BILL ANALYSIS �
SB 1204
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Date of Hearing: August 6, 2014
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
SB 1204 (Lara and Pavley) - As Amended: June 18, 2014
Policy Committee:
TransportationVote:12-2
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill creates the California Clean Truck, Bus, and Off-Road
Vehicle and Equipment Technology Program (program) to be
administered by the Air Resources Board (ARB) in conjunction
with the California Energy Commission (CEC). Specifically, this
bill:
1)Requires ARB, in consultation with CEC, to develop guidance
through the existing AB 118 Air Quality Improvement Program
(AQIP) funding plan (N��ez, Statutes of 2007) for the
implementation of the program consistent with the AB 32
California Global Warming Solutions Act (N��ez, Statutes of
2006).
2)Requires ARB and CEC to create a multi-year framework and plan
for the program.
3)Requires the program, from moneys appropriated from AB 32
cap-and-trade auction revenues, to fund zero and near-zero
emission truck, bus and off-road vehicle equipment and
technology development, demonstration, pre-commercial and
early deployment programs. Allows the funding of non-vehicle
based projects that support greater freight efficiency and
greenhouse gas reductions (GHG) as specified.
4)Prohibits the funding of projects required by state or federal
law, rules or regulations or any other legally binding
agreements. Prioritizes projects in disadvantaged communities.
5)Defines zero-emission and near-zero emission as vehicles,
fuels, and related technologies that have lower GHG emissions
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and improved air quality when compared with conventional and
fully commercialized alternatives as determined by ARB and
CEC.
FISCAL EFFECT
1)Unknown ongoing cost pressures to fund program expenditures
and grants, likely in the tens of millions of dollars annually
Greenhouse Gas Reduction Fund (GGRF).
2)Increased annual costs to ARB, from the GGRF, of approximately
$450,000 to develop eligibility criteria for zero emission bus
and truck retrofits and remanufactures.
3)Increased annual costs to ARB, from the GGRF, of approximately
$200,000 to augment the AQIP program plan and guidelines to
provide guidance to the new program.
4)Increased annual costs to ARB, from the GGRF, to develop and
implement non-vehicle projects that support greater freight
efficiency and GHG reductions.
5)One-time costs to the CEC, from the GGRF, to assist in the
development of a multiyear framework and plan. Ongoing
absorbable costs.
COMMENTS
1)Purpose. Cars and Trucks are responsible for nearly 40% of
GHG emissions in the state. According to the authors, while
programs at ARB and CEC address both light-and heavy-duty
vehicle sectors, additional focused efforts are necessary for
medium and heavy-duty zero and near-zero emission vehicles and
equipment to improve market penetration and improve
affordability.
This bill creates a separate and distinct program focused on
developing and deploying technologies to enable medium and
heavy-duty fleet turnovers, particularly in disadvantaged
communities.
2)Background. AB 32 requires ARB to adopt GHG emission
reduction measures to ensure that statewide emissions are
reduced to 1990 levels by 2020. As part of the implementation
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of AB 32 market-based compliance measures, ARB adopted a
cap-and-trade program that caps the allowable statewide
emissions and provides for the auctioning of emission credits,
the proceeds of which are quarterly deposited into the GGRF.
SB 535 (De Le�n), chapter 830, statutes of 2012, requires no
less than 10% of cap-and-trade revenues fund projects located
within disadvantaged communities, and that 25% of available
revenues fund projects that benefit those communities.
3)Existing Programs. AB 118 established additional surcharges
and fees on vehicle and vessel registrations and certain
identification plates, and increased the smog abatement fee as
funding sources for several new air quality and emission
reduction programs. Specifically, AB 118 established the Air
Quality Improvement Program (AQIP), to provide, among other
things, vouchers for the purchase of hybrid and zero-emission
trucks and buses and grants for advanced technology vehicle,
equipment, or emission-control projects that are not yet
commercialized.
AB 118 also established the Alternative and Renewable Fuel and
Vehicle Technology Program (ARFVTP), administered by CEC, to
provide funding for development and deployment of alternative
and renewable fuels and advanced transportation technologies
to help attain the state's climate change goals. Eligible
projects include, among other things, improvement of light,
medium, and heavy-duty vehicle technologies, and retrofitting
medium and heavy-duty on-road and off-road vehicle fleets.
The fees and surcharges established by AB 118 provide
approximately $180 million annually for these programs.
Last year, the AB 118 and Carl Moyer programs were extended by
AB 8 (Perea).
4)Cap-and Trade Revenues. As part of the recently passed
2014-15 Budget, SB 862 (Budget and Fiscal Review) allocates
cap-and-trade revenues for the 2014-15 fiscal year and
establishes a long-term plan for the allocation of
cap-and-trade revenues beginning in fiscal year 2015-16.
SB 862 continuously appropriates 35% of cap-and-trade funds
for investments in transit, affordable housing, and
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sustainable communities. Twenty-five percent of the revenues
are continuously appropriated to continue the construction of
high-speed rail. The remaining 40% will be appropriated
annually by the Legislature for investments in programs that
include low-carbon transportation, energy efficiency and
renewable energy, and natural resources and waste diversion.
The total amount appropriated under SB 862 is $872 million.
Funding for this bill could be appropriated from the 40% of
cap-and-trade revenues that will be annually appropriated by
the Legislature in subsequent budgets.
5)Related Legislation. SB 1275 (De Le�n) Establishes the Clean
Charge Ahead California Initiative to provide a variety of
incentives to increase the availability of zero-emission and
near-zero emission vehicles, particularly in disadvantaged and
low-and moderate-income communities. SB 1275 narrowly defines
zero-emission and near-zero emission vehicles as hybrid
electric, plug-in hybrid, battery electric or hydrogen fuel
cell. SB 1275 will be heard in this committee August 6, 2014.
Analysis Prepared by : Jennifer Galehouse / APPR. / (916)
319-2081