BILL ANALYSIS Ó AB 1176 Page 1 ASSEMBLY THIRD READING AB 1176 (Perea) As Amended June 1, 2015 2/3 vote. Urgency ------------------------------------------------------------------- |Committee |Votes |Ayes |Noes | | | | | | | | | | | |----------------+------+---------------------+---------------------| |Transportation |15-1 |Frazier, Achadjian, |Baker | | | |Bloom, Chu, Daly, | | | | |Dodd, | | | | | | | | | | | | | | |Eduardo Garcia, | | | | |Gomez, Kim, Linder, | | | | |Medina, Melendez, | | | | |Nazarian, O'Donnell, | | | | |Santiago | | | | | | | |----------------+------+---------------------+---------------------| |Appropriations |13-0 |Gomez, Bigelow, | | | | |Bonta, Calderon, | | | | |Daly, Eggman, | | | | |Eduardo Garcia, | | | | |Gordon, Holden, | | | | |Quirk, Rendon, | | | | |Weber, Wood | | | | | | | | | | | | AB 1176 Page 2 ------------------------------------------------------------------- SUMMARY: Creates the Advanced Low-Carbon Diesel Fuels Access Program, administered by the State Energy Resources Conservation and Development Commission (Commission) to fund advanced low-carbon diesel fueling infrastructure projects in disadvantaged communities. Specifically, this bill: 1)Makes declarations regarding the disproportional air quality impacts experienced by disadvantaged communities as a result of heavy freight traffic moving along major transportation corridors; and states the Legislature's intent to direct resources toward those communities to provide economic and health benefits. 2)Defines a variety of terms. 3)Creates the Advanced Low-Carbon Diesel Fuels Access Program (Program) to be administered by the Commission, in consultation with the Air Resources Board (ARB) to reduce greenhouse gas (GHG) emissions of diesel motor vehicles by providing funding assistance for projects that expand advanced low-carbon diesel fueling infrastructure in disadvantaged communities. 4)Provides that the Program be funded from the Greenhouse Gas Reduction Fund (GGRF), established by AB 32 (Núñez), Chapter 488, Statutes of 2006, upon appropriation by the Legislature. 5)Requires the Commission, on or before March 1, 2016, to complete the following: a) Develop implementation guidelines for the Program that AB 1176 Page 3 ensure focus on communities with the greatest impact from vehicular air pollution; and, b) Select the disadvantaged communities to receive Program funds, in consultation with the California Environmental Protection Agency (CalEPA). 6)Requires that the Commission give priority to projects that provide quantifiable benefits to disadvantaged communities, demonstrate co- or multi-benefits, leverage additional monies, provide immediate benefits, and include marketing, education and outreach strategies designed to increase effectiveness. 7)Prohibits the Program from being used to fund projects undertaken pursuant to state, federal, or local laws. 8)Authorizes the Commission to reprioritize Alternative and Renewable Fuel and Vehicle Technology Program (ARFVTP) contracts and extend them by two years if Program requirements are met and if the project directly benefits disadvantaged communities or is located within a disadvantaged community. 9)Makes related, technical amendments. 10)Includes an urgency clause. FISCAL EFFECT: According to the Assembly Appropriations Committee, ongoing CEC administrative costs of around $400,000 for three positions to drafting program guidelines, implementing a rulemaking, reviewing, awarding and monitoring grants, and working with grantees and recipient communities. AB 1176 Page 4 COMMENTS: Approximately 40% of emissions generated in California can be attributed to the transportation sector. As a result, California is making a concerted effort to increase the use of alternative fuels to help reduce GHG emissions and other toxic air pollutants associated with conventional petroleum-based fuels. A number of legislative measures and regulations have targeted at increasing the use of renewable fuels including. Specifically, AB 1007 (Pavley), Chapter 371, Statutes of 2005, required ARB and the Commission to develop a plan to increase alternative fuels use in California and AB 118 (Núñez), Chapter 750, Statutes of 2007, established the Air Quality Improvement program, administered by ARB in consultation with local air districts, to provide competitive grants to fund air quality improvement projects such as the development and deployment of alternative and renewable fuels and advanced transportation technologies. The Low Carbon Fuel Standard (LCFS), administered by ARB, established in 2007 through Exectuive Order S-01-07, uses a market-based, cap and trade, approach to lowering the GHG emissions from petroleum-based transportation fuels. The LCFS requires producers of petroleum-based fuels to reduce the carbon intensity of their products beginning with a 0.25% in 2011 and culminating in a 10% reduction in 2020. Petroleum importers, refiners, and wholesalers can either develop their own low carbon fuel products or buy LCFS credits from other companies that develop and sell low carbon fuel alternative fuels, such as biofuels, electricity, natural gas, and hydrogen. According to the author, the top 25% of disadvantaged communities are located in the San Joaquin Valley and these communities suffer from some of the poorest air quality in the state, oftentimes as a direct result of heavy freight traffic that moves along the nearby Interstate-5 (I-5) and State Route (SR) 99 corridors. The author also points out that other disadvantaged communities experiencing poor air quality as a result of freight movement also lie along the I-710 and SR 60 corridors near the Ports of Los Angeles and Long Beach. AB 1176 Page 5 The author believes that these communities could realize immediate, significant reductions in GHG and criteria pollutant emissions if the vehicles using these freight corridors had ready access to low-carbon fueling infrastructure. The sponsor of this bill, Propel Fuels, indicates that many low-carbon fuel options are available to consumers, often at lower price points than conventional diesel, but due to lack of available alternative fueling infrastructure, these low-carbon diesel options are underutilized. The sponsor contends that the only thing holding back widespread use of low-carbon diesel is lack of available infrastructure. Specifically, he contends that once low-carbon fuel use is more widespread, there will be immediate GHG reductions and commensurate air quality benefits. To substantiate this contention, the sponsor points to studies showing that renewable diesel can achieve up to 70% GHG reductions when compared to conventional diesel use. To make these low-carbon fuels more readily available along key freight corridors in and near disadvantaged communities, the author has introduced this bill which would create a program to fund the installation of low-carbon fueling stations. Specifically, low-carbon diesel fueling infrastructure would be located in disadvantaged communities that are disproportionately impacted by poor air quality, selected using the CalEnviroScreen census tract information created by CalEPA pursuant to SB 535 (De León), Chapter 830, Statutes of 2012. The alternative fueling stations would be located near conventional fueling stations and be available to the public. Despite being less costly and resulting in fewer emissions, the sponsor contends that low-carbon diesel is not widely available to consumers because existing fueling stations are under long-term contracts with fuel producers to dispense conventional, contracted fuels and these products utilize all of the station's fueling storage and dispensing infrastructure (tanks and dispensing AB 1176 Page 6 facilities). The sponsor notes that these contractual arrangements have made it difficult for low-carbon fuels to "break into" the conventional fueling marketplace. The Advanced Low-Carbon Diesel Fuels Access Program, created by this bill, would provide funding to allow for the installation of alternative low-carbon fueling infrastructure (tanks, pumps, fuel lines, etc.) at or near conventional fueling stations along major freight corridors thereby increasing consumer options for its use. Please see the policy committee analysis for full discussion of this bill. Analysis Prepared by: Victoria Alvarez / TRANS. / (916) 319-2093 FN: 0000707