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AB-1064 Highway Safety, Traffic Reduction, Air Quality, and Port Security Bond Act of 2006: shoreside electrical power infrastructure.(2011-2012)

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AB1064:v98#DOCUMENT

Amended  IN  Assembly  April 25, 2011

CALIFORNIA LEGISLATURE— 2011–2012 REGULAR SESSION

Assembly Bill
No. 1064


Introduced  by  Assembly Member Furutani

February 18, 2011


An act to amend Sections 39625 and 39625.02 of the Health and Safety Code, relating to air quality.


LEGISLATIVE COUNSEL'S DIGEST


AB 1064, as amended, Furutani. Highway Safety, Traffic Reduction, Air Quality, and Port Security Bond Act of 2006: shoreside electrical power infrastructure.

(1)Existing

Existing law, the Highway Safety, Traffic Reduction, Air Quality, and Port Security Bond Act of 2006, approved by the voters as Proposition 1B at the November 7, 2006, general election, authorizes the issuance of general obligation bonds for various transportation-related purposes, including emission reductions, not otherwise required by law or regulation, from activities related to the movement of freight along California’s trade corridors. The State Air Resources Board is required to allocate the funds to be used for air quality purposes pursuant to specified requirements. The state board is prohibited from approving funding for usable project segments if the benefits associated with each individual segment are insufficient to meet the objectives of the program from which the individual segment is funded.
This bill would make this prohibition inapplicable for a shoreside electrical power infrastructure project that is administered by a California port, and instead would require that the individual segments of these projects be a part of an adopted terminal plan submitted to the state board. The bill would authorize the state board for a specified purpose to allow a recipient agency for shoreside electrical power infrastructure to average vessel calls made across multiple berths within a terminal.

(2)Existing law, if it is anticipated that project costs will exceed the approved project budget, requires an agency receiving the funds described in paragraph (1) to provide a plan to the state board for achieving the benefits of the project by either downscoping the project to remain within budget or by identifying an alternative funding source to meet the cost increase.

This bill would make this requirement inapplicable for a shoreside electrical power infrastructure project that is administered by a California port.

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 39625 of the Health and Safety Code is amended to read:

39625.
 The Legislature finds and declares as follows:
(a) In November 2006, the voters approved the Highway Safety, Traffic Reduction, Air Quality and Port Security Bond Act of 2006, also known as Proposition 1B, that, among other things, provided one billion dollars ($1,000,000,000) to reduce emissions associated with the movement of freight along California’s trade corridors.
(b) Proposition 1B requires these funds to be made available, upon appropriation by the Legislature and subject to the conditions and criteria provided by the Legislature, to the State Air Resources Board in order to reduce the emissions associated with goods movement.
(c) Proposition 1B further required these funds to be made available for emission reductions not otherwise required by law or regulation. These funds are intended to supplement existing funds used to finance strategies that reduce emissions and public health risk associated with the movement of freight commencing at the state’s seaports and land ports of entry and transported through California’s trade corridors.
(d) Tremendous growth in goods movement activity has created a public health crisis in communities located adjacent to ports and along trade corridors. It is the intent of the Legislature that these funds be expended in a manner that reduces the health risk associated with the movement of freight along California’s trade corridors.
(e) (1) The building and completion of shoreside electrical power infrastructure at California’s public ports is an important component of reducing air pollution emissions caused by important maritime activities.
(2) The building and completion of shoreside electrical power infrastructure at California’s public ports will create new construction jobs and other employment opportunities for the California workforce.
(3) Using public funds for the building and completion of shoreside electrical power infrastructure represents a responsible use of publicly financed bond funds because the investment will be made in property owned by a public entity, with long-term emission benefits that will last for the duration of the anticipated payback period for the bonds.
(4) California leads the world in the use of shoreside electrical power infrastructure and will continue to do so once regulations adopted by the State Air Resources Board take full effect in 2014. These regulations are the most comprehensive set of shorepower regulations in the world and mandate that all regulated oceangoing vessels that are equipped and able to use shoreside power do so, and that, at a minimum, at least 50 percent of all vessels in a regulated fleet use shoreside power beginning in 2014, 70 percent in 2017, and 80 percent in 2020.
(5) The total costs of shoreside electrical power operation to the operators of the regulated fleets of container vessels, cruise liners, and refrigerated vessels, that must retrofit their vessels and equipment in order to use the shorepower systems at berth and comply with the California regulations, were estimated by the State Air Resources Board to be approximately $1.8 billion. This expense is a substantial investment and must be made by those oceangoing vessel owners and their customers.
(6) Because of the unique nature of shorepower, where emissions will be reduced only when a privately owned vessel operates with public infrastructure, the private investment in the vessel is a direct matching source for public dollars invested in electrification of the public property.
(7) California’s public seaports and the international trade that they facilitate are critical components of the state economy, directly or indirectly employing millions of Californians, contributing billions of dollars in economic activity, and generating local and state tax revenues. Therefore, California’s ports should be given the ability to successfully compete for cargo volume, attract new trade, and continue to grow.
(f) It is the intent of the Legislature that the state board maximize the emission reduction benefits, achieve the earliest possible health risk reduction in heavily impacted communities, and provide incentives for the control of emission sources that contribute to increased health risk in the future.
(g) It is the intent of the Legislature that the state board develop partnerships between federal, state, and private entities involved in goods movement to reduce emissions.
(h) It is the intent of the Legislature to streamline government operations and overhead, spur new employment opportunities, and improve port competitiveness while also reducing port-related emissions, and therefore, it is imperative that all incentive programs and investment opportunities available to the state be implemented in the most aggressive, responsible, and effective manner.
(i) The purpose of this chapter is to establish standards and procedures for the expenditure of these funds.

SEC. 2.

 Section 39625.02 of the Health and Safety Code is amended to read:

39625.02.
 (a) As used in this chapter and in Chapter 12.49 (commencing with Section 8879.20) of Division 1 of Title 2 of the Government Code, the following terms have the following meanings:
(1) “Administrative agency” means the state agency responsible for programming bond funds made available by Chapter 12.49 (commencing with Section 8879.20) of Division 1 of Title 2 of the Government Code, as specified in subdivision (c).
(2) Unless otherwise specified in this chapter, “project” includes equipment purchase, right-of-way acquisition, and project delivery costs.
(3) “Recipient agency” means the recipient of bond funds made available by Chapter 12.49 (commencing with Section 8879.20) of Division 1 of Title 2 of the Government Code that is responsible for implementation of an approved project.
(4) “Fund” has the meaning as defined in subdivision (c) of Section 8879.22 of the Government Code.
(b) Administrative costs, including audit and program oversight costs for the agency administering the program funded pursuant to this chapter, recoverable by bond funds shall not exceed 5 percent of the program’s costs.
(c) The state board is the administrative agency for the goods movement emission reduction program pursuant to paragraph (2) of subdivision (c) of Section 8879.23 of the Government Code.
(d) (1) The administrative agency shall not approve project fund allocations for a project until the recipient agency provides a project funding plan that demonstrates that the funds are expected to be reasonably available and sufficient to complete the project. The administrative agency may approve funding for usable project segments only if the benefits associated with each individual segment are sufficient to meet the objectives of the program from which the individual segment is funded, or, if the project is a shoreside electrical power infrastructure project that is administered by a California port, the individual segment funded is part of an adopted terminal plan submitted to the state board pursuant to Section 93118.3 of Title 17 of the California Code of Regulations.
(2) For the purpose of implementing any requirement to ensure that shoreside electrical power infrastructure funded pursuant to this chapter is being used at sufficient levels, the state board may allow a recipient agency to average vessel calls made across multiple berths within a terminal, if each of those berths is a project funded pursuant to this chapter.
(e) Guidelines adopted by the administrative agency pursuant to this chapter and Chapter 12.49 (commencing with Section 8879.20) of Division 1 of Title 2 of the Government Code are intended to provide internal guidance for the agency and shall be exempt from the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code), and shall do all of the following:
(1) Provide for audit of project expenditures and outcomes.
(2) Require that the useful life of the project be identified as part of the project nomination process.
(3) Require that project nominations have project delivery milestones, including, but not limited to, start and completion dates for environmental clearance, land acquisition, design, construction bid award, construction completion, and project closeout, as applicable.
(f) (1) (A) As a condition for allocation of funds to a specific project under Chapter 12.49 (commencing with Section 8879.20) of Division 1 of Title 2 of the Government Code, the administrative agency shall require the recipient agency to report, on a semiannual basis, on the activities and progress made toward implementation of the project. The administrative agency shall forward the report to the Department of Finance by means approved by the Department of Finance. The purpose of the report is to ensure that the project is being executed in a timely fashion, and is within the scope and budget identified when the decision was made to fund the project.
(B) If it is anticipated that project costs will exceed the approved project budget, the recipient agency shall provide a plan to the administrative agency for achieving the benefits of the project by either downscoping the project to remain within budget or by identifying an alternative funding source to meet the cost increase. The administrative agency may either approve the corrective plan or direct the recipient agency to modify its plan. This subparagraph does not apply to a shoreside electrical power infrastructure project that is administered by a California port.
(2) Within six months of the project becoming operable, the recipient agency shall provide a report to the administrative agency on the final costs of the project as compared to the approved project budget, the project duration as compared to the original project schedule as of the date of allocation, and performance outcomes derived from the project compared to those described in the original application for funding. The administrative agency shall forward the report to the Department of Finance by means approved by the Department of Finance.