BILL ANALYSIS                                                                                                                                                                                                    




                   Senate Appropriations Committee Fiscal Summary
                           Senator Christine Kehoe, Chair

                                           1507 (Lieu)
          
          Hearing Date:  08/02/2010           Amended: 07/15/2010
          Consultant:  Brendan McCarthy   Policy Vote: EQ 7-0














































          AB 1507 (Lieu), page 2


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          ____
          BILL SUMMARY: AB 1507 requires the Air Resources Board to revise  
          project guidelines for the Carl Moyer program by July 1, 2011 to  
          allow certain federal and state funds to be used on a project  
          without being factored into cost-effectiveness calculations.    
          _________________________________________________________________ 
          ____
                            Fiscal Impact (in thousands)

           Major Provisions         2010-11      2011-12       2012-13     Fund
           
          Updating guidelines    $43        $85                   Special  
          *                      

          * Carl Moyer Fund.  
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          ____

          STAFF COMMENTS: 
          
          Under current law, the Carl Moyer Program provides incentive  
          grants for engines, equipment, and other sources of pollution  
          that exceed the standards established by law or regulation,  
          thereby providing early or extra emission reductions.  The Air  
          Resources Board approves projects on the basis of their  
          cost-effectiveness, and existing law prohibits grants for  
          projects with a cost-effectiveness that exceeds $13,600 per ton  
          of NOx (oxides of nitrogen) reduced.  

          AB 118 (Nunez, Chapter 750 of 2007), provides approximately $200  
          million annually through 2015 for three programs to fund air  
          quality improvements.  One of these programs is the Alternative  
          and Renewable Fuel and Vehicle Technology Program, which is  
          administered by the Energy Commission and provides competitive  
          grants and other financial incentives to help the state achieve  
          its climate change goals, primarily by reducing greenhouse gas  
          emissions.

          AB 1507 requires the Air Resources Board to revise project grant  
          criteria and guidelines for the Carl Moyer program, such that  
          federal funds or AB 118 funds can also be used to fund a project  
          without those additional funds being factored into the  
          cost-effectiveness criteria of the Carl Moyer Program. However,  
          the bill specifies that the federal or AB 118 funds shall not be  
          excluded from the cost effectiveness criteria if that would  







          AB 1507 (Lieu), page 2


          reduce the overall emissions reductions achieved by the project.

          The Air Resources Board indicates that it will need minor staff  
          resources to update guidelines under the bill.

          In addition to the direct costs of the bill, there may be cost  
          pressures on Carl Moyer or AB 118 funds. By allowing Carl Moyer  
          and AB 118 funds to be combined to fund projects, the bill may  
          result in fewer projects being funded, overall. However, this  
          cost pressure is offset by a requirement of the bill that  
          prohibits the Air Resources Board from allowing this combining  
          of funds to have the effect of reducing the emissions reduction  
          benefits of those funds.

          AB 1507 is similar to AB 1527 (Lieu) of last year. However, AB  
          1527 made similar changes to the funding criteria for the Goods  
          Movement Emission Reduction Program, authorized by Proposition  
          1B of 2006. The Governor vetoed AB 1527, encouraging the author  
          to work with the Air Resources Board as it reviewed its  
          guidelines for the Carl Moyer and Goods Movement Emission  
          Reduction Program guidelines.

          In March of 2010, the Air Resources Board updated its guidelines  
          for the Goods Movement Emission Reduction Program to allow  
          funding from multiple sources, but has not updated the  
          guidelines for the Carl Moyer Program in a similar manner.