BILL ANALYSIS                                                                                                                                                                                                    Ó




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          |SENATE RULES COMMITTEE            |                        SB 513|
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                                UNFINISHED BUSINESS 


          Bill No:  SB 513
          Author:   Beall (D)
          Amended:  8/31/15  
          Vote:     21  

           SENATE TRANS. & HOUSING COMMITTEE:  10-0, 4/21/15
           AYES:  Beall, Cannella, Allen, Bates, Galgiani, Leyva, McGuire,  
            Mendoza, Roth, Wieckowski
           NO VOTE RECORDED:  Gaines

           SENATE ENVIRONMENTAL QUALITY COMMITTEE:  7-0, 4/29/15
           AYES:  Wieckowski, Gaines, Bates, Hill, Jackson, Leno, Pavley

           SENATE APPROPRIATIONS COMMITTEE:  7-0, 5/28/15
           AYES:  Lara, Bates, Beall, Hill, Leyva, Mendoza, Nielsen

           SENATE FLOOR:  40-0, 6/3/15
           AYES:  Allen, Anderson, Bates, Beall, Berryhill, Block,  
            Cannella, De León, Fuller, Gaines, Galgiani, Glazer, Hall,  
            Hancock, Hernandez, Hertzberg, Hill, Hueso, Huff, Jackson,  
            Lara, Leno, Leyva, Liu, McGuire, Mendoza, Mitchell, Monning,  
            Moorlach, Morrell, Nguyen, Nielsen, Pan, Pavley, Roth, Runner,  
            Stone, Vidak, Wieckowski, Wolk

           ASSEMBLY FLOOR:  54-26, 9/2/15 - See last page for vote

           SUBJECT:   Carl Moyer Memorial Air Quality Standards Attainment  
                     Program: fees


          SOURCE:    California Air Pollution Control Officers Association

          DIGEST:   This bill makes a number of changes to the Carl Moyer  
          Memorial Air Quality Standards Attainment Program (Carl Moyer  
          Program).








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          Assembly Amendments (1) authorize the Carl Moyer Program to  
          provide grants for school bus projects, including replacement,  
          repower, and retrofits, consistent with the existing Lower  
          Emission School Bus Program; and (2) make other technical and  
          clarifying changes.

          ANALYSIS: 
          
          Existing law:

          1)Establishes, pursuant to AB 1571 (Villaraigosa, Chapter 923,  
            Statutes of 1999), 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.  The  
            Carl Moyer Program provides approximately $60 million for  
            projects each year throughout the state.  The Carl Moyer  
            Program was initially funded primarily through General Fund  
            appropriations.

          2)Expands the Carl Moyer Program, pursuant to AB 923 (Firebaugh,  
            Chapter 707, Statutes of 2004), to address particulate matter  
            (PM) and reactive organic gases (ROG) emissions in addition to  
            nitrogen oxide (NOx) emissions.  It established ongoing  
            funding by authorizing air districts to collect an additional  
            $2 surcharge on vehicle registration fees to fund  
            emission-reduction projects and by establishing a fee of 75  
            cents per tire.  The AB 923 program funds Carl Moyer  
            Program-eligible projects as well as agricultural equipment,  
            school bus, and vehicle scrap programs.  

          3)Includes a provision, pursuant to AB 8 (Perea, Chapter 401,  
            Statutes of 2013), extending the tire fees and the AB 923  
            program until January 1, 2024.  (The vehicle registration  
            surcharge does not have a sunset.)  AB 8 also required ARB to  
            convene a workgroup to evaluate the Carl Moyer Program.  ARB  
            and the air districts convened two public meetings of the  
            workgroup, in June and October 2014, to solicit input from  








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            stakeholders.  ARB and the air districts then worked together  
            to develop statutory language to implement the Carl Moyer  
            Program improvements identified by the workgroup.  

          4)Requires a project to meet a cost-effectiveness test in order  
            to be eligible for funding.  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, to help ensure the Carl  
            Moyer Program did not overpay for projects receiving funds  
            from other sources.  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.  AB 1507 aimed to address the unintended  
            consequence of discouraging projects that accomplish multiple  
            goals.

          5)Prohibits the Carl Moyer Program from providing grants to  
            projects with a cost-effectiveness of more than $13,600 per  
            ton of NOx reduced in the state or a higher value that  
            reflects Consumer Price Index adjustments as determined by  
            ARB.  For projects obtaining ROG and PM reductions, ARB shall  
            determine appropriate adjustment factors to calculate a  
            weighted cost-effectiveness.  

          6)Provides that the Carl Moyer Program shall only fund the  
            "incremental cost" of a project, defined as the cost of the  
            project minus a baseline cost that would otherwise be incurred  
            by the applicant in the normal course of business (e.g., to  
            meet existing federal, state, or local requirements).   
            Existing law also states that incremental cost may include  
            added lease or fuel costs as well as incremental capital  
            costs.

          7)Provides that the following projects are eligible under the AB  
            923 program:  purchase of new school buses or retrofit of  
            existing school buses; vehicle retirement ("scrap") or repair;  








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            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.

          8)Provides that the following projects are eligible under the  
            Carl Moyer Program:  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  
            Carl Moyer Program may fund installation of fueling or  
            electrification infrastructure.  
          9)Provides that funds not expended by an air district within a  
            two-year period shall revert back to ARB within 60 days for  
            further allocation.  

          This bill makes multiple changes to the Carl Moyer and AB 923  
          programs, including the following.  

          1)Requires ARB to revise program guidelines to encourage  
            leveraging of other public funding sources.  

          2)Requires ARB, in collaboration with air districts, to  
            establish cost-effectiveness values in the program guidelines  
            that account for factors such as the cost of emission control  
            technologies and the cost-effectiveness values for NOx, PM, or  
            ROG for any adopted rule or control measure in any district's  
            approved state implementation plan or ARB rule.  

          3)Expands project eligibility to authorize repower and retrofit  
            school buses with cleaner engines; removes the dollar cap on  
            replacement of natural gas fuel tanks and dispensers on school  
            buses; removes the requirement that the bus be owned by a  
            school district; adds funding of certain alternative fuel and  
            electric infrastructure projects; and increases the  
            administrative set-aside.









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          4)Deletes references to obsolete and redundant code sections,  
            revises and recasts a number of provisions, and makes related,  
            clarifying amendments.

          Comments
          
          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 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; allowing greater  
          leveraging of funds from multiple sources; expanding eligible  
          project categories; and further streamlining the Carl Moyer  
          Program.  The source of this bill is the California Air  
          Pollution Control Officers Association (CAPCOA), which  
          represents the state's 35 local air districts.

          Time for an update.  The Carl Moyer Program and the AB 923  
          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 and AB 923 programs were based on technology ideas  
          available at that time.  This bill will 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  
          updates the Carl Moyer and AB 923 programs to help them more  
          effectively address the state's air quality concerns.
          
          FISCAL EFFECT:   Appropriation:    No          Fiscal  
          Com.:YesLocal:   No

          According to the Assembly Appropriations Committee:








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           The Carl Moyer Program is funded through a portion of the smog  
            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 state's 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 Greenhouse Gas Reduction Fund (GGRF) for projects that  
            seek funding from both the GGRF and the Carl 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 Carl 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. 

          SUPPORT:   (Verified9/1/15)

          California Air Pollution Control Officers Association (source)
          American Lung Association
          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
          California Trucking Association 








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          CALSTART
          Clean Energy 
          Coalition for Clean Air
          Glenn County Board of Supervisors
          Green California
          Imperial County Air Pollution Control District
          Imperial County Board of Supervisors
          Rural County Representatives of California
          Sacramento Metropolitan Air Quality Management District
          San Joaquin Valley Air Pollution Control District 
          Santa Barbara County Air Pollution Control District
          South Coast Air Quality Management District
          Tehama County Board of Supervisors
          U.S. Hybrid
          Yolo-Solano Air Quality Management District


          OPPOSITION:   (Verified9/1/15)


          None received

          ASSEMBLY FLOOR:  54-26, 9/2/15
          AYES:  Achadjian, Alejo, Bloom, Bonilla, Bonta, Brown, Burke,  
            Calderon, Campos, Chau, Chiu, Chu, Cooley, Cooper, Dababneh,  
            Daly, Dodd, Eggman, Frazier, Cristina Garcia, Eduardo Garcia,  
            Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Roger Hernández,  
            Holden, Jones-Sawyer, Levine, Lopez, Low, Mayes, McCarty,  
            Medina, Mullin, Nazarian, O'Donnell, Olsen, Perea, Quirk,  
            Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago, Mark Stone,  
            Thurmond, Ting, Weber, Williams, Wood, Atkins
          NOES:  Travis Allen, Baker, Bigelow, Brough, Chang, Chávez,  
            Dahle, Beth Gaines, Gallagher, Grove, Hadley, Harper, Irwin,  
            Jones, Kim, Lackey, Linder, Maienschein, Mathis, Melendez,  
            Obernolte, Patterson, Steinorth, Wagner, Waldron, Wilk


          Prepared by:Erin Riches / T. & H. / (916) 651-4121
          9/2/15 18:54:17


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