The California Pollution Control Financing Authority Act establishes the California Pollution Control Financing Authority, with specified powers and duties, and authorizes the authority to approve financing for projects or pollution control facilities to prevent or reduce environmental pollution. The authority oversees the Capital Access Loan Program for small businesses to assist small businesses in financing the costs of complying with environmental mandates and the remediation of contamination on their properties

This bill would expand the Capital Access Loan Program to include the purchase or lease of an electric vehicle by low- and middle-income consumers and families, as specified.

The California Global Warming Solutions Act of 2006 designates the State Air Resources Board as the state agency charged with monitoring and regulating sources of emissions of greenhouse gases. The act authorizes the state board to include the use of market-based compliance mechanisms. Existing law requires all moneys, except for fines and penalties, collected by the state board as part of a market-based compliance mechanism to be deposited in the Greenhouse Gas Reduction Fund and to be available upon appropriation by the Legislature.

The California Clean Truck, Bus, and Off-Road Vehicle and Equipment Technology Program, upon appropriation from the Greenhouse Gas Reduction Fund, funds zero- and near-zero-emission truck, bus, and off-road vehicle and equipment technologies and related projects, as specified, with priority given to certain projects, including projects that benefit disadvantaged communities.

This bill would make technical, nonsubstantive changes to these provisions.

Date of Hearing: May 17, 2017

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez Fletcher, Chair

ABPCA Bill Id:AB 1259

Author:(Calderon) – As Amended Ver:April 27, 2017

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill expands the Capital Access Loan Program (CALP), overseen by the California Pollution Control Financing Authority (Authority), to include a financing program for electric vehicle (EV) purchases by low- and middle-income consumers and families. Specifically, this bill:

1. Requires the Authority to include in the CALP a component dedicated to EVs that is limited to low-and middle-income consumers and families.
2. Requires, for the EV component of the CALP, that the Air Resources Board (ARB) act as an independent contractor to establish standards and program criteria consistent the California Global Warming Solutions Act of 2006, established pursuant to AB 32 (Núñez), Chapter 488, Statutes of 2006, goals as well as other clean air statutes.
3. Requires that the EV component of the CALP provide for multiple sources of funding including, but not necessarily limited to the General Fund and the Greenhouse Gas Reduction Fund (GGRF) monies.
4. Requires that the newly created EV component of the CALP provide for combined loans, including but not to limited to, multiple signatories for the same EV purchased.
5. Requires that the EV component of the CALP be coordinated with other state and federal rebates, tax credits, and incentives available toward the purchase of qualifying EVs and that they be counted as a down payment or cash.

FISCAL EFFECT:

Cost pressures, likely in the tens of millions of dollars, to hundreds of millions of dollars to fund the program. The amount of administrative costs will be based on the funding source and amount.

COMMENTS:

1. Background and Purpose. The CALP was created in 1994 to encourage banks and other financial institutions to make loans to small businesses experiencing difficulties obtaining financing. Later CALP was expanded to include specialty programs targeted toward helping businesses obtain financing for the installation of EV charging infrastructure, complying with federal Americans with Disabilities Act requirements, completing seismic retrofit work, as well as retrofitting high-polluting diesel trucks. This bill would create a new program within CALP to include a financing program to help low- and middle-income individuals and families finance the purchase of EVs. By establishing this program in the CALP, the author seeks to make EVs more broadly available to low- and middle-income individuals who are currently precluded from buying or leasing these vehicles because they are unable to obtain financing. By paving the way for these individuals to purchase and use EVs, the program would also serve to help the state achieve its emissions reduction goals.
2. Related Legislation. There are currently ten bills pending before this Committee, including this bill, to provide clean vehicle incentives as follows:

AB 33 (Quirk) requires the California Public Utilities Commission (PUC) by March 30, 2018, to authorize IOUs to offer programs and investments in residential electric vehicle service equipment. AB 33 requires rates to be given at a grid-integrated rate levels.

AB 188 (Salas) requires ARB to update the Enhanced Fleet Modernization Program (EFMP) guidelines to allow participants to replace their vehicle with light-duty trucks so long as they are retiring a pickup truck and the replacement truck meets the fuel efficiency standards for minivans.

AB 193 (Cervantes) establishes a Clean Vehicle Rebate Program (CVRP) program for used vehicles. Incentives may also be used for the replacement or refurbishment of a battery or an extended service warranty to cover repair costs associated with “unique problems” in eligible used vehicles. Eligibility is restricted to low- and moderate-income customers in disadvantaged communities and who live in either a nonattainment air basin or has received minimal amounts from the CVRP program in the past.

AB 544 (Bloom) creates a new program (upon expiration of the existing program) to allow super ultra-low emission vehicles and transitional zero-emission vehicles access to high-occupancy vehicle lanes for an approximately four-year period, regardless of vehicle occupancy level.

AB 964 (Gomez) creates the California Affordable Clean Vehicle Program (loan guarantee program) at the California Pollution Control Financing Authority to assist low-income or high risk individuals in the purchase of low-emission vehicles.

AB 1081 (Burke) provides a sales tax exemption for the value of a vehicle traded in to purchase a clean vehicle.

AB 1082 (Burke) requires investor-owned utilities (IOUs) to develop a program for the installation of vehicle charging stations at school facilities for the use by faculty, students, and parents. Electricity will be provided at time-of-use rates.

AB 1083 (Burke) requires investor-owned utilities (IOUs) to create a charging network at all state parks and beaches by July 31, 2018. Electricity will be provided at time-of-use rates.

AB 1259 (Calderon) creates a Capital Access Loan Program at the Pollution Control Financing Authority to assist low- and middle-income families with the purchase or lease of electric vehicles.

AB 1341 (Calderon) excludes up to $40,000 from state sales tax on the purchase of used near-zero emission or zero-emission vehicles for low-income purchasers.  Allows a personal income tax credit (ranging $1,500-$5,000) for the purchase of certain plug-in hybrid vehicles and all battery electric and hydrogen fuel cell vehicles, with an additional $500 credit allowed for low-income purchasers.  The tax credit may be assigned to a financing entity.

Analysis Prepared by: Jennifer Galehouse / APPR. / (916) 319-2081

Date of Hearing: April 24, 2017

ASSEMBLY COMMITTEE ON NATURAL RESOURCES

Cristina Garcia, Chair

ABPCA Bill Id:AB 1259 (

Author:Calderon) – As Amended Ver:March 30, 2017

SUBJECT: Capital Access Loan Program: electric vehicles

SUMMARY: Expands the Capital Access Loan Program (CALP), overseen by the California Pollution Control Financing Authority (CPCFA), to include a financing program for electric vehicle (EV) purchases by low- and middle-income consumers and families.

EXISTING LAW:

1. Establishes the CPCFA within the Office of the Treasurer to provide low-cost financing to California businesses.
2. Creates CALP to encourage banks and other financial institutions in California to make loans to small businesses that have difficulty obtaining financing by providing specialty programs targeted at helping businesses install EV charging stations, conduct seismic retrofits, and comply with the federal Americans with Disabilities Act.
3. Requires the Air Resources Board (ARB), pursuant to California Global Warming Solutions Act of 2006 [AB 32 (Nunez), Chapter 488, Statutes of 2006], to adopt a statewide Greenhouse Gases (GHG) emissions limit equivalent to 1990 levels by 2020 and adopt regulations to achieve maximum technologically feasible and cost-effective GHG emission reductions. AB 32 authorizes ARB to permit the use of market-based compliance mechanisms to comply with GHG reduction regulations once specified conditions are met.
   
4. Establishes the GGRF and requires all moneys, except for fines and penalties, collected by ARB from the auction or sale of allowances pursuant to a market-based compliance mechanism (i.e., the cap-and-trade program adopted by ARB under AB 32) to be deposited in the GGRF and available for appropriation by the Legislature.
5. Establishes the Greenhouse Gas Reduction Fund (GGRF) Investment Plan and Communities Revitalization Act (Act) to set procedures for the investment of GHG allowance auction revenues. Authorizes a range of GHG reduction investments and establishes several policy objectives:
   
   1. Maximize economic, environmental, and public health benefits;
      
   2. Foster job creation;
      
   3. Complement efforts to improve air quality;
      
   4. Direct investment toward the most disadvantaged communities and households in the state;
      
   5. Provide opportunities for businesses, public agencies, nonprofits, and other community institutions to participate in and benefit from statewide efforts to reduce GHG emissions; and,
      
   6. Lessen the impacts and effects of climate change on the state's communities, economy, and environment.
6. Specifies that moneys appropriated from the GGRF through investments may include funding to reduce GHG emissions as follows:
   
   1. Energy efficiency, clean and renewable energy generation, distributed renewable energy generation, transmission and storage, and other related actions;
      
   2. The development of state-of-the-art systems to move goods and freight, advanced technology vehicles and vehicle infrastructure, advanced biofuels, and low-carbon and efficient public transportation;
      
   3. Water use and water supply, land and natural resource conservation and management, forestry, and sustainable agriculture projects;
      
   4. Strategic planning and development of sustainable infrastructure projects;
      
   5. In-state diversion of municipal solid waste from disposal through waste reduction, diversion, and reuse;
      
   6. Investments in programs implemented by local and regional agencies, local and regional collaboratives, and nonprofit organizations coordinating with local governments; and,
      
   7. Funding research, development, and deployment of innovative technologies, measures, and practices related to programs and projects funded pursuant to the Act.
      
7. Requires the investment plan to allocate:
   
   1. A minimum of 25% of the available moneys in the GGRF to projects located within, and that provide benefits to individuals living in, disadvantaged communities;
      
   2. A minimum of 5% of the available moneys in the GGRF to projects that benefit low-income households or to projects located within, and benefiting individuals living in, low-income communities; and,
      
   3. A minimum of 5% of the available moneys in the GGRF to projects that benefit low-income households that are outside of, but within ½ mile of, disadvantaged communities, or to projects located within the boundaries of, and benefiting individuals living in, low-income communities that are outside of, but within ½ mile of, disadvantaged communities.
8. Establishes the Enhanced Fleet Modernization Program (EFMP), administered by ARB and BAR, to provide for the voluntary retirement of passenger vehicles and light- and medium-duty trucks that are high polluters.
   
9. Defines “electric vehicle” to mean a vehicle that uses a plug-in battery to provide all or part of the motive power of the vehicle, including battery electric, plug-in hybrid electric, or plug-in fuel cell vehicle.
   
10. Establishes the Charge Ahead California Initiative pursuant to SB 1275 (de León), Chapter 530, Statutes of 2014, that, among other things, included the goal of placing at least one million zero-emission vehicles (ZEVs) and near-zero-emission vehicles (NZEVs) into service by January 1, 2023, and increasing access to these vehicles for disadvantaged, low-income, and moderate-income communities and consumers to ZEVs and NZEV vehicles by creating the following programs:
    
    1. EFMP Plus-Up: Provides enhanced monetary EFMP incentives for low-income individuals in disadvantaged communities;
       
    2. Car Sharing and Mobility Options Pilot Project: Provides funding for government entities or non-profit organizations to start or expand car share programs for residents of DACs; and,
       
    3. Financing Assistance Pilot Project: Provides financing assistance to lower-income consumers to buy or lease qualifying clean air vehicles.

THIS BILL:

1. Makes findings and declarations about the benefits of ZEVs and NZEVs and the lack of access to capital at reasonable interest rates that prevents many low- and moderate-income consumers from participating in ZEV and NZEV incentive programs.
   
2. Requires the CPCFA to include in CALP a component dedicated to EVs that is limited to low-and middle-income consumers and families.
   
3. Requires, for the EV component of CALP, that the ARB act as an independent contractor to establish standards and program criteria consistent, AB 32 goals, as well as other clean air statutes.
   
4. Requires that the EV component of CALP provide for multiple sources of funding, including, but not necessarily limited to, the General Fund and the GGRF monies.
   
5. Requires that the newly created EV component of CALP provide for combined loans, including, but not to limited to, multiple signatories for the same EV purchased.
   
6. Requires that the EV component of CALP be coordinated with other state and federal rebates, tax credits, and incentives available toward the purchase of qualifying EVs and that they be counted as a down payment or cash.
   

FISCAL EFFECT: Unknown

COMMENTS:

1. CALP. CALP was created in 1994, and is run by the CPCFA. The program encourages banks and other financial institutions that are domiciled or have a principal office in the State of California to make loans to small businesses that have difficulty obtaining financing. CALP also provides for specialty programs targeted toward creating more charging stations for electric vehicles, helping at-risk small businesses comply with requirements of the federal Americans with Disabilities Act, assisting small businesses and property owners with financing the costs to seismically retrofit existing buildings and homes, and retrofitting polluting diesel trucks.

CALP is a form of loan portfolio insurance that may provide up to 100% coverage on certain loan defaults. Each lender is entirely liable for its loan losses; however, those losses can be reimbursed from each lender’s loan loss reserve account. The loss reserve accounts are built through contributions made by the borrower, lender, and CPCFA. In 2015, CALP recruited 11 new lenders to participate in the various programs, and 50 lenders enrolled loans. CALP lenders enrolled 4,951 loans totaling over $350 million in 2015. Approximately $37 million in premiums were deposited to lender’s loan loss reserve accounts. CPCFA staff processed and approved 116 claims filed by lenders against their loan loss reserve accounts. Approximately $3.3 million was paid from the loss reserve account. SB 837, Chapter 32, Statutes of 2016, a trailer bill last year, authorized CALP to implement a loan loss reserve program to benefit an individual person engaged in an activity that furthers the state’s policy objectives.

1. ARB Financial Assistance Program. SB 1275, also known as the Charge Ahead Initiative, required ARB to create a financing assistance program, similar to what this bill proposes, to help low-income individuals living in disadvantaged communities gain access to ZEVs and NZEVs by providing them with financing needed to purchase these clean vehicles.

As required by the Charge Ahead Initiative, ARB launched a financing assistance pilot in the San Francisco Bay Area in 2016 to serve disadvantaged communities in the San Francisco Bay Area. The pilot program is administered by the Community Housing Development Corporation and offers low-interest loans, price buy down, loan loss reserves, financial education, budget counseling, and personalized financial management to help low-income individual's purchase clean vehicles. The program allows the stacking of other incentives, such as the Clean Vehicle Rebate Project (CVRP), EFMP, and EFMP Plus-up. The price buy down is between $2,500 and $5,000. The pilot has completed 11 loans with an average loan of $7,100. Only one of those 11 loans utilized a loan loss reserve. All 11 vehicles were used vehicles with an average model year of 2011. ARB is in the process of making the pilot program a statewide program that will launch early next year. This bill requires ARB to act as an independent contractor for CALP to establish standards and a loss reserve account and qualified loan criteria for EV financial assistance established by this bill. It is unclear what acting as an independent contractor will mean and whether the component developed by this bill will complement ARB’s existing program. The author and committee may wish to consider amending the bill to be consistent with the Charge Ahead Initiative and require ARB to approve guidelines for the component.

1. EVs. There are currently 16 types of battery electric vehicles and 10 plug-in hybrids eligible for CVRP. According to the CVRP website, almost $400 million in rebates have been provided to approximately 184,569 vehicles. Consumers with household incomes less than or equal to 300% of the federal poverty level are eligible for an increased rebate amount of $4,500. Consumers are eligible for CVRP when they either purchase the eligible vehicle or lease it for a minimum of 30 months. Sixty percent of consumers lease EVs and a lease can be entered into, in some cases, for less than $200 a month. With incentives and discounted or free vehicle charging, leasing an EV can be a very cost effective option for some consumers. However, low- and moderate-income consumers are often not able to secure financing at the same terms or sometime secure it at all. This has created a barrier to achieving the goal of SB 1275 to increase access for disadvantaged, low-income, and moderate-income communities and consumers to ZEVs and NZEVs. The author and committee may wish to consider amending the bill to allow financing help for leases.

Financial assistance offers one way to potentially get low- and moderate-income consumer’s the same lease and loan terms that wealthier consumers qualify for. However, a loan loss reserve may have some unintended consequences. If a lender agrees to the terms to provide loans that they would not normally provide, they must make all available efforts to collect the loan prior to making a claim to the loan loss reserve. EVs depreciate at a far higher rate than other vehicles. Therefore a consumer that is unable to make the payments and subject to collection may be unable to settle the outstanding balance by simply returning or selling the vehicle. This could inadvertently subject them to financial hardship.

This bill has a finding that those who “face financial hardship are better situated to maintain favorable credit history and credit ratings if they have access to payment assistance and loan modification tools and programs.” However, there is no requirement for consumer protection in the component. The author and committee may wish to consider amendments to require consideration of the applicant’s ability to make the payments of the loan and protect consumers from collection that is in excess of the value of the EV.

1. Related Legislation.

AB 33 (Quirk) would require the Public Utilities Commission by March 30, 2018, to authorize investor-owned utilities (IOUs) to offer programs and investments in residential electric vehicle service equipment. AB 33 is set to be heard by the Assembly Communications and Conveyance Committee on April 26, 2017.

AB 188 (Salas) would require ARB to update the EFMP guidelines to allow participants to replace their vehicles with a light-duty truck so long as they are retiring a pickup truck and the replacement truck meets fuel efficiency standard set for minivans. AB 188 is awaiting a hearing in the Assembly Appropriations Committee.

AB 193 (Cervantes) would require ARB to create a program that incentivizes the purchase and use of used clean air vehicles by low- and moderate-income individuals living in areas of the state with poor air quality and where existing clean air vehicle rebate programs have been underutilized. AB 193 is set to be heard by Assembly Transportation Committee on April 24, 2017.

AB 544 (Bloom) would amend the current high occupancy vehicle lane sticker program for EVs. AB 544 is set to be heard by Assembly Transportation Committee on April 24.

AB 615 (Cooper) is an urgency measure that would make permanent the current income restrictions in the CVRP program that were imposed by last year's budget. AB 615 is awaiting a hearing by the Assembly Appropriations Committee.

AB 964 (Gomez) is similar to this bill in that it would create a new program (The California Affordable Clean Vehicle Program) to be administered by the CPCFA, to help low-income and high financial risk individuals buy low-emission vehicles using qualified loans. AB 964 is set to be heard by this committee on April 24.

AB 1081 (Burke) would exempt from state sales tax the value of a vehicle traded in to purchase a cleaner car. AB 1081 is awaiting a hearing by the Assembly Appropriations Committee.

AB 1082 (Burke) would require IOUs to develop a program for the installation of EV charging stations at school facilities for use by faculty, students, and parents with electricity provided at time-of-use rates. AB 1082 is set to be heard by the Assembly Education Committee on April 26.

AB 1083 (Burke) would require IOUs to create a charging network at all state parks and beaches by July 31, 2018 with electricity provided at time-of-use rates. AB 1082 is set to be heard by the Assembly Water, Parks, and Wildlife Committee on April 25.

AB 1341 (Calderon) would establish tax credits, deductions, and exemptions to incentivize the deployment of ZEVs and NZEVs. AB 1341 is awaiting hearing in the Assembly Revenue and Taxation Committee.

1. Double referral. This bill was also referred to the Assembly Transportation Committee and passed on a 10-3 vote.
   

REGISTERED SUPPORT / OPPOSITION:

Support

Charge Ahead California
Coalition for Clean Air
Communities for a Better Environment
Environment California
Natural Resource Defense Council
The Greenlining Institute

Opposition

None on file

Analysis Prepared by: Michael Jarred / NAT. RES. /

Date of Hearing: April 17, 2017

ASSEMBLY COMMITTEE ON TRANSPORTATION

Jim Frazier, Chair

ABPCA Bill Id:AB 1259 (

Author:Calderon) – As Amended Ver:March 30, 2017

SUBJECT: Capital Access Loan Program: electric vehicles

SUMMARY: Expands the Capital Access Loan Program (CALP), overseen by the California Pollution Control Financing Authority (Authority), to include a financing program for electric vehicle (EV) purchases by low- and middle-income consumers and families. Specifically, this bill:

1. Makes findings and declarations about the benefits of zero-emission vehicles (ZEVs) and near-zero-emission vehicles (NZEVs) and the lack of access to capital at reasonable interest rates that prevents many low- and moderate-income consumers from participating in ZEV and NZEV incentive programs.
2. Requires the Authority to include in the CALP a component dedicated to EVs that is limited to low-and middle-income consumers and families.
3. Requires, for the EV component of the CALP, that the California Air Resources Board (ARB) act as an independent contractor to establish standards and program criteria consistent the California Global Warming Solutions Act of 2006, established pursuant to AB 32 (Núñez), Chapter 488, Statutes of 2006, goals as well as other clean air statutes.
4. Requires that the EV component of the CALP provide for multiple sources of funding including, but not necessarily limited to the General Fund and the Greenhouse Gas Reduction Fund (GGRF) monies.
5. Requires that the newly created EV component of the CALP provide for combined loans, including but not to limited to, multiple signatories for the same EV purchased.
6. Requires that the EV component of the CALP be coordinated with other state and federal rebates, tax credits, and incentives available toward the purchase of qualifying EVs and that they be counted as a down payment or cash.

EXISTING LAW:

1. Establishes the Authority within the Office of the Treasurer to provide low-cost financing to California businesses.
2. Creates the CALP to encourage banks and other financial institutions domiciled in California to make loans to small businesses that have difficulty obtaining financing by providing specialty programs targeted at helping businesses install EV charging stations, conduct seismic retrofits, and comply with the federal Americans with Disabilities Act.
3. Requires ARB, pursuant to AB 32, to adopt a statewide greenhouse gas (GHG) emissions limit equivalent to 1990 levels by 2020, and authorizes ARB to use market-based mechanisms (cap-and-trade) to achieve compliance with these regulations.
4. Requires, pursuant to SB 32 (Pavley), Chapter 249, Statutes of 2016, that ARB ensure that statewide GHG emissions are reduced to at least 40% below 1990 levels by 2030.
5. Establishes the GGRF in the State Treasury and requires all the money collected pursuant to cap-and-trade be deposited into the fund.
6. Establishes the Consumer Assistance Program (CAP) in the Bureau of Automotive Repair (BAR), to provide assistance to low-income owners of vehicles for failed a smog tests in the form of a repair cost waiver, repair cost assistance, or a monetary incentive of up to $1,500 to “retire” (scrap) the vehicle.
7. Establishes the Enhanced Fleet Modernization Program (EFMP), administered by ARB and BAR, to provide for the voluntary retirement of passenger vehicles and light- and medium-duty trucks that are high polluters.
8. Establishes the Charge Ahead California Initiative pursuant to SB 1275 (de León), Chapter 530, Statutes of 2014, that, among other things, included the goal of placing at least one million ZEVs and NZEVs into service by January 1, 2023, and increasing access to these vehicles for disadvantaged, low-income, and moderate-income communities and consumers to ZEVs and NZEV vehicles by creating the following programs:
   • 1. EFMP Plus-Up: Provides enhanced monetary EFMP incentives for low-income individuals in disadvantaged communities (DACs);
     2. Car Sharing and Mobility Options Pilot Project: Provides funding for government entities or non-profit organizations to start or expand car share programs for residents of DACs; and,
     3. Financing Assistance Pilot Project: Provides financing assistance to lower-income consumers to buy or lease qualifying clean air vehicles.

FISCAL EFFECT: Unknown

COMMENTS: The CALP was created in 1994 to encourage banks and other financial institutions to make loans to small businesses experiencing difficulties obtaining financing. Later CALP was expanded to include specialty programs targeted toward helping businesses obtain financing for the installation of EV charging infrastructure, complying with federal Americans with Disabilities Act requirements, completing seismic retrofit work, as well as retrofitting high-polluting diesel trucks. This bill would create a new program within CALP to include a financing program to help low- and middle-income individuals and families finance the purchase of EVs. By establishing this program in the CALP, the author seeks to make EVs more broadly available to low- and middle-income individuals who are currently precluded from buying or leasing these vehicles because they are unable to obtain financing. By paving the way for these individuals to purchase and use EVs, the program would also serve to help the state achieve its emissions reduction goals.

ARB's Financial Assistance Program: In 2014, the Legislature passed and Governor Brown signed SB 1275 (de Leon), also known as the Charge Ahead Initiative, that, among other things, required ARB to create a financing assistance program -similar to what this bill proposes- to help low-income individuals living in disadvantaged communities gain access to ZEVs and NZEVs by providing them with financing needed to purchase these clean vehicles.

As required by the Charge Ahead Initiative, ARB launched a financing assistance pilot in the San Francisco Bay Area in 2016 to serve disadvantaged communities in the San Francisco Bay Area. The pilot program combines low-interest loans with financial education, budget counseling, and personalized financial management to help low-income individual's purchase or lease clean vehicles. The program offers financing assistance at an 8% interest rate for up to 36 months on the balance of certain vehicles that are purchased using other program incentive such as the Clean Vehicle Rebate Project (CVRP), EFMP and EFMP Plus-up. ARB reports that the Financing Assistance Pilot has been successful to date and they are in the process of developing a statewide program that will launch early next year.

Cap-and-Trade and the GGRF: While in the past, cap-and-trade auction revenues have generated billions of dollars to support programs that help the state achieve its climate change goals, recent auctions have generated relatively little, with the most recent auction in February 2017 generating only $8 million. The consistently low auction revenues are generating a great deal of concern about the ability to maintain existing clean air programs—much less new ones. For example, the Governor's 2017-18 budget proposes a $2.2 billion expenditure plan assuming $1 billion in cap-and-trade revenue in 2016-17, despite the fact that the first three quarterly auctions in 2016-17 have generated only $380 million. While it is entirely possible that factors causing low auction revenues could be resolved, it is uncertain when, or if, auction revenues will be restored to previous levels.

Committee concerns: While it is unclear whether or not the state will have excess revenue in either GGRF or the General Fund to create the program envisioned in this bill but regardless, it is unclear why the author wishes to create an entirely new program given that ARB has launched a successful pilot, as required by the Charge Ahead Initiative of 2014, and they will be turning that pilot into a statewide program later this year. Rather than expend the capital to create a new and competing program, the author may wish to work with ARB to ensure that the statewide financing assistance program works to accomplish the goals set forth in this bill.

It is also important to note that this bill is one over 10 bills introduced this session (see related legislation below) that seeks to further incentivize the purchase and use of ZEVs and NZEVs including AB 964 (Gomez) that would create a program very similar to the financing assistance program envisioned in this bill. While more incentives may be needed to ensure full market adoption of ZEVs and NZEVs, the fact that the multitude of incentive programs already in existence has not "moved the needle" with respect to market adoption is concerning. Given that this is only one of many bills introduced this year to create ZEV and NZEV incentives, the Legislature may wish to pause, gather the data, and develop a comprehensive strategy to attack the issue of ZEV market adoption rather than to continue to pursue a patchwork approach.

Double referral: This bill will be referred to the Assembly Natural Resources Committee should it pass out of this committee.

Related legislation: AB 33 (Quirk) would require the Public Utilities Commission by March 30, 2018, to authorize investor owned utilities (IOUs) to offer programs and investments in residential electric vehicle service equipment. AB 33 is set to be heard by the Assembly Communications and Conveyance Committee on April 26, 2017.

AB 188 (Salas) would require ARB to update the EFMP guidelines to allow participants to replace their vehicles with a light-duty truck so long as they are retiring a pickup truck and the replacement truck meets fuel efficiency standard set for minivans. AB 188 passed out of this committee on March 27, 2017, with a 14-0 vote and is awaiting a hearing in the Assembly Appropriations Committee.

AB 193 (Cervantes) would require ARB to create a program that incentivizes the purchase and use of used clean air vehicles by low- and moderate income individuals living in areas of the state with poor air quality and where existing clean air vehicle rebate programs have been underutilized. AB 193 is set to be heard by this committee on April 24, 2017.

AB 544 (Bloom) would amend the current high occupancy vehicle lane sticker program for EVs. AB 544 is set to be heard by this committee on April 24, 2017.

AB 615 (Cooper) is an urgency measure that would make permanent the current income restrictions in the CVRP program that were imposed by last year's budget. AB 615 passed out of this committee on March 20, 2017, with a 13-0 vote and is awaiting a hearing by the Assembly Appropriations Committee.

AB 964 (Gomez) is similar to this bill in that it would create a new program (The California Affordable Clean Vehicle Program) to be administered by the Authority, to help low-income and high financial risk individuals buy low-emission vehicles using qualified loans. AB 964 is set to be heard by this committee on April 17, 2017.

AB 1081 (Burke) would exempt from state sales tax the value of a vehicle traded in to purchase a cleaner car. AB 1081 is set to be heard by the Assembly Revenue and Taxation Committee on April 17, 2017.

AB 1082 (Burke) would require IOUs to develop a program for the installation of vehicle charging stations at school facilities for use by faculty, students, and parents with electricity provided at time-of-use rates. AB 1082 passed out of the Assembly Communications and Conveyance Committee on April 6, 2016, with a 10-3 vote and is set to be heard by the Assembly Education Committee on April 26, 2016.

AB 1083 (Burke) Would require IOUs to create a charging network at all state parks and beaches by July 31, 2018 with electricity provided at time-of-use rates. AB 1082 passed out of the Assembly Communications and Conveyance Committee on April 5, 2017, with a 10-3 vote and is set to be heard by the Assembly Water, Parks, and Wildlife Committee on April 25, 2016.

AB 1341 (Calderon) would establish tax credits, deductions, and exemptions to incentivize the deployment of ZEVs and NZEVs. AB 1341 is set to be heard by this committee on April 17, 2017.

Previous legislation: AB 32 (Núñez), Chapter 488, Statutes of 2006, required ARB to develop and implement regulations necessary to reduce emissions to 1990 levels by the year 2020.

SB 32 (Pavley), Chapter 249, Statute of 2016, required the Air Resources Board (ARB) to ensure that statewide GHG emissions are reduced to at least 40% below the 1990 level by 2030.

SB 1275 (de León), Chapter 530, Statutes of 2014, established the Charge Ahead California Initiative to provide incentives that increase the availability of ZEV and NZEV vehicles, particularly in disadvantaged and low-and-moderate-income communities.

SB 837 (Committee on Budget and Fiscal Review), Chapter 32, Statutes of 2016, made various statutory changes necessary to implement the state administration-related provisions of the Budget Act of 2016, including, providing the Authority with the ability to issue consumer loans.

REGISTERED SUPPORT / OPPOSITION:

Support

None on file

Opposition

None on file

Analysis Prepared by: Victoria Alvarez / TRANS. /