BILL ANALYSIS AB 1740 Page 1 Date of Hearing: March 22, 2010 ASSEMBLY COMMITTEE ON TRANSPORTATION Bonnie Lowenthal, Chair AB 1740 (Jeffries) - As Introduced: February 8, 2010 SUBJECT : Specially constructed vehicles SUMMARY : Removes the 500 annual cap on the number of specially constructed vehicles that may be registered. Specifically, this bill : 1)Allows an unlimited number of specially constructed vehicles to be registered by the Department of Motor Vehicles (DMV) using a specific formula for determining the emission control standards that apply to those vehicles. 2)Allows the registered owner of a specially constructed vehicle that is currently registered or incorrectly registered to change the vehicle's registration by having it inspected by a repair station authorized to perform referee functions for the purpose of determining the engine model-year used in the vehicle or the vehicle model-year, and the appropriate emission control system application. 3)Repeals provisions that currently apply to specially constructed vehicles presented to DMV after the existing 500 annual registration limitation for such vehicles has been met. EXISTING LAW : 1)Defines a specially constructed vehicle as a vehicle that is built for private use, not for resale, and is not constructed by a licensed manufacturer or remanufacturer, and requires all such vehicles to be subject to the emission control system testing and certification requirements established by the Department of Consumer Affairs. 2)Requires a passenger vehicle or pickup truck that is a specially constructed vehicle to be inspected by stations authorized to perform referee functions for the purposes of determining the engine model-year used in the vehicle or the vehicle model-year, and the emission control system application. AB 1740 Page 2 3)Grants the vehicle owner the option to choose whether the inspection is based on the engine model-year used in the vehicle or the vehicle model-year. 4)Requires the referee, in determining the engine model-year, to compare the engine to engines of the era that the engine most closely resembles and to assign the 1960 model-year to the engine in any specially constructed vehicle that does not sufficiently resemble a previously manufactured engine. 5)Requires the referee, in determining the vehicle model-year, to compare the vehicle to vehicles of the era that the vehicle most closely resembles and to assign the 1960 model-year to any specially constructed vehicle that does not sufficiently resemble a previously manufactured vehicle. 6)Allows DMV to provide an initial registration to no more than the first 500 vehicles that meet the specified criteria and are presented to the department each year for registration. 7)Requires DMV, when considering a registration application for a specially constructed vehicle that is not among the first 500 applicants, to assign that vehicle the same model-year as the calendar year in which the application is submitted, for purposes of determining emissions inspection requirements for the vehicle. 8)Requires DMV to develop and administer a vehicle registration amnesty program, from January 1, 2010, until December 31, 2010, for vehicles that have been previously registered or classified incorrectly and that are subsequently registered correctly. 9)Prohibits bringing a criminal action for making false statements relating to a vehicle's value, make, model, or for failure to register the vehicle, against a current owner who has been granted amnesty under the amnesty program. 10) Requires the owners of specially constructed vehicles who apply for amnesty under this program to obtain an emissions control certificate. FISCAL EFFECT : Unknown AB 1740 Page 3 COMMENTS : A specially constructed vehicle, or "kit car," is one which is not built for resale nor constructed by a licensed manufacturer. Instead, they are typically built at home by hobbyists and classic car enthusiasts. Kit cars are often replicas of well-known and expensive classics and are designed so that anyone with a fair degree of technical skill can build them to a standard where they can be driven on the public roads. The Legislature in 2001 enacted SB 100 (Johannessen) Chapter 871, Statutes of 2001, which modified the way a kit car's engine model-year is determined for smog inspection purposes. Prior to SB 100, because of the difficulty of determining the precise engine model-year resulting from the use of unassociated engine parts and the special nature of these vehicles, DMV designated them as being from the current model-year. A current-year designation subjects vehicles to relatively stringent smog standards, which many kit cars are unable to meet. SB 100 authorized specially trained smog inspection station referees to assign a 1960 model-year designation (i.e., completely exempt from emission control requirements and from biennial smog inspections) for vehicles not closely resembling any particular model year but limited these designations to the initial registration of no more than 500 vehicles each year. SB 1578 (Johannessen) Chapter 95, Statutes of 2002, expanded the scope of SB 100 so that it applied to the first 500 specially constructed vehicles presented to DMV each year, regardless of whether they were applying for initial registration or for renewal. Kit cars that are registered after the 500-vehicle annual limitation has already been met in any given year must meet new car smog standards for that particular year and will also be subject to biennial smog inspections. DMV reports that the 500-registration limit for kit cars was not reached in 2009 until some time in December. This year, however, about 340 kit car registrations were processed through early March. Bloggers in the hot rodding community have noted that, "Now with brand new Mustang and Camaro steel tubs available (and possibly more makes in the works), the competition for those few pardons is getting stiffer with no end in sight." Proponents of this bill argue that this annual limit of 500 for kit car registrations under SB 100 provisions is unfair and is AB 1740 Page 4 an impediment to economic activity. They contend that "the sport of hot rodding has created and maintained hundreds of thousands of jobs" in California, and that "our cars are better running and cleaner than most new vehicles." They also point out that, "These vehicles are primarily show vehicles and are only driven a few times a month going to and from car shows and parades." They therefore believe that the limited usage of kit cars translates into a minimal impact on statewide vehicular emission totals. Data from the Air Resources Board (ARB), on the other hand, indicates that kit cars that lack emission controls are substantially dirtier than vehicles containing the controls required on a manufactured vehicle. A typical kit car in good condition emits 13.15 grams per mile of hydrocarbons (HC) and oxides of nitrogen (NOx) as compared with a 2005 passenger vehicle that emits 0.07 grams per mile of HC and NOx. This is nearly 200 times more pollution per mile. Consequently, a small number of uncontrolled kit cars can generate a substantial amount of excess emissions even if driven less than typical passenger vehicles. The California Pollution Control Officers Association (CAPCOA) further contends that the bill would "allow kit car owners who have fraudulently tampered with their emissions controls and cheated the state out of sales tax and registration fees to not repay what they owe, and legally operate their polluting vehicles." In 2008 and 2009, the Legislature passed and the Governor signed AB 619 and AB 318, both authored by Assemblymember Bill Emmerson. These create an amnesty program for kit car owners that illegally registered their vehicles to avoid emissions requirements and registration fees and sales taxes. This amnesty program requires these owners to clean their vehicles and pay all fees owed, and in exchange grants amnesty from prosecution. AB 1740 eliminates all environmental and financial requirements of this amnesty program, depriving California of significant funds. According to the Department of Justice, which has led the investigation of kit car fraud, over 70,000 vehicles could take advantage of the loophole this new bill would offer, depriving the state of over $35 million annually in fees owed." REGISTERED SUPPORT / OPPOSITION : Support AB 1740 Page 5 Association of California Car Clubs (ACCC) L. A. Roadsters Over the Hill Gang, San Bernardino Over the Hill Gang, San Diego The Market Connection Saddleback So. Rods Cal. South Bay Cruisers Approximately 986 letters from individuals Approximately 96 phone calls from individuals Opposition American Lung Association, in California California Air Pollution Control Officers Association Analysis Prepared by : Howard Posner / TRANS. / (916) 319-2093