BILL ANALYSIS Ó AB 306 Page 1 Date of Hearing: April 17, 2013 ASSEMBLY COMMITTEE ON APPROPRIATIONS Mike Gatto, Chair AB 306 (Lowenthal) - As Introduced: February 12, 2013 Policy Committee: TransportationVote:16-0 Urgency: No State Mandated Local Program: Yes Reimbursable: No SUMMARY This bill requires any business contracting with a tow operator to obtain proof of a valid motor carrier permit (MCP) before allowing the tow operator to retrieve or deliver vehicles to or from the business's premises. FISCAL EFFECT 1)Minor absorbable administrative costs to the DMV. 2)Minor non-reimbursable costs from the expansion of an existing crime-related statute, a violation of which is a misdemeanor subject to a fine of up to $2,500 and/or imprisonment in county jail for up to three months. COMMENTS Background and Purpose . The Motor Carrier Safety Improvement Act (1996) was intended to ensure that commercial motor carriers meet all of the statutory requirements to safely operate on California's highways. Under this Act, a motor 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. SB 145 (De Leon)/Chapter 429 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. Specifically, AB 145 clarified that construction trucking brokers-who in some cases may not themselves be motor AB 306 Page 2 carriers-were also required to ensure that the trucking companies they contract with possess a valid MCP. AB 145 did not, however, 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, according to the California Tow Truck Association (sponsor), some unscrupulous tow operators continue to operate without a valid MCP, placing motorists at risk and undercutting their competition. AB 306 closes this loophole. Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081