BOARD MEETING DATE: July 11, 2008
AGENDA NO. 33

RECOMMENDED ACTIONS:

Receive, file this report, and adopt a position on the bill as specified in this letter.
 

Jane W. Carney, Chair
Legislative Committee

Attendance [Attachment 1] The Legislative Committee met on June 13, 2008. Committee Members Jane Carney (Chair) and Dr. Joseph Lyou were present. Committee Members Jan Perry, Tonia Reyes Uranga, and Dr. S. Roy Wilson were present via videoconference.

Legislative Overview

Oscar Abarca, Deputy Executive Officer, updated the committee on AQMD’s sponsored bill, SB 1646 (Padilla): Clean Fuels Reauthorization, which removes the sunset on AQMD’s authority to levy a $1 fee on motor vehicles registered to fund the Clean Fuels Program. The Assembly Transportation Committee passed SB 1646 and has referred the bill to the Assembly Appropriations Committee.

Mr. Abarca noted that the legislative pace has picked up in Sacramento. Many bills failed to pass their house of origin by the statutory deadline of May 30, 2008; however, many bills are now being gutted and amended in the second chamber. Public Affairs staff will continue to monitor these activities.

Senator Lowenthal's container fee bill, SB 974, has been inactive on the Assembly floor for almost a year, but Mr. Abarca reported that Senator Lowenthal is about to move the bill and his staff anticipates enough support to pass the bill. AQMD staff will work with the Senator’s office to review any amendment proposals to the bill.
 

Update on Federal Legislative Issues

Mark Kadesh, AQMD federal legislative consultant, presented the committee with a federal legislative update. The U.S. Senate Committee on Environment and Public Works (EPW) passed the Marine Vessel Emissions Reduction Act (MVERA). Mr. Kadesh is meeting with the EPW’s Staff Director about moving MVERA and locomotive legislation forward. Lastly, Senator Boxer’s staff wants to discuss potential field hearings with the AQMD to be held this summer and fall regarding transportation and air quality issues.
 

Recommended Position on Federal Bill S. 2555 (Boxer) Reducing Global Warming Pollution from Vehicles Act of 2008 [Attachment 2]

Mr. Abarca presented S. 2555 (Boxer) for the Committee’s consideration. The bill would amend the Clean Air Act to approve California’s application for a waiver of federal preemption of its motor vehicle emission standards. This bill would overturn the U.S. EPA Administrator’s recent denial of California’s application and permit California and other states to effectively control greenhouse gas emissions from motor vehicles. Staff recommended a position of SUPPORT citing the bill’s consistency with the AQMD’s guiding principles for legislation relating to climate change and additionally noted potential concurrent reductions in volatile organic compounds.
The Legislative Committee voted to support S. 2555 according to staff recommendations.
 

Update on State Legislative Issues

Will Gonzalez, AQMD state legislative consultant, reported on the state budget’s status. Although June 15, 2008 is the deadline to pass the budget, he noted that the Joint Legislative Budget Committee was beginning to meet. The challenge will be how to address a budget shortfall estimated to be between $15 to $20 billion. Mr. Gonzalez further noted that air quality programs seem to remain relatively unscathed, but there are two issues of some potential concern. First, there is a legislative proposal to transfer $40 million from the Bureau of Automotive Repair’s Vehicle Scrapping Program to the General Fund. These funds are under scrutiny because of the dissatisfaction with the Bureau’s pace of implementation. It is also thought that the funding can be backfilled by AB 118 (Nunez) Alternative Fuels and Vehicle Technologies: Funding Programs. Dr. Wallerstein emphasized the importance of backfilling funds because the State Implementation Plan (SIP) relies on the scrapping program for a portion of the mobile source emission reductions. If the funding is not backfilled, the emissions reductions will have to be made from other mobile source reductions. Second, Mr. Gonzalez noted that Proposition 42, which protects transportation funding from general fund borrowing, might be suspended soon. This will require further monitoring to determine whether this suspension might negatively affect projects in our region that the SIP relies on for additional emission reductions.

Mr. Gonzalez updated the committee on Proposition 1B. Funding for Proposition 1B is still being planned. Projects are in the contract stage with the California Department of Transportation. Mr. Gonzalez commented that the Trade Corridor Improvement Fund (TCIF) should not be affected by the budget.

Regarding solar energy legislation, Mr. Gonzalez stated that SB 1714 (Negrete McLeod) Renewable Electric Generation Facilities cleared the state Senate and will be heard in the Assembly Committee on Utilities and Commerce. Governor Schwarzenegger will soon announce major solar initiatives. On the downside, U.S. Congress did not approve the extension of the 30% federal tax credit for solar installation. This will have a negative impact on the solar industry if current programs expire at the end of this year.

Dr. Lyou requested a staff analysis of AB 118 (Nunez) Alternative Fuels and Vehicle Technologies: Funding Programs for the next Committee meeting.
 

Recommended Positions on the Following State Bills [Attachment 3]

SB 1762 (Perata) Advertising: Greenhouse Gas Credits

Jill Whynot, Director of Strategic Initiatives, presented SB 1762 for the Committee’s consideration. This bill would make it unlawful to advertise greenhouse gas (GHG) credits or emissions reductions unless specific demonstration and disclosure requirements are met. The bill would also require that documentation to support claims is maintained and that certain information would be publicly available. After discussion, staff’s revised recommendation is to support the bill with the following amendments only, with the third amendment at the request of Dr. Lyou:

1. Add local air districts and the California Climate Action Registry to those persons subject to specified demonstration and disclosure criteria.
2. Allow some flexibility with respect to criteria and toxic pollutants.
3. To ensure that the bill does not affect existing law relative to environmental advertising claims, the bill should include the following clarification language, "Nothing in this Division shall limit or restrict the applicability of Division 7, Part 3, Chapter 1, Article 7 of the Business and Professions Code, commencing with section 17580."

The Legislative Committee voted to support, if amended, according to staff’s revised recommendations.
 

AB 1851 (Nava) Greenhouse Gas Emissions: Sale of Voluntary Offsets

Jill Whynot presented AB 1851 for the Committee's consideration. This bill would require sellers of voluntary greenhouse gas (GHG) emissions offsets in California to ensure that the project generating the offset has been verified by an independent third-party that meets accreditation standards and protocols developed by CARB. In addition, the offsets sold would be required to be registered with a registry accredited by the state board. Staff recommended the following amendments:

1. Bill should explicitly state that local air district personnel can be accredited as verifiers.
2. Bill should explicitly recognize local air district registries and ensure that any offsets produced before adoption of standards are recognized.
3. Bill should enhance its penalty provisions to ensure sufficient deterrent against fraudulent activity.

Staff originally was prepared to recommend a position of support with amendments; however, given the latest information from the author's office, staff recommended a position of OPPOSE UNLESS AMENDED. Committee Chair Carney questioned whether a strong stance was required. Executive Officer Barry Wallerstein explained that AQMD staff and consultants, CAPCOA and he had met with the author's office and they had proven less than responsive to our legitimate concerns. He feared that the bill may still take a turn for the worse and staff needed the authority to oppose the bill if necessary.
The Legislative Committee voted to oppose the bill, unless amended according to staff's revised recommendations.
 

AB 2176 (Caballero) Energy: Federal Block Grants

Paul Wuebben presented this bill for the Committee's consideration. The bill would require the California Energy Commission to administer federal funds allocated to the state under a block-grant program for cost-effective energy efficiency measures included in the federal Energy Independence and Security Act of 2007. Staff noted that while the Energy Act is primarily aimed at reducing energy consumption and improving energy efficiency, these funds also offer some opportunities to achieve criteria pollutant and toxic emission reduction benefits as well. Board Member Lyou further refined this concept by pointing out that we should not simply be concerned with emission reductions per se, but that it is really those emissions reductions that result in public health benefits that we want to support. Consequently, staff recommended a position of SUPPORT WITH AMENDMENTS. Specifically, Section 25450.2 should be amended to read:

(c) It is the intent of the Legislature that added incentives and priority shall also be provided to projects that maximize public health benefits by reducing criteria pollutants and/or toxic air contaminant emissions, through the provision of additional ranking points in the project selection process. Such priority ranking points would augment the screening criteria defined in Sections 25450.2 (a) and (b).
The Legislative Committee voted to support, if amended, according to staff recommendations.

Public Comment

None

AQMD Home Rule Advisory Group Committee Legislative Report [Attachment 4]

Please refer to Attachment 4 for a written report.

Attachments (exe 603 kb)

1. Attendance Roster
2. S. 2555 AQMD Legislative Analysis Summary & Bill Language
3. AQMD Legislative Analysis Summary & Bill Language: SB 1762, AB 1851, and AB 2176
4. Legislative Report from AQMD Home Rule Advisory Group