BILL ANALYSIS Ó SENATE COMMITTEE ON APPROPRIATIONS Senator Ricardo Lara, Chair 2015 - 2016 Regular Session SB 1239 (Gaines) - Smog check: exemptions ----------------------------------------------------------------- | | | | | | ----------------------------------------------------------------- |--------------------------------+--------------------------------| | | | |Version: April 26, 2016 |Policy Vote: T. & H. 6 - 5 | | | | |--------------------------------+--------------------------------| | | | |Urgency: No |Mandate: No | | | | |--------------------------------+--------------------------------| | | | |Hearing Date: May 9, 2016 |Consultant: Mark McKenzie | | | | ----------------------------------------------------------------- This bill meets the criteria for referral to the Suspense File. Bill Summary: SB 1239 would provide an exemption from smog check requirements for motor vehicles with a model year of 1976-1980 until January 1, 2019, if the owner submits proof that the vehicle is insured as a collector car. Fiscal Impact: Unknown costs to the Bureau of Automotive Repair (BAR) to modify information technology systems. These costs would likely to be incurred a second time when the exemption expires in 2019. (Vehicle Inspection and Repair Fund) Unknown loss of smog certification revenues, potentially in excess of $150,000 for two years, depending on the number of vehicles insured as collector cars. (Vehicle Inspection and Repair Fund) ------See staff comments----- SB 1239 (Gaines) Page 1 of ? Minor and absorbable BAR costs to update smog check regulations and publications. (Vehicle Inspection and Repair Fund) Likely minor costs to the Department of Motor Vehicles (DMV) to review evidence that a vehicle is insured as a collector in order to waive the smog check requirement. (Motor Vehicle Account) Background: Existing law establishes the Motor Vehicle Inspection Program, commonly known as the smog check program, as a means to measure motor vehicle related pollutants. The program is administered by BAR and generally requires gas-powered motor vehicles to pass a biennial smog check inspection with specified exceptions, such as vehicles manufactured prior to the 1976 model year, alternative fuel vehicles, and vehicles six model years old or newer. As a condition of initial registration, upon change of ownership, and renewal of vehicle registration, the vehicle owner must submit to DMV a valid certificate of compliance indicating that the vehicle has passed its smog inspection. Existing law defines a "collector motor vehicle" as a motor vehicle owned by a collector that is used primarily in shows, parades, charitable functions, and historical exhibitions for display, maintenance, and preservation, and is not used primarily for transportation. Existing law provides a partial smog check exemption for some collector vehicles. Specifically, a collector motor vehicle is exempt from the visual and functional inspection of emission controls if it is at least 35 years old, and the owner can demonstrate that the vehicle is insured as a collector vehicle. These vehicles must still pass a functional inspection of the fuel cap, a visual inspection for liquid fuel leaks, and a tailpipe emissions test. Proposed Law: SB 1239 would exempt a motor vehicle that is insured as a collector vehicle, and manufactured after the 1976 but prior to the 1981 model year, from smog check requirements until January 1, 2019. Staff Comments: BAR data indicates that approximately 105,000 SB 1239 (Gaines) Page 2 of ? vehicles with a 1976-1980 model year were given smog check tests over the past two years. The number of vehicles with collector car insurance is unknown, but if the exemption in this bill applied to 18,200 vehicles in a given year, the revenue losses would exceed $150,000. The bill is likely to create an incentive for vehicle owners to acquire collector insurance in order to avoid smog check requirements, especially since the average smog check failure rate for vehicles with a 1976-1980 model year exceeds 30 percent (over 32,000 vehicles over the past two years). Staff notes this bill does not require a vehicle to meet the statutory definition of a "collector motor vehicle" to qualify for the smog check exemption, but the owner would be required to demonstrate that the vehicle is insured as a collector vehicle. A cursory review of insurance products indicates that collector car insurance is readily available without mileage restrictions, but the insured person must certify that the vehicle is not a "daily driver" and that all household members have a regular-use vehicle insured for daily driving. BAR indicates that the bill is likely to require modifications to information technology systems, but was unable to provide an estimate of those costs at the time of this analysis. DMV costs would be minor since the department is likely to implement the bill by requiring vehicle owners to appear in a field office for inspection of insurance documents to qualify for a waiver of the smog check requirements. Staff notes that older vehicles are typically higher polluters and have a disproportionate impact on air quality, even though they make up a very small percentage of the registered vehicles in the state. The smog check program is a measure included in the State Implementation Plan to achieve federal ozone and particulate matter standards in non-attainment areas. To the extent this bill's exemption results in a significant loss of emission reductions, the California Air Resources Board would need to conduct analysis to identify, develop, and implement substitute emission control measures to make up for those lost emission reductions. Costs to complete that work would be significant. SB 1239 (Gaines) Page 3 of ? Recommended Amendments: Staff notes that the bill is intended to apply the exemption to vehicles with a model year of 1976 through 1980, but it is currently drafted to apply to vehicles "manufactured after the 1976 model year but prior to the 1981 model year." Since existing law exempts all vehicles manufactured prior to 1976, the current bill would still require 1976 model year vehicles to comply with smog check requirements. The bill should be amended to correct this oversight. -- END --