A provision in California's autonomous vehicle bill creates a significant barrier for small towing operators—and most don't know it exists yet.
Most California towing and roadside-service operators have never heard of SB1246's buried provision on autonomous vehicles. But starting July 1, 2028, it will determine whether they can legally work in the emerging AV incident-response market—or whether they're locked out entirely.
Here's what's actually in the bill:
Under Vehicle Code § 38800(e), added by Section 7 of SB1246, tow contractors can only qualify as "local incident technicians" for autonomous vehicle manufacturers if they meet one of two conditions:
Option 1: Employ at least 50 local incident technicians on staff.
Option 2: Already hold an active government tow contract with the California Highway Patrol, a local law enforcement agency, Caltrans, or a local transportation agency.
If you meet neither condition, you cannot legally serve as a contractor for AV manufacturers' incident-response operations under this definition.
As autonomous vehicles become more common on California roads, manufacturers will need roadside responders for breakdowns, accidents, and other incidents. That's a new revenue stream—but only for operators who clear this threshold.
For most independent tow shops and small regional operators, 50 employees is a significant scale. Many successful towing businesses operate with far fewer technicians. The provision effectively creates a two-tier system: large operators and those with existing government relationships can participate; smaller independents cannot, unless they expand dramatically or secure a government contract first.
The government-contract exemption is important to note. If you already tow for the CHP, a local police department, or Caltrans, you're grandfathered in—you don't need to hit the 50-employee mark.
The rule becomes operative July 1, 2028. That gives operators roughly three and a half years to plan.
If you're interested in the AV incident-response market and don't currently have 50 technicians or a government contract, now is the time to evaluate your options: scaling your workforce, pursuing a government tow contract, or deciding this market isn't a priority for your business model.
If you already hold a government contract, document it. You'll likely need proof of that relationship when AV manufacturers begin vetting contractors.
SB1246 is primarily about autonomous vehicle safety and regulation. This provision is one small part of a much larger bill. But for towing and roadside-service businesses, it's the part that directly affects your ability to compete in a new market segment. It's worth understanding now, before the July 2028 deadline arrives.
For a detailed breakdown of how this provision applies to your specific operation, consult your trade association or legal advisor familiar with California transportation law.