BILL ANALYSIS
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UNFINISHED BUSINESS
Bill No: SB 757
Author: Kehoe (D), et al
Amended: 8/21/06
Vote: 21
SEN. ENERGY, UTIL. & COMMUNICATIONS COMM. : 7-3, 4/5/05
AYES: Escutia, Alarcon, Bowen, Dunn, Kehoe, Murray,
Simitian
NOES: Battin, Campbell, Cox
NO VOTE RECORDED: Morrow
SENATE ENVIRONMENTAL QUALITY COMMITTEE : 6-3, 4/25/05
AYES: Lowenthal, Chesbro, Escutia, Figueroa, Kuehl,
Simitian
NOES: Runner, Campbell, Cox
SENATE APPROPRIATIONS COMMITTEE : 8-5, 5/26/05
AYES: Migden, Alarcon, Alquist, Escutia, Florez, Murray,
Ortiz, Romero
NOES: Aanestad, Ashburn, Battin, Dutton, Poochigian
SENATE FLOOR : 21-15, 5/31/05
AYES: Alarcon, Alquist, Bowen, Cedillo, Chesbro, Dunn,
Escutia, Figueroa, Kehoe, Kuehl, Lowenthal, Migden,
Murray, Ortiz, Perata, Romero, Simitian, Soto, Speier,
Torlakson, Vincent
NOES: Aanestad, Ackerman, Ashburn, Battin, Campbell, Cox,
Denham, Ducheny, Dutton, Hollingsworth, Maldonado,
Margett, McClintock, Morrow, Poochigian
NO VOTE RECORDED: Florez, Machado, Runner, Scott
ASSEMBLY FLOOR : 48-29, 8/24/06 - See last page for vote
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SUBJECT : Oil Conservation, Efficiency, and Alternative
Fuels Act
SOURCE : Author
DIGEST : This bill enacts the Oil Conservation,
Efficiency and Alternative Fuels Act.
Assembly Amendments make numerous changes to further
clarify the intent that the state take comprehensive and
coordinated actions to examine alternative sources of fuel,
increased fuel efficiency and conservation measures.
ANALYSIS : 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. The
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.
This bill enacts the Oil Conservation, Efficiency, and
Alternative Fuels Act and does all of the following:
1.Makes legislative findings and declarations.
2.Sets a policy that state agencies shall take every
cost-effective and technologically feasible action to
reduce the growth of petroleum demand and increase
vehicle energy efficiency and the use of alternative
fuels. The bill provides that state agencies shall take
the state's transportation energy goals into account in
adopting rules and regulations. The bill provides a
definition for "technologically feasible".
3.Require the California Environmental Protection Agency
(CalEPA), not later than January 1, 2008, and every
third year thereafter, with the assistance of other
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specified public agencies, to submit to the Legislature
an assessment of the transportation policies adopted
pursuant to #2 above.
4.Requires that assessment to include information on the
status of adopted policies, the Integrated Energy Policy
Report implementation, and alternative fuel fleet
procurement and infrastructure funding needs.
5.Requires any actions taken pursuant to #2 above to
integrate existing air quality standards.
6.Requires the Air Resources Board, in adopting rules and
regulations to reduce air pollution and toxic air
contaminants from motor vehicle fuels, to develop
requirements, incentives, and partnerships for publicly
administered fleets to purchase and install alternative
fuel vehicles and advanced transportation technologies,
as specified.
7.Requires the 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 will be required
to refer to the Attorney General information it believes
may reflect market abuse or unfair competition.
8.Specifies that this bill does not authorize the
imposition of any tax or fee or on petroleum refiners or
suppliers nor does it confer or reduce the existing
authority of ARB, CEC, or any other regulatory agency to
order the production, sale, or offering for sale of any
specific fuel.
9.Requires the Secretary of the Business, Transportation
and Housing Agency to submit recommendations to the
Governor and Legislature by March 31, 2008, regarding
alternative revenue sources to supplement or replace
lost gasoline and diesel fuel tax revenues that would
otherwise fund state transportation infrastructure
investments.
10.Requires CalEPA to take action to influence Congress and
the U.S. Department of Transportation to double the
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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.
Comments
Purpose of Bill . According to the sponsor, "California
faces a future of increasing petroleum dependence, supply
disruptions, and transportation fuel price volatility. As
a consequence, the state has become a significant importer
of oil from foreign countries often plagued with military
and political instability. If this import trend continues,
the state's economy, oil supply and price fluctuations,
will be vulnerable to external disruptions and geopolitical
instability, making the reduction of petroleum consumption
a matter of energy dependence."
This bill addresses improvement of oil refinery safety and
pollution prevention, alternatives to petroleum based
transportation fuels, and monitoring global petroleum
adequacy. The author's office believes that petroleum
reduction in the state strengthens national security,
supports energy independence, creates jobs and business
opportunities, reduces air, water, and soil pollution,
while improving public health and worker safety, and
increases economic competitiveness of alternative fuels and
energy resources.
The oil industry argues that investment in oil refineries
will suffer if California establishes a goal of reducing
gasoline demand by 2020. It contends that, while this bill
explicitly states that it does not authorize the imposition
of any taxes or fees, there is nothing in it to prevent
state agencies form using their existing authority "to
impose a wide range of fees and other draconian measures to
reduce consumption." The industry also fears that this
bill will give regulators "broad authority to pick favored
technologies. There are no requirements of the agencies to
weight costs and benefits, to consider economic impacts, to
pick winners that truly are feasible, or to assure that the
state's consumers and businesses will not be harmed by
state policies and proposed actions."
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Current Recommendations . AB 2076 (Shelley), Chapter 936,
Statutes of 2000, required the CEC and the ARB to develop
and adopt recommendations for the Governor and the
Legislature by January 31, 2002, on a California Strategy
to Reduce Petroleum Dependence. The CEC report, "Reducing
California's Petroleum Dependence" dated August 2002,
recommended that the state adopt a policy to reduce
gasoline and diesel fuel demand to 15 percent below 2003
demand levels by 2020 and to maintain that level after that
date. The report included certain recommendations (e.g.,
more fuel efficient tires, improving vehicle maintenance,
doubling light duty vehicle fuel efficiency, implementing
fuel cell-powered vehicles). The report also recommended a
goal of increasing use of non-petroleum fuels to 20 percent
of on-road fuel consumption by 2020 and 30 percent by 2030.
NOTE: For extensive background information, please refer
to the Senate Energy, Utilities and Communications
Committee analysis.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Assembly Appropriations Committee, this
bill will result in ongoing annual costs of $300,000
beginning in 2006-07, to state agencies to integrate
transportation energy goals into their adoption of rules
and regulations. There will also be ongoing annual costs,
probably less than $150,000 beginning in 2006-07, and ARB
to consider alternative fuel vehicle programs and advanced
transportation technology when adopting air pollution rules
and regulations applicable to motor vehicles. Finally,
there will be ongoing annual costs of approximately
$100,000 beginning in 2006-07, for CEC to expand its
reporting, monitoring and analysis of oil market pricing
and supply.
SUPPORT : (Verified 8/28/06)
American Lung Association of California
California Communities Against Toxics
California League of Conservation Voters
California Natural Gas Vehicle Coalition
California Thoracic Society
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Clean Power Campaign
Heal the Bay
Natural Resources Defense Council
Planning and Conservation League
Sacramento Metropolitan Air Quality Management District
Sierra Club
Union of Concerned Scientists
OPPOSITION : (Verified 8/28/06)
Alliance of Automobile Manufacturers
California Business Alliance
California Business Roundtable
California Citrus Mutual
California Council for Environmental and Economic Balance
California Farm Bureau Federation
California Grocers Association
California Hispanic Chamber of Commerce
California Independent Oil Marketers Association
California League of Food Processors
California Manufacturers and Technology Association
California Mining Association
California Retailers Association
California Taxpayers' Association
California Taxpayer Protection Committee
California Women in Agriculture
Howard Jarvis Taxpayers Association
Olive Growers Council of California
Small Business Action Committee
Western Growers Association
Western Plant Health Association
ASSEMBLY FLOOR :
AYES: Baca, Bass, Berg, Bermudez, Blakeslee, Calderon,
Canciamilla, Chan, Chavez, Chu, Cohn, Coto, Daucher, De
La Torre, Dymally, Evans, Frommer, Goldberg, Hancock,
Jerome Horton, Shirley Horton, Jones, Karnette, Klehs,
Koretz, Laird, Leno, Levine, Lieber, Lieu, Liu, Montanez,
Mullin, Nation, Nava, Oropeza, Pavley, Richman,
Ridley-Thomas, Ruskin, Saldana, Salinas, Torrico, Umberg,
Vargas, Wolk, Yee, Nunez
NOES: Aghazarian, Benoit, Bogh, Cogdill, DeVore, Emmerson,
Garcia, Haynes, Houston, Huff, Keene, La Malfa, La Suer,
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Leslie, Matthews, Maze, McCarthy, Mountjoy, Nakanishi,
Niello, Parra, Plescia, Sharon Runner, Spitzer,
Strickland, Tran, Villines, Walters, Wyland
NO VOTE RECORDED: Arambula, Negrete McLeod, Vacancy
NC:cm 8/28/06 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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