BILL ANALYSIS
AB 787
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 787 (Hill)
As Amended August 20, 2010
Majority vote
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|ASSEMBLY: | |(June 2, 2009) |SENATE: |27-5 |(August 25, |
| | | | | |2010) |
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(vote not relevant)
Original Committee Reference: E. & R.
SUMMARY : Revises the income eligibility level for vehicle
owners requesting assistance from the California Department of
Consumer Affairs, Bureau of Automotive Repair (BAR) and the
amount a person can receive to retire their vehicle.
The Senate amendments deleted the Assembly version of this bill,
and instead:
1)Establish the amount BAR is required to pay a low-income
vehicle owner to retire their vehicle at $1,500, if their
vehicle fails smog inspection and the vehicle has been
continuously registered in the state for at least two years
prior to vehicle retirement. Establish the retirement
reimbursement amount at $1,000 for all other vehicle owners
who do not meet the low-income threshold as modified by this
bill.
2)Provide discretion to BAR to increase these amounts without
any upper limit considering criteria not limited to the
following:
a) Age of the vehicle;
b) Emission benefit of the vehicle's retirement;
c) Emission impact of any retirement vehicle; and,
d) Location of the vehicle in an area of the state with the
poorest air quality.
1)Delete the provision of law that allows repair assistance for
owners of directed vehicles who are not low-income earners.
AB 787
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Direct any savings to the vehicle retirement program fund.
2)Increase the maximum income eligibility level from 185% to
225% of the federal poverty level for low-income motor vehicle
owners who may request vehicle repair consumer funding
assistance.
EXISTING LAW :
1)Establishes the smog check program, administered by BAR and
the California Air Resources Board (ARB). Requires,
generally, vehicles that are registered in non-attainment
areas for ozone or carbon monoxide pollutant emissions to
undergo biennial smog checks.
2)Authorizes BAR to enforce and administer the smog check
program to ensure the reduction of gaseous emissions of
hydrocarbons, carbon monoxide, and oxides of nitrogen.
Directs that a certain percentage of vehicles (directed
vehicles) deemed to be "high emitters" (currently about 42% of
vehicles subject to the program) to specified test-only
stations. Test-only stations are those that test, but do not
repair, vehicles.
3)Authorizes a state consumer assistance program offering
eligible motorists to receive up to $450 to fix their vehicle
or $1,500 to retire it. Authorizes BAR to increase its
contribution for motor vehicle repairs if it determines that
the expenditure is cost effective (accordingly, BAR has
increased the repair level to $500). Authorizes BAR to pay an
owner of a motor vehicle who elects to retire the vehicle more
than $1,500 if it determines that the increased payment is
cost effective.
4)Establishes the maximum income level for eligible motorists to
qualify for the consumer assistance program, for vehicle
repairs, at 185% of the federal poverty level as published
quarterly in the "Federal Register." Authorizes BAR, at its
discretion, to increase the maximum income level up to 225%.
However, authorizes an owner of a directed or test-only
vehicle, regardless of income level, to receive financial
assistance for repair of their directed vehicle if it failed
smog check inspection at a test-only facility. Establishes no
income level for participation in the voluntary vehicle
retirement or "scrappage" program.
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5)Allows the use of specific air district motor vehicle funds to
be used for light-duty vehicle programs such as the voluntary
accelerated vehicle retirement program, that are optional for
local air districts that choose to administer them. The
program is also known as the car scrappage or old vehicle buy
back program that provides monetary or other incentives to
vehicle owners to voluntarily retire their older, more
polluting vehicle that, unlike the BAR program, passes the
smog check program.
6)Establishes on January 2010, pursuant to AB 118 (Nunez),
Chapter 750, Statutes of 2007, an enhanced fleet modernization
program for the retirement of high polluting vehicles that
pass smog check to be administered by BAR pursuant to
guidelines adopted by the ARB. Funding for the program from
motor vehicle registration fees would sunset on January 1,
2016.
AS PASSED BY THE ASSEMBLY , this bill pertained to election
procedures related to mail-in ballots.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, annual savings of approximately $4 million resulting
from elimination of financial assistance repair of non
low-income vehicle owners.
COMMENTS : According to the author, ARB estimates that 75% of
vehicular pollution is caused by just 25% of the oldest
vehicles. Unfortunately, BAR's vehicle retirement program fund
is continually raided for state General Fund expenditures
instead of being used to retire high polluting vehicles. Over
the last six years, about $140 million has been taken. In
addition, not enough Californians are utilizing the vehicle
retirement program. There are three million vehicles over 15
years old in California yet only about 20,000 people participate
in the program annually.
The author further contends that BAR's vehicle repair program
currently allows millionaires to receive financial assistance
for their high polluting vehicle. The millionaire has to pay
$100 towards the repair and BAR will pay up to $400. AB 787
closes this loophole. The bill would limit financial assistance
to Californians whose income level is 300% of the federal
poverty level.
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Vehicle retirement (scrappage): Scrappage is an important
component of California's State Implementation Plan, as the
state's clean air plan acknowledges the need to continue
pursuing funding for future car scrappage programs. It has been
documented that the cost-effectiveness of local air district
scrappage programs varies, with estimates of current
cost-effectiveness ranging between $1.50 and $4.50 per pound of
smog-forming pollutants. Further, according to the American
Council for an Energy-Efficient Economy, "if a new vehicle uses
half the fuel use by the vehicle if replaces, it will take only
3.3 years to offset the energy costs of producing the new
vehicle." However, some have indicated that there could be
unintended consequences relative to the vehicle retirement
program. For example, scrapping a high percentage of older
vehicles in a particular region may induce migration of older
vehicles, possibly even those from out-of-state vehicles.
This bill makes adjustments to vehicle retirement programs
administered by BAR by decreasing the amount paid to owners of
vehicles who do not qualify as low-income vehicle owners from
$1,500 to $1,000.
Vehicle repair assistance: Currently, BAR's consumer assistance
program (CAP) provides financial assistance for qualified
consumers whose vehicles fail the biennial smog check. The
statutory authority for CAP is implemented through regulations
adopted by BAR. Participation in CAP is limited to available
funds and subject to specific requirements, including income
eligibility.
The bill establishes 225% as the upper income qualification
limit for owners wishing to receive financial assistance for
repairs. Also, this bill closes a loophole in statute that
allows persons of upper income levels to receive repair
assistance from the state if their vehicle fails smog check if
directed to a test-only station.
Related bill: This bill is very similar to AB 823 (Hill) that
was approved by the Assembly Transportation Committee but was
subsequently vetoed by the Governor. In his veto message, the
Governor encouraged the author to direct any savings achieved by
the bill to the vehicle retirement program, which this bill
does.
AB 787
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Analysis Prepared by : Ed Imai / TRANS. / (916) 319-2093
FN: 0006629