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Have a question? +1 815-826-6324 (815-8-BondAI) phil@AmericasSuretyBonds.com
Army Veteran Owned | Expert Surety Bonds Since 2004
In California a dump truck broker without a bond of at least $15,000 cannot furnish trucks to any construction project, and if a hauler sues for pay, the missing bond lets the court presume the broker failed to pay. The bond costs an annual premium instead of cash, and once it is issued you prove it each year by posting a copy on your own website or listing it with an industry registry of bonded brokers.
California Vehicle Code 34510.5 bars a broker of construction trucking services from furnishing construction transportation services to any construction project unless it holds a surety bond of not less than $15,000 executed by an admitted surety insurer. The bond secures payment to the independent dump truck carriers the broker hires. Licensed contractors fall outside the definition, and so do aggregate, asphalt, concrete and cement plants that arrange delivery of their own product without charging a fee for it.
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The definition comes from California Civil Code 3322. A broker of construction trucking services is any person, excluding a licensed contractor, that as a principal or agent arranges for transportation services to be provided by an independent contractor motor carrier of property in dump truck equipment and is responsible for paying that carrier's transportation charges. A motor carrier of property in dump truck equipment is a carrier permitted by the Department of Motor Vehicles that hauls construction commodities or materials in dump trucks.
Vehicle Code 34510.5 also carves out producers moving their own material. A rock product operation such as an aggregate operation, a hot mix asphalt plant, or a concrete, concrete product or Portland cement product manufacturing facility that arranges transportation of its own product, and accepts no fee for arranging it, is not treated as a broker.
The floor is $15,000, and the bond must be executed by an admitted surety insurer. It ensures payment of the claims of a contracted motor carrier of property in dump truck equipment if the broker fails to pay that carrier. Nothing in the statute stops a broker from carrying a larger bond.
The statute does not route this bond through a state licensing desk. Instead, once a year, the broker must either give written evidence of a valid bond to a third party nonprofit organization related to the industry that maintains a published database of bonded brokers, or post a current copy of the bond on the broker's own website. The nonprofit may not charge the broker for posting it or limit posting to its members. If the bond is cancelled or expires, the broker must tell the nonprofit or take the copy down.
Civil Code 3322 requires the broker to pay a dump truck carrier's charges by the 25th day after the end of the month in which the hauling was done, as long as the carrier submits its charges and paperwork by the fifth day after that month ends. In a good faith dispute the broker may withhold no more than 150 percent of the estimated disputed amount. Improperly withheld money carries a penalty of 2 percent per month, and the prevailing party in a collection action recovers attorney fees and costs. These payment rules apply only if the carrier complies with Vehicle Code Division 14.85, starting at Section 36000, when the work is performed.
Furnishing construction transportation services without the bond is a misdemeanor punishable by a fine of up to $5,000. In addition, the failure to have the bond creates a rebuttable presumption that the broker failed to pay the motor carrier the amount due.
Civil Code 3322 excludes a licensed contractor from the definition of a broker of construction trucking services, and Vehicle Code 34510.5 uses that same definition. Make sure the entity that arranges and pays the haulers is the one holding the license.
A hot mix asphalt plant, aggregate operation or concrete or Portland cement product facility that arranges transportation of its own product is outside the definition, provided it accepts no fee for arranging the hauling. Charging a brokerage fee takes the facility out of that exclusion.
It is the minimum. Vehicle Code 34510.5 says not less than $15,000. A broker can carry a larger bond.
The statute does not name a state agency. Each year you either give written evidence of the bond to an industry nonprofit that publishes a database of bonded brokers, or post a current copy on your own website. The nonprofit cannot charge you or limit posting to its members.
It is a misdemeanor with a fine of up to $5,000. If a carrier sues for payment, the missing bond creates a rebuttable presumption that you failed to pay what was owed.
By the 25th day after the end of the month in which the hauling was done, if the carrier submitted its charges and documents by the fifth day after month end. Late money carries a 2 percent per month penalty under Civil Code 3322.
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