Existing law establishes the Alternative and Renewable Fuel and Vehicle Technology Program, administered by the State Energy Resources Conservation and Development Commission. Existing law requires the program to provide funding measures to certain entities to develop and deploy innovative technologies that transform Californias fuel and vehicle types to help attain the states climate change policies. Existing law requires the commission to provide preferences to projects that maximize the goals of the program based on certain criteria, including the projects ability to provide economic benefits for California by promoting California-based technology firms, jobs, and businesses. Existing law specifies that projects eligible for funding include workforce training programs related to various sectors or occupations related to the purposes of the program.

This bill would add a projects ability to transition workers to, or promote employment in, the alternative and renewable fuels and vehicle technology sector as additional criteria on which preference under the program shall be provided. The bill would revise the eligibility criteria for workforce training programs, as specified. The bill would require the commission to collaborate with entities, as specified, that have expertise in workforce development to implement the workforce development components of the program.

Existing law establishes the Alternative and Renewable Fuel and Vehicle Technology Program, administered by the State Energy Resources Conservation and Development Commission. Existing law requires the program to provide funding measures to certain entities to develop and deploy innovative technologies that transform Californias fuel and vehicle types to help attain the states climate change policies. Existing law requires the commission to provide preferences to projects that maximize the goals of the program based on certain criteria, including the projects ability to provide economic benefits for California by promoting California-based technology firms, jobs, and businesses. Existing law specifies that projects eligible for funding include workforce training programs related to various sectors or occupations related to the purposes of the program.

This bill would add a projects ability to transition workers to, or promote employment in, the alternative and renewable fuels and vehicle technology sector as additional criteria on which preference under the program shall be provided. The bill would revise the eligibility criteria for workforce training programs, as specified. The bill would require the commission to collaborate with entities, as specified, that have expertise in workforce development to implement the workforce development components of the program.

Existing law establishes the Alternative and Renewable Fuel and Vehicle Technology Program, administered by the State Energy Resources Conservation and Development Commission. Existing law requires the program to provide funding measures to certain entities to develop and deploy innovative technologies that transform Californias fuel and vehicle types to help attain the states climate change policies. Existing law requires the commission to provide preferences to projects that maximize the goals of the program based on certain criteria, including the projects ability to provide economic benefits for California by promoting California-based technology firms, jobs, and businesses. Existing law specifies that projects eligible for funding include workforce training programs related to various sectors or occupations related to the purposes of the program.

This bill would add a projects ability to provide a path for trained workers to transition to jobs in the clean technology and renewable fuels sectors and a projects ability to promote employment of trained workers in those sectors transition workers to, or promote employment in, the alternative and renewable fuels and vehicle technology sector as additional criteria on which preference under the program shall be provided. The bill would revise the eligibility criteria for workforce training programs, as specified. The bill would require the commission to collaborate with entities, as specified, that have expertise in workforce development to implement the workforce development components of the program.

Existing law establishes the Alternative and Renewable Fuel and Vehicle Technology Program, administered by the State Energy Resources Conservation and Development Commission. Existing law requires the program to provide funding measures to certain entities to develop and deploy innovative technologies that transform Californias fuel and vehicle types to help attain the states climate change policies. Existing law requires the commission to provide preferences to projects that maximize the goals of the program based on certain criteria, including the projects ability to provide economic benefits for California by promoting California-based technology firms, jobs, and businesses. Existing law specifies that projects eligible for funding include workforce training programs related to various sectors or occupations related to the purposes of the program.

This bill would add a projects ability to provide a path for trained workers to transition to jobs in the clean technology and renewable fuels sectors and a projects ability to promote employment of trained workers in those sectors as additional criteria on which preference under the program shall be provided. The bill would revise the eligibility criteria for workforce training programs, as specified.

Existing law establishes the Alternative and Renewable Fuel and Vehicle Technology Program, administered by the State Energy Resources Conservation and Development Commission. Existing law requires the program to provide funding measures to certain entities to develop and deploy innovative technologies that transform Californias fuel and vehicle types to help attain the states climate change policies. Existing law requires the commission to provide preferences to projects that maximize the goals of the program based on certain criteria, including the projects ability to provide economic benefits for California by promoting California-based technology firms, jobs, and businesses.

This bill would add a projects ability to provide a path for trained workers to transition to jobs in the clean technology and renewable fuels sectors and a projects ability to promote employment of trained workers in those sectors as additional criteria on which preference under the program shall be provided.

Existing law, the Political Reform Act of 1974, provides for the comprehensive regulation of campaign financing, including requiring the reporting of campaign contributions and expenditures and imposing other reporting and recordkeeping requirements on campaign committees. The act requires that a candidate for elective state office or a committee primarily formed to support or oppose a state ballot measure, if the candidate or committee has reportable contributions or expenditures of $25,000 or more, file a report with the Secretary of State disclosing the receipt of a contribution of $1,000 or more during an election cycle, as defined, within 24 hours of receiving the contribution. At times other than during the election cycle, the act requires those candidates and committees to file a report for contributions of $5,000 or more within 10 business days of receipt of the contribution. Existing law makes a knowing or willful violation of the Political Reform Act of 1974 a misdemeanor and subjects offenders to criminal penalties.

This bill would modify these reporting requirements to instead require the above-described candidates and committees, and a committee that makes an expenditure in support of or opposition to candidates for elective state office or state ballot measures, to file a report with the Secretary of State disclosing the receipt of a contribution of $1,000 or more during an election cycle within 24 hours of receipt of the contribution. At times other than during an election cycle, the bill would require those candidates and committees to file a report for contributions of $1,000 or more within 5 business days of receipt of the contribution. Because this bill would expand the definition of an existing crime, it would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

The Political Reform Act of 1974, an initiative measure, provides that the Legislature may amend the act to further the acts purposes upon a ²/₃ vote of each house and compliance with specified procedural requirements.

This bill would declare that it furthers the purposes of the act.

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

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 1697

Author:(Bonilla)

As Amended Ver:August 15, 2016

Majority vote

Original Committee Reference: J., E.D., & E.

SUMMARY: Expands the project preference and selection criteria under the Alternative and Renewable Fuel and Vehicle Technology Program (Program) to more effectively target workforce training opportunities that are aligned with clean technology and alternative/renewable fuel career pathways.

The Senate amendments make technical clarifying changes.

EXISTING LAW:

1. Establishes the Program, administered through the State Energy Resources Conservation and Development Commission (Commission), for the purpose of providing a variety of funding opportunities that assist in the development and deployment of technology and alternative and renewable fuels in the marketplace.
2. Authorizes the Commission to provide preferences to those projects that maximize the Program's goals, based on specified criteria, and limits workforce related funding to alternative and renewable fuel feedstock production and extraction; renewable fuel production, distribution, transport, and storage; high-performance and low-emission vehicle technology and high tower electronics; automotive computer systems; mass transit fleet conversion, servicing, and maintenance; and other sectors or occupations related to the purposes of this chapter.

FISCAL EFFECT: According to the Senate Appropriations Committee:

1. One-time CEC costs of approximately $50,000 for outreach and information technology costs. (ARFVT Fund)
2. Ongoing CEC costs of approximately $150,000 annually and 1 personnel year (PY) of staff to update program regulations, incorporate changes to the workforce development component, and administer the revised program. (ARFVT Fund)

COMMENTS: To address the long-term goals of reducing the emissions of greenhouse gases in California, the Legislature approved and the Governor signed the California Alternative and Renewable Fuel, Vehicle Technology, Clean Air and Carbon Reduction Act of 2007 that established the Alternative and Renewable Fuel and Vehicle Technology Program. The Program is administered through the Commission, which each year awards up to $100 million in grants to support the development and deployment of innovative technologies related to alternative fuel and vehicle types. Although workforce development is among the list of eligible activities, funding for training has been limited. Of the $100 million available each year, the Commission planned to set aside $2.5 million in 2014-15 and $3 million in 2015-16 for workforce related investments.

This bill modifies the selection criteria to provide grant applications for workforce-related activities a more equal playing field among the various authorized funding purposes.

California's High-Carbon Economy: California is home to over 38 million people, providing the state with one of the most diverse populations in the world, often comprising the single largest concentration of nationals outside their native country. In 2014, this diverse group of business owners and workers produced $2.3 trillion in goods and services; $174.1 billion of which were exported to over 220 countries around the world. California's 2014 Gross Domestic Product (GDP) ranks the state economy as the eighth largest in the world.

Many policy makers and economists describe California as having not a single economy, but having a highly integrated network of a dozen or so regional economies. While biotech has a comparative advantage in some regions, information technology drives growth in others. This economic diversity is one of the reasons California was able to so aggressively move out of the recession, ranking number two in the nation by Business Insider for fastest growing economy in the nation in August 2014 and as having the fourth best overall economy in March 2015.

There are approximately 19 million people within the California labor force, generally contributing to 11 industry sectors, including government. The chart below displays California employment by industry sector, based on the 2015 annual average. The Trade, Transportation, and Utility sector is the largest employment sector and the second largest contributor to the GDP. In 2014 (most recent data available), this sector contributed $351 billion to the California economy and supported jobs in other industry sectors including Manufacturing, Professional Services, and Financial Activities. While providing significant economic advantages, these same industry sectors are primary contributors to the state's greenhouse gas emissions.

In January 2015, Governor Brown announced a commitment to set new greenhouse gas emissions reduction targets. The Governor's Integrated Plan calls for:

1. 50% of the state's electricity to come from renewable energy sources by 2030;
2. A 50% reduction in petroleum by 2030;
3. Doubling the energy efficiency savings at existing buildings by 2030;
4. A Carbon sequestration strategy that involves new management techniques for the state's working landscapes, including farms, ranch lands, forests, and wetlands;
5. A reduction in short-lived climate pollutants; and
6. Mitigation strategies to safeguard California against the impacts of climate change.

Meeting these new policy goals will require substantial restructuring within the economy, especially for manufacturing, energy production, and transport-related activities. Both workers and businesses will be impacted, requiring retraining, retooling, and repositioning. While this transition opens new opportunities for some, it also places new burdens on those that have not necessarily recovered from the impact of the Financial Crisis and subsequent recession.

California's current economy appears to be diverging in two disparate directions. On the one hand, state unemployment in April 2016 was at a seven-year low (5.3%) and certain businesses and regions are experiencing strong economic growth. On the other hand, there were areas of the state and certain population groups who remain economically distressed with high unemployment rates among blacks (10.4%), Hispanics (7.1%), young workers (19.6%), and inland California [Imperial County at (18.9%) and Colusa at (16.2%)].

Transitioning to a lower carbon economy has economic costs, which the state has been slow to acknowledge and address. The state has tools to help make this transition less of a hardship for impacted workers, businesses, and communities. This bill proposes the expanded use of an existing funding source to help retrain workers who face potential unemployment when their middle-skill jobs are eliminated.

Career Pathways in the Clean Tech Industries: According to the Air Resources Board, their initial analysis on the employment impact of AB 32 (Núñez), Chapter 488, Statutes of 2006, showed that the utility industry would be the most significantly impacted. Employment losses could be nearly as high as 15%. A related policy brief by University of California, Berkley's Center for Labor Research and Education found that implementation of AB 32 would likely present significant workforce challenges and that a successful transition to green technologies would require a well-trained technical and blue-collar labor force. In the absence of careful and farsighted implementation strategies, the policy brief stated that California could lose businesses to other regions and ultimately result in trading well-paying jobs for new jobs of lesser quality.

According to the 2015-16 Investment Plan for the Program, the Commission has three active interagency agreements on workforce, including $7.25 million with Employment Development Department (EDD), $9.5 million with the Employment Training Panel, and $5.5 million with the California Community Colleges Chancellor's Office. For the same time period, the Commission was setting aside an additional $3 million.

Here is an example of the type of work being undertaken through these interagency agreements: The Employment Training Panel and Blue Sky received a $59,280 grant for 19 employees to receive training to update their manufacturing skills. Participants included yard workers, operations and maintenance staff, refiners, and drivers in the processing and distribution of biodiesel products.

Analysis Prepared by: Toni Symonds / J., E.D., & E. / (916) 319-2090 FN: 0004401

 THIRD READING  

Bill No: AB 1697

Author:

: 8/15/16 in Senate

Vote:

SENATE TRANS. & HOUSING COMMITTEE: 9-1, 6/28/16

AYES: Beall, Cannella, Allen, Galgiani, Leyva, McGuire, Mendoza, Roth, Wieckowski

NOES: Bates

NO VOTE RECORDED: Gaines

SENATE APPROPRIATIONS COMMITTEE: 5-2, 8/11/16

AYES: Lara, Beall, Hill, McGuire, Mendoza

NOES: Bates, Nielsen

ASSEMBLY FLOOR: 80-0, 5/31/16 - See last page for vote

SUBJECT:

SOURCE: Author

DIGEST: This bill expands the criteria for funding programs through the state’s Alternative and Renewable Fuel and Vehicle Technology Program (ARFVTP) to include workforce training, as specified.

ANALYSIS:

Existing law:

1. Establishes the ARFVTP, administered by the California Energy Commission (CEC). This program provides funding (about $100 million per year) for development and deployment of alternative and renewable fuels and advanced transportation technologies to help attain the state’s climate change goals. This program, along with several others, is funded through surcharges on vehicle registration fees, a portion of the vessel registration fee, 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 logging vehicles operated on public roads.
2. Requires the CEC to prioritize projects that maximize ARFVTP goals based on the following criteria, as applicable:
3. Ability to provide a measurable transition to a diverse portfolio of viable alternative fuels that meet petroleum reduction and alternative fuel use goals.
4. Consistency with state climate change policy and low-carbon fuel standards.
5. Ability to reduce criteria air pollutants and air toxics and reduce or avoid multimedia environmental impacts.
6. Ability to decrease the discharge of water pollutants or other substances known to damage health or the environment, as specified.
7. Lack of adverse impact on the sustainability of the state’s natural resources, especially state and federal lands.
8. Provision of non-state matching funds.
9. Provision of economic benefits for the state by promoting California-based technology firms, jobs, and businesses.
10. Use of existing or proposed fueling infrastructure to maximize project outcome.
11. Ability to reduce greenhouse gas (GHG) emissions by at least 10%, and higher percentages in the future, from current reformulated gasoline and diesel fuel standards established by the state Air Resources Board.
12. Use of alternative fuel blends of least 20%, and higher blend ratios in the future, with a preference for projects with higher blends.
13. Ability to drive new technology advancement for vehicles, vessels, engines, and other equipment, and promotion of deployment of that technology in the marketplace.
14. Makes the following types of projects eligible for ARFVTP funding:
15. Projects to develop and improve alternative and renewable low-carbon fuels, as specified.
16. Demonstration and deployment projects that optimize alternative and renewable fuels for existing and developing engine technologies.
17. Projects to produce alternative and renewable low-carbon fuels in California.
18. Projects to decrease the overall impact of an alternative and renewable fuel’s carbon footprint and increase sustainability.
19. Alternative and renewable fuel infrastructure, fueling stations, and equipment.
20. Projects to develop and improve light-, medium-, and heavy-duty vehicle technologies that provide for better fuel efficiency and lower GHG emissions, alternative fuel usage and storage, or emissions reductions.
21. Programs and projects that accelerate the commercialization of vehicles and alternative and renewable fuels.
22. Programs and projects to retrofit medium- and heavy-duty on-road and off-road vehicle fleets with technologies that create higher fuel efficiencies.
23. Infrastructure projects that promote alternative and renewable fuel infrastructure development connected with existing fleets, public transit, and existing transportation corridors.
24. Workforce training programs related to alternative and renewable fuel feedstock production and extraction; renewable fuel production, distribution, transport, and storage; high-performance and low-emission vehicle technology and high-tower electronics; automotive computer systems; mass transit fleet conversion, servicing, and maintenance; and other related sectors or occupations.
25. Block grants or incentive programs administered by public entities or nonprofit entities for projects, education, and program promotion within the state, and development of alternative and renewable fuel and vehicle technology centers.
26. Life-cycle and multimedia analyses, sustainability and environmental impact evaluations, and market, financial, and technology assessments performed by a state agency to determine the impacts of increasing the use of low-carbon transportation fuels and technologies and to assist in the preparation of the investment plan and program implementation.
27. A program to provide funding for homeowners who purchase a plug-in electric vehicle, to offset costs associated with modifying electrical sources to include a residential plug-in electric vehicle charging station.

This bill:

1. Adds a criterion to the list on which the CEC must base project prioritization; specifically, the project’s ability to transition workers to, or promote employment in, the alternative and renewable fuel and vehicle technology sector.
2. Recasts the criteria for workforce training programs that are eligible for funding (see #j above), to add:
3. Training programs related to the development and deployment of technologies that transform the state’s fuel and vehicle types and assist the state in implementing its climate change policies
4. Training programs to assist dislocated workers affected by the state’s GHG emissions policies, including those from fossil fuels
5. Training for low-skilled workers to enter or continue in a career pathway that leads to middle-skill, industry-recognized credentials or state-approved apprenticeship opportunities in occupations related to the purposes of this bill

Comments

1. Purpose. The author states that as policies to reduce GHG emissions in California go into effect, the job market will move toward clean energy and renewable fuels. In order to remain competitive, the state will need to transition its workforce to match the growing demand in the green job sector. Of the $100 million currently available for ARFVTP projects, only $2.5 million is spent on workforce development. This bill helps focus those funds to enhance workforce development in future clean energy development and infrastructure project proposals.
2. Economic changes call for worker retraining. According to the analysis by the Assembly Committee on Jobs, Economic Development, and the Economy, the trade, transportation, and utility sector is the largest employment sector and the second largest contributor to the state GDP. In 2014, this sector contributed $351 billion to the California economy, as well as supporting jobs in other industry sectors including manufacturing, professional services, and financial activities. While these industry sectors provide significant economic advantages, they are primary contributors to GHG emissions in California. Meeting the state’s GHG emission-reduction goals will require substantial restructuring within the economy. Transitioning to a lower carbon economy carries economic costs; this bill seeks to address this problem by expanding an existing funding source to help retrain workers who face potential unemployment when their middle-wage jobs are eliminated.
3. Recent amendments. The author amended this bill in the Senate Appropriations Committee to: clarify the bill’s provisions by combining the new criteria for project prioritization into one criterion; clarify the changes to the workforce development program component by reincorporating the specified occupations and sectors; and require the CEC to collaborate with entities that have expertise in workforce development, including the California Workforce Development Board, the Employment Training Panel, the Employment Development Department, and the Division of Apprenticeship Standards, to implement the workforce development components of ARFVTP.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

According to the Senate Appropriations Committee:

• One-time CEC costs of approximately $50,000 for outreach and information technology costs. (ARFVT Fund)
  
• Ongoing CEC costs of approximately $150,000 annually and 1 PY of staff to update program regulations, incorporate changes to the workforce development component, and administer the revised program. (ARFVT Fund)

SUPPORT: (Verified 8/11/16)

California Labor Federation

California Workforce Association

Cleantech San Diego

Environmental Defense Fund

State Building and Construction Trades Council

OPPOSITION: (Verified 8/11/16)

None received

ASSEMBLY FLOOR: 80-0, 5/31/16

AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Quirk, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Rendon

Prepared by:

8/15/16 20:10:07

**** END ****

SENATE COMMITTEE ON

Senator Ricardo Lara, Chair

2015 - 2016 Regular Session

AB 1697 (Bonilla) - Alternative and Renewable Fuel and Vehicle Technology Program

*********** ANALYSIS ADDENDUM – SUSPENSE FILE ***********

The following information is revised to reflect amendments

adopted by the committee on August 11, 2016

Bill Summary:

AB 1697 would require the California Energy Commission (CEC) to provide a preference for projects that provide career pathways and promote the employment of trained workers in the clean technology and renewable fuels industries when selecting projects for funding in the Alternative and Renewable Fuel and Vehicle Technology (ARFVT) Program.

Fiscal Impact:

• One-time CEC costs of approximately $50,000 for outreach and information technology costs. (ARFVT Fund)
  
• Ongoing CEC costs of approximately $150,000 annually and 1 PY of staff to update program regulations, incorporate changes to the workforce development component, and administer the revised program. (ARFVT Fund)

Author Amendments:

• Clarify the bill’s provisions by combining the new criteria from which the CEC must provide project preferences as follows: “The project’s ability to transition workers to, or promote employment in, the alternative and renewable fuel and vehicle technology sector.”
• Clarify the changes to the workforce development program component by re-incorporating the specified occupations and sectors into the proposed language.
• Require CEC to collaborate with entities that have expertise in workforce development, including the California Workforce Development Board, the Employment Training Panel, the Employment Development Division, and the Division of Apprenticeship Standards, to implement the workforce development components of the ARFVT Program.

-- END --

SENATE COMMITTEE ON APPROPRIATIONS

Senator Ricardo Lara, Chair

2015 - 2016 Regular Session

AB 1697 (Bonilla) - Alternative and Renewable Fuel and Vehicle Technology Program

This bill meets the criteria for referral to the Suspense File.

Bill Summary:

AB 1697 would require the California Energy Commission (CEC) to provide a preference for projects that provide career pathways and promote the employment of trained workers in the clean technology and renewable fuels industries when selecting projects for funding in the Alternative and Renewable Fuel and Vehicle Technology (ARFVT) Program.

Fiscal Impact:

• One-time CEC costs of approximately $50,000 for outreach and information technology costs. (ARFVT Fund)
  
• Ongoing CEC costs of approximately $150,000 annually and 1 PY of staff to update program regulations, incorporate changes to the workforce development component, and administer the revised program. (ARFVT Fund)

Background:

Existing law, the California Alternative and Renewable Fuel, Vehicle Technology, Clean Air, and Carbon Reduction Act of 2007 (AB 118 (Nunez), Chap. 750/2007) provides for a temporary increase in vehicle registration fees (+$3), Smog Abatement Fee (+$8), boat registration fees ($10/$20), and special identification plates (+$5) until January 1, 2024 to fund three programs: the ARFVT Program, the Air Quality Improvement Program, and the Enhanced Fleet Modernization Program.

The ARFVT Program is funded by $2 of the vehicle registration fee and receives approximately $100 million per year. The CEC administers the program to provide grants, revolving loans, loan guarantees, and other financial incentives to accelerate the development and deployment of clean, efficient, low carbon alternative fuels and technologies. As of the beginning of this year, the CEC had awarded $606 million in ARFVT Program funds in the categories of Alternative Fuel Production, Alternative Fuel Infrastructure, Alternative Fuel and Advanced Technology Vehicles, and Related Needs and Opportunities, including $27.7 million in workforce training and development funding to 83 recipient programs.

Existing law specifies the types of projects eligible for funding, including workforce training program related to alternative and renewable fuel feedstock production and extraction, renewable fuel production, distribution, transport, and storage, high-performance and low-emission vehicle technology and high tower electronics, automotive computer systems, mass transit fleet conversion, servicing, and maintenance, and other related sectors or occupations. Existing law also requires CEC to provide preferences to projects that maximize the ARFVT Program goals, based on specified criteria.

Proposed Law:

AB 1697 would add the following two criteria to the list from which CEC must provide project preferences:

• The project’s ability to provide a path for trained workers to transition to jobs in the clean technology and renewable fuels sectors.
• The project’s ability to promote employment of trained workers in the clean technology and renewable fuels sectors.

The bill would also delete the current categories of project eligibility under the workforce training program component and instead specify that funding is eligible for workforce training programs related to the development and deployment of innovative technologies that transform the state’s fuel and vehicle types and assist the state in implementing its climate change policies, including training programs linked to career pathways for experienced workers in jobs that will be phased out as the state transitions to a low-carbon economy and for low-skilled workers to enter or continue in a career pathway that leads to middle-skill, industry-recognized certifications or apprenticeship opportunities.

Staff Comments:

The CEC has historically allocated $2.5 million to $3 million out of the annual $100 million in available funding for the workforce development component of the ARFVT Program. This funding has provided training through programs and interagency agreements with the Employment Development Department (EDD), the Employment Training Panel, the California Workforce Development Board, and the California Community Colleges. Rather than proposing to increase the amount of funding CEC allocates to the workforce development component, this bill would prioritize funding for projects under the other program components that demonstrate the ability to provide career pathways and promote the employment of trained workers in the clean vehicle technology and renewable fuels industries. This is intended to enhance “on-the-job” training opportunities for workers who may be transitioning from traditional fossil fuel industry jobs into green energy sectors, rather than providing additional funding for more traditional vocational training. Since a portion of each project that is funded through this new prioritization category will go towards training, the practical impact of this change may be that there is an incremental decrease in the development or installation of hard infrastructure. For example, if a portion of a project award for the installation of vehicle charging stations is dedicated to training, fewer charging stations may be constructed.

Proposed Author Amendments:

The author has presented amendments that make the following changes to the bill:

• Clarify the bill’s provisions by combining the new criteria from which the CEC must provide project preferences as follows: “The project’s ability to transition workers to, or promote employment in, the alternative and renewable fuel and vehicle technology sector.”
• Clarify the changes to the workforce development program component by re-incorporating the specified occupations and sectors into the proposed language.
• Require CEC to collaborate with entities that have expertise in workforce development, including the California Workforce Development Board, the Employment Training Panel, the EDD, and the Division of Apprenticeship Standards, to implement the workforce development components of the ARFVT Program.

-- END --

SENATE COMMITTEE ON TRANSPORTATION AND HOUSING

Senator Jim Beall, Chair

2015 - 2016 Regular

Bill No: AB 1697 Hearing Date: 6/28/2016

SUBJECT: Alternative and Renewable Fuel and Vehicle Technology Program

DIGEST: This bill expands the criteria for funding programs through the state’s Alternative and Renewable Fuel and Vehicle Technology Program (ARFVTP) to include workforce training, as specified.

ANALYSIS:

Existing law establishes the ARFVTP, administered by the California Energy Commission (CEC). This program provides funding (about $100 million per year) for development and deployment of alternative and renewable fuels and advanced transportation technologies to help attain the state’s climate change goals. This program, along with several others, is funded through surcharges on vehicle registration fees, a portion of the vessel registration fee, 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 logging vehicles operated on public roads.

Existing law requires the CEC to prioritize projects that maximize ARFVTP goals based on the following criteria, as applicable:

1. Ability to provide a measurable transition to a diverse portfolio of viable alternative fuels that meet petroleum reduction and alternative fuel use goals.
2. Consistency with state climate change policy and low-carbon fuel standards.
3. Ability to reduce criteria air pollutants and air toxics and reduce or avoid multimedia environmental impacts.
4. Ability to decrease the discharge of water pollutants or other substances known to damage health or the environment, as specified.
5. Lack of adverse impact on the sustainability of the state’s natural resources, especially state and federal lands.
6. Provision of non-state matching funds.
7. Provision of economic benefits for the state by promoting California-based technology firms, jobs, and businesses.
8. Use of existing or proposed fueling infrastructure to maximize project outcome.
9. Ability to reduce greenhouse gas (GHG) emissions by at least 10%, and higher percentages in the future, from current reformulated gasoline and diesel fuel standards established by the state Air Resources Board.
10. Use of alternative fuel blends of least 20%, and higher blend ratios in the future, with a preference for projects with higher blends.
11. Ability to drive new technology advancement for vehicles, vessels, engines, and other equipment, and promotion of deployment of that technology in the marketplace.

Existing law makes the following types of projects eligible for ARFVTP funding:

1. Projects to develop and improve alternative and renewable low-carbon fuels, as specified.
2. Demonstration and deployment projects that optimize alternative and renewable fuels for existing and developing engine technologies.
3. Projects to produce alternative and renewable low-carbon fuels in California.
4. Projects to decrease the overall impact of an alternative and renewable fuel’s carbon footprint and increase sustainability.
5. Alternative and renewable fuel infrastructure, fueling stations, and equipment.
6. Projects to develop and improve light-, medium-, and heavy-duty vehicle technologies that provide for better fuel efficiency and lower GHG emissions, alternative fuel usage and storage, or emissions reductions.
7. Programs and projects that accelerate the commercialization of vehicles and alternative and renewable fuels.
8. Programs and projects to retrofit medium- and heavy-duty on-road and off-road vehicle fleets with technologies that create higher fuel efficiencies.
9. Infrastructure projects that promote alternative and renewable fuel infrastructure development connected with existing fleets, public transit, and existing transportation corridors.
10. Workforce training programs related to alternative and renewable fuel feedstock production and extraction; renewable fuel production, distribution, transport, and storage; high-performance and low-emission vehicle technology and high-tower electronics; automotive computer systems; mass transit fleet conversion, servicing, and maintenance; and other related sectors or occupations.
11. Block grants or incentive programs administered by public entities or nonprofit entities for projects, education, and program promotion within the state, and development of alternative and renewable fuel and vehicle technology centers.
12. Life-cycle and multimedia analyses, sustainability and environmental impact evaluations, and market, financial, and technology assessments performed by a state agency to determine the impacts of increasing the use of low-carbon transportation fuels and technologies and to assist in the preparation of the investment plan and program implementation.
13. A program to provide funding for homeowners who purchase a plug-in electric vehicle, to offset costs associated with modifying electrical sources to include a residential plug-in electric vehicle charging station.

This bill:

1. Adds two criteria to the list on which the CEC must base project prioritization:
   1. Ability to provide a path for trained workers to transition to jobs in the clean technology and renewable fuels sectors.
   2. Ability to promote employment of trained workers in the clean technology and renewable fuels sectors.
2. Recasts the criteria for workforce training programs that are eligible for funding, as follows:
3. Workforce training programs related to the development and deployment of innovative technologies that transform the state’s fuel and vehicle types and assist the state in implementing its climate change policies, including training programs linked to career pathways for experienced workers in jobs that will be phased out as the state transitions to a low-carbon economy and for low-skilled workers to enter or continue in a career pathway that leads to middle-skill, industry-recognized certifications or apprenticeship opportunities.

COMMENTS:

1. Purpose. The author states that as policies to reduce GHG emissions in California go into effect, the job market will move toward clean energy and renewable fuels. In order to remain competitive, the state will need to transition its workforce to match the growing demand in the green job sector. Of the $100 million currently available for ARFVTP projects, only $2.5 million is spent on workforce development. This bill helps focus those funds to enhance workforce development in future clean energy development and infrastructure project proposals.
2. Economic changes call for worker retraining. According to the analysis by the Assembly Committee on Jobs, Economic Development, and the Economy, the trade, transportation, and utility sector is the largest employment sector and the second largest contributor to the state GDP. In 2014, this sector contributed $351 billion to the California economy, as well as supporting jobs in other industry sectors including manufacturing, professional services, and financial activities. While these industry sectors provide significant economic advantages, they are primary contributors to GHG emissions in California. Meeting the state’s GHG emission-reduction goals will require substantial restructuring within the economy. Transitioning to a lower carbon economy carries economic costs; this bill seeks to address this problem by expanding an existing funding source to help retrain workers who face potential unemployment when their middle-wage jobs are eliminated.
3. Future amendments. The author is working with CEC and other stakeholders to fine-tune the language of this bill. Negotiations were not complete as of this writing, so the author plans to amend the bill when it reaches the Appropriations Committee to address stakeholder concerns.

Assembly Votes:

Floor: 80-0

Appr: 20-0

J,ED,&E: 9-0

Related Legislation:

AB 865 (Alejo, Chapter 583, Statutes of 2015) — requires the CEC to establish an outreach program to inform businesses owned by women, minorities, disabled veterans, and gay, lesbian, bisexual, and transgender individuals of CEC workshops and funding opportunities.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

POSITIONS: (Communicated to the committee before noon on Wednesday,

June 22, 2016.)

SUPPORT:

California Labor Federation

California Workforce Association

Cleantech San Diego

Environmental Defense Fund

State Building and Construction Trades Council

OPPOSITION:

None received

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 1697

Author:(Bonilla)

As Amended Ver:April 25, 2016

Majority vote

SUMMARY: Expands the project preference and selection criteria under the Alternative and Renewable Fuel and Vehicle Technology Program (Program) to more effectively target workforce training opportunities that are aligned with clean technology and alternative/renewable fuel career pathways.

EXISTING LAW:

1. Establishes the Program, administered through the State Energy Resources Conservation and Development Commission (Commission), for the purpose of providing a variety of funding opportunities that assist in the development and deployment of technology and alternative and renewable fuels in the marketplace.
2. Authorizes the Commission to provide preferences to those projects that maximize the Program's goals, based on specified criteria, and limits workforce related funding to alternative and renewable fuel feedstock production and extraction; renewable fuel production, distribution, transport, and storage; high-performance and low-emission vehicle technology and high tower electronics; automotive computer systems; mass transit fleet conversion, servicing, and maintenance; and other sectors or occupations related to the purposes of this chapter.

FISCAL EFFECT: According to the Assembly Appropriations Committee, implementation of the bill will result in: 1) Increased one-time costs of $500,000 for the California Energy Commission (CEC) to obtain the technical support necessary to revise criteria and implement the requirements of the bill; and 2) Initial and ongoing annual costs of $450,000 and three positions to implement the revised Program.

COMMENTS: To address the long-term goals of reducing the emissions of greenhouse gases in California, the Legislature approved and the Governor signed the California Alternative and Renewable Fuel, Vehicle Technology, Clean Air and Carbon Reduction Act of 2007 that established the Alternative and Renewable Fuel and Vehicle Technology Program. The Program is administered through the Commission, which each year awards up to $100 million in grants to support the development and deployment of innovative technologies related to alternative fuel and vehicle types. Although workforce development is among the list of eligible activities, funding for training has been limited. Of the $100 million available each year, the Commission planned to set aside $2.5 million in 2014-15 and $3 million in 2015-16 for workforce related investments.

This bill modifies the selection criteria to provide grant applications for workforce-related activities a more equal playing field among the various authorized funding purposes.

California's High-Carbon Economy: California is home to over 38 million people, providing the state with one of the most diverse populations in the world, often comprising the single largest concentration of nationals outside their native country. In 2014, this diverse group of business owners and workers produced $2.3 trillion in goods and services; $174.1 billion of which were exported to over 220 countries around the world. California's 2014 Gross Domestic Product (GDP) ranks the state economy as the eighth largest in the world.

Many policy makers and economists describe California as having not a single economy, but having a highly integrated network of a dozen or so regional economies. While biotech has a comparative advantage in some regions, information technology drives growth in others. This economic diversity is one of the reasons California was able to so aggressively move out of the recession, ranking number two in the nation by Business Insider for fastest growing economy in the nation in August 2014 and as having the fourth best overall economy in March 2015.

There are approximately 19 million people within the California labor force, generally contributing to 11 industry sectors, including government. The chart below displays California employment by industry sector, based on the 2015 annual average. The Trade, Transportation, and Utility sector is the largest employment sector and the second largest contributor to the GDP. In 2014 (most recent data available), this sector contributed $351 billion to the California economy and supported jobs in other industry sectors including Manufacturing, Professional Services, and Financial Activities. While providing significant economic advantages, these same industry sectors are primary contributors to the state's greenhouse gas emissions.

In January 2015, Governor Brown announced a commitment to set new greenhouse gas emissions reduction targets. The Governor's Integrated Plan calls for:

1. 50% of the state's electricity to come from renewable energy sources by 2030;
2. A 50% reduction in petroleum by 2030;
3. Doubling the energy efficiency savings at existing buildings by 2030;
4. A Carbon sequestration strategy that involves new management techniques for the state's working landscapes, including farms, ranch lands, forests, and wetlands;
5. A reduction in short-lived climate pollutants; and
6. Mitigation strategies to safeguard California against the impacts of climate change.

Meeting these new policy goals will require substantial restructuring within the economy, especially for manufacturing, energy production, and transport-related activities. Both workers and businesses will be impacted, requiring retraining, retooling, and repositioning. While this transition opens new opportunities for some, it also places new burdens on those that have not necessarily recovered from the impact of the Financial Crisis and subsequent recession.

California's current economy appears to be diverging in two disparate directions. On the one hand, state unemployment is at a seven-year low (5.3%) and certain businesses and regions are experiencing strong economic growth. On the other hand, there are areas of the state and certain population groups who remain economically distressed with high unemployment rates among blacks (10.4%), Hispanics (7.1%), young workers (19.6%), and inland California [Imperial County at (18.9%) and Colusa at (16.2%)].

Transitioning to a lower carbon economy has economic costs, which the state has been slow to acknowledge and address. The state has tools to help make this transition less of a hardship for impacted workers, businesses, and communities. This bill proposes the expanded use of an existing funding source to help retrain workers who face potential unemployment when their middle-wage jobs are eliminated.

Career Pathways in the Clean Tech Industries: An initial analysis by the Air Resources Board on the employment impact of AB 32 (Núñez), Chapter 488, Statutes of 2006, showed that the utility industry would be the most significantly impacted. Employment losses could be nearly as high as 15%. A related policy brief by University of California, Berkley's Center for Labor Research and Education found that implementation of AB 32 would likely present significant workforce challenges and that a successful transition to green technologies would require a well-trained technical and blue-collar labor force. In the absence of careful and farsighted implementation strategies, the policy brief stated that California could lose businesses to other regions and ultimately result in trading well-paying jobs for new jobs of lesser quality.

According to the 2015-16 Investment Plan for the Program, the Commission has three active interagency agreements on workforce, including $7.25 million with EDD, $9.5 million with the Employment Training Panel, and $5.5 million with the California Community Colleges Chancellor's Office. For the same time period, the Commission was setting aside an additional $3 million.

Here is an example of the type of work being undertaken through these interagency agreements: The Employment Training Panel and Blue Sky received a $59,280 Program grant to train 19 employees to update their manufacturing skills, including yard workers, operations/maintenance staff, refiners, and drivers in the processing and distribution of biodiesel products.

Analysis Prepared by: Toni Symonds / J., E.D., & E. / (916) 319-2090 FN: 0003184

ASSEMBLY THIRD READING

ATR Bill Id:AB 1697

Author:(Bonilla)

As Amended Ver:April 25, 2016

Majority vote

SUMMARY: Expands the project preference and selection criteria under the Alternative and Renewable Fuel and Vehicle Technology Program (Program) to more effectively target workforce training opportunities that are aligned with clean technology and alternative/renewable fuel career pathways.

EXISTING LAW:

1. Establishes the Program, administered through the State Energy Resources Conservation and Development Commission (Commission), for the purpose of providing a variety of funding opportunities that assist in the development and deployment of technology and alternative and renewable fuels in the marketplace.
2. Authorizes the Commission to provide preferences to those projects that maximize the Program's goals, based on specified criteria, and limits workforce related funding to alternative and renewable fuel feedstock production and extraction; renewable fuel production, distribution, transport, and storage; high-performance and low-emission vehicle technology and high tower electronics; automotive computer systems; mass transit fleet conversion, servicing, and maintenance; and other sectors or occupations related to the purposes of this chapter.

FISCAL EFFECT: According to the Assembly Appropriations Committee, implementation of the bill will result in: 1) Increased one-time costs of $500,000 for the California Energy Commission (CEC) to obtain the technical support necessary to revise criteria and implement the requirements of the bill; and 2) Initial and ongoing annual costs of $450,000 and three positions to implement the revised Program.

COMMENTS: To address the long-term goals of reducing the emissions of greenhouse gases in California, the Legislature approved and the Governor signed the California Alternative and Renewable Fuel, Vehicle Technology, Clean Air and Carbon Reduction Act of 2007 that established the Alternative and Renewable Fuel and Vehicle Technology Program. The Program is administered through the Commission, which each year awards up to $100 million in grants to support the development and deployment of innovative technologies related to alternative fuel and vehicle types. Although workforce development is among the list of eligible activities, funding for training has been limited. Of the $100 million available each year, the Commission planned to set aside $2.5 million in 2014-15 and $3 million in 2015-16 for workforce related investments.

This bill modifies the selection criteria to provide grant applications for workforce-related activities a more equal playing field among the various authorized funding purposes.

California's High-Carbon Economy: California is home to over 38 million people, providing the state with one of the most diverse populations in the world, often comprising the single largest concentration of nationals outside their native country. In 2014, this diverse group of business owners and workers produced $2.3 trillion in goods and services; $174.1 billion of which were exported to over 220 countries around the world. California's 2014 Gross Domestic Product (GDP) ranks the state economy as the eighth largest in the world.

Many policy makers and economists describe California as having not a single economy, but having a highly integrated network of a dozen or so regional economies. While biotech has a comparative advantage in some regions, information technology drives growth in others. This economic diversity is one of the reasons California was able to so aggressively move out of the recession, ranking number two in the nation by Business Insider for fastest growing economy in the nation in August 2014 and as having the fourth best overall economy in March 2015.

There are approximately 19 million people within the California labor force, generally contributing to 11 industry sectors, including government. The chart below displays California employment by industry sector, based on the 2015 annual average. The Trade, Transportation, and Utility sector is the largest employment sector and the second largest contributor to the GDP. In 2014 (most recent data available), this sector contributed $351 billion to the California economy and supported jobs in other industry sectors including Manufacturing, Professional Services, and Financial Activities. While providing significant economic advantages, these same industry sectors are primary contributors to the state's greenhouse gas emissions.

In January 2015, Governor Brown announced a commitment to set new greenhouse gas emissions reduction targets. The Governor's Integrated Plan calls for:

1. 50% of the state's electricity to come from renewable energy sources by 2030;
2. A 50% reduction in petroleum by 2030;
3. Doubling the energy efficiency savings at existing buildings by 2030;
4. A Carbon sequestration strategy that involves new management techniques for the state's working landscapes, including farms, ranch lands, forests, and wetlands;
5. A reduction in short-lived climate pollutants; and
6. Mitigation strategies to safeguard California against the impacts of climate change.

Meeting these new policy goals will require substantial restructuring within the economy, especially for manufacturing, energy production, and transport-related activities. Both workers and businesses will be impacted, requiring retraining, retooling, and repositioning. While this transition opens new opportunities for some, it also places new burdens on those that have not necessarily recovered from the impact of the Financial Crisis and subsequent recession.

California's current economy appears to be diverging in two disparate directions. On the one hand, state unemployment is at a seven-year low (5.3%) and certain businesses and regions are experiencing strong economic growth. On the other hand, there are areas of the state and certain population groups who remain economically distressed with high unemployment rates among blacks (10.4%), Hispanics (7.1%), young workers (19.6%), and inland California [Imperial County at (18.9%) and Colusa at (16.2%)].

Transitioning to a lower carbon economy has economic costs, which the state has been slow to acknowledge and address. The state has tools to help make this transition less of a hardship for impacted workers, businesses, and communities. This bill proposes the expanded use of an existing funding source to help retrain workers who face potential unemployment when their middle-wage jobs are eliminated.

Career Pathways in the Clean Tech Industries: An initial analysis by the Air Resources Board on the employment impact of AB 32 (Núñez), Chapter 488, Statutes of 2006, showed that the utility industry would be the most significantly impacted. Employment losses could be nearly as high as 15%. A related policy brief by University of California, Berkley's Center for Labor Research and Education found that implementation of AB 32 would likely present significant workforce challenges and that a successful transition to green technologies would require a well-trained technical and blue-collar labor force. In the absence of careful and farsighted implementation strategies, the policy brief stated that California could lose businesses to other regions and ultimately result in trading well-paying jobs for new jobs of lesser quality.

According to the 2015-16 Investment Plan for the Program, the Commission has three active interagency agreements on workforce, including $7.25 million with EDD, $9.5 million with the Employment Training Panel, and $5.5 million with the California Community Colleges Chancellor's Office. For the same time period, the Commission was setting aside an additional $3 million.

Here is an example of the type of work being undertaken through these interagency agreements: The Employment Training Panel and Blue Sky received a $59,280 Program grant to train 19 employees to update their manufacturing skills, including yard workers, operations/maintenance staff, refiners, and drivers in the processing and distribution of biodiesel products.

Analysis Prepared by: Toni Symonds / J., E.D., & E. / (916) 319-2090 FN: 0003184

Date of Hearing: May 11, 2016

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez, Chair

ABPCA Bill Id:AB 1697

Author:(Bonilla) – As Amended Ver:April 25, 2016

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

SUMMARY:

This bill expands the criteria for selecting projects funded by the Alternative and Renewable Fuel and Vehicle Technology Program (Program) to prioritize the ability of the project to provide career pathways and promote the employment of trained workers in the clean vehicle technology and renewable fuels industries.

FISCAL EFFECT:

1. Increased one-time costs of $500,000 for the California Energy Commission (CEC) to obtain the technical support necessary to revise criteria and implement the requirements of the bill. (Alternative Renewable Rule and Vehicle Technology Fund).
2. Initial and ongoing annual costs of $450,000 and 3 positions to implement the revised Program. (Alternative Renewable Rule and Vehicle Technology Fund).

COMMENTS:

1. Purpose. According to the author, as policies to reduce GHG emissions and petroleum use go into effect, the job market landscape will inevitably change, resulting in a greater emphasis on green jobs. In order to remain competitive, California will have to transition its workforce to match the growing demand. By incentivizing applicants to include a workforce development element in order to be more competitive, this bill will ensure the California workforce is able to transition smoothly to future policies aimed at reducing GHG emissions.
2. Background. In 2007, AB 118 established three new programs intended to promote vehicle and fuel technology that reduces air pollution and GHG emissions statewide. These programs are the Air Quality Improvement Program (AQIP), the Enhanced Fleet Modernization Program (EFMP), and the Alternative Renewable Fuel and Vehicle Technology Program (Program).

The Program is administered by the CEC, which each year awards up to $100 million in grants to support the development and deployment of innovative technologies related to alternative fuel and vehicle technologies. Although workforce development is among the list of eligible activities, funding for training has been limited. Of the $100 million available each year, the CEC set aside $2.5 million in 2014-15 and $3 million in 2015-16 for workforce related investments.

1. Implementation Concerns. The CEC does not have the specialized expertise needed to ensure effective workforce training and employment programs are contained in each award. Most agreements fund the development, demonstration and deployment of alternative fuels, alternative fuel vehicles, and infrastructure. These funding recipients have expertise in installing electric vehicle charging infrastructure, constructing hydrogen refueling stations, constructing/operating biofuel production facilities, and demonstrating/deploying alternative fuel vehicles.

Workforce training is currently an eligible Program expenditure. To date, the Program has provided workforce training funds to the Employment Training Panel, California Community Colleges, California Workforce Investment Board, and Employment Development Department.

This bill goes beyond eligibility and instead adds workforce training to the criteria for which the CEC is required to prioritize all individual projects and funding categories. The author may wish to consider identifying another state agency to assist CEC in implementing the additional workforce training criteria across all funding categories.

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

Date of Hearing: April 19, 2016

ASSEMBLY COMMITTEE ON JOBS, ECONOMIC DEVELOPMENT, AND THE ECONOMY

Eduardo Garcia, Chair

ABPCA Bill Id:AB 1697 (

Author:Bonilla) – As Amended Ver:March 16, 2016

SUBJECT: Alternative and Renewable Fuel and Vehicle Technology Program

SUMMARY: Expands the criteria for selecting programs funded through the Alternative and Renewable Fuel and Vehicle Technology Program (Program) to include the ability of the project to provide career pathways to clean technology and renewable fuels industry sectors. Specifically, this bill:

1. Expresses the following legislative intent:
   1. The California Global Warming Solutions Act of 2006 requires California to reduce its greenhouse gas emissions to 1990 levels by 2020;
   2. In January 2015, Governor Brown issued a statewide goal of reducing petroleum use 50% by 2030 in order to reduce greenhouse gas emissions;
   3. To address the long-term goals of reducing greenhouse gas emissions in California, the legislature established the Alternative and Renewable Fuel and Vehicle Technology Program (ARFVTP). The ARFVTP Program provides up to $100 million in grants each year to help California establish and expand alternative and renewable fuel production and infrastructure;
   4. As policies that reduce greenhouse gas emissions and petroleum use go into effect, the job market landscape will inevitably change, resulting in a greater emphasis on green jobs; and
   5. To ensure that the skills and technical training in existing industries are integrated into the new green economy, it is incumbent on the state of California to foster earn and learn pathways and additional training opportunities to transition workers from the carbon-based economy to jobs focused on alternative and renewable fuels to match growing demand.
2. Expands the criteria used to set Program preferences to include the project’s ability to:
   1. Provide a path for trained workers to transition to jobs in the clean technology and renewable fuels sectors; and
   2. Promote employment of trained workers in the clean technology and renewable fuels sectors.

EXISTING LAW:

1. Enacts the California Global Warming Solutions Act, which requires the California Air Resources Board to determine the 1990 statewide green house gas (GHG) emissions level and approve a statewide GHG emissions limit that is equivalent to that level, to be achieved by 2020, and to adopt GHG emission reduction measures by regulation, and sets certain requirements in adopting the regulations.
2. Establishes the Green Collar Jobs Council (GCJC) within the California Workforce Development Board (CWD), for the purpose of consulting with other state agencies, among others, on developing the funding, strategies, programs, policies, partnerships, and opportunities necessary to address the growing need for a highly skilled and well-trained workforce to meet the needs of California’s emerging green economy. To the extent private funds are available, it is the intent of the Legislature that the GCJC develop an annual award for outstanding achievement for workforce training programs. The GCJC is comprised of the appropriate representatives from the CWIB existing membership.
3. Establishes the Program, administered through the State Energy Resources Conservation and Development Commission (Commission), for the purpose of providing a variety of financial products that assist in the development and deployment of technology and alternative and renewable fuels in the marketplace.
4. Specifies eligible Program applicants to include, but not be limited to, public agencies, vehicle and technology entities, businesses and projects, public private partnerships, workforce training partnerships, fleet owners, consumers, recreational boaters, and academic institutions.
5. Authorizes the Commission to provide preferences to those projects that maximize the Program's goals, based on the following selection criteria:
   1. The project’s ability to provide a measurable transition from the nearly exclusive use of petroleum fuels to a diverse portfolio of viable alternative fuels that meet petroleum reduction and alternative fuel use goals;
   2. The project’s consistency with existing and future state climate change policy and low-carbon fuel standards;
   3. The project’s ability to reduce criteria air pollutants and air toxics and reduce or avoid multiple environmental impacts;
   4. The project’s ability to decrease, on a life-cycle basis, the discharge of water pollutants or any other substances known to damage human health or the environment, in comparison to the production and use of California Phase 2 Reformulated Gasoline or diesel fuel produced and sold pursuant to California diesel fuel regulations, as specified;
   5. The project does not adversely impact the sustainability of the state’s natural resources, especially state and federal lands;
   6. The project provides nonstate matching funds. Costs incurred from the date a proposed award is noticed may be counted as nonstate matching funds. The commission may adopt further requirements for the purposes of this paragraph. The commission is not liable for costs incurred pursuant to this paragraph if the commission does not give final approval for the project or the proposed recipient does not meet requirements adopted by the commission pursuant to this paragraph;
   7. The project provides economic benefits for California by promoting California-based technology firms, jobs, and businesses;
   8. The project uses existing or proposed fueling infrastructure to maximize the outcome of the project;
   9. The project’s ability to reduce on a life-cycle assessment greenhouse gas emissions by at least 10%, and higher percentages in the future, from current reformulated gasoline and diesel fuel standards established by the state board;
   10. The project’s use of alternative fuel blends of at least 20%, and higher blend ratios in the future, with a preference for projects with higher blends; and
   11. The project drives new technology advancement for vehicles, vessels, engines, and other equipment, and promotes the deployment of that technology in the marketplace.
6. Requires the Commission to rank projects for funding based on the criteria described in number 5 above. An additional preference is required to be given to projects with higher cost-benefit scores, as specified.
7. Limits project funding to the following:
   1. Alternative and renewable fuel projects that develop and improve alternative and renewable low-carbon fuels, including electricity, ethanol, dimethyl ether, renewable diesel, natural gas, hydrogen, and biomethane, among others, and their feedstocks that have high potential for long-term or short-term commercialization, including projects that lead to sustainable feedstocks;
   2. Demonstration and deployment projects that optimize alternative and renewable fuels for existing and developing engine technologies;
   3. Projects to produce alternative and renewable low-carbon fuels in California;
   4. Projects to decrease the overall impact of an alternative and renewable fuel’s life cycle carbon footprint and increase sustainability;
   5. Alternative and renewable fuel infrastructure, fueling stations, and equipment;
   6. Projects to develop and improve light-, medium-, and heavy-duty vehicle technologies that provide for better fuel efficiency and lower greenhouse gas emissions, alternative fuel usage and storage, or emissions reductions;
   7. Programs and projects that accelerate the commercialization of vehicles and alternative and renewable fuels, as specified;
   8. Programs and projects to retrofit medium- and heavy-duty onroad and nonroad vehicle fleets with technologies that create higher fuel efficiencies, as specified;
   9. Infrastructure projects that promote alternative and renewable fuel infrastructure development connected with existing fleets, public transit, and existing transportation corridors, as specified;
   10. Workforce training programs related to alternative and renewable fuel feedstock production and extraction; renewable fuel production, distribution, transport, and storage; high-performance and low-emission vehicle technology and high tower electronics; automotive computer systems; mass transit fleet conversion, servicing, and maintenance; and other sectors or occupations related to the purposes of this chapter;
   11. Block grants or incentive programs administered by public entities or not-for-profit technology entities for multiple projects, education and program promotion within California, and the development of alternative and renewable fuel and vehicle technology centers;
   12. Life cycle and multimedia analyses, sustainability and environmental impact evaluations, and market, financial, and technology assessments performed by a state agency to determine the impacts of increasing the use of low-carbon transportation fuels and technologies, and to assist in the preparation of the investment plan and program implementation; and
   13. A program to provide funding for homeowners who purchase a plug-in electric vehicle to offset costs associated with modifying electrical sources to include a residential plug-in electric vehicle charging station.

FISCAL EFFECT: Unknown

POLICY ISSUE FRAME

To address the long-term goals of reducing the emissions of greenhouse gases in California, the Legislature approved and the Governor signed the California Alternative and Renewable Fuel, Vehicle Technology, Clean Air and Carbon Reduction Act of 2007 that established the Alternative and Renewable Fuel and Vehicle Technology Program. The Program is administered through the Commission, which each year awards up to $100 million in grants to support the development and deployment of innovative technologies related to alternative fuel and vehicle types. Although workforce development is among the list of eligible activities, funding for training has been limited. Of the $100 million available each year, the Commission planned to set aside $2.5 million in 2014-15 and $3 million in 2015-16 for workforce related investments.

This bill modifies the selection criteria to make workforce-related activities more competitive. The analysis includes background on California's high-carbon economy, economic opportunity in the clean tech industry sectors, and the lack of a plan to assist workers to access those opportunities. Amendments are discussed in Comment #9, which enhance the scope of workforce eligible activities under the Program.

COMMENTS:

1. Author's Statement: According to the author's statement, "On January 5th, 2015, Governor Brown issued a statewide goal of reducing petroleum use 50% by 2030 in order to reduce greenhouse gas (GHG) emissions. This goal will be achieved by reducing petroleum consumption while simultaneously increasing production and use of renewable and alternative fuels. This means California will require a trained and knowledgeable workforce in the emerging clean energy sector.

To address the long-term goals of reducing GHG emissions in California, the legislature established the Alternative and Renewable Fuel and Vehicle Technology Program (ARFVTP). In total, the program provides up to $100 million in grants each year to help California establish and expand alternative and renewable fuel production and infrastructure.

As policies that reduce GHG emissions and petroleum use go into effect, the job market landscape will inevitably change, resulting in a greater emphasis on green jobs. In order to remain competitive, California will have to transition its workforce to match the growing demand.

AB 1697 incentivizes applicants for ARFVTP funding to include a workforce development element in order to be more competitive in the grant process. This bill will ensure that the California workforce transitions smoothly to implement future policy priorities aimed at reducing GHG emissions."

1. California's High-Carbon Economy: California is home to over 38 million people, providing the state with one of the most diverse populations in the world, often comprising the single largest concentration of nationals outside their native country. In 2014, this diverse group of business owners and workers produced $2.3 trillion in goods and services; $174.1 billion of which were exported to over 220 countries around the world. California's 2014 GDP ranks the state economy as the eighth largest in the world.

Many policy makers and economists describe California as having not a single economy, but having a highly integrated network of a dozen or so regional economies. While biotech has a comparative advantage in some regions, information technology drives growth in others. This econmic diversity is one of the reasons California was able to so aggressively move out of the recession, ranking number two in the nation by Business Insider for fastest growing economy in the nation in August 2014 and as having the fourth best overall economy in March 2015.

There are approximately 19 million people within the California workforce, generally contributing to 11 industry sectors, including government. The chart below displays California employment by industry sector, based on the 2015 annual average.

The Trade, Transportation, and Utility sector is the largest employment sector and the second largest contributor to GDP. In 2014 (most recent data available), this sector contributed $351 billion to the California economy and supported jobs in other industry sectors including Manufacturing, Professional Services, and Financial Activities. While providing significant economic advantages, these same industry sectors are primary contributors to the state's greenhouse gas emissions.

In January 2015, Governor Brown announced a commitment to set new greenhouse gas emissions reduction targets. The Governor's Integrated Plan calls for:

• 50% of the state's electricity to come from renewable energy sources by 2030;
• A 50% reduction in petroleum by 2030;
• Doubling the energy efficiency savings at existing buildings by 2030;
• A Carbon sequestration strategy that involves new management techniques for the state’s working landscapes, including farms, ranch lands, forests, and wetlands;
• A reduction in short-lived climate pollutants; and
• Mitigation strategies to safeguard California against the impacts of climate change.

Meeting these new policy goals will require substantial restructuring within the economy, especially for manufacturing, energy production, and transport-related activities. Both workers and businesses will be impacted, requiring retraining, retooling, and repositioning. While this transition opens new opportunities for some, it also places new burdens on those that have not necessarily recovered from the impact of the Financial Crisis and subsequent recession.

California's current economy appears to be diverging in two disparate directions. On the one hand, state unemployment is at a seven-year low (5.5%) and certain businesses and regions are experiencing strong economic growth. On the other hand, there are areas of the state and certain population groups who remain economically distressed with high unemployment rates among blacks (10.8%), Hispanics (7.4%), young workers (20.5%), and inland California (Colusa at 21.1% and Imperial County at (18.9%).

Transitioning to a lower carbon economy has economic costs, which the state has been slow to acknowledge and address. The state clearly has tools to help make this transition less of a hardship for impacted workers, businesses, and communities. AB 1697 proposes the expanded use of an existing funding source to help retrain workers who face potential unemployment when their middle-wage jobs are eliminated.

1. Opportunities in the Lower Carbon Economy: California’s clean energy and technology economy encompasses a broad range of products and services, touching upon multiple industry sectors. This includes clean technologies such as alternative energy generation, wastewater treatment, and the production of environmentally-friendly consumer products. Although some of these industries are very different, they all use innovative technologies, products, and services that have environmental benefits.

Growth in the cleantech industry largely comes from the convergence of two disparate factors. One, recent advances in new technologies, research methods, manufacturing, and communications that lower the cost of environmentally sensitive technologies; and two, an increasing number of consumers and businesses that are looking for ways to reduce energy costs, increase clean water supply, and meet new environmental regulatory requirements at the local, state, and global levels. Governments, in turn, have adopted new regulatory frameworks that require greater use of recyclable materials, increased the use of renewable energy, and lowered air pollution and GHG emissions.

The chart below, developed by Cleantech San Diego, illustrates the wide range of industries engaged in the cleantech industry cluster.

A December 2014 survey of 2,000 companies by the Advanced Energy Economy Institute found that state energy policies have created over 430,000 jobs in 2014, which was an increase of 5% over the prior year. The survey also noted the significant comparative advantage California has over other areas, as demonstrated by the state having the most domestic installed solar capacity, solar jobs, total advanced energy investment, and electric vehicle sales. Another important finding was that 77% of the responding firms only had customers in California and only 3% had customers outside the U.S. Given California's geographic location and already demonstrated capability to successfully engage within global supply chains, export opportunities could be substantial for California's advanced energy industries.

1. Career Pathways in the Clean Tech Industries: An initial analysis by the Air Resources Board on the employment impact of AB 32 showed that the utility industry would be the most significantly impacted. Employment loses could be nearly as high as 15%. A related policy brief by UC Berkley's Center for Labor Research and Education found that implementation of AB 32 would likely present significant workforce challenges and that a successful transition to green technologies would require a well-trained technical and blue-collar labor force. In the absence of careful and farsighted implementation strategies, the policy brief stated that California could lose businesses to other regions and ultimately result in trading well-paying jobs for new jobs of lesser quality.

Concurrent with the initial implementation of AB 32, the Green Jobs Council (Council) was established at the California Workforce Development Board. The Council proposed the use of sector strategies for meeting the demands of the various green industries (see chart above) and began work on providing a state-level framework to support and leverage regional sector initiatives. In addition, the Council also worked to identify and reduce impediments and strengthen state-level sector partnerships. While it appears that the Council is currently dormant, some of its work has continued through a range of small scale and uncoordinated workforce agreements.

According to the (draft) 2015-16 Investment Plan for the Program, the Commission has three active interagency agreements on workforce, including $7.25 million with EDD, $9.5 million with the Employment Training Panel, and $5.5 million with the California Community Colleges Chancellor's Office. For the same time period, the Commission was setting aside an additional $3 million.

Here is an example of the type of work being undertaken through these interagency agreements: The Employment Training Panel and Blue Sky received a $59,280 Program grant to train 19 employees to update their manufacturing skills, including yard workers, operations/maintenance staff, refiners, and drivers in the processing and distribution of biodiesel products.

1. Suggested Amendments: Committee staff understand that the author will be requesting that the Committee adopt amendments that expand the existing workforce training criteria to authorize funding for training related to the development and deployment of innovative technologies that transform California's fuel and vehicle types and assist the state in implementing its climate change policies, including training programs that are linked to career pathways for experienced workers in jobs that will be phased-out as the state transitions to a low-carbon economy and for low-skill workers to enter or continue in a career pathway that leads to middle-skill, industry recognized certificates or apprenticeship opportunities.
2. Related Legislation: Below is a list of the related bills.
   1. AB 865 (Alejo) California Energy Commission Grants and Loans Diversity: This bill requires the California Energy Commission (CEC) to develop and implement an outreach program to inform certified businesses owned by women, minorities, disabled veterans, and gay, lesbian, bisexual, and transgender individuals of CEC workshops and funding opportunities, as specified. Status: Signed by the Governor, Chapter 583, Statutes of 2015.
   2. AB 1420 (V. Manuel Pérez) Inventory of Innovation Infrastructure: This bill requests the California Council on Science and Technology (CCST) and the California Spaceport Authority (CSA) to seek funding to expand their assessment of the state's innovation infrastructure capacity including university research facilities, private research parks, manufacturers and incubators. Further, the bill authorizes the CCST and the CSA to collaborate with public and private colleges and universities, corporations with research capacity, economic development organizations, investment and finance professionals, and the California Community Colleges. Status: The bill was held in the Senate Committee on Rules, June 2010.
   3. ACR 77 (Swanson) California Global Warming Solutions Act of 2006: This resolution calls on the California Air Resources Board to meet the statutory requirements of the California Global Warming Solutions Act of 2006 for the preparation of the best available economic analysis of the emission reduction measures proposed in the AB 32 Scoping Plan and related rulemaking, particularly by enumerating the projected employment impacts by industry sector, identification of the types of jobs that will be created and lost to the state, and the expected wage levels for these new jobs. Status: This resolution was chaptered by the Secretary of State, Res. Chapter 109, Statutes of 2009.
   4. SB 32 (Pavley) Greenhouse Gas Emission Reductions: This bill requires the Air Resources Board to approve a statewide greenhouse gas reduction target equivalent to 40% below the 1990 level by 2030 and 80% below by 2050. Status: Pending in the Assembly Committee on Natural Resources.
   5. SB 189 (Hueso) Clean Energy Jobs Committee: This bill would have established the Clean Energy and Low-Carbon Economic and Jobs Growth Blue Ribbon Committee (Clean Energy Jobs Committee) for the purpose of making recommendations to state agencies on how to use climate mitigation funds to create a more inclusive economy, including business development and job creation activities. Status: Held on Suspense in the Assembly Committee on Appropriations, 2015.

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Analysis Prepared by: Toni Symonds / J., E.D., & E. / (916) 319-2090