(a)  No later than January 1, 2005, the state board shall develop and adopt regulations that achieve the maximum feasible and cost-effective reduction of greenhouse gas emissions from motor vehicles.

(b)  (1)  The regulations adopted pursuant to subdivision (a) may not take effect prior to January 1, 2006, in order to give the Legislature time to review the regulations and determine whether further legislation should be enacted prior to the effective date of the regulations, and shall apply only to a motor vehicle manufactured in the 2009 model year, or any model year thereafter.

(2)  (A)  Within 10 days of adopting the regulations pursuant to subdivision (a), the state board shall transmit the regulations to the appropriate policy and fiscal committees of the Legislature for review.

(B)  The Legislature shall hold at least one public hearing to review the regulations. If the Legislature determines that the regulations should be modified, it may adopt legislation to modify the regulations.

(c)  In developing the regulations described in subdivision (a), the state board shall do all of the following:

(1)  Consider the technological feasibility of the regulations.

(2)  Consider the impact the regulations may have on the economy of the state, including, but not limited to, all of the following areas:

(A)  The creation of jobs within the state.

(B)  The creation of new businesses or the elimination of existing businesses within the state.

(C)  The expansion of businesses currently doing business within the state.

(D)  The ability of businesses in the state to compete with businesses in other states.

(E)  The ability of the state to maintain and attract businesses in communities with the most significant exposure to air contaminants, localized air contaminants, or both, including, but not limited to, communities with minority populations or low-income populations, or both.

(F)  The automobile workers and affiliated businesses in the state.

(3)  Provide flexibility, to the maximum extent feasible consistent with this section, in the means by which a person subject to the regulations adopted pursuant to subdivision (a) may comply with the regulations. That flexibility shall include, but is not limited to, authorization for a person to use alternative methods of compliance with the regulations. In complying with this paragraph, the state board shall ensure that any alternative methods for compliance achieve the equivalent, or greater, reduction in emissions of greenhouse gases as the emission standards contained in the regulations. In providing compliance flexibility pursuant to this paragraph, the state board may not impose any mandatory trip reduction measure or land use restriction.

(4)  Conduct public workshops in the state, including, but not limited to, public workshops in three of the communities in the state with the most significant exposure to air contaminants or localized air contaminants, or both, including, but not limited to, communities with minority populations or low-income populations, or both.

(5)  (A)  Grant emissions reductions credits for any reductions in greenhouse gas emissions from motor vehicles that were achieved prior to the operative date of the regulations adopted pursuant to subdivision (a), to the extent permitted by state and federal law governing emissions reductions credits, by utilizing the procedures and protocols adopted by the California Climate Action Registry pursuant to subdivision (j) of Section 42823.

(B)  For the purposes of this section, the state board shall utilize the 2000 model year as the baseline for calculating emission reduction credits.

(6)  Coordinate with the State Energy Resources Conservation and Development Commission, the California Climate Action Registry, and the interagency task force, convened pursuant to subdivision (e) of Section 25730 of the Public Resources Code, in implementing this section.

(d)  The regulations adopted by the state board pursuant to subdivision (a) shall not require any of the following:

(1)  The imposition of additional fees and taxes on any motor vehicle, fuel, or vehicle miles traveled, pursuant to this section or any other provision of law.

(2)  A ban on the sale of any vehicle category in the state, specifically including, but not limited to, sport utility vehicles and light-duty trucks.

(3)  A reduction in vehicle weight.

(4)  A limitation on, or reduction of, the speed limit on any street or highway in the state.

(5)  A limitation on, or reduction of, vehicle miles traveled.

(e)  The regulations adopted by the state board pursuant to subdivision (a) shall provide an exemption for those vehicles subject to the optional low-emission vehicle standard for oxides of nitrogen (NO x) for exhaust emission standards described in paragraph (9) of subdivision (a) of Section 1961 of Title 13 of the California Code of Regulations.

(f)  Not later than July 1, 2003, the California Climate Action Registry, in consultation with the state board, shall adopt procedures for the reporting of reductions in greenhouse gas emissions from mobile sources to the registry.

(g)  By January 1, 2005, the state board shall report to the Legislature and the Governor on the content of the regulations developed and adopted pursuant to this section, including, but not limited to, the specific actions taken by the state board to comply with paragraphs (1) to (6), inclusive, of subdivision (c), and with subdivision (f). The report shall include, but shall not be limited to, an analysis of both of the following:

(1)  The impact of the regulations on communities in the state with the most significant exposure to air contaminants or toxic air contaminants, or both, including, but not limited to, communities with minority populations or low-income populations, or both.

(2)  The economic and public health impacts of those actions on the state.

(h)  If the federal government adopts a standard regulating a greenhouse gas from new motor vehicles that the state board determines is in a substantially similar timeframe, and of equivalent or greater effectiveness as the regulations that would be adopted pursuant to this section, the state board may elect not to adopt a standard on any greenhouse gas included in the federal standard.

(i)  For the purposes of this section, the following terms have the following meanings:

(1)  “Greenhouse gases” means those gases listed in subdivision (g) of Section 42801.1.

(2)  “Maximum feasible and cost-effective reduction of greenhouse gas emissions” means the greenhouse gas emission reductions that the state board determines meet both of the following criteria:

(A)  Capable of being successfully accomplished within the time provided by this section, taking into account environmental, economic, social, and technological factors.

(B)  Economical to an owner or operator of a vehicle, taking into account the full life-cycle costs of a vehicle.

(3)  “Motor vehicle” means a passenger vehicle, light-duty truck, or any other vehicle determined by the state board to be a vehicle whose primary use is noncommercial personal transportation.

(Added by Stats. 2002, Ch. 200, Sec. 3. Effective January 1, 2003.)