BILL ANALYSIS Ó
SB 1275
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Date of Hearing: August 6, 2014
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
SB 1275 (De Leon) - As Amended: July 1, 2014
Policy Committee: Assembly
Transportation Vote: 10-2
Natural Resources 6-3
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill establishes the Charge Ahead California Initiative
(Initiative) to provide incentives to increase the availability
of zero-emission (ZEV) and near-zero-emission (NZEV) vehicles,
particularly in disadvantaged and low-and-moderate-income
communities. Specifically, this bill:
1)Establishes the Initiative, requires it to be administered by
ARB, and sets forth the following goals:
a) Place in service at least one million ZEVs and NZEVs by
January 1, 2023. Establish a self-sustaining ZEV and NZEV
industry in which the vehicles are a viable mainstream
option for individual vehicle purchasers, businesses, and
public fleets.
b) Increase access for disadvantaged and low- and
moderate-income communities to ZEVs and NZEVs. Increase the
placement of those vehicles in those communities to enhance
the air quality, lower GHGs, and promote overall benefits
for those communities.
2)Requires ARB, in consultation with the CEC, air districts, and
the public, to:
a) Adopt a plan by June 30, 2015 to meet the Initiative
goals commencing in the 2016-17 fiscal year, including
establishing an estimate of the total funding necessary for
programs and projects, including the Clean Vehicle Rebate
Project (CVRP), the Hybrid and Zero Emissions Truck and Bus
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Voucher Incentive Program (HVIP), and other specified AB
118 programs. Requires the plan to be updated every three
years through January 1, 2023.
b) Adopt revisions to CVRP by June 30, 2015 to ensure the
program is effective, better serves low and moderate income
individuals, complements the AB 118 Enhanced Fleet
Modernization Program (EFMP), and considers other methods
to increase participation rates.
c) Adopt revisions to HVIP by June 30, 2015 to ensure
eligibility for a truck or bus retrofitted or
remanufactured to be a ZEV or NZEV.
d) Establish programs that further increase access to and
direct benefits for disadvantaged and low- and
moderate-income communities from electric transportation,
as specified.
3)Authorizes the use of EFMP funds for "mobility options" (i.e.,
car sharing and public transit vouchers) as an alternative to
vehicle replacement.
4)Defines ZEV as a light-duty, medium-duty, heavy-duty, or bus
battery electric vehicle or hydrogen fuel cell vehicle.
Defines NZEV as light-duty plug-in hybrid electric vehicle or
a medium-duty, heavy-duty, or bus hybrid electric vehicle or
plug-in hybrid electric vehicle.
FISCAL EFFECT
1)Unknown ongoing cost pressures to fund program expenditures
and grants, likely in the tens of millions of dollars annually
from the Greenhouse Gas Reduction Fund (GGRF).
2)Increased annual costs to ARB, from the GGRF, of approximately
$600,000 in 2014-15, and ongoing costs of $450,000 to adopt
and administer components of the specified funding plan.
3)Increased annual costs to ARB, from the GGRF of approximately
$500,000 to develop and administer the three new programs in
the bill: the loan loss credit reserve enhancement program,
the car sharing program, and the charging infrastructure
deployment.
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4)Increased annual costs to ARB, from the GGRF, beginning in
2016-17, to develop and implement certification programs for
zero emission and hybrid bus and truck retrofits and
remanufactures.
5)Increased annual costs to ARB, from the GGRF, of approximately
$180,000 to oversee the development of the funding plan and
new disadvantaged community mobility programs.
COMMENTS
1)Purpose. According to the author, although California leads
the nation in electric vehicle sales, the state has a long way
to go to transition our vehicle fleet to zero and near-zero
emission vehicles that will help us achieve our climate goals.
Clean vehicles are also critically important to our efforts
to improve localized air quality in communities that are
heavily polluted. This bill is an effort to an effort to
support the deployment of 1 million electric vehicles and make
them more accessible to low- and moderate- income earners.
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
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 León), 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
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commercialized. Two of AQUIP's projects, CVRP and HVIP,
represent the programs largest funding commitments to date.
Since 2009, ARB has spent approximately $205 million on AQIP
programs, with $125 million going to CVRP and $50 million to
HVIP.
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.
The last program established by AB 118, the EFMP supplements
the Bureau of Automotive Repair's vehicle retirement program
known as the Consumer Assistance Program. Through joint
administration by local air districts and BAR, eligible
low-income consumers whose vehicles fail smog check tests may
receive financial assistance to voluntarily retire their
vehicles and/or replace them with vehicles meeting certain
emission and model-year requirements. During fiscal year
2011-2012, approximately $34 million of EFMP funds were
expended for the retirement of 25,741 vehicles.
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
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.
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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 1204 (Lara and Pavley) creates a new
program to be administered by ARB and funded with cap and
trade revenues to develop zero- and near-zero-emission truck,
bus, and off-road vehicle and equipment technologies and
related projects. SB 1204 will be heard in this committee
August 6, 2014.
Analysis Prepared by : Jennifer Galehouse / APPR. / (916)
319-2081