BILL ANALYSIS Ó AB 529 Page 1 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 AB 529 Page 2 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 AB 529 Page 3 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 AB 529 Page 4 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 AB 529 Page 5 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 AB 529 Page 6 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 AB 529 Page 7 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 AB 529 Page 8 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