BILL ANALYSIS                                                                                                                                                                                                    

                   Senate Appropriations Committee Fiscal Summary
                           Senator Christine Kehoe, Chair

                                           435 (Pavley)
          Hearing Date:  4/27/09          Amended: 4/13/09
          Consultant: Mark McKenzie       Policy Vote: T.&H. 7-3
          BILL SUMMARY:   SB 435 would, commencing January 1, 2012,  
          require the Bureau of Automotive Repair (BAR) to include  
          specified motorcycles in the biennial smog check program.
                            Fiscal Impact (in thousands)

           Major Provisions         2009-10      2010-11       2011-12     Fund
          Smog check expansion                          ($1,017)  Special*
          (revenue gains)        full-year revenues of over $2,000  
                                 beginning in 2012-13 (see staff comments)

          BAR program costs                                       
          -Administration                   $200        $400-$500 Special*
          -Consumer Assistance Pr.                                 
                                 annual repair/retirement costs of about 
                                 $1,000 beginning in 2012-13 (see staff  

          DMV administration                $430        $370       
          * Vehicle Inspection and Repair Fund (VIRF)
          ** High Polluter Repair or Removal Account (HPRRA)
          *** Motor Vehicle Account

          STAFF COMMENTS: This bill meets the criteria for referral to the  
          Suspense File.
          Existing law requires motor vehicles, with specified exceptions,  
          to undergo a biennial smog inspection, administered by BAR, to  
          measure motor vehicle-related pollutants.  As a condition of  
          initial registration, upon change of ownership, and renewal of  


          vehicle registration, the vehicle owner must submit to the  
          Department of Motor Vehicles (DMV) a valid certificate of  
          compliance indicating that the vehicle has passed its smog  
          inspection.  Existing law exempts motorcycles from smog check  
          requirements until BAR implements test procedures applicable to  
          motorcycles.  DMV defines a motorcycle as any vehicle with no  
          more than three wheels, weighing 1500 pounds or less, with an  
          engine displacement of over 150 cubic centimeters (cc).

          SB 435 would, commencing January 1, 2012, require BAR to include  
          model-year 2000 and newer Class III motorcycles (280 cc or  
          greater) in the biennial smog check program.  The bill would  
          also require BAR, in consultation with the California Air  
          Resources Board (ARB), to develop regulations by July 2, 2011  
          for incorporating motorcycles into the smog check program.   
          Motorcycles subject to inspection shall be tested using  
          procedures determined to be appropriate by BAR in consultation  
          with ARB.
          Page 2
          SB 435 (Pavley)

          As of March 31, 2009 there were approximately 575,000 registered  
          motorcycles with a model year of 2000 or newer.  DMV does not  
          have the ability to determine how many of these are classified  
          Class III motorcycles because their records do not currently  
          track engine size.  This may result in implementation challenges  
          for DMV to identify owners of Class III motorcycles for  
          notification of the new smog check inspection requirements.  

          The ARB estimates that as of October of 2008 there were  
          approximately 493,000 motorcycles that would be subject to the  
          requirements of this bill.  Since an inspection would occur  
          every two years, SB 435 would integrate an additional 246,500  
          motorcycles into the smog check program each year.  Based on an  
          $8.25 certificate fee for each inspection, this bill would  
          generate $2,033,625 in revenue annually to the Vehicle  
          Inspection and Repair Fund beginning January 1, 2012.  BAR would  
          incur one-time costs for development and adoption of regulations  
          and procedures for smog check inspection of motorcycles,  
          equipment for the state's 36 referee centers, and ongoing  
          staffing costs for administration of the program.  At the time  
          of this analysis, BAR had not yet completed an assessment of the  
          costs and revenues associated with this bill.  Staff estimates  
          BAR's administrative costs to be approximately $200,000 in  
          2010-11, with ongoing costs in the range of $400,000 to $500,000  
          annually.  Assuming motorcycles would be eligible for the  


          Consumer Assistance Program (CAP), there would also be increased  
          costs to the repair assistance and vehicle retirement options of  
          the CAP.  These costs are not currently available, but would  
          depend upon the number of vehicles that fail inspections, the  
          number of motorcycle owners who qualify for participation in  
          CAP, average vehicle repair or retirement costs, and BAR's  
          administrative overhead.  Staff estimates the overall CAP costs  
          to be in the range of $1 million annually beginning in 2012.

          DMV would incur one-time programming costs of approximately  
          $430,000 to alter the vehicle registration process to track  
          motorcyles for smog check notification.  Ongoing DMV  
          administrative costs would be in the range of $370,000 if  
          246,500 vehicles are subject to inspection every year.  DMV  
          costs are typically reimbursed by BAR from smog certificate fees  
          (Vehicle Inspection and Repair Fund) pursuant to a Memorandum of  

          SB 435 would require ARB to work with BAR in the adoption of  
          regulations to implement the inclusion of motorcycles into the  
          smog check program, and in the determination of appropriate  
          procedures for inspection of motorcycles.  ARB estimates that  
          costs to consult with BAR would be minor and absorbable.