BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Carole Migden, Chairwoman
757 (Kehoe)
Hearing Date: 5/23/05 Amended: 5/3/05
Consultant: Miriam Barcellona IngenitoPolicy Vote: EU&C 7-3; EQ
6-3
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BILL SUMMARY:
SB 757 would enact the Oil Conservation, Efficiency and
Alternative Fuels Act.
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Fiscal Impact (in thousands)
Major Provisions 2005-06 2006-07 2007-08 Fund
ARB/CalEPA >$1,100 >$900 >$900
Special*
CEC $93 $185 $185
Special**
AG unknown, minor to
significantGeneral
State Agencies: Net-Zero Increase unknown but significant
costs General
*Air Pollution Control Fund
**Energy Resources Programs Account
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STAFF COMMENTS: This bill meets the criteria for referral to the
Suspense file.
Existing law requires the State Energy Resources Conservation
and Development Commission (California Energy Commission or CEC)
to implement and administer various generation and conservation
programs. Additionally, CEC is responsible for monitoring
transportation fuel supplies and prices in the State. CEC is
required under current law to develop biennially an integrated
energy policy report that looks at issues of supply, demand, and
supply reliability for transportation fuel.
SB 757 would enact the Oil Conservation, Efficiency and
Alternative Fuels Act and would do all of the following:
1.Make legislative findings and declarations.
2.Set a policy for state agencies to take every cost-effective
and technologically feasible action to achieve a net-zero
increase in on-road petroleum consumption by 2010 and a
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significant reduction by 2020, and provides that those state
agencies should take the reduction goals into account in
adopting rules and regulations. Costs are unknown, but would
be significant. STAFF NOTES that while the bill is on
suspense, the author will take significant amendments that
would make definitions, eliminate references to net-zero
increases and instead insert language about slowing the growth
in demand and increasing vehicle effectiveness and alternative
fuels. These amendments would likely decrease costs
significantly.
3.Authorize the Air Resources Board (ARB), in cooperation with
the South Coast Air Quality Management District (AQMD) and
other state and local agencies, to adopt regulations requiring
all public and private fleet operators to purchase and install
alternative fuel vehicles and advanced transportation
technologies where feasible and cost effective, as specified.
Costs to ARB would be about two positions per rule. STAFF
NOTES that while the bill is on suspense, the author intends
to work with ARB to reduce costs by incorporating these rules
into existing requirements placed on ARB in current law.
4.Require the California Environmental Protection Agency
(CalEPA), in consultation with ARB and the Department of Toxic
Substances Control, and air quality management districts, to
develop and adopt model rules and regulations to ensure that
petroleum refining, storage, and waste management and disposal
sources install best available technology and pollution
prevention measures reflecting the best practices available 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 phased period not to extend
beyond January 1, 2016. ARB would require five positions and
$500,000 to adopt local model rules. STAFF NOTES that CalEPA
does not adopt regulations and the bill should be amended to
require the regulations be done by the ARB.
5.Authorize the State Energy Resources Conservation and
Development Commission (California Energy Commission or CEC)
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.
The CEC must refer cases to the Attorney General when there
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may be market abuse or unfair competition. CEC estimates that
these provisions would require constant and close monitoring
of supply and price changes in the marketplace, documentation
of market events and response, reporting, and administration
of contact services for market expertise and analyses. These
activities would require one position at about $85,000 and
$100,000 in annual contract funds for consultants. The
Attorney General's Office (AG) indicates that it this bill
could result in increased workload associated with additional
referrals made; however, because the likely volume of
referrals is unknown, the AG was unable to provide a fiscal
estimate. Costs could be minor to significant.
6.Require the Secretary of the Business, Transportation and
Housing Agency and CalEPA to submit recommendations to the
Governor and the Legislature by July 1, 2006, regarding
alternative revenue sources to supplement or replace gasoline
and diesel fuel taxes that may be used to fund state
transportation infrastructure investments, taking into
consideration certain factors. BT&H estimates its costs would
be minor and absorbable and CalEPA's costs are unknown, CalEPA
may not have the expertise to develop such a report.
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7.Require CalEPA, in consultation with the CEC and ARB, to
submit recommendations to the Governor and the Legislature by
January 1, 2007, on cost-effective and technologically
feasible measures needed to achieve a net zero increase in
on-road petroleum consumption by 2010, and a significant
reduction in on-road petroleum consumption by 2020. ARB
indicates that it would require about two positions or
$200,000.
8.Require CalEPA, with assistance of the ARB, CEC, and South
Coast AQMD, to adopt recommendations, policies, and programs
by January 1, 2007, to increase diversity of the state's
transportation energy supplies consistent with the goal of
increasing the use of non-petroleum fuels to 20% of on-road
fuel consumption by 2020, with certain conditions. ARB
estimates it would require one-time costs of about $200,000.
9.Require CalEPA to take action to influence Congress and the
U.S. Department of Transportation to double the combined fuel
economy of cars and light trucks by 2020. That action must
include, but not be limited to, performing analyses and
participating in forums that the secretary deems useful. Costs
associated with this provision would be minimal.
As noted throughout the analysis, the author intends to make a
number of substantive amendments that will reduce costs while
the bill is on suspense.