BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
1507 (Lieu)
Hearing Date: 08/02/2010 Amended: 07/15/2010
Consultant: Brendan McCarthy Policy Vote: EQ 7-0
AB 1507 (Lieu), page 2
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BILL SUMMARY: AB 1507 requires the Air Resources Board to revise
project guidelines for the Carl Moyer program by July 1, 2011 to
allow certain federal and state funds to be used on a project
without being factored into cost-effectiveness calculations.
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Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12 2012-13 Fund
Updating guidelines $43 $85 Special
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* Carl Moyer Fund.
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STAFF COMMENTS:
Under current law, the Carl Moyer Program provides incentive
grants for engines, equipment, and other sources of pollution
that exceed the standards established by law or regulation,
thereby providing early or extra emission reductions. The Air
Resources Board approves projects on the basis of their
cost-effectiveness, and existing law prohibits grants for
projects with a cost-effectiveness that exceeds $13,600 per ton
of NOx (oxides of nitrogen) reduced.
AB 118 (Nunez, Chapter 750 of 2007), provides approximately $200
million annually through 2015 for three programs to fund air
quality improvements. One of these programs is the Alternative
and Renewable Fuel and Vehicle Technology Program, which is
administered by the Energy Commission and provides competitive
grants and other financial incentives to help the state achieve
its climate change goals, primarily by reducing greenhouse gas
emissions.
AB 1507 requires the Air Resources Board to revise project grant
criteria and guidelines for the Carl Moyer program, such that
federal funds or AB 118 funds can also be used to fund a project
without those additional funds being factored into the
cost-effectiveness criteria of the Carl Moyer Program. However,
the bill specifies that the federal or AB 118 funds shall not be
excluded from the cost effectiveness criteria if that would
AB 1507 (Lieu), page 2
reduce the overall emissions reductions achieved by the project.
The Air Resources Board indicates that it will need minor staff
resources to update guidelines under the bill.
In addition to the direct costs of the bill, there may be cost
pressures on Carl Moyer or AB 118 funds. By allowing Carl Moyer
and AB 118 funds to be combined to fund projects, the bill may
result in fewer projects being funded, overall. However, this
cost pressure is offset by a requirement of the bill that
prohibits the Air Resources Board from allowing this combining
of funds to have the effect of reducing the emissions reduction
benefits of those funds.
AB 1507 is similar to AB 1527 (Lieu) of last year. However, AB
1527 made similar changes to the funding criteria for the Goods
Movement Emission Reduction Program, authorized by Proposition
1B of 2006. The Governor vetoed AB 1527, encouraging the author
to work with the Air Resources Board as it reviewed its
guidelines for the Carl Moyer and Goods Movement Emission
Reduction Program guidelines.
In March of 2010, the Air Resources Board updated its guidelines
for the Goods Movement Emission Reduction Program to allow
funding from multiple sources, but has not updated the
guidelines for the Carl Moyer Program in a similar manner.