Southern California

March 7, 2007, 10:00 a.m.
Bureau of Automotive Repair
1180 Durfee Avenue, Suite 120
Conference/Training Room
South El Monte, CA 91733

Northern California

March 9, 2007, 10:00 a.m.
Contractors State Licensing Board
9821 Business Park Drive
Hearing Room
Sacramento, CA 95827

Written comments, including those sent by mail, facsimile, or e-mail to the addresses listed under Contact Person in this Notice, must be received by the Bureau at its office not later than 5:00 p.m. on March 9, 2007, or must be received by the Bureau at the above referenced hearings. Comments sent to persons or addresses other than those specified under Contact Person, or received after the date and time specified above, regardless of the manner of transmission, will not be considered or included in the record of this proposed regulatory action. The Bureau, upon its own motion or at the instance of any interested party, may thereafter formally adopt the proposals substantially as described below or may modify such proposals if such modifications are sufficiently related to the original text. With the exception of technical or grammatical changes, the full text of any modified proposal will be available for 15 days prior to its adoption from the person designated in this Notice as contact person and will be mailed to those persons who submit oral or written testimony related to this proposal or who have requested notification of any changes to the proposal.

AUTHORITY AND REFERENCE

Pursuant to the authority vested by Section 9882 of the Business and Professions Code and Sections 44001.5, 44002, 44010.5, 44012 and 44013 of the Health and Safety Code, and to implement, interpret or make specific Sections 9884.8 and 9884.9 of the Business and Professions Code and Sections 44003, 44010, 44010.5, 44012, 44014, 44014.2, 44014.7, 44015, 44017, 44017.1, 44033, 44036, and 44037.1 of the Health and Safety Code, the Bureau is considering changes to Division 33 of Title 16 of the California Code of Regulations as follows:

The Bureau of Automotive Repair (Bureau), located within the Department of Consumer Affairs, is the state agency charged with the administration and implementation of the Smog Check Program (Program). The Program is designed to reduce emissions from mobile sources, such as passenger vehicles and trucks, by requiring that these vehicles meet specific in-use emissions standards as verified by periodic inspections. To ensure uniform and consistent vehicle testing, the Bureau licenses smog check stations and technicians and certifies inspection equipment.

Mobile source emissions reductions are achieved when high-emitting vehicles are identified and then repaired. If high-emitting vehicles are not identified and repaired, the effectiveness of the Program is greatly diminished.

I. Low-Pressure Fuel Evaporative System Testing

This component of the regulatory proposal is designed to implement a recommendation made by the California Air Resources Board (ARB) that would add an additional procedure to the Smog Check test. In its November 29, 2005 report “Environmental Impacts of Implementing a Low Pressure Evaporative Test in the California Smog Check Program” ARB determined that adding a low-pressure fuel evaporative test to the existing Smog Check inspection would be a cost-effective emissions reduction strategy. Not only would the addition of this test help California meet its clean air goals and improve the health of its citizens, it would also satisfy legal commitments with the federal government and environmental groups that threaten to sue the state if such testing is not implemented.

The provisions of this proposed regulation require that, commencing November 1, 2007, affected vehicles must have a test performed of their vapor lines and fuel tanks for evaporative leaks as part of the Smog Check inspection. Harmful hydrocarbon emissions evaporate into the atmosphere as a result of malfunctions of the vehicle’s fuel cap, fuel tank, vapor lines, fuel intake and charcoal canister. While evaporative emission controls are very effective in minimizing these emissions, these systems do deteriorate over time and leaks occur.

According to ARB, evaporative emissions will represent over one-half of the total hydrocarbon emissions from the 1976 to 1995 model year light-duty vehicles in 2010, more than the emissions that will be output from the vehicle’s exhaust pipe. Specifically, ARB estimates that 140 tons per day (tpd) of hydrocarbons will evaporate from 1976 to 1995 model year vehicles in 2010. Of that, about 42 tpd results from deterioration of the fuel evaporative emission control systems. In its report, ARB estimates that the addition of the low-pressure fuel evaporative test will reduce hydrocarbon emissions by 14 tpd in 2010. This is one third of the 42 tons of evaporative emissions caused by deterioration of the fuel evaporative emission control systems. In addition, ARB estimates that the projected reductions would cost $6,688 per ton in 2010, well under their threshold of $14,300 established for other reduction programs, making this a cost-effective emission reduction.

The low-pressure fuel evaporative test will be added to the existing Smog Check inspection routine that requires 1976 and newer vehicles to pass a Smog Check once every two years in most areas of the state and whenever vehicle ownership is transferred statewide (in most instances). While the Smog Check inspection already includes an inspection of the fuel evaporative system for newer vehicles equipped with second generation on-board diagnostic systems (OBDII), most vehicles 1995 and older are not equipped with the OBDII technology. Thus, this test will be required primarily on 1976 to 1995 model-year vehicles.

In their report, ARB estimates that in 2010 there will be 5,783,020 vehicles in the affected model-year group that will be subject to the proposed low-pressure fuel evaporative test. Since these older model year vehicles eventually wear out, it is anticipated that the fleet subject to this inspection in 2017 will diminish to 3,020,136 and the number of overall failures will drop, but testing is estimated to result in 7.3 tpd of hydrocarbon emission reductions.

In order to perform the low-pressure fuel evaporative test, almost 8,000 Smog Check inspection stations licensed by the Bureau of Automotive Repair (BAR) will need to purchase or lease specially designed, BAR-certified test equipment. If the low-pressure fuel evaporative test determines that the vehicle’s fuel evaporative system has leaks, the vehicle would fail the test. Repairs and a retest would be necessary in order to pass the Smog Check test. As discussed in ARB’s report, BAR’s roadside testing in 2005 shows about 10.6% of the affected model-year vehicles failed the inspection.

II. Initial Testing of Test-Only Directed Vehicles at Gold Shield Stations

This component of the regulatory proposal is sought to improve consumer convenience with the Smog Check program by authorizing specially licensed Smog Check stations, known as Gold Shield stations, to perform initial Smog Check inspections on “directed vehicles.” “Directed vehicles” are vehicles currently pre-selected for testing at Smog Check stations licensed as Test-Only stations. Existing law supports this regulatory proposal (Health and Safety Code Section 44010.5 (b)(2)).

By expanding the testing of directed vehicles to the additional station type of Gold Shield stations, consumers are provided with more choices when seeking compliance with the Smog Check requirements. There will be more stations and more services to choose from when the consumer is directed for testing since there are approximately 500 Gold Shield stations and almost 1,800 Test-Only stations. Gold Shield stations offer more services than Test-Only stations as they can perform emission related repairs on vehicles that fail initial Smog Check inspections and are the only Smog Check station type that is contractually able to perform state funded repairs for the state’s Consumer Assistance program. Pursuant to regulations, these stations must meet and maintain specific performance standards and are considered to be high-performing stations. As a result, consumers will benefit from increased services (virtually one-stop shopping) and greater emission reductions due to a higher level of state oversight associated with Gold Shield stations.

In addition to enhancing consumer convenience, this regulatory proposal enhances the existing business opportunities for entities that provide Smog Check services by providing a new incentive for existing Test-Only and Test-and-Repair Smog Check businesses to participate in the Gold Shield program. This new opportunity is another reason why implementation of this proposal is sought at the same time as the low-pressure fuel evaporative testing (LPFET). It provides an incentive for continued participation in the Smog Check program by experienced entities that believe there is little business incentive for them to invest in necessary LPFET equipment in order to continue participating in the Smog Check program. Their concern is that the 1975 to 1995 model year vehicles subject to the LPFET test are the same model year group as the “directed vehicles”. While some stations may elect to discontinue offering Smog Check tests because they elect to not invest in LPFET test equipment, others will take advantage of the new opportunity by becoming Gold Shield stations.

Further, data suggests that this change should have little, if any, impact on the emission reductions achieved as a result of the Smog Check program since Test-Only and Gold Shield stations perform similarly based on analysis of their failure rates.

I. Low-Pressure Fuel Evaporative System Testing

CURRENT REGULATION

Section 3340.16 of Title 16 of the California Code of Regulations specifies the tools and equipment test-only stations located in basic or enhanced areas must have. Section 3340.16.5 prescribes tools and manuals that test-and-repair stations must have; test-and-repair stations must have equipment above and beyond what test-only stations have.

Section 3340.16.7 of Title 16 of the California Code of Regulations requires that smog check technicians perform a pressure check of the vehicle’s gas cap. If the gas cap does not hold pressure for a specified amount of time, it fails the test, and the vehicle fails the inspection. Likewise, Section 3340.16.7 requires smog check technicians to perform a visual inspection of the fuel evaporation system to ensure that it is not tampered or otherwise defective. Section 3340.42 currently requires a visual inspection of the vehicle for liquid fuel leaks, but there is no current functional test of a vehicle’s fuel evaporative system.

EFFECT OF REGULATORY ACTION

This regulatory action will make changes to existing regulations found in Articles 2, 3 and 4 of Chapter 1 of Division 33 of Title 16 of the California Code of Regulations, as follows:

This regulation:

1. Adds paragraph (10) to subsection (a) of Section 3340.16, which will require, effective November 1, 2007, all smog check test-only stations and, by reference in subsection (a) of section 3340.16.5, smog check test-and-repair stations to have a low-pressure fuel evaporative tester that has been certified by BAR.
2. Adds a new subsection (c) to Section 3340.42, which will establish the operative date of the low-pressure fuel evaporative systems test as November 1, 2007.
3. Adds paragraph (1) to the new subsection (c), which will specify the vehicles that are exempt from the low-pressure test and require the technician to enter “N” (Not Applicable) in the appropriate category when prompted by the Emissions Inspection System (EIS) when inspecting an exempt vehicle. The following vehicles will be exempted:
1. 1996 and newer vehicles with series II On-Board Diagnostics (OBD II). These vehicles should have on board computers that monitor the efficacy of the fuel evaporation control system. If the evaporation control system is not operating properly, the vehicle’s Malfunction Indicator Light (MIL) is illuminated. An illuminated MIL will cause a vehicle to fail a smog check inspection.
2. Vehicles for which there are no fuel tank filler neck adapters.
3. Vehicles powered by fuels other than gasoline. Alternatively fueled vehicles use fuels that are highly pressurized and therefore are not compatible with this type of testing.
4. Vehicles not originally equipped and not required by state or federal law to be equipped, with a fuel evaporation control system. A vehicle without a fuel evaporation control system cannot be tested.
5. Vehicles with two or more fully operational fuel tanks; and
6. Vehicles with a fuel evaporative canister and fuel vapor hoses that are not readily accessible or would require the partial dismantling of the vehicle in order to gain access to them for testing. If a technician determines that the test is infeasible, the technician shall write on the vehicle inspection report the location of the canister. The infeasibility exemption is critical to prevent long inspection times and consumer inconvenience. Perhaps more important, however, is the concept that this exemption will serve as a buffer to restrain the potential increase in inspection costs. Without the exemption, a technician could conceivably spend hours disassembling a vehicle to gain access to the charcoal canister. The hours of disassembly and re-assembly could conceivably raise the inspection price to levels that would either lead to consumer complaints or program noncompliance, or both.
4. Adds paragraph (2) to the new subsection (c), which will specify the proper inspection and data entry procedures to be followed by technicians in conducting the low-pressure fuel evaporative test. In general, technicians have to seal off the charcoal canister and then, using the tester, pressurize the remainder of the system. Technicians shall follow the directions supplied by the tester’s manufacturer for conducting a test with that equipment. If the tester detects a leak, the vehicle fails the inspection. At the conclusion of the test, the technician shall return the vehicle to its original pre-test configuration.
5. Adds paragraph (3) to the new subsection (c), which will provide that performance of the low-pressure fuel evaporative test does not excuse the technician from performing a visual inspection of the fuel evaporative control system or a liquid fuel leak inspection.
6. The current subsections (c), (d), (e) and (f) of Section 3340.42 will be renumbered as (d), (e), (f) and (g), respectively, to conform to the addition of the new subsection (c).
7. Several nonsubstantive grammatical and editorial changes are also made throughout Section 3340.42.

II. Initial Testing of Test-Only Directed Vehicles at Gold Shield Stations

CURRENT REGULATION

Section 3392.2 establishes a description of the responsibilities of a certified Gold Shield station, as specified.

EFFECT OF REGULATORY ACTION

This regulatory action will amend Section 3392.2 to provide for the initial testing of Test-Only directed vehicles as follows:

1. Adds a new paragraph (3) to subsection (a) of Section 3392.2, which will permit Gold Shield stations equipped with a complete BAR-97 EIS, regardless of their program area location, to perform initial Smog Check tests/inspection and certifications of vehicles directed to Test-Only stations.
2. Several nonsubstantive grammatical and editorial changes are also made throughout Section 3392.2.

FISCAL IMPACT ESTIMATES

Fiscal Impact on Public Agencies Including Costs or Savings to State Agencies or Costs/Savings in Federal Funding to the State:

None.

Nondiscretionary Costs/Savings to Local Agencies:

None.

Local Mandate:

None.

Costs to Any Local Agency or School district for Which Government code Section 17561 Requires Reimbursement:

None.

Businesses Impact:

I. Low-Pressure Fuel Evaporative System Testing

The Bureau has made an initial determination that the amendment of these regulations may have a significant statewide adverse economic impact directly affecting business, including the ability of California businesses to compete with businesses in other states.

The following reporting, recordkeeping or other compliance requirements are projected to result from the proposed action:

1. Smog Check stations will be required to purchase, maintain and use a low-pressure fuel evaporation tester (LPFET) certified by the Bureau.
2. Smog Check stations will be required to report/down load test results from the LPFET to the Bureau periodically.
3. Smog Technicians will need training to use the equipment and properly perform the test.

The Bureau has considered proposed alternatives that would lessen any adverse economic impact on business and invites you to submit such proposals. Submissions may include the following considerations:

1. The establishment of differing compliance or reporting requirements or timetables that take into account the resources available to businesses.
2. Consolidation or simplification of compliance and reporting requirements for businesses.
3. The use of performance standards rather than prescriptive standards.
4. Exemption or partial exemption from the regulatory requirements for businesses.

The rulemaking file includes the facts, evidence, documents, testimony and/or other evidence that supports this determination.

II. Initial Testing of Test-Only Directed Vehicles at Gold Shield Stations

The Bureau has made an initial determination that the amendment of these regulations may have a significant statewide adverse economic impact directly affecting business, including the ability of California businesses to compete with businesses in other states.

The following types of businesses would be affected:

1. Smog Check Test-and-Repair Stations
2. Smog Check Test-Only Stations

The following reporting, recordkeeping or other compliance requirements are projected to result from the proposed action:

None.

The Bureau has not considered proposed alternatives that would lessen any adverse economic impact on business and invites you to submit such proposals. Submissions may include the following considerations:

1. The establishment of differing compliance or reporting requirements or timetables that take into account the resources available to businesses.
2. Consolidation or simplification of compliance and reporting requirements for businesses.
3. The use of performance standards rather than prescriptive standards.
4. Exemption or partial exemption from the regulatory requirements for businesses.

The rulemaking file includes the facts, evidence, documents, testimony and/or other evidence that supports this determination.

Impact on Jobs/New Businesses:

I. Low-Pressure Fuel Evaporative System Testing

The Bureau of Automotive Repair has determinedthat this regulatory proposal will not have a significant impact on the creation of jobs or new businesses or the elimination of jobs or existing businesses or the expansion of businesses in the State of California.

II. Initial Testing of Test-Only Directed Vehicles at Gold Shield Stations

The Bureau of Automotive Repair has determined that this regulatory proposal will not have a significant impact on the creation of jobs or new businesses or the elimination of jobs or existing businesses or the expansion of businesses in the State of California.

Cost Impact on Representative Private Person or Business:

The cost impacts that a representative private person or business would necessarily incur in reasonable compliance with the proposed action and that are known to the Bureau are:

I. Low-Pressure Fuel Evaporative System Testing

Smog Check Stations

This regulation will require Smog Check stations to purchase or lease a BAR-certified LPFET. The manufacturers of the testing devices estimate that the average cost of the equipment will be $2,750. BAR estimates that the average annual maintenance cost will be $100.

In order to cover the cost of the LPET and the time to perform the test, it is anticipated that Smog Check stations will raise the Smog Check inspection costs. In their report, ARB estimates an initial average inspection fee increase of $7.50 per test. The $7.50 estimate fee increase was derived from the time to perform the inspection, plus amortized equipment costs (over 5 years). The increased inspection fee will likely be added to the inspection of affected model year vehicles, estimated to be 5,783,020 in 2010 and 3,020,136 in 2017.

Stations will also derive revenue though increased repairs necessary to correct failing vehicles. In their report, ARB estimates an average repair cost of $161 and reports a 10.6% failure rate based on BAR’s 2005 study of vehicles tested during a roadside pull-over inspection. The average repair cost is based on repair studies conducted by ARB and BAR jointly in 2002 and 2005. The majority of the estimated repair cost is for labor to replace damaged, or reconnect disconnected, vapor lines, to repair fuel tanks, to replace seals associated with the fuel level sending unit and to correct problems associated with the fuel filler neck. The parts costs were found to be relatively minor. The average labor rate of $74 was used to arrive at the estimated average repair cost of $161.

Consumer Impact

This regulation will require owners of 1976 to 1995 model year vehicles to undergo an additional test in order to pass a Smog Check test. It is estimated that the subject fleet will be 5,783,020 in 2010 and 3,020,136 in 2017.

Consumers may be required to pay increased inspection fees due to the implementation of this regulation. Stations may increase the inspection price by an estimated $7.50 to offset the expenditures for the testers, the nitrogen supply, and the time to perform this additional test. Thus, the average inspection cost could increase to $56.00 from $48.50. This is a biennial or change-of-ownership cost.

In addition to the increased inspection cost, consumers with failing vehicles will be required to obtain repairs in order to pass the Smog Check inspection. It is estimated that 10.6% of the vehicles from model years 1976 to 1995 that are subjected to the new test procedure will fail. In its report, ARB estimates that repair costs associated with the test will average approximately $161, with most involving the replacement of hoses and tubing.

For low-income consumers and consumers directed to test-only stations, BAR has a program in place to help mitigate the cost of emissions related repairs needed to bring a vehicle into compliance with the requirements of the Smog Check Program. The Consumer Assistance Program (CAP) provides up to $500 in repair assistance to qualifying motorists. The CAP program assisted nearly 40,000 motorists with repairs in 2005-2006.

II. Initial Testing of Test-Only Directed Vehicles at Gold Shield Stations

Smog Check Stations

Authorizing Gold Shield stations to perform initial inspections of directed vehicles would potentially increase the volume of inspections performed at Gold Shield stations. An increase in inspections will result in an increase of revenue. In addition, Gold Shield stations may realize additional repair revenue from directed vehicles that fail since they afford consumers the convenience of one-stop shopping. The number of consumers that will seek initial tests at Gold Shield stations versus Test-Only stations is unknown.

Test-Only stations may realize a drop in initial and re-test inspections and income associated with performing such tests due to competition from the Gold Shield stations.

Test-and-Repair stations may anticipate fewer repairs. Currently, Test-and-Repair stations and Gold Shield stations realize repair income from vehicles that fail at Test-Only stations. The number of consumers that will seek repairs at Gold Shield stations versus Test-and-Repair stations is unknown.

The Executive Summary Report for Calendar Year 2005 shows that inspection costs average about $49 dollars for all station types. The average repair cost for Gold Shield stations is $201 and for Test-and-Repair stations is $164.

While this proposal may affect the number of stations licensed by license type, the total number of licensed stations is not expected to change. Smog Check technicians employed at Smog Check stations that leave the program will need to seek new employers. However, since technicians are licensed to perform both tests and repairs, the total number of technicians among all station types is not expected to change significantly.

Consumer Impact

By expanding the testing of directed vehicles to the additional station type of Gold Shield stations, consumers will be provided with more choices when seeking compliance with the Smog Check requirements. There will be more stations and more services to choose from when the consumer is directed for testing since there are approximately 500 Gold Shield stations and almost 1,800 Test-Only stations. Gold Shield stations offer more services than Test-Only stations as they can perform emission related repairs on vehicles that fail initial Smog Check inspections and are the only Smog Check station type that is contractually able to perform state funded repairs for the state’s Consumer Assistance program. Pursuant to regulations, these stations must meet and maintain specific performance standards and are considered to be high-performing stations. As a result, consumers will benefit from increased services (virtually one-stop shopping) and greater emission reductions due to a higher level of state oversight associated with Gold Shield stations.

Effect on Housing Costs:

None.

Effect on Small Business

The Bureau has determined that the proposed regulations would affect small businesses.

CONSIDERATION OF ALTERNATIVES

The Bureau must determine that no reasonable alternative to the regulations would either be more effective in carrying out the purpose for which the action is proposed or would be as effective and less burdensome to affected private persons than the proposal described in this Notice.

Any interested person may present statements or arguments orally or in writing relevant to the above determinations at the above-mentioned hearing.

INITIAL STATEMENT OF REASONS AND INFORMATION

The Bureau has prepared an initial statement of reasons for the proposed action and has available all the information upon which the proposal is based.

TEXT OF PROPOSAL

Copies of the exact language of the proposed regulations, and of the statement of reasons, and all of the information upon which the proposal is based, may be obtained at the hearing or prior to the hearing upon request from the Bureau of Automotive Repair at 10240 Systems Parkway, Sacramento, CA 95827.

AVAILABILITY AND LOCATION OF THE RULEMAKING FILE AND THE FINAL STATEMENT OF REASONS

All the information upon which the proposed regulations are based is contained in the rulemaking file that is available for public inspection by contacting the person named below.

You may obtain a copy of the final statement of reasons once it has been prepared, by making a written request to the contact person named below or by accessing the website listed below.

CONTACT PERSON

Inquiries or comments concerning the proposed administrative action may be addressed to:

James Allen
Bureau of Automotive Repair
10240 Systems Parkway
Sacramento, CA 95827
Telephone: (916) 255-3460
Fax No.: (916) 255-1369
E-mail: jim_allen@dca.ca.gov

The backup contact person is:

Kathy Runkle
Bureau of Automotive Repair
10240 Systems Parkway
Sacramento, CA 95827
Telephone: (916) 255-3460
Fax No.: (916) 255-1369
E-mail: kathy_runkle@dca.ca.gov

WEBSITE ACCESS

Materials regarding this proposal can also be found on the Bureau’s website at www.smogcheck.ca.gov.