California Senate Bill SB448 Amended / Bill

 BILL NUMBER: SB 448AMENDED BILL TEXT AMENDED IN SENATE MAY 24, 2013 AMENDED IN SENATE MAY 6, 2013 AMENDED IN SENATE APRIL 23, 2013 AMENDED IN SENATE APRIL 1, 2013 INTRODUCED BY Senator Leno FEBRUARY 21, 2013 An act to add  Section   Sections 25351 and  25356.5 to the Public Resources Code, relating to energy. LEGISLATIVE COUNSEL'S DIGEST SB 448, as amended, Leno. Energy: petroleum supply and pricing. Existing law establishes the State Energy Resources Conservation and Development Commission in the Natural Resources Agency, and specifies the powers and duties of the commission with respect to energy resources in the state. Under existing law, various provisions regulate petroleum supply and pricing. Existing law requires the commission to obtain and analyze monthly production reports prepared by the State Oil and Gas Supervisor under a specific provision. Existing law authorizes the State Lands Commission to enter into oil and gas leases for the extraction and removal of oil and gas deposits on state lands. Existing law requires the leases to include a royalty provision. This bill would require the State Energy Resources Conservation and Development Commission,  or the commission,  upon appropriation by the Legislature of moneys generated by the collection of royalty payments from the oil and gas leases, to identify  motor vehicle fuel price manipulation, establish a methodology to determine whether fuel price manipulation is occurring, and analyze data and investigate for suspected   data currently collected or developed by the commission and to establish a methodology to analyze whether  fuel price manipulation  has occurred or is occurring. The bill would require the commission to notify the a   ppropriate state or federal agencies if a probable market manipulation has occurred or is occurring  . The bill would require the commission, in consultation with the State Air Resources Board and other relevant state agencies, to prepare and submit to the Legislature a report on further legislative recommendations to limit the amount of price volatility and comparative price increase in the California fuel market. 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.   Section 25351 is added to the   Public Resources Code   , to read:   25351. The Legislature finds and declares all of the following: (a) California is in the process of creating investments in, and deployment of, lower carbon and more sustainable fuel options for consumers. (b) California's transition to a lower carbon and lower cost transportation fuel mix can be threatened by illegal actions that manipulate prices and make it difficult to understand the real impact of new standards and regulations. (c) It is the intent of the Legislature to implement policies that protect consumers against market manipulation in the wholesale markets for finished gas and diesel fuel and their refining feedstocks. (d) It is the intent of the Legislature to use existing resources at the State Energy Resources Conservation and Development Commission and develop additional expertise to prevent market manipulation. (e) It is the intent of the Legislature that the authority under this act be complementary to the authority of other state and federal agencies. (f) It is the intent of the Legislature that the State Energy Resources Conservation and Development Commission work with other state and federal agencies to identify activities that may indicate market manipulation and investigate those activities.   SECTION 1.   SEC. 2.  Section 25356.5 is added to the Public Resources Code, to read: 25356.5. (a) In addition to the requirements of Section 25356,    and in consultation with relevant state and federal agencies,  the commission shall do all of the following:  (1) Establish a definition for fuel market manipulation.   (2)  (1)  Identify data  necessary   currently collected or developed by the commission that is important  to determine whether  improper  fuel  pricing   price  manipulation  has occurred or  is  occurring that includes   occurring. The data may include  all of the following: (A) Individual fuel producer data  and importer and bulk trader data  , including all of the following: (i) Production or throughput data. (ii) Emission data or operational data. (iii) Sales  , storage, and transfer  volumes. (iv) Price. (B)  Marketwide pricing data.   Observed and forecasted wholesale market prices.   (3)   (2)  Establish an analytical methodology  necessary to evaluate   for use in evaluating data collected by the commission to inform  whether fuel price manipulation  has occurred or  is  occurring that includes both   occurring. The methodology may, at the discretion of the commission, be targeted to analyzing data on transactions and market conditions most likely connected with fuel pricing manipulation, and may include, but shall not be limite   d to, both  of the following: (A) Producer  , importer, and bulk trader  level analysis. (B) Marketwide analysis, comparing real time prices to expected prices based on    published forecasts or  modeling output.  (4)   (3)  Analyze the data  under paragraph (1) that is in the possession of the commission  and investigate for suspected fuel price manipulation  using   in  both of the following: (A)  Producer level analysis.   Individual business level.  (B) Marketwide  analysis   producer level, taking into account the actions of multiple producers  .  (4) Identify data that is not in possession of the commission and is considered important to determine whether fuel pricing manipulation has occurred or is occurring. The commission shall furnish a list of the data to the Legislature upon request.  (b) The commission, in consultation with the State Air Resources Board and other relevant state agencies, shall include in the  first  biennial assessment specified in subdivision (b) of Section 25358  following   enactment of this section  a report on further legislative recommendations to limit the amount of price volatility and comparative price increase in the California fuel market. The report shall include an evaluation of strategies  for  doing all of the following: (1) Increasing  fuel  storage  of fuels produced in the state  . (2) Leveraging the state's purchasing power related to the state's fleet. (3) Increasing timely imports of fuels during  emergency conditions and rapid  price  swings   volatility  .  (4) Coordinating the timing of maintenance and shutdown activities at in-state fuel production facilities.  (c) For purposes of this section, "fuel" means  finished  gasoline and diesel    and   their refining feedstocks  derived from petroleum. (d) The commission shall implement this section upon appropriation by the Legislature of moneys generated by the collection of royalty payments from oil and gas leases entered into pursuant to Article 2 (commencing with Section 6826) of Chapter 3 of Part 2 of Division 6.  (e) (1) Upon collection of the data and completion of the analyses required under this section, if the data indicates that a probable market manipulation has occurred or is occurring, the commission shall notify the appropriate state or federal agencies of the probable market manipulation.   (2) Nothing in this section shall require the commission to make final findings or determinations that market manipulation has occurred or is occurring.