Safe Drinking Water, Wildfire Prevention, Drought Preparedness, and Clean Air Bond Act of 2024: Administrative Procedure Act: exemption: program guidelines and selection criteria.

In subsection (f)(3)(B), removed the stray word 'Publish' that appeared before 'Transmit copies of the draft solicitation and evaluation guidelines' (the word 'publish' already appears later in the same sentence). Also corrected 'at least 30 days. days,' to 'at least 30 days,' by removing the duplicated word and erroneous period.

Header changed from 'Assembly Bill No. 35' with legislative passage dates to 'STATE OF CALIFORNIA AUTHENTICATED ELECTRONIC LEGAL MATERIAL' with 'CHAPTER 89' and the Governor's approval date of July 16, 2026.

Page numbers changed from '94 / AB 35' to '93 / Ch. 89' throughout, reflecting renumbering in the chaptered format.

Formatting and indentation of the legislative counsel's digest and statutory text were adjusted for the chaptered layout, with no changes to the actual legal content.

New Section 1 amends Public Resources Code Section 90135 to add oversight provisions for the Proposition 4 bond act, including annual public reporting of all program and project expenditures with details on location, objectives, status, outcomes, public benefits to vulnerable populations, total cost, bond funding amounts, and matching funds.

New audit requirements: the Department of Finance must provide for independent audits of bond act expenditures, and the State Auditor or Controller may conduct full audits if an existing audit reveals impropriety. Grant recipients must provide adequate reporting of expenditures.

Section 21162.4 was deleted entirely. This section had required that any legal challenge to a clean hydrogen environmental assessment or permit be resolved within 270 days of filing, and had directed the Judicial Council to adopt an implementing rule by December 31, 2026.

The regulatory process for Proposition 4 program guidelines and selection criteria was changed from allowing adoption as emergency regulations under the Administrative Procedure Act to a complete exemption from the APA (Chapter 3.5 of the Government Code). This means agencies can adopt these regulations without any APA review, publication, or comment requirements.

The definition of a clean hydrogen transportation project was narrowed: the requirement that the project have received state or federal funding on or before January 1, 2032 was removed. Now only inclusion in an Alliance for Renewable Clean Hydrogen Energy Systems hydrogen hub application to the U.S. Department of Energy is required.

New provision requires that costs for publications, audits, statewide bond tracking, cash management, and related oversight activities be funded from bond proceeds and shared proportionally among all programs funded by the division.

The entire clean hydrogen transportation project chapter (Sections 21162-21162.3) was deleted. This removed a streamlined environmental review process for hydrogen pipeline projects that would have replaced full CEQA review with a 'clean hydrogen environmental assessment,' including a 270-day decision deadline, no alternatives analysis requirement, and a sunset date of January 1, 2036.

The vote requirement changed from a simple majority to a two-thirds vote, indicating the bill now requires supermajority support in both chambers.

New requirements were added for state entities administering competitive grant programs under Proposition 4 bond funds. Before disbursing grants, agencies must: develop draft solicitation and evaluation guidelines, publish them for at least 30 days of public comment, post and respond to all written comments, offer tribal consultation to impacted tribes, finalize the guidelines, and submit them to the Secretary of the Natural Resources Agency for verification and public posting (with an exception for the State Water Resources Control Board).

A new Section 2 declares the bill an urgency statute that takes effect immediately, citing climate change intensifying wildfire risk, drought, and threats to drinking water as justification. This allows agencies to begin administering Proposition 4 bond funds without waiting for the standard 90-day delay.

The Administrative Procedure Act exemption was restructured. The old version simply stated that Chapter 3.5 of the Government Code does not apply to program guidelines. The new version keeps the emergency regulation pathway but adds an alternative non-emergency regulatory pathway and layers on the new public comment, tribal consultation, and oversight requirements as conditions before grants can be disbursed.

A transition provision was added stating that if a state entity had already developed and adopted compliant project solicitation and evaluation guidelines before the effective date, using those existing guidelines constitutes compliance with the new requirements.

The funding/hydrogen hub eligibility criterion was broadened. Previously, the entire project had to be included in a hydrogen hub application. Now, only 'a component of the project' needs to have been included in an Alliance for Renewable Clean Hydrogen Energy Systems hydrogen hub application to qualify.

The criteria pollutant reduction requirement was narrowed and redefined. It previously required operational reductions in emissions of criteria pollutants broadly, including reductions generated by users. It now specifically requires reductions in oxides of nitrogen caused by the replacement of fuels used by end users with clean hydrogen transported by the project.

A new approval finding option (C) was added to the lead agency's findings required before approving a clean hydrogen environmental assessment. Under this new option, specific economic, legal, social, technological, or other considerations - including provision of employment opportunities for highly trained workers - can make mitigation measures infeasible, allowing the project to be approved despite unmitigated significant effects.

Coauthors were added: Assembly Members Avila Farias, Carrillo, Mark Gonzalez, Gipson, McKinnor, Nguyen, Pacheco, Michelle Rodriguez, Blanca Rubio, and Ta, plus Senators Archuleta and Grayson.

State entities administering competitive grant programs must now transmit copies of draft solicitation and evaluation guidelines to the fiscal committees and appropriate policy committees of the Legislature, in addition to publishing them for public comment. They must also hold a noticed public meeting on the draft guidelines before finalizing them.

A new requirement was added that upon adoption of final guidelines, state entities must transmit copies to the fiscal committees and appropriate policy committees of the Legislature.

The public comment response obligation was strengthened from 'respond to each public comment' to 'respond in writing to each public comment.'

A new exemption was added (paragraph 5) stating that the guideline development and approval requirements do not apply to programs funded by appropriations made in the Budget Act of 2025, or in any bill identified in Section 39.00 of the Budget Act of 2025, from the Safe Drinking Water, Wildfire Prevention, Drought Preparedness, and Clean Air Fund.

The legislative counsel's digest was revised to remove language about deleting emergency regulation provisions, instead simply stating the bill exempts regulations from the Administrative Procedure Act. Page numbers were corrected from 96 to 95, and minor formatting and typo issues were fixed throughout.