BILL ANALYSIS                                                                                                                                                                                                    

                                                                    AB 2603

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          Date of Hearing:  April 20, 2016


                                  Mike Gatto, Chair

          AB 2603  
          (Nazarian) - As Amended April 11, 2016

          SUBJECT:  Public Utilities Commission: Passenger Charter-party  
          Carriers' Act: complaint registration and resolution mechanism

          SUMMARY:  Requires the California Public Utilities Commission  
          (CPUC) to establish a telephone communication service for the  
          public to communicate any concern or complaints related to  
          charter party carriers (CPCs), including transportation network  
          companies (TNCs).  Specifically, this bill: 

          1)Requires the CPUC to establish a telephone communications  
            service that is available to members of the public to  
            communicate to the CPUC any concerns, or register complaints,  
            regarding service provided by CPCs, including TNCs. 

          2)Requires the CPUC to designate a telephone number for members  
            of the public to dial to communicate their concerns or  

          3)Requires the CPUC to require each CPC to include the telephone  
            number designated by the CPUC on all contracts for service  
            made after January 1, 2018. 

          4)Requires the CPUC to require that the customer, of a TNC or  
            other CPC that arranges for transportation utilizing  


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            application software, be notified of the existence of, and  
            purpose for, the telephone number as part of the electronic  

          5)Authorizes the CPUC to maintain additional, alternative means  
            for members of the public to express concerns or register  

          6)Requires the CPUC to maintain a record of all concerns and  
            complaints communicated to the CPUC relative to CPCs,  
            including TNCs. 

          7)Requires the CPUC to establish rules or guidelines as to what  
            concerns and complaints do or do not raise matters of serious  

          8)Requires the CPUC to diligently attempt to informally resolve  
            the concern or complaints, that do not raise a matter of  
            serious concern, and requires the CPUC to maintain a record of  
            whether the concern or complaint was resolved. 

          9)Requires the CPUC to investigate each concern or complaint  
            made to the CPUC that raises a matter of serious concern and  
            initiate and conclude appropriate enforcement action with  
            respect to any specified violation or a specified rule adopted  
            by the CPUC. 

          10)Requires the CPUC to maintain a record of all concerns and  
            complaints that result in an investigation, a description of  
            the investigation conducted by the CPUC, and the result of the  

          EXISTING LAW:  

          1)Establishes the "Passenger Charter-Party Carriers Act," which  
            directs the CPUC to issue permits or certificates to CPCs,  
            investigate complaints against carriers, and cancel, revoke,  
            or suspend permits and certificates for specific violations.   


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            (Public Utilities Code Section 5381 et seq.)

          2)Defines "charter party carriers of passengers" as every person  
            engaged in the transportation of person by motor vehicle for  
            compensation, whether in common or contract carriage, over any  
            public highway in the state.  (Public Utilities Code Section  
          3)Defines a "transportation network company" to mean an  
            organization, including, but not limited to, a corporation,  
            limited liability company, partnership, sole proprietor, or  
            any other entity, operating in California that provides  
            prearranged transportation services for compensation using an  
            online-enabled application or platform to connect passengers  
            with drivers using a personal vehicle. (Public Utilities Code  
            Section 5431)

          FISCAL EFFECT:  Unknown.


          1)Background:  California Constitution, Article XII establishes  
            the CPUC and grants it the authority to regulate public  
            utilities.  In addition, the CPUC has more limited authority  
            over other corporations, including railroads, rail transit,  
            and CPCs, among others.  Beginning as early as 2009, a new  
            model of transportation known as TNCs allowed patrons to  
            prearrange transportation services through an online  
            application on their smartphone or computer.  Although TNCs do  
            not neatly fall into the conventional definition of a CPC, the  
            CPUC believes that TNCs are currently providing passengers  
            transportation for compensation, and reasonably concludes that  
            TNCs are CPCs, therefore, falling under the CPUC's existing  
            jurisdiction over such services. 


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          2)CPUC Transportation Consumer Complaint Unit:  The CPUC's  
            Transportation Consumer Complaint Unit (Complaint Unit) is  
            tasked with resolving consumer complaints regarding  
            transportation service, costs, fraud and other issues.   The  
            Complaint Unit has an individual 800 number to receive  
            complaints regarding passenger carriers and a second 800  
            number for complaints regarding moving companies.  If the  
            Complaint Unit receives a complaint regarding an unlicensed  
            carrier, the complaint is referred to the Transportation  
            Enforcement Unit for investigation.

            According to the CPUC, in 2015 it received 489 complaints  
            related to moving companies and passenger carriers.  The CPUC  
            requires moving companies to provide consumers with a guide  
            which includes the Transportation Consumer Complaint 800  
            numbers.  The CPUC also requires TNCs to provide the 800  
            number regarding passenger carriers to its consumers.

            This bill requires the CPUC to establish a telephone  
            communications service that is available to members of the  
            public to communicate to the CPUC any concerns, or register  
            complaints, regarding service provided by CPCs, including  
            TNCs, as specified. 

          3)Licensing and Regulatory Number:  Until recently, the CPUC  
            also maintained a phone line for carriers with questions  
            regarding the status of the license approval or guidance on  
            how to comply with regulatory requirements.  Due to the high  
            volume of applications and request, as well as the lack of  
            staff resources, the CPUC closed the carrier phone line and  
            instructed carriers to visit the CPUC Web site for FAQs, or  
            email their question to a designed inbox.  It is unclear if a  
            dedicated phone line is still the best option for carriers and  
            consumers to adequately request and receive information.  It  
            is also unclear if the CPUC has the necessary staff to resolve  
            consumer complaints in a timely manner.


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            This bill requires the CPUC to maintain all records and  
            resolve, or investigate, all complaints related to CPCs and  
            TNCs, as specified. 

          4)2014 State Auditor Report:  In June 2014, the California State  
            Auditor release a report examining the CPUC's Transportation  
            Enforcement Branch, within the Safety and Enforcement  
            Division, effort to regulate passenger carriers, as well as  
            its use of fees collected from carriers.  The report found  
            that the branch did not provide sufficient oversight of CPCs  
            and Passenger Stage Corporations to ensure consumer safety and  
            issued a series or recommendation to address the issues. 

          5)Arguments in Support:  According to the Greater California  
            Livery Association, "California citizens and visitors  
            utilizing the service of the State of California sanctioned  
            and regulated transportation services should have the  
            opportunity to share concerns, comments, and complaints  
            regarding the drivers and/or vehicles providing those  
            transportation services; and be comforted to know that those  
            concerns, comments and complaints are being addressed ?  
            Assembly Bill 2603 will aid the CPUC in the licensing,  
            regulation and enforcement of regulations pertinent to the  
            charter-party carrier industry." 

          6)Prior Legislation: 

            SB 541 (Hill), Chapter 718, Statute of 2015:  Codifies the  
            State Auditor report's recommendation on strengthening the  
            CPUC's oversight of transportation related activities. 



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          Greater California Livery Association


          None on file.

          Analysis Prepared by:Edmond Cheung / U. & C. / (916) 319-2083