BILL ANALYSIS                                                                                                                                                                                                    



                                                                  SB 426
                                                                  Page  1

          SENATE THIRD READING
          SB 426 (Simitian)
          As Amended  August 24, 2006
          Majority vote

           SENATE VOTE  :   24-14
            
           UTILITIES & COMMERCE             5-5                NATURAL  
          RESOURCES               7-2     
           
           ----------------------------------------------------------------- 
          |Ayes:|Levine, De La Torre,      |Ayes:|Hancock, Ruskin, Laird,   |
          |     |Jerome Horton, Montanez,  |     |Nava, Saldana, Wolk,      |
          |     |Ridley-Thomas             |     |Lieber                    |
          |     |                          |     |                          |
          |-----+--------------------------+-----+--------------------------|
          |Nays:|Bogh, Baca, Blakeslee,    |Nays:|La Malfa, Harmon          |
          |     |Keene, Wyland             |     |                          |
          |     |                          |     |                          |
           ----------------------------------------------------------------- 
           APPROPRIATIONS      12-4                                        
           
           ----------------------------------------------------------------- 
          |Ayes:|Chu, Bass, Berg,          |     |                          |
          |     |Karnette, Klehs, Leno,    |     |                          |
          |     |Nation, Oropeza, Laird,   |     |                          |
          |     |Saldana, Yee, Mullin      |     |                          |
          |     |                          |     |                          |
          |-----+--------------------------+-----+--------------------------|
          |Nays:|Sharon Runner, Emmerson,  |     |                          |
          |     |Nakanishi, Walters        |     |                          |
          |     |                          |     |                          |
           ----------------------------------------------------------------- 
           SUMMARY  :  Requires the California Energy Commission (CEC) to  
          evaluate and rank every proposed liquefied natural gas (LNG)  
          terminal and directs the Governor to disapprove an application for  
          a license to construct and operate an LNG terminal if the project  
          is not ranked one of the two highest ranked sites. 

           EXISTING LAW:  Under the federal Deepwater Port Act of 1974,  
          precludes the U.S. Secretary of Transportation from issuing a  
          license for the construction and operation of an  off-shore  natural  
          gas structure in federal waters without the approval of the  
          Governor of each adjacent coastal state, and can condition the  
          license on making the project consistent with state environmental,  
          land-use, water, and coastal management programs.







                                                                  SB 426
                                                                  Page  2


           FISCAL EFFECT  :  According to the Assembly Appropriations Committee  
          analysis, for the initial assessment and ranking in 2006, CEC  
          estimates $250,000 for 3.0 personnel years (PYs) and up to $1  
          million for consulting contracts.  For evaluation of subsequent LNG  
          proposals, CEC estimates $85,000 for 1.0 PY and about $100,000 for  
          consulting contracts.

           COMMENTS  :  Current law permits the Governor to approve or  
          disapprove an off-shore LNG facility using discretion.  This bill  
          requires the Governor to disapprove an application if it meets  
          specific criteria.  There are currently three active proposals to  
          build LNG terminals off the California coast. One of the  
          developers, BHP Billiton, is in the final phases of the licensing  
          process and has completed its environmental impact report for the  
          Cabrillo Deepwater Port project off of Ventura County.  The project  
          proposal must be heard and approved by the California Coastal  
          Commission and the State Lands Commission prior to being submitted  
          to the Governor for final approval.

           Analysis Prepared by  :  Gina Adams / U. & C. / 319-2083FN: 0016441