BILL ANALYSIS Ó
SB 11
Page 1
SENATE THIRD READING
SB 11 (Pavley and Cannella)
As Amended September 6, 2013
2/3 vote. Urgency
SENATE VOTE :32-5
TRANSPORTATION 10-3 NATURAL RESOURCES 6-2
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|Ayes:|Lowenthal, Bloom, Bonta, |Ayes:|Chesbro, Garcia, |
| |Buchanan, Daly, Gordon, | |Muratsuchi, Skinner, |
| |Gatto, Holden, Nazarian, | |Stone, Williams |
| |Quirk-Silva | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Linder, Morrell, |Nays:|Grove, Patterson |
| |Patterson | | |
| | | | |
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APPROPRIATIONS 12-4
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|Ayes:|Gatto, Bocanegra, | | |
| |Bradford, | | |
| |Ian Calderon, Campos, | | |
| |Eggman, Gomez, Hall, | | |
| |Holden, Pan, Quirk, Weber | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Harkey, Donnelly, Linder, | | |
| |Wagner | | |
| | | | |
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SUMMARY : Extends for eight years (from 2016 until 2024) various
temporary, vehicle-related fees to fund vehicle-related air
quality, greenhouse gas (GHG) and related programs administered
by the California Energy Commission (CEC), the Air Resources
Board (ARB) and the Bureau of Automotive Repair (BAR).
Specifically, this bill :
1)Extends until January 1, 2024, the sunset dates of each of the
various fees and surcharges that support the California
Alternative and Renewable Fuel, Vehicle Technology, Clean Air,
and Carbon Reduction Act of 2007 (AB 118 (Núñez), Chapter 750,
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Statutes of 2007) as follows:
a) $3 increase of the annual vehicle registration fee - $2
for the Alternative and Renewable Fuel and Vehicle
Technology Program (ARFVTP) and $1 for the Enhanced Fleet
Modernization Program (EFMP).
b) $8 increase of the smog abatement fee, paid to register
vehicles that are less than six years old and therefore
exempt from smog check. The revenues are split equally
between ARFVTP and Air Quality Improvement Program (AQIP).
c) $5 increase of the fee for special identification plates
for construction equipment, farm trailers, cotton trailers,
logging vehicles, and cemetery equipment. The revenues are
split equally between ARFVTP and AQIP.
d) $10 or $20 (depending upon the even or odd year of
registration) increase of the vessel registration fee. The
revenues are split equally between ARFVTP and AQIP.
2)Revises the EFMP as follows:
a) Delays implementation of EFMP guidelines developed by
ARB in consultation with BAR until June 30, 2015.
b) Authorizes ARB to require a vehicle to undergo a smog
test to qualify for EFMP.
c) Establishes that $1,500 is the minimum replacement
compensation for low-income vehicle owners and the maximum
compensation for all other vehicle owners is $1,000 in
EFMP.
d) Authorizes ARB to limit EFMP eligibility based on income
to ensure that the program adequately serves persons of low
to moderate income.
e) Authorizes ARB to require that vehicles eligible for the
EFMP have sufficient remaining life, which may include:
i) Proof of current registration;
ii) Passing a recent smog check inspection; or,
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iii) Passing another test similar to a smog check
inspection.
f) Authorize ARB to include the following in EFMP
guidelines:
i) Increased emphasis on the replacement of high
polluting vehicles with cleaner vehicles or increase use
of public transit that results in increased use of the
vehicle replacement program;
ii) Increased emphasis on the reduction of greenhouse
gas emissions though increased vehicle efficiency or
transit use as a result of program; and,
iii) Increased partnerships and outreach with
community-based organizations.
3)Requires a benefit-cost score preference that reflects the
expected or potential greenhouse gas emission reduction per
dollar awarded by CEC for ARFVTP and the reasonably expected
or potential criteria pollutant emission reductions per dollar
awarded by ARB for AQIP.
4)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 fee and taxes to specified
transportation-related purposes.
5)Provides that the measure is contingent on enactment of AB 8
(Perea) of the current legislative session.
6)Provides that the measure is an urgency statute allowing the
bill to take effect immediately upon enactment.
EXISTING LAW :
1)AB 118 is funded through temporary increases in vehicle
registration fees ($3), smog abatement fees ($8), boat
registration fees ($10/20), and special identification plate
fees ($5). Collection of these fees is authorized until 2016.
AB 118 supports three major programs:
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a) ARFVTP, administered by CEC, provides grants and other
financial incentives to accelerate the development and
deployment of clean, efficient, low carbon alternative
fuels and technologies. ARFVTP is funded by $2 of the
vehicle registration fee and receives approximately $100
million per year total.
b) AQIP, administered by ARB in consultation with local air
districts, funds projects that reduce criteria air
pollutants, improve air quality, and provide research for
alternative fuels and vehicles, vessels, and equipment
technologies. AQIP is funded by smog abatement fees, boat
registration fees, and special identification plate fees
and receives between $30-36 million per year.
c) EFMP, under which ARB, in consultation with BAR, pays to
permanently remove cars and small trucks from operation
through voluntary retirement by their owners. EFMP is
funded by $1 of the vehicle registration fee and receives
approximately $30 million per year.
2)Requires ARB to adopt a statewide GHG emissions limit
equivalent to 1990 levels by 2020 and to adopt rules and
regulations to achieve maximum technologically feasible and
cost-effective GHG emission reductions (AB 32 (Núñez), Chapter
488, Statutes of 2006).
3)Requires ARB to adopt regulations to achieve the maximum
feasible and cost-effective reduction of GHG emissions from
motor vehicles (AB 1493 (Pavley), Chapter 200, Statutes of
2002).
FISCAL EFFECT : According to the Assembly Appropriations
Committee, increased annual revenues of $180 million (special
fund) for various AB 118 programs at CEC, ARB and BAR. Annual
costs in the hundreds of thousands of dollars to CEC, ARB and
BAR to administer the programs (special fund).
COMMENTS :
Background on AB 118, Moyer and related programs . In 2007, AB
118 established three new programs intended to promote vehicle
and fuel technology that reduces air pollution and GHG emissions
statewide. These programs are the Alternative and Renewable
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Fuel Vehicle Technology Program (ARFVTP), the Air Quality
Improvement Program (AQIP) and the Enhanced Fleet Modernization
Program (EFMP).
ARFVTP funds projects by various public and private groups that
"develop and deploy innovative technologies that transform
California's fuel and 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. AB 118 requires the
advisory committee to include representatives from state
agencies; fuel and vehicle technology consortia; labor,
environmental, and community-based justice and health
organizations; academic groups; consumer advocates; workforce
training groups; and private industry. Once an investment plan
is completed, CEC receives and solicits bids for projects,
awarding funds based on eligibility criteria.
Monies appropriated to the ARFVTP come from temporary increases
in smog abatement fees, vehicle registration fees, vessel
registration fees and certain other vehicle fees. 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 flagship
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 Legislature appropriates about $30-40 million annually to
AQIP. These funds are derived from fees on smog abatement,
vehicle registration, vessel registration and specialty
identification plates. Since 2009, ARB has spent approximately
$126 million on AQIP programs, with $49.7 million going to CVRP
and $64.4 million to hybrid and zero emission truck and bus
vouchers.
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The EFMP supplements BAR'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 (FY) 2011-12, approximately
$34 million of EFMP funds were expended for the retirement of
25,741 vehicles.
The give and take of AB 118 . Everyone benefits from clean air,
but some of the beneficiaries are more equal than others in the
programs funded by this bill, particularly the AB 118 programs.
The vast majority (over 90%) of funds for both the ARFVTP ($93
million in FY 2011-12) and AQIP ($31 million in FY 2011-12) come
from annual registration fees paid through Department of Motor
Vehicles (DMV) by vehicle owners. AB 118 applies a registration
fee increase of $3 for all vehicles, plus an $8 increase in the
smog abatement fee that applies to newer vehicles that are
exempt from smog check. Two dollars of the registration fee
goes to ARFVTP and $1 to EFMP. The $8 is split between ARFVTF
and AQIP. These fees are subject to Section 3 of Article XIX of
the California Constitution.
The registration fee increase is flat - that is it is collected
without regard to a vehicle's value. So a car valued at $500
pays the same as a car valued at $100,000. AB 118 was a
majority vote fee bill enacted prior to Proposition 26 (AB 118
passed the Senate with a bare majority 21 votes). This bill,
being a two-thirds vote, could scale the fee to make it roughly
proportional to vehicle value and give lower-income drivers a
break.
What does AB 118 fund? Listed below, for example, are the 10
largest ARFVTF awards, totaling $102 million (Overall, CEC has
made over 180 awards totaling $360 million):
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|Rank |Recipient | Project | Amount | Description |
| | | Type | | |
|-----+----------+----------+--------+----------------------------|
| 1 |CALSTART |Alternativ|$18 |Administrator of various |
| | |e Fuel |million |alternative fuel vehicle |
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| | |Vehicle | |programs and projects. |
| | |Developmen| | |
| | |t | | |
|-----+----------+----------+--------+----------------------------|
| 2 |Air |Hydrogen |$11.2 |Construct 6 new hydrogen |
| |Products |Fueling |million |fueling stations and 2 |
| | |Stations | |upgrade stations at core |
| | | | |early market fuel cell |
| | | | |vehicle sales regions in |
| | | | |Southern California. |
|-----+----------+----------+--------+----------------------------|
| 3 |High Mt |Biogas |$11.0 |Landfill gas to |
| |Fuels | |million |bio-liquified natural gas |
| |(Waste | | |project at Ventura County |
| |Mgmt and | | |Landfill. |
| |Linde) | | | |
|-----+----------+----------+--------+----------------------------|
| 4 |California|Technology|$10.3 |Provide employee training |
| | | Training |million |funds to California |
| |Employment| | |businesses with new |
| | Training | | |alternative fuel, fuel |
| |Panel | | |infrastructure or vehicle |
| | | | |products. |
|-----+----------+----------+--------+----------------------------|
| 5 |Propel |E85 |$10.1 |Construct and operate 101 |
| | |Retail |million |E85 retail ethanol stations |
| | |Stations | |throughout California. |
| | | | | |
|-----+----------+----------+--------+----------------------------|
| 6 |Tesla |Electric |$10.0 |Expand production capacity |
| |Motors |Car |million |for the Model X cross-over |
| | | | |electric SUV. |
| | | | | |
|-----+----------+----------+--------+----------------------------|
| 7 |San |Natural |$9.3 |Purchase 202 heavy-duty |
| |Bernardino|Gas |million |natural gas trucks and |
| | | | |construct 2 |
| |Associated| | |publicly-accessible |
| | | | |liquefied natural gas |
| |Government| | |fueling stations at the |
| |s | | |Ryder facilities in San |
| | | | |Bernardino and Orange |
| | | | |Counties. |
|-----+----------+----------+--------+----------------------------|
| 8 |ETEC/Nissa|Electric |$8.0 |Install 2,300 level 2 |
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| |n |Chargers |million |chargers and 30 DC fast |
| | | | |chargers in San Diego as |
| | | | |part of the Department of |
| | | | |Energy (DOE) EV Project. |
| | | | |Support deployment of 5,000 |
| | | | |EVs in San Diego region. |
|-----+----------+----------+--------+----------------------------|
| 9 |California|Training |$7.3 |Funding for EDD employee |
| | |and |million |and skills development |
| |Employment|Skills | |activities. Identify |
| | |Developmen| |regional needs for skills |
| |Developmen|t | |development and training to |
| |t | | |support advanced technology |
| |Department| | |fuel production, fueling |
| | | | |infrastructure and vehicle |
| |(EDD) | | |manufacture. |
|-----+----------+----------+--------+----------------------------|
| 10 |Quallion |Electric |$6.9 |Develop pilot scales, |
| | |Battery |million |automated manufacturing |
| | | | |line for lithium-ion |
| | | | |battery cells and battery |
| | | | |packs. |
| | | | | |
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CVRP offers rebates up to $2,500 for electric vehicles (EVs).
Listed below are rebates by vehicle type and model as of April
30, 2013, according to ARB:
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| Vehicle Type and Model | Number of | Total Dollars |
| | Rebates | Allocated |
|----------------------------+----------------+--------------------|
|Light-Duty Zero-Emission | 11,552 | $32,905,488 |
|Vehicle | | |
|----------------------------+----------------+--------------------|
|BMW 1 Series Active E | 70 | $52,500 |
|----------------------------+----------------+--------------------|
|CODA | 48 | $120,000 |
|----------------------------+----------------+--------------------|
|Ford Focus Electric | 426 | $1,065,000 |
|----------------------------+----------------+--------------------|
|Honda FCX-Clarity | 10 | $45,000 |
|----------------------------+----------------+--------------------|
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|Honda 2013 Fit EV | 72 | $180,000 |
|----------------------------+----------------+--------------------|
|Mercedes-Benz F-Cell | 3 | $7,500 |
|----------------------------+----------------+--------------------|
|Mitsubishi i-MiEV | 116 | $230,061 |
|----------------------------+----------------+--------------------|
|Nissan LEAF | 7,924 | $23,920,390 |
|----------------------------+----------------+--------------------|
|Smart ED | 338 | $663,000 |
|----------------------------+----------------+--------------------|
|Th!nk City 2011 | 49 | $116,037 |
|----------------------------+----------------+--------------------|
|Tesla Roadster | 156 | $660,000 |
|----------------------------+----------------+--------------------|
|Tesla Model S - 60 kWh | 411 | $1,027,500 |
|battery | | |
|----------------------------+----------------+--------------------|
|Tesla Model S - 85 Kwh | 1,713 | $4,282,500 |
|battery | | |
|----------------------------+----------------+--------------------|
|Toyota RAV4 EV | 215 | $534,000 |
|----------------------------+----------------+--------------------|
|Wheego LiFe | 1 | $2,000 |
|----------------------------+----------------+--------------------|
|Plug-In Hybrid Electric | 10,367 | $15,529,500 |
|Vehicle | | |
|----------------------------+----------------+--------------------|
|Chevy Volt Low Emission | 5,394 | $8,087,850 |
|package | | |
|----------------------------+----------------+--------------------|
|Ford CMAX Energi | 310 | $465,000 |
|----------------------------+----------------+--------------------|
|Ford Fusion Energi | 75 | $112,500 |
|----------------------------+----------------+--------------------|
|Honda Accord Plug-In | 15 | $22,500 |
|----------------------------+----------------+--------------------|
|Toyota Prius Plug-In Hybrid | 4,573 | $6,841,650 |
|----------------------------+----------------+--------------------|
|Zero Emission Motorcycle | 148 | $159,400 |
|----------------------------+----------------+--------------------|
|Brammo | 19 | $21,300 |
|----------------------------+----------------+--------------------|
|Vectrix | 5 | $6,900 |
|----------------------------+----------------+--------------------|
|Zero | 124 | $131,200 |
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|----------------------------+----------------+--------------------|
|Neighborhood Electric | 93 | $102,550 |
|Vehicles | | |
|----------------------------+----------------+--------------------|
|GEM | 57 | $56,950 |
|----------------------------+----------------+--------------------|
|Miles EV | 35 | $44,100 |
|----------------------------+----------------+--------------------|
|Vantage | 1 | $1,500 |
|----------------------------+----------------+--------------------|
|Commercial Zero Emission | 49 | $980,000 |
|Vehicles | | |
|----------------------------+----------------+--------------------|
|Navistar eStar 300 | 10 | $200,000 |
|----------------------------+----------------+--------------------|
|Smith Newton 1-9 | 39 | $780,000 |
|----------------------------+----------------+--------------------|
|Total | 22,209 |$49,676,938 |
| | | |
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The top EV by far is the Nissan Leaf, at 7,924 rebates as of
April 30. The current net price for the Leaf (after $7,500
federal tax credit and $2,500 CVRP rebate) can be as low as
$20,000. The number two EV is the Tesla Model S (2,124 rebates
as of April 30), with base prices ranging from $70,000 to over
$100,000. Survey data indicates that the typical CVRP recipient
earns over $150,000/year, drives 15-30 miles/day and owns at
least one other non-EV car. According to the DMV, the smog
abatement fee that funds CVRP is not collected from owners of
EVs.
AB 118 lacks adequate measurement and verification of GHG and
criteria pollutant benefits . Though AB 118 is not a regulatory
program, the bill was enacted to support development of vehicle
technologies that reduce GHG emissions, in furtherance of
achieving the state's climate change goals. However, AB 118's
funding programs, such as ARFVTP, lack the measurement and
verification of emissions benefits that would be expected of a
regulatory program. It is not clear from information supplied
by the CEC about ARFVTP awards whether the actual GHG emission
reductions of funded projects are ever accounted for, much less
factored into the initial decision to award funds.
Senate amendments to this bill establish a "benefit-cost score"
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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 means a project's reasonably expected or
potential criteria pollutant emission reductions achieved per
dollar awarded. For AQIP, "project" is defined as a category of
investments, apparently excluding individual incentive payments.
Both 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
benefit-cost score provisions will require an up-front estimate
of emission reductions for projects. However, the bill still
lacks a requirement to measure and report actual emission
reductions achieved at the individual project, investment
category, or overall program level.
Analysis Prepared by : Lawrence Lingbloom / NAT. RES. / (916)
319-2092
FN:
0002643