BILL NUMBER: AJR 15INTRODUCED BILL TEXT INTRODUCED BY Assembly Member Grove MAY 7, 2015 Relative to renewable fuels. LEGISLATIVE COUNSEL'S DIGEST AJR 15, as introduced, Grove. Renewable fuels. This measure would urge the President and the Congress of the United States to pass meaningful legislation to reform the federal Renewable Fuel Standard program to address specified concerns. Fiscal committee: no. WHEREAS, Under the federal Clean Air Act (42 U.S.C. Sec. 7401 et. seq.), as amended by the Energy Independence and Security Act of 2007 (Public Law 110-140), the United States Environmental Protection Agency (EPA) is required to annually set the standards for the Renewable Fuel Standard (RFS) program; and WHEREAS, For the first time since the RFS was passed in 2005, the EPA has proposed lowering the Renewable Volume Obligations (RVOs) because of the market's inability to sustain the federal ethanol mandate; and WHEREAS, The limitations in the volume of ethanol that can be consumed in gasoline given practical constraints on the supply of higher ethanol blends to the vehicles that can use them and other limits on ethanol blend levels in gasoline, a set of factors commonly referred to as the ethanol "blend wall," are closer than ever before; and WHEREAS, Due to the blend wall, unnecessary ethanol production is occurring and there is an insufficient market to properly consume the E15 ethanol-gasoline blend; and WHEREAS, The constraints caused by the limitations in the ability of the industry to produce sufficient volumes of qualifying renewable fuel lead to the EPA waiving the required levels of cellulosic ethanol, resulting in a disincentive for manufacturers to move to second generation biofuels due to the RFS and initial investment costs; and WHEREAS, Eighty percent of the nation's biofuel blending requirements continue to be met with ethanol, a percentage disproportionate compared to other biofuels; and WHEREAS, This government-induced demand for corn ethanol is diverting 40 percent of the United States' crops away from food to fuel production. This diversion has wreaked havoc on corn markets, increasing corn price volatility and delivering a major blow to our farmers and food processors that rely on corn for animal feed; and WHEREAS, Elevated corn costs drove prices for feed - the single largest input cost to food producers - to rise, increasing production costs for livestock producers across the state. As a result, hundreds of California dairies have closed since the inception of the RFS; and WHEREAS, Because of the highly volatile marketplace, many producers have reduced their herd size sending beef, pork, eggs, and fish prices up significantly since the inception of the RFS; and WHEREAS, Altogether, the average United States family of four faced a $2,000 increase in food costs in 2012 due to the effects of higher grain prices brought on largely by the RFS; and WHEREAS, Major automobile makers have publicly stated that certain manufacturers' warranties may be void if gasoline with high ethanol content is used, and many machines with small engines are at risk if gasoline blended with ethanol is used, putting thousands of Californians at risk; and WHEREAS, As a result of the RVOs being consistently finalized well after the EPA's deadlines, a vast number of Californian business are forced to encounter needless uncertainty and market volatility, which results in negative effects on the state's economy; now, therefore, be it Resolved by the Assembly and the Senate of the State of California, jointly, That to end the uncertainty created by the EPA repeatedly missing its own deadlines for RVO levels each year and to bring fundamental and much needed reform to this costly and unworkable federal policy, the Legislature of the State of California urges the President and the Congress of the United States to pass meaningful legislation to reform the federal Renewable Fuel Standard program; and be it further Resolved, That the Chief Clerk of the Assembly transmit copies of this resolution to the President and Vice President of the United States, to the Speaker of the House of Representatives, to the Majority Leader of the Senate, and to each Senator and Representative from California in the Congress of the United States.