BILL ANALYSIS ------------------------------------------------------------ |SENATE RULES COMMITTEE | AB 2461| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ THIRD READING Bill No: AB 2461 Author: Emmerson (R) Amended: 8/5/10 in Senate Vote: 21 SENATE TRANSPORTATION & HOUSING COMM : 7-0, 6/15/10 AYES: Lowenthal, Huff, Ashburn, DeSaulnier, Harman, Kehoe, Pavley NO VOTE RECORDED: Oropeza, Simitian SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8 ASSEMBLY FLOOR : 71-0, 4/26/10 - See last page for vote SUBJECT : Specially constructed vehicles: amnesty program SOURCE : Author DIGEST : This bill extends the amnesty program for incorrectly or fraudulently registered vehicles, exempts specially constructed vehicles seeking amnesty from the visual component of the smog inspection, and requires that a certificate of compliance be issued to a specially constructed vehicle that has applied for amnesty if the vehicle has met the inspection and maintenance tailpipe emissions requirements, as determined by the Bureau of Automotive Repair, for the model year assigned in the amnesty application. CONTINUED AB 2461 Page 2 ANALYSIS : AB 619 (Emmerson), Chapter 420, Statutes of 2008, established a vehicle registration amnesty program whereby vehicle owners who had previously registered their vehicle incorrectly or fraudulently may, with some exceptions, correctly register their vehicle and avoid criminal prosecution for false statements relating to the value, make, or model of the vehicle or for failure to register the vehicle. The amnesty program is in effect for one year, beginning January 1, 2010 and ending December 31, 2010. The Department of Motor Vehicles (DMV), which administers the program, is required to grant amnesty to a vehicle owner if the owner meets the following requirements: The owner has filed a completed amnesty application with DMV attesting, under penalty of perjury, to the owner's eligibility to participate in the program. The owner has correctly registered the vehicle, including disclosing to DMV the make, model, and true cost of the vehicle, including parts and labor; paying to DMV all fees and penalties owed for the underreporting of the vehicle's value and the nonpayment of taxes or fees; and submitting a certificate of compliance indicating that the vehicle has passed its smog inspection. The emission control standards that a vehicle must meet in order to pass its smog inspection are determined by the vehicle's model year. Under the amnesty program, a specially constructed vehicle, defined as a vehicle that is "built for private use, not for resale, and is not constructed by a licensed manufacturer or remanufacturer," is assigned a model year of the calendar year in which the vehicle owner applied for amnesty (i.e., 2010). This bill: 1.Extends the amnesty program for incorrectly or fraudulently registered vehicles until June 30, 2012. 2.Require that a certificate of compliance be issued to a specially constructed vehicle that has applied for amnesty if the vehicle has met the inspection and AB 2461 Page 3 maintenance tailpipe emissions requirements, as determined by the Bureau of Automotive Repair, for the model year assigned in the amnesty application. 3.Exempts a specially constructed vehicle that has applied for amnesty from the requirements of a visual inspection 4.Sunsets the amnesty program as of January 1, 2013. Background AB 619 was introduced in response to an ongoing investigation conducted by the California Attorney General's Office regarding the fraudulent titling of vehicles in California. Owners of specially constructed vehicles, also referred to as "kit cars" and "hot rods," are being registered as the year of the vehicle they seek to replicate using a fraudulent title or other paperwork. According to the Attorney General's Office, the primary reason for mis-titling vehicles with earlier model years is to avoid the requirements of the smog check program. In the process, vehicle owners often under-report the value of their vehicle in order to owe less in sales tax and the vehicle license fee than they would otherwise be required to pay. The Attorney General's Office estimates that approximately 70,000 vehicles in California have been fraudulently titled and that the state has lost approximately $285 million in revenue. The Attorney General's Office has been targeting businesses that supply fraudulent titles to vehicle owners but does not have the resources to pursue each individual who has fraudulently titled his or her vehicle. The vehicle registration amnesty program was established in order to encourage vehicle owners to re-register their vehicles properly without fear of criminal prosecution. The specially constructed vehicles entering the amnesty program are produced from a variety of parts and equipped with engines never designed to meet current model-year emissions standards. A retrofit kit has been developed, however, that will allow this population of vehicles to meet current year tailpipe standards. The package of parts developed for this application is slightly different for AB 2461 Page 4 each vehicle, making it impossible to compare any of these vehicles to current-year production original equipment manufacturer (OEM) vehicles. In general, a smog inspection involves four components: a tailpipe emissions test, an evaporative emissions test, a smoke test, and a functional inspection. This retrofit kit will allow the vehicle to produce fewer tailpipe emissions, but will not meet the standards for a functional inspection whereby a technician inspects the vehicle to ensure that all required emission control equipment is in place on the vehicle. Under the conventional procedures for smog inspections, therefore, a specially constructed vehicle equipped with this retrofit device would fail its inspection, even if the vehicle passed the tailpipe test. In consideration of the retrofit device, the Air Resources Board (ARB) recommended to BAR procedures to test specially constructed vehicles seeking amnesty that only included the tailpipe and smoke tests, not the test for evaporative emissions or the visual, functional inspection. The author contends that BAR did not believe it had the authority to implement the ARB- recommended procedure for testing amnesty vehicles, believing that AB 619 required them to do a full inspection. FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: Yes SUPPORT : (Verified 8/4/10) California State Association of Counties ARGUMENTS IN SUPPORT : According to the author's office, this bill is a clean-up measure to AB 619, which established an amnesty program for improperly titled or registered specially constructed vehicles. This bill would provide the Bureau of Automotive Repair unambiguous legal authority to implement certain procedures to test specially constructed vehicles required to obtain a certificate of compliance under the amnesty program. ASSEMBLY FLOOR : AB 2461 Page 5 AYES: Adams, Ammiano, Anderson, Beall, Bill Berryhill, Tom Berryhill, Blakeslee, Block, Blumenfield, Bradford, Brownley, Buchanan, Caballero, Charles Calderon, Carter, Chesbro, Conway, Cook, Coto, Davis, De La Torre, De Leon, DeVore, Emmerson, Eng, Evans, Feuer, Fletcher, Fong, Fuentes, Gaines, Galgiani, Garrick, Gilmore, Hagman, Hall, Harkey, Hayashi, Hernandez, Hill, Huber, Huffman, Jeffries, Jones, Knight, Lieu, Logue, Bonnie Lowenthal, Ma, Mendoza, Miller, Nava, Nestande, Niello, Nielsen, Norby, Portantino, Ruskin, Saldana, Silva, Skinner, Smyth, Solorio, Audra Strickland, Swanson, Torlakson, Torres, Torrico, Tran, Villines, Yamada NO VOTE RECORDED: Arambula, Bass, Fuller, Furutani, Monning, V. Manuel Perez, Salas, John A. Perez, Vacancy JA:nl 8/5/10 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END ****