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Comment 313 for Advanced Clean Fleets Regulation (acf2022) - 45 Day.

First NameJoshua
Last NameMiller
Email Addressjmiller@aofund.org
AffiliationAccion Opportunity Fund
SubjectAdvanced Clean Fleets Regulation (ACF2022)
Comment

Accion Opportunity Fund appreciates the opportunity to provide public comment and express our concerns regarding the Proposed Advanced Clean Fleets Regulation (ACF).  Accion Opportunity Fund is a community development financial institution (CDFI) and the country’s leading nonprofit lender to small businesses. For over 25 years, we have worked to create an inclusive, healthy financial system that supports the nation’s small business owners by connecting underserved entrepreneurs to affordable capital, educational resources, coaching, and networks. Through innovative partnerships and outreach strategies, we reach entrepreneurs of color, low-income small business owners, and women entrepreneurs who often lack access to the financial services they need to build and grow their businesses. 

 

Although we finance small businesses across all sectors, not only does trucking make up much of our loan portfolio, but we have a long history of working specifically with small business owner-operators in California. In this calendar year alone, we have deployed approximately $40 million in capital to California truck drivers, with an average loan size of $100,000. Since inception, we have deployed over $360 million to more than 5,300 drivers in California to help finance the purchase of their medium and heavy-duty vehicles.  

We understand how critical it is to include trucking and the greater transportation industry in California’s plans towards a cleaner and safer environment. In 2010, when California’s emissions regulations required trucks serving the state’s ports be retrofitted with new filters or be taken out of service entirely and replaced, Accion Opportunity Fund stepped in to provide loans to drivers to retrofit their rigs or purchase new ones, enabling them to continue operating at the ports and maintain their income and livelihoods.

 

As a community-based lender, many of our drivers are of low to moderate income and identify as people of color and immigrants—communities that often struggle to gain access to affordable capital and are left on the unforgiving side of the racial wealth gap. Our borrowers have shared with us that becoming owner-operators has allowed them broader autonomy over their time and schedules, greater financial stability, and, ultimately, better quality of life for themselves and their families. Financial milestones that were previously out of reach, like paying off debt or putting a down payment for a home, become reality with a career as an owner-operator. 

 

Given our close relationship with truckers in the state and our first-hand knowledge of the industry, we believe the proposed ACF timeline will disadvantage small business owner-operators who move freight in California and beyond, with an even greater disparate impact on low-income truck drivers and drivers of color. 

 

Since 97.4% of all trucking companies are small businesses and operate 20 or less trucks, the rapid transition from fossil fuels to zero emissions will be a major hardship for these small businesses and the industry as a whole—causing greater barriers for entry and potentially forcing small trucking businesses out of the industry at a time when truckers are in short supply. Most of our trucking borrowers own less than ten trucks, with the majority owning one to three. These small businesses are often at a disadvantage, having to compete with larger, more resourced trucking companies within California and nationally for freight. 

 

We believe that the proposed timeline for zero-emissions equipment would double the cost of doing business for small business owner-operators at a pace that neither we nor our truck drivers and others can keep up with. First-time truck buyers are required to pay a 30-40% down payment on a truck loan. Most new owner-operators choose a used truck as their first purchase, because it is affordable with a price range of $80,000 to $140,000 for a heavy-duty vessel. Given that there is no used zero emissions market, new zero emission trucks could cost up to $400,000, leaving newly-minted owner-operators responsible for coming up with an astonishing $160,000. Additionally, they would face fierce competition among other buyers as full production of OEM zero emissions trucks has yet to ramp up due to battery, microchip, and other parts shortages. 

 

Beyond obtaining a loan and vehicle, most independent truckers will not be able to afford the higher costs and out-of-pocket expenses to own a zero-emissions truck. Maintenance for these vessels will be expensive and hard to obtain, given the new technology. Higher insurance premiums are expected. Truckers will even be challenged to find the charging infrastructure needed to power their equipment, especially since most work out of their homes and rent parking space for their trucks and cannot purchase and install their own charging stations.  

 

Until production meets expected demand and infrastructure is well-built out and prepared, considerations should be made to push back rather than speed up the timeline of these regulatory changes. Moving forward with the proposed schedule would adversely impact small trucking businessesespecially those owned by immigrants and entrepreneurs of colorthroughout the state. 

 

It should also be noted that while we support the zero-emissions trucking incentives provided by California and the recently passed Inflation Reduction Act, these programs simply do not offset the upfront costs—like down payment—to our borrowers and other small business owner-operators. The incentives would greatly benefit larger truckers and trucking companies with greater means while undermining the small businesses that can least afford the upfront costs. 

 

Accion Opportunity Fund supports efforts that address the harms of climate change and pollution. However, we believe this can be achieved with more flexibility within the ACF regulations and its timeline. We ask that the California Air Resources Board reconsider its timeline while reconfiguring the incentives associated with transitioning into zero emissions trucking. In doing so, we can ensure that California leads the green economy without causing undue harm to the livelihoods of the state's small business owner-operators, low-income drivers, and drivers of color.


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Date and Time Comment Was Submitted 2022-10-17 17:37:26

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