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SB-726 Alternative fuel and vehicle technologies: sustainable transportation.(2021-2022)

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Date Published: 08/27/2021 09:00 PM
SB726:v93#DOCUMENT

Amended  IN  Assembly  August 30, 2021
Amended  IN  Assembly  June 29, 2021
Amended  IN  Assembly  June 16, 2021
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)
(Coauthors: Senators Archuleta, Min, and Stern)

February 19, 2021

An act to amend Sections 44272 and 44272.4 of, and to add Sections 43018.4 and 44272.1 to, the Health and Safety Code, relating to air pollution.


LEGISLATIVE COUNSEL'S DIGEST


SB 726, as amended, Gonzalez. Alternative fuel and vehicle technologies: Sustainable Transportation Strategy. sustainable transportation.

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 public agencies, including local air pollution control districts and air quality management districts, if those districts choose to participate, to jointly develop, no later than January 1, 2024, a comprehensive transportation sustainability strategy to be known as the Sustainable Transportation Strategy. The bill would specify that the purpose of the strategy is to evaluate the plans, actions, and required funding needed to reach the state’s various transportation greenhouse gas emissions and criteria pollutant reduction goals in a cost-effective, technology neutral, and efficient manner, specifically considering the role of sustainable transportation goals and programs. The bill would require the strategy to evaluate the role of, and establish measurable deployment goals for, each sustainable transportation goal and program and would require specified state agencies to adopt those deployment goals. The bill would require the strategy to develop an overall transportation sector greenhouse gas emission and criteria pollutant emissions reduction goal. 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 2027 update of the scoping plan, the state board to consider the overall greenhouse gas emissions reduction goal for the transportation 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 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, beginning with the 2022–25 investment cycle, the commission to provide preference to projects located in nonattainment areas under the federal Clean Air Act. preferences. The bill would delete the list of projects that the commission is required to make eligible for funding. The bill would require authorize the commission to periodically review incentive programs, as provided. The bill would, beginning with the 2022–25 investment cycle, require the commission to ensure the program supports would provide that the goals of the program shall be to advance the state’s clean transportation, equity, air quality, and climate emission goals and would require the commission to ensure program investments support specified requirements. The bill would, beginning with the 2022–25 investment cycle, would require the commission to expend at least 50% of the moneys appropriated to the program for projects that directly benefit or serve residents of disadvantaged and low-income communities and low-income Californians, and would require at least 50% of funding for tangible location-based investments to be expended in disadvantaged and low-income communities. The bill would delete various other requirements relating to the administration of the program.
This bill would require the Strategic Growth Council to coordinate and convene at least 2 meetings each calendar year with specified state agencies and regional entities, if the regional entities choose to participate, to coordinate their implementation of sustainable transportation policies. The bill would require those state agencies and regional entities, on or before December 31, 2023, and each year thereafter, to collaboratively develop a summary of actions undertaken as part of the meetings and would require the summary to be publicly available on the Strategic Growth Council’s internet website.
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 43 to 21 percent, inclusive, higher than 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 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 and broader greenhouse gas emissions reduction and air pollution reduction goals, specifically from the transportation sector, 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, the Department of General Services, and districts, if the districts choose to participate, shall jointly develop a comprehensive transportation sustainability strategy, which shall be known as the Sustainable Transportation Strategy.

(B)The strategy shall be developed in consultation with metropolitan planning organizations and other relevant local entities.

(C)The purpose of the strategy shall be to evaluate 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, technology neutral, and efficient manner, specifically considering the role of sustainable transportation goals and programs, including, but not limited to, zero-emission, near-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 specified in subparagraph (C) of paragraph (1), including mobile source and related infrastructure using existing state reports and assessments, where applicable.

(B)Evaluate the role of, and establish measurable deployment goals for, each sustainable transportation goal and program specified in subparagraph (C) of paragraph (1) in reaching the overall transportation sector emissions reductions goals identified pursuant to subparagraph (E).

(C)Identify any existing barriers to implementing the sustainable transportation goals and programs specified in subparagraph (C) of paragraph (1), and propose strategies to deploying those transportation goals and programs, specifically by considering deployment strategies in disadvantaged and low-income communities.

(D)Identify the programs, funding sources and levels, and appropriate regulatory mandates for deployment of each sustainable transportation goal and program specified in subparagraph (C) of paragraph (1), and which, through their collective implementation, would result in meeting overall transportation sector emission reduction goals developed pursuant to subparagraph (E).

(E)Develop an overall transportation sector greenhouse gas and criteria pollutant emissions reduction goal.

(3)The strategy shall be equity focused, technology neutral, and prioritize investments for market penetration and investments that will support disadvantaged and low-income communities.

(4)The measurable deployment goals 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).

(5)In addition to considering the role of zero-emission vehicles in helping to reach the overall transportation sector emission reduction goal identified pursuant to subparagraph (E) of paragraph (2), the strategy shall also include a roadmap to achieve the goal of 100 percent of instate 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.

(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.

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

(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 Sustainable Transportation Strategy developed pursuant to subdivision (a).

SEC. 2.

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

43018.4.
 (a) (1) The Strategic Growth Council shall coordinate and convene at least two meetings each calendar year with all of the following members:
(A) The Executive Director of the California Transportation Commission or the executive director’s designee.
(B) The Executive Director of the State Air Resources Board or the executive director’s designee.
(C) The Executive Director of the State Energy Resources Conservation and Development Commission or the executive director’s designee.
(D) The Executive Director of the Public Utilities Commission or the executive director’s designee.
(E) The Director of the Governor’s Office of Business and Economic Development or the director’s designee.
(F) The Executive Director of the Strategic Growth Council or the executive director’s designee.
(G) No more than two representatives from districts, if the districts choose to participate.
(H) No more than two representatives from metropolitan planning organizations or regional transportation planning agencies, if those regional entities choose to participate.
(2) The purpose of the meeting shall be to coordinate those entities’ implementation of sustainable transportation policies, including, but not limited to, interagency efforts to advance deployment of near-zero-emission and zero-emission vehicles, vehicle miles traveled reduction strategies, transit, and active transportation.
(b) On or before December 31, 2023, and each year thereafter, the state agencies described in subdivision (a) and the regional entities described in subdivision (a), if those regional entities choose to participate, shall collaboratively develop a summary that includes all of the following:
(1) Cross-agency coordination undertaken pursuant to subdivision (a).
(2) Any coordinated or complementary goals, strategies, or projects identified through the meetings conducted pursuant to subdivision (a) to reduce emissions of criteria air pollutants and greenhouse gases from the transportation sector in a cohesive manner.
(3) Efforts undertaken pursuant to subdivision (a) to do any of the following:
(A) Understand the net effect of each agency’s policies and how they interact with other agency’s policies.
(B) Evaluate program effectiveness towards achieving cohesive emissions reductions for each agency and a prioritization of the most effective programs.
(C) Streamline incentives from various programs for recipients and evaluate coordinated or complementary funding streams.
(4) Any other actions achieved through the meetings conducted pursuant to subdivision (a).
(c) The summary developed pursuant to subdivision (b) shall be publicly available on the Strategic Growth Council’s internet website.

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) The commission may do all of the following:
(1) Award 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 that shall be approved at a noticed public meeting of the commission.
(2) Make single source or sole source awards for applied research. The same requirements set forth in Section 25620.5 of the Public Resources Code apply to awards made on a single source basis or a sole source basis. This paragraph does not authorize the commission to make a single source or sole source award for a project or activity other than for applied research.
(3) Contract with the Treasurer to expend funds through programs implemented by the Treasurer, including the California Capital Access Program established pursuant to Division 27 (commencing with Section 44500) 44500), if the expenditure is consistent with all of the requirements of this article and Article 1 (commencing with Section 44270).
(4) 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).
(5) 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.
(6) 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 or fueling use cases, and business models.
(d) 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.
(e) The goals of the program shall be to advance the state’s clean transportation, equity, air quality, and climate emission goals, including, but not limited to, any of the following:
(1) Section 39719.2.
(2) Section 39730.5.
(3) Section 43018.9.
(4) Section 43024.2.
(5) Section 44124.5.
(6) Section 5450 of the Public Utilities Code.
(7) Section 25229 of the Public Resources Code.
(8) Chapter 530 of the Statutes of 2014.
(9) Chapter 547 of the Statutes of 2015.
(10) Chapter 136 of the Statutes of 2017.
(f) Beginning with the 2022–25 investment cycle, and for each investment cycle thereafter, On or after January 1, 2022, when developing the investment plan pursuant to Section 44272.5, the commission shall ensure program investments support all either of the following:
(1) Annually increasing deployment of infrastructure and other projects that advance or support the deployment of medium- and heavy-duty vehicles to meet the clean transportation, equity, air quality, and climate emission goals described in subdivision (c). (e).
(2) Annually increasing deployment of light-duty vehicle infrastructure technology to fill deployment gaps identified pursuant to Sections 25229 and 25231 of the Public Resources Code and advance the goals identified in Executive Order No. N-79-20.

(3)Multiyear market acceleration strategies.

(g) Beginning with the 2022–25 investment cycle, and for each investment cycle thereafter, On or after January 1, 2022, no less than 50 percent of investments investments, averaged over three-year periods, shall be expended pursuant to subdivision (a) shall be expended in accordance with Section 44272.1.
(h) On or after January 1, 2022, when developing the investment plan pursuant to Section 44272.5, the commission shall ensure program investments support multiyear market acceleration strategies.

(h)Beginning with the 2022–25 investment cycle, and for each investment cycle thereafter, in awarding grants,

(i) For grants awarded on or after January 1, 2022, the commission shall provide preference for projects that meet all prioritize program investments that support any of the following, as applicable: following:
(1) The project is in a nonattainment area pursuant to the federal Clean Air Act (42 U.S.C. Sec. 7401 et seq) seq.) and, if applicable, preference shall be given to projects in the highest designation of nonattainment.
(2) The project provides nonstate matching funds or the funding is complimentary complementary to state or nonstate ratepayer investment. 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.
(3) The project provides economic benefits for California by promoting California-based technology firms, jobs, and businesses, especially in disadvantaged communities, to the extent permitted by federal law or regulation.
(4) The project transitions workers to, or promotes employment in, the alternative and renewable fuel and vehicle technology sector.

SEC. 4.

 Section 44272.1 is added to the Health and Safety Code, to read:

44272.1.
 (a) Beginning with the 2022–25 investment cycle, and for each investment cycle thereafter, On or after January 1, 2022, the commission shall expend at least 50 percent of the moneys appropriated to the Alternative and Renewable Fuel and Vehicle Technology Program Program, as averaged over three-year periods, on programs and projects that directly benefit or serve residents of disadvantaged and low-income communities and low-income Californians, and at least 50 percent of the funds for tangible location-based investments shall be expended in disadvantaged and low-income communities. Any of the moneys used for investments that fulfill both criteria shall count toward both requirements.
(b) Eligible programs and projects that meet the equity criteria described in subdivision (a) may include, but are not limited to, any of the following:
(1) Programs that fill gaps in the equitable distribution of light-duty charging infrastructure identified pursuant to Section 25231 of the Public Resources Code, including programs deploying charging or refueling stations at low-income residential and multiunit dwelling locations.
(2) Programs deploying publicly accessible or shared charging or refueling stations serving low-income customers who reside in disadvantaged and low-income communities, including programs to promote car sharing zero-emission car sharing, zero-emission transit, or vanpooling in those communities.
(3) Infrastructure for public transportation and schoolbus electrification programs.
(4) Programs that support the deployment of clean medium- and heavy-duty vehicles, including infrastructure deployment and other programs to displace local air pollution that disproportionately burdens disadvantaged and low-income communities.
(5) Financing assistance and vehicle purchase purchase, charging, or fueling incentives for customers residing in disadvantaged and low-income communities.
(6) Multilingual marketing, education, and outreach designed to increase awareness and adoption of clean mobility options.
(7) Programs that create high-quality jobs related to supporting new clean technologies in transportation and reduce household energy burdens related to vehicle charging.
(c) The commission shall consult with the disadvantaged community advisory group established pursuant to Section 400 of the Public Utilities Code and the advisory body created pursuant to Section 44272.5 to ensure that this section is effectively implemented.

SEC. 5.

 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 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.