BILL NUMBER: AB 2076	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY   MAY 8, 2000
	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   to examine the feasibility
of operating a strategic gasoline reserve and to examine and
recommend  an appropriate level of reserves  , 
 .  Upon a finding by the commission that it would be feasible
to operate such a reserve, the bill would authorize the commission
 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.  
   25720.  (a) By July 1, 2001, the commission shall examine the
feasibility, including possible costs and benefits to consumers and
impacts on gasoline prices for the general public, of operating a
strategic gasoline reserve to insulate California consumers and
businesses from substantial short-term price increases arising from
refinery outages and other similar supply interruptions.  In
evaluating the potential operation of a strategic gasoline reserve,
the commission shall consult with other state agencies, including,
but not limited to, the State Air Resources Board. 
   (b) The commission shall  determine   examine
and recommend  an appropriate level of reserves of 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   examination and recommendation  ,
the commission shall take into account all of the following:
   (1) Inventories of California-quality fuels or fuel components
reasonably available to the California market.
   (2) Current and historic levels of inventory of fuels.
   (3) The availability and cost of storage of fuels.
   (4) The potential for future supply interruptions, price spikes,
and the costs thereof to California consumers and businesses.
   (c) The commission shall  establish, by regulation,
  evaluate  a mechanism  allowing 
to release gasoline from the reserve that permits  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   meets California specifications
and is produced from a source outside of California that the
customer agrees to deliver  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.   weeks. 
   (d) The commission shall  develop   evaluate
 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.
  .
   (e) The commission shall evaluate a reserve operated by an
independent operator that specializes in purchasing and storing
gasoline, and is selected through competitive bidding.
   25721.  Upon a finding by the commission that it would be feasible
to operate a strategic gas reserve, the commission may establish a
California Strategic Fuel Reserve to insulate California consumers
and businesses from substantial, short-term price increases arising
from refinery outages or other similar supply interruptions.