The California Global Warming Solutions Act of 2006 designates the State Air Resources Board as the state agency charged with monitoring and regulating sources of emissions of greenhouse gases.

The California Clean Truck, Bus, and Off-Road Vehicle and Equipment Technology Program funds zero- and near-zero-emission truck, bus, and off-road vehicle and equipment technologies and related projects, including, but not limited to, technology development, demonstration, precommercial pilots, and early commercial deployments of zero- and near-zero-emission medium- and heavy-duty truck technology.

This bill would require the state board, no later than January 1, 2021, and at least every 5 years thereafter, in consultation with the Department of Transportation, the State Energy Resources Conservation and Development Commission, and the Governors Office of Business and Economic Development and in collaboration with relevant stakeholders, to update the state boards 2016 mobile source strategy to include a comprehensive strategy for the deployment of medium-duty and heavy-duty vehicles in the state for the purpose of bringing the state into compliance with federal ambient air quality standards and reducing motor vehicle greenhouse gas emissions from the medium-duty and heavy-duty vehicle sector. The bill would require the state board to recommend reasonable and achievable goals, based on specified factors, for reducing emissions from medium-duty and heavy-duty vehicles by 2030 and 2050, respectively, as part of the comprehensive strategy. The bill also would require the state board to include other specified information in the updates to the 2016 mobile source strategy. The bill would authorize the state board to establish a process to identify medium-duty and heavy-duty vehicle segments that can more quickly reduce motor vehicle emissions, consistent with the California Clean Truck, Bus, and Off-Road Vehicle and Equipment Technology Program, with a beachhead market analysis.

Existing law establishes various offenses for violations of traffic laws.

This bill would state the intent of the Legislature to enact legislation relating to penalties for traffic violations.

 UNFINISHED BUSINESS  

Bill No: SB 44

Author: Skinner (D), et al.

Amended: 8/12/19

Vote: 21

SENATE ENVIRONMENTAL QUALITY COMMITTEE: 5-2, 4/10/19

AYES: Allen, Hill, Skinner, Stern, Wieckowski

NOES: Bates, Stone

SENATE TRANSPORTATION COMMITTEE: 9-3, 4/23/19

AYES: Beall, Dodd, Galgiani, McGuire, Roth, Rubio, Skinner, Umberg, Wieckowski

NOES: Bates, Morrell, Stone

SENATE APPROPRIATIONS COMMITTEE: 4-2, 5/16/19

AYES: Portantino, Bradford, Hill, Wieckowski

NOES: Bates, Jones

SENATE FLOOR: 30-7, 5/20/19

AYES: Allen, Archuleta, Atkins, Beall, Bradford, Caballero, Chang, Dodd, Durazo, Galgiani, Glazer, Hertzberg, Hill, Hueso, Hurtado, Jackson, Leyva, McGuire, Mitchell, Monning, Pan, Portantino, Roth, Rubio, Skinner, Stern, Umberg, Wieckowski, Wiener, Wilk

NOES: Bates, Borgeas, Grove, Jones, Morrell, Nielsen, Stone

NO VOTE RECORDED: Moorlach

ASSEMBLY FLOOR: 63-12, 9/9/19 - See last page for vote

SUBJECT: Medium-duty and heavy-duty vehicles: comprehensive strategy

SOURCE: Author

DIGEST:

This bill requires the Air Resources Board (ARB) update the 2016 mobile source strategy to include a comprehensive strategy for the deployment of medium duty and heavy-duty vehicles in the state for the purpose of bringing the state into compliance with federal ambient air quality standards and reducing motor vehicle greenhouse gas (GHG) emissions from the medium duty and heavy-duty vehicle sector, as specified.

Assembly Amendments

clarify that regulations should support commercialization and deployment of medium and heavy-duty vehicles that reduce emissions of GHGs, and require ARB to submit the updated mobile source strategy to committees of the Legislature.

ANALYSIS: Existing federal law 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 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. Requires, under the California Global Warming Solutions Act of 2006 (also known as AB 32), ARB to (a) determine the 1990 statewide GHG emissions level and approve a statewide GHG emissions limit that is equivalent to that level to be achieved by 2020; (b) ensure that statewide GHG emissions are reduced to at least 40% below the 1990 level by December 31, 2030 (i.e., SB 32); and (c) adopt regulations, until December 31, 2030, that utilize market-based compliance mechanisms to reduce GHG emissions (i.e., the cap-and-trade program). (HSC §38500 et seq.)
3. Establishes the Greenhouse Gas Reduction Fund (GGRF) in the State Treasury, requires all moneys, except for fines and penalties, collected pursuant to a market-based mechanism be deposited in the fund. (Government Code §16428.8)

This bill:

1. Makes findings and declarations.
2. Requires, no later than January 1, 2021, and at least every five years thereafter, ARB, in consultation with specified entities, to update the ARB’s 2016 mobile source strategy to include a comprehensive strategy for the deployment of medium duty and heavy-duty vehicles in the state for the purpose of bringing the state into compliance with NAAQS and reducing motor vehicle GHG emissions from the medium duty and heavy-duty vehicle sector.
3. Requires ARB to recommend reasonable and achievable goals for reducing emissions from medium duty and heavy-duty vehicles by 2030 and 2050, respectively, as part of the comprehensive strategy, as specified, and in order to align with the goals of the California Sustainable Freight Action Plan.
4. Requires the updates to the mobile source strategy to include both of the following:
   1. An identification of policies that provide advantages to fleets that reduce GHG emissions earlier than required by law.
   2. The coordination of plans for the attainment of NAAQS with relevant GHG emissions reduction goals.
5. Requires ARB, in developing the comprehensive strategy, to do all of the following:
   1. Seek to maximize the reduction of criteria air pollutants.
   2. Identify regulations that could improve market acceptance, spur technology advancements, and reduce technology costs.
   3. Identify research needs to address any data gaps.
   4. Identify areas where the state should coordinate with other state agencies, districts, utilities providers, and technology providers to implement measures identified as part of the comprehensive strategy.
   5. Identify benefits to low-income communities and communities disproportionally impacted by diesel pollution.
   6. Identify policies that provide advantages to fleets that reduce GHG emissions early.
6. Allows ARB, through a public process, to establish a process to identify medium duty and heavy-duty vehicle segments that can more quickly reduce motor vehicle emissions, as specified.
7. Specifies that, upon appropriation by the Legislature, moneys, including, but not limited to, moneys from GGRF, are available to ARB for programs established pursuant to the California Clean Truck, Bus, and Off-Road Vehicle and Equipment Technology Program, as specified.

Background

1. Air quality standards. The 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 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, and 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 NAAQS.

1. Mobile Source Strategy. Mobile sources—cars, trucks, and a myriad of off-road equipment—and the fossil fuels that power them are the largest contributors to the formation of ozone, PM2.5, diesel PM, and GHG emissions in California. They are responsible for approximately 80 percent of smog-forming NOx emissions, 90 percent of diesel PM emissions, and nearly 50 percent of GHG emissions. Given this contribution, significant cuts in pollution from these sources are needed in order for the state to achieve our air quality and climate change goals.

On May 16, 2016, ARB released an updated Mobile Source Strategy that demonstrates how California can simultaneously meet air quality standards, achieve GHG emission reduction targets, decrease health risk from transportation emissions, and reduce petroleum consumption over the next fifteen years. The Mobile Source Strategy was included in the SIP. According to ARB:

“For passenger vehicles, the strategy calls for increasing the penetration of plug-in hybrid electric vehicles (PHEV) and non-combustion zero-emission vehicles (ZEV) including battery-electric (BEV) and hydrogen fuel cell electric vehicles (FCEV) by over 50 percent compared to current programs. The electrical grid and hydrogen supply supporting these electric vehicles will need to represent 50 percent renewable energy generation. A large portion of the liquid fuels for combustion engine vehicles will also need to be sourced from renewable feedstock.

“For heavy-duty vehicles, California is laying the groundwork for reducing emissions from the heavy-duty truck sector on multiple fronts: cleaner internal combustion engines, renewable fuels, and zero-emission technology. The strategy calls for internal combustion engine technology that is effectively 90 percent cleaner than today’s current standards, with clean, renewable fuels comprising half the fuels burned. Cleaner engine standards will be especially important for interstate trucks given the status of technology development and infrastructure requirements. These efforts will be complemented by introduction of zero-emission technologies in heavy-duty applications that are suited to early adoption of ZEV technologies. Applications such as last mile delivery, transit and shuttle buses, and other small vocational trucks offer the potential for increasing use of ZEV technologies. Actions to promote ZEVs in these heavy-duty applications are underway and are important to further reduce regional and near-source toxics exposure as well as foster the development of these technologies so they become suitable for broader use in the future. Off-road equipment will need to reflect this same type of transformation to a mix of zero and near-zero technologies operating on renewable fuels.”

Comments

Purpose of Bill. According to the author, “Decades after California passed the Clean Air Act, diesel trucks continue to spew toxic air pollution into California’s communities. Fossil diesel-fueled trucks are responsible for 33 percent of statewide oxides of nitrogen (NOx) emissions annually, 20 percent of statewide GHG emissions, and emit more particulate matter than all of the state’s power plants combined.

“Since 1998, the California Air Resources Board (CARB) has recognized particulate matter as a toxic air contaminant based on the relationship between diesel exhaust and lung cancer. California’s air is particularly plagued with these pollutants – the state has 7 of the 10 geographic areas with the worst particulate matter pollution, according to the American Lung Association. Children are at particular risk, because they breathe faster than adults and therefore suffer from increased exposure to toxic air pollutants.

“For these reasons, it is imperative that California work to dramatically cut reliance on fossil diesel fuel. That will require planning for how the medium- and heavy-duty vehicle sectors can transition away from this fuel over time, and providing stable market incentives to help the industry shift away from dirty technology with minimal economic burden.”

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

According to Assembly Appropriations Committee:

1. ARB estimates annual costs of approximately $400,000 for 2 PY (staff) and $250,000 in contract funds to develop and adopt a comprehensive strategy for the deployment of medium duty and heavy-duty vehicles. (Air Pollution Control Fund – APCF).
2. Potentially significant cost pressures, to the extent the update to the mobile source strategy results in prioritizing expenditures on the deployment of medium duty and heavy-duty vehicles through the Carl Moyer Program, Air Quality Improvement Program, Advanced Vehicle Fuel and Technology Program, California Clean Truck, Bus, and Technology Program (various funds).
3. Unknown, likely minor to moderate costs for DOT, CEC and Go-Biz to consult with ARB on the development of the strategy.

SUPPORT: (Verified 9/9/19)

350 Bay Area

350 Silicon Valley

American Lung Association in California

Bay Area Air Quality Management District

Biodico

Bioenergy Association of California

Breast Cancer Prevention Partners

California Business Properties Association

California Chamber of Commerce

California League of Conservation Voters

California Manufacturers and Technology Association

California Natural Gas Vehicle Coalition

California Trucking Association

CALSTART

Center for Climate Change and Health

Central Valley Air Quality Coalition

Ceres

Clean Energy

Coalition for Clean Air

Coalition for Renewable Natural Gas

CR&R Environmental Services

Environment California

Fossil Free California

Friends Committee on Legislation of California

Move LA

NextGen California

Oberon Fuels

Pacific Ethanol

Regional Asthma Management and Prevention

Sierra Club California

Southern California Edison

Union of Concerned Scientists

Western Propane Gas Association

OPPOSITION: (Verified 9/9/19)

None received

ASSEMBLY FLOOR: 63-12, 9/9/19

AYES: Aguiar-Curry, Arambula, Bauer-Kahan, Berman, Bloom, Boerner Horvath, Bonta, Burke, Calderon, Carrillo, Cervantes, Chau, Chiu, Chu, Cooley, Cooper, Cunningham, Daly, Diep, Eggman, Flora, Frazier, Friedman, Gabriel, Cristina Garcia, Eduardo Garcia, Gipson, Gloria, Gonzalez, Grayson, Holden, Irwin, Jones-Sawyer, Kalra, Kamlager-Dove, Levine, Limón, Low, Maienschein, McCarty, Medina, Mullin, Muratsuchi, Nazarian, O'Donnell, Petrie-Norris, Quirk, Quirk-Silva, Ramos, Reyes, Luz Rivas, Robert Rivas, Rodriguez, Blanca Rubio, Salas, Santiago, Smith, Mark Stone, Ting, Weber, Wicks, Wood, Rendon

NOES: Bigelow, Brough, Fong, Gallagher, Kiley, Lackey, Mathis, Melendez, Obernolte, Patterson, Voepel, Waldron

NO VOTE RECORDED: Chen, Choi, Gray, Mayes

Prepared by: Eric Walters / E.Q. / (916) 651-4108

9/9/19 22:52:00

**** END ****

SENATE THIRD READING

STR Bill Id:SB 44

Author:(Skinner)

As Amended Ver:August 12, 2019

Majority vote

SUMMARY:

Requires the Air Resources Board (ARB) to update its 2016 mobile source strategy to include a comprehensive strategy for the deployment of medium- and heavy-duty vehicles in the state.

Major Provisions

1. Requires ARB, no later than January 1, 2021, and at least every five years thereafter, to update its 2016 mobile source strategy to include a comprehensive strategy for the deployment of medium- and heavy-duty vehicles in the state for the purpose of bringing the state into compliance with National Ambient Air Quality Standards (NAAQS) and reducing motor vehicle greenhouse gas (GHG) emissions from the medium- and heavy-duty vehicle sector.
2. Requires ARB to recommend reasonable and achievable goals for reducing emissions from medium- and heavy-duty vehicles by 2030 and 2050, respectively, as part of the comprehensive strategy, based on, but not limited to, the following factors:
3. The state's overarching emissions reduction goal;
4. The California Sustainable Freight Action Plan's goals;
5. Technological feasibility; and
6. Cost-effectiveness.
7. Requires ARB to include in its update to the mobile source strategy both of the following:
   1. An identification of policies that provide advantages to fleets that reduce GHG emissions earlier than required by law; and
   2. The coordination of plans for the attainment of NAAQS with relevant GHG emissions reduction goals.
8. Requires ARB to submit the updated mobile source strategy to the relevant policy and fiscal committees of the Legislature.

COMMENTS:

Over 40% of California's GHG emissions are generated by the transportation sector, which includes both the light-duty (passenger cars) and medium- and heavy-duty fleets (such as, trucks, buses, off-road equipment). While cleaning up the entire transportation sector is important, an effort to improve the heavy-duty vehicle fleet is a high priority because this sector contributes greatly to GHG emissions as well as produces a variety of smog-forming pollutants such as oxides of nitrogen (NOx), particulate matter, reactive organic gasses, and other toxic air contaminants that contribute to poor air quality and associated health impacts.

To comply with the Federal Clean Air Act and attain national air quality standards, California must continually update portions of its State Implementation Plan (SIP). One element of the SIP is the state's mobile source strategy, which ARB last updated in 2016. Part of the 2016 mobile source strategy identified that major changes and investments need to be made to clean up the heavy-duty transportation sector.

This bill requires ARB to update its mobile source strategy and for that strategy to include a number of elements – most importantly a comprehensive strategy to meet reasonable and achievable goals for reducing emissions from medium- and heavy-duty vehicles. Presumably, this strategy will include both regulatory requirements to change behavior as well as incentive funding to encourage early adoption of technological solutions. This bill also requires ARB to utilize a "beachhead market analysis" in order to target investments to technologies and applications that have strong potential to transfer and spread to broader applications.

Committee comments. Developing and deploying new powertrain technologies for heavy-duty vehicles will not be inexpensive. Higher costs for trucking result in higher prices for consumers. The question is whether the benefits exceed the costs. The author's intent is to acquire multi-year commitments of Greenhouse Gas Reduction Fund revenues, which are derived from California's Cap and Trade Program, to provide appropriate incentives. If the author is successful in dedicating funding to an appropriate level of incentives, then the state may be able to minimize the financial impacts of this bill's aim.

Earlier versions of this bill included ambitious, specific air quality goals which subsequently were amended out of the bill. Following these amendments, business organizations have dropped their opposition and now support the bill stating that, "The amended language will better align meeting California's ambitious climate goals with ensuring continued economic vitality for our state."

According to the Author:

According to the author, "Decades after the passage of the Clean Air Act, diesel trucks continue to contribute significant toxic air pollution to California's air – impacting communities across the state. Fossil diesel-fueled trucks are responsible for 33 percent of statewide oxides of nitrogen (NOx) emissions annually, 20 percent of statewide GHG emissions, and emit more particulate matter than all of the state's power plants combined. Children are particularly susceptible to health impacts from this pollution. It is imperative that California continue to work toward dramatically cutting reliance on fossil diesel, and support businesses in adopting new, clean medium- and heavy-duty vehicle technologies."

Arguments in Support:

Many environmental and clean fuel organizations write in support of this bill, indicating that they believe it to be a critical step in addressing air quality impacts of the medium- and heavy-duty vehicle sector.

Arguments in Opposition:

None on file.

FISCAL COMMENTS:

1. CARB estimates annual costs of approximately $400,000 for 2 PY (staff) and $250,000 in contract funds to develop and adopt a comprehensive strategy for the deployment of medium duty and heavy-duty vehicles. (Air Pollution Control Fund – APCF).
2. Potentially significant cost pressures, to the extent the update to the mobile source strategy results in prioritizing expenditures on the deployment of medium duty and heavy-duty vehicles through the Carl Moyer Program, Air Quality Improvement Program, Advanced Vehicle Fuel and Technology Program, California Clean Truck, Bus, and Technology Program (various funds).
3. Unknown, likely minor to moderate costs for DOT, CEC and Go-Biz to consult with ARB on the development of the strategy.

VOTES:

SENATE FLOOR: 30-7-1

YES: Allen, Archuleta, Atkins, Beall, Bradford, Caballero, Chang, Dodd, Durazo, Galgiani, Glazer, Hertzberg, Hill, Hueso, Hurtado, Jackson, Leyva, McGuire, Mitchell, Monning, Pan, Portantino, Roth, Rubio, Skinner, Stern, Umberg, Wieckowski, Wiener, Wilk

NO: Bates, Borgeas, Grove, Jones, Morrell, Nielsen, Stone

ABS, ABST OR NV: Moorlach

ASM TRANSPORTATION: 12-2-1

YES: Frazier, Aguiar-Curry, Berman, Chu, Daly, Diep, Friedman, Gipson, Grayson, Medina, Nazarian, O'Donnell

NO: Fong, Bigelow

ABS, ABST OR NV: Cunningham

ASM NATURAL RESOURCES: 9-2-0

YES: Friedman, Flora, Chau, Eggman, Cristina Garcia, Limón, McCarty, Muratsuchi, Mark Stone

NO: Mathis, Fong

ASM APPROPRIATIONS: 14-4-0

YES: Gonzalez, Bloom, Bonta, Calderon, Carrillo, Chau, Diep, Eggman, Gabriel, Eduardo Garcia, Maienschein, Petrie-Norris, Quirk, Robert Rivas

NO: Bigelow, Brough, Fong, Obernolte

UPDATED:

VERSION: August 12, 2019

CONSULTANT: Eric Thronson / TRANS. / (916) 319-2093 FN: 0001643

Date of Hearing: August 14, 2019

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez, Chair

SBPCA Bill Id:SB 44

Author:(Skinner) – As Amended Ver:August 12, 2019

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

SUMMARY:

This bill requires the Air Resources Board (ARB), in consultation with the Department of Transportation (DOT), the California Energy Commission (CEC) and the Governor’s Office of Business and Economic Development (Go-Biz) and in collaboration with relevant stakeholders, to update its 2016 mobile source strategy to include a comprehensive strategy for the deployment of medium- and heavy-duty vehicles in the state.

Specifically, this bill:

1. Requires ARB, no later than January 1, 2021, and at least every five years thereafter, to update its 2016 mobile source strategy to include a comprehensive strategy for the deployment of medium- and heavy-duty vehicles in the state for the purpose of bringing the state into compliance with National Ambient Air Quality Standards (NAAQS) and for reducing motor vehicle GHG emissions in the medium- and heavy-duty vehicle sector.
2. Requires ARB to recommend reasonable and achievable goals for reducing emissions from medium- and heavy-duty vehicles by 2030 and 2050, respectively, as part of the comprehensive strategy, based on, but not limited to, the following factors:
3. The state’s overarching emissions reduction goal.
4. The California Sustainable Freight Action Plan.
5. Technological feasibility.
6. Cost-effectiveness.
7. Requires ARB to include in its update to the mobile source strategy both of the following:
   1. An identification of policies that provide advantages to fleets that reduce GHG emissions earlier than required by law.
   2. The coordination of plans for the attainment of NAAQS with relevant GHG emissions reduction goals.
8. Requires ARB, in developing the comprehensive strategy, to do all of the following:
   1. Seek to maximize the reduction of criteria air pollutants.
   2. Identify regulations that could improve market acceptance, spur technology advancements, reduce technology costs and support the commercialization and deployment of medium- and heavy-duty vehicles that reduce GHG emissions.
   3. Identify research needs to address any data gaps.
   4. Identify areas where ARB should coordinate with other state agencies, districts, utilities providers and technology providers to implement measures identified as part of the comprehensive strategy.
   5. Identify benefits to low-income communities and communities disproportionally impacted by diesel pollution.
   6. Identify policies that provide advantages to fleets that reduce GHG emissions early.
9. Allows the ARB to establish a process to identify medium- and heavy-duty vehicle segments that can more quickly reduce emissions.
10. Requires ARB to submit the updated mobile source strategy to the relevant policy and fiscal committees of the Legislature.

FISCAL EFFECT:

1. CARB estimates annual costs of approximately $400,000 for 2 PY (staff) and $250,000 in contract funds to develop and adopt a comprehensive strategy for the deployment of medium duty and heavy-duty vehicles. (Air Pollution Control Fund – APCF).
2. Potentially significant cost pressures, to the extent the update to the mobile source strategy results in prioritizing expenditures on the deployment of medium duty and heavy-duty vehicles through the Carl Moyer Program, Air Quality Improvement Program, Advanced Vehicle Fuel and Technology Program, California Clean Truck, Bus, and Technology Program (various funds).
3. Unknown, likely minor to moderate costs for DOT, CEC and Go-Biz to consult with ARB on the development of the strategy.

COMMENTS:

1. Background and Purpose. Over 40% of California's GHG emissions are generated by the transportation sector, which includes both the light-duty (passenger cars) and medium- and heavy-duty fleets (such as, trucks, buses, off-road equipment). While cleaning up the entire transportation sector is important, an effort to improve the heavy-duty vehicle fleet is a high priority because this sector contributes greatly to GHG emissions as well as produces a variety of smog-forming pollutants such as oxides of nitrogen (NOx), particulate matter, reactive organic gasses and other toxic air contaminants that contribute to poor air quality and associated health impacts.

This bill requires ARB to update its mobile source strategy and for that strategy to include a number of elements – most importantly a comprehensive strategy to meet reasonable and achievable goals for reducing emissions from medium- and heavy-duty vehicles.

According to the author:

Decades after the passage of the Clean Air Act, diesel trucks continue to contribute significant toxic air pollution to California’s air – impacting communities across the state. Fossil diesel-fueled trucks are responsible for 33 percent of statewide oxides of nitrogen (NOx) emissions annually, 20 percent of statewide GHG emissions, and emit more particulate matter than all of the state’s power plants combined. Children are particularly susceptible to health impacts from this pollution. It is imperative that California continue to work toward dramatically cutting reliance on fossil diesel, and support businesses in adopting new, clean medium- and heavy-duty vehicle technologies.

1. Related Legislation. AB 1262 (O’Donnell) requires several state agencies to regularly update, every five years, the California Sustainable Freight Action Plan, with the first update to be completed by January 1, 2021. This is a two-year bill.

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

Date of Hearing: July 8, 2019

ASSEMBLY COMMITTEE ON NATURAL RESOURCES

Laura Friedman, Chair

SBPCA Bill Id:SB 44

Author:(Skinner) – As Amended Ver:June 19, 2019

SENATE VOTE: 30-7

SUBJECT: Medium- and heavy-duty vehicles: comprehensive strategy

SUMMARY: Requires the Air Resources Board (ARB) to update its 2016 mobile source strategy to include a comprehensive strategy for the deployment of medium- and heavy-duty vehicles in the state.

EXISTING LAW:

1. The federal Clean Air Act (CAA) and its implementing regulations set National Ambient Air Quality Standards (NAAQS) for six criteria pollutants, designate air basins that do not achieve NAAQS as nonattainment, and require states with nonattainment areas to submit a State Implementation Plan (SIP) detailing how they will achieve compliance with NAAQS.
2. Establishes the 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 coordinate with local air districts to control emissions from stationary sources in order to implement the CAA.
3. Requires the ARB, pursuant to the California Global Warming Solutions Act of 2006 [AB 32 (Núñez), Chapter 488, Statutes of 2006], to adopt a statewide greenhouse gas (GHG) emissions limit equivalent to 1990 levels by 2020 and adopt regulations to achieve maximum technologically feasible and cost-effective GHG emission reductions. AB 32 authorizes ARB to permit the use of market-based compliance mechanisms to comply with GHG reduction regulations once specified conditions are met. Requires ARB to approve a statewide GHG emissions limit equivalent to 40% below the 1990 level by 2030.
4. Establishes the Clean Truck Program pursuant to SB 1204 (Lara), Chapter 524, Statutes of 2014, to use GGRF funds for development, demonstration, pre-commercial pilot, and early commercial deployment of zero- and near-zero-emission truck, bus, and off-road vehicle and equipment technologies including, but not necessarily limited to, medium- and heavy-duty trucks, vocational trucks, short-haul and long-haul trucks, buses, and off-road vehicles and equipment, port equipment, agricultural equipment, marine equipment, and rail equipment.
5. Requires, until December 31, 2020, that no less than 20% of funding for the Clean Truck Program support commercial deployment of existing zero- and near-zero-emission heavy-duty trucks.
6. Establishes the Air Quality Improvement Program (AQIP), administered by ARB in consultation with local air districts, to fund projects that reduce criteria air pollutants, improve air quality, and provide research for alternative fuels and vehicles, vessels, and equipment technologies.

THIS BILL:

1. Makes findings and declarations.
2. Requires ARB, no later than January 1, 2021, and at least every five years thereafter, to update its 2016 mobile source strategy to include a comprehensive strategy for the deployment of medium- and heavy-duty vehicles in the state for the purpose of bringing the state into compliance with NAAQS and reducing motor vehicle GHG emissions from the medium- and heavy-duty vehicle sector.
3. Requires ARB to recommend reasonable and achievable goals for reducing emissions from medium- and heavy-duty vehicles by 2030 and 2050, respectively, as part of the comprehensive strategy, based on, but not limited to, the following factors:
4. The state’s overarching emissions reduction goal;
5. The California Sustainable Freight Action Plan’s goals;
6. Technological feasibility; and
7. Cost-effectiveness.
8. Requires ARB to include in its update to the mobile source strategy both of the following:
   1. An identification of policies that provide advantages to fleets that reduce GHG emissions earlier than required by law; and
   2. The coordination of plans for the attainment of NAAQS with relevant GHG emissions reduction goals.
9. Requires ARB, in developing the comprehensive strategy, to do all of the following:
   1. Seek to maximize the reduction of criteria air pollutants;
   2. Identify regulations that could improve market acceptance, spur technology advancements, and reduce technology costs;
   3. Identify research needs to address any data gaps;
   4. Identify areas where ARB should coordinate with other state agencies, districts, utilities providers, and technology providers to implement measures identified as part of the comprehensive strategy;
   5. Identify benefits to low-income communities and communities disproportionally impacted by diesel pollution; and
   6. Identify policies that provide advantages to fleets that reduce GHG emissions early.
10. Allows the ARB to establish a process to identify medium- and heavy-duty vehicle segments that can more quickly reduce emissions.
11. Requires ARB to submit the updated mobile source strategy to the relevant policy and fiscal committees of the Legislature.

FISCAL EFFECT: According to the Senate Appropriations Committee, ARB estimates costs of approximately $400,000 annually to develop and adopt a comprehensive strategy for the deployment of medium- and heavy-duty vehicles, as well as potentially significant cost pressures, to the extent the update to the mobile source strategy results in prioritizing expenditures on the deployment of medium- and heavy-duty vehicles through the California Clean Truck, Bus, and Off-Road Vehicle and Equipment Technology Program.

COMMENTS:

1. Background. Mobile sources and the fossil fuels that power them (i.e., the transportation sector) are the largest contributors to the formation of ozone, GHG emissions, fine particulate matter (PM 2.5), and toxic diesel particulate matter. In California, they are responsible for approximately 80% of smog-forming nitrogen oxide (NOx) emissions. They also represent about 50% of GHG emissions when including emissions from fuel production, and more than 95% of toxic diesel particulate matter emissions. To comply with the CAA and attain NAAQS, California must continually update portions of its SIP. One element of the SIP is the state’s mobile source strategy, which ARB last updated in 2016. The mobile source strategy outlined ARB’s plan to meet air quality standards, achieve GHG emission reduction targets, decrease toxics health risk, and reduce fossil fuel consumption from the transportation sector over the next 15 years. Part of the 2016 mobile source strategy identified that major changes and investments need to be made to clean up the heavy-duty transportation sector.
2. Health impacts of air pollution. Air pollution, particularly ozone and particulate pollution, poses significant risks to human health, including premature death, reproductive harm, asthma, lung cancer, cardiovascular disease, and more.

Air pollution can have particularly significant impacts on children’s health. Eighty percent of a child’s alveoli, where the transfer of oxygen to blood occurs, develop after birth, and lungs and alveoli aren’t fully developed until adulthood. Children are also generally more active than adults and are outside for more hours per day on average, increasing their exposure to air pollution. The Southern California Children’s Health study tracked 1,759 children between the ages of 10 and 18 from 1993 to 2001 and found that the decrease in lung function associated with growing up in polluted areas was similar to that of children raised in households with parents who smoked. A follow-up study of 863 children in the same area between the years of 2007 and 2011, when air quality had significantly improved compared to the period from 1993 to 2001, found that the population studied had significantly greater lung function than the first study cohort, demonstrating the impact that air quality improvements can have on human health. Pollution exposure also increases the probability that children will develop other respiratory symptoms or suffer from impaired development of their nervous, endocrine, and immune systems. These health risks are often disproportionately concentrated in low-income areas and communities of color. A 2015 study on school campuses in the Sacramento region found that increased student exposure to emissions from road traffic was positively correlated with the percentage of the student population that was non-white or low income.

Recent studies, have shown that the health impacts of air pollution in California have been getting worse over the last decade. In Southern California, there was a 10% increase in deaths attributable to ozone pollution from 2010 to 2017^[1]. Southern California has the nation’s worst smog and is falling out of compliance with the CAA as levels of ozone pollution have worsened in recent years.

1. Pollution from heavy-duty vehicles. Diesel-powered heavy-duty vehicles are a major source of vehicular air pollution in California. Heavy-duty vehicles are only 7% of California’s vehicle population, but are responsible for approximately 20% of the GHG emissions, 40% of the NOx emissions, and 27% of the PM emissions from the transportation sector. Disadvantages communities are disproportionately affected by pollution from heavy-duty vehicles as they are often located near heavily-trafficked freight corridors. Proximity to freeways and busy roads increases exposure to hazardous particulate air pollution, subsequently increasing health risks.
2. Clean Truck Program. In 2014, SB 1204 (Lara) established the Clean Truck Program, which is administered by ARB. The intent of SB 1204 was to create a single, overarching program to develop and deploy heavy-duty vehicles primarily because the author felt that heavy-duty vehicles were not being adequately addressed in existing incentive programs. The program works to develop zero-and near-zero emission technologies for specified vehicles and equipment not only for trucks, but also for buses, off-road vehicles, and equipment at the ports, as well as in agricultural, marine, and rail sectors. Within the program, funding priority is generally given to projects that demonstrate benefits to disadvantaged communities, the ability to leverage additional public and private funding, and provide the potential for co-benefits.

ARB carries out the Clean Truck Program in concert with the Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project (HVIP), which provides point-of-sale voucher discounts to fleet owners, and the Zero-Emission Truck and Bus Pilot Commercial Deployment Project, which provides funding for large scale deployments of medium- and heavy-duty trucks and buses, as well as accompanying fueling infrastructure and supporting vehicle service and repair facility upgrades. Implemented through the San Pedro Bay Ports Clear Air Action Plan, equipment upgrades funded by the Clean Truck Program have reduced air pollution from harbor trucks in the Ports of Los Angeles and Long Beach by more than 90%.

SB 1204 required ARB to create an annual plan for the Clean Truck Program. ARB has developed an annual funding plan for clean transportation incentives, including the Clean Truck Program, and added a three-year investment strategy for heavy duty incentives.

1. Author’s statement:

Decades after California passed the Clean Air Act, diesel trucks continue to contribute significant toxic air pollution to California’s air – impacting communities across the state. Fossil diesel-fueled trucks are responsible for 33% of statewide oxides of nitrogen (NOx) emissions annually, 20% of statewide GHG emissions, and emit more particulate matter than all of the state’s power plants combined. Children are particularly susceptible to health impacts from this pollution. It is imperative that California continue to work toward dramatically cutting reliance on fossil diesel, and support businesses in adopting new, clean medium- and heavy-duty vehicle technologies.

1. Mobile source strategy update. This bill requires ARB to update its mobile source strategy to include a comprehensive strategy to reduce GHG emissions from the medium- and heavy-duty vehicle sector, and requires the ARB to recommend “reasonable and achievable goals” for reducing GHG emissions by 2030 and 2050 as part of the strategy.
2. Related legislation:

AB 1262 (O’Donnell) requires several state agencies to regularly update, every five years, the California Sustainable Freight Action Plan, with the first update to be completed by January 1, 2021. This bill is pending hearing in Assembly Appropriations Committee.

SB 210 (Leyva) requires ARB to adopt and implement regulations for a Heavy-Duty Vehicle Inspection and Maintenance Program for nongasoline, heavy-duty, on-road vehicles. This bill is set to be heard in this committee on July 8, 2019.

SB 216 (Galgiani) expands the projects eligible for funding under the Carl Moyer Memorial Air Quality Standards Attainment Program to include a used heavy-duty truck exchange program. This bill is set to be heard in this committee on July 8, 2019.

1. Double referral. This bill was heard in the Assembly Transportation Committee on July 1^st. The vote was 12-2.

REGISTERED SUPPORT / OPPOSITION:

Support

350 Bay Area

350 Silicon Valley

Advanced Energy Economy

Advanced Engine Systems Institute

American Lung Association in California

Bay Area Air Quality Management District

Breathe California

California Business Properties Association

California Chamber Of Commerce

California Electric Transportation Coalition

California Health Care Climate Alliance

California League of Conservation Voters

California Manufactures & Technology Association

California Trucking Association

CALSTART Inc.

Center for Climate Change & Health

Central Valley Air Quality Coalition

Ceres, Inc.

Coalition for Clean Air

Coalition for Renewable Natural Gas

Community Action to Fight Asthma

CR&R, Inc.

Environment California

Environmental Working Group

Fossil Free California

Friends Committee on Legislation of California

Health Care without Harm

Los Angeles County Business Federation (Bizfed)

Move LA, A Project of Community Partners

Natural Resources Defense Council

Neste US, Inc.

Nextgen California

Oberon Fuels

Regional Asthma Management & Prevention

San Gabriel Valley Economic Partnership

Sierra Club California

Southern California Edison

Southern California Gas Company

Opposition

None on file

Analysis Prepared by: Achintya Madduri / NAT. RES. /

1. https://www.latimes.com/local/lanow/la-me-smog-southern-california-20190701-story.html ↑

Date of Hearing: July 1, 2019

ASSEMBLY COMMITTEE ON TRANSPORTATION

Jim Frazier, Chair

SBPCA Bill Id:SB 44

Author:(Skinner) – As Amended Ver:June 19, 2019

SENATE VOTE: 30-7

SUBJECT: Medium- and heavy-duty vehicles: comprehensive strategy

SUMMARY: Requires the Air Resources Board (ARB) to update its 2016 mobile source strategy to include a comprehensive strategy for the deployment of medium- and heavy-duty vehicles in the state. Specifically, this bill:

1. Requires ARB, no later than January 1, 2021, and at least every five years thereafter, to update its 2016 mobile source strategy to include a comprehensive strategy for the deployment of medium- and heavy-duty vehicles in the state for the purpose of bringing the state into compliance with National Ambient Air Quality Standards (NAAQS) and reducing motor vehicle greenhouse gas (GHG) emissions from the medium- and heavy-duty vehicle sector.
2. Requires ARB to recommend reasonable and achievable goals for reducing emissions from medium- and heavy-duty vehicles by 2030 and 2050, respectively, as part of the comprehensive strategy, based on, but not limited to, the following factors:
3. The state’s overarching emissions reduction goal;
4. The California Sustainable Freight Action Plan’s goals;
5. Technological feasibility; and
6. Cost-effectiveness.
7. Requires ARB to include in its update to the mobile source strategy both of the following:
   1. An identification of policies that provide advantages to fleets that reduce GHG emissions earlier than required by law; and
   2. The coordination of plans for the attainment of NAAQS with relevant GHG emissions reduction goals.
8. Requires ARB, in developing the comprehensive strategy, to do all of the following:
   1. Seek to maximize the reduction of criteria air pollutants;
   2. Identify regulations that could improve market acceptance, spur technology advancements, and reduce technology costs;
   3. Identify research needs to address any data gaps;
   4. Identify areas where ARB should coordinate with other state agencies, districts, utilities providers, and technology providers to implement measures identified as part of the comprehensive strategy;
   5. Identify benefits to low-income communities and communities disproportionally impacted by diesel pollution; and
   6. Identify policies that provide advantages to fleets that reduce GHG emissions early.
9. Requires ARB to submit the updated mobile source strategy to the relevant policy and fiscal committees of the Legislature.

EXISTING LAW:

1. Establishes the Federal Clean Air Act (FCAA), pursuant to federal law, that requires the U.S. Environmental Protection Agency to establish NAAQS for certain air pollutants due to their negative impact on public health and provides that regions that do not meet any one of the national standards are designated as non-attainment areas.
2. Establishes ARB as the air pollution control agency in California and requires ARB, among other things, to control emissions from a wide array of mobile sources.
3. Establishes the Global Warming Solutions Act of 2006, AB 32 (Núñez), Chapter 244, Statutes of 2006, which requires ARB to determine the 1990 statewide 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 emissions reductions measures by regulation. ARB is authorized to include the use of market-based mechanisms to comply with these regulations.
4. Requires that statewide GHG emissions are reduced to at least 40% below the 1990 level by 2030, pursuant to SB 32 (Pavley), Chapter 249, Statutes of 2016.

FISCAL EFFECT: According to the Senate Appropriations Committee, ARB estimates costs of approximately $400,000 annually to develop and adopt a comprehensive strategy for the deployment of medium- and heavy-duty vehicles, as well as potentially significant cost pressures, to the extent the update to the mobile source strategy results in prioritizing expenditures on the deployment of medium- and heavy-duty vehicles through the California Clean Truck, Bus, and Off-Road Vehicle and Equipment Technology Program.

COMMENTS: Over 40% of California's GHG emissions are generated by the transportation sector, which includes both the light-duty (passenger cars) and medium- and heavy-duty fleets (such as, trucks, buses, off-road equipment). While cleaning up the entire transportation sector is important, an effort to improve the heavy-duty vehicle fleet is a high priority because this sector contributes greatly to GHG emissions as well as produces a variety of smog-forming pollutants such as oxides of nitrogen (NOx), particulate matter, reactive organic gasses, and other toxic air contaminants that contribute to poor air quality and associated health impacts.

To comply with the FCAA and attain national air quality standards, California must continually update portions of its State Implementation Plan (SIP). One element of the SIP is the state’s mobile source strategy, which ARB last updated in 2016. Part of the 2016 mobile source strategy identified that major changes and investments need to be made to clean up the heavy-duty transportation sector.

This bill requires ARB to update its mobile source strategy and for that strategy to include a number of elements – most importantly a comprehensive strategy to meet reasonable and achievable goals for reducing emissions from medium- and heavy-duty vehicles. Presumably, this strategy will include both regulatory requirements to change behavior as well as incentive funding to encourage early adoption of technological solutions. This bill also requires ARB to utilize a “beachhead market analysis” in order to target investments to technologies and applications that have strong potential to transfer and spread to broader applications.

According to the author, “Decades after the passage of the Clean Air Act, diesel trucks continue to contribute significant toxic air pollution to California’s air – impacting communities across the state. Fossil diesel-fueled trucks are responsible for 33 percent of statewide oxides of nitrogen (NOx) emissions annually, 20 percent of statewide GHG emissions, and emit more particulate matter than all of the state’s power plants combined. Children are particularly susceptible to health impacts from this pollution. It is imperative that California continue to work toward dramatically cutting reliance on fossil diesel, and support businesses in adopting new, clean medium- and heavy-duty vehicle technologies.”

Many environmental and clean fuel organizations write in support of this bill, indicating that they believe it to be a critical step in addressing air quality impacts of the medium- and heavy-duty vehicle sector.

Committee comments. Developing and deploying new powertrain technologies for heavy-duty vehicles will not be inexpensive. Higher costs for trucking result in higher prices for consumers. The question is whether the benefits exceed the costs. The author’s intent is to acquire multi-year commitments of Greenhouse Gas Reduction Fund revenues, which are derived from California’s Cap and Trade Program, to provide appropriate incentives. If the author is successful in dedicating funding to an appropriate level of incentives, then the state may be able to minimize the financial impacts of this bill’s aim.

Earlier versions of this bill included ambitious, specific air quality goals which subsequently were amended out of the bill. Following these amendments, business organizations have dropped their opposition and now support the bill stating that, “The amended language will better align meeting California’s ambitious climate goals with ensuring continued economic vitality for our state.”

Double referral. This bill will be referred to the Assembly Natural Resources Committee should it pass out of this committee.

Related legislation. AB 1262 (O’Donnell) requires several state agencies to regularly update, every five years, the California Sustainable Freight Action Plan, with the first update to be completed by January 1, 2021. This bill is pending hearing in Assembly Appropriations Committee.

SB 210 (Leyva) requires ARB to adopt and implement regulations for a Heavy-Duty Vehicle Inspection and Maintenance Program for nongasoline, heavy-duty, on-road vehicles. This bill is set to be heard in this committee on July 1, 2019.

REGISTERED SUPPORT / OPPOSITION:

Support

American Lung Association In California
Bay Area Air Quality Management District
California Business Properties Association
California Chamber of Commerce
California Manufactures & Technology Association 
California Trucking Association
CALSTART Inc.
Ceres, Inc.
CR&R, Inc.
Environmental Working Group
Los Angeles County Business Federation (Bizfed)
Natural Resources Defense Council
Neste US, Inc.
San Gabriel Valley Economic Partnership
Southern California Edison

Opposition

None on file

Analysis Prepared by: Eric Thronson / TRANS. / (916) 319-2093

 THIRD READING  

Bill No: SB 44

Author: Skinner (D)

Amended: 5/1/19

Vote: 21

SENATE ENVIRONMENTAL QUALITY COMMITTEE: 5-2, 4/10/19

AYES: Allen, Hill, Skinner, Stern, Wieckowski

NOES: Bates, Stone

SENATE TRANSPORTATION COMMITTEE: 9-3, 4/23/19

AYES: Beall, Dodd, Galgiani, McGuire, Roth, Rubio, Skinner, Umberg, Wieckowski

NOES: Bates, Morrell, Stone

SENATE APPROPRIATIONS COMMITTEE: 4-2, 5/16/19

AYES: Portantino, Bradford, Hill, Wieckowski

NOES: Bates, Jones

SUBJECT: Medium-duty and heavy-duty vehicles: comprehensive strategy

SOURCE: Author

DIGEST:

This bill requires the Air Resources Board update the 2016 mobile source strategy to include a comprehensive strategy for the deployment of medium duty and heavy-duty vehicles in the state for the purpose of bringing the state into compliance with federal ambient air quality standards and reducing motor vehicle greenhouse gas emissions from the medium duty and heavy-duty vehicle sector, as specified.

ANALYSIS: Existing federal law 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. Requires, under the California Global Warming Solutions Act of 2006 (also known as AB 32), ARB to (a) determine the 1990 statewide greenhouse gas (GHG) emissions level and approve a statewide GHG emissions limit that is equivalent to that level to be achieved by 2020; (b) ensure that statewide GHG emissions are reduced to at least 40% below the 1990 level by December 31, 2030 (i.e., SB 32); and (c) adopt regulations, until December 31, 2030, that utilize market-based compliance mechanisms to reduce GHG emissions (i.e., the cap-and-trade program). (HSC §38500 et seq.)
3. Establishes the Greenhouse Gas Reduction Fund (GGRF) in the State Treasury, requires all moneys, except for fines and penalties, collected pursuant to a market-based mechanism be deposited in the fund. (Government Code §16428.8)

This bill:

1. Makes findings and declarations.
2. Requires, no later than January 1, 2021, ARB, in consultation with specified entities, to update the Board’s 2016 mobile source strategy to include a comprehensive strategy for the deployment of medium duty and heavy-duty vehicles in the state for the purpose of bringing the state into compliance with NAAQS and reducing motor vehicle GHG emissions from the medium duty and heavy-duty vehicle sector.
3. Requires ARB to recommend reasonable and achievable goals for reducing emissions from medium duty and heavy-duty vehicles by 2030 and 2050, respectively, as part of the comprehensive strategy, as specified.
4. Requires the updates to the mobile source strategy to include both of the following:
   1. An identification of policies that provide advantages to fleets that reduce GHG emissions earlier than required by law.
   2. The coordination of plans for the attainment of NAAQS with relevant GHG emissions reduction goals.
5. Requires ARB, in developing the comprehensive strategy, to do all of the following:
   1. Seek to maximize the reduction of criteria air pollutants.
   2. Identify regulation that could improve market acceptance, spur technology advancements, and reduce technology costs.
   3. Identify research needs to address any data gaps.
   4. Identify areas where the state should coordinate with other state agencies, districts, utilities providers, and technology providers to implement measures identified as part of the comprehensive strategy.
   5. Identify benefits to low-income communities and communities disproportionally impacted by diesel pollution.
   6. Identify policies that provide advantages to fleets that reduce GHG emissions early.
6. Allows ARB, through a public process, to establish a process to identify medium duty and heavy-duty vehicle segments that can more quickly reduce motor vehicle emissions, as specified.
7. Specifies that, upon appropriation by the Legislature, moneys, including, but not limited to, moneys from GGRF, are available to ARB for programs established pursuant to the California Clean Truck, Bus, and Off-Road Vehicle and Equipment Technology Program, as specified.

Background

1. Air quality standards. The 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 the 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, and 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 NAAQS.

1. Mobile Source Strategy. Mobile sources—cars, trucks, and a myriad of off-road equipment—and the fossil fuels that power them are the largest contributors to the formation of ozone, PM2.5, diesel PM, and GHG emissions in California. They are responsible for approximately 80% of smog-forming NOx emissions, 90% of diesel PM emissions, and nearly 50% of GHG emissions. Given this contribution, significant cuts in pollution from these sources are needed in order for the state to achieve our air quality and climate change goals.

On May 16, 2016, ARB released an updated Mobile Source Strategy that demonstrates how California can simultaneously meet air quality standards, achieve GHG emission reduction targets, decrease health risk from transportation emissions, and reduce petroleum consumption over the next fifteen years. The Mobile Source Strategy was included in the SIP. According to ARB:

For passenger vehicles, the strategy calls for increasing the penetration of plug-in hybrid electric vehicles (PHEV) and non-combustion zero-emission vehicles (ZEV) including battery-electric (BEV) and hydrogen fuel cell electric vehicles (FCEV) by over 50 percent compared to current programs. The electrical grid and hydrogen supply supporting these electric vehicles will need to represent 50 percent renewable energy generation. A large portion of the liquid fuels for combustion engine vehicles will also need to be sourced from renewable feedstock.

For heavy-duty vehicles, California is laying the groundwork for reducing emissions from the heavy-duty truck sector on multiple fronts: cleaner internal combustion engines, renewable fuels, and zero-emission technology. The strategy calls for internal combustion engine technology that is effectively 90 percent cleaner than today’s current standards, with clean, renewable fuels comprising half the fuels burned. Cleaner engine standards will be especially important for interstate trucks given the status of technology development and infrastructure requirements. These efforts will be complemented by introduction of zero-emission technologies in heavy-duty applications that are suited to early adoption of ZEV technologies. Applications such as last mile delivery, transit and shuttle buses, and other small vocational trucks offer the potential for increasing use of ZEV technologies. Actions to promote ZEVs in these heavy-duty applications are underway and are important to further reduce regional and near-source toxics exposure as well as foster the development of these technologies so they become suitable for broader use in the future. Off-road equipment will need to reflect this same type of transformation to a mix of zero and near-zero technologies operating on renewable fuels.

1. Implementing AB 32: The California Global Warming Solutions Act of 2006. In 2006, AB 32 (Núñez and Pavley, Chapter 488, Statutes of 2006) was signed into law, which requires ARB to determine the 1990 statewide GHG emission level and achieve a reduction in GHG emissions to that level by 2020. In addition to calling on ARB to inventory GHGs in California (including carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride) and approve the aforementioned statewide GHG emissions limit.

AB 32 also requires ARB to (a) implement regulations that achieve the maximum technologically feasible and cost-effective reduction of GHG emissions, (b) identify and adopt regulations for discrete early-action measures, and (c) prepare and approve a scoping plan, to be updated at least once every five years, to achieve the maximum technologically feasible and cost-effective reduction of GHG emissions. Due to a variety of factors, most importantly being the great recession that started in 2008, California will achieve the goals of AB 32 in advance of the 2020 deadline.

In 2016, the Legislature approved, and the Governor signed, SB 32 (Pavley, Chapter 249, Statutes of 2016), which required ARB to ensure that statewide GHG emissions are reduced to at least 40% below the 1990 level by December 31, 2030. This new goal is known as the SB 32 target.

The following year, AB 398 (E. Garcia, Chapter 135, Statutes of 2017) was enacted to extend the authority of ARB to implement a cap-and-trade program to reduce GHG emissions throughout the state. AB 398 specified a variety of requirements for the post-2020 cap-and-trade program, most notable are (a) requiring the banking of allowances from the current cap-and-trade program into the post-2020 program, (b) requiring ARB to evaluate and address concerns related to overallocation of available allowances in the program for years 2021 to 2030, and (c) the adoption of a price ceiling in the program, at which point an unlimited number of allowances must be made available for purchase.

Comments

Purpose of bill. According to the author, “Decades after California passed the Clean Air Act, diesel trucks continue to spew toxic air pollution into California’s communities. Fossil diesel-fueled trucks are responsible for 33 percent of statewide oxides of nitrogen (NOx) emissions annually, 20 percent of statewide GHG emissions, and emit more particulate matter than all of the state’s power plants combined.

“Since 1998, the California Air Resources Board (CARB) has recognized particulate matter as a toxic air contaminant based on the relationship between diesel exhaust and lung cancer. California’s air is particularly plagued with these pollutants – the state has 7 of the 10 geographic areas with the worst particulate matter pollution, according to the American Lung Association. Children are at particular risk, because they breathe faster than adults and therefore suffer from increased exposure to toxic air pollutants.

“For these reasons, it is imperative that California work to dramatically cut reliance on fossil diesel fuel. That will require planning for how the medium- and heavy-duty vehicle sectors can transition away from this fuel over time, and providing stable market incentives to help the industry shift away from dirty technology with minimal economic burden.”

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

According to the Senate Appropriations Committee:

• CARB estimates costs of approximately $400,000 annually and two PY of staff to develop and adopt a comprehensive strategy for the deployment of medium duty and heavy-duty vehicles. (GGRF)
• Potentially significant cost pressures, to the extent the update to the mobile source strategy results in prioritizing expenditures on the deployment of medium duty and heavy-duty vehicles through the California Clean Truck, Bus, and Off-Road Vehicle and Equipment Technology Program (Clean Truck Program). (GGRF)

SUPPORT: (Verified 5/10/19)

350 Bay Area

350 Silicon Valley

American Lung Association in California

Bay Area Air Quality Management District

Biodico

Bioenergy Association of California

Breast Cancer Prevention Partners

California Business Properties Association

California Chamber of Commerce

California League of Conservation Voters

California Manufacturers and Technology Association

California Natural Gas Vehicle Coalition

California Trucking Association

CALSTART

Center for Climate Change and Health

Central Valley Air Quality Coalition

Ceres

Clean Energy

Coalition for Clean Air

Coalition for Renewable Natural Gas

CR&R Environmental Services

Environment California

Fossil Free California

Friends Committee on Legislation of California

Move LA

NextGen California

Oberon Fuels

Pacific Ethanol

Regional Asthma Management and Prevention

Sierra Club California

Southern California Edison

Union of Concerned Scientists

Western Propane Gas Association

OPPOSITION: (Verified 5/10/19)

None received

Prepared by: David Ernest García / E.Q. / (916) 651-4108

5/18/19 11:57:46

**** END ****

SENATE COMMITTEE ON APPROPRIATIONS

Senator Anthony Portantino, Chair

2019 - 2020 Regular Session

SB 44 (Skinner) - Medium- and heavy-duty vehicles: comprehensive strategy

Bill Summary:

SB 44 would require the California Air Resources Board (CARB), in consultation with specified entities, to update the 2016 Mobile Source Strategy to include a comprehensive strategy for the deployment of medium- and heavy-duty vehicles, as specified.

Fiscal Impact:

• CARB estimates costs of approximately $400,000 annually and 2 PY of staff to develop and adopt a comprehensive strategy for the deployment of medium duty and heavy-duty vehicles. (Greenhouse Gas Reduction Fund – GGRF)
  
• Potentially significant cost pressures, to the extent the update to the mobile source strategy results in prioritizing expenditures on the deployment of medium duty and heavy-duty vehicles through the California Clean Truck, Bus, and Off-Road Vehicle and Equipment Technology Program (Clean Truck Program). (GGRF)

Background:

The Federal Clean Air Act (FCAA) and its implementing regulations sets the National Ambient Air Quality Standards (NAAQS) for six criteria pollutants, designates air basins that do not achieve those standards as nonattainment areas, allows 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. Existing law requires CARB to control emissions from a wide array of mobile sources and implement the FCAA.

Existing law, the California Global Warming Solutions Act of 2006 (also known as AB 32), requires CARB to: (1) determine the 1990 statewide greenhouse gas (GHG) emissions level and approve a statewide GHG emissions limit that is equivalent to that level to be achieved by 2020; (2) ensure that statewide GHG emissions are reduced to at least 40% below the 1990 level by December 31, 2030 (pursuant to SB 32, Chap. 249/2016); and (3) adopt regulations, until December 31, 2030, that utilize market-based compliance mechanisms to reduce GHG emissions (the cap-and-trade program). Existing law establishes the GGRF in the State Treasury, and requires all cap-and-trade program proceeds to be deposited into the fund. The Legislature appropriates 40% of the GGRF revenues, and the remaining 60% is continuously appropriated to specified programs.

On May 16, 2016, CARB released an updated Mobile Source Strategy that demonstrates how California can simultaneously meet air quality standards, achieve GHG emission reduction targets, decrease health risk from transportation emissions, and reduce petroleum consumption over the next fifteen years. The estimated benefits of the strategy in reducing emissions from mobile sources includes an 80 percent reduction of smog-forming emissions and a 45 percent reduction in diesel particulate matter from today's levels in the South Coast Air District.  Statewide, the Mobile Source Strategy would also result in a 45 percent reduction in greenhouse gas emissions, and a 50 percent reduction in the consumption of petroleum-based fuels.

The 2016 Mobile Source Strategy indicates that California is laying the groundwork for reducing emissions from the heavy-duty truck sector on multiple fronts: cleaner internal combustion engines, renewable fuels, and zero-emission technology. The strategy calls for internal combustion engine technology that is effectively 90 percent cleaner than today’s current standards, with clean, renewable fuels comprising half the fuels burned. These efforts will be complemented by introduction of zero-emission technologies in heavy-duty applications that are suited to early adoption of ZEV technologies. Applications such as last mile delivery, transit and shuttle buses, and other small vocational trucks offer the potential for increasing use of ZEV technologies. Actions to promote ZEVs in these heavy-duty applications are underway and are important to further reduce regional and near-source toxics exposure as well as foster the development of these technologies so they become suitable for broader use in the future. Off-road equipment will need to reflect this same type of transformation to a mix of zero and near-zero technologies operating on renewable fuels.

Existing law establishes the Clean Truck Program to fund development, demonstration, pre-commercial pilot, and early commercial deployment of zero- and near-zero-emission truck, bus, and off-road vehicle and equipment technologies. This program is funded with GGRF monies as part of the umbrella of CARB’s Low Carbon Transportation Investments within its Clean Transportation Incentive programs. Eligible projects include zero- and near-zero-emission medium- and heavy-truck, bus, and off-road vehicle and equipment technologies that are in the development, demonstration, pre-commercial pilot, or early commercial deployment stages, as well as purchase incentives and projects that support greater commercial motor vehicle and equipment freight efficiency and GHG emissions reductions. At least 20% of any funding made available for medium- and heavy-duty truck technology must be used to support early commercial development of existing zero- and near-zero-emission heavy-duty truck technology, until December 31, 2020. CARB must prioritize projects that demonstrate a benefit to disadvantaged communities, address technology and market barriers not addressed by other programs, and enable technologies that benefit multiple technology pathways.

Proposed Law:

SB 44 would require CARB, in consultation with specified state entities and stakeholders and by January 1, 2021, to update the 2016 Mobile Source Strategy to include a comprehensive strategy for the deployment of medium duty and heavy-duty vehicles, as specified. CARB would be required to recommend reasonable and achievable goals for reducing emissions from medium duty and heavy-duty vehicles by 2030 and 2050, respectively.

In developing the strategy, CARB must do all of the following:

• Seek to maximize the reduction of criteria air pollutants.
• Identify regulations that could improve market acceptance, spur technology advancements, and reduce technology costs.
• Identify research needs to address any data gaps.
• Identify areas where CARB should coordinate with other state agencies, districts, utility providers, and technology providers to implement measures identified as part of the strategy.
• Identify benefits to low-income communities and communities disproportionately impacted by diesel pollution.
• Identify policies that provide advantages to fleets that reduce GHG emissions early. CARB may establish a public process to identify segments that can expeditiously reduce emissions, as specified.

The bill would also require that GGRF and other funds shall be available to CARB, upon appropriation by the Legislature, for projects and programs established pursuant to the Clean Truck Program to support the commercialization and deployment of medium duty and heavy-duty vehicles that reduce GHG emissions.

Staff Comments:

CARB estimates that it would require two additional staff to conduct specified activities related to the bill. Specifically, 1 PY would be needed to do the following: identify data gaps, such as fleet turnover, in-use emissions of advanced technologies; develop research and data collection programs to address those gaps; conduct emission modeling and inventory scenario analyses to assess costs and emission benefits of different strategies; assess the air quality benefits of the strategies in low income and disadvantaged communities, and provide technical support upon implementation. The other PY of staff would be needed to develop a comprehensive strategy for the deployment of medium duty and heavy-duty vehicles to reduce GHG and criteria emissions. Total costs are estimated to be approximately $400,000 annually.

Costs to the State Energy Resources Conservation and Development Commission and the Governor’s Office of Business and Economic Development to consult with CARB in the update to the Mobile Source Strategy are not expected to be significant.

-- END --

SENATE COMMITTEE ON TRANSPORTATION

Senator Jim Beall, Chair

2019 - 2020 Regular

Bill No: SB 44 Hearing Date: 4/23/2019

SUBJECT: Medium- and heavy-duty vehicles: comprehensive strategy

DIGEST: This bill requires the Air Resources Board (ARB) to develop a comprehensive strategy to reduce greenhouse gas and criteria pollutant emissions from medium- and heavy-duty vehicles, as specified.

ANALYSIS:

Existing federal law:

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.

Existing state law:

1. Establishes 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.
   
2. Requires, under the California Global Warming Solutions Act of 2006 (also known as AB 32), ARB to (1) determine the 1990 statewide greenhouse gas (GHG) emissions level and approve a statewide GHG emissions limit that is equivalent to that level to be achieved by 2020; (2) ensure that statewide GHG emissions are reduced to at least 40% below the 1990 level by December 31, 2030 (i.e., SB 32; Chapter 249 of 2016); and (3) adopt regulations, until December 31, 2030, that utilize market-based compliance mechanisms to reduce GHG emissions (i.e., the cap-and-trade program).
   

This bill:

1. Requires ARB, no later than January 1, 2021, to develop a comprehensive strategy for the deployment of medium-duty and heavy-duty vehicles in the state to meet the following:
   
   1. Bringing the state into compliance with federal ambient air quality standards.
      
   2. A reduction of motor vehicle GHG emissions by 40% by 2030.
      
   3. A reduction of motor vehicle GHG emissions by 80% by 2050.
      
2. Requires ARB to seek to maximize the reduction of criteria air pollutants and identify policies that provide advantages to fleets that reduce GHG emissions early.
   
3. Requires ARB to establish a process to identify medium-duty and heavy-duty vehicle segments that can more quickly reduce motor vehicle emissions.
   
4. Requires ARB to implement additional emissions reduction strategies and motor vehicle deployment goals, as specified.
   

COMMENTS:

1. Author Statement. Decades after California passed the Clean Air Act; diesel trucks continue to spew toxic air pollution into California’s communities. Fossil diesel-fueled trucks are responsible for 33 percent of statewide oxides of nitrogen (NOx) emissions annually, 20 percent of statewide GHG emissions, and emit more particulate matter than all of the state’s power plants combined.
   
   It is imperative that California work to dramatically cut reliance on fossil diesel fuel. That will require planning for how the medium- and heavy-duty vehicle sectors can transition away from this fuel over time, and providing stable market incentives to help the industry shift away from dirty technology with minimal economic burden.”
   
2. Familiar Goals. The emission reduction goals of this bill are the same percentages on the same timeframe as that established by SB 32 (Chapter 249 of 2016) for the state as a whole. There is some concern that the goal language in the bill is a little unclear and could be interpreted as applying the entire GHG reduction for vehicles to the heavy-duty vehicle sector. There is also some concern that setting a specific goal for heavy-duty vehicles is not evidence-based. The author will propose amendments in the bill to address these issues by substituting the following language:

(a) No later than January 1, 2021, the state board shall update the Mobile Source Reduction Strategy to include a comprehensive strategy for the deployment of on- and off-road medium- and heavy-duty vehicles in the state to meet the following:

(1) Bringing the state into compliance with federal ambient air quality standards.

(2) A reduction of motor vehicle greenhouse gas emissions by 40 percent by 2030.

(3) A reduction of motor vehicle greenhouse gas emissions by 80 percent by 2050.

(2) Reduce motor vehicle greenhouse gas emissions from the medium- and heavy-duty vehicle sector. The Board shall set goals, based on the state’s overarching emissions reduction goals established in Health and Safety Code 38566, technological feasibility, cost effectiveness, and other relevant factors, for reducing emissions from medium- and heavy-duty vehicles by 2030 and 2050.

1. It is Not Just Technology. The focus of this bill is to achieve GHG emission reductions through technology improvements in the powertrain, which mostly entails swapping internal combustion engines for zero- and near-zero emission drivetrains. However, as we have seen with light duty vehicles, emission reductions from the electrification of cars is not enough to meet our GHG reduction targets. We also need to figure out ways to use our vehicles less, such as through carpooling/shared rides, or having people live closer to where they work or switching out of cars into mass transit. In the context of medium- and heavy-duty vehicles we should also be looking at ways to use those vehicles less, for example by allowing vehicles to carry more (and therefore make fewer trips), substitution of different modes such as more rail and fewer trucks. These types of ideas may be outside of ARB’s regulatory authority. However, failing to consider these ideas is a significant lost opportunity for meaningful GHG reductions.
2. It is Not Free. Developing and deploying new powertrain technology will not be cheap. Higher costs for trucking result in higher prices for consumers. The question is whether the benefits exceed the costs. The author’s intent is to acquire multi-year commitments of Greenhouse Gas Reduction Fund revenues, which are derived from California’s Cap and Trade program, to provide appropriate incentives.
3. Looking for a Breakthrough. The bill requires a “beachhead market analysis”. As used by ARB, a beachhead market analysis looks at technologies and applications that have strong potential to transfer and spread to broader applications.
4. Author Amendments. The author is proposing minor revisions to the findings and declarations in the bill to account for advances made in diesel technology and to recognize potential non-technological solutions, which can reduce diesel emissions.
5. Double Referral. This bill was heard in the Environmental Quality Committee on April 10, 2019 and approved 5-2.

Related Legislation:

SB 210 (Leyva, 2019) — directs the California Air Resources Board (ARB) to work in coordination with multiple state agencies in order to develop and implement a Heavy-Duty Inspection and Maintenance Program for non-gasoline, heavy-duty, on-road trucks. This bill is pending in the Senate Transportation Committee.

SB 216 (Galgiani, 2019) — specifies that a heavy-duty truck exchange is an eligible project for funding under the Carl Moyer Memorial Qir Quality Standards Attainment Program. This bill is pending in the Senate Transportation Committee.

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

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

April 17, 2019.)

SUPPORT:

American Lung Association

Biodico

Bioenergy Association of California

Breast Cancer Prevention Partners

California League of Conservation Voters

California Natural Gas Vehicle Coalition

CALSTART

Center for Climate Change & Health

Central Valley Air Quality Coalition

Clean Energy

Coalition for Clean Air

Coalition for Renewable Natural Gas

CR&R Environmental Services

Environment California

Fossil Free California

Friends Committee on Legislation of California

Move LA

Nextgen California

Oberon Fuels

Pacific Ethanol, Inc.

Regional Asthma Management & Prevention

Sierra Club California

Union of Concerned Scientists

Western Propane Gas Association

350 Bay Area Action

350 Silicon Valley

OPPOSITION:

Agricultural Energy Consumers Association

Associated General Contractors

California Chamber of Commerce

California Business Properties Association

California Forestry Association

California Manufacturers and Technology Association

California Poultry Federation

-- END --

SENATE COMMITTEE ON TRANSPORTATION

Senator Jim Beall, Chair

2019 - 2020 Regular

Bill No: SB 44 Hearing Date: 4/23/2019

SUBJECT: Medium- and heavy-duty vehicles: comprehensive strategy

DIGEST: This bill requires the Air Resources Board (ARB) to develop a comprehensive strategy to reduce greenhouse gas and criteria pollutant emissions from medium- and heavy-duty vehicles, as specified.

ANALYSIS:

Existing federal law:

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.

Existing state law:

1. Establishes 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.
   
2. Requires, under the California Global Warming Solutions Act of 2006 (also known as AB 32), ARB to (1) determine the 1990 statewide greenhouse gas (GHG) emissions level and approve a statewide GHG emissions limit that is equivalent to that level to be achieved by 2020; (2) ensure that statewide GHG emissions are reduced to at least 40% below the 1990 level by December 31, 2030 (i.e., SB 32; Chapter 249 of 2016); and (3) adopt regulations, until December 31, 2030, that utilize market-based compliance mechanisms to reduce GHG emissions (i.e., the cap-and-trade program).
   

This bill:

1. Requires ARB, no later than January 1, 2021, to develop a comprehensive strategy for the deployment of medium-duty and heavy-duty vehicles in the state to meet the following:
   
   1. Bringing the state into compliance with federal ambient air quality standards.
      
   2. A reduction of motor vehicle GHG emissions by 40% by 2030.
      
   3. A reduction of motor vehicle GHG emissions by 80% by 2050.
      
2. Requires ARB to seek to maximize the reduction of criteria air pollutants and identify policies that provide advantages to fleets that reduce GHG emissions early.
   
3. Requires ARB to establish a process to identify medium-duty and heavy-duty vehicle segments that can more quickly reduce motor vehicle emissions.
   
4. Requires ARB to implement additional emissions reduction strategies and motor vehicle deployment goals, as specified.
   

COMMENTS:

1. Author Statement. Decades after California passed the Clean Air Act; diesel trucks continue to spew toxic air pollution into California’s communities. Fossil diesel-fueled trucks are responsible for 33 percent of statewide oxides of nitrogen (NOx) emissions annually, 20 percent of statewide GHG emissions, and emit more particulate matter than all of the state’s power plants combined.
   
   It is imperative that California work to dramatically cut reliance on fossil diesel fuel. That will require planning for how the medium- and heavy-duty vehicle sectors can transition away from this fuel over time, and providing stable market incentives to help the industry shift away from dirty technology with minimal economic burden.”
   
2. Familiar Goals. The emission reduction goals of this bill are the same percentages on the same timeframe as that established by SB 32 (Chapter 249 of 2016) for the state as a whole. There is some concern that the goal language in the bill is a little unclear and could be interpreted as applying the entire GHG reduction for vehicles to the heavy-duty vehicle sector. There is also some concern that setting a specific goal for heavy-duty vehicles is not evidence-based. The author will propose amendments in the bill to address these issues by substituting the following language:
3. It is Not Just Technology. The focus of this bill is to achieve GHG emission reductions through technology improvements in the powertrain, which mostly entails swapping internal combustion engines for zero- and near-zero emission drivetrains. However, as we have seen with light duty vehicles, emission reductions from the electrification of cars is not enough to meet our GHG reduction targets. We also need to figure out ways to use our vehicles less, such as through carpooling/shared rides, or having people live closer to where they work or switching out of cars into mass transit. In the context of medium- and heavy-duty vehicles we should also be looking at ways to use those vehicles less, for example by allowing vehicles to carry more (and therefore make fewer trips), substitution of different modes such as more rail and fewer trucks. These types of ideas may be outside of ARB’s regulatory authority. However, failing to consider these ideas is a significant lost opportunity for meaningful GHG reductions.
4. It is Not Free. Developing and deploying new powertrain technology will not be cheap. Higher costs for trucking result in higher prices for consumers. The question is whether the benefits exceed the costs. The author’s intent is to acquire multi-year commitments of Greenhouse Gas Reduction Fund revenues, which are derived from California’s Cap and Trade program, to provide appropriate incentives.
5. Looking for a Breakthrough. The bill requires a “beachhead market analysis”. As used by ARB, a beachhead market analysis looks at technologies and applications that have strong potential to transfer and spread to broader applications.
6. Author Amendments. The author is proposing minor revisions to the findings and declarations in the bill to account for advances made in diesel technology and to recognize potential non-technological solutions, which can reduce diesel emissions.
7. Double Referral. This bill was heard in the Environmental Quality Committee on April 10, 2019 and approved 5-2.

Related Legislation:

SB 210 (Leyva, 2019) — directs the California Air Resources Board (ARB) to work in coordination with multiple state agencies in order to develop and implement a Heavy-Duty Inspection and Maintenance Program for non-gasoline, heavy-duty, on-road trucks. This bill is pending in the Senate Transportation Committee.

SB 216 (Galgiani, 2019) — specifies that a heavy-duty truck exchange is an eligible project for funding under the Carl Moyer Memorial Qir Quality Standards Attainment Program. This bill is pending in the Senate Transportation Committee.

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

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

April 17, 2019.)

SUPPORT:

American Lung Association

Biodico

Bioenergy Association of California

Breast Cancer Prevention Partners

California League of Conservation Voters

California Natural Gas Vehicle Coalition

CALSTART

Center for Climate Change & Health

Central Valley Air Quality Coalition

Clean Energy

Coalition for Clean Air

Coalition for Renewable Natural Gas

CR&R Environmental Services

Environment California

Fossil Free California

Friends Committee on Legislation of California

Move LA

Nextgen California

Oberon Fuels

Pacific Ethanol, Inc.

Regional Asthma Management & Prevention

Sierra Club California

Union of Concerned Scientists

Western Propane Gas Association

350 Bay Area Action

350 Silicon Valley

OPPOSITION:

Agricultural Energy Consumers Association

Associated General Contractors

California Chamber of Commerce

California Business Properties Association

California Forestry Association

California Manufacturers and Technology Association

California Poultry Federation

-- END --

SENATE COMMITTEE ON ENVIRONMENTAL QUALITY

Senator Allen, Chair

2019 - 2020 Regular

Bill No: SB 44

SUBJECT: Medium-duty and heavy-duty vehicles: comprehensive strategy

DIGEST: This bill requires the Air Resources Board to develop a comprehensive strategy to reduce greenhouse gas and criteria pollutant emissions from medium- and heavy-duty vehicles, as specified, and attempts to require a future Legislature, in the annual budget act, to appropriate 10% of the annual proceeds of the Greenhouse Gas Reduction Fund for specified fiscal years and purposes.

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 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. Requires, under the California Global Warming Solutions Act of 2006 (also known as AB 32), ARB to (1) determine the 1990 statewide greenhouse gas (GHG) emissions level and approve a statewide GHG emissions limit that is equivalent to that level to be achieved by 2020; (2) ensure that statewide GHG emissions are reduced to at least 40% below the 1990 level by December 31, 2030 (i.e., SB 32); and (3) adopt regulations, until December 31, 2030, that utilize market-based compliance mechanisms to reduce GHG emissions (i.e., the cap-and-trade program). (HSC §38500 et seq.)
   
3. Establishes the Greenhouse Gas Reduction Fund (GGRF) in the State Treasury, requires all moneys, except for fines and penalties, collected pursuant to a market-based mechanism be deposited in the fund. (Government Code §16428.8)
   
4. Appropriates, continuously, 60% of annual GGRF revenues (with the remaining 40% reserved for annual appropriation by the Legislature) as follows: 10% for the Transit and Intercity Rail Capital Program, 5% for the Low Carbon Transit Operations Program, 20% for the Affordable Housing and Sustainable Communities Program, and 25% for the High-Speed Rail Authority. (HSC §39719)
   

This bill:

1. Makes findings and declarations.
   
2. Requires ARB, no later than January 1, 2021, to develop a comprehensive strategy for the deployment of medium-duty and heavy-duty vehicles in the state to meet the following:
   
   1. Bringing the state into compliance with federal ambient air quality standards.
      
   2. A reduction of motor vehicle GHG emissions by 40% by 2030.
      
   3. A reduction of motor vehicle GHG emissions by 80% by 2050.
      
3. Requires ARB, among other things, as a part of the comprehensive strategy, to seek to maximize the reduction of criteria air pollutants and identify policies that provide advantages to fleets that reduce GHG emissions early.
   
4. Requires ARB to establish a process to identify medium-duty and heavy-duty vehicle segments that can more quickly reduce motor vehicle emissions, consistent with ARB’s three-year heavy-duty vehicle investment strategy required pursuant to the California Clean Truck, Bus, and Off-Road Vehicle and Equipment Technology Program, as specified.
   
5. Requires ARB to implement additional emissions reduction strategies and motor vehicle deployment goals, as specified.
   
6. Attempts to require a future Legislature, in the annual budget act, to appropriate 10% of the annual proceeds of GGRF, beginning in the 2019–20 fiscal year through the 2024–25 fiscal year, to ARB for programs established pursuant to the California Clean Truck, Bus, and Off-Road Vehicle and Equipment Technology Program to support the commercialization and deployment of medium-duty and heavy-duty vehicles that reduce GHG emissions.

Background

1. 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, and 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 NAAQS.
   
2. State Implementation Plan (SIP). As noted above, the FCAA requires areas with unhealthy levels of ozone, PM, carbon monoxide, nitrogen dioxide, and sulfur dioxide to develop a SIP. SIPs are comprehensive plans that describe how an area will attain NAAQS. The 1990 amendments to the FCAA set deadlines for attainment based on the severity of an area’s air pollution problem.
   
   SIPs are not single documents. They are a compilation of new and previously submitted plans, programs (such as monitoring, modeling, permitting, etc.), district rules, state regulations, and federal controls. Many of California’s SIPs rely on the same core set of control strategies, including emission standards for cars and heavy trucks, fuel regulations, and limits on emissions from consumer products. State law makes ARB the lead agency for all purposes related to the SIP. Local air districts and other agencies, such as the Bureau of Automotive Repair and the Department of Pesticide Regulation, prepare SIP elements and submit them to ARB for review and approval.
   
   ARB forwards SIP revisions to the United States Environmental Protection Agency (USEPA) for approval and publication in the Federal Register. The Code of Federal Regulations Title 40, Chapter I, Part 52, Subpart F, Section 52.220 lists all of the items which are included in the California SIP. At any one time, several California submittals may be pending USEPA approval. Once a SIP is approved and published in the Code of Federal Regulations, it is federal law and cannot be changed without federal approval.
   
3. Mobile Source Strategy. Mobile sources—cars, trucks, and a myriad of off-road equipment—and the fossil fuels that power them are the largest contributors to the formation of ozone, PM2.5, diesel PM, and GHG emissions in California. They are responsible for approximately 80% of smog-forming NOx emissions, 90% of diesel PM emissions, and nearly 50% of GHG emissions. Given this contribution, significant cuts in pollution from these sources are needed in order for the state to achieve our air quality and climate change goals.
   
   On May 16, 2016, ARB released an updated Mobile Source Strategy that demonstrates how California can simultaneously meet air quality standards, achieve GHG emission reduction targets, decrease health risk from transportation emissions, and reduce petroleum consumption over the next fifteen years. The Mobile Source Strategy was included in the SIP. According to ARB:
   
   “For passenger vehicles, the strategy calls for increasing the penetration of plug-in hybrid electric vehicles (PHEV) and non-combustion zero-emission vehicles (ZEV) including battery-electric (BEV) and hydrogen fuel cell electric vehicles (FCEV) by over 50 percent compared to current programs. The electrical grid and hydrogen supply supporting these electric vehicles will need to represent 50 percent renewable energy generation. A large portion of the liquid fuels for combustion engine vehicles will also need to be sourced from renewable feedstock.
   
   “For heavy-duty vehicles, California is laying the groundwork for reducing emissions from the heavy-duty truck sector on multiple fronts: cleaner internal combustion engines, renewable fuels, and zero-emission technology. The strategy calls for internal combustion engine technology that is effectively 90 percent cleaner than today’s current standards, with clean, renewable fuels comprising half the fuels burned. Cleaner engine standards will be especially important for interstate trucks given the status of technology development and infrastructure requirements. These efforts will be complemented by introduction of zero-emission technologies in heavy-duty applications that are suited to early adoption of ZEV technologies. Applications such as last mile delivery, transit and shuttle buses, and other small vocational trucks offer the potential for increasing use of ZEV technologies. Actions to promote ZEVs in these heavy-duty applications are underway and are important to further reduce regional and near-source toxics exposure as well as foster the development of these technologies so they become suitable for broader use in the future. Off-road equipment will need to reflect this same type of transformation to a mix of zero and near-zero technologies operating on renewable fuels.”
   
4. Implementing AB 32: The California Global Warming Solutions Act of 2006. In 2006, AB 32 (Núñez and Pavley, Chapter 488, Statutes of 2006) was signed into law, which requires ARB to determine the 1990 statewide GHG emission level and achieve a reduction in GHG emissions to that level by 2020. In addition to calling on ARB to inventory GHGs in California (including carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride) and approve the aforementioned statewide GHG emissions limit.
   
   AB 32 also requires ARB to (1) implement regulations that achieve the maximum technologically feasible and cost-effective reduction of GHG emissions, (2) identify and adopt regulations for discrete early-action measures, and (3) prepare and approve a scoping plan, to be updated at least once every five years, to achieve the maximum technologically feasible and cost-effective reduction of GHG emissions. Due to a variety of factors, most importantly being the great recession that started in 2008, California will achieve the goals of AB 32 in advance of the 2020 deadline.
   
   In 2016, the Legislature approved, and the Governor signed, SB 32 (Pavley, Chapter 249, Statutes of 2016), which requires ARB to ensure that statewide GHG emissions are reduced to at least 40% below the 1990 level by December 31, 2030. This new goal is known as the SB 32 target.
   
   The following year, AB 398 (E. Garcia, Chapter 135, Statutes of 2017) was enacted to extend the authority of ARB to implement a cap-and-trade program to reduce GHG emissions throughout the state. AB 398 specified a variety of requirements for the post-2020 cap-and-trade program, most notable are (1) requiring the banking of allowances from the current cap-and-trade program into the post-2020 program, (2) requiring ARB to evaluate and address concerns related to overallocation of available allowances in the program for years 2021 to 2030, and (3) the adoption of a price ceiling in the program, at which point an unlimited number of allowances must be made available for purchase.
   
5. Cap-and-Trade. The original cap-and-trade program was recommended by ARB as a central approach to flexibly and iteratively reduce emissions over time. Pursuant to legal authority under AB 32, ARB adopted cap-and-trade regulations and those regulations were approved on December 13, 2011.
   
   Beginning on January 1, 2013, the cap-and-trade regulation sets a firm, declining cap on total GHG emissions from sources that make up approximately 80% of all statewide GHG emissions. Sources included under the cap are termed “covered entities.” The cap is enforced by requiring each covered entity to surrender one “compliance instrument” for every emissions unit (i.e., metric ton of carbon dioxide equivalent or MTCO₂e) that it emits at the end of a compliance period.
   
   Two forms of compliance instruments are used: allowances and offsets. Allowances are generated by the state in an amount equal to the cap and may be “banked” (i.e., allowing current allowances to be used for future compliance). An offset is a credit for a real, verified, permanent, and enforceable emission reduction project from a source outside a capped sector (e.g., a certified carbon-storing forestry project). Some fraction of allowances are allocated freely to covered entities, a small portion are set aside as part of an allowance price-containment reserve (a cost-containment mechanism that releases additional allowances into the market to slow price increases), and the rest are auctioned off quarterly.
   
   Since November 2012, ARB has conducted eight California-only, 13 joint California-Québec, two joint California-Québec-Ontario, and then another three joint California-Québec cap-and-trade auctions (Ontario withdrew from the joint cap-and-trade program after a change in their political leadership). To date, approximately $10.3 billion has been generated by the cap-and-trade auctions and deposited into the GGRF.
   
6. Use of Cap-and-Trade Auction Revenue. State law specifies that the auction revenues must be used to facilitate the achievement of measurable GHG emissions reductions and outlines various categories of allowable expenditures. Statute further requires the Department of Finance, in consultation with ARB and any other relevant state agency, to develop a three-year investment plan for the auction proceeds, which are deposited in the GGRF. ARB is required to develop guidance for administering agencies on reporting and quantifying methodologies for programs and projects funded through the GGRF to ensure the investments further the regulatory purposes of AB 32.
   
   Several bills have provided legislative direction for the expenditure of cap-and-trade auction proceeds to help California achieve its climate goals and provide benefits to disadvantaged communities (see Related/Prior Legislation).
   
7. Legal Consideration of Cap-and-Trade Auction Revenues. Policy committees in both the Senate and Assembly have written about the legal constraints of spending GGRF moneys for various purposes; those constraints include Proposition 13 (1978), Proposition 26 (2010), and the Third District Court of Appeal decision in California Chamber of Commerce v. State Air Resources Bd., the latter of which is the current controlling determination.
   
   The Third District Court of Appeal opinion held “that the auction sales do not equate to a tax” explaining that “the hallmarks of a tax are: 1) that it is compulsory; and 2) that the payor receives nothing of particular value for payment of the tax, that is, the payor receives nothing of specific value for the tax itself. Contrary to plaintiffs’ view, the purchase of allowances is a voluntary decision driven by business judgments as to whether it is more beneficial to the company to make the purchase than to reduce emissions …these twin aspects of the auction system, voluntary participation and purchase of a specific thing of value, preclude a finding that the auction system has the hallmarks of a tax.”
   
   The appellate court also found that “the purchase of emissions allowances, whether directly from the Board at auction or on the secondary market, is a business driven decision, not a governmentally compelled decision [and] unlike any other tax … the purchase of an emissions allowance conveys a valuable property interest—the privilege to pollute California’s air—that may be freely sold or traded on the secondary market.”
   
   As a result, the appellate court found that “the Sinclair Paint test is not applicable [to the cap-and-trade program], because the auction system is unlike other governmental charges that may raise the “tax or fee” question resolved thereby. The system is the voluntary purchase of a valuable commodity and not a tax under any test.”
   
8. Legislative Counsel Opinions. In a written opinion on March 20, 2018, Legislative Counsel opined on the lawful appropriation of GGRF moneys in light of the recently approved AB 398 (E. Garcia, Chapter 135, Statutes of 2017). Legislative Counsel determined that AB 398 satisfied two parts of the three part “benefit or privilege exemption” test to determine whether a charge is a fee or a tax (a fee requires a lower vote threshold to pass and puts a special trust on the money, which then cannot be used for general fund purposes). In determining that AB 398 passed the first two parts of the test, Legislative Counsel wrote, “because the payment of the cost to purchase an emissions allowance confers a valuable property interest that consists of the privilege to pollute air, we conclude that the cap-and-trade charge is imposed for the granting of a privilege and therefore satisfies,” part one of the test and part two is satisfied because, “under the cap-and-trade program, the privilege of being a large emitter of GHGs ‘is not provided to those not charged.’”
   
   As for whether the requirement that a charge not exceed the reasonable costs to the State of granting the privilege to the payer, Legislative Counsel wrote, “in determining whether a charge was imposed for revenue purposes, courts generally look to the authorized uses of those funds. In particular, the generation of general fund revenue signals that a charge was imposed for revenue purposes and is therefore a tax … we note that a portion of the revenue from the auction of emission allowances [under AB 398] is required to be transferred from [GGRF] to the General Fund on an annual basis … in addition, the transfers from the GGRF to the General Fund must be made in amounts identical to the amount of revenue loss to the state attributable to the tax exemptions provided or extended by AB 398, some of which do not bear a reasonable relationship to reducing GHG … accordingly, it is our opinion that AB 398 imposed a tax pursuant to article XIIIA, section 3.”
   
   As for the nature of cap-and-trade auction revenues, Legislative counsel wrote, “In the context of AB 398, it is our view that the Legislature changed the character of the cap-and-trade charge from a fee to a tax by granting new authority for the cap-and-trade charge and changing the purposes for which the revenue from the charge may be appropriated to incorporate General Fund expenditures. Moreover, because the bill received a two-thirds vote in each house of the Legislature, it is a validly enacted tax.
   
   As for when the conversion from special fund to general fund moneys occurs, Legislative Counsel wrote, “by granting new authority for the charge for the period of January 1, 2021, through December 31, 2030 … [and] because this new authority does not commence until January 1, 2021 … it is our opinion that the operative date of the tax imposed by AB 398 is January 1, 2021, when the regulations that make programmatic changes to the cap-and-trade program become operative.”
   
   With regard to revenues raised prior to January 1, 2021, Legislative Counsel determined, “that the revenue generated by the cap-and-trade charge before January 1, 2021, is special fund revenue that may be expended only for purposes that reasonably relate to the reduction of GHG emissions. On and after January 1, 2021, the revenue generated by the cap-and-trade charge constitutes General Fund revenue that may be appropriated for any lawful purpose.” (Emphasis added.)
   
   Finally, a follow-up opinion from Legislative Counsel written on October 11, 2018 explained that “Proposition 98 was a constitutional and statuary initiative adopted at the November 8, 1988, statewide general election … to establish a minimum level of state funding for school districts and community colleges [that] provides the formulas for determining the minimum amount of school funding for public education required to be appropriated each fiscal year.” Additionally, commonly referred to as the Gann Limit, Legislative Counsel explained, “related constitutional provisions require the allocation of 50 percent of state revenues in excess of the state appropriations limit … to elementary, high school, and community college districts.” Legislative Counsel concluded, “that revenue generated by the cap-and-trade charge on and after January 1, 2021, would be included within the calculation of the state’s minimum school funding obligation pursuant to Proposition 98” and “that nonexempt appropriations of revenue generated by the cap-and-trade charge on and after January 1, 2021, would be subject to the [Gann Limit].” (Emphasis added.)
   

Comments

1. Purpose of Bill. According to the author, “Decades after California passed the Clean Air Act, diesel trucks continue to spew toxic air pollution into California’s communities. Fossil diesel-fueled trucks are responsible for 33 percent of statewide oxides of nitrogen (NOx) emissions annually, 20 percent of statewide GHG emissions, and emit more particulate matter than all of the state’s power plants combined.
   
   “Since 1998, the California Air Resources Board (CARB) has recognized particulate matter as a toxic air contaminant based on the relationship between diesel exhaust and lung cancer. California’s air is particularly plagued with these pollutants – the state has 7 of the 10 geographic areas with the worst particulate matter pollution, according to the American Lung Association. Children are at particular risk, because they breathe faster than adults and therefore suffer from increased exposure to toxic air pollutants.
   
   “For these reasons, it is imperative that California work to dramatically cut reliance on fossil diesel fuel. That will require planning for how the medium- and heavy-duty vehicle sectors can transition away from this fuel over time, and providing stable market incentives to help the industry shift away from dirty technology with minimal economic burden.”
   
2. Lawful use of GGRF moneys. As noted in the background, Legislative Counsel has opined that until January 1, 2021, it is unlawful for the Legislature to use GGRF moneys for purposes that are not reasonably related to the reduction of GHG emissions. Because the requirements of SB 44 are directly related to the reduction of GHG emissions, this is a lawful use of GGRF moneys. After January 1, 2021, GGRF moneys may be spent for any lawful purpose without the requirement that the expenditure be reasonably related to the reduction of GHG emissions.
   
3. Tying the hands of a future Legislature. There is a legal principle that a current Legislature may not tie the hands of a future Legislature. In 1941, as a result of United Milk Producers v. Cecil (47 Cal. App. 2d 758, 764-765), a California appellate court determined:
   
   “The legislature cannot bind a future legislature … It cannot declare in advance the intent of subsequent legislatures or the effect of subsequent legislation upon existing statutes.”
   
   SB 44 currently attempts to declare in advance that future Legislatures will appropriate 10% of GGRF through fiscal year 2024-25 as a part of their annual budget act. Under the principle in United Milk Producers v. Cecil , the only way to accomplish that goal lawfully would be to amend HSC §39719 where the continuous appropriations of GGRF moneys are made. Were that provision to be included in SB 44, however, Legislative Counsel would key the bill as requiring a two-thirds vote since GGRF is General Fund money starting January 1, 2021 and bills that make appropriations from the General Fund require a two-thirds vote of both houses of the Legislature.
   
   As such, the Committee may wish to amend section 3 of the bill to read:
   
   Upon appropriation by the Legislature, moneys, including, but not limited to, moneys from the Greenhouse Gas Reduction Fund created pursuant to Section 16428.8 of the Government Code, shall be available to the state board for programs established pursuant to the California Clean Truck, Bus, and Off-Road Vehicle and Equipment Technology Program established pursuant to Section 39719.2 of the Health and Safety Code.
   
   Additionally, technical and clarifying amendments are needed.
   
4. Cost effectiveness considerations. As noted in the background, ARB already has a Mobile Source Strategy that contains plans for reducing the air pollution and climate change impacts from all vehicles in the state, including medium- and heavy-duty vehicles. Rather than require ARB to create an entirely new strategy, perhaps a more cost-effective approach would be for ARB to make the changes SB 44 calls for to their existing Mobile Source Strategy.
   
   As this bill moves forward, the author should work with ARB to incorporate the provisions of this bill into ARB’s existing efforts on mobile sources, rather than create an unnecessarily costly and duplicative strategy.
   

Related/Prior Legislation

SB 535 (de León, Chapter 830, Statutes of 2012) requires that 25% of auction revenue be used to benefit disadvantaged communities and requires that 10% of auction revenue be invested in disadvantaged communities.

AB 1532 (J. Pérez, Chapter 807, Statutes of 2012) directs the Department of Finance to develop and periodically update a three-year investment plan that identifies feasible and cost-effective GHG emission reduction investments to be funded with cap-and-trade auction revenues and specifies that reduction of GHG emissions through strategic planning and development of sustainable infrastructure projects, are eligible investments of GGRF.

SB 1018 (Committee on Budget and Fiscal Review, Chapter 39, Statutes of 2012) created the GGRF, into which all auction revenue is to be deposited. The legislation requires that before departments can spend moneys from the GGRF, they must prepare a record specifying: (1) how the expenditures will be used, (2) how the expenditures will further the purposes of AB 32 (Núñez and Pavley, Chapter 488, Statutes of 2006), (3) how the expenditures will achieve GHG emission reductions, (4) how the department considered other non-GHG-related objectives, and (5) how the department will document the results of the expenditures.

SB 862 (Committee on Budget and Fiscal Review, Chapter 36, Statutes of 2014) established a long-term cap-and-trade expenditure plan by continuously appropriating portions of the funds for designated programs or purposes. The legislation appropriates 25% for the state’s high-speed rail project, 20% for affordable housing and sustainable communities grants, 10% to the Transit and Intercity Rail Capital Program, and 5% for low-carbon transit operations. The remaining 40% is available for annual appropriation by the Legislature.

AB 1550 (Gomez, Chapter 369, Statutes of 2016) requires a minimum of 25% of GGRF moneys be spent on projects located within and benefiting disadvantaged communities and an additional minimum of 10% of GGRF moneys be spent on projects that benefit low-income households or are within, and benefit low-income communities.

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 Committee on Transportation.

SOURCE:

Author

SUPPORT:

350 Bay Area

American Lung Association

Biodico

Bioenergy Association of California

CR&R Environmental Services

California League of Conservation Voters

California Natural Gas Vehicle Coalition

CALSTART

Center for Climate Change and Health

Central Valley Air Quality (CVAQ) Coalition

Clean Energy

Coalition for Clean Air

Environment California

Fossil Free California

Friends Committee on Legislation of California

Move LA

NextGen California

Oberon Fuels

Pacific Ethanol

Regional Asthma Management and Prevention (RAMP)

Sierra Club California

Union of Concerned Scientists

Western Propane Gas Association

OPPOSITION:

California Chamber of Commerce

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