BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 1527
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          Date of Hearing:   April 27, 2009

                        ASSEMBLY COMMITTEE ON TRANSPORTATION
                                   Mike Eng, Chair
                  AB 1527 (Lieu) - As Introduced:  February 27, 2009
           
          SUBJECT  :  Carl Moyer Program: multiple fund sources

           SUMMARY  :  Authorizes a motor vehicle emission reduction project  
          to be funded from multiple air quality programs, including the  
          Carl Moyer Memorial Air Quality Standards Attainment Program  
          (Carl Moyer) and the Goods Movement Emission Reduction Program  
          (GMERP).  

           EXISTING LAW  :  

          1)Establishes the California Air Resources Board (ARB) to set  
            statewide air quality standards and regulate emissions from  
            motor vehicles, fuels, and consumer products.  ARB, along with  
            the 35 local air quality districts that regulate other sources  
            of air pollution, monitors air pollution and administers  
            regulatory and incentive programs to improve air quality.   
            Establishes ARB as the lead entity for implementation of the  
            Global Warming Solutions Act of 2006.  

          2)Authorizes, through the enactment of Proposition 1B as  
            approved by the statewide voters in November 2006, the state  
            to sell approximately $20 billion of general obligation bonds  
            to fund transportation projects.  Of the $20 billion,  
            allocates $1 billion into the GMERP to be administered by ARB  
            to quickly reduce air pollution emissions, not otherwise  
            required by law or regulation, and reduce the health risk from  
            freight movement along California's priority trade corridors.   
            The major sources eligible for bond funding include heavy-duty  
            trucks, locomotives, shore side power for cargo ships,  
            commercial harbor craft, cargo handling equipment, and  
            infrastructure for electrification of truck stops,  
            distribution centers, and other places trucks congregate.  

          3)Establishes Carl Moyer as a grant program to fund the  
            incremental cost of cleaner-than required heavy-duty engines.   
            Carl Moyer is an integral part of California's strategy to  
            attain federal air quality standards by achieving emission  
            reductions early or in excess of what is required by  
            regulation.  Carl Moyer has provided funding for the  








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            incremental cost of a diverse range of project types,  
            including purchase of new alternative-fuel heavy-duty vehicles  
            (primarily transit buses and trash trucks) and engine  
            replacements (repowers) for agricultural irrigation pumps,  
            construction equipment, and marine vessels.  These projects  
            have reduced smog-forming nitrogen oxide (NOx) emissions by  
            over 18 tons per day (tpd) and toxic diesel particulate matter  
            (PM) emissions by almost 1 tpd, with a favorable  
            cost-effectiveness of about $2,600 per ton of NOx reduced.  

          4)Pursuant to AB 118 (Nunez) Chapter 750, Statutes of 2007,  
            develops funding programs for the reduction of greenhouse  
            gases (GHG) and the development of clean fuel and vehicle  
            technologies.  AB 118 creates three distinct programs aimed at  
            improving air quality and advancing alternative fuels and  
            clean technologies.  

             a)   The Air Quality Improvement Programs administered by ARB  
               is designed to fund air quality improvement projects  
               related to fuel and vehicle technologies.  ARB must consult  
               with local air districts and work in coordination with the  
               California Energy Commission (CEC); 

             b)   The Alternative and Renewable Fuel and Vehicle  
               Technology Program administered by CEC.  AB 118 directs  
               that projects be evaluated on their proposed reduction of  
               air pollutants, cost effectiveness, contribution to  
               regional air quality improvement, and ability to promote  
               alternative fuels or technologies; and,  

             c)   The Enhanced Fleet Modernization Program, administered  
               by the Bureau of Automotive Repair, primarily directed at  
               light-duty fleet vehicle replacements.  

           FISCAL EFFECT  :  Unknown

           COMMENTS  :  According to the author, "Carl Moyer and GMERP are  
          designed to reduce emissions throughout the state by providing  
          incentives for projects that lead to air quality improvements.   
          However, current law doesn't allow for a project using Carl  
          Moyer and GMERP funds to be developed to increase air quality  
          and reduce greenhouse gas emissions by adding additional state  
          funding such as funds from AB 118."  

          The author and sponsor have indicated that their intention of  








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          introducing the bill is to seek GMERP and Carl Moyer funding  
          flexibility so that any use of state AB 118 clean air/vehicle  
          program funds would not detrimentally impact a project's  
          competitiveness when the project is considered for funding  
          through the GMERP or Carl Moyer.  Further, they have indicated  
          that they will not change funding processes and  
          cost-effectiveness calculations in a way that would negatively  
          compromise criteria pollutant or toxic air contaminant emission  
          reductions.  

           Arguments in Support  :  

          1)By providing more flexibility in the administration of the air  
            quality vehicle emission programs by facilitating the  
            commingling of state program clean air vehicle funds, an  
            enhanced project as funded by a specific program could be  
            realized that otherwise could not be achieved if a project was  
            not allowed supplemental funding from another program.  

          2)The California Dump Truck Owners Association indicates that  
            "our industry has recently been negatively impacted by actions  
            taken by ARB with promulgation of the Truck and Bus Rule.  The  
            trucking industry is experiencing the worst economic downturn  
            since de-regulation with minimal work and high diesel prices.   
            The small trucking businesses are truly struggling to survive  
            at this point.  These ill-conceived ARB air quality  
            regulations will put the nail in the coffin of small trucking  
            businesses in this state.  This bill seeks to provide  
            additional funding for our impacted membership."  

           Arguments in Opposition  :  

          1)Diesel PM emission reductions as anticipated from Carl Moyer  
            and GMERP could be sacrificed should AB 118 funds be allowed  
            to be commingled and the PM emission reductions are  
            compromised.  Although enactment of this bill could improve  
            climate change through the reduction of GHG's, in the short  
            term, this bill alternatively could increase public health  
            risks, especially in areas around ports and railyards,  
            possibly impacting the heart and lung diseases of lower income  
            communities that disproportionately reside in these areas.  

          2)Substituting other state funds for private or local funds are  
            counter to the fund match requirements of Carl Moyer and GMERP  
            and can diminish the overall returns from the state's  








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            investment of its moneys for emission reductions in terms of  
            criteria pollutants or toxic air contaminants as well as  
            GHG's.  

           REGISTERED SUPPORT / OPPOSITION  :   

           Support 
           
          CALSTART (sponsor)
          California Dump Truck Owners Association

           Opposition 
           
          None on file
           

          Analysis Prepared by  :   Ed Imai / TRANS. / (916) 319-2093