BILL ANALYSIS Ó
SB 1275
Page 1
Date of Hearing: June 16, 2014
ASSEMBLY COMMITTEE ON TRANSPORTATION
Bonnie Lowenthal, Chair
SB 1275 (De Leon) - As Amended: May 6, 2014
SENATE VOTE : 27-9
SUBJECT : Vehicles: emissions reductions programs
SUMMARY : Creates the Charge Ahead California Initiative (Charge
Ahead Initiative) to improve air quality and reduce greenhouse
gas (GHG) emissions by expanding certain existing California Air
Resources Board (ARB) programs and developing new programs aimed
at making clean air vehicles more accessible, particularly to
low- and moderate-income individuals. Specifically, this bill :
1)Makes findings and declarations regarding California's poor
air quality and the health risks it creates, particularly for
those in disadvantaged communities.
2)Sets forth the Charge Ahead Initiative, to be administered by
ARB in consultation with the State Energy Resources
Conservation and Development Commission (CEC).
3)Establishes the goal of placing one million zero-and
near-zero-emission vehicles into service in California by
January 1, 2023, by creating a self-sustaining industry for
clean air vehicles and making them more accessible,
particularly to low- and moderate-income individuals.
4)States the intent of the Legislature that the Charge Ahead
Initiative be consistent with California's GHG emission
reduction goals.
5)Requires ARB to expand the Enhanced Fleet Modernization
Program (EFMP) to provide public transportation and car
sharing vouchers as an alternative to vehicle replacement
vouchers.
6)Requires ARB to adopt a plan by June 30, 2015, that
anticipates the total funding needed for the following
programs and projects:
SB 1275
Page 2
a) Clean Vehicle Rebate Project (CVRP);
b) Hybrid and Zero-Emission Truck and Bus Voucher Incentive
Project (HVIP);
c) Advanced Technology Demonstration Projects established
by AB 118;
d) Zero-emission vehicle (ZEV) and near-ZEV fueling
infrastructure projects eligible under the Alternative and
Renewable Fuels and Vehicle Technology Program (ARFVTP);
e) Light-duty, medium-duty, and heavy-duty ZEV and near-ZEV
deployment projects eligible under ARFVTP;
f) Medium-duty and heavy-duty ZEV and near-ZEV technology
demonstration projects eligible under ARFVTP;
g) Pre-commercial demonstration projects of advanced
freight and transit technology to move cargo and passengers
in the state; and,
h) Programs adopted pursuant to this bill to benefit
disadvantaged communities.
7)Requires ARB, by June 30, 2015, to adopt revisions to CVRP
criteria to phase down rebate levels in multiyear increments
and expand rebate eligibility to low- and moderate-income
individuals.
8)Requires ARB to revise HVIP criteria and guidelines, by June
30, 2015, and to expand program eligibility to trucks and
buses that have been retrofitted or remanufactured to make
them zero-emission or near-zero-emission vehicles.
9)Requires ARB to establish electric transportation programs
that are accessible to and directly benefit disadvantaged and
low- and moderate-income communities, including, but not
limited to:
a) Loan or credit enhancement programs to increase access
to financing or lease options;
b) Car sharing programs that serve disadvantaged
communities and incorporate zero- and near-zero emissions
SB 1275
Page 3
vehicles;
c) Programs to deploy charging infrastructure in multiunit
dwellings in disadvantaged communities; and,
d) Programs to improve outreach to disadvantaged and low-
and moderate-income communities.
10)Defines a variety of terms including a "zero-emission
vehicle" as a light-duty, medium-duty, heavy-duty, or bus
battery electric vehicle or hydrogen fuel cell vehicle."
EXISTING LAW :
1)Establishes the EFMP, a vehicle retirement and replacement
program authorized by AB 118 (Nunez, Chapter 750, Statutes of
2007) funded by a $1 surcharge on motor vehicle registration.
2)Requires that ARB update the EFMP guidelines by June 30, 2015,
to ensure that the program, among other things, provide that
compensation for vehicle retirement or replacement may be
increased for low-income motor vehicle owners to maximize
emissions benefits, as needed; and that program eligibility
can be limited on the basis of income to ensure the program
adequately serves low- and moderate-income populations.
3)Establishes the AQUIP. set forth by AB 118 and administered by
ARB, as a voluntary incentive program to fund clean vehicle
and equipment projects, research on biofuels production, and
the air quality impacts of alternative fuels, and workforce
training.
4)Establishes CVRP, within AQIP, to promote the production and
use of zero- and near-zero-emission vehicles.
5)Establishes the HVIP to provide vouchers to help California
fleets to purchase hybrid and zero-emission trucks and buses.
6)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
SB 1275
Page 4
regulations (such as cap and trade).
FISCAL EFFECT : According to the Senate Appropriations Committee
this bill would result in the following costs to ARB:
1) 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.
2) Ongoing costs of approximately $165,000 and 1 PY beginning
in 2014-15 to develop and administer each of the following
new programs specified in the bill: a loan-loss credit
enhancement program, a car sharing program in disadvantaged
communities, and deployment of a charging infrastructure
program. Actual costs and staffing needs would depend upon
the amount of funding dedicated to the specified programs.
3) Annual costs of $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.
4) Unknown ongoing costs to fund additional program
expenditures, likely in the millions to tens of millions
annually.
COMMENTS : The transportation system is the largest contributor
to GHG emissions, with transportation sector tailpipe emissions
accounting for nearly 40% of emissions. Transportation is also
the primary source of smog forming and toxic air pollution in
the state.
California has committed to reducing GHG emissions to 1990
levels by 2020 and, because of programs such as CVRP , ARFVTP
and AQIP, the state is on target to meet those goals. However,
the state is further committed to reducing GHG emissions 80%
from 1990 levels by 2050 (Executive Order S-03-05). To reach
that goal, emissions from 2020 to 2050 will have to decline
several times faster than the rate needed to reach the 2020
goals. Meeting these goals will require the state to continue
building on efforts already underway to put more low- and
zero-emission vehicles on the road.
This bill essentially does just that-builds on existing programs
SB 1275
Page 5
for the purpose of accelerating emission reductions. Under the
umbrella of the Charge Ahead Initiative, the bill establishes a
mid-term goal of placing one million zero- and
near-zero-emission vehicles into service in California by
January 1, 2023, by creating a self-sustaining industry for
clean air vehicles and making them more accessible, particularly
to low- and moderate-income individuals.
Specifically, this bill addresses a number of improvements that
have been identified for key programs within ARB and CEC.
First, SB 1275 calls for ARB to encourage greater participation
in EFMP. Rather than just providing vouchers for vehicle
replacement, this bill adds a "mobility option" that allows
qualifying individuals to receive monies equivalent to what the
motor vehicle owner would have received in other incentives.
These incentives, issued in the form of vouchers, could be used
for car sharing programs or transit use. This approach is
intended to incentivize transportation options that provide
mobility but do not necessarily involve purchasing a vehicle.
This bill provides some balance in ARB's vehicle rebate programs
by directing ARB to adopt revisions to CVRP criteria to reduce
vehicle rebates over time, based on the rate of sales. The
author indicates that phasing down rebates will allow the
program to reflect market penetration and ensure that as the
number of vehicles purchased increases, the number of rebates
drop. The author and sponsors note that this process will
eliminate market volatility that currently exists when rebate
programs run out of funding. Furthermore, as the market for
these vehicles increases, so that the dollars can be used for
other incentive programs that benefit low- and moderate-income
individuals. In line with this program change in CVRP, the bill
also requires that ARB revise the HVIP criteria and guidelines
to expand program eligibility for retrofitted and remanufactured
vehicles that have been converted to make them zero- or
near-zero emission vehicles and, in doing so, open up the market
of used and remanufactured vehicles, thereby increasing the
overall number of clean air vehicles in use in California.
As part of the Charge Ahead Initiative, ARB will be required to
establish electric transportation programs that are accessible
and directly benefit disadvantaged and low- and moderate-income
communities. These programs include loan and credit enhancement
programs to improve the opportunity of low-income persons or
those with bad credit to better qualify to purchase or lease
SB 1275
Page 6
clean cars. This would likely open up the market for a number
of individuals who currently are unable to put down the money
needed to buy or lease a car or who do not qualify for leasing
options because of poor credit. Other programs include
developing car sharing programs in disadvantaged communities
using clean cars to support the mobility option called for in
this bill. The author indicates the intent to model programs
after similar successful programs in other metropolitan areas
around the country and to tailor these programs so that they can
be successful in a wider array of location, including rural
communities.
ARB would also be charged with developing programs to deploy
charging infrastructure with a particular emphasis on multiunit
dwellings in disadvantaged communities since accessing vehicle
charging infrastructure in settings other than single family
homes has been found to be a significant barrier to electric
vehicle ownership. The bill also calls for creating programs to
improve outreach in disadvantaged communities with respect to
available programs and benefits of using clean air vehicles.
Committee concerns : SB 1204 (Lara and Pavley), also under
consideration by the committee, addresses similar programs and
projects and makes similar recommendations to those made in this
bill. SB 1204, however focuses solely on medium- and heavy-duty
vehicle fleets while this bill covers light, medium- and
heavy-duty vehicles and SB 1204 uses a broader definition for
zero-emission vehicles (one that is more broadly inclusive of
varying fuel types). SB 1275 more narrowly defines
zero-emission vehicles as electric or hydrogen fuel cell
vehicles only, excluding for instance, vehicles that are powered
by natural gas. Since both bills apply to the same programs and
projects and both would utilize the same funding sources, using
two different definitions could create confusing and create
outcomes where ARB could end up prohibiting some project types
allowed by one bill but exclude others.
The committee recommends that the authors collaborate to resolve
this conflict both in terms of a defining zero-emission vehicles
definition and in terms of whether or not both bills should
address medium- and heavy-duty vehicle and equipment programs.
Double Referral : The bill is double referred to the Assembly
Natural Resources Committee.
SB 1275
Page 7
Related legislation : SB 1204 (Lara and Pavley) would create a
new program to be administered by 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. That bill is scheduled to be heard in the Assembly
Transportation Committee.
SB 913 (DeSaulnier) require ARB, in revising the EFMP
regulations, to consider requiring certain consumer protections,
private-party sales, combining retirement and replacement into a
single programs, and requiring a minimum fuel efficiency
standard for replacement vehicles. The bill is scheduled to be
heard in the Assembly Transportation Committee.
SB 1228 (Hueso) would extend the Trade Corridor Investment Fund
and allow it to receive cap and trade revenues to fund goods
movement projects throughout the state. The bill is scheduled
to be heard in the Assembly Transportation Committee.
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.
AB 1532, Perez, Chapter 807, Statutes of 2012 established the
eligible uses of revenues generated from the auction of
emissions allowances authorized under AB 32 and the processes
for spending those revenues.
REGISTERED SUPPORT / OPPOSITION :
Support
SB 1275
Page 8
Coalition for Clean Air (co-source)
Communities for a Better Environment (co-source)
Environment California (co-source)
Greenlining Institute (co-source)
Natural Resources Defense Council (co-source)
American Lung Association in California
Asian Pacific Environmental Network
Asthma Coalition of Los Angeles County
Baz Allergy, Asthma and Sinus Center (San Joaquin Valley)
Black Business Association
Breathe California
California Electric Transportation Coalition
California Environmental Justice Alliance
California League of Conservation Voters
California Municipal Utilities Association
California Society for Pulmonary Rehabilitation
California Solar Energy Industries Association
California Thoracic Society
CalPIRG
CALSTART
Catholic Charities Diocese of Stockton
Cerebrotech
Environmental Defense Fund
FAME Corporations
Global Green USA
Health Care Without Harm
Los Angeles County Medical Association
Mom Clean Air Force
Physicians for Social Responsibility, Los Angeles
Physicians for Social Responsibility, Sacramento
Physicians for Social Responsibility, San Francisco Bay Area
Regional Asthma Management and Prevention
San Francisco Asthma Task Force
San Francisco Medical Association
Sierra Club California
Solar Energy Industries Association
St. John's Well Child and Family Centers
TransForm
Union of Concerned Scientists
Valley LEAP
Vote Solar
West Angeles Community Development Corporation
Opposition
SB 1275
Page 9
CalChamber
CalTax
Analysis Prepared by : Victoria Alvarez / TRANS. / (916) 319-
2093