BILL ANALYSIS Ó
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THIRD READING
Bill No: AB 8
Author: Perea (D) and Skinner (R), et al.
Amended: 9/3/13 in Senate
Vote: 27 - Urgency
SENATE TRANSPORTATION & HOUSING COMMITTEE : 9-2, 8/20/13
AYES: DeSaulnier, Beall, Cannella, Galgiani, Hueso, Lara, Liu,
Pavley, Roth
NOES: Gaines, Wyland
SENATE ENVIRONMENTAL QUALITY COMMITTEE : 8-1, 8/21/13
AYES: Hill, Calderon, Corbett, Fuller, Hancock, Jackson, Leno,
Pavley
NOES: Gaines
SENATE APPROPRIATIONS COMMITTEE : 5-2, 8/30/13
AYES: De León, Hill, Lara, Padilla, Steinberg
NOES: Walters, Gaines
ASSEMBLY FLOOR : 54-20, 6/27/13 - See last page for vote
SUBJECT : Air quality, alternative fuels, and vehicle
technology funding programs and local air district
vehicle registration surcharges
SOURCE : American Lung Association
California Air Pollution Control Officers
Association
CALSTART
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DIGEST : This bill extends until January 1, 2024, extra fees
on vehicle registrations, boat registrations, and tire sales in
order to fund the AB 118 (Núñez, Chapter 750, Statutes of 2007),
the Carl Moyer Program, and AB 923 (Firebaugh, Chapter 707,
Statutes of 2004) Programs that support the production,
distribution, and sale of alternative fuels and vehicle
technologies, as well as air emissions reduction efforts;
suspends until 2024, the Air Resources Board's (ARB's) authority
to require through regulation any fuel supplier provide hydrogen
fueling stations and instead allocates up to $220 million of
these fee funds to construct and operate retail hydrogen fueling
stations; and extends the authority of local air districts to
impose vehicle registration surcharges in their areas to achieve
air emission reductions from vehicles and off-road engines.
ANALYSIS : Clean Fuels Outlet (CFO) . ARB adopted its CFO
regulation to provide fueling stations 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, however, ARB considered and passed amendments
to the regulation to require major refiners and importers of
gasoline to provide hydrogen fueling stations when the number of
vehicles using hydrogen fuel reaches 10,000 within an air basin
or 20,000 statewide with specified adjustments. Refiners and
importers of gasoline would provide these hydrogen fueling
stations in proportion to their market share.
ARB filed the CFO regulation with the Office of Administrative
Law as required by state law, but then in December withdrew it
in order to pursue this legislation to dedicate public funds to
building a hydrogen fueling network, which would effectively
achieve the goal of the CFO regulation through public subsidy.
ARB is in the process of reintroducing the CFO rulemaking
package as a contingency measure in case this legislation fails.
This bill eliminates, until 2024, ARB's authority to enforce any
element of its existing CFO regulation or any other regulation
that requires any supplier of gasoline to construct, operate, or
to fund the construction or operation of any publicly available
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hydrogen fueling station.
AB 118 Programs . AB 118 created three programs:
1.The Alternative and Renewable Fuel and Vehicle Technology
Program, which the California Energy Commission (CEC)
administers to provide grants, revolving loans, loan
guarantees, loans, or other appropriate funding measures to
public agencies, vehicle consortia, businesses, consumers,
recreational boaters, and academic institutions to develop and
deploy innovative technologies that transform California fuel
and vehicle types to help attain the state's climate change
policies.
2.The Air Quality Improvement Program, which the ARB administers
in consultation with local air districts to provide
competitive grants to fund projects to reduce criteria air
pollutants, improve air quality, and support research to
improve the air quality impacts of alternative fuels and
vehicles, vessels, and equipment technologies.
3.The Enhanced Fleet Modernization Program, under which ARB, in
consultation with the Bureau of Automotive Repair, provides
for the voluntary retirement of passenger vehicles and light
and medium duty trucks that are high polluters.
AB 118 provides, upon appropriation by the Legislature,
approximately $180 million annually until 2016 for these
Programs. These funds come from additional fees on vehicle
registrations and vessel registrations. In addition, the CEC
received $10 million annually from the Public Interest Research,
Development, and Demonstration Fund, when that fund existed. It
was derived from a portion of electric utility rates to fund
research. Specifically, AB 118 raised the following fees on
vehicle and vessel registrations from July 1, 2008, until
January 1, 2016:
1.A $3 increase in the annual vehicle registration fee.
2.An $8 increase in the Smog Abatement Fee, paid to register
vehicles that are less than six model years old and therefore
exempt from smog check.
3.A $10 or $20 increase of the fee to originally register a
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vessel in California. If a boat owner originally registers a
boat in an odd-numbered year, the increase is $10 ($10 to
$20); but if the boat owner originally registers it in an
even-numbered year, then the increase is $20 ($20 to $40).
4.A $5 increase of the fee for identification plates for
construction equipment, farm trailers, cotton trailers,
logging vehicles, and cemetery equipment. These plates are
required to operate the vehicles on public roads.
This bill:
1.Extends for eight additional years the fees on vehicles and
vessels that AB 118 imposed so that they continue until
January 1, 2024.
2.Limits consumer incentives that ARB or CEC provide from AB 118
funds to subsidize the purchase of vehicles to no greater
amount than the compensation a vehicle owner receives to
retire a vehicle through the Enhanced Fleet Modernization
Program (typically $1,500).
3.Requires the CEC to allocate $20 million annually until 2024
to fund at least 100 publicly available hydrogen fueling
stations through its AB 118 Program. In order for CEC to fund
specific stations, each year ARB must aggregate information it
receives on the number of hydrogen-fueled vehicles that
manufacturers project to sell or lease over the next three
years, plus the number of hydrogen-fueled vehicles already
registered. Based on this information, ARB will evaluate the
need for, good locations for, and operating standards required
of hydrogen fueling stations and report its findings to the
CEC.
4.Permits CEC, after consulting with ARB, to allocate money away
from hydrogen fueling stations, if all $20 million in a year
is not needed to meet the need identified by ARB. CEC may
then allocate remaining funds to other projects within the
Alternative and Renewable Fuel and Vehicle Technology Program.
5.Permits the CEC, after consulting with ARB, to cease to
provide subsidies to hydrogen fueling stations only if the
private sector is establishing stations without the need for
public subsidy.
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6.Gives the CEC four years to encumber the $20 million annual
appropriation that the bill allocates for hydrogen fueling
stations and four more years to expend the funds to build
hydrogen stations. (For example, if $20 million is
appropriated for hydrogen stations through this bill in 2023,
then the CEC has until 2027 to award those funds to projects
and until 2031 to expend the funds as the stations get built.)
7.Directs CEC and ARB jointly to review and report annually on
progress toward establishing a hydrogen fueling network
beginning on December 31, 2015.
8.Requires both ARB and CEC to apply a benefit-cost score when
deciding to which projects each will award AB 118 funds, as
follows:
A. For the Alternative and Renewable Fuel and Vehicle
Technology Program, the bill defines a benefit-cost score
as a project's expected or potential greenhouse gas
emissions reduction per dollar the CEC awards to a project.
The CEC shall rank projects proposed for funding awards
based on its solicitation criteria, but then shall give
additional preference to funding those projects with higher
benefit-cost scores. Thus, within an allocation, say for
hydrogen fueling stations, those projects seeking funds
that have greater reductions of greenhouse gas emissions
per dollar spent should receive AB 118 funding before those
with lower reductions.
B. For the Air Quality Improvement Program, the bill
defines benefit-cost score as the reasonably expected or
potential criteria pollutant emission reductions per dollar
ARB awards to a project and defines a project to be the
category investments that ARB identifies for funding. ARB
shall provide preference in awarding funding to those
projects with higher benefit-scores but allows ARB to
provide additional preference, as applicable, to projects
that:
(1) Reduce toxic air pollutants.
(2) Contribute to regional air quality.
(3) Promote alternative fuels and vehicle technologies.
(4) Achieve climate change benefits.
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(5) Support market transformation of California's
vehicle or equipment fleet.
(6) Leverage private capital.
Thus, ARB could apply the cost-benefit test to a category
of funding, and while it may not achieve the greatest
criteria pollutant reduction per dollar spent, still fund
it because ARB grants that category sufficient additional
preference. For example, ARB could award funds to rebates
for buyers of electric cars even though this category is
not the most effective at reducing criteria air pollutants,
because ARB gives the rebates sufficient additional
preference related to promoting alternative vehicle
technologies and supporting transformation of California's
vehicle fleet.
Carl Moyer Program . 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 emissions.
The Carl Moyer Program originally received General Fund
appropriations.
In 2004, AB 923 (Firebaugh, Chapter 707) expanded the Carl Moyer
Program to cover additional pollutants and engines and imposed a
75-cent per tire fee on tire sales to fund the Carl Moyer
Program. Its provisions will sunset on January 1, 2015.
This bill:
1.Extends the Carl Moyer Program, as amended by AB 923, until
January 1, 2024, including the 75-cent fee on tire sales to
fund the Program. (This bill also extends until 2024 a
25-cent tire fee that funds tire recycling programs.)
2.Requires ARB, no later than July 1, 2014, to convene, in
consultation with local air districts, a working group to
evaluate the policies and goals contained within the Carl
Moyer Program.
Air District Vehicle Registration Surcharge . Existing law
imposes a basic vehicle registration fee of $46, plus a $23
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surcharge for additional personnel for the California Highway
Patrol, and authorizes local agencies to impose separate vehicle
registration fee surcharges in their respective jurisdictions
for a variety of special programs. AB 923 specifically
authorizes, until January 1, 2015, local air districts in which
federal air quality standards are consistently not met (i.e.,
"nonattainment areas") to levy a surcharge of up to $6 on
registration fees of motor vehicles registered within that
district. Funds from this surcharge must be used to reduce air
pollution from motor vehicles.
Legislation prior to AB 923 authorized the first $4 of the $6
surcharge to pay for reducing air pollution from motor vehicles
and carrying out related planning, monitoring, enforcement, and
technical studies necessary to implement the California Clean
Air Act of 1988. AB 923 authorized the next $2 and directed the
resulting revenue to specific strategies to achieving emission
reductions from motor vehicles and off-road engines.
AB 923 sunsets on January 1, 2015, after which the maximum
surcharge that air districts can impose will return to $4 per
registered vehicle.
This bill extends until January 1, 2024, the time during which
an air district may impose a surcharge of $6, rather than $4.
Related Legislation
SB 11 (Pavley) is nearly identical to this bill. SB 11 passed
the Senate on 5/29/13 by a 32-5 vote with a commitment from the
author to make several amendments. She took those amendments
when the Senate Appropriations Committee considered the bill in
May.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
Annual revenues of $180 million (special fund) for various AB
118 programs until 2024, of which $20 million be directed for
the construction and operation of a hydrogen fueling network
in FY 13-14, FY 14-15, and FY 15-16 and up to $20 million in
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the remaining years.
Annual tire fee additional revenue of approximately $34
million (special fund) for the Carl Moyer Program beginning
January 1, 2015 through 2024.
Annual costs in the hundreds of thousands of dollars to the
ARB, CEC, and Bureau of Automotive Repair to continue to
administer various air quality and alternative fuel programs
and associated reporting requirements which will be fully
covered by the surcharge extensions.
SUPPORT : (Verified 9/1/13)
American Lung Association (co-source)
California Air Pollution Control Officers Association
(co-source)
CALSTART (co-source)
Achates Power
Aemetis
Air Resources Board
Alameda-Contra Costa Transit District
Alliance of Automobile Manufacturers
Altec Green Fleet
Associated General Contractors of America
Association of Global Automakers
Baker Commodities, Inc.
Bay Area Air Quality Management District
Bay Area Biosolids to Energy Coalition
Biodico Sustainable Biorefineries
Black Business Association
Butte County Air Quality Management District
California Association of Black Pastors
California Association of School Transportation Officials
California Association of Winegrape Growers
California Biodiesel Alliance
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
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California Grape & Tree Fruit League
California Hydrogen Business Council
California Independent Oil Marketers Association
California Industry Air Quality Coalition
California League of Conservation Voters
California Manufacturers & Technology Association
California Municipal Utilities Association
California Natural Gas Vehicle Coalition
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 Transit Association
California Trucking Association
Californians Against Waste
Caltrain
Capstone Turbine Corporation
Carson Black Chamber of Commerce
Caterpillar
Catholic Charities Diocese of Stockton
Center for Sustainable Energy
Chargepoint
Clean Power Campaign
Clean World
Coalition for Clean Air
Coalition of Energy Users
CODA Automotive
Community Action to Fight Asthma
Community Fuels
Construction Industry Air Quality Coalition
Contra Costa Council
Cool Planet Energy Systems
CR&R, Inc.
Crimson Renewable Energy, LP
Dow Kokam
Eaton
ECOtality
Efficient Drivetrains, Inc.
Electric Vehicles International, LLC
Electrification Leadership Council
Energy Independence Now
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Environmental Defense Fund
Feather River Air Quality Management District
Global Automakers Association
Greater Corona Hispanic Chamber of Commerce
Greencraft, Inc.
Harvest
Health Care without Harm
Honda North America, Inc.
Hydrogenics Corporation
Hyundai Motor America
Imperial Western Products
Kern County Taxpayers Association
Kings Canyon Unified Transportation
Los Angeles Area Chamber of Commerce
Los Angeles County Economic Development Corporation
Los Angeles County Medical Association
Los Angeles County Metropolitan Transportation Authority
Madera County Board of Supervisors
Metrolink
Metropolitan Transportation Commission
Mission Motors
Moreno Valley Black Chamber of Commerce
Motiv Power Systems, Inc.
Move LA
Murrieta Valley Unified School District
Napa Valley Unified School District Transportation Department
Natural Resources Defense Council
Navistar, Inc.
New Leaf Biofuel
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 -San Francisco Bay Area
Chapter
Promethean Biofuels
Propel Fuels
Proterra
Public Health Institute
Quallion, LLC
Quantum Technologies
Transpower
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Regional Asthma Management and Prevention
Renewable Energy Group, Inc.
Rexroth Bosch Group
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 Francisco County Transportation Authority
San Joaquin Valley Air Pollution Control District
Santa Clara Valley Transportation Authority
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
Total Transportation Services Incorporated
Tulare County Board of Supervisors
United Postal Service
U.S. Hybrid Corporation
Ventura County Air Pollution Control District
Vision Industry
Volvo
Vote for Environment
Waste Management
Western Agricultural Processors Association
Western Growers Association
Western Propane Gas Association
Western States Oil
Western States Petroleum Association
Worksite Wellness LA
Yokayo Biofuels
Yolo-Solano Air Quality Management District
Zero Motorcycles
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OPPOSITION : (Verified 9/1/13)
Automobile Club of Southern California
Howard Jarvis Taxpayers Association
Sierra Club California
ARGUMENTS IN SUPPORT : The author introduced this bill because
the San Joaquin Valley (Valley), which he represents, remains
one of the worst air quality regions in the nation with ozone
levels continuing to exceed federal standards and leading the
nation with the most days of polluted air. Proponents note that
the whole state suffers from some of the worst air quality in
the nation, with over 70% of California's air pollution coming
from cars, trucks, trains, and other mobile sources and with
over 90% of residents living in counties with unhealthy air
during some parts of the year. In 2010, California had all ten
of the most polluted counties in the nation and 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 Valley suffer
from high rates of asthma and other respiratory ailments.
Despite significant improvements in emission reductions and the
toughest air regulations, the author asserts that we cannot
improve air quality and public health and achieve our clean air
goals of a 90% reduction in emissions by the mid-2020s for the
Valley and the state without incentives and investments to
accelerate the transition to a cleaner transportation sector.
He introduced this bill to 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.
While California faces the challenge of meeting several state
and federal air quality and emission reduction mandates by the
mid-2020s, proponents point out that the state's three major
clean transportation Programs -- AB 118, the Carl Moyer Program,
and the AB 923 Program -- are set to expire or to lose their
current funding source in the next few years.
This bill seeks to extend California's clean air and clean
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vehicle incentive programs in order to meet clean air, public
health, climate, and economic development goals.
The author and supporters state that without extension of these
incentive Programs, it would be extremely difficult for
California to meet its clean air, clean vehicle, and emission
reduction goals.
ARGUMENTS IN OPPOSITION : The Sierra Club opposes the
provision of the bill abrogating ARB's CFO regulation and
eliminating ARB's authority to adopt a similar regulation until
2024. The Sierra Club asserts that if this provision remains in
the bill and becomes law, it will open the flood gates for
additional legislation overriding ARB's rulemaking authority,
and California will never meet its air pollution or greenhouse
gas reduction goals.
The Automobile Club of Southern California objects to fees and
taxes imposed on gasoline powered on-road vehicles being used to
pay for environmental mitigation stemming from off-road
equipment, heavy-duty vehicles, and school buses. The club
notes that this violates the "polluter pays" principle and that
it has consistently opposed similar proposals to impose fees on
passenger vehicles to fund cleanup programs for non-vehicular
and heavy duty diesel commercial vehicles.
The Howard Jarvis Taxpayers Association also opposes the bill's
extension of $2 billion tax extension through 2023 because it is
regressive and because with two million Californians out of
work, the Legislature should be cautious before passing more
taxes onto consumers.
ASSEMBLY FLOOR : 54-20, 6/27/13
AYES: Achadjian, Alejo, Atkins, Bloom, Blumenfield, Bocanegra,
Bonilla, Bonta, Bradford, Brown, Buchanan, Ian Calderon,
Campos, Chau, Chesbro, Cooley, Daly, Dickinson, Eggman, Fong,
Fox, Frazier, Garcia, Gatto, Gomez, Gonzalez, Gordon, Gray,
Hall, Holden, Jones-Sawyer, Levine, Lowenthal, Medina,
Mitchell, Mullin, Muratsuchi, Nazarian, Olsen, Pan, Perea, V.
Manuel Pérez, Quirk, Quirk-Silva, Rendon, Salas, Skinner,
Stone, Ting, Weber, Wieckowski, Williams, Yamada, John A.
Pérez
NOES: Allen, Ammiano, Chávez, Dahle, Donnelly, Beth Gaines,
Grove, Hagman, Harkey, Jones, Linder, Logue, Maienschein,
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Mansoor, Morrell, Nestande, Patterson, Wagner, Waldron, Wilk
NO VOTE RECORDED: Bigelow, Conway, Gorell, Roger Hernández,
Melendez, Vacancy
JA:ej 9/3/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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