BILL ANALYSIS Ó
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UNFINISHED BUSINESS
Bill No: SB 359
Author: Corbett (D)
Amended: 9/6/13
Vote: 21
PRIOR VOTES NOT RELEVANT
ASSEMBLY FLOOR : Not available
SUBJECT : Electric vehicles
SOURCE : Author
DIGEST : This bill provides money for Air Resources Board
(ARB) projects and programs aimed at encouraging the deployment
of zero-emission and hybrid vehicles.
Assembly Amendments delete the Senate version of the bill, and
instead add the current language.
ANALYSIS :
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
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alternative fuels and vehicles, vessels, and equipment
technologies.
2. Establishes the Vehicle Inspection and Repair Fund (VIR
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 Enhanced Fleet Modernization Program
(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 (HDVAQLP) to help
fleet owners comply with on-road heavy-duty vehicle
regulations.
This bill:
1. Requires the State Controller to loan $40 million from the
VIR 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).
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C. $10 million to ARB for the HDVAQLP.
1. Requires, by June 30, 2016, $30 million of the loan to be
repaid to the VIR Fund from a non-General Fund source, upon
appropriation by the Legislature with interest at the rate
earned by the Pooled Money 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
BAR for the EFMP.
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 loans $30 million
to AQIP for use on both CVRP ($20 million) and HVIP ($10
million). The money would be loaned from the VIR 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 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
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consumer rebates to partially offset the higher initial cost of
advanced technologies.
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."
HDVAQLP . 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.
Prior/Related Legislation
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AB 8 (Perea) extends until January 1, 2024, extra charges on
vehicle registrations, boat registrations, and tire sales in
order to fund the AB 118 and Carl Moyer programs, including
AQIP. The bill 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.
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 AQIP.
FISCAL EFFECT : Appropriation: Yes Fiscal Com.: Yes
Local: No
According to Assembly Appropriations Committee:
1. This bill provides a one-time loan of $40 million from the
VIR 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
BAR from existing unallocated resources.
JA:k 9/12/13 Senate Floor Analyses
SUPPORT/OPPOSITION: NONE RECEIVED
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