(1)The California Global Warming Solutions Act of 2006 designates the State Air Resources Board as the state agency charged with monitoring and regulating sources of emissions of greenhouse gases. The act authorizes the state board to include the use of market-based compliance mechanisms. Existing law requires all moneys, except for fines and penalties, collected by the state board as part of a market-based compliance mechanism to be deposited in the Greenhouse Gas Reduction Fund and to be available upon appropriation.

This bill would establish the Zero- and Near-Zero-Emission Intermodal Terminals Program to be administered by the state board to fund equipment upgrades and investments at intermodal terminals, as defined, to help transition the states freight system to be zero-emission zero- and near-zero-emission operations. The bill would authorize the program to be implemented with moneys from the Greenhouse Gas Reduction Fund.

(2)Existing law establishes the State Energy Resources Conservation and Development Commission and requires the commission to administer various programs to award grants and other financial assistance for energy-related projects.

This bill would establish the Port Building and Lighting Efficiency Greenhouse Gas Reduction Fund Program to be administered by the commission for the purpose of funding energy efficiency upgrades and investments at public ports that help reduce electrical load and increase on-site onsite renewable generation. The bill would authorize the program to be implemented with moneys from the Greenhouse Gas Reduction Fund.

(3)This bill would declare that it is to take effect immediately as an urgency statute.

(1)The California Global Warming Solutions Act of 2006 designates the State Air Resources Board as the state agency charged with monitoring and regulating sources of emissions of greenhouse gases. The act authorizes the state board to include the use of market-based compliance mechanisms. Existing law requires all moneys, except for fines and penalties, collected by the state board as part of a market-based compliance mechanism to be deposited in the Greenhouse Gas Reduction Fund and to be available upon appropriation.

This bill would establish the Zero- and Near-Zero-Emission Intermodal Terminals Program to be administered by the state board to fund equipment upgrades and investments at intermodal terminals, as defined, to help transition the states freight system to be zero-emission and near-zero-emission operations. The bill would authorize the program to be implemented with moneys from the Greenhouse Gas Reduction Fund.

(2)Existing law establishes the State Energy Resources Conservation and Development Commission and requires the commission to administer various programs to award grants and other financial assistance for energy-related projects.

This bill would establish the Port Building and Lighting Efficiency Greenhouse Gas Reduction Fund Program to be administered by the commission for the purpose of funding energy efficiency upgrades and investments at public ports that help reduce electrical load and increase on-site renewable generation. The bill would authorize the program to be implemented with moneys from the Greenhouse Gas Reduction Fund.

(3)This bill would declare that it is to take effect immediately as an urgency statute.

Date of Hearing: May 11, 2016

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez, Chair

ABPCA Bill Id:AB 1657

Author:(O'Donnell) – As Amended Ver:April 7, 2016

Urgency: Yes State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill establishes the Zero- and Near-Zero-Emission Intermodal Terminals Program (Intermodal Terminals Program) and the Port Building and Lighting Efficiency Program (Port Efficiency Program) to fund projects to reduce emissions and increase energy efficiency from freight movement and public port operations. Specifically, this bill:

1. Creates the Intermodal Terminals Program, to be administered by the California Air Resources Board (ARB) and funded by the Greenhouse Gas Reduction Fund (GGRF), to pay for equipment upgrades and investments at port terminals to help transition the state's freight system to zero-emission and near-zero-emission operations.
2. Creates the Port Efficiency Program, to be administered by the California Energy Commission (CEC), to fund energy upgrades and investments at public ports that reduce electrical load and increase on-site renewable generation using GGRF monies appropriated by the Legislature.
3. Prohibits vessel upgrades from being considered for funding for both the Intermodal Terminals and the Port Efficiency Programs.

FISCAL EFFECT:

1. Cost pressures, likely in the hundreds of millions of dollars (GGRF) to fund the two incentive programs.
2. Assuming $100 million in annual funding, increased ongoing costs $2.2 million and 14.5 positions (GGRF) for the ARB to establish and implement the new incentive program.
3. Assuming $50 million in annual funding, increased ongoing costs of $1.1 to $1.5 million and 8 positions for CEC to establish and implement the new incentive program.

COMMENTS:

1. Purpose. According to the author, California ports need to reduce emissions while also improving energy efficiency and promoting economic growth. This bill is intended to provide a framework to help publicly finance port infrastructure improvements using GGRF monies generated by the state's cap and trade program.
2. Background. The California Global Warming Solutions Act of 2006 (AB 32) requires ARB to adopt a statewide GHG emissions limit equivalent to 1990 levels by 2020 and adopt regulations, including market-based compliance mechanisms, to achieve maximum technologically feasible and cost-effective GHG emission reductions.
   

As part of the implementation of AB 32 market-based compliance measures, ARB adopted a cap-and-trade program that caps the allowable statewide emissions and provides for the auctioning of emission credits, the proceeds of which are quarterly deposited into the GGRF available for appropriation by the Legislature.

The 2014-15 Budget Act allocated cap-and-trade revenues for the 2014-15 fiscal year and established a long-term plan for the allocation of cap-and-trade revenues beginning in fiscal year 2015-16.

The Budget continuously appropriates 35% of cap-and-trade funds for investments in transit, affordable housing, and sustainable communities. Twenty-five percent of the revenues are continuously appropriated to continue the construction of high-speed rail. The remaining 40% are to be appropriated annually by the Legislature for investments in programs that include low-carbon transportation, energy efficiency and renewable energy, and natural resources and waste diversion.

An expenditure plan for the 40% was not included in the 2015-16 Budget Act, with the exception of $227 million appropriated to continue funding for specified existing programs. The remaining 2015-16 revenues, along with 2016-17 revenues totaling $3.1 billion, are available for appropriation this year.

1. Previous Legislation. AB 678 (O'Donnell) requires ARB, in conjunction with the CEC, to develop the Energy Efficient Ports Program to fund energy efficiency projects that help reduce emissions of GHG and air pollutants at public ports. AB 678 was approved by this Committee but was later held on suspense in the Senate Appropriations Committee.

Analysis Prepared by: Jennifer Galehouse / APPR. / (916) 319-2081

Date of Hearing: April 18, 2016

ASSEMBLY COMMITTEE ON TRANSPORTATION

Jim Frazier, Chair

ABPCA Bill Id:AB 1657 (

Author:O'Donnell) – As Amended Ver:April 7, 2016

SUBJECT: Air pollution: public ports and intermodal terminals

SUMMARY: Establishes the Zero- and Near-Zero-Emission Intermodal Terminals Program (Intermodal Terminals Program) and the Port Building and Lighting Efficiency Program (Port Efficiency Program) to fund projects to reduce emissions and increase energy efficiency from freight movements and public port operations. Specifically, this bill:

1. Creates the Intermodal Terminals Program, administered by the California Air Resources Board (ARB) and funded by the Greenhouse Gas Reduction Fund (GGRF), to pay for equipment upgrades and investments at port terminals to help transition the state's freight system to zero-emission and near-zero-emission operations.
2. Specifies, for the Intermodal Terminals Program, certain project eligibility requirements to ensure deployment of zero- and near-zero-emission equipment including:
   1. Early deployment of zero-emission and near-zero-emission equipment that handles the cargo transfers at intermodal terminals;
   2. Installation of infrastructure necessary for the deployment of zero- and near-zero-emission equipment, including fueling infrastructure at intermodal terminals; and,
   3. Transition of cargo handling equipment to zero- and near-zero-emission equipment.
3. Requires, for the Intermodal Terminals Program, that ARB:
   1. Develop and adopt specified program guidelines consistent with AB 32 (Núñez), Chapter 488, Statutes of 2006, the GGRF Investment Plan, as well as the Communities Revitalization Act established pursuant to AB 1532 (Pérez), Chapter 807, Statutes of 2012;
   2. Include baseline equipment eligibility for types of equipment that satisfies zero-emission and near-zero-emission requirements; and,
   3. Establish limits on program award amounts so that no one project or entity receives more than 50% of program funding.
4. Requires ARB, when allocating monies for the Intermodal Terminals Program, to consider:
   1. The impact of the investment on freight system efficiency;
   2. The degree to which the investment facilitated transition of the system to zero- or near-zero-emissions;
   3. The impact on cost and competitiveness on the freight sector; and,
   4. The reduction of greenhouse gas (GHG) emissions.
5. Creates the Port Efficiency Program, to be administered by the California Energy Commission (Commission), to fund energy upgrades and investments at public ports that reduce electrical load and increase on-site renewable generation using GGRF monies appropriated by the Legislature.
6. Requires, pursuant to the Port Efficiency Program, that eligible projects include:
   1. Installing renewable technologies at public ports, marine terminals, warehouses, and other freight facilities;
   2. Replacing conventional lighting at public ports;
   3. Implementing energy efficiency measures that reduce grid-based energy demand from port operations; and,
   4. Other projects that help electrify public ports and reduce GHGs.
7. Requires, pursuant to the Port Efficiency Program, that the Commission adopt guidelines consistent with AB 32, the GGRF Investment Plan, and the Communities Revitalization Act.
8. Requires public ports to adopt, in consultation with the appropriate electric utility, an energy plan that meets specified criteria.
9. Requires, for the Port Efficiency Program, that the Commission allocate funds on a competitive basis for projects shown to achieve the greatest GHG emission reductions not otherwise required by law or regulation.
10. Prohibits vessel upgrades from being considered for funding for both the Intermodal Terminals and the Port Efficiency Programs.
11. Defines a variety of terms.
12. Is an urgency measure.

EXISTING LAW:

1. Requires ARB, pursuant to AB 32, to adopt a statewide GHG emissions equivalent to 1990 levels by 2020 and to adopt regulations to achieve maximum technologically feasible and cost-effective GHG emission reductions.
2. Authorizes ARB, pursuant to AB 32, to use market-based compliance mechanisms (cap and trade) to comply with GHG reduction regulations.
3. Established the GGRF and requires all moneys, except for fines and penalties, collected by ARB pursuant to cap and trade to be deposited in the GGRF and made available for appropriation by the Legislature.
4. Established the GGRF Investment Plan and Communities Revitalization Act, pursuant to

AB 1532, which set procedures for the investment of cap and trade revenues.

1. Requires, pursuant to SB 535, (de León), Chapter 830, Statutes of 2012, that GGRF Investment Plan allocate a minimum of 25% of available GGRF revenues to projects that provide benefits to identified disadvantaged communities and a minimum of 10% of available GGRF revenues to projects located within identified disadvantaged communities.

FISCAL EFFECT: Unknown

COMMENTS: According to the author, California ports need to reduce emissions while also improving energy efficiency and promoting economic growth. To accomplish this, the author introduced AB 1657 to provide a framework to help publicly finance public port infrastructure improvements using GGRF monies generated by the state's cap and trade program.

Specifically, AB 1657 would establish the Intermodal Terminals Program and the Port Efficiency Program administered by ARB and the Commission, respectively. The Intermodal Terminals Program would fund equipment upgrades and investments at intermodal terminals to help the state transition its freight system to zero- and near-zero-emissions operations. The Port Efficiency Program, administered by the Commission, would fund energy efficiency upgrades and investments at public ports to help reduce electrical load and increase on-site renewable generation.

The author points out that one of the most valuable tools available to help the state achieve its climate change goals is the AB 32 cap and trade program and that these funds should be used to address the state's greatest environmental challenges. The author asserts that in Southern California, ports have much more work remaining to achieve zero- and near-zero emissions operations despite, making substantial progress in reducing emissions and cleaning up the air. He contends that using cap and trade funds to implement programs that reduce emissions and improve air quality offers the perfect opportunity for the state to partner with industry to address major transportation sector emissions and improve air quality, particularly for disadvantaged communities that tend to lie within close proximity to ports and other transportation hubs.

Addressing emissions associated with California's public ports would result in significant air quality improvements and get the state closer to achieving its climate change goals. This is particularly necessary given that the American Lung Association again reported in 2015 that the Los Angeles Basin has some of the nation's highest ozone and fine particle pollution and that studies continue to indicate that black carbon, formaldehyde, nickel, benzene, arsenic, and other chemicals that are still causing increased cancer risks around the ports of Los Angeles and Long Beach, due primarily to heavy diesel emissions associated with port operations, it makes sense to use of cap and trade dollars should be used to address these issues.

AB 1657 is only one of many bills before the Legislature this year that seeks to utilize GGRF revenues to address climate change and air quality impacts. Undoubtedly, there is merit in all of these proposals and they will have to reconcile one with the other at some point in the legislative process. It is important to note, however, that in directing GGRF funds to projects on or near California's public ports as envisioned by AB 1657, the state would be able to achieve significant leveraging of the funds from private investments while reducing emissions in disadvantaged communities, all the while improving the supply chain and ultimately result in economic benefits across California.

Double referral: This bill passed out of the Assembly Natural Resources Committee on
April 4, 2016, with a 9-0 vote.

Previous legislation: AB 678 (O'Donnell), requires ARB, in conjunction with the Commission, to develop the Energy Efficient Ports Program to fund energy efficiency projects that help reduce emissions of GHG and air pollutants at public ports. AB 678 was approved by this Committee on April 13, 2015, by a vote of 9-0, but was later held in the Senate Appropriations Committee.

AB 1532 (Pérez), Chapter 807, Statutes of 2012, created the Greenhouse Gas Reduction Fund Investment Plan and Communities Revitalization Act to set procedures for the investment of regulatory fee revenues derived from the auction of GHG allowances.

AB 32 (Núñez), Chapter 488, Statutes of 2006, created the California Global Warming Solutions Act of 2006 and required ARB to adopt GHG reduction measures to ensure that statewide emissions are reduced to 1990 levels by 2020.

REGISTERED SUPPORT / OPPOSITION:

Support

APM Terminals

Associated General Contractors

California Association of Port Authorities

California Railroad Industry

Center for Sustainable Energy

Los Angeles County Business Federation

Los Angeles County Economic Development Corporation

Los Angeles County Economic Development Corporation

Maersk Line

Pacific Merchant Shipping Association

Philips Lighting

San Diego County Regional Airport Authority

Wilmington Chamber of Commerce

Opposition

None on file

Analysis Prepared by: Victoria Alvarez / TRANS. / (916) 319-2093

Date of Hearing: April 4, 2016

ASSEMBLY COMMITTEE ON NATURAL RESOURCES

Das Williams, Chair

ABPCA Bill Id:AB 1657 (

Author:O'Donnell) – As Introduced Ver:January 13, 2016

SUBJECT: Air pollution: public ports and intermodal terminals

SUMMARY: Establishes the Zero- and Near-Zero-Emission Intermodal Terminals Program and the Port Building and Lighting Efficiency Program to fund projects to reduce emissions and increase energy efficiency from freight and public port operations.

EXISTING LAW:

1. Requires the Air Resources Board (ARB), pursuant to California Global Warming Solutions Act of 2006 [AB 32 (Nunez), Chapter 488, Statutes of 2006], to adopt a statewide greenhouse gas (GHG) emissions limit equivalent to 1990 levels by 2020 and adopt regulations to achieve maximum technologically feasible and cost-effective GHG emission reductions. AB 32 authorizes ARB to permit the use of market-based compliance mechanisms to comply with GHG reduction regulations, once specified conditions are met.
   
2. Establishes the Greenhouse Gas Reduction Fund (GGRF) and requires all moneys, except for fines and penalties, collected by ARB from the auction or sale of allowances pursuant to a market-based compliance mechanism (i.e., the cap-and-trade program adopted by ARB under AB 32) to be deposited in the GGRF and available for appropriation by the Legislature.
3. Establishes the GGRF Investment Plan and Communities Revitalization Act [AB 1532 (John A. Pérez), Chapter 807, Statutes of 2012] to set procedures for the investment of GHG allowance auction revenues. AB 1532 authorizes a range of GHG reduction investments and establishes several additional policy objectives.
4. Requires the investment plan to allocate (1) a minimum of 25% of the available moneys in the GGRF to projects that provide benefits to identified disadvantaged communities, and (2) a minimum of 10% of the available moneys in the GGRF to projects located within identified disadvantaged communities [SB 535 (De Leon), Chapter 830, Statutes of 2012].
5. Establishes the Clean Truck, Bus, and Off-Road Vehicle and Equipment Technology Program to use GGRF funds for development, demonstration, pre-commercial pilot, and early commercial deployment of zero- and near-zero-emission truck, bus, and off-road vehicle and equipment technologies, including medium- and heavy-duty trucks, vocational trucks, short-haul and long-haul trucks, buses, and off-road vehicles and equipment, port equipment, agricultural equipment, marine equipment, and rail equipment [SB 1204 (Lara), Chapter 524, Statutes of 2014].

THIS BILL:

1. Establishes the Zero- and Near-Zero-Emission Intermodal Terminals Program, administered by ARB, to fund equipment upgrades and investments at intermodal terminals to help transition the state's freight system to be zero-emission and near-zero-emission operations.
   1. Requires eligible projects to include:
      1. The early deployment of zero-emission and near-zero-emission equipment that handles the transfer of cargo at intermodal terminals.
      2. The installation of infrastructure necessary for the deployment of zero-emission and near-zero-emission equipment, including fueling infrastructure at intermodal terminals.
      3. Other projects that facilitate the transition of cargo handling equipment to zero-emission and near-zero-emission equipment.
   2. Requires ARB to adopt program guidelines that do all of the following:
      1. Are consistent with AB 32, AB 1532 and SB 535.
      2. Include baseline equipment eligibility with respect to the types of equipment that will satisfy the zero-emission and near-zero-emission requirement.
      3. Establish limits on award amounts so that no one project or entity receives more than 50% of the program funding.
   3. Requires ARB, in allocating funds, to consider all of the following:
      1. The impact of the investment on freight system efficiency.
      2. The degree to which the investment facilitates transition of the freight system to zero- or near-zero emissions.
      3. The impact on the cost and competitiveness of the state’s freight sector.
      4. The reduction of GHG.
   4. Defines "intermodal terminal," by reference to the California Freight Mobility Plan, as a location where different transportation modes and networks connect.
2. Establishes the Port Building and Lighting Efficiency Program, administered by the California Energy Commission (CEC), to fund energy efficiency upgrades and investments at public ports that help reduce electrical load and increase on-site renewable generation.
   1. Requires eligible projects to include:
      1. The installation of renewable technologies at marine terminals and at warehouses and other freight facilities at public ports.
      2. The replacement of conventional lighting at public ports.
      3. The implementation of energy efficiency measures that reduce grid-based energy demand from operations at public ports.
      4. Other projects that add to the electrification of public ports and reduce GHG.
   2. Requires the CEC to adopt program guidelines that are consistent with AB 32.
   3. Requires a public port to adopt, in consultation with its electric utility, an energy plan that meets all of the following criteria:
      1. Is reviewed and approved by the CEC.
      2. Adheres to the state’s preferred energy loading order and requires benchmarking for energy retrofit projects and the reporting of measurable energy savings.
      3. Requires the project applicant to demonstrate that the project will achieve a reduction in GHG.
      4. Requires the CEC, in prioritizing projects for awarding funding, to consider the extent to which a project would reduce GHG emissions and provide environmental and public health co-benefits, including improved air and water quality.
3. Specifies that moneys from the GGRF shall be available, upon appropriation by the Legislature, to implement both programs.
4. Is an urgency measure.

FISCAL EFFECT: Unknown

COMMENTS:

1. Existing GGRF funding and programs. The 2014-15 Budget Act allocated GGRF revenues for the 2014-15 fiscal year and established a long-term plan for the allocation of GGRF revenues beginning in fiscal year 2015-16. Thirty-five percent of GGRF is continuously appropriated for investments in transit, affordable housing, and sustainable communities. Twenty-five percent is continuously appropriated to continue the construction of the high-speed rail project. The remaining 40% is subject to annual appropriation by the Legislature for investments in programs that include low-carbon transportation, energy efficiency and renewable energy, and natural resources and waste diversion. An expenditure plan for the 40% was not included in the 2015-16 Budget Act, with the exception of $227 million appropriated to continue funding for specified existing programs. The remaining 2015-16 revenues, along with 2016-17 revenues, are available for appropriation this year.
   
   The 2016 Annual Report of Cap and Trade Auction Proceeds includes an analysis of funds spent within and benefiting disadvantaged communities, excluding high speed rail spending. According to the report, 39% of expenditures were for projects located within disadvantaged communities and 51% of the overall funding benefited disadvantaged communities.

Listed below are the major GGRF program areas, administering agency, and funding to date:

• 1. Transportation and Sustainable Communities
     1. High Speed Rail, High Speed Rail Authority (Authority), $750 million
     2. Transit and Intercity Rail Capital Program, Transportation Agency, $225 million
     3. Low Carbon Transit Operations Program, Department of Transportation (Caltrans), $125 million
     4. Affordable Housing and Sustainable Communities Program, Strategic Growth Council (SGC), $530 million
     5. Low Carbon Transportation, ARB, $325 million
  2. Clean Energy and Energy Efficiency
     1. Low-Income Weatherization Program, Community Services and Development (CSD), $154 million
     2. Energy Efficiency in Public Buildings, CEC, $20 million
     3. Agricultural Energy and Operational Efficiency, Department of Food and Agriculture (CDFA), $75 million
     4. Water-Energy Efficiency, Department of Water Resources (DWR), $75 million
  3. Natural Resources and Waste Diversion
     1. Wetlands and Watershed Restoration, Department of Fish and Wildlife (DFW), $27 million
     2. Urban Forestry, Forest Health Restoration, and Reforestation, Department of Forestry and Fire Protection (CAL FIRE), $42 million
     3. Waste Diversion, Department of Resources Recycling and Recovery (CalRecycle), $31 million

The Governor's 2016-17 Budget proposes just under $3.1 billion in expenditures:

• 1. Continuous Appropriations
     1. High Speed Rail, Authority, $500 million
     2. Low Carbon Transit Operations, State Transit Assistance, $100 million
     3. Transit and Intercity Rail Capital Program, Transportation Agency, $200 million
     4. Affordable Housing and Sustainable Communities Program, SGC, $400 million
  2. Fifty Percent Reduction in Petroleum Use
     1. Transit and Intercity Rail Capital Program, Transportation Agency, $400 million
     2. Low Carbon Road Program, Caltrans, $100 million
     3. Low Carbon Transportation and Fuels, ARB, $500 million
     4. Biofuel Facility Investments, CEC, $25 million
  3. Local Climate Action
     1. Transformative Climate Communities, SGC, $100 million
  4. Short-Lived Climate Pollutants
     1. Black Carbon Woodsmoke and Refrigerants, ARB, $60 million
     2. Waste Diversion, CalRecycle, $100 million
     3. Climate Smart Agriculture – Healthy Soils and Dairy Digesters, CDFA, $55 million
  5. Safeguarding California/Water Action Plan
     1. Water and Energy Efficiency, CDFA and DWR, $30 million
     2. Drought Executive Order, CEC, $60 million
     3. Wetlands and Watershed Restoration/CalEcoRestore, DFW, $60 million
  6. Safeguarding California/Carbon Sequestration
     1. Healthy Forests and Urban Forestry, CAL FIRE, $180 million
     2. Urban Greening, Natural Resources Agency, $20 million
  7. Energy Efficiency/Renewable Energy
     1. Energy Efficiency for Public Buildings, Department of General Services, $30 million
     2. California Lending for Energy and Environmental Needs Center, I Bank, $20 million
     3. Energy Corps, Conservation Corps, $15 million
     4. Energy Efficiency Upgrades/Weatherization, Department of Community Services and Development, $75 million
     5. Renewable Energy and Energy Efficiency Projects, University of California, California State University, $60 million

1. Author's statement:

In order to further reduce the environmental impacts of port operations and achieve new air quality benchmarks, the enhancement of existing port infrastructure is needed. We need to continue to leverage private resources, while also partnering with the industry to achieve greater results, instead of just imposing unfunded mandates. Strategic investment of cap-and-trade dollars are supposed to be appropriated every year with the intention to maximize economic, environmental, and public health benefits to the state. However, despite the fact that the state is expected to distribute over $3 billion in cap-and-trade revenue this year alone, there are no port-specific programs that receive funding in support of these goals. AB 1657 provides the framework necessary to help finance improvements in support of these goals, enabling California ports to reduce emissions while also improving efficiency and promoting economic growth.

California’s 11 public ports serve as key international gateways for billions of dollars in products entering and exiting the United States, supporting millions of jobs statewide. With goods movement representing roughly one-third of the jobs in California, the state’s economy and quality of life depend on the efficient and safe delivery of goods to and from our ports.

At the same time, the environmental impacts from goods movement activities have a serious adverse impact on our environment by generating criteria pollutants, toxic air contaminants, and GHG emissions. ARB has developed various regulations intended to address these air quality issues, and the maritime industry has made great strides in their environmental clean-up efforts. In fact, industry is in the process of investing an estimated $5 billion to improve the state’s air quality, and their efforts are already paying off. The Ports of Los Angeles and Long Beach have implemented Clean Air Action Plans, which have been the cornerstone for very significant emissions reductions over the last decade—reductions on the order of 80% in particulate matter, 90% in sulfur oxides, 50% in nitrogen oxides, and significant GHG reductions since 2005. Although extremely expensive, these reductions have been achieved largely on a cooperative basis with industry. Nonetheless, there is still much work to be done.

While these efforts and stricter air quality laws and regulations have improved air quality across the state, many areas in the state continue to experience poor air quality. The American Lung Association again reported in their 2015 State of the Air report that the Los Angeles Basin has some of the nation’s highest ozone and fine particulate pollution, and the South Coast Air Quality Management District has consistently cited the Ports of Los Angeles and Long Beach as the number one polluter in Southern California.

1. Bill should be clarified to focus on measures that are not required by regulation or funded by other sources. As the author notes, California's ports and freight operations are a major contributor to air pollution and GHG emissions. As such, these sources are subject to a variety of regulations to reduce emissions. For example, ARB has adopted regulations to reduce diesel emissions from ships at berth, cargo handling equipment, and port-serving trucks. In addition, there are several incentive programs applicable to port and freight operations, including the Carl Moyer Memorial Air Quality Standards Attainment Program, the Proposition 1B Goods Movement Emission Reduction Program, the AB 118 Air Quality Improvement Program, and a wide range of ratepayer-funded utility energy efficiency programs.

To the extent the GGRF is tapped to fund projects to reduce emissions and increase energy efficiency at intermodal terminals and public ports, the programs should be focused on measures that achieve additional GHG emission reductions that won't be achieved under business as usual (i.e., through private investments made to comply with legal mandates or through other publicly-funded incentive programs). The author and the committee may wish to consider amendments to require both ARB and CEC to assure the projects funded achieve additional GHG emission reductions and that funds are not awarded to comply with existing regulations.

1. Prior legislation. AB 678 (O'Donnell) requires ARB, in conjunction with CEC, to develop the Energy Efficient Ports Program to fund energy efficiency projects that help reduce emissions of GHG and air pollutants at public ports. AB 678 was approved by this Committee on April 13, 2015, by a vote of 9-0, but was later held in the Senate Appropriations Committee.
2. Double referral. This bill has been double-referred to the Assembly Transportation Committee.

REGISTERED SUPPORT / OPPOSITION:

Support

APM Terminals

Biz Fed

California Association of Port Authorities

California Railroad Industry

Center for Sustainable Energy

Maersk Line

Pacific Merchant Shipping Association

Philips Lighting

San Diego County Regional Airport Authority

Wilmington Chamber of Commerce

Opposition

None on file

Analysis Prepared by: Lawrence Lingbloom / NAT. RES. / (916) 319-2092