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
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          |Author:   |Bonilla                                               |
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          |Version:  |4/25/2016                                             |
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          |Urgency:  |No                     |Fiscal:      |Yes             |
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          |Consultant|Erin Riches                                           |
          |:         |                                                      |
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          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  







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              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.








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            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  








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              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  








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              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



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