BILL ANALYSIS Ó
AB 1858
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Date of Hearing: April 20, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
AB
1858 (Santiago) - As Introduced February 10, 2016
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill, until January 1, 2019, requires the DMV to establish
an Unlicensed Automobile Dismantling Task Force comprised of
representatives of the DMV, the State Board of Equalization
(BOE), and the California Environmental Protection Agency
(CalEPA). Specifically, this bill:
1)Directs the task force to investigate the occurrences of
AB 1858
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underground, unlicensed automobile dismantling in violation of
existing law, including resulting tax evasion and
environmental damage.
2)Requires the task force to report specified information to the
Legislature by March 1, 2018, including:
a) The number of leads or complaints received by the task
force;
b) The numbers of complaints investigated and that resulted
in a civil action or criminal prosecution;
c) Recommendations for statutory or regulatory changes
needed to better allow for enforcement against unlicensed
automobile dismantlers.
FISCAL EFFECT:
1)The DMV anticipates the need for investigative/supervisory
staff (three positions) to prepare and execute cases, receive
training, oversee the task force, and report to the
Legislature. Estimated special fund costs are $200,000 in
2016-17, $300,000 in 2017-18, and $150,000 in 2018-19.
Assuming the BOE and CalEPA each requires one position to
participate on the task force, each entity will incur total
costs of around $200,000 over the two years.
2)To the extent the task force reduces unlicensed dismantler
activity, there will be increased state and local tax
revenues.
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COMMENTS:
1)Background. An automobile dismantler must hold a valid license
from DMV in order to legally conduct business. Dismantlers
process end-of-life vehicles by properly removing, recycling,
or disposing of unused gasoline, and other fluids and
chemicals, and ensuring that remaining metal and parts that
cannot be resold are properly recycled. The disposal and
recycling methods are consistent with the requirements imposed
by the environmental permits a dismantler must obtain prior to
being licensed by DMV.
According to the author, 30% of end-of-life vehicles in
California (360,000 vehicles per year) are being acquired and
processed by unlicensed and unregulated dismantlers. These
transactions occur outside the existing legal and regulatory
framework for automobile dismantlers, meaning unlicensed
dismantlers are not necessarily complying with the
environmental and tax requirements imposed on licensed
dismantlers.
The author states that the consequences of the operation of
unlicensed dismantlers includes "lack of compliance with DMV
dealer and dismantler laws, illegal dumping and disposal of
vehicles, improper hazardous waste handling, cash-only
transactions and employee payments, non-payment of sales and
income taxes, car thefts, violations of worker safety
protections, lack of ADA compliance an violations of
advertising laws." The State of California Auto Dismantlers
Association (SCADA), the co-sponsor of this bill, estimates
the amount of sales tax that is uncollected by the state at
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$100 million annually.
2)Purpose. This bill would direct DMV to establish an Unlicensed
Automobile Dismantling Task Force for the purposes of
investigating the occurrences of underground, unlicensed
automobile dismantling in violation of existing law, including
resulting tax evasion and environmental damage.
Analysis Prepared by:Chuck Nicol / APPR. / (916)
319-2081