The new CARB ACF legislation passed April 2023 will fundamentally shift equipment replacement strategy going forward for state, local and federal government entities across California. The availability and affordability of Zero Emission Vehicles (ZEVs) to replace aging fleets is uncertain. Some ZEVs are double the cost of their traditional counterparts, not including the cost of the necessary charging infrastructure. While there are federal, state and local financial assistance options for purchasing ZEVs that can partially offset the higher cost of the vehicles, we expect that local government will see higher vehicle replacement costs going forward.

In the latest NHAlert, learn how the CARB ACF legislation will impact local government in the near future and how NHA can assist public agencies with fleet replacement planning, financing and implementation.

Questions? Contact: Christian Sprunger, Assistant Vice President | | (415) 785-2025 x 2007


In April 2023, the California Air Resources Board (“CARB”) approved Advanced Clean Fleets (“ACF”) regulations to accelerate a transition to zero emissions for medium-duty and heavy-duty vehicles. At its core, CARB’s ACF regulation formalizes a transition timeline to zero emissions vehicles (“ZEV”) for state, local and federal government entities across California.

ACF applies to medium-duty and heavy-duty on-road vehicles (GVWR >8,500 lbs.), off-road yard tractors, and light-duty mail and package delivery vehicles. Local government will begin to see the impact in 2024 for new vehicle purchases. Vehicle purchases made prior to 2024 are exempt from the ACF regulation.

Impact of ACF on Existing Fleet Vehicles

State and local governments will not be required to stop using existing compliant vehicles. Useful lives of current fleet will continue to be governed by Senate Bill 1. The ACF’s local government fleets requirements include an exemption for situations where a ZEV is not available with the needed specifications, though CARB identifies that there are already about 150 existing medium-duty and heavy-duty ZEV trucks commercially available in the US.

Financial Assistance for Purchasing ZEVs

Due to the emerging nature of the technology, ZEV can have significantly higher costs than comparable internal combustion engine vehicles (double in some cases). In addition to a higher cost, ZEVs will require EV infrastructure for charging and maintenance. CARB has implemented the Clean Vehicle Rebate Project (“CVRP”) and the Hybrid and Zero-Emission Truck and Bus Voucher Incentive Program (“HVIP”). Additionally, purchases of qualified commercial clean vehicles may be eligible for a refundable credit under the Inflation Reduction Act (“IRA”) of 2022, Section 45W.

Select State and Federal Financial Assistance Options

IRA Section 45W Direct Pay Credit

Section 45W credits began in January 2023 and expire for vehicles acquired after December 31, 2032. Requires purchase from qualified manufacturer and be powered by an electric motor. Maximum credit is $7,500 per vehicle if under 14,000 lbs. GVWR; $40,000 per vehicle if over 14,000 lbs. GVWR. Actual credit is calculated as lesser of 15% of vehicle cost (30% if no internal combustion engine) or incremental cost of electric vehicle vs non-electric.

Clean Vehicle Rebate Project (CVRP)

CVRP offers rebates ranging from $1,000 to $7,000 for purchase or lease of new, eligible zero-emission vehicles, including electric, plug-in hybrid, and fuel cell vehicles. Vehicles must be new, on list of eligible vehicles, and have a base MSRP under $60,000 for larger vehicles ($45,000 for cars). Must submit a CVRP application within 3 months of vehicle purchase or lease date. Application requires proof of registration and executed vehicle purchase agreement.

California HVIP Voucher Program

Point of sale discounts offered through HVIP dealers. This program was launched by CARB in 2009 and runs on a first-come, first-served basis. Purchase must be made from an approved dealer and significant discounts may be available (range of $20,000 to $240,000 in savings possible).

Regulatory Disclosures

NHA Advisors is a registered municipal advisor.

Legal Events and Disciplinary History

NHA Advisors does not have any legal events and disciplinary history on its Form MA and Form MA-I, which includes information about any criminal actions, regulatory actions, investigations, terminations, judgments, liens, civil judicial actions, customer complaints, arbitrations and civil litigation. The Client may electronically access NHA Advisors’ most recent Form MA and each most recent Form MA-I filed with the Commission at the following website:

There have been no material changes to a legal or disciplinary event disclosure on any Form MA or Form MA-I filed with the SEC.

Conflicts of Interest and Other Matters Requiring Disclosures

As of the date of publication, there are no actual or potential material conflicts of interest, other than those potential conflicts noted below, that NHA Advisors is aware of that might impair its ability to render unbiased and competent advice or to fulfill its fiduciary duty. If NHA Advisors becomes aware of any material potential conflict of interest that arises after this disclosure, NHA Advisors will disclose the detailed information in writing to the Client in a timely manner.

Pursuant to MSRB Rule G-42, on Duties of Non-Solicitor Municipal Advisors, Municipal Advisors are required to make certain written disclosures to clients which include, amongst other things, Conflicts of Interest and any Legal or Disciplinary events of NHA Advisors and its associated persons.

The following are potential conflicts of interest to be considered.

  • NHA Advisors represents that in connection with the issuance of municipal securities, NHA Advisors may receive compensation from the Client for services rendered, which compensation is contingent upon the successful closing of a transaction and/or is based on the size of a transaction. Consistent with the requirements of MSRB Rule G-42, NHA Advisors hereby discloses that such contingent and/or transactional compensation may present a potential conflict of interest regarding NHA Advisors’ ability to provide unbiased advice to enter into such transaction. The contingent fee arrangement creates an incentive for NHA Advisors to recommend unnecessary financings or financings that are disadvantageous to the Client, or to advise the Client to increase the size of the issue. This potential conflict of interest will not impair NHA Advisors’ ability to render unbiased and competent advice or to fulfill its fiduciary duty to the Client.
  • NHA Advisors’ fees under a potential agreement may be based on hourly fees of NHA Advisors’ personnel, with the aggregate amount equaling the number of hours worked by such personnel times an agreed-upon hourly billing rate. This form of compensation presents a potential conflict of interest because it could create an incentive for NHA Advisors to recommend alternatives that would result in more hours worked. This conflict of interest will not impair NHA Advisors’ ability to render unbiased and competent advice or to fulfill its fiduciary duty to the Client.
  • NHA Advisors’ fees under a potential agreement may be a fixed amount established at the outset of a potential agreement. The amount is usually based upon an analysis by the Client and NHA Advisors of, among other things, the expected duration and complexity of the transaction and the scope of services to be performed by NHA Advisors. This form of compensation presents a potential conflict of interest because, if the transaction requires more work than originally contemplated, NHA Advisors may suffer a loss. Thus, NHA Advisors may recommend less time-consuming alternatives, or fail to do a thorough analysis of alternatives. This conflict of interest will not impair NHA Advisors’ ability to render unbiased and competent advice or to fulfill its fiduciary duty to the Client.
  • The fee paid to NHA Advisors increases the cost of investment to the Client. The increased cost occurs from compensating NHA Advisors for municipal advisory services provided.
  • NHA Advisors serves a wide variety of other clients that may, from time to time, have interests that could have a direct or indirect impact on the interests of another NHA Advisors client. For example, NHA Advisors serves as municipal advisor to other municipal advisory clients and, in such cases, owes a regulatory duty to such other clients just as it does to the Client. These other clients may, from time to time and depending on the specific circumstances, have competing interests. In acting in the interests of its various clients, NHA Advisors could potentially face a conflict of interest arising from these competing client interests. NHA Advisors fulfills its regulatory duty and mitigates such conflicts through dealing honestly and with the utmost good faith with the Client.
  • Gerald Craig Hill, the Managing Principal of NHA Advisors is currently serving as an outside director for the HdL Companies based in Diamond Bar, CA. HdL Companies is a software and professional services consulting company providing revenue data and collections information to local governments, potentially including NHA Advisors’ clients. HdL Companies have affiliates including, but not limited to, HdL Coren & Cone. From time to time, NHA Advisors utilizes the services of HdL Coren & Cone for its clients. NHA Advisors is mindful of this conflict of interest and fulfills its regulatory duty and mitigates such conflicts through dealing honestly and with the utmost good faith when this situation arises.
  • NHA Advisors does not have any affiliate that provides any advice, service, or product to or on behalf of the Client that is directly or indirectly related to the municipal advisory activities to be performed by NHA Advisors.
  • NHA Advisors has not made any payments directly or indirectly to obtain or retain NHA Advisors’ municipal advisory business.
  • NHA Advisors has not received any payments from third parties to enlist NHA Advisors’ recommendation to the Client of its services, any municipal securities transaction, or any municipal finance product.
  • NHA Advisors has not engaged in any fee-splitting arrangements involving NHA Advisors and any provider of investments or services to the Client.
  • NHA Advisors does not have any legal or disciplinary event that is material to the Client’s evaluation of the municipal advisory or the integrity of its management or advisory personnel.
  • NHA Advisors does not act as principal in any of the transaction(s) related to a potential agreement.