Existing law establishes the Clean Cars 4 All Program, which is administered by the State Air Resources Board, to focus on achieving reductions in the emissions of greenhouse gases, improvements in air quality, and benefits to low-income state residents through the replacement of high-polluter motor vehicles with cleaner and more efficient motor vehicles or a mobility option. Existing law requires the implementing regulations to ensure that the program complies with certain requirements.

This bill would require the implementing regulations for the Clean Cars 4 All Program to additionally ensure that, among other things, incentives provided under the program are available in all areas of the state and that, in those areas where a local air district has not elected to participate in the program, to manage the distribution of incentives within its jurisdiction, the state board manages the distribution of incentives to eligible residents of those areas. The bill would make certain conforming changes in that regard. The bill would require, as one of the program goals for replacement of passenger vehicles and trucks, the state board to prioritize vehicle retirement in areas of the state that meet specified criteria, including those areas with the highest percentage of people residing in disadvantaged and low-income communities. The bill would also require the state board to update the guidelines for the program no later than July 1, 2026, as specified.

Existing law requires the state board to annually post on its internet website a performance analysis of the replacement and mobility options component of the Clean Cars 4 All Program that includes an evaluation of the funding for targeted outreach in low-income or disadvantaged communities, as specified.

This bill would require that analysis to additionally include an evaluation of the funding for targeted outreach in low-income or disadvantaged communities with the highest number of vehicles manufactured before 2004 or that are at least 20 years old that are driven most and have the poorest fuel economy, as specified.

Existing law requires the state board to consider certain metrics in allocating funding under the program to local air districts participating in the program, and to the statewide program, including the number of vouchers deployed and the population in eligible program ZIP Codes.

This bill would require the state board, in allocating funding to local air districts participating in the program and to the portion of the program managed by the state board, to consider additional metrics, including the total value of vouchers deployed and certain metrics for retired vehicles, and would delete the requirement to consider the population in eligible ZIP Codes.

The bill would also require the state board, in coordination with local air districts and specified organizations, to establish a means-based strategy to identify potential recipients of incentives under the Clean Cars 4 All Program that meet certain criteria and, as part of that strategy, require an increased incentive to be provided under the program to those individuals.

Existing law establishes the Clean Cars 4 All Program, which is administered by the State Air Resources Board, to focus on achieving reductions in the emissions of greenhouse gases, improvements in air quality, and benefits to low-income state residents through the replacement of high-polluter motor vehicles with cleaner and more efficient motor vehicles or a mobility option. Existing law requires the implementing regulations to ensure that the program complies with certain requirements.

This bill would require the implementing regulations for the Clean Cars 4 All Program to additionally ensure that, among other things, incentives provided under the program are available in all areas of the state and that, in those areas where a local air district has not elected to participate in the program, to manage the distribution of incentives, incentives within its jurisdiction, the state board manages the distribution of incentives to eligible residents of those areas, and areas. The bill would make certain conforming changes in that regard. The bill would require, as one of the program goals for replacement of passenger vehicles and trucks, the state board to prioritize vehicle retirement in areas of the state that meet specified criteria, including those areas with the highest percentage of people residing in disadvantaged and low-income communities. The bill would also require the state board to update the guidelines for the program no later than July 1, 2026, as specified.

Existing law requires the state board to annually post on its internet website a performance analysis of the replacement and mobility options component of the Clean Cars 4 All Program that includes an evaluation of the funding for targeted outreach in low-income or disadvantaged communities, as specified.

This bill would require that evaluation to instead address analysis to additionally include an evaluation of the funding for targeted outreach in low-income or disadvantaged communities with the highest number of vehicles manufactured before 2004 or that are at least 20 years old that are driven most and have the poorest fuel economy, as specified.

Existing law requires the state board to consider certain metrics in allocating funding under the program to local air districts participating in the program. program, and to the statewide program, including the number of vouchers deployed and the population in eligible program ZIP Codes.

This bill would require the state board, in allocating funding to local air districts participating in the program and to the portion of the program managed by the state board, to consider additional metrics relating to retired vehicles. metrics, including the total value of vouchers deployed and certain metrics for retired vehicles, and would delete the requirement to consider the population in eligible ZIP Codes.

The bill would also require the state board, in coordination with local air districts and specified organizations, to establish a means-based strategy to identify potential recipients of incentives under the Clean Cars 4 All Program that meet certain criteria and, as part of that strategy, require an increased incentive to be provided under the program to those individuals.

Existing law establishes the Clean Cars 4 All Program, which is administered by the State Air Resources Board, to focus on achieving reductions in the emissions of greenhouse gases, improvements in air quality, and benefits to low-income state residents through the replacement of high-polluter motor vehicles with cleaner and more efficient motor vehicles or a mobility option. Existing law requires the implementing regulations to ensure that the program complies with certain requirements.

This bill would require the implementing regulations for the Clean Cars 4 All Program to additionally ensure that, among other things, incentives provided under the program are available in all areas of the state and that, in those areas where a local air district has not elected to manage the distribution of incentives, the state board manages the distribution of incentives to eligible residents of those areas, and would make certain conforming changes in that regard. The bill would also require, as one of the program goals for replacement of passenger vehicles and trucks, the state board to prioritize vehicle retirement in areas of the state that meet specified criteria, including those areas with the highest percentage of people residing in disadvantaged and low-income communities. The bill would also require the state board to update the guidelines for the program no later than July 1, 2026, as specified.

Existing law requires the state board to annually post on its internet website a performance analysis of the replacement and mobility options component of the Clean Cars 4 All Program that includes an evaluation of the funding for targeted outreach in low-income or disadvantaged communities, as specified.

This bill would require that evaluation to instead address the funding for targeted outreach in low-income or disadvantaged communities with the highest number of vehicles manufactured before 2004 or that are at least 20 years old that are driven most and have the poorest fuel economy, as specified.

Existing law requires the state board to consider certain metrics in allocating funding under the program to local air districts participating in the program.

This bill would require the state board, in allocating funding to local air districts participating in the program and to the portion of the program managed by the state board, to consider additional metrics relating to retired vehicles.

The bill would also require the state board, in coordination with local air districts and specified organizations, to establish a means-based strategy to identify potential recipients of incentives under the Clean Cars 4 All Program that meet certain criteria and, as part of that strategy, require an increased incentive to be provided under the program to those individuals.

Existing law establishes the Clean Cars 4 All Program, which is administered by the State Air Resources Board, to focus on achieving reductions in the emissions of greenhouse gases, improvements in air quality, and benefits to low-income state residents through the replacement of high-polluter motor vehicles with cleaner and more efficient motor vehicles or a mobility option. Existing law requires the implementing regulations to ensure that the program complies with certain requirements.

This bill would require the implementing regulations for the Clean Cars 4 All Program to additionally ensure that, among other things, incentives provided under the program are available in all areas of the state and that, in those areas where a local air district has not elected to manage the distribution of incentives, the state board manages the distribution of incentives to eligible residents of those areas, and would make certain conforming changes in that regard. The bill would also require, as one of the program goals for replacement of passenger vehicles and trucks, the state board to prioritize vehicle retirement in areas of the state that meet specified criteria, including those areas with the highest percentage of people residing in disadvantaged and low-income communities.

Existing law requires the state board to annually post on its internet website a performance analysis of the replacement and mobility options component of the Clean Cars 4 All Program that includes an evaluation of the funding for targeted outreach in low-income or disadvantaged communities, as specified.

This bill would require that evaluation to instead address the funding for targeted outreach in low-income or disadvantaged communities with the highest number of vehicles manufactured before 2004 or that are at least 20 years old that are driven most and have the poorest fuel economy, as specified.

Existing law requires the state board to consider certain metrics in allocating funding under the program to local air districts participating in the program.

This bill would require the state board, in allocating funding to local air districts participating in the program and to the portion of the program managed by the state board, to consider additional metrics relating to retired vehicles.

The bill would also require the state board, in coordination with local air districts and specified organizations, to establish a means-based strategy to identify potential recipients of incentives under the Clean Cars 4 All Program that meet certain criteria and, as part of that strategy, require an increased incentive to be provided under the program to those individuals.

Existing law establishes the Clean Cars 4 All Program, which is administered by the State Air Resources Board, to focus on achieving reductions in the emissions of greenhouse gases, improvements in air quality, and benefits to low-income state residents through the replacement of high-polluter motor vehicles with cleaner and more efficient motor vehicles or a mobility option. Existing law requires the implementing regulations to ensure that the program complies with certain requirements.

This bill would require the implementing regulations for the Clean Cars 4 All Program to additionally ensure that, among other things, incentives provided under the program are available in all areas of the state and that, in those areas where a local air district has not elected to manage the distribution of incentives, the state board manages the distribution of incentives to eligible residents of those areas, and would make certain conforming changes in that regard. The bill would also require, as one of the program goals for replacement of passenger vehicles and trucks, the state board to prioritize vehicle retirement in areas of the state that meet specified criteria, including those areas with the highest percentage of people in disadvantaged and low-income communities.

Existing law requires the state board to annually post on its internet website a performance analysis of the replacement and mobility options component of the Clean Cars 4 All Program that includes an evaluation of the funding for targeted outreach in low-income or disadvantaged communities, as specified.

This bill would require that evaluation to instead address the funding for targeted outreach in low-income or disadvantaged communities with the highest number of vehicles manufactured before 2004 or that are at least 20 years old that are driven most and have the poorest fuel economy, as specified.

Existing law requires the state board to consider certain metrics in allocating funding under the program to local air districts participating in the program.

This bill would require the state board, in allocating funding to local air districts participating in the program and to the portion of the program managed by the state board, to consider additional metrics relating to retired vehicles.

The bill would also require the state board, in coordination with local air districts and specified organizations, to establish a means-based strategy to identify potential recipients of incentives under the Clean Cars 4 All Program that meet certain criteria and, as part of that strategy, require an increased incentive to be provided under the program to those individuals.

GOVERNOR'S VETO

GV Bill Id:AB 2401

Author:(Ting)

As Enrolled Ver:September 3, 2024

2/3 vote

SUMMARY

Requires the California Air Resources Board (CARB), in administering the Clean Cars for All (CC4A) Program, to prioritize vehicle retirement in areas of the state that with the highest percentages of low-income, high-mileage drivers with older, high-polluting vehicles; makes these incentives available statewide, and requires CARB to establish a means-based strategy provide an increased incentive to potential recipients with vehicles manufactured prior to 2004 or that are at least 20 years old, and that have poor fuel economy and high number of vehicle miles traveled.

Senate Amendments

1. Require CARB maintain funding to each district participating in the CC4A—from the funds made available to CARB under Items 3900-101-0001 and 3900-101-3228 of the Budget Act of 2023 for statewide equity transportation programs—such that if a district has insufficient funds to meet processed demand, then CARB reallocates moneys to ensure minimal impact on operations of district CC4A programs.
2. Require CARB annually to report the amount of funding allocated to the statewide CC4A program and each district CC4A program and detailed performance metrics, to further publish the report on its website and to provide a copy to the Senate and Assembly Budget Committees.

Governor’s Veto Message

This bill would require the California Air Resources Board (CARB) to make several changes to the Clean Cars 4 All (CC4A) Program, including but not limited to codifying a statewide CC4A program, potentially reallocating funds between statewide and air district-run programs, expanding reporting requirements, and prioritizing certain recipients who drive older vehicles in greater amounts in more pollution-burdened areas.

The CC4A program has helped thousands of lower-income residents living in some of the most disadvantaged and air-polluted areas of the state replace their old higher-polluting vehicles with newer, cleaner vehicles. The program is designed to be consumer-focused, and its appeal is its ease of access and straightforward eligibility and participation requirements.

Unfortunately, while the intent of this bill is laudable, the new application requirements it would impose on the CC4A program recipients are onerous and will discourage some of the lowest-income residents in California from participating. In addition, the new verification requirements would necessitate constant and costly monitoring by CARB of recipient driving patterns, further discouraging program participation and thereby preventing continued reductions in local air pollution and greenhouse gas emissions from being realized.

COMMENTS

The transportation sector generates nearly 40% of state GHG emissions, three-quarters of which are from light-duty passenger vehicles alone. CARB administers a variety programs intended to reduce mobile source emissions, including incentive programs that support consumer adoption of zero‑emission vehicles (ZEVs).

Disadvantaged communities (DACs) and low-income communities (LICs) experience disproportionate amounts of air pollution, but also contribute disproportionately to light-duty vehicular GHG emissions. On average, households with lower incomes have to drive longer distances, spend a higher percentage of monthly income on fuel, and tend to drive older, more polluting vehicles.

CC4A provides incentives to help lower-income drivers replace their old, higher-polluting cars with cleaner transportation options. Participants voluntarily scrap their vehicles in exchange for an incentive useable towards the lease or purchase of new or used replacement vehicles, e.g., a hybrid, plug-in hybrid electric (PHEV), battery electric (BEV), and fuel cell electric vehicles. Participants must have a household income of less than 400% of the federal poverty limit (FPL) and live in a ZIP Code containing a disadvantaged community census tract in order to qualify.

Several studies have found that up-front cost is likely the biggest barrier to ZEV adoption, and lower-income CC4A recipients may find that current EV incentives are not enough to offset the cost of a new or used ZEV. For example, CARB has estimated that the average cost of a vehicle receiving a CC4A incentive has gone from roughly $20,000 in 2016 to $35,000 at the end of 2021—an increase of $15,000. CC4A currently offers increased incentives up to $9,500, though CARB has proposed increasing incentives up to $12,000.

To date, CC4A has been highly successful in retiring the oldest and most polluting vehicles; the majority of vehicles retired under CC4A have been older vehicle models, with 11,628 out of 13,335 retired vehicles (87.20%) being MY 2004 or older, and 13,217 out of 13,335 (99.12%) being MY 2009 or older.

CARB delegates authority to participating air districts to administer CC4A and allocates program funding to them. Currently, the state's five largest regional air districts—in the Bay Area, the San Joaquin Valley, Sacramento, the South Coast and San Diego— have CC4A programs. CARB allows each air district to set additional eligibility criteria tailored to specific regional needs, provided that they meet CARB's minimum eligibility requirements.

Although the existing district-operated CC4A programs have experienced great success with high demand from low- and moderate-income households, they continue to face many challenges because funding is unpredictable. The current method of distributing funding results in air districts not knowing how much or when CARB will distribute additional funding. As a result, air districts frequently have to turn away applications or place applicants on waitlists until they receive more funding.

Increased Incentives and VMT. Offering increased incentives to people that drive the most polluting cars and/or that drive the most can be highly effective in helping to retire those vehicles. However, because CARB does not currently track VMT as a prerequisite for incentives, it is not clear that the vehicles retired as a result of the changes in this bill would be significantly different than those currently being retired. In addition, it is important to consider that increasing requirements and administrative complexity for program participants may reduce the number people willing to participate in the program, and work counter to achieving the program’s goals.

Program funding and jurisdiction. Greater transparency and clarity on the timing and amount of funds to be allocated each year would benefit district programs, and CARB should strive to provide continuous funding to keep CC4A programs running. Clear delineation of the air districts’ jurisdiction to manage CC4A allows them to continue tailoring their programs to regional needs, but could cause confusion among applicants living near district borders who are redirected from the statewide program to a district program, or vice versa. Establishing procedures for fund re-allocation may help keep district CC4A programs operational year-round.

According to the Author

"The successful Clean Cars 4 All program has recently been expanded statewide and intends to reduce greenhouse gas emissions as efficiently and equitably as possible. To accomplish this goal, the state must maximize its investments to reduce gasoline consumption, especially among lower-income consumers who cannot afford to live near their workplaces and spend large portions of their income on fuel for long distance commutes. AB 2401 will improve ZEV equity and air quality by codifying the expanded Clean Cars 4 All program, requiring vehicle data collection to allow for more targeted outreach to the lowest-income Californians, and increasing incentive amounts for the lowest income, highest mileage drivers."

Arguments in Support

The co-sponsors—Coalition for Clean Air, Coltura, GLI, UCS, and Valley Clean Air Now—state "AB 2401 provides a solution to the aforementioned issues by requiring the Air Resources Board to collect additional data and use it to establish a needs-based approach to identify and target outreach and incentives to low-income, high-mileage drivers with older, high-polluting vehicles. This measure additionally ensures that expansions of the program are subject to the same requirements established by this measure and previously enacted equity, funding, and tax exemption provisions."

Arguments in Opposition

No opposition on file.

FISCAL COMMENTS

According to the Senate Appropriations Committee, in its analysis of the August 5, 2024 version of the bill: "CARB estimates ongoing costs of about $1 million annually (Greenhouse Gas Reduction Fund [GGRF]) to facilitate a public process, create methodology for tracking and reporting, and incorporate additional data analysis, among other things."

VOTES

ASM TRANSPORTATION: 15-0-0

YES: Wilson, Davies, Aguiar-Curry, Berman, Juan Carrillo, Hart, Hoover, Jackson, Lowenthal, Papan, Sanchez, Ting, Wallis, Ward, Wicks

ASM NATURAL RESOURCES: 11-0-0

YES: Bryan, Flora, Bauer-Kahan, Friedman, Hoover, Kalra, Joe Patterson, Muratsuchi, Pellerin, Wicks, Wood

ASM APPROPRIATIONS: 15-0-0

YES: Wicks, Sanchez, Arambula, Bryan, Calderon, Wendy Carrillo, Dixon, Mike Fong, Grayson, Haney, Hart, Jim Patterson, Pellerin, Ta, Villapudua

ASSEMBLY FLOOR: 72-0-8

YES: Addis, Aguiar-Curry, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Juan Carrillo, Wendy Carrillo, Chen, Connolly, Davies, Dixon, Flora, Mike Fong, Vince Fong, Gabriel, Gallagher, Garcia, Gipson, Grayson, Haney, Hart, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Rendon, Reyes, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Wood, Zbur, Robert Rivas

ABS, ABST OR NV: Calderon, Cervantes, Megan Dahle, Essayli, Friedman, Holden, Mathis, Luz Rivas

SENATE FLOOR: 39-0-1

YES: Allen, Archuleta, Ashby, Atkins, Becker, Blakespear, Bradford, Caballero, Cortese, Dahle, Dodd, Durazo, Eggman, Glazer, Gonzalez, Grove, Hurtado, Jones, Laird, Limón, McGuire, Menjivar, Min, Newman, Nguyen, Niello, Ochoa Bogh, Padilla, Portantino, Roth, Rubio, Seyarto, Skinner, Smallwood-Cuevas, Stern, Umberg, Wahab, Wiener, Wilk

ABS, ABST OR NV: Alvarado-Gil

ASSEMBLY FLOOR: 74-0-5

YES: Addis, Aguiar-Curry, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Chen, Connolly, Megan Dahle, Davies, Dixon, Essayli, Mike Fong, Friedman, Gabriel, Gallagher, Gipson, Grayson, Haney, Hart, Holden, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, Mathis, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Pacheco, Papan, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Rendon, Reyes, Luz Rivas, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Wood, Robert Rivas

ABS, ABST OR NV: Cervantes, Flora, Garcia, Ortega, Zbur

UPDATED

VERSION: September 3, 2024

CONSULTANT: Stephanie Choing / TRANS. / (916) 319-2093 FN: 0005105

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 2401

Author:(Ting)

As Amended Ver:August 5, 2024

Majority vote

SUMMARY

Requires the California Air Resources Board (CARB), in administering the Clean Cars for All (CC4A) Program, to prioritize vehicle retirement in areas of the state that with the highest percentages of low-income, high-mileage drivers with older, high-polluting vehicles; makes these incentives available statewide, and requires CARB to establish a means-based strategy provide an increased incentive to potential recipients satisfying additional qualifying criteria. Specifically, this bill:

1. Requires CARB to prioritize vehicle retirement in areas of the state that have the highest percentage of people residing in disadvantaged (DAC) and low-income (LIC) communities, the highest numbers of vehicles manufactured prior to 2004 or that are at least 20 years old, and the highest number of vehicles with poor fuel economy, and the most vehicle miles traveled.
2. Makes incentives provided under CC4A available statewide and requires CARB to manage distribution of incentives only in areas of the state where an air district has elected not to participate.
3. Requires the application process and procedures for delivering available funding for the CC4A Program to include additional performance metrics for evaluating funding delivery and program administration and implementation.
4. Requires CARB to establish procedures for reallocating any surplus of funds from portions of the CC4A that districts manage or by the state board to other districts or the state board that have exhausted CC4A program funding and have demonstrated a need.
5. Requires CARB to track and report all CC4A Program data at the census tract level to support eligibility criteria that offers increased incentives for residents of disadvantaged communities, and greenhouse gas (GHG) emissions reductions per vehicle retired based on miles per gallon and the miles traveled under the registered owner.
6. Requires CARB, in its annual accounting of moneys allocated to CC4A and the expenditures of CC4A by region, to separately display the portions of the program managed by each participating district and by the state board and to include projections of available funds for each portion of the program.
7. Requires CARB to evaluate funding for targeted outreach in LICs or DACs with the highest number of vehicles manufactured before 2004 or that are at least 20 years old that are driven most and have the poorest fuel economy, including whether the funding should be enhanced or modified to reach program goals.
8. Requires CARB to consider additional metrics in allocating funding for CC4A to districts participating in the program and to the statewide program, including the total value of vouchers deployed and for the retired vehicles: (i) high average annual vehicle miles traveled; (ii) low fuel economy; and (iii) older model year.
9. Requires CARB to establish a means-based strategy to identify and provide increased incentives to potential recipients under the CC4A Program who meet all of the following criteria:
10. A person living in the top decile of disadvantaged communities;
11. A person owning a vehicle manufactured before 2004 or a vehicle that is at least 20 years old;
12. A person owning a vehicle with poor fuel economy and a high number of vehicle miles traveled; and,
13. A person from a population that is eligible for but underserved by CC4A.

Senate Amendments

1. Require that CARB maintain funding to each district participating in the CC4A—from the funds made available to CARB under Items 3900-101-0001 and 3900-101-3228 of the Budget Act of 2023for statewide equity transportation programs—such that if a district has insufficient funds to meet processed demand, then CARB reallocates moneys to ensure minimal impact on operations of district CC4A programs.
2. Require CARB annually to report the amount of funding allocated to the statewide CC4A program and each district CC4A program and detailed performance metrics, to further publish the report on its website and to provide a copy to the Senate and Assembly Budget Committees.

COMMENTS

The transportation sector generates nearly 40% of state GHG emissions, three-quarters of which are from light-duty passenger vehicles alone. CARB administers a variety programs intended to reduce mobile source emissions, including incentive programs that support consumer adoption of zero‑emission vehicles (ZEVs).

DACs and LICs experience disproportionate amounts of air pollution, but also contribute disproportionately to light-duty vehicular GHG emissions. On average, households with lower incomes have to drive longer distances, spend a higher percentage of monthly income on fuel, and tend to drive older, more polluting vehicles.

According to the co-sponsors of this bill, "in California, light-duty vehicles in the top 20% in terms of gasoline use are using 55% of all private light-duty gasoline" (Coltura's Gasoline Superusers 2.0 report) and "despite making up only 19% of the vehicles in the state, pre-2004 vehicles emit three times as much smog-forming nitrogen oxides as compared to all 2004 and later vehicles combined" (Cleaner Cars, Cleaner Air by GLI and UCS).

CC4A provides incentives to help lower-income drivers replace their old, higher-polluting cars with cleaner transportation options. Participants voluntarily scrap their vehicles in exchange for an incentive useable towards the lease or purchase of new or used replacement vehicles, e.g., a hybrid, plug-in hybrid electric (PHEV), battery electric (BEV), and fuel cell electric vehicles. Participants must have a household income of less than 400% of the federal poverty limit (FPL) and live in a ZIP Code containing a disadvantaged community census tract in order to qualify.

CARB delegates authority to participating air districts to administer CC4A and allocates program funding to them. Currently, the state's five largest regional air districts—in the Bay Area, the San Joaquin Valley, Sacramento, the South Coast and San Diego— have CC4A programs. CARB allows each air district to set additional eligibility criteria tailored to specific regional needs, provided that they meet CARB's minimum eligibility requirements.

In the 2022 and 2023 Budget Acts combined, roughly $200 million in additional funding was appropriated for equity transportation programs, including statewide expansion of CC4A. The statewide expansion is underway with initial roll-out set tentatively by end of 2024. CARB notes that the "statewide expansion will provide access to the program for the nearly four million residents in or near low-income communities which contain 60-70% of the 1.3 million older, higher polluting vehicles that may be eligible for replacement." To date, CC4A has been highly successful in retiring the oldest and most polluting vehicles; the majority of vehicles retired under CC4A have been older vehicle models, with 11,628 out of 13,335 retired vehicles (87.20%) being MY 2004 or older, and 13,217 out of 13,335 (99.12%) being MY 2009 or older.

Although the existing district-operated CC4A programs have experienced great success, the CARB's current method of distributing funding results in air districts not knowing how much or when CARB will distribute additional funding. As a result, air districts frequently have to turn away applications or place applicants on waitlists until they receive more funding.

CC4A is the only active state-funded ZEV incentive program for personal use vehicles. Several studies have found that up-front cost is likely the biggest barrier to ZEV adoption, and lower-income CC4A recipients may find that current EV incentives are not enough to offset the cost of a new or used ZEV. For example, CARB has estimated that the average cost of a vehicle receiving a CC4A incentive has gone from roughly $20,000 in 2016 to $35,000 at the end of 2021—an increase of $15,000. CC4A currently offers increased incentives up to $9,500, though CARB has proposed increasing incentives up to $12,000.

Increased Incentives and Vehicle Miles Traveled (VMT). Offering increased incentives to people that drive the most polluting cars and/or that drive the most, as proposed in this bill, can be highly effective in helping to retire those vehicles. However, because CARB does not currently track VMT as a prerequisite for incentives, it is not clear that the vehicles retired as a result of the changes in this bill would be significantly different than those currently being retired.

Program funding and jurisdiction. Greater transparency and clarity on the timing and amount of funds to be allocated each year would benefit district programs, and CARB should strive to provide continuous funding to keep CC4A programs running. Clear delineation of the air districts' jurisdiction to manage CC4A allows them to continue tailoring their programs to regional needs, but could cause confusion among applicants living near district borders who are redirected from the statewide program to a district program, or vice versa.

Establishing procedures for fund re-allocation may help keep district CC4A programs operational year-round. However, rapid exhaustion of funds where demand is already established could stifle the growth of newer programs in Sacramento and San Diego, or result in an increase of underserved populations in other air districts. This bill has been amended to require CARB to maintain continuous funding to district CC4A programs to ensure minimal impact on district operations, rather than simply strive to maintain continuous funding, by utilizing $80 million allocated to CARB in the Budget Act of 2023 (Sections 110 and 111 of Chapter 38, Statutes of 2023) for the purpose of statewide equity transportation programs, including Clean Cars 4 All. This bill has also been amended to require preparation, publication, and submission of an annual funding and metrics report to be provided to the Budget Committees of both houses of the Legislature.

Statewide CC4A Codification. CARB is currently developing regulations for its implementation of the statewide program and it anticipates accepting applications by end of 2024. As the CC4A expansion begins rolling out, flexibility for CARB to tailor the program to the needs of the multiple regions under the statewide umbrella could be beneficial. CARB continues to discuss details around statewide implementation with various stakeholders, including the author's office.

According to the Author

"The successful Clean Cars 4 All program has recently been expanded statewide and intends to reduce greenhouse gas emissions as efficiently and equitably as possible. To accomplish this goal, the state must maximize its investments to reduce gasoline consumption, especially among lower-income consumers who cannot afford to live near their workplaces and spend large portions of their income on fuel for long distance commutes. AB 2401 will improve ZEV equity and air quality by codifying the expanded Clean Cars 4 All program, requiring vehicle data collection to allow for more targeted outreach to the lowest-income Californians, and increasing incentive amounts for the lowest income, highest mileage drivers."

Arguments in Support

The co-sponsors—Coalition for Clean Air, Coltura, GLI, UCS, and Valley Clean Air Now—state "AB 2401 provides a solution to the aforementioned issues by requiring the Air Resources Board to collect additional data and use it to establish a needs-based approach to identify and target outreach and incentives to low-income, high-mileage drivers with older, high-polluting vehicles. This measure additionally ensures that expansions of the program are subject to the same requirements established by this measure and previously enacted equity, funding, and tax exemption provisions."

Arguments in Opposition

None on file.

FISCAL COMMENTS

According to the Assembly Appropriations Committee, in its analysis of the April 9, 2024 version of the bill: "ARB estimates ongoing annual costs of approximately $1 million (Greenhouse Gas Reduction Fund (GGRF)) for five new positions to develop a methodology to prioritize vehicle retirement based on the required criteria; track and report both program data at the census tract level and GHG emissions reductions per vehicle retired based on miles per gallon and the miles traveled under the registered owner; adjust incentive levels for vehicles manufactured prior to 2004 or that are at least 20 years old and vehicles with poor fuel economy and the most vehicles miles traveled; collect, evaluate, and share accounting of program funds by district; establish procedures for reallocating funds as required; gather public input through workshops and other outreach events; develop and implement a targeted outreach strategy in DACs and LICs in partnership with air districts; and other tasks."

According to the Senate Appropriations Committee, in its analysis of the August 5, 2024 version of the bill: "CARB estimates ongoing costs of about $1 million annually (Greenhouse Gas Reduction Fund [GGRF]) to facilitate a public process, create methodology for tracking and reporting, and incorporate additional data analysis, among other things."

VOTES:

ASM TRANSPORTATION: 15-0-0

YES: Wilson, Davies, Aguiar-Curry, Berman, Juan Carrillo, Hart, Hoover, Jackson, Lowenthal, Papan, Sanchez, Ting, Wallis, Ward, Wicks

ASM NATURAL RESOURCES: 11-0-0

YES: Bryan, Flora, Bauer-Kahan, Friedman, Hoover, Kalra, Joe Patterson, Muratsuchi, Pellerin, Wicks, Wood

ASM APPROPRIATIONS: 15-0-0

YES: Wicks, Sanchez, Arambula, Bryan, Calderon, Wendy Carrillo, Dixon, Mike Fong, Grayson, Haney, Hart, Jim Patterson, Pellerin, Ta, Villapudua

ASSEMBLY FLOOR: 72-0-8

YES: Addis, Aguiar-Curry, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Juan Carrillo, Wendy Carrillo, Chen, Connolly, Davies, Dixon, Flora, Mike Fong, Vince Fong, Gabriel, Gallagher, Garcia, Gipson, Grayson, Haney, Hart, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Rendon, Reyes, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Wood, Zbur, Robert Rivas

ABS, ABST OR NV: Calderon, Cervantes, Megan Dahle, Essayli, Friedman, Holden, Mathis, Luz Rivas

SENATE FLOOR: 39-0-1

YES: Allen, Archuleta, Ashby, Atkins, Becker, Blakespear, Bradford, Caballero, Cortese, Dahle, Dodd, Durazo, Eggman, Glazer, Gonzalez, Grove, Hurtado, Jones, Laird, Limón, McGuire, Menjivar, Min, Newman, Nguyen, Niello, Ochoa Bogh, Padilla, Portantino, Roth, Rubio, Seyarto, Skinner, Smallwood-Cuevas, Stern, Umberg, Wahab, Wiener, Wilk

ABS, ABST OR NV: Alvarado-Gil

UPDATED

VERSION: August 5, 2024

CONSULTANT: Stephanie Choing / TRANS. / (916) 319-2093 FN: 0004636

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 2401

Author:(Ting)

As Amended Ver:August 5, 2024

Majority vote

SUMMARY

Requires the California Air Resources Board (CARB), in administering the Clean Cars for All (CC4A) Program, to prioritize vehicle retirement in areas of the state that with the highest percentages of low-income, high-mileage drivers with older, high-polluting vehicles; makes these incentives available statewide, and requires CARB to establish a means-based strategy provide an increased incentive to potential recipients satisfying additional qualifying criteria. Specifically, this bill:

1. Requires CARB to prioritize vehicle retirement in areas of the state that have the highest percentage of people residing in disadvantaged (DAC) and low-income (LIC) communities, the highest numbers of vehicles manufactured prior to 2004 or that are at least 20 years old, and the highest number of vehicles with poor fuel economy, and the most vehicle miles traveled.
2. Makes incentives provided under CC4A available statewide and requires CARB to manage distribution of incentives only in areas of the state where an air district has elected not to participate.
3. Requires the application process and procedures for delivering available funding for the CC4A Program to include additional performance metrics for evaluating funding delivery and program administration and implementation.
4. Requires CARB to establish procedures for reallocating any surplus of funds from portions of the CC4A that districts manage or by the state board to other districts or the state board that have exhausted CC4A program funding and have demonstrated a need.
5. Requires CARB to track and report all CC4A Program data at the census tract level to support eligibility criteria that offers increased incentives for residents of disadvantaged communities, and greenhouse gas (GHG) emissions reductions per vehicle retired based on miles per gallon and the miles traveled under the registered owner.
6. Requires CARB, in its annual accounting of moneys allocated to CC4A and the expenditures of CC4A by region, to separately display the portions of the program managed by each participating district and by the state board and to include projections of available funds for each portion of the program.
7. Requires CARB to evaluate funding for targeted outreach in LICs or DACs with the highest number of vehicles manufactured before 2004 or that are at least 20 years old that are driven most and have the poorest fuel economy, including whether the funding should be enhanced or modified to reach program goals.
8. Requires CARB to consider additional metrics in allocating funding for CC4A to districts participating in the program and to the statewide program, including the total value of vouchers deployed and for the retired vehicles: (i) high average annual vehicle miles traveled; (ii) low fuel economy; and (iii) older model year.
9. Requires CARB to establish a means-based strategy to identify and provide increased incentives to potential recipients under the CC4A Program who meet all of the following criteria:
10. A person living in the top decile of disadvantaged communities;
11. A person owning a vehicle manufactured before 2004 or a vehicle that is at least 20 years old;
12. A person owning a vehicle with poor fuel economy and a high number of vehicle miles traveled; and,
13. A person from a population that is eligible for but underserved by CC4A.

Senate Amendments

1. Require that CARB maintain funding to each district participating in the CC4A—from the funds made available to CARB under Items 3900-101-0001 and 3900-101-3228 of the Budget Act of 2023for statewide equity transportation programs—such that if a district has insufficient funds to meet processed demand, then CARB reallocates moneys to ensure minimal impact on operations of district CC4A programs.
2. Require CARB annually to report the amount of funding allocated to the statewide CC4A program and each district CC4A program and detailed performance metrics, to further publish the report on its website and to provide a copy to the Senate and Assembly Budget Committees.

COMMENTS

The transportation sector generates nearly 40% of state GHG emissions, three-quarters of which are from light-duty passenger vehicles alone. CARB administers a variety programs intended to reduce mobile source emissions, including incentive programs that support consumer adoption of zero‑emission vehicles (ZEVs).

DACs and LICs experience disproportionate amounts of air pollution, but also contribute disproportionately to light-duty vehicular GHG emissions. On average, households with lower incomes have to drive longer distances, spend a higher percentage of monthly income on fuel, and tend to drive older, more polluting vehicles.

According to the co-sponsors of this bill, "in California, light-duty vehicles in the top 20% in terms of gasoline use are using 55% of all private light-duty gasoline" (Coltura's Gasoline Superusers 2.0 report) and "despite making up only 19% of the vehicles in the state, pre-2004 vehicles emit three times as much smog-forming nitrogen oxides as compared to all 2004 and later vehicles combined" (Cleaner Cars, Cleaner Air by GLI and UCS).

CC4A provides incentives to help lower-income drivers replace their old, higher-polluting cars with cleaner transportation options. Participants voluntarily scrap their vehicles in exchange for an incentive useable towards the lease or purchase of new or used replacement vehicles, e.g., a hybrid, plug-in hybrid electric (PHEV), battery electric (BEV), and fuel cell electric vehicles. Participants must have a household income of less than 400% of the federal poverty limit (FPL) and live in a ZIP Code containing a disadvantaged community census tract in order to qualify.

CARB delegates authority to participating air districts to administer CC4A and allocates program funding to them. Currently, the state's five largest regional air districts—in the Bay Area, the San Joaquin Valley, Sacramento, the South Coast and San Diego— have CC4A programs. CARB allows each air district to set additional eligibility criteria tailored to specific regional needs, provided that they meet CARB's minimum eligibility requirements.

In the 2022 and 2023 Budget Acts combined, roughly $200 million in additional funding was appropriated for equity transportation programs, including statewide expansion of CC4A. The statewide expansion is underway with initial roll-out set tentatively by end of 2024. CARB notes that the "statewide expansion will provide access to the program for the nearly four million residents in or near low-income communities which contain 60-70% of the 1.3 million older, higher polluting vehicles that may be eligible for replacement." To date, CC4A has been highly successful in retiring the oldest and most polluting vehicles; the majority of vehicles retired under CC4A have been older vehicle models, with 11,628 out of 13,335 retired vehicles (87.20%) being MY 2004 or older, and 13,217 out of 13,335 (99.12%) being MY 2009 or older.

Although the existing district-operated CC4A programs have experienced great success, the CARB's current method of distributing funding results in air districts not knowing how much or when CARB will distribute additional funding. As a result, air districts frequently have to turn away applications or place applicants on waitlists until they receive more funding.

CC4A is the only active state-funded ZEV incentive program for personal use vehicles. Several studies have found that up-front cost is likely the biggest barrier to ZEV adoption, and lower-income CC4A recipients may find that current EV incentives are not enough to offset the cost of a new or used ZEV. For example, CARB has estimated that the average cost of a vehicle receiving a CC4A incentive has gone from roughly $20,000 in 2016 to $35,000 at the end of 2021—an increase of $15,000. CC4A currently offers increased incentives up to $9,500, though CARB has proposed increasing incentives up to $12,000.

Increased Incentives and Vehicle Miles Traveled (VMT). Offering increased incentives to people that drive the most polluting cars and/or that drive the most, as proposed in this bill, can be highly effective in helping to retire those vehicles. However, because CARB does not currently track VMT as a prerequisite for incentives, it is not clear that the vehicles retired as a result of the changes in this bill would be significantly different than those currently being retired.

Program funding and jurisdiction. Greater transparency and clarity on the timing and amount of funds to be allocated each year would benefit district programs, and CARB should strive to provide continuous funding to keep CC4A programs running. Clear delineation of the air districts' jurisdiction to manage CC4A allows them to continue tailoring their programs to regional needs, but could cause confusion among applicants living near district borders who are redirected from the statewide program to a district program, or vice versa.

Establishing procedures for fund re-allocation may help keep district CC4A programs operational year-round. However, rapid exhaustion of funds where demand is already established could stifle the growth of newer programs in Sacramento and San Diego, or result in an increase of underserved populations in other air districts. This bill has been amended to require CARB to maintain continuous funding to district CC4A programs to ensure minimal impact on district operations, rather than simply strive to maintain continuous funding, by utilizing $80 million allocated to CARB in the Budget Act of 2023 (Sections 110 and 111 of Chapter 38, Statutes of 2023) for the purpose of statewide equity transportation programs, including Clean Cars 4 All. This bill has also been amended to require preparation, publication, and submission of an annual funding and metrics report to be provided to the Budget Committees of both houses of the Legislature.

Statewide CC4A Codification. CARB is currently developing regulations for its implementation of the statewide program and it anticipates accepting applications by end of 2024. As the CC4A expansion begins rolling out, flexibility for CARB to tailor the program to the needs of the multiple regions under the statewide umbrella could be beneficial. CARB continues to discuss details around statewide implementation with various stakeholders, including the author's office.

According to the Author

"The successful Clean Cars 4 All program has recently been expanded statewide and intends to reduce greenhouse gas emissions as efficiently and equitably as possible. To accomplish this goal, the state must maximize its investments to reduce gasoline consumption, especially among lower-income consumers who cannot afford to live near their workplaces and spend large portions of their income on fuel for long distance commutes. AB 2401 will improve ZEV equity and air quality by codifying the expanded Clean Cars 4 All program, requiring vehicle data collection to allow for more targeted outreach to the lowest-income Californians, and increasing incentive amounts for the lowest income, highest mileage drivers."

Arguments in Support

The co-sponsors—Coalition for Clean Air, Coltura, GLI, UCS, and Valley Clean Air Now—state "AB 2401 provides a solution to the aforementioned issues by requiring the Air Resources Board to collect additional data and use it to establish a needs-based approach to identify and target outreach and incentives to low-income, high-mileage drivers with older, high-polluting vehicles. This measure additionally ensures that expansions of the program are subject to the same requirements established by this measure and previously enacted equity, funding, and tax exemption provisions."

Arguments in Opposition

None on file.

FISCAL COMMENTS

According to the Assembly Appropriations Committee, in its analysis of the April 9, 2024 version of the bill: "ARB estimates ongoing annual costs of approximately $1 million (Greenhouse Gas Reduction Fund (GGRF)) for five new positions to develop a methodology to prioritize vehicle retirement based on the required criteria; track and report both program data at the census tract level and GHG emissions reductions per vehicle retired based on miles per gallon and the miles traveled under the registered owner; adjust incentive levels for vehicles manufactured prior to 2004 or that are at least 20 years old and vehicles with poor fuel economy and the most vehicles miles traveled; collect, evaluate, and share accounting of program funds by district; establish procedures for reallocating funds as required; gather public input through workshops and other outreach events; develop and implement a targeted outreach strategy in DACs and LICs in partnership with air districts; and other tasks."

According to the Senate Appropriations Committee, in its analysis of the August 5, 2024 version of the bill: "CARB estimates ongoing costs of about $1 million annually (Greenhouse Gas Reduction Fund [GGRF]) to facilitate a public process, create methodology for tracking and reporting, and incorporate additional data analysis, among other things."

VOTES:

ASM TRANSPORTATION: 15-0-0

YES: Wilson, Davies, Aguiar-Curry, Berman, Juan Carrillo, Hart, Hoover, Jackson, Lowenthal, Papan, Sanchez, Ting, Wallis, Ward, Wicks

ASM NATURAL RESOURCES: 11-0-0

YES: Bryan, Flora, Bauer-Kahan, Friedman, Hoover, Kalra, Joe Patterson, Muratsuchi, Pellerin, Wicks, Wood

ASM APPROPRIATIONS: 15-0-0

YES: Wicks, Sanchez, Arambula, Bryan, Calderon, Wendy Carrillo, Dixon, Mike Fong, Grayson, Haney, Hart, Jim Patterson, Pellerin, Ta, Villapudua

ASSEMBLY FLOOR: 72-0-8

YES: Addis, Aguiar-Curry, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Juan Carrillo, Wendy Carrillo, Chen, Connolly, Davies, Dixon, Flora, Mike Fong, Vince Fong, Gabriel, Gallagher, Garcia, Gipson, Grayson, Haney, Hart, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Rendon, Reyes, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Wood, Zbur, Robert Rivas

ABS, ABST OR NV: Calderon, Cervantes, Megan Dahle, Essayli, Friedman, Holden, Mathis, Luz Rivas

UPDATED

VERSION: August 5, 2024

CONSULTANT: Stephanie Choing / TRANS. / (916) 319-2093 FN: 0004636

 THIRD READING  

Bill No: AB 2401

Author: Ting (D), et al.

Amended: 8/5/24 in Senate

Vote: 21

SENATE ENVIRONMENTAL QUALITY COMMITTEE: 7-0, 6/19/24

AYES: Allen, Dahle, Gonzalez, Hurtado, Menjivar, Nguyen, Skinner

SENATE TRANSPORTATION COMMITTEE: 15-0, 6/25/24

AYES: Cortese, Niello, Allen, Archuleta, Becker, Blakespear, Dahle, Dodd, Gonzalez, Laird, Limón, Newman, Nguyen, Seyarto, Umberg

SENATE APPROPRIATIONS COMMITTEE: 7-0, 8/15/24

AYES: Caballero, Jones, Ashby, Becker, Bradford, Seyarto, Wahab

ASSEMBLY FLOOR: 72-0, 5/22/24 - See last page for vote

SUBJECT: Clean Cars 4 All Program

SOURCE: Coalition for Clean Air

Coltura

Greenlining Institute

Union of Concerned Scientists

Valley Clean Air Now

DIGEST:

This bill would make several changes to the Clean Cars 4 All (CC4A) Program, including but not limited to codifying a statewide CC4A program, potentially reallocating funds between statewide and air district-run CC4A programs, expanding reporting requirements established pursuant to SB 1382 (Gonzalez, Chapter 375, Statutes of 2022), and prioritizing certain CC4A recipients who drive older vehicles greater amounts in more pollution-burdened areas.

ANALYSIS:

Existing law:

1. Establishes the California Air Resources Board (CARB) as the air pollution control agency in California and requires CARB, among other things, to control emissions from a wide array of mobile sources and coordinate, encourage, and review the efforts of all levels of government as they affect air quality. (Health and Safety Code (HSC) §39500 et seq.)
   
2. Establishes the Clean Cars 4 All (CC4A) Program, to be administered by CARB, to focus on achieving reductions in the emissions of GHGs, improvements in air quality, and benefits to low-income state residents through the replacement of high-polluter motor vehicles with cleaner and more efficient motor vehicles or a mobility option. (HSC §44124.5)
   

This bill:

1. Adds, to the list of specific, measurable goals for the replacement of passenger vehicles and light- and medium-duty trucks that are high polluters CARB must set annually, a requirement that CARB prioritize vehicle retirement in areas of the state that have:
   1. The highest percentage of people residing in disadvantaged and low-income communities;
   2. The highest number of vehicles manufactured prior to 2004 or that are at least 20 years old; and
   3. The highest of vehicles with poor fuel economy and the most vehicle miles traveled.
      
2. Requires that the regulation implementing CC4A also ensure:
   1. There is a statewide CC4A program managed by CARB that functions only in areas of the state where the air district does not have a CC4A program;
   2. The application process for CC4A includes the performance metrics for evaluating funding delivery and program administration and implementation established pursuant to SB 1382 (Gonzalez, 2022);
   3. CARB establishes triggers and procedures for reallocating funds from CC4A programs with surplus funds to those that have exhausted funding and have demonstrated a need;
   4. CARB tracks and reports CC4A program data at the census tract level; and
   5. CARB tracks and reports greenhouse gas (GHG) emission reductions per vehicle retired based on miles per gallon and the miles traveled under the registered owner.
      
3. Requires CARB to track and report:
   1. All CC4A program data at the census tract level to support eligibility criteria that offer increased incentives for residents of DACs; and
   2. GHG emissions reductions per vehicle retired based on miles per gallon and the miles traveled under the registered owner.
      
4. Requires CARB to strive to maintain continuous funding to each district participating in the CC4A program from the moneys made available to CARB for the program.
   
5. Authorizes CARB to, with sufficient justification, use up to 10% of the moneys designated for incentives outreach.
   
6. Requires CARB to establish a means-based strategy to identify and provide increased incentives to potential recipients under the CC4A program who meet specified criteria.
   

Background

1. Clean Cars 4 All. One of the enduring challenges in the widespread adoption of clean light-duty vehicles in the state has been overcoming the financial obstacle of vehicle purchase faced by lower-income households, many of which rely heavily on cars. To meet this need, in June 2015 CARB introduced the Clean Cars 4 All (CC4A, previously called the Enhanced Fleet Modernization Program [EFMP] Plus-Up pilot) program. CC4A was designed to better integrate vehicle retirement and replacement incentive programs and to provide a larger benefit to low- and moderate-income households. CC4A is a program that focuses on providing incentives to lower-income California drivers to scrap their older, high-polluting car and replace it with a zero- or near-zero emission replacement. The program aims to focus the benefits of the program on low-income and disadvantaged communities and has a heavy emphasis on consumer protections, education of the new technologies, and coordination with other clean transportation programs.
   
   The program has now been operating for nine years and extended to five air districts, during which time districts have (as of November 2022) been allocated over $436 million in funding, and placed over 13,000 vehicles with eligible households. The program has reached record levels of applications more recently, particularly as the other major light-duty ZEV incentive program (the Clean Vehicle Rebate Project) shut down last year.
   
2. Who benefits from CC4A? Underserved communities and communities of color disproportionately experience the negative impacts of vehicle pollution. Studies consistently show that mobile source pollution exposure near major roadways contributes to and exacerbates asthma, impairs lung function, and increases cardiovascular mortality. Residents of communities located near major roadways, often low-income or communities of color, are at increased risk of asthma attacks and other respiratory and cardiac effects. These communities are also more sensitive and likely to experience the negative impacts of climate change. This history of disproportionate exposure to polluted air makes it essential to prioritize low-income communities and priority populations who will benefit the most from the reduced emissions and cost-saving benefits of cleaner, newer vehicles and alternative methods of transportation.

The residents in these communities are often unable to afford the cleanest, most fuel-efficient vehicle technologies available. CC4A program provides much-needed incentives for lower-income residents living in and near disadvantaged communities who scrap their old vehicles and purchase or lease new or used hybrid, plug-in hybrid (PHEV), zero-emission (ZEV) replacement vehicles, or alternative mobility options.

1. Statewide CC4A versus air district CC4A. In concert with the conclusion of CVRP, CARB announced that they would establish a statewide CC4A program (which, together with the Financing Assistance Program, would collectively be called the Driving Clean Assistance Program (DCAP)) to provide needs-based zero-emission vehicle (ZEV) incentives to lower-income Californians in places where existing, air district-run CC4A programs did not cover.
   
   After a brief solicitation in early 2023, CARB selected the Community Housing Development Corporation (CHDC) to administer the inchoate statewide program. CHDC is a community-based organization (CBO) in North Richmond founded in 1990 and is a full-service housing development corporation that also provides supportive services such as financial and credit counseling and community outreach.
   
   The five air districts that administer CC4A today cover 85% of the population of the state, and 95% of its DACs. Thus, the statewide DCAP will cover the remaining 15% of the state’s population. Nevertheless (and ostensibly due in part to additional upfront costs in setting up a new program) the statewide program is slated to receive more funding in the current budget than the district-run programs. As of today, the 15% of Californians outside the five participating air districts are not yet able to access CC4A funding, which will change whenever CHDC is able to start offering the program.
   

Comments

1. Purpose of Bill. According to the author, “With the retirement of CVRP, California’s Clean Cars 4 All serves as the state’s flagship vehicle incentive program designed to help low-income drivers access zero-emission vehicles (ZEVs) and retire old, polluting vehicles from the roads. The successful Clean Cars 4 All program has recently been expanded statewide and intends to reduce greenhouse gas emissions as efficiently and equitably as possible. To accomplish this goal, the state must maximize its investments to reduce gasoline consumption, especially among lower-income consumers who cannot afford to live near their workplaces and spend large portions of their income on fuel for long-distance commutes. AB 2401 will improve ZEV equity and air quality by codifying the expanded Clean Cars 4 All program, requiring vehicle data collection to allow for more targeted outreach to the lowest-income Californians, and increasing incentive amounts for the lowest income, highest mileage drivers.”
   
2. Adjusting administration and execution at once. This bill can be roughly divided into two separate policy goals. It would codify the statewide CC4A program, thus bringing it under the same existing (and proposed-to-be-expanded) reporting and equity requirements that apply to the current air district programs.
   
   The bill would also change details about how all CC4A programs are run in the state in order to target incentives more specifically at gasoline superusers and old vehicles. This portion is similar to Assembly bills introduced by this author in each of the last two years, AB 2816 (Ting, 2022) and AB 1267 (Ting, 2023), both of which died in the Assembly Appropriations Committee. The following comments will discuss each of these aims in more detail.
3. Aim 1: bringing multiple programs under the same standard. Among other things, this bill notably brings the statewide CC4A program into the existing CC4A statute. This would require the statewide program to comply with SB 1382, which it does not currently. The provisions of SB 1382 were modeled off of the findings of a 2021 Luskin Center study, and they required CARB to consider a number of equity-related metrics including: the number of vouchers deployed, the proportion of applications that have successfully resulted in replacement transactions or mobility voucher, demand for vouchers, proportional investment to underserved populations, and populations in eligible CC4A zip codes. By collecting and considering this information, SB 1382 and this bill both attempt to better understand who is using CC4A, where CC4A funds are going, and how distributional equity can be better achieved in awarding CC4A grants.
   
   This seems like a commonsense alignment of program standards. Indeed, the current situation seems unfair; why would the Legislature want the five implementing air districts to report on the utilization and distribution of CC4A, but not require the statewide administrator and CARB to do so?
   
   Additionally, this bill expands the information that must be reported pursuant to SB 1382 as well. Under this proposal, information would need to be reported for all CC4A programs regarding targeted outreach to low-income or disadvantaged communities with the most vehicles that are old, driven the most, and have the poorest fuel economy. These changes seem to be done to comport the SB 1382 requirements with the other elements of this bill, discussed below.
   
4. Aim 2: targeting dollars to maximize outcomes. In addition to aligning the equity reporting requirements of SB 1382 between air district-run and the statewide programs, this bill attempts to direct CC4A grants to the vehicles and drivers who will have the greatest emission reduction benefits from moving to ZEVs. Specifically:
   
   1. Pre-2004 vehicles. According to the June 2023 Cleaner Car, Cleaner Air study from The Greenlining Institute and the Union of Concerned Scientists, vehicles on the road manufactured before 2004, despite being responsible for only 12% of the miles driven by cars in the state, produce 73% of the state’s nitrogen oxide (NOx) and 64% of the state’s reactive organic gas pollution.
      
      Prioritizing these disproportionately emitting vehicles could be an effective way to use limited CC4A resources. However, according to CARB, even today 87% of grants awarded through the program already go to pre-2004 vehicles. Are pre-2004 vehicles such an environmental scourge that they merit further incentives to get them off the road faster? Will aging, pre-2004 vehicles already be retired quickly enough as is? Should regions with higher-than-average concentrations of pre-2004 cars be prioritized for CC4A? Are any added administrative or application costs or complexities of doing any of the above justified by the benefits?
   2. Gasoline superusers. Car-owning Californians may drive a few miles per week, hundreds of miles per day, or anywhere in between. If they meet the eligibility criteria for CC4A, they would get the same grant to scrap and replace their vehicle all the same. The author of AB 2401 has introduced two previous bills to—in some way—prioritize higher-mileage drivers.
      
      Obviously, a single CC4A grant would have a much greater emission reduction impact if switched 50,000 miles per year from ICE to ZEV, rather than 1,000 miles. But what is the cost of doing so? There is a careful balance to be struck between program application complexity, successful targeting of incentives, and maximizing emission reduction outcomes. It is not clear what the ideal balance between those factors is.
      
5. Means-based strategy. Under this bill, CARB would be directed to establish a means-based strategy to identify certain high-priority potential CC4A recipients (specifically, those who are in the 10% most-burdened DACs, own a pre-2004 vehicle or one more than 20 years old, and own a vehicle with poor fuel economy and high annual miles traveled). CARB and the air districts would then be required to use this strategy to direct increased incentives to those high-priority recipients.
   
   To be clear, this would provide increased incentives to those recipients, not limit eligibility. Nevertheless, this is another case where efficiency and equity should be balanced. There is no doubt that individuals meeting all of the criteria above would have a greater impact on statewide emissions by moving to a ZEV than someone who did not meet those criteria. But even still, care must be taken to do so without creating undue added complexity or cost that could negatively impact CC4A outcomes overall.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

Acording to the Senate Approprations Committee, CARB estimates ongoing costs of about $1 million annually (Greenhouse Gas Reduction Fund [GGRF]) to facilitate a public process, create methodology for tracking and reporting, and incorporate additional data analysis, among other things.

SUPPORT: (Verified 8/15/24)

Coalition for Clean Air (co-source)

Coltura (co-source)

Greenlining Institute (co-source)

Union of Concerned Scientists (co-source)

Valley Clean Air Now (co-source)

350 Bay Area Action
350 Conejo / San Fernando Valley
350 Humboldt
Active San Gabriel Valley
California Electric Transportation Coalition
California Environmental Voters
California Environmental Voters
Chargepoint, INC
Citizens Climate Lobby
Climate Action California
Climate Reality Project - Silicon Valley Chapter
Climate Reality San Francisco Bay Area Chapter
Communities for A Better Environment
Democrats of Rossmoor
Ecology Action
Edison International and Affiliates, Including Southern California Edison
Environment California
Environmental Defense Fund
Friends Committee on Legislation of California
Greenlatinos
Lutheran Office of Public Policy - California
Nrdc
Pacific Gas and Electric Company and Its Affiliated Entities
Plug in America
Recolte Energy
Santa Cruz Climate Action Network
Sierra Club California
Silicon Valley Youth Climate Action
Solano County Democratic Central Committee
Sustainable Mill Valley
Sustainable Rossmoor
The Climate Center
Transformative Wealth Management LLC
Voices for Progress
Vote Solar
Zero-waste People Power

34 Individuals

OPPOSITION: (Verified 8/15/24)

None received

ASSEMBLY FLOOR: 72-0, 5/22/24

AYES: Addis, Aguiar-Curry, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Juan Carrillo, Wendy Carrillo, Chen, Connolly, Davies, Dixon, Flora, Mike Fong, Vince Fong, Gabriel, Gallagher, Garcia, Gipson, Grayson, Haney, Hart, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Rendon, Reyes, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Wood, Zbur, Robert Rivas

NO VOTE RECORDED: Calderon, Cervantes, Megan Dahle, Essayli, Friedman, Holden, Mathis, Luz Rivas

Prepared by: Eric Walters / E.Q. / (916) 651-4108

8/19/24 17:46:26

**** END ****

SENATE COMMITTEE ON APPROPRIATIONS

Senator Anna Caballero, Chair

2023 - 2024 Regular Session

AB 2401 (Ting) - Clean Cars 4 All Program

Bill Summary:

This bill would require the California Air Resources Board (CARB), in administering the Clean Cars 4 All Program (CC4A), to prioritize vehicle retirement in certain areas of the state, potentially reallocating funds between statewide and air-district run programs, and would require CARB to establish a means-based strategy for incentive increases.

Fiscal Impact:

• CARB estimates ongoing costs of about $1 million annually (Greenhouse Gas Reduction Fund [GGRF]) to facilitate a public process, create methodology for tracking and reporting, and incorporate additional data analysis, among other things.

Background:

CC4A provides incentives to help low-income consumers living in priority populations to replace their older higher-polluting vehicles with newer and cleaner alternatives. Income-eligible residents residing near or in DACs and in five participating air districts are eligible to participate in the program. In June 2015, CARB introduced CC4A (previously called the Enhanced Fleet Modernization Program [EFMP] Plus-Up pilot) program. CC4A was designed to better integrate vehicle retirement and replacement incentive programs and to provide a larger benefit to low- and moderate-income households. The program has now been operating for nine years and extended to five air districts, during which has placed over 13,000 vehicles with eligible households. The average vehicle retired is about 22 years old with an estimated fuel economy of 21.5 miles per gallon. The average replacement vehicle has a fuel economy of 80 miles per gallon equivalent.

To date, the program has been allocated $464 million (General Fund and GGRF) and has expended approximately $219 million. The Governor’s proposed budget for fiscal year (FY) 2024-25 delays $45 million of CC4A funding from FY 2024-25 to FY 2027-28.

The program has reached record levels of applications more recently, particularly as the other major light-duty ZEV incentive program (the Clean Vehicle Rebate Project) shut down last year.

Supporters of this bill cite a report showing that despite making up only 19% of the vehicles in the state, pre-2004 vehicles emit three times as much smog-forming nitrogen oxides as compared to all 2004 and later vehicles combined. The study further noted that communities with the highest exposure to pollution from pre-2004 vehicles are home to higher percentages of people of color. To reduce inequitable exposure to pollution, the report concluded that the state should prioritize incentives and target outreach and education toward priority populations owning pre-2004 vehicles and living in areas with high concentrations of older vehicles.

Proposed Law:

This bill would require CARB, in administering CC4A, to prioritize vehicle retirement in areas of the state with the highest percentages of low-income, high-mileage drivers with older, high-polluting vehicles, ensure program incentives are available statewide, potentially reallocating funds between statewide and air-district run programs, and require CARB to establish a means-based strategy to provide an increased incentive to potential recipients satisfying additional qualifying criteria. Specifically, this bill would:

1. Add as a goal of CC4A prioritizing vehicle retirement in areas of the state that have the highest percentage of people residing in disadvantaged and low-income communities, (DACs and LICs) the highest number of old vehicles, and the highest number of vehicles with poor fuel economy and the most vehicle miles traveled. (VMT)
2. Specify that the incentives provided under CC4A are available in all areas of the state and requires CARB to only manage these incentives in areas of the state where the local air quality management district has not elected to participate in the program.
3. Require CARB to track and report all CC4A Program data at the census tract level to support eligibility criteria that offers increased incentives for residents of disadvantaged communities, and GHG emissions reductions per vehicle retired based on miles per gallon and the miles traveled under the registered owner.
4. Require CARB, in its annual accounting of moneys allocated to and expended by the CC4A, to separately display the portions of the program managed by each district or CARB and to include projections of available funds for each portion of the program.
5. Require CARB, in its annual performance analysis of the program, to include an evaluation of the funding for targeted outreach in communities targeted by this bill, including whether funding should be modified to reach program goals.
6. Require CARB to establish triggers and procedures to reallocate funds between the portions of CC4A managed by CARB or the air districts that have a surplus of funds to other portions that have exhausted program funding and demonstrate a need.
7. Require CARB to strive to maintain continuous funding to each district participating in the CC4A from the moneys made available for the program.
8. Require CARB, when allocating funding, to consider, instead of the population in eligible zip codes, the number and total value of vouchers deployed and metrics of the retired vehicles, as specified.
9. Replace the general authority for 10% of CC4A moneys to be used for outreach programs with an authorization for 10% of moneys allocated to districts to be used for outreach and only 5% of moneys for areas where CARB manages the program for outreach. Authorizes an additional 5% of moneys to be used by CARB specifically for outreach to further the goal of replacing vehicles in DACs and LICs with old, inefficient, and high VMT vehicles.
10. Require CARB to establish and implement a means-based strategy, in coordination with air districts and local nonprofit and community organizations, as specified.
11. Require CARB to establish an increased incentive to be provided to individuals who meet all these criteria.
12. Require CARB to update the CC4A guidelines by July 1, 2026.

Related Legislation:

AB 1267 (Ting) 2023 would have to required CARB to ensure that beginning January 1, 2025, an additional incentive is awarded under a ZEV incentive program to a recipient who is a gasoline superuser, as defined. This bill was held in the Assembly Appropriations Committee.

AB 2816 (Ting) 2022 would have required CARB to award incentives for passenger ZEVs based on the amount of gasoline or diesel the applicant’s vehicle consumed. This bill was held in the Assembly Appropriations Committee.

Staff Comments:

The 2024-25 budget requires CARB to consider specified metrics in allocating funding under the Clean Cars 4 All Program. The omnibus public resources budget trailer bill (AB 156, Committee on Budget) also requires CARB to annually report to the Legislature the amount of funding allocated by CARB to the statewide Clean Cars 4 All Program and to each local district Clean Cars 4 All program and detailed performance metrics for the state and local programs, as specified.

-- END --

4SENATE COMMITTEE ON TRANSPORTATION

Senator Dave Cortese, Chair

2023 - 2024 Regular

Bill No: AB 2401 Hearing Date: 6/25/2024

SUBJECT: Clean Cars 4 All Program

DIGEST: This bill would require the California Air Resources Board (CARB), in administering the Clean Cars 4 All Program, to prioritize vehicle retirement in areas of the state with the highest percentages of low-income, high-mileage drivers with older, high-polluting vehicles, ensure program incentives are available statewide, potentially reallocating funds between statewide and air-district run programs, and require CARB to establish a means-based strategy to provide an increased incentive to potential recipients satisfying additional qualifying criteria.

ANALYSIS:

Existing law:

1. Establishes California Air Resources Board (CARB) as the air pollution control agency in California and requires CARB, among other things, to control emissions from a wide array of mobile sources and coordinate with local air districts to control emission from stationary sources in order to implement the Federal Clean Air Act. (HSC § 39602; HSC § 39602.5)
   
2. Requires, pursuant to SB 32 (Pavley, Chapter 249, Statutes of 2016) that CARB ensures that statewide greenhouse gas (GHG) emissions are reduced to at least 40% below 1990 levels by 2030. (HSC §38566)
   
3. Provides, pursuant to the California Climate Crisis Act (AB 1279 (Muratsuchi), Chapter 337, Statutes of 2022) that it is the policy of the state to achieve net zero GHG emissions as soon as possible but no later than 2045; and ensure that by 2045, GHG emissions are reduced to at least 85% below 1990 levels.
4. Establishes the Clean Cars 4 All (CC4A) Program, administered by CARB, to focus on achieving reductions in GHG emissions, improvements in air quality, and benefits to low-income state residents through the replacement of high-polluter motor vehicles with cleaner and more efficient motor vehicles or a mobility option. (HSC §44124.5)

This bill:

1. Adds as a goal of CC4A prioritizing vehicle retirement in areas of the state that have the highest percentage of people residing in disadvantaged and low-income communities, (DACs and LICs) the highest number of old vehicles, and the highest number of vehicles with poor fuel economy and the most vehicle miles traveled. (VMT)
2. Specifies that the incentives provided under CC4A are available in all areas of the state and requires CARB to only manage these incentives in areas of the state where the local air quality management district has not elected to participate in and manage the program.
3. Requires CARB to track and report all CC4A Program data at the census tract level to support eligibility criteria that offers increased incentives for residents of disadvantaged communities, and GHG emissions reductions per vehicle retired based on miles per gallon and the miles traveled under the registered owner.
4. Requires CARB, in its annual accounting of moneys allocated to and expended by the CC4A, to separately display the portions of the program managed by each district or CARB and to include projections of available funds for each portion of the program.
5. Requires CARB, in its annual performance analysis of the program, to include an evaluation of the funding for targeted outreach in communities targeted by this bill, including whether funding should be modified to reach program goals.
6. Requires CARB to establish triggers and procedures to reallocate funds between the portions of CC4A managed by CARB or the air districts that have a surplus of funds to other portions that have exhausted program funding and demonstrate a need.
7. Requires CARB to strive to maintain continuous funding to each district participating in the CC4A from the moneys made available for the program.
8. Requires CARB, when allocating funding, to consider, instead of the population in eligible zip codes, the total value of vouchers deployed and metrics of the retired vehicles including:
   1. High average vehicle miles traveled, as determined by odometer readings;
   2. Low fuel economy of the vehicles; and
   3. Older model year of the vehicles.
9. Replaces the general authority for 10% of CC4A moneys to be used for outreach programs with an authorization for 10% of moneys allocated to districts to be used for outreach and only 5% of moneys for areas where CARB manages the program for outreach. Authorizes an additional 5% of moneys to be used by CARB specifically for outreach to further the goal of replacing vehicles in DACs and LICs with old, inefficient, and high VMT vehicles.
10. Requires CARB to establish and implement a means-based strategy, in coordination with air districts and local nonprofit and community organizations, to identify potential recipients for CC4A who:
    1. Are living in the top decile of DACs;
    2. Own a vehicle manufactured before 2004 or is at least 20 years old;
    3. Own a vehicle with poor fuel economy and a high number of average annual vehicle miles traveled; and
    4. Are from an underserved population.
11. Requires CARB to establish an increased incentive to be provided to individuals who meet all these criteria.
12. Requires CARB to update the CC4A guidelines by July 1, 2026.

COMMENTS:

1. Purpose of bill. According to the author, “With the retirement of CVRP, California’s Clean Cars 4 All serves as the state’s flagship vehicle incentive program designed to help low-income drivers access zero-emission vehicles (ZEVs) and retire old, polluting vehicles from the roads. The successful Clean Cars 4 All program has recently been expanded statewide and intends to reduce greenhouse gas emissions as efficiently and equitably as possible. To accomplish this goal, the state must maximize its investments to reduce gasoline consumption, especially among lower-income consumers who cannot afford to live near their workplaces and spend large portions of their income on fuel for long-distance commutes. AB 2401 will improve ZEV equity and air quality by codifying the expanded Clean Cars 4 All program, requiring vehicle data collection to allow for more targeted outreach to the lowest-income Californians, and increasing incentive amounts for the lowest income, highest mileage drivers.”
2. Transportation emissions. According to CARB, the transportation sector is responsible for about 40 percent of GHG, 80 percent of nitrous oxides (NO_X)_, and 90 percent of diesel particulate matter emissions (DPM) in California. Broadly implementing zero-emission and pollution reduction technologies in the transportation sector is necessary to improve public health and help prevent climate change. The largest source of transportation emissions, particularly GHGs, is on-road motor vehicles. These emissions are disproportionately concentrated in disadvantaged and low-income communities, in part because households with lower incomes have to drive longer distances, spend a higher percentage of monthly income on fuel, and tend to drive older, more polluting vehicles. In the transportation sector, measures to reduce GHG emissions include requiring the use of low carbon fuels, cleaner vehicles, and promoting transportation choices that reduce growth in VMT.
3. Clean Cars 4 All. One of the enduring challenges in the widespread adoption of clean light-duty vehicles in the state has been the high purchase price, particularly for lower-income households, many of which rely heavily on cars. To meet this need, in June 2015 CARB introduced CC4A (previously the Enhanced Fleet Modernization Program) to integrate vehicle retirement and replacement incentive programs and to provide a larger benefit to low- and moderate-income households. CC4A is a program that focuses on providing incentives to lower-income California drivers to scrap their older, high-polluting car and replace it with a zero- or near-zero emission replacement. The program aims to focus the benefits of the program on LICs and DACs and has a heavy emphasis on consumer protections, education of the new technologies, and coordination with other clean transportation programs.
   
   The program has been operating for nine years and extended to five air districts, during which time districts have (as of November 2022) been allocated over $436 million in funding, and placed over 13,000 vehicles with eligible households. The program has reached record levels of applications more recently, particularly as the other major state light-duty ZEV incentive program (the Clean Vehicle Rebate Project) shut down last year. According to the 2021-2022 AB 630 (Cooper, Chapter 636, Statutes of 2017) report, CC4A programs funded replacing 3,170 vehicles, of which 1,879 (59%) bought a plug-in hybrid electric vehicle replacement, 903 (28%) got a conventional hybrid, 369 (12%) got a battery electric vehicle, 15 (0,5%) got fuel cell electric vehicles, and 4 (0.1%) opted for an alternative mobility voucher.
4. 2021 Luskin Center study. A report titled Procedural Equity in Implementing California’s Clean Cars 4 All Program was published by the University of California, Los Angeles’s Luskin Center for Innovation in May of 2021. The report studied whether and how implementing districts’ strategies have achieved procedural equity outcomes and distributive equity. The report concluded that procedural equity was not consistent across all CC4A implementations. They found that the extent of outreach, variation in outreach approaches employed, and effort through partnerships with local community-based organizations (CBOs) varied widely across the districts. Moreover, greater success was found by synchronizing CC4A benefits with other assistance programs, as well as by involving and compensating CBO staff in outreach, and by providing direct assistance with applications to interested parties.

Partially in response to this study the Legislature passed SB 1382 (Gonzalez, Chapter 375, Statutes of 2022), which, among other provisions, required CARB to take actions to improve CC4A participation by households living in areas experiencing high levels of air pollution or poverty. It also required CARB to consider a number of equity-related metrics including the number of vouchers deployed, the proportion of successful applications, demand for vouchers, proportional investment to underserved populations, and populations in eligible CC4A zip codes. This information will help us better understand who is using CC4A, where CC4A funds are going, and how distributional equity can be better achieved.

This bill expands the information that must be reported pursuant to SB 1382. Under this proposal, information would need to be reported for all CC4A programs regarding targeted outreach to low-income or disadvantaged communities with the most vehicles that are old, driven the most, and have the poorest fuel economy. The bill also requires CARB in its annual accounting of moneys allocated to and expended by the CC4A, to separately display the portions of the program managed by each district and the board.

1. Aligning statewide and air district CC4As. Historically CC4A has been administered by five air districts, which cover 85% of the population of the state and 95% of its DACs, leaving 15% of Californians ineligible for the program. In concert with the conclusion of CVRP, CARB announced that they would establish a statewide CC4A program (which, together with the Financing Assistance Program, would collectively be called the Driving Clean Assistance Program (DCAP)) to provide needs-based ZEV incentives to lower-income Californians in places where existing, air district-run CC4A programs did not cover. Ostensibly due in part to additional upfront costs in setting up a new program, the statewide program is slated to receive more funding in the current budget than the district-run programs. The exact allocations of funds between the statewide and district-run programs remains an open point of discussion in the budget.

This bill would codify the statewide CC4A program and require it to comply with SB 1382, which it does not do currently. This bill also requires CARB to establish triggers and procedures to allocate funds from areas of the program that have a surplus to other portions that have exhausted program funding and demonstrated a need. This is primarily included if the state-wide program, has a surplus of funds while a district run program is oversubscribed. Ensuring continuity of funding helps CC4A be a reliable resource for low-income Californians who want to make the switch to ZEVs.

1. Targeting funds to maximize benefits. This bill attempts to direct CC4A grants to the vehicles and drivers who will have the greatest emission reduction benefits from moving to ZEVs. It adds this targeting to the goals of the program, requiring collecting and publishing of certain data, and establishing enhanced incentives for participants whose vehicle replacement would most benefit the environment. It would retain the current amount of incentives for other users of the program.

The first group of vehicles this bill targets is old vehicles, specifically those made before 2004 or that are over 20 years old. According to the June 2023 Cleaner Car, Cleaner Air study from The Greenlining Institute and the Union of Concerned Scientists, vehicles on the road manufactured before 2004 produce a disproportionate share of harmful emissions because of tailpipe emission standards established by CARB in 2004. Despite being responsible for only 12% of the miles driven by cars in the state, pre-2004 vehicles produce 73% of the state’s NOx and 64% of the state’s reactive organic gas pollution. Prioritizing these disproportionately emitting vehicles could be an effective way to use limited CC4A resources. However, according to CARB, even today 87% of grants awarded through the program already go to pre-2004 vehicles. The benefit of further prioritization seems somewhat marginal and may confuse other priorities like regional targeting of funds or reducing administrative costs and complexities.

The second group this bill would target is people who drive a lot. A single CC4A grant would have a much greater emission reduction impact if it switched a vehicle driven 50,000 miles per year from ICE to ZEV, rather than 1,000 miles. In order to determine high-mileage drivers, this bill suggests using odometer readings, a preinspection report from a dismantler, recent smog check readings or repair shop invoices, or sworn statements to determine highly-used vehicles. There is a careful balance to be struck between program application complexity and maximizing emission reduction outcomes. It is not clear what the ideal balance between those factors is.

1. Means-ing well. Under AB 2401, CARB would be directed to establish a means-based strategy to identify certain high-priority potential CC4A recipients (specifically, those who are in the 10% most-burdened DACs, own a pre-2004 vehicle or one more than 20 years old, and own a vehicle with poor fuel economy and high annual miles traveled). CARB and the air districts would then be required to use this strategy to direct increased incentives to those high-priority recipients. To be clear, this would provide increased incentives to those recipients, not limit eligibility to a smaller group of people.
   
   Nevertheless, this is another case where efficiency and equity should be balanced. There is no doubt that individuals meeting all of the criteria above would have a greater impact on statewide emissions by moving to a ZEV than someone who did not meet those criteria. Focusing resources on this group will help better achieve program goals. However, verifying who falls into this category will add some complexity and cost to administering the program that could negatively impact CC4A outcomes overall.
2. Double referred. This bill is double referred and was heard in the Environmental Quality Committee on June 19^th, 2024, and passed 7-0.

Related Legislation:

AB 1267 (Ting, 2023) would have to required CARB to ensure that beginning January 1, 2025, an additional incentive is awarded under a ZEV incentive program to a recipient who is a gasoline superuser, as defined. This bill was held in the Assembly Appropriations Committee.

AB 2816 (Ting, 2022) would have required CARB to award incentives for passenger ZEVs based on the amount of gasoline or diesel the applicant’s vehicle consumed. This bill was held in the Assembly Appropriations Committee.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

According to the Assembly Appropriations Committee:

“ARB estimates ongoing annual costs of approximately $1 million (Greenhouse Gas Reduction Fund (GGRF)) for five new positions to develop a methodology to prioritize vehicle retirement based on the required criteria; track and report both program data at the census tract level and GHG emissions reductions per vehicle retired based on miles per gallon and the miles traveled under the registered owner; adjust incentive levels for vehicles manufactured prior to 2004 or that are at least 20 years old and vehicles with poor fuel economy and the most vehicles miles traveled; collect, evaluate, and share accounting of program funds by district; establish procedures for reallocating funds as required; gather public input through workshops and other outreach events; develop and implement a targeted outreach strategy in DACs and LICs in partnership with air districts; and other tasks.”

POSITIONS: (Communicated to the committee before noon on Wednesday,

June 19, 2024.)

SUPPORT:

350 Bay Area Action
350 Conejo / San Fernando Valley
350 Humboldt
350 Humboldt: Grass Roots Climate Action
350 Sacramento
Active San Gabriel Valley
California Electric Transportation Coalition
California Environmental Voters
California Environmental Voters (formerly Clcv)
California New Car Dealers Association
Chargepoint, INC
Citizens Climate Lobby
Climate Action California
Climate Reality Project - Silicon Valley Chapter
Climate Reality San Francisco Bay Area Chapter
Coalition for Clean Air
Coltura
Communities for A Better Environment
Democrats of Rossmoor
Ecology Action
Edison International and Affiliates, Including Southern California Edison
Environment California
Environmental Defense Fund
Friends Committee on Legislation of California
Greenlatinos
Greenlining Institute; the
Lutheran Office of Public Policy - California
National Resources Defense Council
Nrdc
Pacific Gas and Electric Company and Its Affiliated Entities
Plug in America
Public Health Professionals
Recolte Energy
Santa Cruz Climate Action Network
Sierra Club California
Silicon Valley Youth Climate Action
Solano County Democratic Central Committee
Sustainable Mill Valley
Sustainable Rossmoor
The Climate Center
The Greenlining Institute
Transformative Wealth Management LLC
Transportation Agency for Monterey County (TAMC)
Union of Concerned Scientists
Valley Can (clean Air Now)
Valley Clean Air Now
Voices for Progress
Vote Solar
Zero-waste People Power

OPPOSITION:

None received

-- END --

SENATE COMMITTEE ON ENVIRONMENTAL QUALITY

Senator Gonzalez, Chair

2023 - 2024 Regular

SUBJECT: Clean Cars 4 All Program

DIGEST: This bill would make several changes to the Clean Cars 4 All (CC4A) Program, including but not limited to codifying a statewide CC4A program, potentially reallocating funds between statewide and air district-run CC4A programs, expanding reporting requirements established pursuant to SB 1382 (Gonzalez, 2022), and prioritizing certain CC4A recipients who drive older vehicles greater amounts in more pollution-burdened areas.

ANALYSIS:

Existing law:

1. Establishes the California Air Resources Board (CARB) as the air pollution control agency in California and requires CARB, among other things, to control emissions from a wide array of mobile sources and coordinate, encourage, and review the efforts of all levels of government as they affect air quality. (Health and Safety Code (HSC) §39500 et seq.)
   
2. Establishes the Air Quality Improvement Program (AQIP), administered by CARB in consultation with local air districts, to fund programs that reduce criteria air pollutants, improve air quality, and provide research for alternative fuels and vehicles, vessels, and equipment technologies. (HSC §44274 et seq.)
   
3. Establishes the Clean Cars 4 All (CC4A) Program, to be administered by CARB, to focus on achieving reductions in the emissions of GHGs, improvements in air quality, and benefits to low-income state residents through the replacement of high-polluter motor vehicles with cleaner and more efficient motor vehicles or a mobility option. (HSC §44124.5)
   
4. Directs the California Environmental Protection Agency (CalEPA) to identify disadvantaged communities (DACs) based on geographic, socioeconomic, public health, and environmental hazard criteria. (HSC § 39711)
   

This bill:

1. Adds, to the list of specific, measurable goals for the replacement of passenger vehicles and light- and medium-duty trucks that are high polluters CARB must set annually, a requirement that CARB prioritize vehicle retirement in areas of the state that have:
   1. The highest percentage of people residing in disadvantaged and low-income communities;
   2. The highest number of vehicles manufactured prior to 2004 or that are at least 20 years old; and
   3. The highest of vehicles with poor fuel economy and the most vehicle miles traveled.
      
2. Requires that the regulation implementing CC4A also ensure:
   1. There is a statewide CC4A program managed by CARB that functions only in areas of the state where the air district does not have a CC4A program;
   2. The application process for CC4A includes the performance metrics for evaluating funding delivery and program administration and implementation established pursuant to SB 1382 (Gonzalez, 2022);
   3. CARB establishes triggers and procedures for reallocating funds from CC4A programs with surplus funds to those that have exhausted funding and have demonstrated a need;
   4. CARB tracks and reports all CC4A program data at the census tract level; and
   5. CARB tracks and reports greenhouse gas (GHG) emission reductions per vehicle retired based on miles per gallon and the miles traveled under the registered owner.
      
3. Requires CARB to track and report:
   1. All CC4A program data at the census tract level to support eligibility criteria that offer increased incentives for residents of DACs; and
   2. GHG emissions reductions per vehicle retired based on miles per gallon and the miles traveled under the registered owner.
      
4. Requires CARB to strive to maintain continuous funding to each district participating in the CC4A program from the moneys made available to CARB for the program.
   
5. Authorizes CARB to, with sufficient justification, use up to 10% of the moneys designated for incentives outreach.
   
6. Requires CARB to establish a means-based strategy to identify and provide increased incentives to potential recipients under the CC4A program who meet specified criteria.
   

Background

1. Clean Cars 4 All. One of the enduring challenges in the widespread adoption of clean light-duty vehicles in the state has been overcoming the financial obstacle of vehicle purchase faced by lower-income households, many of which rely heavily on cars. To meet this need, in June 2015 CARB introduced the Clean Cars 4 All (CC4A, previously called the Enhanced Fleet Modernization Program [EFMP] Plus-Up pilot) program. CC4A was designed to better integrate vehicle retirement and replacement incentive programs and to provide a larger benefit to low- and moderate-income households. CC4A is a program that focuses on providing incentives to lower-income California drivers to scrap their older, high-polluting car and replace it with a zero- or near-zero emission replacement. The program aims to focus the benefits of the program on low-income and disadvantaged communities and has a heavy emphasis on consumer protections, education of the new technologies, and coordination with other clean transportation programs.
   
   The program has now been operating for nine years and extended to five air districts, during which time districts have (as of November 2022) been allocated over $436 million in funding, and placed over 13,000 vehicles with eligible households. The program has reached record levels of applications more recently, particularly as the other major light-duty ZEV incentive program (the Clean Vehicle Rebate Project) shut down last year.
   
2. Who benefits from CC4A? Underserved communities and communities of color disproportionately experience the negative impacts of vehicle pollution. Studies consistently show that mobile source pollution exposure near major roadways contributes to and exacerbates asthma, impairs lung function, and increases cardiovascular mortality. Residents of communities located near major roadways, often low-income or communities of color, are at increased risk of asthma attacks and other respiratory and cardiac effects. These communities are also more sensitive and likely to experience the negative impacts of climate change. This history of disproportionate exposure to polluted air makes it essential to prioritize low-income communities and priority populations who will benefit the most from the reduced emissions and cost-saving benefits of cleaner, newer vehicles and alternative methods of transportation.

The residents in these communities are often unable to afford the cleanest, most fuel-efficient vehicle technologies available. CC4A program provides much-needed incentives for lower-income residents living in and near disadvantaged communities who scrap their old vehicles and purchase or lease new or used hybrid, plug-in hybrid (PHEV), zero-emission (ZEV) replacement vehicles, or alternative mobility options.

CC4A incentives are available to participants with household incomes at or below 300 percent of the Federal Poverty Level (FPL). This is currently equivalent to $93,600 per year for a household of four. Historically, at least 90% of program funds have gone to participants in the Low-income (less than or at 225% FPL) category.

1. Program performance. AB 630 (Cooper, Chapter 636, Statutes of 2017) requires CARB to set specific and measurable goals annually for the Enhanced Fleet Modernization Program (EFMP) Scrap Only and the CC4A Scrap-and-Replace programs. AB 630 also requires CARB to evaluate the performance of each program towards these goals and to update the guidelines if necessary, to ensure these goals are met.
   
   As an example, the 2019-2020 AB 630 report covered the performance of the CC4A programs in the South Coast, San Joaquin Valley, Bay Area, and Sacramento Metropolitan air districts. Overall, the programs effectuated 3,412 participants scrapping an old vehicle and purchasing a cleaner replacement. Of those 3,412 participants, 2,095 (61.4%) bought a PHEV, 924 (27%) got a conventional hybrid, 378 (11%) got a battery electric vehicle, 8 (2.3%) got fuel cell electric vehicles, and 7 (2.1%) opted for an alternative mobility voucher.
   
2. 2021 Luskin Center study. A report titled Procedural Equity in Implementing California’s Clean Cars 4 All Program was published by the University of California, Los Angeles’s Luskin Center for Innovation in May of 2021. The report stated that, “The intent and efficacy of outreach to potential CC4A participants is crucial to ensure both procedural and distributive equity in program outcomes… This is particularly true for this program given that districts have discretion in implementation, there has been limited state funding for the program, and the program offers a large benefit for a relatively complex technology to those who successfully apply. It is thus important to analyze strategies used by the districts and program partners to provide both information about the program opportunity as well as support to help navigate the program enrollment process to interested participants, given the limited benefit dollars available compared to the pool of income-eligible and interested households in each region.”

The authors studied whether and how implementing districts’ strategies have achieved procedural equity outcomes, and included a supplementary focus on distributive equity as well. The report concluded that procedural equity was not consistent across all CC4A implementations. They found that the extent of outreach, variation in outreach approaches employed, and effort through partnerships with local community-based organizations (CBOs) varied widely across the districts. Moreover, greater success was found by synchronizing CC4A benefits with other assistance programs, as well as by involving and compensating CBO staff in outreach, and by providing direct assistance with applications to interested parties.

1. Statewide CC4A versus air district CC4A. In concert with the conclusion of CVRP, CARB announced that they would establish a statewide CC4A program (which, together with the Financing Assistance Program, would collectively be called the Driving Clean Assistance Program (DCAP)) to provide needs-based zero-emission vehicle (ZEV) incentives to lower-income Californians in places where existing, air district-run CC4A programs did not cover.
   
   After a brief solicitation in early 2023, CARB selected the Community Housing Development Corporation (CHDC) to administer the inchoate statewide program. CHDC is a community-based organization (CBO) in North Richmond founded in 1990 and is a full-service housing development corporation that also provides supportive services such as financial and credit counseling and community outreach.
   
   The five air districts that administer CC4A today cover 85% of the population of the state, and 95% of its DACs. Thus, the statewide DCAP will cover the remaining 15% of the state’s population. Nevertheless (and ostensibly due in part to additional upfront costs in setting up a new program) the statewide program is slated to receive more funding in the current budget than the district-run programs. As of today, the 15% of Californians outside the five participating air districts are not yet able to access CC4A funding, which will change whenever CHDC is able to start offering the program.
   

Comments

1. Purpose of Bill. According to the author, “With the retirement of CVRP, California’s Clean Cars 4 All serves as the state’s flagship vehicle incentive program designed to help low-income drivers access zero-emission vehicles (ZEVs) and retire old, polluting vehicles from the roads. The successful Clean Cars 4 All program has recently been expanded statewide and intends to reduce greenhouse gas emissions as efficiently and equitably as possible. To accomplish this goal, the state must maximize its investments to reduce gasoline consumption, especially among lower-income consumers who cannot afford to live near their workplaces and spend large portions of their income on fuel for long-distance commutes. AB 2401 will improve ZEV equity and air quality by codifying the expanded Clean Cars 4 All program, requiring vehicle data collection to allow for more targeted outreach to the lowest-income Californians, and increasing incentive amounts for the lowest income, highest mileage drivers.”
   
2. High-touch program. Unlike many other GGRF-funded or even other clean vehicle incentive programs, successful CC4A implementation requires much more contact and dialog with program applicants. This is because these residents—often by virtue of the same inequities that have created a greater need for purchase assistance in the first place—may lack the time and access to navigate potentially byzantine application processes. Simply offering incentives to applicants below a certain income threshold and awarding them on a first-come-first-served basis does not maximize the program’s ability to achieve distributional equity and right historical wrongs.
   
   Program overhead expenses, such as administrative costs, are often considered as a value to be minimized. It stands to reason that maximizing the state dollars awarded to a program that flow through to the program’s recipients means the program is operating “efficiently.” However, that measure of efficiency does not account for the demographics of who is getting the incentives. While program administrators for CC4A should by no means be wasteful, the unique nature of the program may require greater flexibility on outreach and administrative costs.
   
3. Adjusting administration and execution at once. This bill can be roughly divided into two separate policy goals. It would codify the statewide CC4A program, thus bringing it under the same existing (and proposed-to-be-expanded) reporting and equity requirements that apply to the current air district programs.
   
   The bill would also change details about how all CC4A programs are run in the state in order to target incentives more specifically at gasoline superusers and old vehicles. This portion is similar to Assembly bills introduced by this author in each of the last two years (AB 2816 (2022, Ting) and AB 1267 (2023, Ting)), both of which died in the Assembly Appropriations Committee. The following comments will discuss each of these aims in more detail.
4. Aim 1: bringing multiple programs under the same standard. Among other things, AB 2401 notably brings the statewide CC4A program into the existing CC4A statute. This would require the statewide program to comply with SB 1382 (Gonzalez, 2022), which it does not currently. The provisions of SB 1382 were modeled off of the findings of the 2021 Luskin Center study described above, and they required CARB to consider a number of equity-related metrics including: the number of vouchers deployed, the proportion of applications that have successfully resulted in replacement transactions or mobility voucher, demand for vouchers, proportional investment to underserved populations, and populations in eligible CC4A zip codes. By collecting and considering this information, SB 1382 and this bill both attempt to better understand who is using CC4A, where CC4A funds are going, and how distributional equity can be better achieved in awarding CC4A grants.
   
   This seems like a commonsense alignment of program standards. Indeed, the current situation seems unfair; why would the Legislature want the five implementing air districts to report on the utilization and distribution of CC4A, but not require the statewide administrator and CARB to do so?
   
   Additionally, this bill expands the information that must be reported pursuant to SB 1382 as well. Under this proposal, information would need to be reported for all CC4A programs regarding targeted outreach to low-income or disadvantaged communities with the most vehicles that are old, driven the most, and have the poorest fuel economy. These changes seem to be done to comport the SB 1382 requirements with the other elements of this bill, discussed below.
   
5. Aim 2: targeting dollars to maximize outcomes. In addition to aligning the equity reporting requirements of SB 1382 between air district-run and the statewide programs, this bill attempts to direct CC4A grants to the vehicles and drivers who will have the greatest emission reduction benefits from moving to ZEVs. Specifically:
   
   1. Pre-2004 vehicles. According to the June 2023 Cleaner Car, Cleaner Air study from The Greenlining Institute and the Union of Concerned Scientists, vehicles on the road manufactured before 2004 produce a disproportionate share of harmful emissions because of tailpipe emission standards established by CARB in 2004. Despite being responsible for only 12% of the miles driven by cars in the state, pre-2004 vehicles produce 73% of the state’s nitrogen oxide (NOx) and 64% of the state’s reactive organic gas pollution.
      
      It follows that prioritizing these disproportionately emitting vehicles could be an effective way to use limited CC4A resources. However, according to CARB, even today 87% of grants awarded through the program already go to pre-2004 vehicles. Are pre-2004 vehicles such an environmental scourge that they merit further incentives to get them off the road faster? Will aging, pre-2004 vehicles already be retired quickly enough as is? Should regions with higher-than-average concentrations of pre-2004 cars be prioritized for CC4A? Are any added administrative or application costs or complexities of doing any of the above justified by the benefits? These are not questions of objective optimality, but rather of policy preference and legislative priority.
      
   2. Gasoline superusers. Car-owning Californians may drive a few miles per week, hundreds of miles per day, or anywhere in between. If they meet the eligibility criteria for CC4A, they would get the same grant to scrap and replace their vehicle all the same. The author of AB 2401 has introduced two previous bills to—in some way—prioritize higher-mileage drivers, although this is the first time the measure has been heard before this committee.
      
      Obviously, a single CC4A grant would have a much greater emission reduction impact if switched 50,000 miles per year from ICE to ZEV, rather than 1,000 miles. But what is the cost of doing so? This bill suggests using odometer readings, a preinspection report from a dismantler, recent smog check readings or repair shop invoices, or sworn statements to determine (and thus prioritize) highly-used vehicles. There is a careful balance to be struck between program application complexity, successful targeting of incentives, and maximizing emission reduction outcomes. It is not clear what the ideal balance between those factors is.
      

For both of these efforts to better target CC4A funds to maximize outcomes, care should be taken to make sure efficiency and equity are balanced in alignment with the Legislature’s priorities.

1. Clean Cars 4 All… for all. One provision of AB 2401 would require CARB to establish, “triggers and procedures for reallocating funds from portions of the Clean Cars 4 All Program managed by districts or by the state board that have a surplus of funds to other portions of the Clean Cars 4 All Program managed by other districts or the state board that have exhausted program funding and have demonstrated a need.” This is included because of an ongoing and recurring discussion between members of the Legislature, CARB, and stakeholders in the budget process about statewide- versus district-run-CC4A programs.
   
   The two sides of the CC4A program face an odd conundrum, currently. Air districts—due to increased demand resulting from the closure of CVRP and greater availability of ZEVs—are reportedly finding themselves unable to maintain program funding. Meanwhile, the statewide CC4A program administered by CHDC (which has not yet launched) was the proposed recipient of upwards of $100M in the Governor’s proposed Budget. The Legislature has proposed to redirect $75M from the statewide CC4A to the district-run programs. This would maintain $114M from the 2022 and 2023 Budget Acts for the statewide program. As of writing, the 2024-2025 Budget Act has not been finalized, so it is unclear what the fate of these programs' funding will be.
   
   Regardless of the outcome of this particular Budget, there is reason to believe demand for CC4A will continue to increase, and this risk of shortfall may arise again in the future. Thus, it seems reasonable that this bill directs CARB to establish triggers for funding reallocation between the programs. Ensuring continuity of funding helps CC4A be a reliable resource for low-income Californians who want to make the switch to ZEVs. Notably, AB 2401 also directs CARB to strive to maintain continuous funding for the district-run programs.
   
2. Means-based strategy. Under AB 2401, CARB would be directed to establish a means-based strategy to identify certain high-priority potential CC4A recipients (specifically, those who are in the 10% most-burdened DACs, own a pre-2004 vehicle or one more than 20 years old, and own a vehicle with poor fuel economy and high annual miles traveled). CARB and the air districts would then be required to use this strategy to direct increased incentives to those high-priority recipients.
   
   To be clear, this would provide increased incentives to those recipients, not limit eligibility. Nevertheless, this is another case where efficiency and equity should be balanced. There is no doubt that individuals meeting all of the criteria above would have a greater impact on statewide emissions by moving to a ZEV than someone who did not meet those criteria. But even still, care must be taken to do so without creating undue added complexity or cost that could negatively impact CC4A outcomes overall.

DOUBLE REFERRAL:

If this measure is approved by the Senate Environmental Quality Committee, the do pass motion must include the action to re-refer the bill to the Senate Transportation Committee.

Related/Prior Legislation

AB 1267 (Ting) 2023 would have to required CARB to ensure that beginning January 1, 2025, an additional incentive is awarded under a ZEV incentive program to a recipient who is a gasoline superuser, as defined. This bill was held in the Assembly Appropriations Committee.

AB 2816 (Ting) 2022 would have required CARB to award incentives for passenger ZEVs based on the amount of gasoline or diesel the applicant’s vehicle consumed. This bill was held in the Assembly Appropriations Committee.

SOURCE:

Coalition for Clean Air

Coltura

Greenlining Institute

Union of Concerned Scientists

Valley Clean Air Now

SUPPORT:

350 Bay Area Action
350 Conejo / San Fernando Valley
350 Humboldt
Active San Gabriel Valley
California Electric Transportation Coalition
California Environmental Voters
California Environmental Voters (formerly Clcv)
Chargepoint, INC
Citizens Climate Lobby
Climate Action California
Climate Reality Project - Silicon Valley Chapter
Climate Reality San Francisco Bay Area Chapter
Coalition for Clean Air
Coltura
Communities for A Better Environment
Democrats of Rossmoor
Ecology Action
Edison International and Affiliates, Including Southern California Edison
Environment California
Environmental Defense Fund
Friends Committee on Legislation of California
Greenlatinos
Lutheran Office of Public Policy - California
Nrdc
Plug in America
Recolte Energy
Santa Cruz Climate Action Network
Sierra Club California
Silicon Valley Youth Climate Action
Solano County Democratic Central Committee
Sustainable Mill Valley
Sustainable Rossmoor
The Climate Center
The Greenlining Institute
Transformative Wealth Management LLC
Union of Concerned Scientists
Valley Can (clean Air Now)
Voices for Progress
Vote Solar
Zero-waste People Power

34 public health professionals

OPPOSITION:

None received

Positions reflect letters received by noon one week prior to the hearing.

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 2401

Author:(Ting)

As Amended Ver:April 9, 2024

Majority vote

SUMMARY

Requires the California Air Resources Board (CARB), in administering the Clean Cars for All (CC4A) Program, to prioritize vehicle retirement in areas of the state that with the highest percentages of low-income, high-mileage drivers with older, high-polluting vehicles; makes these incentives available statewide; and requires CARB to establish a means-based strategy provide an increased incentive to potential recipients satisfying additional qualifying criteria.

Major Provisions

1. Requires CARB to prioritize vehicle retirement in areas of the state that have the highest percentage of people residing in disadvantaged (DAC) and low-income (LIC) communities, the highest numbers of vehicles manufactured prior to 2004 or that are at least 20 years old, and the highest number of vehicles with poor fuel economy, and the most vehicle miles traveled.
2. Makes incentives provided under CC4A available statewide and requires CARB to manage distribution of incentives only in areas of the state where an air district has elected not to participate.
3. Requires the application process and procedures for delivering available funding for the CC4A Program to include additional performance metrics for evaluating funding delivery and program administration and implementation.
4. Requires CARB to establish procedures for reallocating any surplus of funds from portions of the CC4A that districts manage or by the state board to other districts or the state board that have exhausted CC4A program funding and have demonstrated a need.
5. Requires CARB to track and report all CC4A Program data at the census tract level to support eligibility criteria that offers increased incentives for residents of disadvantaged communities, and greenhouse gas (GHG) emissions reductions per vehicle retired based on miles per gallon and the miles traveled under the registered owner.
6. Requires CARB, in its annual accounting of moneys allocated to CC4A and the expenditures of CC4A by region, to separately display the portions of the program managed by each participating district and by the state board and to include projections of available funds for each portion of the program.
7. Requires CARB to evaluate funding for targeted outreach in LICs or DACs with the highest number of vehicles manufactured before 2004 or that are at least 20 years old that are driven most and have the poorest fuel economy, including whether the funding should be enhanced or modified to reach program goals.
8. Requires CARB to strive to maintain continuous funding to each district participating in the CC4A from the moneys made available to CARB for the Program.
9. Requires CARB to consider additional metrics in allocating funding for CC4A to participating districts and to the portion CARB manages, including the total value of vouchers deployed and for the retired vehicles: (i) high average annual vehicle miles traveled; (ii) low fuel economy of the vehicles; and (iii) older model year of the vehicles.
10. Requires CARB to establish a means-based strategy to identify and provide increased incentives to potential recipients under the CC4A Program who meet all of the following criteria:
11. A person living in the top decile of disadvantaged communities;
12. A person owning a vehicle manufactured before 2004 or a vehicle that is at least 20 years old;
13. A person owning a vehicle with poor fuel economy and a high number of vehicle miles traveled; and,
14. A person from a population that is eligible for but underserved by CC4A.

COMMENTS

The transportation sector generates nearly 40% of state greenhouse gas (GHG) emissions, three-quarters of which are from light-duty passenger vehicles alone. CARB administers a variety programs intended to reduce mobile source emissions, including incentive programs that support consumer adoption of zero‑emission vehicles (ZEVs).

DACs and LICs experience disproportionate amounts of air pollution, but also contribute disproportionately to light-duty vehicular GHG emissions. On average, households with lower incomes have to drive longer distances, spend a higher percentage of monthly income on fuel, and tend to drive older, more polluting vehicles.

According to the co-sponsors of this bill, "in California, light-duty vehicles in the top 20% in terms of gasoline use are using 55% of all private light-duty gasoline" (Coltura's Gasoline Superusers 2.0 report) and "despite making up only 19% of the vehicles in the state, pre-2004 vehicles emit three times as much smog-forming nitrogen oxides as compared to all 2004 and later vehicles combined" (Cleaner Cars, Cleaner Air by GLI and UCS).

CC4A provides incentives to help lower-income drivers replace their old, higher-polluting cars with cleaner transportation options. Participants voluntarily scrap their vehicles in exchange for an incentive useable towards the lease or purchase of new or used replacement vehicles, e.g., a hybrid, plug-in hybrid electric (PHEV), battery electric (BEV), and fuel cell electric vehicles. Participants must have a household income of less than 400% of the federal poverty limit (FPL) and live in a ZIP Code containing a disadvantaged community census tract in order to qualify.

CARB delegates authority to participating air districts to administer CC4A and allocates program funding to them. Currently, the state's five largest regional air districts—in the Bay Area, the San Joaquin Valley, Sacramento, the South Coast and San Diego— have CC4A programs. CARB allows each air district to set additional eligibility criteria tailored to specific regional needs, provided that they meet CARB's minimum eligibility requirements.

In the 2022 and 2023 Budget Acts combined, roughly $200 million in additional funding was appropriated for equity transportation programs, including statewide expansion of CC4A. The statewide expansion is underway with initial roll-out set tentatively by end of 2024. CARB notes that the "statewide expansion will provide access to the program for the nearly 4 million residents in or near low-income communities which contain 60-70% of the 1.3 million older, higher polluting vehicles that may be eligible for replacement." To date, CC4A has been highly successful in retiring the oldest and most polluting vehicles; the majority of vehicles retired under CC4A have been older vehicle models, with 11,628 out of 13,335 retired vehicles (87.20%) being Model Year (MY) 2004 or older, and 13,217 out of 13,335 (99.12%) being MY 2009 or older.

Although the existing district-operated CC4A programs have experienced great success, the current method of distributing funding results in air districts not knowing how much or when CARB will distribute additional funding. As a result, air districts frequently have to turn away applications or place applicants on waitlists until they receive more funding.

CC4A is the only active state-funded ZEV incentive program for personal use vehicles. Several studies have found that up-front cost is likely the biggest barrier to ZEV adoption, and lower-income CC4A recipients may find that current EV incentives are not enough to offset the cost of a new or used ZEV. For example, CARB has estimated that the average cost of a vehicle receiving a CC4A incentive has gone from roughly $20,000 in 2016 to $35,000 at the end of 2021—an increase of $15,000. CC4A currently offers increased incentives up to $9,500, though CARB has proposed increasing incentives up to $12,000.

Committee comments: Increased Incentives and VMT. Offering increased incentives to people that drive the most polluting cars and/or that drive the most, as proposed in this bill, can be highly effective in helping to retire those vehicles. However, because CARB does not currently track VMT as a prerequisite for incentives, it is not clear that the vehicles retired as a result of the changes in this bill would be significantly different than those currently being retired.

Program funding and jurisdiction. Greater transparency and clarity on the timing and amount of funds to be allocated each year would benefit district programs, and CARB should strive to provide continuous funding to keep CC4A programs running. Clear delineation of the air districts' jurisdiction to manage CC4A allows them to continue tailoring their programs to regional needs, but could cause confusion among applicants living near district borders who are redirected from the statewide program to a district program, or vice versa.

Establishing procedures for fund re-allocation may help keep district CC4A programs operational year-round. However, rapid exhaustion of funds where demand is already established could stifle the growth of newer programs in Sacramento and San Diego, or result in an increase of underserved populations in other air districts. If this provision is implemented, CARB should consider a minimum annual set-aside for each district to safeguard funding.

Statewide CC4A Codification. CARB is currently developing regulations for its implementation of the statewide program and it anticipates accepting applications by end of 2024. As the CC4A expansion begins rolling out, flexibility for CARB to tailor the program to the needs of the multiple regions under the statewide umbrella could be beneficial. CARB continues to discuss details around statewide implementation with various stakeholders, including the author's office.

According to the Author

"The successful Clean Cars 4 All program has recently been expanded statewide and intends to reduce greenhouse gas emissions as efficiently and equitably as possible. To accomplish this goal, the state must maximize its investments to reduce gasoline consumption, especially among lower-income consumers who cannot afford to live near their workplaces and spend large portions of their income on fuel for long distance commutes. AB 2401 will improve ZEV equity and air quality by codifying the expanded Clean Cars 4 All program, requiring vehicle data collection to allow for more targeted outreach to the lowest-income Californians, and increasing incentive amounts for the lowest income, highest mileage drivers."

Arguments in Support

The co-sponsors—Coalition for Clean Air, Coltura, GLI, UCS, and Valley Clean Air Now—state "AB 2401 provides a solution to the aforementioned issues by requiring the Air Resources Board to collect additional data and use it to establish a needs-based approach to identify and target outreach and incentives to low-income, high-mileage drivers with older, high-polluting vehicles. This measure additionally ensures that expansions of the program are subject to the same requirements established by this measure and previously enacted equity, funding, and tax exemption provisions."

Arguments in Opposition

None on file.

FISCAL COMMENTS

According to the Assembly Appropriations Committee:

ARB estimates ongoing annual costs of approximately $1 million (Greenhouse Gas Reduction Fund (GGRF)) for five new positions to develop a methodology to prioritize vehicle retirement based on the required criteria; track and report both program data at the census tract level and GHG emissions reductions per vehicle retired based on miles per gallon and the miles traveled under the registered owner; adjust incentive levels for vehicles manufactured prior to 2004 or that are at least 20 years old and vehicles with poor fuel economy and the most vehicles miles traveled; collect, evaluate, and share accounting of program funds by district; establish procedures for reallocating funds as required; gather public input through workshops and other outreach events; develop and implement a targeted outreach strategy in DACs and LICs in partnership with air districts; and other tasks.

VOTES

ASM TRANSPORTATION: 15-0-0

YES: Wilson, Davies, Aguiar-Curry, Berman, Juan Carrillo, Hart, Hoover, Jackson, Lowenthal, Papan, Sanchez, Ting, Wallis, Ward, Wicks

ASM NATURAL RESOURCES: 11-0-0

YES: Bryan, Flora, Bauer-Kahan, Friedman, Hoover, Kalra, Joe Patterson, Muratsuchi, Pellerin, Wicks, Wood

ASM APPROPRIATIONS: 15-0-0

YES: Wicks, Sanchez, Arambula, Bryan, Calderon, Wendy Carrillo, Dixon, Mike Fong, Grayson, Haney, Hart, Jim Patterson, Pellerin, Ta, Villapudua

UPDATED

VERSION: April 9, 2024

CONSULTANT: Stephanie Choing / TRANS. / (916) 319-2093 FN: 0003031

Date of Hearing: May 8, 2024

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Buffy Wicks, Chair

ABPCA Bill Id:AB 2401

Author:(Ting) – As Amended Ver:April 9, 2024

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

SUMMARY:

This bill makes numerous changes to the Air Resources Board’s (ARB) Clean Cars for All (CC4A) program.

Specifically, this bill, among other things:

1. Requires ARB to prioritize vehicle retirement in areas of the state that have the highest percentage of people residing in disadvantaged (DAC) and low-income (LIC) communities, the highest number of vehicles manufactured prior to 2004 or that are at least 20 years old, and the highest number of vehicles with poor fuel economy and the most vehicle miles traveled.
2. Makes incentives provided under the CC4A program available statewide and requires ARB to manage distribution of incentives only in areas of the state where an air district has elected not to participate.
3. Requires ARB to establish triggers and procedures for reallocating any surplus funds from portions of the CC4A program managed by districts or by ARB to other portions of the CC4A program managed by other districts or ARB that have exhausted program funding and have demonstrated a need.
4. Requires ARB to track and report a) all CC4A program data at the census tract level to support eligibility criteria that offers increased incentives for residents of DACs, and b) greenhouse gas (GHG) emissions reductions per vehicle retired based on miles per gallon and the miles traveled under the registered owner.
5. Requires ARB to strive to maintain continuous funding to each district participating in the CC4A program from the moneys made available to ARB for the program.
6. Authorizes ARB to use up to 10% of the moneys designated for incentives outreach.
7. Requires ARB to establish a means-based strategy to identify and provide increased incentives to potential recipients under the CC4A program who meet specified criteria.

For a more detailed summary of the other provisions of this bill, please see the Assembly Natural Resources Committee analysis of this bill.

FISCAL EFFECT:

ARB estimates ongoing annual costs of approximately $1 million (Greenhouse Gas Reduction Fund (GGRF)) for five new positions to develop a methodology to prioritize vehicle retirement based on the required criteria; track and report both program data at the census tract level and GHG emissions reductions per vehicle retired based on miles per gallon and the miles traveled under the registered owner; adjust incentive levels for vehicles manufactured prior to 2004 or that are at least 20 years old and vehicles with poor fuel economy and the most vehicles miles traveled; collect, evaluate, and share accounting of program funds by district; establish procedures for reallocating funds as required; gather public input through workshops and other outreach events; develop and implement a targeted outreach strategy in DACs and LICs in partnership with air districts; and other tasks.

COMMENTS:

1) Purpose. According to the author:

The successful Clean Cars 4 All program has recently been expanded statewide and intends to reduce greenhouse gas emissions as efficiently and equitably as possible. To accomplish this goal, the state must maximize its investments to reduce gasoline consumption, especially among lower-income consumers who cannot afford to live near their workplaces and spend large portions of their income on fuel for long distance commutes.

2) Background. CC4A provides incentives to help low-income consumers living in priority populations to replace their older higher-polluting vehicles with newer and cleaner alternatives. Income-eligible residents residing near or in DACs and in five participating air districts are eligible to participate in the program. The average vehicle retired is about 22 years old with an estimated fuel economy of 21.5 miles per gallon. The average replacement vehicle has a fuel economy of 80 miles per gallon equivalent. To date, the program has been allocated $464 million (General Fund and GGRF) and has expended approximately $219 million. The Governor’s proposed budget for fiscal year (FY) 2024-25 delays $45 million of CC4A funding from FY 2024-25 to FY 2027-28.

ARB is in the process of selecting an administrator to implement a statewide program with a commitment to focus benefits in communities most in need, including tribal, rural, and low-income communities. This bill codifies the statewide expansion and requires ARB to distribute incentives to eligible residents in areas where an air district has not elected to participate in CC4A.

Supporters of this bill cite a report showing that despite making up only 19% of the vehicles in the state, pre-2004 vehicles emit three times as much smog-forming nitrogen oxides as compared to all 2004 and later vehicles combined. The study further noted that communities with the highest exposure to pollution from pre-2004 vehicles are home to higher percentages of people of color. To reduce inequitable exposure to pollution, the report concluded that the state should prioritize incentives and target outreach and education toward priority populations owning pre-2004 vehicles and living in areas with high concentrations of older vehicles. This bill requires ARB to collect additional data and use it to establish a needs-based approach to identify and target outreach and incentives to low-income, high-mileage drivers with older, high-polluting vehicles.

Analysis Prepared by: Nikita Koraddi / APPR. / (916) 319-2081

Date of Hearing: April 22, 2024

ASSEMBLY COMMITTEE ON NATURAL RESOURCES

Isaac G. Bryan, Chair

ABPCA Bill Id:AB 2401 (

Author:Ting) – As Amended Ver:April 9, 2024

SUBJECT: Clean Cars 4 All Program.

SUMMARY: Requires the implementing regulations for the Clean Cars 4 All Program (CC4A) to additionally ensure that, among other things, incentives provided under the program are available in all areas of the state and that, in those areas where a local air district has not elected to manage the distribution of incentives, the Air Resources Board (ARB) manages the distribution of incentives to eligible residents of those areas.

EXISTING LAW:

1. Requires ARB, pursuant to California Global Warming Solutions Act of 2006 [AB 32 (Núñez), Chapter 488, Statutes of 2006], to adopt a statewide greenhouse gas (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. Requires ARB to approve a statewide GHG emissions limit equivalent to 85% below the 1990 level by 2045. (Health and Safety Code (HSC) 38500-38599.11)
2. Establishes the CC4A, administered by ARB, to focus on achieving reductions in the emissions of GHG, improvements in air quality, and benefits to low-income state residents through the replacement of high-polluter motor vehicles with cleaner and more efficient motor vehicles or a mobility option. Requires ARB to set specific, measurable goals for the replacement of passenger vehicles and light- and medium-duty trucks that are high polluters. (HSC 44124.5)
3. Establishes the Clean Vehicle Rebate Project (CVRP) at ARB to expand financing mechanisms, including, but not limited to, a loan or loan-loss reserve credit enhancement program to increase consumer access to zero-emission and near-zero-emission vehicle financing and leasing options that can help lower expenditures on transportation and prequalification or point-of-sale rebates or other methods to increase participation rates among low- and moderate-income consumers. (HSC 44274.9(e)(1)(2))

THIS BILL:

1. Requires ARB, when setting measureable goals for the replacement of passenger vehicles and light- and medium-duty trucks that are high polluters, to prioritize vehicle retirement in areas of the state that have the highest percentage of people residing in disadvantaged and low-income communities, the highest numbers of vehicles manufactured prior to 2004 or that are at least 20 years old, and the highest number of vehicles with poor fuel economy and the most vehicles miles traveled.
2. Requires ARB to update the guidelines for Clean Cars 4 All no later than July 1, 2026. 
3. Requires the incentives provided under the CC4A to be available in all areas of the state. In those areas where a district has not elected to participate in the CC4A, to manage the distribution of incentives within its jurisdiction, the state board shall manage the distribution of incentives under the CC4A to eligible residents of those areas in accordance with the requirements of the CC4A. The state board shall not manage the distribution of incentives in the jurisdiction of a district if the district has elected to participate in the program to distribute incentives within its jurisdiction.
4. Requires the application process and procedures for delivering available funding for the Clean Cars 4 All Program to include specified performance metrics for evaluating funding delivery and program administration and implementation.
5. Requires ARB to establish triggers and procedures for reallocating funds from portions of the CC4A managed by districts or by ARB that have a surplus of funds to other portions of the CC4A managed by other districts or ARB that have exhausted program funding and have demonstrated a need.
6. Requires ARB to track and report all CC4A data at the census tract level to support eligibility criteria that offers increased incentives for residents of disadvantaged communities.
7. Requires ARB to track and report GHG emissions reductions per vehicle retired based on miles per gallon and the miles traveled under the registered owner.
8. Requires ARB, for the accounting applicable to the CC4A, to separately display the portions of the program managed by each participating district and requires ARB to include projections of available funds for each portion of the program.
9. Requires the program performance analysis to include an evaluation of the funding for targeted outreach in low-income or disadvantaged communities with the highest number of vehicles manufactured before 2004 or that are at least 20 years old that are driven most and have the poorest fuel economy, including whether the funding should be enhanced or modified to reach the goals.
10. Requires, from the moneys made available to ARB, ARB to strive to maintain continuous funding to each district participating in the CC4A.
11. Requires, in allocating funding under CC4A to districts participating in the program and to the portion of the program managed by ARB, ARB to consider, at a minimum, all of the following metrics:
    1. Total number and value of vouchers deployed.
    2. The following metrics for retired vehicles:
       1. High average annual vehicle miles traveled. Allows average annual vehicle miles traveled to be determined by methods, including, but not limited to, comparing the odometer reading on the vehicle registration to the current odometer reading. Options for determining the current odometer reading include, but are not limited to, a preinspection report from an authorized dismantler, a recent smog check reading or repair shop invoice, or a sworn statement or photograph of the odometer, or both, submitted with the application.
       2. Low fuel economy of the vehicles.
       3. Older model year of the vehicles.
12. Strikes the requirement that ARB consider participants’ zip codes as a metric in allocating CC4A funding to participating districts.
13. Authorizes ARB to use up to 5% of the moneys available in a fiscal year for the purpose of outreach in areas of the state where ARB manages the distribution of incentives.
14. Authorizes ARB to use more than 5%, but no more than 10%, of the moneys available for distribution in those areas is ARB finds that the allocation would further outreach programs.
15. Requires ARB to establish a means-based strategy to identify potential recipients of incentives under the CC4A who meet all of the following criteria:
    1. A person living in the top decile of disadvantaged communities;
    2. A person owning a vehicle manufactured before 2004 or a vehicle that is at least 20 years old;
    3. A person owning a vehicle with poor fuel economy and a high number of average annual vehicle miles traveled; and,
    4. A person from an underserved population.
16. Requires, as part of the means-based strategy, ARB to require an increased incentive to be provided under the CC4A to individuals who meet all of the criteria as compared to individuals who otherwise qualify for the CC4A, but do not meet all of the specified criteria.
17. Requires, in establishing the means-based strategy, ARB to coordinate with districts and local nonprofit and community organizations that have a strong and ongoing local presence in areas within a particular district.
18. Requires a participating district, and ARB with respect to the areas where it manages the distribution of incentives, to implement the means-based strategy and provide increased incentives.

FISCAL EFFECT: Unknown

COMMENTS:

1. Author’s statement:

With the retirement of CVRP, California’s Clean Cars 4 All serves as the state’s flagship vehicle incentive program designed to help low-income drivers access zero emission vehicles (ZEVs) and retire old, polluting vehicles from the roads. The successful Clean Cars 4 All program has recently been expanded statewide and intends to reduce greenhouse gas emissions as efficiently and equitably as possible. To accomplish this goal, the state must maximize its investments to reduce gasoline consumption, especially among lower-income consumers who cannot afford to live near their workplaces and spend large portions of their income on fuel for long distance commutes. AB 2401 will improve ZEV equity and air quality by codifying the expanded Clean Cars 4 All program, requiring vehicle data collection to allow for more targeted outreach to the lowest-income Californians, and increasing incentive amounts for the lowest income, highest mileage drivers.

1. Transportation GHG reduction goals. California has some of the most ambitious GHG reduction goals in the nation, which include goals to reduce petroleum use in California up to 50% from 2015 levels by 2030, phase out passenger combustion-engine cars by 2035, and reduce GHG emissions 85% below 1990 levels by 2045. The transportation sector represents about 40% of California's total GHG emissions portfolio, and replacing traditional gas-powered cars with ZEVs is a significant part of California's effort to reduce climate emissions. ARB’s 2022 Scoping Plan explains that to meet the overall state goal of carbon neutrality by 2045, vehicles must transition to zero emission technology. Governor Newsom’s ZEV Executive Order N-79-20 set the following ZEV targets for California: 100% of in-state sales of new passenger cars and light-duty trucks will be zero emission by 2035; 100% zero-emission medium and heavy-duty vehicles in the state by 2045, where feasible, and by 2035 for drayage trucks; and, 100% zero-emission off-road vehicles and equipment operations by 2035, where feasible.

As of today, more than 1.6 million ZEVs are on Californians roads – two years ahead of schedule – and 1 out of every 4 cars sold in California is zero emission.

1. Clean Cars 4 All eligibility. CC4A provides incentives up to $9,500 per vehicle through California Climate Investments to help lower-income California drivers scrap their older, high-polluting cars and replace them with zero- or near-zero emission replacements.

Through the support of CC4A, as well as CVRP and the Clean Vehicle Assistance Program, as of November 2022, more than one million plug-in electric cars, pickup trucks, sport utility vehicles (SUV), and motorcycles have been sold in California. The data also show that California, with only 10% of the nation’s cars, now accounts for more than 40% of all ZEVs in the country. In fact, a recent study shows that more than 50% of ZEV purchasers would not have purchased a ZEV without a rebate.

Eligible applicants must fall below 300% of the Federal Poverty Level ($83,250 for a family of four). The average vehicle retired is about 22 years old with an estimated fuel economy of 21.5 miles per gallon. The average replacement vehicle has a fuel economy of 80 miles per gallon equivalent.

AB 2401 requires ARB to collect additional data and use it to establish a needs-based approach to identify and target outreach and incentives to low-income, high-mileage drivers with older, high-polluting vehicles.

The sponsors of this bill, including Valley Clean Air Now, cite Cleaner Cars, Cleaner Air, a report that studied how old cars negatively impact air quality in California, as background for the need for these changes. The study notes that despite making up only 19% of the vehicles in the state, pre-2004 vehicles emit three times as much smog-forming nitrogen oxides as compared to all 2004 and later vehicles combined. The study further confirmed that communities with the highest exposure to pollution from pre-2004 vehicles are home to higher percentages of people of color. To reduce inequitable exposure to pollution, the report concluded that the state should prioritize incentives and target outreach and education toward priority populations owning pre-2004 vehicles and living in areas with high concentrations of older vehicles.

According to ARB, under the current program, the average vehicle retirement age is 1999. Looking at the average vehicle age of retirement for each air district, 11,628 out of 13,335 vehicles (87.20%) were model year 2004 or older, and 13,217 out of 13,335 (99.12%) were model year 2009 or older. While eliminating the drivers with slightly less old vehicles (model year 2005 or newer) ineligible from the program precludes opportunities to replace a polluting vehicle with a ZEV, 2004 and older vehicles have substantially worse emissions controls than a newer vehicles, and as time progresses, more vehicles will be captured by the 20 year or older piece.

1. CC4A administration. CC4A is currently administered in the five largest air districts in California: South Coast Air Quality Management District (AQMD), San Joaquin Valley Air Pollution Control District (APCD), Bar Area AQMD, Sacramento Metropolitan AQMD, and upcoming program in San Diego APCD.
   
   In addition to district administered programs, ARB is expanding the program to reach communities that have not been reached by district programs that would include rural, tribal, and low-income communities and other populations. The district programs will expand to all areas of their respective jurisdiction with the single third-party administrator serving all other areas of California.

AB 2401 would codify the statewide expansion and require ARB to distribute incentives to eligible residents in areas where an air district has not elected to participate in CC4A.

1. CC4A funding. ARB’s Fiscal Year 2023-2024 Funding Plan for Clean Transportation Incentives (Funding Plan) includes $28 million to the CC4A statewide program.

In the Funding Plan, ARB staff recommended splitting the allocation evenly between the statewide project and the district projects. If demand for funding for the statewide project is lower than $14 million, then ARB staff proposed that funds can be shifted to meet demand for the Financing Assistance for Lower Income Consumers project.

As a baseline allocation, each district will be given 10%, or $1.4 million, of the total allocation. The three districts that have achieved 1,000 projects in any 12-month period (South Coast AQMD, San Joaquin Valley APCD, and Bay Area AQMD) will receive another 10% of the total allocation. The remaining 20%, or $5.6 million, will be split among those same three districts based on their average share of the following populations: total eligible population, the population of individuals below 200% of the Federal Poverty Level, disadvantaged community population, and the population of vehicles with model years from 1990 to 2007. ARB staff used CalEnviroscreen 4.0 to determine disadvantaged populations of each district, and data from the California Department of Motor Vehicles (DMV) to determine the vehicle populations (vehicles with model years from 1990 to 2007).

This bill requires ARB to strive to maintain continuous funding to each district participating in CC4A, which is consistent with ARB’s staff proposal, and it requires ARB to establish triggers and procedures for reallocating funds from portions of CC4A managed by districts or ARB that have a surplus of funds to other districts or ARB that have exhausted program funding and have demonstrated a need. The author’s intent is to maintain flexibility for ARB to manage funds allocated by the Legislature for this incentive program while maintaining funding, to the greatest extent possible, for the air districts who are running a CC4A program.

1. Double referral. This bill was heard in the Assembly Transportation Committee on April 15 and approved by a vote of 15-0.
2. Related legislation:

AB 1267 (Ting) 2023 would have to required ARB to ensure that beginning January 1, 2025, an additional incentive is awarded under a ZEV incentive program to a recipient who is a gasoline superuser, as defined. This bill was held in the Assembly Appropriations Committee.

AB 2816 (Ting) 2022 would have required ARB to award incentives for passenger ZEVs based on the amount of gasoline or diesel the applicant’s vehicle consumed. This bill was held in the Assembly Appropriations Committee.

REGISTERED SUPPORT / OPPOSITION:

Support

350 Bay Area Action
350 Conejo / San Fernando Valley
350 Humboldt: Grass Roots Climate Action
350 Sacramento
Active San Gabriel Valley
California Environmental Voters
California Environmental Voters
California New Car Dealers Association
Chargepoint, INC
Citizens Climate Lobby
Climate Action California
Coalition for Clean Air
Coltura
Democrats of Rossmoor
Ecology Action
Environment California
Friends Committee on Legislation of California
Greenlatinos
Greenlining Institute; the
Lutheran Office of Public Policy - California
National Resources Defense Council
Recolte Energy
Santa Cruz Climate Action Network
Sierra Club California
Silicon Valley Youth Climate Action
Sustainable Mill Valley
Sustainable Rossmoor
The Climate Center
The Greenlining Institute
Transformative Wealth Management LLC
Transportation Agency for Monterey County (TAMC)
Union of Concerned Scientists
Valley Clean Air Now
Voices for Progress
Vote Solar
Zero-waste People Power

Opposition

None on file

Analysis Prepared by: Paige Brokaw / NAT. RES. /

Date of Hearing: April 15, 2024

ASSEMBLY COMMITTEE ON TRANSPORTATION

Lori D. Wilson, Chair

ABPCA Bill Id:AB 2401 (

Author:Ting) – As Amended Ver:April 9, 2024

SUBJECT: Clean Cars 4 All Program

SUMMARY: Requires the California Air Resources Board (CARB), in administering the Clean Cars for All (CC4A) Program, to prioritize vehicle retirement in areas of the state that with the highest percentages of low-income, high-mileage drivers with older, high-polluting vehicles; makes these incentives available statewide, and requires CARB to establish a means-based strategy provide an increased incentive to potential recipients satisfying additional qualifying criteria.

Specifically, this bill:

1. Requires CARB to prioritize vehicle retirement in areas of the state that have the highest percentage of people residing in disadvantaged (DAC) and low-income (LIC) communities, the highest numbers of vehicles manufactured prior to 2004 or that are at least 20 years old, and the highest number of vehicles with poor fuel economy, and the most vehicle miles traveled.
2. Makes incentives provided under CC4A available statewide and requires CARB to manage distribution of incentives only in areas of the state where an air district has elected not to participate.
3. Requires the application process and procedures for delivering available funding for the CC4A Program to include additional performance metrics for evaluating funding delivery and program administration and implementation.
4. Requires CARB to establish procedures for reallocating any surplus of funds from portions of the CC4A that districts manage or by the state board to other districts or the state board that have exhausted CC4A program funding and have demonstrated a need.
5. Requires CARB to track and report all CC4A Program data at the census tract level to support eligibility criteria that offers increased incentives for residents of disadvantaged communities, and greenhouse gas (GHG) emissions reductions per vehicle retired based on miles per gallon and the miles traveled under the registered owner.
6. Requires CARB, in its annual accounting of moneys allocated to CC4A and the expenditures of CC4A by region, to separately display the portions of the program managed by each participating district and by the state board and to include projections of available funds for each portion of the program.
7. Requires CARB to evaluate funding for targeted outreach in LICs or DACs with the highest number of vehicles manufactured before 2004 or that are at least 20 years old that are driven most and have the poorest fuel economy, including whether the funding should be enhanced or modified to reach program goals.
8. Requires CARB to strive to maintain continuous funding to each district participating in the CC4A from the moneys made available to CARB for the Program.
9. Requires CARB to consider additional metrics in allocating funding for CC4A to participating districts and to the portion CARB manages, including the total value of vouchers deployed and for the retired vehicles: (i) high average annual vehicle miles traveled; (ii) low fuel economy of the vehicles; and (iii) older model year of the vehicles.
10. Authorizes CARB to use up to 10% of the moneys designated for incentives outreach.
11. Requires CARB to establish a means-based strategy to identify and provide increased incentives to potential recipients under the CC4A Program who meet all of the following criteria:

(1) A person living in the top decile of disadvantaged communities.

(2) A person owning a vehicle manufactured before 2004 or a vehicle that is at least 20 years old.

(3) A person owning a vehicle with poor fuel economy and a high number of vehicle miles traveled.

(4) A person from a population that is eligible for but underserved by CC4A, including but households in census tracts shown to be the most impacted in each region and households making less than 225% of the federal poverty level, and households that are primarily non-English speaking.

EXISTING LAW:

1. Establishes the Air Quality Improvement Program, administered by CARB, with the primary purpose of funding, upon appropriation by the Legislature, air quality improvement projects relating to fuel and vehicle technologies that reduce criteria air pollutants and improve air quality. Also, funds research to determine and improve the air quality impacts of alternative transportation fuels and vehicles, vessels, and equipment technologies. (Health and Safety Code (HSC) 44274)
2. Establishes the CC4A Program, administered by CARB, to focus on achieving reductions in GHG emissions, improvements in air quality, and benefits to low-income state residents through the replacement of high-polluter motor vehicles with cleaner and more efficient motor vehicles or a mobility option. (HSC 44124.5)

FISCAL EFFECT: Unknown

COMMENTS: The Legislature has set a number of goals to address climate change, including reducing statewide GHG emissions to 40% below the 1990 level by 2030. The transportation sector generates nearly 40% of state GHG emissions, three-quarters of which are from light-duty passenger vehicles alone. As such, the state has focused a significant amount of effort toward promoting the use of cleaner vehicles and reducing vehicle miles traveled (VMT). In 2020, Gov. Newsom issued Executive Order (EO) N-79-20, which requires 100% of in-state sales of new passenger cars and trucks to be zero-emission by 2035 and tasks CARB with developing regulations on manufacturers to do so. On the demand side, CARB administers a variety programs intended to reduce mobile source emissions, including incentive programs that support consumer adoption of zero‑emission vehicles (ZEVs).

DACs and LICs experience disproportionate amounts of air pollution, but also contribute disproportionately to light-duty vehicular GHG emissions. On average, households with lower incomes have to drive longer distances, spend a higher percentage of monthly income on fuel, and tend to drive older, more polluting vehicles. One study reported that “households with incomes less than $50,000 drive vehicles with an average model year (MY) of 2004 and average fuel economy of 20.34 miles per gallon (MPG) while those with incomes more than $100,000 drive vehicles with an average MY of 2008 and average fuel economy of 20.89 MPG”.

According to the co-sponsors of this bill, “in California, light-duty vehicles in the top 20% in terms of gasoline use are using 55% of all private light-duty gasoline” (Coltura’s Gasoline Superusers 2.0 report) and “despite making up only 19% of the vehicles in the state, pre-2004 vehicles emit three times as much smog-forming nitrogen oxides as compared to all 2004 and later vehicles combined” (Cleaner Cars, Cleaner Air by GLI and UCS). A 2017 study by DeShazo et al. suggested that further reductions in gasoline consumption could be achieved by targeting ZEV subsidies for (a) consumers who would trade in a larger, less-fuel-efficient vehicle, (b) with higher monthly VMT, or (c) living in rural and farming communities who tend to drive larger vehicles and have higher monthly VMT.

CC4A provides incentives to help lower-income drivers replace their old, higher-polluting cars with cleaner transportation options. Participants voluntarily scrap their vehicles in exchange for an incentive useable towards the lease or purchase of new or used replacement vehicles, e.g., a hybrid, plug-in hybrid electric (PHEV), battery electric (BEV), and fuel cell electric vehicles. PHEV and BEV buyers are also eligible for home charger incentives or prepaid charge cards if home charger installation is not an option. Instead of a vehicle, recipients can use their incentives towards an alternative mobility option, such as an electric bike, a voucher for public transit, or a combination of clean transportation options. Participants must have a household income of less than 400% of the federal poverty limit (FPL) and live in a ZIP Code containing a disadvantaged community census tract in order to qualify.

CARB delegates authority to participating air districts to administer CC4A and allocates program funding to them. Currently, the state’s five largest regional air districts—in the Bay Area, the San Joaquin Valley, Sacramento, the South Coast and San Diego— have CC4A programs. CARB allows each air district to set additional eligibility criteria tailored to specific regional needs, provided that they meet CARB’s minimum eligibility requirements.

In the 2022 and 2023 Budget Acts combined, roughly $200 million in additional funding was appropriated was for equity transportation programs, including statewide expansion of CC4A. The statewide expansion is underway with initial roll-out set tentatively by end of 2024. CARB notes that the “statewide expansion will provide access to the program for the nearly 4 million residents in or near low-income communities which contain 60-70% of the 1.3 million older, higher polluting vehicles that may be eligible for replacement.”

To date, CC4A has been highly successful in retiring the oldest and most polluting vehicles. Historical data from 2015 through October 2023 shows that the majority of vehicles retired under CC4A have been older vehicle models, with 11,628 out of 13,335 retired vehicles (87.20%) being MY 2004 or older, and 13,217 out of 13,335 (99.12%) being MY 2009 or older.

Although the existing district-operated CC4A programs have experienced great success with high demand from low- and moderate-income households, they continue to face many challenges because funding is unpredictable. The current method of distributing funding results in air districts not knowing how much or when CARB will distribute additional funding. As a result, air districts frequently have to turn away applications or place applicants on waitlists until they receive more funding.

Another well-established challenge for CC4A is high levels of distrust of government programs in low-income communities and communities of color. Successful enrollment requires program staff and community-based organizations to work with potential recipients on applications and help educate them on the financial considerations of program enrollment and how replacement ZEV vehicles can fit into their lifestyles. Recent legislation has allowed a percentage of CC4A funding to go towards outreach targeting priority applications. As part of its statewide expansion, CARB is exploring a needs-based model prioritizing lower-income applicants meeting additional criteria by providing application assistance and expedited processing as well as reserving funds upon receipt of applications.

CC4A is the only active state-funded ZEV incentive program for personal use vehicles. In 2023, two other incentive programs were closed—the Clean Vehicle Assistance Program (CVAP)—or shuttered completely—the Clean Vehicle Rebate Program (CVRP). CVAP, which exhausted its funding last June, is an income-qualified program providing grants and affordable financing to help with the purchase or lease of a hybrid or electric vehicle. CVRP, which was phased out last November, was a program that offered rebates for the purchase or lease of new, eligible ZEVs, to people below a qualifying income threshold (e.g., $135,000 for a single filer), with greater incentive amounts for lower-income participants. Neither CVAP nor CVRP required a person to retire their existing vehicle to receive an incentive.

Several studies have found that up-front cost is likely the biggest barrier to ZEV adoption, and lower-income CC4A recipients may find that current EV incentives are not enough to offset the cost of a new or used ZEV. For example, CARB has estimated that the average cost of a vehicle receiving a CC4A incentive has gone from roughly $20,000 in 2016 to $35,000 at the end of 2021—an increase of $15,000. CC4A currently offers increased incentives up to $9,500, though CARB has proposed increasing incentives up to $12,000. When CC4A, CVAP and CVRP were all active, incentives from CC4A could be stacked with CVRP, but not with CVAP. In its statewide expansion of CC4A, CARB has proposed streamlining the application process for residents in most need to apply jointly to CVAP and statewide CC4A, providing increased opportunity to match the need for low-cost financing with the vehicle purchase incentives provided through CC4A.

According to the author, “With the retirement of CVRP, California’s Clean Cars 4 All serves as the state’s flagship vehicle incentive program designed to help low-income drivers access zero emission vehicles (ZEVs) and retire old, polluting vehicles from the roads. The successful Clean Cars 4 All program has recently been expanded statewide and intends to reduce greenhouse gas emissions as efficiently and equitably as possible. To accomplish this goal, the state must maximize its investments to reduce gasoline consumption, especially among lower-income consumers who cannot afford to live near their workplaces and spend large portions of their income on fuel for long distance commutes. AB 2401 will improve ZEV equity and air quality by codifying the expanded Clean Cars 4 All program, requiring vehicle data collection to allow for more targeted outreach to the lowest-income Californians, and increasing incentive amounts for the lowest income, highest mileage drivers.”

Writing in support, the co-sponsors—Coalition for Clean Air, Coltura, GLI, UCS, and Valley Clean Air Now—state “AB 2401 provides a solution to the aforementioned issues by requiring the Air Resources Board to collect additional data and use it to establish a needs-based approach to identify and target outreach and incentives to low-income, high-mileage drivers with older, high-polluting vehicles. This measure additionally ensures that expansions of the program are subject to the same requirements established by this measure and previously enacted equity, funding, and tax exemption provisions.”

Committee comments: Increased Incentives and VMT. Offering increased incentives to people that drive the most polluting cars and/or that drive the most, as proposed in this bill can be highly effective in helping to retire those vehicles. However, because CARB does not currently track VMT as a prerequisite for incentives, it is not clear that the vehicles retired as a result of the changes in this bill would be significantly different than those currently being retired. In addition, it is important to consider that increasing requirements and administrative complexity for program participants may reduce the number people willing to participate in the program, and work counter to achieving the program’s goals; a balance must be struck.

Program funding and jurisdiction. Greater transparency and clarity on the timing and amount of funds to be allocated each year would benefit district programs, and CARB should strive to provide continuous funding to keep CC4A programs running. Clear delineation of the air districts’ jurisdiction to manage CC4A within their district boundaries, if they elect to do so, also allows air districts to continue tailoring their programs to regional needs, but could cause confusion among applicants living near district borders who are redirected from the statewide program to a district program, or vice versa.

CARB proposed allocating $14 million General Fund to the statewide program and $14 million of Greenhouse Gas Reduction Fund to the districts in its fiscal year 2023-24 funding plan. In a letter to CARB (dated October 30, 2023), several Assemblymembers objected to proposed apportionment in view of the budget allocations designated for the statewide program and the challenges districts face to operate their programs given the stop-and-start nature of funding cycles. In addition, the letter states that “the five regional air quality districts encompass 85 percent of the state population, and 95% of its disadvantaged communities.”

Establishing procedures for fund re-allocation may help keep district CC4A programs operational year-round. However, funding reallocations may also provide certainty for one air district at the expense of another. Rapid exhaustion of funds where demand is already established, for example, in the air districts with the oldest CC4A programs and where the highest number of DAC census tracts are contained (South Coast and San Joaquin Valley), could stifle the growth of newer programs in Sacramento and San Diego, or result in an increase of underserved populations in other air districts. If this provision is implemented, CARB should consider a minimum annual set-aside for each district to safeguard funding.

Statewide CC4A Codification. CARB is currently developing regulations for its implementation of the statewide program and it anticipates accepting applications by end of 2024. The statewide program will cover a much more expansive and diverse area than the district programs. In its public workgroup and FAQ documents, CARB stated that they will adopt guidelines that adhere to the core principles of the program to focus on those that have the highest barriers to clean transportation. As the CC4A expansion begins rolling out, flexibility for CARB to tailor the program to the needs of the multiple regions under the statewide umbrella could be beneficial. CARB continues to discuss details around statewide implementation with various stakeholders, including the author’s office.

Double referral: This bill is double referred to the Assembly Natural Resources Committee and will be heard by that Committee as it relates to issues under its jurisdiction.

Related and previous legislation: SB 154 (Skinner), Chapter 43, Statutes of 2022, appropriates $125 million for a suite of equity transportation programs under the Charge Ahead California Initiative, including, but not limited to, CC4A.

AB 102 (Ting), Chapter 38, Statutes of 2023, appropriates $80 million for a suite of statewide equity transportation programs under the Charge Ahead California Initiative, including, but not limited to, CC4A.

AB 1267 (Ting) of 2023 would have required CARB to provide an additional incentive to individuals for the purchase of zero-emission vehicles under ZEV incentive programs (CC4A, CVRP and CVAP) based on the average annual gallons of gasoline that the applicant’s vehicle consumed. Died in Assembly Appropriations Committee.

AB 2816 (Ting) of 2022 would have required CARB to award incentives for passenger ZEVs under ZEV incentive programs (CC4A, CVRP and CVAP) based on the amount of gasoline or diesel the applicant’s vehicle consumed. The bill would have required a consumer to provide the vehicle identification number and odometer reading under penalty of perjury to verify the accuracy of the amount of the incentive. This bill was held on the Assembly Appropriations Committee suspense file.

SB 1382 (Gonzalez), Chapter 375, Statutes of 2022 requires CARB to work with air districts and nonprofits to identify barriers to accessing CC4A, to develop outreach protocols and metrics, and to evaluate outcomes of outreach efforts. It additionally requires an assessment identifying populations eligible for but underserved by CC4A, allows air districts to use up to 10 percent of allocated program funds for outreach, and provides a sales and use tax exemption, until 2028, for the purchase of a vehicle made with a CC4A award.

SB 400 (Umberg), Chapter 271, Statutes of 2019 expands the eligible modes of transportation for which CC4A “mobility option” vouchers may be used to include bike sharing and e-bikes.

SB 1000 (Lara), Chapter 368, Statutes of 2018 requires the CEC, in consultation with CARB, as part of the development of the Clean Transportation Program (CTP) investment plan, to assess whether charging station infrastructure is disproportionately deployed by income level, population density, or geographical area, and, to use CTP funding to more proportionately deploy new charging station infrastructure, unless CEC makes a finding that the disproportionate deployment is reasonable and furthers state energy or environmental policy.

AB 630 (Cooper), Chapter 636, Statutes of 2017 establishes CC4A, providing drivers of high polluting vehicles financial incentives and support to switch to lower-emission vehicles or other modes of transportation. Also requires CARB to set specific and measurable goals annually for the Enhanced Fleet Modernization Scrap Only and CC4A Scrap-and-Replace programs.

REGISTERED SUPPORT / OPPOSITION:

Support

Coalition for Clean Air (co-sponsor)
Coltura (co-sponsor)

Greenlining Institute (co-sponsor)

Union of Concerned Scientists (co-sponsor)
Valley Clean Air Now (co-sponsor)

350 Bay Area Action
350 Conejo / San Fernando Valley
350 Humboldt: Grass Roots Climate Action
Active San Gabriel Valley
California Environmental Voters
California Environmental Voters
California New Car Dealers Association
Chargepoint
Citizens Climate Lobby
Climate Action California
Democrats of Rossmoor
Ecology Action
Environment California
Friends Committee on Legislation of California
Greenlatinos
Lutheran Office of Public Policy - California
National Resources Defense Council
Recolte Energy
Santa Cruz Climate Action Network
Sierra Club California
Silicon Valley Youth Climate Action
Sustainable Mill Valley
Sustainable Rossmoor
The Climate Center
Transformative Wealth Management

Transportation Agency for Monterey County
Voices for Progress
Vote Solar
Zero-Waste People Power

Opposition

None on file

Analysis Prepared by: Stephanie Choing / TRANS. / (916) 319-2093