and alcohol testing certification program. 3)Authorizes each city or county to levy service charges, fees, or assessments in an amount sufficient to pay for the costs of carrying out an ordinance or resolution adopted in regard to taxicab transportation services. 4)Authorizes each city or county to adopt additional requirements for a taxicab to operate in its jurisdiction. 5)Generally vests the CPUC with regulatory authority over specified modes of for-hire transportation, including passenger stage corporations, transportation network companies (TNCs) and other charter-party carriers. AS PASSED BY THE ASSEMBLY, this bill added the "Blue Grass Stakes" to the group of stake races in Horse Racing Law which are exempt from the 50-race per day limit on imported races. AB 650 Page 6 FISCAL EFFECT: Unknown COMMENTS: Existing law requires local governments to regulate taxicab transportation services. Under this requirement, cities and counties can tailor their local rules and regulations to the specific needs and conditions of their particular jurisdictions. By contrast, other forms of for-hire transportation that provide generally similar services, such as TNCs, are regulated at the state level by the CPUC. This results in uniform standards statewide for those carriers and irregular standards for taxicabs that vary from local jurisdiction to local jurisdiction. In response to what the author characterizes as a "severe competitive disadvantage" inflicted upon taxicabs by "patchwork" local regulation, this bill would sunset the authority of cities and counties to regulate taxicab transportation services and freeze those regulations as they exist on taxicabs today. Under this bill, fees for the issuance of taxi driver permits would be capped, and local authorities would be prohibited from regulating the pickup and drop off of prearranged taxicab trips, consistent with the treatment of other forms of for-hire transportation regulated at the state level. Cities and counties would still be allowed to enforce existing local requirements on ensuring adequate service levels to all areas in their jurisdictions and to individuals covered under the Americans with Disabilities Act. This prohibition on local regulation would not apply to the city and county of San Francisco, due to the infringement on the property rights associated with their unique taxi medallion system. AB 650 Page 7 In June of 2016, the Governor announced his intention to transfer functions relating to the regulation of for-hire transportation from the CPUC to the California State Transportation Agency (CalSTA) and its constituent departments, including the Department of Motor Vehicles (DMV) and the California Highway Patrol (CHP), through the Governor's Reorganization Plan process (GRP). This bill would state the intent of the Legislature that the regulation of taxicab transportation services be included in the GRP and that taxicabs be regulated by the same state agency that regulates all other forms of for-hire transportation. Details relating to the GRP have yet to be announced, although the process is expected to begin in early 2017. Due to the uncertainty relating to the timeline of the GRP process, it is unclear when CalSTA will be vested with the authority and requirement to regulate for-hire transportation services. If the Governor chooses to include the transfer of taxicab regulation to the state level in the GRP and its subsequent policy changes, as stated in the declaration of the Legislature's intent of this bill, CalSTA and its departments would then have to evaluate the myriad existing local regulations and requirements and adapt them into a statewide regulatory scheme, while also adopting the necessary regulations needed to transfer CPUC's regulatory framework to CHP and DMV, as initially proposed by the Governor. This process could be a lengthy one. Between awaiting the completion of the GRP process and the implementation of all subsequent, conforming legislative and regulatory changes, the time for which taxicabs would be subject only to the local regulations that existed as of July 1, 2016, and the exceptions set forth in this bill - with no possibility of further local regulation - could be months or even years. While the period in which taxicab regulations would be frozen may be long, it may be worth it to level the playing field between taxis and other modes of for-hire transportation. AB 650 Page 8 The League of California Cities has expressed strong opposition to limiting taxicab transportation service regulation by local authorities, as such an action restricts the ability of cities and counties to address local transportation needs and cover the cost of enforcement. Additionally, while the Taxicab Paratransit Association of California supports this bill, some elements of the taxicab industry believe easing the geographic requirements on the origin of trips will give certain taxicab companies unfair advantages over others. GOVERNOR'S VETO MESSAGE: I am returning Assembly Bill 650 without my signature. This bill removes significant regulation of taxicabs by cities and counties and declares the intent of the Legislature to transfer the regulation of taxicabs to the state. This bill fundamentally alters the long-standing regulation of taxicabs by cities and counties and makes the determination that this responsibility should be shifted to the state. I do not believe that such a massive change is justified. Analysis Prepared by: Justin Behrens / TRANS. / (916) 319-2093 FN: 0005127 AB 650 Page 9