BILL NUMBER: AB 2076	AMENDED
	BILL TEXT

	AMENDED IN SENATE   AUGUST 7, 2000
	AMENDED IN SENATE   JULY 5, 2000
	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 fuel reserve and to examine and recommend an
appropriate level of reserves.  If the commission finds that it
would be feasible to operate such a reserve, the bill would require
the commission to report this finding to the Legislature and request
specific statutory authority and funding for establishment of a
reserve.  The bill would also require the commission to develop and
adopt recommendations on a California Strategy to Reduce Petroleum
Dependence.
   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   January 31,
2002  , the commission shall examine the feasibility, including
possible costs and benefits to consumers and impacts on fuel prices
for the general public, of operating a strategic fuel 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 fuel 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 fuel, but in no event may the reserve be less
than the amount of refined fuel 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 fuel from
the reserve that permits any customer to contract at any time for
the delivery of fuel from the reserve in exchange for an equal amount
of fuel 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 fuel,
and is selected through competitive bidding.
   (f) (1) Not later than  July 1, 2001  
January 31, 2002  , the commission and the State Air Resources
Board, in consultation with the other state and local agencies the
commission deems necessary, shall develop and adopt recommendations
for the Governor and Legislature on a California Strategy to Reduce
Petroleum Dependence.
   (2) The strategy shall include a base case forecast by the
commission of gasoline, diesel, and petroleum consumption in years
2010 and 2020 based on current best estimates of economic and
population growth, petroleum base fuel supply and availability,
vehicle efficiency, and utilization of alternative fuels and advanced
transportation technologies.
   (3) The strategy shall include recommended statewide goals for
reductions in the rate of growth of gasoline and diesel fuel
consumption and increased transportation energy efficiency and
utilization of nonpetroleum based fuels and advanced transportation
technologies, including alternative fueled vehicles, hybrid vehicles,
and high fuel efficiency vehicles.
   (g) The studies required by this section shall be conducted in
conjunction with any other studies required by acts enacted during
the 2000 portion of the 1999-2000 Regular Session dealing with
gasoline prices.
   25721.  The commission shall report its findings and
recommendations to the Governor, the Legislature, and the Attorney
General by  July 1, 2001   January 31, 2002
 .  If the commission finds that it would be feasible to operate
a strategic gas 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 request specific statutory authority and funding for
establishment of a reserve.