(b) The state board shall provide preference in awarding funding to projects with higher benefit-cost scores that maximize the purposes and goals of the Air Quality Improvement Program. The state board may give additional preference based on the following criteria, as applicable, in funding awards to projects:

1. (1) Proposed or potential reduction of criteria or toxic air pollutants.
2. (2) Contribution to regional air quality improvement.
3. (3) Ability to promote the use of clean alternative fuels and vehicle technologies as determined by the state board, in coordination with the commission.
4. (4) Ability to achieve climate change benefits in addition to criteria pollutant or air toxic emissions reductions.
5. (5) Ability to support market transformation of California’s vehicle or equipment fleet to utilize zero-emission technologies.
6. (6) Ability to leverage private capital investments.

(c) The program shall be limited to competitive grants, revolving loans, loan guarantees, loans, and other appropriate funding measures that further the purposes of the program. Projects to be funded shall include only the following:

1. (1) On-road and off-road equipment projects that are cost effective.
2. (2) Projects that provide mitigation for off-road gasoline exhaust and evaporative emissions.
3. (3) Incentives for small off-road equipment replacement to encourage consumers to replace internal combustion engine lawn and garden equipment.

4. (4) Incentives for medium- and heavy-duty vehicles and equipment mitigation, including all of the following:

   1. (A) Lower emission schoolbus programs.
   2. (B) Electric, hybrid, and plug-in hybrid on-road and off-road medium- and heavy-duty equipment.
   3. (C) Regional air quality improvement and attainment programs implemented by the state or districts in the most impacted regions of the state.
   4. (D) Precommercial demonstrations of advanced vehicles, engines, equipment, and transportation systems.
5. (5) Workforce training initiatives related to advanced energy technology designed to reduce air pollution, including state-of-the-art equipment and goods, and new processes and systems. Workforce training initiatives funded shall be broad-based partnerships that leverage other public and private job training programs and resources. These partnerships may include, though are not limited to, employers, labor unions, labor-management partnerships, community organizations, workforce investment boards, postsecondary education providers including community colleges, and economic development agencies.
6. (6) Incentives to identify and reduce emissions from high-emitting light-duty vehicles.

(d)

1. (1) Beginning January 1, 2011, the state board shall submit to the Legislature a biennial report to evaluate the implementation of the Air Quality Improvement Program established pursuant to this chapter.

2. (2) The report shall include all of the following:

   1. (A) A list of projects funded by the Air Quality Improvement Account.
   2. (B) The expected benefits of the projects in promoting clean, alternative fuels and vehicle technologies.
   3. (C) Improvement in air quality and public health, greenhouse gas emissions reductions, and the progress made toward achieving these benefits.
   4. (D) The impact of the projects in making progress toward attainment of state and federal air quality standards.
   5. (E) Recommendations for future actions.
3. (3) The state board may include the information required to be reported pursuant to paragraph (1) in an existing report to the Legislature as the state board deems appropriate. The state board may also include in an existing report the description of how grant, loan, voucher, or other incentive projects that receive moneys from the Air Quality Improvement Fund are implementing the labor standards required by Chapter 3.6 (commencing with Section 39680) of Part 2, as applicable.