BILL ANALYSIS Ó SENATE COMMITTEE ON TRANSPORTATION AND HOUSING Senator Jim Beall, Chair 2015 - 2016 Regular Bill No: AB 1697 Hearing Date: 6/28/2016 ----------------------------------------------------------------- |Author: |Bonilla | |----------+------------------------------------------------------| |Version: |4/25/2016 | ----------------------------------------------------------------- ----------------------------------------------------------------- |Urgency: |No |Fiscal: |Yes | ----------------------------------------------------------------- ----------------------------------------------------------------- |Consultant|Erin Riches | |: | | ----------------------------------------------------------------- SUBJECT: Alternative and Renewable Fuel and Vehicle Technology Program DIGEST: This bill expands the criteria for funding programs through the state's Alternative and Renewable Fuel and Vehicle Technology Program (ARFVTP) to include workforce training, as specified. ANALYSIS: Existing law establishes the ARFVTP, administered by the California Energy Commission (CEC). This program provides funding (about $100 million per year) for development and deployment of alternative and renewable fuels and advanced transportation technologies to help attain the state's climate change goals. This program, along with several others, is funded through surcharges on vehicle registration fees, a portion of the vessel registration fee, a portion of the Smog Abatement Fee (paid to register vehicles less than six model years old and therefore exempt from smog check), and an increase in the fee for identification plates for various types of vehicles, such as logging vehicles operated on public roads. Existing law requires the CEC to prioritize projects that maximize ARFVTP goals based on the following criteria, as applicable: 1) Ability to provide a measurable transition to a diverse portfolio of viable alternative fuels that meet petroleum AB 1697 (Bonilla) Page 2 of ? reduction and alternative fuel use goals. 2) Consistency with state climate change policy and low-carbon fuel standards. 3) Ability to reduce criteria air pollutants and air toxics and reduce or avoid multimedia environmental impacts. 4) Ability to decrease the discharge of water pollutants or other substances known to damage health or the environment, as specified. 5) Lack of adverse impact on the sustainability of the state's natural resources, especially state and federal lands. 6) Provision of non-state matching funds. 7) Provision of economic benefits for the state by promoting California-based technology firms, jobs, and businesses. 8) Use of existing or proposed fueling infrastructure to maximize project outcome. 9) Ability to reduce greenhouse gas (GHG) emissions by at least 10%, and higher percentages in the future, from current reformulated gasoline and diesel fuel standards established by the state Air Resources Board. 10) Use of alternative fuel blends of least 20%, and higher blend ratios in the future, with a preference for projects with higher blends. 11) Ability to drive new technology advancement for vehicles, vessels, engines, and other equipment, and promotion of deployment of that technology in the marketplace. Existing law makes the following types of projects eligible for ARFVTP funding: 1) Projects to develop and improve alternative and renewable low-carbon fuels, as specified. 2) Demonstration and deployment projects that optimize alternative and renewable fuels for existing and developing engine technologies. AB 1697 (Bonilla) Page 3 of ? 3) Projects to produce alternative and renewable low-carbon fuels in California. 4) Projects to decrease the overall impact of an alternative and renewable fuel's carbon footprint and increase sustainability. 5) Alternative and renewable fuel infrastructure, fueling stations, and equipment. 6) Projects to develop and improve light-, medium-, and heavy-duty vehicle technologies that provide for better fuel efficiency and lower GHG emissions, alternative fuel usage and storage, or emissions reductions. 7) Programs and projects that accelerate the commercialization of vehicles and alternative and renewable fuels. 8) Programs and projects to retrofit medium- and heavy-duty on-road and off-road vehicle fleets with technologies that create higher fuel efficiencies. 9) Infrastructure projects that promote alternative and renewable fuel infrastructure development connected with existing fleets, public transit, and existing transportation corridors. 10) Workforce training programs related 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 related sectors or occupations. 11) Block grants or incentive programs administered by public entities or nonprofit entities for projects, education, and program promotion within the state, and development of alternative and renewable fuel and vehicle technology centers. 12) Life-cycle and multimedia analyses, sustainability and environmental impact evaluations, and market, financial, and AB 1697 (Bonilla) Page 4 of ? technology assessments performed by a state agency to determine the impacts of increasing the use of low-carbon transportation fuels and technologies and to assist in the preparation of the investment plan and program implementation. 13) A program to provide funding for homeowners who purchase a plug-in electric vehicle, to offset costs associated with modifying electrical sources to include a residential plug-in electric vehicle charging station. This bill: 1) Adds two criteria to the list on which the CEC must base project prioritization: a) Ability to provide a path for trained workers to transition to jobs in the clean technology and renewable fuels sectors. b) Ability to promote employment of trained workers in the clean technology and renewable fuels sectors. 2) Recasts the criteria for workforce training programs that are eligible for funding, as follows: a) Workforce training programs related to the development and deployment of innovative technologies that transform the state's fuel and vehicle types and assist the state in implementing its climate change policies, including training programs linked to career pathways for experienced workers in jobs that will be phased out as the state transitions to a low-carbon economy and for low-skilled workers to enter or continue in a career pathway that leads to middle-skill, industry-recognized certifications or apprenticeship opportunities. COMMENTS: 1) Purpose. The author states that as policies to reduce GHG emissions in California go into effect, the job market will move toward clean energy and renewable fuels. In order to remain competitive, the state will need to transition its workforce to match the growing demand in the green job sector. Of the $100 million currently available for ARFVTP projects, only $2.5 million is spent on workforce AB 1697 (Bonilla) Page 5 of ? development. This bill helps focus those funds to enhance workforce development in future clean energy development and infrastructure project proposals. 2) Economic changes call for worker retraining. According to the analysis by the Assembly Committee on Jobs, Economic Development, and the Economy, the trade, transportation, and utility sector is the largest employment sector and the second largest contributor to the state GDP. In 2014, this sector contributed $351 billion to the California economy, as well as supporting jobs in other industry sectors including manufacturing, professional services, and financial activities. While these industry sectors provide significant economic advantages, they are primary contributors to GHG emissions in California. Meeting the state's GHG emission-reduction goals will require substantial restructuring within the economy. Transitioning to a lower carbon economy carries economic costs; this bill seeks to address this problem by expanding an existing funding source to help retrain workers who face potential unemployment when their middle-wage jobs are eliminated. 3) Future amendments. The author is working with CEC and other stakeholders to fine-tune the language of this bill. Negotiations were not complete as of this writing, so the author plans to amend the bill when it reaches the Appropriations Committee to address stakeholder concerns. Assembly Votes: Floor: 80-0 Appr: 20-0 J,ED,&E: 9-0 Related Legislation: AB 865 (Alejo, Chapter 583, Statutes of 2015) - requires the CEC to establish an outreach program to inform businesses owned by women, minorities, disabled veterans, and gay, lesbian, bisexual, and transgender individuals of CEC workshops and funding opportunities. FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No AB 1697 (Bonilla) Page 6 of ? POSITIONS: (Communicated to the committee before noon on Wednesday, June 22, 2016.) SUPPORT: California Labor Federation California Workforce Association Cleantech San Diego Environmental Defense Fund State Building and Construction Trades Council OPPOSITION: None received -- END --