BILL ANALYSIS                                                                                                                                                                                                    

         AB 1493
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        AB 1493 (Pavley)
        As Amended June 28, 2002
        Majority vote
        |ASSEMBLY:  |     |(June 6, 2002)  |SENATE: |23-16|(June 29,      |
        |           |     |                |        |     |2002)          |
                  (vote not relevant)

         COMMITTEE VOTE  :  10-7               RECOMMENDATION  :  concur

        Original Committee Reference:    RULES  
        SUMMARY  :  Requires the Air Resources Board (ARB) to adopt  
        regulations to reduce the emissions of greenhouse gases by motor  
        vehicles.  Specifically,  this bill  :

        1)Makes legislative findings and declarations regarding global  
          warming, greenhouse gas emissions, and the contribution of the  
          transportation sector to these emissions in California.

        2)Requires the California Climate Action Registry (CCAR) to consult  
          with ARB in order to adopt procedures and protocols for the  
          reporting of reductions in greenhouse gases.

        3)Restricts public access to CCAR records that are exempt from  
          disclosure pursuant to the Public Records Act. 

        4)Requires ARB to develop and adopt, no later than January 1, 2005,  
          regulations that achieve the maximum feasible and cost-effective  
          reduction of greenhouse gases emitted by motor vehicles.

        5)Prohibits ARB regulations from going into effect before January  
          1, 2006, and provides that they may apply only to model-year 2009  
          or later motor vehicles.

        6)Requires ARB, within 10 days of adopting the regulations, to  
          transmit them to the appropriate policy and fiscal committees of  
          the Legislature for review.

        7)Requires the Legislature to hold at least one public hearing to  
          review the regulations, and allows the adoption of legislation to  
          modify them.


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        8)Requires ARB, in developing the regulations, to: 

        a)Consider their technological feasibility and economic impact;

        b)Conduct workshops in areas of the state with significant exposure  
          to air contaminants or with minority or low-income populations,  
          or both;

        c)Grant emission reduction credits for previous reductions in  
          greenhouse gas emissions from motor vehicles; and,

        d)Coordinate with the Energy Commission (CEC), CCAR, and the  
          interagency task force.

        1)Requires the regulations to provide flexibility in the means by  
          which compliance may be achieved.  Alternative methods of  
          compliance must achieve equivalent or greater reductions in  
          emissions but may not impose any mandatory trip reduction  
          measures or land use restrictions.

        2)Prohibits the regulations from including additional fees and  
          taxes on motor vehicles, fuels, or vehicle miles traveled, bans  
          on any specific vehicle category, reductions in vehicle weights,  
          speed limit reductions or limitations, or vehicle-miles-traveled  
          restrictions or limitations.

        3)Requires the regulations to provide an exemption for low-emission  
          vehicles meeting optional standards for oxides of nitrogen (NOx).

        4)Requires CCAR, by July 1, 2003, to adopt procedures for reporting  
          mobile source greenhouse gas emission reductions.

        5)Requires ARB to report to the Legislature and Governor by January  
          1, 2005, on the content of the regulations.

        6)Allows ARB to elect not to adopt a standard for any greenhouse  
          gas included in an equally or more effective standard adopted in  
          substantially the same timeframe by the federal government.

         The Senate amendments  delete, entirely, the prior provisions of  
        this bill, replacing them with the current language.  
         EXISTING LAW  assigns various duties to ARB in regard to setting and  
        enforcing clean air goals and standards.


         AB 1493
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         AS PASSED BY THE ASSEMBLY  , this bill was a spot bill dealing with  
        the Bureau of State Audits.

         FISCAL EFFECT  :  ARB staff estimates their costs to be $100,000 in  
        fiscal year (FY) 2002-03 for start-up activities and an additional  
        $100,000 per year through FY 2004-05 to develop regulations and  
        implement this bill.  CEC staff indicates there are no costs to CEC  
        to adopt procedures and protocols for the reporting and  
        certification of reductions in greenhouse gas emissions from mobile  
        sources as these duties are consistent with CEC's mandate as set  
        out in SB 1771 (Sher), Chapter 1018, Statutes of 2000.  ARB staff  
        indicates they intend to fold the emission reduction regulations  
        into the next round of passenger vehicle emission regulations that  
        are expected to come before their governing board in FY 2004-05.   
        Public hearings, workshops, consultations with auto manufacturers  
        and other stakeholders would be expanded to include greenhouse  
        gases along with other emission reduction strategies. 

         COMMENTS  :  This bill is essentially a reintroduction, with some  
        modifications, of AB 1058 (Pavley), which is currently pending  
        concurrence in Senate amendments.

        This bill's sponsor, Bluewater Network, references a report from  
        the United Nations Intergovernmental Panel of Climate Change  
        predicting an increase of up to 10.4 degrees in the Earth's  
        temperature over the next century and indicating that the past  
        decade was the warmest on record in the last 140 years.  The  
        sponsor further notes that California is home to 0.5% of the  
        world's population, yet emits nearly 7% of global CO2 emissions.   
        This bill is intended to remove the ambiguity in the Clean Air Act,  
        which, according to the sponsor, is unclear on, whether ARB has the  
        authority to regulate CO2 emissions. 

        While the scientific community appears largely to accept that CO2  
        emissions are associated with increasing temperatures, global  
        warming theories continue to be the subject of some debate.   
        Nevertheless, it seems clear that warming of the magnitude quoted  
        from the United Nations report would be severely disruptive to  
        water supplies, agriculture, human health, coastlines, and entire  
        island nations.  And, according to most sources, automotive  
        emissions are a major contributor to CO2 levels in the atmosphere.

        Under former President Clinton, the United States (U.S.) was a  
        signatory to the 1997 "Kyoto Protocol to the United Nations  


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        Framework Convention on Climate Change."  This treaty would commit  
        the United States to a target of reducing greenhouse gases by 7%  
        below 1990 levels during a "commitment period" between 2008-2012.   
        The U.S. Senate, however, has not approved the treaty.  The Bush  
        administration, while acknowledging the likelihood of global  
        warming, is not supportive of the treaty either.  In the absence of  
        federal action on CO2 emissions, this bill would put California in  
        the forefront of efforts to address global warming issues. 

        Opponents contend that federal Corporate Average Fuel Economy  
        (CAFE) law and the Clean Air Act prohibit state action on CO2  
        regulation.  This contention is based on the theory that CO2  
        regulation is equivalent to fuel economy regulation, preempted by  
        CAFE, and that CO2 does not create localized pollution problems,  
        making it ineligible for state regulation.  (Proponents counter  
        that CO2 regulation need not entail fuel economy standards and that  
        other states have successfully enacted CO2 standards.)  Opponents  
        also point out that modern vehicles emit 97% less pollution than  
        their 1970 counterparts and that new vehicle pollution will be  
        reduced an additional 75% over the next seven years.  They would  
        prefer that consumers be encouraged to embrace advanced, and more  
        fuel-efficient, technologies through incentives rather than what  
        they characterize as "command-and-control" methods such as this  

        The bill's predecessor, AB 1058, attracted a great deal of public  
        attention.  Much of this attention centered around possible  
        measures, real or imagined, that the ARB might implement through  
        its regulations in order to reduce greenhouse gas emissions.  In  
        response to these concerns, this bill lays out a fairly extensive  
        list of actions that the ARB would be prohibited from enacting  
        through its regulations.  The prohibited actions would include:  
        motor vehicle tax surcharges, increased fuel taxes, vehicle miles  
        traveled (VMT) limits or fees, sport utility vehicle (SUV) or  
        minivan bans, vehicle weight reductions, or speed limit reductions.  

        Additionally, while AB 1058 had a one-year lag between the adoption  
        of regulations by the ARB and their implementation - presumably to  
        give the Legislature time to overturn them by statute if they were  
        deemed unreasonable, this bill explicitly requires the regulations  
        to be reviewed by the Legislature and allows modification of the  
        regulations by statute.  This approach, however, continues to make  
        the ARB regulations effective unless the Legislature takes  
        affirmative action to modify or overturn them.  In the absence of  


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        any specific action by the Legislature, the regulations would be  
        effective precisely as drafted, even if they have a significantly  
        detrimental effect on the automotive industry and the state's  
        economy.  A different approach, which the author and sponsors have  
        rejected, would make the regulations' effectiveness contingent upon  
        explicit approval by the Legislature.  Alternatively, the ARB could  
        be directed to draft recommended legislation, rather than  
        regulations, for possible enactment by the Legislature.  This  
        approach has been rejected as well.  Consequently, and for the  
        reasons cited above, the opponents of AB 1058 continue to oppose  
        this bill.

         Analysis Prepared by  :    Howard Posner / TRANS. / (916) 319-2093  
        FN: 0005796