BILL ANALYSIS                                                                                                                                                                                                    



                                                                  SB 260
                                                                  Page  1

          Date of Hearing:   July 1, 2009

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Kevin De Leon, Chair

                SB 260 (Wiggins) - As Introduced:  February 24, 2009 

          Policy Committee:                              Business and  
          Professions  Vote:                            7 - 4 

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:              

           SUMMARY  

          This bill increases from $0.02 to $0.05 the maximum fee paid to  
          the California Department of Food and Agriculture's (CDFA)  
          Division of Measurement Standards for each gallon of motor oil  
          sold or purchased on or after January 1, 2010, and authorizes  
          the secretary of CDFA to apply a fee of $0.03 for each gallon of  
          motor oil sold or purchased prior to the adoption of  
          regulations.

           FISCAL EFFECT  

          1)If the fee were increased to the maximum allowable under this  
            legislation, revenue for the program would be increased by  
            approximately $4 million. 

          2)The projected cost of this legislation per licensed California  
            driver would be approximately $0.32 per year.

           COMMENTS  

           1)Purpose . The current fee cap for the Petroleum Products  
            Program is $0.02, which generates approximately $2.7 million  
            in revenue.  The cost of the program, however is $4.6 million.  
             Increasing the fee cap would allow CDFA to collect just over  
            $4 million per year with a $0.03 per gallon fee or almost $5.5  
            million with a $0.04 fee. The program has been spending down  
            reserves in the fund to cover the additional costs of the  
            program. 

            The motor oil assessment cap has not been increased in 29  
            years.  In 1979, legislation was enacted that replaced the  








                                                                  SB 260
                                                                  Page  2

            funding for the program from a pump registration fee to a  
            motor oil fee assessed on each gallon of motor oil  
            manufactured or imported into California.  Although the number  
            of vehicles on the roads is increasing, the consumption of oil  
            per vehicle is declining due to increased mileage between oil  
            changes.  Thus the consumption of oil has remained constant in  
            recent year. According to the author, the program is depleting  
            reserve funds and the revenue does not cover annually  
            increasing routine costs, including those associated with  
            managing the quality of new alternative fuels coming into the  
            marketplace.

           2)Petroleum Products Program  . The Petroleum Products program  
            assures minimum quality standards for most automotive products  
            (gasoline, oxygenated blends, diesel fuel, motor oil, brake  
            fluid, automatic transmission fluid, antifreeze/coolants and  
            alternative engine fuels) sold in California. Additionally,  
            the program regulates the advertising and labeling of these  
            products. 
           Analysis Prepared by  :    Julie Salley-Gray / APPR. / (916)  
          319-2081