BILL ANALYSIS 1
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SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
DEBRA BOWEN, CHAIRWOMAN
AB 2762 - Assembly Utilities & Commerce Hearing
Date: June 13, 2000 A
As Amended: June 6, 2000 FISCAL
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DESCRIPTION
Current law establishes a program run by the California
Public Utilities Commission (CPUC) to ensure the safe
operation of passenger carriers (i.e. SuperShuttle,
limousines, charter busses). This program is paid for by
fees on the carriers which are based on a uniform
percentage of their individual gross revenues.
This bill permits the CPUC to move away from a
revenue-based assessment system and to use a system that's
based on a per-vehicle assessment.
BACKGROUND
The CPUC regulates passenger carriers to ensure their
drivers are properly licensed, the vehicles are properly
maintained, and the companies are properly insured.
Certain passenger carriers are also subject to rate
regulation. These activities are funded by a fee of
one-half of 1% of the carriers gross revenue - a fee that
raises about $3 million per year.
Under the current system, the CPUC determines how much
money it needs in order to operate its inspection program,
then calculates the fee necessary to provide that level of
funding. This bill doesn't change that process, but it
gives the CPUC the option of calculating the fee on a
per-vehicle basis instead of a gross revenue basis.
QUESTIONS
1.Since this bill gives the CPUC the option of raising the
amount of money it needs to operate its existing program
in a different manner, certain companies will probably
pay more and others will probably pay less than they're
paying should the CPUC exercise that option. The
question is, who could "win" and who could "lose" should
the CPUC change its formula?
2.Is the current system of funding the inspection program
by assessing a fee based on a percentage of each
company's revenues unfair, since it means each company
will pay a different amount per vehicle inspection even
though the cost for each inspection is roughly the same?
COMMENTS
1)Cover The Costs . The California Bus Association, the
sponsor of this bill, believes allowing the CPUC to fund
its program on a "per vehicle" basis is a fairer way of
operating the program. While the entire program is only
supposed to be funded at a level that covers its costs,
doing it on a per company revenue basis means some
companies are over paying for the cost of regulating
their vehicles while other companies are under paying.
2)The Pie Stays The Same - It's How You Cut The Pieces .
The CPUC's collection of fees to cover the costs of this
program is a zero sum game. The CPUC incurs a given
level of expenses to do its work and those expenses are
covered by a fee assessed on the revenues of the carriers
who are being regulated and inspected.
Presumably, the sponsor of this bill believes that if the
CPUC exercises the authority provided to it in this bill,
it will reduce the fees paid by bus companies to fund
this program. If that does indeed occur, the revenue
loss will be made up by other passenger carriers.
3)Fairness Is In The Eye Of The Beholder . Setting fees on
a per-vehicle basis rather than a percentage of revenue
basis has the advantage of administrative simplicity and
eliminates the need for carriers to report their gross
operating revenues. Presumably, the cost of regulating
passenger carriers is driven by the vehicles inspected,
not by the gross revenue of the individual company.
ASSEMBLY VOTES
Assembly Utilities and Commerce Committee(8-0)
Assembly Appropriations Committee (21-0)
Assembly Floor (74-0)
POSITIONS
Sponsor:
California Bus Association
Support:
None on file.
Oppose:
None on file.
Randy Chinn
AB 2762 Analysis
Hearing Date: June 13, 2000