BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 145|
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THIRD READING
Bill No: AB 145
Author: De Leon (D)
Amended: 8/3/10 in Senate
Vote: 21
SENATE TRANSPORTATION & HOUSING COMMITTEE : 8-0, 6/15/10
AYES: Lowenthal, Huff, Ashburn, DeSaulnier, Harman, Kehoe,
Pavley, Simitian
NO VOTE RECORDED: Oropeza
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 79-0, 5/4/09 (Consent) - See last page for
vote
SUBJECT : Dump trucks: brokers
SOURCE : California Dump Truck Association
DIGEST : This bill requires that a broker of construction
trucking services post a bond to ensure payment to a dump
truck operator whose services he/she is brokering and that
the broker receive certification of the dump trucker
operator's permit to operate.
ANALYSIS : Motor carriers of property transport property,
other than household goods, for hire. The Department of
Motor Vehicles (DMV) and the Department of the California
Highway Patrol (CHP) regulate those motor carriers that
operate within California, and existing law requires that a
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motor carrier have a valid motor carrier permit of property
to operate in this state.
DMV issues motor carrier permits subject to the motor
carrier paying the required fee, providing proof of
financial responsibility (e.g., liability insurance),
certifying that it has workers' compensation coverage for
its employees, securing a CHP inspection, and obtaining a
carrier identification number from CHP. A motor carrier
must renew this permit every year.
No person, including another motor carrier, may engage the
services of a motor carrier of property, unless that motor
carrier holds a valid permit. In instances in which a
motor carrier enlists the service of another motor carrier,
the contracted motor carrier must certify in manner
prescribed by CHP that it possesses a permit to operate and
must immediately notify the contracting motor carrier to
whom it is contracted if DMV suspends or revokes the
permit.
Existing law defines a "broker of construction trucking
services" (broker) as any person, excluding a licensed
contractor, who arranges services from and is responsible
for paying an independent contractor motor carrier of
property in dump truck equipment (dump truck operator).
Existing law requires that a broker pay a dump truck
operator by the 25th day following the last day of the
month in which the dump truck provided services, provided
that the dump truck operator documents the charges, the
dump truck operator is properly permitted, and no dispute
exists. If the broker does not pay in a timely fashion,
state law prescribes a penalty of two percent per month of
withheld charges.
This bill:
1. Prohibits a broker from contracting with or engaging the
services of any motor carrier of property unless that
contracted motor carrier certifies in a manner
prescribed by CHP that it possesses a valid permit to
operate and requires that the contracted motor carrier
immediately notify the broker if DMV suspends or revokes
the motor carrier's permit.
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2. Requires a broker to secure a surety bond of not less
the $15,000 to ensure payment of the claims of a
contracted dump truck operator, if the broker fails to
pay the dump truck operator by the 25th day of the month
following when services were rendered. A broker who
does not secure this surety bond shall be guilty of a
misdemeanor and subject to a fine of up to $5,000.
3. Provides that in a civil action that a dump truck
operator brings against a broker with whom it contracted
during any period of time in which the broker did not
maintain a surety bond, the failure to have the bond
shall create a rebuttable presumption that the broker
failed to pay the motor carrier the amount due, thus
favoring the dump truck operator in any civil lawsuit.
4. Specifies that "a broker of construction trucking
services" does not include a facility that meets all the
following conditions:
Arranges for transportation services of its
product.
Primarily handles raw materials to produce a new
product.
Is a rock product operation (such as an
"aggregate" operation), a hot mixing asphalt plant,
or a concrete, concrete product, or Portland cement
product manufacturing facility.
Does not accept a fee for the arrangement.
Comments
Purpose of the bill . The bill's sponsor notes that in
recent years an increasing number of construction trucking
brokers have engaged in unscrupulous practices toward the
dump truck operators whose services they broker. The
sponsor reports that the practices include delayed or lack
of complete payment, filing bankruptcy or fleeing
California to avoid paying amounts due, encouraging
noncompliance with safety requirements, and coercing dump
truck owners into accepting lesser payment amounts after
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the dump truck owner has provided services.
The author introduced this bill to assist in the timely
payment of dump truck operators who are hired by
construction trucking brokers. Because these dump trucker
owners are not subcontractors on the construction job, they
do not have lien rights and have little recourse when they
are underpaid or not paid at all. This bill requires
brokers of construction trucking services to obtain a
$15,000 surety bond to ensure they are adequately solvent
to meet their contractual obligations, and it also creates
a rebuttable presumption in favor of the dump truck
operator if there is a civil action filed due to lack of
payment.
In addition, this bill addresses a loophole in existing law
under which motor carriers of property must obtain written
certification that their subcontractors hold valid motor
carrier permits. This requirement does not, however, apply
to brokers of construction trucking services if they do not
own dump trucks or are not acting in a motor carrier
capacity when brokering these services. The author
introduced this bill to address this loophole by extending
the same mandate to construction trucking brokers.
Proponents assert that holding brokers to the exact same
standards as motor carriers is important for public safety
as it assures that dump trucks are permitted and have
passed the related inspection.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
SUPPORT : (Verified 8/4/10)
California Dump Truck Association (source)
ASSEMBLY FLOOR :
AYES: Adams, Ammiano, Anderson, Arambula, Beall, Bill
Berryhill, Tom Berryhill, Blakeslee, Block, Blumenfield,
Brownley, Buchanan, Caballero, Charles Calderon, Carter,
Chesbro, Conway, Cook, Coto, Davis, De La Torre, De Leon,
DeVore, Duvall, Emmerson, Eng, Evans, Feuer, Fletcher,
Fong, Fuentes, Fuller, Furutani, Gaines, Galgiani,
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Garrick, Gilmore, Hagman, Hall, Harkey, Hayashi,
Hernandez, Hill, Huber, Jeffries, Jones, Knight,
Krekorian, Lieu, Logue, Bonnie Lowenthal, Ma, Mendoza,
Miller, Monning, Nava, Nestande, Niello, Nielsen, John A.
Perez, V. Manuel Perez, Portantino, Price, Ruskin, Salas,
Saldana, Silva, Skinner, Smyth, Solorio, Audra
Strickland, Swanson, Torlakson, Torres, Torrico, Tran,
Villines, Yamada, Bass
NO VOTE RECORDED: Huffman
JJA:mw 8/4/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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