BILL ANALYSIS
------------------------------------------------------------
|SENATE RULES COMMITTEE | AB 1507|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524 | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
------------------------------------------------------------
THIRD READING
Bill No: AB 1507
Author: Lieu (D)
Amended: 7/15/10 in Senate
Vote: 21
SENATE ENVIROMENTAL QUALITY COMMITTEE : 7-0, 6/14/10
AYES: Simitian, Runner, Corbett, Hancock, Lowenthal,
Pavley, Strickland
SENATE APPROPRIATIONS COMMITTEE : 7-3, 08/02/10
AYES: Kehoe, Alquist, Corbett, Leno, Price, Wolk, Yee
NOES: Ashburn, Emmerson, Wyland
NO VOTE RECORDED: Walters
ASSEMBLY FLOOR : 70-6, 6/1/09 - See last page for vote
SUBJECT : Motor vehicle emission reduction projects
SOURCE : CalStart
DIGEST : This bill requires the State Air Resources
Board, by July 1, 2011, to revise project guidelines for a
project that reduces greenhouse gas emissions to allow
funds from specified programs and funding sources to be
used for a project also funded under the Carl Moyer
Memorial Air Quality Standards Attainment Program or the
goods Movement Emission Reduction Program without those
additional public funds being factored into the criteria
emission reduction cost-effectiveness calculations under
either of those programs.
CONTINUED
AB 1507
Page
2
ANALYSIS :
Existing law
1. Under the Carl Moyer Air Quality Standards Attainment
Program (Carl Moyer Program):
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.
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).
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 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.
2. Under the Goods Movement Emission Reduction Program
(GMERP) Law.
AB 1507
Page
3
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.
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).
3. Under the Alternative and Renewable Fuel and Vehicle
Technology Program Law.
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.
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).
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
AB 1507
Page
4
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.
AB 1507
Page
5
Background
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.
Prior/Related Legislation
AB 1527 (Lieu) of 2009, a nearly identical bill passed the
Senate Floor 39-0, on 9/2/09 but was vetoed by the
Governor. 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's office, this bill is needed
because ARB was able to address issues relating to the
GMERP, but not issues relating to the Carl Moyer Program.
AB 1507
Page
6
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee analysis:
Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12 2012-13
Fund
Updating guidelines $43 $85 Special *
* Carl Moyer Fund.
SUPPORT : (Verified 8/4/10) unable to verify
CalStart (source)
OPPOSITION : (Verified 8/4/10) unable to verify
ARGUMENTS IN SUPPORT : According to the author's office,
"AB 1507 is "designed to promote better coordination
between state 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's office 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."
ASSEMBLY FLOOR :
AYES: Adams, Ammiano, Arambula, Beall, Bill Berryhill, Tom
AB 1507
Page
7
Berryhill, Blakeslee, Blumenfield, Brownley, Buchanan,
Caballero, Charles Calderon, Carter, Chesbro, Conway,
Cook, Coto, Davis, De La Torre, De Leon, Emmerson, Eng,
Evans, Feuer, Fletcher, Fong, Fuentes, Fuller, Galgiani,
Garrick, Gilmore, Hagman, Hall, Hayashi, Hernandez, Hill,
Huber, Huffman, Jeffries, Jones, Knight, Krekorian, Lieu,
Logue, Bonnie Lowenthal, Ma, Mendoza, Miller, Monning,
Nava, Nestande, John A. Perez, V. Manuel Perez,
Portantino, Price, Ruskin, Salas, Saldana, Silva,
Skinner, Smyth, Solorio, Audra Strickland, Swanson,
Torlakson, Torres, Torrico, Tran, Yamada, Bass
NOES: Anderson, DeVore, Gaines, Niello, Nielsen, Villines
NO VOTE RECORDED: Block, Duvall, Furutani, Harkey
TSM:do 8/4/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
**** END ****