BILL ANALYSIS
SENATE TRANSPORTATION & HOUSING COMMITTEE BILL NO: ab 2461
SENATOR ALAN LOWENTHAL, CHAIRMAN AUTHOR: emmerson
VERSION: 5/24/10
Analysis by: Jennifer Gress FISCAL: yes
Hearing date: June 15, 2010
SUBJECT:
Specially constructed vehicles: amnesty program.
DESCRIPTION:
This bill extends the amnesty program for incorrectly or
fraudulently registered vehicles by two years, exempts specially
constructed vehicles seeking amnesty that were "built" prior to
1976 from the smog check program, and provides that specially
constructed vehicles seeking amnesty are exempt from the visual
component of the smog inspection.
ANALYSIS:
AB 619 (Emmerson), Chapter 420, Statutes of 2008, established a
vehicle registration amnesty program whereby vehicle owners who
had previously registered their vehicle incorrectly or
fraudulently may, with some exceptions, correctly register their
vehicle and avoid criminal prosecution for false statements
relating to the value, make, or model of the vehicle or for
failure to register the vehicle. The amnesty program is in
effect for one year, beginning January 1, 2010 and ending
December 31, 2010.
The Department of Motor Vehicles (DMV), which administers the
program, is required to grant amnesty to a vehicle owner if the
owner meets the following requirements:
The owner has filed a completed amnesty application with DMV
attesting, under penalty of perjury, to the owner's
eligibility to participate in the program.
The owner has correctly registered the vehicle, including
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disclosing to DMV the make, model, and true cost of the
vehicle, including parts and labor; paying to DMV all fees and
penalties owed for the underreporting of the vehicle's value
and the nonpayment of taxes or fees; and submitting a
certificate of compliance indicating that the vehicle has
passed its smog inspection.
The emission control standards that a vehicle must meet in order
to pass its smog inspection are determined by the vehicle's
model year. Under the amnesty program, a specially constructed
vehicle, defined as a vehicle that is "built for private use,
not for resale, and is not constructed by a licensed
manufacturer or remanufacturer," is assigned a model year of the
calendar year in which the vehicle owner applied for amnesty
(i.e., 2010).
This bill :
Extends the amnesty program for incorrectly or fraudulently
registered vehicles by two years.
Exempts specially constructed vehicles seeking amnesty that
were "built" prior to 1976 from the smog check program.
Provides that specially constructed vehicles seeking amnesty
are exempt from the visual component of the smog inspection.
COMMENTS:
1.Purpose . According to the author, this bill is a clean-up
measure to AB 619, which established an amnesty program for
improperly titled or registered specially constructed
vehicles. This bill would provide the Bureau of Automotive
Repair (BAR) unambiguous legal authority to implement certain
procedures to test specially constructed vehicles required to
obtain a certificate of compliance under the amnesty program.
The specially constructed vehicles entering the amnesty
program are produced from a variety of parts and equipped with
engines never designed to meet current model-year emissions
standards. A retrofit kit has been developed, however, that
will allow this population of vehicles to meet current year
tailpipe standards. The package of parts developed for this
application is slightly different for each vehicle, making it
impossible to compare any of these vehicles to current-year
production original equipment manufacturer (OEM) vehicles.
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In general, a smog inspection involves four components: a
tailpipe emissions test, an evaporative emissions test, a
smoke test, and a functional inspection. This retrofit kit
will allow the vehicle to produce fewer tailpipe emissions,
but will not meet the standards for a functional inspection
whereby a technician inspects the vehicle to ensure that all
required emission control equipment is in place on the
vehicle. Under the conventional procedures for smog
inspections, therefore, a specially constructed vehicle
equipped with this retrofit device would fail its inspection,
even if the vehicle passed the tailpipe test.
In consideration of the retrofit device, the Air Resources
Board (ARB) recommended to BAR procedures to test specially
constructed vehicles seeking amnesty that only included the
tailpipe and smoke tests, not the test for evaporative
emissions or the visual, functional inspection. The author
contends that BAR did not believe it had the authority to
implement the ARB- recommended procedure for testing amnesty
vehicles, believing that AB 619 required them to do a full
inspection.
This bill also extends the sunset for the original amnesty
program to the end of 2012. Under AB 619, amnesty would only
be available for one year, sunsetting at the end of 2010.
Because the clouded legal authority surrounding the emissions
testing requirements caused months of delay, it is necessary
to extend the program deadline.
2.Background on the vehicle registration amnesty program . AB
619 was introduced in response to an ongoing investigation
conducted by the California Attorney General's Office
regarding the fraudulent titling of vehicles in California.
Owners of specially constructed vehicles, also referred to as
"kit cars" and "hot rods," are being registered as the year of
the vehicle they seek to replicate using a fraudulent title or
other paperwork. According to the Attorney General's Office,
the primary reason for mis-titling vehicles with earlier model
years is to avoid the requirements of the smog check program.
In the process, vehicle owners often under-report the value of
their vehicle in order to owe less in sales tax and the
vehicle license fee than they would otherwise be required to
pay. The Attorney General's Office estimates that
approximately 70,000 vehicles in California have been
fraudulently titled and that the state has lost approximately
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$285 million in revenue.
The Attorney General's Office has been targeting businesses
that supply fraudulent titles to vehicle owners but does not
have the resources to pursue each individual who has
fraudulently titled his or her vehicle. The vehicle
registration amnesty program was established in order to
encourage vehicle owners to re-register their vehicles
properly without fear of criminal prosecution.
3.Amnesty period . The original amnesty period was one year,
January 1, 2010 to December 31, 2010. This bill extends it
two additional years from January 1, 2010 to December 31, 2012
for a total of three years. The author and sponsor, the
Specialty Equipment Manufacturers Association, contend that
the purpose of providing two additional years is to provide
BAR time to develop appropriate procedures to test vehicles
under the program. Because the amnesty program is currently
authorized and the revised procedures are simply an exemption
of two components of the usual smog inspection, BAR reports it
will not require a full additional year to ready itself to
implement the program. For this reason, the author or
committee may wish to consider an amendment that would extend
the amnesty period by only one year, to January 1, 2012.
4.Year the vehicle was "built" and exemptions from smog check .
The bill exempts specially constructed vehicles "built" prior
to 1976 and seeking amnesty from the requirement that it pass
its smog inspection similar to the exemption that currently
applies to any other pre-1976 vehicle. There is no way to
determine when a specially constructed vehicle was "built."
Even if this provision were amended to reflect when the
vehicle was "registered," DMV has no way to verify when a
specially constructed vehicle was originally registered.
Finally, the original agreement when developing AB 619 was
that all amnesty vehicles would be required to submit a
certificate of compliance. While this provision of the bill
is consistent with current law for pre-1976 vehicles, it is
inconsistent with the agreement reached when negotiating
amendments to AB 619 for hearing in this committee.
Furthermore, if a vehicle owner had genuinely registered his
or her specially constructed vehicle before 1976, the vehicle
would not have been subject to the smog check program, thus
negating much of the reason to mis-identify the model year.
The sponsor is concerned about those people who, back in 1975
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or earlier, were not trying to avoid smog inspection, but were
instead under-reporting the value of their vehicle. The
sponsor would like to afford those individuals the same
exemption that they would have enjoyed had they registered
their vehicle correctly. The number of people in this
situation is likely to be extremely low. The likelihood that
a person within this very small group would seek amnesty after
at least 35 years and pay what would by now be an enormous sum
of money in late fees and penalties is also extremely low.
Given DMV's inability to verify when a specially constructed
vehicle was originally registered, the committee may wish to
consider amendments to delete the exemption from smog check
for specially constructed vehicles "built" before 1976.
Assembly Votes:
Floor: 71-0
Trans: 13-0
POSITIONS: (Communicated to the Committee before noon on
Wednesday,
June 9, 2010)
SUPPORT: None received.
OPPOSED: None received.