BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Kevin de León, Chair
SB 1242 (Lieu) - Bureau of Automotive Repair: sunset review
Amended: As Introduced Policy Vote: BP&ED 9-0
Urgency: No Mandate: No
Hearing Date: May 23, 2014 Consultant: Mark McKenzie
SUSPENSE FILE.
Bill Summary: SB 1242 would subject the powers and duties of the
Bureau of Automotive Repair (BAR) to sunset review by the
Legislature as if their governing statutes were scheduled for
repeal on January 1, 2019. The bill also makes several minor
changes to the Automotive Repair Act.
Fiscal Impact: Projected expenditures of approximately $195
million annually (Vehicle Inspection and Repair Fund, High
Polluter Repair or Removal Account, Enhanced Fleet Modernization
Subaccount), supporting 592.4 PY until January 1, 2019, fully
offset by specified fee revenues and transfers of over $200
million, based on the proposed 2014-15 budget.
Background: Under existing law, BAR licenses and regulates more
than 36,000 Automotive Repair Dealers, 4,900 Smog Check Test and
Repair Stations, 2,300 Smog Check Test Only Stations, 35 Smog
Check Repair Only Stations, 4,000 STAR Certified Stations, and
2,100 Brake and Lamp Stations. Individually, BAR licenses some
6,500 Smog Check Inspectors, 5,600 Smog Check Repair
Technicians, and 3,200 Brake and Lamp Adjusters.
BAR is responsible for regulating the automotive repair
marketplace and administering the smog check program. BAR also
administers the Consumer Assistance Program (CAP), which
provides for repair assistance and vehicle retirement payments
to eligible vehicle owners if their vehicle fails a smog check.
In cooperation with the Air Resources Board, BAR also
participates in the administration of the Enhanced Fleet
Modernization Program (EFMP), which provides voucher payments to
owners of high-polluting vehicles in exchange for the retirement
or replacement of those vehicles, as specified.
Existing law also requires the Joint Committee on Boards,
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Commissions, and Consumer Protection to hold a public hearing to
evaluate and review the effectiveness and efficiency of BAR in
2003, and every 4 years thereafter, as specified. The Governor
has the authority to appoint a chief of the BAR, subject to
confirmation by the Senate, but must give due consideration to
any person or persons recommended by the bureau prior to making
the appointment.
Proposed Law: SB 1242 would subject the powers and duties of BAR
to review by the appropriate policy committees of the
Legislature as if these provision were scheduled to be repealed
on January 1, 2019. The bill would also delete an outdated
requirement that BAR be reviewed in 2003 and every four years
thereafter by a specified joint committee that is no longer in
existence, and repeal a provision requiring the Governor to give
due consideration to any person recommended by BAR when
appointing a chief of the BAR.
Related Legislation: This bill is one of six measures introduced
this session to extend the sunset on licensing boards within the
Department of Consumer Affairs - including SB 1243 (Lieu), SB
1244 (Lieu), SB 1245 (Lieu), SB 1246 (Lieu), and SB 1247 (Lieu).
Staff Comments: The Department of Consumer Affairs indicates
that subjecting BAR to review by the appropriate policy
committees of the Legislature, as specified, and making updates
to the Automotive Repair Act would have minor and absorbable
costs within existing resources.
BAR's operating revenues are provided from three primary
sources: the Vehicle Inspection and Repair Fund (VIRF), the High
Polluter Repair or Removal Account (HPPRA), and the Enhanced
Fleet Modernization Subaccount (EFMS) within the HPRRA.
According to the 2014-15 proposed budget, all of these funds are
generally in balance with appropriate reserves, with the
exception of the HPRRA, which has an imbalance of expenditures
and revenues in 2014-15, but is authorized in existing law to
receive transfers from the VIRF. The VIRF, which is funded
primarily from BAR's regulatory licensing and permit fees, has
revenues of $129.4 million (including a General Fund loan
repayment of $14 million) and expenditures of $129.65 million in
2014-15, and is projected to end that year with a reserve of
nearly $50 million. The HPPRA, which is funded by specified
smog abatement fees charged to owners of new vehicles during the
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first six years of registration, has revenues of $36 million and
expenditures of $40.5 million in 2014-15, with a projected
reserve of approximately $5.5 million. The EMFS, which is
funded by a $1 fee on vehicle registrations, has revenues of
$40.7 million (including a General Fund loan repayment of $10
million) and expenditures of $40.6 million in 2014-15, with a
reserve of $1.8 million.
Staff notes that there is an outstanding loan with a current
balance of $40 million from the EFMS to the General Fund, $10
million of which is scheduled to be repaid to the subaccount in
2014-15. There is also an outstanding loan from the VIRF to the
General Fund with a current balance of $139 million, $14 million
of which is scheduled to be repaid in 2014-15.