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)
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|COMMITTEE VOTE: |12-0 |(August 26, 2010) |RECOMMENDATION: | concur |
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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.
Establishes the vehicle retirement reimbursement amount at $1,000
for all other vehicle owners who do not meet the low-income
threshold as modified by this bill. Specifically extends these
provisions to the two separate BAR-administered vehicle
retirement programs.
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,
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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.
Directs any savings resulting from this new restriction 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.
3)Clarify existing law to allow people to retire their vehicle any
time they fail smog check (currently BAR regulations require
people to wait until their vehicle registration date).
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,
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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.
5)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.
6)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.
7)Pursuant to BAR regulations, requires vehicle owners to wait
until their registration is due before they can retire their
vehicle.
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
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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 225% of the federal poverty
level.
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.
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Related bill: This bill is very similar to AB 823 (Hill) which 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.
Analysis Prepared by : Ed Imai / TRANS. / (916) 319-2093
FN: 0006799