BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 8
                                                                       

                       SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
                               Senator Jerry Hill, Chair
                               2013-2014 Regular Session
                                            
           BILL NO:    AB 8
           AUTHOR:     Perea
           AMENDED:    August 12, 2013
           FISCAL:     Yes               HEARING DATE:   August 21, 2013
           URGENCY:    Yes               CONSULTANT:      Rebecca Newhouse
            
           SUBJECT  :    ALTERNATIVE FUELS

            SUMMARY  :    
           
            Existing law  :

           1) Authorizes local air district boards to adopt a $2 surcharge  
              on vehicle registration, subject to certain requirements, to  
              be used to implement emission reduction programs from  
              vehicular sources or off-road engines, including for projects  
              eligible under the Carl Moyer Program, and other specified  
              projects until January 1, 2015 (Health and Safety Code §§41081  
              & 44225). 

           2) Under the California Alternative and Renewable Fuel, Vehicle  
              Technology, Clean Air, and Carbon Reduction Act of 2007 (HSC  
              §43865 et seq.), requires the California Energy Commission  
              (CEC) to implement the Alternative and Renewable Fuels and  
              Vehicle Technology Program (ARFVTP) to provide funding  
              measures to specified entities to develop and deploy  
              technologies and alternative and renewable fuels in the  
              marketplace, without adopting any one preferred fuel or  
              technology, to help attain the state's climate change  
              policies.  The CEC is required to develop an investment plan  
              for the program in consultation with an advisory committee,  
              pursuant to specified requirements.  An evaluation of the  
              efforts funded by the ARFVTP that includes research,  
              development, and deployment efforts funded by this program is  
              required every two years, beginning in 2011. 

           3) Creates the Air Quality Improvement Program (AQIP), to be  
              administered by the California Air Resources Board (ARB) in  
              consultation with local air districts, to fund air quality  









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              improvement projects (HSC §44274). 

           4) Creates the Enhanced Fleet Modernization Subaccount to  
              implement an Enhanced Fleet Modernization program (EFMP)  
              developed by ARB, in consultation with the Bureau of  
              Automotive Repair, to commence on January 1, 2010, that allows  
              for the voluntary retirement of high polluting passenger  
              vehicles and light-duty and medium-duty trucks (HSC §44125).

           5) Establishes certain vehicle and vessel related surcharges and  
              fees, until January 1, 2016, including an $8 fee increase in  
              the smog abatement, a $3 fee increase in the annual vehicle  
              registration fee, a $5 fee increase for special identification  
              plates and a $10-20 fee increase for vessel registration, to  
              fund the AQIP and the ARFVT and EFM programs (HSC §44060.5 and  
              Vehicle Code §§9250.1, 9261.1, & 9853.6).

           6) Requires that ARB, no later than July 1, 2008, develop  
              regulations to apply following a year after a 12-month period  
              where the hydrogen fuel dispensed in California for  
              transportation purposes exceeds 3,500 metric tons.  The  
              regulations are required to ensure the following (HSC §43868  
              et seq.):

              a)    That the hydrogen produced or dispensed in state be made  
                 from at least 33% renewable resources, as defined, on a  
                 statewide basis;

              b)    That "well-to-wheels" greenhouse gas (GHG) emissions for  
                 an average hydrogen powered car in state are at least 30%  
                 less than an average new gasoline-powered vehicle's GHG  
                 emissions;

              c)    That "well-to-tank" emissions of nitrogen oxides (NOx)  
                 and reactive organic gases are at least 50% lower for all  
                 hydrogen fuel dispensed in state than for the average motor  
                 gasoline sold in state on an energy equivalent basis. 

              d)    That "well-to-tank" emissions of relevant toxic air  
                 contaminants from hydrogen fuel produced or dispensed in  
                 California be reduced to the maximum extent feasible at  
                 each site when compared to well-to-tank emissions of toxic  
                 air contaminants of the average motor gasoline fuel on an  









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                 energy equivalent basis.

           7) Under the California Global Warming Solutions Act of 2006,  
              requires ARB to determine the 1990 statewide greenhouse gas  
              (GHG) emissions level and approve a statewide GHG emissions  
              limit that is equivalent to that level, to be achieved by  
              2020, and sets various requirements to meet this requirement  
              (HSC §38500 et seq.). 

           8) Requires ARB to adopt regulations to achieve the maximum  
              feasible and cost-effective reduction of GHG emissions from  
              motor vehicles (HSC §43018.5).

           9) Establishes the Carl Moyer Program, administered by ARB, to  
              fund the incremental cost of cleaner-than-required vehicles,  
              engines, and equipment and authorizes the funding of projects  
              reducing NOx, particulate matter (PM) and reactive organic  
              gasses emissions under the Carl Moyer Program until January 1,  
              2015, after which date, only the reduction of NOx emission  
              reduction projects will be eligible for funding (HSC §44275). 

           10)Establishes the California Tire Recycling Fee, which imposes a  
              $1.75 surcharge on new tires, where $1 is deposited into the  
              Tire Recycling Fund for oversight, enforcement and market  
              development grants relating to waste tire management and  
              recycling by the Department of Resources Recycling and  
              Recovery (DRRR), and $0.75 is directed to the Air Pollution  
              Control Fund to be allocated by the ARB to local air districts  
              for programs and projects that mitigate mobile source air  
              pollution, until January 1, 2015, at which point the tire fee  
              is reduced to $0.75 and retained by DRRR (PRC §42885).

            This bill  :  

           NOTE: This bill contains very similar provisions of SB 11  
           (Pavley) as heard by this committee on April 3, 2013, and with  
           the most recent amendments, is nearly identical to SB 11 as it  
           passed out of the Senate. 

           1) Extends the authorization for local air district boards to  
              adopt a $2 surcharge on vehicle registration, to be used to  
              implement emission reduction programs from vehicular sources  
              or off-road engines, until January 1, 2024. 









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           2) Extends the sunset date of various vehicle and vessel-related  
              fees, including an $8 fee increase in smog abatement, a $3 fee  
              increase in the annual vehicle registration fee, a $5 fee  
              increase for special identification plates, and a $10 to $20  
              fee increase for vessel registration, to fund the ARFVT, AQIP  
              and EFM programs, until January 1, 2024.

           3) Extends the sunset date of the $1.75 fee on tire sales, where  
              $1 is directed to DRRR, and $0.75 is directed to the Air  
              Pollution Control Fund to fund the Carl Moyer Program, until  
              January 1, 2024.

           4) Defines "publicly owned hydrogen fueling station" to mean  
              equipment used to store and dispense hydrogen fuel to vehicles  
              according to industry codes and standards that is open to the  
              public.

           5) Prohibits ARB from enforcing any element of its existing clean  
              fuels outlet regulation or of any regulation that requires  
              that any supplier, as defined, to construct, operate or  
              provide funding for the construction or operation of any  
              publicly available hydrogen fueling station until January 1,  
              2024.

           6) Requires ARB, on or before June 30, 2014, and every year  
              thereafter, to aggregate and make available the number of  
              hydrogen-fueled vehicles that motor vehicle manufacturers  
              project to be sold or leased over the next three years and the  
              total number of DMV-registered hydrogen-fueled vehicles.

           7) Requires ARB, on or before June 30, 2014, and every year  
              thereafter, based on the information made available, to  
              evaluate the need for additional publicly available  
              hydrogen-fueling stations for the subsequent three years and  
              report findings to the CEC on the need for additional public  
              hydrogen-fueling stations.

           8) Requires CEC to allocate $20 million annually to fund the  
              number of stations identified, not to exceed 20 percent of the  
              monies appropriated by the Legislature from the ARFVTP fund,  
              until there are at least 100 publicly available  
              hydrogen-fueling stations in California.









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           9) Allows CEC, in consultation with ARB, upon determination that  
              the full amount is not needed to fund the number of hydrogen  
              stations, to allocate any remaining monies to other ARFVTP  
              projects.

           10)Requires CEC, in consultation with ARB, to award funds based  
              on best available data, in accordance with a strategy that  
              supports the deployment of an effective and efficient hydrogen  
              fueling station network that maximizes benefit to the public  
              and minimizes cost to the state.

           11)Authorizes CEC to cease funding for the hydrogen fueling  
              stations upon consultation with ARB in determining that the  
              private sector is establishing publicly available hydrogen  
              fueling stations without the need for government support.

           12)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  
              specified.

           13)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.

           14)Establishes that funds appropriated to CEC for the purposes of  
              hydrogen fueling stations 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. 

           15)Requires ARB, in consultation with air districts, to convene  
              working groups to evaluate the policies and goals of the Carl  
              Moyer Program, no later than July 1, 2014.

           16)Defines "benefit-cost score" for the ARFVTP to mean a  
              project's expected or potential GHG emission reductions per  
              dollar awarded, and, for the purposes of the AQIP, to mean the  
              reasonably expected or potential criteria pollutant emission  
              reductions achieved per dollar awarded by the ARB for a  









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              category of investments identified for potential funding by  
              ARB.

           17)Requires a competitive process for the allocation of funding  
              for ARFVTP and AQIP to consider benefit-cost scores, and  
              requires CEC to give additional preference to funding projects  
              through the ARFVT program with higher benefit-cost scores. 

           18)Requires ARB to give preference in awarding funding to  
              projects with higher benefit-cost scores that maximize the  
              purposes and goals of AQIP and authorizes ARB to give  
              additional preference based on criteria, as specified.  

           19)Requires benefit-cost assessments be included in the  
              evaluation of the efforts funded by the ARFVTP.

           20)Requires CEC and ARB to ensure that revenues from specified  
              fees imposed on vehicles that are used for purposes of the  
              ARFVTP and AQIP are expended in compliance with Section 3 of  
              Article XIX of the California Constitution, which limits  
              permissible uses of vehicle fees and taxes to specified  
              transportation-related purposes.

           21)Specifies that consumer incentives for light-duty vehicles  
              shall not be greater than compensation given under the  
              Enhanced Fleet Modernization Program (EFMP).

           22)Adds intelligent transportation systems as a category of  
              projects eligible for funding under the ARFVTP.

           23)Extends the authorization to fund projects reducing NOx, PM  
              and reactive organic gasses under the Carl Moyer Program,  
              until January 1, 2024.

           24)Deletes language referring to the Carl Moyer Memorial Air  
              Quality Standards Fund, and instead refers to the Air  
              Pollution Control Fund, and makes other technical and  
              conforming changes. 

           25)Provides that the measure is an urgency statute.

            COMMENTS  :










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            1) Purpose of Bill  .  The author notes that, "According to a 2010  
              Central Valley Health Policy Institute report, the San Joaquin  
              Valley (Valley) remains one of the worst air quality regions  
              in the nation, ozone levels continue to exceed federal  
              one-hour and eight-hour standards, and recent data on smog  
              emissions show the Valley leads the nation with the most days  
              of polluted air.  In 2010 California had all ten of the most  
              polluted counties in the nation. Of the counties, four were in  
              the Valley.  In addition, a recent study by the UC Davis  
              Center for Regional Change cited that, as a result of air  
              pollution generated by stationary agricultural and industrial  
              sources coupled with the automobiles and diesel trucks that  
              stream through the region's highways, residents of the San  
              Joaquin Valley suffer from high rates of asthma and other  
              respiratory ailments. 

              Despite significant improvements in emission reductions and  
              the toughest air regulations, we cannot improve air quality  
              and public health and achieve our clean air goals of a 90  
              percent reduction in emissions by the mid-2020's for the  
              Valley and the state without incentives and investments to  
              accelerate the transition to a cleaner transportation sector.   
              AB 8 would provide California a long-term transportation plan  
              that achieves the use of cleaner more efficient transportation  
              technologies while meeting federal and state clean air  
              mandates."

            2) Background  . 

               AB 118  :  AB 118 (Núñez), Chapter 750, Statutes of 2007,  
              created the ARFVT program, AQIP and the EFMP. AB 118 provides,  
              upon appropriation by the Legislature, approximately $180  
              million annually until 2016 for these programs.  These funds  
              primarily come from additional fees on vehicle registrations  
              and vessel registrations.  The extension of the vehicle  
              registration fees, trailer fees, tire fees, and boat  
              registration fees in this bill will result in approximately  
              $180 million per year for an additional eight years for the AB  
              118 programs. 

                            ARFVTP funds projects by various public and  
                     private groups that "develop and deploy innovative  
                     technologies that transform California's fuel and  









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                     vehicle types to help attain the state's climate change  
                     policies."  The CEC prepares an investment plan, in  
                     coordination with a stakeholder advisory committee,  
                     which outlines the ARFVTP's funding priorities. Once an  
                     investment plan is completed, CEC receives and solicits  
                     bids for projects, awarding funds based on eligibility  
                     criteria. According to the CEC, $360 million of ARFVTP  
                     funds have been awarded to projects such as the  
                     construction of electric vehicle charging stations, the  
                     deployment of natural gas-powered vehicles and the  
                     production of biofuels.

                            AQIP, administered by ARB, provides financial  
                     incentives for public and private groups and  
                     individuals to adopt smog and diesel particulate  
                     pollution reducing technology that concurrently reduces  
                     GHG emissions.  Two of AQIP's projects, the Clean  
                     Vehicle Rebate Project (CVRP) and the Hybrid and Zero  
                     Emissions Truck and Bus Voucher Incentive Program,  
                     represent the program's largest funding commitments.   
                     AQIP also provides incentives for biofuels research,  
                     hybrid truck testing, lawn and garden equipment  
                     replacement, zero-emission all-terrain agricultural  
                     work vehicle rebates, advanced technology demonstration  
                     and hybrid off-road equipment pilot projects.

                            The EFMP supplements the Bureau of Automotive  
                     Repair's vehicle retirement program known as the  
                     Consumer Assistance Program.  Through joint  
                     administration by local air districts and BAR, eligible  
                     low-income consumers whose vehicles fail smog check  
                     tests may receive financial assistance to voluntarily  
                     retire their vehicles and/or replace them with vehicles  
                     meeting certain emission and model-year requirements.   
                     During fiscal year 2011-12, approximately $34 million  
                     of EFMP funds were expended for the retirement of  
                     25,741 vehicles.
               
              Carl Moyer Program/AB 923  :  AB 1571 (Villaraigosa), Chapter  
              923, Statutes of 1999, established the Carl Moyer Memorial Air  
              Quality Standards Attainment Program through which ARB  
              provides grants to offset the incremental costs of purchasing  
              or retrofitting engines in order to reduce specified air  









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              emissions.  The Carl Moyer Program originally received General  
              Fund appropriations. AB 923 (Firebaugh), Chapter 707, Statutes  
              of 2004, expanded the Carl Moyer Program to cover additional  
              pollutants and engines, imposed a $0.75 fee on tire sales to  
              fund the Carl Moyer Program, and authorized local air  
              districts to levy a surcharge on vehicle registrations to fund  
              certain emission reduction programs, including eligible  
              projects under the Carl Moyer Program. The fee and the  
              expansion to cover additional pollutants for the Carl Moyer  
              Program, as well as the authorization for the surcharge, are  
              set to expire on January 1, 2015.  

               Clean Fuels Outlet  .  ARB adopted its Clean Fuels Outlet (CFO)  
              Regulation to provide fueling stations for fuel to meet the  
              needs of those driving clean, alternative fuel vehicles.  When  
              it first began work on the regulation in 1990, ARB planned to  
              use it as a tool to provide methanol, ethanol, and compressed  
              natural gas fueling stations once a certain number of vehicles  
              using those fuels were certified in California.  Those  
              vehicles were not forthcoming, and ARB last updated the  
              regulation in 2000.

              In January 2012, ARB considered and passed amendments to the  
              regulation to require major refiners and importers of gasoline  
              to provide alternative fuel fueling stations when the number  
              of vehicles using a particular alternative fuel reaches 10,000  
              within an air basin or 20,000 statewide with specified  
              adjustments.  Refiners and importers of gasoline would provide  
              these alternative fueling stations in proportion to their  
              market share but would not provide fueling stations for  
              electric vehicles.  This update to the CFO Regulation arose as  
              part of ARB's work to meet California's air quality and  
              greenhouse gas emission reduction goals but has not been  
              finalized by the Office of Administrative Law as required by  
              state law.  The public hearing to consider amendments to the  
              CFO is postponed until September 26, 2013.  

               ZEVs  .  ARB's zero emission vehicle (ZEV) regulation requires  
              that by 2025 about 15% of new car sales will be zero emission  
              and requires automakers to produce and sell ZEVs, which  
              include plug-in electric vehicles (PEVs) and fuel cell  
              vehicles (FCVs), in order to achieve this mandate.  Automakers  
              may also produce and sell vehicles that are partially zero  









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              emission or help transition to ZEVs in order to meet the  
              mandate.  This will ensure that there will be 1.5 million ZEVs  
              on the road by 2025 as directed under Governor Brown's  
              Executive Order B-16-2012. 
            
              Hydrogen Highway  .  In 2004, Governor Schwarzenegger signed an  
              executive order calling for the development of the California  
              Hydrogen Highway Blueprint Plan (plan) that would expedite  
              availability of hydrogen fueling stations.  The plan outlined  
              a path for 100 hydrogen-fueling stations and 2,000  
              hydrogen-fueled vehicles by 2010, to be followed by two more  
              phases with increased deployment of fuel cell vehicles (FCVs)  
              and hydrogen fuel stations. 

              As recommended by the plan, the 2005-06 Budget allocated $6.5  
              million for state-sponsored hydrogen demonstration projects  
              and over $12 million was allocated in two subsequent budgets  
              for the continued development of hydrogen stations.  As of  
              April this year, the CEC has awarded $18.2 million, has $28.6  
              currently allocated for hydrogen infrastructure, and has $20  
              million proposed for the 2013-2014 ARFVTP investment plan.   
              According to the California Fuel Cell Partnership (CaFCP),  
              there are currently 43 hydrogen-fueling stations, of which  
              nine are public, 13 are private or demonstration, and 19 are  
              in development.  In total, 25 stations received state funding.  
               The CaFCP has published a document, the California Road Map,  
              which describes the need for 68 hydrogen stations in state by  
              2016 to serve the thousands of FCV drivers expected in the  
              early years of commercialization. 

               Environmental impacts of hydrogen  .  An FCV is powered by the  
              reaction of hydrogen and oxygen in a fuel cell to produce  
              electricity and water vapor as the only tail pipe emission.   
                                                           The initial production of hydrogen may be associated with a  
              range of GHG emissions depending on the production pathway.  
              Electrolysis, where electricity is used to split water into  
              oxygen and hydrogen, can produce hydrogen without GHG  
              emissions if renewable electricity is used. Only a small  
              fraction of hydrogen is produced in this manner, however, due  
              to the high costs associated with electrolyzers and renewable  
              energy.  Currently, the most cost effective way to produce  
              hydrogen on a large scale is to react natural gas with water  
              to produce CO2 and hydrogen (termed steam reformation).   









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              Ninety-five percent of hydrogen is produced via steam  
              reformation, primarily for industrial and refinery purposes.   
              Estimates of "well-to-wheels" (WTW) GHG emissions for hydrogen  
              produced in this manner reduce GHG emissions by half relative  
              to current conventional gasoline vehicles, due in part to the  
              increased efficiency of fuel cells compared to internal  
              combustion engines.  Steam reformation with biomethane as a  
              feedstock could further decrease WTW GHG emissions for  
              hydrogen production, although current supplies of biomethane  
              available in the state are limited.  New regulations and  
              standards for landfill biomethane, as well as efforts to  
              increase biomethane production in state, pursuant to AB 1900  
              (Gatto) Chapter 602, Statutes of 2012, may help increase  
              in-state biomethane production. 

              Current law requires ARB, by July 1, 2008, to develop  
              regulations that would, among other things, require that the  
              hydrogen produced or dispensed in state be made from at least  
              33% renewable resources when dispensed hydrogen exceeds 3500  
              metric tons/year (which translates to roughly 10,000 FCVs).   
              ARB has not yet drafted these regulations and last noticed a  
              workshop for regulation development in 2010. 

            1) Bundling of sunset extensions  .  AB 8 extends the sunset  
              extensions on several disparate programs.  Extension of  
              several fees for several different programs in a single bill  
              makes legislative oversight of each individual program more  
              difficult. 

            2) Abrogating the CFO  .  This bill would override the ARB approved  
              amendments to the CFO and prohibits  ARB from adopting a  
              similar regulation for the next 12 years. In addition to  
              abrogating the CFO regulation, AB 8 prohibits, until 2024, ARB  
              from requiring any supplier to construct, operate or provide  
              funding for the construction or operation of publicly  
              available hydrogen fueling stations. 

              Amendments to the CFO regulation, like other regulations,  
              required significant stakeholder input at the agency level.   
              Statutorily overriding regulations is the Legislature's  
              prerogative, but undoing the stakeholder process should only  
              be done when the Legislature believes there is adequate  
              justification. 









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               Rationale  .  According to Jennifer Gress, Legislative Director  
              for the ARB, in response to questions regarding the abrogation  
              of the CFO regulation at the April 3, 2013 hearing on SB  
              11(Pavley), the dedication of funding for 100 hydrogen  
              stations in lieu of requiring the development of such stations  
              administratively as proposed through the CFO regulation  
              provides a stronger, more certain path to achieving the  
              state's air quality and climate change goals.  She also stated  
              that 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, and by  
              contrast, the regulation would have only provided for hydrogen  
              fueling stations after a significant volume of vehicles were  
              on the road. She contends that adequate funding for hydrogen  
              stations effectively achieves the goal of the proposed  
              regulation, therefore rendering the regulatory changes  
              unnecessary.

              She also states that ARB expected litigation from the oil  
              industry, potentially delaying their implementation and  
              undermining the certainty of funding for hydrogen  
              infrastructure in the state and further adds that the CFO  
              regulation was controversial and criticized, including by  
              Members of the Legislature, and the provisions in the bill  
              represent the collaboration and consensus among stakeholders,  
              including automobile manufacturers, oil industry, hydrogen  
              fuel providers, ARB and CEC.

            3) ARFVTP funded infrastructure  .  For infrastructure funded by  
              the CEC's Alternative and Renewable Fuels and Vehicle  
              Technology program, should a fraction of the cost of  
              re-charging or re-fueling be directed to the state to help pay  
              back the initial public investment, when that infrastructure  
              becomes profitable? 

            4) ARFVTP benefits report  .  The December 2011 benefits report  
              evaluated the first few years of funding from the ARFVT  
              program.  The report gave a range for estimated petroleum and  
              diesel fuel displacement in years leading up to 2020 based on  
              ARB's ZEV mandate, as well as surveys and feedback from grant  
              awardees and auto manufacturers.  The high and low projections  
              are based on a variety of factors including uncertainties in  









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              the market, gas prices, extent of future utilization of funded  
              technologies, consumer willingness to switch to alternative  
              vehicles and infrastructure readiness.  The report gives a  
              high value for petroleum gallons displaced from FCVs,  
              estimated to number 124,000 by 2020, of 4% of the total  
              gallons displaced from alternative fuel and vehicle  
              technologies in 2020 (estimated to be 1.184 billion). In  
              contrast, petroleum displaced due to plug-in electric vehicles  
              (PEV) represents 21% of the total projected petroleum  
              displaced for the high estimate in 2020.  These numbers  
              highlight the fact that FCVs will not result in a significant  
              reduction of GHG emissions in the short run, but instead, will  
              require vehicle market transformation where FCVs represent a  
              large fraction of the vehicle fleet to realize significant GHG  
              reductions.  Although not insurmountable, the requirements for  
              market transformation of FCVs, including creating a hydrogen  
              fueling infrastructure network from scratch, distributing  
              hydrogen fuel at competitive costs to dispersed fueling  
              stations and high initial FCV costs in the early stages of a  
              transition, represent significant challenges, especially  
              considering the limited public funds available and the  
              uncertainty surrounding when the hydrogen market will be  
              self-sustaining and no longer require public subsidy. 

               Benefit-cost score .  The latest amendments to AB 8 establish a  
              "benefit-cost score" as a consideration that would apply to  
              ARFVTP and AQIP.  For ARFVTP, the benefit-cost score means a  
              project's expected or potential GHG emissions reduction per  
              dollar awarded.  For AQIP, the benefit-cost score is the  
              project's reasonably expected or potential criteria pollutant  
              emission reductions achieved per dollar awarded, where  
              "project" is defined as a category of investments, excluding  
              individual incentive payments.  CEC and ARB are required to  
              consider benefit-cost score, among other factors, when  
              establishing a competitive process for the allocation of funds  
              for projects, and give preference to funding projects with  
              higher benefit-cost scores.  These provisions will require an  
              up-front estimate of emission reductions for projects,  
              including hydrogen infrastructure funding mandated by AB 8.   
              The bill also requires a benefit-cost assessment for projects  
              funded by the ARFVTP to be included in the ARFVTP benefits  
              evaluation report.










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            5) CEC has the authority to allocate money for hydrogen  
              infrastructure  .  Under the AB 118 program administered by the  
              CEC, projects for hydrogen infrastructure can already be  
              awarded, but the author and proponents contend that the  
              provisions requiring $20 million per year be appropriated for  
              hydrogen infrastructure through 2024 are necessary to send a  
              clear signal to auto manufacturers that there is a commitment  
              to hydrogen infrastructure from the state and thus prompt a  
              timely roll out of FCVs from the manufacturers beginning in  
              2015.

            6) Extension of tire fee for tire recycling programs  .  As  
              previously noted, a fee of $1.75 is assessed on the sale of  
              new tires, of which $1 is deposited into the Tire Recycling  
              Fund for the administration and implementation of tire  
              recycling programs by DRRR, and $0.75 goes to the Air  
              Pollution Control Fund in order to fund the Carl Moyer  
              Program. Current law reduces the $1 fee for tire recycling  
              programs to $0.75 on January 1, 2015.  AB 8 extends both the  
              $0.75 fee for the Carl Moyer Program, as well as $1 to DRRR  
              for tire recycling programs until January 1, 2024. The  
              introduced version of AB 8 extended only the $0.75 funding the  
              Carl Moyer Program until 2024, while allowing the portion of  
              the tire fee for DRRR's tire recycling programs to reduce to  
              $0.75 in 2015. 

              It is unclear if the additional $0.25 per tire from 2015 until  
              2024 for DRRR's tire recycling programs is necessary, as the  
              Tire Recycling Fund has a surplus of $32 million for fiscal  
              year 2013-14.  The Committee may wish to inquire why the  
              additional funds are necessary. If those additional funds are  
              not needed for adequate funding of DRRR's tire recycling  
              programs, the Committee may wish to consider striking the  
              extension of the $0.25 per tire from 2015 to 2024 from the  
              bill. 

            7) Related legislation  .  SB 11 (Pavley) contains nearly identical  
              provisions to this bill. SB 11 is currently in the Assembly  
              Appropriations Committee. SB 1455 (Kehoe) of 2011 included  
              very similar provisions to SB 11.  SB 1455 failed passage on  
              the Senate floor on August 31, 2012 (25-10).

            8) Chaptering out  .  Because AB 8 (Perea) and SB 11 (Pavley)  









                                                                  AB 8
                                                                 Page 15

              contain nearly identical provisions, it may be prudent for the  
              authors of the aforementioned measures to work together to  
              avoid the measures chaptering each other out.  

            SOURCE  :        American Lung Association, California
                          CALSTART
                          California Air Pollution Control Officer's  
                          Association

            SUPPORT  :  Achates Power
                          Aemetis, Inc.
                          Alameda-Contra Costa Transit District
                          Alliance of Automobile Manufacturers
                          Altec Green Fleet
                          American Lung Association in California
                          Associated General Contractors
                          Association of Global Automakers
                          Bay Area Air Quality Management District
                          Bay Area Biosolids to Energy Coalition
                          BIODICO
                          Black Business Association
                          Bosch Rexroth Americas
                          Butte County Air Quality Management District
                          California Association of Black Pastors
                          California Association of Winegrape Growers
                          California Association of School Transportation  
           Officials
                          California Citrus Mutual 
                          California Cotton Ginners & Growers Association
                          California Council for Environmental and Economic  
                     Balance
                          California Dairies, Inc.
                          California Electric Transportation Coalition
                          California Energy Commission
                          California Farm Bureau Federation
                          California Forestry Association
                          California Grape & Tree Fruit League
                          California Hydrogen Business Council
                          California Independent Oil Marketers Association
                          California League of Conservation Voters
                          California Manufacturers & Technology Association
                          California Municipal Utilities Association
                          California Natural Gas Vehicle Coalition









                                                                  AB 8
                                                                 Page 16

                          California Otolaryngology Society
                          California Public Health Association - North
                          California Refuse Recycling Council
                          California Rice Industry Association
                          California Service Station & Automotive Repair  
                     Association
                          California Small Business Alliance
                          California Thoracic Society
                          California Trucking Association
                          Californians Against Waste
                          Caltrain
                          CAPCOA
                          Capstone Turbine Corporation
                          Carson Black Chamber of Commerce
                          Caterpillar
                          Center for Sustainable Energy
                          ChargePoint
                          Clean Power Campaign
                          CleanWorld
                          Coalition for Clean Air
                          Coalition of Energy Users
                          CODA Automotive
                          Community Action to Fight Asthma
                          Construction Industry Air Quality Coalition
                          Contra Costa Council 
                          Cool Planet Energy Systems
                          County of Madera
                          County of Tulare
                          CR&R Incorporated
                          Eaton Vehicle Group
                          ECOtality, Inc.
                          Efficient Drivetrains, Inc.
                          Electric Vehicles International, LLC
                          Energy Independence Now
                          Environmental Defense Fund
                          Feather River Air Quality Management District
                          Greater Corona Hispanic Chamber of Commerce
                          Greenkraft, Inc.
                          Harvest Power California, LLC
                          Health Care Without Harm
                          Honda North America, Inc.
                          Hyandai Motor America
                          Hydrogenics Corporation









                                                                  AB 8
                                                                 Page 17

                          Kern County Taxpayers Association
                          Kings Canyon Unified School District
                          Los Angeles Area Chamber of Commerce
                          Los Angeles County Economic Development  
                     Corporation
                          Los Angeles County Medical Association
                          Los Angeles County Metropolitan Transportation  
                     Authority
                          Metropolitan Transportation Commission
                          Mission Motor Company
                          Moreno Valley Black Chamber of Commerce
                          Motiv Power Systems, Inc.
                          Move LA
                          Murrieta Valley Unified School District
                          Napa Valley Unified School District
                          Natural Resources Defense Council
                          Navistar, Inc.
                          Nisei Farmers League
                          Northern Sonoma County Air Pollution Control  
                     District
                          Odyne Systems, LLC
                          Otto Construction
                          Pacific Ethanol
                          Physicians for Social Responsibility, Sacramento  
                     Chapter
                          Physicians for Social Responsibility, SF-Bay Area  
                     Chapter
                          Propel Fuels
                          Proterra
                          Public Health Institute
                          Quallion
                          Quantum Technologies
                          Regional Asthma Management and Prevention
                          Sacramento Area Council of Governments
                          Sacramento Black Chamber of Commerce
                          Sacramento Metropolitan Air Quality Management  
                          District
                          Sacramento Municipal Utility District
                          San Diego Gas & Electric
                          San Diego Regional Asthma Coalition
                          San Diego Urban Economic Corporation
                          San Joaquin Valley Air Pollution Control District
                          Santa Clara Valley Transportation Authority









                                                                  AB 8
                                                                 Page 18

                          Sempra Energy 
                          Sierra Energy & Sierra Railroad
                          Simbol Materials
                          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  
                          (Metrolink)
                          Synergex
                          Technology Partners
                          Tesla Motors
                          The Grant Farm
                          Total Transportation Services, Inc. 
                          TransPower
                          UPS
                          US Hybrid Corporation
                          Ventura County Air Pollution Control Board
                          Vision Industries Corporation
                          Volvo Group North America
                          Waste Management
                          Western Agricultural Processors Association
                          Western Growers Association
                          Western Propane Gas Association
                          Western States Petroleum Association
                          Workplace Wellness LA
                          Yolo-Solano Air Quality Management District
                          Zero Motorcycles, Inc.
                          9 Individual medical professionals

            OPPOSITION  :     Automobile Club of Southern California
                          Howard Jarvis Taxpayers Association
                          Sierra Club California