BILL NUMBER: SB 11	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  SEPTEMBER 6, 2013
	AMENDED IN ASSEMBLY  SEPTEMBER 3, 2013
	AMENDED IN ASSEMBLY  AUGUST 6, 2013
	AMENDED IN SENATE  MAY 28, 2013
	AMENDED IN SENATE  MAY 15, 2013
	AMENDED IN SENATE  APRIL 18, 2013

INTRODUCED BY   Senators Pavley and Cannella
   (Principal coauthor: Senator Hill)
    (   Principal coauthor:   Assembly Member
  Perea   ) 
   (Coauthor: Senator Jackson)
    (   Coauthor:  
Assembly Member   Perea   )


                        DECEMBER 3, 2012

   An act to amend Sections  41081,  44060.5,
 44225, 44229, 44270.3,   44125,  44271,
 44272, 44273, 44274,  44275, 44280, 44281, 44282,
44283, 44287, 44299.1, and 44299.2 of,  to add and repeal
Section 43018.9 of,  and to repeal Section 44299 of, 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. 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.  
   This bill would provide that the state board, until January 1,
2024, has no authority to enforce any element of its existing clean
fuels outlet regulation or other regulation that requires or has the
effect of requiring any supplier, as defined, to construct, operate,
or provide funding for the construction or operation of any publicly
available hydrogen-fueling station. The bill would require the board
to aggregate and make available to the public, no later than June 30,
2014, and every year thereafter until January 1, 2024, the number of
hydrogen-fueled vehicles that motor vehicle manufacturers project to
be sold or leased over the next 3 years, as reported to the state
board, and the number of hydrogen-fueled vehicles registered with the
Department of Motor Vehicles through April 30. The bill, until
January 1, 2024, would require the commission to allocate $20 million
annually, as specified, until there are at least 100 publicly
available hydrogen-fueling stations in California. The bill, on or
before December 31, 2015, and annually thereafter until January 1,
2024, would require the commission and the board to jointly review
and report on the progress toward establishing a hydrogen-fueling
network that provides the coverage and capacity to fuel vehicles
requiring hydrogen fuel that are being placed into operation in the
state, as specified. The bill would authorize the commission, until
January 1, 2024, 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, 2014, would require the
state board, in consultation with air pollution control and air
quality management districts, to 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 the enhanced fleet
modernization program for the retirement of certain high polluting
vehicles.  
   (1) Existing law creates the enhanced fleet modernization program,
administered by the Bureau of Automotive Repair in the Department of
Consumer Affairs, to provide compensation for the retirement of
passenger vehicles, and light-duty and medium-duty trucks that are
high polluters. Existing law provides that under this program
compensation for retired vehicles for a low-income motor vehicle
owner, as defined, is $1,500, and for all other motor vehicle owners,
it is $1,000. Existing law authorizes this compensation to be
increased by the department based on various factors, including the
emissions benefits of the vehicle's retirement.  
   This bill would require the state board, in consultation with the
bureau and no later than June 30, 2015, to update the guidelines for
the enhanced fleet modernization program to include specified
elements and to study and consider specified elements. The bill, in
addition, would establish compensation for replacement vehicles for
low-income vehicle owners at not less than $2,500 and would make this
compensation available to an owner in addition to the compensation
for a retired vehicle. The bill also would instead authorize an
increase in the compensation under these programs for either retired
or replacement vehicles only for low-income motor vehicle owners as
necessary to balance maximizing air quality benefits of the program
while ensuring participation by low-income motor vehicle owners, as
specified. 
   (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 Attainment Program, which is administered by the state
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. The bill also would delete obsolete
references and make conforming changes to the Carl Moyer program.

   (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 air district that has been
designated a state nonattainment area by the state board for any
motor vehicle air pollutant, except the Sacramento Metropolitan Air
Quality Management District, to levy a surcharge on the registration
fees for every motor vehicle registered in that air district, as
specified by the governing body of the air district. Existing law
requires the Department of Motor Vehicles to collect that surcharge
if requested by an air district, and requires the department, after
deducting its administrative costs, to distribute the revenues to the
air 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 imposed be deposited in the Air
Pollution Control Fund with these moneys to be available upon
appropriation by the Legislature for use by the state board and air
districts for specified purposes. Existing law reduces the tire fee
to $0.75 per tire on and after January 1, 2015.  
   This bill would instead set the tire fee at $1.75 per tire until
January 1, 2024, and reduce the tire fee to $0.75 per tire on and
after January 1, 2024.  
   (7) 
    (4)  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 the state 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. 
   (5) This bill would make its provisions contingent on the
enactment of AB 8 of the 2013-14 Regular Session.  
   (8) 
    (6)  This bill would declare that it is to take effect
immediately as an urgency statute.
   Vote: 2/3. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
   
  SECTION 1.    Section 41081 of the Health and
Safety Code, as amended by Section 1.5 of Chapter 216 of the Statutes
of 2011, is amended to read:
   41081.  (a) Subject to Article 3.7 (commencing with Section 53720)
of Chapter 4 of Part 1 of Division 2 of Title 5 of the Government
Code, or with the approval of the board of supervisors of each county
included, in whole or in part, within the Sacramento district, the
Sacramento district board may adopt a surcharge on the motor vehicle
registration fees applicable to all motor vehicles registered in
those counties within the Sacramento district whose boards of
supervisors have adopted a resolution approving the surcharge. The
surcharge shall be collected by the Department of Motor Vehicles and,
after deducting the department's administrative costs, the remaining
funds shall be transferred to the Sacramento district. Prior to the
adoption of any surcharge pursuant to this subdivision, the district
board shall make a finding that any funds allocated to the district
as a result of the adoption of a county transportation sales and use
tax are insufficient to carry out the purposes of this chapter.
   (b) The surcharge shall not exceed six dollars ($6).
   (c) After consulting with the Department of Motor Vehicles on the
feasibility thereof, the Sacramento district board may provide, in
the surcharge adopted pursuant to subdivision (a), to exempt from all
or part of the surcharge any category of low-emission motor vehicle.

   (d) Funds received by the Sacramento district pursuant to this
section shall be used by that district as follows:
   (1) The revenues resulting from the first four dollars ($4) of
each surcharge shall be used to implement reductions in emissions
from vehicular sources, including, but not limited to, a clean fuels
program and motor vehicle use reduction measures.
   (2) The revenues resulting from the next two dollars ($2) of each
surcharge shall be used to implement the following programs that
achieve emission reductions from vehicular sources and off-road
engines, to the extent that the district determines the program
remediates air pollution harms created by motor vehicles on which the
surcharge is imposed:
   (A) Projects eligible for grants under the Carl Moyer Memorial Air
Quality Standards Attainment Program (Chapter 9 (commencing with
Section 44275) of Part 5).
   (B) The new purchase, retrofit, repower, or add-on of equipment
for previously unregulated agricultural sources of air pollution, as
defined in Section 39011.5, within the Sacramento district, for a
minimum of three years from the date of adoption of an applicable
rule or standard, or until the compliance date of that rule or
standard, whichever is later, if the state board has determined that
the rule or standard complies with Sections 40913, 40914, and
41503.1, after which period of time, a new purchase, retrofit,
repower, or add-on of equipment shall not be funded pursuant to this
chapter. The district shall follow any guidelines developed under
subdivision (a) of Section 44287 for awarding grants under this
program.
   (C) The purchase of new, or retrofit of emissions control
equipment for existing, schoolbuses pursuant to the Lower-Emission
School Bus Program adopted by the state board.
   (D) An accelerated vehicle retirement or repair program that is
adopted by the state board pursuant to authority granted hereafter by
the Legislature by statute.
   (E) The replacement of onboard natural gas fuel tanks on
schoolbuses owned by a school district that are 14 years or older,
not to exceed twenty thousand dollars ($20,000) per bus, pursuant to
the Lower-Emission School Bus Program adopted by the state board.
   (F) The enhancement of deteriorating natural gas fueling
dispensers of fueling infrastructure operated by a school district
with a one-time funding amount not to exceed five hundred dollars
($500) per dispenser, pursuant to the Lower-Emission School Bus
Program adopted by the state board.
   (e) Not more than 5 percent of the funds collected pursuant to
this section shall be used by the district for administrative
expenses.
   (f) A project funded by the program shall not be used for credit
under any state or federal emissions averaging, banking, or trading
program. An emission reduction generated by the program shall not be
used as marketable emission reduction credits or to offset any
emission reduction obligation of any person or entity. Projects
involving new engines that would otherwise generate marketable
credits under state or federal averaging, banking, and trading
programs shall include transfer of credits to the engine end user and
retirement of those credits toward reducing air emissions in order
to qualify for funding under the program. A purchase of a
low-emission vehicle or of equipment pursuant to a corporate or a
controlling board's policy, but not otherwise required by law, shall
generate surplus emissions reductions and may be funded by the
program.
   (g) This section shall remain in effect only until January 1,
2024, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2024, deletes or extends
that date.  
  SEC. 2.    Section 41081 of the Health and Safety
Code, as added by Section 2.5 of Chapter 707 of the Statutes of 2004,
is amended to read:
   41081.  (a) Subject to Article 3.7 (commencing with Section 53720)
of Chapter 4 of Part 1 of Division 2 of Title 5 of the Government
Code, or with the approval of the board of supervisors of each county
included, in whole or in part, within the Sacramento district, the
Sacramento district board may adopt a surcharge on the motor vehicle
registration fees applicable to all motor vehicles registered in
those counties within the Sacramento district whose boards of
supervisors have adopted a resolution approving the surcharge. The
surcharge shall be collected by the Department of Motor Vehicles and,
after deducting the department's administrative costs, the remaining
funds shall be transferred to the Sacramento district. Prior to the
adoption of any surcharge pursuant to this subdivision, the district
board shall make a finding that any funds allocated to the district
as a result of the adoption of a county transportation sales and use
tax are insufficient to carry out the purposes of this chapter.
   (b) The surcharge shall not exceed four dollars ($4).
   (c) After consulting with the Department of Motor Vehicles on the
feasibility thereof, the Sacramento district board may provide, in
the surcharge adopted pursuant to subdivision (a), to exempt from all
or part of the surcharge any category of low-emission motor vehicle.

   (d) Funds received by the Sacramento district pursuant to this
section shall be used to implement the strategy with respect to the
reduction in emissions from vehicular sources, including, but not
limited to, a clean fuels program and motor vehicle use reduction
measures. Not more than 5 percent of the funds collected pursuant to
this section shall be used by the district for administrative
expenses.
   (e) This section shall become operative on January 1, 2024.
 
  SEC. 3.    Section 43018.9 is added to the Health
and Safety Code, to read:
   43018.9.  (a) For purposes of this section, the following terms
have the following meanings:
   (1) "Commission" means the State Energy Resources Conservation and
Development Commission.
   (2) "Publicly available hydrogen-fueling station" means the
equipment used to store and dispense hydrogen fuel to vehicles
according to industry codes and standards that is open to the public.

   (b) Notwithstanding any other law, the state board shall have no
authority to enforce any element of its existing clean fuels outlet
regulation or of any other regulation that requires or has the effect
of requiring that any supplier, as defined in Section 7338 of the
Revenue and Taxation Code as in effect on May 22, 2013, construct,
operate, or provide funding for the construction or operation of any
publicly available hydrogen-fueling station.
   (c) On or before June 30, 2014, and every year thereafter, the
state board shall aggregate and make available all of the following:
   (1) The number of hydrogen-fueled vehicles that motor vehicle
manufacturers project to be sold or leased over the next three years
as reported to the state board pursuant to the Low Emission Vehicle
regulations, as currently established in Sections 1961 to 1961.2,
inclusive, of Title 13 of the California Code of Regulations.
   (2) The total number of hydrogen-fueled vehicles registered with
the Department of Motor Vehicles through April 30.
   (d) On or before June 30, 2014, and every year thereafter, the
state board, based on the information made available pursuant to
subdivision (c), shall do both of the following:
   (1) Evaluate the need for additional publicly available
hydrogen-fueling stations for the subsequent three years in terms of
quantity of fuel needed for the actual and projected number of
hydrogen-fueled vehicles, geographic areas where fuel will be needed,
and station coverage.
   (2) Report findings to the commission on the need for additional
publicly available hydrogen-fueling stations in terms of number of
stations, geographic areas where additional stations will be needed,
and minimum operating standards, such as number of dispensers,
filling protocols, and pressures.
   (e) (1) The commission shall allocate twenty million dollars
($20,000,000) annually to fund the number of stations identified
pursuant to subdivision (d), not to exceed 20 percent of the moneys
appropriated by the Legislature from the Alternative and Renewable
Fuel and Vehicle Technology Fund, established pursuant to Section
44273, until there are at least 100 publicly available
hydrogen-fueling stations in operation in California.
   (2) If the commission, in consultation with the state board,
determines that the full amount identified in paragraph (1) is not
needed to fund the number of stations identified by the state board
pursuant to subdivision (d), the commission may allocate any
remaining moneys to other projects, subject to the requirements of
the Alternative and Renewable Fuel and Vehicle Technology Program
pursuant to Article 2 (commencing with Section 44272) of Chapter 8.9.

   (3) Allocations by the commission pursuant to this subdivision
shall be subject to all of the requirements applicable to allocations
from the Alternative and Renewable Fuel and Vehicle Technology
Program pursuant to Article 2 (commencing with Section 44272) of
Chapter 8.9.
   (4) The commission, in consultation with the state board, shall
award moneys allocated in paragraph (1) based on best available data,
including information made available pursuant to subdivision (d),
and input from relevant stakeholders, including motor vehicle
manufacturers that have planned deployments of hydrogen-fueled
vehicles, according to a strategy that supports the deployment of an
effective and efficient hydrogen-fueling station network in a way
that maximizes benefits to the public while minimizing costs to the
state.
   (5) Notwithstanding paragraph (1), once the commission determines,
in consultation with the state board, that the private sector is
establishing publicly available hydrogen-fueling stations without the
need for government support, the commission may cease providing
funding for those stations.
   (6) On or before December 31, 2015, and annually thereafter, the
commission and the state board shall jointly review and report on
progress toward establishing a hydrogen-fueling network that provides
the coverage and capacity to fuel vehicles requiring hydrogen fuel
that are being placed into operation in the state. The commission and
the state board shall consider the following, including, but not
limited to, the available plans of automobile manufacturers to deploy
hydrogen-fueled vehicles in California and their progress toward
achieving those plans, the rate of deployment of hydrogen-fueled
vehicles, the length of time required to permit and construct
hydrogen-fueling stations, the coverage and capacity of the existing
hydrogen-fueling station network, and the amount and timing of growth
in the fueling network to ensure fuel is available to these
vehicles. The review shall also determine the remaining cost and
timing to establish a network of 100 publicly available
hydrogen-fueling stations and whether funding from the Alternative
and Renewable Fuel and Vehicle Technology Program remains necessary
to achieve this goal.
   (f) To assist in the implementation of this section and maximize
the ability to deploy fueling infrastructure as rapidly as possible
with the assistance of private capital, the commission may design
grants, loan incentive programs, revolving loan programs, and other
forms of financial assistance. The commission also may enter into an
agreement with the Treasurer to provide financial assistance to
further the purposes of this section.
   (g) Funds appropriated to the commission for the purposes of this
section shall be available for encumbrance by the commission for up
to four years from the date of the appropriation and for liquidation
up to four years after expiration of the deadline to encumber.
   (h) Notwithstanding any other law, the state board, in
consultation with districts, no later than July 1, 2014, shall
convene working groups to evaluate the policies and goals contained
within the Carl Moyer Memorial Air Quality Standards Attainment
Program, pursuant to Section 44280, and Assembly Bill 923 (Chapter
707 of the Statutes of 2004).
   (i) This section shall remain in effect only until January 1,
2024, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2024, deletes or extends
that date. 
   SEC. 4.   SECTION 1.   Section 44060.5
of the Health and Safety Code is amended to read:
   44060.5.  (a) Beginning July 1, 2008, the smog abatement fee
described in subdivision (d) of Section 44060 shall be increased by
eight dollars ($8).
   (b) Revenues generated by the increase described in this section
shall be distributed as follows:
   (1) The revenues generated by four dollars ($4) shall be deposited
in the Air Quality Improvement Fund created by Section 44274.5.
   (2) The revenues generated by four dollars ($4) shall be deposited
in the Alternative and Renewable Fuel and Vehicle Technology Fund
created by Section 44273.
   (c) This section shall remain in effect only until January 1,
2024, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2024, deletes or extends
that date. 
  SEC. 5.    Section 44225 of the Health and Safety
Code, as amended by Section 3 of Chapter 707 of the Statutes of 2004,
is amended to read:
   44225.  A district may increase the fee established under Section
44223 to up to six dollars ($6). A district may increase the fee only
if the following conditions are met:
   (a) A resolution providing for both the fee increase and a
corresponding program for expenditure of the increased fees for the
reduction of air pollution from motor vehicles pursuant to, and for
related planning, monitoring, enforcement, and technical studies
necessary for the implementation of, the California Clean Air Act of
1988 is adopted and approved by the governing board of the district.
   (b) In districts with nonelected officials on their governing
boards, the resolution shall be adopted and approved by both a
majority of the governing board and a majority of the board members
who are elected officials.
   (c) An increase in fees established pursuant to this section shall
become effective on either April 1 or October 1, as provided in the
resolution adopted by the board pursuant to subdivision (a).
   (d) This section shall remain in effect only until January 1,
2024, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2024, deletes or extends
that date. 
  SEC. 6.    Section 44225 of the Health and Safety
Code, as added by Section 3.5 of Chapter 707 of the Statutes of 2004,
is amended to read:
   44225.  A district may increase the fee established under Section
44223 to up to four dollars ($4). A district may increase the fee
only if the following conditions are met:
   (a) A resolution providing for both the fee increase and a
corresponding program for expenditure of the increased fees for the
reduction of air pollution from motor vehicles pursuant to, and for
related planning, monitoring, enforcement, and technical studies
necessary for the implementation of, the California Clean Air Act of
1988 is adopted and approved by the governing board of the district.
   (b) In districts with nonelected officials on their governing
boards, the resolution shall be adopted and approved by both a
majority of the governing board and a majority of the board members
who are elected officials.
   (c) An increase in fees established pursuant to this section shall
become effective on either April 1 or October 1, as provided in the
resolution adopted by the board pursuant to subdivision (a).
   (d) This section shall become operative on January 1, 2024.
 
  SEC. 7.    Section 44229 of the Health and Safety
Code, as amended by Section 2.5 of Chapter 216 of the Statutes of
2011, is amended to read:
   44229.  (a) After deducting all administrative costs it incurs
through collection of fees pursuant to Section 44227, the Department
of Motor Vehicles shall distribute the revenues to districts, which
shall use the revenues resulting from the first four dollars ($4) of
each fee imposed to reduce air pollution from motor vehicles and to
carry out related planning, monitoring, enforcement, and technical
studies necessary for implementation of the California Clean Air Act
of 1988. Fees collected by the Department of Motor Vehicles pursuant
to this chapter shall be distributed to districts based upon the
amount of fees collected from motor vehicles registered within each
district.
   (b) Notwithstanding Sections 44241 and 44243, a district shall use
the revenues resulting from the next two dollars ($2) of each fee
imposed pursuant to Section 44227 to implement the following programs
that the district determines remediate air pollution harms created
by motor vehicles on which the surcharge is imposed:
   (1) Projects eligible for grants under the Carl Moyer Memorial Air
Quality Standards Attainment Program (Chapter 9 (commencing with
Section 44275) of Part 5).
   (2) The new purchase, retrofit, repower, or add-on equipment for
previously unregulated agricultural sources of air pollution, as
defined in Section 39011.5, for a minimum of three years from the
date of adoption of an applicable rule or standard, or until the
compliance date of that rule or standard, whichever is later, if the
state board has determined that the rule or standard complies with
Sections 40913, 40914, and 41503.1, after which period of time, a new
purchase, retrofit, repower, or add-on of equipment shall not be
funded pursuant to this chapter. The districts shall follow any
guidelines developed under subdivision (a) of Section 44287 for
awarding grants under this program.
   (3) The purchase of new, or retrofit of emissions control
equipment for existing, schoolbuses pursuant to the Lower-Emission
School Bus Program adopted by the state board.
   (4) An accelerated vehicle retirement or repair program that is
adopted by the state board pursuant to authority granted hereafter by
the Legislature by statute.
   (5) The replacement of onboard natural gas fuel tanks on
schoolbuses owned by a school district that are 14 years or older,
not to exceed twenty thousand dollars ($20,000) per bus, pursuant to
the Lower-Emission School Bus Program adopted by the state board.
   (6) The enhancement of deteriorating natural gas fueling
dispensers of fueling infrastructure operated by a school district
with a one-time funding amount not to exceed five hundred dollars
($500) per dispenser, pursuant to the Lower-Emission School Bus
Program adopted by the state board.
   (c) The Department of Motor Vehicles may annually expend not more
than 1 percent of the fees collected pursuant to Section 44227 on
administrative costs.
   (d) A project funded by the program shall not be used for credit
under any state or federal emissions averaging, banking, or trading
program. An emission reduction generated by the program shall not be
used as marketable emission reduction credits or to offset any
emission reduction obligation of any person or entity. Projects
involving new engines that would otherwise generate marketable
credits under state or federal averaging, banking, and trading
programs shall include transfer of credits to the engine end user and
retirement of those credits toward reducing air emissions in order
to qualify for funding under the program. A purchase of a
low-emission vehicle or of equipment pursuant to a corporate or a
controlling board's policy, but not otherwise required by law, shall
generate surplus emissions reductions and may be funded by the
program.
   (e) This section shall remain in effect only until January 1,
2024, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2024, deletes or extends
that date.  
  SEC. 8.    Section 44229 of the Health and Safety
Code, as added by Section 4.5 of Chapter 707 of the Statutes of 2004,
is amended to read:
   44229.  (a) After deducting all administrative costs it incurs
through collection of fees pursuant to Section 44227, the Department
of Motor Vehicles shall distribute the revenues to districts which
shall use the fees to reduce air pollution from motor vehicles and to
carry out related planning, monitoring, enforcement, and technical
studies necessary for implementation of the California Clean Air Act
of 1988. Fees collected by the Department of Motor Vehicles pursuant
to this chapter shall be distributed to districts based upon the
amount of fees collected from motor vehicles registered within each
district.
   (b) The Department of Motor Vehicles may annually expend not more
than the following percentages of the fees collected pursuant to
Section 44227 on administrative costs:
   (1) During the first year after the operative date of this
chapter, not more than 5 percent of the fees collected may be used
for administrative costs.
   (2) During the second year after the operative date of this
chapter, not more than 3 percent of the fees collected may be used
for administrative costs.
   (3) During any year subsequent to the second year after the
operative date of this chapter, not more than 1 percent of the fees
collected may be used for administrative costs.
   (c) This section shall become operative on January 1, 2024.
 
  SEC. 9.    Section 44270.3 of the Health and
Safety Code is amended to read:
   44270.3.  For the purposes of this chapter, the following terms
have the following meanings:
   (a) "Benefit-cost score," for the Alternative and Renewable Fuel
and Vehicle Technology Program created pursuant to Section 44272,
means a project's expected or potential greenhouse gas emissions
reduction per dollar awarded by the commission to the project from
the Alternative and Renewable Fuel and Vehicle
                           Technology Fund.
   (b) "Commission" means the State Energy Resources Conservation and
Development Commission.
   (c) "Full fuel-cycle assessment" or "life-cycle assessment" means
evaluating and comparing the full environmental and health impacts of
each step in the life cycle of a fuel, including, but not limited
to, all of the following:
   (1) Feedstock production, extraction, cultivation, transport, and
storage, and the transportation and use of water and changes in land
use and land cover therein.
   (2) Fuel production, manufacture, distribution, marketing,
transport, and storage, and the transportation and use of water
therein.
   (3) Vehicle operation, including refueling, combustion,
conversion, permeation, and evaporation.
   (d) "Vehicle technology" means any vehicle, boat, off-road
equipment, or locomotive, or component thereof, including its engine,
propulsion system, transmission, or construction materials.
   (e) For purposes of the Air Quality Improvement Program created
pursuant to Section 44274, the following terms have the following
meanings:
   (1) "Benefit-cost score" means the reasonably expected or
potential criteria pollutant emission reductions achieved per dollar
awarded by the board for the project.
   (2) "Project" means a category of investments identified for
potential funding by the board, including, but not limited to,
competitive grants, revolving loans, loan guarantees, loans,
vouchers, rebates, and other appropriate funding measures for
specific vehicles, equipment, technologies, or initiatives authorized
by Section 44274.  
      
   SEC. 2.    Section 44125 of the   Health and
Safety Code   is amended to read: 
   44125.  (a) No later than July 1, 2009, the state board, in
consultation with the  Bureau of Automotive Repair (BAR)
  bureau  , shall adopt a program to commence on
January 1, 2010, that allows for the voluntary retirement of
passenger vehicles and light-duty and medium-duty trucks that are
high polluters. The program shall be administered by the  BAR
  bureau  pursuant to guidelines adopted by the
state board. 
   (b) No later than June 30, 2015, the state board, in consultation
with the bureau, shall update the program established pursuant to
subdivision (a). The program shall continue to be administered by the
bureau pursuant to guidelines updated and adopted by the state
board.  
   (b) 
    (c)  The guidelines shall ensure all of the following:
   (1) Vehicles retired pursuant to the program are permanently
removed from operation and retired at a dismantler under contract
with the  BAR   bureau  .
   (2) Districts retain their authority to administer vehicle
retirement programs otherwise authorized under law.
   (3) The program is available for high polluting passenger vehicles
and light-duty and medium-duty trucks that have been continuously
registered in California for two years prior to acceptance into the
program or otherwise proven to have been driven primarily in
California for the last two years and have not been registered in
another state or country in the last two years.  The guidelines
may require a vehicle to take, complete, or pass a smog check
inspection.   
   (4) The program is focused where the greatest air quality impact
can be identified.
   (5)  (A)    Compensation for retired vehicles
shall be  at least  one thousand five hundred dollars
($1,500) for a low-income motor vehicle owner, as defined in Section
44062.1, and  no more than  one thousand dollars ($1,000)
for all other motor vehicle owners.  The department may pay a
motor vehicle owner more than these amounts based on factors
including, but not limited to, the age of the vehicle, the emission
benefits of the vehicle's retirement, the emission impact of any
replacement vehicle, and the location of the vehicle in an area of
the state with the poorest air quality.  
   (B) Compensation for replacement vehicles for low-income motor
vehicle owners, as defined in Section 44062.1, shall be no less than
two thousand five hundred dollars ($2,500), and may be in addition to
compensation for vehicles retired pursuant to subparagraph (A).
 
   (C) Compensation for either retired or replacement vehicles for
low-income motor vehicle owners may be increased as necessary to
maximize the air quality benefits of the program while also ensuring
participation by low-income motor vehicle owners, as defined in
Section 44062.1. Increases in compensation amounts may be based on
factors, including, but not limited to, the age of the retired or
replaced vehicle, the emissions benefits of the retired or replaced
vehicle, the emissions impact of any replacement vehicle,
participation by low-income motor vehicle owners, as defined in
Section 44062.1, and the location of the vehicle in an area of the
state with the poorest air quality. 
   (6) Cost-effectiveness and impacts on disadvantaged and low-income
populations are considered.  Program eligibility may be limited
on the basis of income to ensure the program adequately serves
persons of low or moderate income.  
   (7) Provisions that coordinate the vehicle retirement and
replacement components of the program with the vehicle retirement
component of the bureau's Consumer Assistance Program, established
pursuant to other provisions of this chapter, to ensure vehicle
owners participate in the appropriate program to maximize emissions
reductions.  
   (8) Streamlined administration to simplify participation while
protecting the accountability of moneys spent.  
   (9) Specific steps to ensure the vehicle replacement component of
the program is available in areas designated as federal extreme
nonattainment.  
   (10) A requirement that vehicles eligible for retirement have
sufficient remaining life. Demonstration of sufficient remaining life
may include proof of current registration, passing a recent smog
check inspection, or passing another test similar to a smog check
inspection.  
   (d) When updating the guidelines to the program established
pursuant to subdivision (a), the state board shall study and consider
all the following elements:  
   (1) Methods of financial assistance other than vouchers. 

   (2) An option for automobile dealerships or other used car sellers
to accept cars for retirement, provided the cars are dismantled
consistent with the requirements of the program.  
   (3) An incentive structure with varied incentive amounts to
maximize program participation and cost-effective emissions
reductions.  
   (4) Increased emphasis on the replacement of high polluters with
cleaner vehicles or the increased use of public transit that results
in the increased utilization of the vehicle replacement component of
the program.  
   (5) Increased emphasis on the reduction of greenhouse gas
emissions through increased vehicle efficiency or transit use as a
result of the program.  
   (6) Increased partnerships and outreach with community-based
organizations. 
   SEC. 10.   SEC. 3.   Section 44271 of
the Health and Safety Code is amended to read:
   44271.  (a) This chapter creates the Alternative and Renewable
Fuel and Vehicle Technology Program, pursuant to Section 44272, to be
administered by the commission, and the Air Quality Improvement
Program, pursuant to Section 44274, to be administered by the state
board. The commission and the state board shall do all of the
following in fulfilling their responsibilities pursuant to their
respective programs:
   (1) Establish sustainability goals to ensure that alternative and
renewable fuel and vehicle deployment projects, on a full fuel-cycle
assessment basis, will not adversely impact natural resources,
especially state and federal lands.
   (2) Establish a competitive process for the allocation of funds
for projects funded pursuant to this chapter, which considers, among
other factors, the benefit-cost score, as defined in subdivision (a)
of Section 44270.3, associated with a project for the Alternative and
Renewable Fuel and Vehicle Technology Program or, as defined in
paragraph (1) of subdivision (e) of Section 44270.3, associated with
a project, as defined in paragraph (2) of subdivision (e) of Section
44270.3, for the Air Quality Improvement Program.
   (3) Identify additional federal and private funding opportunities
to augment or complement the programs created pursuant to this
chapter.
   (4) Ensure that the results of the reductions in emissions or
benefits can be measured and quantified.
   (5) Ensure that those revenues derived from fees imposed on motor
vehicles that are expended pursuant to this chapter, as amended by
Senate Bill 11 of the 2013-14 Regular Session of the Legislature, are
expended in compliance with Section 3 of Article XIX of the
California Constitution, as were the revenues derived from fees
imposed on motor vehicles pursuant to Assembly Bill 118 (Chapter 750
of the Statutes of 2007).
   (b) The state board, in consultation with the commission, shall
develop and adopt guidelines for both the Alternative and Renewable
Fuel and Vehicle Technology Program and the Air Quality Improvement
Program to ensure that programs meet both of the following
requirements:
   (1) Activities undertaken pursuant to the programs complement, and
do not interfere with, efforts to achieve and maintain federal and
state ambient air quality standards and to reduce toxic air
contaminant and greenhouse gas emissions.
   (2) Activities undertaken pursuant to the programs maintain or
improve upon emission reductions and air quality benefits in the
State Implementation Plan for Ozone, California Phase 2 Reformulated
Gasoline standards, and diesel fuel regulations.
   (c) For the purposes of both of the programs created by this
chapter, eligible projects do not include those required to be
undertaken pursuant to state or federal law, district rules or
regulations, memoranda of understanding with a governmental entity,
or legally binding agreements or documents. For the purposes of the
Alternative and Renewable Fuel and Vehicle Technology Program, the
state board shall advise the commission to ensure the requirements of
this subdivision are met. 
   (d) Any customer incentives for light-duty vehicles, including
rebates, shall not be greater than compensations given to consumers
pursuant to Section 44125.  
  SEC. 11.    Section 44272 of the Health and Safety
Code is amended to read:
   44272.  (a) The Alternative and Renewable Fuel and Vehicle
Technology Program is hereby created. The program shall be
administered by the commission. The commission shall implement the
program by regulation pursuant to the requirements of Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title 2 of
the Government Code. The program shall provide, upon appropriation
by the Legislature, competitive grants, revolving loans, loan
guarantees, loans, or other appropriate funding measures, to public
agencies, vehicle and technology entities, businesses and projects,
public-private partnerships, workforce training partnerships and
collaboratives, fleet owners, consumers, recreational boaters, and
academic institutions to develop and deploy innovative technologies
that transform California's fuel and vehicle types to help attain the
state's climate change policies. The emphasis of this program shall
be to develop and deploy technology and alternative and renewable
fuels in the marketplace, without adopting any one preferred fuel or
technology.
   (b) A project that receives more than seventy-five thousand
dollars ($75,000) in funds from the commission shall be approved at a
noticed public meeting of the commission and shall be consistent
with the priorities established by the investment plan adopted
pursuant to Section 44272.5. Under this article, the commission may
delegate to the commission's executive director, or his or her
designee, the authority to approve either of the following:
   (1) A contract, grant, loan, or other agreement or award that
receives seventy-five thousand dollars ($75,000) or less in funds
from the commission.
   (2) Amendments to a contract, grant, loan, or other agreement or
award as long as the amendments do not increase the amount of the
award, change the scope of the project, or modify the purpose of the
agreement.
   (c) The commission shall provide preferences to those projects
that maximize the goals of the Alternative and Renewable Fuel and
Vehicle Technology Program, based on the following criteria, as
applicable:
   (1) The project's ability to provide a measurable transition from
the nearly exclusive use of petroleum fuels to a diverse portfolio of
viable alternative fuels that meet petroleum reduction and
alternative fuel use goals.
   (2) The project's consistency with existing and future state
climate change policy and low-carbon fuel standards.
   (3) The project's ability to reduce criteria air pollutants and
air toxics and reduce or avoid multimedia environmental impacts.
   (4) The project's ability to decrease, on a life-cycle basis, the
discharge of water pollutants or any other substances known to damage
human health or the environment, in comparison to the production and
use of California Phase 2 Reformulated Gasoline or diesel fuel
produced and sold pursuant to California diesel fuel regulations set
forth in Article 2 (commencing with Section 2280) of Chapter 5 of
Division 3 of Title 13 of the California Code of Regulations.
   (5) The project does not adversely impact the sustainability of
the state's natural resources, especially state and federal lands.
   (6) The project provides nonstate matching funds. Costs incurred
from the date a proposed award is noticed may be counted as nonstate
matching funds. The commission may adopt further requirements for the
purposes of this paragraph. The commission is not liable for costs
incurred pursuant to this paragraph if the commission does not give
final approval for the project or the proposed recipient does not
meet requirements adopted by the commission pursuant to this
paragraph.
   (7) The project provides economic benefits for California by
promoting California-based technology firms, jobs, and businesses.
   (8) The project uses existing or proposed fueling infrastructure
to maximize the outcome of the project.
   (9) The project's ability to reduce on a life-cycle assessment
greenhouse gas emissions by at least 10 percent, and higher
percentages in the future, from current reformulated gasoline and
diesel fuel standards established by the state board.
   (10) The project's use of alternative fuel blends of at least 20
percent, and higher blend ratios in the future, with a preference for
projects with higher blends.
   (11) The project drives new technology advancement for vehicles,
vessels, engines, and other equipment, and promotes the deployment of
that technology in the marketplace.
   (d) The commission shall rank applications for projects proposed
for funding awards based on solicitation criteria developed in
accordance with subdivision (c), and shall give additional preference
to funding those projects with higher benefit-cost scores.
   (e) Only the following shall be eligible for funding:
   (1) Alternative and renewable fuel projects to develop and improve
alternative and renewable low-carbon fuels, including electricity,
ethanol, dimethyl ether, renewable diesel, natural gas, hydrogen, and
biomethane, among others, and their feedstocks that have high
potential for long-term or short-term commercialization, including
projects that lead to sustainable feedstocks.
   (2) Demonstration and deployment projects that optimize
alternative and renewable fuels for existing and developing engine
technologies.
   (3) Projects to produce alternative and renewable low-carbon fuels
in California.
   (4) Projects to decrease the overall impact of an alternative and
renewable fuel's life cycle carbon footprint and increase
sustainability.
   (5) Alternative and renewable fuel infrastructure, fueling
stations, and equipment. The preference in paragraph (10) of
subdivision (c) shall not apply to renewable diesel or biodiesel
infrastructure, fueling stations, and equipment used solely for
renewable diesel or biodiesel fuel.
   (6) Projects to develop and improve light-, medium-, and
heavy-duty vehicle technologies that provide for better fuel
efficiency and lower greenhouse gas emissions, alternative fuel usage
and storage, or emission reductions, including propulsion systems,
advanced internal combustion engines with a 40 percent or better
efficiency level over the current market standard, light-weight
materials, intelligent transportation systems, energy storage,
control systems and system integration, physical measurement and
metering systems and software, development of design standards and
testing and certification protocols, battery recycling and reuse,
engine and fuel optimization electronic and electrified components,
hybrid technology, plug-in hybrid technology, battery electric
vehicle technology, fuel cell technology, and conversions of hybrid
technology to plug-in technology through the installation of safety
certified supplemental battery modules.
   (7) Programs and projects that accelerate the commercialization of
vehicles and alternative and renewable fuels including buy-down
programs through near-market and market-path deployments, advanced
technology warranty or replacement insurance, development of market
niches, supply-chain development, and research related to the
pedestrian safety impacts of vehicle technologies and alternative and
renewable fuels.
   (8) Programs and projects to retrofit medium- and heavy-duty
onroad and nonroad vehicle fleets with technologies that create
higher fuel efficiencies, including alternative and renewable fuel
vehicles and technologies, idle management technology, and
aerodynamic retrofits that decrease fuel consumption.
   (9) Infrastructure projects that promote alternative and renewable
fuel infrastructure development connected with existing fleets,
public transit, and existing transportation corridors, including
physical measurement or metering equipment and truck stop
electrification.
   (10) Workforce training programs related to alternative and
renewable fuel feedstock production and extraction, renewable fuel
production, distribution, transport, and storage, high-performance
and low-emission vehicle technology and high tower electronics,
automotive computer systems, mass transit fleet conversion,
servicing, and maintenance, and other sectors or occupations related
to the purposes of this chapter.
   (11) Block grants or incentive programs administered by public
entities or not-for-profit technology entities for multiple projects,
education and program promotion within California, and development
of alternative and renewable fuel and vehicle technology centers. The
commission may adopt guidelines for implementing the block grant or
incentive program, which shall be approved at a noticed public
meeting of the commission.
   (12) Life cycle and multimedia analyses, sustainability and
environmental impact evaluations, and market, financial, and
technology assessments performed by a state agency to determine the
impacts of increasing the use of low-carbon transportation fuels and
technologies, and to assist in the preparation of the investment plan
and program implementation.
   (13) A program to provide funding for homeowners who purchase a
plug-in electric vehicle to offset costs associated with modifying
electrical sources to include a residential plug-in electric vehicle
charging station. In establishing this program, the commission shall
consider funding criteria to maximize the public benefit of the
program.
   (f) The commission may make a single source or sole source award
pursuant to this section for applied research. The same requirements
set forth in Section 25620.5 of the Public Resources Code shall apply
to awards made on a single source basis or a sole source basis. This
subdivision does not authorize the commission to make a single
source or sole source award for a project or activity other than for
applied research.
   (g) The commission may do all of the following:
   (1) Contract with the Treasurer to expend funds through programs
implemented by the Treasurer, if the expenditure is consistent with
all of the requirements of this article and Article 1 (commencing
with Section 44270).
   (2) Contract with small business financial development
corporations established by the Business, Transportation and Housing
Agency to expend funds through the Small Business Loan Guarantee
Program if the expenditure is consistent with all of the requirements
of this article and Article 1 (commencing with Section 44270).
   (3) Advance funds, pursuant to an agreement with the commission,
to any of the following:
   (A) A public entity.
   (B) A recipient to enable it to make advance payments to a public
entity that is a subrecipient of the funds and under a binding and
enforceable subagreement with the recipient.
   (C) An administrator of a block grant program.  
  SEC. 12.    Section 44273 of the Health and Safety
Code is amended to read:
   44273.  (a) The Alternative and Renewable Fuel and Vehicle
Technology Fund is hereby created in the State Treasury, to be
administered by the commission. The moneys in the fund, upon
appropriation by the Legislature, shall be expended by the commission
to implement the Alternative and Renewable Fuel and Vehicle
Technology Program in accordance with this chapter.
   (b) Notwithstanding any other provision of law, the sum of ten
million dollars ($10,000,000) shall be transferred annually from the
Public Interest Research, Development, and Demonstration Fund created
by Section 384 of the Public Utilities Code to the Alternative and
Renewable Fuel and Vehicle Technology Fund. Prior to the award of any
funds from this source, the commission shall make a determination
that the proposed project will provide benefits to electric or
natural gas ratepayers based upon the commission's adopted criteria.
   (c) Beginning with the integrated energy policy report adopted in
2011, and in the subsequent reports adopted thereafter, pursuant to
Section 25302 of the Public Resources Code, the commission shall
include an evaluation of research, development, and deployment
efforts funded by this chapter. The evaluation shall include all of
the following:
   (1) A list of projects funded by the Alternative and Renewable
Fuel and Vehicle Technology Fund.
   (2) The expected benefits of the projects in terms of air quality,
petroleum use reduction, greenhouse gas emissions reduction,
technology advancement, benefit-cost assessment, and progress towards
achieving these benefits.
   (3) The overall contribution of the funded projects toward
promoting a transition to a diverse portfolio of clean, alternative
transportation fuels and reduced petroleum dependency in California.
   (4) Key obstacles and challenges to meeting these goals identified
through funded projects.
   (5) Recommendations for future actions.  
  SEC. 13.    Section 44274 of the Health and Safety
Code is amended to read:
   44274.  (a) The Air Quality Improvement Program is hereby created.
The program shall be administered by the state board, in
consultation with the districts. The state board shall develop
guidelines to implement the program. Prior to the adoption of the
guidelines, the state board shall hold at least one public hearing.
In addition, the state board shall hold at least three public
workshops with at least one workshop in northern California, one in
the central valley, and one in southern California. The purpose of
the program shall be to fund, upon appropriation by the Legislature,
air quality improvement projects relating to fuel and vehicle
technologies. The primary purpose of the program shall be to fund
projects to reduce criteria air pollutants, improve air quality, and
provide funding for research to determine and improve the air quality
impacts of alternative transportation fuels and vehicles, vessels,
                                           and equipment
technologies.
   (b) The state board shall provide preference in awarding funding
to those projects with higher benefit-cost scores that maximize the
purposes and goals of the Air Quality Improvement Program. The state
board also may give additional preference based on the following
criteria, as applicable, in funding awards to projects:
   (1) Proposed or potential reduction of criteria or toxic air
pollutants.
   (2) Contribution to regional air quality improvement.
   (3) Ability to promote the use of clean alternative fuels and
vehicle technologies as determined by the state board, in
coordination with the commission.
   (4) Ability to achieve climate change benefits in addition to
criteria pollutant or air toxic emissions reductions.
   (5) Ability to support market transformation of California's
vehicle or equipment fleet to utilize low carbon or zero-emission
technologies.
   (6) Ability to leverage private capital investments.
   (c) The program shall be limited to competitive grants, revolving
loans, loan guarantees, loans, and other appropriate funding measures
that further the purposes of the program. Projects to be funded
shall include only the following:
   (1) Onroad and off-road equipment projects that are cost
effective.
   (2) Projects that provide mitigation for off-road gasoline exhaust
and evaporative emissions.
   (3) Projects that provide research to determine the air quality
impacts of alternative fuels and projects that study the life-cycle
impacts of alternative fuels and conventional fuels, the emissions of
biofuel and advanced reformulated gasoline blends, and air pollution
improvements and control technologies for use with alternative fuels
and vehicles.
   (4) Projects that augment the University of California's
agricultural experiment station and cooperative extension programs
for research to increase sustainable biofuels production and improve
the collection of biomass feedstock.
   (5) Incentives for small off-road equipment replacement to
encourage consumers to replace internal combustion engine lawn and
garden equipment.
   (6) Incentives for medium- and heavy-duty vehicles and equipment
mitigation, including all of the following:
   (A) Lower emission schoolbus programs.
   (B) Electric, hybrid, and plug-in hybrid onroad and off-road
medium- and heavy-duty equipment.
   (C) Regional air quality improvement and attainment programs
implemented by the state or districts in the most impacted regions of
the state.
   (7) Workforce training initiatives related to advanced energy
technology designed to reduce air pollution, including
state-of-the-art equipment and goods, and new processes and systems.
Workforce training initiatives funded shall be broad-based
partnerships that leverage other public and private job training
programs and resources. These partnerships may include, though are
not limited to, employers, labor unions, labor-management
partnerships, community organizations, workforce investment boards,
postsecondary education providers including community colleges, and
economic development agencies.
   (8) Incentives to identify and reduce emissions from high-emitting
light-duty vehicles.
   (d) (1) Beginning January 1, 2011, the state board shall submit to
the Legislature a biennial report to evaluate the implementation of
the Air Quality Improvement Program established pursuant to this
chapter.
   (2) The report shall include all of the following:
   (A) A list of projects funded by the Air Quality Improvement
Account.
   (B) The expected benefits of the projects in promoting clean,
alternative fuels and vehicle technologies.
   (C) Improvement in air quality and public health, greenhouse gas
emissions reductions, and the progress made toward achieving these
benefits.
   (D) The impact of the projects in making progress toward
attainment of state and federal air quality standards.
   (E) Recommendations for future actions.
   (3) The state board may include the information required to be
reported pursuant to paragraph (1) in an existing report to the
Legislature as the state board deems appropriate. 
   SEC. 14.   SEC. 4.   Section 44275 of
the Health and Safety Code, as amended by Section 5 of Chapter 707 of
the Statutes of 2004, is amended to read:
   44275.  (a) As used in this chapter, the following terms have the
following meanings:
   (1) "Advisory board" means the Carl Moyer Program Advisory Board
created by Section 44297.
   (2) "Btu" means British thermal unit.
   (3) "Commission" means the State Energy Resources Conservation and
Development Commission.
   (4) "Cost-effectiveness" means dollars provided to a project
pursuant to subdivision (d) of Section 44283 for each ton of covered
emission reduction attributed to a project or to the program as a
whole. In calculating cost-effectiveness, one-time grants of funds
made at the beginning of a project shall be annualized using a time
value of public funds or discount rate determined for each project by
the state board, taking into account the interest rate on bonds,
interest earned by state funds, and other factors as determined
appropriate by the state board. Cost-effectiveness shall be
calculated by dividing annualized costs by average annual emissions
reduction. The state board, in consultation with the districts and
concerned members of the public, shall establish appropriate
cost-effective limits for oxides of nitrogen, particulate matter, and
reactive organic gases and a reasonable system for comparing the
cost-effectiveness of proposed projects as described in subdivision
(a) of Section 44283.
   (5) "Covered emissions" include emissions of oxides of nitrogen,
particulate matter, and reactive organic gases from any covered
source.
   (6) "Covered engine" includes any internal combustion engine or
electric motor and drive powering a covered source.
   (7) "Covered source" includes onroad vehicles, off-road
nonrecreational equipment and vehicles, locomotives, diesel marine
vessels, agricultural sources of air pollution, as defined in Section
39011.5, and, as determined by the state board, other high-emitting
engine categories.
   (8) "Covered vehicle" includes any vehicle or piece of equipment
powered by a covered engine.
   (9) "District" means a county air pollution control district or an
air quality management district.
   (10) "Fund" means the Air Pollution Control Fund established
pursuant to Section 43015.
   (11) "Mobile Source Air Pollution Reduction Review Committee"
means the Mobile Source Air Pollution Reduction Review Committee
created by Section 44244.
   (12) "Incremental cost" means the cost of the project less a
baseline cost that would otherwise be incurred by the applicant in
the normal course of business. Incremental costs may include added
lease or fuel costs pursuant to Section 44283 as well as incremental
capital costs.
   (13) "New very low emission vehicle" means a heavy-duty vehicle
that qualifies as a very low emission vehicle when it is a new
vehicle, where new vehicle has the same meaning as defined in Section
430 of the Vehicle Code, or that is modified with the approval and
warranty of the original equipment manufacturer to qualify as a very
low emission vehicle within 12 months of delivery to an owner for
private or commercial use.
   (14) "NOx" means oxides of nitrogen.
   (15) "Program" means the Carl Moyer Memorial Air Quality Standards
Attainment Program created by subdivision (a) of Section 44280.
   (16) "Repower" means replacing an engine with a different engine.
The term repower, as used in this chapter, generally refers to
replacing an older, uncontrolled engine with a new,
emissions-certified engine, although replacing an older
emissions-certified engine with a newer engine certified to lower
emissions standards may be eligible for funding under this program.
   (17) "Retrofit" means making modifications to the engine and fuel
system such that the retrofitted engine does not have the same
specifications as the original engine.
   (18) "Very low emission vehicle" means a heavy-duty vehicle with
emissions significantly lower than otherwise applicable baseline
emission standards or uncontrolled emission levels pursuant to
Section 44282.
   (b) This section shall remain in effect only until January 1,
2024, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2024, deletes or extends
that date.
   SEC. 15.   SEC. 5.   Section 44275 of
the Health and Safety Code, as added by Section 5.5 of Chapter 707 of
the Statutes of 2004, is amended to read:
   44275.  (a) As used in this chapter, the following terms have the
following meanings:
   (1) "Advisory board" means the Carl Moyer Program Advisory Board
created by Section 44297.
   (2) "Btu" means British thermal unit.
   (3) "Commission" means the State Energy Resources Conservation and
Development Commission.
   (4) "Cost-effectiveness" means dollars provided to a project
pursuant to subdivision (d) of Section 44283 for each ton of NOx
reduction attributed to a project or to the program as a whole. In
calculating cost-effectiveness, one-time grants of funds made at the
beginning of a project shall be annualized using a time value of
public funds or discount rate determined for each project by the
state board, taking into account the interest rate on bonds, interest
earned by state funds, and other factors as determined appropriate
by the state board. Cost-effectiveness shall be calculated by
dividing annualized costs by average annual emissions reduction of
NOx in this state.
   (5) "Covered engine" includes any internal combustion engine or
electric motor and drive powering a covered source.
   (6) "Covered source" includes onroad vehicles of 14,000 pounds
gross vehicle weight rating (GVWR) or greater, off-road
nonrecreational equipment and vehicles, locomotives, diesel marine
vessels, stationary agricultural engines, and, as determined by the
state board, other high-emitting diesel engine categories.
   (7) "Covered vehicle" includes any vehicle or piece of equipment
powered by a covered engine.
   (8) "District" means a county air pollution control district or an
air quality management district.
   (9) "Fund" means the Air Pollution Control Fund established
pursuant to Section 43015.
   (10) "Mobile Source Air Pollution Reduction Review Committee"
means the Mobile Source Air Pollution Reduction Review Committee
created by Section 44244.
   (11) "Incremental cost" means the cost of the project less a
baseline cost that would otherwise be incurred by the applicant in
the normal course of business. Incremental costs may include added
lease or fuel costs pursuant to Section 44283 as well as incremental
capital costs.
   (12) "New very low emission vehicle" means a vehicle that
qualifies as a very low emission vehicle when it is a new vehicle,
where new vehicle has the same meaning as defined in Section 430 of
the Vehicle Code, or that is modified with the approval and warranty
of the original equipment manufacturer to qualify as a very low
emission vehicle within 12 months of delivery to an owner for private
or commercial use.
   (13) "NOx" means oxides of nitrogen.
   (14) "Program" means the Carl Moyer Memorial Air Quality Standards
Attainment Program created by subdivision (a) of Section 44280.
   (15) "Repower" means replacing an engine with a different engine.
The term repower, as used in this chapter, generally refers to
replacing an older, uncontrolled engine with a new,
emissions-certified engine, although replacing an older
emissions-certified engine with a newer engine certified to lower
emissions standards may be eligible for funding under this program.
   (16) "Retrofit" means making modifications to the engine and fuel
system such that the retrofitted engine does not have the same
specifications as the original engine.
   (17) "Very low emission vehicle" means a vehicle with emissions
significantly lower than otherwise applicable baseline emission
standards or uncontrolled emission levels pursuant to Section 44282.
   (b) This section shall become operative on January 1, 2024.
   SEC. 16.   SEC. 6.   Section 44280 of
the Health and Safety Code, as amended by Section 6 of Chapter 707 of
the Statutes of 2004, is amended to read:
   44280.  (a) There is hereby created the Carl Moyer Memorial Air
Quality Standards Attainment Program. The program shall be
administered by the state board in accordance with this chapter. The
administration of the program may be delegated to the districts.
   (b) The program shall provide grants to offset the incremental
cost of projects that reduce covered emissions from covered sources
in California. Eligibility for grant awards shall be determined by
the state board, in consultation with the districts, in accordance
with this chapter.
   (c) The program shall also provide funding for a fueling
infrastructure demonstration program and for technology development
efforts that are expected to result in commercially available
technologies in the near term that would improve the ability of the
program to achieve its goals. The infrastructure demonstration and
technology development portions of the program shall be managed by
the commission, in consultation with the state board.
   (d) This section shall remain in effect only until January 1,
2024, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2024, deletes or extends
that date.
   SEC. 17.   SEC. 7.   Section 44280 of
the Health and Safety Code, as added by Section 6.5 of Chapter 707 of
the Statutes of 2004, is amended to read:
   44280.  (a) There is hereby created the Carl Moyer Memorial Air
Quality Standards Attainment Program. The program shall be
administered by the state board in accordance with this chapter. The
administration of the program may be delegated to the districts.
   (b) The program shall provide grants to offset the incremental
cost of projects that reduce emissions of NOx from covered sources in
California. Eligibility for grant awards shall be determined by the
state board, in consultation with the districts, in accordance with
this chapter.
   (c) The program shall also provide funding for a fueling
infrastructure demonstration program and for technology development
efforts that are expected to result in commercially available
technologies in the near term that would improve the ability of the
program to achieve its goals. The infrastructure demonstration and
technology development portions of the program shall be managed by
the commission, in consultation with the state board.
   (d) This section shall become operative on January 1, 2024.
   SEC. 18.   SEC. 8.   Section 44281 of
the Health and Safety Code, as amended by Section 7 of Chapter 707 of
the Statutes of 2004, is amended to read:
   44281.  (a) Eligible projects include, but are not limited to, any
of the following:
   (1) Purchase of new very low or zero-emission covered vehicles or
covered heavy-duty engines.
   (2) Emission-reducing retrofit of covered engines, or replacement
of old engines powering covered sources with newer engines certified
to more stringent emissions standards than the engine being replaced,
or with electric motors or drives.
   (3) Purchase and use of emission-reducing add-on equipment that
has been verified by the state board for covered vehicles.
   (4) Development and demonstration of practical, low-emission
retrofit technologies, repower options, and advanced technologies for
covered engines and vehicles with very low emissions of NOx.
   (5) Light- and medium-duty vehicle projects in compliance with
guidelines adopted by the state board pursuant to Title 13 of the
California Code of Regulations.
   (b) No project shall be funded under this chapter after the
compliance date required by any local, state, or federal statute,
rule, regulation, memoranda of agreement or understanding, or other
legally binding document, except that an otherwise qualified project
may be funded even if the state implementation plan assumes that the
change in equipment, vehicles, or operations will occur, if the
change is not required by the compliance date of a statute,
regulation, or other legally binding document in effect as of the
date the grant is awarded. No project funded by the program shall be
used for credit under any state or federal emissions averaging,
banking, or trading program. No emission reduction generated by the
program shall be used as marketable emission reduction credits or to
offset any emission reduction obligation of any person or entity.
Projects involving new engines that would otherwise generate
marketable credits under state or federal averaging, banking, and
trading programs shall include transfer of credits to the engine end
user and retirement of those credits toward reducing air emissions in
order to qualify for funding under the program. A purchase of a
low-emission vehicle or of equipment pursuant to a corporate or a
controlling board's policy, but not otherwise required by law, shall
generate surplus emissions reductions and may be funded by the
program.
   (c) The program may also provide funding toward installation of
fueling or electrification infrastructure as provided in Section
44284.
   (d) Eligible applicants may be any individual, company, or public
agency that owns one or more covered vehicles that operate primarily
within California or otherwise contribute substantially to the NOx,
particulate matter (PM), or reactive organic gas (ROG) emissions
inventory in California.
   (e) It is the intent of the Legislature that all emission
reductions generated by this chapter shall contribute to public
health by reducing, for the life of the vehicle being funded, the
total amount of emissions in California.
   (f) This section shall remain in effect only until January 1,
2024, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2024, deletes or extends
that date.
   SEC. 19.   SEC. 9.   Section 44281 of
the Health and Safety Code, as added by Section 7.5 of Chapter 707 of
the Statutes of 2004, is amended to read:
   44281.  (a) Eligible projects are any of the following:
   (1) Purchase of new very low or zero-emission covered vehicles or
covered engines.
   (2) Emission-reducing retrofit of covered engines, or replacement
of old engines powering covered sources with newer engines certified
to more stringent emissions standards than the engine being replaced,
or with electric motors or drives.
   (3) Purchase and use of emission-reducing add-on equipment for
covered vehicles.
   (4) Development and demonstration of practical, low-emission
retrofit technologies, repower options, and advanced technologies for
covered engines and vehicles with very low emissions of NOx.
   (b) No new purchase, retrofit, repower, or add-on equipment shall
be funded under this chapter if it is required by any local, state,
or federal statute, rule, regulation, memoranda of agreement or
understanding, or other legally binding document, except that an
otherwise qualified project may be funded even if the state
implementation plan assumes that the change in equipment, vehicles,
or operations will occur, if the change is not required by a statute,
regulation, or other legally binding document in effect as of the
date the grant is awarded. No project funded by the program shall be
used for credit under any state or federal emissions averaging,
banking, or trading program. No emission reduction generated by the
program shall be used as marketable emission reduction credits or to
offset any emission reduction obligation of any entity. Projects
involving new engines that would otherwise generate marketable
credits under state or federal averaging, banking, and trading
programs shall include transfer of credits to the engine end user and
retirement of those credits toward reducing air emissions in order
to qualify for funding under the program. A purchase of a
low-emission vehicle or of equipment pursuant to a corporate or a
controlling board's policy, but not otherwise required by law, shall
generate surplus emissions reductions and may be funded by the
program.
   (c) The program may also provide funding toward installation of
fueling or electrification infrastructure as provided in Section
44284.
   (d) Eligible applicants may be any individual, company, or public
agency that owns one or more covered vehicles that operate primarily
within California or otherwise contribute substantially to the NOx
emissions inventory in California.
   (e) It is the intent of the Legislature that all emission
reductions generated by this chapter shall contribute to public
health by reducing, for the life of the vehicle being funded, the
total amount of emissions in California.
   (f) This section shall become operative on January 1, 2024.
   SEC. 20.   SEC. 10.   Section 44282 of
the Health and Safety Code, as amended by Section 8 of Chapter 707 of
the Statutes of 2004, is amended to read:
   44282.  The following criteria apply to all projects to be funded
through the program except for projects funded through the
infrastructure demonstration program:
   (a)  The state board may establish project criteria, including
minimum project life for source categories, in the guidelines
described in Section 44287. For previously unregulated source
categories, project criteria shall consider the timing of newly
established regulatory requirements.
   (b) To be eligible, projects shall meet the cost-effectiveness per
ton of covered emissions reduced requirements of Section 44283.
   (c) To be eligible, retrofits, repowers, and installation of
add-on equipment for covered vehicles shall be performed, or new
covered vehicles delivered to the end user, or covered vehicles
scrapped on or after the date the program is implemented.
   (d) Retrofit technologies, new engines, and new vehicles shall be
certified for sale or under experimental permit for operation in
California.
   (e) Repower projects that replace older, uncontrolled engines with
new, emissions-certified engines or that replace emissions-certified
engines with new engines certified to a more stringent NOx emissions
standard are approvable subject to the other applicable selection
criteria. The state board shall determine appropriate baseline
emission levels for the uncontrolled engines being replaced.
   (f) For heavy-duty-vehicle projects, retrofit and add-on equipment
projects shall document a NOx or PM emission reduction of at least
25 percent and no increase in other covered emissions compared to the
applicable baseline emissions accepted by the state board for that
engine year and application. The state board shall determine
appropriate baseline emission levels. Acceptable documentation shall
be defined by the state board. After study of available emission
reduction technologies and after public notice and comment, the state
board may revise the minimum percentage emission reduction criterion
for retrofits and add-on equipment provided for in this section to
improve the ability of the program to achieve its goals.
   (g) (1) For heavy-duty-vehicle projects involving the purchase of
new very low or zero-emission vehicles, engines shall be certified to
an optional low NOx emissions standard established by the state
board, except as provided for in paragraph (2).
   (2) For heavy-duty-vehicle projects involving the purchase of new
very low or zero-emission covered vehicles for which no optional low
NOx emission standards are available, documentation shall be provided
showing that the low or zero-emission engine emits not more than 70
percent of the NOx or NOx plus hydrocarbon emissions of a new engine
certified to the applicable baseline NOx or NOx plus hydrocarbon
emission standard for that engine and meets applicable particulate
standards. The state board shall specify the documentation required.
If no baseline emission standard exists for new vehicles in a
particular category, the state board shall determine an appropriate
baseline emission level for comparison.
   (h) For projects other than heavy-duty-vehicle projects, the state
board shall determine appropriate criteria under the provisions of
Section 44287.
   (i) This section shall remain in effect only until January 1,
2024, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2024, deletes or extends
that date.
   SEC. 21.   SEC. 11.   Section 44282 of
the Health and Safety Code, as added by Section 8.5 of Chapter 707 of
the Statutes of 2004, is amended to read:
   44282.  The following criteria apply to all projects to be funded
through the program except for projects funded through the
infrastructure demonstration program:
   (a) Except for projects involving marine vessels, 75 percent or
more of vehicle miles traveled or hours of operation shall be
projected to be in California for at least five years following the
grant award. Projects involving marine vessels and engines shall be
limited to those that spend enough time operating in California air
basins over the lifetime of the project to meet the
cost-effectiveness criteria based on NOx reductions in California, as
provided in Section 44283.
   (b) To be eligible, projects shall meet cost-effectiveness per ton
of NOx reduced requirements of Section 44283.
   (c) To be eligible, retrofits, repowers, and installation of
add-on equipment for covered vehicles shall be performed, or new
covered vehicles delivered to the end user, on or after the date the
program is implemented.
   (d) Retrofit technologies, new engines, and new vehicles shall be
certified for sale or under experimental permit for operation in
California.
   (e) Repower projects that replace older, uncontrolled engines with
new, emissions-certified engines or that replace emissions-certified
engines with new engines certified to a more stringent NOx emissions
standard are approvable subject to the other applicable selection
criteria. The state board shall determine appropriate baseline
emission levels for the uncontrolled engines being replaced.
                                 (f) Retrofit and add-on equipment
projects shall document a NOx emission reduction of at least 25
percent and no increase in particulate emissions compared to the
applicable baseline emissions accepted by the state board for that
engine year and application. The state board shall determine
appropriate baseline emission levels. Acceptable documentation shall
be defined by the state board. After study of available emission
reduction technologies and after public notice and comment, the state
board may revise the minimum percentage NOx reduction criterion for
retrofits and add-on equipment provided for in this section to
improve the ability of the program to achieve its goals.
   (g) (1) For projects involving the purchase of new very low or
zero-emission vehicles, engines shall be certified to an optional low
NOx emissions standard established by the state board, except as
provided for in paragraph (2).
   (2) For projects involving the purchase of new very low or
zero-emission covered vehicles for which no optional low NOx emission
standards are available, documentation shall be provided showing
that the low or zero-emission engine emits not more than 70 percent
of the NOx or NOx plus hydrocarbon emissions of a new engine
certified to the applicable baseline NOx or NOx plus hydrocarbon
emission standard for that engine and meets applicable particulate
standards. The state board shall specify the documentation required.
If no baseline emission standard exists for new vehicles in a
particular category, the state board shall determine an appropriate
baseline emission level for comparison.
   (h) This section shall become operative on January 1, 2024.
   SEC. 22.   SEC. 12.   Section 44283 of
the Health and Safety Code, as amended by Section 1 of Chapter 571 of
the Statutes of 2010, is amended to read:
   44283.  (a) Grants shall not be made for projects with a
cost-effectiveness, calculated in accordance with this section, of
more than thirteen thousand six hundred dollars ($13,600) per ton of
NOx reduced in California or a higher value that reflects state
consumer price index adjustments on or after January 1, 2006, as
determined by the state board. For projects obtaining reactive
organic gas and particulate matter reductions, the state board shall
determine appropriate adjustment factors to calculate a weighted
cost-effectiveness.
   (b) Only covered emission reductions occurring in this state shall
be included in the cost-effectiveness determination. The extent to
which emissions generated at sea contribute to air quality in
California nonattainment areas shall be incorporated into these
methodologies based on a reasonable assessment of currently available
information and modeling assumptions.
   (c) The state board shall develop protocols for calculating the
surplus covered emission reductions in California from representative
project types over the life of the project.
   (d) The cost of the covered emission reduction is the amount of
the grant from the program, including matching funds provided
pursuant to subdivision (e) of Section 44287, plus any other state
funds, or funds under the district's budget authority or fiduciary
control, provided toward the project, not including funds described
in paragraphs (1) and (2) of subdivision (a) of Section 44287.2. The
state board shall establish reasonable methodologies for evaluating
project cost-effectiveness, consistent with the definition contained
in paragraph (4) of subdivision (a) of Section 44275, and with
accepted methods, taking into account a fair and reasonable discount
rate or time value of public funds.
   (e) A grant shall not be made that, net of taxes, provides the
applicant with funds in excess of the incremental cost of the
project. Incremental lease costs may be capitalized according to
guidelines adopted by the state board so that these incremental costs
may be offset by a one-time grant award.
   (f) Funds under a district's budget authority or fiduciary control
may be used to pay for the incremental cost of liquid or gaseous
fuel, other than standard gasoline or diesel, which is integral to a
covered emission reducing technology that is part of a project
receiving grant funding under the program. The fuel shall be approved
for sale by the state board. The incremental fuel cost over the
expected lifetime of the vehicle may be offset by the district if the
project as a whole, including the incremental fuel cost, meets all
of the requirements of this chapter, including the maximum allowed
cost-effectiveness. The state board shall develop an appropriate
methodology for converting incremental fuel costs over the vehicle
lifetime into an initial cost for the purposes of determining project
cost-effectiveness. Incremental fuel costs shall not be included in
project costs for fuels dispensed from any facility that was funded,
in whole or in part, from the fund.
   (g) For purposes of determining any grant amount pursuant to this
chapter, the incremental cost of any new purchase, retrofit, repower,
or add-on equipment shall be reduced by the value of any current
financial incentive that directly reduces the project price,
including any tax credits or deductions, grants, or other public
financial assistance, not including funds described in paragraphs (1)
and (2) of subdivision (a) of Section 44287.2. Project proponents
applying for funding shall be required to state in their application
any other public financial assistance to the project.
   (h) For projects that would repower off-road equipment by
replacing uncontrolled diesel engines with new, certified diesel
engines, the state board may establish maximum grant award amounts
per repower. A repower project shall also be subject to the
incremental cost maximum pursuant to subdivision (e).
   (i) After study of available emission reduction technologies and
costs and after public notice and comment, the state board may reduce
the values of the maximum grant award criteria stated in this
section to improve the ability of the program to achieve its goals.
Every year the state board shall adjust the maximum
cost-effectiveness amount established in subdivision (a) and any
per-project maximum set by the state board pursuant to subdivision
(h) to account for inflation.
   (j) This section shall remain in effect only until January 1,
2024, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2024, deletes or extends
that date.
   SEC. 23.   SEC. 13.   Section 44283 of
the Health and Safety Code, as amended by Section 2 of Chapter 571 of
the Statutes of 2010, is amended to read:
   44283.  (a) Grants shall not be made for projects with a
cost-effectiveness, calculated in accordance with this section, of
more than twelve thousand dollars ($12,000) per ton of NOx reduced in
California or a higher value that reflects state consumer price
index adjustments on or after January 1, 2024, as determined by the
state board.
   (b) Only NOx reductions occurring in this state shall be included
in the cost-effectiveness determination. The extent to which
emissions generated at sea contribute to air quality in California
nonattainment areas shall be incorporated into these methodologies
based on a reasonable assessment of currently available information
and modeling assumptions.
   (c) The state board shall develop protocols for calculating the
surplus NOx reductions in California from representative project
types over the life of the project.
   (d) The cost of the NOx reduction is the amount of the grant from
the program, including matching funds provided pursuant to
subdivision (e) of Section 44287, plus any other state funds, or
funds under the district's budget authority or fiduciary control,
provided toward the project, not including funds described in
paragraphs (1) and (2) of subdivision (a) of Section 44287.2. The
state board shall establish reasonable methodologies for evaluating
project cost-effectiveness, consistent with the definition contained
in paragraph (4) of subdivision (a) of Section 44275, and with
accepted methods, taking into account a fair and reasonable discount
rate or time value of public funds.
   (e) A grant shall not be made that, net of taxes, provides the
applicant with funds in excess of the incremental cost of the
project. Incremental lease costs may be capitalized according to
guidelines adopted by the state board so that these incremental costs
may be offset by a one-time grant award.
   (f) Funds under a district's budget authority or fiduciary control
may be used to pay for the incremental cost of liquid or gaseous
fuel, other than standard gasoline or diesel, which is integral to a
NOx reducing technology that is part of a project receiving grant
funding under the program. The fuel shall be approved for sale by the
state board. The incremental fuel cost over the expected lifetime of
the vehicle may be offset by the district if the project as a whole,
including the incremental fuel cost, meets all of the requirements
of this chapter, including the maximum allowed cost-effectiveness.
The state board shall develop an appropriate methodology for
converting incremental fuel costs over the vehicle lifetime into an
initial cost for the purposes of determining project
cost-effectiveness. Incremental fuel costs shall not be included in
project costs for fuels dispensed from any facility that was funded,
in whole or in part, from the fund.
   (g) For purposes of determining any grant amount pursuant to this
chapter, the incremental cost of any new purchase, retrofit, repower,
or add-on equipment shall be reduced by the value of any current
financial incentive that directly reduces the project price,
including any tax credits or deductions, grants, or other public
financial assistance, not including funds described in paragraphs (1)
and (2) of subdivision (a) of Section 44287.2. Project proponents
applying for funding shall be required to state in their application
any other public financial assistance to the project.
   (h) For projects that would repower off-road equipment by
replacing uncontrolled diesel engines with new, certified diesel
engines, the state board may establish maximum grant award amounts
per repower. A repower project shall also be subject to the
incremental cost maximum pursuant to subdivision (e).
   (i) After study of available emission reduction technologies and
costs and after public notice and comment, the state board may reduce
the values of the maximum grant award criteria stated in this
section to improve the ability of the program to achieve its goals.
Every year the state board shall adjust the maximum
cost-effectiveness amount established in subdivision (a) and any
per-project maximum set by the state board pursuant to subdivision
(h) to account for inflation.
   (j) This section shall become operative on January 1, 2024.
   SEC. 24.   SEC. 14.   Section 44287 of
the Health and Safety Code, as amended by Section 10 of Chapter 707
of the Statutes of 2004, is amended to read:
   44287.  (a) The state board shall establish or update grant
criteria and guidelines consistent with this chapter for covered
vehicle projects as soon as practicable, but not later than January
1, 2006. The adoption of guidelines is exempt from the rulemaking
provisions of the Administrative Procedure Act, Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title 2 of
the Government Code. The state board shall solicit input and comment
from the districts during the development of the criteria and
guidelines and shall make every effort to develop criteria and
guidelines that are compatible with existing district programs that
are also consistent with this chapter. Guidelines shall include
protocols to calculate project cost-effectiveness. The grant criteria
and guidelines shall include safeguards to ensure that the project
generates surplus emissions reductions. Guidelines shall enable and
encourage districts to cofund projects that provide emissions
reductions in more than one district. The state board shall make
draft criteria and guidelines available to the public 45 days before
final adoption, and shall hold at least one public meeting to
consider public comments before final adoption. The state board may
develop separate guidelines and criteria for the different types of
eligible projects described in subdivision (a) of Section 44281.
   (b) The state board, in consultation with the participating
districts, may propose revisions to the criteria and guidelines
established pursuant to subdivision (a) as necessary to improve the
ability of the program to achieve its goals. A proposed revision
shall be made available to the public 45 days before final adoption
of the revision and the state board shall hold at least one public
meeting to consider public comments before final adoption of the
revision.
   (c) The state board shall reserve funds for, and disburse funds
to, districts from the fund for administration pursuant to this
section and Section 44299.1.
   (d) The state board shall develop guidelines for a district to
follow in applying for the reservation of funds, in accordance with
this chapter. It is the intent of the Legislature that district
administration of any reserved funds be in accordance with the
project selection criteria specified in Sections 44281, 44282, and
44283 and all other provisions of this chapter. The guidelines shall
be established and published by the state board as soon as
practicable, but not later than January 1, 2006.
   (e) Funds shall be reserved by the state board for administration
by a district that adopts an eligible program pursuant to this
chapter and offers matching funds at a ratio of one dollar ($1) of
matching funds committed by the district or the Mobile Source Air
Pollution Reduction Review Committee for every two dollars ($2)
committed from the fund. Funds available to the Mobile Source Air
Pollution Reduction Review Committee may be counted as matching funds
for projects in the South Coast Air Basin only if the committee
approves the use of these funds for matching purposes. Matching funds
may be any funds under the district's budget authority that are
committed to be expended in accordance with the program. Funds
committed by a port authority or a local government, in cooperation
with a district, to be expended in accordance with the program may
also be counted as district matching funds. Matching funds provided
by a port authority or a local government may not exceed 30 percent
of the total required matching funds in any district that applies for
more than three hundred thousand dollars ($300,000) of the state
board funds. Only a district, or a port authority or a local
government teamed with a district, may provide matching funds.
   (f) The state board may adjust the ratio of matching funds
described in subdivision (e), if it determines that an adjustment is
necessary in order to maximize the use of, or the air quality
benefits provided by, the program, based on a consideration of the
financial resources of the district.
   (g) Notwithstanding subdivision (e), a district need not provide
matching funds for state board funds allocated to the district for
program outreach activities pursuant to paragraph (4) of subdivision
(a) of Section 44299.1.
   (h) A district may include within its matching funds a reasonable
estimate of direct or in-kind costs for assistance in providing
program outreach and application evaluation. In-kind and direct
matching funds shall not exceed 15 percent of the total matching
funds offered by a district. A district may also include within its
matching funds any money spent on or after February 25, 1999, that
would have qualified as matching funds but were not previously
claimed as matching funds.
   (i) A district desiring a reservation of funds shall apply to the
state board following the application guidelines established pursuant
to this section. The state board shall approve or disapprove a
district application not later than 60 days after receipt. Upon
approval of any district application, the state board shall
simultaneously approve a reservation of funding for that district to
administer. Reserved funds shall be disbursed to the district so that
funding of a district-approved project is not impeded.
   (j) Notwithstanding any other provision of this chapter, districts
and the Mobile Source Air Pollution Reduction Review Committee shall
not use funds collected pursuant to Section 41081 or Chapter 7
(commencing with Section 44220), or pursuant to Section 9250.11 of
the Vehicle Code, as matching funds to fund a project with stationary
or portable engines, locomotives, or marine vessels.
   (k) Any funds reserved for a district pursuant to this section are
available to the district for a period of not more than two years
from the time of reservation. Funds not expended by June 30 of the
second calendar year following the date of the reservation shall
revert back to the state board as of that June 30, and shall be
deposited in the fund for use by the program. The funds may then be
redirected based on applications to the fund. Regardless of any
reversion of funds back to the state board, the district may continue
to request other reservations of funds for local administration.
Each reservation of funds shall be accounted for separately, and
unused funds from each application shall revert back to the state
board as specified in this subdivision.
   (  l  ) The state board shall specify a date each year
when district applications are due. If the eligible applications
received in any year oversubscribe the available funds, the state
board shall reserve funds on an allocation basis, pursuant to Section
44299.2. The state board may accept a district application after the
due date for a period of months specified by the state board. Funds
may be reserved in response to those applications, in accordance with
this chapter, out of funds remaining after the original reservation
of funds for the year.
   (m) Guidelines for a district application shall require
information from an applicant district to the extent necessary to
meet the requirements of this chapter, but shall otherwise minimize
the information required of a district.
   (n) A district application shall be reviewed by the state board
immediately upon receipt. If the state board determines that an
application is incomplete, the applicant shall be notified within 10
working days with an explanation of what is missing from the
application. A completed application fulfilling the criteria shall be
approved as soon as practicable, but not later than 60 working days
after receipt.
   (o) The commission, in consultation with the districts, shall
establish project approval criteria and guidelines for infrastructure
projects consistent with Section 44284 as soon as practicable, but
not later than February 15, 2000. The commission shall make draft
criteria and guidelines available to the public 45 days before final
adoption, and shall hold at least one public meeting to consider
public comments before final adoption.
   (p) The commission, in consultation with the participating
districts, may propose revisions to the criteria and guidelines
established pursuant to subdivision (o) as necessary to improve the
ability of the program to achieve its goals. A revision may be
proposed at any time, or may be proposed in response to a finding
made in the annual report on the program published by the state board
pursuant to Section 44295. A proposed revision shall be made
available to the public 45 days before final adoption of the revision
and the commission shall hold at least one public meeting to
consider public comments before final adoption of the revision.
   (q) Unclaimed funds will be allocated by the state board in
accordance with Section 44299.2.
   (r) This section shall remain in effect only until January 1,
2024, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2024, deletes or extends
that date.
   SEC. 25.   SEC. 15.   Section 44287 of
the Health and Safety Code, as added by Section 10.5 of Chapter 707
of the Statutes of 2004, is amended to read:
   44287.  (a) The state board shall establish grant criteria and
guidelines consistent with this chapter for covered vehicle projects
as soon as practicable, but not later than January 1, 2000. The
adoption of guidelines is exempt from the rulemaking provisions of
the Administrative Procedure Act, Chapter 3.5 (commencing with
Section 11340) of Part 1 of Division 3 of Title 2 of the Government
Code. The state board shall solicit input and comment from the
districts during the development of the criteria and guidelines and
shall make every effort to develop criteria and guidelines that are
compatible with existing district programs that are also consistent
with this chapter. Guidelines shall include protocols to calculate
project cost-effectiveness. The grant criteria and guidelines shall
include safeguards to ensure that the project generates surplus
emissions reductions. Guidelines shall enable and encourage districts
to cofund projects that provide emissions reductions in more than
one district. The state board shall make draft criteria and
guidelines available to the public 45 days before final adoption, and
shall hold at least one public meeting to consider public comments
before final adoption.
   (b) The state board, in consultation with the participating
districts, may propose revisions to the criteria and guidelines
established pursuant to subdivision (a) as necessary to improve the
ability of the program to achieve its goals. A proposed revision
shall be made available to the public 45 days before final adoption
of the revision and the state board shall hold at least one public
meeting to consider public comments before final adoption of the
revision.
   (c) The state board shall reserve funds for, and disburse funds
to, districts from the fund for administration pursuant to this
section and Section 44299.1.
   (d) The state board shall develop guidelines for a district to
follow in applying for the reservation of funds, in accordance with
this chapter. It is the intent of the Legislature that district
administration of any reserved funds be in accordance with the
project selection criteria specified in Sections 44281, 44282, and
44283 and all other provisions of this chapter. The guidelines shall
be established and published by the state board as soon as
practicable, but not later than January 1, 2000.
   (e) Funds shall be reserved by the state board for administration
by a district that adopts an eligible program pursuant to this
chapter and offers matching funds at a ratio of one dollar ($1) of
matching funds committed by the district or the Mobile Source Air
Pollution Reduction Review Committee for every two dollars ($2)
committed from the fund. Funds available to the Mobile Source Air
Pollution Reduction Review Committee may be counted as matching funds
for projects in the South Coast Air Basin only if the committee
approves the use of these funds for matching purposes. Matching funds
may be any funds under the district's budget authority that are
committed to be expended in accordance with the program. Funds
committed by a port authority or a local government, in cooperation
with a district, to be expended in accordance with the program may
also be counted as district matching funds. Matching funds provided
by a port authority or a local government may not exceed 30 percent
of the total required matching funds in any district that applies for
more than three hundred thousand dollars ($300,000) of the state
board funds. Only a district, or a port authority or a local
government teamed with a district, may provide matching funds.
   (f) The state board may adjust the ratio of matching funds
described in subdivision (e), if it determines that an adjustment is
necessary in order to maximize the use of, or the air quality
benefits provided by, the program, based on a consideration of the
financial resources of the district.
   (g) Notwithstanding subdivision (e), a district need not provide
matching funds for state board funds allocated to the district for
program outreach activities pursuant to paragraph (4) of subdivision
(a) of Section 44299.1.
   (h) A district may include within its matching funds a reasonable
estimate of direct or in-kind costs for assistance in providing
program outreach and application evaluation. In-kind and direct
matching funds shall not exceed 15 percent of the total matching
funds offered by a district. A district may also include within its
matching funds any money spent on or after February 25, 1999, that
would have qualified as matching funds but were not previously
claimed as matching funds.
   (i) A district desiring a reservation of funds shall apply to the
state board following the application guidelines established pursuant
to this section. The state board shall approve or disapprove a
district application not later than 60 days after receipt. Upon
approval of any district application, the state board shall
simultaneously approve a reservation of funding for that district to
administer. Reserved funds shall be disbursed to the district so that
funding of a district-approved project is not impeded.
   (j) Notwithstanding any other provision of this chapter, districts
and the Mobile Source Air Pollution Reduction Review Committee shall
not use funds collected pursuant to Section 41081 or Chapter 7
(commencing with Section 44220), or pursuant to Section 9250.11 of
the Vehicle Code, as matching funds to fund a project with stationary
or portable engines, locomotives, or marine vessels.
   (k) Any funds reserved for a district pursuant to this section are
available to the district for a period of not more than two years
from the time of reservation. Funds not expended by June 30 of the
second calendar year following the date of the reservation shall
revert back to the state board as of that June 30, and shall be
deposited in the fund for use by the program. The funds may then be
redirected based on applications to the fund. Regardless of any
reversion of funds back to the state board, the district may continue
to request other reservations of funds for local administration.
Each reservation of funds shall be accounted for separately, and
unused funds from each application shall revert back to the state
board as specified in this subdivision.
   (  l  ) The state board shall specify a date each year
when district applications are due. If the eligible applications
received in any year oversubscribe the available funds, the state
board shall reserve funds on an allocation basis, pursuant to
subdivision (b) of Section 44299.1. The state board may accept a
district application
after the due date for a period of months specified by the state
board. Funds may be reserved in response to those applications, in
accordance with this chapter, out of funds remaining after the
original reservation of funds for the year.
   (m) Guidelines for a district application shall require
information from an applicant district to the extent necessary to
meet the requirements of this chapter, but shall otherwise minimize
the information required of a district.
   (n) A district application shall be reviewed by the state board
immediately upon receipt. If the state board determines that an
application is incomplete, the applicant shall be notified within 10
working days with an explanation of what is missing from the
application. A completed application fulfilling the criteria shall be
approved as soon as practicable, but not later than 60 working days
after receipt.
   (o) The state board, in consultation with the districts, shall
establish project approval criteria and guidelines for infrastructure
projects consistent with Section 44284 as soon as practicable, but
not later than February 15, 2000. The commission shall make draft
criteria and guidelines available to the public 45 days before final
adoption, and shall hold at least one public meeting to consider
public comments before final adoption.
   (p) The state board, in consultation with the participating
districts, may propose revisions to the criteria and guidelines
established pursuant to subdivision (o) as necessary to improve the
ability of the program to achieve its goals. A revision may be
proposed at any time, or may be proposed in response to a finding
made in the annual report on the program published by the state board
pursuant to Section 44295. A proposed revision shall be made
available to the public 45 days before final adoption of the revision
and the commission shall hold at least one public meeting to
consider public comments before final adoption of the revision.
   (q) This section shall become operative on January 1, 2024.
   SEC. 26.   SEC. 16.   Section 44299 of
the Health and Safety Code is repealed.
   SEC. 27.   SEC. 17.   Section 44299.1 of
the Health and Safety Code, as amended by Section 3 of Chapter 627
of the Statutes of 2006, is amended to read:
   44299.1.  (a) To ensure that emission reductions are obtained as
needed from pollution sources, any moneys deposited in the fund for
use by the program or appropriated to the program shall be segregated
and administered as follows:
   (1) Not more than 2 percent of the moneys in the fund for use by
the program shall be allocated to program support and outreach costs
incurred by the state board and the commission directly associated
with implementing the program pursuant to this chapter. These funds
shall be allocated to the state board and the commission in
proportion to total program funds administered by the state board and
the commission.
   (2) Not more than 2 percent of the moneys in the fund for use by
the program shall be allocated to direct program outreach activities.
The state board may use these funds for program outreach contracts
or may allocate outreach funds to participating districts in
proportion to each district's allocation from the program moneys in
the fund. The state board shall report on the use of outreach funds
in their reports to the Legislature pursuant to Section 44295.
   (3) The balance shall be deposited in the fund to be expended to
offset added costs of new very low or zero-emission vehicle
technologies, and emission reducing repowers, retrofits, and add-on
equipment for covered vehicles and engines, and other projects
specified in Section 44281.
   (b) Moneys in the fund shall be allocated to a district that
submits an eligible application to the state board pursuant to
Section 44287. The state board shall determine the maximum amount of
annual funding from the fund for use by the program that each
district may receive. This determination shall be based on the
population in each district as well as the relative importance of
obtaining covered emission reductions in each district, specifically
through the program.
   (c) Not more than 5 percent of the moneys allocated pursuant to
this chapter to a district with a population of one million or more
may be used by the district for indirect costs of implementation of
the program, including outreach costs that are subject to the
limitation in paragraph (2) of subdivision (a).
   (d) Not more than 10 percent of the moneys allocated pursuant to
this chapter to a district with a population of less than one million
may be used by the district for indirect costs of implementation of
the program, including outreach costs that are subject to the
limitation in paragraph (2) of subdivision (a).
   (e) This section shall remain in effect only until January 1,
2024, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2024, deletes or extends
that date.
   SEC. 28.   SEC. 18.   Section 44299.1 of
the Health and Safety Code, as added by Section 11.5 of Chapter 707
of the Statutes of 2004, is amended to read:
   44299.1.  (a) To ensure that emission reductions are obtained as
needed from pollution sources, any moneys deposited in the fund for
use by the program or appropriated to the program shall be segregated
and administered as follows:
   (1) Ten percent, not to exceed two million dollars ($2,000,000),
shall be allocated to the infrastructure demonstration project to be
used pursuant to Section 44284.
   (2) Ten percent shall be deposited in the fund for use by the
program to be used to support research, development, demonstration,
and commercialization of advanced low-emission technologies for
covered sources that show promise of contributing to the goals of the
program.
   (3) Not more than 2 percent of the moneys in the fund for use by
the program shall be allocated to program support and outreach costs
incurred by the state board and the commission directly associated
with implementing the program pursuant to this chapter. These funds
shall be allocated to the state board and the commission in
proportion to total program funds administered by the state board and
the commission.
   (4) Not more than 2 percent of the moneys in the fund for use by
the program shall be allocated to direct program outreach activities.
The state board may use these funds for program outreach contracts
or may allocate outreach funds to participating districts in
proportion to each district's allocation from the fund for use by the
program. The state board shall report on the use of outreach funds
in their reports to the Legislature pursuant to Section 44295.
   (5) The balance shall be deposited in the fund for use by the
program to be expended to offset added costs of new very low or
zero-emission vehicle technologies, and emission reducing repowers,
retrofits, and add-on equipment for covered vehicles and engines.
   (b) Moneys in the fund for use by the program shall be allocated
to a district that submits an eligible application to the state board
pursuant to Section 44287. The state board shall determine the
maximum amount of annual funding from the fund for use by the program
that each district may receive. This determination shall be based on
the population in each district as well as the relative importance
of obtaining NOx reductions in each district, specifically through
the program.
   (c) This section shall become operative on January 1, 2024.
   SEC. 29.   SEC. 19.   Section 44299.2 of
the Health and Safety Code is amended to read:
   44299.2.  Funds shall be allocated to districts, and shall be
subject to administrative terms and conditions as follows:
   (a) Available funds shall be distributed to districts taking into
consideration the population of the area, the severity of the air
quality problems experienced by the population, and the historical
allocation of the program funds, except that the south coast district
shall be allocated a percentage of the total funds available to
districts that is proportional to the percentage of the total state
population residing within the jurisdictional boundaries of that
district. For the purposes of this subdivision, population shall be
determined by the state board based on the most recent data provided
by the Department of Finance. The allocation to the south coast
district shall be subtracted from the total funds available to
districts. Each district, except the south coast district, shall be
awarded a minimum allocation of two hundred thousand dollars
($200,000), and the remainder, which shall be known as the
"allocation amount," shall be allocated to all districts as follows:
   (1) The state board shall distribute 35 percent of the allocation
amount to the districts in proportion to the percentage of the total
residual state population that resides within each district's
boundaries. For purposes of this paragraph, "total residual state
population" means the total state population, less the total
population that resides within the south coast district.
   (2) The state board shall distribute 35 percent of the allocation
amount to the districts in proportion to the severity of the air
quality problems to which each district's population is exposed. The
severity of the exposure shall be calculated as follows:
   (A) Each district shall be awarded severity points based on the
district's attainment designation and classification, as most
recently promulgated by the federal Environmental Protection Agency
for the National Ambient Air Quality Standard for ozone averaged over
eight hours, as follows:
   (i) A district that is designated attainment for the federal
eight-hour ozone standard shall be awarded one point.
   (ii) A district that is designated nonattainment for the federal
eight-hour ozone standard shall be awarded severity points based on
classification. Two points shall be awarded for transitional, basic,
or marginal classifications, three points for moderate
classification, four points for serious classification, five points
for severe classification, six points for severe-17 classification,
and seven points for extreme classification.
   (B) Each district shall be awarded severity points based on the
annual diesel particulate emissions in the air basin, as determined
by the state board. One point shall be awarded to the district, in
increments, for each 1,000 tons of diesel particulate emissions. In
making this determination, 0 to 999 tons shall be awarded no points,
1,000 to 1,999 tons shall be awarded one point, 2,000 to 2,999 tons
shall be awarded two points, and so forth. If a district encompasses
more than one air basin, the air basin with the greatest diesel
particulate emissions shall be used to determine the points awarded
to the district. The San Diego County Air Pollution Control District
and the Imperial County Air Pollution Control District shall be
awarded one additional point each to account for annual diesel
particulate emissions transported from Mexico.
   (C) The points awarded under subparagraphs (A) and (B), shall be
added together for each district, and the total shall be multiplied
by the population residing within the district boundaries, to yield
the local air quality exposure index.
   (D) The local air quality exposure index for each district shall
be summed together to yield a total state exposure index. Funds shall
be allocated under this paragraph to each district in proportion to
its local air quality exposure index divided by the total state
exposure index.
   (3) The state board shall distribute 30 percent of the allocation
amount to the districts in proportion to the allocation of funds from
the program moneys in the fund, as follows:
   (A) Because each district is awarded a minimum allocation pursuant
to subdivision (a), there shall be no additional minimum allocation
from the program historical allocation funds. The total amount
allocated in this way shall be subtracted from total funding
previously awarded to the district under the program, and the
remainder, which shall be known as directed funds, shall be allocated
pursuant to subparagraph (B).
   (B) Each district with a population that is greater than or equal
to 1 percent of the state's population shall receive an additional
allocation based on the population of the district and the district's
relative share of emission reduction commitments in the state
implementation plan to attain the National Ambient Air Quality
Standard for ozone averaged over one hour. This additional allocation
shall be calculated as a percentage share of the directed funds for
each district, derived using a ratio of each district's share amount
to the base amount, which shall be calculated as follows:
   (i) The base amount shall be the total program funds allocated by
the state board to the districts in the 2002-03 fiscal year, less the
total of the funds allocated through the minimum allocation to each
district in the 2002-03 fiscal year.
   (ii) The share amount shall be the allocation that each district
received in the 2002-03 fiscal year, not including the minimum
allocation. There shall be one share amount for each district.
   (iii) The percentage share shall be calculated for each district
by dividing the district's share amount by the base amount, and
multiplying the result by the total directed funds available under
this subparagraph.
   (b) Funds shall be distributed as expeditiously as reasonably
practicable, and a report of the distribution shall be made available
to the public.
   (c) All funds allocated pursuant to this section shall be expended
as provided in the guidelines adopted pursuant to Section 44287
within two years from the date of allocation. Funds not expended
within the two years shall be returned to the program moneys in the
fund within 60 days and shall be subject to further allocation as
follows:
   (1) Within 30 days of the deadline to return funds, the state
board shall notify the districts of the total amount of returned
funds available for reallocation, and shall list those districts that
request supplemental funds from the reallocation and that are able
to expend those funds within one year.
   (2) Within 90 days of the deadline to return funds, the state
board shall allocate the returned funds to the districts listed
pursuant to paragraph (1).
   (3) All supplemental funds distributed under this subdivision
shall be expended consistent with the program within one year of the
date of supplemental allocation. Funds not expended within one year
shall be returned to the program moneys in the fund and shall be
distributed at the discretion of the state board to districts, taking
into consideration each district's ability to expeditiously utilize
the remaining funds consistent with the program.
   (d) This section shall remain in effect only until January 1,
2024, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2024, deletes or extends
that date. 
  SEC. 30.    Section 42885 of the Public Resources
Code, as amended by Section 55 of Chapter 77 of the Statutes of 2006,
is amended to read:
   42885.  (a) For purposes of this section, "California tire fee"
means the fee imposed pursuant to this section.
   (b) (1) A person who purchases a new tire, as defined in
subdivision (g), shall pay a California tire fee of one dollar and
seventy-five cents ($1.75) per tire.
   (2) The retail seller shall charge the retail purchaser the amount
of the California tire fee as a charge that is separate from, and
not included in, any other fee, charge, or other amount paid by the
retail purchaser.
   (3) The retail seller shall collect the California tire fee from
the retail purchaser at the time of sale and may retain 11/2 percent
of the fee as reimbursement for any costs associated with the
collection of the fee. The retail seller shall remit the remainder to
the state on a quarterly schedule for deposit in the California Tire
Recycling Management Fund, which is hereby created in the State
Treasury.
   (c) The department, or its agent authorized pursuant to Section
42882, shall be reimbursed for its costs of collection, auditing, and
making refunds associated with the California Tire Recycling
Management Fund, but not to exceed 3 percent of the total annual
revenue deposited in the fund.
   (d) The California tire fee imposed pursuant to subdivision (b)
shall be separately stated by the retail seller on the invoice given
to the customer at the time of sale. Any other disposal or
transaction fee charged by the retail seller related to the tire
purchase shall be identified separately from the California tire fee.

   (e) A person or business who knowingly, or with reckless
disregard, makes a false statement or representation in a document
used to comply with this section is liable for a civil penalty for
each violation or, for continuing violations, for each day that the
violation continues. Liability under this section may be imposed in a
civil action and shall not exceed twenty-five thousand dollars
($25,000) for each violation.
   (f) In addition to the civil penalty that may be imposed pursuant
to subdivision (e), the department may impose an administrative
penalty in an amount not to exceed five thousand dollars ($5,000) for
each violation of a separate provision or, for continuing
violations, for each day that the violation continues, on a person
who intentionally or negligently violates a permit, rule, regulation,
standard, or requirement issued or adopted pursuant to this chapter.
The department shall adopt regulations that specify the amount of
the administrative penalty and the procedure for imposing an
administrative penalty pursuant to this subdivision.
   (g) For purposes of this section, "new tire" means a pneumatic or
solid tire intended for use with onroad or off-road motor vehicles,
motorized equipment, construction equipment, or farm equipment that
is sold separately from the motorized equipment, or a new tire sold
with a new or used motor vehicle, as defined in Section 42803.5,
including the spare tire, construction equipment, or farm equipment.
"New tire" does not include retreaded, reused, or recycled tires.
   (h) The California tire fee shall not be imposed on a tire sold
with, or sold separately for use on, any of the following:
   (1) A self-propelled wheelchair.
   (2) A motorized tricycle or motorized quadricycle, as defined in
Section 407 of the Vehicle Code.
   (3) A vehicle that is similar to a motorized tricycle or motorized
quadricycle and is designed to be operated by a person who, by
reason of the person's physical disability, is otherwise unable to
move about as a pedestrian.
   (i) This section shall remain in effect only until January 1,
2024, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2024, deletes or extends
that date.  
  SEC. 31.    Section 42885 of the Public Resources
Code, as added by Section 13.5 of Chapter 707 of the Statutes of
2004, is amended to read:
   42885.  (a) For purposes of this section, "California tire fee"
means the fee imposed pursuant to this section.
   (b) (1) Every person who purchases a new tire, as defined in
subdivision (g), shall pay a California tire fee of seventy-five
cents ($0.75) per tire.
   (2) The retail seller shall charge the retail purchaser the amount
of the California tire fee as a charge that is separate from, and
not included in, any other fee, charge, or other amount paid by the
retail purchaser.
   (3) The retail seller shall collect the California tire fee from
the retail purchaser at the time of sale and may retain 3 percent of
the fee as reimbursement for any costs associated with the collection
of the fee. The retail seller shall remit the remainder to the state
on a quarterly schedule for deposit in the California Tire Recycling
Management Fund, which is hereby created in the State Treasury.
   (c) The department, or its agent authorized pursuant to Section
42882, shall be reimbursed for its costs of collection, auditing, and
making refunds associated with the California Tire Recycling
Management Fund, but not to exceed 3 percent of the total annual
revenue deposited in the fund.
   (d) The California tire fee imposed pursuant to subdivision (b)
shall be separately stated by the retail seller on the invoice given
to the customer at the time of sale. Any other disposal or
transaction fee charged by the retail seller related to the tire
purchase shall be identified separately from the California tire fee.

   (e) Any person or business who knowingly, or with reckless
disregard, makes any false statement or representation in any
document used to comply with this section is liable for a civil
penalty for each violation or, for continuing violations, for each
day that the violation continues. Liability under this section may be
imposed in a civil action and shall not exceed twenty-five thousand
dollars ($25,000) for each violation.
   (f) In addition to the civil penalty that may be imposed pursuant
to subdivision (e), the department may impose an administrative
penalty in an amount not to exceed five thousand dollars ($5,000) for
each violation of a separate provision or, for continuing
violations, for each day that the violation continues, on any person
who intentionally or negligently violates any permit, rule,
regulation, standard, or requirement issued or adopted pursuant to
this chapter. The department shall adopt regulations that specify the
amount of the administrative penalty and the procedure for imposing
an administrative penalty pursuant to this subdivision.
   (g) For purposes of this section, "new tire" means a pneumatic or
solid tire intended for use with onroad or off-road motor vehicles,
motorized equipment, construction equipment, or farm equipment that
is sold separately from the motorized equipment, or a new tire sold
with a new or used motor vehicle, as defined in Section 42803.5,
including the spare tire, construction equipment, or farm equipment.
"New tire" does not include retreaded, reused, or recycled tires.
   (h) The California tire fee may not be imposed on any tire sold
with, or sold separately for use on, any of the following:
   (1) Any self-propelled wheelchair.
   (2) Any motorized tricycle or motorized quadricycle, as defined in
Section 407 of the Vehicle Code.
   (3) Any vehicle that is similar to a motorized tricycle or
motorized quadricycle and is designed to be operated by a person who,
by reason of the person's physical disability, is otherwise unable
to move about as a pedestrian.
   (i) This section shall become operative on January 1, 2024.
 
  SEC. 32.    Section 42889 of the Public Resources
Code, as amended by Section 3 of Chapter 333 of the Statutes of 2009,
is amended to read:
   42889.  (a) Of the moneys collected pursuant to Section 42885, an
amount equal to seventy-five cents ($0.75) per tire on which the fee
is imposed shall be transferred by the State Board of Equalization to
the Air Pollution Control Fund. The state board shall expend those
moneys, or allocate those moneys to the districts for expenditure, to
fund programs and projects that mitigate or remediate air pollution
caused by tires in the state, to the extent that the state board or
the applicable district determines that the program or project
remediates air pollution harms created by tires upon which the fee
described in Section 42885 is imposed.
   (b) The remaining moneys collected pursuant to Section 42885 shall
be used to fund the waste tire program, and shall be appropriated to
the department in the annual Budget Act in a manner consistent with
the five-year plan adopted and updated by the department. These
moneys shall be expended for the payment of refunds under this
chapter and for the following purposes:
   (1) To pay the administrative overhead cost of this chapter, not
to exceed 6 percent of the total revenue deposited in the fund
annually, or an amount otherwise specified in the annual Budget Act.
   (2) To pay the costs of administration associated with collection,
making refunds, and auditing revenues in the fund, not to exceed 3
percent of the total revenue deposited in the fund, as provided in
subdivision (c) of Section 42885.
   (3) To pay the costs associated with operating the tire recycling
program specified in Article 3 (commencing with Section 42870).
   (4) To pay the costs associated with the development and
enforcement of regulations relating to the storage of waste tires and
used tires. The department shall consider designating a city,
county, or city and county as the enforcement authority of
regulations relating to the storage of waste tires and used tires, as
provided in subdivision (c) of Section 42850, and regulations
relating to the hauling of waste and used tires, as provided in
subdivision (b) of Section 42963. If the department designates a
local entity for that purpose, the department shall provide
sufficient, stable, and noncompetitive funding to that entity for
that purpose, based on available resources, as provided in the
five-year plan adopted and
   updated as provided in subdivision (a) of Section 42885.5. The
department may consider and create, as appropriate, financial
incentives for citizens who report the illegal hauling or disposal of
waste tires as a means of enhancing local and statewide waste tire
and used tire enforcement programs.
   (5) To pay the costs of cleanup, abatement, removal, or other
remedial action related to waste tire stockpiles throughout the
state, including all approved costs incurred by other public agencies
involved in these activities by contract with the department. Not
less than six million five hundred thousand dollars ($6,500,000)
shall be expended by the department during each of the following
fiscal years for this purpose: 2001-02 to 2006-07, inclusive.
   (6) To make studies and conduct research directed at promoting and
developing alternatives to the landfill disposal of waste tires.
   (7) To assist in developing markets and new technologies for used
tires and waste tires. The department's expenditure of funds for
purposes of this subdivision shall reflect the priorities for waste
management practices specified in subdivision (a) of Section 40051.
   (8) To pay the costs associated with implementing and operating a
waste tire and used tire hauler program and manifest system pursuant
to Chapter 19 (commencing with Section 42950).
   (9) To pay the costs to create and maintain an emergency reserve,
which shall not exceed one million dollars ($1,000,000).
   (10) To pay the costs of cleanup, abatement, or other remedial
action related to the disposal of waste tires in implementing and
operating the Farm and Ranch Solid Waste Cleanup and Abatement Grant
Program established pursuant to Chapter 2.5 (commencing with Section
48100) of Part 7.
   (11) To fund border region activities specified in paragraph (8)
of subdivision (b) of Section 42885.5.
   (c) This section shall remain in effect only until January 1,
2024, and as of that date is repealed, unless a later enacted statute
that is enacted before January 1, 2024, deletes or extends that
date.  
  SEC. 33.    Section 42889 of the Public Resources
Code, as amended by Section 4 of Chapter 333 of the Statutes of 2009,
is amended to read:
   42889.  Funding for the waste tire program shall be appropriated
to the department in the annual Budget Act. The moneys in the fund
shall be expended for the payment of refunds under this chapter and
for the following purposes:
   (a) To pay the administrative overhead cost of this chapter, not
to exceed 5 percent of the total revenue deposited in the fund
annually, or an amount otherwise specified in the annual Budget Act.
   (b) To pay the costs of administration associated with collection,
making refunds, and auditing revenues in the fund, not to exceed 3
percent of the total revenue deposited in the fund, as provided in
subdivision (b) of Section 42885.
   (c) To pay the costs associated with operating the tire recycling
program specified in Article 3 (commencing with Section 42870).
   (d) To pay the costs associated with the development and
enforcement of regulations relating to the storage of waste tires and
used tires. The department shall consider designating a city,
county, or city and county as the enforcement authority of
regulations relating to the storage of waste tires and used tires, as
provided in subdivision (c) of Section 42850, and regulations
relating to the hauling of waste and used tires, as provided in
subdivision (b) of Section 42963. If the department designates a
local entity for that purpose, the department shall provide
sufficient, stable, and noncompetitive funding to that entity for
that purpose, based on available resources, as provided in the
five-year plan adopted and updated as provided in subdivision (a) of
Section 42885.5. The department may consider and create, as
appropriate, financial incentives for citizens who report the illegal
hauling or disposal of waste tires as a means of enhancing local and
statewide waste tire and used tire enforcement programs.
   (e) To pay the costs of cleanup, abatement, removal, or other
remedial action related to waste tire stockpiles throughout the
state, including all approved costs incurred by other public agencies
involved in these activities by contract with the department. Not
less than six million five hundred thousand dollars ($6,500,000)
shall be expended by the department during each of the following
fiscal years for this purpose: 2001-02 to 2006-07, inclusive.
   (f) To fund border region activities specified in paragraph (8) of
subdivision (b) of Section 42885.5.
   (g) This section shall become operative on January 1, 2024.

   SEC. 34.   SEC. 20.   Section 9250.1 of
the Vehicle Code is amended to read:
   9250.1.  (a) Beginning July 1, 2008, the fee described in Section
9250 shall be increased by three dollars ($3).
   (b) Two dollars ($2) of the increase shall be deposited into the
Alternative and Renewable Fuel and Vehicle Technology Fund created by
Section 44273 of the Health and Safety Code, and one dollar ($1)
shall be deposited into the Enhanced Fleet Modernization Subaccount
created by Section 44126 of the Health and Safety Code.
   (c) This section shall remain in effect only until January 1,
2024, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2024, deletes or extends
that date. 
  SEC. 35.    Section 9250.2 of the Vehicle Code, as
amended by Section 15 of Chapter 707 of the Statutes of 2004, is
amended to read:
   9250.2.  (a) The department, if requested by the Sacramento
Metropolitan Air Quality Management District pursuant to Section
41081 of the Health and Safety Code, shall impose and collect a
surcharge on the registration fees for every motor vehicle registered
in that district, not to exceed the amount of six dollars ($6), as
specified by the governing body of that district.
   (b) This section shall remain in effect only until January 1,
2024, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2024, deletes or extends
that date.  
  SEC. 36.    Section 9250.2 of the Vehicle Code, as
added by Section 15.5 of Chapter 707 of the Statutes of 2004, is
amended to read:
   9250.2.  (a) The department, if requested by the Sacramento
Metropolitan Air Quality Management District pursuant to Section
41081 of the Health and Safety Code, shall impose and collect a
surcharge on the registration fees for every motor vehicle registered
in that district, not to exceed four dollars ($4).
   (b) This section shall become operative on January 1, 2024.

   SEC. 37.   SEC. 21.   Section 9261.1 of
the Vehicle Code is amended to read:
   9261.1.  (a) Beginning July 1, 2008, the fee described in Section
9261, as adjusted pursuant to Section 1678, shall be increased by
five dollars ($5).
   (b) Two dollars and fifty cents ($2.50) of the increase shall be
deposited into the Alternative and Renewable Fuel and Vehicle
Technology Fund created by Section 44273 of the Health and Safety
Code, and two dollars and fifty cents ($2.50) shall be deposited into
the Air Quality Improvement Fund created by Section 44274.5 of the
Health and Safety Code.
   (c) This section shall remain in effect only until January 1,
2024, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2024, deletes or extends
that date.
   SEC. 38.   SEC. 22.   Section 9853.6 of
the Vehicle Code is amended to read:
   9853.6.  (a) (1) Beginning July 1, 2008, the fee described in
paragraph (1) of subdivision (b) of Section 9853 shall be increased
by ten dollars ($10).
   (2) Five dollars ($5) of the increase shall be deposited into the
Alternative and Renewable Fuel and Vehicle Technology Fund created by
Section 44273 of the Health and Safety Code and five dollars ($5)
shall be deposited into the Air Quality Improvement Fund created by
Section 44274.5 of the Health and Safety Code.
   (b) (1) Beginning July 1, 2008, the fee described in paragraph (2)
of subdivision (b) of Section 9853 shall be increased by twenty
dollars ($20).
   (2) Ten dollars ($10) of the increase shall be deposited into the
Alternative and Renewable Fuel and Vehicle Technology Fund created by
Section 44273 of the Health and Safety Code and ten dollars ($10)
shall be deposited into the Air Quality Improvement Fund created by
Section 44274.5 of the Health and Safety Code.
   (c) This section shall remain in effect only until January 1,
2024, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2024, deletes or extends
that date.
   SEC. 23.    This act shall not become operative
unless Assembly Bill 8 of the 2013-14 Regular Session is enacted.

   SEC. 39.   SEC. 24.   This act is an
urgency statute necessary for the immediate preservation of the
public peace, health, or safety within the meaning of Article IV of
the Constitution and shall go into immediate effect. The facts
constituting the necessity are:
   To ensure stable funding for programs to reduce air pollution for
the protection of the public health and safety, it is necessary for
this measure to take effect immediately.