BILL ANALYSIS                                                                                                                                                                                                    



                                                                     AB 904


                                                                    Page  1





          Date of Hearing:  May 20, 2015


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                                 Jimmy Gomez, Chair


          AB  
          904 (Perea) - As Amended April 29, 2015


           ----------------------------------------------------------------- 
          |Policy       |Transportation                 |Vote:|14 - 2       |
          |Committee:   |                               |     |             |
          |             |                               |     |             |
          |             |                               |     |             |
          |-------------+-------------------------------+-----+-------------|
          |             |                               |     |             |
          |             |                               |     |             |
          |             |                               |     |             |
          |-------------+-------------------------------+-----+-------------|
          |             |                               |     |             |
          |             |                               |     |             |
          |             |                               |     |             |
           ----------------------------------------------------------------- 


          Urgency:  No  State Mandated Local Program:  NoReimbursable:  No


          SUMMARY:


          This bill requires the Air Resources Board (ARB) to create a  
          rebate program for the purchase of used clean vehicles and used  
          electric vehicle batteries.  Specifically, this bill:  









                                                                     AB 904


                                                                    Page  2






          1)Requires ARB to establish, as part of the Air Quality  
            Improvement Program (AQIP), the Clean Reused Vehicle Rebate  
            Project (CRVRP) to provide rebates for the purchase of  
            eligible used clean air vehicles and used electric batteries.


          2)Eligible used vehicles include battery electric, plug-in  
            hybrid, and fuel cell vehicles.


          3)Used vehicles are those that have been sold or registered with  
            an appropriate authority and operated upon the highway, as  
            specified.


          FISCAL EFFECT:


          1)Cost pressures, likely in the tens of millions of dollars to  
            establish the rebate program (Air Quality Improvement Fund or  
            Greenhouse Gas reduction Fund).


          2)Increased annual costs of $350,000 for ARB to develop,  
            implement and review the program (Air Quality Improvement Fund  
            or Greenhouse Gas reduction Fund).


          COMMENTS:


          1)Purpose.  According to the author, disadvantaged communities  
            in California are disproportionately burdened by multiple  
            sources of pollution.  However, these same communities are far  
            behind other areas of the state when it comes to receiving  
            clean air vehicle rebates.  
            
            The author cites data showing that clean vehicle rebates in  








                                                                     AB 904


                                                                    Page  3





            Fresno County account for less than 1% of the total rebates  
            issued throughout the state, despite the fact that Fresno  
            County ranks 8th out of the 10 most disadvantaged communities  
            and it has some of the poorest air quality in California.  

            To address this issue, this bill creates the CRVRP to increase  
            access to clean vehicles in disadvantaged communities by  
            incentivizing the purchase of used clean air vehicles and  
            batteries.

          2)Background.  AB 118 (Nunez), Chapter 750, Statutes of 2007,  
            established the 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 plate fees.  There is approximately $50 million  
            annual available for AQIP programs.

            As part of AQIP, ARB implemented the CVRP, which offers up to  
            $5,000 in rebates toward the purchase or lease of eligible  
            light-duty clean air vehicles.  To obtain a CVRP rebate, an  
            individual is required to purchase or lease an eligible  
            vehicle and then apply for the rebate.  There is no guarantee  
            that rebates will be issued and participants are encouraged to  
            apply for rebates before the fund is exhausted.  

            To ensure program integrity and prevent fraud, ARB has set  
            certain CVRP requirements including the requirement that  
            eligible vehicles have zero- and near-zero emissions and that  
            only one rebate is issued per vehicle.  Individuals who  
            receive a rebate are required to retain ownership of the  
            vehicle for operation in California for a minimum of 30  
            consecutive months immediately after purchase or lease and  
            sign documents, under penalty of perjury, with regard to  
            compliance with program requirements.  

            To date, there is no definitive evidence that these rebates  
            change consumer purchasing behavior rather than reward  
            behavior that would have happened without the rebates.









                                                                     AB 904


                                                                    Page  4







          Analysis Prepared by:Jennifer Galehouse / APPR. / (916)  
          319-2081