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I am addressing you regarding this agenda item because AQIP funds
are the source of the CVRP rebates.  The CVRP Implementation Manual
has been mis-interpreted by the California Center for Sustainable
Energy (CCSE), which administers the CVRP for ARB, denying many
Californians the opportunity to participate in the CVRP and drive
electric vehicles.

In June, 2013 I applied for the CVRP $2500 rebate on my second
battery electric vehicle, a 2013 Nissan LEAF.  The CCSE denied my
application on the ground that a 36-month or longer lease term is
required. This is a mis-interpretation of ARB's duly adopted
regulations. My lease is for 24 months. Neither the CCSE nor ARB
have responded to my request for the source of the 36 month lease
term requirement.  

According to the materials on the CCSE website, the CVRP is
governed by the ARB Implementation Manual.  I have studied that
manual carefully.  While it clearly requires that rebate recipients
keep the car for at least 36 months, nowhere does it say that the
term of a lease must be at least 36 months.  The Manual does
contain provisions whereby ARB can access DMV records to check that
participants have not violated the 36-month requirement, regardless
of how they financed the car.  

Incidentally, a 2009 DRAFT of the Implementation Manual clearly did
require that lease terms be 36 months or longer.  That language
does not appear in any adopted version of the Manual, including the
newly-adopted Fiscal Year 2013-2014 version.

Like many people who lease cars, I am only using that 24-month
lease as a financing tool; the interest rate and the down payment
on that lease were the best deal available at the time due to a
special program offered by Nissan, making it the most economical
way to acquire the car.  

At the end of the 24 months I will either buy the car for the
predetermined price of $21,000 or extend the lease for another
year. This is a very common way to buy a car. For example, my
family just purchased from Toyota Lease Trust the 2010 Toyota Prius
that we had leased for the past 3 years, under the
right-to-purchase option of the lease.

A participant who finances a car with a loan is under no obligation
with the finance company to keep the car for any particular term. 
The borrower could sell or trade in the car, and pay off the loan,
at any time.  Similarly, a participant who buys the car outright
could easily sell the car before 36 months is up.

It therefore is neither fair nor legally correct to single out
lessees with the additional requirement that their lease term be 36
months or more.  One who leases a car for 36 months can still
terminate that lease early.  And one who leases for 24 months can
buy the car at the end or extend the lease.

I have given my promise that I will comply with the 36 month
requirement.  That is no different than the promise given by one
who borrows money or pays cash to obtain the car.  That promise is
what the Implementation Manual calls for.  ARB can reclaim the
rebate funds from participants who do not comply.

The $2500 rebate helps put electric cars within reach of persons
who might otherwise be discouraged by their high prices.  Over 36
months, it amounts to about $70 a month toward the lease or loan
payments. That money would make the lease payment over 36 months
much more affordable for my family, or we could use the $2500 as a
down payment on a conventionally-financed purchase at the end of
the 24 month lease.  Thus, in my case the $2500 would do exactly
what ARB intended: assist in making it financially viable for
participants to drive electric for at least 36 months.

I have done everything that is required under the Implementation
Manual and should qualify for the rebate.  If ARB wants to deny
CVRP funds to applicants whose leases are for 24 months, it should
say so in the Implementation Manual.  Under the current, adopted
version of the Manual, the length of the lease term is not a factor
in determining eligibility.