BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 306
                                                                  Page  1

          Date of Hearing:   April 8, 2013

                        ASSEMBLY COMMITTEE ON TRANSPORTATION
                               Bonnie Lowenthal, Chair
                AB 306 (Lowenthal) - As Introduced:  February 12, 2013
           
          SUBJECT  :  Vehicles: motor carrier

           SUMMARY  :  Requires any business that contracts with a tow  
          operator to obtain proof of a valid motor carrier permit (MCP)  
          before allowing the tow operator to retrieve vehicles from or  
          deliver vehicles to its premises.  

           EXISTING LAW  : 

          1)Prohibits a motor carrier of property from operating on a  
            public highway without a MCP.  

          2)Requires motor carriers of property to comply with maintenance  
            inspections, carry insurance and workers' compensation  
            coverage, and enroll in a controlled substance and alcohol  
            testing program.  

          3)Prohibits a person from contracting with or otherwise engaging  
            the services of a motor carrier of property unless the carrier  
            holds a valid MCP.  

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

          5)Prohibits certain motor carriers of property from  
            subcontracting with or engaging the services of a motor  
            carrier unless that motor carrier holds a valid MCP.  

          6)Requires a contracted motor carrier of property to provide  
            notification to the person with whom they are under contract  
            if their MCP has been suspended or revoked.  

           FISCAL EFFECT  :  Unknown

           COMMENTS  :  In 1996, the Legislature enacted the Motor Carrier  
          Safety Improvement Act (Act) to ensure that commercial motor  
          carriers meet all of the statutory requirements to safely  
          operate on California's highways.  Under the Act, a motor  








                                                                  AB 306
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          carrier is prohibited from subcontracting with or engaging the  
          services of another motor carrier unless the contracted motor  
          carrier provides certification of compliance with existing law  
          and regulations including the requirement to hold a valid MCP.   
          Additionally, a contracted motor carrier is required to provide  
          notification to the person with whom they are under contract if  
          their MCP has been suspended or revoked.  

          AB 145 (De Leon) Chapter 429, Statutes of 2010, among other  
          things, addressed a loophole in the Act that allowed motor  
          carriers to engage the services of other motor carriers who may  
          not have a valid MCP.  AB 145 closed this loophole by clarifying  
          that construction trucking brokers (who in some cases may not  
          themselves be motor carriers) were also required to ensure that  
          the trucking companies they contract with possess a valid MCP.  

          AB 145, however, did not explicitly address tow operators that  
          deliver and retrieve vehicles.  As a result, some tow operators  
          are continuing to operate without a MCP and are able to do so  
          because there is no explicit requirement that they show proof of  
          having a valid MCP before providing transporting vehicles.  As a  
          result, some unscrupulous tow operators continue to operate  
          without a valid MCP, placing motorists at risk and undercutting  
          their competition.   

          One example of how this is when storage yards hire tow truck  
          operators to move damaged vehicles from one vehicle storage yard  
          to another.  In this situation, a vehicle may be held in a  
          storage yard that has a high daily storage rate and the owner or  
          agent decides to have the vehicle moved to a storage yard with a  
          lower daily storage rate.  The storage yard may hire a low cost  
          tow operator to retrieve the vehicle in an effort to save money,  
          but often times these "cut rate" tow operators work cheaply  
          because they are not operating with a valid MCP.  Because  
          existing law does not authorize storage yards to check that tow  
          operators have a valid MCP before releasing or accepting a  
          vehicle, there is no mechanism in place to stop these rogue tow  
          operators from doing business.  

          Requiring tow operators to show proof of a valid MCP will result  
          in improved compliance with the MCP program.  Improving  
          compliance with the MCP program will increase safety on  
          California's roadways and eliminate the unfair business  
          advantage scofflaws gain by failing to comply with existing law.  
           








                                                                  AB 306
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           Previous legislation  :  AB 145 (De Leon) Chapter 429, Statutes of  
          2010, prohibited 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 in the services of  
          motor carrier of property that is out of compliance with  
          existing law.  

          AB 1518 (Assembly Transportation Committee) Chapter 652,  
          Statutes of 1997, among other things, prohibited shippers from  
          contracting with carriers until the carriers provide evidence of  
          proper certification and compliance with Motor Carrier Permit  
          Program.  

          AB 1683 (Conroy) Chapter 1042, Statutes of 1996, put forth the  
          Motor Carrier Safety Improvement Act which acknowledged and  
          conformed state law with the federal preemption of state  
          regulation of rates, routes, and services of motor carriers and  
          transferred the authority for the registration and remaining  
          oversight of motor carriers of property from the Public  
          Utilities Commission to DMV and California Highway Patrol.  

           REGISTERED SUPPORT / OPPOSITION  :  

           Support 
           
          California Tow Truck Association (sponsor)
          Official Police Garages Association of Los Angeles
          Personal Insurance Federation of California

           Opposition 
           
          None on file
           

          Analysis Prepared by  :   Victoria Alvarez / TRANS. / (916) 319-  
          2093