Existing law establishes various programs for the reduction of vehicular air pollution, including the Lower-Emission School Bus Program adopted by the State Air Resources Board. The Highway Safety, Traffic Reduction, Air Quality, and Port Security Bond Act of 2006, approved by the voters as Proposition 1B at the November 7, 2006, general election, authorizes the issuance of $19.925 billion of general obligation bonds for specified purposes, including $200 million for schoolbus retrofit and replacement purposes. Existing law requires the state board to allocate those bond moneys for the schoolbus retrofit and replacement program to air pollution control and air quality management districts by prioritizing the retrofit or replacement of the most polluting schoolbuses in small air districts first and then medium air districts, as specified. Existing law requires each allocation to provide sufficient funding for at least one project to be implemented as part of the Lower-Emission School Bus Program.

This bill instead would require the state board to prioritize the retrofit or replacement of the most polluting and oldest schoolbuses that operate in air districts that are designated federal extreme nonattainment, followed by small air districts, and then medium air districts, as specified. The bill would authorize moneys from the Greenhouse Gas Reduction Fund to be used to implement the Lower-Emission School Bus Program.

Existing law establishes various programs for the reduction of vehicular air pollution, including the Lower-Emission School Bus Program adopted by the State Air Resources Board. The Highway Safety, Traffic Reduction, Air Quality, and Port Security Bond Act of 2006, approved by the voters as Proposition 1B at the November 7, 2006, general election, authorizes the issuance of $19.925 billion of general obligation bonds for specified purposes, including $200 million for schoolbus retrofit and replacement purposes. Existing law requires the state board to allocate those bond moneys for the schoolbus retrofit and replacement program to air pollution control and air quality management districts by prioritizing the retrofit or replacement of the most polluting schoolbuses in small air districts first and then medium air districts, as specified. Existing law requires each allocation to provide sufficient funding for at least one project to be implemented as part of the Lower-Emission School Bus Program.

This bill instead would require the state board to prioritize the retrofit or replacement of the most polluting and oldest schoolbuses that operate in air districts that are designated federal extreme nonattainment, followed by small air districts, and then medium air districts, as specified. The bill would authorize moneys from the Greenhouse Gas Reduction Fund to be used to implement the Lower-Emission School Bus Program.

Existing law establishes various programs for the reduction of vehicular air pollution, including the Lower-Emission School Bus Program adopted by the State Air Resources Board. The Highway Safety, Traffic Reduction, Air Quality, and Port Security Bond Act of 2006, approved by the voters as Proposition 1B at the November 7, 2006, general election, authorizes the issuance of $19.925 billion of general obligation bonds for specified purposes, including $200 million for schoolbus retrofit and replacement purposes. Existing law requires the state board to allocate those bond moneys for the schoolbus retrofit and replacement program to air pollution control and air quality management districts by prioritizing the retrofit or replacement of the most polluting schoolbuses in small air districts first and then medium air districts, as specified. Existing law requires each allocation to provide sufficient funding for at least one project to be implemented as part of the Lower-Emission School Bus Program.

This bill instead would require the state board to prioritize the retrofit or replacement of the most polluting and oldest schoolbuses that operate in air districts that are designated federal extreme nonattainment, followed by small air districts, and then medium air districts, as specified.

Existing law establishes the Carl Moyer Memorial Air Quality Standards Attainment Program, which is administered by the State Air Resources Board. The program authorizes the state board to provide grants to offset the incremental cost of eligible projects that reduce emissions from covered vehicular sources. The program also authorizes funding for a fueling infrastructure demonstration program and for technology development efforts that are expected to result in commercially available technologies in the near-term that would improve the ability of the program to achieve its goals.

This bill would make technical, nonsubstantive changes to these provisions.

SENATE COMMITTEE ON ENVIRONMENTAL QUALITY

Senator Wieckowski, Chair

2017 - 2018 Regular

Bill No: AB 2336

SUBJECT: Schoolbuses: retrofit and replacement

ANALYSIS:

Existing federal law:

1. Sets, through the Federal Clean Air Act (FCAA) and its implementing regulations, National Ambient Air Quality Standards (NAAQS) for six criteria pollutants, designates air basins that do not achieve NAAQS as nonattainment, allows only California to set vehicular emissions standards stricter than the federal government, and allows other states to adopt either the federal or California vehicular emissions standards. (42 U.S.C. §7401 et seq.)
   

Existing state law:

1. Establishes the Air Resources Board (ARB) as the air pollution control agency in California and requires the ARB, among other things, to control emissions from a wide array of mobile sources and implement the FCAA. (Health and Safety Code (HSC) §39500 et seq.)
   
2. Under Prop 1B—the Highway Safety, Traffic Reduction, Air Quality, and Port Security Bond Act of 2006—authorizes $200 million for the replacing and retrofitting of schoolbuses, specifically through ARB’s Lower-Emission School Bus Program (LESBP), to reduce air pollution and reduce children’s exposure to diesel exhaust. (Government Code (GOV) §8879.20 et seq.)
   
3. Requires ARB to allocate the Prop 1B bond funds to local air districts and requires ARB to prioritize the retrofit or replacement of the most polluting school buses in small air districts first and then medium air districts. (HSC § 44299.91)
   
4. Establishes local air districts to, among other things, control emissions from stationary sources. (HSC §40000 et seq.)
   

This bill:

1. Requires, beginning January 1, 2019, ARB to prioritize Prop 1B funds (which have been fully exhausted) for the retrofit or replacement of the most polluting school buses and oldest school buses that operate in districts that are designated federal extreme nonattainment, followed by small districts first, and then medium districts.
   

Background

1. Regulatory jurisdiction. State law assigns the ARB with primary responsibility for control of mobile-source air pollution, including adoption of rules for reducing vehicle emissions and the specification of vehicular fuel composition. Stationary sources of air pollution, such as factories and refineries, are under the jurisdiction of local air districts (e.g., South Coast Air Quality Management District, San Joaquin Valley Air Pollution Control District). ARB and the local air districts share jurisdiction over emissions of toxics from stationary sources.
   
2. Air quality standards. The Federal Clean Air Act (FCAA) passed in 1963 and has been revised many times thereafter. The FCAA and its implementing regulations are intended to protect public health and environmental quality by limiting and reducing pollution from various sources. Under the FCAA, the United States Environmental Protection Agency (US EPA) establishes National Ambient Air Quality Standards (NAAQS) that apply to outdoor air throughout the country.
   
   In 1969 and 1971, ARB set the first air quality standards for ozone, Particulate Matter (PM), oxides of nitrogen (NOx), oxides of sulfur (SOx), and carbon monoxide due to their negative impacts on public health above specified concentrations.
   
   The federal government followed suit and set NAAQS for six “criteria pollutants.” These included ground-level ozone, PM, NOx, SOx, carbon monoxide, and added lead. Now, the US EPA reviews each NAAQS at five-year intervals to ensure that the standards are based on the most recent scientific information.
   
   Regions that do not meet the national standards for any one of the standards are designated “nonattainment areas.” The FCAA sets deadlines for attainment based on the severity of nonattainment and requires states to develop comprehensive plans, known as the state implementation plan (SIP), to attain and maintain air-quality standards for each area designated nonattainment for an NAAQS.
   
3. ARB’s LESBP. The primary goal of ARB’s LESBP is to reduce school children’s exposure to both cancer-causing and smog-forming pollution by replacing and retrofitting high-polluting school buses. The LESBP provides financial incentives to replace high-emitting pre-1987 model year school buses with lower-emitting new buses, and to equip in-use diesel school buses with ARB-verified diesel retrofit devices to reduce toxic particulate matter (PM) emissions. The primary focus has been on replacing buses manufactured prior to 1977. Eligible applicants for school bus replacements include public school districts and Joint Powers Authorities (JPA). For school bus retrofit projects, applicant eligibility has been extended to include private transportation contractors that provide transportation for public schools.
   
   From the program’s inception in 2000 until 2007, the Legislature appropriated over $100 million to the LESBP for the replacement of about 600 pre-1987 model year public school buses with new, lower-emitting models and equipped about 3,800 in-use buses with ARB-verified diesel retrofit devices.
   
   The LESBP is generally administered through the local air district, however, for projects funded under the LESBP by bond funds, the San Joaquin Valley Air Pollution Control District (SJVAPCD) has partnered with ARB in acting as the implementing agency for air districts. As mentioned, projects in small and medium air districts receive funding priority over projects in large air districts. The following are lists of small, medium, and large air districts:
   
   1. Small districts. Amador County Air Pollution Control District (APCD), Antelope Valley (Air Quality Management District (AQMD), Butte County APCD, Calaveras County APCD, Colusa County APCD, El Dorado County APCD, Feather River AQMD, Great Basin Unified APCD, Glenn County APCD, Imperial County APCD, Lake County AQMD, Lassen County APCD, Mariposa County APCD, Mendocino County APCD, Modoc County APCD, North Coast Unified APCD, Northern Sierra Unified AQMD, Northern Sonoma County APCD, Shasta County AQMD, Tehama County APCD, Tuolumne County APCD, Siskiyou County APCD.
      
   2. Medium districts. Monterey Bay Unified APCD, Placer County APCD, Mojave Desert AQMD, Santa Barbara County APCD, Ventura County APCD, Yolo-Solano APCD, Eastern Kern County APCD, San Luis Obispo County APCD.
      
   3. Large districts. Bay Area AQMD, Sacramento Metro AQMD, San Joaquin Valley APCD, San Diego County AQMD and South Coast AQMD
      
4. Prop 1B and school busses. In 2006, voters passed Prop 1B which authorized $200 million for the replacing and retrofitting of school buses, specifically through the LESBP to reduce air pollution and reduce children's exposure to diesel exhaust. Prop 1B guidelines, pursuant to a budget trailer bill, SB 88 (Budget and Fiscal Review, Chapter 181, Statutes of 2007), required ARB to first set aside funds to replace the remaining 1976 and older model year school buses. Remaining funds were to be allocated to air districts based on each district’s share of the 1977 through 1986 model year school bus population. After ensuring funding for replacing all pre-1977 model year buses, SB 88 provided flexibility by allowing air districts the discretion to determine how to split their remaining allocation between replacing and retrofitting buses.
   
5. Budget actions. In 2012, the Legislature passed a budget trailer bill, SB 1018 (Budget and Fiscal Review, Chapter 39, Statutes of 2012), that required bond funds to be transferred if a local air district’s funds were not committed by an executed contract and required the local air district and ARB to, by September 30, 2012, establish a list of potential air districts that can be the recipient of the transferred funds, with priority given to air districts with the most polluting school buses and with the greatest need for school bus funding. SB 1018 also required each fund allocation to provide sufficient funding for at least one project, required funds to be expended by June 30, 2014, and required all funds not expended by that date to be returned to ARB.
   
   In 2013, recognizing that Prop 1B funds were dwindling, the Legislature passed another budget trailer bill, SB 96 (Budget and Fiscal Review, Chapter 356, Statutes of 2013), that changed the prioritization of the remaining funding to first fund the retrofit or replacement of the most polluting school buses in small and then medium air districts. The budget bill also required each allocation to provide sufficient funding for at least one project and required the transfer of unspent funds to districts with existing demand. Overall, Prop 1B monies funded approximately 1,018 school bus replacements and 3,479 retrofits.
   
   ARB has received all installments of Prop 1B bond funds for the LESBP, which brings the program to 100% of its projected funding.
   
   LESBP has also benefitted from other proposition funds (Proposition 40 of 2002).
   

Comments

1. Purpose of Bill. According to the author, “the Central Valley and the Los Angeles basin suffer from some of the worst air quality in the country. Despite much improvement and strong policy from both the state and federal level, there is still work to be done. More than 90 percent of Californians live in counties with unhealthy air. According to the American Lung Association State of the Air 2017 report, the top three regions in the country with the worst smog levels were Los Angeles-Long Beach, Bakersfield, and Fresno-Madera. With the upcoming deadlines to lower greenhouse gas emissions statewide, this program will help prioritize funding for emission reduction goals where emissions are higher and the air pollution is the worst.”
   
2. Conclusion. As noted in the background, Prop 1B funds for the replacement and retrofit of school busses have been exhausted. AB 2336 amends the section in law that dictates how Prop 1B funds—an empty pot of money—was supposed to be spent regarding school bus replacement and retrofit.
   
   That being said, there is also language that has been added to AB 2336 that requires the changes made to the empty pot of Prop 1B funding that would require those changes to apply for “purposes of this chapter.” This could mean that the prioritization of the retrofit or replacement of the most polluting school buses and oldest school buses that operate in districts that are designated federal extreme nonattainment, followed by small districts first, and then medium districts, would apply to all sources of funding. As noted by the opposition, this places the public health of students and the communities they live in below other considerations that have less of an impact on air quality and public health.
   
   Because there is no longer any funding left in Prop 1B, it is unclear what, if anything, could be accomplished by the passage of this bill. Additionally, the prioritization in AB 2336 could changes the focus of the school bus program from public health and air quality to other considerations. Therefore, the Committee should hold this bill.
   

Related/Prior Legislation

SB 96 (Budget and Fiscal Review, Chapter 356, Statutes of 2013), requires, among other things, funds authorized by ARB during or subsequent to the 2013–14 fiscal year to be allocated to retrofit or replace the most polluting school buses in small air districts first and then medium air districts.

SB 1018 (Budget and Fiscal Review, Chapter 39, Statutes of 2012), required ARB to transfer Prop 1B bond funds, as specified, for purposes of retrofitting and replacing school buses.

SB 88 (Budget and Fiscal Review, Chapter 181, Statutes of 2007), imposed various requirements on various state agencies on how Proposition 1B funds would be administered and spent, including funds to be used for the replacement and retrofit of school buses.

DOUBLE REFERRAL:

If this measure is approved by the Senate Environmental Quality Committee, the do pass motion must include the action to re-refer the bill to the Senate Transportation and Housing Committee.

SOURCE:

Author

SUPPORT:

None received

OPPOSITION:

Bay Area Air Quality Management District

Sacramento Metropolitan Air Quality Management District

ARGUMENTS IN OPPOSITION:

According to the Bay Area Air Quality Management District:

The BAAQMD has long supported cutting emissions from school busses, using both state and local funding. The primary pollutant of concern from school busses is diesel particulate matter, a toxic air contaminant with significant localized health impacts to both the children on the bus as well as the communities the buses drive through daily. Reducing exposure to this air toxic is a primary goal of both the Air Resources Board and local air districts.

AB 2336 would direct funding for school bus cleanup not to areas with the highest exposure to diesel particulate matter. Nor would it direct funding to the school buses with the greatest public health impacts. (The emissions from the bus, influenced by age and its annual mileage, the density of the communities it drives through, and the number of children on the bus are all important in determining the health impacts of a given school bus.) Instead, it would direct school bus cleanup funding to areas designated as extreme nonattainment for the regional pollutants ozone and particles (PM_2.5). While the South Coast and San Joaquin air districts have legitimate ozone and PM_2.5 air quality problems, school bus emissions do not cause those problems. Using extreme nonattainment status as allocation criteria for diesel cleanup funding, which originates statewide, makes no sense. We have an obligation to the public to spend air quality money as cost-effectively as possible, and this bill is counter to that goal.

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 2336

Author:(Salas)

As Amended Ver:

Majority vote

SUMMARY: Changes the prioritization of Proposition (Prop) 1B funding, for purposes of the Lower- Emission School Bus Program (LESBP), by requiring the Air Resources Board (ARB), to first fund the retrofit or replacement of high-polluting and oldest schoolbuses that operate in federal extreme non-attainment areas.

FISCAL EFFECT: According to the Assembly Appropriations Committee:

1. Cost pressure in the tens of millions to hundreds of millions of dollars if the program is funded on a onetime basis, or millions of dollars annually if the program is established as an ongoing program for grants to school districts to replace or retrofit high-polluting school buses.
2. Costs to ARB to administer the program, likely in the low hundreds of thousands of dollars annually for a couple of staff positions, for the duration of the program.

COMMENTS: The primary goal of ARB's LESBP is to reduce school children's exposure to both cancer-causing and smog-forming pollution by replacing and retrofitting high-polluting school buses. The LESBP provides financial incentives to replace high-emitting pre-1987 model year school buses with lower-emitting new buses, and to equip in-use diesel school buses with ARB-verified diesel retrofit devices to reduce toxic particulate matter (PM) emissions. The primary focus has been on replacing buses manufactured prior to 1977. Eligible applicants for school bus replacements include public school districts and Joint Powers Authorities (JPA). For school bus retrofit projects, applicant eligibility has been extended to include private transportation contractors that provide transportation for public schools.

From the program's inception in 2000 until 2007, the Legislature appropriated over $100 million to the LESBP for the replacement of about 600 pre-1987 model year public school buses with new, lower-emitting models and equipped about 3,800 in-use buses with ARB-verified diesel retrofit devices.

In 2006, voters passed Proposition (Prop) 1B which authorized $200 million for the replacing and retrofitting of school buses, specifically through the LESBP to reduce air pollution and reduce children's exposure to diesel exhaust. Prop 1B guidelines, pursuant to a budget trailer bill, SB 88 (Budget and Fiscal Review), Chapter 181, Statutes of 2007, required ARB to first set aside funds to replace the remaining 1976 and older model year school buses. Remaining funds were to be allocated to air districts based on each district's share of the 1977 through 1986 model year school bus population. After ensuring funding for replacing all pre-1977 model year buses, SB 88 provided flexibility by allowing air districts the discretion to determine how to split their remaining allocation between replacing and retrofitting buses.

In 2012, the Legislature passed a budget trailer bill, SB 1018 (Budget and Fiscal Review), Chapter 39, Statutes of 2012, that required bond funds to be transferred if a local air district's funds were not committed by an executed contract and required the local air district and ARB to, by September 30, 2012, establish a list of potential air districts that can be the recipient of the transferred funds, with priority given to air districts with the most polluting school buses and with the greatest need for school bus funding. SB 1018 also required each fund allocation to provide sufficient funding for at least one project, required funds to be expended by June 30, 2014, and required all funds not expended by that date to be returned to ARB.

In 2013, recognizing that Prop 1B funds were dwindling, the Legislature passed another budget trailer bill, SB 96 (Budget and Fiscal Review), Chapter 356, Statutes of 2013, that changed the prioritization of the remaining funding to first fund the retrofit or replacement of the most polluting schoolbuses in small and then medium air districts. The budget bill also required each allocation to provide sufficient funding for at least one project and required the transfer of unspent funds to districts with existing demand. Overall, Prop 1B monies funded approximately 1,018 school bus replacements and 3,479 retrofits. ARB has received all installments of Prop 1B bond funds for the LESBP, which brings the program to 100% of its projected funding. LESBP has also benefitted from other proposition funds (Proposition 40 of 2002).

The LESBP is generally administered through the local air district, however, for projects funded under the LESBP by bond funds, the San Joaquin Valley Air Pollution Control District (SJVAPCD) has partnered with ARB in acting as the implementing agency for air districts. As mentioned, projects in small and medium air districts receive funding priority over projects in large air districts. The following are lists of small, medium, and large air districts:

Air districts may also use state incentive dollars and use local funds to replace or retrofit school buses. Additionally, air districts that are designated as non-attainment areas can adopt a surcharge on vehicle registration, subject to certain requirements, to be used to reduce air pollution from motor vehicles, including school buses. The South Coast AQMD and SJVAPCD (both of which are considered large districts) do not meet the health based National Ambient Air Quality Standards for ozone and PM and are currently designated to be extreme non-attainment areas.

The LESBP is currently administered by the SJVAPCD on behalf of ARB with federal and penalty monies at a statewide level. Additionally, SJVAPCD, along with other air districts, administer district specific retrofit and replacement programs. In 2017, SJVAPCD sought applications for the statewide program to only fund school bus retrofits. The goal was to assist school districts with the compliance of ARB's Truck and Bus Regulation, which requires, among other vehicles, privately and publicly owned school buses with a gross vehicle weight rating greater than 14,000 lbs to either replace their older engines or trucks with newer ones, or install PM filters.

The author has introduced this bill to prioritize funding from the LESBP to retrofit and replace the oldest school buses in air basins with designated as extreme non-attainment from ozone pollution. The author asserts, "With the upcoming deadlines to lower greenhouse gas emissions statewide, it makes sense to prioritize funding for incentive programs, such as the LESBP where the emission reduction goals are higher and the air pollution is the worst."

Committee Concerns:

1. As mentioned above, Prop 1B funds for this purpose have been exhausted. Because this bill amends the section in law that dictates how Prop 1B monies will be spent for schoolbus replacement and retrofit and there is currently no other Prop 1B monies allocated for this purpose, this bill effectively accomplishes nothing, unless the Legislature appropriates funds pursuant to the requirements of this bill. Essentially, this bill changes the prioritization of monies that have already been spent.
2. While this bill rightly targets air districts designated as extreme non-attainment with the worst air quality in the state, it effectively picks winners and losers. Many small and medium air districts represent areas that are in rural parts of the state. Typically, children in rural parts of the state live farther away from school and thus, spend more time exposed to smog-forming pollution emitted by their schoolbus. Recognizing the need to fund purchases and retrofits of schoolbuses in rural areas, ARB created the Rural School Bus Pilot Program. However, in turn, air districts designated as non-attainment such as South Coast AQMD and SJVAPCD which are considered large districts, unlike smaller and medium air districts, have the ability to access revenue from vehicle registration surcharge monies to fund purchases and retrofits of schoolbuses in their air districts.

Please see the policy committee analysis for full discussion of this bill.

Analysis Prepared by: Cynthia Alvarez / TRANS. / (916) 319-2093 FN: 0003383

Date of Hearing: May 2, 2018

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez Fletcher, Chair

ABPCA Bill Id:AB 2336

Author:(Salas) – As Amended Ver:April 25, 2018

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

SUMMARY:

This bill restarts and modifies the Lower Emission School Bus Program (LESBP) administered by the Air Resources Board (ARB), which was created by Proposition 1B of 2006. Specifically, this bill reprioritizes funding for school districts to fund the retrofit or replacement of high-polluting school buses to make school districts in federal extreme non-attainment areas the highest priority. This bill identifies the Greenhouse Gas Reduction Fund (GGRF) as the funding source for this program, upon appropriation.

FISCAL EFFECT:

1. GGRF cost pressure in the tens of millions to hundreds of millions of dollars if the program is funded on a onetime basis, or millions of dollars annually if the program is established as an ongoing program for grants to school districts to replace or retrofit high-polluting school buses.
2. GGRF costs to ARB to administer the program, likely in the low hundreds of thousands of dollars annually for a couple of staff positions, for the duration of the program.

COMMENTS:

1. Background. Proposition 1B (2006) authorized the state to sell $20 billion in general obligation bonds to fund transportation projects and transportation-related air quality improvement projects. Proposition 1B provided $200 million to ARB for the LESBP to replace and retrofit high-polluting school buses. Prior to the passage of Proposition 1B, roughly $100 million in funding was provided to the LESBP, in total, from 2000 to 2007. ARB has fully expended all of the funding provided for the LESBP.
2. Purpose. This bill seeks to restart the LESBP, upon appropriation of funding from the GGRF. In addition, this bill changes the prioritization of funds to prioritize school districts in federal extreme non-attainment areas.
3. Related legislation. AB 1798 (Chu), of the current legislative session, requires all school buses in use in California to have seatbelts by July 1, 2035. AB 1798 is currently on this committee’s suspense file.

Analysis Prepared by: Jessica Peters / APPR. / (916) 319-2081

Date of Hearing: April 16, 2018

ASSEMBLY COMMITTEE ON TRANSPORTATION

Jim Frazier, Chair

ABPCA Bill Id:AB 2336 (

Author:Salas) – As Amended Ver:April 10, 2018

SUBJECT: Schoolbuses: retrofit and replacement

SUMMARY: Changes the prioritization of Proposition (Prop) 1B funding, for purposes of the Lower- Emission School Bus Program (LESBP), by requiring the Air Resources Board (ARB), to first fund the retrofit or replacement of high-polluting and oldest schoolbuses that operate in federal extreme non-attainment areas.

EXISTING LAW:

1. Under Prop 1B, enacts the Highway Safety, Traffic Reduction, Air Quality, and Port Security Bond Act of 2006. This bond act authorizes $200 million for the replacing and retrofitting of schoolbuses, specifically through ARB’s LESBP, to reduce air pollution and reduce children's exposure to diesel exhaust.
2. Requires ARB to allocate the aforementioned bond funds to air pollution control and air quality management districts (air districts) and requires the ARB to prioritize the retrofit or replacement of the most polluting school buses in small air districts first and then medium air districts.
3. Authorizes local air district boards where federal air standards are not consistently met (i.e., “nonattainment areas”) to adopt a surcharge on vehicle registration, subject to certain requirements, to be used to reduce air pollution from motor vehicles, and requires a portion of that surcharge be used for the implementation of emission reduction programs from vehicular sources or off-road engines, including for projects eligible under the Carl Moyer Program (which provides funding for cleaner-than-required engines and equipment), the purchase of new schoolbuses, or retrofit of emissions control equipment for existing schoolbuses, the replacement of specified natural gas fuel tanks on schoolbuses, and the enhancement of deteriorating natural gas fueling dispensers of fueling infrastructure operated by a school district, and other specified projects, until January 1, 2024.

FISCAL EFFECT: Unknown

COMMENTS: The primary goal of ARB’s LESBP is to reduce school children’s exposure to both cancer-causing and smog-forming pollution by replacing and retrofitting high-polluting school buses. The LESBP provides financial incentives to replace high-emitting pre-1987 model year school buses with lower-emitting new buses, and to equip in-use diesel school buses with ARB-verified diesel retrofit devices to reduce toxic particulate matter (PM) emissions. The primary focus has been on replacing buses manufactured prior to 1977. Eligible applicants for school bus replacements include public school districts and Joint Powers Authorities (JPA). For school bus retrofit projects, applicant eligibility has been extended to include private transportation contractors that provide transportation for public schools.

From the program's inception in 2000 until 2007, the Legislature appropriated over $100 million to the LESBP for the replacement of about 600 pre-1987 model year public school buses with new, lower-emitting models and equipped about 3,800 in-use buses with ARB-verified diesel retrofit devices.

In 2006, voters passed Prop 1B which authorized $200 million for the replacing and retrofitting of school buses, specifically through the LESBP to reduce air pollution and reduce children's exposure to diesel exhaust. Prop 1B guidelines, pursuant to a budget trailer bill, SB 88 (Budget and Fiscal Review), Chapter 181, Statutes of 2007, required ARB to first set aside funds to replace the remaining 1976 and older model year school buses. Remaining funds were to be allocated to air districts based on each district’s share of the 1977 through 1986 model year school bus population. After ensuring funding for replacing all pre-1977 model year buses, SB 88 provided flexibility by allowing air districts the discretion to determine how to split their remaining allocation between replacing and retrofitting buses.

In 2012, the Legislature passed a budget trailer bill, SB 1018 (Budget and Fiscal Review), Chapter 39, Statutes of 2012, that required bond funds to be transferred if a local air district’s funds were not committed by an executed contract and required the local air district and ARB to, by September 30, 2012, establish a list of potential air districts that can be the recipient of the transferred funds, with priority given to air districts with the most polluting school buses and with the greatest need for school bus funding. SB 1018 also required each fund allocation to provide sufficient funding for at least one project, required funds to be expended by June 30, 2014, and required all funds not expended by that date to be returned to ARB.

In 2013, recognizing that Prop 1B funds were dwindling, the Legislature passed another budget trailer bill, SB 96 (Budget and Fiscal Review), Chapter 356, Statutes of 2013, that changed the prioritization of the remaining funding to first fund the retrofit or replacement of the most polluting schoolbuses in small and then medium air districts. The budget bill also required each allocation to provide sufficient funding for at least one project and required the transfer of unspent funds to districts with existing demand. Overall, Prop 1B monies funded approximately 1,018 school bus replacements and 3,479 retrofits. ARB has received all installments of Prop 1B bond funds for the LESBP, which brings the program to 100% of its projected funding. LESBP has also benefitted from other proposition funds (Proposition 40 of 2002).

The LESBP is generally administered through the local air district, however, for projects funded under the LESBP by bond funds, the San Joaquin Valley Air Pollution Control District (SJVAPCD) has partnered with ARB in acting as the implementing agency for air districts. As mentioned, projects in small and medium air districts receive funding priority over projects in large air districts. The following are lists of small, medium, and large air districts:

Air districts may also use state incentive dollars and use local funds to replace or retrofit school buses. Additionally, air districts that are designated as non-attainment areas can adopt a surcharge on vehicle registration, subject to certain requirements, to be used to reduce air pollution from motor vehicles, including school buses. The South Coast AQMD and SJVAPCD (both of which are considered large districts) do not meet the health based National Ambient Air Quality Standards for ozone and PM and are currently designated to be extreme non-attainment areas.

The LESBP is currently administered by the SJVAPCD on behalf of ARB with federal and penalty monies at a statewide level. Additionally, SJVAPCD, along with other air districts, administer district specific retrofit and replacement programs. In 2017, SJVAPCD sought applications for the statewide program to only fund school bus retrofits. The goal was to assist school districts with the compliance of ARB’s Truck and Bus Regulation, which requires, among other vehicles, privately and publicly owned school buses with a gross vehicle weight rating greater than 14,000 lbs to either replace their older engines or trucks with newer ones, or install PM filters.

The author has introduced this bill to prioritize funding from the LESBP to retrofit and replace the oldest school buses in air basins with designated as extreme non-attainment from ozone pollution. The author asserts, “With the upcoming deadlines to lower greenhouse gas emissions statewide, it makes sense to prioritize funding for incentive programs, such as the LESBP where the emission reduction goals are higher and the air pollution is the worst.”

Committee Concerns:

1. As mentioned above, Prop 1B funds for this purpose have been exhausted. Because this bill amends the section in law that dictates how Prop 1B monies will be spent for schoolbus replacement and retrofit and there is currently no other Prop 1B monies allocated for this purpose, this bill effectively accomplishes nothing. Essentially, this bill changes the prioritization of monies that have already been spent.
2. While this bill rightly targets air districts designated as extreme non-attainment with the worst air quality in the state, it effectively picks winners and losers. Many small and medium air districts represent areas that are in rural parts of the state. Typically, children in rural parts of the state live farther away from school and thus, spend more time exposed to smog-forming pollution emitted by their schoolbus. Recognizing the need to fund purchases and retrofits of schoolbuses in rural areas, ARB created the Rural School Bus Pilot Program. However, in turn, air districts designated as non-attainment such as South Coast AQMD and SJVAPCD which are considered large districts, unlike smaller and medium air districts, have the ability to access revenue from vehicle registration surcharge monies to fund purchases and retrofits of schoolbuses in their air districts.

Previous Legislation: SB 96 (Budget and Fiscal Review), Chapter 356, Statutes of 2013, requires, among other things, funds authorized by ARB during or subsequent to the 2013–14 fiscal year to be allocated to retrofit or replace the most polluting schoolbuses in small air districts first and then medium air districts.

SB 1018 (Budget and Fiscal Review), Chapter 39, Statutes of 2012, required ARB to transfer Prop 1B bond funds, as specified, for purposes of retrofitting and replacing schoolbuses.

SB 88 (Budget and Fiscal Review), Chapter 181, Statutes of 2007, imposed various requirements on various state agencies on how Proposition 1B funds would be administered and spent, including funds to be used for the replacement and retrofit of schoolbuses.

REGISTERED SUPPORT / OPPOSITION:

Support

None on file

Opposition

None on file

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