43865-43869

HEALTH AND SAFETY CODE
SECTION 43865-43869




43865.  The Legislature finds and declares all of the following:
   (a) The production, marketing, and use of petroleum fuels in
California causes significant degradation of public health and
environmental quality due to releases of air and water pollutants.
   (b) Clean alternative fuels have the potential to considerably
reduce these impacts and are important strategies for the state to
attain its air and water quality goals.
   (c) Research, development, and commercialization of alternative
fuels in California have the potential to strengthen California's
economy by providing job growth and helping to reduce the state's
vulnerability to petroleum price volatility.
   (d) The State Energy Resources Conservation and Development
Commission and the State Air Resources Board have previously
recommended in their report to the Legislature, "Reducing California'
s Petroleum Dependency" in August 2003, that the state adopt a goal
of 20 percent nonpetroleum fuel use in the year 2020 and 30 percent
in the year 2030.


43866.  Not later than June 30, 2007, the State Energy Resources
Conservation and Development Commission, in partnership with the
state board, and in consultation with the State Water Resources
Control Board, the Department of Food and Agriculture, and other
relevant state agencies, shall develop and adopt a state plan to
increase the use of alternative transportation fuels.
   (a) The plan shall include an evaluation of alternative fuels on a
full fuel-cycle assessment of emissions of criteria air pollutants,
air toxics, greenhouse gases, water pollutants, and other substances
that are known to damage human health, impacts on petroleum
consumption, and other matters the state board deems necessary.
   (b) The plan shall set goals for the years 2012, 2017, and 2022
for increased alternative fuel use in the state that accomplishes all
of the following:
   (1) Optimizes the environmental and public health benefits of
alternative fuels, including, but not limited to, reductions in
criteria air pollutants, greenhouse gases, and water pollutants
consistent with existing or future state board regulations in the
most cost-effective manner possible.
   (2) Ensures that there is no net material increase in air
pollution, water pollution, or any other substances that are known to
damage human health.
   (3) Minimizes the economic costs to the state, if any.
   (4) Maximizes the economic benefits of producing alternative fuels
in the state.
   (5) Considers issues related to consumer acceptance and costs and
identifies methods to overcome any barriers to alternative fuel use.
   (c) The plan shall recommend policies to ensure alternative fuel
goals are attained, including, but not limited to:
   (1) Standards on transportation fuels and vehicles.
   (2) Requirements, financial incentives, and other policy
mechanisms to ensure that vehicles capable of operating on
alternative fuels use those fuels to the maximum extent feasible.
   (3) Requirements, financial incentives, and other policy
mechanisms to ensure that alternative fuel fueling stations are
available to drivers of alternative fuel vehicles.
   (4) Incentives, requirements, programs, or other mechanisms to
encourage the research, development, demonstration,
commercialization, manufacturing, or production of vehicles that use
alternative fuels.



43867.  For the purposes of this article, the following terms have
the following meanings:
   (a) "Alternative fuel" means a nonpetroleum fuel, including
electricity, ethanol, biodiesel, hydrogen, methanol, or natural gas
that, when used in vehicles, has been demonstrated, to the
satisfaction of the state board, to have the ability to meet
applicable vehicular emission standards. For the purpose of this
section, alternative fuel may also include petroleum fuel blended
with nonpetroleum constituents, such as E85 or B20.
   (b) "Full fuel-cycle assessment" means evaluating and comparing
the full environmental and health impacts of each step in the life
cycle of a fuel, including, but not limited to, all of the following:
   (1) Feedstock extraction, transport, and storage.
   (2) Fuel production, distribution, transport, and storage.
   (3) Vehicle operation, including refueling, combustion or
conversion, and evaporation.



43868.  (a) It is the intent of the Legislature that, when the
California Hydrogen Highway Blueprint Plan is implemented, it be done
in a clean and environmentally responsible and advantageous manner.
   (b) It is further the intent of the Legislature that the state
board work with other relevant state agencies on the production of
hydrogen, with an emphasis on hydrogen produced from renewable
resources, as part of a strategy to reduce the state's dependence on
petroleum, achieve the state's greenhouse gas emission reduction
targets, and improve air quality for the state's residents.
   (c) It is further the intent of the Legislature that the
California Environmental Protection Agency and the state board, as
part of the implementation of the California Hydrogen Highway
Blueprint Plan, include in their priorities the deployment of
hydrogen or clean hydrogen blend fueled transit buses.
   (d) It is further the intent of the Legislature that the state
board consider including in a future revision of the California
Hydrogen Highway Blueprint Plan a study to determine the necessary
steps to maximize the production of hydrogen fuel made from eligible
renewable resources.


43869.  (a) The state board shall, no later than July 1, 2008,
develop and, after at least two public workshops, adopt hydrogen fuel
regulations to ensure the following:
   (1) That state funding for the production and use of hydrogen
fuel, as described in the California Hydrogen Highway Blueprint Plan,
contributes to the reduction of greenhouse gas emissions, criteria
air pollutant emissions, and toxic air contaminant emissions. The
regulations, at a minimum, shall do all of the following:
   (A) Require that, on a statewide basis, well-to-wheel emissions of
greenhouse gases for the average hydrogen-powered vehicle fueled by
hydrogen from fueling stations that receive state funds are at least
30 percent lower than emissions for the average new gasoline vehicle
in California when measured on a per-mile basis.
   (B) (i) Require that, on a statewide basis, no less than 33.3
percent of the hydrogen produced for, or dispensed by, fueling
stations that receive state funds be made from eligible renewable
energy resources as defined in Section 399.12 of the Public Utilities
Code.
   (ii) If the state board determines that there is insufficient
availability of hydrogen fuel from eligible renewable resources to
meet the 33.3-percent requirement of this subparagraph, the state
board may, after at least one public workshop and on a one-time
basis, reduce the requirement by an amount, not to exceed 10
percentage points, that the state board determines is necessary to
result in a renewable percentage requirement for hydrogen fuel that
is achievable.
   (iii) If the executive officer of the state board determines that
it is not feasible for a public transit operator to use hydrogen fuel
made from eligible renewable resources, the executive officer may
exempt the operator from the requirements of this subparagraph for a
period of not more than five years and may extend the exemption for
up to five additional years.
   (C) Prohibit hydrogen fuel producers from counting as a renewable
energy resource, pursuant to clause (i) of subparagraph (B), any
electricity produced from sources previously procured by a retail
seller and verifiably counted by the retail seller towards meeting
the renewables portfolio standard obligation, as required by Article
16 (commencing with Section 399.11) of Chapter 2.3 of Part 1 of
Division 1 of the Public Utilities Code.
   (D) Require that all hydrogen fuel dispensed from fueling stations
that receive state funds be generated in a manner so that local
well-to-tank emissions of nitrogen oxides plus reactive organic gases
are at least 50 percent lower than well-to-tank emissions of the
average motor gasoline sold in California when measured on an energy
equivalent basis.
   (E) Require that well-to-tank emissions of relevant toxic air
contaminants for hydrogen fuel dispensed from fueling stations that
receive state funds be reduced to the maximum extent feasible at each
site when compared to well-to-tank emissions of toxic air
contaminants of the average motor gasoline fuel on an energy
equivalent basis. In no case shall the toxic emissions be greater
than the emissions from gasoline on an energy equivalent basis.
   (F) Require that providers of hydrogen fuel for transportation in
the state report to the state board the annual mass of hydrogen fuel
dispensed and the method by which the dispensed hydrogen was produced
and delivered.
   (G) Authorize the state board, after at least one public workshop,
to grant authority to the executive officer of the state board to
exempt from this paragraph, for a period of no more than five years,
hydrogen dispensing facilities constructed for small demonstration or
temporary purposes. The exemption may be extended on a case-by-case
basis upon a finding that the extension will not harm public health.
The executive officer may limit the total number of exemptions by
geographic region, including by air district, but the average annual
mass of hydrogen dispensed from exempted facilities shall not exceed
10 percent of the total mass of hydrogen fuel dispensed for
transportation purposes in the state.
   (2) That, in any year immediately following a 12-month period in
which the mass of hydrogen fuel dispensed for transportation purposes
in California exceeds 3,500 metric tons, the production and direct
use of hydrogen fuels for motor vehicles in the state, including, but
not limited to, any hydrogen highway network that is developed
pursuant to the California Hydrogen Highway Blueprint Plan,
contributes to a reduced dependence on petroleum, as well as
reductions in greenhouse gas emissions, criteria air pollutant
emissions, and toxic air contaminant emissions. For the purpose of
this paragraph, the regulations, at a minimum, shall do all of the
following:
   (A) Require that, on a statewide basis, well-to-wheel emissions of
greenhouse gases for the average hydrogen-powered vehicle in
California are at least 30 percent lower than emissions for the
average new gasoline vehicle in California when measured on a
per-mile basis.
   (B) Require that, on a statewide basis, no less than 33.3 percent
of the hydrogen produced or dispensed in California for motor
vehicles be made from eligible renewable energy resources as defined
in Section 399.12 of the Public Utilities Code.
   (C) Prohibit hydrogen fuel producers from counting as a renewable
energy resource, for purposes of subparagraph (B), any electricity
produced from sources previously procured by a retail seller and
verifiably counted by the retail seller towards meeting the
requirements established by the California Renewables Portfolio
Standard Program, as set forth in Article 16 (commencing with Section
399.11) of Chapter 2.3 of Part 1 of Division 1 of the Public
Utilities Code.
   (D) Require that all hydrogen fuel dispensed in California for
motor vehicles be generated in a manner so that local well-to-tank
emissions of nitrogen oxides plus reactive organic gases are at least
50 percent lower than well-to-tank emissions of the average motor
gasoline sold in California when measured on an energy equivalent
basis.
   (E) Require that well-to-tank emissions of relevant toxic air
contaminants from hydrogen fuel produced or dispensed in California
be reduced to the maximum extent feasible at each site when compared
to well-to-tank emissions of toxic air contaminants of the average
motor gasoline fuel on an energy equivalent basis. In no case shall
the toxic emissions from hydrogen fuel be greater than the toxic
emissions from gasoline on an energy equivalent basis.
   (F) Authorize the state board, after at least one public workshop,
to grant authority to the executive officer of the state board to
exempt from this paragraph, for a period of no more than five years,
hydrogen dispensing facilities that dispense an average of no more
than 100 kilograms of hydrogen fuel per month. The exemption may be
extended on a case-by-case basis by the executive officer upon a
finding that the extension will not harm public health. The executive
officer may limit the total number of exemptions by geographic
region, including by air district, but the average annual mass of
hydrogen dispensed statewide from exempted facilities shall not
exceed 10 percent of the total mass of hydrogen fuel dispensed for
transportation purposes in the state.
   (G) Authorize the state board, if it determines that reporting is
necessary to facilitate enforcement of the requirements of this
paragraph, to require that providers of hydrogen fuel for
transportation in the state report to the state board the annual mass
of hydrogen fuel dispensed and the method by which the dispensed
hydrogen was produced and delivered.
   (b) Notwithstanding paragraph (2) of subdivision (a), the state
board may increase the 3,500-metric-ton threshold in paragraph (2) of
subdivision (a) by no more than 1,500 metric tons if at least one of
the following requirements is met:
   (1) The 3,500-metric-ton threshold is first met prior to January
1, 2011.
   (2) The state board determines that the 3,500-metric-ton threshold
has been met primarily due to hydrogen fuel consumed in heavy duty
vehicles.
   (3) The state board determines at a public hearing that increasing
the threshold would accelerate the deployment of hydrogen fuel cell
vehicles in the state.
   (c) The state board, in consultation with other relevant agencies
as appropriate, shall review the renewable resource requirements
adopted pursuant to this section every four years and shall increase
the renewable resource percentage requirements if it determines that
it is technologically feasible to do so and will not substantially
hinder the development of hydrogen as a transportation fuel in a
manner that is consistent with this section.
   (d) The state board shall review the emission requirements adopted
pursuant to this section every four years and shall strengthen the
requirements if it determines it is technologically feasible to do so
and will not substantially hinder the development of hydrogen as a
transportation fuel in a manner that otherwise is consistent with
this section.
   (e) The state board shall produce and periodically update a
handbook to inform and educate motor vehicle manufacturers, hydrogen
fuel producers, hydrogen service station operators, and other
interested parties on how to comply with the requirements set forth
in this section. This handbook shall be made available on the agency'
s Internet Web site on or before July 1, 2009.
   (f) The Secretary for Environmental Protection shall convene the
California Environmental Protection Agency's Environmental Justice
Advisory Committee at least once annually to solicit the committee's
comments on the production and distribution of hydrogen fuel in the
state.
   (g) The Secretary for Environmental Protection, in consultation
with the state board, shall recommend to the Legislature and the
Governor, on or before January 1, 2010, incentives that could be
offered to businesses within the hydrogen fuel industry and consumers
to spur the development of clean sources of hydrogen fuel.
   (h) Unless the context requires otherwise, the definitions set
forth in this subdivision govern the construction of this section:
   (1) "Well-to-tank emissions" means emissions resulting from
production of a fuel, including resource extraction, initial
processing, transport, fuel production, distribution and marketing,
and delivery into the fuel tank of a consumer vehicle.
   (2) "Well-to-wheel emissions" means emissions resulting from
production of a fuel, including resource extraction, initial
processing, transport, fuel production, distribution and marketing,
and delivery and use in a consumer vehicle.