BILL ANALYSIS Ó
AB 1657
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Date of Hearing: April 18, 2016
ASSEMBLY COMMITTEE ON TRANSPORTATION
Jim Frazier, Chair
AB 1657
(O'Donnell) - As Amended April 7, 2016
SUBJECT: Air pollution: public ports and intermodal terminals
SUMMARY: Establishes the Zero- and Near-Zero-Emission
Intermodal Terminals Program (Intermodal Terminals Program) and
the Port Building and Lighting Efficiency Program (Port
Efficiency Program) to fund projects to reduce emissions and
increase energy efficiency from freight movements and public
port operations. Specifically, this bill:
1)Creates the Intermodal Terminals Program, administered by the
California Air Resources Board (ARB) and funded by the
Greenhouse Gas Reduction Fund (GGRF), to pay for equipment
upgrades and investments at port terminals to help transition
the state's freight system to zero-emission and
near-zero-emission operations.
2)Specifies, for the Intermodal Terminals Program, certain
project eligibility requirements to ensure deployment of zero-
and near-zero-emission equipment including:
a) Early deployment of zero-emission and near-zero-emission
equipment that handles the cargo transfers at intermodal
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terminals;
b) Installation of infrastructure necessary for the
deployment of zero- and near-zero-emission equipment,
including fueling infrastructure at intermodal terminals;
and,
c) Transition of cargo handling equipment to zero- and
near-zero-emission equipment.
3)Requires, for the Intermodal Terminals Program, that ARB:
a) Develop and adopt specified program guidelines
consistent with AB 32 (Núñez), Chapter 488, Statutes of
2006, the GGRF Investment Plan, as well as the Communities
Revitalization Act established pursuant to AB 1532 (Pérez),
Chapter 807, Statutes of 2012;
b) Include baseline equipment eligibility for types of
equipment that satisfies zero-emission and
near-zero-emission requirements; and,
c) Establish limits on program award amounts so that no one
project or entity receives more than 50% of program
funding.
4)Requires ARB, when allocating monies for the Intermodal
Terminals Program, to consider:
a) The impact of the investment on freight system
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efficiency;
b) The degree to which the investment facilitated
transition of the system to zero- or near-zero-emissions;
c) The impact on cost and competitiveness on the freight
sector; and,
d) The reduction of greenhouse gas (GHG) emissions.
5)Creates the Port Efficiency Program, to be administered by the
California Energy Commission (Commission), to fund energy
upgrades and investments at public ports that reduce
electrical load and increase on-site renewable generation
using GGRF monies appropriated by the Legislature.
6)Requires, pursuant to the Port Efficiency Program, that
eligible projects include:
a) Installing renewable technologies at public ports,
marine terminals, warehouses, and other freight facilities;
b) Replacing conventional lighting at public ports;
c) Implementing energy efficiency measures that reduce
grid-based energy demand from port operations; and,
d) Other projects that help electrify public ports and
reduce GHGs.
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7)Requires, pursuant to the Port Efficiency Program, that the
Commission adopt guidelines consistent with AB 32, the GGRF
Investment Plan, and the Communities Revitalization Act.
8)Requires public ports to adopt, in consultation with the
appropriate electric utility, an energy plan that meets
specified criteria.
9)Requires, for the Port Efficiency Program, that the Commission
allocate funds on a competitive basis for projects shown to
achieve the greatest GHG emission reductions not otherwise
required by law or regulation.
10)Prohibits vessel upgrades from being considered for funding
for both the Intermodal Terminals and the Port Efficiency
Programs.
11)Defines a variety of terms.
12)Is an urgency measure.
EXISTING LAW:
1)Requires ARB, pursuant to AB 32, to adopt a statewide GHG
emissions equivalent to 1990 levels by 2020 and to adopt
regulations to achieve maximum technologically feasible and
cost-effective GHG emission reductions.
2)Authorizes ARB, pursuant to AB 32, to use market-based
compliance mechanisms (cap and trade) to comply with GHG
reduction regulations.
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3)Established the GGRF and requires all moneys, except for fines
and penalties, collected by ARB pursuant to cap and trade to
be deposited in the GGRF and made available for appropriation
by the Legislature.
4)Established the GGRF Investment Plan and Communities
Revitalization Act, pursuant to
AB 1532, which set procedures for the investment of cap and
trade revenues.
5)Requires, pursuant to SB 535, (de León), Chapter 830, Statutes
of 2012, that GGRF Investment Plan allocate a minimum of 25%
of available GGRF revenues to projects that provide benefits
to identified disadvantaged communities and a minimum of 10%
of available GGRF revenues to projects located within
identified disadvantaged communities.
FISCAL EFFECT: Unknown
COMMENTS: According to the author, California ports need to
reduce emissions while also improving energy efficiency and
promoting economic growth. To accomplish this, the author
introduced AB 1657 to provide a framework to help publicly
finance public port infrastructure improvements using GGRF
monies generated by the state's cap and trade program.
Specifically, AB 1657 would establish the Intermodal Terminals
Program and the Port Efficiency Program administered by ARB and
the Commission, respectively. The Intermodal Terminals Program
would fund equipment upgrades and investments at intermodal
terminals to help the state transition its freight system to
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zero- and near-zero-emissions operations. The Port Efficiency
Program, administered by the Commission, would fund energy
efficiency upgrades and investments at public ports to help
reduce electrical load and increase on-site renewable
generation.
The author points out that one of the most valuable tools
available to help the state achieve its climate change goals is
the AB 32 cap and trade program and that these funds should be
used to address the state's greatest environmental challenges.
The author asserts that in Southern California, ports have much
more work remaining to achieve zero- and near-zero emissions
operations despite, making substantial progress in reducing
emissions and cleaning up the air. He contends that using cap
and trade funds to implement programs that reduce emissions and
improve air quality offers the perfect opportunity for the state
to partner with industry to address major transportation sector
emissions and improve air quality, particularly for
disadvantaged communities that tend to lie within close
proximity to ports and other transportation hubs.
Addressing emissions associated with California's public ports
would result in significant air quality improvements and get the
state closer to achieving its climate change goals. This is
particularly necessary given that the American Lung Association
again reported in 2015 that the Los Angeles Basin has some of
the nation's highest ozone and fine particle pollution and that
studies continue to indicate that black carbon, formaldehyde,
nickel, benzene, arsenic, and other chemicals that are still
causing increased cancer risks around the ports of Los Angeles
and Long Beach, due primarily to heavy diesel emissions
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associated with port operations, it makes sense to use of cap
and trade dollars should be used to address these issues.
AB 1657 is only one of many bills before the Legislature this
year that seeks to utilize GGRF revenues to address climate
change and air quality impacts. Undoubtedly, there is merit in
all of these proposals and they will have to reconcile one with
the other at some point in the legislative process. It is
important to note, however, that in directing GGRF funds to
projects on or near California's public ports as envisioned by
AB 1657, the state would be able to achieve significant
leveraging of the funds from private investments while reducing
emissions in disadvantaged communities, all the while improving
the supply chain and ultimately result in economic benefits
across California.
Double referral: This bill passed out of the Assembly Natural
Resources Committee on
April 4, 2016, with a 9-0 vote.
Previous legislation: AB 678 (O'Donnell), requires ARB, in
conjunction with the Commission, 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
Committee.
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AB 1532 (Pérez), Chapter 807, Statutes of 2012, created the
Greenhouse Gas Reduction Fund Investment Plan and Communities
Revitalization Act to set procedures for the investment of
regulatory fee revenues derived from the auction of GHG
allowances.
AB 32 (Núñez), Chapter 488, Statutes of 2006, created the
California Global Warming Solutions Act of 2006 and required ARB
to adopt GHG reduction measures to ensure that statewide
emissions are reduced to 1990 levels by 2020.
REGISTERED SUPPORT / OPPOSITION:
Support
APM Terminals
Associated General Contractors
California Association of Port Authorities
California Railroad Industry
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Center for Sustainable Energy
Los Angeles County Business Federation
Los Angeles County Economic Development Corporation
Los Angeles County Economic Development Corporation
Maersk Line
Pacific Merchant Shipping Association
Philips Lighting
San Diego County Regional Airport Authority
Wilmington Chamber of Commerce
Opposition
None on file
Analysis Prepared by:Victoria Alvarez / TRANS. / (916) 319-2093
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