BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 913|
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THIRD READING
Bill No: SB 913
Author: DeSaulnier (D), et al.
Amended: 3/25/14
Vote: 21
SENATE TRANSPORTATION & HOUSING COMMITTEE : 11-0, 4/1/14
AYES: DeSaulnier, Gaines, Beall, Cannella, Galgiani, Hueso,
Lara, Liu, Pavley, Roth, Wyland
SENATE APPROPRIATIONS COMMITTEE : 7-0, 5/23/14
AYES: De León, Walters, Gaines, Hill, Lara, Padilla, Steinberg
SUBJECT : Vehicle emissions reductions
SOURCE : Author
DIGEST : This bill requires the state Air Resources Board
(ARB) and the Bureau of Automotive Repair (BAR) to cooperate in
issuing a specified number of vouchers through the Enhanced
Fleet Modernization program (EFMP) and the Consumer Assistance
Program to retire high-polluting cars and a specified number of
vouchers through the EFMP to replace high-polluting cars.
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 BAR. The smog
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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 model years old or newer.
Consumer Assistance Program
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, administered by BAR.
The Consumer Assistance Program 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 household income must be at or below
225% of the federal poverty level and the owner cannot have
previously received assistance under this program 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) in exchange for scrapping the car. To qualify
for retirement, a vehicle must be currently registered as
operable, with registration fees paid, must have failed its
most recent smog test, and:
Have been continuously registered for two years prior to
application; or
Have been registered as non-operational for a maximum of
60 days during the prior two years, occurring at least 90
days prior to application; or
Have had lapsed registration for less than 121 days
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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. The Consumer Assistance Program
retired 12,000 vehicles in 2012-13.
Enhanced Fleet Modernization Program (EFMP)
EFMP 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 test to qualify for EFMP,
but it must meet ARB's definition of high-polluting. The
vehicle must be currently registered as operable and must have
been continuously registered for two years prior to the
application, unless the owner can provide specified information
to show the vehicle has been operated in the state during that
period. EFMP has a statewide component and a local component.
Under the statewide component, ARB administers a program, in
consultation with BAR, to retire high-polluting vehicles. Under
this program, EFMP offers a $1,500 voucher to low-income vehicle
owners (household income at or below 225% of federal poverty
level), or a $1,000 voucher to all other vehicle owners, to
retire a high-polluting vehicle. EFMP retired approximately
25,000 high-polluting vehicles in 2012-13.
Under the local component, ARB administers a program, authorized
in the San Joaquin Valley Air Pollution Control District and the
South Coast Air Quality Management District, to replace
high-polluting vehicles. In addition to the retirement vouchers
described above, the local EFMP program offers:
A $2,500 voucher to low-income vehicle owners (household
income at or below 225% 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
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years old or newer, or using the voucher toward public
transit.
EFMP has issued less than two dozen replacement vouchers since
the program's inception in 2010, all in the South Coast Air
Quality Management District.
This bill requires ARB to include in EFMP guidelines specific
goals for retirement and replacement of passenger vehicles and
light- and medium-duty trucks that are high polluters.
This bill also requires ARB and BAR to cooperate in the issuance
of a specified number of replacement vouchers through EFMP, and
a specified number of retirement vouchers through EFMP and the
Consumer Assistance Program.
Specifically, this bill requires ARB to adopt guidelines that
include the following targets:
Issue at least 15,000 retirement vouchers under the Consumer
Assistance Program in 2014-15 and at least 20,000 in 2015-16.
Issue at least 25,000 retirement vouchers under EFMP in
2014-15 and at least 28,000 in 2015-16.
Issue at least 1,000 replacement vouchers under EFMP in
2014-15, and at least 2,000 in 2015-16.
This bill also requires ARB and BAR to make publicly available
on their respective websites, by September 1, 2016, a report as
to whether these targets were met and, if not, how ARB and BAR
plan to revise the programs to increase vehicle retirements and
replacements.
Comments
SB 459 (Pavley, Chapter 437, Statutes of 2013) (see prior
legislation below) requires ARB, in consultation with BAR, to
update EFMP regulations by June 30, 2015. This legislation
requires the guidelines to include a variety of new policies,
including allowing for retirement and replacement vouchers of
larger amounts, focusing the program more heavily on lower
income owners, and streamlining program requirements to
facilitate participation. SB 459 also requires BAR to expand
Consumer Assistance Program eligibility to allow a vehicle that
has failed a smog check and has been registered for at least two
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years in California without substantial lapse (currently, a
vehicle that has not been registered continuously for two years
must not have had a lapse of more than 120 days and must be
registered for at least 90 days prior to the application). BAR
and ARB are both in the process of soliciting stakeholder input
as they draft the revised regulations. In March, ARB issued a
white paper describing the proposed revisions; ARB will vote on
the final revised regulations in June. The white paper does not
propose to include targets for vehicle retirement and
replacement.
Prior Legislation
SB 359 (Corbett, Chapter 415, Statutes of 2013) provides $48
million in additional funding in the current fiscal year to ARB
to support EFMP and several other programs.
SB 459 (Pavley, Chapter 437, Statutes of 2013) requires ARB, in
consultation with BAR, to update the EFMP guidelines as
specified by June 30, 2015.
AB 8 (Perea, Chapter 401, Statutes of 2013) extends until
January 1, 2024, a $1 extra fee on vehicle registrations to fund
EFMP.
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.
AB 823 (Hill, 2009), which was vetoed by Governor
Schwarzenegger, would have limited eligibility for financial
assistance under the Consumer Assistance Program 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:
CAP vehicle retirement vouchers: The issuance of 15,000
vouchers in 2014-15 would be absorbable at current funding
levels. The issuance of 20,000 vouchers in 2015-16 would
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require expenditures of approximately $8 million beyond
current funding levels for the program. (High Polluter Repair
or Removal Account [HPPRA])
EFMP vehicle retirement vouchers: The issuance of 25,000
vouchers in 2014-15 and 28,000 vouchers in 2015-16 would be
absorbable at current funding levels. (Enhanced Fleet
Modernization Subaccount [EFMS])
EFMP vehicle replacement vouchers: The issuance of 1,000
vouchers in 2014-15 would be absorbable at current funding
levels. The issuance of 2,000 vouchers in 2015-16 would
require expenditures of $1.84 million beyond current funding
levels for the program. (EFMS)
ARB would incur an additional $81,500 in 2014-15 and $163,000
for 1 PY of staff time for increased monitoring and oversight
of EFMP, and for increased coordination with BAR and local air
quality management districts. (EFMS)
Fund transfer of approximately $6.5 million from the Vehicle
Inspection and Repair Fund (VIRF) to the HPPRA to cover fund
deficiencies in 2015-16 as a result of the voucher issuance
requirements in this bill. This transfer, which is authorized
under current law (see background), is unlikely to trigger
General Fund loan repayments.
SUPPORT : (Verified 5/23/14)
Breathe California
California Electric Transportation Coalition
California New Car Dealers Association
Sacramento Municipal Utility District
OPPOSITION : (Verified 5/23/14)
Department of Finance
ARGUMENTS IN SUPPORT : According to the author's office, 25%
of cars on the road are responsible for 75% of smog-forming
emissions from motor vehicles. According to ARB, a typical
20-year-old vehicle emits 30 times more smog-forming pollutants
per mile than a 5-year-old vehicle. Retiring these older,
high-polluting vehicles is a key part of meeting the state's
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emissions reduction goals. At the same time, it is essential to
ensure that vehicle owners can afford a replacement vehicle that
is cleaner, safer, and more reliable. While the governor's goal
to get 1.5 million zero-emission vehicles (ZEVs) on California's
roads by 2025 is laudable, most low-income households are priced
out of the ZEV market. A February 2014 Next Generation report
finds that for low-income Californians, particularly in rural
areas, "getting into a relatively more efficient vehicle is more
realistic than getting into a new electric vehicle, which is
expensive, or onto public transit, which is often ineffective in
serving rural households." This bill aims to help more owners
replace their high-polluting vehicles by setting hard targets
for vehicle retirement and replacement under the Consumer
Assistance Program and EFMP.
ARGUMENTS IN OPPOSITION : The Department of Finance is opposed
to this bill because, "1) it is premature at this time as the
ARB and BAR are currently revising EFMP guidelines to align
emissions reduction targets with the State Implementation Plan
(SIP), and 2) it targets vehicle reduction instead of
emissions-related reductions as required by the SIP.
"Federal clean air laws require areas with unhealthy air quality
standards to develop plans, known as SIPs, that describe how an
area will attain national ambient air quality standards.
"The purpose of this bill is to help California to achieve its
air emission goals. However, this bill sets targets for the
retirement of vehicles and does not focus on reducing
emissions."
JA:nl 5/23/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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