BILL ANALYSIS                                                                                                                                                                                                    


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                                 THIRD READING

          Bill No:  AB 2461
          Author:   Emmerson (R)
          Amended:  8/12/10 in Senate
          Vote:     21

           SENATE TRANSPORTATION & HOUSING COMM  :  7-0, 6/15/10
          AYES:  Lowenthal, Huff, Ashburn, DeSaulnier, Harman, Kehoe,  
          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  

           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.



                                                               AB 2461

           Senate Floor Amendments  of 8/20/10 add double-jointing  
          language with SB 165 (Lowenthal).

           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,  

          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.


                                                               AB 2461

          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  
            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.

          5.Contains double-jointing language with SB 165  

          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  


                                                               AB 2461

          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  
          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  


                                                               AB 2461

          authority to implement certain procedures to test specially  
          constructed vehicles required to obtain a certificate of  
          compliance under the amnesty program.

           ASSEMBLY FLOOR  :  
          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  8/12/10   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

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