BILL ANALYSIS Ó
AB 1657
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Date of Hearing: April 4, 2016
ASSEMBLY COMMITTEE ON NATURAL RESOURCES
Das Williams, Chair
AB 1657
(O'Donnell) - As Introduced January 13, 2016
SUBJECT: Air pollution: public ports and intermodal terminals
SUMMARY: Establishes the Zero- and Near-Zero-Emission
Intermodal Terminals Program and the Port Building and Lighting
Efficiency Program to fund projects to reduce emissions and
increase energy efficiency from freight and public port
operations.
EXISTING LAW:
1)Requires the Air Resources Board (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.
2)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
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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.
3)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.
4)Requires the investment plan to allocate (1) a minimum of 25%
of the available moneys in the GGRF to projects that provide
benefits to identified disadvantaged communities, and (2) a
minimum of 10% of the available moneys in the GGRF to projects
located within identified disadvantaged communities [SB 535
(De Leon), Chapter 830, Statutes of 2012].
5)Establishes the Clean Truck, Bus, and Off-Road Vehicle and
Equipment Technology Program to use GGRF funds for
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 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 [SB 1204 (Lara), Chapter 524,
Statutes of 2014].
THIS BILL:
1)Establishes the Zero- and Near-Zero-Emission Intermodal
Terminals Program, administered by ARB, to fund equipment
upgrades and investments at intermodal terminals to help
transition the state's freight system to be zero-emission and
near-zero-emission operations.
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a) Requires eligible projects to include:
i. The early deployment of zero-emission and
near-zero-emission equipment that handles the
transfer of cargo at intermodal terminals.
ii. The installation of infrastructure
necessary for the deployment of zero-emission and
near-zero-emission equipment, including fueling
infrastructure at intermodal terminals.
iii. Other projects that facilitate the
transition of cargo handling equipment to
zero-emission and near-zero-emission equipment.
b) Requires ARB to adopt program guidelines that do all
of the following:
i. Are consistent with AB 32, AB 1532 and SB
535.
ii. Include baseline equipment eligibility
with respect to the types of equipment that will
satisfy the zero-emission and near-zero-emission
requirement.
iii. Establish limits on award amounts so that
no one project or entity receives more than 50% of
the program funding.
c) Requires ARB, in allocating funds, to consider all
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of the following:
i. The impact of the investment on freight
system efficiency.
ii. The degree to which the investment
facilitates transition of the freight system to
zero- or near-zero emissions.
iii. The impact on the cost and
competitiveness of the state's freight sector.
iv. The reduction of GHG.
d) Defines "intermodal terminal," by reference to the
California Freight Mobility Plan, as a location where
different transportation modes and networks connect.
2)Establishes the Port Building and Lighting Efficiency Program,
administered by the California Energy Commission (CEC), to
fund energy efficiency upgrades and investments at public
ports that help reduce electrical load and increase on-site
renewable generation.
a) Requires eligible projects to include:
i. The installation of renewable
technologies at marine terminals and at warehouses
and other freight facilities at public ports.
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ii. The replacement of conventional lighting
at public ports.
iii. The implementation of energy efficiency
measures that reduce grid-based energy demand from
operations at public ports.
iv. Other projects that add to the
electrification of public ports and reduce GHG.
b) Requires the CEC to adopt program guidelines that
are consistent with AB 32.
c) Requires a public port to adopt, in consultation
with its electric utility, an energy plan that meets all
of the following criteria:
i. Is reviewed and approved by the CEC.
ii. Adheres to the state's preferred energy
loading order and requires benchmarking for energy
retrofit projects and the reporting of measurable
energy savings.
iii. Requires the project applicant to
demonstrate that the project will achieve a
reduction in GHG.
iv. Requires the CEC, in prioritizing
projects for awarding funding, to consider the
extent to which a project would reduce GHG emissions
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and provide environmental and public health
co-benefits, including improved air and water
quality.
3)Specifies that moneys from the GGRF shall be available, upon
appropriation by the Legislature, to implement both programs.
4)Is an urgency measure.
FISCAL EFFECT: Unknown
COMMENTS:
1)Existing GGRF funding and programs. The 2014-15 Budget Act
allocated GGRF revenues for the 2014-15 fiscal year and
established a long-term plan for the allocation of GGRF
revenues beginning in fiscal year 2015-16. Thirty-five
percent of GGRF is continuously appropriated for investments
in transit, affordable housing, and sustainable communities.
Twenty-five percent is continuously appropriated to continue
the construction of the high-speed rail project. The
remaining 40% is subject to annual appropriation by the
Legislature for investments in programs that include
low-carbon transportation, energy efficiency and renewable
energy, and natural resources and waste diversion. An
expenditure plan for the 40% was not included in the 2015-16
Budget Act, with the exception of $227 million appropriated to
continue funding for specified existing programs. The
remaining 2015-16 revenues, along with 2016-17 revenues, are
available for appropriation this year.
The 2016 Annual Report of Cap and Trade Auction Proceeds
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includes an analysis of funds spent within and benefiting
disadvantaged communities, excluding high speed rail spending.
According to the report, 39% of expenditures were for
projects located within disadvantaged communities and 51% of
the overall funding benefited disadvantaged communities.
Listed below are the major GGRF program areas, administering
agency, and funding to date:
a) Transportation and Sustainable Communities
i) High Speed Rail, High Speed Rail Authority
(Authority), $750 million
ii) Transit and Intercity Rail Capital Program,
Transportation Agency, $225 million
iii) Low Carbon Transit Operations Program, Department of
Transportation (Caltrans), $125 million
iv) Affordable Housing and Sustainable Communities
Program, Strategic Growth Council (SGC), $530 million
v) Low Carbon Transportation, ARB, $325 million
b) Clean Energy and Energy Efficiency
i) Low-Income Weatherization Program, Community
Services and Development (CSD), $154 million
ii) Energy Efficiency in Public Buildings, CEC, $20
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million
iii) Agricultural Energy and Operational Efficiency,
Department of Food and Agriculture (CDFA), $75 million
iv) Water-Energy Efficiency, Department of Water
Resources (DWR), $75 million
c) Natural Resources and Waste Diversion
i) Wetlands and Watershed Restoration, Department of
Fish and Wildlife (DFW), $27 million
ii) Urban Forestry, Forest Health Restoration, and
Reforestation, Department of Forestry and Fire Protection
(CAL FIRE), $42 million
iii) Waste Diversion, Department of Resources Recycling
and Recovery (CalRecycle), $31 million
The Governor's 2016-17 Budget proposes just under $3.1 billion
in expenditures:
a) Continuous Appropriations
i) High Speed Rail, Authority, $500 million
ii) Low Carbon Transit Operations, State Transit
Assistance, $100 million
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iii) Transit and Intercity Rail Capital Program,
Transportation Agency, $200 million
iv) Affordable Housing and Sustainable Communities
Program, SGC, $400 million
b) Fifty Percent Reduction in Petroleum Use
i) Transit and Intercity Rail Capital Program,
Transportation Agency, $400 million
ii) Low Carbon Road Program, Caltrans, $100 million
iii) Low Carbon Transportation and Fuels, ARB, $500
million
iv) Biofuel Facility Investments, CEC, $25 million
c) Local Climate Action
i) Transformative Climate Communities, SGC, $100
million
d) Short-Lived Climate Pollutants
i) Black Carbon Woodsmoke and Refrigerants, ARB, $60
million
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ii) Waste Diversion, CalRecycle, $100 million
iii) Climate Smart Agriculture - Healthy Soils and Dairy
Digesters, CDFA, $55 million
e) Safeguarding California/Water Action Plan
i) Water and Energy Efficiency, CDFA and DWR, $30
million
ii) Drought Executive Order, CEC, $60 million
iii) Wetlands and Watershed Restoration/CalEcoRestore,
DFW, $60 million
f) Safeguarding California/Carbon Sequestration
i) Healthy Forests and Urban Forestry, CAL FIRE, $180
million
ii) Urban Greening, Natural Resources Agency, $20
million
g) Energy Efficiency/Renewable Energy
i) Energy Efficiency for Public Buildings, Department
of General Services, $30 million
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ii) California Lending for Energy and Environmental
Needs Center, I Bank, $20 million
iii) Energy Corps, Conservation Corps, $15 million
iv) Energy Efficiency Upgrades/Weatherization,
Department of Community Services and Development, $75
million
v) Renewable Energy and Energy Efficiency Projects,
University of California, California State University,
$60 million
2)Author's statement:
In order to further reduce the environmental impacts of
port operations and achieve new air quality benchmarks, the
enhancement of existing port infrastructure is needed. We
need to continue to leverage private resources, while also
partnering with the industry to achieve greater results,
instead of just imposing unfunded mandates. Strategic
investment of cap-and-trade dollars are supposed to be
appropriated every year with the intention to maximize
economic, environmental, and public health benefits to the
state. However, despite the fact that the state is
expected to distribute over $3 billion in cap-and-trade
revenue this year alone, there are no port-specific
programs that receive funding in support of these goals.
AB 1657 provides the framework necessary to help finance
improvements in support of these goals, enabling California
ports to reduce emissions while also improving efficiency
and promoting economic growth.
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California's 11 public ports serve as key international
gateways for billions of dollars in products entering and
exiting the United States, supporting millions of jobs
statewide. With goods movement representing roughly
one-third of the jobs in California, the state's economy
and quality of life depend on the efficient and safe
delivery of goods to and from our ports.
At the same time, the environmental impacts from goods
movement activities have a serious adverse impact on our
environment by generating criteria pollutants, toxic air
contaminants, and GHG emissions. ARB has developed various
regulations intended to address these air quality issues,
and the maritime industry has made great strides in their
environmental clean-up efforts. In fact, industry is in
the process of investing an estimated $5 billion to improve
the state's air quality, and their efforts are already
paying off. The Ports of Los Angeles and Long Beach have
implemented Clean Air Action Plans, which have been the
cornerstone for very significant emissions reductions over
the last decade-reductions on the order of 80% in
particulate matter, 90% in sulfur oxides, 50% in nitrogen
oxides, and significant GHG reductions since 2005.
Although extremely expensive, these reductions have been
achieved largely on a cooperative basis with industry.
Nonetheless, there is still much work to be done.
While these efforts and stricter air quality laws and
regulations have improved air quality across the state,
many areas in the state continue to experience poor air
quality. The American Lung Association again reported in
their 2015 State of the Air report that the Los Angeles
Basin has some of the nation's highest ozone and fine
particulate pollution, and the South Coast Air Quality
Management District has consistently cited the Ports of Los
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Angeles and Long Beach as the number one polluter in
Southern California.
3)Bill should be clarified to focus on measures that are not
required by regulation or funded by other sources. As the
author notes, California's ports and freight operations are a
major contributor to air pollution and GHG emissions. As
such, these sources are subject to a variety of regulations to
reduce emissions. For example, ARB has adopted regulations to
reduce diesel emissions from ships at berth, cargo handling
equipment, and port-serving trucks. In addition, there are
several incentive programs applicable to port and freight
operations, including the Carl Moyer Memorial Air Quality
Standards Attainment Program, the Proposition 1B Goods
Movement Emission Reduction Program, the AB 118 Air Quality
Improvement Program, and a wide range of ratepayer-funded
utility energy efficiency programs.
To the extent the GGRF is tapped to fund projects to reduce
emissions and increase energy efficiency at intermodal
terminals and public ports, the programs should be focused on
measures that achieve additional GHG emission reductions that
won't be achieved under business as usual (i.e., through
private investments made to comply with legal mandates or
through other publicly-funded incentive programs). The author
and the committee may wish to consider amendments to require
both ARB and CEC to assure the projects funded achieve
additional GHG emission reductions and that funds are not
awarded to comply with existing regulations.
4)Prior legislation. AB 678 (O'Donnell) requires ARB, in
conjunction with CEC, to develop the Energy Efficient Ports
Program to fund energy efficiency projects that help reduce
emissions of GHG and air pollutants at public ports. AB 678
was approved by this Committee on April 13, 2015, by a vote of
9-0, but was later held in the Senate Appropriations
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Committee.
5)Double referral. This bill has been double-referred to the
Assembly Transportation Committee.
REGISTERED SUPPORT / OPPOSITION:
Support
APM Terminals
Biz Fed
California Association of Port Authorities
California Railroad Industry
Center for Sustainable Energy
Maersk Line
Pacific Merchant Shipping Association
Philips Lighting
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San Diego County Regional Airport Authority
Wilmington Chamber of Commerce
Opposition
None on file
Analysis Prepared by:Lawrence Lingbloom / NAT. RES. / (916)
319-2092