BILL ANALYSIS                                                                                                                                                                                                    



                                                                       



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          |SENATE RULES COMMITTEE            |                  SB 1156|
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                                 THIRD READING


          Bill No:  SB 1156
          Author:   Cedillo (D)
          Amended:  8/4/10
          Vote:     27 - Urgency

           
           SENATE TRANSPORTATION & HOUSING COMM  :  7-0, 6/22/10
          AYES:  Lowenthal, Huff, Ashburn, DeSaulnier, Harman,  
            Pavley, Simitian
          NO VOTE RECORDED:  Kehoe, Oropeza

           SENATE APPROPRIATIONS COMMITTEE  :  7-0, 7/15/10
          AYES:  Kehoe, Corbett, Emmerson, Leno, Price, Walters, Wolk
          NO VOTE RECORDED:  Alquist, Wyland, Yee


           SUBJECT  :    Funding for drayage trucks

           SOURCE  :     Author


           DIGEST  :    This bill appropriates $20 million from the  
          Enhanced Fleet Modernization Subaccount, in the High  
          Polluter Removal and Repair Account, to the State Air  
          Resources Board to provide grants to owners of three or  
          fewer heavy duty diesel trucks that service the state's  
          ports and railyards for the purchase of equipment that  
          meets specified emission standards pursuant to drayage  
          truck regulations.

           Senate Floor Amendments  of 8/4/10 change the source of  
          funding for truck replacement from the Air Quality  
          Improvement Fund to the Enhanced Fleet Modernization  
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          Subaccount and specifies that the funds shall be allocated  
          using the same distribution formula as the Goods Movement  
          Emission Reduction Program as authorized by Proposition 1B.

           ANALYSIS  :     Air Resources Board (ARB) Regulations for  
          On-Road Heavy-Duty Diesel Trucks  

          Existing law charges ARB with primary responsibility for  
          the control of mobile source air pollution, including the  
          adoption of rules for the reduction of harmful vehicle  
          emissions and the specification of vehicular fuel  
          composition.  In the past two years, ARB has adopted two  
          significant regulations to reduce emissions and public  
          exposure to diesel particulate matter (diesel PM), oxides  
          of nitrogen (NOx), and other air contaminants from  
          heavy-duty diesel vehicles.

           Drayage Truck Regulation  .  In December 2007, ARB adopted  
          the In-Use On-Road Diesel-Fueled Heavy-Duty Drayage Trucks,  
          referred to as the drayage or port truck rule, by setting  
          emission standards for in-use, heavy-duty diesel-fueled  
          vehicles that transport cargo to and from California's  
          ports and intermodal rail facilities.  The rule establishes  
          different compliance standards and deadlines for different  
          model-year trucks and will be implemented in two phases, as  
          described in the following table:

           ------------------------------------------------------------- 
          |                  |                                          |
          |Truck Engine      |Emission Requirement Schedule             |
          |Model Year        |                                          |
          |------------------+------------------------------------------|
          |                  |                                          |
          |1993 and older    |Prohibited by December 31, 2009           |
          |                  |                                          |
          |------------------+------------------------------------------|
          |                  |                                          |
          |1994 - 2003       |Phase 1:  By December 31, 2009, reduce PM |
          |                  |emissions by 85%                          |
          |                  |AND                                       |
          |                  |Phase 2:  By December 31, 2013, meet 2007 |
          |                  |engine standards                          |
          |------------------+------------------------------------------|
          |                  |Phase 1:  By December 31, 2011, reduce PM |

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          |2004              |emissions by 85%                          |
          |                  |AND                                       |
          |                  |Phase 2:  By December 31, 2013, met 2007  |
          |                  |engine standards                          |
          |------------------+------------------------------------------|
          |                  |Phase 1:  By December 31, 2012, reduce PM |
          |2005 - 2006       |emissions by 85%                          |
          |                  |AND                                       |
          |                  |Phase 2:  By December 31, 2013, meet 2007 |
          |                  |engine standards                          |
          |------------------+------------------------------------------|
          |                  |                                          |
          |2007 and newer    |Not applicable, fully compliant           |
          |                  |                                          |
           ------------------------------------------------------------- 

           Truck and Bus Regulation  .  In December 2008, ARB adopted  
          the In-Use On-Road Diesel Vehicle Regulation to reduce  
          emissions from existing on-road diesel vehicles operating  
          in California.  The regulation establishes a variety of  
          compliance options, but in general, it requires trucks and  
          buses to meet performance requirements between 2011 and  
          2023.  By January 1, 2023, all vehicles must have a 2010  
          model year engine or equivalent.

          Existing law creates an enhanced fleet modernization  
          program for the retirement of certain high polluting  
          vehicles to be administered by the Bureau of Automotive  
          Repair pursuant to guidelines adopted by the State Air  
          Resources Board.  Existing law creates the Enhanced Fleet  
          Modernization Subaccount in the High Polluter Removal and  
          Repair Account to establish and implement this enhanced  
          program, upon appropriation by the Legislature.

          This bill appropriates $20 million from the Air Quality  
          Improvement Fund to ARB to provide grants to drayage truck  
          owners that have not yet complied with ARB's drayage truck  
          regulation, subject to the following conditions:

          1. The funds are administered in a manner that is  
             consistent with the Goods Movement Emission Reduction  
             Program, as authorized by Proposition 1B, except that  
             the funds may be used for emission reductions that are  
             currently required by law or regulation.

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          2. The funds are only available for trucks in small fleets  
             (fleets with three or fewer trucks).

          3. The funds may only be used for the purchase of equipment  
             that meets the 2007 model-year or newer engine  
             standards.

          4. The funds are only available for these grants until  
             January 1, 2013, after which time the funds revert to  
             the Enhanced Fleet Modernization Subaccount in the High  
             Polluter Removal and Repair Account.

          5. Specifies the funding shall be distributed among the  
             state's trade corridors, as defined in current law, with  
             allocations of 55 percent to the Los Angeles/Inland  
             Empire region, 25 percent to the Central Valley region,  
             14 percent to the Bay Area region, and 6 percent to the  
             San Diego/border region.

           Comments
           
          Emissions from diesel trucks have adverse effects on human  
          health and lead to 4,500 premature deaths per year.  By  
          large majorities, Californians support clean air laws and  
          reducing air pollution saves the state billions of dollars  
          per year in reduced hospitalizations and emergency room  
          visits, health care costs, and lost work days due to  
          illness.
           
          At the same time, these laws sometimes impose hardships on  
          small businesses and others who, in a tough economy, may  
          not have the financial resources necessary to comply with  
          regulations.  Rather than weaken the laws by relaxing the  
          standards or delaying their implementation, this bill  
          provides additional funding to help small- and medium-size  
          trucking businesses retrofit or replace their trucks.  
           
          In doing so, this bill will allow more truckers to stay in  
          business regardless of their ability to pay to comply with  
          the rules, helping to ensure that the state experiences the  
          economic benefits derived from maintaining goods movement  
          businesses such as drayage trucking, while simultaneously  
          advancing clean air efforts.  Implications for AQIP.  For  

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          the 2010-11 fiscal year, the Governor has proposed  
          allocating $40 million to AQIP, however, revenues could be  
          far less than anticipated.  In the 2009-10 fiscal year, for  
          example, the Governor originally allocated $44 million but  
          actual revenues totaled only about $29 million.  In the  
          coming year, ARB anticipates spending AQIP funds to provide  
          incentives for the purchase of heavy-duty hybrid trucks and  
          zero-emission vehicles.  Comparing the emissions of a 2007  
          model-year heavy-duty diesel truck and a new heavy-duty  
          hybrid truck, the hybrid truck reduces 25 percent more  
          particulate, 85 percent more oxides of nitrogen, and 25  
          percent more carbon dioxide than a 2007 model-year diesel  
          truck.

           FISCAL EFFECT  :    Appropriation:  Yes   Fiscal Com.:  Yes    
          Local:  No

          According to the Senate Appropriations Committee: 

                          Fiscal Impact (in thousands)

           Major Provisions                     2010-11     2011-12     
           2012-13          Fund  
          Appropriation                           $20,000              
                Special*
          ARB:  update AQIP guidelines       $128                      
           Special*

          * Air Quality Improvement Fund

           SUPPORT  :   (Verified  8/5/10)

          South Coast Air Quality Management District


           ARGUMENTS IN SUPPORT  :    According to the author's office,  
          this bill is intended to address the economic hardships  
          truck drivers face complying with ARB standards by  
          appropriating $20 million dollars to provide grants to  
          truckers in order to retrofit their vehicles.  Currently,  
          there is incentive money available in many areas of the  
          state but none to cover the immediate cost of retrofitting  
          to help meet compliance standards. 


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          JA:nl  8/5/10   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

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