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New Jersey Lawmakers Pass Major Reforms to Combat Temporary License Plate Fraud

The vote follows a Streetsblog investigation that uncovered widespread misuse of the state's temporary license plates, with car dealers selling the tags illegally to drivers using them to avoid accountability on the road.

The New Jersey legislature on Monday passed a bill that could deal a blow to the black market for temporary license plates. Pictured: Sen. Teresa Ruiz and Assembly Member Paul Moriarty, who crafted the legislation. Illustration: Martin Schapiro

Legislators in New Jersey on Monday took a decisive step toward dismantling the black market for temporary license plates, passing a bill that would overhaul the state's widely abused system for issuing the paper tags to motorists.

The legislation, approved unanimously by the state Senate and Assembly, mandates a redesign of the state's temporary license plate, introduces new oversight of car dealerships and creates stiff criminal penalties for selling and driving with so-called temp tags that have been issued illegally.

The measure follows a seven-month Streetsblog investigation that uncovered widespread misuse of temporary license plates, with car dealers exploiting loose regulations in New Jersey and Georgia to sell the tags illegally to New Yorkers who use the paper plates to dodge tolls and tickets, to drive on suspended licenses and to commit more serious crimes with their identities concealed.

The bill, introduced by New Jersey Senate Majority Leader Teresa Ruiz (D-Essex) and Assembly Member Paul Moriarty (D-Gloucester), is part of a multi-state effort to throttle a shadow economy that exploded during the pandemic and deluged New York City streets with illegal paper tags.

“We are now one step closer to ending the sale of fraudulent temporary license plates in New Jersey,” Ruiz said in a statement. “Bad actors have exploited the system for too long to make an easy profit and avoid accountability, jeopardizing public safety. To combat these organized schemes we need more oversight and stronger penalties, in addition to empowering the [New Jersey Motor Vehicle Commission] to crack down on bad actors and those who profit and make our roads unsafe.”

In a statement, Moriarty added: "This bill will instill trust in our vehicle registration system and impose stronger penalties and fines for those exploiting loopholes. Most importantly, this will ensure our roads remain safe."

Lawmakers in the city and Georgia have also introduced or proposed bills on the issue, and regulators in New Jersey have proposed sweeping rule changes that would deal a further blow to would-be temp tag sellers in the state. Regulators have also shut down dozens of car dealerships for temp tag fraud since Streetsblog's series, and numerous dealers are now under criminal investigation.

The New Jersey bill now heads to Gov. Phil Murphy for his signature. His office did not respond to an inquiry about whether he would sign the legislation.

If he does, the new law will prompt a raft of changes to New Jersey's temporary license plate system:

  • The state will redesign its temp tags to make them harder to copy or counterfeit.
  • The state will create a vehicle registry and require car dealerships to log information about all vehicles that they buy and sell, so that state auditors can more easily determine whether a temp tag was issued as part of the legitimate sale or lease of a car.
  • Dealers who wish to issue temp tags will first have to submit an additional application to the state and take a training course. They will also have to log the IP address of printers used to produce tags.
  • Dealers caught issuing tags illegally will face far stiffer penalties — $2,500 for a first offense and $5,000 for each subsequent offense — and could be permanently barred from the state's car sales industry for the infraction. They could also face criminal charges punishable by up to 18 months in prison and a $10,000 fine.
  • Illegal temp tag buyers would also face more serious consequences, including six months in prison and a $1,000 fine for driving with a fraudulent tag.

The changes address many of the loopholes in the state's temp tag system identified by Streetsblog. Through public records and interviews, Streetsblog found that New Yorkers were able to open sham used car dealerships in New Jersey and Georgia, gain access to state systems for printing temporary license plates, and illegally sell vast quantities of them to drivers using them to avoid accountability on the road. It appears those dealers were able to print the tags from anywhere; one dealer told Streetsblog that she printed and sold thousands of New Jersey tags from her home in Queens.

While regulators previously shut down dealers for temp tag fraud, the fines they imposed were small compared the the large sums to be made selling temps. There were easy profits even for small-time sellers, such as Jose Cordero, who told Streetsblog he made $18,200 selling just 200 tags. He was fined around $1,000.

If signed into law, the new criminal penalties will take effect immediately, while the tag redesign and extra dealer requirements will phase in within fourteen months.

The New Jersey Coalition of Automotive Retailers, which represents new car dealers in the state, called the legislation a "great start."

Coalition members "applaud the legislature’s efforts to tighten up access to the temp tag system and increase penalties for noncompliance," NJCAR President Jim Appleton said in a statement. "But, ultimately, the most effective weapon against the issuance of fraudulent tags will be for the New Jersey Motor Vehicle Commission to implement an internal management system that monitors the temp tags that are never made permanent and, thereby, identify and punish the bad actors."

The New Jersey Motor Vehicle Commission, which regulates car dealers and temp tags in the state, did not respond to a request for comment on the legislation.

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