BILL ANALYSIS
AB 823
Page 1
ASSEMBLY THIRD READING
AB 823 (Hill)
As Amended June 2, 2009
Majority vote
TRANSPORTATION 10-1 APPROPRIATIONS 12-5
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|Ayes:|Eng, Blumenfield, |Ayes:|De Leon, Ammiano, Charles |
| |Buchanan, Furutani, | |Calderon, Davis, Fuentes, |
| |Galgiani, | |Hall, John A. Perez, |
| |Bonnie Lowenthal, Niello, | |Price, Skinner, Solorio, |
| | | |Torlakson, Krekorian |
| |John A. Perez, Solorio, | | |
| |Torlakson | | |
| | | | |
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|Nays:|Miller |Nays:|Nielsen, Duvall, Harkey, |
| | | |Miller, |
| | | |Audra Strickland |
| | | | |
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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)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.
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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 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 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
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guidelines adopted by the ARB.
FISCAL EFFECT : According to the Assembly Appropriations
Committee:
1)Annual costs to be paid from an existing special fund balance,
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.).
3)Annual special fund 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 : 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, this bill 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
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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.
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.
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."
Analysis Prepared by : Ed Imai / TRANS. / (916) 319-2093
FN: 0001368