AB 1858: Automobile dismantling: task force.
- Session Year: 2015-2016
- House: Assembly
- Latest Version Date: 2016-09-22
Existing law establishes the Department of Motor Vehicles, the State Board of Equalization, and the California Environmental Protection Agency, and prescribes the powers and duties of those state agencies. Under existing law, it is unlawful for any person to act as an automobile dismantler without having an established place of business, meeting specified requirements, and having a current, valid license or temporary permit issued by the Department of Motor Vehicles.
This bill would, until January 1, 2020, require the department to collaborate with the State Board of Equalization, the California Environmental Protection Agency, 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 and unregulated automobile dismantling, including resulting tax evasion, environmental impacts, and public health impacts. The bill would require the department, in consultation with those agencies, on or before January 1, 2019, to submit a report to the Legislature including specified information. The bill would state related findings and declarations of the Legislature.
Existing law establishes the Department of Motor Vehicles, the State Board of Equalization, and the California Environmental Protection Agency, and prescribes the powers and duties of those state agencies. Under existing law, it is unlawful for any person to act as an automobile dismantler without having an established place of business, meeting specified requirements, and having a current, valid license or temporary permit issued by the Department of Motor Vehicles.
This bill would, until January 1, 2020, require the department to collaborate with the State Board of Equalization, the California Environmental Protection Agency, 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 and unregulated automobile dismantling, including resulting tax evasion, environmental impacts, and public health impacts. The bill would require the department, in consultation with those agencies, on or before January 1, 2019, to submit a report to the Legislature including specified information. The bill would state related findings and declarations of the Legislature.
Existing law establishes the Department of Motor Vehicles, the State Board of Equalization, and the California Environmental Protection Agency, and prescribes the powers and duties of those state agencies. Under existing law, it is unlawful for any person to act as an automobile dismantler without having an established place of business, meeting specified requirements, and having a current, valid license or temporary permit issued by the Department of Motor Vehicles.
This bill would, until January 1, 2020, require the department to collaborate with the State Board of Equalization, the California Environmental Protection Agency, 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, unregulated, and underground unlicensed and unregulated automobile dismantling, including resulting tax evasion, environmental impacts, and public health impacts. The bill would require the department, in consultation with those agencies, on or before January 1, 2019, to submit a report to the Legislature including specified information. The bill would state related findings and declarations of the Legislature.
Existing law establishes the Department of Motor Vehicles, the State Board of Equalization, and the California Environmental Protection Agency, and prescribes the powers and duties of those state agencies. Under existing law, it is unlawful for any person to act as an automobile dismantler without having an established place of business, meeting specified requirements, and having a current, valid license or temporary permit issued by the Department of Motor Vehicles.
This bill would, until January 1, 2019, 2020, require the department to establish an Unlicensed Automobile Dismantling Task Force comprised of representatives of the department, the State Board of Equalization, and the California Environmental Protection Agency. The bill would require the task force to collaborate to investigate the occurrences of unlicensed vehicle dismantling in violation of those provisions, including resulting tax evasion and environmental damage. collaborate with the State Board of Equalization, the California Environmental Protection Agency, 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, unregulated, and underground automobile dismantling, including resulting tax evasion, environmental impacts, and public health impacts. The bill would require the task force, department, in consultation with those agencies, on or before March 1, 2018, January 1, 2019, to submit a report to the Legislature including specified information pertaining to the task forces activities. information. The bill would state related findings and declarations of the Legislature.
Existing law establishes the Department of Motor Vehicles, the State Board of Equalization, and the California Environmental Protection Agency, and prescribes the powers and duties of those state agencies. Under existing law, it is unlawful for any person to act as an automobile dismantler without having an established place of business, meeting specified requirements, and having a current, valid license or temporary permit issued by the Department of Motor Vehicles.
This bill would, until January 1, 2019, require the department to establish an Unlicensed Automobile Dismantling Task Force comprised of representatives of the department, the State Board of Equalization, and the California Environmental Protection Agency. The bill would require the task force to collaborate to investigate the occurrences of underground, unlicensed vehicle dismantling in violation of those provisions, including resulting tax evasion and environmental damage. The bill would require the task force, on or before March 1, 2018, to submit a report to the Legislature including specified information pertaining to the task forces activities. The bill would state related findings and declarations of the Legislature.
Existing law establishes the Department of Motor Vehicles, the State Board of Equalization, and the California Environmental Protection Agency, and prescribes the powers and duties of those state agencies. Under existing law, it is unlawful for any person to act as an automobile dismantler without having an established place of business, meeting specified requirements, and having a current, valid license or temporary permit issued by the Department of Motor Vehicles.
This bill would, until January 1, 2019, require the department to establish an Unlicensed Automobile Dismantling Task Force comprised of representatives of the department, the State Board of Equalization, and the California Environmental Protection Agency. The bill would require the task force to collaborate to investigate the occurrences of underground, unlicensed vehicle dismantling in violation of those provisions, including resulting tax evasion and environmental damage. The bill would require the task force, on or before March 1, 2018, to submit a report to the Legislature including specified information pertaining to the task forces activities. The bill would state related findings and declarations of the Legislature.
The Legislature finds and declares the following:
(a)Automobile dismantlers are occupationally licensed by the Department of Motor Vehicles to provide an essential service that directly addresses societys increasing challenge of what to do with end-of-life vehicles.
(b)Automobile dismantlers face an array of costly yet necessary requirements to properly process end-of-life vehicles, including, but not limited to, safely removing and recycling unused gasoline, brake fluid, engine oil, transmission fluid, antifreeze, catalytic converters, tires, mercury switches, lead acid batteries, and freon.
(c)Automobile dismantlers are small- and medium-sized businesses regulated by over a dozen state, local, and federal agencies with jurisdiction over water quality, hazardous materials, air quality, worker safety, payment of taxes, and vehicle titling requirements.
(d)Unlicensed automobile dismantlers operate in the underground economy and do not comply with the licensing requirements, environmental regulatory requirements, insurance obligations, workplace safety requirements, and tax liability that licensed automobile dismantlers comply with.
(e)It is the intent of the Legislature to enact legislation to require state agencies to collaborate in combating unlicensed and unregulated automobile dismantling for the purposes of investigating environmental quality issues and tax evasion that are occurring as a result of this activity and the lack of enforcement.
SEC. 2.Section 11545 is added to the Vehicle Code, to read:11545.(a)The department shall collaborate with the State Board of Equalization, the California Environmental Protection Agency, 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 and unregulated automobile dismantling, including resulting tax evasion, environmental impacts, and public health impacts.
(b)The department, along with the agencies listed in subdivision (a), may 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 section.
(c)(1)On or before January 1, 2019, the department, in collaboration with the State Board of Equalization, the California Environmental Protection Agency, 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, shall submit a report to the Legislature including, but not limited to, the following:
(A)The number of unlicensed dismantlers investigated and the number of investigations that resulted in an administrative enforcement action, a civil enforcement action, or criminal prosecution.
(B)Any identified 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 the barriers to adequate and efficient enforcement of environmental, tax, and licensing statutes and regulations against unlicensed dismantlers.
(E)Proposed strategies for bringing unlicensed dismantlers into compliance through compliance assistance, education and training, or other identified methods.
(F)Recommendations for modifying, eliminating, or continuing the coordinated enforcement and compliance activities pursuant to this section.
(G)Recommendations for statutory or regulatory changes, or both, needed to better allow for enforcement against unlicensed automobile dismantlers.
(2)The report required by this subdivision shall be submitted to the Legislature pursuant to Section 9795 of the Government Code.
(d)This section shall remain in effect only until January 1, 2020, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2020, deletes or extends that date.
The Legislature finds and declares the following:
(a)Automobile dismantlers are occupationally licensed by the Department of Motor Vehicles to provide an essential service that directly addresses societys increasing challenge of what to do with end-of-life vehicles.
(b)Automobile dismantlers face an array of costly yet necessary requirements to properly process end-of-life vehicles, including, but not limited to, safely removing and recycling unused gasoline, brake fluid, engine oil, transmission fluid, antifreeze, catalytic converters, tires, mercury switches, lead acid batteries, and freon.
(c)Automobile dismantlers are small- and medium-sized businesses regulated by over a dozen state, local, and federal agencies with jurisdiction over water quality, hazardous materials, air quality, worker safety, payment of taxes, and vehicle titling requirements.
(d)Unlicensed automobile dismantlers operate in the underground economy and do not comply with the licensing requirements, environmental regulatory requirements, insurance obligations, workplace safety requirements, and tax liability that licensed automobile dismantlers comply with.
(e)It is the intent of the Legislature to enact legislation to require state agencies to collaborate in combating unlicensed and unregulated automobile dismantling for the purposes of investigating environmental quality issues and tax evasion that are occurring as a result of this activity and the lack of enforcement.
SEC. 2.Section 11545 is added to the Vehicle Code, to read:11545.(a)The department shall collaborate with the State Board of Equalization, the California Environmental Protection Agency, 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 and unregulated automobile dismantling, including resulting tax evasion, environmental impacts, and public health impacts.
(b)The department, along with the agencies listed in subdivision (a), may 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 section.
(c)(1)On or before January 1, 2019, the department, in collaboration with the State Board of Equalization, the California Environmental Protection Agency, 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, shall submit a report to the Legislature including, but not limited to, the following:
(A)The number of unlicensed dismantlers investigated and the number of investigations that resulted in an administrative enforcement action, a civil enforcement action, or criminal prosecution.
(B)Any identified 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 the barriers to adequate and efficient enforcement of environmental, tax, and licensing statutes and regulations against unlicensed dismantlers.
(E)Proposed strategies for bringing unlicensed dismantlers into compliance through compliance assistance, education and training, or other identified methods.
(F)Recommendations for modifying, eliminating, or continuing the coordinated enforcement and compliance activities pursuant to this section.
(G)Recommendations for statutory or regulatory changes, or both, needed to better allow for enforcement against unlicensed automobile dismantlers.
(2)The report required by this subdivision shall be submitted to the Legislature pursuant to Section 9795 of the Government Code.
(d)This section shall remain in effect only until January 1, 2020, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2020, deletes or extends that date.
The Legislature finds and declares the following:
(a)Automobile dismantlers are occupationally licensed by the Department of Motor Vehicles to provide an essential service that directly addresses societys increasing challenge of what to do with end-of-life vehicles.
(b)Automobile dismantlers face an array of costly yet necessary requirements to properly process end-of-life vehicles, including, but not limited to, safely removing and recycling unused gasoline, brake fluid, engine oil, transmission fluid, antifreeze, catalytic converters, tires, mercury switches, lead acid batteries, and freon.
(c)Automobile dismantlers are small and medium sized small- and medium-sized businesses regulated by over a dozen state, local, and federal agencies with jurisdiction over water quality, hazardous materials, air quality, worker safety, payment of taxes, and vehicle titling requirements.
(d)Unlicensed automobile dismantlers operate in the underground economy and do not comply with the licensing requirements, environmental regulatory requirements, insurance obligations, workplace safety requirements, and tax liability that licensed automobile dismantlers comply with.
(e)It is the intent of the Legislature to enact legislation to require state agencies to collaborate in combating unlicensed, unregulated, and underground unlicensed and unregulated automobile dismantling for the purposes of investigating environmental quality issues and tax evasion that are occurring as a result of this activity and the lack of enforcement.
SEC. 2.Section 11545 is added to the Vehicle Code, to read:11545.(a)The department shall collaborate with the State Board of Equalization, the California Environmental Protection Agency, 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, unregulated, and underground unlicensed and unregulated automobile dismantling, including resulting tax evasion, environmental impacts, and public health impacts.
(b)The State Board of Equalization, the California Environmental Protection Agency, 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 shall provide enforcement and the necessary resources to the department for the investigation and reporting of the activities outlined in this section.
(c)
(b)The department, along with the agencies listed in subdivision (a), may 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, unregulated, and underground unlicensed and unregulated automobile dismantlers to achieve the purposes of this section.
(d)The department, in consultation with the agencies listed in subdivision (a), shall establish a public outreach effort for soliciting referrals from the public, including, but not limited to, an advertised telephone hotline lead, referral form, and other methods to identify and report unlicensed activity.
(e)
(c)(1)On or before January 1, 2019, the department, in collaboration with the State Board of Equalization, the California Environmental Protection Agency, 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, shall submit a report to the Legislature including, but not limited to, the following:
(A)The number of unlicensed dismantlers investigated and the number of investigations that resulted in an administrative enforcement action, a civil enforcement action, or criminal prosecution.
(B)Any identified 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 the barriers to adequate and efficient enforcement of environmental, tax, and licensing statutes and regulations against unlicensed dismantlers.
(E)Proposed strategies for bringing unlicensed dismantlers into compliance through compliance assistance, education and training, or other identified methods.
(F)Recommendations for modifying, eliminating, or continuing the coordinated enforcement and compliance activities pursuant to this section.
(G)Recommendations for statutory or regulatory changes, or both, needed to better allow for enforcement against unlicensed automobile dismantlers.
(2)The report required by this subdivision shall be submitted to the Legislature pursuant to Section 9795 of the Government Code.
(f)
(d)This section shall remain in effect only until January 1, 2020, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2020, deletes or extends that date.
The Legislature finds and declares the following:
(a)Automobile dismantlers are occupationally licensed by the Department of Motor Vehicles to provide an essential service that directly addresses societys increasing challenge of what to do with end-of-life vehicles.
(b)Automobile dismantlers face an array of costly yet necessary requirements to properly process end-of-life vehicles, including, but not limited to, safely removing and recycling unused gasoline, brake fluid, engine oil, transmission fluid, antifreeze, catalytic converters, tires, mercury switches, lead acid batteries, and freon.
(c)Automobile dismantlers are small and medium sized businesses regulated by over a dozen state, local, and federal agencies with jurisdiction over water quality, hazardous materials, air quality, worker safety, payment of taxes, and vehicle titling requirements.
(d)Unlicensed automobile dismantlers operate in the underground economy and do not face the same comply with the licensing requirements, environmental regulatory requirements, insurance obligations, workplace safety requirements, and tax liability as required by law for that licensed automobile dismantlers. dismantlers comply with.
(e)The impact of unlicensed and unregulated automobile dismantling and limited enforcement activity has led to alack of compliance with dismantler laws, environmental requirements, and payment of taxes.
(f)
(e)It is the intent of the Legislature to enact legislation to establish a multiagency task force require state agencies to collaborate in combating unlicensed and unregulated unlicensed, unregulated, and underground automobile dismantling for the purposes of investigating environmental quality issues and tax evasion that are occurring as a result of this activity and the lack of enforcement.
SEC. 2.Section 11545 is added to the Vehicle Code, to read:11545.(a)The department shall establish an Unlicensed Automobile Dismantling Task Force comprised of representatives of the department, the State Board of Equalization, and the California Environmental Protection Agency. collaborate with the State Board of Equalization, the California Environmental Protection Agency, 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, unregulated, and underground automobile dismantling, including resulting tax evasion, environmental impacts, and public health impacts.
(b)The task force shall collaborate to investigate the occurrences of unlicensed automobile dismantling in violation of this chapter, including resulting tax evasion and environmental damage.
(b)The State Board of Equalization, the California Environmental Protection Agency, 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 shall provide enforcement and the necessary resources to the department for the investigation and reporting of the activities outlined in this section.
(c)The department, along with the agencies listed in subdivision (a), may 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, unregulated, and underground automobile dismantlers to achieve the purposes of this section.
(d)The department, in consultation with the agencies listed in subdivision (a), shall establish a public outreach effort for soliciting referrals from the public, including, but not limited to, an advertised telephone hotline lead, referral form, and other methods to identify and report unlicensed activity.
(c)
(e)(1)On or before March 1, 2018, the task force January 1, 2019, the department, in collaboration with the State Board of Equalization, the California Protection Agency, 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, shall submit a report to the Legislature including the following information: including, but not limited to, the following:
(A)The number of leads or complaints received by the task force.
(B)
(A)The number of complaints unlicensed dismantlers investigated and complaints the number of investigations that resulted in an administrative enforcement action, a civil action enforcement action, or criminal prosecution.
(B)Any identified 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 the barriers to adequate and efficient enforcement of environmental, tax, and licensing statutes and regulations against unlicensed dismantlers.
(E)Proposed strategies for bringing unlicensed dismantlers into compliance through compliance assistance, education and training, or other identified methods.
(C)
(F)Recommendations for modifying, eliminating, or continuing the task forces activities. coordinated enforcement and compliance activities pursuant to this section.
(D)
(G)Recommendations for statutory or regulatory changes, or both, needed to better allow for enforcement against unlicensed automobile dismantlers.
(2)The report required by this subdivision shall be submitted to the Legislature pursuant to Section 9795 of the Government Code.
(d)
(f)This section shall remain in effect only until January 1, 2019, 2020, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2019, 2020, deletes or extends that date.
The Legislature finds and declares the following:
(a)Automobile dismantlers are occupationally licensed by the Department of Motor Vehicles to provide an essential service that directly addresses societys ever increasing problem increasing challenge of what to do with end-of-life vehicles.
(b)An estimated 1.2 million vehicles will reach the end of their useful lives this year in California, either by determination of their owners or by being declared a total loss by an insurance company. While those vehicles might otherwise end up on the roadside or abandoned in empty lots, licensed dismantlers acquire them and safely convert them into reusable and recycled commodities.
(c)
(b)Automobile dismantlers face an array of costly yet necessary requirements to properly process end-of-life vehicles, including, but not limited to, safely removing and recycling unused gasoline, brake fluid, engine oil, transmission fluid, antifreeze, tires, mercury switches, batteries, and freon.
(d)
(c)Automobile dismantlers are small and medium sized businesses regulated by over a dozen state, local, and federal agencies with jurisdiction over water quality, hazardous materials, air quality, worker safety, payment of taxes, and vehicle titling requirements.
(e)The underground economy in California is a significant dilemma facing the automobile dismantling industry with at least 30% of the end-of-life vehicles disappearing into the underground economy each year and not being accounted for.
(f)Underground automobile dismantling operators are cash-only businesses that do not face the same licensing requirements, environmental regulatory requirements, insurance obligations, work place safety requirements, and tax liability as required by law for licensed dismantlers, resulting in these bad actors enjoying a significant and growing competitive advantage over the licensed dismantlers when purchasing vehicles at salvage pools, insurance auctions, and from the public.
(d)Unlicensed automobile dismantlers do not face the same licensing requirements, environmental regulatory requirements, insurance obligations, workplace safety requirements, and tax liability as required by law for licensed automobile dismantlers.
(g)The impacts
(e)The impact of unlicensed and unregulated automobile dismantling and limited enforcement activity has led to a growinglack of compliance with dismantler laws, illegal dumping and disposal of vehicles, improper hazardous waste handling, unsafe workplaces, non-payments of taxes, and potential adverse impacts to public health. environmental requirements, and payment of taxes.
(h)The bulk of this unlicensed and unregulated automobile dismantling is occurring in Californias most vulnerable, disadvantaged, and underserved communities.
(i)
(f)It is the intent of the Legislature to enact legislation to establish a multiagency task force or partnership to collaborate in combating underground, unlicensed, unlicensed and unregulated automobile dismantling for the purposes of investigating environmental quality issues, public health concerns, and criminal issues and tax evasion that is are occurring as a result of this activity and the lack of enforcement.
SEC. 2.Section 11545 is added to the Vehicle Code, to read:11545.(a)The department shall establish an Unlicensed Automobile Dismantling Task Force comprised of representatives of the department, the State Board of Equalization, and the California Environmental Protection Agency.
(b)The task force shall collaborate to investigate the occurrences of underground, unlicensed automobile dismantling in violation of this chapter, including resulting tax evasion and environmental damage.
(c)(1)On or before March 1, 2018, the task force shall submit a report to the Legislature including the following information:
(A)The number of leads or complaints received by the task force.
(B)The number of complaints investigated and complaints that resulted in a civil action or criminal prosecution.
(C)Recommendations for modifying, eliminating, or continuing the task forces activities.
(D)Recommendations for statutory or regulatory changes, or both, needed to better allow for enforcement against unlicensed automobile dismantlers.
(2)The report required by this subdivision shall be submitted to the Legislature pursuant to Section 9795 of the Government Code.
(d)This section shall remain in effect only until January 1, 2019, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2019, deletes or extends that date.
The Legislature finds and declares the following:
(a)Automobile dismantlers are occupationally licensed by the Department of Motor Vehicles to provide an essential service that directly addresses societys ever increasing problem of what to do with end-of-life vehicles.
(b)An estimated 1.2 million vehicles will reach the end of their useful lives this year in California, either by determination of their owners or by being declared a total loss by an insurance company. While those vehicles might otherwise end up on the roadside or abandoned in empty lots, licensed dismantlers acquire them and safely convert them into reusable and recycled commodities.
(c)Automobile dismantlers face an array of costly yet necessary requirements to properly process end-of-life vehicles, including, but not limited to, safely removing and recycling unused gasoline, brake fluid, engine oil, transmission fluid, antifreeze, tires, mercury switches, batteries, and freon.
(d)Automobile dismantlers are small and medium sized businesses regulated by over a dozen state, local, and federal agencies with jurisdiction over water quality, hazardous materials, air quality, worker safety, payment of taxes, and vehicle titling requirements.
(e)The underground economy in California is a significant dilemma facing the automobile dismantling industry with at least 30% of the end-of-life vehicles disappearing into the underground economy each year and not being accounted for.
(f)Underground automobile dismantling operators are cash-only businesses that do not face the same licensing requirements, environmental regulatory requirements, insurance obligations, work place safety requirements, and tax liability as required by law for licensed dismantlers, resulting in these bad actors enjoying a significant and growing competitive advantage over the licensed dismantlers when purchasing vehicles at salvage pools, insurance auctions, and from the public.
(g)The impacts of unlicensed and unregulated automobile dismantling and limited enforcement activity has led to a growing lack of compliance with dismantler laws, illegal dumping and disposal of vehicles, improper hazardous waste handling, unsafe workplaces, non-payments of taxes, and potential adverse impacts to public health.
(h)The bulk of this unlicensed and unregulated automobile dismantling is occurring in Californias most vulnerable, disadvantaged, and underserved communities.
(i)It is the intent of the Legislature to enact legislation to establish a multiagency task force or partnership to collaborate in combating underground, unlicensed, and unregulated automobile dismantling for the purposes of investigating environmental quality issues, public health concerns, and criminal tax evasion that is occurring as a result of this activity and the lack of enforcement.
SEC. 2.Section 11545 is added to the Vehicle Code, to read:11545.(a)The department shall establish an Unlicensed Automobile Dismantling Task Force comprised of representatives of the department, the State Board of Equalization, and the California Environmental Protection Agency.
(b)The task force shall collaborate to investigate the occurrences of underground, unlicensed automobile dismantling in violation of this chapter, including resulting tax evasion and environmental damage.
(c)(1)On or before March 1, 2018, the task force shall submit a report to the Legislature including the following information:
(A)The number of leads or complaints received by the task force.
(B)The number of complaints investigated and complaints that resulted in a civil action or criminal prosecution.
(C)Recommendations for modifying, eliminating, or continuing the task forces activities.
(D)Recommendations for statutory or regulatory changes, or both, needed to better allow for enforcement against unlicensed automobile dismantlers.
(2)The report required by this subdivision shall be submitted to the Legislature pursuant to Section 9795 of the Government Code.
(d)This section shall remain in effect only until January 1, 2019, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2019, deletes or extends that date.
|
Date
|
Status
|
|---|---|
| Jun 9, 2016 | Referred to Com. on T. & H. |
| Aug 30, 2016 | Enrolled and presented to the Governor at 4 p.m. |
| Aug 23, 2016 | Senate amendments concurred in. To Engrossing and Enrolling. (Ayes 80. Noes 0. Page 6127.). |
| Aug 23, 2016 | Senate amendments concurred in. To Engrossing and Enrolling. |
| Aug 17, 2016 | Read third time. Passed. Ordered to the Assembly. (Ayes 39. Noes 0.). |
| Aug 17, 2016 | Read third time. Passed. Ordered to the Assembly. (Ayes 39. Noes 0. Page 5044.). |
| Aug 17, 2016 | Read third time. Passed. Ordered to the Assembly. |
| Aug 17, 2016 | In Assembly. Concurrence in Senate amendments pending. May be considered on or after August 19 pursuant to Assembly Rule 77. |
| Aug 15, 2016 | Read second time and amended. Ordered to third reading. |
| Aug 11, 2016 | From committee: Amend, and do pass as amended. (Ayes 7. Noes 0.) (August 11). |
| Aug 1, 2016 | In committee: Referred to APPR. suspense file. |
| Aug 1, 2016 | From committee chair, with author's amendments: Amend, and re-refer to committee. Read second time, amended, and re-referred to Com. on APPR. |
| Jun 29, 2016 | From committee: Do pass and re-refer to Com. on APPR. with recommendation: To Consent Calendar. (Ayes 10. Noes 0.) (June 28). Re-referred to Com. on APPR. |
| Feb 10, 2016 | Read first time. To print. |
| Jun 2, 2016 | In Senate. Read first time. To Com. on RLS. for assignment. |
| Jun 1, 2016 | Read third time. Passed. Ordered to the Senate. (Ayes 78. Noes 0.) |
| Jun 1, 2016 | Read third time. Passed. Ordered to the Senate. (Ayes 78. Noes 0. Page 5091.) |
| Jun 1, 2016 | Read third time. Passed. Ordered to the Senate. |
| May 31, 2016 | Read second time. Ordered to third reading. |
| May 27, 2016 | Read second time and amended. Ordered returned to second reading. |
| May 27, 2016 | From committee: Amend, and do pass as amended. (Ayes 20. Noes 0.) (May 27). |
| Apr 20, 2016 | In committee: Set, first hearing. Referred to APPR. suspense file. |
| Apr 5, 2016 | From committee: Do pass and re-refer to Com. on APPR. with recommendation: To Consent Calendar. (Ayes 16. Noes 0.) (April 4). Re-referred to Com. on APPR. |
| Feb 25, 2016 | Referred to Com. on TRANS. |
| Feb 11, 2016 | From printer. May be heard in committee March 12. |
|
Date
|
Description
|
Location
|
Votes
|
|
|---|---|---|---|---|
| Aug 23, 2016 | AB 1858 SANTIAGO Concurrence in Senate Amendments | Assembly Floor |
Passed |
|
| Aug 17, 2016 | Assembly 3rd Reading AB1858 Santiago By Bates | Senate Floor |
Passed |
|
| Aug 11, 2016 | Do pass as amended | Senate Standing Committee on Appropriations |
Passed |
|
| Aug 1, 2016 | Placed on suspense file | Senate Standing Committee on Appropriations |
Passed |
|
| Jun 28, 2016 | Do pass, but first be re-referred to the Committee on [Appropriations] with the recommendation: To Consent Calendar | Senate Standing Committee on Transportation and Housing |
Passed |
|
| Jun 1, 2016 | AB 1858 SANTIAGO Assembly Third Reading | Assembly Floor |
Passed |
|
| May 27, 2016 | Do pass as amended. | Assembly Standing Committee on Appropriations |
Passed |
|
| Apr 4, 2016 | Do pass and be re-referred to the Committee on [Appropriations] with recommendation: To Consent Calendar | Assembly Standing Committee on Transportation |
Passed |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
|
Organization
|
Position
|
Date
|
|---|---|---|
| Association of Deputy District Attorneys | ** Support | Aug 17, 2016 |
| Association of Los Angeles Deputy Sheriffs | ** Support | Aug 17, 2016 |
| Auto Dismantlers of Southern California | ** Support | Aug 17, 2016 |
| Automotive Recyclers Association | ** Support | Aug 17, 2016 |
| Cal State Student Association | * Support | Jun 27, 2018 |
| California Association Of Code Enforcement Officers | ** Support | Aug 17, 2016 |
| California Association of Environmental Health Administrators | ** Support | Aug 17, 2016 |
| California Auto Dismantlers Recyclers Alliance | ** Support | Jun 1, 2016 |
| California Coastkeeper Alliance | ** Support | Aug 17, 2016 |
| Californians Against Waste | ** Support | Aug 17, 2016 |
| Coalition For Clean Air | ** Support | Aug 17, 2016 |
| Honorable Jerome E. Horton, Member, Board of Equalization | ** Support | Jun 1, 2016 |
| IKQ Corporation | ** Support | Aug 17, 2016 |
| Institute of Scrap Recycling Industries, West Coast Chapter | ** Support | Aug 17, 2016 |
| Lkq Corporation | ** Support | Jun 1, 2016 |
| Los Angeles Police Protective League | ** Support | Aug 17, 2016 |
| Pick-N-Pull | ** Support | Aug 17, 2016 |
| San Diego County Auto Recyclers Association | ** Support | Aug 17, 2016 |
| Schnitzer Steel Industries | ** Support | Aug 17, 2016 |
| State Board of Equalization | ** Support | Aug 17, 2016 |
| State Of California Auto Dismantlers Association | ** Support | Aug 17, 2016 |
| Valley Auto Dismantlers Association | ** Support | Aug 17, 2016 |
| Western Association for College Admissions Counseling | * Support | Jun 27, 2018 |
CONCURRENCE IN SENATE AMENDMENTS
CSA1 Bill Id:AB 1858
Author:(Santiago)
As Amended Ver:August 15, 2016
Majority vote
ASSEMBLY: | 78-0 | (June 1, 2016) | SENATE: | 39-0 | (August 17, 2016) |
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:
- 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.
- 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.
- 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.
- Extend the date DMV is required to report to the Legislature to January 1, 2019.
- Make other minor and technical changes.
EXISTING LAW:
- 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.
- Requires an applicant for an auto dismantler's license to provide DMV with information as to his or her character, honesty, integrity, and reputation, as DMV may consider necessary.
- 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:
- 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.
- 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, 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.
Analysis Prepared by: Justin Behrens / TRANS. / (916) 319-2093 FN: 0004449
Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | AB |
THIRD READING
Bill No: AB 1858
:
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
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.
Existing law:
- Defines an automobile dismantler as a person who dismantles three or more personal vehicles within any 12-month period.
- 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.
- 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.”
- 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.
- 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.
- 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:
- 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.
- 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.
- Requires DMV, in collaboration with the other agencies cited above, to submit a report to the Legislature by January 1, 2019, including but not limited to:
- The number of unlicensed dismantlers investigated and the number of investigations that resulted in an administrative enforcement action, civil enforcement action, or criminal prosecution.
- Any statutory or regulatory gaps for investigating and prosecuting unlicensed automobile dismantlers.
- 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.
- A summary of barriers to adequate and efficient enforcement of environmental, tax, and licensing statutes and regulations against unlicensed dismantlers.
- Proposed strategies to bring unlicensed dismantlers into compliance through compliance assistance, education, and training, or other methods.
- Recommendations to modify, eliminate, or continue coordinated enforcement and compliance activities.
- Recommendations for statutory or regulatory changes, or both, needed for better enforcement against unlicensed dismantlers
- Sunsets the provisions of this bill on January 1, 2020.
Comments
- 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 bill is a first step toward addressing this issue by requiring specified state agencies to work together to find a solution.
- 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.
- 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: Fiscal Com.: Local:
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 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.
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: (Verified 8/11/16)
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
8/15/16 20:10:10
**** END ****
SENATE COMMITTEE ON
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
AB 1858 (Santiago) - Automobile dismantling: task force
Version: | Policy Vote: |
Urgency: | Mandate: |
Hearing Date: | Consultant: |
*********** ANALYSIS ADDENDUM – SUSPENSE FILE ***********
The following information is revised to reflect amendments
adopted by the committee on August 11, 2016
Bill Summary:
AB 1858 would require the Department of Motor Vehicles (DMV) to collaborate with specified state entities until January 1, 2020 to review and coordinate enforcement and compliance activity related to unlicensed and unregulated automobile dismantling activities. The bill would require a report to the Legislature on those activities and any recommendations by January 1, 2019.
Fiscal Impact:
- DMV costs of $475,000 in 2017-18, $390,000 in 2018-19, and $195,000 in 2019-20, and 3 PY of investigator staff to 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 Board of Equalization (BOE), the California Environmental Protection Agency (CalEPA), the Department of Toxic Substances Control (DTSC), the State Water Resources Control Board (SWRCB), the Department of Resources Recycling and Recovery (CalRecycle), and the California Air Resources Board (CARB) 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 CARB estimates the need for an additional PY of staff at a cost of $154,000.
Author Amendments:
- Strike out the word “underground” from several provisions that currently specify actions related to “unlicensed, unregulated, and underground automobile dismantling.”
- Strike out a provision that require the collaborating state entities to provide enforcement and necessary resources to DMV for the investigation and reporting of unregulated activities.
- Strike out a provision that requires the establishment of a public outreach effort for soliciting referrals from the public.
- Make a technical change.
-- END --
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
AB 1858 (Santiago) - Automobile dismantling: task force
Version: August 1, 2016 | Policy Vote: T. & H. 10 - 0 |
Urgency: No | Mandate: No |
Hearing Date: August 1, 2016 | Consultant: Mark McKenzie |
This bill meets the criteria for referral to the Suspense File.
Bill Summary:
AB 1858 would require the Department of Motor Vehicles (DMV) to collaborate with specified state entities until January 1, 2020 to review and coordinate enforcement and compliance activity related to unlicensed, unregulated, and underground automobile dismantling activities. The bill would require a report to the Legislature on those activities and any recommendations by January 1, 2019.
Fiscal Impact:
- DMV costs of $390,000 in 2017-18 and 2018-19, and $195,000 in 2019-20, and 3 PY of investigator staff to prepare and execute cases and collaborate with other specified departments. (Motor Vehicle Account).
- Additional one-time DMV costs of approximately $85,000 for investigator staff training and equipment and to establish an advertised telephone hotline for soliciting referrals from the public on unlicensed activity. There could be additional ongoing costs related to the hotline, depending on call volumes. (Motor Vehicle Account)
- Potential staffing costs for the Board of Equalization (BOE), the California Environmental Protection Agency (CalEPA), the Department of Toxic Substances Control (DTSC), the State Water Resources Control Board (SWRCB), the Department of Resources Recycling and Recovery (CalRecycle), and the California Air Resources Board (CARB) 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 CARB estimates the need for an additional PY of staff at a cost of $154,000.
Background:
An automobile dismantler must hold a valid license from DMV in order to legally conduct business. An applicant must provide DMV with information relating to his or her “character, honesty, integrity, and reputation, as the department may consider necessary,” in addition to certain identification numbers related to the BOE, CalEPA, and Franchise Tax Board, as well as indication of whether stormwater and other specified permits are required and have been acquired.
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 must be consistent with the requirements imposed by the environmental permits a dismantler is required to obtain prior to licensure with the DMV.
The auto dismantling industry has experienced a decline in licensed activity over the past decade, part of which could be attributable to an increase in unlicensed dismantling activities. Unlicensed activities can have negative environmental and public health impacts, and may include illegal dumping and disposal of hazardous materials, regulatory fee and tax avoidance, violations of vehicle export laws, and trafficking in stolen property.
Proposed Law:
AB 1858 would require DMV to collaborate with BOE, CalEPA, DTSC, SWRCB, CalRecycle, and CARB until January 1, 2020 to review and coordinate enforcement and compliance activity related to unlicensed, unregulated, and underground automobile dismantling activities. Specifically, this bill would:
- Require the collaborating state entities to provide enforcement and necessary resources to DMV for the investigation and reporting of unregulated activities.
- Authorize DMV, with the partner entities, to collaborate and solicit information from other federal, state, and local enforcement agencies with jurisdiction over illegal automobile dismantlers.
- Require DMV, in consultation with the partner entities, to establish a public outreach effort for soliciting referrals from the public, including an advertised telephone hotline lead, referral form, and other methods to identify and report unlicensed activity.
- Require DMV, on or before January 1, 2019 and in collaboration with the partner entities, to submit a report to the Legislature that includes the following:
- The number of unlicensed dismantlers investigated and the number of investigations resulting in an administrative or civil 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 the places and types of facilities where unlicensed activities occur.
- A summary of the barriers to adequate and efficient enforcement of environmental, tax, and licensing statutes and regulations against unlicensed dismantlers.
- Proposed strategies for bringing unlicensed dismantlers into compliance through assistance, education, training, or other identified methods.
- Recommendations for modifying, eliminating, or continuing the coordinated enforcement and compliance activities specified in this bill.
- Recommendations for any statutory or regulatory changes needed to enhance enforcement against unlicensed dismantlers.
- Sunset the provisions of the bill on January 1, 2020.
Staff Comments:
The author and sponsors estimate that as many as 30 percent of the end-of-life vehicles are being processed through unlicensed and unregulated automobile dismantlers. 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. This bill is intended to enhance compliance through multi-agency collaboration of efforts to investigate, enforce, and report on unlicensed activities.
-- END --
SENATE COMMITTEE ON TRANSPORTATION AND HOUSING
Senator Jim Beall, Chair
2015 - 2016 Regular
Bill No: AB 1858 Hearing Date: 6/28/2016
Author: | Santiago | ||
Version: | 5/27/2016 | ||
Urgency: | No | Fiscal: | Yes |
Consultant: | Erin Riches | ||
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:
- Defines an automobile dismantler as a person who dismantles three or more personal vehicles within any 12-month period.
- 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.
- 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.”
- 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.
- 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.
- 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:
- Requires DMV to establish an Unlicensed Automobile Dismantling Task Force (Task Force) comprised of representatives of the DMV, the BOE, and Cal EPA.
- Requires the Task Force to collaborate to investigate occurrences of unlicensed automobile dismantling, including resulting tax evasion and environmental damage.
- Requires the Task Force to submit a report to the Legislature by March 1, 2018, including:
- The number of leads or complaints investigated by the Task Force
- The number of complaints investigated and the number resulting in a civil action or criminal prosecution
- Recommendations for modifying, eliminating, or continuing Task Force activities
- Recommendations for statutory or regulatory changes, or both, needed to better allow for enforcement against unlicensed dismantlers
- Sunsets the provisions of this bill on January 1, 2019.
COMMENTS:
- 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 bill is a first step toward addressing this issue by requiring three agencies to work together to find a solution.
- 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.
- 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 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: Fiscal Com.: Local:
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
-- END --
ASSEMBLY THIRD READING
ATR Bill Id:AB 1858
Author:(Santiago)
As Amended Ver:May 27, 2016
Majority vote
Committee | Votes | Ayes | Noes |
Transportation | 16-0 | Frazier, Linder, Baker, Bloom, Brown, Chu, Daly, Dodd, Eduardo Garcia, Gomez, Kim, Mathis, Medina, Melendez, Nazarian, O'Donnell | |
Appropriations | 20-0 | Gonzalez, Bigelow, Bloom, Bonilla, Bonta, Calderon, Chang, Daly, Eggman, Gallagher, Eduardo Garcia, Roger Hernández, Holden, Jones, Obernolte, Quirk, Santiago, Wagner, Weber, Wood |
|
SUMMARY: Requires the Department of Motor Vehicles (DMV) to establish an Unlicensed Automobile Dismantling Task Force comprised of representatives of DMV, the State Board of Equalization (BOE), and the California Environmental Protection Agency (CalEPA), and directs the task force to investigate and report to the Legislature by March 1, 2018, on the occurrences of unlicensed automobile dismantling in violation of existing law, including resulting tax evasion and environmental damage.
EXISTING LAW:
- 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.
- Requires an applicant for an auto dismantler's license to provide DMV with information as to his or her character, honesty, integrity, and reputation, as DMV may consider necessary.
- Requires an applicant for a new license or the renewal of a license to submit certain BOE, CalEPA, and Franchise Tax Board (FTB) 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:
- Requires the Department of the California Highway Patrol (CHP) to inspect vehicles previously declared a total loss during the dismantling process when such vehicles are later presented to DMV for registration after reconstruction.
- Establishes a number of task forces for a variety of purposes.
FISCAL EFFECT: According to the Assembly Appropriations Committee:
- 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.
- 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. Automobile dismantlers are also required to submit paperwork to DMV related to dismantled vehicles and, as with other businesses, pay taxes to the state. Other agencies regulating dismantlers include CHP, which, as part of CHP's statutory charge to prevent and deter economic automobile theft, is specifically required to inspect vehicles that have been written off as a total loss for insurance purposes and dismantled when those vehicles are later reconstructed and presented to DMV for registration as revived salvage vehicles.
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, 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 author states that the consequences of the operation of unlicensed dismantlers includes "lack of compliance with DMV dealer and dismantler laws, illegal dumping and disposal of vehicles, improper hazardous waste handling, cash-only transactions and employee payments, non-payment of sales and income taxes, car thefts, violations of worker safety protections, lack of [Americans with Disabilities Act]ADA compliance an[d] violations of advertising laws." The State of California Auto Dismantlers Association (SCADA), 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 establish an Unlicensed Automobile Dismantling Task Force for the purposes of 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.
Please see the policy committee analysis for full discussion of this bill.
Analysis Prepared by: Justin Behrens / TRANS. / (916) 319-2093 FN: 0003185
Date of Hearing: April 20, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
ABPCA Bill Id:AB 1858
Author:(Santiago) – As Introduced Ver:February 10, 2016
Policy Committee: | Transportation | Vote: | 16 - 0 |
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Urgency: No State Mandated Local Program: No Reimbursable: No
SUMMARY:
This bill, until January 1, 2019, requires the DMV to establish an Unlicensed Automobile Dismantling Task Force comprised of representatives of the DMV, the State Board of Equalization (BOE), and the California Environmental Protection Agency (CalEPA). Specifically, this bill:
- Directs the task force to investigate the occurrences of underground, unlicensed automobile dismantling in violation of existing law, including resulting tax evasion and environmental damage.
- Requires the task force to report specified information to the Legislature by March 1, 2018, including:
- The number of leads or complaints received by the task force;
- The numbers of complaints investigated and that resulted in a civil action or criminal prosecution;
- Recommendations for statutory or regulatory changes needed to better allow for enforcement against unlicensed automobile dismantlers.
FISCAL EFFECT:
- The DMV anticipates the need for investigative/supervisory staff (three positions) to prepare and execute cases, receive training, oversee the task force, and report to the Legislature. Estimated special fund costs are $200,000 in 2016-17, $300,000 in 2017-18, and $150,000 in 2018-19. Assuming the BOE and CalEPA each requires one position to participate on the task force, each entity will incur total costs of around $200,000 over the two years.
- To the extent the task force reduces unlicensed dismantler activity, there will be increased state and local tax revenues.
COMMENTS:
- Background. 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 (360,000 vehicles per year) are being acquired and processed by unlicensed and unregulated dismantlers. 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 states that the consequences of the operation of unlicensed dismantlers includes “lack of compliance with DMV dealer and dismantler laws, illegal dumping and disposal of vehicles, improper hazardous waste handling, cash-only transactions and employee payments, non-payment of sales and income taxes, car thefts, violations of worker safety protections, lack of ADA compliance an violations of advertising laws.” The State of California Auto Dismantlers Association (SCADA), the co-sponsor of this bill, estimates the amount of sales tax that is uncollected by the state at $100 million annually.
- Purpose. This bill would direct DMV to establish an Unlicensed Automobile Dismantling Task Force for the purposes of investigating the occurrences of underground, unlicensed automobile dismantling in violation of existing law, including resulting tax evasion and environmental damage.
Analysis Prepared by: Chuck Nicol / APPR. / (916) 319-2081
Date of Hearing: April 4, 2016
ASSEMBLY COMMITTEE ON TRANSPORTATION
Jim Frazier, Chair
ABPCA Bill Id:AB 1858 (
Author:Santiago) – As Introduced Ver:February 10, 2016
SUBJECT: Automobile dismantling: task force
SUMMARY: Requires the Department of Motor Vehicles (DMV) to establish an Unlicensed Automobile Dismantling Task Force comprised of representatives of DMV, the State Board of Equalization (BOE), and the California Environmental Protection Agency (CalEPA). Specifically, this bill:
- Requires DMV to establish an Unlicensed Automobile Dismantling Task Force comprised of representatives of DMV, BOE, and CalEPA.
- Directs the task force to investigate the occurrences of underground, unlicensed automobile dismantling in violation of existing law, including resulting tax evasion and environmental damage.
- Requires the task force to report to the Legislature by March 1, 2018 on specified information, including:
- The number of leads or complaints received by the task force;
- The number of complaints investigated and complaints that resulted in a civil action or criminal prosecution;
- Recommendations for modifying, eliminating, or continuing the task force’s activities; and,
- Recommendations for statutory or regulatory changes, or both, needed to better allow for enforcement against unlicensed automobile dismantlers.
- Establishes a sunset date of January 1, 2019.
EXISTING LAW:
- 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.
- Requires an applicant for an auto dismantler's license to provide DMV with information as to his or her character, honesty, integrity, and reputation, as DMV may consider necessary.
- Requires an applicant for a new license or the renewal of a license to submit all of the following information as part of the application, if the applicant is required by other provisions of law to have the following permits, numbers, or plans:
- BOE resale permit number;
- Identification number issued by the CalEPA;
- A statement indicating that the applicant has either filed an application for a stormwater permit or is not required to obtain a stormwater permit;
- A statement indicating that the applicant has either filed a hazardous materials business plan or is not required to file that plan; and,
- The tax identification number assigned by the Franchise Tax Board (FTB).
- Requires the Department of the California Highway Patrol (CHP) to inspect vehicles previously declared a total loss during the dismantling process when such vehicles are later presented to DMV for registration after reconstruction.
- Establishes a number of task forces for a variety of purposes.
FISCAL EFFECT: Unknown
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. Automobile dismantlers are also required to submit paperwork to DMV related to dismantled vehicles and, as with other businesses, pay taxes to the state. Other agencies regulating dismantlers include CHP, which, as part of CHP’s statutory charge to prevent and deter economic automobile theft, is specifically required to inspect vehicles that have been written off as a total loss for insurance purposes and dismantled when those vehicles are later reconstructed and presented to DMV for registration as revived salvage vehicles.
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, 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 5 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 author states that the consequences of the operation of unlicensed dismantlers includes “lack of compliance with DMV dealer and dismantler laws, illegal dumping and disposal of vehicles, improper hazardous waste handling, cash-only transactions and employee payments, non-payment of sales and income taxes, car thefts, violations of worker safety protections, lack of ADA compliance an violations of advertising laws.” The State of California Auto Dismantlers Association (SCADA), 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 establish an Unlicensed Automobile Dismantling Task Force for the purposes of 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.
Previous legislation: AB 576 (V. Manuel Pérez), Chapter 614, Statutes of 2013, established a pilot program to create the “Revenue Recovery and Collaborative Enforcement Team” consisting of specified agencies to collaborate in combating criminal tax evasion associated with the underground economy. The Tax Recovery and Criminal Enforcement Task Force is required to submit a report to the Legislature by December 1, 2017, on the number of complaints received by the task force and cases investigated or prosecuted as a result of task force collaboration.
AB 805 (Fuentes), Chapter 475, Statues of 2009, required DMV to investigate and verify all the information submitted on an application for an automobile dismantler’s original or renewal license.
REGISTERED SUPPORT / OPPOSITION:
Support
Honorable Jerome E. Horton, Member, Board of Equalization (Co-Sponsor)
State of California Auto Dismantler’s Association (Co-Sponsor)
Association of Deputy District Attorneys
Association of Los Angeles Deputy Sheriffs
Automotive Recyclers Association
California Association of Code Enforcement Officers
California Association of Environmental Health Administrators
California Auto Dismantlers Recyclers Alliance
California Coastkeeper Alliance
Coalition for Clean Air
LKQ Corporation
Los Angeles Police Protective League
Riverside Sheriffs Association
Opposition
None on file
Analysis Prepared by: Justin Behrens / TRANS. / (916) 319-2093
Discussed in Hearing
3MIN
Senate Standing Committee on Education
2MIN
Assembly Floor
3MIN
Senate Floor
43SEC
Assembly Floor
Bill Author
