CALIFORNIA LEGISLATURE 20232024 1st Ext. Senate Bill No. 2Introduced by Senator SkinnerDecember 05, 2022 An act to add Section 25355.5 to the Public Resources Code, relating to energy. LEGISLATIVE COUNSEL'S DIGESTSB 2, as introduced, Skinner. Energy: transportation fuels: supply and pricing: maximum gross gasoline refining margin.Existing law requires operators of refineries in the state that produce gasoline meeting California specifications, within 30 days of the end of each calendar month, to submit a report to the State Energy Resources Conservation and Development Commission containing certain information regarding its refining activities related to the production of gasoline in that month. Existing law requires the commission to notify a refiner that has failed to timely provide the required information and imposes a civil penalty on the refiner that fails to submit the required information within 5 days of being notified of the failure. This bill would establish a maximum gross gasoline refining margin at an unspecified amount per gallon and would authorize the commission to annually adjust the maximum gross gasoline refining margin, as provided. The bill would authorize the commission to petition the court to enjoin a refiner from exceeding the maximum gross gasoline refining margin. The bill would also authorize the commission to assess an administrative civil penalty on a refiner for exceeding the maximum gross gasoline refining margin, as provided. The bill would authorize the commission to grant a refiners request for an exemption from the maximum gross gasoline refining margin upon a showing by the refiner of reasonable cause, and to subject the refiner to alternative maximum margins or other conditions set by the commission. The bill would require a refiner seeking an exemption to file a statement under the penalty of perjury setting forth the basis of the request for exemption. By requiring the statement to be filed under the penalty of perjury, this bill would expand the scope of the crime of perjury, thereby imposing a state-mandated local program. The bill would require the penalties collected to be deposited into the Price Gouging Penalty Fund, which the bill would create in the State Treasury. The bill would require moneys in the fund, upon appropriation by the Legislature, to be returned, as refunds, to residents of the state.This bill would state the intent of the Legislature to enact subsequent legislation relating to transportation fuels, as described, including requiring the commission to conduct regular assessments of the supply and price of transportation fuels in the state, and of the impacts on production of refinery maintenance and turnarounds on fuel supply and price. Existing law establishes the California Department of Tax and Fee Administration and provides that the department is the successor to, and is vested with, the duties, powers, and responsibilities of the State Board of Equalization.This bill would state the intent of the Legislature to enact subsequent legislation that would direct the department, in collaboration with the commission, to investigate and report on aspects of the gasoline market, as specified. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.This bill would provide that no reimbursement is required by this act for a specified reason.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: YES Bill TextThe people of the State of California do enact as follows:SECTION 1. The Legislature finds and declares all of the following:(a) From August to October of 2022, Californians experienced some of the highest gasoline prices ever recorded in the state, even though the price of crude oil declined, state taxes and fees remained unchanged, and gasoline prices did not increase outside the western United States.(b) Much of this increase was caused by refiners, which increased the costs and profits they added to the price California consumers paid at the pump, leading to prices that were substantially higher per gallon than average prices in the rest of the United States.(c) During the third and fourth quarters of 2022, the overlap in timing of planned maintenance at refiners facilities resulted in a larger decrease in crude oil processing capacity than would otherwise have occurred if planned maintenance at refiners facilities had not coincided.(d) During this same period of time, refiners allowed gasoline inventory levels to reach decade-low levels, placing an upward pressure on gasoline prices. (e) This refiner conduct makes clear that greater transparency into and oversight of refinery maintenance schedules and inventory is necessary, to avoid preventable supply shocks in the market for transportation fuels.(f) Historically, refinery outages and issues have created an opportunity for market participants to take advantage of naturally high prices by manipulating prices to stay higher longer, as evidenced by gasoline prices in California remaining elevated without explanation following a temporary price shock after a refinery explosion in 2015, which further demonstrates the need for greater visibility into the pricing, contracting, and marketing practices of industry participants. (g) Although preventable capacity limitations and inventory shortages played a role in the third quarter of 2022 price increases, they cannot account for all of those increases. Similar factors did not lead to extreme price spikes in prior years, suggesting that the sky-high prices Californians faced from August to October of 2022 were due in significant part to opportunistic price gouging by oil companies. (h) Indeed, during the third quarter of 2022, refiners earned record profits, with some refiners earning more than tenfold their profits for the same period of time in 2021.(i) Fundamental change is necessary to prevent future extreme price spikes and price gouging by oil companies, which are entitled to a reasonable return but are not entitled to reap exorbitant profits at the expense of Californians, many of whom rely on gasoline as an essential commodity or who are impacted by the increased cost of goods and services that results from the gasoline price spikes, even as the state begins to transition away from dependence on the fossil fuels that are destroying our climate.SEC. 2. It is the intent of the Legislature to enact subsequent legislation that would do all of the following:(a) Require that the State Energy Resources Conservation and Development Commission (Energy Commission) conduct regular assessments of the supply and price of transportation fuels in the state, and of the impacts on production of refinery maintenance and turnarounds on fuel supply and price.(b) Expand the Energy Commissions authority to investigate and obtain necessary information, including information regarding pricing, supply contracts, and inventory management, from participants in the market for transportation fuels.(c) Expand the Energy Commissions authority to order that refinery maintenance and turnarounds be rescheduled in specified circumstances, when consistent with employee and public safety and necessary to avoid supply shocks in the market for transportation fuels.(d) Establish an advisory committee of fuels market experts to provide the Energy Commission with independent advice and insights.(e) Require the Energy Commission and the State Air Resources Board, in consultation with the states fuel producers and refiners, to plan for and monitor progress toward the states reliable, safe, equitable, and affordable transition away from petroleum fuels, and to issue periodic reports to the Governor and the Legislature.(f) Supplement existing refinery reporting requirements by requiring more detailed reports to the Energy Commission on transportation fuel imports, inventory levels, and transactions, and on refinery maintenance and turnarounds. SEC. 3. It is the intent of the Legislature to enact subsequent legislation that would direct the California Department of Tax and Fee Administration, in collaboration with the State Energy Resources Conservation and Development Commission, to investigate and report on the drivers of and factors affecting the price of gasoline in the refining, distribution, and retail segments of the gasoline market; to uncover pricing irregularities in the California gasoline market and their effect on tax revenue; and to report its findings to the Governor and the Legislature. SEC. 4. Section 25355.5 is added to the Public Resources Code, to read:25355.5. (a) For purposes of this section, the following definitions apply:(1) Gross gasoline refining margin excluding state program costs means the amount, expressed in dollars per barrel and calculated on a monthly basis, equal to the volume-weighted average rack price of wholesale gasoline sold by the refiner, less the volume-weighted fees or estimated valuations of costs embedded in all of the refiners wholesale gasoline sales associated with the low carbon fuel standard and the cap and trade cap-at-the-rack program, less the refiners volume-weighted average acquisition cost.(2) Maximum gross gasoline refining margin means the maximum amount of gross gasoline refining margin excluding state program costs established or adjusted under subdivision (c).(3) Volume-weighted average acquisition cost is the combined volume-weighted average of the refiners volume-weighted average crude oil acquisition cost and the refiners volume-weighted cost of acquiring refined gasoline imported to California or acquired from another refiner.(4) Volume-weighted average rack price of wholesale gasoline means the combined volume-weighted average of the refiners rack price of branded and unbranded rack sales reported under paragraph (3) of subdivision (b) of Section 25355.(5) Volume-weighted average crude oil acquisition cost is the amount reported as required by paragraph (2) of subdivision (b) of Section 25355.(b) Reports required under subdivision (b) of Section 25355 shall also include the volume weighted average cost of any refined gasoline acquired by a refiner during the calendar month, and the volume in barrels of refined gasoline acquired.(c) (1) (A) On and after the effective date of this section, the maximum gross gasoline refining margin shall be ____ cents per gallon.(B) On July 1, 2024, and on July 1 of each year thereafter, the maximum gross gasoline refining margin shall automatically be adjusted annually to reflect the changes in the Consumer Price Index.(2) Beginning ____, the commission may, at a publicly noticed meeting, adjust the maximum gross gasoline refining margin based on market data as necessary to fulfill the intent and purposes of the section and to ensure that a full and affordable supply of gasoline is available to Californians.(3) Within 15 days of an adjustment to the maximum gross gasoline refining margin pursuant to subparagraph (B) of paragraph (1) or paragraph (2), the commission shall notify refiners of the new maximum gross gasoline refining margin by a means determined by the commission that may include, but is not limited to, mail, email, or internet website postings.(4) Adjustments to the maximum gross gasoline refining margin pursuant to this subdivision shall be effective on the first day of the calendar month at least 15 days after the commission gives public notice of the adjustment, unless the commission orders otherwise.(d) On and after ____, it is a violation of this section for a refiner to exceed the maximum gross gasoline refining margin.(e) The commission may petition a court to enjoin a refiner from violating subdivision (d).(f) The commission may impose an administrative civil penalty for a violation of subdivision (d). The amount of the penalty shall presumptively be set based on the amount by which the refiners gross gasoline refining margin excluding state program costs exceeds the maximum gross gasoline refining margin, converted from barrels to gallons and multiplied by the number of gallons sold by the refiner during the calendar month through all transactions described in paragraph (4) of subdivision (b) of Section 25355, as follows:(1) ____ percent on amounts earned by a refiner that exceed the maximum gross gasoline refining margin by less than ____ cents per gallon.(2) ____ percent on amounts earned by a refiner that exceed the maximum gross gasoline refining margin between ____ and ____ cents, inclusive, per gallon.(3) ____ percent on amounts earned by a refiner that exceed the maximum gross gasoline refining margin by more than ____ cents per gallon.(g) (1) The commission may, in its discretion, grant a refiners request for an exemption from the maximum gross gasoline refining margin upon a showing by the refiner of reasonable cause, and subject to alternative maximum margins or other conditions as the commission may set.(2) Any refiner seeking an exemption shall file a statement with the commission, signed under penalty of perjury, setting forth the facts that form the basis for the request for exemption.(3) The commission shall by regulation develop procedures for considering and adjudicating requests made pursuant to this subdivision.(h) (1) The commission shall identify, on a quarterly basis, the name and address of each refiner that has exceeded the maximum gross gasoline refining margin for any month during the previous quarter, and the amount of administrative civil penalty to be assessed.(2) Before imposing the administrative civil penalty under subdivision (f), the executive director of the commission shall issue and serve a complaint on the refiner, and the commission shall hold a hearing, adopt a decision, and require payment of the penalty in accordance with the procedures described in subdivisions (a) to (d), inclusive, of Section 25534.1.(3) All penalties collected under this section, less refunds and reimbursement to the commission for expenses incurred in the collection of the penalties, shall be deposited into the Price Gouging Penalty Fund, which is hereby created in the State Treasury and, upon appropriation by the Legislature, shall be returned as refunds to residents of the state.(4) The Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code) does not apply to any regulation, guideline, or adjustment of the maximum gross gasoline refining margin adopted by the commission under this chapter.SEC. 5. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
CALIFORNIA LEGISLATURE 20232024 1st Ext. Senate Bill No. 2Introduced by Senator SkinnerDecember 05, 2022 An act to add Section 25355.5 to the Public Resources Code, relating to energy. LEGISLATIVE COUNSEL'S DIGESTSB 2, as introduced, Skinner. Energy: transportation fuels: supply and pricing: maximum gross gasoline refining margin.Existing law requires operators of refineries in the state that produce gasoline meeting California specifications, within 30 days of the end of each calendar month, to submit a report to the State Energy Resources Conservation and Development Commission containing certain information regarding its refining activities related to the production of gasoline in that month. Existing law requires the commission to notify a refiner that has failed to timely provide the required information and imposes a civil penalty on the refiner that fails to submit the required information within 5 days of being notified of the failure. This bill would establish a maximum gross gasoline refining margin at an unspecified amount per gallon and would authorize the commission to annually adjust the maximum gross gasoline refining margin, as provided. The bill would authorize the commission to petition the court to enjoin a refiner from exceeding the maximum gross gasoline refining margin. The bill would also authorize the commission to assess an administrative civil penalty on a refiner for exceeding the maximum gross gasoline refining margin, as provided. The bill would authorize the commission to grant a refiners request for an exemption from the maximum gross gasoline refining margin upon a showing by the refiner of reasonable cause, and to subject the refiner to alternative maximum margins or other conditions set by the commission. The bill would require a refiner seeking an exemption to file a statement under the penalty of perjury setting forth the basis of the request for exemption. By requiring the statement to be filed under the penalty of perjury, this bill would expand the scope of the crime of perjury, thereby imposing a state-mandated local program. The bill would require the penalties collected to be deposited into the Price Gouging Penalty Fund, which the bill would create in the State Treasury. The bill would require moneys in the fund, upon appropriation by the Legislature, to be returned, as refunds, to residents of the state.This bill would state the intent of the Legislature to enact subsequent legislation relating to transportation fuels, as described, including requiring the commission to conduct regular assessments of the supply and price of transportation fuels in the state, and of the impacts on production of refinery maintenance and turnarounds on fuel supply and price. Existing law establishes the California Department of Tax and Fee Administration and provides that the department is the successor to, and is vested with, the duties, powers, and responsibilities of the State Board of Equalization.This bill would state the intent of the Legislature to enact subsequent legislation that would direct the department, in collaboration with the commission, to investigate and report on aspects of the gasoline market, as specified. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.This bill would provide that no reimbursement is required by this act for a specified reason.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: YES
CALIFORNIA LEGISLATURE 20232024 1st Ext.
Senate Bill
No. 2
Introduced by Senator SkinnerDecember 05, 2022
Introduced by Senator Skinner
December 05, 2022
An act to add Section 25355.5 to the Public Resources Code, relating to energy.
LEGISLATIVE COUNSEL'S DIGEST
## LEGISLATIVE COUNSEL'S DIGEST
SB 2, as introduced, Skinner. Energy: transportation fuels: supply and pricing: maximum gross gasoline refining margin.
Existing law requires operators of refineries in the state that produce gasoline meeting California specifications, within 30 days of the end of each calendar month, to submit a report to the State Energy Resources Conservation and Development Commission containing certain information regarding its refining activities related to the production of gasoline in that month. Existing law requires the commission to notify a refiner that has failed to timely provide the required information and imposes a civil penalty on the refiner that fails to submit the required information within 5 days of being notified of the failure. This bill would establish a maximum gross gasoline refining margin at an unspecified amount per gallon and would authorize the commission to annually adjust the maximum gross gasoline refining margin, as provided. The bill would authorize the commission to petition the court to enjoin a refiner from exceeding the maximum gross gasoline refining margin. The bill would also authorize the commission to assess an administrative civil penalty on a refiner for exceeding the maximum gross gasoline refining margin, as provided. The bill would authorize the commission to grant a refiners request for an exemption from the maximum gross gasoline refining margin upon a showing by the refiner of reasonable cause, and to subject the refiner to alternative maximum margins or other conditions set by the commission. The bill would require a refiner seeking an exemption to file a statement under the penalty of perjury setting forth the basis of the request for exemption. By requiring the statement to be filed under the penalty of perjury, this bill would expand the scope of the crime of perjury, thereby imposing a state-mandated local program. The bill would require the penalties collected to be deposited into the Price Gouging Penalty Fund, which the bill would create in the State Treasury. The bill would require moneys in the fund, upon appropriation by the Legislature, to be returned, as refunds, to residents of the state.This bill would state the intent of the Legislature to enact subsequent legislation relating to transportation fuels, as described, including requiring the commission to conduct regular assessments of the supply and price of transportation fuels in the state, and of the impacts on production of refinery maintenance and turnarounds on fuel supply and price. Existing law establishes the California Department of Tax and Fee Administration and provides that the department is the successor to, and is vested with, the duties, powers, and responsibilities of the State Board of Equalization.This bill would state the intent of the Legislature to enact subsequent legislation that would direct the department, in collaboration with the commission, to investigate and report on aspects of the gasoline market, as specified. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.This bill would provide that no reimbursement is required by this act for a specified reason.
Existing law requires operators of refineries in the state that produce gasoline meeting California specifications, within 30 days of the end of each calendar month, to submit a report to the State Energy Resources Conservation and Development Commission containing certain information regarding its refining activities related to the production of gasoline in that month. Existing law requires the commission to notify a refiner that has failed to timely provide the required information and imposes a civil penalty on the refiner that fails to submit the required information within 5 days of being notified of the failure.
This bill would establish a maximum gross gasoline refining margin at an unspecified amount per gallon and would authorize the commission to annually adjust the maximum gross gasoline refining margin, as provided. The bill would authorize the commission to petition the court to enjoin a refiner from exceeding the maximum gross gasoline refining margin. The bill would also authorize the commission to assess an administrative civil penalty on a refiner for exceeding the maximum gross gasoline refining margin, as provided. The bill would authorize the commission to grant a refiners request for an exemption from the maximum gross gasoline refining margin upon a showing by the refiner of reasonable cause, and to subject the refiner to alternative maximum margins or other conditions set by the commission. The bill would require a refiner seeking an exemption to file a statement under the penalty of perjury setting forth the basis of the request for exemption. By requiring the statement to be filed under the penalty of perjury, this bill would expand the scope of the crime of perjury, thereby imposing a state-mandated local program. The bill would require the penalties collected to be deposited into the Price Gouging Penalty Fund, which the bill would create in the State Treasury. The bill would require moneys in the fund, upon appropriation by the Legislature, to be returned, as refunds, to residents of the state.
This bill would state the intent of the Legislature to enact subsequent legislation relating to transportation fuels, as described, including requiring the commission to conduct regular assessments of the supply and price of transportation fuels in the state, and of the impacts on production of refinery maintenance and turnarounds on fuel supply and price.
Existing law establishes the California Department of Tax and Fee Administration and provides that the department is the successor to, and is vested with, the duties, powers, and responsibilities of the State Board of Equalization.
This bill would state the intent of the Legislature to enact subsequent legislation that would direct the department, in collaboration with the commission, to investigate and report on aspects of the gasoline market, as specified.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
## Digest Key
## Bill Text
The people of the State of California do enact as follows:SECTION 1. The Legislature finds and declares all of the following:(a) From August to October of 2022, Californians experienced some of the highest gasoline prices ever recorded in the state, even though the price of crude oil declined, state taxes and fees remained unchanged, and gasoline prices did not increase outside the western United States.(b) Much of this increase was caused by refiners, which increased the costs and profits they added to the price California consumers paid at the pump, leading to prices that were substantially higher per gallon than average prices in the rest of the United States.(c) During the third and fourth quarters of 2022, the overlap in timing of planned maintenance at refiners facilities resulted in a larger decrease in crude oil processing capacity than would otherwise have occurred if planned maintenance at refiners facilities had not coincided.(d) During this same period of time, refiners allowed gasoline inventory levels to reach decade-low levels, placing an upward pressure on gasoline prices. (e) This refiner conduct makes clear that greater transparency into and oversight of refinery maintenance schedules and inventory is necessary, to avoid preventable supply shocks in the market for transportation fuels.(f) Historically, refinery outages and issues have created an opportunity for market participants to take advantage of naturally high prices by manipulating prices to stay higher longer, as evidenced by gasoline prices in California remaining elevated without explanation following a temporary price shock after a refinery explosion in 2015, which further demonstrates the need for greater visibility into the pricing, contracting, and marketing practices of industry participants. (g) Although preventable capacity limitations and inventory shortages played a role in the third quarter of 2022 price increases, they cannot account for all of those increases. Similar factors did not lead to extreme price spikes in prior years, suggesting that the sky-high prices Californians faced from August to October of 2022 were due in significant part to opportunistic price gouging by oil companies. (h) Indeed, during the third quarter of 2022, refiners earned record profits, with some refiners earning more than tenfold their profits for the same period of time in 2021.(i) Fundamental change is necessary to prevent future extreme price spikes and price gouging by oil companies, which are entitled to a reasonable return but are not entitled to reap exorbitant profits at the expense of Californians, many of whom rely on gasoline as an essential commodity or who are impacted by the increased cost of goods and services that results from the gasoline price spikes, even as the state begins to transition away from dependence on the fossil fuels that are destroying our climate.SEC. 2. It is the intent of the Legislature to enact subsequent legislation that would do all of the following:(a) Require that the State Energy Resources Conservation and Development Commission (Energy Commission) conduct regular assessments of the supply and price of transportation fuels in the state, and of the impacts on production of refinery maintenance and turnarounds on fuel supply and price.(b) Expand the Energy Commissions authority to investigate and obtain necessary information, including information regarding pricing, supply contracts, and inventory management, from participants in the market for transportation fuels.(c) Expand the Energy Commissions authority to order that refinery maintenance and turnarounds be rescheduled in specified circumstances, when consistent with employee and public safety and necessary to avoid supply shocks in the market for transportation fuels.(d) Establish an advisory committee of fuels market experts to provide the Energy Commission with independent advice and insights.(e) Require the Energy Commission and the State Air Resources Board, in consultation with the states fuel producers and refiners, to plan for and monitor progress toward the states reliable, safe, equitable, and affordable transition away from petroleum fuels, and to issue periodic reports to the Governor and the Legislature.(f) Supplement existing refinery reporting requirements by requiring more detailed reports to the Energy Commission on transportation fuel imports, inventory levels, and transactions, and on refinery maintenance and turnarounds. SEC. 3. It is the intent of the Legislature to enact subsequent legislation that would direct the California Department of Tax and Fee Administration, in collaboration with the State Energy Resources Conservation and Development Commission, to investigate and report on the drivers of and factors affecting the price of gasoline in the refining, distribution, and retail segments of the gasoline market; to uncover pricing irregularities in the California gasoline market and their effect on tax revenue; and to report its findings to the Governor and the Legislature. SEC. 4. Section 25355.5 is added to the Public Resources Code, to read:25355.5. (a) For purposes of this section, the following definitions apply:(1) Gross gasoline refining margin excluding state program costs means the amount, expressed in dollars per barrel and calculated on a monthly basis, equal to the volume-weighted average rack price of wholesale gasoline sold by the refiner, less the volume-weighted fees or estimated valuations of costs embedded in all of the refiners wholesale gasoline sales associated with the low carbon fuel standard and the cap and trade cap-at-the-rack program, less the refiners volume-weighted average acquisition cost.(2) Maximum gross gasoline refining margin means the maximum amount of gross gasoline refining margin excluding state program costs established or adjusted under subdivision (c).(3) Volume-weighted average acquisition cost is the combined volume-weighted average of the refiners volume-weighted average crude oil acquisition cost and the refiners volume-weighted cost of acquiring refined gasoline imported to California or acquired from another refiner.(4) Volume-weighted average rack price of wholesale gasoline means the combined volume-weighted average of the refiners rack price of branded and unbranded rack sales reported under paragraph (3) of subdivision (b) of Section 25355.(5) Volume-weighted average crude oil acquisition cost is the amount reported as required by paragraph (2) of subdivision (b) of Section 25355.(b) Reports required under subdivision (b) of Section 25355 shall also include the volume weighted average cost of any refined gasoline acquired by a refiner during the calendar month, and the volume in barrels of refined gasoline acquired.(c) (1) (A) On and after the effective date of this section, the maximum gross gasoline refining margin shall be ____ cents per gallon.(B) On July 1, 2024, and on July 1 of each year thereafter, the maximum gross gasoline refining margin shall automatically be adjusted annually to reflect the changes in the Consumer Price Index.(2) Beginning ____, the commission may, at a publicly noticed meeting, adjust the maximum gross gasoline refining margin based on market data as necessary to fulfill the intent and purposes of the section and to ensure that a full and affordable supply of gasoline is available to Californians.(3) Within 15 days of an adjustment to the maximum gross gasoline refining margin pursuant to subparagraph (B) of paragraph (1) or paragraph (2), the commission shall notify refiners of the new maximum gross gasoline refining margin by a means determined by the commission that may include, but is not limited to, mail, email, or internet website postings.(4) Adjustments to the maximum gross gasoline refining margin pursuant to this subdivision shall be effective on the first day of the calendar month at least 15 days after the commission gives public notice of the adjustment, unless the commission orders otherwise.(d) On and after ____, it is a violation of this section for a refiner to exceed the maximum gross gasoline refining margin.(e) The commission may petition a court to enjoin a refiner from violating subdivision (d).(f) The commission may impose an administrative civil penalty for a violation of subdivision (d). The amount of the penalty shall presumptively be set based on the amount by which the refiners gross gasoline refining margin excluding state program costs exceeds the maximum gross gasoline refining margin, converted from barrels to gallons and multiplied by the number of gallons sold by the refiner during the calendar month through all transactions described in paragraph (4) of subdivision (b) of Section 25355, as follows:(1) ____ percent on amounts earned by a refiner that exceed the maximum gross gasoline refining margin by less than ____ cents per gallon.(2) ____ percent on amounts earned by a refiner that exceed the maximum gross gasoline refining margin between ____ and ____ cents, inclusive, per gallon.(3) ____ percent on amounts earned by a refiner that exceed the maximum gross gasoline refining margin by more than ____ cents per gallon.(g) (1) The commission may, in its discretion, grant a refiners request for an exemption from the maximum gross gasoline refining margin upon a showing by the refiner of reasonable cause, and subject to alternative maximum margins or other conditions as the commission may set.(2) Any refiner seeking an exemption shall file a statement with the commission, signed under penalty of perjury, setting forth the facts that form the basis for the request for exemption.(3) The commission shall by regulation develop procedures for considering and adjudicating requests made pursuant to this subdivision.(h) (1) The commission shall identify, on a quarterly basis, the name and address of each refiner that has exceeded the maximum gross gasoline refining margin for any month during the previous quarter, and the amount of administrative civil penalty to be assessed.(2) Before imposing the administrative civil penalty under subdivision (f), the executive director of the commission shall issue and serve a complaint on the refiner, and the commission shall hold a hearing, adopt a decision, and require payment of the penalty in accordance with the procedures described in subdivisions (a) to (d), inclusive, of Section 25534.1.(3) All penalties collected under this section, less refunds and reimbursement to the commission for expenses incurred in the collection of the penalties, shall be deposited into the Price Gouging Penalty Fund, which is hereby created in the State Treasury and, upon appropriation by the Legislature, shall be returned as refunds to residents of the state.(4) The Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code) does not apply to any regulation, guideline, or adjustment of the maximum gross gasoline refining margin adopted by the commission under this chapter.SEC. 5. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
The people of the State of California do enact as follows:
## The people of the State of California do enact as follows:
SECTION 1. The Legislature finds and declares all of the following:(a) From August to October of 2022, Californians experienced some of the highest gasoline prices ever recorded in the state, even though the price of crude oil declined, state taxes and fees remained unchanged, and gasoline prices did not increase outside the western United States.(b) Much of this increase was caused by refiners, which increased the costs and profits they added to the price California consumers paid at the pump, leading to prices that were substantially higher per gallon than average prices in the rest of the United States.(c) During the third and fourth quarters of 2022, the overlap in timing of planned maintenance at refiners facilities resulted in a larger decrease in crude oil processing capacity than would otherwise have occurred if planned maintenance at refiners facilities had not coincided.(d) During this same period of time, refiners allowed gasoline inventory levels to reach decade-low levels, placing an upward pressure on gasoline prices. (e) This refiner conduct makes clear that greater transparency into and oversight of refinery maintenance schedules and inventory is necessary, to avoid preventable supply shocks in the market for transportation fuels.(f) Historically, refinery outages and issues have created an opportunity for market participants to take advantage of naturally high prices by manipulating prices to stay higher longer, as evidenced by gasoline prices in California remaining elevated without explanation following a temporary price shock after a refinery explosion in 2015, which further demonstrates the need for greater visibility into the pricing, contracting, and marketing practices of industry participants. (g) Although preventable capacity limitations and inventory shortages played a role in the third quarter of 2022 price increases, they cannot account for all of those increases. Similar factors did not lead to extreme price spikes in prior years, suggesting that the sky-high prices Californians faced from August to October of 2022 were due in significant part to opportunistic price gouging by oil companies. (h) Indeed, during the third quarter of 2022, refiners earned record profits, with some refiners earning more than tenfold their profits for the same period of time in 2021.(i) Fundamental change is necessary to prevent future extreme price spikes and price gouging by oil companies, which are entitled to a reasonable return but are not entitled to reap exorbitant profits at the expense of Californians, many of whom rely on gasoline as an essential commodity or who are impacted by the increased cost of goods and services that results from the gasoline price spikes, even as the state begins to transition away from dependence on the fossil fuels that are destroying our climate.
SECTION 1. The Legislature finds and declares all of the following:(a) From August to October of 2022, Californians experienced some of the highest gasoline prices ever recorded in the state, even though the price of crude oil declined, state taxes and fees remained unchanged, and gasoline prices did not increase outside the western United States.(b) Much of this increase was caused by refiners, which increased the costs and profits they added to the price California consumers paid at the pump, leading to prices that were substantially higher per gallon than average prices in the rest of the United States.(c) During the third and fourth quarters of 2022, the overlap in timing of planned maintenance at refiners facilities resulted in a larger decrease in crude oil processing capacity than would otherwise have occurred if planned maintenance at refiners facilities had not coincided.(d) During this same period of time, refiners allowed gasoline inventory levels to reach decade-low levels, placing an upward pressure on gasoline prices. (e) This refiner conduct makes clear that greater transparency into and oversight of refinery maintenance schedules and inventory is necessary, to avoid preventable supply shocks in the market for transportation fuels.(f) Historically, refinery outages and issues have created an opportunity for market participants to take advantage of naturally high prices by manipulating prices to stay higher longer, as evidenced by gasoline prices in California remaining elevated without explanation following a temporary price shock after a refinery explosion in 2015, which further demonstrates the need for greater visibility into the pricing, contracting, and marketing practices of industry participants. (g) Although preventable capacity limitations and inventory shortages played a role in the third quarter of 2022 price increases, they cannot account for all of those increases. Similar factors did not lead to extreme price spikes in prior years, suggesting that the sky-high prices Californians faced from August to October of 2022 were due in significant part to opportunistic price gouging by oil companies. (h) Indeed, during the third quarter of 2022, refiners earned record profits, with some refiners earning more than tenfold their profits for the same period of time in 2021.(i) Fundamental change is necessary to prevent future extreme price spikes and price gouging by oil companies, which are entitled to a reasonable return but are not entitled to reap exorbitant profits at the expense of Californians, many of whom rely on gasoline as an essential commodity or who are impacted by the increased cost of goods and services that results from the gasoline price spikes, even as the state begins to transition away from dependence on the fossil fuels that are destroying our climate.
SECTION 1. The Legislature finds and declares all of the following:
### SECTION 1.
(a) From August to October of 2022, Californians experienced some of the highest gasoline prices ever recorded in the state, even though the price of crude oil declined, state taxes and fees remained unchanged, and gasoline prices did not increase outside the western United States.
(b) Much of this increase was caused by refiners, which increased the costs and profits they added to the price California consumers paid at the pump, leading to prices that were substantially higher per gallon than average prices in the rest of the United States.
(c) During the third and fourth quarters of 2022, the overlap in timing of planned maintenance at refiners facilities resulted in a larger decrease in crude oil processing capacity than would otherwise have occurred if planned maintenance at refiners facilities had not coincided.
(d) During this same period of time, refiners allowed gasoline inventory levels to reach decade-low levels, placing an upward pressure on gasoline prices.
(e) This refiner conduct makes clear that greater transparency into and oversight of refinery maintenance schedules and inventory is necessary, to avoid preventable supply shocks in the market for transportation fuels.
(f) Historically, refinery outages and issues have created an opportunity for market participants to take advantage of naturally high prices by manipulating prices to stay higher longer, as evidenced by gasoline prices in California remaining elevated without explanation following a temporary price shock after a refinery explosion in 2015, which further demonstrates the need for greater visibility into the pricing, contracting, and marketing practices of industry participants.
(g) Although preventable capacity limitations and inventory shortages played a role in the third quarter of 2022 price increases, they cannot account for all of those increases. Similar factors did not lead to extreme price spikes in prior years, suggesting that the sky-high prices Californians faced from August to October of 2022 were due in significant part to opportunistic price gouging by oil companies.
(h) Indeed, during the third quarter of 2022, refiners earned record profits, with some refiners earning more than tenfold their profits for the same period of time in 2021.
(i) Fundamental change is necessary to prevent future extreme price spikes and price gouging by oil companies, which are entitled to a reasonable return but are not entitled to reap exorbitant profits at the expense of Californians, many of whom rely on gasoline as an essential commodity or who are impacted by the increased cost of goods and services that results from the gasoline price spikes, even as the state begins to transition away from dependence on the fossil fuels that are destroying our climate.
SEC. 2. It is the intent of the Legislature to enact subsequent legislation that would do all of the following:(a) Require that the State Energy Resources Conservation and Development Commission (Energy Commission) conduct regular assessments of the supply and price of transportation fuels in the state, and of the impacts on production of refinery maintenance and turnarounds on fuel supply and price.(b) Expand the Energy Commissions authority to investigate and obtain necessary information, including information regarding pricing, supply contracts, and inventory management, from participants in the market for transportation fuels.(c) Expand the Energy Commissions authority to order that refinery maintenance and turnarounds be rescheduled in specified circumstances, when consistent with employee and public safety and necessary to avoid supply shocks in the market for transportation fuels.(d) Establish an advisory committee of fuels market experts to provide the Energy Commission with independent advice and insights.(e) Require the Energy Commission and the State Air Resources Board, in consultation with the states fuel producers and refiners, to plan for and monitor progress toward the states reliable, safe, equitable, and affordable transition away from petroleum fuels, and to issue periodic reports to the Governor and the Legislature.(f) Supplement existing refinery reporting requirements by requiring more detailed reports to the Energy Commission on transportation fuel imports, inventory levels, and transactions, and on refinery maintenance and turnarounds.
SEC. 2. It is the intent of the Legislature to enact subsequent legislation that would do all of the following:(a) Require that the State Energy Resources Conservation and Development Commission (Energy Commission) conduct regular assessments of the supply and price of transportation fuels in the state, and of the impacts on production of refinery maintenance and turnarounds on fuel supply and price.(b) Expand the Energy Commissions authority to investigate and obtain necessary information, including information regarding pricing, supply contracts, and inventory management, from participants in the market for transportation fuels.(c) Expand the Energy Commissions authority to order that refinery maintenance and turnarounds be rescheduled in specified circumstances, when consistent with employee and public safety and necessary to avoid supply shocks in the market for transportation fuels.(d) Establish an advisory committee of fuels market experts to provide the Energy Commission with independent advice and insights.(e) Require the Energy Commission and the State Air Resources Board, in consultation with the states fuel producers and refiners, to plan for and monitor progress toward the states reliable, safe, equitable, and affordable transition away from petroleum fuels, and to issue periodic reports to the Governor and the Legislature.(f) Supplement existing refinery reporting requirements by requiring more detailed reports to the Energy Commission on transportation fuel imports, inventory levels, and transactions, and on refinery maintenance and turnarounds.
SEC. 2. It is the intent of the Legislature to enact subsequent legislation that would do all of the following:
### SEC. 2.
(a) Require that the State Energy Resources Conservation and Development Commission (Energy Commission) conduct regular assessments of the supply and price of transportation fuels in the state, and of the impacts on production of refinery maintenance and turnarounds on fuel supply and price.
(b) Expand the Energy Commissions authority to investigate and obtain necessary information, including information regarding pricing, supply contracts, and inventory management, from participants in the market for transportation fuels.
(c) Expand the Energy Commissions authority to order that refinery maintenance and turnarounds be rescheduled in specified circumstances, when consistent with employee and public safety and necessary to avoid supply shocks in the market for transportation fuels.
(d) Establish an advisory committee of fuels market experts to provide the Energy Commission with independent advice and insights.
(e) Require the Energy Commission and the State Air Resources Board, in consultation with the states fuel producers and refiners, to plan for and monitor progress toward the states reliable, safe, equitable, and affordable transition away from petroleum fuels, and to issue periodic reports to the Governor and the Legislature.
(f) Supplement existing refinery reporting requirements by requiring more detailed reports to the Energy Commission on transportation fuel imports, inventory levels, and transactions, and on refinery maintenance and turnarounds.
SEC. 3. It is the intent of the Legislature to enact subsequent legislation that would direct the California Department of Tax and Fee Administration, in collaboration with the State Energy Resources Conservation and Development Commission, to investigate and report on the drivers of and factors affecting the price of gasoline in the refining, distribution, and retail segments of the gasoline market; to uncover pricing irregularities in the California gasoline market and their effect on tax revenue; and to report its findings to the Governor and the Legislature.
SEC. 3. It is the intent of the Legislature to enact subsequent legislation that would direct the California Department of Tax and Fee Administration, in collaboration with the State Energy Resources Conservation and Development Commission, to investigate and report on the drivers of and factors affecting the price of gasoline in the refining, distribution, and retail segments of the gasoline market; to uncover pricing irregularities in the California gasoline market and their effect on tax revenue; and to report its findings to the Governor and the Legislature.
SEC. 3. It is the intent of the Legislature to enact subsequent legislation that would direct the California Department of Tax and Fee Administration, in collaboration with the State Energy Resources Conservation and Development Commission, to investigate and report on the drivers of and factors affecting the price of gasoline in the refining, distribution, and retail segments of the gasoline market; to uncover pricing irregularities in the California gasoline market and their effect on tax revenue; and to report its findings to the Governor and the Legislature.
### SEC. 3.
SEC. 4. Section 25355.5 is added to the Public Resources Code, to read:25355.5. (a) For purposes of this section, the following definitions apply:(1) Gross gasoline refining margin excluding state program costs means the amount, expressed in dollars per barrel and calculated on a monthly basis, equal to the volume-weighted average rack price of wholesale gasoline sold by the refiner, less the volume-weighted fees or estimated valuations of costs embedded in all of the refiners wholesale gasoline sales associated with the low carbon fuel standard and the cap and trade cap-at-the-rack program, less the refiners volume-weighted average acquisition cost.(2) Maximum gross gasoline refining margin means the maximum amount of gross gasoline refining margin excluding state program costs established or adjusted under subdivision (c).(3) Volume-weighted average acquisition cost is the combined volume-weighted average of the refiners volume-weighted average crude oil acquisition cost and the refiners volume-weighted cost of acquiring refined gasoline imported to California or acquired from another refiner.(4) Volume-weighted average rack price of wholesale gasoline means the combined volume-weighted average of the refiners rack price of branded and unbranded rack sales reported under paragraph (3) of subdivision (b) of Section 25355.(5) Volume-weighted average crude oil acquisition cost is the amount reported as required by paragraph (2) of subdivision (b) of Section 25355.(b) Reports required under subdivision (b) of Section 25355 shall also include the volume weighted average cost of any refined gasoline acquired by a refiner during the calendar month, and the volume in barrels of refined gasoline acquired.(c) (1) (A) On and after the effective date of this section, the maximum gross gasoline refining margin shall be ____ cents per gallon.(B) On July 1, 2024, and on July 1 of each year thereafter, the maximum gross gasoline refining margin shall automatically be adjusted annually to reflect the changes in the Consumer Price Index.(2) Beginning ____, the commission may, at a publicly noticed meeting, adjust the maximum gross gasoline refining margin based on market data as necessary to fulfill the intent and purposes of the section and to ensure that a full and affordable supply of gasoline is available to Californians.(3) Within 15 days of an adjustment to the maximum gross gasoline refining margin pursuant to subparagraph (B) of paragraph (1) or paragraph (2), the commission shall notify refiners of the new maximum gross gasoline refining margin by a means determined by the commission that may include, but is not limited to, mail, email, or internet website postings.(4) Adjustments to the maximum gross gasoline refining margin pursuant to this subdivision shall be effective on the first day of the calendar month at least 15 days after the commission gives public notice of the adjustment, unless the commission orders otherwise.(d) On and after ____, it is a violation of this section for a refiner to exceed the maximum gross gasoline refining margin.(e) The commission may petition a court to enjoin a refiner from violating subdivision (d).(f) The commission may impose an administrative civil penalty for a violation of subdivision (d). The amount of the penalty shall presumptively be set based on the amount by which the refiners gross gasoline refining margin excluding state program costs exceeds the maximum gross gasoline refining margin, converted from barrels to gallons and multiplied by the number of gallons sold by the refiner during the calendar month through all transactions described in paragraph (4) of subdivision (b) of Section 25355, as follows:(1) ____ percent on amounts earned by a refiner that exceed the maximum gross gasoline refining margin by less than ____ cents per gallon.(2) ____ percent on amounts earned by a refiner that exceed the maximum gross gasoline refining margin between ____ and ____ cents, inclusive, per gallon.(3) ____ percent on amounts earned by a refiner that exceed the maximum gross gasoline refining margin by more than ____ cents per gallon.(g) (1) The commission may, in its discretion, grant a refiners request for an exemption from the maximum gross gasoline refining margin upon a showing by the refiner of reasonable cause, and subject to alternative maximum margins or other conditions as the commission may set.(2) Any refiner seeking an exemption shall file a statement with the commission, signed under penalty of perjury, setting forth the facts that form the basis for the request for exemption.(3) The commission shall by regulation develop procedures for considering and adjudicating requests made pursuant to this subdivision.(h) (1) The commission shall identify, on a quarterly basis, the name and address of each refiner that has exceeded the maximum gross gasoline refining margin for any month during the previous quarter, and the amount of administrative civil penalty to be assessed.(2) Before imposing the administrative civil penalty under subdivision (f), the executive director of the commission shall issue and serve a complaint on the refiner, and the commission shall hold a hearing, adopt a decision, and require payment of the penalty in accordance with the procedures described in subdivisions (a) to (d), inclusive, of Section 25534.1.(3) All penalties collected under this section, less refunds and reimbursement to the commission for expenses incurred in the collection of the penalties, shall be deposited into the Price Gouging Penalty Fund, which is hereby created in the State Treasury and, upon appropriation by the Legislature, shall be returned as refunds to residents of the state.(4) The Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code) does not apply to any regulation, guideline, or adjustment of the maximum gross gasoline refining margin adopted by the commission under this chapter.
SEC. 4. Section 25355.5 is added to the Public Resources Code, to read:
### SEC. 4.
25355.5. (a) For purposes of this section, the following definitions apply:(1) Gross gasoline refining margin excluding state program costs means the amount, expressed in dollars per barrel and calculated on a monthly basis, equal to the volume-weighted average rack price of wholesale gasoline sold by the refiner, less the volume-weighted fees or estimated valuations of costs embedded in all of the refiners wholesale gasoline sales associated with the low carbon fuel standard and the cap and trade cap-at-the-rack program, less the refiners volume-weighted average acquisition cost.(2) Maximum gross gasoline refining margin means the maximum amount of gross gasoline refining margin excluding state program costs established or adjusted under subdivision (c).(3) Volume-weighted average acquisition cost is the combined volume-weighted average of the refiners volume-weighted average crude oil acquisition cost and the refiners volume-weighted cost of acquiring refined gasoline imported to California or acquired from another refiner.(4) Volume-weighted average rack price of wholesale gasoline means the combined volume-weighted average of the refiners rack price of branded and unbranded rack sales reported under paragraph (3) of subdivision (b) of Section 25355.(5) Volume-weighted average crude oil acquisition cost is the amount reported as required by paragraph (2) of subdivision (b) of Section 25355.(b) Reports required under subdivision (b) of Section 25355 shall also include the volume weighted average cost of any refined gasoline acquired by a refiner during the calendar month, and the volume in barrels of refined gasoline acquired.(c) (1) (A) On and after the effective date of this section, the maximum gross gasoline refining margin shall be ____ cents per gallon.(B) On July 1, 2024, and on July 1 of each year thereafter, the maximum gross gasoline refining margin shall automatically be adjusted annually to reflect the changes in the Consumer Price Index.(2) Beginning ____, the commission may, at a publicly noticed meeting, adjust the maximum gross gasoline refining margin based on market data as necessary to fulfill the intent and purposes of the section and to ensure that a full and affordable supply of gasoline is available to Californians.(3) Within 15 days of an adjustment to the maximum gross gasoline refining margin pursuant to subparagraph (B) of paragraph (1) or paragraph (2), the commission shall notify refiners of the new maximum gross gasoline refining margin by a means determined by the commission that may include, but is not limited to, mail, email, or internet website postings.(4) Adjustments to the maximum gross gasoline refining margin pursuant to this subdivision shall be effective on the first day of the calendar month at least 15 days after the commission gives public notice of the adjustment, unless the commission orders otherwise.(d) On and after ____, it is a violation of this section for a refiner to exceed the maximum gross gasoline refining margin.(e) The commission may petition a court to enjoin a refiner from violating subdivision (d).(f) The commission may impose an administrative civil penalty for a violation of subdivision (d). The amount of the penalty shall presumptively be set based on the amount by which the refiners gross gasoline refining margin excluding state program costs exceeds the maximum gross gasoline refining margin, converted from barrels to gallons and multiplied by the number of gallons sold by the refiner during the calendar month through all transactions described in paragraph (4) of subdivision (b) of Section 25355, as follows:(1) ____ percent on amounts earned by a refiner that exceed the maximum gross gasoline refining margin by less than ____ cents per gallon.(2) ____ percent on amounts earned by a refiner that exceed the maximum gross gasoline refining margin between ____ and ____ cents, inclusive, per gallon.(3) ____ percent on amounts earned by a refiner that exceed the maximum gross gasoline refining margin by more than ____ cents per gallon.(g) (1) The commission may, in its discretion, grant a refiners request for an exemption from the maximum gross gasoline refining margin upon a showing by the refiner of reasonable cause, and subject to alternative maximum margins or other conditions as the commission may set.(2) Any refiner seeking an exemption shall file a statement with the commission, signed under penalty of perjury, setting forth the facts that form the basis for the request for exemption.(3) The commission shall by regulation develop procedures for considering and adjudicating requests made pursuant to this subdivision.(h) (1) The commission shall identify, on a quarterly basis, the name and address of each refiner that has exceeded the maximum gross gasoline refining margin for any month during the previous quarter, and the amount of administrative civil penalty to be assessed.(2) Before imposing the administrative civil penalty under subdivision (f), the executive director of the commission shall issue and serve a complaint on the refiner, and the commission shall hold a hearing, adopt a decision, and require payment of the penalty in accordance with the procedures described in subdivisions (a) to (d), inclusive, of Section 25534.1.(3) All penalties collected under this section, less refunds and reimbursement to the commission for expenses incurred in the collection of the penalties, shall be deposited into the Price Gouging Penalty Fund, which is hereby created in the State Treasury and, upon appropriation by the Legislature, shall be returned as refunds to residents of the state.(4) The Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code) does not apply to any regulation, guideline, or adjustment of the maximum gross gasoline refining margin adopted by the commission under this chapter.
25355.5. (a) For purposes of this section, the following definitions apply:(1) Gross gasoline refining margin excluding state program costs means the amount, expressed in dollars per barrel and calculated on a monthly basis, equal to the volume-weighted average rack price of wholesale gasoline sold by the refiner, less the volume-weighted fees or estimated valuations of costs embedded in all of the refiners wholesale gasoline sales associated with the low carbon fuel standard and the cap and trade cap-at-the-rack program, less the refiners volume-weighted average acquisition cost.(2) Maximum gross gasoline refining margin means the maximum amount of gross gasoline refining margin excluding state program costs established or adjusted under subdivision (c).(3) Volume-weighted average acquisition cost is the combined volume-weighted average of the refiners volume-weighted average crude oil acquisition cost and the refiners volume-weighted cost of acquiring refined gasoline imported to California or acquired from another refiner.(4) Volume-weighted average rack price of wholesale gasoline means the combined volume-weighted average of the refiners rack price of branded and unbranded rack sales reported under paragraph (3) of subdivision (b) of Section 25355.(5) Volume-weighted average crude oil acquisition cost is the amount reported as required by paragraph (2) of subdivision (b) of Section 25355.(b) Reports required under subdivision (b) of Section 25355 shall also include the volume weighted average cost of any refined gasoline acquired by a refiner during the calendar month, and the volume in barrels of refined gasoline acquired.(c) (1) (A) On and after the effective date of this section, the maximum gross gasoline refining margin shall be ____ cents per gallon.(B) On July 1, 2024, and on July 1 of each year thereafter, the maximum gross gasoline refining margin shall automatically be adjusted annually to reflect the changes in the Consumer Price Index.(2) Beginning ____, the commission may, at a publicly noticed meeting, adjust the maximum gross gasoline refining margin based on market data as necessary to fulfill the intent and purposes of the section and to ensure that a full and affordable supply of gasoline is available to Californians.(3) Within 15 days of an adjustment to the maximum gross gasoline refining margin pursuant to subparagraph (B) of paragraph (1) or paragraph (2), the commission shall notify refiners of the new maximum gross gasoline refining margin by a means determined by the commission that may include, but is not limited to, mail, email, or internet website postings.(4) Adjustments to the maximum gross gasoline refining margin pursuant to this subdivision shall be effective on the first day of the calendar month at least 15 days after the commission gives public notice of the adjustment, unless the commission orders otherwise.(d) On and after ____, it is a violation of this section for a refiner to exceed the maximum gross gasoline refining margin.(e) The commission may petition a court to enjoin a refiner from violating subdivision (d).(f) The commission may impose an administrative civil penalty for a violation of subdivision (d). The amount of the penalty shall presumptively be set based on the amount by which the refiners gross gasoline refining margin excluding state program costs exceeds the maximum gross gasoline refining margin, converted from barrels to gallons and multiplied by the number of gallons sold by the refiner during the calendar month through all transactions described in paragraph (4) of subdivision (b) of Section 25355, as follows:(1) ____ percent on amounts earned by a refiner that exceed the maximum gross gasoline refining margin by less than ____ cents per gallon.(2) ____ percent on amounts earned by a refiner that exceed the maximum gross gasoline refining margin between ____ and ____ cents, inclusive, per gallon.(3) ____ percent on amounts earned by a refiner that exceed the maximum gross gasoline refining margin by more than ____ cents per gallon.(g) (1) The commission may, in its discretion, grant a refiners request for an exemption from the maximum gross gasoline refining margin upon a showing by the refiner of reasonable cause, and subject to alternative maximum margins or other conditions as the commission may set.(2) Any refiner seeking an exemption shall file a statement with the commission, signed under penalty of perjury, setting forth the facts that form the basis for the request for exemption.(3) The commission shall by regulation develop procedures for considering and adjudicating requests made pursuant to this subdivision.(h) (1) The commission shall identify, on a quarterly basis, the name and address of each refiner that has exceeded the maximum gross gasoline refining margin for any month during the previous quarter, and the amount of administrative civil penalty to be assessed.(2) Before imposing the administrative civil penalty under subdivision (f), the executive director of the commission shall issue and serve a complaint on the refiner, and the commission shall hold a hearing, adopt a decision, and require payment of the penalty in accordance with the procedures described in subdivisions (a) to (d), inclusive, of Section 25534.1.(3) All penalties collected under this section, less refunds and reimbursement to the commission for expenses incurred in the collection of the penalties, shall be deposited into the Price Gouging Penalty Fund, which is hereby created in the State Treasury and, upon appropriation by the Legislature, shall be returned as refunds to residents of the state.(4) The Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code) does not apply to any regulation, guideline, or adjustment of the maximum gross gasoline refining margin adopted by the commission under this chapter.
25355.5. (a) For purposes of this section, the following definitions apply:(1) Gross gasoline refining margin excluding state program costs means the amount, expressed in dollars per barrel and calculated on a monthly basis, equal to the volume-weighted average rack price of wholesale gasoline sold by the refiner, less the volume-weighted fees or estimated valuations of costs embedded in all of the refiners wholesale gasoline sales associated with the low carbon fuel standard and the cap and trade cap-at-the-rack program, less the refiners volume-weighted average acquisition cost.(2) Maximum gross gasoline refining margin means the maximum amount of gross gasoline refining margin excluding state program costs established or adjusted under subdivision (c).(3) Volume-weighted average acquisition cost is the combined volume-weighted average of the refiners volume-weighted average crude oil acquisition cost and the refiners volume-weighted cost of acquiring refined gasoline imported to California or acquired from another refiner.(4) Volume-weighted average rack price of wholesale gasoline means the combined volume-weighted average of the refiners rack price of branded and unbranded rack sales reported under paragraph (3) of subdivision (b) of Section 25355.(5) Volume-weighted average crude oil acquisition cost is the amount reported as required by paragraph (2) of subdivision (b) of Section 25355.(b) Reports required under subdivision (b) of Section 25355 shall also include the volume weighted average cost of any refined gasoline acquired by a refiner during the calendar month, and the volume in barrels of refined gasoline acquired.(c) (1) (A) On and after the effective date of this section, the maximum gross gasoline refining margin shall be ____ cents per gallon.(B) On July 1, 2024, and on July 1 of each year thereafter, the maximum gross gasoline refining margin shall automatically be adjusted annually to reflect the changes in the Consumer Price Index.(2) Beginning ____, the commission may, at a publicly noticed meeting, adjust the maximum gross gasoline refining margin based on market data as necessary to fulfill the intent and purposes of the section and to ensure that a full and affordable supply of gasoline is available to Californians.(3) Within 15 days of an adjustment to the maximum gross gasoline refining margin pursuant to subparagraph (B) of paragraph (1) or paragraph (2), the commission shall notify refiners of the new maximum gross gasoline refining margin by a means determined by the commission that may include, but is not limited to, mail, email, or internet website postings.(4) Adjustments to the maximum gross gasoline refining margin pursuant to this subdivision shall be effective on the first day of the calendar month at least 15 days after the commission gives public notice of the adjustment, unless the commission orders otherwise.(d) On and after ____, it is a violation of this section for a refiner to exceed the maximum gross gasoline refining margin.(e) The commission may petition a court to enjoin a refiner from violating subdivision (d).(f) The commission may impose an administrative civil penalty for a violation of subdivision (d). The amount of the penalty shall presumptively be set based on the amount by which the refiners gross gasoline refining margin excluding state program costs exceeds the maximum gross gasoline refining margin, converted from barrels to gallons and multiplied by the number of gallons sold by the refiner during the calendar month through all transactions described in paragraph (4) of subdivision (b) of Section 25355, as follows:(1) ____ percent on amounts earned by a refiner that exceed the maximum gross gasoline refining margin by less than ____ cents per gallon.(2) ____ percent on amounts earned by a refiner that exceed the maximum gross gasoline refining margin between ____ and ____ cents, inclusive, per gallon.(3) ____ percent on amounts earned by a refiner that exceed the maximum gross gasoline refining margin by more than ____ cents per gallon.(g) (1) The commission may, in its discretion, grant a refiners request for an exemption from the maximum gross gasoline refining margin upon a showing by the refiner of reasonable cause, and subject to alternative maximum margins or other conditions as the commission may set.(2) Any refiner seeking an exemption shall file a statement with the commission, signed under penalty of perjury, setting forth the facts that form the basis for the request for exemption.(3) The commission shall by regulation develop procedures for considering and adjudicating requests made pursuant to this subdivision.(h) (1) The commission shall identify, on a quarterly basis, the name and address of each refiner that has exceeded the maximum gross gasoline refining margin for any month during the previous quarter, and the amount of administrative civil penalty to be assessed.(2) Before imposing the administrative civil penalty under subdivision (f), the executive director of the commission shall issue and serve a complaint on the refiner, and the commission shall hold a hearing, adopt a decision, and require payment of the penalty in accordance with the procedures described in subdivisions (a) to (d), inclusive, of Section 25534.1.(3) All penalties collected under this section, less refunds and reimbursement to the commission for expenses incurred in the collection of the penalties, shall be deposited into the Price Gouging Penalty Fund, which is hereby created in the State Treasury and, upon appropriation by the Legislature, shall be returned as refunds to residents of the state.(4) The Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code) does not apply to any regulation, guideline, or adjustment of the maximum gross gasoline refining margin adopted by the commission under this chapter.
25355.5. (a) For purposes of this section, the following definitions apply:
(1) Gross gasoline refining margin excluding state program costs means the amount, expressed in dollars per barrel and calculated on a monthly basis, equal to the volume-weighted average rack price of wholesale gasoline sold by the refiner, less the volume-weighted fees or estimated valuations of costs embedded in all of the refiners wholesale gasoline sales associated with the low carbon fuel standard and the cap and trade cap-at-the-rack program, less the refiners volume-weighted average acquisition cost.
(2) Maximum gross gasoline refining margin means the maximum amount of gross gasoline refining margin excluding state program costs established or adjusted under subdivision (c).
(3) Volume-weighted average acquisition cost is the combined volume-weighted average of the refiners volume-weighted average crude oil acquisition cost and the refiners volume-weighted cost of acquiring refined gasoline imported to California or acquired from another refiner.
(4) Volume-weighted average rack price of wholesale gasoline means the combined volume-weighted average of the refiners rack price of branded and unbranded rack sales reported under paragraph (3) of subdivision (b) of Section 25355.
(5) Volume-weighted average crude oil acquisition cost is the amount reported as required by paragraph (2) of subdivision (b) of Section 25355.
(b) Reports required under subdivision (b) of Section 25355 shall also include the volume weighted average cost of any refined gasoline acquired by a refiner during the calendar month, and the volume in barrels of refined gasoline acquired.
(c) (1) (A) On and after the effective date of this section, the maximum gross gasoline refining margin shall be ____ cents per gallon.
(B) On July 1, 2024, and on July 1 of each year thereafter, the maximum gross gasoline refining margin shall automatically be adjusted annually to reflect the changes in the Consumer Price Index.
(2) Beginning ____, the commission may, at a publicly noticed meeting, adjust the maximum gross gasoline refining margin based on market data as necessary to fulfill the intent and purposes of the section and to ensure that a full and affordable supply of gasoline is available to Californians.
(3) Within 15 days of an adjustment to the maximum gross gasoline refining margin pursuant to subparagraph (B) of paragraph (1) or paragraph (2), the commission shall notify refiners of the new maximum gross gasoline refining margin by a means determined by the commission that may include, but is not limited to, mail, email, or internet website postings.
(4) Adjustments to the maximum gross gasoline refining margin pursuant to this subdivision shall be effective on the first day of the calendar month at least 15 days after the commission gives public notice of the adjustment, unless the commission orders otherwise.
(d) On and after ____, it is a violation of this section for a refiner to exceed the maximum gross gasoline refining margin.
(e) The commission may petition a court to enjoin a refiner from violating subdivision (d).
(f) The commission may impose an administrative civil penalty for a violation of subdivision (d). The amount of the penalty shall presumptively be set based on the amount by which the refiners gross gasoline refining margin excluding state program costs exceeds the maximum gross gasoline refining margin, converted from barrels to gallons and multiplied by the number of gallons sold by the refiner during the calendar month through all transactions described in paragraph (4) of subdivision (b) of Section 25355, as follows:
(1) ____ percent on amounts earned by a refiner that exceed the maximum gross gasoline refining margin by less than ____ cents per gallon.
(2) ____ percent on amounts earned by a refiner that exceed the maximum gross gasoline refining margin between ____ and ____ cents, inclusive, per gallon.
(3) ____ percent on amounts earned by a refiner that exceed the maximum gross gasoline refining margin by more than ____ cents per gallon.
(g) (1) The commission may, in its discretion, grant a refiners request for an exemption from the maximum gross gasoline refining margin upon a showing by the refiner of reasonable cause, and subject to alternative maximum margins or other conditions as the commission may set.
(2) Any refiner seeking an exemption shall file a statement with the commission, signed under penalty of perjury, setting forth the facts that form the basis for the request for exemption.
(3) The commission shall by regulation develop procedures for considering and adjudicating requests made pursuant to this subdivision.
(h) (1) The commission shall identify, on a quarterly basis, the name and address of each refiner that has exceeded the maximum gross gasoline refining margin for any month during the previous quarter, and the amount of administrative civil penalty to be assessed.
(2) Before imposing the administrative civil penalty under subdivision (f), the executive director of the commission shall issue and serve a complaint on the refiner, and the commission shall hold a hearing, adopt a decision, and require payment of the penalty in accordance with the procedures described in subdivisions (a) to (d), inclusive, of Section 25534.1.
(3) All penalties collected under this section, less refunds and reimbursement to the commission for expenses incurred in the collection of the penalties, shall be deposited into the Price Gouging Penalty Fund, which is hereby created in the State Treasury and, upon appropriation by the Legislature, shall be returned as refunds to residents of the state.
(4) The Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code) does not apply to any regulation, guideline, or adjustment of the maximum gross gasoline refining margin adopted by the commission under this chapter.
SEC. 5. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
SEC. 5. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
SEC. 5. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
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