BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  SB 1092
                                                                  Page  1

          Date of Hearing:   August 8, 2012

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

                   SB 1092 (De Leon) - As Amended:  June 13, 2012 

          Policy Committee:                             
          TransportationVote:13-0

          Urgency:     No                   State Mandated Local Program: 
          Yes    Reimbursable:              No

           SUMMARY  

          This bill requires brokers of construction trucking services to 
          demonstrate evidence of a valid surety bond by annually 
          providing written evidence to a third-party nonprofit 
          organization related to the industry, which the bill prohibits 
          from charging for posting the evidence.  The bill also prohibits 
          a broker of construction trucking services from hiring a 
          subhauler to furnish construction transportation services unless 
          the broker provides written evidence of the broker's valid 
          surety bond.

           FISCAL EFFECT  

          Negligible state costs, if any.

           COMMENTS  

           1)Rationale  .  The author contends that, despite the requirement 
            that a broker of construction trucking services secure a 
            surety bond of at least $15,000 to ensure payment to 
            contracted motor carriers, some brokers refuse to provide 
            evidence of surety to motor carriers before contracting with 
            subhaulers.  The author intends this bill to provide greater 
            transparency by requiring brokers to demonstrate evidence of 
            surety, accessible to potential to motor carriers prior to 
            entering into a contract.

          2)Current law requires a broker pay a subhauler by the 25th day 
            following the last day of the month in which the subhauler 
            provided services.  If the broker does not pay the subhauler 
            within this timeframe, the law prescribes a penalty of 2% per 








                                                                  SB 1092
                                                                  Page  2

            month of the withheld charges.  AB 145 (De Leon, Chapter 429, 
            Statutes of 2010) requires brokers to post a $15,000 surety 
            bond from which a subhauler may receive payment, should the 
            broker fail to pay the subhualer as required.  

           Analysis Prepared by  :    Jay Dickenson / APPR. / (916) 319-2081