BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  SB 459
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          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;









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             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.









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          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.  








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          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  








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          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  








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          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                                          


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