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SB-726 Alternative fuel and vehicle technologies: Sustainable Transportation Strategy.(2021-2022)

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Date Published: 04/21/2021 09:00 PM
SB726:v96#DOCUMENT

Amended  IN  Senate  April 21, 2021
Amended  IN  Senate  April 13, 2021
Amended  IN  Senate  March 11, 2021

CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Senate Bill
No. 726


Introduced by Senator Gonzalez
(Principal coauthor: Assembly Member Reyes)

February 19, 2021


An act to amend Sections 44272 and 44272.4 of, and to add Section 43018.4 to, the Health and Safety Code, relating to air pollution.


LEGISLATIVE COUNSEL'S DIGEST


SB 726, as amended, Gonzalez. Alternative fuel and vehicle technologies: transportation sustainability strategy. Sustainable Transportation Strategy.
Existing law designates the State Air Resources Board as the state agency with the primary responsibility for the control of vehicular air pollution and as the state agency charged with monitoring and regulating sources of emissions of greenhouse gases that cause global warming in order to reduce emissions of greenhouse gases. Existing law requires the state board to adopt rules and regulations to achieve the maximum technologically feasible and cost-effective greenhouse gas emissions reductions to ensure that the statewide greenhouse gas emissions are reduced to at least 40% below the statewide greenhouse gas emissions limit, as defined, no later than December 31, 2030. Existing law requires the state board to prepare and approve a scoping plan for achieving the maximum technologically feasible and cost-effective reductions in greenhouse gas emissions and to update the scoping plan at least once every 5 years. Existing law requires the state board, no later than January 1, 2021, and at least every 5 years thereafter, in consultation with specified state agencies, to update its 2016 mobile source strategy to include a comprehensive strategy for the deployment of medium- and heavy-duty vehicles in the state, as specified.
This bill would require the state board and the State Energy Resources Conservation and Development Commission, in coordination with specified state agencies, to jointly develop develop, no later than January 1, 2024, a comprehensive transportation sustainability strategy. The bill would require the strategy to be adopted by state agencies identified in the strategy. strategy to be known as the Sustainable Transportation Strategy. The bill would require the strategy to identify overall greenhouse gas emissions reductions goals and criteria pollutant reduction goals for the transportation sector, and to identify the sustainable transportation goals and programs that are intended to reduce emissions in the transportation sector to achieve those emissions reductions goals. The bill would require the strategy to develop deployment goals for each sustainable transportation goal and program identified in the strategy and would require specified state agencies to adopt those deployment goals. The bill would require the state board, as part of the 2026 update to the mobile source strategy, to consider the Sustainable Transportation Strategy and to include any portion of the Sustainable Transportation Strategy in the mobile source strategy. The bill would require, as part of the 2022 2027 update of the scoping plan, the state board to set a consider the overall greenhouse gas emissions reduction target goal for the whole transportation sector. sector identified in the Sustainable Transportation Strategy. The bill would require the Governor to identify and appoint one key lead agency to steer the coordination of zero-emission vehicle deployment across state agencies and to implement the zero-emission vehicle component of the strategy developed by the state board and commission. Sustainable Transportation Strategy.
Existing law establishes the Alternative and Renewable Fuel and Vehicle Technology Program, administered by the State Energy Resources Conservation and Development Commission, to provide funding to certain entities to develop and deploy innovative technologies that transform California’s fuel and vehicle types to help attain the state’s climate change policies. Existing law requires the commission to give preference to those projects that maximize the goals of the program based on specified criteria and to fund specified eligible projects, including, among others, alternative and renewable fuel projects to develop and improve alternative and renewable low-carbon fuels. Existing law creates the Alternative and Renewable Fuel and Vehicle Technology Fund, to be administered by the commission, and requires the moneys in the fund, upon appropriation by the Legislature, to be expended by the commission to implement the program.
This bill would revise and recast the program to expand the purpose of the program to include developing and deploying innovative technologies that transform California’s fuel and vehicle types to help reduce criteria air pollutants and air toxics. The bill would no longer require the commission to provide certain project preferences and to additionally require the commission to provide preference to projects that meet certain other criteria, including to a project that has the ability to provide the advanced vehicle infrastructure needed to support the zero-emission and alternative-fueled vehicle deployment to meet the state’s climate goals. The bill would revise the list of projects that the commission is required to make eligible for funding to include, among others, medium- and heavy-duty vehicle infrastructure research, prototype, pilot, demonstration, planning and technical assistance, and deployment projects that reduce or eliminate emissions from fleets in the goods movement and movement, public transit transit, and agriculture sectors. The bill also would require projects on the eligibility list to receive priority for funding under the program. The bill would change the list of projects required to be eligible for funding into a list of projects that the commission would be authorized to make eligible for funding, as specified. The bill would require the commission to expend at least 50% of the moneys appropriated to the program for projects that benefit low-income and disadvantaged communities.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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


SECTION 1.

 The Legislature finds and declares all of the following:
(a) The transportation sector is a major emitter of criteria air pollutants and greenhouse gases that drive climate change.
(b) Air pollutants that result from transportation emissions are harmful to human health. Moreover, the impact of this pollution falls disproportionately on communities of color. In that regard, a study from the Union of Concerned Scientists has found that, on average, African American, Latino, and Asian Californians are exposed to dangerous particulate matter exhaust from cars and trucks at levels of 43–21 percent higher than white White Californians.
(c) The transportation sector is the biggest contributor to greenhouse gas emissions. Tailpipe emissions from the transportation sector accounts for over 40 percent of all greenhouse gas emissions statewide.
(d) Californians are experiencing the impacts of climate change. These impacts include wildfires, intense storms, flooding, heat waves, hazardous air quality, and drought, and will worsen. Urgent action is necessary to limit the disruption and cost to Californians and the California economy.
(e) Governor Jerry Brown and Governor Gavin Newsom have issued executive orders establishing ambitious goals for zero-emission vehicle deployment, including having 5,000,000 zero-emission vehicles (ZEVs) on the road by 2030 and, most recently, a goal that 100 percent of in-state sales of new passenger cars and trucks will be zero emission by 2035, and that 100 percent of medium- and heavy-duty vehicles in California be zero-emission by 2045 where feasible.
(f) California has created numerous programs to reduce the greenhouse gas and criteria pollutant emissions of the transportation sector that are administered by many different agencies, including, but not limited to, the State Air Resources Board, the Public Utilities Commission, the State Energy Resources Conservation and Development Commission, the Governor’s Office of Business and Economic Development, the Department of Transportation, and the Department of General Services.
(g) Funding for these programs comes from many sources, including revenues from the California Greenhouse Gas Cap-and-Trade Program (Article 5 (commencing with Section 95801) of the Title 17 of the California Code of Regulations), funding from the Low Carbon Fuel Standard program (Subarticle 7 (commencing with Section 95480) of Title 17 of the California Code of Regulations), revenues raised from the Road Repair and Accountability Act of 2017 (Chapter 5 of the Statutes of 2017), and various other taxes and fees established in Assembly Bill 118 (Chapter 750 of the Statutes of 2007) and reestablished in Assembly Bill 8 (Chapter 401 of the Statutes of 2013).
(h) Meeting the state’s ZEV goals will require innovation and effort from companies in California, the United States, and around the world. Many global automakers have been developing and are accelerating the development of ZEV vehicles. But public subsidies will be necessary for some period of time, especially as the state ensures that its transportation sustainability efforts reach all ethnic, geographic, and demographic groups.
(i) Some studies suggest that light-duty passenger electric vehicles will be cost comparable to traditional passenger vehicles in just a few years. Cost comparability for medium- and heavy-duty vehicles will take significantly longer.
(j) Medium- and heavy-duty and off-road mobile sources are responsible for 13 percent of greenhouse gas emissions in the state and 67 percent of NOx emissions. Light-duty sources emit 28 percent of greenhouse gas emissions in the state and 13 percent of NOx emissions.
(k) Current funding levels for the state’s transportation sustainability programs were not set to meet its current ZEV deployment goals. As an example, the funding levels for the Alternative and Renewable Fuel and Vehicle Technology Program were established in 2007, well before the current ZEV goals were established.
(l) The amount of public subsidy needed to meet the current ZEV goals is unknown. The state’s clean transportation programs should raise sufficient funding so that, in conjunction with federal subsidy programs, private sector investment, and other state and federal regulatory actions, the state will achieve its goals.

SEC. 2.

 Section 43018.4 is added to the Health and Safety Code, to read:

43018.4.
 (a) (1) (A) The state board and the State Energy Resources Conservation and Development Commission, in coordination with the Public Utilities Commission, the Governor’s Office of Business and Economic Development, the Department of Transportation, the California Transportation Commission, and the Department of General Services, shall jointly develop a comprehensive transportation sustainability strategy. strategy, which shall be known as the Sustainable Transportation Strategy.

(2)

(B) The strategy shall be developed in consultation with air pollution control or air quality management districts, metropolitan planning organizations, and other relevant local entities.
(C) The purpose of the strategy shall be to identify the plans, actions, and required funding needed to reach the state’s transportation greenhouse gas emissions and criteria pollutant reduction goals in a cost-effective and efficient manner.
(D) The strategy shall identify overall greenhouse gas emissions reductions goals and criteria pollutant reduction goals for the transportation sector, and shall identify the sustainable transportation goals and programs that are intended to reduce emissions in the transportation sector to achieve those emissions reductions goals. These sustainable transportation goals and programs shall include, but not are limited to, zero-emission and alternative fuel vehicles, transit, active transportation, vehicle pooling, and reduction of vehicle miles traveled initiatives.
(2) The strategy shall do all of the following:
(A) Describe the current state of deployment for each sustainable transportation goal and program identified pursuant to subparagraph (D) of paragraph (1), including mobile source and related infrastructure.
(B) Develop deployment goals for each sustainable transportation goal and program identified pursuant to subparagraph (D) of paragraph (1) so that the success of that transportation goal or program can be measured. These deployment goals shall be developed to meet the overall transportation sector emissions reductions goals identified pursuant to paragraph (1).
(C) Identify any existing barriers to implementing the sustainable transportation goals and programs identified pursuant to subparagraph (D) of paragraph (1), and propose strategies to deploying those transportation goals and programs, specifically by considering deployment strategies in low-income, disadvantaged, and disproportionately emissions overburdened communities.
(D) Identify the programs, funding sources and levels, and appropriate regulatory mandates for deployment of each sustainable transportation goal and program identified pursuant to subparagraph (D) of paragraph (1), and which, through their collective implementation, would result in meeting overall transportation sector emission reduction goals identified pursuant to subparagraph (D) of paragraph (1).

(3)The strategy shall consider the role of zero-emission vehicles in reaching emission reductions and sustainability targets, including developing

(3) In considering the role of zero-emission vehicles in helping to reach the overall transportation sector emission reduction goals identified pursuant to paragraph (1), the strategy shall include a roadmap to achieve the goal of 100 percent of in-state sales of new passenger cars and trucks being zero-emission by 2035, and 100 percent of medium- and heavy-duty vehicles in California being zero emission by 2045 where feasible and for all drayage trucks to be zero emission by 2035. Other components of the transportation sustainability strategy shall include enhanced public transit, reduction in vehicle miles traveled, and support for vehicle pooling.

(4)The strategy shall identify programs, funding sources and levels, and appropriate regulatory mandates.

(5)

(4) The strategy shall be equity focused and prioritize investments for market penetration and investments that will support low-income and disproportionately emissions-overburdened communities.

(6)The strategy shall be adopted by the state agencies identified in the strategy.

(5)  The deployment goals and strategies developed for each sustainable transportation goal and program pursuant to paragraph (2) shall be adopted by each state agency described in subparagraph (A) of paragraph (1).
(6) The strategy shall be completed no later than January 1, 2024.
(b) As part of the 2026 update to the mobile source strategy required pursuant to Section 43024.2, the state board shall consider the Sustainable Transportation Strategy and may include any portion of the Sustainable Transportation Strategy in the mobile source strategy.

(b)

(c) As part of the 2022 2027 update to the scoping plan required pursuant to Section 38561, the state board shall set a consider the overall greenhouse gas emissions reduction target goal for the whole transportation sector. sector identified in the Sustainable Transportation Strategy pursuant to paragraph (1) of subdivision (a).

(c)

(d) The Governor shall identify and appoint one key lead agency to steer the coordination of zero-emission vehicle deployment across state agencies and to implement the zero-emission vehicle component of the transportation sustainability strategy Sustainable Transportation Strategy developed pursuant to subdivision (a).

SEC. 3.

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

44272.
 (a) The Alternative and Renewable Fuel and Vehicle Technology Program is hereby established. The program shall be administered by the commission. The commission shall implement the program by regulation pursuant to the requirements 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 program shall provide, upon appropriation by the Legislature, competitive grants, revolving loans, loan guarantees, loans, or other appropriate funding measures to public agencies, vehicle and technology entities, businesses and projects, public-private partnerships, workforce training partnerships and collaboratives, fleet owners, consumers, recreational boaters, and academic institutions to develop and deploy innovative technologies that transform California’s fuel and vehicle types to help reduce criteria air pollutants and air toxics and attain the state’s climate change policies. The emphasis of this program shall be to develop and deploy technology and alternative and renewable fuels in the marketplace, without adopting any one preferred fuel or technology.
(b) A project that receives more than seventy-five thousand dollars ($75,000) in funds from the commission shall be approved at a noticed public meeting of the commission and shall be consistent with the priorities established by the investment plan adopted pursuant to Section 44272.5. Under this article, the commission may delegate to the commission’s executive director, or the executive director’s designee, the authority to approve either of the following:
(1) A contract, grant, loan, or other agreement or award that receives seventy-five thousand dollars ($75,000) or less in funds from the commission.
(2) Amendments to a contract, grant, loan, or other agreement or award as long as the amendments do not increase the amount of the award, change the scope of the project, or modify the purpose of the agreement.
(c) (1) The commission shall expend at least 50 percent of the moneys appropriated to the Alternative and Renewable Fuel and Vehicle Technology Program for projects that benefit low-income and disadvantaged communities.
(2) For purposes of this section, the following definitions apply:
(A) “Disadvantaged community” means a community that is within an area identified as among the most disadvantaged 25 percent in the state according to the California Environmental Protection Agency and based on the most recent California Communities Environmental Health Screening Tool, also known as CalEnviroScreen.
(B) “Low-income community” has the same meaning as defined in Section 39713.

(c)

(d) The commission shall provide preferences to those projects that maximize the goals of the Alternative and Renewable Fuel and Vehicle Technology Program, based on the following criteria, as applicable:
(1) The project’s ability to reduce criteria air pollutants and air toxics, with prioritization for projects that reduce these emissions in emissions-overburdened communities and low-income communities.
(2) The project’s ability to provide the advanced vehicle infrastructure needed to support the zero-emission and alternative-fueled vehicle deployment to meet the state’s climate goals, including, with prioritization for projects that advance infrastructure that supports alternative vehicle deployment in disadvantaged and low-income communities. These state climate goals include, but are not limited to, any of the following:
(A) Section 39719.2.
(B) Section 39730.5.
(C) Section 43024.2.
(D) Section 44124.5.
(E) Section 5450 of the Public Utilities Code.
(F) Section 25229 of the Public Resources Code.

(D)

(G) Chapter 530 of the Statutes of 2014.

(E)

(H) Chapter 547 of the Statutes of 2015.

(F)

(I) Chapter 136 of the Statutes of 2017.

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

(4)

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

(5)

(4) The project provides economic benefits for California by promoting California-based technology firms, jobs, and businesses, especially in disadvantaged communities.

(6)

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

(7)

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

(8)

(7) The project’s ability to transition workers to, or promote employment in, the alternative and renewable fuel and vehicle technology sector.

(d)

(e) The commission shall rank applications for projects proposed for funding awards based on solicitation criteria developed in accordance with subdivision (c), (d), and shall give additional preference to funding those projects with higher benefit-cost scores, with a certain percentage of funding allocated for incentives for medium- and heavy-duty vehicles used by owner operators and small fleet owners in the goods movement industry.

(e)

(f) The following shall be eligible and shall receive prioritization for funding:
(1) Medium- and heavy-duty vehicle infrastructure research, prototype, pilot, demonstration, planning and technical assistance, and deployment projects that reduce and eliminate emissions from fleets in the goods movement and movement, public transit transit, and agriculture sectors for on- and off-road vehicles.
(2) Infrastructure deployment and related workforce training programs for alternative-fueled vehicles, including utility distribution system upgrades, and grid integration technologies to support those vehicle technologies, specifically including infrastructure deployment for multidwelling units. light-, medium- and heavy-duty alternative-fueled vehicles, that support access to alternative-fueled vehicles in disadvantaged and low-income communities. Projects may include planning and technical assistance, public, private, and shared light-duty charging networks, infrastructure deployment for multidwelling units, public and shared infrastructure within alternative fuel corridors, as designated by the United States Department of Transportation, utility distribution system upgrades, and grid integration technologies to support those vehicle technologies, specifically including grid integration technologies to support those technologies.

(f)

(g) The following may be eligible for funding:
(1) Medium- and heavy-duty vehicle research, prototype, pilot, demonstration, and deployment projects for on- and off-road vehicles.
(2) Alternative and renewable fuel projects to develop and improve alternative and renewable low-carbon fuels, including electricity, ethanol, dimethyl ether, renewable diesel, natural gas, hydrogen, and biomethane, among others, and their feedstocks that have high potential for long-term or short-term commercialization, including projects that lead to sustainable feedstocks.
(3) Demonstration and deployment projects that optimize alternative and renewable fuels for existing and developing engine technologies.
(4) Projects to produce alternative and renewable low-carbon fuels in California.
(5) Projects to decrease the overall impact of an alternative and renewable fuel’s life-cycle carbon footprint and increase sustainability.
(6) Alternative and renewable fuel infrastructure, fueling stations, and equipment.
(7) Projects to develop and improve light-, medium-, and heavy-duty vehicle technologies that provide for better fuel efficiency and lower greenhouse gas emissions, alternative fuel usage and storage, or emission reductions, including propulsion systems, advanced internal combustion engines with a 40 percent or better efficiency level over the current market standard, lightweight materials, intelligent transportation systems, energy storage, control systems and system integration, physical measurement and metering systems and software, development of design standards and testing and certification protocols, battery recycling and reuse, engine and fuel optimization electronic and electrified components, hybrid technology, plug-in hybrid technology, battery electric vehicle technology, fuel cell technology, and conversions of hybrid technology to plug-in technology through the installation of safety certified supplemental battery modules.
(8) Programs and projects that accelerate the commercialization of vehicles and alternative and renewable fuels including buy-down programs through near-market and market-path deployments, advanced technology warranty or replacement insurance, development of market niches, supply-chain development, and research related to the pedestrian safety impacts of vehicle technologies and alternative and renewable fuels.
(9) Programs and projects to retrofit medium- and heavy-duty onroad and nonroad vehicle fleets with technologies that create higher fuel efficiencies, including alternative and renewable fuel vehicles and technologies, idle management technology, and aerodynamic retrofits that decrease fuel consumption.
(10) Infrastructure projects that promote alternative and renewable fuel infrastructure development connected with existing fleets, public transit, and existing transportation corridors, including physical measurement or metering equipment and truck stop electrification.
(11) Workforce training programs related to the development and deployment of technologies that transform California’s fuel and vehicle types and assist the state in implementing its climate change policies, including, but not limited to, alternative and renewable fuel feedstock production and extraction; renewable fuel production, distribution, transport, and storage; high-performance and low-emission vehicle technology and high tower electronics; automotive computer systems; mass transit fleet conversion, servicing, and maintenance; and other sectors or occupations related to the purposes of this chapter, including training programs to transition dislocated workers affected by the state’s greenhouse gas emission policies, including those from fossil fuel sectors, or training programs for low-skilled workers to enter or continue in a career pathway that leads to middle skill, industry-recognized credentials or state-approved apprenticeship opportunities in occupations related to the purposes of this chapter.
(12) Block grants or incentive programs administered by public entities or not-for-profit technology entities for multiple projects, education and program promotion within California, and development of alternative and renewable fuel and vehicle technology centers. The commission may adopt guidelines for implementing the block grant or incentive program, which shall be approved at a noticed public meeting of the commission. The commission may consider establishing multiyear grants to ensure the efficient use of public dollars and provide certainty to industry.
(13) Life-cycle and multimedia analyses, sustainability and environmental impact evaluations, and market, financial, and technology assessments performed by a state agency to determine the impacts of increasing the use of low-carbon transportation fuels and technologies, and to assist in the preparation of the investment plan and program implementation.
(14) A program to provide funding for homeowners who purchase a plug-in electric vehicle to offset costs associated with modifying electrical sources to include a residential plug-in electric vehicle charging station. In establishing this program, the commission shall consider funding criteria to maximize the public benefit of the program.

(g)

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

(h)

(i) The commission may do all of the following:
(1) Contract with the Treasurer to expend funds through programs implemented by the Treasurer, including the California Capital Access Program, if the expenditure is consistent with all of the requirements of this article and Article 1 (commencing with Section 44270).
(2) Contract with small business financial development corporations established by the Governor’s Office of Business and Economic Development to expend funds through the Small Business Loan Guarantee Program if the expenditure is consistent with all of the requirements of this article and Article 1 (commencing with Section 44270).
(3) Advance funds, pursuant to an agreement with the commission, to any of the following:
(A) A public entity.
(B) A recipient to enable it to make advance payments to a public entity that is a subrecipient of the funds and under a binding and enforceable subagreement with the recipient.
(C) An administrator of a block grant program.
(4) Periodically review incentive programs to ensure they do both of the following:
(A) Provide efficient disbursement of dollars and improve multiyear market development.
(B) Provide for novel and innovative business models that support technology innovation by being inclusive and neutral to diverse vehicles, charging use cases, and business models.

(i)

(j) The commission shall collaborate with entities that have expertise in workforce development to implement the workforce development components of this section, including, but not limited to, the California Workforce Development Board, the Employment Training Panel, the Employment Development Department, and the Division of Apprenticeship Standards.

SEC. 4.

 Section 44272.4 of the Health and Safety Code is amended to read:

44272.4.
 (a) Notwithstanding subdivision (d) of Section 44272.3, on and after June 30, 2013, a biorefiner receiving loan moneys from the state pursuant to an appropriation made in the 2010–11 or 2011–12 fiscal year shall comply with all conditions established pursuant to Section 44272.3 and shall demonstrate that compliance to the commission.
(b) On and after July 1, 2013, the eligibility for funding, pursuant to paragraph (2) of subdivision (f) (g) of Section 44272, of projects for the production of ethanol is limited to ethanol that is not derived from corn. This limitation does not apply to ethanol derived from corn stover, leaves, cobs, or other nonedible plant portions of the corn.