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
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          |Author:   |Ridley-Thomas                                         |
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          |Version:  |May 4, 2015                                           |
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          |Urgency:  |No                     |Fiscal:    |Yes              |
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          |Consultant|Mark Mendoza                                          |
          |:         |                                                      |
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                      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  







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               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  








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            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  








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            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  








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            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:








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          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  








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            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.  










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            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  








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               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.








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                  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  








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            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  








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            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  








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            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:








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           Support:  

          The California Department of Food and Agriculture (Sponsor)

           Opposition:  

          None on file as of June 16, 2015.


                                      -- END --