BILL ANALYSIS                                                                                                                                                                                                    Ó

                                                                      AB 1176

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          1176 (Perea)

          As Amended  June 1, 2015

          2/3 vote.  Urgency

          |Committee       |Votes |Ayes                 |Noes                 |
          |                |      |                     |                     |
          |                |      |                     |                     |
          |Transportation  |15-1  |Frazier, Achadjian,  |Baker                |
          |                |      |Bloom, Chu, Daly,    |                     |
          |                |      |Dodd,                |                     |
          |                |      |                     |                     |
          |                |      |                     |                     |
          |                |      |Eduardo Garcia,      |                     |
          |                |      |Gomez, Kim, Linder,  |                     |
          |                |      |Medina, Melendez,    |                     |
          |                |      |Nazarian, O'Donnell, |                     |
          |                |      |Santiago             |                     |
          |                |      |                     |                     |
          |Appropriations  |13-0  |Gomez, Bigelow,      |                     |
          |                |      |Bonta, Calderon,     |                     |
          |                |      |Daly, Eggman,        |                     |
          |                |      |Eduardo Garcia,      |                     |
          |                |      |Gordon, Holden,      |                     |
          |                |      |Quirk, Rendon,       |                     |
          |                |      |Weber, Wood          |                     |
          |                |      |                     |                     |
          |                |      |                     |                     |


                                                                      AB 1176

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          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 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 (Núñez), 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  


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               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)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 disadvantaged communities or is  
            located within a disadvantaged community.

          9)Makes related, technical amendments.

          10)Includes an urgency clause.

          FISCAL EFFECT:  According to the Assembly Appropriations  
          Committee, ongoing CEC administrative costs of around $400,000 for  
          three positions to drafting program guidelines, implementing a  
          rulemaking, reviewing, awarding and monitoring grants, and working  
          with grantees and recipient communities.


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          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 have targeted at  
          increasing the use of renewable fuels including.  Specifically, AB  
          1007 (Pavley), Chapter 371, Statutes of 2005, required ARB and the  
          Commission to develop a plan to increase alternative fuels use in  
          California and AB 118 (Núñez), Chapter 750, Statutes of 2007,  
          established the Air Quality Improvement program, administered by  
          ARB in consultation with local air districts, to provide  
          competitive grants to fund air quality improvement projects such  
          as the development and deployment of alternative and renewable  
          fuels and advanced transportation technologies.   

           The Low Carbon Fuel Standard (LCFS), administered by ARB,  
          established in 2007 through Exectuive Order S-01-07, 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. 


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          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 this  
          bill, 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.  The sponsor contends that the only thing holding  
          back widespread use of low-carbon diesel is lack of available  
          infrastructure.  Specifically, he contends 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 this bill 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  
          León), Chapter 830, Statutes of 2012.  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  


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          facilities).  The sponsor notes that these 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, created by  
          this bill, 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.  

          Please see the policy committee analysis for full discussion of  
                          this bill.

          Analysis Prepared by:                                               
                          Victoria Alvarez / TRANS. / (916) 319-2093  FN: