BILL ANALYSIS Ó
AB 1697
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB
1697 (Bonilla)
As Amended August 15, 2016
Majority vote
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|ASSEMBLY: |80-0 |(May 31, 2016) |SENATE: |27-11 |(August 18, |
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Original Committee Reference: J., E.D., & E.
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.
The Senate amendments make technical clarifying changes.
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
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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 Senate Appropriations
Committee:
1)One-time CEC costs of approximately $50,000 for outreach and
information technology costs. (ARFVT Fund)
2)Ongoing CEC costs of approximately $150,000 annually and 1
personnel year (PY) of staff to update program regulations,
incorporate changes to the workforce development component,
and administer the revised program. (ARFVT Fund)
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
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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.
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
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Integrated Plan calls for:
1)50% of the state's electricity to come from renewable energy
sources by 2030;
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 in
April 2016 was at a seven-year low (5.3%) and certain businesses
and regions are experiencing strong economic growth. On the
other hand, there were areas of the state and certain population
groups who remain economically distressed with high unemployment
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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-skill jobs are eliminated.
Career Pathways in the Clean Tech Industries: According to the
Air Resources Board, their initial analysis 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,
including $7.25 million with Employment Development Department
(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 | -- |
|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 grant for 19 employees to receive
training to update their manufacturing skills. Participants
included yard workers, operations and 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: 0004401