BILL ANALYSIS Ó
AB 904
Page 1
ASSEMBLY THIRD READING
AB
904 (Perea)
As Amended April 29, 2015
Majority vote
-------------------------------------------------------------------
|Committee |Votes |Ayes |Noes |
|----------------+------+----------------------+--------------------|
|Transportation |14-2 |Frazier, Achadjian, |Kim, Melendez |
| | |Baker, Bloom, Chu, | |
| | |Daly, Dodd, Eduardo | |
| | |Garcia, Gomez, | |
| | |Linder, Medina, | |
| | |Nazarian, O'Donnell, | |
| | |Santiago | |
| | | | |
|----------------+------+----------------------+--------------------|
|Appropriations |12-5 |Gomez, Bonta, |Bigelow, Chang, |
| | |Calderon, Daly, |Gallagher, Jones, |
| | |Eggman, Eduardo |Wagner |
| | |Garcia, Gordon, | |
| | |Holden, Quirk, | |
| | |Rendon, Weber, Wood | |
| | | | |
| | | | |
-------------------------------------------------------------------
SUMMARY: Requires the Air Resources Board (ARB) to create a
rebate program for used clean air vehicles. Specifically, this
bill:
AB 904
Page 2
1)Requires ARB, no later than July 1, 2017, to establish the Clean
Reused Vehicle Rebate Project (CRVRP) as part of the Air Quality
Improvement Program (AQIP) to provide an applicant with either
of the following:
a) A rebate of up to $2,500 for the purchase of an eligible
used vehicle from a licensed dealer, or,
b) A rebate for the purchase of a battery for an electric
vehicle
2)Provides that a rebate be limited to one per vehicle.
3)Requires ARB to coordinate the CRVRP with the Clean Vehicle
Rebate Project (CVRP) and the Enhanced Fleet Modernization
Program (EFMP) to enhance outreach to low-and moderate-income
communities.
4)Defines "eligible used vehicles" as battery electric, plug-in
hybrid, and fuel cell vehicles.
5)Defines "used vehicles" as vehicles that have been sold or
registered with an appropriate authority and operated upon the
highway, as specified.
FISCAL EFFECT: According to the Assembly Appropriations
Committee:
1)Cost pressures, likely in the tens of millions of dollars to
AB 904
Page 3
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: 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. To illustrate this point, the author cites data showing
that CVRP rebates in Fresno County account for less than 1% of the
total rebates issued in the program to date 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 inequity, the author has introduced
this bill which would create the CRVRP to increase access to clean
vehicles in disadvantaged communities by incentivizing the
purchase of used clean air vehicles.
In March 2012, Governor Brown issued EO B-12-2012 that set the
goal of placing 1.5 million clean cars on California's roadways by
2025. Also in early 2012, the Advanced Clean Cars Program (ACCP),
administered by ARB, combined the control of smog-causing
pollutants and GHG emissions into a single coordinated package of
vehicle requirements for model years 2017 through 2025. The ACCP
set lower emissions standards for gasoline- and diesel-powered
cars and delivered to the marketplace an increasing number of
clean cars with zero- and near-zero-emission technologies, such as
full battery electric, plug-in hybrid electric, and hydrogen fuel
cell vehicles.
To encourage the adoption of these new clean cars, ARB also
implemented the CVRP, which offers up to $5,000 in rebates toward
AB 904
Page 4
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 set certain
CVRP requirements including, but not necessarily limited to, the
requirement that eligible vehicles have zero- and near-zero
emissions and that only one rebate be issued per vehicle.
Individuals who receive a rebate pursuant to CVRP 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 augment the state's existing vehicle rebate program and to
encourage the retirement of older, dirty cars and their
replacement with cleaner cars, ARB developed EFMP, which consists
of two elements: the Retirement-Only Program and the
Retire-and-Replace Program. The Retirement-Only Program,
implemented by the Bureau of Automotive Repair (BAR) in
conjunction with Consumer Assistance Program (CAP), provides up to
$1,500 for low-income consumers to scrap their vehicles if they
meet certain eligibility guidelines. The Retire-and-Replace
Program, on the other hand, provides low-income individuals
incentives for scrapping their old, dirty vehicles and provides
additional money toward the purchase of a new, clean air vehicle.
The Retire-and-Replace program is available in the areas of the
state that have the poorest air quality and is implemented by the
South Coast Air Quality Management District (AQMD) and the San
Joaquin Valley Air Pollution Control District (APCD).
In addition to these programs, this year ARB will implement the
EFMP Plus-Up Program (Plus Up) to provide additional incentives
above and beyond EFMP base incentives for individuals in
AB 904
Page 5
disadvantaged communities that retire older, dirty vehicles and
replace them with used or new hybrid, plug-in hybrid, or ZEV.
Plus-Up will be implemented in the San Joaquin Valley APCD and
South Coast AQMD, and eligible low-income participants can receive
additional incentives ranging from $1,500 to $5,000 depending on
the vehicle type that is purchased.
In addition to these programs, the recently enacted Charge Ahead
Initiative has stated the goal of placing at least one million
zero-emission and near-zero-emission vehicles into service by
January 1, 2023, and requires ARB to develop a funding plan needed
to achieve the goal. The bill also made changes to CVRP,
requiring the establishment of programs that further increase
access to and direct benefits for disadvantaged, low-income, and
moderate-income communities and consumers from electric
transportation. With respect to clean air vehicle funding, the
Charge Ahead Initiative modified CVRP to include additional extra
credit for low-income drivers who wish to buy or lease an electric
car and provides assistance to car-sharing programs in low-income
neighborhoods and installing electric vehicle charging stations in
apartment buildings in those communities.
It is laudable that the author wishes to improve air quality by
increasing access to clean air vehicles for low- and middle-income
individuals in disadvantaged communities and undoubtedly areas
with the poorest air quality need increased focus on them to
encourage the purchase and use of cleaner vehicles. It is
important to note, however, that there are already a number of
programs in existence (CAP, EFMP, and CVRP) and under development
(Plus-Up and the Charge Ahead Initiative) that are designed to do
what the author is seeking to accomplish with this bill.
While limiting rebates to one-time dealership sales may help to
eliminate fraud associated with buying and reselling eligible
vehicles to obtain multiple rebates on the same vehicle, there
will be a need for ARB, in consultation with the Department of
AB 904
Page 6
Motor Vehicles, to track rebates to ensure only one rebate is
issued per vehicle. Tracking of rebates issued for batteries
would also be necessary and, likely, more difficult. If fraud is
not fully addressed and carefully controlled in the CRVRP, it
could result in rapid depletion of program funds and the inability
of the program to realize the ultimate objective of placing
additional clean air vehicles into service on California's
roadways to achieve clean air goals.
It is also important that participants in the CRVRP are provided
with clear and accurate information about used clean air vehicles
to ensure that the vehicle they are purchasing meet their needs.
For example, if a buyer wishes to use a rebate to purchase a used
EV, particularly one which may have diminished battery capacity,
they should be informed that the vehicle may only achieve a 60 to
70 mile driving range on a single charge. This would be
particularly important for buyers whose driving needs exceed the
vehicle's range as well as for those who may not have ready access
to the unique fueling infrastructure these vehicles require. It
is also important that buyers who choose to use the rebate for the
vehicle (rather than a new battery) be clearly informed of the
potential costs that could be incurred if a new battery or other
repairs are needed.
Analysis Prepared by: Victoria Alvarez /
TRANS. / (916) 319-2093 FN: 0000639