California Gov. Arnold Schwarzenegger proposed a new plan on June 15 to raise money to reduce diesel pollution by adding $6 to vehicle license fees for new cars, reports the San Francisco Chronicle. To offset the proposed new fees, he's recommending giving drivers of cars up to 6 years old an exemption from smog checks. Currently, the exemption from smog checks is for four years. The governor's initiative will be included in his budget package now moving through the state legislature. His proposal to add $6 on vehicle license fees would raise about $61 million a year to help transit districts, trucking fleets, government agencies, and businesses and farms with heavy equipment replace polluting diesel engines. Some environmental groups that worked with the governor on the plan say the proposal was the result of difficulty in finding money to run the California Air Resources Board's 6-year-old program to subsidize the statewide replacement of dirty diesel buses, trucks, and equipment. Nearly 5,000 engines have been upgraded under the program since 1998. "This plan cuts costs to consumers and relieves them from the burden of unnecessary smog checks while improving air quality and reducing harmful emissions from high-polluting diesel engines," said Schwarzenegger in a statement. In addition to the $61 million raised from a hike in vehicle license fees, the governor is seeking $6.8 million to pay for a Bureau of Automotive Repair program that retires polluting vehicles and helps low-income families secure car repairs that reduce smog. Environmental groups generally praised the proposal but expressed some concern about raising money for clean air by trading away smog checks.

Originally posted on Fleet Financials