California revises broker rule

By Keith Goble, Land Line state legislative editor | Monday, September 24, 2012

Some California truckers are welcoming an effort from the state that will help them get a fair shake from brokers.

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, since the changes were implemented there has been concern about crooked brokers who try to skirt the new rules.

Truckers called on lawmakers this year to revisit the issue.

After months of discussion at the statehouse Gov. Jerry Brown on Sunday, Sept. 23, signed into law a bill to require construction trucking brokers to annually disclose a copy of his or her surety bond. It takes effect Jan. 1, 2013.

Advocates said the change will improve transparency in notification requirements.

Sen. Kevin de Leon, D-Los Angeles, previously told lawmakers that existing law does not include the requirement that brokers notify others of the bond information.

Previously SB1092, the new law addresses that problem by adding notification requirements to the existing broker bond.

Supporters said 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.

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

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