BILL ANALYSIS                                                                                                                                                                                                    



                                                                    AB 1176


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          Date of Hearing:  May 13, 2015


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                                 Jimmy Gomez, Chair


          AB  
          1176 (Perea) - As Amended April 23, 2015


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          Urgency:  Yes State Mandated Local Program:  NoReimbursable:  No


          SUMMARY:


          This bill creates the Advanced Low-Carbon Diesel Fuels Access  
          Program, to be administered by the California Energy Commission  
          (CEC), in consultation with the Air Resources Board (ARB), to  
          reduce greenhouse gas (GHG) emissions of diesel motor vehicles  








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          by providing funding assistance for projects that expand  
          advanced low-carbon diesel fueling infrastructure in  
          disadvantaged communities. Specifically, this bill: 


          1)Provides that the program be funded, upon appropriation by the  
            Legislature, from the Greenhouse Gas Reduction Fund (GGRF),  
            established by AB 32 of 2006, and appropriates $35 million  
            from the GGRF for the program.


          2)Requires the CEC, by March 1, 2016, to develop implementation  
            guidelines for the program that ensure focus on communities  
            with the greatest impact from vehicular air pollution, and  
            select the disadvantaged communities to receive program funds,  
            in consultation with the California Environmental Protection  
            Agency (CalEPA).


          3)Requires that the commission give priority to projects that  
            provide quantifiable benefits to disadvantaged communities and  
            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.


          4)Prohibits program funds to be used for projects that are  
            already required to be undertaken pursuant to state, federal,  
            or local laws.


          FISCAL EFFECT:


          1)One-time $35 million special fund appropriation. [GGRF]


          2)Ongoing CEC administrative costs of around $400,000 for three  








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            positions to drafting program guidelines, implementing a  
            rulemaking, reviewing, awarding and monitoring grants, and  
            working with grantees and recipient communities. [GGRF]


          COMMENTS:


          1)Background and Purpose. 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  
            notes that other disadvantaged communities experiencing poor  
            air quality as a result of freight movement 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 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. To make these low-carbon fuels more readily  
            available along key freight corridors in and near  
            disadvantaged communities, the Advanced Low-Carbon Diesel  
            Fuels Access Program would provide funding 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.









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          2)Program Funding. The program is proposed to be funded from  
            GGRF, which receives its revenues from cap and trade auctions  
            pursuant to AB 32. Sixty percent of these revenues are  
            continuously appropriated for specific purposes. Through  
            2015-16, the remaining 40% are available for appropriation by  
            the Legislature for investments in programs that include  
            low-carbon transportation, energy efficiency and renewable  
            energy, and natural resources and waste diversion. The  
            Governor's January budget proposal assumed $1 billion in  
            cap-and-trade revenues in 2015-16. The Legislative Analyst's  
            Office predicts these revenues will be considerably higher.



          3)Prior Legislation. 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 benefitting identified  
            disadvantaged communities, and that a minimum of 10% of the  
            available moneys go to projects located within identified  
            disadvantaged communities.



          Analysis Prepared by:Chuck Nicol / APPR. / (916)  
          319-2081


















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