BILL ANALYSIS
AB 145
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 145 (De Leon)
As Amended August 3, 2010
Majority vote
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|ASSEMBLY: |79-0 |(May 4, 2009) |SENATE: |34-0 |(August 9, |
| | | | | |2010) |
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Original Committee Reference: TRANS.
SUMMARY : Prohibits 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 the services of a
motor carrier of property that is out of compliance with
existing law.
The Senate amendments add the provisions that:
1)Require a broker to secure a surety bond of at least $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.
2)Provide 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.
EXISTING LAW :
1)Prohibits a motor carrier from operating on the highway unless
it complies with systematic inspection and maintenance at
least every 90 days.
2)Requires a motor carrier to register its carrier
identification number with the Department of Motor Vehicles
(DMV).
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3)Prohibits a motor carrier permit from being granted to any
motor carrier of property until proof of insurance, workers'
compensation coverage, and payment of required fees is
provided.
4)Prohibits a motor carrier of property from subcontracting with
or engaging the services of a motor carrier unless that motor
carrier holds a valid permit issued by DMV.
5)Requires a contracted motor carrier to provide notification to
the person with whom they are under contract, if its permit
has been suspended or revoked.
AS PASSED BY THE ASSEMBLY , this bill was substantially similar
to the version passed by the Senate.
FISCAL EFFECT : Unknown
COMMENTS : Under existing law, a motor carrier is prohibited
from subcontracting with or engaging the services of another
motor carrier until the contracted motor carrier provides
certification of compliance with existing law and regulations.
A contracted motor carrier is required to provide notification
to the person with whom they are under contract if its permit
has been suspended or revoked.
Every motor carrier of property must also obtain a carrier
identification number and hold a valid motor carrier permit from
DMV. Adequate liability insurance, workers' compensation
coverage, and completion of controlled substance and alcohol
testing program are also required.
Currently, a construction transportation broker can subcontract
or engage the services of a motor carrier without having to
verify that the subcontractor complies with all the requirements
of existing law, as is required of a motor carrier when they
subcontract work. This bill seeks to address that gap in
current law by requiring that construction truck brokers also
verify that a subcontractor complies with existing law, as is
required of a motor carrier.
The author of this bill points out that an increasing trend is
taking place in the motor carrier industry that may be
jeopardizing road safety. A growing number of construction
AB 145
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truck brokers that do not have a motor carrier permit or may not
be acting as a motor carrier when they are brokering or
subcontracting work are not verifying that a subcontractor has
complied with existing law requirements.
The sponsor of this bill, the California Dump Truck Owners
Association, adds that the "emerging growth of construction
truck brokers subcontracting work without having to legally
abide by existing law, clearly undermines the intent of statute
in ensuring safety and proper licensure."
The sponsor also notes that in recent years an increasing number
of construction trucking brokers have engaged in unscrupulous
practices that include delayed or lack of complete payment,
filing bankruptcy or fleeing California to avoid paying amounts
due, encouraging non-compliance with safety requirements, and
coercing dump truck owners into accepting lesser payment amounts
after the dump truck owner has provided services.
This bill is intended to assist in encouraging 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.
Analysis Prepared by : Janet Dawson / TRANS. / (916) 319-2093
FN: 0005572