BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 811|
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VETO
Bill No: SB 811
Author: DeSaulnier (D)
Amended: 5/4/09
Vote: 21
SENATE TRANSPORTATION & HOUSING COMMITTEE : 7-3, 4/14/09
AYES: Lowenthal, DeSaulnier, Harman, Kehoe, Pavley,
Simitian, Wolk
NOES: Huff, Ashburn, Hollingsworth
NO VOTE RECORDED: Oropeza
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
SENATE FLOOR : 24-13, 6/1/09
AYES: Alquist, Calderon, Cedillo, Corbett, Correa,
DeSaulnier, Florez, Hancock, Kehoe, Leno, Liu, Lowenthal,
Maldonado, Negrete McLeod, Oropeza, Padilla, Pavley,
Romero, Simitian, Steinberg, Wiggins, Wolk, Wright, Yee
NOES: Aanestad, Benoit, Cogdill, Cox, Denham, Dutton,
Harman, Hollingsworth, Huff, Runner, Strickland, Walters,
Wyland
NO VOTE RECORDED: Ashburn, Ducheny, Vacancy
ASSEMBLY FLOOR : 51-28, 9/8/09 - See last page for vote
SUBJECT : Specially constructed vehicles
SOURCE : Office of the Attorney General
DIGEST : This bill requires the Department of Motor
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Vehicles to register specially constructed vehicles
previously registered outside this state that apply for
registration in California to be assigned the model year of
the calendar year the vehicle was first registered outside
the state.
ANALYSIS : Existing law prohibits the operation upon
public highways any motor vehicle that has not been
registered with the Department of Motor Vehicle (DMV).
Existing law requires vehicles that have been sold by one
individual or entity to another or that have been
previously registered in another state to be re-registered
with DMV. In registering a vehicle that had been
previously registered in another state, DMV grants "full
faith and credit" to the out-of-state certificate of title
and thus uses the information on that document to register
the vehicle in this state. An application for registration
shall be accompanied by payment of a sales and use tax that
is based upon the vehicle's value and a certificate of
compliance indicating that the vehicle has passed its smog
inspection.
To meet federal air quality standards, existing law
requires that California-registered, gasoline-powered cars
and light-duty trucks undergo biennial smog inspections to
measure motor vehicle-related pollutants. New vehicles six
model-years old and newer, vehicles with a pre-1976 model
year, electric vehicles, large commercial vehicles,
motorcycles, and until January 1, 2010, diesel vehicles are
exempt from the smog check program.
The current smog inspection involves testing for the
gaseous emissions of hydrocarbons, carbon monoxide, and
oxides of nitrogen. Emissions standards have become more
stringent over time and are established by model year. For
example, a 2007 model year vehicle must produce fewer
emissions to pass its smog inspection than a 1990 model
year vehicle. If a vehicle fails any component of a smog
inspection, the vehicle owner must, with some exceptions,
repair the vehicle and pass a subsequent smog inspection
before being able to register or renew the registration of
the vehicle.
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Under existing law, DMV is authorized to register up to 500
specially constructed vehicles. A specially constructed
vehicle, sometimes referred to as a "kit car," is defined
as a vehicle that is "built for private use, not for
resale, and is not constructed by a licensed manufacturer
or remanufacturer."
Upon registration with DMV, a specially constructed vehicle
shall be inspected by smog inspection facilities authorized
to perform "referee" functions for the purposes of
determining the vehicle model year or the engine year used
in the vehicle and thus the appropriate emission control
application for that model year. In determining the model
year of the vehicle or the engine (the vehicle owner may
choose whether the model year determination is based on the
vehicle or on the engine), the referee shall compare the
vehicle or engine to those of the era it most closely
resembles. The referee shall assign the 1960 model year if
the vehicle or the engine does not sufficiently resemble a
previously manufactured vehicle or engine.
If DMV receives an application for registration of a
specially constructed passenger vehicle or pickup truck
after it has already registered 500 such vehicles during
that calendar year, and the vehicle has not been previously
registered, DMV shall assign the vehicle the same model
year as the calendar year in which the application is
submitted for purposes of determining emissions control
equipment and inspection requirements for the vehicle.
This subjects the vehicle to the more stringent emission
standards of a later model year. Vehicle owners that were
not registered as specially constructed may re-apply for
registration as a specially constructed vehicle in future
years. If those efforts are successful, then the vehicle
would be subjected to the inspection process whereby an
authorized referee determines the model year of the vehicle
or its engine, which is likely to result in less stringent
emission standards.
This bill:
1. Requires DMV to register specially constructed vehicles
previously registered outside this state that apply for
registration in California to be assigned the model year
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of the calendar year the vehicle was first registered.
2. Specifies that nothing in the bill precludes a vehicle
owner from applying for a different model-year
determination and application for registration under
existing law. If an application for a different
mode-year determination and registration is made after
DMV has registered 500 specially constructed vehicles,
the application shall be denied and the vehicle shall be
subject to the emission control and inspection
requirements applicable to the same model-year as the
calendar year in which the vehicle was originally
registered outside this state pursuant to this bill.
Specifies that a denial of the application does not
preclude the vehicle owner from applying for a different
model-year determination in a subsequent calendar year.
3. Requires DMV, if it is unable to establish the year in
which the vehicle was originally registered, to assign
the same model-year as the calendar year in which the
application for registration was submitted, and allows
DMV to establish by regulation the procedures for
determining the original year of registration.
Background
Creation of fraudulent out of state title . Using a
computer, a person can create fraudulent title documents.
In California, the Attorney General has a number of cases
were fraudulent title documents were created for specially
constructed vehicles to avoid emission requirements and
taxes and fees. DMV does not inquire as to the
authenticity of registration documents or inquire with the
foreign jurisdiction if the vehicle was previously
registered. The Attorney General's Office reports that it
has cases involving the arrest of individuals whose sole
business was selling these fake registration documents.
This process is a crime.
Non-title States/Title-washing . A number of states
register vehicles that are within their jurisdiction
without title simply using the bill of sale. Fraudulent
registration services abuse this process and, for a set
fee, will "purchase" the vehicle from the owner. The
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purchase documents will include the price, vehicle
description, and VIN. The "purchase" is a sham transaction
as the vehicle never leaves the owner's possession. The
registration service will then submit these documents to
that state's department of motor vehicles and generate
title documents. The vehicle is then resold to the owner
who then uses these documents to register the vehicle in
California. This process is a crime.
California variation on non-title . A California
registration service will submit false documents to DMV
stating that the vehicle has been in storage for more then
seven years and that the title has been lost. (DMV vehicle
records expire and are purged over the passage of time.)
The registration service verifies a vehicle's
identification number and provides statements signed under
penalty of perjury that the vehicle is owned by the
registered owner. DMV creates new title documents and the
vehicle is registered. The Attorney General's Office
identified several vehicles registered as 1965 vehicles
using this process. This process is a crime.
Non-resident registration . A number of states allow
non-residents to register vehicles in their state. If
these non-resident states allow a specially constructed
vehicle to be registered legally as the model year it
replicates, a California resident can register their
specially constructed vehicle in that state and then
transfer the registration to California. California will
honor the out-of-state registration and emission testing is
avoided. This process is legal.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 5/18/09)
Office of the Attorney General (source)
American Lung Association
Coalition for Clean Air
Sacramento Metropolitan Air Quality Management District
South Coast Air Quality Management District
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ARGUMENTS IN SUPPORT : According to the sponsor, the
Office of the Attorney General, several states have
registration laws that allow a specially constructed
vehicle to be assigned a certificate of title bearing the
same model year designation as the vehicle it most closely
resembles. A California resident who built in 2008 a kit
car designed to resemble a 1965 vehicle can first register
his or her vehicle in another state, be assigned the 1965
model year, and then re-register the vehicle in California
as a 1965 vehicle, allowing the vehicle to avoid smog
inspection requirements.
The specially constructed vehicle industry is aware of this
loophole and the Attorney General's Office has seen a rise
in California residents who are purchasing these vehicles
out-of-state and returning them to California to avoid
emission requirements. Based un the Attorney General's
Office's prior investigations, it is estimated that between
3,000 and 5,000 specially constructed vehicles will be
brought into California every year that will not be
required to comply with California's vehicle emission
requirements. Additionally, as long as this loophole
exists, it is believed that the California-based kit car
industry will suffer as people seeking to avoid California
emissions standards will simply stop purchasing vehicles
within the state and instead purchase and take delivery of
specially constructed vehicles out-of-state.
By assigning the model year using the first year of
registration, rather than the year on the title, to a
specially constructed vehicle coming into this state, this
bill will close this loophole and treat all specially
constructed vehicles equally for emission and inspection
purposes, regardless of whether they were first registered
in California or another state.
GOVERNOR'S VETO MESSAGE:
"I am returning Senate Bill 811 without my signature.
The issue of title-washing, fraudulently registering
a vehicle out-of-state in order to avoid specific
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fees or emissions standards, is serious in
California. While I share the concerns of the author
and sponsor regarding this issue, this bill has a
number of legal issues that could result in the
legislation being challenged in court and make the
state the target of lawsuits.
In addition, I believe the vehicle registration
amnesty program authorized in AB 619 (Chapter 420,
Statutes of 2008) which will be effective January 1,
2010 should be evaluated before any effort in this
area is renewed.
For these reasons, I am returning this bill without
my signature."
ASSEMBLY FLOOR :
AYES: Ammiano, Arambula, Beall, Block, Blumenfield,
Brownley, Buchanan, Caballero, Charles Calderon, Carter,
Chesbro, Coto, Davis, De La Torre, De Leon, Eng, Evans,
Feuer, Fong, Fuentes, Furutani, Galgiani, Hall, Hayashi,
Hernandez, Hill, Huber, Huffman, Jones, Krekorian, Lieu,
Bonnie Lowenthal, Ma, Mendoza, Monning, Nava, John A.
Perez, V. Manuel Perez, Portantino, Ruskin, Salas,
Saldana, Skinner, Solorio, Audra Strickland, Swanson,
Torlakson, Torres, Torrico, Yamada, Bass
NOES: Adams, Anderson, Bill Berryhill, Tom Berryhill,
Blakeslee, Conway, Cook, DeVore, Duvall, Emmerson,
Fletcher, Fuller, Gaines, Garrick, Gilmore, Hagman,
Harkey, Jeffries, Knight, Logue, Miller, Nestande,
Niello, Nielsen, Silva, Smyth, Tran, Villines
NO VOTE RECORDED: Vacancy
JJA:do 1/6/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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