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 businesses—especially those owned by
immigrants and entrepreneurs of color—throughout 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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