State Offers Help for Businesses Forced to Purchase New Equipment

Los Angeles, CA (January 8, 2020) – According to the California Air Resources Board (CARB), there are more than 400,000 Heavy Duty diesel vehicles based in California who obtain registration from the California DMV.

Starting in 2020, any non-compliant diesel fueled vehicle over 14,000 pounds Gross Vehicle Weight Rating (GVWR) will be denied registration if they do not meet strict in-use emission standards.

Section 2025 of Title 13 in the California Code of Regulations (CCR), known as the Truck and Bus Rule, mandates the use of specific types of engines in trucks operating in California. CARB adopted the initial rule in 2008 and currently maintains a compliance database and enforcement network across California.

Heavy duty diesel vehicles from all over the country that operate on California roads are subject to the rule. However, only vehicles with California issued license plates will be denied registration beginning in the 2020 calendar year if they do not meet the standards. Although the rule applies to all trucks operating in California, businesses that are outside the traditional for-hire private trucking industry have been hit especially hard.

Landscape, plumbing, and other construction related small business are feeling the sting of the Truck and Bus Rule on low mileage equipment they have owned for years. The rule basically requires them to retire non-compliant equipment or sell it out of state or, if sold inside California they must provide a disclosure about the rule or face potential civil action from the buyer.

Matt Schrap, President of California Fleet Solutions, a company focused on helping California fleets stay compliant with government assistance has personally spoken to hundreds of these types of businesses across the state.

“It’s tough out there”, Schrap commented. “Folks have had equipment they bought new and diligently maintained over the last 15-20 years. Most have lower mileage since they are low use, but unfortunately, not low enough for the State.”

Schrap is referring to the Low-Use exemption that CARB offers allowing for 1,000 annual miles on a vehicle covered by the rule. While this may offer some respite for fleets who can hold onto vehicles for emergency use, they will still be expected to upgrade any other vehicles that travel over the 1,000-mile threshold.

“There are a lot of people out there wondering if they can secure financing or a grant or something that will help them get over this compliance hump since they can’t get exemptions”, Schrap added.

With limited exemption pathways available, equipment operators are faced with few options to meet the standards. And since all opportunities to take advantage of the aftermarket retrofit pathways have passed, they now must look to new or newer, used trucks to stay in compliance.

Complicating matters, if equipment operators fail to meet the standards, not only will they be denied registration, but they may also face either a flat penalty or a scaled citation for each month they’ve been running the non-compliant equipment.

The state of California has cited hundreds of companies with millions of dollars in fines and has already placed registration holds on equipment found to be out of compliance through Audits or Field Inspections.

“It’s not all bad though” Mr. Schrap observed. “The state offers a financing program for fleets that meet a couple different size thresholds and I’ve personally seen it make the difference between getting your registration and staying in business or closing the doors for good.”

The program Schrap is referring to is known as the California Capital Access Program (CalCAP) and is available to businesses that operate 10 or fewer diesel fueled vehicles over the 14K GVWR threshold. CalCAP helps borrowers by offering participating financial institutions a reserve pool contribution on each loan they issue to a qualified business.

While there are several participating financial institutions on the list, Schrap points out that the sister company of California Fleet Solutions, Crossroads Equipment Lease and Finance is the top lender in the program. “They have helped almost 7,000 business across the state keep the wheels turning across pretty much every vocation” added Schrap, who has been working with fleets on CARB compliance programs and Grants for over 15 years.

He truly knows how important the program has been, adding “With access to working capital becoming a scarce opportunity for small businesses in California, the CalCAP program has been the buoy helping many stay afloat”.

Schrap went on, “The CARB rules aren’t going away, business owners who qualify should act before the DMV tells them they’re done and maybe out of business. Or maybe at least out of the business of owning a diesel truck.”

About California ARB

The California Air Resources Board (ARB) has issued several regulations covering on-road, off-road, stationary and portable diesel engines. The complexity of these standards can make it difficult to ensure a fleet is in compliance. ARB has already assessed Millions of dollars in fines and settlements for non-compliance with these regulations.

Currently, fleets are being prevented from registering vehicles that have been tagged by ARB for non-compliance. This is any heavy-duty diesel truck over 26,000 pounds GVWR that is not equipped with a diesel particulate matter (PM) control device from either Original Equipment Manufacturer (OEM) or an aftermarket provider. Vehicles from 14,001 to 26,000 pounds GVWR must also meet strict in-use standards to receive operational authority from the California DMV.

For more information visit: https://arb.ca.gov

About Crossroads Equipment Lease and Finance

Founded in 2006, Crossroads Equipment Lease & Finance is your professional partner in the transportation industry. We listen to our customers, work to understand their needs and strive to build long term business relationships by offering prompt, flexible, and tailor-made financing that preserves capital and positively impacts their business. Our expertise in underwriting, collateral evaluation and asset re-marketing facilitate solutions that maximize the competitive advantages of our customers in the market. For more information visit: https://www.crlease.com

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