BILL ANALYSIS ------------------------------------------------------------ |SENATE RULES COMMITTEE | AB 2762| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 445-6614 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ THIRD READING Bill No: AB 2762 Author: Assembly Utilities and Commerce Committee Amended: 8/7/00 in Senate Vote: 21 SENATE ENERGY, U.&C. COMMITTEE : 8-0, 6/13/00 AYES: Bowen, Alarcon, Brulte, Kelley, Mountjoy, Murray, Peace, Solis SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8 ASSEMBLY FLOOR : 74-0, 5/11/00 - See last page for vote SUBJECT : Common carriers: passenger vehicle SOURCE : California Bus Association DIGEST : This bill authorizes the Public Utilities Commission to establish a uniform fee for the passenger vehicle operators class on a basis other than revenue. ANALYSIS : Current law establishes a program run by the California Public Utilities Commission (PUC) 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 PUC to move away from a revenue-based assessment system and to use a system that's based on a per-vehicle assessment. CONTINUED AB 2762 Page 2 The bill declares that it is declarative of existing law and nothing in its provisions restrict the PUC from establishing other carrier classes, as specified. 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 one percent of the carrier's 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 PUC the option of calculating the fee on a per-vehicle basis instead of a gross revenue basis. Comments 1. Cover the Costs . The California Bus Association, the sponsor of this bill, believes allowing the PUC 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 PUC's collection of fees to cover the costs of this program is a zero sum game. The PUC 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 PUC 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 AB 2762 Page 3 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. FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: No SUPPORT : (Verified 8/8/00) California Bus Association (source) ASSEMBLY FLOOR AYES: Aanestad, Ackerman, Alquist, Aroner, Ashburn, Baldwin, Bates, Bock, Brewer, Briggs, Calderon, Campbell, Cardenas, Cardoza, Cedillo, Corbett, Correa, Cox, Cunneen, Davis, Dickerson, Ducheny, Dutra, Firebaugh, Floyd, Gallegos, Granlund, Havice, Honda, House, Jackson, Kaloogian, Keeley, Knox, Kuehl, Leach, Lempert, Leonard, Longville, Lowenthal, Machado, Maddox, Maldonado, Margett, Mazzoni, McClintock, Migden, Nakano, Olberg, Oller, Robert Pacheco, Rod Pacheco, Papan, Pescetti, Reyes, Romero, Runner, Scott, Shelley, Steinberg, Strickland, Strom-Martin, Thompson, Thomson, Torlakson, Villaraigosa, Vincent, Washington, Wayne, Wesson, Wiggins, Wildman, Zettel, Hertzberg NC:kb 8/9/00 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END ****