A New Jersey lawmaker has proposed a major step toward dismantling the black market for the state’s temporary license plates, introducing legislation that would create new criminal penalties for selling and driving with fraudulent paper tags.

The bill, put forth on Monday by Assembly Member Paul Moriarty (D-Gloucester), would significantly ratchet up the punishments for selling or buying fraudulent New Jersey temporary license plates. The proposal follows a Streetsblog investigation last month that found New Jersey used car dealers selling such tags illegally and drivers using them to skirt accountability on the road.

“For those that want to misuse and abuse our laws, the penalties should be much higher, and the potential for criminal penalties should be a disincentive as well,” Moriarty said in an interview on Monday.

Under the South Jersey legislator’s bill, anyone caught selling or trying to sell temp tags, as they’re known, could face up to five years in prison and a $15,000 fine. Motorists driving with fraudulent tags could face up to 18 months in prison and a $10,000 fine. Even possessing a fraudulent tag could lead to six months in prison and a $1,000 fine.

All three charges require the perpetrator knowing the plate was “obtained by providing false information” to the New Jersey Motor Vehicle Commission, which oversees New Jersey’s thousands of car dealers and runs the state’s temp tag system.

The Garden State has been a hotbed of illicit trade in paper license plates, Streetsblog found, because New Jersey’s laws and regulations surrounding the used car industry are looser than in other states, making it easier to obtain dealership credentials and print large numbers of tags.

The bill would also create new fines that the Motor Vehicle Commission could impose on dealers caught violating temp tag regulations, which would amount to $2,500 for a first offense and $5,000 for subsequent offenses. That’s far higher than the $500-to-$1,000 fines the MVC has typically meted out in the past to dealers caught violating temp tag regulations, as Streetsblog reported previously.

Authentic temporary plates sell for $100 or more on the black market, and some New Jersey dealers admitted to Streetsblog that they sold thousands of them, meaning possible profits in the six figures. Streetsblog even found one New Jersey dealership that issued 36,000 temp tags in one year — worth possibly $3.6 million on the black market. The MVC caught that dealer fraudulently issuing temp tags and shut it down, but the agency imposed only a $500 fine — the maximum allowed under current law for a first violation.

Moriarty’s legislation would also require the MVC to revoke the licenses of dealers caught selling or trying to sell temp tags.

Assembly Member Annette Chaparro said she will co-sponsor Moriarty’s bill and introduce separate legislation to eliminate the state’s paper tags entirely, as she suggested last week.

MVC Spokesman William Connolly declined to comment on Moriarty’s bill, saying the agency does not comment on pending legislation. Paula Frendel, executive director of the New Jersey Independent Automobile Dealers Association, did not respond to a question about whether the association supports Moriarty’s bill.

New Jersey already prohibits motorists from driving with “forged or counterfeit” tags and bars dealerships from issuing temp tags without selling or leasing someone a car. But Moriarty’s bill would dramatically increase the repercussions for violators.

Drivers use fake and fraudulent temp tags for a variety of reasons, including to drive without car insurance; to avoid sales tax on car purchases and bills for tolls and tickets; and to commit more serious crimes in cars with license plates that aren’t connected to their name and address. Fake and fraudulent temp tags have been used during robberies, shootings, and hit-and-runs in New York City, according to city officials and news reports.

New Jersey is at least the third state in recent years where lawmakers have planned or enacted legislation to combat temporary license plate fraud. A law passed in Texas in 2021 strengthened the ability of the state’s Department of Motor Vehicles to hinder sham dealerships selling temp tags illegally. And the Texas House of Representatives last week unanimously approved a bill to eliminate the state’s paper tags entirely.

A lawmaker in Georgia, another state whose paper tags commonly appear on cars in New York City, said he plans to introduce legislation next year to combat temp tag fraud.