BILL ANALYSIS Ó
AB 857
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Date of Hearing: April 27, 2015
ASSEMBLY COMMITTEE ON NATURAL RESOURCES
Das Williams, Chair
AB 857
(Perea) - As Amended April 15, 2015
SUBJECT: California Clean Truck, Bus, and Off-Road Vehicle and
Equipment Technology Program
SUMMARY: Revises the Clean Truck, Bus, and Off-Road Vehicle and
Equipment Technology Program (Clean Truck Program) to require
the greater of 50% or $100 million of the funds appropriated
between January 2, 2018 and January 1, 2023 for development of a
broad range of medium- and heavy-duty truck technology be
allocated instead to support commercial deployment of existing
heavy-duty (>26,000 lbs GVWR) truck technology that meets
specified low oxides of nitrogen (low NOx) emission standards.
EXISTING LAW:
1)Establishes the Air Quality Improvement Program (AQIP),
administered by the Air Resources Board (ARB), which funds
projects that reduce criteria air pollutants, improve air
quality, and provide research for alternative fuels and
vehicles, vessels, and equipment technologies. The two
primary programs adopted by ARB pursuant to AQIP are the Clean
Vehicle Rebate Project (CVRP) and the Hybrid and Zero
Emissions Truck and Bus Voucher Incentive Program (HVIP).
AQIP is funded primarily by smog abatement fees paid by
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vehicle owners to the Department of Motor Vehicles, with
smaller contributions from boat registration fees and special
identification plate fees.
2)Establishes the Alternative and Renewable Fuel and Vehicle
Technology Program (ARFVTP), administered by the California
Energy Commission, which provides grants and other financial
incentives to accelerate the development and deployment of
clean, efficient, low carbon alternative fuels and
technologies. ARFVTP is funded by vehicle registration fees
and receives approximately $100 million per year total.
3)Establishes the Carl Moyer Memorial Air Quality Standards
Attainment Program (Moyer Program) [AB 1571 (Villaraigosa),
Chapter 923, Statutes of 1999], administered by ARB and local
air districts, to fund the incremental cost of
cleaner-than-required vehicles, engines, and equipment. The
primary objective of the program is to achieve air quality
emission reductions that would not otherwise occur through
regulations or other legal mandates. The Moyer Program is
funded by vehicle registration surcharges adopted by local air
districts in nonattainment areas.
4)Requires ARB, pursuant to California Global Warming Solutions
Act of 2006 [AB 32 (Nunez), Chapter 488, Statutes of 2006], to
adopt a statewide greenhouse gas (GHG) emissions limit
equivalent to 1990 levels by 2020 and adopt regulations to
achieve maximum technologically feasible and cost-effective
GHG emission reductions. AB 32 authorizes ARB to permit the
use of market-based compliance mechanisms to comply with GHG
reduction regulations, once specified conditions are met.
5)Establishes the Greenhouse Gas Reduction Fund (GGRF) and
requires all moneys, except for fines and penalties, collected
by ARB from the auction or sale of allowances pursuant to a
market-based compliance mechanism (i.e., the cap-and-trade
program adopted by ARB under AB 32) to be deposited in the
GGRF and available for appropriation by the Legislature.
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6)Establishes the GGRF Investment Plan and Communities
Revitalization Act [AB 1532 (John A. Pérez), Chapter 807,
Statutes of 2012] to set procedures for the investment of GHG
allowance auction revenues. AB 1532 authorizes a range of GHG
reduction investments and establishes several additional
policy objectives.
7)Requires the investment plan to allocate: (1) a minimum of 25
percent of the available moneys in the GGRF to projects that
provide benefits to identified disadvantaged communities; and,
(2) a minimum of 10 percent of the available moneys in the
GHGRF to projects located within identified disadvantaged
communities [SB 535 (De Leon), Chapter 830, Statutes of 2012].
8)Establishes the Clean Truck Program pursuant to SB 1204
(Lara), Chapter 524, Statutes of 2014, to use GGRF funds
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.
9)Requires, until January 1, 2018, that no less than 20% of
funding for the Clean Truck Program support commercial
deployment of existing zero- and near-zero-emission heavy-duty
trucks.
FISCAL EFFECT: Unknown
COMMENTS:
1)Background. In 2014, SB 1204 established the Clean Truck
Program which is administered by ARB. The intent of SB 1204
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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 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 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 Program, funding priority is
generally given to projects that demonstrate benefit to
disadvantaged communities, the ability to leverage additional
public and private funding, and provide the potential for
co-benefits.
When the Governor signed SB 1204, he included a signing
message stating:
To maximize reductions of these harmful emissions, the
focus of this funding must be on transformative, advanced
technology trucks and buses that can meet the objectives of
AB 32 by reducing emissions of both harmful criteria
pollutants and greenhouse gases. Only vehicles that are
certified to the cleanest standards and run on renewable
fuels merit funding through this program.
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 manufacturers 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
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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.
This bill would allocate SB 1204 funds to heavy-duty, low NOx
(e.g., natural gas) trucks from 2018-2023. Specifically, the
bill requires, during that five-year period, that 50% of SB
1204 truck 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 NOx per brake horsepower-hour).
2)From GHG to NOx. This bill seeks to allocate a significant
amount of GGRF funds to support existing very heavy-duty
trucks based on meeting a low NOx emission standard for which
no engine has yet been certified. Under current law, these
funds are broadly aimed at technology development,
demonstration, pre-commercial pilots, and early commercial
deployment of medium- and heavy-duty trucks (presumably
including electric, hybrid-electric and fuel cell trucks in a
broad range of weight classes) based first, like other uses of
GGRF funds, on the value of those investments in achieving GHG
emission reductions.
If these low NOx engines rely on conventional natural gas (or
diesel) fuel, they will achieve marginal, if any, GHG emission
reductions. This raises a question about the appropriateness
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of using GGRF funds, which the Governor seemed to address
preemptively in his signing message for SB 1204 by stating
"only vehicles that?run on renewable fuels merit funding." If
the author and the committee wish to allocate GGRF funds to
low NOx engines over other technologies, the author and the
committee may wish to consider requiring the use of renewable
fuels so that the investment delivers significant GHG emission
reductions. Alternatively, the allocation of GGRF funds could
be reduced or eliminated in favor of other funding sources
more appropriate for a NOx reduction program, such as the
Moyer Program, the CEC's ARFVTP program, or Proposition 1B.
The bill also redefines "heavy-duty" to limit the funds to
trucks over 26,000 lbs GVWR. The current definition of
"heavy-duty" applicable to SB 1204 is over 6,000 lbs GVWR
(Health and Safety Code Section 39033). This provision may
also have the effect of steering funds away from investments
that have the greatest GHG emission reduction potential.
According to ARB, initial deployments often start with medium
heavy-duty trucks (14,001-26,000 pounds GVWR). For example,
approximately 68 percent of all HVIP vouchers have gone to
trucks that are 26,000 pounds GVWR or less. Medium heavy-duty
trucks are ubiquitous and contribute significantly to
statewide GHG, NOx, and PM emissions. The author and the
committee may wish to consider eliminating the redefinition of
"heavy-duty" so that a broader range of trucks can qualify
based on GHG emission reduction value, rather than an
arbitrary weight limit.
REGISTERED SUPPORT / OPPOSITION:
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Support
Southern California Gas (sponsor)
3G CNG Corporation
99 cent Only Stores
ARB, Inc.
Agility Fuel Systems, Inc.
Alhambra Chamber of Commerce
A.M. Ortega
Agile Sourcing Partners
Alameda Construction
Antelope Valley African American Chamber of Commerce
Antelope Valley Air Quality Management District
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Arborland Montessori School
Asian Business Association of the Inland Empire
Association of California Cities-Orange County
Azusa Chamber of Commerce
Bienvenidos Community Health Center
Binational Health Week Planning Committee, Los Angeles
Bioenergy Association of California
Black Business Association, Los Angeles
Black Chamber of Orange County
Boys and Girls Club of Buena Park
Boys and Girls Club of Greater Redlands-Riverside of San
Bernardino & Riverside Counties
Boys & Girls Club of Greater Ventura
Boys and Girls Club of Pomona Valley
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Boys Republic
Breathe California of Los Angeles County
Brotherhood Crusade
Burbank Chamber of Commerce
California Center for Public Policy
California Natural Gas Vehicle Coalition
California Trucking Association
Cambodia Town, Inc.
Cars are Basic
Casa 0101
Central City Association
Chambers of Commerce Alliance of Ventura & Santa Barbara
Counties
Charter Oak Unified School District
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City of Atascadero
City of Buena Park
City of Commerce
City of Downey
City of El Monte
City of Fontana
City of Fountain Valley
City of Hanford
City of Goleta
City of Lake ElSinore
City of Lynwood
City of Maywood
City of McFarland
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City of Montebello
City of Monterey Park
City of Palm Desert
City of Perris
City of Riverside
City of Tulare
City of Westminster
Clean Air Now
Clean Energy and Clean Energy Renewable Fuels
CM Distributors
Coachella Valley Economic Partnership
Coalition for Humane Immigrant Rights of Los Angeles
Congress of California Seniors
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COPE Health Solutions
Corona Chamber of Commerce
County of San Bernardino
County of Santa Barbara
County of Kings
Culver City Chamber of Commerce
Cummins Westport, Inc.
Dana Point Chamber of Commerce
Desert Valleys Builders Association
Dignity Health
Duarte Chamber of Commerce
Duarte Unified School District
Dydee Service of Pasadena, Inc.
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East Los Angeles Community youth Center
EDCO
Economic Development Collaborative Ventura County
Economic Development Corporation, Tulare County
Economic Vitality Corporation of San Luis Obispo
El Monte/South El Monte Chamber of Commerce
Federacion de Clubes Jaliscienses Del Sur de California
Foothill Workforce Investment Board
Fountain Valley Chamber of Commerce
Fullerton Chamber of Commerce
Gardena Valley Chamber of Commerce
Gateway Chambers Alliance
Gateway Regional Chambers of Commerce
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GI Industries
Glendale Chamber of Commerce
Glendora Unified School District
Grandma's House of Hope
Greater Conejo Valley Chamber of Commerce
Greater Los Angeles African American Chamber of Commerce
Greater West Covina
GreenFIX America LLC
Hanford Chamber of Commerce
Hemet San Jacinto Chamber of Commerce
Hueneme Chamber of Commerce
Huntington Beach Chamber of Commerce
Industry Manufacturers Council
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Infinity Business Solutions
Inland Action
Jabo Industries, LLC
Kern Economic Development Foundation
Kheir Clinic
Laguna Nigel Chamber of Commerce
Latino Caucus Priority Bill Press Conference
La Verne Chamber of Commerce
Lincoln Training Center
LK Health
Lyles utility Construction, LLC
Los Angeles Area Chamber of Commerce
Los Angeles Business Council
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Los Angeles County Business Federation
Los Angeles Opportunities Industrialization Center
Meals On Wheels, Industry, Inc.
Mojave Desert Air Quality Management District
Montebello Unified School District
Mothers of East Los Angeles
Mujeres de la Tierra
National Construction and Development, Inc.
Neal Construction Services
Northeast Community Clinic
North of the River Chamber of Commerce
North Orange County Legislative Alliance
Ojai Valley Chamber of Commerce
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Orange County Business Council
Orange County Hispanic Chamber of Commerce
Orange County Taxpayers Association
Outstanding Mothers' Gathering
Oxnard Chamber of Commerce
Pacific Asian Consortium in Employment
Pacoima Beautiful
Palm Desert Area Chamber of Commerce
Pasadena Chamber of Commerce, Board of Directors
Pinnacle Petroleum, Inc.
Plaza Community Services
Pomona Valley Hospital Medical Center
Proteus, Inc.
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RBD Communications/Recycling Black Dollars
Rosemead Chamber of Commerce
Rowland Heights Community Coordinating Council
Ryder
SW Administrators
Salvadoran American Leadership and Educational Fund
San Fernando Valley Rescue Mission
San Gabriel Valley Regional Chamber of Commerce
Santa Ana Chamber of Commerce
Santa Anita Family YMCA
Santa Barbara County Taxpayers Association
Santa Barbara County Technology and Industry Association
Santa Clarita Valley Chamber of Commerce
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Santa Maria Valley Chamber of Commerce, Economic Development
Commission
Silverado Stages, Inc.
Simi Valley Chamber of Commerce
South Orange County Economic Coalition
Southeast Community Development Corporation
Southwest California Legislative Council
Temple City Chamber of Commerce
The East Los Angeles Community Union (TELACU)
Transit Systems Unlimited, Inc.
Tulare County Board of Supervisors
Uchida Pipe & Industrial Products
UC San Diego
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United Chambers of Commerce, San Fernando Valley & Regions
Utility Partners of America
Valley Family Center
Vobecky Enterprises
William C. Velasquez Institute
YMCA
Opposition
American Lung Association in California
Clean Power Campaign
Natural Resources Defense Council
Sierra Club California
Union of Concerned Scientists
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Analysis Prepared by:Lawrence Lingbloom / NAT. RES. / (916)
319-2092