BILL ANALYSIS Ó
SB 11
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Date of Hearing: September 11, 2013
ASSEMBLY COMMITTEE ON TRANSPORTATION
Bonnie Lowenthal, Chair
SB 11 (Pavley) - As Proposed to be Amended: September 11, 2013
SENATE VOTE : 32-5
SUBJECT : Alternative fuel and vehicle technology programs:
funding.
SUMMARY : Extends, until January 1, 2024, extra fees on vehicle
registrations and boat registrations and tire sales in order to
fund the AB 118 (Núñez, Chapter 750, Statutes of 2007), the Carl
Moyer 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 emissions
reduction efforts. Suspends, until 2024, the Air Resources
Board's (ARB's) authority to require fuel suppliers to provide
hydrogen fueling stations and instead allocates up to $220
million to construct and operate retail hydrogen fueling
stations. Extends the authority of local air districts to
impose vehicle registration surcharges, in their respective
areas, to achieve air emission reductions from vehicles and
off-road engines. Specifically, this bill :
1)Extends, January 1, 2024, the fees on vehicles and vessels
imposed by AB 118.
2)Limits consumer incentives that ARB or the California Energy
Commission (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 CEC to allocate $20 million annually, until January
1, 2024, to fund at least 100 publicly-available hydrogen
fueling stations through its AB 118 Program.
4)Authorizes CEC, after consulting with ARB, to allocate money
away from hydrogen fueling stations and authorizes CEC to
allocate the funds to other projects within the Alternative
and Renewable Fuel and Vehicle Technology Program.
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5)Authorizes CEC, after consulting with ARB, to stop providing
subsidies to hydrogen fueling stations if the private sector
is establishing stations without the need for public subsidy.
6)Provides CEC four years to encumber the $20 million annual
appropriation allocated for hydrogen fueling stations and four
more years to expend the funds to build hydrogen stations.
7)Directs CEC and ARB to jointly to review and annually report
on progress toward establishing a hydrogen fueling network,
beginning on December 31, 2015.
8)Requires ARB and CEC to apply a benefit-cost score when
determining which projects will be awarded AB 118 funds.
9)Extends, until January 1, 202, the Carl Moyer Program, as
amended by AB 923, which includes a 75-cent fee on tire sales
to fund the program and a 25-cent tire fee to fund tire
recycling programs.
10)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.
11)Extends, until January 1, 2024, the time during which an air
district may impose a surcharge of $6, rather than $4 on
vehicle registration fees set forth pursuant to AB 923.
EXISTING LAW :
1)Establishes the California Alternative and Renewable Fuel,
Vehicle Technology, Clean Air, and Carbon Reduction Act of
2007 [AB 118 (Nunez), Chapter 750, Statutes of 2007] funded
through temporary increases in vehicle registration fees ($3),
smog abatement fees ($8), boat registration fees ($10/20), and
special identification plate fees ($5) until 2016.
2)Establishes the Carl Moyer Memorial Air Quality Standards
Attainment Program (Carl Moyer Program) [AB 1571
(Villaraigosa), Chapter 923, Statutes of 1999] funded by
vehicle registration surcharges adopted by local air districts
in federal nonattainment areas and administered by ARB and
local air districts, to fund the incremental cost of
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cleaner-than-required vehicles, engines, and equipment.
3)Expands the Carl Moyer Program [AB 923 (Firebaugh)], until
January 1, 2024, to cover additional pollutants and engines by
imposing a $1 fee on tire sales and establishing air quality
improvement programs through local air districts.
4)Requires ARB to adopt a statewide greenhouse gas (GHG)
emissions limits equivalent to 1990 levels by 2020 and to
adopt rules and regulations to achieve maximum technologically
feasible and cost-effective GHG emission reductions.
5)Requires ARB to adopt regulations that achieve the maximum
feasible and cost-effective reduction of GHG emissions from
motor vehicles [AB 1493 (Pavley), Chapter 200, Statutes of
2002].
6)Requires CEC and ARB to adopt a statewide plan to increase the
use of alternative transportation fuels, including setting
alternative fuel goals for 2012, 2017 and 2022 [AB 1007
(Pavley), Chapter 371, Statutes of 2005].
7)Establishes Clean Fuels Outlet (CFO) regulations in ARB that
require certain owners and lessors of retail gasoline stations
to equip stations with clean, alternative fuels.
FISCAL EFFECT : According to the Senate Appropriations
Committee:
1)Annual revenues for various AB 118 programs, until January 1,
2024, will be $180 million, of which $20 million would be
directed for the construction and operation of a hydrogen
fueling network in the first three years beginning in fiscal
year 2013-14 and up to $20 million in the remaining years.
2)Annual revenue for the Carl Moyer Program will be
approximately $34 million beginning January 1, 2015 and
continuing through January 1, 2024.
3)Annual costs to ARB, CEC, and Bureau of Automotive Repair
(BAR) will be in the hundreds of thousands of dollars to
continue administering various air quality and alternative
fuel programs and associated reporting requirements. These
costs will be fully covered by the surcharge extensions.
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COMMENTS : The proposed amendments will make SB 11 (Pavley)
identical to AB 8 (Perea) currently pending approval on the
Senate Floor. Specifically, as proposed to be amended, would
extend, until January 1, 2024, various fees on vehicle and boat
registrations and tire sales in order to fund various clean air
programs including the Clean Fuels Outlet (CFO) Program, AB 118
Programs, and the Carl Moyer Programs. Additionally, this bill
also allows local air districts, in federal non-attainment
areas, to levy additional vehicle registration surcharges to
fund vehicle air pollution abatement programs within the
specified air district.
Clean Fuels Outlet
ARB adopted its CFO regulation to provide fueling stations to
meet the needs of those driving clean, alternative fuel
vehicles. When ARB first began work on the regulation in 1990,
the plan was to use the program 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. Given that those vehicles were not forthcoming, ARB
passed amendments to the regulation in January 2012, requiring
major refiners and importers of gasoline to provide hydrogen
fueling stations when the number of hydrogen-fueled vehicles
reaches 10,000 within an air basin or 20,000 statewide, as
specified. The regulation required refiners and importers of
gasoline to provide these hydrogen fueling stations in
proportion to their market share.
ARB filed the CFO regulation with the Office of Administrative
Law but later withdrew the regulation in order to pursue
legislation (contained in this bill) to dedicate public funds to
building a hydrogen fueling network to effectively achieve the
goal of the CFO regulation through public subsidy. This bill
would eliminate, until January 1, 2024, ARB's authority to
enforce any element of its existing CFO regulation or any other
regulation that requires a supplier of gasoline to construct,
operate, or to fund the construction or operation of any
publicly-available hydrogen fueling station.
AB 118 Programs
AB 118 created three programs including the Alternative and
Renewable Fuel and Vehicle Technology Program, the Air Quality
Improvement Program (AQIP), and the Enhanced Fleet Modernization
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Program (EFMP).
The Alternative and Renewable Fuel and Vehicle Technology
Program, administered by CEC, provide grants, loans, loan
guarantees, and other appropriate funding measures to public
agencies, vehicle consortia, businesses, consumers, recreational
boaters, and academic institutions to develop and deploy
innovative technologies to transform California fuel and vehicle
types to help attain the state's climate change policies.
Alternatively, AQIP, administered by ARB in consultation with
local air districts, provides 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. EFMP, administered by ARB, in consultation with
the BAR, provides funds the voluntary retirement of high
polluting passenger vehicles and light and medium duty trucks.
AB 118 provides approximately $180 million annually for these
programs with the funds being derived from additional fees on
vehicle and boat registrations. Specifically the fees include a
$3 increase in the annual vehicle registration fee, 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), a $10 or $20 fee to originally register a vessel in
California, and a $5 increase of the fee for identification
plates for various types of vehicles such as farm trailers and
logging vehicles operated on public roads. The AB 118 program
is set to expire in 2016.
Carl Moyer Program
AB 1571 (Villaraigosa), Chapter 923, Statutes of 1999)
established the Carl Moyer Memorial Air Quality Standards
Attainment Program (Carl Moyer Program) administered by ARB,
provides grants to offset the incremental costs of purchasing or
retrofitting engines in to reduce specified air emissions. The
Carl Moyer Program originally received General Fund
appropriations however in 2004, AB 923 expanded the program to
cover additional pollutants and engines and imposed a 75-cent
per tire fee on tire sales to provide additional funding. The
Carl Moyer Program is set to sunset on January 1, 2015.
Air District Vehicle Registration Surcharge
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Existing law imposes a basic vehicle registration fee of $46,
plus a $23 surcharge for additional personnel to fund California
Highway Patrol programs and authorizes local agencies to impose
separate vehicle registration fee surcharges in their respective
jurisdictions to fund a variety of special programs. AB 923
specifically authorizes, until January 1, 2015, local air
districts in federal air quality non-attainment areas to levy a
surcharge of up to $6 on registration fees for motor vehicles
registered in 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, however, directed that the additional
$2 be used to for specific strategies to achieve emission
reductions from motor vehicles and off-road engines. AB 923
sunsets on January 1, 2015 at which time the maximum surcharge
that air districts can impose will return to $4 per registered
vehicle.
Related legislation : AB 8 (Perea) contains language that is
identical to SB 11 (Pavley). AB 8 is pending approval on the
Senate Floor.
SB 459 (Pavley) directs ARB to take specific steps to improve
the EFMP administered by ARB and the BAR. That bill is
scheduled to be heard in the Assembly Transportation Committee
today.
Previous legislation:
AB 118 (Nunez), Chapter 750, Statutes of 2007, enacted the
California Alternative and Renewable Fuel, Vehicle Technology,
Clean Air, and Carbon Reduction Act of 2007 and established the
EFMP and the AQIP.
AB 923 (Firebaugh), Chapter 707, Statutes of 2004, increases the
maximum vehicle registration surcharge in selected counties;
increase the per tire fee paid at the retail level.
AB 1493 (Pavley), Chapter 200, Statutes of 2002, required the
ARB to adopt regulations to reduce the emissions of greenhouse
gases by motor vehicles.
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AB 1571 (Villaraigosa), Chapter 923, Statutes of 1999, created
the Carl Moyer Memorial Air Standards Attainment Program for the
purpose of providing grants to offset the incremental costs of
projects to replace high-emission, heavy-duty diesel engines
with cleaner models in order to reduce oxides of nitrogen (NOx)
and other emissions.
REGISTERED SUPPORT / OPPOSITION :
Support
American Lung Association in California (Co-sponsor)
California Air Pollution Control Officers Association
(Co-sponsor)
CALSTART (Co-sponsor)
Agricultural Council of California
Alameda-Contra Costa Transit District
Alliance of Automobile Manufacturers
American Federation of State, County and Municipal Employees,
AFL-CIO
Associated General Contractors
Association of Global Automakers
Bay Area Air Quality Management District
Bioenergy Association of California
Breathe California
California Association of Winegrape Growers
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 Independent Oil Marketers Association
California Manufacturers & Technology Association
California Municipal Utilities Association
California Natural Gas Vehicle Coalition
California Public Health Association - North
California Refuse Recycling Council
California Rice Industry Association
California Service Station & Automotive Repair Association
California Thoracic Society
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California Transit Association
California Trucking Association
Capstone Turbine Corporation
Clean Power Campaign
Coalition for Clean Air
Construction Industry Air Quality Coalition
Contra Costa Council
CR & R
Environmental Defense Fund
Health Care Without Harm
Honda North America
Hyundai Motor America
Linde North America
Los Angeles County Medical Association
Metropolitan Transportation Commission
Move LA
Natural Resources Defense Council
Nisei Farmers League
Physicians for Social Responsibility, Sacramento Chapter
Physicians for Social Responsibility, San Francisco Bay Area
Chapter
Public Health Institute
Regional Asthma Management and Prevention
Sacramento Area Council of Governments
Sacramento Metropolitan Air Quality Management District
Sacramento Municipal Utility District
San Diego Gas & Electric Company
San Diego Regional Asthma Coalition
San Francisco County Transportation Authority
San Joaquin Valley Air Pollution Control District
Santa Clara Valley Transportation Authority
Sempra Energy utilities
South Coast Air Quality Management District
Southern California Gas Company
Southern California Regional Rail Authority (Metrolink)
United Parcel Service, West Region
Waste Management - Government Affairs/West
Western Agricultural Processors Association
Western Growers Association
Western States Petroleum Association
Workplace Wellness Los Angeles
(numerous medical professionals)
Opposition
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California Federation of Republican Women
CRM Company of Rancho Dominguez
Howard Jarvis Taxpayers Association
Sierra Club California, oppose unless amended
Analysis Prepared by : Victoria Alvarez / TRANS. / (916) 319-
2093