BILL ANALYSIS Ó
AB 857
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Date of Hearing: April 13, 2015
ASSEMBLY COMMITTEE ON TRANSPORTATION
Jim Frazier, Chair
AB 857
(Perea) - As Amended March 26, 2015
SUBJECT: California Clean Truck, Bus, and Off-Road Vehicle and
Equipment Technology Program
SUMMARY: After 2018, re-establishes the priorities of the
California Clean Truck, Bus, and Off-Road Vehicle and Equipment
Technology Program (Technology Program) by providing that no
less than 80% (or $100 million, whichever is greater) of program
funds go to certain heavy-duty trucks that meet specified
emissions standards. Specifically, this bill:
1)Requires that 80% of Greenhouse Gas Reduction Fund (GGRF)
funds appropriated to the Technology Program (or $100 million,
whichever is greater), during the period between January 2,
2018 and January 1, 2023, be allocated to support the
commercial deployment of existing zero- and near-zero-emission
heavy-duty truck technology [trucks with a gross vehicle
weight rating (GVWR) of 26,001 lbs. or more] that meet or
exceed low NOx standards (0.02 grams per brake horsepower-hour
oxides of nitrogen).
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2)Recasts existing provisions and makes related, clarifying
amendments.
EXISTING LAW:
1)Requires the Air Resources Board (ARB), pursuant to AB 32
(Nunez), Chapter 488, Statutes of 2006, to develop a plan of
how to reduce statewide greenhouse gas (GHG) emissions to 1990
levels by 2020. Under AB 32, ARB is authorized to include the
use of market-based mechanisms to comply with these
regulations (such as cap and trade mechanism).
2)Establishes the GGRF in the State Treasury and requires all
money collected pursuant to cap and trade, with limited
exceptions, be deposited into the fund.
3)Creates the Technology Program pursuant to SB 1204 (Lara),
Chapter 524, Statutes of 2013, to fund development,
demonstration, pre-commercial pilot, and early commercial
deployment of zero- and near-zero-emission truck, bus, and
off-road vehicle and equipment technologies including, but not
necessarily limited to, medium- and heavy-duty trucks,
vocational trucks, short-haul and long-haul trucks, buses, and
off-road vehicles and equipment, port equipment, agricultural
equipment, marine equipment, and rail equipment.
4)Requires that the Technology Program be funded from the GGRF
and prioritized for projects in disadvantaged communities.
5)Requires, until January 1, 2018, that no less than 20% of
funding for the Technology Program support commercial
deployment of existing zero- and near-zero-emission heavy duty
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trucks, which is broadly defined.
6)Under the California Alternative and Renewable Fuel, Vehicle
Technology, Clean Air, and Carbon Reduction Act of 2007,
created by AB 118 (Nunez), Chapter 750, Statutes of 2007,
requires California Energy Commission (Commission) to
implement the Alternative and Renewable Fuels and Vehicle
Technology Program (ARFVTP) to fund specified entities to
develop and deploy technologies and alternative and renewable
fuels in the marketplace to help meet the state's climate
change policies.
7)Creates the Air Quality Improvement Program (AQIP),
administered by ARB and the Commission, in consultation with
local air districts, to fund specified air quality improvement
projects.
8)Requires ARB, in consultation with the Commission, to develop
guidance through the existing AQIP funding plan process to
implement the Technology Program.
9)Defines a "heavy-duty truck" as vehicles weighing
14,000-19,500 pounds GVWR.
FISCAL EFFECT: Unknown
COMMENTS: AB 32 required ARB to develop a plan to reduce GHG
emissions to 1990 levels, by 2020. AB 32 also required ARB to
ensure that GHG emissions reduction requirements and programs,
to the extent feasible, directs public and private investment
toward the most disadvantaged communities in the state. In
addition, AB 32 authorized ARB to adopt a schedule of fees to be
paid by GHG emission sources and to deposit those monies into
the GGRF, which would then be available upon appropriation by
the Legislature, to carry out AB 32 requirements.
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Subsequent legislation, AB 118, established the AQIP
administered by ARB in consultation with local air districts.
The AQIP is funded through various fees and surcharges on
vehicles and provides competitive grants to fund projects that
improve air quality. The AQIP encompasses several programs,
including the Hybrid and Zero-Emission Truck and Bus Voucher
Incentive Program (HVIP), which is administered by ARB and
provides vouchers to California fleet owners to help purchase
hybrid and zero-emission trucks and buses.
AB 118 also established the ARFVTP, which is administered by the
Commission, and provides funding for development and deployment
of alternative and renewable fuels and advanced transportation
technologies to help attain the state's climate change goals.
Eligible projects include, for example, development,
improvement, and production of alternative and renewable
low-carbon fuels; improvement of light-, medium-, and heavy-duty
vehicle technologies; and expansion of infrastructure connected
with existing fleets, public transit, and transportation
corridors.
In 2014, SB 1204 established the Technology Program which is
administered by ARB in conjunction with the Commission. The
intent of SB 1204 was to create a single, overarching program to
develop and deploy heavy-duty vehicles primarily because the
author felt that heavy-duty vehicles were not being adequately
addressed in HVIP and AQIP. Specifically, the Technology
Program, until January 1, 2018, provides GGRF funds for projects
that develop technology, demonstrate and pilot commercial and
early-commercial deployment of zero and near-zero emission
medium- and heavy-duty truck technology, and facilitate clean
goods movement. The Technology Program works to develop
zero-and near-zero emission technologies for specified vehicles
and equipment not only for trucks, but also for off-road
vehicles and equipment at the ports as well as in agricultural,
marine, and rail sectors. Within the Technology Program,
funding priority is generally given to projects that demonstrate
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benefit to disadvantaged communities, the ability to leverage
additional public and private funding, and provide the potential
for co-benefits.
According to the author, air pollution continues to affect human
health disproportionately in disadvantaged communities and
especially along transportation corridors. He notes that in the
South Coast and San Joaquin Valley Air Districts, nearly 80% of
smog forming pollutants, such as NOx, come from mobile
sources--primarily, large transport trucks. The author also
notes that manufactures claim that new technologies will be
available in the transportation marketplace within the next
three years that could meet near-zero emissions levels (90% NOx
reduction over the current standard). The author notes, however,
that to achieve widespread deployment of these new technologies,
financial incentives need to be in place to help "buy down" the
capital costs of this improved technology.
To help incentivize the adoption of these new technologies, the
author has introduced this bill which would reestablish the
priorities of the Technology Program for five years beginning on
January 2, 2018 and ending on January 1, 2023. Specifically, AB
857 would require, during that five-year period, that 80% of
Technology Program funds (or $100 million, whichever is greater)
be used for the deployment of certain heavy-duty vehicles -
those weighing 26,001 lbs. GVWR or greater that meet a low NOx
standard (i.e., meet or exceed an emission standard of 0.02
grams per brake horsepower-hour oxides of nitrogen).
Supporters of AB 857, which include, among others, natural gas
industry representatives, contend that the bill will create
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incentives for zero- and near-zero emission heavy-duty truck
purchases that will help purchasers afford the initial costs of
these cleaner trucks. They contend that these incentives will
help accelerate retirement of older, high polluting trucks; help
grow the clean, alternative fuel truck market; and stimulate
additional investments in the next generation of zero- and
near-zero emission truck technologies.
The California Trucking Association (CTA), also writing in
support of this bill, agrees that expanding incentives to
support deployment of clean and low carbon heavy-duty vehicles
used for goods movement would be a wise investment. CTA
contends that increased funding commitments for certain
heavy-duty trucks will ensure that incentives are directed to
reducing the greatest possible emissions in the transportation
sector.
Writing in opposition to AB 857, the Union of Concerned
Scientists (UCS) and the American Lung Association in California
(ALAC) agree that transportation sector emissions need to be
targeted, but they believe that the bill, unnecessarily, directs
a very large fraction of GGRF funds exclusively to commercial
deployment of the heaviest of trucks, thereby limiting funding
for other important emissions reducing projects. They also
contend that AB 857 fails to address specified GHG emissions
reductions despite the fact that the money is coming from the
GGRF, which is predicated on reducing global warming pollution.
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UCS and ALAC also contend that AB 857 would prematurely limit
future technology investments, such as hybrid or plug-in hybrid
trucks, which could be zero-emission capable but would not be
eligible for prioritized funding unless they were also certified
to the low-NOx standard. They note that precluding these types
of technologies could exclude promising options for emissions
reductions and air quality improvements within and well beyond
the 2018 to 2023 timeframe.
Lastly, UCS and ALAC point out that natural gas-powered
heavy-duty trucks will be certified to low-NOx emissions levels
within the next few years and will undoubtedly qualify for
funding under this bill; however, GHG emissions reductions from
these vehicles remains uncertain given that there is frequent
methane leakage that occurs during natural gas extraction,
distribution, and refueling as well as from the vehicle itself.
Suggested amendments: In response to concerns that directing a
very large fraction of Technology Program dollars exclusively to
support the commercial deployment of certain zero- and near-zero
emissions heavy duty trucks could limit the implementation of
other important emissions reduction projects, that author has
agreed to lower the percentage to 50%.
Previous legislation: SB 1204 (Lara) Chapter 524, Statutes of
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2014, created a the Technology Program to fund development,
demonstration, pre-commercial pilot, and early commercial
deployment of zero- and near-zero-emission truck, bus, and
off-road vehicle and equipment technologies.
AB 8 (Perea), Chapter 401, Statutes of 2013, extended until
January 1, 2024, extra fees on vehicle registrations, boat
registrations, and tire sales in order to fund the programs that
support the production, distribution, and sale of alternative
fuels and vehicle technologies, as well as air emissions
reduction efforts.
AB 118, Nunez, Chapter 750, Statutes of 2007, created the
California Alternative and Renewable Fuel, Vehicle Technology,
Clean Air, and Carbon Reduction Act of 2007 that required the
Commission to implement the ARFVTP and provide funding measures
to specified entities to develop and deploy technologies and
alternative and renewable fuels in the marketplace to help
attain the state's climate change policies.
AB 32 (Nunez), Chapter 488, Statutes of 2006 required the ARB to
develop a plan of how to reduce emissions to 1990 levels by the
year 2020 and also required ARB to ensure that, to the extent
feasible, GHGs reduction requirement and programs direct public
and private investment toward the most disadvantaged
communities.
Double referral: This bill will be referred to the Assembly
Natural Resources Committee should it pass out of this
committee.
REGISTERED SUPPORT / OPPOSITION:
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Support
Southern California Gas (Sponsor)
Alhambra Chamber of Commerce
Antelope Valley Air Quality Management District
Association of California Cities-Orange County
Azusa Chamber of Commerce
Black Chamber of Orange County
Boys & Girls Club of Greater Ventura
Boys Republic
Burbank Chamber of Commerce
California Natural Gas Vehicle Coalition
California Trucking Association
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Cars are Basic
City of Atascadero
City of Goleta
City of McFarland
City of Monterey Park
City of Perris
Clean Air Now
Clean Energy and Clean Energy Renewable Fuels
Coachella Valley Economic Partnership
Congress of California Seniors
COPE Health Solutions
County of Santa Barbara
Culver City Chamber
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Dana Point Chamber of Commerce
Desert Valleys Builders Association
Dignity Health
Duarte Chamber of Commerce
Duarte Unified School District
Economic Development Collaborative Ventura County
Economic Development Corporation service Tulare County
Economic Vitality Corporation
Federacion de Clubes Jaliscienses Del Sur de California
Foothill Workforce Investment Board
Fullerton Chamber of Commerce
Gardena Valley Chamber of Commerce
Gateway Chambers Alliance
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Greater West Covina
Hanford Chamber of Commerce
Grandma's House of Hope
Kheir Clinic
Laguna Nigel Chamber of Commerce
Latino Caucus Priority Bill Press Conference
Lincoln Training Center
Los Angeles Area Chamber of Commerce
Orange County Business Council
Opposition
American Lung Association in California
Union of Concerned Scientists
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Analysis Prepared by:Victoria Alvarez / TRANS. / (916) 319-2093