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 | | ----------------------------------------------------------------- UNFINISHED BUSINESS Bill No: SB 459 Author: Pavley (D) Amended: 9/11/13 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 SENATE FLOOR : 36-0, 5/29/13 AYES: Anderson, Beall, Berryhill, Block, Calderon, Corbett, Correa, De León, DeSaulnier, Emmerson, Evans, Gaines, Galgiani, Hancock, Hernandez, Hill, Hueso, Huff, Jackson, Knight, Lara, Leno, Lieu, Liu, Monning, Padilla, Pavley, Price, Roth, Steinberg, Torres, Walters, Wolk, Wright, Wyland, Yee NO VOTE RECORDED: Cannella, Fuller, Nielsen, Vacancy ASSEMBLY FLOOR : Not available SUBJECT : Vehicle retirement: low-income motor vehicle owners SOURCE : Author DIGEST : This bill directs the California Air Resources Board CONTINUED SB 459 Page 2 (ARB) to take specific steps to improve the Enhanced Fleet Modernization Program (EFMP). Assembly amendments remove the requirement for the Department of Consumer Affairs to establish a one-year pilot program to help low-income vehicle owners voluntarily retire gross-polluting vehicles as specified, and instead require the ARB to take specific steps to improve the EFMP as specified. ANALYSIS : Existing law: 1.Establishes the smog check program, administered by the Bureau of Automotive Repair (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 the Consumer Assistance Program (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. 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 CONTINUED SB 459 Page 3 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. This bill: 1.States the intent of the Legislature that ARB should take all steps necessary to improve the EFMP to: (a) increase the benefits of the EFMP to low-income Californians; (b) promote cleaner replacement vehicles; and (c) enhance emissions reductions gained by the EFMP. 2.Allows vehicles that have been registered without a substantial lapse in the state for at least two years prior to retirement and that have failed a smog test qualify for BAR's CAP. 3.Establishes that vehicle replacement may be an option for all motor vehicle owners, that retirement programs may be combined, that compensation for low-income vehicle owners not be less than $2,500, and that compensation for all other vehicle owners not exceed that provided to low-income vehicle owners. 4.Requires, by June 30, 2015, ARB in consultation with BAR, to update the EFMP guidelines to: A. Consider requiring 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; C. Direct that compensation for either retired or replacement vehicles for low-income vehicle owners may be increased as necessary to maximize air quality benefits while also ensuring low-income vehicle owner participation; CONTINUED SB 459 Page 4 D. Provide that increases in compensation amount may be based on factors including age of the vehicle, emissions impact of the replacement vehicle, participation by low-income vehicle owners, and location of the vehicle in areas of the state with the poorest air quality; E. Provide that program eligibility may be limited on the basis of income to ensure the EFMP adequately serves persons of low or moderate income; F. Provide coordination between vehicle retirement and replacement components of EFMP and CAP to ensure that vehicle owners participate in the appropriate program to maximize emissions reductions; G. Streamline administration of EFMP to simplify predication while protecting the accountability of money spent; and H. Ensure vehicles eligible for retirement have sufficient remaining life as demonstrated by proof of current registration, passing a recent smog check inspection, or passing another test similar to a smog check inspection. 1.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 EFMP requirements; C. An incentive structure with varied incentive amounts to maximize EFMP 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; CONTINUED SB 459 Page 5 E. Increased emphasis on the reduction of greenhouse gas emissions through the increased vehicle efficiency or transit use as a result of the EFMP; and F. Increased partnerships and outreach with community-based organizations. 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 the 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 SUPPORT : (Verified 9/12/13) American Lung Association Asian Pacific Environmental Network Breathe California California Council for Environmental and Economic Balance Coalition for Clean Air 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 South Coast Air Quality Management District Union of Concerned Scientists ValleyCAN OPPOSITION : (Verified 9/12/13) Association of California Car Clubs ARGUMENTS IN SUPPORT : The author's office states that, 75% of CONTINUED SB 459 Page 6 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. JA:ej 9/12/13 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END **** CONTINUED