Governor Newsom Signs AB 784 by Assembly Speaker pro Tem Kevin Mullin

Thursday, October 10, 2019

State Sales Tax Exemption Will Advance Zero-Emission Bus Deployment

Sacramento –Governor Newsom has signed AB 784, exempting zero-emission transit buses from the state portion of the sales tax until January 1, 2024, in order to advance the deployment of Zero-Emission Buses (ZEBs) in California.

“California is one of the only states that charge public transit agencies sales tax,” Assemblymember Mullin pointed out. “In spite of that fact, many California transit agencies including SamTrans have begun to deploy ZEBs in an effort to reduce dangerous pollutants and emissions from the air. However, since ZEBs are considerably more expensive than their diesel-fueled alternatives, this temporary tax break will help these cash-strapped agencies make this transition more easily.” 

Diesel engines, found in almost half of the state’s bus population, emit a complex mixture of air pollutants that have been identified as top contributors to climate change and have the potential to cause cancer and premature death. In 2018, the California Air Resources Board (CARB) passed a regulation requiring the state’s public transit agencies to begin purchasing ZEBs as soon as 2023, with the goal of converting all fleets by 2040. This effort is expected to eliminate more than 7,000 tons of harmful diesel emissions, as well as 19 million tons of carbon dioxide from the atmosphere by 2050.  

“The Transit District is very excited about the passage of AB 784, which will directly help SamTrans’ plans to convert to a fully zero-emissions fleet by 2032,” said SamTrans CEO/GM Jim Hartnett. “In March 2018, our Board of Directors voted to replace 10 of our oldest diesel vehicles and replace them with new, electric battery powered buses. The first two are already in service and can be seen on any given day riding down El Camino Real and other communities in San Mateo County.”

Mr. Mullin also added, “By decreasing the state tax burden, not only will transit agencies be able to overcome upfront capital costs and incremental costs between technologies that currently impede the procurement of ZEBs, but they will also have the ability to meet CARB’s ZEB purchase mandate ahead of schedule, which reduces emissions sooner and benefits everyone.”