BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 1858|
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THIRD READING
Bill No: AB 1858
Author: Santiago (D), et al.
Amended: 8/15/16 in Senate
Vote: 21
SENATE TRANS. & HOUSING COMMITTEE: 10-0, 6/28/16
AYES: Beall, Cannella, Allen, Bates, Gaines, Leyva, McGuire,
Mendoza, Roth, Wieckowski
NO VOTE RECORDED: Galgiani
SENATE APPROPRIATIONS COMMITTEE: 7-0, 8/11/16
AYES: Lara, Bates, Beall, Hill, McGuire, Mendoza, Nielsen
ASSEMBLY FLOOR: 78-0, 6/1/16 - See last page for vote
SUBJECT: Automobile dismantling: task force
SOURCE: State Board of Equalization
State of California Auto Dismantlers Association
DIGEST: This bill requires the state Department of Motor
Vehicles (DMV) to collaborate with specified agencies to
coordinate enforcement and compliance activity related to
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.
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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 (CalEPA), and Franchise Tax
Board, as well as indication of whether stormwater and other
specified permits are required and have been acquired.
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 collaborate with BOE, CalEPA, the Department
of Toxic Substances Control, the State Water Resources Control
Board (SWRCB), the Department of Resources Recycling and
Recovery, and the State Air Resources Board (ARB) to review
and coordinate enforcement and compliance activity related to
unlicensed and unregulated automobile dismantling, including
resulting tax evasion, environmental impacts, and public
health impacts.
2)Authorizes DMV and the agencies cited above to collaborate
with and solicit information from district attorneys,
certified unified program agencies, code enforcement agencies,
and any other federal, state, or local agencies with
jurisdictions over unlicensed and unregulated automobile
dismantlers, to achieve the purposes of this bill.
3)Requires DMV, in collaboration with the other agencies cited
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above, to submit a report to the Legislature by January 1,
2019, including but not limited to:
a) The number of unlicensed dismantlers investigated and
the number of investigations that resulted in an
administrative enforcement action, civil enforcement
action, or criminal prosecution.
b) Any statutory or regulatory gaps for investigating and
prosecuting unlicensed automobile dismantlers.
c) Information on how vehicles are acquired by unlicensed
dismantlers, places where unlicensed activity is suspected
or known to occur, and the types of facilities where
unlicensed activity tends to occur.
d) A summary of barriers to adequate and efficient
enforcement of environmental, tax, and licensing statutes
and regulations against unlicensed dismantlers.
e) Proposed strategies to bring unlicensed dismantlers
into compliance through compliance assistance, education,
and training, or other methods.
f) Recommendations to modify, eliminate, or continue
coordinated enforcement and compliance activities.
g) Recommendations for statutory or regulatory changes,
or both, needed for better enforcement against unlicensed
dismantlers
4)Sunsets the provisions of this bill on January 1, 2020.
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
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
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bill is a first step toward addressing this issue by requiring
specified state 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,
CalEPA, and others 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)Recent amendments. This bill was amended in the Senate
Appropriations Committee to require DMV to work with specified
agencies to coordinate activity (rather than establishing a
formal task force); add several agencies to this list;
authorize DMV and the other agencies to work with other
federal, state, or local agencies as needed; add several items
to the reporting requirement; and make several minor and
technical changes.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: No
According to the Senate Appropriations Committee:
DMV costs of $475,000 in 2017-18, $390,000 in 2018-19, and
$195,000 in 2019-20, and three PY of investigator staff to
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prepare and execute cases and collaborate with other specified
departments. First-year costs include costs for investigator
staff training and equipment. (Motor Vehicle Account).
Potential staffing costs for the BOE, CalEPA, the Department
of Toxic Substances Control, the SWRCB, the Department of
Resources Recycling and Recovery, and the ARB to provide
enforcement and resources for the investigation and reporting
of illegal auto dismantling activities. Depending on current
enforcement levels, this bill could impose costs ranging from
absorbable up to $150,000 annually per affected state entity
until 2020. For instance, BOE, CalEPA, and SWRCB all indicate
absorbable costs, while ARB estimates the need for an
additional PY of staff at a cost of $154,000.
SUPPORT: (Verified8/11/16)
State Board of Equalization (co-source)
State of California Auto Dismantlers Association (co-source)
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: (Verified8/11/16)
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None received
ASSEMBLY FLOOR: 78-0, 6/1/16
AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker,
Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke,
Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley,
Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Beth Gaines,
Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson,
Gomez, Gonzalez, Gordon, Gray, Grove, Harper, Roger Hernández,
Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine,
Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty,
Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell,
Olsen, Patterson, Quirk, Ridley-Thomas, Rodriguez, Salas,
Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner,
Waldron, Weber, Wilk, Williams, Wood, Rendon
NO VOTE RECORDED: Frazier, Hadley
Prepared by:Erin Riches / T. & H. / (916) 651-4121
8/15/16 20:10:10
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