Amended in Senate May 28, 2013

Amended in Senate May 15, 2013

Amended in Senate April 18, 2013

Senate Bill No. 11

Introduced by Senators Pavley and Cannella

(Principal coauthor: Senator Hill)

(Coauthor: Senator Jackson)

December 3, 2012

An act to amend Sections 41081, 44060.5, 44225, 44229, begin insert 44270.3, 44271, end insert 44272, begin insert 44273, 44274, end insert 44275, 44280, 44281, 44282, 44283, 44287, 44299.1, and 44299.2 of, and to add begin delete Sections 43018.9, 43867.5, and 43867.6 end delete begin insert Section 43018.9 end insert to, the Health and Safety Code, to amend Sections 42885 and 42889 of the Public Resources Code, and to amend Sections 9250.1, 9250.2, 9261.1, and 9853.6 of the Vehicle Code, relating to vehicular air pollution, and declaring the urgency thereof, to take effect immediately.

LEGISLATIVE COUNSEL’S DIGEST

SB 11, as amended, Pavley. Alternative fuel and vehicle technologies: funding programs.

(1) Existing law establishes the Alternative and Renewable Fuel and Vehicle Technology Program, administered by the State Energy Resources Conservation and Development Commission begin delete (commission) end delete , to provide to specified entities, upon appropriation by the Legislature, grants, loans, loan guarantees, revolving loans, or other appropriate measures, for the development and deployment of innovative technologies that would transform California’s fuel and vehicle types to help attain the state’s climate change goals. Existing law specifies that only certain projects or programs are eligible for funding, including block grants administered by public entities or not-for-profit technology entities for multiple projects, education and program promotion within California, and development of alternative and renewable fuel and vehicle technology centers. Existing law requires the commission to develop and adopt an investment plan to determine priorities and opportunities for the program. begin insert Existing law also creates the Air Quality Improvement Program, administered by the State Air Resources Board, to fund air quality improvement projects related to fuel and vehicle technologies. end insert

This bill would provide that the begin delete State Air Resources Board, referred to as the state end delete board, until January 1, 2024, has no authority to enforce any element of its existing clean fuels outlet regulation or other regulation that requires or has the effect of requiring any person to construct, operate, or provide funding for the construction or operation of any publicly available hydrogen fueling station. The bill would require the begin delete state end delete board to aggregate and make available to the public, no later than January 1, 2014, and every begin delete two years end delete begin insert year end insert thereafter, the number of begin insert hydrogen-fueled end insert vehicles that automobile manufacturers project to be sold or leased begin insert over the next 3 years end insert , as reported to the begin delete state end delete board begin insert , and the number of hydrogen-fueled vehicles registered with the Department of Motor Vehicles through April 30 end insert . The bill would require the commission to allocate $20 million each fiscal year, as specified, begin delete and up to $20 million each fiscal year thereafter, as specified, for purposes of achieving a hydrogen fueling network sufficient to provide convenient fueling to vehicle owners, and expand that network as necessary to support a growing market for vehicles requiring hydrogen fuel, end delete until there are at least 100 publicly available hydrogen fueling stations begin insert in California end insert . The bill, on or before December 31, 2015, and annually thereafter, would require the commission and the begin delete state end delete board to jointly review and report on the progress toward establishing a hydrogen fueling network that provides the coverage and capacity to fuel vehicles requiring hydrogen fuel that are being placed into operation in the state, as specified. The bill would authorize the commission to design grants, loan incentive programs, revolving loan programs, and other forms of financial assistance, as specified, for purposes of assisting in the implementation of these provisions. The bill, no later than July 1, 2013, would require the begin delete state end delete board and air districts to jointly convene working groups to evaluate the specified policies and goals of specified programs. The bill would add intelligent transportation systems as a category of projects eligible for funding under the Alternative and Renewable Fuel and Vehicle Technology Program. begin insert The bill would require the commission and the board, in making awards under both the Alternative and Renewable Fuel and Vehicle Technology Program and the Air Quality Improvement Program, to provide a preference to projects with higher benefit-cost scores, as defined. The bill would prohibit any customer incentives for light-duty vehicles from being greater than compensations given to customers under the Enhanced Fleet Modernization Program for the retirement of certain high polluting vehicles. end insert

begin delete

(2) Existing law requires the commission, in partnership with the state board, to develop and adopt a state plan to increase the use of alternative transportation fuels.

end delete begin delete

This bill would require the commission and the state board, among other things, to coordinate efforts to measure the progress of alternative fuels use. The bill would require the commission, in consultation with the state board, on or before November 1, 2014, to update a specified economic analysis. The bill would require the commission and the state board, to evaluate how the use of new and existing investment programs could be used to increase the state alternative transportation fuels use, and evaluate how the impact of federal fuel policies and existing state policies will help increase the use of alternative transportation fuels in the state. The bill would require the commission and the state board, on or before November 1, 2015, and every 2 years thereafter, to report in the integrated energy policy report, as specified, the status of the state alternative transportation fuels use, as specified, and make specified evaluations. The bill would require the state board to include a finding on the effect of proposed regulations on state alternative transportation fuels use.

end delete begin delete

(3)

end delete

begin insert (2) end insert  Existing law, until January 1, 2016, increases vehicle registration fees, vessel registration fees, and specified service fees for identification plates by a specified amount. Existing law requires the revenue generated by the increase in those fees to be deposited in the Alternative and Renewable Fuel and Vehicle Technology Fund, and either the Air Quality Improvement Fund or the Enhanced Fleet Modernization Subaccount, as provided.

Existing law, until January 1, 2016, imposes on certain vehicles a smog abatement fee of $20, and requires a specified amount of this fee to be deposited in the Air Quality Improvement Fund and in the Alternative and Renewable Fuel and Vehicle Technology Fund.

This bill would extend those fees in the amounts required to make these deposits into the Alternative and Renewable Fuel and Vehicle Technology Fund, the Air Quality Improvement Fund, and the Enhanced Fleet Modernization Subaccount until January 1, 2024, at which time the fees would be reduced by those amounts.

begin delete

(4)

end delete

begin insert (3) end insert  Existing law establishes the Carl Moyer Memorial Air Quality Standards Attainment Program (Carl Moyer program), which is administered by the begin delete state end delete board, to provide grants to offset the incremental cost of eligible projects that reduce emissions of air pollutants from sources in the state and for funding a fueling infrastructure demonstration program and technology development efforts. Existing law, beginning January 1, 2015, limits the Carl Moyer program to funding projects that reduce emissions of oxides of nitrogen (NO_x).

This bill would extend the current authorization for the Carl Moyer program to fund a broader range of projects that reduce emissions until January 1, 2024, and would make other conforming changes in that regard.

begin delete

(5)

end delete

begin insert (4) end insert  Existing law authorizes the district board of the Sacramento Metropolitan Air Quality Management District to adopt a surcharge on motor vehicle registration fees applicable to all motor vehicles registered in the counties within that district. Existing law, until January 1, 2015, raises the limit on the amount of that surcharge from $4 to $6 for a motor vehicle whose registration expires on or after December 31, 1990, and requires that $2 of the surcharge be used to implement the Carl Moyer program, as specified. Beginning January 1, 2015, existing law returns the surcharge limit to its previous amount of $4.

This bill would extend the $6 limitation on the surcharge until January 1, 2024, with the limit returning to $4 beginning on that date.

begin delete

(6)

end delete

begin insert (5) end insert  Existing law authorizes each air pollution control and air quality management district, or district, that has been designated a state nonattainment area by the begin delete state end delete board for any motor vehicle air pollutant, except the Sacramento Air Quality Management District, to levy a surcharge on the registration fees for every motor vehicle registered in that district, as specified by the governing body of the district. Existing law requires the Department of Motor Vehicles to collect that surcharge if requested by a district, and requires the department, after deducting its administrative costs, to distribute the revenues to the districts. Existing law, until January 1, 2015, raises the limit on the amount of that surcharge from $4 to $6 and requires that $2 of the surcharge be used to implement the Carl Moyer program, as specified. Beginning January 1, 2015, existing law returns the surcharge limit to its previous amount of $4.

This bill would extend the $6 limitation on the surcharge until January 1, 2024, with the limit returning to $4 beginning on that date.

begin delete

(7)

end delete

begin insert (6) end insert  Existing law imposes, until January 1, 2015, a California tire fee of $1.75 per tire on every person who purchases a new tire, with the revenues generated to be allocated for prescribed purposes related to disposal and use of used tires. Existing law requires that $0.75 per tire on which the fee is imposed, be deposited in the Air Pollution Control Fund, these moneys to be available upon appropriation by the Legislature for use by the begin delete state end delete board and districts for specified purposes. Existing law reduces the tire fee to $0.75 per tire on and after January 1, 2015.

This bill would, on January 1, 2015, instead begin delete increase end delete begin insert establish end insert the tire fee begin delete to end delete begin insert at end insert $1.50 per tire until January 1, 2024, and reduce the tire fee to $0.75 per tire on and after January 1, 2024.

begin insert

(7) Section 3 of Article XIX of the California Constitution restricts the expenditure of revenues from fees and taxes imposed by the state on vehicles to specified purposes, subject to certain exceptions.

end insert begin insert

This bill would require the commission and the board to ensure that revenues from specified fees imposed on vehicles that are used for purposes of the Alternative and Renewable Fuel and Vehicle Technology Program and the Air Quality Improvement Program are expended in compliance with Section 3 of Article XIX of the California Constitution.

end insert

(8) This bill would declare that it is to take effect immediately as an urgency statute.

Vote: ²⁄₃. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

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

SECTION 1.  

Section 41081 of the Health and Safety Code, as
amended by Section 1.5 of Chapter 216 of the Statutes of 2011, is
amended to read:

41081.  

(a) Subject to Article 3.7 (commencing with Section
53720) of Chapter 4 of Part 1 of Division 2 of Title 5 of the
Government Code, or with the approval of the board of supervisors
of each county included, in whole or in part, within the Sacramento
district, the Sacramento district board may adopt a surcharge on
the motor vehicle registration fees applicable to all motor vehicles
registered in those counties within the Sacramento district whose
boards of supervisors have adopted a resolution approving the
surcharge. The surcharge shall be collected by the Department of
Motor Vehicles and, after deducting the department’s
administrative costs, the remaining funds shall be transferred to
the Sacramento district. Prior to the adoption of any surcharge
pursuant to this subdivision, the district board shall make a finding
that any funds allocated to the district as a result of the adoption
of a county transportation sales and use tax are insufficient to carry
out the purposes of this chapter.

(b) The surcharge shall not exceed six dollars ($6).

(c) After consulting with the Department of Motor Vehicles on
the feasibility thereof, the Sacramento district board may provide,
in the surcharge adopted pursuant to subdivision (a), to exempt
from all or part of the surcharge any category of low-emission
motor vehicle.

(d) Funds received by the Sacramento district pursuant to this
section shall be used by that district as follows:

(1) The revenues resulting from the first four dollars ($4) of
each surcharge shall be used to implement reductions in emissions
from vehicular sources, including, but not limited to, a clean fuels
program and motor vehicle use reduction measures.

(2) The revenues resulting from the next two dollars ($2) of
each surcharge shall be used to implement the following programs
that achieve emission reductions from vehicular sources and
off-road engines, to the extent that the district determines the
program remediates air pollution harms created by motor vehicles
on which the surcharge is imposed:

(A) Projects eligible for grants under the Carl Moyer Memorial
Air Quality Standards Attainment Program (Chapter 9
(commencing with Section 44275) of Part 5).

(B) The new purchase, retrofit, repower, or add-on of equipment
for previously unregulated agricultural sources of air pollution, as
defined in Section 39011.5, within the Sacramento district, for a
minimum of three years from the date of adoption of an applicable
rule or standard, or until the compliance date of that rule or
standard, whichever is later, if the state board has determined that
the rule or standard complies with Sections 40913, 40914, and
41503.1, after which period of time, a new purchase, retrofit,
repower, or add-on of equipment shall not be funded pursuant to
this chapter. The district shall follow any guidelines developed
under subdivision (a) of Section 44287 for awarding grants under
this program.

(C) The purchase of new, or retrofit of emissions control
equipment for existing, schoolbuses pursuant to the
Lower-Emission School Bus Program adopted by the state board.

(D) An accelerated vehicle retirement or repair program that is
adopted by the state board pursuant to authority granted hereafter
by the Legislature by statute.

(E) The replacement of onboard natural gas fuel tanks on
schoolbuses owned by a school district that are 14 years or older,
not to exceed twenty thousand dollars ($20,000) per bus, pursuant
to the Lower-Emission School Bus Program adopted by the state
board.

(F) The enhancement of deteriorating natural gas fueling
dispensers of fueling infrastructure operated by a school district
with a one-time funding amount not to exceed five hundred dollars
($500) per dispenser, pursuant to the Lower-Emission School Bus
Program adopted by the state board.

(e) Not more than 5 percent of the funds collected pursuant to
this section shall be used by the district for administrative expenses.

(f) A project funded by the program shall not be used for credit
under any state or federal emissions averaging, banking, or trading
program. An emission reduction generated by the program shall
not be used as marketable emission reduction credits or to offset
any emission reduction obligation of any person or entity. Projects
involving new engines that would otherwise generate marketable
credits under state or federal averaging, banking, and trading
programs shall include transfer of credits to the engine end user
and retirement of those credits toward reducing air emissions in
order to qualify for funding under the program. A purchase of a
low-emission vehicle or of equipment pursuant to a corporate or
a controlling board’s policy, but not otherwise required by law,
shall generate surplus emissions reductions and may be funded by
the program.

(g) This section shall remain in effect only until January 1, 2024,
and as of that date is repealed, unless a later enacted statute, that
is enacted before January 1, 2024, deletes or extends that date.

SEC. 2.  

Section 41081 of the Health and Safety Code, as added
by Section 2.5 of Chapter 707 of the Statutes of 2004, is amended
to read:

41081.  

(a) Subject to Article 3.7 (commencing with Section
53720) of Chapter 4 of Part 1 of Division 2 of Title 5 of the
Government Code, or with the approval of the board of supervisors
of each county included, in whole or in part, within the Sacramento
district, the Sacramento district board may adopt a surcharge on
the motor vehicle registration fees applicable to all motor vehicles
registered in those counties within the Sacramento district whose
boards of supervisors have adopted a resolution approving the
surcharge. The surcharge shall be collected by the Department of
Motor Vehicles and, after deducting the department’s
administrative costs, the remaining funds shall be transferred to
the Sacramento district. Prior to the adoption of any surcharge
pursuant to this subdivision, the district board shall make a finding
that any funds allocated to the district as a result of the adoption
of a county transportation sales and use tax are insufficient to carry
out the purposes of this chapter.

(b) The surcharge shall not exceed four dollars ($4).

(c) After consulting with the Department of Motor Vehicles on
the feasibility thereof, the Sacramento district board may provide,
in the surcharge adopted pursuant to subdivision (a), to exempt
from all or part of the surcharge any category of low-emission
motor vehicle.

(d) Funds received by the Sacramento district pursuant to this
section shall be used to implement the strategy with respect to the
reduction in emissions from vehicular sources, including, but not
limited to, a clean fuels program and motor vehicle use reduction
measures. Not more than 5 percent of the funds collected pursuant
to this section shall be used by the district for administrative
expenses.

(e) This section shall become operative on January 1, 2024.

SEC. 3.  

Section 43018.9 is added to the Health and Safety
Code, to read:

43018.9.  

(a) For purposes of this section, the following terms
have the following meanings:

(1) “Commission” means the State Energy Resources
Conservation and Development Commission.

(2) “Publicly available hydrogen fueling station” means the
equipment used to store and dispense hydrogen fuel to vehicles
according to industry codes and standards that is open to the public.

(b) (1) Notwithstanding any other law, the state board shall
have no authority to enforce any element of its existing clean fuels
outlet regulation or of any other regulation that requires or has the
effect of requiring that any person construct, operate, or provide
funding for the construction or operation of any publicly available
hydrogen fueling station.

(2) This subdivision shall become inoperative on January 1,
2024.

begin delete

(c) The state board shall aggregate and make available to the
public no later than January 1, 2014, and every two years thereafter,
the number of vehicles that automobile manufacturers project to
be sold or leased, as reported to the state board pursuant to Section
2303(a) of Title 13 of the California Code of Regulations.

(d) (1) The commission shall allocate twenty million dollars
($20,000,000) each fiscal year, beginning July 1, 2013, through
June 30, 2016, and up to twenty million dollars ($20,000,000) each
fiscal year thereafter, not to exceed 20 percent of moneys
appropriated by the Legislature from the Alternative and
Renewable Fuel and Vehicle Technology Fund, established
pursuant to Section 44273, for purposes of achieving a hydrogen
fueling network sufficient to provide convenient fueling to vehicle
owners, and expand that network as necessary to support a growing
market for vehicles requiring hydrogen fuel, until there are at least
100 publicly available hydrogen fueling stations. Allocations by
the commission pursuant to this subdivision shall be subject to all
of the requirements applicable to allocations from the Alternative
and Renewable Fuel and Vehicle Technology Program pursuant
to Article 2 (commencing with Section 44272) of Chapter 8.9.

(2) The commission, in awarding funds pursuant to the
allocations described in paragraph (1), shall, based on best available
data and relevant stakeholder input, award moneys allocated in
paragraph (1) according to a strategy that supports the deployment
of an effective and efficient hydrogen fueling station network in
a way that maximizes benefits to the public while minimizing costs
to the state.

end delete begin insert

(c) On or before June 30, 2014, and every year thereafter, the
state board shall aggregate and make available all of the following:

end insert begin insert

(1) The number of hydrogen-fueled vehicles that motor vehicle
manufacturers project to be sold or leased over the next three
years as reported to the state board pursuant to the Low Emission
Vehicle regulations, as currently established in Section 1961 to
1961.2, inclusive, of Title 13 of the California Code of Regulations.

end insert begin insert

(2) The total number of hydrogen-fueled vehicles registered
with the Department of Motor Vehicles through April 30.

end insert begin insert

(d) On or before June 30, 2014, and every year thereafter, the
state board, based on the information made available pursuant to
subdivision (c), shall do both of the following:

end insert begin insert

(1) Evaluate the need for additional publicly available hydrogen
fueling stations for the subsequent three years in terms of quantity
of fuel needed for the actual and projected number of
hydrogen-fueled vehicles, geographic areas where fuel will be
needed, and station coverage.

end insert begin insert

(2) Report findings to the commission on the need for additional
public hydrogen fueling stations in terms of numbers of stations,
geographic areas where additional stations will be needed, and
minimum operating standards, such as number of dispensers,
filling protocols, and pressures.

end insert begin insert

(e) (1) The commission shall allocate twenty million dollars
($20,000,000) annually to fund the number of stations identified
pursuant to subdivision (d), not to exceed 20 percent of the moneys
appropriated by the Legislature from the Alternative and
Renewable Fuel and Vehicle and Technology Fund, established
pursuant to Section 44273, until there are at least 100 publicly
available hydrogen fueling stations in operation in California.

end insert begin insert

(2) If the commission, in consultation with the state board,
determines that the full amount identified in paragraph (1) is not
needed to fund the number of stations identified by the state board
pursuant to subdivision (d), the commission may allocate any
remaining moneys to other projects, subject to the requirements
of the Alternative and Renewable Fuel and Vehicle Technology
Program pursuant to Article 2 (commencing with Section 44272)
of Chapter 8.9.

end insert begin insert

(3) Allocations by the commission pursuant to this subdivision
shall be subject to all of the requirements applicable to allocations
from the Alternative and Renewable Fuel and Vehicle Technology
Program pursuant to Article 2 (commencing with Section 44272)
of Chapter 8.9.

end insert begin insert

(4) The commission, in consultation with the state board, shall
award funds allocated in paragraph (1) based on best available
data, including information made available pursuant to subdivision
(d), and input from relevant stakeholders, including motor vehicle
manufacturers that have planned deployments of hydrogen-fueled
vehicles, according to a strategy that supports the deployment of
an effective and efficient hydrogen fueling station network in a
way that maximizes benefits to the public while minimizing costs
to the state.

end insert begin delete

(3)

end delete

begin insert (5) end insert  Notwithstanding paragraph (1), once the commission
determines, in consultation with the state board, that the private
sector is establishing publicly available hydrogen fueling stations
without the need for government support, the commission may
cease providing funding for those stations.

begin delete

(4)

end delete

begin insert (6) end insert  On or before December 31, 2015, and annually thereafter,
the commission and the state board shall jointly review and report
on progress toward establishing a hydrogen fueling network that
provides the coverage and capacity to fuel vehicles requiring
hydrogen fuel that are being placed into operation in the state. The
commission and the state board shall consider the following,
including but not limited to, the available plans of automobile
manufacturers to deploy begin delete fuel cell end delete begin insert hydrogen-fueled end insert vehicles in
California and their progress toward achieving those plans, the
rate of begin delete hydrogen fuel cell end delete deployment begin insert end insert begin insert of hydrogen-fueled vehicles end insert ,
the length of time required to permit and construct hydrogen fueling
stations, the coverage and capacity of the existing hydrogen fueling
station network, and the amount and timing of growth in the fueling
network to ensure fuel is available to these vehicles. The review
shall also determine the remaining cost and timing to establish a
network of 100 publicly available hydrogen fueling stations and
whether funding from the Alternative and Renewable Fuel and
Vehicle Technology Program remains necessary to achieve this
goal.

begin delete

(e)

end delete

begin insert (f) end insert  To assist in the implementation of this section and maximize
the ability to deploy fueling infrastructure as rapidly as possible
with the assistance of private capital, the commission may design
grants, loan incentive programs, revolving loan programs, and
other forms of financial assistance. The commission also may enter
into an agreement with the Treasurer to provide financial assistance
to further the purposes of this section.

begin delete

(f)

end delete

begin insert (g) end insert  Funds appropriated to the commission for the purposes of
this section shall be available for encumbrance by the commission
for up to four years from the date of the appropriation and for
liquidation up to four years after expiration of the deadline to
encumber.

begin delete

(g)

end delete

begin insert (h) end insert  Notwithstanding any other law, the state board, in
consultation with air districts, no later than July 1, 2013, shall
convene working groups to evaluate the policies and goals
contained within the Carl Moyer Memorial Air Quality Standards
Attainment Program, pursuant to Section 44280, and Assembly
Bill 923 (Chapter 707 of the Statutes of 2004).

begin delete

SEC. 4.  

Section 43867.5 is added to the Health and Safety
Code, to read:

43867.5.  

The Legislature finds and declares all of the following:

(a) The state overwhelmingly relies on a single source of fuel,
petroleum, for its transportation needs, and nearly one-half of that
petroleum comes from overseas. This overreliance on petroleum
leaves residents vulnerable to supply interruptions and price
instabilities, and it leaves consumers with essentially no options
for alternative transportation fuels.

(b) Residents spend over twenty billion dollars
($20,000,000,000) each year on petroleum fuel imports,
representing a significant missed economic opportunity.

(c) It is in the interest of the state to increase alternative fuels
usage to reduce fuel price volatility, improve environmental quality
and transportation energy security, and demonstrate the state’s
continued leadership in reducing greenhouse gas emissions.

(d) The State Alternative Fuels Plan, which was adopted by the
state board and the State Energy Resources Conservation and
Development Commission pursuant to Section 43866, outlined
specific strategies and targets that would increase the use of
alternative and nonpetroleum fuels. The strategy set a moderate
growth goal of 26 percent penetration for alternative fuel use in
onroad and off-road vehicles by 2022. In 2007, alternative fuels
accounted for less than 5 percent of the transportation sector’s
consumption.

(e) Therefore, it is in the interest of the state to evaluate progress
toward increasing alternative fuels usage.

SEC. 5.  

Section 43867.6 is added to the Health and Safety
Code, to read:

43867.6.  

(a) In order to measure the progress of alternative
fuels use for onroad and off-road vehicles in the state, it is the
intent of the Legislature that the state board and the State Energy
Resources Conservation and Development Commission shall
update the analysis of the state alternative transportation fuels use
described in this section.

(b) The state board and the State Energy Resources Conservation
and Development Commission shall coordinate efforts to
implement this article.

(c) On or before November 1, 2014, the state board and the
State Energy Resources Conservation and Development
Commission shall update the economic analysis used in developing
and reviewing state board regulations to include a range of
petroleum and alternative fuel prices to more accurately assess the
future cost of petroleum based and alternative fuels.

(d) The State Energy Resources Conservation and Development
Commission, in consultation with the state board, shall do all of
the following:

(1) Evaluate how the use of new and existing investment
programs could be used to increase the state alternative
transportation fuels use.

(2) Evaluate how the impact of federal fuel policies and existing
state policies will help increase the use of alternative transportation
fuels in the state.

(e) On or before November 1, 2015, and every two years
thereafter consistent with and reported within the integrated energy
policy report, pursuant to Section 25302 of the Public Resources
Code, the state board and the State Energy Resources Conservation
and Development Commission shall report on the status of the
state alternative transportation fuels use analysis pursuant to
subdivision (a) and make the evaluations required in subdivision
(d). The report shall include details as to the quantities of
alternative fuels used in the state during the preceding years in
absolute terms and as a percentage of the state’s overall
transportation fuel mix.

(f) As part of developing relevant new and amended regulations,
the state board shall include a finding on the effect of proposed
regulations on the state alternative transportation fuels use.

(g) This section shall be implemented consistent with the
environmental, public health, and sustainability considerations
included in Sections 44271 and 44272. Further, this section does
not preempt the California Global Warming Solutions Act of 2006
(Division 25.5 (commencing with Section 38500)) or the programs
and policies implemented pursuant to that act.

(h) The state board and the State Energy Resources Conservation
and Development Commission, in studying the state alternative
transportation fuels use, shall seek to measure all of the following:

(1) In-state job creation through the continued development of
an alternative fuels industry in the state.

(2) Economic vulnerability of residents to future costly
petroleum fuel price spikes by the use of either petroleum fuels or
alternative fuels and vehicles.

(3) Alternative fuel market penetration in nonattainment areas.

(4) Increases in access to the supply of alternative fuels and
alternative fuel vehicles for all residents and barriers to that supply.

end delete

begin delete SEC. 6. end delete
begin insert SEC. 4. end insert   

Section 44060.5 of the Health and Safety Code is
amended to read:

44060.5.  

(a) Beginning July 1, 2008, the smog abatement fee
described in subdivision (d) of Section 44060 shall be increased
by eight dollars ($8).

(b) Revenues generated by the increase described in this section
shall be distributed as follows:

(1) The revenues generated by four dollars ($4) shall be
deposited in the Air Quality Improvement Fund created by Section
44274.5.

(2) The revenues generated by four dollars ($4) shall be
deposited in the Alternative and Renewable Fuel and Vehicle
Technology Fund created by Section 44273.

(c) This section shall remain in effect only until January 1, 2024,
and as of that date is repealed, unless a later enacted statute, that
is enacted before January 1, 2024, deletes or extends that date.

begin delete SEC. 7. end delete
begin insert SEC. 5. end insert   

Section 44225 of the Health and Safety Code, as
amended by Section 3 of Chapter 707 of the Statutes of 2004, is
amended to read:

44225.  

A district may increase the fee established under Section
44223 to up to six dollars ($6). A district may increase the fee only
if the following conditions are met:

(a) A resolution providing for both the fee increase and a
corresponding program for expenditure of the increased fees for
the reduction of air pollution from motor vehicles pursuant to, and
for related planning, monitoring, enforcement, and technical studies
necessary for the implementation of, the California Clean Air Act
of 1988 is adopted and approved by the governing board of the
district.

(b) In districts with nonelected officials on their governing
boards, the resolution shall be adopted and approved by both a
majority of the governing board and a majority of the board
members who are elected officials.

(c) An increase in fees established pursuant to this section shall
become effective on either April 1 or October 1, as provided in
the resolution adopted by the board pursuant to subdivision (a).

(d) This section shall remain in effect only until January 1, 2024,
and as of that date is repealed, unless a later enacted statute, that
is enacted before January 1, 2024, deletes or extends that date.

begin delete SEC. 8. end delete
begin insert SEC. 6. end insert   

Section 44225 of the Health and Safety Code, as added
by Section 3.5 of Chapter 707 of the Statutes of 2004, is amended
to read:

44225.  

A district may increase the fee established under Section
44223 begin delete by end delete begin insert to end insert up to four dollars ($4). A district may increase the fee
only if the following conditions are met:

(a) A resolution providing for both the fee increase and a
corresponding program for expenditure of the increased fees for
the reduction of air pollution from motor vehicles pursuant to, and
for related planning, monitoring, enforcement, and technical studies
necessary for the implementation of, the California Clean Air Act
of 1988 is adopted and approved by the governing board of the
district.

(b) In districts with nonelected officials on their governing
boards, the resolution shall be adopted and approved by both a
majority of the governing board and a majority of the board
members who are elected officials.

(c) An increase in fees established pursuant to this section shall
become effective on either April 1 or October 1, as provided in
the resolution adopted by the board pursuant to subdivision (a).

(d) This section shall become operative on January 1, 2024.

begin delete SEC. 9. end delete
begin insert SEC. 7. end insert   

Section 44229 of the Health and Safety Code, as
amended by Section 2.5 of Chapter 216 of the Statutes of 2011, is
amended to read:

44229.  

(a) After deducting all administrative costs it incurs
through collection of fees pursuant to Section 44227, the
Department of Motor Vehicles shall distribute the revenues to
districts, which shall use the revenues resulting from the first four
dollars ($4) of each fee imposed to reduce air pollution from motor
vehicles and to carry out related planning, monitoring, enforcement,
and technical studies necessary for implementation of the California
Clean Air Act of 1988. Fees collected by the Department of Motor
Vehicles pursuant to this chapter shall be distributed to districts
based upon the amount of fees collected from motor vehicles
registered within each district.

(b) Notwithstanding Sections 44241 and 44243, a district shall
use the revenues resulting from the next two dollars ($2) of each
fee imposed pursuant to Section 44227 to implement the following
programs that the district determines remediate air pollution harms
created by motor vehicles on which the surcharge is imposed:

(1) Projects eligible for grants under the Carl Moyer Memorial
Air Quality Standards Attainment Program (Chapter 9
(commencing with Section 44275) of Part 5).

(2) The new purchase, retrofit, repower, or add-on equipment
for previously unregulated agricultural sources of air pollution, as
defined in Section 39011.5, for a minimum of three years from
the date of adoption of an applicable rule or standard, or until the
compliance date of that rule or standard, whichever is later, if the
state board has determined that the rule or standard complies with
Sections 40913, 40914, and 41503.1, after which period of time,
a new purchase, retrofit, repower, or add-on of equipment shall
not be funded pursuant to this chapter. The districts shall follow
any guidelines developed under subdivision (a) of Section 44287
for awarding grants under this program.

(3) The purchase of new, or retrofit of emissions control
equipment for existing, schoolbuses pursuant to the
Lower-Emission School Bus Program adopted by the state board.

(4) An accelerated vehicle retirement or repair program that is
adopted by the state board pursuant to authority granted hereafter
by the Legislature by statute.

(5) The replacement of onboard natural gas fuel tanks on
schoolbuses owned by a school district that are 14 years or older,
not to exceed twenty thousand dollars ($20,000) per bus, pursuant
to the Lower-Emission School Bus Program adopted by the state
board.

(6) The enhancement of deteriorating natural gas fueling
dispensers of fueling infrastructure operated by a school district
with a one-time funding amount not to exceed five hundred dollars
($500) per dispenser, pursuant to the Lower-Emission School Bus
Program adopted by the state board.

(c) The Department of Motor Vehicles may annually expend
not more than 1 percent of the fees collected pursuant to Section
44227 on administrative costs.

(d) A project funded by the program shall not be used for credit
under any state or federal emissions averaging, banking, or trading
program. An emission reduction generated by the program shall
not be used as marketable emission reduction credits or to offset
any emission reduction obligation of any person or entity. Projects
involving new engines that would otherwise generate marketable
credits under state or federal averaging, banking, and trading
programs shall include transfer of credits to the engine end user
and retirement of those credits toward reducing air emissions in
order to qualify for funding under the program. A purchase of a
low-emission vehicle or of equipment pursuant to a corporate or
a controlling board’s policy, but not otherwise required by law,
shall generate surplus emissions reductions and may be funded by
the program.

(e) This section shall remain in effect only until January 1, 2024,
and as of that date is repealed, unless a later enacted statute, that
is enacted before January 1, 2024, deletes or extends that date.

begin delete SEC. 10. end delete
begin insert SEC. 8. end insert   

Section 44229 of the Health and Safety Code, as added
by Section 4.5 of Chapter 707 of the Statutes of 2004, is amended
to read:

44229.  

(a) After deducting all administrative costs it incurs
through collection of fees pursuant to Section 44227, the
Department of Motor Vehicles shall distribute the revenues to
districts which shall use the fees to reduce air pollution from motor
vehicles and to carry out related planning, monitoring, enforcement,
and technical studies necessary for implementation of the California
Clean Air Act of 1988. Fees collected by the Department of Motor
Vehicles pursuant to this chapter shall be distributed to districts
based upon the amount of fees collected from motor vehicles
registered within each district.

(b) The Department of Motor Vehicles may annually expend
not more than the following percentages of the fees collected
pursuant to Section 44227 on administrative costs:

(1) During the first year after the operative date of this chapter,
not more than 5 percent of the fees collected may be used for
administrative costs.

(2) During the second year after the operative date of this
chapter, not more than 3 percent of the fees collected may be used
for administrative costs.

(3) During any year subsequent to the second year after the
operative date of this chapter, not more than 1 percent of the fees
collected may be used for administrative costs.

(c) This section shall become operative on January 1, 2024.

begin insert

begin insert SEC. 9. end insert   

end insert

begin insert Section 44270.3 of the end insert begin insert Health and Safety Code end insert begin insert is
amended to read: end insert

44270.3.  

For the purposes of this chapter, the following terms
have the following meanings:

begin insert

(a) “Benefit-cost score,” for the Alternative and Renewable
Fuel and Vehicle Technology Program created pursuant to Section
44272, means a project’s expected or potential greenhouse gas
emissions reduction per dollar awarded by the commission to the
project from the Alternative and Renewable Fuel and Vehicle
Technology Fund.

end insert begin delete

(a)

end delete

begin insert (b) end insert  “Commission” means the State Energy Resources
Conservation and Development Commission.

begin delete

(b)

end delete

begin insert (c) end insert  “Full fuel-cycle assessment” or “life-cycle assessment”
means evaluating and comparing the full environmental and health
impacts of each step in the life cycle of a fuel, including, but not
limited to, all of the following:

(1) Feedstock production, extraction, cultivation, transport, and
storage, and the transportation and use of water and changes in
land use and land cover therein.

(2) Fuel production, manufacture, distribution, marketing,
transport, and storage, and the transportation and use of water
therein.

(3) Vehicle operation, including refueling, combustion,
conversion, permeation, and evaporation.

begin delete

(c)

end delete

begin insert (d) end insert  “Vehicle technology” means any vehicle, boat, off-road
equipment, or locomotive, or component thereof, including its
engine, propulsion system, transmission, or construction materials.

begin insert

(e) For purposes of the Air Quality Improvement Program
created pursuant to Section 44274, the following terms have the
following meanings:

end insert begin insert

(1) “Benefit-cost score” means the reasonably expected or
potential criteria pollutant emission reductions achieved per dollar
awarded by the board for the project.

end insert begin insert

(2) “Project” means a category of investments identified for
potential funding by the board, including, but not limited to,
competitive grants, revolving loans, loan guarantees, loans,
vouchers, rebates, and other appropriate funding measures for
specific vehicles, equipment, technologies, or initiatives authorized
by Section 44274.

end insert

begin insert

begin insert SEC. 10. end insert   

end insert

begin insert Section 44271 of the end insert begin insert Health and Safety Code end insert begin insert is
amended to read: end insert

44271.  

(a) This chapter creates the Alternative and Renewable
Fuel and Vehicle Technology Program, pursuant to Section 44272,
to be administered by the commission, and the Air Quality
Improvement Program, pursuant to Section 44274, to be
administered by the state board. The commission and the state
board shall do all of the following in fulfilling their responsibilities
pursuant to their respective programs:

(1) Establish sustainability goals to ensure that alternative and
renewable fuel and vehicle deployment projects, on a full fuel-cycle
assessment basis, will not adversely impact natural resources,
especially state and federal lands.

(2) Establish a competitive process for the allocation of funds
for projects funded pursuant to this chapter begin insert , which considers,
among other factors, the benefit-cost score, as defined in
subdivision (a) of Section 44270.3, associated with a project for
the Alternative and Renewable Fuel and Vehicle Technology
Program or, as defined in paragraph (1) of subdivision (e) of
Section 44270.3, associated with a project, as defined in paragraph
(2) of subdivision (e) of Section 44270.3, for the Air Quality
Improvement Program end insert .

(3) Identify additional federal and private funding opportunities
to augment or complement the programs created pursuant to this
chapter.

(4) Ensure that the results of the reductions in emissions or
benefits can be measured and quantified.

begin insert

(5) Ensure that those revenues derived from fees imposed on
motor vehicles that are expended pursuant to this chapter, as
amended by Senate Bill 11 of the 2013-14 Regular Session of the
Legislature, are expended in compliance with Section 3 of Article
XIX of the California Constitution, as were the revenues derived
from fees imposed on motor vehicles pursuant to Assembly Bill
118 (Chapter 750 of the Statutes of 2007).

end insert

(b) The state board begin insert , in consultation with the commission, end insert shall
develop and adopt guidelines for both the Alternative and
Renewable Fuel and Vehicle Technology Program and the Air
Quality Improvement Program to ensure that programs meet both
of the following requirements:

(1) Activities undertaken pursuant to the programs complement,
and do not interfere with, efforts to achieve and maintain federal
and state ambient air quality standards and to reduce toxic air
contaminant begin insert and greenhouse gas end insert emissions.

(2) Activities undertaken pursuant to the programs maintain or
improve upon emission reductions and air quality benefits in the
State Implementation Plan for Ozone, California Phase 2
Reformulated Gasoline standards, and diesel fuel regulations.

(c) For the purposes of both of the programs created by this
chapter, eligible projects do not include those required to be
undertaken pursuant to state or federal law, district rules or
regulations, memoranda of understanding with a governmental
entity, or legally binding agreements or documents. For the
purposes of the Alternative and Renewable Fuel and Vehicle
Technology Program, the state board shall advise the commission
to ensure the requirements of this subdivision are met.

begin insert

(d) Any customer incentives for light-duty vehicles, including
rebates, shall not be greater than compensations given to
consumers pursuant to Section 44125.

end insert

SEC. 11.  

Section 44272 of the Health and Safety Code is
amended to read:

44272.  

(a) The Alternative and Renewable Fuel and Vehicle
Technology Program is hereby created. The program shall be
administered by the commission. The commission shall implement
the program by regulation pursuant to the requirements of Chapter
3.5 (commencing with Section 11340) of Part 1 of Division 3 of
Title 2 of the Government Code. The program shall provide, upon
appropriation by the Legislature, competitive grants, revolving
loans, loan guarantees, loans, or other appropriate funding
measures, to public agencies, vehicle and technology entities,
businesses and projects, public-private partnerships, workforce
training partnerships and collaboratives, fleet owners, consumers,
recreational boaters, and academic institutions to develop and
deploy innovative technologies that transform California’s fuel
and vehicle types to help attain the state’s climate change policies.
The emphasis of this program shall be to develop and deploy
technology and alternative and renewable fuels in the marketplace,
without adopting any one preferred fuel or technology.

(b) A project that receives more than seventy-five thousand
dollars ($75,000) in funds from the commission shall be approved
at a noticed public meeting of the commission and shall be
consistent with the priorities established by the investment plan
adopted pursuant to Section 44272.5. Under this article, the
commission may delegate to the commission’s executive director,
or his or her designee, the authority to approve either of the
following:

(1) A contract, grant, loan, or other agreement or award that
receives seventy-five thousand dollars ($75,000) or less in funds
from the commission.

(2) Amendments to a contract, grant, loan, or other agreement
or award as long as the amendments do not increase the amount
of the award, change the scope of the project, or modify the purpose
of the agreement.

(c) The commission shall provide preferences to those projects
that maximize the goals of the Alternative and Renewable Fuel
and Vehicle Technology Program, based on the following criteria,
as applicable:

(1) The project’s ability to provide a measurable transition from
the nearly exclusive use of petroleum fuels to a diverse portfolio
of viable alternative fuels that meet petroleum reduction and
alternative fuel use goals.

(2) The project’s consistency with existing and future state
climate change policy and low-carbon fuel standards.

(3) The project’s ability to reduce criteria air pollutants and air
toxics and reduce or avoid multimedia environmental impacts.

(4) The project’s ability to decrease, on a life-cycle basis, the
discharge of water pollutants or any other substances known to
damage human health or the environment, in comparison to the
production and use of California Phase 2 Reformulated Gasoline
or diesel fuel produced and sold pursuant to California diesel fuel
regulations set forth in Article 2 (commencing with Section 2280)
of Chapter 5 of Division 3 of Title 13 of the California Code of
Regulations.

(5) The project does not adversely impact the sustainability of
the state’s natural resources, especially state and federal lands.

(6) The project provides nonstate matching funds. Costs incurred
from the date a proposed award is noticed may be counted as
nonstate matching funds. The commission may adopt further
requirements for the purposes of this paragraph. The commission
is not liable for costs incurred pursuant to this paragraph if the
commission does not give final approval for the project or the
proposed recipient does not meet requirements adopted by the
commission pursuant to this paragraph.

(7) The project provides economic benefits for California by
promoting California-based technology firms, jobs, and businesses.

(8) The project uses existing or proposed fueling infrastructure
to maximize the outcome of the project.

(9) The project’s ability to reduce on a life-cycle assessment
greenhouse gas emissions by at least 10 percent, and higher
percentages in the future, from current reformulated gasoline and
diesel fuel standards established by the state board.

(10) The project’s use of alternative fuel blends of at least 20
percent, and higher blend ratios in the future, with a preference
for projects with higher blends.

(11) The project drives new technology advancement for
vehicles, vessels, engines, and other equipment, and promotes the
deployment of that technology in the marketplace.

begin insert

(d) The commission shall rank applications for projects
proposed for funding awards based on solicitation criteria
developed in accordance with subdivision (c), and shall give
additional preference to funding those projects with higher
benefit-cost scores.

end insert begin delete

(d)

end delete

begin insert (e) end insert  Only the following shall be eligible for funding:

(1) Alternative and renewable fuel projects to develop and
improve alternative and renewable low-carbon fuels, including
electricity, ethanol, dimethyl ether, renewable diesel, natural gas,
hydrogen, and biomethane, among others, and their feedstocks
that have high potential for long-term or short-term
commercialization, including projects that lead to sustainable
feedstocks.

(2) Demonstration and deployment projects that optimize
alternative and renewable fuels for existing and developing engine
technologies.

(3) Projects to produce alternative and renewable low-carbon
fuels in California.

(4) Projects to decrease the overall impact of an alternative and
renewable fuel’s life cycle carbon footprint and increase
sustainability.

(5) Alternative and renewable fuel infrastructure, fueling
stations, and equipment. The preference in paragraph (10) of
subdivision (c) shall not apply to renewable diesel or biodiesel
infrastructure, fueling stations, and equipment used solely for
renewable diesel or biodiesel fuel.

(6) Projects to develop and improve light-, medium-, and
heavy-duty vehicle technologies that provide for better fuel
efficiency and lower greenhouse gas emissions, alternative fuel
usage and storage, or emission reductions, including propulsion
systems, advanced internal combustion engines with a 40 percent
or better efficiency level over the current market standard,
light-weight materials, intelligent transportation systems, energy
storage, control systems and system integration, physical
measurement and metering systems and software, development of
design standards and testing and certification protocols, battery
recycling and reuse, engine and fuel optimization electronic and
electrified components, hybrid technology, plug-in hybrid
technology, battery electric vehicle technology, fuel cell
technology, and conversions of hybrid technology to plug-in
technology through the installation of safety certified supplemental
battery modules.

(7) Programs and projects that accelerate the commercialization
of vehicles and alternative and renewable fuels including buy-down
programs through near-market and market-path deployments,
advanced technology warranty or replacement insurance,
development of market niches, supply-chain development, and
research related to the pedestrian safety impacts of vehicle
technologies and alternative and renewable fuels.

(8) Programs and projects to retrofit medium- and heavy-duty
begin delete on-road end delete begin insert onroad end insert and nonroad vehicle fleets with technologies that
create higher fuel efficiencies, including alternative and renewable
fuel vehicles and technologies, idle management technology, and
aerodynamic retrofits that decrease fuel consumption.

(9) Infrastructure projects that promote alternative and renewable
fuel infrastructure development connected with existing fleets,
public transit, and existing transportation corridors, including
physical measurement or metering equipment and truck stop
electrification.

(10) Workforce training programs related to alternative and
renewable fuel feedstock production and extraction, renewable
fuel production, distribution, transport, and storage,
high-performance and low-emission vehicle technology and high
tower electronics, automotive computer systems, mass transit fleet
conversion, servicing, and maintenance, and other sectors or
occupations related to the purposes of this chapter.

(11) Block grants or incentive programs administered by public
entities or not-for-profit technology entities for multiple projects,
education and program promotion within California, and
development of alternative and renewable fuel and vehicle
technology centers. The commission may adopt guidelines for
implementing the block grant or incentive program, which shall
be approved at a noticed public meeting of the commission.

(12) Life cycle and multimedia analyses, sustainability and
environmental impact evaluations, and market, financial, and
technology assessments performed by a state agency to determine
the impacts of increasing the use of low-carbon transportation fuels
and technologies, and to assist in the preparation of the investment
plan and program implementation.

(13) A program to provide funding for homeowners who
purchase a plug-in electric vehicle to offset costs associated with
modifying electrical sources to include a residential plug-in electric
vehicle charging station. In establishing this program, the
commission shall consider funding criteria to maximize the public
benefit of the program.

begin delete

(e)

end delete

begin insert (f) end insert  The commission may make a single source or sole source
award pursuant to this section for applied research. The same
requirements set forth in Section 25620.5 of the Public Resources
Code shall apply to awards made on a single source basis or a sole
source basis. This subdivision does not authorize the commission
to make a single source or sole source award for a project or
activity other than for applied research.

begin delete

(f)

end delete

begin insert (g) end insert  The commission may do all of the following:

(1) Contract with the Treasurer to expend funds through
programs implemented by the Treasurer, if the expenditure is
consistent with all of the requirements of this article and Article
1 (commencing with Section 44270).

(2) Contract with small business financial development
corporations established by the Business, Transportation and
Housing Agency to expend funds through the Small Business Loan
Guarantee Program if the expenditure is consistent with all of the
requirements of this article and Article 1 (commencing with Section
44270).

(3) Advance funds, pursuant to an agreement with the
commission, to any of the following:

(A) A public entity.

(B) A recipient to enable it to make advance payments to a
public entity that is a subrecipient of the funds and under a binding
and enforceable subagreement with the recipient.

(C) An administrator of a block grant program.

begin insert

begin insert SEC. 12. end insert   

end insert

begin insert Section 44273 of the end insert begin insert Health and Safety Code end insert begin insert is
amended to read: end insert

44273.  

(a) The Alternative and Renewable Fuel and Vehicle
Technology Fund is hereby created in the State Treasury, to be
administered by the commission. The moneys in the fund, upon
appropriation by the Legislature, shall be expended by the
commission to implement the Alternative and Renewable Fuel and
Vehicle Technology Program in accordance with this chapter.

(b) Notwithstanding any other provision of law, the sum of ten
million dollars ($10,000,000) shall be transferred annually from
the Public Interest Research, Development, and Demonstration
Fund created by Section 384 of the Public Utilities Code to the
Alternative and Renewable Fuel and Vehicle Technology Fund.
Prior to the award of any funds from this source, the commission
shall make a determination that the proposed project will provide
benefits to electric or natural gas ratepayers based upon the
commission’s adopted criteria.

(c) Beginning with the integrated energy policy report adopted
in 2011, and in the subsequent reports adopted thereafter, pursuant
to Section 25302 of the Public Resources Code, the commission
shall include an evaluation of research, development, and
deployment efforts funded by this chapter. The evaluation shall
include all of the following:

(1) A list of projects funded by the Alternative and Renewable
Fuel and Vehicle Technology Fund.

(2) The expected benefits of the projects in terms of air quality,
petroleum use reduction, greenhouse gas emissions reduction,
technology advancement, begin insert benefit-cost assessment, end insert and progress
towards achieving these benefits.

(3) The overall contribution of the funded projects toward
promoting a transition to a diverse portfolio of clean, alternative
transportation fuels and reduced petroleum dependency in
California.

(4) Key obstacles and challenges to meeting these goals
identified through funded projects.

(5) Recommendations for future actions.

begin insert

begin insert SEC. 13. end insert   

end insert

begin insert Section 44274 of the end insert begin insert Health and Safety Code end insert begin insert is
amended to read: end insert

44274.  

(a) The Air Quality Improvement Program is hereby
created. The program shall be administered by the state board, in
consultation with the districts. The state board shall develop
guidelines to implement the program. Prior to the adoption of the
guidelines, the state board shall hold at least one public hearing.
In addition, the state board shall hold at least three public
workshops with at least one workshop in northern California, one
in the central valley, and one in southern California. The purpose
of the program shall be to fund, upon appropriation by the
Legislature, air quality improvement projects relating to fuel and
vehicle technologies. The primary purpose of the program shall
be to fund projects to reduce criteria air pollutants, improve air
quality, and provide funding for research to determine and improve
the air quality impacts of alternative transportation fuels and
vehicles, vessels, and equipment technologies.

begin delete

(b) Projects proposed for funding pursuant to subdivision (a)
shall be evaluated based on their proposed or potential reduction
of criteria or toxic air pollutants, cost-effectiveness, contribution
to regional air quality improvement, and ability to promote the use
of clean alternative fuels and vehicle technologies as determined
by the state board, in coordination with the commission.

end delete begin insert

(b) The state board shall provide preference in awarding funding
to those projects with higher benefit-cost scores that maximize the
purposes and goals of the Air Quality Improvement Program. The
state board may also give additional preference based on the
following criteria, as applicable, in funding awards to projects:

end insert begin insert

(1) Proposed or potential reduction of criteria or toxic air
pollutants.

end insert begin insert

(2) Contribution to regional air quality improvement.

end insert begin insert

(3) Ability to promote the use of clean alternative fuels and
vehicle technologies as determined by the state board, in
coordination with the commission.

end insert begin insert

(4) Ability to achieve climate change benefits in addition to
criteria pollutant or air toxic emission reductions.

end insert begin insert

(5) Ability to support market transformation of California’s
vehicle or equipment fleet to utilize low carbon or zero-emission
technologies.

end insert begin insert

(6) Ability to leverage private capital investments.

end insert

(c) The program shall be limited to competitive grants, revolving
loans, loan guarantees, loans, and other appropriate funding
measures that further the purposes of the program. Projects to be
funded shall include only the following:

(1) On- and off-road equipment projects that are cost effective.

(2) Projects that provide mitigation for off-road gasoline exhaust
and evaporative emissions.

(3) Projects that provide research to determine the air quality
impacts of alternative fuels and projects that study the life-cycle
impacts of alternative fuels and conventional fuels, the emissions
of biofuel and advanced reformulated gasoline blends, and air
pollution improvements and control technologies for use with
alternative fuels and vehicles.

(4) Projects that augment the University of California’s
agricultural experiment station and cooperative extension programs
for research to increase sustainable biofuels production and
improve the collection of biomass feedstock.

(5) Incentives for small off-road equipment replacement to
encourage consumers to replace internal combustion engine lawn
and garden equipment.

(6) Incentives for medium- and heavy-duty vehicles and
equipment mitigation, including all of the following:

(A) Lower emission schoolbus programs.

(B) Electric, hybrid, and plug-in hybrid on- and off-road
medium- and heavy-duty equipment.

(C) Regional air quality improvement and attainment programs
implemented by the state or districts in the most impacted regions
of the state.

(7) Workforce training initiatives related to advanced energy
technology designed to reduce air pollution, including
state-of-the-art equipment and goods, and new processes and
systems. Workforce training initiatives funded shall be broad-based
partnerships that leverage other public and private job training
programs and resources. These partnerships may include, though
are not limited to, employers, labor unions, labor-management
partnerships, community organizations, workforce investment
boards, postsecondary education providers including community
colleges, and economic development agencies.

(8) Incentives to identify and reduce emissions from high
emitting light-duty vehicles.

(d) (1) Beginning January 1, 2011, the state board shall submit
to the Legislature a biennial report to evaluate the implementation
of the Air Quality Improvement Program established pursuant to
this chapter.

(2) The report shall include all of the following:

(A) A list of projects funded by the Air Quality Improvement
Account.

(B) The expected benefits of the projects in promoting clean,
alternative fuels and vehicle technologies.

(C) Improvement in air quality and public health, greenhouse
gas emissions reductions, and the progress made toward achieving
these benefits.

(D) The impact of the projects in making progress toward
attainment of state and federal air quality standards.

(E) Recommendations for future actions.

(3) The state board may include the information required to be
reported pursuant to paragraph (1) in an existing report to the
Legislature as the state board deems appropriate.

begin delete SEC. 12. end delete
begin insert SEC. 14. end insert   

Section 44275 of the Health and Safety Code, as
amended by Section 5 of Chapter 707 of the Statutes of 2004, is
amended to read:

44275.  

(a) As used in this chapter, the following terms have
the following meanings:

(1) “Advisory board” means the Carl Moyer Program Advisory
Board created by Section 44297.

(2) “Btu” means British thermal unit.

(3) “Commission” means the State Energy Resources
Conservation and Development Commission.

(4) “Cost-effectiveness” means dollars provided to a project
pursuant to subdivision (d) of Section 44283 for each ton of
covered emission reduction attributed to a project or to the program
as a whole. In calculating cost-effectiveness, one-time grants of
funds made at the beginning of a project shall be annualized using
a time value of public funds or discount rate determined for each
project by the state board, taking into account the interest rate on
bonds, interest earned by state funds, and other factors as
determined appropriate by the state board. Cost-effectiveness shall
be calculated by dividing annualized costs by average annual
emissions reduction. The state board, in consultation with the
districts and concerned members of the public, shall establish
appropriate cost-effective limits for oxides of nitrogen, particulate
matter, and reactive organic gases and a reasonable system for
comparing the cost-effectiveness of proposed projects as described
in subdivision (a) of Section 44283.

(5) “Covered emissions” include emissions of oxides of nitrogen,
particulate matter, and reactive organic gases from any covered
source.

(6) “Covered engine” includes any internal combustion engine
or electric motor and drive powering a covered source.

(7) “Covered source” includes onroad vehicles, off-road
nonrecreational equipment and vehicles, locomotives, diesel marine
vessels, agricultural sources of air pollution, as defined in Section
39011.5, and, as determined by the state board, other high-emitting
engine categories.

(8) “Covered vehicle” includes any vehicle or piece of
equipment powered by a covered engine.

(9) “District” means a county air pollution control district or an
air quality management district.

(10) “Fund” means the Carl Moyer Memorial Air Quality
Standards Attainment Trust Fund created by Section 44299.

(11) “Mobile Source Air Pollution Reduction Review
Committee” means the Mobile Source Air Pollution Reduction
Review Committee created by Section 44244.

(12) “Incremental cost” means the cost of the project less a
baseline cost that would otherwise be incurred by the applicant in
the normal course of business. Incremental costs may include
added lease or fuel costs pursuant to Section 44283 as well as
incremental capital costs.

(13) “New very low emission vehicle” means a heavy-duty
vehicle that qualifies as a very low emission vehicle when it is a
new vehicle, where new vehicle has the same meaning as defined
in Section 430 of the Vehicle Code, or that is modified with the
approval and warranty of the original equipment manufacturer to
qualify as a very low emission vehicle within 12 months of delivery
to an owner for private or commercial use.

(14) “NO_x” means oxides of nitrogen.

(15) “Program” means the Carl Moyer Memorial Air Quality
Standards Attainment Program created by subdivision (a) of
Section 44280.

(16) “Repower” means replacing an engine with a different
engine. The term repower, as used in this chapter, generally refers
to replacing an older, uncontrolled engine with a new,
emissions-certified engine, although replacing an older
emissions-certified engine with a newer engine certified to lower
emissions standards may be eligible for funding under this program.

(17) “Retrofit” means making modifications to the engine and
fuel system such that the retrofitted engine does not have the same
specifications as the original engine.

(18) “Very low emission vehicle” means a heavy-duty vehicle
with emissions significantly lower than otherwise applicable
baseline emission standards or uncontrolled emission levels
pursuant to Section 44282.

(b) This section shall remain in effect only until January 1, 2024,
and as of that date is repealed, unless a later enacted statute, that
is enacted before January 1, 2024, deletes or extends that date.

begin delete SEC. 13. end delete
begin insert SEC. 15. end insert   

Section 44275 of the Health and Safety Code, as
added by Section 5.5 of Chapter 707 of the Statutes of 2004, is
amended to read:

44275.  

(a) As used in this chapter, the following terms have
the following meanings:

(1) “Advisory board” means the Carl Moyer Program Advisory
Board created by Section 44297.

(2) “Btu” means British thermal unit.

(3) “Commission” means the State Energy Resources
Conservation and Development Commission.

(4) “Cost-effectiveness” means dollars provided to a project
pursuant to subdivision (d) of Section 44283 for each ton of NO_x
reduction attributed to a project or to the program as a whole. In
calculating cost-effectiveness, one-time grants of funds made at
the beginning of a project shall be annualized using a time value
of public funds or discount rate determined for each project by the
state board, taking into account the interest rate on bonds, interest
earned by state funds, and other factors as determined appropriate
by the state board. Cost-effectiveness shall be calculated by
dividing annualized costs by average annual emissions reduction
of NO_x in this state.

(5) “Covered engine” includes any internal combustion engine
or electric motor and drive powering a covered source.

(6) “Covered source” includes onroad vehicles of 14,000 pounds
gross vehicle weight rating (GVWR) or greater, off-road
nonrecreational equipment and vehicles, locomotives, diesel marine
vessels, stationary agricultural engines, and, as determined by the
state board, other high-emitting diesel engine categories.

(7) “Covered vehicle” includes any vehicle or piece of
equipment powered by a covered engine.

(8) “District” means a county air pollution control district or an
air quality management district.

(9) “Fund” means the Carl Moyer Memorial Air Quality
Standards Attainment Trust Fund created by Section 44299.

(10) “Mobile Source Air Pollution Reduction Review
Committee” means the Mobile Source Air Pollution Reduction
Review Committee created by Section 44244.

(11) “Incremental cost” means the cost of the project less a
baseline cost that would otherwise be incurred by the applicant in
the normal course of business. Incremental costs may include
added lease or fuel costs pursuant to Section 44283 as well as
incremental capital costs.

(12) “New very low emission vehicle” means a vehicle that
qualifies as a very low emission vehicle when it is a new vehicle,
where new vehicle has the same meaning as defined in Section
430 of the Vehicle Code, or that is modified with the approval and
warranty of the original equipment manufacturer to qualify as a
very low emission vehicle within 12 months of delivery to an
owner for private or commercial use.

(13) “NO_x” means oxides of nitrogen.

(14) “Program” means the Carl Moyer Memorial Air Quality
Standards Attainment Program created by subdivision (a) of
Section 44280.

(15) “Repower” means replacing an engine with a different
engine. The term repower, as used in this chapter, generally refers
to replacing an older, uncontrolled engine with a new,
emissions-certified engine, although replacing an older
emissions-certified engine with a newer engine certified to lower
emissions standards may be eligible for funding under this program.

(16) “Retrofit” means making modifications to the engine and
fuel system such that the retrofitted engine does not have the same
specifications as the original engine.

(17) “Very low emission vehicle” means a vehicle with
emissions significantly lower than otherwise applicable baseline
emission standards or uncontrolled emission levels pursuant to
Section 44282.

(b) This section shall become operative on January 1, 2024.

begin delete SEC. 14. end delete
begin insert SEC. 16. end insert   

Section 44280 of the Health and Safety Code, as
amended by Section 6 of Chapter 707 of the Statutes of 2004, is
amended to read:

44280.  

(a) There is hereby created the Carl Moyer Memorial
Air Quality Standards Attainment Program. The program shall be
administered by the state board in accordance with this chapter.
The administration of the program may be delegated to the districts.

(b) The program shall provide grants to offset the incremental
cost of projects that reduce covered emissions from covered sources
in California. Eligibility for grant awards shall be determined by
the state board, in consultation with the districts, in accordance
with this chapter.

(c) The program shall also provide funding for a fueling
infrastructure demonstration program and for technology
development efforts that are expected to result in commercially
available technologies in the near term that would improve the
ability of the program to achieve its goals. The infrastructure
demonstration and technology development portions of the program
shall be managed by the commission, in consultation with the state
board.

(d) This section shall remain in effect only until January 1, 2024,
and as of that date is repealed, unless a later enacted statute, that
is enacted before January 1, 2024, deletes or extends that date.

begin delete SEC. 15. end delete
begin insert SEC. 17. end insert   

Section 44280 of the Health and Safety Code, as
added by Section 6.5 of Chapter 707 of the Statutes of 2004, is
amended to read:

44280.  

(a) There is hereby created the Carl Moyer Memorial
Air Quality Standards Attainment Program. The program shall be
administered by the state board in accordance with this chapter.
The administration of the program may be delegated to the districts.

(b) The program shall provide grants to offset the incremental
cost of projects that reduce emissions of NO_x from covered sources
in California. Eligibility for grant awards shall be determined by
the state board, in consultation with the districts, in accordance
with this chapter.

(c) The program shall also provide funding for a fueling
infrastructure demonstration program and for technology
development efforts that are expected to result in commercially
available technologies in the near term that would improve the
ability of the program to achieve its goals. The infrastructure
demonstration and technology development portions of the program
shall be managed by the commission, in consultation with the state
board.

(d) This section shall become operative on January 1, 2024.

begin delete SEC. 16. end delete
begin insert SEC. 18. end insert   

Section 44281 of the Health and Safety Code, as
amended by Section 7 of Chapter 707 of the Statutes of 2004, is
amended to read:

44281.  

(a) Eligible projects include, but are not limited to, any
of the following:

(1) Purchase of new very low or zero-emission covered vehicles
or covered heavy-duty engines.

(2) Emission-reducing retrofit of covered engines, or
replacement of old engines powering covered sources with newer
engines certified to more stringent emissions standards than the
engine being replaced, or with electric motors or drives.

(3) Purchase and use of emission-reducing add-on equipment
that has been verified by the state board for covered vehicles.

(4) Development and demonstration of practical, low-emission
retrofit technologies, repower options, and advanced technologies
for covered engines and vehicles with very low emissions of oxides
of nitrogen.

(5) Light- and medium-duty vehicle projects in compliance with
guidelines adopted by the state board pursuant to Title 13 of the
California Code of Regulations.

(b) No project shall be funded under this chapter after the
compliance date required by any local, state, or federal statute,
rule, regulation, memoranda of agreement or understanding, or
other legally binding document, except that an otherwise qualified
project may be funded even if the state implementation plan
assumes that the change in equipment, vehicles, or operations will
occur, if the change is not required by the compliance date of a
statute, regulation, or other legally binding document in effect as
of the date the grant is awarded. No project funded by the program
shall be used for credit under any state or federal emissions
averaging, banking, or trading program. No emission reduction
generated by the program shall be used as marketable emission
reduction credits or to offset any emission reduction obligation of
any person or entity. Projects involving new engines that would
otherwise generate marketable credits under state or federal
averaging, banking, and trading programs shall include transfer
of credits to the engine end user and retirement of those credits
toward reducing air emissions in order to qualify for funding under
the program. A purchase of a low-emission vehicle or of equipment
pursuant to a corporate or a controlling board’s policy, but not
otherwise required by law, shall generate surplus emissions
reductions and may be funded by the program.

(c) The program may also provide funding toward installation
of fueling or electrification infrastructure as provided in Section
44284.

(d) Eligible applicants may be any individual, company, or
public agency that owns one or more covered vehicles that operate
primarily within California or otherwise contribute substantially
to the NO_x, PM, or ROG emissions inventory in California.

(e) It is the intent of the Legislature that all emission reductions
generated by this chapter shall contribute to public health by
reducing, for the life of the vehicle being funded, the total amount
of emissions in California.

(f) This section shall remain in effect only until January 1, 2024,
and as of that date is repealed, unless a later enacted statute, that
is enacted before January 1, 2024, deletes or extends that date.

begin delete SEC. 17. end delete
begin insert SEC. 19. end insert   

Section 44281 of the Health and Safety Code, as
added by Section 7.5 of Chapter 707 of the Statutes of 2004, is
amended to read:

44281.  

(a) Eligible projects are any of the following:

(1) Purchase of new very low or zero-emission covered vehicles
or covered engines.

(2) Emission-reducing retrofit of covered engines, or
replacement of old engines powering covered sources with newer
engines certified to more stringent emissions standards than the
engine being replaced, or with electric motors or drives.

(3) Purchase and use of emission-reducing add-on equipment
for covered vehicles.

(4) Development and demonstration of practical, low-emission
retrofit technologies, repower options, and advanced technologies
for covered engines and vehicles with very low emissions of oxides
of nitrogen.

(b) No new purchase, retrofit, repower, or add-on equipment
shall be funded under this chapter if it is required by any local,
state, or federal statute, rule, regulation, memoranda of agreement
or understanding, or other legally binding document, except that
an otherwise qualified project may be funded even if the state
implementation plan assumes that the change in equipment,
vehicles, or operations will occur, if the change is not required by
a statute, regulation, or other legally binding document in effect
as of the date the grant is awarded. No project funded by the
program shall be used for credit under any state or federal
emissions averaging, banking, or trading program. No emission
reduction generated by the program shall be used as marketable
emission reduction credits or to offset any emission reduction
obligation of any entity. Projects involving new engines that would
otherwise generate marketable credits under state or federal
averaging, banking, and trading programs shall include transfer
of credits to the engine end user and retirement of those credits
toward reducing air emissions in order to qualify for funding under
the program. A purchase of a low-emission vehicle or of equipment
pursuant to a corporate or a controlling board’s policy, but not
otherwise required by law, shall generate surplus emissions
reductions and may be funded by the program.

(c) The program may also provide funding toward installation
of fueling or electrification infrastructure as provided in Section
44284.

(d) Eligible applicants may be any individual, company, or
public agency that owns one or more covered vehicles that operate
primarily within California or otherwise contribute substantially
to the NO_x emissions inventory in California.

(e) It is the intent of the Legislature that all emission reductions
generated by this chapter shall contribute to public health by
reducing, for the life of the vehicle being funded, the total amount
of emissions in California.

(f) This section shall become operative on January 1, 2024.

begin delete SEC. 18. end delete
begin insert SEC. 20. end insert   

Section 44282 of the Health and Safety Code, as
amended by Section 8 of Chapter 707 of the Statutes of 2004, is
amended to read:

44282.  

The following criteria apply to all projects to be funded
through the program except for projects funded through the
Advanced Technology Account and the Infrastructure
Demonstration Program:

(a)  The state board may establish project criteria, including
minimum project life for source categories, in the guidelines
described in Section 44287. For previously unregulated source
categories, project criteria shall consider the timing of newly
established regulatory requirements.

(b) To be eligible, projects shall meet the cost-effectiveness per
ton of covered emissions reduced requirements of Section 44283.

(c) To be eligible, retrofits, repowers, and installation of add-on
equipment for covered vehicles shall be performed, or new covered
vehicles delivered to the end user, or covered vehicles scrapped
on or after the date the program is implemented.

(d) Retrofit technologies, new engines, and new vehicles shall
be certified for sale or under experimental permit for operation in
California.

(e) Repower projects that replace older, uncontrolled engines
with new, emissions-certified engines or that replace
emissions-certified engines with new engines certified to a more
stringent NO_x emissions standard are approvable subject to the
other applicable selection criteria. The state board shall determine
appropriate baseline emission levels for the uncontrolled engines
being replaced.

(f) For heavy-duty-vehicle projects, retrofit and add-on
equipment projects shall document a NO_x or PM emission
reduction of at least 25 percent and no increase in other covered
emissions compared to the applicable baseline emissions accepted
by the state board for that engine year and application. The state
board shall determine appropriate baseline emission levels.
Acceptable documentation shall be defined by the state board.
After study of available emission reduction technologies and after
public notice and comment, the state board may revise the
minimum percentage emission reduction criterion for retrofits and
add-on equipment provided for in this section to improve the ability
of the program to achieve its goals.

(g) (1) For heavy-duty-vehicle projects involving the purchase
of new very low or zero-emission vehicles, engines shall be
certified to an optional low NO_x emissions standard established
by the state board, except as provided for in paragraph (2).

(2) For heavy-duty-vehicle projects involving the purchase of
new very low or zero-emission covered vehicles for which no
optional low NO_x emission standards are available, documentation
shall be provided showing that the low or zero-emission engine
emits not more than 70 percent of the NO_x or NO_x plus
hydrocarbon emissions of a new engine certified to the applicable
baseline NO_x or NO_x plus hydrocarbon emission standard for that
engine and meets applicable particulate standards. The state board
shall specify the documentation required. If no baseline emission
standard exists for new vehicles in a particular category, the state
board shall determine an appropriate baseline emission level for
comparison.

(h) For projects other than heavy-duty-vehicle projects, the state
board shall determine appropriate criteria under the provisions of
Section 44287.

(i) This section shall remain in effect only until January 1, 2024,
and as of that date is repealed, unless a later enacted statute, that
is enacted before January 1, 2024, deletes or extends that date.

begin delete SEC. 19. end delete
begin insert SEC. 21. end insert   

Section 44282 of the Health and Safety Code, as
added by Section 8.5 of Chapter 707 of the Statutes of 2004, is
amended to read:

44282.  

The following criteria apply to all projects to be funded
through the program except for projects funded through the
Advanced Technology Account and the Infrastructure
Demonstration Program:

(a) Except for projects involving marine vessels, 75 percent or
more of vehicle miles traveled or hours of operation shall be
projected to be in California for at least five years following the
grant award. Projects involving marine vessels and engines shall
be limited to those that spend enough time operating in California
air basins over the lifetime of the project to meet the
cost-effectiveness criteria based on NO_x reductions in California,
as provided in Section 44283.

(b) To be eligible, projects shall meet cost-effectiveness per ton
of NO_x reduced requirements of Section 44283.

(c) To be eligible, retrofits, repowers, and installation of add-on
equipment for covered vehicles shall be performed, or new covered
vehicles delivered to the end user, on or after the date the program
is implemented.

(d) Retrofit technologies, new engines, and new vehicles shall
be certified for sale or under experimental permit for operation in
California.

(e) Repower projects that replace older, uncontrolled engines
with new, emissions-certified engines or that replace
emissions-certified engines with new engines certified to a more
stringent NO_x emissions standard are approvable subject to the
other applicable selection criteria. The state board shall determine
appropriate baseline emission levels for the uncontrolled engines
being replaced.

(f) Retrofit and add-on equipment projects shall document a
NO_x emission reduction of at least 25 percent and no increase in
particulate emissions compared to the applicable baseline emissions
accepted by the state board for that engine year and application.
The state board shall determine appropriate baseline emission
levels. Acceptable documentation shall be defined by the state
board. After study of available emission reduction technologies
and after public notice and comment, the state board may revise
the minimum percentage NO_x reduction criterion for retrofits and
add-on equipment provided for in this section to improve the ability
of the program to achieve its goals.

(g) (1) For projects involving the purchase of new very low or
zero-emission vehicles, engines shall be certified to an optional
low NO_x emissions standard established by the state board, except
as provided for in paragraph (2).

(2) For projects involving the purchase of new very low or
zero-emission covered vehicles for which no optional low NO_x
emission standards are available, documentation shall be provided
showing that the low or zero-emission engine emits not more than
70 percent of the NO_x or NO_x plus hydrocarbon emissions of a
new engine certified to the applicable baseline NO_x or NO_x plus
hydrocarbon emission standard for that engine and meets applicable
particulate standards. The state board shall specify the
documentation required. If no baseline emission standard exists
for new vehicles in a particular category, the state board shall
determine an appropriate baseline emission level for comparison.

(h) This section shall become operative on January 1, 2024.

begin delete SEC. 20. end delete
begin insert SEC. 22. end insert   

Section 44283 of the Health and Safety Code, as
amended by Section 1 of Chapter 571 of the Statutes of 2010, is
amended to read:

44283.  

(a) Grants shall not be made for projects with a
cost-effectiveness, calculated in accordance with this section, of
more than thirteen thousand six hundred dollars ($13,600) per ton
of NO_x reduced in California or a higher value that reflects state
consumer price index adjustments on or after January 1, 2006, as
determined by the state board. For projects obtaining reactive
organic gas and particulate matter reductions, the state board shall
determine appropriate adjustment factors to calculate a weighted
cost-effectiveness.

(b) Only covered emission reductions occurring in this state
shall be included in the cost-effectiveness determination. The
extent to which emissions generated at sea contribute to air quality
in California nonattainment areas shall be incorporated into these
methodologies based on a reasonable assessment of currently
available information and modeling assumptions.

(c) The state board shall develop protocols for calculating the
surplus covered emission reductions in California from
representative project types over the life of the project.

(d) The cost of the covered emission reduction is the amount
of the grant from the program, including matching funds provided
pursuant to subdivision (e) of Section 44287, plus any other state
funds, or funds under the district’s budget authority or fiduciary
control, provided toward the project, not including funds described
in paragraphs (1) and (2) of subdivision (a) of Section 44287.2.
The state board shall establish reasonable methodologies for
evaluating project cost-effectiveness, consistent with the definition
contained in paragraph (4) of subdivision (a) of Section 44275,
and with accepted methods, taking into account a fair and
reasonable discount rate or time value of public funds.

(e) A grant shall not be made that, net of taxes, provides the
applicant with funds in excess of the incremental cost of the project.
Incremental lease costs may be capitalized according to guidelines
adopted by the state board so that these incremental costs may be
offset by a one-time grant award.

(f) Funds under a district’s budget authority or fiduciary control
may be used to pay for the incremental cost of liquid or gaseous
fuel, other than standard gasoline or diesel, which is integral to a
covered emission reducing technology that is part of a project
receiving grant funding under the program. The fuel shall be
approved for sale by the state board. The incremental fuel cost
over the expected lifetime of the vehicle may be offset by the
district if the project as a whole, including the incremental fuel
cost, meets all of the requirements of this chapter, including the
maximum allowed cost-effectiveness. The state board shall develop
an appropriate methodology for converting incremental fuel costs
over the vehicle lifetime into an initial cost for the purposes of
determining project cost-effectiveness. Incremental fuel costs shall
not be included in project costs for fuels dispensed from any facility
that was funded, in whole or in part, from the fund.

(g) For purposes of determining any grant amount pursuant to
this chapter, the incremental cost of any new purchase, retrofit,
repower, or add-on equipment shall be reduced by the value of
any current financial incentive that directly reduces the project
price, including any tax credits or deductions, grants, or other
public financial assistance, not including funds described in
paragraphs (1) and (2) of subdivision (a) of Section 44287.2.
Project proponents applying for funding shall be required to state
in their application any other public financial assistance to the
project.

(h) For projects that would repower off-road equipment by
replacing uncontrolled diesel engines with new, certified diesel
engines, the state board may establish maximum grant award
amounts per repower. A repower project shall also be subject to
the incremental cost maximum pursuant to subdivision (e).

(i) After study of available emission reduction technologies and
costs and after public notice and comment, the state board may
reduce the values of the maximum grant award criteria stated in
this section to improve the ability of the program to achieve its
goals. Every year the state board shall adjust the maximum
cost-effectiveness amount established in subdivision (a) and any
per-project maximum set by the state board pursuant to subdivision
(h) to account for inflation.

(j) This section shall remain in effect only until January 1, 2024,
and as of that date is repealed, unless a later enacted statute, that
is enacted before January 1, 2024, deletes or extends that date.

begin delete SEC. 21. end delete
begin insert SEC. 23. end insert   

Section 44283 of the Health and Safety Code, as
amended by Section 2 of Chapter 571 of the Statutes of 2010, is
amended to read:

44283.  

(a) Grants shall not be made for projects with a
cost-effectiveness, calculated in accordance with this section, of
more than twelve thousand dollars ($12,000) per ton of NO_x
reduced in California or a higher value that reflects state consumer
price index adjustments on or after January 1, 2024, as determined
by the state board.

(b) Only NO_x reductions occurring in this state shall be included
in the cost-effectiveness determination. The extent to which
emissions generated at sea contribute to air quality in California
nonattainment areas shall be incorporated into these methodologies
based on a reasonable assessment of currently available information
and modeling assumptions.

(c) The state board shall develop protocols for calculating the
surplus NO_x reductions in California from representative project
types over the life of the project.

(d) The cost of the NO_x reduction is the amount of the grant
from the program, including matching funds provided pursuant to
subdivision (e) of Section 44287, plus any other state funds, or
funds under the district’s budget authority or fiduciary control,
provided toward the project, not including funds described in
paragraphs (1) and (2) of subdivision (a) of Section 44287.2. The
state board shall establish reasonable methodologies for evaluating
project cost-effectiveness, consistent with the definition contained
in paragraph (4) of subdivision (a) of Section 44275, and with
accepted methods, taking into account a fair and reasonable
discount rate or time value of public funds.

(e) A grant shall not be made that, net of taxes, provides the
applicant with funds in excess of the incremental cost of the project.
Incremental lease costs may be capitalized according to guidelines
adopted by the state board so that these incremental costs may be
offset by a one-time grant award.

(f) Funds under a district’s budget authority or fiduciary control
may be used to pay for the incremental cost of liquid or gaseous
fuel, other than standard gasoline or diesel, which is integral to a
NO_x reducing technology that is part of a project receiving grant
funding under the program. The fuel shall be approved for sale by
the state board. The incremental fuel cost over the expected lifetime
of the vehicle may be offset by the district if the project as a whole,
including the incremental fuel cost, meets all of the requirements
of this chapter, including the maximum allowed cost-effectiveness.
The state board shall develop an appropriate methodology for
converting incremental fuel costs over the vehicle lifetime into an
initial cost for the purposes of determining project
cost-effectiveness. Incremental fuel costs shall not be included in
project costs for fuels dispensed from any facility that was funded,
in whole or in part, from the fund.

(g) For purposes of determining any grant amount pursuant to
this chapter, the incremental cost of any new purchase, retrofit,
repower, or add-on equipment shall be reduced by the value of
any current financial incentive that directly reduces the project
price, including any tax credits or deductions, grants, or other
public financial assistance, not including funds described in
paragraphs (1) and (2) of subdivision (a) of Section 44287.2.
Project proponents applying for funding shall be required to state
in their application any other public financial assistance to the
project.

(h) For projects that would repower off-road equipment by
replacing uncontrolled diesel engines with new, certified diesel
engines, the state board may establish maximum grant award
amounts per repower. A repower project shall also be subject to
the incremental cost maximum pursuant to subdivision (e).

(i) After study of available emission reduction technologies and
costs and after public notice and comment, the state board may
reduce the values of the maximum grant award criteria stated in
this section to improve the ability of the program to achieve its
goals. Every year the state board shall adjust the maximum
cost-effectiveness amount established in subdivision (a) and any
per-project maximum set by the state board pursuant to subdivision
(h) to account for inflation.

(j) This section shall become operative on January 1, 2024.

begin delete SEC. 22. end delete
begin insert SEC. 24. end insert   

Section 44287 of the Health and Safety Code, as
amended by Section 10 of Chapter 707 of the Statutes of 2004, is
amended to read:

44287.  

(a) The state board shall establish or update grant
criteria and guidelines consistent with this chapter for covered
vehicle projects as soon as practicable, but not later than January
1, 2006. The adoption of guidelines is exempt from the rulemaking
provisions of the Administrative Procedure Act, Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title
2 of the Government Code. The state board shall solicit input and
comment from the districts during the development of the criteria
and guidelines and shall make every effort to develop criteria and
guidelines that are compatible with existing district programs that
are also consistent with this chapter. Guidelines shall include
protocols to calculate project cost-effectiveness. The grant criteria
and guidelines shall include safeguards to ensure that the project
generates surplus emissions reductions. Guidelines shall enable
and encourage districts to cofund projects that provide emissions
reductions in more than one district. The state board shall make
draft criteria and guidelines available to the public 45 days before
final adoption, and shall hold at least one public meeting to
consider public comments before final adoption. The state board
may develop separate guidelines and criteria for the different types
of eligible projects described in subdivision (a) of Section 44281.

(b) The state board, in consultation with the participating
districts, may propose revisions to the criteria and guidelines
established pursuant to subdivision (a) as necessary to improve
the ability of the program to achieve its goals. A proposed revision
shall be made available to the public 45 days before final adoption
of the revision and the state board shall hold at least one public
meeting to consider public comments before final adoption of the
revision.

(c) The state board shall reserve funds for, and disburse funds
to, districts from the fund for administration pursuant to this section
and Section 44299.1.

(d) The state board shall develop guidelines for a district to
follow in applying for the reservation of funds, in accordance with
this chapter. It is the intent of the Legislature that district
administration of any reserved funds be in accordance with the
project selection criteria specified in Sections 44281, 44282, and
44283 and all other provisions of this chapter. The guidelines shall
be established and published by the state board as soon as
practicable, but not later than January 1, 2006.

(e) Funds shall be reserved by the state board for administration
by a district that adopts an eligible program pursuant to this chapter
and offers matching funds at a ratio of one dollar ($1) of matching
funds committed by the district or the Mobile Source Air Pollution
Reduction Review Committee for every two dollars ($2) committed
from the fund. Funds available to the Mobile Source Air Pollution
Reduction Review Committee may be counted as matching funds
for projects in the South Coast Air Basin only if the committee
approves the use of these funds for matching purposes. Matching
funds may be any funds under the district’s budget authority that
are committed to be expended in accordance with the program.
Funds committed by a port authority or a local government, in
cooperation with a district, to be expended in accordance with the
program may also be counted as district matching funds. Matching
funds provided by a port authority or a local government may not
exceed 30 percent of the total required matching funds in any
district that applies for more than three hundred thousand dollars
($300,000) of the state board funds. Only a district, or a port
authority or a local government teamed with a district, may provide
matching funds.

(f) The state board may adjust the ratio of matching funds
described in subdivision (e), if it determines that an adjustment is
necessary in order to maximize the use of, or the air quality benefits
provided by, the program, based on a consideration of the financial
resources of the district.

(g) Notwithstanding subdivision (e), a district need not provide
matching funds for state board funds allocated to the district for
program outreach activities pursuant to paragraph (4) of subdivision
(a) of Section 44299.1.

(h) A district may include within its matching funds a reasonable
estimate of direct or in-kind costs for assistance in providing
program outreach and application evaluation. In-kind and direct
matching funds shall not exceed 15 percent of the total matching
funds offered by a district. A district may also include within its
matching funds any money spent on or after February 25, 1999,
that would have qualified as matching funds but were not
previously claimed as matching funds.

(i) A district desiring a reservation of funds shall apply to the
state board following the application guidelines established
pursuant to this section. The state board shall approve or disapprove
a district application not later than 60 days after receipt. Upon
approval of any district application, the state board shall
simultaneously approve a reservation of funding for that district
to administer. Reserved funds shall be disbursed to the district so
that funding of a district-approved project is not impeded.

(j) Notwithstanding any other provision of this chapter, districts
and the Mobile Source Air Pollution Reduction Review Committee
shall not use funds collected pursuant to Section 41081 or Chapter
7 (commencing with Section 44220), or pursuant to Section
9250.11 of the Vehicle Code, as matching funds to fund a project
with stationary or portable engines, locomotives, or marine vessels.

(k) Any funds reserved for a district pursuant to this section are
available to the district for a period of not more than two years
from the time of reservation. Funds not expended by June 30 of
the second calendar year following the date of the reservation shall
revert back to the state board as of that June 30, and shall be
deposited in the Covered Vehicle Account established pursuant to
Section 44299. The funds may then be redirected based on
applications to the fund. Regardless of any reversion of funds back
to the state board, the district may continue to request other
reservations of funds for local administration. Each reservation of
funds shall be accounted for separately, and unused funds from
each application shall revert back to the state board as specified
in this subdivision.

(l) The state board shall specify a date each year when district
applications are due. If the eligible applications received in any
year oversubscribe the available funds, the state board shall reserve
funds on an allocation basis, pursuant to Section 44299.2. The
state board may accept a district application after the due date for
a period of months specified by the state board. Funds may be
reserved in response to those applications, in accordance with this
chapter, out of funds remaining after the original reservation of
funds for the year.

(m) Guidelines for a district application shall require information
from an applicant district to the extent necessary to meet the
requirements of this chapter, but shall otherwise minimize the
information required of a district.

(n) A district application shall be reviewed by the state board
immediately upon receipt. If the state board determines that an
application is incomplete, the applicant shall be notified within 10
working days with an explanation of what is missing from the
application. A completed application fulfilling the criteria shall be
approved as soon as practicable, but not later than 60 working days
after receipt.

(o) The commission, in consultation with the districts, shall
establish project approval criteria and guidelines for infrastructure
projects consistent with Section 44284 as soon as practicable, but
not later than February 15, 2000. The commission shall make draft
criteria and guidelines available to the public 45 days before final
adoption, and shall hold at least one public meeting to consider
public comments before final adoption.

(p) The commission, in consultation with the participating
districts, may propose revisions to the criteria and guidelines
established pursuant to subdivision (o) as necessary to improve
the ability of the program to achieve its goals. A revision may be
proposed at any time, or may be proposed in response to a finding
made in the annual report on the program published by the state
board pursuant to Section 44295. A proposed revision shall be
made available to the public 45 days before final adoption of the
revision and the commission shall hold at least one public meeting
to consider public comments before final adoption of the revision.

(q) Unclaimed funds will be allocated by the state board in
accordance with Section 44299.2.

(r) This section shall remain in effect only until January 1, 2024,
and as of that date is repealed, unless a later enacted statute, that
is enacted before January 1, 2024, deletes or extends that date.

begin delete SEC. 23. end delete
begin insert SEC. 25. end insert   

Section 44287 of the Health and Safety Code, as
added by Section 10.5 of Chapter 707 of the Statutes of 2004, is
amended to read:

44287.  

(a) The state board shall establish grant criteria and
guidelines consistent with this chapter for covered vehicle projects
as soon as practicable, but not later than January 1, 2000. The
adoption of guidelines is exempt from the rulemaking provisions
of the Administrative Procedure Act, Chapter 3.5 (commencing
with Section 11340) of Part 1 of Division 3 of Title 2 of the
Government Code. The state board shall solicit input and comment
from the districts during the development of the criteria and
guidelines and shall make every effort to develop criteria and
guidelines that are compatible with existing district programs that
are also consistent with this chapter. Guidelines shall include
protocols to calculate project cost-effectiveness. The grant criteria
and guidelines shall include safeguards to ensure that the project
generates surplus emissions reductions. Guidelines shall enable
and encourage districts to cofund projects that provide emissions
reductions in more than one district. The state board shall make
draft criteria and guidelines available to the public 45 days before
final adoption, and shall hold at least one public meeting to
consider public comments before final adoption.

(b) The state board, in consultation with the participating
districts, may propose revisions to the criteria and guidelines
established pursuant to subdivision (a) as necessary to improve
the ability of the program to achieve its goals. A proposed revision
shall be made available to the public 45 days before final adoption
of the revision and the state board shall hold at least one public
meeting to consider public comments before final adoption of the
revision.

(c) The state board shall reserve funds for, and disburse funds
to, districts from the fund for administration pursuant to this section
and Section 44299.1.

(d) The state board shall develop guidelines for a district to
follow in applying for the reservation of funds, in accordance with
this chapter. It is the intent of the Legislature that district
administration of any reserved funds be in accordance with the
project selection criteria specified in Sections 44281, 44282, and
44283 and all other provisions of this chapter. The guidelines shall
be established and published by the state board as soon as
practicable, but not later than January 1, 2000.

(e) Funds shall be reserved by the state board for administration
by a district that adopts an eligible program pursuant to this chapter
and offers matching funds at a ratio of one dollar ($1) of matching
funds committed by the district or the Mobile Source Air Pollution
Reduction Review Committee for every two dollars ($2) committed
from the fund. Funds available to the Mobile Source Air Pollution
Reduction Review Committee may be counted as matching funds
for projects in the South Coast Air Basin only if the committee
approves the use of these funds for matching purposes. Matching
funds may be any funds under the district’s budget authority that
are committed to be expended in accordance with the program.
Funds committed by a port authority or a local government, in
cooperation with a district, to be expended in accordance with the
program may also be counted as district matching funds. Matching
funds provided by a port authority or a local government may not
exceed 30 percent of the total required matching funds in any
district that applies for more than three hundred thousand dollars
($300,000) of the state board funds. Only a district, or a port
authority or a local government teamed with a district, may provide
matching funds.

(f) The state board may adjust the ratio of matching funds
described in subdivision (e), if it determines that an adjustment is
necessary in order to maximize the use of, or the air quality benefits
provided by, the program, based on a consideration of the financial
resources of the district.

(g) Notwithstanding subdivision (e), a district need not provide
matching funds for state board funds allocated to the district for
program outreach activities pursuant to paragraph (4) of subdivision
(a) of Section 44299.1.

(h) A district may include within its matching funds a reasonable
estimate of direct or in-kind costs for assistance in providing
program outreach and application evaluation. In-kind and direct
matching funds shall not exceed 15 percent of the total matching
funds offered by a district. A district may also include within its
matching funds any money spent on or after February 25, 1999,
that would have qualified as matching funds but were not
previously claimed as matching funds.

(i) A district desiring a reservation of funds shall apply to the
state board following the application guidelines established
pursuant to this section. The state board shall approve or disapprove
a district application not later than 60 days after receipt. Upon
approval of any district application, the state board shall
simultaneously approve a reservation of funding for that district
to administer. Reserved funds shall be disbursed to the district so
that funding of a district-approved project is not impeded.

(j) Notwithstanding any other provision of this chapter, districts
and the Mobile Source Air Pollution Reduction Review Committee
shall not use funds collected pursuant to Section 41081 or Chapter
7 (commencing with Section 44220), or pursuant to Section
9250.11 of the Vehicle Code, as matching funds to fund a project
with stationary or portable engines, locomotives, or marine vessels.

(k) Any funds reserved for a district pursuant to this section are
available to the district for a period of not more than two years
from the time of reservation. Funds not expended by June 30 of
the second calendar year following the date of the reservation shall
revert back to the state board as of that June 30, and shall be
deposited in the Covered Vehicle Account established pursuant to
Section 44299. The funds may then be redirected based on
applications to the fund. Regardless of any reversion of funds back
to the state board, the district may continue to request other
reservations of funds for local administration. Each reservation of
funds shall be accounted for separately, and unused funds from
each application shall revert back to the state board as specified
in this subdivision.

(l) The state board shall specify a date each year when district
applications are due. If the eligible applications received in any
year oversubscribe the available funds, the state board shall reserve
funds on an allocation basis, pursuant to subdivision (b) of Section
44299.1. The state board may accept a district application after
the due date for a period of months specified by the state board.
Funds may be reserved in response to those applications, in
accordance with this chapter, out of funds remaining after the
original reservation of funds for the year.

(m) Guidelines for a district application shall require information
from an applicant district to the extent necessary to meet the
requirements of this chapter, but shall otherwise minimize the
information required of a district.

(n) A district application shall be reviewed by the state board
immediately upon receipt. If the state board determines that an
application is incomplete, the applicant shall be notified within 10
working days with an explanation of what is missing from the
application. A completed application fulfilling the criteria shall be
approved as soon as practicable, but not later than 60 working days
after receipt.

(o) The state board, in consultation with the districts, shall
establish project approval criteria and guidelines for infrastructure
projects consistent with Section 44284 as soon as practicable, but
not later than February 15, 2000. The commission shall make draft
criteria and guidelines available to the public 45 days before final
adoption, and shall hold at least one public meeting to consider
public comments before final adoption.

(p) The state board, in consultation with the participating
districts, may propose revisions to the criteria and guidelines
established pursuant to subdivision (o) as necessary to improve
the ability of the program to achieve its goals. A revision may be
proposed at any time, or may be proposed in response to a finding
made in the annual report on the program published by the state
board pursuant to Section 44295. A proposed revision shall be
made available to the public 45 days before final adoption of the
revision and the commission shall hold at least one public meeting
to consider public comments before final adoption of the revision.

(q) This section shall become operative on January 1, 2024.

begin delete SEC. 24. end delete
begin insert SEC. 26. end insert   

Section 44299.1 of the Health and Safety Code, as
amended by Section 3 of Chapter 627 of the Statutes of 2006, is
amended to read:

44299.1.  

(a) To ensure that emission reductions are obtained
as needed from pollution sources, any money deposited in or
appropriated to the fund shall be segregated and administered as
follows:

(1) Not more than 2 percent of the moneys in the fund shall be
allocated to program support and outreach costs incurred by the
state board and the commission directly associated with
implementing the program pursuant to this chapter. These funds
shall be allocated to the state board and the commission in
proportion to total program funds administered by the state board
and the commission.

(2) Not more than 2 percent of the moneys in the fund shall be
allocated to direct program outreach activities. The state board
may use these funds for program outreach contracts or may allocate
outreach funds to participating air districts in proportion to each
district’s allocation from the Covered Vehicle Account. The state
board shall report on the use of outreach funds in their reports to
the Legislature pursuant to Section 44295.

(3) The balance shall be deposited in the Covered Vehicle
Account to be expended to offset added costs of new very low or
zero-emission vehicle technologies, and emission reducing
repowers, retrofits, and add-on equipment for covered vehicles
and engines, and other projects specified in Section 44281.

(b) Funds in the Covered Vehicle Account shall be allocated to
a district that submits an eligible application to the state board
pursuant to Section 44287. The state board shall determine the
maximum amount of annual funding from the Covered Vehicle
Account that each district may receive. This determination shall
be based on the population in each district as well as the relative
importance of obtaining covered emission reductions in each
district, specifically through the program.

(c) Not more than 5 percent of the moneys allocated pursuant
to this chapter to a district with a population of one million or more
may be used by the district for indirect costs of implementation of
the program, including outreach costs that are subject to the
limitation in paragraph (2) of subdivision (a).

(d) Not more than 10 percent of the moneys allocated pursuant
to this chapter to a district with a population of less than one
million may be used by the district for indirect costs of
implementation of the program, including outreach costs that are
subject to the limitation in paragraph (2) of subdivision (a).

(e) This section shall remain in effect only until January 1, 2024,
and as of that date is repealed, unless a later enacted statute, that
is enacted before January 1, 2024, deletes or extends that date.

begin delete SEC. 25. end delete
begin insert SEC. 27. end insert   

Section 44299.1 of the Health and Safety Code, as
added by Section 11.5 of Chapter 707 of the Statutes of 2004, is
amended to read:

44299.1.  

(a) To ensure that emission reductions are obtained
as needed from pollution sources, any money deposited in or
appropriated to the fund shall be segregated and administered as
follows:

(1) Ten percent, not to exceed two million dollars ($2,000,000),
shall be allocated to the Infrastructure Demonstration Project to
be used pursuant to Section 44284.

(2) Ten percent shall be deposited in the Advanced Technology
Account to be used to support research, development,
demonstration, and commercialization of advanced low-emission
technologies for covered sources that show promise of contributing
to the goals of the program.

(3) Not more than 2 percent of the moneys in the fund shall be
allocated to program support and outreach costs incurred by the
state board and the commission directly associated with
implementing the program pursuant to this chapter. These funds
shall be allocated to the state board and the commission in
proportion to total program funds administered by the state board
and the commission.

(4) Not more than 2 percent of the moneys in the fund shall be
allocated to direct program outreach activities. The state board
may use these funds for program outreach contracts or may allocate
outreach funds to participating air districts in proportion to each
district’s allocation from the Covered Vehicle Account. The state
board shall report on the use of outreach funds in their reports to
the Legislature pursuant to Section 44295.

(5) The balance shall be deposited in the Covered Vehicle
Account to be expended to offset added costs of new very low or
zero-emission vehicle technologies, and emission reducing
repowers, retrofits, and add-on equipment for covered vehicles
and engines.

(b) Funds in the Covered Vehicle Account shall be allocated to
a district that submits an eligible application to the state board
pursuant to Section 44287. The state board shall determine the
maximum amount of annual funding from the Covered Vehicle
Account that each district may receive. This determination shall
be based on the population in each district as well as the relative
importance of obtaining NO_x reductions in each district,
specifically through the program.

(c) This section shall become operative on January 1, 2024.

begin delete SEC. 26. end delete
begin insert SEC. 28. end insert   

Section 44299.2 of the Health and Safety Code is
amended to read:

44299.2.  

Funds shall be allocated to local air pollution control
and air quality management districts, and shall be subject to
administrative terms and conditions as follows:

(a) Available funds shall be distributed to districts taking into
consideration the population of the area, the severity of the air
quality problems experienced by the population, and the historical
allocation of the Carl Moyer Memorial Air Quality Standards
Attainment Trust Fund, except that the south coast district shall
be allocated a percentage of the total funds available to districts
that is proportional to the percentage of the total state population
residing within the jurisdictional boundaries of that district. For
the purposes of this subdivision, population shall be determined
by the state board based on the most recent data provided by the
Department of Finance. The allocation to the south coast district
shall be subtracted from the total funds available to districts. Each
district, except the south coast district, shall be awarded a minimum
allocation of two hundred thousand dollars ($200,000), and the
remainder, which shall be known as the “allocation amount,” shall
be allocated to all districts as follows:

(1) The state board shall distribute 35 percent of the allocation
amount to the districts in proportion to the percentage of the total
residual state population that resides within each district’s
boundaries. For purposes of this paragraph, “total residual state
population” means the total state population, less the total
population that resides within the south coast district.

(2) The state board shall distribute 35 percent of the allocation
amount to the districts in proportion to the severity of the air quality
problems to which each district’s population is exposed. The
severity of the exposure shall be calculated as follows:

(A) Each district shall be awarded severity points based on the
district’s attainment designation and classification, as most recently
promulgated by the federal Environmental Protection Agency for
the National Ambient Air Quality Standard for ozone averaged
over eight hours, as follows:

(i) A district that is designated attainment for the federal
eight-hour ozone standard shall be awarded one point.

(ii) A district that is designated nonattainment for the federal
eight-hour ozone standard shall be awarded severity points based
on classification. Two points shall be awarded for transitional,
basic, or marginal classifications, three points for moderate
classification, four points for serious classification, five points for
severe classification, six points for severe-17 classification, and
seven points for extreme classification.

(B) Each district shall be awarded severity points based on the
annual diesel particulate emissions in the air basin, as determined
by the state board. One point shall be awarded to the district, in
increments, for each 1,000 tons of diesel particulate emissions. In
making this determination, 0 to 999 tons shall be awarded no
points, 1,000 to 1,999 tons shall be awarded one point, 2,000 to
2,999 tons shall be awarded two points, and so forth. If a district
encompasses more than one air basin, the air basin with the greatest
diesel particulate emissions shall be used to determine the points
awarded to the district. The San Diego County Air Pollution
Control District and the Imperial County Air Pollution Control
District shall be awarded one additional point each to account for
annual diesel particulate emissions transported from Mexico.

(C) The points awarded under subparagraphs (A) and (B), shall
be added together for each district, and the total shall be multiplied
by the population residing within the district boundaries, to yield
the local air quality exposure index.

(D) The local air quality exposure index for each district shall
be summed together to yield a total state exposure index. Funds
shall be allocated under this paragraph to each district in proportion
to its local air quality exposure index divided by the total state
exposure index.

(3) The state board shall distribute 30 percent of the allocation
amount to the districts in proportion to the allocation of funds from
the Carl Moyer Memorial Air Quality Standards Attainment Trust
Fund, as follows:

(A) Because each district is awarded a minimum allocation
pursuant to subdivision (a), there shall be no additional minimum
allocation from the Carl Moyer historical allocation funds. The
total amount allocated in this way shall be subtracted from total
funding previously awarded to the district under the Carl Moyer
Memorial Air Quality Standards Attainment Program, and the
remainder, which shall be known as directed funds, shall be
allocated pursuant to subparagraph (B).

(B) Each district with a population that is greater than or equal
to 1 percent of the state’s population shall receive an additional
allocation based on the population of the district and the district’s
relative share of emission reduction commitments in the state
implementation plan to attain the National Ambient Air Quality
Standard for ozone averaged over one hour. This additional
allocation shall be calculated as a percentage share of the directed
funds for each district, derived using a ratio of each district’s share
amount to the base amount, which shall be calculated as follows:

(i) The base amount shall be the total Carl Moyer program funds
allocated by the state board to the districts in the 2002-03 fiscal
year, less the total of the funds allocated through the minimum
allocation to each district in the 2002-03 fiscal year.

(ii) The share amount shall be the allocation that each district
received in the 2002-03 fiscal year, not including the minimum
allocation. There shall be one share amount for each district.

(iii) The percentage share shall be calculated for each district
by dividing the district’s share amount by the base amount, and
multiplying the result by the total directed funds available under
this subparagraph.

(b) Funds shall be distributed as expeditiously as reasonably
practicable, and a report of the distribution shall be made available
to the public.

(c) All funds allocated pursuant to this section shall be expended
as provided in the guidelines adopted pursuant to Section 44287
within two years from the date of allocation. Funds not expended
within the two years shall be returned to the Covered Vehicle
Account within 60 days and shall be subject to further allocation
as follows:

(1) Within 30 days of the deadline to return funds, the state
board shall notify the districts of the total amount of returned funds
available for reallocation, and shall list those districts that request
supplemental funds from the reallocation and that are able to
expend those funds within one year.

(2) Within 90 days of the deadline to return funds, the state
board shall allocate the returned funds to the districts listed
pursuant to paragraph (1).

(3) All supplemental funds distributed under this subdivision
shall be expended consistent with the Carl Moyer Air Quality
Standards Attainment Program within one year of the date of
supplemental allocation. Funds not expended within one year shall
be returned to the Covered Vehicle Account and shall be distributed
at the discretion of the state board to districts, taking into
consideration of each district’s ability to expeditiously utilize the
remaining funds consistent with the Carl Moyer Air Quality
Standards Attainment Program.

(d) This section shall remain in effect only until January 1, 2024,
and as of that date is repealed, unless a later enacted statute, that
is enacted before January 1, 2024, deletes or extends that date.

begin delete SEC. 27. end delete
begin insert SEC. 29. end insert   

Section 42885 of the Public Resources Code, as
amended by Section 55 of Chapter 77 of the Statutes of 2006, is
amended to read:

42885.  

(a) For purposes of this section, “California tire fee”
means the fee imposed pursuant to this section.

(b) (1) Before January 1, 2015, a person who purchases a new
tire, as defined in subdivision (g), shall pay a California tire fee
of one dollar and seventy-five cents ($1.75) per tire.

(2) On and after January 1, 2015, a person who purchases a new
tire, as defined in subdivision (g), shall pay a California tire fee
of one dollar and fifty cents ($1.50) per tire.

(3) The retail seller shall charge the retail purchaser the amount
of the California tire fee as a charge that is separate from, and not
included in, any other fee, charge, or other amount paid by the
retail purchaser.

(4) The retail seller shall collect the California tire fee from the
retail purchaser at the time of sale and may retain 11⁄2 percent of
the fee as reimbursement for any costs associated with the
collection of the fee. The retail seller shall remit the remainder to
the state on a quarterly schedule for deposit in the California Tire
Recycling Management Fund, which is hereby created in the State
Treasury.

(c) The board, or its agent authorized pursuant to Section 42882,
shall be reimbursed for its costs of collection, auditing, and making
refunds associated with the California Tire Recycling Management
Fund, but not to exceed 3 percent of the total annual revenue
deposited in the fund.

(d) The California tire fee imposed pursuant to subdivision (b)
shall be separately stated by the retail seller on the invoice given
to the customer at the time of sale. Any other disposal or
transaction fee charged by the retail seller related to the tire
purchase shall be identified separately from the California tire fee.

(e) A person or business who knowingly, or with reckless
disregard, makes a false statement or representation in a document
used to comply with this section is liable for a civil penalty for
each violation or, for continuing violations, for each day that the
violation continues. Liability under this section may be imposed
in a civil action and shall not exceed twenty-five thousand dollars
($25,000) for each violation.

(f) In addition to the civil penalty that may be imposed pursuant
to subdivision (e), the board may impose an administrative penalty
in an amount not to exceed five thousand dollars ($5,000) for each
violation of a separate provision or, for continuing violations, for
each day that the violation continues, on a person who intentionally
or negligently violates a permit, rule, regulation, standard, or
requirement issued or adopted pursuant to this chapter. The board
shall adopt regulations that specify the amount of the administrative
penalty and the procedure for imposing an administrative penalty
pursuant to this subdivision.

(g) For purposes of this section, “new tire” means a pneumatic
or solid tire intended for use with onroad or off-road motor
vehicles, motorized equipment, construction equipment, or farm
equipment that is sold separately from the motorized equipment,
or a new tire sold with a new or used motor vehicle, as defined in
Section 42803.5, including the spare tire, construction equipment,
or farm equipment. “New tire” does not include retreaded, reused,
or recycled tires.

(h) The California tire fee shall not be imposed on a tire sold
with, or sold separately for use on, any of the following:

(1) A self-propelled wheelchair.

(2) A motorized tricycle or motorized quadricycle, as defined
in Section 407 of the Vehicle Code.

(3) A vehicle that is similar to a motorized tricycle or motorized
quadricycle and is designed to be operated by a person who, by
reason of the person’s physical disability, is otherwise unable to
move about as a pedestrian.

(i) This section shall remain in effect only until January 1, 2024,
and as of that date is repealed, unless a later enacted statute, that
is enacted before January 1, 2024, deletes or extends that date.

begin delete SEC. 28. end delete
begin insert SEC. 30. end insert   

Section 42885 of the Public Resources Code, as added
by Section 13.5 of Chapter 707 of the Statutes of 2004, is amended
to read:

42885.  

(a) For purposes of this section, “California tire fee”
means the fee imposed pursuant to this section.

(b) (1) Every person who purchases a new tire, as defined in
subdivision (g), shall pay a California tire fee of seventy-five cents
($0.75) per tire.

(2) The retail seller shall charge the retail purchaser the amount
of the California tire fee as a charge that is separate from, and not
included in, any other fee, charge, or other amount paid by the
retail purchaser.

(3) The retail seller shall collect the California tire fee from the
retail purchaser at the time of sale and may retain 3 percent of the
fee as reimbursement for any costs associated with the collection
of the fee. The retail seller shall remit the remainder to the state
on a quarterly schedule for deposit in the California Tire Recycling
Management Fund, which is hereby created in the State Treasury.

(c) The board, or its agent authorized pursuant to Section 42882,
shall be reimbursed for its costs of collection, auditing, and making
refunds associated with the California Tire Recycling Management
Fund, but not to exceed 3 percent of the total annual revenue
deposited in the fund.

(d) The California tire fee imposed pursuant to subdivision (b)
shall be separately stated by the retail seller on the invoice given
to the customer at the time of sale. Any other disposal or
transaction fee charged by the retail seller related to the tire
purchase shall be identified separately from the California tire fee.

(e) Any person or business who knowingly, or with reckless
disregard, makes any false statement or representation in any
document used to comply with this section is liable for a civil
penalty for each violation or, for continuing violations, for each
day that the violation continues. Liability under this section may
be imposed in a civil action and shall not exceed twenty-five
thousand dollars ($25,000) for each violation.

(f) In addition to the civil penalty that may be imposed pursuant
to subdivision (e), the board may impose an administrative penalty
in an amount not to exceed five thousand dollars ($5,000) for each
violation of a separate provision or, for continuing violations, for
each day that the violation continues, on any person who
intentionally or negligently violates any permit, rule, regulation,
standard, or requirement issued or adopted pursuant to this chapter.
The board shall adopt regulations that specify the amount of the
administrative penalty and the procedure for imposing an
administrative penalty pursuant to this subdivision.

(g) For purposes of this section, “new tire” means a pneumatic
or solid tire intended for use with onroad or off-road motor
vehicles, motorized equipment, construction equipment, or farm
equipment that is sold separately from the motorized equipment,
or a new tire sold with a new or used motor vehicle, as defined in
Section 42803.5, including the spare tire, construction equipment,
or farm equipment. “New tire” does not include retreaded, reused,
or recycled tires.

(h) The California tire fee may not be imposed on any tire sold
with, or sold separately for use on, any of the following:

(1) Any self-propelled wheelchair.

(2) Any motorized tricycle or motorized quadricycle, as defined
in Section 407 of the Vehicle Code.

(3) Any vehicle that is similar to a motorized tricycle or
motorized quadricycle and is designed to be operated by a person
who, by reason of the person’s physical disability, is otherwise
unable to move about as a pedestrian.

(i) This section shall become operative on January 1, 2024.

begin delete SEC. 29. end delete
begin insert SEC. 31. end insert   

Section 42889 of the Public Resources Code, as
amended by Section 3 of Chapter 333 of the Statutes of 2009, is
amended to read:

42889.  

(a) Commencing January 1, 2005, of the moneys
collected pursuant to Section 42885, an amount equal to
seventy-five cents ($0.75) per tire on which the fee is imposed
shall be transferred by the State Board of Equalization to the Air
Pollution Control Fund. The state board shall expend those moneys,
or allocate those moneys to the districts for expenditure, to fund
programs and projects that mitigate or remediate air pollution
caused by tires in the state, to the extent that the state board or the
applicable district determines that the program or project
remediates air pollution harms created by tires upon which the fee
described in Section 42885 is imposed.

(b) The remaining moneys collected pursuant to Section 42885
shall be used to fund the waste tire program, and shall be
appropriated to the board in the annual Budget Act in a manner
consistent with the five-year plan adopted and updated by the
board. These moneys shall be expended for the payment of refunds
under this chapter and for the following purposes:

(1) To pay the administrative overhead cost of this chapter, not
to exceed 6 percent of the total revenue deposited in the fund
annually, or an amount otherwise specified in the annual Budget
Act.

(2) To pay the costs of administration associated with collection,
making refunds, and auditing revenues in the fund, not to exceed
3 percent of the total revenue deposited in the fund, as provided
in subdivision (c) of Section 42885.

(3) To pay the costs associated with operating the tire recycling
program specified in Article 3 (commencing with Section 42870).

(4) To pay the costs associated with the development and
enforcement of regulations relating to the storage of waste tires
and used tires. The board shall consider designating a city, county,
or city and county as the enforcement authority of regulations
relating to the storage of waste tires and used tires, as provided in
subdivision (c) of Section 42850, and regulations relating to the
hauling of waste and used tires, as provided in subdivision (b) of
Section 42963. If the board designates a local entity for that
purpose, the board shall provide sufficient, stable, and
noncompetitive funding to that entity for that purpose, based on
available resources, as provided in the five-year plan adopted and
updated as provided in subdivision (a) of Section 42885.5. The
board may consider and create, as appropriate, financial incentives
for citizens who report the illegal hauling or disposal of waste tires
as a means of enhancing local and statewide waste tire and used
tire enforcement programs.

(5) To pay the costs of cleanup, abatement, removal, or other
remedial action related to waste tire stockpiles throughout the state,
including all approved costs incurred by other public agencies
involved in these activities by contract with the board. Not less
than six million five hundred thousand dollars ($6,500,000) shall
be expended by the board during each of the following fiscal years
for this purpose: 2001-02 to 2006-07, inclusive.

(6) To make studies and conduct research directed at promoting
and developing alternatives to the landfill disposal of waste tires.

(7) To assist in developing markets and new technologies for
used tires and waste tires. The board’s expenditure of funds for
purposes of this subdivision shall reflect the priorities for waste
management practices specified in subdivision (a) of Section
40051.

(8) To pay the costs associated with implementing and operating
a waste tire and used tire hauler program and manifest system
pursuant to Chapter 19 (commencing with Section 42950).

(9) To pay the costs to create and maintain an emergency
reserve, which shall not exceed one million dollars ($1,000,000).

(10) To pay the costs of cleanup, abatement, or other remedial
action related to the disposal of waste tires in implementing and
operating the Farm and Ranch Solid Waste Cleanup and Abatement
Grant Program established pursuant to Chapter 2.5 (commencing
with Section 48100) of Part 7.

(11) To fund border region activities specified in paragraph (8)
of subdivision (b) of Section 42885.5.

(c) This section shall remain in effect only until January 1, 2024,
and as of that date is repealed, unless a later enacted statute that
is enacted before January 1, 2024, deletes or extends that date.

begin delete SEC. 30. end delete
begin insert SEC. 32. end insert   

Section 42889 of the Public Resources Code, as
amended by Section 4 of Chapter 333 of the Statutes of 2009, is
amended to read:

42889.  

Funding for the waste tire program shall be appropriated
to the board in the annual Budget Act. The moneys in the fund
shall be expended for the payment of refunds under this chapter
and for the following purposes:

(a) To pay the administrative overhead cost of this chapter, not
to exceed 5 percent of the total revenue deposited in the fund
annually, or an amount otherwise specified in the annual Budget
Act.

(b) To pay the costs of administration associated with collection,
making refunds, and auditing revenues in the fund, not to exceed
3 percent of the total revenue deposited in the fund, as provided
in subdivision (b) of Section 42885.

(c) To pay the costs associated with operating the tire recycling
program specified in Article 3 (commencing with Section 42870).

(d) To pay the costs associated with the development and
enforcement of regulations relating to the storage of waste tires
and used tires. The board shall consider designating a city, county,
or city and county as the enforcement authority of regulations
relating to the storage of waste tires and used tires, as provided in
subdivision (c) of Section 42850, and regulations relating to the
hauling of waste and used tires, as provided in subdivision (b) of
Section 42963. If the board designates a local entity for that
purpose, the board shall provide sufficient, stable, and
noncompetitive funding to that entity for that purpose, based on
available resources, as provided in the five-year plan adopted and
updated as provided in subdivision (a) of Section 42885.5. The
board may consider and create, as appropriate, financial incentives
for citizens who report the illegal hauling or disposal of waste tires
as a means of enhancing local and statewide waste tire and used
tire enforcement programs.

(e) To pay the costs of cleanup, abatement, removal, or other
remedial action related to waste tire stockpiles throughout the state,
including all approved costs incurred by other public agencies
involved in these activities by contract with the board. Not less
than six million five hundred thousand dollars ($6,500,000) shall
be expended by the board during each of the following fiscal years
for this purpose: 2001-02 to 2006-07, inclusive.

(f) To fund border region activities specified in paragraph (8)
of subdivision (b) of Section 42885.5.

(g) This section shall become operative on January 1, 2024.

begin delete SEC. 31. end delete
begin insert SEC. 33. end insert   

Section 9250.1 of the Vehicle Code is amended to
read:

9250.1.  

(a) Beginning July 1, 2008, the fee described in Section
9250 shall be increased by three dollars ($3).

(b) Two dollars ($2) of the increase shall be deposited into the
Alternative and Renewable Fuel and Vehicle Technology Fund
created by Section 44273 of the Health and Safety Code, and one
dollar ($1) shall be deposited into the Enhanced Fleet
Modernization Subaccount created by Section 44126 of the Health
and Safety Code.

(c) This section shall remain in effect only until January 1, 2024,
and as of that date is repealed, unless a later enacted statute, that
is enacted before January 1, 2024, deletes or extends that date.

begin delete SEC. 32. end delete
begin insert SEC. 34. end insert   

Section 9250.2 of the Vehicle Code, as amended by
Section 15 of Chapter 707 of the Statutes of 2004, is amended to
read:

9250.2.  

(a) The department, if requested by the Sacramento
Metropolitan Air Quality Management District pursuant to Section
41081 of the Health and Safety Code, shall impose and collect a
surcharge on the registration fees for every motor vehicle registered
in that district, not to exceed the amount of six dollars ($6), as
specified by the governing body of that district.

(b) This section shall remain in effect only until January 1, 2024,
and as of that date is repealed, unless a later enacted statute, that
is enacted before January 1, 2024, deletes or extends that date.

begin delete SEC. 33. end delete
begin insert SEC. 35. end insert   

Section 9250.2 of the Vehicle Code, as added by
Section 15.5 of Chapter 707 of the Statutes of 2004, is amended
to read:

9250.2.  

(a) The department, if requested by the Sacramento
Metropolitan Air Quality Management District pursuant to Section
41081 of the Health and Safety Code, shall impose and collect a
surcharge on the registration fees for every motor vehicle registered
in that district, not to exceed four dollars ($4).

(b) This section shall become operative on January 1, 2024.

begin delete SEC. 34. end delete
begin insert SEC. 36. end insert   

Section 9261.1 of the Vehicle Code is amended to
read:

9261.1.  

(a) Beginning July 1, 2008, the fee described in Section
9261, as adjusted pursuant to Section 1678, shall be increased by
five dollars ($5).

(b) Two dollars and fifty cents ($2.50) of the increase shall be
deposited into the Alternative and Renewable Fuel and Vehicle
Technology Fund created by Section 44273 of the Health and
Safety Code, and two dollars and fifty cents ($2.50) shall be
deposited into the Air Quality Improvement Fund created by
Section 44274.5 of the Health and Safety Code.

(c) This section shall remain in effect only until January 1, 2024,
and as of that date is repealed, unless a later enacted statute, that
is enacted before January 1, 2024, deletes or extends that date.

begin delete SEC. 35. end delete
begin insert SEC. 37. end insert   

Section 9853.6 of the Vehicle Code is amended to
read:

9853.6.  

(a) (1) Beginning July 1, 2008, the fee described in
paragraph (1) of subdivision (b) of Section 9853 shall be increased
by ten dollars ($10).

(2) Five dollars ($5) of the increase shall be deposited into the
Alternative and Renewable Fuel and Vehicle Technology Fund
created by Section 44273 of the Health and Safety Code and five
dollars ($5) shall be deposited into the Air Quality Improvement
Fund created by Section 44274.5 of the Health and Safety Code.

(b) (1) Beginning July 1, 2008, the fee described in paragraph
(2) of subdivision (b) of Section 9853 shall be increased by twenty
dollars ($20).

(2) Ten dollars ($10) of the increase shall be deposited into the
Alternative and Renewable Fuel and Vehicle Technology Fund
created by Section 44273 of the Health and Safety Code and ten
dollars ($10) shall be deposited into the Air Quality Improvement
Fund created by Section 44274.5 of the Health and Safety Code.

(c) This section shall remain in effect only until January 1, 2024,
and as of that date is repealed, unless a later enacted statute, that
is enacted before January 1, 2024, deletes or extends that date.

begin delete SEC. 36. end delete
begin insert SEC. 38. end insert   

This act is an urgency statute necessary for the
immediate preservation of the public peace, health, or safety within
the meaning of Article IV of the Constitution and shall go into
immediate effect. The facts constituting the necessity are:

To ensure stable funding for programs to reduce air pollution
for the protection of the public health and safety, it is necessary
for this measure to take effect immediately.