California Bill Could Cap Clean-Vehicle Rebates Based On Income

Since 2009, California gave a $2,500 tax rebate on zero-emissions vehicles like the Tesla Model S and Prius plug-in hybrid. And here's something that should surprise no one: The majority of those rebates went to households earning $100,000 or more. Now that could change.

A bill sponsored by California Senator Kevin de León (D-Los Angeles) attempts to address the fact that nearly 80 percent of those rebates went to households bringing in more than $100k and that almost half of Tesla Model S owners receiving a rebate are making at least $300,000.

"A $2,500 rebate to purchase an electric vehicle is not likely to matter to someone earning over $300,000 a year, but it does make a big difference to someone earning $60k a year," said de León. "Every community deserves clean air, regardless of wealth."

The bill sets out a more complex scheme for rebates, with the L.A. Times reporting that a family of four with an annual income of $53,000 could use state incentives to purchase a cleaner vehicle, along with getting $1,500 for putting an older vehicle out to pasture while still getting the $2,500 for an electric car. Low income families could get a $3,000 break for purchasing a clean air vehicle or get rid of their old car and get the same amount to pay for a public transit pass or car-sharing membership. And if they live in a neighborhood with particularly poor air quality, the incentives could increase.

The other reason for the great rectifying of the rebate issue is cash. The program is running out of it. On April 1, the California Air Resources Board started a waiting list for rebates and when the new state budget passed, CARB was allocated another $30 million for the incentives. With that $30 million, California will have paid out over $170 million in incentives with around 70,000 clean vehicles on the road.

The bill, SB 1275, has already passed the Senate and will head to the State Assembly's appropriations committee before landing on Gov. Jerry Brown's desk at the end of the month.