BILL ANALYSIS Ó
AB 220
Page 1
Date of Hearing: April 15, 2013
ASSEMBLY COMMITTEE ON TRANSPORTATION
Bonnie Lowenthal, Chair
AB 220 (Ting) - As Amended: April 8, 2013
SUBJECT : Low-emission vehicles: incentives
SUMMARY : Provides a variety of incentives to encourage the
purchase and use of low-emission vehicles (LEVs) in California.
Specifically, this bill :
1)Exempts LEV purchases from state sales and use tax until
January 1, 2018.
2)Specifies that the sales and use tax exemption does not apply
to any tax levied by a county, city, or district.
3)Requires the Department of Motor Vehicles (DMV) to issue green
clean air vehicle high occupancy vehicle (HOV) lane access
decals to hybrid electric vehicles (HEVs) that have been
modified to become plug-in hybrid electric vehicles (PHEVs).
EXISTING LAW :
1)Establishes the Global Warming Solutions Act of 2006,
requiring the Air Resources Board (ARB) to establish a
statewide greenhouse gas (GHG) emissions limits and to reduce
GHS emissions to 1990 levels.
2)Requires retailers to collect state sales and use tax on
retail sales of tangible personal property.
3)Authorizes counties and cities to impose local sales and use
taxes on tangible personal property.
4)Grants the California Department of Transportation (Caltrans)
and local authorities, for highways under their respective
jurisdictions, general authority to permit exclusive or
preferential use of highway lanes for HOVs.
5)Allows, until January 1, 2015, qualifying clean alternative
fuel vehicles that display the appropriate clean air vehicle
decal to use HOV or high occupancy toll (HOT) lanes,
regardless of the number of occupants in the vehicle.
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6)Existing federal law requires states to file an annual report
on the impacts of single occupant vehicles on HOT and HOV
facilities.
7)Established new industry operating standards and technology
upgrades to the current biennial inspections of vehicle
emission control equipment and systems (smog check) program.
8)Requires the ARB to establish criteria for evaluation for
emission control devices that are submitted for testing.
9)Prohibits selling, installing, offering for sale, or
advertising any device, apparatus, or mechanism that alters or
modifies the original design or performance of a motor vehicle
pollution control device or system.
FISCAL EFFECT : Unknown
COMMENTS :
By introducing this bill, the author hopes to further
incentivize the sale and use of clean cars by allowing HEV
owners who convert their vehicle to PHEVs to qualify for single
occupancy vehicle access in HOV lanes under the ARB and the
DMV's green decal program (described in greater detail below).
Additionally, the author hopes to further incentive the purchase
of clean cars by waiving state sales tax, until January 1, 2018,
on the purchase of these vehicles. Because this bill has also
been referred to the Assembly Revenue and Taxation Committee,
the provisions related to sales tax exemptions will be addressed
by that policy committee.
HOV Clean Car Decal Programs
Beginning in 1999, the Legislature began to incentivize the
purchase of clean cars by allowing these vehicles to be operated
with only a single occupant in HOV lanes as long as the vehicle
is identified with an HOV access sticker issued by DMV.
According to ARB, this incentive has been an important tool in
promoting the early adoption of clean cars. There are currently
two valid sticker programs in use. Participation in these
programs is based on the vehicle's technology and ability to
meet the strict emissions standards set for each program. The
white sticker program includes super clean cars which meet the
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federal definition of Inherently Low Emission Vehicles (ILEVs).
These include primarily zero-emission vehicles (ZEVs,) as well
as certain dedicated compressed natural gas (CNG) vehicles.
Because only a small number of these vehicles have been
produced, there is no limit to the number of white stickers that
can be issued by DMV. The white sticker program is scheduled to
sunset on January 1, 2015.
The other HOV incentive program that is currently available is
the green sticker program. The green sticker program allows
40,000 green HOV access stickers to be issued by DMV for
enhanced Advanced Technology Zero-Emission Vehicles (AT PZEVs).
AT PZEVs have no evaporative emissions and generally include
PHEVs and hydrogen internal combustion engine vehicles. As with
all HOV access stickers, green stickers are issued on a first
come first served basis by DMV to qualifying vehicles. The
green sticker program is scheduled to sunset on January 1, 2015.
A third, but now expired, program that allowed single occupant
clean cars to use HOV lanes was the yellow sticker program.
This program allowed 85,000 single occupant HEV vehicles to
utilize HOV lanes. Since the program expired on July 1, 2011,
vehicles bearing yellow stickers are now required to use
regular, mixed flow lanes. It is expected that owners of HEVs
with expired yellow stickers would very likely be interested in
taking advantage of the incentive offered in this bill, which
would allow these HEVs to regain access to HOV lanes if the
vehicles are converted to PHEVs using a conversion kit.
In addition to allowing single occupant clean cars to access HOV
lanes, other programs have also been initiated to further
incentivize clean car purchase and use, particularly as it
relates to HOV lane use privileges. A recent example is AB 2405
(Blumenfield), Chapter 674, Statutes of 2012, which authorized
vehicles with white or green HOV stickers to utilize HOT lanes
without the requirement to pay the toll charges. The rationale
behind AB 2405 was not only to incentivize clean cars, but also
to continue to allow clean cars to use HOV lanes after they are
converted to HOT lanes, since, in the absence of AB 2405, clean
cars bearing HOV lane access stickers would be forced to pay the
tolls or move to mixed flow lane.
Each time the issue of single occupancy use of HOV lanes is
addressed by the Legislature, the question is raised as to
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whether or not the practice will degrade HOV lane performance
and, ultimately, reduce the incentive to rideshare--which, in
turn, would adversely affect air quality. For this reason,
federal law requires states who allow single occupant vehicles
to use HOV lanes (whether for a fee or to incentivize low
emission/energy efficient vehicles) to submit an annual report
describing how these activities have impacted the operation of
the HOV facility and to make a determination on whether or not
the HOV lane conditions are degraded. The most recent federal
transportation bill, Moving Ahead for Progress in the 21st
Century Act (MAP-21) further addressed this concern by requiring
states to bring degraded HOV systems into compliance with the
minimum average performance standards within 180 days, if the
lanes are being utilized as HOT lanes or if other single
occupancy use is allowed. MAP-21 further specifies that states
who fail to bring HOV facilities back into compliance within the
stipulated 180-day timeframe will be subject to program
sanctions.
In addition to concerns about lane degradation, opponents of AB
2405 also noted that allowing single occupant vehicles with
white or green decals to use HOT lanes without requiring them to
pay tolls would not only degrade HOT lane performance but it
would also would adversely impact revenues collected by the
jurisdictions that operate the HOT lanes. While it is unclear
how many vehicles this bill might add to HOV lanes, it stands to
reason that any increase, however small, would add to HOV and
HOT lane degradation, the result of which could be the
suspension of HOV lane access for all clean cars.
HEV to PHEV Conversion Kits
HEVs, first made by Toyota, Honda, and others, make use of an
electric engine placed next to the gas engine. The electric
motor creates fuel economy by taking over during idling and to
maintain speed after the gas engine is employed for
acceleration. These early generation HEVs do not need to be
plugged in because the on-board electric battery is constantly
being charged by the motion of the wheels and brakes.
PHEVs, as the name implies, took HEV technology a step further
by adding the ability to charge the battery (that runs the
engine) from a standard household outlet. Since the battery can
be charged independently, the gasoline engine is relegated to a
back-up status while the electric motor does most of the work,
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thus creating greater fuel efficiency and fewer emissions.
Once the value of PHEVs was realized, there became a market for
converting HEVs to PHEVs using kits that add a range-extending
battery pack and wiring necessary to plug the battery pack into
an outlet. It is important to note, however, that while a
number of companies currently sell these conversion kits (mostly
online), ARB has not fully certified any HEV to PHEV conversion
kit to date. The ARB notes that a tiered system is currently in
place that allows for testing and approval of conversion kits,
however, only two manufacturers have initiated the certification
process and, of these two companies, only one has received
authorization for very limited sale and distribution of their
product.
Anti-Tampering Laws
To ensure that vehicles continue to meet applicable emission
standards, California has enacted strong anti-tampering laws
that prohibit modifications of engines and emissions systems,
unless the modification is certified by the ARB. This
requirement helps to ensure that emissions standards are met.
Given that, to date, only one HEV to PHEV conversion kit has
been granted limited authority to market and sell their
conversion kit, it stands to reason that the numerous kits
available for sale on the internet are not ARB certified and
that the installation of these kits on HEVs would be in
violation of anti-tampering laws.
In reviewing and testing HEV to PHEV conversion kits, the ARB
found that these kits frequently result in increased, rather
than decreased, vehicle emissions over the life of the vehicle.
It is also important to note that once these kits are installed,
the original vehicle's warranty is voided, which is concerning
since research shows that most vehicle owners will not perform
emission system repairs unless the vehicle is under warranty or
unless they are required to do so to comply with smog check
program requirements. Since HEVs are currently not subject to
the smog check program, voiding the vehicle's emission system
warranty could result in converted PHEVs becoming high polluting
vehicles rather than low emission clean cars.
Smog Check Requirements
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HEVs are currently exempt from biennial and change-of-ownership
smog check inspections because the emissions performance of HEVs
cannot be appropriately determined using current tailpipe
emissions testing. When new on-board diagnostic testing
procedures are initiated later this year, as required by AB 2289
(Eng), Chapter 258, Statutes of 2010, HEVs and PHEVs will begin
undergoing regular smog check inspections. Because HEV to PHEV
conversion kits are not fully certified by the ARB, it is
unclear whether or not cars that have these conversion kits
installed on them will be able to be integrated into new smog
check testing procedures.
Writing in support of this bill, CALSTART and Sacramento
Electric Vehicle Coalition note that the bill would provide
important incentives for clean, advanced-technology vehicles and
that deployment of more of these clean air vehicles is needed to
help California meet its clean air goals. Speaking specifically
to the HOV lane incentive portion of the bill, Plug In America
suggests that this bill should be expanded to full electric
vehicle conversions since the ability to use HOV lanes is a
significant incentive for consumers and would accelerate market
acceptance of plug-in vehicles.
Committee Concerns
While it is a laudable that the author wishes further
incentivize clean cars so that greater air quality benefits can
be realized, this bill fails to take into account a number of
factors. First, the bill fails to account for the fact that
these conversions are largely untested and that ARB has yet to
certify their widespread use, primarily because early test
results show that these systems can result increased, rather
than decreased, emissions. Additionally, the bill does not
address whether or not the converted vehicles meet AT PZEV
emissions standards that are a prerequisite for a vehicle to
qualify for the green sticker program. Also, until the ARB is
able to test and fully certify conversion kits, it is unclear
whether or not the Bureau of Automotive Repair will be able to
successfully integrate these converted vehicles into the Smog
Check testing program. Based on these important factors,
legislation incentivizing the installation of HEV to PHEV
conversion kits appears to be premature.
Related legislation : AB 266 (Blumenfield) extends the white and
green sticker programs until 2025. That bill is scheduled to be
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heard in the Assembly Transportation Committee.
SB 286 (Yee) would extend the "green sticker" and "white
sticker" Clean Air Vehicle programs, which allow certain
low-emission vehicles to access HOV lanes with a single
occupant, from January 1, 2015 to January 1, 2018. That bill is
scheduled to be heard in the Senate Appropriations Committee.
Previous legislation : AB 2289 (Eng) Chapter 258, Statutes of
2010 established new industry operating standards and technology
upgrades to the current biennial inspections of vehicle emission
control equipment and systems (SmogCheck) program.
AB 2405 (Blumenfield) Chapter 674, Statutes of 2012, exempts
qualifying clean alternative fuel vehicles from toll charges
imposed on single-occupant vehicles in high-occupancy toll (HOT)
lanes, unless prohibited by federal law.
AB 2583 (Blumenfield) Chapter 676, Statutes of 2012 requires the
Department of General Services (DGS) and Caltrans to develop and
implement advanced technology vehicle parking incentive programs
in specified DGS- and Caltrans-operated parking facilities to
incentivize the purchase and use of alternative fuel vehicles
(AFV) in the state.
AB 1608 (Wieckowski) of 2012 would have incentivized the
purchase of ZEVs manufactured in California by increasing buyer
rebates by 20% over rebates for similar vehicles manufactured
outside of California. The bill died in the Assembly
Transportation Committee.
AB 1500 (Lieu) Chapter 1500, Statutes of 2010, extended HOV lane
privileges natural gas and electric vehicles for five years,
until January 1, 2015.
AB 2600 (Karnette) Chapter 614, Statutes of 2006, allowed an
additional 10,000 high-mileage hybrid vehicles to obtain
stickers allowing them to drive in HOV lanes regardless of the
number of occupants; extends the sunset date on the
authorization for these and other "Clean Air" vehicles to
operate in HOV lanes.
AB 2628 (Pavley) Chapter 725 Statutes of 2004, allowed AT PZEVs
to use HOV lanes.
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Double referral : This bill has also been referred to the
Assembly Revenue and Taxation Committee.
REGISTERED SUPPORT / OPPOSITION :
Support
CALSTART
California Natural Gas Vehicle Coalition
Sacramento Electric Vehicle Association
Plug-in America
Opposition
None on file
Analysis Prepared by : Victoria Alvarez / TRANS. / (916) 319-
2093