BILL ANALYSIS
AB 892
SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
Senator S. Joseph Simitian, Chairman
2009-2010 Regular Session
BILL NO: AB 892
AUTHOR: Furutani
AMENDED: July 9, 2009
FISCAL: Yes HEARING DATE: July 13, 2009
URGENCY: No CONSULTANT: Randy Pestor
SUBJECT : GOODS MOVEMENT EMISSION REDUCTION
SUMMARY :
Existing law , under the Goods Movement Emission Reduction
Program (GMERP) Law:
1) Requires an applicant (local public entity (air pollution
control district)) receiving funds under the program to
have up to 2 years from the date funds are allocated to
award a contract for a project, or else the funds revert to
the California Ports Infrastructure, Security, and Air
Quality Improvement Account (Account) for allocation.
Funds not liquidated within 4 years of the contract award
date between the applicant and the contractor must also
revert to that Account.
2) Requires the State Air Resources Board (ARB) to submit an
annual report to the Legislature summarizing its activities
related to administration of the GMERP Law. The report
must include information relating to funded projects,
allocated funds, project locations, project status, and
project emission reductions.
This bill :
1) Authorizes returned funds or unspent funds from obligated
contracts received by the applicant prior to the end of the
4 year liquidation period to be awarded by the applicant to
fund equipment projects included on the same competitively
ranked list approved by the ARB pursuant to the grant
agreement, or if there are no other eligible projects
included on that list, returned to the ARB for reallocation
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to an applicant pursuant to ARB guidelines. The ARB
guidelines must follow certain priorities and all funds
allocated by the applicant must be liquidated within 4
years of the original contract award or must revert to the
Account.
2) Requires ARB to include a description of any changes to the
grant agreement scope or changes to grant award amounts.
COMMENTS :
1) Purpose of Bill . According to the author, "Due to the
slowing economy, some GMERP recipients are backing out of
their contracts and returning GMERP funds to the district.
This may occur because a company cannot fund their share of
the project, or the company is simply going out of
business. Although the local air districts have dozens of
qualified projects waiting to receive GMERP funding,
current law does not allow the air district to apply the
returned funds to otherwise qualified projects. Funds must
be returned to the main Prop 1B account, re-appropriated by
the legislature, and then awarded by the [ARB]."
The author notes that this bill "would allow funds resulting
from a cancelled contract to be applied to an approved
back-up project. If no eligible project exists, then funds
would revert to the [ARB]. The amendment would not change
current law with respect to total time a district has to
liquidate funds."
2) Background . The Highway Safety, Traffic Reduction, Air
Quality and Port Security Bond Act of 2006 (Proposition
1B), approved by voters November 2006, included provisions
for $1 billion to reduce emissions associated with freight
movement along the state's trade corridors. SB 88
(Committee on Budget and Fiscal Review) Chapter 181,
Statutes of 2007, among other things included the GMERP Law
to provide guidance for ARB to implement the program.
ARB must consider certain criteria in evaluating projects
(e.g., emission reduction magnitude, public health benefit,
cost-effectiveness; reduction in greenhouse gases; degree
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to which funds are leveraged from other sources). Projects
eligible for funding include replacement, repower, or
retrofit of heavy-duty diesel trucks, diesel locomotive
engines, harbor craft, and cargo handling equipment;
on-shore electrical power; mobile or portable shoreside
distributed power generation; and infrastructure
electrification to reduce engine idling.
As noted above, under current law returned or unspent funds
from obligated contracts received by the local agency
applicant prior to the end of the four year liquidation
period must revert to the Account. AB 892 enables the
local agency applicant to fund other equipment projects
under certain conditions.
AB 892 was approved by the Senate Transportation Committee
July 7, 2009 (9-0).
SOURCE : South Coast Air Quality Management District
SUPPORT : Automobile Club of Southern California, Bay
Area Air Quality Management District,
California Air Pollution Control Officers
Association, California State Automobile
Association, Harbor Association of Industry &
Commerce, San Joaquin Valley Air Pollution
Control District
OPPOSITION : None on file