BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 1966
                                                                  Page  1

          Date of Hearing:   May 5, 2004 

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                   Judy Chu, Chair

                  AB 1966 (Campbell) - As Amended:  April 13, 2004 

          Policy Committee:                              Transportation  
          Vote:        13-0

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:               

           SUMMARY  

          This bill requires the Air Resources Board (ARB) to adopt  
          statewide guidelines for the production and licensing of  
          hydrogen fuel cell (HFC) consumer refueling stations.

           FISCAL EFFECT  

          Moderate costs, perhaps $180,000 in FY 2004-05, to the ARB to  
          develop guidelines.  The bill requires these ARB activities to  
          be covered by existing funding resources. (GF or Air Pollution  
          Control Fund.) 

           COMMENTS  

           1)Rationale  .  The author contends that one of the major barriers  
            to development and widespread availability of HFC vehicles is  
            the lack of a comprehensive network of HFC refueling stations  
            in the state.  This bill requires the ARB to develop  
            guidelines for HFC refueling stations as a first step in  
            creating such a network and encouraging California car buyers  
            to purchase HFC vehicles.
           
          2)Background  .  HFCs, as an alternative source of energy to power  
            vehicles, have the potential to satisfy many of California's  
            energy needs, while reducing carbon dioxide and other  
            greenhouse gas and air pollutant emissions.  HFC technology is  
            ready to be used to power most motor vehicles but vehicle  
            manufacturers will not build significant numbers of HFC  
            vehicles unless there are an adequate refueling network, and  
            energy companies will not build significant numbers of  
            refueling stations unless there are an adequate number of HFC  








                                                                  AB 1966
                                                                  Page  2

            vehicles on the highway.

           3)Hydrogen Highway  .  Governor Schwarzenegger recently signed an  
            executive order (S-7-04) that requires the CalEPA to develop a  
            plan for the "rapid transition to a hydrogen economy in  
            California?"  The plan, to be updated biennially, must  
            recommend to the governor and the Legislature ways of  
            accelerating progress in hydrogen use, financing mechanisms,  
            and strategies to ensure hydrogen generation results in the  
            lowest possible emissions of greenhouse gases and other air  
            pollutants.  The executive order also commits the state to  
            achieving, by 2010, the goals of having HFC vehicles  
            commercially available to consumers, including a significant  
            number of HFC vehicles in the state's fleet, developing safety  
            standards and other prerequisites for HFC refueling stations  
            and having appropriate incentives in place for purchase of HFC  
            vehicles.

           4)HFC Refueling Stations  would use electricity, generated onsite  
            by photovoltaic cells or from the electrical grid, to extract  
            hydrogen from water using electrolysis.  Onsite equipment  
            would compress the hydrogen for cost- and space-effective  
            storage, the compressed hydrogen would be stored in a tank  
            onsite, and the fuel would be delivered into an HFC vehicle  
            using an electrical connector with a nozzle.  There are  
            currently only a handful of experimental stations in  
            California that serve a restricted number of customers.

           Analysis Prepared by  :    Steve Archibald / APPR. / (916)  
          319-2081