BILL ANALYSIS Ó
AB 1176
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Date of Hearing: April 27, 2015
ASSEMBLY COMMITTEE ON TRANSPORTATION
Jim Frazier, Chair
AB 1176
(Perea) - As Amended April 23, 2015
SUBJECT: Vehicular air pollution
SUMMARY: Creates the Advanced Low-Carbon Diesel Fuels Access
Program, administered by the State Energy Resources Conservation
and Development Commission (Commission) to fund advanced
low-carbon diesel fueling infrastructure projects in
disadvantaged communities. Specifically, this bill:
1)Makes declarations regarding the disproportional air quality
impacts experienced by disadvantaged communities as a result
of heavy freight traffic moving along major transportation
corridors; and states the Legislature's intent to direct
resources toward those communities to provide economic and
health benefits.
2)Defines a variety of terms.
3)Creates the Advanced Low-Carbon Diesel Fuels Access Program
(Program) to be administered by the Commission, in
consultation with the Air Resources Board (ARB) to reduce
greenhouse gas (GHG) emissions of diesel motor vehicles by
providing funding assistance for projects that expand advanced
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low-carbon diesel fueling infrastructure in disadvantaged
communities.
4)Provides that the Program be funded from the Greenhouse Gas
Reduction Fund (GGRF), established by AB 32 (Nunez), Chapter
488, Statutes of 2006, upon appropriation by the Legislature.
5)Requires the Commission, on or before March 1, 2016, to
complete the following:
a) Develop implementation guidelines for the Program that
ensure focus on communities with the greatest impact from
vehicular air pollution; and,
b) Select the disadvantaged communities to receive Program
funds, in consultation with the California Environmental
Protection Agency (CalEPA).
6)Requires that the Commission give priority to projects that
provide quantifiable benefits to disadvantaged communities,
demonstrate co- or multi-benefits, leverage additional monies,
provide immediate benefits, and include marketing, education
and outreach strategies designed to increase effectiveness.
7)Prohibits the Program from being used to fund projects
undertaken pursuant to state, federal, or local laws.
8)Requires the Commission and ARB to allocate at least 50% of
available program funds to projects that provide direct
benefits to disadvantaged communities or that serve or are
located within disadvantaged communities.
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9) Authorizes the Commission to reprioritize Alternative and
Renewable Fuel and Vehicle Technology Program (ARFVTP)
contracts and extend them by two years if Program requirements
are met and if the project directly benefits a disadvantaged
communities or is located within a disadvantaged community.
10)Appropriates $35 million from the GGRF to the Commission for
the purpose of implementing the Advanced Low-Carbon Diesel
Fuels Access Program.
11)Makes related, technical amendments.
12)Includes an urgency clause.
EXISTING LAW:
1)Requires ARB, pursuant to AB 32, to develop a plan of how to
reduce statewide 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 ARFVTP, pursuant to AB 118 (Nunez), Chapter 750,
Statutes of 2007, and requires the Commission to fund projects
that develop and deploy technologies and alternative and
renewable fuels in the marketplace to help meet the state's
climate change policies.
4)Creates the Air Quality Improvement Program (AQIP),
administered by ARB and the Commission, in consultation with
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local air districts, to fund specified air quality improvement
projects.
5)Created the Low Carbon Fuel Standard (LCFS), pursuant to
Executive Order (EO) S-01-07, which calls for a of a 10%
reduction in the carbon intensity of California's
transportation fuels by 2020 using a market-based approach.
FISCAL EFFECT: Unknown
COMMENTS: Approximately 40% of emissions generated in
California can be attributed to the transportation sector. As a
result, California is making a concerted effort to increase the
use of alternative fuels to help reduce GHG emissions and other
toxic air pollutants associated with conventional
petroleum-based fuels. A number of legislative measures and
regulations are targeted at increasing the use of renewable
fuels including AB 1007 (Pavley), Chapter 371, Statutes of 2005,
which required ARB and the Commission to develop a plan to
increase alternative fuels use in California.
Subsequent legislation, AB 118, established AQIP which is
administered by ARB in consultation with local air districts,
and funded through various fees and surcharges on vehicles.
AQIP provides competitive grants to fund projects that improve
air quality and encompasses programs such as the Hybrid and
Zero-Emission Truck and Bus Voucher Incentive Program, 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, the development,
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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.
The LCFS, administered by ARB, was established in 2007 through
EO S-01-07. The LCFS uses a market-based, cap and trade,
approach to lowering the GHG emissions from petroleum-based
transportation fuels. The LCFS requires producers of
petroleum-based fuels to reduce the carbon intensity of their
products beginning with a 0.25% in 2011 and culminating in a 10%
reduction in 2020. Petroleum importers, refiners, and
wholesalers can either develop their own low carbon fuel
products or buy LCFS credits from other companies that develop
and sell low carbon fuel alternative fuels, such as biofuels,
electricity, natural gas, and hydrogen.
According to the author, the top 25% of disadvantaged
communities are located in the San Joaquin Valley and these
communities suffer from some of the poorest air quality in the
state, oftentimes as a direct result of heavy freight traffic
that moves along the nearby Interstate-5 (I-5) and State Route
(SR) 99 corridors. The author also points out that other
disadvantaged communities experiencing poor air quality as a
result of freight movement also lie along the I-710 and SR 60
corridors near the Ports of Los Angeles and Long Beach.
The author believes that these communities could realize
immediate, significant reductions in GHG and criteria pollutant
emissions if the vehicles using these freight corridors had
ready access to low-carbon fueling infrastructure. The sponsor
of AB 1176, Propel Fuels, indicates that many low-carbon fuel
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options are available to consumers, often at lower price points
than conventional diesel, but due to lack of available
alternative fueling infrastructure, these low-carbon diesel
options are underutilized. The sponsor contends that the only
thing holding back widespread use of low-carbon diesel is lack
of available infrastructure and he notes that once low-carbon
fuel use is more widespread, there will be immediate GHG
reductions and commensurate air quality benefits. To
substantiate this contention, the sponsor points to studies
showing that renewable diesel can achieve up to 70% GHG
reductions when compared to conventional diesel use.
To make these low-carbon fuels more readily available along key
freight corridors in and near disadvantaged communities, the
author has introduced AB 1176 which would create a program to
fund the installation of low-carbon fueling stations.
Specifically, low-carbon diesel fueling infrastructure would be
located in disadvantaged communities that are disproportionately
impacted by poor air quality, selected using the CalEnviroScreen
census tract information created by CalEPA pursuant to SB 535
(De Leon), Chapter 830, Statutes of 2013. The alternative
fueling stations would be located near conventional fueling
stations and be available to the public.
Despite being less costly and resulting in fewer emissions, the
sponsor contends that low-carbon diesel is not widely available
to consumers because existing fueling stations are under
long-term contracts with fuel producers to dispense
conventional, contracted fuels and these products utilize all of
the station's fueling storage and dispensing infrastructure
(tanks and dispensing facilities). The sponsor notes that these
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contractual arrangements have made it difficult for low-carbon
fuels to "break into" the conventional fueling marketplace.
The Advanced Low-Carbon Diesel Fuels Access Program would
provide funding to allow for the installation of alternative
low-carbon fueling infrastructure (tanks, pumps, fuel lines,
etc.) at or near conventional fueling stations along major
freight corridors thereby increasing consumer options for its
use.
Writing in support of AB 1176, the Coalition for Clean Air,
states that AB 1176 would help facilitate the deployment of
low-carbon, liquid fueling infrastructure where the availability
of low-carbon fuels is badly needed. The sponsor, also writing
in support, notes that targeting investments on low-carbon fuel
infrastructure is disadvantaged communities is a cost-effective
and environmental impactful way to provide immediate and
substantial reductions of GHG emissions and associated
co-benefits.
Related legislation: AB 857 (Perea), re-establishes, after
2018, 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. AB 857 passed
out of this committee on April 13, 2015, with a 16-0 vote and is
scheduled to be heard in the Assembly Natural Resources
Committee on April 27, 2015.
Previous legislation: 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
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sale of alternative fuels and vehicle technologies, as well as
air emissions reduction efforts.
SB 535 (De Leon), Chapter 830, Statutes of 2013, required that a
minimum of 25% of the available moneys in the GGRF go to
projects that provide benefits to identified disadvantaged
communities and that a minimum of 10% of the available moneys in
the fund to projects located within identified disadvantaged
communities.
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.
AB 1007 (Pavley), Chapter 371, Statutes of 2005, required ARB
and the Commission to develop a plan to increase alternative
fuels use in California.
REGISTERED SUPPORT / OPPOSITION:
Support
AB 1176
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Propel Fuels (Sponsor)
Opposition
California Chamber of Commerce
Analysis Prepared by:Victoria Alvarez / TRANS. / (916) 319-2093