BILL ANALYSIS                                                                                                                                                                                                    



          SENATE COMMITTEE ON APPROPRIATIONS
                             Senator Ricardo Lara, Chair
                            2015 - 2016  Regular  Session

          SB 778 (Allen) - Automotive oil source reduction.
          
           ----------------------------------------------------------------- 
          |                                                                 |
          |                                                                 |
          |                                                                 |
           ----------------------------------------------------------------- 
          |--------------------------------+--------------------------------|
          |                                |                                |
          |Version: April 20, 2015         |Policy Vote: E.Q. 4 - 1         |
          |                                |                                |
          |--------------------------------+--------------------------------|
          |                                |                                |
          |Urgency: No                     |Mandate: Yes                    |
          |                                |                                |
          |--------------------------------+--------------------------------|
          |                                |                                |
          |Hearing Date: May 11, 2015      |Consultant: Marie Liu           |
          |                                |                                |
           ----------------------------------------------------------------- 


          This bill meets the criteria for referral to the Suspense File. 


          Bill  
          Summary:  SB 778 would require that, by January 1, 2018, all  
          automotive oil sold in the state be certified by the oil  
          manufacturer to achieve a minimum useful life of 10,000 miles.


          Fiscal  
          Impact:  Unknown costs, possibly in the hundreds of thousands of  
          dollars, from the General Fund and various special funds for  
          increased automotive oil costs for the state's automotive fleet.  



          Background:  Under the existing California Oil Recycling Enhancement Act  
          (PRC 48600 et seq.), the Department of Resources Recycling and  
          Recovery (CalRecycle) is authorized to develop and advance  
          developments in lubricating oil, such as oil recycling,  
          collection, research, testing, and re-refining. This program  
          also provides financial support to local curbside oil pickup  
          programs, local collection facilities, and rebates to oil  







          SB 778 (Allen)                                         Page 1 of  
          ?
          
          
          manufactures with fees assessed on all oil sold in California. 


          Proposed Law:  
            This bill would require that all automotive oil sold in the  
          state after January 1, 2018 be certified by the oil manufacturer  
          to achieve a minimum useful life of 10,000 miles when used in  
          accordance with the automobile manufacturers' recommendations.  
          The oil would also be required to meet current automotive  
          industry standards.


          Staff  
          Comments:  This bill requires an oil manufacturer to "certify"  
          its minimum life. However, the bill is silent as to whom the oil  
          manufacturer is certifying to. According the author's office,  
          the intent of this bill is to require the certification be done  
          by the American Petroleum Institute (API). According to API's  
          website, "API's Engine Oil Licensing and Certification system  
          (EOLCS) is a voluntary licensing and certification program that  
          authorizes engine oil marketers who meet specified requirements  
          to use the API Engine Oil Quality Marks." Staff recommends that  
          this intent be clarified. In the absence of such amendments, the  
          bill could be interpreted to require CalRecycle to develop a  
          certification process for automotive oil. CalRecycle would be  
          the responsible agency because this bill is written as a change  
          to the California Oil Recycling Enhancement Act which is  
          administered by CalRecycle. 
          Staff notes that, as discussed by the Environmental Quality  
          Committee, the Department of Food and Agriculture maintains and  
          enforces minimum quality specifications for most petroleum and  
          automotive products under its Petroleum Products Program. 


          This bill would also likely impact the cost to maintain the  
          state's automotive fleet. To achieve the mileage standard under  
          this bill, oil manufacturers will have to move towards  
          synthetic-blend oils or full-synthetic oil. While these oils  
          have a longer useful life, full-synthetic oils are about three  
          times as expensive as conventional oil. At least some of the  
          higher oil costs could be offset by less frequent oil changes;  
          however, staff notes that DGS follows manufacturers recommended  
          replacement intervals so the long-term benefits of  
          full-synthetic oil required by this bill will only be achieved  








          SB 778 (Allen)                                         Page 2 of  
          ?
          
          
          if it is consistent with the vehicle's maintenance schedule. 




                                      -- END --