BILL ANALYSIS Ó
SENATE COMMITTEE ON TRANSPORTATION AND HOUSING
Senator Jim Beall, Chair
2015 - 2016 Regular
Bill No: AB 1858 Hearing Date: 6/28/2016
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|Author: |Santiago |
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|Version: |5/27/2016 |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant|Erin Riches |
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SUBJECT: Automobile dismantling: task force
DIGEST: This bill requires the state Department of Motor
Vehicles (DMV) to establish an Unlicensed Automobile Dismantling
Task Force to investigate occurrences of unlicensed automobile
dismantling.
ANALYSIS:
Existing law:
1)Defines an automobile dismantler as a person who dismantles
three or more personal vehicles within any 12-month period.
2)Requires a person to have an established place of business,
and have procured a license or temporary permit from the DMV,
prior to acting as a dismantler.
3)Requires an applicant for an automobile dismantler license to
provide to the DMV, along with the application, information
relating to the applicant's "character, honesty, integrity,
and reputation, as the department may consider necessary."
4)Requires an applicant to provide identification numbers
related to the Board of Equalization (BOE), California
Environmental Protection Agency (Cal EPA), and Franchise Tax
Board, as well as indication of whether stormwater and other
specified permits are required and have been acquired.
AB 1858 (Santiago) Page 2 of ?
5)Requires a licensed automobile dismantler to meet certain
requirements, such as mailing a notice of acquisition of a
vehicle to the Department of Justice and not commencing to
dismantle the vehicle until 10 calendar days after this notice
has been mailed.
6)Requires the California Highway Patrol to inspect vehicles
previously declared a total loss during the dismantling
process when such vehicles are later presented to the DMV for
registration after reconstruction.
This bill:
1)Requires DMV to establish an Unlicensed Automobile Dismantling
Task Force (Task Force) comprised of representatives of the
DMV, the BOE, and Cal EPA.
2)Requires the Task Force to collaborate to investigate
occurrences of unlicensed automobile dismantling, including
resulting tax evasion and environmental damage.
3)Requires the Task Force to submit a report to the Legislature
by March 1, 2018, including:
a) The number of leads or complaints investigated by the
Task Force
b) The number of complaints investigated and the number
resulting in a civil action or criminal prosecution
c) Recommendations for modifying, eliminating, or
continuing Task Force activities
d) Recommendations for statutory or regulatory changes,
or both, needed to better allow for enforcement against
unlicensed dismantlers
4)Sunsets the provisions of this bill on January 1, 2019.
COMMENTS:
1)Purpose. The author states that the licensed automobile
dismantling industry estimates that at least 30% of the 1.2
million end-of-life vehicles in California each year are
acquired by unlicensed and unregulated dismantlers. These
360,000 vehicles represent nearly two million tires and two
million gallons of hazardous fluids. The author states that
California has lost approximately 40 licensed dismantlers per
AB 1858 (Santiago) Page 3 of ?
year for the past four years. This is representative of a
historical decline over the past decade that is attributed to
the growing costs and regulatory advantage that unlicensed
dismantlers enjoy over licensed dismantlers, forcing good
actors to either go out of business or go "underground" and
operate on an unlicensed basis. The author states that this
bill is a first step toward addressing this issue by requiring
three agencies to work together to find a solution.
2)Addressing a growing problem. The State of California Auto
Dismantlers Association (SCADA), co-sponsor of this bill,
states that licensed dismantlers must meet a variety of
requirements, such as operating in proper structures,
obtaining appropriate permits, maintaining expensive
depolluting equipment, and tracking hazardous materials.
According to SCADA, unlicensed dismantlers commit activities
that violate a variety of laws, regulations, and tax rules on
a daily basis, including illegal dumping and disposal, paying
employees in cash, violating vehicle export laws, and
transporting stolen property, among others. SCADA states that
this bill will help put pressure on unlicensed dismantlers and
potentially make them "second-guess whether it's worth the
consequences of getting caught." The BOE, also a co-sponsor
of this bill, states that combining efforts with the DMV and
Cal EPA will enable the BOE to benefit from those agencies'
unique perspectives and help BOE develop new methods to
investigate and reduce tax evasion by this specific segment of
the underground economy.
3)Future amendments. The author's office is working with Cal
EPA and other stakeholders to fine-tune the language of this
bill to more specifically detail the duties of the Task Force.
Negotiations were not complete as of this writing so the
author plans to amend the bill when it reaches the
Appropriations Committee to address stakeholder concerns.
Assembly Votes:
Floor:78-0
Appr:20-0
Trans:16-0
Related Legislation:
AB 576 (V. Manuel Perez, Chapter 614, Statutes of 2013) -
established a pilot program to create the Revenue Recovery and
AB 1858 (Santiago) Page 4 of ?
Collaborative Enforcement Team, comprised of specified agencies,
to collaborate in combating criminal tax evasion associated with
the underground economy.
AB 805 (Fuentes, Chapter 475, Statutes of 2009) - required the
DMV to investigate and verify all information submitted on an
application for an automobile dismantler's original or renewal
license.
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes
Local: No
POSITIONS: (Communicated to the committee before noon on
Wednesday,
June 22, 2016.)
SUPPORT:
State Board of Equalization (co-sponsor)
State of California Auto Dismantlers Association (co-sponsor)
Association of Deputy District Attorneys
Association of Los Angeles Deputy Sheriffs
Auto Dismantlers of Southern California
Automotive Recyclers Association
California Association of Code Enforcement Officers
California Association of Environmental Health Administrators
California Coastkeeper Alliance
Californians Against Waste
Coalition for Clean Air
IKQ Corporation
Institute of Scrap Recycling Industries, West Coast Chapter
Los Angeles Police Protective League
Pick-N-Pull
Riverside Sheriffs Association
San Diego County Auto Recyclers Association
Schnitzer Steel Industries
Valley Auto Dismantlers Association
OPPOSITION:
None received
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