California E85 Laws and Incentives
State Incentives
Alternative Fuel Incentive Development
The California Air Resources Board and California Energy Commission have been asked to develop a joint plan, allocating $25 million in incentives, to promote the use and production of alternative fuels. Incentives would be provided for projects in California that promoted high efficiency, high mileage, alternative fuel light-, medium-, and heavy-duty vehicles, for both individual and public fleets. Incentives would be available to replace the current state vehicle fleet with clean, high mileage alternative fuel vehicles and for the construction of both publicly accessible alternative fuel retail fueling stations and fleet fueling facilities, including E-85. In addition, incentives would be provided for alternative fuel production in California and funding for research, development, and testing of alternative fuels and advancing vehicle technology. (Reference Assembly Bill 1811, 2006)
Alternative Fuel Vehicle (AFV) Rebate Program
The "Driving Alternatives" vehicle rebate program has allocated $1.8 million toward vehicle incentive grants for qualifying AFVs. Grants of up to $5,000 will be made available to consumers who purchase or lease eligible zero emission vehicles (ZEVs), plug-in hybrid electric vehicles, and AFVs between May 24, 2007, and March 31, 2009. For the purposes of this program, ZEVs include full function battery electric vehicles, hydrogen fuel cell vehicles, low-speed or neighborhood electric vehicles, and zero emission motorcycles.
Alternative Fuel Research and Development
The Alternative and Renewable Fuel and Vehicle Technology Program will provide grants and loans to public agencies, businesses, fleet owners, consumers, and academic institutions to develop and deploy innovative technologies that transform California's fuel and vehicle types to help attain the state's climate change policies. (Reference Assembly Bill 118, 2007)
Alternative Fuel Vehicle (AFV) and Refueling Infrastructure Grants and Loans
The Assembly Bill 2766 program provides incentive funding for projects that reduce on-road and off-road motor vehicle pollutant emissions (focusing on nitrogen oxides emissions and particulate matter). The program provides applicants with grant money to implement activities or purchase equipment that reduces air pollution from vehicles, including purchasing alternative fuel vehicles and building alternative fuel and advanced technology infrastructure. Check with local air districts to learn how the AB 2766 Motor Vehicle Registration Funds grants are distributed. Some programs include: Yolo-Solano AQMD, South Coast AQMD, Bay Area AQMD, Antelope Valley AQMD, Feather River AQMD, Kern County AQMD, Mojave Desert AQMD, Monterey Bay Unified APCD, North Coast Unified APCD, Northern Sierra AMD , and San Luis Obispo APCD. (Reference Health and Safety Code 44220 to 44246)
Lower-Emission School Bus Grants
The Lower-Emission School Bus Program at the California Air Resources Board (ARB) provides grant funding for new school buses and for air pollution control equipment. Air pollution control devices must be verified by the ARB to reduce particulate matter emissions by at least 85% for each retrofitted school bus. The program focuses on replacing buses that were built prior to 1987.
A transportation bond approved by voters in November 2006 will provide approximately $200 million in funding over two years to replace the oldest remaining public school buses and add pollution control equipment to other buses. Public school districts in California, that own their own buses, are eligible to receive funding for the replacement of older school buses and for the retrofit of in-use buses. Private school transportation providers that contract with public school districts to provide transportation services are eligible to receive funding for the retrofit of in-use buses. Alternative-fueled buses may be powered by natural gas, liquefied petroleum gas, electricity, methanol, or ethanol fuels, provided that the other program requirements are met. Commercially available hybrid school buses may be partially eligible for funding. Check with local air districts to learn how the Lower-Emission School Bus Grants are distributed. (Reference Senate Bill 1266, 2006, and California Government Code 8879.20 to 8879.37, and Proposition 1B, 2006)
Low-Emission Vehicle Incentives and Technical Training - San Joaquin Valley
The REMOVE II Program provides incentives for the purchase of low-emission passenger vehicles, light-duty trucks, small buses, and trucks under 14,000 pounds Gross Vehicle Weight Rating. The purpose of this program is to encourage the early introduction of low-emission vehicles in the San Joaquin Valley. The program pays between $1,000 and $3,000 per vehicle depending on the emission certification level and size of the vehicle. Vehicles must be powered by alternative fuel, electric, or hybrid electric engines/motors. The program also has an Alternative Fuel Vehicle (AFV) Mechanic Training Component that provides incentives for the education of personnel on the mechanics, operation safety, and maintenance of AFVs, equipment structures, fueling stations, and tools involved in the implementation of alternative fuel emission reducing technologies.
Funding for Emission Reductions - South Coast
The South Coast Air Quality Management District (SCAQMD) administers the Air Quality Investment Program (AQIP). The AQIP is a fund created by the SCAQMD, which allows employers within SCAQMD's jurisdiction to make annual investments into an administered fund to meet employers' emission reduction targets. The revenues collected are used to fund alternative mobile source emission/trip reduction programs, including alternative fuel vehicle projects, on an on-going basis. Programs such as procurement of low-emission, alternative fuel or zero emission vehicles, and old vehicle scrapping could be considered for funding.
State Laws and Regulations
Alternative Fuels Plan
On October 31, 2007, the State Energy Resources Conservation and Development Commission, in partnership with other state agencies, developed and adopted the State Alternative Fuels Plan to increase the use of alternative transportation fuels (Reference Assembly Bill 1007, 2005, Assembly Bill 1012 and 2264, 2006, and California Health and Safety Code Section 43865)
Alternative Fuel Vehicle (AFV) Acquisition Requirements
When awarding a vehicle procurement contract, every city, county, and special district, including a school district and a community college district, is authorized to require that 75% of the passenger cars and/or light-duty trucks acquired be energy-efficient vehicles. Vehicle procurement contracts are also authorized to evaluate fuel economy and life-cycle factors. By definition, this includes hybrid vehicles or alternative fuel vehicles that meet California's advanced technology partial zero-emission vehicle (AT PZEV) standard for criteria pollutant emissions. Furthermore, by July 1, 2009, vehicles owned or leased by the state that are capable of operating on an alternative fuel must operate on that fuel unless alternative fuels are not available. The Secretary of State and Consumer Services must develop and implement a plan to reduce or displace the state fleets consumption of petroleum products on or before July 1, 2009. (Reference Assembly Bill 1660, 2005, Assembly Bill 236, 2007,California Health and Safety Code Section 43810, and California Public Resources Code Section 25725)
Biofuels Specifications
The Department of Food and Agriculture, Division of Measurement Standards, has adopted performance and drivability specifications for E85 fuel (85% ethanol blended with 15% gasoline), M85 fuel (85% methanol blended with 15% gasoline), and biodiesel fuel as follows:
1) E85 fuel must meet the standards set forth by the American Society for Testing and Materials (ASTM) specification D 5798.
2) M85 fuel must meet the specifications set forth by ASTM D 5797.
3) Biodiesel blending stock and biodiesel fuel blends must meet the specifications set forth by ASTM D 975 for blended biodiesel and D 6751 for pure biodiesel (B100).
Additionally, blends of B5 or higher must display a sign on each dispenser that reads: "This fuel contains biodiesel. Check the owner's manual or with your engine manufacturer before using."
(Reference California Code of Regulations Title 4, Division 9, Chapter 6, Article 5, Sections 4145, 4146, 4147, and 4148)
Biofuels Production Mandate and Alternative Fuel Use Study
The State of California plans to use biomass resources from agriculture, forestry, and urban wastes to provide transportation fuels and electricity to satisfy California's fuel and energy needs. To increase the use of biomass in fuel production, the state will produce its own biofuels at a minimum of 20% by 2010, 40% by 2020, and 75% by 2050. The California Air Resources Board and the California Energy Commission, in conjunction with other agencies, have participated in the Bioenergy Interagency Working Group to prepare a Bioenergy Action Plan Bioenergy Action Plan. The Bioenergy Action Plan includes: research and development of commercially viable biofuels production and advanced biomass conversion technologies; evaluation of the potential for biofuels to provide a clean, renewable source for hydrogen fuel; and increases the purchase of flexible-fuel vehicles to 50% of total new vehicles purchased by state agencies by 2010. (Reference Executive Order S-06-06, 2006)
Alternative Fuel Vehicle (AFV) License
In order to equalize the vehicle license fee between AFVs and conventional fuel vehicles, the incremental cost of purchasing an AFV is exempt from the vehicle license fee (of 2%) when the costs are more than the most comparable conventional fuel vehicle, as determined by the California Energy Commission. This reduction applies to new, light-duty AFVs that are certified to meet or exceed Ultra Low Emission Vehicle standards. This program expires January 1, 2009. (Reference California Revenue and Taxation Code Section 10759.5)
Alternative Fuel Tax
The excise tax imposed on compress natural gas (CNG), liquefied natural gas (LNG), and liquefied petroleum gas (LPG) as vehicle fuels can be paid through an annual flat-fee rate sticker tax based on the following gross vehicle weight rating:
| Unladen Weight | Fee |
|---|---|
| All passenger cars and other vehicles 4,000 pounds (lbs.) or less | $36 |
| More than 4,000 lbs. but less than 8,001 lbs. | $72 |
| More than 8,000 lbs. but less than 12,001 lbs. | $120 |
| 12,001 lbs. or more | $168 |
Emissions Reduction Requirements - San Joaquin Valley
The San Joaquin Valley Air Pollution Control District is authorized to do the following: 1) Adopt rules and regulations that require the use of best available control technology for new and modified sources of pollution, promote the use of cleaner burning alternative fuels, and encourage and facilitate ridesharing for commuters; 2) Impose a $1 fee on the initial and renewal of motor vehicle registration in the district for reducing air pollution from motor vehicles through activities including the establishment of a clean fuels program; and 3) Establish expedited permit review and project assistance mechanisms for facilities or projects that are directly related to research and development, demonstration, or commercialization of electric and other clean fuel vehicle technologies. (Reference California Health and Safety Code Sections 40603 and 40605)
Utilities/Private Incentives
City of Riverside Employee Vehicle Purchase Incentives
City of Riverside employees are eligible to receive a rebate toward the purchase of qualified alternative fuel and hybrid electric vehicles that are purchased from a City of Riverside automobile dealership. New qualified vehicles can receive up to $2,000 and used qualified vehicles can receive up to $1,000.
