Unlicensed Auto Dismantlers are UnSafe

California Auto Dismantlers Association (SCADA) is drawing public attention to the need to extend a highly effective DMV strike team program that was established to combat the underground economy of illegal auto dismantlers. This first in the nation program expired December 30, 2019 and could be extended provided critical legislation advances by January 24, 2020.

According to California Department of Motor Vehicles (DMV) data there is strong evidence that the size of the underground economy of unlicensed auto dismantlers has surpassed the number of licensed dismantlers that operate lawfully in the State of California.

In 2000, there were 1,552 licensed dismantlers in California.  Today, the number has declined 17.5% to 951, even as the number of vehicles has increased in a state that has the largest number of vehicles.  By contrast, since 2017 the DMV raided 824 unlicensed operations before its “Unlicensed Auto Dismantling Industry Strike Team” (VDIST) program expired on December 30, 2019. By all accounts, there are hundreds of operations yet to be targeted by the DMV.

“These unlicensed cash-only operations do not comply with laws that regulate the environment, labor or public safety and pay no taxes,” said Gary Umphenour, SCADA president and manager of United Truck and Auto Dismantlers in Marysville, California. “There is no question in my mind that this underground economy is much bigger than anyone could have imagined. Illegal auto dismantling is killing small businesses that play by the rules.”

The underground economy of unlicensed auto dismantling creates unfair competition, costing legitimate licensed small business owners over $1.5 billion a year in potential earnings and over $100 million in uncollected taxes. Over 360,000 of 1.2 million end-of-life vehicles go unaccounted for each year in California, and this figure will grow if unabated.

“Unlicensed auto dismantlers are unregulated in the handling and disposing 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.”

The DMV’s VDIST program is a multi-agency state strike team that coordinates enforcement and compliance activity related to unlicensed and unregulated auto dismantling, including environmental and public health impacts, sale of unsafe used auto parts and tax evasion.

The VDIST program was established in 2016 by Assembly Bill 1858 (Santiago), expired on December 30, 2019 and will not be extended unless AB 238 (Santiago) advances out of the Assembly Appropriations Committee, Chaired by Assemblymember Lorena Gonzalez of San Diego, by January 24, 2020. The legislation is supported by a diverse group of stakeholders representing environmentalists, employers, local government, labor, law enforcement and social justice organizations.

“Unlicensed dismantling is truly an environmental justice issue. The resulting environmental and public health damage to our communities calls for continued investment from the state,” said Assemblymember 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 hazards.”

Between 2017 and January 2, 2020, DMV Strike Teams engaged in 40 operations throughout the state that resulted in 1105 cases, including 824 unlicensed dismantlers and 556 citations.