BILL ANALYSIS Ó
AB 1657
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Date of Hearing: May 11, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
AB
1657 (O'Donnell) - As Amended April 7, 2016
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|Policy |Natural Resources |Vote:|9 - 0 |
|Committee: | | | |
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| |Transportation | |15 - 0 |
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Urgency: Yes State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill 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 movement and public port
operations. Specifically, this bill:
AB 1657
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1)Creates the Intermodal Terminals Program, to be 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)Creates the Port Efficiency Program, to be administered by the
California Energy Commission (CEC), 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.
3)Prohibits vessel upgrades from being considered for funding
for both the Intermodal Terminals and the Port Efficiency
Programs.
FISCAL EFFECT:
1)Cost pressures, likely in the hundreds of millions of dollars
(GGRF) to fund the two incentive programs.
2)Assuming $100 million in annual funding, increased ongoing
costs $2.2 million and 14.5 positions (GGRF) for the ARB to
establish and implement the new incentive program.
3)Assuming $50 million in annual funding, increased ongoing
costs of $1.1 to $1.5 million and 8 positions for CEC to
establish and implement the new incentive program.
COMMENTS:
AB 1657
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1)Purpose. According to the author, California ports need to
reduce emissions while also improving energy efficiency and
promoting economic growth. This bill is intended to provide a
framework to help publicly finance port infrastructure
improvements using GGRF monies generated by the state's cap
and trade program.
2)Background. The California Global Warming Solutions Act of
2006 (AB 32) requires ARB to adopt a statewide GHG emissions
limit equivalent to 1990 levels by 2020 and adopt regulations,
including market-based compliance mechanisms, to achieve
maximum technologically feasible and cost-effective GHG
emission reductions.
As part of the implementation of AB 32 market-based compliance
measures, ARB adopted a cap-and-trade program that caps the
allowable statewide emissions and provides for the auctioning
of emission credits, the proceeds of which are quarterly
deposited into the GGRF available for appropriation by the
Legislature.
The 2014-15 Budget Act allocated cap-and-trade revenues for
the 2014-15 fiscal year and established a long-term plan for
the allocation of cap-and-trade revenues beginning in fiscal
year 2015-16.
The Budget continuously appropriates 35% of cap-and-trade
funds for investments in transit, affordable housing, and
sustainable communities. Twenty-five percent of the revenues
are continuously appropriated to continue the construction of
high-speed rail. The remaining 40% are to be appropriated
annually by the Legislature for investments in programs that
include low-carbon transportation, energy efficiency and
renewable energy, and natural resources and waste diversion.
AB 1657
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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 totaling $3.1 billion, are available for
appropriation this year.
3)Previous Legislation. AB 678 (O'Donnell) requires ARB, in
conjunction with the 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 but was later held on
suspense in the Senate Appropriations Committee.
Analysis Prepared by:Jennifer Galehouse / APPR. / (916)
319-2081