BILL ANALYSIS Ó
SENATE TRANSPORTATION & HOUSING COMMITTEE BILL NO: SB 459
SENATOR MARK DESAULNIER, CHAIRMAN AUTHOR: pavley
VERSION: 9/11/13
Analysis by: Erin Riches FISCAL: yes
Hearing date: September 12, 2013
SUBJECT:
Vehicle retirement: Enhanced Fleet Modernization Program
DESCRIPTION:
This bill requires the state Air Resources Board (ARB) to update
the Enhanced Fleet Modernization Program (EFMP) guidelines, as
specified.
ANALYSIS:
Smog Check Program
Existing law establishes the Motor Vehicle Inspection Program,
commonly known as the smog check program. The Department of
Consumer Affairs 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.
Consumer Assistance Program (CAP)
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 CAP, administered by BAR. CAP provides three options:
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
percent of the federal poverty level) qualify if the repair
estimate exceeds $250.
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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 household income must be at or below
225 percent of the federal poverty level and the owner cannot
have previously received CAP assistance for the same vehicle.
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 percent 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:
o have been continuously registered for two
years prior to application; or
o registered as non-operational for a maximum of 60 days
during the prior two years, occurring at least 90 days
prior to application; or
o 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.
Existing law requires the Department of Consumer Affairs, in
consultation with ARB, to disseminate information about the smog
check program.
Enhanced Fleet Modernization Program (EFMP)
Existing law also establishes the EFMP, administered by ARB in
consultation with BAR for vehicle retirement, and by ARB in
consultation with two 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. A vehicle need not have failed a smog check in
order to be eligible for EFMP, but a vehicle owner whose vehicle
has failed a smog check may apply to BAR for vehicle retirement
assistance under EFMP. BAR determines whether the owner is
eligible for CAP or EFMP (or neither).
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Under the statewide program, EFMP offers:
A $1,000 voucher to all vehicle owners to retire a
high-polluting vehicle.
A $1,500 voucher to low-income vehicle owners (household
income at or below 225 percent of federal poverty level) to
retire a high-polluting vehicle.
Under the local air district program, EFMP offers:
A $2,500 voucher to low-income vehicle owners (household
income at or below 225 percent of federal poverty level) to
replace a high-polluting vehicle, by either purchasing a
vehicle eight years old or newer, or using the voucher toward
public transit.
A $2,000 voucher to all other vehicle owners to replace a
high-polluting vehicle by either purchasing a vehicle four
years old or newer, or using the voucher toward public
transit.
Local air districts have issued only a dozen replacement
vouchers under EFMP, all in the South Coast Air Quality
Management District.
This bill :
Allows a motor vehicle that has failed a smog check and has
been registered for at least two years in the state without
substantial lapse, as defined by BAR, to be eligible for CAP
assistance.
Requires ARB, in consultation with BAR, to update the EFMP
regulations by June 30, 2015, but BAR shall continue to
administer the EFMP, pursuant to the updated regulations.
The updated EFMP guidelines shall:
o Consider requiring a vehicle owner to take, complete, or
pass a smog check.
o Establish $1,500 as the minimum retirement voucher
amount for low-income owners and $1,000 as the maximum
retirement voucher amount for all other owners.
o Allow an owner to obtain a replacement voucher in
addition to a retirement voucher.
o Establish $2,500 as the minimum replacement voucher for
low-income owners and provide that replacement compensation
SB 459 (PAVLEY) Page 4
for all other owners shall not exceed that of low-income
owners.
o Allow for larger retirement or replacement vouchers in
order to maximize the program's air quality benefits while
also ensuring participation by low-income motor vehicle
owners.
o Allow voucher increases to be based on factors
including, but not limited to, the age of the vehicle, the
emissions benefits of the vehicle, the emissions impact of
any replacement vehicle, participation by low-income
vehicle owners, and the location of the vehicle in an area
of the state with the poorest air quality.
o Allow program eligibility to be limited on the basis of
income to ensure the program adequately serves low- and
moderate-income individuals.
o Provide coordination with vehicle retirement under CAP
to ensure that vehicle owners participate in the
appropriate program to maximize emissions reductions.
o Streamline administration to simplify participation
while protecting the accountability of monies spent.
o Ensure that the vehicle replacement component of the
program is available in areas designed as federal extreme
nonattainment.
o Require that vehicles eligible for retirement have
sufficient remaining life, such as passing a recent smog
check or proof of current registration.
Requires ARB, when updating the EFMP guidelines, to study and
consider all of the following:
o Methods of financial assistance other than vouchers.
o An option for automobile dealerships or other used car
sellers to accept cars for retirement, provided the cars
are dismantled consistent with program requirements.
o An incentive structure with varied incentive amounts to
maximize program participation and cost-effective emissions
reductions.
o Increased emphasis on replacing high-polluting vehicles
with cleaner vehicles or increased use of public transit to
increase use of the vehicle replacement component of the
program.
o Increased emphasis on reducing greenhouse gas emissions
through increased vehicle efficiency or transit use as a
result of the program.
o Increased partnerships and outreach with community-based
organizations.
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COMMENTS:
1.Purpose . The author states that 75 percent of vehicular
pollution is caused by just 25 percent 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" below) 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 states
that EFMP, the primary tool for ensuring that retired vehicles
are replaced with clean vehicles, has not yet successfully
attracted substantial consumer participation. The author
states that ARB is scheduled to begin reviewing EFMP
regulations this fall; this bill directs ARB to consider
specific ways to make the program more accessible, convenient,
and financially feasible for low-income vehicle owners to
replace their high-polluting vehicles with cleaner cars.
2.Registration requirements . Currently, CAP requires a vehicle
owner to provide proof of two continuous years of vehicle
registration in order to qualify for vehicle retirement
assistance. The intent of this requirement is to help ensure
that out-of-state vehicle owners do not take advantage of the
program. This bill allows a vehicle that has been registered
for at least two years without a substantial lapse, as defined
by BAR, to be eligible for CAP assistance. The author states
that many low-income car owners fail to register their cars
continuously for two years because they cannot afford it.
Thus, this bill will make more low-income vehicle owners
eligible for CAP. In addition, because a vehicle is
smog-tested when an owner brings it in as part of vehicle
registration, relaxing the requirement for two continuous
years of registration could lead to more vehicles being smog
tested and ultimately, more high-polluting vehicles being
retired.
3.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 or her vehicle under the smog check program or
EFMP.
4.29.10 hearing . When this committee passed this bill in April,
it established a one-year pilot program within CAP to help
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low-income vehicle owners retire high-polluting vehicles. It
was subsequently amended in the Assembly to instead primarily
address EFMP. Because of these amendments, the Senate Rules
Committee referred this bill back to this committee for a
hearing under Senate Rule 29.10. At today's hearing, the
committee may, with a majority vote, (1) hold the bill; (2)
return the bill as approved by the committee to the Senate
Floor; or (3) refer the bill to the Committee on
Appropriations.
Assembly Votes:
Floor:53-23 (Unofficial)
Trans:10-5
Floor: 53-25
Appr: 12-5
Trans: 11-5
Senate Votes:
Floor: 36-0
Appr: 6-0
T&H: 10-0
SB 459 (PAVLEY) Page 7
POSITIONS: (Communicated to the committee by 2p.m. on Thursday,
September 12, 2013.)
SUPPORT: American Lung Association in California
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
OPPOSED: Association of California Car Clubs