BILL ANALYSIS                                                                                                                                                                                                    




                   Senate Appropriations Committee Fiscal Summary
                           Senator Tom Torlakson, Chairman

                                           2522 (Arambula)
          
          Hearing Date:  7/7/08           Amended: 5/23/08
          Consultant:  Miriam Barcellona IngenitoPolicy Vote: EQ 5-2; T&H  
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          AB 2522 (Arambula) 


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          BILL SUMMARY:  AB 2522 would authorize the San Joaquin Valley  
          Unified Air Pollution Control District (district) to increase  
          the existing fee authority to up to $30 per motor vehicle in  
          order to establish and implement incentive-based programs to  
          achieve surplus emissions reductions, as specified.  
          Additionally, AB 2522 would authorize the district to adopt  
          rules and regulations to reduce vehicle trips in order to reduce  
          air pollution from vehicle sources.  
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          ____
                            Fiscal Impact (in thousands)

           Major Provisions         2008-09      2009-10       2010-11     Fund
           DMV collection costs              $200                  Special*
          District revenues      (unknown, potentially $60,000)** Special*
          ARB assessment of district        minor and absorbable  Special*
          _________
          *Motor Vehicle Account 
          **Assumes there are 2.5 million motor vehicles in the district  
          subject to the fee
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          ____

          STAFF COMMENTS: 
          
          Under existing law, the district is authorized to levy up to $7  
          per motor vehicle in its district as follows:  
                 Up to $6 on motor vehicles registered within the  
               district because it is a state nonattainment area for  
               pollutants emitted by motor vehicles. This revenue is to be  
               used for reducing motor vehicle air pollution pursuant to  
               certain California Clean Air Act requirements. This cap is  
               reduced to $4 on January 1, 2015.
                 $1 district surcharge to be used for certain purposes,  
               such as clean a clean fuels program and motor vehicle use  
               reduction measures.

          Existing law also authorizes the Department of Motor Vehicles  
          (DMV) to collect the fees and to retain up to one percent of the  
          revenues generated for its administrative costs.

          AB 2522 would authorize the district to increase the $6 fee paid  
          by motorists in the district to up to $30 per motor vehicle per  







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          AB 2522 (Arambula) 


          year for the purposes of establishing and implementing  
          incentive-based programs to achieve surplus emission reductions  
          that the district determines are needed to remediate air  
          pollution harms created by motor vehicles and that are intended  
          to achieve and maintain state and federal ambient air quality  
          standards required by the Federal Clean Air Act. The district  
          estimates there are about 2.5 million motor vehicles it that are  
          subject to the fee. If the district opted to increase the fee by  
          the maximum allowable by AB 2522, and assuming there are 2.5  
          million motor vehicles subject to the fee, the fee increase  
          generate about $60 million in additional revenues to the  
          district, less DMV collection costs. DMV estimates it would  
          require about $200,000 to reprogram its computers in order to  
          collect the fee increase. 
          
          AB 2522 would authorize the increased fee from 2009-2010 to  
          2023-24, but prohibits the increased fees from being charged  
          after the 2012-2013 unless the U.S. Environmental Protection  
          Agency approves the district's proposed reclassification of its  
          nonattainment status for ozone from severe to extreme.  

          Additionally, AB 2522 specifies that at least $10 million would  
          be required to be used to mitigate the impacts of air pollution  
          on public health and the environment in disproportionately  
          impacted environmental justice communities. AB 2522 would  
          require the district to convene an environmental justice  
          advisory committee to recommend the neighborhoods in the  
          district that constitute environmental justice communities and  
          how to expend funds within these communities.

          In order for the fees to become effective, the state Air  
          Resources Board (ARB) would be required to make two findings:  
          (1) that the district has undertaken all feasible measures to  
          reduce nonattainment air pollutants from sources within the  
          district's jurisdiction and regulatory control; and (2) the  
          district has notified the state board that fees have been  
          adopted under this bill and has provided the state board with an  
          estimate of the total revenues it estimates will be generated by  
          the fees. ARB has already determined that the district has  
          undertaken all feasible measures to reduce nonattainment air  
          pollutants from sources within the district's jurisdiction and  
          regulatory control. AB 2522 would require ARB to file a notice  
          with the Secretary of State within two days of its  
          determination. Finally, ARB would be required to assess the  
          district's progress in using any new fees to achieve and  







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          AB 2522 (Arambula) 


          maintain state and federal ambient air quality standards every  
          two years that the fee is assessed. ARB indicates it already  
          assesses the district's progress and these requirements would  
          not increase its workload significantly. ARB estimates that it  
          would only incur minor and absorbable costs as a result of the  
          provisions of AB 2522. 

          AB 2522 specifies that the fees would first be collected nine  
          months after ARB files its findings with the Secretary of State.