BILL ANALYSIS                                                                                                                                                                                                    



                                                                  SB 210
                                                                  Page  1

          Date of Hearing:   August 22, 2007 

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                  Mark Leno, Chair

                    SB 210 (Kehoe) - As Amended:  August 20, 2007 

          Policy Committee:                             Transportation  
          Vote:        8-6
                       Natural Resources                      6-3

          Urgency:     No                   State Mandated Local Program:  
          Yes    Reimbursable:              No

           SUMMARY  

          This bill requires the Air Resources Board (ARB), by January 1,  
          2010, to adopt, implement and enforce a low-carbon fuel standard  
          (LCFS) that achieves maximum technologically feasible and  
          cost-effective greenhouse gas (GHG) emissions reductions,  
          including a minimum 10% reduction in life-cycle GHG by 2020.   
          Specifically, this bill:

          1)Requires the LCFS to maintain or improve reduction of  
            emissions of air pollutants and toxic air contaminants as  
            measured on a life-cycle basis that include all activities  
            related to the fuel's production, extraction, cultivation,  
            transportation, storage and use.

          2)Specifies that a fuel produced from biomass derived from  
            certain public lands, and lands newly-converted from open  
            space, does not meet the LCFS.

          3)Requires the ARB, by January 1, 2010, to develop environmental  
            reporting requirements to determine the environmental impacts  
            associated with producing the feedstock and fuel that is  
            subject to the LCFS.

          4)Requires the California Energy Commission (CEC), by June 30,  
            2013 and triennially thereafter, to assess the actual and  
            expected environmental impacts associated with LCFS  
            implementation.

          5)Requires the CEC, by June 30, 2010, to update and reissue its  
            alternative fuels report.








                                                                  SB 210
                                                                  Page  2


          FISCAL EFFECT  

          1)Moderate costs, in the range of $1.5 million spread over three  
            years starting in 2007-08, to the ARB to develop and begin  
            enforcing the LCFS, and to develop related environmental  
            reporting requirements.  To the extent the ARB is already  
            conducting some of these activities under an executive order  
            issued by the governor, these costs would be reduced.  (Motor  
            Vehicle Account)

          2)Moderate one-time costs, $375,000 in 2008-09 and 2009-10, to  
            the CEC to update its alternative fuels report.  (Energy  
            Resources Programs Account)

          3)Moderate GF costs, in the range of $180,000 in 2012-13 and  
            triennially thereafter, to the CEC to assess LCFS  
            environmental impacts and to issue recommendations on how to  
            minimize these impacts.

           COMMENTS  

           1)Rationale  .  The author believes reducing the level of carbon  
            in engine fuels or reducing the emission of carbon from the  
            production and use of these fuels, especially in light of the  
            fact that the transportation sector accounts for over 40% of  
            GHG emissions in California, would be a major means by which  
            to achieve the GHG emission reductions mandated by    AB 32  
            (Nunez) - Chapter 488, Statutes of 2006.  

           2)Governor's Executive Order  .  In January, Governor  
            Schwarzenegger issued executive order S-01-07, which  
            establishes a goal to reduce, by 10%, the carbon intensity of  
            California's transportation fuels by 2020 and to require the  
            ARB to consider adopting an LCFS to implement this goal.  In  
            June, the ARB adopted establishment of an LCFS as an early  
            action measure under the AB 32 process.  

           Analysis Prepared by  :    Steve Archibald / APPR. / (916)  
          319-2081