BILL NUMBER: SB 76	CHAPTERED
	BILL TEXT

	CHAPTER  91
	FILED WITH SECRETARY OF STATE  JULY 21, 2005
	APPROVED BY GOVERNOR  JULY 21, 2005
	PASSED THE SENATE  JULY 7, 2005
	PASSED THE ASSEMBLY  JULY 7, 2005
	AMENDED IN ASSEMBLY  JUNE 14, 2005

INTRODUCED BY   Committee on Budget and Fiscal Review

                        JANUARY 14, 2005

   An act to amend the heading of Chapter 14 (commencing with Section
13400) of Division 5 of, to amend Section 13401 of, and to add
Article 5.5 (commencing with Section 13446) to Chapter 14 of Division
5 of, the Business and Professions Code, and to amend Sections 384
and 740.8 of, and to add and repeal Section 901 of the Public
Utilities Code, relating to energy, and making an appropriation
therefor.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 76, Committee on Budget and Fiscal Review  Energy.
   (1) Existing law requires the Department of Food and Agriculture
to adopt specifications for gasoline or automotive spark-ignition
fuels for use in internal combustion engines and motor vehicles and
to use by reference the latest standards of the American Society for
Testing and Materials (ASTM). Existing law also makes it unlawful for
any person to sell, offer for sale, or cause or permit to be sold or
offered for sale, or deliver or offer for delivery, any petroleum
product as a fuel for internal combustion engines at any place where
petroleum products are kept or stored for sale, which does not
conform to these provisions, unless specified requirements are met.
   This bill would add hydrogen fuels to these provisions for use in
internal combustion engines and fuel cells in motor vehicles. By
expanding the definition of a crime, the bill would impose a
state-mandated local program.
   The bill would require the department, by January 1, 2008, with
the concurrence of the State Air Resources Board, to establish
specifications for hydrogen fuels for use in internal combustion
engines and fuel cells in motor vehicles until a standards
development organization accredited by the American National
Standards Institute (ANSI) formally adopts standards for hydrogen
fuels for use in internal combustion engines and fuel cells in motor
vehicles. It would require the department, at that time, to adopt
those standards, except as specified.
   The bill would, until January 1, 2007, appropriate the sum of $6.5
million from the Motor Vehicle Account to the State Air Resources
Board to fund the state's share of various activities relating to
hydrogen-powered vehicles. The bill would require the board to
prepare certain reports and take other specified actions with respect
to hydrogen fuel.
   (2) Existing law provides for the collection of funds to provide
funds for the Public Interest Research Development, and Demonstration
Fund, pertaining to public interest research, development, and
demonstration.
   This bill would provide that those funds may be expended for
transportation related public interest energy research if it provides
an electricity ratepayer benefit.
   (3) Existing law defines interest of ratepayers in connection with
public utilities.
   This bill would provide that interests of ratepayers also includes
activities that benefit ratepayers and that promote energy
efficiency, reduction of health and environmental impacts from air
pollution, and greenhouse gas emissions related to electricity and
natural gas production and use, and increased use of alternative
fuels.
   (4) Existing law provides for a surcharge on natural gas to
provide low income assistance, energy efficiency and conservation
activities, and public interest research and development.
   This bill would provide that the funds for public interest energy
research and development shall be administered by the Energy
Resources Conservation and Development Commission for specified
purposes, including specified transportation related purposes. The
bill would repeal these provisions on January 1, 2009.
  (5) The California Constitution requires the state to reimburse
local agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that no reimbursement is required by this
act for a specified reason.
   Appropriation: yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  The heading of Chapter 14 (commencing with Section
13400) of Division 5 of theBusiness and Professions Code is amended
to read:
      CHAPTER 14.  PETROLEUM AND HYDROGEN FUELS

  SEC. 2.  Section 13401 of theBusiness and Professions Code is
amended to read:
   13401.  (a) "Sell" or any of its variants means attempt to sell,
offer for sale or assist in the sale of, permit to be sold or offered
for sale or delivery, offer for delivery, trade, barter, or expose
for sale.
   (b) "Manufacturer" means manufacturer, refiner, producer, or
importer.
   (c) "Petroleum products" means gasoline, diesel fuel, liquefied
petroleum gas only when used as a motor fuel, kerosene, thinner,
solvent, liquefied natural gas, pressure appliance fuel, or white
gasoline, or any motor fuel, or any oil represented as engine
lubricant, engine oil, lubricating or motor oil, or any oil used to
lubricate transmissions, gears, or axles.
   (d) "Barrel," when applied to petroleum products, consists of 42
gallons.
   (e) "Oil" means motor oil, engine lubricant, engine oil,
lubricating oil, or oils used to lubricate transmissions, gears, or
axles.
   (f) "Motor oil" means engine oil, engine lubricant, or lubricating
oil.
   (g) "Gasoline" means a volatile mixture of liquid hydrocarbons,
generally containing small amounts of additives, suitable for use as
a fuel in spark-ignition internal combustion engines.
   (h) "Engine fuel" means any liquid or gaseous matter used for the
generation of power in an internal combustion engine or fuel cell.
"Motor fuel" means "engine fuel" when that term is used in this
chapter.
   (i) "Motor vehicle fuel" means any product intended for
consumption in an internal combustion engine or fuel cell to produce
the power to self-propel a vehicle designed for transporting persons
or property on a public street or highway.
   (j) "Diesel fuel" means any petroleum product offered for sale
which meets the standards prescribed for diesel fuel by this chapter.

   (k) "Kerosene" means any petroleum product offered for sale which
meets the standards prescribed for kerosene by this chapter.
   (l) "Fuel oil" means any petroleum product offered for sale which
meets the standards prescribed for fuel oil by this chapter.
   (m) "Automotive spark-ignition engine fuel" means any product used
for the generation of power in a spark-ignition internal combustion
engine.
   (n) "Compression-ignition engine fuel" means any product used for
the generation of power in a compression-ignition internal combustion
engine.
   (o) "Gasoline-oxygenate blend" means a fuel consisting primarily
of gasoline along with a substantial amount of one or more
oxygenates. For purposes of this section, "substantial amount" means
more than 0.35 mass percent oxygen or, if methanol is the only
oxygenate, more than 0.15 mass percent oxygen.
   (p) "Oxygenate" means an oxygen-containing, ashless, organic
compound such as an alcohol or ether, which can be used as a fuel or
fuel supplement.
   (q) "Developmental engine fuel" means any experimental automotive
spark-ignition engine fuel or compression-ignition fuel which does
not meet current standards established by this chapter but has
characteristics which may lead to an improved fuel standard or the
development of an alternative fuel standard.
   (r) "Hydrogen" means a fuel composed of the chemical hydrogen
intended for consumption in an internal combustion engine or fuel
cell.
  SEC. 3.  Article 5.5 (commencing with Section 13446) is added to
Chapter 14 of Division 5 of the Business and Professions Code, to
read:

      Article 5.5.  Standards for Hydrogen

   13446.  On or before January 1, 2008, the department, with the
concurrence of the State Air Resources Board, shall establish
specifications for hydrogen fuels for use in internal combustion
engines and fuel cells in motor vehicles until a standards
development organization accredited by the American National
Standards Institute (ANSI) formally adopts standards for hydrogen
fuels for use in internal combustion engines and fuel cells in motor
vehicles.  The department shall then adopt by reference the latest
standards established by the ANSI-accredited standards development
organization for hydrogen fuel for use in internal combustion engines
and fuel cells in motor vehicles, except that no specification or
standard shall be less stringent than is required by state law.
  SEC. 4.  Section 384 of the Public Utilities Code is amended to
read:
   384.  (a) Funds transferred to the State Energy Resources
Conservation and Development Commission pursuant to this article for
purposes of public interest research, development, and demonstration
shall be transferred to the Public Interest Research, Development,
and Demonstration Fund, which is hereby created in the State
Treasury. The fund is a trust fund and shall contain money from all
interest, repayments, disencumbrances, royalties, and any other
proceeds appropriated, transferred, or otherwise received for
purposes pertaining to public interest research, development, and
demonstration. Any appropriations that are made from the fund shall
have an encumbrance period of not longer than two years, and a
liquidation period of not longer than four years.
   (b) Funds deposited in the Public Interest Research, Development,
and Demonstration Fund may be expended for projects that serve the
energy needs of both stationary and transportation purposes if the
research provides an electricity ratepayer benefit.
   (c) The State Energy Resources Conservation and Development
Commission shall report annually to the appropriate budget committees
of the Legislature on any encumbrances or liquidations that are
outstanding at the time the commission's budget is submitted to the
Legislature for review.
  SEC. 5.  Section 740.8 of the Public Utilities Code is amended to
read:
   740.8.  As used in Section 740.3, "interests" of ratepayers,
short- or long-term, mean direct benefits that are specific to
ratepayers in the form of safer, more reliable, or less costly gas or
electrical service, consistent with Section 451, and activities that
benefit ratepayers and that promote energy efficiency, reduction of
health and environmental impacts from air pollution, and greenhouse
gas emissions related to electricity and natural gas production and
use, and increased use of alternative fuels.
  SEC. 6.  Section 901 is added to the Public Utilities Code, to
read:
   901.  (a) Funds allocated pursuant to this article for public
interest energy research and development shall be administered by the
Energy Resources Conservation and Development Commission consistent
with orders and decisions adopted by the commission.
   (b) One half of funds allocated pursuant to this article for
natural gas public interest energy research and development shall be
expended pursuant to a strategic research plan jointly developed by
the state Air Resources Board and the Energy Resources Conservation
and Development Commission to ensure coordination of the state's
energy and environmental research priorities. The plan shall be
submitted for review and approval to the commission.
   (c) Up to one-third of the funds allocated pursuant to this
article may be used for transportation related public interest energy
research and development provided the research provides natural gas
ratepayer benefits and those benefits are identified in the plan.
   (d) Funds allocated in subdivisions (b) and (c) shall not be used
for the California Hydrogen Blueprint Plan.
   (e) This section shall remain in effect until January 1, 2009, and
as of that date is repealed unless a later enacted statute extends
or repeals that date.
  SEC. 7.  (a) The sum of six million five hundred thousand dollars
($6,500,000) is hereby appropriated from the Motor Vehicle Account to
the State Air Resources Board to fund the state's share of the
following activities:
   (1) The establishment of up to three demonstration hydrogen
fueling stations in the state. Each station shall provide public
access, shall meet or exceed the environmental goals of the
California Hydrogen Blueprint Plan, and shall use renewable energy,
such as solar energy, to produce and dispense hydrogen, or combine
fuel dispensing with electricity generation to power the station. As
a condition of receipt of the funds, the State Air Resources Board
shall require that each station be open to the public during
convenient hours, encourage station locations that provide a
convenient network for hydrogen fueling, encourage innovation in
design, recognize appropriate buffer zones between station location
and sensitive receptors, as indicated in public meetings and
workshops held pursuant to paragraphs (1) and (2) of subdivision (d),
and mitigate any adverse impacts on affected neighborhoods.
   (2) The leasing by the state of a diverse fleet of up to 12
hydrogen-powered vehicles, and the purchase of up to two hydrogen
internal combustion engine vehicles such as shuttle buses for use in
university or airport shuttle operations. These vehicles shall
demonstrate the viability and functionality of hydrogen as a
transportation fuel and of hydrogen powered vehicle technology.
   (3) The employment of support staff on a two-year, limited term
basis, to implement this section and to implement the activities
required pursuant to Chapter 14 (commencing with Section 13400) of
Division 5 of the Business and Professions Code.
   (b) The activities funded pursuant to this section shall
contribute to the achievement of the following energy and
environmental goals by 2010:
   (1) A 30 percent reduction in greenhouse gas emissions relative to
comparable emissions from current-year vehicles.
   (2) The utilization of at least 33 percent new renewable resources
in the production of hydrogen for vehicles.
   (3) No increase in toxic or smog-forming emissions.
   (c) Projects and vehicle leases entered into pursuant to this
section shall be selected through a duly-noticed public bidding
process.
   (d) Prior to expending funds pursuant to this section, the State
Air Resources Board shall do all of the following:
   (1) Hold at least one public meeting of the CAL-EPA Environmental
Justice Advisory Committee established pursuant to Section 72002 of
the Public Resources Code to solicit that committee's input on the
appropriate siting criteria and location of hydrogen fueling stations
and production facilities to address any environmental justice
concerns.
   (2) Hold at least one public workshop in each of the northern,
central, and southern regions of the state for the purposes of
accepting public testimony and input on hydrogen production and
fueling bid criteria, and siting and location criteria.
   (3) Develop and adopt appropriate siting criteria consistent with
the board's Air Quality and Land Use Handbook.  In developing these
criteria, the board shall consider input from public meetings and
workshops conducted pursuant to paragraphs (1) and (2).
   (4) At least 30 days prior to the adoption of any siting criteria,
or specific locations, for projects funded pursuant to this section,
make available to the public those siting criteria and locations for
review and comment.
   (e) The California Environmental Protection Agency, in conjunction
with the State Air Resources Board, the Office of Environmental
Health Hazard Assessment, and any other appropriate state entity,
shall report to the Legislature every six months on implementation of
this section, including the status of funds expended and compliance
with the provisions of this section.
   (f) On or before December 31, 2006, the State Air Resources Board
shall report to the Legislature on the status of
transportation-related hydrogen activities in other states, including
a discussion of siting criteria and the selection of actual sites,
the impact of hydrogen highway infrastructure and activities on the
affected communities and neighborhoods, and the development of
hydrogen related business activity in California. The report may
include recommendations regarding the continued deployment of
hydrogen fueling stations in the state.
   (g) Nothing in this section shall affect any requirement of law or
regulation affecting the siting, construction, or operation of
facilities funded pursuant to this section.
  (h) This section shall remain in effect only until January 1, 2007,
and as of that date is repealed, unless a later enacted statute,
that is enacted before January 1, 2007, deletes or extends that date.

  SEC. 8.  No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.