BILL ANALYSIS Ó
AB 2564
Page 1
ASSEMBLY THIRD READING
AB
2564 (Cooper)
As Amended April 20, 2016
Majority vote
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|Committee |Votes|Ayes |Noes |
| | | | |
| | | | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Natural |9-0 |Williams, Jones, | |
|Resources | | | |
| | | | |
| | |Cristina Garcia, | |
| | |Gomez, Hadley, | |
| | |Harper, McCarty, | |
| | | | |
| | | | |
| | |Mark Stone, Wood | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Appropriations |20-0 |Gonzalez, Bigelow, | |
| | |Bloom, Bonilla, | |
| | |Bonta, Calderon, | |
| | |Chang, Daly, Eggman, | |
| | |Gallagher, Eduardo | |
| | |Garcia, Roger | |
| | |Hernández, Holden, | |
| | |Jones, Obernolte, | |
| | |Quirk, Santiago, | |
AB 2564
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| | |Wagner, Weber, Wood | |
| | | | |
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SUMMARY: Reforms the Clean Vehicle Rebate Project (CVRP) by
increasing outreach and rebate levels for low-income
Californians. Lowers income limits for CVRP. Specifically,
this bill:
1)Requires outreach to low-income households and prioritizes
rebates payments for low-income consumers.
2)Increases rebate amounts by $500 per rebate for consumers with
household incomes less than or equal to 300% of the federal
poverty level. Increased rebate amounts are available for
fuel-cell electric vehicles, battery electric vehicles, and
plug-in hybrid electric vehicles.
3)Lowers CVRP income limits to $125,000 single filer, $170,000
for head of household, and $250,000 for joint filers.
Excludes fuel cell electric vehicles from the income limit.
EXISTING LAW:
1)Establishes the California Alternative and Renewable Fuel,
Vehicle Technology, Clean Air, and Carbon Reduction Act of
2007 [AB 118 (Núñez), Chapter 750, Statutes of 2007]. AB 118
is funded through temporary increases in vehicle registration
fees ($3), smog abatement fees ($8), boat registration fees
($10/20), and special identification plate fees ($5).
Collection of these fees is authorized until 2024 pursuant to
AB 8 (Perea), Chapter 401, Statutes of 2013. The fees support
three major programs:
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a) The Air Quality Improvement Program (AQIP), administered
by the Air Resources Board (ARB) in consultation with local
air districts, funds projects that reduce criteria air
pollutants, improve air quality, and provide research for
alternative fuels and vehicles, vessels, and equipment
technologies. The two primary programs adopted by ARB
pursuant to AQIP are the CVRP and the Hybrid and Zero
Emissions Truck and Bus Voucher Incentive Program (HVIP).
AQIP is funded by smog abatement fees, boat registration
fees, and special identification plate fees and receives
between $30 to 36 million per year from these sources.
b) The Enhanced Fleet Modernization Program (EFMP), under
which ARB, in consultation with the Bureau of Automotive
Repair (BAR), pays to permanently remove cars and small
trucks from operation through voluntary retirement by their
owners. EFMP is funded by $1 of the vehicle registration
fee and receives approximately $30 million per year.
c) The Alternative and Renewable Fuel and Vehicle
Technology Program (ARFVTP), administered by California
Energy Commission (CEC), provides grants and other
financial incentives to accelerate the development and
deployment of clean, efficient, low carbon alternative
fuels and technologies. ARFVTP is funded by $2 of the
vehicle registration fee and receives approximately $100
million per year.
2)Establishes the Charge Ahead California Initiative pursuant to
SB 1275 (de León), Chapter 530, Statutes of 2014, that, among
other things, included the goal of placing into service at
least one million zero emissions vehicles (ZEV) and near-zero
emission vehicles (NZEV) by January 1, 2023, and increasing
access for disadvantaged, low-income, and moderate-income
communities and consumers to ZEVs and NZEV vehicles.
FISCAL EFFECT:
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1)Increased initial costs of $150,000 to $250,000 (Air Quality
Improvement Fund) per year for two years for ARB to adopt
regulations to implement CVRP eligibility modifications and
prioritizations.
2)Unknown, future and ongoing costs for ARB to update the CVRP
program by regulation to reflect current market conditions.
3)Unknown, increased costs for ARB to provide outreach to
low-income households.
COMMENTS: In 2007, AB 118 established three new programs
intended to promote vehicle and fuel technology that reduces air
pollution and greenhouse gas (GHG) emissions statewide. These
programs are AQIP, EFMP, and ARFVTP.
AQIP provides financial incentives for public and private groups
and individuals to adopt smog and diesel particulate pollution
reducing technology that concurrently reduces GHG emissions.
Two of AQIP's flagship projects, CVRP and HVIP, represent the
program's largest funding commitments. AQIP has also provided
incentives for biofuels research, hybrid truck testing, lawn and
garden equipment replacement, zero-emission all-terrain
agricultural work vehicle rebates, advanced technology
demonstration, and hybrid off-road equipment pilot projects.
CVRP provides rebates for ZEV and NZEV, including plug-in hybrid
vehicles, battery electric vehicles, fuel cell electric
vehicles, and neighborhood electric vehicles.
The demand for CVRP has steadily increased over time and
surpassed funding available through AB 118. Originally the
funding gap was covered with loans from various funds. In the
2014-15 Budget Act, $200 million was appropriated to AQIP from
the Greenhouse Gas Reduction Fund (GGRF). Last year, CVRP was
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one of the few non-continuously appropriated programs to receive
an appropriation from GGRF. Despite that, CVRP may still run
out of funding prior to the enactment of this year's budget, and
the administrator may need to establish a wait list. To date,
CVRP has spent over $300 million ($160 million from GGRF) to
provide over 142,000 rebates. ARB proposes to spend an
additional $230 million on CVRP from the $500 million requested
appropriation for low carbon transportation and fuels in the
Governor's 2016-17 fiscal year budget.
As a result of ARB's implementation of SB 1275, ARB, on March
28, 2016, set a CVRP income cap of:
a) $250,000 for single filers;
b) $340,000 for head-of-household filers; and,
c) $500,000 for joint filers.
In addition, rebate amounts will be increased by $1,500 per
rebate for consumers with household incomes less than or equal
to 300% of the federal poverty level.
This bill attempts to improve equity and cost effectiveness of
CVRP by implementing two recommendations from an ARB discussion
document. The bill also goes further on actions ARB has already
taken to address equity and cost effectiveness. These
recommendations include increasing awareness about CVRP by
requiring outreach in disadvantaged communities and prioritizing
rebates payments for low-income consumers. This bill also
increases rebate amounts by $500 per rebate for consumers with
household incomes less than or equal to 300% of the federal
poverty level. ARB's current income limits would not affect
many rebate recipients and still include very high-income
Californians. This bill lowers the CVRP income limits to
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$125,000 single filer, $170,000 for head of household, and
$250,000 for joint filers.
Analysis Prepared by:
Michael Jarred / NAT. RES. / (916) 319-2092 FN: 0003117