Amended in Assembly May 27, 2016

California Legislature—2015–16 Regular Session

Assembly Bill No. 1858

Introduced by Assembly Member Santiago

February 10, 2016

An act to add and repeal Section 11545 of the Vehicle Code, relating to vehicle dismantling.

LEGISLATIVE COUNSEL’S DIGEST

AB 1858, as amended, Santiago. Automobile dismantling: task force.

Existing law establishes the Department of Motor Vehicles, the State Board of Equalization, and the California Environmental Protection Agency, and prescribes the powers and duties of those state agencies. Under existing law, it is unlawful for any person to act as an automobile dismantler without having an established place of business, meeting specified requirements, and having a current, valid license or temporary permit issued by the Department of Motor Vehicles.

This bill would, until January 1, 2019, require the department to establish an Unlicensed Automobile Dismantling Task Force comprised of representatives of the department, the State Board of Equalization, and the California Environmental Protection Agency. The bill would require the task force to collaborate to investigate the occurrences of begin delete underground, end delete unlicensed vehicle dismantling in violation of those provisions, including resulting tax evasion and environmental damage. The bill would require the task force, on or before March 1, 2018, to submit a report to the Legislature including specified information pertaining to the task force’s activities. The bill would state related findings and declarations of the Legislature.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

The Legislature finds and declares the following:

(a) Automobile dismantlers are occupationally licensed by the
Department of Motor Vehicles to provide an essential service that
directly addresses society’s begin delete ever increasing problem end delete begin insert increasing
challenge end insert of what to do with end-of-life vehicles.

begin delete

(b) An estimated 1.2 million vehicles will reach the end of their
useful lives this year in California, either by determination of their
owners or by being declared a total loss by an insurance company.
While those vehicles might otherwise end up on the roadside or
abandoned in empty lots, licensed dismantlers acquire them and
safely convert them into reusable and recycled commodities.

end delete begin delete

(c)

end delete

begin insert (b) end insert  Automobile dismantlers face an array of costly yet necessary
requirements to properly process end-of-life vehicles, including,
but not limited to, safely removing and recycling unused gasoline,
brake fluid, engine oil, transmission fluid, antifreeze, tires, mercury
switches, batteries, and freon.

begin delete

(d)

end delete

begin insert (c) end insert  Automobile dismantlers are small and medium sized
businesses regulated by over a dozen state, local, and federal
agencies with jurisdiction over water quality, hazardous materials,
air quality, worker safety, payment of taxes, and vehicle titling
requirements.

begin delete

(e) The underground economy in California is a significant
dilemma facing the automobile dismantling industry with at least
30% of the end-of-life vehicles disappearing into the underground
economy each year and not being accounted for.

end delete begin delete

(f) Underground automobile dismantling operators are cash-only
businesses that do not face the same licensing requirements,
environmental regulatory requirements, insurance obligations,
work place safety requirements, and tax liability as required by
law for licensed dismantlers, resulting in these bad actors enjoying
a significant and growing competitive advantage over the licensed
dismantlers when purchasing vehicles at salvage pools, insurance
auctions, and from the public.

end delete begin insert

(d) Unlicensed automobile dismantlers do not face the same
licensing requirements, environmental regulatory requirements,
insurance obligations, workplace safety requirements, and tax
liability as required by law for licensed automobile dismantlers.

end insert begin delete

(g) The impacts

end delete

begin insert (e) end insert begin insert   end insert begin insert The impact end insert of unlicensed and unregulated automobile
dismantling and limited enforcement activity has led to a
begin delete growing end delete lack of compliance with dismantler laws, begin delete illegal dumping
and disposal of vehicles, improper hazardous waste handling,
unsafe workplaces, non-payments of taxes, and potential adverse
impacts to public health. end delete begin insert environmental requirements, and payment
of taxes. end insert

begin delete

(h) The bulk of this unlicensed and unregulated automobile
dismantling is occurring in California’s most vulnerable,
disadvantaged, and underserved communities.

(i)

end delete

begin insert (f) end insert  It is the intent of the Legislature to enact legislation to
establish a multiagency task force begin delete or partnership end delete to collaborate in
combating begin delete underground, unlicensed, end delete begin insert unlicensed end insert and unregulated
automobile dismantling for the purposes of investigating
environmental quality begin delete issues, public health concerns, and criminal end delete
begin insert issues and end insert tax evasion that begin delete is end delete begin insert are end insert occurring as a result of this
activity and the lack of enforcement.

SEC. 2.  

Section 11545 is added to the Vehicle Code, to read:

11545.  

(a) The department shall establish an Unlicensed
Automobile Dismantling Task Force comprised of representatives
of the department, the State Board of Equalization, and the
California Environmental Protection Agency.

(b) The task force shall collaborate to investigate the occurrences
of begin delete underground, end delete unlicensed automobile dismantling in violation
of this chapter, including resulting tax evasion and environmental
damage.

(c) (1) On or before March 1, 2018, the task force shall submit
a report to the Legislature including the following information:

(A) The number of leads or complaints received by the task
force.

(B) The number of complaints investigated and complaints that
resulted in a civil action or criminal prosecution.

(C) Recommendations for modifying, eliminating, or continuing
the task force’s activities.

(D) Recommendations for statutory or regulatory changes, or
both, needed to better allow for enforcement against unlicensed
automobile dismantlers.

(2) The report required by this subdivision shall be submitted
to the Legislature pursuant to Section 9795 of the Government
Code.

(d) This section shall remain in effect only until January 1, 2019,
and as of that date is repealed, unless a later enacted statute, that
is enacted before January 1, 2019, deletes or extends that date.