BILL ANALYSIS
AB 1507
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 1507 (Lieu)
As Amended August 5, 2010
Majority vote
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|ASSEMBLY: |70-6 |(June 1, 2009) |SENATE: |24-8 |(August 11, |
| | | | | |2010) |
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(vote not relevant)
Original Committee Reference: E.S. & T.M.
SUMMARY : Requires the California Air Resources Board (ARB) to
revise project guidelines for the Carl Moyer Memorial Air
Quality Standards Attainment (Carl Moyer) Program by July 1,
2011, for a project that reduces greenhouse gas (GHG) emissions,
to allow certain federal and state funds to be used on a project
without being factored into cost-effectiveness calculations.
The Senate amendments :
1)Require 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 that reduces GHG emissions to be also
funded under the Carl Moyer Program without those additional
funds being factored into the criteria emission reduction
cost-effectiveness calculations under either of those
programs:
a) Federal funding from programs designed to reduce GHG
emissions; or,
b) Alternative and Renewable Fuel and Vehicle Technology
Program.
1)Provide that nothing in 1) above:
a) Authorizes expenditure of funds for a project that does
not meet all of the requirements of the Carl Moyer Program,
including requirements that require cost sharing or
matching funds; and,
b) Applies if the additional expenditure would not provide
an incremental GHG emission benefit greater than what would
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otherwise be achieved by the program. Also, prohibits ARB
from excluding funds from the cost-effectiveness
calculation if it would reduce emission reduction benefits
expected to be achieved from the Carl Moyer Program, the
Alternative and Renewable Fuel and Vehicle Technology
Program, or federal GHG emission reduction programs.
1)Under the Carl Moyer Program, provide 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.
EXISTING LAW :
1)Establishes ARB to set statewide air quality standards and
regulate emissions from motor vehicles, fuels, and consumer
products. ARB, along with the 35 local air quality districts
that regulate other sources of air pollution, monitors air
pollution and administers regulatory and incentive programs to
improve air quality. Establishes ARB as the lead entity for
implementation of the Global Warming Solutions Act of 2006.
2)Establishes Carl Moyer as a grant program to fund the
incremental cost of cleaner-than required heavy-duty engines.
Carl Moyer is an integral part of California's strategy to
attain federal air quality standards by achieving emission
reductions early or in excess of what is required by
regulation. Carl Moyer has provided funding for the
incremental cost of a diverse range of project types,
including purchase of new alternative-fuel heavy-duty vehicles
(primarily transit buses and trash trucks) and engine
replacements (repowers) for agricultural irrigation pumps,
construction equipment, and marine vessels.
3)Prohibits until January 1, 2015, project grants with a
cost-effectiveness value of more than $13,600 per ton of 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.
4)Develops, pursuant to AB 118 (Nunez) Chapter 750, Statutes of
2007, funding programs for the reduction of GHG and the
development of clean fuel and vehicle technologies. AB 118
created three distinct programs aimed at improving air quality
and advancing alternative fuels and clean technologies:
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a) The Air Quality Improvement Program administered by ARB
is designed to fund air quality improvement projects
related to fuel and vehicle technologies. ARB must consult
with local air districts and work in coordination with the
California Energy Commission (EC);
b) The Alternative and Renewable Fuel and Vehicle
Technology Program administered by the EC. AB 118 directs
that projects be evaluated on their proposed reduction of
air pollutants, cost effectiveness, contribution to
regional air quality improvement, and ability to promote
alternative fuels or technologies; and,
c) The Enhanced Fleet Modernization Program, administered
by the Bureau of Automotive Repair, primarily directed at
light-duty fleet vehicle replacements.
AS PASSED BY THE ASSEMBLY , this bill has been significantly
amended and no longer pertains to the establishment of the
Chrome Plating and Metal Finishing Pollution Prevention Grant
Program.
FISCAL EFFECT : According to the Senate Appropriations
Committee, ARB indicates that it will need minor staff resources
to update guidelines under this bill.
COMMENTS : According to the author, the Carl Moyer Program is
designed to reduce primarily diesel engine emissions throughout
the state by providing incentives for projects that lead to air
quality improvements. However, current law doesn't allow for a
project using Carl Moyer Program funds to be developed to
increase air quality and simultaneously reduce GHG emissions by
adding additional funding from state and federal programs that
reduce GHG emissions.
The author and sponsor have indicated that their intention of
introducing this bill is to seek Carl Moyer Program funding
flexibility so that any use of state or federal GHG emission
reduction program funds would not detrimentally impact a
project's competitiveness when the project is considered for
funding through the Carl Moyer Program.
AB 1507 is similar to AB 1527 (Lieu) of 2009. However, AB 1527
made similar changes to the funding criteria for the Goods
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Movement Emission Reduction Program, authorized by Proposition
1B of 2006. The Governor vetoed AB 1527, encouraging the author
to work with the ARB during its review of the guidelines for the
Carl Moyer Program and the Goods Movement Emission Reduction
Program guidelines.
In March of 2010, ARB 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.
Arguments in Support:
1)By providing more flexibility in the administration of the air
quality heavy-duty vehicle emission program by facilitating
the commingling of state and federal GHG emission reduction
program funds, an enhanced project as funded by the Carl Moyer
Program could be realized that otherwise could not be achieved
if a project was not allowed supplemental funding from another
program.
2)The sponsor explains that the emissions of criteria pollutants
are the same for both a 2010 diesel truck and a 2010
compressed natural gas (CNG) truck, but that the CNG truck
provides a more significant reduction in GHG emissions. CNG
trucks, however, are more expensive than diesel trucks and
thus require greater subsidy in order to incentivize their
purchase. Clarifying the state's preference for projects that
achieve multiple policy goals would provide clear direction to
ARB and could set a precedent for future coordination. The
need for the flexibility in Carl Moyer Program funding is
particularly acute given today's economic climate. In better
times, fleets may have chosen to pay a bit more for cleaner
alternative fuel or hybrid vehicles. Today, however, the
economics of fleet purchase decisions are likely to steer
fleets toward diesel vehicles. Every diesel vehicle purchased
is a missed opportunity for GHG and petroleum reductions, and
possibly even additional criteria pollutant reductions.
Arguments in Opposition: There may be cost pressures on the
Carl Moyer Program or the AB 118 funds from the Alternative and
Renewable Fuel and Vehicle Technology Program. By allowing Carl
Moyer Program 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
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bill that prohibits ARB from allowing the combining of funds if
the emission reduction benefits expected to be achieved are less
than if the funds were not combined.
AB 1507 in its current form has not been considered by the
Assembly Transportation Committee. However, a similar bill, AB
1527 (Lieu, 2009), was passed by the committee last year.
Analysis Prepared by : Ed Imai / TRANS. / (916) 319-2093 FN:
0005722