BILL ANALYSIS Ó
SB 20
Page 1
SENATE THIRD READING
SB
20 (Pavley)
As Amended August 15, 2016
Majority vote
SENATE VOTE: (Not Relevant)
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|Committee |Votes|Ayes |Noes |
| | | | |
| | | | |
| | | | |
|----------------+-----+-----------------------+-------------------|
|Natural |5-2 |Williams, Cristina |Jones, Harper |
|Resources | |Garcia, Hadley, Mark | |
| | |Stone, Wood | |
| | | | |
|----------------+-----+-----------------------+-------------------|
|Appropriations |11-3 |Gonzalez, Bloom, |Bigelow, Chang, |
| | |Bonilla, Bonta, |Obernolte |
| | |Eggman, Eduardo | |
| | |Garcia, Quirk, | |
| | |Santiago, Weber, Wood, | |
| | |McCarty | |
| | | | |
| | | | |
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SUMMARY: Establishes the Low Carbon Fuels Council (Council) and
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requires the Council to have six members with the Chair of the
California Energy Commission (CEC), or his or her designee,
serving as the chair of the Council. Specifically, this bill:
1)Specifies the following membership of the Council:
a) Chair of Air Resources Board (ARB) or designee;
b) Chair of the CEC or designee;
c) Director of the Governor's Office of Business and
Economic Development (GO-BIZ) or designee;
d) Two members with scientific, economic, or industry
professional backgrounds with expertise in the production,
financing, distribution, or marketing development of low
carbon fuels and very low carbon fuels, one appointed by
the Speaker of the Assembly and one by the Senate Committee
on Rules; and,
e) One member that is a representative of a bona fide
nonprofit environmental justice organization that advocates
for clean air and pollution reduction appointed by the
Governor.
2)Requires members appointed by Assembly, Senate, and Governor
to be reimbursed for actual and necessary expenses and
requires members to be compensated a $100 each day per diem.
Prohibits the Council from meeting more than four times a
year.
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EXISTING LAW:
1)Pursuant to the California Global Warming Solutions Act (AB 32
(Núñez), Chapter 488, Statutes of 2006), requires the ARB to
adopt a statewide greenhouse gas (GHG) emissions limit
equivalent to 1990 levels by 2020 and to adopt rules and
regulations to achieve maximum technologically feasible and
cost-effective GHG emission reductions.
2)Establishes the California Alternative and Renewable Fuel,
Vehicle Technology, Clean Air, and Carbon Reduction Act of
2007 [AB 118 (Núñez), Chapter 750, Statutes of 2007]. AB 118
is funded through temporary increases in vehicle registration
fees ($3), smog abatement fees ($8), boat registration fees
($10/20), and special identification plate fees ($5).
Collection of these fees is authorized until 2024 pursuant to
AB 8 (Perea), Chapter 401, Statutes of 2013.
3)Pursuant to Governor Schwarzenegger's Executive Order S-01-07,
sets a statewide goal to reduce the carbon intensity (CI) of
California's transportation fuels by at least 10% by 2020.
The order required ARB to consider adopting a Low Carbon Fuel
Standards (LCFS) to implement this goal. In 2009, ARB adopted
the LCFS as a regulation. The LCFS attributes CI values to a
variety of fuels based on direct and indirect GHG emissions,
including land use changes caused by production of biofuels.
The LCFS permits producers of certain low CI fuels to opt in
to LCFS regulation for the purpose of generating credits,
which can be banked and used for compliance, sold to regulated
parties, and purchased and retired by regulated parties. In
addition, LCFS credits can be exported to other GHG emission
reduction programs.
4)Defines "very low carbon transportation fuel" to mean a liquid
or gaseous transportation fuel having no greater than 40% of
the carbon intensity of the closest comparable petroleum fuel
for that year, as measured by the methodology in the LCFS
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regulation. Requires the carbon intensity for the
transportation fuel to include the indirect land use change
emission if an agricultural commodity that is a food product
is used as a feedstock for the production of the
transportation fuel.
FISCAL EFFECT: According to the Assembly Appropriations
Committee, this bill likely increases state costs, potentially
in the $250,000 to $500,000 range. While some of the costs may
be absorbed by the state agencies represented on the Council, it
is unclear what entity will pay the additional costs of the
public members, the coordination of state activities, the
sponsorship of other public activities, and the information
required to prepare the report to the Legislature.
COMMENTS: In 2011, the state began implementing the LCFS, which
requires the oil industry to gradually reduce the CI of gasoline
and diesel by 10% by 2020 by phasing in lower carbon fuels. The
regulations were adopted pursuant to Executive Order S-01-07 and
were readopted in September 2015. ARB rates the CI of
transportation fuels and establishes the level of credits
generated by production of the fuel. Fuel producers can reduce
the carbon intensity of their fuels or purchase credits to
comply with the LCFS. According to ARB, the carbon-intensity of
California's transportation fuel pool has been reduced by just
over 2%.
In 2007, AB 118 established three new programs intended to
promote vehicle and fuel technology that reduces air pollution
and GHG emissions statewide. These programs are the Alternative
and Renewable Fuel and Vehicle Technology Program (ARFVTP), the
Air Quality Improvement Program (AQIP) and Enhanced Fleet
Modernization Program. ARFVTP funds projects by various public
and private groups that "develop and deploy innovative
technologies that transform California's fuel and vehicle types
to help attain the state's climate change policies." The CEC
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prepares an investment plan, in coordination with a stakeholder
advisory committee, which outlines the ARFVTP's funding
priorities. AB 118 requires the advisory committee to include
representatives from state agencies; fuel and vehicle technology
consortia; labor, environmental, and community-based justice and
health organizations; academic groups; consumer advocates;
workforce training groups; and private industry. Once an
investment plan is completed, CEC receives and solicits bids for
projects, awarding funds based on eligibility criteria. Monies
appropriated to the ARFVTP come from temporary increases in smog
abatement fees, vehicle registration fees, vessel registration
fees and certain other vehicle fees. According to the CEC, as
of December 31, 2015, it has awarded over $600 million to
advance the goals of the program. Alternative fuel production
and infrastructure has received over half of that funding.
In addition to the ARFVTP, AB 118 also created the AQIP, to be
administered by the ARB. According to CEC, while the ARFVTP
focuses primarily on achieving state GHG reduction goals within
the transportation sector, the AQIP is primarily responsible for
reducing air pollutants from the transportation sector. Also,
according to CEC, the two programs have worked in concert to
maximize the benefits to the state and avoid duplication of
efforts. For instance, the ARFVTP has invested in light-duty
electric vehicle charging infrastructure, regional planning, and
manufacturing projects, while the AQIP has provided deployment
incentives for light-duty electric vehicles through the Clean
Vehicle Rebate Program (CVRP). ARFVTP has supported the
demonstration of early hybrid and electric truck and bus models,
while the AQIP has provided deployment incentives for such
vehicles through the Hybrid and Zero-Emission Truck and Bus
Voucher Incentive Project and other planned larger-scale pilot
deployment projects. Finally, AQIP has also provided loans to
assist fleets in modernizing their diesel trucks. Prior to the
availability of Greenhouse Gas Reduction Fund (GGRF), the ARFVTP
provided $49.1 million in funding to backfill CVRP needs, as
well as an additional $4 million in Hybrid and Zero-Emission
Truck and Bus Voucher Incentive Project (HVIP) incentives.
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Beginning with fiscal year 2014-2015, ARB combined the AQIP and
the GGRF Low-Carbon Transportation Investments into one funding
plan. In AQIP's fiscal year 2016-17 funding plan ARB proposed a
new program to allocate $40 million to very low carbon fuel
production. This funding will be limited to renewable fuels
that are produced in California and would be further limited to
those fuels which meet a designated carbon intensity threshold.
California GO-Biz has appointed a Zero Emission Vehicle (ZEV)
infrastructure deputy to assist in the development of ZEV
infrastructure including the development of hydrogen production
and fueling stations. The ZEV infrastructure deputy has worked
with local governments and various companies to remove barriers
to developing ZEV infrastructure.
The Council established by this bill is designed to coordinate
these different efforts, identify gaps in these efforts and make
recommendations to the legislature to address those gaps.
Analysis Prepared by:
Michael Jarred / NAT. RES. / (916) 319-2092 FN:
0004083