Oregon Department of Environmental Quality

January 24 & 25, 2019

Oregon Environmental Quality Commission Meeting

Agency Staff Report

Rulemaking Action Item NO. XX

Zero-Emission and Electric Vehicle Rebates - 2019

Table of Contents

Accessibility Information  2

DEQ Recommendation to the EQC  2

Overview  2

Statement of Need  4

Rules Affected, Authorities, Supporting Documents  4

Fee Analysis  6

Statement of Fiscal and Economic Impact  7

Federal Relationship  10

Land Use  10

EQC Prior Involvement  11

Advisory Committee  12

Public Engagement  12

Public Hearing  13

Summary of Public Comments and DEQ Responses  13

Five-year review – Leave Blank – Will be Completed by Agency Rules Coordinator  19

Draft Rules – With Edits Highlighted  21

Draft Rules – With Edits Included  22

Supporting Documents  23

You may review copies of all documents referenced in this announcement at:

Oregon Department of Environmental Quality

700 NE Multnomah St., Ste. 600

Portland, OR, 97232

To schedule a review of all websites and documents referenced in this announcement, call Rachel Sakata, DEQ – Headquarters, 503-229-5659 (800-452-4011, ext. 5622 toll-free in Oregon).

Please notify DEQ of any special physical or language accommodations or if you need information in large print, Braille or another format. To make these arrangements, contact DEQ, Portland, at 503-229-5696 or call toll-free in Oregon at 1-800-452-4011, ext. 5696; fax to 503-229-6762; or email to deqinfo@deq.state.or.us . Hearing impaired persons may call 711.

DEQ recommends that the Environmental Quality Commission adopt the proposed rules in Attachment A as part of Chapter 340 of the Oregon Administrative Rules.

Short summary

DEQ recommends the EQC approve the proposed rule amendment to include three wheeled light duty zero emission vehicles and plug in hybrid electric vehicles in the Oregon Clean Vehicle Rebate Program (OCVRP).

In May 2018, The Environmental Quality Commission (EQC) adopted rules to implement a zero-emission vehicle rebate program in Oregon. The program contains two elements – one element provides rebates for the purchase or lease of eligible new zero-emission vehicles (referred to as standard rebates) if all program requirements are met. The second element, called the Charge Ahead rebate, provides rebates for the purchase or lease of new or used zero-emission vehicles if the purchaser is from a low or moderate-income household.  

DEQ is proposing to amend the zero-emission vehicle rebate program by changing the definitions in OAR 340-270-0030 for rebate-eligible light duty zero emission vehicles and plug in hybrid electric vehicles to include vehicles with at least three wheels. Currently light duty zero emission vehicles and plug in hybrid electric vehicles are defined as vehicles with at least four wheels. The proposed change would broaden the range of eligible vehicles to include those with three wheels.

Brief history

On August 18, 2017, Oregon Governor Kate Brown signed House Bill 2017 which, in addition to making many other transportation investments, created a program to provide rebates to Oregonians who meet all program requirements and purchase certain types of zero-emission vehicles, including eligible plug-in hybrid zero-emission vehicles, and other eligible zero-emissions vehicles. This program was designed by the Oregon Legislature to encourage higher adoption of zero-emission vehicles to reduce air pollution and progress the state towards its greenhouse gas reduction goals.

In May 2018, The Environmental Quality Commission (EQC) adopted rules to implement a zero-emission vehicle rebate program in Oregon. These rules as adopted defined rebate-eligible light duty zero emission vehicles and plug in hybrid electric vehicles as vehicles with at least four wheels. This language inadvertently prevents participants from applying for rebates for three wheeled zero-emission vehicles. DEQ is proposing to change the definition of rebate-eligible light duty zero emission vehicles and plug in hybrid electric vehicles as those with at least three wheels to make the OCVRP more inclusive of all eligible vehicle types, expand options for businesses and consumers, and ensure equitable application of the OCVRP to all eligible vehicles. This change is also consistent with House Bill 2017, which does not specify the number of wheels in the definitions of light duty zero emission vehicles and plug in hybrid electric vehicles.

Regulated parties

DEQ is preparing to implement the program established by the May 2018 rules. There are no other regulated parties, because the proposed rules do not impose any requirements on parties who do not wish to participate in the program. Other parties who choose to participate in the program may include:

•  Automobile dealers that sell or lease new and or used zero-emission vehicles. Such dealers may be affected by the rules if they choose to apply the rebate to the purchase at the point of sale, by allowing purchasers to assign their rebates to the dealers or by otherwise assisting purchasers in obtaining rebates. Further, dealers could be affected by increased zero-emission vehicle sales.

•  Automobile manufacturers, such as those that manufacture zero-emission vehicles eligible for rebates. Manufacturers may be affected by the rules if they allowed purchasers to assign their rebates or otherwise assist purchasers in obtaining rebates. Further, dealers could be affected by increased zero-emission vehicle sales.

•  Zero-emission vehicle purchasers such as Oregon residents who purchase or lease zero-emission vehicles that qualify for rebates under the program.

Request for other options

During the public comment period, DEQ requested public comment on whether to consider other options for including three wheeled vehicles in the Zero-Emission and Electric Vehicle Rebate program.

What need would the proposed rule address?

The proposed rule would address the need for a definition of rebate-eligible light duty zero emission vehicles and plug in hybrid electric vehicles that include three wheeled vehicles.

How would the proposed rule address the need?

The proposed rule would change the definition of rebate-eligible light duty zero emission vehicles and plug in hybrid electric vehicles from those with “at least four wheels” to those with “at least three wheels”. This will make the OCVRP more inclusive of all eligible vehicle types, expand options for businesses and consumers, and ensure equitable application of the OCVRP to all eligible vehicles. This change is also consistent with House Bill 2017, which does not specify the number of wheels in the definitions of light duty zero emission vehicles and plug in hybrid electric vehicles.

How will DEQ know the rule addressed the need?

DEQ will know the need has been addressed when applicants are able to apply for a rebate for three wheeled vehicles.

Lead division

Air Quality Division

Program or activity

Air Quality Planning

Chapter 340 action

House Bill 2017 (2017)

Documents relied on for rulemaking  

Fee Analysis

This rulemaking does not involve fees.

Fiscal and Economic Impact

In May 2018, The Environmental Quality Commission (EQC) adopted rules to implement a zero-emission vehicle rebate program in Oregon. The program, contains two elements – one element provides rebates for the purchase or lease of eligible new zero-emission vehicles (referred to as standard rebates) if all program requirements are met. The second element, called the Charge Ahead rebate, provides rebates for the purchase or lease of new or used zero-emission vehicles if the purchaser is from a low or moderate-income household.  

DEQ is proposing to amend the zero-emission vehicle rebate program by changing the definitions in OAR 340-270-0030 for rebate-eligible light duty zero emission vehicles and plug in hybrid electric vehicles to include vehicles with at least three wheels. Currently light duty zero emission vehicles and plug in hybrid electric vehicles are defined as vehicles with at least four wheels. The proposed change would broaden the range of eligible vehicles to include those with three wheels.

DEQ is unable to quantify the potential impact of the proposed rule change at this time because it is unknown how many three wheeled rebate eligible vehicles would be available for use by consumers seeking to participate in the OCVRP, and it is also unknown how many applications DEQ could receive for these vehicles. Because three wheeled light duty zero emission vehicles and plug in hybrid electric vehicles are not currently widely available, DEQ expects that the number of rebate applications for these type of vehicles would be low, amounting to a minimal fiscal impact. There could be a positive fiscal impact on large and small businesses potentially selling three wheeled vehicles from rebate incentives, and a positive fiscal impact on the public from expanded consumer options for low cost rebate eligible vehicles.

Statement of Cost of Compliance  

State agencies  

DEQ does not expect the proposed rule change to have a fiscal impact on state agencies. It would not significantly affect DEQ implementation of the OCVRP.

Local governments

DEQ does not expect the proposed rule change to have a fiscal impact on local governments.

Public

The public would not incur any mandatory compliance costs as a result of the proposed rule changes because the proposed rules do not impose any requirements on parties who do not wish to participate in the program. Allowing rebates for eligible three wheeled vehicles may have a positive fiscal impact on consumers choosing to participate in the OCVRP. Inclusion of three wheeled vehicles could increase the range of choices, and could provide additional opportunities for people to buy lower cost vehicles and receive the same level of rebates they could receive for more costly four wheeled vehicles eligible for the program. Members of the public would be eligible to receive standard rebates of $2,500 for the purchase or lease of new three wheeled zero-emission vehicles. Under the Charge Ahead program, qualified low and moderate-income applicants purchasing new zero-emission three wheeled vehicles could realize an additional benefits by combining the $2,500 standard rebate with the $2,500 Charge Ahead rebate for a total of $5,000.

Large businesses - businesses with more than 50 employees

Large businesses would not incur any mandatory compliance costs as a result of the proposed rules because the proposed rules do not impose any requirements on parties who do not wish to participate in the program. DEQ has identified there are at least 20 large manufacturers of zero-emission vehicles and a number of large auto dealers who could participate in the program through the assignment of rebates, and up to 29 large manufacturers and some large auto dealers who would not participate because they do not manufacture or sell zero-emission vehicles. DEQ lacks data on the number of large manufacturers of three wheeled zero-emission vehicles. However any of the large auto dealers could potentially participate in the program through assignment of rebates for three wheeled vehicles.

There could be a positive impact on large businesses manufacturing, selling or leasing three wheeled rebate eligible vehicles, as EV rebates could provide an incentive that would increase sales in Oregon.

Large business automobile dealers that sell or lease new and or used zero-emission vehicles may be affected by the rule changes if they choose to apply the rebate to the purchase at the point of sale, by allowing purchasers to assign their rebates to the dealers or by otherwise assisting purchasers in obtaining rebates. Further, dealers could be affected by increased zero-emission three wheeled vehicle sales.

Large business automobile manufacturers, such as those that manufacture zero-emission vehicles eligible for rebates may be affected by the rule changes if they allowed purchasers to assign their rebates or otherwise assist purchasers in obtaining rebates. Further, dealers could be affected by increased zero-emission three wheeled vehicle sales.

Small businesses – businesses with 50 or fewer employees

Small businesses would not incur any mandatory compliance costs as a result of the proposed rules because the proposed rules do not impose any requirements on parties who do not wish to participate in the program. The proposed rule could potentially offer additional incentives for sales of three wheeled vehicles that could positively impact small businesses. There could be a positive impact on small businesses manufacturing, selling or leasing three wheeled rebate eligible vehicles, as EV rebates could provide an incentive that would increase sales in Oregon.

Small business automobile dealers that sell or lease new and or used zero-emission vehicles may be affected by the rule changes if they choose to apply the rebate to the purchase at the point of sale, by allowing purchasers to assign their rebates to the dealers or by otherwise assisting purchasers in obtaining rebates.

Small business automobile manufacturers, such as those that manufacture zero-emission vehicles eligible for rebates may be affected by the rule changes if they allowed purchasers to assign their rebates or otherwise assist purchasers in obtaining rebates.

a. Estimated number of small businesses and types of businesses and industries with small businesses subject to proposed rule.

DEQ originally identified up to 245 small business automobile dealers (both new and used) that could participate in the OCVRP. However, participation in assignment of rebates is entirely optional to any automobile dealer, and any associated costs might be offset by the increased number of sales these small businesses would experience in zero-emission vehicles. Any of the small business automobile dealers could potentially participate in assignment of rebates for three wheeled vehicles. DEQ is aware of one Oregon-based business planning to market three wheeled vehicles that could potentially qualify for EV rebates.

b. Projected reporting, recordkeeping and other administrative activities, including costs of professional services, required for small businesses to comply with the proposed rule.

No additional activities are required to comply with the proposed rules.

c. Projected equipment, supplies, labor and increased administration required for small businesses to comply with the proposed rule.

No additional activities are required to comply with the proposed rules.

d. Describe how DEQ involved small businesses in developing this proposed rule.

DEQ did not involve small businesses in developing this proposal because it is a minor rule revision that does not impose any regulatory requirements, and could potentially provide positive fiscal impacts.

Documents relied on for fiscal and economic impact

Advisory committee fiscal review

DEQ did not appoint an advisory committee in developing this proposal because it is a minor rule revision that does not impose any regulatory requirements, and could potentially provide positive fiscal impacts.

Housing cost

As ORS 183.534 requires, DEQ evaluated whether the proposed rules would have an effect on the development cost of a 6,000-square-foot parcel and construction of a 1,200-square-foot detached, single-family dwelling on that parcel. DEQ determined the proposed rules would have no effect on the development costs because they only affect purchasers of zero-emission vehicles, auto dealers and manufacturers who sell or produce zero-emission vehicles.

Relationship to federal requirements

ORS 183.332 and OAR 340-011-0029 require DEQ to attempt to adopt rules that correspond with existing equivalent federal laws and rules unless there are reasons not to do so.

The proposed rules are in addition to federal requirements since there are no federal regulations regarding rebates for the purchase or lease of zero-emission vehicle, or federal regulations regarding inclusion of three wheeled vehicles in rebate programs. The proposed rules protect the environment by reducing greenhouse gases.

What alternatives did DEQ consider if any?

DEQ considered not amending the OCVRP rules in include three wheeled vehicles, but decided to propose including them to make the OCVRP more inclusive of all eligible vehicle types, expand options for businesses and consumers, and ensure equitable application of the OCVRP to all eligible vehicles. This change is also consistent with House Bill 2017, which does not specify the number of wheels in the definitions of light duty zero emission vehicles and plug in hybrid electric vehicles.

Land-use considerations

In adopting new or amended rules, ORS 197.180 and OAR 340-018-0070 require DEQ to determine whether the proposed rules significantly affect land use. If so, DEQ must explain how the proposed rules comply with state-wide land-use planning goals and local acknowledged comprehensive plans.

Under OAR 660-030-0005(2) and OAR 340 Division 18, DEQ considers that rules affect land use if:

•  The statewide land use planning goals specifically refer to the rule or program, or

•  The rule or program is reasonably expected to have significant effects on:

◦  Resources, objectives or areas identified in the statewide planning goals, or

◦  Present or future land uses identified in acknowledged comprehensive plans

To determine whether the proposed rules involve programs or actions that affect land use, DEQ reviewed its Statewide Agency Coordination plan, which describes the DEQ programs that have been determined to significantly affect land use. DEQ considers that its programs specifically relate to the following statewide goals:

Statewide goals also specifically reference the following DEQ programs:

•  Nonpoint source discharge water quality program – Goal 16

•  Water quality and sewage disposal systems – Goal 16

•  Water quality permits and oil spill regulations – Goal 19

De

Determination

DEQ determined that these proposed rules do not affect land use under OAR 340-018-0030, OAR 660-030-0005(2), or DEQ’s State Agency Coordination Program.

DEQ did not present additional information specific to this proposed rule revision.

Background

DEQ did not convene an advisory committee in developing this proposal because it is a minor rule revision that does not impose any regulatory requirements and is consistent with House Bill 2017, which does not specify the number of wheels in the definitions of light duty zero emission vehicles and plug in hybrid electric vehicles.

Public notice

DEQ provided notice of the proposed rulemaking and rulemaking hearing on Nov. 1, 2018 by:

•  On Oct. 31, 2018 filing notice with the Oregon Secretary of State for publication in the November 2018 Oregon Bulletin;

•  Notifying the EPA by mail;

•  Posting the Notice, Invitation to Comment and Draft Rules on the web page for this rulemaking, located at: Electric Vehicle Rebate 2019;

•  Emailing approximately 11,402 interested parties on the following DEQ lists through GovDelivery:

•  Rulemaking

•  Oregon Clean Vehicle Rebate Program

•  Low Emission/Zero Emission Vehicle Program

•  Electric Vehicle Rebate 2018 Rulemaking

•  DEQ Public Notices

•  Emailing the following key legislators required under ORS 183.335:

•  Senator Lee Beyer, Co-Chair, Joint Committee on Transportation Preservation and Modernization

•  Representative Caddy McKeown, Co-Chair, Joint Committee on Transportation Preservation and Modernization

•  Senator Brian Boquist, Co-Vice Chair, Joint Committee on Transportation Preservation and Modernization

•  Representative Andy Olson, Co-Vice Chair, Joint Committee on Transportation Preservation and Modernization

•  Emailing advisory committee members,

•  Postings on Twitter and Facebook

•  Posting on the DEQ event calendar: DEQ Calendar

DEQ held public hearing. DEQ received one comment at the hearing. Later sections of this document include a summary of the XX comments received during the open public comment period, DEQ’s responses, and a list of the commenters. Original comments are on file with DEQ.

Presiding Officers’ Record

Hearing 1

The presiding officer convened the hearing, summarized procedures for the hearing, and explained that DEQ was recording the hearing. The presiding officer asked people who wanted to present verbal comments to sign the registration list, or if attending by phone, to indicate their intent to present comments. The presiding officer advised all attending parties interested in receiving future information about the rulemaking to sign up for GovDelivery email notices.

As Oregon Administrative Rule 137-001-0030 requires, the presiding officer summarized the content of the rulemaking notice.

One person attended the hearing in person and one person attended by teleconference or webinar. One person commented orally.

Public comment period

DEQ accepted public comment on the proposed rulemaking from October 31, 2018 until 4:00 p.m. on November 27, 2018.

The following summaries represent the oral comment received at the public hearing, written comments that were received by the close of the public comment period, and DEQ’s response to the comments. Original comments are on file with DEQ. DEQ did not change the proposed rules in response to comments.

The following oral comment was presented at the November 20, 2018 public hearing:

Comment #1

Name: Jessie Fittipaldi

Organization: Arcimoto

The following are written comments submitted via the Electric Vehicle Rebate 2019 Comment Page:

Comment #2

Name: Bill Farmer

Organization: Farmers Table Grapes

Comment #3

Name: Chris Brown

Organization: Holey Joe Engrng

Comment #4

Name: David Moore

Comment #5

Name: Elizabeth Purta

Organization:

Comment #6

Name: Edward Hurtley

Comment #7

Name: Jacob Strandlien

Comment #8

Name: Thomas Jackman

Comment #9

Name: Chris Scruton

Organization: California Energy Commission

Comment #10

Name: Jon Miller

Organization: Arcimoto

Comment #11

Name: Dennis Iverson

Organization:

Comment #12

Name: Katalin Pusztavari

Comment #13

Name: Steven Ingham

Notification

The proposed rules would become effective upon filing on approximately DATE . DEQ would notify affected parties by:

Compliance and enforcement

•  Affected parties -Text

•  DEQ staff - Text

Measuring, sampling, monitoring and reporting

•  Affected parties - Text

•  DEQ staff - Text

Systems

•  Website - Text

•  Database - Text

•  Invoicing - Text

Training

•  Affected parties - Text

•  DEQ staff - Text

Five-year review – Leave Blank – Will be Completed by Agency Rules Coordinator ORS 183.405

Requirement  

Oregon law requires DEQ to review new rules within five years after EQC adopts them. The law also exempts some rules from review. DEQ determined whether the rules described in this report are subject to the five-year review. DEQ based its analysis on the law in effect when EQC adopted these rules.

Exemption from five-year rule review

DELETE THIS PARAGRAPH IF NO RULES ARE EXEMPT FROM REVIEW:

The Administrative Procedures Act exempts CHOOSE ONE: SOME … ALL of the proposed rules from the five-year review because the proposed rules would:

DELETE ANY THAT DON’T APPLY:

•   Amend or repeal an existing rule. ORS 183.405(4).

•   Implement a court order or a civil proceeding settlement. ORS 183.405(5)(a).

•   Adopt a federal law or rule by reference. ORS 183.405((5)(b).

•   Implement legislatively approved fee changes. ORS 183.405(5)(c).

•   Correct errors or omissions in the existing rules. ORS 183.405(d).

DELETE THIS PARAGRAPH IF ANY OF THE RULES ARE EXEMPT FROM REVIEW:

None of these proposed rules are exempt from the five-year review under ORS 183.405(4) and 183.405 (5) of the Administrative Procedures Act.

Five-year rule review required

No later than DATE FIVE YEARS FROM ADOPTION DEQ will review the newly adopted rules for which ORS 183.405 (1) requires review to determine whether:

•  The rule has had the intended effect

•  The anticipated fiscal impact of the rule was underestimated or overestimated

•  Subsequent changes in the law require that the rule be repealed or amended

•  There is continued need for the rule.

DEQ will use “available information” to comply with the review requirement allowed under ORS 183.405 (2).

DEQ will provide the five-year rule review report to the advisory committee to comply with ORS 183.405 (3)

Draft Rules – With Edits Highlighted LEAVE BLANK – AGENCY RULES COORDINATOR WILL ADD