BILL ANALYSIS
SB 1247
SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
Byron D. Sher, Chairman
2003-2004 Regular Session
BILL NO: SB 1247
AUTHOR: Soto
AMENDED: April 16, 2004
FISCAL: Yes HEARING DATE: April 19, 2004
URGENCY: No CONSULTANT: Kip Lipper
SUBJECT : AIR POLLUTION:
INCENTIVE-BASED EMISSION REDUCTION
PROGRAM FOR INTERNAL COMBUSTION ENGINES
SUMMARY :
Existing law , under Division 26 (Commencing with Section
39000) of the Health and Safety Code:
1)Designates the State Air Resources Board (ARB) as the state
agency charged with coordinating statewide efforts to attain
and maintain ambient air quality standards, and with the
primary responsibility for the control of air pollution from
vehicular sources.
2)Designates air pollution control districts and air quality
management districts as having the primary responsibility
for the control of air pollution from all sources other than
vehicular sources, and, subject to the powers and duties of
the state board, requires that districts adopt and enforce
rules and regulations to achieve and maintain the state and
federal ambient air quality standards in all areas affected
by emission sources under their jurisdiction.
3)Establishes the Carl Moyer Memorial Air Quality Standards
Attainment Program to provide grants to offset the
incremental cost of projects that reduce emissions of oxides
of nitrogen (NOx) from heavy-duty onroad vehicles, offroad
nonrecreation equipment and vehicles, locomotives, diesel
marine vessels, stationary agricultural engines, and other
high-emitting diesel engines in the state.
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4)Under regulations adopted by the ARB pursuant to its general
authority under state law and under the state budget,
establishes the Lower-Emission Schoolbus Program to reduce
school children's exposure to air pollution emitted by older
schoolbuses through a schoolbus replacement and
infrastructure component and a particulate matter retrofit
component for diesel schoolbuses, and establish various
light-duty vehicle retirement programs to encourage
voluntary retirement of older, high-emitting vehicles.
This bill :
1)Establishes the Incentive-Based Emission Reduction Program
for Internal Combustion Engines to reduce unhealthful air
emissions from internal combustion engines through the
application of financial incentives-based programs.
2)Provides that the program is administered by the ARB and the
districts, establishes the Incentive-Based Emission
Reduction Program for Internal Combustion Engines Trust Fund
in the State Treasury, and makes funds in the trust fund
available, upon appropriation by the Legislature, to carry
out the purposes of the bill.
3)Authorizes revenues in the fund to be expended on incentive
programs including, but not limited to, the Carl Moyer
Program, the Lower-Emission School Bus Program, light-duty
vehicle programs, lawnmower electrification programs, and
projects to retrofit or replace agricultural engines and
pumps
4)Requires each district which elects to participate in the
program to establish funding priorities for pollution source
reduction projects after considering specified principles
and criteria, to coordinate with any local, state, or
federal agency, or with any private organization concerned
with reducing emissions from internal combustion engines
that it determines appropriate, and to identify potential
sources of shared funding responsibilities.
5)Requires that 50% of the moneys allocated to each district
be expended in a manner that directly addresses air
pollution or health impacts resulting from the refining and
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combustion of gasoline and diesel fuel in communities with
the most significant exposure to air pollution.
6)From March 1, 2007 through March 1, 2023 requires the ARB
and participating districts to provide an annual report to
the Legislature on the program.
7)Sunsets the bill's provisions on December 31, 2022.
8)Makes various findings and declarations relative to
vehicular air pollution.
COMMENTS :
1)Purpose of Bill . According to the author and sponsor (the
South Coast Air Quality Management District):
"Existing resources are inadequate to mitigating the public
health and environmental impacts caused by the combustion of
petroleum products, especially in older engines. The
combustion of gasoline and diesel fuels is the major source
of ozone precursors, toxic air contaminants and particulate
matter throughout the urbanized areas of the state. These
pollutants are known to cause cancer in humans, aggravate
asthma conditions among children and are linked with other
respiratory diseases affecting all age groups.
"These pollutants are also responsible for significant
environmental degradation. The harm to public health and
the environment is measured in numerous ways, including
costs of medical care for related illnesses, lost attendance
in schools by children afflicted with asthma and other
respiratory illnesses, diminished job performance, and
ecological impacts.
"In order to remedy this problem, SB 1247 proposes to
establish a special fund to finance a comprehensive
statewide set of incentives authorized by the legislation to
reduce pollution from older engines in accordance with a set
of principles that emphasize cost-effectiveness.
"The purpose of this SB 1247 is to reduce unhealthful air
emissions from internal combustion engines through the
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application of financial incentives-based programs, relying
to the greatest extent possible on existing programs with
proven cost-effective results.
"SB 1247 establishes a framework for reducing emissions from
internal combustion engines through a set of principles and
criteria to guide the administration and implementation of
programs authorized under this act to reduce emissions from
essentially all forms of older internal combustion engines.
"SB 1247 establishes the Internal Combustion Engine
Emissions Reductions Programs Trust Fund in the State
Treasury to receive funds appropriated by the Legislature to
carry out the purposes of this bill.
"SB 1247 is the product of a consensus-based process
involving representatives from the regulated community,
environmental and community-based organizations, and
regulatory agencies. The bill is expected to evolve in an
orderly process, starting with principles and criteria to
guide the application of financial incentive programs. The
second phase identifies program categories. Subsequent
phases will add implementation details to the identified
programs, sources of funding and fund allocations."
2)Bill Does Not Specify Funding Source for Laudable Programs
It Proposes to Fund; Committee Should Re-Review Bill Once It
is Amended to Specify a Funding Source . As presently
drafted, and as the author and sponsor note in the last
sentence of the prior comment in this analysis, this measure
establishes the statutory framework for a comprehensive
funding program to reduce emissions from vehicular sources,
but presently is silent as to how that program will be
funded.
Until an ongoing funding source is specified in the bill, it
is difficult to evaluate how its enactment will improve the
current "hand-to-mouth" funding status for the clean air
programs it purports to fund. If, as the author's office
indicates, "Subsequent phases will add implementation
details to the identified programs, sources of funding and
fund allocations", the committee may wish to ask the author
to return the bill to committee once a funding source is
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amended into the bill so that it can review the source.
Below is a summary of the two state clean air programs
referenced in the bill, of the local district programs
referenced, and, where available, the amount of dollars
appropriated in past budgets:
-----------------------------------------------------------
| a) Carl Moyer Memorial Air Quality Standards |
| Attainment Program (Chapter 9 (Commencing with |
| Section 44275) of the Health and Safety Code: |
| |
| This program provides funds on an incentive-basis for |
| the incremental cost of cleaner than required engines |
| and equipment. Eligible projects include cleaner |
| on-road, off-road, marine, locomotive and stationary |
| agricultural pump engines, as well as forklifts, |
| airport ground support equipment, and auxiliary power |
| units. |
| |
| The program achieves near-term reductions in emissions |
| of oxides of nitrogen (NOx), which are necessary for |
| California to meet its clean air commitments under |
| the State Implementation Plan. In addition, local |
| air districts use these NOx emission reductions to |
| meet commitments in their conformity plans, thus |
| preventing the loss of federal funding for local |
| areas throughout California. The program also |
| reduces particulate matter (PM), a component of |
| diesel exhaust the Air Resources Board recently |
| identified as a toxic air contaminant. |
| |
| Prior to the 2002-2003 Fiscal Year, the program was |
| funded with General Fund on an ad hoc basis. In the |
| spring of 2002, California voters passed Proposition |
| 40, the California Clean Water, Clean Air, Safe |
| Neighborhood Parks, and Coastal Protection Act, which |
| allocated $50 million to the ARB over two years for |
| distribution to air districts for projects that |
| "affect air quality in state and local parks and |
| recreation areas" in accordance with the Carl Moyer |
|guidelines. |
|-----------------------------------------------------------|
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| |
-----------------------------------------------------------
b) Light-Duty Vehicle Retirement Program (Article 10
(Commencing with Section 44100) of the Heath and Safety
Code:
Also known as the vehicle scrappage program, this program
was established as part of the state vehicle inspection
and maintenance (I&M) program to retire older, higher
polluting vehicles which cause a disproportionate share
of air pollution and to use the credits to reach State
Implementation Plan (SIP) commitments.
Committee staff is unfamiliar with any state funding for
this program.
c) Lower Emission School Bus Program:
In the 2000-2001 Budget the Legislature allocated $50
million for the Lower-Emission School Bus Program - a
program designed to reduce school children's exposure to
both cancer-causing and smog-forming pollution.
While there are no statutory parameters for the program,
the ARB approved guidelines to implement it for
purchasing new, lower-emitting school buses, and for
retrofitting buses with particulate filters to reduce
particulate emissions. The program funded the purchase
of about 350 new buses and 2000 particulate filters for
diesel school buses.
The program introduced new engine and aftertreatment
technology as well as cleaner fuels for school buses. It
provides funding for both new alternative fuel school
buses and associated infrastructure, and new intermediate
emission diesel engines. A significant component of the
program is the retrofit of 2000 buses with diesel
particulate filters, which will significantly reduce
emissions from the in-use fleet. Both the new diesel
buses and the particulate filters require the use of
low-sulfur diesel fuel which further reduces harmful
emissions.
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d) Lawn Mower Electrification Programs:
This measure references one other specific internal
combustion emission reduction program; the lawnmower
electrification program. Once again, while there is no
statutory criteria for programs of this nature, air
districts and municipal utilities have adopted incentives
(generally subsidized by utility ratepayers or other
sources) to retire older-higher polluting lawn mowers and
to replace them with zero emission electric mowers.
3)Criteria For Expenditure of Funds By ARB/Districts Needs
Work. As presently drafted, this measure consists of an
amalgam of cross-references to existing mobile source
programs and to other unspecified programs that are
authorized (but not required) to be created by the ARB or
the districts to reduce air pollution from internal
combustion engines. The language in the bill appears to mix
the two distinct types of programs together with no clear
delineation between and among these very different types of
programs. In addition, the criteria for those programs that
are not specified in law currently (e.g. lawn mower
electrification programs, light duty vehicle retirement
programs other than the one specified in law currently,
programs for the retrofit and replacement of agricultural
engines) may need to be spelled out more clearly that those
for programs that already exist under law.
The author and the committee may wish to consider the
following amendments to clarify these problems:
a) Separate criteria governing existing programs from
new, as yet unspecified programs so that the criteria for
each are clearly delineated.
b) Make clear that the criteria for expenditure of funds
under the Moyer, School Bus, and Light Duty Vehicle
Retirement Program currently authorized under law consist
solely of the criteria already established.
c) Make clear that any new programs established by the
ARB or districts must be enacted under statute before
they can be funded, or establish a set of generic
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mandatory criteria for those, as yet unspecified,
programs. One such criteria should be that no funds may
be used to comply with mobile source emission reductions
otherwise required by law (In other words, the public
should not pay for private interest costs of compliance;
expenditure of funds should be audited periodically
etc.).
d) Eliminate the use of subjective and largely useless
terms and criteria such as "consistent, transparent
methodology with statewide applicability" (page 6, lines
7 and 8), "realistic program assumptions" (page 6, line
16), and "current and expected near term future
conditions" (page 6, line 17), to name a few.
e) Establish clear and explicit auditing and reporting
requirements for funds other than those expended pursuant
to statute and regulations that already specify those
requirements to ensure proper and effective expenditure
of funds.
4)Administration of Funds Appears Confused, Could Be Subject
to Dispute/Confusion Among ARB and Districts . As presently
drafted, this measure appears to give the ARB and districts
potentially confusing and overlapping administration and
oversight responsibilities over funds made available under
the bill's provisions. The author and committee may wish to
consider revising and recasting those provisions to specify
more clearly the responsibilities of state and local
authorities.
5)Technical Amendments Needed . This measure needs several
technical amendments:
a) On page 4, lines 23-25 the finding that states that no
additional burdens should be placed on stationary sources
due to inadequate controls on vehicular sources should be
stricken. That notion is inconsistent with both federal
and state laws that require achievement of state and
federal clean air standards regardless of the source.
b) On page 6, line 5 after "that", the word "is" should
be inserted.
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c) On page 9, line 35 the date "2002" should be "2022".
6)Do Pass Motion Should Include Re-referral to Senate
Transportation Committee . The Senate Rules Committee has
double-referred this measure to this committee and to the
Senate Transportation Committee. Therefore, a motion to
pass the bill should include re-referral to the
Transportation Committee.
SOURCE : South Coast Air Quality Management District
SUPPORT : None on file
OPPOSITION : None on file