BILL ANALYSIS
SB 1340
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Date of Hearing: August 4, 2010
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
SB 1340 (Kehoe) - As Amended: August 2, 2010
Policy Committee:
TransportationVote:11-1
Local Government 7-2
Urgency: No State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill allows two existing state programs to subsidize and
finance, respectively, installation of electric vehicle charging
infrastructure. Specifically, this bill:
1)Makes available funding through the Alternative and Renewable
Fuel and Vehicle Technology Program (ARFVT Program) to
homeowners who purchase plug-in electric vehicles, to
subsidize the cost of installing a residential plug-in
electric vehicle charging station.
2)Allows installation of electric vehicle charging
infrastructure to be financed through the use of bond funds
secured through voluntary property assessments ("PACE bonds").
3)Limits the use of PACE bond financing to situations in which
the use of such financing does not result in a property
owner's annual property taxes and assessments exceeding five
percent of the property's appraised value.
FISCAL EFFECT
1)Negligible costs to the Energy Commission to include
residential plug-in electric vehicle charging stations among
the types of projects eligible for AB 118 funding.
2)Cost pressure of an unknown amount, potentially in the
millions of dollars, resulting from expansion of the types of
projects eligible for funding from these programs.
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COMMENTS
1)Rationale . The author notes that consumers will be less
likely to switch to electric vehicles, which the author
anticipates being introduced to market soon, if they face
expensive upgrades to their homes' electrical systems in order
to fuel these cars. The author further notes that
installation of such electrical upgrades does not qualify
under existing programs that might be used to ease homeowners'
financial burden. The author intends this bill to increase
the financing options available to homeowners who purchase
electric vehicles by allowing them to qualify for funding
under the Energy Commission's ARVTF Program and for the use of
PACE bond financing.
2)Background .
a) AB 118 (N??ez, Chapter 50, Statutes of 2007) In 2007,
the Legislature enacted the California Alternative and
Renewable Fuel, Vehicle Technology, Clean Air, and Carbon
Reduction Act of 2007. The act created two new programs-the
ARFVT Program, to be administered by the Energy Commission,
and the Air Quality Improvement Program, to be administered
by the Air Resources Board. The programs are funded
primarily by increases in various vehicle, vessel, and
other air quality-related fees that are projected to raise
upwards of $150 million annually for each of eight years.
The act identifies the primary goals of the ARFVT Program
as development and commercialization of technologies for
renewable and nonpetroleum fuels that help to achieve the
state's climate change goals. The act states that the
program is not to prefer any particular vehicle or fuel
technology. Rather, the program is to provide financial
incentives, such as grants, loans, and loan guarantees for
specified types of projects that meet specified criteria,
including furtherance of a number of air quality and other
environmental and energy goals.
b) PACE Bond Financing . The PACE program permits local
public agencies and utility districts to provide up-front
financing to property owners to install solar or other
renewable energy-generating devices or make specified water
or energy efficiency improvements to their properties. This
financing mechanism was first used by Berkeley through its
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Charter Cities authority, and then authorized statewide by
AB 811 (Levine), Chapter 159, Statutes of 2008, and AB 474
(Blumenfield), Chapter 444, Statutes of 2009.
Under the program, a city, county, or other public agency
issues bonds and uses the proceeds to make loans to
property owners to finance energy retrofits. These loans
are repaid by the property owner over 20-30 years via an
annual assessment on the owner's property tax bill. The
assessment remains on the property even if it is sold or
transferred.
From the property owner's perspective, the added property
tax assessments are partly or fully offset by energy
savings resulting from the retrofit. The loan repayments
from the property owners are dedicated by the
municipalities to the repayment of the revenue bonds.
Some have expressed concern that use of PACE bond financing
results in an additional burden to homeowners who must pay
increased property assessments as a result of the voluntary
use of such financing. This bill attempts to address such
concerns by limiting the use of PACE bond financing to
situations where its use will not result in excessive
property taxes or assessments.
Analysis Prepared by : Jay Dickenson / APPR. / (916) 319-2081