BILL ANALYSIS Ó
SB 1204
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Date of Hearing: June 16, 2014
ASSEMBLY COMMITTEE ON TRANSPORTATION
Bonnie Lowenthal, Chair
SB 1204 (Lara) - As Amended: June 18, 2014
SENATE VOTE : 26-10
SUBJECT : Clean Truck, Bus, and Off-Road Vehicle and Equipment
Technology Program
SUMMARY : Creates a new program to be administered by the
California Air Resources Board (ARB) and funded with cap and
trade revenues to develop zero- and near-zero emission truck,
bus, and off-road vehicle and equipment technologies and related
projects. Specifically, this bill :
1)Creates the California Clean Truck, Bus, and Off-Road Vehicle
and Equipment Technology Program (program) to be administered
by ARB in conjunction with the State Energy Resources
Conservation and Development Commission (CEC).
2)Provides that the program be funded from cap and trade auction
proceeds.
3)Provides that the program is to fund development,
demonstration, pre-commercial pilots, and early commercial
deployments of zero- and near-zero emission truck, bus, and
off-road vehicle and equipment technologies.
4)Requires that priority be given to projects in disadvantaged
communities.
5)Limits expenditure of program funds for projects that:
a) Develop a technology, demonstrate, and pilot commercial
deployment of zero- and near-zero emission medium- and
heavy-duty truck technology, including projects that
facilitate clean goods movement;
b) Develop zero- and near-zero emission bus technology,
demonstrate pre-commercial pilots, and provide early
commercial deployments, including pilots of multiple
vehicles at one site or region;
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c) Develop, demonstrate, pilot, and deploy zero- and
near-zero emission off-road vehicle and equipment in port,
agricultural, marine, construction, and rail sectors;
d) Develop purchase incentives, including point-of-sale
incentives, for commercially available zero- and near-zero
emission truck, bus, and off-road vehicle and equipment
technologies and fueling infrastructure to accelerate
market acceptance; and,
e) Develop non-vehicle based projects such as intelligent
transportation systems, autonomous vehicles, and other
freight information and operations technologies.
6)Requires that ARB, in consultation with CEC, develop guidance,
as specified, for the implementation of the Program consistent
with the AB 32, California Global Warming Solutions Act
(Nunez, Chapter 488, Statutes of 2006).
7)Provides that projects required pursuant to state or federal
law, rules, regulations, are not eligible for funding under
the program.
8)Requires ARB, in consultation with CEC, to create an annual
framework and plan that articulates the overarching vision for
the Program, outlines performance criteria, and describes
agency roles.
EXISTING LAW :
1) AB 32 required ARB to determine the 1990 statewide greenhouse
gas (GHG) emissions level and approve a statewide GHG
emissions limit that is equivalent to that level to be
achieved by 2020. Under AB 32, ARB is authorized to include
the use of market-based mechanisms to comply with these
regulations (such as cap and trade).
2) Requires the Department of Finance, in consultation with ARB
and any other relevant state agency, to develop a three-year
investment plan to guide allocations of cap and trade
revenues.
3) Requires the investment plan to allocate a minimum of 25% of
the available moneys in the fund to projects that provide
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benefits to disadvantaged communities, and a minimum of 10%
of the available moneys to projects located within
disadvantaged communities.
4) Requires moneys from cap and trade revenues to be used to
facilitate the achievement of GHG emissions reductions
consistent with AB 32.
5) Under the California Alternative and Renewable Fuel, Vehicle
Technology, Clean Air, and Carbon Reduction Act of 2007 (AB
118, Nunez, Chapter 750, Statutes of 2007), requires CEC to
implement the Alternative and Renewable Fuels and Vehicle
Technology Program (ARFVTP) to provide funding measures to
specified entities to develop and deploy technologies and
alternative and renewable fuels in the marketplace to help
attain the state's climate change policies.
6) Creates the Air Quality Improvement Program (AQIP),
administered by ARB and CEC in consultation with local air
districts, to fund air quality improvement projects.
7) Establishes certain vehicle and vessel related surcharges
and fees, until January 1, 2016, to fund the AQIP and
ARFVTP, among others.
8) Establishes the Carl Moyer Program, administered by ARB,
to fund the incremental cost of cleaner-than-required
vehicles, engines, and equipment and authorizes the funding
of projects reducing NOx, particulate matter (PM) and
reactive organic gases emissions under the Carl Moyer
Program until January 1, 2015, after which date, only the
reduction of NOx emission reduction projects will be
eligible for funding.
FISCAL EFFECT : According to the Senate Appropriations
Committee, the bill would incur costs of approximately $619,000
and 4 personnel years (PYs) in 2014-15, and ongoing costs of
$454,000 and 3 PYs to adopt the specified funding plan and
administer the components of that plan. Additional costs
include ongoing costs of approximately $165,000 and 1 PY
beginning in 2014-15 to develop and administer the new programs,
$344,000 and 2 PYs, beginning in 2016-17, to develop and
implement a certification program for truck and bus hybrid and
zero-emission vehicle retrofits and remanufactures and unknown
ongoing costs to fund additional program expenditures, likely in
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the millions to tens of millions annually.
COMMENTS : California has made great strides in its efforts to
curb GHG emissions and improve air quality and appears to be on
target to meet GHG emissions reduction goals set forth in AB 32.
However, a much more demanding target looms beyond the AB 32
horizon. Executive Order (EO) S-3-05, signed by Governor
Schwarzenegger in June of 2005 calls for California's GHG
emissions to be reduced by 80% below 1990 levels by 2050. ARB
indicates that much of the "low hanging fruit" has been
addressed when it comes to quickly and easily reducing emissions
to meet the 2020 goal and that more assertive measures need to
be taken if California is to achieve its 2050 emissions goal.
Given that cars and trucks are responsible for nearly 40% of
California's GHG emissions; it stands to reason that addressing
transportation sector emissions represents the logical next step
toward achieving the 2050 emissions reduction goal as outlined
in EO S-3-05.
To this end, California has worked diligently to address
transportation sector emissions across many platforms, but
particularly toward replacing existing fleets (light-duty
through heavy-duty) with zero- and near-zero emissions vehicles
and equipment. The light-duty fleet side has made much progress
and these clean cars are well on their way to becoming
mainstream choices for consumers. This progress was made
through technology programs and specific manufacturer and sales
requirements paired with incentive programs and infrastructure
development.
Unfortunately, turning over the fleet for medium- and heavy-duty
vehicles has not been on the same trajectory despite the fact
that these vehicles not only represent a significant source of
GHG emissions, they are powered by diesel engines which produce
fine particulate matter that leads to poor air quality and
severe health impacts--particularly in low-income and
disadvantaged communities that are often within close proximity
to heavily industrialized areas (such as the port) and along
major transportation corridors.
While programs at ARB and CEC address both light- and heavy-duty
vehicle sectors, there are some who believe that additional,
focused efforts are needed for the medium- and heavy-duty zero-
and near-zero-emission vehicles and equipment to improve market
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penetration and make the purchase and use of this technology a
viable, and affordable option for medium- and heavy -duty fleet
operators. Generally, the programs in place to address the
medium- and heavy-duty vehicle sector reside within ARBs and
CEC's AQIP and ARFVTP programs.
Air Quality Improvement Program (AQIP) : AB 118 established the
AQIP, administered by ARB in consultation with local air
districts. This program is funded through surcharges on vehicle
registration fees, a portion of vessel registration fees, a
portion of the smog abatement fee, and an increase in the fee
for identification plates for various types of vehicles such as
farm trailers and logging vehicles, operated on public roads.
This program provides competitive grants to fund projects to
improve the air quality impacts of alternative fuels and
vehicles, vessels, and equipment technologies. AQIP encompasses
several programs, including the Hybrid and Zero-Emission Truck
and Bus Voucher Incentive Project (HVIP). HVIP, which is
administered by ARB and its contractor, CALSTART, provides
vouchers to California fleet owners to help purchase hybrid and
zero-emission trucks and buses.
Alternative and Renewable Fuel and Vehicle Technology Program
(ARFVTP) : AB 118 also establishes the ARFVTP, administered by
the California Energy Commission (CEC). This program provides
funding for development and deployment of alternative and
renewable fuels and advanced transportation technologies to help
attain the state's climate change goals. Eligible projects
include, for example, development, improvement, and production
of alternative and renewable low-carbon fuels; improvement of
light-, medium-, and heavy-duty vehicle technologies; and
expansion of infrastructure connected with existing fleets,
public transit, and transportation corridors.
Although these programs have been somewhat successful in
developing and deploying zero and near-zero-emission medium- and
heavy-duty vehicles, the total number of these vehicles in use
in California remains very low. To achieve widespread
deployment, the authors believe that additional standards and
technology studies and development need to be performed. The
authors contend that additional funding is needed to fully
develop and test actual systems, with a focus on performance
improvements and cost reduction. They cite a need for early
demonstration projects to explore performance and integration
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challenges which need to be followed up with larger
pre-commercial demonstrations to evaluate real world
performance. Once these systems are developed and tested, the
authors note that targeted incentive programs must be created to
achieve full market penetration.
The authors point out that many of the efforts that are needed
to develop and deploy zero- and near-zero-emission medium and
heavy duty vehicles, are not fully addressed in AQIP and ARFVTP.
They note that while it may be possible to add these
requirements into AQIP and ARFVTP, they contend that greater
progress would likely be achieved by creating a single
overarching program that is singularly focused on developing and
deploying these vehicles. For example, the development of
studies and advanced research, including advanced technology
business case and feasibility studies to develop standards do
not fall neatly into AQIP or ARFVTP and the same is true for
development of pre-commercial commercial demonstration programs.
The authors note that some existing technological development
and deployment (incentives) programs can be tailored to address
medium- and heavy-duty transportation sector needs, but given
that much of the effort in these programs is currently going
toward light-duty clean cars, it is unclear whether or not
adding these programs into existing efforts would produce the
desired results.
This concern has led the authors to introduce this bill which
creates a separate and distinct program with the singular focus
of developing and deploying these technologies so that the goal
of fleet turnover can be achieved. The authors believe that by
combining all efforts for this transportation sector into one
program, along with increased investments, will ultimately
result in broad full-scale deployment of these clean vehicles,
particularly in disadvantaged communities.
Related legislation : SB 913 (DeSaulnier) would require ARB and
the Bureau of Automotive Repair to cooperate in issuing a
specified number of vouchers through EFMP and the Consumer
Assistance Program. That bill is scheduled to be heard in the
Assembly Transportation Committee on June 23, 2014.
SB 1275 (De León) would require ARB to expand EFMP to provide
for ridesharing and car-sharing vouchers and that ARB to adopt a
funding plan for projects under AQIP and establish programs to
increase benefits from electric transportation for disadvantaged
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and low- and moderate-income communities. That bill is
scheduled to be heard today in the Assembly Transportation
Committee.
Previous legislation : AB 8 (Perea), Chapter 401, Statutes of
2013, extended until January 1, 2024, extra fees on vehicle
registrations, boat registrations, and tire sales in order to
fund the AB, the Carl Moyer Program, 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 air emissions reduction
efforts.
SB 359 (Corbett) Chapter 415, Statutes of 2013, provided money
for ARB projects and programs aimed at encouraging deployment of
zero-emission and hybrid vehicles.
SB 535 (De Leon), Chapter 830, Statutes of 2012, required the
Department of Finance, when developing the three-year investment
plan for cap-and-trade monies, to allocate twenty-five percent
of the funds to projects that benefit disadvantaged communities,
and to allocate a minimum of ten percent of available cap and
trade revenues to projects located within disadvantaged
communities.
AB 1532 (J. Perez), Chapter 807, Statues of 2012, created the
Greenhouse Gas Reduction Fund Investment Plan and Communities
Revitalization Act to set procedures for the investment of
regulatory fee revenues derived from cap and trade revenues.
AB 118 (Nunez), Chapter 750, Statutes of 2007 established the
Air Quality Improvement Program (AQIP), administered by ARB in
consultation with local air districts, and funded through
surcharges on vehicle and vessel registration fees, smog
abatement fees, and identification plates fees.
AB 32 (Nunez), Chapter 488, Statutes of 2006 required the ARB to
develop a plan of how to reduce emissions to 1990 levels by the
year 2020 and also required ARB to ensure that, to the extent
feasible, GHGs reduction requirement and programs direct public
and private investment toward the most disadvantaged
communities.
REGISTERED SUPPORT / OPPOSITION :
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Support
American Lung Association
Breathe California
California Association of Port Authorities
California Bus Association
California Electric Transportation Coalition
California League of Conservation Voters
CALSTART
Center for Transportation and the Environment
City of Long Beach
City of Salinas
Coalition for Clean Air
Communities for a Better Environment
Environment California
Environmental Defense Fund
Greenlining Institute
Los Angeles County Metropolitan Transportation Authority
Natural Resources Defense Council
SMUD
Sierra Club
Union of Concerned Scientists
UPS
Opposition
California Chamber of Commerce
California League of Food Processors
California Manufacturers and Technology Association
Analysis Prepared by : Victoria Alvarez / TRANS. / (916) 319-
2093