BILL NUMBER: SB 426	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  AUGUST 31, 2005
	AMENDED IN ASSEMBLY  JULY 13, 2005
	AMENDED IN ASSEMBLY  JUNE 21, 2005
	AMENDED IN SENATE  MAY 27, 2005
	AMENDED IN SENATE  APRIL 13, 2005

INTRODUCED BY   Senator Simitian
   (Principal coauthor: Assembly Member Pavley)

                        FEBRUARY 17, 2005

   An act to add  Article 2 (commencing with Section 25571)
to Chapter 6.6 of   Chapter 6.6 (commencing with Section
25570) to  Division 15 of the Public Resources Code, relating
to energy.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 426, as amended, Simitian  State Energy Resources Conservation
and Development Commission:  liquified  
liquefied  natural gas  plants   terminals
 .
   The existing Warren-Alquist State Energy Resources Conservation
and Development Act establishes the State Energy Resources
Conservation and Development Commission and requires the commission
to prepare a biennial integrated energy policy report. The act
requires the commission to certify sufficient sites and related
facilities that are required to provide a supply of electricity
sufficient to accommodate projected demand for power statewide. The
act grants the commission the exclusive authority to certify any
stationary or floating electrical generating facility using any
source of thermal energy, with a generating capacity of 50 megawatts
or more, and any facilities appurtenant thereto.
   This bill would enact the Liquefied Natural Gas Terminal
Evaluation Act which   would  require the commission to
 make a liquefied natural gas (LNG) needs assessment study
that assesses demand and supply for natural gas and alternatives to
natural gas to meet energy demands, and to determine the number of
LNG terminals, if any, needed to meet the state's projected natural
gas demand   evaluate and rank every proposed liquefied
natural gas (LNG) terminal pursuant to the act. The bill would
require that the evaluation be commenced by January 1, 2006, include
an evaluation of all   applications received by and deemed
sufficiently complete by the lead agency for the purposes of the
commission's evaluation before that date, and report the results of
that evaluation to the Governor and the Legislature by April 1, 2006.
The bill would require the commission to evaluate any LNG terminal
application received and deemed sufficiently complete on or after
January 1, 2006, by the lead agency for purposes of the commission's
evaluation within 90 days from the date the application is deemed
sufficiently complete, and to report the results of that evaluation
to the Governor and the Legislature immediately thereafter  .
 The bill would require the LNG needs assessment study, upon
the filing of an application for a permit to construct or operate an
LNG terminal prior to January 1, 2006, to be completed no later than
November 1, 2006, and incorporated into its biennial integrated
energy policy report. The bill would require the commission, for any
application received after January 1, 2006, to include an evaluation
of the additional application in an updated and revised LNG needs
assessment study prepared by a specified date if the commission can
sufficiently perform the evaluation consistent with these provisions.
 The bill would require the energy commission to hold
public hearings to consider the results of the LNG  needs
assessment study and   evaluation terminal ranking 
to provide an opportunity for public comment. All costs of the
commission for the implementation of these requirements, including
costs for any temporary personnel or consultants, would be funded
from fees charged to persons or entities  applying for
permits to construct and operate a  proposing an 
LNG terminal  according to mechanisms that would be added by
SB 1003 of the 2005-06 Regular Session   that is
evaluated and ranked pursuant to the act  . The bill would
require the commission to  compare   evaluate
 and rank  every   a  site for which
an application for  a permit to construct and operate a
  an  LNG terminal has been filed, based upon
certain criteria and in consultation with specified entities 
, and would require the commission to issue permits only according
to the rank order or priority, and as necessary  .  The bill
would  authorize the commission to issue a permit to
construct and operate a LNG terminal only if it  
require the Governor to disapprove an application for a license to
construct and operate an LNG terminal unless the proposed facility is
evaluated and ranked, as specified, and the site   is one
of the two highest ranked sites pursuant to the act, and the Governor
 determines that  among the available feasible technologies
 the technology chosen for a particular site will  have
the least   minimize  adverse public health,
safety, and environmental impacts  then feasible  .
The bill would provide that these requirements are applicable to
every LNG terminal to be constructed or operating in California,
irrespective of whether an application has been submitted for the
construction or operation of the terminal to any federal, state, or
local entity prior to the operative date of the bill.  The bill
would require th   e   State Lands Commission, or a
legislatively designated grantee   ,   to evaluate
and consider any application for   a permit to construct
and operate   LNG facilities on state tide or submerged
lands within its jurisdiction pursuant to the requirements of this
bill   .  
   The bill would provide that it shall only become operative if SB
1003 of the 2005-06 Regular Session is also enacted and becomes
operative on or before January 1, 2006. 
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  The Legislature finds and declares all of the
following:
   (a) It is the policy of the state to meet California's energy
growth by optimizing energy conservation and resource efficiency and
by reducing per capita demand to ensure a clean, safe, and reliable
supply of energy for California.
   (b) It is the policy of the state to be sensitive to the impact of
the state's energy policy on global climate change and environmental
impacts in host countries that export natural gas.
   (c) It is the policy of the state to accelerate the use of
renewable energy resources wherever feasible and to ensure a diverse
and affordable portfolio of fuel sources to minimize the opportunity
for supply interruptions.
   (d) The state has a  lead  role in decisions
regarding the siting and design of new onshore and offshore
infrastructure for the importation of liquefied natural gas that
results in impacts to public health, safety, and the environment.
   (e) Laws and regulations enacted by the state to address consumer,
community, public health, safety, and environmental impacts of new
onshore and offshore imported liquefied natural gas infrastructure,
where more protective, should not be preempted by weaker, less
protective federal laws and regulations.
   (f) Decisions regarding the importation of liquefied natural gas
should be based on a comprehensive review of current and projected
natural gas supply and demand in California, and alternative sources
of supply.
   (g) Construction and operation of liquefied natural gas onshore
and offshore infrastructure may commence after completion of a
rigorous evaluation that analyzes the need for liquefied natural gas
and the relative merits of pending and future proposals with respect
to business, consumer, community, public health, safety, and
environmental impacts. 
   (h) Based upon the Tenth Amendment to the United States
Constitution, federal law neither abrogates a state's property rights
within its tide and submerged lands nor provides the power of
eminent domain to the Federal Energy Regulatory Commission with
respect to the siting liquefied natural gas facilities.  
   (i) Nothing in this bill shall be construed as an absolute
prohibition on the construction of LNG facilities on or off the
California coast. It is the intent of the State of California to
facilitate a comprehensive and efficient review of applications for
liquefied natural gas terminals and their related infrastructure in
the state.  
  SEC. 2.   Chapter 6.6 (commencing with Section 25570) is added
to Division 15 of the Public Resources Code, to read: 
      CHAPTER 6.6.  LIQUEFIED NATURAL GAS TERMINAL EVALUATION ACT


      Article 1.  General Provisions

   25570.  This chapter shall be known and may be cited as the
Liquefied Natural Gas Terminal Evaluation Act.
   25570.1.  For purposes of this chapter, the following definitions
apply:
   (a) "Feasible" means capable of being accomplished in a successful
manner within a reasonable period of time, taking into account all
of the following:
   (1) Economic, environmental, social, technological, safety, and
reliability factors.
   (2) Gas supply and demand forecasts.
   (3) Alternative sources of natural gas.
   (b) "Liquefied natural gas" or "LNG" means natural gas cooled to
minus 259 degrees Fahrenheit so that it forms a liquid at
approximately atmospheric pressure.
   (c) "Liquefied natural gas terminal," "terminal," or "LNG
terminal," means facilities designed to receive liquefied natural gas
from oceangoing vessels, including those facilities required for
storage and regasification of the liquefied natural gas and those
pipelines and facilities necessary for the transmission of the
regasified natural gas to the point of interconnection with existing
pipelines.
   (d) "Person" means an individual, organization, partnership, or
other business association or corporation, the federal government,
the state government, any local government, and any agency or
instrumentality of any of those entities.

      Article 2.  Evaluation of Potential Liquefied Natural Gas
Terminals and Alternatives

   25571.  In furtherance of and in conformance with the federal
Deepwater Port Act of 1974 (33 U.S.C. Sec. 1501 et seq.), as amended,
the Governor shall disapprove an application for a license to
construct and operate a liquefied natural gas terminal unless:
   (a) The proposed facility is evaluated and its site ranked
pursuant to this article.
   (b) The site is one of the two highest ranked sites pursuant to
this article.
   (c) The Governor determines, based on all filings and pleadings,
that among the available feasible technologies for transporting and
delivering natural gas through a liquefied natural gas process, the
technology chosen for a particular site will minimize adverse public
health, safety, and environmental impacts.
   25571.2.  (a) The commission shall evaluate and rank every
proposed LNG terminal pursuant to this article.  The evaluation shall
meet all of the following requirements:
   (1) Be commenced by January 1, 2006.
   (2) Include an evaluation of all applications received by and
deemed sufficiently complete by the lead agency for purposes of the
commission's evaluation before January 1, 2006.
   (3) Be completed and the results reported to the Governor and the
Legislature by April 1, 2006.
   (b) The commission shall evaluate any LNG terminal application
that is received and deemed sufficiently complete by the lead agency
for purposes of the commission's evaluation on or after January 1,
2006, within 90 days from the date the application is deemed
sufficiently complete, and shall report the results of that
evaluation to the Governor and the Legislature immediately
thereafter. Any evaluation completed prior to December 31, 2006,
shall include an update of the ranking completed and reported
pursuant to subdivision (a).
   (c) All documents prepared prior to January 1, 2006, and all
evaluations commenced prior to January 1, 2006, and certified as
complete by April 1, 2006, shall be sufficient for purposes of this
article. Those documents include draft and final environmental impact
reports and statements prepared pursuant to the National
Environmental Policy Act of 1969 (42 U.S.C. Sec. 4321 et seq.) and
the California Environmental Quality Act (Division 13 (commencing
with Section 21000).
   (d) The commission shall evaluate and rank each project by using
the documents provided by the applicant to comply with the
requirements of the federal Deepwater Port Act of 1974 (33 U.S.C.
Sec. 1501 et seq.), as amended, and the Federal Energy Regulatory
Commission's licensing authority. Nothing in this section authorizes
the commission to request confidential financial or market
information from any applicant for purposes of the commission's
evaluation.
   (e) The commission shall hold at least two public hearings to
consider the results of the LNG terminal evaluation and ranking in
order to provide an opportunity for public comment. At least one
public hearing shall be held in any county that includes a site that
has been evaluated. If the terminal is not proposed to be located
within a city or county, the hearings shall be in the city or county
nearest the proposed location.
   (f) All costs incurred by the commission for the implementation of
this article, including costs for any temporary personnel or
consultants, shall be funded by fees charged to persons or entities
proposing an LNG terminal that is evaluated and ranked pursuant to
this article.
   25571.4.  (a) An evaluation and ranking of a facility shall be
based on the following criteria:
   (1) The extent to which the facility is necessary to meet the
future energy needs of California.
   (2) The extent to which environmentally less damaging alternatives
are feasible to meet California's future energy needs.
   (3) The extent to which a no-build alternative is or is not
economically feasible for California's economy.
   (4) The extent to which the facility affects the environment,
public health, safety, and welfare, including any disproportionate
negative effects upon low-income or disadvantaged communities.
   (5) The extent to which the facility, including supporting
infrastructure and resulting ship and air traffic, could impact
national security, along with any cumulative impacts upon national
security that could result from multiple facilities. Potential
impacts on national security include any effect that the facility may
have on the land, sea, and airspace identified by the Department of
Defense, any of its component armed services, or the United States
Coast Guard, for conducting operations, for conducting training, or
for the development and testing of weapons, sensors, and tactics.
   (6) The economic merits of the respective proposals, including,
but not limited to, the reliability and sustainability of the
proposed supply.
   (b) In conducting the evaluation and ranking, the commission shall
consult with all entities of local government that would be affected
by a proposed liquefied natural gas terminal, the California Coastal
Commission, the State Lands Commission, the Public Utilities
Commission, the Office of Emergency Services, the Department of Fish
and Game, the State Water Resources Control Board, the affected
California regional water quality control board, the State Air
Resources Board, the Federal Energy Regulatory Commission, the
Department of Defense and its component armed services, and the
United States Coast Guard.
   25571.8. (a)  This article does not limit any existing authority
of state government pursuant to Division 13 (commencing with Section
21000).
   (b) The requirements of this article are applicable to every LNG
terminal to be constructed or operating in California, irrespective
of whether an application has been submitted for the construction or
operation of the terminal to any federal, state, or local entity
prior to the operative date of this article.

      Article 3.  Evaluation of Potential Liquefied Natural Gas
Facilities on State Tide and Submerged Lands

   25572.  The State Lands Commission, or a legislatively designated
grantee, shall evaluate and consider applications for a permit to
construct and operate liquefied natural gas facilities on state tide
or submerged lands within its jurisdiction pursuant to Article 2
(commencing with 25571).  All matter omitted in this version of
the bill appears in the bill as amended in Senate, July 13, 2005
(JR11)