BILL ANALYSIS �
SB 1455
Page 1
Date of Hearing: August 30, 2012
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
SB 1455 (Kehoe) - As Amended: August 24, 2012
Policy Committee:
TransportationVote:9-4
Natural Resources N/A
Urgency: Yes State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill extends the sunset dates of several programs to fund
vehicle emission reductions, alternative fuels development and
waste tire recycling, and directs the California Energy
Commission (CEC) to allocate funds for the construction of
publicly accessible hydrogen fueling stations. Specifically,
this bill:
1)Directs CEC to allocate $20 million, each fiscal year 2013-14
through 2015-16, and up to that amount each fiscal year
thereafter, not to exceed 20% of the amount appropriated from
the Alternative and Renewable Fuel and Vehicle Technology
(ARFVT) Fund, to fund construction and operation of a hydrogen
fueling network until there are at least 100 publicly
available hydrogen stations.
2)Prohibits the Air Resources Board (ARB) from submitting to the
Office of Administrative Law amendments to the clean fuels
outlet regulation that would require the construction or
operation of a publicly available hydrogen fueling station.
3)Extends, to December 31, 2023, the sunset on the following
program funding sources:
a) The new tire fee, set to expire January 1, 2015, $0.75
of which goes to ARB for the Carl Moyer heavy-duty vehicle
emission program and $1 of which goes towards the state's
waste tire management program.
b) Various vehicle, vessel, and other air quality-related
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surcharges to fund alternative fuels programs, known as AB
118 programs, set to expire January 1, 2016, for the
development and commercialization of nonpetroleum fuels
(ARFVT program), for competitive grants for air quality
improvement projects related to fuel and vehicle
technologies (Air Quality Improvement (AQI) Program), and
the passenger vehicle car scrap program.
c) The local surcharge program, known as the AB 923
program, set to expire January 1, 2015, on vehicle
registration fees to fund local vehicle emissions reduction
projects.
4)Requires the CEC and the Air Resources Board (ARB), by
November 1, 2015, and every two years thereafter as part of
the Integrated Energy Policy Report (IEPR), to report on the
status of the state's alternative transportation fuels use.
The bill also requires ARB and CEC, by November 1, 2014, to
update the economic analysis used in developing ARB's
regulations to include a range of petroleum and alternative
fuel prices to more accurately assess the future costs of
petroleum-based fuels and alternative fuels.
FISCAL EFFECT
1)Annual fee revenue, ranging from $48 million to $60 million,
from the tire fee extension, 57% of which (roughly $27 million
to $34 million) goes to the Department of Resources Recycling
and Recovery (Calrecycle) to fund waste tire management and
43% of which (roughly $21 million to $26 million) goes to ARB
to fund the Carl Moyer Program (special funds.) (Absent this
bill, the tire fees drops, as of January 1, 2015, from $1.75
per tire to $0.75 per tire, all of which will go to Calrecycle
to fund waste tire management.)
2)Annual revenue of approximately $180 million from extension of
various vehicle, vessel, and other air quality-related
surcharges to fund AB 118 programs, as follows: approximately
$105 million for the ARFVT program, administered by CEC,
approximately $45 million for the AQI Program, administered by
ARB, and approximately $30 million for the passenger vehicle
car scrap program, administered by the Bureau of Automotive
Repair (BAR) (special funds.)
3)Annual local revenue, of approximately $50 million, from
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extension of local surcharge on vehicle registration fees to
fund local vehicle emissions reduction projects (various local
funds).
4)Annual redirection of $20 million from the ARFVT Fund during
each fiscal year 2013-14 through 2015-16, and up to that
amount each fiscal year thereafter, away from projects for the
development and commercialization of nonpetroleum fuels and to
projects for the construction and operation of a hydrogen
fueling network.
5)Ongoing costs in the hundreds of thousands of dollars to ARB,
CEC and BAR to continue to administer various air quality and
alternative fuel programs (special funds). These costs will
be fully covered by the fee extensions authorized by this
bill.
6)Ongoing costs in the hundreds of thousands of dollars to ARB
and CEC to track and periodically report on alternative-fueled
vehicle sales and progress in establishing a hydrogen fueling
network, to evaluate alternative fuels use and include such
information in the IEPR, and to update the economic analysis
used in developing ARB's regulations (special funds.)
COMMENTS
1)Rationale. The author intends this bill to ensure funding,
currently set to expire, for important programs that seek to
reduce air emissions from existing vehicles and to develop
cleaner alternative vehicle fuels, and the infrastructure
needed to support their deployment.
2)Background. The state has several distinct programs that seek
to address air pollution caused by existing vehicles and to
develop cleaner alternative vehicle fuels for widespread use.
These programs include:
a) The Carl Moyer Program , administered by ARB, which
provides grants to fund the incremental cost of
cleaner-than-required heavy-duty engines. Carl Moyer has
funded the incremental cost of a diverse range of project
types, including purchase of new alternative-fuel
heavy-duty vehicles (primarily transit buses and trash
trucks) and engine replacements or agricultural irrigation
pumps, construction equipment, and marine vessels.
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According to ARB, these projects have reduced smog-forming
nitrogen oxide (NOx) emissions by over 18 tons per day and
toxic diesel particulate matter (PM) emissions by almost 1
ton per day, with a cost-effectiveness of about $2,600 per
ton of NOx reduced. Funding for Carl Moyer is conditioned
upon a cost-effectiveness threshold.
The Moyer Program has received funding from a variety of
sources, including bond funds, and currently receives
dedicated funding from a $0.75 charge on the sale of each
new tire, which expires January 1, 2015. The Moyer Program
was modified in 2004 by AB 923 (Firebaugh and Pavley,
Chapter 707), which allowed local air districts to levy a
$2 vehicle registration surcharge to fund local Moyer-like
projects.
b) AB 118 Programs , created in 2008 by Chapter 750 (N��ez),
temporarily raised various vehicle and vessel registration
fees and smog abatement fees. The statute created three
new accounts into which the resulting revenue are to be
placed in order to pay for new programs, as follows:
i) Alternative and Renewable Fuel and Vehicle
Technology Fund . With estimated annual revenues of about
$105 million, this fund is to provide resources to CEC
for financial awards to further the development and
commercialization of technologies for renewable and
nonpetroleum fuels that help to achieve the state's
climate change goals.
ii) Air Quality Improvement Fund . Bringing in about $45
million each year, the AQI Fund is to provide resources
for ARB to award competitive grants for air quality
improvement projects related to fuel and vehicle
technologies.
iii) Enhanced Fleet Modernization Subaccount . With
annual revenues of about $30 million, this subaccount of
the High Polluter Removal and Repair Account are to be
used by the BAR, in consultation with ARB, to provide
financial compensation for the retirement of
high-polluting California vehicles.
The state has also supported, with limited success,
construction of publicly accessible hydrogen fueling stations.
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Continuing this effort, ARB, in early 2012, developed an
amendment to its Clean Fuels Outlet regulation that would
require the state's major refiners and importers of petroleum
to construct and operate publicly accessible hydrogen fueling
stations. ARB has yet to formally implement the proposed
amendment, which is strongly opposed by the petroleum
industry.
3)Support. This bill is supported by the Western States
Petroleum Association (WSPA), local air districts,
environmental organizations, ARB, CEC and others.
4)Opposition. This bill is opposed by the New Car Dealers
Association, which objects to the continuation of fees on new
car sales.
Analysis Prepared by : Jay Dickenson / APPR. / (916) 319-2081