BILL ANALYSIS Ó
SB 359
Page 1
( Without Reference to File )
SENATE THIRD READING
SB 359 (Corbett)
As Amended September 12, 2013
Majority vote
SENATE VOTE :Vote not relevant
TRANSPORTATION 11-3 APPROPRIATIONS 15-1
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|Ayes:|Lowenthal, Linder, Bonta, |Ayes:|Gatto, Bigelow, |
| |Buchanan, Daly, Frazier, | |Bocanegra, Bradford, Ian |
| |Gatto, Holden, Nazarian, | |Calderon, Campos, Eggman, |
| |Quirk-Silva, Bloom | |Gomez, Hall, Holden, |
| | | |Linder, Pan, Quirk, |
| | | |Wagner, Weber |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Logue, Morrell, Patterson |Nays:|Donnelly |
| | | | |
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SUMMARY : Provides money for California Air Resources Board
(ARB) projects and programs aimed at encouraging the deployment
of zero-emission and hybrid vehicles. Specifically, this bill:
1)Requires the Controller to loan $40 million from the Vehicle
Inspection and Repair Fund to the Air Quality Improvement Fund
and allocate as follows:
a) $20 million to ARB for the Clean Vehicle Rebate Project
(CVRP).
b) $10 million to ARB for the Hybrid and Zero-Emission
Truck and Bus Incentive Project (HVIP).
c) $10 million to ARB for the Heavy Duty Vehicle Air
Quality Loan Program.
1)Requires, by June 30, 2016, $30 million of the loan to be
repaid to the Vehicle Inspection and Repair Fund from a
non-General Fund source, upon appropriation by the Legislature
with interest at the rate earned by the Pooled Money
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Investment Account. Requires the remaining $10 million of the
loan to be repaid by June 30, 2021, from the Air Pollution
Control fund in the same manner.
2)Appropriates $8 million from the Enhanced Fleet Modernization
Subaccount, High Polluter Repair Account to the Bureau of
Automotive Repair for the Enhanced Fleet Modernization Program
(EFMP).
EXISTING LAW :
1)Establishes, pursuant to AB 118 (Nunez), Chapter 750, Statutes
of 2007, various programs to help implement the state's
greenhouse gas emission reduction goals. Included in these
programs is the Air Quality Improvement Program (AQIP). The
purpose of AQIP is to fund projects that reduce criteria air
pollutants, improve air quality, and provide research for
alternative fuels and vehicles, vessels, and equipment
technologies.
2)Establishes the Vehicle Inspection and Repair Fund into which
revenues from the smog check certificate fee are deposited for
administration of the Smog Check Program within the Bureau of
Automotive Repair (BAR).
3)Provides, under the EFMP, a program for the voluntary
retirement of passenger vehicles and light and medium duty
trucks that are high polluters.
4)Requires EFMP to focus efforts where the greatest air quality
impact can be identified and to consider cost-effectiveness
and impacts on disadvantaged and low-income populations.
Under EFMP, eligible low-income vehicle owners can qualify for
a $2,500 voucher to be used toward the purchase of a newer
vehicle (up to eight years old).
5)Defines "low-income motor vehicle owner" as a person whose
income does not exceed 225% of the federal poverty level, as
published quarterly in the Federal Register by the United
States Department of Health and Human Services.
6)Authorizes the California Capital Access Program within the
State Treasurer's Office. Under this authority, ARB funds the
Heavy-Duty Vehicle Air Quality Loan Program to help fleet
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owners comply with on-road heavy-duty vehicle regulations.
FISCAL EFFECT : According to Assembly Appropriations Committee:
1)This bill provides a one-time loan of $40 million from the
Vehicle Inspection and Repair Fund to the Air Quality
Improvement Fund for specified expenditures.
2)This bill appropriates $8 million from the Enhanced Fleet
Modernization Subaccount, High Polluter Repair Account to the
Bureau of Automotive Repair from existing unallocated
resources.
COMMENTS : AQIP provides financial incentives for public and
private groups and individuals to adopt smog and diesel
particulate pollution-reducing technology that concurrently
reduces greenhouse gas emissions. Funding for AQIP comes
primarily from the smog abatement fee that is assessed annually
for a vehicle's first six registration years in lieu of
providing a biennial smog certification. Of the $20 that is
collected for each vehicle annually, $4 is allocated to ARB for
AQIP. Typically, the annual budget act allocates about $35
million to AQIP.
ARB just recently adopted its AQIP 2013-14 funding plan that
proposes to focus most of the AQIP funding on the two largest
project categories-CVRP and HVIP. This bill would loan $30
million to AQIP for use on both CVRP ($20 million) and HVIP ($10
million). The money would be loaned from the Vehicle Inspection
and Repair Fund. That fund pays for the administration of the
Smog Check Program within BAR. The fund currently has reserves
of about $62 million, which represents about a six-month reserve
for the program. According to the California Department of
Consumer Affairs, the loan is not expected to impact the BAR's
administration of the Smog Check Program.
CVRP : This project provides vehicle rebates on a first-come,
first-served basis to California residents, businesses,
non-profit organizations, and government entities that purchase
or lease a battery or fuel cell electric vehicle, or a plug-in
hybrid electric vehicle. The aim of this program is to get the
cleanest vehicles on the road in California by providing
consumer rebates to partially offset the higher initial cost of
advanced technologies.
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HVIP : HVIP provides vouchers to help California fleets purchase
hybrid and zero-emission trucks and buses. The project plays a
critical role in accelerating early market penetration of hybrid
technology with the goal of significant fleet penetration of
these vehicles into California by 2020.
Understandably, industry advocates for these two rebate programs
are nervous that CVRP and HVIP may run out of money before the
end of the fiscal year. They point to how the CVRP and HVIP
incentive programs have succeeded in reducing the up-front cost
of zero-emission vehicle technologies in the early stages of the
market, before economies of scale have been achieved. They also
point to experiences in other states where rebate programs were
suspended for lack of funds and resulted in pronounced market
impacts. Further, supporters argue that suspension of these
programs (for lack of funding), could "send a chill throughout
the market and create uncertainty as to whether California is
committed to zero-emission vehicle technologies."
Heavy-Duty Vehicle Air Quality Loan Program: ARB developed the
loan program, in partnership with the State Treasurer's Office,
to provide financial assistance to truckers affected by new
regulations aimed at reducing greenhouse gas emissions by
improving the fuel efficiency of heavy-duty tractors that pull
53-foot or longer box-type trailers. The regulation is expected
to reduce greenhouse gas emissions by approximately 0.7 million
metric tons of carbon dioxide-equivalents by 2020, statewide.
This bill provides $10 million for the loan guarantee program to
assist trucking firms that must comply with the new regulations
by January 1, 2014.
EFMP: The $8 million appropriation proposed in this bill will
help accelerate the rate of retirement for high-polluting
vehicles. This appropriation, coupled with program
modifications proposed in SB 459 (Pavley) (currently pending in
the Legislature) will help to make the current vehicle
retirement program more accessible, convenient, and financially
feasible for low-income vehicle owners.
Related legislation: AB 8 (Perea) would extend until January 1,
2024, extra charges on vehicle registrations, boat
registrations, and tire sales in order to fund the AB 118 and
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Carl Moyer programs, including AQIP. AB 8 passed the
Legislature and is on its way to the Governor's desk.
SB 459 (Pavley) directs ARB to take specific steps to improve
the EFMP. That bill is currently pending on the Assembly Floor.
Previous legislation: AB 118 (Núñez) 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 Enhanced Fleet Modernization Program and the
Air Quality Improvement Program.
Analysis Prepared by : Janet Dawson / TRANS. / (916) 319-2093
FN: 0002856