(a)  (1)  The Legislature finds and declares that variances from the state board’s gasoline specifications may be needed if gasoline producers cannot meet the specifications as required due to circumstances beyond their reasonable control, and that the state board’s process for granting variances from fuel specifications should be clarified.

(2)  It is the intent of the Legislature that the variance process consider the impacts of granting the variance on all parties, including the applicant, the public, the producers of complying fuel, and upon air quality.

(b)  The state board may grant variances from gasoline specifications adopted by the state board pursuant to Sections 43013 and 43018. In granting a variance, the board may impose fees and conditions.

(c)  The state board shall adopt regulations to implement this section in accordance with Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code. The regulations shall establish guidelines for the consideration of variances and the imposition of fees and conditions. Any fees or conditions shall be imposed in a fair and equitable manner consistent with the regulations. The regulations shall include methods for estimating excess emissions and factors to be considered in determining what is beyond the reasonable control of the applicant. The regulations also shall establish a schedule of fees to be paid by an applicant for a variance to cover the reasonable and necessary costs to the state board in processing the variance. The state board shall adopt initial regulations as emergency regulations after conducting at least one public workshop. The initial adoption of emergency regulations following the effective date of this section shall be deemed to be an emergency and necessary for the immediate preservation of the public peace, health and safety, or general welfare.

(d)  All variance fee revenues collected pursuant to this section by the state board, except those fees paid by an applicant for a variance to cover the reasonable and necessary costs to the state board for processing the variance, shall be transmitted to the Treasurer for deposit in the High Polluter Repair or Removal Account created pursuant to subdivision (a) of Section 44091. All money deposited in the account pursuant to this section shall be available, upon appropriation by the Legislature, to implement a program for accelerated retirement of light-duty vehicles to achieve the emission reductions required by the M-1 Strategy of the 1994 State Implementation Plan.

(e)  In considering whether to grant a variance, and with regard to any fees and conditions that are imposed as part of the variance, the state board shall take into account whether granting the variance will place the applicant at a cost advantage over other persons, including those persons who produce complying gasoline.

(f)  Any determination of the state board, or the executive officer of the state board pursuant to the authority delegated pursuant to Section 39516, regarding the issuance of any variance from gasoline specifications shall be based solely upon substantial evidence in the record of the variance proceeding. The variance shall be valid for a period not exceeding 120 days, commencing on or after March 1, 1996. The variance may be extended, subject to this section, for up to 90 additional days, upon a showing of need. The board shall grant a variance only for the minimum period required to attain compliance.

(g)  If a physical catastrophe occurs to a producer of complying gasoline, the state board may extend a variance upon the showing of need. Notwithstanding subdivision (f), any variance extension related to a physical catastrophe shall be approved by the state board. As used in this subdivision, “physical catastrophe” means a sudden unforeseen emergency beyond the reasonable control of the refiner, causing the severe reduction or total loss of one or more critical refinery units that materially impact the refiner’s ability to produce complying gasoline. “Physical catastrophe” does not include events which are not physical in nature such as design errors or omissions, financial or economic burdens, or any reduction in production that is not the direct result of qualifying physical damage.

(h)  Notwithstanding any other provision of law, except in the case of emergency variances, the state board shall provide at least 10 days’ public notice of its consideration of any variance or extension.

(i)  Subdivisions (b) and (e) do not constitute a change in, but are declaratory of, existing law.

(Added by Stats. 1995, Ch. 675, Sec. 1. Effective January 1, 1996.)