BILL ANALYSIS �
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|SENATE RULES COMMITTEE | SB 1204|
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THIRD READING
Bill No: SB 1204
Author: Lara (D) and Pavley (D)
Amended: 5/6/14
Vote: 21
SENATE TRANSPORTATION & HOUSING COMMITTEE : 11-0, 4/1/14
AYES: DeSaulnier, Gaines, Beall, Cannella, Galgiani, Hueso,
Lara, Liu, Pavley, Roth, Wyland
SENATE ENVIRONMENTAL QUALITY COMMITTEE : 6-1, 4/30/14
AYES: Hill, Gaines, Hancock, Jackson, Leno, Pavley
NOES: Fuller
SENATE APPROPRIATIONS COMMITTEE : 6-1, 5/23/14
AYES: De Le�n, Gaines, Hill, Lara, Padilla, Steinberg
NOES: Walters
SUBJECT : Vehicle emissions reductions
SOURCE : Author
DIGEST : This bill creates a California Clean Truck, Bus, and
Off-Road Vehicle and Equipment Technology Program (Technology
Program) to fund development, demonstration, precommercial
pilot, and early commercial deployment of zero- and
near-zero-emission truck, bus, and off-road vehicle and
equipment technologies. This bill provides that the Technology
Program shall be funded from the Greenhouse Gas Reduction Fund
(GGRF), and shall prioritize projects located in disadvantaged
communities.
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ANALYSIS :
California Global Warming Solution Act of 2006 and GGRF
AB 32 (N��ez, Chapter 488, Statutes of 2006) requires the Air
Resources Board (ARB) to develop a plan of how to reduce
emissions to 1990 levels, by 2020. AB 32 also requires ARB to
ensure that greenhouse gas (GHG) emission reduction requirements
and programs, to the extent feasible, direct public and private
investment toward the most disadvantaged communities in the
state. It authorizes ARB to adopt a schedule of fees to be paid
by GHG emission sources regulated under AB 32 and deposited into
the GGRF (commonly known as cap-and-trade), available upon
appropriation by the Legislature to carry out AB 32
requirements.
SB 535 (De Leon, Chapter 830, Statutes of 2012) requires the
Department of Finance, when developing the three-year investment
plan for cap-and-trade monies, to allocate 25% of these funds to
projects that provide benefits to disadvantaged communities, and
to allocate a minimum of 10% of available cap-and-trade monies
to projects located within disadvantaged communities. The bill
outlines a process to identify these communities and allows for
periodic modification as necessary.
Air Quality Improvement Program (AQIP)
AB 118 (N��ez, Chapter 750, Statutes of 2007) establishes the
AQIP, administered by ARB in consultation with local air
districts. This program is funded through surcharges on vehicle
registration fees, a portion of vessel registration fees, a
portion of the Smog Abatement Fee (paid to register vehicles
less than six model years old and therefore exempt from smog
check), and an increase in the fee for identification plates for
various types of vehicles, such as farm trailers and logging
vehicles, operated on public roads.
This program provides competitive grants to fund projects to
improve the air quality impacts of alternative fuels and
vehicles, vessels, and equipment technologies. AQIP encompasses
several programs, including the Hybrid and Zero-Emission Truck
and Bus Voucher Incentive Project (HVIP). HVIP, which is
administered by ARB and its contractor, CALSTART, provides
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vouchers to California fleet owners to help purchase hybrid and
zero-emission trucks and buses.
Alternative and Renewable Fuel and Vehicle Technology Program
(ARFVTP)
AB 118 (N��ez, Chapter 750, Statutes of 2007) also establishes
the ARFVTP, administered by the California Energy Commission
(CEC). This program provides funding for development and
deployment of alternative and renewable fuels and advanced
transportation technologies to help attain the state's climate
change goals. Eligible projects include, for example,
development, improvement, and production of alternative and
renewable low-carbon fuels; improvement of light-, medium-, and
heavy-duty vehicle technologies; and expansion of infrastructure
connected with existing fleets, public transit, and
transportation corridors.
This bill :
1.Establishes the Technology Program, administered by ARB in
conjunction with CEC, and requires the Technology Program fund
development, demonstration, pre-commercial pilot and early
commercial deployment of zero-and near-zero emission truck,
bus, and off-road vehicle and equipment technologies from
monies appropriated to the Technology Program from GGRF.
2.Requires that projects in disadvantaged communities be
prioritized.
3.Requires that projects funded by the Technology Program are
limited to the following:
A. Development, demonstration, pre-commercial pilots and
early commercial deployments of zero and near-zero medium
and heavy-duty truck, bus, and off-road vehicles and
equipment technologies.
B. Purchase incentives for commercially available zero and
near-zero truck, bus and off road vehicle and equipment
technologies and fueling infrastructure.
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4.Requires that ARB, in consultation with CEC, develop
guidelines for the implementation of the Technology Program
that are consistent with AB 32 and that do various things,
some of which include promoting projects that assist the state
in maintaining the 2020 GHG emissions limit, structuring
purchase incentives for eligible technologies to increase
sales in disadvantaged communities, and leveraging, to the
maximum extent feasible, federal or private funding.
5.Specifies that eligible projects do not include projects
required to be undertaken pursuant to state or federal law,
district rules or regulations, or other legally binding
agreements.
6.Specifies that the state may fund studies, technology
development, and demonstration projects focused on improving
performance and financial payback, multivehicle and commercial
scale deployments and deployment of early commercially
available advanced vehicles and equipment.
7.Requires ARB to give priority to projects that benefit
disadvantaged communities, leverage additional funds, result
in cobenefits, has potential to be replicated and provide
regional benefit, and have other specified characteristics.
8.Requires ARB, in consultation with CEC, to create a multiyear
framework and plan that articulates an overarching vision for
moving the technologies through the commercialization process,
outlines technology categories that may be funded and
describes roles of agencies and process for coordination.
9.Defines "zero and near-zero emission" to mean vehicles, fuels,
and related technologies that reduce GHG emissions when
compared with conventional or fully commercialized
alternatives, as defined by ARB, in consultation with CEC.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
ARB indicates it will incur costs of approximately $644,000
in 2015-16 as follows: $344,000 and two personnel years
(PYs) of staff to develop and adopt program guidelines, and
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an additional $300,000 to conduct market research for the
development of performance criteria and metrics for
deployment incentives. (GGRF)
ARB indicates it will incur ongoing costs of approximately
$344,000 and two PYs to develop a multiyear framework and
plan, and to administer the Technology Program. Actual
costs and staffing needs would depend upon the amount of
funding dedicated to the Technology Program, which is
unspecified in this bill.
CEC indicates it will incur one-time costs of approximately
$250,000 and two PYs of staff to assist in the development
of a multiyear framework and plan. Ongoing costs for
consultation with ARB would be absorbable. (GGRF)
Unknown ongoing costs to fund program expenditures and
grants, likely in the tens of millions annually. (GGRF)
SUPPORT : (Verified 4/30/14 -- unable to verify at time of
writing)
California Association of Port Authorities
California League of Conservation Voters
CALSTART
Natural Resources Defense Council
OPPOSITION : (Verified 4/30/14 -- unable to verify at time of
writing)
California Chamber of Commerce
California League of Food Processors
California Manufacturers and Technology Association
ARGUMENTS IN SUPPORT : The author's office notes that 40% of
California's contribution to climate pollution comes from cars,
trucks, trains, and other mobile sources. While technology for
light-duty cars has progressed significantly, making it widely
available for commercial use, technology for heavy-duty trucks
and buses is severely lagging. It is essential to reduce GHG
emissions and improve air quality in areas that suffer
disproportionately from air pollution, such as those near ports
or major transportation corridors. The region surrounding the
ports of Los Angeles and Long Beach, for example, ranks as one
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of the most polluted in the country. The author's office states
that this bill will make it easier for truck owners to
transition to zero- and near-zero technology and improve the
health of millions of Californians who live in communities that
are burdened daily by transportation-related pollution.
ARGUMENTS IN OPPOSITION : The California Chamber of Commerce
(CalChamber) writes:
CalChamber supports the cost-effective implementation of AB
32. CARB's decision to arbitrarily withhold and sell
(auction) allowances will raise billions of dollars at the
expense of California businesses and consumers. This approach
runs contrary to expressed goals of AB 32, which is maximizing
benefits and minimizing leakage risks and costs.
As CalChamber has long held, CARB lacks authority to raise
revenue through the auction of allowances. Given the
substantial legal uncertainties surrounding CARB's authority
to impose an auction, expending the proceeds is premature;
therefore we must respectfully OPPOSE SB 1204 (Lara) which
seeks to fund zero and near-zero emission truck, bus, and
off-road vehicle and equipment technologies with AB 32 auction
revenues.
JA:k 5/25/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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