BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
823 (Hill)
Hearing Date: 8/24/2009 Amended: 7/14/2009
Consultant: Bob Franzoia Policy Vote: Trans 7-3
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BILL SUMMARY: AB 823 would increase from $1,500, or more, if
cost effective, to $2,000, the amount to be paid by the Bureau
of Automotive Repair (BAR) within the Department of Consumer
Affairs to the owner of a vehicle that has failed its most
recent smog check inspection. This bill would authorize the
department to offer transit vouchers to the owner of a vehicle
who retires the vehicle from operation in accordance with the
Consumer Assistance Program (CAP). This bill would make the
test only station repair assistance program available only to
low income participants whose income does not exceed 225 percent
of the federal poverty level.
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Fiscal Impact (in thousands)
Major Provisions 2009-10 2010-11 2011-12 Fund
Expanded vehicle retirement Up to $11,000 to $22,000
annually* Special**
program
BAR program administration $0 to up to $258 annually
Special**
Reduction in eligibility Estimated savings of
($7,250) annually Special**
for vehicle repair assistance
* Assumes 22,000 vehicle retirements at $500.00 to $1,000.00
over current payment.
** High Polluter Repair and Removal Account (all costs beginning
July 1, 2010). For 2009-10, this account will end the year with
a projected fund balance of $2,240,000. This account made a
$20,000,000 loan to the General Fund in 2008-08.
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STAFF COMMENTS: This bill meets the criteria for referral to the
Suspense File.
According to the Air Resources Board (ARB) there are currently
over one million vehicles retired in the state every year as
part of normal fleet turnover with the state's low-emission new
car standards dependent on this turnover for emission
reductions. However, extra emission reductions benefits can be
achieved through the early retirement of fully functional but
high emitting vehicles. The BAR vehicle retirement program
retires roughly 22,000 older vehicles annually and local air
districts scrap an additional 5,000 vehicles, primarily for air
quality benefits. By 2010, vehicles 15 years and older will
account for about 20 percent of the fleet (and about 14 percent
of the miles traveled), but still be responsible for over 62
percent of the smog-forming emissions from cars.
The CAP provides financial assistance for qualified consumers
whose vehicles fail the biennial Smog Check. The statutory
authority for CAP is implemented through
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AB 823 (Hill)
regulations adopted by BAR. Participation in CAP is limited to
available funds and under the following options:
Repair Assistance
Qualified consumers can receive financial assistance toward
emissions-related repairs to help their vehicles pass their Smog
Check inspection. Approved applicants must take their vehicles
to a Gold Shield repair station for repairs. Gold Shield
stations are licensed Smog Check facilities that are
independently owned and under contract with BAR. There are two
ways to qualify for repair assistance.
(1) Income Eligible - Qualified consumers whose household
incomes meet the income guidelines (derived from the federal
poverty guidelines) can receive financial assistance toward
emissions-related repairs. A copayment is required and is
applied toward diagnosis and emission-related repairs.
(2) Directed Vehicle Eligible - Certain vehicles are
directed to Test-Only or Gold Shield stations for their initial
smog tests. If a Department of Motor Vehicles registration
notice requires a test at a Test-Only or Gold Shield station,
and the vehicle fails, the owner may qualify for financial
assistance toward emissions-related repairs at a Gold Shield
repair station. Test-Only stations cannot perform repairs. A
copayment is required and will be applied toward diagnosis and
emissions-related repairs.
Vehicle Retirement
Eligible consumers can receive payment to retire their
high-polluting vehicle. There are no income or Directed Vehicle
eligibility requirements. Approved applicants must take their
vehicle to an authorized dismantler. The vehicle must pass a
visual and operational inspection before it is retired.
Chapter 761/2006 (AB 1870, Lieber) increased the maximum amount
BAR may pay a vehicle owner to retire his or her vehicle and
authorized BAR to increase the amount up to $1,500 if it deems
doing so is cost-effective. (BAR's administrative costs for
this bill would be $0 if it determines the increase is not
cost-effective to $258,000 annually if it determines otherwise.)
At this time, BAR is in the process of reviewing its guidelines
to determine whether to increase the cap.
A total of 88,000 vehicles have been retired since the program's
inception. In 2005-06, 2006-07, and 2007-08, 15,536, 16,906, and
21,909 vehicles respectively, were retired.
In addition, 235,000 vehicles have received repair assistance
since the program's inception.