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