BILL ANALYSIS Ó
SENATE COMMITTEE ON TRANSPORTATION AND HOUSING
Senator Jim Beall, Chair
2015 - 2016 Regular
Bill No: SB 513 Hearing Date: 4/21/2015
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|Author: |Beall |
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|Version: |4/6/2015 |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant|Erin Riches |
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SUBJECT: Carl Moyer Memorial Air Quality Standards Attainment
Program
DIGEST: This bill makes a number of changes to the Carl Moyer
Memorial Air Quality Standards Attainment Program (Carl Moyer
Program).
ANALYSIS:
Existing law establishes the Carl Moyer Memorial Air Quality
Standards Attainment Program (Carl Moyer Program) under the
state Air Resources Board (ARB). This program provides grants
through the state's 35 local air quality management and air
pollution control districts (air districts) for deployment of
engines, equipment, and emission-reduction technologies that are
cleaner than required by current laws or regulations. AB 923
(Firebaugh), Chapter 707, Statutes of 2004, expanded the Carl
Moyer Program and authorized air districts to collect a
surcharge on vehicle registration fees to fund emission
reduction projects. The AB 923 program funds Carl Moyer
Program-eligible projects and agricultural equipment, school
bus, and vehicle scrap programs.
AB 8 (Perea), Chapter 401, Statutes of 2013, included a
provision extending the fees to fund the Carl Moyer Program
until January 1, 2024. AB 8 also required ARB to convene a
workgroup to evaluate the program. ARB and the air districts
convened two public meetings of the workgroup, in June and
October 2014, to solicit input from stakeholders. ARB and the
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air districts then worked together to develop statutory language
to implement the program improvements identified by the
workgroup. This bill is the result of those efforts.
This bill makes multiple changes to the Carl Moyer and AB 923
programs, including the following.
Leveraging of other funding sources
One of the primary objectives of the Carl Moyer Program is to
obtain cost-effective emission reductions. In order to be
eligible for funding, a project must meet a cost-effectiveness
test. The air district reviewing the project application
calculates the project's cost-effectiveness by dividing the
annualized cost of the potential project (dollars per year) by
the annual weighted surplus emission reductions the project will
achieve (tons per year). Initially, other public funds had to
be deducted from the cost-effectiveness calculation. The intent
of this requirement was to help ensure the program did not
overpay for projects receiving funds from other sources, as well
as to ensure that participants provide a meaningful financial
commitment to the project. AB 1507 (Lieu), Chapter 571,
Statutes of 2010, required ARB to revise program guidelines to
exclude from the calculation, funds from federal greenhouse gas
(GHG) emission reduction programs and the California Energy
Commission's Alternative and Renewable Fuel and Vehicle
Technology Program (ARFVTP). AB 1507 aimed to address the
unintended consequence of discouraging projects that accomplish
multiple goals.
This bill requires ARB, by July 1, 2017, to revise the
guidelines to exclude funds from federal, state, and local
programs, or other funding sources, from the cost-effectiveness
calculation. These funding sources include, but are not limited
to, the Greenhouse Gas Reduction Fund (commonly known as
cap-and-trade), energy diversity programs, and programs that are
intended to provide emissions reductions but do not require
those reductions to count toward federal air quality standards.
Cost-effectiveness calculation
The Carl Moyer Program prohibits grants for projects with a
cost-effectiveness of more than $13,600 per ton of NOx reduced
in the state or a higher value that reflects CPI adjustments as
SB 513 (Beall) Page 3 of ?
determined by ARB. For projects obtaining reactive organic gas
and particulate matter (PM) reductions, ARB shall determine
appropriate adjustment factors to calculate a weighted
cost-effectiveness.
This bill requires ARB, in collaboration with air districts, to
establish cost-effectiveness values that consider factors
including, but not limited, to: the ability of a project to
provide ancillary benefits (see below); the cost of emission
control technologies; and the cost-effectiveness values for NOx,
PM, or reactive organic gases for any adopted rule or control
measure in any district's approved state implementation plan or
ARB rule. This bill also authorizes an air district to
recognize the ancillary benefit when determining the grant
amount.
Ancillary benefits
Under the Carl Moyer Program, covered emissions include only
NOx, reactive organic gases, and PM. GHG emissions reductions
do not increase the cost-effectiveness calculation or the amount
of funding for a project.
This bill defines ancillary benefits as reductions in GHG and
short-lived climate pollutants; benefits to communities with the
most significant exposure to pollution, including but not
limited to communities of minority populations or low-income
populations; fuel efficiency improvements; and the deployment of
advanced technology.
Expanding project categories
Under the AB 923 program, the following projects are eligible:
purchase of new school buses or retrofit of existing school
buses; vehicle retirement ("scrap") or repair; replacement of
natural gas fuel tanks on school buses owned by a school
district that are 14 years or older, not to exceed $20,000 per
bus; and enhancement of deteriorating natural gas fueling
dispensers of fueling infrastructure operated by a school
district with a one-time funding amount of not more than $500
per dispenser. The air district may not use more than 5% of
funds collected for administrative expenses.
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This bill: adds repowering of school buses as an eligible
project; removes the $20,000 cap on replacement of natural gas
fuel tanks on school buses; removes the requirement that the bus
be owned by a school district; removes the $500 cap on
enhancement of deteriorating natural gas fueling dispensers;
adds funding of alternative fuel and electric infrastructure
projects solicited and selected through a competitive bid
process; and increases the administrative set-aside to 6.25%.
Under the Carl Moyer Program, the following projects are
eligible: purchase of new very low or zero-emission vehicles or
heavy-duty engines; retrofit of engines or replacement of old
engines with engines certified to more stringent emissions
standards or with electric motors and drives; purchase and use
of emission-reducing add-on equipment; and light- and
medium-duty vehicle projects. The program may fund installation
of fueling or electrification infrastructure.
This bill changes "fueling or electrification infrastructure" to
"fueling or energy infrastructure to fuel or power covered
sources."
COMMENTS:
1.Purpose. The author states that ARB and the state's local air
districts, with public and stakeholder input, have identified
several limitations of the Carl Moyer Program. These include
the inability to provide meaningful grant amounts to the
cleanest, most advanced technologies; the inability to
recognize GHG emission reductions and other project benefits;
and the inability to combine Carl Moyer Program funding with
other funding sources. This bill addresses these limitations
by establishing a process to adjust the cost-effectiveness
limit; acknowledging ancillary benefits such as GHG emission
reductions, benefits to environmental justice communities, and
fuel efficiency; allowing greater leveraging of funds from
multiple sources; expanding eligible project categories; and
further streamlining the program. This bill is sponsored by
the California Air Pollution Control Officers Association
(CAPCOA), which represents the state's 35 local air districts.
2.Time for an update. The Carl Moyer Program and the AB 923
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program have enjoyed significant success: Since 1998, these
programs have cleaned up more than 46,000 engines and
eliminated 174,600 tons of ozone precursors and 6,400 tons of
PM. CAPCOA notes that the project types originally identified
in the Carl Moyer Program and AB 923 program were based on
technology ideas available at that time. This bill will
update project categories and provide flexibility to better
allow for both current and future technology opportunities.
CAPCOA also notes that for many years, virtually all mobile
emission reductions were surplus; however, as the Legislature
and ARB have enacted more laws and regulations, the bar has
moved much higher for achieving surplus reductions. In
addition, the cleanest technology to achieve air quality
standards has gotten more expensive, making it more difficult
for business owners to clean up their equipment. This bill
provides needed updates to the Carl Moyer and AB 923 programs
to help them more effectively address the state's air quality
concerns.
3.Double referred. This bill has also been referred to the
Environmental Quality Committee.
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes
Local: No
POSITIONS: (Communicated to the committee before noon on
Wednesday,
April 15, 2015.)
SUPPORT:
California Air Pollution Control Officers Association (sponsor)
American Lung Association
Bay Area Air Quality Management District
California Electric Transportation Coalition
California Natural Gas Vehicle Coalition
CALSTART
Imperial County Air Pollution Control District
Sacramento Metropolitan Air Quality Management District
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San Joaquin Valley Air Pollution Control District
Santa Barbara County Air Pollution Control District
South Coast Air Quality Management District
U.S. Hybrid
Yolo-Solano Air Quality Management District
OPPOSITION:
None received.
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