BILL ANALYSIS Ó
AB 8
Page 1
Date of Hearing: April 8, 2013
ASSEMBLY COMMITTEE ON TRANSPORTATION
Bonnie Lowenthal, Chair
AB 8 (Perea and Skinner) - As Introduced: December 3, 2012
SUMMARY : Extends, until January 1, 2024, various fees and
surcharges related to the clean air, fuel, tire recycling, and
clean vehicle and replacement programs of the California Air
Resources Board (ARB), the California Energy Commission (CEC)
and the State Bureau of Automotive Repair (BAR). Directs
funding from the programs for the construction of hydrogen
fueling stations. Specifically, this bill :
1)Extends, from January 1, 2014 or January 1, 2015, to January
1, 2024, the sunset dates of various clean air and alternative
fuels and vehicle programs, and the related fees and
surcharges, under ARB, CEC, and BAR, as follows:
a) $8 increase, from $12 to $20, in the smog abatement fee,
paid to register vehicles that are less than six model
years old and therefore exempt from smog check. The
revenues are directed equally to the Alternative and
Renewable Fuel and Vehicle Technology (ARFVT) Program and
the Air Quality Improvement Program.
b) $0.75 fee increase on tire sales to the Air Pollution
Control Fund for the Carl Moyer Memorial Air Quality
Standards Attainment (Carl Moyer) Program and other air
emission reduction efforts.
c) $3 additional fee on the annual vehicle registration fee
($2 for the ARFVT and $1 for the Enhanced Fleet
Modernization Subaccount).
d) $2 surcharge for local air districts on vehicle
registrations to fund emission reduction programs,
including the Carl Moyer Program.
e) $5 increase of the fee for special identification plates
for construction equipment, farm trailers, cotton trailers,
logging vehicles, and cemetery equipment. The revenues are
directed equally to the ARFVT Program and the Air Quality
Improvement Program.
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f) $10 or $20 (depending upon the even or odd year of
registration) increase for vessel registration. The
revenues are directed equally to the ARFVT Program and the
Air Quality Improvement Program.
2)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.
3)Repeals the authority of ARB, until January 1, 2024, from
enforcing regulations related to the Clean Fuels Outlet
regulation and the deployment of hydrogen fueling stations.
4)Requires ARB to provide a report by January 1, 2014, and every
two years thereafter, the number of vehicles that automobile
manufacturers project to be sold or leased.
5)Requires CEC to allocate $20 million each fiscal year from
July 1, 2013, through June 30, 2016, and up to $20 million
each fiscal year thereafter, not to exceed 20% of moneys
appropriated by the Legislature from the ARFVT 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.
6)Makes various findings and recommendations relative to
increasing alternative fuel use and decreasing the use of
petroleum fuels to reduce greenhouse gas emissions.
7)Authorizes CEC to defer allocating the moneys as needed to
keep the number of fueling stations appropriate for the
fueling needs of hydrogen vehicles.
8)Upon consultation with ARB in determining that the private
sector is establishing publicly available hydrogen fueling
stations without the need for government support, authorizes
CEC to cease funding for the hydrogen fueling stations.
9)Requires, on or before December 31, 2015, and annually
thereafter, ARB and CEC to jointly review and report on
progress toward establishing a hydrogen fueling network, as
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specified.
10)Authorizes CEC to design grants, loan programs, and other
forms of financial assistance, and authorizes CEC to enter
into an agreement with the State Treasurer's Office to provide
financial assistance to further the development of the
hydrogen fueling network.
11)Establishes 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 and for
liquidation up to four years after expiration of the deadline
to encumber.
12)Requires ARB, no later than July 1, 2013, to convene a
working group to evaluate the policies and goals for the Carl
Moyer Program and programs established pursuant to AB
923 (Firebaugh), Chapter 707, Statutes of 2004.
13)States the intent of the Legislature that ARB and CEC update
the analysis of the state alternative transportation fuel use
and requires coordination between the two agencies in
implementing the various alternative fuel mandates.
14) 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.
15)Requires CEC, in consultation with ARB, to evaluate how the
investments could be used to increase the use of alternative
transportation fuels and to evaluate the impact of federal and
state fuel policies on increasing the use of such fuels.
16)Requires, beginning November 1, 2015, and every two years
thereafter, CEC and ARB, as a part of integrated energy policy
report, to include the reporting information required pursuant
to the preceding Sections 13) and 15). Requires that the
report include details of the quantities of alternative fuels
used as specified.
17)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.
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18)Provides that this bill does not preempt provisions of AB 32
(Nunez and Pavley), Chapter 488, Statutes of 2006, and that
the bill be implemented consistent with environmental, public
health, and sustainability considerations articulated in clean
fuels and vehicle funding statutes.
19)Requires ARB and CEC, when studying the state's alternative
transportation fuel use, to measure:
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)Pursuant to AB 118 (Nunez), Chapter 750, Statutes of 2007,
establishes various programs to help implement the state's AB
32 greenhouse gas emission reduction goals:
a) The Enhanced Fleet Modernization Program, under which
ARB, in consultation with the BAR, permanently removes cars
and small trucks from operation due to the voluntary
retirement of the vehicle by their owners. The program is
funded through a $1 increase in the annual vehicle
registration fee that is set to expire January 1, 2015.
b) The ARFVT Program, administered by CEC to provide
incentives to accelerate the development and deployment of
clean, efficient, low carbon alternative fuels and
technologies. The program is funded through increases in
vehicle registration fees, smog abatement fees, boat
registration fees, and special identification plate fees,
plus $10 million annually in perpetuity from the Public
Interest Research, Development, and Demonstration Fund,
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which is derived from a portion of electric utility rates.
With the exception of the funds from the electric
utilities, the authority to collect the fees expire on
January 1, 2015.
c) The Air Quality Improvement Program, administered by ARB
in consultation with local air districts, funds projects
that reduce criteria air pollutants, improve air quality,
and provide research for alternative fuels and vehicles,
vessels, and equipment technologies. The program is funded
by increases in smog abatement fees, boat registration
fees, and special identification plate fees scheduled to
expire January 1, 2015.
2)Expands the Carl Moyer Program, pursuant to AB 923, to cover
additional pollutants and engines, imposes a $1.00 fee on tire
sales to fund the Moyer Program and the California Department
of Resources Recycling and Recovery (CalRecycle), and
establishes air quality improvement programs through local air
districts. All of its provisions sunset on January 1, 2015.
3)Establishes the Carl Moyer Program as administered by ARB that
funds 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.
4)Requires ARB to adopt regulations that achieve the maximum
feasible and cost-effective reduction of greenhouse gas
emissions from motor vehicles, pursuant to AB 1493 (Pavley),
Chapter 200, Statutes of 2002.
5)Requires CEC and ARB to adopt a state plan to increase the use
of alternative transportation fuels, including setting
alternative fuel goals for 2012, 2017 and 2022, pursuant to AB
1007, (Pavley), Chapter 371, Statutes of 2005. The "AB 1007
State Alternative Fuels Plan, December 2007" recommended goals
for alternative fuel use of 9% by 2012, 11% by 2017, and 26%
by 2022.
6)Requires that all hydrogen used for transportation fuel in the
state must be at least 33.3% from renewable sources, pursuant
to SB 1505 (A. Lowenthal) Chapter 877, Statutes of 2006.
7)Requires ARB to adopt a statewide greenhouse gas emissions
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limit equivalent to 1990 levels by 2020 pursuant to AB 32. In
2009, ARB adopted a low carbon fuel standard (LCFS) regulation
pursuant to AB 32. The LCFS requires a reduction in the
carbon intensity of California's transportation fuels by at
least 10% by 2020.
8)Pursuant to ARB 's Clean Fuels Outlet regulations, requires
certain owners and lessors of retail gasoline stations to
equip an appropriate number of their stations with clean
alternative fuels. ARB's recent amendments to the regulations
focused primarily on providing outlets for hydrogen fuels.
9)Establishes the Public Interest Research, Development, and
Demonstration Fund in the State Treasury, for use by the CEC
to develop technologies to improve environmental quality as
specified.
FISCAL EFFECT : According to the Assembly Appropriations
Committee in their fiscal estimates of last year's bill, SB 1455
(Kehoe), of 2012, which was similar to this bill, AB 8 will
result in the following fiscal impacts:
1)Annual tire fee revenue, ranging from roughly $21 million to
$26 million to ARB to fund the Carl Moyer Program, pursuant to
a $0.75 per tire increase starting January 1, 2015.
2)Annual revenue of approximately $180 million from extension of
various vehicle, vessel, and other air quality-related
surcharges to fund AB 118 programs, as follows: approximately
$105 million for the ARFVT Program, administered by CEC;
approximately $45 million for the Air Quality Improvement
Program; administered by ARB; and, approximately $30 million
for the passenger vehicle car scrap program, administered by
BAR.
3)Annual local revenue, of approximately $50 million, from
extension of local surcharge on vehicle registration fees to
fund local vehicle emissions reduction projects (various local
funds).
4)Annual redirection of $20 million from the ARFVT Fund during
each fiscal year 2013-14 through 2015-16, and up to that
amount each fiscal year thereafter, away from projects for the
development and commercialization of nonpetroleum fuels and to
projects for the construction and operation of a hydrogen
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fueling network.
5)Ongoing costs in the hundreds of thousands of dollars to ARB,
CEC, and BAR to continue to administer various air quality and
alternative fuel programs. These costs will be fully covered
by the fee extensions authorized by this bill.
6)Ongoing costs in the hundreds of thousands of dollars to ARB
and CEC to track and periodically report on alternative-fueled
vehicle sales and progress in establishing a hydrogen fueling
network, to evaluate alternative fuels use and include such
information in the IEPR, and to update the economic analysis
used in developing ARB's regulations.
COMMENTS : California faces significant challenges with air
quality. According to the author, "California has some of the
worst air quality in the nation with 91% of residents living in
areas of poor air quality. Air pollution increases risks for,
among other things, respiratory problems including asthma - with
children being especially vulnerable - heart disease, stroke,
cancer and reduced life span. There is a clear need to ensure a
cleaner transportation future in order to improve air quality
and public health, improve our energy security, and improve the
overall efficiency of our transportation system. However,
California's major clean transportation and air quality
investment programs are set to expire in the near future." He
asserts that his bill would provide California a long term
transportation plan that achieves the use of cleaner more
efficient transportation technologies.
Fee and surcharge extensions : This bill would extend the sunset
dates and the related fees and surcharges of various clean air
and alternative fuels and vehicle programs as administered under
ARB, CEC, and BAR, until January1, 2024. Without the extension,
the temporary fee increases would terminate either January 1,
2015, or January 1, 2016, depending on the authorizing statute.
The author has joined together in a single bill the extension of
the various programs originally authorized pursuant to AB 118
and AB 923 and the fees that support them.
Amendments to the Clean Fuels Outlet Regulation : On January 26,
2012, ARB considered amendments to the Clean Fuels Outlet
regulation as part of its Advanced Clean Cars package. In order
for the amendments to be officially adopted, they were required
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to be submitted to the Office of Administrative Law within one
year of the initial rulemaking notice. The amendments were
intended to ensure that there was sufficient hydrogen fueling
infrastructure necessary to meet forecasted fuel cell vehicle
deployment. Under the amendments, this infrastructure would
have helped to ensure sufficient availability of hydrogen after
fuel cell vehicles had become commercially available (i.e.,
large volumes). In order to meet the infrastructure needs, the
amendments would have required that oil refiners assure that
hydrogen fueling stations were available to the public once
certain triggers were met (10,000 fuel cell vehicles in a
regional air basin or 20,000 fuel cell vehicles statewide). The
ARB did not file the amendments with the Office of
Administrative Law because, in its view, a better way to achieve
the goals of the regulation was developed through legislation,
which, they believe, is embodied in this bill.
According to ARB, "AB 8 would direct $20 million from the AB 118
program for each of the first three years to develop the
hydrogen infrastructure. AB 8 would also authorize the CEC to
allocate up to an additional $20 million annually after July 1,
2016, as necessary, to construct at least 100 publicly available
hydrogen fueling stations in California. The dedication of
funding for 100 hydrogen stations in lieu of requiring the
development of such stations administratively as proposed
through the Clean Fuels Outlet regulation provides a stronger,
more certain path to achieving the state's air quality and
climate change goals. Guaranteeing funding for infrastructure
upfront will support the initial commercial launch of vehicles,
which is in advance of the triggers as proposed in the
regulations. By contrast, the regulation would have only
provided for hydrogen fueling stations after a significant
volume of vehicles were on the road.
Adequate funding for hydrogen stations effectively achieves the
goal of the proposed regulation, therefore rendering the
regulatory changes unnecessary. As a result, this bill also
repeals the authority of ARB, until January 1, 2024, from
enforcing any element of the Clean Fuels Outlet 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."
The Sierra Club California objects to the repeal of ARB's
authority of enforcing any element of the Clean Fuels Outlet
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regulation and contends that it "undermines the integrity of the
rulemaking process?It suggests that, if one of the regulated
entities is dissatisfied with the outcome, that entity can march
over to the Capitol and get the Legislature to simply throw out
the rule?"
In response, ARB contends that the bill provides greater
certainty that the minimum fueling infrastructure will be in
place to support the initial commercial launch of fuel cell
vehicles, which are necessary for achieving the state's
long-term air quality and climate change goals. Furthermore,
the amendments to the regulation were controversial and would
have been litigated, potentially delaying their implementation.
They believe that the bill represents a collaboration among
stakeholders and is a more certain and productive way to achieve
the goals of the proposed regulation amendments.
The need for hydrogen fueling stations : This bill requires the
CEC to fund enough hydrogen stations to make fueling convenient
to the owners of hydrogen vehicles or until the private sector
takes over building and operating stations. According to the
CEC, it currently costs about $1.5 million to construct a
hydrogen fueling station. Currently, the CEC requires a match
of non-state funds, so it provides about $1 million per station.
For start-up funding for installation of a preliminary hydrogen
fueling network, this bill directs up to $220 million ($20
million per year for three years plus up to $20 million per year
for another eight years) of AB 118 revenues to the construction
and operation of hydrogen fueling stations.
It is ARB's contention that transitioning the vehicle fleet to
lower carbon intensity and zero emission fueling technologies
requires a portfolio of investments in a variety of fueling and
vehicle technologies to achieve near- and long-term goals. They
further contend that the bill provides parity to hydrogen when
compared to other alternative fueling technologies, and it does
so at a critical period in the deployment of hydrogen fuel cell
vehicles. They express that "The auto manufacturers have
committed to an initial commercial launch of fuel cell vehicles
beginning in 2015 and it is critical that a minimum network of
hydrogen fueling stations is in place to support those vehicles.
Without the deployment of early stations, consumers will not
have confidence that fuel will be available, undermining demand
for these vehicles. The auto manufacturers have collectively
invested several billions of dollars in this important zero
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emission technology. Only a dedicated, multi-year funding
stream will provide the necessary certainty that the fueling
infrastructure will be available."
Proposition 26 : Proposition 26, which passed in November 2010,
requires that any "change in statute which results in a taxpayer
paying a higher tax must be imposed by an act passed by not less
than two-thirds of all members elected to each of the two houses
of the Legislature." Because this bill extends the additional
fees on vehicle and boat registrations and a portion of the tire
fee, and because these fees are deemed taxes under Proposition
26, this bill requires a two-thirds vote. As the bill is also
an urgency measure that requires two-thirds vote for passage,
the Office of the Legislative Counsel indicates that their
practice is to cite the urgency's two-thirds vote requirement as
a priority over any other provision of the bill that may trigger
a similar two-thirds vote.
Support : Writing in support of this bill, the proponents note
that the bill would provide the necessary funding for hydrogen
fueling infrastructure to support commercial fuel cell vehicle
deployment in California beginning in 2015. Fuel cell vehicles,
in addition to other advanced clean vehicles, are necessary to
meet federal and state clean air standards, AB 32 goals and to
increase energy security. They further cite that the existing
programs "have already resulted in significant air quality and
public health benefits, supported advances in clean
transportation."
Oppose : Writing in opposition to this bill, as indicated
earlier in the discussion of the Clean Fuels Outlet regulation,
the Sierra Club California contends that the bill could set a
dangerous precedent by prohibiting ARB from implementing and
enforcing the regulation. They urge that the bill be amended to
remove the prohibition language so that ARB's rulemaking
authority will not be abrogated.
Also, in opposition to the bill, the Howard Jarvis Taxpayers
Association indicates that the tax increase will prove to be
extremely regressive for California drivers. They also contend
that the Legislature is "breaking another promise as these fees
were supposed to sunset at the end of 2014, not be extended for
another nine years."
Related bills : SB 11 (Pavley) of 2013, a similar bill. That
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bill is awaiting hearing in the Senate Environmental Quality
Committee and, upon approval, the Senate Transportation and
Housing Committee. At some point in the legislative process, SB
11 and AB 8 may need to be reconciled.
AB 1324 (Skinner) of 2013, would authorize, until January 1,
2018, Alameda County to increase the motor vehicle registration
tax from $1 to $2, and increase the service fee on commercial
motor vehicles from $2 to $4. That bill is scheduled to be
heard in this committee next week.
AB 767 (Levine) of 2013, would expand the current authorization
provided to a few counties to all the counties to increase the
tax on vehicle registrations for vehicle theft crimes. That
bill is scheduled to be heard in this committee today.
AB 1002 (Bloom) of 2013, would raise the tax on vehicle
registrations by $6 for sustainable communities strategies
purposes by local and regional planning entities. That bill is
scheduled to be heard in this committee next week.
SB 1455 (Kehoe) of 2012, a similar bill introduced last session
that passed the Assembly but died in the final moments of the
legislative session.
Double referral : This bill has also been referred to the
Assembly Natural Resources Committee.
REGISTERED SUPPORT / OPPOSITION :
Support:
American Lung Association in California (Co-sponsor)
California Air Pollution Control Officers Association
(Co-sponsor)
CALSTART (Co-sponsor)
Achates Power
Aemetis
Alliance of Automobile Manufacturers
Antonio Villaraigosa, Mayor, City of Los Angeles
Association of Global Automakers
Bay Area Air Quality Management District
Bay Area Biosolids to Energy Coalition
BIODICO
Bioenergy Association of California
Black Business Association
Bosch Rexroth Americas
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California Air Resources Board
California Association of Black Pastors
California Association of Winegrape Growers
California Center for Sustainable Energy
California Citrus Mutual
California Cotton Ginners & Growers Association
California Council for Environmental and Economic Balance
California Dairies, Inc.
California Electric Transportation Coalition
California Farm Bureau Federation
California Grape & Tree Fruit League
California Independent Oil Marketers Association
California Manufacturers & Technology Association
California Municipal Utilities Association
California Natural Gas Vehicle Coalition
California Rice Industry Association
California Service Station & Automotive Repair Association
California Small Business Alliance
California Thoracic Society
California Transit Association
California Trucking Association
Caltrain
Carson Black Chamber of Commerce
Caterpillar
ChargePoint
Clean Energy
CleanWorld
Coalition for Clean Air
CODA Automotive
CR&R Incorporated
Dow Kokam
Eaton Vehicle Group
Efficient Drivetrains, Inc.
Electric Vehicles International, LLC
Environmental Defense Fund
Environmental Enterprises
Greater Corona Hispanic Chamber of Commerce
Greenkraft, Inc.
Harvest Power
Hispanic Chamber of Commerce Contra Costa County
Hydrogenics Corporation
Honda North America, Inc.
Hundai Motor America
Hydrogenics Corporation
Kern County Taxpayers Association
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King Canyon Unified Transportation
Los Angeles Area Chamber of Commerce
Metropolitan Transportation Commission
Mission Motor Company
Moreno Valley Black Chamber of Commerce
Motiv Power Systems, Inc.
Move LA
Natural Resources Defense Council
Navistar, Inc.
Nisei Farmers League
Odyne Systems, LLC
Otto Construction
Pacific Ethanol
Physicians for Social Responsibility
Propel Fuels
Proterra
Quallion
Quantum Technologies
Regional Asthma Management and Prevention
Sacramento Black Chamber of Commerce
Sacramento Metropolitan Air Quality Management District
Sacramento Municipal Utility District
San Diego Gas and Electric Company
San Diego Urban Economic Association
San Francisco County Transit Authority
San Francisco County Transportation Authority
San Francisco International Airport
San Joaquin Valley Air Pollution Control District
Sempra Energy utilities
Sierra Energy & Sierra Railroad
Silicon Valley Leadership Group
Slavic American Chamber of Commerce
Smith Electric Vehicles
South Bay Latino Chamber of Commerce
South Coast Air Quality Management District
Southern California Gas Company
Southern California Regional Rail Authority
Synergex
Technology Partners
Tesla Motors
The Grant Farm
Total Transportation Services
TransPower
United Parcel Service (UPS)
US Hybrid Corporation
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Ventura County Air Pollution Control Board
Vision Industries Corporation
Volvo Group North America
Waste Management
Western Agricultural Processors Association
Western Propane Gas Association
Western States Petroleum Association
Yolo-Solano Air Quality Management District
Opposition
Automobile Club of Southern California
CRM Company of Rancho Dominguez
Howard Jarvis Taxpayers Association
Sierra Club California, oppose unless amended
Analysis Prepared by Ed Imai / TRANS. / (916) 319-2093