California nears revised broker rule

By Keith Goble, Land Line state legislative editor | 8/29/2012

An effort in California to help subcontracted haulers with brokers is on the verge of becoming law.

For nearly two years California law has required a broker of construction trucking services to post a bond to ensure payment to a contracted subhauler whose services were brokered. The broker also receives certification of the subcontracted company’s permit to operate.

Brokers are required to secure a surety bond of at least $15,000 to ensure payment. Failure to secure a bond is a misdemeanor and could result in as much as a $5,000 fine.

The California Construction Trucking Association led the way in getting the existing rules in place. However, concern about crooked brokers who try to skirt the new rules led the CCTA to call on lawmakers to revisit the issue.

After months of discussion at the statehouse the Senate voted unanimously to sign off on changes to a bill to require construction trucking brokers to disclose a copy of his or her surety bond. Assembly lawmakers approved the bill – SB1092 – by unanimous consent. It now moves to the governor’s desk.

Sen. Kevin de Leon, D-Los Angeles, has said the change would improve transparency in notification requirements.

He also noted during testimony at the statehouse that existing law does not include the requirement that brokers notify others of the bond information.

This year’s bill addresses that problem by adding notification requirements to the existing broker bond.

Supporters say that by creating easier access to a copy of the bond, a subcontracted carrier will know up front if in fact they are contracting with a bonded broker. In addition, if the work has already been completed and the broker has not made payment, the dump truck operator can easily access the bond information to file a claim.

If signed into law, it would take effect Jan. 1, 2013.

To view other legislative activities of interest for California, click here.

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