BILL ANALYSIS Ó SB 513 Page 1 Date of Hearing: August 19, 2015 ASSEMBLY COMMITTEE ON APPROPRIATIONS Jimmy Gomez, Chair SB 513 (Beall) - As Amended August 17, 2015 ----------------------------------------------------------------- |Policy |Transportation |Vote:|12 - 3 | |Committee: | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | ----------------------------------------------------------------- Urgency: No State Mandated Local Program: NoReimbursable: No SUMMARY: This bill makes numerous modifications to the Carl Moyer Memorial Air Quality Standards Attainment Program and local air district AB 923 incentive programs. Specifically, this bill: SB 513 Page 2 1)Clarifies that local air districts can continue to levy AB 923 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)Specifies that repowering of school buses and alternative fuel and electric infrastructure are eligible AB 923 projects. 3)Requires the Air Resources Board (ARB), in collaboration with the air districts, to adjust, as specified, the cost-effectiveness formula used to evaluate project proposals under the Moyer Program. 4)Allows for leveraging of Moyer Program funds with other public funding sources, including the Greenhouse Gas Reduction Fund (GGRF). 5)Recognizes greenhouse gas (GHG) reductions, so that funded projects can achieve both criteria pollutant and GHG emissions reductions. 6)Allows the ARB to determine additional project categories under the Moyer Program as necessary to meet state air quality goals and allows funding for infrastructure projects and certain additional marine projects. 7)Streamlines and updates program administrative requirements, and increases the statutory cap on administrative and outreach expenditures (as a percentage of total program expenditures) by the ARB and local districts; generally a 0.5% increase for the ARB and increases of 1.25% for larger districts and 2.5% for smaller districts. FISCAL EFFECT: The Carl Moyer Program is funded through a portion of the smog SB 513 Page 3 abatement fee included in the annual registration of newer vehicles ($6) and through a fee on the sale of new tires ($0.75) that together generate about $69 million annually. ARB disburses these funds to the local air districts, who implement the programs in their local jurisdictions. The AB 923 program is funded from a $2 surcharge on vehicle registration fees in areas where a local air district's board has approved the collection of these funds. Currently, 19 of the states 35 air districts collect these funds, which total about $50 million annually statewide. This bill will create unknown, but potentially significant cost pressures by expanding eligible uses of the funds generated by both programs. There will also be additional cost pressure on the GGRF for projects that seek funding from both the GGRF and the Moyer Program. The ARB indicates that it will not require additional administrative resources to implement the provisions of this bill. The increase in the cap on administrative costs will allow ARB to spend an additional $350,000 on administration and $350,000 on outreach annually from current program revenues. The local districts together would be allowed to spend at least an additional $860,000 from current Moyer Program revenues on administration. For the AB 923 program, local districts together would be allowed to spend an additional $625,000 from current program revenues on administration annually. COMMENTS: Background and Purpose. The Moyer Program, enacted in 1999 and administered by the ARB and local air districts, funds the incremental cost of cleaner-than-required vehicles, engines, and SB 513 Page 4 equipment. The primary objective of the program, which provides grants through the state's 35 air districts, is to achieve air quality emission reductions that would not otherwise occur through regulations or other legal mandates. The Moyer Program was expanded by AB 923 (Firebaugh), Chapter 707, Statutes of 2004 which authorized 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 extended, until January 1, 2024, the assessment of the higher tire fee and the ability of locals to assess the vehicle registration surcharge. AB 8 also required ARB to convene a workgroup to evaluate the program. The workgroup identified a number of program improvements, and many were addressed by ARB in 2014 through updates to the Moyer Program Guidelines. SB 513 encompasses recommendations from the work group that require statutory changes. Specifically, SB 513, in part, clarifies that local air districts can continue to levy program fees even after they achieve attainment, makes adjustments to cost-effectiveness calculations to incentivize the statewide deployment of cleaner technologies, encourages leveraging of other public funding sources, recognizes GHG reductions so that funded projects can achieve both criteria pollutant and GHG emissions reductions, and streamlines program administration. Analysis Prepared by:Chuck Nicol / APPR. / (916) 319-2081 SB 513 Page 5