BILL ANALYSIS �
AB 306
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 306 (Lowenthal)
As Amended May 29, 2013
Majority vote
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|ASSEMBLY: |76-0 |(April 25, |SENATE: |33-0 |(July 1, 2013) |
| | |2013) | | | |
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Original Committee Reference: TRANS.
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.
The Senate amendments were clarifying in nature.
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.
AB 306
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FISCAL EFFECT : According to the Senate Appropriations
Committee, pursuant to Senate Rule 28.8, negligible state costs.
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
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 Le�n), 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
AB 306
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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.
Previous legislation : AB 145 (De Le�n), 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 (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.
Analysis Prepared by : Victoria Alvarez / TRANS. / (916) 319-
2093
FN: 0001275