BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 1527
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          ASSEMBLY THIRD READING
          AB 1527 (Lieu)
          As Amended  June 1, 2009
          Majority vote 

           TRANSPORTATION      11-0             APPROPRIATIONS              
          17-0                
           
           ----------------------------------------------------------------- 
          |Ayes:|Eng, Blumenfield, Buchanan, |Ayes:|De Leon, Nielsen,       |
          |     |Conway, Galgiani, Bonnie    |     |Ammiano,                |
          |     |Lowenthal, Miller, Niello,  |     |Charles Calderon,       |
          |     |John A. Perez, Solorio,     |     |Davis, Duvall, Fuentes, |
          |     |Torlakson                   |     |Hall, Harkey, Miller,   |
          |     |                            |     |John A. Perez, Price,   |
          |     |                            |     |Skinner, Solorio, Audra |
          |     |                            |     |Strickland, Torlakson,  |
          |     |                            |     |Krekorian               |
          |-----+----------------------------+-----+------------------------|
          |     |                            |     |                        |
           ----------------------------------------------------------------- 
           SUMMARY  :  Authorizes a motor vehicle emission reduction project  
          to be jointly 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).  Specifically,  this bill  :  

          1)Requires the California Air Resources Board (ARB), in  
            consultation with the State Resources Conservation and  
            Development Commission (Energy Commission), to revise its  
            guidelines by January 1, 2011, to allow specified funds to be  
            used in conjunction with a project that is proposed to be  
            funded from either the Carl Moyer or GMERP.  Specified funds  
            include the following:  

             a)   Federal;

             b)   Alternative and Renewable Fuel and Vehicle Technology  
               Program;  

             c)   Air Quality Improvement Program;  

             d)   Carl Moyer; and,  









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             e)   GMERP.  

          1)Requires that the guidelines be revised to allow the specified  
            funds to supplement funding for a project to be funded from  
            either the Carl Moyer or GMERP without the specified funds  
            being factored into the criteria emission reduction  
            cost-effectiveness calculations.  

          2)Maintains the existing cost sharing or matching fund  
            requirements of Carl Moyer and GMERP and ensures that the  
            incremental air quality benefits of these programs are not  
            compromised.  

           EXISTING LAW  :  

          1)Establishes 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  
            incremental cost of a diverse range of project types,  








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            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)Develops, pursuant to AB 118 (Nunez) Chapter 750, Statutes of  
            2007, funding programs for the reduction of 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 Program 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  
               Energy Commission; 

             b)   The Alternative and Renewable Fuel and Vehicle  
               Technology Program administered by the Energy Commission.   
               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  :  According to the Assembly Appropriations  
          Committee, pressure to allow bond proceeds or other monies to  
          fund emissions reduction and goods movement projects, but at no  
          additional state cost.  (Various special funds)
           
           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 simultaneously reduce greenhouse gas emissions by adding  








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          additional state funding such as funds from AB 118.  

          The author and sponsor have indicated that their intention of  
          introducing this 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."  
           

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


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