BILL ANALYSIS Ó SB 359 Page 1 SENATE THIRD READING SB 359 (Corbett) As Amended September 6, 2013 Majority vote SENATE VOTE :Vote not relevant NATURAL RESOURCES APPROPRIATIONS (vote not relevant) (vote note relevant) SUMMARY : Loans $30 million from the Vehicle Inspection and Repair (Smog Check) Fund to the Air Resources Board (ARB) to support the Clean Vehicle Rebate Project (CVRP) and Hybrid and Zero-Emission Truck and Bus Voucher Incentive Program (HVIP). Specifically, this bill : 1)Appropriates $30 million from the Air Quality Improvement Fund (AQIF) to ARB for the CVRP and HVIP. 2)Requires the Controller, upon the order of the Director of Finance, to loan $30 million to the AQIF from the Smog Check Fund. Requires the loan to be repaid with interest by June 30, 2016. FISCAL EFFECT : Appropriates $30 million from AQIF, loans $30 million from the Smog Check Fund to the AQIF. COMMENTS : CVRP and HVIP are the two major components of the Air Quality Improvement Program (AQIP), administered by ARB pursuant to the California Alternative and Renewable Fuel, Vehicle Technology, Clean Air, and Carbon Reduction Act of 2007 [AB 118 (Núñez), Chapter 750, Statutes of 2007]. AQIP provides financial incentives for public and private groups and individuals to adopt smog and diesel particulate pollution reducing technology that concurrently reduces greenhouse gas (GHG) emissions. AQIP funds projects that reduce criteria air pollutants, improve air quality, and provide research for alternative fuels and vehicles, vessels, and equipment technologies. AQIP is funded by temporary surcharges established by AB 118 on smog abatement fees, boat registration fees, and special identification plate fees and receives between $30-36 million per year. Per the terms of AB 118, these surcharges expire January 1, 2016. They are proposed for SB 359 Page 2 extension until January 1, 2024, by two pending bills, AB 8 (Perea) and SB 11 (Pavley) of the current legislative session. Since 2009, ARB has spent approximately $126 million on AQIP programs, with $49.7 million going to CVRP and $64.4 million to hybrid and zero emission truck and bus vouchers. This bill would supplement CVRP and HVIP funding in the current budget year by borrowing $30 million from the Smog Check Fund, which is funded by the $8.25 administrative fee collected from vehicle owners when they undergo a Smog Check. Under current law, the fee funds research and development operations, engineering, administration, complaint mediation, enforcement, and public education necessary to run the Smog Check program. Analysis Prepared by : Lawrence Lingbloom / NAT. RES. / (916) 319-2092 FN: 0002640