BILL ANALYSIS Ó
SENATE TRANSPORTATION & HOUSING COMMITTEE BILL NO: SB 1275
SENATOR MARK DESAULNIER, CHAIRMAN AUTHOR: De LeÓn
VERSION: 2/21/14
Analysis by: Erin Riches FISCAL: yes
Hearing date: April 1, 2014
SUBJECT:
Vehicle emissions reductions: Enhanced Fleet Modernization
Program (EFMP) and Air Quality Improvement Program (AQIP)
DESCRIPTION:
This bill requires the state Air Resources Board (ARB) to expand
EFMP to provide for ridesharing and car-sharing vouchers as an
alternative to vehicle replacement vouchers. It also requires
ARB to adopt a funding plan for projects under AQIP, adopt
specified revisions to AQIP, and establish programs to increase
access to and direct benefits for disadvantaged and low- and
moderate-income communities from electric transportation.
ANALYSIS:
AB 118 (Núñez, Chapter 750, Statutes of 2007) establishes EFMP,
AQIP, and the Alternative and Renewable Fuel and Vehicle
Technology Program (ARFVTP). These programs are funded through
surcharges on vehicle registration fees, a portion of vessel
registration fees, a portion of the Smog Abatement Fee (paid to
register vehicles less than six model years old and therefore
exempt from smog check), 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.
Enhanced Fleet Modernization Program (EFMP)
EFMP provides for the voluntary retirement of passenger vehicles
and light- and medium-duty trucks that are high polluters. A
vehicle need not have failed a smog test to qualify for EFMP,
but it must meet ARB's definition of high-polluting. The
vehicle must be currently registered as operable and must have
been continuously registered for two years prior to the
application, unless the owner can provide specified information
SB 1275 (DE LEÓN) Page 2
to show the vehicle has been operated in the state during that
period. EFMP has a statewide component and a local component.
Under the statewide component, ARB administers a program, in
consultation with the Bureau of Automotive Repair, to retire
high-polluting vehicles. Under this program, EFMP offers a
$1,500 voucher to low-income vehicle owners (household income at
or below 225 percent of federal poverty level), or a $1,000
voucher to all other vehicle owners, to retire a high-polluting
vehicle. EFMP retired approximately 25,000 high-polluting
vehicles in 2012-13.
Under the local component, ARB administers a program, authorized
in the San Joaquin Valley Air Pollution Control District and the
South Coast Air Quality Management District, to replace
high-polluting vehicles. In addition to the retirement vouchers
described above, the local EFMP program offers:
A $2,500 voucher to low-income vehicle owners (household
income at or below 225 percent of federal poverty level) to
replace a high-polluting vehicle, by either purchasing a
vehicle eight years old or newer, or using the voucher toward
public transit.
A $2,000 voucher to all other vehicle owners to replace a
high-polluting vehicle by either purchasing a vehicle four
years old or newer, or using the voucher toward public
transit.
EFMP has issued less than two dozen replacement vouchers since
the program's inception in 2010, all in the South Coast Air
Quality Management District.
Air Quality Improvement Program (AQIP)
ARB administers AQIP in consultation with local air districts.
AQIP 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:
The Clean Vehicle Rebate Program (CVRP), administered by ARB's
contractor, the California Center for Sustainable Energy,
provides rebates of up to $2,500 for purchasing or leasing a
new zero-emission vehicle (ZEV) or plug-in hybrid electric
vehicle.
The Hybrid and Zero-Emission Truck and Bus Voucher Incentive
SB 1275 (DE LEÓN) Page 3
Project (HVIP), administered by ARB and its contractor
CALSTART, provides vouchers to California fleet owners to help
purchase hybrid and zero-emission trucks and buses.
AB 118 Advanced Technology Demonstration Projects,
administered by ARB, provides grants to local air districts
and other public agencies to fund advanced-technology vehicle,
equipment, or emission-control projects that are not yet
commercialized.
The On-Road Heavy-Duty Vehicle Air Quality Loan Program (Truck
Loan Assistance Program), administered by ARB and the
California Pollution Control Financing Authority, provides
loans to fleets to help implement ARB emissions reduction
regulations related to trucks, buses, and heavy-duty
(tractor-trailer) vehicles.
Alternative and Renewable Fuel and Vehicle Technology Program
(ARFVTP)
ARFVTP, administered by the state Energy Commission, 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.
This bill requires ARB to expand EFMP to provide for ridesharing
and car-sharing vouchers as an alternative to vehicle
replacement vouchers.
This bill also establishes the Charge Ahead California
Initiative, to be administered by ARB in consultation with the
state Energy Commission, local air pollution control districts
and air quality management districts, and public stakeholders.
Pursuant to this initiative, this bill requires ARB to:
Adopt a nine-year funding plan, commencing in 2016-17, to fund
programs and projects including, but not limited to:
o CVRP;
o HVIP;
o AB 118 Advanced Technology Demonstration Projects;
SB 1275 (DE LEÓN) Page 4
o ZEV and near-ZEV fueling infrastructure projects
eligible under ARFVTP;
o Light-duty, medium-duty, and heavy-duty ZEV and near-ZEV
deployment projects eligible under ARFVTP;
o Medium-duty and heavy-duty ZEV and near-ZEV technology
demonstration projects eligible under ARFVTP;
o Pre-commercial demonstration projects of advanced
freight technology to move cargo in the state; and
o Programs adopted pursuant to this bill to benefit
disadvantaged communities.
Adopt revisions to CVRP criteria and guidelines, by June 30,
2015, to:
o Phase down rebate levels in multiyear increments based
on cumulative sales levels, as determined by ARB;
o Improve program effectiveness and ensure that the
program better serves low- and moderate-income individuals;
o Expand eligibility by enabling EFMP participants to
obtain CVRP rebates for new and used CVRP-eligible
vehicles; and
o Consider conversion to point-of-sale rebates or other
methods to increase participation rates.
Adopt revisions to HVIP criteria and guidelines, by June 30,
2015, to ensure program eligibility for a truck or bus
retrofitted or re-manufactured to be a ZEV or near-ZEV.
Establish programs to increase access to, and direct benefits
of, electric transportation for disadvantaged and low- and
moderate-income communities, including but not limited to:
o A loan or loss reserve credit enhancement program to increase
consumer access to financing and leasing
options for ZEVs and near-ZEVs.
o Car-sharing programs that serve disadvantaged communities and
incorporate ZEVs and near-ZEVs.
o Deployment of charging infrastructure in multi-unit dwellings
in disadvantaged communities.
COMMENTS:
1.Purpose . The author states that accelerating the deployment
of ZEVs and providing clean transportation choices are
essential to achieving California's healthy air standards and
greenhouse gas reduction targets and to reducing air pollution
SB 1275 (DE LEÓN) Page 5
in the state's most heavily impacted communities. In
addition, the use of electricity as a transportation fuel can
help keep money in the state, stimulating the economy and
insulating family budgets from gas price spikes, which hit
lower-income households especially hard. The author states
that money saved at the pump by charging up on electricity
stays in California, creating 16 times more jobs than money
spent on gasoline. Although California accounts for one-third
of the country's electric vehicle sales, transforming the
market to benefit all Californians will take a sustained,
long-term commitment to better serve the state's most polluted
communities.
2.EFMP regulations are a work in progress . SB 459 (Pavley) of
2013 (see "Previous legislation" below) requires ARB, in
consultation with the Bureau of Automotive Repair (BAR), to
update EFMP regulations by June 30, 2015. SB 459 requires
the guidelines to include a variety of new policies, including
allowing for retirement and replacement vouchers of larger
amounts, focusing the program more heavily on lower-income
owners, and streamlining program requirements to facilitate
participation. ARB has been soliciting stakeholder input as
it drafts the revised regulations. In March, ARB issued a
white paper describing the proposed revisions; ARB is
scheduled to vote on the final revised regulations in June.
3.AQIP also being revamped . AB 8 (Perea) of 2013 (see "Previous
legislation" below) requires ARB and the Energy Commission to
apply a benefit-cost score, as specified, when determining
projects that will be awarded funds under ARFVTP and AQIP. In
addition, board members directed ARB staff to develop a
long-term vision for AQIP. ARB staff have been conducting
public workshops and soliciting stakeholder input. ARB will
release draft recommendations to the public in May; ARB will
vote on the recommendations in June. The Energy Commission is
similarly revising the solicitation process under ARFVTP.
4.Nine years is a long time . This bill requires ARB to adopt a
nine-year funding plan for multiple programs. This appears to
imply that ARB must establish funding levels for all of these
programs for that period. Generally, these programs are
funded through annual appropriations in the state budget. In
addition, ARB generally evaluates these programs on an annual
basis to determine the best breakdown of project types to
fund; for example, perhaps incentives are no longer needed for
a technology that has become cheaper, or perhaps a new
SB 1275 (DE LEÓN) Page 6
technology has emerged that ARB would like to pursue. It may
be appropriate to clarify this provision to provide ARB
flexibility to annually adjust the plan.
5.Other issues to consider . As the bill moves forward, the
author may wish to consider addressing the following issues:
This bill includes specified ARFVTP-eligible projects in
ARB's nine-year funding plan. Since ARVFTP is administered
by the Energy Commission, it may not be appropriate for ARB
to include those projects in its plan.
This bill requires ARB to phase down CVRP rebate levels
in "multiyear increments." It may be appropriate to
provide ARB flexibility to adjust rebate levels more
frequently to respond to market forces and program funding
levels.
This bill requires ARB to establish programs to increase
access to and benefits of electric transportation for
disadvantaged and low- and moderate-income communities,
including deployment of charging infrastructure in
multi-unit dwellings in disadvantaged communities. It may
be appropriate to require ARB to consult with the state
Energy Commission in establishing such programs.
1.Double-referral . The Rules Committee has referred this bill
to both this committee and to the Rules Committee. Therefore,
if this bill passes this committee, it will be referred to the
Rules Committee.
RELATED LEGISLATION:
This committee will hear two related bills at today's hearing:
SB 913 (De Saulnier) requires ARB and the Bureau of
Automotive Repair to cooperate in issuing a specified
number of vouchers through EFMP and the Consumer Assistance
Program to retire high-polluting cars and a specified
number of vouchers through EFMP to replace high-polluting
cars.
SB 1204 (Lara) creates a Clean Truck, Bus, and Off-Road
Vehicle and Equipment Technology Program to fund
development, demonstration, pilot projects, and commercial
deployment of zero- and near-zero-emission trucks, buses,
SB 1275 (DE LEÓN) Page 7
and off-road vehicles and equipment technologies. The bill
provides that the program shall be funded from the
Greenhouse Gas Reduction Fund, and shall prioritize
projects located in disadvantaged communities.
PREVIOUS LEGISLATION:
SB 359 (Corbett), Chapter 415, Statutes of 2013,
provides $48 million in additional funding in the current
fiscal year to ARB to support CVRP, HVIP, the Truck Loan
Assistance Program, and EFMP.
SB 459 (Pavley), Chapter 437, Statutes of 2013, requires
ARB, in consultation with BAR, to update the EFMP
guidelines as specified by June 30, 2015.
AB 8 (Perea), Chapter 401, Statutes of 2013, extends
until January 1, 2024, extra fees on vehicle registrations,
boat registrations, and tire sales in order to fund EFMP,
AQIP, ARFVTP, and specified other ARB programs that support
the production, distribution, and sale of alternative fuels
and vehicle technologies, as well as air emissions
reduction efforts. It also suspends until 2024 ARB's
authority to require through regulation any fuel supplier
to provide hydrogen fueling stations and instead allocates
up to $220 million of these fee funds to construct and
operate retail hydrogen fueling stations. AB 8 also
extends the authority of local air districts to impose
vehicle registration surcharges in their areas to achieve
air emission reductions from vehicles and off-road engines.
POSITIONS: (Communicated to the committee before noon on
Wednesday, March 26,
2014.)
SUPPORT: American Lung Association of California
Asian Pacific Environmental Network
Breathe California
CalPIRG
CALSTART
Catholic Charities Diocese of Stockton
Communities for a Better Environment
Coalition for Clean Air
Environment California
Greenlining Institute
SB 1275 (DE LEÓN) Page 8
Natural Resources Defense Council
Physicians for Social Responsibility-Los Angeles
Sierra Club California
TransForm
OPPOSED: None received.