BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                            



           ----------------------------------------------------------------- 
          |SENATE RULES COMMITTEE            |                        SB 459|
          |Office of Senate Floor Analyses   |                              |
          |1020 N Street, Suite 524          |                              |
          |(916) 651-1520         Fax: (916) |                              |
          |327-4478                          |                              |
           ----------------------------------------------------------------- 
           
                                           
                                    THIRD READING


          Bill No:  SB 459
          Author:   Pavley (D)
          Amended:  4/25/13
          Vote:     21


           SENATE TRANSPORTATION & HOUSING COMMITTEE  :  10-0, 4/23/13  
           AYES:  DeSaulnier, Beall, Cannella, Galgiani, Hueso, Lara, Liu,  
            Pavley, Roth, Wyland
          NO VOTE RECORDED:  Gaines
           
          SENATE APPROPRIATIONS COMMITTEE  :  4-0, 5/23/13  
           AYES:  De León, Walters, Hill, Padilla
          NO VOTE RECORDED:  Gaines, Lara, Steinberg


           SUBJECT  :    Smog check:  vehicle repair assistance and  
          retirement program

           SOURCE  :     Author


           DIGEST  :    This bill establishes a one-year pilot program to  
          help low-income vehicle owners retire high-polluting vehicles.

           ANALYSIS  :    Existing law establishes the Motor Vehicle  
          Inspection Program, commonly known as the smog check program.   
          The Department of Consumer Affairs (DCA) administers this  
          program through the Bureau of Automotive Repair (BAR).  The smog  
          check program generally requires vehicle owners to have their  
          vehicles tested every two years, with some exceptions including  
          gas-powered vehicles manufactured prior to 1976,  
          alternatively-fueled vehicles, and vehicles six years or newer.
                                                                CONTINUED





                                                                     SB 459
                                                                     Page  
          2


          If a vehicle fails a smog check, the owner must, in most cases,  
          repair the vehicle and pass a subsequent smog check in order to  
          register a vehicle or renew its registration.  A vehicle owner  
          whose vehicle fails a smog test can obtain financial assistance  
          through the Consumer Assistance Program (CAP), administered by  
          the BAR.  CAP provides three options:

           1.Repair cost waiver  .  A repair cost waiver allows a vehicle  
            owner to register the vehicle for two years even if it fails  
            the smog test.  In order to qualify for the waiver, the owner  
            must spend at least $450 on repairs.  Low-income vehicle  
            owners (defined as those with household income at or below  
            185% of the federal poverty level) qualify if the repair  
            estimate exceeds $250.

           2.Repair cost assistance  .  Vehicle owners who are current on  
            their vehicle registration fees and whose vehicle has failed a  
            smog test qualify for $500 toward emission-related repairs.   
            In addition, the owner's income must be at or below 225% of  
            the federal poverty level and the owner cannot have previously  
            received CAP assistance for the same vehicle.

           3.Vehicle retirement  .  If a vehicle has failed a smog test, the  
            owner may apply for up to $1,500 (household income at or below  
            225% of the federal poverty level) or $1,000 (all other  
            individuals) towards a replacement vehicle.  The vehicle must  
            be currently registered as operable, with registration paid,  
            and:

             A.   Have been continuously registered for two years prior to  
               application; or

             B.   Registered as non-operational for a maximum of 60 days  
               during the prior two years, occurring at least 90 days  
               prior to application; or

             C.   Have had lapsed registration for less than 121 days  
               during prior two years, provided the vehicle is registered  
               for at least 90 days prior to application.

          Under this program, the owner takes the BAR approval letter to a  
          BAR-approved vehicle dismantler, who destroys the vehicle and  
          issues the owner a check.

                                                                CONTINUED





                                                                     SB 459
                                                                     Page  
          3


          Existing law requires DCA, in consultation with the Air  
          Resources Board (ARB), to disseminate information about the smog  
          check program.  Statute permits DCA to accomplish this through  
          advertisements in various media and by using grass roots  
          community networks including local opinion leaders, churches,  
          the PTA, the workplace, and directs the program to identify  
          target populations through "extensive market research."

          Existing law also establishes the Enhanced Fleet Modernization  
          Program (EFMP), administered by the ARB in consultation with BAR  
          for vehicle retirement, and in consultation with local air  
          districts for vehicle replacement.  This program provides for  
          the voluntary retirement of passenger vehicles and light- and  
          medium-duty trucks that are high polluters.  Under this program,  
          a vehicle owner whose vehicle has failed a smog check may apply  
          to BAR for vehicle retirement assistance; BAR determines whether  
          the owner is eligible for CAP or EFMP (or neither).

          This bill:

          1.Authorizes DCA to provide "other forms of financial  
            assistance" for voluntary retirement of gross-polluting  
            vehicles under CAP.

          2.Requires DCA to establish by July 1, 2014, a one-year pilot  
            program to help low-income vehicle owners voluntarily retire  
            gross-polluting vehicles.

          3.Prohibits DCA from requiring proof of registration for the  
            last two years prior to accepting a vehicle into the pilot  
            program, instead allows an owner to reasonably demonstrate  
            that the car has been operated primarily in the state for the  
            past two years.

          4.Provides reasonable demonstration of operation of the vehicle  
            in the state is met by either of the following:

             A.   Proof of car insurance in the state for the last two  
               years; or

             B.   An invoice showing the vehicle identification number for  
               repairs or maintenance during the last two years and proof  
               of the vehicle owner's residence in the state during the  

                                                                CONTINUED





                                                                     SB 459
                                                                     Page  
          4

               last two years.

          1.Requires DCA, before January 1, 2016, to report to the  
            Legislature and the Governor the number of vehicles retired  
            under this program.

          2.Adds car dealerships to the list of entities BAR may use in  
            dissemination of its public information program.

          3.Requires DCA to engage in multilingual outreach to underserved  
            communities regarding the vehicle retirement program.





           Previous Legislation
           
          AB 787 (Hill, Chapter 231, Statutes of 2010), authorized BAR to  
          pay up to $1,500 to a low-income individual and up to 1,000 to  
          any other individual who retires his/her vehicle under the smog  
          check program or EFMP.

          AB 823 (Hill, 2009), which Governor Schwarzenegger vetoed, would  
          have limited eligibility for financial assistance under CAP to  
          low-income individuals, defined as a vehicle owner whose income  
          does not exceed 225% of the federal poverty level.

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes    
          Local:  No

          According to the Senate Appropriations Committee:

                 Estimated costs to the BAR of approximately $100,000 to  
               adopt regulations to implement the pilot program that  
               allows other forms of proof of historical vehicle operation  
               (High Polluter Repair and Removal Account - HPPRA).

                 Pilot program vehicle retirement costs of approximately  
               $1 million, assuming participation by an additional 700  
               low-income vehicle owners (HPPRA).

                 BAR administrative costs of $28,646 annually to engage  
               in enhanced outreach to underserved communities.

                                                                CONTINUED





                                                                     SB 459
                                                                     Page  
          5


           SUPPORT  :   (Verified  5/23/13)

          American Lung Association
          Asian Pacific Environmental Network
          Breathe California
          California Council for Environmental and Economic Balance
          Consumer Action
          Consumer Federation of California
          Consumers for Auto Reliability and Safety
          Greenlining Institute
          Natural Resources Defense Council
          San Joaquin Valley Air Pollution Control District
          Union of Concerned Scientists



           OPPOSITION  :    (Verified  5/23/13)

          Association of California Car Clubs
          Specialty Equipment Market Association

           ARGUMENTS IN SUPPORT  :    The author's office states that, 75% of  
          vehicular pollution is caused by just 25% of the vehicle fleet,  
          and that vehicle retirement programs are one of the most  
          effective ways to reduce vehicular air pollution.  Although AB  
          787 (see "Previous Legislation") helped increase the number of  
          vehicles retired each year, only 39,413 vehicles were retired  
          under CAP in 2011-12, leaving millions of high-polluting cars on  
          California roads.  The author's office states that many  
          low-income car owners fail to register their cars continuously  
          for two years because they cannot afford it.  As a result,  
          programs run by nonprofit organizations and local air districts  
          that do not require two continuous years of registration have  
          been successful in reaching many targeted vehicles.

           ARGUMENTS IN OPPOSITION  :     The Specialty Equipment Market  
          Association (SEMA) states, "SEMA believes that it is imprudent  
          for the state to move forward with providing additional funding  
          to scrap old cars while other vital services are being  
          eviscerated or compromised through budget cuts.  Vehicle  
          retirement programs accelerate the demise of older vehicles  
          which are then typically crushed into blocks of metal.   
          Sometimes referred to as "cash for clunkers," the programs  

                                                                CONTINUED





                                                                     SB 459
                                                                     Page  
          6

          rarely focus on how much a vehicle is actually driven.  The  
          programs waste taxpayer dollars on a flawed premise since they  
          generally collect rarely driven vehicles that have little impact  
          on cleaning the air or making the nation less dependent on  
          foreign oil."  
           

          JA:ej  5/23/13   Senate Floor Analyses 

                           SUPPORT/OPPOSITION:  SEE ABOVE

                                   ****  END  ****

































                                                                CONTINUED