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AB-794 Air pollution: purchase of new drayage and short-haul trucks: incentive programs: eligibility: labor and workforce standards.(2021-2022)

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Date Published: 07/12/2021 10:00 AM
AB794:v94#DOCUMENT

Amended  IN  Senate  July 12, 2021
Amended  IN  Assembly  May 27, 2021
Amended  IN  Assembly  May 24, 2021
Amended  IN  Assembly  April 28, 2021
Amended  IN  Assembly  March 25, 2021

CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Assembly Bill
No. 794


Introduced by Assembly Member Carrillo
(Coauthor: Assembly Member Ward)

February 16, 2021


An act to amend Section 16428.9 of the Government Code, and to amend Sections 39712, 43015, 44274, and 44282 of, to add Sections 39501, 39602.6, and 44295.5 to, and to add Chapter 3.6 (commencing with Section 39680) to Part 2 of Division 26 of, the Health and Safety Code, relating to air pollution.


LEGISLATIVE COUNSEL'S DIGEST


AB 794, as amended, Carrillo. Air pollution: purchase of new vehicles: drayage and short-haul trucks: incentive programs: eligibility: labor and workforce standards.
Existing law establishes various incentive programs that are administered or funded by the State Air Resources Board to provide financial assistance for the purchase of vehicles by individuals and fleet purchasers.
This bill would establish specified labor and workforce standards that a fleet purchaser would be required to meet in order to be eligible to receive incentives for new vehicles drayage and short-haul trucks under the incentive programs. The bill would state the intent of the Legislature to establish labor and workforce standards for clean vehicle incentive programs for manufacturers of motor vehicles to provide incentives for domestic job creation while rewarding high-quality jobs and extending economic opportunities to disadvantaged communities.
The bill would require the state board, by January 1, 2023, to adopt operational guidelines for the implementation of the above requirements. The bill would require the state board, as a part of the development of the guidelines, to determine if there are constraints to the implementation of the requirements of the bill, would authorize the state board to delay or suspend the implementation of requirements that are not feasible, and would require the state board to reevaluate the delayed or suspended requirements, as provided.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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


SECTION 1.

 Section 16428.9 of the Government Code is amended to read:

16428.9.
 (a) Before expending any moneys appropriated to it by the Legislature from the fund, a state agency shall prepare a record consisting of all of the following:
(1) A description of each expenditure proposed to be made by the state agency pursuant to the appropriation.
(2) A description of how a proposed expenditure will further the regulatory purposes of Division 25.5 (commencing with Section 38500) of the Health and Safety Code, including, but not limited to, the limit established under Part 3 (commencing with Section 38550) and other applicable requirements of law.
(3) A description of how a proposed expenditure will contribute to achieving and maintaining greenhouse gas emission reductions pursuant to Division 25.5 (commencing with Section 38500) of the Health and Safety Code.
(4) A description of how the state agency considered the applicability and feasibility of other nongreenhouse gas reduction objectives of Division 25.5 (commencing with Section 38500) of the Health and Safety Code.
(5) A description of how the state agency will document the result achieved from the expenditure to comply with Division 25.5 (commencing with Section 35800) of the Health and Safety Code.
(6) A description of how grant, loan, voucher, or other incentive programs for purchase of new vehicles drayage and short-haul trucks that receive moneys from the fund are implementing the labor and workforce standards required by Chapter 3.6 (commencing with Section 39680) of Part 2 of Division 26 of the Health and Safety Code, as applicable.
(b) The State Air Resources Board shall develop guidance on reporting and quantification methods for all state agencies that receive appropriations from the fund to ensure the requirements of this section are met. Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 does not apply to the procedures developed pursuant to this subdivision.
(c) Nothing in this section alters, amends, or otherwise modifies in any manner Division 25.5 (commencing with Section 35800) of the Health and Safety Code, including the authority of the State Air Resources Board to adopt and implement a fee pursuant to that division.
(d) If any expenditure of moneys from the fund for any measure or project is determined by a court to be inconsistent with law, the funding for the remaining measures or projects shall be severable and shall not be affected.

SEC. 2.

 Section 39501 is added to the Health and Safety Code, to read:

39501.
 It is the intent of the Legislature that the state board maximize economic cobenefits by conditioning eligibility to participate in grant, loan, voucher, or other incentive programs to purchase new vehicles drayage and short-haul trucks on compliance with the labor and workforce standards required by Chapter 3.6 (commencing with Section 39680).

SEC. 3.

 Section 39602.6 is added to the Health and Safety Code, to read:

39602.6.
 The state board shall condition eligibility to participate in grant, loan, voucher, or other incentive programs to purchase new vehicles drayage and short-haul trucks on compliance with the labor and workforce standards required by Chapter 3.6 (commencing with Section 39680), as applicable.

SEC. 4.

 Chapter 3.6 (commencing with Section 39680) is added to Part 2 of Division 26 of the Health and Safety Code, to read:
CHAPTER  3.6. Labor and Workforce Standards
Article  1. General Provisions and Definitions

39680.
 (a) The Legislature finds and declares all of the following:
(1) (A) California has established itself as a leader in national and international energy conservation and environmental stewardship.
(B) The California Global Warming Solutions Act of 2006 (Division 25.5 (commencing with Section 38500)) charges the state board as the lead agency to monitor and regulate sources of emissions of greenhouse gases. That act has set a goal of reducing greenhouse gas emissions to 40 percent below the 1990 level by 2030. That act also authorizes the state board to develop market-based mechanisms, including the cap-and-trade system, which generates revenue for the Greenhouse Gas Reduction Fund, and other transactional mechanisms.
(C) The state board, when expending moneys from the Greenhouse Gas Reduction Fund, is required to maximize economic and environmental cobenefits, including job-related cobenefits, as California builds a low-carbon economy.
(D) However, the charge to seek job-related benefits is not required within any timeframe, nor is there any legislative guidance with respect to specific standards or implementation mechanisms.
(E) While the charge to develop job-related cobenefits is explicit for the Greenhouse Gas Reduction Fund, it is implied rather than explicit for other clean air funds that the state board administers.
(2) To clarify the need for job-related cobenefits, Chapter 135 of the Statutes of 2017 required the California Workforce Development Board, in consultation with the state board, to submit a report to the Legislature. The California Workforce Development Board commissioned the Center for Labor Research and Education at the University of California, Berkeley, to prepare the report. Published in June 2020, the report is entitled, Putting California on the High Road: A Jobs and Climate Action Plan for 2030 (2020 Action Plan).
(3) A study by the University of California shows that fleet purchasers have a significant disparity of compliance with clean vehicle regulations. While 83 percent of large firms that employ drivers comply, only 61 percent of contractors comply. Noncompliant trucks operated by contractors represent 44 percent of all noncompliant trucks, a significantly greater share than their share of all operating trucks. The study finds that many of the noncompliant contractors are actually misclassified employees who do not have the financial resources to comply with clean-vehicle regulations. Many companies take advantage of the fleet purchaser incentives but then pass on the cost of vehicles, maintenance, and upkeep to misclassified drivers who do not have the funds or ability to maintain those vehicles at a level that maximizes their environmental benefits. For example, in drayage, an investigation by USA Today found that “port trucking companies in Southern California have spent the past decade forcing drivers to finance their own trucks by taking on debt they could not afford.” Drivers at dozens of companies “were handed a lease-to-own contract by their employer and given a choice: Sign immediately or be fired.” Such sublease arrangements directly impede the state’s ability to advance its environmental stewardship. Many contractors have later filed for bankruptcy, nullifying the benefit from the state’s climate investments.
(4) The 2020 Action Plan creates a “high road framework” based on demand-side strategies and supply-side strategies. The Action Plan does all of the following:
(A) Stresses that “[d]emand-side strategies affect the demand for labor, including the kinds of jobs that are generated, the skills that are needed, the wages and benefits employers provide, and who employers hire.”
(B) Emphasizes the importance of market participation through incentive programs: “[a]gencies responsible for implementing climate investments and other measures play a key role here because they direct public investment and influence private investments in lower carbon economic activity.”
(C) Proposes workforce standards that in general terms do all of the following:
(i) Create high-quality jobs.
(ii) Prepare workers with the skills needed to adapt to and master new zero- and low-emission technologies.
(iii) Broaden career opportunities for workers from disadvantaged communities.
(iv) Support workers whose jobs may be at risk.
(D) Identifies industry sectors that pose challenges to attaining clean air objectives and opportunities to incentivize development of high-road jobs and working conditions. Among these are vehicle manufacturing and trucking, both of which the plan faults as high-risk subsectors for labor abuses, such as misclassification, unpaid wages, and denial of unemployment benefits, workers’ compensation, or disability benefits.
(b) In enacting this chapter, it is the intent of the Legislature to do all of the following:
(1) Implement the 2020 Action Plan’s high-road recommendations that would apply to crucial windows for high-road job development and working conditions. For the trucking industry, the window is a longer span of years immediately after a fleet purchaser receives the incentive when the vehicle is placed in service.
(2) Use market participation to increase demand for clean air vehicles through incentive programs to attain equity goals for jobs in disadvantaged communities and reward companies that respect worker rights. In so doing, the Legislature will require the state board to develop labor and workforce standards to determine eligibility for programs that provide clean air incentives for fleet purchasers of new vehicles that operate drayage and short-haul trucking in California.
(3) Maximize the environmental benefits of its investments by ensuring that recipients of fleet purchaser subsidies operate the equipment in compliance with all state laws rather than taking advantage of state incentives and then selling or otherwise transferring the equipment in question.
(4) Clarify that the state board’s authority to maximize job-related cobenefits applies to all of the incentive funds and programs that it administers.
(5) Collaborate with the Labor and Workforce Development Agency, including the California Workforce Development Board and the Labor Commissioner, to develop guidelines and implement contract remedies for labor and workforce standards that include repayment of incentive funds and public disclosure of labor and workforce data.
(6) Expand upon the state board’s current approach of using multiyear incentive contracts to clearly set the conditions for attaining the state’s clean air objectives with workforce cobenefits. Relevant conditions already in place for heavy-duty trucks include compliance with state law and contract terms for multiyear ownership and control of the equipment.

39681.
 This chapter establishes labor and workforce standards as a cobenefit of incentive programs for the purchase of new vehicles drayage and short-haul trucks that are based on clean air standards. To be eligible for an incentive, the eligible new vehicles shall first meet the clean air standard, and then the fleet purchasers may qualify for the incentive by meeting the labor and workforce standards under this chapter.

39682.
 For purposes of this chapter, the following definitions apply:
(a) “Administering agency” means an agency administering an incentive program subject to this chapter.
(b) “Applicable law violation” means a violation that has a final determination, order, judgment, or award issued against a fleet purchaser of vehicles for engaging in illegal conduct related to the misclassification of employees as independent contractors, including the failure to pay wages, imposing unlawful expenses on employees, failure to remit payroll taxes, and failure to provide workers’ compensation insurance, and that remains unabated or unsatisfied following the period during which an appeal may be made.
(c) “Clean air standards” include the standards that the state board sets to reduce air pollution or reduce emissions of greenhouse gases pursuant to this division or Division 25.5 (commencing with Section 38500).
(d) “Fleet operations” includes, but is not limited to, port drayage service and short-haul transport of goods. The state board may adopt guidance to interpret the scope of these operations to conform with law.
(e) “Incentive” includes a grant, loan, voucher, or other incentive, regardless of the source of revenue that funds the incentive, for the purchase of new motor vehicles.
(f) “Short-haul trucking service” means movement of goods by truck within a 150-air-mile radius of the normal working reporting location while in service within the state.

39683.
 (a) The state board, in consultation with the Labor and Workforce Development Agency, including the California Workforce Development Board and the Labor Commissioner, shall condition eligibility to participate in incentive programs for new vehicle drayage and short-haul trucks purchasing on compliance with the labor and workforce standards described in this chapter.
(b) (1) The state board, in collaboration with the Labor and Workforce Development Agency, including the California Workforce Development Board and the Labor Commissioner, shall develop operational guidelines for applying the standards in this chapter to incentive programs subject to this chapter. In these guidelines, the state board may interpret the scope of applicability, terms of labor and workforce standards, and implementation, consistent with this chapter.
(2) The state board may solicit recommendations regarding implementation and delegate any duties in this chapter to the Labor and Workforce Development Agency.

39683.5.
 (a) The state board shall provide an opportunity for public input before finalizing the operational guidelines developed pursuant to this chapter.
(b) Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code does not apply to the adoption of the operational guidelines.
(c) The state board shall adopt the operational guidelines on or before January 1, 2023, after consultation pursuant to subdivision (b) of Section 39683 and after receiving public input pursuant to subdivision (a).
(d) (1) As part of its operational guidelines development process, if the state board determines there are constraints to applying the requirements of Article 3 2 (commencing with Section 39695) 39690) to each incentive program that is subject to this chapter, the state board may delay or suspend the implementation of the requirements of this chapter that are not feasible and shall reevaluate the feasibility of implementing those requirements in future operational guidelines.
(2) In determining whether there are any constraints to implementation, the state board may consider consistency with the statutory goals of the incentive program to reduce air pollution or emissions of greenhouse gases and state board’s capacity to enforce the applicable labor and workforce standards.
(3) If the state board determines that there are constraints preventing the application of the requirements of Article 3 2 (commencing with Section 39695) 39690) to an incentive program, the state board shall notify the Legislature, on or before January 1, 2023, with a written report, submitted in accordance with Section 9795 of the Government Code, of findings and constraints, and possible remedies that would eliminate the constraints in question.

39684.
 This chapter applies to all incentive programs for that support the purchase of new vehicles drayage and short-haul trucks and that receive funding from, or are administered by, the state board, including, but not limited to, as applicable, including all of the following:
(a) An incentive program funded by a fund, including, but not limited to, all any of the following funds:
(1) The Greenhouse Gas Reduction Fund.
(2) The Air Quality Improvement Fund.
(3) The Carl Moyer Memorial Air Standards Attainment Trust Fund.
(4) The Air Pollution Control Fund.
(b) An incentive program funded wholly or partially by the state board, including, but not limited to, all of the following:
(1) The Truck Loan Assistance Program under subdivision (c) of Section 44274.
(2) A local or regional incentive program.
(3) A public-private partnership.
(c) An incentive program funded by a settlement fund under the state board’s jurisdiction.

39685.
 This chapter establishes baseline standards, job quality standards, and a structure for full or partial eligibility to participate in incentive programs for the purchase of new vehicles. drayage or short-haul trucks. This chapter applies the standards to fleet purchasers of new vehicles for drayage and short-haul trucking services within the state. The standards do not apply to other fleet purchases for operations outside of this scope.

39686.
 The state board or an administering agency, in collaboration with the Labor Commissioner, shall enforce the standards set forth in Article 3 2 (commencing with Section 39695). 39690).

39687.
 (a) The Labor Commissioner, at the request of the administering agency or the state board, may investigate an allegation regarding a violation of the standards set forth in Article 3 2 (commencing with Section 39695). 39690).
(b) Unless contrary to Section 19542 of the Revenue and Taxation Code, and notwithstanding any other law or effort to maintain their secrecy, the data and certifications disclosed by a fleet purchaser pursuant to Article 3 2 (commencing with Section 39695) 39690) are public records that may be disclosed to the public and are not trade secrets.
(c) The state board shall develop an internet website that displays public information from manufacturers or fleet purchasers participating in incentive programs that are subject to this chapter regarding their disclosures and certifications of compliance with the labor and workforce standards.

39687.5.
 (a) In addition to requiring accurate certification of compliance and disclosure of data, the state board or the administering agency shall require that fleet purchasers receiving an incentive sign contracts conditioning any incentive received on compliance with this chapter.
(b) The contract entered into pursuant to subdivision (a) shall state a timeframe for fleet purchasers’ compliance with standards under this chapter, that includes the application process and a multiyear period after receiving the incentive of at least three years or the duration of the loan, grant, or incentive received, whichever is longer.

39688.

A fleet purchaser receiving an incentive from an incentive program subject to this chapter shall comply with the labor and workforce standards set forth in Article 3 (commencing with Section 39695).

39688.5.39688.
 (a) If, at any point during the term of the contract entered into pursuant to Section 39687.5, an administering agency, the state board, or the Labor Commissioner finds that a fleet purchaser that received an incentive was in violation of the standards set forth in Article 3 2 (commencing with Section 39695) 39690) during any portion of the term of the contract entered into pursuant to Section 39687.5, or that the fleet purchaser failed to make correct and accurate disclosures required under Section 39697, 39692, the fleet purchaser is in breach of the contract and shall be liable for the repayment of any incentive for which the contract entered into under Section 39687.5 was still in effect during the time period that the fleet purchaser was out of compliance. The time period shall include the claim period of any judgment issued against the fleet purchaser for an applicable law violation, along with any other period identified by the administering agency, the state board, or the Labor Commissioner.
(b) The contract remedies specified in this section shall also bind the fleet purchaser’s successors or assignees. The Labor Commissioner, the state board, or the agency administering the incentive program may require that a successor or assignee repay any incentives received by fleet purchasers.

39688.6.39688.5.
 (a) The state board, in collaboration with the Labor and Workforce Development Agency, shall implement a process for the appeal of violations of this chapter.
(b) The state board, in collaboration with the Labor and Workforce Development Agency, shall implement a process for purposes of reinstating eligibility for fleet purchasers for participation in an incentive program.

39689.
 The provisions of this chapter are severable. If any provision of this chapter or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.

2.Vehicle Manufacturing Labor and Workforce Standards
39690.

It is the intent of the Legislature, in subsequent amendments to this chapter, to establish labor and workforce standards for clean vehicle incentive programs for manufacturers of motor vehicles to provide incentives for domestic job creation while rewarding high-quality jobs and extending economic opportunity to disadvantaged communities.

3.Fleet Purchaser Labor and Workforce Standards
Article  2. Fleet Purchaser Labor and Workforce Standards

39695.39690.
 (a) A fleet purchaser of new vehicles drayage and short-haul trucks is eligible to participate in an incentive program subject to this chapter if it can demonstrate that it does not have any applicable law violation at the time of applying for the incentive.
(b) A fleet purchaser that is on the list maintained by the Division of Labor Standards Enforcement under Section 2810.4 of the Labor Code is not eligible to participate in an incentive program subject to this chapter.
(c) The state board may accept information from any person regarding a fleet purchaser’s eligibility for the incentive program.
(d) The state board shall affirmatively collaborate with the Department of Industrial Relations or the Labor Commissioner to identify fleet purchasers that have applicable law violations.

39696.39691.
 (a) A fleet purchaser shall be in breach of any contract entered pursuant to Section 39687.5 that is in effect and shall be out of compliance with this section if, during the term of the contract, the fleet purchaser uses a vehicle in its operations for which it has previously received an incentive and the vehicle is not under the full ownership and operational control of the fleet purchaser.
(b) A fleet purchaser shall retain direct control over the manner and means for performance of any individual or entity using or driving the vehicle.

39697.39692.
 (a) (1) Upon application for an incentive, a fleet purchaser shall certify compliance with Section 39695 39690 and make the disclosure required under this section.
(2) A fleet purchaser that receives an incentive as a grant, loan, or other form of agreement shall, on a yearly basis, for the life of the contract entered into pursuant to Section 39687.5, certify compliance with Sections 39695 and 39696, 39690 and 39691, and shall make the applicable disclosures under this section.
(b) As required under subdivision (a), a fleet purchaser shall disclose or provide to the administering agency and to the state board all of the following:
(1) A copy of any judgments, rulings, citations, decisions, orders, or awards finding that the fleet purchaser or any parent company or subsidiary or other commonly controlled entity has applicable law violations as of the date of application or disclosure, whichever is applicable.
(2) A list of all operating authorities under which the vehicle purchased will be or was operated.
(3) A certification that the fleet purchaser maintained control of the individuals operating the vehicle, and maintained control of the vehicle.
(4) A certification that the fleet purchaser has completed all required maintenance and upkeep on the vehicle purchased with the incentive.

SEC. 5.

 Section 39712 of the Health and Safety Code is amended to read:

39712.
 (a) (1) It is the intent of the Legislature that moneys shall be appropriated from the fund only in a manner consistent with the requirements of this chapter and Article 9.7 (commencing with Section 16428.8) of Chapter 2 of Part 2 of Division 4 of Title 2 of the Government Code.
(2) The state shall not approve allocations for a measure or program using moneys appropriated from the fund except after determining, based on the available evidence, that the use of those moneys furthers the regulatory purposes of Division 25.5 (commencing with Section 38500) and is consistent with law. If any expenditure of moneys from the fund for any measure or project is determined by a court to be inconsistent with law, the allocations for the remaining measures or projects shall be severable and shall not be affected.
(3) An eligible expenditure of moneys appropriated to the Department of Community Services and Development may occur over multiple fiscal years and the department may make multiyear funding commitments over a period of more than one fiscal year.
(b) Moneys shall be used to facilitate the achievement of reductions of greenhouse gas emissions in this state consistent with Division 25.5 (commencing with Section 38500) and, where applicable and to the extent feasible:
(1) Maximize economic, environmental, and public health benefits to the state.
(2) Foster job creation by promoting in-state greenhouse gas emissions reduction projects carried out by California workers and businesses.
(3) Complement efforts to improve air quality.
(4) Direct investment toward the most disadvantaged communities and households in the state.
(5) Provide opportunities for businesses, public agencies, Native American tribes in the state, nonprofits, and other community institutions to participate in and benefit from statewide efforts to reduce greenhouse gas emissions.
(6) Lessen the impacts and effects of climate change on the state’s communities, economy, and environment.
(c) Moneys appropriated from the fund may be allocated, consistent with subdivision (a), for the purpose of reducing greenhouse gas emissions in this state through investments that may include, but are not limited to, any of the following:
(1) Funding to reduce greenhouse gas emissions through energy efficiency, clean and renewable energy generation, distributed renewable energy generation, transmission and storage, and other related actions, including, but not limited to, at public universities, state and local public buildings, and industrial and manufacturing facilities.
(2) Funding to reduce greenhouse gas emissions through the development of state‑of‑the‑art systems to move goods and freight, advanced technology vehicles and vehicle infrastructure, advanced biofuels, and low‑carbon and efficient public transportation.
(3) Funding to reduce greenhouse gas emissions associated with water use and supply, land and natural resource conservation and management, forestry, and sustainable agriculture.
(4) Funding to reduce greenhouse gas emissions through strategic planning and development of sustainable infrastructure projects, including, but not limited to, transportation and housing.
(5) Funding to reduce greenhouse gas emissions through increased in-state diversion of municipal solid waste from disposal through waste reduction, diversion, and reuse.
(6) Funding to reduce greenhouse gas emissions through investments in programs implemented by local and regional agencies, local and regional collaboratives, Native American tribes in the state, and nonprofit organizations coordinating with local governments.
(7) Funding research, development, and deployment of innovative technologies, measures, and practices related to programs and projects funded pursuant to this chapter.
(d) Moneys directed to grant, loan, voucher, or other incentive programs shall be conditioned on the requirements of Chapter 3.6 (commencing with Section 39680), as applicable.

SEC. 6.

 Section 43015 of the Health and Safety Code is amended to read:

43015.
 (a) The Air Pollution Control Fund is continued in existence in the State Treasury. Upon appropriation by the Legislature, the money in the fund shall be available to the state board to carry out its duties and functions.
(b) Projects using grants, loans, vouchers, or other incentives funded in part or whole by the Air Pollution Control Fund shall be conditioned on the requirements of Chapter 3.6 (commencing with Section 39680) of Part 2, as applicable. The state board may include in an existing report its description of how projects funded by the Air Pollution Control Fund are implementing the labor and workforce standards described in Chapter 3.6 (commencing with Section 39680) of Part 2, as applicable.

SEC. 7.

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

44274.
 (a) The Air Quality Improvement Program is hereby created. The program shall be administered by the state board, in consultation with the districts. The state board shall develop guidelines to implement the program. Prior to the adoption of the guidelines, the state board shall hold at least one public hearing. In addition, the state board shall hold at least three public workshops with at least one workshop in northern California, one in the central valley, and one in southern California. The purpose of the program shall be to fund, upon appropriation by the Legislature, air quality improvement projects relating to fuel and vehicle technologies. The primary purpose of the program shall be to fund projects to reduce criteria air pollutants, improve air quality, and provide funding for research to determine and improve the air quality impacts of alternative transportation fuels and vehicles, vessels, and equipment technologies.
(b) The state board shall provide preference in awarding funding to those projects with higher benefit-cost scores that maximize the purposes and goals of the Air Quality Improvement Program. The state board also may give additional preference based on the following criteria, as applicable, in funding awards to projects:
(1) Proposed or potential reduction of criteria or toxic air pollutants.
(2) Contribution to regional air quality improvement.
(3) Ability to promote the use of clean alternative fuels and vehicle technologies as determined by the state board, in coordination with the commission.
(4) Ability to achieve climate change benefits in addition to criteria pollutant or air toxic emissions reductions.
(5) Ability to support market transformation of California’s vehicle or equipment fleet to utilize low carbon or zero-emission technologies.
(6) Ability to leverage private capital investments.
(c) The program shall be limited to competitive grants, revolving loans, loan guarantees, loans, and other appropriate funding measures that further the purposes of the program. Projects to be funded shall include only the following:
(1) On-road and off-road equipment projects that are cost effective.
(2) Projects that provide mitigation for off-road gasoline exhaust and evaporative emissions.
(3) Projects that provide research to determine the air quality impacts of alternative fuels and projects that study the life-cycle impacts of alternative fuels and conventional fuels, the emissions of biofuel and advanced reformulated gasoline blends, and air pollution improvements and control technologies for use with alternative fuels and vehicles.
(4) Projects that augment the University of California’s agricultural experiment station and cooperative extension programs for research to increase sustainable biofuels production and improve the collection of biomass feedstock.
(5) Incentives for small off-road equipment replacement to encourage consumers to replace internal combustion engine lawn and garden equipment.
(6) Incentives for medium- and heavy-duty vehicles and equipment mitigation, including all of the following:
(A) Lower emission schoolbus programs.
(B) Electric, hybrid, and plug-in hybrid on-road and off-road medium- and heavy-duty equipment.
(C) Regional air quality improvement and attainment programs implemented by the state or districts in the most impacted regions of the state.
(7) Workforce training initiatives related to advanced energy technology designed to reduce air pollution, including state-of-the-art equipment and goods, and new processes and systems. Workforce training initiatives funded shall be broad-based partnerships that leverage other public and private job training programs and resources. These partnerships may include, though are not limited to, employers, labor unions, labor-management partnerships, community organizations, workforce investment boards, postsecondary education providers including community colleges, and economic development agencies.
(8) Incentives to identify and reduce emissions from high-emitting light-duty vehicles.
(d) (1) Beginning January 1, 2011, the state board shall submit to the Legislature a biennial report to evaluate the implementation of the Air Quality Improvement Program established pursuant to this chapter.
(2) The report shall include all of the following:
(A) A list of projects funded by the Air Quality Improvement Account.
(B) The expected benefits of the projects in promoting clean, alternative fuels and vehicle technologies.
(C) Improvement in air quality and public health, greenhouse gas emissions reductions, and the progress made toward achieving these benefits.
(D) The impact of the projects in making progress toward attainment of state and federal air quality standards.
(E) Recommendations for future actions.
(3) The state board may include the information required to be reported pursuant to paragraph (1) in an existing report to the Legislature as the state board deems appropriate. The state board may also include in an existing report the description of how grant, loan, voucher, or other incentive projects that receive moneys from the Air Quality Improvement Fund are implementing the labor and workforce standards required by Chapter 3.6 (commencing with Section 39680) of Part 2, as applicable.
(e) Projects using grants, loans, vouchers, or other incentives funded in part or whole by the Air Quality Improvement Fund shall be conditioned on the requirements of Chapter 3.6 (commencing with Section 39680) of Part 2, as applicable.

SEC. 8.

 Section 44282 of the Health and Safety Code, as amended by Section 9 of Chapter 610 of the Statutes of 2015, is amended to read:

44282.
 The following criteria apply to all projects to be funded through the program except for projects funded through the infrastructure demonstration program and infrastructure projects, pursuant to subdivision (c) of Section 44281 and Section 44284:
(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) Projects using grants, loans, vouchers, or other incentives pursuant to this chapter shall condition eligibility on the requirements of Chapter 3.6 (commencing with Section 39680) of Part 2, as applicable.
(j) This section shall remain in effect only until January 1, 2024, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2024, deletes or extends that date.

SEC. 9.

 Section 44282 of the Health and Safety Code, as amended by Section 22 of Chapter 401 of the Statutes of 2013, is amended to read:

44282.
 The following criteria apply to all projects to be funded through the program except for projects funded through the infrastructure demonstration program:
(a) Except for projects involving marine vessels, 75 percent or more of vehicle miles traveled or hours of operation shall be projected to be in California for at least five years following the grant award. Projects involving marine vessels and engines shall be limited to those that spend enough time operating in California air basins over the lifetime of the project to meet the cost-effectiveness criteria based on NOx reductions in California, as provided in Section 44283.
(b) To be eligible, projects shall meet cost-effectiveness per ton of NOx reduced requirements of Section 44283.
(c) To be eligible, retrofits, repowers, and installation of add-on equipment for covered vehicles shall be performed, or new covered vehicles delivered to the end user, on or after the date the program is implemented.
(d) Retrofit technologies, new engines, and new vehicles shall be certified for sale or under experimental permit for operation in California.
(e) Repower projects that replace older, uncontrolled engines with new, emissions-certified engines or that replace emissions-certified engines with new engines certified to a more stringent NOx emissions standard are approvable subject to the other applicable selection criteria. The state board shall determine appropriate baseline emission levels for the uncontrolled engines being replaced.
(f) Retrofit and add-on equipment projects shall document a NOx emission reduction of at least 25 percent and no increase in particulate emissions compared to the applicable baseline emissions accepted by the state board for that engine year and application. The state board shall determine appropriate baseline emission levels. Acceptable documentation shall be defined by the state board. After study of available emission reduction technologies and after public notice and comment, the state board may revise the minimum percentage NOx reduction criterion for retrofits and add-on equipment provided for in this section to improve the ability of the program to achieve its goals.
(g) (1) For projects involving the purchase of new very low or zero-emission vehicles, engines shall be certified to an optional low NOx emissions standard established by the state board, except as provided for in paragraph (2).
(2) For projects involving the purchase of new very low or zero-emission covered vehicles for which no optional low NOx emission standards are available, documentation shall be provided showing that the low- or zero-emission engine emits not more than 70 percent of the NOx or NOx plus hydrocarbon emissions of a new engine certified to the applicable baseline NOx or NOx plus hydrocarbon emission standard for that engine and meets applicable particulate standards. The state board shall specify the documentation required. If no baseline emission standard exists for new vehicles in a particular category, the state board shall determine an appropriate baseline emission level for comparison.
(h) Projects using grants, loans, vouchers, or other incentives pursuant to this chapter shall condition eligibility on the requirements of Chapter 3.6 (commencing with Section 39680) of Part 2, as applicable.
(i) This section shall become operative on January 1, 2024.

SEC. 10.

 Section 44295.5 is added to the Health and Safety Code, to read:

44295.5.
 Beginning January 1, 2023, any program funded by the Carl Moyer Memorial Air Quality Standards Attainment Program that provides grants, loans, vouchers, or other incentives shall comply with the reporting requirements in Chapter 3.6 (commencing with Section 39680) of Part 2. The state board may include in an existing report its description of how Carl Moyer programs are implementing the labor and workforce standards required by Chapter 3.6 (commencing with Section 39680) of Part 2, as applicable.