SB 1387: California Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project: vehicle eligibility: schoolbus grant requirements.
- Session Year: 2023-2024
- House: Senate
- Latest Version Date: 2024-06-10
Current Status:
Failed
(2024-06-14: June 17 set for first hearing canceled at the request of author.)
Introduced
In Committee
First Chamber
In Committee
Second Chamber
Enacted
Existing law establishes the State Air Resources Board as the state agency responsible for monitoring and regulating sources emitting greenhouse gases. The state board, in this capacity, administers the California Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project under which the agency issues a limited number of vouchers to incentivize the purchase and use of zero-emission commercial vehicles.
This bill would require the state board to authorize a voucher issued under the program to be used for the acquisition of any zero-emission vehicle that meets specified requirements, including that the vehicle has a gross vehicle weight rating that exceeds 8,500 pounds and the vehicle is purchased for fleet operations by a public or private fleet or for personal and commercial use by an individual. If the voucher is provided to an individual to acquire a vehicle for personal and commercial use, the bill would require that individual to attest under penalty of perjury that the vehicle will primarily be used in furtherance of a valid commercial or business purpose, including, but not limited to, hauling or towing. The bill would authorize the state board to adopt regulations to implement these requirements.
By requiring this attestation under the penalty of perjury, the bill would expand the crime of perjury, thereby imposing a state-mandated local program.
This bill would require the state board to administer any funds made available to the project specifically for the procurement of zero-emission schoolbuses in accordance with specified requirements. Among other requirements, the bill would require the state board to make this funding available to local educational agencies in the form of grants and would require the state board to authorize local educational agencies to apply to the state board for capital grants to support the purchase of zero-emission schoolbuses to replace heavy-duty internal combustion schoolbuses or operations grants to support the incremental cost of zero-emission schoolbus service provided to a local educational agency by a private contractor, as specified. The bill would require grantees to submit certain information and documentation resulting from the grant to the state board and would require the state board to track the success of grants awarded for these purposes by taking specified actions.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Existing law establishes the State Air Resources Board as the state agency responsible for monitoring and regulating sources emitting greenhouse gases. The state board, in this capacity, administers the California Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project under which the agency issues a limited number of vouchers to incentivize the purchase and use of zero-emission commercial vehicles.
This bill would require the state board to authorize a voucher issued under the program to be used for the acquisition of any zero-emission vehicle that meets specified requirements, including that the vehicle has a gross vehicle weight rating that exceeds 8,500 pounds and the vehicle is purchased for fleet operations by a public or private fleet or for personal and commercial use by an individual. If the voucher is provided to an individual to acquire a vehicle for personal and commercial use, the bill would require that individual to attest under penalty of perjury that the vehicle will be substantially primarily be used in furtherance of a valid commercial or business purpose. purpose, including, but not limited to, hauling or towing. The bill would authorize the state board to adopt regulations to implement these requirements.
By requiring this attestation under the penalty of perjury, the bill would expand the crime of perjury, thereby imposing a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Existing law establishes the State Air Resources Board as the state agency responsible for monitoring and regulating sources emitting greenhouse gases. The state board, in this capacity, administers the California Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project under which the agency issues a limited number of vouchers to incentivize the purchase and use of zero-emission commercial vehicles.
This bill would state the intent of the Legislature to enact subsequent legislation to amend the California Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project. require the state board to authorize a voucher issued under the program to be used for the acquisition of any zero-emission vehicle that meets specified requirements, including that the vehicle has a gross vehicle weight rating that exceeds 8,500 pounds and the vehicle is purchased for fleet operations by a public or private fleet or for personal and commercial use by an individual. If the voucher is provided to an individual to acquire a vehicle for personal and commercial use, the bill would require that individual to attest under penalty of perjury that the vehicle will be substantially used in furtherance of a valid commercial or business purpose. The bill would authorize the state board to adopt regulations to implement these requirements.
By requiring this attestation under the penalty of perjury, the bill would expand the crime of perjury, thereby imposing a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Existing law establishes the State Air Resources Board as the state agency responsible for monitoring and regulating sources emitting greenhouse gases. The state board, in this capacity, administers the California Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project under which the agency issues a limited number of vouchers to incentivize the purchase and use of zero-emission commercial vehicles.
This bill would state the intent of the Legislature to enact subsequent legislation to amend the California Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project.
(a)Under the California Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project, the state board shall authorize a voucher issued under the program to be used for the acquisition of any zero-emission vehicle that meets all of the following requirements:
(1)The vehicle has a gross vehicle weight rating that exceeds 8,500 pounds.
(2)The vehicle is not a house car, as defined in Section 362 of the Vehicle Code.
(3)The vehicle meets either of the following requirements:
(A)The vehicle is purchased for fleet operations by a public or private fleet owning one or more medium- and heavy-duty vehicles.
(B)The vehicle is purchased by an individual for both personal and commercial use.
(b)A voucher shall only be available for the purpose set forth in subparagraph (B) of paragraph (3) of subdivision (a) if the individual receiving the voucher attests to the state board under the penalty of perjury that the vehicle will primarily be used in furtherance of a valid commercial or business purpose, including, but not limited to, hauling or towing.
(c)The state board may adopt regulations to implement this chapter.44181.(a)Under the California Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project, the state board shall administer any funds made available to the project specifically for the procurement of zero-emission schoolbuses in accordance with the requirements of this section.
(b)(1)Of the funds awarded in each year for purposes described in subdivision (a), the state board shall award 50 percent of the funds to local educational agencies described in subparagraph (A) of paragraph (1) of subdivision (h) and the other 50 percent of the funds to local educational agencies described in subparagraphs (B) to (D), inclusive, of paragraph (1) of subdivision (h).
(2)If any funds have not been awarded in either of the categories described in paragraph (1) after the end of the fiscal year, the state board shall allow the funds remaining for that fiscal year to be awarded to any type of local educational agency.
(c)The state board shall make the funding described in subdivision (a) available to local educational agencies in the form of grants and shall authorize local educational agencies to apply to the state board for either of the following types of grants:
(1)Capital grants to support up to the full purchase cost of zero-emission schoolbuses used by a local educational agency to replace heavy-duty internal combustion schoolbuses used by the local educational agency.
(2)Operations grants to support the incremental cost of zero-emission schoolbus service provided to a local educational agency by a private contractor when compared to schoolbus service provided to a local educational agency by a private contractor using an internal combustion schoolbus powered by nonrenewable fuel.
(d)(1)The state board shall require that no less than 90 percent of a capital grant award to be expended for the purchase of zero-emission schoolbuses, as well as the supporting charging infrastructure needed to operate the zero-emission schoolbuses and related activities, including, but not limited to, charging or fueling stations, equipment, site design, construction, and related infrastructure upgrades.
(2)The state board shall authorize up to 10 percent of a capital grant or operations grant award to be expended to incorporate or supplement funding for the grantees school transportation program.
(3)The state board may only award a capital grant pursuant to paragraph (1) if the heavy-duty internal combustion schoolbus to be replaced meets all of the following criteria:
(A)The schoolbus is powered by nonrenewable fuel and is of a model year that is seven years or older on the date that the application is submitted.
(B)The schoolbus is fully operational on the date that the application is submitted.
(C)The schoolbus was used to provide bus service to a local educational agency within the state for at least three days per week on average during the 202223 school year, excluding any COVID-19-related or disaster-related school closures.
(e)Any schoolbuses that are replaced in connection with a grant awarded pursuant to this section shall be scrapped no later than 24 months from date of delivery of the replacement vehicles. Grantees shall provide to the state board proof of scrap of the retired internal combustion schoolbus or schoolbuses.
(f)The grant agreement related to the grant award shall require grantees to submit schoolbus and infrastructure information and documentation, as applicable, resulting from the grants provided in this section to the state board.
(g)The state board shall track the success of the grants awarded pursuant to this section, including, but not limited to, by doing both of the following:
(1)Documenting increases in zero-emission schoolbuses deployed per incentive dollars spent.
(2)Documenting the number of local educational agencies that receive a grant pursuant to this section that have electrification deployments planned for 25 percent of their fleet or greater.
(h)For purposes of this section, the following definitions apply:
(1)Local educational agency means any of the following:
(A)A school district, county office of education, or charter school, excluding a charter school classified as a nonclassroom-based charter school as of the 202122 fiscal year second principal apportionment certification pursuant to Section 47612.5 of the Education Code, with ownership of title for a schoolbus or schoolbuses.
(B)A school district or charter school, excluding a charter school classified as a nonclassroom-based charter school as of the 202122 fiscal year second principal apportionment certification pursuant to Section 47612.5 of the Education Code, that contracts with a county office of education or private contractor for the maintenance and operation of its schoolbuses.
(C)A county office of education that contracts with a private contractor for maintenance and operation of its schoolbuses.
(D)A joint powers authority currently operating home-to-school transportation programs on behalf of school districts, county offices of education, or charter schools, excluding charter schools classified as a nonclassroom-based charter school as of the 202122 fiscal year second principal apportionment certification pursuant to Section 47612.5 of the Education Code.
(2)Private contractor means an entity that sells, leases, finances, or otherwise provides zero-emission schoolbuses, charging or fueling equipment for zero-emission schoolbuses, or related services to a local educational agency.
SEC. 2.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
(a)Under the California Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project, the state board shall authorize a voucher issued under the program to be used for the acquisition of any zero-emission vehicle that meets all of the following requirements:
(1)The vehicle has a gross vehicle weight rating that exceeds 8,500 pounds.
(2)The vehicle is not a house car, as defined in Section 362 of the Vehicle Code.
(3)The vehicle meets either of the following requirements:
(A)The vehicle is purchased for fleet operations by a public or private fleet owning one or more medium- and heavy-duty vehicles.
(B)The vehicle is purchased by an individual for both personal and commercial use.
(b)A voucher shall only be available for the purpose set forth in subparagraph (B) of paragraph (3) of subdivision (a) if the individual receiving the voucher attests to the state board under the penalty of perjury that the vehicle will be substantially primarily be used in furtherance of a valid commercial or business purpose. purpose, including, but not limited to, hauling or towing.
(c)The state board may adopt regulations to implement this chapter.
SEC. 2.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
(a)Under the California Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project, the state board shall authorize a voucher issued under the program to be used for the acquisition of any zero-emission vehicle that meets all of the following requirements:
(1)The vehicle has a gross vehicle weight rating that exceeds 8,500 pounds.
(2)The vehicle is not a house car, as defined in Section 362 of the Vehicle Code.
(3)The vehicle meets either of the following requirements:
(A)The vehicle is purchased for fleet operations by a public or private fleet owning one or more medium- and heavy-duty vehicles.
(B)The vehicle is purchased by an individual for both personal and commercial use.
(b)A voucher shall only be available for the purpose set forth in subparagraph (B) of paragraph (3) of subdivision (a) if the individual receiving the voucher attests to the state board under the penalty of perjury that the vehicle will be substantially used in furtherance of a valid commercial or business purpose.
(c)The state board may adopt regulations to implement this chapter.
SEC. 2.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
SECTION 1.It is the intent of the Legislature to enact subsequent legislation to amend the California Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project as established and administered by the State Air Resources Board.It is the intent of the Legislature to enact subsequent legislation to amend the California Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project as established and administered by the State Air Resources Board.
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Date
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Status
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|---|---|
| Jun 14, 2024 | June 17 set for first hearing canceled at the request of author. |
| Jun 10, 2024 | From committee with author's amendments. Read second time and amended. Re-referred to Com. on TRANS. |
| Jun 3, 2024 | Referred to Coms. on TRANS. and NAT. RES. |
| May 24, 2024 | In Assembly. Read first time. Held at Desk. |
| May 23, 2024 | Read third time. Passed. (Ayes 37. Noes 0. Page 4182.) Ordered to the Assembly. |
| May 20, 2024 | Ordered to special consent calendar. |
| May 16, 2024 | Read second time. Ordered to third reading. |
| May 16, 2024 | From committee: Do pass. (Ayes 7. Noes 0. Page 3981.) (May 16). |
| May 14, 2024 | Set for hearing May 16. |
| May 13, 2024 | May 13 hearing: Placed on APPR suspense file. |
| May 3, 2024 | Set for hearing May 13. |
| Apr 25, 2024 | Read second time and amended. Re-referred to Com. on APPR. |
| Apr 24, 2024 | From committee: Do pass as amended and re-refer to Com. on APPR. (Ayes 14. Noes 0. Page 3733.) (April 23). |
| Apr 17, 2024 | From committee: Do pass and re-refer to Com. on TRANS. (Ayes 7. Noes 0. Page 3661.) (April 17). Re-referred to Com. on TRANS. |
| Apr 16, 2024 | Set for hearing April 23 in TRANS. pending receipt. |
| Apr 5, 2024 | Set for hearing April 17. |
| Apr 3, 2024 | Re-referred to Coms. on E.Q. and TRANS. |
| Mar 18, 2024 | From committee with author's amendments. Read second time and amended. Re-referred to Com. on RLS. |
| Feb 29, 2024 | Referred to Com. on RLS. |
| Feb 20, 2024 | From printer. May be acted upon on or after March 18. |
| Feb 16, 2024 | Introduced. Read first time. To Com. on RLS. for assignment. To print. |
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Date
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Description
|
Location
|
Votes
|
|
|---|---|---|---|---|
| May 23, 2024 | Special Consent SB1387 Newman | Senate Floor |
Passed |
|
| May 16, 2024 | Do pass | Senate Standing Committee on Appropriations |
Passed |
|
| May 13, 2024 | Placed on suspense file | Senate Standing Committee on Appropriations |
Passed |
|
| Apr 23, 2024 | Do pass as amended, but first amend, and re-refer to the Committee on [Appropriations] | Senate Standing Committee on Transportation |
Passed |
|
| Apr 17, 2024 | Do pass, but first be re-referred to the Committee on [Transportation] | Senate Standing Committee on Environmental Quality |
Passed |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
|
Organization
|
Position
|
Date
|
|---|---|---|
| Advanced Energy United | ** Support | |
| Alliance For Automotive Innovation | ** Support | |
| California Hydrogen Business Council | * Support | Apr 17, 2024 |
| California Hydrogen Coalition | ** Support | |
| California State Association Of Counties | ** Support | |
| First Student, Inc. | * Support | Apr 17, 2024 |
| League Of California Cities | ** Support | |
| National Express | * Support | Apr 17, 2024 |
| Orange County Automobile Dealers Association | ** Support | |
| Tom's Truck Center | * Support | Apr 17, 2024 |
SENATE RULES COMMITTEE Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | SB 1387 |
THIRD READING
Bill No: SB 1387
Author: Newman (D)
Amended: 4/25/24
Vote: 21
SENATE ENVIRONMENTAL QUALITY COMMITTEE: 7-0, 4/17/24
AYES: Allen, Dahle, Archuleta, Gonzalez, Menjivar, Nguyen, Skinner
SENATE TRANSPORTATION COMMITTEE: 14-0, 4/23/24
AYES: Cortese, Allen, Archuleta, Blakespear, Dahle, Dodd, Gonzalez, Laird, Limón, Newman, Nguyen, Portantino, Seyarto, Umberg
NO VOTE RECORDED: Niello
SENATE APPROPRIATIONS COMMITTEE: 7-0, 5/16/24
AYES: Caballero, Jones, Ashby, Becker, Bradford, Seyarto, Wahab
SUBJECT: California Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project: vehicle eligibility
SOURCE: Author
DIGEST:
This bill expands eligibility to the Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project to include a zero-emission vehicle exceeding 8,500 lbs that is not a house car, and that is either purchased for fleet operations by a public or private fleet or by an individual for primarily commercial use.
ANALYSIS:
Existing law:
- Establishes the California Air Resources Board (CARB) to, among other things, control emissions from a wide array of mobile sources. (Health and Safety Code (HSC) §39500 et seq.)
- Establishes the Greenhouse Gas Reduction Fund (GGRF) in the State Treasury, requires all moneys, collected pursuant to a market-based mechanism be deposited in the fund. (Government Code (GOV) §16428.8)
- Defines pickup trucks as “a motor truck with a manufacturer’s gross vehicle weight rating of less than 11,500 pounds, an unladen weight of less than 8,001 pounds, and which is equipped with an open box-type bed not exceeding 9 feet in length.” (Vehicle Code §471)
This bill:
- Directs CARB to authorize an Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project (HVIP) voucher may be used for the purchase of a zero-emission vehicle (ZEV) that:
- Has a gross vehicle weight rating (GVWR) of over 8,500 lbs;
- Is not a house car, as defined; and
- Is purchased either for fleet operations by a public or private fleet, or by an individual for both personal and commercial use, as specified.
- Stipulates that for an individual receiving a voucher, they must attest to CARB under pain of perjury that the vehicle will be primarily used in furtherance of a valid commercial or business purpose, such has hauling or towin.
Background
- Medium- and heavy-duty ZEV efforts. Nearly 40% of California's GHG emissions are generated by the transportation sector, which includes both the light-duty (passenger) and medium- and heavy-duty (MHD) fleets. Heavy-duty diesel trucks also contribute to unhealthy levels of ozone, inhalable particulate matter, carbon monoxide, NOx, and sulfur dioxide, affecting local air quality. Trucks make up only 6% of the state’s vehicle population, but they represent almost a quarter of the state's transportation GHG emissions and nearly half the NOx emissions.
CARB has taken many actions to reduce emissions from MHD vehicles, both in the form of incentives and regulations. For example, the Board finalized the Advanced Clean Truck (ACT) regulation in June 2020. ACT accelerates a large-scale transition of MHD vehicles such as diesel trucks and vans to zero-emission vehicles (ZEVs) through a sales requirement based on vehicle weight classes that range from Class 2b to Class 8 for MHD vehicles.
To further the transition to a zero-emission fleet, at the end of 2020, Governor Newsom issued Executive Order (EO) N-79-20, which requires 100% of MHD vehicles in the state be zero-emission by 2045 for all operations where feasible and by 2035 for drayage trucks. EO N-79-20 charged CARB with developing and proposing medium- and heavy-duty vehicle regulations requiring increasing volumes of new zero-emission trucks and buses sold and operated in the state towards that goal. To this end, and in furtherance of their mandate to reduce emissions from mobile sources to help reach the state’s climate and air quality goals, CARB unanimously approved the Advanced Clean Fleet (ACF) regulations last year. - Advanced Clean Fleets. Approved unanimously by the CARB Board in April 2023, ACF requires a phased-in transition toward zero-emission medium-and-heavy duty vehicles. The rule is expected to generate $26.6 billion in health savings from reduced asthma attacks, emergency room visits and respiratory illnesses. Furthermore, fleet owners will save an estimated $48 billion in their total operating costs from the transition through 2050. Under the new rule, fleet owners operating vehicles for private services such as last-mile delivery and federal fleets such as the Postal Service, along with state and local government fleets, will begin their transition toward zero-emission vehicles starting in 2024. The rule includes the ability to continue operating existing vehicles through their useful life. Due to the impact that truck traffic has on residents living near heavily trafficked corridors, drayage trucks will need to be zero-emissions by 2035. All other fleet owners will have the option to transition a percentage of their vehicles to meet expected zero-emission milestones, which gives owners the flexibility to continue operating combustion-powered vehicles as needed during the move toward cleaner technology. The flexibility is intended to take into consideration the available technology and the need to target the highest-polluting vehicles. For example, last mile delivery and yard trucks must transition by 2035, work trucks and day cab tractors must be zero-emission by 2039, and sleeper cab tractors and specialty vehicles must be zero-emission by 2042.
- Who is covered by Advanced Clean Fleets? The ACF regulation applies to fleets performing drayage operations, those owned by State, local, and federal government agencies, and high priority fleets. High priority fleets are entities that own, operate, or direct at least one vehicle in California, and that have either $50 million or more in gross annual revenues, or that own, operate, or have common ownership or control of a total of 50 or more vehicles (excluding light-duty package delivery vehicles). The regulation affects medium- and heavy-duty on-road vehicles with a GVWR greater than 8,500 lbs, off-road yard tractors, and light-duty mail and package delivery vehicles.
Vehicle Weight Class | Base voucher amount |
Class 2B (8,501-10,000 lbs) | $7,500 |
Class 3 (10,001-14,000 lbs) | $45,000 |
Class 4-5 (14,001-19,500 lbs) | $60,000 |
Class 6-7 (19,501-33,000 lbs) | $85,000 |
Class 8 (33,001 lbs and above) | $120,000 |
- The Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project. Beyond regulations, CARB also administers a number of incentive programs to support the shift of the state’s vehicle fleet to ZEVs. One notable example—and the topic of this bill—is the Hybrid and Zero-Emission Truck and Bus Voucher Incentive Projector, or HVIP.
HVIP accelerates the deployment of zero-emission and plug-in hybrid trucks and buses, in California. HVIP stimulates deployment of advanced clean commercial vehicles, with the goal of improving community health with immediate air pollution emission reductions, as well as reducing GHG emissions to help meet state climate goals. Grantees are selected via a competitive CARB solicitation. HVIP provides vouchers on a first-come, first-served basis in most cases. In addition, HVIP provides increased incentives for small fleets in disadvantaged communities and meeting other requirements. Vehicles are eligible for varying incentives, which scale with vehicle weight.
Comments
- Purpose of the Bill. According to the author, “With an estimated 4.1 million vehicles on California’s roads, pickup trucks are a prime example of high-demand work vehicles for which practical and affordable zero-emission options are sorely needed. Data indicates medium-duty pickup trucks comprise roughly half the nation’s entire truck population. Of that number, roughly half are owned and driven by individuals and independent contractors. SB 1387 will help California achieve its ambitious decarbonization goals by updating its leading vehicle incentive program, the Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project (HVIP), to cover medium-duty pickup trucks and the independent contractors who depend upon those vehicles for their livelihoods. The passage and implementation of SB 1387 will strategically incentivize private-sector development of new zero-emission models, thereby enabling California to move that much more rapidly toward an equitable and effective overall ZEV transition and low-carbon future.”
- Zero-sum game. HVIP is a heavily oversubscribed incentive program. For instance, the third and final wave of HVIP funding in 2021 opened and closed on October 28, 2021; all vouchers were claimed within 9 minutes of the application opening. While this bill would expand eligibility to applicants who are not currently able to pursue these funds, it is by no means a guarantee that those applicants would be able to secure a voucher.
Given the limited number of vouchers available, expanding eligibility also means more interested parties may be unable to obtain the incentive. Consider this in the context of ACF compliance. The ACF regulation applies to fleets performing drayage operations, those owned by State, local, and federal government agencies, and high priority fleets. Many of those entities are eligible to receive HVIP vouchers, and vehicles purchased using those vouchers can count towards ACF compliance. In contrast, some of the individuals who would benefit from this bill are not required to comply with ACF. Though the effect would be expected to be relatively small (given set asides, fleet sizes, voucher amounts, and the number of eligible vehicles), This bill could have the unintended effect of making full ACF compliance slightly more difficult. Ultimately, the state’s ZEV goals will require all vehicles to be zero-emission, but ACF has garnered the most attention to date. - What trucks are we talking about here? This bill would make eligible for HVIP certain sales of ZEVs that have a GVWR over 8,500 lbs. This is the cut-off point for so-called “Class 2B” vehicles (Class 1B being 6,001 to 8,500 lbs). For comparison, examples of internal combustion engine (ICE) powered Class 2A trucks include the Ford F-150, RAM 1500, and Chevrolet 1500, while the Chevy Silverado 2500, RAM 2500, and Ford F-250 are Class 2B.
In terms of ZEV Class 2 vehicles, there are fewer extant options. Three Class 2B ZEVs are eligible for HVIP today: two models of chassis cab trucks and a van. There are three ZEV pickup trucks widely available in California today (none of which are currently HVIP-eligible), which vary in their GVWR: the Tesla Cybertruck (GVWR between 6,600 and 6,900 lbs), the Ford F150 Lightning (GVWR between 8,250 and 8,550 lbs), and the Rivian R1T (GVWR of 8,532 lbs). In short, This bill would allow HVIP to be used to purchase the Rivian R1T and some configurations of the Ford F150 Lightning.
Californians shopping for ZEV pickup trucks today have few options. There are no hydrogen fuel cell pickup trucks available for purchase in California, though the concept is being explored by a few manufacturers. Given current HVIP voucher amounts, Class 2B trucks could be expected to be eligible for a $7,500 voucher. The Rivian R1T starts at a manufacturer’s suggested retail price (MSRP) of $69,900, and the Ford F150 Lightning starts at an MSRP of $49,995. To the extent that individuals are in the market for Class 2B ZEV pickups for commercial purposes, $7,500 could cover a portion of that cost.
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes
According to the Senate Appropriations Committee,
- CARB estimates ongoing costs of about $695,000 annually (Greenhouse Gas Reduction Fund [GGRF]) to amend and update the existing HVIP with the updated definition of vehicle eligibility and implement an audit program to ensure vehicles purchased using HVIP vouchers are purchased and used for fleet operations by a public or private fleet owning one or more medium- and heavy-duty vehicles, among other things.
- Unknown but likely significant ongoing cost pressure (GGRF) due to expanded HVIP eligibility.
SUPPORT: (Verified 5/16/24)
Advanced Energy United
Alliance for Automotive Innovation
California Hydrogen Coalition
California State Association of Counties (CSAC)
League of California Cities
Orange County Automobile Dealers Association
OPPOSITION: (Verified 5/16/24)
None received
Prepared by: Eric Walters / E.Q. / (916) 651-4108
5/17/24 18:49:06
**** END ****
SENATE COMMITTEE ON
Senator Anna Caballero, Chair
2023 - 2024 Regular Session
SB 1387 (Newman) - California Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project: vehicle eligibility
Version: | Policy Vote: |
Urgency: | Mandate: |
Hearing Date: | Consultant: |
Bill Summary:
This bill would expand eligibility to the Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project (HVIP) to include a zero-emission vehicle (ZEV) exceeding 8,500 pounds (lbs) that is not a house car, and that is either purchased for fleet operations by a public or private fleet or by an individual for personal and (primarily in furtherance of) commercial use.
Fiscal Impact:
- The California Air Resources Board (ARB) estimates ongoing costs of about $695,000 annually (Greenhouse Gas Reduction Fund [GGRF]) to amend and update the existing HVIP with the updated definition of vehicle eligibility and implement an audit program to ensure vehicles purchased using HVIP vouchers are purchased and used for fleet operations by a public or private fleet owning one or more medium- and heavy-duty vehicles, among other things.
- Unknown but likely significant ongoing cost pressure (GGRF) due to expanded HVIP eligibility.
Background:
Medium- and heavy-duty ZEV efforts. Nearly 40% of California's GHG emissions are generated by the transportation sector, which includes both the light-duty (passenger) and medium- and heavy-duty (MHD) fleets. Heavy-duty diesel trucks also contribute to unhealthy levels of ozone, inhalable particulate matter, carbon monoxide, NOx, and sulfur dioxide, affecting local air quality. Trucks make up only 6% of the state’s vehicle population, but they represent almost a quarter of the state's transportation GHG emissions and nearly half the NOx emissions.
CARB has taken many actions to reduce emissions from MHD vehicles, both in the form of incentives and regulations. For example, the Board finalized the Advanced Clean Truck (ACT) regulation in June 2020. ACT accelerates a large-scale transition of MHD vehicles such as diesel trucks and vans to zero-emission vehicles (ZEVs) through a sales requirement based on vehicle weight classes that range from Class 2b to Class 8 for MHD vehicles.
To further the transition to a zero-emission fleet, at the end of 2020, Governor Newsom issued Executive Order (EO) N-79-20, which requires 100% of MHD vehicles in the state be zero-emission by 2045 for all operations where feasible and by 2035 for drayage trucks. EO N-79-20 charged CARB with developing and proposing medium- and heavy-duty vehicle regulations requiring increasing volumes of new zero-emission trucks and buses sold and operated in the state towards that goal. To this end, and in furtherance of their mandate to reduce emissions from mobile sources to help reach the state’s climate and air quality goals, CARB unanimously approved the Advanced Clean Fleet (ACF) regulations last year.
Advanced Clean Fleets. Approved unanimously by the CARB Board in April 2023, ACF requires a phased-in transition toward zero-emission medium-and-heavy duty vehicles. The rule is expected to generate $26.6 billion in health savings from reduced asthma attacks, emergency room visits and respiratory illnesses. Furthermore, fleet owners will save an estimated $48 billion in their total operating costs from the transition through 2050. Under the new rule, fleet owners operating vehicles for private services such as last-mile delivery and federal fleets such as the Postal Service, along with state and local government fleets, will begin their transition toward zero-emission vehicles starting in 2024. The rule includes the ability to continue operating existing vehicles through their useful life. Due to the impact that truck traffic has on residents living near heavily trafficked corridors, drayage trucks will need to be zero-emissions by 2035. All other fleet owners will have the option to transition a percentage of their vehicles to meet expected zero-emission milestones, which gives owners the flexibility to continue operating combustion-powered vehicles as needed during the move toward cleaner technology. The flexibility is intended to take into consideration the available technology and the need to target the highest-polluting vehicles. For example, last mile delivery and yard trucks must transition by 2035, work trucks and day cab tractors must be zero-emission by 2039, and sleeper cab tractors and specialty vehicles must be zero-emission by 2042.
Who is covered by Advanced Clean Fleets? The ACF regulation applies to fleets performing drayage operations, those owned by State, local, and federal government agencies, and high priority fleets. High priority fleets are entities that own, operate, or direct at least one vehicle in California, and that have either $50 million or more in gross annual revenues, or that own, operate, or have common ownership or control of a total of 50 or more vehicles (excluding light-duty package delivery vehicles). The regulation affects medium- and heavy-duty on-road vehicles with a GVWR greater than 8,500 lbs, off-road yard tractors, and light-duty mail and package delivery vehicles.
The Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project. Beyond regulations, CARB also administers a number of incentive programs to support the shift of the state’s vehicle fleet to ZEVs. One notable example—and the topic of this bill—is the Hybrid and Zero-Emission Truck and Bus Voucher Incentive Projector, or HVIP.
HVIP accelerates the deployment of zero-emission and plug-in hybrid trucks and buses, and trucks equipped with electric power take off systems, in California. HVIP stimulates deployment of advanced clean commercial vehicles, with the goal of improving community health with immediate air pollution emission reductions, as well as reducing greenhouse gas emissions to help meet State climate goals, and yielding substantial economic benefits. It is implemented through a partnership between CARB and a Grantee, selected via a competitive CARB grant solicitation. HVIP provides vouchers on a first-come, first-served basis in most cases. In addition, HVIP provides increased incentives for small fleets domiciled in disadvantaged communities and meeting other requirements.
Vehicles are eligible for varying voucher amounts, which scale with vehicle weight.
Vehicle Weight Class | Base voucher amount |
Class 2B (8,501-10,000 lbs) | $7,500 |
Class 3 (10,001-14,000 lbs) | $45,000 |
Class 4-5 (14,001-19,500 lbs) | $60,000 |
Class 6-7 (19,501-33,000 lbs) | $85,000 |
Class 8 (33,001 lbs and above) | $120,000 |
Proposed Law:
This bill would expand eligibility to the Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project to include a ZEV exceeding 8,500 pounds (lbs) that is not a house car, and that is either purchased for fleet operations by a public or private fleet or by an individual for personal and (primarily in furtherance of) commercial use. Specifically, this bill would:
- Direct ARB to authorize a Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project voucher that may be used for the purchase of a ZEV that:
- Has a gross vehicle weight rating (GVWR) of over 8,500 lbs;
- Is not a house car, as defined;
- Is purchased either for fleet operations by a public or private fleet, or by an individual for both personal and commercial use, as specified.
- Stipulate that for an individual receiving a voucher, they must attest to ARB under penalty of perjury that the vehicle will be primarily used in furtherance of a valid commercial or business purpose, including, but not limited to, hauling or towing.
Related Legislation:
AB 32 (Nunez, Chapter 488, Statutes of 2006) authorizes the creation of the state’s “Cap and Trade Program” and creates several addition programs and funds around alternative fuel, vehicles, and air quality.
AB 118 (Nunez, Chapter 750, Statutes of 2007) requires that the CARB create and administer the HVIP program.
AB 398 (E. Garcia, Chapter 135, Statutes of 2017) extends the state’s “Cap and Trade” program created under AB 32 until 2031.
SB 425 (Newman, 2023) would have provided additional incentives—an additional $1,000 and access to high-occupancy vehicle lanes—under the Clean Vehicle Rebate Project (CVRP) for hydrogen fuel cell pickup trucks, as defined. SB 425 died in the Assembly Appropriations Committee.
Staff Comments:
HVIP is a heavily oversubscribed incentive program. For instance, the third and final wave of HVIP funding in 2021 opened and closed on October 28, 2021; all vouchers were claimed within 9 minutes of the application opening. While SB 1387 would expand eligibility to applicants who are not currently able to pursue these funds, it is by no means a guarantee that those applicants would be able to secure a voucher. Given the limited number of vouchers available, expanding eligibility also means more interested parties may be unable to obtain the incentive.
-- END --
SENATE COMMITTEE ON TRANSPORTATION
Senator Dave Cortese, Chair
2023 - 2024 Regular
Bill No: SB 1387 Hearing Date: 4/23/2024
Author: | Newman | ||
Version: | 3/18/2024 Amended | ||
Urgency: | No | Fiscal: | Yes |
Consultant: | Benjamin O'Brien-Hokanson | ||
SUBJECT: California Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project: vehicle eligibility
DIGEST: This bill expands eligibility to the Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project to include a zero-emission vehicle exceeding 8,500 pounds (lbs) that is not a house car, and that is either purchased for fleet operations by a public or private fleet or by an individual for personal and (substantially in furtherance of) commercial use.
ANALYSIS:
Existing law:
- Establishes the California Air Resources Board (CARB) as the air pollution control agency in California and requires the CARB, among other things, to control emissions from a wide array of mobile sources.
- Establishes the Greenhouse Gas Reduction Fund (GGRF) in the State Treasury, requires all moneys, except for fines and penalties, collected pursuant to a market-based mechanism be deposited in the fund.
- Sets requirements for CARB’s heavy-duty vehicle investments funded through “Cap and Trade”.
- Defines pickup trucks as “a motor truck with a manufacturer’s gross vehicle weight rating of less than 11,500 pounds, an unladen weight of less than 8,001 pounds, and which is equipped with an open box-type bed not exceeding 9 feet in length.”
This bill:
- Directs CARB to authorize a Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project voucher that may be used for the purchase of a zero-emission vehicle (ZEV) that:
- Has a gross vehicle weight rating (GVWR) of over 8,500 lbs;
- Is not a house car, as defined;
- Is purchased either for fleet operations by a public or private fleet, or by an individual for both personal and commercial use, as specified.
- Stipulates that for an individual receiving a voucher, they must attest to CARB under penalty of perjury that the vehicle will be substantially used in furtherance of a valid commercial or business purpose.
COMMENTS:
- Purpose of the bill. According to the author, “With an estimated 4.1 million vehicles on California’s roads, pickup trucks are a prime example of high-demand work vehicles for which practical and affordable zero-emission options are sorely needed. Data indicates medium-duty pickup trucks comprise roughly half the nation’s entire truck population. Of that number, roughly half are owned and driven by individuals and independent contractors. SB 1387 will help California achieve its ambitious decarbonization goals by updating its leading vehicle incentive program, the Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project (HVIP), to cover medium-duty pickup trucks and the independent contractors who depend upon those vehicles for their livelihoods. The passage and implementation of SB 1387 will strategically incentivize private-sector development of new zero-emission models, thereby enabling California to move that much more rapidly toward an equitable and effective overall ZEV transition and low-carbon future.”
- Cleaning up medium- and heavy-duty vehicles. Nearly 40% of California's greenhouse gas (GHG) emissions are generated by the transportation sector, which includes both the light-duty (passenger) and medium- and heavy-duty (MHD) fleets. MHD trucks make up only 6% of the state’s vehicle population, but they represent almost a quarter of the state's transportation GHG emissions.
CARB has taken many actions to reduce emissions from MHD vehicles, both in the form of incentives and regulations. For example, the Board finalized the Advanced Clean Truck (ACT) regulation in June 2020. ACT accelerates a large-scale transition of MHD vehicles such as diesel trucks and vans to zero-emission vehicles (ZEVs) through a sales requirement based on vehicle weight classes that range from Class 2b to Class 8 for MHD vehicles.
To further spark the transition to a zero-emission fleet, at the end of 2020, Governor Newsom issued Executive Order (EO) N-79-20, which requires 100% of MHD vehicles in the state be zero-emission by 2045 for all operations where feasible and by 2035 for drayage trucks. It also specifies that by 2027 all new MHD fleet vehicle purchases will need to be ZEVs. To help accomplish these goals, EO N-79-20 charged CARB with developing and proposing MHD vehicle regulations requiring increasing volumes of new zero-emission trucks and buses sold and operated in the state.
- Advanced Clean Fleets. In furtherance of their mandate to reduce emissions from mobile sources to help reach the state’s climate and air quality goals, CARB unanimously approved the Advanced Clean Fleet (ACF) regulations in 2023. ACF requires a phased-in transition toward zero-emission medium-and-heavy duty vehicles. Under the new rule, fleet owners operating vehicles for private services such as last-mile delivery and federal fleets such as the Postal Service, along with state and local government fleets, will begin their transition toward zero-emission vehicles starting in 2024. The rule includes the ability to continue operating existing vehicles through their useful life. Due to the impact that truck traffic has on residents living near heavily trafficked corridors, drayage trucks will need to be zero-emissions by 2035. All other fleet owners will have the option to transition a percentage of their vehicles to meet expected zero-emission milestones, which gives owners the flexibility to continue operating combustion-powered vehicles as needed during the move toward cleaner technology. The flexibility is intended to take into consideration the available technology and the need to target the highest-polluting vehicles. For example, last mile delivery and yard trucks must transition by 2035, work trucks and day cab tractors must be zero-emission by 2039, and sleeper cab tractors and specialty vehicles must be zero-emission by 2042.
The ACF regulation applies to fleets performing drayage operations, those owned by State, local, and federal government agencies, and high priority fleets. High priority fleets are entities that own, operate, or direct at least one vehicle in California, and that have either $50 million or more in gross annual revenues, or that own, operate, or have common ownership or control of a total of 50 or more vehicles (excluding light-duty package delivery vehicles). The regulation affects medium- and heavy-duty on-road vehicles with a GVWR greater than 8,500 lbs, off-road yard tractors, and light-duty mail and package delivery vehicles.
- The Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project. Beyond regulations, CARB administers a number of incentive programs to support the shift of the state’s vehicle fleet to ZEVs. One example being the Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project, or HVIP.
HVIP was created by the California Alternative and Renewable Fuel, Vehicle Technology, Clean Air, and Carbon Reduction Act of 2007 (AB 118, Nunez). HVIPs incentives help to accelerate the deployment of zero-emission and plug-in hybrid trucks and buses, and trucks equipped with electric power take off systems in California, with the goals of improving community health with immediate air pollution and GHG emission reductions and helping the State reach its overall climate goals. HVIP is implemented through a partnership between CARB and a grantee, selected via a competitive CARB grant solicitation. HVIP provides vouchers on a first-come, first-served basis for any fleet owner or operator, including commercial operators, local governments, and non-profit agencies, to replace current vehicle fleets with hybrid and ZEVs providing clean air benefits.
Under HVIP, manufacturers apply to CARB to determine if the vehicles they produce meet clean air targets. If CARB certifies the engine, CARB lists vehicles with those engines on its website as qualifying for vouchers. CARB calculates voucher amounts based on the “incremental amount,” or the price difference between an HVIP-eligible vehicle and one that runs on conventional fuel. Voucher amounts can vary between $6,000 for a Class 2 Hybrid Truck to $300,000 for a 40-foot bus (see table below), and are generally based on the kind of vehicle, its weight, the number of vehicles purchased, and whether the vehicle will be used in a disadvantaged community.
Vehicle Weight Class | Base voucher amount |
Class 2B (8,501-10,000 lbs) | $7,500 |
Class 3 (10,001-14,000 lbs) | $45,000 |
Class 4-5 (14,001-19,500 lbs) | $60,000 |
Class 6-7 (19,501-33,000 lbs) | $85,000 |
Class 8 (33,001 lbs and above) | $120,000 |
First, a potential purchaser contacts a vehicle dealer to purchase a vehicle eligible for a voucher. Second, the dealer verifies that HVIP funds are available, and that CARB has certified the vehicle as eligible for a voucher. The dealer then applies to a CARB-designated grantee (currently CALSTART) for a voucher. If approved, the purchaser then pays the dealer the purchase price of the vehicle minus the value of the voucher, and the dealer then arranges to build the vehicle to suit the purchaser’s order. Once the vehicle is placed in service, CALSTART reimburses the dealer upon presentation of the voucher. The purchaser must report to CARB regarding their usage of the vehicle for the next three years.
CARB allocates funds appropriated by the Legislature from the GGRF to CALSTART to pay vouchers, which is funded from auction proceeds under the state’s “Cap and Trade” program authorized by the Global Warming Solutions Act (AB 32, Nunez, 2006; extended by AB 398, E. Garcia, 2017). Each year, the Legislature appropriates GGRF funds to various agencies, including CARB, for various purposes, including HVIP.
- Finite amount of funds. HVIP is a heavily oversubscribed incentive program. For instance, the third and final wave of HVIP funding in 2021 opened and closed on October 28, 2021; all vouchers were claimed within 9 minutes of the application opening. While SB 1387 would expand eligibility to applicants who are not currently able to pursue these funds, it is by no means a guarantee that those applicants would be able to secure a voucher.
Given the limited number of vouchers available, expanding eligibility also means more interested parties may be unable to obtain the incentive. Consider this in the context of ACF compliance. The ACF regulation applies to fleets performing drayage operations, those owned by State, local, and federal government agencies, and high priority fleets. Many of those entities are eligible to receive HVIP vouchers, and vehicles purchased using those vouchers can count towards ACF compliance. In contrast, some of the individuals who would benefit from SB 1387 are not required to comply with ACF. Though the effect would be expected to be relatively small (given set asides, fleet sizes, voucher amounts, and the number of eligible vehicles), SB 1387 could have the unintended effect of making full ACF compliance slightly more difficult. However, this bill does have support from the California State Association of Counties and the League of California Cities; two large organizations responsible for significant MHD fleets that will need to comply with ACF. Ultimately, the state’s ZEV goals will require all vehicles to be zero-emission, but compliance with the recent ACF regulations has garnered the most attention so far is mentioned here.
- What trucks does this bill capture? This bill would make eligible for HVIP certain sales of ZEVs that have a GVWR over 8,500 lbs. This is the cut-off point for so-called “Class 2B” vehicles (Class 1B being 6,001 to 8,500 lbs). For comparison, examples of internal combustion engine (ICE) powered Class 2A trucks include the Ford F-150, RAM 1500, and Chevrolet 1500, while the Chevy Silverado 2500, RAM 2500, and Ford F-250 are Class 2B.
In terms of ZEV Class 2 vehicles, there are fewer extant options. Three Class 2B ZEVs are eligible for HVIP today: two models of chassis cab trucks and a van. There are three ZEV pickup trucks widely available in California today (none of which are currently HVIP-eligible), which vary in their GVWR: the Tesla Cybertruck (GVWR between 6,600 and 6,900 lbs), the Ford F150 Lightning (GVWR between 8,250 and 8,550 lbs), and the Rivian R1T (GVWR of 8,532 lbs). In short, SB 1387 would allow HVIP to be used to purchase the Rivian R1T and some configurations of the Ford F150 Lightning.
Californians shopping for ZEV pickup trucks today have few options. There are no hydrogen fuel cell pickup trucks available for purchase in California, though the concept is being explored by a few manufacturers. Given current HVIP voucher amounts, Class 2B trucks could be expected to be eligible for a $7,500 voucher. The Rivian R1T starts at a manufacturer’s suggested retail price (MSRP) of $69,900, and the Ford F150 Lightning starts at an MSRP of $49,995. To the extent that individuals are in the market for Class 2B ZEV pickups for commercial purposes, $7,500 could cover a portion of that cost.
In addition to the voucher itself, the passage and implementation of SB 1387 may function to strategically incentivize private sector development of new zero-emission truck models. This perspective is voiced in a letter of support for the bill from the Orange County Automobile Dealers Association, “SB 1387 would provide for the very first time incentives to transition Class 2B and Class 3 medium-duty pickup trucks. For workers and fleet owners alike, there are deep concerns that the zero-emission options available on the market today remain frustratingly unaffordable and insufficient in meeting their energy-intensive towing needs. By providing incentives to the medium-duty segment, which represents more than 52% of the entire American truck market, SB 1387 closes a glaring gap within the State’s zero-emission transition strategy.”
- Monster Trucks. The size of the average American vehicle has grown significantly in recent years. In 2012, 64% of new vehicle sales were classified as passenger vehicles, while 34% were classified as light trucks. By 2021, those numbers roughly flipped: 63% light trucks and 37% passenger vehicles. During that same time, pickup trucks grew from 10% to 16% of new car sales, and the average footprint of all new passenger vehicles grew by over 5%. This is attributed not to a sudden embrace of construction work and towing, but rather a deliberate effort by auto manufacturers to escape fuel economy standards that do not apply to light trucks.
To be clear, SB 1387 does not make light trucks eligible for HVIP, but the trend towards using larger vehicles for personal use deserves consideration. Particularly because, with the increased weight of battery electric vehicles (BEVs), certain pickup trucks (the Rivian R1T and some configurations of the F150 Lightning) are heavy enough to be eligible for HVIP under SB 1387, and those vehicles would be expected to be used more often for routine personal driving than other Class 2B trucks like chassis cab trucks or work vans.
Some Class 2B ZEV trucks are undoubtedly used for legitimate business purposes. Some Class 2B ZEV trucks are undoubtedly used for primarily personal use. The author attempts to support the former while minimizing the latter by requiring that receipt of the HVIP voucher depends on the applicant attesting under pain of perjury that the vehicle will be, “substantially used in furtherance of a valid commercial or business purpose.” While that should omit vehicles used solely for personal use, that may still open HVIP up to individuals acquiring vouchers for vehicles primarily used for personal use.
The committee may wish to make amendments agreed to in the Environmental Quality Committee raising the standard applied to personal versus commercial use in Section 44180. (b) to read, “A voucher shall only be available for the purpose set forth in subparagraph (B) of paragraph (3) of subdivision (a) if the individual receiving the voucher attests to the state board under the penalty of perjury that the vehicle will primarily be used in furtherance of a valid commercial or business purpose, including but not limited to hauling or towing.”
Related Legislation:
AB 32 (Nunez, Chapter 488, Statutes of 2006) – Authorizes the creation of the state’s “Cap and Trade Program” and creates several addition programs and funds around alternative fuel, vehicles, and air quality.
AB 118 (Nunez, Chapter 750, Statutes of 2007) – Requires that the CARB create and administer the HVIP program.
AB 398 (E. Garcia, Chapter 135, Statutes of 2017) – Extends the state’s “Cap and Trade” program created under AB 32 until 2031.
SB 425 (Newman, 2023) - Would have provided additional incentives—an additional $1,000 and access to high-occupancy vehicle lanes—under the Clean Vehicle Rebate Project (CVRP) for hydrogen fuel cell pickup trucks, as defined. SB 425 died in the Assembly Appropriations Committee.
FISCAL EFFECT: Appropriation: Fiscal Com.: Local:
POSITIONS: (Communicated to the committee before noon on Wednesday, April 17th.)
SUPPORT:
Advanced Energy United
Alliance for Automotive Innovation
California Hydrogen Coalition
California State Association of Counties (CSAC)
League of California Cities
Orange County Automobile Dealers Association
OPPOSITION:
None received
-- END --
SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
Senator Allen, Chair
2023 - 2024 Regular
Bill No: SB 1387
Author: | Newman | ||
Version: | 3/18/2024 | Hearing Date: | 4/17/2024 |
Urgency: | No | Fiscal: | Yes |
Consultant: | Eric Walters | ||
SUBJECT: California Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project: vehicle eligibility
DIGEST: This bill expands eligibility to the Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project to include a zero-emission vehicle exceeding 8,500 pounds (lbs) that is not a house car, and that is either purchased for fleet operations by a public or private fleet or by an individual for personal and (substantially in furtherance of) commercial use.
ANALYSIS:
Existing law:
- Establishes the California Air Resources Board (CARB) as the air pollution control agency in California and requires the CARB, among other things, to control emissions from a wide array of mobile sources. (Health and Safety Code (HSC) §39500 et seq.)
- Establishes the Greenhouse Gas Reduction Fund (GGRF) in the State Treasury, requires all moneys, except for fines and penalties, collected pursuant to a market-based mechanism be deposited in the fund. (Government Code (GOV) §16428.8)
- Defines pickup trucks as “a motor truck with a manufacturer’s gross vehicle weight rating of less than 11,500 pounds, an unladen weight of less than 8,001 pounds, and which is equipped with an open box-type bed not exceeding 9 feet in length.” (Vehicle Code §471)
This bill:
- Directs CARB to authorize an Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project (HVIP) voucher may be used for the purchase of a zero-emission vehicle (ZEV) that:
- Has a gross vehicle weight rating (GVWR) of over 8,500 lbs;
- Is not a house car, as defined; and
- Is purchased either for fleet operations by a public or private fleet, or by an individual for both personal and commercial use, as specified.
- Stipulates that for an individual receiving a voucher, they must attest to CARB under pain of perjury that the vehicle will be substantially used in furtherance of a valid commercial or business purpose.
Background
- Medium- and heavy-duty ZEV efforts. Nearly 40% of California's GHG emissions are generated by the transportation sector, which includes both the light-duty (passenger) and medium- and heavy-duty (MHD) fleets. Heavy-duty diesel trucks also contribute to unhealthy levels of ozone, inhalable particulate matter, carbon monoxide, NOx, and sulfur dioxide, affecting local air quality. Trucks make up only 6% of the state’s vehicle population, but they represent almost a quarter of the state's transportation GHG emissions and nearly half the NOx emissions.
CARB has taken many actions to reduce emissions from MHD vehicles, both in the form of incentives and regulations. For example, the Board finalized the Advanced Clean Truck (ACT) regulation in June 2020. ACT accelerates a large-scale transition of MHD vehicles such as diesel trucks and vans to zero-emission vehicles (ZEVs) through a sales requirement based on vehicle weight classes that range from Class 2b to Class 8 for MHD vehicles.
To further the transition to a zero-emission fleet, at the end of 2020, Governor Newsom issued Executive Order (EO) N-79-20, which requires 100% of MHD vehicles in the state be zero-emission by 2045 for all operations where feasible and by 2035 for drayage trucks. EO N-79-20 charged CARB with developing and proposing medium- and heavy-duty vehicle regulations requiring increasing volumes of new zero-emission trucks and buses sold and operated in the state towards that goal. To this end, and in furtherance of their mandate to reduce emissions from mobile sources to help reach the state’s climate and air quality goals, CARB unanimously approved the Advanced Clean Fleet (ACF) regulations last year. - Advanced Clean Fleets. Approved unanimously by the CARB Board in April 2023, ACF requires a phased-in transition toward zero-emission medium-and-heavy duty vehicles. The rule is expected to generate $26.6 billion in health savings from reduced asthma attacks, emergency room visits and respiratory illnesses. Furthermore, fleet owners will save an estimated $48 billion in their total operating costs from the transition through 2050. Under the new rule, fleet owners operating vehicles for private services such as last-mile delivery and federal fleets such as the Postal Service, along with state and local government fleets, will begin their transition toward zero-emission vehicles starting in 2024. The rule includes the ability to continue operating existing vehicles through their useful life. Due to the impact that truck traffic has on residents living near heavily trafficked corridors, drayage trucks will need to be zero-emissions by 2035. All other fleet owners will have the option to transition a percentage of their vehicles to meet expected zero-emission milestones, which gives owners the flexibility to continue operating combustion-powered vehicles as needed during the move toward cleaner technology. The flexibility is intended to take into consideration the available technology and the need to target the highest-polluting vehicles. For example, last mile delivery and yard trucks must transition by 2035, work trucks and day cab tractors must be zero-emission by 2039, and sleeper cab tractors and specialty vehicles must be zero-emission by 2042.
- Who is covered by Advanced Clean Fleets? The ACF regulation applies to fleets performing drayage operations, those owned by State, local, and federal government agencies, and high priority fleets. High priority fleets are entities that own, operate, or direct at least one vehicle in California, and that have either $50 million or more in gross annual revenues, or that own, operate, or have common ownership or control of a total of 50 or more vehicles (excluding light-duty package delivery vehicles). The regulation affects medium- and heavy-duty on-road vehicles with a GVWR greater than 8,500 lbs, off-road yard tractors, and light-duty mail and package delivery vehicles.
- The Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project. Beyond regulations, CARB also administers a number of incentive programs to support the shift of the state’s vehicle fleet to ZEVs. One notable example—and the topic of this bill—is the Hybrid and Zero-Emission Truck and Bus Voucher Incentive Projector, or HVIP.
HVIP accelerates the deployment of zero-emission and plug-in hybrid trucks and buses, and trucks equipped with electric power take off systems, in California. HVIP stimulates deployment of advanced clean commercial vehicles, with the goal of improving community health with immediate air pollution emission reductions, as well as reducing greenhouse gas emissions to help meet State climate goals, and yielding substantial economic benefits. It is implemented through a partnership between CARB and a Grantee, selected via a competitive CARB grant solicitation. HVIP provides vouchers on a first-come, first-served basis in most cases. In addition, HVIP provides increased incentives for small fleets domiciled in disadvantaged communities and meeting other requirements.
Vehicles are eligible for varying voucher amounts, which scale with vehicle weight.
Vehicle Weight Class | Base voucher amount |
Class 2B (8,501-10,000 lbs) | $7,500 |
Class 3 (10,001-14,000 lbs) | $45,000 |
Class 4-5 (14,001-19,500 lbs) | $60,000 |
Class 6-7 (19,501-33,000 lbs) | $85,000 |
Class 8 (33,001 lbs and above) | $120,000 |
Comments
- Purpose of Bill. According to the author, “With an estimated 4.1 million vehicles on California’s roads, pickup trucks are a prime example of high-demand work vehicles for which practical and affordable zero-emission options are sorely needed. Data indicates medium-duty pickup trucks comprise roughly half the nation’s entire truck population. Of that number, roughly half are owned and driven by individuals and independent contractors. SB 1387 will help California achieve its ambitious decarbonization goals by updating its leading vehicle incentive program, the Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project (HVIP), to cover medium-duty pickup trucks and the independent contractors who depend upon those vehicles for their livelihoods. The passage and implementation of SB 1387 will strategically incentivize private-sector development of new zero-emission models, thereby enabling California to move that much more rapidly toward an equitable and effective overall ZEV transition and low-carbon future.”
- Zero-sum game. HVIP is a heavily oversubscribed incentive program. For instance, the third and final wave of HVIP funding in 2021 opened and closed on October 28, 2021; all vouchers were claimed within 9 minutes of the application opening. While SB 1387 would expand eligibility to applicants who are not currently able to pursue these funds, it is by no means a guarantee that those applicants would be able to secure a voucher.
Given the limited number of vouchers available, expanding eligibility also means more interested parties may be unable to obtain the incentive. Consider this in the context of ACF compliance. The ACF regulation applies to fleets performing drayage operations, those owned by State, local, and federal government agencies, and high priority fleets. Many of those entities are eligible to receive HVIP vouchers, and vehicles purchased using those vouchers can count towards ACF compliance. In contrast, some of the individuals who would benefit from SB 1387 are not required to comply with ACF. Though the effect would be expected to be relatively small (given set asides, fleet sizes, voucher amounts, and the number of eligible vehicles), SB 1387 could have the unintended effect of making full ACF compliance slightly more difficult. Ultimately, the state’s ZEV goals will require all vehicles to be zero-emission, but ACF has garnered the most attention so far so is mentioned here. - What trucks are we talking about here? This bill would make eligible for HVIP certain sales of ZEVs that have a GVWR over 8,500 lbs. This is the cut-off point for so-called “Class 2B” vehicles (Class 1B being 6,001 to 8,500 lbs). For comparison, examples of internal combustion engine (ICE) powered Class 2A trucks include the Ford F-150, RAM 1500, and Chevrolet 1500, while the Chevy Silverado 2500, RAM 2500, and Ford F-250 are Class 2B.
In terms of ZEV Class 2 vehicles, there are fewer extant options. Three Class 2B ZEVs are eligible for HVIP today: two models of chassis cab trucks and a van. There are three ZEV pickup trucks widely available in California today (none of which are currently HVIP-eligible), which vary in their GVWR: the Tesla Cybertruck (GVWR between 6,600 and 6,900 lbs), the Ford F150 Lightning (GVWR between 8,250 and 8,550 lbs), and the Rivian R1T (GVWR of 8,532 lbs). In short, SB 1387 would allow HVIP to be used to purchase the Rivian R1T and some configurations of the Ford F150 Lightning.
Californians shopping for ZEV pickup trucks today have few options. There are no hydrogen fuel cell pickup trucks available for purchase in California, though the concept is being explored by a few manufacturers. Given current HVIP voucher amounts, Class 2B trucks could be expected to be eligible for a $7,500 voucher. The Rivian R1T starts at a manufacturer’s suggested retail price (MSRP) of $69,900, and the Ford F150 Lightning starts at an MSRP of $49,995. To the extent that individuals are in the market for Class 2B ZEV pickups for commercial purposes, $7,500 could cover a portion of that cost. - Work hard, play hard. The size of the average American vehicle has grown significantly in recent years. In 2012, 64% of new vehicle sales were classified as passenger vehicles, while 34% were classified as light trucks. By 2021, those numbers roughly flipped: 63% light trucks and 37% passenger vehicles. During that same time, pickup trucks grew from 10% to 16% of new car sales, and the average footprint of all new passenger vehicles grew by over 5%. This is attributed not to a sudden embrace of construction work and towing, but rather a deliberate effort by auto manufacturers to escape fuel economy standards that do not apply to light trucks. Over that same time horizon, California (the state with the highest number of pedestrian deaths) climbed from 612 pedestrian fatalities to 1,100, a trend related to—though not exclusively caused by—increasing vehicle sizes.
To be clear, SB 1387 does not make light trucks eligible for HVIP, but the trend towards using larger vehicles for personal use deserves consideration. Particularly because, with the increased weight of battery electric vehicles (BEVs), certain pickup trucks (the Rivian R1T and some configurations of the F150 Lightning) are heavy enough to be eligible for HVIP under SB 1387, and those vehicles would be expected to be used more often for routine personal driving than other Class 2B trucks like chassis cab trucks or work vans.
Some Class 2B ZEV trucks are undoubtedly used for legitimate business purposes. Some Class 2B ZEV trucks are undoubtedly used for primarily personal use. The author attempts to support the former while minimizing the latter by requiring that receipt of the HVIP voucher depends on the applicant attesting under pain of perjury that the vehicle will be, “substantially used in furtherance of a valid commercial or business purpose.” While that should omit vehicles used solely for personal use, that may still open HVIP up to individuals acquiring vouchers for vehicles primarily used for personal use.
The committee may wish to raise the standard applied to personal versus commercial use to ensure vehicles are primarily used for commercial or business purposes, including but not limited to hauling and towing. - Committee amendments. Committee staff recommends the committee adopt the bolded amendments contained in comment 4 above.
Due to timing constraints, these changes must be amended into the bill as part of the actions taken by the next committee. Should the author commit to taking these amendments, the motion in this committee will be “do pass” with that understanding.
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
SB 425 (Newman, 2023) would have provided additional incentives—an additional $1,000 and access to high-occupancy vehicle lanes—under the Clean Vehicle Rebate Project (CVRP) for hydrogen fuel cell pickup trucks, as defined. SB 425 died in the Assembly Appropriations Committee.
SOURCE:
Author
SUPPORT:
California Hydrogen Coalition
League of California Cities
Orange County Automobile Dealers Association
OPPOSITION:
None received
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Discussed in Hearing
Senate Standing Committee on Transportation
Senate Standing Committee on Environmental Quality
Bill Author
Bill Co-Author(s):