BILL ANALYSIS
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THIRD READING
Bill No: AB 823
Author: Hill (D), et al
Amended: 9/1/09 in Senate
Vote: 21
SEN. TRANSPORTATION & HOUSING COMMITTEE : 7-3, 7/7/09
AYES: Lowenthal, DeSaulnier, Harman, Kehoe, Pavley,
Simitian, Wolk
NOES: Huff, Ashburn, Hollingsworth
NO VOTE RECORDED: Oropeza
SENATE APPROPRIATIONS COMMITTEE : 8-5, 8/27/09
AYES: Kehoe, Corbett, Hancock, Leno, Oropeza, Price, Wolk,
Yee
NOES: Cox, Denham, Runner, Walters, Wyland
ASSEMBLY FLOOR : 56-19, 6/3/09 - See last page for vote
SUBJECT : Motor Vehicle Inspection and Maintenance
program:
Consumer assistance
SOURCE : Author
DIGEST : This bill limits eligibility to receive
financial assistance from the High Polluter Repair and
Removal Account to repair a vehicle that fails smog check
to low-income vehicle owners, including owners whose
vehicles failed smog check at a test-only station.
CONTINUED
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ANALYSIS :
Smog Check Program
To meet federal air quality standards, existing law
requires California-registered gasoline-powered vehicles,
and beginning January 1, 2010 certain diesel-powered
vehicles, to undergo biennial smog inspections to measure
motor vehicle-related pollutants. New vehicles six model
years old and newer, vehicles with a pre-1976 model year,
electric vehicles, motorcycles, and large commercial
vehicles are exempt form the smog check program.
Upon initial registration and upon a change of ownership
and registration of a vehicle, the vehicle owner must
submit to the Department of Motor Vehicles (DMV) a valid
certificate of compliance indicating that the vehicle has
passed its smog inspection. If a vehicle fails any
component of a smog inspection, the vehicle owner must,
with some exceptions, repair the vehicle and pass a
subsequent smog inspection before being able to register or
renew the registration of the vehicle.
Each year, BAR directs a certain percentage of vehicles
that it deems to be "high emitters" (currently about 42
percent of vehicles subject to the program) to specified
"test-only" stations. Test-only stations are those that
test, but do not repair, vehicles.
Under existing law, BAR administers a Consumer Assistance
Program that provides financial support to assist vehicle
owners who have failed their smog inspection. Vehicle
owners have the following options.
1. Repair Cost Waiver . A waiver allows a vehicle owner to
register his or her vehicle, even if it does not pass a
smog inspection. A vehicle owner qualifies for a repair
cost waiver after he or she spends at least $450 for
repairs, including parts and labor. For low-income
vehicle owners, defined as a person whose income does not
exceed 185 percent of the federal poverty level, the
vehicle owner qualifies for the repair cost waiver (known
in this case as an "economic hardship extension") if an
estimate for repairs exceeds $250. A vehicle owner may
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apply for only one repair cost waiver for the life of a
vehicle. Failures resulting from emission control
equipment that is missing or that has been tampered with
are not eligible for a repair cost waiver.
2. Repair Assistance . Two categories of vehicle owners are
currently eligible for repair assistance under this
program. The first consists of low-income vehicle
owners, defined as persons whose income does not exceed
185 percent of the federal poverty level, which BAR has
authority to increase to 225 percent, whose vehicles fail
a smog inspection. The second category of eligible
vehicle owners consists of persons who were directed to a
test-only facility and whose vehicles fail the smog
inspection. Under the repair assistance program, BAR
will pay up to $500 for repair costs, subject to a
co-payment of $20 for low-income persons and $100 for all
other persons.
3. Vehicle Retirement . The vehicle retirement program
provides vehicle owners compensation to voluntarily
retire (or scrap) their vehicles that have failed a smog
inspection. Under this option, a vehicle owner applies
to BAR and receives an approval letter by mail. The
owner then takes the approval letter to a vehicle
dismantler under contract with BAR for retirement and
payment. The vehicle is removed from operation and
dismantled. Existing law allows BAR to pay an owner to
elects to retire his or her vehicle up to $1,500 and to
opt to pay more than $1,500 if it determines that doing
so will e cost-effective. Currently, BAR provides $1,000
to a vehicle owner who retires his or her vehicle and is
working in cooperation with the Air Resources Board (ARB)
to amend BAR's regulations to provide $1,500 to owners
who are low-income.
To be eligible for any of these consumer assistance
options, the vehicle must have failed its smog inspection
and have been continuously registered for at least 24
months, with some exceptions, in an area where vehicles are
subject to biennial smog inspection.
AB 118: Enhances Fleet Modernization Program
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AB 118 (Nunez), Chapter 750, Statues of 2007, established
the Enhanced fleet Modernization Program, a voluntary
vehicle retirement program intended to augment existing
vehicle retirement programs by targeting the highest
emitting vehicles in areas with the worst air quality. ARB
adopted guidelines for the program on June 25, 2009, which
BAR will implement beginning January 1, 2010. In general,
the eligibility criteria are more liberal than those for
the Consumer Assistance Program. Under the Enhanced Fleet
Modernization Program, vehicle owners will receive a cash
incentive of $1,000 to retire their vehicle, $1,500 if the
owner is low-income. In the South Coast air basin and the
San Joaquin Valley, which have the worst air pollution in
the state, the program targets and solicits high-emitting
vehicles to participate in the program, providing an
additional $2,000 voucher to be used to replace the
high-emitting vehicle with a qualified low-emission
vehicle. For low-income vehicle owners, the voucher is
worth $2,500.
This bill:
1.Limits eligibility to receive financial assistance from
the High Polluter Repair and Removal Account to repair a
vehicle that fails smog check to low-income vehicle
owners, including owners whose vehicles failed smog check
at a test-only station.
2.Establishes that "low-income motor vehicle owner" is a
person whose income does not exceed 225 percent of the
federal poverty level.
Background
According to ARB, there are currently over one million
vehicles retired in the state every year as part of normal
fleet turnover and the state's low-emission new car
standards are 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 are districts scrap an additional 5,000
vehicles, primarily for air quality benefits. By 2010,
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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 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
under the following options:
1.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.
A. 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.
B. Directed Vehicle Eligible. Certain vehicles are
directed to Test-Only or gold Shield stations for
their initial smog tests. If the DMV 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
emission-related repairs.
2.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
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pass a visual and operational inspection before it is
retired.
AB 1870 (Lieber), Chapter 761, Statues of 2006, 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 ti 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 and 21,909 vehicles respectively, were retired. In
addition 235,0000 vehicles have received repair assistance
since the program's inception.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
Fiscal Impact (in thousands)
Major Provisions 2009-10 2010-11
2011-12 Fund
BAR program $0 to up to $258
annually Special*
Reduction in eligibility Estimated savings of $7,250)
annually Special*
for vehicle repair
assistance
*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 loan
to the General
Fund in 2008-09.
SUPPORT : (Verified 8/28/09)
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Alliance of Automobile Manufacturers (source)
Association of International Automobile Manufacturers
Automobile Club of Southern California
California Emissions Testing Industries Association
California New Car Dealers Association
California State Automobile Association
California Transit Association
National Parks Conservation Association
ASSEMBLY FLOOR :
AYES: Adams, Ammiano, Arambula, Beall, Blumenfield,
Brownley, Buchanan, Caballero, Carter, Chesbro, Coto,
Davis, De La Torre, De Leon, Emmerson, Eng, Evans, Feuer,
Fong, Fuentes, Furutani, Galgiani, Gilmore, Hall,
Hayashi, Hernandez, Hill, Huber, Huffman, Jeffries,
Jones, Krekorian, Lieu, Bonnie Lowenthal, Ma, Mendoza,
Monning, Nava, Nestande, Niello, John A. Perez, V. Manuel
Perez, Portantino, Price, Ruskin, Salas, Saldana,
Skinner, Solorio, Swanson, Torlakson, Torres, Torrico,
Tran, Villines, Bass
NOES: Anderson, Bill Berryhill, Tom Berryhill, Blakeslee,
Conway, Cook, DeVore, Duvall, Fletcher, Gaines, Garrick,
Hagman, Knight, Logue, Miller, Nielsen, Silva, Smyth,
Audra Strickland
NO VOTE RECORDED: Block, Charles Calderon, Fuller, Harkey,
Yamada
JJA:cm 9/1/09 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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