BILL ANALYSIS
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|Hearing Date:June 21, 2010 |Bill No:AB |
| |2289 |
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SENATE COMMITTEE ON BUSINESS, PROFESSIONS
AND ECONOMIC DEVELOPMENT
Senator Gloria Negrete McLeod, Chair
Bill No: AB 2289Author:Eng
As Amended:May 28, 2010 Fiscal: Yes
SUBJECT: Smog check program: testing: penalties.
SUMMARY: Revises and recasts elements of the current biennial
inspections of vehicle emission control equipment and systems (smog
check) program, and establishes new industry operating performance
standards and technology upgrades.
Existing law:
1)Requires, generally, gasoline and diesel-fueled vehicles that are
registered in nonattainment areas for ozone or carbon monoxide
pollutant emissions to undergo smog check. Authorizes Department of
Consumer Affairs, Bureau of Automotive Repair (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
California Air Resources Board (ARB). Establishes, until January 1,
2013, the Inspection and Maintenance Review Committee Inspection and
Maintenance Review Committee (IMRC) to review the BAR and ARB joint
evaluation plan 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
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civil penalties for the violations.
5)Requires BAR to submit recommendations to the Governor and the
Legislature for any appropriate mitigation measures, if existing
smog check stations are required to make additional investments of
more than $10,000 in order to participate in the enhanced program,.
6)Establishes a citation structure by which BAR may establish penalties
for a licensed smog check station, a test-only station contractor,
or a fleet owner who has violated the laws. The citation shall
specify the nature of the violation and may assess a civil penalty.
7)Authorizes BAR to issue a citation to a smog check technician who has
violated specified laws or regulations. The citation shall specify
the nature of the violation and provides for progressive penalties
as follows:
a) First citation : The smog check technician shall successfully
complete one or more retraining courses prescribed by BAR.
b) Second citation : The smog check technician shall successfully
complete one or more retraining courses prescribed by BAR, and
the technician shall perform inspections or repairs under the
direction of a technician in good standing.
c) Third citation : The smog check technician shall successfully
complete an advanced retraining course prescribed by BAR and
shall perform no inspection or repair until completion.
d) Fourth citation : The smog check technician's qualification
may be permanently revoked.
8)Establishes a fine structure of various amounts for specified
violations of the law, up to a maximum of $2,500.
9)Provides that any person who obtains or attempts to obtain a repair
cost waiver, or economic hardship extension by falsifying
information shall be subject to a civil penalty of not less than
$150 and not more than $1,000,
This bill:
1)States legislative intent that the BAR work with the California
Community Colleges and other training institutions to identify
funding mechanisms that encourage the development of innovative
programs that respond to industry demands for automotive
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technicians.
2)Establishes January 1, 2013, as the date for which new testing
procedures are authorized for the test-only smog facilities.
Authorizes BAR, in consultation with the ARB, to also select other
vehicles for testing in order to meet federal emission reduction
performance standards.
3)Authorizes an alternative smog check test method and corresponding
test equipment for the year 2000, and newer motor vehicles equipped
with second generation on-board diagnostic systems (OBD II).
4)Authorizes BAR to establish inspection-based performance standards
and requires vehicles that cause most of the pollution or directed
vehicles, as specified, to have smog checks performed by stations
that meet high performance standards.
5)For test-only stations, requires BAR to automatically suspend
operations when the test-only station fails the inspection-based
performance standards. Establishes the following suspension and
appeal procedures:
a) Requires BAR to provide the test-only station with notice,
written or electronic, of any suspension within 24 hours of the
suspension.
b) A test-only station whose certification has been suspended may
apply in writing to BAR within 30 days after the date of
suspension for a hearing to contest the evidence supporting the
suspension.
c) BAR shall set the matter for a hearing within 30 days of
receipt of the written request.
6)Provides that a test-only station not meeting the performance
standards may continue to issue certificates of compliance and
noncompliance for other vehicles that are not directed or high
polluting vehicles.
7)Establishes that the criteria for the inspection-based performance
standards is the same for all smog check facilities. If deemed
feasible by BAR, establishes that performance standards also apply
to smog check technicians. Requires BAR, if the performance
standards are established, to provide to smog check stations and
technicians, no later than January 1, 2012, a preliminary report on
their performance.
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8)Prohibits a test-only facility from referring a vehicle owner to a
specific vehicle repair facility in which the owner of the test-only
facility has also a financial interest in the vehicle repair
facility.
9)Revises the existing procedures for the provision of referees by BAR.
Requires referees to make inspections of specially constructed
vehicles, as defined. Authorizes referees to promote automotive
training through community colleges and other training institutions
certified by BAR. Authorizes referees to charge a fee sufficient to
cover the costs of providing referee services, as specified.
10)Requires an annual evaluation of the performance of the smog check
program by BAR, in cooperation with the ARB, 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 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), above.
e) A best-efforts explanation regarding the reasons vehicles
inappropriately failed or passed an inspection.
f) Recommended changes to the smog check program. Requires
authorization by the Legislature, through enactment of statute,
prior to implementing any recommendations on contracting out the
management of smog check stations.
g) A comparison to the findings of the report "Evaluation of the
California Smog Check Program Using Random Roadside Data" dated
March 12, 2009.
11)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
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any other provider of certified equipment or service.
12)Prohibits BAR from requiring smog check stations to use the new
certified equipment earlier than January 1, 2013.
13)Clarifies, should existing smog check station equipment upgrades
cost more than $10,000, that BAR would be required to submit
recommendations to the Governor and the Legislature for any
appropriate mitigation measures, including and not limited to
subsidies, equipment leases, grants, or loans. Extends the
provisions also to certified training institutions.
14)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. Requires, in
assessing civil penalties, that due consideration be provided to
certain factors as specified.
15)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.
16) Establishes a new civil penalty for any person who obtains or
attempts to obtain a smog certificate by falsifying information at
not more than $5,000.
FISCAL EFFECT: The Assembly Appropriations Committee analysis, dated
May 21, 2010, indicates: (1) Annual costs to DCA, ranging from
$350,000 to $450,000, to develop new Smog Check standards, certify
test stations that meet higher standards, enforce compliance, and
collect, analyze and publish data (VIRF); (2) Minor, absorbable costs
to ARB to consult with DCA.
COMMENTS:
1.Purpose. This bill is sponsored by the Department of Consumer
Affairs' Bureau of Automotive Repair (BAR) and the Air Resources
Board (ARB) who believes the bill will achieve cleaner, healthier
air by using better technology to diagnose and address vehicle
emissions problems; through monitoring of station performance,
directing vehicles to higher performing stations for proper repair,
and encouraging better and innovative training for technicians. The
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Sponsors state that cleaner air saves lives, reduces adverse effects
on children and the elderly as well as particular populations, and
reduces time lost and money spent on associated medical treatment
and medication. The Sponsors believe the bill will save consumers
money, save time, and provide greater air quality from the state's
smog check program, which is administered by BAR.
The Author contends that this bill is designed to 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 stations 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/ARB 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.
2.Background.
a) 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.
b) On-Board Diagnostics (OBD II) . OBD II is the second
generation of on-board self-diagnostic equipment requirements for
California vehicles. OBD II does not test exhaust; but instead,
this system monitors multiple systems in the vehicle and checks a
vehicle's computer-controlled emissions systems and components to
ensure that no malfunction exists that would cause an increase in
emissions. OBD II is installed on most 1996 and newer passenger
cars and light duty trucks. 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,
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all states with federally- mandated smog check programs have
discontinued tailpipe, visual, and functional testing for newer
model-year vehicles, because they were 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 follows that recommendation and provides BAR the
authority to employ the OBD II-only testing option on model year
2000 and newer vehicles.
c) Impact Upon Remaining Fleet. According to ARB, eliminating
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
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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.
3.Sierra Research Report (March 2009). ARB, 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. Findings from the study included:
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.
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.
1.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
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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
awarding a 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 prohibits BAR from requiring
the use of the new equipment prior to January 1, 2013. Further,
under current law, if equipment purchases are mandated and exceed
$10,000 in costs, BAR is required to submit recommendations to the
Governor and the Legislature for any appropriate mitigation
measures. This bill expands those mitigation measures and also
includes cost considerations for certified training institutions.
2.Enforcement Issues: Increased Fines and Penalties. 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
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.
3.Annual Report Required. 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
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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.
4.Funding for Technician Training Programs. Currently, the California
community colleges and private institutions provide smog check
training for technicians. The community colleges also provide the
basic source of referees to mediate smog check compliance issues.
This bill establishes intent language that directs BAR to work with
the colleges to identify funding options for the development of
innovative vehicle technician training programs.
5.Arguments in Support. The Air Resources Board (ARB) and the
Department of Consumer Affairs, Bureau of Automotive Repair (BAR) in
sponsoring the bill writes that when implemented, AB 2289 has the
capability to remove approximately 70 tons of pollution from the air
daily, the equivalent of taking 800,000 cars off the road every day.
ARB indicates that a study by Sierra Research shows that 49% of
1996 model vehicles failed roadside audits after having received a
passing smog check inspection. These vehicles comprise 25% of the
California fleet, and are responsible for an estimated 70 tons of
harmful emissions per day. By directing BAR and ARB to rank the
performance of smog check stations, and vehicles most likely to need
repairs will be referred the high performing stations. The bill
streamlines the enforcement process for disciplining stations with
violations, and improves consumer convenience by authorizing the use
of on-board diagnostic systems instead of dynamometer for smog
checks. Thirty one other states already conduct inspections based
on on-board diagnostics, which takes half the time and costs about
half as much as California consumers typically pay. The Sponsors
state that these streamlined procedures could apply to 75% of the
California passenger vehicle fleet (model 2000 and newer vehicles).
6.Arguments in Opposition. The California Emission Testing Industries
Association (CETIA) representing test-only vehicle emissions
inspection stations in California opposes the bill, arguing that the
bill will cause the loss of 2,200 small businesses and the loss of
5,400 jobs with an annual economic impact of $216,000,000. CETIA
suggests that the information and data in the recent Sierra Research
study has been mischaracterized to place program failure at the feet
of the industry, but a casual read of the study would clearly place
a large measure, if not all, of the programmatic problems at the
feet of the responsible regulatory agencies.
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CETIA states that without amendments, AB 2289 would have catastrophic
economic impact on the Test-Only Industry and its employees.
"Test-Only Stations were created by the Legislature, with both
privileges and restrictions in market, to provide the most critical
tenant of the Smog Check Program; the separation of the Test from
the Repair. Test Only Station Owners have made a substantial
business investment in equipment and facilities, established
business models within the criteria of legislation. AB 2289 will
end the core requirement the test be separate from the repair
thereby returning to the previous smog check station practice that
enables the testing facility to also repair a failing vehicle."
CETIA recommends the following amendments to the bill : (1) Effective
January 1, 2011, authorize test-only stations facilities to hold
ownership of both test and repair and gold shield stations. (2)
Remove language to provide BAR with authority to shut down a station
after 24-hour notice without an administrative hearing. For
test-only station owners, the immediate suspension of privileges in
market would have immediate and disastrous economic impact. CETIA
believes that as written, this provision has the potential to cause
the loss of businesses whether they have violated state law or not.
(3) Include language to protect the directed vehicle program for
test-only and gold shield stations. Without the directed vehicle
program, test only stations would not be economically viable and
able to participate in the new program. Additionally, by removing
the incentive for test and repair stations to participate in the
gold shield program, participation in that program would erode,
negatively impacting low-income Californians. BAR shall not expand
the directed vehicle program to include Test & Repair stations
without legislative approval. (4) Include a mutual settlement
agreement for resolving enforcement violation citations. CETIA
states that mutual settlement agreements, are implemented by most of
the Air Districts, and have proven effective and reduced enforcement
costs by 20% and shortened the time line for disciplinary actions.
(5) Require annual testing for all vehicles model year 1995 and
older. It is these vehicles that contribute 75% of California's
mobile source emissions.
Clean Air Performance Professionals (CAPP) opposes the bill and
requests the bill be amended to include an in-field vehicle repair
audit program. CAPP believes an in-field vehicle repair audit
program would create maximum vehicle owner satisfaction, and
provide a mechanism for continuous improvements in how vehicles are
repaired so that customers will be better satisfied with repairs
made under the smog check program. CAPP says that presently fear
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of loss of license or legal sanctions is a barrier to improving the
quality of vehicle repairs. CAPP argues that such a program would
improve quality and productivity in vehicle repairs and result in
emission reductions, as mandated under California's emissions
inspection and maintenance program.
NOTE : Double-referral to Transportation and Housing Committee
(second.) Any amendments to this bill taken in BP&ED should be made
in T&H.
SUPPORT AND OPPOSITION:
Support:
Department of Consumer Affairs, Bureau of Automotive Repair
(Sponsor)
Air Resources Board (Sponsor)
American Lung Association in California
Bay Area Air Quality Management District
Breathe California
California Air Pollution Control Officers
California Council for Environmental and Economic Balance
Clean Power Campaign
Consumer Federation of California
Environmental Defense Fund
National Parks Conservation Association
Natural Resources Defense Council
Planning and Conservation League
Sierra Club California
South Coast Air Quality Management District
Union of Concerned Scientists
Opposition:
Automotive Service Councils of California
California Automotive Business Coalition
California Emissions Testing Industries
Clean Air Performance Professionals
Consultant:G. V. Ayers
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