BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 2289
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          Date of Hearing:   April 19, 2010

                        ASSEMBLY COMMITTEE ON TRANSPORTATION
                               Bonnie Lowenthal, Chair
                     AB 2289 (Eng) - As Amended:  April 21, 2010
           
          SUBJECT  :  Smog check program enhancements

           SUMMARY  :  Establishes new industry operating standards and  
          technology upgrades to the current biennial inspections of  
          vehicle emission control equipment and systems (smog check)  
          program.  Specifically,  this bill  :  

          1)Establishes legislative intent to encourage the state's  
            community college system and other training institutions to  
            develop innovative programs that respond to industry demands  
            for automotive technicians.  

          2)Authorizes an alternative smog check test method and  
            corresponding test equipment for the year 2000 and newer motor  
            vehicles equipped with updated on-board diagnostic systems  
            (OBD II).  

          3)Authorizes the Bureau of Automotive Repair (BAR) to establish  
            performance standards and requires vehicles that cause most of  
            the pollution to have smog checks performed by stations that  
            meet high performance standards.  For test-only stations,  
            requires BAR to automatically suspend operations when the  
            test-only station fails the performance standards.   
            Establishes suspension and appeal procedures.  

          4)Revises the existing procedures for the provision of referees  
            by BAR.  Requires referees to make inspections of specially  
            constructed vehicles, as defined.  

          5)Requires an annual evaluation of the performance of the smog  
            check program by BAR, in cooperation with the California Air  
            Resources Board (CARB), using data collected from a roadside  
            audit program.  The required annual report, beginning July 1,  
            2011, is to include, at a minimum, the following:  

             a)   An independent analysis done on the report's evaluation  
               methods, findings, and conclusions;  

             b)   The percentage of vehicles that initially passed a smog  








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               check inspection and then failed a subsequent inspection;  
             
             c)   The percentage of vehicles that initially failed a smog  
               check inspection and then failed a subsequent inspection;  

             d)   An estimate of excessive emissions resulting from  
               vehicles identified in (b) and (c);  

             e)   Recommended changes to the smog check program.  Requires  
               authorization by the Legislature, through enactment of  
               statute, prior to implementing any recommendations on  
               contracting the management of smog check stations; and,  

             f)   A comparison to the findings of the report "Evaluation  
               of the California Smog Check Program Using Random Roadside  
               Data" dated March 12, 2009.  

          6)Authorizes BAR to enter into a contract for the supply or  
            service of certified equipment with the manufacturers and  
            service providers.  Requires BAR to provide to smog check  
            stations the option to purchase the equipment or service  
            directly from the contractor or any other provider of  
            certified equipment or service.  

          7)Requires BAR to indicate the implementation date for the use  
            of the new equipment in their adoption of regulations.  

          8)Repeals the existing fine and penalty structure and adopts a  
            more stringent fine and penalty structure to respond to  
            stations and technicians that perform improper inspections.   
            Establishes a minimum fine penalty of $100, but not more than  
            $5,000, based upon various factors of consideration by BAR.   
            Increases the minimum daily civil penalty to not more than  
            $5,000 per day.  

          9)Increases the penalties to customers who obtain or attempt to  
            obtain a repair cost waiver, or economic hardship extension,  
            by falsifying information to not more than $5,000.  Adds a new  
            penalty violation to a customer who obtains or attempts to  
            obtain a smog certificate by falsifying information to not  
            more than $5,000.  

           EXISTING LAW  :  

          1)Requires, generally, gasoline and diesel-fueled vehicles that  








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            are registered in nonattainment areas for ozone or carbon  
            monoxide pollutant emissions to undergo smog check.   
            Authorizes BAR to enforce and administer the smog check  
            program to ensure the reduction of gaseous emissions of  
            hydrocarbons, carbon monoxide, and oxides of nitrogen.  

          2)Requires the smog tests to include, at minimum, loaded mode  
            dynamometer testing in enhanced areas, and 2-speed testing in  
            all other program areas, and a visual or functional check of  
            emission control devices specified by smog technicians.  

          3)Requires the periodic evaluation of the smog check program by  
            BAR and CARB.  Establishes the Inspection and Maintenance  
            Review Committee Inspection and Maintenance Review Committee  
            (IMRC) to review the BAR/CARB joint evaluation and to submit a  
            report on the proposed plan to the Legislature.  

          4)Establishes procedures for the issuance of citations for  
            operating violations by underperforming stations and  
            establishes a schedule of civil penalties for the violations.   


          5)Requires BAR, if existing smog check stations, in order to  
            participate in the enhanced program, have been required to  
            make additional investments of more than $10,000, to submit  
            recommendations to the Governor and the Legislature for any  
            appropriate mitigation measures.  

           FISCAL EFFECT  :  Unknown

           COMMENTS  :  BAR and CARB are jointly sponsoring this bill that  
          they assert is projected to save consumers money, save time, and  
          provide greater air quality from the state's smog check program,  
          which is administered by BAR.  According to smog station  
          industry sources, this is the second attempt within several  
          years to try to achieve major smog check program upgrades.  That  
          unsuccessful attempt, they claim, was due to the inability to  
          foster a sense of trust as well as a consensus agreement on  
          program goals/needs between the stakeholders - - the air quality  
          regulators, BAR management, smog check industry, equipment  
          suppliers, and environmental organizations.  This bill  
          represents, for the most part, an earnest negotiated consensus  
          among those parties.  

          The author's office contends that this bill is designed to  








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          improve smog check in reducing pollution through the use of new  
          technologies (OBD II) that provide considerable time and cost  
          savings to consumers while at the same time improving consumer  
          protections by adopting more stringent fine structures to  
          respond to station and technicians that perform improper and  
          incomplete inspections.  While making the transition to new  
          equipment and reducing the need for the old equipment, the  
          author's office wants to provide clear direction to BAR/CARB and  
          especially to the regulated smog stations regarding the new  
          scope of the law as envisioned.  With program implementation  
          changes clearly delineated by this bill, smog stations will be  
          better able to make informed business decisions along with the  
          ability of BAR personnel to better manage, investigate, and  
          enforce the program.  

           Statewide smog check program  :  In 1982, California became the  
          20th state in the nation to adopt a vehicle inspection and  
          maintenance (smog check) program.  Unlike the other states, BAR  
          administers a "decentralized" program, which means that smog  
          check stations are privately owned and operated.  In 2008/2009,  
          BAR licensed approximately 8,400 smog check stations (although  
          only 7,300 are considered active stations in the 1st quarter of  
          2009).  During this time, BAR also licensed almost 14,000 smog  
          check technicians.  

          This bill authorizes BAR to contract with one or more private  
          entities to manage smog check stations and evaluate performance  
          based upon standards set by them.  According to CARB, this is a  
          management method used by other states to reduce program costs  
          and simplify enforcement.  In response, the smog station industry  
          contends that governmental oversight, management and regulation  
          of private businesses should stay with BAR and its public  
          employees.  The proposed contracting out functions are  
          duplicative of existing BAR staffing responsibilities and as such  
          are wasteful.  Industry further believes that privatizing this  
          government function will only increase costs to the smog check  
          program, which will be passed on to consumers, thus, recommend  
          its deletion from the bill.  

           OBD II  :  According to CARB, OBD II is an acronym for On-Board  
          Diagnostics II, the second generation of on-board  
          self-diagnostic equipment requirements for California vehicles.   
          On-board diagnostic capabilities are incorporated into the  
          hardware and software of a vehicle's on-board computer to  
          monitor virtually every component that can affect emission  








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          performance.  Standard equipment on 1996 and newer vehicles, the  
          electronic component allows smog technicians to plug into the  
          vehicle's computer and diagnose in-use driving vehicle emission  
          performance.  

          According to IMRC, with the exception of California and  
          Colorado, all states with federally- mandated smog check  
          programs have discontinued tailpipe, visual, and functional  
          testing for newer model-year vehicles, because they were deemed  
          not cost effective.  The U.S. Environmental Protection Agency  
          (USEPA) has supported OBD-only testing and testified before the  
          IMRC last year that it would agree with this approach in  
          California.  The primary advantages of OBD II-only testing are a  
          lower cost to the consumer and a more effective testing  
          procedure.  

          The California Automotive Business Coalition, writing in  
          opposition to this bill, indicates that "the vast majority of  
          vehicles in the State of California would instead only be  
          required to be tested using only the on-board diagnostic (OBD)  
          equipment of the vehicle.  The shift of vehicles away from  
          tailpipe testing requirements will erode the ability of existing  
          businesses to generate future income on their investments; and  
          could also deteriorate our state's air quality.  At a minimum,  
          there is significant dispute about the accuracy of OBD systems  
          to properly detect excess emissions."  

          Additionally, the Automotive Service Councils of California  
          (ASCCA), also in opposition to this bill, contends that "it may  
          be possible for "gross polluting" vehicles to pass smog check  
          under 
          AB 2289, since the tailpipe emissions testing would not be  
          required for vehicles 1996 or newer.  Although OBD II systems  
          have steadily improved over the years, concerns still remain with  
          faulty OBD systems in late 1990's and early 2000 vehicles passing  
          the OBD II portion of the test but still failing the tailpipe  
          emissions test.  Furthermore, oxides of nitrogen, or NOx, is a  
          key contributor to air pollution and is currently measured  
          through the tailpipe emissions test.  ASCCA recommends that OBD  
          II-only testing be performed on 2000 model year and newer  
          vehicles."  This bill provides BAR the authority to employ the  
          OBD II-only testing option on model year 2000 and newer vehicles.  
           

           Impact upon remaining fleet  :  According to CARB, eliminating  








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          tailpipe testing for the newer fleet would result in changes to  
          the current smog check equipment and practices within the  
          industry.  Even in 2008, the newer fleet (i.e., OBD II-equipped  
          vehicles) made up over 66% of all vehicles inspected, and the  
          percentage is growing every year.  The number of older cars in  
          the fleet that need a tailpipe test, on the other hand, will  
          continue to diminish over time.  At some point, tailpipe testing  
          volumes may be reduced to the point that it is impractical or  
          not cost effective to have tailpipe testing equipment at every  
          smog check station, and other infrastructure options would need  
          to be considered (e.g., tailpipe testing at a subset of  
          stations, allowing individual stations to opt in or out of  
          tailpipe testing from a business point of view, etc.).  
          Maintaining a tailpipe testing infrastructure, however, is a  
          vital element to the smog check program.  As the test-only  
          stations currently handle approximately 60% of smog inspections,  
          the impact upon that segment of the smog check industry could  
          result in the majority of those stations to be economically  
          unviable, according to the California Emissions Testing  
          Industries.  

           Sierra Research Report (March 2009)  :  CARB, in cooperation with  
          BAR, hired Sierra Research, Inc. to conduct an independent  
          research and analysis of the smog check program using data  
          collected from roadside inspections conducted in 2003-2006.  It  
          is believed that the study's findings spurred the need for smog  
          program changes, thus leading to the introduction of this bill.   
          The study compared roadside inspection results for 1976-95  
          (pre-OBD II) model year vehicles to the smog check inspection  
          results reported by smog check stations for these same vehicles.  
           Key findings from the study included:  

          1)Of the 1976-95 vehicles sampled, 19% of the vehicles initially  
            passed a tailpipe inspection at a licensed smog check station,  
            but failed a roadside audit inspection within a year.  

          2)The data also showed that 49% of the vehicles that failed a  
            roadside audit inspection had failed, and then subsequently  
            passed, a tailpipe inspection at a smog check station within  
            the past year.  

          To better address the extent to which improper and/or falsified  
          test results may be factors in the smog check program, the  
          report recommended corrective steps, some of which are  
          incorporated in this bill.  








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          Smog check equipment change - Transitioning from BAR-97 to  
          BAR-2012  :  Approximately 10,000,000 smog check inspections are  
          performed on motor vehicles each year in California.  Smog check  
          inspections are performed by approximately 7,300 licensed smog  
          check stations located throughout California.  Smog check  
          inspections are currently performed using a BAR-97 Emissions  
          Inspection System (EIS).  The BAR-97 EIS equipment is required  
          in all smog check stations located in enhanced areas, or  
          California's smoggiest regions.  The BAR-97 EIS tests vehicles  
          under simulated driving conditions to detect oxides of nitrogen,  
          hydrocarbons, and carbon monoxide emissions.  These are the  
          major chemical components of smog.  The equipment consists of a  
          5-gas analyzer, additional hardware, software, a fuel cap  
          tester, and a dynamometer with safety restraints.  The most  
          distinctive component of the equipment is the dynamometer, a  
          treadmill-like device that simulates driving conditions.   
          Originally certified by BAR in 1997/1998, the state's current  
          BAR-97 EIS units are more than 13 years old.  

          The BAR-2012 EIS Project is an information technology project to  
          procure the development of standardized state-owned software and  
          integrate that software with various equipment components of the  
          BAR-2012 EIS.  According to BAR, the current BAR-97 EIS relies  
          on older technology that cannot be easily updated to respond to  
          needed smog check program improvements.  The BAR-2012 EIS will  
          be flexible, scalable, and responsive to the demands for program  
          change and allow increased program effectiveness and efficiency.  
           BAR anticipates award of contract to develop the new equipment  
          on September 2010.  Furthermore, they expect a transition from  
          BAR-97 to BAR 2012 at the end of 2012.  Accordingly, to give  
          business some certainty in making informed business decisions,  
          this bill requires BAR to specify, in regulation, the  
          implementation date for the conversion of the new equipment.   
          Further, under current law, if equipment purchases are mandated  
          and exceed $10,000, BAR is required to submit recommendations to  
          the Governor and the Legislature for any appropriate mitigation  
          measures.  

           Enforcement issues  :  According to IMRC, problems identified in  
          the Sierra Research report indicate that current fines for  
          conducting improper smog check inspections fail to change  
          technician's behavior.  "When technicians are issued a citation  
          under current provisions of the Health and Safety Code, they are  
          only required to undergo additional training.  They pay no  








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          monetary fine.  Unfortunately, this training appears to have  
          little impact since almost 50% of the inspections conducted on  
          vehicles that originally failed appear to have been performed  
          improperly.  Further, although BAR's enforcement division  
          identifies stations and technicians that fail to perform in this  
          area, the penalties, as specified in statute, are too small to  
          change their poor behavior.  Therefore, BAR needs a statutory  
          change that will increase penalties in order to change poor and  
          fraudulent behavior."  This bill increases and expands existing  
          fines and penalties for violations committed by smog station  
          owners, technicians, and customers.  

           Annual report  :  On an on-going basis, BAR conducts random  
          roadside audits (smog tests) on vehicles.  The results from  
          these inspections are used to evaluate the performance of the  
          smog check program in achieving Clean Air Act requirements.   
          This bill requires that the results of these audits be evaluated  
          and reported annually, beginning July 1, 2011.  This bill also  
          requires approval by the Legislature, through enactment of  
          statute, prior to the implementation of any report  
          recommendation pertaining to contracting out the management of  
          the smog check program.  

           REGISTERED SUPPORT / OPPOSITION  :   

           Support 
           
          California Air Resources Board (co-sponsor)
          California Department of Consumer Affairs/
          Bureau of Automotive Repair (co-sponsor)
          American Lung Association in California  
          Breathe California  
          California Council for Environmental and Economic Balance  
          Clean Power Campaign  
          National Parks Conservation Association  
          Natural Resources Defense Council  
          Planning and Conservation League  
          South Coast Air Quality Management District
          Union of Concerned Scientists

           Opposition 
           
          Automotive Service Councils of California  
          California Automotive Business Coalition  
          California Emissions Testing Industries








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          Clean Air Performance Professionals  
           

          Analysis Prepared by  :   Ed Imai / TRANS. / (916) 319-2093