Assigned to NRRA & APPROP                                                                                                      FOR COMMITTEE

ARIZONA STATE SENATE

Forty-seventh Legislature, Second Regular Session

CORRECTED

FACT SHEET FOR H.B. 2591

compressed natural gas; particulate program

Purpose

            An emergency measure that establishes grant application procedures and requirements.  Continuously appropriates and redirects in-lieu fee revenues received in excess of $10,500,000 from the Air Quality Fund to the Arizona Department of Environmental Quality (ADEQ) for the compressed natural gas (CNG) and diesel particulate filter school bus grant program. 

Background

            In 2005, the budget appropriated the first $10,000,000 earned from new vehicle in-lieu emission fees in FY 2005-2006 to the state General Fund, and the next $500,000 earned to ADEQ for operating costs.  Monies in excess of $10,500,000 are deposited in the Air Quality Fund in FY 2005-2006 and appropriated to ADEQ for grants to school districts to purchase new CNG school buses and diesel particulate filters.  Eighty percent of this appropriation to ADEQ is required to be used for buses and filters. The remainder of the appropriation (20 percent) is allowed to be used by ADEQ for general Air Quality Fund purposes. 

            H.B. 2591 amends the 2005 session law, but does not appropriate any additional money for the CNG and diesel particulate school bus grant program.  According to the FY 2005-2006 Joint Legislative Budget Committee report for ADEQ, approximately $14,700,000 in revenue is expected from in-lieu fees for FY 2005-2006.  The 2005 budget appropriation requires monies in excess of $10,500,000, or approximately $4,200,000, to be deposited in the Air Quality Fund in the current fiscal year.  There is no anticipated fiscal impact to the state General Fund associated with this measure.

Provisions

1. Specifies that ADEQ is to award grants to school districts to purchase new CNG and diesel particulate filter school buses or retrofit old buses with diesel particulate filters. 

2. Continuously appropriates in-lieu fee revenues received in excess of $10,500,000 from the Air Quality Fund to ADEQ for the CNG and diesel particulate filter school bus grant program. 

3. Redirects the remaining 20 percent of the appropriation to be used as needed for new CNG school buses or diesel particulate filters, rather than for general use by the Air Quality Fund.

4. Requires grant applicants to submit a grant application budget and schedule for the procurement and specifications for the new CNG buses or diesel particulate filters to ADEQ on or before May 1, 2006.

5. Requires ADEQ to provide forms for the grant application process.

6. Limits a grant applicant’s budget for new school buses to the incremental difference between the cost, excluding taxes, of purchasing a conventional diesel fueled bus and the cost of either a CNG bus or a diesel bus designed with a particulate filter and designed to run on ultralow sulfur diesel fuel.

7. Limits a grant applicant’s budget for existing or new particulate filter retrofitted school buses to the cost of the retrofit, including taxes and installation.

8. Provides criteria for grant application approval.

9. Requires all vehicle acquisitions, retrofits and services under the grants to be delivered by June 30, 2008.

10. Requires grant applicants to participate in ADEQ’s pilot project to eliminate unnecessary school bus idling.

11. Awards grant money through June 30, 2008, or when all money is awarded.

12. Requires grant applications to be submitted on or before May 1, 2006.

13. Requires that grant applications must come from school districts with schools or students, or both, in Vehicle Emissions Control Areas A or B. 

14. Caps monies available for grants at no more than five buses for each applicant if the amount of monies requested in applications exceeds the amount of monies available.

15. Becomes effective on signature of the Governor, if the emergency clause is enacted.

Correction

1. Rewords purpose statement.

2. Adds fiscal impact information.

3. Rewords provisions.

House Action

ENV                2/1/06     DP     5-0-0-4

3^rd Read           2/13/06             56-1-3-0

Prepared by Senate Research

March 1, 2006

FB/jas