BILL ANALYSIS CONFERENCE COMPLETED AB 2018 Katz (D), et al Proposed Conference No. 1, 3/9/94 27 - Urgency NOT RELEVANT NOT RELEVANT NOT RELEVANT SUBJECT: Vehicles: Inspection/maintenance (I/M Smog Check Program) SOURCE: Authors ____________________________________________________________________________ DIGEST: Conference Committee Amendments of 3/9/94 delete prior šversion of the bill relating to restricted drivers licenses and travel štrailers. The bill in its present form provides, along with SB 521 (Presley), the šcompromise restructuring of the vehicle smog check program to meet federal šclean air act. AB 2018 basically re-enacts SB 629 (Russell) with the following changes: 1. Makes the repair cost limits effective January 1, 1995 instead of 1/1/96. 2. Requires annual testing of gross polluters at a test-only station for š at least two, but not more than five consecutive years, as the department determines to be necessary to ensure that the program meets federal requirements. 3. Provides that test-only stations would distribute regional tests of š smog repair stations compiled by the Bureau of Automative Repair. 4. Deletes reference of a Rand Corporation independent analysis of the I/M š program from legislative findings. 5. Deletes provisions which would have given EPA appointments to the š Inspection/Maintenance Review Committee. 6. Repeals by a I/M Review Committee SB 629 provisions of law of š contracting-out for a review of the enhanced I/M program and provisions of implementing the Gold Shield smog testing program which had been in SB 119, which died in committee. 7. Requires Cal EPA, the Air Resources Board, Department of Consumer š Affairs and the federal EPA to jointly undertake the remote sensing pilot project with input from the committee. The project is defined in a protocol and all parties are bound by the terms of a Memorandum of Agreement. 8. Appropriates $12 million from the Vehicle Inspection and Repair Fund to š the Department of Consumer Affairs and the State Air Resources Board to implement the enhancements to the Vehicle Inspection and Maintenance Program enacted in 1994. No transfer is to be made to the General Fund from the Vehicle Inspection and Repair Fund pursuant to the 1993 Budget Act. 9. Allows the transfer of proceeds of the litigation known as MDL Socket š No. 150 AWT into the Vehicle Inspection and Repair Fund, which can be available upon appropriation of the Legislature, for use by Consumer Affairs to establish and implement a program for the repair, retrofit, or removal of gross polluting vehicles. ANALYSIS: Since March of 1984, the Bureau of Automotive Repair (BAR) šhas operated the state's Smog Check program, which was authorized by SB 33 š(Presley, 1982). SB 33 also established the California I/M Review šCommittee to monitor the program and keep the Legislature informed of the šemissions control results being achieved. Under the smog check program, gasoline, liquid propane (LPG) and compressed šnatural gas (CNG) fueled cars and trucks must be inspected at private, BAR- šlicensed facilities known as a "Smog Check" stations once every two years šand upon change of ownership. Repairs are required for vehicles that fail što pass a visual and functional inspection, or a tailpipe emissions test. šEnforcement of program requirements is done through the Department of Motor šVehicles (DMV) registration process: vehicles may not be reregistered šwithout meeting the smog check requirements. Senate Bill 1997 (Presley, 1988) made a number of changes and enhancements što the Smog Check program which became effective on January 1, 1990. The Administrator of the federal EPA and the Secretary of the federal šDepartment of Transportation (DOT), in an April 15, 1993 joint letter to šGovernor Wilson, indicated their concerns over vehicle inspection šlegislation pending in California. The EPA and DOT advised that neither SB š1195 nor SB 119, in their earlier versions, fully addressed federal I/M šrequirements and would not be approved by federal officials. As a result, šthe EPA and DOT gave notice they intended to impose highway funding and šemissions offset growth sanctions on California. CONTINUED AB 2018 Page 3 SB 119 was subsequently amended and the federal EPA stated that the revised šprovisions would meet the requirements of the Clean Air Act Amendments. SB š119 was considered by the committee on August 31, 1993 but failed passage šon a 3-7 vote. SB 1195, however, was approved by the committee on a 7-2 švote at the same hearing. The contents of SB 1195 later were amended into SB 629 (Russell-Katz) along šwith further revisions to an enhanced decentralized I/M program. SB 629 šwas approved by the Assembly 65-9 and referred to the Senate for action. šFederal EPA Administrator Browner then notified the Legislature that she šwould withhold the imposition of federal sanctions on California for a šspecified time period if legislation was not enacted prior to the 1993 šadjournment. No action was taken on SB 629. In January of 1994 the Senate špassed SB 629 by 26-5, pg. 3739, January 20, 1994. AB 2018 re-enacts SB 629 with the modifications mentioned in the digest športion as follows: 1. Declare the intent of the Legislature and Governor to a) meet or š exceed the air quality standards enacted in the federal Clean Air Act Amendments of 1990, b) enhance and improve the existing vehicle inspection and maintenance network, c) periodically monitor the network's performance against stated objectives and d) enact additional improvements and safeguards, if necessary, to meet the air quality standards of the federal Clean Air Act Amendments of 1990. 2. Make several findings and declarations, including studies show only a š minority of motor vehicles produce a disproportionate amount of the vehicular pollution, that and remote sensing technology offers great promise as a cost-effective means to detect the worst polluters. 3. Establish an enhanced I/M program in all urbanized areas of the state š classified as "nonattainment" areas, continue the current (basic) program in other areas where it is now operating and permit air districts in attainment or basic program areas to request implementation of all or part of the enhanced program in their jurisdictions. 4. Repeal existing emission reduction standards and instead require the š state to meet or exceed the reductions required by the EPA for hydrocarbons, carbon monoxide and nitrogen oxides. CONTINUED AB 2018 Page 4 5. Raise the (untampered) vehicle repair cost limit to a minimum of $450 š (consistent with federal law), operative January 1, 1995 or when a mandated repair subsidy program is implemented, whichever occurs first. The repair subsidy program must be implemented by January 1, 1996. It would continue the no cost limit provisions for tampered vehicles, gross polluters and apply this to vehicles previously issued a cost repair waiver. 6. Add to the testing procedures a functional test of the fuel evaporative š and crankcase ventilation systems, use of a loaded mode dynamometer and other testing and sophisticated equipment to detect nonexhaust-related volatile organic compound emissions and meet the federal requirements. 7. Require establishment of a roadside emissions auditing and testing š program to identify gross polluting vehicles, which the bill would define. The program would include remote sensing technology, pullovers for random roadside testing and make it illegal to operate or leave standing on a highway a gross polluting vehicle. A $500 penalty fee would be imposed for failure to repair a gross polluter or have it fully inspected at a testing facility in addition to the no repair cost limit requirement. 8. Require the Department of Consumer Affairs (DCA) to design and š establish a centralized computer database and network linked to testing and repair facilities to discourage and thwart vehicle owners from "shopping" for compliance certificates and to identify test stations for investigation of fraud. The computer network would be accessible on a "real time" (immediate) basis to provide vehicle specific information, prior test information and vehicle histories, test failure rates by vehicle class and station and related program information. 9. Direct DCA to establish stricter licensure, renewal and training š standards for Smog Check "technicians" (currently "mechanics"), including provisions for training facility incentives and remedial training. It would provide for inspection station or technician license suspensions for up to 60 days for specified offenses and establish procedures and grounds for permanent revocation of a license for fraudulent or improper testing or repair. It would also provide for a five-year license suspension for motor vehicle dealers who fraudulently certify vehicles. 10. Require the DCA to ensure sufficient number of test-only facilities to š provide current testing for vehicles identified as gross polluters. It would require up to 2% of all vehicles to be inspected at a test- š only facility and ensure that these vehicles are a statistically significant sample of all vehicles subject to the I/M program. 11. Require random periodic inspection by the state of at least 2% of the š business fleet vehicles authorized to be self-certified by fleet operators. 12. Require the department to develop and implement a repair subsidy š CONTINUED AB 2018 Page 5 program not later than January 1, 1996, and also require the department to develop and continuously conduct a public information program to maintain support for the smog check program. It would require the ARB to establish an emissions credit exchange and allow air districts to generate credits from contributions toward the subsidy repair program. 13. Re-establish and reconstitute the I/M Review Committee as a formal 13- š member appointed body (9 by the Governor, 2 by the Senate and 2 by the Assembly). Members would serve four-year terms and represent specific constituencies and disciplines. It would direct the committee to analyze the I/M program and recommend improvements in its effectiveness, reporting to the Governor and Legislature annually. 14. Require civil penalties of $150 to $2500 per day for fraud and š specified violations of I/M program requirements (versus current $500 penalty). 15. Require Cal-EPA, Air Resources Board, Department of Consumer Affairs, š and the federal EPA to jointly undertake a pilot demonstration program to make determinations on the emission reduction effectiveness of alternative loaded mode emission tests compared to the IM240 test, provide for a remote sensing-based program that identifies gross polluting and other vehicle needing of repair, qualify emission reductions above and beyond those required by federal EPA regulations, achievable from other program enhancements, and to determine the extent to which the capacity of the test-only station needs to be expanded to comply with EPA performance standards. Requires Cal-EPA and the federal EPA to enter into a memorandum of š agreement to establish the protocol for the project. 16. Double-joined with SB 521. Note: At the end of this analysis is a comparison of the major elements šcontained in SB 629 with those proposed in this bill and SB 521. FISCAL EFFECT: Appropriation: Yes Fiscal Committee: Yes Local: Yes Appropriates $12,012,000 from the Vehicle Inspection and Repair Fund to the šDepartment of Consumer Affairs for purposes of the bill. Prohibits štransfers from the General Fund from the Vehicle Inspection and Repair Fund špursuant to the Budget Act of 1993. Provides a future funding source for a šprogram to repair, retrofit, or removal of gross polluting vehicle by šdirecting funds California may receive from the MDL150 litigation. CONFERENCE COMMITTEE VOTE: Senate Journal, 3/9/94, Page 4086 CONTINUED AB 2018 Page 6 RJG:jk 3/11/94 Senate Floor Analyses SMOG CHECK PROGRAM COMPARISON OF MAJOR ELEMENTS: SB 629 AND PROPOSED AB 2018 (KATZ) AND SB š521 (PRESLEY) CONFERENCE REPORTS Status: AB 2018/SB 521 approved by Conference Committee 3/9 Effective Date SB 629: Program becomes operative January 1, 1995. Proposed: Contains urgency clause, to take effect immediately. Test-only stations SB 629: BAR would contract for expansion of its current system of test- šonly referee stations for the "enhanced areas". The following vehicles šwould be required to be tested at referee stations: gross polluters, šincluding vehicles detected by remote sensing (RSD); a 2 percent random šsample of vehicles; tampered vehicles, etc. Proposed: California commits to contracting with one or more contractors šfor a system of test-only stations which in 1995 will have the annual šcapacity to test 15 percent of the vehicle fleet in the enhanced areas that šis subject to testing. Ultimate expansion of test-only stations SB 629: If necessary to meet EPA requirements, California commits to šimplement SB 119 (Presley) in the enhanced areas, which calls for 100 špercent of initial biennial smog checks to be done at test-only stations, šafter June 30, 1995. Proposed: If necessary to meet EPA requirements, California agrees to šexpand the test-only network in enhanced areas after conclusion of the špilot project, to meet EPA's performance standard, in 1996. This would be šsubstantially less than 100 percent of initial biennial smog checks. The šexpansion could be accomplished either by an expansion of the test-only šcontract or by other licensed test-only stations, as determined by the šstate. Repair Cost Limits SB 629: $450, except no limit applies to gross polluters. Effective šJanuary 1, 1996, or whenever a buyback program is implemented. Proposed: Same as SB 629, except effective January 1, 1995 as required by š CONTINUED AB 2018 Page 7 federal regulation. Annual testing of gross polluters SB 629: Would require annual testing for five years as one of the šadditional steps that BAR would implement if needed to meet federal šrequirements. Proposed: Annual testing would be required for two to five years, if BAR šdetermines this is necessary to meet federal requirements. Referee Stations SB 629: Existing contracted network is to be expanded to allow referee šstations to do some test-only work beyond traditional referee functions šsuch as approving repair cost waivers. Proposed: BAR may require some or all contracted test-only stations to šperform traditional referee functions. Distribution of lists of smog repair stations SB 629: Not specified. Proposed: Test-only stations would distribute regional lists of smog šrepair stations prepared by BAR. Appointment of I/M Review Committee: SB 629: Provides that if the SB 629 I/M Review Committee is not fully šappointed by California authorities by April 30, 1994, EPA makes the šappointments. SB 629 becomes operative January 1, 1995. Proposed: Provides for no EPA appointments. Remote Sensing Pilot Project SB 629: The I/M Review Committee would design the RSD pilot project, to be šcarried out by BAR. The Committee would later decide whether RSD expansion šstatewide will reduce pollution sufficiently to satisfy EPA requirements. Proposed: BAR, CalEPA, ARB and EPA jointly carry out the RSD pilot project šby the end of 1994, with input from the I/M Review Committee. The project šis defined in the Protocol and all parties are bound by the terms of the šMOA. In addition to RSD, other methods of targeting gross polluters will šbe tested, as will the effectiveness of less-costly dynamometers such as šASM and RG 140. Appropriation SB 629: Contains no appropriation to fund BAR/Cal EPA work in šdemonstration program or other enhanced activities. Proposed: Contains an appropriation to fund expanded activities. Also š CONTINUED AB 2018 Page 8 provides a future funding source for the buyback program by directing funds šCalifornia may receive f rom the MDL 150 litigation to this purpose. Other Items Proposed: o BAR could award five-year contracts for test-only stations, rather than šthe current three-year limit, and could request additional exemptions from šstate contracting procedures if necessary to expedite changes to the smog šcheck program. o BAR quality assurance inspectors would have access to smog station records. o BAR would have the ability to require manufacturers of smog check šequipment to provide financial security for any warranties they offer. 3-10-94 CONTINUED