BILL ANALYSIS Ó AB 1965 Page 1 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 | | AB 1965 Page 2 | | | | | | | | | | ------------------------------------------------------------------ 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; AB 1965 Page 3 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. AB 1965 Page 4 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, AB 1965 Page 5 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 AB 1965 Page 6 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