BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
SB 1405 (Pavley) - Zero-emission vehicles: transportation
systems
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|Version: April 13, 2016 |Policy Vote: T. & H. 11 - 0, |
| | E.Q. 7 - 0 |
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|Urgency: No |Mandate: No |
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|Hearing Date: May 16, 2016 |Consultant: Mark McKenzie |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: SB 1405 would require the California Air Resources
Board (ARB) to revise its zero-emission vehicle (ZEV) standards
regulation to expand the definition of transportation systems
eligible for ZEV credits, as specified. The bill would also
require ARB to conduct a study on the feasibility and efficacy
of providing grants to transit operators for subsidized services
for disadvantaged communities using ZEVs.
Fiscal
Impact:
ARB costs of up to $244,000 in 2016-17 and up to $166,000 in
2017-18 to amend ZEV standards regulations to expand the
definition of eligible transportation systems. (Motor Vehicle
Account)
SB 1405 (Pavley) Page 1 of
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ARB contracting costs of approximately $500,000 to conduct the
feasibility study. (Motor Vehicle Account)
Unknown significant cost pressures to implement the
recommendations from the feasibility study. (Greenhouse Gas
Reduction Fund or other special funds)
Background: Existing law provides ARB with primary responsibility for
control of mobile source air pollution, including adoption of
rules for reducing vehicle emissions and the specification of
vehicular fuel composition. Existing law requires ARB to
implement motor vehicle emission standards, in-use performance
standards, and motor vehicle fuel specifications for the control
of air contaminants and sources of air pollution that ARB finds
to be necessary, cost effective, and technologically feasible,
unless preempted by federal law.
In March 2012, Governor Brown issued an Executive Order setting
a goal of 1.5 million ZEVs on California roads by 2025. The
order also set a greenhouse gas emissions reduction target of
80% below 1990 levels by 2050. SB 1275 (De León), Chapter
530/2014, 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.
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 existing pilot
projects: (1) increased incentives for public fleets to purchase
vehicles eligible for Clean Vehicle Rebate Program rebates; (2)
advanced technology car-sharing and mobility options; (3)
increased incentives for vehicle replacement under the Enhanced
Fleet Modernization Program; and (4) financing assistance.
These pilot projects are currently being implemented.
ARB's zero-emission vehicle standards regulation requires large
volume and intermediate volume vehicle manufacturers that sell
cars in California to produce ZEVs (such as battery electric and
fuel cell vehicles), clean plug-in hybrids, clean hybrids and
clean gasoline vehicles with near-zero tail pipe emissions. In
general, the ZEV regulation requires that 15% of new car sales
be ZEVs by 2025. This target is intended to achieve 1.5 million
ZEVs on the road by 2025 as directed under Governor Brown's
SB 1405 (Pavley) Page 2 of
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Executive Order B-16-2012.
To meet the ZEV requirement under the regulation, manufacturers
selling vehicles in California must offer for sale a certain
percentage of ZEVs each year, or must purchase credits from
other manufacturers. These credits are generated by
manufacturers that supply more ZEVs than the required amount.
The ZEV regulation was first adopted in 1990 as part of the Low
Emission Vehicle Program. In 2001, the regulation was amended
to allow auto manufacturers to receive additional ZEV credits
for "transportation systems," which the regulation specifies as
projects that demonstrate shared use of ZEVs, and technologies
such as reservation management, card systems, location
management, charge billing and real-time wireless information
systems. Additional ZEV credits are available if the project
also includes linkage to transit. In general, ZEV credits go to
vehicle manufacturers, but the "transportation systems" credits
can be granted to varying entities. For example, a third-party
such as ZipCar can apply for transportation system ZEV credits
and then sell the ZEV credits in the credit market to any auto
manufacturer for their regulation compliance.
The ability to receive ZEV credits from transportation systems
expires in 2018.
Proposed Law:
SB 1405 would require ARB to revise the ZEV regulation by
March 1, 2017 to expand the definition of "transportation
systems eligible for zero-emission vehicle credits" to include
additional entities utilizing fleets of ZEVs, including rental
car companies, transportation network companies, taxicab
companies, and car-sharing companies, to the extent that
operations involve ridesharing features that reduce
per-passenger emissions.
The bill would also require ARB to conduct a study to determine
the feasibility and efficacy of providing grants to transit
operators to subsidize cost-effective rides serving
disadvantaged communities through the use of ZEVs utilized by
ZEV-credit-eligible transportation systems in a manner that
complements the transit service.
SB 1405 (Pavley) Page 3 of
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Staff
Comments: ARB indicates that updating the ZEV regulation to
revise the definition of transit systems eligible for ZEV
credits would require the use of one limited-term PY of staff
time at a cost of $154,000 in 2016-17, and up to $77,000 in
2017-18, in addition to legal staff time of up to PY at a cost
of up to $90,000 in each of the two fiscal years. Staff notes
that the ARB is currently involved in a collaborative effort
with other state, national, and international partners to review
the status of ZEV technologies, which may inform future updates
to the ZEV regulation. In addition, the ability to get ZEV
credits for transportation systems expires in 2018. It is
unlikely that the ZEV regulations could be updated quickly
enough to provide additional ZEV credits for transportation
systems under the bill's expanded definition prior to that
expiration date.
ARB estimates that it would incur approximately $500,000 in
contract costs to conduct the study specified in the bill. To
the extent the study determines that providing grants to transit
operators who use ZEV credit-eligible vehicles to subsidize
transit service to disadvantaged communities is feasible and
efficacious, the bill could drive additional significant cost
pressures to establish a grant program for those purposes.
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