BILL ANALYSIS                                                                                                                                                                                                    



                                                                       



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          |SENATE RULES COMMITTEE            |                  SB 1340|
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                              UNFINISHED BUSINESS


          Bill No:  SB 1340
          Author:   Kehoe (D)
          Amended:  8/23/10
          Vote:     21

           
           SENATE TRANSPORTATION & HOUSING COMMITTEE  :  6-1, 4/6/10
          AYES:  Lowenthal, DeSaulnier, Kehoe, Oropeza, Pavley,  
            Simitian
          NOES:  Huff
          NO VOTE RECORDED:  Ashburn, Harman

           SENATE ENV. QUALITY COMMITTEE  :  5-0, 4/19/10
          AYES: Simitian, Corbett, Hancock, Lowenthal, Pavley
          NO VOTE RECORDED: Runner, Strickland

           SENATE APPROPRIATIONS COMMITTEE  :  7-1, 5/10/10
          AYES:  Kehoe, Cox, Alquist, Leno, Price, Wolk, Yee
          NOES:  Walters
          NO VOTE RECORDED:  Corbett, Denham, Wyland

           SENATE FLOOR  :  23-4, 5/28/10
          AYES:  Alquist, Calderon, Cedillo, Corbett, Correa,  
            DeSaulnier, Ducheny, Florez, Hancock, Kehoe, Leno, Liu,  
            Lowenthal, Negrete McLeod, Padilla, Pavley, Price,  
            Romero, Simitian, Steinberg, Wolk, Wright, Yee
          NOES:  Ashburn, Dutton, Hollingsworth, Huff
          NO VOTE RECORDED:  Aanestad, Cogdill, Cox, Denham, Harman,  
            Oropeza, Runner, Strickland, Walters, Wiggins, Wyland,  
            Vacancy, Vacancy

           ASSEMBLY FLOOR  :  Not available

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           SUBJECT  :    Energy: alternative fuels and vehicle  
          technologies

           SOURCE  :     Author


           DIGEST  :    This bill expands the use of the voluntary  
          contractual assessment to finance electric vehicle charging  
          infrastructure affixed on real property and expands the  
          Property Assessed Clean Energy Reserve program to assist  
          local jurisdictions in financing the installation of  
          electric vehicle charging infrastructure. 

           Assembly Amendments  expand the use of the voluntary  
          contractual assessment to finance electric vehicle charging  
          infrastructure affixed on real property and expands the  
          Property Assessed Clean Energy Reserve program to assist  
          local jurisdictions in financing the installation of  
          electric vehicle charging infrastructure, declares the  
          intent of the Legislature to limit participation in this  
          assessment program when it would result in an inability of  
          the property owner to pay property taxes or in total taxes  
          and assessments exceeding five percent of the property  
          value, adds double-jointing language with AB 1106  
          (Fuentes), and makes other conforming changes.

           ANALYSIS  :    AB 118 (Nunez), Chapter 750, Statutes of 2007,  
          created the Alternative and Renewable Fuel and Vehicle  
          Technology Program, which the California Energy Commission  
          (CEC) administers to provide, upon appropriation by the  
          Legislature, grants, revolving loans, loan guarantees,  
          loans, or other appropriate funding measures to public  
          agencies, vehicle consortia, businesses, consumers,  
          recreational boaters, and academic institutions to develop  
          and deploy innovative technologies that transform  
          California fuel and vehicle types to help attain the  
          state's climate change policies. 

          Funding of approximately $120 million annually for this  
          program comes from additional fees on vehicle  
          registrations, special identification plates for various  
          vehicles, and vessel registrations, plus $10 million  
          annually from the Public Interest Research, Development,  

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          and Demonstration Fund, which is derived from a portion of  
          electric utility rates.

          The CEC, through a competitive process, allocates these  
          funds to alternative fuel and vehicle technology projects.   
          To set priorities for the allocation of funds, the CEC must  
          develop an investment plan in consultation with a wide  
          array of stakeholders.  The CEC adopted its first  
          investment plan at its April 22, 2009 meeting.  It is now  
          in the process of updating that plan for 2010, which the  
          CEC plans to adopt in the summer. 

          Due to some borrowing of AB 118 funds and the supplemental  
          funds that the American Recovery and Reinvestment Act  
          (ARRA), the federal stimulus program) provides, last year  
          the CEC awarded only about $57 million to alternative fuel  
          and vehicle technology projects.  Among the ARRA- and AB  
          118-funded projects is the installation of over four  
          thousand new electric vehicle charging stations. 

          Existing law makes the following projects eligible for  
          funding under the Alternative and Renewable Fuel and  
          Vehicle Technology Program: 

          1. Alternative and renewable fuel infrastructure, fueling  
             stations, and equipment.

          2. Projects to develop and improve vehicle technology that  
             provide for better fuel efficiency and lower greenhouse  
             gas emissions.

          3. Alternative and renewable fuel projects to develop,  
             improve, demonstrate, deploy, produce, and commercialize  
             alternative and renewable fuels, plus reduce the overall  
             carbon footprint of these fuels.

          4. Vehicle retrofit projects to create higher fuel  
             efficiencies.

          5. Infrastructure projects that promote alternative and  
             renewable fuel infrastructure development for existing  
             fleets, public transit, and existing transportation  
             corridors. 


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          6. Workforce training programs related to alternative fuels  
             and vehicle technology.

          7. Block grants administered by not-for-profit technology  
             consortia for specified purposes.

          8. Analyses and assessments performed by state agencies to  
             determine the impacts of increasing the use of  
             low-carbon transportation fuels and technologies.

          This bill:

          1. Expands the definition of "Property Assessed Clean  
             Energy (PACE) bond" to include a bond that is secured by  
             voluntary contractual assessment on a property or  
             through a voluntary special tax, which is levied through  
             a charter city's charter authority, for the purposes of  
             financing electric vehicle charging infrastructure. 

          2. Expands the criteria for participation in the PACE  
             Reserve program to include that proceeds of the PACE  
             bonds are used to finance qualified electric vehicle  
             charging infrastructure. 

          3. Authorizes a public agency to enter into a contractual  
             assessment with a willing property owner to finance  
             electric vehicle charging infrastructure. 

          4. States that the Legislature finds that electric vehicle  
             charging infrastructure is a necessary component to  
             transitioning to increase electric vehicle usage.   
             Electric vehicles and their electric charging  
             infrastructure also address the issue of global climate  
             change. 

          5. States that it is the intent of the Legislature that the  
             authorization created by this bill should be used to  
             finance electric vehicle charging infrastructure that is  
             permanently fixed to residential, commercial,  
             industrial, agricultural, or other real property. 

          6. Prohibits a public agency from permitting a property  
             owner to participate in a contractual assessment program  
             if the total amount of annual property tax and  

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             assessments exceeds five percent of the property's  
             appraised market value. 

          7. Specifies that nothing in this bill shall be construed  
             to void or otherwise release a property owner from the  
             contractual obligations incurred by a contractual  
             assessment on a property.  Particularly in the event  
             that the total amount of annual property taxes exceeds  
             five percent of a property's appraised value after the  
             property owner has entered into a contractual  
             assessment. 

          8. Specifies that the costs of homeowners' electrical work  
             needed to fuel electric vehicles are eligible for  
             subsides under the CEC Alternative and Renewable Fuel  
             and Vehicle Technology Program. 

          9. Contains chaptering-out provisions to avoid conflicts  
             with AB 1106 (Fuentes) if that bill were to become law. 

           Background  

          In its recent report,  Climate Change Challenges, Vehicle  
          Emissions and Public Health in California  , the Public  
          Policy Institute of California concludes that increasing  
          the use of battery-electric vehicles provides the greatest  
          public health benefit per unit of greenhouse gas emission  
          reduction" among the possible alternative fueling and  
          vehicle technologies on the horizon.  The report also  
          notes, however, that electric vehicles involve "high cost  
          and uncertainty" because they "depend on technological  
          breakthroughs and broader market penetration to reduce cost  
          and meet performance targets."

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes    
          Local:  No

          According to the Assembly Appropriations Committee: 

          1. Negligible costs to CEC to include residential plug-in  
             electric vehicle charging stations among the types of  
             projects eligible for AB 118 funding. 

          2. Cost pressure of an unknown amount, potentially in the  

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             millions of dollars, resulting from expansion of the  
             types of projects eligible for funding from these  
             programs. 

           SUPPORT  :   (Verified  8/25/10) 

          American Lung Association
          Bay Area Quality Management District
          California Air Pollution Control Officer's Association
          Electric Transportation Coalition
          Nissan North America
          Pacific Gas and Electric
          Sacramento Municipal Utility District
          Sierra Club California
          Southern California Edison
          Union of Concerned Scientists


           ARGUMENTS IN SUPPORT  :    The author's office notes that  
          state policies on greenhouse gas reductions and clean  
          alternative fuels and technologies currently emphasize the  
          importance of electric vehicle technology, and that using  
          ARRA funds the CEC is already actively engaged in upgrading  
          over 4,000 previous electric vehicle charging stations  
          throughout the state.  Additionally, the U.S. Department of  
          Energy has awarded contracts nationwide under ARRA that  
          include funding for in-home and public charging stations. 

          The author's office also points out that major auto  
          manufacturers will be introducing new electric vehicles and  
          plug-in electric vehicles in the fall of 2010 and early  
          2011, and as consumers seek to purchase these vehicles many  
          will require electrical improvements at their homes.  Costs  
          for these improvements can range from a few hundred dollars  
          to several thousand dollars.  Despite the air quality and  
          energy efficiency benefits of the technology, many  
          potential electric vehicle purchasers may be dissuaded from  
          buying an electric-drive vehicle if it additionally  
          requires hundreds of dollars of initial costs at their  
          homes.  This bill gives clear legislative authority for the  
          CEC to design an AB 118-funded program that helps to  
          off-set these costs.



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          JJA:do  8/25/10   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

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