BILL NUMBER: AB 1507	AMENDED
	BILL TEXT

	AMENDED IN SENATE  JULY 15, 2010
	AMENDED IN SENATE  JUNE 21, 2010
	AMENDED IN SENATE  JUNE 7, 2010
	AMENDED IN SENATE  JUNE 25, 2009

INTRODUCED BY   Assembly Member Lieu

                        FEBRUARY 27, 2009

   An act to amend Section 44283 of, and to add Section 44287.2 to,
the Health and Safety Code, relating to air pollution.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1507, as amended, Lieu. Motor vehicle  greenhouse gas 
emission reduction projects.
   Existing law establishes the Carl Moyer Memorial Air Quality
Standards Attainment Program, which provides grants to offset the
incremental cost of projects that reduce covered emissions from
covered sources.
   This bill would require the State Air Resources Board, by July 1,
2011, to revise project guidelines  , for a project that reduces
greenhouse gas emissions,  to allow funds from specified
programs and funding sources to be used for a project also funded
under the Carl Moyer Memorial Air Quality Standards Attainment
Program without those additional public funds being factored into the
criteria emission reduction cost-effectiveness calculations under
that program.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 44283 of the Health and Safety Code, as amended
by Section 1 of Chapter 627 of the Statutes of 2006, is amended to
read:
   44283.  (a) Grants shall not be made for projects with a
cost-effectiveness, calculated in accordance with this section, of
more than thirteen thousand six hundred dollars ($13,600) per ton of
NOx reduced in California or a higher value that reflects state
consumer price index adjustments on or after January 1, 2006, as
determined by the state board. For projects obtaining reactive
organic gas and particulate matter reductions, the state board shall
determine appropriate adjustment factors to calculate a weighted
cost-effectiveness.
   (b) Only covered emission reductions occurring in this state shall
be included in the cost-effectiveness determination. The extent to
which emissions generated at sea contribute to air quality in
California nonattainment areas shall be incorporated into these
methodologies based on a reasonable assessment of currently available
information and modeling assumptions.
   (c) The state board shall develop protocols for calculating the
surplus covered emission reductions in California from representative
project types over the life of the project.
   (d) The cost of the covered emission reduction is the amount of
the grant from the program, including matching funds provided
pursuant to subdivision (e) of Section 44287, plus any other state
funds, or funds under the district's budget authority or fiduciary
control, provided toward the project, not including funds described
in paragraphs (1) and (2) of subdivision (a) of Section 44287.2. The
state board shall establish reasonable methodologies for evaluating
project cost-effectiveness, consistent with the definition contained
in paragraph (4) of subdivision (a) of Section 44275, and with
accepted methods, taking into account a fair and reasonable discount
rate or time value of public funds.
   (e) A grant shall not be made that, net of taxes, provides the
applicant with funds in excess of the incremental cost of the
project. Incremental lease costs may be capitalized according to
guidelines adopted by the state board so that these incremental costs
may be offset by a one-time grant award.
   (f) Funds under a district's budget authority or fiduciary control
may be used to pay for the incremental cost of liquid or gaseous
fuel, other than standard gasoline or diesel, which is integral to a
covered emission reducing technology that is part of a project
receiving grant funding under the program. The fuel shall be approved
for sale by the state board. The incremental fuel cost over the
expected lifetime of the vehicle may be offset by the district if the
project as a whole, including the incremental fuel cost, meets all
of the requirements of this chapter, including the maximum allowed
cost-effectiveness. The state board shall develop an appropriate
methodology for converting incremental fuel costs over the vehicle
lifetime into an initial cost for the purposes of determining project
cost-effectiveness. Incremental fuel costs shall not be included in
project costs for fuels dispensed from any facility that was funded,
in whole or in part, from the fund.
   (g) For purposes of determining any grant amount pursuant to this
chapter, the incremental cost of any new purchase, retrofit, repower,
or add-on equipment shall be reduced by the value of any current
financial incentive that directly reduces the project price,
including any tax credits or deductions, grants, or other public
financial assistance. Project proponents applying for funding shall
be required to state in their application any other public financial
assistance to the project  , not including funds described in
paragraphs (1) and (2) of subdivision (a) of Section 44287.2  .
   (h) For projects that would repower offroad equipment by replacing
uncontrolled diesel engines with new, certified diesel engines, the
state board may establish maximum grant award amounts per repower. A
repower project shall also be subject to the incremental cost maximum
pursuant to subdivision (e).
   (i) After study of available emission reduction technologies and
costs and after public notice and comment, the state board may reduce
the values of the maximum grant award criteria stated in this
section to improve the ability of the program to achieve its goals.
Every year the state board shall adjust the maximum
cost-effectiveness amount established in subdivision (a) and any
per-project maximum set by the state board pursuant to subdivision
(h) to account for inflation.
   (j)  This section shall remain in effect only until January 1,
2015, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2015, deletes or extends
that date.
  SEC. 2.  Section 44283 of the Health and Safety Code, as amended by
Section 2 of Chapter 627 of the Statutes of 2006, is amended to
read:
   44283.  (a) Grants shall not be made for projects with a
cost-effectiveness, calculated in accordance with this section, of
more than twelve thousand dollars ($12,000) per ton of NOx reduced in
California or a higher value that reflects state consumer price
index adjustments on or after January 1, 2015, as determined by the
state board.
   (b) Only NOx reductions occurring in this state shall be included
in the cost-effectiveness determination. The extent to which
emissions generated at sea contribute to air quality in California
nonattainment areas shall be incorporated into these methodologies
based on a reasonable assessment of currently available information
and modeling assumptions.
   (c) The state board shall develop protocols for calculating the
surplus NOx reductions in California from representative project
types over the life of the project.
   (d) The cost of the NOx reduction is the amount of the grant from
the program, including matching funds provided pursuant to
subdivision (e) of Section 44287, plus any other state funds, or
funds under the district's budget authority or fiduciary control,
provided toward the project, not including funds described in
paragraphs (1) and (2) of subdivision (a) of Section 44287.2. The
state board shall establish reasonable methodologies for evaluating
project cost-effectiveness, consistent with the definition contained
in paragraph (4) of subdivision (a) of Section 44275, and with
accepted methods, taking into account a fair and reasonable discount
rate or time value of public funds.
   (e) A grant shall not be made that, net of taxes, provides the
applicant with funds in excess of the incremental cost of the
project. Incremental lease costs may be capitalized according to
guidelines adopted by the state board so that these incremental costs
may be offset by a one-time grant award.
   (f) Funds under a district's budget authority or fiduciary control
may be used to pay for the incremental cost of liquid or gaseous
fuel, other than standard gasoline or diesel, which is integral to a
NOx reducing technology that is part of a project receiving grant
funding under the program. The fuel shall be approved for sale by the
state board. The incremental fuel cost over the expected lifetime of
the vehicle may be offset by the district if the project as a whole,
including the incremental fuel cost, meets all of the requirements
of this chapter, including the maximum allowed cost-effectiveness.
The state board shall develop an appropriate methodology for
converting incremental fuel costs over the vehicle lifetime into an
initial cost for the purposes of determining project
cost-effectiveness. Incremental fuel costs shall not be included in
project costs for fuels dispensed from any facility that was funded,
in whole or in part, from the fund.
   (g) For purposes of determining any grant amount pursuant to this
chapter, the incremental cost of any new purchase, retrofit, repower,
or add-on equipment shall be reduced by the value of any current
financial incentive that directly reduces the project price,
including any tax credits or deductions, grants, or other public
financial assistance. Project proponents applying for funding shall
be required to state in their application any other public financial
assistance to the project  ,   not including funds
described in paragraphs (1) and (2) of subdivision (a) of Section
44287.2  .
   (h) For projects that would repower offroad equipment by replacing
uncontrolled diesel engines with new, certified diesel engines, the
state board may establish maximum grant award amounts per repower. A
repower project shall also be subject to the incremental cost maximum
pursuant to subdivision (e).
   (i) After study of available emission reduction technologies and
costs and after public notice and comment, the state board may reduce
the values of the maximum grant award criteria stated in this
section to improve the ability of the program to achieve its goals.
Every year the state board shall adjust the maximum
cost-effectiveness amount established in subdivision (a) and any
per-project maximum set by the state board pursuant to subdivision
(h) to account for inflation.
   (j) This section shall become operative on January 1, 2015.
  SEC. 3.  Section 44287.2 is added to the Health and Safety Code, to
read:
   44287.2.  (a) By July 1, 2011, the state board shall revise
project grant criteria and guidelines pursuant to Section 44287 
, for a project that reduces greenhouse gas emissions,  to
allow funds from all of the following programs or funding sources to
be used for a project also funded under this chapter without those
additional public funds being factored into the criteria emission
reduction cost-effectiveness calculations:
   (1) Federal funding from programs designed to reduce greenhouse
gas emissions.
   (2) Alternative and Renewable Fuel and Vehicle Technology Program
(Article 2 (commencing with Section 44272) of Chapter 8.9).
   (b) Nothing in this section authorizes the expenditure of funds
for a project that does not meet all of the requirements of this
chapter, including requirements that require cost sharing or matching
of funds. Subdivision (a) does not apply if the additional
expenditure would not provide an incremental  air quality, or
 greenhouse gas emission reduction  , 
benefit greater than what would otherwise be achieved by the program.
The state board shall not exclude funds from the cost-effectiveness
calculation pursuant to subdivision (a), if excluding those funds
would reduce the emission reduction benefits expected to be achieved
from this chapter, federal greenhouse gas emission reduction
programs, or the Alternative and Renewable Fuel and Vehicle
Technology Program.