BILL ANALYSIS Ó SB 459 Page 1 SENATE THIRD READING SB 459 (Pavley) As Amended September 6, 2013 Majority vote SENATE VOTE :36-0 TRANSPORTATION 11-5 APPROPRIATIONS 12-5 ----------------------------------------------------------------- |Ayes:|Lowenthal, Ammiano, |Ayes:|Gatto, Bocanegra, | | |Bloom, Bonta, Buchanan, | |Bradford, | | |Daly, Frazier, Gatto, | |Ian Calderon, Campos, | | |Holden, Nazarian, | |Eggman, Gomez, Hall, | | |Quirk-Silva | |Holden, Pan, Quirk, Weber | | | | | | |-----+--------------------------+-----+--------------------------| |Nays:|Linder, Achadjian, Logue, |Nays:|Harkey, Bigelow, | | |Morrell, Patterson | |Donnelly, Linder, Wagner | | | | | | ----------------------------------------------------------------- SUMMARY : Directs the California Air Resources Board (ARB) to take specific steps to improve the Enhanced Fleet Modernization Program (EFMP). Specifically, this bill : 1)States the intent of the Legislature that ARB should take all steps necessary to improve the EFMP to: increase the benefits of the program to low-income Californians; promote cleaner replacement vehicles; and enhance emissions reductions gained by the program. 2)Allows vehicles that have been registered without a substantial lapse to qualify for the Bureau of Automotive Repair's (BAR's) Consumer Assistance Program (CAP). 3)Requires, by June 30, 2015, ARB in consultation with BAR, to update the EFMP guidelines to: a) Include a requirement that a vehicle take, complete, or pass a smog check inspection; b) Establish $1,500 as the minimum replacement compensation for low-income vehicle owners and $1,000 as the maximum compensation for all other vehicle owners; SB 459 Page 2 c) Establish that compensation for replacement vehicles for low-income vehicle owners not be less than $2,500; d) Direct that compensation for either retired or replacement vehicles for low-income vehicle owners be increased as necessary to maximize air quality benefits; e) Provide that increases in compensation amounts may be based on factors including: i) Age of the retired or replaced vehicle; ii) Emissions benefits of the retired or replaced vehicle; iii) Emissions impact of any replacement vehicle; iv) Participation by low-income vehicle owners; and, v) Location of the vehicle in the area of the state with the poorest air quality. 4)Limit eligibility based on income to ensure that the program adequately serves persons of low to moderate income; 5)Include provisions that coordinate the vehicle retirement and replacement components with the vehicle retirement components of CAP; 6)Streamline administration to simplify participation while protecting the accountability of money spent; 7)Include steps to ensure the vehicle replacement component of the program is available in areas designated as federal extreme nonattainment; 8)Include a requirement that vehicles eligible for retirement have sufficient remaining life which may be demonstrated by: a) Proof of current registration; b) Passing a recent smog check inspection; or, c) Passing another test similar to a smog check inspection. SB 459 Page 3 9)Authorizes ARB, when updating the EFMP, to study and consider the following elements: a) Methods of financial assistance other than vouchers; b) An option for automobile dealerships or other used car sellers to accept cars for retirement, provided the cars are dismantled consistent with program requirements; c) An incentive structure with varied incentive amounts to maximize program participation and cost-effective emissions reductions; d) Increased emphasis on the replacement of high-polluting vehicles with cleaner vehicles or increased use of public transit that results in increased use of the vehicle replacement program; e) Increased emphasis on the reduction of greenhouse gas emissions through the increased vehicle efficiency or transit use as a result of the program; and f) Increased partnerships and outreach with community-based organizations. EXISTING LAW : 1)Establishes the smog check program, administered by BAR and the ARB and requires, generally, vehicles that are registered in non-attainment areas for ozone or carbon monoxide pollutant emissions to undergo biennial emission (smog check) inspections. 2)Requires BAR, in consultation with ARB, to identify target populations and disseminate information about the smog check program by all feasible means, including advertisements in various media and by using grass roots community networks. 3)Establishes CAP, administered by BAR, for the voluntary retirement of high-polluting passenger vehicles and light to medium duty trucks from operation in the state through the purchase and dismantling of these vehicles. The program is available to owners when their vehicles fail to pass the smog check inspection. Under CAP, low-income vehicle owners can receive $1,500 to retire their vehicle. SB 459 Page 4 4)Provides, under the EFMP pursuant to guidelines adopted by ARB in consultation with BAR, a program for the voluntary retirement of passenger vehicles and light and medium duty trucks that are high polluters, pursuant to AB 118 (Núñez), Chapter 750, Statutes of 2007. Under the EFMP as administered by BAR, vehicles do not have to fail smog inspection in order to be eligible for EFMP benefits. 5)Requires EFMP to focus efforts where the greatest air quality impact can be identified and to consider cost-effectiveness and impacts on disadvantaged and low-income populations. Under EFMP, eligible low-income vehicle owners can qualify for a $2,500 voucher to be used toward the purchase of a newer vehicle (up to eight years old). EFMP funding from motor vehicle registration fees are scheduled to sunset on January 1, 2016. 6)Defines "low-income motor vehicle owner" as a person whose income does not exceed 225% of the federal poverty level, as published quarterly in the Federal Register by the United States Department of Health and Human Services. FISCAL EFFECT : According to the Assembly Appropriations Committee, minor and absorbable costs for ARB to update program guidelines. COMMENTS : According to the author, retiring older, high-polluting vehicles is a cost effective way to reduce air pollution since a small number of high-polluting cars produce the vast majority of pollution. The author reports that many of these older, high-polluting vehicles tend to have poor fuel economy and that these cars, which are often owned by poor working families, can keep owners trapped in a cycle of paying high fuel costs and therefore unable to afford newer, cleaner vehicle with better fuel economy. The author points out that if a greater number of these high-polluting vehicles are retired and replaced with cleaner cars, California would have cleaner air and working families would have lower overall fuel costs. The author notes that under EFMP, 90% of the approximately $30 million available for the program annually has been spent for vehicle retirement but that very little of that money has been spent to provide vouchers to help individuals purchase a new, cleaner vehicles. According to the author, the available SB 459 Page 5 funding allowed BAR to retire over 12,000 high-polluting vehicles in the program's first year but to date; only 12 vouchers have been issued. To help accelerate the rate of retirement for high-polluting vehicles, the author has introduced this bill which would help to make the current vehicle retirement program more accessible, convenient, and financially feasible for low income vehicle owners. Writing is support of this bill, the San Joaquin Valley Air Pollution Control District notes that this bill would have a significant positive impact on efforts to clean the air in the San Joaquin Valley because this region of the state, in particular, has many low income motor vehicle owners who drive high-emitting vehicles but cannot afford to replace them. The San Joaquin Valley Air Pollution Control District notes that many of these vehicle owners are often unaware of the availability of vehicle replacement program assistance and that helping to eliminate barriers for participation in the program would help to get cleaner cars on the road and reduce mobile source emissions. Writing in opposition to this bill, the Association of California Car Clubs (ACCC) raises concerns that scrappage programs such as CAP and EFMP cause valuable and rare car parts to be lost rather than allowing these parts to be used for vehicle restoration projects. ACCC contends that individuals using the vehicle retirement program frequently scrap cars that are infrequently used, ultimately doing little to improve air quality. Related bills : SB 11 (Pavley) of 2013, extends fees for air pollution reduction programs, including the EFMP established under AB 118. SB 11 is pending on the Assembly Floor. AB 8 (Perea) of 2013 extends, until January 1, 2024, extra charges on vehicle registrations, boat registrations, and tire sales in order to fund, among other programs, the AB 118, program. This bill would also extend the authority of local air districts to impose vehicle registration surcharges in their area. AB 8 is pending on the Senate Floor. Previous legislation : AB 787 (Hill), Chapter 231, Statutes of 2010, authorizes BAR to pay up to $1,500 to a low-income SB 459 Page 6 individual and up to $1,000 to any other individual who retires their vehicle under the CAP smog check program or EFMP as authorized under AB 118. SB 901 (Steinberg) of 2011, as introduced, would have prioritized EFMP expenditures for the highest polluting vehicles registered in areas that are out of attainment with federal air quality standards. Those provisions were deleted by subsequent amendments to that bill. Analysis Prepared by : Victoria Alvarez / TRANS. / (916) 319-2093 FN: 0002607