BILL ANALYSIS Ó SENATE TRANSPORTATION & HOUSING COMMITTEE BILL NO: AB 462 SENATOR MARK DESAULNIER, CHAIRMAN AUTHOR: B. Lowenthal VERSION: 6/7/11 Analysis by: Carrie Cornwell FISCAL: no Hearing date: June 14, 2011 SUBJECT: Vehicle registration surcharge: air districts DESCRIPTION: This bill allows an air district to use vehicle registration surcharge revenues to replace natural gas fuel tanks and to enhance natural gas fueling dispensers. ANALYSIS: Existing law establishes a basic vehicle registration fee of $34, plus a $22 surcharge for additional personnel for the California Highway Patrol, and authorizes local agencies to impose separate vehicle registration fee surcharges in their respective jurisdictions for a variety of special programs, including authorizing a local air district, until January 1, 2015, to levy a surcharge of up to $6 on registration fees of motor vehicles registered within that district. After January 1, 2015 the maximum surcharge that an air district may levy is reduced to $4 per registered vehicle. An air district may only impose the fee if the district board adopts a resolution providing for both the fee and a corresponding program for the reduction of air pollution from motor vehicles in order to meet its obligation under the California Clean Air Act of 1988. Upon request from an air district, the Department of Motor Vehicles (DMV) collects these fees upon renewal of a vehicle's registration and, after deducting up to one percent of the fees for administrative costs it incurs, distributes the remaining revenues to the air district based upon the amount of fees collected from motor vehicles registered within that district. Under existing law, revenue from the first $4 of the $6 surcharge must be used to reduce air pollution from motor vehicles and to carry out related planning, monitoring, AB 462 (B. LOWENTHAL) Page 2 enforcement, and technical studies necessary to implement the California Clean Air Act of 1988. Revenue from the next $2 may only be used to implement the following programs that the district determines remediate air pollution harms created by motor vehicles on which the surcharge is imposed: The purchase of new school buses pursuant to the Lower-Emission School Bus Program adopted by the Air Resources Board (ARB). Projects eligible for grants under the Carl Moyer Memorial Air Quality Standards Attainment Program. The purchase, retrofit, repower, or addition of equipment for previously unregulated agricultural sources of air pollution that become subject to regulation, but only until the compliance date of the regulation. An accelerated vehicle retirement or repair program adopted by ARB. This bill : 1.Adds two projects to the list of programs that an air district may fund using the last $2 of the $6 vehicle registration surcharge: The replacement of onboard natural gas fuel tanks on school buses owned by a school district that are 14 years of age or older, not to exceed $20,000 per bus. The enhancement of natural gas fueling dispensers operated by a school district with a one-time funding amount not to exceed $500 per dispenser. 1.Ensures that should it and AB 470 both get enacted that the second bill enacted will not chapter out the first. COMMENTS: 1.Purpose . According to the sponsor, the South Coast Air Quality Management District, entities within its jurisdiction have purchased about 1,400 alternative fuel school buses, primarily powered by compressed natural gas (CNG), through the ARB's Lower-Emission School Bus Program. The fuel tanks on AB 462 (B. LOWENTHAL) Page 3 these buses have a useable life of 15 years. About 200 of these CNG school buses will reach the end of their 15-year fuel tank lifespan by 2011-12. The fuel tanks in 100 to 150 additional buses will also reach the end of their useable lives each year thereafter. The price for purchasing a new bus is approximately $169,000, whereas the replacement of fuel tanks costs approximately $20,000 per bus and will extend the life of the bus another 10 to 15 years. This bill allows local funds to be used for the replacement of fuel tanks for CNG buses that are 14 or more years old, regardless of how a school district originally paid for their purchase. This will enable air districts to extend the useful life of these cleaner, alternative-fueled buses, relieve public school districts from significant replacement costs, and protect public health and safety. 2.Clarifying amendment . This bill amends the code section that generally authorizes air districts to levy a vehicle registration surcharge to help fund districts' efforts to meet the California Clean Air Act standards, but the Sacramento Air Quality Management District has a separate authorization in a different code section. The committee may wish to consider amending this bill to make the same changes to this other code section in order to clarify that the Sacramento Air Quality Management District has this authority, as well. 3.Related legislation . AB 470 (Halderman) allows these air districts to use these same vehicle registration surcharge revenues for the retrofit of existing school buses. Also on today's agenda in the Senate Transportation and Housing Committee. 4.Refer to Rules . As noted above, this bill is similar to and amends the same section of the Health and Safety Code as AB 470, which is also on today's agenda. AB 470, however, has a second referral to the Environmental Quality Committee and this bill does not. Therefore, should this bill pass the committee today, the motion should be to pass and re-refer the bill to the Rules Committee, so that the Rules Committee may consider referring this bill to the Environmental Quality Committee. Assembly Votes: Floor: 58-1 Trans: 12-0 AB 462 (B. LOWENTHAL) Page 4 POSITIONS: (Communicated to the Committee before noon on Wednesday, June 8, 2011) SUPPORT: South Coast Air Quality Management District (sponsor) American Lung Association Bay Area Air Quality Management District California Air Pollution Control Officers Association California Association of School Transportation Officials California Council for Environmental and Economic Balance California School Boards Association California School Employees Assocation Coalition for Clean Air Colton Joint Unified School District Desert Sands Unified School District Los Angeles Unified School District Natural Resources Defense Council Planning and Conservation League Public Transportation Cooperative San Diego Gas & Electric Company Sempra Energy Utilities Southern California Gas Company Union of Concerned Scientists West County Transportation Agency OPPOSED: None received.