BILL ANALYSIS                                                                                                                                                                                                    



                                                                       



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          |SENATE RULES COMMITTEE            |                  AB 1527|
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                                 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





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           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;  







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                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  







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                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







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          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 








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                         SUPPORT/OPPOSITION:  SEE ABOVE

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