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AB-1265 Transportation fuels: gasoline specifications.(2023-2024)

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Date Published: 03/09/2023 09:00 PM
AB1265:v98#DOCUMENT

Amended  IN  Assembly  March 09, 2023

CALIFORNIA LEGISLATURE— 2023–2024 REGULAR SESSION

Assembly Bill
No. 1265

Introduced by Assembly Member Gallagher
(Coauthors: Assembly Members Alanis, Chen, Megan Dahle, Essayli, Flora, Mathis, Jim Patterson, Joe Patterson, and Ta)

February 16, 2023

An act to add Section 38567.5 to the Health and Safety Code, relating to greenhouse gases. An act to amend Section 43013.2 of, and to add Sections 38562.1 and 43830.5 to, the Health and Safety Code, relating to air pollution.


LEGISLATIVE COUNSEL'S DIGEST


AB 1265, as amended, Gallagher. Low Carbon Fuel Standard regulations: repeal. Transportation fuels: gasoline specifications.
The California Global Warming Solutions Act of 2006 establishes the State Air Resources Board as the state agency responsible for monitoring and regulating sources emitting greenhouse gases. The act requires the state board to approve a statewide greenhouse gas emissions limit equivalent to the statewide greenhouse gas emissions level in 1990 and to ensure the statewide greenhouse gas emissions are reduced to at least 40% below the statewide greenhouse gas emissions limit by 2030. The act authorizes the state board to include the use of market-based compliance mechanisms in its regulation of greenhouse gas emissions.
This bill would specify that transportation fuels are not subject to regulations implementing a market-based compliance mechanism for greenhouse gas emissions.
Existing law authorizes the state board to adopt and implement motor vehicle fuel specifications for the control of air contaminants and sources of air pollution. Existing law authorizes the state board to grant variances from the gasoline specifications, as provided.
This bill would require the state board to grant variances from gasoline specifications, including for gasoline imported from outside the state, whenever a refinery outage or other supply interruption would result in substantial short-term price increases, as specified.
Existing law requires the state board to establish, by regulation, maximum standards for volatility of gasoline, as provided. Pursuant to these authorities, the state board has adopted the California Reformulated Gasoline regulations, which include regulations establishing the maximum Reid vapor pressure of gasoline for various regions of the state at specified time periods.
This bill would require the state board to waive the Reid vapor pressure requirement on summer-blend gasoline under the California Reformulated Gasoline regulations and to allow for the early transition to winter-blend gasoline if the state board determines that the gasoline market is experiencing a sudden and unusual increase in gasoline prices.

The California Global Warming Solutions Act of 2006 establishes the State Air Resources Board as the state agency responsible for monitoring and regulating sources emitting greenhouse gases. The act requires the state board to adopt rules and regulations to achieve the maximum technologically feasible and cost-effective greenhouse gas emissions reductions to ensure that the statewide greenhouse gas emissions are reduced to at least 40% below the statewide greenhouse gas emissions limit, as defined, no later than December 31, 2030. Pursuant to the act, the state board has adopted the Low Carbon Fuel Standard regulations.

This bill would repeal the Low Carbon Fuel Standard regulations.

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 38562.1 is added to the Health and Safety Code, to read:

38562.1.
 Transportation fuels are not subject to regulations implementing a market-based compliance mechanism adopted pursuant to Section 38562 and Part 5 (commencing with Section 38570).

SEC. 2.

 Section 43013.2 of the Health and Safety Code is amended to read:

43013.2.
 (a)  (1)  The Legislature finds and declares that variances from the state board’s gasoline specifications may be needed if gasoline producers cannot meet the specifications as required due to circumstances beyond their reasonable control, or to prevent sudden increases in gasoline prices for California consumers and businesses, and that the state board’s process for granting variances from fuel specifications should be clarified.
(2) It is the intent of the Legislature that the variance process consider the impacts of granting the variance on all parties, including the applicant, the public, the producers of complying fuel, and upon air quality.
(b) The state board may grant variances from gasoline specifications adopted by the state board pursuant to Sections 43013 and 43018. In granting a variance, the board may impose fees and conditions.
(c) The state board shall adopt regulations to implement this section in accordance with Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code. The regulations shall establish guidelines for the consideration of variances and the imposition of fees and conditions. Any fees or conditions shall be imposed in a fair and equitable manner consistent with the regulations. The regulations shall include methods for estimating excess emissions and factors to be considered in determining what is beyond the reasonable control of the applicant. The regulations also shall establish a schedule of fees to be paid by an applicant for a variance to cover the reasonable and necessary costs to the state board in processing the variance. The state board shall adopt initial regulations as emergency regulations after conducting at least one public workshop. The initial adoption of emergency regulations following the effective date of this section shall be deemed to be an emergency and necessary for the immediate preservation of the public peace, health and safety, or general welfare.
(d) All variance fee revenues collected pursuant to this section by the state board, except those fees paid by an applicant for a variance to cover the reasonable and necessary costs to the state board for processing the variance, shall be transmitted to the Treasurer for deposit in the High Polluter Repair or Removal Account created pursuant to subdivision (a) of Section 44091. All money deposited in the account pursuant to this section shall be available, upon appropriation by the Legislature, to implement a program for accelerated retirement of light-duty vehicles to achieve the emission reductions required by the M-1 Strategy of the 1994 State Implementation Plan.
(e) In considering whether to grant a variance, and with regard to any fees and conditions that are imposed as part of the variance, the state board shall take into account whether granting the variance will place the applicant at a cost advantage over other persons, including those persons who produce complying gasoline.
(f) Any determination of the state board, or the executive officer of the state board pursuant to the authority delegated pursuant to Section 39516, regarding the issuance of any variance from gasoline specifications shall be based solely upon substantial evidence in the record of the variance proceeding. The variance shall be valid for a period not exceeding 120 days, commencing on or after March 1, 1996. The variance may be extended, subject to this section, for up to 90 additional days, upon a showing of need. The board shall grant a variance only for the minimum period required to attain compliance.
(g) If a physical catastrophe occurs to a producer of complying gasoline, the state board may extend a variance upon the showing of need. Notwithstanding subdivision (f), any variance extension related to a physical catastrophe shall be approved by the state board. As used in this subdivision, “physical catastrophe” means a sudden unforeseen emergency beyond the reasonable control of the refiner, causing the severe reduction or total loss of one or more critical refinery units that materially impact the refiner’s ability to produce complying gasoline. “Physical catastrophe” does not include events which are not physical in nature such as design errors or omissions, financial or economic burdens, or any reduction in production that is not the direct result of qualifying physical damage.
(h) Notwithstanding any other provision of law, except in the case of emergency variances, the state board shall provide at least 10 days’ public notice of its consideration of any variance or extension.
(i) Notwithstanding any other provision of law, the state board shall grant variances from gasoline specifications adopted by the state board, including for the importation of gasoline from outside the state, whenever a refinery outage or other similar supply interruption would otherwise result in substantial short-term price increases for California consumers and businesses.

(i)

(j) Subdivisions (b) and (e) do not constitute a change in, but are declaratory of, existing law.

SEC. 3.

 Section 43830.5 is added to the Health and Safety Code, to read:

43830.5.
 The state board shall waive the Reid vapor pressure requirement on summer-blend gasoline specified in Section 2262.4 of Title 13 of the California Code of Regulations and shall allow for the early transition to winter-blend gasoline to lower gasoline prices for California consumers and businesses if the state board determines that the gasoline market is experiencing a sudden and unusual increase in gasoline prices.

SECTION 1.Section 38567.5 is added to the Health and Safety Code, to read:
38567.5.

(a)For purposes of this section, “Low Carbon Fuel Standard” means the Low Carbon Fuel Standard regulations (Subarticle 7 (commencing with Section 95480) of Article 4 of Subchapter 10 of Chapter 1 of Division 3 of Title 17 of the California Code of Regulations).

(b)The Low Carbon Fuel Standard is hereby repealed.