BILL NUMBER: SB 1455	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  AUGUST 24, 2012
	AMENDED IN SENATE  MAY 29, 2012
	AMENDED IN SENATE  MAY 29, 2012
	AMENDED IN SENATE  APRIL 25, 2012
	AMENDED IN SENATE  APRIL 9, 2012

INTRODUCED BY   Senator Kehoe
   (Principal  coauthor:   Assembly Member
  Skinner   coauthors:  
Assembly Members   Perea   and Skinner  )

                        FEBRUARY 24, 2012

   An act to  amend Sections 41081, 44060.5, 44225, 44229, 44275,
44280, 44281, 44282, 44283, 44287, 44299.1, and 44299.2 of, and to
 add Sections  43018.9,  43867.5  ,  and
43867.6 to  ,  the Health and Safety Code,   to amend
Sections 42885 and 42889 of the Public Resources Code, and to amend
Sections 9250.1, 9250.2, 9261.1, and 9853.6 of the Vehicle Code,
  relating to vehicular air pollution.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 1455, as amended, Kehoe. Alternative  fuels. 
 and vehicle technologies: funding programs.  
    Existing  
   (1) Existing law establishes the Alternative and Renewable Fuel
and Vehicle Technology Program, administered by the State Energy
Resources Conservation and Development Commission (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 require the commission to develop and adopt an
investment plan to determine priorities and opportunities for the
program.  
   This bill would prohibit the State Air Resources Board (state
board) from submitting, until a specified date, to the Office of
Administrative Law specified amendments to the state board's clean
fuels outlet regulation. The bill would require the state board to
aggregate and make available to the public, no later than January 1,
2014, and every two years thereafter, the number of vehicles that
automobile manufacturers project to be sold or leased, as reported to
the state board. The bill would require the commission to allocate
$20 million each fiscal year, as specified, and up to $20 million
each fiscal year thereafter, as specified, for purposes of
constructing and operating a hydrogen fueling network sufficient to
provide convenient fueling to vehicle owners, and expand that network
as necessary to support a growing market for vehicles requiring
hydrogen fuel, until there are at least 100 publicly available
hydrogen fueling stations. The bill, on or before December 31, 2015,
and annually thereafter, would require the state board and the
commission to jointly review and report on the progress toward
establishing a hydrogen fueling network that provides the coverage
and capacity to fuel vehicles requiring hydrogen fuel that are being
placed into operation in the state, as specified. The bill would
authorize the commission to design loan incentive programs, revolving
loan programs, and other forms of financial assistance, as
specified, for purposes of assisting in the implementation of these
provisions. The bill, no later than July 1, 2013, would require the
state board to convene working groups to evaluate the specified
policies and goals of specified programs. 
    (2)     Existing  law requires the
State Energy Resources Conservation and Development Commission 
(commission)  , in partnership with the State Air Resources
Board  (state board)  , to develop and adopt a state plan to
increase the use of alternative transportation fuels.
   This bill would require the commission and the state board, among
other things, to coordinate efforts to measure the progress of
alternative fuels use. The bill would require the commission and the
state board, on or before November 1, 2014, to update a specified
economic analysis. The bill would require the commission and the
state board to evaluate how the use of new and existing investment
programs could be used to increase the state alternative
transportation fuels use, and evaluate how the impact of federal fuel
policies and existing state policies will help increase the use of
alternative transportation fuels in the state. The bill would require
the commission and the state board, on or before November 1, 2015,
and every 2 years thereafter, to report in the integrated energy
policy report, as specified, the status of the  state's
  state  alternative transportation fuels use, as
specified, and make specified evaluations. The bill would require the
state board to include a finding on the effect of proposed
regulations on state alternative transportation fuels use. 
   (3) Existing law, until January 1, 2016, establishes vehicle
registration fees of $34, vessel registration fees of $20 and of $40,
as applicable, and specified service fees for identification plates
of $20. Existing law requires a portion of that revenue generated by
those fees to be deposited in the Alternative and Renewable Fuel and
Vehicle Technology Fund, the Air Quality Improvement Fund, and the
Enhanced Fleet Modernization Subaccount, as provided.  
   Existing law, until January 1, 2016, imposes smog abatement fees
of $20, and requires a specified amount of those fees 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, 2023, at which time
the fees would be reduced by those amounts.  
   (4) Existing law establishes the Carl Moyer Memorial Air Quality
Standards Attainment Program (Carl Moyer 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 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 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
December 31, 2023, with the limit returning to $4 beginning on that
date.  
   Existing law authorizes each air pollution control and air quality
management district that has been designated a state nonattainment
area by the state board for any motor vehicle air pollutant, except
the Sacramento district, to levy a surcharge on the registration fees
for every motor vehicle registered in that district, as specified by
the governing body of the district. Existing law requires the
Department of Motor Vehicles to collect that surcharge if requested
by a district, and requires the department, after deducting its
administrative costs, to distribute the revenues to the districts.
Existing law, until January 1, 2015, raises the limit on the amount
of that surcharge 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
December 31, 2023, with the limit returning to $4 beginning on that
date.  
   (5) Existing law imposes a California tire fee amount 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, until January 1, 2015, raises the limit on the
tire fee to $1.75 and requires that 75¢ per tire on which the fee is
imposed, be deposited in the Air Pollution Control Fund for use by
the state board and districts for specified purposes. Beginning
January 1, 2015, existing law returns the tire fee limit to 75¢.
 
   This bill would extend the $1.50 limitation on the tire fee until
December 31, 2023, with the limit returning to 75¢ on that date.
 
   (6) This bill would include a change in state statute that would
result in a taxpayer paying a higher tax within the meaning of
Section 3 of Article XIII A of the California Constitution, and thus
would require for passage the approval of 2/3 of the membership of
each house of the Legislature. 
   Vote:  majority   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 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, 2015   December 31, 2023  , and as of
that date is repealed, unless a later enacted statute, that is
enacted before  January 1, 2015   December 31,
2023  , deletes or extends that date.
   SEC. 2.    Section 41081 of   the  
Health and Safety Code   , as added by 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 two dollars ($2) for each motor
vehicle whose registration expires on or after December 31, 1989,
and prior to December 31, 1990. For each motor vehicle whose
registration expires on or after December 31, 1990, 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,
2015   December 31, 2023  .
   SEC. 3.    Section 43018.9 is added to the  
Health and Safety Code   , to read:  
   43018.9.  (a) For purposes of this section, the following terms
have the following meanings:
   (1) "Commission" means the State Energy Resources Conservation and
Development Commission.
   (2) "Publicly available hydrogen fueling station" means the
equipment used to store and dispense hydrogen fuel to vehicles
according to industry codes and standards that is open to the public.

   (b) (1) The state board shall not submit to the Office of
Administrative Law that portion of the amendments to the clean fuels
outlet regulation considered by the state board on January 26, 2012,
that require, or have the effect of requiring, any person construct,
operate, or provide funding for the construction or operation of a
publicly available hydrogen fueling station at any retail outlet or
establishment. 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 any person construct, operate, or provide
funding for the construction or operation of any publicly available
hydrogen fueling station.
   (2) This subdivision shall remain in effect only until December
31, 2023.
   (c) The state board shall aggregate and make available to the
public no later than January 1, 2014, and every two years thereafter,
the number of vehicles that automobile manufacturers project to be
sold or leased, as reported to the state board pursuant to Title 13,
California Code of Regulations, Section 2303(a).
   (d) (1) The commission shall allocate twenty million dollars
($20,000,000) each fiscal year, beginning July 1, 2013, through June
30, 2016, inclusive, and up to twenty million dollars ($20,000,000)
each fiscal year thereafter, not to exceed 20 percent of moneys
appropriated by the Legislature from the Alternative and Renewable
Fuel and Vehicle Technology Fund, established pursuant to Section
44273, for purposes of constructing and operating a hydrogen fueling
network sufficient to provide convenient fueling to vehicle owners,
and expand that network as necessary to support a growing market for
vehicles requiring hydrogen fuel, until there are at least 100
publicly available hydrogen fueling stations. The commission's
expenditures shall not exceed 20 percent of the moneys appropriated
annually by the Legislature from the Alternative and Renewable Fuel
and Vehicle Technology Fund.
   (2) Based on the results of the review set forth in paragraph (4),
the commission may defer allocating the moneys set forth in
paragraph (1) as needed to keep the number of fueling stations
matched to the fueling needs of the vehicles.
   (3) 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.
   (4) On or before December 31, 2015, and annually thereafter, the
state board and the commission 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 state board
and the commission shall consider the plans of automobile
manufacturers to increase the number of vehicles requiring hydrogen
fuel, 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 fueling stations and whether public
funding remains necessary to achieve this goal.
   (e) 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
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.
   (f) 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.
   (g) Notwithstanding any law, the state board, no later than July
1, 2013, shall convene working groups to evaluate the policies and
goals contained within the Carl Moyer and Assembly Bill 923 (Chapter
707 of the Statutes of 2004) programs. 
   SECTION 1.   SEC. 4.   Section 43867.5
is added to the Health and Safety Code, to read:
   43867.5.  The Legislature finds and declares all of the following:

   (a) The state overwhelmingly relies on a single source of fuel,
petroleum, for its transportation needs, and nearly one-half of that
petroleum comes from overseas. This overreliance on petroleum leaves
residents vulnerable to supply interruptions and price instabilities,
and it leaves consumers with essentially no options for alternative
transportation fuels.
   (b) Residents spend over twenty billion dollars ($20,000,000,000)
each year on petroleum fuel imports, representing a significant
missed economic opportunity.
   (c) It is in the interest of the state to increase alternative
fuels usage to reduce fuel price volatility, improve environmental
quality and transportation energy security, and demonstrate the state'
s continued leadership in reducing greenhouse gas emissions.
   (d) The "State Alternative Fuels Plan," which was adopted by the
state board and the State Energy Resources Conservation and
Development Commission pursuant to Section 43866, outlined specific
strategies and targets that would increase the use of alternative and
nonpetroleum fuels. The strategy set a moderate growth goal of 26
percent penetration for alternative fuel use in on-road and off-road
vehicles by 2022. In 2007, alternative fuels accounted for less than
5 percent of the transportation sector's consumption.
   (e) Therefore, it is in the interest of the state to evaluate
progress toward increasing alternative fuels usage .
   SEC. 2.   SEC. 5.   Section 43867.6 is
added to the Health and Safety Code, to read:
   43867.6.  (a) In order to measure the progress of alternative
fuels use for on-road and off-road vehicles in the state, it is the
intent of the Legislature that the state board and the State Energy
Resources Conservation and Development Commission shall update the
analysis of the state alternative transportation fuels use described
in this section.
   (b) The state board and the State Energy Resources Conservation
and Development Commission shall coordinate efforts to implement this
article.
   (c) On or before November 1, 2014, the state board and the State
Energy Resources Conservation and Development Commission shall
    update the economic analysis used in developing and reviewing
state board regulations to include a range of petroleum and
alternative fuel prices to more accurately assess the future cost of
petroleum-based and alternative fuels.
   (d) The State Energy Resources Conservation and Development
Commission, in consultation with the state board, shall do all of the
following:
   (1) Evaluate how the use of new and existing investment programs
could be used to increase the state alternative transportation fuels
use.
   (2) Evaluate how the impact of federal fuel policies and existing
state policies will help increase the use of alternative
transportation fuels in the state.
   (e) On or before November 1, 2015, and every two years thereafter
consistent with and reported within the integrated energy policy
report, pursuant to Section 25302 of the Public Resources Code, the
state board and the State Energy Resources Conservation and
Development Commission shall report on the status of the 
state's   state  alternative transportation fuels
use  analysis  in subdivision (a) and make  the 
evaluations required in subdivision (d). The report shall include
details as to the quantities of alternative fuels used in the state
during the preceding years in absolute terms and as a percentage of
the state's overall transportation fuel mix.
   (f) As part of developing relevant new and amended regulations,
the state board shall include a finding on the effect of proposed
regulations on the state alternative transportation fuels use.
   (g) This section shall be implemented consistent with the
environmental, public health, and sustainability considerations
included in Sections 44271 and 44272. Further, nothing in this
section shall be interpreted to preempt the California Global Warming
Solutions Act of 2006 (Division 25.5 (commencing with Section
38500)) or the programs and policies implemented pursuant to that
act.
   (h) The state board and the State Energy Resources Conservation
and Development Commission, in studying the state alternative
transportation fuels use, shall seek to measure all of the following:

   (1) In-state job creation through the continued development of an
alternative fuels industry in the state.
   (2) Economic vulnerability of residents to future, costly
petroleum fuel price spikes by the use of either petroleum fuels or
alternative fuels and vehicles.
   (3) Alternative fuel market penetration in nonattainment areas.
   (4) Increase access to the supply of alternative fuels and
alternative fuel vehicles for all residents, including barriers to
supply.
   SEC. 6.    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 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, 2016   December 31, 2023  , and as of
that date is repealed, unless a later enacted statute, that is
enacted before  January 1, 2016   December 31,
2023  , deletes or extends that date.
   SEC. 7.    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, 2015   December 31, 2023  , and as of
that date is repealed, unless a later enacted statute, that is
enacted before  January 1, 2015   December 31,
2023  , deletes or extends that date.
   SEC. 8.    Section 44225 of the   Health and
Safety Code   , as added by Chapter 707 of the  
Statutes of 2004, is amended to read: 
   44225.  On and after April 1, 1992, 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,
2015   December 31, 2023  .
   SEC. 9.    Section 44229 of the  Health and
Safety Code   , as amended by   Chapter 216 of the
Statutes of 2011, is amended t   o 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 the provisions of 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, 2015   December 31, 2023  , and as of
that date is repealed, unless a later enacted statute, that is
enacted before  January 1, 2015   December 31,
2023  , deletes or extends that date.
   SEC. 10.    Section 44229 of the  Health and
Safety Code   , as added by 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,
2015   December 31, 2023  .
   SEC. 11.    Section 44275 of the   Health
and Safety Code   , as amended by Section 5 of Chapter 707
of the Statutes of 2004, is amende   d 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 offroad
nonrecreational equipment and vehicles, locomotives, diesel marine
vessels, agricultural sources of air pollution, as defined in Section
39011.5, and, as determined by the state board, other high-emitting
engine categories.
   (8) "Covered vehicle" includes any vehicle or piece of equipment
powered by a covered engine.
   (9) "District" means a county air pollution control district or an
air quality management district.
   (10) "Fund" means the Carl Moyer Memorial Air Quality Standards
Attainment Trust Fund created by Section 44299.
   (11) "Mobile Source Air Pollution Reduction Review Committee"
means the Mobile Source Air Pollution Reduction Review Committee
created by Section 44244.
   (12) "Incremental cost" means the cost of the project less a
baseline cost that would otherwise be incurred by the applicant in
the normal course of business. Incremental costs may include added
lease or fuel costs pursuant to Section 44283 as well as incremental
capital costs.
   (13) "New very low emission vehicle" means a heavy-duty vehicle
that qualifies as a very low emission vehicle when it is a new
vehicle, where new vehicle has the same meaning as defined in Section
430 of the Vehicle Code, or that is modified with the approval and
warranty of the original equipment manufacturer to qualify as a very
low emission vehicle within 12 months of delivery to an owner for
private or commercial use.
   (14) "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, 2015   December 31, 2023  , and as of
that date is repealed, unless a later enacted statute, that is
enacted before  January 1, 2015   December 31,
2023  , deletes or extends that date.
   SEC. 12.    Section 44275 of   the 
 Health and Safety Code   , as added by Chapter 707 of
the Statutes of 2004, is amended to read: 
   44275.  (a) As used in this chapter, the following terms have the
following meaning:
   (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
GVWR or greater, offroad nonrecreational equipment and vehicles,
locomotives, diesel marine vessels, stationary agricultural engines,
and, as determined by the state board, other high-emitting diesel
engine categories.
   (7) "Covered vehicle" includes any vehicle or piece of equipment
powered by a covered engine.
   (8) "District" means a county air pollution control district or an
air quality management district.
   (9) "Fund" means the Carl Moyer Memorial Air Quality Standards
Attainment Trust Fund created by Section 44299.
   (10) "Mobile Source Air Pollution Reduction Review Committee"
means the Mobile Source Air Pollution Reduction Review Committee
created by Section 44244.
   (11) "Incremental cost" means the cost of the project less a
baseline cost that would otherwise be incurred by the applicant in
the normal course of business. Incremental costs may include added
lease or fuel costs pursuant to Section 44283 as well as incremental
capital costs.
   (12) "New very low emission vehicle" means a vehicle that
qualifies as a very low emission vehicle when it is a new vehicle,
where new vehicle has the same meaning as defined in Section 430 of
the Vehicle Code, or that is modified with the approval and warranty
of the original equipment manufacturer to qualify as a very low
emission vehicle within 12 months of delivery to an owner for private
or commercial use.
   (13) "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,
2015   December 31, 2023  .
   SEC. 13.    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, 2015   December 31, 2023  , and as of
that date is repealed, unless a later enacted statute, that is
enacted before  January 1, 2015   December 31,
2023  , deletes or extends that date.
   SEC. 14.   Section 44280 of   the  
Health and Safety Code   , as added by 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,
2015   December 31, 2023  .
   SEC. 15.    Section 44281 of the   Health
and Safety Code   , as amended by Section 7 of Chapter 707
of the Statutes of 2004, is amended to read: 
   44281.  (a) Eligible projects include, but are not limited to, any
of the following:
   (1) Purchase of new very low or zero-emission covered vehicles or
covered heavy-duty engines.
   (2) Emission-reducing retrofit of covered engines, or replacement
of old engines powering covered sources with newer engines certified
to more stringent emissions standards than the engine being replaced,
or with electric motors or drives.
   (3) Purchase and use of emission-reducing add-on equipment that
has been verified by the state board for covered vehicles.
   (4) Development and demonstration of practical, low-emission
retrofit technologies, repower options, and advanced technologies for
covered engines and vehicles with very low emissions of oxides of
nitrogen.
   (5) Light- and medium-duty vehicle projects in compliance with
guidelines adopted by the state board pursuant to Title 13 of the
California Code of Regulations.
   (b) No project shall be funded under this chapter after the
compliance date required by any local, state, or federal statute,
rule, regulation, memoranda of agreement or understanding, or other
legally binding document, except that an otherwise qualified project
may be funded even if the State Implementation Plan assumes that the
change in equipment, vehicles, or operations will occur, if the
change is not required by the compliance date of a statute,
regulation, or other legally binding document in effect as of the
date the grant is awarded. No project funded by the program shall be
used for credit under any state or federal emissions averaging,
banking, or trading program. No emission reduction generated by the
program shall be used as marketable emission reduction credits or to
offset any emission reduction obligation of any person or entity.
Projects involving new engines that would otherwise generate
marketable credits under state or federal averaging, banking, and
trading programs shall include transfer of credits to the engine end
user and retirement of those credits toward reducing air emissions in
order to qualify for funding under the program. A purchase of a
low-emission vehicle or of equipment pursuant to a corporate or a
controlling board's policy, but not otherwise required by law, shall
generate surplus emissions reductions and may be funded by the
program.
   (c) The program may also provide funding toward installation of
fueling or electrification infrastructure as provided in Section
44284.
   (d) Eligible applicants may be any individual, company, or public
agency that owns one or more covered vehicles that operate primarily
within California or otherwise contribute substantially to the NOx,
PM or ROG emissions inventory in California.
   (e) It is the intent of the Legislature that all emission
reductions generated by this chapter shall contribute to public
health by reducing, for the life of the vehicle being funded, the
total amount of emissions in California.
   (f) This section shall remain in effect only until 
January 1, 2015   December 31, 2023  , and as of
that date is repealed, unless a later enacted statute, that is
enacted before  January 1, 2015   December 31,
2023  , deletes or extends that date.
   SEC. 16.    Section 44281 of   the 
 Health and Safety Code   , as added by Chapter 707 of
the Statutes of 2004, is amended to read: 
   44281.  (a) Eligible projects are any of the following:
   (1) Purchase of new very low or zero-emission covered vehicles or
covered engines.
   (2) Emission-reducing retrofit of covered engines, or replacement
of old engines powering covered sources with newer engines certified
to more stringent emissions standards than the engine being replaced,
or with electric motors or drives.
   (3) Purchase and use of emission-reducing add-on equipment for
covered vehicles.
   (4) Development and demonstration of practical, low-emission
retrofit technologies, repower options, and advanced technologies for
covered engines and vehicles with very low emissions of oxides of
nitrogen.
   (b) No new purchase, retrofit, repower, or add-on equipment shall
be funded under this chapter if it is required by any local, state,
or federal statute, rule, regulation, memoranda of agreement or
understanding, or other legally binding document, except that an
otherwise qualified project may be funded even if the State
Implementation Plan assumes that the change in equipment, vehicles,
or operations will occur, if the change is not required by a statute,
regulation, or other legally binding document in effect as of the
date the grant is awarded. No project funded by the program shall be
used for credit under any state or federal emissions averaging,
banking, or trading program. No emission reduction generated by the
program shall be used as marketable emission reduction credits or to
offset any emission reduction obligation of any entity. Projects
involving new engines that would otherwise generate marketable
credits under state or federal averaging, banking, and trading
programs shall include transfer of credits to the engine end user and
retirement of those credits toward reducing air emissions in order
to qualify for funding under the program. A purchase of a
low-emission vehicle or of equipment pursuant to a corporate or a
controlling board's policy, but not otherwise required by law, shall
generate surplus emissions reductions and may be funded by the
program.
   (c) The program may also provide funding toward installation of
fueling or electrification infrastructure as provided in Section
44284.
   (d) Eligible applicants may be any individual, company, or public
agency that owns one or more covered vehicles that operate primarily
within California or otherwise contribute substantially to the 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,
2015   December 31, 2023  .
   SEC. 17.    Section 44282 of the   Health
and Safety Code   , as amended by Section 8 of Chapter 707
of the Statutes of 2004, is amended to read: 
   44282.  The following criteria apply to all projects to be funded
through the program except for projects funded through the Advanced
Technology Account and the Infrastructure Demonstration Program:
   (a)  The state board may establish project criteria, including
minimum project life for source categories, in the guidelines
described in Section 44287. For previously unregulated source
categories, project criteria shall consider the timing of newly
established regulatory requirements.
   (b) To be eligible, projects shall meet the cost-effectiveness per
ton of covered emissions reduced requirements of Section 44283.
   (c) To be eligible, retrofits, repowers, and installation of
add-on equipment for covered vehicles shall be performed, or new
covered vehicles delivered to the end user, or covered vehicles
scrapped on or after the date the program is implemented.
   (d) Retrofit technologies, new engines, and new vehicles shall be
certified for sale or under experimental permit for operation in
California.
   (e) Repower projects that replace older, uncontrolled engines with
new, emissions-certified engines or that replace emissions-certified
engines with new engines certified to a more stringent 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, 2015   December 31, 2023  , and as of
that date is repealed, unless a later enacted statute, that is
enacted before  January 1, 2015   December 31,
2023  , deletes or extends that date.
   SEC. 18.    Section 44282 of   the 
 Health and Safety Code  , as added by Chapter 707 of
the Statutes of 2004, is amended to read: 
   44282.  The following criteria apply to all projects to be funded
through the program except for projects funded through the Advanced
Technology Account and the Infrastructure Demonstration Program:
   (a) Except for projects involving marine vessels, 75 percent or
more of vehicle miles traveled or hours of operation shall be
projected to be in California for at least five years following the
grant award. Projects involving marine vessels and engines shall be
limited to those that spend enough time operating in California air
basins over the lifetime of the project to meet the
cost-effectiveness criteria based on 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,
2015   December 31, 2023  .
   SEC. 19.    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 offroad 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, 2015   December 31, 2023  , and as of
that date is repealed, unless a later enacted statute, that is
enacted before  January 1, 2015   December 31,
2023  , deletes or extends that date.
   SEC. 20.    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, 2015  
December 31, 2023  , 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 offroad 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,
2015   December 31, 2023  .
   SEC. 21.    Section 44287 of the   Health
and Safety Code   , as amended by Section 10 of Chapter 707
of the Statutes of 2004, is amended to read: 
   44287.  (a) The state board shall establish or update grant
criteria and guidelines consistent with this chapter for covered
vehicle projects as soon as practicable, but not later than January
1, 2006. The adoption of guidelines is exempt from the rulemaking
provisions of the Administrative Procedure Act, Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title 2 of
the Government Code. The state board shall solicit input and comment
from the districts during the development of the criteria and
guidelines and shall make every effort to develop criteria and
guidelines that are compatible with existing district programs that
are also consistent with this chapter. Guidelines shall include
protocols to calculate project cost-effectiveness. The grant criteria
and guidelines shall include safeguards to ensure that the project
generates surplus emissions reductions. Guidelines shall enable and
encourage districts to cofund projects that provide emissions
reductions in more than one district. The state board shall make
draft criteria and guidelines available to the public 45 days before
final adoption, and shall hold at least one public meeting to
consider public comments before final adoption. The state board may
develop separate guidelines and criteria for the different types of
eligible projects described in subdivision (a) of Section 44281.
   (b) The state board, in consultation with the participating
districts, may propose revisions to the criteria and guidelines
established pursuant to subdivision (a) as necessary to improve the
ability of the program to achieve its goals. A proposed revision
shall be made available to the public 45 days before final adoption
of the revision and the state board shall hold at least one public
meeting to consider public comments before final adoption of the
revision.
   (c) The state board shall reserve funds for, and disburse funds
to, districts from the fund for administration pursuant to this
section and Section 44299.1.
   (d) The state board shall develop guidelines for a district to
follow in applying for the reservation of funds, in accordance with
this chapter. It is the intent of the Legislature that district
administration of any reserved funds be in accordance with the
project selection criteria specified in Sections 44281, 44282, and
44283 and all other provisions of this chapter. The guidelines shall
be established and published by the state board as soon as
practicable, but not later than January 1, 2006.
   (e) Funds shall be reserved by the state board for administration
by a district that adopts an eligible program pursuant to this
chapter and offers matching funds at a ratio of one dollar ($1) of
matching funds committed by the district or the Mobile Source Air
Pollution Reduction Review Committee for every two dollars ($2)
committed from the fund. Funds available to the Mobile Source Air
Pollution Reduction Review Committee may be counted as matching funds
for projects in the South Coast Air Basin only if the committee
approves the use of these funds for matching purposes. Matching funds
may be any funds under the district's budget authority that are
committed to be expended in accordance with the program. Funds
committed by a port authority or a local government, in cooperation
with a district, to be expended in accordance with the program may
also be counted as district matching funds. Matching funds provided
by a port authority or a local government may not exceed 30 percent
of the total required matching funds in any district that applies for
more than three hundred thousand dollars ($300,000) of the state
board funds. Only a district, or a port authority or a local
government teamed with a district, may provide matching funds.
   (f) The state board may adjust the ratio of matching funds
described in subdivision (e), if it determines that an adjustment is
necessary in order to maximize the use of, or the air quality
benefits provided by, the program, based on a consideration of the
financial resources of the district.
   (g) Notwithstanding subdivision (e), a district need not provide
matching funds for state board funds allocated to the district for
program outreach activities pursuant to paragraph (4) of subdivision
(a) of Section 44299.1.
   (h) A district may include within its matching funds a reasonable
estimate of direct or in-kind costs for assistance in providing
program outreach and application evaluation. In-kind and direct
matching funds shall not exceed 15 percent of the total matching
funds offered by a district. A district may also include within its
matching funds any money spent on or after February 25, 1999, that
would have qualified as matching funds but were not previously
claimed as matching funds.
   (i) A district desiring a reservation of funds shall apply to the
state board following the application guidelines established pursuant
to this section. The state board shall approve or disapprove a
district application not later than 60 days after receipt. Upon
approval of any district application, the state board shall
simultaneously approve a reservation of funding for that district to
administer. Reserved funds shall be disbursed to the district so that
funding of a district-approved project is not impeded.
   (j) Notwithstanding any other provision of this chapter, districts
and the Mobile Source Air Pollution Reduction Review Committee shall
not use funds collected pursuant to Section 41081 or Chapter 7
(commencing with Section 44220), or pursuant to Section 9250.11 of
the Vehicle Code, as matching funds to fund a project with stationary
or portable engines, locomotives, or marine vessels.
   (k) Any funds reserved for a district pursuant to this section are
available to the district for a period of not more than two years
from the time of reservation. Funds not expended by June 30 of the
second calendar year following the date of the reservation shall
revert back to the state board as of that June 30, and shall be
deposited in the Covered Vehicle Account established pursuant to
Section 44299. The funds may then be redirected based on applications
to the fund. Regardless of any reversion of funds back to the state
board, the district may continue to request other reservations of
funds for local administration. Each reservation of funds shall be
accounted for separately, and unused funds from each application
shall revert back to the state board as specified in this
subdivision.
   (  l  ) The state board shall specify a date each year
when district applications are due. If the eligible applications
received in any year oversubscribe the available funds, the state
board shall reserve funds on an allocation basis, pursuant to Section
44299.2. The state board may accept a district application after the
due date for a period of months specified by the state board. Funds
may be reserved in response to those applications, in accordance with
this chapter, out of funds remaining after the original reservation
of funds for the year.
   (m) Guidelines for a district application shall require
information from an applicant district to the extent necessary to
meet the requirements of this chapter, but shall otherwise minimize
the information required of a district.
   (n) A district application shall be reviewed by the state board
immediately upon receipt. If the state board determines that an
application is incomplete, the applicant shall be notified within 10
working days with an explanation of what is missing from the
application. A completed application fulfilling the criteria shall be
approved as soon as practicable, but not later than 60 working days
after receipt.
   (o) The commission, in consultation with the districts, shall
establish project approval criteria and guidelines for infrastructure
projects consistent with Section 44284 as soon as practicable, but
not later than February 15, 2000. The commission shall make draft
criteria and guidelines available to the public 45 days before final
adoption, and shall hold at least one public meeting to consider
public comments before final adoption.
   (p) The commission, in consultation with the participating
districts, may propose revisions to the criteria and guidelines
established pursuant to subdivision (o) as necessary to improve the
ability of the program to achieve its goals. A revision may be
proposed at any time, or may be proposed in response to a finding
made in the annual report on the program published by the state board
pursuant to Section 44295. A proposed revision shall be made
available to the public 45 days before final adoption of the revision
and the commission shall hold at least one public meeting to
consider public comments before final adoption of the revision.
   (q) Unclaimed funds will be allocated by the state board in
accordance with Section 44299.2.
   (r) This section shall remain in effect only until 
January 1, 2015   December 31, 2023  , and as of
that date is repealed, unless a later enacted statute, that is
enacted before  January 1, 2015   December 31,
2023  , deletes or extends that date.
   SEC. 22.    Section 44287 of   the 
 Health and Safety Code   , as added by Chapter 707 of
the Statutes of 2004, is amended to read: 
   44287.  (a) The state board shall establish grant criteria and
guidelines consistent with this chapter for covered vehicle projects
as soon as practicable, but not later than January 1, 2000. The
adoption of guidelines is exempt from the rulemaking provisions of
the Administrative Procedure Act, Chapter 3.5 (commencing with
Section 11340) of Part 1 of Division 3 of Title 2 of the Government
Code. The state board shall solicit input and comment from the
districts during the development of the criteria and guidelines and
shall make every effort to develop criteria and guidelines that are
compatible with existing district programs that are also consistent
with this chapter. Guidelines shall include protocols to calculate
project cost-effectiveness. The grant criteria and guidelines shall
include safeguards to ensure that the project generates surplus
emissions reductions. Guidelines shall enable and encourage districts
to cofund projects that provide emissions reductions in more than
one district. The state board shall make draft criteria and
guidelines available to the public 45 days before final adoption, and
shall hold at least one public meeting to consider public comments
before final adoption.
   (b) The state board, in consultation with the participating
districts, may propose revisions to the criteria and guidelines
established pursuant to subdivision (a) as necessary to improve the
ability of the program to achieve its goals. A proposed revision
shall be made available to the public 45 days before final adoption
of the revision and the state board shall hold at least one public
meeting to consider public comments before final adoption of the
revision.
   (c) The state board shall reserve funds for, and disburse funds
to, districts from the fund for administration pursuant to this
section and Section 44299.1.
   (d) The state board shall develop guidelines for a district to
follow in applying for the reservation of funds, in accordance with
this chapter. It is the intent of the Legislature that district
administration of any reserved funds be in accordance with the
project selection criteria specified in Sections 44281, 44282, and
44283 and all other provisions of this chapter. The guidelines shall
be established and published by the state board as soon as
practicable, but not later than January 1, 2000.
   (e) Funds shall be reserved by the state board for administration
by a district that adopts an eligible program pursuant to this
chapter and offers matching funds at a ratio of one dollar ($1) of
matching funds committed by the district or the Mobile Source Air
Pollution Reduction Review Committee for every two dollars ($2)
committed from the fund. Funds available to the Mobile Source Air
Pollution Reduction Review Committee may be counted as matching funds
for projects in the South Coast Air Basin only if the committee
approves the use of these funds for matching purposes. Matching funds
may be any funds under the district's budget authority that are
committed to be expended in accordance with the program. Funds
committed by a port authority or a local government, in cooperation
with a district, to be expended in accordance with the program may
also be counted as district matching funds. Matching funds provided
by a port authority or a local government may not exceed 30 percent
of the total required matching funds in any district that applies for
more than three hundred thousand dollars ($300,000) of the state
board funds. Only a district, or a port authority or a local
government teamed with a district, may provide matching funds.
   (f) The state board may adjust the ratio of matching funds
described in subdivision (e), if it determines that an adjustment is
necessary in order to maximize the use of, or the air quality
benefits provided by, the program, based on a consideration of the
financial resources of the district.
   (g) Notwithstanding subdivision (e), a district need not provide
matching funds for state board funds allocated to the district for
program outreach activities pursuant to paragraph (4) of subdivision
(a) of Section 44299.1.
   (h) A district may include within its matching funds a reasonable
estimate of direct or in-kind costs for assistance in providing
program outreach and application evaluation. In-kind and direct
matching funds shall not exceed 15 percent of the total matching
funds offered by a district. A district may also include within its
matching funds any money spent on or after February 25, 1999, that
would have qualified as matching funds but were not previously
claimed as matching funds.
   (i) A district desiring a reservation of funds shall apply to the
state board following the application guidelines established pursuant
to this section. The state board shall approve or disapprove a
district application not later than 60 days after receipt. Upon
approval of any district application, the state board shall
simultaneously approve a reservation of funding for that district to
administer. Reserved funds shall be disbursed to the district so that
funding of a district-approved project is not impeded.
   (j) Notwithstanding any other provision of this chapter, districts
and the Mobile Source Air Pollution Reduction Review Committee shall
not use funds collected pursuant to Section 41081 or Chapter 7
(commencing with Section 44220), or pursuant to Section 9250.11 of
the Vehicle Code, as matching funds to fund a project with stationary
or portable engines, locomotives, or marine vessels.
   (k) Any funds reserved for a district pursuant to this section are
available to the district for a period of not more than two years
from the time of reservation. Funds not expended by June 30 of the
second calendar year following the date of the reservation shall
revert back to the state board as of that June 30, and shall be
deposited in the Covered Vehicle Account established pursuant to
Section 44299. The funds may then be redirected based on applications
to the fund. Regardless of any reversion of funds back to the state
board, the district may continue to request other reservations of
funds for local administration. Each reservation of funds shall be
accounted for separately, and unused funds from each application
shall revert back to the state board as specified in this
subdivision.
   (  l  ) The state board shall specify a date each year
when district applications are due. If the eligible applications
received in any year oversubscribe the available funds, the state
board shall reserve funds on an allocation basis, pursuant to
subdivision (b) of Section 44299.1. The state board may accept a
district application after the due date for a period of months
specified by the state board. Funds may be reserved in response to
those applications, in accordance with this chapter, out of funds
remaining after the original reservation of funds for the year.
   (m) Guidelines for a district application shall require
information from an applicant district to the extent necessary to
meet the requirements of this chapter, but shall otherwise minimize
the information required of a district.
   (n) A district application shall be reviewed by the state board
immediately upon receipt. If the state board determines that an
application is incomplete, the applicant shall be notified within 10
working days with an explanation of what is missing from the
application. A completed application fulfilling the criteria shall be
approved as soon as practicable, but not later than 60 working days
after receipt.
   (o) The state board, in consultation with the districts, shall
establish project approval criteria and guidelines for infrastructure
projects consistent with Section 44284 as soon as practicable, but
not later than February 15, 2000. The commission shall make draft
criteria and guidelines available to the public 45 days before final
adoption, and shall hold at least one public meeting to consider
public comments before final adoption.
   (p) The state board, in consultation with the participating
districts, may propose revisions to the criteria and guidelines
established pursuant to subdivision (o) as necessary to improve the
ability of the program to achieve its goals. A revision may be
proposed at any time, or may be proposed in response to a finding
made in the annual report on the program published by the state board
pursuant to Section 44295. A proposed revision shall be made
available to the public 45 days before final adoption of the revision
and the commission shall hold at least one public meeting to
consider public comments before final adoption of the revision.
   (q) This section shall become operative on  January 1,
2015   December 31, 2023  .
   SEC. 23.    Section   44299.1 of the 
 Health and Safety Code   , as amended by Section 3 of
Chapter 627 of the Statutes of 2006, is amended to read: 
   44299.1.  (a) To ensure that emission reductions are obtained as
needed from pollution sources, any money deposited in or appropriated
to the fund shall be segregated and administered as follows:
   (1) Not more than 2 percent of the moneys in the fund shall be
allocated to program support and outreach costs incurred by the state
board and the commission directly associated with implementing the
program pursuant to this chapter. These funds shall be allocated to
the state board and the commission in proportion to total program
funds administered by the state board and the commission.
   (2) Not more than 2 percent of the moneys in the fund shall be
allocated to direct program outreach activities. The state board may
use these funds for program outreach contracts or may allocate
outreach funds to participating air districts in proportion to each
district's allocation from the Covered Vehicle Account. The state
board shall report on the use of outreach funds in their reports to
the Legislature pursuant to Section 44295.
   (3) The balance shall be deposited in the Covered Vehicle Account
to be expended to offset added costs of new very low or zero-emission
vehicle technologies, and emission reducing repowers, retrofits, and
add-on equipment for covered vehicles and engines, and other
projects                                           specified in
Section 44281.
   (b) Funds in the Covered Vehicle Account shall be allocated to a
district that submits an eligible application to the state board
pursuant to Section 44287. The state board shall determine the
maximum amount of annual funding from the Covered Vehicle Account
that each district may receive. This determination shall be based on
the population in each district as well as the relative importance of
obtaining covered emission reductions in each district, specifically
through the program.
   (c) Not more than 5 percent of the moneys allocated pursuant to
this chapter to a district with a population of one million or more
may be used by the district for indirect costs of implementation of
the program, including outreach costs that are subject to the
limitation in paragraph (2) of subdivision (a).
   (d) Not more than 10 percent of the moneys allocated pursuant to
this chapter to a district with a population of less than one million
may be used by the district for indirect costs of implementation of
the program, including outreach costs that are subject to the
limitation in paragraph (2) of subdivision (a).
   (e) This section shall remain in effect only until 
January 1, 2015   December 31, 2023  , and as of
that date is repealed, unless a later enacted statute, that is
enacted before  January 1, 2015  December 31,
2023  , deletes or extends that date.
   SEC. 24.    Section  44299.1 of the 
 Health and Safety Code   , as added by Chapter 707 of
the Statutes of 2004, is amended to read: 
   44299.1.  (a) To ensure that emission reductions are obtained as
needed from pollution sources, any money deposited in or appropriated
to the fund shall be segregated and administered as follows:
   (1) Ten percent, not to exceed two million dollars ($2,000,000),
shall be allocated to the Infrastructure Demonstration Project to be
used pursuant to Section 44284.
   (2) Ten percent shall be deposited in the Advanced Technology
Account to be used to support research, development, demonstration,
and commercialization of advanced low-emission technologies for
covered sources that show promise of contributing to the goals of the
program.
   (3) Not more than 2 percent of the moneys in the fund shall be
allocated to program support and outreach costs incurred by the state
board and the commission directly associated with implementing the
program pursuant to this chapter. These funds shall be allocated to
the state board and the commission in proportion to total program
funds administered by the state board and the commission.
   (4) Not more than 2 percent of the moneys in the fund shall be
allocated to direct program outreach activities. The state board may
use these funds for program outreach contracts or may allocate
outreach funds to participating air districts in proportion to each
district's allocation from the Covered Vehicle Account. The state
board shall report on the use of outreach funds in their reports to
the Legislature pursuant to Section 44295.
   (5) The balance shall be deposited in the Covered Vehicle Account
to be expended to offset added costs of new very low or zero-emission
vehicle technologies, and emission reducing repowers, retrofits, and
add-on equipment for covered vehicles and engines.
   (b) Funds in the Covered Vehicle Account shall be allocated to a
district that submits an eligible application to the state board
pursuant to Section 44287. The state board shall determine the
maximum amount of annual funding from the Covered Vehicle Account
that each district may receive. This determination shall be based on
the population in each district as well as the relative importance of
obtaining NOx reductions in each district, specifically through the
program.
   (c) This section shall become operative on  January 1,
2015   December 31, 2023  .
   SEC. 25.    Section 44299.2 of the   Health
and Safety Code   is amended to read: 
   44299.2.  Funds shall be allocated to local air pollution control
and air quality management districts, and shall be subject to
administrative terms and conditions as follows:
   (a) Available funds shall be distributed to districts taking into
consideration the population of the area, the severity of the air
quality problems experienced by the population, and the historical
allocation of the Carl Moyer Memorial Air Quality Standards
Attainment Trust Fund, except that the south coast district shall be
allocated a percentage of the total funds available to districts that
is proportional to the percentage of the total state population
residing within the jurisdictional boundaries of that district. For
the purposes of this subdivision, population shall be determined by
the state board based on the most recent data provided by the
Department of Finance. The allocation to the south coast district
shall be subtracted from the total funds available to districts. Each
district, except the south coast district, shall be awarded a
minimum allocation of two hundred thousand dollars ($200,000), and
the remainder, which shall be known as the "allocation amount," shall
be allocated to all districts as follows:
   (1) The state board shall distribute 35 percent of the allocation
amount to the districts in proportion to the percentage of the total
residual state population that resides within each district's
boundaries. For purposes of this paragraph, "total residual state
population" means the total state population, less the total
population that resides within the south coast district.
   (2) The state board shall distribute 35 percent of the allocation
amount to the districts in proportion to the severity of the air
quality problems to which each district's population is exposed. The
severity of the exposure shall be calculated as follows:
   (A) Each district shall be awarded severity points based on the
district's attainment designation and classification, as most
recently promulgated by the federal Environmental Protection Agency
for the National Ambient Air Quality Standard for ozone averaged over
eight hours, as follows:
   (i) A district that is designated attainment for the federal
eight-hour ozone standard shall be awarded one point.
   (ii) A district that is designated nonattainment for the federal
eight-hour ozone standard shall be awarded severity points based on
classification. Two points shall be awarded for transitional, basic,
or marginal classifications, three points for moderate
classification, four points for serious classification, five points
for severe classification, six points for severe-17 classification,
and seven points for extreme classification.
   (B) Each district shall be awarded severity points based on the
annual diesel particulate emissions in the air basin, as determined
by the state board. One point shall be awarded to the district, in
increments, for each 1,000 tons of diesel particulate emissions. In
making this determination, 0 to 999 tons shall be awarded no points,
1,000 to 1,999 tons shall be awarded one point, 2,000 to 2,999 tons
shall be awarded two points, and so forth. If a district encompasses
more than one air basin, the air basin with the greatest diesel
particulate emissions shall be used to determine the points awarded
to the district. The San Diego County Air Pollution Control District
and the Imperial County Air Pollution Control District shall be
awarded one additional point each to account for annual diesel
particulate emissions transported from Mexico.
   (C) The points awarded under subparagraphs (A) and (B), shall be
added together for each district, and the total shall be multiplied
by the population residing within the district boundaries, to yield
the local air quality exposure index.
   (D) The local air quality exposure index for each district shall
be summed together to yield a total state exposure index. Funds shall
be allocated under this paragraph to each district in proportion to
its local air quality exposure index divided by the total state
exposure index.
   (3) The state board shall distribute 30 percent of the allocation
amount to the districts in proportion to the allocation of funds from
the Carl Moyer Memorial Air Quality Standards Attainment Trust Fund,
as follows:
   (A) Because each district is awarded a minimum allocation pursuant
to subdivision (a), there shall be no additional minimum allocation
from the Carl Moyer historical allocation funds. The total amount
allocated in this way shall be subtracted from total funding
previously awarded to the district under the Carl Moyer Memorial Air
Quality Standards Attainment Program, and the remainder, which shall
be known as directed funds, shall be allocated pursuant to
subparagraph (B).
   (B) Each district with a population that is greater than or equal
to 1 percent of the state's population shall receive an additional
allocation based on the population of the district and the district's
relative share of emission reduction commitments in the State
Implementation Plan to attain the National Ambient Air Quality
Standard for ozone averaged over one hour. This additional allocation
shall be calculated as a percentage share of the directed funds for
each district, derived using a ratio of each district's share amount
to the base amount, which shall be calculated as follows:
   (i) The base amount shall be the total Carl Moyer program funds
allocated by the state board to the districts in the 2002-03 fiscal
year, less the total of the funds allocated through the minimum
allocation to each district in the 2002-03 fiscal year.
   (ii) The share amount shall be the allocation that each district
received in the 2002-03 fiscal year, not including the minimum
allocation. There shall be one share amount for each district.
   (iii) The percentage share shall be calculated for each district
by dividing the district's share amount by the base amount, and
multiplying the result by the total directed funds available under
this subparagraph.
   (b) Funds shall be distributed as expeditiously as reasonably
practicable, and a report of the distribution shall be made available
to the public.
   (c) All funds allocated pursuant to this section shall be expended
as provided in the guidelines adopted pursuant to Section 44287
within two years from the date of allocation. Funds not expended
within the two years shall be returned to the Covered Vehicle Account
within 60 days and shall be subject to further allocation as
follows:
   (1) Within 30 days of the deadline to return funds, the state
board shall notify the districts of the total amount of returned
funds available for reallocation, and shall list those districts that
request supplemental funds from the reallocation and that are able
to expend those funds within one year.
   (2) Within 90 days of the deadline to return funds, the state
board shall allocate the returned funds to the districts listed
pursuant to paragraph (1).
   (3) All supplemental funds distributed under this subdivision
shall be expended consistent with the Carl Moyer Air Quality
Standards Attainment Program within one year of the date of
supplemental allocation. Funds not expended within one year shall be
returned to the Covered Vehicle Account and shall be distributed at
the discretion of the state board to districts, taking into
consideration of each district's ability to expeditiously utilize the
remaining funds consistent with the Carl Moyer Air Quality Standards
Attainment Program.
   (d) This section shall remain in effect only until 
January 1, 2015   December 31, 2023  , and as of
that date is repealed, unless a later enacted statute, that is
enacted before  January 1, 2015   December 31,
2023  , deletes or extends that date.
   SEC. 26.    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 board, or its agent authorized pursuant to Section 42882,
shall be reimbursed for its costs of collection, auditing, and making
refunds associated with the California Tire Recycling Management
Fund, but not to exceed 3 percent of the total annual revenue
deposited in the fund.
   (d) The California tire fee imposed pursuant to subdivision (b)
shall be separately stated by the retail seller on the invoice given
to the customer at the time of sale. Any other disposal or
transaction fee charged by the retail seller related to the tire
purchase shall be identified separately from the California tire fee.

   (e) A person or business who knowingly, or with reckless
disregard, makes a false statement or representation in a document
used to comply with this section is liable for a civil penalty for
each violation or, for continuing violations, for each day that the
violation continues. Liability under this section may be imposed in a
civil action and shall not exceed twenty-five thousand dollars
($25,000) for each violation.
   (f) In addition to the civil penalty that may be imposed pursuant
to subdivision (e), the board may impose an administrative penalty in
an amount not to exceed five thousand dollars ($5,000) for each
violation of a separate provision or, for continuing violations, for
each day that the violation continues, on a person who intentionally
or negligently violates a permit, rule, regulation, standard, or
requirement issued or adopted pursuant to this chapter. The board
shall adopt regulations that specify the amount of the administrative
penalty and the procedure for imposing an administrative penalty
pursuant to this subdivision.
   (g) For purposes of this section, "new tire" means a pneumatic or
solid tire intended for use with on-road 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, 2015   December 31, 2023  , and as of
that date is repealed, unless a later enacted statute, that is
enacted before January 1, 2015   December 31,
2023  , deletes or extends that date.
  SEC. 27.    Section 42885   of the  
Public Resources Code   , as added by Chapter 707 of the
Statutes of 2004, is amended to read: 
   42885.  (a) For purposes of this section, "California tire fee"
means the fee imposed pursuant to this section.
   (b) (1) Every person who purchases a new tire, as defined in
subdivision (g), shall pay a California tire fee of seventy-five
cents ($0.75) per tire.
   (2) The retail seller shall charge the retail purchaser the amount
of the California tire fee as a charge that is separate from, and
not included in, any other fee, charge, or other amount paid by the
retail purchaser.
   (3) The retail seller shall collect the California tire fee from
the retail purchaser at the time of sale and may retain 3 percent of
the fee as reimbursement for any costs associated with the collection
of the fee. The retail seller shall remit the remainder to the state
on a quarterly schedule for deposit in the California Tire Recycling
Management Fund, which is hereby created in the State Treasury.
   (c) The board, or its agent authorized pursuant to Section 42882,
shall be reimbursed for its costs of collection, auditing, and making
refunds associated with the California Tire Recycling Management
Fund, but not to exceed 3 percent of the total annual revenue
deposited in the fund.
   (d) The California tire fee imposed pursuant to subdivision (a)
shall be separately stated by the retail seller on the invoice given
to the customer at the time of sale. Any other disposal or
transaction fee charged by the retail seller related to the tire
purchase shall be identified separately from the California tire fee.

   (e) Any person or business who knowingly, or with reckless
disregard, makes any false statement or representation in any
document used to comply with this section is liable for a civil
penalty for each violation or, for continuing violations, for each
day that the violation continues. Liability under this section may be
imposed in a civil action and shall not exceed twenty-five thousand
dollars ($25,000) for each violation.
   (f) In addition to the civil penalty that may be imposed pursuant
to subdivision (e), the board may impose an administrative penalty in
an amount not to exceed five thousand dollars ($5,000) for each
violation of a separate provision or, for continuing violations, for
each day that the violation continues, on any person who
intentionally or negligently violates any permit, rule, regulation,
standard, or requirement issued or adopted pursuant to this chapter.
The board shall adopt regulations that specify the amount of the
administrative penalty and the procedure for imposing an
administrative penalty pursuant to this subdivision.
   (g) For purposes of this section, "new tire" means a pneumatic or
solid tire intended for use with on-road 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,
2015   December 31, 2023  .
   SEC. 28.    Section   42889 of the 
 Public Resources Code   , as amended by Section 3 of
Chapter 333 of the Statutes of 2009, is amended to read: 
   42889.  (a) Commencing January 1, 2005, of the moneys collected
pursuant to Section 42885, an amount equal to seventy-five cents
($0.75) per tire on which the fee is imposed shall be transferred by
the State Board of Equalization to the Air Pollution Control Fund.
The state board shall expend those moneys, or allocate those moneys
to the districts for expenditure, to fund programs and projects that
mitigate or remediate air pollution caused by tires in the state, to
the extent that the state board or the applicable district determines
that the program or project remediates air pollution harms created
by tires upon which the fee described in Section 42885 is imposed.
   (b) The remaining moneys collected pursuant to Section 42885 shall
be used to fund the waste tire program, and shall be appropriated to
the board in the annual Budget Act in a manner consistent with the
five-year plan adopted and updated by the board. These moneys shall
be expended for the payment of refunds under this chapter and for the
following purposes:
   (1) To pay the administrative overhead cost of this chapter, not
to exceed 6 percent of the total revenue deposited in the fund
annually, or an amount otherwise specified in the annual Budget Act.
   (2) To pay the costs of administration associated with collection,
making refunds, and auditing revenues in the fund, not to exceed 3
percent of the total revenue deposited in the fund, as provided in
subdivision (c) of Section 42885.
   (3) To pay the costs associated with operating the tire recycling
program specified in Article 3 (commencing with Section 42870).
   (4) To pay the costs associated with the development and
enforcement of regulations relating to the storage of waste tires and
used tires. The board shall consider designating a city, county, or
city and county as the enforcement authority of regulations relating
to the storage of waste tires and used tires, as provided in
subdivision (c) of Section 42850, and regulations relating to the
hauling of waste and used tires, as provided in subdivision (b) of
Section 42963. If the board designates a local entity for that
purpose, the board shall provide sufficient, stable, and
noncompetitive funding to that entity for that purpose, based on
available resources, as provided in the five-year plan adopted and
updated as provided in subdivision (a) of Section 42885.5. The board
may consider and create, as appropriate, financial incentives for
citizens who report the illegal hauling or disposal of waste tires as
a means of enhancing local and statewide waste tire and used tire
enforcement programs.
   (5) To pay the costs of cleanup, abatement, removal, or other
remedial action related to waste tire stockpiles throughout the
state, including all approved costs incurred by other public agencies
involved in these activities by contract with the board. Not less
than six million five hundred thousand dollars ($6,500,000) shall be
expended by the board during each of the following fiscal years for
this purpose: 2001-02 to 2006-07, inclusive.
   (6) To make studies and conduct research directed at promoting and
developing alternatives to the landfill disposal of waste tires.
   (7) To assist in developing markets and new technologies for used
tires and waste tires. The board's expenditure of funds for purposes
of this subdivision shall reflect the priorities for waste management
practices specified in subdivision (a) of Section 40051.
   (8) To pay the costs associated with implementing and operating a
waste tire and used tire hauler program and manifest system pursuant
to Chapter 19 (commencing with Section 42950).
   (9) To pay the costs to create and maintain an emergency reserve,
which shall not exceed one million dollars ($1,000,000).
   (10) To pay the costs of cleanup, abatement, or other remedial
action related to the disposal of waste tires in implementing and
operating the Farm and Ranch Solid Waste Cleanup and Abatement Grant
Program established pursuant to Chapter 2.5 (commencing with Section
48100) of Part 7.
   (11) To fund border region activities specified in paragraph (8)
of subdivision (b) of Section 42885.5.
   (c) This section shall remain in effect only until 
January 1, 2015   December 31, 2023  , and as of
that date is repealed, unless a later enacted statute that is enacted
before  January 1, 2015   December 31, 2023
 , deletes or extends that date.
   SEC. 29.    Section   42889 of the 
 Public Resources Code   , as amended by Section 4 of
Chapter 333 of the Statutes of 2009, is amended to read: 
   42889.  Funding for the waste tire program shall be appropriated
to the board in the annual Budget Act. The moneys in the fund shall
be expended for the payment of refunds under this chapter and for the
following purposes:
   (a) To pay the administrative overhead cost of this chapter, not
to exceed 5 percent of the total revenue deposited in the fund
annually, or an amount otherwise specified in the annual Budget Act.
   (b) To pay the costs of administration associated with collection,
making refunds, and auditing revenues in the fund, not to exceed 3
percent of the total revenue deposited in the fund, as provided in
subdivision (b) of Section 42885.
   (c) To pay the costs associated with operating the tire recycling
program specified in Article 3 (commencing with Section 42870).
   (d) To pay the costs associated with the development and
enforcement of regulations relating to the storage of waste tires and
used tires. The board shall consider designating a city, county, or
city and county as the enforcement authority of regulations relating
to the storage of waste tires and used tires, as provided in
subdivision (c) of Section 42850, and regulations relating to the
hauling of waste and used tires, as provided in subdivision (b) of
Section 42963. If the board designates a local entity for that
purpose, the board shall provide sufficient, stable, and
noncompetitive funding to that entity for that purpose, based on
available resources, as provided in the five-year plan adopted and
updated as provided in subdivision (a) of Section 42885.5. The board
may consider and create, as appropriate, financial incentives for
citizens who report the illegal hauling or disposal of waste tires as
a means of enhancing local and statewide waste tire and used tire
enforcement programs.
   (e) To pay the costs of cleanup, abatement, removal, or other
remedial action related to waste tire stockpiles throughout the
state, including all approved costs incurred by other public agencies
involved in these activities by contract with the board. Not less
than six million five hundred thousand dollars ($6,500,000) shall be
expended by the board during each of the following fiscal years for
this purpose: 2001-02 to 2006-07, inclusive.
   (f) To fund border region activities specified in paragraph (8) of
subdivision (b) of Section 42885.5.
   (g) This section shall become operative on  January 1,
2015   December 31, 2023  .
                                                     SEC. 30.
   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, 2016   December 31, 2023  , and as of
that date is repealed, unless a later enacted statute, that is
enacted before  January 1, 2016   December 31,
2023  , deletes or extends that date.
   SEC. 31.    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, 2015   December 31, 2023 , and as of
that date is repealed, unless a later enacted statute, that is
enacted before  January 1, 2015   December 31,
2023  , deletes or extends that date.
   SEC. 32.    Section 9250.2 of the   Vehicle
Code   , as added by 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 either of the following amounts,
whichever is applicable, as specified by the governing body of that
district:
   (1) For each motor vehicle registered in that district whose
registration expires on or after December 31, 1989, and prior to
December 31, 1990, two dollars ($2).
   (2) For each motor vehicle registered in that district whose
registration expires on or after December 31, 1990, not to exceed
four dollars ($4).
   (b) This section shall become operative on  January 1,
2015   December 31, 2023  .
   SEC. 33.    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 50 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, 2016   December 31, 2023  , and as of
that date is repealed, unless a later enacted statute, that is
enacted before  January 1, 2016   December 31,
2023  , deletes or extends that date.
   SEC. 34.    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, 2016   December 31, 2023  , and as of
that date is repealed, unless a later enacted statute, that is
enacted before  January 1, 2016   December 31,
  2023  , deletes or extends that date.