BILL ANALYSIS Ó
AB 1858
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CONCURRENCE IN SENATE AMENDMENTS
AB
1858 (Santiago)
As Amended August 15, 2016
Majority vote
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|ASSEMBLY: |78-0 |(June 1, 2016) |SENATE: |39-0 |(August 17, |
| | | | | |2016) |
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Original Committee Reference: TRANS.
SUMMARY: Requires the Department of Motor Vehicles (DMV) to
collaborate with the State Board of Equalization (BOE), the
California Environmental Protection Agency (CalEPA), the
Department of Toxic Substances Control, the State Water
Resources Control Board, the Department of Resources Recycling
and Recovery, and the State Air Resources Board to review and
coordinate enforcement and compliance activity related to
unlicensed automobile dismantling, as specified, and to report
specified findings to the Legislature by January 1, 2019.
The Senate amendments:
1)Delete the requirement that DMV establish an Unlicensed
Automobile Dismantling Task Force and instead require DMV to
collaborate with the above named agencies to investigate
unlicensed automobile dismantling.
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2)Authorize DMV and the above named agencies 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)Delete the requirement that DMV report on the number of leads
or complaints received and instead report on the following:
the number of unlicensed dismantlers investigated and the
number of investigations that resulted in enforcement action
or criminal prosecution; any identified statutory or
regulatory gaps for investigating and prosecuting unlicensed
dismantlers; information on how vehicles are acquired by
unlicensed dismantlers and places where unlicensed activity
occurs; a summary of the barriers to the adequate and
efficient enforcement of environmental, tax, and licensing
statutes and regulations against unlicensed dismantlers; and
proposed strategies for bringing unlicensed dismantlers into
compliance.
4)Extend the date DMV is required to report to the Legislature
to January 1, 2019.
5)Make other minor and technical changes.
EXISTING LAW:
1)Defines an "automobile dismantler," as a person who dismantles
three or more personal vehicles within any 12-month period,
and prohibits any person from acting as an automobile
dismantler without first having procured a license or
temporary permit issued by DMV.
2)Requires an applicant for an auto dismantler's license to
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provide DMV with information as to his or her character,
honesty, integrity, and reputation, as DMV may consider
necessary.
3)Requires an applicant for a new license or the renewal of a
license to submit certain BOE, CalEPA, and Franchise Tax Board
identification numbers and other specific environmental and
taxation-related information as part of the application, if
the applicant is required by other provisions of law to have
those specific permits, numbers, or plans.
FISCAL EFFECT: According to the Assembly Appropriations
Committee:
1)The DMV indicates it would redirect three
investigative/supervisory staff to prepare and execute cases,
receive training, oversee the task force, and report to the
Legislature. BOE and CalEPA would similarly redirect existing
investigative staff.
2)To the extent the task force reduces unlicensed dismantler
activity, there would be increased state and local tax
revenues.
COMMENTS: Existing law requires an automobile dismantler to
meet certain standards when applying for a license from DMV,
including compliance with a number of environmental and standard
taxation requirements. 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, or 360,000 vehicles per year, are being acquired and
processed by unlicensed and unregulated dismantlers,
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representing nearly 2 million tires and 2 million gallons of
hazardous fluids annually. 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 contends that the drop in the number of licensed
dismantlers in California from 1,236 to 1,072 in the past five
years is attributable to the lower costs and ease of
transactions associated with operating as an unlicensed
dismantler. For example, an unlicensed dismantler can offer
vehicle components for sale online, without complying with the
restrictions placed on licensed dismantlers operating out of a
physical storefront. The State of California Auto Dismantlers
Association, the co-sponsor of this bill, estimates the amount
of sales tax that is uncollected by the state at $100 million
annually.
This bill would direct DMV to collaborate with a number of
environmental and tax collecting agencies for the purpose
investigating the occurrences of underground, unlicensed
automobile dismantling in violation of existing law, including
resulting tax evasion and environmental damage. The author
intends to make the issue of unlicensed dismantling a priority
for DMV, BOE, and CalEPA in order to determine how extensive and
harmful the practice truly is.
While previous versions of this bill as passed by the Assembly
required DMV to establish a task force to investigate unlicensed
activity, the current version of the bill merely requires DMV to
collaborate with specified agencies to investigate the activity
and report back the Legislature.
Please see the policy committee analysis for full discussion of
this bill.
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Analysis Prepared by:
Justin Behrens / TRANS. / (916) 319-2093 FN:
0004449