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