Bill Text: CA AB523 | 2011-2012 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Ethanol: Alternative and Renewable Fuel and Vehicle

Spectrum: Partisan Bill (Republican 1-0)

Status: (Passed) 2012-08-27 - Chaptered by Secretary of State - Chapter 183, Statutes of 2012. [AB523 Detail]

Download: California-2011-AB523-Amended.html

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BILL NUMBER: AB 523	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MARCH 31, 2011

INTRODUCED BY   Assembly Member Valadao

                        FEBRUARY 15, 2011

   An act  to amend Section 44272 of, and to repeal Section
44272.3 of, the Health and Safety Code,   relating to ethanol.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 523, as amended, Valadao. Ethanol:  subsidies.
  Alternative and Renewable Fuel and Vehicle Technology
Program.  
   Existing law establishes the Alternative and Renewable Fuel and
Vehicle Technology Program, administered by the State Energy
Resources Conservation and Development Commission (Energy
Commission), to provide to specified entities, upon appropriation by
the Legislature, grants, loans, loan guarantees, revolving loans, or
other appropriate measures, for the development and deployment of
innovative technologies that transform California's fuel and vehicle
types to help attain the state's climate change goals. Existing law
specifies certain alternative and renewable fuel projects to develop
and improve alternative and renewable low-carbon fuels, including
ethanol, are eligible for funding. Existing law, until July 1, 2013,
establishes requirements for biorefiners to receive loans from the
California Ethanol Producer Incentive Program.  
   This bill would provide that alternative and renewable fuel
projects to develop and improve alternative and renewable low-carbon
fuels, including ethanol not derived from corn, are eligible for
funding. The bill would repeal those provisions establishing
requirements for biorefiners to receive loans from the California
Ethanol Producer Incentive Program.  
   Existing law requires the State Energy Resources Conservation and
Development Commission, in partnership with the State Air Resources
Board, and in consultation with the State Water Resources Control
Board, the Department of Food and Agriculture, and other relevant
state agencies, to develop and adopt a state plan to increase the use
of alternative transportation fuels, including ethanol. 

   This bill would declare the intent of the Legislature to enact
legislation to eliminate all subsidies in California for ethanol.

   Vote: majority. Appropriation: no. Fiscal committee:  no
  yes  . State-mandated 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) In 2001, only 7 percent of the corn raised in the United
States was used to produce ethanol. By 2010, 39.4 percent of the
nation's corn production was used for ethanol production. This
redirection in demand has lead to historic increases in the price of
corn.  
   (b) The use of corn for the production of ethanol has negatively
impacted food supplies, food prices, and agricultural industries that
provide more than 500,000 jobs for the people of California. 

   (c) Ethanol derived from corn has been shown to have little
positive environmental impact and has hindered the development of a
new generation of clean technologies with true environmental
benefits. 
   SEC. 2.    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 created. The program shall be
administered by the commission. The commission shall implement the
program by regulation pursuant to the requirements of 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 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 funded by the commission shall be approved at a
noticed public hearing of the commission and shall be consistent with
the priorities established by the investment plan adopted pursuant
to Section 44272.5.
   (c) 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 provide a measurable transition from
the nearly exclusive use of petroleum fuels to a diverse portfolio of
viable alternative fuels that meet petroleum reduction and
alternative fuel use goals.
   (2) The project's consistency with existing and future state
climate change policy and low-carbon fuel standards.
   (3) The project's ability to reduce criteria air pollutants and
air toxics and reduce or avoid multimedia environmental impacts.
   (4) The project's ability to decrease, on a life cycle basis, the
discharge of water pollutants or any other substances known to damage
human health or the environment, in comparison to the production and
use of California Phase 2 Reformulated Gasoline or diesel fuel
produced and sold pursuant to California diesel fuel regulations set
forth in Article 2 (commencing with Section 2280) of Chapter 5 of
Division 3 of Title 13 of the California Code of Regulations.
   (5) The project does not adversely impact the sustainability of
the state's natural resources, especially state and federal lands.
   (6) The project provides nonstate matching funds.
   (7) The project provides economic benefits for California by
promoting California-based technology firms, jobs, and businesses.
   (8) The project uses existing or proposed fueling infrastructure
to maximize the outcome of the project.
   (9) The project's ability to reduce on a life cycle assessment
greenhouse gas emissions by at least 10 percent, and higher
percentages in the future, from current reformulated gasoline and
diesel fuel standards established by the state board.
   (10) The project's use of alternative fuel blends of at least 20
percent, and higher blend ratios in the future, with a preference for
projects with higher blends.
   (11) The project drives new technology advancement for vehicles,
vessels, engines, and other equipment, and promotes the deployment of
that technology in the marketplace.
   (d) Only the following shall be eligible for funding:
   (1) Alternative and renewable fuel projects to develop and improve
alternative and renewable low-carbon fuels, including electricity,
ethanol  not derived from corn  , 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.
   (2) Demonstration and deployment projects that optimize
alternative and renewable fuels for existing and developing engine
technologies.
   (3) Projects to produce alternative and renewable low-carbon fuels
in California.
   (4) Projects to decrease the overall impact of an alternative and
renewable fuel's life cycle carbon footprint and increase
sustainability.
   (5) Alternative and renewable fuel infrastructure, fueling
stations, and equipment. The preference in paragraph (10) of
subdivision (c) shall not apply to renewable diesel or biodiesel
infrastructure, fueling stations, and equipment used solely for
renewable diesel or biodiesel fuel.
   (6) 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, light-weight
materials, 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.
   (7) 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.
   (8) Programs and projects to retrofit medium- and heavy-duty
on-road 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.
   (9) 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.
   (10) Workforce training programs related 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.
   (11) Block grants administered by 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.
   (12) 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.
   (13) 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.
   (e) 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.
   (f) The commission may do both of the following:
   (1) Contract with the Treasurer to expend funds through programs
implemented by the Treasurer, 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 Business, Transportation and Housing
Agency 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).
   SEC. 3.    Section 44272.3 of the   Health
and Safety Code   is repealed.  
   44272.3.  (a) It is the Legislature's intent that, to the maximum
extent feasible, loan moneys provided by the state to refiners of
biofuels, also known as biorefiners, be awarded so as to increase the
efficiency and environmental sustainability of biofuel production.
   (b) In order to reduce the carbon intensity equivalent value of
the fuel that biorefiners produce, biorefiners receiving loans from
the commission's California Ethanol Producer Incentive Program,
established under the authority of this chapter, shall meet all of
the following requirements:
   (1) Within six months of acceptance to the program, biorefiners
shall submit a draft plan to the commission that details one or more
projects that can be undertaken at the biorefinery that are designed
to achieve compliance with either of two biorefinery operational
enhancement goals established by the commission.
   (2) Within 12 months of acceptance to the program, biorefiners
shall submit a detailed cost estimate for their target projects that
can be undertaken at the biorefinery and that are designed to achieve
compliance with the commission's enhancement goals.
   (3) Within 24 months of acceptance to the program, biorefiners
shall complete and obtain all of the necessary permits or negative
declarations sufficient to allow the project to move forward with
financing, major equipment purchases, and hiring if project approval
is executed by the company's officers.
   (4) Within 36 months of acceptance to the program, biorefiners
shall obtain all of the necessary financing and initiate construction
for their project associated with their elected enhancement goal
pathway.
   (5) Within 48 months of acceptance to the program, biorefiners
shall complete all modifications to the facility and begin modified
operations that achieve compliance with either of the enhancement
goal pathways selected by the project applicant.
   (c) This section does not limit the commission's ability to set
more stringent guidelines for the California Ethanol Producer
Incentive Program that further maximize the efficiency and
environmental sustainability of biofuel production.
   (d) This section shall become inoperative on July 1, 2013, and, as
of January 1, 2014, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2014, deletes or
extends the dates on which it becomes inoperative and is repealed.
 
  SECTION 1.    It is the intent of the Legislature
to enact legislation to eliminate all subsidies in California for
ethanol.