Amended in Assembly August 6, 2013

Amended in Senate May 28, 2013

Amended in Senate May 15, 2013

Amended in Senate April 18, 2013

Senate BillNo. 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, 44270.3, 44271, 44272, 44273, 44274, 44275, 44280, 44281, 44282, 44283, 44287, 44299.1, and 44299.2 of,begin delete andend delete to add Section 43018.9 to,begin insert and to repeal Section 44299 of,end insert 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, 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. 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.begin insert Existing law creates the enhanced fleet modernization program to provide compensation for the retirement of passenger vehicles, and light-duty and medium-duty trucks that are high polluters.end insert

This bill would provide that thebegin insert stateend insert 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 anybegin delete personend deletebegin insert supplier, as defined,end insert to construct, operate, or provide funding for the construction or operation of any publicly availablebegin delete hydrogen fuelingend deletebegin insert hydrogen-fuelingend insert station. The bill would require the board to aggregate and make available to the public, no later thanbegin delete January 1,end deletebegin insert June 30,end insert 2014, and every year thereafter, the number of hydrogen-fueled vehicles thatbegin delete automobileend deletebegin insert motor vehicleend insert manufacturers project to be sold or leased over the next 3 years, as reported to thebegin insert stateend insert board, and the number of hydrogen-fueled vehicles registered with the Department of Motor Vehicles through April 30. The bill would require the commission to allocate $20 millionbegin delete each fiscal yearend deletebegin insert annuallyend insert, as specified, until there are at least 100 publicly availablebegin delete hydrogen fuelingend deletebegin insert hydrogen-fuelingend insert stations in California. The bill, on or before December 31, 2015, and annually thereafter, would require the commission and the board to jointly review and report on the progress toward establishing abegin delete hydrogen fuelingend deletebegin insert hydrogen-fuelingend insert 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,begin delete 2013end deletebegin insert 2014end insert, would require thebegin insert stateend insert boardbegin delete and air districtsend deletebegin insert, in consultation with air pollution control and air quality management districts,end insert tobegin delete jointlyend delete 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. 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 thebegin delete Enhanced Fleet Modernization Programend deletebegin insert enhanced fleet modernization programend insert for the retirement of certain high polluting vehicles.

(2) 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.

(3) Existing law establishes the Carl Moyer Memorial Air Quality Standards Attainmentbegin delete Program (Carl Moyer program),end deletebegin insert Program,end insert which is administered by thebegin insert stateend insert 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 (NOx).

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 insert The bill also would delete obsolete references and make conforming changes to the Carl Moyer program.end insert

(4) 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.

(5) Existing law authorizes each airbegin delete pollution control and air quality managementend delete districtbegin delete, or district,end delete that has been designated abegin delete stateend deletebegin insert federalend insert nonattainment area by thebegin insert stateend insert board for any motor vehicle air pollutant, except the Sacramentobegin insert Metropolitanend insert Air Quality Management District, to levy a surcharge on the registration fees for every motor vehicle registered in thatbegin insert airend insert district, as specified by the governing body of thebegin insert airend insert district. Existing law requires the Department of Motor Vehicles to collect that surcharge if requested bybegin delete aend deletebegin insert an airend insert district, and requires the department, after deducting its administrative costs, to distribute the revenues to thebegin insert airend insert 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.

(6) 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 imposedbegin delete,end delete be deposited in the Air Pollution Control Fundbegin delete,end deletebegin insert withend insert these moneys to be available upon appropriation by the Legislature for use by thebegin insert stateend insert board andbegin insert airend insert districts for specified purposes. Existing law reduces the tire fee to $0.75 per tire on and after January 1, 2015.

This bill wouldbegin delete, on January 1, 2015,end delete insteadbegin delete establishend deletebegin insert setend insert the tire fee atbegin delete $1.50end deletebegin insert $1.75end insert per tire until January 1, 2024, and reduce the tire fee to $0.75 per tire on and after January 1, 2024.

(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.

This bill would require the commission and thebegin insert stateend insert 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.

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

Vote: 23. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

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

P5    1

SECTION 1.  

Section 41081 of the Health and Safety Code, as
2amended by Section 1.5 of Chapter 216 of the Statutes of 2011, is
3amended to read:

4

41081.  

(a) Subject to Article 3.7 (commencing with Section
553720) of Chapter 4 of Part 1 of Division 2 of Title 5 of the
6Government Code, or with the approval of the board of supervisors
7of each county included, in whole or in part, within the Sacramento
8district, the Sacramento district board may adopt a surcharge on
9the motor vehicle registration fees applicable to all motor vehicles
10registered in those counties within the Sacramento district whose
11boards of supervisors have adopted a resolution approving the
12surcharge. The surcharge shall be collected by the Department of
13Motor Vehicles and, after deducting the department’s
14administrative costs, the remaining funds shall be transferred to
15the Sacramento district. Prior to the adoption of any surcharge
16pursuant to this subdivision, the district board shall make a finding
17that any funds allocated to the district as a result of the adoption
18of a county transportation sales and use tax are insufficient to carry
19out the purposes of this chapter.

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

21(c) After consulting with the Department of Motor Vehicles on
22the feasibility thereof, the Sacramento district board may provide,
P6    1in the surcharge adopted pursuant to subdivision (a), to exempt
2from all or part of the surcharge any category of low-emission
3motor vehicle.

4(d) Funds received by the Sacramento district pursuant to this
5section shall be used by that district as follows:

6(1) The revenues resulting from the first four dollars ($4) of
7each surcharge shall be used to implement reductions in emissions
8from vehicular sources, including, but not limited to, a clean fuels
9program and motor vehicle use reduction measures.

10(2) The revenues resulting from the next two dollars ($2) of
11each surcharge shall be used to implement the following programs
12that achieve emission reductions from vehicular sources and
13off-road engines, to the extent that the district determines the
14program remediates air pollution harms created by motor vehicles
15on which the surcharge is imposed:

16(A) Projects eligible for grants under the Carl Moyer Memorial
17Air Quality Standards Attainment Program (Chapter 9
18(commencing with Section 44275) of Part 5).

19(B) The new purchase, retrofit, repower, or add-on of equipment
20for previously unregulated agricultural sources of air pollution, as
21defined in Section 39011.5, within the Sacramento district, for a
22minimum of three years from the date of adoption of an applicable
23rule or standard, or until the compliance date of that rule or
24standard, whichever is later, if the state board has determined that
25the rule or standard complies with Sections 40913, 40914, and
2641503.1, after which period of time, a new purchase, retrofit,
27repower, or add-on of equipment shall not be funded pursuant to
28this chapter. The district shall follow any guidelines developed
29under subdivision (a) of Section 44287 for awarding grants under
30this program.

31(C) The purchase of new, or retrofit of emissions control
32equipment for existing, schoolbuses pursuant to the
33Lower-Emission School Bus Program adopted by the state board.

34(D) An accelerated vehicle retirement or repair program that is
35adopted by the state board pursuant to authority granted hereafter
36by the Legislature by statute.

37(E) The replacement of onboard natural gas fuel tanks on
38schoolbuses owned by a school district that are 14 years or older,
39not to exceed twenty thousand dollars ($20,000) per bus, pursuant
P7    1to the Lower-Emission School Bus Program adopted by the state
2board.

3(F) The enhancement of deteriorating natural gas fueling
4dispensers of fueling infrastructure operated by a school district
5with a one-time funding amount not to exceed five hundred dollars
6($500) per dispenser, pursuant to the Lower-Emission School Bus
7Program adopted by the state board.

8(e) Not more than 5 percent of the funds collected pursuant to
9this section shall be used by the district for administrative expenses.

10(f) A project funded by the program shall not be used for credit
11under any state or federal emissions averaging, banking, or trading
12program. An emission reduction generated by the program shall
13not be used as marketable emission reduction credits or to offset
14any emission reduction obligation of any person or entity. Projects
15involving new engines that would otherwise generate marketable
16credits under state or federal averaging, banking, and trading
17programs shall include transfer of credits to the engine end user
18and retirement of those credits toward reducing air emissions in
19 order to qualify for funding under the program. A purchase of a
20low-emission vehicle or of equipment pursuant to a corporate or
21a controlling board’s policy, but not otherwise required by law,
22shall generate surplus emissions reductions and may be funded by
23the program.

24(g) This section shall remain in effect only until January 1, 2024,
25and as of that date is repealed, unless a later enacted statute, that
26is enacted before January 1, 2024, deletes or extends that date.

27

SEC. 2.  

Section 41081 of the Health and Safety Code, as added
28by Section 2.5 of Chapter 707 of the Statutes of 2004, is amended
29to read:

30

41081.  

(a) Subject to Article 3.7 (commencing with Section
3153720) of Chapter 4 of Part 1 of Division 2 of Title 5 of the
32Government Code, or with the approval of the board of supervisors
33of each county included, in whole or in part, within the Sacramento
34district, the Sacramento district board may adopt a surcharge on
35the motor vehicle registration fees applicable to all motor vehicles
36registered in those counties within the Sacramento district whose
37boards of supervisors have adopted a resolution approving the
38surcharge. The surcharge shall be collected by the Department of
39Motor Vehicles and, after deducting the department’s
40administrative costs, the remaining funds shall be transferred to
P8    1the Sacramento district. Prior to the adoption of any surcharge
2pursuant to this subdivision, the district board shall make a finding
3that any funds allocated to the district as a result of the adoption
4of a county transportation sales and use tax are insufficient to carry
5out the purposes of this chapter.

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

7(c) After consulting with the Department of Motor Vehicles on
8the feasibility thereof, the Sacramento district board may provide,
9in the surcharge adopted pursuant to subdivision (a), to exempt
10from all or part of the surcharge any category of low-emission
11motor vehicle.

12(d) Funds received by the Sacramento district pursuant to this
13section shall be used to implement the strategy with respect to the
14reduction in emissions from vehicular sources, including, but not
15limited to, a clean fuels program and motor vehicle use reduction
16measures. Not more than 5 percent of the funds collected pursuant
17to this section shall be used by the district for administrative
18expenses.

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

20

SEC. 3.  

Section 43018.9 is added to the Health and Safety
21Code
, to read:

22

43018.9.  

(a) For purposes of this section, the following terms
23have the following meanings:

24(1) “Commission” means the State Energy Resources
25Conservation and Development Commission.

26(2) “Publicly availablebegin delete hydrogen fuelingend deletebegin insert hydrogen-fuelingend insert
27 station” means the equipment used to store and dispense hydrogen
28fuel to vehicles according to industry codes and standards that is
29open to the public.

30(b) (1) Notwithstanding any other law, the state board shall
31have no authority to enforce any element of its existing clean fuels
32outlet regulation or of any other regulation that requires or has the
33effect of requiring that anybegin delete personend deletebegin insert supplier, as defined in Section
347338 of the Revenue and Taxation Code as in effect on May 22,
352013,end insert
construct, operate, or provide funding for the construction
36or operation of any publicly availablebegin delete hydrogen fuelingend delete
37begin insert hydrogen-fuelingend insert station.

38(2) This subdivision shall become inoperative on January 1,
392024.

P9    1(c) On or before June 30, 2014, and every year thereafter, the
2state board shall aggregate and make available all of the following:

3(1) The number of hydrogen-fueled vehicles that motor vehicle
4manufacturers project to be sold or leased over the next three years
5as reported to the state board pursuant to the Low Emission Vehicle
6regulations, as currently established inbegin delete Sectionend deletebegin insert Sectionsend insert 1961 to
71961.2, inclusive, of Title 13 of the California Code of Regulations.

8(2) The total number of hydrogen-fueled vehicles registered
9with the Department of Motor Vehicles through April 30.

10(d) On or before June 30, 2014, and every year thereafter, the
11state board, based on the information made available pursuant to
12subdivision (c), shall do both of the following:

13(1) Evaluate the need for additional publicly availablebegin delete hydrogen
14fuelingend delete
begin insert hydrogen-fuelingend insert stations for the subsequent three years
15in terms of quantity of fuel needed for the actual and projected
16number of hydrogen-fueled vehicles, geographic areas where fuel
17will be needed, and station coverage.

18(2) Report findings to the commission on the need for additional
19begin delete public hydrogen fuelingend deletebegin insert publicly available hydrogen-fuelingend insert
20 stations in terms ofbegin delete numbersend deletebegin insert numberend insert of stations, geographic areas
21where additional stations will be needed, and minimum operating
22standards, such as number of dispensers, filling protocols, and
23pressures.

24(e) (1) The commission shall allocate twenty million dollars
25($20,000,000) annually to fund the number of stations identified
26pursuant to subdivision (d), not to exceed 20 percent of the moneys
27appropriated by the Legislature from the Alternative and
28Renewable Fuel and Vehiclebegin delete andend delete Technology Fund, established
29pursuant to Section 44273, until there are at least 100 publicly
30availablebegin delete hydrogen fuelingend deletebegin insert hydrogen-fuelingend insert stations in operation
31in California.

32(2) If the commission, in consultation with the state board,
33determines that the full amount identified in paragraph (1) is not
34needed to fund the number of stations identified by the state board
35pursuant to subdivision (d), the commission may allocate any
36remaining moneys to other projects, subject to the requirements
37of the Alternative and Renewable Fuel and Vehicle Technology
38Program pursuant to Article 2 (commencing with Section 44272)
39of Chapter 8.9.

P10   1(3) Allocations by the commission pursuant to this subdivision
2 shall be subject to all of the requirements applicable to allocations
3from the Alternative and Renewable Fuel and Vehicle Technology
4Program pursuant to Article 2 (commencing with Section 44272)
5of Chapter 8.9.

6(4) The commission, in consultation with the state board, shall
7awardbegin delete fundsend deletebegin insert moneysend insert allocated in paragraph (1) based on best
8available data, including information made available pursuant to
9subdivision (d), and input from relevant stakeholders, including
10motor vehicle manufacturers that have planned deployments of
11hydrogen-fueled vehicles, according to a strategy that supports the
12deployment of an effective and efficientbegin delete hydrogen fuelingend delete
13begin insert hydrogen-fuelingend insert station network in a way that maximizes benefits
14to the public while minimizing costs to the state.

15(5) Notwithstanding paragraph (1), once the commission
16determines, in consultation with the state board, that the private
17sector is establishing publicly availablebegin delete hydrogen fuelingend delete
18begin insert hydrogen-fuelingend insert stations without the need for government support,
19the commission may cease providing funding for those stations.

20(6) On or before December 31, 2015, and annually thereafter,
21the commission and the state board shall jointly review and report
22on progress toward establishing abegin delete hydrogen fuelingend delete
23begin insert hydrogen-fuelingend insert network that provides the coverage and capacity
24to fuel vehicles requiring hydrogen fuel that are being placed into
25operation in the state. The commission and the state board shall
26consider the following, including but not limited to, the available
27plans of automobile manufacturers to deploy hydrogen-fueled
28vehicles in California and their progress toward achieving those
29plans, the rate of deployment of hydrogen-fueled vehicles, the
30length of time required to permit and constructbegin delete hydrogen fuelingend delete
31begin insert hydrogen-fuelingend insert stations, the coverage and capacity of the existing
32begin delete hydrogen fuelingend deletebegin insert hydrogen-fuelingend insert station network, and the amount
33and timing of growth in the fueling network to ensure fuel is
34available to these vehicles. The review shall also determine the
35remaining cost and timing to establish a network of 100 publicly
36availablebegin delete hydrogen fuelingend deletebegin insert hydrogen-fuelingend insert stations and whether
37funding from the Alternative and Renewable Fuel and Vehicle
38Technology Program remains necessary to achieve this goal.

39(f) To assist in the implementation of this section and maximize
40the ability to deploy fueling infrastructure as rapidly as possible
P11   1with the assistance of private capital, the commission may design
2grants, loan incentive programs, revolving loan programs, and
3other forms of financial assistance. The commission also may enter
4into an agreement with the Treasurer to provide financial assistance
5to further the purposes of this section.

6(g) Funds appropriated to the commission for the purposes of
7this section shall be available for encumbrance by the commission
8for up to four years from the date of the appropriation and for
9liquidation up to four years after expiration of the deadline to
10encumber.

11(h) Notwithstanding any other law, the state board, in
12consultation withbegin delete airend delete districts, no later than July 1,begin delete 2013end deletebegin insert 2014end insert, shall
13convene working groups to evaluate the policies and goals
14contained within the Carl Moyer Memorial Air Quality Standards
15Attainment Program, pursuant to Section 44280, and Assembly
16Bill 923 (Chapter 707 of the Statutes of 2004).

17

SEC. 4.  

Section 44060.5 of the Health and Safety Code is
18amended to read:

19

44060.5.  

(a) Beginning July 1, 2008, the smog abatement fee
20described in subdivision (d) of Section 44060 shall be increased
21by eight dollars ($8).

22(b) Revenues generated by the increase described in this section
23shall be distributed as follows:

24(1) The revenues generated by four dollars ($4) shall be
25deposited in the Air Quality Improvement Fund created by Section
2644274.5.

27(2) The revenues generated by four dollars ($4) shall be
28deposited in the Alternative and Renewable Fuel and Vehicle
29Technology Fund created by Section 44273.

30(c) This section shall remain in effect only until January 1, 2024,
31and as of that date is repealed, unless a later enacted statute, that
32is enacted before January 1, 2024, deletes or extends that date.

33

SEC. 5.  

Section 44225 of the Health and Safety Code, as
34amended by Section 3 of Chapter 707 of the Statutes of 2004, is
35amended to read:

36

44225.  

A district may increase the fee established under Section
3744223 to up to six dollars ($6). A district may increase the fee only
38if the following conditions are met:

39(a) A resolution providing for both the fee increase and a
40corresponding program for expenditure of the increased fees for
P12   1the reduction of air pollution from motor vehicles pursuant to, and
2for related planning, monitoring, enforcement, and technical studies
3necessary for the implementation of, the California Clean Air Act
4of 1988 is adopted and approved by the governing board of the
5district.

6(b) In districts with nonelected officials on their governing
7boards, the resolution shall be adopted and approved by both a
8 majority of the governing board and a majority of the board
9members who are elected officials.

10(c) An increase in fees established pursuant to this section shall
11become effective on either April 1 or October 1, as provided in
12the resolution adopted by the board pursuant to subdivision (a).

13(d) This section shall remain in effect only until January 1, 2024,
14and as of that date is repealed, unless a later enacted statute, that
15is enacted before January 1, 2024, deletes or extends that date.

16

SEC. 6.  

Section 44225 of the Health and Safety Code, as added
17 by Section 3.5 of Chapter 707 of the Statutes of 2004, is amended
18to read:

19

44225.  

A district may increase the fee established under Section
2044223 to up to four dollars ($4). A district may increase the fee
21only if the following conditions are met:

22(a) A resolution providing for both the fee increase and a
23corresponding program for expenditure of the increased fees for
24the reduction of air pollution from motor vehicles pursuant to, and
25for related planning, monitoring, enforcement, and technical studies
26necessary for the implementation of, the California Clean Air Act
27of 1988 is adopted and approved by the governing board of the
28district.

29(b) In districts with nonelected officials on their governing
30boards, the resolution shall be adopted and approved by both a
31 majority of the governing board and a majority of the board
32members who are elected officials.

33(c) An increase in fees established pursuant to this section shall
34become effective on either April 1 or October 1, as provided in
35the resolution adopted by the board pursuant to subdivision (a).

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

37

SEC. 7.  

Section 44229 of the Health and Safety Code, as
38amended by Section 2.5 of Chapter 216 of the Statutes of 2011, is
39amended to read:

P13   1

44229.  

(a) After deducting all administrative costs it incurs
2through collection of fees pursuant to Section 44227, the
3Department of Motor Vehicles shall distribute the revenues to
4districts, which shall use the revenues resulting from the first four
5dollars ($4) of each fee imposed to reduce air pollution from motor
6vehicles and to carry out related planning, monitoring, enforcement,
7and technical studies necessary for implementation of the California
8Clean Air Act of 1988. Fees collected by the Department of Motor
9Vehicles pursuant to this chapter shall be distributed to districts
10based upon the amount of fees collected from motor vehicles
11registered within each district.

12(b) Notwithstanding Sections 44241 and 44243, a district shall
13use the revenues resulting from the next two dollars ($2) of each
14fee imposed pursuant to Section 44227 to implement the following
15programs that the district determines remediate air pollution harms
16created by motor vehicles on which the surcharge is imposed:

17(1) Projects eligible for grants under the Carl Moyer Memorial
18Air Quality Standards Attainment Program (Chapter 9
19(commencing with Section 44275) of Part 5).

20(2) The new purchase, retrofit, repower, or add-on equipment
21for previously unregulated agricultural sources of air pollution, as
22defined in Section 39011.5, for a minimum of three years from
23the date of adoption of an applicable rule or standard, or until the
24compliance date of that rule or standard, whichever is later, if the
25state board has determined that the rule or standard complies with
26Sections 40913, 40914, and 41503.1, after which period of time,
27a new purchase, retrofit, repower, or add-on of equipment shall
28not be funded pursuant to this chapter. The districts shall follow
29any guidelines developed under subdivision (a) of Section 44287
30for awarding grants under this program.

31(3) The purchase of new, or retrofit of emissions control
32equipment for existing, schoolbuses pursuant to the
33Lower-Emission School Bus Program adopted by the state board.

34(4) An accelerated vehicle retirement or repair program that is
35adopted by the state board pursuant to authority granted hereafter
36by the Legislature by statute.

37(5) The replacement of onboard natural gas fuel tanks on
38schoolbuses owned by a school district that are 14 years or older,
39not to exceed twenty thousand dollars ($20,000) per bus, pursuant
P14   1to the Lower-Emission School Bus Program adopted by the state
2board.

3(6) The enhancement of deteriorating natural gas fueling
4dispensers of fueling infrastructure operated by a school district
5with a one-time funding amount not to exceed five hundred dollars
6($500) per dispenser, pursuant to the Lower-Emission School Bus
7Program adopted by the state board.

8(c) The Department of Motor Vehicles may annually expend
9not more than 1 percent of the fees collected pursuant to Section
1044227 on administrative costs.

11(d) A project funded by the program shall not be used for credit
12under any state or federal emissions averaging, banking, or trading
13program. An emission reduction generated by the program shall
14not be used as marketable emission reduction credits or to offset
15any emission reduction obligation of any person or entity. Projects
16involving new engines that would otherwise generate marketable
17credits under state or federal averaging, banking, and trading
18programs shall include transfer of credits to the engine end user
19and retirement of those credits toward reducing air emissions in
20order to qualify for funding under the program. A purchase of a
21low-emission vehicle or of equipment pursuant to a corporate or
22a controlling board’s policy, but not otherwise required by law,
23shall generate surplus emissions reductions and may be funded by
24the program.

25(e) This section shall remain in effect only until January 1, 2024,
26and as of that date is repealed, unless a later enacted statute, that
27is enacted before January 1, 2024, deletes or extends that date.

28

SEC. 8.  

Section 44229 of the Health and Safety Code, as added
29by Section 4.5 of Chapter 707 of the Statutes of 2004, is amended
30to read:

31

44229.  

(a) After deducting all administrative costs it incurs
32through collection of fees pursuant to Section 44227, the
33Department of Motor Vehicles shall distribute the revenues to
34districts which shall use the fees to reduce air pollution from motor
35vehicles and to carry out related planning, monitoring, enforcement,
36and technical studies necessary for implementation of the California
37Clean Air Act of 1988. Fees collected by the Department of Motor
38Vehicles pursuant to this chapter shall be distributed to districts
39based upon the amount of fees collected from motor vehicles
40registered within each district.

P15   1(b) The Department of Motor Vehicles may annually expend
2not more than the following percentages of the fees collected
3 pursuant to Section 44227 on administrative costs:

4(1) During the first year after the operative date of this chapter,
5not more than 5 percent of the fees collected may be used for
6administrative costs.

7(2) During the second year after the operative date of this
8chapter, not more than 3 percent of the fees collected may be used
9for administrative costs.

10(3) During any year subsequent to the second year after the
11operative date of this chapter, not more than 1 percent of the fees
12collected may be used for administrative costs.

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

14

SEC. 9.  

Section 44270.3 of the Health and Safety Code is
15amended to read:

16

44270.3.  

For the purposes of this chapter, the following terms
17have the following meanings:

18(a) “Benefit-cost score,” for the Alternative and Renewable Fuel
19and Vehicle Technology Program created pursuant to Section
2044272, means a project’s expected or potential greenhouse gas
21emissions reduction per dollar awarded by the commission to the
22project from the Alternative and Renewable Fuel and Vehicle
23Technology Fund.

24(b) “Commission” means the State Energy Resources
25Conservation and Development Commission.

26(c) “Full fuel-cycle assessment” or “life-cycle assessment”
27means evaluating and comparing the full environmental and health
28impacts of each step in the life cycle of a fuel, including, but not
29limited to, all of the following:

30(1) Feedstock production, extraction, cultivation, transport, and
31storage, and the transportation and use of water and changes in
32land use and land cover therein.

33(2) Fuel production, manufacture, distribution, marketing,
34transport, and storage, and the transportation and use of water
35therein.

36(3) Vehicle operation, including refueling, combustion,
37conversion, permeation, and evaporation.

38(d) “Vehicle technology” means any vehicle, boat, off-road
39equipment, or locomotive, or component thereof, including its
40engine, propulsion system, transmission, or construction materials.

P16   1(e) For purposes of the Air Quality Improvement Program
2created pursuant to Section 44274, the following terms have the
3following meanings:

4(1) “Benefit-cost score” means the reasonably expected or
5potential criteria pollutant emission reductions achieved per dollar
6awarded by the board for the project.

7(2) “Project” means a category of investments identified for
8potential funding by the board, including, but not limited to,
9competitive grants, revolving loans, loan guarantees, loans,
10vouchers, rebates, and other appropriate funding measures for
11specific vehicles, equipment, technologies, or initiatives authorized
12by Section 44274.

13

SEC. 10.  

Section 44271 of the Health and Safety Code is
14amended to read:

15

44271.  

(a) This chapter creates the Alternative and Renewable
16Fuel and Vehicle Technology Program, pursuant to Section 44272,
17to be administered by the commission, and the Air Quality
18Improvement Program, pursuant to Section 44274, to be
19administered by the state board. The commission and the state
20board shall do all of the following in fulfilling their responsibilities
21pursuant to their respective programs:

22(1) Establish sustainability goals to ensure that alternative and
23renewable fuel and vehicle deployment projects, on a full fuel-cycle
24assessment basis, will not adversely impact natural resources,
25especially state and federal lands.

26(2) Establish a competitive process for the allocation of funds
27for projects funded pursuant to this chapter, which considers,
28among other factors, the benefit-cost score, as defined in
29subdivision (a) of Section 44270.3, associated with a project for
30the Alternative and Renewable Fuel and Vehicle Technology
31Program or, as defined in paragraph (1) of subdivision (e) of
32Section 44270.3, associated with a project, as defined in paragraph
33(2) of subdivision (e) of Section 44270.3, for the Air Quality
34Improvement Program.

35(3) Identify additional federal and private funding opportunities
36to augment or complement the programs created pursuant to this
37chapter.

38(4) Ensure that the results of the reductions in emissions or
39benefits can be measured and quantified.

P17   1(5) Ensure that those revenues derived from fees imposed on
2motor vehicles that are expended pursuant to this chapter, as
3amended by Senate Bill 11 of the 2013-14 Regular Session of the
4Legislature, are expended in compliance with Section 3 of Article
5XIX of the California Constitution, as were the revenues derived
6from fees imposed on motor vehicles pursuant to Assembly Bill
7118 (Chapter 750 of the Statutes of 2007).

8(b) The state board, in consultation with the commission, shall
9develop and adopt guidelines for both the Alternative and
10Renewable Fuel and Vehicle Technology Program and the Air
11Quality Improvement Program to ensure that programs meet both
12of the following requirements:

13(1) Activities undertaken pursuant to the programs complement,
14and do not interfere with, efforts to achieve and maintain federal
15and state ambient air quality standards and to reduce toxic air
16contaminant and greenhouse gas emissions.

17(2) Activities undertaken pursuant to the programs maintain or
18improve upon emission reductions and air quality benefits in the
19State Implementation Plan for Ozone, California Phase 2
20Reformulated Gasoline standards, and diesel fuel regulations.

21(c) For the purposes of both of the programs created by this
22chapter, eligible projects do not include those required to be
23undertaken pursuant to state or federal law, district rules or
24regulations, memoranda of understanding with a governmental
25entity, or legally binding agreements or documents. For the
26purposes of the Alternative and Renewable Fuel and Vehicle
27Technology Program, the state board shall advise the commission
28to ensure the requirements of this subdivision are met.

29(d) Any customer incentives for light-duty vehicles, including
30rebates, shall not be greater than compensations given to consumers
31pursuant to Section 44125.

32

SEC. 11.  

Section 44272 of the Health and Safety Code is
33amended to read:

34

44272.  

(a) The Alternative and Renewable Fuel and Vehicle
35Technology Program is hereby created. The program shall be
36administered by the commission. The commission shall implement
37the program by regulation pursuant to the requirements of Chapter
383.5 (commencing with Section 11340) of Part 1 of Division 3 of
39Title 2 of the Government Code. The program shall provide, upon
40appropriation by the Legislature, competitive grants, revolving
P18   1loans, loan guarantees, loans, or other appropriate funding
2measures, to public agencies, vehicle and technology entities,
3businesses and projects, public-private partnerships, workforce
4training partnerships and collaboratives, fleet owners, consumers,
5recreational boaters, and academic institutions to develop and
6deploy innovative technologies that transform California’s fuel
7and vehicle types to help attain the state’s climate change policies.
8The emphasis of this program shall be to develop and deploy
9technology and alternative and renewable fuels in the marketplace,
10without adopting any one preferred fuel or technology.

11(b) A project that receives more than seventy-five thousand
12dollars ($75,000) in funds from the commission shall be approved
13at a noticed public meeting of the commission and shall be
14consistent with the priorities established by the investment plan
15adopted pursuant to Section 44272.5. Under this article, the
16commission may delegate to the commission’s executive director,
17or his or her designee, the authority to approve either of the
18following:

19(1) A contract, grant, loan, or other agreement or award that
20receives seventy-five thousand dollars ($75,000) or less in funds
21from the commission.

22(2) Amendments to a contract, grant, loan, or other agreement
23or award as long as the amendments do not increase the amount
24of the award, change the scope of the project, or modify the purpose
25of the agreement.

26(c) The commission shall provide preferences to those projects
27that maximize the goals of the Alternative and Renewable Fuel
28and Vehicle Technology Program, based on the following criteria,
29as applicable:

30(1) The project’s ability to provide a measurable transition from
31the nearly exclusive use of petroleum fuels to a diverse portfolio
32of viable alternative fuels that meet petroleum reduction and
33alternative fuel use goals.

34(2) The project’s consistency with existing and future state
35climate change policy and low-carbon fuel standards.

36(3) The project’s ability to reduce criteria air pollutants and air
37toxics and reduce or avoid multimedia environmental impacts.

38(4) The project’s ability to decrease, on a life-cycle basis, the
39discharge of water pollutants or any other substances known to
40damage human health or the environment, in comparison to the
P19   1production and use of California Phase 2 Reformulated Gasoline
2or diesel fuel produced and sold pursuant to California diesel fuel
3regulations set forth in Article 2 (commencing with Section 2280)
4of Chapter 5 of Division 3 of Title 13 of the California Code of
5Regulations.

6(5) The project does not adversely impact the sustainability of
7the state’s natural resources, especially state and federal lands.

8(6) The project provides nonstate matching funds. Costs incurred
9from the date a proposed award is noticed may be counted as
10nonstate matching funds. The commission may adopt further
11requirements for the purposes of this paragraph. The commission
12is not liable for costs incurred pursuant to this paragraph if the
13commission does not give final approval for the project or the
14proposed recipient does not meet requirements adopted by the
15commission pursuant to this paragraph.

16(7) The project provides economic benefits for California by
17promoting California-based technology firms, jobs, and businesses.

18(8) The project uses existing or proposed fueling infrastructure
19to maximize the outcome of the project.

20(9) The project’s ability to reduce on a life-cycle assessment
21greenhouse gas emissions by at least 10 percent, and higher
22percentages in the future, from current reformulated gasoline and
23diesel fuel standards established by the state board.

24(10) The project’s use of alternative fuel blends of at least 20
25percent, and higher blend ratios in the future, with a preference
26for projects with higher blends.

27(11) The project drives new technology advancement for
28vehicles, vessels, engines, and other equipment, and promotes the
29deployment of that technology in the marketplace.

30(d) The commission shall rank applications for projects proposed
31for funding awards based on solicitation criteria developed in
32accordance with subdivision (c), and shall give additional
33preference to funding those projects with higher benefit-cost scores.

34(e) Only the following shall be eligible for funding:

35(1) Alternative and renewable fuel projects to develop and
36improve alternative and renewable low-carbon fuels, including
37electricity, ethanol, dimethyl ether, renewable diesel, natural gas,
38hydrogen, and biomethane, among others, and their feedstocks
39that have high potential for long-term or short-term
P20   1commercialization, including projects that lead to sustainable
2feedstocks.

3(2) Demonstration and deployment projects that optimize
4alternative and renewable fuels for existing and developing engine
5technologies.

6(3) Projects to produce alternative and renewable low-carbon
7fuels in California.

8(4) Projects to decrease the overall impact of an alternative and
9renewable fuel’s life cycle carbon footprint and increase
10sustainability.

11(5) Alternative and renewable fuel infrastructure, fueling
12stations, and equipment. The preference in paragraph (10) of
13subdivision (c) shall not apply to renewable diesel or biodiesel
14infrastructure, fueling stations, and equipment used solely for
15renewable diesel or biodiesel fuel.

16(6) Projects to develop and improve light-, medium-, and
17heavy-duty vehicle technologies that provide for better fuel
18efficiency and lower greenhouse gas emissions, alternative fuel
19usage and storage, or emission reductions, including propulsion
20systems, advanced internal combustion engines with a 40 percent
21or better efficiency level over the current market standard,
22light-weight materials, intelligent transportation systems, energy
23storage, control systems and system integration, physical
24measurement and metering systems and software, development of
25design standards and testing and certification protocols, battery
26recycling and reuse, engine and fuel optimization electronic and
27electrified components, hybrid technology, plug-in hybrid
28technology, battery electric vehicle technology, fuel cell
29technology, and conversions of hybrid technology to plug-in
30technology through the installation of safety certified supplemental
31battery modules.

32(7) Programs and projects that accelerate the commercialization
33of vehicles and alternative and renewable fuels including buy-down
34programs through near-market and market-path deployments,
35advanced technology warranty or replacement insurance,
36development of market niches, supply-chain development, and
37research related to the pedestrian safety impacts of vehicle
38technologies and alternative and renewable fuels.

39(8) Programs and projects to retrofit medium- and heavy-duty
40onroad and nonroad vehicle fleets with technologies that create
P21   1higher fuel efficiencies, including alternative and renewable fuel
2vehicles and technologies, idle management technology, and
3aerodynamic retrofits that decrease fuel consumption.

4(9) Infrastructure projects that promote alternative and renewable
5fuel infrastructure development connected with existing fleets,
6public transit, and existing transportation corridors, including
7physical measurement or metering equipment and truck stop
8electrification.

9(10) Workforce training programs related to alternative and
10renewable fuel feedstock production and extraction, renewable
11fuel production, distribution, transport, and storage,
12high-performance and low-emission vehicle technology and high
13tower electronics, automotive computer systems, mass transit fleet
14conversion, servicing, and maintenance, and other sectors or
15occupations related to the purposes of this chapter.

16(11) Block grants or incentive programs administered by public
17entities or not-for-profit technology entities for multiple projects,
18education and program promotion within California, and
19development of alternative and renewable fuel and vehicle
20technology centers. The commission may adopt guidelines for
21implementing the block grant or incentive program, which shall
22be approved at a noticed public meeting of the commission.

23(12) Life cycle and multimedia analyses, sustainability and
24environmental impact evaluations, and market, financial, and
25technology assessments performed by a state agency to determine
26the impacts of increasing the use of low-carbon transportation fuels
27and technologies, and to assist in the preparation of the investment
28plan and program implementation.

29(13) A program to provide funding for homeowners who
30purchase a plug-in electric vehicle to offset costs associated with
31modifying electrical sources to include a residential plug-in electric
32vehicle charging station. In establishing this program, the
33commission shall consider funding criteria to maximize the public
34benefit of the program.

35(f) The commission may make a single source or sole source
36award pursuant to this section for applied research. The same
37requirements set forth in Section 25620.5 of the Public Resources
38Code shall apply to awards made on a single source basis or a sole
39source basis. This subdivision does not authorize the commission
P22   1to make a single source or sole source award for a project or
2activity other than for applied research.

3(g) The commission may do all of the following:

4(1) Contract with the Treasurer to expend funds through
5programs implemented by the Treasurer, if the expenditure is
6consistent with all of the requirements of this article and Article
71 (commencing with Section 44270).

8(2) Contract with small business financial development
9corporations established by the Business, Transportation and
10Housing Agency to expend funds through the Small Business Loan
11Guarantee Program if the expenditure is consistent with all of the
12requirements of this article and Article 1 (commencing with Section
1344270).

14(3) Advance funds, pursuant to an agreement with the
15commission, to any of the following:

16(A) A public entity.

17(B) A recipient to enable it to make advance payments to a
18public entity that is a subrecipient of the funds and under a binding
19and enforceable subagreement with the recipient.

20(C) An administrator of a block grant program.

21

SEC. 12.  

Section 44273 of the Health and Safety Code is
22amended to read:

23

44273.  

(a) The Alternative and Renewable Fuel and Vehicle
24Technology Fund is hereby created in the State Treasury, to be
25administered by the commission. The moneys in the fund, upon
26appropriation by the Legislature, shall be expended by the
27commission to implement the Alternative and Renewable Fuel and
28Vehicle Technology Program in accordance with this chapter.

29(b) Notwithstanding any other provision of law, the sum of ten
30million dollars ($10,000,000) shall be transferred annually from
31the Public Interest Research, Development, and Demonstration
32Fund created by Section 384 of the Public Utilities Code to the
33Alternative and Renewable Fuel and Vehicle Technology Fund.
34Prior to the award of any funds from this source, the commission
35shall make a determination that the proposed project will provide
36benefits to electric or natural gas ratepayers based upon the
37commission’s adopted criteria.

38(c) Beginning with the integrated energy policy report adopted
39in 2011, and in the subsequent reports adopted thereafter, pursuant
40to Section 25302 of the Public Resources Code, the commission
P23   1shall include an evaluation of research, development, and
2deployment efforts funded by this chapter. The evaluation shall
3include all of the following:

4(1) A list of projects funded by the Alternative and Renewable
5Fuel and Vehicle Technology Fund.

6(2) The expected benefits of the projects in terms of air quality,
7petroleum use reduction, greenhouse gas emissions reduction,
8technology advancement, benefit-cost assessment, and progress
9towards achieving these benefits.

10(3) The overall contribution of the funded projects toward
11promoting a transition to a diverse portfolio of clean, alternative
12transportation fuels and reduced petroleum dependency in
13California.

14(4) Key obstacles and challenges to meeting these goals
15identified through funded projects.

16(5) Recommendations for future actions.

17

SEC. 13.  

Section 44274 of the Health and Safety Code is
18amended to read:

19

44274.  

(a) The Air Quality Improvement Program is hereby
20created. The program shall be administered by the state board, in
21consultation with the districts. The state board shall develop
22guidelines to implement the program. Prior to the adoption of the
23guidelines, the state board shall hold at least one public hearing.
24In addition, the state board shall hold at least three public
25workshops with at least one workshop in northern California, one
26in the central valley, and one in southern California. The purpose
27of the program shall be to fund, upon appropriation by the
28Legislature, air quality improvement projects relating to fuel and
29vehicle technologies. The primary purpose of the program shall
30be to fund projects to reduce criteria air pollutants, improve air
31quality, and provide funding for research to determine and improve
32the air quality impacts of alternative transportation fuels and
33vehicles, vessels, and equipment technologies.

34(b) The state board shall provide preference in awarding funding
35to those projects with higher benefit-cost scores that maximize the
36purposes and goals of the Air Quality Improvement Program. The
37state boardbegin delete mayend delete alsobegin insert mayend insert give additional preference based on the
38following criteria, as applicable, in funding awards to projects:

39(1) Proposed or potential reduction of criteria or toxic air
40pollutants.

P24   1(2) Contribution to regional air quality improvement.

2(3) Ability to promote the use of clean alternative fuels and
3vehicle technologies as determined by the state board, in
4coordination with the commission.

5(4) Ability to achieve climate change benefits in addition to
6criteria pollutant or air toxicbegin delete emissionend deletebegin insert emissionsend insert reductions.

7(5) Ability to support market transformation of California’s
8vehicle or equipment fleet to utilize low carbon or zero-emission
9technologies.

10(6) Ability to leverage private capital investments.

11(c) The program shall be limited to competitive grants, revolving
12loans, loan guarantees, loans, and other appropriate funding
13measures that further the purposes of the program. Projects to be
14funded shall include only the following:

15(1) begin deleteOn- end deletebegin insertOnroad end insertand off-road equipment projects that are cost
16effective.

17(2) Projects that provide mitigation for off-road gasoline exhaust
18and evaporative emissions.

19(3) Projects that provide research to determine the air quality
20impacts of alternative fuels and projects that study the life-cycle
21impacts of alternative fuels and conventional fuels, the emissions
22of biofuel and advanced reformulated gasoline blends, and air
23pollution improvements and control technologies for use with
24alternative fuels and vehicles.

25(4) Projects that augment the University of California’s
26agricultural experiment station and cooperative extension programs
27for research to increase sustainable biofuels production and
28improve the collection of biomass feedstock.

29(5) Incentives for small off-road equipment replacement to
30encourage consumers to replace internal combustion engine lawn
31and garden equipment.

32(6) Incentives for medium- and heavy-duty vehicles and
33equipment mitigation, including all of the following:

34(A) Lower emission schoolbus programs.

35(B) Electric, hybrid, and plug-in hybridbegin delete on-end deletebegin insert onroadend insert and off-road
36medium- and heavy-duty equipment.

37(C) Regional air quality improvement and attainment programs
38implemented by the state or districts in the most impacted regions
39of the state.

P25   1(7) Workforce training initiatives related to advanced energy
2technology designed to reduce air pollution, including
3state-of-the-art equipment and goods, and new processes and
4systems. Workforce training initiatives funded shall be broad-based
5partnerships that leverage other public and private job training
6programs and resources. These partnerships may include, though
7are not limited to, employers, labor unions, labor-management
8partnerships, community organizations, workforce investment
9boards, postsecondary education providers including community
10colleges, and economic development agencies.

11(8) Incentives to identify and reduce emissions frombegin delete high
12emittingend delete
begin insert high-emittingend insert light-duty vehicles.

13(d) (1) Beginning January 1, 2011, the state board shall submit
14to the Legislature a biennial report to evaluate the implementation
15of the Air Quality Improvement Program established pursuant to
16this chapter.

17(2) The report shall include all of the following:

18(A) A list of projects funded by the Air Quality Improvement
19Account.

20(B) The expected benefits of the projects in promoting clean,
21alternative fuels and vehicle technologies.

22(C) Improvement in air quality and public health, greenhouse
23gas emissions reductions, and the progress made toward achieving
24these benefits.

25(D) The impact of the projects in making progress toward
26attainment of state and federal air quality standards.

27(E) Recommendations for future actions.

28(3) The state board may include the information required to be
29reported pursuant to paragraph (1) in an existing report to the
30Legislature as the state board deems appropriate.

31

SEC. 14.  

Section 44275 of the Health and Safety Code, as
32amended by Section 5 of Chapter 707 of the Statutes of 2004, is
33amended to read:

34

44275.  

(a) As used in this chapter, the following terms have
35the following meanings:

36(1) “Advisory board” means the Carl Moyer Program Advisory
37Board created by Section 44297.

38(2) “Btu” means British thermal unit.

39(3) “Commission” means the State Energy Resources
40Conservation and Development Commission.

P26   1(4) “Cost-effectiveness” means dollars provided to a project
2pursuant to subdivision (d) of Section 44283 for each ton of
3covered emission reduction attributed to a project or to the program
4as a whole. In calculating cost-effectiveness, one-time grants of
5funds made at the beginning of a project shall be annualized using
6a time value of public funds or discount rate determined for each
7project by the state board, taking into account the interest rate on
8bonds, interest earned by state funds, and other factors as
9determined appropriate by the state board. Cost-effectiveness shall
10be calculated by dividing annualized costs by average annual
11emissions reduction. The state board, in consultation with the
12districts and concerned members of the public, shall establish
13appropriate cost-effective limits for oxides of nitrogen, particulate
14matter, and reactive organic gases and a reasonable system for
15comparing the cost-effectiveness of proposed projects as described
16in subdivision (a) of Section 44283.

17(5) “Covered emissions” include emissions of oxides of nitrogen,
18particulate matter, and reactive organic gases from any covered
19source.

20(6) “Covered engine” includes any internal combustion engine
21or electric motor and drive powering a covered source.

22(7) “Covered source” includes onroad vehicles, off-road
23nonrecreational equipment and vehicles, locomotives, diesel marine
24vessels, agricultural sources of air pollution, as defined in Section
2539011.5, and, as determined by the state board, other high-emitting
26engine categories.

27(8) “Covered vehicle” includes any vehicle or piece of
28equipment powered by a covered engine.

29(9) “District” means a county air pollution control district or an
30air quality management district.

31(10) “Fund” means thebegin delete Carl Moyer Memorial Air Quality
32Standards Attainment Trust Fund created by Section 44299.end delete
begin insert Air
33Pollution Control Fund established pursuant to Section 43015.end insert

34(11) “Mobile Source Air Pollution Reduction Review
35Committee” means the Mobile Source Air Pollution Reduction
36Review Committee created by Section 44244.

37(12) “Incremental cost” means the cost of the project less a
38baseline cost that would otherwise be incurred by the applicant in
39the normal course of business. Incremental costs may include
P27   1added lease or fuel costs pursuant to Section 44283 as well as
2incremental capital costs.

3(13) “New very low emission vehicle” means a heavy-duty
4vehicle that qualifies as a very low emission vehicle when it is a
5new vehicle, where new vehicle has the same meaning as defined
6in Section 430 of the Vehicle Code, or that is modified with the
7approval and warranty of the original equipment manufacturer to
8qualify as a very low emission vehicle within 12 months of delivery
9to an owner for private or commercial use.

10(14) “NOx” means oxides of nitrogen.

11(15) “Program” means the Carl Moyer Memorial Air Quality
12Standards Attainment Program created by subdivision (a) of
13Section 44280.

14(16) “Repower” means replacing an engine with a different
15engine. The term repower, as used in this chapter, generally refers
16to replacing an older, uncontrolled engine with a new,
17emissions-certified engine, although replacing an older
18emissions-certified engine with a newer engine certified to lower
19emissions standards may be eligible for funding under this program.

20(17) “Retrofit” means making modifications to the engine and
21fuel system such that the retrofitted engine does not have the same
22specifications as the original engine.

23(18) “Very low emission vehicle” means a heavy-duty vehicle
24with emissions significantly lower than otherwise applicable
25baseline emission standards or uncontrolled emission levels
26pursuant to Section 44282.

27(b) This section shall remain in effect only until January 1, 2024,
28and as of that date is repealed, unless a later enacted statute, that
29is enacted before January 1, 2024, deletes or extends that date.

30

SEC. 15.  

Section 44275 of the Health and Safety Code, as
31added by Section 5.5 of Chapter 707 of the Statutes of 2004, is
32amended to read:

33

44275.  

(a) As used in this chapter, the following terms have
34the following meanings:

35(1) “Advisory board” means the Carl Moyer Program Advisory
36Board created by Section 44297.

37(2) “Btu” means British thermal unit.

38(3) “Commission” means the State Energy Resources
39Conservation and Development Commission.

P28   1(4) “Cost-effectiveness” means dollars provided to a project
2pursuant to subdivision (d) of Section 44283 for each ton of NOx
3 reduction attributed to a project or to the program as a whole. In
4calculating cost-effectiveness, one-time grants of funds made at
5the beginning of a project shall be annualized using a time value
6of public funds or discount rate determined for each project by the
7state board, taking into account the interest rate on bonds, interest
8earned by state funds, and other factors as determined appropriate
9by the state board. Cost-effectiveness shall be calculated by
10dividing annualized costs by average annual emissions reduction
11of NOx in this state.

12(5) “Covered engine” includes any internal combustion engine
13or electric motor and drive powering a covered source.

14(6) “Covered source” includes onroad vehicles of 14,000 pounds
15gross vehicle weight rating (GVWR) or greater, off-road
16nonrecreational equipment and vehicles, locomotives, diesel marine
17vessels, stationary agricultural engines, and, as determined by the
18state board, other high-emitting diesel engine categories.

19(7) “Covered vehicle” includes any vehicle or piece of
20equipment powered by a covered engine.

21(8) “District” means a county air pollution control district or an
22air quality management district.

23(9) “Fund” means thebegin delete Carl Moyer Memorial Air Quality
24Standards Attainment Trust Fund created by Section 44299.end delete
begin insert Air
25Pollution Control Fund established pursuant to Section 43015.end insert

26(10) “Mobile Source Air Pollution Reduction Review
27Committee” means the Mobile Source Air Pollution Reduction
28Review Committee created by Section 44244.

29(11) “Incremental cost” means the cost of the project less a
30baseline cost that would otherwise be incurred by the applicant in
31the normal course of business. Incremental costs may include
32added lease or fuel costs pursuant to Section 44283 as well as
33incremental capital costs.

34(12) “New very low emission vehicle” means a vehicle that
35qualifies as a very low emission vehicle when it is a new vehicle,
36where new vehicle has the same meaning as defined in Section
37430 of the Vehicle Code, or that is modified with the approval and
38warranty of the original equipment manufacturer to qualify as a
39very low emission vehicle within 12 months of delivery to an
40owner for private or commercial use.

P29   1(13) “NOx” means oxides of nitrogen.

2(14) “Program” means the Carl Moyer Memorial Air Quality
3Standards Attainment Program created by subdivision (a) of
4Section 44280.

5(15) “Repower” means replacing an engine with a different
6engine. The term repower, as used in this chapter, generally refers
7to replacing an older, uncontrolled engine with a new,
8emissions-certified engine, although replacing an older
9emissions-certified engine with a newer engine certified to lower
10emissions standards may be eligible for funding under this program.

11(16) “Retrofit” means making modifications to the engine and
12fuel system such that the retrofitted engine does not have the same
13specifications as the original engine.

14(17) “Very low emission vehicle” means a vehicle with
15emissions significantly lower than otherwise applicable baseline
16emission standards or uncontrolled emission levels pursuant to
17Section 44282.

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

19

SEC. 16.  

Section 44280 of the Health and Safety Code, as
20amended by Section 6 of Chapter 707 of the Statutes of 2004, is
21amended to read:

22

44280.  

(a) There is hereby created the Carl Moyer Memorial
23Air Quality Standards Attainment Program. The program shall be
24administered by the state board in accordance with this chapter.
25The administration of the program may be delegated to the districts.

26(b) The program shall provide grants to offset the incremental
27cost of projects that reduce covered emissions from covered sources
28in California. Eligibility for grant awards shall be determined by
29the state board, in consultation with the districts, in accordance
30with this chapter.

31(c) The program shall also provide funding for a fueling
32infrastructure demonstration program and for technology
33development efforts that are expected to result in commercially
34available technologies in the near term that would improve the
35ability of the program to achieve its goals. The infrastructure
36demonstration and technology development portions of the program
37shall be managed by the commission, in consultation with the state
38board.

P30   1(d) This section shall remain in effect only until January 1, 2024,
2and as of that date is repealed, unless a later enacted statute, that
3is enacted before January 1, 2024, deletes or extends that date.

4

SEC. 17.  

Section 44280 of the Health and Safety Code, as
5added by Section 6.5 of Chapter 707 of the Statutes of 2004, is
6amended to read:

7

44280.  

(a) There is hereby created the Carl Moyer Memorial
8Air Quality Standards Attainment Program. The program shall be
9administered by the state board in accordance with this chapter.
10The administration of the program may be delegated to the districts.

11(b) The program shall provide grants to offset the incremental
12cost of projects that reduce emissions of NOx from covered sources
13in California. Eligibility for grant awards shall be determined by
14the state board, in consultation with the districts, in accordance
15with this chapter.

16(c) The program shall also provide funding for a fueling
17infrastructure demonstration program and for technology
18development efforts that are expected to result in commercially
19available technologies in the near term that would improve the
20ability of the program to achieve its goals. The infrastructure
21demonstration and technology development portions of the program
22shall be managed by the commission, in consultation with the state
23board.

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

25

SEC. 18.  

Section 44281 of the Health and Safety Code, as
26amended by Section 7 of Chapter 707 of the Statutes of 2004, is
27amended to read:

28

44281.  

(a) Eligible projects include, but are not limited to, any
29of the following:

30(1) Purchase of new very low or zero-emission covered vehicles
31or covered heavy-duty engines.

32(2) Emission-reducing retrofit of covered engines, or
33replacement of old engines powering covered sources with newer
34engines certified to more stringent emissions standards than the
35engine being replaced, or with electric motors or drives.

36(3) Purchase and use of emission-reducing add-on equipment
37that has been verified by the state board for covered vehicles.

38(4) Development and demonstration of practical, low-emission
39retrofit technologies, repower options, and advanced technologies
P31   1for covered engines and vehicles with very low emissions ofbegin delete oxides
2of nitrogen.end delete
begin insert NOend insertbegin insertxend insertbegin insert.end insert

3(5) Light- and medium-duty vehicle projects in compliance with
4guidelines adopted by the state board pursuant to Title 13 of the
5California Code of Regulations.

6(b) No project shall be funded under this chapter after the
7compliance date required by any local, state, or federal statute,
8rule, regulation, memoranda of agreement or understanding, or
9other legally binding document, except that an otherwise qualified
10project may be funded even if the state implementation plan
11assumes that the change in equipment, vehicles, or operations will
12occur, if the change is not required by the compliance date of a
13statute, regulation, or other legally binding document in effect as
14of the date the grant is awarded. No project funded by the program
15shall be used for credit under any state or federal emissions
16averaging, banking, or trading program. No emission reduction
17generated by the program shall be used as marketable emission
18reduction credits or to offset any emission reduction obligation of
19any person or entity. Projects involving new engines that would
20otherwise generate marketable credits under state or federal
21averaging, banking, and trading programs shall include transfer
22of credits to the engine end user and retirement of those credits
23toward reducing air emissions in order to qualify for funding under
24the program. A purchase of a low-emission vehicle or of equipment
25pursuant to a corporate or a controlling board’s policy, but not
26otherwise required by law, shall generate surplus emissions
27reductions and may be funded by the program.

28(c) The program may also provide funding toward installation
29of fueling or electrification infrastructure as provided in Section
3044284.

31(d) Eligible applicants may be any individual, company, or
32public agency that owns one or more covered vehicles that operate
33primarily within California or otherwise contribute substantially
34to the NOx,begin delete PM, or ROGend deletebegin insert particulate matter (PM), or reactive
35organic gas (ROG)end insert
emissions inventory in California.

36(e) It is the intent of the Legislature that all emission reductions
37generated by this chapter shall contribute to public health by
38reducing, for the life of the vehicle being funded, the total amount
39of emissions in California.

P32   1(f) This section shall remain in effect only until January 1, 2024,
2and as of that date is repealed, unless a later enacted statute, that
3is enacted before January 1, 2024, deletes or extends that date.

4

SEC. 19.  

Section 44281 of the Health and Safety Code, as
5added by Section 7.5 of Chapter 707 of the Statutes of 2004, is
6amended to read:

7

44281.  

(a) Eligible projects are any of the following:

8(1) Purchase of new very low or zero-emission covered vehicles
9or covered engines.

10(2) Emission-reducing retrofit of covered engines, or
11replacement of old engines powering covered sources with newer
12engines certified to more stringent emissions standards than the
13engine being replaced, or with electric motors or drives.

14(3) Purchase and use of emission-reducing add-on equipment
15for covered vehicles.

16(4) Development and demonstration of practical, low-emission
17retrofit technologies, repower options, and advanced technologies
18for covered engines and vehicles with very low emissions ofbegin delete oxides
19of nitrogen.end delete
begin insert NOend insertbegin insertxend insertbegin insert.end insert

20(b) No new purchase, retrofit, repower, or add-on equipment
21shall be funded under this chapter if it is required by any local,
22state, or federal statute, rule, regulation, memoranda of agreement
23or understanding, or other legally binding document, except that
24an otherwise qualified project may be funded even if the state
25implementation plan assumes that the change in equipment,
26vehicles, or operations will occur, if the change is not required by
27a statute, regulation, or other legally binding document in effect
28as of the date the grant is awarded. No project funded by the
29program shall be used for credit under any state or federal
30emissions averaging, banking, or trading program. No emission
31reduction generated by the program shall be used as marketable
32emission reduction credits or to offset any emission reduction
33 obligation of any entity. Projects involving new engines that would
34otherwise generate marketable credits under state or federal
35averaging, banking, and trading programs shall include transfer
36of credits to the engine end user and retirement of those credits
37toward reducing air emissions in order to qualify for funding under
38the program. A purchase of a low-emission vehicle or of equipment
39pursuant to a corporate or a controlling board’s policy, but not
P33   1otherwise required by law, shall generate surplus emissions
2reductions and may be funded by the program.

3(c) The program may also provide funding toward installation
4of fueling or electrification infrastructure as provided in Section
544284.

6(d) Eligible applicants may be any individual, company, or
7public agency that owns one or more covered vehicles that operate
8primarily within California or otherwise contribute substantially
9to the NOx emissions inventory in California.

10(e) It is the intent of the Legislature that all emission reductions
11generated by this chapter shall contribute to public health by
12reducing, for the life of the vehicle being funded, the total amount
13of emissions in California.

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

15

SEC. 20.  

Section 44282 of the Health and Safety Code, as
16amended by Section 8 of Chapter 707 of the Statutes of 2004, is
17amended to read:

18

44282.  

The following criteria apply to all projects to be funded
19through the program except for projects funded through the
20begin delete Advanced Technology Account and the Infrastructure
21Demonstration Program:end delete
begin insert infrastructure demonstration program:end insert

22(a)  The state board may establish project criteria, including
23minimum project life for source categories, in the guidelines
24described in Section 44287. For previously unregulated source
25categories, project criteria shall consider the timing of newly
26established regulatory requirements.

27(b) To be eligible, projects shall meet the cost-effectiveness per
28ton of covered emissions reduced requirements of Section 44283.

29(c) To be eligible, retrofits, repowers, and installation of add-on
30equipment for covered vehicles shall be performed, or new covered
31vehicles delivered to the end user, or covered vehicles scrapped
32on or after the date the program is implemented.

33(d) Retrofit technologies, new engines, and new vehicles shall
34be certified for sale or under experimental permit for operation in
35California.

36(e) Repower projects that replace older, uncontrolled engines
37with new, emissions-certified engines or that replace
38emissions-certified engines with new engines certified to a more
39stringent NOx emissions standard are approvable subject to the
40other applicable selection criteria. The state board shall determine
P34   1appropriate baseline emission levels for the uncontrolled engines
2being replaced.

3(f) For heavy-duty-vehicle projects, retrofit and add-on
4equipment projects shall document a NOx or PM emission
5reduction of at least 25 percent and no increase in other covered
6emissions compared to the applicable baseline emissions accepted
7by the state board for that engine year and application. The state
8board shall determine appropriate baseline emission levels.
9Acceptable documentation shall be defined by the state board.
10After study of available emission reduction technologies and after
11public notice and comment, the state board may revise the
12minimum percentage emission reduction criterion for retrofits and
13add-on equipment provided for in this section to improve the ability
14of the program to achieve its goals.

15(g) (1) For heavy-duty-vehicle projects involving the purchase
16of new very low or zero-emission vehicles, engines shall be
17certified to an optional low NOx emissions standard established
18by the state board, except as provided for in paragraph (2).

19(2) For heavy-duty-vehicle projects involving the purchase of
20new very low or zero-emission covered vehicles for which no
21optional low NOx emission standards are available, documentation
22shall be provided showing that the low or zero-emission engine
23emits not more than 70 percent of the NOx or NOx plus
24hydrocarbon emissions of a new engine certified to the applicable
25baseline NOx or NOx plus hydrocarbon emission standard for that
26engine and meets applicable particulate standards. The state board
27shall specify the documentation required. If no baseline emission
28standard exists for new vehicles in a particular category, the state
29board shall determine an appropriate baseline emission level for
30comparison.

31(h) For projects other than heavy-duty-vehicle projects, the state
32board shall determine appropriate criteria under the provisions of
33Section 44287.

34(i) This section shall remain in effect only until January 1, 2024,
35and as of that date is repealed, unless a later enacted statute, that
36is enacted before January 1, 2024, deletes or extends that date.

37

SEC. 21.  

Section 44282 of the Health and Safety Code, as
38added by Section 8.5 of Chapter 707 of the Statutes of 2004, is
39amended to read:

P35   1

44282.  

The following criteria apply to all projects to be funded
2through the program except for projects funded through the
3begin delete Advanced Technology Account and the Infrastructure
4Demonstration Program:end delete
begin insert infrastructure demonstration program:end insert

5(a) Except for projects involving marine vessels, 75 percent or
6more of vehicle miles traveled or hours of operation shall be
7projected to be in California for at least five years following the
8grant award. Projects involving marine vessels and engines shall
9be limited to those that spend enough time operating in California
10air basins over the lifetime of the project to meet the
11cost-effectiveness criteria based on NOx reductions in California,
12as provided in Section 44283.

13(b) To be eligible, projects shall meet cost-effectiveness per ton
14of NOx reduced requirements of Section 44283.

15(c) To be eligible, retrofits, repowers, and installation of add-on
16equipment for covered vehicles shall be performed, or new covered
17vehicles delivered to the end user, on or after the date the program
18is implemented.

19(d) Retrofit technologies, new engines, and new vehicles shall
20be certified for sale or under experimental permit for operation in
21California.

22(e) Repower projects that replace older, uncontrolled engines
23with new, emissions-certified engines or that replace
24emissions-certified engines with new engines certified to a more
25stringent NOx emissions standard are approvable subject to the
26other applicable selection criteria. The state board shall determine
27appropriate baseline emission levels for the uncontrolled engines
28being replaced.

29(f) Retrofit and add-on equipment projects shall document a
30NOx emission reduction of at least 25 percent and no increase in
31particulate emissions compared to the applicable baseline emissions
32accepted by the state board for that engine year and application.
33The state board shall determine appropriate baseline emission
34levels. Acceptable documentation shall be defined by the state
35board. After study of available emission reduction technologies
36and after public notice and comment, the state board may revise
37the minimum percentage NOx reduction criterion for retrofits and
38add-on equipment provided for in this section to improve the ability
39of the program to achieve its goals.

P36   1(g) (1) For projects involving the purchase of new very low or
2zero-emission vehicles, engines shall be certified to an optional
3low NOx emissions standard established by the state board, except
4as provided for in paragraph (2).

5(2) For projects involving the purchase of new very low or
6zero-emission covered vehicles for which no optional low NOx
7 emission standards are available, documentation shall be provided
8showing that the low or zero-emission engine emits not more than
970 percent of the NOx or NOx plus hydrocarbon emissions of a
10new engine certified to the applicable baseline NOx or NOx plus
11hydrocarbon emission standard for that engine and meets applicable
12particulate standards. The state board shall specify the
13documentation required. If no baseline emission standard exists
14for new vehicles in a particular category, the state board shall
15determine an appropriate baseline emission level for comparison.

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

17

SEC. 22.  

Section 44283 of the Health and Safety Code, as
18amended by Section 1 of Chapter 571 of the Statutes of 2010, is
19amended to read:

20

44283.  

(a) Grants shall not be made for projects with a
21cost-effectiveness, calculated in accordance with this section, of
22more than thirteen thousand six hundred dollars ($13,600) per ton
23of NOx reduced in California or a higher value that reflects state
24consumer price index adjustments on or after January 1, 2006, as
25determined by the state board. For projects obtaining reactive
26organic gas and particulate matter reductions, the state board shall
27determine appropriate adjustment factors to calculate a weighted
28cost-effectiveness.

29(b) Only covered emission reductions occurring in this state
30shall be included in the cost-effectiveness determination. The
31extent to which emissions generated at sea contribute to air quality
32in California nonattainment areas shall be incorporated into these
33methodologies based on a reasonable assessment of currently
34available information and modeling assumptions.

35(c) The state board shall develop protocols for calculating the
36surplus covered emission reductions in California from
37representative project types over the life of the project.

38(d) The cost of the covered emission reduction is the amount
39of the grant from the program, including matching funds provided
40pursuant to subdivision (e) of Section 44287, plus any other state
P37   1funds, or funds under the district’s budget authority or fiduciary
2control, provided toward the project, not including funds described
3in paragraphs (1) and (2) of subdivision (a) of Section 44287.2.
4 The state board shall establish reasonable methodologies for
5evaluating project cost-effectiveness, consistent with the definition
6contained in paragraph (4) of subdivision (a) of Section 44275,
7and with accepted methods, taking into account a fair and
8reasonable discount rate or time value of public funds.

9(e) A grant shall not be made that, net of taxes, provides the
10applicant with funds in excess of the incremental cost of the project.
11Incremental lease costs may be capitalized according to guidelines
12adopted by the state board so that these incremental costs may be
13offset by a one-time grant award.

14(f) Funds under a district’s budget authority or fiduciary control
15may be used to pay for the incremental cost of liquid or gaseous
16fuel, other than standard gasoline or diesel, which is integral to a
17covered emission reducing technology that is part of a project
18receiving grant funding under the program. The fuel shall be
19approved for sale by the state board. The incremental fuel cost
20over the expected lifetime of the vehicle may be offset by the
21district if the project as a whole, including the incremental fuel
22cost, meets all of the requirements of this chapter, including the
23maximum allowed cost-effectiveness. The state board shall develop
24an appropriate methodology for converting incremental fuel costs
25over the vehicle lifetime into an initial cost for the purposes of
26determining project cost-effectiveness. Incremental fuel costs shall
27not be included in project costs for fuels dispensed from any facility
28that was funded, in whole or in part, from the fund.

29(g) For purposes of determining any grant amount pursuant to
30this chapter, the incremental cost of any new purchase, retrofit,
31repower, or add-on equipment shall be reduced by the value of
32any current financial incentive that directly reduces the project
33price, including any tax credits or deductions, grants, or other
34public financial assistance, not including funds described in
35paragraphs (1) and (2) of subdivision (a) of Section 44287.2.
36 Project proponents applying for funding shall be required to state
37in their application any other public financial assistance to the
38project.

39(h) For projects that would repower off-road equipment by
40replacing uncontrolled diesel engines with new, certified diesel
P38   1engines, the state board may establish maximum grant award
2amounts per repower. A repower project shall also be subject to
3the incremental cost maximum pursuant to subdivision (e).

4(i) After study of available emission reduction technologies and
5costs and after public notice and comment, the state board may
6reduce the values of the maximum grant award criteria stated in
7this section to improve the ability of the program to achieve its
8goals. Every year the state board shall adjust the maximum
9cost-effectiveness amount established in subdivision (a) and any
10per-project maximum set by the state board pursuant to subdivision
11(h) to account for inflation.

12(j) This section shall remain in effect only until January 1, 2024,
13and as of that date is repealed, unless a later enacted statute, that
14is enacted before January 1, 2024, deletes or extends that date.

15

SEC. 23.  

Section 44283 of the Health and Safety Code, as
16amended by Section 2 of Chapter 571 of the Statutes of 2010, is
17amended to read:

18

44283.  

(a) Grants shall not be made for projects with a
19cost-effectiveness, calculated in accordance with this section, of
20more than twelve thousand dollars ($12,000) per ton of NOx
21 reduced in California or a higher value that reflects state consumer
22price index adjustments on or after January 1, 2024, as determined
23by the state board.

24(b) Only NOx reductions occurring in this state shall be included
25in the cost-effectiveness determination. The extent to which
26emissions generated at sea contribute to air quality in California
27nonattainment areas shall be incorporated into these methodologies
28based on a reasonable assessment of currently available information
29and modeling assumptions.

30(c) The state board shall develop protocols for calculating the
31surplus NOx reductions in California from representative project
32types over the life of the project.

33(d) The cost of the NOx reduction is the amount of the grant
34from the program, including matching funds provided pursuant to
35subdivision (e) of Section 44287, plus any other state funds, or
36funds under the district’s budget authority or fiduciary control,
37provided toward the project, not including funds described in
38paragraphs (1) and (2) of subdivision (a) of Section 44287.2. The
39state board shall establish reasonable methodologies for evaluating
40project cost-effectiveness, consistent with the definition contained
P39   1in paragraph (4) of subdivision (a) of Section 44275, and with
2accepted methods, taking into account a fair and reasonable
3discount rate or time value of public funds.

4(e) A grant shall not be made that, net of taxes, provides the
5applicant with funds in excess of the incremental cost of the project.
6Incremental lease costs may be capitalized according to guidelines
7adopted by the state board so that these incremental costs may be
8offset by a one-time grant award.

9(f) Funds under a district’s budget authority or fiduciary control
10may be used to pay for the incremental cost of liquid or gaseous
11fuel, other than standard gasoline or diesel, which is integral to a
12NOx reducing technology that is part of a project receiving grant
13funding under the program. The fuel shall be approved for sale by
14the state board. The incremental fuel cost over the expected lifetime
15of the vehicle may be offset by the district if the project as a whole,
16including the incremental fuel cost, meets all of the requirements
17of this chapter, including the maximum allowed cost-effectiveness.
18The state board shall develop an appropriate methodology for
19converting incremental fuel costs over the vehicle lifetime into an
20initial cost for the purposes of determining project
21cost-effectiveness. Incremental fuel costs shall not be included in
22project costs for fuels dispensed from any facility that was funded,
23in whole or in part, from the fund.

24(g) For purposes of determining any grant amount pursuant to
25this chapter, the incremental cost of any new purchase, retrofit,
26repower, or add-on equipment shall be reduced by the value of
27any current financial incentive that directly reduces the project
28price, including any tax credits or deductions, grants, or other
29public financial assistance, not including funds described in
30paragraphs (1) and (2) of subdivision (a) of Section 44287.2.
31Project proponents applying for funding shall be required to state
32in their application any other public financial assistance to the
33project.

34(h) For projects that would repower off-road equipment by
35replacing uncontrolled diesel engines with new, certified diesel
36engines, the state board may establish maximum grant award
37amounts per repower. A repower project shall also be subject to
38the incremental cost maximum pursuant to subdivision (e).

39(i) After study of available emission reduction technologies and
40costs and after public notice and comment, the state board may
P40   1reduce the values of the maximum grant award criteria stated in
2this section to improve the ability of the program to achieve its
3goals. Every year the state board shall adjust the maximum
4cost-effectiveness amount established in subdivision (a) and any
5per-project maximum set by the state board pursuant to subdivision
6(h) to account for inflation.

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

8

SEC. 24.  

Section 44287 of the Health and Safety Code, as
9amended by Section 10 of Chapter 707 of the Statutes of 2004, is
10amended to read:

11

44287.  

(a) The state board shall establish or update grant
12criteria and guidelines consistent with this chapter for covered
13vehicle projects as soon as practicable, but not later than January
141, 2006. The adoption of guidelines is exempt from the rulemaking
15provisions of the Administrative Procedure Act, Chapter 3.5
16(commencing with Section 11340) of Part 1 of Division 3 of Title
172 of the Government Code. The state board shall solicit input and
18comment from the districts during the development of the criteria
19and guidelines and shall make every effort to develop criteria and
20guidelines that are compatible with existing district programs that
21are also consistent with this chapter. Guidelines shall include
22protocols to calculate project cost-effectiveness. The grant criteria
23and guidelines shall include safeguards to ensure that the project
24generates surplus emissions reductions. Guidelines shall enable
25and encourage districts to cofund projects that provide emissions
26reductions in more than one district. The state board shall make
27draft criteria and guidelines available to the public 45 days before
28final adoption, and shall hold at least one public meeting to
29consider public comments before final adoption. The state board
30may develop separate guidelines and criteria for the different types
31of eligible projects described in subdivision (a) of Section 44281.

32(b) The state board, in consultation with the participating
33districts, may propose revisions to the criteria and guidelines
34established pursuant to subdivision (a) as necessary to improve
35the ability of the program to achieve its goals. A proposed revision
36shall be made available to the public 45 days before final adoption
37of the revision and the state board shall hold at least one public
38meeting to consider public comments before final adoption of the
39revision.

P41   1(c) The state board shall reserve funds for, and disburse funds
2to, districts from the fund for administration pursuant to this section
3and Section 44299.1.

4(d) The state board shall develop guidelines for a district to
5follow in applying for the reservation of funds, in accordance with
6this chapter. It is the intent of the Legislature that district
7administration of any reserved funds be in accordance with the
8project selection criteria specified in Sections 44281, 44282, and
944283 and all other provisions of this chapter. The guidelines shall
10be established and published by the state board as soon as
11practicable, but not later than January 1, 2006.

12(e) Funds shall be reserved by the state board for administration
13by a district that adopts an eligible program pursuant to this chapter
14and offers matching funds at a ratio of one dollar ($1) of matching
15funds committed by the district or the Mobile Source Air Pollution
16Reduction Review Committee for every two dollars ($2) committed
17from the fund. Funds available to the Mobile Source Air Pollution
18Reduction Review Committee may be counted as matching funds
19for projects in the South Coast Air Basin only if the committee
20approves the use of these funds for matching purposes. Matching
21funds may be any funds under the district’s budget authority that
22are committed to be expended in accordance with the program.
23Funds committed by a port authority or a local government, in
24cooperation with a district, to be expended in accordance with the
25program may also be counted as district matching funds. Matching
26funds provided by a port authority or a local government may not
27exceed 30 percent of the total required matching funds in any
28district that applies for more than three hundred thousand dollars
29 ($300,000) of the state board funds. Only a district, or a port
30authority or a local government teamed with a district, may provide
31matching funds.

32(f) The state board may adjust the ratio of matching funds
33described in subdivision (e), if it determines that an adjustment is
34necessary in order to maximize the use of, or the air quality benefits
35provided by, the program, based on a consideration of the financial
36resources of the district.

37(g) Notwithstanding subdivision (e), a district need not provide
38matching funds for state board funds allocated to the district for
39program outreach activities pursuant to paragraph (4) of subdivision
40(a) of Section 44299.1.

P42   1(h) A district may include within its matching funds a reasonable
2estimate of direct or in-kind costs for assistance in providing
3program outreach and application evaluation. In-kind and direct
4matching funds shall not exceed 15 percent of the total matching
5funds offered by a district. A district may also include within its
6matching funds any money spent on or after February 25, 1999,
7that would have qualified as matching funds but were not
8previously claimed as matching funds.

9(i) A district desiring a reservation of funds shall apply to the
10state board following the application guidelines established
11pursuant to this section. The state board shall approve or disapprove
12a district application not later than 60 days after receipt. Upon
13approval of any district application, the state board shall
14simultaneously approve a reservation of funding for that district
15to administer. Reserved funds shall be disbursed to the district so
16that funding of a district-approved project is not impeded.

17(j) Notwithstanding any other provision of this chapter, districts
18and the Mobile Source Air Pollution Reduction Review Committee
19shall not use funds collected pursuant to Section 41081 or Chapter
207 (commencing with Section 44220), or pursuant to Section
219250.11 of the Vehicle Code, as matching funds to fund a project
22with stationary or portable engines, locomotives, or marine vessels.

23(k) Any funds reserved for a district pursuant to this section are
24available to the district for a period of not more than two years
25from the time of reservation. Funds not expended by June 30 of
26the second calendar year following the date of the reservation shall
27revert back to the state board as of that June 30, and shall be
28deposited in thebegin delete Covered Vehicle Account established pursuant to
29Section 44299.end delete
begin insert fund for use by the program.end insert The funds may then
30be redirected based on applications to the fund. Regardless of any
31reversion of funds back to the state board, the district may continue
32to request other reservations of funds for local administration. Each
33reservation of funds shall be accounted for separately, and unused
34funds from each application shall revert back to the state board as
35specified in this subdivision.

36(l) The state board shall specify a date each year when district
37applications are due. If the eligible applications received in any
38year oversubscribe the available funds, the state board shall reserve
39funds on an allocation basis, pursuant to Section 44299.2. The
40state board may accept a district application after the due date for
P43   1a period of months specified by the state board. Funds may be
2reserved in response to those applications, in accordance with this
3chapter, out of funds remaining after the original reservation of
4funds for the year.

5(m) Guidelines for a district application shall require information
6from an applicant district to the extent necessary to meet the
7requirements of this chapter, but shall otherwise minimize the
8information required of a district.

9(n) A district application shall be reviewed by the state board
10immediately upon receipt. If the state board determines that an
11application is incomplete, the applicant shall be notified within 10
12working days with an explanation of what is missing from the
13application. A completed application fulfilling the criteria shall be
14approved as soon as practicable, but not later than 60 working days
15after receipt.

16(o) The commission, in consultation with the districts, shall
17establish project approval criteria and guidelines for infrastructure
18projects consistent with Section 44284 as soon as practicable, but
19not later than February 15, 2000. The commission shall make draft
20criteria and guidelines available to the public 45 days before final
21adoption, and shall hold at least one public meeting to consider
22public comments before final adoption.

23(p) The commission, in consultation with the participating
24districts, may propose revisions to the criteria and guidelines
25established pursuant to subdivision (o) as necessary to improve
26the ability of the program to achieve its goals. A revision may be
27proposed at any time, or may be proposed in response to a finding
28made in the annual report on the program published by the state
29board pursuant to Section 44295. A proposed revision shall be
30made available to the public 45 days before final adoption of the
31revision and the commission shall hold at least one public meeting
32to consider public comments before final adoption of the revision.

33(q) Unclaimed funds will be allocated by the state board in
34accordance with Section 44299.2.

35(r) This section shall remain in effect only until January 1, 2024,
36and as of that date is repealed, unless a later enacted statute, that
37is enacted before January 1, 2024, deletes or extends that date.

38

SEC. 25.  

Section 44287 of the Health and Safety Code, as
39added by Section 10.5 of Chapter 707 of the Statutes of 2004, is
40amended to read:

P44   1

44287.  

(a) The state board shall establish grant criteria and
2guidelines consistent with this chapter for covered vehicle projects
3as soon as practicable, but not later than January 1, 2000. The
4adoption of guidelines is exempt from the rulemaking provisions
5of the Administrative Procedure Act, Chapter 3.5 (commencing
6with Section 11340) of Part 1 of Division 3 of Title 2 of the
7Government Code. The state board shall solicit input and comment
8from the districts during the development of the criteria and
9guidelines and shall make every effort to develop criteria and
10guidelines that are compatible with existing district programs that
11are also consistent with this chapter. Guidelines shall include
12protocols to calculate project cost-effectiveness. The grant criteria
13and guidelines shall include safeguards to ensure that the project
14generates surplus emissions reductions. Guidelines shall enable
15and encourage districts to cofund projects that provide emissions
16reductions in more than one district. The state board shall make
17draft criteria and guidelines available to the public 45 days before
18final adoption, and shall hold at least one public meeting to
19consider public comments before final adoption.

20(b) The state board, in consultation with the participating
21districts, may propose revisions to the criteria and guidelines
22established pursuant to subdivision (a) as necessary to improve
23the ability of the program to achieve its goals. A proposed revision
24shall be made available to the public 45 days before final adoption
25of the revision and the state board shall hold at least one public
26meeting to consider public comments before final adoption of the
27revision.

28(c) The state board shall reserve funds for, and disburse funds
29to, districts from the fund for administration pursuant to this section
30and Section 44299.1.

31(d) The state board shall develop guidelines for a district to
32follow in applying for the reservation of funds, in accordance with
33this chapter. It is the intent of the Legislature that district
34administration of any reserved funds be in accordance with the
35project selection criteria specified in Sections 44281, 44282, and
3644283 and all other provisions of this chapter. The guidelines shall
37be established and published by the state board as soon as
38practicable, but not later than January 1, 2000.

39(e) Funds shall be reserved by the state board for administration
40by a district that adopts an eligible program pursuant to this chapter
P45   1and offers matching funds at a ratio of one dollar ($1) of matching
2funds committed by the district or the Mobile Source Air Pollution
3Reduction Review Committee for every two dollars ($2) committed
4from the fund. Funds available to the Mobile Source Air Pollution
5Reduction Review Committee may be counted as matching funds
6for projects in the South Coast Air Basin only if the committee
7approves the use of these funds for matching purposes. Matching
8funds may be any funds under the district’s budget authority that
9are committed to be expended in accordance with the program.
10Funds committed by a port authority or a local government, in
11cooperation with a district, to be expended in accordance with the
12program may also be counted as district matching funds. Matching
13funds provided by a port authority or a local government may not
14exceed 30 percent of the total required matching funds in any
15district that applies for more than three hundred thousand dollars
16($300,000) of the state board funds. Only a district, or a port
17authority or a local government teamed with a district, may provide
18matching funds.

19(f) The state board may adjust the ratio of matching funds
20described in subdivision (e), if it determines that an adjustment is
21necessary in order to maximize the use of, or the air quality benefits
22provided by, the program, based on a consideration of the financial
23resources of the district.

24(g) Notwithstanding subdivision (e), a district need not provide
25matching funds for state board funds allocated to the district for
26program outreach activities pursuant to paragraph (4) of subdivision
27(a) of Section 44299.1.

28(h) A district may include within its matching funds a reasonable
29estimate of direct or in-kind costs for assistance in providing
30program outreach and application evaluation. In-kind and direct
31matching funds shall not exceed 15 percent of the total matching
32funds offered by a district. A district may also include within its
33matching funds any money spent on or after February 25, 1999,
34that would have qualified as matching funds but were not
35previously claimed as matching funds.

36(i) A district desiring a reservation of funds shall apply to the
37state board following the application guidelines established
38pursuant to this section. The state board shall approve or disapprove
39a district application not later than 60 days after receipt. Upon
40approval of any district application, the state board shall
P46   1simultaneously approve a reservation of funding for that district
2to administer. Reserved funds shall be disbursed to the district so
3that funding of a district-approved project is not impeded.

4(j) Notwithstanding any other provision of this chapter, districts
5and the Mobile Source Air Pollution Reduction Review Committee
6shall not use funds collected pursuant to Section 41081 or Chapter
77 (commencing with Section 44220), or pursuant to Section
89250.11 of the Vehicle Code, as matching funds to fund a project
9with stationary or portable engines, locomotives, or marine vessels.

10(k) Any funds reserved for a district pursuant to this section are
11available to the district for a period of not more than two years
12from the time of reservation. Funds not expended by June 30 of
13the second calendar year following the date of the reservation shall
14revert back to the state board as of that June 30, and shall be
15deposited in thebegin delete Covered Vehicle Account established pursuant to
16Section 44299.end delete
begin insert fund for use by the program.end insert The funds may then
17be redirected based on applications to the fund. Regardless of any
18reversion of funds back to the state board, the district may continue
19to request other reservations of funds for local administration. Each
20reservation of funds shall be accounted for separately, and unused
21funds from each application shall revert back to the state board as
22 specified in this subdivision.

23(l) The state board shall specify a date each year when district
24applications are due. If the eligible applications received in any
25year oversubscribe the available funds, the state board shall reserve
26funds on an allocation basis, pursuant to subdivision (b) of Section
2744299.1. The state board may accept a district application after
28the due date for a period of months specified by the state board.
29Funds may be reserved in response to those applications, in
30accordance with this chapter, out of funds remaining after the
31original reservation of funds for the year.

32(m) Guidelines for a district application shall require information
33from an applicant district to the extent necessary to meet the
34requirements of this chapter, but shall otherwise minimize the
35information required of a district.

36(n) A district application shall be reviewed by the state board
37immediately upon receipt. If the state board determines that an
38application is incomplete, the applicant shall be notified within 10
39working days with an explanation of what is missing from the
40application. A completed application fulfilling the criteria shall be
P47   1approved as soon as practicable, but not later than 60 working days
2after receipt.

3(o) The state board, in consultation with the districts, shall
4establish project approval criteria and guidelines for infrastructure
5projects consistent with Section 44284 as soon as practicable, but
6not later than February 15, 2000. The commission shall make draft
7criteria and guidelines available to the public 45 days before final
8adoption, and shall hold at least one public meeting to consider
9public comments before final adoption.

10(p) The state board, in consultation with the participating
11districts, may propose revisions to the criteria and guidelines
12established pursuant to subdivision (o) as necessary to improve
13the ability of the program to achieve its goals. A revision may be
14proposed at any time, or may be proposed in response to a finding
15made in the annual report on the program published by the state
16board pursuant to Section 44295. A proposed revision shall be
17made available to the public 45 days before final adoption of the
18revision and the commission shall hold at least one public meeting
19to consider public comments before final adoption of the revision.

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

21begin insert

begin insertSEC. 26.end insert  

end insert

begin insertSection 44299 of the end insertbegin insertHealth and Safety Codeend insertbegin insert is
22repealed.end insert

begin delete
23

44299.  

(a)  The Carl Moyer Memorial Air Quality Standards
24Attainment Trust Fund is hereby created in the State Treasury.
25The Controller shall transfer any unencumbered funds appropriated
26to the commission or the state board for the diesel emissions
27reduction incentive program by Items 3360-001-0314 and
283900-001-0001 of Section 2.00 of the Budget Act of 1998 (Ch.
29324, Stats. 1998), and Items 3360-001-0314, 3360-001-0001,
303360-001-0465, 3900-001-0001, and 3900-001-0115 of Section
312.00 of the Budget Act of 1999 (Ch. 50, Stats. 1999), to the trust
32fund. The money in the trust fund shall be available upon
33appropriation by the Legislature to carry out the purposes of this
34chapter.

35(b)  To ensure that emission reductions are obtained as needed
36from air pollution sources, the following accounts are hereby
37created in the trust fund:

38(1)  The Covered Vehicle Account.

39(2)  The Advanced Technology Account.

P48   1(c)  Notwithstanding Sections 16475, 16475.1, and 16480.6 of
2the Government Code, all of the interest earned on money in the
3trust fund shall be deposited in the trust fund.

end delete
4

begin deleteSEC. 26.end delete
5begin insertSEC. 27.end insert  

Section 44299.1 of the Health and Safety Code, as
6amended by Section 3 of Chapter 627 of the Statutes of 2006, is
7amended to read:

8

44299.1.  

(a) To ensure that emission reductions are obtained
9as needed from pollution sources, anybegin delete moneyend deletebegin insert moneysend insert deposited
10inbegin insert the fund for use by the programend insert or appropriated to thebegin delete fundend delete
11begin insert programend insert shall be segregated and administered as follows:

12(1) Not more than 2 percent of the moneys in the fundbegin insert for use
13by the programend insert
shall be allocated to program support and outreach
14costs incurred by the state board and the commission directly
15associated with implementing the program pursuant to this chapter.
16These funds shall be allocated to the state board and the
17commission in proportion to total program funds administered by
18the state board and the commission.

19(2) Not more than 2 percent of the moneys in the fundbegin insert for use
20by the programend insert
shall be allocated to direct program outreach
21activities. The state board may use these funds for program
22outreach contracts or may allocate outreach funds to participating
23begin delete airend delete districts in proportion to each district’s allocation from the
24begin delete Covered Vehicle Account.end deletebegin insert program moneys in the fund.end insert The state
25board shall report on the use of outreach funds in their reports to
26the Legislature pursuant to Section 44295.

27(3) The balance shall be deposited in thebegin delete Covered Vehicle
28Accountend delete
begin insert fundend insert to be expended to offset added costs of new very
29low or zero-emission vehicle technologies, and emission reducing
30repowers, retrofits, and add-on equipment for covered vehicles
31and engines, and other projects specified in Section 44281.

32(b)  begin deleteFunds in the Covered Vehicle Account end delete begin insertMoneys in the fund end insert
33shall be allocated to a district that submits an eligible application
34to the state board pursuant to Section 44287. The state board shall
35determine the maximum amount of annual funding from the
36begin delete Covered Vehicle Accountend deletebegin insert fund for use by the programend insert that each
37district may receive. This determination shall be based on the
38population in each district as well as the relative importance of
39obtaining covered emission reductions in each district, specifically
40through the program.

P49   1(c) Not more than 5 percent of the moneys allocated pursuant
2to this chapter to a district with a population of one million or more
3may be used by the district for indirect costs of implementation of
4the program, including outreach costs that are subject to the
5limitation in paragraph (2) of subdivision (a).

6(d) Not more than 10 percent of the moneys allocated pursuant
7to this chapter to a district with a population of less than one
8million may be used by the district for indirect costs of
9implementation of the program, including outreach costs that are
10subject to the limitation in paragraph (2) of subdivision (a).

11(e) This section shall remain in effect only until January 1, 2024,
12and as of that date is repealed, unless a later enacted statute, that
13is enacted before January 1, 2024, deletes or extends that date.

14

begin deleteSEC. 27.end delete
15begin insertSEC. 28.end insert  

Section 44299.1 of the Health and Safety Code, as
16added by Section 11.5 of Chapter 707 of the Statutes of 2004, is
17amended to read:

18

44299.1.  

(a) To ensure that emission reductions are obtained
19as needed from pollution sources, anybegin delete moneyend deletebegin insert moneysend insert deposited
20inbegin insert the fund for use by the programend insert or appropriated to thebegin delete fundend delete
21begin insert programend insert shall be segregated and administered as follows:

22(1) Ten percent, not to exceed two million dollars ($2,000,000),
23shall be allocated to thebegin delete Infrastructure Demonstration Projectend delete
24begin insert infrastructure demonstration projectend insert to be used pursuant to Section
2544284.

26(2) Ten percent shall be deposited in thebegin delete Advanced Technology
27Accountend delete
begin insert fund for use by the programend insert to be used to support research,
28development, demonstration, and commercialization of advanced
29low-emission technologies for covered sources that show promise
30of contributing to the goals of the program.

31(3) Not more than 2 percent of the moneys in the fundbegin insert for use
32by the programend insert
shall be allocated to program support and outreach
33costs incurred by the state board and the commission directly
34associated with implementing the program pursuant to this chapter.
35These funds shall be allocated to the state board and the
36commission in proportion to total program funds administered by
37the state board and the commission.

38(4) Not more than 2 percent of the moneys in the fundbegin insert for use
39by the programend insert
shall be allocated to direct program outreach
40activities. The state board may use these funds for program
P50   1outreach contracts or may allocate outreach funds to participating
2air districts in proportion to each district’s allocation from the
3begin delete Covered Vehicle Account.end deletebegin insert fund for use by the program.end insert The state
4board shall report on the use of outreach funds in their reports to
5the Legislature pursuant to Section 44295.

6(5) The balance shall be deposited in thebegin delete Covered Vehicle
7Accountend delete
begin insert fund for use by the programend insert to be expended to offset
8added costs of new very low or zero-emission vehicle technologies,
9and emission reducing repowers, retrofits, and add-on equipment
10for covered vehicles and engines.

11(b) begin deleteFunds in the Covered Vehicle Account end deletebegin insertMoneys in the fund
12for use by the program end insert
shall be allocated to a district that submits
13an eligible application to the state board pursuant to Section 44287.
14The state board shall determine the maximum amount of annual
15funding from thebegin delete Covered Vehicle Accountend deletebegin insert fund for use by the
16programend insert
that each district may receive. This determination shall
17be based on the population in each district as well as the relative
18importance of obtaining NOx reductions in each district,
19specifically through the program.

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

21

begin deleteSEC. 28.end delete
22begin insertSEC. 29.end insert  

Section 44299.2 of the Health and Safety Code is
23amended to read:

24

44299.2.  

Funds shall be allocated tobegin delete local air pollution control
25and air quality managementend delete
districts, and shall be subject to
26administrative terms and conditions as follows:

27(a) Available funds shall be distributed to districts taking into
28consideration the population of the area, the severity of the air
29quality problems experienced by the population, and the historical
30allocation of thebegin delete Carl Moyer Memorial Air Quality Standards
31Attainment Trust Fund,end delete
begin insert program funds,end insert except that the south coast
32district shall be allocated a percentage of the total funds available
33to districts that is proportional to the percentage of the total state
34population residing within the jurisdictional boundaries of that
35district. For the purposes of this subdivision, population shall be
36determined by the state board based on the most recent data
37provided by the Department of Finance. The allocation to the south
38coast district shall be subtracted from the total funds available to
39districts. Each district, except the south coast district, shall be
40awarded a minimum allocation of two hundred thousand dollars
P51   1($200,000), and the remainder, which shall be known as the
2“allocation amount,” shall be allocated to all districts as follows:

3(1) The state board shall distribute 35 percent of the allocation
4amount to the districts in proportion to the percentage of the total
5residual state population that resides within each district’s
6boundaries. For purposes of this paragraph, “total residual state
7population” means the total state population, less the total
8population that resides within the south coast district.

9(2) The state board shall distribute 35 percent of the allocation
10amount to the districts in proportion to the severity of the air quality
11problems to which each district’s population is exposed. The
12severity of the exposure shall be calculated as follows:

13(A) Each district shall be awarded severity points based on the
14district’s attainment designation and classification, as most recently
15promulgated by the federal Environmental Protection Agency for
16the National Ambient Air Quality Standard for ozone averaged
17over eight hours, as follows:

18(i) A district that is designated attainment for the federal
19eight-hour ozone standard shall be awarded one point.

20(ii) A district that is designated nonattainment for the federal
21eight-hour ozone standard shall be awarded severity points based
22on classification. Two points shall be awarded for transitional,
23basic, or marginal classifications, three points for moderate
24classification, four points for serious classification, five points for
25severe classification, six points for severe-17 classification, and
26seven points for extreme classification.

27(B) Each district shall be awarded severity points based on the
28annual diesel particulate emissions in the air basin, as determined
29by the state board. One point shall be awarded to the district, in
30increments, for each 1,000 tons of diesel particulate emissions. In
31making this determination, 0 to 999 tons shall be awarded no
32points, 1,000 to 1,999 tons shall be awarded one point, 2,000 to
332,999 tons shall be awarded two points, and so forth. If a district
34encompasses more than one air basin, the air basin with the greatest
35diesel particulate emissions shall be used to determine the points
36awarded to the district. The San Diego County Air Pollution
37Control District and the Imperial County Air Pollution Control
38District shall be awarded one additional point each to account for
39annual diesel particulate emissions transported from Mexico.

P52   1(C) The points awarded under subparagraphs (A) and (B), shall
2be added together for each district, and the total shall be multiplied
3by the population residing within the district boundaries, to yield
4the local air quality exposure index.

5(D) The local air quality exposure index for each district shall
6be summed together to yield a total state exposure index. Funds
7shall be allocated under this paragraph to each district in proportion
8to its local air quality exposure index divided by the total state
9exposure index.

10(3) The state board shall distribute 30 percent of the allocation
11amount to the districts in proportion to the allocation of funds from
12thebegin delete Carl Moyer Memorial Air Quality Standards Attainment Trust
13Fund,end delete
begin insert program moneys in the fund,end insert as follows:

14(A) Because each district is awarded a minimum allocation
15pursuant to subdivision (a), there shall be no additional minimum
16allocation from thebegin delete Carl Moyerend deletebegin insert programend insert historical allocation funds.
17The total amount allocated in this way shall be subtracted from
18total funding previously awarded to the district under the begin delete Carl
19Moyer Memorial Air Quality Standards Attainment Program,end delete

20begin insert program,end insert and the remainder, which shall be known as directed
21funds, shall be allocated pursuant to subparagraph (B).

22(B) Each district with a population that is greater than or equal
23to 1 percent of the state’s population shall receive an additional
24allocation based on the population of the district and the district’s
25relative share of emission reduction commitments in the state
26implementation plan to attain the National Ambient Air Quality
27Standard for ozone averaged over one hour. This additional
28 allocation shall be calculated as a percentage share of the directed
29funds for each district, derived using a ratio of each district’s share
30amount to the base amount, which shall be calculated as follows:

31(i) The base amount shall be the totalbegin delete Carl Moyerend delete program funds
32allocated by the state board to the districts in the 2002-03 fiscal
33year, less the total of the funds allocated through the minimum
34allocation to each district in the 2002-03 fiscal year.

35(ii) The share amount shall be the allocation that each district
36received in the 2002-03 fiscal year, not including the minimum
37allocation. There shall be one share amount for each district.

38(iii) The percentage share shall be calculated for each district
39by dividing the district’s share amount by the base amount, and
P53   1multiplying the result by the total directed funds available under
2this subparagraph.

3(b) Funds shall be distributed as expeditiously as reasonably
4practicable, and a report of the distribution shall be made available
5to the public.

6(c) All funds allocated pursuant to this section shall be expended
7as provided in the guidelines adopted pursuant to Section 44287
8within two years from the date of allocation. Funds not expended
9within the two years shall be returned to thebegin delete Covered Vehicle
10Accountend delete
begin insert program moneys in the fundend insert within 60 days and shall be
11subject to further allocation as follows:

12(1) Within 30 days of the deadline to return funds, the state
13board shall notify the districts of the total amount of returned funds
14available for reallocation, and shall list those districts that request
15supplemental funds from the reallocation and that are able to
16expend those funds within one year.

17(2) Within 90 days of the deadline to return funds, the state
18board shall allocate the returned funds to the districts listed
19pursuant to paragraph (1).

20(3) All supplemental funds distributed under this subdivision
21shall be expended consistent with thebegin delete Carl Moyer Air Quality
22Standards Attainment Programend delete
begin insert programend insert within one year of the
23date of supplemental allocation. Funds not expended within one
24year shall be returned to thebegin delete Covered Vehicle Accountend deletebegin insert program
25moneys in the fundend insert
and shall be distributed at the discretion of the
26state board to districts, taking into considerationbegin delete ofend delete each district’s
27ability to expeditiously utilize the remaining funds consistent with
28thebegin delete Carl Moyer Air Quality Standards Attainment Program.end delete
29begin insert program.end insert

30(d) This section shall remain in effect only until January 1, 2024,
31and as of that date is repealed, unless a later enacted statute, that
32is enacted before January 1, 2024, deletes or extends that date.

33

begin deleteSEC. 29.end delete
34begin insertSEC. 30.end insert  

Section 42885 of the Public Resources Code, as
35amended by Section 55 of Chapter 77 of the Statutes of 2006, is
36amended to read:

37

42885.  

(a) For purposes of this section, “California tire fee”
38means the fee imposed pursuant to this section.

P54   1(b) (1) begin deleteBefore January 1, 2015, a end deletebegin insertA end insertperson who purchases a
2new tire, as defined in subdivision (g), shall pay a California tire
3fee of one dollar and seventy-five cents ($1.75) per tire.

begin delete

4(2) On and after January 1, 2015, a person who purchases a new
5tire, as defined in subdivision (g), shall pay a California tire fee
6of one dollar and fifty cents ($1.50) per tire.

end delete
begin delete

7(3)

end delete

8begin insert(2)end insert The retail seller shall charge the retail purchaser the amount
9of the California tire fee as a charge that is separate from, and not
10included in, any other fee, charge, or other amount paid by the
11retail purchaser.

begin delete

12(4)

end delete

13begin insert(3)end insert The retail seller shall collect the California tire fee from the
14retail purchaser at the time of sale and may retain 112 percent of
15the fee as reimbursement for any costs associated with the
16collection of the fee. The retail seller shall remit the remainder to
17the state on a quarterly schedule for deposit in the California Tire
18Recycling Management Fund, which is hereby created in the State
19Treasury.

20(c) Thebegin delete boardend deletebegin insert departmentend insert, or its agent authorized pursuant to
21Section 42882, shall be reimbursed for its costs of collection,
22auditing, and making refunds associated with the California Tire
23Recycling Management Fund, but not to exceed 3 percent of the
24total annual revenue deposited in the fund.

25(d) The California tire fee imposed pursuant to subdivision (b)
26shall be separately stated by the retail seller on the invoice given
27to the customer at the time of sale. Any other disposal or
28transaction fee charged by the retail seller related to the tire
29purchase shall be identified separately from the California tire fee.

30(e) A person or business who knowingly, or with reckless
31disregard, makes a false statement or representation in a document
32used to comply with this section is liable for a civil penalty for
33each violation or, for continuing violations, for each day that the
34violation continues. Liability under this section may be imposed
35in a civil action and shall not exceed twenty-five thousand dollars
36($25,000) for each violation.

37(f) In addition to the civil penalty that may be imposed pursuant
38to subdivision (e), thebegin delete boardend deletebegin insert departmentend insert may impose an
39administrative penalty in an amount not to exceed five thousand
40dollars ($5,000) for each violation of a separate provision or, for
P55   1continuing violations, for each day that the violation continues,
2on a person who intentionally or negligently violates a permit,
3rule, regulation, standard, or requirement issued or adopted
4pursuant to this chapter. Thebegin delete boardend deletebegin insert departmentend insert shall adopt
5regulations that specify the amount of the administrative penalty
6and the procedure for imposing an administrative penalty pursuant
7to this subdivision.

8(g) For purposes of this section, “new tire” means a pneumatic
9or solid tire intended for use with onroad or off-road motor
10vehicles, motorized equipment, construction equipment, or farm
11equipment that is sold separately from the motorized equipment,
12or a new tire sold with a new or used motor vehicle, as defined in
13Section 42803.5, including the spare tire, construction equipment,
14or farm equipment. “New tire” does not include retreaded, reused,
15or recycled tires.

16(h) The California tire fee shall not be imposed on a tire sold
17with, or sold separately for use on, any of the following:

18(1) A self-propelled wheelchair.

19(2) A motorized tricycle or motorized quadricycle, as defined
20in Section 407 of the Vehicle Code.

21(3) A vehicle that is similar to a motorized tricycle or motorized
22quadricycle and is designed to be operated by a person who, by
23reason of the person’s physical disability, is otherwise unable to
24move about as a pedestrian.

25(i) This section shall remain in effect only until January 1, 2024,
26and as of that date is repealed, unless a later enacted statute, that
27is enacted before January 1, 2024, deletes or extends that date.

28

begin deleteSEC. 30.end delete
29begin insertSEC. 31.end insert  

Section 42885 of the Public Resources Code, as added
30by Section 13.5 of Chapter 707 of the Statutes of 2004, is amended
31to read:

32

42885.  

(a) For purposes of this section, “California tire fee”
33means the fee imposed pursuant to this section.

34(b) (1) Every person who purchases a new tire, as defined in
35subdivision (g), shall pay a California tire fee of seventy-five cents
36($0.75) per tire.

37(2) The retail seller shall charge the retail purchaser the amount
38of the California tire fee as a charge that is separate from, and not
39included in, any other fee, charge, or other amount paid by the
40retail purchaser.

P56   1(3) The retail seller shall collect the California tire fee from the
2retail purchaser at the time of sale and may retain 3 percent of the
3fee as reimbursement for any costs associated with the collection
4of the fee. The retail seller shall remit the remainder to the state
5on a quarterly schedule for deposit in the California Tire Recycling
6Management Fund, which is hereby created in the State Treasury.

7(c) Thebegin delete boardend deletebegin insert departmentend insert, or its agent authorized pursuant to
8Section 42882, shall be reimbursed for its costs of collection,
9auditing, and making refunds associated with the California Tire
10Recycling Management Fund, but not to exceed 3 percent of the
11total annual revenue deposited in the fund.

12(d) The California tire fee imposed pursuant to subdivision (b)
13shall be separately stated by the retail seller on the invoice given
14to the customer at the time of sale. Any other disposal or
15transaction fee charged by the retail seller related to the tire
16purchase shall be identified separately from the California tire fee.

17(e) Any person or business who knowingly, or with reckless
18disregard, makes any false statement or representation in any
19document used to comply with this section is liable for a civil
20penalty for each violation or, for continuing violations, for each
21day that the violation continues. Liability under this section may
22be imposed in a civil action and shall not exceed twenty-five
23thousand dollars ($25,000) for each violation.

24(f) In addition to the civil penalty that may be imposed pursuant
25to subdivision (e), thebegin delete boardend deletebegin insert departmentend insert may impose an
26administrative penalty in an amount not to exceed five thousand
27dollars ($5,000) for each violation of a separate provision or, for
28continuing violations, for each day that the violation continues,
29on any person who intentionally or negligently violates any permit,
30rule, regulation, standard, or requirement issued or adopted
31pursuant to this chapter. Thebegin delete boardend deletebegin insert departmentend insert shall adopt
32regulations that specify the amount of the administrative penalty
33and the procedure for imposing an administrative penalty pursuant
34to this subdivision.

35(g) For purposes of this section, “new tire” means a pneumatic
36or solid tire intended for use with onroad or off-road motor
37vehicles, motorized equipment, construction equipment, or farm
38equipment that is sold separately from the motorized equipment,
39or a new tire sold with a new or used motor vehicle, as defined in
40Section 42803.5, including the spare tire, construction equipment,
P57   1or farm equipment. “New tire” does not include retreaded, reused,
2or recycled tires.

3(h) The California tire fee may not be imposed on any tire sold
4with, or sold separately for use on, any of the following:

5(1) Any self-propelled wheelchair.

6(2) Any motorized tricycle or motorized quadricycle, as defined
7in Section 407 of the Vehicle Code.

8(3) Any vehicle that is similar to a motorized tricycle or
9motorized quadricycle and is designed to be operated by a person
10who, by reason of the person’s physical disability, is otherwise
11unable to move about as a pedestrian.

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

13

begin deleteSEC. 31.end delete
14begin insertSEC. 32.end insert  

Section 42889 of the Public Resources Code, as
15amended by Section 3 of Chapter 333 of the Statutes of 2009, is
16amended to read:

17

42889.  

(a) begin deleteCommencing January 1, 2005, of end deletebegin insertOf end insertthe moneys
18collected pursuant to Section 42885, an amount equal to
19seventy-five cents ($0.75) per tire on which the fee is imposed
20shall be transferred by the State Board of Equalization to the Air
21Pollution Control Fund. The state board shall expend those moneys,
22or allocate those moneys to the districts for expenditure, to fund
23programs and projects that mitigate or remediate air pollution
24caused by tires in the state, to the extent that the state board or the
25applicable district determines that the program or project
26remediates air pollution harms created by tires upon which the fee
27described in Section 42885 is imposed.

28(b) The remaining moneys collected pursuant to Section 42885
29shall be used to fund the waste tire program, and shall be
30appropriated to thebegin delete boardend deletebegin insert departmentend insert in the annual Budget Act in
31a manner consistent with the five-year plan adopted and updated
32by thebegin delete boardend deletebegin insert departmentend insert. These moneys shall be expended for the
33payment of refunds under this chapter and for the following
34purposes:

35(1) To pay the administrative overhead cost of this chapter, not
36to exceed 6 percent of the total revenue deposited in the fund
37annually, or an amount otherwise specified in the annual Budget
38Act.

39(2) To pay the costs of administration associated with collection,
40making refunds, and auditing revenues in the fund, not to exceed
P58   13 percent of the total revenue deposited in the fund, as provided
2in subdivision (c) of Section 42885.

3(3) To pay the costs associated with operating the tire recycling
4program specified in Article 3 (commencing with Section 42870).

5(4) To pay the costs associated with the development and
6enforcement of regulations relating to the storage of waste tires
7and used tires. Thebegin delete boardend deletebegin insert departmentend insert shall consider designating a
8city, county, or city and county as the enforcement authority of
9regulations relating to the storage of waste tires and used tires, as
10provided in subdivision (c) of Section 42850, and regulations
11relating to the hauling of waste and used tires, as provided in
12subdivision (b) of Section 42963. If thebegin delete boardend deletebegin insert departmentend insert
13 designates a local entity for that purpose, thebegin delete boardend deletebegin insert departmentend insert
14 shall provide sufficient, stable, and noncompetitive funding to that
15entity for that purpose, based on available resources, as provided
16in the five-year plan adopted and updated as provided in
17subdivision (a) of Section 42885.5. Thebegin delete boardend deletebegin insert departmentend insert may
18consider and create, as appropriate, financial incentives for citizens
19who report the illegal hauling or disposal of waste tires as a means
20of enhancing local and statewide waste tire and used tire
21enforcement programs.

22(5) To pay the costs of cleanup, abatement, removal, or other
23remedial action related to waste tire stockpiles throughout the state,
24including all approved costs incurred by other public agencies
25involved in these activities by contract with thebegin delete boardend deletebegin insert departmentend insert.
26Not less than six million five hundred thousand dollars
27($6,500,000) shall be expended by thebegin delete boardend deletebegin insert departmentend insert during
28each of the following fiscal years for this purpose: 2001-02 to
292006-07, inclusive.

30(6) To make studies and conduct research directed at promoting
31and developing alternatives to the landfill disposal of waste tires.

32(7) To assist in developing markets and new technologies for
33used tires and waste tires. Thebegin delete board’send deletebegin insert department’send insert expenditure
34of funds for purposes of this subdivision shall reflect the priorities
35for waste management practices specified in subdivision (a) of
36Section 40051.

37(8) To pay the costs associated with implementing and operating
38a waste tire and used tire hauler program and manifest system
39pursuant to Chapter 19 (commencing with Section 42950).

P59   1(9) To pay the costs to create and maintain an emergency
2reserve, which shall not exceed one million dollars ($1,000,000).

3(10) To pay the costs of cleanup, abatement, or other remedial
4action related to the disposal of waste tires in implementing and
5operating the Farm and Ranch Solid Waste Cleanup and Abatement
6Grant Program established pursuant to Chapter 2.5 (commencing
7with Section 48100) of Part 7.

8(11) To fund border region activities specified in paragraph (8)
9of subdivision (b) of Section 42885.5.

10(c) This section shall remain in effect only until January 1, 2024,
11and as of that date is repealed, unless a later enacted statute that
12is enacted before January 1, 2024, deletes or extends that date.

13

begin deleteSEC. 32.end delete
14begin insertSEC. 33.end insert  

Section 42889 of the Public Resources Code, as
15amended by Section 4 of Chapter 333 of the Statutes of 2009, is
16amended to read:

17

42889.  

Funding for the waste tire program shall be appropriated
18to thebegin delete boardend deletebegin insert departmentend insert in the annual Budget Act. The moneys in
19the fund shall be expended for the payment of refunds under this
20chapter and for the following purposes:

21(a) To pay the administrative overhead cost of this chapter, not
22to exceed 5 percent of the total revenue deposited in the fund
23annually, or an amount otherwise specified in the annual Budget
24Act.

25(b) To pay the costs of administration associated with collection,
26making refunds, and auditing revenues in the fund, not to exceed
273 percent of the total revenue deposited in the fund, as provided
28in subdivision (b) of Section 42885.

29(c) To pay the costs associated with operating the tire recycling
30program specified in Article 3 (commencing with Section 42870).

31(d) To pay the costs associated with the development and
32enforcement of regulations relating to the storage of waste tires
33and used tires. Thebegin delete boardend deletebegin insert departmentend insert shall consider designating a
34city, county, or city and county as the enforcement authority of
35regulations relating to the storage of waste tires and used tires, as
36provided in subdivision (c) of Section 42850, and regulations
37relating to the hauling of waste and used tires, as provided in
38subdivision (b) of Section 42963. If thebegin delete boardend deletebegin insert departmentend insert
39 designates a local entity for that purpose, thebegin delete boardend deletebegin insert departmentend insert
40 shall provide sufficient, stable, and noncompetitive funding to that
P60   1entity for that purpose, based on available resources, as provided
2in the five-year plan adopted and updated as provided in
3subdivision (a) of Section 42885.5. Thebegin delete boardend deletebegin insert departmentend insert may
4consider and create, as appropriate, financial incentives for citizens
5who report the illegal hauling or disposal of waste tires as a means
6of enhancing local and statewide waste tire and used tire
7enforcement programs.

8(e) To pay the costs of cleanup, abatement, removal, or other
9remedial action related to waste tire stockpiles throughout the state,
10including all approved costs incurred by other public agencies
11involved in these activities by contract with thebegin delete boardend deletebegin insert departmentend insert.
12Not less than six million five hundred thousand dollars
13($6,500,000) shall be expended by thebegin delete boardend deletebegin insert departmentend insert during
14each of the following fiscal years for this purpose: 2001-02 to
152006-07, inclusive.

16(f) To fund border region activities specified in paragraph (8)
17of subdivision (b) of Section 42885.5.

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

19

begin deleteSEC. 33.end delete
20begin insertSEC. 34.end insert  

Section 9250.1 of the Vehicle Code is amended to
21read:

22

9250.1.  

(a) Beginning July 1, 2008, the fee described in Section
239250 shall be increased by three dollars ($3).

24(b) Two dollars ($2) of the increase shall be deposited into the
25Alternative and Renewable Fuel and Vehicle Technology Fund
26created by Section 44273 of the Health and Safety Code, and one
27dollar ($1) shall be deposited into the Enhanced Fleet
28Modernization Subaccount created by Section 44126 of the Health
29and Safety Code.

30(c) This section shall remain in effect only until January 1, 2024,
31and as of that date is repealed, unless a later enacted statute, that
32is enacted before January 1, 2024, deletes or extends that date.

33

begin deleteSEC. 34.end delete
34begin insertSEC. 35.end insert  

Section 9250.2 of the Vehicle Code, as amended by
35Section 15 of Chapter 707 of the Statutes of 2004, is amended to
36read:

37

9250.2.  

(a) The department, if requested by the Sacramento
38Metropolitan Air Quality Management District pursuant to Section
3941081 of the Health and Safety Code, shall impose and collect a
40surcharge on the registration fees for every motor vehicle registered
P61   1in that district, not to exceed the amount of six dollars ($6), as
2specified by the governing body of that district.

3(b) This section shall remain in effect only until January 1, 2024,
4and as of that date is repealed, unless a later enacted statute, that
5is enacted before January 1, 2024, deletes or extends that date.

6

begin deleteSEC. 35.end delete
7begin insertSEC. 36.end insert  

Section 9250.2 of the Vehicle Code, as added by
8Section 15.5 of Chapter 707 of the Statutes of 2004, is amended
9to read:

10

9250.2.  

(a) The department, if requested by the Sacramento
11Metropolitan Air Quality Management District pursuant to Section
1241081 of the Health and Safety Code, shall impose and collect a
13surcharge on the registration fees for every motor vehicle registered
14in that district, not to exceed four dollars ($4).

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

16

begin deleteSEC. 36.end delete
17begin insertSEC. 37.end insert  

Section 9261.1 of the Vehicle Code is amended to
18read:

19

9261.1.  

(a) Beginning July 1, 2008, the fee described in Section
209261, as adjusted pursuant to Section 1678, shall be increased by
21five dollars ($5).

22(b) Two dollars and fifty cents ($2.50) of the increase shall be
23deposited into the Alternative and Renewable Fuel and Vehicle
24Technology Fund created by Section 44273 of the Health and
25Safety Code, and two dollars and fifty cents ($2.50) shall be
26deposited into the Air Quality Improvement Fund created by
27Section 44274.5 of the Health and Safety Code.

28(c) This section shall remain in effect only until January 1, 2024,
29and as of that date is repealed, unless a later enacted statute, that
30is enacted before January 1, 2024, deletes or extends that date.

31

begin deleteSEC. 37.end delete
32begin insertSEC. 38.end insert  

Section 9853.6 of the Vehicle Code is amended to
33read:

34

9853.6.  

(a) (1) Beginning July 1, 2008, the fee described in
35paragraph (1) of subdivision (b) of Section 9853 shall be increased
36by ten dollars ($10).

37(2) Five dollars ($5) of the increase shall be deposited into the
38Alternative and Renewable Fuel and Vehicle Technology Fund
39created by Section 44273 of the Health and Safety Code and five
P62   1dollars ($5) shall be deposited into the Air Quality Improvement
2Fund created by Section 44274.5 of the Health and Safety Code.

3(b) (1) Beginning July 1, 2008, the fee described in paragraph
4(2) of subdivision (b) of Section 9853 shall be increased by twenty
5dollars ($20).

6(2) Ten dollars ($10) of the increase shall be deposited into the
7Alternative and Renewable Fuel and Vehicle Technology Fund
8created by Section 44273 of the Health and Safety Code and ten
9dollars ($10) shall be deposited into the Air Quality Improvement
10Fund created by Section 44274.5 of the Health and Safety Code.

11(c) This section shall remain in effect only until January 1, 2024,
12and as of that date is repealed, unless a later enacted statute, that
13is enacted before January 1, 2024, deletes or extends that date.

14

begin deleteSEC. 38.end delete
15begin insertSEC. 39.end insert  

This act is an urgency statute necessary for the
16immediate preservation of the public peace, health, or safety within
17the meaning of Article IV of the Constitution and shall go into
18immediate effect. The facts constituting the necessity are:

19To ensure stable funding for programs to reduce air pollution
20for the protection of the public health and safety, it is necessary
21for this measure to take effect immediately.



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