BILL ANALYSIS
AB 1507
SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
Senator S. Joseph Simitian, Chairman
2009-2010 Regular Session
BILL NO: AB 1507
AUTHOR: Lieu
AMENDED: June 7, 2010
FISCAL: Yes HEARING DATE: June 14, 2010
URGENCY: No CONSULTANT: Randy Pestor
SUBJECT : MOTOR VEHICLE EMISSION REDUCTION PROJECTS
SUMMARY :
Existing law :
1) Under the Carl Moyer Air Quality Standards Attainment
Program (Carl Moyer Program) (Health and Safety Code 44275
et seq.):
a) Provides grants to offset the incremental cost of
projects that reduce covered emissions from covered
sources in the state, and eligible projects include new
very low or zero-emission covered vehicles or covered
heavy-duty engines, emission-reducing retrofit of
covered engines, purchase and use of emission-reducing
add-on equipment, development and demonstration of
low-emission retrofit technologies and repower options,
and light- and medium-duty vehicle projects. (
44280 and 44281).
b) Until January 1, 2015, prohibits project grants with
a cost-effectiveness value of more than $13,600 per ton
of oxides of nitrogen (NOx) reduced in the state. On
and after January 1, 2015, project grants are prohibited
with a cost-effectiveness value of more than $12,000 per
ton of NOx reduced in the state. Both of these amounts
may be higher to reflect state consumer price index
adjustments on or after January 1, 2006, as determined
by the California Air Resources Board (ARB) (44283(a)).
c) Defines "cost effectiveness" to mean the dollars
provided to a project for each ton of covered emission
reduction attributed to a project, and provides that the
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cost of covered emission reduction is the amount of the
program grant, including certain matching funds, plus
any other state funds, or funds under an air pollution
control district's control, provided toward the project.
(44275(a)(4), 44283(d)).
2) Under the Goods Movement Emission Reduction Program (GMERP)
Law (39625 et seq.):
a) Provides that 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. (39625.5(a)(2)).
b) Requires the ARB to consider certain criteria in
evaluating projects (e.g., emission reduction magnitude;
public health benefits; cost-effectiveness; reduction in
greenhouse gases (GHGs); degree to which funds are
leveraged from other sources; total emission reductions
a project would achieve over its lifetime per state
dollar invested). (39625.5(b)(2)).
3) Under the Alternative and Renewable Fuel and Vehicle
Technology Program Law (44272 et seq.):
a) Requires the State Energy Resources Conservation and
Development Commission (CEC) to provide competitive
grants, revolving loans, loan guarantees, or loans to
certain interests (e.g., public agencies, businesses,
fleet owners, consumers) to develop and deploy
innovative technologies that change the state's fuel
and vehicle types to help attain the state's climate
change policies. (44272(a)).
b) Requires the CEC to provide preferences to those
projects maximizing the program goals based on certain
project criteria (e.g., consistency with climate change
policy, ability to reduce criteria air pollutants and
air toxics, provide nonstate matching funds).
(44272(c)).
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This bill :
1) Requires the ARB to revise project guidelines by July 1,
2011, to allow funds from the following programs or funding
sources to be used for a project also funded under the Carl
Moyer Program or the GMERP Law without those additional
funds being factored into the criteria emission reduction
cost-effectiveness calculations under either of those
programs:
a) Federal funding from programs designated to reduce
GHG emissions.
b) Alternative and Renewable Fuel and Vehicle Technology
Program Law.
2) Provides that nothing in the above provision (# 1 above):
a) Authorizes expenditure of funds for a project that
does not meet all of the requirements of the Carl Moyer
Program or the GMERP Law, including requirements that
require cost sharing or matching funds.
b) Applies if the additional expenditure would not
provide an incremental air quality or GHG emission
benefit greater than what would otherwise be achieved by
the program. Also, ARB cannot exclude funds from the
cost-effectiveness calculation pursuant to the above
provision if it would reduce emission reduction benefits
expected to be achieved from the Carl Moyer Program, the
GMERP, the Alternative and Renewable Fuel and Vehicle
Technology Program, or federal GHG emission reduction
programs.
3) Under the Carl Moyer Program, provides that federal funding
from programs to reduce GHG emissions, and funding under
the Alternative and Renewable Fuel and Vehicle Technology
Program, are not included in the cost of covered emission
reduction.
COMMENTS :
1) Purpose of Bill . According to the author, "AB 1507 is
"designed to promote better coordination between state
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funding programs for clean transportation. The bill would
allow federal and AB 118 funds to be paired with Carl Moyer
or Proposition 1B funds to 'upgrade' projects to achieve
even greater air quality benefits and greenhouse gas
emission reductions. Current guidelines make this
difficult or impossible. While ARB staff has recommended
amending guidelines for Prop 1B to allow for limited
co-funding, these new guidelines have not yet been adopted
and do not apply to Carl Moyer."
The author also notes that "If the funds can be combined,
there is an incentive to 'upgrade' to a more advanced
vehicle technology that provides additional benefits, in
the form of petroleum and GHG emissions reduction."
2) Background . As noted above, the Carl Moyer Program, the
GMERP Law (enacted to set standards and procedures to
implement Proposition 1B, approved by voters November
2006), and the Alternative and Renewable Fuel and Vehicle
Technology Program Law (enacted by AB 118 (Nunez) Chapter
750, Statutes of 2007), provide funding for certain
eligible projects.
Under the Carl Moyer Program, grants cannot be made for
projects with a cost-effectiveness of more than $13,600 per
ton. The cost of the covered emission reduction is the
amount of the grant, including matching funds, plus any
other state funds provided to the project.
Under the GMERP Law, criteria include total emission
reductions a project would achieve over its lifetime per
state dollar invested.
AB 1507 allows certain federal funds and funding from the
Alternative and Renewable Fuel and Vehicle Technology
Program Law to be used for projects funded under the Carl
Moyer Program or the GMERP Law without being factored into
criteria emission reduction cost-effectiveness. While this
may reduce funding under each of those programs, the intent
is to ensure that this new provision cannot apply unless
the air quality and GHG emission benefit is greater than
would otherwise be achieved by the programs.
3) Trying again . AB 1507 mirrors AB 1527 (Lieu) of 2009,
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approved by the Senate Environmental Quality Committee July
13, 2009 (7-0). According to Governor Schwarzenegger in
vetoing AB 1527 (Lieu) of 2009, "I encourage the author to
work with ARB as they undergo their current review of the
Proposition 1B and Carl Moyer guidelines and, if additional
legislation is needed, introduce a bill in the next session
that achieves both ARB and the author's shared goals."
According to the author, AB 1507 is needed because ARB was
able to address issues relating to the GMERP, but not
issues relating to the Carl Moyer Program.
4) Clarification needed . Based on ARB's actions regarding
revision of GMERP guidelines, clarification is needed by
striking Section 1 of this bill that revises the GMERP
(page 2, strike out lines 1 to 13; and page 3, strike out
lines 1 to 13).
SOURCE : CalStart
SUPPORT : None on file
OPPOSITION : None on file