Texas Automobile Dealers Association

Transcription

1 Texas Automobile Dealers Association RO. Box 1028 Austin, Texas (512) Fax: (512) MEMORANDUM To: TADA Members From: Karen Phillips Tom Blanton Rob Braziel Date: December 10, 2007 Re: LIRAP Rules (Low Income ehicle Repair Assistance, Retrofit, and Accelerated ehicle Retirement Program) The Texas Commission on Environmental Quality (TCEQ) adopts amendments to Chapter 114, Control of Air Pollution from Motor ehicles, implementing SB 12, authored by Senator Averitt, and passed by the 80 th Legislature, Senate Bill 12 and these new rules, extend and broaden the program by which the state offers financial incentives to qualified purchasers of certain vehicles. The objective is to encourage the replacement of polluting vehicles with newer, cleaner vehicles. TADA submitted comments to the TCEQ proposal and appreciates working with the agency and Senator Averitt in order to make this program successful. The anticipated effective date is December 27, 2007; however, an Attorney General Opinion Request, made bythe Williamson County Attorney s office (RQ-0646-GA), could delay the effective date. LIRAP REQUIREMENTS TCEQ s executive director authorizes the LIRAP implementation in an JIM county after receiving a written request by the JIM county commissioners court. Monetary assistance to an eligible vehicle owner is to be used toward the purchase of a replacement vehicle. An application for monetary assistance is from the participating county and requires the vehicle owner to demonstrate: 1. The vehicle has failed a vehicle emissions test within 30 days of submitting their application; 2. The vehicle can be driven under its own power to the emissions inspection station or Serving the franchised new car and truck dealers of Texas since T A D A

2 vehicle retirement facility ; 3. The vehicle is currently registered in and has been registered in the program county 2 for the 12 months immediately preceding the application for assistance; 4. The vehicle owner s net family income is at or below 300% of the federal poverty level; 5. The vehicle has passed a DPS motor vehicle safety or safety and emissions inspection within 15 months prior to application submittal; and, 6. Any other requirements of the participating county or executive director. A person may also be eligible for the accelerated vehicle retirement and replacement compensation of a pre-1996 model year vehicle that passes the EPA Start-up ASM (Acceleration Simulation Mode) standard emissions test but would have failed the EPA Final ASM standards emissions test. In addition, an eligible vehicle owner is the owner of a gasoline powered vehicle that is at least 10 years old as determined under the current calendar year 3 and meets the requirements of numbers 2, 3, and 4 (see above). The Houston-Galveston Area Council, the North Central Texas Council of Governments, and Travis and Williamson counties will qualify each individual for the program and determine the amount of the grant and the length of time it is applicable. Replacement ehicles A replacement vehicle must be: 1. Certified to meet federal Tier 2, Bin 5 or cleaner Bin certification, as of 10/25/07: 1!tier2_bins_cleaner_master.pdf 2. GW less than 10,000 pounds; ehicle Retirement Facility a facility that is licensed, certified, or otherwise authorized by the Texas Department of Transportation to destroy, recycle, or dismantle vehicles ( 114.7) 2ehicles to be retired must be registered in the one of these participating counties: Austin Program Area: Travis and Williamson Dallas-Fort Worth Program Area: Collin, Dallas, Denton, Ellis, Johnson, Kaufman, Parker, Rockwall, Tarrant Houston-Galveston-Brazoria Program Area: Brazoria, Fort Bend, Galveston, Harris, Montgomery 2007 minus 10 years equals CFR , as published in the February 10, 2000, Federal Register (65 FedReg 6698). 2

3 3. Total cost 5 of the vehicle does not exceed $25,000; and 4. DPS motor vehicle safety inspected or safety and emissions inspected within the 15-month period before the application is submitted. Compensation to Eligible ehicle Applicant The participating county determines eligibility and approves or denies the application. Compensation is based on vehicle type and model year of a replacement vehicle. Only one retirement compensation can be used toward one replacement vehicle per applicant, annually. The maximum amount toward a replacement vehicle will not exceed: 1. $3000 for a replacement car 6 of the current model year or previous 3 model years, except for #3, below. 2. $3000 for a replacement truck 7 of the current model year or the previous 2 model years, except for #3, below. 3. $3,500 for a replacement hybrid 8 of the current model year or the previous model year. Reimbursement to Participating Automobile Dealership A participating county will ensure that funds are transferred to a participating automobile dealership 9 no later than 5 business days after the county receives proof of sale, proof of transfer to a 5 Total cost is the total amount of money paid or to be paid for the purchase of a motor vehicle as set forth as the sales price in the form entitled Application for Texas Certificate of Title promulgated by the Texas Department of Transportation. In a transaction that does not involve the use of that form, the term means an amount of money that is equivalent, or substantially equivalent, to the amount that would appear as the sales price on the application for Texas Certificate of Title if that form were used. 6A car is a motor vehicle, other than a golf car, truck, or bus, designed or used primarily for the transportation of persons. A passenger van or sports utility vehicle may be considered a car. 7A truck is a motor vehicle with a GW (gross vehicle weight) rating of less than 10,000 pounds and designed primarily for the transport of persons and cargo. 8A hybrid motor vehicle is a motor vehicle that draws propulsion energy from both gasoline or conventional diesel fuel and a rechargeable energy storage system. 9An automobile dealership is a business that regularly and actively buys, sells, or exchanges vehicles at an established and permanent location as defined by Transportation Code The term includes a franchised motor vehicle dealer and an independent motor vehicle dealer. 10 Proof of sale is a notice of sale or transfer filed with the Texas Department of Transportation as required under Texas Transportation Code , or if unavailable, an affidavit from the selling dealer or documents approved by the commission. 3

4 1 and any administrative documents that meet the requirements of the county or dismantler, designated entity. All administrative documents must be included in the agreements that are entered into by the county or designated entity and the participating automobile dealerships. Replacement funds to a participating automobile dealership are to be provided electronically by the participating county once all program criteria have been met. Participation in LIRAP by an automobile dealership is voluntary. Showing LIRAP on a Retail Installment Contract The replacement funds may be used as a down payment toward the purchase ofa replacement vehicle. According to a November 15, 2007, letter from Commissioner Leslie L. Pettijohn: A dealer who participates in the [LIRAP] program will necessarily be required to reflect the motor vehicle replacement assistance credit in the Itemization of Amount Financed box for participating motor vehicle purchases. The portion of the Itemization of the Amount Financed box that relates to downpayments is the appropriate place to account for this credit. In the promulgated model contract the category beneath the manufacturer s rebate in the itemization block is a category labeled other. This entry has a blank left to be filled in by the dealer as needed. This office recommends that this blank be used to reflect the credit for motor vehicle replacement assistance. This office recommends an appropriate disclosure for the motor vehicle replacement assistance to read, ehicle Replacement Program or LIRAP ehicle Replacement Program. (See attached letter) The Tax Code is amended to exclude LIRAP funds from the motor vehicle sales tax; so, do not calculate motor vehicle sales tax on LIRAP (Tax Code (b)(8)). Document to Confirm EIiibi1ity A document to confirm a person s eligibility to purchase a replacement vehicle and to track the purchase is to be developed by each participating county. The document will include: 1. The name of the applicant; 2. The IN of the retired vehicle; 3. Expiration date of the document; 4. Program administrator s contact information; and, 5. Amount of money available to the participating vehicle owner. The applicant obtains the document from the participating county and presents it to the participating automobile dealership before entering into negotiations for a replacement vehicle. Proof of transfer is a TCEQ form that identifies the vehicle to be destroyed and tracks the transfer of the vehicle to the recycler from the participating county, automobile dealer, and dismantler. 4

5 Disposing of Retired ehicle A retired LIRAP vehicle may not be resold or reused in Texas or any other state. The vehicle must be: 1. Destroyed; 2. Recycled; 3. Dismantled and its parts sold as used parts; 4. Placed in a storage facility and subsequently destroyed, recycled, or dismantled within 12 months of the vehicle retirement date. The dismantler shall destroy the emissions control equipment and engine; certify those parts have been destroyed and not resold into the market place. The dismantler shall also remove any mercury switches in accordance with state and federal laws. Certification that the vehicle has been destroyed must be provided by the dismantler to the automobile dealer from whom the dismantler has taken receipt of a vehicle for retirement. The automobile dealer submits this proof of destruction from the dismantler to the participating county. The dismantler provides the residual scrap metal of a retired vehicle to a recycling facility at no cost, except for the cost of transportation of the residual scrap metal to the recycling facility. Sinin Up to Participate A dealership may sign up to participate in the LIRAP program by contacting the following: Houston-Galveston-Brazoria Area: Houston-Galveston Area Council, Dallas-Fort Worth Area: North Central Texas Council of Governments: Travis County: or Williamson County: See the enclosed Auto Dealer Order Form for brochures, Retired ehicle Transfer Manifest, and Posters. Before signing up to participate with the local county, please read the county s dealer agreement carefully as the dealership may be asked to indemnfy and hold the county harmless, as in Williamson County. In addition, at this time, Williamson County is asking the dealership to waive the required payment in 5 days as well as waive the requiredpayment by electronic means. If you have any questions, please contact Karen Phillips, Tom Blanton, or Rob Braziel at

6 Re: Office 0f Consumer Credit 2601 N Lamar Blvd Austin, Tx Commissioner Leslie L. Pettijolin Fax: Consumer Helpline: Commissioner November 15, 2007 Ms. Karen Phillips, Chief Counsel Texas Automobile Dealers Association P.O. Box 1028 Austin, Texas Senate Bill 12 Low Income ehicle Repair, Assistance, Retrofit (LIRAP) Dear Ms. Phillips: This letter is in response to your letter dated September 10, 2007, in which you requested guidance on the proper placement of LIRAP assistance on the motor vehicle installment sales contract and accordingly any suggested disclosure language on the contract. Senate Bill 12 revised elements of the Inspection and Maintenance program and iow income motor vehicle repair assistance, retrofit and accelerated vehicle retirement program. A qualified consumer may receive vehicle replacement assistance on the purchase of certain motor vehicles in the amount of $3,000 or $3,500 depending upon the type of vehicle. motor vehicle replacement assistance credit in the Itemization of Amount Financed box for participating financed motor vehicle purchases. The portion of the Itemization of the Amount Financed box that relates to downpayments is the appropriate place to account for this credit. In the promulgated model contract the category beneath the manufacturer s rebate in the itemization block is a category labeled other. This entry has a blank left to be filled in by the dealer as needed. This office recommends that this blank be used to reflect the credit for motor vehicle replacement assistance.

7 Ms. Karen Phillips, Chief Counsel Texas Automobile Dealers Association Page 2 of 2 This office recommends an appropriate disclosure for the motor vehicle replacement assistance to read, ehicle Replacement Program or LIRAP- ehicle Replacement Program. Sincerely, Leslie Pettijohn

8 Auto Dealer Order Form for AirCheckTexas Drive a Clean Machine Materials ATrCheckTexas Drive a Clean Machine. Brochure (GI-372) Retired ehicle Transfer Manifest (TCEQ-20412) Poster (GI-382) I _...:J Iwant copies. (maximum: 100 copies per order) I want: copies for Dallas-Ft. Worth area copies for Houston-Galveston area copies for Travis County _..copies for Williamson County (maximum: 40 total copies per order) I want (maximum: 10 copies per order) Mail copies to: Representative s Name: Dealership: Mailing Address: City: Texas Zip: Phone number (if we have questions about your order): Fax this order form to: Or mail to: Publications Distribution MC 118 TC EQ P0 Box Austin, TX Please allow 2 to 4 weeks for delivery. TCEQ (11/07)