BILL NUMBER: AB 2076	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY   MAY 18, 2000
	AMENDED IN ASSEMBLY   MAY 10, 2000
	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.


	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 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   require  the
commission to  establish a strategic fuel  
report this finding to the Legislature and request specific statutory
authority and funding for establishment of a  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.  (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 examine and recommend an appropriate
level of reserves of gasoline, 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 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 evaluate a mechanism 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 meets California specifications and is
produced from a source outside of California that the customer agrees
to deliver back to the reserve within a time period to be
established by the commission, but not longer than six weeks.
   (d) The commission shall evaluate reserve storage space from
existing facilities.
   (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.  
   (f) Prior to establishing the California Strategic Fuel Reserve,
the commission shall report to the Legislature and request an
appropriation to provide funding for the creation of the reserve.

   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  , the commission shall report this finding to the
Legislature and request specific statutory authority and funding for
establishment of a reserve  .