BILL ANALYSIS Ó SENATE COMMITTEE ON ENVIRONMENTAL QUALITY Senator Wieckowski, Chair 2015 - 2016 Regular Bill No: AB 857 ----------------------------------------------------------------- |Author: |Perea | ----------------------------------------------------------------- |-----------+-----------------------+-------------+----------------| |Version: |6/23/2015 |Hearing |7/15/2015 | | | |Date: | | |-----------+-----------------------+-------------+----------------| |Urgency: |No |Fiscal: |Yes | ------------------------------------------------------------------ ----------------------------------------------------------------- |Consultant:|Rebecca Newhouse | | | | ----------------------------------------------------------------- SUBJECT: California Clean Truck, Bus, and Off-Road Vehicle and Equipment Technology Program ANALYSIS: Existing law: 1) Under the California Global Warming Solutions Act of 2006 (commonly referred to as AB 32), requires the Air Resources Board (ARB) to determine the 1990 statewide greenhouse gas (GHG) emissions level and approve a statewide GHG emissions limit that is equivalent to that level, to be achieved by 2020, and to adopt GHG emissions reductions measures by regulation. ARB is authorized to include the use of market-based mechanisms to comply with these regulations. (Health and Safety Code (HSC) §38500 et seq.) 2) Establishes the Greenhouse Gas Reduction Fund (GGRF) in the State Treasury and requires all moneys, except for fines and penalties, collected pursuant to a market-based mechanism be deposited in the fund and requires the Department of Finance, in consultation with ARB and any other relevant state agency, to develop, as specified, a three-year investment plan for the moneys deposited in GGRF. (Government Code §16428.8) 3) Requires the investment plan to allocate a minimum of 25% of the available moneys in the fund to projects that provide benefits to disadvantaged communities, and a minimum of 10% of the available moneys in the fund to projects located within disadvantaged communities. (HSC §39713). AB 857 (Perea) Page 2 of ? 4) Requires moneys from GGRF be used to facilitate the achievement of reductions of GHG emissions in this state consistent with the California Global Warming Solutions Act of 2006, and to the extent feasible complement efforts to improve air quality, and direct investment toward the most disadvantaged communities and households in the state, among other things. (HSC §39712). 5) Requires the State Energy Resources Conservation and Development Commission (CEC) to implement the Alternative and Renewable Fuels and Vehicle Technology Program (ARFVTP) to 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. (HSC §43865 et seq.) 6) Creates the Air Quality Improvement Program (AQIP), to be administered by ARB in consultation with local air districts, to fund air quality improvement projects. (HSC §44274) 7) Establishes certain vehicle and vessel related surcharges and fees, until January 1, 2016, including an $8 fee increase in the smog abatement, a $3 fee increase in the annual vehicle registration fee, a $5 fee increase for special identification plates and a $10-20 fee increase for vessel registration, to fund the AQIP and ARFVT programs, among others. (HSC §44060.5 and Vehicle Code §§9250.1, 9261.1, & 9853.6) 8) Creates the California Clean Truck, Bus, and Off-Road Vehicle and Equipment Technology Program, funded through the GGRF, for the development, demonstration, pre-commercial pilot, and early commercial deployment of zero- and near-zero-emission truck, bus, and off-road vehicle and equipment technologies. Until January 1, 2018, no less than 20% of funding made available for the purposes of this paragraph shall support early commercial deployment of existing zero- and near-zero emission near-zero-emission heavy-duty truck technology. (HSC §39719.2 ) This bill: 1) Appropriates 50% or $100 million annually, whichever is greater, of GGRF funds allocated to the California Clean AB 857 (Perea) Page 3 of ? Truck, Bus, and Off-Road Vehicle and Equipment Technology Program for medium and heavy-duty trucks, to support the commercial deployment of existing zero- and near-zero-emission heavy-duty truck technology that meets or exceeds ARB's optional low oxides of nitrogen (NOx) standard, between January 1, 2018 and January 2, 2023. 2) Beginning in 2018, prohibits a heavy-duty truck with an internal combustion engine receiving Program funds from using a fuel with a carbon intensity of more than 79% of the carbon intensity of diesel, as specified. 3) Authorizes ARB to reduce the maximum fuel carbon intensity in subsequent years if it finds that greater reduction is commercially feasible and the CEC finds that there is sufficient available renewable energy fuel supply and specifies that such a reduction shall apply prospectively to funds awarded. 4) Provides that the above requirement shall not alter or affect the amount of credits or grants for which a low-carbon fuel provider or truck operator is eligible. 5) Beginning January 1, 2018, for purposes of program eligibility, defines a "heavy-duty truck" as one with a gross vehicle weight rating of 26,001 pounds gross vehicle weight rating (GVWR) or more. Background 1) Cap-and-trade auction revenue. ARB has conducted 11 cap-and-trade auctions. The first 10 have generated almost $1.6 billion in proceeds to the state. Several bills in 2012, and one in 2014, provided legislative direction for the expenditure of auction proceeds including the following: SB 535 (de León, Chapter 830, Statutes of 2012) requires that 25% of auction revenue be used to benefit disadvantaged communities and requires that 10% of auction revenue be invested in disadvantaged communities. AB 857 (Perea) Page 4 of ? AB 1532 (J. Pérez, Chapter 807, Statutes of 2012) directs the Department of Finance to develop and periodically update a three-year investment plan that identifies feasible and cost-effective GHG emission reduction investments to be funded with cap-and-trade auction revenues. AB 1532 specifies that GGRF moneys may be allocated to reduce GHG emissions through investments including, but not limited to, development of state-of-the-art systems to move goods and freight, advanced technology vehicles and vehicle infrastructure, advanced biofuels, and low-carbon and efficient public transportation. SB 1018 (Budget Committee, Chapter 39, Statutes of 2012) created the GGRF, into which all auction revenue is to be deposited. The legislation requires that before departments can spend moneys from the GGRF, they must prepare a record specifying: (1) how the expenditures will be used, (2) how the expenditures will further the purposes of AB 32 (Nuñez, Pavley, Chapter 488, Statutes of 2006), (3) how the expenditures will achieve GHG emission reductions, (4) how the department considered other non-GHG-related objectives, and (5) how the department will document the results of the expenditures. SB 862 (Budget Committee, Chapter 36, Statutes of 2014) requires the ARB to develop guidelines on maximizing benefits for disadvantaged communities by agencies administering GGRF funds, and guidance for administering agencies on GHG emission reduction reporting and quantification methods. Legal consideration of cap-and-trade auction revenues. The 2012-13 Budget analysis of cap-and-trade auction revenue by the Legislative Analyst's Office noted that, based on an opinion from the Office of Legislative Counsel, the auction revenues should be considered mitigation fee revenues, and their use requires that a clear nexus exist between an activity for which a mitigation fee is used and the adverse effects related to the activity on which that fee is levied. Therefore, in order for their use to be valid as mitigation fees, revenues from the cap-and-trade auction must be used to mitigate GHG emissions or the harms caused by GHG emissions. AB 857 (Perea) Page 5 of ? In 2012, the California Chamber of Commerce filed a lawsuit against the ARB claiming that cap-and-trade auction revenues constitute illegal tax revenue. In November 2013, the superior court ruling declined to hold the auction a tax, concluding that it is more akin to a regulatory fee. The plaintiffs filed an appeal with the 3rd District Court of Appeal in Sacramento in February of last year. AB 32 auction revenue investment plan. The first three-year investment plan for cap-and-trade auction proceeds, submitted by Department of Finance, in consultation with ARB and other state agencies in May of 2013, identified sustainable communities and clean transportation, clean energy and energy efficiency, and natural resources and waste diversion, as the three key sectors that provide the best opportunities for achieving the legislative goals and supporting the purposes of AB 32. The plan recommended the aforementioned sector receive the largest allocation of funds from the GGRF, but did not specify a monetary amount. Budget allocations. The 2014-15 Budget allocates $832 million in GGRF revenues to a variety of transportation, energy, and resources programs aimed at reducing GHG emissions. Various agencies are in the process of implementing this funding. SB 862 (Committee on Budget and Fiscal Review), a budget trailer bill, established a long-term cap-and-trade expenditure plan by continuously appropriating portions of the funds for designated programs or purposes. The legislation appropriates 25% for the state's high-speed rail project, 20% for affordable housing and sustainable communities grants, 10% to the Transit and Intercity Rail Capital Program, and 5% for low-carbon transit operations. The remaining 40% is available for annual appropriation by the Legislature. Of that 40%, $200 million was appropriated to ARB to implement low carbon transportation programs. 2)NOx and ozone. Smog is formed from the reaction of oxides of nitrogen (NOx) with volatile organic compounds (VOCs) to produce ground-level ozone, or tropospheric ozone. Ozone has a number of negative health effects including irritated respiratory system, reduced lung function, aggravated asthma and inflammation and damage of the lining of the lung. Active AB 857 (Perea) Page 6 of ? children are the group at highest risk from ozone exposure. In addition to negative public health impacts, ozone itself is a powerful SCLP. Under the federal Clean Air Act, the United States Environmental Protection Agency (US EPA) established National Ambient Air Quality Standards (NAAQS) that apply for outdoor air throughout the country. These standards exist for several air pollutants due to their negative impact on public health above specified concentrations, including ozone. ARB has also adopted state ambient air quality standards for various air pollutants that are, in some cases, more stringent than federal standards. Local air districts are required to adopt and enforce rules to achieve and maintain the state and federal ambient air quality standards. Nonattainment areas are regions that do not meet the ambient air quality standard for one of those pollutants. There are several nonattainment designations ranging from concentrations slightly above the standard, termed marginal nonattainment, to extreme nonattainment, where pollution levels far exceed the national standard. To comply with the standards for ozone, local air districts have regulations limiting emissions of NOx and VOCs for stationary sources located in their jurisdiction. These local air district requirements have cut in half the emissions of VOCs and NOx, and significantly reduced ozone concentrations throughout California. On November 25, 2014, the US EPA proposed to strengthen the current 2008 NAAQS for ground-level ozone, based on extensive scientific evidence about ozone's effects on public health and welfare. US EPA's proposal finds that the current level of the standard, 75 parts per billion, is not adequate to protect public health. The San Joaquin and South Coast air basins are both in extreme nonattainment for the 2008 NAAQS for ozone. States with nonattainment areas would have until 2020 to late 2037 to meet the proposed health standard, with attainment dates varying based on the ozone level in the area. AB 857 (Perea) Page 7 of ? 3)Heavy-duty vehicle incentive funding. California has a number of programs to provide funding for low emission, near-zero and zero-emission vehicles to help improve air quality throughout the state, and reduce GHG emissions. a) Carl Moyer Memorial Air Quality Standards Attainment Program (Carl Moyer Program): Existing law establishes the Carl Moyer Program under ARB. This program provides grants through the state's 35 local air quality management and air pollution control districts (air districts) for deployment of engines, equipment, and NOx and PM emission-reduction technologies that are cleaner than required by current laws or regulations. The program, which provides approximately $60 million for projects each year throughout the state, is funded through vehicle registration fee surcharges and tire fees. Currently, the majority of projects for trucks are on-road trucks. The maximum funding for a log truck is $60,000 and the maximum funding for a non-log truck is $45,000. b) Proposition 1B: Highway Safety, Traffic Reduction, Air Quality, and Port Security Bond Act of 2006. Proposition 1B, approved by voters in November 2006, included $1 billion for the Goods Movement Emission Reduction Program, a partnership between ARB and local air districts to reduce air pollution emissions and health risks from freight movement along California's trade corridors. This program has to date provided funding for approximately 12,000 cleaner trucks. For the next funding cycle, ARB proposes to fund trucks in amounts ranging from $10,000 to $200,000 for Class 6 to Class 8. c) AB 118. AB 118 (Núñez, Chapter 750, Statutes of 2007) created the ARFVT program and AQIP. AB 118 provides, upon appropriation by the Legislature, approximately $180 million annually until 2023 for these programs. These funds primarily come from additional fees on vehicle registrations and vessel registrations. i) Air Quality Improvement Program: AQIP, administered by ARB in consultation with local air districts, provides competitive grants to fund projects to improve the air quality impacts of alternative fuels and vehicles, vessels, and equipment technologies. AQIP encompasses AB 857 (Perea) Page 8 of ? several programs, including the following: The Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project (HVIP), administered by ARB and its contractor CALSTART, provides vouchers to California fleet owners to help purchase hybrid and zero-emission trucks and buses. For fiscal year 2015-16, ARB proposes allocating $12 million for this program. The On-Road Heavy-Duty Vehicle Air Quality Loan Program (Truck Loan Assistance Program), administered by ARB and the California Pollution Control Financing Authority, helps small business truckers to secure financing for newer trucks or diesel exhaust retrofits in advance of compliance deadlines for ARB's in-use truck and bus regulation. As of April 30, 2015, about $57 million in Truck Loan Assistance Program funding has been expended to provide about $446 million in financing to small business truckers for the purchase of nearly 7,500 cleaner trucks, exhaust retrofits, and trailers. For fiscal year 2015-16, ARB proposes allocating $15 million for this program. ii) Alternative and Renewable Fuel and Vehicle Technology Program: ARFVTP, administered by CEC, 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. a) Low Carbon Transportation. SB 1204 (Lara, Pavley, Chapter 524, Statutes of 2014) created a new 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. SB 1204 authorizes GGRF funding for this program and requires AB 857 (Perea) Page 9 of ? it to prioritize projects located in disadvantaged communities. The bill specified that, until January 1, 2018, 20% for early commercial deployment of existing zero-and near-zero emission heavy-duty truck technology. ARB's FY 2015-16 AQIP Funding Plan, which the ARB board will vote on at its June 25, 2015, meeting, allocates $148 million in GGRF funds to the SB 1204 Program. The funding plan was approved on July 1, 2015. Pursuant to SB 1204, ARB has created several new program categories to fund the development and deployment of zero and near-zero emission trucks, buses and off-road vehicles. i) Advanced Technology Demonstration Projects, administered by ARB, provide grants to local air districts and other public agencies to fund advanced-technology vehicle, equipment, or emission-control projects that are not yet commercialized. Approximately $60 million is proposed for this program for FY 2015-16, including $30 million for on-road trucks. ii) Zero Emission Truck and Bus Pilots seek to leverage resources, promote efficiencies, and help drive down per vehicle costs via large, location-specific deployments of zero-emission trucks and buses. Eligible project types include zero-emission transit buses, zero-emission school buses, and zero-emission freight/delivery trucks. $45 million for buses and $20 million for trucks is proposed for the 2015-16 fiscal year. iii) Zero Emission Off-Road Freight Equipment Pilot Commercial Deployment Projects provide incentives for zero emission off-road freight equipment to accelerate deployment and drive consumer acceptance in the early stages of commercialization. Eligible off-road zero-emission projects would include forklifts, transport refrigeration units, yard trucks, airport ground support, and cargo handling equipment. The current funding plan proposes $9 million for these projects. iv) Low NOx truck incentives, also under AQIP, provide funding for heavy-duty trucks 14,000 pounds GVWR or greater with engines certified to the lower NOx standards. ARB is proposing an additional incentive for the use of AB 857 (Perea) Page 10 of ? alternative fuels. The FY 2015-16 AQIP Funding Plan allocates $7 million for this program. Comments 1) Purpose of Bill. According to the author, "California continues to suffer from the worst air quality in the nation, contributing to serious health risks including asthma, cancer, birth defects and even premature death. Air pollution affects everyone and remains a public health threat, particularly for those who live in disadvantaged communities near major transportation corridors such as freeways, ports and rail depots. "A recent report by the American Lung Association revealed that the five most ozone-polluted areas are in California; with Los Angeles-Long Beach topping the list, followed by Visalia-Porterville-Hanford, Bakersfield, Fresno-Madera, and Sacramento-Roseville; and the California Environmental Protection Agency tells us that disadvantaged communities in the Central Valley and near our ports suffer significantly from multiple sources of air pollution. While we have made great strides in bettering the state's air, we still have a long way to go. California agencies have documented that the transportation sector is the largest contributor of air pollution, accounting for 80 percent of our smog-forming pollutants and 40 percent of our greenhouse gas emissions. While our car-dependent culture is largely to blame, heavy-duty diesel trucks are the biggest polluters in this sector. Replacing heavy-duty diesel trucks represents the best, most cost effective way to get our cities off the "most polluted" list, and more critically, help the many disadvantaged communities that sit along key goods movement corridors." 2) Low NOx and natural gas. ARB regulations provide for an optional reduced NOx emission standard for on-road heavy-duty engines of 0.02 grams NOx per brake horsepower-hour. This standard is intended to encourage engine manufacturers to introduce new technologies to reduce NOx emissions below the current mandatory on-road heavy-duty diesel engine emission standards for model years 2010 and later, and represents a 90% reduction in NOx from the current NOx standard. The movement of goods and freight is a major contributor to NOx pollution AB 857 (Perea) Page 11 of ? in the state's nonattainment air basins. AB 857 includes a five year set-aside beginning in 2018 for low NOx heavy duty trucks meeting this standard of $100 million per year, or 50%, depending on which is greater, of GGRF moneys appropriated to the California Clean Truck, Bus, and Off-Road Vehicle and Equipment Program established through SB 1204 (Lara, Chapter 524, Statutes of 2014). Currently, no heavy-duty engine has been certified to meet ARB's optional low NOx standard, however the author states that manufacturers report that new technologies will be available in the transportation marketplace within three years that could meet this standard for heavy-duty vehicles using natural gas. 3) $500 million for commercial deployment of low-NOx heavy-duty trucks. The program established through SB 1204 (Lara) is intended to fund the development, demonstration and early commercial deployment of near-zero and zero-emission trucks, buses, off-road vehicles, and equipment in order to accelerate commercial success, and large-scale adoption of these technologies. As noted, AB 857 requires at least $100 million annually for five years, or half a billion dollars total, go toward the commercial deployment of heavy-duty trucks meeting a low-NOx standard of 0.02 grams per brake horsepower-hour, and where heavy duty is defined in the bill as greater than 26,000 pounds GVWR. As total proposed GGRF moneys for the 2015-16 fiscal year is $148 million, $100 million represents two thirds of the funding for the entire SB 1204 program to fund all other non-heavy-duty truck deployment projects, including demonstration projects, freight equipment, and pilot deployments of near-zero and zero-emission buses, off-road vehicles and equipment. The result is that, after allocation to heavy-duty trucks, there will be a much smaller pot of money to divvy up among all the other projects, ensuring significantly reduced investments in every other category, with some project categories possibly eliminated from funding. Although low-NOx heavy duty trucks represent an important cleaner technology investment in the near term, allocating two-thirds of the AB 857 (Perea) Page 12 of ? funding squeezes out every other investment and may stifle advancement in those areas, further pushing progress toward commercial deployment of those near-zero and zero-emission technologies further off into the future. With so much of the funding directed to trucks, and of that category, only the heaviest trucks (Class 7 and 8 with weights over 26,000 pounds GVWR), this bill seems to work counter to the goals of SB 1204 to create a comprehensive program to advance near-zero and zero-emission medium and heavy duty vehicles, including medium-duty trucks, busses, and other off-road vehicles. Additionally, by directing such a large portion of program funds to deployment of Class 7 and 8 trucks that meet the optional low NOx standard, this bill effectively removes incentive funds from technological development of medium-duty trucks. According to ARB, advanced technologies and initial deployments typically begin in the lower weight classes (14,001-26,000 pounds GVWR) before moving to heavier weight classes. For example, approximately 68% of all HVIP vouchers have gone to trucks that are 26,000 pounds GVWR or less. So in addition to stagnating other near-zero and zero-emission vehicle and equipment types, heavy-duty truck technology could also stall at the low-NOx natural gas stage, instead of continuing to push for a near-zero or zero-emission future. For this reason, an amendment is needed to expand the definition of heavy-duty to weight classes of 14,000 pounds GVWR and greater. 4) Other funding for low-NOx vehicles. As noted in the background, the state has multiple other programs that could provide incentive funds for the purchase of low-NOx heavy duty natural gas trucks, such as Proposition 1b funds, the Carl Moyer Program, AB 118's Alternative and Renewable Fuel and Vehicle Technology Program administered by CEC, and ARB's Truck Loan Assistance Program. In light of this, it is not clear why such a large fraction of the funding is warranted for a single technology and vehicle class from the SB 1204 program. 5) In three years' time. The set-aside in AB 857 begins in 2018. Is it necessary to guarantee half a billion dollars for a AB 857 (Perea) Page 13 of ? technology that has yet to be certified to meet the low-NOx standard? In addition, since there are not yet any engines available that have been certified to the low NOx standard, it is difficult to predict what the demand for these vehicles will be in 2018 to 2023. Currently, ARB has the ability to determine, on an annual basis, how to apportion funds based on promising technologies, technological developments, market conditions, and a variety of other factors. This flexibility allows appropriations to vary from year to year if market forces change or technological advances occur. Is it prudent to remove this discretion at the agency level to make these funding determinations? If the Legislature instead decides that a set-aside for this technology is warranted, is it necessary to establish it now in statute when the technology is not available and has not been demonstrated? Would it be more prudent to wait until that time to establish if the vehicles are ready for deployment? 6) GHG emissions reductions. Moneys for low NOx heavy-duty trucks required by this bill would be funded through the GGRF, and as such, are required to achieve GHG emissions reduction. Proponents state that there are significant GHG emission reductions when switching from diesel fueled trucks, to natural gas. However, as previously noted, AB 857 potentially stifles development of other zero-emission transformative technologies, and in this way, may not be structured to allow for the prioritization of projects or funding categories in order to maximally reduce GHG emissions. In addition to the fact that stifled innovation may hamper GHG emission reduction efforts in the long term, there are many other vehicles types such as medium-heavy-duty trucks, including drayage trucks used at ports and to transport goods to inland warehouses, which are abundant and contribute significantly to GHG emissions in the state, but that are not included in the $100 million set-aside of funds. Where is the natural gas coming from? California imports 90% of its natural gas from out of state. And although ARB's life cycle analysis should incorporate all aspects of production, and delivery through their carbon intensity accounting, recent scientific reports indicate that there have been large underestimates of methane emissions, the primary component of natural gas (where methane has 20 to 30 times the global AB 857 (Perea) Page 14 of ? warming potential of CO2) throughout the United States. These initial studies imply that estimates of the carbon intensity of natural gas imports may need to be reevaluated to provide a more accurate picture of the actual climate impacts from a transportation system that continues to rely more heavily on natural gas. Low-NOx natural gas engines and GHG emissions. The low NOx heavy-duty trucks that would quality for the funds allocated in AB 857, although a large technological advancement in terms of reduced NOx, do not represent gains over conventional natural gas trucks in terms of GHG emission reductions. Renewable natural gas. Renewable gas, or biomethane, is purified biogas, which is the gaseous product of anaerobic digestion and is comprised primarily of methane and carbon dioxide. Biomethane is considered a "low-carbon" fuel because its combustion destroys methane, a potent climate-warming gas. In addition, biomethane can be used to displace the use of fossil fuels, such as natural gas, thereby further decreasing its carbon intensity. Assembly Natural Resources amendment. In order to ensure more significant GHG emission reductions for the large GGRF investments toward low-NOx heavy duty trucks required under AB 857, an amendment was taken in the Assembly Natural Resources Committee to require that, to be eligible for funding, these trucks use at least 10% renewable fuel. In an attempt to express this value in a way that accounts for the carbon life-cycle of fuels, this provision was later amended by the author to specify a carbon intensity value of no greater than 79% for the fuel as compared to diesel, in order to qualify for funding. It is unclear what assumptions went into this calculation and, therefore, what level of renewable fuel on average would be required by a carbon intensity of 79% of conventional diesel. Additionally, because carbon intensities are dependent on the specific life-cycle for each fuel, it is not clear how ARB would implement this provision and verify a carbon intensity requirement for individual trucks or fleets. Assuming a carbon intensity threshold of 79% does accurately represent a 10% renewable gas requirement, this value is a AB 857 (Perea) Page 15 of ? still a very low bar for renewable fuel, considering the significant growth in the production of renewable fuel used as a transportation fuel in the last few years. According to ARB, in 2012, only about 2% of natural gas used as a transportation fuel was renewable. In 2013, the percentage increased five-fold to 10%. In 2014, the amount more than doubled to 21%, but the last quarter of 2014 saw 42% renewable and the first quarter of 2015 was 60%. In order to justify the use of GGRF moneys with a meaningful renewable fuel requirement that recognizes the substantial growth in renewable gas over the last few years, an amendment is needed to1) set the renewable fuel requirement at 50%, or the equivalent carbon intensity value compared to conventional diesel, as determined by ARB, and 2) provide ARB the discretion to increase or lower the percentage based on technological feasibility and supply considerations. 7) Additional amendments from Assembly Natural Resources. Amendments taken in the Assembly Natural Resources Committee required the owner or responsible official of a heavy-duty truck that received incentive funding under AB 857 to document the required renewable content by volume of fuel dispensed, as determined by ARB. Author's amendments have since struck this requirement. An amendment is needed to restore that language to honor the agreement made in that committee. 8) Piece by piece. GGRF investments must facilitate the achievement of GHG emissions reductions. However, after that requirement is fulfilled, there are a number of other policy goals that should be considered, including benefits to environmental quality, resource protection, public health and the economy, as well as benefits to disadvantaged communities. And although the fund is growing, it is still a limited source of revenue. In order to create an optimized investment strategy from GGRF moneys, proposals should not be considered in isolation, but be assessed in aggregate to determine what suite of measures best meets the requirements of the fund, uses resources most efficiently, and maximizes policy objectives. AB 857 (Perea) Page 16 of ? As budget discussions on a cap-and-trade investment strategy have been pushed to later this session, an opportunity exists to have a comprehensive discussion on the universe of GGRF proposals currently in the Legislature, during budget negotiations this summer. If the Legislature feels that AB 857 is an appropriate expenditure of GGRF moneys, then this measure should also be considered through the budget process for cap-and-trade expenditures, along with all other measures proposing to expend, or authorize for expenditure, GGRF moneys. Related/Prior Legislation SB 1204 (Lara, Pavley, Chapter 524, Statutes of 2014) established the California Clean Truck, Bus, Off-Road Vehicle and Equipment Program, funded through the GGRF, for the development and deployment of near-zero and zero-emission truck, bus, off-road and equipment technologies. DOUBLE REFERRAL: This measure was heard in Senate Transportation and Housing Committee on July 7, 2015, and passed out of committee with a vote of 8-1. SOURCE: Southern California Gas Company SUPPORT: Agile Sourcing Partners Agility Fuel Systems, Inc. Alameda Construction Services, Inc. Alhambra Chamber of Commerce A.M. Ortega, Inc. Anaheim Chamber of Commerce Antelope Valley Air Quality Management District Antelope Valley African American Chamber of Commerce Antelope Valley Board of Trade Antelope Valley Boys and Girls Club ARB, Inc. Arborland Montessori School AB 857 (Perea) Page 17 of ? 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 Black Chamber of Orange County Boys & Girls Club of Greater Ventura Boys and Girls Clubs of Greater Redlands-Riverside of San Bernardino & Riverside Counties Boys & Girls Club of Pomona Valley Boys Republic BREATHE California of Los Angeles County Brotherhood Crusade Building Industry Association of Southern California, Inc. Burbank Chamber of Commerce California Black Chamber - Council of Chambers California Center for Public Policy California Food Policy Council California Natural Gas Vehicle Coalition California Trucking Association Cambodia Town, Inc. Cars are Basic Casa 0101 Casa Esperanza Central City Association of Los Angeles Cesar Chavez Foundation Charter Oak Unified School District City of Atascadero City of Beaumont City of Buena Park City of Commerce City of Compton City of Downey City of El Monte City of Fontana City of Fountain Valley City of Goleta City of Hanford City of Huntington Beach City of Lake Elsinore City of Los Angeles, Council Member Felipe Fuentes AB 857 (Perea) Page 18 of ? City of Lynwood City of Maywood City of McFarland City of Monterey Park City of Palm Desert City of Perris City of Pico Rivera City of Pomona City of Riverside City of San Fernando City of South Gate City of Tulare City of Westminster Clean Air Now Clean Energy CleanTech OC Clinica Msr. Oscar A. Romero Community Health Centers CM Distributors, Inc. Coachella Valley Economic Partnership Commerce Industrial Council Chamber of Commerce Congress of California Seniors COPE Health Solutions Councilmember Fernando Vasquez, City of Downey County of Kings County of San Bernardino County of Santa Barbara County of Tulare Culver City Chamber of Commerce Cummins Westport Inc. Dana Point Chamber of Commerce Desert Healthcare District Desert Valleys Builders Association Discovery Cube Science Center Dignity Health Duarte Chamber of Commerce Duarte Unified School District Economic Development Collaborative - Ventura County Economic Development Corporation serving Tulare County Economic Vitality Corporation of San Luis Obispo EDCO El Concilio Family Services El Monte/South El Monte Chamber of Commerce Federacion de Clubes Jaliscienses Del Sur de California Foothill Workforce Investment Board AB 857 (Perea) Page 19 of ? Fountain Valley Chamber of Commerce Fullerton Chamber of Commerce G&C Equipment Corporation Gardena Valley Chamber of Commerce Gateway Chambers Alliance 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 San Fernando Valley Chamber of Commerce Greater West Covina Business Association GreenFIX America, LLC Hanford Chamber of Commerce Harvest Power California, LLC Hemet San Jacinto Chamber of Commerce Herman Weissker, Inc. Hispanas Organized for Political Equality Huntington Beach Chamber of Commerce Industry Manufacturers Council Infinity Business Solutions Inglewood/Airport Area Chamber of Commerce Inland Action Inland Empire Economic Partnership Jabo Industries, LLC Kern County Board of Supervisors Kern County Superintendent of Schools Kern Economic Development Foundation Kheir Clinic Laguna Nigel Chamber of Commerce La Verne Chamber of Commerce League of California Cities, Orange County Division Lincoln Training Center Los Angeles Area Chamber of Commerce Los Angeles Business Council Los Angeles County Business Federation Los Angeles Opportunities Industrialization Center Lyles Utility Construction, LLC Madera County Board of Supervisors Meals on Wheels Industry, Inc. Mojave Desert Air Quality Management District Montebello Unified School District Board of Education Moreno Valley Black Chamber of Commerce Mothers of East Los Angeles AB 857 (Perea) Page 20 of ? Mujeres del la Tierra Neal Construction Services National Construction and Development, Inc. National Congress of Black Women, Inc., Los Angeles Chapter North Orange County Legislative Alliance North of the River Chamber of Commerce Oceanside Chamber of Commerce Ojai Valley Chamber of Commerce Orange County Business Council Orange County Hispanic Chamber of Commerce Orange County Taxpayers Association Orange County Transportation Authority Otay Mesa Chamber of Commerce Our Weekly Oxnard Chamber of Commerce Pacific Asian Consortium in Employment Pacific Asian Counseling Services Palm Desert Area Chamber of Commerce Pasadena Chamber of Commerce, Board of Directors Pinnacle Petroleum, Inc. Pomona Valley Hospital Medical Center Placita Santa Fe Merchants Association Plaza Community Services Proteus, Inc. ReFuel by Atlas Disposal Industries Regional Chamber of Commerce - San Gabriel Valley Riverside National Association for the Advancement of Colored People Rosemead Chamber of Commerce Rowland Heights Community Coordinating Council Ryder Rowland Unified School District Salvadoran American Leadership and Educational Fund Salvation Army L.A. Red Shield Youth and Community Center San Diego East County Chamber of Commerce San Diego Gas & Electric (SDG&E) San Diego Port Tenants Association San Gabriel Valley Council of Governments San Gabriel Valley Regional Chamber of Commerce San Joaquin Valley Air Districts San Joaquin Valley Air Pollution Control District San Joaquin Valley Regional Transportation Planning Agencies Santa Ana Chamber of Commerce Santa Clarita Valley Chamber of Commerce AB 857 (Perea) Page 21 of ? Santa Maria Valley Chamber of Commerce Santa Monica Chamber of Commerce S E Pipe Line Construction Co. Sempra Energy Utilities Sequoia Riverlands Trust Simi Valley Chamber of Commerce South Orange County Economic Coalition Southeast Community Development Corporation Southern California Gas Company (SoCalGas) Southwest California Legislative Council S.W. Administrators, Inc. The Coalition for Renewable Natural Gas TELACU (The East Los Angeles Community Union) The Placita Santa Fe Merchants Association The Salvation Army The Valley Economic Alliance Torrance Area Chamber of Commerce Uchida Pipe & Industrial Products United Chambers of Commerce, San Fernando Valley & Region University of California, Riverside Center for Sustainable Suburban Development UPS Utility Partners of America Valley Family Center Valley Presbyterian Hospital Valley Vista Services, Inc. Venice Chamber of Commerce Vobecky Enterprises, Inc. Waste Mangement Western Riverside Council of Governments (WRCOG) West Valley Boys & Girls Club YMCA (Anaheim) 3G CNG Corporation 99 Cents Only Stores, LLC OPPOSITION: Alameda-Contra Costa Transit District American Lung Association of California BAE Systems, Inc. BYD Motors, Inc. Center for Transportation and the Environment Clean Power Campaign Complete Coach Works AB 857 (Perea) Page 22 of ? Environment California National Parks Conservation Association Natural Resources Defense Council Nuvera Fuel Cells, LLC Orange EV Physicians for Social Responsibility - Los Angeles Chapter Regional Asthma Management & Prevention Sierra Club California The Greenling Institute Union of Concerned Scientists US Hybrid Valley Improvement Projects Wireless Advanced Vehicle Electrification (WAVE) XL Hybrids -- END --