BILL ANALYSIS Ó
AB 8
Page 1
Date of Hearing: May 24, 2013
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 8 (Perea) - As Amended: May 13, 2013
Policy Committee:
TransportationVote:10-3
Natural Resources 6-2
Urgency: Yes State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill 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). Specifically,
this bill:
1)Directs CEC to allocate $20 million, each fiscal year 2013-14
through 2015-16, and up to that amount each fiscal year
thereafter, not to exceed 20% of the amount appropriated from
the Alternative and Renewable Fuel and Vehicle Technology
(ARFVT) Fund, for the construction and operation of a
hydrogen fueling network until there are at least 100 publicly
available hydrogen stations.
2)Prohibits the Air Resources Board (ARB) from submitting
amendments to the clean fuels outlet regulation that would
require the construction or operation of a publicly available
hydrogen fueling station.
3)Extends, to January 1, 2024, the sunset on the following
program funding sources:
a) The new tire fee, set to expire January 1, 2015, $0.75
of which goes to ARB for the Carl Moyer heavy-duty vehicle
emission program and $1 of which goes towards the state's
waste tire management program.
b) Various vehicle, vessel, and other air quality-related
AB 8
Page 2
surcharges to fund alternative fuels programs, known as AB
118 programs, set to expire January 1, 2016, for the
development and commercialization of nonpetroleum fuels
(ARFVT program), for competitive grants for air quality
improvement projects related to fuel and vehicle
technologies (Air Quality Improvement (AQI) Program), and
the passenger vehicle car scrap program.
c) The local surcharge program, known as the Carl Moyer
program, set to expire January 1, 2015, on vehicle
registration fees to fund local vehicle emissions reduction
projects.
4)Requires the CEC and the Air Resources Board (ARB), by
November 1, 2015, and every two years thereafter as part of
the Integrated Energy Policy Report (IEPR), to report on the
status of the state's use of alternative transportation fuels.
The bill also requires ARB and CEC, by November 1, 2014, to
update the economic analysis used in developing ARB's
regulations to include a range of petroleum and alternative
fuel prices to more accurately assess the future costs of
petroleum-based fuels and alternative fuels.
5)Makes technical and conforming code changes.
FISCAL EFFECT
1)Annual fee revenue, ranging from $48 million to $60 million,
from the tire fee extension, 57% of which goes to the
Department of Resources Recycling and Recovery (Calrecycle) to
fund waste tire management, and 43% of which goes to ARB to
fund the Carl Moyer Program.
Absent this bill, the tire fees drops, as of January 1, 2015,
from $1.75 per tire to $0.75 per tire, all of which will go to
Calrecycle to fund waste tire management.
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 AQI Program, administered by
ARB; and approximately $30 million for the passenger vehicle
car scrap program, administered by the Bureau of Automotive
Repair (BAR) (special funds.)
AB 8
Page 3
3)Annual local revenue, of approximately $50 million, from
extension of local surcharge on vehicle registration fees to
fund local vehicle emissions reduction projects.
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, from projects for
development and commercialization of nonpetroleum fuels, to
projects for construction and operation of a hydrogen 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 special fund 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
1)Rationale. The author intends this bill to ensure funding,
currently set to expire, for programs that reduce air
emissions from existing vehicles and develop cleaner
alternative vehicle fuels.
2)Background. The state has several distinct programs that seek
to address air pollution caused by existing vehicles and to
develop cleaner alternative vehicle fuels for widespread use.
These programs include:
a) The Carl Moyer Program , administered by ARB, which
provides grants to fund the incremental cost of
cleaner-than-required heavy-duty engines. Carl Moyer has
funded the incremental cost of a diverse range of project
types, including purchase of new alternative-fuel
heavy-duty vehicles (primarily transit buses and trash
trucks) and engine replacements or agricultural irrigation
pumps, construction equipment, and marine vessels.
According to ARB, these projects have reduced smog-forming
AB 8
Page 4
nitrogen oxide (NOx) emissions by over 18 tons per day and
toxic diesel particulate matter (PM) emissions by almost 1
ton per day, with a cost-effectiveness of about $2,600 per
ton of NOx reduced. Funding for Carl Moyer is conditioned
upon a cost-effectiveness threshold.
The Moyer Program has received funding from a variety of
sources, including bond funds, and currently receives
dedicated funding from a $0.75 charge on the sale of each
new tire, which expires January 1, 2015. The Moyer Program
was modified in 2004 by AB 923 (Firebaugh and Pavley,
Chapter 707), which allowed local air districts to levy a
$2 vehicle registration surcharge to fund local Moyer-like
projects.
b) AB 118 Programs , created in 2007 by Chapter 750 (Núñez),
temporarily raised various vehicle and vessel registration
fees and smog abatement fees. The statute created three
new accounts into which the resulting revenue are to be
placed in order to pay for new programs, as follows:
i) Alternative and Renewable Fuel and Vehicle
Technology Fund . With estimated annual revenues of about
$105 million, this fund provides resources to CEC for
financial awards to further the development and
commercialization of technologies for renewable and
nonpetroleum fuels that help to achieve the state's
climate change goals.
ii) Air Quality Improvement Fund . Bringing in about $45
million each year, the AQI Fund is to provide resources
for ARB to award competitive grants for air quality
improvement projects related to fuel and vehicle
technologies.
iii) Enhanced Fleet Modernization Subaccount . With
annual revenues of about $30 million, this subaccount of
the High Polluter Removal and Repair Account is to be
used by the BAR, in consultation with ARB, to provide
financial compensation for the retirement of
high-polluting California vehicles.
c) Hydrogen Fueling Stations On January 26, 2016, ARB
considered amendments to the Clean Fuels Outlet regulation
as part of its Advanced Clean Cars package. In order for
AB 8
Page 5
the amendments to be officially adopted, ARB is required to
submit the amendment package 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 ARB contends that a better way
to achieve the goals of the regulation was developed
through legislation, which is embodied in this bill. In
the event this bill fails passage, ARB issued a new notice
in February of this year to amend the regulation. If this
bill fails passage, ARB will consider the amendments at its
September board hearing.
Analysis Prepared by : Jennifer Galehouse / APPR. / (916)
319-2081