California Agrees on $133 Million for Clean Vehicle Rebate Program

The California legislature allocated $133 million to the Clean Vehicle Rebate Program as the state’s annual budget went down to wire on the August 31 deadline.

The clean vehicle rebate provision was part of a $900 million deal that legislative leaders and Gov. Jerry Brown announced Wednesday. Legislators and the governor’s office had been sparring over how the state’s cap-and-trade revenue, coming from its climate change law, would be spent in the next fiscal year.

The income level cap for clean vehicle rebates was changed as part of the legislature’s commitment to assist disadvantaged communities. It was also driven by complaints that rebates were being given to wealthy Californians to buy high-end models like the Tesla Model S. The new cap for the vehicle rebate program is $300,000 on joint filers and $150,000 on single filers, and it will become effective on Nov. 1, 2016, according to the state’s Department of Finance. The previous cap had been at $500,000 for joint filers and $250,000 for single filers.

“California’s combatting climate change on all fronts and this plan gets us the most bang for the buck,” Gov. Jerry Brown said in a statement. “It directs hundreds of millions where it’s needed most – to help disadvantaged communities, curb dangerous super pollutants and cut petroleum use – while saving some for the future.”

Along with the $130 million for the clean vehicle rebate program, $150 million will be available in rebates for heavy-duty vehicles and off-road equipment investments, according to The Sacramento Bee.

SEE ALSO: California Raises Green Car Rebates For Low-Income Buyers, Cuts Off Top Earners

The clean vehicle rebate program had run out of funding earlier this year, with thousands of consumers put on waiting lists for plug-in electrified vehicle (PEV) rebates. Details on the clean vehicle rebate will be released later. The San Francisco Chronicle reported that there will be a $5,000 rebate for a hydrogen fuel cell vehicle and $900 for a zero-emission motorcycle. Under the current clean vehicle rebate project, administered by the California Air Resource Board, all-electric vehicles are eligible for $2,500 rebates and plug-in hybrid electric vehicles qualify for $1,500 rebates.

The Chronicle also reported that the deal includes $80 million in rebates for vehicle owners to turn in high-emission vehicles that can’t pass a smog check. Rebates will be available to them for their next vehicle purchase ranging from $5,500 to $9,500, depending on the consumer’s income.  Higher-level rebates will be offered as an incentive to turn in a high-emission vehicle and then go out and buy a low-emission replacement vehicle.

Revenue from quarterly cap-and-trade auctions have been a growing source of state tax revenue, and a source of political infighting between legislators, the governor’s office, the oil industry, electric utilities, environmentalists, and automakers. It comes from the 2006 climate change law that was extended from 2020 to 2030 last week in the state legislature, with a higher carbon reduction level starting after 2020.

Most of the cap-and-trade revenue, about 60 percent, is already promised to high-speed rail, affordable housing, public transit, and other programs, according to the Chronicle. The remaining 40 percent is what lawmakers and the governor’s office have been sparring over in the past few months.

San Francisco Chronicle