BILL ANALYSIS Ó
AB 1697
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ASSEMBLY THIRD READING
AB
1697 (Bonilla)
As Amended April 25, 2016
Majority vote
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|Committee |Votes|Ayes |Noes |
| | | | |
| | | | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Jobs |9-0 |Eduardo Garcia, Kim, | |
| | |Achadjian, Brough, | |
| | |Brown, Chau, Chu, | |
| | |Gipson, Irwin | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Appropriations |20-0 |Gonzalez, Bigelow, | |
| | |Bloom, Bonilla, | |
| | |Bonta, Calderon, | |
| | |Chang, Daly, Eggman, | |
| | |Gallagher, Eduardo | |
| | |Garcia, Roger | |
| | |Hernández, Holden, | |
| | |Jones, Obernolte, | |
| | |Quirk, Santiago, | |
| | |Wagner, Weber, Wood | |
| | | | |
AB 1697
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| | | | |
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SUMMARY: Expands the project preference and selection criteria
under the Alternative and Renewable Fuel and Vehicle Technology
Program (Program) to more effectively target workforce training
opportunities that are aligned with clean technology and
alternative/renewable fuel career pathways.
EXISTING LAW:
1)Establishes the Program, administered through the State Energy
Resources Conservation and Development Commission
(Commission), for the purpose of providing a variety of
funding opportunities that assist in the development and
deployment of technology and alternative and renewable fuels
in the marketplace.
2)Authorizes the Commission to provide preferences to those
projects that maximize the Program's goals, based on specified
criteria, and limits workforce related funding to alternative
and renewable fuel feedstock production and extraction;
renewable fuel production, distribution, transport, and
storage; high-performance and low-emission vehicle technology
and high tower electronics; automotive computer systems; mass
transit fleet conversion, servicing, and maintenance; and
other sectors or occupations related to the purposes of this
chapter.
FISCAL EFFECT: According to the Assembly Appropriations
Committee, implementation of the bill will result in:
1)Increased one-time costs of $500,000 for the California Energy
Commission (CEC) to obtain the technical support necessary to
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revise criteria and implement the requirements of the bill; and
2) Initial and ongoing annual costs of $450,000 and three
positions to implement the revised Program.
COMMENTS: To address the long-term goals of reducing the
emissions of greenhouse gases in California, the Legislature
approved and the Governor signed the California Alternative and
Renewable Fuel, Vehicle Technology, Clean Air and Carbon
Reduction Act of 2007 that established the Alternative and
Renewable Fuel and Vehicle Technology Program. The Program is
administered through the Commission, which each year awards up
to $100 million in grants to support the development and
deployment of innovative technologies related to alternative
fuel and vehicle types. Although workforce development is among
the list of eligible activities, funding for training has been
limited. Of the $100 million available each year, the
Commission planned to set aside $2.5 million in 2014-15 and $3
million in 2015-16 for workforce related investments.
This bill modifies the selection criteria to provide grant
applications for workforce-related activities a more equal
playing field among the various authorized funding purposes.
California's High-Carbon Economy: California is home to over 38
million people, providing the state with one of the most diverse
populations in the world, often comprising the single largest
concentration of nationals outside their native country. In
2014, this diverse group of business owners and workers produced
$2.3 trillion in goods and services; $174.1 billion of which
were exported to over 220 countries around the world.
California's 2014 Gross Domestic Product (GDP) ranks the state
economy as the eighth largest in the world.
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Many policy makers and economists describe California as having
not a single economy, but having a highly integrated network of
a dozen or so regional economies. While biotech has a
comparative advantage in some regions, information technology
drives growth in others. This economic diversity is one of the
reasons California was able to so aggressively move out of the
recession, ranking number two in the nation by Business Insider
for fastest growing economy in the nation in August 2014 and as
having the fourth best overall economy in March 2015.
There are approximately 19 million people within the California
labor force, generally contributing to 11 industry sectors,
including government. The chart below displays California
employment by industry sector, based on the 2015 annual average.
The Trade, Transportation, and Utility sector is the largest
employment sector and the second largest contributor to the GDP.
In 2014 (most recent data available), this sector contributed
$351 billion to the California economy and supported jobs in
other industry sectors including Manufacturing, Professional
Services, and Financial Activities. While providing significant
economic advantages, these same industry sectors are primary
contributors to the state's greenhouse gas emissions.
In January 2015, Governor Brown announced a commitment to set
new greenhouse gas emissions reduction targets. The Governor's
Integrated Plan calls for:
1)50% of the state's electricity to come from renewable energy
sources by 2030;
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2)A 50% reduction in petroleum by 2030;
3)Doubling the energy efficiency savings at existing buildings
by 2030;
4)A Carbon sequestration strategy that involves new management
techniques for the state's working landscapes, including
farms, ranch lands, forests, and wetlands;
5)A reduction in short-lived climate pollutants; and
6)Mitigation strategies to safeguard California against the
impacts of climate change.
Meeting these new policy goals will require substantial
restructuring within the economy, especially for manufacturing,
energy production, and transport-related activities. Both
workers and businesses will be impacted, requiring retraining,
retooling, and repositioning. While this transition opens new
opportunities for some, it also places new burdens on those that
have not necessarily recovered from the impact of the Financial
Crisis and subsequent recession.
California's current economy appears to be diverging in two
disparate directions. On the one hand, state unemployment is at
a seven-year low (5.3%) and certain businesses and regions are
experiencing strong economic growth. On the other hand, there
are areas of the state and certain population groups who remain
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economically distressed with high unemployment rates among
blacks (10.4%), Hispanics (7.1%), young workers (19.6%), and
inland California [Imperial County at (18.9%) and Colusa at
(16.2%)].
Transitioning to a lower carbon economy has economic costs,
which the state has been slow to acknowledge and address. The
state has tools to help make this transition less of a hardship
for impacted workers, businesses, and communities. This bill
proposes the expanded use of an existing funding source to help
retrain workers who face potential unemployment when their
middle-wage jobs are eliminated.
Career Pathways in the Clean Tech Industries: An initial
analysis by the Air Resources Board on the employment impact of
AB 32 (Núñez), Chapter 488, Statutes of 2006, showed that the
utility industry would be the most significantly impacted.
Employment losses could be nearly as high as 15%. A related
policy brief by University of California, Berkley's Center for
Labor Research and Education found that implementation of AB 32
would likely present significant workforce challenges and that a
successful transition to green technologies would require a
well-trained technical and blue-collar labor force. In the
absence of careful and farsighted implementation strategies, the
policy brief stated that California could lose businesses to
other regions and ultimately result in trading well-paying jobs
for new jobs of lesser quality.
According to the 2015-16 Investment Plan for the Program, the
Commission has three active interagency agreements on workforce,
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including $7.25 million with EDD, $9.5 million with the
Employment Training Panel, and $5.5 million with the California
Community Colleges Chancellor's Office. For the same time
period, the Commission was setting aside an additional $3
million.
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| Interagency Agreements for Workforce Training Activities |
| |
| |
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|------------+---------+----------+---------+---------+-----------|
|Partner |Funded |Match |Trainees |Businesse|Municipalit|
|Agency |Training |Contributi| |s |ies |
| |(in |ons (in | |Assisted |Assisted |
| |million) |millions) | | | |
| | | | | | |
| | | | | | |
|------------+---------+----------+---------+---------+-----------|
|Employment | $7.0 | $9.9 | 12,675 | 92+ | 14+ |
|Training | | | | | |
|Panel | | | | | |
| | | | | | |
| | | | | | |
|------------+---------+----------+---------+---------+-----------|
|Employment | $7.25 | $7.25 | 999 | 36+ | -- |
|Development | | | | | |
|Department | | | | | |
| | | | | | |
| | | | | | |
|------------+---------+----------+---------+---------+-----------|
|Community | $5.5 | N/A | N/A | 480 | -- |
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|College | | | | | |
|Chancellor's| | | | | |
| Office | | | | | |
| | | | | | |
| | | | | | |
|------------+---------+----------+---------+---------+-----------|
|Total | $19.75 | $17.4 | 13,674 | 608+ | 14+ |
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| Source: 2015-16 Investment Plan for the Alternative and |
| Renewable Fuel and Vehicle Technology Program |
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Here is an example of the type of work being undertaken through
these interagency agreements: The Employment Training Panel and
Blue Sky received a $59,280 Program grant to train 19 employees
to update their manufacturing skills, including yard workers,
operations/maintenance staff, refiners, and drivers in the
processing and distribution of biodiesel products.
Analysis Prepared by:Toni Symonds / J., E.D., & E. / (916)
319-2090 FN: 0003184
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