BILL ANALYSIS Ó
SB 913
Page 1
Date of Hearing: June 23, 2014
ASSEMBLY COMMITTEE ON TRANSPORTATION
Bonnie Lowenthal, Chair
SB 913 (DeSaulnier) - As Amended: June 16, 2014
SENATE VOTE : 34-0
SUBJECT : Vehicular air pollution: vehicle retirement
SUMMARY : Requires the state Air Resources Board (ARB) and the
Bureau of Automotive Repair (BAR) to cooperate in issuing a
specified number of vouchers to retire and replace
high-polluting cars through the Enhanced Fleet Modernization
program (EFMP) and the Consumer Assistance Program (CAP).
Specifically, this bill :
1)Requires ARB and BAR to issue the following number of vouchers
for the respective programs per year, as specified:
a) Not less than 15,000 retirement vouchers through CAP for
the 2014-15 FY, increasing to 20,0000 in FY 2015-16;
b) Not less than 25,000 retirement vouchers through EFMP
for FY 2014-15, increasing to 28,000 for FY 2015-16; and,
c) Not less than 1,000 replacement vouchers for FY 2014-15
for EFMP increasing to 2,000 for FY 2015-16.
1)States the intent of the Legislature that the additional
vouchers issued (as a result of this bill) will be funded by
the EFMP Subaccount, the High Polluter Repair or Removal
Account, and the Vehicle Inspection and Repair Fund.
2)States the intent of the Legislature that if monies in the
EFMP Subaccount, the High Polluter Repair or Removal Account,
and the Vehicle Inspection and Repair Fund are insufficient to
fully fund the bill's requirements, any and all outstanding
loans from those accounts to the General Fund must be repaid
to fund the this bill's requirements.
3)Requires ARB and BAR to produce a report and post it on their
respective Internet Web sites on or before September 1, 2016,
stating whether the goals for increased issuance of vehicle
retirement or replacement vouchers were met and, if not, what
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revisions will be made to CAP and EFMP to increase the number
of vehicle retirements to meet the goals.
4)Requires ARB, when updating EFMP and CAP guidelines, to
consider adding a variety of consumer protection measures for
purchasing and financing vehicle replacements to ensure that
consumers gain as much benefit as possible from the incentive
programs.
5)Makes related, clarifying amendments.
EXISTING LAW :
1)Required ARB, pursuant to AB 32 (Nunez), Chapter 488, Statutes
of 2006, to develop and implement a plan of how to reduce
greenhouse gas (GHG) emissions to 1990 levels by the year
2020.
2)Established the Motor Vehicle Inspection Program (smog check)
administered by the Department of Consumer Affairs (DCA)
through BAR which requires a vehicle owner to have their
vehicles tested every two years, with some exceptions, to
ensure the vehicle meets specified emissions requirements.
3)Established CAP, administered by BAR, which allows owners
whose vehicles fail smog check to obtain a repair cost waiver,
repair cost assistance, or vehicle retirement voucher.
4)Established EFMP, administered by ARB, which allows for
voluntary retirement of high-polluting passenger vehicles and
light- and medium-duty trucks, provided the vehicle is
currently registered as operable and has been continuously
registered for two years prior to the application. EFMP is
administered , in two ways:
a) Statewide administration, in consultation with BAR,
where $1,000 vouchers are offered to all qualifying vehicle
owners to retire a high polluting vehicles ($1,500 for low
income vehicle owners); and,
b) Region specific administration, in consultation the San
Joaquin Valley Air Pollution Control District and the South
Coast Air Quality Management District, to replace
high-polluting vehicles by offering $2,000 vouchers for to
vehicle owners ($2,500 for low-income vehicle owners) to
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purchase an eight years old or newer vehicle, or use the
voucher toward public transit or the purchase of a vehicle
four years old or newer.
FISCAL EFFECT : The Senate Appropriations Committee identified
that the issuance of 15,000 vouchers in 2014-15 for CAP vehicle
retirement would represent an absorbable cost at current funding
levels; however, the issuance of 20,000 vouchers in 2015-16
would require expenditures of approximately $8 million beyond
current program funding levels.
For the EFMP vehicle retirement vouchers, the Senate
Appropriations Committee estimates that the issuance of 25,000
vouchers in 2014-15 and 28,000 vouchers in 2015-16 would be
absorbable at current funding levels as would the issuance of
1,000 vouchers in 2014-15. The issuance of 2,000 vouchers in
2015-16, however, would require expenditure of $1.84 million
beyond current funding levels for the program.
The Senate Appropriations Committee also indicates that ARB
would incur an additional $81,500 in 2014-15 and $163,000 for 1
personnel year (PY) of staff time for increased monitoring and
oversight of EFMP, and for increased coordination with BAR and
local air quality management districts and that a fund transfer
of approximately $6.5 million from the Vehicle Inspection and
Repair Fund (VIRF) to the High Polluter Repair or Removal
Account would be needed to cover fund deficiencies in 2015-16 as
a result of the requirement for voucher issuance. The costs to
ARB to implement consumer protection measures when purchasing
and financing any replacement vehicles to ensure consumer
benefits was added to the bill after it left the Senate
Appropriations Committee and was therefore not considered.
COMMENTS : According to US Environmental Protection Agency, a
small percentage of older vehicles on our roadways are
responsible for generating of the greatest percentage of
smog-forming emissions. Along these lines, ARB notes that a
typical 20-year old vehicle emits 30 times more smog-forming
pollutants per mile than does a 5-year old vehicle. For this
reason, programs like EFMP and CAP were initiated, in an attempt
to get older, dirty cars off our roadway and replace them with
cleaner cars or move owners out of dirty cars and into transit.
SB 459 (Pavley), Chapter 437, Statutes of 2013, addressed
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concerns that EFMP and CAP were not accelerating the turnover of
high-polluting vehicles at a fast enough rate. Specifically, SB
459 directed ARB, by June 15, 2015, to improve EFMP by
increasing the benefits of the program for low-income California
residents, promoting cleaner replacement vehicles, enhancing
emissions reductions, and increasing outreach to community-based
organizations. SB 459 goals included ensuring that vehicles
have sufficient remaining life before retirement, streamlining
administration to simplify participation, improving coordination
with CAP, and ensuring that the replacement component is focused
in federal nonattainment areas. In updating the EFMP
guidelines, SB 459 required ARB to study and consider methods of
financial assistance other than vouchers, create incentives with
varied amounts, increase outreach efforts to community-based
organizations, increase incentives for cleaner vehicles, and
increase public transit use.
ARB is in the process of developing program guidelines and
addressing other requirements set forth in SB 459 and released a
staff report on May 6, 2014, addressing SB 459 requirements.
The staff report is slated for consideration at the ARB hearing
on June 26, 2014. It provides a variety of program improvements
related to EFMP with the majority of amendments focused on two
areas: a Retirement-Only program and a new Pilot Retire and
Replace program. The Retirement-Only Program would be limited
to low-income participants, require the vehicle to complete a
smog check test to demonstrate functionality, provide
modifications to ensure consistency with CAP and simplify
implementation and monitor program participation. The proposed
Retire and Replace Program includes, but is not necessarily
limited to, an income eligibility and outreach component,
retirement and replacement components, and transportation
mobility options.
The author has introduced this bill to ensure that ARB continues
on a path to update vehicle replacement programs pursuant to SB
459 requirements. To ensure that an aggressive approach is
taken by ARB, this bill proposes specific vehicle retirement and
replacement goals that ARB and BAR must meet within EFMP and
CAP. The author notes it is his intention that the goals create
an increase in current program volumes and points out that the
bill allows for future "fine tuning" of the goals based through
ARB and BAR suggested program revisions. Additionally, the bill
codifies some elements ARB's May 6, 2014, staff report to help
to inform and protect consumers from lending scams to help
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ensure that the value and benefits of the incentives are
realized by the consumer.
By setting a vehicle retirement target rather than an emissions
reduction target, the vehicle retirement goals set forth in this
bill could run counter to the broader goal of reducing emissions
in California. For example, the bill could have the effect of
incentivizing vehicle retirement regardless of whether or not
the vehicles are gross polluters currently in use on our
roadway. While retiring all qualifying vehicles would certainly
"count" toward the goal, it may not generate the greatest
overall emissions reduction benefit and, therefore, may not
represent the best use of the funds.
Writing in support of this bill, the California Electric
Transportation Coalition (CalETC) contends that cleaning up
California's transportation system is critical to meeting the
goals of AB 32. They point out that the EFMP is a critical
incentive program designed to address the concerns of air
quality in low-income communities, which tend to have a higher
population of dirty-vehicles. They also state that enhancing
vehicle retirement and replacement programs would serve as an
integral part of other, large low carbon transportation efforts,
namely SB 1204 (Hueso) and SB 1276 (De Leon) which are currently
under consideration in the Assembly. CalETC notes that
increasing the percentage of voluntarily-retired dirty passenger
vehicles and light- and medium-duty trucks would provide
significant benefits for the stat and for communities in which
they are used.
Writing in opposition to this bill, the Department of Finance
(DOF) notes that this bill is premature since ARB and BAR are
currently revising EFMP guidelines to align emissions reduction
targets within the state implementation Plan (SIP), which
targets vehicle reduction instead of emission-related reductions
as required by the SIP. They also point out that the bill, in
setting targets for retirement of vehicles rather than reducing
emissions, is in conflict with California's emissions reduction
goals.
While this bill is well intentioned in its attempts to increase
the number of vehicle that are retired through the EFMP and CAP,
as pointed out by DOF, it has the potential to undermine the
ability of the programs to maximize emissions reductions. By
going for "quantity over quality" this bill could diminish
efforts to achieve AB 32 goals. If the bill continues to move
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forward, the author may wish to consider aligning the bill with
the ARB's May 6, 2014, staff recommendations.
Related legislation : SB 1204 (Lara) creates a Clean Truck, Bus,
and Off-Road Vehicle and Equipment Technology Program to fund
development, demonstration, pilot projects, and commercial
deployment of zero- and near-zero-emission trucks, buses, and
off-road vehicles and equipment technologies. SB 1204 provides
that the program shall be funded from the Greenhouse Gas
Reduction Fund, and shall prioritize projects located in
disadvantaged communities. That bill is currently in the
Assembly Appropriations Committee.
SB 1275 (De Leon) requires ARB to expand EFMP to provide for
ridesharing and car-sharing vouchers as an alternative to
vehicle-replacement vouchers. It also requires ARB to adopt a
funding plan for projects under the Air Quality Improvement
Program (AQIP), adopt specified revisions to AQIP, and establish
programs to increase access to and direct benefits for
disadvantaged and low- and moderate-income communities from
electric transportation. That bill is currently in the Assembly
Natural Resources Committee.
Previous 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) of 2009, which Governor Schwarzenegger vetoed,
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
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the federal poverty level.
AB 32 (Nunez), Chapter 488, Statutes of 2006, required the ARB
to develop a plan of how to reduce emissions to 1990 levels by
the year 2020 and also required ARB to ensure that, to the
extent feasible, GHGs reduction requirement and programs direct
public and private investment toward the most disadvantaged
communities.
REGISTERED SUPPORT / OPPOSITION :
Support
Breathe California
CalETC
California New Car Dealers Association
Sacramento Municipal Utilities District
Opposition
Department of Finance
Analysis Prepared by : Victoria Alvarez / TRANS. / (916) 319-
2093