BILL NUMBER: SB 757	AMENDED
	BILL TEXT

	AMENDED IN SENATE  APRIL 13, 2005

INTRODUCED BY   Senator Kehoe
   (Coauthor: Assembly Member Pavley)

                        FEBRUARY 22, 2005

   An act to add Chapter 4.7 (commencing with Section 25370) to
Division 15 of the Public Resources Code, relating to energy
resources.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 757, as amended, Kehoe.  Petroleum Demand Reduction Act.
   Existing law requires the State Energy Resources Conservation and
Development Commission to implement and administer various energy
generation and conservation programs.
   This bill would enact the Petroleum Demand Reduction Act, which
would declare that it is the policy of the state that state agencies
should take all cost-effective and technologically feasible actions
needed to achieve a net zero increase in onroad petroleum consumption
by 2010, and a significant reduction in petroleum demand and
 oil   onroad petroleum  consumption by
2020. The act would further declare that state agencies should take
the state's petroleum  usage  reduction goals into account
in adopting rules and regulations, including the findings and
recommendations of the commission in the Integrated Energy Policy
Report.
   The bill would authorize the State Air Resources Board, in
corporation with the South Coast Air Quality Management District and
other state and local agencies to adopt regulations requiring fleet
 vehicles, including publicly owned fleet vehicles, 
 operators, both public and private  to purchase and
install alternative fuel vehicles and advanced transportation
technologies where technologically feasible and cost effective,
taking into account lower petroleum consumption, increased
efficiency, and life cycle operating costs.
   The bill would require the California Environmental Protection
Agency, in consultation with the State Air Resources Board, the
Department of Toxic Substances Control, and air quality management
districts throughout the state, to develop and adopt model rules and
regulations to ensure that all petroleum refining, storage, waste
treatment and disposal sources, irrespective of their date of
original construction or installation, and to require installation of
best available control technology and pollution prevention measures
that reflect the best practices available, so as to provide the
maximum feasible and cost-effective reduction in air pollution, water
pollution, and toxic waste generation, while protecting the public
and community health, and worker health and safety over a 
10year   10-year phase-in period not to extend
beyond January 1, 2016.
   The bill would require the commission to expand the scope of its
oil industry price and supply reporting, monitoring, and analysis to
include trends in world oil demand growth, including known and proven
oil reserves  , and carry out oversight and investigation of
market power abuses and unfair competition during periods of supply
and price volatility, and would authorize the commission to impose
fees to cover the costs associated with that reporting, monitoring,
and analysis  .  The bill would require the commission
to refer to The Attorney General any cases in which the commission
determines that there may be market abuse or unfair competition.

   The bill would require the Secretary of the Business, 
Housing, and  Transportation  and Housing  Agency,
and the Secretary for Environmental Protection, not later than July
1, 2006, in consultation with the Department of Finance and the
commission, to submit recommendations to the Governor and the
Legislature regarding alternative revenue sources to supplement or
replace taxes on gasoline and diesel fuel, which may be used to fund
state investment in the state's transportation infrastructure, as
provided.
   The bill would require the Secretary for Environmental Protection,
not later than January 1, 2007, in consultation with the commission
and the State Air Resources Board, to submit recommendations to the
Governor and the Legislature regarding the cost-effective and
technologically feasible measures needed to achieve a net zero
increase in petroleum consumption by 2010, and a significant
reduction in  oil   onroad petroleum 
consumption by 2020.
    The bill would require the California Environmental
Protection Agency, not later than January 1, 2007, with the
assistance and consultation of the State Air Resources Board, the
commission, and the South Coast Air Quality Management District to
adopt recommendations, policies, and programs, as appropriate, to
increase the diversity of the state's transportation energy supplies,
as specified.   
   The bill would require the secretary to take action intended to
influence the United States Congress and Department of Transportation
to double the combined fuel economy of cars and light trucks by
2020, including performing analyses and participating in forums that
the secretary deems useful. The bill would require all state agencies
to cooperate with the secretary concerning this action. 
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Chapter 4.7 (commencing with Section 25370) is added to
Division 15 of the Public Resources Code, to read:
      CHAPTER 4.7.  Petroleum demand reduction act

   25370.  This section shall be known, and may be cited, as the
California Petroleum Demand Reduction Act.
   25371.  The Legislature finds and declares all of the following:

   (1) 
    (a   )    California's increasing
demand for petroleum and rapidly growing consumption of gasoline and
diesel fuel pose substantial risks to the state's economy and
environment.  
   (2) 
    (b)    Growing instability in global oil
supplies and rapidly increasing demand in China, India, and
throughout the world are likely to increase California's
vulnerability to oil supply disruptions and sudden price increases.

   (3) 
    (c)    Aggressive pursuit of energy efficiency
and conservation measures and expanded use of renewable energy
sources have been shown to help stabilize energy supplies and lower
costs to consumers during California's electricity crisis.  
   (4) 
    (d)    California's current and future levels
of oil demand and rapidly growing consumption of gasoline and diesel
fuel far exceeds California's refinery capacity, which results in
limited competition and abuses of market power by oil suppliers and
refiners.  
   (5) 
    (e)    Unless the state's rapid rate of growth
in oil consumption and rising levels of consumption of imported oil
and petroleum products are stabilized and gradually reduced,
California is likely to continue to experience price spikes and
supply disruptions, which will harm the state's economy and business
climate.  
   (6) 
    (f)    Cost-effective options exist today,
including alternative fuels and advanced technologies, such as hybrid
electric vehicles, which can lessen economic instability caused by
high fuel prices and price spikes, while reducing risks to public
health and environmental degradation caused by increased consumption
of petroleum fuel.  (7)    
   (g) The commission and the State Air Resources Board have
determined that improving the fuel efficiency of new vehicles would
dramatically reduce petroleum demand and that the efficiency of new
cars and light trucks can be improved significantly with existing and
emerging automotive technologies. 
    (h)    Reducing the rate of growth and
achieving a net zero increase in  onroad  petroleum
consumption levels by 2010, and then achieving significant reductions
in California  oil   onroad petroleum 
consumption by the year 2020 are technologically feasible and
cost-effective public policy objectives, which will create new jobs,
economic development, and investment opportunities in alternative
fuels and advanced transportation technologies.  
   (8) 
    (i)    Petroleum refineries are known sources
of hazardous waste and toxic air pollutants, as well as groundwater
and soil contamination, all of which are known to cause cancer,
developmental and reproductive problems, and respiratory illness.

   (9) 
    (j)    Petroleum refinery workers and
communities located in close proximity to a petroleum refinery are
particularly vulnerable to the public health impacts associated with
petroleum refining, and the petroleum refining industry should take
every feasible measure to protect these exposed populations.

   (10) 
    (k)    The Governor, the Legislature, and state
and local agencies should make every effort to reduce oil demand and
consumption of petroleum fuels in California through aggressive
public education regarding the environmental and economic risks
caused by current and projected petroleum consumption, through
sustained commitment and public agency procurement of energy
efficiency and alternative transportation fuels, and by promoting the
modernization and installation of best available technologies on
California's oil refineries.
   25372.  It is the policy of the State of California that state
agencies should take every cost-effective and technologically
feasible action needed to achieve a net zero increase in onroad
petroleum consumption by 2010, and a significant reduction in
 petroleum demand and oil consumption by 2020. In addition,
those   on-road petroleum consumption by 2020. As used
in this section, "net zero increase" means no increase compared to
2006 consumption.  Those  state agencies should take the state's
petroleum  usage  reduction goals into account in adopting
rules and regulations, including the findings and recommendations of
the commission in the most recently adopted Integrated Energy Policy
Report.
   25373.  The State Air Resources Board, in cooperation with the
South Coast Air Quality Management District and other state and local
agencies, may adopt regulations requiring fleet  vehicles,
including publicly owned fleet vehicles   operators,
both public and private  , to purchase and install alternative
fuel vehicles and advanced transportation technologies where
technologically feasible and cost-effective, taking into account
lower petroleum consumption, increased efficiency, and life cycle
operating costs.
   25374.  The California Environmental Protection Agency, in
consultation with the State Air Resources Board, the Department of
Toxic Substances Control, and air quality management districts, shall
develop and adopt model rules and regulations to ensure that all
petroleum refining, storage, and waste treatment and disposal
sources, irrespective of their date of original construction or
installation, install best available control technology and pollution
prevention measures that reflect the best practices available, so as
to provide the maximum feasible and cost-effective reduction in air
pollution, water pollution, and toxic waste generation, while
protecting the public and community health, and worker health and
safety over a  10 year   10-year  phase-in
period not to extend beyond January 1, 2016.
   25375.  The commission shall expand the scope of its oil industry
price and supply reporting, monitoring, and analysis to include
trends in world oil demand growth, including known and proven oil
reserves  , and carry out oversight and investigation of
market power abuses and unfair competition during periods of supply
and price volatility, and may impose fees to recover its costs.
  . The commission shall refer to the Attorney General
any cases in which it determines that there may be market abuse or
unfair competition. 
  SEC. 2.  Not later than July 1, 2006, the Secretary of the
Business,  Housing and Transportation  
Transportation and Housing  Agency and the Secretary for
Environmental Protection, in consultation with the Department of
Finance and the State Energy Resources Conservation and Development
Commission, shall submit recommendations to the Governor and the
Legislature regarding alternative revenue sources to supplement or
replace taxes on gasoline and diesel fuel, which may be used to fund
state investment in the state's transportation infrastructure. In
developing the recommendations, the secretaries shall evaluate the
economic feasibility of alternative financing measures, the potential
to support needed levels of investment in transportation
infrastructure, and the impact on social equity and mobility of
low-income and disadvantaged citizens. In addition, consideration of
those recommendations shall be given to determine the extent to which
they are compatible with existing state policies to reduce petroleum
consumption, accelerate the deployment of alternative fuels, and
achieve air quality standards and global warming targets.
  SEC. 3.  Not later than January 1, 2007, the Secretary for
Environmental Protection Agency, in consultation with the State
Energy Resources Conservation and Development Commission and the
State Air Resources Board, shall submit recommendations to the
Governor and Legislature regarding the cost-effective and
technologically feasible measures needed to achieve a net zero
increase in  onroad  petroleum consumption by 2010, and a
significant reduction in  oil   onroad petroleum
 consumption by 2020.
  SEC. 4.  (a) Not later than January 1, 2007, The California
Environmental Protection Agency, with the assistance and consultation
of the  California   State  Air Resources
Board, the California Energy Commission, and the South Coast Air
Quality Management District, shall adopt  an action plan
  recommendations, policies, and programs, as
appropriate,  to increase the diversity of the state's
transportation energy supplies  consistent with the goal of
increasing the use of nonpetroleum fuels to 20 percent of onroad fuel
consumption by 2020  .
   (b) Development of the  action plan  
recommendations, policies, and programs  required pursuant to
subdivision (a) shall integrate state ambient air quality standards,
including, but not limited to, those for particulates, criteria
pollutants, toxic air contaminants, and greenhouse gases, to ensure
that no petroleum reduction strategy or alternative fuel policy
impedes the state's ability to comply with federal air quality
standards.
  SEC. 5.    The Secretary for Environmental Protection shall
take action intended to influence United States Congress and the
United States Department of Transportation to double the combined
fuel economy of cars and light trucks by 2020. That action shall
include, but not be limited to, performing analyses and participating
in forums that the secretary deems useful. All state agencies shall
cooperate with the secretary concerning this action.