BILL NUMBER: AB 2076	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY   APRIL 13, 2000

INTRODUCED BY   Assembly Member Shelley
   (Principal coauthor: Assembly Member Honda)

                        FEBRUARY 22, 2000

   An act to add Chapter 8.2 (commencing with Section 25720) to
Division 15 of the Public Resources Code, relating to fuel resources:
  fuel supply.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 2076, as amended, Shelley.  State Energy Resources Conservation
and Development Commission:  fuel supply.
   Existing law requires the State Energy Resources and Conservation
and Development Commission to develop contingency plans to deal with
possible shortages of electrical energy or fuel supplies to protect
public health, safety, and welfare.
   This bill would require the commission, after determining certain
facts concerning an appropriate level of reserves, to establish and
administer a strategic fuel reserve.
   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 8.2 (commencing with Section 25720) is added to
Division 15 of the Public Resources Code, to read:

      CHAPTER 8.2.  STRATEGIC FUEL RESERVE

   25720.  In order to insulate California consumers and businesses
from dramatic price increases arising from supply interruptions, it
is the intent of the Legislature to establish a strategic fuel
reserve to be administered by the commission.
   25721.   (a) Not later than July 1, 2002, the commission shall
establish the California Strategic Fuel Reserve.
   (b)  The commission shall determine an appropriate level of
reserves of  fuels or fuel components   gasoline
 to insulate California consumers and businesses from
substantial, short-term price increases arising from refinery outages
or other similar supply interruptions  , but in no event may the
reserve be less than the amount of refined gasoline that the
commission estimates could be produced by the largest California
refiner over a two week period  . In making this determination,
the commission shall take into account all of the following:

   (a)  
   (1)  Inventories of California-quality fuels or fuel
components reasonably available to the California market.  
   (b)  
   (2)  Current and historic levels of inventory of fuels.

   (c)  
   (3)  The availability and cost of storage of fuels.  

   (d)  
   (4) The potential for future supply interruptions, price
spikes, and the costs thereof to California consumers and businesses.
  
   25722.  (a) Not later than July 1, 2002, the commission shall
establish the California Strategic Fuel Reserve.
   (b)  
   (c)  The commission shall establish, by regulation, a
 triggering mechanism for the release, by order of the
Governor, of fuel or fuel components from the strategic fuel reserve
to the California market to reduce substantial, short-term price
increases.
   (c) In releasing fuel or fuel components from the strategic fuel
reserve, the commission may give preference to firms that will use
those products to reduce prices to California consumers and
businesses.   mechanism allowing any customer to
contract at any time for the delivery of gasoline from the reserve in
exchange for an equal amount of gasoline that the customer delivers
back to the reserve that meets California specifications from a
refinery outside of California.  The gasoline shall be delivered back
to the reserve within a time period to be established by the
commission, but not longer than six weeks.  Preference may be given
to customers that will use the gasoline to reduce prices to
California consumers.
   (d) The commission shall develop reserve storage space from
existing facilities to the extent feasible.
   (e) The commission may adopt additional regulations necessary for
the administration and implementation of this article.
   (f) The commission shall report to the Legislature on the progress
and proposed operation of the reserve no later than July 1, 2001.