BILL ANALYSIS Ó
AB 1685
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB
1685 (Gomez)
As Amended August 18, 2016
Majority vote
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|ASSEMBLY: |48-29 |(May 12, 2016) |SENATE: |26-13 |(August 24, |
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Original Committee Reference: TRANS.
SUMMARY: Updates civil penalties for violations of California
Air Resources Board (ARB) regulations, orders, or rules, to
bring penalty assessments into alignment with those of the
United States Environmental Protection Agency (U.S. EPA).
The Senate amendments:
1)Provide for penalties "up to" or "not to exceed" specified
maximum limits.
2)Provide that fines for certain dealer violations shall not
exceed $10,000 for each action.
3)Provide that fines for manufacturers who fail to meet the
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requirements to produce a specified percentage of their new
motor vehicle sales as zero-emission vehicles be limited to
$5,000.
4)Make related, technical changes.
AS PASSED BY THE ASSEMBLY, this bill:
1)Increases civil penalties for violations of certain air
quality orders, rules, or regulations adopted by ARB from a
maximum amount of $500 to a maximum of $37,500 per action and
requires, for violations committed by a manufacturer or
distributor, that payment of penalties be a condition for
further sales by the manufacturer or distributor.
2)Provides that violations involving portable fuel containers or
small off-road engines remain subject to civil penalties of
$500 per unit.
3)Expands penalties for selling motor vehicles or engines in the
state that do not meet ARB requirements to include businesses
or persons who reside outside the state and includes
activities such as advertising and introducing commerce into
the state.
4)Deletes provisions defining an established place of business
as a place actually occupied either continuously or at regular
periods in order to include Internet-based businesses.
5)Expands penalties from a maximum of $5,000 to $37,000 per
action for violations of ARB regulations committed by a
manufacturer or distributor and requires that payment of
penalties be a condition to further motor vehicle sales by the
manufacture or distributor in California.
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6)Increases from $5,000 to $37,500, per action, the penalty for
any manufacturer who sells, as specified, any new motor
vehicle that fails to meet applicable emissions standards.
7)Authorizes ARB to order a manufacturer to bring its vehicles
into emissions configuration to which they were certified and
compliance with this requirement be a condition of further
sale of motor vehicles in California.
8)Authorizes ARB to adjust the maximum penalties for failure to
comply with specified regulations for inflation based on the
California Consumer Price Index without the requirement to go
through rulemaking procedures.
FISCAL EFFECT: According to the Senate Appropriations
Committee, pursuant to Senate Rule 28.8, negligible state costs.
COMMENTS: Both nationally and statewide, the transportation
sector is known to be a major contributor of criteria pollutants
and climate change emissions. To address transportation sector
emissions, both ARB and U.S. EPA regulations require that, prior
to introducing a vehicle for sale, a manufacturer must
demonstrate that the vehicle meets certain emissions standards.
In California, manufacturers must additionally demonstrate
compliance with state air-quality standards and manufacturers
who fail to comply are subject to civil penalties and other
enforcement actions.
To be certified by ARB, a vehicle must demonstrate that its
exhaust and emission-control systems are durable and comply with
the emission standards for the vehicle's useful life. In
California, an application for certification must be submitted
to, and approved by, both the ARB and U.S. EPA concurrently.
On September 3, 2015, representatives of Volkswagen (VW)
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admitted to the U.S. EPA and ARB that a large number of their
vehicle engines had been designed and manufactured with a
"defeat device" designated to bypass, or render inoperative,
elements of the vehicles' emissions control system. As a
result, these vehicles were able to pass emissions tests despite
exceeding federal emissions standards by up to 40 times.
According to vehicle sales data, there are estimated to be
617,000 of these vehicles nationally, 79,400 of which are in
California.
In a joint hearing entitled Volkswagen's "Defeat Device:"
Update and Implications for California held by the Senate
Transportation and Housing and Environmental Quality Committees
on Tuesday March 8, 2016, the Legislature was updated with
regard to how the defeat device was discovered, VW's admissions,
ARB and U.S. EPA's actions, the status of federal litigation,
and the overall effect of the issue on California's air quality,
among other things. In the background paper for the hearing,
the Committees encouraged the Legislature to consider creating
stronger penalties to discourage non-compliance by automobile
manufacturers. It was pointed out federal penalties are
substantially higher that state penalties for non-compliance and
that the penalties were set in the 1970 and are not indexed to
inflation. The Committees suggested that existing ARB penalties
do not provide sufficient deterrent, particularly for egregious
actions to circumvent emissions requirements, such as in case of
VW.
To ensure that California's air quality laws and regulations are
followed, and to better align fines with federal penalties, the
author has introduced this bill which would increase the maximum
penalties for mobile source violations. By increasing ARB's
fines, the author believes that overall compliance will be
improved. Specifically, this bill would increase the maximum
penalty for mobile source violations from $500 to $37,500, while
retaining the current lower penalty amount for smaller, less
egregious, violations and violations for lower-value equipment
such as off-road engines and fuel containers. Additionally,
this bill would modernize statutes to allow penalties to be
extended to manufacturers outside of the state to better reflect
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modern business practices whereby vehicles are advertised and
sold over the Internet (from locations outside of California).
Lastly, this bill would allow ARB to periodically update mobile
source penalties by indexing them to inflation thereby ensuring
that penalties maintain their deterrent effect over time.
Please see the policy committee analysis for full discussion of
this bill.
Analysis Prepared by:
Victoria Alvarez / TRANS. / (916) 319-2093 FN:
0004742