BILL ANALYSIS Ó SENATE TRANSPORTATION & HOUSING COMMITTEE BILL NO: AB 470 SENATOR MARK DESAULNIER, CHAIRMAN AUTHOR: halderman 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 revenue received from a surcharge on motor vehicle registrations within its jurisdiction to fund the retrofit of school bus emission equipment pursuant to the lower-emission school bus program. 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 470 (HALDERMAN) 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 allows an air district to use revenue from the $2 surcharge on vehicle registration to fund retrofit of emission control equipment for existing school buses, in addition to the purchase of new buses, pursuant to the Lower-Emission School Bus program. This bill also ensures that should it and AB 462 both get enacted, the second bill signed will not chapter out the first. COMMENTS: 1.Purpose . Current law allows districts throughout the state to impose a surcharge on motor vehicle registration to pay for a number of air quality projects, including the purchase of new buses under the Lower-Emission School Bus Program. The goal of this program is to reduce the exposure of school children to the harmful effects of school bus exhaust. Because existing law only allows air districts to use their registration surcharge funds to purchase new buses, the author argues that it limits maximum participation in the Lower-Emission School Bus Program. In order to offer cost savings alternatives, the author introduced this bill to grant school districts the ability to retrofit the emissions control equipment on existing school buses. 2.Lower-Emission School Bus Program . The primary goal of the AB 470 (HALDERMAN) Page 3 ARB's Lower-Emission School Bus Program is to reduce school children's exposure to both cancer-causing and smog-forming pollution by, as a first priority, replacing buses manufactured prior to 1977 (no match funds required). The program provides grant funding for new, safer school buses and to put air pollution control equipment (i.e., retrofit devices) on buses that are already on the road. ARB staff, in coordination with the California Energy Commission and local air pollution control districts, has developed guidelines for implementation of the program. For buses of model years 1977-1986, the guidelines allow program funds along with a match to pay to replace buses. For middle-aged buses from 1987 model year and newer, the guidelines allow program funds, again with a match, to pay for emission control retrofits. 3.Opposition . The School Transportation Coalition opposes this bill because of concerns with retrofitting school buses through the lower-emission school bus program. As it currently stands, the lower-emission school bus program provides for both replacement and retrofits of buses. This bill mirrors that, but the opponent would prefer that the bill give air districts even more discretion on how to spend vehicle registration surcharge revenues. 4.Related legislation . AB 462 (B. Lowenthal) allows these air districts to use these same vehicle registration surcharge revenues for the replacement of gas tanks and fueling infrastructure for natural gas powered school buses. Also on today's agenda in the Senate Transportation and Housing Committee. 5.Double-referral . The Rules Committee referred this bill to both the Transportation and Housing Committee and to the Environmental Quality Committee. Therefore, if this bill passes this committee, it will be referred to the Committee on Environmental Quality. Assembly Votes: Floor: 71-0 Trans: 12-0 POSITIONS: (Communicated to the Committee before noon on Wednesday, June 8, 2011) AB 470 (HALDERMAN) Page 4 SUPPORT: Bay Area Air Quality Management District California Air Pollution Control Officers Association OPPOSED: School Transportation Coalition