BILL ANALYSIS                                                                                                                                                                                                    



                                                                       


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                                 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.
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          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  







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            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

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