BILL ANALYSIS Ó
SENATE COMMITTEE ON TRANSPORTATION AND HOUSING
Senator Jim Beall, Chair
2015 - 2016 Regular
Bill No: SB 1405 Hearing Date: 4/19/16
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|Author: |Pavley |
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|Version: |4/13/2016 Amended |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant|Erin Riches |
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SUBJECT: Zero-emission vehicles: transportation systems
DIGEST: This bill requires the state Air Resources Board (ARB)
to revise the Zero Emission Vehicle (ZEV) regulation to expand
the definition of transportation systems eligible for ZEV
credits, and to conduct a study relating to transit-subsidized
rides on ZEV-credit-qualified transportation systems serving
disadvantaged communities.
ANALYSIS:
AB 32 and disadvantaged communities
AB 32 (Núñez and Pavley, Chapter 488, Statutes of 2006) requires
ARB to develop a plan to reduce emissions to 1990 levels by
2020. It also requires ARB to ensure that programs to reduce
greenhouse gas (GHG) emissions are targeted, to the extent
feasible, to the most disadvantaged communities (DACs) in the
state. AB 32 authorizes ARB to deposit any fees paid by GHG
emission sources into the Greenhouse Gas Reduction Fund (GGRF).
SB 535 (De León, Chapter 830, Statutes of 2012) requires 25% of
GGRF funds to be allocated to projects that provide benefits to
DACs, and at least 10% to projects located within DACs. DACs
have been identified by the California Environmental Protection
Agency using census tract data based on geographic,
socioeconomic, public health, and environmental hazard criteria.
SB 1405 (Pavley) Page 2 of ?
Charge Ahead Initiative
In March 2012, Governor Brown issued an Executive Order setting
a goal of 1.5 million zero-emission vehicles (ZEVs) on
California roads by 2025. The order also set a GHG emissions
reduction target of 80% below 1990 levels by 2050. SB 1275 (De
León, Chapter 530, Statutes of 2014) builds on this goal by
establishing the Charge Ahead California Initiative at ARB,
which outlines a vision of placing 1 million electric cars,
trucks, and buses on California's roads by 2023. SB 1275
directs ARB to provide incentives to increase the availability
of ZEVs and near-ZEVs, particularly in DACs. Pursuant to SB
1275, ARB's FY 2015-16 Funding Plan includes, among other
provisions, a new pilot project to create vanpooling for Central
Valley agricultural workers, and the expansion of four pilot
projects: increased incentives for public fleets to purchase
vehicles eligible for Clean Vehicle Rebate Program rebates;
advanced technology car-sharing and mobility options; increased
incentives for vehicle replacement under the Enhanced Fleet
Modernization Program; and financing assistance. These pilot
projects are currently being implemented.
ZEV regulation
The ZEV regulation includes near-zero-emission vehicles in
addition to pure ZEVs. The regulation, which aims to encourage
the commercialization of battery electric and fuel-cell
vehicles, has a goal for ZEVs to comprise 15% of new cars sold
in California by 2025. The ZEV regulation requires a certain
percentage of a vehicle manufacturer's passenger car and
light-duty truck fleet each year to be battery electric and
fuel-cell vehicles, clean plug-in hybrids, clean hybrids, and/or
clean gasoline vehicles with near-zero tailpipe emissions.
Different types of vehicles generate varying credits; a minimum
percentage of pure ZEVs are required.
In complying with the ZEV regulation, manufacturers can transfer
credits among each other and from third parties. Manufacturers
can over-comply with the ZEV regulation, then use their credit
balance to provide flexibility in the timing and production of
bringing new clean cars to the market to meet more stringent ZEV
requirements in the coming years. If a manufacturer fails to
meet its ZEV requirement in a given year, it has two years to
make up the deficit; if it still fails to comply, it is subject
to financial penalties.
SB 1405 (Pavley) Page 3 of ?
According to ARB, compliance with the ZEV regulation through
model year 2014 represents a total of nearly 4 million ZEVs and
near-ZEVs, including more than 500 fuel-cell vehicles; 60,000
battery electric vehicles; 29,400 neighborhood electric
vehicles; 60,000 clean plug-in hybrids; and more than 3 million
clean gasoline vehicles.
ZEV regulation: transportation system credits
The ZEV regulation provides credits to manufacturers for
vehicles placed in an "innovative transportation system." To be
eligible, a project must at minimum demonstrate shared use of
ZEVs and the application of "intelligent new technologies" such
as reservation management, card systems, depot management,
location management, charge billing, and real-time wireless
information systems. If a project additionally features linkage
to transit, such as dedicated parking and charging facilities at
transit stations, it may receive additional credits. A project
that features linkage to transit but does not demonstrate shared
use or application of intelligent new technologies may also
receive credits. A manufacturer can apply for the credits and
directly use them or may obtain credits from a third party (such
as a car-sharing company) that has applied for credits and then
sold them on the credit market. Transportation system credits
may be used to meet a portion, but not the entirety, of a
manufacturer's obligation. ARB determines the credits earned
per vehicle.
ZEV Action Plan
Following the Governor's 2012 Executive Order, the ZEV Action
Plan was established to identify specific strategies and actions
that state government would take to meet the milestones
identified in the order. The plan was a product of an
interagency working group led by the Governor's office, with
input from industry and other stakeholders.
Since 2013, new priorities have emerged. The draft 2015 ZEV
Action Plan identifies seven broad goals for state government to
advance ZEVs: building consumer awareness and demand; enabling
necessary infrastructure; promoting broad access; transforming
SB 1405 (Pavley) Page 4 of ?
vehicle fleets; expanding the use of zero-emission rail,
freight, and other medium- and heavy-duty technologies;
capturing economic development opportunities; and supporting
national and international ZEV deployment.
This bill requires ARB to:
1)Revise the ZEV regulations by March 1, 2017, to expand the
definition of "transportation systems eligible for
zero-emission vehicle credits." Specifically, the ARB shall
include in this definition additional entities utilizing
fleets of ZEVs, including rental car companies, transportation
network companies (TNCs), taxicab companies, and car-sharing
companies, to the extent that operations of these entities
reduce per-passenger emissions.
2)Conduct a study to determine the feasibility and efficacy of
providing grants to transit operators to subsidize
cost-effective rides serving DACs through the use of ZEVs
utilized by ZEV-credit-eligible transportation systems, in a
manner that complements the transit service.
COMMENTS:
1)Purpose. The author states that California's ZEV program has
driven a critical set of innovations in transportation
technology. But in order to meet the Governor's goal of 1.5
million ZEVs by 2025, and to provide broad access to these
vehicles in all communities, the state will need to
significantly augment its efforts to build consumer awareness
and deploy vehicles in DACs. The author states that the
current regulatory framework is far behind today's trend
toward a multimodal and mobility-driven model. This bill
brings the ZEV regulation into alignment with modern
transportation trends and seeks to encourage locally driven
pilot programs that benefit DACs.
2)How many ZEVs are on California's roads? According to ARB, as
of December 2015 there were 180,000 ZEVS on California's
roads, representing about 3.5% of new car sales. About 1.4
million ZEVs were sold between 2010 and 2015. The Draft 2015
ZEV Action Plan notes that as of January 2015, Californians
drive 40% of all ZEVs on the road in the U.S., while the U.S.
comprises about half of the world market. ARB's 2013 Climate
SB 1405 (Pavley) Page 5 of ?
Change Scoping Plan and current draft Mobile Source Strategy
both point to the need for the light-duty vehicle fleet to be
largely electrified by 2050, with ZEV sales of nearly 100% by
that point.
3)Where are the ZEVs? According to the Draft 2015 ZEV Action
Plan, the metropolitan areas of Los Angeles, San Diego, and
the San Francisco Bay Area lead the state in plug-in electric
vehicle sales. ZEV adoption has been greatest in Los Angeles
and Santa Clara counties. Many regions with low ZEV adoption
have longer average driving distances, lack charging
infrastructure, and have high populations of disadvantaged,
low-income, and moderate-income communities. One strategy
included in the draft plan is to increase access to ZEVs for
low- and moderate-income consumers and to build awareness in
DACs. Another strategy is to expand the use of zero-emission
buses; specifically, to fund public transit and infrastructure
benefiting DACs and low- and moderate-income communities, and
to develop a program to build ZEV buses in local public
transit fleets.
4)Updating the "transportation systems" definition. The author
states that this bill is needed to modernize the ZEV
regulation to incorporate today's technology: The current
regulation focuses on car-sharing, while ride-sharing has now
become quite popular. The ZEV regulation currently defines
"innovative transportation system" as shared use of ZEVs and
the application of technologies such as reservation
management, card systems, depot management, location
management, charge billing, and real-time wireless information
systems, with additional credits awarded for linkage to
transit. While it does not appear that the current regulation
excludes fleets such as rental car companies, TNCs, and
taxicab companies, the author states that updating the
regulation to specifically include these entities will help
foster consumer awareness and help the state reach its ZEV
goals.
5)Double-referral. This bill has also been referred to the
Senate Environmental Quality Committee.
Related Legislation:
AB 1710 (Calderon) - requires ARB to develop and implement a
program comprised of a portfolio of incentives to promote ZEV
SB 1405 (Pavley) Page 6 of ?
and near-ZEV deployment. AB 1710 also provides tax incentives
for purchasing new or used ZEVs or near-ZEVs. This bill will be
heard by the Assembly Revenue and Taxation Committee on April
18.
AB 2426 (Low) - requires ARB to establish and implement a
Workplace Charging Stations Grant Program to provide funds for
installation of electric vehicle charging stations in commercial
parking facilities. This bill is pending in the Assembly
Transportation Committee.
AB 2564 (Cooper) - requires ARB to adopt regulations for the
Clean Vehicle Rebate Program, which provides rebates for the
purchase of new ZEVs, to establish specified income limits,
increase rebate payments for applicants with household incomes
less than or equal to 300% of the federal poverty level, include
outreach to DACs to increase consumer awareness, and prioritize
rebate payments for low-income applicants. This bill will be
heard in the Assembly Natural Resources Committee on April 18.
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes
Local: No
POSITIONS: (Communicated to the committee before noon on
Wednesday,
April 13, 2016.)
SUPPORT:
TechNet
OPPOSITION:
None received
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