BILL ANALYSIS
AB 1527
Page 1
GOVERNOR'S VETO
AB 1527 (Lieu)
As Amended July 23, 2009
2/3 vote
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|ASSEMBLY: |77-0 |(June 2, 2009) |SENATE: |39-0 |(September 2, |
| | | | | |2009) |
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|ASSEMBLY: |79-0 |(September 8, | | | |
| | |2009) | | | |
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Original Committee Reference: TRANS .
SUMMARY : Authorizes a motor vehicle emission reduction project to
be jointly funded from multiple air quality programs, including the
Carl Moyer Memorial Air Quality Standards Attainment Program (Carl
Moyer), and the Goods Movement Emission Reduction Program (GMERP).
The Senate amendments :
1)Delete the requirement of the California Air Resources Board (ARB)
to consult with the Energy Commission (EC) in revising their
program guidelines.
2)Delete the use of funds from the Air Quality Improvement Program
for commingling with Carl Moyer or GMERP bond funds.
3)Restrict when federal funds are commingled, only those federal
funds that are designed to reduce greenhouse gas (GHG) emissions.
4)Prohibit ARB from excluding from the cost effectiveness
calculation funds from the cost-effectiveness calculation should
the exclusion result in less overall emission reductions.
EXISTING LAW :
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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)Authorizes, through the enactment of Proposition 1B as approved by
the statewide voters in November 2006, the state to sell
approximately $20 billion of general obligation bonds to fund
transportation projects. Of the $20 billion, allocates $1 billion
into the GMERP to be administered by ARB to quickly reduce air
pollution emissions, not otherwise required by law or regulation,
and reduce the health risk from freight movement along
California's priority trade corridors. The major sources eligible
for bond funding include heavy-duty trucks, locomotives, shore
side power for cargo ships, commercial harbor craft, cargo
handling equipment, and infrastructure for electrification of
truck stops, distribution centers, and other places trucks
congregate.
3)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.
4)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.
5)Develops, pursuant to AB 118 (Nunez) Chapter 750, Statutes of
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2007, funding programs for the reduction of greenhouse gases (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:
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 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 was substantially similar to
the version passed by the Senate.
FISCAL EFFECT : According to the Assembly Appropriations Committee,
pressure to allow bond proceeds or other monies to fund emissions
reduction and goods movement projects, but at no additional state
cost. (Various special funds)
COMMENTS : According to the author, Carl Moyer and GMERP are
designed to reduce 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
and GMERP funds to be developed to increase air quality and
simultaneously reduce greenhouse gas emissions by adding additional
state funding such as funds from AB 118.
The author and sponsor have indicated that their intention of
introducing this bill is to seek GMERP and Carl Moyer funding
flexibility so that any use of state AB 118 clean air/vehicle
program funds would not detrimentally impact a project's
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competitiveness when the project is considered for funding through
the GMERP or Carl Moyer. Further, they have indicated that they
will not change funding processes and cost-effectiveness
calculations in a way that would negatively compromise criteria
pollutant or toxic air contaminant emission reductions.
Arguments in Support:
1)By providing more flexibility in the administration of the air
quality vehicle emission programs by facilitating the commingling
of state program clean air vehicle funds, an enhanced project as
funded by a specific program could be realized that otherwise
could not be achieved if a project was not allowed supplemental
funding from another program.
2)The California Dump Truck Owners Association indicates that "our
industry has recently been negatively impacted by actions taken by
ARB with promulgation of the Truck and Bus Rule. The trucking
industry is experiencing the worst economic downturn since
de-regulation with minimal work and high diesel prices. The small
trucking businesses are truly struggling to survive at this point.
These ill-conceived ARB air quality regulations will put the nail
in the coffin of small trucking businesses in this state. This
bill seeks to provide additional funding for our impacted
membership."
GOVERNOR'S VETO MESSAGE :
This bill requires the California Air Resources Board
(ARB) to revise the project guidelines for certain
existing emission reduction incentive programs to
allow the receipt of other state and federal funds to
be used for projects without those additional funds
being included in the cost-effectiveness calculations
that are used to determine ARB funding eligibility.
This bill is unnecessary. ARB already has flexibility
in existing law to develop revisions to their funding
guidelines, and is currently developing revisions to
the Proposition 1B guidelines that will allow
selective use of funds from other programs to count as
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matching funds for eligible projects that achieve both
emission reduction and climate change benefits.
Additionally, the current language of the bill would
detrimentally relax the cost-effectiveness
calculations for ARB's existing emission reduction
incentive programs. This results in limited state
funds for air quality improvements going towards fewer
and potentially more costly projects that do not
produce the quantity of air quality improvements we
could see under the existing program.
I recognize that the author worked diligently to try
to ensure that air quality improvements would not be
diminished by the bill. 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.
Analysis Prepared by : Ed Imai / TRANS. / (916) 319-2093
FN: 0003247