BILL ANALYSIS                                                                                                                                                                                                    Ó



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          ASSEMBLY THIRD READING


          AB  
          1965 (Cooper)


          As Amended  May 31, 2016


          Majority vote


           ------------------------------------------------------------------ 
          |Committee       |Votes|Ayes                  |Noes                |
          |                |     |                      |                    |
          |                |     |                      |                    |
          |                |     |                      |                    |
          |----------------+-----+----------------------+--------------------|
          |Transportation  |12-3 |Frazier, Bloom,       |Linder, Baker,      |
          |                |     |Brown, Chu, Daly,     |Melendez            |
          |                |     |Dodd, Eduardo Garcia, |                    |
          |                |     |Gomez, Mathis,        |                    |
          |                |     |Medina, Nazarian,     |                    |
          |                |     |O'Donnell             |                    |
          |                |     |                      |                    |
          |----------------+-----+----------------------+--------------------|
          |Appropriations  |15-3 |Gonzalez, Bloom,      |Bigelow, Chang,     |
          |                |     |Bonilla, Bonta,       |Obernolte           |
          |                |     |Calderon, Daly,       |                    |
          |                |     |Eggman, Gallagher,    |                    |
          |                |     |                      |                    |
          |                |     |                      |                    |
          |                |     |Eduardo Garcia,       |                    |
          |                |     |                      |                    |
          |                |     |                      |                    |
          |                |     |Roger Hernández,      |                    |
          |                |     |Holden, Quirk,        |                    |
          |                |     |Santiago, Weber, Wood |                    |








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          SUMMARY:  Requires the California Air Resources Board (ARB) to  
          expand the Enhanced Fleet Modernization Program Plus-Up (EFMP  
          Plus-Up) in disadvantaged communities and in areas with poor air  
          quality to increase the retirement and replacement of  
          high-polluting vehicles.  Specifically, this bill:  


          1)Makes findings and declarations regarding high polluting  
            light- and medium-duty vehicles.


          2)Declares the intent of the Legislature to expand EFMP Plus-Up  
            to help the state meet its environmental goals and maximize  
            disadvantaged community benefits.


          3)Requires ARB, in consultation with the Bureau of Automotive  
            Repair (BAR), beginning in the 2017-18 fiscal year (FY) and  
            annually thereafter, to set specific measurable goals for the  
            retirement and replacement of passenger vehicles and  
            light-duty and medium-duty trucks that are high polluters.


          4)Requires ARB, in consultation with BAR, to meet established  
            goals by updating program guidelines no later than July1,  
            2018.


          5)Requires that the updated guidelines ensure that:


             a)   Specific steps are taken such that the vehicle  
               replacement portion of the program is available to all  
               districts that have more than one million residents;








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             b)   Funding for outreach in low-income and disadvantaged  
               communities is evaluated and, if necessary, enhanced to  
               obtain established goals; and,


             c)   There are, where applicable, improved coordination,  
               integration, and partnerships with other programs that  
               target disadvantaged communities and receive Greenhouse Gas  
               Reduction Fund (GGRF) funds.


          6)Requires, no later than July 1, 2018, and every other year  
            thereafter, that ARB collect and post the following  
            information on the program's Internet Web site:


             a)   Program performance relative to adopted program goals;


             b)   An accounting that includes, but is not limited to,  
               funding allocated to the program, funding sources, and  
               program expenditures by region; and,


             c)   An analysis broken down by district of the program's  
               performance to identify areas to be emphasized when setting  
               future goals or updating program guidelines.


          7)Authorizes ARB, upon appropriation by the Legislature, to  
            allocate monies for program expansion from the EFMP  
            subaccount; the High Polluter Repair and Removal Account; or,  
            the Vehicle Inspection and Repair Fund.


          8)Defines a variety of terms.









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          9)Makes related, clarifying amendments.


          FISCAL EFFECT:  According to the Assembly Appropriations  
          Committee:


          1)Funding for the EFMP base program and EFMP Plus-Up totals  
            $12.8 million in 2015-16, with which ARB estimates will  
            provide incentives for about 1,500 vehicles.  For 2016-17,  
            proposed funding for both programs totals $37.4 million ($7.4  
            million AB 118 ((Núñez), Chapter 750, Statutes of 2007) funds  
            and $30 million Greenhouse Gas Reduction Fund), and would  
            provide incentives for about 4,500 vehicles.  The EFMP Plus-Up  
            covers only two air districts, which encompass about 55% of  
            the state's population.  Assuming the program expansion  
            required in this bill would increase the eligible population  
            by 50%, additional special-fund costs would be almost $19  
            million.


          2)The ARB currently has five positions to administer the current  
            program.  Adding three air districts to the program would  
            require at least two additional positions at an annual cost of  
            $300,000.


          COMMENTS:  To help improve air quality and meet the state's  
          greenhouse gas (GHG) 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  
          disadvantaged communities and lower-income residents who tend to  
          own and operate some of the oldest, high-polluting cars on our  
          roads.  Specifically, Consumer Assistance Program (CAP),  
          administered by BAR, offers up to $500 to low-income drivers to  
          complete repairs needed to pass a smog test.  The EFMP,  








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          administered by ARB, augments CAP by allowing vehicles to be  
          retired, without first having to fail a smog test, by  
          authorizing vouchers to replace older, high-emitting vehicles  
          with cleaner cars.  The program offers consumers $1,000 to  
          retire an older, high polluting vehicle ($1,500 for low-income  
          consumers).  


          In addition, ARB also administers EFMP Plus-Up in two air  
          districts in California that are classified as extreme  
          non-attainment (San Joaquin Valley and South Coast).  EFMP  
          Plus-Up, with funding from the GGRF, provides additional down  
          payment incentives (on top of the "base" EFMP incentives) to  
          further encourage individuals to retire and replace their older,  
          less-efficient vehicles with advanced-technology cars.  By  
          "stacking" incentive payments, low-income consumers can receive  
          between $4,000 and $9,500 toward the purchase of a replacement  
          vehicle, depending on the make and model of the replacement  
          vehicle.  While the program allows individuals to trade in their  
          high-polluting cars for cleaner gas-powered cars, greater  
          incentives are provided if the individual opts to purchase a  
          hybrid, hybrid-electric, or fully electric vehicle.  


          According to the author, EFMP Plus-Up has 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.  He also notes that the program is  
          helping the most disadvantaged Californians and making  
          substantial inroads in retiring older, high-polluting vehicles  
          and improving air quality in regions of the state with some of  
          the worst air quality.  


          The author points out that other regions of the state, who are  
          on the verge of non-attainment of federal clean air standards,  
          would also benefit from this program and that these regions,  
          which include the Sacramento Metropolitan Air Quality Management  
          District have expressed an interest in being able to utilize  








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          this successful program.  The author contends that expanding  
          these programs will help other areas of the state improve their  
          air quality and reduce GHG emissions.  


          Please see the policy committee analysis for full discussion of  
          this bill.




          Analysis Prepared by:                                             
                          Victoria Alvarez / TRANS. / (916) 319-2093  FN:  
          0003244