May 9, 2019 The Honorable Rudy Salas, Chair Joint Legislative Audit Committee California State Assembly State Capitol, Room 4016 Sacramento, California 95814 Dear Assemblymember Salas: I appreciated the opportunity to provide testimony to you and the Committee members at the March 6, 2019 Joint Legislative Audit Committee regarding the California Air Resources Board’s (CARB) transportation policies and programs related to greenhouse gas (GHG) emission reductions. On April 23, we submitted to you and the members of the Committee responses to the five questions that we received prior to the hearing. As you know, a number of additional important questions were raised at the hearing and subsequently transmitted to CARB in a letter on March 8. This transmittal includes our responses to those additional twenty-nine questions. We have also included the responses to the initial five questions for your convenience. We are looking forward to meeting with you on May 14 to discuss further. In the meantime, please do not hesitate to contact me at (916) 322-7077. Sincerely, Richard W. Corey Executive Officer Enclosure The Honorable Rudy Salas May 9, 2019 Page 2 cc: The Honorable Toni G. Atkins Senate President pro Tempore State Capitol, Room 205 Sacramento, California 95814 The Honorable Anthony Rendon Speaker of the Assembly State Capitol, Room 219 Sacramento, California 95814 The Honorable Richard Roth, Vice Chair Joint Legislative Audit Committee California State Senate State Capitol, Room 2080 Sacramento, California 95814 The Honorable Andreas Borgeas Joint Legislative Audit Committee California State Senate State Capitol, Room 3082 Sacramento, California 95814 The Honorable Maria Elena Durazo Joint Legislative Audit Committee California State Senate State Capitol, Room 5066 Sacramento, California 95814 The Honorable Robert Hertzberg Joint Legislative Audit Committee California State Senate State Capitol, Room 313 Sacramento, California 95814 The Honorable William Monning Joint Legislative Audit Committee California State Senate State Capitol, Room 4040 Sacramento, California 95814 The Honorable Rudy Salas May 9, 2019 Page 3 cc: (continued) The Honorable John M. W. Moorlach Joint Legislative Audit Committee California State Senate State Capitol, Room 2048 Sacramento, California 95814 The Honorable Scott Wiener Joint Legislative Audit Committee California State Senate State Capitol, Room 5100 Sacramento, California 95814 The Honorable Tasha Boerner Horvath Joint Legislative Audit Committee California State Assembly State Capitol, Room 4130 Sacramento, California 95814 The Honorable Tyler Diep Joint Legislative Audit Committee California State Assembly State Capitol, Room 4153 Sacramento, California 95814 The Honorable Jim Patterson Joint Legislative Audit Committee California State Assembly State Capitol, Room 3132 Sacramento, California 95814 The Honorable Blanca Rubio Joint Legislative Audit Committee California State Assembly State Capitol, Room 5175 Sacramento, California 95814 The Honorable Rudy Salas May 9, 2019 Page 4 cc: (continued) The Honorable Randy Voepel Joint Legislative Audit Committee California State Assembly State Capitol, Room 4009 Sacramento, California 95814 The Honorable Jim Wood Joint Legislative Audit Committee California State Assembly State Capitol, Room 4016 Sacramento, California 95814 Attachment 1: CARB Response to March 8, 2019 Assemblymember Salas Letter This document, Attachment 1, contains the responses to each of the 29 questions outlined in Assemblymember Salas’ letter dated March 8, 2019 to the California Air Resources Board (CARB). This document refers to attachments originally submitted on April 23, 2019, and included in the current submittal, labeled as Attachment A, B, and C. 1. What is the overall budget of the ARB? How many people are employed by the ARB? CARB’s current budget (FY 18-19), as approved by the Legislature, is $231,253,000, with 1,493 positions. 2. In the 52 years since the ARB was founded, how many comprehensive audits have been conducted by the State Auditor to review the effectiveness of its program? CARB is the subject of multiple audits by the State Auditor each year. Topics vary widely, including reviewing employee leave practices (Report 2012-603), intellectual property management (Report 2011-106), high-risk issues (Report 2015-611, Report 2012-603, Report 2008-601, Report 2008-602, Report 2008-604, Report 2009-611.1), data reliability (Report 2008-401), investigations of improper activities by State employees (I2008-1, I2007-1, I2006-1, I2006-2, I2004-2), SIM/SAM/Federal Information Systems Control Audit Manual (annual), and the Greenhouse Gas Reduction Fund (annual). Additionally, CARB’s Carl Moyer Program (established by AB 1571 (Brulte, Chapter 923, Statutes of 1999)) was the subject of a State audit released in 2007 (Report 2006-115). The State Auditor recommended that CARB seek legislative action to get more than 10 percent (as established by Health and Safety Code 44286(d)) of the funds allocated to multi-district projects and direct funds towards projects that achieve the lowest cost per ton of emissions reductions. This recommendation has been incorporated into the program via the Rural Assistance Program. CARB also regularly responds to information requests about California Climate Investments from the Legislature and the public on behalf of all administering State agencies. California Climate Investments is a statewide initiative that incentivizes projects that facilitate the reduction of greenhouse gas (GHG) emissions using funding from the Greenhouse Gas Reduction Fund (GGRF). California Climate Investments are implemented by over 20 State agencies and CARB collects and compiles data each year for the Department of Finance (DOF) Annual Report to the Legislature (Assembly Bill (AB) 1532 (Pérez, Chapter 807, Statutes of 2012)). In 2016, the Joint Legislative Audit Committee (JLAC) requested information on program effectiveness beyond what was included in the 2016 Annual Report. May 9, 2019 1 Attachment 1: CARB Response to March 8, 2019 Assemblymember Salas Letter CARB provided information on how each administering agency incorporates cost-effectiveness and additional metrics to evaluate program effectiveness. Subsequently, CARB revised its reporting requirements for agencies to provide this information regularly. Since 2017, Annual Reports have included additional information on program effectiveness, including cost per GHG emission reduction. CARB has also developed co-benefit assessments that provide a uniform approach to metrics for evaluating the effectiveness of programs and projects. 3. How many transportation policies and programs do we have in place in California that fall in the jurisdiction of ARB? CARB has 58 transportation policies and programs in place in California with the goal of reducing air pollutant emissions from the millions of different types of equipment that operate on and off California’s roads (e.g., cars, trucks, forklifts, cargo handling equipment, marine vessels, motorcycles, garbage trucks, school buses, etc.). Of those, 32 programs focus on reducing greenhouse gas (GHG) emissions in the transportation sector and 26 focus on reducing criteria air pollutants and air toxics. Although CARB’s transportation programs have different primary objectives, they facilitate other emission reductions as a co-benefit. Many CARB GHG transportation programs provide multiple reductions benefits including those that reduce criteria pollutants/toxics from the transportation sector. For more detail, Attachment B in CARB’s Letter to Assemblymember Salas dated April 23, 2019 and included in this package describes CARB’s Transportation Programs that directly or indirectly achieve GHG emission reductions. For each program, there is a description of the program, a link to the program’s website, and references to page numbers relevant to emissions reductions achieved by each program. Attachment B is structured by light-duty vehicle regulation programs, light-duty vehicle incentive programs, heavy-duty regulation programs, heavy-duty incentive programs, fuels regulation programs, and land use and transportation programs. The right-hand column of the table in Attachment B indicates the type of emission reductions that CARB’s GHG transportation programs achieve, with many programs reducing air pollutants, toxics, and GHG emissions. 4. What is the dollar amount of investment that the ARB allocated to the state for incentive programs over the last decade? What is the amount of investment that will be made in this budget year? Please also provide a breakdown of these investments by region and by the most polluted communities throughout the state. Over the last decade, the Legislature has appropriated over $5 billion dollars for CARB incentive programs such as the Carl Moyer Program, Community Air Protection Program, Proposition 1B Goods Movement Emissions Reduction Program (Prop 1B), Funding Agricultural Replacement Measures for Emission Reductions (FARMER) Program, Air Quality Improvement Program (AQIP), Low Carbon Transportation (LCT) May 9, 2019 2 Attachment 1: CARB Response to March 8, 2019 Assemblymember Salas Letter Program, and the Woodsmoke Reduction Program. The Governor’s FY 19-20 Budget proposes $755 million in appropriations to CARB for incentive funds (Table 1). Table 1: CARB’s Statewide Incentive Program Appropriations ZE VW FAR AB Wood Prop Carl AQIP LCT Ware ZEV VW1 Total Moyer MER 617 Smoke 1B2 Fiscal house Scrap/ Replace Year (in Millions)