BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 145
                                                                  Page  1

          CONCURRENCE IN SENATE AMENDMENTS
          AB 145 (De Leon)
          As Amended  August 3, 2010
          Majority vote
           
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          |ASSEMBLY:  |79-0 |(May 4, 2009)   |SENATE: |34-0 |(August 9,     |
          |           |     |                |        |     |2010)          |
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          Original Committee Reference:   TRANS.   

           SUMMARY  :  Prohibits a construction transportation broker from  
          furnishing construction transportation services to a  
          construction project unless it has secured a security bond of at  
          least $15,000 or from contracting or engaging the services of a  
          motor carrier of property that is out of compliance with  
          existing law.  

           The Senate amendments  add the provisions that:  

          1)Require a broker to secure a surety bond of at least $15,000  
            to ensure payment of the claims of a contracted dump truck  
            operator, if the broker fails to pay the dump truck operator  
            by the 25th day of the month following when services were  
            rendered.  A broker who does not secure this surety bond shall  
            be guilty of a misdemeanor and subject to a fine of up to  
            $5,000.  

          2)Provide that in a civil action that a dump truck operator  
            brings against a broker with whom it contracted during any  
            period of time in which the broker did not maintain a surety  
            bond, the failure to have the bond shall create a rebuttable  
            presumption that the broker failed to pay the motor carrier  
            the amount due, thus favoring the dump truck operator. 

           EXISTING LAW  :  

          1)Prohibits a motor carrier from operating on the highway unless  
            it complies with systematic inspection and maintenance at  
            least every 90 days.  

          2)Requires a motor carrier to register its carrier  
            identification number with the Department of Motor Vehicles  
            (DMV).  








                                                                  AB 145
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          3)Prohibits a motor carrier permit from being granted to any  
            motor carrier of property until proof of insurance, workers'  
            compensation coverage, and payment of required fees is  
            provided.  

          4)Prohibits a motor carrier of property from subcontracting with  
            or engaging the services of a motor carrier unless that motor  
            carrier holds a valid permit issued by DMV.  

          5)Requires a contracted motor carrier to provide notification to  
            the person with whom they are under contract, if its permit  
            has been suspended or revoked.  

           AS PASSED BY THE ASSEMBLY  , this bill was substantially similar  
          to the version passed by the Senate.  

           FISCAL EFFECT  :  Unknown

           COMMENTS  :  Under existing law, a motor carrier is prohibited  
          from subcontracting with or engaging the services of another  
          motor carrier until the contracted motor carrier provides  
          certification of compliance with existing law and regulations.   
          A contracted motor carrier is required to provide notification  
          to the person with whom they are under contract if its permit  
          has been suspended or revoked.  

          Every motor carrier of property must also obtain a carrier  
          identification number and hold a valid motor carrier permit from  
          DMV.  Adequate liability insurance, workers' compensation  
          coverage, and completion of controlled substance and alcohol  
          testing program are also required.  

          Currently, a construction transportation broker can subcontract  
          or engage the services of a motor carrier without having to  
          verify that the subcontractor complies with all the requirements  
          of existing law, as is required of a motor carrier when they  
          subcontract work.  This bill seeks to address that gap in  
          current law by requiring that construction truck brokers also  
          verify that a subcontractor complies with existing law, as is  
          required of a motor carrier.  

          The author of this bill points out that an increasing trend is  
          taking place in the motor carrier industry that may be  
          jeopardizing road safety.  A growing number of construction  








                                                                  AB 145
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          truck brokers that do not have a motor carrier permit or may not  
          be acting as a motor carrier when they are brokering or  
          subcontracting work are not verifying that a subcontractor has  
          complied with existing law requirements.  

          The sponsor of this bill, the California Dump Truck Owners  
          Association, adds that the "emerging growth of construction  
          truck brokers subcontracting work without having to legally  
          abide by existing law, clearly undermines the intent of statute  
          in ensuring safety and proper licensure."  
           
           The sponsor also notes that in recent years an increasing number  
          of construction trucking brokers have engaged in unscrupulous  
          practices that include delayed or lack of complete payment,  
          filing bankruptcy or fleeing California to avoid paying amounts  
          due, encouraging non-compliance with safety requirements, and  
          coercing dump truck owners into accepting lesser payment amounts  
          after the dump truck owner has provided services.  

          This bill is intended to assist in encouraging the timely  
          payment of dump truck operators who are hired by construction  
          trucking brokers.  Because these dump trucker owners are not  
          subcontractors on the construction job, they do not have lien  
          rights and have little recourse when they are underpaid or not  
          paid at all.  This bill requires brokers of construction  
          trucking services to obtain a $15,000 surety bond to ensure they  
          are adequately solvent to meet their contractual obligations,  
          and it also creates a rebuttable presumption in favor of the  
          dump truck operator if there is a civil action filed due to lack  
          of payment.  

           
          Analysis Prepared by  :   Janet Dawson / TRANS. / (916) 319-2093 


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