LEGISLATIVE SUBCOMMITTEE RECOMMENDATION: OPPOSE UNLESS AMENDED

SUMMARY OF BILL:

The bill would require charter-party carriers that provide transportation to or from an airport to have their drivers undergo a criminal history background check for certain specified crimes. The bill would also require the Commission to issue a credential for those drivers once the background checks have been completed. Airports would be prohibited from requiring criminal background checks on charter-party carrier drivers.

SUMMARY OF SUPPORTING ARGUMENTS FOR RECOMMENDATION:

· The Commission recognizes the authors' and sponsors' intent to improve security at airports and safety to passengers of charter-party carrier vehicles. However, as currently written, this bill falls short in that regard. At the same time, the bill prohibits airports from conducting their own, possibly more thorough, background checks of drivers operating vehicles at the airports. Giving charter-party carriers responsibility for issuing identification credentials to their drivers could seriously undermine the entire program.

· A better approach would be to coordinate with California's major airports on how to conduct a uniform standard for driver background checks.

SUMMARY OF SUGGESTED AMENDMENTS:

· This bill should be amended to address several concerns, which are explained in detail below.

DIVISION ANALYSIS (Consumer Protection & Safety Division):

· The Commission is responsible for licensing charter-party carriers of passengers under the Passenger Charter-Party Carriers' Act. Charter-party carriers furnish limousines-for-hire or passenger charter transportation service in motor vehicles. Charter-party carriers do not include vehicles on a set schedule or between fixed termini, taxi cabs, car rentals, or a city bus. Further, charter-party carriers typically provide different sized vehicles to take a scheduled group of people to another location and/or back. The group would usually reserve the vehicle as a group, and would not reserve a "seat" individually.

· The requirements for obtaining a charter-party carrier permit or certificate include filing evidence of automobile liability and workers' compensation insurance, undergoing a California Highway Patrol (CHP) safety inspection (for vehicles seating more than 10), participating in the Commission's drug and alcohol testing program for drivers, and enrolling drivers in the Department of Motor Vehicles (DMV) Pull-Notice System (a program for monitoring the driving records of employee drivers).

This bill would expand the Commission's responsibilities by requiring the Commission to establish a fingerprint-based criminal background investigation process to be employed by charter-party carriers for their drivers. As a condition for being issued a charter-party carrier permit or certificate, an applicant would have to certify that its drivers have successfully completed a criminal history background check and have been issued an identification credential.

· The Commission has an investigative staff responsible for the enforcement of laws and regulations applicable to charter-party carriers. Carriers found to have committed violations are subject to administrative fines imposed by the Commission as well as criminal and civil penalties levied by the courts. The Commission's investigative staff includes five positions authorized in the 2007-08 Budget to be used specifically for passenger carrier enforcement activities at the state's airports.

· This bill would require Commission staff investigators assigned to airport enforcement to assist airport police to ensure that only "qualified" drivers operate at the airports. Carriers that employ drivers who have not completed a background check would be subject to a penalty up to $2,000 per violation, or suspension or revocation of operating authority for repeated violations. If a driver fails to produce the identifying credential at the request of law enforcement officers at the airport, the driver and the carrier would be subject to a penalty of up to $250 per incident.

· The proposed criminal background checks would apparently improve security at the airports. The seven crimes for which a driver could be disqualified relate very specifically to airport operations or aircraft:

¬ Unlawful transportation of a hazardous material.

¬ Carrying a weapon or explosive aboard an aircraft.

¬ Unlawful entry into an aircraft or airport area that serves air carrier or foreign air carriers contrary to established security requirements.

¬ Destruction of an aircraft or aircraft facility.

¬ Violence at international airports.

¬ Unlawful possession, use, sale, distribution, or manufacture of an explosive, incendiary device, or assault weapon.

¬ Felony arson.

· Some airports reportedly are considering establishing their own programs for conducting criminal background checks of charter-party carrier drivers. While drivers do not have access to non-public airport areas, the airports nonetheless believe the drivers should be checked and carry an identification credential in the interest of homeland security. Presently, some carriers serve several airports. The limousine industry does not want carrier drivers to be subject to multiple airport background checks. It would rather have the Commission, as the state licensing agency for charter-party carriers, carry out this function.

· However, there are several areas where the bill falls short or requires clarification or correction:

1) An applicant for a charter-party carrier permit or certificate that will operate at airports would be required to certify that its drivers have successfully completed a criminal history background check and have been issued an identification credential (which must include the carrier's Commission-issued license number). An applicant is not authorized to commence operations until a permit or certificate is issued. Therefore, there is a time gap between getting a permit and getting credentialed.

2) A significant number of existing charter-party carriers, and the majority of new applicants for authority, have only one vehicle, which they drive themselves. The bill is not clear how these carriers would fit into the new background check scheme. It refers to drivers, or prospective drivers, employed by a charter-party carrier. Are charter-party carrier owner-drivers supposed to submit their fingerprints to Department of Justice (DOJ) for the purpose of conducting a background check on themselves? Will they be issuing themselves an identification credential?

3) Passenger stage corporations (PSCs) are not included in the bill. The majority of the 200+ licensed PSCs operate at airports, most conducting door-to-door shuttle service (such as SuperShuttle).

4) The bill provides that a person who is disqualified to be employed as a carrier driver may request a hearing by the Commission to challenge the accuracy of the criminal history background investigation. The accuracy of criminal history information is a matter the affected person would have to resolve with DOJ (which has a process in place for challenging criminal history information), not the Commission.

5) The list of disqualifying crimes is very narrow. In all likelihood, very few drivers will be found to have violated any of these crimes. In this regard, the checks will provide little in the way of true public protection. A driver could have been convicted of such serious crimes as murder, robbery, burglary, rape, or assault, and not face disqualification under terms of the bill.

· An alternative means of addressing the issue would be for the airports to conduct the driver background checks, to issue a credential, and (importantly) to accept one another's credential as valid driver identification. Airports are already equipped to conduct criminal history checks and issue identification credentials. This is a much more secure method of ensuring that drivers undergo a background check. The security process under this bill could be undermined if charter-party carriers issue credentials to drivers that have not completed a background check. While those carriers would be penalized if caught, they may take the risk rather than go through the time and expense of checking each driver before employing them for airport service. (The checks cost about $70 - $80 each, of which part goes to the DOJ and the other part goes to the Live Scan Provider, which allows fingerprints to be electronically transmitted to the DOJ in a matter of seconds.)

PROGRAM BACKGROUND:

· Criminal background checks of drivers has been a topic of discussion between the limousine industry and airports for several years. It is actually part of a larger ongoing dispute between the industry and some of the major airports about the degree to which the airports can regulate limousine services that operate on airport property. Public Utilities Code Section 5374 addresses this issue, but the statute is not entirely clear on the limits of the airports' authority. The industry wants to put the issue of criminal background checks to rest by placing responsibility for a program squarely with the Commission as the state licensing authority for charter-party carriers.

LEGISLATIVE HISTORY:

· AB 2858 (Ridley-Thomas, 2004) would have required that drivers and key employees of passenger stage corporations and charter-party carriers to obtain security clearances and provide uniformity in credentialing among charter-party carriers. The bill failed in the Senate Public Safety Committee.

· AB 1645 (Ridley-Thomas, 2003) would have established a process at the Commission to ensure greater security is exercised when companies hire and employ key employees and drivers to operate vehicles carrying paying passengers to and from airports. The bill died in the Assembly Appropriations Committee.

STATUS:

AB 709 is scheduled to be heard in the Assembly Utilities and Commerce Committee on April 27, 2009.

SUPPORT/OPPOSITION:

Support: Greater California Livery Association (sponsor)

Opposition: None on file

STAFF CONTACTS:

Michael Poe, Legislative Liaison, OGA (916) 327-7788 mdp@cpuc.ca.gov

Date: April 27, 2009

BILL LANGUAGE:

BILL NUMBER: AB 709 AMENDED

BILL TEXT

AMENDED IN ASSEMBLY APRIL 22, 2009

INTRODUCED BY Assembly Member Hill

Members Lieu and Swanson

FEBRUARY 26, 2009

An act to amend Sections 5371.4 and 5374 of, and add Section

5374.1 to, the Public Utilities Code, relating to charter-party

carriers.

LEGISLATIVE COUNSEL'S DIGEST

AB 709, as amended, Hill Lieu .

Charter-party carriers of passengers: driver background checks.

The Transportation Security Administration of the United States

Department of Transportation, administered by the Under Secretary of

Transportation for Security, is responsible for carrying out measures

to ensure aviation security, including hiring, training, and

retention of personnel for the security screening of passengers and

baggage and conducting background checks for individuals with access

to secure areas of airports regularly serving an air carrier holding

a certificate issued by the Secretary of Transportation. Individuals

with specified criminal backgrounds or other factors as determined by

the under secretary, are disqualified from employment with an air

carrier or airport operator, where they will have access to secured

areas. The under secretary is required to adopt measures to improve

secured-area access control, including working with airport operators

to strengthen access control points in secured areas, including air

traffic control operations areas, maintenance areas, crew lounges,

baggage handling areas, concessions, and catering delivery areas.

The California Constitution establishes the Public Utilities

Commission, with jurisdiction over all public utilities, and

authorizes the Legislature, unlimited by the other provisions of the

California Constitution, to confer additional authority and

jurisdiction upon the commission, that is cognate and germane to the

regulation of public utilities. Charter-party carriers of passengers

are subject to the jurisdiction and control of the commission under

the Passenger Charter-Party Carriers' Act. The act requires a

charter-party carrier of passengers to obtain from the commission a

certificate that public convenience and necessity require the

operation or a permit issued by the commission, and to operate within

the state on a prearranged basis, as defined. The act prohibits the

commission from issuing or renewing a permit unless the applicant has

met specified requirements, including the submission of specified

filing fees. Existing law prohibits the governing body of any airport

from imposing any vehicle safety, licensing, or insurance

requirements on charter-party carriers operating limousines that are

more burdensome than those imposed by the commission, but authorizes

the governing board to require a charter-party carrier operating

limousines to obtain an airport permit for operating authority at the

airport, and to adopt and enforce reasonable and nondiscriminatory

local airport rules, regulations, and ordinances pertaining to

access, use of streets and roads, parking, traffic control, passenger

transfers, trip fees, and occupancy, and the use of buildings and

facilities, that are applicable to charter-party carriers operating

limousines on airport property.

This bill would require the commission to adopt rules for criminal

history background checks of drivers, or applicants to be a driver,

for a charter-party carrier of passengers that provides passenger

transportation to and from any airport regularly serving an air

carrier holding a certificate issued by the United States Secretary

of Transportation (commercial airport) and would disqualify persons

convicted of specified crimes from being drivers. The bill

would require the commission to develop and make available to

charter-party carriers of passengers a list of qualified vendors

approved to investigate and certify the background of employees and

candidates for employment as drivers. The bill would

require that the rules adopted by the commission do the following:

(1) require that each driver, and each applicant who is offered

employment as a driver, of a charter-party carrier providing

passenger transportation to and from a commercial airport submit

fingerprints and other pertinent information to the approved

vendor, (2) require the vendor to transmit the fingerprints to the

Department of Justice, (3) require the Department of Justice to

conduct the check, and forward a request for federal level criminal

offender record information to the Federal Bureau of Investigation,

(4) require the Department of Justice to provide specified

information to the vendor, (5) require the vendor to review all

information received from the Department of Justice and forward that

information to the charter-party carrier of passengers, (6)

for the purpose of obtaining criminal history information, (2)

require that a charter-party carrier of passengers only employ

as drivers those individuals that have successfully completed the

criminal history background investigation, (7)

(3) require the charter-party carrier of passengers

provide an identification credential to each employee, or applicant

that becomes an employee, that successfully completes the criminal

background investigation process, and (8) (4)

require all drivers that are employed by a charter-party

carrier of passengers to carry identification credentials at all

times on airport property. The bill would require any applicant for

certification or a permit to operate as a charter-party carrier of

passengers to certify that its drivers have successfully completed a

criminal history background check and have been issued an

identification credential in accordance with the above-described

requirements. The bill would prohibit the governing body of any

airport from imposing requirements on charter-party carriers

providing transportation to and from the airport regarding criminal

background checks on drivers, but would authorize the governing body

to request a list of all drivers to whom identification credentials

have been issued.

Under existing law, a violation of the Passenger Charter-Party

Carriers' Act or an order or direction of the commission pursuant to

the act is a crime.

Because the provisions of this bill are within the act and require

action by the commission to implement its requirements, a violation

of these provisions would impose a state-mandated local program by

creating a new crime.

The California Constitution requires the state to reimburse local

agencies and school districts for certain costs mandated by the

state. Statutory provisions establish procedures for making that

reimbursement.

This bill would provide that no reimbursement is required by this

act for a specified reason.

Vote: majority. Appropriation: no. Fiscal committee: yes.

State-mandated local program: yes.

THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

SECTION 1. It is the intent of the Legislature to reaffirm the

state's commitment to homeland security with respect to charter-party

carriers of passengers and their employees who transport passengers

to and from airports served by commercial air carriers. The purpose

of this act is to ensure that uniform procedures and rules are in

place consistent with the airport security programs operated by

well-run airports in this state, to assure the traveling public that

drivers of charter-party carriers of passengers have been through

security clearances.

SEC. 2. Section 5371.4 of the Public Utilities Code is amended to

read:

5371.4. (a) The governing body of any city, county, or city and

county may not impose a fee on charter-party carriers operating

limousines. However, the governing body of any city, county, or city

and county may impose a business license fee on, and may adopt and

enforce any reasonable rules and regulations pertaining to operations

within its boundaries for, any charter-party carrier domiciled or

maintaining a business office within that city, county, or city and

county.

(b) The governing body of any airport may not impose vehicle

safety, vehicle licensing, or insurance requirements on charter-party

carriers operating limousines that are more burdensome than those

imposed by the commission. However, the governing board of any

airport may require a charter-party carrier operating limousines to

obtain an airport permit for operating authority at the airport.

(c) Notwithstanding subdivisions (a) and (b), the governing body

of any airport may adopt and enforce reasonable and nondiscriminatory

local airport rules, regulations, and ordinances pertaining to

access, use of streets and roads, parking, traffic control, passenger

transfers, trip fees, and occupancy, and the use of buildings and

facilities, that are applicable to charter-party carriers operating

limousines on airport property.

(d) This section does not apply to any agreement entered into

pursuant to Sections 21690.5 to 21690.9, inclusive, between the

governing body of an airport and charter-party carriers operating

limousines.

(e) The commission shall conduct an audit and review of the annual

gross revenues earned by charter-party carriers operating limousines

for the purpose of ascertaining whether the imposition of additional

fees based on a charter-party carrier's gross annual revenues would

place an undue administrative or financial burden on the

charter-party carrier industry. The commission shall report its

findings to the Legislature on or before June 30, 1992.

(f) The governing body of any airport shall not impose a fee based

on gross receipts of charter-party carriers operating limousines.

(g) Notwithstanding subdivisions (a) to (f), inclusive, nothing in

this section prohibits a city, county, city and county, or the

governing body of any airport, from adopting and enforcing reasonable

permit requirements, fees, rules, and regulations applicable to

charter-party carriers of passengers other than those operating

limousines.

(h) Notwithstanding subdivisions (a) to (f), inclusive, a city,

county, or city and county may impose reasonable rules for the

inspection of waybills of charter-party carriers of passengers

operating within the jurisdiction of the city, county, or city and

county, for purposes of verifying valid prearranged travel.

(i) For the purposes of this section, "limousine" includes any

sedan or sport utility vehicle, of either standard or extended

length, with a seating capacity of not more than 10 passengers

including the driver, used in the transportation of passengers for

hire on a prearranged basis within this state.

(j) The governing body of an airport may not require criminal

history background checks on a driver for a charter-party carrier

providing transportation to and from airports regarding criminal

background checks on drivers, but may request a list of all drivers

to whom identification credentials have been issued pursuant to

Section 5374.1.

SEC. 3. Section 5374 of the Public Utilities Code is amended to

read:

5374. (a) (1) Before a permit or certificate is issued or

renewed, the commission shall require the applicant to establish

reasonable fitness and financial responsibility to initiate and

conduct or continue to conduct the proposed or existing

transportation services. The commission shall not issue or renew a

permit or certificate pursuant to this chapter unless the applicant

meets all of the following requirements:

(A) It is financially and organizationally capable of conducting

an operation that complies with the rules and regulations of the

Department of the California Highway Patrol governing highway safety.

(B) It is committed to observing the hours of service regulations

of state and, where applicable, federal law, for all persons, whether

employees or subcarriers, operating vehicles in transportation for

compensation under the certificate.

(C) It has a preventive maintenance program in effect for its

vehicles used in transportation for compensation that conforms to

regulations of the Department of the California Highway Patrol in

Title 13 of the California Code of Regulations.

(D) It participates in a program to regularly check the driving

records of all persons, whether employees or subcarriers, operating

vehicles used in transportation for compensation.

(E) It has a safety education and training program in effect for

all employees or subcarriers operating vehicles used in

transportation for compensation.

(F) It will maintain its vehicles used in transportation for

compensation in a safe operating condition and in compliance with the

Vehicle Code and with regulations contained in Title 13 of the

California Code of Regulations relative to motor vehicle safety.

(G) It has filed with the commission the certificate of workers'

compensation insurance coverage or statement required by Section

5378.1.

(H) It has provided the commission an address of an office or

terminal where documents supporting the factual matters specified in

the showing required by this subdivision may be inspected by the

commission and the Department of the California Highway Patrol.

(I) It provides for a mandatory controlled substance and alcohol

testing certification program as adopted by the commission pursuant

to Section 1032.1.

(J) For any applicant providing transportation to and from any

airport regularly serving an air carrier holding a certificate issued

by the United States Secretary of Transportation, it certifies that

its drivers have successfully completed a criminal history background

check and have been issued an identification credential in

accordance with Section 5374.1.

(2) With respect to subparagraphs (B) and (F) of paragraph (1),

the commission may base a finding on a certification by the

commission that an applicant has filed, with the commission, a sworn

declaration of ability to comply and intent to comply.

(3) The commission may require, as a precondition to the issuance

of a permit or certificate, the procurement of a performance bond

sufficient to facilitate the collection of fines, penalties, and

restitution related to enforcement actions that can be taken against

the applicant.

(b) In addition to the requirements in subdivision (a),

charter-party carriers shall meet all other state and, where

applicable, federal regulations as prescribed.

(c) The commission may delegate to its executive director or that

executive director's designee the authority to issue, renew, or

authorize the transfer of, charter-party carrier permits or

certificates and to make the findings specified in subdivision (a)

that are necessary to that delegated authority.

SEC. 4. Section 5374.1 is added to the Public Utilities Code, to

read:

5374.1. (a) (1) The commission shall adopt rules requiring that a

complete criminal history background check be conducted and an

identification credential be issued for each employee, or applicant

for employment, who is, or is applying to be, a driver for a

charter-party carrier of passengers that provides passenger

transportation to and from any airport regularly serving an air

carrier holding a certificate issued by the United States Secretary

of Transportation. The criminal history background check shall use

criminal history information to determine whether employees and

applicants for employment as drivers have a conviction for a crime

that disqualify them from being drivers because they would be a

threat to the safety of the public if employed as drivers of a

charter-party carrier of passengers.

(2) The rules shall require that a fingerprint-based criminal

history background investigation be used to determine past

convictions for the following specified criminal acts that disqualify

the employee or applicant for employment from serving as a driver of

passengers to the airport:

(A) Unlawful transportation of a hazardous material (49 U.S.C.

Sec. 46312).

(B) Carrying a weapon or explosive aboard an aircraft (49 U.S.C.

Sec. 46505).

(C) Unlawful entry into an aircraft or airport area that serves

air carriers or foreign air carriers contrary to established security

requirements (49 U.S.C. Sec. 46314).

(D) Destruction of an aircraft or aircraft facility (18 U.S.C.

Sec. 32).

(E) Violence at international airports (18 U.S.C. Sec. 37).

(F) Unlawful possession, use, sale, distribution, or manufacture

of an explosive, incendiary device, or assault weapon.

(G) Felony arson.

(3) Crimes where the conviction was obtained, or incarceration was

completed, more than 10 years prior to the date of application or

employment shall not be used or considered in making employment

determinations.

(4) For purposes of this section, a conviction means a plea or

verdict of guilty or a conviction following a plea of nolo

contendere.

(b) The commission shall develop and make available to

charter-party carriers of passengers a list of qualified vendors

approved to investigate and certify the criminal history background

of employees and candidates for employment as drivers for

charter-party carriers of passengers that provide passenger

transportation to and from an airport regularly serving an air

carrier holding a certificate issued by the United States Secretary

of Transportation.

(c)

(b) The rules shall require that a charter-party

carrier of passengers shall only employ an individual as a driver of

passengers to and from any airport regularly serving an air carrier

holding a certificate issued by the United States Secretary of

Transportation if that individual has successfully completed the

criminal history background investigation. This requirement shall

apply retroactively to drivers employed on or after January 1, 2009,

and to all future applicants. Employment of individuals as drivers

that have not successfully completed the criminal background

investigation constitutes a violation of the rules and shall subject

the charter-party carrier of passengers to civil penalties not to

exceed two thousand dollars ($2,000) per incident. Repeated

violations of this subdivision shall be grounds for revocation of the

charter-party carrier's certification or permit.

(d)

(c) The rules shall require that a charter-party

carrier of passengers require each driver, and each applicant who is

offered employment as a driver, of passengers to and from any airport

regularly serving an air carrier holding a certificate issued by the

United States Secretary of Transportation, to submit fingerprints

and other pertinent information, as required by the rules ,

to the approved vendor selected by the charter-party carrier of

passengers, for the purpose of obtaining criminal history

background information.

(e) The vendor shall transmit the fingerprints to the Department

of Justice. The Department of Justice shall conduct the check, and

forward a request for federal level criminal offender record

information to the Federal Bureau of Investigation. The Department of

Justice shall provide the following information to the vendor:

(1) Every conviction rendered against the applicant.

(2) Every arrest for an offense for which the Department of

Justice has determined that the applicant is presently awaiting

trial, or whether the applicant is incarcerated or has been released

on bail or on his or her own recognizance pending trial.

(3) Every warrant for the arrest of the applicant.

(f) The vendor shall review all information received from the

Department of Justice and forward that information to the

charter-party carrier of passengers. All

(d) All information received by

the vendor and charter-party carrier of passengers

commission shall be held as confidential, except that if

employment is terminated or denied based on criminal history

information, the charter-party carrier of passengers

commission shall notify the employee or

applicant of the disqualification, and provide a copy of the

history response and an explanation of the

termination to the employee, or the denial of employment to the

applicant. Employees and agents of a charter-party carrier of

passengers are prohibited from communicating to any other person any

information related to the disqualification of a driver, or applicant

for driver , except that upon request by law enforcement or

an airport authority, the charter-party carrier of passengers shall

provide access to the criminal history background information

. A person who is disqualified pursuant to this section may

request a hearing by the commission to challenge the accuracy of the

criminal history background investigation.

(g)

(e) The charter-party carrier of passengers shall

provide an identification credential to each employee, or applicant

that becomes employee, that successfully completes the criminal

history background investigation process. The identification

credential shall include the person's legal name, a photograph of the

person identified, the name of the charter-party carrier, and the

appropriate license number issued by the commission.

(h)

(f) The rules adopted by the commission shall provide

that all drivers that are employed by a charter-party carrier of

passengers shall carry identification credentials at all times on

airport property, and shall produce the credentials for inspection

upon the request of law enforcement officers at the airport property.

Failure to produce the credential at the request of law enforcement

officers at the airport is a violation of the rules and shall subject

the driver and the charter-party carrier of passengers to civil

penalties not to exceed two hundred and fifty dollars ($250) per

incident. Repeated violations of this subdivision shall be grounds

for revocation of the charter-party carrier's certificate or permit.

SEC. 5. No reimbursement is required by this act pursuant to

Section 6 of Article XIII B of the California Constitution because

the only costs that may be incurred by a local agency or school

district will be incurred because this act creates a new crime or

infraction, eliminates a crime or infraction, or changes the penalty

for a crime or infraction, within the meaning of Section 17556 of the

Government Code, or changes the definition of a crime within the

meaning of Section 6 of Article XIII B of the California

Constitution.