BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 1697| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: AB 1697 Author: Bonilla (D), et al. Amended: 8/15/16 in Senate Vote: 21 SENATE TRANS. & HOUSING COMMITTEE: 9-1, 6/28/16 AYES: Beall, Cannella, Allen, Galgiani, Leyva, McGuire, Mendoza, Roth, Wieckowski NOES: Bates NO VOTE RECORDED: Gaines SENATE APPROPRIATIONS COMMITTEE: 5-2, 8/11/16 AYES: Lara, Beall, Hill, McGuire, Mendoza NOES: Bates, Nielsen ASSEMBLY FLOOR: 80-0, 5/31/16 - See last page for vote SUBJECT: Alternative and Renewable Fuel and Vehicle Technology Program SOURCE: Author 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: 1)Establishes the ARFVTP, administered by the California Energy Commission (CEC). This program provides funding (about $100 million per year) for development and deployment of AB 1697 Page 2 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. 2)Requires the CEC to prioritize projects that maximize ARFVTP goals based on the following criteria, as applicable: a) Ability to provide a measurable transition to a diverse portfolio of viable alternative fuels that meet petroleum reduction and alternative fuel use goals. b) Consistency with state climate change policy and low-carbon fuel standards. c) Ability to reduce criteria air pollutants and air toxics and reduce or avoid multimedia environmental impacts. d) Ability to decrease the discharge of water pollutants or other substances known to damage health or the environment, as specified. e) Lack of adverse impact on the sustainability of the state's natural resources, especially state and federal lands. f) Provision of non-state matching funds. g) Provision of economic benefits for the state by promoting California-based technology firms, jobs, and businesses. h) Use of existing or proposed fueling infrastructure to maximize project outcome. i) Ability to reduce greenhouse gas (GHG) emissions by at least 10%, and higher percentages in the future, from AB 1697 Page 3 current reformulated gasoline and diesel fuel standards established by the state Air Resources Board. j) Use of alternative fuel blends of least 20%, and higher blend ratios in the future, with a preference for projects with higher blends. aa) Ability to drive new technology advancement for vehicles, vessels, engines, and other equipment, and promotion of deployment of that technology in the marketplace. 1)Makes the following types of projects eligible for ARFVTP funding: a) Projects to develop and improve alternative and renewable low-carbon fuels, as specified. b) Demonstration and deployment projects that optimize alternative and renewable fuels for existing and developing engine technologies. c) Projects to produce alternative and renewable low-carbon fuels in California. d) Projects to decrease the overall impact of an alternative and renewable fuel's carbon footprint and increase sustainability. e) Alternative and renewable fuel infrastructure, fueling stations, and equipment. f) 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. g) Programs and projects that accelerate the commercialization of vehicles and alternative and renewable fuels. h) Programs and projects to retrofit medium- and heavy-duty AB 1697 Page 4 on-road and off-road vehicle fleets with technologies that create higher fuel efficiencies. i) Infrastructure projects that promote alternative and renewable fuel infrastructure development connected with existing fleets, public transit, and existing transportation corridors. j) 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. aa) 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. bb) Life-cycle and multimedia analyses, sustainability and environmental impact evaluations, and market, financial, and 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. cc) 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 a criterion to the list on which the CEC must base project prioritization; specifically, the project's ability to transition workers to, or promote employment in, the alternative and renewable fuel and vehicle technology sector. AB 1697 Page 5 2)Recasts the criteria for workforce training programs that are eligible for funding (see #j above), to add: a) Training programs related to the development and deployment of technologies that transform the state's fuel and vehicle types and assist the state in implementing its climate change policies b) Training programs to assist dislocated workers affected by the state's GHG emissions policies, including those from fossil fuels c) Training for low-skilled workers to enter or continue in a career pathway that leads to middle-skill, industry-recognized credentials or state-approved apprenticeship opportunities in occupations related to the purposes of this bill 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 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 AB 1697 Page 6 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)Recent amendments. The author amended this bill in the Senate Appropriations Committee to: clarify the bill's provisions by combining the new criteria for project prioritization into one criterion; clarify the changes to the workforce development program component by reincorporating the specified occupations and sectors; and require the CEC to collaborate with entities that have expertise in workforce development, including the California Workforce Development Board, the Employment Training Panel, the Employment Development Department, and the Division of Apprenticeship Standards, to implement the workforce development components of ARFVTP. FISCAL EFFECT: Appropriation: No Fiscal Com.:YesLocal: No According to the Senate Appropriations Committee: One-time CEC costs of approximately $50,000 for outreach and information technology costs. (ARFVT Fund) Ongoing CEC costs of approximately $150,000 annually and 1 PY of staff to update program regulations, incorporate changes to the workforce development component, and administer the revised program. (ARFVT Fund) SUPPORT: (Verified8/11/16) AB 1697 Page 7 California Labor Federation California Workforce Association Cleantech San Diego Environmental Defense Fund State Building and Construction Trades Council OPPOSITION: (Verified8/11/16) None received ASSEMBLY FLOOR: 80-0, 5/31/16 AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Quirk, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Rendon Prepared by:Erin Riches / T. & H. / (916) 651-4121 8/15/16 20:10:07 **** END ****