BILL ANALYSIS Ó SENATE COMMITTEE ON BUSINESS, PROFESSIONS AND ECONOMIC DEVELOPMENT Senator Jerry Hill, Chair 2015 - 2016 Regular Bill No: AB 808 Hearing Date: June 22, 2015 ----------------------------------------------------------------- |Author: |Ridley-Thomas | |----------+------------------------------------------------------| |Version: |May 4, 2015 | ----------------------------------------------------------------- ---------------------------------------------------------------- |Urgency: |No |Fiscal: |Yes | ---------------------------------------------------------------- ----------------------------------------------------------------- |Consultant|Mark Mendoza | |: | | ----------------------------------------------------------------- Subject: Automotive fuels and products. SUMMARY: Expands the authority of the California Department of Food and Agriculture (Department) to include alternative fuels, as defined; requires the method of sale for all fuels to be consistent with national standards; expands the Department's authority over new automotive products, including diesel exhaust fluid and glycerin as an engine coolant; and makes other conforming changes. Existing law: 1)Gives the Department general supervision over weights and measures and weighing and measuring devices sold or used in the state. (Business and Professions Code (BPC) § 12100 et seq.) 2)Regulates the sale of, and measures standards, for petroleum and hydrogen fuel products, and requires the Department to establish standards for motor vehicle fuels and other petroleum products that are offered for sale in the state. Requires the Department, through the Division of Measurement Standards, to enforce regulations and standards for motor vehicle fuels and lubricants. (BPC § 13400 et seq.) 3)Defines various terms relating to fuel products, including: a) "Petroleum products" as gasoline, diesel fuel, liquefied AB 808 (Ridley-Thomas) Page 2 of ? petroleum gas only when used as a motor fuel, kerosene, thinner, solvent, liquefied natural gas, pressure appliance fuel, or white gasoline, or any motor fuel, or any oil represented as engine lubricant, engine oil, lubricating or motor oil, or any oil used to lubricate transmissions, gears, or axles. b) "Engine fuel" as any liquid or gaseous matter used for the generation of power in an internal combustion engine or fuel cell, and provides that "motor fuel" means "engine fuel." c) "Motor vehicle fuel" as any product intended for consumption in an internal combustion engine or fuel cell to produce the power to self-propel a vehicle designed for transporting persons or property on a public street or highway. d) "Hydrogen" as a fuel composed of the chemical hydrogen intended for consumption in an internal combustion engine or fuel cell. (BPC § 13401) 4)Requires the Department to establish specifications for automotive spark-ignition engine fuels, and the Department adopt by reference the latest standards established by a recognized consensus organization or standards writing organization such as the ASTM International or the SAE International, for automotive spark-ignition engine fuel, except that no specification shall be less stringent than required by any California state law. (BPC § 13440) 5)Requires the Department, on or before January 1, 2008, to establish specifications for hydrogen fuels for use in internal combustion engines and fuel cells in motor vehicles, as specified. (BPC § 13446) 6)Requires the Department to establish specifications for compression-ignition engine fuel, as specified. (BPC § 13450) 7)Generally makes it unlawful to sell or deliver for the purpose AB 808 (Ridley-Thomas) Page 3 of ? of sale, various fuel products unless it conforms to the Department's specifications. (BPC § 13400 et seq.) 8)Requires that the sale, offer for sale, or advertisement for sale at retail to the general public of compressed natural gas be only for use as a motor vehicle fuel, and requires compressed natural gas and liquefied natural gas to be sold in specified gallon equivalents. (BPC § 13404) 9)Makes it unlawful for any person or other legal entity to make any deceptive, false, or misleading statement by any means whatever regarding quality, quantity, performance, price, discount, or saving used in the sale or selling of any petroleum or hydrogen fuel product regulated pursuant to these provisions. (BPC § 13413) 10)Requires every person offering for sale or selling any motor vehicle fuel to the public from any place of business to display on the premises an advertising medium that complies with price sign advertising requirements and advertises the prices of the three major grades of motor vehicle fuels which shall be clearly visible from the street or highway. (BPC § 13531) 11)Authorizes the Departments to inspect petroleum products and to enter, for the purpose of the inspection, any place where petroleum products are kept or stored for sale. (BPC § 13591) 12)Makes it unlawful for a person to sell or deliver any petroleum product that fails to meet the specifications required by these provisions (relating to petroleum and hydrogen fuels) or to sell or deliver any petroleum product into, from, or through an unlabeled or mislabeled device or container. (BPC § 13595) 13)Regulates the sale of automotive products, such as engine coolant and antifreeze, requires the Department to establish specification for those products, and deems an automatic AB 808 (Ridley-Thomas) Page 4 of ? transmission fluid as mislabeled under certain conditions. (BPC § 13710, et seq.) 14)Makes it unlawful for a person or other legal entity to make any deceptive, false, or misleading statement by any means whatever regarding quality, quantity, performance, price, discount, or saving in the sale or selling of any automotive product, as specified. (BPC § 13741) This bill: 1)Revises existing definitions relating to petroleum and hydrogen fuels, deletes the use of the term "petroleum" throughout these provisions, and defines the following terms: a) "Alternative fuels" which include biodiesel, biodiesel blend, dimethyl ether, electricity, ethanol, ethanol fuel blend, hydrogen, methanol fuel blend, natural gas, propane, all defined under the bill, and any other fuel intended for use as a motor vehicle fuel that the Secretary determines is an alternative fuel. b) "Engine fuel," which include any gasoline, diesel, or alternative fuel used for the general of power in an internal combustion engine or fuel cell in a motor vehicle, or electrical power delivered conductively or inductively to an electronic motor in electric or plug-in hybrid vehicles, and defines "motor fuel' to mean "engine fuel." c) "Motor vehicle fuel" which means an engine fuel intended for consumption in, including, but not limited to, an internal combustion engine, fuel cell, or electric motor to produce power to self-propel a vehicle designed for transporting persons or property on a public street or highway. 2)Revises provisions relating to the regulation of motor vehicle fuels and lubricants to include alternative fuels, as specified, thereby extending the Department the authority to regulate alternative fuels, including by setting standards AB 808 (Ridley-Thomas) Page 5 of ? specific to those types of alternative fuels based on standards established by various standards development organizations. 3)Requires the Secretary to establish the method of sale of motor vehicle fuels and lubricants sold at retail to the public by adopting, by reference, the latest method of sale for motor vehicle fuels and lubricants published in the National Institute of Standards and Technology (NIST) Handbook 130-2015, except as specifically modified, amended, or rejected by the Secretary, and authorizes, in the absence of national standards, the Secretary to adopt interim standards of method of sale until the time when the standards are adopted by the National Conference on Weights and Measures. 4)Makes alternative fuels subject to the same, or similar, advertising, hours of business, price indications, labeling, price sign advertising, inducements, and other standards as other types of motor vehicle fuels, except as specified. 5)Exempts electricity from meeting certain labeling standards for motor vehicle fuels, and from certain advertising standards, as specified. 6)Defines "diesel exhaust fluid" and requires the Secretary to establish the method of sale of diesel exhaust fluid sold at retail to the public, as specified. 7)Extends the enforcement ability of the Department to these added motor vehicle fuels and automotive products. 8)Makes additional conforming and related changes. FISCAL EFFECT: This bill has been keyed "fiscal" by Legislative Counsel. According to the Assembly Appropriations Committee, minor and absorbable impacts to the Department. COMMENTS: AB 808 (Ridley-Thomas) Page 6 of ? 1.Purpose. This bill is sponsored by the California Department of Food and Agriculture . According to the Author, "California is at the forefront of alternative and renewable fuel and vehicle technology. As more vehicles in California are powered by alternative fuels, it is imperative that the state protect its consumers and businesses by providing clear standards and guidelines to prevent consumer confusion and unfair business practices that could harm the marketplace. This bill will provide the necessary regulatory framework to ensure that alternative motor vehicle fuels and automotive products are regulated in a similar manner as traditional fuels and automotive products." 2.The Department of Food and Agriculture. The Department is the only state agency with the authority to regulate the quality of fuel and automotive products. No other state agency has the authority to regulate weights and measures laws, advertising, labeling, and fuel quality requirements for motor vehicle fuels and automotive products. According to the Author, for over 8 years, the Department has had oversight authority of the quality of conventional fuels sold in California. All fuels must comply with fuel quality standards, advertising, and labeling requirements found in the BPC. 3.Governor's Executive Order B-16-2012. Recognizing the multiple benefits of zero-emission vehicles (ZEVs), as well as challenges to growing the market, Governor Brown issued Executive Order B-16-2012 on March 23, 2012 that directed California to "encourage the development and success of zero-emission vehicles to protect the environment, stimulate economic growth and improve the quality of life in the State." The Governor's Executive Order sets a long-term target of reaching 1.5 million ZEVs on California's roadways by 2025. The Executive Order also sets a longer term target of reducing transportation-related greenhouse gas emission by 80 percent below 1990 levels by 2050. The Executive Order established several milestones on a path toward 1.5 million ZEVs in California by the year 2025. The 2013 ZEV Action Plan was subsequently released, which identifies specific strategies and actions that state agencies will take to meet milestones AB 808 (Ridley-Thomas) Page 7 of ? of the Executive Order. According to the 2013 ZEV Action Plan, accelerating the market for ZEVs is a cornerstone of California's long-term transportation strategy to reduce localized pollution and greenhouse gas emissions, save consumers money, and enable continued economic growth. The Governor's Executive Order and the action plan concentrate on advancing ZEVs, recognizing the timely opportunity to accelerate use of this commercially available technology. The first goal under the ZEV Action Plan includes completing needed infrastructure and planning. The plan specifies the following action items and the Department is responsible for: a) supporting the development of standards for electric chargers and hydrogen stations to ensure that drivers understand charging and fueling costs; b) installing signage at public electric charging stations and hydrogen stations that informs drivers of prices per unit of measure, applicable charging voltages and filling pressures; and c) enacting necessary legislation, regulations, standards or certifications to enable hydrogen to be sold commercially on per kilogram basis and electricity on a single unit of measure basis (e.g., kilowatt-hour), as specified. 4.The Department's Regulations of Motor Vehicle Fuels. According to the Department, in order for the Department to comply with Executive Order B-16-12, existing law must be amended to allow the legal sale of alternative motor vehicle fuels. While existing law defines petroleum products and motor vehicle fuels, it does not adequately define "alternative motor vehicle fuels." As a result, the Department is restricted from establishing fuel quality specifications that would protect consumers from substandard products and regulate advertising for these new alternative fuels. Defining these terms and incorporating them throughout these provisions gives the Department clear authority to regulate fuel quality, advertising, and labeling, thereby protecting consumers. AB 808 (Ridley-Thomas) Page 8 of ? Specifically, to provide the type of infrastructure necessary under the ZEV action plan, it is necessary to ensure: that ZEV fuels can be sold commercially to mainstream consumers on a single unit of measurement basis; price transparency for ZEV fuels, which supports the development of standards for electric chargers and street sign advertising to ensure consumers understanding costs; and that ZEV fuels can legally be sold as a retail transportation fuel. While hydrogen is currently defined, electricity, and other alternative fuels, are not, which is what this bill seeks to do. In addition, existing law requires sellers or motor vehicle fuels to adhere to certain pricing, labeling, and advertising requirements, and requires fuels advertised for sale to be in prices relating to gallons or liters. However, not all alternative fuels will be sold in these volumetric units of measurement. This bill would allow the Department to ensure consumers are informed by giving the Department the authority to establish a single consistent method of sale, advertising, and labeling for motor vehicle fuels, including alternative fuels. In addition, according to the Department, existing law does not provide the Department with the authority to protect against substandard fuels and automotive products, which could negatively impact vehicle emissions and mileage performance, and damage engines and fuel cells. This bill would make clear that the Department has the enforcement capability necessary to ensure standards are met. 5.Alternative Motor Vehicle Fuels. Various alternative fuels and technologies, as described by the California Energy Commission, and incorporated under this bill, include the following: Plug-in Electric Vehicles are propelled by electric motors powered by rechargeable battery packs, which reduce dependence on petroleum because the energy powering them is domestically generated. These vehicles are more than three times more energy efficient, and produce no tailpipe AB 808 (Ridley-Thomas) Page 9 of ? emissions. Hydrogen Fuel Cell Vehicles (FCVs) run on hydrogen gas and depending upon how the hydrogen is produced, few or no harmful emissions occur on a life cycle basis. FCV tailpipe emissions are zero; they emit water vapor. FCVs generate electricity through an electrochemical process, using hydrogen as the fuel that powers an electric motor which in turn, drives the vehicle. While these vehicles are still in the early stage of commercial development, the potential benefits are impressive, as the only by-products are heat, some CO2 (hydrogen production, transport, storage, compression) and water vapor. In some cases hydrogen is produced from water through electrolysis, and the feedstocks (natural gas and water), are readily available so the use of FCVs can substantively reduce dependence on petroleum. Natural Gas Vehicles are a cleaner and efficient alternative to gasoline and diesel vehicles. Currently they are used in industrial urban fleet applications such as light, medium and heavy-duty delivery trucks, taxis, courier services, shuttles, buses, refuse haulers, and large trucks. There are also some commercial available CNG-powered passenger cars in the US. While conventional natural gas is not considered a renewable fuel, biomethane or renewable natural gas can be produced from organic material found in dairies, landfills, and wastewater treatment facilities, leading to GHG emission reductions of up to 85% compared to conventional natural gas. Propane (also known as liquid petroleum gas (LPG)) is produced as a byproduct of natural gas processing and crude oil refining. Most widely used in rural areas for heating homes and powering farm and industrial equipment, less than 3% of propane produced in the U.S. is currently used in vehicles. Interest in propane as a transportation fuel is increasing due to its domestic availability, low cost, and clean burning qualities. Propane fueled vehicles reduce greenhouse gas emissions compared to their gasoline and diesel equivalents. AB 808 (Ridley-Thomas) Page 10 of ? Biofuels: Ethanol, Diesel Substitutes, Biomethane Ethanol is an alcohol-based fuel made by fermenting and distilling purpose-grown starch crops, such as corn, sugar cane and wheat. It can also be made from cellulosic biomass such as agricultural residues, animal manures, food wastes, fats, oils and greases. Additionally, landfill gases and municipal solid waste (MSW) can be used; these feedstocks avoid the issue of using prime agricultural lands for fuel production and result in fuels that are considerably lower in greenhouse gas (GHG) emissions. Biodiesel is an alternative fuel produced from vegetable oils, animal fats, agriculture, green and food wastes, forest residues, and algae. These products can be used in its pure form or blended with petroleum diesel. It is a cleaner-burning alternative for diesel engines than petroleum diesels. Since more than 90% of all diesel in the country is consumed by heavy duty and off-road vehicles, this represents a promising market for biomass-based diesel fuels. It can be blended up to 5% of the total volume in conventional diesel, and is lower in harmful emissions than traditional diesel engines. It reduces carbon dioxide emissions by approximately 50%-88% depending, upon the feedstock used. Renewable Natural Gas (biomethane) , sometimes called biogas, is renewable natural gas produced from the decaying processes of organic matter. Municipal solid waste (MSW) from landfills is one of the largest sources of feedstock for this technique and results in the added benefit of diverting waste from the landfill to produce energy. Renewable natural gas can reduce GHG emissions by up to 87% compared to conventional petroleum-based fuels, and it is the lowest carbon intensity alternative fuel readily available in California. This bill would recognize the need to develop standards for AB 808 (Ridley-Thomas) Page 11 of ? these emerging technologies by including alternative fuels within the Department's jurisdiction. 1.NIST Handbook 130. The National Institute of Standards and Technology (NIST), now a part of the US Department of Commerce, publishes Uniform Laws and Regulations in the Areas of Legal Metrology and Engine Fuel Quality, which were adopted by the National Conference of Weights and Measures, and published as NIST Handbook 130-2015. These uniform laws and regulations relating to engine fuel have been adopted or incorporated by nearly 20 states. Among other things, this handbook has standards for the following issue areas: gasoline-oxygenate blends; liquefied petroleum gas; retail sales of natural gas sold as a vehicle fuel; ethanol flex fuel; biodiesel and biodiesel blends; retail sales of hydrogen fuel; engine oil (motor oil); retail sales of electricity sold as a vehicle fuel; and diesel exhaust fluid (DEF). Additional standards relating to motor vehicle fuels, lubricants, and automotive products also include the following: the American National Standards Institute (ANSI); the American Society for Testing and Materials International (ASTM), and the Society for American Engineers International (SAE). This bill would require the Secretary to establish the method of sale of motor vehicle fuels and lubricants sold at retail to the public by adopting, by reference, the latest method of sale for motor vehicle fuels and lubricants published in NIST Handbook 130-2015, except as specifically modified, amended, or rejected by the Secretary. The bill also authorizes, in the absence of national standards, the Secretary to adopt interim standards of method of sale until the time when the standards are adopted by the National Conference on Weights and Measures, and specifies other standards to be met for certain fuel types. 2.Prior Related Legislation. AB 1907 (Ridley-Thomas, Chapter 805, Statutes of 2014), required compressed natural gas sold at retail to the public for use as a motor vehicle fuel to be sold in a gasoline gallon equivalent that is equal to 126.67 cubic feet, or 5.66 pounds, of compressed natural gas, measured at the standard pressure and temperature, as AB 808 (Ridley-Thomas) Page 12 of ? specified, and required liquefied natural gas to be sold in a diesel gallon equivalent that is equal to 6.06 pounds of liquefied natural gas. This bill also prohibited a person from selling at retail any compressed natural gas or liquid natural gas for use as motor fuel from any place of business in this state unless there is displayed and labeled on the dispensing apparatus in a conspicuous place "Gasoline gallon equivalent" or "Diesel gallon equivalent," respectively. AB 8 (Perea, Chapter 401, Statutes of 2013), extended until January 1, 2024, extra fees on vehicle registrations, boat registrations, and tire sales in order to fund programs, including the Alternative and Renewable Fuel and Vehicle Technology Program, that support the production, distribution, and sale of alternative fuels and vehicle technologies, as well as air emissions reduction efforts. SB 454 (Corbett, Chapter 418, Statutes of 2013), created the Electric Vehicle Charging Stations Open Access Act, which would prohibit the charging of a subscription fee on persons desiring to use an electric vehicle charging station, as defined, and would prohibit a requirement for persons to obtain membership in any club, association, or organization as a condition of using the station, except as specified. The bill would require the total actual charges for the use of an electric vehicle charging station to be disclosed to the public at the point of sale. The bill would require an electric vehicle charging station to provide to the general public 2 specified options of payment. AB 1007 (Pavley, Chapter 371, Statutes of 2005), required that, not later than June 30, 2007, the State Energy Resources Conservation and Development Commission, in partnership with the State Air Resources Board, and in consultation with the State Water Resources Control Board, the Department of Food and Agriculture, and other relevant state agencies, to develop and adopt a state plan to increase the use of alternative transportation fuels, as defined. SB 70 (Florez) of 2007, would have specified standards for AB 808 (Ridley-Thomas) Page 13 of ? biodiesel and biodiesel blends, and for renewable diesel and renewable diesel blends, as defined, and prohibit someone from selling at retail to the general public, specified biodiesel fuel from any place of business in this state unless there is displayed in a conspicuous place on the dispensing apparatus at least one sign stating the concentration of biodiesel, as specified. ( Status : This bill was vetoed by Governor Schwarzenegger.) SB 76 (Committee on Budget and Fiscal Review, Chapter 91, Statutes of 2005), required the establishment of standards for hydrogen fuels, and required the Department, by January 1, 2008, with the concurrence of the State Air Resources Board, to establish specifications for hydrogen fuels for use in internal combustion engines and fuel cells in motor vehicles until a standards development organization accredited by the American National Standards Institute (ANSI) formally adopts standards for hydrogen fuels for use in internal combustion engines and fuel cells in motor vehicles, and required the Department, at that time, to adopt those standards, except as specified. 3.Arguments in Support. According to the Department of Food and Agriculture , "this bill's intent to expand the authority of the Department's Division of Measurement Standards over all vehicle fuels, including alternative fuels, new automotive products, and in addition establish appropriate methods of sale for such fuels that are consistent with national standards." NOTE : Double referral to the Senate Committee on Transportation and Housing. SUPPORT AND OPPOSITION: AB 808 (Ridley-Thomas) Page 14 of ? Support: The California Department of Food and Agriculture (Sponsor) Opposition: None on file as of June 16, 2015. -- END --