California’s underground economy of unlicensed auto dismantling is booming
According to data from the California Department of Motor Vehicles (DMV), there is strong evidence that the size of the underground economy of unlicensed auto wreckers has exceeded the number of licensed dismantlers that legally operate in the. State of california.
In 2000, there were 1,552 approved dismantlers in California. Today, the number is down 17.5% to 951, even as the number of vehicles has increased in a state with the most vehicles. In contrast, since 2017, the DMV has raided 824 unlicensed operations ahead of its “unlicensed auto-dismantling industry strike team” (VDIST) the program expired on December 30, 2019. By all accounts, there are still hundreds of operations to be targeted by the DMV.
“These unauthorized cash-only transactions do not comply with laws that regulate the environment, labor or public safety and do not pay taxes,” said Gary Umphenor, president of SCADA and director of United Truck and Auto Dismantlers at Marysville, California. “There is no doubt in my mind that this underground economy is much bigger than anyone could have imagined. Illegal dismantling of automobiles kills small, playful businesses.”
The underground economy of dismantling unlicensed automobiles creates unfair competition, costing legitimate owners of licensed small businesses more than $ 1.5 billion one year of potential earnings and more $ 100 million in uncollected taxes. More than 360,000 of the 1.2 million end-of-life vehicles go missing each year in California, and this number will increase if it does not decrease.
“Unlicensed auto wreckers are not regulated in the handling and disposal of hazardous materials and fluids,” said Sean Bothwell, executive director of the California Coastkeeper Alliance. “This underground industry poses a real threat to our drinking water and the rivers and streams that support wildlife. This toxic problem will become a crisis if the state abandons its commitment to public health and the environment. ”
DMV’s VDIST program is a multi-agency state strike team that coordinates enforcement and compliance activities related to unauthorized and unregulated auto dismantling, including environmental and public health impacts, sale of dangerous used auto parts and tax evasion.
The VDIST program was created in 2016 by the Assembly Bill 1858 (Santiago), expired on December 30, 2019 and will not be extended unless AB 238 (Santiago) leaves the Assembly Appropriations Committee, chaired by the Assembly member Lorena González of San Diego, through January 24, 2020. The legislation is supported by a diverse group of stakeholders representing environmentalists, employers, local governments, labor unions, law enforcement and social justice agencies.
“License-free decommissioning is really a matter of environmental justice. The resulting environmental and public health damage to our communities calls for continued investment by the state,” said Member of the Assembly Miguel Santiago. “We must continue to prioritize the health and safety of all people – regardless of race, color, national origin, income status or location – by continuing the work of VDIST to protect them from environmental and health risks. “
Between 2017 and January 2, 2020, DMV response teams engaged in 40 statewide operations that resulted in 1,105 cases, including 824 unlicensed dismantlers and 556 citations (regional data are available on request).
The State of California Auto Dismantlers Association (SCADA) represents approximately 150 small businesses across California. SCADA was established in 1959 to serve its members in government relations, education and business. SCADAs are licensed by the state Department of Motor Vehicles and take responsibility for recycling and disposing of end-of-life vehicles using environmentally friendly practices. www.SCADA1.com.
Contact: Marko Mlikotin, River City Communications, 916.799.7574
SOURCE California State Automobile Wrecking Association