BILL ANALYSIS Ó
SB 1275
SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
Senator Jerry Hill, Chair
2013-2014 Regular Session
BILL NO: SB 1275
AUTHOR: De León
AMENDED: April 21, 2014
FISCAL: Yes HEARING DATE: April 30, 2014
URGENCY: No CONSULTANT: Rebecca Newhouse
SUBJECT : VEHICLE EMISSIONS REDUCTIONS
SUMMARY :
Existing law :
1) Under the California Alternative and Renewable Fuel,
Vehicle Technology, Clean Air, and Carbon Reduction Act of
2007 (Health and Safety Code (HSC) §43865 et seq.),
requires the State Energy Resources Conservation and
Development Commission (commonly referred to as the
California Energy Commission) (CEC) to implement the
Alternative and Renewable Fuels and Vehicle Technology
Program (ARFVTP) to provide funding measures to specified
entities to develop and deploy technologies and alternative
and renewable fuels in the marketplace to help attain the
state's climate change policies.
2) Creates the Air Quality Improvement Program (AQIP), to be
administered by the California Air Resources Board (ARB) in
consultation with local air districts, to fund air quality
improvement projects (HSC §44274).
3) Creates the Enhanced Fleet Modernization Subaccount to
implement an Enhanced Fleet Modernization Program (EFMP)
developed by ARB, in consultation with the Bureau of
Automotive Repair, to commence on January 1, 2010, that
allows for the voluntary retirement of high polluting
passenger vehicles and light-duty and medium-duty trucks
(HSC §44125).
4) Establishes certain vehicle and vessel related surcharges
and fees, until January 1, 2016, including an $8 fee
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increase in the smog abatement, a $3 fee increase in the
annual vehicle registration fee, a $5 fee increase for
special identification plates and a $10-20 fee increase for
vessel registration, to fund the AQIP, ARFVTP and EFMP
programs, among others. (HSC §44060.5 and Vehicle Code
§§9250.1, 9261.1, & 9853.6).
This bill :
1) Requires ARB to expand EFMP to provide for public
transportation and car-sharing vouchers as an alternative
to vehicle replacement vouchers.
2) Establishes the Charge Ahead California Initiative
(Initiative), to be administered by ARB in consultation
with the CEC, local air pollution control districts and air
quality management districts, and public stakeholders.
3) Establishes that the goal of the Initiative is to place in
service at least one million zero-emission and near-zero
emission vehicles by January 1, 2023, to create a
self-sustaining zero-emission and near-zero emission
vehicle industry, and to increase access of those vehicles
to disadvantaged communities and promote environmental
benefits for those communities.
4) Pursuant to this Initiative, this bill requires ARB to
adopt a nine-year plan to meet the goals of the Initiative,
commencing in 2016-17, that establishes an estimate for
total funding necessary for programs and projects
including, but not limited to, the following:
a) California Vehicle Rebate Program (CVRP);
b) Hybrid and Zero Emission Vehicle Incentive Program
(HVIP);
c) AB 118 Advanced Technology Demonstration Projects;
d) Zero emission vehicle (ZEV) and near-ZEV fueling
infrastructure projects eligible under ARFVTP;
e) Light-duty, medium-duty, and heavy-duty ZEV and
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near-ZEV deployment projects eligible under ARFVTP;
f) Medium-duty and heavy-duty ZEV and near-ZEV
technology demonstration projects eligible under ARFVTP;
g) Pre-commercial demonstration projects of advanced
freight and transit technology to move cargo and
passengers in the state; and
h) Programs adopted pursuant to this bill to benefit
disadvantaged communities.
5) Requires ARB to adopt revisions to CVRP criteria and
guidelines, by June 30, 2015, to phase down rebate levels
in multiyear increments, and expand access and eligibility
to low- and moderate-income individual.
6) Requires ARB to adopt revisions to HVIP criteria and
guidelines, by June 30, 2015, to ensure program eligibility
for a truck or bus retrofitted or remanufactured to be a
ZEV or near-ZEV.
7) Requires ARB to establish programs to increase access to,
and direct benefits of, electric transportation for
disadvantaged and low- and moderate-income communities,
including, but not limited to, loan or loss reserve
financing, car sharing programs and charging infrastructure
in multiunit dwellings in disadvantaged communities.
8) Requires the above programs to provide outreach to
disadvantaged and low- and moderate-income communities.
COMMENTS :
1) Purpose of Bill . According to the author, this bill
supports the deployment of electric vehicles in California
and ensures that California's clean vehicles incentive
funding policies increase access to electric vehicles for
low- and moderate-income earners.
2) Background .
a) AB 118 (Núñez), Chapter 750, Statutes of 2007,
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created the ARFVT program, the AQIP, and the EFMP. AB
118 provides, upon appropriation by the Legislature,
approximately $180 million annually until 2023 for these
programs. These funds primarily come from additional
fees on vehicle registrations and vessel registrations.
Enhanced Fleet Modernization Program (EFMP): EFMP
provides for the voluntary retirement of passenger
vehicles and light- and medium-duty trucks that are high
polluters. EFMP has a statewide component and a local
component.
Under the statewide component, ARB administers a
program, in consultation with the Bureau of Automotive
Repair, to retire high-polluting vehicles. Under this
program, EFMP offers a $1,500 voucher to low-income
vehicle owners (household income at or below 225% of
federal poverty level), or a $1,000 voucher to all other
vehicle owners, to retire a high-polluting vehicle.
EFMP retired approximately 25,000 high-polluting
vehicles in 2012-13.
Under the local component, ARB administers a program,
authorized in the San Joaquin Valley Air Pollution
Control District and the South Coast Air Quality
Management District, to replace high-polluting vehicles.
In addition to the retirement vouchers described above,
the local EFMP program offers:
A $2,500 voucher to low-income vehicle
owners (household income at or below 225% of federal
poverty level) to replace a high-polluting vehicle,
by either purchasing a vehicle eight years old or
newer, or using the voucher toward public transit.
A $2,000 voucher to all other vehicle owners
to replace a high-polluting vehicle by either
purchasing a vehicle four years old or newer, or
using the voucher toward public transit.
EFMP has issued less than two dozen replacement vouchers
since the program's inception in 2010, all in the South
Coast Air Quality Management District.
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Air Quality Improvement Program: The Air Quality
Improvement Program (AQIP), administered by ARB in
consultation with local air districts, provides
competitive grants to fund projects to improve the air
quality impacts of alternative fuels and vehicles,
vessels, and equipment technologies. Pursuant to their
authority under AQIP, the ARB has developed the following
programs:
The Clean Vehicle Rebate Program (CVRP),
administered by ARB's contractor, the California
Center for Sustainable Energy, provides rebates of
up to $2,500 for purchasing or leasing a new
zero-emission vehicle (ZEV) or plug-in hybrid
electric vehicle.
The Hybrid and Zero-Emission Truck and Bus
Voucher Incentive Project (HVIP), administered by
ARB and its contractor CALSTART, provides vouchers
to California fleet owners to help purchase hybrid
and zero-emission trucks and buses.
AB 118 Advanced Technology Demonstration
Projects, administered by ARB, provides grants to
local air districts and other public agencies to
fund advanced-technology vehicle, equipment, or
emission-control projects that are not yet
commercialized.
The On-Road Heavy-Duty Vehicle Air Quality
Loan Program (Truck Loan Assistance Program),
administered by ARB and the California Pollution
Control Financing Authority, provides loans to
fleets to help implement ARB emissions reduction
regulations related to trucks, buses, and heavy-duty
(tractor-trailer) vehicles.
Alternative and Renewable Fuel and Vehicle Technology
Program: The Alternative and Renewable Fuel and Vehicle
Technology Program (ARFVTP), administered by the CEC
provides funding for development and deployment of
alternative and renewable fuels and advanced
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transportation technologies to help attain the state's
climate change goals. Eligible projects include, for
example, development, improvement, and production of
alternative and renewable low-carbon fuels; improvement
of light-, medium-, and heavy-duty vehicle technologies;
and expansion of infrastructure connected with existing
fleets, public transit, and transportation corridors.
1) EFMP regulations are a work in progress . SB 459 (Pavley)
of 2013 (see "related legislation" below) requires ARB, in
consultation with the Bureau of Automotive Repair (BAR), to
update EFMP regulations by June 30, 2015. SB 459 requires
the guidelines to include a variety of new policies,
including allowing for retirement and replacement vouchers
of larger amounts, focusing the program more heavily on
lower-income owners, and streamlining program requirements
to facilitate participation. ARB has been soliciting
stakeholder input as it drafts the revised regulations. In
March, ARB issued a white paper describing the proposed
revisions; ARB is scheduled to vote on the final revised
regulations in June of this year.
2) AQIP also being revamped . AB 8 (Perea) Chapter 401,
Statutes of 2013, requires ARB and CEC to apply a
benefit-cost score, as specified, when determining projects
that will be awarded funds under ARFVTP and AQIP. In
addition, board members directed ARB staff to develop a
long-term vision for AQIP. ARB staff have been conducting
public workshops and soliciting stakeholder input. ARB
will release draft recommendations to the public in May
2014; ARB will vote on the recommendations in June 2014.
The CEC is similarly revising the solicitation process
under ARFVTP.
3) CVRP Survey data. The Nissan Leaf, at 7,924 rebates, is the
number one recipient of rebates through the CVRP program
administered by the ARB under AQIP, followed by the Chevy
Volt, Toyota Prius Plug-in, and the Tesla Model S. The
current net price for the Leaf (after $7,500 federal tax
credit and $2,500 CVRP rebate) can be as low as $20,000,
the Volt and Prius start at about $33,000, and the Tesla
Model S ranges in price from $70,000 to over $100,000.
Survey data indicates that the typical CVRP recipient earns
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over $150,000/year, drives 15-30 miles/day and owns at
least one other non-EV car. According to the Department of
Motor Vehicles, the smog abatement fee that funds CVRP is
not collected from owners of EVs.
Among other revisions to the AB 118 programs, including
CVRP, SB 1275 requires that ARB revise the CVRP to ensure
the program better serves persons of low- and
moderate-incomes.
4) Funding . The AB 118 programs, including AQIP administered
by the ARB and the ARFVT program administered by CEC are
paid for by various vehicle-related fees. SB 1275 does not
specify that cap-and-trade auction revenue will be a source
of additional funding for the program, however, the
legislative findings of the bill state that it is the
intent of the Legislature that the act be consistent with
the appropriations processes and criteria for using money
from the cap-and-trade fund. Monies from the cap-and-trade
fund are required to be used to facilitate the achievement
of greenhouse gas reductions, and 25% of those funds must
be used to benefit, and 10% must be used within,
disadvantaged communities.
The first three-year investment plan for cap-and-trade auction
proceeds, submitted by Department of Finance, in
consultation with ARB and other state agencies in May of
last year, identified clean transportation as one of the
key sectors that provide the best opportunities for
achieving the legislative goals and supporting the purposes
of AB 32.
5) Governor's Budget Proposal . The Governor's 2014-15 budget
proposal appropriates $850 million dollars in cap-and-trade
revenue to various state entities. Specifically, the
proposal allocates $200 million for the ARB to accelerate
the transition to low carbon freight and passenger
transportation, with a priority for disadvantaged
communities. The proposal states that this investment will
support the state's clean air and climate change goals, as
well as the Administration's goal to deploy 1.5 million
zero-emission vehicles in California by 2025 (Executive
Order B-16-2012).
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6) Suggested Amendment .
a) This bill requires ARB to adopt a nine-year plan to
meet the goals of the initiative, and that establishes
an estimate for total necessary funding. This plan
should be updated regularly to ensure that the plan is
current on market factors for emerging technologies. For
example, perhaps incentives are no longer needed for a
technology that has become cheaper, or perhaps a new
technology has emerged that ARB would like to pursue.
An amendment is needed to require this plan be updated
at a minimum of every three years.
b) The bill references a "nine-year plan" to be adopted
by June 30, 2015, and commencing in the 2016-17 fiscal
year to meet the goals of the initiative by January 1,
2023. Since the time frame from plan adoption or program
commencement is less than nine years in both cases, an
amendment should strike the "nine-year" reference.
c) The bill requires the nine-year funding plan to meet
the goals of the Charge Ahead California initiative.
For clarity, an amendment is needed to provide a
reference to those specific goals, including the goal of
achieving one million zero-emission and near-zero
emission vehicles by January 1, 2023.
7) Related Legislation .
a) SB 359 (Corbett) Chapter 415, Statutes of 2013,
provides $48 million in additional funding in the
current fiscal year to ARB to support CVRP, HVIP, the
Truck Loan Assistance Program, and EFMP.
b) SB 459 (Pavley) Chapter 437, Statutes of 2013,
requires ARB, in consultation with Bureau of Automotive
Repair (BAR), to update the EFMP guidelines as specified
by June 30, 2015.
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c) AB 8 (Perea) Chapter 401, Statutes of 2013, extends
until January 1, 2024, extra fees on vehicle
registrations, boat registrations, and tire sales in
order to fund AB 118 programs.
d) SB 913 (DeSaulnier) of 2014, requires ARB and BAR to
cooperate in issuing a specified number of vouchers for
high-polluting vehicle retirement and vehicle
replacement programs. SB 916 is currently in the Senate
Appropriations Committee.
e) SB 1204 (Lara) of 2014, creates a Clean Truck, Bus,
and Off-Road Vehicle and Equipment Technology Program to
fund development, demonstration, and deployment of zero-
and near-zero-emission medium and heavy-duty vehicle
technologies, to be funded through cap-and-trade auction
proceeds. SB 1204 will be heard in the Senate
Environmental Quality Committee on April 30th.
SOURCE : Charge Ahead Campaign; composed of:
Coalition for Clean Air
Communities for a Better Environment
Environment California
The Greenlining Institute
Natural Resources Defense Council
SUPPORT : Asian Pacific Environmental Network
CALSTART
California League of Conservation Voters
California Solar Energy Industry Association
Catholic Charities, Diocese of Stockton
Physicians for Social Responsibility, LA
Moms Clean Air Force, California
Sierra Club California
Solar Energy Industries Association
The Black Business Association
Transform
Vote Solar
West Angeles Community Development Corporation
OPPOSITION : None on file
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