California Air Resources Board

Summary 

Would have required CARB, if CARB requires a fleet owner to acquire zero-emission vehicles (ZEVs) as part of its fleet, to authorize the rental of a ZEV or vehicles for a cumulative total of 260 days in a calendar year to be deemed ownership of one ZEV for purposes of meeting that obligation. This provision would have resulted in the exemption of any vehicles rented less than 260 days as not a part of the “owned fleet,” thereby reducing the fleet’s compliance obligation under CARB’s Advanced Clean Fleets (ACF) Regulation.  

View full bill text here 

Governor’s Veto Message 

To the Members of the California State Assembly:  

I am returning Assembly Bill 637 without my signature.  

This bill would require the California Air Resources Board (CARB) to authorize a fleet owner's rental of a zero-emission vehicle (ZEV) for a cumulative total of 260 days per year to be considered ownership of one ZEV for the purpose of complying with the Advanced Clean Fleets (ACF) regulation.  

In 2020, I issued Executive Order (EO) N-79-20, which directed CARB, among other things, to develop strategies to transition in-state sales of new passenger vehicles and trucks to 100 percent zero-emission by 2035, where feasible. Pursuant to this EO, CARB developed the ACF to accelerate transportation sector emission reductions while providing safe, feasible, and flexible compliance options for affected fleet owners that have over 50 vehicles or over $50 million in gross annual revenue.  

This bill would allow rental vehicle companies to circumvent the ACF regulations, and the flexible and balanced compliance mechanisms CARB has already created, with a new and unclear compliance mechanism. I am concerned this will jeopardize our clean air goals at a time when the state awaits action on its Clean Air Act waiver by the United States Environmental Protection Agency.  

With that, I encourage the rental vehicle companies to work toward meeting the ACF regulations, and if there are insurmountable challenges, to work with CARB to explore practical and alternative compliance pathways through the existing regulatory process.  

For these reasons, I cannot sign this bill.  

Sincerely,  

Gavin Newsom 

View Governor’s veto message here