BILL ANALYSIS Ó
SB 513
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Date of Hearing: July 13, 2015
ASSEMBLY COMMITTEE ON TRANSPORTATION
Jim Frazier, Chair
SB
513 (Beall) - As Amended June 2, 2015
SENATE VOTE: 40-0
SUBJECT: Carl Moyer Memorial Air Quality Standards Attainment
Program: fees.
SUMMARY: Updates the Carl Moyer Air Quality Standards
Attainment Program (Moyer Program) and local incentive programs
(AB 923 Program). Specifically, this bill:
1)Clarifies that local air districts can continue to levy
program fees, even after they come into compliance with
National and California Ambient Air Quality Standards
(attainment), in order to maintain compliance with the
standards.
2)Adjusts the cost-effectiveness formula for projects to more
effectively incentivize the statewide deployment of cleaner
technologies.
3)Encourages leveraging of other public funding sources to more
readily accomplish program goals.
4)Recognizes greenhouse gas (GHG) reductions so that funded
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projects can achieve both criteria pollutant and GHG emissions
reductions.
5)Streamlines and updates program administrative requirements.
6)Deletes references to obsolete and redundant code sections,
revises and recasts a number of provisions, defines a variety
of terms, and makes related, clarifying amendments.
EXISTING LAW:
1)Established the Moyer Program [AB 1571 (Villaraigosa), Chapter
923, Statutes of 1999], administered by the Air Resources
Board (ARB) and local air districts, to fund the incremental
cost of cleaner-than-required vehicles, engines, and
equipment. The primary objective of the program is to achieve
air quality improvements that would not otherwise occur
through regulations or other legal mandates. The Moyer
Program is funded by vehicle registration surcharges adopted
by local air districts in non-attainment areas.
2)Expanded the Moyer Program [AB 923 (Firebaugh), Chapter 707,
Statutes of 2004] to cover additional pollutants and engines,
imposes a $1 fee on tire sales to fund the Moyer Program and
CalRecycle, and established air quality improvement programs
through local air districts.
3)Extended the date for each of the various fees and surcharges
that support the Moyer Program and the AB 923 Program [AB 8
(Perea), Chapter 401, Statutes of 2013] until January 1, 2024,
and requires ARB to convene a workgroup to evaluate the Moyer
and
AB 923 Programs and make recommendations for updates.
FISCAL EFFECT: According to the Senate Appropriations
Committee, this bill would result in:
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1)Minor and absorbable costs to the Air Pollution Control Fund
(APCF) for ARB to update regulations;
2)Unknown cost pressures, at least in the millions of dollars,
from the APCF for increased uses of the AB 923 Program; and,
3)Unknown cost pressures, at least in the millions of dollars to
the Greenhouse Gas Reduction Fund (GGRF) for projects that may
seek funding from both the GGRF and Moyer Program.
COMMENTS: The Moyer Program provides grants through the state's
35 local air districts for deployment of engines, equipment, and
emission-reduction technologies that are cleaner-than-required
by current laws or regulations. The Moyer Program was expanded
upon in 2004 with the passage of AB 923 which authorized, among
other things, an increase in the surcharge local air districts
are allowed to levy on motor vehicle registrations within their
jurisdictions from $4 to $6, expanded the types of emissions
covered by the Moyer Program and increased the tire fee by $0.75
to fund programs under ARB and local air districts to mitigate
or remediate air pollution caused by tires.
AB 8 (Perea), Chapter 401, Statutes of 2013, included a
provision extending the fees to fund the Moyer Program until
January 1, 2024, and required ARB to convene a workgroup to
evaluate the program. To satisfy this requirement, ARB and the
California Air Pollution Control Officers Association, the
sponsor of SB 513, held two public workgroup meetings to solicit
input from stakeholders. Specifically, stakeholders were asked
to identify program limitations and identify program
improvements.
The workgroup identified a number of program improvements and
many were addressed by ARB through updates to the Moyer Program
Guidelines in 2014. The remaining recommendations, those that
required specific statutory changes, are addressed in SB 513.
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Specifically, SB 513 addresses a number of issues to make the
Moyer Program and AB 923 Program more effective by, among other
things, clarifying that local air districts can continue to levy
program fees even after they achieve attainment, making
adjustments to cost-effectiveness calculations to incentivize
the statewide deployment of cleaner technologies, encouraging
leveraging of other public funding sources, recognizing GHG
reductions so that funded projects can achieve both criteria
pollutant and GHG emissions reductions, and streamlining and
creating efficiencies in the administration of the program.
Leveraging Funding Sources: One of the primary objectives of
the 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
is to help ensure the program does 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 GHG emission reduction programs
and the California Energy Commission's Alternative and Renewable
Fuel and Vehicle Technology Program. AB 1507 aimed to address
the unintended consequence of discouraging projects that
accomplish multiple goals. SB 513 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 including, but not limited to,
the GGRF, 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.
With this change, multiple project sources can be used
cumulatively for projects that achieve multiple goals.
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Changing Cost-Effectiveness Calculations: The Moyer Program
prohibits grants for projects with a cost-effectiveness of more
than $13,600 per ton of nitrogen oxide (NOx) reduced in the
state. For projects obtaining reactive organic gas and
particulate matter (PM) reductions, ARB determines appropriate
adjustment factors to calculate a weighted cost-effectiveness.
SB 513 removes the requirement that grants not be made for
projects with a cost-effectiveness calculation of more than
$13,600 per ton of NOx and instead requires ARB, in
collaboration with air districts, to establish
cost-effectiveness values that considers additional factors such
as 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.
SB 513 originally included provisions allowing ARB and air
districts to consider "ancillary benefits" when calculating the
cost-effectiveness of projects and for project selection;
however, in response to concerns voiced by the Senate
Environmental Quality Committee about the definition of
ancillary benefits being too broad, the author amended SB 513 in
the Senate Appropriations Committee to narrow the definition.
The Senate Appropriations Committee felt the definition was
still too broad and removed the ancillary benefits provisions
altogether. The author has indicated his intention to continue
to work on the ancillary benefits language and reinsert the
language at a later date, pending approval by Senate and
Assembly policy committees.
Expanding Project Categories: Under the AB 923 Program,
eligible projects include the purchase of new school buses or
retrofit of existing school buses; vehicle retirement 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
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$500 per dispenser. Additionally, air districts are prohibited
from using more than 5% of funds collected for administrative
expenses. Eligible projects under the Moyer Program include the
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.
SB 513 would add repowering of school buses as an eligible
project and remove the $20,000 cap on replacement of natural gas
fuel tanks on school buses. SB 513 also 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%.
Additionally, SB 513 changes "fueling or electrification
infrastructure" to "fueling or energy infrastructure to fuel or
power covered sources" to allow funding to go toward a variety
of alternative energy fueling programs.
Committee comments: The Moyer and AB 923 Programs have been
widely successful and have helped private businesses and public
agencies voluntarily clean up older, dirtier engines and improve
air quality. The programs have resulted in the retrofit or
replacement of an estimated 48,000 engines and reduced 146,000
tons of ozone precursors and 6,000 tons of diesel particulates
through the investment of over $980 million in state and local
funds.
While the Moyer Program is intended to fund "surplus"
improvements, the sponsor correctly notes that for many years,
virtually all mobile emission reductions were surplus; however,
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as the Legislature and ARB have enacted more laws and
regulations in this arena, the bar has moved higher for
achieving surplus reductions. Also, cleaner technology is more
costly-- making it more expensive for business owners to clean
up their equipment. SB 513 provides opportunities for ARB and
local air districts to take on more sophisticated, advanced
technology projects and leverage additional funds, where needed.
SB 513 also broadens the scope of the programs to help them
continue to achieve their stated goals.
Related legislation: AB 857 (Perea), establishes five-year set
aside of 50% or $100 million, whichever is greater, per year of
funds from the California Clean Truck, Bus, and Off-Road Vehicle
and Equipment Technology Program for commercial deployment of
existing zero- and near-zero-emission heavy-duty Class 7 and 8
trucks that meet or exceed ARBs low NOx emission standard. AB
857 is pending in the Senate Appropriations Committee.
Previous legislation: AB 1571 (Villaraigosa), Chapter 923,
Statutes of 1999, established the Moyer Program through which
ARB provides grants to offset the incremental costs of
purchasing or retrofitting engines in order to reduce specified
emissions.
AB 923 (Firebaugh), Chapter 707, Statutes of 2004, expanded the
Moyer Program to include agricultural sources of air pollution
as well as cars and light-duty trucks and to include hydrocarbon
and particulate matter pollution. AB 923 also provided
additional funding for the Moyer Program from an adjustment to
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the tire fee, and authorized local air districts to increase
motor vehicle registration fees by up to $2 for programs to
reduce air pollution.
AB 1507 (Lieu), Chapter 571, Statutes of 2010, required ARB, by
July 1, 2011, to revise project guidelines for a project that
reduces GHG emissions to allow funds from specified programs and
funding sources to be used for a project also funded under the
Moyer Program or the goods Movement Emission Reduction Program
without those additional public funds being factored into the
criteria emission reduction cost-effectiveness calculations
under either of those programs.
AB 8 (Perea), Chapter 401, Statutes of 2013, extended programs
that accelerate the turnover of older vehicles and equipment and
invest in the development and deployment of advanced
technologies necessary to achieve the California's air quality,
climate, and energy goals until January 1, 2024.
REGISTERED SUPPORT / OPPOSITION:
Support
California Air Pollution Control Officers Association (Sponsor)
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American Lung Association of California
Antelope Valley Air Quality Management District
Bay Area Air Quality Management District
Butte County Air Quality Management District
California Electric Transportation Coalition
California Fresh Fruit Association
California Natural Gas Vehicle Coalition
CALSTART
Clean Energy
California Trucking Association
Coalition for Clean Air
Glen County Board of Supervisors
Green California
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Imperial County Air Pollution Control District
Imperial County Board of Supervisors
Northern Sierra Air Quality Management District
Rural County Representatives of California
San Joaquin Valley Air Pollution Control District
Sacramento Municipal Utility District
Sacramento Metropolitan Air Quality Management District
Santa Barbara County Air Pollution Control District
South Coast Air Quality Management District
Tehema County Board of Supervisors
US Hybrid
Ventura County Air Pollution Control District
Yolo-Solano Air Quality Management District
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Opposition
None on file
Analysis Prepared by:Victoria Alvarez / TRANS. / (916)
319-2093