Jerry Kopel

KOPEL: HB 1227 A BIT WEAK, BUT IT'S A START

Review of Public Utilities Commission leads to looser leash on cab competition

Consumers in Denver and nearby counties should soon see whether passage of House Bill 1227 actually results in more choice when they call for taxicabs. The bill, sponsored by Rep. Alice Madden, D-Boulder, and Sen. Abel Tapia, D-Pueblo, grants another decade of life to the Public Utilities Commission under its scheduled Sunset review.

Under previous law, cab companies aspiring to licensure had to show the existing service was inadequate. HB 1227 shifts the burden to existing taxi firms, which must show the new company would be detrimental to public welfare in order to block a startup.

Here are some amended provisions: “... the granting of a certificate ... to operate a motor vehicle for hire as a taxicab within and between counties with a population of 70,000 or greater ... shall not be deemed to be an exclusive grant or monopoly, and the doctrine of regulated competition shall prevail ... to provide taxicab service within and between ... Adams, Arapahoe, Boulder, Broomfield, Denver, Douglas, El Paso and Jefferson (counties).

“The applicant shall have the initial burden of proving it is operational and financially fit to provide the proposed service. The applicant shall not be required to prove the inadequacy of existing taxicab service, if any, within the applicant’s proposed geographic area of operation.

“If the applicant sustains its initial burden of proof ... there shall be a rebuttable presumption of public need for the service, and the party or parties opposing the applicant shall bear the burden to prove that the public convenience and necessity does not require granting the application and that the issuance of the certificate would be detrimental to the public interest.”

I think the final version is weaker than the original bill. There is now only a “rebuttable presumption” resulting from the evidence of the proponents.

In Black’s Law Dictionary, “a disputable presumption, called also an inconclusive or rebuttable presumption is an inference of law which holds good until it is invalidated by (1) proof or (2) a stronger presumption.”

How much proof is needed to overcome a rebuttable presumption of public need for the service? A stronger presumption can defeat a rebuttable presumption. In my opinion, the evidentiary burden on the opponents is less than it was in the original bill.

Who can drive the taxicab? This was not an issue the Department of Regulatory Agencies (DORA) considered in its Sunset report on the PUC.

HB 1227 says someone would be unacceptable if, “the individual is not of good moral character as determined by the commission based on the results of the criminal history record check required ...”

Also disqualified would be anyone who “… has been convicted of a felony or misdemeanor involving moral turpitude, which includes but is not limited to sexual offenses against a child.”

The cross-reference on moral character is found in CRS 24-5-101 (2), which actually reduces the burden on the applicant by stating:

“The intent of this section is to expand employment opportunities for persons who, notwithstanding that fact of conviction of an offense, have been rehabilitated and are ready to accept the responsibilities of a law-abiding and productive member of society.”

Closing a loophole: The PUC regulates a whole host of public utilities, so its Sunset review also included a look at water companies. According to DORA, some investor-owned water utilities provide both water and sewer service to their customers.

A water corporation that supplies both water and sewer services to customers was previously not defined as a public utility. That allowed water corporations to “potentially drastically raise fees on sewer rates instead of water rates to avoid regulation by the PUC. The practice is gaining momentum ...”

DORA recommended revising CRS 40-1-103, and HB 1227 did so. “Water corporation” now includes a combined water and sewer corporation, whether a single entity or as different entities under common ownership.

The DORA report suggested, “allowing the PUC to assess fines administratively, rather than through district court, would grant a powerful cost-effective means of compelling compliance with the law.”

HB 1227 does give the commission director such authority; subject to a commission hearing, but only if the violation was intentional. Otherwise, at least in my reading, the issue of fines remains under district court jurisdiction.

The state auditor should review this amendment in several years to see what effect the administrative authority has produced. If not much, then “negligence” should be added to “intentional” violation.

Putting an 11-year waiting period (2019) for the next repeal of the PUC statute makes no sense. There will be massive changes over the next several years regarding energy policies, and legislators should have an opportunity to read reliable suggestions.

The research staff at DORA did an excellent review in 2007, but there will not be a similar review in any future year by DORA of this commission’s activities until 2018.

Jerry Kopel served 22 years in the Colorado House.