BILL ANALYSIS
SB 260
Page 1
SENATE THIRD READING
SB 260 (Wiggins)
As Introduced February 24, 2009
Majority vote
SENATE VOTE :21-15
BUSINESS & PROFESSIONS 7-4APPROPRIATIONS 12-5
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|Ayes:|Hayashi, Eng, Hernandez, |Ayes:|De Leon, Ammiano, |
| |Nava, | |Charles Calderon, Coto, |
| |John A. Perez, Ruskin, | |Davis, |
| |Hill | |Fuentes, Hall, John A. |
| | | |Perez, |
| | | |Skinner, Solorio, |
| | | |Torlakson, Hill |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Emmerson, Conway, Niello, |Nays:|Conway, Harkey, Miller, |
| |Smyth | |Nielsen, |
| | | |Audra Strickland |
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SUMMARY : Increases from $0.02 to $0.05 the maximum fee paid to
the Department of Food and Agriculture's (DFA) Division of
Measurement Standards for each gallon of motor oil sold or
purchased on or after January 1, 2010, and authorizes the
secretary of DFA to apply a fee of $0.03 for each gallon of
motor oil sold or purchased prior to the adoption of
regulations.
EXISTING LAW :
1)Requires persons involved in the sale of motor oil, as
specified, pay a maximum fee of $0.02 for each gallon of motor
oil sold or purchased on or after July 1, 1980.
2)Allows the Secretary of DFA to establish a lower rate, and by
regulation, prescribe the frequency of payments, the
procedures for such payment, the procedures for refunds, and
the penalties for late payment.
3)Specifies that this fee be paid only once on any particular
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motor oil and that it does not apply to motor oil exported for
sale outside of California.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, if the fee were increased to the maximum allowable
under this legislation, revenue for the program would be
increased by approximately $4 million.
The projected cost of this legislation per licensed California
driver would be approximately $0.32 per year.
COMMENTS : According to the author's office, "The current
[Petroleum Products program] fee is capped at two cents per
gallon and is not sufficient to cover the current program
responsibility. The current cost of the program is $4.4 million
and annually exceeds the revenue generated by fees. The fees
generate $2.9 million and have been relatively stable for the
last several years.
"The program has been spending down reserves in the fund which
are now almost depleted as a result of increasing program costs.
The motor oil assessment cap has not been increased in 29 years.
In 1979, legislation was enacted that replaced the funding for
the Divisions' Program from a pump registration fee to a motor
oil fee assessed on each gallon of motor oil manufactured or
imported into California. The program is depleting reserve
funds and it is not covering annually increasing routine costs,
including those associated with managing the quality of new
alternative fuels coming into the marketplace. 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 years?"
The Petroleum Products program (program) ensures 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.
There are approximately 14.5 billion gallons of gasoline and 2.6
billion gallons of diesel fuel sold in California each year.
Contaminated gasoline, diesel fuel and brake fluid represent
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major areas of concern for the program. The marketplace is
consistently monitored to ensure the quality of these products,
as well as to assure the integrity of motor oils, gear oils,
automatic transmission fluids, and engine coolants. The program
operates two laboratories in the State for the testing and
analysis of routine and suspect samples. Products are removed
from the marketplace and appropriate enforcement action taken
when substandard products are found.
The program is funded by a fee of $0.02 per gallon, which is
paid on each gallon of motor oil first produced or imported into
California. This bill would increase that fee to $0.05 per
gallon.
Analysis Prepared by : Rebecca May / B. & P. / (916) 319-3301
FN: 0002579