BILL ANALYSIS
AB 823
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Date of Hearing: April 13, 2009
ASSEMBLY COMMITTEE ON TRANSPORTATION
Mike Eng, Chair
AB 823 (Hill) - As Amended: April 20, 2009
SUBJECT : Smog check: Vehicle Retirement Program and Repair
Assistance Program
SUMMARY : Makes substantive changes to the consumer assistance
programs of the California Department of Consumer Affairs,
Bureau of Automotive Repair (BAR). Specifically, this bill :
1)Increases the amount (from $1,500 to $2,000) that BAR is
required to pay to an owner of a motor vehicle that has failed
a motor vehicle inspection and maintenance program (smog
check) test and chooses to retire the vehicle from operation
at a BAR-authorized dismantler.
2)Removes the discretion of BAR to increase from 200% to 225%,
the maximum income level over the federal poverty level by
which an owner of a vehicle could qualify to receive funds
from the repair assistance program, and establishes 225% as
the maximum income level.
3)Eliminates the ability of non low-income vehicle owners,
including upper-income owners of vehicles, whose cars were
directed to test-only stations, to receive funding for repair
assistance through the High Polluter Repair and Removal
Account (HPRRA).
4)Authorizes BAR to issue transit vouchers in lieu of the $2,000
payment to owners of vehicles who choose to retire their
vehicles.
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
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hydrocarbons, carbon monoxide, and oxides of nitrogen.
Directs that a certain percentage of 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)Requires the periodic evaluation of the smog check program by
BAR and the State Air Resources Board (ARB). Establishes the
Inspection and Maintenance Review Committee (IMRC) that
provides periodic reviews of the smog check program to the
Legislature.
4)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 level to $500).
5)Establishes the maximum income level for eligible motorists to
qualify for the consumer assistance program, for vehicle
repairs, at 200% 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 a vehicle owner, regardless of income
level, to receive financial assistance for repair of their
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.
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 (VAHR) 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)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.
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FISCAL EFFECT : Unknown
COMMENTS : According to the author of this bill, "ARB estimates
that 75% of vehicular pollution is caused by just 25% of the
oldest vehicles. Unfortunately, BAR's vehicle scrappage program
fund is continually raided for General Fund expenditures instead
of being used to retire high polluting vehicles. Over the last
6 years, about $140 million has been taken. Since vehicle
scrappage programs are one of the most productive ways to reduce
air pollution in California, AB 823 seeks to increase the
incentive so more people will participate in the program. This
will decrease air pollution and more expeditiously utilize the
funding to prevent these funds from being used for other
purposes. In addition, not enough Californians are utilizing
the vehicle scrappage program. There are over 3 million
vehicles over 15 years old in California yet only about 20,000
people participate in the program annually. 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 823 closes this loophole. This bill would limit
participation in the repair assistance incentive program to
Californian's whose income level is 225% of the federal poverty
level. Only those making less than $52,000 would be eligible to
receive the $500 state assistance funding and would not have to
pay the $100 deductible."
This bill seeks to add incentives to the vehicle retirement
program administered by BAR by increasing the amount paid to
owners of vehicles from $1,500 to $2,000, and to also allow
transit vouchers in an unspecified amount to supplement the cash
payment amount. The bill also establishes 225% as the upper
income qualification limit for owners wishing to receive
financial assistance for repairs. Lastly, 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.
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
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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.
Arguments in Support of this bill : The California New Car
Dealers Association indicates its support of this bill for
"increasing the voucher ceiling for vehicle retirements from
$1,500 to $2,000. Several times over the last several years,
the High Polluter Repair and Removal Account (HPRRA) has run
multi-million dollar surpluses because of the strictures the
legislature has placed on who is eligible to retire vehicles.
In 2010, ARB estimates approximately 5.8 million vehicles will
be at least 15 years old. With these older vehicles
representing about 25% of the vehicle fleet, but accounting for
75% of the pollution from cars, the time to address this
critical issue is now by speeding up the pace of vehicle
retirements."
Related bills : AB 859 (Jones) of 2009, includes some similar
provisions that are considered in this bill. AB 859 passed out
of the Assembly Transportation Committee on April 13, 2009. At
some point, the income qualification provisions of AB 859 and AB
823 would need to be harmonized.
AB 501 (Calderon), Chapter 929, Statutes of 1995, establishes
the vehicle retirement program administered by BAR.
AB 118 (Nunez), Chapter 75, Statutes of 2007, creates an
enhanced fleet modernization program for the retirement of high
polluting vehicles that pass smog check to be administered by
BAR. The program is to commence January 1, 2010.
SB 23 (Cogburn), Chapter 634, Statutes of 2007, authorizes a
vehicle retirement program for the Joaquin Valley Unified Air
Pollution Control District.
AB 2316 (Ruskin), of 2008, would have required the Little Hoover
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Commission to study the various vehicle retirement programs
currently administered by BAR and local air quality management
districts. That bill was held in the Assembly Appropriations
Committee.
REGISTERED SUPPORT / OPPOSITION :
Support
AAA of Northern California
Alliance of Automobile Manufacturers
Automobile Club of Southern California
California Emissions Testing Industries Association
California New Car Dealers Association
National Parks Conservation Association
Opposition
None on file
Analysis Prepared by : Ed Imai / TRANS. / (916) 319-2093