BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
1527 (Lieu)
Hearing Date: 08/27/2009 Amended: 07/23/2009
Consultant: Mark McKenzie Policy Vote: T&H 10-0; EQ 7-0
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BILL SUMMARY: AB 1527 would require the State Air Resources
Board (ARB) to revise project guidelines for specified emission
reduction programs by January 1, 2011 to allow certain federal
and state funds to be used on a project without being factored
into criteria emission reduction cost-effectiveness
calculations.
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Fiscal Impact (in thousands)
Major Provisions 2009-10 2010-11 2011-12 Fund
ARB regulations $170 $170 Special/
____________ Bond*
* Split between the GMERP bond funds from the California Ports
Infrastructure, Security, and Air Quality Improvement Account
(Proposition 1B), and Carl Moyer Program funds.
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STAFF COMMENTS: SUSPENSE FILE.
This bill would require ARB to revise program regulations to
provide for the use of federal funding from greenhouse gas (GHG)
emission reduction programs and state funds from the Alternative
and Renewable Fuel and Vehicle Technology Program (AB 118 funds)
on projects funded by the Carl Moyer Memorial Air Quality
Standards Attainment Program (Carl Moyer Program) and the Goods
Movement Emission Reduction Program (GMERP). Federal funds and
specified AB 118 funds could only be used in conjunction with
Carl Moyer and/or GMERP bond funds if the additional
expenditures would provide an incremental increase in the air
quality or GHG emission reduction benefits of the project.
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. ARB 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.
Proposition 1B and subsequent implementing statutes provide $1
billion in general obligation bond funds for the GMERP program,
which is administered by ARB. GMERP provides incentive grants
for projects that reduce goods movement-related emissions, as
specified. Funds are awarded to qualified projects on a
competitive basis and ranked according to a combination of two
factors: the total amount of emissions reduced by the project
and the project's cost-effectiveness (total pollutant-weighted
emission reduction per state dollar invested).
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AB 1527 (Lieu)
AB 118 (Nunez), Chapter 750 of 2007, provides approximately $200
million annually through 2015 for three new programs to fund air
quality improvement projects and develop and deploy technology
and alternative and renewable fuels. One of these programs is
the Alternative and Renewable Fuel and Vehicle Technology
Program, which is administered by the State Energy Resources
Conservation and Development Commission (CEC) and provides
competitive grants and other financial incentives to help the
state achieve its climate change goal, primarily by reducing GHG
emissions.
AB 1527 allows certain federal funds and specified AB 118 funds
to be used for projects funded under the Carl Moyer Program or
the GMERP Law without being factored into criteria emission
reduction cost-effectiveness calculations. While this may
reduce funding under each of those programs, the intent 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. To the extent that funds are
combined for use on individual projects, fewer overall projects
would receive funding under these programs, thereby creating
moderate cost pressures. However, since the bill requires that
the use of federal and AB 118 funds on Carl Moyer and GMERP
projects must achieve an incremental air qualify benefit, the
overall impact on cost-effectiveness (benefit per dollar spent)
should be minimized.
AB 1527 requires ARB to update guidelines for Carl Moyer and
GMERP by January 1, 2011 to allow for the use of other specified
public funds without those funds being factored into
cost-effectiveness calculations. ARB would incur staffing costs
of approximately $170,000 in both 2009-10 and 2010-11 to revise
current regulations, including drafting of proposed revisions,
public hearings, and all other duties required under the
Administrative Procedures Act. These costs would be attributed
to both Carl Moyer Program funds and GMERP bond funds.