Amended in Senate March 28, 2016

Senate Bill No. 1425

Introduced by Senator Pavley

February 19, 2016

An act to begin delete amend Section 44272 of the Health and Safety Code, relating to vehicular air pollution. end delete begin insert add Section 39732 to the Health and Safety Code, relating to greenhouse gases. end insert

LEGISLATIVE COUNSEL’S DIGEST

SB 1425, as amended, Pavley. begin delete Alternative and Renewable Fuel and Vehicle Technology Program. end delete begin insert Water-energy nexus registry. end insert

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The California Global Warming Solutions Act of 2006 designates the State Air Resources Board as the state agency charged with monitoring and regulations sources of emissions of greenhouse gases.

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Existing law, until 2008, established the former California Climate Action Registry to carry out specified actions, including, among others, helping various entities in the state to establish emissions baselines, encourage voluntary actions to increase energy efficiency and reduce greenhouse gas emissions, and recognize, publicize, and promote participants in the registry.

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This bill would require the state board, in consultation with relevant state agencies and a specified nonprofit organization, to develop a registry of greenhouse gas emissions resulting from the water-energy nexus using the best available data, as specified, including the above-stated actions of the former California Climate Action Registry as those relate to the water-energy nexus.

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Existing law establishes the California Alternative and Renewable Fuel, Vehicle Technology, Clean Air, and Carbon Reduction Act of 2007, which includes the Alternative and Renewable Fuel and Vehicle Technology Program, administered by the State Energy Resources Conservation and Development Commission. Existing law requires the emphasis of the Alternative and Renewable Fuel and Vehicle Technology Program to be to develop and deploy technology and alternative and renewable fuels in the marketplace, without adopting any one preferred fuel or technology.

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This bill would make a technical, nonsubstantive change to that provision.

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Vote: majority. Appropriation: no. Fiscal committee:  begin delete no end delete begin insert yes end insert . State-mandated local program: no.

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

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begin insert SECTION 1. end insert   

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The Legislature finds and declares all of the
following:

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(a) Water and energy resources are inextricably connected.
This relationship is known as the water-energy nexus.

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(b) The energy used to drive the state’s water system accounts
for nearly 20 percent of the total electricity usage and 30 percent
of nonpower-related natural gas consumed and includes, among
other things, the fuels used to power groundwater pumps,
transportation, and treatment and disposal systems for water and
wastewater; the heating and cooling of water in buildings and
other facilities; the delivery of water; and end uses. There are
known gaps in quantifying greenhouse gas emissions associated
with that energy usage.

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(c) The water used to drive the state’s energy system represents
a substantial portion of our state water demand and includes,
among other things, the water used to turn turbines for
hydropower, to produce steam and cooling systems for
thermoelectric power, and to extract and refine oil and gas,

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(d) Consequently, saving water saves energy and vice versa.

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(e) Because the production of energy often results in the
emission of greenhouse gases, there is substantial potential for
emissions reductions in the water system.

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(f) While energy usage has historically been a fundamental
element in the planning and development of the state’s water supply
systems, there are new opportunities for improving this linkage to
reduce water-related greenhouse gas emissions. New projects that
best serve water and energy investments can maximize greenhouse
gas emissions reductions.

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(g) It is the intent of the Legislature, in enacting this act, to do
both of the following:

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(1) More closely integrate the planning for water, energy, and
greenhouse gas emissions reductions.

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(2) Recognize innovative projects and programs that reduce
the carbon intensity of our water system.

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begin insert SEC. 2. end insert   

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begin insert Section 39732 is added to the end insert begin insert Health and Safety Code end insert begin insert ,
to read: end insert

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begin insert 39732. end insert   

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

(1) “The Climate Registry” means the nonprofit organization
that is a successor to the California Climate Action Registry
(former Chapter 6 (commencing with Section 42800) of Part 4, as
added by Section 1 of Chapter 1018 of the Statutes of 2000).

(2) “Registry” means the water-energy nexus registry
established pursuant to this section.

(b) (1) The State Air Resources Board, in consultation with
other relevant state agencies and The Climate Registry, shall
develop and administer a registry of greenhouse gas emissions
resulting from the water-energy nexus using the best available
data.

(2) Participation in the registry shall be voluntary and open to
any entity conducting business in the state. A participating entity
may register its emissions, including emissions generated outside
of the state, on an entitywide basis and may utilize the services of
the registry.

(c) In administering the registry, the State Air Resources Board
shall do all of the following:

(1) Help participating entities in the state to establish emissions
baselines.

(2) Encourage voluntary actions to increase water and energy
efficiency measures to reduce the carbon intensity of the state’s
water system.

(3) Enable participating entities to record voluntary entitywide
greenhouse gas emissions reductions made after 1990 in a
consistent format that is supported by third-party verification.

(4) Ensure that sources in the state receive appropriate
consideration for entity-level verified emissions reductions under
potential future regulatory regimes or qualification for financing
opportunities relating to greenhouse gas emissions.

(5) Recognize, publicize, and promote participating entities
making voluntary reductions of greenhouse gas emissions.

(6) Recruit broad participation in the registry from all economic
sectors and regions of the state.

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SECTION 1.  

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,
lightweight 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 Governor’s Office of Business and
Economic Development 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.

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