BILL ANALYSIS �
AB 1608
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Date of Hearing: May 9, 2012
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 1608 (Wieckowski) - As Amended: April 10, 2012
Policy Committee:
TransportationVote:8-3
Urgency: No State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill requires more valuable rebates to be offered for
zero-emission vehicles (ZEVs) manufactured by a California
manufacturer. Specifically, this bill:
1)Requires rebate amounts for ZEVs manufactured by a California
manufacturer, awarded as part of the state's Clean Vehicle
Rebate Project (CVRP) and the Hybrid Truck and Bus Voucher
Incentive Project (HVIP), to be 20% greater than rebates for
other ZEVs.
2)Defines a California manufacturer as a business entity that
meets either of the following criteria:
a) The owners or policymaking officers are domiciled in the
state and the permanent principal office, or place of
business from which the manufacturer's trade is directed or
managed, is located in the state.
b) A business or corporation, including those owned by, or
under common control of, a corporation, that meets all of
the following criteria continuously during the five years
prior to selling an eligible vehicle to a rebate recipient:
i) Owns and operates an in-state manufacturing facility
that builds or manufactures eligible vehicles.
ii) Is licensed by the state to conduct business within
the state.
iii) Employs state residents for work within the state.
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FISCAL EFFECT
1)Minor, absorbable direct state costs to administer additional
program requirements.
2)This bill has the effect of making achievement the state's ZEV
goals more expensive than it would otherwise be. Under the
bill, each rebate awarded for the purchase of a
California-manufactured ZEV costs the state 20% more than
would a rebate for ZEV not manufactured in California
(presuming the vehicles were comparably priced), even though
the two vehicles may offer identical emissions performance.
Therefore, to the extent this bill is successful in awarding
rebates for purchase of California-manufactured ZEVs instead
of other ZEVs, it increases the cost of the state's ZEV rebate
program. The result will be cost pressure for additional
funding to encourage the purchase of ZEVs to reach the state's
emissions goals.
Future funding for the state's two ZEV rebate programs is
uncertain. However, related legislation (AB 2540, Hall) would
appropriate $15 million from the California Public Utilities
Commission Electric Program Investment Charge funds for use by
the CVRP program. If both AB 2540 and this bill were to
become law, and if all future ZEV rebates were awarded for the
purchase of California-manufactured ZEVs, the state would need
$18 million in additional CVRP funding, rather than $15
million, to fund rebates for purchase of the same number of
ZEV that could have received rebates absent the California
manufacturer preference.
COMMENTS
1)Rationale. The author and supporters contend this bill, by
encouraging purchase of California manufactured vehicles, will
bolster California manufacturing and the California economy
while furthering the state's clean air goals.
2)Background. In 2007, the Legislature enacted the California
Alternative and Renewable Fuel, Vehicle Technology, Clean Air,
and Carbon Reduction Act of 2007 (AB 118, N��ez, Chapter 50).
The act created two new programs-the Alternative and Renewable
Fuel and Vehicle Technology Program (ARFVTP), to be
administered by the California Energy Commission (CEC), and
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the Air Quality Improvement Program (AQIP), 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. As part of
AQIP, ARB has established two rebate programs to encourage the
purchase of low-emission vehicles:
a) The Clean Vehicle Rebate Project (CVRP) receives funding
from ARB and CEC and is administered by the California
Center for Sustainable Energy (CCSE). According to ARB,
rebates range from $1,500 to $5,000 per vehicle, depending
on vehicle type, available for individuals and business
owners who purchase or lease new eligible zero-emission or
plug-in hybrid electric vehicles.
b) The Hybrid and Zero-Emission Truck and Bus Voucher
Incentive Project (HVIP) provides vouchers to help
California fleets purchase hybrid and zero-emission trucks
and buses. HVIP is designed to help purchasers cover the
$30,000 to $70,000 premium for heavy-duty hybrid vehicles.
ARB expects this premium to come down as the market
matures, at which point incentives will no longer be needed
or offered.
3)Did It Work-We May Never Know. If this bill were to become
law, consumers may buy California-manufactured ZEVs and
receive the rebate and the rebate premium. However, it will
be difficult for the state to know if consumer behavior
changed in response to the rebate premium. In the worst case
scenario, the state will reward a consumer who purchases a
California-manufactured ZEV who would have purchased a
California-manufactured vehicle, absent the rebate premium.
The result of this worst case scenario is diminished program
costs effectiveness, in terms of environmental benefit,
without a corresponding economic boost.
4)Related Legislation. AB 2540 (Hall) would appropriate $15
million from the California Public Utilities Commission
Electric Program Investment Charge funds for use by the CVRP
program. The bill is pending before this committee.
5)Support. This bill is supported by California manufacturers
of ZEVs-Electric Vehicles International (sponsor), PiMobility,
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Tesla Motors, Inc. and Zero Motorcycles-who potentially would
benefit from the rebate premium required by this bill. These
supporters contend the rebates encourage sales that will allow
them to continue to employ Californians in manufacturing.
6)Opposition. This bill is opposed by major industry
organizations and the United Autoworkers of America, who
contend this bill (a) reduces the number of vehicles that will
be purchased through the AB 118 rebate programs, and (b)
unfairly disadvantages vehicle manufacturers located outside
California.
Analysis Prepared by : Jay Dickenson / APPR. / (916) 319-2081