BILL ANALYSIS Ó AB 1691 Page 1 ASSEMBLY THIRD READING AB 1691 (Gipson and Cristina Garcia) As Amended May 12, 2016 Majority vote ------------------------------------------------------------------ |Committee |Votes|Ayes |Noes | | | | | | | | | | | | | | | | |----------------+-----+----------------------+--------------------| |Transportation |13-1 |Frazier, Linder, |Melendez | | | |Baker, Bloom, Brown, | | | | |Chu, Daly, Dodd, | | | | |Gomez, Mathis, | | | | |Medina, Nazarian, | | | | |O'Donnell | | | | | | | |----------------+-----+----------------------+--------------------| |Appropriations |15-5 |Gonzalez, Bloom, |Bigelow, Chang, | | | |Bonilla, Bonta, |Jones, Obernolte, | | | |Calderon, McCarty, |Wagner | | | |Eggman, Gallagher, | | | | | | | | | | | | | | |Eduardo Garcia, Chau, | | | | |Holden, Quirk, | | | | |Santiago, Weber, Wood | | | | | | | | | | | | ------------------------------------------------------------------ AB 1691 Page 2 SUMMARY: Requires the California Air Resources Board (ARB) to update the Enhanced Fleet Modernization Program (EFMP) guidelines to create efficiencies in the EFMP Plus Up Pilot Project (Plus Up). Specifically, this bill: 1)Declares the intent of the Legislature that Plus Up be focused on disadvantaged communities. 2)Requires ARB, no later than June 30, 2017, to update EFMP guidelines to ensure the following occur with regard to the EFMP Plus Up Pilot Project (Plus Up): a) That each local air district implementing a vehicle retirement program with a backlog or a waiting list for applicants is required to develop a plan on how to eliminate the backlog or waiting list; b) That specific steps are taken to ensure that the program is not being misused, including, but not limited to, random income eligibility verification and contact with program participants at least once after their vehicles are replaced; c) That the program is accessible to the lowest income disadvantaged communities by developing mandatory partnerships with, and a mandatory minimum amount of overall funding allocated for outreach to community-based organizations; d) Requires that an outreach and partnership report be submitted to every six months after July 1, 2017; AB 1691 Page 3 e) The applicant prescreening be enhanced, if deemed appropriate; and, f) That priority is given to the retirement of vehicles that are 15 years old or older and vehicles with more than 75,000 miles. 1)Sunsets the provisions on July 1, 2022. EXISTING LAW: 1)AB 32 (Núñez), Chapter 488, Statutes of 2006, requires ARB to reduce greenhouse gas (GHG) emissions to the 1990 level by 2020 and authorized ARB to use market-based mechanisms (cap and trade) to achieve compliance with these regulations. 2)Created the Consumer Assistance Program (CAP) to encourage voluntary accelerated vehicle retirement ("car scrap") which provides a monetary incentives to vehicle owners to retire older, high polluting vehicles. Under this program owners who scrap their vehicles are given $1,000 ($1,500 for low income consumers) for vehicles that have failed their last smog test. 3)Established the EFMP pursuant to AB 118 (Núñez), Chapter 750, Statutes of 2007, to be funded by a $1 surcharge on motor vehicle registration, to encourage the retirement of high polluting passenger vehicles and light- and medium-duty trucks in areas with the greatest air quality impacts. The program offers $1,000 ($1,500 for low-income consumers) to retire AB 1691 Page 4 specified high-polluting vehicles. 4)Established the EFMP-Plus-Up as a pilot project in the Greater Los Angeles area and San Joaquin Valley to help low-income individuals and families retire high-polluting vehicles and purchase cleaner cars. The program provides increasingly larger cash payments for the lowest-income families to move into the cleaner cars. 5)Established the Charge Ahead California Initiative (Initiative), pursuant to SB 1275 (de León), Chapter 530, Statutes of 2014, to provide incentives that increase the availability of zero-emission vehicles (ZEV) and near-zero-emission vehicles (NZEV) vehicles, particularly in disadvantaged and low-and-moderate-income communities. FISCAL EFFECT: According to the Assembly Appropriations Committee, one-time special fund cost of around $100,000 for the ARB to update the EFMP and EFMP Plus-Up guidelines as prescribed by July 1, 2017. Ongoing costs to monitor compliance should be absorbable within existing program resources. [Air Pollution Control Fund] COMMENTS: Approximately 40% of emissions generated in California can be attributed to the transportation sector. Older vehicles are known to be some of the highest polluting vehicles, because they lack the modern emission-reducing technologies that are currently available. ARB estimates that California has five times more cars that are over 20-years old compared to the national average. AB 1691 Page 5 To help improve air quality, meet the state's emissions reduction goals, a number of programs have been developed to encourage vehicle owners to scrap their older, high-polluting cars and trucks and replace them with newer, cleaner vehicles. While many of these programs are offered to all consumers, some programs are specifically target toward disadvantaged communities and lower-income residents who tend to own and operate some of the oldest, highest-polluting cars on our roads. EFMP is a vehicle retirement and replacement program that was authorized by AB 118 and funded by a surcharge on motor vehicle registrations. EFMP has two components. The first is the retirement-only portion and the second is the retirement-and-replacement. The retirement-only portion of the program (CAP) is run by Bureau of Automotive Repair following guidelines set by ARB. Specifically, CAP provides compensation to vehicle owners to retire their older, high polluting vehicles. CAP offers consumers $1,000 to retire an older, high polluting vehicle ($1,500 for low-income consumers). The retirement-and-replacement component of EFMP is administered by the South Coast Air Quality Management District (AQMD) and the San Joaquin Valley Air Pollution Control District in partnership with ARB. This component provides higher incentives to a person who retires a vehicle and purchases a replacement vehicle that meets certain fuel economy requirements. The program has tiered incentives, with the highest amounts allotted to the lowest income participants and the cleanest replacement vehicles. The Plus Up program offers additional incentives to lower-income vehicle owners living in or near disadvantaged communities in the South Coast or San Joaquin Valley regions if they purchase new or used hybrid, plug-in hybrid or pure zero-emission vehicles For example, a qualifying participant who wants to purchase a AB 1691 Page 6 plug-in hybrid (such as a Chevy Volt) or battery electric vehicle (such as a Nissan LEAF) would receive $4,500 from EFMP and an additional $5,000 from Plus Up for a total incentive of $9,500. When coupled with a Clean Air Vehicle Project rebate, an eligible consumer could receive as much as $12,000 towards the purchase of a new electric car. EFMP and Plus-Up have been extremely successful and has resulted in the retirement of 292 high emitting vehicles in the first six months of the program in the San Joaquin Valley alone. The model used for the Plus-Up program in the San Joaquin Valley differs slightly for the pilot program established in the South Coast Air District. For example, in the San Joaquin Valley, the program uses "grass roots" advertising to encourage low- and moderate-income individuals and households to participate. The programs are offered at "events" where participants are offered free smog testing and information about what programs are available. Participants are screened at the event to determine their program qualification status. Following the screening participants are encouraged to take part in various programs for which they qualify. At the events, which are offered monthly, substantial numbers of individuals are offered vouchers for smog repairs and other interested, qualifying individuals informed about the car scrap and vehicle replacement programs. Using the pre-screening process, staff are able to identify qualifying participants operating the oldest, highest polluting vehicles. This style of outreach is contrasted with the Plus-Up program piloted in the South Coast Air District whereby individuals are encouraged to participate using more traditional outreach methods like posters, flyers, billboards, and websites. While this style of outreach has been successful, it has resulted in long waiting lists of participants, it does not necessarily provide the pre-screening that allows the oldest, dirtiest cars to receive priority. AB 1691 Page 7 The author has introduced this bill to help encourage the most efficient use of EFMP funds within the Plus-Up program, to encourage the replacement of the oldest and dirtiest cars from California roadways, and to help the lowest-income individuals and households access vehicle retirement and replacement programs. To accomplish this, this bill would require ARB to update EFMP guidelines by June 30, 2017, to ensure that districts implementing the program have strategies in place to eliminate backlogs and waiting lists. Additionally, this bill would also call upon ARB to ensure the programs are not misused by requiring income eligibility verification and follow up with participants. This bill also calls upon ARB to continuously evaluate the program to determine where program enhancements might be made. The requirement that ARB continuously work to enhance and update the program will undoubtedly increase program success statewide by encouraging the use of new and innovative methodologies to better reach and assist low income program participants and further encourage the retirement and replacement of the oldest and dirtiest cars first. With these measures in place, this bill will result in air quality improvements in some of California's most highly polluted areas. Please see the policy committee analysis for full discussion of this bill. Analysis Prepared by: Victoria Alvarez / TRANS. / (916) 319-2093 FN: 0002949 AB 1691 Page 8