BILL ANALYSIS AB 2522 Page 1 Date of Hearing: April 16, 2008 ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT Anna Marie Caballero, Chair AB 2522 (Arambula) - As Introduced: February 21, 2008 SUBJECT : San Joaquin Valley Air Pollution Control District: vehicle license fees. SUMMARY : Authorizes the San Joaquin Valley Air Pollution Control District (District) to increase vehicle license fees to a maximum of $30. Specifically, this bill : 1)Makes findings and declarations relative to the air quality of San Joaquin Valley and the need for expanded emission reduction programs in order to achieve and maintain state and federal ambient air quality standards. 2)Authorizes the District to increase the current $6 vehicle license fee limit up to, but not exceeding, $30 per vehicle per year for incentive-based programs to achieve surplus emissions reductions. 3)Requires the adoption of a resolution providing for both the fee increase and a corresponding program for expenditure of the moneys raised by the increased fees for the reduction of mobile source emissions. 4)Authorizes the District to adopt rules and regulations to reduce vehicle trips in order to reduce air pollution from vehicular sources. 5)Authorizes the imposition of the fees until 2024. 6)Provides that the fees may be imposed after the 2012-13 fiscal year only if the United States Environmental Protection Agency approves the District's proposed reclassification of its non-attainment status for ozone from severe to extreme. 7)Requires that at least $10 million of the fees collected be used to mitigate the impacts of air pollution on public health and the environment in disproportionately impacted environmental justice communities, as defined in the San Joaquin Valley. AB 2522 Page 2 8)Requires the District to convene an environmental justice (EJ) advisory committee, with participants selected from a list given to the board by EJ groups from the San Joaquin Valley, to recommend the neighborhoods that constitute EJ communities. 9)Requires the EJ advisory committee to recommend how the funds should be expended within those communities. 10)Requires the California Air Resources Board (ARB), prior to the fees being effective, to make two separate findings that the District: a) Has undertaken all feasible measures to reduce non-attainment air pollutants from sources within its jurisdiction and regulatory control; and b) Has notified ARB that fees have been adopted and has provided ARB with an estimate of the total funds that will be provided annually by the fees. 11)Requires ARB to file a written copy of its findings with the Secretary of State within two days of its determination. 12)Requires the Bureau of State Audits to audit the fee assessment and the expenditures every two years that the fees are assessed, and to submit these audits to the Legislature within two weeks of their completion. 13)Requires ARB to assess the District's progress in using any fees to achieve and maintain state and federal ambient air quality standards every two years that the fees are assessed, and to submit these assessments to the Legislature within two weeks of their completion. 14)Requires the District to submit an assessment to the Legislature by January 1, 2010, on the manner in which vehicle license fees or other types of fees could be imposed on vehicles that are not registered within its jurisdictional area, but that travel through it. 15)Provides that no local agency reimbursement is required from the State Mandates Claim Fund because the local agency has requested the authority from this legislation. AB 2522 Page 3 16)Provides that the provisions of this bill become effective only if SB 240 (Florez), pending in the Assembly Appropriations Committee, is enacted. EXISTING LAW : 1)Establishes the District, consisting of the Counties of Fresno, Kings, Madera, Merced, San Joaquin, Stanislaus, and Tulare, and that portion of the County of Kern that is within the San Joaquin Valley Air Basin, and requires the District to adopt and enforce rules and regulations to achieve and maintain ambient air quality standards, as provided. 2)Requires the United States Environmental Protection Agency, under the federal Clean Air Act, to establish national ambient air quality standards for criteria air pollutants at levels that are required to protect the public health with an adequate margin of safety. 3)Provides, under the federal Clean Air Act, that state and local governments have primary responsibility for the control of air pollution. 4)Requires ARB to achieve the maximum degree of emission reduction possible from vehicular and other mobile sources in order to accomplish the attainment of state ambient air quality standards by the earliest practicable date. 5)Authorizes an air pollution control district designated by ARB as a state non-attainment area for any pollutant emitted by motor vehicles to levy a fee of up to $6 on motor vehicles registered within an air district. 6)Requires an air district imposing such a fee to enact a resolution providing for both the fee increase and for a corresponding program for expenditure of the increased fees. 7)Requires the program to provide for the reduction of air pollution from motor vehicles, and for related planning, monitoring, enforcement, and technical studies. 8)States that after January 1, 2015, the fee levied on vehicles within an air district is reduced from $6 to $4. 9)Requires the District to adopt a schedule of fees on area wide AB 2522 Page 4 or indirect emission sources that are regulated, but for which permits are not issued, to recover its costs associated with these sources. 10)Authorizes the District to impose an additional $1 surcharge, to be paid to the Department of Motor Vehicles (DMV) and deposited into the Motor Vehicle Account for allocation to the District for certain purposes, such as clean fuels programs and motor vehicle use reduction measures. FISCAL EFFECT : Unknown COMMENTS : 1)According to the author, "the San Joaquin Valley suffers some of the worst air quality in the world, which poses a significant threat to public health, the environment, and the economy of the valley. The Valley has the third highest fine particulate matter levels in the U.S. and is home to four of the five worst ozone-polluted cities in the U.S. One in three Valley families has a member with a respiratory ailment, and the poor air quality contributes to 460 deaths per year." 2)There are currently 2.6 million cars, trucks and motorcycles registered in the eight county area that comprises the San Joaquin Air District. Each owner of a motor vehicle registered in the Counties of Fresno, Kings, Madera, Merced, San Joaquin, Stanislaus, and Tulare, and the valley portion of Kern County pays an annual $6 fee, the revenue from which is earmarked for air quality programs related to vehicle use. In addition, the District is required to impose a $1 fee on annual motor vehicle registration to reduce emissions through activities such as clean fuels programs and adoption of motor vehicle use reduction measures. These two fees combine to generate $18 million annually, with a small percentage retained by DMV to pay for its imposition and collection costs. 3)According to the author's office, AB 2522 authorizes the District to increase the surcharge on vehicle licensing fees to $30 annually, per motor vehicle. The funds generated will be used for incentive based air quality improvement programs to bring the San Joaquin Valley into compliance with state and AB 2522 Page 5 federal air quality standards by the earliest practicable date. If the District fully exercises the authority provided by this bill, annual revenue generated by the $30 air pollution fee would initially amount to an estimated $96 million, an increase of $78 million over current revenue generated by the combined $7 in fees. Because population growth in the San Joaquin Valley is currently among the highest in California and is projected to continue to outpace the rest of the state, this revenue would increase substantially over the years. 4)Supporters indicate that "poor air quality is a significant threat to public health, the environment, and the economy of the region. The San Joaquin Valley does not meet state and federal ambient air quality standards. Therefore, creating a program that combines more strict clean air rules and regulations and ongoing funding to clean up sources of air pollution is critical." 5)According to the District, "approximately 85% of the necessary emissions reductions will come from regulations, but a substantial increase in incentive funding will be necessary in order to achieve the remainder of the reductions necessary to attain federal air quality standards for ozone and particulate matter. The incentive funding is targeted at mobile sources of pollution that account for 80% of the nitrogen oxide emissions in the San Joaquin Valley." 6)In opposition to the measure, the Stop Hidden Taxes Coalition indicates that "in the past five years, the California Legislature and local governments have tried to impose more than $7 billion in new taxes while avoiding constitutional approval requirements for tax increases. The strategy is to disguise taxes as mere regulatory "fees" in order to avoid the public debate and rigorous vote requirement that voters have repeatedly demanded before taxes are raised." 7)This bill will only take effect if SB 240 (Florez) is also enacted and becomes effective. SB 240 is similar to this bill; however, SB 240 did not pass out of the Assembly Appropriations Committee. 8)This bill is double-referred to the Committees on Transportation, where it passed with an 8-2 vote on April 7, AB 2522 Page 6 2008, and to Local Government. REGISTERED SUPPORT / OPPOSITION : Support American Lung Association of CA CA League of Conservation Voters Coalition for Clean Air Planning and Conservation League San Joaquin Valley Air Pollution Control District Supervisor Michael J. Rubio, Supervisor, Fifth District, Kern County Opposition CA New Car Dealers Association STOP Hidden Taxes Coalition Analysis Prepared by : Katie Kolitsos / L. GOV. / (916) 319-3958