California legislation becomes law to thwart unlicensed dismantlers

Sacramento, Calif.—Assembly Bill 1858, environmental justice legislation authored by Assembly Majority Whip Miguel Santiago (D-Los Angeles), was signed into law by Governor Jerry Brown in September. Co-sponsored by the State of California Auto Dismantlers Association (SCADA) and the California State Board of Equalization (BOE), AB 1858 creates a multiagency team to investigate tax evasion, environmental damage, and public harm that occurs as a result of unlicensed automobile dismantling.

California faces an illegal underground economy in the auto recycling industry which has led to numerous public health and environmental violations. Illegal dumping and disposing of vehicles, inadequate hazardous waste handling, car thefts, improper worker safety protections, and other violations threaten vulnerable and underserved communities.

“Unlicensed dismantling is a ‘sleeper’ environmental justice, economic, and public health issue. The resulting environmental and public health damage to our communities calls for urgent action from the state,” Santiago said. “The governor’s signature prioritizes the health and safety of all people and ensures that all Californians have the right to live, learn, and work in a healthy environment.”

Of the 28 million registered vehicles in California, about 1.2 million are disposed of annually. Of those, approximately 360,000 (30 percent) end-of-life vehicles are being processed through unlicensed and unregulated automobile dismantlers. Unlicensed automobile dismantlers do not follow licensing requirements by the California Department of Motor Vehicles (DMV) that include insurance obligations, work place safety requirements, tax liability, and environmental regulatory standards as required by law.

“I want to thank Assemblymember Santiago for successfully advocating for comprehensive policy change on an issue that has been plaguing the State Board of Equalization,” BOE Fiona Ma, CPA, said. “Everyone should be paying their fair share of taxes including auto dismantlers who are dealing with end-of-life vehicles that normally have toxic and waste issues such as safely removing and recycling unused gasoline, brake fluid, engine oil, transmission fluid, antifreeze, catalytic converters, tires, mercury switches, lead acid batteries, and Freon. It is imperative that these business owners are registered, licensed, and regulated like others to minimize toxic impacts and ensure the best environmental and health safety standards are adhered to.”

Greg Pirnik, president for the State of California Auto Dismantlers Association, added that this measure “will help small businesses, protect jobs, and increase environmental protection by addressing the very serious and growing problem in California of unlicensed, unregulated, and underground automobile dismantling.”

The multiagency team created by AB 1858 includes the DMV, the BOE, the California Environmental Protection Agency (CalEPA), and other departments within CalEPA, including the State Department of Toxic Substances Control (DTSC). Those agencies will be required to submit a report to the legislature outlining findings and policy recommendations by Jan. 1, 2019.

AB 1858 will take effect on Jan. 1.

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