BILL ANALYSIS
AB 823
Page 1
Date of Hearing: April 29, 2009
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Kevin De Leon, Chair
AB 823 (Hill) - As Amended: April 20, 2009
Policy Committee:
TransportationVote:10-1
Urgency: No State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill increases the amount paid to an owner of a vehicle
that fails smog check where the owner chooses to retire the
vehicle, and restricts such funding to low-income individuals.
Specifically, this bill:
1) Increases, from $1500 to $2000, the amount the Bureau of
Automotive Repair (BAR) must pay to an owner of a motor
vehicle that has failed a smog check who decides to retire
the vehicle.
2) Limits eligibility to receive financial assistance from
the High Polluter Repair and Removal Account (HPRRA) to
repair a vehicle that fails smog check to those vehicle
owners whose annual income is 225% of the federal poverty
level, including owners whose vehicles failed smog check at
a test-only station.
3) Authorizes BAR to issue transit vouchers instead of
$2000 to owners of vehicles who choose to retire their
vehicles.
FISCAL EFFECT
1) Annual costs, starting in 2010-11, of as much as $30
million in increased amounts of financial assistance for
vehicle retirement. (HPRRA.)
2) Annual savings, starting in 2010-11, of approximately $4
million resulting from elimination of financial assistance
repair of non-low income vehicle owners. (HPRRA.)
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3) Annual cost, starting in 2011, of about $100,000 for
increased program activity in response to increased program
payments. (HPRRA and Enhanced Fleet Modernization
Subaccount.)
COMMENTS
1) Rationale. According to the Air Resources Board (ARB),
most vehicular air pollution comes from the minority of
older vehicles. BAR's vehicle scrappage program is premised
on the cost-effectiveness of paying to remove these older,
polluting vehicles from the road. The author notes,
however, while there are as many as three million vehicles
15 years and older on the road, only 20,000 people
participate in BAR's scrappage program each year. The
author contends that increasing the amount BAR pays to the
owners of such vehicles to scrap them will lead more people
to participate in the program.
In addition, the author seeks to limit participation in the
vehicle repair financial assistance program to those
individuals least able to afford to maintain or repair
their vehicles.
Finally, the author contends that allowing BAR to issue
transit vouchers instead of cash will encourage transit
ridership and avoid harmful emissions associated with
driving.
2) Background. Current law establishes the smog check
program, administered by BAR and ARB, which generally
requires vehicles that are registered in non-attainment
areas for ozone or carbon monoxide to undergo biennial smog
checks. Vehicles that pass the inspection are provided a
certificate of compliance and are allowed to be registered
and driven for another two years. Vehicles that fail smog
check must be repaired or retired ("scrapped").
BAR offers financial assistance of up to $450 for vehicle
repair, with eligibility limited to individuals with
incomes at 200% of the federal poverty level, though BAR
may increase the maximum income level to 225%. However, a
vehicle owner, regardless of income, is eligible to receive
financial assistance for vehicle repair if the vehicle
failed smog check inspection at a "test-only" facility-one
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that conducts the smog check but that does not offer repair
services.
Alternatively, owners of older vehicles are sometimes
offered the option of retiring their vehicles and receiving
$1,500 from the state. The program establishes no income
level for participation in the voluntary "scrappage"
program.
3) Federal Poverty Level. The 2008 federal poverty level
for a household of four persons is $21,200. If the current
income cap for low-income repair cost assistance is set at
225% of the federal poverty level, motorists from a
household of four persons would be eligible for this
assistance if their household income is less than $47,700.
Since the median household income for a family of four in
California is currently about $55,400, many households in
California would be eligible for BAR's low-income repair
cost assistance if the threshold is set at 225%.
4) Related Legislation.
a) AB 859 (Jones) is similar to this bill in that it
requires vehicles 15 years and older to receive annual smog
check inspections, increases the amount of financial
assistance to repair a high polluting vehicle from $450 to
$750, and eliminates the ability of non-low income vehicle
owners to receive financial assistance under the program.
AB 859 passed the Transportation Committee 8-6.
b) AB 118 (Nunez), Chapter 750, Statutes of 2007,
established 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.
Analysis Prepared by : Jay Dickenson / APPR. / (916) 319-2081