BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 2415


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          Date of Hearing:  April 4, 2016


                        ASSEMBLY COMMITTEE ON TRANSPORTATION


                                 Jim Frazier, Chair


          AB 2415  
          (Eduardo Garcia) - As Introduced February 19, 2016


          SUBJECT:  California Clean Truck, Bus, and Off-Road Vehicle and  
          Equipment Technology Program


          SUMMARY:  Reserves 50% or $100 million annually, whichever is  
          greater, of Greenhouse Gas Reduction Fund (GGRF) monies that are  
          allocated to the California Clean Truck, Bus, and Off-Road  
          Vehicle and Equipment Technology Program (SB 1204 Program) to  
          support the commercial deployment of existing zero- and  
          near-zero emission heavy duty truck technology that meets or  
          exceeds the Air Resources Board's (ARB's) low oxides of nitrogen  
          (NOx) standard between 2018 and 2023.  Specifically, this bill:   



          1)Requires for five years, between January 2, 2018 and January  
            1, 2023, that 50% or $100 million, whichever is greater, of  
            monies allocated annually for technology development,  
            demonstration, pre-commercial pilots, and early commercial  
            deployments of zero- and near-zero-emission medium- and  
            heavy-duty truck technology be allocated and spent to support  
            the commercial deployment of existing zero- and  
            near-zero-emission heavy-duty truck technology that meets or  
            exceeds the ARB's Low NOx Standard of 0.02 grams per brake  
            horsepower-hour oxides of nitrogen.









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          2)Requires that between January 2, 2018, and January 1, 2020,  
            that a heavy-duty truck with an internal combustion engine  
            (ICE) receiving SB 1204 Program monies, not use at least 30%  
            renewable fuel.


          3)Requires, beginning on January 2, 2020, that a heavy-duty  
            truck with an ICE receiving 


          SB 1204 Program funds not use less than 50% renewable fuel.
          4)Provides that the required percentage of renewable fuel in  
            effect at the time the moneys are awarded to a heavy-duty  
            truck pursuant to the SB 1204 program shall not change over  
            time. 


          5)Provides that awards provided pursuant to the SB 1204 program  
            shall not affect the eligibility of low-carbon-fuel providers  
            to qualify for or receive other credits or grants for which  
            they are eligible. 


          6)For the purposes of the SB 1204 Program, defines a "heavy-duty  
            truck" as a vehicle with a gross vehicle weight rating (GVWR)  
            of 26,001 pounds or more.


          7)Makes related, clarifying amendments.


          EXISTING LAW:  


          1)Requires the ARB, pursuant to AB 32 (Núñez), Chapter 488,  
            Statutes of 2006, to develop a plan of how to reduce statewide  
            greenhouse gas (GHG) emissions to 1990 levels by 2020.  Under  
            AB 32, ARB is authorized to include the use of market-based  








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            mechanisms to comply with these regulations (such as cap and  
            trade mechanism).

          2)Establishes the GGRF in the State Treasury and requires all  
            money collected pursuant to cap and trade, with limited  
            exceptions, be deposited into the fund.

          3)Creates the SB 1204 Program pursuant to SB 1204 (Lara),  
            Chapter 524, Statutes of 2013, to fund development,  
            demonstration, pre-commercial pilot, and early commercial  
            deployment of zero- and near-zero-emission truck, bus, and  
            off-road vehicle and equipment technologies including, but not  
            necessarily limited to, medium- and heavy-duty trucks,  
            vocational trucks, short-haul and long-haul trucks, buses, and  
            off-road vehicles and equipment, port equipment, agricultural  
            equipment, marine equipment, and rail equipment.

          4)Requires that the SB 1204 Program be funded from the GGRF and  
            prioritized for projects in disadvantaged communities.  

          5)Requires, until January 1, 2018, that no less than 20% of  
            funding for the SB 1204 Program support commercial deployment  
            of existing zero- and near-zero-emission heavy duty trucks,  
            which is broadly defined.

          6)Under the California Alternative and Renewable Fuel, Vehicle  
            Technology, Clean Air, and Carbon Reduction Act of 2007,  
            created by AB 118 (Núñez), Chapter 750, Statutes of 2007,  
            requires California Energy Commission (Commission) to  
            implement the Alternative and Renewable Fuels and Vehicle  
            Technology Program (ARFVTP) to fund specified entities to  
            develop and deploy technologies and alternative and renewable  
            fuels in the marketplace to help meet the state's climate  
            change policies.  

          7)Creates the Air Quality Improvement Program (AQIP),  
            administered by ARB and the Commission, in consultation with  
            local air districts, to fund specified air quality improvement  
            projects.  








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          8)Requires ARB, in consultation with the Commission, to develop  
            guidance through the existing AQIP funding plan process to  
            implement the SB 1204 Program.

          9)Defines a "heavy-duty truck" as vehicles weighing  
            14,000-19,500 pounds GVWR. 

          FISCAL EFFECT:  Unknown


          COMMENTS:  According to the author, air pollution effects human  
          health disproportionately in disadvantaged communities that  
          border transportation corridors. This unhealthy air increases  
          the risk of asthma, cancer and premature death.  He notes that  
          in the South Coast and San Joaquin Valley Air Districts, nearly  
          80% of smog-forming pollutants, such as NOx come from mobile  
          sources and that heavy-duty vehicles are the primary producer of  
          these pollutants.  To address these issues, the author has  
          introduced AB 2415 which would incentivize the use of renewable  
          fuels in heavy-duty vehicles involved in goods movement and in  
          doing so, provide immediate and cost-effective solutions to  
          reducing emissions and improving air quality and public health.   



          AB 32 required ARB to develop a plan to reduce GHG emissions to  
          1990 levels, by 2020.  


          AB 32 also required ARB to ensure that GHG emissions reduction  
          requirements and programs, to the extent feasible, directed  
          public and private investment toward the most disadvantaged  
          communities in the state.  In addition, AB 32 authorized ARB to  
          adopt a schedule of fees to be paid by GHG emission sources and  
          to deposit those monies into the GGRF, which would then be  
          available upon appropriation by the Legislature, to carry out AB  
          32 requirements. 









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          Subsequent legislation, AB 118, established the AQIP  
          administered by ARB in consultation with local air districts.   
          The AQIP is funded through various fees and surcharges on  
          vehicles and provides competitive grants to fund projects that  
          improve air quality.  The AQIP encompasses several programs,  
          including the Hybrid and Zero-Emission Truck and Bus Voucher  
          Incentive Program (HVIP), which is administered by ARB and  
          provides vouchers to California fleet owners to help purchase  
          hybrid and zero-emission trucks and buses.

          AB 118 also established the ARFVTP, which is administered by the  
          Commission, and provides funding for development and deployment  
          of alternative and renewable fuels and advanced transportation  
          technologies to help attain the state's climate change goals.   
          Eligible projects include, for example, development,  
          improvement, and production of alternative and renewable  
          low-carbon fuels; improvement of light-, medium-, and heavy-duty  
          vehicle technologies; and expansion of infrastructure connected  
          with existing fleets, public transit, and transportation  
          corridors.  
           
          In 2014, the SB 1204 Program was established, to be administered  
          by ARB in conjunction with the Commission, with the intent to  
          create a single, overarching program to develop and deploy zero-  
          and near-zero-emission heavy-duty vehicles.  In introducing AB  
          2415, the primary intent of the author was to better address  
          heavy-duty vehicles in HVIP and AQIP.  Specifically, the 
          SB 1204 Program, until January 1, 2018, provided GGRF funds for  
          projects that develop technology, demonstrate and pilot  
          commercial and early-commercial deployment of zero and near-zero  
          emission medium- and heavy-duty truck technology, and facilitate  
          clean goods movement.  The SB 1204 Program worked to develop  
          zero-and near-zero emission technologies for specified vehicles  
          and equipment not only for trucks, but also for off-road  
          vehicles and equipment at the ports as well as in agricultural,  
          marine, and rail sectors.  Within the SB 1204 Program, funding  
          priority is generally given to projects that demonstrate benefit  
          to disadvantaged communities, that have the ability to leverage  
          additional public and private funding, and that provide the  








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          potential for co-benefits.  



          To help incentivize the adoption of these new technologies, the  
          author has introduced AB 2415 which is essentially a  
          reintroduction of a bill carried by Assemblymember Perea last  
          year 


          (AB 857).  Specifically, AB 2415 would re-establish the  
          priorities of the SB 1204 Program for five years beginning on  
          January 2, 2018, and ending on January 1, 2023, and, during that  
          five-year period, require that 50% of SB 1204 Program funds (or  
          $100 million, whichever is greater) be used for the deployment  
          of heavy-duty vehicles weighing 26,001 pounds. GVWR or greater  
          that meet a low NOx standard (i.e., meet or exceed an emission  
          standard of 0.02 grams per brake horsepower-hour NOx).  AB 2415  
          accounts for improved technology over time by "ratcheting down"  
          program requirements so that between January 2, 2018, and  
          January 1, 2020, that a heavy-duty truck with an ICE receiving  
          SB 1204 Program monies must use at least 30% renewable fuel and  
          beginning on January 2, 2020, qualifying heavy-duty trucks  
          receiving 
          SB 1204 Program funds 50% or more renewable fuel.
          AB 2415 has a broad spectrum of support including local  
          jurisdictions, business, and environmental and community groups.  
           These groups note that AB 2415 will provide the opportunity to  
          deploy cleaner trucks in the near-term so that Californians,  
          particularly those in disadvantaged communities who experience  
          some of the worst air quality in the state, can begin to see  
          improved air quality and increased health benefits sooner rather  
          than later.  





          The Southern California Association of Governments (SCAG),  








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          writing in support of AB 2415 point out that emissions from the  
          heavy-duty truck sector represent some of the most polluting  
          mobile source emitters and that if enacted, this bill will  
          create additional incentives for zero- and near-zero-emission  
          heavy-duty truck purchases that will help purchasers afford the  
          initial costs of these cleaner trucks, which will in turn help  
          accelerate the retirement of older, dirtier trucks.  SCAG  
          contends that stimulating investments in the next-generation of  
          clean truck technology will help grow the market and help  
          California reach its clean air goals.





          Suggested amendments:  The SB 1204 Program requires ARB to  
          ensure that emissions reductions benefits can be measured or  
          quantified but there is no requirement that the results of these  
          measurements be made public.  AB 2415 should be amended to  
          require that ARB periodically post (at least every two years)  
          the GHG and air pollutant reduction benefits achieved by the by  
          the program on its Internet Web site  





          Double referral:  This bill will be referred to the Assembly  
          Natural Resources Committee should it pass out of this  
          committee.





          Previous legislation: AB 857 (Perea) of 2015, would have  
          reserved 50% or $100 million annually, whichever is greater, of  
          GGRF monies that are allocated to the California Clean Truck,  
          Bus, and Off-Road Vehicle and Equipment Technology Program (SB  








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          1204 Program) to support the commercial deployment of existing  
          zero- and near-zero emission heavy-duty truck technology that  
          meets or exceeds the ARB's optional low NOx standard between  
          2018 and 2023.  AB 857 was held on the Senate Appropriations  
          Committee suspense file.


          SB 1204 (Lara), Chapter 524, Statutes of 2014, created the SB  
          1204 Program to fund development, demonstration, pre-commercial  
          pilot, and early commercial deployment of zero- and  
          near-zero-emission truck, bus, and off-road vehicle and  
          equipment technologies.  

          AB 8 (Perea), Chapter 401, Statutes of 2013, extended until  
          January 1, 2024, extra fees on vehicle registrations, boat  
          registrations, and tire sales in order to fund the programs that  
          support the production, distribution, and sale of alternative  
          fuels and vehicle technologies, as well as air emissions  
          reduction efforts.  

          AB 118 (Núñez), Chapter 750, Statutes of 2007, created the  
          California Alternative and Renewable Fuel, Vehicle Technology,  
          Clean Air, and Carbon Reduction Act of 2007 that required the  
          Commission to implement the ARFVTP and provide funding measures  
          to specified entities to develop and deploy technologies and  
          alternative and renewable fuels in the marketplace to help  
          attain the state's climate change policies.  

          AB 32 (Núñez), Chapter 488, Statutes of 2006, required the ARB  
          to develop a plan of how to reduce emissions to 1990 levels by  
          the year 2020 and also required ARB to ensure that, to the  
          extent feasible, GHGs reduction requirement and programs direct  
          public and private investment toward the most disadvantaged  
          communities.  
          


          









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          REGISTERED SUPPORT / OPPOSITION:




          Support


          Antelope Valley Boys and Girls Club
          Best Yet Express Inc.
          Bienvenidos Community Health Center
          Bioenergy Association of California
          Brotherhood Crusade
          Charter Oak Unified School
          City of Los Alamitos
          City of McFarland
          Clean Energy
          Congress of California Seniors
          Cummins Westport Inc.
          Duarte Chamber of Commerce
          El Concilio Family Services
          Foothill Workforce Development Board
          Honorable Mike Ennis, Tulare County Board of Supervisors,  
          District Five
          Industry Manufacturers Council
          Kheir
          Leon Trucking Inc.
          Los Angeles Area Chamber of Commerce
          MLI Leasing, LLC
          Mojave Desert Air Quality Management District
          Mothers of East Los Angeles
          North American Repower
          Orange County Business Council
          Proteus, Inc.
          Santa Clarita Valley Economic Development Corporation








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          Southern California Association of Governments
          Southern California Gas Company
          The Valley Economic Alliance
          Tulare County Economic Development Corporation
          United Chambers of Commerce
          United Way of Ventura County
          Valley Family Center
          VNG.co, LLC
          1 private citizen


          Opposition


          Alameda-Contra Costa Transit District
          American Lung Association
          Center for Transportation and the Environment
          Environment California
          Natural Resources Defense Council
          Physicians for Social Responsibility, Los Angeles
          Regional Asthma Management and Prevention
          Sierra Club California
          Union of Concerned Scientists


          Analysis Prepared by:Victoria Alvarez / TRANS. / (916) 319-2093