HOUSE BILL REPORT

HB 1282

BYRepresentatives Walk, Schmidt and Baugher

Defining motor freight forwarders and brokers.

House Committe on Transportation

Majority Report:  Do pass.  (24)

      Signed by Representatives Walk, Chair; Baugher, Vice Chair; Schmidt, Ranking Republican Member; Wood, Assistant Ranking Republican Member; Betrozoff, Cantwell, Day, G. Fisher, R. Fisher, Gallagher, Hankins, Heavey, Jones, Kremen, R. Meyers, Nelson, Patrick, Prentice, Smith, D. Sommers, Todd, Walker, S. Wilson and Zellinsky.

House Staff:Mary McLaughlin (786-7309)

AS PASSED HOUSE FEBRUARY 24, 1989

BACKGROUND:

Until last year, the Utilities & Transportation Commission (UTC) regulated an intrastate freight broker or forwarder under the definition of "common or contract carrier."  A broker arranges for transportation for compensation and a forwarder consolidates freight for a fee.  Five intrastate broker permits are on file with the UTC.  These brokers are required to pay a one-time $150 application fee and post a surety bond.

Legislation was enacted last year that created a separate definition for broker, increased the surety bond for intrastate brokers from $1,000 to a minimum $5,000, and required interstate brokers to post a bond.  The new language changed the definition from a common or contract carrier providing transportation of property to a person arranging for transportation by two or more inter- or intrastate carriers.  During the process of developing new WAC rules to implement this legislation, the Attorney General informed the Commission that the elimination of "common or contract carrier" in the definition effectively deregulated intrastate brokers, and therefore, the Commission's applicable WAC rules should be repealed.  This was not the intent of the legislation.

Interstate brokers and forwarders are currently required to register with the Commission, pay a one-time $25 registration fee and post a bond.  There is no provision for the Commission to deny or cancel the registration of the interstate broker or forwarder who fails to maintain a surety bond.

SUMMARY:

The former definition of a freight broker and forwarder is restored; i.e., brokers and forwarders are included in the definition of "common or contract carrier."  Restoration of this language clearly gives the UTC the authority to continue regulation of intrastate brokers and forwarders.

The surety bond requirement is expanded to clarify that the Commission may deny or cancel the registration of an interstate broker or forwarder for failure to maintain a bond.

Fiscal Note:      Not Requested.

House Committee ‑ Testified For:    Commissioner A.J. Pardini, Utilities and Transportation Commission; Martin Sangster, Washington Trucking Association; Mike Jonson, Washington Trucking Association; Cindy Zehnder, Teamsters 28.

House Committee - Testified Against:      None Presented.

House Committee - Testimony For:    New language eliminates the confusion over the authority of the Utilities & Transportation Commission to regulate intrastate freight brokers and forwarders, and allows the UTC to take action when interstate brokers fail to maintain a bond.

House Committee - Testimony Against:      None Presented.