BILL ANALYSIS ------------------------------------------------------------ |SENATE RULES COMMITTEE | AB 1527| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ THIRD READING Bill No: AB 1527 Author: Lieu (D) Amended: 7/23/09 in Senate Vote: 21 SEN. TRANSPORTATION & HOUSING COMMITTEE : 10-0, 7/7/09 AYES: Lowenthal, Huff, Ashburn, DeSaulnier, Harman, Hollingsworth, Kehoe, Pavley, Simitian, Wolk NO VOTE RECORDED: Oropeza SENATE ENVIRONMENTAL QUALITY COMMITTEE : 7-0, 7/13/09 AYES: Simitian, Runner, Ashburn, Corbett, Hancock, Lowenthal, Pavley SENATE APPROPRIATIONS COMMITTEE : 13-0, 8/27/09 AYES: Kehoe, Cox, Corbett, Denham, Hancock, Leno, Oropeza, Price, Runner, Walters, Wolk, Wyland, Yee ASSEMBLY FLOOR : 77-0, 6/2/09 - See last page for vote SUBJECT : Motor vehicle emission reduction projects SOURCE : CalStart DIGEST : This bill requires the Air Resources Board 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. CONTINUED AB 1527 Page 2 ANALYSIS : Existing Law 1.Under the Carl Moyer Air Quality Standards Attainment Program (Carl Moyer Program): 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. 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. One 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. 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 reductions is the amount of the program grant, including certain matching funds, plus any other state funds, or funds under an air pollution control district's control, provided toward the project. 2.Under the Goods Movement Emission Reduction Program (GMERP) Law: 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 shoreshide distributed power generation; AB 1527 Page 3 and infrastructure electrification to reduce engine idling. B. Requires the 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). 3.Under the Alternative and Renewable Fuel and Vehicle Technology Program Law: 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. B. Requires the CEC to provide preferences to those projects maximizing the program goals based on a certain project criteria (e.g., consistency with climate change policy, ability to reduce criteria air pollutants and air toxics, provide nonstate matching funds). This bill: 1.Requires the ARB 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 AB 1527 Page 4 Technology Program Law. 2.Provides that nothing in the above provision: 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. FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: No 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. SUPPORT : (Verified 8/27/09) CalStart (source) Azure Dynamics AB 1527 Page 5 California Dump Truck Owners Association California Natural Gas Vehicle Coalition Clean Energy Sempra Energy Waste Management ARGUMENTS IN SUPPORT : According to the author's office, "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's office 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." ASSEMBLY FLOOR : AYES: Adams, Ammiano, Anderson, Arambula, Beall, Tom Berryhill, Blakeslee, Blumenfield, Brownley, Buchanan, Caballero, Charles Calderon, Carter, Chesbro, Conway, Cook, Coto, Davis, De La Torre, De Leon, DeVore, Emmerson, Eng, Evans, Feuer, Fletcher, Fong, Fuentes, Fuller, Furutani, Gaines, Galgiani, Garrick, Gilmore, Hagman, Hall, Harkey, Hayashi, Hernandez, Hill, Huber, Huffman, Jeffries, Jones, Knight, Krekorian, Lieu, Logue, Bonnie Lowenthal, Ma, Mendoza, Miller, Monning, Nava, Nestande, Niello, Nielsen, John A. Perez, V. Manuel Perez, Portantino, Price, Ruskin, Salas, Saldana, Silva, Skinner, Smyth, Solorio, Audra Strickland, Swanson, Torlakson, Torres, Torrico, Tran, Villines, Yamada, Bass NO VOTE RECORDED: Bill Berryhill, Block, Duvall JJA:cm 8/28/09 Senate Floor Analyses AB 1527 Page 6 SUPPORT/OPPOSITION: SEE ABOVE **** END ****