BILL ANALYSIS Ó
SB 1455
Page 1
Date of Hearing: August 29, 2012
ASSEMBLY COMMITTEE ON NATURAL RESOURCES
Wesley Chesbro, Chair
SB 1455 (Kehoe) - As Amended: August 24, 2012
SENATE VOTE : Not relevant
SUMMARY : Extends until December 1, 2023, various fees and
surcharges related to the clean air, fuel, tire recycling, and
vehicle programs of the Air Resources Board (ARB), the
California Energy Commission (CEC), the Department of Resources
Recycling and Recovery (CalRecycle), and the State Bureau of
Automotive Repair (BAR). Prohibits ARB from moving forward with
implementation of the Clean Fuels Outlet regulation, and instead
directs funds from the Alternative and Renewable Fuel and
Vehicle Technology Fund for the construction and operation of a
hydrogen fueling network in California. Requires CEC and ARB to
report on the status of the state's alternative transportation
fuel use in the Integrated Energy Policy Report (IEPR).
Specifically, this bill :
1)Extends the sunset dates of various clean air and alternative
fuels and vehicle programs, and the related fees and
surcharges, under ARB, CEC, and BAR to December 31, 2023. The
fees and surcharges are:
a) AB 118 (Chapter 750, Statutes of 2007, Nunez), which
authorizes a vehicle registration fee to fund the
Alternative and Renewable Fuel and Vehicle Technology
Program;
b) AB 923 (Chapter 707, Statutes of 2004, Firebaugh), which
increased the vehicle registration fee for vehicles
registered in specified areas in the state and increased
the Tire Recycling Fee to fund air emissions reduction
activities.
c) The Carl Moyer Memorial Air Quality Standards Attainment
(Carl Moyer) Program, which can be used to fund the
incremental cost of cleaner-than-required vehicles,
engines, and equipment.
2)Prohibits ARB from submitting regulations related to the Clean
Fuels Outlet regulation and the deployment of hydrogen fueling
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stations to the Office of Administrative Law, and instead:
a) Defines "publicly available hydrogen fueling station" to
mean the equipment used to store and dispense hydrogen fuel
to vehicles according to industry codes and standards that
is open to the public.
b) Requires ARB to aggregate and make available to the
public no later than January 1, 2014, and every two years
thereafter, the number of vehicles that automobile
manufacturers project to be sold or leased.
c) Requires CEC to allocate twenty million dollars each
fiscal year, beginning July 1, 2013, through June 30, 2016,
and up to twenty million dollars ($20,000,000) each fiscal
year thereafter, not to exceed 20 percent of moneys
appropriated by the Legislature from the Alternative and
Renewable Fuel and Vehicle Technology Fund, for purposes of
constructing and operating a hydrogen fueling network
sufficient to provide convenient fueling to vehicle owners
and expand that network as necessary to support a growing
market for vehicles requiring hydrogen fuel, until there
are at least 100 publicly available hydrogen fueling
stations
d) Requires CEC's expenditures not exceed 20 percent of the
moneys appropriated annually by the Legislature from the
Alternative and Renewable Fuel and Vehicle Technology Fund.
e) Permits CEC to defer allocating the moneys as needed to
keep the number of fueling stations appropriate for the
fueling needs of hydrogen vehicles.
f) Once CEC determines, in consultation with ARB, that the
private sector is establishing publicly available hydrogen
fueling stations without the need for government support,
requires CEC to cease providing funding for those stations.
g) Requires, on or before December 31, 2015, and annually
thereafter, that ARB and CEC jointly review and report on
progress toward establishing a hydrogen fueling network, as
specified.
h) Authorizes CEC to design loan incentive programs,
revolving loan programs, and other forms of financial
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assistance, and authorizes CEC to enter into an agreement
with the Treasurer to provide financial assistance to
further the development of the hydrogen fueling network.
i) Requires that funds appropriated to CEC for the purposes
of this bill be available for encumbrance by CEC for up to
four years from the date of the appropriation.
j) Requires ARB, no later than July 1, 2013, to convene a
working group to evaluate the policies and goals contained
within the Carl Moyer and Assembly Bill 923 (Chapter 707,
Statutes of 2004) programs.
aa) Sunsets these provisions on December 31, 2023.
1)Directs ARB and CEC, by November 1, 2014, to update the
economic analysis used to develop and review ARB's regulations
to include a range of petroleum and alternative fuel prices to
more accurately assess the future costs of petroleum-based and
alternative fuels.
2)Beginning November 1, 2015, and every two years thereafter,
requires CEC, in consultation with ARB and as a part of its
IEPR, to provide a status of the state's alternative
transportation fuel use, including:
a) An evaluation of how new and existing investment
programs could help to increase the state's alternative
fuels use; and,
b) An evaluation of how federal fuel policies and existing
state policies will help increase the use of alternative
fuels in the state.
3)Requires ARB when developing new and amended regulations, to
include a finding on the effect of the proposed regulations on
the state's alternative transportation fuels use.
4)Provides that this bill does not preempt AB 32 and that the
bill be implemented consistent with environmental, public
health, and sustainability considerations articulated in AB
32, clean fuels and vehicle funding statutes.
5)Requires ARB and CEC, when studying the state's alternative
transportation fuel use, to measure:
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a) In-state job creation through the continued development
of an alternative fuels industry in the state;
b) Economic vulnerability of residents to future petroleum
fuel price spikes by the use of either petroleum fuels or
alternative fuels and vehicles;
c) Alternative fuel market penetration in nonattainment
areas; and,
d) Increase access to the supply of alternative fuels and
alternative fuel vehicles for all residents, including
barriers to supply.
EXISTING LAW :
1)Requires CEC and ARB, as well as other specified state
agencies, to develop and adopt a state plan to increase the
use of alternative transportation fuels by June 30, 2007.
2)Establishes a statewide greenhouse gas (GHG) emissions limit
such that by 2020 California reduces its GHG emissions to the
level they were in 1990, pursuant to AB 32 (Núñez), Chapter
488, and Statutes of 2006.
3)Establishes the Fleet Modernization Program, the Alternative
and Renewable Fuel and Vehicle Technology Program (ARFVTP),
and the Air Quality Improvement Program to support the
implementation of AB 32. The ARFVTP is intended to support
alternative vehicle technologies and fuels as part of the
California Alternative and Renewable Fuel, Vehicle Technology,
Clean Air, and Carbon Reduction Act of 2007 (AB 118 (Nunez),
Chapter 750, Statutes of 2007). The ARFVTP is administered by
the California Energy Commission (CEC) and receives
approximately $100 million per year from temporary surcharges
on vehicle and vessel fees.
4)Establishes the Carl Moyer Program, administered by ARB, to
fund the incremental cost of cleaner-than-required vehicles,
engines, and equipment. The primary objective of the program
is to achieve air quality emission reductions that would not
otherwise occur through regulations or other legal mandates.
5)Establishes the California Tire Recycling Fee, and directs a
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portion of the fee to fund programs and projects that mitigate
or remediate air pollution caused by tires in the state.
6)Pursuant to ARB regulations, requires certain owners and
lessors of retail gasoline stations to equip an appropriate
number of their stations with clean alternative fuels. Clean
fuels outlet regulation does not require establishing retail
outlets for a designated clean fuel until the number of
designated clean fuel vehicles projected to be sold using that
fuel reaches 20,000 in a given year. The regulation pertains
to designated clean fuels used in low emission vehicles (LEV).
This includes dedicated clean fuel vehicles that are designed
to be operated solely on the designated clean fuel, as well as
flex-fuel and dual-fuel vehicles that are capable of operating
on gasoline and the designated clean fuel. Only those
vehicles certified to LEV standards when operating on the
designated clean fuel are considered to be designated clean
fuel vehicles. Alternative fuels in use today and captured
under the regulation include compressed natural gas, E85 (a
blend of 85% ethanol, 15% gasoline), and hydrogen.
7)Establishes the California Tire Recycling Fee, and directs a
portion of the fee to fund programs and projects that mitigate
or remediate air pollution caused by tires in the state.
FISCAL EFFECT : Unknown
COMMENTS : California faces significant challenges with air
quality. According to the author, "just when they are needed
most and a wide variety of new vehicles and technologies are
coming to the market, California's major clean transportation
and air quality investment programs are all set to expire in
2014 or 2015." This bill would extend these programs and the
fees that support them until December 31, 2023.
The CEC's State Alternative Fuels Plan outlines specific
strategies and targets to increase the use of alternative fuels,
including setting a goal of 26 percent penetration for
alternative fuel use in California for on-road and off-road
vehicles by 2022. This bill requires ARB and the CEC to measure
the progress of alternative fuels use in the state, as
described.
On January 26, 2012, ARB considered amendments to the Clean
Fuels Outlet regulation. The amendments are required be
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submitted to the Office of Administrative Law by December 31,
2012 to take effect. The amendments to the Clean Fuels Outlet
regulation were designed to ensure that there was sufficient
hydrogen fueling infrastructure necessary to meet forecasted
fuel cell vehicle penetration. According to ARB, this
infrastructure is needed to demonstrate a market commitment to
hydrogen fuel. In order to meet the forecasted station
infrastructure needs, the regulation would have required that
refiners provide the funding for hydrogen fueling stations
available to the public.
This bill prohibits ARB from submitting the January 26, 2012
regulation amendments pertaining to the hydrogen fueling
infrastructure to the Office of Administrative Law. The bill
also prohibits ARB from enforcing any element of the regulation
that requires, or has the effect of requiring, any person to
construct, operate, or provide funding for the construction or
operation of any publicly available hydrogen fueling station.
Instead, the bill dedicates $20 million from the AB 118 program
in each fiscal year, beginning July 1, 2013 through June 30,
2016, not to exceed 20 percent of total AB 118 funds annually,
to developing the hydrogen infrastructure. The CEC may allocate
additional funds after July 1, 2016 as necessary to achieve the
publicly available hydrogen fueling infrastructure sufficient to
support automobile manufacturer deployment projections for fuel
cell vehicles in California.
REGISTERED SUPPORT / OPPOSITION :
Support
Agricultural Council of California
Air Resources Board
Alliance of Western Milk Producers
American Lung Association
Association of Global Automakers
Bay Area Air Quality Management District
California Air Pollution Control Officers Association
California Association of Wheat Growers
California Association of Winegrape Growers
California Bean Shippers Association
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California Cattlemen's Association
California Citrus Mutual
California Cotton Ginners Association
California Cotton Growers Association
California Council for Environmental Economic Balance
California Energy Commission
California Farm Bureau Association
California Grain and Feed Association
California Grape and Tree Fruit League
California Independent Oil Marketers Association
California Rice Commission
California Trucking Association
Californians Against Waste
CALSTART
Coalition for Clean Air
County Sanitation Districts of Los Angeles County
Environmental Defense Fund
Honda North America, Inc.
Natural Resources Defense Council
Nisei Farmers League
Pacific Egg and Poultry Association
San Diego Gas & Electric
San Francisco International Airport (SFO)
Sempra Energy utilities
Southern California Gas Company
UPS
Western Agricultural Processors Association
Western Growers Association
Western Propane Gas Association
Western States Petroleum Association
Opposition
Automobile Club of Southern California
Auto Nation, Inc.
California New Car Dealers Association
Analysis Prepared by : Elizabeth MacMillan / NAT. RES. / (916)
319-2092
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