BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 529
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          Date of Hearing:   April 29, 2013

                        ASSEMBLY COMMITTEE ON TRANSPORTATION
                               Bonnie Lowenthal, Chair
                   AB 529 (Lowenthal) - As Amended:  March 19, 2013
           
          SUBJECT  :  Commercial Trucks: Biennial Inspection of Terminals

           SUMMARY  :  Revises the Biennial Inspection of Terminals (BIT)  
          Program as administered by the California Highway Patrol (CHP).   
          Specifically,  this bill  :  

          1)Transfers responsibility to collect carrier inspection fees  
            from CHP to the California Department of Motor Vehicles (DMV).  
             

          2)Restructures current BIT carrier inspection fees, which are  
            levied based on the number of terminals operated by a motor  
            carrier and collected by CHP, to instead have DMV collect  
            carrier inspection fees based upon the size of the commercial  
            motor vehicle fleet.  

          3)Imposes a new penalty on motor carriers for failure to pay  
            safety and carrier inspection fees based upon the following  
            schedule:  

             a)   Failure to pay fees more than 30 days -- 60% of the  
               required fee;

             b)   Failure to pay fees more than 1 year - 80% of the  
               required fee; and,

             c)   Failure to pay fees more than 2 years - 160% of the  
               required fee.  

          1)Redefines "motor carrier" as the registered owner, lessee,  
            licensee, or bailee who operates or directs the operation of a  
            commercial vehicle.  

          2)Makes it unlawful for a motor carrier to operate any  
            commercial vehicle without identifying to the CHP all  
            terminals in the state where vehicles may be inspected.  

          3)Requires motor carriers to make vehicles and records available  
            for inspection by CHP.  If a motor carrier fails to provide  








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            vehicles and records, an unsatisfactory terminal rating is  
            required to be issued by CHP.  

          4)Establishes inspection criteria based upon terminal fleet size  
            as specified.  

          5)Requires the lessor of a commercial vehicle to make the  
            vehicle available for inspection upon request of the CHP.   
            Establishes that this bill does not affect whether the lessor  
            or driver provided by the lessor is an employee of the  
            authorized carrier lessee and is in compliance with this  
            section and its attendant administrative requirements.  

          6)Authorizes CHP to conduct terminal inspections at any time.  

          7) Requires CHP, on or before January 1, 2016, to promulgate  
            regulations to implement a performance-based truck terminal  
            inspection priority system similar to that used by the Federal  
            Motor Carrier Safety Administration.  Authorizes CHP to  
            incorporate other safety-related data into this system.  

          8)Requires CHP to place an inspection priority on motor carrier  
            terminals that have never been previously inspected, as well  
            as vehicles transporting hazardous materials.  Provides that  
            nonpriority terminals would not be required to be inspected  
            less than six years since their last inspection.  

          9)Eliminates the responsibility of the motor carrier to schedule  
            a vehicle inspection with the CHP.  

          10)Eliminates the 25-month inspection term for each terminal  
            that receives a satisfactory inspection compliance rating.   
            Also, deletes the authority of the CHP to extend the 25-month  
            inspection period by an additional six months.  

          11)Requires motor carriers operating vehicles as specified in  
            this bill to carry out inspections every 90 days to ensure  
            safe operation.  Records of inspection are to be kept at the  
            motor carrier's terminal as designated, are to be retained for  
            two years, and shall be made available for inspection upon  
            request by the CHP.  

          12)Authorizes a motor carrier that is issued a notification by  
            the CHP of an unsatisfactory terminal rating to request a  
            review of the rating within five business days and requires  








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            the CHP to conduct and evaluate the review prior to  
            recommending the suspension of a carrier's motor carrier  
            permit.  

          13)Renames the program from the Biennial Inspection of Terminals  
            Program to the Basic Inspection of Terminals Program.  

          14)Clarifies the definition of "motor carrier of property" to  
            include a trailer designed to transport watercraft, or utility  
            trailer, and that is never operated in commercial use.  

          15)Deletes the requirement of DMV to review the fee schedule and  
            to determine if the fees should be lowered to appropriately  
            reflect the administrative and enforcement costs for it and  
            the CHP.  

          16)Delays the operative date of the reconstituted BIT program to  
            January 1, 2016.  

          17)Makes related, clarifying amendments.  

           EXISTING LAW  :  

          1)Establishes the California Commercial Motor Vehicle Safety Act  
            of 1988, which led to the creation of the BIT Program as  
            administered by the CHP, to ensure the safe operation of  
            certain vehicles by a motor carrier through the inspection of  
            those vehicles at motor carrier terminals.  Requires any  
            person or organization directing the operation of certain  
            trucks and/or trailers to participate in the BIT Program.  

          2)Establishes a carrier inspection fee schedule, along with  
            non-payment penalty provisions, on commercial motor carrier  
            terminals for the BIT inspections.  Requires the application  
            and inspection fees to be processed by the CHP.  

          3)Defines a "motor carrier" as the registered owner of, and in  
            some cases the lessee or person exclusively authorizing and  
            directing the operation of, specified vehicles.  

          4)Requires motor carriers to provide CHP with a representative  
            sample of its total vehicle fleet to be used when carrying out  
            required inspections as specified.  

          5)Requires CHP to inspect every terminal at least once every 25  








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            months and defines a terminal as the location or locations  
            designated by the motor carrier where subject vehicles and  
            specific records are available for inspection.  

          6)Requires CHP to perform priority inspections on vehicles  
            transporting hazardous materials.  

          7)Establishes a fee schedule for the inspection of fleet  
            terminals.  

          8)Requires fees collected by CHP to be deposited into the Motor  
            Vehicle Account and appropriated to CHP for purposes of  
            conducting truck terminal inspections and for roadside safety  
            inspections.  

          9)Establishes re-inspection procedures of terminals receiving  
            non-satisfactory ratings.  

          10)Requires, within 30 days of establishing a terminal, a motor  
            carrier to schedule an inspection by submitting to CHP an  
            application for a terminal inspection accompanied by the  
            payment of a fee the amount of which is based on the number of  
            vehicles in a terminal or the "terminal fleet size."  

          11)In lieu of CHP on-site inspections of compliant terminals  
            that receive two consecutive satisfactory inspection ratings,  
            specifies provisions for administrative review for two  
            additional 25-month periods.  Prohibits the authorization of  
            more than two consecutive 25-month administrative review  
            periods.  

          12)Authorizes DMV to issue motor carrier permits.  

          13)Under federal law, requires motor carriers to inspect,  
            repair, and maintain all commercial motor vehicles under its  
            control annually.  Authorizes motor carriers to perform  
            self-inspections by a qualified employee or through a  
            third-party inspection by a qualified individual.  Authorizes  
            vehicles passing roadside or mandatory periodic inspections  
            performed by a state to be considered to have met the  
            requirements of the annual self-inspection.  Requires records  
            of inspections to be retained for 14 months.  

           FISCAL EFFECT  :  Unknown









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           COMMENTS  :  The BIT Program was implemented to ensure the safe  
          operation of commercial vehicles by a motor carrier through the  
          inspection of those vehicles at motor carrier terminals.  The  
          law requires that the CHP perform safety inspections every 25  
          months on every commercial motor carrier terminal operating  
          within the state.  The BIT program also allows for  
          administrative approval for additional 25 month periods for  
          those terminals with ongoing satisfactory safety inspections.  

          Under the BIT Program, a motor carrier is the registered owner  
          (with some exceptions) of any of the following vehicles, whether  
          or not for hire:  

          1)Any motor truck with three or more axles having a gross  
            vehicle weight rating of more than 10,000 pounds.  
           
          2)Truck tractors.  

          3)Trailers or semitrailers used in combination with the vehicles  
            listed above.  

          4)Any truck or combination of a truck, and any other vehicle,  
            transporting hazardous materials that require placards, a  
            hazardous materials transportation license, or hazardous waste  
            transporter registration, including pickups used for this  
            purpose.  

          5)Any motor truck with a gross vehicle weight rating of more  
            than 10,000 pounds (excluding a pickup truck as specifically  
            defined, while towing any trailer or semitrailer that results  
            in a combination length over 40 feet (excluding trailer  
            coaches, camp trailers, and utility trailers).  

          Further, under the program, "terminal" is defined as any place  
          where a vehicle described above is regularly garaged,  
          maintained, operated or dispatched from, including a dispatch  
          office, cross-dock facility, maintenance shop, business, store,  
          or even a private residence.  Essentially, terminal means the  
          location or locations in the state that are designated by a  
          motor carrier, where vehicles subject to the BIT Program may be  
          inspected by the CHP and where vehicle maintenance records and  
          drivers' records will be made available for inspection.  

          Separately from the BIT Program, to ensure the safe operations  
          of motor carriers, the CHP conducts routine roadside inspections  








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          of commercial vehicles operating on the state's highways.   
          Vehicles passing the roadside inspection are deemed meeting the  
          annual federal self-inspection requirement.  Further, vehicles  
          passing the inspection enable a fleet operator to receive  
          approval for one vehicle in their fleet sample.  Vehicles not  
          passing may trigger an on-site review of the terminal for their  
          fleet inspection.  

           Federal commercial truck safety requirements  :  Federal law  
          requires motor carriers to inspect, repair, and maintain all  
          commercial motor vehicles under its control on an annual basis.   
          The records of inspections are to be retained for 14 months.   
          Further, the law authorizes motor carriers to perform  
          self-inspections by a qualified employee or through a  
          third-party inspection by a qualified individual.  As a note,  
          federal law does not mandate the on-site inspection of terminals  
          by either state or federal inspectors.  

          On December, 2010, the Federal Motor Carrier Safety  
          Administration (FMCSA) established a new program designed to  
          improve the safety of large commercial vehicles in terms of  
          reduced crashes, injuries, and fatalities.  The program uses a  
          performance-based model and parameters to evaluate and target  
          on-site inspections of interstate motor carriers.  This approach  
          allows FMCSA and those states choosing to use the model to  
          channel enforcement and compliance efforts to carriers that are  
          profiled with potential safety problems.  States other than  
          California have been involved in implementing and evaluating  
          this new program.  This program could benefit California to  
          target CHP inspection and enforcement efforts towards priority  
          motor carriers.  

          AB 529 will allow CHP to implement a performance-based  
          inspection program patterned after the FMCSA model.  By using  
          performance-based inspection prioritization, CHP will focus  
          staff inspection resources where they are most needed: targeting  
          new motor carriers and as well as those that are non-compliant.   
          This performance-based model will also make public motor carrier  
          inspection data available via the Internet, thus creating  
          incentives for motor carriers to meet or exceed CHP inspection  
          requirements.  Additionally, this bill seeks to improve the  
          efficiency of the program by having DMV assume the inspection  
          fee collection process.  

          This bill makes a number of significant changes to the existing  








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          BIT program including: 

          1)Establishing a performance-based model for inspections, moving  
            away from motor carrier terminal inspections occurring once  
            every 25 months to a model where ongoing compliant motor  
            carriers may be inspected once every 6 years.  

          2)Changing the focus of the CHP inspection program from terminal  
            inspections to new motor carriers entering the market in  
            California as well as individual motor carriers that are  
            targeted through the performance-based inspection program  
            model.  

          3)Consolidating fee collections by DMV using the existing Motor  
            Carrier Permit fee collection process.  Accordingly, funds  
            appropriated to CHP for accounting for the inspection fees can  
            be redirected to actual inspections.  

          4)Shifting BIT program fees from being assessed to each terminal  
            to being assessed based on the entire fleet of the motor  
            carrier.  

          5)Expanding the categories of commercial vehicles that will be  
            subject to BIT program inspections and fees.  Under this new  
            fee structure, smaller motor carriers will benefit due to  
            their smaller fleet sizes while the offset in fee revenues  
            will be smoothed out through expanding BIT program  
            requirements to new commercial vehicle categories.  

          6)Allowing the CHP to collect inspection data and post motor  
            carrier performance data on the Internet in turn incentivizing  
            motor carriers to meet or exceed state safety requirements.  

           Previous legislation  : AB 2706 (Katz), Chapter 1586, Statutes of  
          1988, establishes the BIT Program, otherwise known as the  
          California Commercial Motor Vehicle Safety Act of 1988.  The  
          program requires all trucking companies to have each terminal  
          location inspected by CHP every 25 months.   
           
          AB 957 (Scott), Chapter 1006, Statutes of 2000, imposes  
          sanctions on motor carriers for failure to pay BIT Program fees  
          or otherwise comply with the program requirements.  

          AB 1238 (Firebaugh), Chapter 729, Statutes of 2003, requires  
          motor carriers to certify enrollment in the BIT Program prior to  








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          obtaining a Motor Carrier Permit.  Also makes it a crime for a  
          motor carrier to operate a vehicle regulated under the BIT  
          Program prior to having an inspection completed.  Furthermore,  
          AB 1238 increased fees for an initial inspection.  

          SB 79 (Senate Budget and Fiscal Review Committee), Chapter 173,  
          Statutes of 2007, restructures the fee schedule for the  
          inspection of motor carrier terminals based on terminal fleet  
          size versus the set base rate for each terminal inspected.  

           REGISTERED SUPPORT / OPPOSITION  :   

           Support 
           
          California Construction Trucking Association 
          California Tow Truck Association
          California Trucking Association
          Pacific Merchant Shipping Association

           Opposition 
           
          None on file 
           

          Analysis Prepared by  :   Manny Leon / TRANS. / (916) 319-2093