BILL ANALYSIS
AB 1527
SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
Senator S. Joseph Simitian, Chairman
2009-2010 Regular Session
BILL NO: AB 1527
AUTHOR: Lieu
AMENDED: July 9, 2009
FISCAL: Yes HEARING DATE: July 13, 2009
URGENCY: No CONSULTANT: Randy Pestor
SUBJECT : MOTOR VEHICLE EMISSION REDUCTION PROJECTS
SUMMARY :
Existing law :
1) Under the Carl Moyer Air Quality Standards Attainment
Program (Carl Moyer Program) (Health and Safety Code 44275
et seq.):
a) Provides grants to offset the incremental cost of
projects that reduce covered emissions from covered
sources in the state, and eligible projects include new
very low or zero-emission covered vehicles or covered
heavy-duty engines, emission-reducing retrofit of
covered engines, purchase and use of emission-reducing
add-on equipment, development and demonstration of
low-emission retrofit technologies and repower options,
and light- and medium-duty vehicle projects. ( 44280
and 44281).
b) Until January 1, 2015, prohibits project grants with
a cost-effectiveness value of more than $13,600 per ton
of oxides of nitrogen (NOx) reduced in the state. On
and after January 1, 2015, project grants are prohibited
with a cost-effectiveness value of more than $12,000 per
ton of NOx reduced in the state. (44283(a)).
c) Defines "cost effectiveness" to mean the dollars
provided to a project for each ton of covered emission
reduction attributed to a project, and provides that the
cost of covered emission reduction is the amount of the
program grant, including certain matching funds, plus
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any other state funds, or funds under an air pollution
control district's control, provided toward the project.
(44275(a), 44283(d)).
2) Under the Goods Movement Emission Reduction Program (GMERP)
Law (Health and Safety Code 39625 et seq.):
a) Projects eligible for funding include replacement,
repower, or retrofit of heavy-duty diesel trucks, diesel
locomotive engines, harbor craft, and cargo handling
equipment; on-shore electrical power; mobile or portable
shoreside distributed power generation; and
infrastructure electrification to reduce engine idling.
(39625(a)(2)).
b) Requires the State Air Resources Board (ARB) to
consider certain criteria in evaluating projects (e.g.,
emission reduction magnitude; public health benefits;
cost-effectiveness; reduction in greenhouse gases (GHG);
degree to which funds are leveraged from other sources;
total emission reductions a project would achieve over
its lifetime per state dollar invested).
(39625(b)(2)).
3) Under the Alternative and Renewable Fuel and Vehicle
Technology Program Law (44272 et seq.):
a) Requires the State Energy Resources Conservation and
Development Commission (CEC) to provide competitive
grants, revolving loans, loan guarantees, or loans to
certain interests (e.g., public agencies, businesses,
fleet owners, consumers) to develop and deploy
innovative technologies that change the state's fuel
and vehicle types to help attain the state's climate
change policies. (44272(a)).
b) Requires the CEC to provide preferences to those
projects maximizing the program goals based on certain
project criteria (e.g., consistency with climate change
policy, ability to reduce criteria air pollutants and
air toxics, provide nonstate matching funds).
(44272(c)).
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This bill :
1) Requires the ARB, in consultation with the CEC, to revise
project guidelines by January 1, 2011, to allow funds from
the following programs or funding sources to be used for a
project also funded under the Carl Moyer Program or the
GMERP Law without those additional funds being factored
into the criteria emission reduction cost-effectiveness
calculations under either of those programs:
a) Federal funding from programs designated to reduce
GHG emissions.
b) Alternative and Renewable Fuel and Vehicle Technology
Program Law.
2) Provides that nothing in the above provision (# 1 above):
a) Authorizes expenditure of funds for a project that
does not meet all of the requirements of the Vehicular
Air Pollution Control Law, including requirements that
require cost sharing or matching funds.
b) Applies if the additional expenditure would not
provide an incremental air quality or GHG emission
benefit greater than what would otherwise be achieved by
the program. Also, ARB cannot exclude funds from the
cost-effectiveness calculation pursuant to the above
provision if it would reduce emission reduction benefits
expected to be achieved from the Carl Moyer Program, the
GMERP, the Alternative and Renewable Fuel and Vehicle
Technology Program, or federal GHG emission reduction
programs.
3) Under the Carl Moyer Program, provides that federal funding
from programs to reduce GHG emissions and funding under the
Alternative and Renewable Fuel and Vehicle Technology
Program are not included in the cost of covered emission
reduction.
COMMENTS :
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1) Purpose of Bill . According to the author, "AB 1527 is
designed to promote better coordination between state
funding programs for clean transportation. The bill would
allow federal and AB 118 funds to be paired with Carl Moyer
or Proposition 1B funds to 'upgrade' projects to achieve
even greater air quality benefits and greenhouse gas
emission reductions. Current guidelines make this difficult
or impossible. While ARB staff has recommended amending
guidelines for Prop 1B to allow for limited co-funding,
these new guidelines have not yet been adopted and do not
apply to Carl Moyer."
The author also notes that "If the funds can be combined,
there is an incentive to 'upgrade' to a more advanced
vehicle technology that provides additional benefits, in
the form of petroleum and GHG emissions reduction."
2) Background . As noted above, the Carl Moyer Program, the
GMERP Law (enacted to set standards and procedures to
implement Proposition 1B, approved by voters November
2006), and the Alternative and Renewable Fuel and Vehicle
Technology Program Law (enacted by AB 118 (Nunez) Chapter
750, Statutes of 2007), provide funding for certain
eligible projects.
Under the Carl Moyer Program, grants cannot be made for
projects with a cost-effectiveness of more than $13,600 per
ton. The cost of the covered emission reduction is the
amount of the grant, including matching funds, plus any
other state funds provided to the project.
Under the GMERP Law, criteria include total emission
reductions a project would achieve over its lifetime per
state dollar invested.
AB 1527 allows certain federal funds and funding from the
Alternative and Renewable Fuel and Vehicle Technology
Program Law to be used for projects funded under the Carl
Moyer Program or the GMERP Law without being factored into
criteria emission reduction cost-effectiveness. While this
may reduce funding under each of those programs, the intent
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is to ensure that this new provision cannot apply unless
the air quality and GHG emission benefit is greater than
would otherwise be achieved by the programs.
3) Clarification needed . Clarification is needed to: a)
specify the guidelines that must be revised to allow the
funding revision (e.g., 39626, 44287); and b) amend the
Carl Moyer Program and the GMERP Law, rather than adding a
new section in general provisions of Vehicular Air
Pollution Control Law, with appropriate terms and
cross-references to ensure that the intent of this bill is
achieved.
SOURCE : CalStart
SUPPORT : California Dump Truck Owners Association,
California Natural Gas Vehicle Coalition,
Sempra Energy
OPPOSITION : None on file